Europe Must Get Better at Scaling Startups
The European Union’s president, Ursula von der Leyen, has highlighted the need for Europe to improve its ability to scale startups. In a speech to the European Parliament, ahead of her second term starting on December 1, she emphasized that closing the "innovation gap" between Europe and other regions is crucial for the bloc’s competitiveness.
The Innovation Gap
Von der Leyen noted that while Europe is roughly as good as the US at creating startups, it lags behind when it comes to scaling them up. She stated that only one-third of European patent applications are commercially exploited, compared to a much higher percentage in other regions. This gap needs to be closed if Europe wants to remain competitive.
Support for Innovators
Von der Leyen’s second term will focus on supporting innovators and entrepreneurs. To this end, she has created a new commissioner position, held by Ekaterina Zaharieva, with a specific brief to support startups. This is a significant step towards creating an environment that encourages innovation and entrepreneurship.
Investment in Innovation
Von der Leyen also emphasized the need for investment in innovation. She stated that Europe needs more private investment to drive competitiveness and innovation. To achieve this, financial reforms are planned, including the creation of a European Savings and Investments Union. This will help ensure that European companies can access the capital they need to scale up their businesses.
Reducing Red Tape
In addition to increasing investment in innovation, von der Leyen also pledged to reduce red tape that may be holding back entrepreneurs. She acknowledged that regulatory burdens can weigh heavily on businesses, making it difficult for them to comply with complex and costly rules. To address this issue, the European Commission will introduce new omnibus legislation to simplify the legal landscape and make business easier across Europe.
A Cultural Shift
However, von der Leyen’s vision of a more innovative and entrepreneurial Europe may require a cultural shift. Regional investors need to become more comfortable with risk and big bets, rather than prioritizing stable and predictable returns. This requires a change in mindset and a willingness to take calculated risks to drive innovation.
The Numbers Don’t Lie
The numbers suggest that von der Leyen’s vision is not just a pipe dream. Venture capital investment in Europe has been increasing steadily over the past few years, with Atomico reporting $45 billion invested in 2024. While this is still lower than the levels seen in the US, it shows that there is momentum building.
Conclusion
In conclusion, von der Leyen’s speech highlights the need for Europe to improve its ability to scale startups and drive innovation. By supporting innovators, increasing investment in innovation, reducing red tape, and encouraging a cultural shift towards risk-taking, Europe can remain competitive in the global economy. The numbers suggest that there is momentum building, but it will require sustained effort and commitment from policymakers, investors, and entrepreneurs to achieve this vision.
Related Topics
- EU startup priorities
- EU startup reforms
- Government & Policy
- Startups
- Ursula von der Leyen’s second term