The innovation show comes to Brussels

Lest there be any doubt about it, this week’s European Commission conference on innovation confirms that the topic is now officially on the “it” list of top political trends.

The “Innovation Convention” took place on 5 and 6 December in the Brussels equivalent of a circus bigtop, the massive “Square” conference centre down the street from the Royal Palace. It drew several hundred delegates and potentates from around the world:  the chairmen or CEOs of Google, Alcatel-Lucent, Ryanair, L’Oreal and GlaxoSmithKline; fashionistas Vivienne Westwood and Silvia Venturini Fendi; and a procession of Europoliticians including EC President José Manuel Barroso and R&D Commissioner Máire Geoghegan-Quinn, who organised it.

As entertaining as the conference was – ending with an avatar of the Commissioner talking with a video image of Microsoft’s chief strategist, Craig Mundie – it was also serious political work: in other rooms, the European Union’s industry and research ministers were meeting privately to give the first, preliminary thumbs-up to Horizon 2020, the EU’s wildly expansionist €80 billion, seven-year plan for research and innovation. That focus on politics, rather than real-world innovation, was apparent to all - Ben Verwaayen, Alcatel-Lucent CEO, observed wryly that about 80 per cent of the delegates appeared to be advisors or consultants to the Commission or its dependents – because “that’s where the money is."

So innovation is now an official centrepiece of the EU’s economic strategy.  It is also making political and bureaucratic careers. The gossip in the conference’s overcrowded networking rooms included lots of instant analysis of winners and losers in the bureaucratic jockeying over Horizon 2020. The consensus:  The Directorate General for Education and Culture, with its European Institute of Innovation and Technology, was a come-from-behind victor, with a nine-fold budget increase for the EIT to €2.8 billion – much of it coming directly out of the budgets of cross-town rivals in other Directorates-General. (It didn’t hurt the EIT cause that Barroso, who first suggested the EIT’s creation in 2006, played godfather in the internal budget negotiations).

The Brussels take on innovation 

But lost in all the political games is a more fundamental question: what is innovation, and who actually does it?

In general, the Brussels thinking seems to be that innovation is ‘good stuff’ – nice new widgets, services or other things that somehow create new companies, jobs and associated benefits. In Horizon 2020, the Commission presents a lengthy list of old and new programmes, grants, loans and other ways to spend money on innovation, and thereby encourage entrepreneurs, researchers, engineers, venture capitalists and corporate executives to do more of it. Somehow, according to the speeches, this money is going to lead to more companies, jobs and economic growth for Europe – just the upbeat, forward-leaning kind of thinking that the European Union needs to extricate itself from its multiple malaises of the euro, unemployment, and low growth.

Innovation in the eye of the beholder

But the precise definitions depend on who is talking. At the conference, three expert groups advising the Commission gathered privately for a morning discussion of Horizon 2020. There, the humanists insisted on the importance of the humanities and social sciences to innovation. The social activists called for social innovation. The science-first group urged that ‘excellence’ and blue-sky research not be forgotten (indeed, that message was reinforced at the main conference by Nobel-winner André Geim of Manchester University, who urged that spending on blue-sky science should jump ten-fold, not 77 per cent as proposed.) Those worried about climate change, the environment, energy supply or other so-called ‘Societal Challenges’ praised Horizon 2020’s allocations for innovation there, and urged more.

Some purists, myself included, wondered how one word could serve so many causes. My own definition is far narrower: Innovation is making money out of new ideas. Another definition, repeated so often in conference speeches that the origin is now lost in the mists of Internet time: “Research is turning money into ideas, and innovation is turning ideas into money.” Whatever the word play, this view of innovation places the emphasis on money and jobs, not the environment, social equality, Nobel prizes or other worthy goals; those can and hopefully do follow as a consequence of innovation, but not as the primary objective.

This all has implications for policy. The broad definition of innovation is on display in Horizon 2020. Solving the grand challenges attracts €37 billion of the total budget, and special new initiatives are planned for social innovation, eco-innovation and even the tourism industry. By this light, the role of government is to sprinkle pellets of money near and far, to stimulate new initiatives in these fields.

Obstacles to innovation

By contrast, the stricter definition of innovation looks less at the money and more at the broader legal, regulatory and economic environment in which innovators operate. It tries to identify obstacles to innovation – such as the confusing patent system, too much red tape for small companies, barriers to university researchers moving to companies, or restrictive immigration policies that worsen the brain drain. Then it tries to coordinate an EU-wide response to lower these barriers.

Of course, the broad approach is easier for Brussels to pursue. All it requires is budget-approval from the member-states (though that won’t be so easy, given the currently austere outlook of EU finance ministries.) The narrow approach is much harder, because it requires each member-state to agree to change its own laws for tax, immigration, education, health and other hot-button policy areas – and to do so in a somewhat coordinated fashion. For that, Brussels can only cajole, not spend.

The Science|Business Innovation Board was also at the Commission’s conference, organising a lecture and panel discussion on open innovation with Henry Chesbrough, of ESADE and Berkeley, and the academic ‘father’ of the subject. A copy of his report can be obtained here.