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EU R&D

Policy Context

European research and innovation policy and governance is driven through an increasingly close partnership between the European institutions and the Member States. The current guiding strategy is Europe 2020 and, within it, the Innovation Union flagship initiative.

Research and Development in Europe incorporates activities that are undertaken by a range of actors and which take place in a multi-level policy context. Research itself is carried out by universities, institutes, corporations, public bodies, SMEs and individuals. The policy context ranges from subnational authorities to national governments to EU–level programmes and abroad through partnerships.

Since 1984, EU-level funding of research and innovation activities has been grouped into one programme called the Framework Programme for Research and Technological Development (FP). Research Framework Programmes are the EU's main financial and legal instrument for implementation of the European Research Area (ERA). 

The Europe 2020 strategy has further developed the concept of the European Research Area (ERA) by integrating research and innovation policies. The strategic backbone for this move is the Europe 2020 strategy and the Innovation Union flagship initiative which embeds many of the ERA policy initiatives. 

Originally the European Research Area (ERA) was introduced to support the Lisbon Agenda, i.e. the strategic goals set by the European Union in March 2000 to become "the most competitive and dynamic knowledge-driven economy by 2010". 

The ERA concept was modernised by the new agenda of the European Union: Europe 2020 puts forward three mutually reinforcing priorities – smart growth, sustainable growth, inclusive growth -, sets new targets for policy actions including a 3% R&D spending target and proposes 7 flagship initiatives. The “Innovation Union” flagship initiative directly addresses the framework conditions and access to finance for research and innovation to ensure that innovative ideas can be turned into products and services that create growth and jobs (European Commission, 2010).

Further information on EU R&D in the context of the Europe 2020 targets can be found under the following link:

http://ec.europa.eu/europe2020/pdf/themes/15_research__development.pdf

EU Research and Innovation Funding

EU Research and Innovation funding includes funds directly managed by the European Commission - for example Horizon 2020 - and European funds which are managed directly by the Member States – for example structural funds.

Total R&D expenditure is split between public and private funding: 

a) Public R&D funding shows the commitment of a government to promoting research, development and innovation activities both directly and through the leverage effect on business R&D expenditure. In several cohesion countries, Structural Funds have become a significant — if not the main — source of public R&D funding (e.g. Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovenia and Slovakia).

b) Private R&D funding is the main component of total R&D expenditure in the more advanced knowledge economies. Its level reflects the attractiveness of the national research and innovation system for business investments as well as the structure of the economy. Private R&D funding is strongly concentrated in a few research-intensive sectors categorised as High-Tech and Medium-High-Tech Manufacturing and High-Tech Knowledge Intensive Services. The share of the value added of these sectors in the total value added is a good indication of the research absorption capacity of an economy.

European Cooperation in Science and Technology

COST (European Cooperation in Science and Technology) is one of the longest-running European frameworks supporting cooperation among scientists and researchers across Europe. It is an intergovernmental framework that encourages and supports the transnational collaboration of COST has a very specific mission and goal. As a precursor of advanced multidisciplinary research, COST plays a very important role in building a European Research Area (ERA). It anticipates and complements the activities of the EU Framework Programmes, constituting a “bridge” towards the scientific communities of emerging countries. It also increases the mobility of researchers across Europe and fosters the establishment of scientific excellence nationally funded science and technology research. 

COST operates across 35 COST member countries (including the 27 EU member states) and one co-operating state. 

 

Horizon 2020

Horizon 2020 funding will be instrumental in stimulating research and innovation activities, which include “the whole spectrum of activities of research, technological development, demonstration and innovation, including the promotion of cooperation with third countries and international organizations, dissemination and optimization of results and stimulation of the training and mobility of researchers in the Union”.Horizon 2020 can, therefore, be understood as a structural catalyst for innovation in Europe.

Potential beneficiaries of R&D in Europe have traditionally faced a "multitude of national and regional programmes and intergovernmental initiatives as well as EU funding procedures."While stressing fiscal consolidation and structural reform, Horizon 2020’s framework makes “excellence in science” one of its top three priorities for stimulating new growth in Europe, in addition to industrial leadership and addressing societal challenges.

Horizon 2020’s seven-year mandate makes it an essential funding programme to promote Europe’s research and innovation activities. In the context of the Europe 2020 strategy, Horizon 2020 is considered the financial instrument for implementing the Innovation Union, a Europe 2020 flagship initiative which aims to enhance the EU's global competitiveness in research and innovation.

