by Giuliana Miglierini

A new piece of legislation adds to the framework supporting the new paradigms set forth by the European Commission: the European Innovation Agenda (EIA) aims to position the EU as a global leading player in innovation, especially in the field of deep techs. These are usually referred to as a combination of physical, biological and digital emerging technologies targeted to develop new, transformative solutions in all areas of economy and society.

Breakthrough R&D and large capital investment are the identified tools to support their development. “We need to boost our innovation ecosystems to develop human-centered technologies. This new Innovation Agenda builds on the significant work done already on innovation in the last years and will help us accelerate our digital and green transition. The Agenda is rooted in the digital, physical and biological spheres and will enable us tackle better burning concerns, such as breaking the dependence from fossil fuels or securing our food supply in a sustainable way.”, said Margrethe Vestager, Executive Vice-President for a Europe fit for the Digital Age.

The five areas of intervention

The European Innovation Agenda is divided in five different flagship areas, for a total of 25 actions.

Startups and scale-up companies will be the central focus of the Agenda and the target of investments by both private capital and institutional investors. Simplified listing rules are planned to support their scaling. The debt-equity bias reduction allowance on corporate income tax would also benefit of a later stage venture capital financing, with expansion of the European scale-up action for the risk capital mechanism under InvestEU. An innovation gender and diversity index and the EIT Women2Invest Programme are other planned actions in the area.

Relevant investments are envisaged to attract and train at least 1 million talents in the field of deep tech and to support women entrepreneurship. Among the planned activities are an innovation intern scheme for startups and scale-ups, and an EU talent pool to help young innovative companies to attract extra-EU specialists. A Women entrepreneurship and leadership scheme and the establishment of a best practice exchange on startup employees’ stock options are also planned. Other initiatives shall support the promotion of an entrepreneurial and innovation culture; these actions will include support to education and innovation practice communities, Erasmus+ alliances for innovation, and a Digital Europe call to train future experts.

Under the regulatory perspective, regulatory sandboxes and experimentation spaces coupled to public procurement are expected to facilitate the development of new ideas. Among the possible experimental approaches mentioned by the EIA there are open innovation test beds in renewable hydrogen, living labs and innovation procurement. This last sector may see the establishment of an Innovation Procurement Specialist Advisory Service.

Guidance will be provided to policy makers on regulatory sandboxes. State aid rules shall also be revised to better support the construction of testing and experimentation facilities, namely in the field of AI innovation.

Interconnections of the different players and the creation of a network of European Innovation Ecosystems will be pursued through “regional innovation valleys”. Interregional innovation projects should benefit of a total budget of €10 billion, that shall also be used to support member states’ efforts towards the integrated use of cohesion policy and Horizon Europe instruments. Among the planned actions is the doubling of the number of Hydrogen valleys in the EU, the creation of a Innospace (a one stop shop for innovation) and the establishment of the EIC ScaleUp 100 index, reflecting the hundred deep tech startups with the potential to scale up as global leaders or potential unicorn.

Finally, the transparency of the overall process will be pursued using clearer terminology, indicators and data sets to improve the policy framework, and a better policy support to member states. This shall allow for a better comparability of data sets and the use of shared definitions to inform and coordinate policies at all levels, through the European Innovation Council Forum.

The new European Innovation Agenda will complement existing tools to support R&D and innovation, such as Horizon Europe’s actions targeted to startups, scaleups and small and medium-sized enterprises (SMEs), the funding by the European Innovation Council (EIC) (we wrote about this here) and the new Knowledge and Innovation Communities (KICs) created by the European Institute of Innovation and Technology (EIT).

Comments from the stakeholders

“For more than a year we have consulted the stakeholders, such as innovation ecosystem leaders, startups, unicorns, women founders, women working in the capital venture, universities, and businesses. Together, we will make Europe the global powerhouse for deep-tech innovations and startups”, said Mariya Gabriel, Commissioner for Innovation, Research, Culture, Education and Youth.

Among contributors to the debate was EuropaBio, that published its response to the Commission’s proposal.

The requests of the association representing the biotechnology industry to remove regulatory barriers through the establishment of regulatory sandboxes has been recognised in the EIA, as well as the need to invest in scientific and industrial excellence and bridge the innovation gap between member states. Other key issues highlighted by EuropaBio included the need to review the GMO legislation to overcome the process-based approach that often results in unequal regulatory treatment for similar products with equivalent risk profiles, together with improved policies for rewarding innovation and the need to build digital literacy skills.

The Irish Pharmaceutical Healthcare Association also commented the Commission’s proposal. According to the post signed by Bernard Mallee, IPHA’s Director of Communications and Advocacy, despite the effort of the Commission to boost innovation and fill the gap with US and China in the development of breakthrough treatments, mixed results may be expected. Incentives in areas of unmet medical need and the fight against antimicrobial resistance are identified as key issues. The suggested solution is a better underlying commercial model targeted to invest in the development of new antibiotics, and the importance of health data in driving medical research and managing healthcare systems. Improved iterative scientific dialogue and dynamic regulatory assessment based on real-world data and innovative trial designs are other point of concern for IPHA. Harmonisation of the EU Special Protection Certificate framework was also suggested, while the coordination of compulsory licensing in emergency situations in Europe was judged at risk of de-incentivise innovation. IPHA also supports the High-Level Forum on Better Access to Health Innovation initiative launched by EFPIA.

Positive comments to the new European Innovation Agenda also came from the European Startup Network (representative of 38 national startups associations) and the European Regions Research and Innovation Network (ERRIN) (see more on ScienceBusiness).

The revision of the pharmaceutical legislation is also central to the agenda of the Czech EU Presidency for the second half of 2022. Again, the goal is to close the gap with the competitor countries and speed up the approval of new treatments. According to Euractiv, it takes on average 150 days longer to get an innovative medicine approved in Europe than in the US. Just 22% of innovative medicines are being developed in the EU, vs 48% of the US (data EFPIA).