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Interview: A new hope?

The EU is taking the wrong path on innovation, says an investment manager pushing his own grand scheme

It has become an accepted truth in R&D policy circles that the EU is not very good at innovation, particularly innovation which creates new markets.

This belief underpinned the European Commission’s successful push to establish a European Innovation Council to support exploration and scale up of radical ideas. The EIC could get a budget of €10.5 billion for 2021-27, funded by the Horizon Europe R&D programme, if a pilot programme that began in 2017 is deemed a success.

Investment manager André Loesekrug-Pietri says there is a “direct link” between the EIC and ideas he has been pushing. But he is so critical of the way the Commission has set up its funder that he is establishing an alternative: the Joint European Disruptive Initiative, Jedi.

Episode one

Back in 2017, the Franco-German Loesekrug-Pietri spent a brief period advising the French defence ministry. It was then, he says, that he realised Europe needed something similar to the United States’ Defense Advanced Research Projects Agency, which funds work on ground-breaking technologies in fields such as artificial intelligence and materials science.

“We need something similar to Darpa, with bold moves, very quick decisions, a focus on delivery rather than selection, no geographical return, and going from basic research to prototypes and then scalable products,” he told Research Europe.

In September 2017, he and a group of like-minded people wrote up their ideas for such an intergovernmental funder. Their paper “ended up on the desk of French president Emmanuel Macron” and “to our surprise was immediately taken up”, he says.

Macron proposed creating “a European agency for disruptive innovation in the same vein as Darpa”. This was seized on by research commissioner Carlos Moedas, who had been pushing for the creation of the EIC since at least June 2015.

Loesekrug-Pietri sees a direct line between his paper, Macron, Moedas and the EIC. For a time, he and his group thought it was “mission accomplished”, he says. “We were very happy.”

The force awakens

However, the group’s feelings about the EIC soon soured. France and Germany started establishing their own civil and defence agencies for disruptive innovation, and the EIC was being set up with no links to those that the group could see—a major problem in the mind of Loesekrug-Pietri, who says national links will be essential.

He also believes the EIC will be overly bureaucratic, focusing more on spreading money evenly in quotas across member states than the actual projects. He fears it will be too slow to fund good ideas and to stop funding those that do not work. “In the way the EIC is being organised, we think it’s not going far enough. We should get rid of administrative procedures,” he says. “This will only work, at the beginning, outside traditional administrative systems, otherwise you will never have…the capacity of taking massive risks.”

A Commission source denies many of the criticisms from Loesekrug-Pietri, but he has already taken matters into his own hands, by setting up Jedi. This, he says, will be a standalone European Darpa—albeit not funding defence technologies.

Jedi has been established as an association and “soon a foundation”, Loesekrug-Pietri says, with offices in Berlin, Brussels, Paris, Rome, Warsaw and Zurich. The plan is to launch up to four technology “grand challenges” in 2019 with funding of about €30 million to €50m, followed by 15 more in 2020 with €200m.

He may hand his baby over to the EU “once its radically different methodology has been launched and protected”.

Jedi has 10 employees, “which should soon go up to 25”, he says, adding that he himself works “totally pro bono”.

The first challenges will be linked to Jedi’s “major missions”, covering energy and the environment, healthcare, human augmentation, and new frontiers in space and oceans. Forty challenges and 15 programme managers have been selected, according to Loesekrug-Pietri, with the help of 3,500 people in 14 countries.

Running costs are met by “large foundations in Europe that believe in our mission”, he says, but he refuses to disclose how much money has been secured or from where. Funding for the challenges will be provided by European regions and countries that “want to position themselves in a specific sector”, as well as “hopefully” the EU, he says.

The empire strikes back

The opaque nature of its funding means that not everybody is taking Jedi seriously. This wasn’t helped when, on 1 April, Jedi’s Twitter account posted that the initiative had secured €3bn from “visionary European leaders”. The announcement was reported as news by some media outlets, before Jedi announced that it had been an April Fool’s joke. The Brussels news website Politico EU said it would never report on Jedi again.

The Commission would not directly respond to Loesekrug-Pietri’s criticisms of the EIC, but instead highlighted the council’s progress and solid financing. “The EIC, which commissioner Moedas has been championing since the start of his mandate, is currently in its pilot phase with €2bn devoted to it and is on track to become a full-fledged reality,” it said.

Commission sources are privately dismissive of Jedi as a credible alternative to the EIC, rejecting the claim that their project will end up lacking links to member-state innovation agencies and saying it will not award funding based on quotas to member states. They deny a claim from Loesekrug-Pietri—which he stands by—that members of Moedas’s team asked Jedi staff for input on the EIC. They also say their initiative is informed by Darpa and will bring “major reforms”, implicitly questioning whether Jedi is necessary.

Loesekrug-Pietri insists his project is a serious attempt to tackle a major problem, which the EIC will fail to address. The aim is to reshape EU innovation; one way or another, Europe is about to find out how powerful its innovation push can become.

 

What is the EIC?

The European Innovation Council is intended to be a highly visible “one-stop shop” where Europe’s innovators can find funding for their ideas, with a particular focus on innovations that will create new markets. It will be open to individuals and organisations of all kinds, but at least 70 per cent of its budget is dedicated to small and medium-sized enterprises.

There will be two instruments: Pathfinder will provide grants to high-risk innovations to support early-stage R&D, including proof-of-concept work and prototyping. Accelerator will provide mainly a mixture of blended financing to help SMEs overcome revenue shortfalls.

An EIC pilot launched in 2017, through the repurposing of existing EU innovation funding schemes. It has awarded more than €730 million to more than 1,200 projects. Just over €2.2 billion has been allocated to the pilot for 2019-20.

This article also appeared in Research Europe