The continent produces innovative technology firms at a steady clip, yet scaling them into worldwide competitors remains stubbornly difficult. According to Cecilia Bonefeld-Dahl, who leads DIGITALEUROPE, the bottleneck extends well beyond insufficient funding. What Europe requires, she contends, is speedier access to capital, streamlined regulatory pathways, more aggressive government purchasing, and greater appetite for backing homegrown companies through their growth phases.
DIGITALEUROPE's reach spans 137 corporate members and 45 national trade associations operating across 30 European countries. Through these channels, the organisation connects with over 56,000 businesses—predominantly small and medium enterprises—working in artificial intelligence, critical infrastructure, defence, healthcare, energy, financial services, transportation, and public administration. Its corporate roster includes technology giants like Microsoft, Google, Apple, Amazon, NVIDIA, and OpenAI, alongside industrial leaders such as Airbus, Siemens, SAP, Ericsson, and Nokia, plus emerging specialists like Helsing, IQM Quantum Computers, BMW, and Bayer.
The organisation maintains a presence in Switzerland, Turkey, and the United Kingdom, while cultivating ties with prospective EU member states. An office in Washington reflects a strategic recognition. As Bonefeld-Dahl explains, "Our members have invested €1.7 trillion in the US over the last few years, so we need to be heard there."
Bonefeld-Dahl brings more than two decades of experience across technology, business creation, and governance. She has held senior positions at IBM and Oracle and founded GlobeIT, a cloud infrastructure provider. Her expertise encompasses European digital strength, artificial intelligence policy, cloud infrastructure, information security, scaleup financing, workforce development, defence innovation, and cross-border technology partnerships. Previously, she advised NATO's Secretary General on emerging technologies and led Denmark's ICT association, its chamber of commerce, and its export council. Relocating to Brussels nine years ago from the private sector, she observed a striking cultural gap: "I was very surprised that nobody spoke about tech with excitement. It was much more about risk and regulation."
Identifying Tomorrow's European Tech Leaders
DIGITALEUROPE established its Future Unicorn Awards in 2018 to spotlight European growth-stage companies positioned to become the continent's next generation of major technology firms. Rather than monetary prizes, the awards provide market exposure and pathways to funding sources.
Since 2020, the programme has recognised Danish health-focused artificial intelligence firm Corti (2020), Hungarian precision cancer-treatment company Oncompass Medicine (2021), British supply-chain transparency platform Circulor (2022), Spanish intellectual-property protection company Red Points (2023), Spanish quantum algorithm developer Multiverse Computing (2024), Estonian AI-driven contract negotiation platform Pactum (2025), and French quantum photonics manufacturer Quandela (2026).
A Dual-Use Technology Award debuted in 2025, with German unmanned-aircraft maker Quantum Systems as the inaugural recipient. The 2026 edition went to Spanish low-Earth-orbit satellite operator Sateliot, which is constructing a 5G internet-of-things constellation. In September, DIGITALEUROPE unveiled the Transatlantic Dual-Use Unicorn Award, targeting security and dual-use technology enterprises from Europe, North America, and Ukraine. Developed alongside Ukraine's Ministry of Defence, Ukraine House, and Cerberus, the initiative aims to link companies with investors, purchasers, and implementation partners spanning civilian and military sectors. Ukraine's Brave1 defence innovation programme will nominate as many as five Ukrainian entrants.
The awards have cultivated an alumni network of roughly 250 European growth-stage companies across three separate programmes. Bonefeld-Dahl reports that approximately 50 secure funding within twelve months, drawing from the European Investment Bank, European Investment Fund, European Innovation Council, or private sources. The awards additionally forge connections between founders and government officials. Last year, the EIB president, a European Commission member, and the EIF chief engaged directly with the scaleup community. "They really listened and understood the issues. They came out of that with a position that they were going to shorten the cycles for getting money and remove bureaucracy."
DIGITALEUROPE convenes smaller executive forums that counsel the Commission and national authorities. "Our mission is also to showcase companies that are staying and scaling in Europe and use them as spearheads to make politicians listen."
