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March 2003    Feature
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No. 71
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Mainstreaming Innovation
Europe's Progress to a Knowledge Economy

David J. Skyrme

As well as its relevance to organizations - as described in Debra's article in this issue - innovation has also been a concern of policy makers: to create the right environment for innovators and entrepreneurs to flourish. We first reported European-wide efforts to emulate the success of Silicon Valley and similar locations in our September 1998 I3 UPDATE Special Edition, Innovation Action for Europe. We were somewhat critical, in that the European Commission viewed innovation from a traditional R&D focus and there seemed a lack of coherence across different programmes. Over the last few years some positive progress has been made. For example:

  • Access to information on innovation support is more widely available, for example through European innovation relay centres, an Intellectual Property Rights help desk and online patent information. There are also many local support agencies for start-up businesses (see for example, UK's Business Link).

  • There have been many locally led regional development initiatives, not just science parks but networks that bring together industry and academia - Catalonia's Centre for Innovation and Entrepreneurship is just one example. Altogether the Innovation Directorate of the European Commission has identified some 700 innovation support schemes across Europe.

  • There is growing interest in sharing best practices across different regions, not just in innovation but other policy areas. The Beep project (see Knowledge Digest) provides a rigorous structure that lets policy makers take on board the best practice and lessons from elsewhere (not just within the EU).

  • With indications that knowledge management is now a useful tool for policy makers, the European Commission (in Innovation & Technology Transfer, Special Edition February 2003) note that "more systematic sharing of best practice", "improving the transfer of knowledge between universities, research institutes and industry" and"opening up channels of communication between national policy makers" all help to "improve the coherence of innovation policy across Europe whilst reducing duplication of efforts and ensuring the most effective measures can quickly be identified.

  • Several countries, the OECD and the European statistics organization (Eurostat) have developed innovation scorecards to assess progress on key innovation indicators. A significant development in this area is the creation of the European Trend Chart on Innovation, launched in 1999 and which has recently published its third edition focusing on policy areas. A related effort is Europe's Innovation Scorecard (first published in 2000) that tracks 17 indicators in four categories - human resources for innovation, the creation of new knowledge, the transmission and application of knowledge and innovation finance, outputs and markets - for existing member states and 13 EU candidate countries.

  • The new research and development Framework programme (the sixth) puts great emphasis on "networks of excellence" and "integrated projects" both of which involve closer cooperation across the research - practitioner boundary. In fact, proposals have a much lower chance of being accepted if they do not have a strong user participation, typically with major corporations being active partners. Above all, EU projects have shown the world how to cooperate effectively and share practical knowledge across organizational, national and cultural boundaries - a tremendous stimulus to the development of social and intellectual capital.

A significant development was the declaration at the Lisbon summit in March 2000 of "making Europe the dynamic and competitive knowledge-based economy in the world by 2010". Turning this vision into reality, though, is as the European Commission admits challenging (see Innovation amp; Technology Transfer, February 2003):

"One of the key determinants of success will be Europe's ability to develop more innovative business and industry. That requires changed attitudes, a more entrepreneurial approach to risk, better availability of finance, easier regulatory conditions for business, and closer links between the scientific and industrial worlds. Above all, innovation depends on connections, ideas sparked in conversations, introductions to people with complementary know-how and ideas, and the curiosity and drive to to take up new ideas."

Pointers to Progress

A sister publication of Innovation & Technology Transfer is Euroabstracts. The first 2003 edition lists and highlights key publications covering a number of areas:

  • Ethics and Governance - can you trust a scientist? who regulates the regulators? (see OECD background reports)

  • Taking the pulse of society - as out live become more complex, "composite indicators are an effective way of distilling reality into a manageable form."

  • Innovation training - founders of new technology-based companies say they need specialist training with a practical slant.

  • Knowledge economy - "it's not what you know, it's knowing how to use it". France takes stock of its progress.

  • Bridging a new digital divide - expanding the eEurope action plan to the 13 candidate countries (CC13).

  • Is information green? - whatever happened to the paperless office? The ecology of the new Economy presents 18 studies on the relationship between information and communications technologies and sustainable growth.

  • Two steps forward, one step backwards - while Europe's innovation performance continues to improve, it still trails the US and Japan on the most significant indicators.

  • Sustainable consumption - cut waste and travel less is the exhortation; tax reforms, better consumer information and community led initiatives are offered as a way forward.

You can subscribe to this six-times-a-year publication or read it at the Euroabstracts website:
http://www.cordis.lu/euroabstracts/en/home.html

Closing The Gap

As the above paragraphs indicate, there is no shortage of effort by the European Commission and others to make Europe a more knowledge-driven and entrepreneurial society. And there is definite progress. But is it enough? Here are a few personal observations:

  • Policy makers sometimes live in a world of their own. How many take practical steps to connect with their customer's customer? The UK Small Business Service is trying to address this by encouraging HQ staff to spend a day each quarter with a small business and see the world through their eyes.

  • Policy makers have an inherent tendency to regulate. Despite statements about "cutting red tape" and "regulating with a light touch", the average business in Europe is bombarded with more regulation, and this falls proportionately more heavily on small innovative businesses. No one would publish or sell anything on the Internet if they followed all national regulations slavishly.

  • The best initiatives and progress comes from the ground-up. There are many vibrant community-based initiatives, that are joint initiatives of local government, local business people and other agencies. But once they get too visible or big, they are in danger of ossifying or losing their entrepreneurial edge. Connecting these communities, nurturing and supporting them and sharing best practice between them should be a key element of policy.

  • The perspective of innovation is still too narrow. For example, the use of the term "technology transfer" conveys the wrong message about innovation. EasyJet and Ryanair are two of Europe's most successful fast growth businesses, yet apart from airline deregulation what help and support have they had from European policy makers? The help they have received is from regions whose local airports and economy benefit from being on their routes. What's more their innovations were not in technology transfer but business management, processes and marketing).

  • Avoid drawing artificial boundaries. Europe is part of a global economy. That's why several of the measurement instruments now also track progress of similar regions elsewhere in the world. That's why innovative websites like KnowledgeBoard open their portal, indeed actively encourage participation from around the world, creating a thriving and innovative community with some very active special interest groups.

The future of innovation, national and even local prosperity, lies in more effective knowledge networking at a global level - sharing knowledge for the common good, jointly exploring new opportunities and co-developing new initiatives in a spirit of collaboration.


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