Source: National Center for Science and Engineering Statistics (NCSES), (SINV-31; accessed October 2025).
Commentary: Venture capital (VC) funding is a crucial input for entrepreneurship and innovation, supporting early-stage start-ups that are deemed too risky for other forms of capital support. Compared to the United States, VC activity in the European Union (EU) is low, with EU-headquartered firms receiving $1.4 trillion less VC funding than their American counterparts from 2013 to 2022. Annual VC investments in European firms averaged just 0.2 percent of European GDP over this time period, compared to 0.7 percent in the United States. This investment gap has also grown substantially in recent years. In 2013, U.S.-headquartered firms received $43 billion more in capital investment than European firms; by 2022, that gap had grown to $186 billion.
