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Neelie Kroes

Vice-President of the European Commission responsible for the Digital Agenda

"Unlocking the digital future through Open Innovation"

4th pan-European Intellectual Property Summit

Brussels, 3 December 2010

Thank you very much for the opportunity to speak at this important forum. I would like to touch on an important topic in my portfolio, key to achieving many of our competitiveness and innovation ambitions in the coming years. This is the issue of how to embrace open innovation and platforms, so that we avoid wasteful platform competition, and anti-competitive lock-ins, as well as stimulating development and investment in new generations of on line services.

The landscape today

We are now living through a permanent digital revolution. This long and peaceful revolution is changing how we organise our lives. Powerful computing platforms are creating new markets and we are finding new ways to leverage user creativity.

What are the impacts and consequences?

The most visible consequence is that Internet traffic on both mobile and fixed networks is growing by about 50% every year. An ever larger part of our economic and social activities are shifting on line. Digital media consumption is growing with double digits. Social networks were once considered an irritant to the mainstream media. Now they have either overtaken the mainstream media or are becoming the mainstream media. To illustrate: 96% of under 30-year-olds have a social networking account.

There are Novel Opportunities:

But more is yet to come. Infrastructures and business processes are getting "smarter". Which is crucial if we want to deliver the smart, sustainable and inclusive growth which we set out in the EU2020 strategy. Such processes, be they of private or public nature, are more and more global or distributed: this requires Internet connectivity and increasing amounts of bandwidth. They also need ever more flexibility and efficiency; requiring large computing power which may come from grid or cloud systems. This means exploiting to its fullest extent the core Internet features: connectivity and computing power.

Technologies are almost there

The combination of mobile Internet, cloud computing and growing sensor networks supports the needs of the "smart economy"; or as others call it: "the Internet of Things". In reality this is nothing more or less than a ticket to a better way of living. It is more advanced than many people realise, and that's a good thing. Today, there are more than 1 billion transistors per human on the planet. We will soon have the possibility to sense and measure the changes in our world that affect our daily lives. The question is whether Europe is willing to make the most of this opportunity.

Can Europe play a prominent role in this new Internet revolution?

The rest of the world certainly is. While Europe represents more than 30% of the global ICT markets, our presence in Internet innovation fails to match the know-how of our industries, researchers and innovators. We have to change this, and to use levers like our mobile technology leadership to do so. Take mobiles and add to that our strong position in domains like embedded systems or sensor networks. That combination takes us to the example of M2M - machine to machine - communications. Here Europe is actually in front of the pack with a 43% market share, growing by 25% per year. We need to stay ahead by bringing together the public and private sectors and leveraging every last Euro. This is precisely what I propose with the Future Internet Public Private Partnership.

The Future Internet PPP is "taking the bull by the horns"

Our intention is to be bold with the Future Internet PPP. We want to leverage requirements in domains like telemedicine, smart energy management, optimisation of urban transportation, or the smart cities of tomorrow. As a public institution our priority naturally focuses on business processes of a public nature. This provides us with a powerful environment to address the next Internet revolution at European level. Our ambitions are very clear:

First, we want to take novel Internet application opportunities to reposition our industries and innovators as prominent actors in the Internet of tomorrow. There is no point in playing in the second league.

Second, we want to bring the innovations and the benefits of the Internet of tomorrow straight to our citizens. And that's also why public application domains are so relevant.

Third, only if we play our part, can we ensure that profound European values like privacy and transparent governance are embedded in the design of the next generation Internet.

Leveraging a trend at European scale

In this competition, we are not starting from scratch. Numerous cities and regions have started pilot initiatives – and these levels of actions are the right ones to aim at given that close to 80% of Europeans live in cities. The world will increasingly need these solutions as it urbanises. Europe should do it first and sell those solutions to the world, such as:

Stockholm's smart traffic toll which helped to reduce traffic by 22%, cut CO2 emission by 20%, and boosted public transport by 40,000 users.

The city of Nice tests an intelligent waste disposal system;

Amsterdam looks at smart energy delivery;

Initiatives like "Real Time Rome" in the domain of smart transport or "Paris 2.0" in the field of pollution control also provide examples of urban services delivered through Internet connected sensors.

While we need to have local pilots, we cannot constrain ourselves by thinking only local. We need to end the fragmentation of thinking and resources by scaling those processes to the European level.

Most obviously we will get economies of scale from systematic usage of generic and standardised technologies. This is what we are proving through projects like "Smart Santander" which plans to deploy up to 12,000 sensors in city infrastructure.

Overall I am talking about providing the European research and innovation community with a platform that allows large scale experimentation and evaluation of smart service concepts under real-life conditions.

The Future Internet PPP takes this approach one step further, moving research closer to innovation. The real challenge here is the now clichéd shift from working in silos to collaborations. That it is a cliché does not make it any less real.

In essence this means that the Future Internet PPP is a pathfinder initiative to get this systematic action going. With this PPP, we intend to provide a versatile and open communication and computing platform. The real added value here is that we take a generic and large scale approach at EU level.

Openness is central to the success of the initiative. The PPP targets multiple use cases ranging far beyond the sole ICT sector. For example, it involves new players in the Internet value chain, such as health professionals, transport actors, and many other sectors of public utility. This is a very powerful model which we see taking off in other areas as well. Take San Francisco and the issue of public sector information. In the second half of 2010 San Francisco created regulations mandating open data, and made some software development tools available to the public. Citizens have taken ownership of these facilities and created numerous applications that use the city's data. There are many examples like this around the world like, in Eindhoven in the Netherlands or the Apps4Berlin initiative in Germany.

Public actors have a key role

I cannot stress enough how much of a catalyst the public sector is in these fields. And given this enabling role public sector bodies should also take their responsibilities in the definition and choice of relevant standards. I believe that they should use their role to ensure the openness of platforms and hence maximum room for user-driven innovation.

Standards and openness are consequently a key requirement

They are key conditions for the success of the Future Internet PPP, and we know industry is open to this model. The next step is a shared process in which knowledge is made available openly and transparently for all to develop Internet-based products and services on the new platform. The Future Internet PPP is implemented under the EU's framework programme for research which comes with a set of IPR provisions. Knowledge generated by the initiatives will primarily be exploited by participants. But it is also foreseen that the platform functionalities will be specified in technical documents and can be implemented by all third parties under fair, reasonable and non-discriminatory conditions.The approach of this PPP therefore fully reconciles IPR protection with openness requirements.

Where are we today?

So, now that the first call for funding applications has closed, we must set about awarding the funding by Easter 2011, and I will ensure that we stick to this timetable. While the expected funding, about €300m, may seem only a drop in the Internet ocean, it can be enough to create a very positive dynamic amongst Europe's Internet innovators.

Our collective task is to create momentum and avoid fragmentation. More and more sectors are joining the Internet value chain; it is our job to find ways to talk to them; to bring them into the tent.

The future Internet is a future of technologies, built on many standards, involving many sectors – I am convinced that the potential for innovation on top of this open platform goes well beyond what is achieved on the current Internet.

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