The next chapter of European competitiveness depends on venture capital

Europe's future competitiveness will depend less on what we produce today and more on the companies and technologies we create tomorrow.

Growth is slowing, populations are ageing, and technological competition is intensifying. But Europe starts from a position of strength, with world-class universities, research institutions and entrepreneurs. Its weakness lies elsewhere: whether we can provide sufficient capital to help innovation scale.

This is where venture capital plays an essential role.

VC provides patient capital, expertise and networks to companies long before many traditional sources of finance are prepared to take the risk. It helps turn scientific breakthroughs and entrepreneurial ideas into businesses. In artificial intelligence, digital infrastructure, healthcare, climate technology and advanced manufacturing, those businesses are already building parts of Europe’s future economy.

The impact is already significant.

Over the past decade, venture capital investors have invested more than €132 billion into over 26,000 European companies. In 2025 alone, nearly €20 billion was invested across almost 5,000 companies.

The effect can also be measured in jobs. Venture-backed companies now employ more than one million people across Europe. In 2024, employment among venture-stage companies grew by 4.4%, against 0.8% across Europe overall.

Many of these jobs are being created in strategically important industries. Information and communication technology alone accounts for nearly half of all jobs in venture-stage companies, while healthcare and life sciences represent another major source of growth and innovation.

For long-term investors, the case is equally compelling.

European venture capital has historically delivered returns that compare favourably with major public market benchmarks. Since 1986, European VC funds have outperformed both MSCI Europe and MSCI World on key performance measures, according to Invest Europe’s performance benchmark report.

Beyond financial performance, venture capital gives investors access to scientific advances, emerging technologies and new business models years before many reach public markets. As a result, venture capital can enhance portfolio diversification while providing exposure to areas of the economy that are difficult to access through other asset classes.

Europe possesses researchers, entrepreneurs and companies. What it needs is enough capital to turn more of them into global businesses. Venture capital provides the bridge between ideas and impact.

If Europe is to strengthen its competitiveness, increase productivity and build the industries of the future, venture capital must remain at the heart of the solution.

Innovation has always been one of Europe's greatest strengths. Ensuring that great ideas have access to the capital they need to grow may well determine whether innovation becomes one of Europe's greatest competitive advantages tomorrow.

Anders Strömblad

Member, LP Council, Invest Europe

Senior Advisor, Andra AP-fonden / AP2