The European Commission highlighted the importance of research and innovation (R&I) investments and reforms for economic recovery in the European Union, and made proposals to help EU Member States maximise the impact of their budgets at a time when many countries still face spending constraints. Increasing R&I investment is a proven driver of growth, while improving the efficiency and quality of public R&I spending is also critical if Europe is to maintain or achieve a leading position in many fields of knowledge and key technologies. The Commission has pledged support to Member States in pursuing R&I reforms best suited to their needs, including by providing policy support, world-class data and examples of best practice.

The Communication published highlights three key areas of reform:

• Improving the quality of strategy development and the policy-making process, bringing together both research and innovation activities, and underpinned by a stable multi-annual budget that strategically focuses resources;
• Improving the quality of R&I programmes, including through reductions of administrative burdens and more competitive allocating of funding;
• Improving the quality of public institutions performing research and innovation, including through new partnerships with industry.

The Commission has also called on Member States to prioritise R&I, as public authorities regain margins for growth-enhancing investment. With current R&I spending across the public and private sector worth just over 2% of GDP, the EU remains well behind international competitors like the United States, Japan and South Korea, with China also now very close to overtaking the EU (see graph). Increasing R&I spending to 3% of GDP therefore remains a key target for the EU, but the Communication shows that improving the quality of public spending in this area is also essential in order to increase the economic impact of investment. The Communication points equally to the need for the EU needs to put in place the right framework conditions to encourage European companies to innovate further.

For further information, please see the State of the Innovation Union report: http://ec.europa.eu/research/innovation-union/pdf/state-of-the-union/2013/state_of_the_innovation_union_report_2013.pdf#view=fit&pagemode=none