Insight Report Innovate Europe Competing for Global Innovation Leadership In col aboration with McKinsey & Company January 2019 Contents Preface 3 Executive summary 4 European innovation model 6 Competing for global innovation 8 leadership Key catalysts to achieve scale 9 Building blocks for European innovation 13 Flagship initiatives: Moving to action 33 Contributors and acknowledgements 34 Endnotes 37 World Economic Forum 91-93 route de la Capite CH-1223 Cologny/Geneva Switzerland Tel.: +41 (0)22 869 1212 Fax: +41 (0)22 786 2744 Email: © 2019 World Economic Forum. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, including photocopying and recording, or by any information storage and retrieval system. Preface Europe’s innovation ecosystems are growing more quickly than ever, and the continent has recently taken forward-looking steps to shape the future of innovation: last year’s regulations on protection and the free flow of non-personal data were a significant step by the European Union to provide a regional framework for dealing with data, protecting citizens and developing an effort to recognize the competitive nature of data-driven economies and the need to protect values and the rights of citizens. Despite this momentum, challenges for Europe remain. Large platform companies from Asia and North America are beginning to dominate emerging deep technologies. Europe is lagging in the digital transformation of industries key to its success in the Fourth Industrial Revolution. It is also behind in investment in new technologies, such as artificial intelligence, where it captured only 11% of global Børge Brende, corporate investment and venture capital in 2016 compared to 50% in the United States and 39% in President and China. European start-ups find it difficult to achieve scale, while talent remains a scarce resource. Member of the Managing Board, This report sets out a vision for Europe to become a global leader in innovation. Supported by the World Economic World Economic Forum System Initiative on Shaping the Future of Digital Economy and Society, Forum the Digital Europe project team engaged entrepreneurs, investors, corporate and public figures and representatives from academia across Europe. Together, they worked to create a common vision, identify action areas, develop concrete suggestions to make European innovation ecosystems more successful, and identify Europe’s innovation model to compete with other pioneering regions. The report continues the work of the World Economic Forum and its Digital Leaders of Europe community in collaboration with McKinsey & Company as a Knowledge Partner. It builds on last year’s work, including the “Declaration on a Pan-European Ecosystem for Innovation and Entrepreneurship”, a White Paper entitled “Collaboration between Start-ups and Corporates” and the 2018 Renew Europe report. We would like to thank the members and the board of the Digital Leaders of Europe community for their commitment and ideas, and McKinsey & Company for their analysis, expertise and support. Martina Larkin, Head of Regional This is an important year for Europe. A new European Commission will set a new agenda for a Strategies, Europe European Union that may look very different than in the past. Europe’s leadership in the Fourth and Eurasia, Industrial Revolution will play a major role in defining its future, and we hope this report leads to and Member of discussions and actions that will drive Europe’s global leadership in innovation. The World Economic the Executive Forum is keen to provide a platform for this continuing exchange of ideas and calls on European Committee, World citizens and leaders to join the discussion and implementation of concrete actions at #InnovateEurope. Economic Forum Digital Leaders of Europe community The World Economic Forum Digital Leaders of Europe are recognized, pivotal figures in their respective European innovation and entrepreneurship ecosystems. The community comprises over 80 leading founders, investors, incubators and public and corporate figures from 27 countries across Europe. Its Board provides strategic direction and champions specific topics.

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