Europe has the talent, ideas and ambition to be a global leader in innovation. Across the globe, we can see European start-ups transforming entire industries and often setting international standards. But too many of these companies, after launching in the EU, are forced to scale-up their ideas elsewhere.
A complex regulatory environment, fragmented national markets, insufficient access to capital and a lack of strategic coordination are among the many causes forcing EU innovators to search for opportunities in other markets to scale-up, such as Asia and the US.
During my previous mandate at the European Parliament, I published a report on “Increasing Innovation, Industrial and Technological Competitiveness through a Favourable Environment for Start-ups and Scale-ups,” which was adopted with a strong political backing.
The report identified barriers for European start-ups, including heavy regulatory burdens, a lack of harmonised definitions across Member States, limited access to equity financing, and insufficient talent retention mechanisms. These challenges are now echoed at the highest political level, including in the Draghi report, where innovation has been placed at the centre of Europe's future competitiveness.
European solutions for global success
There are many ways that we, in the EU, can support European innovators. A harmonised EU-wide definition for “start-up” and “scale-up” is essential for enabling targeted policies and financial support. Today, entrepreneurs must navigate 27 different regulatory systems, which undermines cross-border growth and discourages investment. Streamlining administrative procedures and simplifying compliance across the Single Market is critical.
This article is part of The Parliament's latest policy report, "Building a competitive Europe."
Equally critical is the need to improve access to capital. Important instruments like the European Innovation Council, InvestEU and the European Investment Fund are in place, but they must become more accessible, faster and better adapted to the real needs of early-stage and high-growth companies.
Talent retention must also become a policy priority. We cannot afford to train the brightest minds in Europe only to watch them take their ideas and skills to the US or Asia. Europe needs to create the conditions to keep talent here, by ensuring opportunities for scaling, building innovation clusters, enhancing collaboration and creating attractive career and funding pathways for EU researchers and entrepreneurs.
The progress of the EU Startup and Scale-up Strategy and the forthcoming Innovation Act is vital for the industry. The European Commission has a unique opportunity to bring together fragmented investment regimes, unlock public-private financing and create an innovation framework that aligns with Europe’s digital, green and industrial goals.
After a decade of countless efforts, the unitary patent was finally created in 2023. This crucial tool for European innovators is already working and allows a pan-EU protection for their inventions.
In a recent visit to the European Patent Office (EPO) in Munich, I was pleased to hear that in less than two years of implementation, the benefits of the unitary patent are already visible. The cost reduction is significant for young inventors, start-ups and SMEs who now pay 30 per cent less in administrative and registration fees to protect their technologies. The EPO is now observing a higher uptake by SMEs and Universities, proving that this is the right path forward.
Supporting innovation is the backbone of Europe’s competitiveness, resilience and strategic autonomy. The EU’s innovators, start-ups and scale-ups are essential to achieving technological sovereignty and reducing dependencies in critical sectors.
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