"The European Union needs to continue to produce innovation with the ability of rapidly scaling up, a key to sustainability and job growth" - Neelie Kroes, Vice-President for the European Commission and European Commissioner for Digital Agenda for Europe during the Open Innovation 2.0 Conference in Dublin, May 2013.
The European Union has all the necessary tools to become a pioneer in innovative, new businesses, success and growth. Specifically in the area of open innovation where the EU not only has large funds, but it has a diverse territory, which allows for sharing of different ideas, that when put together can make significant impact and also help to find new ways for recovery and growth.
In a remarkably short time, economic globalization has changed the world's economic order, bringing new challenges and opportunities. The EU cannot compete in this new environment unless it becomes more innovative and responds more effectively to consumers' needs and preferences.
Venture Capital is one of the biggest challenges with Current EU start-ups; however this is not the bigger challenge. The bigger challenge is that the EU does not believe in itself in terms of innovation. Why all the businesses with great ideas move to Silicon Valley? The obvious answer would be lack of venture capital, however, throughout the report there are facts that cannot be ignored that will show the main reasons why Innovation is not as successful in the EU as it could potentially be, why businesses do not continuously grow and why with so many available resources, there is still a lack of a framework to allow for more innovation and success.
Also, effective government is crucial for fostering innovation. Governments need to establish a regulatory environment that reduces uncertainty for innovators, that gives incentives, instead of discouragements and that reduce barriers to innovation. Regulations exist to protect the health and welfare of the citizens at a national level and at a European level, but those benefits must be weighed against the costs to consumers and businesses of complying with those rules.
Barriers to innovation also exist within the private sector. Sometimes great ideas can be frustrated by organizations that are resistant to change, and it is often the case that technologies are developed for which there is no existing infrastructure or further private or public support to make that infrastructure available and eventually profitable. Furthermore, Business model innovation, business model experimentation, and the attitude towards risk impact the potential to create an innovation culture that could last for generations.
Effective governments influence policies that are needed to not let the innovative ideas die. Of course financing is needed, but also encouragement to bring technology and vision to the market and push the EU to become the next "Silicon Valley". The Innovation Ecosystem in the EU is very promising and with the increased business interactions in European businesses, corporations, and even countries, great value has been generated and the potential to generate even more value is in place.