BECOMING A SCIENCE AND TECHNOLOGY POWERHOUSE AND FOSTERING INNOVATION

New technology and innovation have the potential to reshape all areas of everyday life by 2030.

Breakthroughs in basic and applied science in areas such as nanotechnology, biotechnology, synthetic biology/chemistry advanced materials, robotics, automated manufacturing, high-performance computing (HPC)/supercomputing and information systems will all disrupt and help reshape today’s markets and sectors. Future prosperity in the EU will depend on its ability to harness these trends and to become a future technology powerhouse. Investing in technology is important not only to generate higher-value economic growth, but also to help Europe overcome the challenge of a shrinking and ageing workforce. In the period 2014–19 the EU can lay the foundation for its future competitiveness in global innovation through increased international cooperation and building an effective risk-management approach to new technology.

While advances are often measured in terms of hardware and software, these key technologies only emerge and thrive as part of an innovation ecosystem that stretches from the laboratory to their widespread application. Harnessing technology will depend as much on investment in underlying market regulation, business models and enabling infrastructure as on the physical technology itself. As more and more countries look to move up the value chain, it is critical that Europe invests in the education, capacity and systems that will enhance its competitiveness in an interconnected world. It is also critical that competition between the EU and other major economies does not act as a barrier to trade and investment, which would undermine the economic incentives for continued investment in innovation.

Becoming a technology powerhouse could help the EU address the challenge of competitiveness.

Future prosperity will require directing investment flows to create high-value-added goods and services in a world of disruptive technological change. The potential for horizon technologies to reshape the economic and social landscape has significant implications for EU innovation policy, market regulation and education. Support for R&D and demonstration will be essential if EU companies are to retain a comparative advantage in new technologies.

Enhanced international cooperation – both for specific technologies and to develop open standards and platforms that EU companies can access – will be critical. In particular, this will require building meaningful bilateral partnerships with other key countries such as China and the US. The decline of individual member states’ levels of innovation implies that enhanced

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coordination will be increasingly important. Education policy will also be critical to support people moving into high-tech jobs.

The EU should continue to build on Horizon 2020 and other approaches to foster increased international cooperation through “science diplomacy” – as science, engineering and technology could be useful tools in foreign policy. Former US Secretary of State Hillary Clinton stated in 2009: “Science diplomacy and science and technology cooperation is one of our most effective ways of influencing and assisting other nations and creating real bridges between the United States and counterparts.” Science diplomacy can facilitate international science cooperation, enhance foreign policy objectives, and improve international relations. As innovation capacity is diffused around the world, enhanced collaboration not only in technological development but also in strengthening global norms and standards will be essential for EU companies to remain competitive. To bolster innovation in high-value manufacturing and services and to achieve sufficient scale and scope, European investment in R&D will need to rise towards the 3% of GDP envisaged by the Europe 2020 strategy.

While there is pressure to keep up with the US–Chinese race in supercomputers, the EU may do better by fostering the best laboratories and researchers and buying the supercomputers – or supercomputing time – from elsewhere. Following the multinational model that established the International Space Station, the EU could also establish supercomputing partnerships with combinations of China, the US, Brazil and India. This could give the EU a major advantage over attempts to progress in these areas in individual countries where such collaboration would be very sensitive.

A risk-management strategy could also help drive forward the EU’s position as a technology powerhouse. Such a strategy would include early action to assess the risks and benefits of rapidly evolving and new technologies (such as 3D printers, autonomous vehicles) to ensure effective regulation can be put in place; engagement with trading partners and manufacturing countries to ensure that emerging global standards will reflect best practice;

and investment in resilience, given the threats and challenges that new technologies often pose. The strategy could also support enhanced action on data security and make transparent the trade-offs between availability, confidentiality and integrity of data. The EU could also strengthen cooperation on innovation areas with weak governance regimes such as space technology and geo-engineering. Innovations in these areas can be controversial, with transboundary implications that may result in tensions – especially if governments adopted these technologies unilaterally.

Strengthened rules-based governance systems, including those related to the effective use of intellectual property rights, could also help incentivise continued innovation while limiting detrimental activities such as patent thickets (where a dense web of overlapping intellectual

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property rights is central to the delivery of a system or service, as in mobile phones) that will impede new entrants and slow the diffusion of critical technologies.

The EU could also promote regulation to enable new market entrants to compete and introduce disruptive technological change. Incumbent businesses often favour incremental innovation approaches which guarantee continued market share. More open systems of competition can yield tremendous growth benefits by allowing new ideas and models to overtake out-dated concepts.

New coalitions and public–private partnerships are essential to drive innovation in key technology sectors as well as investment in R&D and infrastructure support. This is particularly important where technology systems need to be developed – for example around the smart grid and electric vehicles. With its relatively open societies, broad and deep skills base and high Internet penetration rates, the EU is also in a strong position to leverage the work of new actors and platforms in the innovation space. Informal groups of individuals, often blended with traditional in-house research departments at corporations or universities, are increasingly integral to the innovation process – from problem identification and product design to development and commercialisation. They participate, for example, through a combination of crowdsourcing, crowd-funding and citizen science.

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