HOW CAN EUROPE BE MORE INNOVATE?
     
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As a follow up and following new developments, a second summit on innovation was held in May 2012. To generate economic growth, creation of a successful innovation policy is integral to this objective. Examined was what needs to be done to enable the public and private sector to pioneer breakthrough innovations. With policy-makers unable to use large amounts of public money to relaunch their economies, industry players, governments and citizens must engage in a continous reinvention of their activities by finding new ways to share and develop resources. Only this combination of factors will deliver sustainable growth.

Combined strength of EU governments and institutions, when effectively partnered with the business community, can stimulate and foster innovation and entrepeneurship. A new three-tier approach was proposed that aims to improve effectiveness and reduce administration for companies wishing to rely on existing funding tools and other initiatives by EU-institutions.

The power of simplicity: Streamlining the EU innovation policy. While many countries in the world make efforts to reach a sustainable growth, the need for a focused approach of innovation policies is more and more obvious in the European Union. Studies that have been carried out so far have confirmed that innovation is the main source for competitive advantage, technological change and economic growth.

A series of programs and projects has been developed within the EU community to stimulate innovation, which bring just as many implementation challenges. Ernst & Young and the renowned think thank – the Centre for European Policy Studies – have carried out a research on 680 business leaders from 15 EU member states, in order to identify these challenges and the perception on the EU innovation policy. 
Jimmy Wales: Imagine a world in which every single person on the planet is given free access to the sum of all human knowledge The Power of Simplicity study has revealed that only 27% of respondents, many of them decision makers in the private sector – presidents and executive directors are aware of efforts undertaken by the European Commission on the innovation path. 82% believe that community policies in this field are fragmented and poorly coordinated. Moreover, 69% of respondents think there is a disparity between the EU policy and the specific needs of various industry sectors. The global competition and the imperative to keep Europe a pioneer in certain strategic fields placed under the innovation umbrella orients more and more political decision factors and business leaders towards innovators.

With the keynote speech of Barroso, the introduction of the study by CEPS, the presentation by EPS of an advanced fuel cell systems designed to automatically generate, store and provide energy when and where it is needed, a panel debate and the keynote speech by Jimmy Wales, founder of Wikipedia, the conference provided not only insight in the challenges as the complexity of innovation policy, the R&D gap and the sectoral competitivesess and IT issues, but also recommendations:

- governments should act as leaders and investors by creating the main building blocks of an.innovative environment;
- governments should create funding and facilitating initiatives to strengthen links between gaps;
- governments has the key task of "nudging" existing innovation efforts toward long-term policy goals.

Keynote speech Herman van Rompuy
The next generation innovation was also discussed during a summit 5 May 2011 with government, business, industry, academics, scholars and civil servants. During this summit, Herman van Rompuy stressed during the keynote speech that we need a European Research Area by 2014.

'It will be a genuine single market for knowledge, research and innovation. It will create growth and well being. We will also need major joint efforts, time, political and industrial support here. The necessity is uncontested. Economic theories are on the same page (for once !) in their conclusion that technological innovation is a key contributor to long-term well-being. Innovation is needed to create economic growth, but will also help us to meet challenges of ageing populations, of world hunger, of the environment. The existing barriers for a real European Research Area have to be lifted. I think we all know where the problems are in general terms. It is certainly not a problem of inaction. Efforts to support innovation at EU and national levels have been numerous. But efforts remain often too fragmented and not accurate enough'.

Now there are profound social and economic shifts, such as the rising economic power of the emerging markets and an aging population in many developed markets, demand a new, more competitive approach. In order to generate growth and prosperity, Europe needs a policy that is market driven and firmly supports an environment of innovation, and transforms these new ideas into new businesses and solutions.

The website 'THE FUTURE of EU INNOVATION POLICY to SUPPORT MARKET GROWTH' presents our most recent thinking on the subject of innovation, from thought leadership to multimedia presentations and more as part of our overarching Eurozone initiative. Together with the Centre for European Policy Studies (CEPS), a renowned think tank based in Brussels, a was undertaken among industry experts that focused on EU innovation initiatives and identified changes that would lead to more responsive and dynamic innovation policy.

The report of this study asks, what would this policy look like? What needs to be changed for policy to be more effective and create growth? How can innovation policy better consider industry needs and evolving market trends at a very early stage of formulation?

