EU Startup and Scale-up Strategy is promising, but national competences must be respected

In response to the European Commission’s recently unveiled Startup and Scale-up Strategy, the Malta Business Bureau (MBB) has welcomed the initiative as a bold and timely step towards strengthening Europe’s standing as a global hub for innovative startups and high-growth scale-ups.

While applauding the Strategy’s ambition, the MBB has cautioned that without real progress in areas such as Capital Markets Union – especially in ensuring sufficient late-stage funding – the Strategy risks falling short of its transformative potential.

Commenting on the development, MBB CEO Mario Xuereb stated: “The EU Startup and Scale-up Strategy presents a significant opportunity for Maltese entrepreneurs. By addressing long-standing barriers such as regulatory fragmentation and limited access to scale-up finance, the strategy can significantly boost Malta’s innovative business landscape. Measures that simplify cross-border establishment and improve access to funding and markets could position Malta as a hub for tech entrepreneurship and innovation.”

Among the most promising elements of the Strategy are the proposed regulatory sandboxes designed to foster innovation, and the ‘EU Blue Carpet’ initiative, which aims to streamline pathways for attracting top global talent. These tools are expected to help start-ups navigate early regulatory hurdles and gain access to high-quality expertise and resources across the Single Market.

However, the MBB has expressed reservations about certain aspects – particularly the proposed 28th regime initiative, which seeks to simplify rules for companies operating across borders within the EU. While supportive of the objective to ease cross-border operations, Xuereb stressed that this must not come at the expense of national competences in sensitive areas such as insolvency, labour, and taxation laws.

The Commission’s Strategy acknowledges the essential role start-ups and scale-ups play as drivers of European competitiveness, job creation, and technological progress. Key initiatives include the simplification and harmonisation of regulatory frameworks, increased financial support via instruments such as the European Innovation Council (EIC) and the Scaleup Europe Fund, and mechanisms to facilitate rapid market entry and expansion.

Further proposals – such as the European Innovation Act and the creation of a European Corporate Network to encourage collaboration between start-ups and established corporates – underline the Commission’s ambition to foster a more interconnected and innovation-driven ecosystem, particularly in strategic sectors underpinning Europe’s long-term competitiveness.

Yet, Xuereb emphasized the importance of turning words into action:

“The success of this strategy will rely heavily on consistent and coordinated political action at both the European and national levels. Strategies on their own do not yield results. Their effectiveness relies on the political will to implement reforms swiftly and consistently. Regulatory harmonisation, increased cross-border cooperation, and sustained investment commitments must be matched by determined efforts at all levels.”

He also called for more efficient access to centralised EU funds: “It is imperative that centralised funding is made accessible to start-ups and scale-ups across the EU through simple procedures.”

“This Strategy sets the right direction. We hope Malta proactively embraces the opportunities it presents. Otherwise, we risk missing out on promising business ideas and undermining the ability of innovative enterprises – particularly those aligned with the green and digital transitions – to grow and compete at scale,” Xuereb concluded with a note of cautious optimism.