A Growth-Inducing EU Innovation Act

Entrepreneurial innovation in Europe is currently being held back in many areas. Obstacles exist throughout the entire innovation cycle: from research funding to the market launch of new business models. To overcome these challenges, the European Commission is planning a European Innovation Act.

"The current economic policy debate in Europe focuses heavily on the competitiveness of traditional industrial structures, neglecting a crucial factor for long-term prosperity: Europe's ability to produce radical innovations," emphasises cep economist André Wolf, author of the study. While incremental innovations improve existing technologies, radical innovations create entirely new markets through revolutionary technologies and consumer experiences, thereby also helping to reduce existing external dependencies. In a long-term analysis covering the last decade, the study shows that the EU has been unable to keep pace with global innovation hotspots in terms of the number of radical patents in any of the five technology fields considered.

To catch up globally, the European Union should pursue a multi-stage strategy: First, the general framework conditions for the market penetration of innovative technologies must be improved. This requires overcoming regulatory fragmentation, reducing administrative costs, improving access to venture capital and addressing the shortage of skilled workers. Second, these measures should be combined with new regional development strategies that focus on radical innovation and are guided by intensive coordination and comprehensive information exchange at EU level. The EU should actively support its Member States and regions in developing innovation hubs and integrate these hubs into its global partnership policy.