While Europe develops Tech, the U.S. backs its growth

I do not believe the neat story of a mass exodus of European startups. The numbers do not support it. Most companies stay where they were founded, and those that change their geography rarely do so in a single decision. The more important question is what happens to the companies that begin to scale.

A company does not relocate in a day

The European Commission’s Joint Research Centre estimates that 3.3–4.3% of European venture-backed companies relocate fully or partially. Among comparable companies without venture capital, the figure is even lower, at 0.3–0.5%. This is not a mass departure.

Yet 97% of the companies that do relocate do so partially. They retain operations in their country of origin: a laboratory, engineers, manufacturing or part of the team. The holding company, headquarters, leadership, fundraising or commercial function may move to another jurisdiction. When that happens, the US is the main destination.

But “relocation” is not quite the right word. The centre of gravity shifts gradually – from one function to another, not in a single move.

The more successful the company, the more expensive the next step

The picture is sharper for companies at the scaling stage. According to the 2024 Draghi report, as cited in the European Investment Bank’s 2026 analysis, around 10% of European scale-ups relocate abroad, and roughly 85% of them choose the US.

The report also notes that close to 30% of European unicorns, founded between 2008 and 2021, moved their headquarters abroad, predominantly to the US.

These figures cover different groups of companies and different periods, but they point to the same mechanism: Europe risks losing a disproportionate share of the value created by the businesses that grow into large international companies.

In BioTech, the gap is especially visible. An EIC report found that between 2019 and 2025, 66 of the 67 EU BioTech companies that went public chose exchanges outside the EU. This does not mean that 66 companies closed their European offices. It means that the market for their initial public offerings, future liquidity and next stage of capital was almost always located in another system.

After the laboratory comes a different economy

Europe is strong at the early stage. It has universities, research centres, Horizon Europe, the European Innovation Council and national funding programmes.

When a company enters the next stage of its economic development, its need for money does not disappear. What changes is the job that money must do. Early capital funds research and technology development. The next step is to scale manufacturing, navigate regulation, build international sales, secure hospital procurement and hire executives who have already brought a product to market. 

A company therefore needs more than capital. It needs capital connected to a market, specialist networks and execution experience.

The European Central Bank estimates the total stock of venture capital at around €930 billion in the US, compared with €150 billion in the EU. This is not annual investment or dry powder; it is an estimate of the overall size of each system. 

The gap matters most at later stages, when the sums become larger and mistakes more expensive and difficult to reverse. A founder is not simply choosing a cheque. They are choosing the system in which the company is less likely to make a costly mistake.

The problem is not consultants. It is the cost of navigation

European funding programmes are surrounded by consultants, grant writers and intermediaries. A good consultant saves time and explains rules that a founder may be encountering for the first time. Across Horizon Europe, 17% of applicants used external consultants or experts; among EIC Accelerator applicants, the share reached 67%.

The cost also varied considerably. The median consultancy fee was €7,500 for a consortium proposal, €2,000 for a single-beneficiary proposal and €12,000 for an EIC Accelerator application. 

These are fees for preparing a particular application, not monthly or annual charges. A contract may also include a success fee.

The deeper problem is trust. The EIC Board warns applicants about exclusivity clauses, intellectual property provisions and success fees. Europe does have institutional signals: national contact points, the Enterprise Europe Network and the EU|BIC quality mark, awarded following assessment and audit. But these mechanisms are divided across programmes and national systems, and they do not cover the entire private consultancy market.

In the US, a founder can begin with more visible entry points: Small Business Development Centers supported by the US Small Business Administration; state organisations connected through SelectUSA; or InBIA’s Soft Landings designation, awarded following an application review and expert assessment.

None of these mechanisms guarantees quality, nor do they mean that the US government has vetted every consultant. But they help founders ask three basic questions: who verified this organisation, whose interests does it represent, and what exactly am I paying for? 

Europe’s problem is not a lack of competent advisers. It is that founders must first navigate the system of trust signals before they can decide whom to trust.

America is not the only external centre of gravity

For hardware companies, there is another geography. The US can offer capital and a large market; China – Shenzhen in particular – can offer dense supplier networks and a rapid path from prototype to serial production.

A European Commission survey of more than 12,000 manufacturing companies in 12 countries found that 19% had production abroad. Of that group, 70% had neither changed nor planned to change its location. The sample covered countries representing around 53% of EU manufacturing gross value added and was heavily weighted towards Germany. 

The findings should not therefore be treated as a complete picture of EU manufacturing. They describe a durable international architecture more than a sudden exodus.

The relationship with China can nevertheless become deep. In the trade-offs of innovating in China in times of global technology rivalry, MERICS reports, citing an Asia Growth Partners survey, that 61% of respondents were increasing investment in innovation programmes in China. 

Drawing on the European Union Chamber of Commerce in China’s 2024 survey, it also notes that 41% of companies reported some degree of separation between their Chinese operations and global headquarters.

A company can gradually build an almost self-contained system of suppliers, data, staff and research inside China.

Wikifactory offers a reverse example. The company developed in Shenzhen, later moved its headquarters to Copenhagen and retained its Chinese office. A technology company’s geography rarely resembles a flag planted in one place: each function looks for the strongest infrastructure.

Geography is a sequence, not a pledge

For scaling companies, geography is rarely a binary choice. Capital, commercial teams, manufacturing and leadership may move to wherever the strongest ecosystem exists.

The real question is not whether a company has “left” Europe, but where its most valuable functions ultimately sit: intellectual property, jobs, management, manufacturing and future listings. Europe’s challenge is therefore not to stop companies expanding abroad, but to make global growth compatible with retaining a meaningful European base.

That requires deeper capital markets, stronger scale-up expertise and infrastructure that allows companies to grow internationally without moving their centre of gravity elsewhere.

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