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European Commission

[Check Against Delivery]

José Manuel Durão Barroso

President of the European Commission

Speech by President Barroso at the Second Innovation Convention

The Second Innovation Convention

Brussels, 10 March 2014

Dear Prime Minister, Dear Mark,

Dear Commissioner, Dear Máire,

Ladies and Gentlemen,

Dear Friends

It is a pleasure to be with you again for the second Innovation Convention, after the first successful one which took place here in December 2011. I would particularly like to thank Commissioner Máire Geoghegan-Quinn for all her efforts, her competence, and enthusiasm in driving forward an ambitious European agenda on innovation, in the context of our overall Europe 2020 agenda, and also for her role, and the role of her team, in organising this Convention today.

Let me also thank Prime Minister Mark Rutte of the Netherlands for joining us today. Dear Mark, I think you have been a great advocate for innovation in Europe. Since you now have these indicators and ranking on innovation, let me tell you that if there was a ranking for the Prime Ministers in favour of innovation in the European Council, then you would certainly be one of the best, and certainly in the top three. I will not say more about the other two.

This Convention is the perfect embodiment of innovation. It is ambitious, bigger and broader than the first edition. It is also innovative itself in the way it is being run, with real live stories being told, and some exciting real examples of innovations on show. The counter example is myself as I am going to give a classic speech, for which I am sorry! And when I look at the audience and list of participants, I see the brightest and the best not just from Europe, but from across the world. So let me also say a special word of welcome to our friend and Minister of Science of South Africa and many other personalities that I know are among us, because we care about openness in Europe and in the world.

Innovation has a vital role to play in the recovery and in shaping our societies of tomorrow. Europe has a good story to tell, but we still need to do more to foster innovation and we want to do it with our partners.

Ladies and Gentlemen,

As Anne has just mentioned, a lot has happened since I was standing here in front of you in December 2011.

We were then in the middle of the worst crisis to have hit our economies since the European Community was created. People questioned whether there was the political and economic will to find solutions for the European economy and for European citizens. It was, at that time, common to speak about exit of Greece, the implosion of the Euro, some people were still speaking of the possibility of the disintegration of the European Union.

I am glad to say that we have managed to find a path that resisted short-term and inward-looking measures. I am confident, as the year progresses and slides into the second half of this decade, that we will have found solutions that learned from the past, allowing us to emerge stronger, more united, more open, more competitive and also more innovative and more forward-looking.

Although it remains fragile and modest, we are now recovering. Our recovery is gaining ground, with the most recent GDP forecasts two weeks ago raised to 1.5% growth this year and 2% next year.

So, we have reasons to look at the world and to our economy with confidence. Namely, there is now improvement in confidence of investors and consumers. I really believe we have turned the corner. But indeed we should avoid any kind of complacency. External shocks remain a threat, from economic developments in the emerging powers, to political developments on our doorstep, for instance in Ukraine. And with the current level of unemployment, especially amongst our younger generations, we cannot say, unfortunately we cannot say, that the crisis is over.

We know we cannot go back to business as usual. The world after the crisis will not be like the world before the crisis. We know we need to build on our momentum and cannot sit back and relax. We know standing still has the same effect as sliding backwards.

And I know that you – as innovators – forward looking as you all are by your DNA, understand this better than anyone else; that we must invest in the future, that the future of Europe is science, the future of Europe is innovation.

Ladies and Gentlemen

Innovation plays a vital role in our recovery and long term vitality. Our economic and social recovery requires innovation and competitiveness to create jobs and growth. Evidence shows that countries which invest in research and innovation have been the best equipped to get out of the economic crisis.

And that is why research and innovation are at the very heart of our Europe2020 strategy for smart, sustainable and inclusive growth. We have already taken significant steps in the right direction with our flagship initiative on the Innovation Union, as well as concrete targets, such as investment in R&D equivalent to 3% of GDP, reducing the number of early school leavers and increasing the number of citizens with tertiary education, so that we can match our skills with our future economic needs.

Innovation and skills go to the very heart of what we, in Europe, should be about in the 21st Century, in our knowledge, in our values and in our way of living.

