Europe’s Strengths and Weaknesses in Key Science and Technology Domains

1. Europe’s Strengths and Weaknesses in Key Science and Technology Domains Paraskevas Caracostas Advisor, « Science and Society » Directorate, DG Research, European Commission, Brussels Ελληνική Βιομηχανία: προς την οικονομία της γνώσης, ΤΕΕ, Αθήνα, 3-5 Ιουλίου 2006

2. Europe’s Strengths and Weaknesses in Key Science and Technology Domains • Key Challenges for Europe • Perspectives on Europe’s industrial specialization • The science base • SWOT analysis in key technology areas • Conclusions Ελληνική Βιομηχανία: προς την οικονομία της γνώσης, ΤΕΕ, Αθήνα, 3-5 Ιουλίου 2006

3. Key Challenges for Europe • « Chindia » • The next technology wave • Global inequalities • Economic Scenarios • Environment/Energy • Demography • Future of Manufacturing • Institutional Scenarios Ελληνική Βιομηχανία: προς την οικονομία της γνώσης, ΤΕΕ, Αθήνα, 3-5 Ιουλίου 2006

4. Perspectives on Europe’s industrial specialization A recent analysis of export market shares (see Eur. Comm., 2005c) shows that: • in terms of skill intensity, it is very clear thatthe EU does particularly well in the medium-high technology grouping, with a world export market share in excess of 20%which is substantially higher than its overall market share of 15-16%. It is also a big world player in the medium-low technology sector although its share in this category is tending to decline over time. Its relatively poor showing in the high technology category to a large extent reflects itslow market share in ICT related industries. • In the overall world market for high technology goods, the US and south east Asia are dominant. While this dominance to a large extent reflects their particular focus on the ICT sector, their involvement in other high technology areas is also playing a role.Japan has the highest concentration in the medium and high technology sectors of any of the areas covered. Over 80% of Japan’s trade are in these groupings compared with less than 60% for the EU. Ελληνική Βιομηχανία: προς την οικονομία της γνώσης, ΤΕΕ, Αθήνα, 3-5 Ιουλίου 2006

5. Perspectives on Europe’s industrial specialization (2) Ελληνική Βιομηχανία: προς την οικονομία της γνώσης, ΤΕΕ, Αθήνα, 3-5 Ιουλίου 2006

6. The Science base • Compared to the US and Japan, the scientific capabilities of the EU are distributed evenly across all fields of science. The EU shows no strong specialisation or under-specialisation in any particular field. Conversely, the US is specialized in basic life sciences and multidisciplinary sciences and under-specialised in chemistry and engineering sciences; Japan specialises in physics and astronomy but is less active in biological sciences, computer sciences, earth and environmental sciences, and mathematics and statistics. Ελληνική Βιομηχανία: προς την οικονομία της γνώσης, ΤΕΕ, Αθήνα, 3-5 Ιουλίου 2006

7. USA Ελληνική Βιομηχανία: προς την οικονομία της γνώσης, ΤΕΕ, Αθήνα, 3-5 Ιουλίου 2006 US scientists dominate in each of the 21 subject areas of science (Source: Basu, 2004)

8. Strengths Weaknesses Opportunities Threatsanalysis in key technology areas Pervasive Technologies Systemic Transition Technologies Emerging/Converging Technologies Ελληνική Βιομηχανία: προς την οικονομία της γνώσης, ΤΕΕ, Αθήνα, 3-5 Ιουλίου 2006

9. SWOT analysis in key technology areas • Pervasive Technologies/ICTs: The EU is strong in a few sectors of ICT (mobile, services, embedded systems, microsystems, application software) Europe’s revealed technological advantage in various information society technologies, 1996-1998 (FISTERA, 2005) Ελληνική Βιομηχανία: προς την οικονομία της γνώσης, ΤΕΕ, Αθήνα, 3-5 Ιουλίου 2006

