Romano Prodi: Research, innovation and competitiveness: the global challenge facing Europe, University of Genoa Opening of the 2003/04 Academic Year Genoa, 9 January 2004

Genoa, 9 January 2004

Mr Vice-Chancellor,

Distinguished visitors,

Professors,

Ladies and gentlemen,

Dear students,

2004 is a special year for Europe, as it is for Genoa.

This year Genoa is the European Capital of Culture.

This is an important honour for a city which has contributed so much to the history of both Europe and the Mediterranean, but it is also a challenge one which I am sure that this city, "City of Art, Capital of the Sea and Contemporary City", will find well within its grasp.

The historic unification of our continent through the enlargement of the European Union to include the new countries of central and eastern Europe and the Mediterranean will be the main event of 2004, but not the only one. We are also working on ways to integrate the Balkan countries and promote special relations with all our neighbours.

2004 will also be the year in which we shall have to make every possible effort to adopt the draft Constitutional Treaty and prepare the new European political and financial plan for the years to come. Both these challenges will be decisive if we are to continue and step up the strategy for economic and social growth which the Union's Heads of State and Government adopted at the Lisbon European Council in March 2000.

The aim of this strategy is to increase Europe's competitiveness and economic dynamism through the integration of knowledge and innovation, while also ensuring environmental and social sustainability in the long term.

Today, in this historic university which, since the beginning of the fourteenth-century, has made an outstanding contribution to the arts and sciences in Europe, I should like to talk in particular about the integration of knowledge into Europe's capacity to innovate and how knowledge affects Europe's competitiveness.

The integration of knowledge secured through the opening of our universities to Europe and to the world makes our systems of education and training better able to prepare students and scientists for the Europe of tomorrow. Integration, mobility and coherence in our education and research systems mark the path to a more dynamic and more competitive Europe.

The European Commission has launched a large number of major programmes to promote the integration and international mobility of knowledge.

For a number of years, we have been trying to create a "Higher Education Area", through the now famous "Bologna Process" and the recognition of qualifications and skills. We are now developing a new programme, 'Erasmus Mundus', to lead to new European Masters Courses through cooperation between universities in Europe and those elsewhere. It will be open to students and teachers within and outside Europe and will offer substantial scholarships and support for mobility.

We have also extended the Tempus programme (a system for cooperation in higher education) to the Balkan countries, the Mediterranean and to the countries of the former Soviet Union and central Asia. We have launched similar initiatives with Latin America and with Asia and exchange programmes with the United States, Canada, Australia and Japan.

In this regard, the University of Genoa is a trail-blazer thanks to the Socrates Agreements (263 concluded in 2002-03), the large number of Erasmus scholarships it grants to its students (810 for students in Genoa) and the many foreign students it welcomes (758 Erasmus students in Genoa this year).

It is also open to the Mediterranean, as can be seen from your commitment to a partnership designed to promote Euro-Mediterranean cooperation through exchanges, sharing and the creation of knowledge and know-how with universities in France, Spain, Tunisia, Morocco, Egypt and Lebanon.

This is an important contribution to our goal of making the Mediterranean a space where knowledge is shared, respect is mutual and projects are undertaken jointly.

The University of Genoa is doing no more than continuing its long tradition of openness and cultural hospitality: this is the city where, to give only a few examples, Lord Byron, many Flemish painters (such as Van Dyck and Rubens) and that great historian of the Mediterranean, Fernand Braudel, lived and worked.

It is also the city where that staunch supporter of republican Italy, Giuseppe Mazzini, was the first, with his 'Giovine Europa', to conceive of Europe in modern terms.

The initiatives to promote the integration and mobility of knowledge encourage intercultural dialogue and the transmission of the values of the European Union throughout the world and improve the quality and competitiveness of our universities at world level. They are also a response, although only a partial one, to the problem of the brain drain from Europe.

Europe cannot afford to continue producing more graduates in science and technology while having fewer research workers than the United States and Japan!

In 2001 alone, some 50 000 European research workers crossed the Atlantic, drawn by more favourable economic and working conditions.

The ability of our universities to attract talent depends primarily on the commitment to this aim of the public authorities and the private sector.

Europe currently invests less in research and development than does the United States. In 1999, the USA spent a total of 2.6% of GDP on this area while Europe spent only 1.9%.

In Europe, the budgets for public research shrank.

Increasing investment in education is a challenge for both Europe and Italy.

In fact, the level of investment in research in Italy is well below the European average (1% as compared with 1.9% in the EU) and is falling (by 0.6%). Italy is also in the last place for year-on-year growth in spending on research and development.

We should not be surprised, therefore, that no region of Italy appears among the top 15 in Europe in terms of research intensity.

Even university research in Italy is weak, standing at €63 per person as compared with a European average of €89.

The challenge is such that the EU Heads of State and Government set themselves the goal of increasing European investment in research and development to 3% of GDP by 2010, of which two thirds should come from the private sector.

The development of new areas of research is best promoted by concentrating the research effort. We would all benefit from a situation in which the many first-rate scientists working within the Union could carry out their research in European "centres of excellence".

At present, the allocation of national public funding for the sciences is still very largely determined by national boundaries. We need to create a genuine "European research area".

In the Commission, we have begun a discussion which will result by the end of this month in a communication on the future financial framework for the EU's main budget.

In our view, the EU budget should reflect more closely the political priorities and strategies which the Heads of State and Government have set themselves. This means first of all investing more in research, development and education. The EU institutions can and must play their part in mobilising the financial resources available for this purpose.

This can be done either through the main budget of the EU or through loans managed by the European Investment Bank (EIB). Savings and EIB loans could be better used to ensure that investment in long-term research is financially profitable.

But even all this is not enough.

We must ensure that European firms are willing to seize the opportunities offered by skilled labour. We must ensure that it is in the interests of the business community to turn the creativity of research workers into outstanding investment opportunities that is, into innovative and marketable products. To sum up, we must stimulate the demand for innovation and ensure that the market has the incentives it needs to finance it. This is the only way of transforming innovation into competitiveness.

At present, about 50% of research workers in Europe are employed in the private sector as compared with 64% in Japan and 80% in the United States. Ensuring that the private sector is motivated to increase this percentage is vital to Europe's competitiveness.

It is in the sectors of technological innovation and highly knowledge-intensive services that the bulk of new jobs have been created in recent years.

This is also the idea behind the Growth Initiative, which is based on the strategic link between improvements in the trans-European networks and increased investment in research and development and human resources.

Technological innovation is also vital for the global competitiveness of our economic systems. This is the field on which the global battle will be won or lost, where we can launch a new and dynamic phase of growth or risk decline.

To be effective, research and innovation policy must be able to develop within a framework of macroeconomic stability and a new constitutional framework which will make the decision-making process more efficient, partly by extending qualified majority voting to a number of sectors.

In this respect, the last weeks of 2003 with the suspension, to all intents and purposes, of the Stability Pact and the failure to adopt the European Constitution were particularly disappointing. A little while ago, I hoped to conclude my speech with a reference to a Constitutional Treaty which had already been adopted, and which Europe certainly needs.

Unfortunately, that is not the case.

However, I remain optimistic and hope that during 2004, Genoa will become the capital of a Europe with a new Constitution, with greater confidence in its own resources and with still greater determination to meet the challenge posed by global competitiveness.

Thank you.

DN: SPEECH/04/7 Date: 09/01/2004