The Letta report recommends more harmonised EU research, innovation, and education policies and laws to help the European Union catch up internationally.
On 17 April, former Italian Prime Minister Enrico Letta presented his report on the EU Single Market entitled ‘Much more than a market – Speed, Security, Solidarity. Empowering the Single Market to deliver a sustainable future and prosperity for all EU Citizens’. The report goes back to the European Council’s call in June 2023 for an independent high-level report on the future of the Single Market. The document now presented by Letta grapples with the diminished economic weight and competitiveness of the European Union. The EU not only faces challenges from the rising economies in Asia, but also lost further ground compared to the United States: “In 1993, the two economic areas had a comparable size. However, while GDP per capita in the US increased by almost 60% from 1993 to 2022, in Europe the increase was less than 30%.” The report specifically points to challenges in the R&I area and sees the EU’s strategic autonomy and economic security at risk, in line with previous Commission policy documents and initiatives (see SwissCore article): “Currently, the European Union holds a vast but underutilised pool of data, expertise and startups. Without full utilisation, there’s a risk that this wealth of resources could end up benefiting other global entities better positioned to capitalise on it and hamper our strategic autonomy and economic security.”
Thus, a key message of the report is that the current Single Market framework, with its four freedoms, the free movement of people, goods, services, and capital, is based on 20th century theoretical principles, seems outdated, and is “failing to reflect the evolving dynamics of a market increasingly shaped by digitalisation, innovation and uncertainties related to climate change and its impact on society”. To remedy this situation, the Letta report proposes the addition of a fifth freedom to the existing four, which should be added to Title XIX of the Treaty on the Functioning of the European Union: “The fifth freedom entails embedding research and innovation drivers at the core of the Single Market, thereby fostering an ecosystem where knowledge diffusion propels both economic vitality, societal advancement and cultural enlightenment.” The additional freedom should catalyse advancements in areas such as R&D, data utilisation, competences, AI, Quantum Computing, Biotech, Biorobotics, and Space, among others. Furthermore, it should help “transform existing dispersed knowledge, fragmentations and disparities into unified opportunities for growth, innovation, and inclusivity”. Retaining talents in the EU is seen of critical importance.
How should these ambitious objectives be achieved in practice? The Letta report proposes that EU institutions and Member States should draw up a comprehensive and ambitious action plan to implement the fifth freedom. The report favours more centralised, collective EU approaches that give more competencies to the EU level: “Establishing a strong European technological infrastructure poses a strategic challenge, necessitating a shift in governance. This involves granting enhanced authority to a collective industrial policy at the European scale, moving beyond national confines.” Of strategic importance for Letta is the creation of a European Knowledge Commons – “a centralised, digital platform providing access to publicly funded research, data sets, and educational resources”, and a comprehensive Open Science framework incentivising researchers to make their work openly accessible while fostering data sharing and collaboration. Overall, the Letta report identifies the removal of barriers to knowledge sharing as a key element for the fifth freedom: “The EU must harmonise cross-border data flow mechanisms, particularly interoperability and data protection regulations, and invest in robust digital infrastructure”. In addition, Letta urges to “harmonise and uniformly implement laws across Member States, simplify bureaucracy, expand the use of regulatory sandboxes, and ensure non-discriminatory Internet access”. A key objective, according to the report, is seamless mobility of researchers within the EU and beyond by dismantling administrative and legal barriers. Furthermore, established programmes like Marie Skłodowska-Curie Actions, should be further expanded to increase the mobility of researchers and innovators.
The Letta report also focuses on the funding that would be needed to realise the potential of the fifth freedom and to address the investment gap in research and innovation. To this end, “public and private sectors must align their funding strategies with the principles of open knowledge to maximise impact, sharing a set of common goals that aims to overcome global issues such as ageing population and climate change”. At the same time, the autonomy of researchers should be safeguarded, “protecting their right to pursue curiosity-driven inquiries free from undue political or commercial pressures”. Further, Letta views the European Education Area that fosters collaboration among Member States a crucial dimension of the fifth freedom. Similarly, the European Degree, as recently proposed by the EU Commission (see SwissCore article), “must be seen as a cornerstone in realising the fifth freedom”. To support this endeavour, the report proposes dedicated funding for the European Universities Initiative: “A leap to €10 million annually for each alliance, culminating in 600 million euros per year across the current spectrum of 60 alliances, could significantly amplify the development of joint programmes across a wider array of disciplines”. Letta attaches great importance to mobility for the fifth freedom: “The experience of mobility should be an integral and mandatory component of secondary education for all Europeans under the age of 18, as part of an ‘Erasmus for All / Erasmus High School’ initiative.”
Representatives of European associations in the research, innovation, and education field mostly welcome the recommendations of the Letta report, especially when it comes to the removal of obstacles to the free circulation of knowledge (see Science Business article). However, some representatives of the Brussels R&I community, like Member of the European Parliament, Christian Ehler (EPP/Germany), warn that the next framework programme should not become an instrument of a European planned economy. However, key messages of the Letta report were also echoed by the French President Emmanual Macron in his second Sorbonne speech on 25 April, which addressed the EU’s weakness in international comparison. Like Letta, Macron sees increased investments in research and innovation as a remedy in a difficult situation. He called on EU Member States – and the private sector – to raise respective investments to 3% of GDP as envisioned in the European Research Area ERA (see SwissCore article). Furthermore, he stressed the importance for the EU to attract and retain talent. While the Letta report didn’t mention the European Research Council, Macron stresses that it should be further strengthened: “The Horizon Europe programme needs to be strengthened by focusing on the most effective programmes, in particular the European Research Council.” In the case of the European Innovation Council, he urges to go much further on breakthrough innovations by creating a European DARPA “with the best scientific teams in each discipline”.
The Letta report is one of several focusing on the EU’s competitiveness while the preparations for the next generation of EU programmes 2028-2034 take shape. Earlier in April, the joint report from the European Policy Analysis Group focused on how to strengthen the EU’s innovation capacity (see SwissCore article). In June 2024, Mario Draghi, former President of the ECB and Italian Prime Minister, will present his report on the EU’s competitiveness.
While the Letta report will likely influence the future of EU programmes, the Commission, on 17 April, adopted the 2023-2025 Work Programme amendment of the current framework programme Horizon Europe. And April also saw further progress on association to Horizon Europe: On 23 April, Iliana Ivanova, Commissioner for Innovation, Research, Culture, Education and Youth, announced the launch of exploratory talks between the European Commission and the Singaporean Government.