The Innovation Union – What Europe is doing to kick-start the technological revolution

Lawrence Jones

Tuesday 11 November 2014

Spending on innovation in the EU lags behind other developed nations. As a result, the Eurozone is no longer a hotbed of R&D investment, collaboration or product development. The continent is therefore at risk of a significant ‘brain drain’ as a new generation of EU innovators look to more technologically advanced – and innovation focussed – nations.

The Innovation Union is part of a wider strategy, called Europe 2020.  As part of this, all EU nations have been challenged to improve, with the EU setting a 3% GDP target for R&D investment. The economics stack up, but for the cash-strapped nations, it’s perhaps more aspirational than realistic.

The Innovation Union isn’t a hollow promise, it’s a serious business with literally billions of euros earmarked for investment. But just what does this mean for businesses?

Before delving into the detail, we need to understand just what the problem is. Michael Jennings, spokesperson for research and innovation at the European Commission, explains: “The European Union has, in recent decades, had a problem. We have great researchers and scientists, but haven’t always been great at turning their good ideas into new products and services.”

Many EU countries are leading the way in innovation, creating technology that is powering the current worldwide tech boom. It’s a success story, but so often innovations created in the EU have been adopted by others.  Rather than benefitting the countries and organisations that fostered them, the developments have been commercialised elsewhere.

Jennings uses MP3 as an example – the industry standard audio compression format was originally created by German scientists at the University of Hannover, but commercialised elsewhere. Sadly, there are many others.

Pressed as to why the EU often struggles to commercialise innovation, Jennings identifies a number of causes: “This is partially a cultural problem, but also a question of having the right environment.”

Breaking it down

This is where the EU can help: “Innovation Union is above all an initiative to improve that environment and make it easier to innovate,” explains Jennings.

A recent EU report into the current situation has been helpfully summarised by Jennings into three key aims:

  1. Cement the EU’s place as a world-class performer in science;
  2. Revolutionise the way the public and private sectors work together, notably through Innovation Partnerships and public-private partnerships; and
  3. Remove bottlenecks – create an internal market for skills, patents, venture capital, innovation procurement and standard-setting to foster ideas being quickly implemented on the market.

Business opportunity

It is by tackling these three key areas that Innovation Union will succeed. But what will that success look like for businesses?

“We want businesses to be able to do what they do best: innovate and compete,” continues Jennings. “We also want them to get more involved with what we are doing at the EU level, in particular participate in our new research and innovation programme, Horizon 2020.

“Horizon 2020 will focus on funding the whole innovation cycle, from blue-sky research to close-to-market initiatives. We want academia, research institutes and businesses (including SMEs) to work together on issues that benefit society and create new business opportunities.”

As part of the Horizon 2020, businesses large and small will therefore be able to bid for grants and funding, with the web portal providing a searchable database of opportunities for businesses. With a budget of around €80 billion over the next seven years, they’re clearly putting their money where their mouth is.

Technologically literate

When asked specifically what the Innovation Union is doing for the ICT sector, Jennings is positive: “There’s a lot been going on in relation to ICT at the Commission, led by the Digital Agenda team. From the ‘Startup Europe’ initiative, to a recently announced public-private partnership on Big Data, there’s something for everybody.”

The Innovation Union appears less a cohesive and uniform plan to transform R&D and more an opportunity for businesses to access funding for their projects, while breaking down some of the legal and regulatory boundaries that exist across the continent. Key to this involves EU regulation being made simpler to navigate.

Specifically, a single EU patent system will save businesses the time taken to protect their innovations across borders. Perhaps more importantly for businesses, it will reduce costs by an estimated 80%.

Big promise?

Policy makers are fond of making bold promises, but so often the excitement around a new policy can turn into an embarrassment after a few years. The list is endless.

However, Jennings is confident of the future. “By 2020 we hope to have a better joined up research and innovation system in Europe that is generating more knowledge and turning that knowledge into goods and services, where possible. That’s good for growth and jobs, but also good for society,” he adds.

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