Did you say Lisbon?

Has the Lisbon strategy failed? On one of its main aims, to invest 3% of the gross domestic product in research, there has been little progress. But focusing on this criterion is to risk forgetting that deeper and less quantifiable changes are at work, generated by the reforms that Lisbon has brought.

The new era of the knowledge society was symbolised at the Lisbon conference by this strange mutant bearing the holy grail of research and innovation. © European Commission
The new era of the knowledge society was symbolised at the Lisbon conference by this strange mutant bearing the holy grail of research and innovation. © European Commission

“A quantified goal must be pertinent in terms of its nature as well as its level,” says Pierre Vigier, Head of Unit at the Commission’s ‘Economic analysis and monitoring of national research policies and the Lisbon strategy’. So what about the nature of the goal set in Lisbon in March 2000, namely to step up the research effort? The challenges facing the European economy have not changed: increasing productivity in response to the ageing population; confronting international competition; preparing for the increasing scarcity of natural resources, starting with fossil fuels.

Their importance has grown even more acute. The emerging countries are ‘upgrading’, now becoming competitive in medium technology products. The growing awareness of the dangers of global warming – the 2006 Stern report suggested that global GDP could fall by between 5% and 20% in the absence of serious steps to combat it – has increased the urgency for a genuinely sustainable development. More than ever, it is by investing in research that the EU can prepare to meet the challenges of the 21st century.

A goal more pertinent than ever

If the nature of the goal is not then open to question, is the level perhaps too high? Not at all. There is nothing impossible about investing 3% of GDP in research. Sweden, Finland, Israel and Japan have been doing it for years, Switzerland was at 2.9% in 2004 and South Korea has made spectacular progress: from 2.3% in 2000, its research effort reached 3.2% in 2007. In a global economy in the grip of major technological change, the effort could even be further stepped up and exceed the famous 3%.

The goal set in Lisbon thus remains “the appropriate framework for encouraging growth and jobs,” especially at a time of crisis, as the European Council repeated on 20 March. The EU is not alone in making this analysis. On 27 April, President Obama declared that he had set the goal for the United States of investing more than 3% of GDP in research to prepare for the future. “The challenge, in short, is nothing less than our salvation,” he concluded. It is a statement that most certainly applies to the EU.

A matter of method?

That leaves the matter of the method to apply in implementing the Lisbon strategy. This is essentially threefold: to increase the research effort to reach 3% (2% from private financing and 1% from public financing); to facilitate exchanges between the private and public sector; to encourage the creation of skilled jobs and high-tech companies.

Only the first of these lends itself to a simple quantitative evaluation. It has been sufficiently stressed: the result is not good. In 2007 just 1.85% of GDP was invested in research in the EU-27, precisely the same level as in 2000. “We must not lose sight of the fact that all the Member States have increased their research expenditure, in constant euros, since 2000,” observes Pierre Vigier nevertheless. The insistence on the 3% target, which has become a veritable mantra of scientific policy, has therefore indeed served as a mobilising force.

The reason the ratio has stagnated overall in recent years is that economic growth was strong prior to 2008 and investment in research grew less quickly than the wealth produced. The fall in Europe’s GDP expected in 2009 will have the automatic effect of producing a relative increase in the research effort, provided Member States maintain their scientific budgets and companies their R&D budgets. Is this the case? “The preliminary indicators at our disposal show that 23 of the 27 EU countries, representing more than 98% of the EU’s public investment in research, are following the Commission’s recommendations to respond to the crisis by investing in research. Just two Member States facing a very difficult financial situation were unable to do this,” says a pleased Pierre Vigier

Long-term effects

Another reason for hope lies in the time lag between the launch of new policies and the figures. Higher education and research systems do not change overnight and it is sometimes several years before the results of reforms are evident. Most Member States have introduced legislation to make universities more autonomous and thus able to enter into cooperation with the private sector. Work is currently in progress to develop a European system for the international comparison of universities with a wider rage of criteria than the famous Shanghai classification. This should make it possible to make a better appraisal of the international performance of European universities.

Most Member States have increased the share of public laboratory financing obtained following calls for competition and some of this public financing is now open to non-nationals. Problems of taxation, pensions and career progress that have traditionally proved obstacles to researcher mobility are being resolved progressively. Refuting the idea of an old Europe that is stuck in its ways, US companies are increasingly directing their R&D investments at the EU countries (more than 62%).

Developing growth markets

Will the private sector seize the new opportunities to work with the public sector and to develop innovative products? This will be the ultimate test of the success - or failure - of the Lisbon strategy. One figure sums up the situation: 49% of European researchers are employed in the private sector compared with 80% in the United States and 68% in Japan. Private sector research must be strengthened and its results converted into added value if the EU is to create a genuine knowledge-driven economy and it is on achieving this that the post-2010 effort and reorientation as currently being defined must focus.

The results of the Joint Technology Initiatives and Technology Platforms, two new instruments to stimulate innovation under the Seventh Framework Programme (FP7), are mixed. Industrialists criticise their complexity and administrative inflexibility that act as a deterrent to SMEs. “The private sector will only make major investments in fields with growth markets and where there is a potential demand for new products with a high technological component,” believes Pierre Vigier. The Commission’s Lead Market Initiative for Europe has identified six such markets: on-line health, intelligent textiles, durable construction methods, renewable energies, recycling technology, and new products of plant origin. The FP7 initiatives could favour these fields but more sustained commitment on the part of the Member States would be necessary.

The reforms to stimulate private investment and to forge closer links with the academic sector have therefore not yet produced the expected results, and sometimes generate a certain pessimism. It is in mid-stream that the current is strongest and that the opposite bank seems most difficult to reach. That is exactly the situation the EU finds itself in today.

Mikhaïl Stein


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