What are we going to do about Europe’s innovation deficit?

Giancarlo Benelli explores how the European Union can transform its enormous capacity to generate knowledge into innovation.
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By Giancarlo Benelli

Giancarlo Benelli, Head of International Markets, Advanced Accelerator Applications (A Novartis Company)

20 Jun 2022

When it comes to academic output, Europe is a global powerhouse. Home to 16 of the top 50 research universities in the world, over 120,000 scientific publications were published in Europe between 2017 and 2019, an impressive lead on both the US (only 70,000) and China (100,000).

While leading in academic output, we are failing when it comes to transforming this knowledge into innovation. According to the European Commission, our innovation deficit is not because of an absence of new ideas or discoveries but rather a lack of success in diffusing and commercialising them. How can we address this innovation deficit?

Let’s start by considering the situation. One way to measure an economy’s ability to transform knowledge into innovation is by looking at the number of patents filed under the international Patent Cooperation Treaty (PCT). This number helps us understand and compare innovation capacity between countries, as a filing for a patent under the PCT represents innovation which developers anticipate will have an impact at a global scale.

PCT applications are intensely concentrated: 10 countries accounted for 94% of all applications in 2020. While six European countries (including the UK) were represented amongst the top 10 applicants, these countries were jointly responsible for only 19% of applications - a sum which is less than the individual amounts filed by China, the US and Japan.

Now, let’s zoom in to the national/regional level. The European Patent Office (EPO) received 180,250 total patent applications in 2020, less than a third than that of the US (646,244) and just over half of Japan (307,969). Even within the EPO, non-European countries delivered the most applications as only two of the top five were European. The US ranked first (44,293), followed by Germany (25,954), Japan (21,841), China (13,432) and France (10,554).

There are three clear routes for us to begin addressing the innovation deficit and ensure EU countries better transform our academic prowess into globally leading innovation.

Encourage private R&D spend

While Europe has significant R&D spend, its private investment amounts to just 19% of the global total (behind China at 24% and the U.S. at 28%).  As the European Union ups its public spend through diverse frameworks, it should also work to create systems which empower the R&D ecosystem to match this ambition through a robust and predictable regulatory and IP system. As private R&D spending is boosting innovation in countries outside the EU, let’s work to promote and protect private spend within our systems and processes.

“We know that innovation, research, and science can lead to a healthier world and to stronger and more sustainable economies – let’s work together to translate our knowledge into solutions”

Reimagine our approach to data

Rethinking how we handle data and support access can help level the playing field for innovative firms and connect data pools to drive breakthrough discoveries. At the same time, we need to ensure our data policies align with European values to keep the protection of our citizens at the very core of what we do. These two objectives should be at the core of our plans for the European Health Data Space, a monumental policy which will transform how health data is shared in Europe.

Invest in talent

This is an action item for all spheres from policy to business to personal. It’s not just about highlighting what skills are needed, but also helping developing talent understand how these skills will apply. This kind of communication can help repair the disconnect preventing our world-leading academic output from translating into competitive innovation.

If we begin our journey by focusing on these areas, we might land on an output of European patents relative to our academic capabilities. While patent applications are not the 'be all and end all', they do provide us with a good indication of innovation output and should be taken into consideration. We know that innovation, research, and science will lead to a healthier world and to stronger and more sustainable economies – let’s work together to get there.

This article reflects the views of the author and not the views of The Parliament Magazine or of the Dods Group

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