The European tech industry is more innovative than you think

Against political uncertainty, technology executives are looking to European tech firms for market innovation, reliability and resilience.

Ever since the term FAANG became part of the technology industry vernacular in 2013, there has been a prevailing fear that Europe is toothless in the technology race. 

Coined by US entrepreneur and commentator Jim Cramer, FAANG, of course, refers to Facebook, Apple, Amazon, Netflix and Google. These technology giants have dominated tech discourse in the last 12 years and now head the rise of Artificial Intelligence (AI) in daily and business life.

The European tech industry: Overview

• A retail digital leader spins up a technology leader
• The state of tech innovation in Europe 
• European success evident with SAP and ASML

Europe may not have a successful search engine, social network or mobile device maker, but it is home to a streaming giant, FinTechs and arguably one of the most important providers of enterprise software, SAP. 

The German enterprise resource planning (ERP) giant is not alone; Suse, TeamViewer and Sage all herald from the continent. None of these technologies, whether European or from across the Atlantic, can deliver much for a CIO without relying on the chips that were etched by Dutch firm ASML, the firm that recently recruited former Shell technology leader and HotTopics community member Allan Cockriel. And in the AI race, Europe offers tech start-ups like Mistral AI of France and Sana AI of Sweden. 

Take a look at the financial results of the enterprise software titans, and you can see that European tech is close to its US rivals; in April 2025, the quarter one results of SAP revealed revenue of €9.013 billion and a net income of $1.796 billion. Competitor Oracle recently reported its fourth-quarter results, achieving total revenue of $15.9 billion. ASML, which lacks any real rival from the US, reported sales of €7.7 billion, this despite pressure from past and present US Presidents to restrict its sales to China. 

Europe offers tech specialism

Scayle, a German e-commerce platform, may lack the household cache of Jeff Bezos' Amazon empire, but counts 200 major online retailers as customers. 

Co-founder Tarek Müller says of the business: "We specialise in complex cases such as when it is too complex for Shopify or if you want to get off Salesforce or SAP." 

His point is well made and touches on where Europe is a leader - complexity. A growing number of CIOs find Salesforce is becoming expensive, whilst customising applications is well known to be fraught with risk. Out-of-the box solutions that are tailored to deal with complexity will become increasingly important. 

Europe's talent has always been tackling the small complexities that become a big headache for organisations; it's why Europe dominates specialist areas like motorsport, satellites, MedTech, luxury goods and fashion. Fashion retail is one such complexity; delivering apparel and the experience we expect from buying the clothes we wear for work or social engagements is not the same as ordering a new Nutribullet. 

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Scayle and the rise of specialist platforms

Scayle was founded in 2018, which in the tech sector makes it no spring chicken. A study into the state of innovation in Europe by the European Union reveals a continent still bursting with creativity and ideas. 

Denmark and fellow Nordics Sweden are the most innovative countries, according to the European Innovation Scoreboard, whilst non-EU member Switzerland is considered an innovation leader when compared globally. Thierry Breton, Commissioner for Internal Market, said in a statement of the Scoreboard: "We need to build on this technological edge to be industrial and commercial leaders in the markets of tomorrow."

European tech innovation – More than government scorecards

Government scorecards tend to paint a positive picture. Is Europe winning the real race for innovation? Evidence would suggest so. Global HR analyst house The Josh Bersin Company, though headquartered in the US, chose Sweden's Sana as its AI partner. Müller at Scayle says the specialism of his e-commerce firm is pioneering the use of avatars, AI and voice in retail. Parts of Europe are way ahead of the US in Fintech services.  

In the case of Scayle, this is not a technology business building applications and hoping the customers will come; Scayle was spun out of online retailer ‘About You’, with Müller in leadership positions across both businesses. Scayle is developing these technologies because it understands all the elements of retail, such as that returns are a pain point for fashion customers and online retailers alike. 

Personalisation is a holy grail in e-commerce, and Scayle is investing in technologies that help them and their retailers understand the customer, all developed within the tight data privacy framework of Europe's General Data Protection Regulation (GDPR) and more recent digital regulation, such as the Digital Market Act and Digital Services Act. 

Müller says: "In the next 10 years, I hope we will see a big step in personalisation and that will lead to another leap in online retail penetration." 

The benefit of European tech scale

European businesses and its institutions should use the scale of the FAANG firms as a strategic warning. You don't have to be as big as these companies, but organisations cannot ignore the impact they continue to have on society and markets. Some argue that Europe is already falling behind. 

In a recent article, academic Francesco Grillo of Bocconi University says: "The continent remains complacent about its decline into backwardness. The European Commission itself calculates that of the 19 digital platforms that have more than 45 million EU users, only one (Zalando) is from the EU." 

He adds that this poses a real risk to a continent that is seeing the rise of far-right politics again: "Information is (economic and political) power, and losing control means to gradually lose both market share and the ability to protect European democracies.

"Brussels has produced a mass of regulation on digital services, yet American digital platforms are getting away with what European leaders themselves call the manipulation of democratic elections, with very little repercussions." 

The academic is right, but Europe has power and influence in its specialism and we need to celebrate and champion this. By realising and understanding that Europe has a cadre of great technology firms, we can focus on what we do best and use that strength to manage the US giants to the best benefit of European businesses and citizens. 

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Key takeaways

• A history of innovation: Europe can and has thought big, as SAP, Sage, Suse and ASML show
• Specialist scale: Scayle shows Europe can, like Amazon, spin tech out of its traditional businesses like retail
• Innovate safely: Developing new services within governance, such as GDPR, leads to tech that customers trust
• Don't get complacent: There are risks inherent in the lead and scale of US firms, and Europe must remain vigilant 

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