Most European migrating startups stay rooted in Europe, new study finds
A new study from European researchers and the European Commission’s Joint Research Centre finds that almost all high-potential startups relocating abroad, especially to the United States, keep substantial activities in Europe. Home-country sales and labor productivity often grow faster for these migrating startups than for similar firms that do not relocate. The study also offers policy ideas to help retain innovation and talent in Europe.
What changed in startup relocation patterns
The report analyzes how European startups decide to relocate headquarters or major operations. It finds that only a small share, about 3.3%, move their headquarters abroad when they receive venture capital backing. For non-VC-backed high-potential startups, the relocation rate is higher but still indicates ongoing European activity. In practical terms, most relocating startups keep significant European operations even after moving parts of their business overseas, especially in the home country.
Key facts from the study
Key findings include: (1) a minority of VC-backed European startups change their headquarters abroad; (2) relocating firms tend to maintain substantial European operations; (3) home-country growth in sales and labor productivity can outpace non-relocating peers; (4) the European Commission Joint Research Centre contributed to the research. Covers scale and patterns of relocations and policy implications.
Who is affected
The study concerns high-potential European startups, including those that receive venture capital funding and those that do not. It focuses on firms considering relocation to attract markets or talent, and on how such moves influence performance both abroad and at home.
Practical next steps
For policymakers: consider measures to make European bases attractive for founders and teams, such as talent pipelines, access to research and development resources, and favorable regulatory environments. For startup leaders: evaluate whether a foreign market helps growth while maintaining core European operations. For journalists and analysts: monitor further data releases from the study and related EU research to understand long-term effects on innovation and employment.
Limits and questions
The report summarizes patterns and correlations, not a comprehensive causal proof of why growth differences occur. It cites specific figures (e.g., the 3.3% relocation rate for VC-backed startups) but does not cover every European country equally. Readers should treat the findings as part of broader research on how relocation affects innovation ecosystems in Europe.
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