From starting to scaling How to foster startup growth in Europe by Charlotte Reypens, Julie Delanote, Désirée Rückert

Executive summary 
Ambitious, innovative startups that scale are recognised as key sources of 
employment, productivity growth and innovation for Europe. However, evidence 
suggests that many startups struggle to go from starting to scaling, resulting in a 
‘scaleup’ gap in Europe. Moreover, while the long-term impact of the COVID-19 crisis 
on startups remains to be seen, many currently face greater constraints than before. 
At the same time, countries everywhere are likely facing a very deep recession, in 
which they will need every tool at their disposal to drive employment and economic 
growth. Continued policy support therefore is crucial

This report investigates factors that influence startup growth, by identifying some 
unique features of high growth startups in Europe. While the data for this report 
was collected prior to the COVID-19 crisis, the findings underscore the role of high 
growth startups for innovation ecosystems in Europe. We also highlight some ways 
governments can continue to support startups by encouraging collaborations with 
startups as an active innovation partner. 

We find that European high growth startups: 
1. Are new-to-the-world innovators. Most European high growth startups report that the 
most innovative aspect of their business is a new-to-the-world innovation and many 
adopt innovative technologies (e.g. big data, artificial intelligence) in parts of their 
business.
2. Hold the promise of high skilled job creation and growth. Before COVID-19, a large 
share of high growth startups expected to increase the demand for high skilled workers 
and prioritised growth over short term profits.
3. Are hindered by the availability of finance. Already before COVID-19, the availability of 
finance was a major barrier for many high growth startups. In addition, our data reveals 
that, compared to US startups, European startups attract 54 per cent less private funding 
nine years after foundation. European high growth startups are also disproportionately 
hindered by a lack of staff with suitable skills and attitudes.
4. Seemingly benefit from public startup grants/investment. High growth startups are 
more likely than other startups to make use of more than one form of public support and 
particularly seem to benefit from startup grants/investments.
In times when there is enormous pressure on startups with high growth potential, we 
highlight some ways in which governments can continue to support them:
1. Encourage corporate-startup collaboration to boost private investments, e.g. by 
creating novel platforms for startups to collaborate with corporates and other partners.
2. Expand governments’ toolbox to engage with startups through innovative procurement 
and co-development, e.g. by experimenting with new models of startup engagement. 
3. Promote early enterprise education to improve the availability of suitable staff, e.g. 
by building on the Entrepreneurship Competence Framework to design and evaluate 
enterprise education initiatives. 

From starting to scaling How to foster startup growth in Europe by Charlotte Reypens, Julie Delanote, Désirée Rückert