ITRE report: Putting knowledge into practice: A broad-based innovation strategy for Europe

Motion for resolution (2006/2274(INI))

The European Parliament,

• having regard to the Commission communication entitled ‘Putting knowledge into practice: A broad-based innovation strategy for Europe’ (COM(2006)0502),
• having regard to the Commission communication entitled Investing in research: an action plan for Europe (COM(2006)0226),
• having regard to the Commission communication on implementation of the Lisbon Strategy entitled ‘More research and innovation – investing for growth and employment: a common approach’ (COM(2005)0488) and the relevant Commission working documents (SEC(2005)1253 and SEC(2005)1289),

• having regard to the January 2006 report of the independent group of experts on R&D and innovation, constituted after the Hampton Court summit, entitled ‘Creating an innovative Europe’ (Aho report),

• having regard to the Presidency conclusions of the Lisbon European Council of 23 and 24 March 2000, which aimed to make Europe the most competitive and dynamic knowledge-based economy in the world, and the Presidency conclusions of the Brussels European Council of 22 and 23 March 2005 and 23 and 24 March 2006,
• having regard to the conclusions of the 2769th meeting of the Competitiveness Council of 4 December 20061,
• having regard to the Commission communication entitled ‘Working together for growth and jobs – a new start for the Lisbon Strategy (COM(2005)0024),
• having regard to the Commission communication entitled ‘Community actions for growth and employment: the Community Lisbon Programme’ (COM(2005)0330),
• having regard to the national reform programmes (NRPs) presented by the Member States, the Member States' autumn 2006 reports on the implementation of their National Reform Programmes2, and the assessment of the implementation of these NRPs by the Commission in its annual progress report (COM(2006)0816),
• having regard to Council Recommendation 2005/601/EC of 12 July 2005 on the broad guidelines for the economic policies of the Member States and the Community (2005 to 2008)3 and Council Decision 2005/600/EC of 12 July 2005 on Guidelines for the employment policies of the Member States4, which together form the ‘Integrated guidelines for jobs and growth’,
• having regard to Decision No 1982/2006/EC of the European Parliament and of the Council of 18 December 2006 concerning the Seventh Framework Programme of the European Community for research, technological development and demonstration activities (2007-2013)5,
• having regard to Decision No 1639/2006/EC of the European Parliament and of the Council of 24 October 2006 establishing a Competitiveness and Innovation Framework Programme (2007 to 2013)6,
• having regard to the proposal for a Regulation of the European Parliament and the Council establishing the European Institute of Technology (COM(2006)0604),
• having regard to the proposal for a Council Regulation on the Community patent (COM(2000)0412), and the revised text by the Presidency7,

• having regard to the Community framework for state aid for research and development and innovation8, and the Commission Communication entitled 'Towards a more effective use of tax incentives in favour of R&D' (COM(2006)728),

• having regard to the Commission Staff Working Paper entitled ‘European Competitiveness Report 2006’ (SEC(2006)1467) and the Commission Communication entitled ‘Economic reforms and competitiveness: Key messages from the European Competitiveness Report 2006’ (COM(2006)0697),
• having regard to the ‘European innovation scoreboard 2005 – comparative analysis of innovation performance’, which clearly shows the USA and Japan leading this field9,
• having regard to the OECD science, technology and industry outlook, 200610,
• having regard to its resolution of 5 July 2006 on implementing the Community’s Lisbon Programme: more research and innovation – investing for growth and employment: a common approach11,
• having regard to its resolution of 15 March 2006 on the input to the Spring 2006 European Council in relation to the Lisbon Strategy12,
• having regard to the report by the group of experts of July 2004 entitled ‘Improving institutions for the transfer of technology from science to enterprise’,
• having regard to the working document of the European Economic and Social Committee of 8 November 2006 entitled ‘Investment in knowledge and innovation’ (Lisbon Strategy), information report INT/325,
• having regard to the i2010 initiative, and particularly the Commission communication entitled ‘i2010 e-government action plan – accelerating e-government in Europe for the benefit of all’ (COM(2006)0173),
• having regard to the Commission working document on innovation in services of November 2006,
• having regard to the Committee on Regional Development report entitled ‘The contributions of future regional policy to EU innovative capacity’ (A6-0000/2007),
• having regard to Rule 45 of its Rules of Procedure,
• having regard to the report of the Committee on Industry, Research and Energy and the opinions of the Committee on Economic and Monetary Affairs, the Committee on the Internal Market and Consumer Protection, the Committee on Regional Development and the Committee on Legal Affairs (A6‑0000/2007),