The Horizon 2020 framework clearly outlines a strategy for Union funding that is both market-based and singular. Unlike previous EU funding systems, Horizon 2020’s framework concentrates the entirety of the Union’s funding from the following: Framework Programmes for Research and Technical Development, Competitiveness and Innovation Framework Programme, European Institute of Innovation and Technology. Horizon 2020 funding is expected to have a significant influence on EU R&D research infrastructures through its single set of Rules for Participation and Dissemination.

Horizon 2020 is expected to have a significant impact on EU R&D because it calls for the breakdown of administrative barriers to create a genuine single market for knowledge, research and innovation. Specifically, EU funds will become more accessible for a wider spectrum of EU companies, universities, institutions, citizens, et al. As a result of opening funding paths and encouraging information exchanges,Horizon 2020 is expected to bridge research and innovation activities with the Union’s market.

Horizon 2020's budget distribution will target Small- and Medium-sized Enterprises (SMEs) to encourage their participation in programmes and to stimulate breakthrough innovations. 

Funding Allocation

Negotiations relating to the appropriate allocation of funds for Horizon 2020 took a prolonged and controversial path amidst the ongoing negotiations within both the European Parliament and Council on the 2014-2020 MFF EU Budget.In the end, the total budget of Horizon 2020 amounts to nearly €80 billion and in constant prices €70.2 billion.

  • R&D funding will go to achieving Europe 2020’s objective to increase spending of GDP on R&D to 3% by 2020;
  • 32% funds towards “excellent sciences” (approximately €13 billion will be reserved for ERC and  €6.1 billion for Marie Sklodowska Curie Actions, while the rest of this percentage will go to supporting European research infrastructure and FETs);
  • 22% funds towards “competitive industries” (contains special support for the participation of SMEs, Key Enabling and Industrial Technologies as well as access to risk finance);
  • 39% funds towards research for a “better society” (e.g. health, food and energy security, transport, climate and resources, inclusive and secure societies);

The remainder of Horizon 2020’s budget shall be divided between the European Institute of Innovation and Technology, the Joint Research Council and the Euratom programme for nuclear research.

A detailed breakdown can be found under the following link: http://ec.europa.eu/research/horizon2020/pdf/press/fact_sheet_on_horizon2020_budget.pdf

Industrial Leadership

Horizon 2020 aims to speed up development of the technologies and innovations that will underpin tomorrow's businesses and help innovative European SMEs to grow into world-leading companies.

The chapter on Industrial Leadership focuses on three specific objectives:

1) "Leadership in enabling and industrial technologies" will provide dedicated support for research, development and demonstration and, where appropriate, for standardisation and certification, on information and communications technology (ICT), nanotechnology, advanced materials, biotechnology, advanced manufacturing and processing and space. Emphasis will be placed on interactions and convergence across and between the different technologies and their relations to societal challenges. User needs will be taken into account in all these fields. 

2) "Access to risk finance" will aim to overcome deficits in the availability of debt and equity finance for R&D and innovation-driven companies and projects at all stages of development. Together with the equity instrument of the Programme for the Competitiveness of Enterprises and small and medium-sized enterprises (COSME) (2014 2020) it will support the development of Union-level venture capital. 

3) "Innovation in SMEs" will provide SME-tailored support to stimulate all forms of innovation in SMEs, targeting those with the potential to grow and internationalise across the single market and beyond. 

The goal is to make Europe a more attractive location to invest in research and innovation (including eco-innovation), by promoting activities where businesses set the agenda. It will provide major investment in key industrial technologies, maximise the growth potential of European companies by providing them with adequate levels of finance and help innovative SMEs to grow into world-leading companies.

Innovation in SMEs 

Horizon 2020 actively supports SMEs by providing both direct financial support, and indirect support to increase their innovation capacity. 'Innovation in SMEs' aims at creating a bridge between the core of the framework programme - support to research, development and innovation projects - and the creation of a favourable ecosystem for SME innovation and growth.

The goal is to build innovation management capacity for Small and Medium Enterprises. SME support will be targeted with a dedicated SME instrument, which is a novel approach to support SMEs' innovation activities. It shall attract more SMEs to Horizon 2020, provide support to a wider range of innovation activities and help to increase the economic impact of project results by its company-focused and market-driven approach.

