Jean Tirole in favor of a European research policy reform

Five economists, including Jean Tirole, published a report in April 2024 calling for a revision of the European innovation policy and the allocation of funding for research and development.

In this report, the result of a collaboration between TSE, the Ifo Institute, and the Institute for European Policymaking at Bocconi University, the authors believe that the EU is losing the global race for innovation.

Indeed, European industry invests less in R&D than its counterparts. For over 20 years, the same companies, primarily from the automotive sector, have dominated innovation activity in Europe. They refer to this phenomenon as the middle technology trap.

They mainly propose an ARPA-style governance model and a budget-neutral reallocation of resources to support high-risk, high-reward projects. Project selection and management should be improved by enhancing the scientific and technical excellence of the EIC Board and by delegating more to scientists. As for the current venture capital activities, if they are maintained, they should be outsourced to a specialized fund.

Click on the image below to read the lastest version of the report.