Comparing EU and US innovation frameworks: the reasons for the US supremacy

Comparing EU and US frameworks for spurring innovation, it is important to stress that the U.S. and EU regulatory frameworks and better regulation agendas are remarkably different, in a number of respects. First, the multi-level governance and level of integration of the two jurisdictions are remarkably different. This implies that the possibility, for the U.S. administration, to develop innovation policies for the whole 50 US states is generally greater than the corresponding power of the EU institutions. In other words, the EU28 still enjoy a significant degree of autonomy in their decisions about innovation policy, and indeed the EU budget dedicated to R&I is only a tiny fraction of public expenditure in R&I in the EU (and more generally, the EU budget in and of itself is much smaller than the U.S. federal budget.

Second, the US governance of the innovation strategy appears at once simpler and more comprehensive compared to that of the EU research and innovation policy

The EU “bottom-up” strategy relies on the need to avoid a fragmented internal market, basically due to the different national ITS markets and players, raising the need to define and support common priorities, in order to let ITS services be deployed quickly throughout the EU by Member States and local authorities, vehicle manufacturers, road operators and the ITS industry.

On the other hand, the US “top-down” ITS strategy is based on the network of multiple federal agencies, local transportation organizations, academia, industry, trade groups, other state and local public organizations which can ensure the implementation of a top-down strategy based on the definition of priorities in advancing research, development of programmes and their adoption/monitoring.

On top of that, two important structural features stand as decisive:

  1. There is a greater willingness on the part of US financial markets to fund the growth of new companies in new sectors;
  2. The inability of new European firms to grow large, particularly in the high-tech, high-growth sectors, most notably the ICT sector. This correlates with the European economy’s lower degree of specialization in the R&D-intensive, high-growth sectors, again most notably the ICT sectors.
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