Pia Kinhult is Head of Host States and Industrial Relations at European Spallation Source ERIC.

There is a lot going on in Europe right now in science and innovation. Not all is good: there is a sense of urgency in matters of competitiveness and innovation is as fragmented as everything else.

At the same time, the production of new policies coming from Brussels is hectic and the need to get new programs decided is certainly recognized. Next year risks becoming “the valley of death” as the old programs end this year and the new ones will start in 2028.

But let us look at the positive sides of all this work going on – especially with the Canada-EU Summit in Montreal this month and the discussions going on how to make the collaboration closer.

One interesting report, as part of EU’s analysis, is Divided we fall behind: Why a fragmented EU cannot compete in complex technologies (2025), by Pierre Alexandre Balland, Valentina Di Girolamo, Florence Benoit, Julien Ravet and Alexandr Hobza. The report was produced by the Directorate-General for Research and Innovation.

The authors analyze the difference between U.S. and EU regarding the price of fragmentation. This is a working paper, but the approach to try and find a new method to analyze the situation and understand what the real cost is, is very interesting.

What the authors do is introduce a new complexity-based model to analyze the price of fragmentation. They focus specifically on hub connectivity as a key metric. The dataset used comes from Organisation for Economic Development and Co-operation’s RegPat and OpenAlex datasets, from 2000 to 2023.

They reveal three critical findings. The European system is much more fragmented compared to the U.S. (not really a big surprise); hub connectivity becomes crucial for complex technologies, including AI, bio and quantum; and last but not least, the efficiency gap is observed across all technology but is most articulated in complex technology. This last aspect results in a large competitive disadvantage in today’s most strategic sectors.

The authors point at the importance of European innovation policy to target this problem in complex technological domains. With 27 national innovation strategies, funding for research and innovation often gets dispersed across the EU, while only 10 percent is managed on the overall level and borders. This fragmentation hinders EU to focus on the set of key technologies important for global competitiveness.

The whole system works on a suboptimal level and at a very high cost. Scaling complex technologies calls for strong network effects through interconnected ecosystems of researchers, companies, institutions and other relevant actors.

“Member states’ siloed strategies prevent the formation of pan-European networks, thereby limiting the cross-border collaboration and knowledge sharing needed for scaling technologies,” the authors noted. Their conclusion is that this needs to be addressed by both members states and the EU.

Let’s consider the recent Canadian visit to the EU and the discussions that took place regarding an association between Canada and the EU.

In this geopolitical era, it would be interesting to use the model to include Canada and its connectivity to be able and take the most important step together – and that is to look at China and the rest of Asia. The old world is comparing to the U.S.; the new world is comparing to China and Asia as a whole.

Canada and the EU together influencing policy going in the same direction, taking down borders and focusing development of key technology, would make a very strong partnership to take on the competition with China.

Both Canada and the EU have high level of knowledge, good universities, strong business sectors and comparable systems for funding and free trade. Open economies in democratic systems need to strengthen the case in the times we are living in. Defending our way of building prosperity in the Western world is of great importance.

On October 8, the Sweden Canada Innovation Days 2026 took place in Toronto. This year the focus was on battery value chain and advanced materials. The idea is to bring together companies, startups, decision-makers and innovation actors from both countries.

It would have been interesting if the above analysis had been made to understand both strengths and weaknesses in the two countries. The fragmentation seen in the EU has similarities in Canada. There are still hindrances between the provinces in Canada, like there are barriers between member states in the EU. It is not based on traditional customs; this is not the case neither in Canada nor EU. The hindrances are more of internal different regulations, licensing, standards and other administrative demands. The fragmentation problems in Canada and EU are very much the same problem.

The results of the referendum in Alberta on October 19 will be interesting. The outcome might give a hint if the federal government’s project “One Canadian Economy” can be realized.

The summit in Montreal October 29-30 between Canada and the EU should lead to more concrete policy changes.

With the above analysis at hand, it is very clear where to start. Both Canada and EU need to use their own strengths better and perhaps can this be one positive result of the breakdown of U.S. governance.

Divided we both risk falling; fragmentation can result in both Canada and the EU failing to keep up with global competition. Together, we can enhance each other’s strengths and help build prosperity in the Western world.

R$