Despite low EU investment in research and development (R&D), Digital Agenda Commissioner Neelie Kroes has rejected widespread recourse to state aid to narrow the gap with Europe's international competitors.
Her statement came as a new expert group was established by the European Commission to develop smart technologies in Europe, such as photonics, nano-electronics, biotech and nanotech.
"In this tight fiscal environment, we absolutely cannot go for a subsidy race. We need sustainable investment in the right areas and we need to eliminate barriers to business," Commissioner Kroes made clear during a press conference on Key Enabling Technologies (KETs), which took place in Brussels yesterday (13 July).
Even if Kroes did not completely rule out using state aid as an incentive to boost smart tech investment in Europe, her stance represents a significant turnaround compared to previous EU positions on the issue.
Indeed, the document which currently outlines the Commission's view on KETs says that "well targeted state aid that addresses market failures is an appropriate instrument to increase R&D and foster innovation in the EU".
The paper was published in September 2009 and followed a previous increase in the amount of state aid allowed to trigger R&D in Europe.
If Kroes' position is representative of the entire college of commissioners, then KET industries, like semiconductors, nanotech or photonics, might have to rely on lower public support for their business in the coming years.
According to Commission figures, the EU has an R&D intensity of only 25% in high-tech manufacturing compared to 30% in the US. "Moreover, the high tech share within the total manufacturing industry in Japan is 33% larger and in the US even 50% larger than in Europe," reads the Commission's 2009 communication on KETs.
The potential of KETs
"Most of the goods and services that will be available in 5-10 years are still unknown, but surely they will be based on key-enabling technologies," EU Industry Commissioner Antonio Tajani underlined at the press conference yesterday.
KETs are more or less unknown among the wider public, but they are at the core of everyday technologies which change lifestyles and represent key elements of economic growth.
Mobile phones and smartphones are the most common examples. A simple device contains numerous chips (which belong to the family of micro-electronics), a camera (which is filled with photonics), nanotechnologies, advanced materials and in the future possibly even biotechnologies.
KETs are widely used in satellite communication tools, electric cars, photovoltaic cells and diagnostic systems, such as real-time avian flu test devices.
Expert group on KETs
To address the EU's structural problems in research and innovation, in particular in the strategic sector of key-enabling technologies, the Commission has established a group of experts to provide advices on the way forward.
The group started its work yesterday (13 July). It is chaired by Jean Therme, director of the French Atomic Energy Commission (CEA by its French acronym), and is composed of high representatives from industry and the academic world.
The high-level group's mandate is to develop a long-term strategy for KETs across Europe. The results of its work will be used for a new Commission document to be presented in 2011.