The European Commission (EC) has kicked off a scheme to make Europe a better place to nurture global technology businesses, providing support throughout their lifecycle, from startup through to maturity.
Launched this week, the EU Startup and Scaleup Strategy [PDF], dubbed “Choose Europe to Start and Scale,” is another attempt to cultivate a flourishing tech sector in the region to rival that of the US, or “make Europe a startup powerhouse,” as the EC puts it.
At the moment, many European tech startups struggle to take their ideas from lab to market, or grow into major players in their market, the EC says, which proposes action across five main areas.
These include creating a more innovation-friendly environment with fewer administrative burdens across the EU Single Market; a Scaleup Europe Fund to help bridge the financing gap; a Lab to Unicorn initiative to help connect universities across the EU; attracting/retaining top talent through to advice on employee stock options and cross-border employment; as well as facilitating access to infrastructure for startups.
The EC reportedly plans to create a public-private fund of at least €10 billion ($11.3 billion) to help with financing. We asked the Commission for confirmation of this, but did not receive an answer prior to publishing.
“Businesses that are born in Europe must grow in Europe,” said Stéphane Séjourné, EC Executive Vice-President for Prosperity and Industrial Strategy.
“With the launch of the EU Startup and Scaleup Strategy, we unlock growth drivers for Europe’s most innovative and promising companies. We cut red tape, we facilitate their access to financing, we improve their ability to do business across our Single Market.”
The need to cut red tape is an old cliché that has often been levelled at the EU and its bureaucracy, but many clichés have a kernel of truth and Europe could learn from other regions, according to Fredrik Erixon, Founding Director of the European Centre for International Political Economy (ECIPE).
“So much experimentation, innovation, and investment are moving out of Europe because of impossible regulations. With all the new talk about industrial policy, ECIPE scholars have pointed out in a much-discussed paper that it matters a lot what type of industrial policy that is pursued. Unfortunately, Europe does not have a good track record – and it can learn from other countries,” he said.
Perhaps for this reason, one of the aims of the new strategy is to simplify the rules for startups and scaleups by reducing fragmented regulations across the across the Single Market, lowering administrative burdens, and fostering more innovation-friendly rules.
This latest initiative sets out a clear vision, the EC says: to make Europe the top choice to launch and grow global technology-driven companies. It initiates a myriad of actions to improve conditions for startups and scaleups, encouraging them to capitalize on new geopolitical opportunities, and – importantly – aims to reduce the reasons for fledgling businesses to relocate outside the EU.
Progress will be gauged by a European Startup and Scaleup Scoreboard that will measure the performance of the startup and scaleup ecosystems at European and national level, compared to global competitors. There will also be an annual startup and scaleup survey.
According to Invest Europe, an association of private capital providers, Europe has become a global leader in early-stage funding, boasting 35,000 startups. However, according to some sources, there are currently more than 75,600 startups based in the US, and many of these are the world’s highest-earning startup companies.
The new strategy aligns with the broader Choose Europe initiative, the EC said (Choose Life. Choose a job. Choose Europe.) It promises to report back on the strategy’s implementation by the end of 2027.
According to some estimates, Europeans pay on average a $100 monthly “tax” to use US-created technology, and Steve Brazier, former CEO at Canalys told us last year he suspects this will be exacerbated when AI is widely used.
Europe has relatively few major tech organizations compared to the US, and there is more and more interest from some European businesses in the Trump 2.0 era to reduce their reliance on American hyperscalers in favor of local cloud operators.
According to some seasoned market watchers, the boat has likely sailed with respect to loosening the dominance of Microsoft, AWS and Google in the cloud, yet for the emerging tech startup scene there may be everything to play for. ®
