Wroclaw in south-west Poland, Sant Cugat del Valés near Barcelona, Budapest, and a joint application by Vienna and Bratislava are shortlisted to become the location for the institute, which will employ 60 staff.

But it is the prestige attached to the institute that each European location believes will be an important weapon in the battle to attract high-tech investment.

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European Commission president José Manuel Barroso said: “The EIT will facilitate and enhance partnerships and co-operation between the worlds of business, research and higher education across the EU, helping to boost jobs and growth.”