Ladies and gentlemen, researchers, public administrators, members of the business community, Members of the Dutch and European Parliaments,

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1 Speech given at the Innovation Lecture by Maxime Verhagen, Minister of Economic Affairs, Agriculture and Innovation, in the Ridderzaal, The Hague, on 26 March Commissioner Geoghegan-Quinn, researchers, public administrators, members of the business community, Members of the Dutch and European Parliaments, Welcome to the Ridderzaal, welcome to the Innovation Lecture. The focus today is on innovation. Because as the German poet Goethe put it so well: Es ist nicht genug, zu wissen, man muß auch anwenden; es ist nicht genug, zu wollen, man muß auch tun. Or: Knowing is not enough; we must apply. Willing is not enough; we must do. That was true two centuries ago, in Goethe s time. And it s just as true in the 21st century. Where countries are competing with each other across the globe. And society is presenting us with new challenges. There were many familiar faces in the film we just saw. That shows how committed you are to innovation. And how hard you are working to meet these challenges. Thank you! There are major challenges facing society: Take the fast-growing global population, which requires higher food production and greater food security. Take our ageing populations, which mean higher costs for health care and pensions. And take the growing scarcity of energy and raw materials. This is forcing us to find new ways of generating energy. And smart, sustainable production techniques. What s more, this is not an easy time for the economy. Unemployment is rising, house prices are falling, and governments are facing budget shortfalls. People are worried about their savings, jobs and pensions. And many countries including the Netherlands are facing a series of cutbacks. 1

2 This economic decline is affecting the whole of Europe. That is why we need to restore our public finances. That is why we need to innovate, invest and put the business climate in order. And to do so, the 27 countries of the European Union need to join forces. Because the last 60 years have shown that we are better off if we work together in Europe. That Europe is vital for peace and prosperity. Vital for economic growth. Vital for new jobs for Europeans. The figures speak for themselves. The internal market has generated almost three million extra jobs for the European Union. And this year the average Dutch person earned 2,200 euros more than they would have without the internal market. Commissioner Geoghegan-Quinn, ladies and gentlemen, Innovation without borders within Europe. That is the recipe for overcoming this crisis. A recipe with three main ingredients: 1. innovative sectors that are active in international markets; 2. sufficient investment capital for businesses; and 3. entrepreneurs and researchers who can work anywhere in Europe. I ll take you through these three ingredients one by one. Firstly we need innovative sectors that are active in international markets. Because it is these sectors that determine our competitiveness on the global market. And it s these sectors that will give us the solutions to the new social challenges we face. In the future the Commission wants to invest heavily in research and innovation. I m glad to hear it. Of course the European Union and its member states need to save on spending. But I hope that research and innovation will be spared. The Netherlands has nine top sectors that depend on research and innovation. These are: high tech, agriculture, agri-food, water, life sciences, energy, logistics, the creative industry and chemicals. These sectors need businesses, researchers and governments driving innovation together. Many of them are represented here today. We asked you which rules should be abolished. What you needed to do business and to innovate. And how that could work at international level. 2

3 With your ambitions, plans and financial commitment we can strengthen these top sectors and therefore the Dutch economy as a whole. The government is investing 2.7 billion euros in research and innovation. We are striving to reduce the regulatory burden by 25 per cent. And we are working to achieve a smaller, more efficient government. This will benefit our prosperity, our jobs, and the long-term value of our pensions. Our policy unites public knowledge and private product development. That means knowledge and projects for which there is a demand. Products and technology that boost economic growth. And that can tackle social challenges. I see great things happening. The Dutch chemical industry is already making polystyrene from sugar. Green soft drinks bottles. Sustainable asphalt made out of rapeseed oil. And take the blue energy experiment on the Afsluitdijk, or Barrier Dam. The project involves businesses and researchers from the water, chemical and energy sectors using the interaction between salt water and fresh water to produce electricity. Our policy on the top sectors also involves innovation contracts, which we will be signing soon. These set out agreements between businesses, researchers and government on who will carry out what research. And who will pay for what. For example: high-tech businesses see opportunities in the nano switch market. But before they can seize them, research is needed into new materials. Universities and public knowledge institutes can carry this research out. So the government and the businesses concerned all help cover the costs. The European Commission s innovation policy and that of the Netherlands have plenty in common. Both are abolishing inconvenient rules where possible. And both link research with innovation. That is also reflected in the proposals for Horizon This programme places greater emphasis on activities close to the market. That is exactly what we need to do. Maintain an excellent knowledge base. And use it to develop innovative products and put them on the market quickly. I would urge the Commission to hold on to that ideal! Innovation and stronger links between research and business are not tasks for member states only. They must be objectives in European programmes as well. 3

