Europe remains one of the world’s leading scientific powers but struggles to turn discoveries into competitive technologies and growing businesses, a European Commission report warns. It estimates that the EU needs over €560 billion in additional investment to meet its research spending target by 2030.
The 2026 Science, Research and Innovation Performance report, presented in Brussels, identifies financing gaps and fragmented efforts across countries, regions and institutions. Those weaknesses limit Europe’s ability to translate research into productivity growth and reduce dependence on technologies developed elsewhere.
“It shows why we need a very ambitious programme for research and innovation under the EU’s new long-term budget,” Research Commissioner Ekaterina Zaharieva said in the Commission’s announcement.
Discoveries struggle to reach the market
The EU ranks second globally in scientific output, and 57 per cent of its publications involve international collaboration. But the report finds that Europe is less successful at developing that knowledge into market leadership, particularly in artificial intelligence, advanced semiconductors and cloud computing.
The problem extends beyond producing a promising invention. Companies need financing to develop it, customers willing to adopt it and the ability to expand across national markets. The Commission identifies obstacles at each of those stages, weakening the economic return from Europe’s scientific strengths.
The report finds that around half of growth-stage funding for deep-tech companies still comes from outside Europe. These businesses develop technologies based on substantial scientific or engineering advances and often need significant investment before reaching commercial scale.
It shows why we need a very ambitious programme for research and innovation under EU’s new long-term budget. — Ekaterina Zaharieva, Commissioner for Startups, Research and Innovation
Europe’s research spending also remains below its ambition. Investment reached 2.24 per cent of GDP in 2024, compared with the EU’s three per cent target. Closing that gap would require about €565 billion in additional R&D investment by 2030, according to the report. The report links the shortfall partly to private spending concentrated in established manufacturing sectors, with a smaller contribution from rapidly growing technology industries.
Bigger budgets must connect research with growth
The Commission has proposed €175 billion for Horizon Europe between 2028 and 2034. The next research programme would support scientific excellence alongside collaborative research and the development of innovative businesses. Its budget remains subject to negotiations with Parliament and EU governments.
However, money is only part of the response. The European Innovation Act proposed in September would create common rules for research and development procurement. It would also help businesses obtain financing backed by intellectual property, making assets such as patents more useful when seeking investment.
The Commission is also preparing a European Research Area Act to improve coordination and remove barriers to the movement of knowledge and talent. Thursday’s report adds evidence to those policy debates: Europe’s challenge is to give discoveries a clearer route from laboratories into businesses capable of growing within the EU.
