By Mira-Maria Danisman

Start-ups and scale-ups are often described as the beating heart of Europe’s innovation economy. They are the restless challengers, the ventures that turn fresh scientific discoveries or bold ideas into products and services with the potential to transform industries. From Parisian AI labs to Stockholm’s green technology pioneers, these young firms symbolise Europe’s capacity to compete globally, and strengthen its resilience and strategic autonomy. When they succeed, they create jobs, attract investment, and inject dynamism into sectors.

Yet their role in the EU economy remains precarious. Unlike in the United States or parts of Asia, too many European start-ups never fully graduate into global champions. Instead, they fall into what we entrepreneurs call the 'valley of death' – that fragile stage between early innovation and market success. If start-ups are vital to the EU economy as engines of innovation, their ability to scale up determines whether Europe reaps the rewards at home or loses them abroad.

For start-ups and scale-ups to fulfil their potential, a number of conditions for growth must be met. The first is a regulatory landscape that works with, not against, entrepreneurs. Right now, complexity and administrative burdens are cited as the number one obstacle by European founders. Excessive paperwork, payment delays, and fragmented rules across Member States drain time and energy that should be devoted to innovation. Simplifying regulations and truly harmonising the single market would allow Europe’s start-ups to act on a continental rather than merely national stage.

The second condition is access to funding that grows with ambition. Many European ventures secure initial seed capital, but financing often dries up during the critical scaling phase. As a result, too many founders turn to foreign investors or relocate entirely. If Europe wants its brightest ideas to flourish locally, it must unlock capital at scale – through dedicated EU investment vehicles, deeper capital market integration, and tax systems that encourage long-term risk-taking. Without this financial backbone, the EU risks becoming a talent incubator for ecosystems elsewhere.

A third requirement is talent. Europe’s start-ups face an acute shortage of skilled workers, whether in advanced tech fields, entrepreneurship, or research. Visa hurdles and slow procedures for highly skilled workers from outside the EU only add to the challenge. To compete globally, Europe must both attract international experts and invest in its own long-term pipeline – through stronger STEM education, entrepreneurial training, and flexible labour markets that reward mobility and innovation. Put simply, ideas are abundant, but without people to build them, they remain unrealised.

Finally, start-ups need access to cutting-edge infrastructure and markets. World-class research labs, supercomputers, and digital networks are no longer luxuries but prerequisites in the race for technological leadership. Equally, Europe’s internal market is still failing to live up to its promise: 70% of SMEs operate only within their home country, with only a quarter exporting to another EU state. Turning the potential of the single market into concrete market power would dramatically expand opportunities for scaling businesses.

If Europe is serious about making start-ups and scale-ups the drivers of prosperity, it must go beyond celebrating innovation and start building the conditions that allow it to grow. There have been encouraging first steps, such as the EU’s start-up and scale-up strategy and scoreboard, that suggest momentum – but they must translate into lived reality for founders.

Europe has everything it needs to lead – what it lacks is the political will. The time for half-measures is over. If Europe dares to match the ambition of its entrepreneurs, it can turn today’s start-ups into tomorrow’s global champions, shaping not only markets but the future itself.