Zaharieva favours aspirational over hard targets for innovation procurement

The EU should set aspirational rather than hard targets for public procurement to help start-ups stay and grow in Europe, according to Ekaterina Zaharieva, the commissioner responsible for start-ups, research and innovation.

“The biggest [difference between the EU and US] is not that our founders are risk averse. We create more start-ups than them, but somehow we are risk averse to procure new technology from our start-ups,” Zaharieva said on May 7, at Politico’s AI & Tech week held in Brussels. 

Her comments come as the European Commission is conducting a broad revision of its dedicated procurement framework, including the introduction of measures on pre-commercial procurement, according to Zaharieva. Currently, pre-commercial procurement is estimated at about 0.5% of total public procurement in the EU.

Zaharieva has previously called for greater efforts to boost innovation procurement through both public and private funds. Now, she is suggesting setting non-binding targets for member states to procure from European start-ups. “I’m not a very big fan of compulsory targets,” she said. “Aspirational targets [would] show the benefits to procure innovation and also motivate [authorities] to increase the capacity in administration to procure innovation.”

Earlier this year, her senior aide, Manuel Aleixo, said that innovation procurement, which constitutes an important funding source once start-ups have a product to sell, amounted to just over 10% in the EU, against 20% in the US. 

Zaharieva also gave an update on the €5-billion Scaleup Europe Fund, which aims to back promising start-ups with the large-scale, late-stage growth capital that they need to go global, filling a financing gap that often pushes them to move out of Europe. The fund has entered “the final stage of the selection process for a fund manager,” she said. “So, we hope to be able to start investments very soon, in the next couple of months.”

Meanwhile, the harmonised company formation process known as EU Inc. should be implemented “hopefully by the end of the year,” Zaharieva said. This will allow any company to incorporate within 48 hours, for less than €100, with no minimum share capital, and operate across the EU.