EU Urged to Boost Innovation Funding to Compete with US
The Hague, Tuesday, 16 September 2025.
A report from the Joint Research Centre reveals that the EU’s current innovation funding is insufficient, widening the gap with the US. Increased investment in Horizon Europe is essential for sustainable growth and job creation.
The Innovation Gap: A Growing Concern
The European Union is currently facing a significant innovation gap compared to the United States, which has been attributed to insufficient funding in the Horizon Europe program. According to a report by the Joint Research Centre, the existing budget is inadequate to close the innovation gap between the EU and the US. The report highlights the need for increased investment in research and innovation to foster sustainable growth and job creation across Europe [1].
Challenges in Horizon Europe Funding
Horizon Europe, the EU’s flagship research and innovation program, is crucial for bridging this gap. However, the program’s current financial resources are deemed insufficient. The report emphasizes that the large project consortia within Horizon Europe’s second pillar are too cumbersome, often involving more than 20 partners, which dilutes the effective use of funds and creates only temporary benefits for participating companies. It suggests that support mechanisms targeted at smaller consortia or individual companies, like the European Innovation Council, demonstrate more positive long-term effects [1][2].
Strategic Calls for Increased Investment
The Joint Research Centre’s report calls for strategic changes in the allocation of funds within Horizon Europe. It recommends a focus on financing more projects under the program’s third pillar, which supports the scaling of innovative ideas and the fostering of an innovation culture, especially among startups and small to medium-sized enterprises (SMEs). This shift, according to the report, could potentially lead to a more sustainable innovation ecosystem in the EU [1][2].
Private Investment: A Key to Bridging the Gap
One of the significant differences between the EU and the US is the level of private investment in research and innovation. The US has considerably higher private sector investment, which has contributed to its lead in innovation. The Joint Research Centre report underscores the necessity for the EU to attract more private investment to complement public funding and enhance overall innovation output. This strategy is seen as vital for ensuring the EU’s competitiveness on the global stage [1][3].