The European Union is looking for ways to strengthen its technological competitiveness, economic resilience and independence in strategic sectors. One of the instruments designed to support this goal is STEP, the Strategic Technologies for Europe Platform. It is a mechanism that supports investment in critical technologies, from deep tech and biotechnology to clean technologies and defence. How does STEP differ from traditional grant programmes? Who can benefit from it? And is it a real European response to competition from the United States and China? Professor Dominika Wojtowicz from the Department of Economics at Kozminski University explains.
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What makes STEP different from other forms of support for entrepreneurs?
STEP is not a traditional grant programme. It is a coordinating platform that builds on eleven existing EU instruments, including Horizon Europe, InvestEU and cohesion policy funds. Its uniqueness lies in the introduction of the Sovereignty Seal, a quality label that can make it easier to access national funding when EU resources are exhausted. STEP also stands out because it opens strategically to large enterprises and introduces preferential conditions under cohesion policy, including the possibility of 100% EU co-financing for projects and 20% pre-financing for applications submitted by the end of 2025. In addition, STEP integrates the defence sector with the civilian agenda, which is new compared with traditional business support programmes.
Is STEP the EU’s response to growing competition from the United States and China?
Politically, STEP is a direct response to the US Inflation Reduction Act, or IRA, which was largely suspended by Donald Trump’s administration in early 2025, and to China’s dominance in key supply chains. However, its scale is smaller than originally planned. Instead of the proposed additional budget of 10 billion euros, the platform received only 1.5 billion euros, allocated to the European Defence Fund. This was the result of a lack of agreement among member states on the creation of large new funds. Nevertheless, STEP has managed to unlock around 29 billion euros for critical technologies, and the mechanisms developed within the platform are expected to become the foundation for the future European Competitiveness Fund after 2028. It is therefore an important step towards safeguarding Europe’s technological sovereignty, although it is being implemented mainly through the optimisation of existing resources. At the same time, we should not deceive ourselves. Europe has, in practice, already lost the race for competitiveness in advanced and critical technology sectors. STEP is a drop in the ocean of investment and regulatory needs that could help mitigate this failure.
Which sectors and businesses can benefit the most from STEP?
The main beneficiaries of STEP are four areas of critical technologies: digital and deep-tech technologies, clean technologies such as renewable energy and energy storage, biotechnology, and the defence sector. Support is available to start-ups, SMEs and large enterprises. Technology scale-ups are in a particularly favourable position, as an investment budget of around 900 million euros has been planned for them in 2025-2027 under the EIC STEP Scale-up scheme. Medtech companies, battery producers and hydrogen component manufacturers can also benefit significantly, especially those operating in less developed regions. Polish projects related to critical metals fit particularly well with the platform’s priorities.
What are the main risks of implementing STEP at member state level?
The main risk is the cannibalisation of existing funds, as STEP financing is based on reallocations from climate and cohesion budgets. This may come at the expense of other regional investments. Second, the mechanism may deepen differences between countries and create imbalances in the single market. Countries with greater fiscal capacity may be more effective in supporting their own industries than poorer member states. The third risk is tension with cohesion objectives. There is a possibility that capital will flow to regions that are already technologically advanced, rather than to those that need support the most. The fourth challenge is the platform’s administrative complexity. STEP combines eleven different legal regimes, which makes the system difficult for entrepreneurs to navigate. Fifth, there is a political risk connected with the reprogramming of funds. If projects do not start on time, regions may lose funding without achieving either technological or cohesion benefits. The final risk is a drift towards armament. Allowing defence priorities to be financed from civilian funds may raise social resistance in some member states.
What does this mean for entrepreneurs?
STEP is not a single grant programme. It is an attempt to organise and make better use of existing EU instruments around technologies considered strategic for Europe’s future. For entrepreneurs, this may mean easier access to funding, greater visibility for high-potential projects and additional opportunities for companies operating in areas such as AI, deep tech, biotechnology, clean technologies, energy and defence. At the same time, STEP does not solve all the problems of European competitiveness. Its effectiveness will depend on how efficiently member states use the available instruments, whether funding actually reaches projects of strategic importance and whether STEP becomes the beginning of a more ambitious EU investment policy. For technology companies, scale-ups and enterprises operating in critical sectors, the value of STEP lies not only in access to funding. It also sends a clear signal: Europe is increasingly indicating which areas it considers crucial for its future economic and technological sovereignty.
