European multi-annual budget is not ambitious for RD&I investments for companies and knowledge institutions

European multi-annual budget is not ambitious for RD&I investments for companies and knowledge institutions

Flemish universities and research institutions had called on European Council president Charles Michel in an open letter to show leadership during the budget negotiations on 17 July 2020. Unfortunately, this call was not answered. The European multi-annual budget (up to 2027) was established on Tuesday, 21 July, after 4 days of negotiations. And for the research and innovation budget, results are quite meagre.

Horizon Europe

Horizon Europe, the successor to Horizon 2020, is the main victim. The European Parliament had requested a budget of 120 billion euro for this research and development framework. In the end, the budget was set at 75.9 billion euro. This is roughly equal to the budget for Horizon 2020. If we include the indexation, the budget is in fact reduced.

Particularly in this Covid-19 era and with the resulting economic uncertainty (not to use the word crisis) in mind, an increase of the research and innovation budget would have been a strong and desirable signal. After all, 2/3rd of the European economic growth is directly attributable to research and development investments, which together account for a 15% productivity increase. Investing in research and development is therefore clearly an important element in promoting economic growth and prosperity, which are exactly the elements that we are looking for after a lockdown and the accompanying economic malaise. Besides, there are other drawbacks to this budget reduction as well:

  • Reducing the research and development budget undermines our resilience to a possible new pandemic. Just think of all (medical) innovations that have been launched in the last 3 months in the fight against Covid-19. Less budget simply means less vigour against such a pandemic.
  • In addition, the budget reduction will also lead to a decline in the European R&D position on a global level. The gap with other regions will only grow and thus mortgage our future. European technological sovereignty and the digital & green transition are under threat and will not be achieved without additional investments.
  • Finally, this reduction also means that there will be less knowledge transfer within the European Union. Several European research projects will have less resources, expertise, knowledge and infrastructure available. As a result, complex R&D projects, which were not possible at national level and required international cooperation, will be prevented from going ahead. Furthermore, there is also the risk of a growing innovation gap between countries or regions within the EU, with all its consequences.