Below are some of the highlights.

Compilation video

Europe and the world: larger lags, smaller leads:
Over the past two decades, the gap between Europe and other regions of the world in terms of growth and competitiveness has been constantly widening. You can see how Europe lags in the following
indicators:
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Education: Today in the EU, one person in three aged 25–34 has completed a university degree, compared with more than 50% in Japan and 40% in the US.
- Patents: Although Europe has taken the lead in proposing ambitious emission reduction targets, the technologies that Europe and other regions of the world will employ to achieve these target will not be European.
- Private R&D spending: European basic research still competes, in many traditional sectors, with other regions of the world. However, in terms of bringing innovative products to market, Europe compares poorly next to its global competitors
.

EU innovation: past mistakes, current prospects:
It is not the quantity of public funding of R&D and innovation, but rather its quality that hampers EU’s economic recovery. This undesirable result can be seen as a combination of several factors.
- Responsibility for innovation policy is badly distributed between Brussels and national capitals.
- EU budgets have not funded regional innovation policies well. Additionally, these policies aren’t well aligned with the European Commission’s mainstream research and innovation policy.
- Within the European Commission, several Directorates General, DGs, and sub-offices have been sharing policy portfolios linked to innovation policy.
- There are so many different programs for the funding of innovation that companies wishing to receive funding may have problems in realizing where to go and for which line of budget to apply.
Recently, with the second Barroso Commission, these problems were addressed through attempts to centralize innovation policy. Getting governance right in the Commission is important, but only means fixing a piece of a much bigger puzzle.

What innovation policy?
It doesn’t make sense to create a forward thinking innovation policy based on today’s economy. Why? The rate of change for markets, technologies and innovation move so quickly that the policy would be old by the time of implementation. Instead, a really “innovative innovation policy” requires that governments anticipate market developments by strengthening the dialogue with market players and enabling information sharing between private parties.

Towards innovative innovation policy:
How can leaders revise the EU innovation policy to consider industry needs and evolving market trends at an early stage of formulation? Possible ways to accomplish this goal include the following:
- Use new technologies for ongoing consultation of industry stakeholders
- Enable more effective technology transfer between universities and industry in Europe
- Exploit networks as cooperation have become more important than competition as key drivers for innovation
- Invest in innovation platforms
- Facilitate co-innovation as a way to extend the scale and scope of external partnerships and alliances
- Strengthen demand-side policies
- Innovative financial instruments, including intellectual property, IP-backed finance, cooperation between governments and commercial lenders
- Unleash the hidden power of public private partnerships
- Rethink subsidiary to identify the areas in which the fragmentation of national innovation policies is hampering EU competitiveness
- Improve the governance of EU innovation.

Government 2.0: anticipating society's needs:
Government 2.0 is a concept where citizens are involved not only as taxpayers and customers of public services, but as co-creators and co­regulators, thanks to the use of modern services to stimulate the participation of individuals in public policies.
If these options can be implemented to enable the participation of citizens to public policy, why shouldn’t they be applied to innovation policy? One idea is providing innovative businesses, researchers and citizens with a common platform aimed at exchanging ideas solutions to better identify society’s needs.

Next generation technology transfer:
Technology transfer has traditionally been one of the key engines of innovation in industrialized countries. This is especially true where education systems are well developed, and universities produce a wealth of innovative solutions through basic and applied research.
In Europe, knowledge and technology transfer between university and industry is still a missing link in the innovation value chain. Factors hindering the development of university-industry partnerships and academic spinoffs include:
- The absence of an entrepreneurial culture in many European universities
- The lack of a full-fledged, pan-European patent
- The limited development of innovation markets and intermediaries

From markets to platforms, networks and hubs:
In order to fully exploit the potential of new technologies, it is necessary to move from a concept of “market” to a more value-chain-oriented approach. Today, it is widely acknowledged that the cluster form has a very important impact on transaction costs and knowledge-sharing, and can prove very important for innovation and competitiveness, skill formation and information, growth and long-term business dynamics.
Clusters are extremely important for the EU economy because 38% of European employees work in industries that concentrate regionally.

