Interview: Esko Aho on creating an innovative Europe


Following the Hampton Court summit, the Commission mandated a four-person group to consider what new efforts are needed in the field of research and innovation to achieve the Lisbon goals. The former Finnish prime minister Esko Aho, who chaired the independent high level study group, explains to what the ‘pact for research and innovation’, called for by the group’s final report, means.

What is the proposed ‘pact for research and innovation’? 

This pact has two major motivations. The first is to get strong political commitment at national and European levels. Efforts should not be considered individually, but as a package of efforts for the creation of an innovative Europe. Secondly, we have come to the conclusion that in the field of innovation simultaneous and synchronised efforts are needed in many fields, not only in financing innovation or financing research and development efforts – but also in market creation, mobility of resources and in our attitudes and values. To achieve this type of goal, which is not a single goal, we need new methods and in our opinion a pact is good method (as it was when the single market deal was originally concluded). 

Previous innovation papers have already identified Europe’s key weakness in the field of research and innovation and listed the remedies. What is new in this pact? 

Everything has been said as far as the concepts and practical terms are concerned. There’s a major difference in how these elements have now been put together. Earlier the paradigm was: let’s put money in the research and innovation sectors to preserve our social framework and structure. We propose to integrate social framework and system into the innovation policy. 

For example, the Wim Kok report was a typically balanced proposal – for some it promised social security, social Europe to be preserved and for some others it promised more resources for innovation. And this is not working, as we have seen. It is not increasing the resources for R&D and it is not able to preserve the social model of Europe because the social model is going to be eroded due to decreasing resources. 

This kind of combination of efforts has not yet been proposed. The idea of the pact is also that we should be much more concrete than we were in Lisbon. Not speaking about the principles but the practical efforts needed such as implementing the single market in venture capital, in which there are still several obstacles. Implementing the single market in pharmaceuticals is another example. 

Some of the issues and sectors are sensitive, but if you always do things acceptable to all, you are not doing anything. So far we have made progress by using the lowest common denominator. And when creating innovative society and Europe and to move ahead you need to do reforms that are not the lowest common denominator. Like we did in the late 80s and early 90s when the single market was implemented. Every country had to accept even negative things to reach the overall goal which was the single market. 

What do you mean by a paradigm change? 

A good example of this is the services sector and regulation. Those opposing the services directive don’t understand that it is a crucial element in creating an innovative Europe. You cannot increase resources for R&D if you don’t have a common market for services, that’s the paradigm. 

How can the paradigm change be communicated to people? 

We did it with the single market objective. We explained to the people that we have to remove national standards and to take European ones, because it’s good for all in the longer term. These were critical decisions to be made. In Finland for example, the liberalisation of telecommunications was a tough thing as there were losers. But there was a win-win position at the higher level. Now we are struggling with other sectors to do the same and services sector regulation is a good example of it. 

Why do we need high-level independent co-ordinators on various sectors? 

The idea is that, for example, in the e-health sector, you cannot go ahead only with one sector such as technology investment, you also need to understand the organisational requirements and the concept of how health care sector services are being provided. So, cross-sectoral efforts are needed. In the transport and logistics sector, for example, cargo trains are extremely slow, even though the engines are powerful, because the infrastructure is fragmented. Trains cannot move inside Europe from one place to another in the most efficient way. That’s why we need coordinators who can create processes over organisational borders. The present situation is terrible. It is not acceptable. We need to establish new coordinating powers. 

What is the position of high-level co-ordinators on the European political scene? 

The Commission needs to carefully consider the division of labour. 

You propose increasing the share of structural funds dedicated to research and innovation from the current 5.9% to 20%. Is this feasible? 

Yes it is. And it is extremely important for the new member states who need investment in old, traditional infrastructure. For them, these funds represent a good moment and opportunity to jump over certain phases and change structures. Some countries have already done it in the telecommunications sector and moved on to mobile communications. 

What are your recommendations on the 3% target? 

This target is valuable as an indicator of European innovation performance. European scale reforms affect national performance. Individual countries alone are not able to reach the target. They need European markets and that is why we need to act before it is too late and before the countries use other, individual, means. Reforms such as the services directive will strongly support individual member states’ efforts to increase the percentage of GDP used for R&D. 

How can more public procurement be encouraged to drive demand for innovative products and services? 

There must be some balance between requirements of competition and requirements of innovation. When having public procurement to drive innovation you cannot look only at competition and choose the cheapest solution. You have to include development costs into this kind of procurement. You cannot always know exactly beforehand how much resources you need for that procurement to get innovative solutions. 

Where should Europe now start the reform from? What are your priorities? 

E-health, pharmaceuticals, energy, environment, transport and logistics, security and digital content – sectors have a good combination of risks and opportunities and that is why we have chosen these as the top priorities. There is urgent need to do something on these sectors and our knowledge base on these fields is rather good. There are other possible sectors as well but the EU should now decide that these are the first sectors we want to invest in and where we want to move on as far and fast as possible. 

To read the interview news, click here.

Subscribe to our newsletters