Startup State of the Union: S9+ on How the EU Can Accelerate Startups

In September 2024, former ECB President Mario Draghi delivered a stark message to European leaders: Europe is losing ground in the global economy.

Europe’s prosperity gap with the US is driven by productivity. American workers generate around 40% more value per hour, largely because of higher investment levels, faster technology adoption and more efficient capital markets (Dealroom.co analysis of OECD data).

There is a $375 billion capital gap between European and American growth companies. When raising larger funding rounds, US companies, on average, secure 567% more capital than their European counterparts (Dealroom.co analysis of
OECD data).

Since 2018, more than 50 European tech companies have gone public in the US rather than on European exchanges (European Startup Network [ESN] and FESE).

This outlines a deep competitiveness crisis that goes beyond a statistical gap. Draghi’s report showed that overregulation, fragmented markets and chronic underinvestment are leaving Europe behind at a time when global competition is accelerating. Now we have to act boldly or resign ourselves to a second-tier role in the world economy.

Startups as strategy

Europe cannot outcompete through scale alone. The continent has a thriving base of entrepreneurs capable of building solutions that transform industries, from green shipping to AI-powered health diagnostics, and of strong European ecosystems, as outlined in this year’s Startup Guide Europe.

Startups are Europe’s best bet for revitalizing growth, creating quality jobs and driving tech innovation into traditional sectors. They are not a side story; they are the main strategy.

But startups need the right framework to succeed. Today, instead of enabling innovation, Europe’s regulatory environment is often defined by complexity. More than 100 EU-level digital regulations are already in force, with new ones entering into force, such as the AI Act and Digital Fairness Act, on the horizon.

For small companies, navigating this maze consumes resources that should go into building brilliant tech solutions, serving customers and scaling globally.

The S9+ coalition

This is where the S9+ coalition enters the picture. Made up of Europe’s most digitalized economies according to the DESI index, these countries have grown up in a culture of compromise, open markets and global collaboration rather than the protectionist reflexes that too often dominate in larger member states.

At the forefront of e-government, cloud adoption and digital infrastructure, the S9+ nations are uniquely positioned to shape Europe’s digital future. Working together, these frontrunners amplify their influence in Brussels and across member states, ensuring that startups’ voices are heard above the regulatory noise.

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From hesitation to action

The S9+ message is consistent with Draghi’s call: Europe must stop layering regulation upon regulation and instead focus on simplification, scaling and strategic investment. That means turning ambition into action – moving from speeches about innovation to frameworks that actually enable it.

If Europe hesitates, the consequences will be that more entrepreneurs leave, more companies list abroad, and more wealth is created elsewhere. But if we succeed, Europe can secure its place as the best continent to launch, scale and globalize startups.

A continent for Startups

The future of Europe’s competitiveness is not in boardrooms. It’s in the incubators, coworking spaces and university labs where founders take risks to solve problems that matter. With the right policies, Europe can harness this energy to lead in AI, greentech and digital transformation.

The S9+ coalition is committed to making that future a reality. Together, Europe’s digital frontrunners are showing that by simplifying regulation, investing boldly and putting startups at the center, we can turn crisis into opportunity.

Europe can either remain stuck in hesitation and fragmentation or embrace its startups as a strategy to win the global race for innovation. The choice is clear.