The European Union’s ‘Innovation Chain’ is Broken

In launching its new innovation strategy, the EU has high hopes for helping European industry take back its technology edge and lay the foundations it will need to keep its economy competitive in the face of growing challenges from the Far East.

But even Martin Schuurmans, chairman of the newly-formed European Institute of Innovation and Technology (EIT), admits it will be a tall order.

"Many of our competitors – China and the United Sates – are moving more quickly than we are," he warns. "I am not pessimistic but we need to speed up, speed up, speed up."

The truth is, the EU’s integrated ‘innovation chain’ has never been complete and therefore will never work. What is currently missing is its vital link of ‘independent’ invention and ideas - the prerequisite of economic dynamism in the 21st Century.

There are of course other problems: For one thing the budget is too small– just €309 million until 2013 – which means the EIT will, at best, be just one of the many tools that Europe will need to respond to the innovation challenge.

But even more serious is what you might call a vision gap: Unfortunately, EU politicians and their commissioners do not read or understand what the history of science and technology tells them. If they did, they would understand that over 75% of all the ‘fundamental thinking’ that underpinned the inventions that have made the modern world did not emanate from our university laboratories or advanced corporate R&D centres, but from the minds of ‘independent’ inventors and innovators.

For example, the late Jack Kilby invented the Integrated Circuit (IC) in his own spare time and was not asked by Texas Instruments or his university to invent it. He did so out of sheer interest and basically it became his private hobby. This single invention is now, according to Texas Instruments, underpinning a global annual industry worth trillions of dollars.

Without it, this global industry just simply would not exist – the IC is one of the greatest wealth creator ever invented and enjoys the equivalent in annual economic turnover to that of India, Russia or Canada.

Wouldn’t it be great if the EU were to come up with several equivalents to the IC, transforming Europe’s economic fortunes overnight? But this will never happen as long as the EU’s ‘independent’ inventors are not considered part of the EU’s innovation and economic strategy.

If EU leaders understood this, they would firstly set up a network in which these very special people within an European innovation chain would come first, perhaps before all others. For we have to have the fundamental thinking first and not our universities or corporate R&D centres, as we have today. Overall if we created the innovative infrastructure for these people to flourish, the EU’s innovation chain could be completed.

This is truly the missing link in the EU’s thinking and until our policymakers understand this deficit, Europe will continue to stagnate in economic terms against the backdrop of the continual emerging creative might of South-East Asia. For in another 25 years, the EU will be the poor man of the world unless it grasps now the crucial importance of our independent innovators and puts in place the mechanism that they need to release their unique thinking.

So far we have been basically fooling ourselves with the present mindsets set against the backdrop of the emerging technological powerhouse of SE Asia. Our organization has been monitoring China in particular for 15 years now and the future does not bode well for the citizens of the EU.

Major innovation change takes at least 2-3 decades to materialize. Once China et al have taken the high ground, which they are doing by the year 2030, there will come a point in time when the EU’s economic development strategy will be impotent, totally decimated by the sheer economic might of China and SE Asia.

As one businessman from that region stated five years ago in the press, "you have your billionaires in the West, we shall have the first Trillionaire in the East."

We have a great threat on our doorstep but no one within the EU sees it for what it really is – ‘eventual’ economic subservience.

That is why innovation is so vital to the EU and getting its innovation strategy so right. Time is simply running out for us and where we need at least 30-years to bring an economic counter-offensive into being.

Dr. David Hill is the Executive Director of the World Innovation Foundation Charity in Bern, Switzerland.

European Institute of Innovation & Technology