The ability of innovative start-ups to scale is a key driver of long-term productivity and economic growth. Scaling is a cumulative, multi-dimensional process. Regulation, finance, market access, talent and ecosystem conditions interact over time and shape both the likelihood and speed of scaling. Effective policy action requires alignment between entrepreneurial, innovation, industrial and competition policies, rather than isolated interventions.
The EU scale-up gap appears to be more about commercialisation than invention. EU scale-ups patent less frequently than US peers, but patenting firms show comparable or higher invention intensity. They also patent earlier yet take around 1.5 years longer to reach scale after their first filing. These patterns are consistent with frictions in the ability to translate formalised innovation into commercial scale rather than a deficit in inventive capacity.
Financing frictions concentrate at late stages, not at early stages. Early-stage funding is broadly comparable across the EU and the US. Divergence emerges in late-stage capital, where a small number of US firms mobilise exceptionally large rounds.
Talent, managerial depth and acquisitions shape who scales and how fast. Serial founders, advanced education, early arrival of external CFOs, and strategic acquisitions are systematically associated with higher scaling probabilities and faster transitions to scale.
First scaling events are associated with stronger local entrepreneurial activity, but spillovers are not automatic. Successful scale-ups seem to spur local entrepreneurial activity, for example, by acting as role models for future founders and managers, attracting specialised suppliers and investors, and signalling the viability of local opportunities to external actors. Importantly, the ecosystem spillovers from scaling events are not automatic, and vary by the type of scaling firm and by context.
What it takes for start‑ups to scale up
Only a small fraction of innovative start-ups achieve sustained high growth, yet these firms drive disproportionate economic gains. Young innovative companies account for an outsized share of job creation and, in some geographies, the lion's share of business R&D expenditure (Decker et al., 2014[1]). Beyond their direct contribution, firms that successfully scale generate powerful spillover effects on the entrepreneurial ecosystems around them, amplifying the economic returns of individual success.
Despite growing attention, firm-level evidence on the mechanisms underlying successful scaling remains limited. Existing studies tend to focus on individual mechanisms – finance, innovation, or talent – without integrating these factors within a unified framework, distinguishing between different stages of scaling, or examining how constraints differ across locations. Yet these distinctions matter for policy: different constraints may bind at different points along the scaling journey. For example, factors that support early growth are not necessarily those that enable the final transition to global scale.
Similarly, some geographic locations consistently produce more globally competitive firms, whereas others, despite spawning similar numbers of innovative startups, find it hard to support these startups' growth to scale (Guzman and Stern, 2020[2]). This indicates that the conditions for scaling depend not only on firm-specific traits but also on the strength, connectivity, and institutional quality of the ecosystems where firms operate.
A new OECD study (2026[3]) investigates the determinants of successful scaling using harmonised data covering around 190,000 innovative start-ups founded between 2000 and 2025 in the EU and the US, drawn from the OECD Start-ups Database (Berger et al., 2026[4]). The analysis distinguishes two categories of scaling firms: growth-oriented start-ups, which have raised at least USD 50 million, capturing ventures with demonstrated growth potential but not yet a large-scale market presence; and rising superstars, which reach valuations above USD 1 billion, either privately (unicorns) or at IPO. The evidence is mapped across five key dimensions: regulation, finance, market expansion, talent, and ecosystems, allowing for the assessment of how different levers matter across stages of scaling and locations.
OECD analysis shows that scaling is shaped by a combination of firm-level capabilities, financing conditions, market access, and ecosystem dynamics, and that the relative importance of each dimension varies systematically across growth stages and locations.
Delays and missed scaling events carry cumulative costs. The OECD finds that EU-based start-ups typically reach rising-superstar status around eight years after founding, against just over seven in the US, with a wider gap for growth-oriented firms. These delays are not merely descriptive: longer scaling journeys mean prolonged exposure to risk, larger cumulative financing needs, and weaker market positions in sectors where "winner-takes-most" dynamics dominate (Ewens, Nanda and Rhodes-Kropf, 2018[5]). In fast-moving sectors like ICT, even a one-year delay can permanently weaken a firm’s competitive position, regardless of the underlying quality of its innovation.
The EU scale-up gap is more about commercialisation than inventive capacity. The analysis shows that EU scale-ups are less likely to patent than their US counterparts; only 18% of EU rising superstars hold a patent, compared with around 52% in the US, but among those firms that do patent, EU scale-ups show comparable or slightly higher invention intensity. More importantly, EU patenting firms file their first patent earlier in their lifecycle yet take approximately 1.5 years longer to reach scale after that first filing, a difference that persists after controlling for patent quality, sector, and cohort. These patterns are consistent with frictions along the commercialisation pathway, including the costs and complexity of multi-jurisdiction IP protection and enforcement, rather than a deficit in innovation creation.
EU scale-ups rely more on international networks, whereas US scale-ups rely more on integrated domestic markets. Around 80% of funding received by US start-ups comes from domestic investors, compared with only 30% in the EU (45% considering all intra-EU flows as domestic), with US investors playing an important role. Early-stage funding is broadly comparable across the two regions, but the EU lacks the depth of mature, late-stage investors that mobilise the larger rounds in the US (Figure 1). The analysis shows that this wedge is driven by the funding channelled to a few high-potential firms. The importance of investors goes well beyond the capital they provide, as they also offer strategic guidance and access to global markets and networks. EU scale-ups rely disproportionately on internationally connected investors, particularly from the US, which systematically speed up the scaling process of their backed start-ups.
