Skale Egenkapital

Startups and small-to-medium enterprises (SMEs) are critical drivers of innovation and job creation. Yet their survival and success vary markedly across regions. This analysis examines 2015–2025. It explains why young companies in Europe (with a spotlight on Denmark) often struggle. These challenges are in comparison to those in China and the USA. We focus on key industries – tech, manufacturing, biotech, healthcare, and retail – and compare seven crucial factors. Throughout, we cite statistics, expert commentary, and reliable data to support each point.

Funding Challenges

Despite Europe’s progress, the United States remains dominant in venture funding. Each year, U.S. startups attract 6–8 times more venture capital than EU startups​. Even combining the entire EU and UK, U.S. funding is about 3–4 times higher​. This huge gap means American entrepreneurs generally find it easier to secure big checks, especially for scaling up. In China, venture investment saw a boom in the late 2010s. This growth was fueled by government encouragement. There was also a rush of private capital. Chinese VC funding even briefly rivaled the U.S., accounting for over 30% of global venture dollars at its peak. By the early 2020s, China’s startup funding slowed. Economic headwinds and regulatory crackdowns, like restrictions on tech IPOs, contributed to the slowdown. Still, China’s government actively funds strategic industries (like manufacturing and biotech) via grants and state-backed VC, which cushioned the fall.

Government grants and public funding also play different roles. Europe offers various grants (e.g. EU Horizon programs and national innovation funds), which can be a double-edged sword. They give non-dilutive funding but often come with paperwork and slower processes. The U.S. relies more on private venture capital, though programs like SBIR/STTR grants support tech R&D. Denmark’s government has its own schemes. Examples include Innovation Fund Denmark and the Danish Growth Fund for seed capital. Nonetheless, these are modest next to Silicon Valley’s deep pockets. China’s government is very hands-on. Local governments set up incubator funds and subsidies. This was especially noted from 2015’s “Mass Entrepreneurship” campaign. This meant easy seed funding for Chinese startups in favored sectors, though it sometimes led to overinvestment and bubbles.

Private investment culture is also distinct. Europe until recently had fewer angel investors and venture networks. As a Danish startup magazine pointed out, the domestic angel investor market is not yet big enough in Denmark​. Angels in the U.S. (and increasingly China) often provide critical early-stage money and mentorship. Europe is catching up. London and Berlin are emerging as VC hubs. However, founders still report fundraising is tough. In a 2023 survey, only 20% of European founders found it easier to raise capital. This reflects tight conditions​. By contrast, U.S. founders benefit from a well-oiled funding ecosystem. It ranges from seed accelerators to mega-funds. Chinese entrepreneurs during the 2015–2018 boom saw an abundance of capital. It came from both tech giants and local investors.

Bottom line: European startups (Denmark included) often fail or stagnate due to limited funding relative to their U.S. and Chinese counterparts. Without sufficient capital, they struggle to develop products, hire talent, and survive lean times. Recent improvements in European venture funding are narrowing the gap. However, as the European Investment Bank notes, it’s still not enough. U.S. VC investment remains “six to eight times higher” than in the EU​. This funding disparity particularly affects high-tech and biotech startups. These startups require large R&D investments. Many promising European biotech firms end up relocating or selling to the U.S. to access larger Series A and B rounds​.

Regulatory Barriers

Starting and running a business in Europe also involves more administrative friction. The continent’s regulatory environment is fragmented and sometimes onerous. Nearly 47% of European founders say excessive bureaucracy is the top issue to fix for Europe’s startup ecosystem​. This includes time-consuming processes to register a company. Entrepreneurs must obtain permits. They also need to comply with labor laws and handle tax paperwork in each country. By contrast, Denmark actually stands out with a business-friendly bureaucracy. It consistently ranks among the top in the World Bank’s Ease of Doing Business index. Yet even Danish entrepreneurs, once they scale beyond Denmark’s borders, run into Europe’s patchwork of regulations. For instance, a Danish healthtech startup must navigate different healthcare rules in Germany, France, etc., slowing its expansion and raising compliance costs.

Tax policies are another factor. European countries generally have higher taxes on businesses and employees than the U.S. Denmark, for example, has a 22% corporate tax. It also has high social contributions. Its top personal income tax rates exceed 50%. Such taxes fund a strong welfare state. This is important for society. However, they can squeeze startup cash flows. It becomes expensive to hire or retain talent. The U.S. federal corporate tax was cut to 21% in 2018 (from 35% previously), giving U.S. firms more post-tax profits to reinvest. While many EU countries have corporate tax rates in the 20–25% range (similar to or slightly above the U.S.), the overall tax burden (including VAT, payroll taxes, etc.) is heavier in Europe. This can deter entrepreneurship. A startup in Denmark must offer higher gross salaries. This is necessary to give employees competitive take-home pay. It is hard for a cash-strapped venture.

