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EYD roundtable 4: "Innovation"

1. The Topic

The European Union has already recognized the central role of innovation in keeping its competitive position against its main rivals. In facts, after the success of Horizon 2020, the Commission is proposing Horizon Europe, a program that will allocate almost 100 billion euros in research investment over the years 2021-2027, and will include the creation of an ad hoc entity, the European Innovation Council (EIC), in order to address matters related to innovation. Despite the great ambition shown by the Commission’s plan, it’s easy to see the huge discrepancy between Member States’ performances in innovation and therefore the need to push for a further convergence of them. As reported in the ‘2019 Innovation Scoreboard’ by the European Commission, despite the overall increase in innovation performance by 8.8% since 2011 and the surpassing of the United States, European countries are deeply divided. Countries such as Cyprus, Slovenia and Romania ranked among the last with an overall decrease in performance from 2011 to 2019, whereas Sweden and the other ‘Innovation Leaders’ further increased their lead. As highlighted by these results, convergence is a great opportunity to unleash the unexploited potential of some Member States and increase the overall competitiveness of the EU.

The complexity of modern nations makes it hard to come up with a unique tool able to fully express a country’s ability to innovate. The Global Innovation Index and the Global Creativity Index are some of the most common methods used to measure a country’s ability and potential to innovate. Factors determining the overall score can be of a technical nature, such as a country’s R&D investment and patents applications, and of a social nature, such as the level of education and tolerance towards diversity.

2. Roundtable Works: Discussion and Policy Proposals

Given the broadness of the topic, the table members were asked to concurrently develop the discussion around two of the core issues of the topic: European innovation gap and efficient resources allocation.

The first point in question regarded the current lag in innovation between European more and least developed nations and the eventual common policies to be implemented in order to achieve a higher degree of convergence. The second subject matter took into consideration the current allocation of European funds to innovation and asked whether an eventual streamlining of the budgeting was possible. Given those guidelines, and after 8 hours of online discussion, the proposed solutions included some interesting answers, which were finely tuned to better tackle innovation at the European level.

The first proposition discussed, which ended up taking most of the time given its technical nature, was the implementation of the work of the European Innovation Council, a recently established institution with the aim of funding innovative projects. The participants found the need for the creation of a second non-political agency with the specific goal of promoting cooperation among Member States in order to foster the European innovation potential, with particular attention to reducing the innovation gap between the Member States and to strengthening the cooperation between SMEs. The agency was proposed to have the following characteristics: 27 voting members, one for each Member State. Each member is to be appointed at the national level by a non-political committee of field experts. One of the main tasks of the agency will be the establishment of a system of loan guarantees. The reasons behind this proposition are found in the difficulty that SMEs are bound to encounter when applying for loans, since they often lack the guarantees that would allow them to obtain lower interest rates. Any company fulfilling the requirements set by the Agency will be able to benefit from the service, which may include but not limited to the dimension of the company and the innovative potential of the project. The guarantee shall then be given as long as at least the 50% will be invested in the R&D department of the company, on a case by case basis.

Acknowledging the lack of incentives for enterprises to innovate in Europe and considering the significant bureaucratic burden faced by firms when trying to protect their intellectual property, the participants decided that it was necessary to lower the cost of innovation by providing European funds to those SMEs already benefiting from the before mentioned guarantee for loans, after having assessed how the loan money has been put to use, and bestowing tax reliefs in the form of reimbursement for SMEs trying to access other European markets.

It was decided that the Agency should also provide tax reliefs in the form of tax reimbursements and European funds to SMEs involved in projects in collaboration with other institutions- may them be SMEs, universities or NGOs- from at least three Member States. The amount of the relief will vary according to the number of countries involved and, in particular, special attention shall be given to projects involving those countries deemed as innovation “late-comers”. The Agency will be responsible for the assessment of each nation’s level of innovation. The relief will be applied solely to the income related to such projects.

Acknowledging the lack of information related to EU programmes and funding opportunities, the participants discussed in the remaining time the urge for the European Union to expand its online resources and came up with two proposals: creating an educational platform with an informative objective and instituting a digital hub for SMEs, investors and universities with the objective of facilitating inter-communication and coordination.

The online educational platform should have the aim of informing the general public about European law and facilitating the access to European funds and incentives, while the digital hub should create opportunities for SMEs to interact with experts and field related actors and encourage companies to work closely with universities.

3. Chairs’ Comments

The European Youth Debate remains nowadays the highest successful output of European Generation as an association. Despite this year’s disturbing premise of the worldwide COVID-19 pandemic, which forced the event to take place online, the debate did not fail to deliver. Adjustments were made in order to reach the ideal working conditions, including a reduction of the number of participants per table and a shortening of the online sessions.

From a moderator’s point of view, the discussion has been extremely gratifying. The aforementioned shrinkage to the original format of discussion perfectly balanced the additional stress burden entailed by the monitoring experience. It was undoubtedly harder to work on a common goal without the benefit of in-person interaction, and the online conversation was a bit crippling in the early stages of the debate, when as moderators it seemed tougher to break the ice and encourage the participants to share their thoughts. However, as the debate unfolded, we felt increasingly more confident seeing the perseverance of the participants. With a non-pervasive but firm and constant stimulus from the chairs, and with the best full-on commitment of the participants, the discussion turned out to be strikingly fruitful, with the production of a remarkable final document full of practical proposals that we cannot but feel delightedly proud of.

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