Speaking as one of those Europhiles, EU grants are on average a pretty great thing, you can see the effect first hand just walking around any random town with EU project plaques everywhere. If anything, the EU itself is doing the most to fund practical projects and the excessive bureaucracy does serve as somewhat of a safeguard against the rampant embezzling that is otherwise the norm.

The problem with innovation here is extensive, both legal and cultural. Some countries are downright hostile to startups. In the US it takes what, $200 to open an LLC? In Germany you better have 25000€ ready for an equivalent entity. The amount of regulations one has to adhere to is far more extensive, taxes are borderline absurd, there's basically no venture capital to speak of, so any actually successful company is immediately absorbed by some American megacorp with fat stacks laying around (e.g. Wolt Delivery bought by DoorDash).

Most of the people who lived under socialist systems also grew up in a culture where entrepreneurship was the pinnacle of egoistic greed which probably doesn't really help.