EU Joint Research Centre · Creativity & design

EU Innovation Act aims to boost market entry for new technologies

The European Commission has introduced the European Innovation Act (EIA) to address the challenge of translating research into market-ready products within the EU.

An analysis by the Commission's Joint Research Centre (JRC) suggests that three proposed reforms within the EIA could cumulatively generate up to EUR 452 billion in GDP and create half a million jobs across the EU over ten years.

The EIA aims to remove market barriers for innovative ideas through three targeted proposals: a new method for valuing intellectual property (IP) and two measures to enhance public Research and Development (R&D) procurement as an innovation driver.

JRC projections, based on different effectiveness scenarios, indicate cumulative GDP gains ranging from EUR 256 billion to EUR 452 billion and job creation from 238,000 to 507,000 over a decade.

The IP valuation measure is a significant growth driver, expected to facilitate EUR 2.7 billion to EUR 10.2 billion annually in additional IP-backed finance, thereby increasing investments and production capacity.

R&D procurement is another key driver, with analysis showing that every euro spent generates approximately three euros in returns for suppliers through technological learning and new technology development.

The implementation costs for the EIA are considered modest, resulting in a high benefit-to-cost ratio compared to direct investment programs.

The EIA's proposals include standardizing IP valuation frameworks, establishing a secondary marketplace for IP transactions, and making innovation-friendly public procurement procedures mandatory, with a preference for EU-made solutions.

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