Lithuania could emerge as one of Europe’s leading technology hubs within the next five years, provided it makes a decisive push into artificial intelligence, according to a new study by Unicorns Lithuania, Invest in Lithuania, the country’s investment promotion agency, reported on January 23.

The analysis suggests that by 2030 the country’s startup ecosystem could triple in size, double its workforce and generate an additional €5bn in tax revenue. Reaching that scale, however, would depend on targeted public backing for AI focused companies, requiring an estimated €270mn in state investment over the rest of the decade.

Mantas Katinas, chair of Unicorns Lithuania, said the sector had already moved well beyond its early stage and was now delivering tangible economic returns. Last year alone, startups contributed close to €0.5bn in taxes, while the overall value they generate for the economy is approaching €2bn.

“Through this study, we wanted not only to understand the current state of the country’s startup ecosystem but also to assess its potential and present clear recommendations on how to unlock it. The results are concrete, data-driven proposals for actions needed to achieve an even stronger breakthrough and tangible value for the country. We hope they will contribute to shaping strategic policy and making the decisions that are needed. Lithuania’s economic future and national security depend on the success of our startups and high-tech sector,” Katinas said.

Yet the study warns that the ecosystem may be approaching a bottleneck. Unicorns Lithuania chief executive Gintare Verbickaite said much of the sector’s expansion so far had been driven by founders themselves, often without significant external backing.

“That phase is over. The study reveals a worrying trend: while existing startups are growing impressively, very few new ones are emerging. We’ve hit a ceiling, caused by a double challenge. On one hand, young companies still struggle to attract early-stage capital. On the other hand, funds investing at this stage say the opposite, they see a lack of strong, investment-ready teams,” Verbickaite said.

To break that deadlock, the study calls for action at the earliest stages of company creation. Its recommendations focus on encouraging entrepreneurship among young people, building a regulatory environment that favours innovation and ensuring sufficient seed and pre seed funding.

The study highlights the fiscal returns already generated by public support for startups. Between 2017 and 2024, Lithuania channelled around €158mn into the sector indirectly through venture capital funds. Over the same period, startups paid €1.8bn in taxes.

Lithuania is currently home to more than 1,100 startups and startup born technology firms, employing over 20,000 specialists.