1. having regard to the state of progress of the Lisbon Strategy and consequently the importance of an even more extensive innovation strategy in view of global competition,
2. whereas insufficient use is made of the vast stores of specialist scientific knowledge in EU research centres and in patent offices,
3. whereas the main objective of innovation is to boost the EU’s competitiveness and give its citizens a better quality of life,
4. having regard to the role of innovation in devising social models in EU Member States,
5. whereas services represent an underexploited innovation potential in the EU,
6. whereas rapid information flows and universal access to internet services in the EU are an essential precondition for introducing innovative solutions,
7. having regard to the importance of institutional support for the process of innovation and copyright knowledge management,
8. whereas the current unitary patent system does not make it possible to take account of the requirements of some sectors, and the strong growth in the number of patents issued increases the risk of litigation and hinders innovation,
9. having regard to financing of innovation policy and the increasingly important role of public procurement and public-private partnerships,
10. whereas interdisciplinary teaching covering areas that overlap traditional subjects is a precondition for innovation,
11. whereas lifelong learning can contribute to the development of knowledge about innovation, and promoting the information society helps to combat marginalisation on the job market,
12. whereas establishing European quality standards and rules concerning the first phase of development of new-generation products and services is a source of innovation,
13. whereas the Seventh Framework Programme should facilitate the establishment of a stronger and more extensive European research area, focused on specific tasks,

1. Welcomes the Commission proposal to launch a new initiative for lead markets, aiming to facilitate the marketing of new, innovative products and services in areas where the EU can become the world leader;
2. Notes that SMEs have a particular role to play in implementing innovative solutions;
3. Underlines the need to introduce into Member States’ education programmes activities aiming to further highlight the importance and role of inventors of innovative solutions, particularly ecological solutions;
4. Proposes installing the technological and scientific infrastructure needed for creating innovative solutions in existing educational establishments, to provide small research centres with development prospects;
5. Invites the Member States to implement tax legislation that encourages enterprises to invest more in research, development and innovation;
6. Notes the existence of European technology platforms and the Council decision on European joint technology initiatives in key areas for European innovation, to take the form of public-private partnerships;
7. Invites the Member States to identify the areas that they consider most innovative, taking account of their own priorities;
8. Notes the Competitiveness and Innovation Programme, which provides for appropriate financial instruments, and the Commission communication entitled ‘Financing the growth of SMEs’, which sets out specific measures to increase risk capital investment;
9. Invites Member States and local communities to adopt innovative and environmentally friendly solutions under the Competitiveness and Innovation Programme and also draws attention to the option of using financial aid for SMEs under the JEREMIE programme;
10. Points out that that urban centres can play an important part in devising an innovation strategy for a whole region and that they can perhaps take the initiative on some promising projects, e.g. using the potential of thermo-modernisation and combined heat and power, or taking other initiatives such as science and technology parks;
11. Notes that rural areas can welcome the development of new generation enterprises with a scientific research base in biotechnology;
12. Notes the ‘Europe Innova’ initiative, which adopts a more dynamic approach to the creation and support of innovative enterprises in the services sector;
13. Calls on the Commission to create the conditions needed for the continued development of ‘EuroInfoCentres’ to encourage, in each EU region, the development of innovative solutions through better information flows;
14. Considers that public procurement plays a strategic role in promoting innovative products and services;
15. Calls on the Commission to set up, in cooperation with the Member States, a group of patent experts to draw up new common rules on patents;
16. Calls on the Commission to draw up, in cooperation with the Member States, alternative and complementary measures to the patents system, providing inventors with legal protection against criminal law proceedings;
17. Calls on the Commission and the Member States to ensure that common rules on patentability are appropriate for the conditions of each particular sector;
18. Calls on the Commission and the Member States to propose, in the context of the new European patent, a procedure for eliminating trivial patents, and sleeping patents filed for the sole purpose of obstruction;
19. Calls on the Commission, in cooperation with the European standards institutes, to adopt effective measures to strengthen institutional frameworks for adopting European standards;
20. Calls on the Member States to encourage the search for a consensus on European standards, as a rapid decision in this area is vital for the EU's competitiveness;
21. Calls on the Commission and the Member States to choose open standards whereby intellectual property is accessible with royalty-free licences;
22. Encourages the Member States to promote, in their countries, the creation of ‘knowledge regions’ and ‘clusters' and to ensure cooperation with experts from third countries;
23. Notes the initiative of the Committee of the Regions to set up a network of regions within an interactive platform of local communities aiming to compare and exchange experience acquired while implementing the Lisbon Strategy;
24. Calls on the Member States to establish scientific career criteria to take account of candidates’ abilities in patents and innovation;
25. Urges the Commission and the Member States to introduce and promote national and European prizes for innovation;
26. Instructs its President to forward this report to the Council, Commission and the parliaments and governments of the Member States.

