Reform and capital: keys for Europe to create more unicorns

Europe may be rich in ideas, but scaling them is another story. As the European Innovation Council (EIC) expands its support for deeptech ventures, board member Dr. Francesco Profumo argues that deeper cooperation and bolder funding are essential to turn promising research into the next generation of European unicorns.

The EIC is the EU innovation program focused on identifying and scaling up breakthrough technologies. The institution does so through various investment programs that support ventures at different stages of growth.

Francesco Profumo, a former Italian Minister of Education, University and Research, and rector of the Polytechnic University of Turin, is one of the board members overseeing the EIC. Immediately after the European Innovation Capital award ceremony held in Turin last week, he sat down with IO+ to discuss the state of the art of innovation in Europe.

What was your impression of today’s finalists?

“Today’s ceremony shows how innovation in Europe happens in small and big cities. Some of them have an industrial background, and in some others, an innovation ecosystem was created from scratch. I had the impression that Europe is moving faster than in the past.”

How can Europe better boost innovation?

“It is a two-sided problem. On the one hand, it is a cultural challenge because, historically, it has been difficult to align 27 countries with diverse backgrounds. But to compete with China and the United States, we need greater aggregation. On the other hand, the level of investment has to increase.”

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Francesco Profumo

President of Isybank and EIC Board Member

He served as Italy's Minister of Education, University, and Research from 2011 to 2013, after teaching at the Polytechnic University of Turin and becoming its rector in 2005.

In your opinion, how can the EU do better in this regard?

“There are two aspects to consider. The first is the governance system’s unanimity, established by the EU's six founding members to ensure unity in decision-making. Maintaining this unanimity today is challenging, as the number of members has increased, and even small countries can veto a law’s approval.

The second point is the budget. At present, the EU budget is 1% of its gross domestic product (GDP), a small share compared with similar federations such as the US and even Switzerland. These two aspects need to be clarified.”

You have been part of the EIC Board for some time now. How do you assess the EIC activities so far?

“The EIC itself started as a startup, and in the beginning, it was all a trial-and-error process. Over the past five years, more than 800 startups received support, and some have achieved unicorn status (e.g., the Swedish 3D bio-printing company Cellink, ed.). We laid the foundation for a positive environment. One thing that could be improved is the coordination between the Pathfinder and the Transition program, to smooth the growth process of companies.”

European universities are universally regarded as sources of excellent research. How do we translate more of it into impactful innovation?

“In Europe, a strong separation exists between technical and business aspects. For this reason, we produce strong research but are weak on the financial side. To this end, in the United States, things work very differently, as there is deeper integration between technical and financial aspects. We need to work to combine the business and technical sides more.”