David BYRNE: Driving Innovation, Competitiveness and Growth in Europe, Governors' Meeting for Health Care Industry, Food Beverage, Retail and Consumer Goods - WORLD ECONOMIC FORUM - New York, 3rd Febr

February 5, 2002

New York, 3rd February 2002

Introduction

It is a great pleasure to have been invited here this evening to address such a distinguished audience from the health care, food beverage, retail and consumer goods industries.

Your interests are very much my interests. I hope that my interests are yours!

I know from my regular and profitable dialogue with individuals among and various associations representative of your interest that there is a genuine sharing of interests.

You represent vital sectors for consumers, patients and citizens.

I carry a similar torch for consumers, patients and citizens in the European Union in the policy and regulatory fields.

I know that I cannot hope to cover all of the ground that we all might wish in my opening remarks this evening. But I hope to develop a number of key themes that I believe will be crucial for all of us in the period ahead.

Managing Uncertainty

Managing uncertainty is an underlying theme of this year's World Economic Forum.

This year "Davos" has transported itself to New York in solidarity with the city and the people of the United States of America on account of the unspeakable events of September 11th last.

This is a powerful symbol of global solidarity in the face of a very real threat.

That threat has lead to great uncertainty, not just in the world of business, but right throughout the democratic world. But, as I said in Washington last October, democracy is enduring. And we must all shoulder the responsibility of ensuring that it does.

In the face of such potent threats, we must all look for innovative means of harnessing the groundswell of good will to manage effectively in uncertain times.

Coalitions of actors

One thing is clear to me in all of this raw economics will not solve the problem. We need multi-layered responses. We need multi-layered coalitions of actors, on a global scale, acting in unison to address the complex issues we face.

We have one such coalition here this evening. All of your industries have a crucial role to play in helping make a better world for all and helping make progress towards greater certainty.

Yet, there are no magic solutions, no instant panaceas. We must work together, sometimes painfully slowly it might seem to some, to achieve our collective goals.

Let me now touch on a number of areas, at macro and micro levels, that will assist in the process.

Competitiveness

I am conscious that your industries are concerned about the issue of competitiveness generally, but specifically in the European Union.

The overall competitiveness gap between the EU and the US is now wider than it has ever been in the past 25 years with Europe losing ground on both labour productivity and employment levels since the mid 90s.

Per capita Gross Domestic Product in the Union now stands at less than two-thirds the American level, despite accelerated economic growth and increases in employment in Europe in recent years.

Yet, considerable differences in the performance of the EU's Member States lie behind these headline figures.

In the second half of the 90s, five EU Member States Ireland, Luxembourg, Portugal, Finland and Greece registered higher labour productivity growth than the US. A similar number Ireland, Spain, Luxembourg, the Netherlands and Finland posted better employment growth figures.

Undoubtedly, if one were to look at the performance of individual States in the US one would find a similar pattern. Nevertheless, the overall competitiveness gap is a serious cause for concern.

US superiority

There are two important reasons for US superiority:

the slow adoption of new technologies in the EU, and,
the relative weaknesses in the EU's innovative performance.

Innovation and Growth

Many factors, ranging from the strength of the knowledge base to qualifications of the labour force, combine to encourage innovation and growth.

In both the EU and US, technology-driven industries such as ICT equipment, precision instruments, chemicals and motor vehicles, which rely heavily on R&D, experienced the highest productivity growth in the 90s.

But in the majority of sectors, R&D intensity is higher in the US than in the EU and most strikingly, in office machinery and computers, it is three times greater.

Innovation is a fundamental component in biotechnology where success partly depends on the ability to mobilise and exploit new knowledge and to collaborate across scientific disciplines and frontiers.

Judging by patent and collaborative project data, the US has a large advantage over Europe in innovative activities in this area. The EU is also hampered by fragmented research programmes, that remain largely within national boundaries.

But encouraging trends are emerging for the Union. Many Member States the Netherlands, Ireland, Denmark, Sweden and Finland, for example have successfully specialised in biotechnology. Significant research and production clusters also exist around Paris, Cambridge, Copenhagen and in Bavaria.

Addressing the competitiveness gap

From a European perspective, the competitiveness gap must be addressed by an integrated and comprehensive set of measures.

