Low investment, lackluster competitiveness and anemic growth rates have taken the swagger out of Europe's step in recent years and more needs to be done to get the region back on track, according to the deputy chair of Swedish investment company Kinnevik.
"It's pretty clear that the investment level has been low in Europe for quite some time. We've lost out quite a lot in terms of growth opportunities and there has been too little reform," Anders Borg told CNBC on Wednesday.
"I know that people are tired of austerity but the key here is competitiveness. We might have focused too much on austerity and public finances and maybe too little on entrepreneurship and the business climate," he added.
Borg is the former finance minister of Sweden and as such, knows more than most about structural reforms, fiscal policy and labor markets that are required in much of Europe and particularly the euro zone.
He said more work needed to be done in terms of reform. "It's pretty clear that Europe needs a lot of structural reforms if we're going to pick up. We need a change of policy, we need more flexible labor markets and better business environments."
A lack of funding for small and medium-sized businesses has been largely blamed for the region's slow return to growth, which has been sluggish at best. The latest data in February showed that the euro zone economy grew 0.3 percent in the last three months of 2015, from the previous quarter.
Borg agreed that Europe's banking sector remained "weak" and said efforts to strengthen the region's financial system with a banking union, which means more supervision and regulations for banks, put more pressure on the sector.
"It hasn't been properly recapitalized, particularly in southern Europe, the countries are weak so they can't do it. Banking union is a burden for them with tighter supervision and increasing demands. I don't think we should think about the banking sector as the one which is providing energy and growth to the economy, particularly not in southern Europe."
He said the European Central Bank was "doing the right thing" in terms of providing liquidity to the region in the form of its trillion-euro quantitative easing program but that in the long-run, the banks would need to be recapitalized "and that will be very difficult."
"So I don't think we should expect growth in southern Europe to be particularly vibrant. We can be happy if it's sideways and stable."
Remarking on Europe's tech sector as some of the region's leading companies in the sector, ARM and ABB reported solid earnings on Wednesday, Borg said that such companies needed support to grow outside of Europe.
"We need to see companies growing outside of Europe, particularly if they are global, if their technology is going to be everywhere. ABB with its robotics is obviously going to be a new economy on a global scale so they have to grow outside. If you have global (gross domestic product, GDP) growth at 3 percent and the emerging markets (growing at) 4, 5 and 6 percent then it's pretty obvious that that's where you'll see most of the growth."