According to the Global Entrepreneurship Monitor, the overall level of TEA in Europe is generally lower than in other regions, particularly North and South America. That gap could be due to the social safety nets, which provide a sense of peace to workers who favour stable employment conditions. With lower risk and secure employment options, many Europeans opt for traditional jobs over entrepreneurship.

To understand how Europe's startup landscape is evolving, we must examine the role of migrant entrepreneurs, the impact of innovations in emerging industries, and the mechanisms bridging the entrepreneurship gap. Crucially, this involves recognising the potential of collaboration between large international companies and young startups.

By leveraging resources, expertise, and mentorship, these partnerships can foster innovation, drive growth, and create a sustainable ecosystem that benefits both established businesses and emerging talents.

The dual challenges of stability and disruption

Some entrepreneurial challenges remain constant, while others evolve with time, influenced by shifting economic and political landscapes. Ivan Montik, Founder of SOFTSWISS, a global tech company, highlights this duality: “I think there are fundamental issues that remain relevant at all times and dynamic ones where new problems emerge while old ones get resolved. For instance, when I launched SOFTSWISS in 2009, it was a completely different era with different challenges than today. In my view, among modern difficulties, the unstable world distracts us from our goals, making it harder to focus.”

Today's startup founders must learn to adapt to the modern world in new ways.

Here are some recommendations Ivan Montik offers based on his experience:

• Develop a clear vision of what you're creating and the ultimate goal of your product or service
• Stay aware of all project components, from product development and technical aspects to legal considerations, hiring, and processes
• Don't entertain the thought of burnout. Achieving results requires hard work, active efforts, and decisive actions. If you're mentally unstable and unable to rest and switch off, it poses a problem for your startup
• Don't succumb to the dizziness of success. Maintain control, act according to the plan, or adjust the plan based on results. It's easy to quickly spiral from euphoria into depression and problems

One more recommendation for founders is to do everything possible to learn the fundamentals of financial literacy. Learn how to interpret financial reports, including Profit & Loss statements, Cash Flow, and Balance Sheets. Without understanding and controlling finances, you can quickly burn through money, and the entire startup can fail.

Migrant entrepreneurs: a catalyst for change

The integration of migrants into European startup ecosystems has emerged as a significant opportunity for economic growth and social cohesion. Research shows that within five years of relocating, migrants can contribute positively to the host nation’s economy.

With high TEA rates observed in the Baltic states, UK, Ireland, Netherlands, Croatia, Portugal, and Turkey, infusing migrants into a local startup ecosystem is a win-win. Instead of competing for existing jobs, migrants cultivate new employment opportunities that contribute to the overall sense of success and stability.

Ivan Montik states: "Frankly speaking, I believe that expats drive the core startup movement in Europe. And it's not only Eastern European countries, but also the United States, Africa, and Asia." Having lived in Germany for nearly nine years, Montik observed that the country lacks an education system that encourages entrepreneurship. Europeans generally prefer stability over taking risks, making migrant entrepreneurs essential for driving innovation and dynamism into the region.

A great example of this phenomenon is H&H Travel Cyprus, a startup founded by expatriates that leverages AI to offer personalised travel experiences. The company’s founders have introduced a fresh perspective to the Cypriot tourism industry: rather than focusing on mainstream attractions, they’ve identified the potential of uncovering hidden gems and connecting travellers with local businesses and authentic experiences. Their innovative approach was recognised when they won at the Axios Startup Accelerator during the final competition in Berlin. The event was judged by an esteemed panel, including SOFTSWISS Founder Ivan Montik, who also awarded this startup with a special prize. This success story is a prime example of how migrant-founded companies contribute to economic growth by bringing new ideas to the table.

The trend of accepting migrants into a European country supports the potential growth. Startups offer a pathway for migrants to integrate and prosper fully in an already existing culture. Inclusive policies and targeted governmental support should be leveraged to take advantage of the entrepreneurial spirit of migrants to invigorate any local European economy.

Industries poised for growth

The evolving landscape of various sectors is driving new startup growth and reshaping traditional industries.

Ivan Montik highlights fintech as a promising sector. As the paradigm of the banking system and payments continues to change, new opportunities for innovation are being offered. Traditional banking is experiencing a transformative period due to the integration of innovative digital payment systems that are overshadowing legacy operations.

