European and Belgian competitiveness | BDO Trend Report - BDO

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2026
Competitiveness: Europe and Belgium | BDO Trend Report

Europe is caught between competing pressures. On one hand, massive investments in technology, sustainability and the green transition. On the other, persistent struggles with scale, speed and implementation power. The United States and China are reshaping markets through hyper-capital, aggressive commercialisation and strong industrial policy. Europe frequently gets caught in consultation and regulation.

Belgian companies feel that pressure twice over. A small domestic market, high labour costs and a complex regulatory framework make it harder to compete internationally. The OECD’s 2026 Foundations for Growth report confirms the pattern: Belgium’s excessive regulatory burden, exacerbated by interregional differences, imposes significant costs on businesses, while weak business dynamism has held back productivity growth. And yet, Belgian labour productivity remains among the highest in the OECD.

In our Trend Report: The business world in 2030, developed in collaboration with trendwatcher Tom Palmaerts, we explore why European innovation keeps getting stuck on the way to scale and what Belgian companies can do to break through.

The mid-tech trap

Europe develops strong technology. Scaling it to global market share is where the challenge lies. This is what economists call the mid-tech trap: a phase in which innovation emerges but rarely pushes through to the execution power of global players. Ideas stall in academic projects or pilots while commercial muscle is lacking.

The structural financing gap plays a central role. In the US, far more private equity and venture capital is available, enabling companies to scale quickly and corner international market share. Only four of the world’s top 50 tech companies are European, and no European company with a market value above €100 billion has been founded from scratch in the past 50 years. European innovative ideas struggle to gain international traction, held back by a combination of limited execution capacity and underfunding.

A quiet renaissance

Despite those shortcomings, something is shifting. Companies such as Spotify, Vinted, Klarna and Lovable show that European innovations can grow into global brands. These are European companies, yet together they form a convincing counterweight to the dominance of Silicon Valley and Shenzhen. The innovative strength is alive. The right mix of capital, vision and determination does lead to scalable success stories.

Closer to home, Belgium is an international leader in two domains that will help shape the future: microchips and biotechnology. IMEC in Louvain is a global reference in nanoelectronics and digital technology, driving the European development of next-generation chips and AI applications. And Belgium’s biotechnology sector, with more than a hundred specialised companies, represents a large share of European turnover and investment in biopharma. The success of both sectors lies in the collaboration between universities, spin-offs and industry. Belgium is more than a small market. It is a breeding ground for global innovation.

Regulation as a competitive factor

Europe is also choosing its own path on AI. The AI Pact and the AI Act impose clear boundaries and obligations. In the short term, that regulation may seem like a brake on innovation. But it also creates trust and predictability. Companies know where they stand, investors gain clarity, and users receive guarantees around safety, privacy and ethics. In a world where trust is increasingly becoming a competitive factor, Europe’s stricter but consistent framework may turn out to be an advantage.

The competitive landscape extends beyond technology and capital too. Asia is a growing presence in Europe’s cultural space, with new formats and narratives reaching younger audiences and reshaping consumer expectations. The competitive battle is being fought in the consumer’s imagination as much as in the boardroom.

What you will find inside the report

The competitiveness section of our Trend Report goes much further than the trends above. It explores the mid-tech trap in detail and analyses why European innovation keeps stalling at the pilot stage.

It includes insights from BDO’s own leadership on why structural simplification and agility are becoming critical success factors for Belgian companies looking to compete internationally, and why organisations with fewer management layers, clear responsibilities and streamlined processes respond faster to change and create more space for innovation.

The report makes the case that success in a complex business climate still largely depends on what companies can control themselves. Organisations that increase their agility, reduce internal complexity and invest in focus and strategic execution improve their chances of growing in a market that continues to gain momentum.

This article is part of ourTrend Report: The business world in 2030, a collaboration between BDO Belgium and trendwatcher Tom Palmaerts.

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