A new study published by the European Investment Bank (EIB), in collaboration with the European Commission under the InvestEU Advisory Hub, examines the reasons shaping relocation decisions of innovative startups and scaleups from the EU and identifies measures to help Europe better retain high-potential firms.
Based on a targeted survey of founders and C-level executives, the study provides first-hand evidence on why, how and under which conditions companies decide to relocate part of their activities outside the EU.
Main findings
The study finds that relocation decisions are driven by a common set of factors across sectors and countries: companies tend to move where there is easier access to venture capital, proximity to large and unified markets, more favourable regulatory environments, and better availability of experienced commercial and sales talent.
Relocation is rarely an all-or-nothing decision though. Most companies pursue partial relocation strategies, such as moving legal headquarters or core management functions abroad while keeping key activities, including research and development (R&D) and engineering, in the EU. Investor requirements, particularly from US-based investors, in some cases act as a trigger for relocation.
Founders interviewed also put forward practical recommendations to strengthen Europe’s startup and scaleup ecosystem, including more innovation-friendly regulation, improved access to growth capital, better conditions to attract and retain international talent, and stronger support for globally ambitious companies.
