Crossing the Valley of Death: Societal Drivers of Bioeconomy Value-Added

Although the European Union positions the bioeconomy at the core of its sustainability transition and the European Green Deal, the cross-country distribution of bioeconomy value-added associated with mission-oriented public R&D support remains highly uneven. This paper investigates how national researcher capacity (as a proxy of absorptive capacity) shapes the macroeconomic effectiveness of bioeconomy-oriented public R&D support, and how societal climate-oriented environmental concern acts as a direct structural driver of bioeconomy value-added. Using a panel dataset of 27 EU Member States from 2008 to 2020, the study constructs an original bioeconomy-specific measure of government budget appropriations for R&D (GBARD) and estimates two-way fixed-effects models with Driscoll–Kraay standard errors to account for cross-sectional dependence. The findings reveal a clear capacity-dependent conditional moderation effect: public R&D support is significantly associated with higher bioeconomy value-added only when a critical mass of researcher capacity is present. Sectoral disaggregation demonstrates that business enterprise researcher capacity acts as the primary transmission channel linking public funds to the market, whereas higher-education capacity shows no statistically significant short-to-medium-term moderating effect, consistent with the academic research commercialisation time lags documented in the literature. Additionally, societal climate-oriented environmental concern is positively associated with bioeconomy value-added in the baseline models, consistent with its role as a demand-side factor fostering receptive conditions for bio-based transitions. The study concludes that increasing mission-oriented R&D funding alone is likely insufficient; to successfully cross the “valley of death,” public R&D should be accompanied by complementary policies that build private-sector absorptive capacity and cultivate green market demand.