The SME instrument addresses the financing needs of internationally oriented SMEs, in implementing high-risk and high-potential innovation ideas. It aims at supporting projects with a European dimension that lead to radical changes in how business (product, processes, services, marketing etc.) is done. It will launch the company into new markets, promote growth, and create high returns of investment. The SME instrument addresses all types of innovative SMEs so as to be able to promote growth champions in all sectors.

Innovation Investment Package - PPP (2014-2020)

The European Commission, EU Member States and European industry will invest more than €22 billion over the next seven years in innovation for sectors that deliver high quality jobs. Most of the investment will go to five public-private partnerships in innovative medicines, aeronautics, bio-based industries, fuel cells and hydrogen, and electronics. These research partnerships will boost the competitiveness of EU industry in sectors that already provide more than 4 million jobs. They will also find solutions to major challenges for society that are not being solved quickly enough by the market alone, such as reducing carbon emissions or providing the next generation of antibiotics. The package also proposes to extend an initiative to pool research and innovation investments in Air Traffic Management (SESAR), in support of the Single European Sky.


Overall, a proposed €8 billion investment from the next EU research and innovation programme, Horizon 2020, will secure around €10 billion from industry, and close to €4 billion from EU Member States.

The Innovation Investment Package is formed of the five Joint Technology Initiatives, four Joint Programmes, and a Joint Undertaking.

 
Joint Technology Initiatives

  •  Innovative Medicines: to improve European citizens’ health and wellbeing by providing new and more effective diagnostics and treatments such as new antimicrobial treatments;
  • Fuel Cells and Hydrogen: to develop commercially viable, clean, solutions that use hydrogen as an energy carrier and of fuel cells as energy converters; 
  • Clean Sky: to radically reduce the environmental impact of the next generation of aircraft; 
  • Bio-based Industries: to develop new and competitive bio-based value chains that replace the need for fossil fuels and have a strong impact on rural development; 
  • Electronic Components and Systems: to keep Europe at the forefront of electronic components and systems and bridge faster the gap to exploitation

Joint Programmes

  • The second European and Developing Countries Clinical Trials Partnership: to contribute to the reduction of the social and economic burden of Poverty Related Diseases; 
  • The European Metrology Programme for Research and Innovation: to provide appropriate, integrated and fit-for-purpose metrology solutions supporting innovation and industrial competitiveness as well as measurement technologies addressing societal challenges such as energy, environment and health;
  • Eurostars 2: to stimulate economic growth and job creation by enhancing the competitiveness of R&D performing SMEs; 
  • The Active and Assisted Living Research and Development Programme: to improve the quality of life for the elderly and their careers and to increase the sustainability of care systems by enhancing the availability of ICT based products and services for active and healthy ageing

Joint Undertaking

  • The Single European Sky Air Traffic Management Research (SESAR): to coordinate the SESAR project, the technical pillar of the Single European Sky initiative which aims at modernising Air Traffic Management in Europe.

In addition to the public-private partnerships, Horizon 2020 will also make use of advice coming from other forms of partnership such as the European Innovation Partnerships and the Joint Programming Initiatives as well as from European Technology Platforms. Also under Horizon 2020, the European Institute of Innovation and Technology will establish Knowledge and Innovation Communities bringing together, under structured long-term partnerships, the education, research and business sectors.  

Evaluation of Horizon 2020

All proposals are evaluated on three main criteria: Excellence, Impact and Quality and efficiency of the implementation. In comparison to Framework Programme 7, Horizon 2020 predecessor, the impact criterion has been significantly extended and has a much more translational and industrial focus. 

1) ‘Excellence’ includes:

  • Clarity and pertinence of the objectives;
  • Credibility of the proposed approach;
  • Soundness of the concept, including trans-disciplinary considerations, where relevant;
  • Evidence that proposed work is ambitious, has innovation potential, and is beyond the state of the art (e.g. ground-breaking objectives, novel concepts and approaches)

2)   ‘Impact’

  • The expected impacts listed in the work programme under the relevant topic
  • Enhancing innovation capacity and integration of new knowledge;
  • Strengthening the competitiveness and growth of companies by developing innovations meeting the needs of European and global markets; and, where relevant, by delivering such innovations to the markets;
  • Any other environmental and socially important impacts (not already covered above);
  • Effectiveness of the proposed measures to exploit and disseminate the project results (including management of IPR), to communicate the project, and to manage research data where relevant.

3) Quality and efficiency of the implementation’

Coherence and effectiveness of the work plan, including appropriateness of the allocation of tasks and resources;

Complementarity of the participants within the consortium (when relevant);

Appropriateness of the management structures and procedures, including risk and innovation management. 

