Carlos Moedas - Commissioner for Research, Science and Innovation
Berlin, "European Investment Bank Conference"
Ladies and Gentlemen,
My message to you is simple, that in the future we will be judged for the investments we choose to make now. What? Where? When? and Why? Now, above all. Sufficient time has passed to understand the complex nature of public effort needed to advance new entrepreneurship and innovation. As policymakers, we can no longer afford to hide behind the words "progress" and "opportunity", because of our own vanity. Just to be seen to be investing in something, anything, anywhere, anytime. European citizens are at a point of zero tolerance for well-meaning, but ineffectual gestures. And rightly so. Now more than ever, we will be judged not for the quantity but for the quality and patience of our investments.
Since unification, successive German governments have led by example, making Research, Science and Innovation permanent features of public investment. The European Union has acted with equal foresight, substantially increasing its current budget for Research and Innovation, at a time when the overall budget was being reduced. There are no guarantees in life, but that decision is already etching its mark.
My first formal act as Commissioner, was to launch a swift process that channeled substantial funds into Ebola vaccine research. In record time, the European Commission was able to launch a major call. Able to mobilise over 200 million Euro and many hard working researchers. Just last week, we received news from Inserm. News of their promising, new treatment for early stage Ebola infection. We can be uplifted, proud, of this breakthrough, and everything we hope it will mean for humanity. But we can do more than even this.
Our economies are no longer in free-fall. Capital is no longer scarce in many places, and yet we, in Europe, remain lethargic, occupied by investments that deliver short-term gains, look safe and conventional. The irony is, that this misplaced caution has a strangle-hold on the clearest path to our common prosperity. Limiting the potential of our investments in European research, science and market-creating innovation.
Despite our creative diversity, we are the ones standing in our way. The alternative is prioritising investment in what has never failed us. In what has always been our greatest gift to the world. In the very essence of any great European enterprise or discovery. In the lifeblood of prosperity.
I ask that we invest more in knowledge and in people. That is our differentiator. As Europe we are the best at producing knowledge and our diversity is key for our future. And so today, I wish to touch on two points in particular. The first is what we're doing at European level to treat the ailment of anaemic R&D expenditure, and the second is the kind of cooperation with Member States, industry and private sector investors we hope will lead to the healthy and vigorous transfer of science to market.
And so to my first point: What are we doing? We're investing as never before. We're investing in a way that is flexible enough to respond to major crises like Ebola. We're investing in a way that allows for research and innovation to create markets and get us as someone once said from the Internet of Things to the Age of Intelligent of Things. We're investing in a way that will help bring research results to market faster. Whether it be through public private partnerships or the European Research Council. And we're investing patient capital into long term projects, that require fundamental research, and will lead to the kind of science and innovation from which future methods, technologies and business models can grow. So how is all this investment taking shape?
As I mentioned earlier, Horizon 2020 saw a 40% budget increase from our previous framework programme − making it the biggest multinational research programme in the world today. Open to the world. Funding excellence wherever it finds itself.
As presented by President Juncker earlier today, the new European Fund for Strategic Investment will further support research and innovation, by leveraging more public and private sector financing for "high risk high reward projects". From a rent seeking economy to a knowledge economy. Covering a much broader range than could ever have been achieved with Horizon 2020 alone. What's more, new synergies with Structural Fundswill make Regions key partners for improving R&I capacity and competitiveness across the EU.
Finally, we have taken the first steps towards creating a Capital Market Union, which should provide innovative projects with more diversified venture financing in Europe. We are far too dependent on bank financing. In the US, around 80% of financing comes from capital markets and 20% from Bank Loans. The situation in Europe is basically the opposite and this has consequences. Banks shy away from high-risk, R&D-intensive investments. The investments we need for Europe’s competitiveness.
So Horizon 2020, the new European Fund for Strategic Investments, better use of Regional Funds for Innovation, and the moves towards a Capital Markets Union are just four of the ways the European Commission is taking new steps to improve the quality of public expenditure on research, and stimulate more private investment.
Because we will never be able to tell what the future holds in terms of innovation. It wasn't that long ago that smart phones entered the global market place. Now many of us don't think twice about reading our emails at the touch of an app, at thirty thousand feet, on a flight that costs the same as a tank of petrol.
As politicians, there is also a lot we can do to eliminate the barriers to natural growth and innovation. If we want to see Europe's natural inquisitive and entrepreneurial spirit flourish, we cannot afford to stifle innovation with red tape. We must not kill creativity and invention with bureaucracy. Innovation needs "creative abrasion" for ideas to flourish into products. We have 28 Member States and over five hundred million people, whose ideas could achieve something, if we let them. If we invest in making Europe a more attractive place for everyone to test out their ideas. If we make Europe a continent that invests in Open Science and Responsible Research and Innovation. I call it the three Os: Open Science, Open Innovation and Open Data. If we provide far better incentives.
There was a time when the billion dollar tech startup was a pipedream: quasi-mythical entities that became known as unicorns. Now unicorns like Uber, Dropbox and Airbnb, and European ones like Spotify, Shazam or Rovio, are showing the whole world what disruptive innovation is all about. We need more examples like these. And we need them in all sectors. We need to provide the kind of incentives that encourage all European innovators to think global from their first day in business.
Good ideas, set free, can change the way we do just about anything.
Which brings me to my second point. This is where working together with Member States, industry and private investors becomes paramount. Member States must play their part in ensuring the Commission's new Investment Plan supports European research, science and innovation whenever and wherever possible. Just as industry and private sector investors must have the right information and incentives to take up these opportunities whenever and wherever possible.
When it comes to research, science and innovation - no matter how popular or unpopular the EU may be at home − Member States must put as much effort into building momentum at European level as they do at national level. It is in everyone's interest! To do so, is to invest in nations too.
In this day and age, no one country can solve climate change. No one country can end chronic disease or make their ageing populations young. Alone, no one country can even maintain a space station. 21st century science and technology show the value of working across disciplines and across borders.
It was at CERN, the European Organization for Nuclear Research, where physicists and engineers probe the fundamental structure of the universe, that Tim Berners-Lee, a British scientist, invented the World Wide Web in 1989. A European hub of cultural, intellectual and scientific exchange, resulted in an innovation that has fundamentally changed the way we work, communicate and learn.
The new European Fund for Strategic Investments, if used to fund research, science and innovation at every opportunity, could lead to breakthroughs the consequences of which we can only imagine. Who remembers that it was by discovering the concept of anti-matter, that Medical Research developed the PET Scan decades later, able to detect cancer.
So my call to action is this. Let us invest in knowledge and people. Let us continue to explore every frontier, so that we may profit from even one lightening bolt of inspiration that will encompass the whole world.