The hidden side of the European paradox

A widely held belief states that Europe has failed to benefit commercially from its substantial investments in research performed by public universities and government research institutes. This is the so-called European Paradox. The United States seems to do much better, with public research institutes linked to the creation of several globally competitive firms and block buster products. By contrast, the perception is that European academics are less entrepreneurial than their American counterparts, resulting in less formal technology transfer from public European universities to private firms.

Until recently, a lack of comparable data actually prevented an assessment of the current situation in Europe. However, according to a recent study by Anthony Arundel and Catalina Bordoy, researchers at UNU-MERIT in the Netherlands – a research and training centre of United Nations University – Europe actually does much better than it gets credit for, at least as far as formal technology transfer goes.

The UNU-MERIT survey shows that Europe performs better than the United States on two of the three indicators for the current commercial use of public research (licenses executed and start-ups) and ranks a close second on the third indicator (patent revenue as a share of research expenditure). In 2004, European public research institutes filed 20% more patents, established 40 % more start-ups and earned a mere 10 % less from R&D patents than their American counterparts per million dollars of public research expenditures.

Even if problems of comparability between the US and European data persist, it seems apparent that a large part of Europe’s successes in generating patent revenue is due to the impressive performance of government research institutes. Furthermore, ‘none of these indicators measure successful commercialisation of the results of public research,’ say UNU-MERIT’s researchers. ‘A start-up can fail, a licence may not lead to anything of value and even patent revenue can be earned without the firm bringing an invention to the market or making a profit from it.’ Nevertheless, the results speak for themselves and show that European academics might be far more entrepreneurial than is commonly believed.

Open science

Arundel and Bordoy stress that firms can profit from research not only through formal relation - ships with research institutes (contract research and patent transfer), but also through ‘open science’ by reading journal articles, attending academic conferences and direct contact with researchers.

By focusing too narrowly on formal indicators for technology transfer, policy makers risk overlooking this looser form of knowledge transfer, which would be a mistake. If, upon further review, these formal indicators are indeed valid, the European Paradox is probably then the result of poor performance in the system of open science. As open science does not leave a clear trail of data, such as patents and the establishment of new firms to exploit a new technology, indicators should be deve loped to measure the impact of open science on the commercialisation of public research.

Wangu Mwangi Unu-Merit, Maastricht (NL) mwangi@merit.unu.edu