The EU has a new European Innovation Act to help European ideas compete globally

The European Commission has proposed a new European Innovation Act to help innovative businesses across Europe turn promising ideas into successful products and companies

The proposal is designed to make it easier for European startups and scaleups to secure funding, expand across borders and compete with businesses from around the world. It forms part of the EU’s wider Startup and Scaleup Strategy and the Competitiveness Compass.

The Commission believes Europe has strong research capabilities, skilled workers and creative talent, but that too many promising ideas struggle to become successful businesses because of fragmented rules and difficulties accessing finance.

Making it easier to fund innovation

One of the main priorities of the proposed European Innovation Act is improving access to finance for innovative companies.

Many startups and scaleups hold valuable intellectual property, including patents and other innovations. However, these assets can be difficult to value, making them less useful when companies are seeking investment.

The new legislation would promote a common EU framework for valuing intellectual property. It would also establish a digital marketplace where buyers and sellers can connect to trade intellectual property.

Companies would additionally receive expert support to help turn their innovations into commercial products and services.

According to the Commission, these measures could save businesses around €35 million in administrative costs and help unlock an estimated €10.2 billion a year in additional financing through venture capital and debt backed by intellectual property.

Faster development through public procurement

The European Innovation Act also focuses on R&D procurement.

The Commission plans to introduce a common procedure for R&D procurement across the EU. This is intended to provide greater legal certainty and help innovative technologies move from development to the market more quickly.

The approach could support technologies aimed at tackling major societal challenges, including healthcare, education and clean mobility.

The proposal would also make it easier for public organisations in different EU countries to work together on R&D procurement projects.

The Commission estimates that the measures could save public buyers around €1 billion each year, while generating an additional €25.92 billion in annual profits for companies.

New approach to regulatory sandboxes

Alongside the Innovation Act, the Commission is proposing a common approach to regulatory sandboxes.

These sandboxes allow companies, researchers and public authorities to test new products, services and technologies in controlled environments under regulatory supervision.

They can help businesses understand how existing rules apply to new technologies, while allowing regulators to identify where regulations may need to adapt.

Regulatory sandboxes already operate in some areas of EU law, but different approaches between countries can create uncertainty and fragmentation.

The Commission’s proposed Council Recommendation would establish a common EU framework for sandboxes in areas that are not already covered by existing legislation.

Strengthening Europe’s position in global innovation

The proposals aim to create a more supportive environment for innovation across the EU.

By improving access to finance, simplifying R&D procurement and creating more consistent regulatory conditions, the Commission hopes more European innovations will be developed and commercialised within Europe.

The measures are intended to strengthen the EU’s long-term competitiveness, support technological sovereignty, and give European ideas a better chance of becoming global successes.