Why Europe stays behind in Innovation waves


Why Europe stays behind in Innovation waves? Where are the new names innovating and changing the Growth course of the continent? We used to have a big heritage of Olivetti, Ericsson, Benz and so many other names’ turning into corporate brands. What’s happening now? Are we going to be simply “consumed” by the Asian (so-called) invasion?

Where has Agility disappeared?

Eurostat publishes almost every year the figures for EU annual R&D and innovation spend. For some countries (Italy, Netherlands, and Luxemburg) there is good news: innovation efforts have soared compared with the EU average. Others, on the other hand, need to worry. In my country, Greece, only the 0,65% of the GDP is allocated to innovation and most of that goes to Operating expenses (salaries mainly) of scholars assigned with innovation!

The Eurozone invests only around 2.5-3% in innovation and R&D, which might not be enough for changing scope/scale and evolving businesses to compete in the international arena. But is it a national and political agenda to succeed? Obviously not! Unfortunately, public spending on its own doesn’t guarantee market evolution, unless it affects whole sectors.

Furthermore, we know that innovation is not what it used to be, in research labs where a company was designing the next big market hit. Today it entails co-creation platforms, to accelerate practical solutions and empower larger society segments (education, transport, healthcare, products of origin, e-commerce and exports).

Some glimpse of hope on the horizon

The EU member states have become more innovative in recent years (the EU closed half of the innovation gap with the US), but the innovation performance gap is widening between countries. Innovation performance has worsened according to the Regional Innovation Scoreboard 2017. Stockholm remains the most innovative region in the EU. Whereas previous RIS reports only showed group membership for each of the regions, 2the 017 report reveals individual rank results. Stockholm is followed by Hovedstaden in Denmark, and South East in the UK. The overall most innovative region in Europe is Zϋrich in Switzerland.

The EU report shows a strong link between innovation and regional competitiveness (imagine that in my country, Greece, they still run tourism-oriented campaigns to increase likeability and interest…).

Innovation needs a real revolution

Innovating for me means primarily improving and fixing. Making something better and more sustainable in all sorts of angles. That to happen, first, it needs a monumental shift in the education system delivery. If you have inquisitive minds and people questioning and thinking how to improve things (challenging the status-quo), only then it pays back to allocate tax-payers money to R&D in school, university, corporate grounds, and states.

It then needs a wide-spread info campaign to business owners. The backbone of the EU economy, small and medium-sized companies don’t know where to start and how to alter things. It’s not only technology.

They stay behind in exports, cloud, logistics, new distribution networks, partnerships in targeted countries etc. the list is huge. But if they don’t adapt, they can’t bring in any innovative talented employee, neither they will improve their business operations.

Last but not least, it needs an absolute disruption in the public sectors’ decision-makers. In my country and in Southeastern Europe (former Balkan countries) each public organization has its own CIO/IT to handle digital integration, better citizen access, and e-services. A mess…

Stimuli to discuss and share

They have one office to coordinate all constituents for the EU programmes’ implementation for Digital, Green policies, Education, and Public services. One office, not hundreds! The Stockholm Region Office monitors EU decision-making process, plans and contributes with proposals. The office then provides civil servants and politicians in Sweden with information about upcoming EU initiatives at an early stage. Members of the association are the City of Stockholm, Stockholm County Council, Stockholm County Association of Local Authorities, together with other members, Council for the Stockholm Mälar Region, Gotland Region, Sörmland Regional Council, Uppsala Region and Västmanland Region. Few initiatives are:

  • Collaboration between Karolinska Institutet and the Stockholm County Council with the aim to improve the health of and increase participation of the individual.
  • Stockholm brings together cities and industry to integrate and demonstrate ’12 smart city solutions’ in energy, infrastructure, and transport.
  • City of Västerås is a public procurer demonstrating the effectiveness of the European Pre-Commercial Procurement (PCP) process for all governmental needs.
  • Stockholm Royal Seaport is one Europe’s largest urban development areas and international model for sustainable urban planning.

  • YFI combines work and language training for immigrants to get them into the labor market, and reduces socioeconomic differences in the region and is supported by the European Social Fund.

(source: Stockholm region, EU office)

The Industrial revolution of our times is only Digital. EU needs the right scale of technologies, like cloud computing, data-driven science, and the Internet of Things to reach a full potential.

Long list of barriers

We also know that R&D should be closely linked to practical, commercialized solutions to empower markets, societies, people, and business. If NFC is to help a device manufacturer, imagine the benefits for a retailer.

Along these lines, the OECD reports barriers to innovation and entrepreneurship (the list is long): bureaucracy, protected markets, low exploitation of broadband, and too many regulations that deter talent from taking risks and implementing business ideas.

For just Greece, they reported in 2013 having 555 legislative barriers to business-making. EU countries need to work harder on the openness and attractiveness of go-to-market research systems, as well as on business collaborations and the commercialization of knowledge, as measured by license and patent revenues from abroad.

Innovation and R&D are means to empowerment, sustainable change and inspires people to act

R&D usually was taking place at larger companies, while the reality today is that small enterprise makes up the majority of the EU market (they account for 58% of the employment market). So how will the small enterprises survive without R&D? Without improving and fixing?

Today in Europe only 1 in 5 small enterprises are involved in the innovation cycle, while this is the segment where the transformation must be applied. Only 1 out of 5 invest in e-commerce and technologies. This is the segment that needs contemporary education, references, competence shift and support from governments to thrive again.

Innovation and R&D are a means to empowerment, to sustainable change and to inspiring people to act. They are about seeing the world as an open space to perform and introduce beneficial services and products. About bringing together the experienced “grey hairs” with the fresh, creative talent, to co-create what the world needs to restart.

This is not going to happen simply through government legislation, but through governments pitching to their national audiences, showing that they must change their models and renew their ways. We need corporate incubators, large mentor networks combined, open universities for society and businesses, new mindset politicians, much more export-oriented start-ups. And we need passion.

Innovation isn’t a policy, after all

Innovation is not a policy. In some European countries, there are Innovation Officers, the government’s execution arm in planning innovation, to coordinate some EU funds and programs.

But this is disconnected from market realities, forums, professional associations, and communities that could all have been part of a wider plan in each country to bring entrepreneurship to the forefront. Adding to this, many countries miss out on having a government CTO who would implement a long-term ICT plan for all public authorities and market segments (such as healthcare solutions offered as web and app platforms).

Innovation still scores low in Europe overall because, in my view, we still look at our national turf, in our company territories and for a routine that we have been used to for years. Change runs faster than ever in the Connected Society.

Will we embrace it? That remains to be seen…

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