The Start-up and Scale-up Initiative Presentation to IGLO - - PowerPoint PPT Presentation

The Start-up and Scale-up Initiative

Presentation to IGLO Innovation Working Group Brussels, 11 May 2017

The Start-up and Scale-up Initiative

• 1. Why did we launch it?
• 2. What are we proposing?
• 3. What are the next steps?

Range of initiatives already taken on start-ups and scale-ups

• Stakeholder – e.g. Startup Manifesto
• Local/ Regional/ National
• Various EU initiatives e.g. Innovation Deals,

Startup Europe

But evidence suggests that more can be done

• Not that much difference between EU and US in

number of start-ups or initial survival rates

• But nowhere near as many EU start-ups scaling up

into larger firms as in US

• And even those who grow, do not grow as fast.
• Yet such scale-ups create disproportionate gains to

economy and jobs (4% of the firms generate 70% of all new jobs)

• So: need to focus on scalability and the barriers to

this.

Single Market Strategy

The Commission will launch a Start-up initiative to initiate a broad assessment of requirements for start-ups and ways to reduce such requirements and, where this is not possible, to facilitate compliance.

Public consultation 2016: key facts

Structured around the company life cycle

571 replies

53% from entrepreneurs

16 written contributions Reaching beyond the EU

Start-up: main obstacles to start a company

7

Least important Most important

1 2 3 4 5

72% 4.2 66% 4.0 61% 3.7 55% 3.7 46% 3.5

Access to finance Rules and costs of hiring workers Resources required to navigate overall regulatory complexity Tax compliance costs (filing and paying taxes) Procedures and costs to access industrial and/or IPRs Average ranking

Scale-up: main obstacles to expand a company

8

Least important Most important

1 2 3 4 5

Understanding and complying with employment law Compliance costs: tax regulations (not VAT) Compliance costs with VAT regulations Securing financing for expansion Uncertainty about regulatory requirements

65%

4.0

58% 3.8 54% 3.8 53% 3.8 53% 3.7

Outside EU: 4.2 Outside EU: 4.0 Outside EU: 3.9 Outside EU: 3.9 Outside EU: 4.2

Average ranking

So: evidence from economic analyses and public consultation points in same direction. Need to do more to support survival beyond 2-3 years and scaling up. Three broad sets of issues:

• A. EU start-ups still face too many regulatory and

administrative barriers especially cross-border; B. there are still too few opportunities to find and engage with potential partners; C. there are still too many problems accessing finance, particularly to scale up.

Start-up and scale-up initiative

• Coordinated approach across EU policies,

building on measures in place or being developed;

• Targeted set of practical measures;
• Partnership with public authorities and

stakeholders.

• A. Removing the barriers

Commission will support a major, comprehensive and detailed peer review

• f

all Member State rules and practices towards start-ups and scale-ups.

Addressing tax burdens

Comprehensive package to reduce the complexity and fragmentation of VAT system:

• 1. simplify and extend MOSS;
• 2. targeted VAT simplification package for SMEs,
• 3. definitive VAT regime for cross-border trade

Common Consolidated Corporate Tax Base (CCCTB) incentives for businesses to grow cross-border. Broaden forthcoming guidance on best practice in Member State tax regimes for Venture Capital.

Second chance

The Commission will work with the European Parliament and the Council […] to secure timely adoption and implementation of the proposal

• n

preventive restructuring frameworks, second chance for honest entrepreneurs and increased efficiency of restructuring, insolvency and discharge procedures.

Single Digital Gateway Startup Europe Digital Innovation Hubs Enterprise Europe Network (EEN) Dedicated Scale-up Advisors

Navigating Information

• B. Creating opportunities

Ecosystems

Reinforce Startup Europe Coordinate EU work… bring stronger coherence… link up national, regional… stakeholders & ecosystems Connect start-ups: pilot matchmaking, extend Erasmus for Young Entrepreneurs

Procurement Opportunities

(i) establish innovation brokers (COSME) to build networks of buyers interested in public innovation procurement, linking with innovative businesses and helping access risk funding (ii) encourage all Member States to set ambitious innovation buying targets (iii) provide guidance

• n

innovative procurement

• Innovation Partnership

Skills

Build on the New Skills Agenda:

• Digital Skills and Jobs Coalition
• Blueprint for Sectoral Cooperation on

Skills

• Big data tool
• European Entrepreneurship Framework
• Digital Competence Framework
• Scale up the EIT for entrepreneurship,

management and innovation skills Encourage Member States to make more use

• f Erasmus+ Knowledge Alliances, and the

HEInnovate self-assessment tool

• EU Blue Card

Innovation Opportunities

• Changes

to Horizon 2020

• support

breakthrough innovation projects with the scaling up potential

• European Innovation Council
• EIT - investment
• Innovation Radar
• Innovation Deals & regulatory sandboxes
• Measures to support use of IPR by SMEs

Social economy and enterprises

Build

• n

the Social Business Initiative through: better access to finance, access to markets, regulatory frameworks by advising Member States on policy design. Explore how to facilitate uptake

• f new technologies & business

models, support impact financing

• f

the social economy and enterprises (e.g. G20 Inclusive Business platform) .

• C. Access to finance

Contrary to US, venture capital for later stage rounds is still poor in EU, also because funds are small and fragmented.

0,00% 0,05% 0,10% 0,15% 0,20% 0,25%

Early stage Late stage Venture capital for start-ups and scale-ups as % of GDP (2015) Venture capital investment in Europe (2015)

Access to finance

• The Pan European Venture

Capital Fund of Funds.

• Tax incentives for

investments into start- ups/scale-ups.

• Additional incentives to

venture capital

• Coordinate pan European

platform on crowdfunding

• Assessment of gaps in

alternative sources of finance

What are the next steps?

• Engagement with Member States and

stakeholders

• Delivery
• 4 legislative actions already adopted
• 30 other initiatives already underway