10. SWOT analysis in key technology areas • Pervasive Technologies/Biotechnology At the end of 2004 the biotechnology industry in the eighteen European countries surveyed by Critical I (2006): • Had 2163 companies (compared to 2200 in 2003) • Employed approximately over 96,500 people, including 42,500 in R&D (96,000 in 2003 with 41,000 in R&D) • Spent about €7.6 billion in R&D (€7.6 billion in 2003) • Generated over €21.5 billion revenue (€20.5 billion in 2003) • Raised €1.1 billion in venture capital in 2004 (€787 million in 2003) • Raised a total of €2.1 billion through equity in 2004 (€1.45 billion in 2003) In 2004, the US biotechnology industry: • Comprised 1991 companies (2003: 1975) • Employed approximately 190,500 people (2003: 170,500) • Spent €21 billion on research and development (2003: €20 billion) • Generated over €41.5 billion of revenue (2003: nearly €40.5 billion) • Raised €2.5 billion in venture capital in 2004 (2003: €2.2 billion) • Sold an additional €5.3 billion worth of equity – largely through the public markets (2004: €3.5 billion) Ελληνική Βιομηχανία: προς την οικονομία της γνώσης, ΤΕΕ, Αθήνα, 3-5 Ιουλίου 2006

11. SWOT analysis in key technology areas Pervasive Technologies/Production Technologies/Materials Ελληνική Βιομηχανία: προς την οικονομία της γνώσης, ΤΕΕ, Αθήνα, 3-5 Ιουλίου 2006 Source: CM International, FUTMAN, 2003

12. SWOT analysis in key technology areas Pervasive Technologies/Production Technologies/Services Today, in Europe there is a number of research institutes which operate on high international research standards in certain areas of service research (for ex. service standardization, service engineering and service work design). Though, on the European level there is a lack of centres of excellence which are able to cover the broadness of service research challenges in an interdisciplinary way as well as to concentrate resources and know-how in order to be able to shape the international discourse of research. In Europe technology development, goods production-oriented research and practice are well connected. But to service research, such a statement can be applied only on a limited scale. It is necessary to raise the so far limited readiness/tradition of service companies for systematic research and development and for participating in collaborative development projects with science. Ελληνική Βιομηχανία: προς την οικονομία της γνώσης, ΤΕΕ, Αθήνα, 3-5 Ιουλίου 2006

13. SWOT analysis in key technology areas Systemic transition technologies/Renewable Energy: Europe as a whole (European Commission and its Member states) puts more public resources in non nuclear energy research than its competitors, especially in the area of renewable energies.Europe is relative weak in comparison with the US and Japan in moving forward with the most promising technologies such as hydrogen and fuel cell based technologies, while at the same time the European continent is leading in solar, wind and geothermal energy technologies. The US have been overtaking the EU in the gas turbine business, Japan is in the process of doing the same in the PV area and in the fuel cell domain where most of the industrial advances appear to be carried out in the US. There is a strong European base in fundamental science and technology areas of relevance to key energy technologies and in some areas, ambitious experiments and demonstrations are set up. Apart from wind where European industry has definitely taken the lead following its economical success, most of the “minor” technologies (solar thermal, geo thermal, ocean energy, etc…) have still to materialise in terms of business success and significant contributors to the energy mix. Ελληνική Βιομηχανία: προς την οικονομία της γνώσης, ΤΕΕ, Αθήνα, 3-5 Ιουλίου 2006

14. SWOT analysis in key technology areas Systemic transition technologies/Environmental Technologies: • Europe has a well recognised scientific competencein environmental research, as well as in research on the impact of socio-economic behaviour on the environment. • In some important segments of general purpose technologies (e.g. miniaturised sensors, new materials, some segments of nanotechnology) European research and development is leading edge worldwide. • In many fields of sectoral environmental technologies European firms are at the global forefront of technological developments, building on now almost thirty years of experience. Ελληνική Βιομηχανία: προς την οικονομία της γνώσης, ΤΕΕ, Αθήνα, 3-5 Ιουλίου 2006

15. SWOT analysis in key technology areas Systemic transition technologies/Sustainable Mobility Technologies • Europe possesses high scientific capacities in the majority of the disciplines concerned: sciences engineering, mechanical engineering, civil engineering, mechanics of the fluids, electronics, acoustics, energetics, applied mathematics, signal processing…… • There are large world leaders in the majority of the sectors: cars and commercial vehicles, aeronautics, high speed trains, "complex" ships. • A high technological level in the fields of motorisation, of electronics, of the tyres, of the particle filters … • high European standards inciting to innovation and a clear European policy (see European Commission, 2001,White Paper on Transport Policy). • A beginning of a European mobilisation for hydrogen and the fuels of the future. Ελληνική Βιομηχανία: προς την οικονομία της γνώσης, ΤΕΕ, Αθήνα, 3-5 Ιουλίου 2006