Montik explains: “The entertainment industry will always be relevant since almost every person on Earth spends a significant amount of time and money on entertainment, leisure, and gambling. There’s also a clear trend toward developing AI technologies, but here I see more practical use cases of existing large models like OpenAI.”

Montik's observations above are echoed by recent market analyses, which reveal significant growth trajectories in these sectors. The fintech sector is projected to expand at a compound annual growth rate of around 25%, with valuations expected to surge from $194 billion in 2023 to nearly $492 billion by 2028. This rapid expansion is fueled by venture capital investments and established financial institutions pouring billions into innovative fintech ventures.

Additionally, state funding has become a pivotal driver in the AI sector, with governments injecting approximately $5 billion into AI companies in 2024.  Funding is anticipated to grow at an estimated rate of 15% in 2025. These figures underscore Montik's emphasis on the transformative potential of fintech and the practical applications of existing AI technologies.

The growth of the fintech sector is clear in the rise of startups like Brite Payments and Pennylane. Brite is redefining payment methods in Europe, while Pennylane is modernizing financial management for small and mid-sized businesses. These fintech startups are leading the way in transforming the digital economy, supported by massive investments and a growing demand for faster, more efficient solutions.

Similarly, the AI sector is seeing the rapid rise of startups like Mistral AI and Synthesia. Mistral, for instance, has made waves with its open-source large language models, while Synthesia is revolutionizing content creation with AI-generated videos. These companies are part of the wave of innovation in AI, benefiting from large investments and shaping the future of technology in Europe.

When startups participate in legacy accelerator programs, they report a survival rate of up to 85% in the first five years. That is a much higher success rate than the average of only 50% survival.

Investing in young teams so they feel the support necessary and the capability to overcome regional challenges ensures a more robust local economy in and around Europe. As long as there are shared goals and values with integration and collaboration processes in place, we could enjoy a renaissance of startup activity in areas needing a fresh infusion of resources, jobs, and business.

The role of collaboration and corporate partnerships

The trick to building a thriving startup ecosystem is demanding interest from various stakeholders, such as corporate partners. These entities provide funding, networking, and consultations with more experienced managers and mentors.

Startup entrepreneurs, whether locally grown or from the migrant workforce, need guidance. In the early stages, learning how to structure a business or avoid architectural mistakes is crucial to ensure the longevity of operations.

Ivan Montik highlights that corporate partners like SOFTSWISS can play a pivotal role in fostering innovation by leveraging their resources and expertise: “Companies like ours have all the necessary tools and knowledge to assist young startups. We can provide not just financial support but also technical consulting, helping teams avoid critical errors early on.”

He emphasises the importance of processes for interaction, collaboration, and shared goals. Based on shared values, closer cooperation can be established by engaging more experienced employees to offer consulting and support to young teams. Moreover, industry-specific startup events should be organised where teams can present projects in sectors relevant to the partner company. After all, within larger businesses, there often isn’t enough vision – or even time – to develop something new apart from current tasks.

Large international companies have resources and expertise. They can assist young startups so founders understand the importance of sharing ideas and experiences with others. That value of contributing to new generations will then be passed on from founding team to founding team, ensuring an evergreen flow of entrepreneurship that helps the European economy flourish.

A bright future for European startups

Despite the challenges of the local workforce, which prefers secure work over risk or complex and bureaucratic governmental systems, supportive structures can be put in place to foster quick decision-making and clear pathways for entrepreneurship.

While public markets have fallen behind the United States over the past decade, startup growth remains strong. The European startup ecosystem is growing as fast as the United States, with the share of the venture capital ecosystem increasing since 2021. These VC fund net returns outperformed the United States by 6.24% in the last five years.

If leaders implement the strategies proposed by entrepreneurs like Ivan Montik, we could see dramatic growth. The European tech industry is projected to be worth 8 trillion dollars in ten years, providing the economy with a world-class talent pool of 20 million people.

Embracing innovative thinking, fostering collaboration, and welcoming migrant founders are all ways Europe can stand as a global leader in startup growth and development. Success in the startup niche requires more than a vision. There must be 100% commitment from founding teams and buy-in from partnerships.

Europe must harness its diversity, talent, and creativity to build a more resilient and dynamic entrepreneurial landscape offering rich soil for startups to grow.

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