From dreams to reality

Europe has no shortage of great ideas, but there has been a failure to provide the money and support needed to back them up

The old certainties are gone. Europe can no longer rely on its traditional strengths to keep its economy healthy. The population is ageing and manufacturing is losing out to cheaper competition from different parts of the world. Success and wealth must come from different places. Europe needs to innovate.

That is easier said than done, as the politicians are discovering. The conditions need to be right. Whether through looser regulation or public financial support, innovation can flourish only given the right conditions. When they meet for a summit in Brussels next week (27-28 June) leaders of European Union member states will issue a demand that a set of initiatives to stimulate innovation be agreed swiftly. It will not be the first time that EU leaders have called for action to boost innovation. It will not be the last.

Evidence suggests that Europe is still not doing enough. Europe spends 0.8% of gross domestic product (GDP) less than the US and 1.5% less than Japan every year on research and development. The European Commission has warned that the best researchers and innovators are moving elsewhere and blames the fragmented nature of the EU market. It has taken steps to improve the situation, such as by the establishment of a unitary patent, but that is only part of the story.

Ask those connected with the innovative industries – the entrepreneurs, the venture capitalists, the educators – and they too talk about the need to cut regulation for small businesses, to make it easier for inventors to get their hands on capital, to establish a favourable tax regime, to create the right sort of environment for investors to feel that they can take risks, for universities to co-operate to stimulate better research. Doing all this during one of the deepest economic downturns for a century will not be straightforward. Indeed politicians’ instincts may be to do the opposite in many of these areas. But the alternative is bleak.

Click Here: cheap all stars rugby jersey

That is why the EU has made a priority of programmes such as Horizon 2020, the Commission’s research and innovation programme, which will be launched at the start of next year with an €80 billion budget over seven years. It aims to turn ideas into viable products and create jobs.

Europe’s capacity for innovation is not in doubt. Many of the world’s leading innovative companies such as Siemens and GlaxoSmithKline are based here. Some of the recent technological success stories such as Spotify and Soundcloud originate from Europe.

Pockets of good practice demonstrate what can be done. Take the German government’s Excellence Initiative, which has given €1.9bn to universities to boost German science and research. More than 30 universities have received funding. “The German government is consistent in its policy approach,” said Dirk Jan van den Berg, the former Dutch ambassador to China and now president of Delft University of Technology in the Netherlands. “It is a policy shared by all the main parties in Germany; it is a very stable environment and this helps get things right.”

This special report will argue that there are examples of innovative brilliance in Europe – and that Europe’s history and culture means that it is traditionally in a strong position. But more than ever there is much more to be done. Van den Berg and many like him believe that to avoid Europe falling behind the US and being overtaken by China and other emerging nations in scientific research and technological innovation, there must be greater urgency behind initiatives to reform research, education and development and boost every link of the innovation chain, from initial research to placing of products on the market.

“The coming ten years will be key,” Van den Berg says. “We should have a reason to be optimistic. It is not a lost cause.”