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Brussels, 8 April 2003

Commission issues 'Innovation Tomorrow', a key reflection on how to update innovation policy in the context of the Lisbon strategy

The European Commission has published a study entitled "Innovation Tomorrow" which analyses how the EU's innovation policies should be up-dated so as to be more effective. Since the European Commission's 1995 Green Paper on Innovation, there has been widespread recognition that innovation policy needs to influence other policy fields so as to avoid inconsistencies. This was also the main conclusion of the recent Commission Communication on Innovation Policy (see IP/03/357) which recommended the adoption of a multidimensional and horizontal innovation policy in the future. European Commissioner responsible for Enterprise and Information Society Erkki Liikanen said: "Innovation in a knowledge-economy is diverse. It is no longer exclusively based on research, science and technology or enterprise and ingenuity. It is increasingly based on other factors such as organisational or presentational innovation, where the focus is not necessarily on technological aspects of new products or services, but on intangible value added, improved market position, or increased productivity." The "Innovation Tomorrow" study argues that a rapidly changing economic context demands an innovation policy which is responsive and flexible to these changes, a "third generation innovation policy" which places innovation at the heart of those policies shaping economic growth.

Erkki Liikanen said: "The objective of innovation policy must be to find out where bottlenecks are occurring and to propose solutions. Implementation of the solutions will be through one or more of the traditional policy areas having a bearing on the behaviour of enterprises. We need a better understanding of the interfaces between innovation and other policies such as, for example, competition, employment, regional and educational policies."

The need to place innovation at the heart of those policies shaping economic growth is the key finding of a recently published study funded by the Enterprise Directorate-General of the European Commission. The study, entitled "Innovation Tomorrow", examines challenges for innovation policy in a knowledge-based economy, as well as links between innovation policy and other policy areas. It argues that a "third generation" innovation policy, which recognises the centrality of innovation to all policy areas, is key to increasing the innovation performance of today's economy.

As opposed to earlier generations of innovation policy, based on the linear, research-dependent perception of innovation, and the current generation which supports the systemic nature of innovation, this third generation would reflect the horizontal nature of innovation and the need for innovation to become an integrated dimension of traditional policies.

To date, only a few areas, such as competition policy and IPR policy, have attracted much attention in terms of their relation to and impact upon innovation. Nevertheless, in the context of the changes in the context and nature of innovation, a number of themes clearly emerge as to how the knowledge-driven economy extends the scope for policy action supporting innovation.

The study looks at three case studies highlighting different aspects of policy. The study also shows that governments have a clear role in encouraging innovation.

In the UK, an R&D tax credit was introduced for small firms in 2000, and extended to all firms in 2002. This was notable because it was a novel approach in British tax policy. But in designing the scheme, the lead ministry involved (the Treasury) undertook a much wider and deeper consultation among departments in other policy fields than had previously been tried. This type of inclusive discussion is seen as key by the study's authors.

The Oulu region in Finland has had very strong innovative performance in recent years, that was strongly facilitated by partnership between Nokia and the local university. This knowledge-partnership has led the development of the region, with strong government support, and could be seen as a "top-down" approach to the establishment of innovative companies in this region.

On the other hand, "bottom-up" development is seen in Catalonia, where entrepreneurial spirit is supported by public initiatives shaped by the autonomous government of this Spanish region. The Catalan Innovation Action Plan aimed at building on these conditions. In this respect, Catalonia appears to have been successful in creating an administrative framework that encourages innovation.

For further information:

The study, one of a number of studies launched by the Commission in the field of innovation policy to shed light on specific topics of interest to policy makers, can be requested from,

or alternatively can be downloaded from

See also:

Commission Communication on innovation policy

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