REVIVING INNOVATION IN EUROPE
Europe a century ago was the global powerhouse of innovation. Today, it has largely lost its edge, despite some notable exceptions. We are falling back in areas like genomics, quantum computing and artificial intelligence. United States and China are on the roll.
Given Europe´s relatively high wage costs and low reliance on natural resources, innovation remains of fundamental importance for the continent´s economic and social system.
I believe the European economy needs a productivity boost from innovation and new frontier technologies to support growth. Large firms who are first to introduce new products and services to the market experience significantly higher revenue growth.
Only 15 % of European households have broadband speeds >100 Mb/s, but still 315 million Europeans use internet every day.
Only 50% of European government services are digitized, 14 % of European GDP goes to procurement, but only a fraction into innovative technologies.
A newly published discussion paper from McKinsey Global Institute discovering Five Ways in which Europe could scale its game:
1. Play to industrial strength to benefit from its scale and diffusion of technologies across supply chains.
European manufacturers are among the largest global innovators, the continent can build on its industrial prowess. We could create dedicated, coordinated testing areas for key technologies and foster cooperation across industrie boundaries e.g. automotive-telekom alliance.
2. Rethink data and user access and standards to level the playing field, protect citizens data and connect data pools.
Europe could aim to enable secure access for innovators to data pools they do not own and create scale around common standards. Implemented in a smart way, such initiatives could not only give companies and research institutions access to anonymized data, but also enable citizens to increase control over what data are captured and how they can or cannot be used, when , and by whom.
3.Use its substantial public-sector procurement scale to develop innovation of digital goods and services.
To leverage the public sector more fully, Europe could first rapidly scale up digital government, as Estonia has done, and drive European convergence on standards and open interfaces. This would require a mind-set shift away from national steering and toward a coordinated European and open innovation-focused approach.
4.Open innovation and high-skill immigration flows
In talent, specifically, Europe could try to leverage its strengths, as well as the geopolitical climate currently geared toward preventing immigration to change flows of high-skill migrants in its favor.First this could include encouraging the return of Europeans who work abroad.International talent could be attracted by creating better pathways for high-skill professionals promoted by leveraging social media.
5.Leverage scale of global firms to its benefit
Ensure not only that European citizens continue to enjoy the benefits of services delivered by non-European companies, but that this companies also create more European based employment, innovation, customer value and tax income.
Europe possesses many ingredients for successful innovation and adoption of innovation. In a superstar world in which it lacks scale, it needs to find its own innovation model and play its strengths rather than trying to catch up with the strengths of others.
Interesting to read:
INNOVATION IN EUROPE - Changing the game to regain a competitive edge.
published by McKinsey Global Institute