Moreover, labor regulations in Europe are relatively strict. Employee protections lead to difficulty in firing and require mandated benefits. Strong unions mean European startups face higher fixed costs. They have less flexibility to pivot or downsize during tough times. In manufacturing, for example, a small German or Danish factory startup has to comply with strict workplace regulations. It cannot easily adjust labor during downturns. An American manufacturer in a lighter-regulated state might scale down and up more freely. China historically had very lax enforcement of labor rules. Environmental regulations were also lax during its rapid-growth phase. This allowed manufacturing SMEs to thrive on low costs. However, this has been tightening recently.

In China, regulatory barriers are a double-edged sword. On one hand, the government often shielded domestic startups from foreign competition (e.g. blocking global tech giants), which allowed local tech companies to flourish. On the other hand, Chinese entrepreneurs face unpredictable policy shifts. The early 2020s saw a sudden crackdown on sectors from fintech to online education. Entire business models were outlawed overnight. As a result, startups in those fields failed abruptly. Anecdotally, Chinese small businesses cite increasing bureaucratic oversight. A Reddit discussion noted that stricter regulations pushed out small vendors around 2019​. The U.S. regulatory climate is comparatively stable and market-driven. Still, sector-specific rules can still pose hurdles. FDA approvals in healthcare or SEC compliance for fintech are examples of this. Nonetheless, the general perception is that red tape is “overwhelming” in Europe​ compared to the U.S., contributing to slower decision cycles and discouraging would-be entrepreneurs.

In summary, many European startups suffocate under regulatory weight: lengthy licensing, complex compliance, and less flexibility. Denmark mitigates some of this with efficient governance. It is easier to open a business in Copenhagen than in Rome or Paris. Still, even Danish SMEs must follow EU-wide regulations. Such regulations include GDPR privacy rules or product standards that add costs. The USA’s lighter-touch regulation and China’s initially permissive but state-directed approach both enabled faster startup growth. Europe is making efforts to cut red tape (the EU’s single digital market, startup visas, etc.), but as of 2015–2025, bureaucracy and legal barriers stay a top reason many European ventures falter early​.

Market Competition

A startup in California can immediately access a continental-sized market. It also has access to investors across 50 states. In contrast, a Danish startup struggle to raise money outside Scandinavia. It sell beyond Denmark only much later.

Market size and competition have stark contrasts:

• Tech Industry
  U.S. startups benefit from being in the world’s largest unified tech market with a culture of early adoption. American consumers readily try new apps and gadgets, giving local startups a chance to gain millions of users quickly. With its massive population, China’s tech market eagerly adopts new digital services. From e-commerce to mobile payments. Spawning multiple tech unicorns each year. Chinese tech startups also enjoyed protection from U.S. competitors (Google, Facebook, Amazon were absent), allowing homegrown giants like Alibaba, Tencent, and ByteDance to dominate. Europe, by contrast, had no such shield; American Big Tech expanded into Europe long ago. This means a European consumer internet startup faces fierce competition from entrenched U.S.
• Manufacturing
  In manufacturing and hardware, China’s competitive edge (low costs, massive scale, integrated supply chains) has been a startup-killer for Western SMEs. A small manufacturing firm in Denmark or the U.S. might find it nearly impossible to compete on price and volume with Chinese producers. Over the past decade, many European manufacturing SMEs either offshored production, moved up to niche high-quality segments, or perished under pressure from cheaper Chinese imports. The global market reach of Chinese industry is enormous – China became known as the “world’s factory”, and domestic startups there can thrive on huge local demand for manufactured goods plus export opportunities. U.S. manufacturing startups at least have a large domestic market and the benefit of advanced technology integration (e.g., automation, 3D printing) to carve out niches. European manufacturers operate in a relatively high-cost environment and often a smaller home market (Denmark’s population is only ~5.8 million), making it hard to achieve economies of scale. Unless they innovate in specialized fields (e.g., Denmark excels in wind turbines and green technology), many European manufacturing SMEs struggle, which contributes to higher failure rates.
• Biotech and Healthcare
  Europe is strong in scientific research, but commercialization lags. A McKinsey study highlighted that “Europe is a powerhouse in scientific publishing… roughly twice the output of the United States and three times that of China… Yet translation into companies is stagnant… Europe accounts for only 25% of new biotechs”​. In practical terms, a biotech startup spun out of a European university often can’t find the same level of venture funding or partnerships as in Boston or San Francisco. The U.S. has a massive healthcare market with relatively higher prices for drugs and devices, which attracts biotech investors and makes it easier for startups to monetize innovations. China, meanwhile, poured money into biotech in the 2015–2025 period as part of its strategy to become self-sufficient in pharmaceuticals. Chinese biotech startups enjoy not only a large patient pool for clinical trials but also strong state backing. European health startups face regulatory complexity (approvals from the European Medicines Agency and each country’s health system) and pricing pressures in predominantly single-payer systems. These factors often slow growth. Many promising European healthtech/biotech companies end up relocating to the U.S. or partnering with U.S. firms to survive. In Denmark, for instance, there is a renowned pharma sector (e.g. Novo Nordisk), but those are established players; biotech startups still find scaling up in Europe tough without tapping into U.S. markets or Chinese manufacturing.
• Retail
  Consumer behaviour and competition in retail also differ. Chinese consumers in the 2015–2025 decade were extremely quick to embrace e-commerce and mobile payments – by 2020, over 85% of internet users in China used mobile pay apps​, creating fertile ground for online retail startups. Companies like Pinduoduo (founded 2015) grew at breakneck pace by reaching hundreds of millions of shoppers in China’s single national market. U.S. retail startups similarly have access to a unified market of 330 million and high average spending, though they contend with giants like Amazon and Walmart. Europe’s retail market is split by country; consumer preferences in, say, Italy versus Sweden can differ widely, and languages/localisation are needed. A Danish e-commerce startup can dominate in Denmark only to hit a wall expanding abroad due to localized competition and the presence of Amazon (which entered many European markets). Moreover, European consumers historically have been a bit more conservative in trying new services (though this is changing with younger generations). The COVID-19 pandemic in 2020 did push more Europeans online, which helped some retail startups, but it also intensified competition from global players. By 2025, many European retail startups that failed cite inability to reach scale and being undercut by larger international competitors.

