Speech by Mr Malosse at the conference on innovation

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Speech by Mr Malosse at the conference on innovation


Thank you, Minister,

Ladies and gentlemen, Mr Sepi,

Thank you for your introduction. As the minister is here, I would like to let him know, on behalf of all the members of the European Economic and Social Committee, that his speech was very much in line with the EESC's opinion on the subject of innovation. We were very moved to hear you emphasise the role of SMEs, the need for consistent policies and, above all, the practical means of implementing them, and not just major principles and strategies. I wish you every success in convincing the other institutions, in particular the European Commission, of the very relevant points in your document.
Congratulations and thank you.
Ladies and gentlemen, dear colleagues,
I am very happy to outline the EESC's stance on the subject of innovation. My task is made easier by the fact that the minister representing the Belgian presidency has already emphasised in broad brush strokes the points we hold most dear. I should also say that the position I will be taking, contrary to what is stated in the programme, is not only that of the social partners, but that of civil society; it is the view of the EESC, which does mean the social partners, the employers of Group I and the workers of Group II, but also includes Group III and the various interests it represents. I think this is an important point. Innovation today is not only about companies. It is partly about innovation in companies, of course, by researchers, engineers, bosses and workers, but it is also about innovation by those hoping to set up businesses, younger and older people wanting to start out on an entrepreneurial adventure, but who do not yet therefore belong to a company. It is also about innovation within associations, groups and cooperatives. It is about doing something new that could lead to a new economic and social activity within society and may thus generate value added. The starting point is a situation where products and services abound, but economic activity can be born out of a novelty, a new need, and new responses to needs. This is how business, jobs and above all dynamism in society and the will to succeed are generated.
As Commissioner Tajani is not here, I will highlight in my own words what sets the EESC apart from the Commission. What the Commission and the EESC have in common is what they see. We are all aware that the single market and the European Union do not value innovation projects (the European Union as a whole by the way is the largest economy in the world and accounts for over 16% of world GDP, compared with 14% for the USA). Our policies on innovation, research and transfers between universities and business are generally inadequate, not least since they are so fragmented. This fragmentation in the area of innovation is particularly worrying. Instead of seeing the potential for ideas represented by 500 million people, as the ideas are largely in people's heads, we have compartamentalised without securing the transfer of ideas. Often, innovation occurs when ideas are transferred from one sector to another, like for instance when microcomputers were applied to bakers' ovens. After 50 years of European integration, there are still too many obstacles and not enough integrated policies, and the result is fragmentation.
The EESC also agrees with the Commission that innovation should respond globally to society's objectives, such as growth and employment, but also sustainable development, social cohesion, prosperity, and the fight against discrimination and all forms of exclusion.
The EESC agrees with the Commission that there is a need in the EU to bolster anything that helps to build a spirit of entrepreneurship, innovation and creativity at all levels: among workers within a business (e.g. company cohesiveness), among business owners (e.g. corporate social responsibility), and also throughout society, even among associations, in the cooperative sector and within foundations; anything that helps to energise society.
The EESC agrees with the European Commission that the right framework conditions are needed in the area of economic policy, public procurement policy and regional policy.
There are three points on which we differ somewhat.
The first relates to the European Commission's current analysis and we are counting on the Belgian presidency and the Council to "put the house in order". The European Commission is planning to make innovation part of its research and development policy. This may seem like a slightly needless debate, but the EESC believes that research and development are part of innovation. Innovation is a far broader concept. Innovation is not just about the cutting edge of technology. It can be about the application of methods, new very simple ideas for every day life, such as the application of computer technology to bakeries. To make innovation a part of research and development is to take much to narrow a view.
The second point of divergence from the European Commission's line relates to the role of SMEs. The EESC believes that the potential for innovation in business lies with SMEs. A few years ago, the EESC carried out a study that showed that there were approximately 3 million SMEs in the EU sitting on dormant innovations; the ideas were there, but as the companies were not big enough to take the risk and develop these innovations for the market, they stayed on the shelf. This enormous potential must be unleashed by providing for knowledge transfer, building up contacts and clusters, developing exchanges between universities, research centres and companies, and always thinking of SMEs first, which unfortunately is something to which the European Commission pays only lip service. The Small Business Act launched in December 2008 was supposed to put SMEs at the heart of this innovation policy. Currently, at European Commission level, this is not unfortunately the case as responsibilities in this area are fragmented. SME policy will not be at the heart of the future innovation plan, as it will be directed largely and excessively towards research and development, which in our view is a mistake.
The third criticism is outlined in our opinion. For the EESC, the mainstreaming of innovation policies is fundamental; in other words, education, innovation, research and development go together. A vertical view of things runs counter both to reality and to the desire for effectiveness. One example is provided by the instruments used by the European Commission to measure innovation. There are six observatories that analyse the state of innovation in the EU from different perspectives. Six observatories is too many. There are six observatories, because there are six departments dealing with this issue. Our recommendation is that there should be a single instrument managed by economic and social players, not by administration departments.