Explanatory statement

1. Introduction

Europe has built up substantial specialist knowledge in various scientific fields thanks to research conducted by universities, research centres and national institutes, national science academies and Union research and development bodies. National patent offices represent an important source of knowledge, as does, more recently, the European Patent Office (EPO). However, there is no simple way of translating this knowledge into economic practice in order to make effective use of it. The paradox of the situation in Europe is that we have highly developed centres for the development of knowledge - centres of excellence, but with little economic impetus to use that knowledge as a basis for developing innovative activities. The aim of the document that has been drawn up is to realise the Lisbon Strategy and lay the foundations for European innovation policy, by spelling out clearly its objectives and adopting instruments to achieve those goals which will facilitate: - tackling research areas geared to current and future social and economic needs of the EU; - transfer of advanced knowledge developed by research centres to economic units; - practical application of innovative solutions to economic and social spheres.

2. Defining innovation

Innovation should be taken to mean innovative solutions to problems arising in the manufacture or use of goods or the provision of services. The goal of innovation is to rationalise the manufacture of goods, the provision of services and the use of market products, in a way that will result in savings in energy, materials and working time, as well as protecting the environment and improving the quality of services. The beneficiary and instigator of innovation is always the individual. It is often the case that a practical solution has not yet been found to a problem or it may also be that a solution already exists but the new problem entails a revision, modernisation or modification of that solution. Innovation applies to products, processes and services. The goal of innovation activities may be the interests of beneficiaries (marketing aspect), developing competitiveness (economic aspect), eliminating adverse effects on the environment (environmental aspect) or improving quality of life and working conditions (social aspect). Unfortunately, there are also 'artificial innovations' relating to certain products, which mostly involve just changing the packaging and a misleading advertising campaign. These bogus innovations need to be fully eliminated.

3. Promoting innovation

Innovation is a process which involves introducing new innovative solutions or refining existing ones by adapting them to new areas of human activity. If it is to succeed, it is vital to have a full knowledge of the factors that encourage innovation. It should be remembered that the results of innovation are usually cheaper, more effective or more environmentally-friendly goods or manufacturing techniques and better organised, higher quality and cheaper services. The influence of these activities may vary, yet they create the conditions to help ensure a greater probability of successful innovation. The essential factors that will encourage innovation are: (a) a properly functioning market in goods and services, (b) high levels of education at all levels, (c) advanced scientific research - both basic and applied, (d) regulation of Member States' activities. In the case of the EU the following also apply: (e) effect of synergies resulting from enlargement, (f) new patenting and licensing strategy, (g) development of the European research area - Seventh Framework Programme, (h) setting up of the European Institute of Technology, (i) EU legislation laying down rules governing the environment (e.g. the REACH directive, the directive on waste and the provisions governing the power industry).

4. Pro-innovation measures in detail

A. Single market

The process of developing the EU single market is currently under way. A properly functioning market, taking account of all four freedoms, is the best guarantee of success for innovation activities. At present the market provides for:

• free movement of goods;
• free movement of capital (financial services market);
• the market in commercial services is being developed, but administrative barriers need to be overcome before it can be fully liberalised (services directive);
• restrictions on the free movement of workers are gradually being lifted.

B. Education

Education systems in all EU Member States are being standardised under the Bologna Strategy (e.g. introduction of a single, three-level, higher education system). The EU has recorded one of the highest increases in the world in the number of higher education graduates per 1000 inhabitants. Unfortunately, the subjects studied by graduates are not in line with the most pressing technological needs. There is a preponderance of business studies graduates from humanities or management faculties, whereas the need is for new directions in interdisciplinary education, to produce graduates better equipped than at present to adapt to the swiftly changing requirements of the labour market. There is also a need for education to encourage innovation and for lifelong learning, regardless of age.

