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Davos 2026: Europe’s innovation problem is systemic — and solvable.

  • Writer: cristina irimie
    cristina irimie
  • 5 days ago
  • 3 min read


When Ursula von der Leyen took the stage at Davos 2026, the speech was framed in geopolitical and economic terms: competitiveness, resilience, strategic autonomy. But beneath the headlines, the message carried a much more specific and consequential implication — one that directly affects startups, scale-ups, and the future of innovation in Europe.


For founders and investors, Davos 2026 may well mark a turning point: the moment when Europe openly acknowledged that its innovation gap is not primarily a funding problem, but a structural one.


The real bottleneck: fragmentation, not talent

Europe does not lack entrepreneurs, engineers, or capital. What it lacks is operational unity.

For a European startup, the so-called Single Market still feels fragmented:

  • 27 different company law regimes

  • 27 tax systems

  • divergent rules on equity, employee stock options, labor law and insolvency

  • significant legal and compliance costs when scaling cross-border


In practice, European startups compete with US companies that operate under one legal system, one corporate playbook, and one scalable structure. The competitive disadvantage is structural — and increasingly unsustainable.

Von der Leyen’s Davos message implicitly acknowledged this reality: Europe cannot close the innovation gap without removing internal barriers that slow down company creation and scaling.


EU Inc and the 28th regime: from political idea to economic infrastructure

This is where EU Inc and the 28th regime enter the picture.

The 28th regime — long discussed but never fully implemented — is now positioned as a cornerstone of Europe’s competitiveness agenda. The idea is simple but powerful: an optional, supranational legal framework that innovative companies can choose instead of navigating 27 national systems.

Under such a regime, a startup could operate “from birth to exit” under a single set of rules, covering:

  • incorporation and governance

  • operations across borders

  • equity structures and employee stock options

  • dispute resolution

  • exit mechanics

EU Inc represents the practical embodiment of this logic: a standardized European company form, designed specifically for startups and scale-ups, not legacy corporates.

For the ecosystem, this would be a structural upgrade:

  • faster incorporation

  • simpler cross-border scaling

  • cleaner investment rounds

  • lower legal friction for VC funding

  • more predictable ESOP frameworks

In short: less lawyering, more building.


Why now?

Von der Leyen explicitly linked competitiveness to innovation and scale at Davos. This timing is not accidental.

Europe is facing three converging pressures:

  1. Capital flight — the most successful startups still relocate to the US or UK to scale

  2. Strategic dependency — especially in AI, deep tech and critical infrastructure

  3. Execution speed — where regulatory complexity is now a competitive handicap

The message from Davos was clear: startups are no longer a “nice-to-have” policy topic. They are critical infrastructure for Europe’s economic sovereignty.


That is why the European Commission has committed to:

  • including the 28th regime in its competitiveness roadmap

  • anchoring it in the Startup & Scaleup Strategy

  • targeting legislative proposals in 2026

The scope may initially be limited to young, innovative companies — but the signal is unambiguous.


What this means for founders and investors

Nothing changes overnight. But the direction of travel is clear.

If implemented correctly, EU Inc and the 28th regime could:

  • reduce structural risk for early-stage investors

  • simplify cross-border VC investing

  • make European cap tables more predictable

  • improve retention of high-growth companies in Europe

  • allow founders to focus on customers instead of compliance


For founders, this is about speed and focus.

For investors, it is about risk reduction and scalability.


And that could finally change the game.


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