Innovation: a mind-set and a must

Speech by the Dutch prime minister, Mark Rutte, at the Innovation Convention 2014, Brussels, 10 March 2014

Ladies and gentlemen,

Let me start by telling you about Dave Hakkens, a young Dutchman who graduated last year from the Design Academy in Eindhoven. His project attracted attention all over the world. For years, he had wondered why we throw our smartphones away every couple of years, while we're happy to repair our bikes ourselves. He hated the amount of e-waste created each year, so he thought up the 'Phonebloks' concept: a modular phone that works like Lego. All its parts - camera, GPS, memory, battery - can be fitted by the user. So if one component breaks, you simply order a new block online.

Dave's YouTube film got millions of views in only a few weeks. In no time, he had almost a million supporters online. The story was picked up by the media and the idea soon got the attention of several big companies. Then things really started moving. The latest news, from two weeks ago, is that Google plans to release the phone in early 2015. Some people are already calling it the 'iPhone killer'.

Stories like this show what the modern economy is all about. Creativity. Ambition. Smart use of new technology. And the power of online and social media. It's also about having an international outlook. Dave Hakkens is of course a classic example of the brilliant solo entrepreneur. But equally innovative were the 300 researchers from 14 EU countries who in 2012 made the cover of the journal Nature. Led by Wageningen University, they mapped the complete DNA of the tomato, one of my country's leading exports. And there's no shortage of innovation in the projects and partnerships on display at this second European Innovation Convention. Every story, every product, idea and application is unique. But together they underline how essential it is that we create space for innovation at every level. And in Europe in particular.
We all understand why this is so important. Although the European economy is recovering, unemployment is still high. Alarmingly high in some countries, especially among young people. Reason enough to seek out new prospects for growth and development. And it's great to see that the spending programmes in the new EU budget are far more focused on that goal than in the past.

But that is not enough. The world is changing. We are at a crossroads, as President Obama noted in his recent State of the Union address. He said, 'We know that the nation that goes all-in on innovation today will own the global economy tomorrow.' This may pose a bigger challenge to Europe than America. Because while Europe has a strong track record in high-value creative concepts, it can also be a little too conservative when it comes to entrepreneurship and personal risk. But today's economy demands dynamic growth. We can't allow Europe's economic place in the global village to become a neighbourhood of grand but crumbling mansions, without funds for maintenance and new developments.
In short, what we need is economic innovation. Real innovation. We need to give people like Dave Hakkens the space they need to succeed. Or a helping hand, if they need one. We have to create a climate for innovation that encourages companies and research centres. One that helps them get the best out of themselves and each other. That is why this conference is so important. That is why the 'Innovation Union' is such an exciting prospect. Because an EU that is fully geared to new knowledge and technology offers enormous potential in three key ways: promoting economic growth, creating jobs and finding solutions to major challenges like demographic aging and energy security.

For me it is an honour to stand here today representing a country with a long tradition of innovation. For the Netherlands is a true innovator: from the pumping stations we used back in the seventeenth century to reclaim land from the sea, to the energy-saving LEDs produced by Philips, which light up the Eiffel Tower at night. A major recent study by the Financial Times confirmed that view, naming Eindhoven Europe's third-most innovative city. Three of the top-ten most innovative regions are in the Netherlands. And tomorrow Groningen will be competing for the title of 'European Capital of Innovation'. As you might imagine, we're proud of this recognition, and we see it as confirmation that we're on the right path.

But what kind of path is it, exactly? I'd like to explain, briefly. In the Netherlands, we've designed our innovation policy with three principles in mind.

First, we concentrate on areas where we already excel. We call these our 'top sectors'. So we made a conscious choice to promote excellence in fields like water, agri-food and life sciences. These are the areas where we want to compete globally. In fact, we want to be the world number one.

Second, it is not the government alone that decides the innovation agenda. We work with relevant companies and the research community. We call this model the 'triple helix'. So the government's main role is not as a grant office, but as a network partner and enabling force. We work to reduce the regulatory burden, for example. We have an active agenda for our foreign missions, aimed at bolstering international knowledge networks. And we've started a revolving innovation fund, in which a one-off investment of taxpayers' money provides continual funding for new projects. The goal of this approach is to unlock maximum energy and activity in the top sectors. But does this concept of shared responsibility work? You only have to look at total public and private R&D spending in 2012 which, in a tough economic time, rose by over 6.5 per cent to almost 13 billion euros.
A third choice we always make in the Netherlands is to align very closely with European innovation programmes. New knowledge and its applications have little regard for national borders, and the feasibility of many projects depends on their scale. What's more, experience shows that international cooperation nearly always benefits everyone concerned. Some 1,200 Dutch companies and research organisations are now involved in European innovation projects. I'm sure that Horizon 2020, which was launched recently is an important next step. Across the EU, thousands of enterprises and institutions and tens of thousands of people are involved, including top researchers from around the world.
Nearly 80 billion euros will be invested in Horizon 2020 by the end of this decade. This means that the EU as a whole is engaged in the biggest research programme in the world. And let's not forget the underlying goals: boosting Europe's GDP by 800 billion euros and creating 3.7 million new jobs. These figures speak for themselves. There's no lack of ambition.

