Innovation policy review highlights achievements and challenges
The EU and its Member States have made good progress on innovation in recent years. Nevertheless, further action is urgently needed if the EU is to become the world's leading knowledge-based economy. This is the main message from a newly released Commission Communication which reviews progress on innovation in the EU and highlights the challenges ahead. Over the past few years, in the framework of the Lisbon Partnership for growth and jobs, the EU has launched a number of policies and initiatives designed to boost innovation in Europe. As the Communication points out: 'Innovation is the precondition for the creation of a knowledge-based, low-carbon economy. Mastering this transformation is crucial to remain competitive in the globalised world and to achieve wider societal goals in a sustainable way under the pressure of demographic changes, the climate challenge, scarce resources and new security threats.' According to the Commission, progress has been made in a number of areas. The majority of the Member States have improved their innovation performance and the innovation gap between the EU and its main competitors, namely the US and Japan, has narrowed. An analysis of the situation reveals that the most innovative countries share a number of features in common. 'They are usually spending above the average for education, training and lifelong learning, have the highest share of R&D [research and development] spending in GDP [gross domestic product] and have instruments to support the uptake of new technologies and products in the public and private sectors,' the report reads. 'Experience also shows that these countries are better prepared to make use of the exchange of best practices and to learn from others.' At European level, access to the single market has been made easier. Legislation such as the Small Business Act and the Services Directive should make life easier for businesses, especially small and medium-sized enterprises (SMEs). In addition, the newly updated state-aid rules make it easier for Member States to grant aid for innovation and research activities. Many countries have also set up tax-incentive schemes to encourage investments in R&D. EU funds for research are now available from a range of sources, including the EUR-54-billion Seventh Framework Programme (FP7), the Competitiveness and Innovation Programme (CIP), the Cohesion policy (which spends around a quarter of its budget on innovation activities) and the EU's rural development funds, some EUR 337 million of which is earmarked for the development of new products, processes and technologies in the agriculture, food and forestry sectors. Furthermore, initiatives such as the European Research Area (ERA), the Joint Technology Initiatives (JTIs) and the European Institute of Innovation and Technology (EIT) are helping to improve links between researchers in different countries and between universities, business and industry. Nevertheless, there is much room for improvement. In many countries, a change in mindset is needed. 'Innovation and entrepreneurship are not yet sufficiently recognised as values everywhere in Europe, while the failure they sometimes imply continues to be stigmatised,' the report notes. The lack of a Community patent means that it is more expensive to protect intellectual property in Europe than it is in the US or Japan. 'It is high time to change this situation,' the Communication states. Public authorities also need to play a greater role in stimulating innovation through public procurement, for example. The Communication also calls for improved coordination of policies designed to boost innovation at regional, national and EU levels. Furthermore, despite the wealth of EU funds available to support research and innovation activities, many stakeholders are put off applying for them by the amount of bureaucracy involved. Companies surveyed in a recent poll clearly stated a desire for simpler, faster procedures. 'The analysis of the progress achieved in recent years shows that the EU has rightly identified innovation as a key driver for a prosperous future,' the Communication concludes. 'However, making the EU a vibrant space for innovation requires continuous attention and calls for a better exploitation of the potential of the partnership between the Union and its Member States by taking more focused and better coordinated actions at all levels.' The Commission will now consult Member States and other stakeholders with a view to proposing a comprehensive European Innovation Act in spring 2010.