The European Union’s 28 member states account for less than 20% of world GDP and around 20% of world trade (excluding intra EU trade). The EU contributes to the world's R&D on a similar order of magnitude (23%). The Union’s recent economic performance has been disappointing, with low economic growth and low labour productivity increases since 2009 . The unemployment rate, especially for youth, remains high in many EU member states. Weak economic and financial conditions are weighing on the EU’s future growth prospects and on its ability to address societal challenges (e.g. ageing, security, migration, climate change, etc.). EU member states are at different stages of development in their STI capabilities, and these cross-country differences have been increasing since 2009 (see chapter 4). Stagnating countries might fall further behind, while global innovation leaders might keep progressing. A widening gap between countries could hamper the EU's capacity to improve its overall innovation performance. As a result, EU Regional Policy has emphasised the importance of R&D to support sustained economic development and EU Research and Innovation Policy has been reinvigorated by focusing it on the three strategic priorities: Open Innovation, Open Science and Open to the World. The EU’s Horizon 2020 (H2020) Framework Programme for Research and Innovation (2014-20) is the funding programme implementing the EU's research and innovation policy. With a budget of nearly USD 101 billion PPP (77 billion euros, not including Euratom), H2020 is one of the few programmes for which the EU has significantly increased financial efforts. H2020 increased the EU R&D budget by nearly 30% in real terms as compared to the previous programming period (2007-13). A special focus has been put on improving the capacity of the EU’s STI system to address societal challenges.