By Juliana Queiroga
European research institutions produce world-leading, breakthrough technology that should yield commercial advantage. Yet, too many innovations fail to reach the market successfully. The core issue is not funding or technical skill, but a fundamental disconnect: EU organizations’ innovation processes are mismatched with what global markets actually demand.
European research institutions consistently rank among the world’s best, producing breakthrough technologies that should translate into commercial advantage.
Yet a troubling pattern has emerged: too many of these innovations either never reach the market or arrive too late to capture meaningful market share.
While policymakers debate funding levels and regulatory frameworks, the real bottleneck lies in how EU organizations approach the messy, unpredictable process of moving from the lab to marketplace.
Having observed technology transfer projects across multiple continents, I’ve witnessed firsthand why Europe struggles with what innovation experts call the “valley of death“—the gap between new products being launched and achieving market fit and profitability.
The problem isn’t lack of technical capability or insufficient investment. It’s a fundamental mismatch between how European institutions conduct innovation and what markets actually demand.
The Academic-to-Market Disconnect
European R&D institutions excel at solving complex technical problems but often operate in isolation from the people who will ultimately use their solutions. This creates a dangerous feedback loop: researchers optimize for technical elegance rather than user experience, assume market needs rather than discovering them, and design for the five percent of early adopters rather than the mainstream market that drives commercial success.
Often-cited research tracking innovation adoption patterns led by Harvard Professor Clayton Christensen has shown that 95% of new products and services fail in the marketplace—a statistic that should give pause to any organization assuming their technical breakthrough will automatically find commercial success. Yet many European research teams continue developing solutions without meaningful engagement with potential users until late in the development process.
Consider the challenges facing autonomous retail technology, one of Europe’s more ambitious innovation sectors. When testing these systems in controlled lab environments, everything appears to function smoothly. But introduce real-world complexity—children grabbing items, couples shopping together, users with different technical comfort levels—and accuracy rates plummet. These aren’t edge cases; they represent consumer behavior that laboratory testing simply cannot replicate.
The disconnect becomes even more pronounced in cross-border technology transfer. A Portuguese startup developing medical diagnostic tools recently discovered that their sophisticated sensor technology failed basic usability tests with actual users.
The app provided no guidance during critical procedures, leaving users uncertain whether they were performing tests correctly. Android compatibility issues prevented potential users from even accessing the technology. These weren’t minor technical glitches—they were fundamental barriers that no amount of additional R&D investment could solve.
The innovation problem extends beyond technical capability into organizational culture. Many European institutions struggle with “innovation silos”—rigid departmental boundaries that prevent the cross-functional collaboration vital for technology transfer. Teams isolate themselves: legal blocks user testing, operations resists real-world trials, and innovation teams work apart from the business units.
This siloed approach contrasts sharply with international best practices. Asian firms integrate user feedback and embrace failure as learning, while American companies normalize rapid, user-driven iteration. European organizations, conversely, often treat essential user testing as a luxury.
Furthermore, leadership often stifles creativity. Successful innovators lead by providing answers, shutting down creative exploration when teams suggest new approaches or question assumptions, redirecting them toward predetermined solutions.
Europe’s innovation challenges are escalating due to fierce global competition. Chinese companies benefit from state-coordinated strategies and integrated supply chains that accelerate technology transfer, while American firms leverage sophisticated venture capital to fund rapid iteration and scaling. Consequently, European companies are increasingly caught between slow academic research timelines and fast commercial market demands.
The electric vehicle sector highlights this urgency. European manufacturers struggle with cost competitiveness, yet by 2024, one in four EVs sold in the EU was Chinese-made, a dramatic shift from near-zero market share five years prior.
This competitive pressure is compounded by inconsistent European innovation policies. Varying national frameworks for investment and technology transfer weaken the collective bargaining power needed for critical, coordinated action.
Rethinking Technology Transfer
Successful technology transfer requires fundamentally different approaches than traditional European R&D practices. Instead of linear progression from R&D to the market, effective innovation demands iterative cycles that integrate user feedback throughout the entire process.
This methodology shift involves several key changes:
- First, organizations must budget for iteration and accept that early versions will require significant modification based on user feedback.
- Second, they must engage with real users—not friendly stakeholders or idealized personas—at every development stage.
- Third, they must view failure as learning rather than incompetence, creating safe environments for experimentation and rapid adjustment.
The organizational implications extend beyond product development. Companies must break down innovation silos that prevent cross-functional collaboration. They must train leaders to ask questions rather than provide answers, creating space for creative exploration. They must establish clear communication about strategic direction and maintain flexibility about implementation approaches.
A Path Forward
Three recommendations emerge for European organizations seeking to improve their innovation-to-market success rates:
- Prioritize user engagement over technical perfection: The most sophisticated technology means nothing if users can’t or won’t adopt it. Regular testing with real users, in real environments, reveals problems that laboratory conditions miss.
- Create learning-oriented cultures: Organizations that treat failure as valuable feedback iterate faster and achieve better outcomes than those that demand perfection from the start. This requires leadership changes as much as process improvements.
- Invest in cross-functional collaboration: Innovation happens at the intersection of different disciplines and perspectives. Breaking down silos between research, operations, legal, and business development accelerates problem-solving and reduces implementation friction.
European organizations face a critical choice. Those that master effective technology transfer will gain significant advantages in an increasingly competitive global market.
Conversely, companies that persist with outdated innovation approaches will struggle to maintain relevance in sectors where they once held leadership positions.
Europe’s research institutions produce excellent work – but converting that excellence into commercial success requires different capabilities than many organizations currently possess.
The smart organizations that recognize this gap and take concrete steps to address it will shape competitive dynamics and innovation breakthroughs for years to come.
Juliana Queiroga
