The head of the European Patent Office (EPO), based in Munich, has issued a stark warning: for the European Union to truly contend in the global race for emerging technologies and foster market-leading enterprises, it must prioritise the deeper integration of its single market.
Speaking on Euronews’s “12 Minutes With” program, EPO President António Campinos conceded that Europe has “more or less lost” the global dominance battle in key areas like cloud computing and Artificial Intelligence (AI). However, he remains optimistic, pointing to “technological battles where we (Europe) can bring incremental improvements.”
The EPO, a significant institution in Munich, processes an impressive 200,000 patent applications annually. This streamlined process allows inventors and companies to secure patent protection across up to 46 countries with a single application, underscoring the potential for a unified European approach to innovation.
The Next Frontier: Quantum Technology and Europe’s Innovation Challenge
Campinos identified quantum technology as the “next big revolution.” He noted that while the field is currently navigating the space between fundamental research and developmental research, it is rapidly approaching market readiness. This critical juncture, he explained, is precisely where “Europe often loses the battle of competitiveness, of innovation.”
While Europe is globally recognised as a hub for innovation and research, startups frequently encounter significant hurdles when attempting to commercialise their groundbreaking inventions. “We have a problem of scale and of attracting sufficient funds in order to bring ideas from the lab to the market,” Campinos stated.
Defragmenting the Market: The Key to Scaling Up
To address this, Campinos emphasised the need for strategic focus. “And to focus, we really need to defragment the internal market,” he asserted. He advocated for the integration of Europe’s stock markets, a move he believes would empower startups in emerging sectors to scale up effectively and evolve into “global players.”
This call for deeper integration echoes sentiments expressed by EU leaders. In February, the bloc’s 27 leaders convened for a retreat, joined by former Italian Prime Ministers Mario Draghi and Enrico Letta. The discussions centred on revitalising the EU’s economy and dismantling regulatory barriers.
Draghi and Letta, authors of influential 2024 reports on restoring the EU’s competitive edge against formidable global competition, have also called for enhanced integration within the bloc across sectors such as energy, capital, telecommunications, and innovation. Despite the clear diagnosis of the challenges, tangible progress in implementing these crucial reforms has unfortunately stalled.
EU Inc: A Promising Step, But More is Needed
In a significant development, the European Commission recently unveiled proposals for a new, EU-wide company regime dubbed “EU Inc.” This initiative aims to simplify the process of establishing a company, allowing for online registration within 48 hours for less than €100, and adhering to a single set of rules across the entire bloc.
Campinos welcomed EU Inc as a crucial step towards enabling startups and companies to scale up across the Union. However, he stressed that further action is imperative to “defragment” the internal market more comprehensively.
“We really need to remove as many bureaucratic barriers as we can in order to free a little bit of space for macro entities, for research centres, for universities to bring as many ideas from the lab to the market,” Campinos urged. He highlighted the substantial economic cost of inaction, estimating that current barriers represent a non-tariff impediment of approximately 40% to 60% for goods and a staggering 100% to 110% for services, potentially leading to lost GDP generation of up to €700 billion.
Rethinking Competition and Capital Markets
Campinos believes that adapting the EU’s competition rules to align with global market realities and integrating the bloc’s stock exchanges are vital for creating greater certainty and opportunity for startups to achieve significant scale.
“We need to look into it because in the past 50 years, we haven’t generated a $100 billion company or a trillion-dollar company, which is basically the value of many US and Chinese companies,” he remarked, underscoring a significant gap in the creation of large-scale European enterprises.
French President Emmanuel Macron has set a firm deadline of June for a new “agenda” focused on the EU’s economic revival. This agenda is expected to encompass the proposed “Savings and Investments Union,” which would consolidate EU capital markets into a unified pool of financial securities.
The palpable sense of urgency for change is prompting a group of EU governments, keen on deeper integration, to explore the possibility of proceeding without the participation of all 27 member states. This scenario could establish a novel precedent for the operational framework of the European Union.
- Watch the full interview on ’12 Minutes With’ on Thursday, March 26, at 17:45 CET.