In summary, market dynamics often favor U.S. and Chinese startups:

• Scale: The U.S. and China each provide a huge domestic sandbox to grow, whereas European startups must patch together multiple markets to equal that scale.
• Competition: European ventures face global competitors early, while Chinese and American firms often grow big before facing serious foreign competition (given language and regulatory barriers).
• Consumer base: China’s rapid adoption of new tech and the U.S.’s high disposable incomes give startups fertile ground, whereas Europe’s diversity means slower, uneven adoption curves.

These differences mean European and Danish startups can fail. Their failure is not purely due to their product. It is because the market conditions make scaling so much harder. Many remain small or exit early, unable to achieve the critical mass that U.S./China startups reach, which is crucial for long-term survival in sectors like tech, biotech, and retail.

Cultural Influences

Entrepreneurial culture and societal attitudes play a big role in startup success. One stark difference has been the mindset toward risk and failure. In the U.S., entrepreneurship is often celebrated. Silicon Valley folklore glorifies the “garage startup.” Even failures are seen as valuable experience. In China, the stories of rags-to-riches tech founders, such as Jack Ma of Alibaba, inspired many entrepreneurs. This wave occurred in the 2010s. Europe, and in particular Denmark, traditionally have more risk-averse cultures regarding business ventures. Many Europeans prefer stable careers in established companies. They also prefer careers in the public sector. Historically, there’s been a stigma around business failure.

Surveys by the Global Entrepreneurship Monitor (GEM) illustrate these cultural differences. The table below compares some entrepreneurial activity and attitude metrics:

Indicator  (mid-2010s & 2023)	Denmark	Europe  (varies)	USA	China
Early-Stage Entrepreneurship Rate (TEA) – % of adults starting or running a new business	5.6%​  (low)	~5–10% (e.g. UK 10.7%, France 5.3%)​	13.8%​	15.5%​
“Fear of Failure” Rate – % who see good opportunities but would not start due to fear	(n/a) ~45% (est.)	~50–58% (UK ~55%)​	45%​	64.5%​
Five-Year Startup Survival Rate – % of new firms surviving 5 years	< 50%​	< 50% (EU average ~45%)​	~50%​	~50% (est.)

Table: Entrepreneurial activity and attitudes. 

Denmark and many European countries have significantly lower startup participation rates than the U.S. or China. In 2014, only 5.6% of Danes were engaged in early-stage entrepreneurship, vs 13.8% in the U.S. and 15.5% in China​. This gap suggests fewer people in Europe take the plunge to start a business. One reason is cultural: Europeans often have a stronger fear of failure. By 2023, nearly 55% of adults in the UK (and similarly in Canada) reported fear of business failure. This fear would prevent them from starting up. The U.S. rate was 45%​. Intriguingly, China’s fear-of-failure rate is even higher at 64.5%​, reflecting perhaps the high personal stakes and societal pressure (failure can mean “losing face”). China still has a high startup rate. Despite fear, entrepreneurial drive pushed many to try anyway in the booming 2010s. Necessity also contributed to this high startup rate.

