Euronews Debates: How can Europe regain pole position in innovation?

How can Europe regain leadership in innovation? - Copyright euronews

Published on 21/03/2023 - 11:18•Updated 29/03/2023 - 11:28

Innovation is seen as key to solving some of Europe’s biggest societal, environmental and economic challenges. But competitiveness is lagging and renewed geopolitical uncertainty and Russia’s war in Ukraine are adding additional pressures.

How can Europe elevate its innovation ambitions to the next level and retake pole position on the international stage?

Our latest Euronews Debate, Innovate or be history! How can Europe regain leadership in innovation?, has put some of the key challenges up for discussion as part of an event held in Brussels, in partnership with the European Round Table for Industry (ERT).

Our panel of experts discussed everything from funding to regulation and education to entrepreneurship, as Europe builds its path to innovation success.

Watch the full debate in the video below:

Innovation ‘critical’ for prosperity

“Innovate or be history, what a dramatic title of today’s event. Is it too dramatic, or is it just to the point?” asked Dr. Martin Brudermüller, CEO of BASF and Chair of the ERT’s Committee on Competitiveness & Innovation, as he set the context for the debate.

“Innovation skills and potential are absolutely critical for Europe’s ability to play a major role in an increasingly challenging geopolitical setup,” he highlighted, as he announced the publication of a new ERT Flagship paper, Innovation Made in Europe, Setting the Foundation for Future Competitiveness.

“A region that is not innovating today will not have competitiveness and prosperity tomorrow,” Brudermüller stressed.

He said that the challenges being faced by the world today will only be solved with innovation in its broadest sense and that only a society involved in new solutions to save the planet will be an attractive place for the next generations.

Lagging competitiveness amid big challenges

“Europe has to have the ambition to be at the forefront of regions in innovation,” said Brudermüller.

“We, as ERT, are deeply concerned about Europe’s competitiveness and want on the table our views about how to foster innovation. The EU faces enormous internal and external pressure. In Europe, energy prices, inflation, raw material shortage, and an overburdening regulation lead to an increasing fear of deindustrialisation.”

Growing Europe’s investment

Signe Ratso, Deputy Director-General of the Directorate-General for Research and Innovation (DG RTD) at the European Commission, also addressed the audience ahead of the debate.

“Our innovation today is our competitiveness of tomorrow. And our competitiveness tomorrow is competitive sustainability,” she highlighted.

“We know that Europe has a proud history of innovation. It also remains a scientific powerhouse. But we still underinvest in research and innovation.”

Ratso added that this underinvestment has been recognised by the EU’s political leadership, highlighting that the European Council has reconfirmed a common target to increase spending on research and innovation to three percent of GDP and that European Commission President Ursula von der Leyen has called to go beyond that.

“Another main challenge that we have for innovation is that it continues to hamper Europe’s performance in the persistent innovation divide between and within member states, which impedes the balance and inclusive recovery and the continuation of economic and social convergence in Europe,” she said.

Europe has ‘lost a lot of ground’

As the panel debate got underway, there was a sobering perspective from Ann Mettler, Vice President, Europe, of Breakthrough Energy, which is working with European partners to accelerate clean tech innovation in the pursuit of climate neutrality and net-zero emissions.

“Europe has lost a lot of ground when it comes to innovation, when it comes to technology. It’s a fact,” she said.

“We need to try to catch up in what is by all accounts a very difficult and volatile security situation, we have a war on our doorstep and we have among the world’s highest energy prices.”

Europe is the ‘world’s incubator’

Mettler cited a study from an Australian think-tank that looked at 44 advanced technologies in the pipeline. It concluded that China is leading in 37 of them and the United States in the rest.

“While we can sit here and we can say we have great research institutes and we are actually quite good, that’s not wrong, but it’s also not enough,” she said.

“All that’s done, it’s turned us, in many ways, into the world’s incubator. So, the research comes out of here, the inventions come out of Europe, but the innovations are commercialised elsewhere and that has to stop.”

