Europe failing to reap returns, as its IP in key technologies is exploited by China and Japan

Europe needs to do more to capitalise on its knowledge in critical technologies and prevent know-how draining abroad, warned Commissioner Antonio Tajani, as he launched a new action plan for Key Enabling Technologies (KETs) this week.

The plan aims to boost industry-powered growth in areas of existing expertise such as biotechnology, photonics and nanotechnology by adjusting state aid barriers, refocusing existing funds and promoting training in KETs.  EU patents are increasingly being exploited outside Europe, Tajani claimed at the launch event “We don’t want our know-how to leave the EU,” he said.

European research results in key technology areas are “very often” used against European industry, by Chinese and Japanese companies. “It’s detrimental to us – our patents are used against us,” Tajani said. This is harming European jobs, growth opportunities and ultimately the EU’s capacity to generate new knowledge. “We are missing the boat,” Tajani warned, “When you have a first production line, you have to make sure that is in Europe.”

The Commission defines the EU’s most important enabling technologies as “knowledge intensive and associated with high R&D intensity,” needing high-risk capital and requiring highly-skilled employees. The six KETs – micro/nanoelectronics, nanotechnology, photonics, advanced materials, industrial biotechnology and advanced manufacturing technologies - stimulate innovation and cut across multiple technology areas.

Bridging the gap

Tajanti stressed that Europe’s main shortcoming is an inability to translate research and technological and innovation leadership into genuine goods and services. Europe doesn’t manage to apply the results of its R&D activities at an industrial level because state aid rules prohibit funding activities that take place too close to market,  there is not enough high-risk capital, a shortage of skilled workers and entrepreneurs, and a fragmented internal market.

“Europe is still one of the world leaders in this sector,” said Tajani, pointing out that thirty two per cent of global patent applications in the KET sectors originate from within the EU. But Europe is not keeping up with China. “The competition has become ever more aggressive,” Tajani said, pointing out that in recent years, China’s share of patent applications in KET areas has risen from twenty nine per cent to thirty eight per cent, surpassing the EU.

Horizon 2020

“KETs are a fundamental tool for growth, to reinforce the competitiveness of the Union,” said Tajani. But rather than allocating new funds for the promotion of KET innovation, the Commission’s action plan leans heavily on a number of existing initiatives, with the intention of providing a common framework, to allow for a better coordination of current and future EU programmes.

Under the new strategy, €6.7 billion will be allocated to pilot production lines and demonstration projects that combine several KET technologies, as part of Horizon 2020, the EU’s next seven-year research funding scheme that kicks into action in 2014. The plan also calls for renewed focus on public-private partnerships for KETs that fall within the Horizon 2020 rules.

Tajani called on member states’ governments and regions to focus on pan-European benefits of funding. The new strategy says that member states should make use of structural funds to exploit KET research, and indicates that the European Investment Bank (EIB) will help SMEs by providing access to high-risk capital.

State aid

The action plan also promises to modernise rules on state aid, to allow aid which is, “well-designed, targeted at proven market failures and has a clear incentive effect and limited impact on competition.” Tajani said the aim is, “to avoid the temptation to take knowhow outside of the Union.”

In addition, there will be moves to further develop the EU internal market, by improving intellectual property rights protection and reducing the use of subsidies and tariffs. The plan also calls for non-tariff barriers at a global level and more cooperation with third countries in the area of KETs - based on mutual benefits.

Education

To address the shortage of skilled employees, the plan calls on the European Institute of Innovation and Technology to establish a Knowledge and Innovation Community focused on “added-value manufacturing.” The plan also points to the need for more partnerships between education and businesses, to better align education priorities with KET market needs.

“We’re trying to protect our industrial framework and productivity – particularly in this sector where we are in the forefront of research,” concluded Tajani. This is not a protectionist move, he stressed.

Tajani’s action plan is a response to a call for a new strategy on how to boost enabling technologies by the European Council in March 2012.

Read the entire action plan in the official Commission publication.