A new push for Europe’s innovation and start up landscape

Europe stands at a decisive moment for its innovation ecosystem. Yet, it is falling behind global competitors in transforming research excellence into market‑ready products and scaling successful companies. As our Opinion notes, “Europe needs to strongly reinforce innovation and research and has a lot of catching up to do when it comes to commercialising the product of this innovation.”

The upcoming European Innovation Act (EIA) and the proposed 28th Regime are important steps, but not enough on their own. We call for a “rebirth of the European Market Act” to restore a functioning, uniform single market and remove the bureaucratic barriers that currently slow down start‑ups and scale‑ups across the EU.

European Innovation Act: a chance for simplification

The European Innovation Act (EIA) is expected to introduce a 28th Regime, a voluntary, EU‑wide legal framework for start‑ups and scale‑ups. If designed well, it could provide across‑cutting simplifications in taxation, licensing and funding, while replacing fragmentation with uniform rules across all Member States by improving access to venture capital and EU programmes, it could also support deep‑tech and capital‑intensive sectors. In addition, a modular system of criteria could help identify “ready for growth” companies.

However, we warn that if the 28^th regime is not applied consistently, it could increase fragmentation rather than reduce it.

Furthermore, strengthening Europe’s start‑up ecosystem goes beyond regulatory simplification alone. This is why the Opinion also calls for a clearer assessment of how universities support entrepreneurship, including through a ranking of founder‑friendly universities, a stronger role for research and technology organisations and the European Institute of Innovation and Technology, and a female founders initiative to address persistent gender gaps in entrepreneurship.

Finally, it calls for EU‑wide regulatory sandboxes for testing innovations, allowing companies to test innovative solutions in a controlled and predictable environment before scaling them across the Single Market.

A New European Market Act: the central proposal

The most ambitious recommendation in the Opinion is the call for a Restart European Market Act, a comprehensive legislative package to restore the Single Market’s integrity.

Key elements would include binding obligations for Member States to ensure uniform implementation, supported by the use of more regulations and fewer directives.

The Opinion also proposes an innovation stress test for new legislation, alongside an AI‑based monitoring of gold‑plating and fragmentation and an EU‑wide blacklists and benchmarks of national implementation quality. 

In addition, it calls for a stronger role for the Regulatory Scrutiny Board, to ensure higher regulatory quality and greater consistency across the Single Market.

This would enable a Single Market that is predictable, fast and innovation‑friendly.

Best Practices and Administrative Modernisation

Several Member States offer positive examples of how national frameworks can support start‑ups and scale‑ups in practice. 

Estonia is highlighted for its fully digital procedures and e‑residency system, which allow companies to be registered within hours. Ireland stands out for its strong and well‑connected innovation infrastructure, while the Netherlands, Sweden and Germany are recognised for offering transparent and predictable funding environments. Czechia is noted for adopting its own dedicated Startup Act, and Austria for providing comprehensive business support services, including a start‑up service and a global export service through the WKO.

The EU Commission should continuously publish best‑practice documentation and location rankings to drive competition among Member States.

Financing and Public Procurement: unlocking growth

The Opinion underlines that start‑ups continue to face major obstacles when trying to access finance and public procurement opportunities. To address these barriers, it calls for a more structured approach to venture capital access, alongside greater recognition of intellectual property and certified business plans as viable forms of collateral. It also recommends simpler financing models inspired by IPCEI‑type schemes (Important Projects of Common European Interest), as well as the creation of EU‑labelled, risk‑based guarantee instruments to crowd in private investment.

On the demand side, the opinion argues for preferential access to public procurement for companies identified as “ready for growth”, helping them scale through real market opportunities. At the same time, it stresses the need to safeguard Europe’s strategic interests by introducing repayment obligations when EU‑funded scale‑ups are sold or relocated outside the EU.

Entrepreneurship in education

Finally, we underline the importance of embedding entrepreneurship more deeply into European education systems. Entrepreneurial skills should be developed early and more systematically across learning pathways. In this context, we encourage wider use of the European Entrepreneurship Education Charter as a common reference framework. The Opinion also proposes innovation internships for EU Commission officials and a stronger integration of dual vocational training models, such as Austria’s WIFI system, which successfully combine education with hands‑on business experience and support entrepreneurship in practice.

Conclusion

Europe must act decisively to remain competitive in a world of rapid technological change. The European Innovation Act can be a catalyst, but only if accompanied by a broader overhaul of the Single Market and a commitment to reducing administrative burdens.

The vision is bold: a Europe where start‑ups can scale seamlessly across borders, where innovation is rewarded, and where the single market once again becomes a driver of global competitiveness.

By Paul Rübig, EESC Employers' Group member and Rapporteur of INT/1112 EU Startups and scale up strategy - with a focus on European Innovation Act.