Social mobility and public R&D policies: cornerstones of innovation for societal advancement

This year’s Nobel Prize winners generated more-than-usual controversy and debate for a number of reasons that lie beyond the scope of this article. While discussions were heated, an excellent paper on the social origins of Nobel Prize winners was also widely discussed for its striking conclusion: A Nobel laureate’s father typically belongs to the top 10% of their country’s income distribution. Approximately 50–60% of laureates come from families in the top 5% income bracket.

This is striking. The educational system has failed to create equalities of opportunity that allow bright minds from disadvantaged financial backgrounds to show their abilities.

Evolutionary biologist Stephen Jay Gould once said, “I am, somehow, less interested in the weight and convolutions of Einstein’s brain than in the near certainty that people of equal talent have lived and died in cotton fields and sweatshops.”

The ability to drive and harness human potential such as intelligence, talent and hard work is extremely important for economic growth and requires fair redistribution and widespread social mobility.

Things on this front are far from ideal.

Social mobility in the EU and the U.S. need a major boost. Even though many European countries consistently rank in the top places on indices of social mobility, this is not the case for many others (for example, Italy, Greece and Bulgaria). Wages across Europe have largely stalled, leaving household incomes increasingly insufficient to lift people out of poverty. The EU reports that over 20% of its population faces the risk of poverty or social exclusion.

In the U.S., where many have traditionally been able to surpass their parents’ earnings, each new generation is now struggling to achieve this upward economic mobility.

The World Economic Forum, using data from Opportunity Insights and defining social mobility as the likelihood that a 30-year-old in the U.S. surpasses their parents’ earnings (based on their parents’ income percentile), has showcased that social mobility has never been worse in U.S. history.

Several factors could explain this path, from slow increases in real wages to a decline in the leverage and importance of union membership and social dialogue.

However, what I want to stress is that there is an economic case to be made for the need to reduce these inequalities of income and opportunity.

As argued in WEF’s Global Social Mobility Report, when obstacles like restricted access to education, fair wages and healthcare are minimised, a greater number of individuals can participate meaningfully in the economy. This increased engagement can drive GDP growth, with estimates indicating that a 10-point rise in social mobility could enhance GDP by 4.41% by 2030, relative to 2020.

Public policy on research, technology and digital transformation is of utmost importance for fostering innovation, particularly in the digital era, and has led to different results in the United States and Europe. Even in European countries with high levels of redistribution and significant social mobility, we observe a brain drain, with talent, ideas and businesses moving out of Europe and towards the U.S. Letta’s report also highlighted how the same holds true for northern Europe, which attracts top talent from southern Europe, leading to new inequalities inside the Union and to an unjust distribution of human capital. Therefore, achieving specific innovation outcomes requires not only a fairer income distribution and improving opportunities for social mobility but also targeted policies in both the public and private sectors that support and focus on areas crucial to the needs and demands of our times, as the Draghi report rightfully stresses.

Closer cooperation of research policies and institutions at a European level, reduced bureaucracy and European collaboration in strategic industrial sectors (defence, pharmaceuticals, artificial intelligence) demand swift and effective action. Europe lags significantly behind in high-tech sectors, and the need to close this gap is masterfully addressed in Draghi’s report.

The foundation of everything is education. Tackling inequalities, promoting social mobility and implementing policies for research and technology to achieve beneficial outcomes for the people of Europe require a fundamental rethinking of secondary and tertiary education systems. We must explore how to effectively integrate tools from artificial intelligence and machine learning, as well as innovation itself.

There are three main channels of intervention that member states and EU officials can use in order to achieve this: schools, teachers and universities.

Regarding schools, the EU, using the method of open cooperation, could play a more active role in inspiring and supporting member-states to boldly reform their curriculum in order to be better aligned with the skills most necessary for a successful and resilient life in the context of the 21st century. This includes adding classes on how to properly and ethically use AI in daily life and in classwork and programming skills. AI can help limit inequalities of access to education, exactly as the internet revolution did in the early 2000s.

Another possible example is introducing nationwide innovation competitions that are accessible to all schools and students,  not just private schools. Access to these must be made possible to all interested students, regardless of their school’s resources.

Regarding teachers, the same holds true- they ought to be encouraged to be trained in acquiring all relevant technological skills that will enable them to adapt to the new world of education and learning. The EU can play an important role in encouraging the creation of networks of teachers and schools, having as a primary goal the diffusion of ideas and innovative pedagogical practices that include technological advances.

For universities, it is of fundamental importance that the EU enhances their cooperation with private technological incubators in order to create a new ecosystem able to encourage both financial and strategic innovation in universities.

One would only be amazed to hear how many high-stake companies were created when their founders were students at American universities. We have very limited European counterexamples, and there are many things that ought to be changed on this front.

I propose that this European project (networks of universities, private incubators and hubs) can act as an accelerator of growth and also as an investor for capable entrepreneurs. This endeavour could include angel investors, venture capital funds, researchers and social partners. This includes providing local mentoring schemes, creating networking event opportunities for aspiring students with market leaders, providing funding and lending opportunities, and hosting relevant workshops.

Now is the time to take the next step and encourage innovation that can lead to new products, services, jobs, and even lead to the creation of new sectors in the economy. Education reform is an important channel in the EU’s effort to close the digital and innovation gap that separates it from the U.S.

There is a line in Plato’s Republic that perfectly illustrates the situation we live in: “Our need will be the real creator,” implying that necessity is the mother of invention. Europe has a great need to face the challenges of our time because if it falls behind its major competitors, the outcome of which will be catastrophic not only for its citizens and member states, but for the entire planet.

The views expressed in this #CriticalThinking article reflect those of the author(s) and not of Friends of Europe.