Lights Up on the European Innovation Act: what it is, put simply

the European Commission has just proposed the European Innovation Act, a key milestone of the Startup and Scaleup Strategy and the European Competitiveness Compass. But what does it do? Why do we need it? And what could it mean for Europe and its innovation ecosystems?

On 9th September, the European Commission presented its proposal for the European Innovation Act. A broad and ambitious name – but what is it, exactly?

In short

In short – the proposed Act addresses the commercialisation of innovation, and specifically, the aspects of Public Procurement and Intellectual Property (IP). The Act is accompanied by a non-mandatory recommendation (more on this later) on regulatory sandboxes.

The initial ambition aimed to include other dimensions, too – such as access to talent and collaboration between industry and academia. We don’t know for sure why they were not included in the final proposal.

But here we are, and, if all of this sounds confusing, keep on reading.

So what does it do, in practice?

The European Innovation Act proposal includes four key aspects:

• A common EU way to value intellectual property (IP) – that is, a common system to estimate the financial value of IP assets (patents, trademarks, copyrights, etc.). As innovations are by definition – well – new, there are no existing means of comparison to determine their value. With the Act, it should be easier to assign a price to innovations and attract investments.
  
• A digital marketplace and competence centre for IP. The Act proposes creating an EU-wide digital matchmaking platform connecting IP holders with potential buyers, investors, and companies wanting to license the technology. Think a startup that has failed but had obtained a patent on their product – they will be able to resell it on this platform. This would be accompanied by a new Competence Centre inside the EU Intellectual Property Office (EUIPO), which would give guidance, training and support on valuing and commercialising IP.
  
• A common EU procedure for public R&D (or “pre-commercial”) procurement. R&D procurement involves a public body paying a company (or companies) to research and develop a new solution – as opposed to “traditional” procurement, whereby public institutions buy a finished product or a service. The Act proposes one common EU procedure for this. A concrete example: several hospitals across different countries could jointly commission companies to develop a solution to a problem they all share, split the cost, and compare results — instead of each one trying to navigate the market alone. The Act will make it legally simpler for public buyers in different countries to run a joint tender for an innovative solution, instead of navigating separate national rules. And it will increase the possibility for innovative companies to find a first customer in public institutions – a typical pathway for commercialisation.
  
• The recommendation on regulatory sandboxes. Regulatory sandboxes are safe legal testing zones that allow companies to trial their innovations in real conditions, for a limited time, with a regulator watching closely and giving feedback. This allows companies to test real products sooner instead of waiting for legal clarity (which is often lacking because innovations are, as we said, new). And regulators get evidence on whether existing rules make sense for brand-new technology. The recommendation proposes one common EU reference model, allowing to create sandboxes across more than one Member State at once. As mentioned earlier, it will not be binding, and Member States will need to adopt internal legislation to make it effective.

What could this be worth for Europe?

Putting the figures together: the Commission estimates the access-to-finance measures could unlock €10.2 billion a year in additional financing, plus around €35 million in administrative savings. The procurement measures are estimated to generate €25.92 billion a year in additional profits for companies and €1 billion a year in savings for public buyers. Overall, the Commission’s own research service estimates the Act could add between €256 and €452 billion to EU GDP over ten years, supporting between 238,000 and 507,000 additional jobs. As with all projected figures, these are the ambitions built into the case for the proposal — not guaranteed outcomes.

What does all of this mean if you work in regional innovation?

It’s too early to say exactly how this will all play out. But we can already make some general guesses: common, EU-wide tools — one way to value IP, one unified procurement process, one sandbox model — could free up time for regions to help companies use the new EU tools, rather than navigating many different systems.

Even then, a common EU framework rarely means a one-size-fits-all rollout: someone still has to translate what the new rules mean for specific sectors and areas. That’s precisely the kind of work regional business acceleration providers already do.

When it comes to EU funds, we can expect Horizon Europe’s successor — currently known by its working title, FP10, and starting in 2028 — to weave commercialisation and IP-valuation criteria more directly into its own grants.

Finally, it’s worth noting what the Act doesn’t cover: talent access and academia-industry collaboration, among other dimensions mentioned earlier. Regional innovation ecosystems will likely keep playing their usual role here — complementing what the legislation leaves out.

What’s next?

Nothing changes yet — the Act is still a proposal. To become binding, it now goes through the EU’s standard lawmaking process, with negotiations between the European Parliament and the Council.

The sandbox recommendation, needing only the Council’s sign-off, could move faster — but because it isn’t binding, how far it actually gets used will vary country by country.