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Businesses have welcomed the EU's so-called lead-markets initiatives which seek to promote innovation areas with high growth potential, as long as the public sector limits its actions to improving the business environment by, for example, setting common standards.
'Lead markets' are high-growth potential markets for research and innovation-rich goods and services. They are markets in which EU industry can develop a global competitive advantage provided that it gets support from the public sector as regulator, customer or facilitator. The concept
was introduced into EU terminology by the Aho report
(January 2006) on creating an innovative Europe. The idea is to identify promising new areas where public authorities can facilitate industry-led innovation by removing certain barriers, setting standards, improving procurement rules or providing support for research.
In summer 2006, the Commission consulted the different technology platforms
to get their views on the concept of lead markets, as the platforms gather all stakeholders on various specific fields (nanotech, hydrogen, pharmaceuticals, food) and can in this way help identify possible areas for lead markets.
The concept was later taken on board by the Commission in a Communication published in September 2006 (Innovation: putting knowledge into practice
). This ten-point programme seeks to encourage innovation both on the supply and demand side by "developing a strategy for innovation friendly lead-markets". Primary target areas include those that respond to societal demands, such as transport, health, internal security and eco-innovation.
Member states gave their backing
to this approach in December 2006 and invited the Commission to present an initiative on lead markets in 2007.
The European Business Summit
on 16 March 2007 devoted one thematic session to 'European Technology Platforms: developing lead markets?'
"We are trying to create a demand-push," said Science and Research Commissioner Janez Potočnik, adding that the Commission's view on lead markets is not about artificially creating markets for research results but about creating business environment to allow industry develop and commercialise innovative products on a competitive basis.
The debate saw business pointing to concrete management issues linked to creation of lead markets and highlighting the importance of standardisation for the creation of lead markets. "Business needs regulation, not in the sense of for more laws but what comes to standardisation. If we get the standards right, for example on nanotechnology, we can create a really big market in Europe," argued Rüdiger Iden from German chemical giant BASF. "Thanks to our common GSM standard, we now have a lead market on GSM in Europe," added Jozef Cornu, chairman of a EUREKA cluster, MEDEA+.
As to the creation of lead markets as public-private-partnerships (PPP), speakers expressed doubts as to the viability of such co-operation. Answering to a question from the floor on the conditions of success and the critical success factors of PPPs, Rüdiger Iden said that "PPPs are not an answer to any consortia question, as it explodes in it complexity." "Intellectual property rights may be complex to deal with from time to time," added Koenraad Debackere, professor at KULeuven Research & Development.
A group of Commissioners in charge of competitiveness is currently identifying a number of pilot projects for lead markets. According to a Commission spokesperson, the group is looking into construction and e-health as areas for pilot projects, but "nothing is decisive yet".
A Commission communication on lead market initiatives, expected to be published in autumn 2007, will describe how they will be used to complement supply-side policies and how demand-side instruments such as regulation, standards, IPR, procurement and risk capital will be combined to improve business framework conditions.
"Implementation of this type of initiatives requires true project management. You need to manage research, follow markets and understand the competitive advantage of what you are developing, manage intellectual property rights and conduct market-watch to be sure to not to reinvent the wheel," said Monica Beltrametti from Xerox, also highlighting the importance of a clear division of responsibilities and accountability.
"You have wonderful initiatives in Europe - technology platforms, joint technology initiatives, lead markets - but there is not enough communication on the processes. I'm impressed by what is going on and truly hope these initiatives will be communicated outside so that they become a success," concluded Frank Brown, dean at the Business School for the Worlds (INSEAD).
With regard to lead markets, the European Association of Craft, Small- and Medium-sized Enterprises (UEAPME) has previously stressed that "all EU enterprises, not just a few 'national champions', must be able to access the innovation market and take advantage of it".
UEAPME believes that: "While incentives for 'early movers' may be an effective feature in this respect…such markets should not become closed circles for one or a few winners, but should rather pave the way for a gradual improvement of the whole market sector involved. Obstacles to market access and opportunities for SMEs should be thoroughly assessed during the suggested pilot project on 'lead markets' in 2007."
The Council believes that lead markets can help bring innovative products to market and underline that lead markets are about "creating conducive frameworks for innovation in specific areas of the economy where European firms could have a globally leading role, but where due to reasons related to for example burdensome regulation and systemic failures in policy and legislative coherence, this potential remains currently unrealised". It also calls for concerted approach to public intervention in the areas of product market regulation, standardisation, IPR, public procurement and removing legal obstacles.
(6 December 2006)
(13 September 2006) [FR]
[DE]
(20 January 2006) 
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