Watch also the recording.
-- Check against delivery --
Dear Minister Obertin, Professor Kreisel, Professor Le Traon,
Dear Björn Ottersten, Ladies and Gentlemen,
Thank you for inviting me here today to discuss the role of research and innovation for the economy and society, and special thanks to Björn for the invitation to this partnership day of an Institute that you founded some fifteen years ago.
Research and Innovation is certainly a timely subject. And particularly apt for Luxembourg, a country that has invested so much over the last two decades, to become a centre of excellence for research and innovation.
In President Emmanuel Macron’s recent speech at the Sorbonne, he declared that Europe should become “a continent that invests in breakthrough innovation and advanced fundamental research.1”
In the same week, we saw the publication of Enrico Letta’s long anticipated report to the European Council on the future of the Single Market. To the surprise of many, one of his major recommendations was to create a “fifth freedom” for research, innovation and education as an essential complement to the more traditional freedoms2 .
We are also expecting Mario Draghi’s report on EU competitiveness, which is due out in June, to emphasise the need for Europe to raise its game in terms of research and innovation.
These are all encouraging signs that the importance of research and innovation is being recognised at the highest political levels. This is timely because important decisions on the EU’s next long-term budget need to be taken before the middle of next year.
The ERC Scientific Council has also been thinking about what the next EU research programme should look like, so I want to share with you our main messages.
I will get straight to the point. I hope to persuade you to support an ambitious EU budget for research and innovation with the European Research Council as a central component.
Established in 2007, the European Research Council (ERC) has been highly effective in supporting curiosity-driven frontier research across all fields, based only on scientific excellence. The ERC has given the EU framework programmes for R&I a new dimension that complements traditional top-down approaches, and it provides a benchmark for excellence in European science. The EU should build on this success and strengthen the ERC in the next research framework programme from 2028.
I know that some people remain sceptical about the value of funding bottom-up research. It seems easier for policy-makers and politicians to understand the value of research aimed at solving societal challenges or at developing applications. But the philosophy of the ERC rests on the idea that researchers know best the most promising research areas to explore. We do not ask our researchers to tell us what societal problem they are going to solve or what impact their research will have.
And I believe that this approach has been vindicated by the research funded by the ERC. The ERC has demonstrated the amazing creativity and talent of Europe’s best researchers when they are given the freedom to propose their best ideas. Between them, ERC grantees have won 14 Nobel Prizes, 6 Fields Medals, 11 Wolf Prizes and many other prizes.i ERC-funded researchers have advanced knowledge and contributed to many of the wider goals of the EU in terms of the green and digital transitions as well as addressing societal challenges such as improving health or addressing demographic trends.
The pandemic has given us a spectacular example of the effectiveness of investing in frontier research with the development of the mRNA vaccines. ERC-funded scientists such as Ugur Sahin and Adrian Hill were at the forefront of this pioneering work. ERC-funded researchers have made breakthroughs in other critical technologies such as quantum computing and solar cells, and stand out as innovation leaders. 40% of ERC projects have produced results subsequently cited by patents and about 400 ERC funded researchers have founded start-up companies.3
So, you can see that by funding the best researchers to work on their best ideas you also get all kinds of other impacts for “free”. And in this way, we can also get unexpected results. These can provide answers to questions that we did not even know to ask, and opportunities that we did not anticipate. The trajectory of radically new science and technology has more often followed surprising paths than it has been a result of rational planning. And we know that even when research is directed at particular goals there is no guarantee that the path chosen is the one thanks to which those goals will be met.
Many say that the ERC has been a positive factor in the European Research Area and one which was long called for.
The belief of the ERC Scientific Council is that, in view of an increasing global competition, time is running out for Europe to maintain its position in global science and technology. To keep pace, an essential step is to modernise the long-term EU budget and to double the spending for research and innovation in the next EU Multiannual Financial Framework.
This call to double the research budget is not new: the group led by Pascale Lamy already called for a doubling of research funding in 2018 during the preparations for the current Horizon Europe programme.
