Removing barriers

Rules and regulations often prove to be a barrier to a company attempting to scale up – they can be confusing, overly burdensome, and often differ depending on the country.

To address this, policies and programmes have been put in place to streamline the processes companies have to go through, such as:

The Single Digital Gateway – providing easy access to single market information, e-procedures, advice and problem-solving services

The Common Consolidated Corporate Tax Base (CCCTB) and the Single VAT Area – simplifying the tax system

New insolvency legislation – giving a second chance to honest entrepreneurs, who won’t be penalised for not succeeding in previous business ventures as their debt will be written off after a maximum of 3 years. It also allows companies in financial difficulties to restructure early on to prevent bankruptcy and avoid laying off staff.

Creating new opportunities

In order for innovative companies to thrive, they need opportunities. The second focus of the European Commission’s Startup and Scaleup Initiative has therefore been to create these opportunities. They fall largely into four categories: opportunities to connect, opportunities for skills, opportunities for innovation and opportunities for social enterprises, however they also include initiatives such as that which helps startups access the EU’s €2-trillion public procurement market.

Opportunities to connect

Whether it’s connecting entrepreneurs with mentors, innovative startups with investors or local ecosystems across Europe, the Commission is creating opportunities to connect in the following ways:

Startup Europe – an initiative which connects people and local ecosystems, as well as providing information for startups through its website

Knowledge and Innovation Communities – set up by the European Institute of Innovation and Technology (EIT) these focus on entrepreneurial skills, mentoring and startup accelerators

Erasmus for Young Entrepreneurs – a programme which provides opportunities for young people to learn from more experienced businesspeople

Opportunities for skills

The New Skills Agenda for Europe aims to help people develop skills that companies need, such as technical, financial and digital skills, but also qualities such as leadership and an entrepreneurial mind set. Based on this agenda are:

The Digital Skills and Jobs Coalition, which supports cooperation between education, employment and industry

The Blueprint for Sectoral Cooperation on Skills, which addresses the skills shortage

Opportunities for innovation

Through the Horizon2020 programme, the Commission has made it easier for startups to access financial and technical support, putting a particular focus on breakthrough innovations with scale-up potential. Building on this, the following initiatives have been put in place:

The creation of a European Innovation Council to help generate breakthrough innovations

The Innovation Radar, which connects potential business partners and investors with Horizon2020-funded innovators to help them to scale up

Supporting the use of intellectual property rights (IPRs) by SMEs, which currently only register 3% of EU-wide trademarks. This will help them reap the benefits of their innovation efforts

Opportunities for social enterprises

Social innovations such as fair trade, distance learning and zero-carbon housing have seen a boom over the past few years. What’s more, they have high potential for positive impact on the economy and society at large. However, these companies find it hard to secure funding and support due in part to a lack of recognition of their economic potential.

The Commission has therefore launched with the European Investment Fund new financial instruments to boost lending to social enterprises.

Access to Finance

Accessing finance – one of the most important steps for any new startup, however, with much more funding for venture capital investment available in the US than in the EU, it’s clear that European startups are at a disadvantage.
The Commission is therefore addressing this in the following ways:

Increasing the budgets of the European Fund for Strategic Investments (EFSI) and COSME, Europe’s programme for small and medium-sized enterprises.

Opening up €1 billion in microcredits since 2010 through the EU Programme for Employment and Social Innovation (EaSI) and its predecessor, which have supported over 100,000 micro-entrepreneurs across Europe.

Supporting venture capital and risk capital financing through the pan-European Venture Capital Fund of Funds. The EU will provide cornerstone investments of up €400 million and the fund managers must raise at least three times as much from private sources, triggering a minimum of €1.6bn in venture capital funding.

Amending the Regulations on European Venture Capital Funds (EuVECA) and European Social Entrepreneurship Funds (EuSEF) to facilitate further cross-border financing for SMEs.

Europe has no shortage of creative talent and ground-breaking entrepreneurs, and with the current push in terms of policy and initiatives the Commission aims to fully tap into this potent resource, making the EU the first choice for innovators looking to set up and grow their business.

Promoting Best Practices

The EU Start-up Nations Standard, an initiative in which the Commission works closely with Member States as well as stakeholders, will promote best practices to be implemented at local, national and regional levels. With the aim of making Europe the go-to place for startup incubation and development, Start-up Nations Standard will:

Make it easier to start businesses and expand to other countries

Streamline implementation of rules on visa applications and residence permits for 3rd party talent

Make granting of employee stock options more attractive

Promote venture building and tech transfers from universities

Increase access to finance for scaling up

Promote cross-border digital tools