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Neelie Kroes

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

Electronics for Europe

IMEC Technology Forum

Brussels, 24 May 2012

New information and communications technology is changing our world. In an age that sorely needs economic growth, innovation in electronics offers us an ongoing boost.

In the nineteen forties, technology magazines breathlessly imagined a future where computers might weigh a "mere" one and a half tons. And nowadays, the devices in our pockets are equivalent to NASA's entire processing power in the 1960s.

Those changes are thanks to advances in chip technology. For some 60 years, changes in electronics — disruptive, challenging, exponential — have confounded all our attempts at prediction. Making even the boldest claims about the future quickly seem unambitious, or quaint.

Countless ideas have soon gone from being unimaginably futuristic – to commonplace – to old-fashioned. That pace of change is thanks to a huge global research effort – and to an agile industry able to use its results.

And, in Europe, research and technology institutes have also long been a backbone for progress, helping businesses and entrepreneurs access design and manufacturing, and helping train our workforce.

That change hasn't just been about fancy gadgets: it's been about growth and jobs. Today, the European micro and nanoelectronics sector is worth nearly 40 billion dollars, some 12% of the global total. Over the past decade, indeed, micro and nanoelectronics and their natural downstream sectors created more than 700,000 additional jobs in Europe.

And meanwhile, much more importantly, this is a key enabling technology: it provides tools, and drives productivity for almost every other economic sector. All together, semiconductors provide the knowledge and technology that generate some 10 percent of global GDP. In sectors from manufacturing to healthcare; from cars to cures.

And investment in micro- and nano-electronics has paid off. In Dresden, targeted public subsidies and grants for regional development were paid back nearly five times over in taxes and revenues.

First, let's remember the challenges we face here in Europe.

At a time of economic gloom, we need to focus on tomorrow's sources of growth. To enable an economic boost that keeps us competitive on the world stage. At a time of potential mass unemployment, we need to find smart, skilled jobs for the young, to avoid a lost generation. And at a time of austerity, we must find solutions that keep our public services - like healthcare - efficient and sustainable.

Second, let's remember the potential opportunities and applications lying ahead for electronics.

We have the Internet of Things which could connect up every device from your car to your fridge to your spectacles. Bringing more tools to link up real and virtual – with more chips everywhere.

We have an increasing need to pay attention to energy resources and climate change. And find solutions that are more and more efficient, and more and more green.

And finally, we have an ageing population — meaning a growing market for new health applications. From telecare solutions to help the elderly live longer with independence and dignity. To "pills" that, once swallowed, can electronically identify, monitor, and treat medical conditions.

Maybe you think that's science fiction: but remember that "amazing" one and a half ton computer.

Alongside these trends, many think we could see a fundamental change in the global chip market. Currently it's dominated by players outside of Europe – particularly in Asia, where companies benefit from a helpful environment and generous public support. But some find the market is due for a consolidation – with a smaller number of key global players inventing and producing. In particular at the cutting edge of technology where next-generation fabrication plants globally might be counted on the fingers of one hand.

Given this context for the industry. Given these new opportunities. And given the economic position of Europe, with no Member State big enough to compete along the whole industrial value chain: the question has to be, don't we want one of those global players to be European? Shouldn't we consolidate and cooperate on our own terms – rather than wait for it to be forced on us? Isn't the time right to pool our excellence in R&D, much more than we do today? Shouldn't we be looking for an "Airbus of Chips"?

We have strengths to build on in Europe. Belgium itself is famous for what it can do with chips – and not just the kind you have with mayonnaise! Looking beyond Leuven, across the continent we have many vibrant and creative clusters, covering the full electronics value chain. We have world-class academic and research institutions. We have a highly-skilled workforce looking for highly-skilled jobs. And we have a range of markets that will demand new electronic innovations – from that booming healthcare market, to the automotive and broadcasting sectors.

And yet – we are still far from being a European powerhouse. We have a fragmented landscape, with national policies championing national interests.

Within the sector, different business models can impede cooperation.

And our education systems still aren't producing enough engineers with the right skills to excel in this area. Even in the current crisis when many are looking for jobs.

Should we try to change that? For me it's definitely worth looking into. It's true that Europe needs innovation in the electronics sector – but then, the sector also needs Europe, needs our scientific and research expertise, and needs our huge markets.

If we are really going to succeed and throw our weight on the world stage, we need even more to work together, and act together at European level.

Imagine if we built a whole electronics ecosystem right here. Building on the leading technology institutes, and our world-class equipment and materials industry. Connecting the electronics industry with the markets that demand their innovations — public and private, research and industry, small and large business.

And connecting with those who can train and supply skilled labour.

We have the building blocks at our disposal. We have successful models for more cooperation, like the joint technology initiatives for joining up public R&D funding. We have EU funding: nearly 1.8 billion euros proposed through Horizon 2020 for the micro and nanoelectronics and the adjacent photonics key-enabling technology. We have other sources like the EIB or structural funds. And we can also support politically through the right competition and State aid rules.

But the Commission can't bring this about on its own. We can take the lead and start the talks – but we need others to commit, too.

Commit financially: and commit to doing things differently. So I need to know, how far are Member States, the research community, and industry prepared to work towards this goal? Are we prepared to set strategic alliances, build value chains in Europe, set R&D priorities and invest further downstream? How daring are we prepared to be, to do things better, together?

Back in 1959, the physicist Richard Feynman pointed out there was plenty of room at the bottom. Even after a half-century of miniaturisation, that's still true: there's still plenty of opportunity for business to discover the potential of ever smaller and ever faster chips.

Let's discover it together.

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