Simplifying to scale

Unlocking Europe’s Startup Potential: Tackling Fragmentation, Capital Gaps, and Bureaucracy at Web Summit Lisbon 2025

(This article was generated with AI and it’s based on a AI-generated transcription of a real talk on stage. While we strive for accuracy, we encourage readers to verify important information.)

The Web Summit Lisbon 2025 panel addressed critical roadblocks for European startups. Ms. Simone Skovshoved, Head of Policy at Danish Entrepreneurs, cited market fragmentation and an €800 billion annual capital shortage, causing 30% of European unicorns to relocate. This lack of harmonization severely impedes scaling.

Ms. Monika Liikamaa, Co-founder & Co-CEO of Enfuce, noted European VCs prioritize short-term profits, unlike US investors who back long-term growth. This risk-averse “mindset problem” hinders investment and innovation, creating self-imposed roadblocks for Europe’s entrepreneurial ecosystem.

Secretary of State Paulo Magro da Luz, from the Government of Portugal, stressed Europe’s “27 realities” due to fragmented knowledge and skills. He emphasized minimizing the capital gap with the American market is crucial for retaining talent and fostering innovation within Europe.

Ms. Cynthia Kroet, Senior EU Policy Reporter, added that Europe’s slow decision-making processes require a complete institutional redesign. Ms. Liikamaa cited the digital euro’s prolonged investigation as an example of this lack of speed, contrasting it with rapid innovation cycles needed for competitiveness.

MEP João Cotrim de Figueiredo argued that Europe’s crisis successes (e.g., COVID-19) involved circumventing existing rules, proving regulations often hinder progress. He urged leaders to treat Europe’s economic and technological lag as an emergency demanding immediate, decisive action, not just rhetoric.

Mr. Cotrim de Figueiredo criticized the minimal implementation of past recommendations, noting only 10.8% of Draghi’s report has been acted upon. He expressed skepticism about new simplification packages, emphasizing that execution, not just “nice pieces of paper,” is crucial to prevent Europe’s decline despite its inherent talent.

Secretary of State Magro da Luz detailed Portugal’s comprehensive simplification program, including a new Ministry for State Reform. Initiatives involve optimizing ministries, streamlining citizen and business processes via the “Simplex” program, and reforming lengthy licensing procedures, particularly in construction and urban planning.

Portugal also aims to reduce enterprise costs through a single digital contact point and integrated public/digital spaces. They are revising foundational laws, such as public procurement, to eliminate barriers for startups. Ms. Skovshoved suggested every European country should adopt a similar cross-ministerial simplification role.

Ms. Liikamaa called for greater predictability and consistency in regulation, criticizing siloed approaches and the disconnect between policymakers and business realities. She advocated for involving more industry operators in drafting regulations to ensure practical, real-world consequences are understood.

MEP Cotrim de Figueiredo presented “The Simplometer,” an AI app designed to analyze EU legislation for complexity and propose simplified wording. He highlighted its potential to monitor and rank DGs and MEPs based on their simplification efforts, fostering accountability and driving action through public awareness.

Ms. Skovshoved proposed a “28th regime,” a pan-European legal entity with simple, digital rules, to attract investors and streamline operations across the single market. She urged the EU to focus on core economic regulation and allow market forces to operate, rather than protecting uncompetitive legacy industries.

Ms. Liikamaa noted that European pension funds are often restricted from investing in high-risk, high-growth ventures, unlike their North American counterparts. This regulatory framework diverts capital from innovative startups, hindering the development of a new economy. The Savings and Investment Union aims to address this.

Secretary of State Magro da Luz indicated the Savings and Investment Union aims to address this by harmonizing fiscal treatment for higher-risk saving products. MEP Cotrim de Figueiredo acknowledged the complexity of national fiscal sovereignty but hoped incentives would encourage member states to adopt beneficial changes. The panel concluded by stressing that genuine execution, beyond mere discussion, is vital for Europe to overcome its competitive challenges and cultivate a dynamic startup ecosystem in the coming years.