16. SWOT analysis in key technology areas Emerging Sciences Technologies/ Nanotech: Europe is performing well in this emerging field both in terms of scientific production as in accounting for patents. The major challenge is to make the jump from an, by large, academic based activity to commercial applications, e.g. nano-electronics and medical applications. Europe is strong in the following sub-fields of nanotechnology: • Biomimetics (a major source of nano-innovations) • Nanomaterials (nanoparticles, quantum dots, thin films) • Nanoelectronics and computing • Toxicology of nanoparticles, both in-vitro and in-vivo • Nanophotovoltaics • Nanosensor research and development • Nanomedicine – including diagnostics, tissue regeneration and targeted drug delivery Ελληνική Βιομηχανία: προς την οικονομία της γνώσης, ΤΕΕ, Αθήνα, 3-5 Ιουλίου 2006

17. SWOT analysis in key technology areas Emerging Sciences & Technologies/ Cognitive systems technologies Europe, which holds a large part of the responsibility and merit for launching cognitive science and fuelling it with some of its key insights, has of late been lagging behind the US and Japan, and must make a very resolute effort to catch up and remain in the lead, in the face of the increased level of competition brought about by China, which is giving cognitive neuroscience top priority. In some areas, such as robotics, neuroscience, psychophysics, statistical and dynamical models, logic, developmental psychology, pharmacology, linguistics, Europeans are in the lead or among the world leaders. Ελληνική Βιομηχανία: προς την οικονομία της γνώσης, ΤΕΕ, Αθήνα, 3-5 Ιουλίου 2006

18. SWOT analysis in key technology areas Emerging S&T/Complexity Sciences • A new wave is originating in complex systems research that is shifting the IT technology needed to support the activities from algorithms to programming languages for interaction and concurrency. The main experts all over the world are in EU. • For example in the field of bioinformatics, in concurrency theory, Europe is the leading edge of basic research and knowledge if compared to the USA, China or Japan. Ελληνική Βιομηχανία: προς την οικονομία της γνώσης, ΤΕΕ, Αθήνα, 3-5 Ιουλίου 2006

19. SWOT analysis in key technology areas Emerging S&T/Converging S&T: • Scientific activity in Europe as measured by the number of publications is overall higher than that in USA and Japan in all of the convergent clusters, except in the case of Biotech + ICT where USA has a slightly lead. In terms if scientific impact as measured by the normalized citation score, the USA however leads in all clusters with the possible exception of Nanotechnology + ICT. Ελληνική Βιομηχανία: προς την οικονομία της γνώσης, ΤΕΕ, Αθήνα, 3-5 Ιουλίου 2006

20. The Future of ManufacturingFUTMAN scenarios (2003) Under the Global Economyscenario, individual choice by consumers is preferred and the “invisible hand” of the market will best co-ordinate the policies necessary for economic development and technological innovation. Research and technology is regarded as a key ingredient into sustaining leading-edge progress in globalised markets, Europe lagging behind the USA in mission-funded RTD areas. Under the Local Standardscenario, allegiances unite behind collective public values and consumer attitudes, but congruence in policy is achieved, not at central European level, but at regional level. Influential local citizen action groups go hand-in-hand with a decrease in EU influence on global affairs. A “hollowing-out” occurs in those sectors of European industry which are prone to commoditisation. The Sustainable Timesscenario contains a generalised acceptance at both citizen level and at the level of governance that sustainable development issues should be taken from the clouds of medium-term concerns and grounded in policies with immediate effect. Technological and organisational innovation bring about system changes and industry becomes an active mediator of sustainable development. The Focus Europescenario combines a high degree of congruence in development and innovation policies with a highly individualised set of consumer preferences. At the macro level, this is a risky strategy, since Europe’s views and policies on sustainability are not shared by the United States and by the big economies of East Asia. European manufacturing rises to the challenge and carves out a world leading position in environmental technology. Ελληνική Βιομηχανία: προς την οικονομία της γνώσης, ΤΕΕ, Αθήνα, 3-5 Ιουλίου 2006

