Bratislava and Budapest have little in common with Silicon Valley. Europe’s cognitive elite, however, are clustering in unexpected places. Switzerland and Ireland now share an almost identical concentration of ‘brain business jobs’—at 11.2 per cent of their working-age populations—making them the continent’s twin powerhouses of knowledge-intensive employment. But dig deeper, and the real story emerges in Central Europe’s capitals.
The term ‘brain business jobs’ may sound like management-speak, but it captures something important. The European Centre for Entrepreneurship and Policy Reform (ECEPR) measures employment in highly knowledge-intensive enterprises across four domains: technology (including high-tech manufacturing, engineering, R&D, and pharmaceuticals), information and communications technology, advanced services (head office management, advertising, market research), and creative professions. These are not merely prestigious jobs. They sit atop value chains, generating export revenues and stimulating economic activity through entire economies.
The prevalence of these jobs matters because each percentage point increase in a region’s brain business concentration correlates with a 0.24 percentage point reduction in unemployment. A region with 10 percentage points more of these jobs experiences unemployment 2.4 per cent lower than the European average. High-value positions create demand for suppliers, boost purchasing power through elevated salaries, and generate tax revenues that fund public employment. Knowledge work anchors prosperity.
A capital idea
The ECEPR’s 2025 report and ‘Brain Business Jobs’ index reveals a geographic reshuffling that challenges received wisdom about Europe’s economic geography. Bratislava has reclaimed its position as Europe’s most brain business-intensive region, with 24.5 per cent of working-age adults employed in these sectors. Prague follows at 23.8 per cent, Budapest at 22.1 per cent, and Bucharest at 21.5 per cent. Six of Europe’s top ten regions for brain business concentration are Central European capital cities leveraging abundant talent, lower operational costs, and competitive taxation.
This represents a reconfiguration of Europe’s cognitive geography. Copenhagen and Stockholm, at 20.8 per cent and 19.2 per cent respectively, can no longer claim dominance. Meanwhile, traditional powerhouses face stagnation: Paris, despite hosting 1.1 million brain business jobs in absolute terms—more than any other European region—manages only 14.4 per cent concentration. Size, it seems, is not everything.
Capital cities, unsurprisingly, consistently outperform national averages: Bratislava’s 24.5 per cent versus Slovakia’s 7.2 per cent; Bucharest’s 21.5 per cent versus Romania’s 5.4% per cent; Dublin’s 17.8 per cent versus Ireland’s 11.2 per cent. Knowledge work gravitates to urban centres, intensifying the urban-rural divide whilst undermining political support for the very policies that enable growth. This is not unique to Europe—but it poses particular challenges for a continent that prides itself on cohesion.
Talent is necessary, policy is sufficient
The report introduces a provocative metric: ‘expert density’, measured as the share of engineers and scientists in the adult population. Sweden leads at 13.4 per cent, exceeding the Netherlands (12.5 per cent) and both Switzerland and Ireland (11.9 per cent each). Yet Sweden, despite its educational prowess, punches below its weight—employing fewer people in brain business jobs than its expert density would predict.
Ireland and Switzerland, conversely, punch decisively above their weight. Both nations convert their engineering and scientific talent into brain business employment at rates 1.4 percentage points higher than expected. Estonia (1.3 percentage points above) and Malta (1.6 percentage points above) display similar patterns. The gap, according to the research, reflects, “business-friendly policies and lower taxes.”
The Nordic countries present a cautionary tale. Norway, with 11.4 per cent of adults holding engineering or scientific credentials, underperforms by 1.6 percentage points. Finland and Iceland similarly trail expectations. High taxation and business costs appear to offset educational advantages, driving knowledge-intensive firms—and the jobs they create—toward more favourable jurisdictions. One can educate engineers; persuading them to stay is another matter.
The south also rises
Whilst Central Europe consolidates and the Nordics stagnate, Southern Europe’s trajectory offers hope for economic reinvention. Cyprus has experienced the continent’s most dramatic transformation, increasing its brain business jobs concentration by 136 per cent between 2014 and 2025—from 3.8 per cent to nine per cent of working-age adults. Portugal follows with a 105 per cent increase, doubling its share from 3.8 per cent to 7.8 per cent.
Bulgaria (99 per cent growth), Lithuania (90 per cent), and Croatia (89 per cent) have similarly doubled their concentrations. These nations have transformed their economic structures, developing competitive advantages in IT services, telecommunications, and design—sectors requiring moderate upfront capital but capable of generating substantial value. Malta now leads Southern Europe at 9.4 per cent, leveraging its position to attract head office functions and high-tech manufacturing despite limited engineering talent (8.7 per cent of adults).