That is why I am delighted to see the breadth of the sectors represented at this Convention. Because innovation applies to all areas of our society, from agriculture to energy and to the new digital age; from health and sport to the environment, transport, space; from a new mode of producing to a new mode of consuming; and it can be applied by us all in the private and public sector.

So how have we been performing across the European Union since the launch of the Innovation Union and our first Convention?

Let me recall first that Europe, united in a European Research Area, remains the largest knowledge-production house in the world. The European Union produces almost a third of the world’s total science and technology production and we count almost twice as many science and technology graduates as the United States. Very often, we are unaware of these figures because in statistics across the world, Europe does not appear as a single entry. But in spite of all the difficulties – and I know we have many -, we are the biggest power house in terms of innovation and science in the world.

And overall, Europe is improving its innovation performance. This was one clear conclusion from the 2014 Innovation Scoreboard published last week by the Commission: the impact of the economic crisis on innovation is not as severe as might have been expected. Differences in innovation performance between Member States are becoming smaller again, although at a modest rate.

From my point of view, I was particularly attentive to the most recent statistics from Eurostat on the European Union's Member States innovation growth performance. This shows a country, Portugal, that will soon be leaving the crisis as the number one in terms in growth of innovation, 3.9%. I mention Portugal because Anne is chairwoman of the Lisbon Centre. But there are other cases, so this is the point I want to make. We should look not only where the country's is in terms of its overall position. For instance, the country of Prime Minister Rutte is one of the best. It is considered as innovation leader. There are innovation leaders, innovation followers, moderate innovators. Portugal is a moderate innovator, but it is the number one in terms of growth. So it should also encourage those countries that are a little bit behind to catch up. I think this is extremely important for the success of our strategy.

Going against what I call the intellectual glamour of pessimism that is so fashionable today in Europe, let me perhaps briefly mention a few positive examples.

We have caught up a little with some of our international partners, even if we still are behind in terms of innovation, compared to our South Korean and American friends. The innovation gap is closing with the United States and Japan; and this is good news. With business spending at 1.26% of GDP, we are behind the US at 2%. South Korea, with 2.5%, continues to forge ahead, but we remain ahead of our other international partners, with China catching up.

Within the European Union, we are delivering on our Innovation Union, with 100% of it on track, putting in place the foundations for the challenges that I set out here at the first Convention.

We have matched our vision with a larger European budget to help stimulate Member States and businesses to innovate. Funding on research and innovation under Horizon2020, with 80 billion Euros, is 30% bigger than its predecessor, the seventh Framework Programme; and it is more coherent, joined up with other available funds.

I want to highlight this point. Because, in fact, and Prime Minister Rutte knows very well, we had very difficult negotiations for the new budget for the next seven years. But I have to be fair with the Heads of State and Government, that while they were rather prudent in other areas of the budget, I think I can say they were quite open, including of course The Netherlands - I would like to thank Mark - towards this issue of the budget for science and research. And it was not obvious, at the beginning, because of the financial constraints that we are living in Europe.

Horizon 2020 has been designed to be simpler to use for researchers and businesses, in particular SMEs, so that they can spend more time on research and innovation and less time on administration. Particularly, we now have less red tape, because we want to see projects up and running in 8 months rather than the 12 months they still take today to prepare.

We have had a few other notable successes, to name but a few:

The European patent has been agreed after 30 years of negotiation and blockage. This should make patenting 80% cheaper.

The European Institute of Technology (EIT) – with its expanded budget of 2.7billion Euros – has already helped to launch more than 100 start-ups, new products and services and trained over 1000 students in entirely new post-graduate courses.

The new risk sharing facility and the venture capital passport that Commissioner Máire put so much time and energy in, should encourage more risk-taking; because without trial and error, there can be no progress.

The European Research Council, one of our flagships, has consolidated its position and reputation as a funding and entity based on excellence. And indeed today it's a benchmark globally.

Finally, job opportunities for researchers across the European Union are becoming more visible. The Euraxess gateway has advertised 100,000 jobs in 4 years. This needs to be increased further, which is why we have recently launched a roadshow – 29 cities in 22 countries in 2 months – to offer career advice to researchers and make them aware of job opportunities across the European Union.

But we need to do more.

