Towards a European Innovation Principle Endorsed by Better Regulation

Abstract

Innovation is an essential element of sustainable growth. While the internal market is defined by the objective of a highly competitive social market economy, aiming at full employment and social progress, and a high level of protection and improvement of the quality of the environment (Article 3 (3) TEU) innovation becomes a precondition of a sustainable and green economy. It leads to higher productivity and competitiveness while also bringing social and environmental benefits. By definition, innovation cannot be preordained. It takes place in response to diverse incentives. The policymaker’s task is not to pick winners but to ensure that the entire economy becomes better-suited for innovative outcomes. Regulation matters at all stages of the innovation cycle, from research and development, to diffusion, commercialisation and beyond. Therefore, a toolbox of innovation-enabling legislation can help to unleash the innovative potential of European companies and individuals. The author is of the opinion that the innovation principle should - in a fair balance with other treaty based principles - be integrated in all of its stages and expressed through a range of instruments. The resulting cultural change will mean that innovation will be better accepted as a sustainable way of addressing Europe’s societal challenges and improving its green growth prospects. Also, he concludes, that regulation has the potential to drive innovation when it is well-designed, flexible and regularly updated to reflect market developments.