High-level expert group provides the European Commission with policy advice to reshape research and innovation policymaking in complex, entangled times.
What is the relationship between acupuncture, or pressure points, and policymaking? The expert group on the Economic and Societal Impact of Research and Innovation (ESIR) published a report called “Policy Pressure Points” explaining this metaphor by providing the European Commission (EC) with strategic recommendations to address Europe’s pressing challenges.
The report calls for a radical rethinking of how Europe makes policy in an era of interconnected crises. It argues that traditional, siloed, and linear approaches are no longer fit for purpose in a world shaped by climate breakdown, technological disruption, geopolitical instability, and rising inequality. Instead, it proposes a “policy acupuncture” approach, targeting strategic leverage points (or critical nodes) across Europe’s social, economic, and ecological systems to unlock cascading, system-wide change (and thus releasing blockages). The paper outlines ten priority “pressure point” interventions, from redefining economic value and mobilising finance to boosting talent, data sovereignty, and long-term resilience, in order to enable Europe to turn crisis into opportunity and strengthen its global leadership. Out of the ten pressure points, two intervention areas are in the remit of innovation policy and will be detailed in the subsequent paragraphs: (i) Enabling Finance for Innovation Excellence at Scale, and (ii) Talent, Brain Drain, and Migration: Building Europe’s Innovation Magnetism.
For finance, ESIR recommends strengthened and agile European financing for startups, scaleups, and research and innovation activities. It does so by providing examples that have long-term, medium-term and short-term impacts on EU innovation ecosystems. To create a long-term impact, the EU should simplify the process of establishing company foundations. Several countries already have legislation in place which supports foundations, particularly those funded by the corporate sector, which also support philanthropic activities and generate significant economic effects. However, legislation differs greatly from one Member State (MS) to another, thus the need to streamline the approach at the EU-level. To reach medium-term impact, the EU should significantly improve its venture capital (VC) market: despite the steady growth of the European VC market, its fragmentation still limits its full potential. The authors commend the Swedish state initiative Saminvest, which could serve as a valuable example for the EC on how a governmental VC company can act as an anchor investor in new VC funds, and thereby attract private investors. The EC is already working on a similar initiative, namely the Scaleup Europe Fund, which was announced in the EU Startup and Scaleup Strategy (and is expected to be launched early 2026). However, ESIR also recommends that the EC helps MS establish similar policies to create such domestic VC funds. In the short term, the EU should work on attractive stock-option schemes to help attract talent. Favourable equity compensation frameworks are crucial for creating successful startups as well as attracting and retaining talent. Hence, ESIR recommends harmonising and simplifying equity taxation policies across the EU by taxing stock options only upon realisation (and at competitive rates), rather than immediately upon grant, as in some EU MS.
The report continues on the node related to talent attractiveness and transatlantic brain drain, with the following objective: “closing widening skills’ gaps in areas that are critical to enabling transformation and compensating for a rapidly ageing population”. According to the authors, one main driver of the EU-US brain drain is the significant salary disparity between EU and US tech hubs: senior software engineers in Silicon Valley receive pay checks nearly four times bigger than their counterparts in Paris. The authors continue by stating that Europe’s quality of life and social security system are also not sufficient factors for talent retention. In addition to targeted investments in strategic technologies and robust, long-term research and innovation policies, structural solutions are needed to tackle these challenges: (i) EU-wide tax breaks for companies hiring elite tech talent, inspired by the Dutch 30% ruling model, with additional programmes to facilitate the integration of families of these high-tech talents, (ii) address current complex procedures to issue visas by introducing an “EU Tech Visa” that would allow seamless mobility across all MS for tech professionals, (iii) reform and modernise labour law for high-growth sectors (e.g. simplify hiring and termination processes, reduce administrative burdens, and introduce flexible work arrangements), and (iv) accelerate EU tech and innovation branding that promotes Europe as a fertile ground to thrive, innovate, and lead. Many proposals in this chapter are again reflected in the EU Startup and Scaleup Strategy, notably with the Blue Carpet Initiative that should “support the attraction and retention of highly skilled and diverse talent from within the EU and from non-EU countries”. Regarding the latter point on branding, ESIR notes that the US captured this tech talent narrative, albeit it being far from accurate. However, a good signal of this narrative shift can be seen on the European startup scene with many grassroot movements gaining significant momentum, such as EU-INC (proposing a standardised pan-European legal entity), project EUROPE (a new early-stage VC fund backed by founders of major EU Tech companies [Klarna, Mistral AI, or Shopify to name only a few] to support the next generation of technical builders under 25 years old – and which has selected a Swiss-based startup called Haicker as part of the first cohort), or simply through videos/podcasts that tell European tech stories such as the one from the Innovate Europe Foundation.
ESIR’s proposals have significant potential to enhance the attractiveness of the European tech ecosystem. In that sense, the report concludes that Europe can turn its complex crises into an opportunity for regeneration and leadership by acting on strategic policy “pressure points.” Rather than trying to do everything at once, it calls for precise interventions, such as reforming fiscal rules, embedding well-being and climate justice in EU goals, and empowering local missions, which would ultimately unlock cascading change across systems. This “policy acupuncture” mindset shifts policymaking from control to choreography, balancing foresight with agility, transforming fragmentation into flow and complexity into competitive advantage.