The €800 Billion Funding Shortfall
Bonefeld-Dahl identifies securing greater budget allocation for technology, growth-stage enterprises, and strategic resilience as a central DIGITALEUROPE objective. "Instead of 90 per cent of the budget going to all kinds of other things — which are nice — we need to move some of that money into European value creation, the next generation of companies, and resilience. That's one of our big lobbying priorities."
DIGITALEUROPE collaborates with the European Investment Bank and European Investment Fund to accelerate their funding mechanisms. "We say there should be a maximum of three months from application to receiving the money. We have a commitment for six months now, so hopefully that will change. We want to get it down to three."
The EU Scaleup Fund represents modest capital but a meaningful breakthrough. This growth-stage vehicle targets €5 billion in total commitments, including a €1 billion European Commission contribution, designed to address Europe's chronic shortage of substantial growth funding for strategically important technology enterprises and enable more to expand without seeking overseas investors. "This has never really been done before. You have the regulators, and then you have the EIB and the funds. There are a lot of conversations happening behind the scenes that people don't necessarily see. We're aiming to get three or four other scaleup funds. Not necessarily €5 billion in size, but perhaps €25 billion or €50 billion."
Yet the challenge remains substantial. "If you look at VC funds in Europe, I think it's around €130 billion. If you go to the US, it's around €930 billion. So we have this €800 billion gap that we're not attracting, and we need to ask ourselves why."
Pension funds represent another critical variable. American institutional investors have historically shown greater comfort channelling retirement savings into startup and growth-stage ventures, whereas European scaleups routinely receive backing from foreign pension pools without equivalent domestic alternatives. "Pension funds are extremely cost-driven. They look at the cheapest route into funds, and therefore they often end up in very large, typically American funds. We could change that. We could give them different incentives and make it more attractive. We could lower the costs. There are many things we could do before we go to regulation and restrictions again."
The European Commission has unveiled a roughly €2 trillion Multiannual Financial Framework spanning 2028 through 2034, featuring a European Competitiveness Fund intended to direct additional resources toward critical technologies and reinforce Europe's industrial and technological standing. "We have the new budget coming up, and one of our biggest priorities is moving some of the funding from old investments into new investments and making sure the Competitiveness Fund uses genuinely competitive funding mechanisms such as the scaleup fund."
Regulation Alone Cannot Drive Growth
For Bonefeld-Dahl, narrowing the investment gap requires more than simply locating additional funds. She points to the AI Act as a cautionary case study. In May, EU decision-makers reached a political settlement on modifications to the AI Act, clarifying how its provisions interact with other European legislation.
Within the medical technology field, however, the agreement left unresolved persistent questions about how AI-powered medical devices will be governed alongside the existing Medical Devices Regulation and In Vitro Diagnostic Medical Devices Regulation. In response, MedTech Europe, COCIR, and DIGITALEUROPE called for integrated governance of AI-enabled medical products. They contend that manufacturers should not face overlapping regulatory frameworks addressing identical risks and obligations.
Instead, they urge alignment between the AI Act and current medical-device standards, eliminating redundancy and establishing clearer market access while preserving safeguards for patient welfare and device quality. "We already have very strict rules in this area. It becomes a never-ending story of trying to avoid risks that are already covered."
Is the pace of change sufficient? "No. But it's also about organising our financial markets and harmonising things such as employment rules and the taxation of capital. These are the things that make it attractive for a company to spread across Europe rather than establish itself in one country and then go to the US."
Fragmentation is what the proposed EU Inc (the so-called 28th regime) aims to remedy, which DIGITALEUROPE backs in its original conception.
Public Procurement as a Growth Engine
Financing represents only one dimension of the scaleup challenge. Europe must also simplify pathways for young companies to supply government agencies. The United Kingdom, Bonefeld-Dahl notes, has established procurement targets favouring scaleups and accepts certain risks inherent in purchasing from less-established firms. "Can we somehow incentivise procurement in Europe from some of these scaleups? That could be amazing."
Currently, she argues, such willingness to embrace uncertainty is minimal. "But I do think we can learn from places like the US, which says that in certain areas, a percentage needs to be done locally — whether you're European, American, Japanese, or whatever. That could be a tool."
