National recovery packages, innovation, and transformation

The COVID-19 pandemic hit Europe hard, and measures to contain the spread of the COVID-19 have resulted in a deep recession in 2020. To fight this recession, national governments have mobilised considerable funds to support the economy and prepare for a rebound in the following years. In addition to national efforts, the European Commission has initiated NextGenerationEU, a 750 bn EUR package to support Europe’s recovery, and the Recovery and Resilience Facility (RRF) as its biggest component. The aim of this package is to make Europe’s economies more resilient to future challenges while supporting them in the green and digital transitions.
Immediate support for the economy is important to stabilize employment and prevent vicious cycles that appeared during the Great Depression of the 1930s. However, these measures may also hamper change for good when they only aim at restoring the status quo before the crisis. Times of crisis are always times of transformation and innovation – this may also be true for the COVID-19 crisis of 2020 and 2021.The crisis may provide a good environment to push for transformative innovation. The rapid development of vaccines against COVID-19 is a strong sign for the adaptability of national innovation systems to new challenges, and the sense of urgency for change is high. However, one may also ask if national funding and the EU recovery packages are agile enough to support new ideas, new firms and new business models, as potential triggers of transformation.
Against this background, the project will analyse Austria’s response to the economic effects of the crisis from an innovation and transformation perspective. In particular, the project will look at the recovery packages from the perspective of the ‘protect-prepare-transform’ framework proposed by the EU Expert group on the Societal and Economic Impact of Research and Innovation (ESIR, 2020): the need to protect the overall wellbeing of individuals during the crisis, the need to prepare for future pandemics and crises and the need to transform the European economy and society towards more resilience against future crises. The analysis will include national funds as well as Austria’s Recovery and Resilience Plan (RRP), i.e. its proposal to the Recovery and Resilience Facility (RRF) of the European Commission. This multi-level nature of the recovery measures is further complicated by regional initiatives to mobilise further resources such as EU Structural Funds to fight the COVID-19 crisis.