Startups are a key driver of innovation, competitiveness, and job creation across the European Union. Yet despite significant efforts at both national and European levels, many early-stage companies still face challenges when it comes to starting, scaling, and operating across borders.
A new report — Ease of Doing Startups in the EU-27: A Path Towards Enhanced Competitiveness and Innovation — takes a comprehensive look at these challenges and outlines a series of recommendations aimed at strengthening the European startup landscape.
DEEP Ecosystems is proud to be a key partner in the StepUp StartUps project, a European Commission-funded initiative aimed at reshaping Europe’s startup ecosystem. Together with Barrabes, Leibniz IRS, Startup Europe Regions Network (SERN), and EU Startups, DEEP is spearheading a two-year journey to develop data-driven insights, conduct research, and organize events to inform policy transformation.
The primary objective of StepUp StartUps is to provide a comprehensive understanding of the functioning of national and local startup and scaleup ecosystems across the EU-27 and EFTA countries. This knowledge will inform the development of data-driven policy reports on key issues and challenges facing Europe’s startup ecosystem.
A growing number of startups, but limited scale-up success
The report highlights a central dynamic: while the number of startups in Europe continues to grow, relatively few make the transition to scale-up or international success compared to global peers. Many companies face practical and structural hurdles in areas such as regulation, taxation, company formation, and access to talent and finance.
In some cases, this has led promising startups to look abroad to scale — particularly to markets with more streamlined processes and deeper capital availability. These trends underscore the importance of creating an environment where startups can grow and thrive within the EU.
Complexity at key growth stages
The findings emphasize that the startup journey often becomes more complex as companies grow. Regulatory fragmentation, differing national standards, and a lack of harmonization in key areas such as VAT, stock options, and company structures can create significant administrative burdens — especially for companies operating in more than one member state.
Accessing talent can also be challenging. While Europe produces highly skilled professionals, startup founders still report difficulties with visa processes, hiring across borders, and offering competitive incentive packages.
A shared opportunity
Supporting startups is not only a matter of competitiveness — it is also a long-term investment in Europe’s economic resilience and innovation capacity.
This report is intended to contribute to an ongoing dialogue with policymakers, ecosystem builders, and investors on how to create conditions that help startups succeed at every stage — from formation to growth and internationalization.
With coordinated action and a shared vision, Europe has the potential to become an even more attractive and dynamic environment for entrepreneurs.
Join DEEP Network
We invite you to participate in discussions that will shape the future of EU innovation. By joining our network, you can contribute to the development of supportive policies and initiatives for startups and innovators across Europe. DEEP is a group of industry leaders who inspire us to explore new trends and policy needs. Join our network to collaborate on data, exchange insights, connect with key players, and share your own perspectives.
The project is funded by the tender of the European Commission on “European Start-ups 2.0 – Taking Europe’s start-up economy to the next level through data-driven insights, research and events” with number CNECT/2022/OP/0133. Views and opinions expressed are however those of the authors only and do not necessarily reflect those of the European Union, European Commission or the Council of Europe. Neither the European Union nor the granting authority can be held responsible for them.