Horizon 2020

Horizon 2020 funding is instrumental in stimulating research and innovation activities, which include “the whole spectrum of activities of research, technological development, demonstration and innovation, including the promotion of cooperation with third countries and international organizations, dissemination and optimization of results and stimulation of the training and mobility of researchers in the Union”.Horizon 2020 can, therefore, be understood as a structural catalyst for innovation in Europe.

Potential beneficiaries of R&D in Europe have traditionally faced a "multitude of national and regional programmes and intergovernmental initiatives as well as EU funding procedures."While stressing fiscal consolidation and structural reform, Horizon 2020’s framework makes “excellence in science” one of its top three priorities for stimulating new growth in Europe, in addition to industrial leadership and addressing societal challenges.

Horizon 2020’s seven-year mandate makes it an essential funding programme to promote Europe’s research and innovation activities. In the context of the Europe 2020 strategy, Horizon 2020 is considered the financial instrument for implementing the Innovation Union, a Europe 2020 flagship initiative which aims to enhance the EU's global competitiveness in research and innovation.

The Horizon 2020 framework clearly outlines a strategy for Union funding that is both market-based and singular. Unlike previous EU funding systems, Horizon 2020’s framework concentrates the entirety of the Union’s funding from the following: Framework Programmes for Research and Technical Development, Competitiveness and Innovation Framework Programme, European Institute of Innovation and Technology. Horizon 2020 funding is expected to have a significant influence on EU R&D research infrastructures through its single set of Rules for Participation and Dissemination.

Horizon 2020 is expected to have a significant impact on EU R&D because it calls for the breakdown of administrative barriers to create a genuine single market for knowledge, research and innovation. Specifically, EU funds will become more accessible for a wider spectrum of EU companies, universities, institutions, citizens, et al. As a result of opening funding paths and encouraging information exchanges,Horizon 2020 is expected to bridge research and innovation activities with the Union’s market.

Horizon 2020's budget distribution will target Small- and Medium-sized Enterprises (SMEs) to encourage their participation in programmes and to stimulate breakthrough innovations. 

Funding Allocation

Negotiations relating to the appropriate allocation of funds for Horizon 2020 took a prolonged and controversial path amidst the ongoing negotiations within both the European Parliament and Council on the 2014-2020 MFF EU Budget.In the end, the total budget of Horizon 2020 amounts to nearly €80 billion and in constant prices €70.2 billion.

  • R&D funding will go to achieving Europe 2020’s objective to increase spending of GDP on R&D to 3% by 2020;
  • 32% funds towards “excellent sciences” (approximately €13 billion will be reserved for ERC and  €6.1 billion for Marie Sklodowska Curie Actions, while the rest of this percentage will go to supporting European research infrastructure and FETs);
  • 22% funds towards “competitive industries” (contains special support for the participation of SMEs, Key Enabling and Industrial Technologies as well as access to risk finance);
  • 39% funds towards research for a “better society” (e.g. health, food and energy security, transport, climate and resources, inclusive and secure societies);

The remainder of Horizon 2020’s budget shall be divided between the European Institute of Innovation and Technology, the Joint Research Council and the Euratom programme for nuclear research.

A detailed breakdown can be found under the following link: http://ec.europa.eu/research/horizon2020/pdf/press/fact_sheet_on_horizon2020_budget.pdf

Industrial Leadership

Horizon 2020 aims to speed up development of the technologies and innovations that will underpin tomorrow's businesses and help innovative European SMEs to grow into world-leading companies.

The chapter on Industrial Leadership focuses on three specific objectives:

1) "Leadership in enabling and industrial technologies" will provide dedicated support for research, development and demonstration and, where appropriate, for standardisation and certification, on information and communications technology (ICT), nanotechnology, advanced materials, biotechnology, advanced manufacturing and processing and space. Emphasis will be placed on interactions and convergence across and between the different technologies and their relations to societal challenges. User needs will be taken into account in all these fields. 

2) "Access to risk finance" will aim to overcome deficits in the availability of debt and equity finance for R&D and innovation-driven companies and projects at all stages of development. Together with the equity instrument of the Programme for the Competitiveness of Enterprises and small and medium-sized enterprises (COSME) (2014 2020) it will support the development of Union-level venture capital. 

3) "Innovation in SMEs" will provide SME-tailored support to stimulate all forms of innovation in SMEs, targeting those with the potential to grow and internationalise across the single market and beyond. 

