DIGITALEUROPE Survey: Stronger Growth Conditions are Needed in Europe  

European companies highlight the need for reform to keep growth and investment in the EU

BRUSSELS, 18 December 2025 – DIGITALEUROPE presented today its annual survey of 138 members*, highlighting the growing gap between Europe’s economic potential and the conditions companies need to grow and invest.

The survey shows that around half of participating companies see Europe’s business environment becoming more challenging, and that a majority of European firms now find their strongest growth outside the EU. At the same time, Europe is struggling to position itself as the natural choice for global investment.

 A changing growth landscape

Europe remains home to world class talent and innovation, yet many companies report increasing difficulty in scaling within the Single Market. Two years ago, 30% of our members felt positive about Europe. Today, the number is down to 8%. What is more, only 44% of European companies find their fastest growth at home, compared to much higher shares in other major economies: 55% of US companies, and 50% of Japanese companies grow fastest in their home markets. To scale, European firms are forced abroad, especially to the United States, which 36% identify as their highest-growth market.

“Our companies should be building their success stories here in Europe,” said Cecilia Bonefeld-Dahl, Director General of DIGITALEUROPE. “Instead, they are going to the US to find the growth they need. That is a competitiveness crisis.”

European companies cannot rely on Europe to grow, and international companies are not choosing us either,” Cecilia Bonefeld-Dahl said. “We should be where European champions scale up and where global companies want to invest.”

Defrost capital: from compliance to growth

Members report that compliance obligations continue to increase year on year, reaching now 12%. If that rate held since the Draghi report’s 2014 estimate of €150 billion, today’s burden could be above €500 billion, roughly 3% of EU GDP.

“This is not about being anti-regulation. It is about being smart,” Bonefeld-Dahl said. “It is about ensuring Europe’s rules help companies to innovate and compete globally. We have proposed 8 projects for European competitiveness; it is time to unleash their potential with real incentives.”

Despite the challenges, there is strong convergence across industry on what needs to change. DIGITALEUROPE’s members identified five priorities to strengthen Europe’s growth environment:

• Cut the regulatory burden. Over 60% prioritize the Digital Simplification Package, with strong support for streamlined AI Act implementation, the Sustainability Omnibus, and Cyber Resilience Act.
• Boost investment. Members want increased funding for digital and especially for Pan-EU projects through the EU’s Multiannual Financial Framework and the European Competitiveness Fund to allow for scale.
• Strengthen Europe’s resilience and security. This means boosting EU defence investments, and accelerating the Cloud and AI Development Act (CAIDA) for defence and critical infrastructure.
• Fix the single market. Companies can only scale if they can grow across borders without hitting 27 different regulatory barriers. Members want concrete action on the Single Market Barrier Reduction Act and a 28th regime to enable seamless cross-border operations.
• Work with international partners. Particularly the United States. Europe cannot compete alone in a fragmented global landscape. Over half of EU companies get their growth outside Europe, and we need to be more attractive to global technology & investments.

“The roadmap is clear. The industry is united,” Cecilia Bonefeld-Dahl said. “The question is whether we’ll act with urgency, courage, and ambition. Europe has the talent and the companies. We just need to make it the place they choose to grow. Because Europe can. We just have to choose to.“

*138 companies responded to the survey. As some questions were optional, the sample size varies by question.