A coalition of European startups has urged swift action to slash burdensome EU regulations after a landmark declaration from the D9+ group of digitally advanced nations.
The declaration stressed the need for “removing barriers” and “simplifying EU rules and procedures.” Ministers from all 13 countries in the D9+ — Belgium, the Czech Republic, Denmark, Estonia, Finland, Ireland, Luxembourg, the Netherlands, Poland, Portugal, Slovenia, Spain, and Sweden — signed the statement.
They emphasised the need for a “reviewed digital rulebook” that is “deregulated where possible” and “avoids unnecessary red tape.”
A startup group has called for the ministers to back up their words with actions. The S9+ Coalition — founded to give startups a voice in the policy agenda of the D9+ — warned that Europe’s “excessive and fragmented regulation” has become a self-imposed barrier.
“If this declaration is to matter, the next step is clear: D9+ countries must push their colleagues in the [European] Council to simplify, harmonise, and reduce the burden of EU digital regulation — and to make Europe more attractive for investment in innovation,” said Peter Kofler, chairman of S9+ member Danish Entrepreneurs.
The S9+ argues that startups are the foundation of Europe’s next tech champions. The claim is based on solid ground. According to Dealroom.co, just 0.01% of companies create 34% of all economic value — and they all start as startups.
Europe, however, has struggled to turn promising companies into big businesses. Not a single EU company started from scratch in the last 50 years has a market capitalisation over €100 billion. In the same period, all six US companies with a valuation above €1 trillion were created.
Hopes and fears for EU startups
In recent years, Europe has fallen further behind the US in productivity and suffered from a declining share of global tech revenue. The continent’s leading startups now often look overseas to scale. Between 2008 and 2021, almost 30% of European startups valued at over $1 billion relocated their headquarters abroad. The vast majority moved to the US.
These problems are often attributed to stifling regulation. GDPR, for instance, cost small IT companies over 12% of their profits, according to estimates by three Oxford University economists.
In a declaration of its own, the S9+ warned that “Europe cannot regulate its way out of stagnation.”
The declaration proposes concrete actions to tackle the problem. Among its recommendations are rapidly implementing the 28th regime — a proposed single set of rules for the entire EU — and providing tech-friendly zones, with regulatory “sandboxes” alongside a gradual increase in regulatory requirements.
AI regulation is a particular concern for the S9+. The coalition urged the EU to develop a regulatory framework that fosters AI innovation while ensuring fair and open data access. New compliance frameworks, the S9+ stressed, should be restricted to what’s “absolutely necessary” — and only introduced after consulting startups.
The S9+ also emphasised the need to focus on emerging companies, rather than prioritising the demands of traditional industry giants.“Startups are not asking for special treatment,” Kofler said. “We are asking for a level playing field — for access to capital, data, infrastructure, and markets. If Europe wants to close its €800 billion investment gap, it won’t happen by giving old subsidies to old players. It will happen by unleashing the capital and ideas that startups already bring.”
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