Denmark specifically is often cited as a country where people enjoy a comfortable lifestyle and secure jobs. This comfort can make the leap into risky entrepreneurship less appealing. The society provides a strong safety net (free education, healthcare, unemployment benefits). This safety net can cut both ways. On one hand, it can encourage risk-taking because you won’t starve if your startup fails. On the other hand, the overall satisfaction with life reduces the hunger to pursue uncertain ventures. A commentary in The Startup Magazine bluntly stated that Denmark lacks a big startup win. Denmark needs a startup to inspire its culture. This is necessary to put the country on the entrepreneurial map. Such a startup would succeed big time. It would also spark a passion for entrepreneurship in Denmark. This highlights the importance of role models and success stories. In the U.S., stories of Steve Jobs, Elon Musk, etc. motivate countless founders. China had its own idols. Europe has a few (Spotify from Sweden, Adyen in the Netherlands, etc.), but far fewer globally recognized startup success stories, and this dampens the younger generation’s perception of entrepreneurship as a viable path.

Another cultural factor is the education system and career path mindset. In Europe (and Denmark), education has traditionally funneled talent into established professions. Top graduates often become doctors, lawyers, engineers at big firms, or civil servants. In the U.S, especially in the last decade, many top graduates from schools like Stanford or MIT choose to join startups. Others decide to start their own companies. The prestige of joining a high-growth startup is high. Europe is catching up. Berlin, Stockholm, and other cities now have vibrant startup scenes. In these places, joining a startup is “cool” for graduates. However, this shift only really accelerated in the late 2010s.

Innovation culture also differs. The U.S. has a high tolerance for disruptive ideas. It embraces aggressive growth tactics like “move fast and break things.” These approaches can give startups an edge in rapidly evolving industries like tech. European business culture tends to be more cautious and perfectionist. This mindset sometimes results in founders aiming for a perfect product before scaling. These efforts can lead to missed market windows or running out of cash. In healthcare and biotech, European scientists have world-class ideas. However, the culture and incentives to spin those ideas into startups are weaker than in the U.S. (as the McKinsey quote noted, Europe’s challenge is translating science into companies​). This is partly cultural (academia-industry collaboration in the U.S. is more fluid) and partly systemic (reward structures and funding).

Finally, societal attitudes towards entrepreneurs differ. In surveys, Europeans historically gave entrepreneurs less esteem than Americans do. However, by 2025 there are signs of change. A new generation of European entrepreneurs is emerging. They are emboldened by some recent successes and the infusion of international investors. As one European founder noted, the brightest minds are increasingly choosing not to pursue careers in large corporations. Instead, they are becoming entrepreneurs. Scandinavia, including Denmark, has seen a startup wave in tech (fintech, gaming, sustainability) in recent years, slowly shifting cultural norms. Still, overcoming the ingrained caution and stigma remains a work in progress. Cultural influence underpins many other factors. For instance, the fear of failure can deter someone from even starting. This results in fewer startups to begin with. A risk-averse approach can limit those that do start from taking bold steps needed to compete globally. This ultimately leads to higher failure or stagnation rates in Europe versus the U.S. or China.

Economic Environments

The broader economic climate – growth trends, stability, inflation, and business cycle – directly affects startup survival. From 2015 to 2025, the U.S. and China enjoyed generally stronger economic growth than Europe, which created a more favorable backdrop for new businesses.

GDP Growth: China’s economy grew rapidly (though decelerating) over the decade. Between 2015 and 2019, China’s GDP expansion averaged about 6–7% annually, far outpacing the EU’s ~2% and the USA’s ~2.5% in the same period. This high growth in China meant expanding domestic demand. It resulted in many emerging market niches for startups to fill. Essentially, a rising tide lifted new boats. Europe’s slower growth, on the other hand, meant a more saturated market with cutthroat competition for stagnant consumer spending. Denmark’s economy grew modestly (roughly in line with the EU average, with some years stronger around 2-3% growth). Moreover, Europe faced economic disruptions. First was the tail of the Eurozone debt crisis in the mid-2010s. Next was Brexit uncertainty after 2016 affecting UK and EU trade. Later, the COVID-19 pandemic impacted the economy in 2020. The U.S. economy was relatively robust until the pandemic. By 2019, there was record-low unemployment and strong stock markets. These conditions provided fertile ground for startups to get customers and for SMEs to prosper.

A concrete indicator of economic vitality is productivity growth – a driver of long-term prosperity. Here, Europe lagged badly. Since 2015, EU productivity grew only ~0.7% per year, less than half the U.S. rate and just one-ninth of China’s explosive productivity gains over the same period​. Lower productivity and economic dynamism in Europe mean it’s harder for new firms to “break in” and outperform incumbents. The U.S. and China simply created more new opportunities as their economies evolved. In contrast, Europe’s structural growth issues (aging demographics, conservative industries) led to fewer growth niches. Mario Draghi, the former ECB President, warned about this in a report in 2023. He emphasized that Europe needs to overhaul its economic model. Innovation financing is crucial too. Otherwise, Europe risks becoming irrelevant between the U.S. and China.

