This article outlines recommendations for FP10, integrating insights from recent reports, the successes of existing EU-funded unicorns, and expert analyses.

The upcoming research framework (the successor to Horizon Europe) represents a pivotal opportunity to enhance Europe's position as a global leader in innovation and technology. Building on the strengths and lessons learned from Horizon Europe, it's essential to implement strategic improvements to create a more dynamic ecosystem that can foster the growth of organisations in a competitive world.

1. Bridge the Late-Stage Funding Gap

One of the significant challenges for European startups is accessing sufficient funding during the scale-up phase. While Horizon Europe has provided considerable support for early-stage innovation, there's a clear need for more investment to help startups transition into mature, high-growth companies.

2. Streamline Access to Funding and Reduce Bureaucracy

Many startups find the application and reporting processes for Horizon Europe overly complex and time-consuming. This administrative burden discourages participation, particularly among smaller startups that lack the resources to navigate these processes.

3. Foster Collaboration and Innovation Ecosystems

Europe's innovation ecosystem is often fragmented, with limited collaboration between academia, industry, and startups. This fragmentation hinders the ability to translate cutting-edge research into commercial products.

4. Enhance Talent Development and Retention

Europe faces a talent gap in key areas such as artificial intelligence, deep tech, and green technology. Retaining and attracting skilled workers is crucial for building a robust innovation ecosystem.

5. Expand International Collaboration and Market Access

While Horizon Europe has primarily focused on internal EU collaboration, FP10 should place greater emphasis on global partnerships. European startups need access to larger markets and international expertise to scale effectively.

6. Strengthen Technology Transfer and Commercialisation

One of Europe's challenges has been the "valley of death" between research and commercialisation. Many innovative ideas and technologies never reach the market because of a lack of support during this critical phase.

7. Build a Unified and Accessible Innovation Market

Fragmented regulations and market access barriers make it difficult for startups to scale across multiple European countries. Addressing this issue is essential for enabling the growth of unicorns. Multiple reports and insights have suggested that regulations are becoming overwhelming and can hinder the creation or even progress of innovative ventures to scale.

8. Generic Grant Instruments

To fund the next generation of software-based, AI-based and fintech initiatives: most of the unicorns created in Europe or globally belong to these categories, where there are no direct grant options, considering most EU grants focus only on deep-tech and science fields.

Learning from Existing EU Unicorns

A few of the unicorns that have emerged in recent years with the help of EU funding, illustrating the potential of well-supported innovation ecosystems:

These successes highlight the importance and potential of consistent funding, supportive regulatory environments, and collaboration between public and private sectors in fostering unicorn growth.

The Draghi Report's Perspective

The Draghi Report emphasises that Europe needs a strategic approach to address its competitiveness challenges. It rightly advocates for increased investments in innovation, technology transfer, and the digital economy while calling for stronger public-private partnerships. FP10 should adopt these recommendations, ensuring that funding mechanisms are flexible, agile, and responsive to the rapidly evolving needs of startups and scale-ups.

What Changes Can Be Made in Existing Funding Programmes?

To boost Europe's leadership in innovation and technology, it's essential to build on and enhance existing EU funding instruments, focusing on these key actions:

• Horizon Europe (pillars 1, 2, 3): increase funding for late-stage startups and scale-ups and simplify application processes to make it more accessible, especially for SMEs.
• European Innovation Council (EIC): expand its equity investment capabilities and adopt a more agile funding mechanism to support high-potential startups quickly.
• European Investment Fund (EIF): increase its role in late-stage financing and collaborate closely with private venture capital to co-invest in scale-ups.
• European Regional Development Fund (ERDF): promote regional innovation hubs and improve technology transfer to support startups in less-developed regions.
• European Institute of Innovation and Technology (EIT): strengthen collaboration with larger corporations, extend its reach to underrepresented European regions, and create synergy with the EIC to avoid overlaps.
• Digital Europe Programme: focus on digital skills training and accelerating AI and data infrastructure projects.

New funding proposals for FP10 can include creating a dedicated "European Scale-Up Fund" for late-stage investments, a "Pan-European Venture Capital Fund-of-Funds" to attract more private investment, and an "Innovation Adoption Fund" to help SMEs adopt advanced technologies.

These recommendations can help the EU create a more unified, well-funded, and dynamic innovation ecosystem, ensuring Europe can rival the USA and China in technology leadership.

What Can Europe Learn from the USA?

