The European Innovation Act aims to strengthen Europe’s ability to turn research and innovation into business growth. The proposal focuses on better use of intellectual property, a common framework for R&D procurement and improved conditions for innovative companies to access finance and cross-border opportunities, with particular relevance for SMEs.
On 9 September, the European Commission presented its proposal for a European Innovation Act. Announced in the EU Startup and Scaleup Strategy, the proposed regulation forms part of the broader agenda set out in the Competitiveness Compass.
The proposal seeks to address a persistent weakness in Europe’s innovation economy: the EU generates high-quality research but does not consistently translate it into businesses able to grow and compete internationally. Fragmentation across national markets and limited access to finance remain significant constraints, particularly for firms seeking to scale beyond their home Member State.
A central pillar of the proposal is making intellectual property easier to use in raising finance. Patents, proprietary technologies and other intangible assets can represent much of an innovative company’s value, yet inconsistent approaches to valuation make that value difficult to assess. The proposal would give the European Union Intellectual Property Office (EUIPO) a dedicated competence centre to develop a voluntary EU framework for valuing and disclosing IP assets, collect evidence on IP-backed transactions, and help financial institutions design instruments backed by intellectual property.
The proposal establishes a harmonised EU framework for the public procurement of research and development, including pre-commercial procurement. It provides for contracts to be awarded to multiple providers and for competing solutions to be assessed across successive development phases, subject to the exceptions set out in the proposal. It also introduces common rules for joint procurement by public buyers, including those in different Member States. A common framework for R&D procurement could help public authorities create demand for innovative solutions and give businesses greater opportunities to participate across borders. Its value for SMEs, however, will depend on procedures that are proportionate to the size and risks of the contracts, clear rules on the ownership and use of results, and timely payments throughout the development process.
As the European Parliament and the Council will proceed to examine the proposal, particular attention should be paid to how the new proposed EU-level tools interact with European funding and national funding schemes, how advisory support will be delivered, and whether firms of different sizes and capabilities will be able to benefit from them.