EU research competitiveness, unpacked
The European economy is on a “path of lower growth and lower productivity” than its international rivals – and the only plausible means to overcome this is through science, research, technological development and innovation. This is the headline framing of the European Commission’s 2026 Science, Research and Innovation Performance of the EU (SRIP) report.
The report is clear from the outset that the European Union has “significant assets” to help it on this quest: a strong scientific base with world-class researchers and world-class infrastructure, operating as part of a model organised around “openness, responsibility and scientific freedom.” But this may not be enough:
“These strengths do not automatically translate into productivity, technological leadership or strategic autonomy.”
Transforming research excellence into market leadership and productivity growth, the authors argue, will require investment and scale. The report seems extremely well-timed, from the Commission’s perspective, as crunch EU budget talks continue.
R&D intensity
The simplest part of the argument is about R&D intensity, which at the most basic level can be thought about as the percentage of GDP invested across the Union, or in individual countries, in research and development – whether by business, government, or other important actors such as higher education institutions.
This intensity “remains below that of several major competitors,” the report warns, and the “gap in absolute spending continues to widen.”
Statistics released by Eurostat this week show the ongoing struggle for the bloc to become more R&D intensive, despite increasing investment in cash terms:
This headline figure disguises huge divergence at the individual member state level – and even in those EU countries with the highest investment proportion, in most cases this still lags behind the international competitors which the Commission typically chooses to compare against: USA, Japan, South Korea, Switzerland and China:
The report contends that at least some of the gap is explained by how European research is structured:
“Public R&D is mainly channelled to universities and basic research, while private funding remains concentrated in mid-tech manufacturing, with a comparatively small share in the fast-growing high-tech and knowledge-intensive services sectors.”
This is reflected in metrics such as the bloc’s share of patent applications, with the rueful observation that the EU share of the global total fell from around 30 per cent in 2000 to 16 per cent in 2022, while China’s rose from three per cent to nearly 33 per cent: a “profound redistribution of global innovation capacity.”
The report digs deep into the geographic disparities, not just between countries but at the regional level and between urban and rural areas. Collaborative research and innovation activities are found to cluster in certain member states, and the “self-reinforcing dynamics of agglomeration” will favour areas which are most urbanised and historically innovative.
Scientific power
The SRIP report is pleased to highlight on various occasions how the EU ranks second globally for scientific output – but equally prone to observe that this position is less strong in “strategic technologies” where China in particular is making rapid gains (and the USA is consolidating its many advantages).
In defence, investment is skewed towards the procurement of equipment rather than research and innovation. In space-related technologies, the EU’s global share is “limited and declining.”
And longer-term, it’s suggested at one point that the “most acute challenge” for the EU’s research ecosystem is coming demographic decline, leading to “sharp contraction in the supply of high-level human capital required to sustain long-term R&I capacity.”
“Critically for the scientific pipeline, the population aged 21 to 26 – the primary cohort for doctoral recruitment – is expected to decrease by almost 2.5 million individuals by 2050. An ageing society further challenges this shrinking talent pool, likely to shift policy priorities towards pensions and healthcare, reducing resources for long-term R&I investments.”
How to respond
The Commission’s presentation of the report’s findings picks out investment, fragmentation, scaling innovation, and global competition as the four headline challenges. It also makes the case that many of its current or forthcoming initiatives – the proposed budget ramp up for the next Horizon Europe, the European Innovation Act, the Choose Europe talent attraction programme – will address said challenges.
It is true that the SRIP report has plenty to say about improving commercialisation and technology deployment. But it also has interesting things to say about the relationship between national and EU-level research and innovation funding. First, that they do not represent an either/or choice:
“The evidence presented in the report suggests that EU R&I funds do not crowd out national funds; instead, they reinforce each other: an increase in national investment in R&D is associated with an increase in Horizon Europe funding two years later.”
But beyond this, that one of the key issues for the EU to tackle is coherence across governance levels; national thematic priorities and EU programmes must reinforce each other, the report argues, “amplifying resources and supporting cross-border ecosystems.”
This speaks to some of the objectives of the forthcoming European Research Area Act, which – when it arrives – has the potential to fundamentally reconfigure European research. But it will need to do so alongside a serious programme of investment if some of the loftier ambitions in this report around catching back up to the USA and China are to be realised.