Imagine that you could decide how to invest €10 billion in research projects. Now imagine that you have to make this decision not once, but every year for the next decade. This is effectively what the EU needs to do in preparation for its next programme of funding for research and innovation, known as “Horizon Europe”, which will cover €100 billion of investments from 2021 until 2027.
What could seem like a dream job for those who simply want to find and support some of the world’s best research is actually a daunting game of political negotiation. EU politicians disagree on whether to solely promote excellence or to use the funds to compensate existing imbalances in Europe’s research.
But there’s also another factor at play. As the EU research budget has grown (up from €3.8 billion for 1984-1987 to the €100 billion for 2021-27), so has the pressure for the investment to produce greater economic and social benefit. The European commissioner for research, science and innovation, Carlos Moedas, recently said that “for every €100 invested, we expect to add €850 to the European GDP by 2030”. Yet the evidence on the impact of innovation programmes is subject to extensive debate.
Horizon Europe actually represents just about 5% of the EU’s total spend on research and development when you include all national public and private investment. This means how the money is allocated will have to be spot on if the EU really expects it to have a significant effect on GDP growth and productivity. So how can we get the most from this investment?
First, you don’t just have to give money directly to researchers to improve the impact of R&D. Recent research shows that relaxing immigration rules or broadening STEM education access might have a stronger long-term effect on innovation and economic growth than direct public funding.
Second, we could change the way that publicly funded researchers work with the private sector. Most public innovation programmes focus on funding collaborative projects between firms and universities.
This assumes companies can combine their market knowledge with the advanced research of academics to accelerate innovation. It also allows companies to explore high-risk innovation without it threatening their future operations, and helps researchers better understand the problems that actually matter to the marketplace.
The problem is that research shows these types of project aren’t actually that good at bringing scientific research to market, helping innovative small businesses grow or accelerating the high-tech transformation of the economy.
The EU hopes to address this problem by focusing part of Horizon Europe on narrower, more specific outcomes. This so-called “mission-oriented” strategy will receive up to 10% (or about €5 billion) of the overall budget for global challenges and industry competitiveness.
This plan mimics some of the assumptions behind the UK’s recent industrial strategy in that it tries to align research efforts towards specific goals. A model for this is the UN Sustainable Development Goals, which include eliminating poverty, improving health and education and generating clean, affordable energy.
For this to work, we will need to see changes in the way universities and industry work together. It means that researchers will, in many cases, have to shift their current research trajectories. For example, a nanotechnology researcher might have to increase attention to how their nanostructures could contribute to healthier oceans or energy-efficient cities, in line with society’s current big challenges.
A recent study of medical research shows that it might cost over €3m for a scientist to redirect their attention in this way. The decision to enter a new research field depends on the similarity to what the researcher is already doing. The more radical the change, the bigger the threat that the switching researcher will be less competitive than those already in that application area and so won’t win the available grant.
The shift to mission-based funding will also mean that firms will have to be more open to engaging with universities. My own recent study shows that this can take more than tax subsidies or generous grants. We need to encourage firms to reconsider who they engage in their innovation efforts. For example, I found that just being invited to get to know researchers and become familiar with a university’s activities can be a first step for a company to take part in a joint research project.
While it will be important to target specific goals, a bigger change in how we think about science innovation policy could better justify spending €100 billion on research. It may just be that to trigger more unexpected and disruptive innovations, firms and universities need more support to be open to experimentation and to potential failures. In the end, why should we expect different results if we insist on doing the same things?