‘Weak’ funding blamed as Europe falls behind on innovation

A poor funding landscape and structural issues within universities have resulted in Europe “lagging behind” on innovation, a conference has heard.

“Not only are we starting to lag behind in science, but the gap in patents, the gap in start-ups, the gap in unicorns coming out of innovation is even starker,” Michiel Scheffer, president of the board of the European Innovation Council, told Times Higher Education’s Europe Universities Summit. “Europe is still reasonably good in science, but is really lagging behind in valorising this science in innovation.”

According to the European Commission’s most recent European Innovation Scoreboard, released in July 2023, Australia, the US, Canada and South Korea all outperform the European Union by a range of 8 to 26 percentage points, while Japan is only 2 percentage points behind and China 5 percentage points.

Launched in 2021 under the third pillar of Horizon Europe, titled “Innovative Europe”, the European Innovation Council (EIC) has a €10.1 billion (£8.7 billion) budget to “identify, develop and scale up breakthrough technologies and game-changing innovations”.

EIC funding, however, should be “the icing on the cake” for research projects or start-ups, Dr Scheffer said, explaining that most funding should come from national or regional sources. “France is probably the country with the best balance between regional, national and European funding, he continued. “Sometimes, like in Germany, the regional and national system is so comfortable that we have fewer applicants at European level.”

Describing Europe’s innovation funding landscape as “fragmented” and “weak”, Dr Scheffer noted significant disparities across the continent. For instance, the EIC has funded 82 start-ups and small-medium enterprises (SMEs) in France, 70 in Germany and 59 in the Netherlands through its “Accelerator” scheme, according to its 2023 impact report, while countries including Greece, Hungary and Latvia each have only one recipient.

“There is a difference between member states and within member states,” the EIC head said. “The difference between them is mainly: how is the third mission of universities legislated,” referring to the societal contribution of institutions, “and how is it carried out by the universities? Are there units set up to foster the valorisation of knowledge? Is it enriched by having activities such as training for students to become entrepreneurs? Are there facilities for students to use?”

Universities play a “very important role” in fostering innovation, he said, adding: “Ninety per cent of the companies we fund are within 10 kilometres of a university.”

“Why is valorising through start-ups so important?” said Dr Scheffer. “The existing companies are not going to deliver the [green and digital] transitions in Europe, so we need new ones. Our role, and the role of universities, is also to create new entrepreneurship and new industries, and not only stick with the current ones.”

emily.dixon@timeshighereducation.com

The THE Europe Universities Summit is being held in Bremen, Germany, in partnership with Constructor University.