EIF debate: a New European Innovation Agenda

This EIF debate will focus on the New European Innovation Agenda (NEIA), adopted on 5 July 2022, which aims to position Europe at the forefront of the new wave of deep tech innovation and start-ups.

With high inflation and increasing risks for the economy, investments to fuel digital transformation becomes more important than ever. Companies must digitalise to reduce costs, become more efficient, increase productivity and improve customer experience, but also to attract and retain talent. The EU and national governments can play a fundamental role in fostering innovation and help businesses thrive and create jobs.

Small and medium-sized enterprises (SMEs) are the backbone of Europe’s economy, representing 99% of all businesses, employing around 75% of the workforce and accounting for 50% of GDP, but are also most likely to trail behind in digital transformation. Unicorns and startups were all born SMEs, but then not all SMEs are startups, and not all startups are SMEs, due to startups’ exponential growth models vs the traditional revenue-driven organic growth of traditional SMEs. Moreover, SMEs often refuse to share ownership with investors, whereas startups are constantly seeking investors to fuel their growth.

Venture Capital is largely an American invention, making Silicon Valley the major innovation hub world-wide, but 10 years ago it has started to fuel innovation hubs in Europe. As recently stated by the EU Commissioner for Innovation Mariya Gabriel: “The Silicon Valley mission confirmed that Europe has many competitive advantages to lead the 4th wave of innovation. And this mission is an important step in building bridges between Europe and the United States in order to build the future, together.”