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If you’re planning to strike out on your own in 2026 and launch your own venture, regardless of your prior experience, your financial circumstances or just how “brilliant” your business idea might be, you’d be forgiven for thinking twice before taking the plunge.

After all, the statistics are sobering. Nearly half of all new businesses are estimated to fail within the first five years, according to research undertaken by Babson College.

And yet, paradoxically, a growing number of the next generation of young professionals are bravely forging ahead along this precarious path. According to the Global Entrepreneurship Monitor, nearly a quarter of the 18-to-24-year-olds are already entrepreneurs, and 21% intend to start their own business in the next three years.

How can such hopeful innovators secure their best chances of business survival and growth? Aside of preparing themselves for the realities of start-up life by investing in a solid business education, there are other practical decisions to be made in order to ensure a positive outcome.

One of those is location. It’s not just a case of what business to launch, but where to launch it. Europe’s start-up landscape, for example, is buzzing. Across the continent, companies are expanding, creating jobs, attracting investment, and creating growth at a time when many industries are facing significant turbulence.

The 2025 European Scaleup Monitor report, produced annually by the EU Scale-Ups Institute – a partnership of leading business schools including Vlerick Business School, ESSEC, Erasmus University Rotterdam, WHU Otto-Beisheim, ESADE, NOVA, Luiss, and the University of Galway – analysed over 2.1 million businesses based in Europe to understand which geographies might best support an aspiring entrepreneur.

It found that more than 5% of EU companies are now classified as high-growth firms, achieving growth rates of over 20%. This marks a five-year peak, signalling a robust post-Covid rebound.

Yet the boom is far from even. Digging a little deeper into the data reveals some striking contrasts. While some countries are surging ahead, others are lagging behind, highlighting a patchwork of winners and losers across the continent.

Europe’s high-growth hotspots

The Nordic countries – Finland, Denmark, and Sweden – have consistently ranked among the top, demonstrating strong growth across both young and established firms. Their secret appears to be a combination of supportive policies, access to talent, and a culture of innovation that encourages scale-ups to thrive.

There are other European countries making waves too. Ireland, Spain, the Netherlands, Italy, and Portugal have shown impressive momentum, with Ireland and Spain recording the largest increases in what the researcher called ‘scalers’ – firms showing steady annual growth, between 2022 and 2023.

The report has also revealed some surprising results. Eastern Europe is emerging as the continent’s dark horse. The Baltic states, Latvia and Lithuania, along with Slovenia, are fast becoming hubs for younger ventures. These countries are seeing a surge in Gazelle firms, companies younger than 10 years old, suggesting they could produce many of Europe’s next unicorns.

Who is falling behind?

Not every country is riding the wave. Germany, Bulgaria, and Malta recorded declines in their share of scalers compared with 2022, bucking the overall positive trend. While Germany’s contraction was the steepest, Bulgaria and Malta show that not all established economies are keeping pace with Europe’s rapidly scaling start-ups.

While these latest findings show that Europe’s scale-up ecosystem is blossoming, Veroniek Collewaert, Professor of Entrepreneurship at Vlerick Business School, cautions that the growth is far from uniform. The challenge now, she notes, is to spread these successes more evenly.

Services leading the growth charge

Certain sectors are powering the boom. Technology & AI, Communication, Administrative and Support Services dominate high-growth activity, reflecting Europe’s ongoing shift toward a knowledge and service economy.

Meanwhile, Accommodation and Food Services, heavily hit by Covid-19, are staging a remarkable comeback, with year-on-year growth exceeding 12 per cent and surpassing pre-pandemic levels. Analysts see this as proof that sectors once considered fragile can bounce back strongly when conditions improve.

What separates the winners from the losers?

The contrast between countries highlights another important finding for budding entrepreneurs, and also for policymakers keen to boost the start-up potential of their countries, Supportive ecosystems, easy access to capital, and pro-entrepreneurship policies all correlate with faster growth. The Nordic nations, Ireland, and the Netherlands exemplify this, while countries facing regulatory hurdles or structural barriers tend to lag behind. For vulnerable fledgeling ventures, even the smallest snags on the way to growth can spell doom.

Eastern Europe’s rising scaleup activity demonstrates that even smaller economies can punch above their weight if they cultivate young, agile firms. The Baltic states and Slovenia, in particular, are showing that nurturing start-ups early can pay dividends in the long term.

A roadmap for policymakers

For Europe to sustain this growth and turn it into a continent-wide engine of innovation, tailored strategies are crucial. The real challenge is not only to sustain this growth but to ensure it spreads more evenly, Collewaert explains.

That means identifying what works in the high-performing regions, fostering the right conditions for young and established firms alike, and creating a shared roadmap so that Europe can turn isolated successes into lasting economic resilience.

Regions lagging behind can benefit from lessons learned in high-growth hotspots. Invest in infrastructure for start-ups, streamline access to finance, and remove bureaucratic barriers that prevent firms from scaling. Emerging hubs in Eastern Europe also offer clues on fostering a vibrant start-up culture from the ground up.

The findings are a positive signal for Europe’s post-pandemic recovery, but the uneven distribution of success underlines that momentum alone is not enough. Europe’s economic future may depend on whether policymakers, investors, and business leaders can replicate the success of the high-performing regions across the continent.

From the Nordics to the Baltics, the message is clear. The scale-up wave is here, but Europe’s growth story will only be complete if every region has a chance to ride it.

By, Peter Remon

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