The European Union could enjoy a bigger research and innovation budget after 2020 – but universities might lose out to businesses as the emphasis of funding switches, senior EU figures have suggested.

Jyrki Katainen, European Commissioner for jobs, growth, investment and competitiveness, told a conference that he would like to see the proportion of the EU’s budget set aside for research and innovation rise from the current 8 per cent.

Debate in Brussels is intensifying over how to fund the successor to the EU’s current research and innovation package, Horizon 2020. The European Parliament has called for the next framework programme to be worth €120 billion (£106 billion), a 50 per cent increase on the current package.

Asked about this figure, Mr Katainen said that he thought it was “a good target” while noting that cuts would have to be made elsewhere.

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However, he hinted at a shift away from grants – which fund basic research – to loans and equity investments to stimulate new companies, in an attempt to help the EU catch up with capital markets in the US. For organisations that preferred grants, “the next budget will most probably be smaller than the existing one”, he said.

Some EU structural funds, which tend to go to poorer member states, could be refocused on research and innovation, he added.

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Then there is the impact of Brexit – the loss of the UK will leave a “hole in the budget”, he said, meaning that the EU would have to reconsider its funding priorities “from scratch”.

The conference, New World Order: Science, Technology & Trade: Shaping the Next Framework Programme, held in Brussels on 27 June, also heard details of how Horizon 2020’s remaining €30 billion will be spent between 2018 and 2020.

Robert-Jan Smits, director general the European Commission’s Directorate General for Research and Innovation, said that it would focus on “impact, impact, impact”. “What have all these investments over the past few years brought?” he asked.

Security, digitising industry and the low-carbon economy would also receive special attention through project calls, he explained.

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And the mooted new European Innovation Council would distribute €2.6 billion during this period, he continued, distributing funds to companies with the advice of venture capitalists and business investors.

Europe had failed to produce disruptive new companies, like Google, Amazon and Uber, that created entirely new markets, he warned. Current funding models in the EU failed to back “crazy ideas”, he said, adding that it should be the job of public funding to help such “risky” ventures.

david.matthews@timeshighereducation.com