European companies have the potential to build global brands. Examples from smaller countries, such as the Scandinavian and Baltic states, clearly demonstrate this. In larger economies, however, such as Poland with its 37 million consumers, the dominant growth model is still based on the domestic market. Without thinking about global expansion from the very beginning, scaling a business can become a serious challenge.
Globalization and technological progress are opening up opportunities for companies in foreign markets. According to experts, however, this requires a “born global” approach, meaning that international development is embedded in the business from the moment it is launched. Economic reports indicate that this approach is more common in smaller economies, where the domestic market of just a few million people can seem too limited from the outset.
“European companies are capable of being global. If we look at how Sweden, Finland, Lithuania, and Latvia function, these are countries where globally oriented companies have emerged. Why? Because from the very beginning they knew that their own markets – 8 million people in Sweden, 7 million in Finland, 2 million in Lithuania – were not enough to commercialize a product. As a result, these projects were global from the start. That is how we got brands such as Ikea, Nordea, Bolt, Skype, Nokia, and Angry Birds. These companies were created in our region and are now absolutely global brands,” Dr. Maciej Kawecki, President of the Lem Institute and Director of the Innovation Center at WSB Merito University in Warsaw, told Newseria news agency.
A 2023 study by PayPal and Startup Hub Poland, “Early-Stage Startup Index. Challenges in the Age of Cross-Border Activity,” found that nearly half of early-stage start-ups surveyed were selling their products or services in Poland, while most of them planned international expansion only after securing a strong position in the local market. In the case of start-ups founded by immigrants, more than 70% began operations by targeting foreign customers from the outset.
“None of the countries mentioned had the burden of being a mid-sized country. Unfortunately, Poland does. A market of 40 million people was enough to commercialize products reasonably well, so companies did not build global products from the very beginning,” Dr. Maciej Kawecki emphasizes. “Products have to be created globally. Companies need to build structures based on English rather than Polish, structures that open up immediately to the American market. At a certain level, without reaching the U.S. market, those of us within Western culture are simply not able to build a truly global company. So the best advice I can give is to think globally from day one.”
This challenge has a broader European dimension. Many companies from the Old Continent not only include the United States in their global strategy, but also move part of their operations there. The U.S. market is especially attractive because of its growth and scaling potential. Its advantages include less restrictive legislation, far easier access to capital, and a stronger focus on fostering innovation. This is particularly visible in the digital technology sector.
“European companies, especially digital ones, need three elements to enter and secure a strong position in the global market. First, they need smart regulations and clear operating rules, but not regulatory barriers. Second, they need strong digital skills across society as a whole, so that on the one hand we have entrepreneurs who understand how to use technology to build new products and services or to manage their companies, and on the other hand we educate consumers on how to use digital services effectively and safely,” says Michał Kanownik, President of Digital Poland Association. “The third element, which is indispensable for building a business, is money. We need a very clear and transparent model for supporting innovation through the creation of a strong European investment fund.”
As he stresses, such changes could strengthen the position of European companies in comparison with their American counterparts.
“Europe must be a partner in the global technology market, not merely a customer as it is today. That is why we should work together to build a strong enough European economy, especially a digital one, so that we can stand on equal footing as a partner to the United States, Japan, and South Korea in creating new digital services,” says Michał Kanownik.
This week, Digital Poland Association presented its recommendations for the European Commission’s planned review of digital regulations, known as the Digital Fitness Check. According to the association’s experts, this should be used as an opportunity to simplify the rules and create a more innovation-friendly environment in the EU. In their view, the current model of digital regulation is becoming increasingly complex. Successive legal acts regulate overlapping areas of technological activity, which raises compliance costs, increases legal uncertainty, and makes it harder for new technologies to develop in Europe.
