As we mentioned in our previous post about the 5TONIC innovation laboratory, now NEXTONIC, founded by Telefónica and IMDEA Networks, promoting innovation is a strategic European objective.
This is an example of a collaborative innovation laboratory that brings together the service-provider industry, the demand-side sectors and the research community within a single innovation ecosystem, amplifying its market impact. But the forms of innovation are multifaceted, and Telefónica is committed to a diversity of approaches.
One of the key areas pursued by the European Commission with its forthcoming European Innovation Act, scheduled for the first quarter of 2026, is the creation of framework conditions that facilitate the market deployment of innovation across all sectors.
Complementing this initiative, the Commission has presented a proposal to launch, in spring 2026, of a European Scale-Up Fund, a public-private instrument with a capitalisation of several billion euros, aimed at investing in scale-up companies, with investments of over 100 million euros and a focus on European advanced-technology companies.
These are areas in which companies such as Telefónica play a key role in promoting the creation and consolidation of innovation ecosystems in Europe.
In the current context, how can European industry contribute to strengthening innovation and scaling it up to the market? Furthermore, what policies should Europe promote to encourage the development of innovative players and facilitate effective transfer to the market?
Technological innovation in Telefónica’s DNA
The company is firmly committed to technological innovation as a driver of growth and development, and plays a key role in driving the European innovation ecosystem. Telefónica’s innovation strategy is based on a balance between two main models:
1) Internal innovation
Through our own research, development and innovation (R&D&I) activities, we have developed our own innovation model that enables us to transform results and capabilities into enhancements or commercial products and services.
In 2024, R&D activities reached an approximate investment of €650 million, and 18 new patents were registered. At the end of the year, the Telefónica Group had a portfolio of 419 active patents, 138 industrial designs and nine utility models.
Telefónica promotes medium- and long-term experimental and applied research through specialised scientific groups focused on advancing the state of the art in technology.
In 2024, in the field of connectivity, the company made progress on the evolution of 5G and 5G Advanced networks, network slicing, open and disaggregated architectures—both in access and transport networks—and quantum communications, in connection with the Euro-QCI initiative. It also promoted the adoption of open, cloud-native architectures through projects such as Telco Cloud, ETSI-OSM, Edge Cloud and the Spanish IPCEI-CIS.
Furthermore, Telefónica continues to move towards automated networks with artificial intelligence and complements these developments with innovative products, such as Open Gateway APIs and solutions aimed at the IoT and the B2B market, including applications in the field of cryptography.
2) Open innovation
Beyond internal innovation, Telefónica participates in the creation of open-innovation ecosystems, including 5TONIC, which we discussed earlier, 5G test beds and pilots that facilitate the transition of innovation from the laboratory to the market, and the Wayra initiative, a global programme designed to both invest in start-ups and to connect entrepreneurs, start-ups, investors, venture-capital funds and public and private organisations around the world, with the aim of promoting innovation in collaboration with a wide network of stakeholders.
European strategies and public policies for the development of innovative actors
Each region has its own strengths and challenges. Europe, for instance, benefits from a high level of human capital, a solid foundation in fundamental research, a developed industrial structure, and a robust market. However, it still faces difficulties in translating innovation into market applications and in scaling up technological development.
In this context, building a truly innovative European ecosystem requires, above all, building trust and creating the right conditions for companies to be sustainable, profitable and capable of growth. This means allowing market structures to reconfigure efficiently, fostering scalability and long-term investment capacity. It also calls for promoting smart public procurement, advancing administrative and regulatory simplification, and improving access to capital that drives innovation.
Ultimately, it also means recognising and strengthening the role of the European private sector, particularly technological and strategic players such as Telefónica, as a driver of progress and competitiveness. Or, as the ERT put it, to “rebuild the business case for Europe.”
