Europe’s DNA for innovation

This article is taken from Jean-Philippe Courtois’s introductory letter to the new Science|Business report, “Innovation – The Demand Side”

Jean-Philippe Courtois: Europe has a lot to offer.

The first gap is in the funding of R&D. The Lisbon Agenda’s 3 per cent target is important, but so also are the incentives that encourage more public and private funding. In particular, we need more early-stage investment into innovative companies.

Microsoft works with a multitude of great entrepreneurs and great companies in Europe. But few of them have the ability to raise early-stage capital to develop the critical mass to really go global. We need programmes in Europe where we try to bring entrepreneurs and capital funding together.

The second gap relates to the public–private partnership in education. According to the OECD, China now already has the third-highest number of researchers in the world, 926,000, just ahead of Japan and behind the US and EU. However when you look at growth rates you can see that it is going to be No.1 very soon. In Europe, the growth rates are flat or declining. We need to close this talent gap so that development of entrepreneurial thinking and skills complement Europe’s great engineers and technology researchers. We have dedicated research, innovation and incubation centres across Europe. We also learn and innovate with our university relationships.

The third gap – and a critical one for innovators – flows from the first two: the intellectual property system. Skype is a European success story because of their innovation and ability to protect some valuable IP that was saleable. Europe has a long and good tradition in intellectual property. But over the past five or seven years the direction on IP has not been  as decisive as what is happening in Asia or the US.

The last gap is skills, not just at the high end, but also in the society at large. Many companies are actively trying to do something about this. At Microsoft we have created a partnership program called the Alliance for Skills for Employability, to retrain people who are unemployed or who work in declining sectors. In Portugal, for example, in collaboration with the textile confederation, we recently retrained 600 women textile workers so that they can be employed in the ICT area. Our goal is to give access to technology and training to 20 million Europeans by 2010.

To conclude, the marketplace of the future is more competitive now than in the past decade with new players such as China and India coming on board. We are in a new ‘race for the top’ and one Europe can run fast in!

The author is President of Microsoft International.