Summary of An Innovation Deficit Behind Europe’s Overall Productivity Slowdown?

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An Innovation Deficit Behind Europe’s Overall Productivity Slowdown? summary

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Innovation is essential to the progress of an economy, but an inability to disseminate that innovation to a wider group of users who, in turn, can broaden its applications, hinders its effectiveness. According to this trenchant report from economist Reinhilde Veugelers, the rate of innovation diffusion within the European Union runs behind that of other economies. Veugelers probes systemic obstacles such as legal hurdles, inaccessible finance, and research and development that is clustered within a small group of firms, and proposes some solutions. getAbstract recommends this succinct and relevant study to entrepreneurs, executives and investors.

In this summary, you will learn

  • What national R&D statistics indicate,
  • Why Europe lags in innovation dissemination and
  • How EU policy makers can encourage greater innovation.
 

About the Author

Reinhilde Veugelers is a professor at KULeuven/MSI in Belgium and a senior fellow at Bruegel.

 

Summary

One measure of innovation – research and development costs as a percentage of GDP – shows the European Union failing to keep pace with the United States, Japan, Korea and China. Since 2002, the EU has aimed to achieve an R&D investment goal of 3% of GDP, with the private sector responsible for two-thirds of that objective. But between 2000 and 2014, EU private R&D investment remained steady at 1%, while business R&D in Korea and Japan, for example, grew to around 3%. Even China has spent proportionately more than the EU since 2008 on innovation.

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