The EU's newly-installed innovation commissioner, Máire Geoghegan-Quinn, listed venture capital amongst a series of bottlenecks to innovation in Europe when she briefing journalists on her first day in the job.

Geoghegan-Quinn believes the political will now exist for a breakthrough on access to risk finance, now that the innovation agenda has taken centre stage for Commission President José Manuel Barroso's new mandate.

"Europe can, and we will, be a world leader in a range of sciences, including nanotechnology and biotechnology. I want Europe to be a vibrant innovation economy, a true 'Innovation Union', in which companies will want to do business and invest and where researchers from all over the world will want to work," Geoghegan-Quinn said today.

Momentum for rethinking Europe's venture capital infrastructure has been building for some time.

The Commission is currently drafting an innovation action plan which is expected to look in detail at what can be done to help Europe compete with the US in converting research results into marketable products.

Georges Noël, director of the European Private Equity and Venture Capital Association (EVCA), said public support schemes should be used to ensure that professional venture capitalists can "fulfil their role of very selectively backing the best innovation Europe has to offer".

Around 90% of venture capital in Europe is invested in SMEs, according to the association, which believes cooperation between the public and private sectors could provide a major shot in the arm for a sluggish economy.

"We are proposing a specific programme focused on attracting long-term private sector funding for European venture capital by incentivising a privately-managed 'fund of funds' to select the best European venture capital managers and sell their potential to investors across the world," Noël said.

"This programme will work in partnership with existing sources of public sector finance, like the European Investment Fund, and will serve to broaden the current venture capital investor base," he added.

The 'fund of funds' could enable large banks, pension funds and insurance companies to channel investment to promising start-ups while spreading their risk. They may also develop into specialised funds targeting areas like clean technology and biotechnology, although that remains to be worked out.

Next Steps

• 2 March: Private Equity and Venture Capital Assocaition (EVCA) hosts a meeting on mobilising funds for innovation.
• 3 March: European commissioners meet to discuss future innovation policy in the context of the EU's '2020' strategy.

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