Sometimes it takes traveling abroad to remind me of the many good qualities of the U.S, including a wide variety of restaurants, fixed shower heads, and ESPN. But seriously, there is one feature of the U.S. that is the envy of the world – innovativeness.
I’m here at the Economic Forum in Krynica, Poland and it’s very obvious that Europeans see red, white and blue when they think of innovation. And that’s because when it comes to innovation, the world is not flat in the Thomas Friedman sense. There are geographic spikes of innovation – and world leaders all want to erect a Silicon Valley in their nation. As Steve DelBianco and I have written about in our paper on innovation, in today’s global economy, innovation is a key component to economic growth and societal prosperity.
But how does innovation work, and why do some nations like the U.S. and Japan excel at creating innovative products and services? That was the topic of ACT’s first panel (out of four) here at the Krynica economic forum, “Localizing the Lisbon Strategy – How to Cultivate Innovation Ecosystems.” The Lisbon Strategy is the European Union’s innovation strategy to increase European jobs and economic growth.
Olaf Gersemann (Editor at Financial Times Deutschland and author of Cowboy Capitalism: European Myths, American Reality) moderated the panel. He painted a bleak portrait of European competitiveness. Purchasing power parity, unemployment, productivity growth, R&D investment are all below U.S. levels.
Waldemar Ingdahl (President of a Swedish think tank) echoed Olaf’s pessimism, and said that the EU would need an 8% growth rate over 20+ years to catch up to the U.S. He also mentioned that the EU could do a better job of educating small and medium enterprises (SMEs) about intellectual property and bemoaned the European Commission’s competition policy, which he described as focusing too much on competitor welfare at the expense of consumers.
Maria Helena Guimaraes (a Professor at the University of Minho, Portugal) talked about a new study of hers that analyzes trade within the EU. National regulations are impeding trade and innovation, particularly when it comes to automotive, pharmaceutical and food products. It appears that countries want to protect their companies from outside competitors, which hurts the EU‘s goal for one common market.
Arno Tausch (a Professor of Political Science at the University of Innsbruck) spoke about a paper he just finished called “Destructive Creation: Some long-term Schumpeterian reflections on the Lisbon process.” He analyzed the Lisbon Agenda’s fourteen structural indicators of innovation, such as GDP, R&D spending, employment, greenhouse gas emissions, and highlighted the importance of foreign direct investment.
Our last speaker was Janusz Lewandowski (a member of the European Parliament from Poland and an economist). He lamented that the old way of European thought still dominates. Until high levels of government spending and top-down mandates are reduced, the EU will never recreate the dynamism required for an innovative economy. He also chided the creation of the European Institute of Technology – an EIT to compete with the U.S.’s MIT – as a false fix to fundamental problems. According to Lewandowski, cultural changes are needed within the broader economic ecosystem.
The most positive comment from the audience came from Christian Weinberger, head of the European Commission’s entrepreneurship unit. Europeans are making progress, he said. It used to take 45 days to start a business in Spain – now it takes 45 minutes. Schools are teaching classes on how to be an entrepreneur. Things are changing for the better (too slowly for some), so give the Lisbon Strategy some time.
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.