Activating Europe's Hidden Innovation Economy

Europe spends enormous resources generating new knowledge. Yet the next frontier in competitiveness may have less to do with producing more research and more to do with extracting greater value from the research that already exists. Across universities, research institutes and laboratories, a vast amount of intellectual property, expertise and technical knowledge remains commercially underexplored. The challenge facing Europe is increasingly one of activation rather than invention.

For most of the past century, innovation policy has focused on a relatively straightforward objective. Create more knowledge.

The assumption was reasonable. Scientific discoveries were seen as the foundation of economic progress. Better research would lead to better technologies. Better technologies would create new industries. New industries would generate growth.

Viewed from this perspective, the role of universities was clear. Their primary responsibility was to expand humanity's understanding of the world and generate discoveries capable of shaping future technological development.

On many measures, Europe succeeded. The continent built one of the world's strongest research systems. Its universities became internationally respected institutions. Its researchers produced breakthroughs across engineering, life sciences, energy systems, advanced manufacturing, photonics, artificial intelligence and countless other fields.

Yet over time an uncomfortable question emerged. If Europe performs so well scientifically, why does it continue to worry about innovation performance?

Why do conversations about competitiveness repeatedly return to concerns about productivity, commercialization and scale-up capability? And why do policymakers increasingly focus not on knowledge creation but on what happens after knowledge has been created?

The answer may lie in a distinction that is becoming increasingly important across innovation ecosystems. Creating knowledge and activating knowledge are not the same thing.

A New Competitiveness Debate

The debate surrounding European competitiveness has changed noticeably in recent years.

When the European Commission announced plans for the European Innovation Act, the focus was not on producing more research. Instead, attention turned towards commercialization, intellectual property exploitation, university-industry collaboration and the barriers preventing innovations from reaching the market. The Commission explicitly identified the need to improve the journey from research outcomes to commercial deployment. [1]

A similar theme emerged within broader discussions surrounding European competitiveness.

The challenge was increasingly described not as a shortage of ideas but as an inability to consistently transform ideas into economic outcomes. Europe continued to generate scientific breakthroughs yet often struggled to convert those breakthroughs into globally competitive companies at the same rate as competing regions. [1]

This shift in language is significant. It suggests that policymakers are beginning to see innovation less as a research problem and more as an implementation problem.

The issue is no longer whether knowledge is being created. The issue is whether enough of that knowledge is becoming useful.

The Opportunity Hidden in Plain Sight

Recent efforts to quantify entrepreneurial performance provide an interesting perspective on the scale of this challenge.

The Redstone University Index examined more than 900 universities and research institutions across Europe and found substantial differences in startup creation performance between institutions with broadly comparable resources. Some universities consistently generated significantly more entrepreneurial activity than others despite operating under similar conditions. [2], [3]

The implications extended well beyond university rankings.

The study estimated that improvements in commercialization efficiency could generate hundreds of thousands of additional startups across Europe over the next decade, contributing millions of jobs and trillions of euros in economic value. [2], [3]

Regardless of how one interprets the exact projections, the broader conclusion is difficult to dismiss. A considerable amount of value appears to exist within Europe's research system before any additional discoveries are made.

The opportunity is not solely about future science. It is also about existing science. Research outputs already generated. Patents already filed. Technologies already developed. Knowledge already created.

The challenge is turning these assets into impact.

From Discovery to Opportunity

Historically, innovation systems have tended to focus on moments of visible success. A spin-out secures investment. A university signs a licensing agreement. A technology reaches industrial deployment. A startup achieves scale.

These milestones are important because they demonstrate tangible outcomes. Yet they represent only the visible end of a much longer process.

Long before any company exists, a series of less visible questions must be answered.

Which technologies deserve attention? Which inventions possess genuine commercial potential? Which markets might benefit? Which opportunities justify further investment? Which partners should be involved? Who will ultimately adopt the innovation?

These decisions shape future outcomes, yet they often occur under conditions of considerable uncertainty.

The challenge of activation begins here. Not with commercialization itself. But with recognition.

Why Readiness Matters

The growing influence of frameworks such as KTH Royal Institute of Technology's Innovation Readiness Level methodology reflects increasing awareness of this challenge.

Traditional approaches often concentrate on technical maturity. A technology works, or it does not. Development progresses through measurable stages.

