Brussels Briefings

The idea that Europe is regulating itself out of competitiveness has become a familiar refrain. It surfaces in policy debates and boardrooms alike, often as a simple explanation for why the continent lags behind the United States in technology. But according to Anu Bradford, Henry L. Moses Professor of Law and International Organization at Columbia Law School, that diagnosis misses the point.

“The debate about digital regulation is a sideshow to the main problems underlying Europe’s technical system.”

Bradford does not dismiss the importance of competitiveness. On the contrary, she frames it as fundamental. “There’s no security without prosperity. Europe needs more economic growth, and technology is key to that.”

But focusing on regulation, she argues, risks distracting from deeper structural constraints that have shaped Europe’s tech ecosystem for years.

A fragmented market at home

The most immediate of these constraints is internal fragmentation. Despite decades of integration, Europe remains far from a seamless market.

“There’s no true digital single market in Europe. We still have a very fragmented marketplace.” For companies, this makes scaling fundamentally different from the United States. Instead of expanding within one large market, European firms must navigate many.

“European tech companies have to scale across 27 different markets, with different languages, consumer preferences, and regulatory fragmentation.”

The cost of this fragmentation is not abstract. “If you translate those internal barriers into tariff equivalents, it’s about 60% for goods and close to 100% for services.”

These are not formal tariffs, but they illustrate how difficult it is to operate across Europe as if it were a single market.

Why scaling remains difficult

Bradford zeroes in on four issues that explain why this competitiveness problem persists: market fragmentation, capital, risk culture, and talent.

She has already pointed to fragmentation as a core constraint. Capital is another. “European companies do well in early funding rounds, but when they need larger amounts of capital, they often turn to US investors or get acquired.”

Risk culture also plays a role. “In Europe, if you fail, you’re often done. It’s very hard to raise money again.”

She contrasts this with the United States. “In the US, failure is part of the model. After bankruptcy, investors may still back you if you’re working on something ambitious.”

Talent flows reinforce the gap. “Europe is losing talent to the US, where the capital, top universities, and concentration of talent are.”

Taken together, these factors describe a system where innovation exists, but scaling remains constrained.

Anu Bradford is the Henry L. Moses professor of law and international organization at Columbia Law School and director of its European Legal Studies Center. Her research focuses on international trade law, EU law, and antitrust.

A world without a dominant model

The global environment is also shifting. The expectation that one model of technology governance will prevail is fading.

“There won’t be a single regulatory model that becomes global.” Bradford explores this dynamic in Digital Empires, where she outlines competing American, Chinese, and European approaches to regulating technology.

In the interview, she notes that each model faces its own pressures. “They’re all having a moment, but also facing headwinds.”

The result is not convergence, but coexistence.

The rise of tech sovereignty

For companies, this fragmentation is already reshaping strategy.

“Tech companies are now expected to offer sovereign solutions, where governments retain control over data and operations.”

Meeting those expectations often requires duplication. “That means replicating infrastructure, like building data centers in different parts of the world.”

Global operations are becoming less uniform and more complex, as firms adapt to political and regulatory demands.

Startup founders and investors across Europe paid close attention when Ursula von der Leyen, president of the European Commission, took the stage at the World Economic Forum in Davos yesterday.

Not because Europe suddenly promised more subsidies or grand strategies. But because, for once, the language sounded familiar. Practical. Almost founder-like.

When von der Leyen said, “We call it EU Inc,” she gave a name to a frustration that has quietly shaped European startup life for over a decade. Europe has talent, capital, research, ambition, and world-class founders. What it has lacked is the ability to move at the speed those founders need.

This time, the problem was not framed as cultural or philosophical. It was framed as structural. And that alone made people lean forward.

The single market in theory and in practice

For years, Europe has marketed itself as a single market of 450 million people. On paper, that is true. In reality, any founder who has tried to scale beyond their home country knows how quickly that promise collapses. Each new member state brings new company law, new capital rules, new option structures, and new paperwork. Expansion becomes an administrative exercise rather than a growth decision. Many companies quietly decide it is easier to incorporate elsewhere.

