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Heinz Zourek, Deputy Director General for Enterprise and Industry, presents the special distinction award to Duccio Campagnoli of the Emilia-Romagna region. |
 nnovative firms are the basis of economic growth, but the public sector – at local, regional, national and European levels – has significant influence through its power to shape the environment in which industry operates. To find the best policies and tools to support innovative companies public authorities need to learn from each others’ experience. And that means not only seeing the results, but discussing, with those responsible, how policies worked and why they were introduced.
The European Forum for Innovative Enterprises was set up by the European Commission to provide a forum for high-level discussion of innovation policies, as well as networking opportunities. “In its fourth edition, it has developed into the flagship event for European innovation policy,” explains Cesar Santos of the European Commission’s Innovation Policy Development Unit, “and brings together a wide range of people from the innovation community, be they practitioners, business people or policy-makers.”
Revolution
‘What does the aftermath of the financial frenzy in the late 1990s mean for innovation policy?’ asked Carlota Perez, a visiting research fellow at both Cambridge University and Sussex’s Science Policy Research Unit, in her keynote speech to the Forum. Investment in venture capital funds has fallen hugely, from the highs of 2000 before the Nasdaq bubble burst when some $81 billion was invested in funds. Investment in 2003 was just one-tenth of that, although it has picked up slightly in 2004. Will investors return, or was that bubble an exception?
She looked back to previous technological revolutions, suggesting there were very close parallels with the 1990s bubble in each of them. Every 40 to 60 years – with the industrial revolution, the age of steam and railways, electricity and heavy engineering, oil and cars, and most recently information technology and communications – technological revolutions have brought huge opportunities for innovation. “And each has had a similar pattern of propagation, with a financial bubble collapsing around middiffusion in each,” she said.
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Winning regions
The Forum dinner, held in Stuttgart’s Roman castle, played host to a surprise performance from the Stuttgart Ballet. But the main business of the evening was the presentation of the Awards for Excellence in Innovation Transfer. These were intended to reward the efforts of those Paxis regions which had most success in transferring innovation initiatives and policies to other regions during 2003 and 2004. The awards were decided by a jury made up of two senior Commission officials and three independent experts.
The six winning regions were Emilia-Romagna, Rhône-Alpes, Karlsruhe, Helsinki, Oxfordshire and Stuttgart. Furthermore, Emilia-Romagna was given an additional Special Distinction Award, in recognition of its outstanding performance. Over the period, Emilia-Romagna has worked on transferring no less than 12 innovation policy schemes.
Accepting the Award, Duccio Campagnoli from the Regional Council underlined that “the main success factor of Emilia-Romagna is its continuous effort for innovation and a new industrial policy based on knowledge.” |
Diffusion
With each technological revolution, the significance of new products and process grows, and new firms and industries grow to become economic drivers. Technologies and business models then spread into other sectors, gradually rejuvenating and modernising the whole economy, leading to a leap in productivity. “But in practice, the diffusion process is split in two, and at the midpoint, before the new paradigm becomes truly established, there is a period of instability and uncertainty,” according to Perez. “And that is the point we have reached now in the diffusion of ICTs, as they take over from the age of oil, cars and mass production.”
These phases in diffusion are mirrored in the actions of investors. During the intensive innovation of the first period, speculators are willing to take risks. But once the bubble bursts, there is a period where investors are over-cautious and unwilling to invest. Once the new paradigm becomes established, investors come back, but seek greater control. But institutional frameworks have to be tailored to create the conditions for such a ‘golden age’. “Therefore, investment is now inseparable from innovation,” she underlined, “and the public policies and private strategies adopted now will define the conditions for innovation in the coming decades.” And beyond that, we may well see the biotech and nanotech revolution…
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FOURTH FORUM FOR INNOVATIVE ENTERPRISES