Harnessing the power of demand-side policies:
Europe should boost public procurement of innovative solutions, especially through pre-commercial procurement. Public procurement in the EU represents around 19.4% (€2,200 billion) of the EU’s GDP. Public authorities have a substantial purchasing power that they could use to stimulate innovation. However, in contrast to other countries, only a few innovations are supplied or demanded by public procurers in Europe.
One area where public procurement can prove decisive for the future of European competitiveness is certainly eco-innovation, part of the so-called “green public procurement.”
In the future, crowd sourcing and similar variants will become a more important way of conceiving innovative solutions, and, most importantly, for societal challenges faced by EU’s ageing and increasingly multi-cultural society.

Mr. Jay Nibbe, E&Y Markets for Europe, Middle East, India and Africa Aimed is to make Europe the most innovated region in the world and in doing so, boost economic growth. Now we will have discussions and dialogues in order to create an environment and a culture for that purpose. Knowledge, research, innovation and technology is the point. But of course barrieres has also to be lifted.

Europe's public spending on innovation is behind to US and Japan. Therefore we have to close the innovation gap. It has become of highest political level for European leaders agreed on that.

Green products, optimalization of standardization
, SME's and the digital agenda (e-commerce) are on the agenda: thus a slow bureaucratic excersise is not allowed. In 2012 member-states have to reach where they are positioned. Moreover, we need interaction by governments, business, universities and smart man.

Innovate or decline, there is no choice!

Andrea Renda explained the next generation innovation policy. We need a helicopter view. We may not loose our scientific and technological supremacy, therefore there should be talk of young innovative companies. Investment in education is lower than in other regions. If we look at past mistakes and current prospects, not only sufficient initiatives were in front, of which too many stranded, but we need to realize that right governance is only a piece of the puzzle. There is fragmentation, also within the EU and there is the phenomenon of emerging issues as internationalization of R&D and open innovation.
The chain is becoming increasingly complex.

We have to work on the lack of true internal market, insufficient targeted financial instruments for SME's, innovation platforms and hubs, co-innovation, stronger demand-side policies, efficient PPP's and subsidiarity and governance.

Finally, Andrea reviewed the views from industry stakeholders, who joined a questionnaire to gather perceptions on where EU innovation policy should be improved in the years to come.

Andrea Renda, CEPS on the 'Next generation innovation policy'
Break-out session 'The future of innovation in Europe', Fabrizio Cobis

During the event, the breakout sesson on 'The future of innovation in Europe' by Fabrizio Cobis was attended. It is necessary to produce knowledge and to translate this knowledge into value.

The triple HELIX model was brought in. This model is reproducing how the three selection environments university-industry-government operate upon one another and enables us to study the knowledge base of an urban economy in terms of a trade-off between locally stabilized and (potentially locked-in) trajectories versus the techno-economic and cultural development regimes which work with one more degree of freedom at the global level. Procedure should be: from scientific discovery to experimental verification in applied science, without the Vortex reducing time lag between knowledge production and market entry of a new product.

Constant interaction, supported and boosted by high tech hubs, is required.

Conclusions from the break out sessions
Then reports followed from the break-out sessions. 'Do it much more quickly' was an overall credo that rised.
Key-outcomes from the sessions 'the future of innovation in Europe', 'financial reporting on an innovative driven market' and 'innovation funding and financial instruments' were:
more cohesion and excellence, the matter of clarity, competition of financial markets (cross border operation), initiatives from small regions, too much fragmentation, lack of unify, making it less complex, covering the entire circle from research to market, high difference between market value and book value.

The EU and the member states have to do it.

Innovation policy means to look forward, acting towards global markets and sometimes using recuperation of old ideas, Charles Leadbeater said. It is about the why's, what's, who's and how's.

Innovation exists through curiousity and crisis and is given by the process of profits. We need a culture of curiousity and have to ask ourselves what we have and what we not have (good health systems), what we need (changes) and what is possible.

Innovation must be uncomfortable. After all, it will also have a large social and public component, because the main issues are health, aging, climate, cities and education. We will innovate products & services, but also practices.
Way of life will not only change to platforms, networks and systems, but also a change of our ideologies and values is to be expected.
More flat organizations and more easy communication will become part of it, together with reassembling resources. And we have to have the capability to exit the old when needed.

Innovation, the system for the future!

Charles Leadbeater: on the role that business can play

Walking network dinner