June 05, 2024 - Today, European venture capital firm Redstone, supported by Munich-based think tank AlpMomentum & the Brussels-based European Startup Network (ESN) release a comprehensive study titled "Redstone University Startup Index: Europe’s Trillion Euro Opportunity." This research delves into the entrepreneurial efficiency of universities across Europe, highlighting both current impacts and potential opportunities for economic growth through startup creation.

Key Findings: The study reveals significant discrepancies in the effectiveness of European universities in generating economic and political value through startups. It also calculates the vast economic potential Europe could ignite. Key insights include:

Potential for Growth: By optimizing startup creation efficiency, European universities have the potential to create over 157,000 additional startups over the next 10 years. This could lead to:
6.1 million additional jobs,
€400 billion in additional taxes
€2.6 trillion in additional GDP = adding close to 1x the french economy to Europe, and
€3.2 trillion in additional equity value​​.

Disparity in Efficiency: The effectiveness of universities in creating startups varies greatly, with some institutions achieving the same economic impact with €2 million that others do with €200 million.

University Index & Ranking
The study ranks universities based on their efficiency in startup creation, revealing significant insights into the performance disparities across institutions. On average, the top 100 universities produce 16.6 startups per €100 million in university budget, significantly outperforming the overall average of 6.6 startups per €100 million. Business schools lead the rankings, with institutions like Germany’s WHU creating 65 startups per €100m, or non-business University Paris Dauphine, 35 startups per €100m, setting benchmarks in entrepreneurial efficiency. The rankings highlight the critical role of focused entrepreneurship education and robust support ecosystems in driving higher startup output and economic impact​.

Country and City Index & Ranking
The study also highlights notable regional variations, with countries like France, Spain and England leading in startup efficiency and potential economic impact. In addition to its comparatively high performance as a startup pace-setter in Europe, England also tops the list with the potential to add over 32,000 startups and 1.3 million jobs in the next decade. Among cities, Barcelona stands out as the most efficient, producing nearly 14 startups per €100 million university budget by all institutions located in Barcelona, while London boasts the highest combined university budget at €12.5 billion. These insights underscore the importance of targeted optimization and supportive ecosystems in maximizing entrepreneurial outputs at both national and city levels​.

Recommendations for Policy Makers and Universities
To harness the full potential, the study recommends several key actions, which the universities leading the rankings already focus on. The most important is: “Establish entrepreneurship as the third fundamental pillar alongside research and teaching at European universities.” Michael Brehm, the initiator and a co-author of the study, as well as founding partner of VC Redstone, emphasizes the critical role of universities in shaping the future economic landscape of Europe. "The magnitude of untapped potential within European universities is astonishing. However, some of the easy measures would be:  Providing students with the necessary skills, presenting startups as a career option and enhancing networks. With little to no additional costs, these institutions could significantly enhance their contribution to society and the economy as well as help to transform Europe into a tech powerhouse" said Brehm​​.

Brehm also highlighted the importance of interdisciplinary collaboration and strong alumni networks in achieving these goals. "Connecting the right people and promoting exchange between business, technical, and scientific programs and Universities could further drive innovation and startup success," he added​​.

Clark Parsons, the CEO of the ESN, says the study underscores the potential of startups to help Europe close its competitiveness gap with the US and Asia. “There are several low- to no-cost measures for political leaders throughout Europe that would increase startup creation out of Universities. We hope the next European Commission and Parliament will encourage member states to do all they can to enable better startup conditions, including unlocking the full innovation potential of our university ecosystems.” 

The study: The study was conducted and prepared over the last 1,5 years analysing budgets of 457 Universities and research institutions, and the startup economy in 34 European countries. From all startups founded in Europe in 2023, the study matched circa 7.500 startups to those educational & research institutions, based on entrepreneurial alumni relationships or direct university spinouts. Analysing the budgets, the team calculated efficiency of startups created, both in terms of pure numbers as well as unicorns. Taking the average of the 100 best-performing universities as a benchmark, the study was able to calculate the potential of all institutions. This established an index according to different categories, such as (non-)business schools, size of institutions or regional performances.