Stefan Schepers is a partner and director of the management consultancy EPPA and Secretary General of the High Level Group on Innovation Policy Management. He wrote this op-ed after a speech given by Herman Van Rompuy just before the EU summit.
Both OECD and the EU Commission rightly identify innovation as a central driver of economic growth and job creation; the two of them being essential to maintain Europe’s welfare societies.
However, innovation cannot be stimulated in the same way as a market can be opened up or a new industry standard decided upon. Innovation cannot be regulated, it is only possible to create the framework conditions. Innovation is a complex process of transformation of knowledge and ideas into products and processes which create added value for both commerce and society.
It is not even limited to business, real innovation can only take place in the triangle business-university-government and all of them have to innovate to achieve new forms of cooperation which facilitate innovation processes. Financing research projects is a necessary step but not enough to achieve tangible results on markets.
The EU’s growth strategy, Europe 2020, has set some ambitious goals for research, reaching 3% of GDP in all Member States and introducing a paradigm shift towards focusing on contemporary societal challenges, including resource efficiency, one of the priority initiatives in the research and innovation framework programme Horizon 2020.
However, doubts exist about the chances of achieving these objectives and others equally necessary to improve our competitiveness and our quality of life.
This is not first and foremost due to a lack of budgets or good will, but the result of systemic fault lines in Europe’s innovation policies, such as fragmentation between European and national policies, lack of inter-operability between Member States’ policies or even the lack of an innovation policy worthy of its name in many Member States.
But it is also due to the absence of proper impact assessment of economic and fiscal policies on welfare states and their instruments, failure of governance and regulatory innovation, a governance culture often not appropriate for coaching innovation processes, insufficient business-university cooperation and research funding coordination, and this is not even an exhaustive list of the problems hindering or even blocking progress towards the desired objectives.
Against this background, the Polish Presidency decided in 2011 to launch a project to focus on the framework conditions of innovation policy in Europe. Contrary to other efforts, which look at innovation in a particular economic sector, this one took a holistic approach on what will be needed to deliver positive results.
They agreed on the need for a collaborative model to create the enabling context and the integrated model which facilitate the creativity and dynamics, interactions and feedbacks, the instruments, policies, regulations and funding that determine the outcome of innovation processes.
The approach itself was innovative: an independent group was set up to ensure free thinking, unencumbered by official mandates, working under the Chatham House Rule and with a tripartite composition to ensure serendipity and creativity among officials from the European Council, Commission and Member States, senior managers from different business sectors and academic experts.
This High Level Group on Innovation Policy Management delivered its report to the Competitiveness Councils in May. In particular its key recommendations, to work to complete a European innovation ecosystem, were widely welcomed. It also received endorsement from the President of the European Council in a recent speech at the 25th anniversary reception of EPPA, which managed the project for the Polish Government. However, it will probably fall to the future Commission to continue to innovate the processes launched and complete or amend them.
It will require the development of a systemic and collaborative model in order to broaden the current R&D and funding approach:
- to cover the whole innovation chain (from research via demonstration to market);
- to cover industry and services, high-tech and traditional sectors, business management and public governance, industrial products, processes and intangibles (such as design, intellectual property, geographic indicators);
- to ensure optimum use of all the available resources throughout the Single Market and to ensure interoperability between relevant national policies
- develop an integrated innovation model to ensure policy and funding coherence (structural funds, public procurement, research funding, innovative regulation and business-government cooperation mechanisms).
In the HLG’s opinion this can only be done by also establishing an overarching authority for innovation, not in a formalistic sense, but inspired by the steering capacities which some of the most innovative economies in Europe have developed.