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 across Europe that leveraged innovation 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 tackles climate change through innovation. It integrates a ‘systems approach’ with sustainable economic development, social change and technology solution.
EIT Digital was created against the backdrop of a fast-accelerating digital world driven by data, platforms and the network economy. They mobilize their 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 venture creation, support 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 , thematic expertise and a unique funding model, the EIT has since set up Europe’s largest innovation ecosystem, one that now boasts nine diverse KICs with their start-ups collectively valued at €72 billion.

This is a huge 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, was this grand experiment successful in creating financially sustainable partnerships?

An era of impact

The short answer is a resounding yes.
Independent studies have assessed positively the EIT KICs’ achievement and progress towards achieving financial sustainability, being able to generate significant private and public investments. This has never been achieved before in such a partnership model, leading to a self-sustaining ecosystem delivering major 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 Europe’s largest public-private partnership focused on climate innovation. It has helped build 2,000+ start-ups, generated €1.8 billion of investment, created 15,000 full-time jobs and powered 600 new products.
EIT Digital has upskilled hundreds of thousands of people through its education portfolio, helped create more than 300 start-ups and supported the scale-up of over 500 ventures with a combined valuation of €3.3 billion. It has also supported 20 centaurs (companies surpassing $100 million in annual recurring revenue) and taken equity in 200+ start-ups.

Finally, EIT InnoEnergy is recognised globally as the most active sustainable energy investor and one of the largest cleantech investors. It boasts 200+ portfolio companies in areas like energy storage, transport, renewables and sustainable built environments, which have collectively raised €25 billion from public and private sources.

The success of these three EIT partnerships is not by accident.
Building on the thematic expertise of each KIC, the EIT’s steering strategy has from the beginning guided these communities toward maximum impact – and eventual financial independence.

For example, the EIT has a requirement that its funding for creating innovation networks 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, revenue from these investments return back into the KICs.

Paths to financial sustainability

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 become a unicorn in its own right, valued at over $1 billion, and has a self-funding focus centered on private equity investment – a major achievement and validation of the EIT model. They 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 vast amount of 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, partnership and tuition fees for its in-demand education programs. Along this success, EIT Digital is providing €4 million in scholarships during 2024-28.

Martin Kern, Director of the European Institute of Innovation and Technology (EIT)

The EIT KIC’s ability to become financially sustainable also reflects the significant expertise and network each KIC wields, which have enabled them to become important EU service providers.
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 organizations 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 program, which is transforming healthcare through digital deep tech innovation. For this, EIT Digital has brought together an outstanding consortium of innovation authorities in “Regional Innovation Valleys”.

Finally, EIT InnoEnergy’s Skills Institute, which includes the European Battery Alliance Academy, will 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.

The EIT and its first three KICs are pioneers. Beyond the remarkable standalone achievements, they have paved the way for the EIT’s six other KICs, highlighting proven paths and solutions.

Building on this success, the EIT Community continues to grow. A new KIC, EIT Water, will be the tenth innovation partnership. Set to be launched in early 2025, it will focus on the water, marine and maritime sectors and ecosystems. The EIT has already delivered immense impact for Europeans. Fifteen years ago, the EU made a bold decision by creating the EIT, an experiment that has had a major return. More bold decisions like this will be needed to advance Europe’s competitiveness and pave the way toward a sustainable future.