In a globalised economy and at a time of rapid change, the ability to innovate is a key factor in maintaining European companies' global market share. Investment in research is crucial, but does not stretch far enough.
The EU also needs to create an environment that is conducive to innovation and actively support the SMEs that are the backbone of the European economy.
There are 21 million SMEs accounting for around 99 per cent of all European companies, and they provide two thirds of all private sector jobs - 133 million European citizens. They contribute to over half of the total added value created by EU businesses. Nine out of ten SMEs have fewer than ten employees.
While in one way this could be viewed as representing an obstacle in a globalised economy dominated by large multinationals, the flipside is that SMEs are an as yet-to-be fully-exploited source of innovation and vitality.
A simple glance at the global environment tells us there is an uphill road ahead: the global innovation performance of the US, Japan and South Korea is currently higher than that of the EU.
According to the 2015 innovation union scoreboard, our competitors are ahead in terms of the share of research and development (R&D) in the private sector, as well as the number of public-private partnerships, patents registered and the proportion of the population having completed a tertiary education.
In other words, US, Japanese and South Korean companies invest more in research, collaborate more with public institutions for their R&D, and can rely on a more highly-trained workforce, than their European counterparts.
The EU now needs to narrow the gap between its own performance and that of its international competitors. Our lagging behind has deepened in some key contextual areas such as innovation, and access to credit.
The data shows that, even if the EU's capacity as a whole remains stable in the private sector, there will be a drop in the number of innovative companies, private investment in venture capital will be reduced and even SME innovation, patent applications and exports and sales of innovative products will decrease - a depressing picture, with the exception of a few countries such as Sweden, Denmark, Finland and, to a certain extent, Germany.
The numerous institutional bodies that contribute to providing an environment in which SMEs can operate frequently lack the necessary political will and awareness of the difficulties of doing business and implementing innovation in Europe, the most striking examples of which are the many obstacles that still impede the creation of a genuinely single European digital, capital and energy market.
The most effective way of encouraging innovation and supporting SMEs is to create a single, free, open economic environment where good ideas can quickly find investors willing to invest in them, and where there is a huge market of consumers willing to buy.
There are many barriers that need to be removed, as the unwillingness of governments and telecommunications companies to introduce zero roaming charges illustrates, resistance is even greater.