The chink in Europe’s innovation armour
Europe’s strength arguably has been, and still is, innovation. However, there are other contenders on the block, and their ability to commercialise that research is attracting European-bred talent to different shores. Europe spent €403 billion on research and development in 2024. It employed 2.21 million full-time-equivalent researchers, 47% more than a decade earlier. These are […] The post The…
Europe's reputation has long been that of a hub for innovation, driven by substantial research and development spending and a robust pipeline of university spin-offs. In 2024, the EU invested €403 billion in R&D, employing 2.21 million researchers – a 47% increase from a decade earlier. Despite this, European innovation still lags behind the US, Japan, and South Korea, as R&D spending represents only 2.24% of EU GDP.
While European research institutions produced around 100 DeepTech and life-science spin-offs annually between 2000 and 2010, since 2015, this number has surged to over 500 annually, with more than 7,300 companies now employing 167,000 individuals and boasting a combined valuation of €344 billion.
However, the challenge lies in translating scientific breakthroughs into commercially viable products. Venture capital funding attracts DeepTech companies, but only 23% of EU university spin-offs operate in this sector compared to 60% in the US. The issue becomes even more pronounced when the research transitions from the lab to the market.
Only 86% of early-stage capital raised by European DeepTech and life-science spin-offs remains within the continent, with the rest coming from outside, mainly the US. Since 2019, American companies and investors have reaped close to €20 billion worth of value from European spin-offs, even as research output has grown exponentially.
The funding landscape for European research spin-offs presents a unique set of challenges. The EIC Accelerator and Transition scheme offer support for technologies at specific research levels, but these programs do not always accommodate the early-stage nature of university spin-offs. Commercialization often requires navigating intellectual property, demonstrating technology effectiveness beyond the lab, and building a company before revenue becomes realistic.
European technology-transfer offices show a lower licensing income compared to their US counterparts, partly due to a lack of industry experience within these offices.
Written by urgent.news from EU-Startups's reporting — not their text. Machine-written — it may contain errors, so check the original before relying on it.
