The Accelerate Future HEI project, funded under Horizon Europe, was the incubator which sparked the idea for the pedagogical approach proposed in this paper. By working to transform Higher Education Institutions (HEIs) across Europe into more entrepreneurial and innovative organizations, through skills development programmes, transformation roadmaps, and acceleration services, Accelerate Future HEI is encouraging the development of ecosystems where project-based learning is embedded in the curricula. When institutions commit to building staff and student capacity for innovation and engagement, assessment methods must evolve accordingly. Evaluating digital entrepreneurship students through real projects helps them develop applied, outcome-oriented mindsets. In this sense, project-based assessment is both a pedagogical tool and a strategic instrument, aligned with the broader European ambition to make HEIs active drivers of social and economic development. Project-based teaching, when designed with rigour and intentionality, has been shown to produce meaningful and lasting learning experiences that prepare students for real-world professional challenges (Boss & Larmer, 2018).

Building on our previous work developing international innovative living labs as collaborative, experiential learning environments for engineering education, this paper extends that framework into the context of project-based assessment for digital entrepreneurship students (Andone et al., 2022).

The assessment was built around an unconventional project premise: students were assigned fictional startup concepts involving impossible or speculative capabilities (for eg. human flight without a vehicle, underwater breathing, instant teleportation, gravity manipulation, cybernetic augmentation, or invulnerability to pain) and tasked with developing a viable digital solution for their chosen concept. Working in teams of three, students followed the full design thinking process across five structured stages with sequential deadlines: Empathize (user interviews and research), Define (problem statement and target audience), Ideate (open brainstorming), Prototype (low-fidelity sketches, wireframes, or mockups), and Test (feedback collection and iteration). Design thinking has been shown to shape not only individual problem-solving but also broader organisational culture, making it a particularly valuable methodology to embed in higher education settings where institutional transformation is a stated goal (Elsbach & Stigliani, 2018). Drawing on principles from gamification research, which emphasises engagement, progression, and intrinsic motivation as drivers of deeper learning, the assessment design sought to replicate these qualities through structured, stage-based project work (Kim et al., 2017). Evaluation focused on the quality of the reasoning process and documentation, including notes, sketches, and interview observations, reflecting a deliberate pedagogical commitment to learning-by-doing rather than outcome perfection.