Cybersecurity industry in the EU still lags behind world leaders, including the U.S. and Israel.
On the occasion of Luxembourg Cybersecurity Week, the European Commission and the European Investment Bank (EIB), with the support of the European Investment Advisory Hub, have published the joint report “European Cybersecurity Investment Platform.” The report highlights the financing needs of cybersecurity companies across Europe and the challenges they face in developing their business. This includes finding a skilled workforce.
Investment platform for cybersecurity sector
The report also makes recommendations to improve growth prospects for cybersecurity companies in Europe through additional funding mechanisms. The study outlines the establishment of a dedicated investment platform to help the cybersecurity sector bridge the funding gap and boost economic development in the EU.
At the launch of the study, EIB Vice President Kris Peeters said, “Given the critical situation we face in Eastern Europe, we need to strengthen our cybersecurity sector to secure our digital growth and put Europe at the forefront of this strategic area. I am confident that this investment platform will mobilize significant additional investments to keep cybersecurity companies in Europe, leading to economic development and growth. We are ready to support this sector with funding and technical assistance.”
Too few investors in the EU
The report shows that public spending on cybersecurity in the EU is fragmented and low, and that there is a lack of government-led programs and policies. There are not enough committed investors in the EU cybersecurity funding landscape dedicated to growing the sector, leaving companies to look for suitable funding partners outside of Europe. In addition, many small EU companies in this field are being acquired by non-EU companies, reinforcing the trend for these companies to expand their businesses elsewhere, at significant economic loss.
This assessment suggests that there is a significant market gap between the EU and the US, by far the leading country in this sector, amounting to approximately €1.75 billion per year. This highlights the importance of continuing to support the growth momentum of the European IT cybersecurity market.