Regions for economic change. Innovating through EU regional policy

The EU invests less in research and innovation than its main competitors. According to the latest official data, the EU’s overall research eff ort represents 1.96 % of GDP, as against 2.59 % for the United States, 3.12 % for Japan and 2.91 % for Korea. If Europe does not become more innovative, it cannot hope to attain its objective of becoming the most dynamic and competitive world economy. Research and innovation pay off in terms of economic and productivity growth and job creation. Innovative industries hire more highly skilled people and pay them more. Between 1997 and 2002, the employment growth rate was 11.9 % for high technology sectors and 16.2 % for knowledgeintensive services, compared to 8.1 % for total employment.

Efficient growth and innovation strategies must be supplemented by tailored local and regional strategies, designed by local and regional authorities and involving all the relevant participants in social and economic development. Only in this way can the full ownership of the Union’s growth and jobs strategy be achieved. Innovative small and medium-sized enterprises, access to capital for innovation, the importance of clusters and proximity, local innovation centres and start-up schemes — these drivers of endogenous growth can be addressed most efficiently at the regional level while taking into account the European dimension.

Disparities between EU regions with regard to research investment and innovation are signifi cant. Two thirds of research expenditure takes place in just three Member States — Germany, France and the United Kingdom - and most Member States spend the major part of their research budget in their capital region. The top nine research expenditure regions alone spent EUR 51 billion or 25 % of the total EU expenditure in 2002, and only 21 of 254 regions reach the 3 % target for research and development expenditure in relation to GDP which is one major objective of the Union’s growth and jobs strategy.

EU regional policy addressed these disparities in the past and it will continue to do so in the future to an even higher degree. Between 2000 and 2006, the Structural Funds are spending about EUR 10.5 billion on research infrastructure, projects, innovation transfer and training of researchers. This investment is carried out in Europe’s less favoured regions or those undergoing structural and economic change. In the period 2007–13, EU regional policy and the Structural Funds aim to increase and improve investment in research and innovation and to enhance synergies with other EU policies and instruments. In this respect, priority for funding will be given to strengthening cooperation among businesses and public research by supporting the creation of regional and
transregional clusters, in particular favouring small and medium-sized enterprises, and by supporting capacity building in research, including information and communication technologies, research infrastructure and human capital.

This brochure outlines some of the challenges which Europe, its regions and EU regional policy face for the next generation of Structural Funds programmes. In addition, a number of best practices and projects from the current period have been selected to show how regional policy delivers innovation in practice.

European Commission: DG Regional Policy: Conference: Regions for economic change: Innovating through EU Regional Policy, Brussels, 12–13 June 2006 http://ec.europa.eu/regional_policy/conferences/innovating_june06/home_en.cfm

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