The European Commission will introduce plans for a Europe-wide venture capital scheme to kick-start business innovation before the end of the year, research commissioner Máire Geoghegan-Quinn has promised.
Geoghegan-Quinn said the Commission would introduce three measures to create a strong venture capital system in Europe, as the biggest problem for fast growing innovative companies is the lack of financing tools available.
“First by the end of this year, we will put forward a proposal for an EU-wide venture capital scheme, building on the capacity of the European Investment Fund, other financial institutions and national operators,” she said.
“Second, during 2012, we aim to lift the remaining legal and administrative obstacles to the cross-border operation of venture capital funds. We intend to introduce a passport for Venture Capital Funds so that they can invest freely across borders,” she added.
The commissioner said that a third instrument would create better EU-level financing instruments for debt management and equity, which she said will encourage businesses to pour more money into research and innovation. Geoghegan-Quinn revealed that this funding initiative would be of similar scale to the Risk-Sharing Financing Facility in Framework 7, which aims to give companies greater security for their R&D spending.
However, this instrument will not become available until after 2013 when Horizon 2020, the Commission’s follow-up programme to Framework 7, is in place, Geoghegan-Quinn said.
Geoghegan-Quinn was speaking at a meeting in Luxembourg on 6 October, the first anniversary of the Commission’s Innovation Union Plan. Her speech to the Bridge Forum, an interdisciplinary discussion group, set out the progress to date in realising the goals of the Innovation Union and the proposed future actions to foster a stronger knowledge-based economy in Europe.
The need for an EU-wide approach to stimulating innovation was becoming ever more evident, she argued. Europe is failing to catch up with its main international competitors, the US and Japan.
“Without drastic action, we will fall further and further behind. It is really no exaggeration to say that we face an innovation emergency,” she warned.
Indeed, as Commission president José Manuel Barrosa noted in his state of the union address to the European Parliament on 28 September, the situation is getting worse. In 2000 there was €22 billion of venture capital available in Europe but by 2010 that figure had fallen to only €3bn.