This is reinvention in action. Countries once associated primarily with tourism and agricultural production have pivoted to knowledge-intensive services. The transformation required policy changes, infrastructure investment, and a willingness to compete for footloose firms. It demonstrates that trajectories remain malleable—if governments act decisively.
Western malaise
Traditional economic powers face uncomfortable realities. Germany, at 8.3 per cent, has seen its brain business concentration decline from 8.7 per cent three years prior. France, at 6.4 per cent, underperforms its expert density by 1.2 percentage points—Paris’s 14.4 per cent concentration insufficient to offset weakness elsewhere. Belgium (7.3 per cent) and Austria (7.2 per cent) similarly trail expectations.
Luxembourg presents perhaps the starkest warning. Despite 10.8 per cent expert density, it manages just 8.4 per cent brain business concentration—having recorded merely two per cent growth since 2014, the lowest rate in Europe. High costs have stifled expansion despite favourable taxation, demonstrating that competitive policy alone cannot overcome operational expenses. Even tax havens must mind their costs.
The implications are sobering. Western Europe’s traditional advantages—deep capital markets, strong institutions, established industrial bases—are not translating into knowledge economy success. Firms and talent are voting with their feet, migrating eastward and southward to more competitive environments. This is not a temporary adjustment but a structural shift in Europe’s economic geography.
Integration imperative
Europe’s fragmented approach to knowledge-intensive employment occurs as the continent confronts broader competitiveness challenges. The EU’s 2025 Competitiveness Compass, unveiled in January, identifies market integration, regulatory simplification, and large-scale innovation investment as priorities. The diagnosis is clear: 60 per cent of exporting European firms cite intra-EU market fragmentation as an obstacle to business opportunities—rising to 74 per cent among firms with cutting-edge innovation.
Financial integration remains below pre-crisis peaks. Halving this gap could increase cross-border financial flows by three per cent of GDP and boost GDP itself by one per cent. Access to equity finance makes firms 13 percentage points more likely to innovate—yet regulatory barriers and national variations impede capital formation. Europe has the savings; it lacks the mechanisms to channel them efficiently to growing firms.
The brain business jobs index demonstrates how policy fragmentation manifests geographically. Countries with aligned taxation, regulation, and business climates cluster knowledge work effectively; those without watch talent and opportunity migrate elsewhere. Ireland’s recent capitulation on its 12.5 per cent corporate rate—now 15 per cent for firms exceeding 750 million euros in turnover—illustrates the tension between national strategy and international pressure. The minimum tax may level the playing field, but it also removes one of the few levers small countries could pull.
The reinvention challenge
For European regions contemplating economic transformation, the index offers stark lessons. Expert density matters—but policy matters more. Nations can educate engineers and scientists, yet without supportive frameworks, those investments generate returns elsewhere. The 60 percentage point growth differential between Cyprus and Luxembourg since 2014 reflects not educational divergence but policy choices.
Sweden’s rebound from recent crises—climbing back to 10.3 per cent after declines—demonstrates that trajectories remain malleable. Estonia’s achievement of Central Europe’s highest concentration (9.4 per cent) despite its small size shows scale need not determine outcomes. Portugal and Cyprus prove transformation possible even for economies previously focused on tourism and services. Reinvention requires vision, policy coherence, and patience.
Yet the window may be closing. As global minimum tax rates constrain traditional havens and regulatory harmonisation reduces national discretion, Europe’s ability to compete for knowledge-intensive employment will depend increasingly on factors beyond taxation: infrastructure quality, regulatory efficiency, labour market flexibility, and research commercialisation. The Competitiveness Compass recognises these imperatives; whether member states act on them will determine Europe’s standing in the global knowledge economy.
The geography of Europe’s brain business jobs reflects an uncomfortable truth: educated populations are necessary but insufficient. Policy quality separates leaders from laggards. Central European capitals have demonstrated that competitive frameworks can overcome historical disadvantages. Southern Europe has shown that economic structures can be transformed within a decade. Western Europe must now decide whether to learn from these examples or watch its cognitive elite—and the prosperity they generate—drift inexorably elsewhere.
For now, Switzerland and Ireland share the podium. But look at the trajectory, not the snapshot. Bratislava, Bucharest, and their peers are ascending. Stockholm and Paris are treading water. The continent’s knowledge economy increasingly resembles an integrated market where talent, capital, and firms flow toward optimal conditions. Europe’s future will be determined not by past glories but by present policies. The reinvention race is on. Some regions are sprinting; others remain at the starting blocks.
Photo: Dreamstime.
