Herman Van Rompuy, Presisdent of the European Council

Herman Van Rompuy, Presisdent of the European Council

What is at stake today is the safeguarding of our European social model through innovation, writes by Herman Van Rompuy, Presisdent of the European Council. Innovation, that is more than just R&D; innovation consisting of the ability of a system not only to produce new ideas but also to bring them to the market and translate them into economic growth and prosperity.

That’s why innovation, of which the digital agenda is an essential part, should be the overarching priority in Europe. We need, at European, national, regional and local levels, a long-term commitment to support innovation.

But this is not enough!

We still miss today an integrated model to look at innovation in a global context. Not a model focusing more particularly on this or that instrument but applying a methodology combining interconnecting instruments that were too often used separately in the past.

The European Council of October 2013 insisted on this: ‘Europe needs a better coordinated use of tools such as grants, pre-commercial public procurement and venture capital, and an integrated approach for research and innovation to market deployment’.

But this is still not enough!

An overarching innovation policy linked with an integrated model doesn’t mean a single innovation policy; the innovation policies should be adapted according to both generic and, more so, to specific characteristics of each sector.

We should move away from applying a uniform approach to heterogeneous markets. Smart specialisation is needed,  sectorial industrial policies have to be promoted, also for sectors which are essential to the development of other sectors, such as the  Internet for instance.

And I am now touching on what is the essence of innovation, to what is usually called ‘data’.  Data is the new currency of the economy, or, as Neelie Kroes used to say, the new oil of our economy. As I said during my opening statement of the European Council of October last year: ‘We have got one main question, and that is how to restore Europe’s online leadership’.

The EU has to boost digital, data-driven innovation across all sectors of the economy, because a strong digital economy is vital for growth and European competitiveness in a globalised world.

One of the questions Neelie Kroes put to me is ‘If you, Herman, would have been me, what would you have done over the last five years?‘.

My answer to that question is very easy: ‘Neelie, nearly the same as you did!‘.

And I am not saying this because we have a good personal relation, which we indeed have.

I am writing this because Neelie did the right thing to boost the digital agenda in Europe.

And I supported her as much as I could.  I put the ‘innovation’ file on the agenda of the European Council for the first time in February 2011, at the first thematic Council I organized. I supported strategic technologies such as Big Data and Cloud computing, knowing they are important enablers for productivity and better services.

I insisted, at each and every European Council dealing with economic policy, on the necessity to complete the Digital Single Market by 2015 and to put every measure into place to fulfil this ambitious objective. Half of Europe’s productivity growth derives already from ICT. Creating a real Digital Single Market could alone generate a 4% GDP increase by 2020.

Let us remember that the internet creates five new jobs for every two lost.

To conclude this ‘digital plea’, I would like to be more specific on three issues, issues we need to keep emphasising if we want to be successful in the future:

1) Innovation of the public sector

A growth policy for and in the EU should be supported by innovation of the public sector.

The volume of public expenditures is about 45% of the EU’s GDP and, as regards public procurement, 17% of GDP. The public sector accounts for 15% of the total employment of the EU. So, innovation by the public sector (the public sector giving the impulse) is something needed, but today innovation of the public sector (becoming itself more innovative for health, education, government administration,…) is even more crucial. Public administrations can achieve 15-20% cost reductions by moving to e-Government, e-health, e-Procurement and e-Invoicing. Not to mention increasing the skills potential of citizens by using more intensively e-Education tools.

And this leads me to the second issue:

2) The skills issue

In 2011, the EU was faced with 300,000 vacancies in the ICT sector; by 2015 this would increase to up to 900,000 vacancies. And by 2020 about 85-90% of all job vacancies are expected to require digital skills. The present skills mismatch is detrimental to our economic and social policy objectives.

That’s why the European Council insisted on a higher degree of integration of digital skills in education, from the earliest stages of school to higher education, vocational education and training and lifelong learning. The European Council insisted also on the need for the Grand Coalition for Digital Jobs to be strengthened to address the skills gap. Unemployment today is about poor skills, not necessarily about poor education. Today, the market – but also society in general – puts less emphasis on knowledge standing for itself than on capacity people have for solving problems; every time new problems.

This is why, if we want the Union’s economies to grow, we should first of all look at the ‘skill supply’. We cannot change our economies without changing our skills supply.

3) And last but not least, I would like to put more emphasis on the need to establish a ‘cooperative model’.

A model bringing all stakeholders together in order to create together. Shareholders from the private and from the public sectors.

The model should encourage an interactive process in which the private sector discovers and produces information about new or renewed activities, and in which public authorities do not only assess the potential but also empower the actors that are the most capable of realizing that potential.

Clearly, society is better off and economies grow more sustainably where universities, public institutions and industry work permanently and openly together and not separately from each other. When they listen to each other in order to reach a common understanding and to share a common vision of the sector they are dealing with. When stakeholders agree on a common objective and pull their efforts to reach that objective.

That’s the model we have to copy.

#EUDigitalminds

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