The goal is to make Europe a more attractive location to invest in research and innovation (including eco-innovation), by promoting activities where businesses set the agenda. It will provide major investment in key industrial technologies, maximise the growth potential of European companies by providing them with adequate levels of finance and help innovative SMEs to grow into world-leading companies.

Innovation in SMEs 

Horizon 2020 actively supports SMEs by providing both direct financial support, and indirect support to increase their innovation capacity. 'Innovation in SMEs' aims at creating a bridge between the core of the framework programme - support to research, development and innovation projects - and the creation of a favourable ecosystem for SME innovation and growth.

The goal is to build innovation management capacity for Small and Medium Enterprises. SME support will be targeted with a dedicated SME instrument, which is a novel approach to support SMEs' innovation activities. It shall attract more SMEs to Horizon 2020, provide support to a wider range of innovation activities and help to increase the economic impact of project results by its company-focused and market-driven approach.

The SME instrument addresses the financing needs of internationally oriented SMEs, in implementing high-risk and high-potential innovation ideas. It aims at supporting projects with a European dimension that lead to radical changes in how business (product, processes, services, marketing etc.) is done. It will launch the company into new markets, promote growth, and create high returns of investment. The SME instrument addresses all types of innovative SMEs so as to be able to promote growth champions in all sectors.

Innovation Investment Package - PPP (2014-2020)

The European Commission, EU Member States and European industry will invest more than €22 billion over the next seven years in innovation for sectors that deliver high quality jobs. Most of the investment will go to five public-private partnerships in innovative medicines, aeronautics, bio-based industries, fuel cells and hydrogen, and electronics. These research partnerships will boost the competitiveness of EU industry in sectors that already provide more than 4 million jobs. They will also find solutions to major challenges for society that are not being solved quickly enough by the market alone, such as reducing carbon emissions or providing the next generation of antibiotics. The package also proposes to extend an initiative to pool research and innovation investments in Air Traffic Management (SESAR), in support of the Single European Sky.


Overall, a proposed €8 billion investment from the next EU research and innovation programme, Horizon 2020, will secure around €10 billion from industry, and close to €4 billion from EU Member States.

The Innovation Investment Package is formed of the five Joint Technology Initiatives, four Joint Programmes, and a Joint Undertaking.

 
Joint Technology Initiatives

  •  Innovative Medicines: to improve European citizens’ health and wellbeing by providing new and more effective diagnostics and treatments such as new antimicrobial treatments;
  • Fuel Cells and Hydrogen: to develop commercially viable, clean, solutions that use hydrogen as an energy carrier and of fuel cells as energy converters; 
  • Clean Sky: to radically reduce the environmental impact of the next generation of aircraft; 
  • Bio-based Industries: to develop new and competitive bio-based value chains that replace the need for fossil fuels and have a strong impact on rural development; 
  • Electronic Components and Systems: to keep Europe at the forefront of electronic components and systems and bridge faster the gap to exploitation

Joint Programmes

  • The second European and Developing Countries Clinical Trials Partnership: to contribute to the reduction of the social and economic burden of Poverty Related Diseases; 
  • The European Metrology Programme for Research and Innovation: to provide appropriate, integrated and fit-for-purpose metrology solutions supporting innovation and industrial competitiveness as well as measurement technologies addressing societal challenges such as energy, environment and health;
  • Eurostars 2: to stimulate economic growth and job creation by enhancing the competitiveness of R&D performing SMEs; 
  • The Active and Assisted Living Research and Development Programme: to improve the quality of life for the elderly and their careers and to increase the sustainability of care systems by enhancing the availability of ICT based products and services for active and healthy ageing

Joint Undertaking

  • The Single European Sky Air Traffic Management Research (SESAR): to coordinate the SESAR project, the technical pillar of the Single European Sky initiative which aims at modernising Air Traffic Management in Europe.

In addition to the public-private partnerships, Horizon 2020 will also make use of advice coming from other forms of partnership such as the European Innovation Partnerships and the Joint Programming Initiatives as well as from European Technology Platforms. Also under Horizon 2020, the European Institute of Innovation and Technology will establish Knowledge and Innovation Communities bringing together, under structured long-term partnerships, the education, research and business sectors.  

Evaluation of Horizon 2020

All proposals are evaluated on three main criteria: Excellence, Impact and Quality and efficiency of the implementation. In comparison to Framework Programme 7, Horizon 2020 predecessor, the impact criterion has been significantly extended and has a much more translational and industrial focus. 

