Policy brief

Undercutting the future? European research spending in times of fiscal consolidation

Are R&D budgets being smartly used to address growth? How is the crisis affecting public Research & Development budgets across the EU?

Publishing date
09 June 2014

The crisis seems to have widened the gap between EU countries in public R&I expenditure. Even though the EU budget serves as mechanism to somewhat ease the growing public R&I divide in Europe - EU funds are relatively more significant for innovation-lagging countries with low national R&I budgets - it is crucial to assess whether the effectiveness of these R&I programmes.

Understanding the degree to which public R&I budgets in the EU have been used ‘smartly’ during the crisis and whether the EU has made ‘smart’ recommendations on public R&I in the European Semester requires an assessment of the long-term impact on growth.

Smart consolidation featuring R&I investment needs to take a long-term perspective and to have sound evaluation frameworks in place to assess whether the potential for high growth returns from public R&I are indeed being realised. Evaluating the effectiveness of public R&I budgets should go beyond assessing short-term additionality impacts. Smart fiscal consolidation by EU member states should include assessments of the longer-term social rates of return.

About the authors

  • Reinhilde Veugelers

    Prof Dr. Reinhilde Veugelers is a full professor at KULeuven (BE) at the Department of Management, Strategy and Innovation.  She is a Senior Fellow at Bruegel since 2009.  She is also a CEPR Research Fellow, a member of the Royal Flemish Academy of Belgium for Sciences and of the Academia Europeana. From 2004-2008, she was on academic leave, as advisor at the European Commission (BEPA Bureau of European Policy Analysis).  She served on the ERC Scientific Council from 2012-2018 and on the RISE Expert Group advising the commissioner for Research.  She is a member of VARIO, the expert group advising the Flemish minister for Innovation.    She is currently a member of the Board of Reviewing Editors of the journal Science and a co-PI on the Science of Science Funding Initiative at NBER.

    With her research concentrated in the fields of industrial organisation, international economics and strategy, innovation and science, she has authored numerous well cited publications in leading international journals.  Specific recent topics include novelty in technology development,  international technology transfers through MNEs, global innovation value chains, young innovative companies, innovation for climate change,  industry science links and their impact on firm’s innovative productivity, evaluation of research & innovation policy,  explaining scientific productivity,  researchers’ international mobility,  novel scientific research.

    Websites:
    https://feb.kuleuven.be/reinhilde.veugelers
    https://bruegel.org/author/reinhilde-veugelers/

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Raising EU productivity through innovation

A better overview of which firms are most likely to adopt digital technologies and to innovate, and to turn these investments into productivity growth

Reinhilde Veugelers and Frederic Warzynski