Commissioner Viviane Reding: The need for a new impetus to the European ICT research and innovation agenda

Vienna, 23 March 2006

Investing in ICT Research and Innovation
Vienna, 23 March 2006

Introduction

I am pleased to be here with you in Vienna for this event on research and innovation in ICT. In this year of Mozart’s 250th anniversary, would it be presumptuous to set ourselves the goal of being at least one tenth as creative and harmonious as he was?

The Commission’s first Annual Progress Report on the renewed Lisbon strategy on growth and jobs highlights a number of challenges that Europe is facing: slow growth, budget deficits, high unemployment, an ageing population and globalisation. If we want to help Europe flourish we need to get back on track as regards investment, innovation and growth.

The strong warning to governments in Wim Kok’s report of 15 months ago is still valid: ‘If the EU does not move ahead with reforms and adjustments, it will miss the chance – perhaps for ever – to make Europe stronger and safer, in the interests of its citizens, its neighbours and the world’.

We are still in a position where we can and we must act. ICT, as you know, is instrumental in bringing about the necessary changes to our economy and society. But we are far from fully exploiting its potential and, what we are doing, we do too slowly.

What is at stake?

While the role of ICT in productivity growth is well known, Europe still lags behind its major competitors in investing in ICT.

While ICT brings every day new solutions to societal problems from health to ageing and inclusion, Europe’s administrations and public services are still slow in adopting ICT.

In all major scoreboards, Europe comes third after the US and Asia not only in embracing ICT but also in shaping its development and progress.

Needless to remind you of the figures related to our investment in research and development in ICT. These put us far behind the US and Japan and the picture is even more critical if we examine the investments made recently in China, Korea and Asia in general.

As highlighted in the ISTAG report that was presented to you by Jo Cornu yesterday, what is at stake with our gap in investment in ICT research goes far beyond the competitiveness of the ICT sector or any other one sector.

Those nations that master the development of ICT will be the best positioned to benefit from it in their economy and society. What is at stake therefore is the future development of the whole EU economy. It is about our capacity to face our key societal challenges and to ensure the security of our citizens.

The need for focussed and coordinated actions

Of course, the situation is not the same across the Union and we have large diversity between the Member States. Some are among the best in the world. It is clear though that the situation requires quick and intensive action. We need to learn from each other and find together the best means to strengthen our effort in ICT research and to ensure the best use of ICT.

This is why your gathering today is of extreme importance. I hope that it will be the trigger for new actions for ICT research and innovation that are based on shared visions and collective efforts.

In his report, Mr Aho, who is with us today, suggests forging a pact for action to approach the problem on multiple fronts. I wish also to highlight the need for a simultaneous and synchronised effort to overturn the existing inertia and drive forward growth and competitiveness.

A recent study undertaken by Boston Consulting in Germany illustrates the possible financial gains of such a multiple faceted strategy. The report highlights that a well designed ICT Master Plan combining training, public sector leadership in innovation and active promotion of ICT innovation and research could deliver to Germany 138 Billion Euro of gains over 3 years.

Half of these gains would be from extra economic growth, 20% would come from public sector savings and the rest from purchasing power gains of citizens and businesses.

If such an ICT strategy could provide a gain of 138 billion Euros for Germany, imagine what it could do for Europe as a whole!

Commission actions: The second pillar of i2010

This policy synergy is exactly what we propose in the second pillar of the i2010 initiative. We need to boost investment in research and innovation in ICT and to make sure that we are well positioned to benefit from it.

The approach proposed in i2010 is based on four interlinked tracks:

i) First, we need to ensure sufficient public investment for research and development in ICT. While for most of our competitors, ICT research represents more than 30% of the total research effort, it is less than 20% in Europe. This applies to the public and private effort. We need to act urgently now to get the balance right.

In its proposal for FP7, the Commission has asked for a substantial increase of the ICT research budget in comparison with FP6 in order to maintain ICT at around 30 % of the research effort in the Cooperation programme.

Now that an agreement on Community budget has been reached by the Member States, it is essential that the share of ICT in FP7 is not reduced in the negotiations between the European Parliament and the Council of Ministers.

We need to show to our industry, to our academic researchers and to our citizens that we are serious in putting Europe back on track.

Without the mastering of ICT, Europe will not be able to progress any other science or technology field. ICT should have the budget that reflects its key role. Your support to ensure that our policy makers are aware of this importance is essential.

The increase of Community funding for ICT research should be also matched by a higher share for research in the budgets of the Member States, and in particular more ICT research if we want Europe to catch up with its competitors.

