Funding EDIHs: Balancing Europe’s Ambition With National Responsibility

When the European Commission launched the European Digital Innovation Hubs (EDIHs) under the Digital Europe Programme, it marked a turning point for digital transformation policy in Europe. The model was deliberately designed to be shared: 50% EU funding, 50% national or regional co-funding. In other words, Brussels provides half the engine, but it is up to Member States to supply the other half of the fuel.

This co-funding structure is intended to ensure that EDIHs are not just European in name but also deeply embedded in national ecosystems. It is a recognition that while Europe sets the framework, the real test of success lies in how governments and regions prioritise digitalisation for SMEs and public sector organisations.

What happens when an EDIH proposal is evaluated positively by the European Commission, yet does not receive EU funds due to limited budgets? This is where the Seal of Excellence comes in. The Seal acts as a quality label — a clear signal that the proposal meets the EU’s standards and is “fundable,” even if Brussels cannot provide the cash.

Seal-awarded EDIHs must then turn to their national or regional governments for support. Unlike the standard 50/50 model, these EDIHs are typically 100% funded nationally. In Ireland, for example, the Department of Enterprise, Trade and Employment (DETE) provides the national contribution, with Enterprise Ireland (EI) acting as the managing body for both co-funded and Seal of Excellence EDIHs. Other Member States follow similar structures, though the responsible bodies vary.

This dual model — co-funded EDIHs and Seal of Excellence EDIHs — raises an important policy question: are we creating a two-tier system of EDIHs?

On paper, both kinds of EDIHs are part of the European network. Both are tasked with delivering digital skills, test-before-invest services, and innovation support to SMEs and PSOs. Yet, the funding base is different. Co-funded EDIHs enjoy direct EU visibility and backing, while Seal of Excellence EDIHs rely entirely on national governments for sustainability. If national commitment wavers, these EDIHs risk becoming under-resourced despite being “excellent” by European standards.

For policymakers, this matters for three reasons:

1. Regional equity – If Seal of Excellence EDIHs are concentrated in certain regions, they may face uneven support compared to EU-backed EDIHs.

2. Long-term sustainability – Without EU co-funding, Seal of Excellence EDIHs may find it harder to plan beyond short-term cycles of national funding.

3. Network coherence – A fragmented funding landscape risks creating disparities within what is supposed to be a unified European network.

So where does this leave us? If EDIHs are to deliver on their promise — empowering SMEs, strengthening digital sovereignty, and contributing to the twin green and digital transitions — then the Seal of Excellence must come with a stronger political commitment at the national level. Governments cannot treat Seal of Excellence EDIHs as optional extras; they are an integral part of Europe’s digital transformation strategy.

The European Commission has provided the framework. The real responsibility lies with national governments and their agencies. If they step up, Seal of Excellence EDIHs can

thrive alongside co-funded EDIHs, ensuring that no region is left behind. If they do not, we risk weakening one of the most ambitious innovation networks Europe has ever attempted.