Declaration on the Startups Nations Standard of Excellence, to support startups in Europe at every stage of their development. On March 19, coinciding with the celebration of the European Union’s Digital Day, 24 Member States committed to take action to support the growth of startups in the EU.
Startups and scaleups play a key role in Europe’s economy and society, before and during the Covid19 crisis and will be even more so in the post-COVID era. The role that startups can play in the recovery from the current crisis, and in accelerating the green and digital transformation, cannot be underestimated: companies that have a proven ability to develop breakthrough innovations in response to real-world needs, creating new jobs and building synergies with European businesses.
In the recent Digital Compass Communication, the Commission suggested a 2030 target of doubling the number of unicorns in the EU. This target can be achieved through actions such as those that create more favorable conditions for startups at all stages of their life cycle, e.g. simplifying startup processes to attract talent, using stock options, participating in public procurement.
At the member state level, access to growth finance is critical: national policy makers can take actions that increase the European venture capital available to startups entering the growth phase.
Today, however, startup founders face considerable challenges directly related to the COVID crisis. For example, according to the State of European Tech report, nearly half of European entrepreneurs found it more difficult to obtain funding in 2020, which for many was compounded by the challenge of declining sales due to the COVID crisis.
According to the same report, in 20 EU member states, funding raised by startups in 2020 was lower than in 2019. Addressing these challenges is particularly important for the growth and expansion stage where startups need much larger investment inflows.
To this end, the European Commission, together with Member States and stakeholders, has identified a number of best practices that are characteristic of a growth-friendly environment. This environment is essential for the EU’s transition to a sustainable, resilient, open and digital economy, and for unleashing the huge innovation and growth potential of its start-ups.
Thus, 24 EU member states and Iceland have signed the “EU Startup Nations Standard of Excellence”, with the aim of ensuring that all startups and scaleups in EU countries benefit from the best practices that underpin the most successful startup ecosystems in Europe and the world.
The signatory countries of the EU Startup Nations Standard of Excellence are:
Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden. Iceland also signed the declaration.
To this end, member states commit themselves to undertake actions including:
- Establishing a clear EU-wide benchmark for defining the key characteristics of a Startup in all Member States; which would facilitate the design of common startup support policies.
- Emphasize that sustainable growth, as well as a favorable environment for entrepreneurship, are critical for the future global success of startups. With a favorable framework, a large number of new companies will be able to achieve global success as they move from “standup” to “startup”, from “scaleup” to “exit”, e.g.: in the form of IPO or M&A. All this, sharing best practices, from Europe and other countries, and taking action at the national level to implement best practices that support startups and scaleups at all stages of their development.
Through the establishment in 2021 of a startup nations hub, which should promote and enable the exchange of best practices between signatory countries and the creation of a common data platform for all member states, which will provide valuable information across the EU.
The platform will also facilitate the measurement and monitoring of progress on the basis of regular reporting by member states on the implementation of best practices and thus help each country to become an “EU start-up nation”.
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