Specific Challenge:The growing attention given to research and innovation over the past decades has resulted in increased amounts of public funding being channelled to research and innovation, but also to a variety of policies and funding programmes being put in place in Europe, in order to maximise the quality and impact of this funding.
These policies have been wide in scope, ranging from basic research all the way up to supporting the market introduction of innovation and used a variety of instruments, oriented not only towards the production of knowledge and innovation, but also towards optimising the processes by which innovations are generated (including Co-Creation).
Investments in R&I must be smart and efficient and obtain the most value for every euro invested. This requires clear strategies for investing in R&I coupled with quality R&I programmes and strong institutions capable of implementing these programmes in close connection with the business sector and other stakeholders such as civil society. In addition, there is a clear need to improve the overall framework conditions for transforming R&I investments into tangible results, whether as new products or services or in terms of less tangible impacts such as improvements in the quality of life or inclusion.
The challenge for policy makers is to design policies and programmes with targeted funding to address well identified bottlenecks and which are adapted to the specific context of the research and innovation system in question. This is key to improving the efficiency of the European research and innovation system as a whole, as was stressed by the Commission in its Communication on ‘Research and innovation as sources of renewed growth’. 
Designing such policies and programmes requires a sound evidence base around the performance of research and innovation systems, the impact of research and innovation policies, the impact of research and innovation on economic growth, job creation and societal progress, and on the way in which public funding and policies can influence performance and impact. The Commission regularly publishes authoritative reports (e.g. the Innovation Union Scoreboard and the Innovation Union Competitiveness Report) which contribute to this evidence base, but given the increasing importance of research and innovation and recent evolutions in this field, the analysis regarding these issues needs to become more sophisticated.