1) ‘Excellence’ includes:

  • Clarity and pertinence of the objectives;
  • Credibility of the proposed approach;
  • Soundness of the concept, including trans-disciplinary considerations, where relevant;
  • Evidence that proposed work is ambitious, has innovation potential, and is beyond the state of the art (e.g. ground-breaking objectives, novel concepts and approaches)

2)   ‘Impact’

  • The expected impacts listed in the work programme under the relevant topic
  • Enhancing innovation capacity and integration of new knowledge;
  • Strengthening the competitiveness and growth of companies by developing innovations meeting the needs of European and global markets; and, where relevant, by delivering such innovations to the markets;
  • Any other environmental and socially important impacts (not already covered above);
  • Effectiveness of the proposed measures to exploit and disseminate the project results (including management of IPR), to communicate the project, and to manage research data where relevant.

3) Quality and efficiency of the implementation’

Coherence and effectiveness of the work plan, including appropriateness of the allocation of tasks and resources;

Complementarity of the participants within the consortium (when relevant);

Appropriateness of the management structures and procedures, including risk and innovation management. 

Challenges

While there are many context-specific factors that influence the level of R&D intensity in the European Union the main policy challenges for EU R&D can be categorised as follows: 

(1) Insufficient or inadequate public funding of the science base and higher education system leading (in the medium to long run) to decreasing quality of the science and technology (S&T) output (in terms of high impact publications and patenting activities); loss of attractiveness for domestic and foreign talent resulting eventually in brain drain; a diminishing pool of science and engineering graduates relative to the needs of the business sector; and loss of capacity to engage in effective cooperation with the business sector. Typical situations include sub-critical public funding spread over too many public researchers or priorities, wrong scientific prioritisation with regard to industrial specialisation and inefficient research evaluation and/or funding allocation mechanisms. 

 

(2) Inefficient public incentives to stimulate business R&D (e.g. grants, R&D tax incentives, measures to facilitate access to private funding). Another key aim of public R&D funding and indirect support measures is to give the business sector incentives to engage in more R&D activities. Wherever such incentives selectively support specific sectors or types of firms, they constitute state aid. A typical policy failure consists in piling up new, hastily designed measures without having first properly evaluated the impact of the policy mix in place or assessed possible substitution or crowding-out effects. This results in added complexity, red tape and eventually a lack of systemic impact on business R&D. 

(3) Poor match between supply- and demand-side measures, leading to loss of efficiency of the national innovation system as a whole. Public efforts to fund research and higher education institutions and to stimulate business R&D will fail to bring the expected socio-economic benefits if policies are not in place to stimulate the demand for innovative products and solutions. Such demand-side policies (e.g. product market regulation, innovative and pre-commercial procurement) must be closely matched with supply-side measures as part of an integrated and comprehensive policy approach including joint or coordinated implementation and evaluation. In most Member States, the lack of appropriate structures for overall governance of the national innovation system remains an issue. 

 

(4) Need to identify and address the bottlenecks that restrict the growth of firms in innovative sectors, leading to a slow rate of economic renewal and inefficient transformation of S&T assets into economic growth and fiscal revenues. Innovation has the potential to rapidly change whole sectors of the economy and to bring enormous economic, social and fiscal benefits to the countries that create the right environment for it. 

 

A surprisingly small number of the firms starting up in any given year are responsible for the majority of jobs created 10 years down the line. Only a very few Member States have so far adopted a truly systemic approach to reviewing their research and innovation policies and identifying the obstacles that need to be overcome to create a business environment in which innovative firms are more likely to grow.

In summary, one of the biggest challenges of EU Research and Development is the wide gap in the intensity of the R&D investment by businesses between the majority of both the Euro zone and the Non-Euro zone. Furthermore, the convergence of mostly state and higher education funded research towards more privately funded R&D depends on the political determination of the government to fix a budget in order to achieve long term economic growth implied by the 3% Lisbon target. Thirdly, the discrepancy in R&D input and output between the majority of the New Member States plus Greece and the rest of the Member States mirrors the R&D effort of the private investors for these countries. Lastly, the number of signed patents depends on the industrial R&D diversity which is lacking for the majority of New Member States where R&D funding depends on the state and the universities. 

More information on Research and Development spending in the EU in the context of the 2020 growth strategy and its challenges can be found under the following link: 

http://www.swp-berlin.org/fileadmin/contents/products/arbeitspapiere/Research_and_Development_KS.pdf

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