June 30, 2009
To achieve EU Science and Research Commissioner Janez Potocnik’s goal of turning research into market products, we should go back to the fundamental questions of what innovation means.
Innovation, unlike basic research, is an organic phenomenon. It is reactive to demand far more often than it is predictive of it, but in either case, success depends on meeting the needs of the market. That is simply not the case for basic research.
Europe has always been great at research but typically weaker at innovation. Why? One oft-cited reason is that research is a better fit for the European model of investment and subsidy, whereas innovation is far more dependent on marketplace dynamics. Whether responding to a market or creating one, the common characteristic in successful innovation is meeting the needs of the marketplace.
How can Europe succeed at innovation? Ensure that innovative firms have unfettered access to markets at home and abroad. Ensure innovative firms have access to risk capital to build, refine and promote their products. Ensure the minimum of regulatory barriers to the development, promotion and sales of innovative products. Ensure that investments in building innovation and intellectual capital can be protected by innovative firms.
So while a fragmented, over-regulated, over-taxed, over-complicated, and over-politicised Europe has not held back basic research, it’s lethal to innovation. Our challenge in Europe is to look at innovation in nearly the opposite way we have looked at basic research. Rather than focusing on grants and aid programmes, governments could do the most good by clearing the fields of regulatory hurdles, and letting innovators and entrepreneurs refocus on their businesses.