Supporting an innovative environment Fourth, to fully exploit productivity potential, the labour and product market reforms I just mentioned need to be accompanied by policies that help innovation and technological change. This includes, inter alia, measures to support innovation through higher investment in research and development (R&D).
The immense importance of this issue, and the great opportunities provided by investment in research, are also increasingly appreciated by European governments and firms. A large majority of Member States now have specific strategies in place for stimulating both the quantity and quality of R&D activity.