The Finnish business community does not yet fully understand how crucial it is to seek influence over EU decision-making in Brussels, says Member of the European Parliament Aura Salla. She offers companies practical tips on how to improve their lobbying efforts. She also urges companies with a clear message: risk financing is now available, so apply for an InvestEU loan guarantee.

Finnish companies are too often weak at lobbying for their interests in the EU, says Aura Salla, who is serving her first term as an MEP in Brussels. A member of the National Coalition Party and the European People’s Party (EPP), Salla focuses in particular on technology, defense, and dismantling unnecessary EU regulation. 

Aura Salla, who is serving her first term as an MEP in Brussels, is known for her work on technology and defense, and dismantling unnecessary EU regulation. 

“EU decision-making and the opportunities it enables are poorly understood in Finland. When companies come to lobby, they haven’t done their homework. They often don’t know what is currently happening in the EU, and their lobbying lacks a sharp edge – what it is they actually want to influence,” Salla says.

She highlights Italy and Germany as masters of lobbying.

“Italy gets things through very effectively because they have professional lobbyists, companies understand the importance of gathering information in advance, and networks are built tightly. Germans are also highly skilled and efficient in this. Finnish companies, instead, tell decision-makers that the situation is difficult. But we already know that – we understand the operating environments. Instead of situation analysis, companies should be concrete and choose a precise focus: what exactly they want to influence and what they want to change.”

How to improve lobbying efforts

Aura Salla has a long work history in Brussels. Before her term in the European Parliament, she worked within the EU for years, including in the cabinet of Vice-President Jyrki Katainen and as an adviser in the in-house advisory service of Jean-Claude Juncker, the former president of the European Commission. She subsequently worked at Meta as the head of EU affairs and public policy. 

Salla’s first piece of advice to companies is: always hire a professional lobbyist. Small companies can do this together as a coalition. Her second piece of advice is: know the EU’s current topics and decision-making processes. Barriers to growth can only be influenced if one makes the effort to understand the current state of legislation and how it is progressing.

The third suggestion concerns opportunities that Finnish companies, in Salla’s view, still do not recognize well enough.

“Brussels is not a necessary evil – the EU is worth knowing inside out. You can influence things here, regulations are dismantled here, and major decisions are made here. Companies are used to trying to influence decision-makers in Finland. So I wonder why they are not active at the EU level in Brussels.”

At present, funding opportunities are available for companies. Salla served as the chief negotiator for the InvestEU loan guarantee program, which the European Parliament approved recently. The program enables at least €55 billion in private investments to be mobilized across Europe. In addition, it secured €2.9 billion in additional guarantees and eased reporting requirements for SMEs.

The program is a loan guarantee scheme that has been used to finance growth-oriented companies in Europe for over 10 years. In Finland, for example, Swappie received €17 million last year to expand its circular economy business.

Salla is now encouraging companies to apply for InvestEU financing.

“Risk financing must be brought to Europe. I don’t believe in direct company subsidies, but loan guarantees are a smart use of the EU budget. This won’t solve the problem, but it is a way to get private capital moving. My message to companies is simple: risk financing is now available, so go to your bank and apply for this loan guarantee.”

In pursuit of technological sovereignty

In the field of technology, Salla advocates European sovereignty and calls for disengagement from Microsoft. Europe’s technological dependence on the United States is a significant risk that must be addressed, she says.

“I often hear that we already lost this game and that Europe should have acted 10 years ago. And we should have – but that doesn’t mean nothing can be solved anymore. The reality is that U.S. companies could, on any given day, cut off our access to things like email and other critical infrastructure. That’s why Europe must rely on European technology. It’s protectionist, but there is no other way.”

Listeds’ Brussels Briefings is a series of articles in which decision-makers and experts in Brussels discuss current issues and share their insights with Nordic companies.