ACT | The App Association
Shooting for the Moon: Visions for a 2035 Europe
Startups and scaleups are driving breakthroughs in technology, creating jobs and addressing society’s most pressing challenges. Yet too often the EU’s fragmented markets and outdated frameworks hold them back. Europe must think bigger and move faster to turn its strengths into advantages.
The App Association has outlined three moonshot visions for 2035: mobilizing greater investment, breaking down barriers to entrepreneurship, and building a single labor market for the digital age. Each vision identifies the challenge, opportunity and path forward to create a thriving European startup and scaleup ecosystem that matches the continent’s talent and ambition with the scale and resources to compete globally.
#1: Investment
The 2035 vision
By 2035, Europe consistently achieves $45 billion to $50 billion per quarter in venture capital (VC) investment – roughly three times the current rate. This will create an ecosystem of globally scaled startups, more unicorns and stronger leadership in frontier technologies like AI, cleantech and quantum.
The challenge
A significant VC gap constrains Europe’s innovation potential. In Q2 2025, Europe saw $14.6 billion in VC investment across ~1,733 deals, while the US accounted for $70 billion.
This disparity reflects structural obstacles: fragmented capital markets, uneven regulatory regimes across Member States, limited pooling of private savings into higher-risk, high-reward ventures and a shortage of scaleup funding.
The path forward
- Entrepreneurship requires risk. Most successful entrepreneurs have failed at least once before succeeding. Member States must rethink bankruptcy laws that make it unnecessarily difficult to access capital.
- Simplify rules for startups and scaleups to access cross-border markets and public procurement to create a truly integrated European savings and venture investment union by allowing greater allocation to venture, reducing regulatory arbitrage between countries and simplifying cross-border investment.
- Support EU venture firms with a mission to invest at scale and help seed large rounds domestically (rather than forcing Europe-founded startups to seek funding outside the EU), including through expanding initiatives like the EU's Scaleup Europe Fund and related startup education programs.
- Introduce tax credits or matching-fund schemes for high-risk VC investments, targeting startups in critical sectors like digital health, green energy and cybersecurity.
#2: Break entrepreneurship barriers
The 2035 vision
By 2035, Europe will close the gap with the US in both startup and scaleup creation, building a unified entrepreneurial landscape where ambitious ventures can scale across borders, raise talent and capital more easily, and compete.
The challenge
From 2021 to 2023, European founders created 7,000 startups valued under $50 million, compared with 13,000 in the US. The gap is even larger at the scaleup stage, with just 178 firms in Europe valued between $500 million and $10 billion, against 1,496 in the US (The European Investment Bank, The Scaleup Gap 2023). According to the Draghi report, EU innovation investment has long been dominated by automotive while US leadership comes from tech. This structural difference is reinforced by the fact that in 2021, EU companies invested €270 billion (~$301 billion) less in R&D than their US peers. Together, these dynamics reflect a policy environment that under-rewards risk, limits tools available to early-stage ventures and hinders startup growth across fragmented markets.
The path forward
- Allow startup equity and stock options to be compensated in a way that doesn’t count as personal income, encouraging more risk-taking.
- Give startups progressing toward compliance a structured grace period before imposing penalties, supporting innovation without lowering standards.
- Simplify and harmonize EU rules, reducing the complexity and cost created by divergent national interpretations and allowing startups to scale faster across borders.
- Allow tech startups to be acquired by ensuring merger and acquisition restrictions allow for procompetitive combinations. For startup innovators, barriers to exit are barriers to entry.
#3: Workforce
The 2035 vision
By 2035, Europe will have a single labor market, enabling any EU company to hire workers anywhere in the bloc without cross-border administrative or tax barriers. Startups and scaleups will be able to access talent pools across borders as seamlessly as they access customers, turning Europe’s diversity into a competitive advantage.
The challenge
LinkedIn’s 2024 Global State of Remote and Hybrid Work shows that small firms (<250 employees) are leading the growth of remote hiring, while international companies of all sizes hire significantly more remote workers than domestic firms. Across Europe, startups face severe labor shortages, even as the European Labour Authority’s 2024 report shows that every occupation has a surplus in at least one Member State. The paradox is structural: the EU guarantees the free flow of people but not of jobs. Labor regulation was designed for physical mobility, not for today’s reality of remote work. For startups and scaleups, this means that even when talent exists elsewhere in Europe, fragmented tax and labor laws make it prohibitively costly to hire across borders.
The path forward
- Allow early-stage companies to hire talent remotely without being constrained by multiple national tax and labor regimes.
- Unlock Europe’s untapped labor surpluses by expanding flexibility for remote cross-border hiring to directly support startups and scaleups.
- Align tax, social security and employment laws to enable cross-border hiring at scale, ensuring fair worker protections while giving startups access to the talent they need.
These visions are bold and difficult to achieve, but they are worth it. Europe’s entrepreneurs and workers are smart, innovative and skilled. Let’s give EU startups and scaleups the freedom to thrive and lead globally.
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