Barring some economic miracle, Europe will not achieve the target set out in the Lisbon Agenda of devoting 3 per cent of GDP to research and development by 2010 and becoming the, “World’s most competitive and dynamic knowledge-based economy,” by the same date. As the deadline fast approaches, the focus in Brussels seems to have turned away from this specific goal and towards the idea of an overarching innovation policy.
Time and again, the EU’s Commissioner for Enterprise, Günter Verheugen, has stressed the importance of innovation. But last month, the European Commission came up with a new idea, saying it, “intends to explore the feasibility of proposing to the Member States before Spring 2010 a European Innovation Act,” in the conclusion of its communication ‘Reviewing Community innovation policy in a changing world’.
Everything is on the table: the definition of innovation, what – in current policy – is working, what isn’t, Community funding programmes, the role of small- and medium-size enterprises (SMEs), the list goes on. The idea is to put in place general principles that create a coherent policy on innovation, bringing together the various existing rules and policies, and making changes where necessary.
The Commission isn’t keen to talk about progress, stressing that it’s early days and there’s nothing concrete to report for the time being. And as analysts and businesses point out, the Commission has to get it right this time.
“It’s important that it [the European Innovation Act] is associated with real change,” said Bruno Van Pottelsberghe, senior fellow at Bruegel and professor at Université Libre de Bruxelles, Solvay Brussels School of Economics and Management. A more centralised approach is needed, for example, to avoid duplication in research activities in different EU nations, or to make it easier for researchers to work in another EU country, said Van Pottelsberghe, who details his view of the main challenges and priorities in Bruegel’s “Memos to the new Commission”.
The Commission’s communication and the plans for a Community innovation policy are open for public consultation until 16 November. A list of 12 questions suggests the kind of comments being sought, for example, ‘Should EU innovation policies have a stronger orientation towards addressing major societal challenges? If so, which ones should be prioritised?’ and, ‘How could the Community funding programmes for innovation, including FP7, the Competitiveness and Innovation Framework Programme and Structural Funds, be simplified and streamlined?’
One organisation currently consulting its members and preparing comments for this consultation is the European Association of Craft, Small and Medium-sized Enterprises, or UEAPME. For UEAPME, any such Innovation Act must be binding, said Luc Hendrickx, director of enterprise policy. The definition of innovation is of critical importance – it must not be defined only as the result of R&D, or purely confined to high-tech innovation. It’s low and mid-level technology that is important for most SMEs. Non-technological innovations, such as production processes, management techniques and how an enterprise organises its internal work, are also crucial for SMEs, said Hendrickx.
“We have the impression that in the Council and the Commission there is a move towards export-oriented innovation. We think this is the wrong approach,” Hendrickx told Science|Business. “Most innovation is done and implemented by SMEs,” and so small- and medium-sized enterprises must be at the heart of the EU’s innovation policy.”
Another source of ideas feeding into the European Commission’s study of whether a European Innovation Act would be feasible are recommendations from a panel of business leaders that was set up by the Directorate-General Enterprise and Industry with a mandate to recommend priorities and actions for EU innovation policy.
Last week saw the publication of its report, “Re-Invent Europe through Innovation”, which – conveniently for the Commission – reached the conclusion that such a re-invention requires a move, “from a knowledge society to an innovation society”.
“For EU policy, this means going beyond the focus on more R&D and technology to how an innovative mind-set can trigger broader systemic changes in society and the economy,” the panel said.
As the report highlighted, innovation has been a central EU priority for a decade and yet Europe has not achieved its Lisbon goal. Europe “is not investing effectively or appropriately in the infrastructure, competences, creative environments and businesses needed for 21st century innovation,” it goes on to say.
A new European Commission later this year, developing a post-2010 Lisbon strategy and forthcoming discussions on the EU budget, “provide a unique opportunity to change course on innovation,” it concluded.
The EU certainly has a challenge on its hands. The central role of innovation, which cuts across several Commission departments from Enterprise to Research and Information Society to Education, is undisputed. But how that is turned into concrete proposals – that don’t cross-over or duplicate national policies – and bring about real change, is another matter. The next few months look set to be interesting times as the idea of a European Innovation Act is explored. Spring 2010, the deadline the Commission has set itself, looks very tight, given the impending changeover of Commissioners, and the need to get so many directorates to coordinate and speak with a single voice.
Commission communication:
http://ec.europa.eu/enterprise/policies/innovation/files/com(2009)442final_en.pdf
Public consultation:
http://ec.europa.eu/enterprise/policies/innovation/policy/future-policy/consultation_en.htm
Report by panel of business leaders:
http://ec.europa.eu/enterprise/policies/innovation/files/panel_report_en.pdf
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