Innovation and Competitiveness in the EU

November 8, 2006
Session Chair: Mr. Shigeo Katsu, Regional Vice President for the World Bank.

The Knowledge for Development program was very pleased to welcome a distinguished speaker, Mr. Esko Aho President of the Finnish National Fund for Research and Development (SITRA), who gave a talk on Innovation and Competitiveness in the EU at the Bank. Mr. Aho is one of the main architects of Finland’s successful transition to the knowledge economy. He has had a long and distinguished career serving Finnish society, having been Prime Minister of Finland from 1991 to 1995.

After the 2000 presidential campaign, he joined Harvard University for one year as a lecturer, and following his retirement from the Finnish Parliament, worked as a private consultant.  Mr. Aho was appointed the President of Sitra on July 1, 2004.  Most recently, Mr. Aho chaired a 4-person group of experts on European innovation policy, which submitted its report for a Pact for Research and Innovation to the European Commission in January 2006.

At this talk, Mr. Aho first described some worrying trends in innovation in Europe. The EU is lagging behind the US in productivity growth; EU countries are poor in their uptake of ICT applications; it has a growing deficit in Research and Development (R&D) investments; and it has to grapple with the demographic revolution of an aging population.

In order to change the innovation paradigm in the EU, he then discussed the report on “Creating an Innovative Europe" which proposes a 4-pronged strategy focusing creating innovation friendly markets, strengthening R&D resources, increasing structural mobility, as well as fostering a culture which celebrates innovation, especially creating innovation-friendly markets to launch new products and services.

To create such markets, the report recommends actions on harmonized regulation, ambitious use of standards, driving demand through public procurement, and a competitive IPR regime. It calls for appointing an independent High Level Coordinator to orchestrate European action in each area across the Member States, different parts of government and the Commission, as well as among business, academia and other stakeholders. It also looks at the issue of more effective provision of resources for research and innovation. More focused use of research resources is called for, including establishment of centers of excellence and transferring resources from low priority areas to the better ones. This means a new paradigm of flexibility and adaptability in human resources, finance and organizational structures. To view the talk, please visit B-Span website.