Commission proposes new European Innovation Act to help innovative European ideas grow and compete globally

Today, the Commission proposed a new European Innovation Act to help Europe's most innovative ideas be developed, financed and scaled up in Europe. A key initiative under the EU Startup and Scaleup Strategy and the Competitiveness Compass for the EU, the proposal will strengthen the EU's long-term competitiveness, prosperity and technological sovereignty.

Europe possesses an abundance of world-class research, talent and creativity. However, innovators face different rules across EU countries and frequently struggle to attract funding. As a result, ideas developed in Europe are too-often turned into economic success by others, and elsewhere. The European Innovation Act aims to change this by making it easier for innovative European companies to grow across borders and compete globally.

Strengthening the EU innovation ecosystem

The proposal focuses on addressing two main challenges holding back innovation in Europe.

First, it will help innovative companies access financing. Many startups and scaleups have innovative ideas, patents and other intellectual property, but these assets are often difficult to value, which makes it harder to attract investment.

The European Innovation Act will promote a common EU framework to value intellectual property. It will also create a digital marketplace connecting buyers and sellers of intellectual property and offer expert support to help companies bring their ideas to the market.

These measures are expected to generate around €35 million in administrative cost savings and unlock €10.2 billion per year in additional financing through IP-backed venture capital and debt.

Second, it will establish a common procedure for research and development (R&D) procurement, providing greater legal certainty and helping new technologies reach the market faster, including technologies that can help address shared societal challenges, such as health, education and clean mobility. It will also make it easier for public buyers from different Member States to jointly carry out R&D procurements.

These measures are expected to generate €1 billion per year in savings for public buyers, and €25.92 billion in additional annual profits for companies.

A more innovation-friendly regulatory framework

In parallel with the European Innovation Act, the Commission will help innovators accelerate the transformation of innovative ideas into market solutions through a specific proposal on regulatory sandboxes.

Regulatory sandboxes enable companies, researchers and public authorities to test new products, services or technologies for a limited time in a controlled setting and under the supervision of regulators. This helps innovators understand how rules apply in practice, while giving authorities an understanding of how rules may need to be reviewed.

Regulatory sandboxes already exist in some areas of EU law, but there is no common approach across Europe, which creates fragmentation and uncertainty.

The new proposal for a Council Recommendation aims to change this by creating a common EU reference framework for regulatory sandboxes in areas not yet covered by EU legislation. It will build on lessons learned in both Member States and existing EU initiatives. This will give innovators more room to test new solutions, while ensuring that public interests remain protected.

For more information

Questions and answers

Factsheet on the European Innovation Act

Proposal for the European Innovation Act

Proposal for a Council Recommendation on regulatory sandboxes

EU Startup and Scaleup Strategy - Research and innovation