Prime Minister: Europe must learn to use its potential for innovation

A speech by EU Council Chairman and Czech Prime Minister Mirek Topolánek at the opening of the Conference for Research (INCOM), where the topic was innovation, research and development. Esteemed ladies and gentlemen, members of the government, Mr. Paduan, Mr. Drull, dear guests. When you say Europe, one of the first words that comes to my mind – immediately after the word 'freedom' is the word 'innovation.' The ability to discover, invent, come up with new, more effective and cheaper production approaches, that's Europe. For a thousand years that ability has been the main comparative advantage of the continent, which was never abundant in size, rich in material resources or a cheap workforce. Therefore it is no accident that at a time of crisis, Europe is returning to something that has always helped it to success, something that turned a weak continent into a leading world power. Support for innovation is also one of the pillars of the Lisbon Strategy - and allow me to note that this is also my personal priority as prime minister. So it is an even greater honour for me to open this seminar with the Czech presidency's first important contribution to the European Year of Creativity and Innovation. I would like to point out, however, that we would have held this seminar even without the current crisis. It can only speed up our plans and strengthen our will to follow it through to the end. But even without it, it has long been clear that Europe must increase its innovation performance, so that it can stand its ground against global competition. If this crisis leads to the EU not paying so much attention to pettiness and pseudo-problems, and makes us concentrate on what is truly important, then it only confirms the Czech saying that everything bad is good for something. Most of you are experts, and the burden of finding specific solutions and specific approaches to increasing innovation performance lies with you. As the Czech prime minister and the chairman of the EU Council, I limit myself to the formulation of political terms; their fulfilment is necessary to achieving success. The most basic requirement is that Europe as a whole must learn to use its innovation potential. There are marked differences between individual Member States. Not only economic, but especially in innovation performance, in the effectiveness of research and the application of scientific knowledge into practice. If we want the entire continent to increase its global competitiveness, we must fundamentally raise the level of the new Member States. There is massive latent talent in the new countries. Until now, we have mainly oriented ourselves toward rapid increases in the volume and quality of industrial production. For the most part, assembly plants have flowed from the western part of the continent, and there has been less scientific information and research know-how. That is why this seminar, which is under my auspices, will concern itself with the topic of increasing the innovation potential in underdeveloped countries, especially in the new ones. The relatively rapid economic growth recorded in past years by the new Member States cannot be maintained only through the transfer of well-known technologies. For example, in the Czech Republic, it is already clear that this extensive growth is hitting its limits. The global crisis has emphasized the decline in growth and has sped up our considerations, but the primary causes lie elsewhere. We mostly have to import the labour force for assembly plants, while at the same time this type of production is being shifted onward to Asia and the Pacific. At the same time, we are feeling a lack of our own qualified workers, which is alarming for a nation that likes to brag about our "golden Czech hands." What's more, in this crisis we are paying for our dependence on the monoculture of the automobile industry. We lack greater diversification and the ability to react flexibly to shocks. It is clear that the slogan "sustainable growth through innovation" is not just ideological nothingness, but a living feeling of necessity. Only through innovation will we be able to react in the future to changing global demand, seek out new markets, come out with products that we can apply not only in good times but in bad as well - despite the disadvantage of a more expensive labour force. For this reason I have taken support for innovation as one of my priorities as prime minister, and have given it the highest political priority. The Czech government has prepared and is implementing fundamental reforms in the area of research, innovation and tertiary education. We want to support personal initiative and excellence. To give young scientists more room. To remove discrimination and give everyone an equal opportunity both to education and to research grants. And last but not least, to motivate research facilities and companies toward cooperation. It is clear that what is an existential Czech national interest is also an interest for all of Europe. The same principles that I am asserting as the Czech prime minister, I intend to push for as the chairman of the EU Council as well. The basic approaches have been set by the aforementioned Lisbon Strategy. Unfortunately, they still mostly remain on paper; agreement on a number of key issues is still being held up. This must be changed. The motto of the Czech presidency is "Europe Without Barriers." Where else should these words be more valid than in the area of research and development? Since our entry into the EU, we have fought for the full exercise of the EU's basic principles of freedom and the removal of discrimination between the old and new countries. The free movement of people, goods, labour forces and services should enable everyone to equally make use of the advantages of the common market, and enable equal access to the riches of today. But we also need a fifth freedom: The free movement of knowledge. That will enable us to jointly increase and make use of the riches of today. There has been a lot of talk about this fifth freedom, but the reality is different. Not one of the major research infrastructures that goes beyond importance to one state is located in a new country! We also need to continue with the building of the common European Research Era. An evaluation of results for joint European research does not exist, while the responsibility to carry it out is anchored in the founding agreement