Towards an EU Startup and Scaleup Strategy

What the Commission is doing

In 2025, the European Commission will adopt an EU Startup and Scaleup Strategy.

The Commission has put startups, research and innovation among the key priorities of its mandate, with the goals of closing the innovation divide between the EU and its global competitors and boosting competitiveness, bearing in mind the Letta Report on the future of the Single Market and the Draghi Report on European competitiveness.

The Competitiveness Compass, adopted in January 2025, indicates that this Strategy will be one of the first flagship actions to be adopted, within its first pillar “Closing the innovation gap”. The Strategy will then be translated in to various concrete measures, including legislative proposals such as the European Innovation Act or the so-called “28^th regime” for innovative companies.

The Strategy aims to foster an innovation-friendly environment that makes it simpler and faster for European innovative startups to grow and scale up in the Single Market. It is expected to address the difficulties that European startups and scaleups face in accessing capital, markets, services, infrastructure as well as talent needed to enable them to thrive in Europe and compete globally.

The Startup and Scaleup Strategy will be closely linked to other flagship actions of the Competitiveness Compass, such as the “Savings and Investments Union”, the “Single Market Strategy” or the “Union of Skills”.

Why the strategy is needed

Startups and scaleups are amongst the key drivers of innovation, as they often develop and introduce breakthrough innovative products and solutions to the market. A thriving startup and scaleups ecosystem plays a key role in economic growth and market evolution by driving productivity, incentivising investments and creating quality jobs.

EU startups and scaleups have the potential to create new markets in which the EU can take global leadership, while increasing the EU’s competitiveness by closing the innovation gap with its main global competitors.

A Startup and Scaleup Initiative was adopted in 2016 aiming to remove barriers for startups to scaleup in the Single Market. The European Innovation Council was launched in 2018, as Europe’s flagship innovation programme to identify, develop and scale up breakthrough technologies and game changing innovations.

However, the regulatory and business environment in the EU is still not sufficiently conducive for bringing innovative products, services and solutions to users at the necessary scale. As a result, many innovative companies end up seeking venture capital and expanding opportunities outside Europe: around 60% of all global scaleups are based in North America, in contrast with only 8% in the EU.​ The share of the EU in the global share of venture capital raised is only 5%, compared to 52% in the United States, or 40% in China.

It has now become urgent to address the financial, regulatory and administrative obstacles that limit or slow down startups from scaling up into mature, profitable companies in the Single Market and to incentivise them not to relocate out of the EU.

How to get involved

Everybody can contribute to the design of the EU Startup and Scaleup Strategy by participating in the online consultation published on the Have your say portal, that will run until 17 March.

Contributions will be collected, analysed and processed, to feed the Strategy and the instruments that the Commission will propose in the coming months. Furthermore, various events are being organised to hear from stakeholders.