Europe suffers from a brake to commercialisation rather than innovation, say experts

Brussels, 08 Jun 2005

Europe's objective of boosting economic growth through innovation requires global actions to add value to innovation results, according to the head of a French SME (small and medium-sized enterprise).

Speaking on the subject of the commercialisation and financing of research during the European research and innovation conference in Paris, Farouk Tedjar, President Director General of Recupyl, a company specialising in development and technological transfer in the environmental field, explained that the major problem in Europe is the brakes applied to the commercialisation of research results.

'The creative capacity of young European enterprises has increased over the years but the problem lies in the lack of financing at the third round of the innovation process when these companies want to sell their products abroad,' said Dr Tedjar.

He explained that a young company with a good idea will have no problem in finding financing to carry out its research. However, difficulty arises when trying to find financing post-innovation.

'Currently there exists no mechanism on the market to help companies in terms of commercialising the results of their innovative research. It is very difficult in Europe once you've had financial help for developing the technology to go on and find help for the commercialisation process. There is absolutely no help to externalise the results internationally,' Dr Tedjar lamented.

Recupyl, Dr Tadjar's company, developed thanks to European funding under the Fifth Framework Programme (FP5), an innovative recycling system for lithium batteries. The technology, unique in Europe, is able to recycle 85 per cent of the battery. Recupyl is now finding it extremely difficult, however, to find help to sell the licence abroad.

'Europe gives us the means to carry out research but leaves us destitute when it comes to commercialising the results,' deplored Dr Tedjar.

The same applies at national level, stated Jean-Claude Lehmann from the French Academy of Science, taking the example of the biotechnology sector in France. Although all the support mechanisms exist for the incubation process, there is a lack of economic structure to support commercialisation, he said.

'The economic commercialisation of research and development (R&D) is a process potentially and globally very profitable,' added Antoine Llor responsible for the commercialisation of research at the CEA, the French Atomic Energy Commission. 'It is also very long - typically ten years from lab to market, and also very risky since in general one patent out of 100 becomes a 'killer application'.'

In this situation, Mr Llor added, companies have two choices. Either they externalise the risk of R&D through collaboration with a company that provides financing and takes on the risk but also makes use of the results; or it internalises the risk by self - financing the product thereby keeping control over the research results. To be able to do this, however, a company must have sufficient resources to exist without income for some ten years.

'In this situation tax exoneration for young companies is essential,' Mr Llor said. 'Europe must encourage big enterprises to support their spin-offs, and look to the US in terms of what they do to assist SMEs with tax incentives and help with patents.'

'As long as Europe does not have a European patent or the equivalent of ANVAR [the French national agency for innovation] the situation will remain a problem and it will be hard to catch up with the US,' concluded Dr Lehmann. 'The Lisbon strategy should not be only about spending three per cent of GDP on R&D, but should also be about encouraging Member States to equip themselves with mechanisms of commercialisation.'

CORDIS RTD-NEWS / © European Communities
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