Acquisitions play a central role in scaling by facilitating entry into new markets, expanding technological scope, and enabling the integration of complementary capabilities faster than organic growth alone would allow. The analysis shows that rising superstars are significantly more likely to engage in acquisitions than growth-oriented start-ups, and that this pattern holds across both the EU and the US. Acquisition activity is particularly pronounced in digitally intensive sectors, where network effects and first-mover advantages make the speed of expansion especially consequential. While US rising superstars predominantly acquire within their large integrated domestic market, EU rising superstars rely more heavily on cross-border deals, including targets in the US, which may partly reflect the fragmentation of the Single Market.
Talent and managerial capabilities are positively associated with scaling outcomes and timing. The analysis finds that serial founders and founders with advanced degrees are more likely to scale and do so faster. Beyond founding-team characteristics, the early appointment of an external CFO is associated with reaching scale more than one year sooner than otherwise comparable firms, underscoring the importance of professionalised capabilities as firms transition from early-stage to complex organisational growth.
Scale-up successes not only benefit the firms themselves, but also generate broader gains for the local entrepreneurial ecosystems. The analysis shows that the emergence of a first growth-oriented firm in a local ecosystem is associated with subsequent increases in overall and innovative start-up formation, particularly in EU ecosystems. The emergence of a first rising superstar generates stronger increases in innovative entry in US ecosystems, but more limited local spillovers in the EU. This result is consistent with evidence discussed above showing that EU rising superstars rely more heavily on international rather than domestic networks, and therefore are less likely to spur their local environments. These findings underscore that ecosystem spillovers are real but not automatic: their strength depends on the type of scaling event and the depth of the surrounding ecosystem.
Average pre-scaling cumulative funding by age in the EU and in the US for rising superstars
Note: This figure shows the evolution of average cumulative funding (in millions of USD) per start-up over its age (in years) for rising superstar start-ups in the EU and the US. Rising superstars are start-ups with valuation ≥ USD 1 billion (private or at IPO). The sample includes start-ups founded between 2000 and 2025 and funding deals received before the start-ups scaled up. Funding amounts are reported in USD and adjusted using OECD PPP-based price level indices (US = 100) to account for cross-country differences in purchasing power.
Source: OECD Start-ups Database, June 2025.
Accelerate commercialisation, not just invention. Simplify IP procedures, lower costs of multi-jurisdiction protection and enforcement, and improve regulatory predictability to shorten the path from invention to market.
Target late-stage financing gaps, not just early-stage support. Early-stage funding in the EU is broadly comparable to the US; the gap opens in later rounds. Deepen late-stage venture and growth-equity markets, facilitate cross-border syndication, and reduce regulatory barriers to large follow-on rounds, so high-potential firms can attract the scale of capital needed to compete at the frontier.
Deepen Single Market integration. EU scale-ups rely more on cross-border acquisitions than US peers, often to overcome the small size of the domestic market and the fragmentation of EU markets, rather than for purely strategic reasons. Reducing operational and regulatory frictions affecting organic expansion and intra-EU acquisitions would let firms build scale within, rather than beyond, the Union.
Facilitate managerial and entrepreneurial talent circulation. Scaling also depends on firms’ ability to professionalise management and access experienced talent at critical growth stages. Easing cross-border mobility for experienced founders and senior executives, addressing barriers faced by underrepresented founders, and investing in executive education and mentoring schemes that equip founding teams with the financial and organisational capabilities needed to lead growing organisations. Expanding the pool of professionals with scale-up expertise through specialised graduate and executive programmes is equally important to ensure that high-potential firms can access the CFO and CEO talent needed during the most demanding growth phases.
Align entrepreneurial, industrial and competition policies around ecosystem complementarities. Scaling events catalyse local entrepreneurship and attract venture capital, but these spillovers depend on ecosystem depth and connectivity. Place-based, innovation, and competition policies should be coordinated so that individual scaling successes translate into durable, system-wide entrepreneurial dynamism, rather than remaining isolated events.
OECD (2026), “Which start-ups achieve scale?: Evidence from innovative start-ups in the EU and the US”, OECD Science, Technology and Industry Working Papers, No. 2026/08, OECD Publishing, Paris, https://doi.org/10.1787/9561f4da-en.
References
[4] Berger, M. et al. (2026), “The OECD Start-ups Database: A new lens on the global entrepreneurial ecosystems”, OECD Science, Technology and Industry Working Papers, No. 2026/04, OECD Publishing, Paris, https://doi.org/10.1787/be8e5317-en.
[1] Decker, R. et al. (2014), “The Role of Entrepreneurship in US Job Creation and Economic Dynamism”, Journal of Economic Perspectives, Vol. 28/3, pp. 3-24, https://doi.org/10.1257/jep.28.3.3.
[5] Ewens, M., R. Nanda and M. Rhodes-Kropf (2018), “Cost of experimentation and the evolution of venture capital”, Journal of Financial Economics, Vol. 128/3, pp. 422-442, https://doi.org/10.1016/j.jfineco.2018.03.001.
[2] Guzman, J. and S. Stern (2020), “The State of American Entrepreneurship: New Estimates of the Quantity and Quality of Entrepreneurship for 32 US States, 1988–2014”, American Economic Journal: Economic Policy, Vol. 12/4, pp. 212-243, https://doi.org/10.1257/pol.20170498.
[3] OECD (2026), “Which start-ups achieve scale?: Evidence from innovative start-ups in the EU and the US”, OECD Science, Technology and Industry Working Papers, No. 2026/08, OECD Publishing, Paris, https://doi.org/10.1787/9561f4da-en.
Contact
OECD Committee on Industry, Innovation and Entrepreneurship Secretariat (CIIE@oecd.org)