At a time when investment in European startups has fallen by over 30% compared to 2024 and national ecosystems show signs of fragmentation, the need for a coordinated political response at a continental scale is being underscored.
The report’s key recommendations include:
- Simplify Access to Public Funding: Aid programs and grants are essential for early-stage startups, but their processing remains complex and slow. The Startup SG model (Singapore) is cited as an example of simplification and administrative efficiency.
- Reform R&D Tax Credits: Incentives must be more direct, transparent, and accessible without costly intermediaries. It is proposed to increase the total investment in R&D in Europe—currently at $2.22\%$ of GDP, compared to $3.59\%$ in the US—and to reinvest tax returns in product development.
- Extend and Better Communicate Tax Schemes for Business Angels: Programs like the UK’s EIS and SEIS, Germany’s INVEST, or France’s JEI have proven successful but remain underutilized. Greater dissemination could broaden the investor base and strengthen seed funding.
- Apply Specific Tax Relief for Startups: Many young companies suffer liquidity stress due to the slow pace of existing incentives. Policies must offer temporary exemptions or tax deferrals that alleviate cash flow in their initial years of operation.
Conclusion: The growth of the European startup ecosystem depends on governments adopting smarter, coordinated, and agility-focused fiscal and funding policies. Reducing friction and accelerating execution will be key to transforming innovation into real competitiveness.
In addition to fiscal and regulatory adjustments, the future of European entrepreneurship will depend on its capacity to attract international talent, harmonize regulations, and consolidate a genuine single innovation market.
