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The EU Parliament wants to simplify access to the European Innovation Council for SMEs

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31 January 2023

Credits: pexels.comThe European Parliament Committee on Industry, Research and Energy (ITRE) voted – with 56 votes in favour, 0 votes against and 2 abstentions – on an implementation report to simplify the management of the European Innovation Council (EIC), the programme that aims at supporting the commercialization of high-risk and high-impact technologies in order to improve the participation of Small and Medium Enterprises in this programme making it more accessible and attractive. 

EIC has been established under the Horizon Europe programme to support deep tech innovation from early stage research to deployment and scaling up of start-ups and Small and Medium Enterprises with its 10.1 billion euros budget. Horizon Europe is the EU’s key funding programme for research and innovation that aims at boosting the EU’s competitiveness and growth.

To reach its main goal, the EIC programme has been divided into 3 parts: 

  • The EIC Accelerator to provide tailor-made financing to deep tech startups to boost their growth and development;

  • The EIC Pathfinder to provide grant-based funding for early research; 

  • The EIC Transition Activities to prepare research results for application in products, services or processes. 

The Accelerator in particular was thought specifically because the EU doesn't have a well-functioning risk investment market. Venture Capital funds run balanced portfolios that cancel out ambitious investments with less risky ones and this is also the main reason why the European Commission decided to establish the EIC: because deep tech investment is extremely risky and rarely does this sector receive the funding it needs to function properly. EIC was instituted as a solution, in order to provide quick investments in large sums in deep tech and change the financing situation of this specific sector. 

The ITRE Committee addressed the problem of the debatable management of the EIC Fund by the European Commission, whose infighting caused an immediate stop in providing funding to about 100 startups who were selected in 2021 after submitting a proposal for an EIC project.

The Committee then presented a draft report to address these two main issues:

  • the necessity to monitor the actions of the European Commission which - according to the text - is “overstepping its role as an executive in interpreting the legislation” regarding the management of the EIC Fund;
  • the need to consider, as the Horizon Europe legislation allows, the EIC Accelerator as the possible unique investor in a company if the market does not want to take the risk. 

These recommendations promoted by the ITRE Committee for more efficient management of the EIC work towards better communication between the fund, start-ups and the SMEs which are developing deep tech innovations and need the cash flow that EIC should be able to provide without delays. This result will ultimately lead to a review of the implementation of the European Innovation Council.

Links

Horizon Europe 2021-2027

European Innovation Council 

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