Fifteen days after the European Commission put the European Innovation Act on the table, the proposal reaches the part of the process where ambitions meet national arithmetic. The Council’s Research Working Party is scheduled to examine the regulation on 24 September, the first structured reading by member state officials since the text was presented on 9 September. Nothing is decided at that stage. But the working party is where the two most contested ideas in the file will first be spoken about out loud.
The first is procurement. The Act would create a harmonised Union framework for research and development procurement, replacing a patchwork in which each administration runs its own rules for buying things that do not yet exist. That part is uncontroversial in principle; public buyers have complained for years that legal uncertainty pushes them toward safe, off-the-shelf purchases. What is controversial is the second half of the same provision, which would make innovation-friendly procedures mandatory and establish a preference for solutions made in the Union. A preference in public purchasing is an industrial policy instrument dressed as a procedural one, and it will be read that way in capitals with large exporting sectors and in third countries that have negotiated market access to European public contracts.
The second contested idea is intellectual property. The Commission proposes a common framework for valuing intangible assets and an EU-wide digital marketplace where IP can be listed, matched and sold. The problem it addresses is real. A company holding patents, software and datasets often cannot convert them into collateral because no bank trusts the valuation. The Commission estimates that fixing this could unlock up to 10.2 billion euro a year in additional IP-backed venture capital and debt financing. The wider impact assessment attaches larger numbers still: around 25.92 billion euro in additional annual profits for companies, roughly one billion euro a year saved by public buyers, and about 35 million euro in administrative cost savings. The Joint Research Centre has put the cumulative value of easier market entry for innovations as high as 452 billion euro.
Those figures deserve to be treated as what they are. They are modelled estimates of what happens if every element of the regulation works as designed, is transposed without dilution, and changes the behaviour of investors who have so far declined to lend against intangibles. Valuation standards are the weak link. Europe has tried before to make intangible assets legible to lenders, and the obstacle was never the absence of a framework document. It was that two competent valuers looking at the same patent portfolio produce different numbers, and a lender prices that spread into the loan or declines to make it. A Union methodology narrows the spread. It does not eliminate the underlying uncertainty about whether a patent will earn anything.
The procurement preference carries a different kind of risk. It is the clearest signal yet that the Commission intends to use demand-side levers rather than subsidies to build domestic supply, which is cheaper and faster than the alternative. It also invites reciprocal treatment. Member states whose companies win contracts abroad will want to know how the preference is scoped, whether it applies below or above the international thresholds, and what happens to suppliers established in the Union but foreign-owned. Those are precisely the questions working party officials are paid to ask, and the answers will not be settled in a single September meeting.
What the Act does have, unusually for a competitiveness file, is a coherent theory. Europe funds research well and commercialises it badly. Procurement and IP finance are the two points where public policy can intervene without picking winners. Whether the Council agrees that the intervention should include a made-in-Europe clause is the question that will define the next twelve months of this file.
