The European Commission announced on Monday (18 March) new changes to the European Innovation Council (EIC) and a budget increase of another €2 billion, to improve and encourage entrepreneurs and innovation in Europe.
If the success continues, the EIC is slated to become a full-fledged reality in the 2021-27 period under Horizon Europe. The Commission has proposed to dedicate €10 billion to the EIC under Horizon Europe.
Since its creation in 2017, EIC has funded 240 startups with €480 million.
The EIC was set up to encourage the EU to be more competitive and comparative to other countries. For example, compared to the EU’s €6 billion in venture capital, the US has €38 billion.
The EIC is meant to act similarly to the Defense Advanced Research Projects Agency (DARPA) in the US, the agency behind disruptive innovations including the Internet or the GPS.
So far, the EIC has invested in companies working for blockchain-based online payment technology, new energy efficient screens and a solution to fight traffic noise.
“The European Innovation Council is about freedom,” Carlos Moedas, European Commissioner for research, science and innovation, told a press event. “Freedom of the innovator with the innovator at the centre.”
Urho Konttori, the founder of VR company Varjo, told the event the company had no product to pitch, just the goal of creating great virtual reality. Without the change in the system, he said Varjo wouldn’t have fit into any category and would not have been able to make a VR product that is 20 times better than competitors.
“We went from good to great because of the EU,” said Konttori.
Issues with scaling up companies will be mitigated through a mixture of grants and equity. Previously, the EU would only give out grants and companies would be stagnated for the future. Now, with equity, they can help new companies with growth and scaling and the returns will be put into new companies.
Another example of changes in the pilot programme is with new project managers, who will work with companies to find the best ideas in Europe, share information and mentor new entrepreneurs.
The EIC is also changing its method of ‘top-down’ innovation to ‘bottom up.’ This approach is centred around the innovator, not the innovation, Moedas said.
A total of 68 additional startups and SMEs selected for overall funding of €120 million under the existing European Innovation Council pilot.
The EIC stressed that they were open to all applicants, from SMEs to third countries, and that they will be aware of potential conflicts of interest but that entrepreneurs want a change and redesign with a focus on people.
Tuesday is the last trilogue between the Commission, Parliament and Council and the EIC is hopeful an agreement between the institutions will be reached before the elections in May.
[Edited by Zoran Radosavljevic]