Only R&D-based growth will preserve EU lifestyle, report says
BRUSSELS – Europe’s way of life is at risk unless its social structure changes to funnel cash into research and spur growth, former Finnish Prime Minister Esko Aho, head of an EU study group on the topic, said yesterday. Conditions must be created to encourage firms to invest in research inside the European Union before it is too late, as the United States keeps its lead and China catches up rapidly, the group concluded in a report for the European Commission. Presenting a bleak outlook, the report said more firms were investing outside Europe because the EU market lacked a friendly approach towards innovation. There was a dramatic fall in venture capital to 946 million euros ($1.14 billion) raised in 2004 compared with 9.6 billion euros in 2000. «Unfortunately, they can survive without Europe but Europe can’t survive without these companies,» Aho told reporters. The report recommends creating a «pact for research» that includes making changes to regulation, standards, public procurement and patent rules to foster innovation. Pharmaceuticals, energy, environment and transport were singled out as key sectors where «high level» coordinators should be appointed to «orchestrate European action,» spurring more risk-taking and easier access to development cash. «Europe and its citizens should realize that their way of life is under threat but also that the path to prosperity through research and innovation is open if large-scale action is taken now by their leaders,» the report said. Money from the EU’s structural funds going into research should be trebled from 20 percent, it concluded. The report comes a month after EU leaders agreed a new seven-year budget for the 25-nation bloc that will force the Commission to scale back on proposed research projects. This is despite states making research a top priority in their national economic reform plans submitted to Brussels. «We are concerned there is a large gap between rhetoric and reality,» Aho said. EU Commissioner for Science and Research Janez Potocnik said Aho’s report would help the EU executive draw up recommendations for the March EU summit that will look at ways to boost growth and get the area’s 19 million unemployed back to work. «It’s quite a lot of work in front of us, but I believe the political climate is changing,» Potocnik said. In March, EU member states will be asked to recommit to spending the equivalent of 3 percent of their gross domestic product on research, including public and private cash.
