Japan, South Korea and Taiwan have positioned startups not solely as engines of financial development however as key pillars of nationwide safety. Robyn Klingler-Vidra and Ramon Pacheco Pardo argue this method affords precious classes for Europe.
Robyn Klingler-Vidra might be talking at an LSE occasion on 17 June titled Tech and the way forward for the world economic system as a part of the LSE Competition 2025.
In an period of rising geopolitical rigidity, financial safety has turn into a strategic crucial. Throughout Europe, policymakers are grappling with the right way to scale back dependencies on unreliable companions, safe provide chains in essential applied sciences – from semiconductors to vitality to biotech – and use industrial coverage to spice up financial competitiveness and innovation.
There are limits on Europe’s express funding of navy functions, probably stemming from considerations about liberal norms and (relatedly) not desirous to hasten tit-for-tat navy build-ups elsewhere. The query turns into: the right way to keep European values and safety?
Relatively than China or the US as the fashions to comply with, we advise Europe look to Northeast Asia, the place Japan, South Korea and Taiwan have positioned startups not merely as engines of job creation, financial development and innovation however as pillars of nationwide safety alongside nationwide champion companies. Their approaches provide precious classes for Europe.
Startups to inject “revolutionary DNA”
One hanging function of the Northeast Asian mannequin is the combination of startups into open innovation ecosystems anchored by massive companies. Japan, South Korea and Taiwan are sometimes related to powerhouse companies, like Hyundai, Toyota and TSMC, to call just some.
This layer of business energy advantages from a dynamic and more and more institutionalised view of startups as a supply of financial resilience for these lead companies and for the nation. Industrial giants collaborate straight with startups by government-organised initiatives and areas. Initiatives like Japan’s J-Startup programme, South Korea’s Centres for Artistic Economic system & Innovation and Taiwan’s Tech Area embed startup assist into the material of nationwide innovation capabilities. These programmes have endured management modifications, demonstrating that assist for startups has turn into a bipartisan, long-term nationwide precedence.
This isn’t the “disruption” narrative of Silicon Valley, the place startups are sometimes portrayed as challengers to incumbents. As an alternative, startups complement the commercial base of huge enterprise by injecting agility, novel concepts and rising applied sciences into mature sectors. From a safety lens, this bolsters nationwide manufacturing capabilities, like subsequent era shipyards, which have apparent provide chain autonomy advantages.
Europe’s siloes slightly than an entire of system method
Europe, against this, nonetheless too typically treats startups as peripheral to core financial and safety considerations. European innovation funding mechanisms similar to Horizon Europe or the European Innovation Council have not often been tied on to safety objectives similar to technological sovereignty or systemic danger mitigation.
The European Funding Financial institution has lifted some limitations on funding in safety and defence, and has even raised defence as a core strategic precedence, nevertheless it nonetheless doesn’t finance weapons or ammunition. Within the period of financial safety and industrial coverage, this method places Europe at an obstacle in comparison with its friends in North America or Northeast Asia.
An important distinction from Northeast Asia stems from the truth that EU efforts have a tendency to have interaction massive companies and startups by totally different programmes. Because it stands, the nascent funding for dual-use startups by the European Innovation Council and the TechEU Scale-up Fund targets startups individually from main companies. This misses the “complete of system” method that Northeast Asia pursues. We contend that Europe ought to think about how its funding in dual-use startups, introduced within the March 2025 defence spending package deal, can contain (and profit) its personal industrial heavyweights, like Airbus, Bosch, Renault and Siemens.
Ukraine’s drone innovation affords an vital counter level. The scrappy, adaptable method to drone know-how by lots of of producers has been lauded because the nation’s “strategic edge” and is central to its warfare capabilities. Inputs and insights are drawn throughout many companies, slightly than by siloed venture funding mechanisms emanating from Brussels.
Embracing startups in a dual-use mentality
In Northeast Asia, the social function of startups – from a governmental perspective – has lengthy been each to ship on home and exterior goals. To spice up job creation, innovation prowess and financial development in addition to nationwide safety. As such, startups are embedded within the nationwide safety infrastructure. Startups are dual-use in that they contribute to the economic system and society in addition to on the express Realpolitik degree.
The notion that revolutionary startups contribute to nationwide safety is an concept that’s lengthy entrenched in the USA. The origins of Silicon Valley stem from the WWI crucial of growing radar and different applied sciences. At present, Silicon Valley’s massive companies, enterprise capitalists and the federal government are once more fuelling a increase in defence tech and American dynamism.
If Europe needs strategic autonomy and to keep up its capacity to reply successfully to world disruptions, it should likewise view startups not as a distinct segment financial class that’s about job creation, dynamism and self-actualisation, however as central to safeguarding its future and as a part of its wider economic system.
Japan, South Korea and Taiwan provide a blueprint for the way democracies can combine startups into their financial safety methods. They present that robust authorities coordination and open innovation with massive companies can enhance nationwide resilience. For Europe, the query is just not whether or not to comply with this mannequin, however how rapidly it could actually adapt and implement it. To get there, Europe wants an express financial safety agenda that features startups and lead companies.
For extra data, see the authors’ accompanying e-book, Startup Capitalism: New Approaches to Innovation Methods in East Asia (Cornell College Press, 2025). Robyn Klingler-Vidra might be talking at an LSE Competition occasion on 17 June 2025 titled Tech and the way forward for the world economic system.
Word: This text offers the views of the authors, not the place of EUROPP – European Politics and Coverage or the London College of Economics. Featured picture credit score: Flying Digital camera / Shutterstock.com
