Brussels, 12 Sep 2006

In June 2005, the European Commission launched the i2010 strategy for modernising and deploying all appropriate policy tools to stimulate the development of the digital economy: legal instruments, research and partnerships with industry. The three pillars of the i2010 initiative are (i) A Single European Information Space (ii) Innovation and investment research and (iii) Inclusion, better public services and quality of life.

One year on, this is the second in a series of industry white papers contributing to the three pillars of i2010. EICTA, the representative organisation of the European digital technology industry, has brought together leading technical, regulatory and public policy experts in order to provide substantive input to the second pillar with regard to innovation and investment in ICT research and development.

Innovation and investment in R&D is crucial to the continuing development of our sector. ICT research in Europe represents 18% of the total research effort, against more than 30% for all its major competitors. Previous public and private R&D investment in the EU has enabled Europe to build world-leading positions in crucial industry segments such as mobile communications; broadband telecommunications networks; enterprise software and services; high-definition digital television. It has also enabled Europe embark upon improving essential public services such as health and education through the deployment of cost-effective digital technologies.

Now is decision time for the future of European innovation, to ensure that ICT can fuel economic growth and prosperity in Europe as it has in other parts of the world, and to boost the competitiveness of the European ICT industry. Recent research shows that Europe's prosperity will not last if we fail to address our underinvestment in human capital. The Seventh EU Research Framework Programme (FP7) will set the tone, and provide certain financial impetus for the next seven years of research. However, Europe needs to take urgent remedial action to considerably increase public spending on the European knowledge economy, and create the conditions for increased private investment.

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The recent Aho report highlighted the very European paradox that "¡­there is a large gap between the rhetoric of a political system that preaches the knowledge society and the reality of budgetary and other priorities that have shown little shift in preparing to engage with it". EICTA echoes the Aho report's proposal that the European institutions and especially the Member States should focus on public procurement and the role of leading-edge markets to make Europe more competitive. As this document shows, European industry is willing to play its role alongside the decision-makers in Brussels and in the national capitals, to generate the conditions for building the European knowledge economy.

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