Europe is lagging considerably behind the United States in research and innovation, a strategic and essential factor in the development of the new economy. Three major indicators confirm that this lag is getting worse: in Europe the numbers of researchers and trained innovators are declining; Europe is no longer attracting researchers from elsewhere and finds itself unable to retain its own; the funding of research and development, particularly in companies, is weak; the difference between the situation in United States and that in Europe is widening every year. Moreover the multilateral arrangements for supporting research and development in Europe are in crisis: the framing programme managed by the European Community is no longer appropriate. Its procedures are difficult to comprehend, expensive to access and too long; they are frequently quite unsuitable for companies, particularly small and medium-sized enterprises, and for many laboratories; the Eureka initiative, which is much appreciated by its users for its speed, ease of use and confidentiality, is declining as a result of insufficient contributions from its partners. A new impetus and general mobilisation are necessary. Fortunately, this view is partly shared by the European Commissioners most concerned: Philippe Busquin and Erkki Liikanen. Based upon a review of the causes and effects of these phenomena, the report by Pierre Laffitte, the founder of Sophia Antipolis, puts forward novel proposals that are aimed at reinserting European research and development and its markets into the "new worldwide economy".