A look behind the Brussels curtain

Science|Busiiness CEO Richard L. Hudson

That was the premise of an unusual, day-long policy session 8 November at the Berlaymont, hosted by EU Research and Science Commissioner Janez Potočnik. From 9:30 to 5:30, a group of about 50 economists and Eurocrats met to compare notes about Europe’s R&D performance, and debate the policy implications. A lot of hot air? Some of it – but the debate’s importance was as part of a process, begun by Potočnik earlier this year, to re-examine all the old assumptions about EU innovation and R&D policy, and force more change through the system. New policy proposals are planned for 2008.

How does a debate like this work? Fortunately, the meeting was semi-public – in that the participants can talk about information shared at the meeting, and the economics papers discussed there were published online by the Commission.

So it’s possible now to provide a glimpse of the debate. (Full disclosure: I was also the moderator of the opening, two-hour panel.)

The opening issue was framed in a group report summarized by Dominique Foray, a professor at the École Polytechnique Féderale de Lausanne, and vice-chair of an expert economists’ group that advises Potočnik regularly.

How the argument runs

The argument goes like this: in a world of globalised research, the best way to attract and keep multinational R&D in Europe is to be excellent at it. Rather than scattering the R&D effort across Europe to universities great and small, the EU should instead foster a process of “agglomeration” – building up “centres of excellence” in specific disciplines and sub-disciplines, that by themselves are world-class and attract investors and partners from around the world. At present, the paper argues, too much of Europe’s R&D effort is fragmented across the continent, and the countries waste funds by duplicating rather than coordinating efforts.

“The creation of truly European centres of excellence will be of more benefit in the long run than each individual country having low-level expertise in a full range of scientific areas,” reads his report.

That doesn’t mean that Cambridge or Karolinska should get all the EU money, while researchers in Lisbon or Bucharest get nothing. Instead, Foray’s paper cites an example of a research collaboration called Bluebionet: four maritime regions, in France, Germany, Britain and Spain, are pooling their research efforts into ocean biotechnology (“blue biotech” in the industry jargon). “By working together, a critical cluster has emerged and the knowledge assets – people, ideas, labs – are available to all parts of the network, rather than the expertise leaving Europe.” He calls this approach “smart specialisation.”

The downside

There is, of course, an obvious downside to this approach: what about all the other coastal regions – many impoverished – that aren’t part of this new cluster? What about the researchers in the underdeveloped parts of the Baltic, Aegean or Black seas? Should the EU just let them hang, telling their researchers to move to the new cluster regions, or find something else to study? And even if that’s the right approach, how on earth would the EU organize such a system of specialisation, short of Soviet-style central planning?

Argued one of the meeting participants: “The EU can’t afford to lavish investment in research to only a few leading regions, leaving behind the rest of Europe.” If the EU switched to a winner-takes-all policy of R&D funding, then it’s likely that local universities in these troubled regions would falter. That’s bad news for them, of course: it could mean fewer jobs, more poverty, and greater social conflict. It’s also bad news for the EU economy overall: After all, the EU needs a greater supply of scientists and engineers from all over – from Bucharest as well as from Berlin.

Another problem: good universities are certainly important to a multinational’s lab-siting decision – but only part of the formula. “It’s not entirely about the science base,” said one meeting participant. More important is the multinationals’ perception of how good a region is for doing business and finding customers, he argued. And that, of course, has more to do with macroeconomic and fiscal policy, than with how many research papers the local university racks up in Nature or Science. So if the Commission were to push specialisation in a big way, it might not actually make any difference to the multinationals.

Yet another problem: Would the benefits of these new clusters actually spill over to the poorer regions? In France, for instance, 90 per cent of the country’s R&D effort happens in just 10 per cent of its administrative regions – yet 90 per cent of employment happens in 80 per cent of the regions. So in the experience of one country, does concentration of research in a few regions help all the others? If that kind of economic “spillover” does happen, it certainly isn’t obvious from the data gathered so far, said one meeting participant.

What’s the answer?

Well, this is the real world of policy formulation; there are opposing and nuanced views, and not yet a clear direction on the right way forward. The Commission is starting to experiment: For instance, earlier this year it created a new funding body, the European Research Council, that awards research grants solely on scientific merit, without consideration of where the researchers come from. The inevitable result, given the relative strengths of the scientific bases in each member-state: researchers in Britain look set to get a lion’s share of the first round of grants to be announced later this month. Potocnik’s own native country, Slovenia, had just one researcher whose application made it to the ERC semi-finals.

For some of the Commission officials, though, the value of this kind of debate was more subtle: It was, as one said in a coffee break, a new thing simply to be talking openly about this issue. Even a few years ago, he noted, it would have been unthinkable to schedule such a meeting and debate specialization. In politics, progress is slow – but it can happen.