France Digitale’s feedback for the European Innovation Act
The Startup and Scaleup Strategy marks a major milestone for Europe’s innovation ecosystem, echoing key proposals from France Digitale’s 2024 Manifesto. Alongside the 28th regime, the European Innovation Act could unlock growth if it tackles startups’ real challenges. France Digitale calls for public procurement to support European tech companies and for institutional investment to be mobilised for the European innovation sector. We also urge a shift in mentalities for European tech champions to emerge in Europe, the harmonisation of employee ownership schemes, and well-structured regulatory sandboxes to foster innovation effectively.
The Startup and Scaleup Strategy recognises the paramount role of startups in Europe’s society and economy, marking a long-sought achievement for the innovation ecosystem. It also reflects several of the key measures proposed in France Digitale’s Manifesto for the 2024 European Elections.
Together with the 28th regime, the European Innovation Act has the potential to break down barriers to innovation and sustainable growth, if it addresses the challenges highlighted by startups and scaleups from across Europe.
To strengthen the innovation ecosystem, France Digitale has long advocated for greater support of European companies through public procurement, the mobilisation of institutional investment, and regulatory frameworks that reflect the fast-paced, dynamic nature of innovation.
If a definition of an « innovative company » is deemed necessary, we urge that it be as inclusive as possible. Such a definition should account for the entire lifecycle of a startup and avoid adding unnecessary administrative burdens on companies driving innovation.
The innovation landscape in Europe requires a mindset shift, from fragmented, national approaches to a more unified strategy that champions and enables truly European success stories. In this context, establishing a one-stop shop in each Member State (a single point of contact for all employment, tax, and legal formalities) would greatly facilitate cross-border expansion for startups.
Regarding employee ownership schemes, taxation should be harmonised and deferred until the point of share sale, when employees receive tangible financial benefit. Additionally, the calculation of capital gains should be standardised across the EU, while allowing Member States the flexibility to set tax rates in line with their fiscal sovereignty.
Finally, regulatory sandboxes should be actively encouraged. Clear pathways for both entry into and exit from these frameworks must be developed to ensure they serve as effective tools for innovation, rather than temporary exceptions.