EU Startup Nation Standards

Get the results and the full report: check the hopes and fears about this ambitious project

One year into the formal adoption of the Startup Nations Standard, and almost half a year after the announcement of the European Startup Nations Alliance, this ecosystem survey, conducted from 3 March to 4 April 2021, was to gather stakeholders’ views on both initiatives. The following report provides an overview of the gathered contributions, especially in quantitative terms.

The survey targeted all types of stakeholders, including citizens and businesses. It has collected feedback from 40 people on the main strengths and obstacles of both initiatives; what is missing; and what to expect in the future. Having half of the respondents assuming more than 10 years of work within the tech and innovation ecosystem, some of the key results are the following:

  • Access to finance, Attracting and retaining talent (both with 52,9%) and innovation in regulation (47,1%) should be SNS’s top three implementations priorities
  • 47,1% assess that the Startup Nations Standard could be more ambitious, while 29,4% believe its approach is enough for now
  • 50% believe SNS’s main strength relies on setting a roadmap for unifying the EU single market
  • On the other hand, 44,1% believe that its non-binding nature, which does not have the force of law is SNS’s key weakness to becoming a reality. Topics such as lack of strategic vision between member states leaders (38,2%) and the absence of some upstream issues like fragmentation of venture capital and crossborder investment (35,3%) are also pointed out as obstacles to implementation
  • Accordingly, the top missing policy measure to be considered in future reviews relates to tackling taxes and legal barriers hampering cross-border investments (70,6%), followed by encouraging University, research-oriented students to start a business (44,1%)
  • In regard to the role of the European Startup Nations Alliance (ESNA, the EU body responsible for implementing the Startup Nations Standards across Europe) 52,9% say that key expectations relate to strategic leadership between current and future standards within EU green and digital transitions, while 50% highlights policy advising and bottom-up advocacy
  • When it comes to other functional activities to enhance impact, 47,1% of the respondents believe ESNA should coordinate with other EU structures working on startup policies too, albeit with different goals such as EIC, EIT, Invest EU and more
  • That’s why 44,1% say they are afraid of ESNA becoming one more body fragmenting the landscape at an EU level: it’s the the main obstacle to ESNA’s positive impact, alongside non-compliance from the Member States and lack of political leverage within the EU institutional design

The full report can be downloaded here, while the podcast telling a contextual story behind the results is available here.

*Public usage and dissemination are allowed, by following the Creative Commons license provided within the document.

With this paper, the Portugal Tech League closes its first cycle of iteration toward its goal of becoming a stand-alone Association. Our deepest gratitude to all the people who got involved so far: our thematic cycles, based on clarifying, engaging with, and disseminating digital policy knowledge have been proven to be relevant in an increasingly mature market. We hope to keep contributing over the next months and years – there’s more to come.

EU Startup Nation Standards: A QUICK EXPLAINER

Here’s the eight-point list of best practices and priorities, defined by EU Member States,  into Startup Nations:

  1. Fast startup creation, smooth market entry
  2. Attracting and retaining Talent
  3. Stock options
  4. Innovation in Regulation
  5. Innovation procurement (including tech transfer policies)
  6. Access to Finance
  7. Social inclusion, diversity, and protecting democratic values
  8. Digital-First

Startups and scale-ups are key to Europe’s future economy and society. They are essential players to make the ambitions with respect to the European Green Deal and the European Digital Strategy a reality. And the EU startup ecosystem has never been stronger.

According to Atomico’s State of European Tech report and Crunchbase’s latest global VC funding report, European startups had a record-breaking 2021, with 116 billion US dollars invested. To surf the wave, the European Commission set in the 2030 Digital Compass the ambitious goal of doubling the number of unicorns in Europe.

However, and despite having the biggest absolute number of startups (notably 246,000), the EU ecosystem loses this theoretical upper hand when compared to the USA, Singapore, or Israel, in per capita terms. The same about employed people, and ecosystem value.

Several factors explain this. From a European perspective, the reason number one is policy, regulatory and market fragmentation. If the EU wants to compete with powerful global tech hubs such as the US and China, it needs to catch up and do a lot on several policy fields by providing the best framework conditions for startups to grow, flourish and stay in the EU.

The bottom line is: Member States with startup-friendly legislation will be the ones to benefit from the resulting innovation and economic growth. This will be especially important for post-Covid economic recovery. Against this, the found solution was to gather the biggest possible number of countries around the same policy and regulatory priorities.

On 19 March 2021, and during the Portuguese presidency of the Council of the EU, the European Commission, with 26 EU Member States and Iceland launched the EU Startup Nation Standards of Excellence (SNS), a set of eight best practice policies that are hallmarks of a growth-friendly environment for startups and entrepreneurs, and designed to fuel the creation of the next generation of successful European tech giants.

Concretely, these standards answer real-life issues faced by startups, by making it easier to start a business, to attract capital, expand across borders and hire and retain top talent. And driving convergence and progressive harmonization of EU Member States on this is the sine qua non for the SNS to be impactful, and, more importantly, for European startups to achieve their full potential. But so is implementation.

As difficult as reaching a political compromise on policy standards touching upon issues that are way off-limits of EU competencies as per EU treaties may seem, the real test now is to make sure these practices are effectively implemented across all EU Member States.

The European Startup Nations Alliance (ESNA), , the new European entity leading the EU agenda for entrepreneurship, is based in Lisbon, Portugal and will be supporting the implementation of the SNS by the signatory countries, effectively giving substance to a partnership approach to governance. The 2022 activities calendar has just been announced, during the Mobile World Congress in Spain, and it will revolve around two fundamental principles: talent (focused on developing a fast track for Tech Visas) and financing (towards later stages of start-ups development).

One year into the launching of the SNS, it is important to learn how the tech & innovation ecosystem perceives the eight best practice policies in the SNS; what is missing, if anything; what should be prioritized; and what is the best way for ESNA to support the implementation by the signatory countries.

One thing is words. Another is a political compromise. And yet another is words carrying the weight of a political compromise with teeth to be properly implemented.

This has it all. Roll up your sleeves and join us then.

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Welcome to the podcast where digital policies are more clear and understandable. The Portugal Tech League explains and elaborates on new tech and legislative proposals impacting startups and the whole innovation ecosystem economy.

Every two months, a new topic is in the spotlight: It is framed and approached by Alisson Ávila and Carlos Lopes, with the presence of special guests – maybe you could be the next? The doors are open for you to send your perspectives and be featured in the next episodes.

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