EIT Knowledge and Innovation Communities  – uncovering the major impacts of a 15-year experiment

In 2009, during the aftermath of a global financial and economic crisis, the European Union asked the European Institute of Innovation and Technology (EIT) to do something unprecedented. It then launched a novel 15-year partnership model, designed to create networks between research, education and innovation actors across Europe that leveraged knowledge to solve big global challenges (such as climate change, sustainable energy and digitalization).So began the story of the EIT’s Knowledge and Innovation Communities – or KICs, for short.
Initially, the EIT created three:EIT Climate-KIC aims to foster climate entrepreneurship, nurture education and learning, and drive innovation to mitigate climate change and enable adaptation. It integrates a ‘systems approach’ with sustainable economic development, social change and technology solutions across Europe to advance climate mitigation, adaptation and environmental regeneration.
EIT Digital was created against the backdrop of a fast-accelerating digital world driven by data, platforms and the network economy. It mobilizes its network to help Europe adapt to digitalization in a distinctly European, inclusive, fair and sustainable manner. It does so by building up talent and skills through educational activities, as well as through support to venture creation and scaling.
And EIT InnoEnergy brings people and resources together to accelerate the energy transition. It builds and funds solutions that are on the cusp of new industries, and supports businesses and people in delivering them to market.
Through a distinct blend of public and private partnership and its thematic expertise the EIT now boasts nine diverse KICs with the supported start-ups collectively valued at €72 billion.
This is a key achievement, one that would not have been possible without the commitment and collaboration of EIT Community partners and the spirit of its learners and entrepreneurs.
But in 2024, as the 15-year support period of the first KICs ends and, with it, most EIT funding under Horizon Europe. So, it is time to ask whether this experiment was successful in creating financially sustainable partnerships.
An era of impactIndependent studies have assessed positively the EIT KICs’ achievement and progress towards achieving financial sustainability, being able to generate significant private and public investments for specific activities. This is important for such a partnership model, aiming for a self-sustaining ecosystem delivering major societal and economic impacts throughout Europe.
Before we get deeper into the financial sustainability, let us quickly explore its achievements:
With over 300 partners, EIT Climate-KIC has become a key public-private partnership focused on climate innovation. It has helped build over 2300 start-ups, which generated €1.1 billion of investment, created 15,000 full-time jobs and powered 790 new products.
EIT Digital has upskilled hundreds of thousands of people through its education portfolio, helped create 275 start-ups and supported the scale-up of over 720 ventures who have gone on to raise €660 million in external investment. It has also supported activities of 20 centaurs (companies surpassing $100 million in annual recurring revenue) and taken equity in 200+ start-ups.
Finally, EIT InnoEnergy is an active sustainable energy investor and one of the largest cleantech investors. It boasts more than 200 portfolio companies in areas like energy storage, transport, renewables and sustainable built environments, which have collectively raised over €4.8 billion from public and private sources.
Paths to financial sustainability
Building on the thematic expertise of each KIC, the EIT’s steering has from the beginning guided these communities toward the impact they have and will continue to deliver. This includes their eventual financial independence.
The EIT has a requirement that its funding for KICs must leverage private funding: partners must make meaningful financial and non-financial commitments to participate in EIT KICs. This directs EIT funding specifically toward cooperation, ensures projects are market-driven from the start and accelerates the leverage of the EIT’s funding so that public funds are efficiently spent. In turn, EIT KICs can source, take equity and help scale the most successful innovations that grow both with their value to citizens and their market share. Added to that, where successful, revenue from these investments then return back into the KICs.
While the EIT’s overall steering process is similar for each KIC, it also considers the specifics of the sector. For example, innovation in the energy sector is quite different from in the digital, healthcare or raw materials sectors. And each KIC has taken a slightly different path in generating both impact and sources of funding.
EIT InnoEnergy has a self-funding focus centred on private equity investment – its results are a major achievement of the EIT model. It recently announced a financing round of €140 million from private partners – income that it will reinvest into its public mandate.
The financial sustainability of EIT Climate-KIC revolves around a systems-innovation-as-a-service model, in which it employs its experience in climate innovation to help complex systems such as cities make the transition to a zero-carbon future.
EIT Digital’s income streams come from private equity of supported companies, partnership and tuition fees for its in-demand education programmes. EIT Digital is set to provide €4 million in scholarships during 2024-28.
The EIT KICs also became important EU service providers and beneficiaries over time, supporting the implementation of a wide set of European initiatives financed by other EU programmes, in particular in the field of skills development, using their wide cooperation networks as a key distinguishing feature.
EIT Climate-KIC was chosen by the European Commission to coordinate the Net Zero Cities Project, under Horizon Europe, bringing together 33 city networks, research organisations and urban stakeholders from 13 countries for the EU’s Mission to deliver 100 Climate-Neutral and Smart Cities by 2030.
Another example is the pan-European UNITE programme, which will aim as of September 2024 to transform healthcare through digital deep tech innovation. For this, EIT Digital has brought together a consortium of national and regional innovation authorities from across Europe as newly accredited “Regional Innovation Valleys”.
Finally, EIT InnoEnergy’s Skills Institute, which includes the European Battery Alliance Academy, aims to train, reskill and upskill approximately 800,000 workers by 2025. In addition, it will build on this to operate the European Solar Academy under the Net Zero Industry Act, helping the EU to achieve its climate neutrality targets thanks to skills development.
The EIT and its first three KICs are pioneers, testing different paths to financial sustainability. Lessons from their experience will inform the EIT’s six other KICs, to ensure the added value, efficiency and impact of the activities funded under Horizon Europe.
Based on the identification of the need for a KIC on the water, marine and maritime sectors and ecosystems, a new KIC, EIT Water, is set to be launched in early 2025, as announced in Horizon Europe Strategic Plan.
For 40 years, the European Framework Programmes for Research and innovation have been making a significant impact on science, the economy and the society. This includes the activities carried out by the EIT. Public and private investments in knowledge, skills and innovation remain key to advance Europe’s competitiveness and pave the way toward a sustainable and prosperous future.