From startups to scale-ups: How EU policy is shaping growth

The CODEUNITED project team attended Slush on 20─21 November 2025 in Helsinki as part of project activities funded by the EIT HEI programme. Slush is one of the world’s leading startup and technology events, held annually in Helsinki. It brings together startups, scale-ups, investors, policymakers, corporates, and universities to accelerate innovation, entrepreneurship, and global growth.

Among the many high-level discussions, one main-stage conversation stood out as especially relevant to education and regional RDI activities. It featured EU-INC initiator and investor Andreas Klinger, Wolt co-founder Miki Kuusi, and Henna Virkkunen, Executive Vice-President of the European Commission for Technological Sovereignty, Security, and Democracy.

[Alt text: a person is having a presentation in a big hall.] — Image 1. Main stage conversation at Slush. (Image: Olga Bogdanova)

The paradox of European innovation

The conversation highlighted a core paradox within Europe’s innovation ecosystem: although Europe produces as many startups as the United States, it still lags behind in turning them into scale-ups. Only around 8% of global scale-ups are European, compared to approximately 60% in the US, revealing a persistent structural gap. The issue is not a shortage of ideas, talent, or startup activity; it is the systemic barriers that make scaling across borders slow, costly, and complex.

This mismatch stems from a key tension: startup creation is local, but scaling requires cross-border operations. As companies expand, they encounter fragmented regulatory, legal, and administrative systems across Member States, obstacles that slow growth and often push startups to look for opportunities outside Europe.

The new legal simplification package

The growing awareness of Europe’s scale-up bottleneck is now driving a deeper policy shift. At Slush 2025, Henna Virkkunen introduced the European Commission’s digital simplification package as the first concrete step toward rethinking how Europe regulates innovation (European Commission 2025).

Today, a startup expanding across borders must often navigate different data rules in each country. For example, if a company collects anonymized user data for AI model training, it may still be forced to treat it as personal data under GDPR, even when no individual can be identified. Or if a platform experiences a security breach, it may need to report it separately to regulators in each Member State, each with its own procedures and deadlines.

The digital simplification package aims to address exactly these pain points. It introduces a unified data framework under the Data Act and clarifies that anonymized data can be used more freely. Instead of fragmented cybersecurity reporting, there will be a single EU-wide reporting channel. Instead of constant cookie consent pop-ups, companies will be able to remember user preferences, improving both usability and compliance. Businesses will also benefit from expanded regulatory sandboxes, offering a safe and supervised space to test new technologies before facing full regulatory requirements.

Complementing this is the European Business Wallet: a single digital interface for handling compliance, permits, reporting, and interactions with public authorities across the EU. It eliminates the need for paper documents and redundant processes in multiple jurisdictions, potentially saving months of administrative work for companies scaling into new markets.

Building on this infrastructure, the European Commission has also proposed the 28th Regime: a new legal framework that would allow startups and growth-stage companies to operate across Europe under one unified corporate structure, rather than creating 27 separate legal entities.

Conclusion

These EU initiatives directly target the structural inefficiencies that make scaling in Europe slower and more costly than in other regions. As educators and RDI actors are embedded in regional innovation ecosystems, a key responsibility is not only to anticipate future workforce needs but also to support companies in their development and growth. The increasing presence of universities and university-driven innovations was clearly visible, reflecting this notion. In this context, emerging EU policy innovations are increasingly important themes to be integrated into entrepreneurship education and practical collaboration with SMEs and startups.

Author

Olga Bogdanova is an RDI Specialist at LAB University of Applied Sciences, a project manager in the CODEUNITED project, and a member of the “Growth and Commercialization” research group.