Brussels, 17 March – Today, the European Tech Alliance (EUTA) is proud to contribute to the European Commission’s consultation on the EU Start-up and Scale-up Strategy. Our recommendations focus on creating a thriving environment for European startups and scale-ups by simplifying regulations, improving access to financing, enhancing competitiveness, ensuring fair enforcement, and attracting top global talent.
1. Simplify Tech Regulation
The EU must assess the cumulative impact of its tech regulations before introducing new ones. With over 100 tech laws and 270 regulators across Member States, the regulatory burden on European digital companies is excessive. Compliance costs can consume up to 30% of resources, diverting investment from innovation. According to the Draghi report, regulatory complexity costs the EU up to 10% of its GDP potential. We urge the Commission to conduct impact assessments of newly adopted legislation and ensure a more coherent regulatory approach.
2. Improve Financing for Innovation, Startups & Scale-ups
Europe’s venture capital sector significantly lags behind global competitors, raising just 5% of global VC funds compared to 52% in the US and 40% in China. An incomplete Single Market and fragmented national regulations drive European startups to seek financing and scale abroad, particularly in the US. Between 2008 and 2021, 147 European unicorns were created, 40 of them moved their headquarters overseas due to better growth opportunities. To keep innovation within Europe, the EU must strengthen access to financing and eliminate market fragmentation.
3. Boost Europe’s Competitiveness
A globally competitive Europe requires a business-friendly regulatory framework that fosters innovation while reducing unnecessary costs. The EU should address:
- Compliance challenges due to inconsistent national regulations
- Complex tax structures that burden scaling businesses
- Rules that disproportionately impact companies based on their size
Regulatory sandboxes should also be expanded to allow businesses to test new technologies in controlled environments before full-scale compliance is required.
4. Achieve a Single Market of Enforcement
Regulations are only effective when enforcement is consistent. Divergent interpretations of EU digital laws create market fragmentation and compliance uncertainty.
The EU must establish a Single Market of Enforcement by:
- Strengthening cooperation within and between Member States and EU-level regulators to ensure consistent enforcement
- Harmonising compliance processes to avoid contradictions between Member States
- Establishing a level playing field where all companies operating in Europe, regardless of their country of origin, comply with the same standards
5. Attract & Retain Talent
Europe must become a destination of choice for global tech talent. To achieve this, the EU should:
- Introduce a European Tech Talent Visa to fast-track residency and facilitate mobility for skilled professionals across EU countries
- Strengthen collaboration between tech companies and universities to align education with industry needs
- Streamline visa and work permit processes to compete with other global tech hubs
Conclusion
For Europe to empower its homegrown digital companies and foster a dynamic innovation ecosystem, decisive action is needed. By simplifying regulations, ensuring fair enforcement, enhancing access to financing, and attracting top global talent, Europe can become a leader in the digital economy.
EUTA remains committed to working closely with policymakers, businesses, and academia to drive these necessary reforms.
About the European Tech Alliance
EUTA represents leading European tech companies that provide innovative products and services to more than one billion users. Our 33 EUTA member companies from 16 European countries are popular and have earned the trust of consumers. As companies born and bred in Europe, for whom the EU is a crucial market, we have a deep commitment to European citizens and values.
With the right conditions, our companies can strengthen Europe’s resilience and technological autonomy, protect and empower users online, and promote Europe’s values of transparency, rule of law and innovation to the rest of the world.
The EUTA calls for boosting Europe’s tech competitiveness by having an ambitious EU tech strategy to overcome growth obstacles, making a political commitment to clear, targeted and risk-based rules, and enforcing rules consistently to match the globalised market we are in.
For media inquiries, please contact:
Victoria de Posson, EUTA Secretary General
E-mail: victoria@eutechalliance.eu
E-mail: info@eutechalliance.eu
Phone: +32 476 25 08 16
www.eutechalliance.eu
