Europe devotes substantial amounts of money to both cohesion and research & development. The geographical distribution of these funds is highly asymmetric. 90% of the research money lands in the old Member States; 60% of the cohesion funds go to the new Member States. The question is whether this approach should continue after 2020. Further imbalance in Europe is in violation of the EU treaties, which enshrines the goal of cohesion across the EU territory. Indeed, EU earnings are driven more and more by intelligent use of knowledge and the ability to make products and provide services. “Invented in Europe” goes alongside with more “Made in Europe”. The emphasis is on completing the chain: excel, innovate, produce and export both inside and outside the EU. This will enable us to achieve the Europe 2020 goals throughout the whole territory.

Taking stock

An integrated evaluation of the impact of research and cohesion funds is needed. We see too little of this in the publications of the European Commission. For example, in October, the Seventh Cohesion Report will be published as a separate document from the evaluation of Horizon 2020, the research budget. The interest for Horizon 2020 has increased sharply in recent years. Many excellent researchers turn to the EU, but because of the shortage of EU funds many are excluded.  The call for more money must be connected to a second conclusion. Recent evaluations also show that the transformation of research excellence into production, services and jobs is hampering. The EU invests heavily in “free floating intelligence”, but conversion into the real economy needs to improve.

On the other hand, spending on cohesion funds (the ESI Funds) lags behind. Member States have allocated themselves extreme timespans (three to six years) to fund projects. This inevitably leads to a gap at the end of the seven-year period. It seems that this gap will be unprecedentedly high between 2019 and 2022. This is not good for the final beneficiaries, who have to wait for money due to a shortage of EU funds, and neither for the citizen’s confidence in the EU, because they do not meet their payment obligations in those years.

Territorial cohesion
Due to the ever-increasing battle for talent, the differences in the EU are widening. A multi-speed Europe does not take away this tension. Cohesion policy needs to be more targeted, in order to prevent Europe from moving at different speeds. Fortunately, territorial cohesion was included in the Treaty of Lisbon (Article 174). We now need to come up with its practical translation and test the functioning of European funds against it.Decentralized partners, such as the regions and cities in Europe, are playing an increasing role in territorial cohesion. It is an indispensable addition to macroeconomic policy and the European Semester, which provides recommendations for sound financial management and structural changes. Without reinforcing responsibility at the local level, from governments, businesses and universities, we will not get there. Cooperation in and between regional clusters in the EU is much needed to move forward.
In June 2017, the European Commission published the Communication ‘Strengthening Innovation in Europe’s regions: Strategies for Resilient, Inclusive and Sustainable Growth’ and took stock of the progress made in the decentralized innovation capacity. This communication has remained largely descriptive and lacked consequences for the ESI Funds and Horizon 2020 and its successor. The European Parliament is given the opportunity to make proposals on this matter.

Smart Specialisation

The EU 2020 Strategy has been the guiding principle for the deployment of funds in recent years. Smarter, greener, more social and more people employed. With the ESI Funds each region is required to specify their investments and results. This smart specialisation strategy is embraced by the Member States as a helpful tool for achieving better planning in their own country. But the Member States have mainly looked at their own interests: “What’s in for me?” The cross-border EU dimension lags behind, while the need to collaborate is ever increasing. The learning points from Horizon 2020 and the Connecting Europe Facility (CEF), with direct EU interventions, must be more clearly identified. The EU can have more possibilities with a larger role of Member States, regions and cities, when the criteria for the desired EU added value are concretized. In a time of scarce resources, I ask to embrace smart specialisation and come up with an Innovation Pact 2.0.  With this, and Macron’s proposal for an Innovation Council, the innovation capacity will be boosted. I call for a combination of the best of the different worlds; economic governance supported by research and development and the new generation of regional plans. It is here where we miss out on growth opportunities. Europe is currently like the Airbus A380; a state of the art vehicle, however lacking the means to make a comfortable landing. The full dressed discussion starts during the European Week of Regions and Cities, in October 2017.