The U.S.-China trade conflict is leading the world toward a "very bad situation," and Europe should invest in technological innovation to prepare for further division, Swedish billionaire Marcus Wallenberg said Friday.

Speaking at the Salzburg Summit in Austria, Wallenberg — a fifth-generation member of the Wallenberg dynasty — said the Sino-U.S. trade war was "extremely unfortunate."

"It's obvious that the big powers, China and the United States, look upon the rulebook in a very different way," he told CNBC's Geoff Cutmore at the event.

"All history tells us is that protectionism will lead nowhere and usually into a very, very bad situation, and unfortunately I think what we're seeing right now is actually going completely in the wrong direction."

The Wallenberg family's business empire includes holdings in AstraZeneca, Ericsson, Saab and Nasdaq, and is worth 250 billion euros ($278 billion), according to the Financial Times.

Marcus Wallenberg himself is the chair of private banking group SEB, as well as being the chair of asset manager FAM and the director of pharmaceutical giant AstraZeneca's board.

He told CNBC Friday that the delay in finding a resolution to the trade conflict was "not only one side's fault."

"The trade relationship between the U.S. and China is immensely important for both sides, so hopefully they will come to a position where they actually really try to save it," Wallenberg said.

What was worrisome, he added, was that even though both nations were trying to solve the situation, big questions remained around the future of their trading relationship.

"China is a country that has lived in their thought process and their policies for decades, (whereas) the U.S. and Western Europe turn around their political situation every four or five years," he said. "It's a very different game that we're seeing."