The broad European agenda for boosting our competitiveness was set by the European Council in Lisbon in 1999. Insufficient progress has been made since then in implementing this agenda to get Europe into pole position.

This agenda will again be revisited, in six weeks time, by European leaders meeting in Barcelona. The Commission has give a clear message as to what must be achieved in our contribution to the Barcelona summit The Lisbon strategy Making change happen.

Life Sciences and Biotechnology

In one key area of interest to all of here this evening, the Commission wants to see greater progress that is in frontier technologies, particularly life sciences and biotechnology.

We have set out a clear strategy, and an action plan, as to how we believe this should be achieved overt the next decade.

The Commission cannot do this alone. This can only be achieved by building the type of multi-layered coalitions about which I spoke a few moments ago.

But from a public policy perspective, we are taking the lead in setting our vision for the future in this key area. This area represents, in our view, the next, exciting, wave of future growth potential. It is essential that it is exploited fruitfully.

Biotechnology GMOs

I can assure you that the Commission also remains committed to achieving progress on the issue of resuming the authorisation of Genetically Modified Organisms. We intend to pursue this within the context of new legislation coming into force next October, by developing further regulatory responses and by consensus building.

This is, and will be, no easy task. But again, a multi-dimensioned approach is required.

Innovation in Food

The food-manufacturing sector, both in Europe and globally, is at the forefront of the development of new foods and new manufacturing processes. Some of these have the prospect of contributing significantly to consumer lifestyle and health concerns.

This is an area too which I am examining from a regulatory point of view.

But it is an area in which I sense tension between the pharmaceutical sector and the food sector. Nothing wrong with tension, per se. Competition is generally a good thing. It is the life-blood of economies.

From my perspective, I would not like to see that tension stifling innovation.

At a general level, let me just say that helping people achieve a better, healthier life style is not the exclusive preserve of any one sector. All contributions to increasing health, well-being and disease reduction must be welcomed and appropriately regulated as appropriate.

European healthcare

We are seeing important developments in the health sphere in the European Union.

As the first designated European Commissioner for Public Health, I feel a particular responsibility on my shoulders to ensure that these developments are channelled in a way that gives patients and citizens the best outcomes from a public health point of view.

Again, from my vantage point, I need to ensure that health becomes the driver of policy, with the patient well served by policy and its effective implementation.

I believe that the pharmaceutical industry and the Commission are working well together to find joint solutions to some of the problems we face today. More work is needed in this direction.

Looking further ahead, we also have to take stock of some major milestones.

Some of these are already upon us with some recent, key judgments of the European Court of Justice. Further judgments are also awaited.

Arising from these judgments, and some related developments, are we looking at the birth of a Europe-wide health care system. If so, what are its implications, for example for quality and safety, patients access to health care and drugs, cost, and social solidarity.

We must also consider the implications of European enlargement in this context.

Future of Europe' Health

I have no doubt that many of these issues will come into sharp focus and give rise to lively discussion in the debate on the future of Europe that we are just embarking on. There are major issues at stake for the future health of our citizens.

Finding an appropriate response will not be easy. We are at the threshold of tackling citizens' expectations of high quality, affordable health care faced with the challenge of cost factors, the impact of technological developments and an ageing population.

Food Safety

We are also well down the road of seeking solutions to citizens' expectations for a safe food supply.

I am particularly proud of the fact that we now have the legislation enacted that will underpin the establishment of a new European Food Safety Authority.

Many of you will have heard me speak about my ambitions for this Authority. I now want to see them realised by its speedy establishment this year.

Not alone will it make a major contribution to food safety in Europe, I expect that its reach will be much wider in terms of its impact.

In time I see a clear need for greater rigour at the global level in the whole sphere of scientific assessment and the development of sound regulatory responses.

This will have important consequences for global health and trade. We all need to give greater thought as to how we should be setting about to achieve this type of global governance in the food area.

Conclusion

I hope that the few thoughts that I have set out this evening can provide stimulus for a lively exchange of views tonight. And that we can see the shape of how best we can emerge through today's uncertain times, into more certain times.

DN: SPEECH/02/42 Date: 04/02/2002

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