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29th Sep 2016

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EU commission's doomsday talk on innovation 'exaggerated'

Europe is facing an “innovation emergency”, according to the European Commission. But researchers and industry leaders - and the facts - paint a less gloomy picture.

The first time EU research commissioner Maire Geoghegan-Quinn spoke the alarming words was in early October 2010 at the launch of the executive’s new, seven-year innovation strategy.

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  • There is too much doomsday talk on EU innovation, say experts (Photo: European Commission)

“Business R&D in the EU is 66 percent lower than in the US and 122 percent lower than in Japan, as a share of GDP. And venture capital funds in Europe were in 2008 at a quarter of the level in the US. So we face an innovation emergency,” she told reporters in Brussels.

Since then, “innovation emergency” has been her phrase of choice to describe the state of innovation in Europe, repeating it at least eight more times in official speeches, the last of which - in late March at a lecture in The Hague - was entitled “From Innovation Emergency to Economic Growth”.

But while few would argue that Europe has nothing to worry about, with countries like China and India catching up fast, few believe that Europe is really facing an “innovation emergency”.

Standing strong

“In my view, this is an exaggeration of the facts,” writes Hugo Hollanders, a researcher at Maastricht University and author of the commission’s very own annual Innovation Scoreboard, in an e-mail to this website.

The facts, as outlined in the latest such scoreboards in February this year, show that over the last five years, Europe has been second only to the US, Japan and South Korea.

Moreover, while China is catching up, “the EU27 is slowly closing its performance gap to Japan and the US and increasing its lead over Canada and Brazil.”

The scoreboard takes into account an array of 25 innovation indicators, ranging from "the availability of a high-skilled and educated workforce" to "the number of firms that have introduced innovations onto the market" (even though for comparisons with other regions in the world, it uses 12 indicators).

It is true, according to the scoreboard, that business R&D spending and venture capital in Europe are lower than elsewhere. So are the number of patent applications and that of public-private scientific co-publications.

But the EU does well in the export of knowledge-intensive services and in public R&D spending. It also does well in revenues from licenses and patents, number of doctorate degrees and most cited scientific publications.

“My impression,” says Hollanders, “is that Europe is doing well, generally speaking.”

The continent’s innovation leaders - Sweden, Denmark, Germany and Finland (in that order) - are even “able to compete with the very top”, he says. “Sure, some cracks are showing here and there, but the house itself is standing strong.”

C'est trop

Industry leaders seem to agree. “I would not call it an emergency, definitely not,” says Reinhold Achatz, innovation chief at German technology giant ThyssenKrupp. Before, he used to run the innovation department at Siemens.

“We have to be critical, but we shouldn't underestimate ourselves. We have excellent scientists and researchers,” he says. “But there is no reason to lean back. There is room for improvement in the [market] implementation phase."

Hugues-Arnaud Mayer, innovation chief at Medef, the largest employers’ union in France, also thinks talk of an emergency is somewhat over the top.

“No, that is too much,” he says. “In certain sectors, yes. And in certain regions, notably in the Latin countries. But we have some very large companies that are world leaders in their respective sectors."

Gerhard Huemer, innovation spokesperson for Euapme, an umbrella organisation of European small and medium enterprises, thinks that the commission’s doomsday talk on innovation is “very funny”.

“The eurozone still has a balanced foreign trade account and seems to be competitive,” he says. “And then it has an innovation problem?”

Catchy politics

Why, then, call it an emergency? “It is a catchy one-liner,” says one EU official, employed by the commission’s research department. “I don’t think it is such a bad phrase, actually.”

Hugo Hollanders, the author of the Union’s innovation scoreboard, blames the commission's "alarming tone" on “the particularity of politicians and policy-makers.”

“But I do not share their opinion,” he says. “Or at least not completely.”

For his part, EU commission research spokesperson Michael Jennings defends the use of the term, saying that it is clear that "leading research-intensive European companies, while still strong, are slowly slipping down the rankings."

"So it is very clear that we need to do more to compete effectively on the international stage," he says.

EU commission presents 'realistic' lobbying rules

The EU executive called for more stringent regulation of interest representatives trying to influence EU decision making. Critics say the 'transparency revolution' is being blocked by the European Parliament and EU member states.

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