Europe has no shortage of ideas, scientific excellence or entrepreneurial talent. Its persistent weakness lies elsewhere: too many innovations struggle to move from the laboratory to the market, too many promising businesses encounter fragmented rules when they attempt to grow across borders, and too many small and medium-sized enterprises remain disconnected from the expertise, infrastructures and financing needed to innovate.
The forthcoming European Innovation Act seeks to address some of these structural challenges. Announced as one of the flagship initiatives of the EU Startup and Scaleup Strategy, it aims to create a more coherent, economy-wide framework for developing, testing, financing and commercialising innovation across the Single Market.
The timing is far from accidental. Over the past political cycle, the reports by Enrico Letta and Mario Draghi, followed by the Competitiveness Compass and the EU Startup and Scaleup Strategy, have all pointed in the same direction: Europe's challenge is no longer to generate knowledge, but to transform it into globally competitive businesses. Against a backdrop of intensifying global competition, technological rivalry and growing pressure to strengthen Europe's productivity, the European Innovation Act has emerged as one of the centerpiece initiatives of the EU's renewed competitiveness agenda.
Its legislative journey has nevertheless been slower than initially anticipated. Originally scheduled for adoption during the first quarter of 2026, the proposal was subsequently postponed to July and, according to the latest indicative planning, is now expected on 9 September 2026. At the time of writing, however, no official legislative proposal has yet been published. Neither the European Parliament nor the Council has therefore begun examining the file.
While the delays have inevitably generated expectations, they have also allowed a clearer picture of the initiative to emerge. The Commission's preparatory work, the public consultation concluded in late 2025, the Startup and Scaleup Strategy and a draft reportedly seen by specialised media all point in a broadly consistent direction. Although the leaked document itself is not publicly available and the final proposal may still evolve, several key themes already appear likely to shape the forthcoming debate.
Among them are common European definitions of startups, scaleups and innovative companies; a more coherent framework for regulatory sandboxes; easier access to research and technology infrastructures; stronger support for innovation procurement and pre-commercial procurement; improved commercialisation of publicly funded research; and a greater recognition of intellectual property as a strategic economic asset.
Taken together, these elements suggest that the European Innovation Act is not intended to become another funding programme. Rather, it aims to improve the framework conditions that allow innovation to flourish throughout the European economy.
Against this background, five questions appear particularly relevant as Europe prepares for the next stage of the debate.
Innovation beyond the startup ecosystem
One of the first questions will concern the definition of an "innovative company". If eligibility is linked too closely to venture capital, patents or high-growth startups, there is a risk that an important part of Europe's industrial innovation capacity will remain outside the scope of the initiative.
Europe unquestionably needs more breakthrough innovation, deep-tech companies and globally competitive scale-ups. These ambitions are essential to strengthening Europe's technological sovereignty and long-term competitiveness.
At the same time, much of Europe's industrial strength is built on established SMEs operating across manufacturing, services and traditional sectors. Many of these businesses innovate continuously by developing new products, integrating advanced technologies, modernising production systems and adopting more sustainable business models. Their contribution to Europe's competitiveness is no less significant simply because it does not always take the form of a disruptive technology or a venture-capital-backed startup.
The challenge will therefore be to recognise excellence without adopting an unnecessarily narrow understanding of innovation. Supporting breakthrough innovation and accelerating innovation uptake across Europe's wider industrial base are not competing objectives. They are complementary pillars of a stronger and more resilient European economy.
Building on Europe's innovation support ecosystem
Europe has already invested significantly in a broad ecosystem of innovation support structures, including the Enterprise Europe Network (EEN), European Digital Innovation Hubs (EDIHs), technology centres, clusters and, in the future, the EU4Business Network.
The real challenge is no longer creating additional instruments, but ensuring that businesses can effectively navigate those already available.
For most SMEs, the obstacle is rarely the lack of opportunities. It is the complexity of identifying the right combination of research infrastructures, financing instruments, regulatory support, intellectual property services and innovation partnerships at the appropriate stage of their development.
This highlights the strategic importance of horizontal support measures. Innovation increasingly depends on trusted intermediaries capable of combining technical expertise, strategic guidance and territorial proximity. Chambers of commerce and other business support organisations have an important role to play in connecting businesses with European opportunities and translating European policies into concrete investment, collaboration and market deployment.
At a time when discussions on the next Multiannual Financial Framework understandably focus on strategic technologies and industrial priorities, adequate investment in these horizontal enabling structures will be equally important. Europe's competitiveness will depend not only on its capacity to generate innovation, but also on its ability to diffuse and accelerate its adoption throughout the entire economy.
A regulatory framework that enables innovation
Innovation requires investment, but it also requires an enabling regulatory environment.
The challenge will be to strike the right balance between safeguarding legitimate public interests and creating sufficient regulatory flexibility for innovation to be tested and deployed. The effectiveness of regulatory sandboxes will ultimately depend on whether they become genuine environments for experimentation or simply additional administrative layers.
If designed accordingly, they could become valuable instruments for helping innovative companies test new products and services under real-life conditions while engaging constructively with public authorities. Their success, however, will also depend on their accessibility.
For smaller businesses, participation must remain proportionate in terms of procedures, costs and administrative burden. Equally important will be the possibility of developing cross-border experimentation and allowing trusted intermediaries to facilitate participation, particularly where groups of SMEs face similar regulatory challenges.
In the end, Europe's regulatory framework should not simply protect existing markets. It should also help innovative solutions reach them more quickly and with greater legal certainty.
Creating lead markets for innovation
Europe has traditionally focused much of its innovation policy on the supply side, supporting research, technology development and business creation.
Yet innovation reaches the market only when there is demand.
Public authorities can play a decisive role as early adopters and first customers for innovative solutions. Instruments such as innovation procurement, pre-commercial procurement and collaborative development models therefore deserve greater attention, not simply as procurement tools but as strategic drivers of competitiveness.
Creating lead markets for innovation would enable more European companies to scale within the Single Market rather than seeking their first commercial opportunities elsewhere. In this respect, the European Innovation Act could contribute to strengthening Europe's broader demand-side innovation agenda.
From fragmented initiatives to an integrated innovation ecosystem
Europe has developed an impressive portfolio of innovation programmes, funding instruments and support initiatives. Yet, from the perspective of many businesses - particularly SMEs - these often appear as separate and disconnected opportunities rather than as parts of a coherent innovation ecosystem.
One of the most valuable contributions of the European Innovation Act could therefore be to strengthen coordination between existing instruments rather than creating new layers of governance or additional standalone platforms.
Greater interoperability, simpler access and closer cooperation between European, national and regional actors would allow businesses to move more easily from research to testing, from finance to market deployment and from national initiatives to cross-border growth.
Europe has no shortage of strategies, programmes or funding instruments supporting innovation. What it still lacks is a framework capable of connecting them into a coherent system that businesses can genuinely navigate.
If the European Innovation Act succeeds in doing just that, it may be remembered not simply as another industrial policy initiative, but as the moment when Europe shifted its focus from financing innovation to enabling innovation.
Ultimately, Europe's challenge is no longer simply to generate knowledge, but to provide innovators with the conditions to grow, scale and compete globally. Europe has never lacked innovators. What it has lacked is an innovation system.
Ana Sarateanu
Director of Unioncamere Europa