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.
