Globalisation never made geography irrelevant; it made certain parts of it more fluid. Over several decades, people, ideas and, progressively, capital became more mobile, allowing tech companies to assemble resources across borders with an ease previous generations of entrepreneurs could hardly have imagined.
Yet even at the height of the software era, entrepreneurial activity continued to gravitate towards a handful of ecosystems. Silicon Valley or the duo Boston-New York prospered because large markets, abundant capital, universities, exceptional talent and credible paths to liquidity reinforced one another in the same place.
Frontier tech startups are living into a rather different world. The chessboard has become more global, just as the world itself is becoming more balkanised.
A more global, but less frictionless, world
Scientific and engineering capabilities are now distributed everywhere. China and India have developed formidable pools of technical talent; Singapore has built a dense research environment; Gulf economies are investing heavily in tech and industrial capabilities; and Europe retains exceptional depth across science, engineering and advanced industry.
Frontier tech startups, however, depend on more than talent and capital. They need specialised infrastructure, manufacturing capacity, regulatory pathways, energy, supply chains and often access to governments or large industrial customers. Unlike software, these resources cannot simply follow entrepreneurs wherever they choose to congregate.
Besides, governments have now returned massively to the industrial arena: semicon, biotech, energy, and AI are increasingly treated not simply as markets, but as strategic capabilities. Subsidies, export controls, investment screening and domestic-production incentives can alter the relative attractiveness of locations while startups are still moving from laboratory validation towards industrial scale.
The paradox is striking: the resources required to build frontier companies have rarely been so geographically distributed, yet the freedom to combine them can no longer be taken for granted.
Europe has the ingredients, but scattered
Europe illustrates this tension particularly well. It combines leading universities, scientific talent, sophisticated industrial groups and deep engineering capabilities with comparatively fragmented capital markets and national innovation ecosystems. The conventional response has been to ask how Europe might reproduce the conditions that made Silicon Valley successful. A more useful question is what European companies should retain where the continent provides genuine differentiation, and what they should deliberately seek elsewhere.
Biotech offers a revealing example. In 2026, China’s Innovent and Pfizer agreed a partnership covering 12 oncology programmes in a transaction worth up to $10.5 billion. More interesting than its headline value is the division of labour: Innovent retains responsibility for development through Phase I, after which Pfizer assumes responsibility for global development. There is an economic logic behind this architecture. McKinsey estimates that Chinese biopharma companies can move from early discovery to IND 50 to 70 per cent faster than global benchmarks, while clinical trial recruitment can be two to five times faster than US and European benchmarks. Instead of insisting that an entire development chain remain within one ecosystem, the programme moves according to where each stage can be executed most effectively.
From international expansion to geographic architecture
This is more than internationalisation. Traditional international expansion begins with a successful company in a home market and asks where it should go next. Geographic architecture begins earlier, by asking where each critical component of the company ought to sit. Where is the scientific advantage? Where can validation be performed fastest? Which ecosystem offers competitive manufacturing? Which jurisdiction provides the most credible regulatory pathway? Where is patient capital available, and which beachhead market offers both early demand and strategic credibility? For frontier tech startups, these questions cannot be answered once in a business plan. The answers evolve as technology matures and as regulation, industrial policy and geopolitics reshape the relative advantages of different locations. The smartest European startups may therefore be those that remain European where their differentiation demands it, while being deliberately opportunistic about the architecture through which that advantage is industrialised.
Industrial policy is becoming part of product strategy
The same logic becomes more visible as companies approach production. Israeli battery tech company Addionics chose the United States for a planned $400 million manufacturing facility, not because the underlying technology originated there, but because customers, supply-chain policy and incentives under the Inflation Reduction Act had made American production increasingly attractive. For a software company, geography may affect hiring, taxation or market access. For an industrial company, it can change the economics of the product itself. Industrial policy is therefore becoming part of product strategy.
At the more geopolitical end of the spectrum, defence startup Covenant is developing production capacity across the United States, Germany and Israel. Its European industrial architecture is intended to limit dependence on American components, reflecting a world in which export controls, sovereign procurement requirements and political considerations can make a theoretically efficient global supply chain commercially or strategically unusable. The lesson is not that every activity should be distributed internationally. It is almost the opposite: every dependency now deserves greater scrutiny.
Investors need a different map too
This evolution changes the role of venture capital as well. Capital without an understanding of industrial geography is increasingly incomplete. Financing choices interact with intellectual property, manufacturing, regulation, governance, strategic partnerships and eventual market access, often across jurisdictions whose interests do not naturally align. This observation sits behind the cross-border investment thesis developed by Entropia Capital across Europe, APAC, the Gulf and North America. Rather than treating geography as a constraint surrounding an investment, the approach considers the configuration of ecosystems around a company as one of the variables through which value can be created.
The interesting opportunities often sit in the interstices: a European technology that can reach validation faster through an Asian partner; or an industrial process whose economics change once US incentives and customers are considered. Finding those combinations requires a different map from the one traditionally used by venture investors.
The Advantage Lies Between Ecosystems
The world is unlikely to return to the frictionless version of globalisation imagined at the beginning of the century. Strategic competition is intensifying, industrial policy has returned, and governments will remain active in determining where critical technologies are financed, manufactured and deployed. Nor does this imply that frontier innovation will become purely national. Few countries possess every scientific, industrial, financial and commercial capability required to dominate every emerging technology.
This creates the paradox that may define the next generation of frontier tech startups: they will need to become more sophisticated internationally precisely as the international system becomes more fragmented. For Europe, that need not be a counsel of pessimism. The continent possesses many of the pieces required to build globally significant companies, even if it does not always possess them in the same place, at the same scale or at the right moment.
The advantage may therefore belong to entrepreneurs capable of reading the global chessboard dynamically: knowing what must remain close to the scientific core, what can be sourced elsewhere, which partnerships create optionality, which dependencies create vulnerability and when geopolitical change requires the architecture to be redrawn.
The next great frontier companies won’t emerge from the ecosystem that has all the answers. They will emerge from those that become exceptionally good at connecting the right ones.
This article was first published on The European Business Review on 16 September 2026.
The distinction between international expansion and geographic architecture is important. For frontier tech, geography is increasingly something you design into the company from the beginning, not something you address once the domestic market has been conquered!
Great piece. The Innovent–Pfizer example made me think about the flip side, though. Running Phase I in China is fast, but that speed only helps if the data still counts later. And Washington is now openly questioning whether it should: draft appropriations language in May, then a letter in August pushing FDA to demand site audits. Nothing's law yet, but it's the exact dependency risk you describe with Covenant, just showing up in biotech. The fastest part of the chain might also be the most exposed.