EC report: public investment in research and innovation more important than ever

According to a report by the European Commission released on 16 March 2017, public funding of research and innovation (R&I) is a catalyst to boosting private R&I activities and overall economic growth.

The report reviews existing empirical literature and underlines that the role of public R&I funding is especially important in light of today’s rapidly changing and riskier innovation landscape.

Key Points

  • The study will be submitted to the high level group of experts chaired by Pascal Lamy, President Emeritus of the Jacques Delors Institute, which is in charge of advising the Commission on how to maximise the impact of EU’s investment in R&I.
  • According to the study roughly two thirds of economic growth in Europe can be traced back to innovation. The study also estimates that the typical returns for private R&I investment range between 10- 30%. These returns can be twice or three times higher for the economy in general, thanks to the positive spillover effects that enable other firms to benefit from these investments.
  • Overall, the returns on public R&I investment are estimated to be around 20%, with returns on EU-funded R&I estimated to be even higher.
  • However, in order for public R&I funding to have maximum impact, it should cover the whole cycle of innovation, from fundamental research to market-creating innovation- i.e. solutions or products that completely re-shape markets.
  • The study also examines the factors that have contributed to a temporary slowdown in Europe’s productivity. It argues that the digitisation of our economies in the past decades has revolutionised the way in which innovation works and how it benefits are diffused, with a growing concentration of innovation benefits with some key players. This has broad implications for public innovation policy.
  • The analysis suggests that greater investment in market creating innovations in Europe – the kind proposed by EU Research Commissioner Carlos Moedas – can deliver the productivity growth which is eluding Europe. This goal aligns with the vision of the new European Innovation Council (EIC).
  • This is an important development as it confirms the need to boost research and investment on a European level.  

The report can be found here.

Date: 07/04/2017 | Tag: | News: 583 of 1581
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