Know-How - The Best Resource in Global Competition

eBusiness articles

Helsinki, 20 April, 2005 — Know-How - The Best Resource in Global Competition

Five years have passed since European leaders committed themselves to the Lisbon strategy with the goal of making the EU the most dynamic and competitive knowledge-based economy in the world. However, the competitiveness of the EU has dwindled. Investments in manufacturing industries have been moving outside the EU with an accelerating speed and the product development is next in line. The worst scenarios suggest an irreversible economic decline for Europe.

The recent Wim Kok report states: “The Lisbon strategy is even more urgent today as the growth gap with North America and Asia has widened, while Europe must meet the combined challenges of low population growth and ageing”.

Together with ORGALIME and EICTA, the European cooperation organisations of the engineering and ICT industries, the Technology Industries of Finland welcomes the renewed priority given to the Lisbon process and actions supporting European entrepreneurship and innovation. We have to consider the success factors and main obstacles for entrepreneurs, especially for the innovative and growing SMEs, the most vital resource of the European society.

R&D Activity Absolutely Necessary in the Engineering and ICT Industries

The European industry must increase its productivity and renew its products. The citizens of the Union must be encouraged to innovate and take risks in starting globally competitive new ventures. All Member States of the EU ought to achieve the target of 3% of GDP devoted to R&D.

It is necessary to support research in selected areas in order to update the know-how on global leading edge technologies. It is important to improve the access of SMEs to research results and underpin them in their shorter term product development. International studies recognize the SMEs as the most reliable providers of new employment and steadily improving regional well-being.

The industrial competitiveness and innovation abilities can be ensured by industry-driven European research. Therefore, considerable investment in R&D of manufacturing technologies has to be included in future European programmes to keep the manufacturing industry in Europe.

Relevant development themes of the manufacturing enabling technologies are e.g. ability to process new materials and complex products, reliability, sustainability, and miniaturisation.
Moreover, companies will only invest in innovation and R&D if there is appropriate protection of the intellectual property rights. The pending proposal on the patenting of computer-implemented inventions should urgently be adopted.

Deregulation Instead of Overwhelming EU Regulation

The EU directives were initially meant to facilitate free movement of goods and services on the internal market. Today, the massive regulative activity is out of control. In too many cases, the directives and subsequent legislation are excessively complex and they unnecessarily burden the European companies in comparison to companies outside the EU.

Europe needs to be competitive in attracting domestic and foreign risk capital. Access to risk capital, innovative environments, encouragement and reward for entrepreneurial activities will all help start-up companies. Governments should also remove obstacles for industry to invest in ICT. New and potentially disruptive technologies create the potential of new businesses and innovation that must not be stifled by restrictions.

Experience from Finland

Finland has the experience of a success story of the electrotechnical and ICT industries in the 1990s. The national infrastructure of R&D was tuned to optimal efficiency in cooperation with the companies. The most recent vision paper published by the Finnish Electrical and Electronics Industry SET (now the Technology Industries of Finland) indicates in its road maps positive scenarios for further innovation in several segments of applications.

A key strategic factor is specialisation – sharp focus in companies’ core technologies and niche applications – keeping in mind the demand of fast time-to-market and time-to-profit. Networks of different sectors of industry and services will form good platforms for system level innovations and multi-technology combinations.

The Unquestionable Benefits of ICT Use

The ICT industries are the key to the competitiveness of the entire EU. The ICT industry is typically an integrator of several areas of technologies. It is an enabler and supplier of added value to all other industrial sectors as well as the public sector.

ICT helps companies to increase productivity and create attractive products to be sold on the world market. It improves the quality and decreases lead-times and costs. ICT technologies also fuel sustainable development by reducing the environmental impact of business activities. ICT has wide application in public services: in administration, in the educational system, in the health care sector, and in transportation.

Promotion of Broadband and Its Applications

Europe’s economic success depends on the take-up
of world class ICT based technology. Advanced broadband will be the infrastructure of the knowledge economy in the 21st century. The European governments have not yet sufficient political vision and leadership to drive broadband take-up. European Council is urged to establish a sound political objective of “broadband for all” by 2010.

The European public sector should accelerate its investment and use of broadband ICT to improve its efficiency and the quality of services to citizens and businesses. Member States should take immediate action in eGovernment, eHealth, eLearning, and eTransport.
Having sufficient IT-user skills will be one of the key competencies in the society. Curricula must integrate IT skills at an early age. Higher levels of skills are also needed to increase the use of ICT in industry and commerce.

The security in the community is on top of the political list. The development based on ICT technologies is, hence, fundamental for the overall security of citizens. Problems in security already impose an enormous cost on industry and undermine consumer confidence in new services.

Leo Laaksonen serves as Adviser at Technology Industries of Finland, organization with a mandate to help its member companies maintain their competitiveness in international markets.

This article is published in ICT Cluster Finland Review 2005.

More information
ICT Cluster Finland Review 2005