The Covid-19 pandemic hit the global economy with a sudden and unexpected jolt. Governments scrambled to put strategies in place, companies suddenly transitioned to remote working, and people quickly adjusted as best as possible to the uncertainty of pandemic life.
Following the release of fDi’s 2020/2021 European Cities and Regions of the Future report, we spoke about how vital tech cities are to national economies. The past year has put this statement to the test, and went beyond expectations with stories of tech communities not only helping to keep national economies afloat, but also quickly pivoting to provide solutions to challenges facing society at large.
Collaborating was key
The strongest Covid-19 responses came from collaborations between the tech community, universities and governmental bodies. Tech cities that had invested in medtech start-ups and research and development (R&D) were able to quickly develop and test new solutions.
For example, Zürich’s tech ecosystem has long been centred around investments in university-led R&D programmes. By providing guidance, research facilities and investment opportunities, these programmes have produced several successful spin-offs. During the pandemic, this strategy really paid off.
The public research university ETH Zürich’s spin-off HeiQ developed textiles resistant to the coronavirus. Diaxxo, another ETH spin-off, developed an ultra-fast polymerase chain reaction testing device. Meanwhile, Molecular Partners — spin-off of the University of Zürich, developed a coronavirus vaccine candidate.
Governments and large tech companies also joined forces to develop much-needed medical equipment.
In Barcelona, a project promoted by the Free Trade Zone Consortium of Barcelona, Leitat technology centre and tech companies HP, Navantia and Airbus, created the first industrially-produced field respirator prepared to support intensive care units using a 3D printing production process.
Cross-border collaborations within the medtech community were not just helpful, they were essential to quickly roll out solutions across the EU.
GeneMe, a biotech start-up based in Gdansk, Poland, developed and patented a universal protein that allows for the production of highly accurate, rapid, molecular genetic Covid-19 tests. Their flagship test, Frankd, can be completed on-premises in 13–25 minutes with no laboratory involvement. At only £10, the solution has the potential to provide much needed relief to businesses needing to start back up their operations.
But to quickly bring this new advancement to market, GeneMe needed to partner with UK-based health app, Yoti. With the app, which is now available in English, Portuguese, Spanish, French, German and Polish, they have been able to roll their solution out to other countries across Europe.
Mobilising the tech community in Porto
It was not just medtech start-ups that provided much needed support. Across sectors and industries, the tech community mobilised to create a united front.
Perhaps one of the most impressive examples was Porto’s Tech4Covid19 initiative. Launched by a small group of entrepreneurs and start-ups, they were able to get more than 120 companies and 2500 people to join in finding solutions to 20 different Covid-19 related problems the city was facing within just six days.
This included making medical appointments available online, developing a contact-tracing app, facilitating grocery deliveries and raising more than €100,000 to buy hospital materials.
Tech4Covid19 has since turned into a national movement of more than 5000 engineers, designers, marketers and health professionals, among many others.
Shortening medical supply chains in Paris
With high demand for supplies and the added challenge of social distancing, logistics during the pandemic was a nightmare. Many hospitals found themselves running low on basics such as masks, hand sanitisers and surgical gowns.
In Paris, Mirakl, a start-up specialising in e-commerce and marketplace solutions, answered this call by creating a B2B platform called StopCovid19.fr. Operated free of charge and supported by the Ministry of Economics and Finance, the platform was a marketplace for healthcare professionals to place their orders for gel, masks, gowns and other essential products directly with manufacturers, wholesalers, subcontractors and retailers.
By centralising supply and demand in one secure platform, the city was able to shorten medical supply chains and meet demand at an accelerated rate.
Easing unemployment and supporting local businesses
Beyond the fight against Covid-19, the pandemic caused a global economic crisis with heavy social implications. Rapid surges of unemployment, struggling local businesses and increasing poverty were some of the biggest challenges governments had to face.
The UN estimates that the economic crisis caused by the pandemic could push global unemployment to more than 200 million in 2022. Thanks to employee-retention schemes, unemployment rates within the EU were not as severely affected as in other regions. However, a study by the insurance company Euler Hermes found that the vast majority of workers who lost their jobs in early 2020, or were already unemployed, will struggle to find employment as furloughed workers will be the first to be reabsorbed into companies.
To address rising unemployment, the city of Gothenburg, Sweden, launched the Competence+ project with the help of its tech community. This is centred on reskilling workers who have been laid off due to the pandemic, and finding employment for them within start-ups and scale-ups.
Small and medium-sized enterprises also faced significant challenges when social distancing meant going digital or going bust — a group that, according to a study by McKinsey, accounts for more than two-thirds of the workforce and more than half of the economic value added in Europe.
To help these small local businesses, the London-based crowdfunding platform Crowdfunder partnered with the mayor of London’s office to launch the Pay It Forward London initiative. This supported businesses who sell directly to the public by making it possible to pre-sell their goods and services to deliver in the future, ensuring vital cash flow during the crisis.
Finding solutions to the most pressing social issues
The transition to remote working was perhaps even more abrupt for schools than it was for businesses. To help teachers transition their students to remote schooling, Helsinki’s Koulu.me developed a database of edtech solutions.
Loneliness brought on by life in quarantine was another issue that permeated throughout society. And the group most affected by this was the elderly who, in many cases, were completely isolated for their own safety. Yet another Helsinki based start-up, Fiksari, created a solution to connect pensioners with students, providing much needed social contact.
Supporting tech communities
If start-ups were a major source of innovation during the pandemic, many also experienced massive drops in revenue. Venture capital (VC) investment boomed in sectors such as medtech and reached record highs, while many were wary to invest large sums into industries that were facing a downturn. With low growth rates and few investment opportunities, many start-ups faced difficulties making ends meet.
To keep these struggling start-ups afloat, the EU and local governments introduced a raft of new schemes and loans. The city of Berlin developed a broad funding programme in 2020 to support start-ups during the pandemic. It includes a matching facility for private investors to mirror the investment amount provided via government funds. As per March 2021, 48 VCs and business angels and more than 100 start-ups took part in the matching process.
Meanwhile Copenhagen launched the first-ever union dedicated to tech start-ups, the Association of Tech Startups in Denmark, to advocate for better business support packages for start-ups that saw heavy losses due to Covid-19.
Building back better with tech
Although there are signs of recovery, it will take time to get back on track. And it is not just the economy — the pandemic has exposed several vulnerabilities that need to be addressed, such as supply chain efficiency and new societal challenges, including long-term unemployment and mental health issues.
But, based on what we have seen over this past year, those cities that take this moment to create more opportunities for collaboration between start-ups, governments and universities could build a more resilient infrastructure for the future.
Andrea Hak is an editor and writer at TNW.
This article first appeared in the August/September print edition of fDi Intelligence. View a digital edition of the magazine here.
Download a PDF of these rankings here: fDi x TNW Tech Cities of the Future 2021