Structural funds ‘key to innovation plan’


The overwhelming majority of innovation experts want EU structural funds to be used to get innovative products and services to the market, according to a new survey. As the European Commission readies its new innovation plan, a consensus is also forming around the need to slash bureaucratic procedures and boost venture capital funding.

These were the main findings of the General Electric (GE) 'Innovation Barometer', an independent poll of 240 opinion leaders on EU innovation policies carried out by StrategyOne and unveiled in Brussels yesterday (14 September).

The research, published in conjunction with GE's 'ecomagination challenge' for open collaboration on new technologies, comes ahead of the Commission's 'Innovation Union' strategy to be presented in October.

Against the backdrop of the economic crisis and the ensuing loss of millions of jobs, the EU's 'Europe 2020' strategy has set the bloc a series of headline targets focussed on smart, sustainable growth and a competitive, green European economy over the next decade.

The Commission's Innovation Union plan is one of seven flagship initiatives in Europe 2020 and the barometer respondents are in no doubt about the importance of innovation in the coming years. 90% believe it is the main lever for creating a more competitive and greener economy and 86% see it as the best way to create jobs in the EU.

Structural funds: Cut red tape and be bolder

91% of the respondents – who included MEPs, Commission officials and business and academic leaders – want the EU to use its structural funds to accelerate the uptake of innovation products and services.

Asked what is preventing companies from accessing EU money for the development of innovative business ventures, 88% cited bureaucratic procedures that slow down the absorption of the structural funds. More than 60% also pointed to a lack of expertise on the ground and the inability to come up with matching funds.

But it is not only the drawn-out bureaucratic procedures which are hindering innovation, but also competition from "easier" projects, said respondents. Innovative ventures that are perceived as risky and harder to measure in terms of success often lose out, they said.

The Commission has earmarked €80 billion for innovation in structural funds, stated a Commission official. Yet one think-tank respondent called for a shift in emphasis from traditional to green business and a focus on innovation in knowledge and education.

"How can we do this? Through (e)government and (e)education. These are innovative new solutions for the health and education sectors that help to avoid bureaucratic procedures," they affirmed.

EU Research, Innovation and Science Commissioner Maire Geoghegan-Quinn, speaking at the launch, said that the barometer results echoed the Commission's view of the challenges ahead and promised a "raft of bold actions" in the upcoming EU innovation strategy.

"We will promote a broad and inclusive view of innovation, including in business models, in management structures and processes, innovation in how the public sector develops and delivers its services, as well as promoting social innovation," she stated.

Geoghegan-Quinn said that the Commission is exploring how structural funds can be better used to support innovation and recognised the need for action on intellectual property. "31% of all patents emanate from the EU and 31.4% from the US – Europeans therefore are clearly great inventors, but we need to become much better at developing these patents into new products and services," she said.

"The prohibitive cost and complexity of patenting [in the EU] is a crucial issue for innovation," she added.

Irish MEP Sean Kelly (European People's Party), who hosted the results launch, said that Europe must stop taking the lead from the United States – where venture capital, public-private partnerships and effective regulation have made it the world leader in innovation.

"We need to learn from our American partners and foster an EU which has minimal bureaucracy, favours innovative start-ups, especially in the SME sector, and leverages structural funds to maximum effect to create jobs and growth in the future," he said.

During a panel discussion on the Innovation Barometer, Kelly said invention and innovation often start small before being commercialised globally. "We need to ensure that Europe takes its place at the forefront of innovation, to ensure jobs and prosperity for our continent far into the future," he said.

"The Innovation Barometer points a clear path for policymakers as to how to achieve this goal," Kelly concluded.

Dr. Tore Land, director of GE's ecomagination initiative in Europe, the Middle East and Africa, said that he is "firmly convinced" that investing in innovation is the answer to the economic challenges facing Europe.

GE is currently increasing its research and development spending and recently launched its €160 million 'ecomagination challenge' to fund and support the emergence of new technologies, he added.

Hans Martens, chief executive of the European Policy Centre (EPC), said that it is a case of "innovating or dying" for Europe in the coming years and called for a new innovation culture in the public sector. The EU should play a bigger regulatory role and create incentives to help drive innovation, he stated.

Patrick Lamot, representing the Belgian EU Presidency, was not optimistic about swift progress on the creation of an EU-wide patent, one of the most significant bottlenecks for innovative products and services in Europe.

The Belgian Presidency is hoping to get consensus on the proposed trilingual patent, he said – but added that the issue "has existed for 50 years" and recalled that the issue was on his country's agenda when it held the EU presidency in 2001.

Innovation has been the policy leitmotiv in Brussels for a number of years, culminating in the decision to designate 2009 the European Year of Creativity and Innovation (EYCI).

Policy in this area was split between a dozen or so separate directorate-generals until November 2009, when European Commission President José Manuel Barroso named Ireland's Máire Geoghegan-Quinn as the EU's first innovation commissioner (EURACTIV 30/11/09).

The notion of streamlining innovation policy had been well flagged in Brussels policy circles, but the decision to marry the innovation portfolio with the existing research dossier raised some eyebrows (EURACTIV 23/09/09).

The EU executive is also expected to publish a major new research and innovation strategy in time for the autumn summit of European leaders (EURACTIV 18/03/10).

  • 28-29 Oct.: Autumn European Council summit to debate innovation strategy.
  • 17 Dec.: EU leaders to adopt Commission's Research and Innovation plan.

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