A new Act to help European ideas compete globally

A key initiative under the EU Start-up and Scale-up Strategy and the EU Competitiveness Compass, the proposal will strengthen the EU's long-term competitiveness, prosperity and technological sovereignty. Europe has an abundance of world-class research, talent and creativity. Yet innovators face different rules across EU countries and often struggle to attract funding. As a result, ideas developed in Europe are too often turned into economic successes by others, and elsewhere. The European Innovation Act aims to change this, making it easier for innovative European companies to grow across borders and compete globally. Strengthening the EU's innovation ecosystem The proposal focuses on addressing two main challenges holding back innovation in Europe. First, it will help innovative companies access funding. Many start-ups and scale-ups have innovative ideas, patents and other types of intellectual property, but these assets are often hard to value, which makes it difficult to attract investment. The European Innovation Act will promote a common EU framework for leveraging intellectual property. It will also create a digital marketplace connecting buyers and sellers of intellectual property, and provide specialist support to help companies bring their ideas to market. These measures are expected to generate administrative cost savings of around €35 million and unlock €10.2 billion a year in additional funding through venture capital and IP-backed debt. Second, it will establish a common procedure for public procurement of research and development (R&D), 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 procurement. These measures are expected to generate savings of €1 billion a year for public buyers and additional annual profits of €25.92 billion for companies. A more innovation-friendly regulatory framework Alongside the European Innovation Act, the Commission will help innovators speed up turning innovative ideas into market solutions through a dedicated proposal on regulatory sandboxes. Regulatory sandboxes allow companies, researchers and public authorities to test new products, services or technologies for a limited period of time in a controlled setting and under the supervision of regulators. This helps innovators understand how rules apply in practice, while giving authorities insight into where rules might need to be revised. 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 both in member states and in existing EU initiatives. This will give innovators more room to test new solutions, while ensuring public interests remain protected.