EBN Position Paper: Strategic Recommendations for the European Innovation Act

The European Business and Innovation Centre Network (EBN) welcomes the European Innovation Act (EIA) as a pivotal step toward strengthening Europe’s competitiveness and closing its innovation gap. Building on nearly 30 years of supporting sustainable entrepreneurship and regional growth, EBN calls for bold action to make Europe the preferred home for innovative companies. Alongside the European Research Area Act and the proposed 28th Regime for companies, the EIA must simplify the regulatory landscape and enable innovators to scale within the Single Market. 

The innovation exodus: Why Europe cannot afford to wait 

Every month of delay in implementing the EIA costs Europe its most promising innovators. From Spotify to DeepMind, success stories too often relocate abroad in search of simpler regulations and better access to capital. Despite achieving an 84.5% three-year survival rate and mobilising over €880 million annually for innovative companies, EBN’s EU|BICs still see their best startups looking beyond Europe. 

This innovation drain is not only an economic issue but a question of European sovereignty in the digital age. To compete with the United States and China, Europe must act decisively to create a truly unified innovation market. 

Building the coalition for change: A united European response 

EBN’s recommendations are anchored not only in our nearly three decades of supporting sustainable entrepreneurship and place-based economic development, but in the collective voice of stakeholders who recognise that fragmented national approaches have failed. 

Research and academic community: Major European corporations, through platforms like BusinessEurope and the European Round Table for Industry, recognise that Europe’s innovation deficit directly impacts their ability to access cutting-edge technologies and partnerships that drive competitiveness. 

Financial sector alignment: The European Investment Fund and InvestEurope highlight the cost of regulatory fragmentation. 

Regional and municipal authorities: Networks like Eurocities and the Committee of the Regions advocate for place-based policies that foster cross-border scaling. 

The 28th Regime offers an optional framework that enhances rather than replaces national systems, providing companies with choice whilst creating the unified market conditions necessary for European competitiveness. 

About EBN: Proven innovation ecosystem management at scale 

EBN has demonstrated that European innovation can compete globally when supported by quality-certified, place-based ecosystems. Our network of 175+ certified EU|BICs stands as living proof that the right policy framework can deliver extraordinary results: an 84.5% three-year startup survival rate, 30,000 companies supported, 9,000 jobs created annually, and over €880 million in funding mobilised for innovative companies in 2024.  

The EU|BIC Innovation Ecosystem Building Framework represents a proven methodology for orchestrating collaborative, mission-driven regional ecosystems that translate global policy objectives into quantifiable local impact. Our quality assurance standards, continuous improvement processes, and localised support demonstrate how the EIA’s ambitious goals can be operationalised across Europe’s diverse regional contexts.  

Yet even our most successful EU|BICs face the same fundamental constraint: regulatory fragmentation that forces their most promising companies to choose between European values and global competitiveness. The European Innovation Act offers the policy framework necessary to eliminate this false choice and enable European innovation to scale without compromise. 

EBN’s Strategic recommendations for EIA implementation 

Mandate the 28th Regime: Creating Europe’s innovation infrastructure 

The fragmentation of legal frameworks across Member States remains one of the greatest obstacles to scaling innovation in Europe. Every year, promising startups spend valuable time and resources navigating 27 different legal systems instead of focusing on growth. By contrast, their American and Chinese competitors operate under unified frameworks that enable rapid continental expansion. 

The 28th Regime offers a practical solution to this challenge. It has already gained broad support across Europe’s innovation ecosystem. The EBN, representing more than 30,000 startups, endorses a mandatory EU-level corporate structure, while leading legal firms such as Clifford Chance and Linklaters estimate that current legal fragmentation increases cross-border costs by up to 400%. 

EBN recommends the creation of a mandatory EU-INC corporate structure, established through EU Regulation and supported by a digital-first incorporation process completed within 48 hours. This unified framework would deliver: 

• Digital incorporation leveraging eIDAS for secure, fast registration 

• A recognised EU company brand ensuring credibility across Member States 

• Simplified governance reduces complexity while preserving flexibility 

• Automatic mutual recognition removes cross-border legal barriers 

Concerns about national sovereignty can be addressed by maintaining the 28th Regime as an optional alternative, not a replacement, for domestic systems. Experience from the European Company (SE) shows that harmonisation enhances national frameworks rather than undermines them. Ultimately, the 28th Regime would provide Europe’s innovators with a modern, borderless environment to scale globally competitive businesses at home. 

