By Philippe Aghion (Economiste, professeur au Collège de France et à l'Institut européen d'administration des affaires (INSEAD))

First of all, on the why: the study highlights several salient facts. Firstly, private spending on research and development (R&D) is half as high in the European Union as in the United States (1.2% of GDP in the EU compared to 2.3% in the United States). But, even more striking: high-tech industries - starting with IT and software services on the one hand, and the biotech and pharmaceutical sector on the other - represent 85% of private R&D spending in the United States. In Europe, the automobile industry absorbs more than 50% of private R&D spending. It is therefore not surprising that the United States largely dominates in terms of high-tech patents (information technology, biotech and pharmaceuticals) while Europe dominates in the production of patents in more traditional fields such as transport. and mobility.

“Path Addiction”

Why this contrast between American and European areas of innovation? The authors speak of a phenomenon of “path dependence”: in Europe, we continue to do more of what we already know how to do well. For what ? No doubt partly because the American innovation ecosystem gives a preponderant place to fundamental research (universities, laboratories) and the financing of high-risk projects (via venture capital and institutional investors).

So of course, we talk about the Horizon Europe program which could change the situation. However, of its 11 billion euros annual budget, only 1.4 billion euros are allocated to the European Innovation Council (EIC), responsible for disruptive innovations. And again, if some cherish the hope that this Council could be the equivalent of the American Darpa (Defense advanced research projects agency), it is clear that we are far from it.

American flexibility

On the other side of the Atlantic, if it is the government which finances Darpa and selects program leaders, in the academic world and in the private sector, they have complete freedom to generate and finance disruptive projects to accomplish a cutting-edge mission. This is not the case with the European Innovation Council, whose bodies are subject to the supervision of the European Agency for Innovation and SMEs, whose main responsibility is to support SMEs in the Old Continent. However, it turns out that existing SMEs focus more on less cutting-edge innovations than those pushed by new entrants.

It is therefore hardly surprising that, unlike Darpa, which has truly stimulated disruptive innovations, the European Innovation Agency remains confined to incremental innovations and more traditional technological areas. However, it is by fundamentally reforming the European innovation system, rather than through a “European Buy Act”, that Europe will regain its place in international competition.