Can the US and EU work together in technology?

Richard L. Hudson, CEO and Editor of Science|Business

It would be comic if it weren’t also fruitless. It usually goes like this:

The European view of the US: Dominant and domineering technology industries, backed up by a rich government that masks its subsidies as defence procurement. Great skill at organising the money, talent and incentives to pull technologies out of the lab and into the marketplace. Great universities, entrepreneurial verve – but a barbaric apathy towards the fate of the weak or underprivileged.

The American view of the EU:  Many great scientists – especially those who moved to the US – and two great universities (Cambridge and Oxford). Protectionist governments that mask industrial subsidies as R&D grants, and try to block American computer or aerospace competitors. A good place to open a lab; a bad place to base a technology business.

Of course, this is all caricature – and stated that way it sounds absurd. But these are the underlying prejudices that have bedevilled trans-Atlantic technology relations for the past few generations. Star Wars, the "technology gap", Esprit and Eureka, "el Plan Calcul”, Boeing v. Airbus – the list of technology skirmishes among these supposed Western allies is long. So wouldn’t it be nice if the dialogue could change?

That was the topic of a roundtable discussion Sept. 30 at Xerox’s European research centre in Grenoble – and the resolution that the current economic crisis should be used to get more tech collaboration going across the ocean, particularly in the face of rising competition from Asia. Participants in this discussion included Anne M. Mulcahy, chair and former CEO of Xerox; David Appia, CEO and chair of the French development agency Invest in France; and Khalil Rouhana, head of ICT research strategy at the European Commission. Monica Beltrametti, head of Xerox R&D operations in Europe was the host and I was there as moderator – apparently to stir the pot.

The discussion itself was private, but Mulcahy summarised part of it in a speech afterwards. “Opportunities present themselves in times of crisis,” she said. That’s true of a company like Xerox, which she said has continued its R&D spending despite the downturn at about 5 per cent of revenue.“You have to make sure you’re not mortgaging the future” to save money now.

But it’s also true of nations and trading blocs. Mulcahy argued that the billions in economic stimulus package provides American industry a rare opportunity to restructure – to move towards new technologies, new business models and new opportunities. But it’s also an opportunity for European industry – and indeed, the US and EU, as developed regions with mature technology industries, may have more in common with each other in this time of crisis than with the rising technology forces of China or India. “As developed markets, we face many of the same problems – industries that need to be reinvented. Our alignments are far greater than the differences.”

The upshot: “There are more opportunities for the US and Europe to work together to solve common problems.”

So how to do that? After all, Brussels and Washington have been trying on and off for at least 20 years to pick off small areas of technology development for collaboration. They have been worthy, but economically insignificant: typically, the politicians in each city try to pick a technology area in which, maybe, somehow, someday, they would consider coordinating a bit of their R&D grants. It’s a timid, gradualist approach.

What’s needed, according to Beltrametti, is “firmer leadership”: a clear decision that – perhaps in a vital emerging field like alternative energy development – the US and EU will construct a common funding programme, with one set of grant rules, one peer-review panel, one policy on patent protection, and total indifference over whether the grants are going to Cambridge, Mass, or Cambridge, England.

Political moonshine, yes. But with a new administration in Washington, a new Commission and Parliament in Brussels, and a continuing economic mess, it’s not entirely implausible. An approach like this would accelerate what happens normally in research: Smart scientists reach out to collaborators, wherever they are. Coordinating the spending of some of the stimulus billions would make that happen more easily.

But it should not stop there. In my view, far more important than more government spending is the reinforcing the natural R&D behaviour of technology multinationals. Most are now pursuing a strategy of "open innovation" – ad hoc networks of researchers and developers, inside and outside the multinational, work together to solve a specific business problem or develop a specific product. This isn’t planned by anybody in Washington or Brussels; it happens for the best possible reason – because somebody needs it so much they will pay for it.

The most important thing politicians could do is to make it easier for such strategies to succeed. That’s a far broader effort: reforming universities so academics want to collaborate with industry; concentrating resources in the best researchers, institutes and clusters rather than scattering it far and wide; tax breaks for R&D investment by individual as well as corporate investors; simpler regulations and a simpler European system for patents. The list goes on. But serious work on these issues would extend the prosperity well beyond the hoped-for economic recovery in 2010 or 2011.