Michele Genovese DG Research and Innovation Specific International Cooperation Activities

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1 Michele Genovese DG Research and Innovation Specific International Cooperation Activities 1

2 2 1. Innovation in a changing, challenging world

3 New Priorities 3 Recent changes in the global economic system have influenced the overall perception of the economic and social reality. The explosive growth of technology and computing and the speed of low cost communication determined a replacement of priorities: from stability to ongoing changes and sustainability.

4 Innovation 4 Innovation is now considered the main driver of economic growth: technical progress combined with innovation is deemed necessary for the enhancement of economic productivity, a core factor, essential for national economies to work in a competitive world. It is a pivot of European policies.

5 Innovation / Economy 5 The components of innovation determine the performance of an economy, its growth, productivity and sustainable development. Innovation policies, along with the creation and application of knowledge, are a specific area of public policy intervention: they help solve current problems, to anticipate and to tackle challenges.

6 Worldwide relationships 6 Internationalization is inherent to innovation: both aim to help innovative companies to cooperate as freely as possible to incorporate an international strategy into their development and to launch the innovative products they develop into the international markets.

7 What s going on in the world? 7 - Globalization of knowledge and innovation capacities Less than 25% of global research investment is made in the EU - Impact of the crisis on public finances and business (especially innovative SMEs) The EU is loosing millions jobs and more than 1,000 billion of annual GDP - Major challenges - Maximize available resources by leverage, integration and cooperation The EU target of 3% of GDP for R&D in 2020 could create 3.7 million net new jobs and nearly 800 billion of annual GDP by 2025

8 The EU faces a significant innovation gap 8 EU-27 US Japan New doctorate degrees (per 1000 population aged 25-34) Tertiary educated population (% of population aged 25-34) Expenditure on R&D (% of GDP) Public-private co-publications (per million population) (1) Patents invented (per billion GDP in PPS ) (2) Medium-high- and high-tech product exports (% of total product exports) License and patent revenues from abroad (% of GDP) (1) Nr. of scientific publications with at least one author based in a public research institution and one author based in the private sector. Publications are assigned to the country in which the business companies or other private sector organisations are located. This number of public-private co-authored research publications is normalized by the population (in million inhabitants); (2) Patent Cooperation Treaty patent applications by residence country of inventor. Source: Innovation Union Scoreboard 2010,

9 Number of undergraduate students 9 China is enrolling more students than EU, US and Japan combined!

10 Some of the best performers are in Europe 10 R&I performance: best performing European countries compared to world leaders EU FR NO AT IE BE JP US UK DE NL FI DK CH SE Note: the index used for comparison in the this chart is based on a set of 12 indicators Source: Innovation Union Scoreboard 2010,

11 But the EU as a whole must close the gap! Evolution of World R&D expenditure in real terms PPS in millions at 2000 prices 11 Ever stronger global competition for investments & markets Emerging economies are quickly catching up On current trends, China is set to overtake the EU China excluding Hong-Kong Source: European Commission

12 So why do our competitors perform better? Competitors success: no accident nor luck Our key partners and emerging economies (eg. China, India, Brazil, South Africa) follow a strategic approach to innovation and implement it! - Innovation is the policy objective which drives all other policies (education, skills, regional development, standards, tax policy) - Innovation policy is steered & monitored at the highest level - Massive investment in skills, research and innovation 12

13 13 2. The Europe 2020 Strategy and the Innovation Union

14 The policy «cascade» Europe 2020 Strategy Innovation Union Flagship Initiative The ERA Framework Specific measures to address major bottlenecks 14 Smart, sustainable and inclusive growth Invest 3% of GDP in R&D Focus on Innovation

15 Building the Innovation Union 1. Smart fiscal consolidation 2. Smart Framework Conditions: - A European Research Area in 2014; - A better performing IPR system; - Faster setting of European standards; - Use public procurement budget to boost innovation; - Remove remaining obstacles to the cross-border operation of venture capital. 3. Smart EU budget 4. Tackling major societal challenges through European Innovation Partnerships 5. Smart and effective national policies 6. Regular monitoring by Heads of State & Government both at EU and national level 15

16 Smart fiscal consolidation Fiscal consolidation must preserve the sources of future growth ( Education; R&D; Innovation; Smart research infrastructure; Global market ) => through growth-friendly Stability and Convergence Programmes; go hand in hand with structural reforms of R&I systems => through ambitious National Reform Programmes so that every invested yields the highest return. 16

17 Bn$ Smart Framework conditions - Venture Capital and public procurement 17 Commitments to VC Funds in Bn$ (based on multiple closings) R&D public procurement expenditures(1) in Bn , , ,7 12,9 9,8 10,2 7,7 4,9 2,9 0, Q 2011 Source: Dow Jones VentureSource (1) Excluding defence Source: European Commission

18 Smart Framework conditions - Standards and IPR GSM = Europe world leader (EU-funded R&D; common EU standard set quickly; a single legal framework) 18 Wi-Fi = Europe follower (EU-funded R&D but too slow process for setting an EU standard => result: non-eu (industry-driven) standard has become market leader) Electrical vehicle

19 Improving Framework conditions 19 A standardisation package adopted on 1st June Implementing legislative proposals to create a unitary Patent protection (under enhanced cooperation) presented on 13 April A public consultation on a new European Regime for Venture capital funds launched on the 15 th June (legislative proposal by end 2011) A review of the State aid research, development and innovation framework in 2011 Proposals to exploit public procurement budgets for innovative products and services by the end of 2011 (Green Paper launched on the 27th January)

20 Smart EU Budget The next multiannual financial framework should reflect the strategic importance of R&D&I: the Commission proposes a total budget of 80 M for Horizon 2020 (constant 2011 prices) Common Strategic Framework to maximize its impact: - Bring together all EU research and Innovation funding - Cover the whole innovation cycle - Tackle major societal challenges, increase competitiveness, raise excellence in the knowledge base - Meaningful simplification 20

21 European Innovation Partnerships 21 To tackle major societal challenges whilst creating business opportunities To join up all key players and work together to transform ideas and research into successful innovative products or services A pilot partnership to prolong our citizens active and healthy life years by two years in 2020 has been launched Other innovation partnerships (e.g. on energy, raw materials, sustainable agriculture, water) are under consideration

22 Shared responsibility / Governance 22 EU: - overall steering and policy orientations - progress report, benchmark - peer reviews of national policies Member States: - specialise smartly - apply and learn from benchmarks Regional and local authorities: - specialise and develop potential All other actors have to be involved: - authorities, research community, business and citizens

23 Thank you for your attention 23

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