Innovating in the digital era: putting Europe back on track

Presentation of J.M. Barroso, President of the European Commission,

to the European Council of 24-25 October 2013

Presentation of J.M. Barroso to the European Council, 24-25 October 2013

1

Innovation is key to our competitiveness

3,5

4

4,5

5

5,5

6

50 70 90 110 130 150

Sources: European Commission, World Economic Forum

Glo

bal C

om

petitiveness I

ndex 2

013-1

4

Innovation output in 2011

(EU in 2010 = 100)

SE JP

FI DE

DK

IE

LU FR

UK

US

NL

BE

AT

EU

ES EE

MT

PL LT

CZ

IT

HU

SI

EL

RO

SK

HR

LV

BG CY PT

Global competitiveness index versus innovation output indicator

Presentation of J.M. Barroso to the European Council, 24-25 October 2013

2

Number of universities in Top 100 (Shanghai index, 2013)

Share of researchers in the business sector (% of total researchers, 2010) Patent applications per million people

(2011)

World-class universities

PhDs trained for industry Better knowledge transfer

between academia & industry

Sources: Shangai/ARWU index, Nobel Prize Committee, OECD, European Commission

Excellence in science Number of Nobel Prize winning scientists

in the last 20 years (1994-2013)

To lead globally, the EU needs…

0

10

20

30

40

50

60

US EU JP CN

0

20

40

60

80

100

US JP CN EU

0

50

100

150

200

250

JP US EU CN

0

20

40

60

80

100

120

US EU JP CN

Presentation of J.M. Barroso to the European Council, 24-25 October 2013

3

Number of scientific publications, 2000-2011

Scientific publications in the last decade

Source: European Commission, Scopus data

Most cited publications

The 10% most cited 2008 publications, over 2008-2011

The EU has a strong scientific base

0

1 000 000

2 000 000

3 000 000

4 000 000

5 000 000

6 000 000

EU US CN JP 0

10 000

20 000

30 000

40 000

50 000

60 000

US EU CN JP

Presentation of J.M. Barroso to the European Council, 24-25 October 2013

EU LEVEL

NATIONAL LEVEL

A lot can be done

4

Country-specific recommendations

R&I and education systems

Europe 2020 strategy

Single market priorities

European Research Area

Public support

Private investment

Smart specialisation

Public-private partnerships

Horizon 2020 and COSME

Structural and Investment Funds

Access to finance

European Innovation and Technology Institute

European Innovation Partnerships

Joint Technology Initiatives

Framework conditions

Investment

Cooperation

Presentation of J.M. Barroso to the European Council, 24-25 October 2013

5

Efficient funding

through

competitive calls

Access to

top-level facilities

Open,

merit-based

recruitment

Greater

gender balance

Increased circulation

of researchers and

grants in the EU

Towards a single market for knowledge:

better links between research,

education and innovation

Open access to

publications

Example 1: The European Research Area

Presentation of J.M. Barroso to the European Council, 24-25 October 2013

6

Excellence in science

Societal challenges

Industrial leadership

Horizon 2020: more than € 70 billion to invest in R&D, 2014-2020

Example 2: The Horizon 2020 programme

Presentation of J.M. Barroso to the European Council, 24-25 October 2013

0

1

2

3

ICT plays a key role

7 Sources: European Commission, OECD, van Ark

Investment in ICT as % of total investment (2011)

%

Labour productivity growth and ICT contribution (2001-2011)

ICT Contribution Other

Expenditure on R&D as % of GDP (2011)

EU US

Public sector Private sector

Europe compared to the US: R&D spending, ICT investment and productivity

% %

0

5

10

15

20

25

EU USEU US

0

1

2

3

EU USEU US

Presentation of J.M. Barroso to the European Council, 24-25 October 2013

The digital economy: sizeable potential…

8

ICT in the EU: number of jobs, value generated and ICT capital in 2000 and 2010

Sources: European Commission, The Conference Board

0

50

100

150

200

250

1 2 3Employment of ICT specialists in the EU

EU in 2000 (index = 100) EU in 2010

Gross value added of ICT sector

ICT capital (hardware, software

and telecoms equipment)

