The European Commission put forward the European Innovation Act on September 9, 2026, opening a legislative push to fix a problem the EU executive describes bluntly: ideas invented in Europe are too often turned into economic success by others, and elsewhere. The proposal forms part of the Commission's competitiveness compass and now moves into the legislative process. Research Commissioner Ekaterina Zaharieva framed the package as a direct assault on fragmentation. "With the European Innovation Act, we are tackling fragmentation head-on: one framework for IP valuation, one digital marketplace connecting buyers and sellers, and one simpler route for public procurement of cutting-edge research and development," she said in remarks carried by EUbusiness and Innovation News Network. ## Closing the Financing Gap for IP-Rich Startups The first strand addresses why startups with valuable patents struggle to raise money. Patents, software and datasets are harder for investors and lenders to value than conventional physical or financial assets, which makes debt and investment harder to secure during early growth. The Act promotes a common EU framework for valuing intellectual property, creates a digital marketplace connecting buyers and sellers of IP, and offers expert support to help companies bring ideas to market. The Commission expects around 35 million euros in administrative cost savings and up to 10.2 billion euros per year in additional financing through IP-backed venture capital and debt. The aim is not simply more money for startups. The Commission's stated goal is to make intellectual property itself more usable as a source of capital, turning dormant patents and research into collateral that financiers can actually assess. ## Public Procurement as an Engine for New Technology The second strand targets the way governments buy innovation. Public authorities already spend heavily on research and development, but the Commission argues procurement can create far more demand for emerging technologies in health, education and clean mobility. A common R&D procurement procedure would give public buyers and suppliers greater legal certainty and make joint cross-border procurements easier for authorities in different member states. The Commission forecasts 1 billion euros per year in savings for public buyers and 25.92 billion euros in additional annual profits for companies. The Joint Research Centre's modelling gives a sense of scale. Each euro spent on R&D procurement can generate roughly three euros in returns for suppliers, and the wider reform package could generate between 256 billion and 452 billion euros in additional GDP over ten years depending on implementation, with the higher-impact scenario supporting around 507,000 additional jobs. ## Sandboxes to Test Technology Before Rules Catch Up Alongside the Act, the Commission proposed a Council Recommendation creating a common EU reference framework for regulatory sandboxes in areas not yet covered by EU legislation. Sandboxes let companies, researchers and public authorities test new products for a limited time in a controlled setting under regulatory supervision. The Commission's position is that sandboxes already exist in some areas of EU law but lack a common approach, creating fragmentation and uncertainty. The new framework would give innovators more room to test solutions while public interests remain protected. Zaharieva pointed beyond the current package. "And this is only the beginning. By 2028, we will create a genuine single market where ideas scale faster, finance circulates more freely, and Europe's strategic autonomy grows stronger," she said. The proposal now goes to the European Parliament and the Council, where negotiations will determine how much of the projected economic impact survives contact with the legislative process.