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The European Investment Bank (EIB) has issued a call for increased innovation financing in the European Union to bolster the region’s tech leadership, according to a new report.&nbsp;
On July 24, the EIB released the report, which highlights what it called the “critical need” of removing investment barriers in order to channel savings into key areas of the EU market. 
<h2 id="eu-pushes-innovation">EU pushes innovation</h2>
The report, etitled “The Scale-up Gap: Financial Market Constraints Holding Back Innovative Firms in the European Union,” underscores the importance of greater investment in scale-up companies to maintain the EU’s technological edge and compete globally.&nbsp;
Therefore, closing the financing gap for these firms is seen as crucial for advancing technologies in green tech, artificial intelligence and quantum computing.
The EIB has been stressing this topic in the aforementioned technologies even back to June 2021, when it released a similar report entitled “Artificial Intelligence, Blockchain and the Future of Europe.”
Since then, the EU has become one of the first regions in the world to implement <a href="https://cointelegraph.com/news/eu-parliament-passes-landmark-ai-act">a robust set of regulations</a> for the AI sector and has begun actively passing laws pertaining to crypto and blockchain under its <a href="https://cointelegraph.com/news/mica-laws-crypto-europe-impact">Markets in Crypto-Assets (MiCA)</a> regulation. 
Related: <a href="https://cointelegraph.com/news/eu-backs-chromaway-blockchain-sustainability">EU endorses relational blockchain initiative for sustainable solutions</a>
However, in another <a href="https://www.eca.europa.eu/en/news/NEWS-SR-2024-08" target="_blank" rel="noopener nofollow">report</a> from May 2024, the European Court of Auditors said that the EU must “pick up the pace” to keep up with global leaders in the race to stay competitive in the fields of emerging technologies like AI. 
<h2 id="eu-challenges">EU challenges</h2>
However, the EIB says that the limited size and depth of EU capital markets pose significant challenges for innovative companies, particularly during the scale-up phase when financing is scarce.&nbsp;
This shortage has reportedly hindered firms’ capital accumulation, growth, productivity and employment opportunities. The report advocates for deepening Europe’s capital markets, especially the venture capital market, and highlights the EIB Group’s successful track record in supporting innovative companies and scaling up key technologies.
Nadia Calviño, president of the EIB, said they’re “ready to do more, especially in paving the way for a true capital markets union, a key priority to drive sustainable growth and job creation.”
European venture capital investment was highlighted to be significantly lower than in the United States, leading to slower capital accumulation for European firms compared to their Silicon Valley counterparts.
European scale-ups frequently rely on foreign investors, with most lead investors in funding rounds coming from outside the EU. This leads to local firms being acquired by foreign companies or listed abroad.
Magazine: <a href="https://cointelegraph.com/magazine/crypto-sec-turbo-toad-phishing-attack-and-evolve-data-breach/">Crypto-Sec: Evolve Bank suffers data breach, Turbo Toad enthusiast loses $3.6K</a>

European Investment Bank calls for more ‘innovation’ financing in EU

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