Insight
Europe produces world-class innovation and struggles to commercialise it. The United States does the reverse. What does that asymmetry mean for European technology, and where can an independent research team add value in the gap between the two?
The defining feature of the transatlantic technology relationship is not a gap in ideas. It is a gap in what happens to them next.
Europe files the patents, publishes the papers, and increasingly starts the companies. The United States raises the growth capital, absorbs the technology into industry, and scales it to global size. Understanding that asymmetry, and where a research organisation like the Lab fits into it, is the subject of this piece.
The 2024 Draghi report on European competitiveness put the matter starkly. Europe is failing to translate innovation into commercialisation, and innovative companies that want to scale up are hindered at every stage by inconsistent and restrictive regulation. The result is a talent and capital drain: many European entrepreneurs prefer to seek financing from US venture capitalists and scale up in the US market.
The scale of the divergence is measurable. Over roughly the last half-century, no EU company above €100 billion has been created from scratch, while all six US companies valued at around one trillion euros were created in that period. On research intensity, between 2014 and 2022 US R&D spending rose to 3.59% of GDP while the EU crept to just 2.11%. Draghi's proposed remedy is enormous: around €800 billion in additional annual investment, equivalent to 4 to 5% of EU GDP.
Nowhere is the pattern clearer than in climate technology, a sector close to the Lab's own work. Europe now creates more climate tech startups than the United States, yet far fewer reach industrial or commercial maturity. The problem is not innovation, it is capital.
The bottleneck sits at a specific stage. At the crucial Series B stage, where companies move from prototype to scale, Europe faces a persistent funding gap. The data is blunt: from 2020 to 2025 the US launched 29 climate funds over $500 million, versus 11 in Europe. The consequence is a quiet export of European breakthroughs to American balance sheets.
The structural reading, echoed across the sector, is that the US maintains leadership through deep capital markets and industrial absorption, while Europe remains the frontier for high-complexity climate tech, sustained by robust policy frameworks and public funding. Europe is the laboratory; America is the factory floor.
The transatlantic frame is often drawn as a race. It is more accurate, and more useful, to see it as a division of strengths. Europe's regulatory leadership has incentivised early adoption of clean technologies, while the US has excelled at scaling innovation rapidly.
Even Draghi's own framing is not adversarial: strengthening EU competitiveness is not at odds with transatlantic cooperation. The European advantage is real, its ability to integrate technologies into complex systems and to build them under demanding standards, and it is precisely the kind of advantage that needs careful documentation to be understood and defended.
The transatlantic gap is usually discussed in terms of capital and regulation. But underneath the capital question sits an evidence question, and that is where an independent research team is useful.
When a European technology crosses into a new market, whether a US one or an emerging one, the decisive unknowns are not technical. They are about how the technology actually performs in a different context: who adopts it, what it changes, whether the value proposition proven in a European pilot survives contact with a different regulatory regime, user base, and infrastructure. That is the socio-technical translation problem, and it is exactly what the Lab studies.
The Lab's contribution to this landscape is threefold. First, independent evidence of real-world impact that a European innovator can carry into a new market or a funding round, the credible, outside proof that a pilot's promise holds. Second, contextual translation: the disciplined study of how a technology proven in one setting behaves in another, which is the difference between a successful expansion and an expensive assumption. Third, the documentation of European strengths that too often go unmeasured, the systems-integration and standards-led advantages that Europe possesses but rarely proves rigorously.
Europe's problem is not that its technology is worse. It is that the journey from invention to scaled adoption is under-evidenced at every step. Filling that evidence gap, honestly and independently, is a small but real part of closing it.
This piece draws on public analysis.
This is an independent insight piece by Transitions Lab. For the Lab's applied work, see What We Do and European Impact Tracking. To discuss a study, see Contact.