I applaud these efforts. But so much ambition entails obligations, of course. And I am absolutely convinced that the Innovation Union must be more than simply a large sum of money and a series of research projects. The Innovation Union itself needs to be innovative, by working always to create the very best conditions for innovation in the academic and business worlds. Funds and programmes are of course crucial, but so much more can be done. Here are some examples.

First, there is the perennial problem of red tape - excessive rules that stifle initiative, including innovation. While the lifeblood of innovation is freedom. Freedom to experiment. Freedom to think outside the box. Freedom to fail and then try again. And freedom to work with whomever you want. So the ongoing battle against red tape also benefits innovation policy. We must at least get rid of the remaining obstacles to the free movement of knowledge and researchers. The European patent, too, is coming ever closer. It doesn't require specialist knowledge, merely political and administrative will.

A firm political and administrative commitment to knowledge circulation and open data is essential. Because knowledge only becomes truly useful if enough people and organisations have access to it. Public authorities, companies and research institutions are sitting on a wealth of research information that is relevant to many people but often accessible to very few. Even though much of the underlying research is funded with taxpayers' money. So a genuine Innovation Union will promote open access to academic publications and government data. Maximum knowledge for the maximum number of people - that should be our goal. And it will receive the Netherlands' wholehearted support.

Another well-known requirement is to bolster the internal market and fully implement the Services Directive. This will directly benefit new and innovative business sectors like the gaming industry and online media companies. Services account for 80 per cent of the Dutch economy, but only 20 per cent of our exports - something that is very difficult to explain. Giving these companies more room to spread their wings will boost the innovative capacity of Europe as a whole. This, too, demands resolve.

A third example concerns the current debate on the division of tasks between the European Commission and the member states. At what level can tasks best be carried out? What changes are needed to make European governance leaner and meaner, and safeguard its future effectiveness? The question of effectiveness is also relevant to innovation. It is mainly up to the member states to ensure that their economies are competitive and that their knowledge infrastructure is in order. Only then will the whole be more than the sum of the parts in Europe. In other words: European innovation programmes must not compensate for national shortcomings, but give the innovation efforts of member states added value.

This added value mainly comes from increases in scale and from connecting knowledge and people, producing results that a single country or research group could not achieve so quickly, if at all. A topical example is the bio-based economy. Everyone understands that it can only be achieved if countries and sectors work together. For instance, a group of international researchers led by the Dutch firm, Avantium, has developed a biodegradable plastic bottle that Coca-Cola wants to use for its drinks.

Another example is the concept of 'smart cities', which is of course very appealing to a densely populated country like the Netherlands. But don't forget that two-thirds of all Europeans now live and work in metropolitan regions. And all these regions face similar challenges in areas like transport, logistics, energy, health and the living environment. More and more, the challenge is to unite all these interests, and this demands an innovative approach. Working together on the Urban Agenda has already shown its potential. And when it comes to heating our homes more cleanly, a group of 16 European parties led by the Dutch Energy Research Centre has developed a new global standard for silicon solar panels that are more efficient than ever before.

Finally, let me mention the digital agenda of my compatriot, Commissioner Neelie Kroes. Its roll-out is important, not only because it can potentially create 3.8 million new jobs, but also because it will make it easier for companies and researchers to exchange large quantities of information. And speaking of making life easier: I don't know about you, but when I travel from one European country to another, nothing really changes, except in the most advanced device I carry with me: my smartphone. Apps that suddenly become very sluggish, the well-known problem of roaming costs - these are fairly minor but irritating and unnecessary barriers. And these too could be eliminated by the digital agenda.

Ladies and gentlemen,

The late Steve Jobs, one of the most innovative thinkers of our time, summed it up well: 'Innovation distinguishes between a leader and a follower.' Given its position, the EU has a duty to lead the way. And this demands a constant focus on innovation. In everything we do. For innovation is not a list of projects or telephone numbers. It is a mind-set and a must. And I promise you that during the Dutch Presidency in 2016, we will give this issue the attention it deserves.

I wish you all an inspiring, informative and successful convention.

Thank you.