The portrait of the EU today…
Based on Newsrelease of Eurostat (2nd September 2016), the European Union, which is one of the largest regions in terms of population (7% of the world population live in the EU) generate 23,8% of world GDP (Eurostat, 2014). Such numbers position Europe as the largest contributor to the world GDP, surpassing the United States (22.2%), China (13.4%) and Japan (5.9%).
The larger territorial coverage, 4 liberties (free movement of goods, services, human capital, and financial capital), and a rich cultural diversity of trading partners allow a somewhat bigger scope and scale of business activities; however, the quality and technological intensity of European businesses are lacking behind main competitors. The EU is still far from reaching its Lisbon Strategy goals (to invest in the R&D at least 3% out of GDP by 2010). Based on OECD data (2014), the EU gross domestic spending in the R&D reads c.a. 2%, compared to 2,7% in the USA, 3,6% in Japan, and 4,3% in South Korea.
According to European Innovation Scoreboard (2016), the EU innovation is still held back by low business investment and restrictive framework conditions, notably affecting SMEs. Such countries as Sweden, Denmark, Finland, Germany and the Netherlands are in lead, while the fastest growing innovators are Latvia, Malta, Lithuania, the Netherlands, and the UK.
Based on Innobarometer (2016), the majority of European companies plan to increase the expenditure in innovation in the upcoming 12 months, which might give a necessary momentum within the EU entrepreneurship dynamics. In addition, the EU is among the G-20 leaders for renewable energy, which reveals the EU focus on positive externalities as well as long-term sustainable entrepreneurial activities. The exit of the UK might weaken the innovation profile of the EU, as the UK is among the fastest innovators of the region at the moment.
GILE experts believe that strategic targets of the EU might be achieved only via the focus on education (both early-stage and post-school), and entrepreneurship enhancement policies and programs, where innovation and the R&D should be emphasized starting from the early-stage education.