Politicians in Europe need to make courageous steps on policy and regulation to push the continent’s tech industry closer to that of China’s, a venture capitalist said Thursday.

Klaus Hommels, founder and CEO of Lakestar, said that China’s tech giants have benefited from a regulatory environment in a way that Europe’s have not.

“I think we need to be a little bit more courageous,” Hommels told CNBC at the Web Summit conference in Lisbon, Portugal.

Hommels highlighted that China has implemented a number of policies to enhance innovation. For instance, one policy known as the Made in China 2025 plan seeks to boost the country’s high-tech industries. Another, called the Robotics Industry Development Plan, is a five-year program that focuses in on the robotics and artificial intelligence (AI) sector.

The investor said that the economic behemoth has managed to take its tech companies to a point where they could compete with “everybody else.”

“Some call it protectionism, others call it active industry policy,” he said. “This is something we could easily do but we need to be courageous on the political side and that is not always the currency that politicians play with.”

China is host to a number of internet giants. Alibaba, Tencent and Baidu have all made significant headway both in China and, increasingly, around the world. Tencent, for instance, bought a 10 percent stake in U.S. social media firm Snap on Wednesday, a move that boosted shareholder confidence in Snap after disappointment over earnings.

Diego Piacentini, Italy’s digital commissioner, said that Europe would need to push towards “digitalizing governments” in order to enhance the continent’s potential.

“It’s hard to imagine a digitalized economy when the main decision maker, the main policymaker, is not digitalized,” he said. “With digitalization, obviously it implies simplification. I think digitalizing governments is going to be a huge forcing function to simplify rules.”

Europe is currently grappling with the rapid growth of new technologies and the digital economy. It has developed a ‘Digital Single Market’ policy that aims to boost the continent’s digital industry.

In June, the Digital Single Market moved to end roaming charges, tariffs that applied to Europeans making calls or texts or using data to access the internet on their smartphones, abroad. The reform means that Europeans are now able to call, text and use data at the same rate that they would pay in their own country.

A number of European countries have also developed their own digital strategies to enhance the blossoming sector.

Estonia, for example, has developed an e-identity program called “e-residency,” a digital ID for non-Estonians that offers access to services like banking, payment processing and taxation. On Tuesday, the Estonian government said that more people born outside Estonia than those born in it had applied to become an Estonian digital citizen.

The country has also been considering the development of its own cryptocurrency, and has been in talks with Ethereum founder Vitalik Buterin in the process.