For decades, Europe’s tech sector has lagged behind its rivals in the United States. While Silicon Valley produced global giants like Google and Apple, Europe has failed to build anything on the same scale.

Building a thriving tech industry is no longer just desirable in terms of European jobs, skills, and prosperity. It is an urgent geopolitical and strategic requirement.

Over the past year, Europe has taken decisive action to set out a road map for success.

Now we must work together across the public and private sectors to translate words into action.

EQT has been nurturing European companies for over three decades. In the past five years, we have invested €120 billion in Europe. Building on the success, we aim to double it to more than €250 billion over the next five years. We would like to commit even more - but that hinges on Europe becoming a place where companies can truly fulfill their potential.

In the past 50 years, the U.S. has created 241 companies from scratch with a public valuation exceeding $10 billion. The EU has generated just 14, according to research by Andrew McAfee at MIT. This isn’t just an unfortunate statistic - it has serious implications for the continent’s future prosperity and ability to chart its own course in an increasingly volatile geopolitical environment.

The raw materials are all there: deep technical talent, world-class research, and vibrant startup hubs. Europe has the potential not just to catch up but to lead. As the continent’s largest private investment manager, we see four priorities that can help make that a reality.

First, we must remove the barriers that prevent companies from scaling. There’s no question that many European countries are great places to start a company, but as businesses grow, they face friction due to fragmented markets, complex regulations, and bureaucracy.

The difficulty of setting up stock option plans illustrates the challenge. For early-stage companies, they are essential to attract and retain the best brains. But a Dutch startup with a few employees in Germany, France, and Poland must operate separate plans in all four countries, making it costly and complex. The end result is that Europe does the hard work of nurturing talent and innovation, only to see it flow across the Atlantic. While there are hurdles in the U.S. too, overcoming them delivers a far greater prize - a unified market of over 300 million people.

To support entrepreneurs, Europe must establish an EU-wide framework that simplifies and harmonizes rules for companies operating across borders - what the European Commission refers to as the “28th regime.” That is why we support EU-Inc and its call for an ambitious version of this initiative, a pan-European legal entity that gives startups and scale-ups the best possible foundation for global success.

The second priority is to build a coherent financial ecosystem. Today, different exchanges, clearinghouses, currencies, and regulations make it tougher to pursue public listings than in the U.S. That does not mean it’s impossible. Since 2000, we have taken more than 30 companies public, including 23 in Europe - and EQT itself has been listed in Sweden since 2019. In many cases, a European exchange remains the right choice. But there could, and should, have been many more European IPOs.

To respond, Europe must advance the Savings and Investment Union. Key steps include harmonizing listing rules and easing cross-border IPO access. The end goal must be a true pan-European stock exchange - and German Chancellor Friedrich Merz’s recent support for this idea could mark a watershed moment. But Europe cannot afford to wait for such a pan-European stock market to become reality. In the meantime, all big European economies should establish national task forces to replicate best practices from member states where capital formation is stronger.

A third critical issue is access to capital. The Draghi report points to a widening funding gap between the U.S. and the EU. The shortfall is particularly acute in deep tech - the sector from which many of Europe’s future champions are likely to emerge. These companies develop breakthrough technologies that require significant R&D spending and patient, long-term investment. Yet even the most innovative struggle to find the scale needed to thrive.

The answer is to ensure more long-term capital flows into sectors critical to Europe’s future. That means combining the private sector’s experience in scaling companies with the public sector’s convening power and ability to shape regulations - an approach now being championed by the Commission. Europe must also boost demand for early-stage tech: while brilliant technologies are built here, too few are bought here. By acting as early adopters through innovation-friendly procurement and offtake agreements, governments and large corporations can help deep-tech firms bridge the “valley of death” and keep innovation anchored in Europe.

Finally, more emphasis should be placed on the steps individual member states take to drive growth. My native Sweden is a case in point. Of the 14 “new” European companies publicly valued at more than $10 billion, four are Swedish - and as the CEO of EQT, I’m proud to lead one of them. Following reforms in the 1990s, Sweden has become a European leader in patents, R&D, capital market depth, and IPOs. It has fostered one of Europe’s strongest retail investment cultures, where households actively invest their savings instead of parking them in low-yield deposit accounts. Swedish retirement savings are invested in capital markets to a much greater extent than in most member states.

Europe doesn’t need to copy the United States to succeed. We should learn from one another and scale what already works. Our own journey shows that Nordic roots and a European mindset are sources of strength. EQT has become global because we are European, not despite it. The challenge ahead is to sharpen Europe’s competitive edge - our diversity, world-class education, and deep social trust - while fixing what slows us down.

To make scaling in Europe the rule, not the exception, we need coordination, courage, and commitment from all sides. And we need it now.