Prime Minister M. Topolánek's address at the opening of the "ICOM" conference

Ladies and gentlemen, members of the government, Mr. Paduan, Mr. Drull, distinguished guests!

When hearing the word “Europe”, one of the first words that come across my mind – immediately after “freedom” – is “innovation”. The ability to discover, invent, introduce new, more efficient and less expensive production methods, this is Europe. This ability has been for a thousand years the principal comparative advantage of the continent which otherwise does not abound in material resources, cheap labour or size.

Therefore, it is not by accident that, at times of crises, Europe invariably focuses on what has always helped it succeed, what has made the weak continent a leading world power. The support of innovations is also one of the pillars of the Lisbon strategy – and let me add it is also my personal priority as the Prime Minister. Consequently, I am greatly honoured to be able to open this seminar, which is the first major contribution of the Czech presidency to the European Year of Creativity and Innovations.

I would nevertheless like to stress that we would have organized the seminar even without the present crisis. The latter can only accelerate our plans and strengthen our will to successfully implement and complete them. However, it has been obvious for quite some time that Europe must improve its innovative performance to survive in global competition, the present crisis notwithstanding. If the crisis makes If it makes us in the European Union not to dwell so much on petty issues and quasi-problems and rather concentrate on what matters most, it may even confirm an old Czech adage saying that there is something positive in every bad experience.

Most of you are experts, and the burden of looking for specific solutions and specific procedures to improve Europe’s innovative performance lies on your shoulders. In my capacity of the Czech Prime Minister and President of the EU Council, I will just formulate political conditions that must be complied with in order to achieve success.

The most elementary condition is that Europe as a whole must learn to use its innovative potential. There are considerable differences among EU member states. Not just economic ones, but mainly in their innovative performance, efficiency of research and practical applications of scientific knowledge. If we want the entire continent to improve its global competitive ability, we must dramatically increase the innovative level of new members.

A huge and so far unused potential lies dormant in the new EU states. We have hitherto been focusing on a rapid increase of the volume and quality of industrial production. The western part of our continent has so far been sending assembly plants rather than scientific knowledge or research know-how to the east.

This is why the topic of this seminar, which is held under my aegis, is the improvement of the innovative potential in laggard EU member states, particularly in the new ones.

The relatively rapid economic development that the new member states have experienced in recent years can no longer be sustained solely on the basis of transfers of well-known technologies. In the Czech Republic, for example, the extensive growth seems to have reached its limits. The global crisis has underscored the decline of economic growth and accelerated our thoughts, but primary causes lie elsewhere.

We have to import most of the workforce for the assembly plants; at the same time, this type of production will gradually be moved farther to Asia and the Pacific region. We also lack own skilled workers, an alarming fact for the nation so proud of the “golden Czech hands”. Moreover, at the time of crisis, we pay the price for being too dependent on the monoculture of automotive industry. We lack a greater degree of diversification, as well as an ability to react flexibly to shocks.

It is clear that the slogan “sustainable growth through innovations” is not merely an ideological phrase, but rather an acutely felt necessity. It will only be possible due to innovations that we will be able to react to changes of global demand, look for new markets, or introduce products we will be able to sell not just in good times, but also in bad ones, in spite of our more expensive labour that puts us at a disadvantage.

This is the reason why I have made the support of innovation my premiership priority, thus giving it the strongest political backing. The Czech government has prepared and is implementing essential reforms in the field of research, innovations and tertiary education. We intend to support individual initiatives and excellence. We want to give more room to young scientists. We want to eliminate discrimination and thus give equal opportunities in the access to education and research grants to all. And, last but not least, we want to motivate research establishments and companies to cooperate with each other.

It is obvious that the vital Czech national interest is also an all-European interest. In my capacity of the President of the EU Council, I intend to enforce the same principles I have been enforcing as the Czech Prime Minister. In this respect, basic approaches have already been outlined in the abovementioned Lisbon Strategy. Unfortunately, most of them remain on paper only, as there has not yet been an agreement on many key issues. This must be changed.

The buzz phrase of the Czech presidency is “Europe without barriers”. Actually, is there any field besides research and development to which these words should apply more? Since we joined the European Union, we have been fighting for an unlimited exercise of the four essential liberties of the Union and an elimination of discriminatory practices between old and new member states. Free movement of persons, goods, labour and services is expected to give everyone an equal opportunity to make use of benefits of the common market and an equal access to present wealth. However, we need a fifth liberty as well, namely free movement of knowledge. This will allow us to jointly increase and make use of future wealth.

