Briefing - Scaling up European Innovation - 04-06-2025
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The European Union (EU) is seeking to boost its competitiveness to help ensure the well-being of its society in the face of global challenges. Central to this objective is the EU's innovation ecosystem, which has fallen behind the United States (US) and ChinaBriefing - Scaling up European Innovation - 04-06-2025
The European Union (EU) is seeking to boost its competitiveness to help ensure the well-being of its society in the face of global challenges. Central to this objective is the EU's innovation ecosystem, which has fallen behind the United States (US) and China. As innovative European companies grow, they struggle to attract the necessary technical and financial support within the continent. The European Commission plans to put forward a legislative proposal for a 28th regime as part of a programme of measures to boost the EU's innovation ecosystem. The European Parliament's Committee on Legal Affairs (JURI) is preparing a legislative-initiative report to inform the development of this proposal. This briefing, produced at the request of the committee, seeks to support its work on the file. The research identified four issues that are relevant for EU action: (1) the EU financial system has a low appetite for risk; (2) innovative companies struggle to attract workers (within the EU and beyond) with the relevant skills; (3) innovative companies face a high cost of failure and/or restructuring; and (4) there is high variation in laws affecting companies across the EU. While the proposed Savings and Investments Union could help to address the immediate and pressing demand for capital from innovative European companies, other measures such as the 28th regime could be complementary and offer European added value. Establishing one common set of EU-wide rules and introducing an EU stock option plan could boost the regime's attractiveness for innovative European companies. Embedding links to the EU innovation ecosystem and 'European preference' incentives could also be beneficial. Levelling the playing field for innovative European companies, particularly by reducing the period of time to establish a company, complete funding rounds and advance through the lifecycle, could help to attract venture capital and boost the number of innovative scale-ups. Source : © European Union, 2025 - EP Read more