Fraunhofer Institute for Systems and Innovation Research ISI
Fraunhofer Institute for Systems and Innovation Research ISI

Project

EU positioning: An analysis of the international positioning of the EU using revealed comparative advantages and the control of key technologies (KETs Control)

This study analyses the international positioning of the EU in 2020 with respect to research and innovation in all thematic areas of Horizon 2020. The present position of the EU in the SGCs of transport, climate, and energy and in the related KETs advanced manufacturing technologies, Internet of Things is favourable. The most important trend among KETs is the increasing merging of ICT with other KETs and the rising diffusion of ICT in almost all economic sectors. In SGCs overarching trends comprise an increasing interlinkage between SGCs, a stronger consideration of user needs, a growing demand for individualised solutions, arising impact of societal and environmental issues and a clear need for sustainable solutions in all sectors. The European position in 2020 is challenged by new technology-oriented players such as China and the prominent role of the US in the route towards digitalisation. Scientific, technological and competitive strengths will become globally dispersed in a multi-polar world. This increasing global dispersion requires that Europe specialises in core strengths in order to remain competitive. We recommend strengthening ongoing foresight processes, fostering global precompetitive collaboration, and to complement the current excellence focussed funding approach with policies that are able to exploit regional strengths.

In view of the year 2020 the overall framework conditions for research and innovation are changing. The international positioning of the EU in terms of trade and influence are challenged by the sustained competition with the USA and the rise of China and other countries as global economic players. Processes of digitalisation in the world economies are accelerating, thereby enhancing globalisation of research and innovation. Disruptive innovation addressing societal grand challenges (SGCs) and global markets may likely emerge.

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The purpose of this study is to provide an assessment of the international positioning of the EU in the year 2020 with respect to research and innovation in each of the thematic areas funded in Horizon 2020. This includes an elaboration of strengths and weaknesses of the EU, an analysis of the comparative advantage of the EU today, an identification of the key enabling technologies for the 21st century, an identification of centres of excellence in the areas of Horizon 2020, an assessment of the EU's competitive position in 2020, and an assessment of possible impact of major EU initiatives for research and innovation.

The approach of the study comprises three levels of analysis: the current situation with respect to the European competitive position in the thematic areas of Horizon 2020, trend analyses towards 2020, and a critical debate and recommendations. We use a combination of qualitative and quantitative methods. The diagnosis of the current competitive position of Europe is based on a literature review and more than 30 expert interviews which also revealed foresight variables, possible game changers and centres of excellence. The quantitative assessment firstly provides an overview of the comparative advantage of Europe in 2015. This is based on the analysis of scientific publications, patent analyses, analysis of BERD, value added and import and export. In the trend analyses scenarios for the position and comparative advantage of Europe in the year 2020 were elaborated.

The present position of the EU in the SGCs of transport, climate and energy is very favourable. These SGCs are strongly correlated to the KETs advanced manufacturing technologies, Internet of Things, space, biotechnology and nanotechnology. Europe presents a good positioning in the first three of these KETs, while in the latter two the European position is not as strong. Since also other KETs contribute to SGCs, we conclude that public research activities in all KETs fields are important for achieving advances in dealing with SGCs.

The most important trend from the KETs perspective is the increasing merging of ICT with other KETs and the rising diffusion of ICT in almost all economic sectors. This will lead to an acceleration of innovation dynamics in most sectors. Concurrently, the trend towards diffusion of ICT to many sectors will also enable new e-services, offering additional opportunities for user-oriented business models. Managing risks of cyber attacks and insuring safe and secure data handling are key requirements for this trend. In SGC areas the most important overarching trends comprise an increasing interlinkage between different SGCs, a stronger consideration of user needs and expectations, a growing demand for individualised and customised solutions, arising impact of societal and environmental issues and a clear need for implementing sustainable solutions in all sectors. European diversity in terms of market characteristics, consumer preferences or environmental conditions is considered as an asset for dealing with these trends and challenges since it offers opportunities to explore and test innovative approaches in variable environments. Accordingly, Europe is well positioned for mastering these new modes of innovation.

Looking at the European position in 2020, a forecast of specialisation indicators based on trend extrapolations indicates improvements of the input (R&D) and throughput (publications, patents) variables for Europe. However, this does not translate into an enhancement of output values such as exports or Revealed Comparative Advantage. Although considering the time lag between input in terms of R&D investment and research activities and output as indicated by improved economic performance, the forecast illustrates that Europe most likely will not succeed in improving its competitive position in a sustained manner if business as usual will continue. Considering recent activities in China and other competing regions aiming at boosting their competitive positions in KETs and SGCs, reinforces this observation.

Currently, Europe benefits from an overall good position in many of the KETs and SGCs. Our scenario analysis indicates that the increasing competition from South-East Asia will most likely imply a decline of Europe's relative position in KETs and SGCs because scientific, technological and competitive strengths will become globally dispersed in a multi-polar world. This increasing global dispersion requires that Europe specialises in core strengths in order to remain competitive because it will be impossible for Europe to be excellent in all areas.

Publications

Duration

12/2015-7/2016

Client

  • European Commission, DG Research & Innovation 

Partner

    IDEA Consult