Blog Post

The global race for innovation

Commissioner Moedas' speech at the Bruegel event "The new European research agenda".

By: Date: January 29, 2015 Topic: Innovation & Competition Policy

Ladies and gentlemen, esteemed guests,

First of all, it is a real pleasure to be here. Today’s discussion is one I’ve been looking forward to a great deal. I want to take this opportunity to tell you why I think Europe is well positioned in the global race for innovation and knowledge creation.

If there is one thing Europe does well it’s "pessimism". Pessimism always sells, even in politics. So let me instead focus on the strengths we have, not forgetting, of course, the many things we need to improve.

Innovation is much more than a technical process.

The first thing I want to tell you is, I am happy that now it is almost a truism, to state that innovation is much more than a technical process. Innovation reaches from fundamental research to business process and plans, to marketing and to design. The second thing I want to say, is that I believe in a more democratic paradigm of innovation.

We have moved from a world in which Schumpeter would say, and I quote, "The producer initiates the change and educates the user", to a world in which innovation is, in many cases, created by the user. Von Hippe, from MIT gives several examples:

  • Irrigation machines
  • The Heart lung machine

Harry Chesbourough has a good image for this: that the funnel between producer and users now has many holes.

Third, I believe that this evolution can open more opportunities for disruptive innovation. Disruptive innovation is and often quoted term, but sometimes, it is not used in its precise form. Disruptive innovation creates new markets by making something – a product or service – simpler, more affordable, and more accessible. This is the kind of innovation that creates solid growth, jobs and a sustainable future.

In Europe, we are better positioned than most people assume.

So, considering this more precise view on innovation, where does Europe stand? I will argue that we are better positioned than most people assume. Saying that we are well positioned is not saying that everything is great. On the contrary. What I am saying, is that we have tremendous untapped potential.  In Europe, many things are working. If we build on our strengths, on the things that make us who we are, our solutions will be legitimate, effective and sustainable.

And here I must thank Professor Reinhilde Veugelers for her thoughtful and insightful memo "To the Commissioner for Research". It makes many astute observations of our current situation, and is refreshingly frank in its recommendations.

It is true that some areas of the world are moving faster than Europe. Economic and political circumstances are rarely perfect. We overcome one challenge to face another. But there are ways to make our economies more resilient: our breakthroughs more socially and commercially valuable. Ways to lead global markets with European innovation.

We have almost limitless potential. The EU is the world’s largest trading block, with 500 million consumers looking for goods and services. The EU benefits from being one of the most open economies in the world. The kind of openness I want to see benefitting research, science and innovation.

Our global standing in these three arenas rests on the creative freedom of our scientists and researchers. On the people engaged in fundamental, curiosity-driven research. Research that will pay for itself in the long run.

There is one thing we certainly don’t have and that is a fully integrated market across the EU. We came a long way in our internal market and we can still achieve much more in several areas, including the European Research Area. But gaining from a more integrated European market.

Still, we have to accept that we will always be different from, say, the United States. Despite all our efforts, we will always have a more fragmented market. We have 28 governments, 28 science and innovation policies, 23 languages, and diverse cultural and historical experiences.

That fragmentation is an enemy of efficiency, it prevents some gains from scale  – no doubt about it.  But we should also embrace its benefits. The main one is "diversity". Diversity is a source of creativity and innovation. Linda Hill, at Harvard University, studies creativity in groups and she highlights the fact that diversity may slow thing does, but leads to more innovation and creativity. The thing is, that in Europe, we tend to focus on the negatives, on the fragmentation of our markets. In the EU we have the great advantage, and privilege, of a pool of talent from 28 member states, not to mention those who come from outside to work and study in our centres of excellence.

Each scientist brings their own outlook and expertise. Each researcher brings a different perspective to the table. Europe is an ideas factory for everyone within our shores.

The diversity of Europe creates challenges, but also a lot of potential.

So, for me the diversity of Europe creates challenges that we have to address – with policy responses, like ERA and other measures, to better coordinate science policies across Member States. But this diversity also creates a lot of potential. We need this fragmentation for healthy competition. And for that we need a rising tide of all Member States improving their incentives for research and innovation.

This is why addressing the knowledge divide is crucial! All European countries, even the most advanced, have to have an enlightened, self-interest approach in this: they will all benefit from a rising tide!

A second, often heard criticism of Europe in this area lies in cultural explanations. I really don’t agree with these kind of explanations, that statement that we are more risk averse, or more conformist. The great Venture Capitalist Marc Andresseen once said that his experience is that on average, European Entrepreneurs are better than Americans…adding "they have to be".

That is the crucial thing!

The problem is not our culture, it is the incentives we have. And it is true that we need a lot of work to improve the framework conditions for innovation and research. We have far too many barriers in our markets. This is why my first priority is precisely the reforms to lower these barriers.

So, what are we to do in the next 5 years?

In my hearing, I stated my three main priorities. In my view, these are the ones that will help tap into the huge potential I see in Europe.

First, create the framework conditions for a more productive exchange of research results, fundamental science and innovation. Things like:

  • Screen the regulatory framework in key sectors in order to remove bottlenecks
  • Accelerate the implementation of standardisation
  • Promote the  public procurement of innovation and innovation in the public sector
  • Promote a venture capital culture
  • Reduce bureaucracy in science and innovation systems

Second, is to consolidate fundamental research as the flagship for Europe. As the essential foundation for a knowledge-based society. Working towards a single, open market for knowledge though open science. Third: implement Horizon 2020 and the new Investment Plan to leverage the Europe economy towards a higher plane as a research and innovation-based area. Working towards a single, open market for knowledge though open science. It is better to focus on our potential than to dwell on illusions. We will always be different from other parts of the world. But that difference has many benefits!

