Study calls for a third generation innovation policy

January 16, 2003

Brussels, 15 Jan 2003

An innovation policy study written for the Commission's Enterprise DG argues the case for a 'third generation innovation policy' that recognises the 'centrality of innovation to effectively all policy areas'.

The paper, written by a consortium of French and UK organisations, outlines new approaches to innovation policy and uses a series of case studies to illustrate the various arguments and policy issues.

Even though progress has been made in building an 'innovative society', the study, called 'innovation tomorrow', argues that a new generation of policy is required, which embeds innovation in all relevant policy fields, from research, to competition and regional policy.

The report was inspired by the question of how the EU is to achieve the objective set at Lisbon in Spring 2000 - of becoming the world's most competitive economy by 2010 - and the recognition that innovation is crucial to competitiveness.

While the first generation of innovation policy was based on the idea of a linear process for the development of innovations, the second generation emphasises the importance of the systems and infrastructures that support innovation. The 'third generation innovation policy' would place innovation at the heart of each policy area. 'The common aim is to maximise the chances that regulatory reform will support innovation objectives, rather than run the risk of impeding or undermining them,' states the paper.

Another justification for the review of innovation policy is the changing nature of innovation in the new knowledge-based economy, according to the paper, which claims that we can no longer assume that established policies for encouraging innovation are still adequate.

'Innovation in a knowledge-based economy is diverse and pervasive. It is not just based on research, or science and technology, or enterprise and ingenuity. Innovation [...] also depends on organisational, social, economic, marketing and other knowledge,' states the policy study.

Policy areas impacting on innovation are listed as competition, trade, intellectual property rights, enterprise, research, information and communication technologies, financial services and risk capital, education, taxation, regional policy, employment and environment, with competition having the greatest impact.

While a competition policy should benefit innovation, some technology related collaborations are restricted by laws restricting oligopolies. What is needed is a 'flexible design of policies around clearly stated principles that give high priority to innovation,' states the study.

On intellectual property rights (IPR), the report claims that while a European patent system is required, 'the revisions to patent law that are under discussion require extended consultation that explicitly consider the innovation impact of retaining or changing existing frameworks.' It goes on to give examples of controversial proposals for modifications, including shorter patent lifetimes and the extension of the scope of patents.

With regard to the exchange of experiences, particularly in the field of successful schemes and policies to promote innovation, the study underlines that what is important is not so much what has been done, but how. Furthermore, what works in one place will not necessarily be effective in another country or region. Case studies are presented in the report to illustrate that the issue of appropriate polices is not clear-cut. Innovation can be achieved through a number of strategies.

'There is much need to continue to assist SMEs [small and medium sized enterprises] with adoption of innovations. This is especially so for those innovations that will allow them to participate on a more equal footing in the knowledge-based economy, and in some cases achieve entry to new markets and more independence from large firm oriented networks,' argues the paper.

In order to disseminate knowledge of good practices, the paper also recommends awards for innovative SMEs in traditional as well as 'innovative' sectors.

The study recognises that a new innovation policy cannot be introduced quickly just because it is overdue. Instead, 'There will be a need for leadership, education, examples, guidance and coordination services.' To see the policy study, please visit: http://www.cordis.lu/innovation-policy/s tudies/gen_study7.htm

CORDIS RTD-NEWS / © European Communities

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