of the European Community. And finally there is a that bothers us greatly, and that is support for the careers of young scientific workers. We want to concentrate on these four problems during our presidency. As I said at the beginning, there is massive latent potential in the new Member States. For this reason I have requested experts to prepare various aspects of new Member States' innovation potential in such a way as to formulate a corresponding policy on the European level. How can we achieve the transformation of new economies to production with higher added value? How can we manage a transition to a knowledge economy? How can we replace, assembly plants with "brainpower plants?" We ask these questions often. But we do not have the answers, and it is difficult to find them. On one hand, the EU includes states that are among the most developed economies in the world, and on the other hand countries that are just getting rid of their communist heritage. Unfortunately, European policies for support to science, research and innovation doesn’t count on the new countries very much. They were set before the major expansion of 2004. Including the Lisbon Agenda from 2000. While that has been revised, it is still without an adequate consideration of the new members' needs. As a result, the models that have been proven in developed countries – with their traditions of innovative management and years of putting principles of shared financing into effect – don't work in the new countries. Of all the aspects of these issues, I will mention two that are very telling. The first is companies' ability to be an engine for innovation. This ability depends not only on quality management, but also on the possibilities offered by policies and on the strength of the competitive environment, In the Czech Republic today, there are few companies that can afford research that is theirs alone. And this is without mentioning support to university research. For the vast majority of others, it pays to simply buy patents and inventions from countries with higher innovation performance. With those, it's like burning with a laser: First there is a certain level of concentration of knowledge, and through research it starts to pay, and many times over. The money we put into research and development to a large part disappears into a black hole and does not bring practical results. We need reforms, both on a national and European level, that will enable us to effectively utilise the resources put in, concentrate it on promising areas and support cooperation between the scientific and corporate spheres. The creation of clusters is also promising for the new Member States; these connect strong research capacity and companies applying their knowledge. Only after these conditions are met will my favorite motto take effect: Science turns money into knowledge, and innovation turns knowledge into money. The second major problem for new Member States is the brain drain. Not just for reasons of financial compensation, but also due to better opportunities to put their qualifications to use. For this reason we need to support the creation of facilities that will enable talented young people to be put to use in their countries. For this reason we need to level out the differences in the placement of the European research infrastructure, speed up the building of a common European research space, implement the evaluation of national impacts of the coordination of European research and remove barriers to the career paths of young scientists. Again I would like to remind you of the four priorities in our presidency in the area of research and development. I believe that the theme of INCOM is fundamental and important for the entire EU. A levelling out of the differences between old and new countries is a test of European solidarity. But above all, it is a necessary requirement for our common success. At the same time, from the standpoint of the future, levelling out the differences in innovation performance is far more important than is the much-discussed issue of levelling out agricultural subsidies. In the areas of science, research and development, this is not a zero-sum game. This is not something where one gains something and the other must lose something. We will all gain from an increase in our innovation potential. I expect lively expert discussion with political implications formulated at its conclusion. We can hardly resolve these difficult tasks in two days, but we can certainly try to identify the problems more precisely, point to aspects that have been missed thus far, break down certain stereotypes and open new horizons. A deep and unexaggerated view of the situation in the new Member States will enable their citizens to take EU initiatives as their own and not understand them as decisions from "those in Brussels." INCOM should contribute its share toward the role of new Member States in building Europe being better examined, and that financial and human resources being used more effectively. In conclusion, I would like to propose that as one of the recommendations, you consider founding a Prague Innovation Forum as a permanent advisory group to the European Commission. It could join analytic and political expertise reflecting the unique situations of countries in transition to economies based on knowledge. I am prepared to provide this project with the corresponding political support and to call on commissioners Verheugen, Potočnik and Figel to join me in this effort. We cannot allow ourselves to continue to run in place. Innovation has brought Europe world leadership in the past, and is the guide to overcoming the problems of today and a key to the future. We Europeans do not have it in our genes to be satisfied with being average. The words of American manager Jack Welch hold true for us as well: "We will only do the things we are first or second in the world in." For the Czech Republic, I would add: "Or we will cooperate with such countries." I wish you success in your meetings! The INCOM conference is one of the events organized as part of the Czech presidency of the EU. Its goal is to emphasise the importance of certain political topics, and to try to bring new ideas into the highest levels of political decision-making in the EU, ideas that come mainly from the experience of new Member States. The conference will focus on the problems of innovation policy, but of course in the wider context of technology, innovation and a system of development.