4 EU and Dutch policy have some things in common, but there is a difference in how we organise things. EU policy is organised according to social challenges, while Dutch policy is organised by sector. So Dutch policy focuses most on the needs of businesses. That is why we are getting businesses, researchers and government to work together in each sector. We call this the Triple Helix. We believe this is the only way to develop products and technologies that society really needs. Perhaps Commissioner Geoghegan-Quinn can explain in her lecture how this works in European Commission policy? I now come to the second ingredient for innovation without borders: sufficient investment capital for businesses. Here, too, Dutch and European policy are well aligned. We have the Innovation Fund for SMEs, which provides businesses with risk capital and loans. This must be paid back once their research investment makes a profit. The money is then used to help other businesses. Of course, investment capital can also mean money from Brussels. This comes from a number of sources, including the European Framework Programme for Research and Technological Development, the Eureka network, and the associated Joint Technology Initiatives and Eurostars programmes. Dutch businesses and knowledge institutes make grateful use of this EU funding. We are involved in 3,000 of the 15,000 EU research projects. And we participate in 16 per cent of Eurostars proposals. Dutch businesses and knowledge institutes have been allocated more than 1.7 billion euros through the European framework programme. It would be almost impossible to put too much stress on the importance of these partnerships and Dutch participation in them. In some cases, national contributions are required. So I have freed up funds for the 2013 Joint Technology Initiatives. And I am campaigning for Dutch participation in the Eurostars and Eureka clusters. I would now like to turn to the third ingredient for innovation without borders: entrepreneurs and researchers who can work with ease anywhere in Europe. And freeflowing knowledge within Europe. Because these are key enabling conditions for innovation. 4

5 It is crucial to strengthen the working of the internal market. For example, the internal market for downloading e-books and music. So that e-companies don t need a separate licence for every country, as is now the case. At the moment, you can only download a book or CD in your own country, in your own digital shop. Not in another country. It is good that the Commission has proposed strengthening the digital internal market. This must of course be translated into action. Such as a legislative framework for European intellectual property licences. And improved cross-border electronic transactions. What s more, the Commission should reduce the regulatory burden, as the Netherlands is doing. And, of course, it should continue to advocate a single, internal market for services. And Europe must also reach agreement as soon as possible on a unitary patent for Europe and a patent court system. Innovation will also benefit if knowledge, research data and academic articles can be freely exchanged within Europe. That is why I support a European Research Area. Intellectual property rights will of course have to be taken into account, as will the interests of companies that have invested in public-private research. I call on the Commission to make clear agreements on this point. For example, in Horizon 2020 and regarding the European Research Area. Perhaps Commissioner Geoghegan-Quinn could also share her views on these matters. To summarise: innovation without borders requires three things: 1. knowledge-intensive sectors with a strong market- and export position; 2. sufficient investment capital for businesses; and 3. entrepreneurs and researchers who can work where they wish within Europe. I would like to end by repeating the quote with which I began: Knowing is not enough; we must apply. Willing is not enough; we must do. I trust that all 27 EU countries will take Goethe s words to heart. Thank you. 5

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