Europe stands at a decisive moment for its economic and technological future. In an increasingly competitive global environment, the ability to transform science into market-ready solutions will determine whether Europe leads the change or falls into dependency. In this context, the recent report by the Joint Research Centre (JRC) of the European Commission - "Deep Tech Entrepreneurship in Europe and the Crucial Role of RTOs Fostering Impactful Industrial Spin- offs" - provides both a strategic and practical view of how deep tech and Research and Technology Organisations (RTOs) are laying the groundwork for Europe’s new industrial era.

Deep tech refers to startups built on scientific discoveries or advanced engineering innovations. These are R&D-intensive companies with long development cycles, high risk, and disruptive potential. Unlike conventional digital solutions, deep tech involves a strong tangible component -hardware, materials - and is designed to address structural challenges in sectors such as health, sustainability, advanced manufacturing, and climate. 

In fact, 95% of patents in Europe remain inactive and only 9% of SMEs use intellectual property strategically. In the face of this challenge, deep tech startups offer a path to activate dormant knowledge and translate it into economic growth and technological sovereignty.

Research and Technology Organisations (RTOs) -such as CEA in France, FRAUNHOFER in Germany, TECNALIA in Spain, or VTT in Finland- are proving to be key players in this new paradigm. These institutions do more than conduct research; they act as factories of deep innovation, capable of turning scientific developments into technology-based companies with real impact.

The JRC report, based on data from 29 European RTOs and 49 of their most representative spin- offs in terms of industrial impact, reveals that these institutions collectively employ over 200,000 researchers, manage more than 35,000 active patents, and have generated at least 4,000 deep tech startups in the last decade.

Moreover, 83% of the surveyed RTOs have structured programmes to support new company creation, many of which have been running for more than 15 years. 

One of the report’s key contributions is the analysis of three successful models for creating deep tech spin-offs. The first is employee spin-offs, programmes that allow internal researchers to create startups with financial, technical, and market support, such as CEA’s Magellan programme or VTT’s Launchpad.

The second model is support for external startups, through initiatives that enable collaboration with emerging companies seeking to strengthen their technological foundations. These are often structured as equity for services type of programmes where RTOs become shareholders of early- stage deep tech start-ups that require their services to continue to mitigate technological risk.

Finally, venture builders are professional structures both within RTOs or connected to RTOs that identify promising technologies, and transform them into investable deep tech start-ups by assembling multidisciplinary teams for the start-up; developing sound go to market strategies and identifying the smart capital investors to present the business opportunity to. A standout example is TECNALIA Ventures. TECNALIA’s deep tech Venture Builder, which has launched 20 spin-offs, created more than 300 high-quality jobs, and achieved a combined valuation for its portfolio companies exceeding €300 million. 

Despite its potential, the deep tech ecosystem still faces significant challenges. Many science- based startups lack team members with business experience, making it difficult to build balanced teams and scale successfully, and / or have been created mostly with teams originating from the RTOs themselves whereas creating well-rounded teams with hybrid profiles is the winning combo in terms of deep tech team creation. 

Outdated success metrics also persist, with an overemphasis on unicorn count as the ultimate success metrics that overlooks the broader industrial, social, and territorial impact these companies generate. 

In fact, unicorns are mostly associated to B2C digital business models given the ease to quickly scale of for instance consumer platforms vs. deep tech B2B business models that plant the seeds to create the industries of the future developing harder to scale tangible assets that help in the process local SMEs to diversify into higher value added value sectors by integrating the supply chains of emerging deep tech companies; thus, articulating regional industrialization and technological sovereignty that are the ultimate goals pursued by European Commission´s innovation policies. 

Composite indicators are proposed in the report, integrating employment; valuation and the creation of supply chains as an alternative to move from unicorns to Pegasus! 

Additionally, accessing patient capital remains difficult, as the long timeframes required to generate revenue make deep tech ventures high-risk investments for traditional funds. 

The report also notes that 86% of the surveyed spin-offs maintain active relationships with their RTOs of origin, underscoring the need for ongoing, specialized support. 

Building a robust deep tech ecosystem in Europe requires strategic action. This includes the creation of venture builders staffed by multidisciplinary talent -scientists, entrepreneurs, and financial experts- as well as connecting startups to industrialization platforms and SME networks to accelerate scale-up. New impact metrics should be developed to assess job creation or supply chain formation. 

Equally important are professionalizing startup governance through trained boards, attracting cross-sector talent via mobility and training programmes, promoting venture capital funds focused on industrial deep tech, and encouraging early-stage involvement of large corporations in technology validation and development. 

Europe has the knowledge, infrastructure, and talent to lead the next wave of industrial innovation. But success depends on connecting these elements through smart strategies, enabling regulations, and a cultural shift that values long-term impact over short-term returns.

Deep tech is not just a promise, it is a strategic necessity. Investing in this model means reindustrializing regions, generating quality employment, and reinforcing the continent’s technological sovereignty. In this process, RTOs are emerging as essential enablers of a more innovative, resilient, and sustainable Europe.