A complementary approach involves reducing exposure for public-sector purchasers. "We could also lower the risk barriers for the public sector and say: buy more from scaleups. Try more innovation."
The defence sector offers a workable template. "In defence, for example, we need test centres where you buy one or two products, test them, see if they work, and, if you really trust that the company can deliver, then you buy. Germany and Sweden do this very well."
Though European sovereignty resonates powerfully within startup circles, with many enterprises committed to building locally using regional materials and technology to minimise reliance on American and Chinese systems, Bonefeld-Dahl emphasises that DIGITALEUROPE remains devoted to unrestricted commerce. "We don't believe the answer is simply 'buy European' because technology moves so fast. In some areas, such as energy technologies and connectivity, Europe leads the world. In cloud, we don't. At different times, different players from different places will lead in different areas. As long as they are allies, I think we should be able to work with them. What we need to do is incentivise more risk-taking rather than always buying from the safest option."
Lessons from NATO's Defence Innovation Model
Bonefeld-Dahl participated in developing NATO DIANA and subsequently the NATO Innovation Fund, dedicating two years to both initiatives. She highlights the network of testing facilities distributed across NATO member states as a framework for connecting emerging technology firms with actual defence sector users. "With DIANA and the Innovation Fund, you have around 200 test centres across NATO allies. They can take these amazing scaleups and say, 'We're going to invest a little bit of money, but you can also test your products in Finland, Denmark, Germany, and the US.' All of a sudden, you have these incubators where companies are already working with defence. Defence customers can see the products, companies can hear what those customers actually need, and then they're ready to sell. We need much more thinking like that: create common test centres where we can work together and test products under different conditions."
The subsequent challenge involves reducing fragmentation in such efforts. "Instead of Denmark doing it the Danish way, Germany doing it its way, and Finland doing it its way, we could think more like an alliance. How can we create five or six big test centres where we incubate defence tech? Then we buy two, three, or four products and test them together."
Regulatory Battles Ahead
Streamlining regulatory requirements stands as a key DIGITALEUROPE priority. Bonefeld-Dahl argues that the combined weight of the AI Act, data governance rules, and fresh cybersecurity mandates has not eased the compliance burden on European enterprises. Data sharing represents another contested area. "We are basically asking European companies to share data with competitors. I think it's private property, and I'm ready to defend that. In a crisis situation, fine. If something is wrong and companies need to help, that's different. But if we want European companies to be competitive, we need to think very carefully about requiring them to give data away."
The Digital Fairness Act, a forthcoming European law designed to strengthen online consumer safeguards where existing frameworks contain gaps or redundancies, presents another flashpoint. DIGITALEUROPE questions whether additional legislation is necessary, arguing that the real problem stems from inadequate enforcement and inconsistent regulatory application rather than insufficient rules. It identifies practices including deceptive interface design, subscription entrapment, habit-forming mechanics, targeted advertising, celebrity endorsements, and fraudulent online conduct as already covered by existing statutes including the Digital Services Act, General Data Protection Regulation, Unfair Commercial Practices Directive, and Consumer Rights Directive.
Recently, DIGITALEUROPE joined other industry groups in urging the Commission to "pause and reset" the Digital Fairness Act, cautioning that it risks introducing supplementary regulatory layers, raising compliance expenses, and contradicting the EU's broader agenda of regulatory simplification and market competitiveness. Bonefeld-Dahl acknowledges, "it's going to be extremely sensitive. It's going to be a hot potato, and it's very extensive. We already have members with different views on it, so internally we're preparing very carefully. In principle, we are pro-open markets and pro-competition, and our position will be along those lines."
Making Europe the Obvious Choice
Despite these concerns, Bonefeld-Dahl does not regard Europe as inherently hostile to investment. Her aspiration is that within a decade, European technology founders will opt to remain on the continent because the conditions for scaling make it the natural destination. "I stay in Europe because it's so attractive here. There's a great framework. It's easy for me to do business. It's easy to attract risk capital. Procurement is simple. We basically maintain our liberal, open markets, but we're just so attractive that nobody can get around us."
Source: Tech.eu