The fifth liberty is much discussed, but the real situation is different. None of the large research establishments the importance of which exceeds national boundaries is located in a new member state! We also need to score some progress in the development of the common European Research Area (ERA). There does not exist any evaluation of results of joint European research projects, although the obligation to conduct such surveys is stipulated in the founding treaty of the European Communities. And finally, there’s an issue we are very concerned about, namely support of careers of young scientists.

These are the four issues we intend to focus on during our presidency. In the opening part of my speech, I said that a huge and so far unused potential lay dormant in the new EU states. This is why I have tasked experts to analyze various aspects of the innovative potential of the new member states, so that we can formulate appropriate policies at the European level.

How to approach the transformation of the new economies to a higher value-added production? How to manage the transition to a knowledge economy? How to replace, so to say, “assembly plants” by “brain plants”? We ask questions ourselves often enough. However, we do not have answers and we are looking for them very laboriously.

On the one hand, the European Union comprises countries ranking among the world’s most advanced economies; on the other hand, there are states that are only now getting rid of their Communist heritage. Unfortunately, European science, research and innovation support policies do not take the new member states into account too much. As a matter of fact, they were set before the great enlargement of the Union in 2004, including the Lisbon Agenda, which dates back to 2000. It is true the latter has been reviewed and amended, but without considering the needs of the new member states adequately enough.

As a result, the models which have worked well in developed countries traditionally well-versed in innovation management and applying principles of shared financing for years do not perform well in the new member states.

I will mention just two of the aspects related to these issues, both very eloquent. The first of them is the ability of companies to be the driving force of innovations.

This ability depends not only on the quality of corporate management, but also on opportunities offered by relevant policies and the strength of the innovative environment. As to the Czech Republic, there are just a few companies that can afford their own research, not to mention supporting research projects at universities. An overwhelming majority of the rest simply buys patents and inventions from countries whose innovative performance is better, as it makes more financial sense. As a matter of fact, the innovative performance is similar to lighting up a laser: research starts paying off (and providing substantial benefits) only at a certain level of concentration of knowledge and assets.

Quite a substantial part of the money we invest into research and development disappears in a black hole, bringing no practical benefits. We need reforms at both national and European levels, which will allow us to use the invested funds effectively, focus on promising areas of research and support cooperation between scientific organizations and companies. A promising way (also for the new member states) is to create clusters combining strong research capacities and companies applying their knowledge in practice. Only if and when these conditions are met, my favourite quotation – Science turns money into knowledge, innovations turn knowledge into money – will hold true.

The other major problem experienced by the new member states is the efflux of brains, which is motivated not only by better remuneration, but also by better opportunities to make use of one’s skills and knowledge. For this reason, we need to support scientific establishments that will allow young talented people to make use of their skills in their own countries. To this end, we need to eliminate differences in the location of elements of European research infrastructure, to speed up the development of the common European Research Area, to introduce a system evaluating national impacts of the coordination of European research, and to eliminate barriers of career advance of young scientists. I am reminding you once again of the four priorities of our presidency in the field of research and development.

I believe the topic of the INCOM seminar is essential and important for the entire European Union. Eliminating the differences between the old and new member states is a test of European solidarity. But it is, above all, a necessary prerequisite of common success. Needless to say, the elimination of innovative performance differences is much more important for the future than the presently much-discussed issue of harmonization of agricultural subsidies. The field of science, research and development is not an accounting exercise the final outcome of which is zero. It does not hold true that if one turns a profit, the other must lose. The increase of the innovative potential is a win-win situation for us all.

I expect a brisk professional discussion with policy implications formulated at the end of the seminar. We can hardly expect to resolve so difficult problems in two days, but we can surely try to identify them more accurately, point out at aspects that have hitherto been overlooked, start thinking outside the box and open new horizons.

An in-depth and undistorted view of the situation in the new member countries will allow their citizens to identify with EU initiatives rather than perceive them as being imposed by “those from Brussels”. INCOM should contribute to a better examination of the role of the new member states in the development of Europe and to a more efficient use of financial and human resources.

By way of conclusion, I would like to suggest a recommendation you may wish to consider, namely the establishment of the Prague Innovation Forum as a permanent advisory group of the European Commission. The forum should combine analytical and political expertise reflecting specifics of the countries in transition toward a knowledge-based economy. I am prepared to provide political support to the project and I will invite Commissioners Verheugen, Potočnik and Figel to join me in these efforts.

We cannot afford to drag our feet any longer. Innovations brought Europe the world leading position in the past, and they are both a recipe for solving present problems and a key for the future. We Europeans are not genetically predisposed to be satisfied with mediocrity. For us, the words of Jack Welch, a world-renowned US manager, hold true as well: “We will only do what we are the best or second best in the world.” On behalf of the Czech Republic I will add: or we will cooperate with those who are the best or second best.

I wish you every success in your deliberations!