Moving Europe forward: innovating for a prosperous future

Moving forward

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The European Institute of Innovation and Technology (EIT) is the EU’s principal agency for innovation. Founded in 2008, it seeks "to facilitate transitions: from idea to product, from lab to market, from student to entrepreneur.”

The creation of the EIT represented a radical change of EU innovation policy. It aims to take a holistic approach to innovation by assuming an integrated perspective among the three sides of the “knowledge triangle”:

  • Education
  • Research
  • Innovation

Our survey indicates that business leaders remain largely unaware of its actions. The survey respondents also considered it a less effective institution in supporting innovation than the European Investment Bank.

Which of the following is the most effective institutions to support innovation?

EY - Which of the following is the most effective institutions to support innovation?

Source: EY and CEPS survey 2013.

A new approach to regional innovation

Faced with an apparent lag in innovation performance, EU institutions have decided to rely on a more locally specific innovation policy, at least for the allocation of cohesion funds. The concept of smart specialization is now being used as a mandatory condition for obtaining funds under the next round of cohesion funding (2014–20).

The mechanisms for implementing smart specialization are the Research and Innovation Strategies for Smart Specialization (RIS3). The strategies require that would-be participants follow a number of key steps:

  • Analysis of the national or regional context and potential for innovation
  • A sound and inclusive governance structure
  • A shared vision about the future of the country or region
  • A limited number of priorities for development
  • Suitable policy mixes
  • Monitoring and evaluation mechanisms

Partnering for progress

A close and productive working relationship between government and business is an imperative hardly confined to the borders of the EU. Indeed, a close collaboration between the public and private sector is something that every country and region, developed and emerging, should aim for.

The most positive survey response of all related to the partnership between universities and industry, with 98% support. This recognizes the central role played by universities in creating and transferring new technologies, and the benefits to both parties of a bilateral relationship in the research and development of innovative products.

In addition, business leaders believe that the EU does have an important role to play in the funding of innovation, and should direct funds into those areas most likely to achieve that end.

The enthusiasm for different kinds of partnerships, indicates that such collaboration is particularly fruitful and should be well funded and supported by an efficient infrastructure.

The EU should also seek to create and stimulate demand for innovation, as indeed should the national governments of the companies surveyed.

Innovation should remain “bottom-up”

There are several reasons to believe that innovation, as a process of transformation of new ideas and concepts into new products, will increasingly require a bottom-up approach, one rooted in the needs and demands of the market, rather than imposed from the center.

Today, innovation requires several organizational forms, depending on the sector, the territory, the specific culture and skills that a country can offer.

Faced with this ever-changing dynamic, governments are unlikely to be able to adapt their policies at the right pace, nor should they revert to past mistakes such as picking winners in industrial policy. Policy-makers should focus their activities on specific programs:

  • Infrastructure
  • Global interconnectivity
  • Tax policy
  • Education
  • Culture
  • Openness
  • Rule of law
  • Coordination