21. The economic scenarios of the Central Planning Bureau (NL, 2003) • The recent scenarios[1] of CPB tend to show that a more integrated Europe as well as a globalised Europe score both higher in terms of efficiency/equity trade offs than a Europe of regions or a “Transatlantic” Europe; but the first is more socially cohesive and environmentally sustainable but less economically effective than the second. [1]See Ruud de Mooij, Paul Tang, (2003), Four Futures of Europe, Central Planning Bureau, The Hague Ελληνική Βιομηχανία: προς την οικονομία της γνώσης, ΤΕΕ, Αθήνα, 3-5 Ιουλίου 2006

22. Conclusions Strengthening Europe’s research identity • To be more attractive, Europe needs a differentiation strategy, based on the strengths of its science, technology and industrial base. It must specialize and become the place for high quality, high innovative and value added services-products systems as the US is the place for computer software and microprocessors. And once the Union has decided around which objectives to mobilize its resources, the research, innovation and education efforts of member States, regions and business must be articulated and synergies enhanced internally and with other partner countries. • The underlying concept for such a specialisation strategy could be « sustainable and qualitative growth ». It’s at the heart of the ‘Lisbon-Göteborg’ strategy and it opens new spaces for technological organisational, institutional and social innovations. Ελληνική Βιομηχανία: προς την οικονομία της γνώσης, ΤΕΕ, Αθήνα, 3-5 Ιουλίου 2006

23. Lisbon strategy for a knowledge-based society, Sustainable development strategy, Coping with linguistic-cultural diversity and institutional complexity, Challenge of ageing, Energy transition Transeuropean networks and services Mega-cities, Global diseases, Ageing of China and Japan, Clean transport, Climate change, Low carbon economy, Language diversity and inter-cultural communication Europe’s Socio –economic Model Global opportunities Communication technologies, Application software, Medical and life sciences, industrial and environmental biotech, Renewable energy technologies, all transport technologies, eco-technologies, converging sciences and technologies Pharmaceuticals, Chemicals, Electric circuits, Specialized equipment, Plastics, Engines and Motors, Cars, Telecoms, Electrical Machinery, Aircrafts, Financial and computer services Industrial strengths S&T strengths Conclusions (2) Ελληνική Βιομηχανία: προς την οικονομία της γνώσης, ΤΕΕ, Αθήνα, 3-5 Ιουλίου 2006

24. Conclusions (3) Recent policy messages: • EU FP7: European Technology Platforms and Joint Technology Initiatives - The First 6 Joint Technology Initiatives proposed by the EC: Innovative Medicines Initiative, Nanoelectronics Technologies 2020, Embedded Computing Systems, Hydrogen and Fuel Cells Initiative, Aeronautics and Air Transport, Global Monitoring for Environment and Security (GMES) • the Key Technologies expert group (European Commission 2005a) underlined the necessity for a strategy “beyond Lisbon”: • A strategy for transforming EU R&D system needs to be based on a systemic approach integrating long-term and short-term strategies and the member states R&D systems to obtain synergies and rationalise efforts; • The EU needs to introduce system innovations, i.e. combinations of radical technological and organisational/social innovations in many areas of economic activity, that allow reconciling economic, social and environmental objectives, values and beliefs. • New EU Industrial Policy (2005): mixing horizontal/sectoral aspects • « Aho Report » (2006): « A combination of supply and these measures (on regulation, standards, public procurement, intellectual property and fostering a culture which celebrates innovation) to create demand should be focused in large scale strategic actions. We identify several examples: e-Health, Pharmaceuticals, Energy, Environment, Transport and Logistics, Security, and Digital Content. » Ελληνική Βιομηχανία: προς την οικονομία της γνώσης, ΤΕΕ, Αθήνα, 3-5 Ιουλίου 2006

25. For more information • http://cordis.europa.eu/foresight/kte_expert_group_2005.htm Thank You! Ελληνική Βιομηχανία: προς την οικονομία της γνώσης, ΤΕΕ, Αθήνα, 3-5 Ιουλίου 2006