The Future of European Competitiveness

Get the latest on the Future of European Competitiveness presented by the European Commission. In Part A 2 this programme goes over how to tackle the innovation deficit that is taking place throughout the continent. You can read an excerpt of the detailed report below

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Excerpt from Part A.2 of the report:

A better financing environment for disruptive innovation, start-ups and scale-ups is needed as barriers to growth within the European markets are removed. While high-growth companies can typically obtain finance from international investors, there are good reasons to further develop the financing ecosystem within Europe. Very early-stage innovation would benefit from a deeper pool of angel investors. Ensuring sufficient local capital to fund scale-ups would concentrate the spillovers of innovation within Europe. Increasing the appeal of European stock markets for IPOs would improve funding options for founders, encouraging more start-up activity in the EU. To generate a significant increase in equity and debt funding available to start-ups and scale-up, the report proposes the following measures.

First, expanding incentives for business “angels” and seed capital investors. Second, assessing whether further changes to capital requirements under Solvency II are warranted, which establishes capital adequacy rules for insurance companies, and issuing guidelines for EU Pension Plans, with the aim of stimulating institutional investment in innovative companies in selected sub-sectors. Third, increasing the budget of the European Investment Fund (EIF), which is part of the EIB Group and provides finance to SMEs, improving coordination between the EIF and the EIC, and eventually rationalising the VC funding environment in Europe. Finally, enlarging the mandate of the EIB Group to enable co-investment in ventures requiring larger volumes of capital, while also enabling it to take on more risk to help “crowd in” private investors.