Inflation and stability: For much of the 2015–2019 period, inflation was low globally, which helped startups by keeping costs predictable. In 2020–2021, the pandemic caused a brief recession followed by a surge of inflation in 2022. This affected all regions: Europe saw energy prices spike, the U.S. had its highest inflation in 40 years, and even China dealt with supply chain disruptions. Startups, which often operate on thin margins, suffered from rising input costs. However, massive stimulus in the U.S. during 2020–2021 actually led to a venture capital bonanza – U.S. tech startups had record funding in 2021 amid the economic rebound. Europe also saw a VC spike in 2021. By 2022–2023, concerns about slower growth emerged. The war in Ukraine affected energy prices. These factors made the European investment climate more cautious than the U.S. In China, economic stability started to waver by the early 2020s. Growth slowed, and real estate troubles arose. These issues led to tighter funding for private businesses.

Business climate: Beyond raw GDP numbers, several factors shape the environment. These include the ease of doing business, corruption levels, infrastructure, and financial system health. Denmark and many Northern European countries excel in factors like low corruption. They have excellent infrastructure (broadband, transport) and efficient public services. These are all positives for SMEs. Europe at large has modern infrastructure and a highly educated workforce, advantages that should help startups. Yet, the business climate in the U.S. is often considered more entrepreneurial: access to large capital markets (NYSE, Nasdaq for exits), a culture of corporate partnerships (big companies acquiring or partnering with startups), and a regulatory environment that encourages investment (e.g., favorable stock option treatment for startup employees, which Europe only recently started to emulate). China’s environment is unique. The government is heavily involved. If you’re in a favored industry, like electric vehicles or AI, you get tremendous support. You may receive state contracts, grants, and even be shielded from foreign competition. However if you’re in a disfavored one, the rug can be pulled from under you. Despite that, China made massive investments in infrastructure, such as high-speed rail and smart cities. It climbed in global business climate rankings. By 2020, China was ranked 31st in Ease of Doing Business. This was a significant improvement from the 90s a decade before. These changes reflect reforms in starting a business and getting credit.

Another aspect of economic environment is access to finance for SMEs outside of venture capital. In Europe, banks traditionally play a big role in SME financing (loans). However, after the 2008 crisis, bank lending became stricter. The European Investment Bank and others discovered a significant finding. European scale-ups raise about 50% less capital in their first 10 years than U.S. peers. This occurs partly due to shallower capital markets​. The U.S. has a more developed ecosystem of private equity, venture debt, and stock markets that funnel money to growing firms. China’s banks often favor state-owned firms. This makes it hard for private SMEs to get loans. However, during the boom years, the government directed plenty of funds to startups via state banks and funds. Denmark’s SMEs benefit from a stable banking system and initiatives like state-backed loan guarantees. The market’s small size again limits how much capital can circulate.

In sum, Europe’s macroeconomic environment has been less conducive to explosive startup growth. Lower growth and productivity, combined with conservative financial systems, mean European startups face an uphill battle to grow revenues. Many European SMEs that fail cite “lack of market demand” as a reason. This is not necessarily because European consumers don’t need innovation. The market simply isn’t growing fast enough. It is also too fragmented to sustain all the new entrants. By contrast, the U.S. and China offered growing pies in 2015–2025, so even small slices could be substantial. Europe’s economy is stable and wealthy, but that stability can sometimes mean stagnation, whereas the more dynamic (if volatile) U.S. and Chinese economies produced more high-growth opportunities for startups to seize.

Infrastructure and Support

The support ecosystem – incubators, accelerators, mentorship networks, and public-private partnerships – greatly influences startup outcomes. During 2015–2025, the sheer maturity and density of startup support in the U.S. (and parts of China) gave their startups a leg up over many European and Danish startups.

Incubators and accelerators: The past decade saw a proliferation of incubators worldwide, but the U.S. led the way with famous programs like Y Combinator, Techstars, 500 Startups, etc. These programs provided seed funding. They also offered mentorship and investor connections. These resources dramatically increase a startup’s odds of success. Europe also expanded its incubator scene. Cities like London, Berlin, and Paris now host dozens of accelerators. Some are independently run, some corporate-sponsored, and some government-backed. However, European incubators often lack the scale and alumni networks of U.S. ones. For instance, a startup graduating from Y Combinator in Silicon Valley gains instant credibility. It gains access to a global investor pool. A startup from a small Nordic accelerator might not. Denmark has a number of innovation hubs (e.g., Copenhagen Bio Science Park for life sciences, the DTU Science Park for deep tech, etc.), and the government encourages university incubators. These have yielded some successes, but many Danish founders still seek international programs for broader exposure.

