Later today, the European Commission will send a communication to the EU Parliament, the European Council and other bodies to present its plans and a timeline to rejuvenate its efforts to catch the global wave of deep tech innovation (and play catch-up with the US and China).
Bloomberg has already lifted the veil about what's being presented this afternoon after earlier drafts were picked apart by other publications, but Tech.eu got its hands on the latest official communication draft and weeded through the documentation to filter out the noise.
Here is our selection of the key 10 elements of the EU's plan for a "New European Innovation Agenda":
1) More tens of €billions in funding for startups
The EU wants to try and ensure European deep tech startups can't compete on a global level by sheer lack of financing.
The plan is mobilise approximately €45 billion of funding for deep tech scale-ups by 2025 from "untapped sources of private capital".
To make this possible, a debt-equity bias reduction allowance (DEBRA) on corporate income tax would be put in place in an effort to increase the availability of equity.
2) More funding for late-stage funds, too
To further address the "scale-up gap for European deep-tech companies", the Commission will expand the European Investment Fund's European Scale-Up Action for Risk Capital (ESCALAR) mechanism under the InvestEU programme. This expansion, it hopes, will attract more private funds and institutional investors in particular, by complementing VC equity with 'quasi-equity' that comes with a reduced risk profile.
This action is scheduled for next year.
3) A fresh Listings Act
In tune with the objectives of the European Commission’s capital markets union Action Plan (originally launched in 2015, more details here), the EC intends to propose a Listings Act in Q4 of this year.
The big idea behind this one is to simplify both initial and ongoing listing requirements for select types of companies, reduce costs and to provide more investor protection and 'market integrity'.
In addition, to allow founders and families to retain control post-listing, the proposed Listing Act may also include a "minimum harmonisation of national legal regimes relating to Dual Class Share structures across the EU".
4) More (fire)power to women
The plan doesn't ignore one of European tech's biggest problems, which is the lack of diversity issue.
The European Commission intends to debut what it calls an "innovation gender and diversity index" in the beginning of next year to gather and study data on both the founder/operator side and the investment side of the equation. The idea behind is that better information will lead to improved policy on that front, which is hard to argue against.
A fresh 'women entrepreneurship and leadership scheme' will also be established in Q2 2023 to support early-stage, women-led tech startups including through an enhanced ‘WomenTech EU’ call.
Programmes such as the EIT’s Women2Invest are meant to further support efforts to increase diversity by helping investors connect with, and recruit from a more diverse pool of talent.
5) Stock options!
Don't hold your breath for an immediate harmonised approach across the EU on stock options, but at last some movement.
The European Commission's plan is to establish a working group on stock options under the EIC Forum to (finally) "tackle the administrative barriers that currently limit the uptake of employees’ stock options across the EU".
It's a tame first effort, in the first instance only meant to gather data, exchange information and share best practices between EU Member States and the Commission. It's scheduled to kick off later this year.
6) The never-ending quest for talent
One of the flagship actions of the plan involves "fostering, attracting and retaining deep tech talents".
To that end, the European Institute of Innovation & Technology (or EIT) will advance an initiative to target 1 million deep tech talents over a 3-year period across all EU Member States.
In addition, the EIC and the EIT will launch an innovation intern scheme in Q3 2023 (targeting hundreds of researchers and students), while the Commission intends to design an "EU Talent Pool', scheduled for launch by mid-2023, that is meant to increase the mobility of skilled individuals towards and within Europe through international recruitment.
7) Valleys of deep tech innovation as far as the eye can see
The Commission's ambition is to strengthen the ties between different innovation ecosystems across the European Union.
To be launched by the end of 2023, the Commission intends to identify up to 100 regions in the EU committed to "enhance the coordination and directionality of their R&I investment and policies, at regional level".
At least €10 billion will be made available to Member States for this effort, along with €100 million from Horizon Europe and €70 million from the 'Interregional Innovation Investments' instrument.
8) Bolstering 'domain-specific' ecosystems
The European Commission has committed to boosting breakthrough innovation in renewable and low carbon hydrogen, a key technology for breaking the reliance on fossil fuels. Drawing on a €200 million top-up from Horizon Europe, the number of 'Hydrogen Valleys' in the EU will be doubled to reach a total of 50 by 2025.
The plan also mentions more than €43 billion worth of investment to support the policy ambitions of the EU Chips Act in the period up to 2030, in a continued effort to bolster Europe’s competitiveness and resilience when it comes to semiconductor technologies and applications.
9) Regulatory sandboxes
The European Commission will issue a guidance document in H1 2023 that will "clarify relevant use cases of regulatory sandboxes, test beds and living labs" in order to boost experimentation within the EU (by both policymakers and innovators).
A couple of sector-specific initiatives:
- a new open innovation test bed in renewable hydrogen in 2023
- The Commission will launch testing and experimentation facilities for AI innovation
- The Commission will also support the creation of the GovTech Incubator in 2023
10) Policy, informed by data
Kicking off with an exploratory report on definitions related to startups, scale-ups and deep tech innovation during Q1 2023, the Commission's plan is to develop "robust, comparable data sets and a common data taxonomy" that can inform policies at all levels across the EU.
The big idea here is to establish a set of indicators that can help analyse and model innovation ecosystem policies at a regional, national and European level.
You can follow the press conference where the 'New European Innovation Agenda' will be presented live here at 15:00 CEST.