A new report from Zeki Data reveals that deep-tech companies in the United States are scaling twice as fast as their European counterparts, intensifying competition for skilled talent between the two regions. The findings, detailed in The Deep-Tech Talent War: Europe vs. North America Showdown 2024, examine the growing struggle to attract and retain highly skilled professionals in industries like AI, quantum computing, and semiconductors.
According to the report, the U.S. generates three times as many deep-tech companies as the U.K., with startups in North America growing at double the rate of those in Europe. Despite this, European startups maintain a higher concentration of advanced-skilled talent, particularly in smaller companies. Zeki Data CEO and co-founder Tom Hurd highlighted the importance of attracting top-tier talent for future innovation.
“There is intense competition for the finite science and engineering talent that deep-tech companies need to advance their innovation ambitions,” Hurd said. “Governments are throwing money at deep-tech start-ups to secure an innovative advantage, but Zeki’s data shows there’s limited ROI amid countervailing winds of high capital costs and market consolidation.”
The report also points to a slowdown in the formation of new deep-tech companies in both regions since 2020, despite significant government investments in industrial policy. Zeki Data’s analysis covers over 6,100 key deep-tech companies in Europe and North America, assessing a workforce of nearly 9 million, including 227,948 individuals with advanced skills.
European governments, while successful in attracting local talent, face risks associated with over-reliance on industrial policy, potentially creating “zombie startups” that depend heavily on government support. Hurd emphasized that retaining innovative talent is critical for sustaining future growth in deep-tech industries.
Key findings from the report include a marked shift in hiring practices among major tech companies like Amazon, Google, and Tesla, which are increasingly prioritizing early-career, lower-cost hires. Meanwhile, sectors like engineering biology and renewable energy have faced challenges scaling up, with battery technology experiencing a significant decline in talent since 2022.
The report also highlights the growing competition for software engineering talent across semiconductor, aerospace, and defence industries, while noting an exodus of Chinese talent from Western deep-tech companies, with many returning to China.
Zeki Data, based in the U.K., specializes in assessing the future potential of deep-tech companies to guide talent acquisition and investment strategies. The full report is available for download from Zeki’s website.