Europe’s innovation strategy is failing. Here’s how to fix it

Group of businesspeople negotiating gathered in modern conference room, blurred silhouettes view, meeting behind closed glass doors. Business communication, workflow, decision-making, strategy sharing.

Europe is experiencing what many economists refer to as the mid-tech trap: Most companies based here are too advanced to compete with emerging markets on low-cost production, yet not agile enough to rival the high-tech innovation of the US and China.

While numerous government subsidies and innovation programs have been introduced to help close the gap in business, many have struggled to deliver meaningful impact. For example, Horizon Europe, the EU’s flagship research and innovation program, has committed nearly €100 billion through 2027, but less than 5% of those funds have resulted in true “breakthrough innovation.”