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Creating an Innovative Europe (the “Aho Report”)
Following the Hampton Court Summit, an Independent Expert Group on R&D and Innovation was appointed by the European Commission. Its mandate consisted in drawing, ahead of the 2006 Spring European Council, recommendations on the EU research and innovation performance reinforcement in the context of the revised Lisbon Strategy. Headed by Mr. Esko Aho, former Prime Minister of Finland and President of the Finnish national fund for research and development (Sitra), the Expert Group had to suggest the ways of accelerating the implementation of planned new initiatives at EU or national level.
“Apart from more resources for R&D and innovation, a paradigm change that would preserve European values in a new social structure is needed for the achievement of the goal of an Innovative Europe.”
The group’s final report – “Creating an Innovative Europe” (January 2006) – presented a strategy to create an ‘Innovative Europe’ and identified three key areas around which this strategy needs to be structured:
- innovation-friendly market
- increased and better focused resources coupled with augmented productivity of R&D
- greater mobility of human and financial capital as well as of organisation and knowledge
Embodied in the ‘Pact for Research and Innovation’, which was the group’s central recommendation to drive the agenda for an Innovative Europe, simultaneous and synchronous efforts in these areas are to reinforce current efforts towards the revised Lisbon Agenda. However, apart from more resources for R&D and innovation, a paradigm change that would preserve European values in a new social structure is needed for the achievement of this goal. According to the report, the action must be furthermore taken immediately and on a large scale.
Short-comings versus Remedies
Apart from presenting the strategy, the report suggested concrete steps for its implementation. First, however, it focused on recognising the problematic areas and their implications for the process. It recognized many indicators both of insufficient effort to innovate and of the consequences of not doing so:
- lagging productivity
- meagre capitalisation on the ICT application
- fragmented markets across the national boundaries of Member States
- EU losing out as large firms globalize their R&D
- deadlock in unmodernised traditional sectors and under-investing in services R&D
The productivity challenge is made more urgent by an ageing population and declining interest of young people in a research career. Europe can thus soon find itself with considerably reduced human resources for the realisation of the European knowledge society.
In order to allow R&D and innovation to create the value supportive to our quality of life, Europe needs a substantial shift in terms of mobility, flexibility and adaptability. The latter cannot be confined to the narrow domain of R&D and innovation policy but it requires also:
- simultaneous and synchronous efforts at all levels in creating market for innovative products and services, in providing sufficient resources for R&D and innovation, and lastly in improving structural mobility and adaptability of Europe
- more positive European attitudes and culture towards entrepreneurship and risk taking
These are built upon the achievement and actions already in process through the revised Lisbon Strategy for growth and jobs in line with its 3% target for R&D.
Implications for ICTs
“3% target for R&D is necessary but not sufficient to reach EU’s innovative goals “
The report considers that the resources for R&D and innovation as a prerequisite for Europe to move forward to a globally competitive level. However, the 3% target for R&D is perceived as an indicator of an ‘Innovative Europe’ rather than an aim in itself and therefore as insufficient, although necessary, means to reach EU’s innovative goals.
A paradigm change is needed in which European values are preserved but in a new social structure where mobility, flexibility and adaptability would allow R&D and innovation to create the ‘added value’.
Furthermore, the report finds that the main barrier to investment in Europe is the lack of innovation friendly markets which coupled with their fragmentation provide a major disincentive for innovation. Europe must gear its internal market to foster a transition to the knowledge-based economy. Key steps to create lead markets include:
- harmonised regulatory environment across the EU
- world-class standards setting to demand high technical performance levels
- use of public procurement to drive demand for innovative goods and improve the level of public services
- fostering cultural shift towards innovation
Demand also needs to be coordinated or aggregated to create sufficiently large orders to make innovation worthwhile. On the other hand, opportunities need to be opened up for innovative SMEs to have the chance to bid for parts of the larger packages. In the meantime, however, Europe has to make the most of the policy instruments it has available (generous financial supports to the most excellent scientists, efficient use of R&D grants and fiscal incentives for industry, present State Aid framework etc.) so as to increase the productivity of R&D in Europe. The role of lead market customers should be assumed by the European Agencies.
After the Report
1. Vienna Conference
A major milestone on the road to forging an EU vision for ICT research following the Aho Report is the Vienna Conference (22-23 March 2006). Entitled "Investing in ICT Research and Innovation", the conference will address various European stakeholders in the ICT research and innovation domain and answer their concerns about facing global competition in the ICT area and sectors strongly supported by ICT. Its aim is to improve the coordination of policies and visions across Europe as well as national and European programmes.
The conference will result in a synthesis report which will be subject of a public consultation and a series of workshops with the Member States.
2. IST 2006
Apart from being the most important annual European event in the field of Information Society Technologies, the IST 2006 Event will coincide with the launch of the EU's Seventh Framework Programme for Research and Development (FP7) which is one of the most important elements in realising the Lisbon agenda for growth and competitiveness.