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Máire Geoghegan-Quinn

Commissioner for Research, Innovation and Science

Innovation, Investment and Growth

Figures and graphics available in PDF and WORD PROCESSED

Roundtable Lunch – hosted by the European-American Business Council (EABC)

Washington, D.C., 28th May 2010

Ladies and gentlemen,

This is my first speech, on my first visit outside Europe, as the Commissioner for Research, Innovation and Science. I am extremely pleased that this visit is to the United States, and I am very glad to be addressing the transatlantic business community.

The trade between the European Union and the United States is still the main artery of the world economy. And the industries and entrepreneurs of the US and Europe are at the beating heart of that economy.

Strengthening that vital pulse means applying new knowledge and ideas to the products and services that you provide. As the first ever Commissioner for innovation, I am responsible for creating the dynamic innovation policies in the EU that will help you to do that.

I will be leading a group of my fellow Commissioners in the creation of a new European Research and Innovation Strategy that will be put to the heads of state and government of the EU this autumn. This strategy will spell out how we will work with EU Member States, businesses and other stakeholders to transform Europe into a vibrant innovation-driven economy - what I call an "i-conomy".

Developing this i-conomy will be central to the EU's economic policy over the next 10 years. I am talking about the recently-published Europe 2020 Agenda. This is the roadmap that sets out in broad terms the policies and initiatives that we need to achieve growth and create more jobs.

This agenda is not only about getting Europe out of the current crisis. It is also about ensuring that we achieve real growth under three conditions:

Firstly, we want growth that is “smart” – in other words, based on the knowledge-generation and innovation that will leave us fit for the future;

Secondly, we want growth that is sustainable - meaning it is resource-efficient and environmentally responsible; and

Thirdly, we want growth that it is inclusive – which means socially responsible and with high employment.

The European Research and Innovation Strategy will be central to achieving these goals.

For example, we will focus efforts on the major challenges facing Europe and the world. These include climate change, energy security, food security, health and an ageing population. These issues are both top priorities for policymakers and huge global market opportunities. In this respect, it has a common aim with the new innovation strategy of President Obama.

We will use the resources of the 7th Framework Programme for Research – 50 billion euro from 2007 to 2013 - to develop the European Research Area, removing the major bottlenecks that prevent the free flow of researchers, ideas and technologies.

The strategy will be based on a broad understanding of innovation. While it will be research-based, it will include innovation in business models and management, design and marketing, and services. It will cover every stage from the conception of bright ideas through to their commercialisation.

In effect, we will create a single market for research and innovation - an Innovation Union.

As business people, you will have particular political concerns that I want to address.

On the one hand, as a policymaker, I will be striving to create the best environment I can for innovation. And on the other hand, I will be making demands of the Europeans among you, in terms of your investment in the processes, both financially and otherwise.

31 per cent of patents in the world emanate from the European Union. What this means, in reality, is that the European Union is to the forefront in developing many new technologies. The challenge for the European Union is to turn these research and technological advances into new, innovative goods and services. This will help to build a better society for all of us and for future generations. We must capitalise to a greater extent from the opportunities which new science and research can bring to our global society. We not only need to innovate but we must innovate quickly.

Many of the initiatives contained within Europe 2020 and within the Research and Innovation Strategy will seek to tackle the political and regulatory obstacles that stand in the way of the development of a proper innovation ecosystem in Europe.

For example, I know that you need access to a workforce whose knowledge and skills are world-class. So we will also enhance the quality and attractiveness of Europe's higher education system by promoting student and young professional mobility.

We will provide more access to the best and brightest by making vacancies in all Member States more accessible throughout Europe, while professional qualifications and experience will be properly recognized. And together with the EU Member States we will tackle the labour market rigidities that are all too prevalent.

A knowledge-based i-conomy needs a 21st century infrastructure. With the creation of a Digital Single Market based on an ultra fast internet, all Europeans should have access to high speed internet by 2013.

Innovative companies in the EU, especially SMEs, need greater access to start-up and investment financing. So we will propose measures to increase the availability of venture capital in order that promising new ideas can make it to the marketplace.

Another example - it is still too expensive and time-consuming in Europe to protect our intellectual property. The introduction of a Community Patent to replace individual Member State patents could save companies €289 million each year.

On top of these initiatives we will bring together R&D programmes with demand-side measures on public procurement, standardisation and regulation. They will be ambitious in both scope and scale.

But that’s enough for now on what I can do for you; now I want to talk about what you can do – especially in Europe – to help yourselves.

It is true that US and European-based companies still form the majority of the most innovative companies. The statistics tell us this. But that proportion is diminishing year by year, so our businesses must invest more in research and innovation to compete.

I am looking to you, in your role as private commercial organisations and entrepreneurs, to respond to this call.

To help solve major societal challenges, the EU Research and Innovation Strategy will describe a first set of initiatives, which we call "European Innovation Partnerships". They will build upon existing initiatives where relevant, and many will call for public-private partnerships.

In areas like health and clean energy technologies, these new partnerships will streamline and integrate public and private investments through Joint Technology Initiatives, the joint programming of member state research efforts, the actions from the European Recovery Plan, the Lead Market Initiatives on public procurement and European Technology Platforms.

I see these partnerships as an opportunity to simplify our actions and to focus them on the key priorities.

The contribution of R&D to competitiveness and productivity growth is well-researched and documented. So it is also an opportunity for you to improve your competitiveness while meeting key global political challenges.

As such, these investments will be in your interest, as well as in the wider interests of society. I very much hope that you will rise to the occasion.

I look mostly at my European countrymen as I say this, because it is the difference in the research investment of our private companies that explains much of the differences between the research intensities of Europe and America.

This gap explains some of our relative lack of game-changing innovation, as compared to our American cousins. But there are other reasons, including the structure of our industrial sectors. And there are cultural aspects, such as differences in attitudes to risk-taking and toleration of failure.

But the US and the EU are much more alike than we are different. And we are closer in culture and interests, and more integrated than any other two regions in the world. This is despite the odd differences of opinion and the emergence of large new competitors and partners in the East and South.

Therefore, before I finish, I want to turn back to the transatlantic dimension for a moment.

The dialogue between the European Union and the United States in matters relevant to trade and investment is a rich, complex and fruitful one. The European-American Business Council is an excellent case in point.

But if we want to continue to thrive we should go further. We need to pursue regulatory and policy cooperation that promises closer integration of our economies. The result will be to boost growth and job creation, while supporting strategic societal goals.

That is why I will be devoting much attention to the work of the Transatlantic Economic Council, which is co-chaired on the EU side by my friend and colleague, Commissioner de Gucht. At the meeting of the TEC last October 2009, it was decided to create a transatlantic Innovation Partnership.

Over the course of the next few weeks and months we will jointly define a number of areas where we will coordinate our innovation activities under this partnership and compare our policies for mutual learning. I am very much looking forward to engaging with our US colleagues on these efforts.

Ladies and gentlemen,

Both the EU and the US are facing similar economic challenges. We both must show ingenuity to remain competitive in the global marketplace. Research and innovation will be crucial components in support of our respective economic development. These policies are at the heart of the European project. We are creating an alliance of governments, industry, education and research organisations, civil society and individuals in order to succeed.

We will invest to innovate; and we will innovate to grow. This growth must be sustainable, and accompanied by the jobs and the improvements in quality of life that our citizens demand.

Thank you.

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