> ArianeSpace's insistence on not earnestly working to innovate led to them already having had a gap in domestic capability
Yes and no, there are plenty of EU space startups. What Ariane has done is starve them of government funding to build a competitive EU based market. So I'd say it's drawing the investment into a hole.
Just a quick sample of EU space firms I'm aware of:
https://en.wikipedia.org/wiki/Rocket_Factory_Augsburg