‘Light touch regulation’

On possible solutions, Eva Maydell, MEP and Member of the ITRE Parliamentary Committee, commented: “I very much believe that we need to be producing legislation that very much allows businesses to scale, that makes it easier for businesses to access finance. But also, we need to be putting our efforts into making sure we have world-class infrastructure and know how regulatory requirements impact businesses.

“As an MEP, I very much believe in the so-called ‘light touch’ regulation and laws that work, rather than creating paperwork and obstructing businesses sometimes without a particularly clear case for why we are doing this.”

On regulation, Prof. Dr. Ignacio Cirac, Director, Max Planck Institute of Quantum Optics said: “We have to re-think regulation and make things more attractive for companies.”

He explained: “You want to do something now that is related more to innovation or to bring it to the market, it goes very slow. Once it’s approved, it’s full of permissions and regulations. You have to use your money to hire people who will do all the regulations, who will go through that and this is not competitive. This has to be changed. We have to have fast tests, go quick to the market and promote that.”

Cirac also suggested innovation centres as a way forward, where research and innovation come together, bringing technologies from the lab to the market.

A new regulatory approach?

Dr. Martin Brudermüller added: “I think we manage innovation like we do an investment project in an office building. You want to be sure it’s on budget, you want to be sure that you don’t have any surprises, you want to make sure you have the building codes and the rules, that’s fine. But it’s not the way to manage innovation. This is where I think our mental (mind) set is wrong.”

“We completely narrow down entrepreneurship and we also narrow down what innovation actually needs, which is air to breathe. We need a modern, new innovative regulation.”

Who pays for innovation?

On funding and building innovation success in Europe, Dr. Lars Frolund, Deep Tech Lecturer, MIT (Massachusetts Institute of Technology) and Board Member of the European Innovation Council, said: “I don’t think we can solve this with the taxpayers’ money. I think we need to do this from a position of strength and we need to use that position of strength which is also connected to pension funds and high-net-worth individuals that we have.

“I think we need different people around the table. If we do so then, we are not doing innovation theatre, maybe we are then actually doing something that would matter.”

Transatlantic cooperation

On the question of increased collaboration to boost innovation, Ann Mettler suggested closer working between Europe and the US.

“Why don’t we create a transatlantic marketplace for clean technologies. That doesn’t mean we need a free trade agreement. Just try to compare notes. How can we not duplicate regulations, how can we have joint definitions on what is green hydrogen or so. I would foster a greater transatlantic cooperation,” she explained.

The EU’s response

Signe Ratso, from the European Commission, responded: “With the US, it is actually happening, I’m hopeful, in the Trade and Technology Council. The collaboration on clean technologies is underway.

“Now, we’ll have, hopefully, Canada and if we also have Japan, South Korea as part of our programme, then we can also collaborate already at the time of the research, of developing the technologies, then at the time of the collaboration between the private, public in the partnerships, and also in bringing those into the market.

“And on the clean tech side, we also have the Mission Innovation for Industry Decarbonisation, also a big international collaboration.”

The EU says innovation, particularly deep-tech innovation (solutions for society’s biggest challenges), is at the heart of its response to bring down greenhouse gas emissions, to make Europe’s economies more digital and to guarantee the future security of food, energy and raw materials.

It points to the New European Innovation Agenda, adopted last year, as positioning Europe at the forefront of developing new technologies and bringing them to the market.

The strategy aims to boost access to finance for start-ups and scale-ups; to create conditions for innovators to experiment; and to drive-up recruitment and retention, through training one million deep-tech talents and hiking support for female innovators.

The EU has also been working to strengthen the research and development and innovation landscape through other projects like the European Research Area, which aims to create a single, borderless market for research, innovation and technology across the bloc.

Also, Horizon Europe, a €95.5 billion research and innovation funding programme, running from 2021 to 2027.

‘It’s time to reinvent’

MEP Eva Maydell concluded that Brussels had become “a very comfortable place” with the way that it does things.

On innovation, she said: “It’s time to reinvent the way we are doing things and it might sound too disruptive, even though I don’t think it is. We have to legislate differently. I think Brussels needs to lead into this vision for the next 10, 15 years and perhaps some say the Green Deal is the way we lead. But we don’t create the means.

