1. Boosting Research and Innovation In Europe Bruno VAN POTTELSBERGHE Solvay Brussels School of Economics and Management Université Libre de Bruxelles Senior Fellow @ Bruegel Collective work with M. Dewatripont (ULB, SBS-EM) A. Sapir (ULB, Bruegel), and R. Veugelers (KUL, Bruegel)

4. Broad proposal In line with EU2020 Strategy and Innovation Union Three essential principles –Primacy to excellence and merit-based competition –Importance of single market for research and innovation –Removal of intra-EU barriers to dynamic restructuring

5. Broad proposal Three interrelated areas –Basic research and the role of universities –The creation and development of young, highly innovative companies in new sectors –A patent system for supporting growth of innovative firms. Diagnosis and remedies....

6. Basic Research and Universities: Diagnosing EUs funding gap on higher education EU institutions suffering from poor governance: insufficiently autonomous and poor incentives As compared to the US, EU universities fail to: Attract the best of foreign talents Excel in top publications Be the breeding ground for commercial ventures that turn into world market successes Develop worldwide research and innovation links;

7. Basic Research and Universities: Remedying A policy mix combining funding, autonomy and competition EU encouraging and monitoring Member States efforts to raise university funding (eg by 1% of GDP) Enhancing EU-wide merit based competition –Increasing funding for ERC, EIT –New merit-based competition for doctoral school funding Enhancing EU wide researchers mobility –EU research visa and portability of social security benefits

8. Young Highly Innovative Companies: Diagnosing EU deficient business R&D is mostly a structural problem: –The EU has less young companies making it to world leading innovators –The EU has less leading innovators in the new innovation growth sectors (biotech, software, internet, …) These sectors are linked to cutting edge scientific research

9. Young Highly Innovative Companies: Remedying Redressing the barriers faced by young innovative firms in new markets, –An EU Framework Program for Highly Innovative Projects Public funding of pre-commercialisation phase; No requirement for EU wide consortia Program organized through an independent agency (equivalent to ERC), minimizing administrative burden Selection through EU based competition with highest standards of excellence Mix of expertise in selection (scientific, technical but esp commercial) with selection a signal of quality (certification) able to leverage complementary public and private funding

10. Enabling growth by designing an EU patent: Diagnosing Europes current patent system is –prohibitively expensive (translation costs, multiple validation and renewal fees)

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12. Enabling growth by designing an EU patent: Diagnosing Europes current patent system is –prohibitively expensive (translation costs, multiple validation and renewal fees) –complex and intransparent because of parallel litigation –fragmented with parellel national and EPO patents Europe is thus taxing innovation Young TBSF, and academic spin-off need efficient IP

13. Moving beyond the Dec 4 2009 EU patent proposal –A single EU wide patent; No three-layer system (national, European, EU-wide): drop current European patent and NPO should stop independent grant –English-only translation for granted patents, May-Be with two other languages for claims –A grace period of 6 months for scientific and technical publications (cf US & Japan) –A 50% reduction in entry fees for small, young companies (cf US & Japan) Enabling growth by designing an EU patent: Remedying

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