A leaked draft of the 'Europe 2020' strategy ties together research, education, finance and intellectual property as part of a holistic approach likely to be reflected in the European Commission's forthcoming innovation action plan.
Several of the proposed reforms are long-standing goals but officials say there is now unprecedented political impetus to fix old problems.
The 'Innovation Union' plan, one of nine "flagship initiatives," commits Brussels to boosting investment in research and making Europe an attractive place to develop new products.
The completion of the European Research Area (ERA), improved access to capital and a review of EU funding systems are listed as priorities at EU level.
National governments will have to reform their innovation systems to boost cooperation between industry and universities, and "ensure a sufficient supply of science and engineering graduates" – something business groups have been pushing for long before the outbreak of the financial crisis.
The Commission also wants member states to adjust national funding procedures to enhance cross-border cooperation and to embrace joint programming.
Given the growing tendency to slash public spending and rein in deficits, Brussels wants governments to prioritise "knowledge expenditure," including the use of tax incentives to promote greater R&D investments.