Technology and media insights

The European Commission yesterday adopted a 26-measure plan to transform Europe into a start-up powerhouse, aligning with calls to reignite innovation and competitiveness. The strategy aligns with the broader ‘Choose Europe' initiative, launched by President von der Leyen.

‘Choose Europe to Start and Scale’

The launch of this seminal initiative followed calls for EU 'reform' to ignite innovation and competitiveness, by, among others, former European Central Bank President Mario Draghi (who recently called for €800 billion of additional investment per year to make the EU more competitive on the world stage), and an Open Letter from founders of some of Europe's largest technology unicorns calling for a "tech renaissance".

At its core, this is a focussed EU startup and scaleup strategy to make Europe a great place for starting and growing global technology-driven companies.

The strategy comes at a critical time as Europe seeks to divest itself from US big tech. The strategy aims to resolve why many start-ups still struggle to take ideas from lab to market or grow at scale within the EU by supporting them through their lifecycle, with the strategy structured around five priority areas:

Innovation-friendly regulation.
Better finance.
Fast market uptake and expansion.
Support for the best talent.
Access to infrastructure, networks and services.

The key measures

The Commission will propose a European 28th regime which will provide a single set of rules for companies. It would include an EU corporate legal framework, based on digital-by-default solutions, and will help companies overcome barriers in setting up, scaling up and operating companies across the Single Market.
The forthcoming Tax Recommendation, as part of the Clean Industrial Deal, will recommend treating favourably the immediate expensing and accelerated depreciation and providing incentives for tax credits supporting investment activities by start-ups and scaleups.
The Commission will propose the European Business Wallet as the cornerstone of doing business simply and digitally in the EU, establishing a digital identity for all economic operators and providing a framework for sharing verified data and credentials to enable seamless digital interactions between economic operators and public administrations across the Union.

Impact on Ireland’s technology industry

Ireland's technology ecosystem is one of the most dynamic and globally integrated in Europe. It combines a strong base of multinational tech companies with a growing indigenous start-up scene, supported by favourable government policies, a well-educated workforce (Ireland have more engineers per capita in Europe, with 20% of engineers now with an AI focus), and strategic EU access.

The Irish Government are cognisant of the reliance on inbound investment and the requirement to develop further an already well-established innovation economy, through ongoing supports for domestic IP creation. To achieve this there must be continued public investment in, and support for domestic research and development. The launch of the EU’s proposed start up and scale strategy will be welcomed by investors, innovators and policy makers in driving a renewed focus on supporting Irish originated technology start-ups that are capable of growing to scale internationally.

While Ireland already has one of strongest tax incentives regime, the Irish Department of Finance have commenced a consultation period to review the R&D tax credit regime. This represents an opportunity to reinforce Ireland's position in the global stage as an innovation hub, ensure the credit is fit for purpose, support the adoption of emerging technologies and processes, and foster deeper collaboration with universities and research institutions.