The DTVI is taking place at a critical juncture for European policymaking. Russia’s invasion of Ukraine has initiated a new geopolitical era, with the Kremlin’s extraordinary use of force spurring Europe to transition away from its energy dependence on Russia. This geopolitical backdrop follows two years of turbulence fuelled by the COVID-19 pandemic.

The moment presents a rare historical opportunity for Europe – and particularly the Central and Eastern European (CEE) region – to broadly transform its growth strategy to achieve greater sustainability and prosperity. If Europe adopts a prudent policy course, it can promote employment, enhance productivity, improve the quality of life, and transform the continent into a centre of talent and innovation.

The impetus is especially pressing for much of the CEE region (Slovakia, Austria, Czechia, Hungary, Bulgaria, Romania, Slovenia, Serbia) – these countries have attained middle-income status over the past couple decades. Yet innovation remains key if they are to further unlock their international competitiveness visà-vis global economic rivals and lay down the foundations for more sustainable and smarter future economic growth models. Regular GLOBSEC assessments corroborate the finding that the CEE region faces a sizeable innovation gap compared to its western European counterparts.

This gulf holds true for both the aggregate and granular level innovation performance of the CEE region. The GLOBSEC benchmarking tool, the CEE Strategic Transformation Index1 , and other indicators feature comprehensive metrics spanning: education outcomes and conditions, human capital quality, number of researchers, citations, knowledgeintense firm share, innovation outcomes such as patents and designs, and access and volume of financial capital. The aggregate results of these indicators speak uniformly and attest to the region’s laggard performance on innovation vis-à-vis other European regions.