A bigger and more agile EIC to compete in deep tech

The European Innovation Council Board has issued a set of recommendations to expand the EIC’s mission and budget ahead of the next EU multiannual financial framework. The Board wants the EIC to move decisively toward ARPA-style challenge programmes, scale its equity activity through the EIC Fund, create a new Scaleup Europe Fund, streamline operations for innovators, and build stronger synergies with national and regional instruments while preserving room for experimentation. The Board frames these changes as necessary for Europe to keep pace with the United States and China in scaling deep tech.

What is changing and why it matters

At the core of the proposal is a pivot from incremental improvements to a more directional, mission-like approach. The EIC would retain its open, bottom-up funding while adding larger, vision-driven challenges run by empowered Programme Managers. On finance, the EIC Fund would move beyond one-off tickets to a multi-stage role with the ability to lead or bridge strategic rounds, complemented by a dedicated Scaleup Europe Fund to crowd in institutional investors. The Board also targets faster, clearer processes across the innovator journey, and closer alignment with Member State and regional schemes to improve deal flow and follow-on routes.

The Board’s five recommendations

1. Move to ambitious ARPA-inspired challenges

The EIC should replace current Pathfinder and Transition challenges with larger, vision-driven initiatives that include quantitative success metrics and span instruments. PMs would integrate open-call projects where relevant, use top-ups, and apply fast lanes between instruments without forcing innovators through repeated applications.

2. Scale the EIC Fund and set up a Scaleup Europe Fund

The Fund should provide timely follow-on capital, lead rounds where strategic, streamline diligence when not leading, and operate on an evergreen basis by reinvesting returns. A new Scaleup Europe Fund would crowd in pension and insurance capital for late-stage deep tech rounds, addressing a chronic growth financing gap in Europe.

3. Simplify and improve the innovator journey

The Board proposes discontinuing grant-only under the Accelerator to curb grant-chasing and to better match blended support to scaling needs. It calls for reduced steps and faster decisions, AI-enabled interfaces, clearer resubmission rules, and easier uptake of Seals of Excellence by Member States.

4. Connect EU, national and regional ecosystems

Recommendations include systematic funding of Seals of Excellence via ERDF operational programmes, encouraging Member State transfers to the EIC, strengthening ERC and EIT handovers into Transition, expanding plug-in routes from national schemes, and building a European Corporate Network for co-investments and partnerships. The Board also emphasises tighter cooperation with Technology Transfer Offices and an EIC-industry liaison to deepen private sector involvement in Pathfinder and Transition.

5. Keep experimenting to close the lab-to-market gap

The Board wants ERC-to-EIC fast lanes without call deadlines, an EIC Embedded Entrepreneur Programme inside Pathfinder projects, actions to increase investment in women-led and diverse teams, and trials of advance purchase agreements or market commitments to stimulate procurement-led innovation. It also favours reshaping Accelerator challenges into broader focus areas that can seed EIC Fund verticals and a more targeted internationalisation strategy.

Budget, success rates and governance

The Board argues the current budget near €10 billion is too small for the mission and points to very low success rates of 3 to 5 percent compared with about 15 percent elsewhere in Horizon Europe. It says reaching a healthier rate would require roughly quadrupling the budget, alongside ringfencing to avoid diversion to short-term political priorities and no pre-allocation by instrument.

On governance, the Board calls for strategic agreement with Member States on EIC challenges and Accelerator focus areas but operational autonomy thereafter. It seeks clear KPIs and reporting, an empowered Board secretariat with the right of initiative, and an evergreen EIC Fund that can recycle returns. The Board also suggests allowing the EIC Fund to take more shareholder control when deals align with strategic priorities.

Evidence cited and the caveats

The EIC highlights early traction. Over 700 start-ups and SMEs have received support, and the EIC Fund reports about €3 in additional capital for every €1 invested. The Board says companies show strong revenue and job growth and points to progress across AI, biotech, clean tech and quantum. Under Horizon Europe, 402 Pathfinder projects, 183 Transition projects and 746 Accelerator investments have been launched. The portfolio includes more than 70 companies valued above €100 million, and collaborations with more than 600 venture and strategic investors. Women-led firms account for over 20 percent of the portfolio.

These are encouraging signals but remain self-reported aggregates rather than audited impact metrics. Leverage ratios do not prove causality, and many portfolio companies also benefit from national instruments. The feasibility of PM-led portfolio steering and the EIC Fund acting as a frequent lead investor will depend on staffing, governance streamlining, diligence timelines and the risk appetite of co-investors.

The competitiveness gap the EIC wants to close

The Board frames the case for expansion around two structural gaps. First is the valley between research and productisation in hardware-heavy deep tech with long development cycles. Second is the late-stage financing gap, where Europe has fewer specialist growth funds and limited participation by pension and insurance investors. The Board cites a figure of less than 0.025 percent of institutional assets currently invested in European VC and argues that a scaled EIC Fund and a new Scaleup Europe Fund can crowd in these pools of capital if governance is sufficiently market-oriented.

How ARPA-style operations would work within the EIC

The Board proposes a two-step process. First, obtain a strategic endorsement of broad challenge domains aligned with EU strategic technologies. Second, give PMs the autonomy to define specific challenge visions, success metrics and the mix of instruments needed, including grants, equity, procurement and prizes. PMs would top up promising projects, redirect or terminate underperformers, and fast track transitions across instruments without making innovators resubmit from scratch.

Building stronger bridges to Member State and regional schemes

The Board wants ERDF programmes to routinely fund Seals of Excellence across all EIC instruments and to enable equal access for single and multi-beneficiary projects. It encourages more Member States to transfer funds to the EIC to ensure comparable support and access to Business Acceleration Services. It also calls for better pathways from national and regional programmes through plug-in mechanisms, deeper handovers from ERC and EIT into the EIC Transition scheme, and a European Corporate Network to back co-investments and partnerships.

Experimentation agenda and internationalisation

Beyond financing and governance, the Board asks for ERC-to-EIC fast lanes, an Embedded Entrepreneur Programme inside Pathfinder projects, and trials of advance purchase agreements to create reliable demand signals in markets like health, energy and security. It also recommends a more selective international strategy that prioritises events and markets where beneficiaries have clear go-to-market needs, and a stronger narrative to attract global talent with simplified mobility pathways.

Risks and open questions

Scaling the EIC Fund to lead strategic rounds could strain internal capacity and lengthen diligence unless processes are simplified. A larger challenge portfolio run by PMs requires sustained autonomy and tolerance for failure. Ringfencing budgets and avoiding pre-allocation by instrument will face pressure during budget negotiations. Finally, success will depend on Member States actually funding Seals of Excellence and allowing transfers to the EIC, which remains uneven across regions.

Who is making the case

The EIC Board comprises twenty independent innovators from across the European ecosystem and a full-time President. In the statement accompanying the recommendations, President Michiel Scheffer said that the EIC has had a major impact but that Europe must match ambition with action to turn more high-potential innovators into global champions.

What happens next

The recommendations are intended as input to the upcoming EU budget proposal and the next framework programme. The Board links the expanded EIC to wider EU priorities on competitiveness and economic security, and signals that governance, autonomy and sustained budgets will be as important as headline funding figures if Europe wants to build and keep the next generation of deep tech leaders.