Innovation or Bureaucracy?

LinkedIn blog post, 12/07/2025, by Sven Franck (en français , in Deutsch)

TL;DR - I recently submitted a dossier for the European Defence Fund. Our SME consortium passed the threshold with high grades for innovation. However, another project scored better and since only one project was funded, we found ourselves accepted but sans budget.

We lost points on bureaucracy: milestones too late, not enough KPIs and not building on the ongoing project, which purchases our equipment but does not share their findings since they competed against us for the budget. Reason to write about "public money, public results" or why the Commission does not finance all approved projects considering the ubiquitous eager-beaverness to spend 5% worth of billions on European defence.

Financing laggards instead of innovators

But instead I want to highlight the EU's lack of supporting innovation. Last month, the 🇮🇹 IEP and 🇩🇪 Ifo institute published a report on what's wrong with EU funding. In a nutshell: large corporations influence topics towards marginal innovation. They scoop up most of the budgets and often show little results, while SMEs show most promise but only receive crumbs.

Example? Our project. Virtual radio signal processing instead of dedicated hardware means transitioning from 4G to 5G by software update instead of replacing cellphone towers. Amarisoft is best in class in vRAN and in our consortium, yet the project was won by the large corporate group with Nokia and Ericsson. The EU finances the laggards, not the innovators.

What the US does well

Abroad you often read cynicism of our bureaucratic "EU model": Projects lasting only 2 years, so many reports. No innovation but all reports written? Perfect. Breakthrough innovation but no follow-up funding? Well, find a new call, write a dossier and wait if you win it. By that time, the breakthrough innovator already left for the US or China.

The US also knows "market uptake": the US Small Business Act reserves 23% of public orders for SMEs to facilitate wider industry adoption. The EU also has its "Small Business Act for Europe", but hold your horses, it only makes non-binding recommendations to think about SMEs 🤔

The new EU budget is soon up for discussion (MFF). The world changed significantly since the 2020-2027 budget was made. If the EU is serious about autonomy and technological independence, we should not only discuss how much budget the EU allocates to R&D but also where it comes from (say digital taxes), who receives funding and with how many bureaucratic strings attached.

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