The 'deep tech' prepare for the end of Next Generation funds

Deep technology companies are looking into a "golden era" after the pandemic with challenges such as access to financing or the vacuum that European aid will leave.

Twenty years ago, Europe began to deploy innovation policies to stimulate technological entrepreneurship in the image and likeness of what was already being done in Silicon Valley. Two decades later, the creation of start-ups on the continent is commonplace. However, most of these projects arise from street entrepreneurs, without scientific or research background, which ends up translating into a primacy of initiatives focused, for example, on electronic commerce.

Glovo, Wallapop or Cabify, with their differences, are three clear examples of this trend in Spain. However, scientific entrepreneurship and the so-called deep tech (deep technologies) are beginning to emerge despite the challenges they face, such as access to financing, long periods of development, the rigidity of universities or the next end of the Next Generation funds.

All this was discussed at the Deep tech and entrepreneurship forum, what impact does scientific entrepreneurship have on the economy and society?, organized by EXPANSIÓN in collaboration with Esade.

Pere Condom-Vilà, director of the research and technology transfer office at the University of Girona, clarified that in order to find out if a company is deep tech, one must ask "how many doctors and patents it has, since that creates barriers to entry as a factor of competitiveness, something that most e-commerce companies don't have". "The challenge is to unite both phenomena, which are very separate," he stressed.

For his part, Santiago Royo, founder of Beamagine, recalled that one of the handicaps of deep tech companies is that, despite being more resilient in crises, they suffer more from a lack of access to financing, especially large volumes, for their long periods of product development. "The Next Generations are being very important and in two years we will have a wave of start-up launches thanks to them, but the funds will end in 2025, what will happen next?" He pointed out.

Xavier Ferràs, professor in the department of operations, innovation and data science at Esade, tried to answer that question. "Incipient industries that are created can remain in a vacuum, so we must demystify the concept of transfer and bet on competition: work with entities and use these technologies," he said. "They are exponential technologies that affect all industries and create barriers to entry, which is interesting for countries: there must be public policies for them to reach the market," he urged.

"There is venture capital that is going to invest in the sector, since the next Amazon and Tesla are going to be deep tech", ventured Luis Pareras, managing partner of Invivo. "Investing in this industry is uncomfortable, because of the pace at which it progresses or because of the ethical problems, but we are going there," Parera stressed. "It is essential that the investor understands the technology, the transfer bridges must be fast because in deep tech we are always late, if you don't run the opportunity vanishes," he said.

"Our perspective is that there is great potential in the deep tech sector, but it is not easy to find the right investor profiles," explained Xavier López, Corporate and Operations General Manager of Eurecat. "We must capillarize technological innovation towards the business fabric", he bet.

Anna Sánchez Granados, president of the commission of the Digital Society for the Promotion of Work, demanded, in this sense, a greater homogenization of the language between the different actors, from entrepreneurs to investors, through the new ISO of innovation and advocated for a change in public investment, very focused on basic science, to make deep tech part of Europe's strategic autonomy.

"Research is transforming money into knowledge; we have a hole in innovating, which is converting knowledge into money: there we have not had public policies that have resulted," summed up Luis Parera, who also warned about excessive aid for projects with no future.