Over the past few weeks, I have received a question from several quarters: do tariffs affect, or will they affect, the startup economy? Initially, the answer tended to be negative, but as time has passed, thinking that start-ups are immune from US protectionist policies is no longer a certainty. <\/p>\n\n
Let’s start with a principle: all high-risk investments, by their very nature, tend to slow down when the market becomes unstable. Today, even starting a traditional business – which does little innovation and relies on established markets – presents considerable difficulties of survival, let alone for those aiming to create new businesses, start-ups or scale-ups oriented towards the development of innovations, products and services: these entrepreneurs know better than others how important it is to be ready to reshape and reinvent their growth models. <\/p>\n\n
The start-up economy sees different financial players in play, depending on the stage and range of investment, and the stage of growth and scalability of the market the start-up is in. On the angel investor side, therefore, the first ones to believe in the goodness of projects and risk more may prefer safer, protected or deferred investments. <\/p>\n\n
The position is different for venture capital funds: a fund, once launched, is operational and has to follow its own schedule, on the promises given at the raising stage, and on average has a duration of between 10 and 12 years. However, all those phenomena that generate economic turbulence – crises, catastrophes, wars or pandemics – also have a long-term impact on the venture capital financial markets. The impact is not immediate, but is reflected in longer raising times, strategies that have to be revised, just as happened with slowdowns during the Covid pandemic (which, however, paradoxically coincided with a significant growth in investments in start-ups). Even in the world of investments, apart from the activities of specialised funds, there tend to be fashions: it was yesterday that investments were preferred in favour of innovative companies in the healthtech sector, and then today everyone is running after artificial intelligence. <\/p>\n\n
Corporate venture capital will also be transformed. It is conceivable that it will increasingly turn towards traditional operations, such as mergers and acquisitions, aiming to achieve competitive results through targeted technological innovations. <\/p>\n\n
In times of crisis, companies and funds tend to invest less in risky innovations and focus on themselves, on certain returns, reviewing growth or internationalisation models.<\/p>\n\n
So what happens in this scenario? Tariffs are Trump’s finger that everyone is watching, commenting on, analysing. But what is the real direction? What is the moon he wants to lead us towards? <\/p>\n\n
If the scene remains firm on these assumptions, a new model of de-globalised post-globalisation will emerge, a market that challenges rules that have remained virtually unchanged since the post-World War II world crisis.<\/p>\n\n
We are faced with a ‘Black Swan’ to borrow the model defined by Nassim Nicholas Taleb in his book of the same name, perhaps not, or perhaps we could speak of an ‘Orange Swan’: not entirely unpredictable, but certainly at risk of being underestimated.<\/p>\n\n
Behind Trump’s move – or rather, moves – (announcing duties three months in advance, introducing them, suspending them after two days, with exceptions for China, cars, steel and other sectors including high tech) lies something that will be studied in economics in the future. Who knows under what academic label: tactical manoeuvre or illusionist move? <\/p>\n\n
In general, his is a ‘strategic attack’ – or rather, a blackmail-threat – to force others to sit at the negotiating table. The real goal? To defend the domestic market, perhaps by pushing companies to invest and relocate production to the United States. <\/p>\n\n
Amongst its twists and turns is another message: the US is in trouble, with a public deficit touching 7%. The US economy is under pressure. <\/p>\n\n
And in his political vision one can sense the desire for a different world, no longer globalised, or at least no longer so interdependent.<\/p>\n\n
Markets and consumption have changed, and are still changing, even in this period of what we call world ‘peace’ – not counting the 50 conflicts such as in Ukraine, Gaza, Sudan, etc. <\/p>\n\n
The United States now has about 345 million inhabitants, while the European Union has about 450 million, and if we look at the rest of the world, there are about 4 billion inhabitants between China, India and Indonesia alone.<\/p>\n\n
Future scenarios? What will change, what can change? If it continues at this pace? Growth models will change, both for companies and start-ups. There will be a new distribution of resources, with funding tied to individual countries and local investors. Investments will change in nature: less delocalisation to maximise production and logistics, and more localisation, with replication of production models in different markets. <\/p>\n\n
It will be the individual states that will ‘give the pass’.<\/p>\n\n
This also implies a change in investment models for start-ups.<\/p>\n\n
It is likely that venture capital funds – as is already the case in Italy, especially at regional level – will increasingly operate where there are tax levers, incentives and investment multipliers.<\/p>\n\n
And in this scenario, the question also arises: has the Oracle of Omaha, Warren Buffett, seen through this once again? In the fourth quarter of 2024, he accumulated cash and recently used it to increase holdings in five large Japanese S\u014dg\u014d sh\u014dsha (Japan’s trading houses operating in different sectors and markets). A move dictated by geographical diversification and the stability of the Japanese market. Did he get it right? Once again, it seems so. <\/p>\n\n
From the Web3.0 of sharing and decentralisation to World 1.0 the step could be short, if duties turn into real embargoes. Imagine what it would mean if companies and talent could no longer freely collaborate with other countries or companies, simply online, as was the case until yesterday. <\/p>\n\n
Meanwhile, the US is consolidating several lines of defence and aggregation:<\/p>\n\n
– technology (with big tech),<\/p>\n\n
– military and space (through new defence shields),<\/p>\n\n
– financial and commercial (strengthening control over market assets).<\/p>\n\n
They are aiming to concentrate and protect what they consider strategic.<\/p>\n\n
That is why claims or suggestions about the annexation of Canada or Greenland are not surprising.<\/p>\n\n
Perhaps, however, those very market rules that have been a brake on the tech scene – on which the European Commission has long focused – could prove useful, if Europe remains united, both in its internal and external relations.<\/p>\n\n
On the startup finance front, Europe as a Commission is taking its first steps. France with Paris and Germany with Berlin are the two rocket ecosystems that are catalysing European talent, outside the EU there is the UK. <\/p>\n\n
Do you like the Orange Swan? Because life – after all – is innovative, and always asks us, every day, to reinvent ourselves. <\/p>\n\n
Personally, I see in it, for better or worse, an increasingly strong involvement of the innovator states – and thus of politics and not the market – in the process of economic progress, often more than the real protagonists: entrepreneurs and financiers. The answer? Perhaps we need a new generation of innovators who also choose to deal with institutions. <\/p>\n\n