Upcoming EU Initiatives for Start-ups
1. European Innovation Council (EIC) 2024 Work Programme
We mentioned about the EIC earlier in this tribute and so the EIC 2024 Work Programme, adopted by the Commission, earmarks over €1.2 billion for strategic technologies and scaling up companies. This initiative focuses on deep-tech innovations in critical fields such as generative AI, space, critical raw materials, semiconductors, and quantum technologies. The EIC Fund, with a capital injection of €585 million, will leverage over €2 billion in new investments, primarily benefiting SMEs and start-ups.
2. Mobilisation of €45 Billion for Deep-Tech Scale-Ups
Under the “New European Innovation Agenda,” the EU aims to mobilise approximately €45 billion of funding for deep-tech scale-ups by 2025. This funding will come from untapped sources of private capital. To facilitate this, a debt-equity bias reduction allowance (DEBRA) on corporate income tax is proposed to enhance the availability of equity for start-ups.
3. Expansion of ESCALAR under InvestEU Programme
The European Investment Fund’s European Scale-Up Action for Risk Capital (ESCALAR) mechanism will be expanded under the InvestEU programme. This expansion aims to address the scale-up gap for European deep-tech companies by attracting more private funds and institutional investors, thus complementing VC equity with quasi-equity.
4. Proposed Listings Act
In alignment with the European Commission’s capital markets union Action Plan, a Listings Act is proposed to simplify listing requirements for certain companies. This act is aimed at reducing costs, enhancing investor protection, and providing more market integrity. It includes a possible minimum harmonization of national legal regimes related to Dual Class Share structures across the EU.
5. Support for Women Entrepreneurs and Leadership
Acknowledging the diversity issue in European tech, the Commission plans to introduce an innovation gender and diversity index and a new ‘women entrepreneurship and leadership scheme’. This initiative will support early-stage, women-led tech startups, including through an enhanced ‘WomenTech EU’ call.
6. InvestEU Programme
The InvestEU Programme, following the Investment Plan for Europe, aims to trigger over €372 billion in investment from 2021 to 2027. It focuses on long-term funding, innovation, job creation, and economic recovery. InvestEU will have a budgetary guarantee of €26.2 billion, leveraging private and public funds across four policy windows: sustainable infrastructure, research, innovation and digitisation
- Startup Europe (HORIZON-EIE-2024-CONNECT-01-02): This upcoming project under Horizon Europe aims to increase the market footprint of European start-ups in strategic digital technologies and deep tech innovation. It seeks to enhance connections of start-ups to local and European ecosystems and markets, focusing on AI, Cybersecurity, Blockchain, IoT, and Fintech, among others.
- Target Group and Action Focus: The initiative targets start-up ecosystem builders, venture capital entities, accelerators, incubators, and business angels. It emphasizes cross-border acceleration activities and includes specific attention to start-ups in ‘moderate’ or ‘emerging’ innovator countries and regions.
- CONNECT – Interconnected Innovation Ecosystems (2023/24): This action underlines the importance of an inclusive and collaborative systemic approach to innovation. It aims to strengthen cooperation between innovation players to support innovative companies contributing to a competitive, sustainable, and resilient EU.
- Holistic Package of Actions: The initiative offers a comprehensive set of actions to enhance innovation ecosystems across the EU. This includes fostering innovation in deep tech, ensuring the inclusion of diverse innovation players, mobilizing policies, and enhancing innovation procurement initiatives.
- Creation of Linkages: A key aspect of this initiative is promoting connections among all key innovation stakeholders, including SMEs, start-ups, investors, industry, public and private buyers, and innovation hubs. This aims to increase innovation cohesion and foster partnering among innovators across the EU and associated countries.
Conclusion
The EU’s multifaceted approach to supporting start-ups demonstrates its recognition of the sector’s importance. By implementing these initiatives, the EU is not only investing in the future of its economy but also ensuring its competitiveness on the global stage. The success of these initiatives will be pivotal in shaping a resilient, innovative, and prosperous European entrepreneurial landscape.