Yet technical readiness alone tells only part of the story. A highly advanced technology may still struggle to achieve adoption if customers remain undefined, implementation pathways are unclear, or commercial incentives are weak.

The Innovation Readiness approach attempts to broaden this conversation by examining the wider conditions required for innovation to create impact. Market understanding, customer engagement, business readiness and implementation capability become part of the assessment process.

In effect, attention shifts from whether a technology exists to whether it can realistically be activated.

This distinction may appear subtle. In practice, it changes how commercialization is approached.

The Limits of Traditional Technology Transfer

Universities have spent decades developing technology transfer capabilities. Many have created sophisticated systems for identifying intellectual property, securing patent protection and pursuing commercialization opportunities.

Yet as research portfolios continue to expand, a new challenge has emerged. Scale.

Universities generate far more opportunities than any technology transfer office can explore in depth. Resources are finite. Expertise is finite. Time is finite.

As a result, institutions constantly make choices about where to focus attention. Some opportunities progress. Others do not.

This is not a failure of technology transfer. It is a natural consequence of attempting to evaluate large volumes of knowledge using limited resources.

The future challenge is therefore not simply improving commercialization processes. It is improving visibility.

How can institutions identify promising opportunities earlier? How can they evaluate larger portfolios more effectively? How can they ensure that commercially relevant knowledge remains discoverable?

These questions increasingly sit at the centre of the innovation activation agenda.

Building Systems Rather Than Success Stories

One of the most interesting developments in recent years has been the shift from individual success stories towards system-level thinking.

Initiatives such as the TenU University Spin-out Investment Terms framework sought to reduce friction between universities, founders and investors through greater transparency and consistency. Licensing reforms introduced by Danish universities similarly aimed to simplify and standardize commercialization processes. [3]

The significance of these efforts lies not merely in administrative efficiency. They represent attempts to build infrastructure. To create systems capable of supporting many opportunities rather than a small number of exceptional cases.

Historically, commercialization often depended heavily on individuals. A researcher willing to pursue entrepreneurship. A technology transfer professional capable of recognizing potential. An investor prepared to take an early risk.

These individuals remain important. But relying exclusively on exceptional people limits scalability.

Activation increasingly requires exceptional systems.

A Different Way of Thinking About Innovation

When innovation is viewed through the lens of activation, the conversation changes.

The focus shifts away from finding the next breakthrough and towards understanding how breakthroughs move.

How does knowledge travel from universities into industry? How does intellectual property become investable? How do technologies become visible to entrepreneurs, investors and commercial partners? How does a research portfolio become an innovation portfolio?

These questions are fundamentally about movement. And movement requires infrastructure. Not physical infrastructure. Innovation infrastructure.

The frameworks, processes, incentives and capabilities that allow discoveries to leave the laboratory and enter the economy.

Europe's Next Competitive Advantage

Europe's future competitiveness will undoubtedly depend on continued investment in science and research. There is little disagreement on that point.

Yet research strength alone is unlikely to close the gap that policymakers increasingly worry about.

The next competitive advantage may emerge from something less visible. The ability to activate knowledge more effectively. To identify opportunities earlier. To reduce friction within commercialization pathways. To create greater transparency around intellectual property. To help researchers, entrepreneurs, universities and investors operate from a shared understanding of potential value.

Europe already possesses extraordinary scientific assets. The question facing the coming decade is whether those assets can be mobilized at greater scale.

Because the continent's next major innovation opportunity may not depend on discovering something entirely new. It may depend on recognizing the value of what already exists.

Sources

1. DigitalEurope. (2025, October 3). A European Innovation Act to boost commercialisation and enable growth. https://cdn.digitaleurope.org/uploads/2025/10/DIGITALEUROPE-European-Innovation-Act-to-boost-commercialisation-and-enable-growth-03102025.pdf
2. European Commission, Directorate-General for Research and Innovation. (2025, December 4). Commission concludes public consultation on the European Innovation Act. https://research-and-innovation.ec.europa.eu/news/all-research-and-innovation-news/commission-concludes-public-consultation-european-innovation-act-2025-12-04_en
3. European Commission, Directorate-General for Research and Innovation. (n.d.). European Innovation Act. Retrieved August 7, 2026, from https://research-and-innovation.ec.europa.eu/strategy/support-policy-making/shaping-eu-research-and-innovation-policy/european-innovation-act_en