Expert exposes the myths and realities of US innovation policy

June 25, 2003

Brussels, 24 Jun 2003

Building an innovation policy for Europe is about getting policies, incentives and cooperation right, said Charles Wessner from the national academy of sciences in the US, during EUREKA's 14th Inter-Parliamentary conference in Copenhagen on 23 June.

In his keynote speech, Dr Wessner highlighted some of the trends and anomalies in US research and development (R&D), and exposed a number of myths and realities about government support for industry, underlining the fact that the US, as much as Europe, is facing challenges in the R&D sector.

'Many of you here today believe that the US has a totally efficient and well oiled research machine, funded secretly by military defence R&D [...] However, while total R&D is up, support for public research contributions has dropped relative to the increased size of the US economy and there is an uneven record in federal obligations,' explained Dr Wessner, adding that there is growing concern in Washington that not enough investment in the future is being made.

Dr Wessner claimed that there is also a deep ambivalence about the appropriate role of the government in innovation society, coupled with a number of policy myths which are visible on both sides of the Atlantic. The first myth is that innovation is a linear process and so a linear model applies. According to Dr Wessner, this is based on a simplistic assumption that investing in R&D will automatically lead to innovations and products. 'What we have to keep in mind is that this process is based on a model and not reality.'

'And as much as we have to push universities and institutions to take a different approach to R&D, we also have to remember the power of curiosity-driven research,' said Dr Wessner. 'Innovation is therefore really more complex, involving overlapping between basic and applied, as well as between development and commercialisation research.'

Another well versed myth in the US is the presumption that if it is a good idea, the market will fund it. However, the reality is that, often enough, market participants have less than perfect knowledge, especially about what constitutes innovative ideas, and obtaining funding for small firms is a hard task. Furthermore, while innovation often looks at developing the early stage of technology, venture capitalists are prone to focusing on the later stages, claimed Dr Wessner. However, despite such imperfections, the US system is capable of teaching Europe a few lessons. 'There are serious challenges in the US system, but there is also is an entrepreneurial environment that is key to knowledge-based growth,' explained Dr Wessner, adding that a drive for ownership, low regulatory barriers for entry, and deep and diverse capital markets are all essential components for facilitating innovation.

The US has also been capable of developing successful public and private partnership programmes, namely the small business innovation research programme and the advanced technology programme, as well as effective award systems that are not only capable of addressing early-stage financing and funding emerging technologies, but also of advancing new university based ideas towards markets and creating synergies among small businesses, large companies and universities, Dr Wessner added.

So what advice had Dr Wessner for the delegates present, to help them define an effective European innovation policy? 'There is no fixed way of doing things. It is just not a case of copying the US, that's not the message,' he told CORDIS News. 'The message is that we all have problems in this area and we have to figure out how to do it better.'

'Europe's challenge is not research - it is the commercialisation of R&D. Political leadership needs to provide autonomy and enhance funding, while support programmes have to be able to take risks and tolerate failure to achieve real success,' said Dr Wessner. 'At the same time, policies that emphasise a framework for cooperation, based on the needs of individuals, are needed because; after all, it is companies not countries that innovate,' he claimed.

'However, policy dialogue on innovation is fundamentally national, and while the Commission is making ground in the development of a European space, that doesn't mean you abandon your national, regional and local policies,' he warned.

Another reason why Europe does not need to go to the US for answers, according to Dr Wessner, is the existence of R&D agencies such as Finland's Tekes, and the EUREKA network, which are good examples of powerful tools for facilitating innovation-led growth in Europe. 'My main message is that EUREKA works but Member States are not providing enough funding - why is that?'

CORDIS RTD-NEWS / © European Communities

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