Putting research and innovation at the heart of EU policymaking is key to Europe’s ambitions, according to the Commission’s flagship R&I report.
As Europe navigates an era of intensifying geopolitical competition, slowing productivity growth and sweeping technological transitions, the European Commission’s (EC) Science, Research and Innovation Performance of the EU 2026 (SRIP) report provides a timely assessment of the Union’s research and innovation (R&I) landscape. Published every two years, the SRIP report is the EC’s flagship analysis of the EU’s R&I performance, identifying structural challenges and offering policy recommendations.
Three challenges emerging from the report define the strategic agenda for European R&I policy: strength, structure and scale. Although the EU retains significant strengths in scientific output, these are increasingly contested in a rapidly evolving global environment. For instance, despite ranking second globally in scientific output, the Union struggles to convert these assets into scalable deep-tech companies. To successfully translate scientific excellence into tangible productivity growth, and hence competitiveness, the report stresses that science, research and innovation must sit “at the very core of European policymaking”.
A key issue highlighted in the SRIP report is that the EU’s research and development (R&D) investment remains below that of several global competitors such as the US (3.45%, 2023) or South Korea (4.96%, 2023), with a growing gap in absolute spending. Although EU R&D intensity rose from 1.81% to 2.24% of GDP between 2002 and 2024, it remains well below its 3% target. This persistent gap is largely rooted in the EU’s R&D funding structure: public investments account for roughly a third of total R&D financing in the EU, compared to only 17-19% in the US and China, while private funding remains concentrated in low-growth, mid-tech manufacturing (see SwissCore article). To meet the EU’s 3% target by 2030, an additional ~€565 billion of investment in R&D will be needed. Although the EC aims for the private sector to cover roughly €370 billion of this shortfall, the current uncertain economic environment creates a risk of declining private R&D intensity.
Beyond funding gaps, the EU’s R&I performance suffers from structural fragmentation across national borders. While the European Research Area (ERA) has fostered significant cross-border collaboration, national R&I systems remain unevenly developed, leading to persistent internal disparities in research intensity and innovation capacity. In total, European start-ups and scale-ups often face a shortage of late-stage venture capital, a fragmented regulatory landscape, and hurdles in single-market commercialisation, resulting in many high-growth firms seeking capital and expansion abroad.
To overcome these structural hurdles and boost productivity, the SRIP report outlines several recommendations. For example, a full-cycle approach combining targeted public support, deeper capital markets and stronger cross-border investments could close the EU’s innovation finance gap and ensure that deep-tech scale-ups stay in Europe. Additionally, leveraging pre-commercial procurement could create early lead markets for breakthrough technologies. And to counter fragmentation and regional disparities, the report stresses the importance of place-based strategies like the Regional Innovation Valleys.
While the SRIP report identifies macroeconomic gaps, structural bottlenecks and policy solutions within the Union, the Horizon Europe state of play (SoP) provides an operational perspective on where demand across the European research community is strongest. The report reveals that bottom-up excellence under Pillar I attracts the strongest demand, with the European Research Council (ERC) and Marie Skłodowska-Curie Actions (MSCA) accounting for over two-thirds of all proposals submitted to Horizon Europe. MSCA experienced particularly strong growth in applications, with proposals more than doubling (+139%) between 2022 and 2025, alongside moderate increases in ERC applications (+19%). However, demand for ERC funding continues to far exceed available funding, with the latest Starting Grants recording a success rate of just 8.8%, down from 12.2% in 2025. Collaborative grants under Pillar II represent about a quarter of all proposals, showing a one-third increase over the same period, while Pillar III’s European Innovation Council (EIC), the main instrument supporting deep-tech innovation, saw a 12% rise. The SRIP report also highlights Switzerland’s strong performance, with a success rate of 18.8%, the second highest among all third countries and above the EU average of 14.4%, highlighting its contribution to Horizon Europe’s excellence.
These figures confirm the scientific excellence highlighted in the SRIP report. However, the broader success of the European R&I ecosystem depends on connecting this foundation with the collaborative ambitions of Pillar II and the deep-tech scaling capacity of Pillar III. Together, the two reports point to the same conclusion: to turn scientific excellence into lasting competitiveness, Europe must pool talent, resources and innovation capacity across borders.