ERC science and invention: Does ERC break free from the EU Paradox?

We explore the relationship between government-supported science and its translation into inventive activities, focusing on the European Research Council (ERC), the principal funding mechanism for top-quality research in Europe. We show that, compared to similar European research, ERC science accrues a greater number of patent citations. Moreover, patents that draw upon ERC research are of superior quality, measured by forward citations. Compared to similar European research, inventive activities arising from ERC science are more likely to be housed within universities and public research organizations. In absolute terms, however, US organizations, especially US companies, still lead in deriving the greatest benefits from ERC science. The significant disparity in corporate sector patenting linked to ERC science in the US and EU is fueled by inventions undertaken by startups, highlighting the crucial role of a dynamic startup landscape in driving inventions at the frontier of science. Overall, our findings suggest that ERC science continues to face challenges associated with the so-called European Paradox. •ERC science exhibits a higher spillover effect into inventions compared to similar EU science.•Inventions resulting from ERC science are more likely to originate from universities than those from similar EU science.•US companies, especially startups, contribute significantly to the inventions based on ERC-funded research.•The EU lags behind in deriving benefits from science due to the absence of a vibrant startup ecosystem.•ERC science continues to grapple with challenges associated with the so-called European Paradox.