Europe risks its “greatest strategic failure” if it continues to funnel vast sums into preserving legacy industries instead of backing high-growth companies, business and policy leaders warned on March 25, urging faster action to turn the region’s economic potential into global competitiveness.

“Allocating hundreds of billions of euros from competitiveness funds to preserve legacy structures rather than build the future could become Europe’s greatest strategic failure,” said Stjepan Orešković, founder of the Future 500 initiative, adding that entrepreneurs, scientists and breakthrough technologies remain the continent’s true engines of growth.

Speakers at a conference in Brussels said Europe’s challenge is not a lack of capital, talent or ideas, but an inability to deploy them at scale, a press release from the Future 500 initiative said. European Commissioner for Financial Services Maria Luís Albuquerque said the bloc suffers from a “lack of scale, not capital”, pointing to efforts to deepen capital markets through a Savings and Investments Union.

Participants highlighted structural barriers holding back growth. Banking and investment leaders said institutional capital, particularly from pension funds, remains underutilised compared with the United States, limiting the ability of companies to scale. Others pointed to fragmented markets, with firms often finding it easier to expand globally than within Europe.

Stock exchange officials noted that many companies still list domestically, while in Central and Eastern Europe businesses are frequently sold rather than taken public, reducing long-term value creation.

Speakers also stressed cultural factors. Harvard Business School’s Carin Knoop cited stronger networks and higher tolerance for risk in the US, while others called for a more ambitious “winning mindset” among European firms.

Geopolitical considerations also featured prominently. European Commissioner for Enlargement Marta Kos said expanding the EU could unlock new markets and talent, while regional executives highlighted Southeast Europe as a key growth engine.

Blaž Brodnjak, CEO of NLB, said the region represents both a growth engine and a strategic opportunity for the European Union. He argued that EU enlargement, if pursued decisively, “could unlock even higher growth trajectories while strengthening economic cohesion, stability, and long-term returns across the Union”.

Despite the challenges, speakers pointed to growing momentum for change. “It is up to all of us to turn potential into execution,” said Jörn Fleck of the Atlantic Council.

Orešković said the next phase of the Future 500 initiative would focus on identifying high-potential companies and building a coalition to support their growth, underscoring a broader message from the event: Europe has the foundations, but must act decisively to compete globally.