Europe’s Innovation Problem Begins After Innovation

Europe’s innovation problem is not innovation itself. It is what comes immediately afterwards: turning excellent science into products, companies and value chains that remain in Europe.

The policy agenda is certainly full. The Biotech Act is on the table, with a second, industrial initiative close behind. Omnibus I–V simplification packages are under way, with Omnibus VI approaching. Alongside them sit the Startup and Scaleup Strategy, the Clean Industrial Deal and the New Genomic Techniques Regulation.

On paper, each is a lever intended to move concrete innovations—a new plant trait, a biocontrol product or a bio-based input—from laboratory to field faster and at lower cost, while keeping them within the single market once they arrive.

Individually, each initiative is a step forward. Taken together, however, they still leave open the question that matters most to founders and investors: will European innovation reach European markets before it reaches Brazil, the United States or Canada?

Will European small and medium-sized companies be helped—or at least not hindered—in bringing the next major idea to market? And is the innovation ecosystem itself sustainable, rather than merely oriented towards sustainability? These are two different things, although they are often treated as interchangeable.

European science, non-European commercialisation

The pattern is familiar: European science, non-European commercialisation. We discover in Ghent and scale in Iowa. The laboratory is here; the value chain forms somewhere else.

The contrast is telling. Landmark legislation receives loud public praise, while the private aside remains muffled but persistent: “We will still scale abroad.”

Across the entire reform agenda—not just one legislative file—three tests will determine whether Europe can break this pattern.

1. Does the value chain form in Europe?

The first test is whether companies that invent in Europe also license, scale and commercialise in Europe—or whether they discover here and capture the return elsewhere.

The reason is rarely the quality of the science. It is what surrounds it: scale-up capital that thins out just when a company needs to grow; 27 national markets that never quite fuse into one; higher energy and input costs; and a regulatory calendar unpredictable enough to make Europe a good place to invent, but a risky place to bet.

The real measure of success is therefore not the number of strategies announced or regulations adopted. It is whether products reach the market, companies grow and the resulting industrial capacity remains in Europe.

2. Do the policy packages pull in the same direction?

The second test is coherence.

Circularity asks Europe to re-source its inputs: recover nutrients, close loops and put by-products back to work. One Health, rightly, sets high environmental and safety standards for many of those same by-products.

In sectors such as fertilisers and feed, these two logics can collide. The recovered and secondary materials that circularity seeks to mobilise are often precisely those that One Health approaches most cautiously.

Europe is not self-sufficient in these domains, and its supply is fragile. Getting the balance wrong is therefore not an abstract policy trade-off. It creates exposure.

High standards and circularity do not have to be opposing goals. But reconciling them requires rules that recognise actual risk, provide usable pathways for safe secondary materials and avoid leaving companies trapped between contradictory objectives.

3. Do “risk-proportionate and digitalised” procedures shorten timelines?

The third test is whether promised procedural improvements genuinely reduce time to market—or simply relabel existing complexity.

Consider the CE-marking route for biostimulants under the Fertilising Products Regulation. In principle, it offers a harmonised single-market pathway. In practice, where the component-material rules and supporting standards remain incomplete, companies still fall back on 27 national schemes.

That is not a faster route. It is the same fragmentation with a digital front door.

High standards are not Europe’s problem. They are one of its genuine strengths. What is missing is predictability and speed.

Four practical levers

Europe can make this agenda more concrete through four changes.

First, prohibit gold-plating in sectors critical to innovation and strategic self-sufficiency. National additions should not be allowed to re-fragment a market that EU legislation was intended to unify.

Second, attach sunset clauses to innovation-related rules. Renew them only where there is evidence that real products have successfully reached the market. Regulation should be judged not only by what it prevents, but also by whether it enables safe innovation to deploy.

Third, open the design of regulatory frameworks to competition. National agencies, governments, academia and industry should be able to co-design alternative models across Europe, with the strongest approach selected and scaled. The principle is not new; forms of competitive institutional design were familiar to the Italian Renaissance city-states.

Fourth, make international benchmarking a duty rather than an afterthought. Before building a framework from scratch, study the third-country systems that already work, and require a clear justification for any European deviation.

From regulatory superpower to deployment power

Europe does not lack ideas, scientific talent or regulatory ambition. Its challenge is to create a legislative mindset that is nimble, equitable and fit for the future—one that treats deployment as an integral part of innovation policy.

Across all these reforms, the decisive question is simple: what will ensure that the value created by European innovation lands in Europe, rather than somewhere else once again?

The task is not to add another plate to the dinosaur’s armour. It is to help it shed its old skin faster.