Moedas: ‘Countries that increased spending in R+D better weathered the crisis’

Carlos Moedas [European Commission]

Innovation was a top priority for the world’s most powerful nations at the G20 meeting last September, in Hangzhou. However, Europe still has some “negative trends” to address, says Commissioner Carlos Moedas.

As a champion of an open ecosystem for researchers, the European Commission’s proposal for the free flow of data is expected to play a major role in how Europe adapts to the digitalisation of the economy.

Carlos Moedas is Commissioner for Research, Science and Innovation.

Moedas answered questions from’s Jorge Valero by email.

Europe’s investment in R+D is stagnant, as the OECD alerted last February. All major players, including China, have surpassed the EU. Why is Europe falling behind?

We are progressing. In 2014, the EU’s R&D intensity was 2.03% of GDP, while in 2004 this was 1.76%. Despite this progress, however, the EU is still far from meeting its 3% R&D target.

Due to the financial and economic crisis and consequently short-term challenges (addressing weaknesses of the financial sector or obtaining sustainable levels of public debt), the policy agenda in many member states had other priorities.

Beijing pushes for innovation to boost global growth

China will host the G20 summit on 4-5 September in Hangzhou, in the midst of a joint public-private innovation effort to counter the economic crisis.

I think that the most convincing argument is that the member states that maintained or increased investment in R&D in recent years have better weathered the economic crisis. Governments across Europe need to actively support growth-enhancing investments, but they also need to introduce structural reforms to their national science and innovation systems to improve the efficiency of those investments. This is why research and innovation have gained importance in the European Semester process.

What is the state of play of innovation in Europe?

The EU has only 7% of the world’s population, but we produce one-third of the world’s knowledge. However, while Europe has been very good at turning euros into knowledge, it has not been so successful at turning knowledge into euros. So we need to get better at translating excellent research into new products, processes and services that boost growth and jobs.

The EU still has a considerable performance lead over many other countries, as attested by the European Innovation Scoreboard 2016 and is catching up with Japan and the United States.

The Scoreboard shows positive trends in human resources, and the attractiveness, openness and quality of research systems, but negative trends both in research investment and in the framework conditions for business engagement in venture capital and SME innovation.

To address those negative trends, the EC has adopted several initiatives such as the Juncker Plan. More recently, I also launched a call for the creation of a market-driven Pan-European Venture Capital Funds-of-Funds helping to increase the scale of VC funds in Europe and the industry’s footprint across all member states, as well as attract private investors.

Are we well-prepared for the challenges brought by the so-called Fourth Industrial Revolution? 

The fourth industrial revolution is driven by technology, both digital and physical.  The Horizon 2020 programme is a major contributor in each case. In these areas, we are promoting innovation hubs that allow SMEs to experiment with new technologies before investing. And with the pilot on the future European Innovation Council, we will support disruptive innovation.

Moedas: Europe's industries have to go digital

Europe has a good industrial basis, with strong traditional sectors. But EU countries are “not making the merge with the digital world,” warns Carlos Moedas, saying the transition will be “the most crucial area for getting it right or wrong for Europe”.

But R&D is just one side of the coin. The right framework conditions must accompany any financing and investment in R&D for the 4th Industrial Revolution. This means resolving new regulatory challenges and implementing legislation related to issues such as confidentiality of data, access to systems and protection against cyberattacks. The remaining regulation must remain light and easy, to make investment attractive for venture capital.

One of the most controversial issues in regards to the new digital ecosystem is how to balance an open and free flow of information with the data ownership demanded by European industry. What could be the solution?

The Internet of Things and other emerging growth sectors like cloud computing are driven by data. Data is the basis of our digital future and prosperity.  But if data does not flow freely across the EU, then the growth potential of the digital economy in Europe will be limited. Within the single market, data has to be able to move across national borders and in a single data space. This is not what Europe has today. Instead, we have a series of legal and technical barriers that constrain cross-border data flows. The vast majority of these constraints have nothing to do with protecting property, privacy or fighting security threats.

EU struggles for balance on free flow of business data

German industries have urged caution when the European Commission presents its free flow of data initiative next month, warning that excessive open data requirements risk exposing trade secrets and chilling investments in the digital economy.

What we need, in terms of data, is access rather than storage. The free flow of data will allow national security and law enforcement authorities to enhance data exchange within a secure environment. It is why we are preparing measures to improve the interoperability of member states’ information systems.

We will present at the beginning of next year an initiative to tackle unnecessary restrictions on where data is located. We will also look at legal issues surrounding data ownership and management, use and reuse of data, access to data – to prevent any of them from stifling innovation.

To make the data economy work, we need companies who invest into data production and companies who can re-use the data. If we want to maximize the value of data, we need to maximize use. Data can be re-used in multiple different ways, often without any kind of competitive impact on the original company generating the data. And this re-use does not need to be for free. Data may simply be traded against remuneration. How these considerations apply in different business sectors, at the different stages of data value chains, needs to be examined closely.

Commission backs data sharing 'by default' to spur innovation

The European Commission’s upcoming data initiative will establish open data as the paradigm “by default”, while allowing opt-outs only in restricted cases for commercial purposes, Commissioner Carlos Moedas told


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