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IST2006 panel discusses Europe's progress on the road to innovation

During a high level plenary at the opening of the IST2006 event in Helsinki on 21 November, Viviane Reding, European Commissioner for Information Society and Media, held a discussion with a panel of experts on efforts to create an innovative Europe over the last year. She aske...

Policy making and guidelines

During a high level plenary at the opening of the IST2006 event in Helsinki on 21 November, Viviane Reding, European Commissioner for Information Society and Media, held a discussion with a panel of experts on efforts to create an innovative Europe over the last year. She asked whether the wake-up call issued by the Aho report had been heard, or whether Europe remains asleep on innovation.

Who better to turn to for an answer to this question than the author of the report itself, Former Prime Minister of Finland and panellist Esko Aho. Following a meeting of EU Heads of State and Government in Hampton Court, UK, in October 2005, Mr Aho was given the task of heading an independent expert group to advise on ways to boost innovation in Europe. The group's ensuing report proposed a four-pronged strategy focusing on innovation-friendly markets, strengthening research and development (R&D) resources, increasing structural mobility, and creating an environment which celebrates innovation.

Mr Aho said that things were beginning to move forward, noting that he was more optimistic now than at the time of publishing the report. 'Discussions have started and steps are being taken,' he said. They include the Commission's recently published 10-point action plan on innovation, as well as a strategic decision, to be adopted by the European Council in December, on one of the key elements of the report: the creation of leading markets for innovation.

Another promising development has been the finalisation of the Seventh Framework Programme (FP7) which is due to start on 1 January 2007, and the high level of investment foreseen for research on information and communication technologies (ICT), an area which was cited in the Aho report as one of the key drivers of innovation. A total of €9 billion is earmarked for ICT, making it the biggest single budget item in the research framework programme's history.

This increase in investment will give a huge boost to ICT research, said Ms Reding. The new programme will focus on key areas where Europe has a competitive edge and established strengths: communications, electronics and photonics, and software systems and architecture. It will also ensure that ICT research benefits not only the economy but also society by improving everyday life in areas such as transport, energy efficiency and healthcare.

Ms Reding said that the new ICT programme reflects changes in the current markets, technology, and industrial requirements, and, at the same time, is sufficiently forward-looking in order to prepare the ground for future markets. The new programme will also act as a facilitator, offering many opportunities for collaborative research between academia and industry 'But a key question is, does industry want to participate?' she asked. And if so, how?

According to Carlo Bozotti, panellist and CEO of STMicroelectronics, industry is very willing to get involved in coordinated research, particularly through the European Technology Platforms (ETPs), which he said were the best means to avoid the fragmentation of R&D efforts in Europe, and to create innovation-friendly markets. STMicrelectronics is one of the larger participants in several of the 30 ETPs.

In order to be successful though, platforms should be industry-led, covering all key technologies, and be of a significant size in order to involve all the industry actors in the production chain, from the supplier to the customer 'Only with industry-driven [platforms] will we achieve high [economic] performance, which is the key objective,' said Mr Bozotti.

Mr Bozotti also underlined the importance of ETPs receiving the endorsement of Member States, in addition to support at EU level. The value of such support became evident recently when EU Heads of State and Government decided to invoke Article171 of the EC Treaty for the first time, to allow the pooling of private, EU and national research investment in the form of a Joint Technology Initiative (JTI).

The ARTEMIS technology platform is one of six highlighted by the Commission as likely JTI pioneers, focusing on embedded systems, an area of computer technology which is crucial for many industrial sectors. Already the Finnish government has announced that it will contribute ¿70 million over a seven-year period starting in 2007 to the new JTI, not to mention the involvement of global leaders like STMicrelectronics.

Small and medium sized enterprises (SMEs) are also important partners in the platforms. Panellist Alexander Von Witzleben is CEO of Jenoptik, one of several businesses taking part in PHOTONICS21, the ETP on photonics. This is an emerging technology, and one in which Europe maintains a competitive edge, thanks in part to SMEs. 'We [SMEs] are often more competitive in our markets than larger players,' Mr Von Witzleben told delegates. The key to SMEs' success, he said, is the fact that they are embedded locally and so collaborate closely with universities and research institutes.

Mr Von Witzleben pointed to the German city of Jena, in which his company is located, where all the right conditions are being met for innovation. Thanks to a huge number of SMEs, skilled human resources, good schools and universities, and big research institutes such as the Max Planck Institute, the city has witnessed a doubling of its growth in the last 15 years, outstripping its country's national growth levels, he noted.

Yet despite such seemingly innovation-conducive conditions, Europe is losing out as large companies globalise their R&D and, in some cases, relocate their operations to emerging economies such China and India, where costs are lower, skilled labour is in abundance, and the regulatory framework is less strict. These countries are new markets which European companies wish to exploit: to survive, they must go where the best business conditions are met, said Mr Bozotti.

Re-location is an option perhaps for big companies, but not viable or necessary for SMEs, claimed Mr Von Witzleben. Two-thirds of the world's semiconductors could not be produced without the optics delivered by the companies in Jena, said Mr Von Witzleben, adding that there was very little difference in the cost between hiring a highly experienced engineer in Germany and China. Therefore, the only way to keep driving innovation forward in Europe is by investing more in the education of people and in the excellence which is already there, he said.

Other areas which panellists identified as key to boosting innovation include setting world-class standards that grab the market, in the mould of the GSM and ADSL experiences, finding agreement on a common intellectual property rights system, and harmonising Europe's regulatory framework. Work is underway by the Commission to tackle all these areas, said Ms Reding, and in particular the red tape which she referred to as the 'biggest enemy' to innovation.

However, she reminded delegates that the regulatory framework is a problem which has to be addressed not only by the EU, but by national and local authorities too. 'A new regulation starts with 10 lines, after going through the [European] Council and Parliament it has 100 sentences, and by the time it is applied into national law, it is 500 sentences long,' explained Ms Reding. 'What we need is a change of mentality by policymakers at al levels,' she said, adding that any help from industry would be greatly appreciated.

Mr Aho said that the discussions illustrated that it is neither solely the funding of technology, nor dealing with policy issues in isolation, which is important. 'We have to concentrate on the whole ecology and come up with some broader objectives. 'That's why we [the expert group] proposed a European Pact for Research and Innovation,' said Mr Aho. He likened the pact to the single market challenge in the 1980s, which looked first for European commitment and then support from national governments.

While welcoming the progress made by the EU's Finnish Council Presidency in bringing innovation to the table, and willing political leaders to turn rhetoric into action, Mr Aho said there was still a long way to go: 'we have to take faster and longer steps in the future to reach the goals'. Unlocking further the innovation potential in Europe will soon be in the hands of the German government, when it takes over the Presidency tenure on 1 January 2007.