Innovation in the EU: a new guiding star is needed

Diogo Vasconcelos of Cisco Systems and the Business Panel on Future EU Innovation Policy.

But by adhering to that traditional view of innovation, we risk losing sight of the far wider benefits and social progress that a much broader understanding of what innovation is – and where it takes place – can produce. We need to ensure that innovation is at the heart of how we go about tackling the many challenges that all members of the European Union must address to ensure the future prosperity and security of generations to come.

Rethinking innovation

So, we need a broader concept of innovation. One that breaks free from the confines of the lab, that sees innovation as a participatory and collaborative process, connecting many different people across business, academia, government and wider society.

It seems obvious that the problems we face in common cannot be solved in isolation. But the way that many institutions operate sometimes suggests they do not see this as self-evident. Too often we see the creativity of European citizens developed and harnessed beyond our borders. A risk-averse, slow and disconnected institutional framework drags innovators down, when it should lift them up to help them achieve their aspirations.

While fear of failure and risk aversion can stifle innovation, we need to make it clear that a failure to innovate gives rise to far greater risk: that we will not be able to address the challenges we all face. These range from climate change, to an ageing population through to the needs for addressing youth unemployment and social exclusion.

Five areas of focus

Recognising that innovation is vital to meet the challenges that we all face today the EU set up a panel to make recommendations for the development of innovation in the European Union.

The Business Panel on Future EU Innovation Policy made recommendations that focus on five areas:

• Broadening the concept of innovation

• Speed and synchronisation

• Investing in new infrastructure

• New financing models

• New places and forums for collaboration

Broadening the concept

Innovation is the lifeblood of commercial success. Without it, businesses die as they fail to adapt and respond to the changing needs of their customers. But we rarely see this understanding of the importance of innovation so readily expressed when it comes to tackling social challenges. That needs to change. Public services need to transform to tackle the challenges ahead. And that does not mean by imposing change on people. It can only happen if the change required is developed collaboratively, recognising the diverse sources of new thinking and creative energy that are found across the EU.

Innovation at speed: laying the regulatory foundations

So what steps do we need to take to develop the environment in which social innovation can flourish? Some would argue that the ideal role for government in this context is to have no role at all. But leaving change to the market alone will not drive the scale of change we need.

However, that is not to say that the EU itself can, or should, become a direct actor. Instead it needs to support appropriate institutions that can galvanise and accelerate innovation. It needs to make the right introductions and broker the right agreements. We have the European Investment Bank today. Why shouldn’t it become the European Innovation Bank of tomorrow, helping to develop new partnerships and funding mechanisms? Through policy and regulation, the EU can develop the environment within which innovation can flourish.

There are already pockets of the kind of social innovation we need scattered throughout the EU. But they need to be linked together so that they can share, socialise and grow their discoveries together. In much the same way that the opening of markets across the EU has helped to drive business opportunities, we need to remove the boundaries and borders that prevent the flow of information, discoveries and insights.

Infrastructure for a new world

One key element to make that change will be the infrastructure that we invest in and build in Europe. And just as the roads and railways of the past created the conditions for social change and improvement, the development of their 21st century equivalents of high-speed digital networks will allow innovation to drive similar social change. But this does not mean that widespread broadband per se will deliver the required changes. It is the collaboration, activities and information flows it facilities that are the drivers of progress and change.

New models for finance

Current approaches to funding are too often short-term and risk averse, favour those businesses and sectors that are in many ways least likely to innovate. Fear of failure provides a heavy disincentive to invest in new and risky ventures. Yet the acceptance of some failure is part of embracing a bolder and more creative environment in which successful innovators can flourish.   

New forums

Innovation is no longer the preserve of the heroic individual, battling against the odds. Conversation, sharing and collaboration are the hallmarks of innovation today. The most effective forums for innovation will increasingly break out of any physical confines and take place simultaneously across the EU regardless of individuals’ location. To help foster these new networks requires open access and transparent information. There should be no limits on who can engage – the only barrier should be talent and imagination.

Innovation is the imperative for building a prosperous, stable and secure European Union. It is not an isolated activity, but a process that needs to encompass all citizens in the creation and delivery of a shared vision of the future.

Diogo Vasconcelos is Distinguished Fellow at Cisco Systems (London) and Chaired the EU Future Innovation Business Panel.

The Business Panel’s report – “Reinventing Europe Through Innovation”  http://ec.europa.eu/enterprise/policies/innovation/files/panel_report_en.pdf