A restructuring of Europe's public research institutions is vital if the continent's biotechnology industry is to compete with the United States, according to a new study.

Analysis by Italian experts suggests that a host of organisational barriers hamper scientific diversity and attempts to forge links between science and industry.

Fabio Pammolli, professor of economics and management at the University of Florence, and his colleague Massimo Roccaboni, at the University of Siena, told European ministers of their findings at a recent meeting in Stockholm.

They said initiatives designed to create a cohesive European research network by fostering collaboration between teams in different nations may be ineffective.

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Professor Pammolli said: "It tends to generate self-referential research just to capture the incentives. My feeling is the European Commission is wasting money."

The experts argue that research units should be given more autonomy to compete with one another.

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The study focused on the biomedical patent output of leading public research organisations. This highlighted regional clusters where bioscience was innovated and exploited.

In the US, there were strong networks of collaboration with a great diversity of research in each region. Europe's clusters were more fragmented and tended to concentrate on particular areas.

This was partly because most European research funding was distributed according to competing national priorities while leading public institutes remained too specialised and hierarchical.