29 Sep 2016   |   News

EU to propose array of measures to help companies scale-up

Leak shows Brussels officials preparing new ideas to turn ‘acorns into mighty oaks’ and ease the pathway to growth for start-ups

A leaked copy of a new scale-up initiative shows the European Commission is preparing several limited measures to address the scarcity of big successful companies in Europe.

With the portentous title, “Turning acorns into mighty oaks”, the plan outlines an array of new support services and ideas to help start-ups to grow.

According to the document, which has been seen by Science|Business, the Commission will lay the ground for a special Europe-wide visa for non-EU nationals, removing a deterrent for talented professionals thinking of setting up here. Currently, non-EU residents have to apply for entry to each EU state separately.

Money will be spent on recruiting scale-up advisers to assist small companies, and there will be “growth champions” schemes, where local chambers of commerce and start-up associations meet to identify rules that are impeding growth.

A range of new intellectual property policies is also discussed in the document. These include creating a database of patents available for licence; promoting alternative dispute resolutions and IP litigation insurance to cover for the risk of courts actions; and funding for experts to provide IP coaching for entrepreneurs.

Another suggestion is the creation of a “European Observatory for Clusters and Industrial Change” to “consolidate a number of existing scoreboards into a single analysis and collect more information on start-ups and scale-ups.”

The strategy is being led by the Commission’s DG Grow and could be subject to further change. It is due to be announced in a Communication in November. At the moment the draft is out for consultation with other directorate-generals.

It is proposed that money to pay for implementing these ideas will be drawn from existing budgets, in particular Horizon 2020’s InnovFin and COSME programmes.

Officials want to address concerns that Europe’s abundance of start-ups are not realising their potential. Few survive beyond two to three years, and fewer still grow into larger firms.

“Too often innovative solutions are not produced and commercialised in Europe. And too often, European start-ups conclude that it is easier to seek investment in, and relocate into, third countries," the draft says.

Politicians are anxious that Europe’s entrepreneurial activity is not creating enough jobs. Currently, start-ups spawn an average of less than 13 jobs after two and a half years. There are differences across member states. Companies in London, Stockholm and Berlin tend to grow bigger, but even so the numbers are relatively low compared to the US.

Many entrepreneurs take their companies abroad to places like Silicon Valley, where capital markets are deeper.

“The EU needs to do better to avoid the temptation for European start-ups and scale-ups to go to the US or sell to US companies or funds,” the plan says.

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