We do not have any time to waste. Europe has the talent to be world-leading in science and technology, but is struggling to keep up with its main competitors in research fundingiii, high-quality scientific outputiv, especially in new and emerging fields, and European industry is not specialised in the fastest growing sectors"
.
According to the OECD’s latest statistics the EU economy as a whole spent $400 billion on R&D in 2021. But at the same time China spent $620 billion and the US spent $710 billion (PPP $ constant prices).
This is bad enough but a further problem is that, if we look at corporate R&D in the EU, just over 50% is in the automotive and pharma sectors with just 15% in the ICT hardware and software sectors. Meanwhile, 33% of Chinese corporate R&D and 53% of US corporate R&D is in the ICT hardware and software sectors.4 What this means is that a single US corporation, Amazon, now spends nearly the same on R&D as the entire French economy spends on R&D (around $73 billion5 vs $77 billion6 ).
So what can we do? There seems to be a widely held view that European science is world leading and therefore the problem is only to translate this knowledge into innovation, or to direct Europe’s researchers towards addressing societal challenges.
I think that this argument is hard to sustain. If we look at the most significant scientific publications (the top 1% most-cited), the EU world share is 18% compared to 23% for China and 27% for the US7. When we break this down by scientific field, we see that the EU leads in only two of twenty of these fields. These are Historical studies and Biology. The EU is also close to China in Mathematics and statistics, and Agriculture, fisheries and forestry and to the US in Economics and business. But in all other fields either US or China has a clear lead over the EU, including in Enabling and strategic technologies, Information and communication technologies, Biomedical research and Earth and environmental sciences.
And if we look at new and emerging fields, the US and China have an even bigger lead. For example, a recent analysis8 showed the clear dominance of US institutions and companies in the top 100 most influential recent publications in the field of artificial intelligence for the years 2020, 2021 and 2022. Indeed, in 2022, Meta (Facebook) alone produced more of the most influential AI publications than the whole EU. And if we are honest this is not really new. Look at the winners of the Turing Award. Since the first award in 1966, there have been 77 winners, but only nine of them had a European affiliation.
It seems much easier to believe that Europe’s underperformance in industrial R&D and innovation is linked to its underperformance in new and emerging scientific fields. Europe cannot hope to be a leader in industry or innovation without being a leader in science and technology.
I think it is vital for everyone to understand this point: Whatever your goal is - to manage the green or digital transitions, to promote innovation or to strengthen industrial competitiveness - public investment in scientific research is an essential feature of any effective innovation system. Public research plays a key role in innovation systems by providing new knowledge and pushing the knowledge frontier. Universities and public research institutions often undertake longer-term, higher-risk research and complement the activities of the private sector. We will not meet any of our goals if we neglect this foundation.
For example, in recent years nobody, not even the researchers working on them, foresaw the capabilities of the latest Large Language Models. And even though it is private sector companies that are taking the lead in this field at the moment, the basic research and techniques that they are using all came out of basic research in the public sector.
That's why Europe needs to up its game in both research and innovation. They are intimately linked and have always been so.
Otherwise, if we do not act now and current trends continue, they will increasingly undermine Europe’s economy, competitiveness and social model and will ultimately threaten our standing in the world, our strategic autonomy and our security.
Reversing these trends will require huge efforts at the EU and national levels. And I do not pretend that it will be easy. We need to reform and restructure our higher education and research systems to make them fit for the rest of the 21st Century. This is a central element in the necessary reform of our economies.
However, one essential prerequisite is to modernise the long-term EU budget (Multiannual Financial Framework) with a doubling of the budget for research and innovation in the next EU research framework programme (FP10). This will yield high returns due to the increased collaboration, scale, and pan-European competition made possible at EU level. This investment is crucial for Europe to regain its competitive edge in global science and technology. We have to get much closer to the spending of our rivals and we have to maximise the returns we get from every euro spent.
