With a rich history of scientific discoveries, a diverse talent pool, supportive policies, and a culture that embraces creativity, Europe has become a hotbed for innovation and a catalyst for economic growth. How do initiatives like the European Innovation Council fuel the growth of Europe's innovation ecosystem?
In recent years, Europe has already welcomed over 150 venture-capital-backed unicorns, including Germany's neobank N26, Lithuania's online used-clothing marketplace Vinted, and France's healthcare scheduling service Doctolib. Governments and policymakers of the European Union have extended their support and have implemented programs and policies to support entrepreneurship, R&D, and technology transfer. Initiatives like the European Innovation Council (EIC), Digital Single Market, and national innovation strategies provide funding, infrastructure, and regulatory frameworks to fuel innovation and create an enabling environment for businesses to thrive.
For centuries, the European innovation ecosystem has been characterised by a collaborative and interconnected network of stakeholders that work together to drive technological advancements and shape the future. This ecosystem encompasses a wide range of players, including entrepreneurs, start-ups, research institutions, universities, corporates, investors, and government entities, all contributing to the innovation journey.
While Europe has long been associated with successful B2C start-ups, there has been a notable shift towards B2B start-ups achieving billion-dollar valuations for companies like Personio, UiPath, and Klarna.
"European start-ups are excelling, especially in the B2B segment, due to what we see as the region’s technological advantage and the early value creation that comes from customer relationships."—Dr. Hendrik Brandis, Co-Founder and Partner of Earlybird Venture Capital.
The European innovation ecosystem: Key pillars
Research and development (R&D) form a vital pillar of the European innovation ecosystem. While Europe itself boasts world-class research institutions and universities that conduct cutting-edge research across various disciplines, collaborative initiatives such as Horizon Europe, the European Research Council, and the European Institute of Innovation and Technology (EIT) promote cross-border research collaborations and support the commercialisation of scientific discoveries.
Start-up hubs have emerged in cities like London, Berlin, Stockholm, Paris, and Barcelona, attracting talent, and investment, and fostering a vibrant start-up ecosystem. These hubs offer a conducive environment for start-ups, providing access to mentors, incubators, accelerators, and a supportive community of like-minded entrepreneurs.
European Innovation Council: Powering the European innovation ecosystem
Europe also offers various funding mechanisms, including public grants, venture capital, angel investments, and public-private partnerships. The European Innovation Council is Europe’s flagship innovation programme to identify, develop and scale up breakthrough technologies and game-changing innovations The EIC has been established under the EU Horizon Europe programme. It has a budget of €10.1 billion to support game-changing innovations throughout the lifecycle from early-stage research, to proof of concept, technology transfer, and the financing and scale-up of start-ups and SMEs.
The EIC Accelerator, part of Horizon Europe, provides funding and support to start-ups and SMEs with innovative, game-changing products, services, or business models. It aims to help them create new markets or disrupt existing ones globally.
The program offers both grant funding and direct investment options. Grant funding of up to €2.5 million is available for innovation activities in the technology readiness level (TRL) 5-8, while direct investment of up to €15 million is provided for market deployment at TRL 9, following a "patient capital" approach.
Projects can be submitted through the EIC Accelerator Challenges, focusing on predefined topics with a budget of €524.7 million in 2023, or through the EIC Accelerator Open, open to proposals in any field of technology, with a budget of €613 million in 2023.
Successful applicants gain access to extensive support, including tailor-made Business Acceleration Services (BAS), global partners, coaches, mentors, expertise, training, and a vibrant innovation ecosystem. The Accelerator recently selected a new group of deep tech start-ups for funding and investments during its June 2023 cutoff.
The EIC Accelerator provides a unique opportunity for ambitious start-ups and SMEs to secure funding and benefit from comprehensive support to scale and succeed in their innovative endeavours.