Presentation of J.M. Barroso to the European Council, 24-25 October 2013

… in a rapidly changing landscape

9 Sources: European Commission, Bruegel

Number of world-leading firms in ICT ("leading innovators") by region and activity in 2012

(telecom, computer and electronic equipment such

as Alcatel, Ericsson or Nokia)

TOTAL ICT

Layer I: element providers

(computer hardware, electronic office and telecoms equipment, semiconductors)

Layer II : network operators

(fixed line & mobile telecoms)

Layer III: platform, content, application

(computer services, internet and software)

World 381 228 22 131

EU 62 23 11 28

US 199 117 2 80

Presentation of J.M. Barroso to the European Council, 24-25 October 2013

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Growth in ICT spending(2010-16)

Fibre take-up (2012) 4G take-up (2013) Web 2.0 patent applications(2008-12)

The EU must compete to keep its ranking

10

Indicators for digital investment, revenue and uptake

EU (or proxy) North America (or proxy) Asia/Pacific (or proxy)

Change in revenue

of ICT firms in Top 50

(2008-2012)

High-speed

fibre line take-up

(% population)

4G take-up

(% of global take-up)

Growth in ICT

spending

(2010-2016)

Web 2.0 patent

applications (as %

global, 2008-2012)

Sources: IDATE, Fortune Global 500, COCOM, OECD, European Commission

Presentation of J.M. Barroso to the European Council, 24-25 October 2013

Fragmentation is a particular challenge

11

Malmö

Copenhagen

Kiruna

Why should a Swedish citizen visiting

Copenhagen pay 45 times more to send

an email with a smartphone to nearby Malmö…

… than to send one from Malmö to Kiruna in

north Sweden, which is 1400 km away?

Presentation of J.M. Barroso to the European Council, 24-25 October 2013

35 000

30 000

25 000

20 000

15 000

10 000

5 000

0

2005 2010 2015 2020

Exabytes

New technologies - new opportunities

12

Big Data

Volume of data created globally expected to double every 2 years 10-20% cost reduction

for most organisations

400 000 new SMEs by 2016

Close to € 1 000 billion for EU GDP

over 2015-2020

Cloud computing

Sources: IDC, F. Etro, Mc Kinsey

Presentation of J.M. Barroso to the European Council, 24-25 October 2013

Zoom 1: a dynamic telecommunications sector

13

Greater trust,

reliability and

interoperability

for users

Increased

competition,

better choices

and fairer prices

More competitive

ICT sector, with

greater economies

of scale

Framework to

invest in quality

and high-speed

networks

Presentation of J.M. Barroso to the European Council, 24-25 October 2013

Zoom 2: helping citizens and firms to go online

14

Level of computer skills in the EU (% of individuals aged 16-74, 2012)

No skills

High level

Medium level Low

level

Source: European Commission

0

5

10

15

20

25

30

35

40

2010 2011 2012%

of e

nte

rpri

se

s

Share of EU SMEs and large enterprises selling online

SMEs Large enterprises

Presentation of J.M. Barroso to the European Council, 24-25 October 2013

Zoom 3: leading by example

15

LT: e-procurement for almost

90% of total public procurement

DK: mandatory e-invoicing

reduced related administrative

costs by 80%

SI: opening up education

initiative with 32 000

digitally-trained teachers

EE: more than 90% of banking

transactions, tax declarations and

establishments of firms online

AT: cadastre prices reduced by 97%

(open data) leading to 7 000%

increase in data sold to SMEs

EU / BE: EU "e-prior" freely reusable

e-procurement tool, now used by BE

- annual savings of € 9.5 million

Source: European Commission

ES: electronic healthcare

record and integrated

information systems for health

in most regions

PT: e-procurement generated

18% price reductions on

hospitals' procurement contracts