How universities can unlock Europe’s deep tech potential

Deep tech holds the power to transform industries and solve some of humanity’s greatest challenges, from quantum computing and synthetic biology to space technologies and clean energy. Yet, despite Europe’s excellence in scientific research, it consistently lags behind other regions in turning discoveries into scalable, market-ready innovations, which has been dubbed as “the European Paradox”.

The problem is not the science. Europe produces outstanding research and talent. The problem lies in the structures, incentives, and pathways that determine whether breakthroughs ever leave the lab. Without addressing these systemic barriers, Europe risks watching its scientific excellence fuel industries elsewhere.

At UIIN, we recently contributed to a major EU initiative on research commercialisation, drawing on insights from over 75 interviews with venture capitalists, technology transfer managers, policy experts and university leaders. What emerged was clear: universities sit at the very heart of the deep tech ecosystem — but too often their policies and practices unintentionally hold innovation back.

Europe’s deep tech bottleneck

Deep tech, which are innovations rooted in scientific discovery and engineering, is unlike other forms of technology. While the United States and China continue to dominate in translating their scientific (deep tech) discoveries into commercial ventures, Europe remains underpowered. Several challenges stand out:

• Long R&D cycles and investor reluctance. Deep tech requires long development timelines and high capital intensity. Most investors, conditioned by software models, hesitate to back ventures that take years to scale. Nearly half of late-stage investment in European deep tech currently comes from US-based funds.
• A fragmented “single” market. Despite the EU’s promise of a single market, divergent national regulations mean that cutting-edge solutions approved in one country may face barriers in another, limiting scalability and undermining competitiveness.
• University spin-out practices that deter growth. Many institutions demand large equity stakes or rigid licensing terms, which discourage investors and demotivate founders. As one interviewee put it, “Universities often take too much equity in start-ups, and no one seems to know why”.

The result? Promising ventures are stifled before they can scale, and Europe’s global competitiveness suffers.

The university dilemma

Universities are natural incubators for deep tech: They produce the research, the talent, and the intellectual property that underpin most breakthroughs. But to truly drive Europe’s innovation agenda, universities must shift from being knowledge holders to becoming innovation enablers.

Currently, universities are both the source of Europe’s deep tech strength and part of its weakness.

Too many institutions demand excessive equity stakes in spin-outs, apply rigid licensing terms, or treat entrepreneurship as a distraction from academic excellence. The outcome: investors walk away, founders lose motivation just as quickly as they run out of funds, and promising companies never leave the lab.

If universities remain stuck in these old models, Europe will continue to bleed talent and innovation to ecosystems that make it easier, and more attractive, to succeed.

From knowledge holders to market makers

But universities also hold the solution. In our research with over 75 experts from across Europe, we saw the outlines of a very different role for universities: not as passive knowledge holders, but as orchestrators of the deep tech ecosystem.

That means:

• Reforming spin-out equity models so founders and investors see universities as partners, not landlords.
• Transforming Technology Transfer Offices from gatekeepers of IP into matchmakers who connect researchers with funders and markets.
• Opening labs and infrastructure to help early-stage ventures cut costs and accelerate development.
• Training researchers in entrepreneurial skills so they are able to take an impact-beyond-publication approach.
• Advocating for a truly single market in deep tech — without which scaling across Europe remains nearly impossible.

Why now?

Europe doesn’t have decades to figure this out. As Mario Draghi argued in his recent report on EU competitiveness, we must urgently modernise our economic engine with innovation — and especially deep tech — at the core.

This is about far more than technology. It’s about sovereignty, resilience, and Europe’s ability to lead the industries of tomorrow. Universities are indispensable to this vision, but they must be willing to evolve.

The way forward

At UIIN, we believe universities hold the missing piece of Europe’s deep tech puzzle. By shifting incentives, reforming spin-out models, and embracing their role as ecosystem builders, they can unlock the full potential of academic innovation and help Europe lead in the industries of tomorrow.

One of our latest policy briefs, Why Most Deep Tech Never Reaches the Market — And How Universities Can Change That, offers 10 practical  recommendations for institutions ready to make this leap.

The message is stark: if Europe fails to empower its universities, we risk watching our scientific breakthroughs power someone else’s economy.

The race for deep tech leadership is already underway. Europe still has the chance to win it. But only if our universities act not just as knowledge producers — but as innovation enablers, market makers, and ecosystem builders.

Ready for more?

In our brief, Why most deep tech never reaches the market – and how universities can change that, we draw on the insights from over 75 expert interviews across Europe, conducted as part of a major EU deep tech initiative on research commercialisation, alongside the latest reports and academic publications, to explore how universities can positively impact the European deep tech ecosystem in addressing its key issues.

Jose Villagran-Polo (author) is the Deputy Manager R&D Projects at UIIN and works on topics related to university-business collaboration, entrepreneurial education and the role of university-based incubators in their regions.