EC study calls for more public investment in research and innovation
The European Commission released a study calling for more public funding of research and innovation (R&I), to act as as a catalyst to boost private R&I activities and overall economic growth. The study was presented at the ERAC (European Research Area and Innovation Committee) meeting in Malta on 16 March 2017. It reviews existing empirical literature and underlines the particularly important role of public R&I funding in today's rapidly changing and riskier innovation landscape.
According to the study, roughly two thirds of economic growth in Europe can be traced back to innovation. It also estimates that the typical returns for private R&I investment range between 10% and 30% and are even higher for the economy in general, due to positive spillover effects. In general, public R&I investment contributes to generating and diffusing new knowledge, to developing new skills, and to creating networks that enable stronger knowledge flows. Returns on public R&I investment are estimated to be around 20%, with returns on EU-funded R&I estimated to be even higher.
The study stresses that for public R&I funding to have maximum impact, it should cover the whole cycle of innovation, from fundamental research to market-creating innovation. The effects of digitisation of the economies are also investigated, as this development has revolutionised the way innovation works and has brought about a growing concentration of innovation benefits with a smaller number of key players. This, in turn, has strong implications for public innovation policy, according to the authors of the study.
Carlos Moedas, Commissioner for Research, Science and Innovation said: "The study demonstrates once again the importance of public investments in research and innovation. Such investments are necessary to boost excellent research and support new forms of radical, market-creating innovation often driven by digitalisation."
The report will subsequently be submitted to the high level group of experts chaired by Pascal Lamy, President Emeritus of the Jacques Delors Institute, who advises the Commission on how to maximise the impact of the EU's investment in R&I.
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