Published jointly with Ernst & Young, this report proposes a new approach to EU innovation that aims to improve its effectiveness and reduce administrative burdens for companies relying on EU funding channels. The analysis is backed by a survey of 680 business leaders from 15 EU member states to obtain their perspective on the EU’s innovation policy. Chief among the report’s recommendations are the following: Governments should act as leaders and investors by creating the main building blocks of an innovative environment – world-class infrastructure, a high-performing education system, and research and innovation-friendly legal rules. Governments should create funding and facilitate initiatives to strengthen links between researchers, entrepreneurs and private investors Government has the key task of ‘nudging’ existing innovation efforts towards long-term policy goals. This should mostly occur through the strategic use of public procurement.