Don’t let the EU lose the battle of innovation

The transformation of the EU into an innovative, knowledge-based society is an absolute necessity, now more than ever. This is not only essential to deal with the current economic crisis, but also because investment in research and innovation is the only path that can predictably and credibly lead the EU towards long-term growth, in this highly turbulent world of dwindling natural resources and increased competition.

If we really believe in the "knowledge economy" (and this is not a simple publicity catchword for us) we have to put our money where our mouth is and invest heavily in the capacity to research and innovate our way out of the crisis. I am afraid that instead of creating a "knowledge-based economy" in the EU we are evolving more and more, as the crisis deepens, into a "banking economy" or even worse an "austerity-based economy".

It’s been said before - back in 2000 with the Lisbon strategy - that we should make the EU the most competitive and dynamic knowledge-based economy in the world. Our failure to achieve the Lisbon Agenda goals (for example, R&D investment of 3 per cent of GDP) is not just a simple failure to reach some arbitrary numbers. It is a strategic mistake in a policy whose objectives remain crucial for Europe’s future. One cannot but wonder what Europe's current position would be if we had achieved our R&D targets. I insist that underinvestment in R&D is not a simple effect but rather a root cause of the economic crisis.

Funding Horizon 2020

The 3 per cent R&D funding target has been postponed until 2020, and under the current climate seems more elusive than ever. Our reluctance to sufficiently fund the Horizon 2020 strategy makes it even more difficult to achieve this goal. But now more than ever, Europe cannot afford to fail.

"Horizon 2020" started as a proposed €100 billion programme. Now we are talking about €80 billion, including the budget for the European Institute of Innovation and Technology and the Competitiveness and Innovation programme. If we take into consideration inflation, the increase in Europe's R&D budget from the  €50 billion of the current Framework Programme 7,  is something like 6 or 7 per cent. And even this amount is likely to be challenged, as we have to see what position Member States will take in the Council, and how the money is going to be split between supporting the agricultural sector and the cohesion funds.

I firmly believe that we should avoid making the monumental mistake of further reducing the EU's R&D funding - a move that would be driven by short-term gains and political dogmatism – and thus undermining our future prospects. 

Research is not a marginal activity

We have to bear in mind that historically scientific research and its transformation to innovative services and products, is not some kind of marginal activity but lies on the core of European economic development and competitiveness.

Overall, Europe seems to be losing the battle of innovation and competitiveness, both externally, in relation to other parts of the world, and internally, as some Member States - including Greece where I come from - struggle to compete within the European Union. 

There’s a lot of originality, creativity and innovations in Europe, but we have a hard time pulling it all together. We are not particularly effective at implementing and commercialising our research and development. Yet the connection between research, innovation and economic growth is well established. Europe is in need of more companies, especially SMEs that are capable of researching and innovating, or of making good use of the R&D results that our universities and research organisations are producing.

Europe’s development engine

Investing heavily in R&D is the only path for the EU if we want to handle the increasing competition from Asia and Latin America, and to be able to retain our position in the world. The current predictions do not favour Europe. The world in 2025 will be a much more difficult arena for European companies. Only through research and innovation will our societies, companies and universities be able to cope with this reality.

Horizon 2020 must be allowed to be "Europe's development engine", based on the sole principle of excellence and fuelled with sufficient funding.  We still have the opportunity politically to agree on a higher budget for Horizon 2020. At the same time we also need to make bold decisions on how Horizon 2020 can be strongly connected with the Structural Funds. Through the Structural Funds we can support Member States and regions that do not yet have the capacity to participate in R&D on an equal footing.

Stairway to Excellence

Structural funds can be used both for the "stairway to excellence" (creating research infrastructures and supporting less-developed Member States and regions to achieve scientific excellence) and also for what I call "research and innovation consumption", by which I mean technology and innovation transfer to less-developed member states and regions and that can be applied there to enhance productivity, competitiveness and the capacity for more innovation. Structural funds can and should be used for bridging the gap between R&D production and R&D consumption.

We have to bear in mind that what might pass as a second-class innovation in the most advanced regions, could be regarded as a huge innovation for Member States and regions with a less-developed innovation capacity, thus decentralising the growth potential and developing the local “stairway to innovation”, and eventually to research excellence. At the same time, what passes as a second-class or trivial innovation for a big company could really change the way an SME works and allow it to prosper.

A small percentage of SMEs are able to do research and innovation all by themselves, but there is no single SME in the whole of the EU that could not benefit by absorbing more R&D results.

I believe that we need to enhance this dual model of Horizon 2020 as an "R&D creator" and of EU companies and SMEs as "R&D consumers", supported by national and structural funds.

And since there is much talk in the EU about "project bonds", why not consider issuing "research bonds", with the help of the European Investment Bank, with the money - matched by national budgets and structural funds - going exclusively to support the EU's capacity for research, development and innovation?

Ioannis A. Tsoukalas is a Greek member of the European Parliament’s Research, Industry and Energy (ITRE) committee. Tsoukalas, a member of New Democracy, part of the European People’s Party (EPP),  is Professor Emeritus at Aristotle University of Thessaloniki.