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The Impact of Horizon 2020 on Innovation in Europe

The EU’s stagnation on many innovation indicators led to a number of efforts to spur a turnaround. One of most visible projects has been the Horizon 2020 strategy, which devotes unprecedented levels of funding to the promotion of R&D and innovation. But does this strategy address the right issues to promote innovation? Is Horizon 2020 right to ignore geographical considerations when allocating funding? What policy instruments does Horizon 2020 recommend, and has it led to novel strategies being employed, beyond the increase in R&D funding? What steps are individual countries taking? Most importantly, what impact is Horizon 2020 actually having on innovation in the EU?

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Water Services

Cost Recovery for Water Services in the EU

The EU Water Framework Directive stipulates the principle of cost recovery, including environmental and resource costs, for European water services. Yet a definition of member states’ precise obligations is highly controversial. The European Court of Justice has now decided on the Commission’s infringement proceedings against Germany regarding the scope of the term “water services”, dismissing the Commission’s action as unfounded but leaving the door open for further claims. However, many legal arguments in favour of a strict interpretation of cost recovery are not only misleading but also pass up valuable opportunities to deal with scarce water resources in an efficient way.

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Figure of the Month

2014 Innovation Indicator Results

This figure from Rainer Frietsch, Christian Rammer and Torben Schubert’s Forum article Heterogeneity of Innovation Systems in Europe and Horizon 2020 shows that that innovation capabilities differ fundamentally among member states. Click on the figure for further information.

Balanced Budget Fiscal Stimulus

The Stability and Growth Pact, and Balanced Budget Fiscal Stimulus

The Stability and Growth Pact has imposed limitations on Italy’s economic recovery and its debt reduction. By evaluating Germany’s fiscal policy since 1997, Konstantinos Karagounis, Dimitrios Syrrakos and John Simister offer recommendations for the Italian authorities. Measures put forward by European Union institutions are hampering Italy’s economic recovery, and evidence indicates that fiscal consolidation is ineffective in reducing the debt-to-GDP ratio. A balanced budget fiscal injection seems the only way for Italy to escape from its economic slump without further violations of the SGP. The paper concludes that the Pact either needs to be reformed or replaced by a central fiscal authority.

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Quote of the Month

Barriers to Innovation

"The innovation deficit in Europe is systemic. Access to finance cannot be tackled in isolation but should be embedded in an innovation environment that also addresses the other barriers to innovation."

- from Reinhilde Veugelers and Michele Cincera's Forum article How to Turn on the Innovation Growth Machine in Europe

Letter from America

Bringing Inequality Back In

The last half-century in the US has been marked by a sustained rise in inequality of both incomes and wealth, as those at the top have pulled away from everyone else. Heather Boushey (Washington Center for Equitable Growth) details how inequality – long considered by economists to be a growth-enhancing characteristic of developed economies – actually drags down overall economic growth and reduces economic stability. She also puts forward several policy proposals that could halt this worrying trend.

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Editor's Choice

The Impact of the Euro Crisis on Switzerland

The euro area crisis was the main external threat the Swiss economy. In 2010 and 2011, the Swiss franc rapidly appreciated against the euro, causing a drop in exports, losses for the tourism business and a rise in unemployment. Karl Heinz Hausner and Silvia Simon explain the reasons for the strength of the franc, the effects it had on the Swiss economy and the measures taken to curtail its appreciation. In light of the Swiss National Bank's recent decision to abandon its peg to the euro, this article from our March/April 2012 issue is particularly relevant.

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Editorial

The End of Austerity?

The first month of 2015 ended with two big-bang events for European policymaking: in Athens, the Greek electorate brought to power a radical-left party which built its electoral campaign on an anti-austerity, anti-memorandum platform; in Frankfurt, the ECB took the long-awaited but stubbornly challenged decision to launch a large programme of quantitative easing to instil liquidity and reignite inflation in the sluggish eurozone economy. Is it the end of austerity? Vassilis Monastiriotis (LSE) discusses some concerns that the new Greek government will have to address, or overcome, if it is to be successful in steering the Greek economy out of the Clashing Rocks of potential default (and a “Grexit”) and austerity-induced recession.

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Volume 50 · 2015 · issue 1

Current Issue

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Most popular articles

  1. Austerity Measures in Crisis Countries – Results and Impact on Mid-term Development

    Vassilis Monastiriotis, Niamh Hardiman, Aidan Regan, Chiara Goretti, Lucio Landi, J. Ignacio Conde-Ruiz, Carmen Marín, Ricardo Cabral

  2. Is the Global Economy on the Brink of Recession?

    Vanessa Rossi, Carmen M. Reinhart, Vincent Reinhart, Klaus Abberger, Dean Baker, Justin Yifu Lin

  3. European Parliament Elections in Times of Crisis

    Francis Jacobs, Yves Bertoncini, Valentin Kreilinger, Stijn van Kessel, Andrea L.P. Pirro, Simon Otjes, Sonia Piedrafita, Vilde Renman

  4. Trade in Healthcare and Health Insurance Services: WTO/GATS as a Supporting Actor (?)

    Rudolf Adlung

  5. Challenges Facing European Monetary Union

    D. Gros, T. Mayer, U. Häde, J. Pisani-Ferry, A. Sapir, J. Matthes, D. Mabbett, W. Schelkle, W. Kösters, P. Grauwe, D. Lachman



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