Commission analysis lays bare fragmentation of European innovation

Europe remains riven by division when it comes to research and particularly innovation, according to a new European Commission analysis that attempts to put a number on how it compares to the US.

“The European research and innovation system is significantly more fragmented compared to the US,” argues Divided We Fall Behind, released earlier this week, “with major European hubs showing notably weaker interconnectivity.” 

European policymakers have long fretted that national rules and systems, plus language and cultural barriers, stop researchers and innovators from collaborating and scaling up new companies. The response has been a decades-long – and incomplete – push for an integrated European Research Area (ERA), which is now getting a renewed push in the form of a binding act. 

But this new analysis, authored by senior officials, analysts and Commission advisors, is a novel attempt to measure the scale of the problem. 

It does so by looking at the number of joint research papers and patents between different innovation hubs in Europe (meaning EU states, the UK, Iceland, Liechtenstein, Norway and Switzerland) and comparing this to the US. 

The analysis calculates how strong these bonds would be, between, say, Munich and Paris, or Boston and San Franscisco, in a hypothetical perfectly integrated system, and then measures this against the reality, scoring on a 0 to 1 scale of integration. 

When it comes to patents, Europe scores far lower than the US, measuring 0.4 versus 0.68. “The European research and innovation system shows considerable fragmentation,” the report warns, with collaboration often hemmed into national borders. 

However, Europe is nearly as integrated as the US when looking at joint research papers, scoring 0.76 against 0.81. This “suggests that academic research in Europe has achieved greater cross-border integration than industrial R&D activities,” the analysis finds. 

This difference in integration levels between research and patenting has several likely causes. Cross-border research, which is generally open as a rule, is relatively frictionless compared to joint innovation, which can be stymied by national regulations, taxation and intellectual property rules.

Europe is more fragmented despite having the potential, at least geographically, to be more unified than the US. Innovation hubs are “spatially closer in Europe than in the US” the report notes, with most of Europe’s major innovation centres a short flight apart, compared to the much longer distances between the US’s eastern and western coastal cities. 

Growing problem

The report also stresses that European fragmentation is a growing liability. 

As more is known, research and innovation projects have to knit together ever more expertise from different fields to create new ideas and inventions, meaning it’s getting harder to find people with all this knowledge in just one place. 

This is particularly true for the most complex technologies, “whose development strongly hinges on the availability of multidisciplinary expertise that cannot easily be found in a single location,” the report says. 

Indeed, the report finds that patenting networks in the most complex technological areas, such as semiconductors or biotechnology, show denser connections between hubs, indicating that innovators need to link up more to make progress on the cutting edge. 

It also finds that, for many of these complex technologies, the US is doing a better job at linking up its innovation hubs to work on joint patents than Europe. 

“These sophisticated technological domains suffer the most severe efficiency penalties due to the fragmentation of the European system, as compared to the US,” the report says. 

Policy implications

The findings, of course, bolster the Commission’s own agenda to press ahead with a new ERA Act, which for the first time would introduce a legislative stick to compel member states to harmonise their research and innovation systems.

Up until now, the ERA has relied on voluntary commitments from member states. But spending on public R&D has only nudged up, and remains highly divergent across the block. 

Related articles

• Commission to launch public consultation on ERA Act
• Hopes rise for new laws to unlock European Research Area
• EU countries vow to tackle research fragmentation

The Commission will soon launch a public consultation on what the Act should include, with options including standardised working conditions, similar levels of investment, and research security. 

The report into fragmentation also argues that its findings have implications for FP10, the next research and innovation Framework Programme, due to start in 2028. 

To join up Europe’s innovation centres, particularly in cutting-edge technologies, “higher funding rates could be foreseen for multi-hub collaborative projects in complex technologies and dedicated budget lines could be designed for cross-border infrastructure sharing in advanced technological domains,” it suggests.