European Commission Calls for Increased R&D Funding

Europe needs increased and "smarter" investments in both public and private research and development (R&D) to address the European Union's (EU) "Innovation Emergency," according to the European Commission's 2011 Innovation Union Competitiveness Report. The commission contends it is necessary to accelerate investments into R&D to achieve the EU's target of 3 percent of GDP being spent on R&D. EU members currently invest approximately 2 percent of GDP on R&D spending. The increased R&D spending will not only boost economic growth in the medium-term, it will also have a counter-cyclical effect on the current crisis according to the commission. However, due to the current debt crisis faced by several member states, public and private investments must strategically target sectors that the EU maintains a competitive advantage in including the climate change technologies. In 2007, EU researchers and companies filed approximately 40 percent of all patents related to climate change technologies. These are two of the several recommendations outlined in the report to deliver smart sustainable growth across the union.

To increase returns on investments (ROIs) made by public and private investors within the EU, the commission contends that it is necessary to spur research cooperation not only within the EU, but also outside the EU. A framework for international collaboration must be developed to take advantage of the current globalized system. The commission sees the growing globalization of research as an opportunity for the EU to utilize its ability to compete on high value added products. A strengthened transatlantic relationship would be beneficial to both the U.S. and the EU according to the report.

Another key issue, education reform must be undertaken for the EU member states to compete with other nations. According to the report, EU member states must develop an educational system that is adaptive to the needs of innovation science and technology (S&T) companies. These reforms should focus on developing a stronger S&T workforce. Currently, only 46 percent of EU researchers work in the private sector, compared to almost 80 percent in the U.S. The EU also must develop initiatives to increase the diversity of the EUs S&T workforce through the inclusion of more females not only in research positions, but also in management positions at S&T companies.

The report highlights the importance of cultivating technology transfers, increasing commercialization and strengthening intellectual property protection and management. Though the country produced 29 percent of the world's peer-reviewed articles in 2009, member states' efforts have struggled to spur technology transfers and commercialization. The report calls for more efforts to translate the basic research into goods and services that can be brought to market. The commission also pushes for the development of a common patent system across all EU member states due to the significant costs of registering a patent; it costs almost 10 times more to register a patent in the EU than the U.S. After a ruling by the European Court of Justice in favor of establishing legislation for a common patent system, the European Commission will move forward with developing legislation for the system, according to a BBC recent article.

Finally the report highlights the importance of encouraging and cultivating Fast-growing, small and medium-sized enterprises (SMEs) to compete with the U.S. and other advanced economies. The commission points towards some European countries (e.g., Austria and Denmark) that were able to rebound from the crisis due to the involvement of their SMEs in the knowledge-intensive sectors.

The report also provides country-specific analysis on selected indicators, which can be downloaded via a country profiles page. Read the report...