Europe’s innovation performance must improve

The EU’s innovation performance needs drastic improvements if competitiveness and economic growth targets are to be met by 2020, according to the European Commission’s Innovation Union Competitiveness Report published today (9 June).

The report says the EU needs more investment in both public and private research and development, that investments in innovation need to be smarter and that the development of more innovative and fast-growing SMEs is key to boosting the research intensity of high-tech and medium high-tech industries.

These prescriptions tie in with the Commission’s Innovation Union strategy, launched in October 2010 as a major component of the overall economic recovery and growth plan known as Europe 2020. One of the plan’s five headline objectives is to improve R&D conditions in Europe with the aim that combined public and private investment in R&D increases to 3 per cent of GDP. Today’s report says that the EU is “slowly advancing” towards that target, but that the gap with leading competitors is widening, notably because of weaker business R&D investment.

“This report underlines that the road to the Innovation Union is long and challenging, with big obstacles along the way,” said European Research, Innovation and Science Commissioner Máire Geoghegan-Quinn. “But it confirms that the EU has agreed the right policies to get to the end of that road. Putting the Innovation Union into practice at European and national levels is an economic 'must', as important for sustainable growth as sorting out public finances.”

The report, the first under the Innovation Union initiative, replaces the former Science, Technology and Competitiveness report and is to be compiled every two years. The report draws on 200 indicators to analyse the reasons for, and solutions to, the gaps in the Innovation Union Scoreboard, published in February 2011. It then attempts to answer the two critical questions: What are the causes of and remedies for inadequate performance? What strategies can help reach the objectives?

The report monitors progress made towards the 3 per cent R&D investment target and the national R&D targets set by each member state. It also analyses the strengths and weaknesses of national research and innovation systems.

Earlier this week the Commission separately published its analyses of member states’ Europe 2020 National Reform Programmes and set out a list of suggestions for how each of the 27 EU countries could improve their individual performance, and an overall list for the EU as whole. These lists came with a similar message about the central role of R&D, with a recommendation to, “Protect growth-enhancing items such as spending on research and development, education and energy efficiency.”

Among the major obstacles identified in today’s report are access to finance, for example, venture capital, the much higher cost of patenting in Europe particularly for SMEs, and the structural conditions required to enhance knowledge-intensive entrepreneurial activities.