“Brussels and the European institutions could try to make sure that member states subscribe to a bigger vision and are given the means, which is not always money, it’s more about political backing, to achieve those aims.”

Meet our panel:

Eva Maydell, MEP and Member of the ITRE Parliamentary Committee

MEP Eva Maydell (Group of the European People’s Party) is a Member of the European Parliament’s Committee on Industry, Research and Energy. Her policy priorities feature innovation and the use of new technologies as well as supporting entrepreneurs and sustainable investments in Europe. Maydell is the lead rapporteur in the Industry Committee on the AI Act, the first-ever general law on Artificial Intelligence as well as the EPP Group rapporteur on the NIS 2 Directive on cybersecurity. In addition, Maydell is a Board Member for World Economic Forum’s Digital Europe program and a member of the WEF Global Future Council of Europe.

Signe Ratso, Deputy Director-General of the Directorate-General for Research and Innovation (DG RTD), European Commission

Signe Ratso is the Deputy Director-General of the Directorate General for Research and Innovation (DG RTD) of the European Commission, a role she has held since March 2018. She is the Chief negotiator for Horizon Europe Association. She is also responsible for Open Innovation and for citizens’ engagement in research and innovation policy and for overall coordination on international cooperation. Before joining DG RTD she worked in different senior management positions in DG TRADE since 2006. Before joining the Commission Signe Ratso worked as Deputy Secretary General (from 1994 to 2005) at the Ministry of Economic Affairs and Communications of the Republic of Estonia. In this position, she was responsible for all EU-related issues in the following policy areas: trade and industrial policy, energy, transport, telecommunications, information society, and internal market affairs. During Estonia's accession negotiations, she was responsible for negotiating 6 economic chapters. She has two University degrees from Tartu University in Estonia.

Dr. Martin Brudermüller, CEO, BASF

Dr. Brudermüller is Chairman of the Board of Executive Directors of BASF SE, a role he has held since 2018. In 2019, he became Chair of ERT’s Committee on Competitiveness & Innovation. In addition, Brudermüller is currently the President of the European Chemical Industry Council (CEFIC) and the International Council of Chemical Associations (ICCA). In 2021, he was also appointed to the Supervisory Board of Mercedes-Benz Group AG and is a Member of the Presidium of the German Business Association BDI and the Alliance to End Plastic Waste (AEPW).

Ann Mettler, Vice President, Europe, Breakthrough Energy

At Breakthrough Energy, Ann is working with European partners to accelerate clean tech innovation in the pursuit of climate neutrality and net-zero emissions. Previously, she served as Director-General at the European Commission where she ran the internal strategy department, reporting directly to the President. In this capacity, Ann also served as Chair of the European Strategy and Policy Analysis System (ESPAS). An entrepreneur at heart, Ann set up her own think tank which she ran for more than a decade. Her career started at the World Economic Forum where she led the Europe department.

Prof. Dr. Ignacio Cirac, Director, Max Planck Institute of Quantum Optics

Ignacio Cirac is a Spanish physicist, Director of the Max Planck Institute of Quantum Optics in Germany and a Board Member of Telefonica S.A. He is an expert in quantum computing and communication. Cirac is the Director of the International Max-Planck Research School on Quantum Science and Technology, co-speaker of the Munich Center for Quantum Science and Technology, and coordinates the consortium on theoretical quantum computing in the Munich Quantum Valley.

Dr. Lars Frolund, Deep Tech Lecturer, MIT (Massachusetts Institute of Technology) and Board Member, European Innovation Council

Dr. Lars Frolund is a Deep Tech Investment expert and executive. His expertise lies at the intersection of mission-driven innovation (including defence and security), grant & venture capital investments into deep tech ventures, and the geopolitical/strategic aspects of technological capacity building in innovation ecosystems at national and international levels. Frolund is currently a Lecturer at the Massachusetts Institute of Technology (MIT). He also serves on the Board of Directors of the European Innovation Council, the EIC Fund Board and the Danish Innovation Fund.

Méabh Mc Mahon, Euronews, Moderator

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