The European Commission has released the EU Startup and Scaleup Strategy, aiming to strengthen Europe’s position as a leading destination for innovation and entrepreneurship. The new plan focuses on supporting startups and scaling businesses, with an emphasis on retaining homegrown technology and reducing dependence on foreign digital infrastructure.
The strategy comes at a time when innovation and technology have become central to geopolitical as well as economic interests. With ongoing conflicts near Europe and growing uncertainty in transatlantic alliances, the European Union has highlighted the need for greater autonomy in the tech sector.
Despite matching the United States in startup creation, Europe faces significant challenges. Over 60% of successful European startups are acquired by non-EU firms, which puts the continent at risk of losing control over critical technologies. Fragmented regulations, limited capital markets, and a patchwork of 27 national systems further hinder the growth of European innovators.
The Strategy acknowledges these issues and sets out to make Europe the most attractive place for innovators to launch and scale their businesses. While previous efforts focused on supporting startups through grants and mentoring, the new approach targets the scale-up phase, where access to capital, markets, and regulatory flexibility are crucial. The European Commission notes, "when innovative firms with high potential leave or are acquired by foreign players, Europe loses control of critical technologies."
A key element of the plan is the Blue Carpet Initiative, which aims to help startups recruit highly skilled professionals from both inside and outside the EU. It also proposes support for entrepreneurial education, streamlined visa procedures, and harmonized tax treatment of employee stock options.
To address regulatory fragmentation, the proposed 28th regime would offer a unified legal framework for innovative companies, making cross-border operations simpler and reducing compliance burdens for startups and digital SMEs.
The Strategy also highlights the importance of public procurement reform, suggesting the need for European preference criteria to prioritize technology produced by European SMEs and startups, not only in security and defence but also in digital sectors.
The European Commission encourages leveraging established European companies and public-private partnerships to provide essential digital infrastructure, and urges collaboration among innovators to strengthen Europe’s digital landscape, as seen in initiatives like EuroStack.
By focusing on these areas, the EU aims to foster an entrepreneurial economy and maintain sovereignty over its critical technologies.
