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European Commission

Janez Potočnik

European Commissioner for Environment

"Opting in for Innovation, on our road towards Resource Efficiency"

5th European Innovation Summit

Brussels, 30 September 2013

Good morning Ladies and Gentlemen,

Let me start with a quotation…

"European economic recovery will quite clearly depend on our capacity for innovation and creativity, which must be nurtured at all levels in the working population – in large and small companies, in national and local administrations, in the trade unions and in the teaching profession."1

These words seem to have been written for today's conference, which I am honoured to open. I would like to thank the organizers and above all Lambert van Nistelrooij, Jerzy Buzek and Friedhelm Schmider from Knowledge 4 Innovation for hosting this inspiring event.

I chose my quotation because it illustrates the challenges that Europe faces today, although these words were written back in 1980 to introduce the structural changes needed for the Community budget and policies.

Back then, Europe was facing a budgetary and identity crisis caused by oversized national deficits and whether or not to engage in more shared policies. Sounds familiar, doesn't it?

You might be struck by the similarities with today's situation. There is however a major difference. Today we know that the decisions we made were correct. We took the right option when we decided to continue to work together and to grow in number. We have common values, we believe in common institutions and we want to make them stronger. This is the price for peace. The Nobel Prize received last year reminded us all of that.

However, those words also confirm that much is still left to accomplish. Therefore, I am happy to learn that today's conference will deliver “wake‑up” calls to Europe on the innovation front. Smart implementation of new policies and instruments is the key to achieving the maximum of Europe’s innovation potential.

We all know why we need innovation: Current production and consumption patterns are not sustainable. We need to change them. By 2030 three billion more middle class consumers will be joining we Europeans in enjoying a better life. This is good news, but it will put immense strain on resources, some of which are already degrading.

We also know what we need to do to change these trends.

In a time of crisis and political tensions, some countries might be tempted to find “opting out” solutions. But we - the European Union – have decided to “opt in”. We opt in for resource efficiency. The Europe 2020 Strategy is a green growth strategy that will not only help us create a strong economy for the long-term but also offers concrete business opportunities to exit from the current crisis – and this time, in a sustainable way.

This means moving from today's linear economy – where we mine,… manufacture,… use,… and throw away – towards a circular economy, where one industry's waste becomes another's raw material. It is about building a sustainable industry that can prosper for many years to come. It is also about working with nature, rather than against it.

Key to making this transition happen will be eco-innovative solutions that act upon the way resources flow in the economy and provide solutions to optimize resource use. The kind of innovation which addresses systems as a whole, and which looks at value chains in their entirety.

Past experience suggests that structural change has been driven by waves of innovation combining technological advancement with collective shifts in perception and behaviour. Eco-innovation is about identifying the causes of systemic problems, and addressing them in a coordinated way to shift toward sustainability.

By aiming to improve the performance of an entire system, instead of focusing on its individual components, eco-innovation allows us to overcome structural barriers more easily.

The transition to a green economy is not a "quick fix" strategy. It will be difficult, as any economic transformation is. It will require co‑operation from all stakeholders: from governments, from businesses, from researchers and from citizens.

Instead of viewing our environment either as a limitless source of materials, or as an external challenge to be dealt with separately, we must learn to work with it. Otherwise we will increasingly find that the soft laws of economics are increasingly hitting against the hard laws of physics, as we hit supply constraints and tipping points. Companies need to change how they create, deliver and capture value. This requires strong collaboration across the supply chain for example, to substitute primary with secondary resources or to introduce new more efficient production processes. The producer-customer relationship could also change from selling products to selling the utility derived from the product. For this to happen, we need to reduce the importance of ownership. Citizens have here a major responsibility. Car-sharing, eco-friendly tourism and co-housing are examples of innovations which enable citizens to satisfy their needs with lower environmental impact.

Awareness alone will not be enough to drive social and structural change, or to move niche success stories into the mainstream.

We need policies at all levels of governance to provide the structural conditions required to let people make more sustainable choices.

Research will contribute to the transition by facilitating a co-creation of knowledge within sectors with a view to tackling societal needs. For me, the real challenge for the research community is to match scientific output with green marketable solutions which respond to the needs of our citizens.

And last but not least, governments have their role to play.

As policy makers, we are leaders and partners in the transition to a green economy. We need to set the framework conditions to encourage innovation, and for stakeholders to subscribe to it. By engaging stakeholders in the development of long-term visions we can pave the way for businesses and citizens to welcome new policies and make changes.

The question that remains is: How do we promote a circular economy focused on resource efficiency?

There is no simple recipe for this systemic change to happen. But there are several actions that governments can consider to kick-start the transition.

First, we need to build a shared understanding of the eco-innovation challenges. Our European Innovation Partnerships on Water and Raw materials, for example, are an effective step in this direction.

Second, we need to develop shared targets and milestones. The Commission's Resource Efficiency Roadmap of 2011, set out the direction and rate of travel that we need to achieve the transition to a resource efficient economy and society, and the European Resource Efficiency Platform that I set up with stakeholders from all sides is guiding us through its implementation. Following its Manifesto last year, the Platform set out short-term policy recommendations in June this year.

These recommendations should inspire new policies, but also voluntary business actions, such measuring environmental footprints and resource use; voluntary business reporting, that takes into account resource efficiency; industrial symbiosis schemes to create markets for industrial by-products; sustainable sourcing systems, and advice for SMEs to help them boost their resource efficiency.

The Resource Efficiency Platform will now look at the longer-term perspective and come forward with a second set of recommendations in spring 2014.

Third, we need to measure the progress toward this vision and targets. The Commission has proposed that resource productivity be used provisionally as the main indicator to measure whether more wealth is being generated domestically with fewer resources.

And last but not least, we need to address the barriers to innovation in a concrete way. The Eco-innovation Action Plan, that I put forward in December 2011, is a building‑block in this direction. It addresses regulatory obstacles, lock-in behaviour, production systems, short-term financing. It also offers models for policies to drive eco-innovation: public procurement of innovation, establishment of clusters and eco-parks, market replication or first application initiatives, and financing solutions tailored for innovative SMEs.

Ladies and gentlemen,

I opened my speech by quoting the past. Allow me to close now by suggesting the future.

The cornerstones of a truly sustainable economy as described by the Resource Efficiency Roadmap are included in our proposal for a 7th Environment Action Programme. Here we have set out a vision of where we should be in the long term and we clearly identify the instruments that need to be set in place for our stated objective: "living well, within the limits of our planet".

My wish for you today, and for all of us, is to make this your motto and the guiding principle of your future action.

Thank you for your attention.

1 :

"A policy for industrial innovation - strategic lines of a community approach", Communication from the Commission to the Council.

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