There is obviously more to do if we are to maximise our potential. There are still barriers to knock down; public and private investment to increase; jobs to fill; young generations to attract; and the gender balance to redress. And here, once again, I would like to thank Commissioner Máire Geoghegan-Quinn because she has also been very vocal in the need for gender balance in this area. And in fact the innovation prizes for women that we are going to deliver just afterwards are a good signal of this.

Because the reality is that whilst each Member State has made progress in research and innovation, there is a growing disparity across our regions, if you look at that not only at a national but also regional level. The 27 best performing regions are in only 8 of our Member States.

We are still behind some of our partners, and are still some way off our target of 3% of GDP in R&I that others are already meeting.

We are falling short in the proportion of researchers and young innovators and citizens. This is why initiatives such as the Youth Guarantee Scheme and the Grand Coalition for Digital Jobs are so important. We know that innovation needs ICT, and that 20% of our growth is based on the internet. We also know that we have nearly 1 million new ICT jobs in the coming years for our younger generations to fill.

And while progress on the European Research Area has accelerated in recent years, we need to improve further our competitiveness and efficiency, and, in particular, the mobility of researchers. This is an excellent example of where Europe needs to be bigger on the big things, where it makes sense to pool resources for cutting edge innovation which Member States could not afford alone.

The Communication we are preparing on "Research and Innovation as sources of renewed growth", to be adopted by next summer, will provide us with that next launch pad to take this work forward together. Precisely because, as it was already said, innovation is not just a policy for one Commissioner or one Director-General, it is something that has to be a mainstream policy, and not just a sectoral policy.

And I have said 'working with Member States together' because it is for them. For public administrations but also for private enterprises – big and small - to seize the opportunities available and deliver on their commitments. We need more innovative companies and a growth-friendly framework to bring innovations successfully to the markets. Innovation as such is not enough. Innovation also needs to be translated in daily life.

So it is a shared responsibility and we should be moving together in the same direction. Collaboration is essential for a smart, successful and efficient innovation on a bigger scale, improving our competitiveness, between Government and Industry and within Governments and Industry.

Finally, there are some issues that we cannot solve by innovation policies alone. And I want to make this point very clearly. This is sometimes not reflected in statistics. The best way to drive innovation in Europe is also in cultural terms. Some of the big difficulties we still have in Europe are of a cultural nature: the resistance to innovation. In fact, we see that this is less important than in other parts of the world. There are some cultural blockages that, because of stereotypes or prejudices, create difficulties for companies that want to make us do more in terms of science and innovation.

And some issues are also related to the fragmentation of the internal market. Let's make it clear: when in the United States a small start-up has an idea, immediately their market is their whole internal market across the United States. In Europe it is absurd, as we still have 28 digital markets. How can we compete when we still have 28 digital markets? That's why we have to break the barriers of the internal market. This is one of the best ways to contribute to a more innovation-friendly environment. This is critically important. That's why I really mean it when I say we have to develop. And we are doing it through science and innovation, through specific policies for innovation. But we also have to - in the general framework of our economic reforms - sustain this move for innovation and also to look at some of the cultural resistances that exist, for instance, for entrepreneurship in many quarters in Europe.

And this is the message I want to convey to you today. The Commission is committed to it; I believe we are going to do it. That is why it is also important to look at the future, and that is going to be my last word, on foresight.

I think foresight capabilities are important. I believe we need to identify the long-term science, technology and innovation breakthroughs that will provide opportunities for Europe to remain a global leader and at the same time shape our society towards the future. So I have asked the Chief Scientific Advisor, Professor Anne Glover and the Science and Technology Advisory Council (STAC) to prepare a report on foresight for next summer.

Based on that report, we are planning a high-level conference on "The future of Europe is science" to be jointly organised by the Commission and the upcoming Italian Presidency of the Council in the autumn. We planning to organise it in or around Ispra, where the Joint Research Centre has its main laboratories.

Ladies and Gentlemen,

I wish you a very successful Convention. Usually when we make these opening speeches we say 'I'm looking forward to reading the conclusions of the Convention'. In fact, I'm going to say more than that. Just later on today, I'm going to join you again in a cocktail, so I can learn something about the conclusions we will come up with during the day.

And I wish you all the best of luck for some very successful and constructive work.

Thank you very much for your attention.

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