Brussels, 14 Mar 2003

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE EUROPEAN PARLIAMENT, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS
Innovation policy: updating the Union's approach in the context of the Lisbon strategy

EXECUTIVE SUMMARY

Innovation is a cornerstone of the "Lisbon strategy" launched by the European Council in March 2000, and emphasised by subsequent European Councils, in particular at Barcelona in 2002.

The present Communication on innovation policy, together with the Communication on industrial policy in an enlarged Europe and the Green Paper on entrepreneurship, form a coherent framework for the development of an enterprise policy that fosters competitiveness of companies and contributes to the growth of Europe's economy.

It also constitutes a timely contribution to the Spring European Council to be held on 20-21 March 2003.

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While recognising that research is a major contributor to innovation, and the importance of the recent Communication "More research for Europe, towards 3% of GDP", the Communication highlights that there are many other forms of innovation.

Innovation can be incremental or radical, it can result from technology transfer or through the development of new business concepts, it can be technological, organisational or presentational.

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The object of the Communication is firstly to describe the diverse routes to innovation and analyse the consequences for the design of innovation policy and for the different means by which innovation policy is put into action, so that they are not hampered by a view of innovation which is too restrictive.

This analysis is complemented by examination of the current challenges that are, to different degrees, specific to the EU, recognising that structures, problems and opportunities relating to innovation are not necessarily the same in all the world's major economic areas. Factors considered include the persistently inadequate performance of the Union, the implications of enlargement, demographic trends, and the large size of the public sector in EU economies.

While innovation policy takes place mostly at the national and regional levels, the Member States and the Commission need to intensify their cooperation for the strengthening of innovation in the EU, including coordination and assessment mechanisms for mutual learning, as well as for taking stock of progress achieved. The Communication makes concrete proposals on how to turn European diversity into a strength.

The Communication also suggests several new directions for EU innovation policy development and, in particular, interaction with other policy areas. Innovation policy must often be implemented via other policies, and the Communication suggests, inter alia, better coordination and a pro-active follow-up by the Commission and Member States.

The conclusion provides a summary of the main measures proposed to be executed by the Member States, the Commission and in cooperation between both.

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7. CONCLUSIONS

The productivity gap between the Union and major economic areas such as the United States may not at present have effects that are generally visible in terms of quality of life. This does not mean that we can afford to postpone addressing this growing challenge, which ultimately reflects a weakness in Europe's capacity for innovation.

In the long term, European prosperity is at risk if the productivity gap continues to increase. Lagging our major competitors in this respect could reduce the capacity to offer the benefits required by the European social model. A successful innovation policy could help to reduce the gap and contribute to increased national wealth. The resistance to change already cited as an obstacle to innovation must be considered in this light. If innovation activity weakens and falls behind, then changes could be forced, in a less controllable fashion, through lack of resources.

There are trade-offs to be made between the preservation of existing structures and practices, and the penalties of a weak innovation performance. Europe must find its own way to balance conflicting interests and priorities.

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The Member States and the Commission should define a common framework, and a set of priorities and objectives, for both European and national innovation policy, respecting the characteristics of national innovation systems and the diversity within the European Union. They should build on the acquis communautaire (the Internal Market, the euro, etc) and take account of enlargement of the Union.

The Commission therefore invites the Council to alert Member States to the continuing importance of the innovation issue and the potential contribution of a better understanding of the innovation process in the European context to the performance of all Member States.

7.1. Summary of actions arising out of the Communication

Member States should commit themselves to:

­ build and strengthen their national innovation strategies, define their own sets of policy objectives, set their own targets and have their own sets of indicators compatible with European and international statistics,

­ cooperate with the Commission by making information available on innovation policies and performance, produce further data and indicators and stimulate national statistical offices in their efforts in collecting and providing comparable statistical data in the area of innovation,

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­ participate actively in the mutual learning process initiated by the Trend Chart on Innovation in Europe and in analysis of the innovation phenomenon.

The Commission will:

­ increase the coherence of the various policy benchmarking exercises falling under the competence of the Competitiveness Council (European innovation scoreboard, enterprise scoreboard, science and technology key figures),

­ build an improved framework for the mutual learning process in innovation policy on the basis of the present Trend Chart on Innovation in Europe,

­ cooperate with Member States in analysis of the innovation process, policies and performances,

­ launch a pilot initiative offering independent evaluations (on a voluntary basis) of programmes, schemes and support agencies for the promotion of innovation,

­ establish a platform for exchange of information and experience focused on Candidate Countries, to support them in rapidly developing their framework for innovation, and extend the European innovation scoreboard to give the same coverage to Candidate Countries as to the current Member States,

­ report, every two years, on progress in strengthening innovation policy at national and EU level,

­ contribute to promoting innovation in the public sector by:

­ organising exchanges of experience on the promotion and dissemination of information on innovation in government and public services,

­ promoting training and awareness activities on policies and factors shaping the innovation performance of firms,

­ setting up a web-site to disseminate initiatives and tutorials,

­ promoting dissemination of good practices emanating from the public procurement authorities.

Member States and the Commission must:

­ ensure that mechanisms are in place for "vertical" coordination, so that policies in support of innovation interlock at EU, national and regional levels,

­ strengthen existing processes, in the framework of the Trend Chart on Innovation in Europe, enabling Member States to learn from each other's experience in innovation policy development and implementation,

­ intensify their cooperation and create a common framework for the strengthening of innovation in the EU, including assessment mechanisms taking stock of the progress achieved.

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ANNEX 1 INNOBAROMETER 2002

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Brussels, 11.3.2003 COM(2003) 112 final