25 November 2008

Viviane Reding - Why ICT research is even more important in the aftermath of the financial crisis

Lyon, 25 November 2008

I believe that there are three essential lessons we should learn from the crisis:

- First, especially in times of financial crisis we must reinforce the investments in our future capacities to innovate and grow. Cuts in public and private R&D spending may be tempting but this could irreversibly damage our economies and the ability to recover.

- Second, solid and sustainable businesses and economies are those that have the capacity to produce real high-value goods and services responding to real market needs.

- Third, working together at the European level will give us greater strength and stability to ride out the current storm. Recent experience shows that, acting together in the EU, not only helps us to resist shocks but also gives us a scaleefficient basis for achieving ambitious goals that no country is strong enough to tackle by itself.

ICT is the principal motor of growth and competitiveness of industries, the driver of efficiency and effectiveness of our public sector and the means of raising the quality of life of our citizens.

Yet, although the private sector invests € 35 billion per year in ICT research (more than a quarter of all business R&D investments) this adds up to only half as much as corporate US spending on ICT research. Europe's public investment in ICT R&D is also weaker than our competitors! It represents around 40% of the US level.
Our track record in attracting venture capital and private equities to R&D in ICT is not very good either.

We have to take these five steps:

1. Increase the intensity of ICT research,
2. Invest better by prioritising
3. Overcome the deficiencies of scale and fragmentation by coordinating our efforts, and
4. Unlock the innovative potential of our very large single market by unblocking the fragmentation of markets and demand.
5. Make Europe a launch pad for high-tech start-ups

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