What is the macroeconomic impact of the Horizon Europe programme in the European Union? – A quantitative assessment

A recently published JRC analysis carried out in collaboration with DG RTD provides a quantitative assessment of the impact of the Horizon Europe programme in the European Union.

The Horizon Europe programme

In June 2018, the European Commission published a proposal for the establishment of Horizon Europe, the €100 billion programme that will succeed Horizon 2020 for the next programming period (2021-2027). The proposed programme uses a three-pillar structure, with each pillar (open science, global challenges and industrial competitiveness, and open innovation) interconnected with the others to strengthen the European research area.
The macroeconomic impact assessment has been carried out with the spatial dynamic general equilibrium model (RHOMOLO) developed by the Regional Economic Modelling team of JRC Seville in collaboration with DG REGIO (see Lecca et al., 2018).

It analyses and compares several alternative policy designs to a baseline scenario in which the discontinuation of the EU R&I programme was assumed. This strategy permits to estimate the effects of the programme on both GDP and employment.

The model results

RHOMOLO considers two different channels: the demand channel and the productivity channel.

The former appraises the effects of the rise in public spending in support to R&I, with consequences both on private and public investments. The second channel relates to productivity. It has to do with the knowledge accumulation generated by the R&I investments, with long-term effects on economic growth.

The analysis concludes that Horizon Europe is likely to contribute positively to the EU GDP and employment. Although the magnitude of the effects differs depending on the exact design of the policy, results suggest that the EU GDP may be higher by up to 0.5% in 2030 (with almost 200,000 jobs created) thanks to the Horizon Europe programme.

Further information

Policy Insight on the RHOMOLO impact assessment of Horizon Europe
Full Technical Report containing the RHOMOLO analysis of Horizon Europe