The EU proposes an "Innovation Act" five weeks after launching its €5bn scale-up fund
On September 9, 2026, the European Commission proposed a "European Innovation Act" meant to help innovative European ideas grow and compete globally — just five weeks after the Scaleup Europe Fund (target: €5 billion) began making its first investments on August 4. The tight sequencing of the two moves suggests Brussels no longer treats Europe's AI lag as purely a capital problem.
On September 9, 2026, the European Commission announced a proposed "European Innovation Act," described as a horizontal piece of legislation meant to "develop, finance and scale" innovative European ideas so they can compete globally. The text is still only a proposal: it must go through the Parliament–Council codecision procedure, and recent precedents — the AI Act itself, or the "Digital Omnibus" that entered into force on July 27, 2026 — suggest a typical 12-to-24-month path to final adoption.
The proposal lands just five weeks after another Commission announcement: on August 4, 2026, the Scaleup Europe Fund — targeting €5 billion in commitments — began making its first investments in European growth-stage technology companies. Both initiatives target the same population (European tech and deep-tech scale-ups, AI included), but through different levers: direct funding on one hand, a legislative framework on the other.
The timing is not incidental to anyone familiar with Brussels' regulatory cycles: sequencing a financial instrument and, five weeks later, a horizontal law aimed at the same target population implicitly concedes that a capital fund alone doesn't close the competitiveness gap the Commission itself has diagnosed. The Draghi report on EU competitiveness (September 2024) put the additional investment needed to close the gap with the US and China at €750–800 billion per year — a scale that puts the Scaleup Europe Fund's €5 billion target in perspective against what remains to be done.
For European industrial, energy and aerospace companies building or considering AI solutions from European suppliers, the Innovation Act is a signal worth tracking rather than an immediate lever: its actual content — a genuine single market for scale-ups, a harmonized insolvency regime, a European company statute, or something narrower — has not yet been settled, and adoption will likely take several quarters. The fund, by contrast, is already operating.
Analysis by
Cardan-AI Intelligence
Our research and analysis unit, dedicated to applied AI for business, industry and regulatory compliance.
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