The European Commission has proposed a new Innovation Act aimed at making it easier for research and intellectual property developed in Europe to obtain finance, win public-sector customers, and reach commercial markets.
The proposal focuses on persistent weaknesses in the European innovation system, including the difficulty of using intellectual property as a financeable asset and the relatively limited use of public procurement to create early demand for new technologies.
Under the plan, the EU Intellectual Property Office would be given a mandate to develop a standardised framework for valuing intellectual property, alongside a secondary marketplace for IP transactions and an advisory centre to support businesses seeking to commercialise intangible assets.
The measures are designed to address a financing problem affecting research-led companies. Patents, software, algorithms, and specialist know-how can represent a large proportion of a technology company’s value, but lenders often struggle to assess those assets consistently when making credit decisions.
That can leave growing businesses more dependent on equity financing than companies whose balance sheets contain property, machinery, or other conventional collateral. A common valuation methodology would not remove the commercial uncertainty surrounding a patent, but it could make assessments more comparable between banks, investors, and member states.
The proposed secondary market would address liquidity from another direction by helping companies identify buyers, sellers, and potential licensing partners for intellectual property that might otherwise remain unused.
The second major strand concerns research and development procurement. The Commission wants innovation-friendly procurement procedures to play a larger role in public purchasing and intends to make it easier for authorities in different countries to purchase experimental or pre-commercial technology jointly.
Public procurement is an important part of the commercialisation debate because governments collectively buy goods and services at a scale capable of creating meaningful markets. Early public-sector contracts can provide young technology companies with reference customers, revenue, and evidence that products work in demanding environments.
Smaller innovative businesses can struggle to win those contracts where tenders require extensive delivery histories or favour established suppliers. Procurement reform is therefore being used alongside finance measures to address the gap between successful research and scaled commercial deployment.
Commission modelling suggests selected measures within the Innovation Act could ultimately generate substantial economic gains across the EU. The estimates depend on assumptions about financing, procurement, business growth, and wider economic spillovers and should therefore be treated as projected impacts rather than guaranteed outcomes.
The Act has been proposed alongside the wider Public Procurement Act, linking Europe’s innovation agenda directly with reform of the purchasing rules used by public bodies.
Regulatory sandboxes form another component of the package. These controlled environments allow businesses to test new products or services while regulators assess how existing rules should apply, potentially reducing uncertainty where technology develops faster than legislation.
The initiative reflects a longstanding European policy concern: the continent produces strong scientific research and large numbers of patents but has fewer globally scaled technology companies than its research base might suggest.
Later-stage capital, fragmented regulation, national market boundaries, and slower adoption of new technology have all been identified as constraints. Companies that cannot access sufficient finance or customers in Europe can ultimately raise capital, relocate, or sell intellectual property elsewhere.
The growing importance of intangible assets makes that problem more pressing. Modern businesses increasingly invest in data, software, intellectual property, and research rather than physical assets, while much of the conventional lending system remains better suited to collateral that can be valued and sold easily.
A European valuation standard could help narrow that mismatch if financial institutions use it in real lending decisions. Adoption will therefore matter as much as the legal framework itself.
The legislation must now proceed through the EU’s political process, where details surrounding procurement preference, IP valuation, data sharing, and sandbox eligibility can be amended.
If implemented effectively, the Act would strengthen the commercial infrastructure surrounding European research rather than simply increasing research budgets. Its central objective is to improve what happens after an idea has been developed — how it is valued, financed, purchased, and scaled into a viable business.
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