New Commission publication outlines 'smart' model for European innovation policy
The European Commission's Enterprise DG has published a book entitled 'entrepreneurial innovation in Europe', which summarises 11 recent reports on innovation policies, and outlines a European model for 'smart' innovation policy. The studies on which the book is based were undertaken in order to examine topics of current interest or concern to policy makers in Europe, to improve their understanding of organisations' innovation needs, to assess the impact of current policies, and to explore opportunities for new ones. The resulting book is designed to help regional, national and EU policy makers strengthening Europe's innovation capacity through the introduction of effective, targeted legislation and support measures. The first chapter reviews two studies on innovation policies and activities within the 13 accession and candidate countries, assesses the readiness of their business sectors to compete in the European single market, and examines their governments' success in planning and implementing effective innovation policies. It concludes that while a number of common problems exist, policy intervention can have a dramatic effect, and more government attention and resources must be focussed towards innovation support. The next section looks at various aspects behind the drive to create innovative firms in order to boost employment. This includes an assessment of the correlation between innovation and job creation, analysis of university-industry cooperation in creating new technology-based firms, and an overview of spin out companies created by European universities. The chapter highlights the crucial role of regional networks in supporting spin off activity. The third chapter draws on four studies on the financing of innovation, including state backed and mutual loan guarantees, business angel investment and the training of investment analysts. One conclusion is that business angels are far better equipped than banks to assess the risks of investing in young firms whose assets are largely intangible. The impact of industrial relations policies on innovation is the focus of the fourth chapter. The study outlines a generic model of innovation friendly industrial policies, which include direct and indirect forms of employee consultation. The final section assesses corporate taxation as a means of encouraging companies to make innovation related investments. It concludes that well designed tax incentives, adapted to local circumstances, can encourage additional business investment in research and development.