Institutionalise ecosystem orchestration: Leveraging proven delivery mechanisms 

The success of the European Innovation Act depends not merely on creating new policies but on ensuring their effective implementation across Europe’s diverse regional contexts. Too many well-intentioned EU initiatives have failed because they lacked robust delivery mechanisms that could translate Brussels policy into local impact.  

Innovation happens locally, in the labs of Munich, the accelerators of Amsterdam, the clusters of Milan. These ecosystems need skilled orchestration to connect entrepreneurs with capital, talent, and knowledge. For over three decades, EBN’s network of certified EU|BICs has fulfilled this role, achieving consistently strong results through place-based methodologies. 

This approach has been recognised by the European Committee of the Regions and regional governments across Europe, which view EU|BICs as essential intermediaries between EU policy and local development. 

EBN recommends embedding certified Entrepreneurial Support Organisations (ESOs) in the EIA’s governance and delivery framework. This should include: 

• Certification requirements to ensure quality and accountability 

• Regional coordination mechanisms to align local strengths with European priorities 

• Public–private co-investment strategies to build sustainable ecosystems 

Providing capacity-building for organisations seeking certification would further ensure quality delivery and long-term institutional resilience. 

Harmonise investment and talent frameworks: Competing for global resources 

Europe’s innovation deficit stems not from a lack of ideas or talent, but from our inability to create the financial and regulatory conditions that enable innovative companies to attract global resources whilst remaining anchored in European markets. Every month, European startups lose potential employees to American companies offering stock options with favourable tax treatment. Every quarter, European scaleups relocate to access growth capital unavailable within fragmented European markets.  

To address this, Europe needs unified investment and employment conditions. EBN’s recommendations include: 

• EU-FAST (Fast Advanced Subscription Template) to simplify early-stage cross-border investment 

• IPR collateral frameworks enabling companies to use intellectual property as loan security 

• Streamlined cross-border investment processes to remove redundant barriers 

Equally important is a harmonised EU-ESOP framework for employee share ownership. Aligning capital gains taxation and deferring tax liability until the sale of shares would make European startups more competitive in attracting skilled professionals. 

These proposals are supported by both the European Tech Alliance and the European Trade Union Confederation, reflecting consensus across industry and labour. Together, they would create a single European environment where innovation, investment, and talent can thrive. 

Strengthening commercialisation and ecosystem coordination 

Europe’s research institutions are world leaders, yet their excellence often fails to translate into globally competitive companies. The gap between discovery and market success is not a question of innovation capacity but of fragmented policies and limited coordination between academia and industry. 

European universities generate thousands of patents each year, but commercialisation rates still trail behind those of the United States and Israel. Simplifying technology transfer and strengthening partnerships with businesses are essential to bridge this divide. The European University Association and the European Round Table for Industry both recognise that clearer frameworks and more flexible collaboration mechanisms are key to unlocking Europe’s research potential. 

EBN recommends embedding certified EU|BICs and Entrepreneurial Support Organisations (ESOs) within the EIA’s implementation framework to ensure that research excellence becomes market impact. This should include: 

•  Involving certified ESOs in publicly funded research commercialisation. 

•  Establishing standardised technology transfer frameworks to reduce complexity. 

•  Coordinating innovation efforts regionally, leveraging local ecosystem strengths. 

•  Measuring performance to ensure accountability and continuous improvement. 

Integrating proven intermediaries will ensure Europe’s scientific strength delivers tangible economic and social value. 

Conclusion: Moments of truth for European innovation 

The European Innovation Act is more than a legislative reform; it marks Europe’s defining choice between technological sovereignty and lasting dependence. Each month of delay strengthens global competitors and weakens Europe’s position in the innovation race. Every regulatory barrier left in place drives another promising startup to grow abroad instead of within the Single Market. 

EBN stands ready to work alongside the European Commission and Member States to deliver the Act with the urgency and ambition this moment requires. Our network of certified EU|BICs provides the proven infrastructure to translate European policy into tangible results across diverse regional contexts, ensuring that innovation delivers measurable economic and social impact. 

A broad coalition — from universities and major corporations to investors and regional authorities — now recognises the need for decisive action. The question is not whether reform is necessary, but whether Europe has the will to act before its window of opportunity closes. The choice is clear: act boldly to secure Europe’s sovereignty, competitiveness and prosperity, or risk permanent dependence on others who moved faster. 

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