Innovation by design: how Eureka Clusters strengthen global value chains

Innovation policy is increasingly shaped by forces beyond technology itself. Fragmented supply chains, geopolitical tensions and the race for industrial competitiveness have pushed governments to reconsider how research and development translate into economic value. Against this backdrop, the Eureka Clusters model offers a quietly effective answer: structured international collaboration, driven by industry and aligned with market realities and national priorities.

Companies, research institutes and smaller firms work together on pre-competitive research while continuing to vie for market share downstream. The result is faster innovation, shared risk and a more efficient flow of ideas across borders and along value chains. In the well trusted environment of the Cluster communities, even competitors can work together in a project and benefit from the collaboration.

Evolving geopolitical changes and economic pressures have demonstrated the importance of collaborative science, technology and innovation beyond borders. Eureka Clusters continue to enable effective co-innovation between durable and trusted partners

Melanie Cullins – Director General, National Programs and Business Services at the National Research Council of Canada

Unlike many public research programmes, Clusters are industry-led. Their agendas are shaped by companies that understand which emerging technologies need to be developed further, what will be the market needs and where bottlenecks lie, whether in digital infrastructure, information and communication, advanced manufacturing, low-carbon technologies or microelectronics. This market orientation helps ensure that innovation moves beyond prototypes and into production, reinforcing supply chains rather than creating isolated technological successes.

Since their launch, Eureka Clusters have come to represent a significant share of the Eureka network’s activity, mobilising billions of euro in research and development investment. Their scale reflects sustained industrial demand and a recognition by governments that collaboration can amplify national innovation efforts rather than dilute them.

A notable feature of the Clusters model is its adaptability. Priorities are not fixed by rigid multi-year frameworks but evolve in response to technological change and market signals. This flexibility matters at a time when supply chains are being reconfigured under pressure from trade disruptions, regulatory divergence and climate-related constraints. By coordinating innovation across borders, Clusters help firms anticipate change rather than merely react to it.

Small and medium-sized enterprises play a larger role than might be expected in such large-scale initiatives. They account for around half of the number of participants in Cluster projects. For SMEs, participation offers access to industrial partners, international markets, and knowledge that would otherwise be out of reach. For policy makers, it provides a mechanism to spread innovation capacity across the economy, rather than concentrating it in a few large firms and create impact.

Although Eureka’s origins are European, the Clusters increasingly reflect a global reality. Participants from outside Europe contribute expertise and capabilities that mirror the structure of modern value chains, which rarely stop at regional borders. This openness allows Clusters to function as platforms for integration rather than protection, strengthening competitiveness through connection rather than insulation.

From a policy standpoint, Eureka Clusters occupy a useful middle ground between national control and international coordination. Funding remains national, preserving accountability and alignment with domestic priorities. Yet projects are embedded in a shared international framework, reducing duplication. This balance makes cooperation politically palatable while economically effective.

Clusters also translate broad policy ambitions into operational outcomes. Goals such as digital transformation, sustainability or industrial resilience are embedded in concrete roadmaps and projects, not abstract strategies. By aligning public funding with industry-defined needs, Clusters increase the likelihood that innovation spending delivers measurable returns – an increasingly important consideration as public budgets come under strain and project participants invest a lot in such projects.

The broader impact extends beyond economics. Technologies developed within Clusters contribute to cleaner production processes, more efficient resource use and digital systems that underpin modern societies. In doing so, they help shape value chains that are more sustainable and robust.

The lesson for policy makers is not only that collaboration is inherently virtuous, but that its design matters. Eureka Clusters work because they are industry-driven and embedded in real markets. They create conditions in which innovation can scale across borders and sectors and help consortia to successfully finish their projects.

The experience of Eureka Clusters suggests that well-structured international cooperation remains one of the most effective tools available to governments seeking to strengthen competitiveness, resilience, and long-term growth.