That sums up what I wanted to say about what we have observed. Now, let's move on to our proposals.
As Mr Sepi pointed out, the key message is that we need the means to reach our ends. This in my eyes is the EU's main challenge today. The Lisbon strategy did not work. The objectives were good, but the resources were not there to carry them through. The EU 2020 policy is targeting green growth and aiming to breathe new life into the world's foremost economic power in order to make it a leader once more in the areas associated with the knowledge-based society and sustainable development. We have what it takes to succeed in this challenge, but we need to make sure we have the means. First and foremost this means political resources. Our opinion's message is above all about political willpower. A few years ago, European Commissioner Philippe Busquin launched what was excellent idea, the European research area. Today, the EU's research budget represents barely 5% of overall public and private sector spending on research in the EU. This necessarily has only a marginal impact. If public and private sector efforts were better coordinated there could be a real leverage effect; it is very important to develop public-private partnerships. Unfortunately, Philippe Busquin's proposals remains a dead-letter.
I believe that the EU's credibility is on the line. How can we talk about innovation and a European innovation plan, when at Community level we are lacking the basic ingredient for maximising innovation, in other words, the Community patent? It is 40 years since the idea of a Community patent was first launched, and it has still to materialise. It is three or four times more expensive to patent an invention in the EU's member states than in the United States. The United States is said to have the most ideas and the most talent because more patents are filed there than anywhere else in the world. That may be true, but it should be noted that a third of US patents are filed by Europeans who have opted to avoid the complicated and onerous EU system where patents must be filed and paid for country by country. In March 2000, the heads of state or government gave the Industry Council three years to come up with an agreement to bring the Community patent into force. That should have happened in 2003. This was the most concrete element of the Lisbon strategy. Linguistic reasons are falsely given for blocking the project. The real reason is that the financial interests of the national patent offices are at stake. As long as the EU has not set up a single simple Community patent, making it genuinely possible to make the most of inventions and innovations, any discussion of innovation will be void of credibility.
In terms of governance, the first point is the functioning of European programmes, and research programmes in particular. For 30 years, the economic players have been telling us that the research programmes are too complicated, that ways must be found to streamline them and that the time limits for examining dossiers and formalities are becoming more complicated. Speeches on European research programmes for SMEs are meaningless. An SME cannot risk spending two to three hundred thousand euros to take part in a European research programme that has a one in ten chance of getting a positive response. Even if the response is positive, it only generally comes after one and half or two years. This change to European research programmes is vital.
The other matter is that of sharing governance with civil society. I was very interested in Mr Marcourt's view on the role of clusters. It is crucial to set up centres in distinct sectors to bring together resources and business ideas and concepts, from companies big or small, universities, research centres, administrative departments, financiers, and any individuals who can assist a given sector. This currently exists in various countries, take for instance the "pôles de compétitivité" in France for instance, and cluster development, but it only happens at national level. It is crucial that this be developed at European level. This cannot be done without the involvement of the economic and social players. This is true of all the programmes announced by the minister on entrepreneurship and we are strongly in favour of them. On this note, the EESC launched the idea of an ambassador for young entrepreneurs, to be managed by the EESC with political and financial support from the EU. This ties in with the idea of a new form of governance for European policies, which should be grassroots led.
The budget is the final ingredient when it comes to resources. Times are hard. Budget cuts are a reality for all the Member States, but will also affect the European institutions before long. We need to make better use of the EU budget. Currently, research, development and innovation account for 5 to 6% of the EU's budget. This is not enough. We are told that this is because regional policy programmes also finance innovation. The same should be done for research, cluster policy and the link with education; more must be done to make the most of the potential offered by public budgets. Against this backdrop of a state financial crisis, there is room to be innovative in managing public funds. Innovation should not just be about budget cuts. The national and European budgets should be brought more into line with each other. In the fields of research and support for innovation part of the national budget could be transferred to European level. Why not do now for innovation, education and research what we did 50 years ago for agricultural policy?
I will round off by making an appeal to the European institutions: the European Commission and the Parliament first, with the support of the Council, that we give ourselves the means to achieve our ends. As our draft opinion proposes, we need a roadmap. As the minister said, a definite action plan must be put together, including dates, resources and deadlines, so that a concrete commitment can be made for the years ahead to at long last unleash the immense potential for innovation that exists within the EU, but that remains unhappily fragmented, beleaguered by too many doubts. I remain very optimistic. We believe that the potential is there, the ideas are there, the energy is there; all that is missing is the political willpower, and for that we turn to the Commission, the Council and the European Parliament.

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