A recent study by the European Union Intellectual Property Office (EUIPO), headquartered in Alicante, has revealed that Europe is losing a significant amount of annual funding, estimated between 30 billion and 120 billion euros, by not adequately valuing the intellectual property of its companies. This situation contributes to nearly a third of the major tech companies created on the continent eventually relocating their headquarters outside the European Union.
The so-called Draghi Report already warned about this trend, indicating that up to 30% of 'unicorns' (startups valued at over 1 billion dollars) founded in the EU between 2008 and 2021 relocated to non-EU countries, primarily the United States. This exodus is attributed to the difficulties emerging companies face in obtaining financing, especially when they reach a certain size.
The problem lies in the composition of these companies' balance sheets, which are mostly made up of intangible assets such as patents, designs, or registered trademarks. The European financial system and venture capital funds are reluctant to accept these assets as collateral for granting loans, unlike what happens in other economies such as the American or Korean. This funding gap is a key factor explaining the widening difference between the GDP per capita of the United States and Europe, which has increased from 17% to 30% between 2002 and 2023.
“"Brands and other intellectual property rights are not an end in themselves. They connect ideas and markets, helping companies bring innovation to those markets. Given that intellectual property assets now represent an increasing share of business value, it is essential to ensure an adequate financial environment for the business sector, particularly for innovative SMEs, startups, and scale-ups, so that they can bring their ideas and intellectual property assets to market."
The EUIPO report emphasizes that Europe's problem is not the generation of ideas or innovation, but their commercialization and use for financing. Intellectual property-intensive sectors in Europe generate approximately 48% of the EU's GDP and about 31% of employment. However, only 13% of companies holding intellectual property rights have attempted to obtain financing through their assets, and most have never conducted a professional valuation.
To address this issue, the European office proposes coordinated action in five areas: raising the visibility of intellectual property, assigning it a credible value, leveraging its value for lending, creating an empirical basis, and strengthening coordination among stakeholders. These measures aim to boost growth, mobilize private capital, and strengthen Europe's innovation sovereignty.
