Europe spends less of its GDP on research and development than the U.S., Japan, or China. Its R&D intensity has held atroughly 2.1%for years, compared with 3.45% in the U.S. and Japan and 2.6% in China. Yet the continent continues to punch above its weight, generating world-class ideas and breakthroughs: the European Patent Office logged a record number of patent applications last year.
Fortune’s Europe’s Most Innovative Companies ranking, now in its second year and produced in partnership with Statista,showcasesthe businesses helping drive that performance. The list spans 300 companies across 18 countries and 21 industries, highlighting organizations that are pushing boundaries in fields ranging from healthcare and manufacturing to telecommunications, retail, and financial services. Each was evaluated across three dimensions of innovation: product, process, and culture.
Together, the ranking paints a picture of a continent defined by deep industrialexpertise, fresh ambition, and a capacity to reinvent itself. At a moment of rapid technological and economic change, these companies are helping shape Europe’s future.
Europeisn’twinning the AI race, butit’spowering it
Europe maylag behindthe U.S. and China across much of the tech landscape, but it has assembled a formidable semiconductor ecosystem.
ASMLtopsthis year’s ranking. Behind the glass walls of the Dutch company’s cleanrooms, white-coated engineers work with machines precise enough to print features just a few nanometers wide onto silicon, pushing the boundaries of how the world’s most advanced semiconductor chips are built.
ASMLis pushing the AI race forward with two breakthrough innovations. The first is the Twinscan XT:260, a specialized tool built for advanced chip packaging. The second is its High-NA EUV systems, machines that act like ultra-fine laser pencils, printing microscopic chip features that let tech giants pack record-breaking processing power onto a single silicon wafer.
The list also includes Infineon Technologies, NXP Semiconductors, ASM International,STMicroelectronicsand Austria’s Ams-Osram.
Rather than trying to match the U.S. or China in large-scale chip manufacturing, Europe is doubling down on the areas where it already holds a competitive edge, chief among them ASML’s near-monopoly on advanced lithography equipment. This strategy is shaping the EU’s industrial policy. Under the proposed Chips Act 2.0, Brussels aims to strengthen Europe’s semiconductor ecosystem as part of a broader push to boost investment in chips, AI, cloudcomputing,and digital infrastructure.
Lasting legacies
The defining characteristic of this year’s ranking may be its longevity. Many of Europe’s most innovative companies are among itsoldest.
In 1665,a Frenchglassmakerwascommissionedby Louis XIVto produce mirrors for the French crown, including those in the Hall of Mirrors at Versailles. That company,Saint-Gobain, has since remade itself as a leader in sustainable construction materials and now ranks35thon the list.
Plenty of othercompanies were founded not in the last decade,butinthe last centuryor,in a handful of remarkable cases, the century before.Siemenswasfounded in1847 andRolls-Roycein 1904. Incomparison,of the U.S businesses founded since 1994,onlyone-third survived a full decade,according to the Bureau of Labor Statistics.
The list spans 300 companies across 18 countries and 21 industries
Michelin,new to the list this year and already cracking the top 10,was founded in 1832 but was reincorporated as Michelin and atirecompany in 1889.Its breakthrough removable pneumatic tire carried Charles Terront to victory in the world’s first long-distance cycle race in 1891. Today, Michelin is applyingthatsame materialsexpertiseto developing airless Moon boots for the next Lunar Rover.
Nokia’s story is also one ofreinvention.Ranking 22ndon the list,itstarted in 1865 as a paper mill beforetransitioning into rubber product manufacturing,cablesand mobilephones,andtoday builds the 5G networks underpinning the digital economy. Its 160-year run suggests that the secret to longevityisn’tclinging to a successful businessmodel,it’sknowing when to abandon one.
Germany’s industrial machine keeps delivering
If semiconductors are Europe’s technological backbone, Germanyremainsits industrial engine room.The country has more companies on the list than any other (a total of 56) with leaders spanning technology, automotive,engineering,and pharmaceuticals.
Stuttgart-headquarteredBoschhas been reinventing itself since it was founded in 1886,expanding fromits automotive roots into artificial intelligence and hydrogen technology. Its fuel-cell power module for heavy-duty transport,essentially anengine for zero-emission hydrogen trucks, recently won Germany’s Future Prize for Technology and Innovation, one of the country’s most prestigious engineering honors.
Germany’seconomic model traditionallyprioritizedlong-term investment over quick wins, contributing to to this innovative streak. Its network ofMittelstandfirms (SMEs)and its dual system of vocational education and apprenticeships have produced a deep pool ofskilled engineering talent, contributing to the region’s global competitiveness inhighlyspecializedindustries, from precision engineering to advanced chemicals.
While the country faces increasing pressure fromlaborshortages and rising energy costs, Germany’s industrial champions are adapting these traditional strengths to the digital age.
Siemens, ranked11thon the list is a pioneer of smart manufacturing, integrating AI, automation,and digital technologies into its factory operations. The group recently launched its Digital Twin Composer, a tool that builds photorealistic virtual replicas of physical environments, letting engineers test designs before they ever leave the screen, cutting down on the physical prototyping that German manufacturers can least afford right now.
Building better businesses from the inside out
It’seasy to focus onwhatEurope builds,but just as important ishowit builds.Some28 companies, including Adidas, Ingka Group, Heineken, Lufthansa, Richemont,Celonis, Babbel,andKirkbi (Lego), made the list for building innovative cultures.
Adidasencourages designers and engineers to work together through cross-functional hackathons.It’san approach that has paid off. This year, itintroduced theAdizeroAdios Pro Evo 3 running shoe, which is lighter, grippier and more cushioned to help athletes run faster. Two runners recently completed sub-two-hour marathons while wearing them.
Alsoon thelist isIngka Group, the Dutch-headquarteredcompany behindIkea’sglobal retail business.It’scurrentlytrainingroughly30,000employeesand500 leaders in AI literacyinan attempt to ensure AI augments, rather than replaces, the workforce.
Europe may not dominate the tech race, but this year’s list proves it keeps producing the companies everyone else relies on. From the machines that make AI chips tothe factories, networks, and materialspoweringthe global economy.
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