Europe’s Competitiveness Strategy Shifts at SME Assembly 2025
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At SME Assembly 2025, Europe Confronts Its Investment and Competitiveness Gap
At SME Assembly 2025 in Copenhagen, hundreds of entrepreneurs and policymakers confronted Europe’s €800bn investment gap, calling for simplification, practical funding and a shift from “unicorn” myths to everyday enterprise.
The Danish capital did not ease into the opening day of the SME Assembly 2025. By early afternoon, the pace was already intense: delegates moving briskly between various industrial and thematic visits, including Alfa Laval and Spora CPH, Member State experts entering the closed-door meeting of SME Envoys, and organisers coordinating the arrival of nearly 450 participants from across Europe.
Held under the Danish Presidency of the Council of the EU, the Assembly unfolded beneath the motto “Successful SMEs, Competitive Europe” — a slogan that felt less like a banner and more like a warning.
Although the SME Assembly is often perceived as an institutional forum, this year’s edition looked very different. Entrepreneurs themselves — founders, manufacturers, exporters, family business owners, artisans — attended in large numbers. Their presence changed the atmosphere almost immediately.
Conversations became sharper, less abstract, and more grounded in the operational challenges that define Europe’s competitiveness problem. It no longer felt like policymakers speaking about entrepreneurs, but entrepreneurs speaking directly to policymakers.
The context made the realism unavoidable. Europe’s competitiveness gap is now quantified with brutal clarity: an €800 billion annual investment shortfall and internal market fragmentation equivalent to a 45% tariff on goods and 110% on services.
Danish Minister Morten Bødskov captured the dilemma in a line that circulated widely:
“The United States and China invest in high tech. Europe invests in middle tech.” It was not criticism, but a sober assessment of the continent’s technological lag.
As discussions intensified, one institutional voice stood out. Hubert Gambs, Deputy Director-General at the European Commission’s DG GROW and the senior official responsible for SMEs, framed the Assembly as “the most important SME event of 2025” — not for symbolism, but because “policy and practice must finally be in the same room.”
Hubert Gambs stressed that Europe will not reach its industrial, digital or environmental ambitions unless regulation becomes operationally feasible for SMEs. For him, Europe must adopt a genuinely holistic, entrepreneur-centred approach.
His message aligned with what many founders were expressing on the floor: simplification is no longer a preference; it is a condition for survival.
The Schumpeter Lecture Reframes Europe’s Entrepreneurial Narrative
As daylight faded, the Assembly moved into its intellectual focal point: the Schumpeter “Innovation in Enterprise” Lecture delivered by Professor Dr. Dr. h.c. Friederike Welter, head of the IfM Bonn and one of Europe’s leading researchers on entrepreneurship. Her message resonated deeply, especially among the many business operators present.
Welter argued that Europe’s narrative around entrepreneurship has become dangerously narrow. Too much prestige goes to unicorns, frontier disruptors and fast scalers, while the entrepreneurs who make up 99% of Europe’s economic fabric remain largely invisible in policymaking.
She invoked the baker modernising her ovens, the mid-cap refining its manufacturing process, the craftsman exporting to a loyal niche, the family firm innovating steadily across generations, the hidden champion quietly dominating a global sub-sector. These companies, she insisted, are not the periphery of Europe’s competitiveness; they are its foundation.
Her critique extended beyond narrative. European regulatory frameworks still reflect a Silicon Valley-inspired model — rewarding rapid scaling while burdening incremental innovation with heavy reporting obligations, complex compliance requirements and fragmented incentives.
Many entrepreneurs in the room reacted with visible relief: it was the first time a major EU venue recognised their role not as exceptions but as the centre of Europe’s economic reality.
Source Note: Analysis based on the official transcript of the YouTube video by Promoting Enterprise, entitled: SME Assembly 2025 – Schumpeter “Innovation in Enterprise Lecture” 2025 – Professor Friederike Welter (The full text is available here ).
The following day, this shift permeated workshops on simplification, internationalisation, digitalisation and sustainability. Entrepreneurs questioned policy timelines, data requirements, administrative burdens and the cumulative cost of compliance. Public officials — often for the first time — acknowledged that the gap between legislative ambition and operational feasibility had grown too wide.
Marie-Hélène Pradines, Head of the SME Unit at the European Commission, described the Assembly as “a place where practical ideas are collected, not abstract proposals,” emphasising that the next Multiannual Financial Framework must integrate the operational reality of SMEs.
Hervé Busschaert, Programme Advisor at Executive Agency for Small and Medium-sized Enterprises (EASME), highlighted the structural function of the Assembly: a bridge between Brussels and the real economy, where future regulations are debated, corrected and sometimes contested before becoming law.
The pressure from industry was equally forceful. Lars Sandahl Sørensen, CEO of the Confederation of Danish Industry (Dansk Industri) and one of the most influential voices in Scandinavian business, brought significant weight to the debate.
Sørensen warned that Europe’s competitiveness is “in free fall” unless deep structural simplification becomes the EU’s top priority. As one of the leading figures behind the Copenhagen Pledge — a declaration signed by 28 major European companies — he stressed that businesses are ready to invest, but only if Europe removes the administrative obstacles that “slow down the very firms that create growth.”
His message found strong resonance among the many entrepreneurs present, who saw in it a rare alignment between SMEs and industrial giants.
A theme crystallised through these three days: simplification is now an industrial necessity, not a rhetorical objective. Europe’s strategic goals — green, digital, industrial — will remain out of reach unless the regulatory framework becomes proportionate to the capacity of SMEs, which form the backbone of the continent’s economy.
By the time participants gathered for the SME Week Reception, the atmosphere had grown more focused, almost intense. Entrepreneurs clustered around policymakers, discussing supply chains, export hurdles, reporting obligations and the everyday frictions of the Single Market.
For once, the room no longer felt divided between those who design rules and those who endure them. The two worlds were in direct conversation — and it showed.
If the Assembly produced a single overarching insight, it was this: Europe’s competitiveness will not be rebuilt by a handful of extraordinary firms, but by the millions of ordinary entrepreneurs who operate every day under increasingly complex conditions. Recognising them — structurally, not symbolically — may prove the most consequential strategic shift Europe undertakes in this decade.
The revolution in Copenhagen was quiet, but unmistakably real. It was shaped not by grand declarations, but by entrepreneurs themselves — and that, more than anything, may be what gives it lasting impact.
By Dorothée Oké, journalist
