Denmark, a new design for innovation
30 June 2016, Copenhagen
Carlos Moedas - Commissioner for Research, Science and Innovation
Check Against Delivery
Ladies and gentlemen, it has been an unprecedented week in European history. It has been a week that reminds us of the importance of collaboration and innovation, as well as the challenges which lie ahead to reach Europe's goals on Open Innovation, Open Science and being Open to the World.
First of all, let me say what a pleasure it is to be here at the Carlsberg Academy. I'd like to thank the Chairman of the Carlsberg Foundation, Mr Flemming Besenbacher and the CEO of Innovation Fund Denmark, Mr Peter Høngaard Andersen, for their kind invitation.
As many of you will know, JC Jacobsen, Founder of the Carlsberg Foundation, designed this building himself. The Danish have a special ability to design environments that inspire the sharing of ideas and the deepening of human connectivity.
The Carlsberg Academy is one.
The Library in Brussels is another…
Anne-Sofie van den Born Rehfeld, is a Danish entrepreneur and Founder of The Library Group, a chain of co-working spaces which have seen great success in Brussels. Anne-Sofie creates elegant, inviting, light-filled spaces, designed to be "the antidote to the blandness of office life". But for her, the Library is much more than a beautiful office space. It is home to a thriving community of individuals and small businesses, who can uncover new opportunities together.
Anne-Sofie says that she is creating spaces where people can build trust.
"Trust frees you to think differently. You are able to let go of the concerns that make you less productive, like…
Will that person steal my idea?
Will they take my client?
Meaningful encounters at work inspire us. They make us happy. They give us ideas. They lead to new partnerships."
What I take from Anne-Sofie's words is that Danes understand two things about innovation that I also believe in strongly. The first, is that bringing people together, is not enough. You have to create the kind of environment that encourages people to work together and to try new things.
Innovation requires openness.
And the second, is that the future is about networks and new partnerships at the intersections of sectors and disciplines. So, Anne-Sofie is creating networks among people, who would normally never share the same office space. The kind of networks and partnerships we should be building between European universities, businesses, policymakers and citizens.
Innovation needs connectivity.
Today, I'd like to talk about two things in particular. First, about how we can turn research and innovation into productivity growth and second, I'd like to consider the innovation environment we need to create for Europe's knowledge economy to thrive.
Let's start with productivity growth.
There are few places as committed to investing in research and innovation as Denmark. Denmark invests more than 3% of GDP in R&D. I commend Denmark for not only reaching, but surpassing the EU target for R&D investment and Denmark produces excellent science. Within the EU, only the Netherlands has a higher share of highly cited publications in the overall scientific output.
And yet, somehow, Denmark's strength in science and research is not translated into productivity. Across the EU, there has been hardly any increase in productivity since the crisis started in 2007.
As I see it, the main reason for this stagnation is that − in the digital age − productivity does not diffuse from those at the top, to those at the bottom. The winners take it all.
So, there seems to be two disconnects. One between the fantastic research in Denmark and Europe and their economic impact, and one between big companies and newcomers. This troubles me, as someone whose job it is to advocate higher Member State spending in R&D. So why is this? And what can be done about it?
Denmark is extremely good at investing in what it knows well. Companies and businesses which do well in Denmark are often trusted household names. But the nature of innovation is changing. The new economic opportunities of this century are increasingly emerging from the intersections of the digital and physical worlds.
So we have to ask, is Denmark, and indeed Europe, ready to make these changes? How willing are we to encourage new entrants, to test out new ideas, and to allow the users to take control? Are we capable of a new design for innovation?
This brings me to my second point. Solving the issue of productivity requires creating the right environment for innovation to have an impact. To me there are three areas that can make a difference to the current ecosystem design.
- We need to be able to scale-up new businesses, so we need investment.
- We need to remove regulatory uncertainty, so we need better regulation for innovation.
- And we need to get public support for innovation right, so we need new ways to help innovators.
Let's talk about the first area, investment.
In 2014, venture capital investment across the EU was around 5 billion euro, which is more than 5 times less than in the US. This is also a weakness in Denmark. Despite your strength in innovation, venture capital investments here are actually below the European average as a share of GDP. At EU level, we're working hard to address this issue in the most practical way possible.
Together, with the European Investment Fund, we're currently setting up a Venture Capital Fund of Funds. This Fund of Funds could invest in a combination of early stage, later stage and expansion stage venture capital funds, above 500 million euro, with the majority of funding coming from the private sector and with independent fund management that would bring an entirely new momentum to the European venture capital market and increase investor confidence.
Regulation, the second area I want to mention, can also help increase investor confidence.
Last month, the Commission launched an Innovation Deals pilot scheme, within the scope of the Circular Economy. EU Innovation Deals are designed to address perceived legislative barriers more quickly, by providing clarity, or identifying solutions within existing legislation.
Today, I would like to encourage the innovators in Denmark to consider submitting a case for an Innovation Deal, by the 15th of September. Together, we can remove legal uncertainty, so that Danish innovations reach the market and contribute to Europe's circular economy sooner.
Finally, this brings me to the third area, public support.
Generating productivity from innovation is about more than investment and regulation. It's also about attitudes. It's about the environment for innovation we create. Right now, the Commission is questioning whether we are willing to share the risks with Europe's innovators. We're asking, are we supporting a wide enough diversity of innovators? Is there trust in the services we provide?
The conclusion we have come to is that Europe can do more for its innovators.
I believe strongly, that Europe can have more meaningful relationships with its innovators. This is why I launched a call for ideas to design a European Innovation Council. I want to create something that will meet the needs of start-ups and those with ideas for disruptive innovations – ones that create entirely new markets. So, the call for ideas was one way of making sure we are listening to real problems.
Of the 13 Danish organisations and universities that took part, Aarhus University, for example, said that…
"A clear pro-innovation and business-minded mentality is required to succeed."
"A willingness to develop and test new instruments […] is desirable to overcome […] the valley of death and the need to leverage more private investment in high-risk, research and innovation projects."
Ladies and gentlemen, it is certain that Europe will benefit from Denmark's collaboration in the design of a 21st century environment for innovation. But it is just as certain that we will achieve very little without trust, solidarity, diversity and a common vision. Europe does not, and will never, think and act as a homogenous whole. Nor should that be our goal. Our goal should be to make the very most of our unique and enviable situation.
We are different, and yet we work remarkably well together. We have succeeded in creating peace and prosperity, like no other political or economic project in the history of mankind.
But successful or not, we should not become complacent, or lethargic. Rather, we should use our success to make us bold and we should use our failures to make us determined to do better.
So let's trust in ourselves. Let's continue to embrace our differences and let's work towards a common vision.
A new design for European innovation based on openness and connectivity!