Viewpoint: EU spends billions on research with “no result”

In his time on ITRE, the European Parliament’s Industry, research, and energy committee, Hans-Olaf Henkel has been outspoken in his views of the inadequacies of the underpinnings and direction of EU research.

Now, as the 79-year-old leaves the parliament, he offers his parting shots on European R&D policy. While his opinions often put him in a minority in Brussels, his eloquence and experience earn him the right to a fair hearing.

Henkel has a long-time perspective on Europe’s technology sector, having joined IBM Germany in the early days of the computer industry, way back in 1962. He stayed with the company for more than 30 years, rising to become head of IBM Europe. Afterwards, Henkel went on to lead the Federation of German Industries and the Leibnitz Association, and to teach at the University of Mannheim. Then, in 2014, he was elected to the European Parliament as a member of the right-wing Alternative for Germany (AfD).

At that time, the AfD was seen as a one-subject party, set up to protest against the German government policies for dealing with the Eurozone currency crisis that was sparked by the financial crash. “I decided to go into politics only for one reason, and that is to change the euro policy of the EU.” Henkel said.

After only one year Henkel left the AfD because of its shift in focus from the Euro to immigration. That put him in the curious position of being a committee vice chair with no party political backing in his home country. He remained affiliated to the European Conservatives and Reformists group in the European Parliament, which expelled the AfD in 2016. Henkel said he will not vote in the forthcoming European elections.

Billions spent on research programmes produced “no result”

Henkel does not oppose public funding of research, and has previously said national governments should spend more. But he argues that the EU’s approach isn’t working and Horizon 2020 and all the proceeding Framework R&D programmes are unnecessary.

“The Horizon people in my committee – plus [research commissioner Carlos] Moedas and his team – they totally overestimate their impact,” Henkel told Science|Business.

In the early days, the Framework programmes were focussed on maintaining Europe’s position in the computer industry. In particular, the first Framework programme, which ran from 1984 – 1987 was inspired by Japan’s ‘Fifth Generation’ computer programme, which aimed to build a supercomputer with unprecedented power that would provide a platform for advancing artificial intelligence research.

In Henkel’s view, it was “crazy” to set up programmes solely aimed at catching up with Japan. “At that time, we had solid, good European players in information technology,” he said, citing Nixdorf, ICL and Triumph-Adler, among others.

But now “they’re all gone” and Japan’s standing in computer science and microchip technology, and the status of Japanese companies like NEC and Toshiba has slipped too. Meanwhile, the US has maintained its position. “So all these billions [spent on] research programmes in order to catch up had no result.” Henkel said.

Now SAP, set up by IBM employees around a software project that was due to be axed by IBM, and Atos, formed over the years from the consolidation of a number of French, German and Dutch computer hardware and software companies, are, “the only two real players left in Europe,” he said.

Europe’s own search engine

The objective may have shifted, but the sentiment setting the direction for EU R&D policy – to create European champions - remains the same. “They now want a European Google,” Henkel says. “Google was not the result of American government intervention. But they think a European Google will be the result of the EU’s intervention.”

There is a view that US tech giants like Google are rooted in government-funded research. Henkel disputes this. “I’m sorry, that is a total misrepresentation of what happened,” he said. “The examples which we try to reach for, whether it is Google or Microsoft, they have nothing to do with government.”

The case of Microsoft and its enduring success had more to do with “mistakes made by IBM,” Henkel said. He should know, having been around at the 1981 launch of the IBM PC, the first desktop computer. At that point in the history of the company, IBM made most of its money from manufacturing hardware. It handed the license to provide the operating system for the IBM PC to Microsoft founder Bill Gates. Today, Microsoft’s $100 billion plus annual turnover is bigger than IBM’s. It’s also more than IBM made even at its peak in 2011.

Of course, is very difficult to draw a straight line from the outputs of government-funded research, to a successful company or product. The backbone of the Internet was partly built with US government money, and Google relies on the Internet to deliver its services. But a huge range of other factors have fed into the success of Google, which is now bigger than IBM or Microsoft, and growing at a faster rate.

Henkel argues public sector research spending should focus on the long-term projects that the private sector does not invest in. Even the CEOs of large companies are looking at short timelines, he says. “If anything, their horizon is five years. Some visionaries, maybe ten years, but that’s it,” Henkel said. “I think it’s right to collect taxes from companies, and others, and use that tax to invest in long term basic research, because companies wouldn’t do that.”