We need to focus on these benefits; we need to have a rising tide, in which the full diversity of Europe works for us, not against us. We need to focus on incentives, not on convenient cultural explanations. Our scientists and entrepreneurs are world class. But they still face far too many barriers. Let’s focus on those. Let’s focus on reforms.

I look forward to debating this with you! And not just today!

Check Against Delivery.

Read more:

Undercutting the future? European research spending in times of fiscal consolidation


Republishing and referencing

Bruegel considers itself a public good and takes no institutional standpoint. Anyone is free to republish and/or quote this post without prior consent. Please provide a full reference, clearly stating Bruegel and the relevant author as the source, and include a prominent hyperlink to the original post.

Read about event More on this topic
 

Upcoming Event

Apr
2
14:30

Find my virus: Mobilising AI and big data to fight COVID-19

At this event, the panellists will discuss the role of AI and big data in the fight against the coronavirus crisis.

Speakers: J. Scott Marcus, Alex Sandy Pentland, Georgios Petropoulos and Marietje Schaake Topic: Innovation & Competition Policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels
Read about event
 

Past Event

Past Event

POSTPONED: Banking on Digital: a conversation with Ana Botin, Executive chairman of Santander Group

This event will feature a conversation between Anna Botin and Guntram Wolff on the future of the European Banking sector in face of the digital revolution.

Speakers: Ana Botin and Guntram B. Wolff Topic: Finance & Financial Regulation, Innovation & Competition Policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: March 25, 2020
Read article More on this topic More by this author
 

Blog Post

Artificial intelligence in the fight against COVID-19

Artificial intelligence can help fight the coronavirus through applications including population screening, notifications of when to seek medical help and tracking how infection spreads. The COVID-19 outbreak has triggered intense work on such applications, but it will take time before results become visible.

By: Georgios Petropoulos Topic: Innovation & Competition Policy Date: March 23, 2020
Read article More on this topic More by this author
 

Blog Post

Big data versus COVID-19: opportunities and privacy challenges

All available resources need to be brought to bear on the novel coronavirus COVID-19. To what extent can digital technology help? What risks are there in using big data to combat COVID-19, and what policies can mitigate any limitations that these risks impose?

By: J. Scott Marcus Topic: Innovation & Competition Policy Date: March 23, 2020
Read about event More on this topic
 

Past Event

Past Event

Braver, Greener Fairer: European Industrial Policy in times of coronavirus

At this livestream event by Bruegel and the FT Brussels Briefing we were joined by Thierry Breton to discuss the the challenges posed to Europe's Industrial Policy by COVID-19. This event is ONLINE ONLY

Speakers: Thierry Breton, Sam Fleming and Guntram B. Wolff Topic: Innovation & Competition Policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: March 19, 2020
Read about event
 

Past Event

Past Event

ONLINE ROUND TABLE: Future of the EU-UK science cooperation

How do we rebuild and keep the science cooperation between the EU and the UK?

Speakers: Michael Leigh and Beth Thompson Topic: European Macroeconomics & Governance, Innovation & Competition Policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: March 17, 2020
Read about event More on this topic
 

Past Event

Past Event

CANCELLED: The American AI Initiative: A conversation with Michael Kratsios, Chief Technology Officer of the United States

Part of our executive leadership series, Michael Kratsios, Chief Technology Officer of the United States, will discuss the American AI initiative with Bruegel's Director Guntram Wolff.

Speakers: Michael Kratsios and Guntram B. Wolff Topic: Innovation & Competition Policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: March 16, 2020
Read about event More on this topic
 

Past Event

Past Event

Global competition and digital change: How should we update European competition policy?

The event addressed the need for modernising European competition policy due to structural changes in the economy caused by shifting global economic landscapes on the one hand and ongoing digitisation of the economy on the other.

Speakers: Adina Claici, Alicia García-Herrero, Kay Jebelli, Kai-Uwe Kühn, Guillaume Loriot, Georgios Petropoulos, Luisa Santos, Christof Schoser, Maarten Smit, Philipp Steinberg, Achim Wambach and Guntram B. Wolff Topic: Innovation & Competition Policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: March 9, 2020
Read article More by this author
 

Opinion

Europe may be the world’s AI referee, but referees don’t win

The EU needs to invest in homegrown technology.

By: Guntram B. Wolff Topic: European Macroeconomics & Governance, Innovation & Competition Policy Date: February 19, 2020
Read article More on this topic More by this author
 

Opinion

Europe Needs a DARPA

Germany needs an industrial revival of the sort it experienced in the late nineteenth century, but this will be possible only if the state offers technological backing to German companies. The US government’s successful Defense Advanced Research Projects Agency should serve as a model.

By: Dalia Marin Topic: Innovation & Competition Policy Date: February 14, 2020
Read article More on this topic More by this author
 

Podcast

Podcast

The EU's plan to catch up on artificial intelligence

While the US and China have been setting the pace when it comes to Artificial Intelligence, the European Union seems to be lagging behind. What are the Commission's plans to finally catch up? Will AI increase the gap between big and small companies? This week, Nicholas Barrett is joined by Julia Anderson and Guntram Wolff to discuss the EU's plan for AI.

By: The Sound of Economics Topic: Innovation & Competition Policy Date: February 14, 2020
Read article More on this topic More by this author
 

Blog Post

The dynamics of data accumulation

The bigger you are, the more data you can harvest. But does data accumulation necessarily breed monopolies in AI and related machine learning markets?

By: Julia Anderson Topic: Innovation & Competition Policy Date: February 11, 2020
Load more posts