1. Increase R&D Spending

2. Strengthen Public-Private Partnerships

DARPA model: the US Defense Advanced Research Projects Agency (DARPA) has an annual budget of about $4 billion and has been instrumental in pioneering technologies like the internet, GPS, and early AI research. DARPA's funding has led to technological breakthroughs with commercial applications, driving US competitiveness.

SBIR and STTR programmes: the Small Business Innovation Research (SBIR) programme awards over $3 billion annually to small businesses engaged in federal R&D, while the Small Business Technology Transfer (STTR) programme supports collaboration between research institutions and private companies. These programmes have played a role in launching over 70,000 startups since inception.

3. Encourage Venture Capital Investment

4. Enhance Technology Transfer

Technology Transfer Offices (TTOs): US universities generate over $2.5 billion annually in licensing revenue, with institutions like MIT and Stanford serving as leaders in transferring research to industry. In contrast, European universities lag in commercialising research outputs.

5. Attract and Retain Talent

By adopting these approaches and investing an additional €200-300 billion annually across these areas, Europe can significantly enhance its innovation ecosystem, improve its competitiveness, and move closer to achieving GDP growth rates comparable to the USA.

Conclusion

FP10 presents a unique opportunity to build on the successes of Horizon Europe and address the gaps that have hindered the growth of European startups. By focusing on late-stage funding, simplifying processes, fostering collaboration, and supporting talent development, the EU can create an environment where more unicorns can emerge, thrive, and compete on the global stage. This will be crucial for ensuring Europe's long-term competitiveness and leadership in the innovation landscape.

The next phase of European research and innovation policy must be ambitious, dynamic, and responsive, ensuring that the continent remains a fertile ground for the next generation of world-changing startups.

This article is about how to converge, select and develop R&D project ideas for products, technological solutions and services development for commercial success, including elements of concrete R&D project design.

Stage 1: Organisation's Innovation Strategy

• Internal technology or products roadmap: the internal technology or product roadmap of the organisation, where the organisation wants to develop its future competitive technologies and products.
• Research portfolio (including projects and products): innovation thesis, existing portfolio of research projects, products and services available to exploit further into future developments.
• Innovation agenda: innovation priorities, needs or plans for the organisation: expansion, product improvements, disruptive solutions development, exploring new technologies, applications, markets or new business models.
• Existing background intellectual property: portfolio of existing background IPRs and knowledge-based assets.
• Internal capacities and resources: the organisation's internal teams, expertise, resources, labs and R&D capabilities.

Stage 2: Ideas and Concepts Development

• Ideas development, brainstorming and TRL positioning: ideas development and brainstorming workshops; identifying and positioning TRL levels of different ideas.
• Alignment with organisational strategy: aligning ideas with the organisation's strategy and innovation agenda.
• Alignment with investor, funding body, call or customer request: aligning ideas with investor expectations (for privately funded projects and startup ideas), with funding body expectations and call topics (e.g. H2020, IUK, RFPs), or with the description of work from customer requests.
• Problem exploration and need analysis: evaluating ideas on the potential of which one better solves the relevant problem.
• Customers identification and expectations: identifying potential users and customers of the proposed solution, their expectations and how they would use it (design thinking / human-centred design methods).
• Competition and state-of-the-art analysis: which market or technological gap the proposed idea will cover. If you are developing a solution for a saturated market, the proposed idea has to work better than competitors.

Stage 3: Concept Exploration

• Value chain and supply chain development: value chain development of the R&D project idea, connecting all components of the project, and implementation plan development. Based on the value chain and project components, choosing and developing the associated supply chain including partners, suppliers and agents.
• Concept-customer fit: during supply chain development, brainstorming and validation with end users or customers regarding the R&D idea and customer fit. The more interviews the better to further develop the idea; lean approaches can be one way to validate it.
• Innovation development and business model: unique selling points, unique benefits, value and innovation, differentiation factors, and unique non-technological innovations or business models where relevant.
• Risks and challenges analysis: which challenges and risks are involved in realising your innovative idea; complete analysis and a plan to mitigate them or a contingency plan, plus risk impact analysis on resources and budgets.
• Solution value creation and impact analysis: how the concept will create value for customers or users, and what benefit and impact it will have.

Stage 4: R&D Project Concept Finalisation

• Problem-concept-impact fit: connecting the dots, making sure of the problem-concept-impact fit for your R&D project.
• Problem-concept quantification: problem and project concept quantification. To what extent are the identified customer problems addressed by the developed R&D solution?
• Concept-impact quantification: R&D solution and impact quantification. What are the benefits derived by using the developed solution to solve the identified problem, and its positive impacts on customers?