Invited to address the European Parliament's industry and research committee on Tuesday (20 March), Stanford-based expert Burton Lee, who specialises in European entrepreneurship, said that Europe lacked impact assessment methodologies critical for attracting venture capital investment and forecasting the number of jobs that could be created.
Lee said that ‘pipeline’ analyses – which track the number of start-ups in a given sector from inception to failure or success – are frequently used by venture capital funds and governments to assess the viability of projects.
“The pipeline is important because if you can work out how many start-ups you will have, you can calculate how many jobs they will really create,” he told MEPs.
Existing Commission analysis estimates that 3.7 million jobs could be generated by R&D under the Innovation Union target for member states to spend 3% of their GDP each year on research by 2020.
“The job numbers associated with downstream research projects are generated from macro-economic models, and it is not clear where they are getting the data from and what they are based on,” Lee said of the Horizon 2020 job forecasts.
Lee, who acts as an evaluator for Commission-funded research projects, said that the forecast of 3.7 million jobs implies that Europe will be able to generate twice as many positions over the next 12 years as the US has managed in its booming software application businesses, in which 500,000 jobs have been created in the last four years.
“Would a proper bottom-up analysis support that figure?” Lee asked.
University reform is needed
A spokesman for the Commission said that the current forecasting models were only intended to create guideline estimates, and were conducted by independent analysts.
“I believe university reform has to be at the core of national and the European agenda. You need students and professors creating start-ups, or they won’t happen,” Lee said.
Geoghegan-Quinn told MEPs: “We urgently need to modernise out systems. We have an academia bubble which does not see itself as being involved with industry. Recruitment [to universities] should be open, transparent and merit-based. That is not the case in a significant number of our universities today.”