If Europe wants to aspire to a position of leadership in new and emerging areas of science, we also have to allow our best researchers the freedom to use their own creativity. The ERC has funded over 13,000 projects but did not have the means to fund many equally outstanding proposals due to a continuing lack of appropriate budget.
We could afford to spend much more on research and innovation, and invest in what has proven to work. As President Macron also said last week, “Horizon Europe must be reinforced by focusing on the most effective programmes such as the European Research Council.”
But what about countries or regions that do not receive significant funding from the framework programmes or many ERC grants? What about the R&I divide? Where is the value of expanding the framework programme for them? Well, to me the answer is clear.
If you look at many of the so called “widening countries” we do not see countries mired in stagnation. Far from it. What we see are some of the fastest growing economies in the EU, and indeed the world. For example, Romania's economic growth has been one of the highest in the EU since 2010, with 2022 seeing a better-than-expected 4.8% increase. In 2020, its GDP per capita in purchasing power standards reached 72% of the EU average, up from 44% in 2007. Poland has been growing steadily on average at 6% per year for over thirty years with the sole exception of the pandemic year of 2020. This has seen the country's gross domestic product (GDP) grow nearly eightfold. And these are not the only two success stories.
The point is that economies on the technological frontier need new knowledge in order to grow further. But countries that are not there yet can enjoy catch-up growth. In both situations, it is possible to reap the benefits of the research and innovation carried out in other countries, especially if countries are linked in a single market. So, we should celebrate our neighbours’ research and innovation: it is the condition for our future growth.
Another point is that the independence of the Scientific Council of the ERC has been critical to the ERC's success. This entails the ability to determine how the ERC runs its calls and how its grants can be managed according to the needs of frontier research.
The most important issue is to maintain the high quality of the ERC’s selection process. This is the core of the ERC’s excellence, something that cannot be taken for granted. Every year, the ERC needs to persuade many high-level scientists from around the world to serve on its evaluation panels. These people are very much in demand and the ERC needs over 1,000 of them every year just for the panels, with another 6,000 remote reviewers providing specialised reviews of individual proposals.
The ERC’s simple and tailored procedures provide the flexibility that is necessary to respond to the needs of Europe’s scientific community. They should not be hampered by standardised processes and systems across the research framework programme and other EU funding programmes. Europe’s researchers deserve to be supported in a way that allows original talent to thrive.
In conclusion, if we in Europe want to lead and have the autonomy to choose our own path, then we need to be the first to discover and understand the latest knowledge. We cannot lead by developing ideas first discovered elsewhere. We cannot be sovereign if we rely on technologies developed by others.
This is why it is vital that EU funding provides support for research and innovation in a balanced way. Focusing too much on short-term results will put the future seeds of innovation at risk and our brightest researchers will not be content to be imitators instead of inventors. Many may decide to leave the EU.
This is why EU research funding cannot be diverted to pay for current initiatives in other areas. This only reduces our potential for solving problems in the future.
We need to think very hard about making sure we have the right balance between funding short-term economic development and long-term economic growth.
Europe has the talent to be world-leading in science and technology. The research community in Europe stands ready and able to make a huge contribution to achieving Europe's ambitions and addressing Europe’s challenges. What we are asking for are the means and the mechanisms to reach those goals.
1 EU should spend more on Horizon Europe, Macron says | Science|Business (sciencebusiness.net) 2 Enrico Letta's Report on the Future of the Single Market - European Commission (europa.eu) 3 Science, Technology and Innovation Outlook 2023 - OECD 4 Horizon Europe strategic plan 2025-2027 analysis - Publications Office of the EU (europa.eu) 5 Visualizing R&D Investment by the 10 Biggest Nasdaq Companies (visualcapitalist.com) 6 Main Science and Technology Indicators (oecd.org) 7 Horizon Europe strategic plan 2025-2027 analysis - Publications Office of the EU (europa.eu) 8 Must read: the 100 most cited AI papers in 2022 (zeta-alpha.com)