EU policy for the digital transformation of European business
16 February 2016, European Commission
Carlos Moedas - Commissioner for Research, Science and Innovation
Check Against Delivery

Ladies and gentlemen, esteemed guests, good afternoon! We have all read about the great explorers. Magellan, Schackleton, Armstrong. In the past, science was a race to finish line. Nations sent their heroes to explore our oceans, embark on polar expeditions and walk on the moon. Science was a matter of national pride and national security. There was no political need to share data and little economic incentive to do so. Scientific institutions and their funding were organised accordingly, but the dawn of the digital age changed all that.

As information and commerce criss-crossed national borders, the world became aware of its common fate. It was soon clear that global problems like climate change, poverty and HIV/AIDS could only be tackled through cooperation. Science was no longer a matter of national prestige, but of collective responsibility and this change in attitude was good for business. Suddenly, innovators and their ideas had access to global markets and new technologies, like GPS and fibre optics could be commercialised on an unprecedented scale.

Nowadays, we take this global connectivity for granted, but digital business models are still evolving and quickly. Last month, I was at the World Economic Forum, talking about the 4th industrial revolution and what Europe will gain from it. Until now, somehow we've mostly seen the digital economy as a substitute for the physical economy. We buy an e-book, rather than go to a book shop. We use a search engine, rather than visit a public library.

Our behaviour has changed and so have our expectations. Before, companies told their customers what they wanted. Now customers tell companies. Before, the value was in the product. Now it's in the data that product generates. Before, the first and fastest companies took the largest shares of the market. Now users want choice tailored to their individual needs.

This is great news for European science and European business, because we have the knowledge, the creativity and the diversity to benefit from these changes. The future lies in new combinations of the physical, the digital and biological and that is exactly what we’re investing in, but this is about more than Europe's ambitions.

These changes are upon us. Whether we are ready or not, we can already see what is coming on the horizon. So do we act or do we wait? I believe we must act.

That means making room for innovation-friendly regulation and new digital business models now. It means ensuring education and training in Europe let students combine disciplines and provide opportunities to reskill our workforce. It means creating the right conditions for women to stay in STEM careers. Most importantly, we must be open to new ways of doing things.

This is why I have made open innovation, open science and being open to the world, the 3 defining priorities of my mandate. Since starting this job, I have been inspired by the success of the European Research Council, but I have also been struck by how few innovators know about us and what we do.

This was the starting point for the idea for a European Innovation Council. Over the last few months, I have been asking people what they think and I believe a European Innovation Council could focus on disruptive, market-creating innovation. Market-creating innovation is a term used by Clayton Christiansen. He points out that a lot of innovation is about improving existing technologies, or introducing improved products and services to existing markets.

Europe is good at this type of innovation. It is important for competitiveness and I think we do a good job in supporting it through Horizon 2020, but there is another type of innovation that creates new markets. This is what U.S. companies such as Google, Airbnb and Uber have been so successful at. Their greatest innovations were their business models.

So far Europe has missed out on market-creating innovation and the markets they create and I think we will be in real trouble if this does not change, but our goal should not be to create the next Google, though that would be nice. We need to create what comes after Google.

What do I mean by this?

Over 75% of technology experts, surveyed by the World Economic Forum, think that the first transplant of a 3D printed liver could happen in the next 10 years and in TechCrunch magazine, Tom Goodwin pointed out that,

"Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory and Airbnb, the world’s largest accommodation provider, owns no real estate."

The future has arrived. Value now lies in data and user interface and the people who will capture that value will be Europe's innovators. The innovators who bring the digital, physical and biological together, to make life better by giving us more choice. So, what Europe needs, is to invest in the people who can already imagine what the future will look like.

Will it be risky? Yes.
Will there be some uncomfortable moments? Yes.
Will it be worth it? Absolutely yes!

Europe can do more for its innovators. So, starting from today I'm launching a call for ideas to design a European Innovation Council that can help us do more. This call for ideas will run from today until the 29th of April and you can also tweet your ideas using the #EU_EIC hashtag.

My plan is to discuss the ideas we receive, and the next steps we can take, with the Parliament and Council before the summer. Then, by autumn, the Commission will assess which ideas could be put forward in our mid-term review, and introduced in the next Horizon 2020 work programmes. This could include improvements to existing activities or piloting new approaches.

Certainly, providing extra support to digital innovation would be worthwhile. As for a fully up and running EIC, my expectation is that this would form part of the proposals for the successor programme to Horizon 2020. So we need to think about it now.

I hope many of you here will take part in our call for ideas and encourage others to so. The answers to how digital technologies could transform European business cannot possibly come from politicians or venture capitalists alone. They must evolve organically from your needs and aspirations. They must start with the vision Europeans want for their future. They must continue with what we hope for the world.

Only then can we inform our policy and digital strategies in a lasting and effective way. Social Entrepreneur Jen Hyatt summed it up perfectly when she said,

"Instead of asking how we provide more for less, we need to ask how we do things differently and better."

That, to me, is the essence of the change on our doorstep and a philosophy in tune with European values. We love to do things differently. We've always aspired to do things better.