In China, the government aggressively promoted incubators as part of its entrepreneurship drive. By late 2010s, China reportedly had thousands of incubators and “makerspaces” across the country. These spaces often received government subsidies, including free office space and cash stipends, for startups. This created an initial startup boom. The downside was some incubators were of low quality or became empty facilities when the startup fad cooled. Nonetheless, Chinese entrepreneurs in tech hubs like Beijing, Shenzhen, and Shanghai could tap into a growing ecosystem of mentors (often returnees from Silicon Valley) and local accelerator programs (some even run in partnership with U.S. entities).

Mentorship and networks: Successful entrepreneurship breeds a virtuous cycle of mentorship and angel investing. In the U.S., generations of tech entrepreneurs have “paid it forward” by mentoring new founders and investing in them. By the mid-2020s, Europe finally began to see this effect as well. The State of European Tech report noted that “founders are reinvesting their know-how and capital in Europe after exiting their businesses.” Tech employees are going on to grow their own $B+ businesses, creating a new generation of experienced mentors​. However, this phenomenon is still more concentrated in the U.S. and China. Silicon Valley’s tight cluster of experts (engineers, lawyers, marketers familiar with scaling startups) is hard to replicate. China has analogous clusters (Zhongguancun in Beijing, or the Shenzhen tech scene) where information and talent flow quickly between companies. In contrast, Europe’s talent is spread across multiple cities. If a Danish startup needs an expert in scaling enterprise software sales, there might be only a handful of people in Denmark with that experience. In the Bay Area, such experts are abundant. This infrastructure of human capital and knowledge is a subtle but powerful factor in survival. Many startups often fail due to a lack of guidance and skill gaps. Strong ecosystems help fill these gaps.

Public-private partnerships: European governments, including Denmark’s, have actively tried to support startups via partnerships and funding schemes. The EU launched initiatives like the European Innovation Council (EIC) Fund and various accelerator programs to invest in high-potential startups. Denmark’s government and municipalities host startup events, provide match-funding to VC, and facilitate connections to industry (e.g., cleantech startups working with Denmark’s wind energy firms). These supports are valuable, especially in sectors like manufacturing and biotech where initial costs are high. For example, biotech startups in Denmark often collaborate with public research hospitals and get grants for early-stage research. However, critics argue that Europe’s support can be excessively bureaucratic. Public grants may favor “safe” projects. Government-run incubators might lack the entrepreneurial urgency of private ones.

The USA’s support system is more laissez-faire but extremely effective through the private sector. Elite universities in the U.S. have tech transfer offices that actively spin out startups (Stanford, MIT, etc.), often funded by alumni VC networks. Corporations in the U.S. also run accelerators (for instance, pharma companies incubating health startups, or retail giants partnering with logistics startups), which give young companies crucial validation and resources. Europe has begun to emulate this; corporate venture capital in Europe has grown, and companies like Bosch, Siemens, or Novo Nordisk have venture arms or incubators. Still, European startups report less ease in forging corporate partnerships, partly due to conservative corporate cultures that are slower to adopt startup solutions. This can hamper pilots and first big client deals for B2B startups, causing some to fail before ever landing a major customer.

In China, public-private lines are blurred. The government itself became a customer or sponsor for many startups (e.g., smart city tech, surveillance tech, healthcare IT) – if you aligned with government priorities, you could get pilot projects quickly. Additionally, China’s tech giants (Alibaba, Tencent, Baidu) act as ecosystem builders, investing in hundreds of startups and providing them with platforms (cloud computing, distribution channels on super-apps) that serve as infrastructure. This means a Chinese retail startup could plug into Alibaba’s e-commerce platform and instantly reach millions, something a European retail startup could only dream of without Amazon’s support (and Amazon is more competitor than partner). In the U.S., Amazon or Microsoft do have programs to support startups (like AWS credits, etc.), but they are more arm’s-length than the highly integrated China model.

Infrastructure quality (broadband, logistics, etc.) is generally excellent in all regions, though China’s rapid urban infrastructure development gave it an edge in some areas (for example, efficient delivery networks in cities which enabled e-commerce startups to offer 1-day shipping nationwide). Denmark and Europe have top-notch infrastructure too, so that’s not a failure reason per se; however, differences in infrastructure can appear in specific industries. For example, launching a new biotech product might be easier in the U.S. where there is a single FDA regulatory pathway and a network of private clinics for trials, versus Europe’s multi-country clinical trial requirements and predominantly public healthcare systems that are slower to adopt new tech.

Overall, the support ecosystem for startups in Europe and Denmark, while improving, was less developed than in the U.S. and patchier than China’s in this period. An illustration of this gap: 80% of European scale-up funding rounds involve at least one foreign (often U.S.) investor leading the round, indicating local ecosystems alone weren’t sufficient​. European founders frequently had to go abroad for later-stage support. Many Danish startups, for instance, would join an accelerator in London or San Francisco to gain that extra edge. The lack of a dense, unified ecosystem is a key reason European startups might not survive the “valley of death” stage (the challenging early growth period) – they simply don’t have as many lifelines in their immediate environment. The U.S. and China environments, in different ways, provided more of those lifelines through robust networks, leading to comparatively higher numbers of startups graduating from small to medium to large. Europe is catching up by knitting together its fragmented hubs and increasing public support, but the decade in question still saw infrastructure and support gaps contributing to higher failure rates in Europe and Denmark.

