Boosting innovation: Europe's competitiveness - Justfine International University Pathway

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November 9, 2026

Europe’s research institutions are among the strongest in the world, with a large base of researchers and a high volume of scientific publications. Yet in key digital technologies, the US and China have strengthened their positions, and Europe has been less successful in turning scientific strength into technological leadership. For decision-makers, this raises a question with direct consequences for investment plans, business models and talent strategies: what stands between research strength and technology leadership? The question is pressing. Europe’s population is aging, its workforce is shrinking and its social security systems depend on economic growth. Our new study, Boosting Innovation, examines Europe’s innovation performance and competitiveness from several angles.

1. Europe’s research strength does not translate into technology leadership. The EU has more researchers and scientific publications than the US. Yet its high-value patent output has fallen by almost one third since 2000, and China has overtaken Europe in greentech patents

2. Europe is falling behind on R&D, especially in digital technologies. EU R&D spending is at 2.1% of GDP, below its own 3% target and the US level of 3.4%. EU companies cut ICT software R&D by 8.9% in 2024, while globally, software’s share of total R&D spending rose from 13% to 24.9%

3. Scale-ups lack growth capital at the stage where they need it most. The venture capital gap to the US widens at later stages. European scale-ups increasingly depend on foreign investors, and fragmented capital markets limit cross-border funding

Demographic change
adds urgency. Fewer people in employment must support growing social security obligations, which makes productivity growth a priority for governments and companies alike. We see innovation as a central lever for productivity across industries. The study therefore treats innovation as a core economic issue, not only as a topic for research departments and technology companies. Innovation also depends on skills. Education forms the basis of the talent on which research, engineering and digital transformation rely.

Europe’s scientific base is established, so the more relevant question concerns what happens after the research stage. The study compares Europe with the US, China, Japan and selected European countries along the innovation chain, from scientific output and patents to R&D spending

Investment patterns are a second area of analysis. R&D budgets determine which technologies and sectors a region can lead in a decade from now. The study examines how corporate R&D in Europe compares internationally and how it is distributed across sectors.
Digital technologies
are among the key trends shaping future competitiveness

Financing is the third area. Scaling a technology company requires capital across several growth stages. The study examines how
investor structures, capital markets
and regulatory frameworks affect start-ups and scale-ups, and what this means for the ability of European companies to grow. Recent reforms aim to improve the conditions. For investors, founders and established corporates alike, the effect of these reforms is a decisive question.

Europe also brings strengths to this discussion. European companies have deep sector expertise and decades of experience in engineering, manufacturing and industrial processes. Europe’s high-technology exports remain significant. Which product groups carry this position, and where is it exposed? Our 2040 Technology Game Plan offers orientation on the technology trends with the highest commercial relevance and the continent’s position in the race for leadership position.

Companies and policymakers face linked decisions. Companies must decide where to concentrate limited reshape the conditions in which innovation takes place, through public funding for research and education, by shaping growth-friendly regulations – but also as anchor buyers in certain technological fields

Whether Europe can narrow the gap in future technologies will depend on making the right decisions right now, and on how effectively businesses, research institutions and public authorities work together. The full study provides the data behind these questions and the ideas for action

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