C. Research

Fundamental to the development of innovation is expenditure on research and development under the framework programmes, together with the programme being developed in cooperation with the European Investment Bank (EIB) known as the growth initiative. The intention is that by 2010 expenditure on research in the EU will increase to 2.6% of GDP, two thirds of which will come from the private sector. Exchange of ideas could be improved through greater mobility for researchers within the Community, and through the introduction of standard rules on researchers’ employment, pay and social security. It is important to recruit experts from third countries. The criteria for assessing the abilities of young researchers determining whether they should move up the ranks of a research career, particularly in the applied sciences, should take into account not only the number of publications and citations, but also activities in the field of patents and new development. Selected important technological design problems of strategic significance to be resolved during a full research cycle should be entrusted to a number of competing research teams. For example, this might involve the development of a new and unconventional concept of road or other transport modes or other unconventional solutions pertaining to working methods and lifestyles in ageing European societies. It might also involve ways of spending free time.

D. Regulatory activity

The European Union, the Member States and the regions need to stimulate innovation by means of:

• use of tax incentives (tax law is under national control), for example, a proportion of depreciation allowances for economic agents could be used to set up an innovation fund;
• competitive tendering for the preparation and realisation of major projects, e.g. investments in the environment, defence and other areas;
• creation of science and technology parks with Union resources (Cohesion Fund);
• use of public-private partnerships;
• credit guarantees to support innovative business plans to help develop spin-offs;
• EU regulations, e.g. the REACH regulation, which, thanks not least to the ‘substitution principle’, may prompt large-scale innovation.

E. Exploiting synergies

The phenomenon of positive synergy derives in this case from effects of scale, where an increase in the market for goods or services means that goods can be produced in series on a larger scale and therefore more cheaply. Synergy will have even more positive effects on innovation if uniform common rules and quality standards are introduced. One way of taking advantage of enlargement would be to make better use of existing potential in the form of the many highly trained researchers, designers and other specialists, who have lost their jobs as a result of closures or cutbacks in research institutes and design bureaux in the new EU Member States of Central and Eastern Europe. Company takeovers by Western producers under privatisation arrangements have often ended in the closure of research and development support facilities, as the new partners usually possessed such facilities already.

F. Patents

A new European strategy on patents is needed that will safeguard copyright but will not monopolise knowledge in the field of innovation or the scope for small and medium-sized enterprises in particular to make use of it. This strategy must review the existing patentability criteria established by the European Patents Convention of 1973 with a view to making them more precise and perhaps providing more details, thus leaving no scope for different legal interpretations, as happens at present in connection with the introduction and use of concepts such as the ‘technical contribution’, which are not defined in the Convention. The patent process itself needs to be simplified and speeded up. Perhaps it could be a two-stage process, whereby the expensive development work needed for obtaining a patent could take place once the proposed invention had found a sponsor, or if its originality was in doubt. The first phase of the patent process would be confined to registration of the idea, guaranteeing its author precedence, and to making his blueprint available for public inspection by those interested in its practical application.

5. Innovation forecasting

Among the different methods of forecasting innovation and technological progress, particular emphasis should be placed on extrapolation, exploitation of probability theory and mathematical statistics, and the Delphic method among others. The most promising areas for innovation are the points where traditional knowledge sectors overlap. On the one hand, then, an interdisciplinary approach is needed, but accompanied at the same time by systems analysis. The greatest potential for innovation lies in knowledge sectors involving: ICT (information and communications technology) and medicine, ICT and energy, ICT and business, ICT and logistics, environment and energy, environment and chemicals (REACH), environment and land planning, new materials and energy, new materials and medicine, etc.

6. Summary

As we have seen, innovation depends on the one hand on purely market mechanisms and, on the other, on central regulation, concerning particularly the funding or co-funding of projects from budget resources.

The theory of probability tells us that EU success in the field of innovation, measured in terms of the number of economic agents who have introduced innovations, for example over the last three years, as a percentage of the overall number of agents in the target population, is likely to depend on the implementation of all possible measures capable of stimulating this phenomenon.

Amendments

See analysis here.

Vote

The vote has happened on the 12th April 2007.

Sources

here and the 134 amendments.