Survival and Success Rates

Globally, it’s often cited that around 90% of startups eventually fail (i.e. only ~10% achieve long-term success)​. A GEM analysis notes that 30% of new businesses fail in the first two years, 50% don’t survive beyond five years, and only about one-third make it to ten years​. These baseline numbers hold roughly true in Europe, the U.S., and China, but the reasons behind failures differ and so do the outcomes for the successful minority.

• First-year survival is actually fairly high everywhere. In Europe, about 81% of startups survive their first year​, and the pattern is similar in the U.S. (around 80% one-year survival). Denmark aligns with this, as do China’s official stats (China’s three-year survival was ~75%, implying first-year in the 85–90% range​). This shows that the very initial phase (getting started) is not the biggest difference. But beyond year one, divergence begins.
• Five-year survival averages under 50% in most places, but Europe has more extreme variance. The EU-wide five-year survival rate is ~45% (for firms born in 2013, 45% were still active in 2018)​. Some European countries do better – Sweden had about 60.8% five-year survival for that cohort (highest in EU)​– whereas others do worse (Lithuania only 26% survived five years​). Denmark’s five-year rate was just under 50%​. The U.S. five-year survival is in the same ballpark (~50% on average)​. China doesn’t regularly publish five-year rates, but anecdotal data suggests it’s also around 50% for legitimate operating businesses. Thus, numerically, a startup’s chance of making it five years is similarly coin-flip-like in all regions.
• Beyond five years, survival differences might widen. In the U.S., about 35% of companies last ten years​. In Europe, it could be slightly lower on average, given the five-year drop-off and lower growth to buoy them, but detailed 10-year data in Europe is scarce. For China, the rapid changes in economy mean many startups either grow huge or disappear within a decade – the middle ground is smaller.

More illuminating than survival percentages are the success outcomes. The U.S. and China have produced far more “big winners” relative to Europe in 2015–2025:

• The U.S. leads by far in unicorn startups (valuations > $1B), with over 50% of the world’s ~1,200+ unicorns. One report counted about 1,500 U.S. unicorns vs ~350 in China by 2023 (Europe had on the order of 100–200, depending on definition). This indicates that while European startups might survive, they often don’t scale to the same degree. Many European SMEs remain small or medium – which is fine, but from an ecosystem perspective, fewer breakout successes can mean fewer reinvestment and inspiration for the next generation.
• Exit strategies differ. A successful U.S. startup often goes public (IPO) or is acquired at a high valuation, returning capital to investors. Europe has seen fewer tech IPOs; successful startups often get acquired by larger foreign companies. For example, several notable Danish startups were acquired by U.S. firms in this period, effectively “cashing out” but no longer growing as independent European companies. China had a flurry of IPOs (many in the U.S. markets or Hong Kong) for its startups until regulatory changes around 2021 curtailed some overseas listings. A Chinese startup’s dream path was often to dominate domestically and IPO, minting billionaires – something that inspired many to try, even if most failed.
• Reasons for failure also show patterns. According to various analyses (e.g., by CB Insights and Startup Genome), the top reasons startups fail include lack of market need, running out of cash, not the right team, and getting outcompeted. In Europe, “running out of cash” is especially pointed given the funding challenges discussed; 34% of failed startups cite running out of funding as a primary cause​. In the U.S., competition and scaling issues might feature more (since funding is more available, the bottleneck is often capturing the market fast enough). In China, some unique reasons emerged, like regulatory shutdown or being copied by a bigger rival (the tech giants in China were notorious for cloning features of startups and outcompeting them). For SMEs in traditional sectors, European businesses sometimes fail due to high costs and inability to compete globally (tying back to economic environment), whereas Chinese SMEs might fail due to thin margins and economic shifts, and U.S. SMEs due to market saturation or lack of operational expertise.

