Europe generates world-class research, highly regarded engineers and entrepreneurs whose work shapes global industries. By measurable indicators scientific output, university rankings, the depth of its industrial base the continent should occupy a more dominant position in the global economy than it does. According to Nicole Junkermann, the explanation for why it does not lies less in what Europe produces and more in the structural conditions under which that output has to find its way to scale.
The gap is not new, but it has become harder to ignore. Over the past decade, the distance between European and American technology companies in terms of valuation, capital raised and global market share has widened considerably. Apple, Microsoft and Nvidia each trade at valuations above two trillion dollars. The largest listed European technology companies sit in a range that rarely approaches a tenth of that figure. The explanation most often offered is cultural that American founders think bigger, take more risk and tolerate failure differently. There is something in this, but it is an incomplete account of a structural problem.
How Nicole Junkermann identifies the system holding European talent back
The regulatory environment in which European companies operate has been built, over several decades, around the objective of preventing excess. That priority reflects real historical experience and genuine institutional concerns. Its practical consequence, however, is a framework that makes building and scaling companies measurably harder than in comparable economies.
Founders across the continent and in the UK, where post-Brexit regulatory divergence has introduced its own complications without yet delivering the flexibility that was promised operate across fragmented regimes where compliance is both costly and time-consuming. Even regulation that is well designed in isolation can become stifling in aggregate. The cumulative weight of overlapping requirements binds the operational energy that early-stage companies need to direct toward growth.
Nicole Junkermann has observed that this is not simply a complaint from the founder community. It is a dynamic that capital markets reflect with considerable precision. Investment flows toward environments where it can be deployed efficiently and scaled with reasonable predictability. When starting a company, hiring across borders and accessing customers is structurally easier in one geography than another, capital responds accordingly and it has been responding for years.
The talent migration this produces is persistent and underappreciated. A significant share of Europe’s most capable entrepreneurs build their companies in the United States, or relocate there at the point when scale requires it. Others are increasingly drawn to hubs in the Gulf or Southeast Asia, where regulatory frameworks are more accommodating and growth capital is more accessible. Europe trains the talent and watches a meaningful portion of it compound value elsewhere.
What Nicole Junkermann sees in Europe’s funding gap
The financing environment amplifies the underlying structural problem. Venture capital investment in the United States runs at roughly two to three times the European level by volume, with the gap widening further at later stages — precisely the point at which companies either achieve the scale needed to compete globally or stall. Exit routes matter as much as entry: deep public markets and an active acquisition environment in the United States provide founders and early investors with exit pathways that European markets, including London, have struggled to match consistently.
The composition of public markets reflects this divergence. Technology represents more than thirty percent of the S&P 500 by market capitalisation. The equivalent figure in European indices sits closer to ten to fifteen percent. That difference captures not only distinct industrial histories but a persistent weakness in producing technology companies that reach and sustain global scale — a weakness that no amount of startup activity at the seed stage resolves if the later-stage infrastructure is not there to support growth through to maturity.
None of this is structural in the sense of being fixed. Europe has the inputs required to compete. The research base is genuinely world-class. The engineering and scientific talent is deep. The industrial heritage provides a foundation that many emerging technology economies lack entirely. What is missing, in Junkermann‘s analysis, is not raw material but the institutional architecture needed to convert it.
The shift Nicole Junkermann argues Europe needs to make
Nicole Junkermann argues that regulation needs to become more proportionate — designed to manage risk rather than eliminate it, and calibrated to allow companies to grow rather than to constrain them before they reach the scale at which oversight becomes genuinely meaningful. Capital markets need to deepen, with greater institutional participation in growth-stage funding and clearer domestic pathways for companies that would otherwise be forced to seek capital abroad at the cost of strategic independence.
The mindset question is perhaps the hardest. Failure in the process of building a company needs to be understood as information rather than as a permanent verdict. The cultural premium placed on avoiding visible failure systematically disadvantages early-stage risk-taking in ways that are difficult to legislate away but are not, for that reason, immutable.
These are not changes that resolve themselves. They require deliberate political choices, institutional willingness to challenge embedded assumptions, and a sustained recognition that the current trajectory generating talent and ideas while consistently failing to convert either into companies that define the future global economy is a consequence of design rather than of destiny. For Nicole Junkermann, that distinction matters: Europe’s problem is not what it is capable of producing. It is whether the system is built to let that capability arrive at its full scale.
