The European Investment Bank’s report makes important findings on the financial strategies needed to maintain technology leadership in the region and maintain global competition in key sectors such as artificial intelligence (AI) and other emerging technologies. This report states that the EU’s current financial market structure creates major obstacles for innovative companies and that removing these obstacles is critical.

The report, published on July 24, emphasizes the necessity of removing investment barriers in order to direct savings to important areas in the European market. This report, titled “Growth Gap: Financial Market Constraints Preventing Innovative Companies in the European Union”, reveals the importance of investing more in companies at the scaling stage in order for the EU to maintain its technological superiority and compete globally.

The report highlights that this funding gap is key to spurring technological progress in critical areas such as green technology, artificial intelligence (AI) and quantum computing.

The EIB also expressed its concerns on this issue in the report titled “Artificial Intelligence, Blockchain and the Future of Europe” published in June 2021. Since then, the EU became one of the first regions to introduce comprehensive regulations for the AI ​​sector and began actively enforcing crypto and blockchain-related laws. However, another report published by the European Court of Auditors in May 2024 stated that the EU must accelerate on emerging technologies such as artificial intelligence to compete with global leaders.

The EIB’s report states that the limited size and depth of EU capital markets pose major challenges for innovative companies, especially during periods when finance is scarce during the scaling phase. It is stated that this scarcity hinders companies’ capital accumulation, growth, productivity and employment creation capacity.

EIB states that Europe’s capital markets, especially the venture capital market, need to be deepened and refers to the successful history of the EIB Group in this regard. The Group’s successful experience in supporting innovative companies and scaling key technologies supports the strategies needed to overcome these financial barriers.

EIB President Nadia Calviño said: “We are particularly ready to do more to pave the way for a true capital markets union. “This is a key priority to support sustainable growth and job creation.”

It was emphasized that venture capital investments in Europe are significantly lower than in the USA, causing European companies to experience slower capital accumulation compared to their competitors in Silicon Valley. It is stated that European scaling companies are often dependent on foreign investors. It is stated that in most investment rounds, the main investors come from outside the EU, and this causes local companies to be acquired by foreign companies or listed abroad.

In conclusion, the EIB’s report suggests that fundamental reforms in financial markets are needed to increase Europe’s technological competitiveness and that these reforms will support the growth of innovative companies. These strategic steps are vital for Europe to maintain its place in the global technology arena.