Scaling CESEE innovation: Ecosystem dynamics and strategic relocation opportunities

Alexandra Bykova (), Francesca Guadagno (), Ioannis Gutzianas () and Mario Holzner ()
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Alexandra Bykova: The Vienna Institute for International Economic Studies, wiiw, https://wiiw.ac.at/alexandra-bykova-s-857.html
Francesca Guadagno: The Vienna Institute for International Economic Studies, wiiw, https://wiiw.ac.at/francesca-guadagno-s-1988.html
Ioannis Gutzianas: The Vienna Institute for International Economic Studies, wiiw, https://wiiw.ac.at/ioannis-gutzianas-s-2360.html
Mario Holzner: The Vienna Institute for International Economic Studies, wiiw, https://wiiw.ac.at/mario-holzner-s-6.html

No 105, wiiw Policy Notes from The Vienna Institute for International Economic Studies, wiiw

Abstract: Europe’s innovation bottleneck increasingly manifests in the difficulty of scaling promising startups into globally competitive firms. Central, East and Southeast Europe (CESEE) is particularly exposed to this due to limited finance and local acquirers, which lead to serious risks of relocation particularly beyond the EU’s borders. This policy note documents the sectoral structure and dynamics of CESEE small enterprises (10-49 employees) across six broadly defined macro-sectors Digital Economy, Life Sciences, Media, Creative Economy, Production, and Neighbourhood Economy. It uses Eurostat’s Structural Business Statistics and patent data from the OECD Patent Database. An analysis of the most influential rankings of innovative clusters and related outcome indicators complements the descriptive analysis. The note finds that Production and the Neighbourhood Economy represent the lion’s share of the region’s small enterprises, while Digital Economy is the clear growth champion. Creative Economy activities show solid, if uneven, expansion. And while the Media macro-sector stagnates, Life Sciences exhibits highly concentrated but distinctive niche specialisations, especially in smaller economies. Ecosystem rankings and unicorn outcomes reveal an intensely urban, highly heterogeneous innovation landscape. Some small CESEE states, such as Estonia, Lithuania, and Croatia, achieve exceptional unicorn densities, yet many of these firms relocate their headquarters to the US or the UK to access deeper capital markets. The paper posits that strategic intra-EU relocation and dual-hub models – particularly leveraging, for instance, Vienna’s role as a proximate, research-intensive hub – can help to keep CESEE firms and value creation within the European innovation system while Capital Markets Union reforms remain incomplete.

Keywords: CESEE; Startups; Scaleups; Unicorns; Innovation; Sectoral specialisation; Patents; Urban hubs; Capital markets (search for similar items in EconPapers)
JEL-codes: G24 L26 O30 O52 R11 R58 (search for similar items in EconPapers)
Pages: 39 pages including 6 Tables and 11 Figures
Date: 2026-03
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