What opportunities does Europe have to lead in advanced materials?

While showing strong performance in innovation in many traditional technologies, EU’s competitiveness in advanced materials can be improved by leveraging existing capabilities, according to a study. It finds that opportunities to be harnessed lie in areas such as biomaterials, glass, and cements.

Advanced materials are designed materials that have superior properties or are designed for specific functionalities, such as thermal stability or electrical conductivity, within others. They are crucial for the adoption of renewable energy sources, improve the efficiency of industrial processes, enable breakthrough innovations, and create new opportunities for sustainable growth. Their applications are spread across different sectors, ranging from biotechnology to construction, from energy production to transportation.

The findings of the study are published in the report Path to Innovation: An Economic Complexity analysis of technological perspectives in the EU – Advanced Materials. It provides an analysis of EU's ability to innovate in advanced materials by identifying existing capabilities and opportunities to drive innovation and growth.

Compiled by the JRC and the Commission’s Directorate-General for Research and Innovation (DG RTD), the report presents a comprehensive overview of the EU's current and potential technological capabilities in advanced materials. It supports the development of the forthcoming Advanced Materials Act by identifying technological areas where Europe can enhance its leadership. 

The report also provides 27 country fiches with a general overview of the performance and potential for each Member State. The fiches include patent shares, patent shares in advanced materials, technological space and comparative advantage. 

Technological areas where Europe could lead

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Global patenting activity has surged since 2000, with a 40% increase in filed patents by 2021. This growth highlights the importance of cutting-edge, patentable technologies in shaping global competitiveness. The US, China, and the EU dominate the global technological landscape, reinforcing their positions as innovation leaders.

While the EU has maintained its leadership in traditional technological domains related to manufacturing industries, China has rapidly improved its innovation performance, with significant increases in patenting activity. This highlights the need for EU action to prevent decline and stay ahead of competitors. 

As highlighted in the top-left figure, which compares current vs. potential specialisation (TPP, Technological Progression Probability) of the EU in different technological domains, the leadership position of the EU is at risk in technologies related to mechanical engineering, textile and paper, and fixed constructions. Opportunities can be found in human necessities and physics domains.

This analysis concludes that a targeted advanced material strategy, aiming to promote a technology where the EU is relatively weak, could leverage pockets of competences in the Member States or their regions. The planning could benefit from the regional smart specialisation strategies by better targeting hotspots of innovation.  

EU’s position in advanced materials

Although the EU currently lags behind the US and China in overall advanced materials patenting, the report finds that the EU has sufficient technological capabilities in mid-tech fields, such as textiles and construction, to close the innovation gap in certain domains, such as biomaterials, cements, and glass and ceramics materials. Using the economic complexity approach, a data-driven method that uses economic output data such as patent data, the authors of the report forecast the probability for the EU to innovate in these three technological domains  to be higher than 50%. 

However, Europe’s strength in mid-tech industries may not provide sufficient exposure to more disruptive technologies crucial for digital transformation, such as nanotechnologies, an area where China currently holds technological leadership. Opportunities in such technologies, including in micromaterials, are currently limited and especially concentrated in specific regions.

Background

The Competitiveness Compass has identified three key pillars to restore EU dynamism: closing the innovation gap, decarbonising the economy, and reducing dependencies. This study aims to inform policy discussions on achieving these goals by assessing the EU's technological capabilities in developing new, frontier technologies, and uncovering untapped opportunities to boost Europe's competitiveness.

Methodology

The analysis is developed around 8 Cooperative Patent Classification (CPC) on technological domains plus advanced materials and related 11 subclasses of analysis: nanomaterials, micromaterials, thin films, biomaterials, polymers, composites, metals, glass, fibres, cements, and miniaturisation technologies. 

Results are based on an economic complexity analysis of European patent data according to the CPC over the period 2000-2021. 

Economic Complexity is a data-driven approach that uses economic output data, such as exported products and patents, to infer the productive and technological capabilities of economic actors. Like in a scrabble game, where players use letters as the building blocks for words, capabilities are the building blocks of the innovation process, and they can be combined to innovate. The method is useful to map the activity space of locations and anticipate future diversification, providing a useful tool to support investment decisions beyond more standard economic metrics.

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Path to innovation: an Economic Complexity analysis of technological perspectives in the EU