Like Mr. Aho’s report, I do not shirk the fact that this requires a serious reorientation of public spending towards innovation and research. This can be done if there is real political will to do so. And it must be done if we want Europe to attract the world’s best researchers and engineers in ICT.

ii) The second track of actions aims at creating better conditions for attracting private investment in ICT research.

Higher public support to ICT research is already an important means to attract private investment. Industry will invest in regions that have excellent public research poles. This will be not enough though.

Horizontal measures such as tax incentives, access to financial markets and simplification of administrative procedures are extremely important for fostering ICT research. We need to ensure that the necessary reforms are undertaken to create these better conditions.

When we talk about private investment in research, we often tend to think only about large companies. In ICT, we know that SMEs play an essential role in innovation and are behind many major technology and business breakthroughs. We will not be able to increase sufficiently private investment in ICT research in Europe without the SMEs.

We need to act on three fronts:

1) ensure that our existing SMEs invest more in ICT research;

2) foster the creation of highly innovative SMEs and

3) create the conditions supporting the development of some of these SMEs into world leading companies.

In ICT, this is a main handicap for Europe today. We have not been able to transform any of our SMEs into new world leaders in the last 20 years.

The Commission issued in November a Communication on SMEs in which we highlighted the importance of sectoral policy actions to support SME developments.

Of particular importance in this field is the role of governments as first buyer of innovative products and services even at a pre-commercial phase.

We tend to underestimate the importance of this approach in Europe and when we think about public support to ICT, we tend to give privilege to large groups. Public procurement is a powerful tool to support research and innovation both in large companies and in SMEs and is widely used by other regions such as the USA.

iii) The third track of actions is about better coordination of the research effort between the Member States, the Commission, Industry and the academic ICT research Community.

For that, we build on several actions already undertaken to mobilise efforts across Europe around common research goals and agendas. I am referring in particular to the Technology Platforms and to the other coordination schemes in which many of you are involved.

Eight Technology Platforms exist today in ICT and we are looking forward to seeing these become natural mechanisms for coordination of the research effort in their field. This concerns not only collaboration between the industrial and academic stakeholders but also the development of real coordination of the efforts between all funding bodies including the member states and the Commission.

As you know, for two of these Platforms we are also planning to launch Joint Technology Initiatives to be supported from FP7.

We are also proposing to support from FP7 the coordination of national programmes in the area of ICT for independent living. The area is of high importance given Europe’s demography. The coordination of our efforts will enable us to create the critical mass that is needed to build highly innovative systems for the ageing population.

These schemes, based on articles 169 and 171 of the EC Treaty are the non plus ultra, the Rolls Royces of research co-ordination. But we do not always need such sophisticated instruments. Co-ordination of research programmes can take place in many ways. What is important is that it takes place so that our efforts are less dispersed and we thereby get a bigger bang for our buck.

iv) The fourth track of actions concerns the uptake of ICT in innovative products and services and its wider use by citizens and businesses. This is about making sure that inventions lead to innovations that are useful for the society and economy.

Most of the work in this field is to be done by the Member States in their general support to innovation and by businesses.

At Community level we have proposed for 2007-2013 a particular financial instrument that is the ICT Policy Support Programme under the Competitiveness and Innovation Programme. This instrument will build on, and will strengthen national efforts for the wider uptake and best use of ICT by citizens, governments and businesses and in particular SMEs.

The programme will support Pilot Actions as well as actions for the exchange of good practices and for ensuring, where appropriate, EU wide access to ICT-based services. It willl bring together and rationalise the activities that are currently supported under three Community programmes eTEN, MODINIS and after 2008 eContent+.

• As you see, in the second pillar of i2010, we have identified the main policy actions that are needed to strengthen our research and innovation effort in Europe. We have also proposed Community financial instruments to support these actions.
• We strongly believe that the close articulation of these instruments with the rest of the policy measures foreseen in i2010 from regulation to the flagship deployment initiatives is a key to success.
• We also believe that the successful implementation of these actions and instruments will depend on the involvement of all stakeholders.
• By acting together we not only avoid fragmentation, but we also generate critical mass in demand for innovative products and services and indeed generate the right political and business momentum for innovation and creativity.

Ladies and gentlemen, you have a unique opportunity today to give a new impetus to the European ICT research and innovation agenda.

You can conclude the event today with a list of wishes and claims. Yet, let’s not lose sight of the wider picture. What is needed is that you agree on concrete steps that will materialise the ideas that are put on the table by the Aho group, by ISTAG and those coming from your reflections.

These can not be only actions for the Commission. They can not be just actions for governments. They have to be for all of us, business, society, governments, policy makers and others to work together and shape our future.

Thank you for your attention.

Item source: SPEECH/06/191 Date: 23/03/2006