Northzone heavyweight hits back at EU criticism: "No need to paint the devil on the wall”

There’s a heated debate right now about which region is truly leading the way: Europe or the US. On social media platforms like LinkedIn and X, entrepreneurs and investors are taking sides, posting statements and rallying behind polarised viewpoints.

There are several reasons why this debate has flared up. One key factor is Donald Trump’s return to office, which has driven the US towards a more nationalist approach to business. Just last Friday, the new president suggested he might impose tariffs on European goods. This shift in US policy has fueled arguments that Europe needs to step up its game across various sectors, with some claiming progress is too slow.

Another key factor is the US’s massive investment in AI. While Europe is also pouring money into AI, some critics argue that the focus here is primarily on regulation rather than innovation.

Just this week, Robert Falck, founder of electric truck company Einride, made waves with a LinkedIn post arguing that Europe is stuck in an outdated mindset, with a limited willingness to embrace change. In a follow-up post titled Europe, it’s time to step up, he laid out a series of concrete actions—from celebrating success (rather than undermining it) to embracing new ideas.

Now, Swedish tech veteran Pär-Jörgen Pärson is stepping into the debate. As a partner at venture capital firm Northzone and co-founder of The Inner Foundation, he’s a heavyweight in the ecosystem – one who has lived and worked in both the US and Sweden.

In a LinkedIn post, he voiced concern over how many influential figures are writing off Europe as a global economic power, when in his view, the opposite is true. Speaking to Impact Loop, he expands on his perspective:

"I’ve been getting more and more frustrated by the self-sabotage we’re engaging in across Europe, especially in the startup ecosystem," he says.

He acknowledges that focusing on problems can be valuable – "admirable in many ways," as he puts it – but warns that it can sometimes blow certain issues out of proportion. A case in point, he says, is Europe's AI regulation.

"I think it's incredibly heavy-handed and bad, but that doesn’t mean Europe will be completely irrelevant in the AI race. There’s no need to paint the devil on the wall over every issue," he says.

"Europeans are happier"

Pär-Jörgen Pärson compares the economic trajectories of the EU and the US since 2010. While the US economy has grown by $13 trillion (€12 trillion), its debt has risen by $18 trillion (€16.5 trillion), he argues. Meanwhile, the EU’s $4 trillion (€3.7 trillion) growth has only required an additional $2 trillion (€1.8 trillion) in debt.

He also points out that rankings show Europeans are generally happier than Americans and that, in his view, Europe’s infrastructure and transition to a more sustainable society are far superior to those in the US.

"Of course, there are plenty of things that can drive you crazy here at home, but people forget how complicated things can be in the US. One example: When I bought a car in the US last summer, we had to wait six hours and sign 24 different documents. In general, whenever you buy something in the US that requires registration, it’s just unbelievably complicated," he tells Impact Loop.

He argues that Europe has successfully solved many problems, making it easier to run a business here.

"We’re doing ourselves a disservice by ignoring the context. People complain that the EU is so bad and say we have 27 countries, while the US is one single federal state. That’s not true— the US has 50 states with different regulations."

Trump is now shutting down several green projects in the US and steering towards a more nationalist agenda. How do you think this will affect Europe?

"I hope Europe isn’t too easily swayed by what’s happening in the US. Trump coming out and saying he’ll ban the production of solar and wind farms is economically idiotic. We have a much healthier dialogue here, and I hope we don’t tip over in the same way."

Last week, over 100 energy entrepreneurs and investors called for a more ambitious energy policy. What's your view on this?

"On one hand, they’re absolutely right. On the other hand, market forces are already pushing these issues in the right direction. I believe government funding should be used where there’s no alternative – or a worse alternative. And I do think there’s enough capital out there, or at least enough interested financiers, for promising new technologies."

Northzone has invested heavily in energy companies like Flower and drone firm AirForestry, along with several others in the sector. Do these companies need better support?

"No. Even though the market isn’t entirely deregulated, it looks better than before. Neither of them depends on government subsidies. They have fundamentally competitive business models."