Viewpoint: The missing ingredient in Europe’s innovation policy

Innovation is essential to the competitiveness that Europe needs to protect its prosperity and values. Yet despite years of ambitious public programmes, generous funding, and strong research institutions, Europe continues to fall short in translating scientific excellence into global commercial leadership. The gap between breakthrough research and market success remains wide.

The missing ingredient is systematic and sustained engagement from the private sector. Without it, even the most carefully designed innovation policies will fail to have an impact on citizens and the economy.

Innovation is a value chain. Knowledge, ideas and technologies created in universities and research teams need to be turned into applied innovations, often through start-up companies. They then need to be scaled up, transforming those early innovations into competitive businesses that can thrive globally and benefit society.

European policy has long focused on the first stage, funding research, supporting early-stage ventures and celebrating prototypes. But without a dynamic market for innovation, including buyers, investors and partners, early progress rarely leads to commercial impact.

The private sector plays a decisive role. Established companies create demand for new technologies and enable scaling up through integration into supply chains. They also contribute to the pipeline of innovation through spin-offs, research partnerships and new ventures. If these actors are absent, the cycle breaks down, and promising research remains underused.

As the Draghi report underlined, Europe’s commercialisation gap remains persistent. Research alone cannot bring innovations to market. That requires investors, entrepreneurs, product developers, marketers, regulatory experts, and companies willing to take risks.

Public funding can support early development, but only the private sector can scale up innovations to market. Policies that treat businesses as passive recipients of support have proven ineffective in the past. Instead, companies must be partners in shaping and delivering innovation policy.

Moreover, there is a skills gap to close. Europe produces world-class talent. But purely academic training alone is insufficient for the evolving needs of industry. Companies struggle to recruit workers with the right expertise, while graduates face uncertain job prospects. This misalignment weakens both innovation capacity and competitiveness.

Feedback loops

Fixing this requires structured feedback loops between industry and academia. Businesses should play a direct role in shaping curricula, co-designing training programmes and creating clear pathways from education to employment. This is not about turning universities into training centres. It is about ensuring that research institutions equip graduates with the skills and experience needed in future industries.

Ensuring the private sector plays its role is not about top-down control, subsidies or even consultation. It requires bottom-up engagement through permanent, structured communities of trust between academia, entrepreneurs and industry, where each side feels empowered and motivated to collaborate and contribute.

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Innovation strategies work best when private sector leaders sit alongside distinguished academics on governing boards, as they do at the European Institute of Innovation and Technology. This ensures that policy decisions are informed by practical experience and market dynamics. Without such representation, innovation strategies risk being designed in isolation from the business realities that determine commercial success.

Europe’s competitors are not standing still. They are investing aggressively in both research and commercialisation capacity. If Europe continues to view innovation primarily as a scientific endeavour rather than an economic one, the gap will widen.

A different approach is possible. Policymakers must enable private sector leadership, academia must engage more openly with industry, and businesses must commit to active participation. Institutions like the EIT will continue to champion this collaboration – from skills development to governance structures.

Innovation is not an abstract goal. It is central to solving pressing challenges – from climate transition to digital transformation to health. To meet these challenges, Europe must place the private sector at the heart of its innovation system. Only then can excellent research translate into global impact.

Stefan Dobrev is chair of the governing board at the European Institute of Innovation and Technology.