Europe needs all hands on deck to remove obstacles to innovation

The EU is losing ground to its global competitors, and this is partly due to legislation that sometimes creates unexpected barriers to research and innovation.

This is problematic since innovation is critical for achieving Europe’s green and digital transitions towards sustainability, for strengthening Europe’s competitiveness and for delivering on the UN’s Sustainable Development Goals. 

As such, strengthening the EU’s research and innovation performance should be a key strategic priority for the next European Commission between 2024-2029.

This is why, the idea of the Belgian Presidency of the Council to introduce a European Innovation Stress Test to repair system weaknesses could become an impactful instrument for enhancing the EU’s innovation ecosystem, and therefore also competitiveness. 

This is why the European Economic and Social Committee has supported the idea, responded positively and came up with a number of proposals to develop a win-win instrument.

EU initiatives must encourage investment in innovation

The EU provides dedicated institutions and programmes to foster research, development and innovation (RD&I). 

Horizon Europe is for instance the largest research and innovation funding programme in the world, funding excellent research, fostering cross-sectorial and international collaboration, and enabling the development of emerging and new technologies. 

It is as such important for the EU to be a competitive player in the global market. In addition, 

The New European Innovation Agenda aims to position the EU at the forefront of innovation against the backdrop of the post-COVID-19 recovery, the European Green Deal and the conflict in Ukraine. 

The European Commission’s idea to leverage regulatory experimentation (“sandboxes”), regional ecosystems, human talent and access to finance, which was relaunched in 2023 under the Green Deal Industrial Plan, was a welcomed step.

Despite these important commitments and policy initiatives to support European innovation, the EU’s performance has and continues to improve at a lower rate than key global competitors such as the US and China, and there is a worrying trend of losing further ground against them.

Now is the time for EU initiatives to stimulate, rather than discourage, investment in innovation. 

Only then Europe will be able to make full use of the power of innovation to enable the green and digital transitions, to achieve long-term competitiveness, and to help ensure a high standard of life for all Europeans.

What are the solutions?

So, how could this be done? Employers, trade unions and civil society organisations argue that EU and national authorities need to ensure positive framework conditions which are conducive to promoting R&D activities and attracting investment for all types of innovation in Europe.

Framework conditions for innovation are important for actors in both private and public sectors of all sizes, from individual innovators, universities, spin-offs, start-ups, small and medium-sized enterprises (SMEs), and larger national and international organisations, across the full spectrum, from traditional low-tech sectors to fast-growth high-tech sectors.

Multiple conditions must be fulfilled, including access to sufficient workforce and talent, sufficient financial support and capital markets, and positive attitudes toward technological risk-taking. In addition, lifelong education and the appropriate involvement of social partners will be important. 

The European Commission needs to identify key strengths and weaknesses of the European innovation landscape, and how best to overcome these.

A practical solution for ensuring an innovation-friendly landscape would be to create a checklist, against which future policy initiatives and revision of existing legislation should be evaluated, on a routine basis. 

This would help to verify that new policy initiatives do not unintentionally create obstacles or barriers to investment in innovation in the EU. 

The EESC believes that this “top 10” checklist should take a holistic view, including availability of talent, gender equality, and consistency with present or future tax incentives for innovation, while also taking into account the best available weight of scientific evidence.

There may be good reasons why existing or draft legislation does not fulfil one or more of these “Top 10” points on the checklist, but in such cases, policymakers would need to adapt the proposal or justify why and how unintended negative impact on innovation would be avoided.

The EESC Stress Test provides practical and easily implementable guidance for policymakers, complementing existing frameworks (including the “Innovation Principle” and the “better regulation tool-box”). 

Of course, the tool will only be able to have a positive impact on European innovation if the European Commission systematically uses it and monitors its application. In addition, the tool could have an equally positive impact if used by policymakers in EU member states, and even at regional and local levels.

Europe needs all hands on deck to remove obstacles to innovation, and to make the EU the most attractive region in the world for it. 

It would be a great boost for innovation if the next European Commission could adopt and promote the use of the European Innovation Stress Test for systematically reviewing existing and evaluating each new legislative and policy initiative. 

This would also set a good example for member states and regions to do likewise.

Olivier Joris serves as Member of the European Economic and Social Committee (EESC) Employers’ Group.

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