The Centre for Economic Performance (CEP) of the London School of Economics (LSE) predicts that the European Union will not achieve the goals of its Lisbon Strategy by the year 2010. In a recent paper, entitled Boosting Innovation and Productivity Growth in Europe: the Hope and Realities of the EU’s ‘Lisbon Agenda’, it draws a bleak picture of this continent’s prospects.

In a number of ways, the report reads like an abridged version of Wim Kok’s sobering report of 2004, Facing the Challenge. Like Kok, the authors of the LSE report deplore Europe’s productivity gap compared with the United States. Like him, they see no progress in the objective to increase investment in research and development to 3% of GDP. The paper strongly advocates the creation of a European Community patent, drawing attention to the fact that it would reduce patenting costs in Europe by some 60%, and close the gap to the US, where patents are said to be at one fifth of the cost in Europe.

The paper also repeats the popular claims of a considerable brain drain of researchers from Europe to the US – in the light of an anticipated shortage of Europe’s stock of highly qualified R&D staff. It suggests the EU should try to reverse this trend by creating centres of excellence, improve the amounts and the use of research funding and create networks between the centres of excellence and industry.