The European Commission has launched an EU startup and scaleup strategy to establish Europe as a premier destination for starting and growing global technology-driven companies. Startups and scaleups are crucial for driving innovation, sustainable growth, creating high-quality jobs, attracting investment, and reducing strategic dependencies. The new strategy addresses these challenges by providing support throughout the lifecycle of startups and scaleups.
The Commission has outlined a series of actions to be taken across five main areas. These areas include fostering an innovation-friendly environment, driving better financing, supporting market uptake and expansion, attracting and retaining top talent, and facilitating access to infrastructure, networks, and services. Europe’s technology ecosystem stands at a pivotal moment.
Despite significant maturation over the past decade, persistent structural barriers continue to hinder the region’s ability to scale global champions. However, a rare alignment of geopolitical, regulatory, and technological shifts is creating new momentum, offering a window of opportunity to build global leadership. The consensus among research participants is clear: Europe lacks coordinated mobilization.
It has world-class talent, growing capital pools, and committed institutions. However, what’s needed to catalyze entrepreneurship and attract more risk-taking investment is a coordinated effort to harness these resources. Key strategies include leadership, incentives, focus, and teaming.
eu’s tech growth initiative
Turning Europe’s tech momentum into global scale is crucial. Over the last decade, the number of European software start-ups has grown fivefold, and the region has raised over $425 billion in venture funding, significantly bolstering the tech landscape.
Despite this momentum, Europe’s innovation engine often stalls before scaling up. Fewer companies are founded in Europe compared to the United States, and they scale more slowly. European software start-ups that reach €100 million in annual recurring revenue take 15 years on average, five more years than their US peers.
To catalyze growth and ensure Europe seizes this opportunity, it is crucial that all ecosystem players work in concert to drive innovation, scale, and long-term growth. This alignment could transform Europe’s tech landscape into a global powerhouse. As part of this new strategy, the EU Commission is addressing the current funding gap by setting up a public-private partnership to provide easier access to finance and infrastructure while reducing administrative burdens.
European Commissioner Ekaterina Zaharieva stated during the strategy launch, “Capital matters, and Europe has it. We need to connect it to the needs of the innovators. A clear funding gap persists – to address key challenges and reduce market fragmentation, we will team up with private investors.”
The strategy will also simplify the process for setting up a start-up, aiming to allow companies to be established within 24 hours and to ensure that companies operating across the 27 different EU member states are subject to a single business regime.
Additionally, it plans to tackle insolvency issues to reduce the cost of failure for start-up projects. This initiative marks a pivotal step in boosting Europe’s competitiveness in the global tech landscape and ensuring that innovative companies have the support they need to thrive within the European Union.