February 8, 2011
Studies indicate that there is no correlation between corporate research and development spending and profitability. Indeed it can divert money from other investments that a company needs, and that can of course be fatal. Sometimes, however, it prevents companies disappearing which otherwise would not have survived.
Specifying the wrong indicators will mean mis-allocation of resources and finally no-one will have any idea whether any of the EU’s innovation initiatives have actually worked.
Ultimately, research and development together with innovation are about getting out of the vicious circle of the declining capital base in Europe where fewer and fewer companies are making less and less money and there is, as a consequence, little re-investment or ability to raise fresh finance.
It is a matter of life and death for Europe, not only economically, but politically and socially, and it is sad to see you report that the Council lost its focus on this vital issue. How much longer can they postpone a proper discussion?
Institute for Innovative Progress