Europe Wants to Turn Innovation into Business: What the European Innovation Act Means for Start-ups

The proposed European Innovation Act could change how innovative companies access finance, public markets and regulatory support across Europe.

Europe has no shortage of great ideas. Its universities, researchers, start-ups and entrepreneurs are developing technologies that could transform healthcare, agriculture, mobility, energy and food systems.

The problem is often not innovation itself - but what happens after the innovation is created.

Too many European technologies struggle to attract investment, navigate different national rules or find their first major customers. The result? Innovations developed in Europe can end up being commercialised and scaled elsewhere.

The European Commission wants to change this through its proposed European Innovation Act (EIA), a key initiative under the EU Startup and Scaleup Strategy and the Competitiveness Compass.

The ambition is straightforward: make Europe a better place to develop, finance, test and scale innovative companies.

From public needs to private opportunities

One of the most interesting parts of the proposal is its focus on research and development procurement.

Public authorities can play a much bigger role in innovation by saying what problems they need solved and then supporting the research, development and testing of new solutions.

Today, R&D procurement represents around €17 billion, or only 0.6% of total annual public procurement expenditure in the EU. Other leading economies invest five to eight times more, dedicating around 3-5% of their public procurement expenditure to R&D.

The Commission wants Europe to close this gap.

The proposed Act would establish common EU rules for R&D procurement, giving public buyers greater legal certainty and making cross-border cooperation easier.

For companies, this could create an important new route from prototype to market.

Start-ups, scaleups, universities and large companies could compete for R&D procurement contracts. Public buyers would be encouraged to use innovation-friendly requirements, proportionate financial conditions and performance-based specifications.

Importantly, offers would have to be evaluated within a maximum of two months, while EU preference rules would strengthen opportunities for European economic operators.

The potential economic impact is significant. The Commission estimates that public buyers could save around €1 billion annually, while companies could generate approximately €25.9 billion in additional annual profits.

Another major opportunity concerns intellectual property (IP).

For many technology companies, their most valuable assets are not buildings or machinery but patents, software, research results and other intellectual property. Yet these assets can be difficult for banks and investors to value.

The proposal would establish an EU framework to help companies identify, value and disclose IP assets and make them more suitable for financing.

A new Competence Centre within the European Union Intellectual Property Office (EUIPO) would support IP-backed finance and commercialisation.

It would also establish a Union-wide digital matchmaking platform connecting IP holders with potential investors and buyers, helping create a more transparent and liquid market for intellectual property.

The Commission estimates that these measures could unlock around €10.2 billion per year in additional financing through IP-backed venture capital and debt.

For an innovative start-up, this could mean that a successful patent is not simply something to protect - it could become an asset that helps finance the company's next stage of growth.

Innovation can also move faster when companies have a safe environment in which to experiment.

This is where regulatory sandboxes come in.

A regulatory sandbox allows a company to test an innovative product, service or technology for a limited period under the supervision of relevant authorities.

It is not deregulation.

Instead, it creates a controlled environment where innovators can understand how existing rules apply while regulators learn how new technologies work in practice.

The Commission wants Member States to develop a more consistent approach to regulatory sandboxes across Europe.

This could be particularly valuable for start-ups, which often have fewer resources to navigate complex regulations in multiple countries.

Imagine an agri-tech company developing autonomous machinery, AI-based farm management, new biological products or innovative water-management technology.

A regulatory sandbox could provide an opportunity to test a solution while working directly with regulators and identifying potential legal or safety issues before entering the wider market.

The European Innovation Act could become particularly relevant to Europe's agricultural innovation ecosystem.

Farmers need new technologies, but innovative companies need customers, financing and opportunities to demonstrate that their solutions work in real conditions.

R&D procurement could help connect these two sides.

A public authority, research organisation or other eligible buyer could define a real-world challenge - for example, reducing water consumption, improving soil monitoring or developing climate-resilient technologies - and innovative companies could compete to develop solutions.

At the same time, better IP financing and regulatory experimentation could help European agri-tech companies move faster from idea → prototype → field testing → investment → commercial scale.

The European Innovation Act is still a proposal, but its direction is important.

Europe is signalling that competitiveness will not depend only on producing excellent research. It will also depend on creating the financial, regulatory and market conditions that allow European innovators to turn that research into successful businesses.

For entrepreneurs, researchers and agri-food innovators, this is a development worth following closely.

And opportunities do not stop with the Innovation Act.

At AgriVentures.co, innovators can discover EU funding opportunities, prizes, accelerator programmes and events across agriculture, biotechnology, climate innovation, food systems and sustainable development.

Europe has the ideas. The next challenge is turning those ideas into companies, technologies and solutions that can scale.

The European Innovation Act is designed to help make that happen.

Check out our guides for funding opportunities

https://projects.agriventures.co/resources

Agriventures Connect 3.0 is coming on 20th of April 2027 in Sofia, Bulgaria

https://connect.agriventures.co/

The role of Agriventures in supporting agrifood innovation

As the agritech startup ecosystem grows across Europe, initiatives such as Agriventures are helping connect entrepreneurs, researchers, investors, and policymakers working in agriculture and food innovation.

Agriventures focuses on supporting agrifood startups, biotechnology innovation, and access to European funding for agriculture, while also helping entrepreneurs navigate the complex landscape of startup financing, venture capital, and research commercialization.

By strengthening connections between startups, research institutions, investors, and farmers, Agriventures contributes to building a stronger agricultural innovation ecosystem that can accelerate the transition toward sustainable agriculture and resilient food systems.

Through knowledge sharing, events, and ecosystem building, Agriventures helps ensure that promising agritech innovations can scale and reach farmers, food producers, and global markets.