Innovate Europe Foundation
IE.F
The Innovate Europe Foundation (IE.F) is a think tank, forum-giver and dialogue partner in the dynamic environment of the German and European digital and tech economies.
ID: 592092094384-62
Lobbying Activity
Response to Cloud and AI Development Act
3 Jul 2025
The Innovate Europe Foundation (IE.F) welcomes the initiative for the Cloud and AI Development Act to reduce the EUs dependency on non-European providers. This dependency has long been a concern for European policymakers and industry leaders, as it poses risks to data sovereignty and security. By fostering a robust ecosystem of European cloud and AI providers, the EU can ensure that more and more of its technological infrastructure is Made in Europe. The IE.F identifies the lack of demand for European alternatives as the most critical issue contributing to the continent's current reliance on non-European technology. This lack of demand stifles innovation and discourages investment in local infrastructure. An increase in demand for European providers would catalyze investments by European companies in cloud and AI infrastructure, including the establishment of data centers. This, in turn, would address the existing data center capacity gap and create a more resilient and self-sufficient technological landscape. The IE.F is a part of the EuroStack industry initiative, which recently published a white paper outlining three actionable pillars to bolster Europe's technological independence: "Buy European," "Sell European," and "Fund European." These pillars represent a comprehensive strategy to transform the European tech market and reduce dependency on foreign providers. A "Buy European" policy focused on public procurement should aim to introduce European alternatives alongside existing non-European solutions. This approach, known as multi-sourcing, would not prohibit the use of non-European solutions but would ensure that European alternatives are considered and integrated into public sector technology stacks. By setting measurable targets for the inclusion of European tech in public procurement and committing to interoperability standards, this policy has the potential to transform the European economy. A study by Asteres, a French economic research firm, calculated the economic impact of redirecting 10% of cloud software purchases from the US to European providers by 2030. The study estimated an added value of 24 billion Euros and the creation of approximately 463k jobs (https://asteres.fr/en/etude/la-dependance-technologique-aux-softwares-cloud-services-americains-une-estimation-des-consequences-economiques-en-europe/), highlighting the significant economic benefits of Buying European. To "Sell European," Europe needs a cohesive and collaborative ecosystem, ideally incorporating open-source technologies and open standards. This ecosystem would encourage innovation and competition. A gap analysis of the market should be the foundation of this initiative, identifying existing European alternatives and areas where further development is needed. There are already numerous European alternatives available and ready for deployment, but a comprehensive overview of the market is essential to identify gaps and opportunities for growth. The "Fund European" pillar calls for public-private co-financing and the establishment of a "EuroStack Fund" following a fund-of-funds structure. This fund would provide the necessary financial resources to support the development and scaling of European cloud and AI technologies. By leveraging public and private investments, the EuroStack Fund would enable European companies to compete on a global scale and drive innovation in the tech sector. Creating a strong European cloud and AI ecosystem is in the interest of the sovereignty and prosperity of Europe and its citizens. A harmonized adaptation of these policies is crucial, which is why Policy Option 3 would be preferred. Of course, this type of regulation would need to go in harmony with the reform of the European public procurement directive. By aligning these two, the EU can create a cohesive and supportive environment for European technology providers, fostering innovation, economic growth, and technological independence.
Read full responseResponse to EU Start-up and Scale-up Strategy
14 Mar 2025
We agree that many startups and scaleups in Europe face the hurdles laid out here and support that they are being addressed. Startups and scaleups are the basis of innovation and economic growth, and their success is crucial for prosperity. This is why Europe needs to build stronger startup ecosystems, especially for critical sectors incl. deep tech, cloud computing, robotics, and AI based on European data. Among the hurdles mentioned, one that majorly determines the success of a startup is missing: sales. Because much of Europes economy is industrial, or ruled by less agile larger companies, startups often find it difficult to close enterprise sales. Indeed, many startups move to the US early in their development because American companies (not just investors) are more open to new things and can increase the sales momentum of a young company. Forcing European primes to buy European is for many a step too far, but the EU should do all that it can to incentivize large companies to purchase from European startups and scaleups. When looking at the #1 ranked accelerator in Europe, UnternehmerTUM, a key to its success is its network of 100+ corporations that support the startups it produces. We need more such initiatives at the EU level, perhaps even as an element of the EIC. Given the new geopolitical realities we face, one of the most important sectors in the upcoming years will be defense startups and scaleups. Placing them at the center of strategic initiatives will not only bolster Europe's security capabilities but also benefit the broader economy. The new realities of warfare strategy present a chance for Europe to show its innovation power, as many of the most innovative defense tech companies are now coming from Europe. Public procurement is also connected to the topic of security and sovereignty. Our public sectors have become dependent on non-European tech, making us all vulnerable to governments that might not be in alignment with our values anymore. Here, as mentioned before, encouraging a Buy European approach as called for in the EuroStack proposals in combination with a stronger focus on buying from startups and scaleups can benefit the EU long-term. We are aware that the Commission is working on fresh ideas for procurement, and we welcome this effort. Furthermore, Europe should leverage its strong research base more. The number of spin-offs should be increased through hubs, and founding a start-up should be encouraged at universities. Numerous studies have shown that the universities producing the highest number of successful startups and scaleups are also the ones teaching entrepreneurship and business skills. And yet, universities are still not measured by their economic/startup impact, and only a fraction of EIC funding goes into upskilling programs to help turn researchers into entrepreneurs. In relation to this, intellectual property rules should be streamlined and standardized. Regarding access to finance, it is essential to establish a Savings and Investments Union ensuring that startups have access to the capital they need to thrive. The current lack of integration on this side is a major hurdle to scaling successfully. We also support the 28th regime as a way to facilitate a quick and easy company set-up and a seamless path for investors. Circa 18% of European startup investment is cross-border, which shows how difficult it is to raise capital outside founders home countries. The different regulatory frameworks in the EU member states are holding startups back from scaling and fundraising quickly all over the continent. Finally, there is the essential question: How can we make Europe the most attractive destination to invest in, to start and to grow a company in the 21st century?. Instead of just trouble shooting, we encourage the Commission to take a user-centric point of view and enunciate a bold vision that aims for Europe to become the most attractive place for founders and investors.
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