26 Sep 2019   |   News

The EU needs to fix the east – west innovation gap

Without policy initiatives at a European level, a ‘gaping hole’ will grow between the states that have it all and the rest that have less and less. There will be economic, social and political consequences

Pierre-Alexandre Balland of the University of Utrecht and visiting professor at the Massachusetts Institute of Technology. Photo: European Commission

The research and innovation gap between richer and poorer regions is a market failure and can only be fixed by the EU and member states finding a collective solution, according to economist Pierre-Alexandre Balland of the University of Utrecht and visiting professor at the Massachusetts Institute of Technology.

Fundamental changes in global politics - including the rise of populist leaders - are to large extent a consequence of the growing gap in innovation performance, which creates immense wealth in certain regions, but a lot of distress in others, Balland told delegates at the R&I Days conference in Brussels on Tuesday.

Looking at the geography of historical patents in the US going back to 1790, Balland found that innovation has been increasingly concentrated in affluent cities and regions. By leaving market forces unchecked by corrective policies, a gaping hole grows between “a few states that have it all and the rest that have less and less,” said Balland.  “Every time a technological revolution happens this gap increases.”

EU leadership has acknowledged the increasing gap in research and innovation performance between its own member states is likely to amplify the impact of impending technological change, geopolitical shifts and the looming climate crisis.

“If we want EU research and innovation policy to make a real difference, this can only be done if research and innovation is delivered across all member states,” Jean-Eric Paquet, director general for research and innovation at the European Commission told the conference.

However, leaders have yet to reach an agreement on how to spread innovation performance more evenly across member states.

Under Horizon Europe, the EU’s upcoming research and innovation programme, poorer regions are set to benefit from a ring-fenced 3.3 per cent slice of the total budget of €94 billion budget. The money should go towards building research capacities in new member states. But this measure is likely to have little impact unless it’s seconded by stronger budgetary commitments and reforms in member states.

Regardless of whose jurisdiction this problem is falls under, both EU institutions and member states, “Have to take care of this inequality, because the market itself will not take care of it. It’s clearly a market failure,” Balland said.

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