The European paradox is less innocuous than ever

Towards the end of the last century, the EU introduced the term "European paradox" to highlight the contrast between European scientific research at a level comparable to that of the US and significantly lower results in terms of innovation and the creation of large companies. The subsequent academic debate on the reasons for this has been substantial. Professor Ruiz-Castillo, from Carlos III University, has been a major participant. Having read the literature, I offer my opinion, with less nuance than necessary. The cause is twofold: 1. The premise regarding the level of European science is not entirely sound. When the focus is placed on the most selective indicators of quality, the superiority of the US is clear. This difference at the top is significant because, until now, an implacable economic logic has prevailed in the world: whoever arrives first takes the whole pie. China understood this long ago.

2. There has been negligence in establishing the regulatory and institutional frameworks that would facilitate the creation of companies from knowledge centers. After all, the products that science—made here or there—makes possible have been available in Europe: they have been supplied by American companies, often at very good prices. From a consumer perspective, it didn't matter much whether the intellectual property (IP) belonged to a company based in the US or in Europe. The fact that product regulation was a US government monopoly caused conflicts, but they were low-intensity and were resolved amicably.

Unfortunately, everything has changed. In a world where the US can democratically set President Trump's policies, our negligence is a cardinal sin. Hence, European states—I always include the UK—are deploying an agenda of strategic autonomy. Optimistically, I will assume they are serious. Faced with a country on which we depend for essential issues and which has shown hostility in democratic Europe and the EU, there is no alternative but to undertake a process of disengagement—which will be difficult and will require determination—in energy, defense, and cross-cutting basic technologies. The implication for today's topic is that the European paradox is less innocuous than ever. We need: 1. To continue boosting the competitiveness of European research. The EU has been doing this for twenty years now with the creation of the European Research Council and later the European Innovation Council. But these programs are far too small. The Draghi report recommends, among other measures, doubling their budgets. This must be done. 2. On the path to strategic autonomy, we also cannot afford to neglect the valorization—I prefer this term to transfer—of the high-quality research we produce. Today, it is crucial to transform it into intellectual property and incorporate it into companies based in Europe. To achieve this, it is essential to develop valorization capabilities that effectively bridge the gap between public research—especially significant in Southern Europe—and the market. We must conceive of a good research center not as researchers + infrastructure (+ teaching, if it is a university) but as researchers + infrastructure + access to a valorization bridge. All three aspects must be adequately funded. We must recognize that the synergy between a good researcher and a good bridge expert can be enormously productive.

3. In strategic areas, situations in which a start-up We develop our own technology and position it well in the market, but it ends up being acquired by a company based in a potentially hostile country. To avoid this, there are three complementary paths: making investment in Europe more attractive—this is the content of the Letta report—public participation in capital, and regulation. Ideally, it would be best if politics didn't interfere in these decisions. It's easy to make mistakes. But the political agenda we face can only be countered with a political agenda. We're more in the realm of strategic game theory than that of markets.

One final observation. Let's suppose a consensus is reached on the inadvisability of selling companies designated as strategic outside of Europe. It would then be bad news if one of these companies, say French, were acquired by another that might be influenced by hostile political powers in Europe—given the case of the US, it's not easy to predict which ones those might be. But if the acquirer were German or Spanish, it would simply reflect the normal functioning of the market.