Building faster European business success through entrepreneurial readiness
Europe does not need more unprepared business registrations. It needs more companies that are still there in five years. This report shows how readiness before starting can deliver more viable startups and a stronger European economy.
INNOVATION MIND
Claes-Goran Hammar
9/30/20265 min read
Background
Europe wants more startups, more scaleups and more companies that can compete with the United States and China. The Draghi and Letta reports in 2024 made the case in blunt terms. Europe is not short of ideas, researchers or early stage companies. It is short of the conditions that let a good idea become a large, durable business. The EU accounts for only around 5 percent of global venture capital raised, compared with 52 percent in the United States and 40 percent in China, and nearly 30 percent of the European companies that reached unicorn status between 2008 and 2021 moved their headquarters outside the EU.
The Commission has responded with the Competitiveness Compass and the EU Startup and Scaleup Strategy, adopted in May 2025, which sets out 26 actions across five pillars: regulation, finance, market access, talent and infrastructure. Flagship instruments are now moving through the legislative process, among them the 28th regime ("EU Inc.") proposed in March 2026 and the European Business Wallet. The Scaleup Europe Fund, with a target of five billion euros, was established in August 2026. These are necessary reforms.
Yet there is a gap in the picture. Every one of these measures improves the conditions around the founder. None asks whether the founder is prepared. According to Eurostat, around four in five new enterprises in the EU survive their first year, but only about 45 percent are still trading after five, with national rates ranging from roughly 26 percent to above 60 percent. Part of that attrition is made up of businesses that, looked at honestly, were unlikely to succeed from the start: no validated customer need, no adequate market, little financial literacy, or not enough time, savings, health or family support to carry a young business through its hardest years. The figures here are from Eurostat's 2018 reference year, and the report is explicit about that and about the limits of the statistics.
Purpose
This report is published on behalf of EURINN.eu. Its purpose is to help Europe get more viable startups, which in turn strengthens EU competitiveness., and through them a stronger economy. Its central claim is simple to state: Europe does not need more unprepared business registrations, it needs more companies that are still there in five years, still employing people, still paying tax and occasionally growing into the scaleups the Draghi and Letta reports say Europe needs.
When capital, time and entrepreneurial talent are tied up in ventures with no realistic path to viability, they are not available to the companies that can scale. A more efficient capital market and a simpler regulatory environment only deliver value in proportion to how many of the founders using them are ready to build something that lasts. The report therefore proposes founder readiness as a missing sixth pillar of European competitiveness policy, positioned as the pillar that determines how much value the other five actually deliver.
The report is equally clear about what it is not. It is not an argument against risk, ambition or failure, since an economy without failure would be an economy without experimentation. It does not propose new licensing regimes or a retreat from the simplification agenda. It targets one specific category: failures that were foreseeable and preventable through better preparation, as distinct from ordinary market uncertainty.
What the report covers
The report runs to 31 chapters in nine parts and is written for EU and national policymakers, business support organisations, banks and training providers.
The first parts establish the scale and nature of the problem. They show how startup survival differs across member states, why official statistics probably understate the issue, and what patterns recur among companies that should never have started. The analysis then moves to root causes, including overconfidence and the illusion of control, financial literacy and planning gaps, necessity driven entrepreneurship, slow bureaucracy and a policy paradox. Easy registration sits alongside hard access to banking and finance, and schemes are rewarded for registration volume rather than survival.
The report then traces who bears the cost, and this part makes it more than a policy paper. The damage runs from the entrepreneur, who may carry debt, health consequences and a lasting reluctance to try again, to families and partners, customers left without goods and services, suppliers who go unpaid, and the state, which loses tax revenue and carries welfare costs. The report builds a conservative, openly illustrative estimate of 20,000 to 35,000 euros for a single foreseeably preventable failure, and it states plainly that no official EU wide figure exists yet.
It also looks outward. It compares how other systems prepare founders, including France's 30 hour pre-installation course for artisans, Germany's master craftsman requirement and the American SCORE mentoring network. It reviews what research says about business training and mentoring, and it is honest about what the evidence supports. Training raises profits and sales by an average of 5 to 10 percent in the studies reviewed, design matters a great deal, and the evidence on mentoring and accelerators is mixed. The report does not claim more than that.
The proposal
The report proposes a framework built on five dimensions of readiness: understanding and solving a genuine customer need, making sure the customer understands the business idea, validating that the market is large and profitable enough, building financial and business literacy, and personal readiness covering knowledge, time, finances, health, will and the support of family or partners. It is delivered as a short, applied course of around 30 hours built around the founder's own idea and numbers, followed by a year of light mentoring by the same person who made the assessment.
The model is voluntary. Founders can register a business the way they do today, or register after completing the course and receive a readiness certificate that can unlock advantages such as access to start-up grants, mentor support and credibility with lenders. No one is blocked from starting. The certificate confirms that preparation was done properly, not that the business will succeed, and the report sets out how to protect founders' personal data and guard against bias in assessment.
Recommendations
The recommendations are concrete and sized to existing institutions. The Commission, together with Parliament and the Council, should ensure that the 28th regime and the European Business Wallet can carry a readiness certificate while those files are still under negotiation. Eurostat should separate controlled closure from disorderly bankruptcy and track certified and uncertified founders. Member states should start with funding streams such as employment agency start-up grants, which need no change to registration law. Banks and the European Investment Fund should test whether certification predicts loan performance, using designs that deal with self selection. Training providers should keep the course short and focused.
Everything is built around pilots with evaluation from the start. The report's illustrative calculation suggests that a programme costing around 1,000 euros per founder, including course and mentoring, can return between one and a half and four and a half euros for every euro spent, but it treats these as working assumptions to be replaced by measured data, and it is open about not yet having a randomised trial of this exact framework.
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