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Europe needs to find its own innovation mojo

Some German leaders are also calling for a stronger push in innovation.

With Silicon Valley in the US long-dominant in digital breakthroughs and China pouring massive funding into R&D, European leaders and agencies are calling for new initiatives to tap into the continent's vast pool of talent and expertise to form a third global centre for cutting-edge innovation.
Among the proponents is youthful French President Emmanuel Macron, perhaps the first major European leader from the smartphone generation. He is calling for the creation of a new EU agency for "disruptive innovation" to develop new "champions" in digital technology.
"Let us create within two years a European agency for innovation to be in the position of innovator and not of follower," Macron said in a recent speech at Sorbonne University. "The challenge is to make Europe a champion in the digital, artificial intelligence and biotech sectors."
His comments seem to support an earlier plan by EU Research Commissioner Carlos Moedas, who has proposed creation of a European Innovation Council (EIC). Moedas told the media he is "glad we are talking about the same kind of ideas".
"It's a big boost because it's the first time a head of state has come out and publicly called for it, and the support of France is essential," Moedas said.
First proposed by Moedas in 2015, and partly modeled on the US Defence Advanced Research Projects Agency (DARPA) that invented the Internet and made other high-tech breakthroughs, the EIC proposes grouping together four existing programmes and offering support to innovative startups through loans and equity finance. The goal, Moedas says, is to create more "unicorn" companies in Europe worth $1 billion or more.
Some German leaders are also calling for a stronger push in innovation. A collation blueprint adopted last week between the Christian Democrats and the Social Democrats says that Germany and France should join together as "an engine of innovation."
Among the projects set to get EU funding is development of an exascale supercomputer that will be capable of one quintillion calculations per second, 10 times faster than today's top models. The project will receive 486 million euros from the European Commission's Horizon 2020 budget, with more funding coming from 13 member states.
The European initiative faces stiff competition from the US and China, which announced that its first exascale prototype is due for completion in the coming months. There are now 105 supercomputers in Europe, but the top performing machines are all from China and the US.
 "The EU does not have one in computer in the top 10 list of supercomputers," said Bulgarian Digital Commissioner Mariya Gabriel. "In 2012 we had four machines (in the top ten)."
The European Innovation Council, which has a two-year mandate to help develop the EIC, recently released a statement that noted the "many well-known reasons why breakthrough innovators find it hard to start up and scale up their businesses in Europe".
Reasons include "universities that lack expertise, adverse attitudes to entrepreneurship, thin and fragmented venture capital markets, the incomplete single market, access to talent, regulatory barriers and many more".
But the crucial private sector senses there is big room for growth in European innovation. Hermann Hauser, co-founder of the Amadeus Capital Partners venture capital firm, says that "the EU is perceived by the global investment community as 'under fished'".
"Deals in Europe are still cheaper than in the US although the technical talent pool is just as good. The expertise in Europe is excellent, especially in the important areas of artificial intelligence, blockchain and life sciences," says Hauser.
Some in Europe think it is precisely private initiative that should lead the charge. Sceptics in the European Parliament itself said Macron's articulated vision does not align with the wishes held by many voters in Europe.
A cradle of innovation down through history, Europe continues to show it has world-class minds. In the auto industry, medical research, aerospace and many other fields it remains among the best globally, but how to encourage an ecosystem that makes more potential manifest remains the challenge.
The soil is fertile, but covered in layers of history and bureaucracy, so clearing the underbrush for new growth is all important. The question remains whether tradition-bound Europe can do that.
Jon Van Housen and Mariella Radaelli are editors at Luminosity Italia news agency, Milan