The recent release of Mario Draghi’s long-awaited report on European Union competitiveness has sparked discussions across the financial and business world.
While the report is rich in policy recommendations for bolstering Europe’s competitive edge, one striking detail stands out: In the last 50 years, no EU company with a market capitalization exceeding €100 billion has been created from scratch.
Meanwhile, in the United States, six companies—most famously Apple, Amazon, Alphabet, Microsoft, Nvidia, and Meta —have achieved valuations above $1 trillion, and all of them were founded within the same period.
This single comparison offers a stark lesson on the power of entrepreneurship and serves as a wake-up call for both policymakers and investors globally.
Why entrepreneurship matters
At its core, entrepreneurship is the engine that drives economic growth, innovation, and ultimately, market leadership.
Startups, particularly those in the tech sector, have reshaped industries, generated unprecedented wealth, and revolutionized the way we live and work.
The absence of large, newly formed European companies with significant global influence underscores a critical issue: Europe’s ecosystem is lagging in nuturing groundbreaking entrepreneurial ventures.
One of the primary reasons for this gap is the cultural and regulatory environment. In the U.S., entrepreneurship has long been celebrated, encouraged, and, importantly, well-financed.
The American market rewards risk-takers, with deep capital pools and a regulatory framework that makes it easier to start and grow companies.
Silicon Valley became the heart of tech innovation precisely because it had access to venture capital, a pool of top-tier talent, and a mindset that embraced risk, even the possibility of failure, as a necessary part of success.
In contrast, Europe’s environment for startups and entrepreneurship has been slower to evolve. Regulatory hurdles, fragmented markets, and a traditionally more risk-averse culture have held back European innovators.
Though there are certainly exceptions, and Europe is home to a number of tech unicorns, the ecosystem hasn’t produced a steady flow of companies able to compete on the scale of US giants like Amazon or Google (Alphabet).
Investor perspective
For investors, this disparity in entrepreneurial dynamism means missing out on significant value creation.
Over the past few decades, the most remarkable returns have come from those companies that not only disrupted existing industries but also created entirely new ones.
Amazon reshaped retail, Apple revolutionized consumer electronics, and Tesla is redefining the auto industry. These were not incremental improvements to existing sectors but wholesale reinventions driven by visionary founders and strong entrepreneurial ecosystems.
In Europe, the lack of similarly large-scale entrepreneurial success stories suggests fewer opportunities for investors to tap into the kind of exponential growth that has characterized American tech companies. Investors looking for the next big thing would be hard-pressed to find a European equivalent to a trillion-dollar tech company in the making. While Europe boasts successful industrial giants and financial institutions, the absence of high-growth tech companies raises questions about where the next wave of innovation will come from.
This is particularly concerning when we consider the shifting dynamics of global competition.
China has also demonstrated the power of entrepreneurial dynamism, with companies like Alibaba and Tencent growing rapidly to become global players.
The fact that Europe hasn’t produced similar scale tech giants in recent years puts it at a disadvantage as technological innovation increasingly drives the global economy.
What needs to change
Draghi’s report highlights a key problem, but addressing it requires a concerted effort from policymakers, investors, and business leaders.
First, Europe needs to create an environment where risk-taking is encouraged, and failure isn’t stigmatized.
This involves reducing regulatory burdens for startups, creating a more cohesive and less fragmented market, and incentivizing venture capital to take risks on new ideas. Encouraging entrepreneurship also means creating spaces for innovation, investing in education that promotes creative problem-solving, and ensuring that young entrepreneurs have access to mentorship and the resources necessary to scale their businesses.
In parallel, investors need to take a more active role in supporting early-stage companies. The risk profile for investing in a startup is high, but the potential rewards are often worth it.
In Europe, more capital needs to flow into these high-risk, high-reward ventures, supporting the next generation of innovative companies before they are snapped up by US or Chinese competitors.
For investors worldwide, Draghi’s report is a reminder that untapped entrepreneurial potential still exists in Europe, but it requires vision and bold moves to unlock.
The rise of tech giants in the US and China didn’t happen by accident—it was the result of targeted investment, a strong ecosystem, and a willingness to think big. Europe’s next challenge is to adopt this mindset.
Europe has the talent and the resources to compete, but without a thriving entrepreneurial ecosystem, the continent risks being left behind in the innovation race—something that no investor can afford to ignore.
Nigel Green is deVere CEO and Founder
Also published on Medium.
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