The French scientists aren’t the only ones worried about Europe’s leadership in science and technology. Four years ago European politicians signed onto the Lisbon agenda–a pledge to become “the most innovative, knowledge-based” society in the world by 2010 by supporting research, encouraging high-tech start-ups and attracting top entrepreneurs and scientists. Since then, Europe has only moved farther from that goal. The Continent has fallen 130 billion euro behind the United States in R&D funding, and the gap continues to grow. Despite producing more Ph.D.s per capita than the United States, talent is going where the money is–abroad. Those who stay have to contend with Byzantine patent laws and fragmented capital markets, which make it tough to start high-tech firms. In 2002 Europe exported a lower proportion of high-tech goods than either Japan or America, reports the European Commission, and had fewer patent filings per capita.
The underlying causes of this malaise go beyond a lack of money. “We need a deep change in European attitudes on a number of subjects,” says EU Research Commissioner Philippe Busquin. “Unnecessary regulations and a negative attitude to risk are too often a brake on the creation and growth of companies.”
For starters, Europeans too often view business and science as completely separate enterprises. With a few notable exceptions like Cambridge, European universities have been unable to reap the full commercial rewards of their research. European companies themselves are increasingly moving their R&D efforts to the United States or Asia, where there is less red tape and more tax breaks.
European legislators are trying to reverse the trend–in 2002, the EU announced a plan to increase the percentage of GDP spent on research to 3 percent (on par with America). But a recent progress report showed that funds are increasing too slowly because national governments have failed to prioritize R&D during the economic downturn. And despite efforts to trim red tape, scientists and engineers still find it difficult even to apply for public funding. “There are so many forms to fill out, and so many regulatory hurdles that if you ask for money today, you’ll maybe get it in a year,” says Feike Sijbesma, head of EuropaBio, a biotech industry group.
The European stock markets aren’t much of an alternative. A lingering postbubble fear of equities and the lack of a completely unified financial market make it tough for young companies to raise private money. The recent downturn in equities and a backlash against corporate scandals hasn’t helped. Three markets catering to high-tech firms–NASDAQ Europe, Germany’s Neuer Markt and Switzerland’s SWX New Market–recently closed, and the amount of venture capital available in Europe still lags behind the United States.
Part of the problem is Europe’s complicated and fragmented regulations, which repel potential investors. For example, after 30 years of negotiation on a common patent system, companies still have to file separately in each European country, which makes patents two to four times more expensive to file than in the United States. Three weeks ago, ministers scuttled a reform proposal because they couldn’t agree on technicalities. “This undermines the credibility of the whole enterprise to make Europe the most competitive economy in the world by 2010,” said Fritz Bolkestein, the European commissioner in charge of internal markets.
Entrenched ideas about risk and the relationship between commerce and science are formidable obstacles. The protesting French scientists are loath to consider a U.S.-style system that skews much more heavily toward private funding of specific projects at universities. “It would start a revolution,” says scientist Jean Dejax at the Paris Natural History Museum. Which may be just what Europe needs.
