Atomico’s new report says Europe is at a crossroads, urging the region to unlock its first trillion-euro company through bold policy, talent mobility and deeper capital markets.
Europe’s technology ecosystem stands at a “crossroads,” having yet to realize its full economic potential, according to the latest analysis from the venture capital firm Atomico. The firm’s eleventh annual State of European Tech report portrays a vibrant startup scene. Still, it warns that structural deficiencies are leaving “trillions of euros” in unrealized future Gross Domestic Product (GDP) unexploited.
The report urges the continent to unify its efforts to foster its first trillion-euro company.
Tom Wehmeier, Partner and Head of Intelligence at Atomico, stressed the political importance of technological growth. “Sovereignty in technology isn’t about protectionism, it’s about agency and choice—building the capability, confidence and capital to shape the future, while retaining the freedom to act independently and lead on Europe’s own terms,” he stated.
Despite recent successes, including startups such as Lovable, Synthesia, DeepL, ElevenLabs, and n8n gaining global traction, the report argues that Europe has not yet reached its zenith.
A Blueprint for Growth
Atomico identified four structural ambitions that must be met to ensure Europe’s success in the next technology era:
- Facilitate Pan-European Scaling: Make it significantly easier for founders to incorporate, build, and sell their products across European borders.
- Attract Global Talent: Establish Europe as the destination of choice for the world’s most ambitious technological talent.
- Mobilize Capital Markets: Better channel existing European pension, insurance, and savings assets into funding domestic innovation.
- Strengthen Risk Culture: Fundamentally change the narrative around risk, embracing failure and celebrating ambition.
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The report provides a detailed blueprint for change to achieve these goals, including key policy recommendations:
- For Founders & Scale: Implement a “EU Inc” framework that allows founders to digitally incorporate and operate seamlessly across the continent within 48 hours. It also recommends aligning university spinout terms with global standards to incentivize inventors to become founders.
- For Talent: Create a single, fast-track visa scheme to make relocation frictionless and adopt simple, fair employee ownership standards benchmarked against global “gold standards.”
- For Capital: Establish a European Capital Compact to channel institutional assets into innovation, and create a single, liquid European capital market for growth companies, featuring harmonized disclosure and pooled liquidity.
- For Risk Culture: Actively own the narrative to celebrate entrepreneurship and experimentation. Additionally, policy must “Fail Better,” making insolvency and restructuring processes easier and faster so founders can reset and restart without excessive stigma or bureaucracy.
Sarah Guemouri, a Principal at Atomico, concluded that the necessary elements—the talent, ambition, and ideas—are already in place. “What’s missing are the conditions to match that potential: simpler regulation, more patient capital, and public commitment,” she said. “The next decade will decide whether Europe leads the next tech era or lets others define it.”
