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Europe has ambitious plans to build a thriving digital economy over the past decade. From regulatory leadership and tech-driven reforms to rapidly growing regional hubs, we’ve laid crucial groundwork. However, talent is key to shaping our future, not just infrastructure. Today, we face the challenge of attracting and retaining the skilled individuals who drive innovation.
Why Talent Moves—and Why That’s Not the Whole Story
In today’s interconnected global market, talent follows opportunity. The U.S., for example, offers late-stage capital at a larger scale than much of Europe. Its unified domestic market also allows startups to grow without navigating complex regulatory borders. In AI and deep tech fields, there are more large-scale deployments and resources that attract ambitious engineers.
But talent doesn’t move in one direction alone. Many entrepreneurs return with sharpened skills, not only to build European ventures but also to reconnect with a sense of home and achieve better work-life balance. Increasingly, founders are building cross-border teams, operating product and engineering from Europe while scaling sales or partnerships globally.
Europe faces a test in the global fight for talent. Instead of mimicking other ecosystems, we should focus on what sets us apart. Sweden provides a powerful example. With 41 unicorns, it ranks among the top 10 countries globally. Stockholm, its capital, is second only to Silicon Valley in unicorns per capita. Startups from Sweden have scaled globally while staying rooted in a strong local ecosystem.
Sweden’s success isn’t just due to capital—it also thrives on trust, digital readiness, innovative infrastructure, and long-term investments in education. Higher education is tuition-free for EU citizens, and digital public services are integrated into everyday life. There is consistent alignment between the public and private sectors in supporting entrepreneurship.
This foundation doesn’t guarantee success but creates a platform for talent to grow—and stay. Across Europe, cities like Tallinn, Lisbon, Berlin, and Málaga are developing tech ecosystems rooted in local strengths and specializations, turning them into hubs for talent.
Europe’s Strengths Are Structural and Undervalued
Europe is often criticized for being over-regulated, which can slow product cycles or add complexity for startups. However, these standards also build the trust desired by modern consumers and talent. Additionally, Europe invests early and equitably in its people. Many countries provide universal healthcare, subsidised childcare, and free or low-cost education, reducing personal financial risk.
This stability creates a broader sense of safety and support that extends beyond the workplace. For many entrepreneurs, this can be invaluable for taking meaningful risks. Europe tends to foster a deliberate growth environment compared to other global markets. Stronger work protections and greater awareness of a startup’s footprint appeal to talent seeking more than just fast exits.
Of course, challenges remain. Fragmented regulation across EU member states, limited access to late-stage capital, and complex cross-border hiring create friction. In recent months, we’ve seen companies in fintech tighten operations or shift capital toward the U.S., as global investors seek quicker returns and more predictable scaling environments.
But these challenges aren’t unsolvable. Europe needs to evolve faster, more boldly, and with greater cohesion across the continent.
What Europe Must Do Next
To stop these forces from driving talent away, Europe must reclaim its narrative. It is already leading in areas such as open banking, green technology, and privacy-first digital services. Rather than viewing all regulation as a burden, we should position certain key regulations as a competitive advantage. This creates stability and transparency valued by today’s talent and investors.
Second, Europe must address regulatory fragmentation to unlock its full innovation potential. While diversity is strength, inconsistent rules across member states create friction for startups operating across borders. Greater harmonization of startup-relevant policies and more integrated funding mechanisms would make Europe feel like one cohesive innovation space for tech talent.
The continent also needs to invest in homegrown innovation, retain core digital infrastructure, and protect intellectual property. This requires a stronger late-stage funding environment, more ambitious public-private R&D initiatives, and long-term support for innovative companies. To deepen the talent pool, Europe’s long-term thinking, inclusivity, and sense of responsibility should be harnessed as competitive strengths.
A Tech Ecosystem Worth Building and Staying For
Talent doesn’t only follow money; it also follows meaning. Today’s innovators seek environments where they can create real impact. They look for flexibility, diversity, trust, and purpose. Europe is uniquely positioned to meet these expectations if it embraces what makes it different.
In a changing world, Europe remains a stable democracy offering security that attracts investor interest and capital. This is not a zero-sum game—talent going abroad doesn’t mean Europe is losing. However, if we want to be a global innovation leader in the decade ahead, we need to champion our values, remove barriers, and tell our own story more effectively.
If we do that, we can make Europe the place where world-class talent not only begins but also belongs.