Key success factors thus varied:

• In the USA: access to capital, a huge market, and a culture of bold expansion helped startups with a solid product-market fit. These startups could snowball quickly. Think of how Uber, founded in 2009, grew nationwide by the mid-2010s. Successful U.S. startups often credited the ability to iterate quickly, attract top talent with stock options, and pivot without stigma if needed.
• In China: hypergrowth was the name of the game. Startups that succeeded often leveraged the massive user base. TikTok (ByteDance) is an example. It conquered China’s market, then expanded to the global market within a few years. Government policy could anoint winners (like new energy vehicle startups benefiting from subsidies). Being in the right sector at the right time (and having connections to navigate regulations) was crucial. Many Chinese startups that survived did so by aligning closely with government development plans or partnering with big tech platforms.
• In Europe/Denmark: those that thrived often did so by carving out specialized niches or by tapping international markets early. For example, Sweden’s Spotify went global to achieve scale, knowing Europe alone wasn’t enough to beat Apple or others. Denmark’s fintech startup Tradeshift relocated its headquarters to Silicon Valley to access U.S. clients and funding, which helped it become a unicorn. Survivors in Europe often needed to be more internationally minded from the start. They had to be more patient in growth. Additionally, they had to be adept at securing any available support (grants, partnerships). European startups that succeeded also often benefited from the region’s strengths. These include high-quality engineering, strong design, and scientific excellence. These strengths helped them create a superior product that could compete on global quality, not price

Nonetheless, the data and trends from 2015–2025 indicate that Europe (and Denmark) produced fewer startups. They raised less money and saw fewer global successes compared to the U.S. and China. The reasons are multifaceted – from funding to culture to market size – as we’ve explored. Many European startups that failed were not necessarily less innovative, but they were swimming upstream against these structural challenges. Meanwhile, U.S. startups benefited from huge markets. Chinese startups had abundant capital. The go-big-or-go-home ethos helped propel more of them to survive and thrive.

Conclusion

From 2015 to 2025, the playing field for startups and SMEs in Europe (and Denmark) versus those in the U.S. and China has been uneven. European entrepreneurs face fragmented markets. They work under stricter regulations and with scarcer capital. Often, they deal with a more cautious culture. Together, these factors contribute to higher hurdles and higher attrition for new businesses. Denmark exemplifies this dynamic. The country has a stable economy and supportive government. Despite this, Danish startups often struggle to scale beyond the small home market. They also find it difficult to attract major investment. These challenges can lead to early failures or exits. In contrast, American and Chinese startups benefit from vast internal markets. They have aggressive funding ecosystems. Their cultures celebrate entrepreneurial risk. These advantages enable more of them to reach critical mass.

The failure of a startup is rarely due to a single factor. It’s usually a combination: a European biotech startup runs out of cash (funding issue). This happens before its product finds market fit (market size issue). The founders, facing social stigma (cultural issue), do not attempt a pivot (mindset issue). Meanwhile, an equivalent U.S. startup secures a new investor in the nick of time. The startup can pivot freely. It can get acquired by a tech giant. This results in at least returning capital.

Statistics underscore the story – roughly half of startups everywhere don’t survive five years. However, the proportion that break out into major success is far higher in the U.S. and China. Europe is improving its game. It has record funding in recent years and some policy reforms. Yet as of 2025, it still punches below its weight in the startup arena. As Agathe Demarais noted in Foreign Policy, Europe must change its approach to financing innovation. This change is necessary to avoid being squeezed out between the U.S. and China​. Encouragingly, Europe’s tech ecosystem today is much stronger than a decade ago. Early-stage startups have quadrupled in number​. Success is breeding success. Experienced founders are reinvesting in new companies​. Denmark is nurturing a new crop of startups. These startups are in sectors like fintech, clean energy, and biotech. This could put Denmark on the entrepreneurial map.

To reduce failure rates further, Europe and Denmark are addressing the existing gaps. They are increasing venture funding, often via public funds. They also streamline regulations. They continue to push to cut red tape. Their goal is to complete the EU single market for services. Additionally, they are fostering a more risk-tolerant culture, celebrating role models, and destigmatising failure. Moreover, they are building strong support networks, including incubators, mentorship, and pan-European investor syndicates. These efforts aim to level the playing field with the U.S.’s dynamic capitalism and China’s state-fueled entrepreneurship. The 2015–2025 period has made the challenges clear. If lessons are learned, the next decade could see more European and Danish startups not only survive but thrive. They could do so on the world stage, narrowing the transatlantic and transpacific entrepreneurship gap.

Sources

• European Commission & Eurostat reports on business dynamics and SME performance​
• State of European Tech 2023 (Atomico) – data on funding growth and founder surveys​
• European Investment Bank, The Scale-Up Gap (2024) – comparative venture capital analysis
• Global Entrepreneurship Monitor (GEM) Global Reports – entrepreneurship rates and attitudes​
• Foreign Policy (Sept 2024), Agathe Demarais – “Why Europe Is Losing the Tech Race”​
• Startup Genome & CB Insights research – global startup failure statistics​
• The Startup Magazine – “Why Denmark fails to produce more entrepreneurs” (2015)​
• M. Mangold, Comparing Startup Ecosystems: US vs Europe (2022) – citing StartupBlink and McKinsey on biotech​
• Visual Capitalist (BLS data) – U.S. business survival by industry​
• GEM “Rethinking fear of failure” (2023) – fear of failure stats in various countries​
• SEK AI Reserch Lab, The logic behind creating a company (2025)