European Innovation Act: The Commission Aims to Facilitate Funding and Growth in Innovation

02.10. 2026

The European Commission has proposed a new European Innovation Act, which is intended to facilitate the development, financing, and commercialization of innovations in Europe. The proposal focuses on creating better conditions for the growth of innovative startups and scaleups, facilitating the use of intellectual property, and supporting public procurement in the area of research and development. The related measures also include the creation of a common framework for regulatory sandboxes, which will allow new technologies and solutions to be tested in a controlled environment.

Europe boasts cutting-edge research, talented people, and significant creative potential. However, innovators in individual EU countries face differing rules and often struggle to secure funding. As a result, the economic benefits of innovations developed in Europe are too often realized elsewhere in the world. The new European Innovation Act aims to change this situation and make it easier for innovative companies in the EU to grow across borders and better compete on the global stage.

Strengthening the European Innovation Ecosystem

The proposal focuses on two main issues that, according to the European Commission, are hindering innovation in Europe.

1. Access to Financing

Many startups and scaleups have innovative ideas, patents, and other intellectual property. However, the value of these assets is often difficult to determine, which complicates the process of securing investment.

The European Innovation Act therefore calls for the creation of a common EU framework for intellectual property valuation. It will also include a digital marketplace connecting buyers and sellers of intellectual property, as well as expert support to help companies bring their ideas to market.

According to the European Commission’s projections, these measures could result in administrative cost savings of approximately 35 million euros and free up an additional 10.2 billion euros in intellectual property-based financing each year, through both venture capital and debt financing.

2. Public Procurement in the Field of Research and Development

The proposal will establish a common approach designed to increase legal certainty and help new technologies reach the market more quickly. It will also cover technologies that can help address societal calls, such as in the areas of health, education, or clean mobility. At the same time, the common approach will make it easier for public procurers from different Member States to jointly award public contracts in the field of research and development.

The European Commission expects these measures to generate savings of 1 billion euros annually for public procurers and additional annual profits of 25.92 billion euros for businesses.

A Regulatory Framework More Conducive to Innovation

In parallel with the European Innovation Act, the Commission aims to make it easier for innovators to turn innovative ideas into marketable solutions through a separate proposal on regulatory sandboxes.

Regulatory sandboxes allow businesses, researchers, and government agencies to test new products, services, or technologies for a limited period of time in a controlled environment and under the supervision of regulatory authorities. They help innovators better understand how rules apply in practice. At the same time, they enable public authorities to better assess whether existing rules need to be amended.

Regulatory sandboxes already exist in certain areas of EU law. However, there is currently no uniform approach to their use in Europe, which leads to fragmentation and uncertainty.

A new draft Council recommendation aims to change this situation by creating a common EU reference framework for regulatory sandboxes in areas not yet covered by EU legislation. The draft will draw on experience gained in Member States as well as on existing EU initiatives. This will give innovators more room to test new solutions while ensuring that the public interest is protected.