José Manuel Barroso, the former President of the European Commission, urged European governments to embrace open digital markets to allow entrepreneurs the capacity to innovate and grow.
Barroso, now non-executive chairman of Goldman Sachs, bemoaned the fact that Europe has "28 mini-markets" instead of an open market system like the U.S.
He went on to say, "European governments should try and support the plans that the European Commission has put forward to have a fully integrated digital market.
"All of these digital revolutions will impact all sectors of our lives. From health conditions, to work and everything else, so we need new policies to increase the flexibility and mobility in our societies," Barroso added.
Barroso also explained that the digital industry would most likely succeed regardless of government action, or indeed inaction, as it is driven by technology. Further to this, he argued that we are now starting to see clusters of innovation throughout Europe and the growth will be exponential.
He added that there was no doubt the result of the U.K. referendum in June further complicates the industry's outlook.
"I was very disappointed because I think all of us want more open societies and open economies so to have Britain going out of the European Union is certainly bad news. I believe for freedom of movement, it is better that we all share this internal market with more than 500 million people.
"The most progressive people in London were extremely disappointed with the result of the Brexit referendum," Barroso concluded.
Daniel Saks, a co-founder and co-CEO of AppDirect, joined Barroso on stage in Lisbon and argued that in order for start-ups to prosper, governments in Europe and elsewhere could follow the trial and error attitude adopted in Silicon Valley.
He explained, "For start-ups, we really want to innovate, we want to push the boundaries and I think in order to do that governments need to be able to take risk. Culturally there is a big difference between Silicon Valley and elsewhere in terms of embracing failure and experimentation."