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Paper presented at the 39th EBES conference, Rome, 6-8 April 2022

While innovation policy today is largely focused on fostering startups, there is a clear West-East divide in Europe at the city level, both in terms of startup performance and in terms of the strategic direction of startup ecosystems. This gap is particularly large for startups active in the new, data-driven technologies, Big Data and Artificial Intelligence, which are considered as future general-purpose technologies. Therefore, the main objectives of this study are, firstly, to analyse the startup performances of European cities in these technologies, secondly, to examine their impact on the strategic and geographic direction of ecosystems, and thirdly, to identify the main policy challenges involved.

To analyse the performance, we retrieved data from on over 3,000 scaleups (startups with more than €1 million in funding) in Big Data and Artificial Intelligence technologies, matched them to the Functional Urban Areas of the OECD-EU classification, and calculated the basic measures such as the number and total funding of scaleups, and related them to population size and GDP. For examining the strategic and geographic direction of the ecosystems, we focused on two cities, Paris and Warsaw, where we conducted semi-structured interviews with key actors, primarily with accelerators.

Our results show that while Paris' performance is much better than Warsaw's, the two cities also differ in terms of strategic and geographic orientation of the ecosystem, which is more diverse in Paris than in Warsaw. In contrast, in the startup ecosystem in Warsaw - similar to other major cities in Central and Eastern Europe - there is a strong drive to build bridges to the global startup hubs outside of Europe. Nevertheless, while this orientation of the ecosystem could be helpful in catch-up in performance, it also entails the risk of dependency.