By David T. Robinson and Henry Sauermann
Europe does not suffer from a lack of innovation, but it struggles to turn innovation into disruption. While European firms excel at incremental improvement, they repeatedly miss breakthrough shifts that reshape industries. This article argues that the root problem is not funding or regulation, but how innovation problems are framed and how innovators are trained to think.
Europe has an innovation problem. The problem is not that there is too little innovation. It is that European innovation is overwhelmingly incremental in nature. Each year, the latest European performance sedan is slightly better than the previous one: more comfortable seats, smoother handling, marginal efficiency gains. Yet despite this technical excellence, Europe largely missed the transition to electric vehicles.
This pattern is not new. The European Commission has long warned that Europe invests heavily in research and development but underdelivers when it comes to breakthrough commercial innovation. Prominent economists and innovation scholars have noted that while Europe excels at scientific discovery, it struggles to scale radical ideas into market-shaping outcomes. The Economist has described European firms – particularly Germany’s small and medium-sized companies – as “champions of incrementalism.”
The usual explanations follow a familiar script. Europe lacks venture capital. Regulation is too rigid. Labor markets are insufficiently flexible. Each of these factors plays a role, and addressing them may encourage greater risk-taking. But they treat the symptoms rather than the root cause. Europe’s deeper challenge lies in how innovation problems are defined in the first place.
Incremental Innovation Versus Disruptive Thinking
Incremental innovation asks how to improve an existing product, process, or system. Disruptive innovation asks whether that product, process, or system is still the right solution at all.
If incremental innovation makes a sedan quieter or safer, disruptive innovation asks a more fundamental question: do we actually need the sedan? It reframes the challenge from improving a car to solving a human need, getting from point A to point B. Once the problem is framed this way, entirely different solutions become possible, especially as new technologies mature.
Disruption does not emerge automatically from scientific breakthroughs. New technologies create opportunities, but they do not determine how those opportunities are used. Someone has to interpret them, connect them to real human needs, and imagine alternative ways of organizing economic activity. That step is where Europe often falls short.
Seeing the Problem Differently
Consider a simple scenario. You leave a restaurant late on a cold, rainy night. When you get into your car, it will not start. What is the problem?
The incremental thinker works through a checklist. Is the battery dead? Is the fuel tank empty? Is there a mechanical fault? Identifying and fixing the issue restores the car to working order.
The disruptive thinker sees the situation differently. The real problem is not a broken car. The real problem is that it is cold and raining, and you need to get home to put your children to bed. Once the problem is reframed this way, the range of possible solutions expands dramatically.
This ability to identify the underlying human need, rather than focusing narrowly on the immediate technical failure, is central to disruptive innovation. It is not about abandoning engineering expertise but about starting from a broader perspective before narrowing in on a solution.
The Humanist Perspective
Disruptive innovation relies on what can be described as a humanist perspective. This approach combines empathy, reason, ethics, and imagination. Instead of beginning with technology and asking what it can do, it begins with people and asks what they actually need.
Technological novelty alone does not create meaningful change. Innovations that truly reshape markets and societies do so because they improve human welfare in new ways. Achieving this requires judgment, interpretation, and the ability to see connections across systems, not just technical optimization.
Disruptors are not merely problem solvers within existing structures. They are agenda setters who redefine the problem itself. They are the ones who say, “We don’t just need a better car. We need a better way to get home.”
Why Education Matters
If Europe wants more disruptive innovation, education matters more than is often acknowledged. The issue is not that Europe teaches too little science, engineering, or economics, nor that these subjects are taught poorly. The issue is that innovators are often trained to optimize existing systems rather than to question them.
A narrowly technical education encourages problem-solving within established boundaries. A broader education – one that integrates insights from the humanities, social sciences, ethics, and arts – encourages people to step back, reframe problems, and imagine alternatives.
This kind of training builds the confidence to ask uncomfortable questions and to challenge dominant assumptions. It equips innovators to combine deep expertise with a systems-level understanding of how technologies, organizations, and human needs interact.
What This Means for Business
For business leaders, the implications are practical. Innovation efforts should begin with careful attention to problem framing. Before investing in new products or technologies, teams should be encouraged to articulate the deeper human need they aim to address.
This does not mean rejecting incremental improvement, which remains economically important. But without space for reframing and exploration, organizations risk becoming exceptionally good at optimizing solutions to problems that no longer matter.
Rethinking Europe’s Innovation Challenge
Europe’s innovation debate often focuses on how to catch up with others. A more useful starting point is to ask how Europe defines innovation in the first place. Its institutions reward precision, stability, and continuous improvement, qualities that have delivered decades of success. Yet these same qualities can make it harder to recognize when a different approach is needed.
Europe does not need to abandon its strengths. It needs to complement them with a mindset that places human needs at the center of innovation. Disruptive innovation begins not with better technology, but with asking better questions and with the willingness to see problems differently.
About the Authors
David T. Robinson is the James and Gail Vander Weide Professor of Finance at Duke University’s Fuqua School of Business. His research focuses on private equity, venture capital, and entrepreneurial finance.
Henry Sauermann is a professor of strategy and the Team Global Chair for Disruptive Innovation at ESMT Berlin. His research focuses on the role of human capital in science, innovation, and entrepreneurship.
