Startups are Europe’s strategy – but only if we let them thrive

Startups are Europe’s strategy – but only if we let them thrive

This declaration, supported by startup and scaleup organisations from D9+ countries – the S9+ Coalition – calls for disruptive measures to ensure the technological advancement and open competition for European tech companies, both in the short and long term.

Europe is at a crossroads. While global competitors are doubling down on innovation and investment, Europe is caught in a web of complex regulations, fragmented markets, and underfunded startups. The consequences are clear: the best European tech companies are scaling abroad instead of within the EU. We risk becoming a continent that produces great ideas but fails to turn them into global successes.

This is why the S9+ Coalition was formed. As a network of startup organizations from Europe’s most digitally advanced economies—the D9+ countries—we are united by a mission to make Europe a global hub for startups and scaleups. Our message is clear: Europe cannot regulate its way to competitiveness. It must invest and innovate its way forward.

The EU’s own leaders have acknowledged the problem. The Draghi and Letta reports paint a stark picture: Europe is structurally disadvantaged in global competition, overburdened by bureaucracy, and struggling with an innovation deficit. Draghi even estimates that the EU’s internal barriers function like a 45% tariff on manufacturing and a 110% tariff on services, making trade within Europe far less dynamic than in the US. This must change.

To reclaim Europe’s position as a global innovation powerhouse, we need a startup-first strategy. That requires five fundamental shifts:

Stop Over-Regulating, Start Enabling

Europe is setting the world’s most complex AI rules, but instead of strengthening innovation, we risk suffocating it. AI startups need funding, compute power, and access to data—not endless compliance checklists. Public sector data should be open for innovation, AI R&D should prioritize fast-tracked grants for startups, and regulation must ensure clarity rather than complexity.

Let Startups Scale in Europe, Not the US

European startups are starved for growth-stage capital. The US out-invests Europe by a factor of 3 to 4, and European pension funds still invest less than 0.2% in venture capital. If we want startups to scale in Europe, D9+ countries must push to unlock institutional capital, remove regulatory barriers, and make the EU a competitive place to grow a tech company.

Build a True Digital Single Market

Scaling a startup across EU borders is more expensive than expanding into the US market. Hidden barriers—from tax complexity to regulatory gold-plating—make it slower, riskier, and costlier to grow a company within Europe than outside it. D9+ must lead efforts to create a fully harmonized Digital Single Market, where startups can scale across borders without being penalized by bureaucratic inefficiencies.

Protect Startups’ Ability to Reach Customers

Unlike big corporations, startups rely on cost-effective, data-driven marketing to find customers and scale internationally. Yet, new EU rules—such as the upcoming Digital Fairness Act—risk making these tools less accessible, raising costs and widening the gap between European startups and global competitors. D9+ must ensure that regulatory changes do not undermine the very companies we are trying to grow.

Digital Infrastructure: Keep AI Compute and Cloud Costs Affordable

Europe is pushing for digital sovereignty, but if we price AI compute and cloud services too high, startups will simply go elsewhere. D9+ must ensure that digital infrastructure policies focus on keeping AI, cloud, and connectivity affordable, interoperable, and globally competitive—not just compliant with sovereignty narratives.

Europe has the talent, the research institutions, and the ambition to lead the next wave of innovation. But if we do not act now, we will continue to watch our best companies scale elsewhere, create jobs elsewhere, and generate economic growth elsewhere.

This is not just about startups—it’s about Europe’s future. We call on policymakers in D9+ countries to take the lead in making startups the foundation of Europe’s growth strategy. Because if we truly believe in Europe’s ability to shape the future, we must stop making it easier for our most promising companies to succeed anywhere but here.

Read the full S9+ Declaration here.