Innovation union

EUROPEAN COMMISSION

Brussels, 6.10.2010 COM(2010) 546 final

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Europe 2020 Flagship Initiative Innovation Union SEC(2010) 1161

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Executive Summary At a time of public budget constraints, major demographic changes and increasingglobal competition, Europe's competitiveness, our capacity to create millions of new jobs to replace those lost in the crisis and, overall, our future standard of living depends on our ability to drive innovation in products, services, business and social processes and models. This is why innovation has been placed at the heart of the Europe 2020 strategy. Innovation is also our best means ofsuccessfully tackling major societal challenges, such as climate change, energy and resource scarcity, health and ageing, which are becoming more urgent by the day. Europe has no shortage of potential. We have world leading researchers, entrepreneurs and companies and unique strengths in our values, traditions, creativity and diversity. We have made great strides in creating the largest home market inthe world. European enterprises and civil society are actively engaged in emerging and developing economies around the world. Many world-changing innovations can be traced back to Europe. But we can – and must do – much better. In a rapidly changing global economy, we must build on our strengths and decisively tackle our weaknesses: – Under-investment in our knowledge foundation. Other countries,like the US and Japan, are out-investing us, and China is rapidly catching up. – Unsatisfactory framework conditions, ranging from poor access to finance, high costs of IPR to slow standardisation and ineffective use of public procurement. This is a serious handicap when companies can choose to invest and conduct research in many other parts of the world. – Too much fragmentation and costlyduplication. We must spend our resources more efficiently and achieve critical mass. Perhaps the biggest challenge for the EU and its Member States is to adopt a much more strategic approach to innovation. An approach whereby innovation is the overarching policy objective, where we take a medium- to longer-term perspective, where all policy instruments, measures and funding are designed to contribute toinnovation, where EU and national/regional policies are closely aligned and mutually reinforcing, and last but not least, where the highest political level sets a strategic agenda, regularly monitors progress and tackles delays. Innovation Union sets out such a bold, integrated and strategic approach, exploiting and leveraging our strengths in new and productive ways – and thereby maintain theeconomic foundation that supports our quality of life and our social model as our population ages. Business-as-usual equals gradually losing our competitive advantages, and accepting Europe's steady decline. Concretely, to achieve Innovation Union, the following is needed: 1. In times of fiscal constraints, the EU and Member States need to continue to invest in education, R&D, innovation and ICTs.Such investments should where possible not only be protected from budget cuts, but should be stepped up.

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This should go hand in hand with reforms to get more value for money and tackle fragmentation. EU and national research & innovation systems need to be better linked up with each other and their performance improved. Our education systems at all levels need to bemodernised. Excellence must even more become the guiding principle. We need more world-class universities, raise skill levels and attract top talent from abroad. Researchers and innovators must be able to work and cooperate across the EU as easily as within national borders. The European Research Area must be completed within four years – putting in place the frameworks for a truly free movement of...