in content lists or on the content page.Six years ago, the European Union set the ambitious goal of developing into the world’s most 
competitive and dynamic area by 2010. Despite promises and declarations, the implementation of the Lisbon Strategy has barely advanced. In the fields of science, technology and innovation, European competitiveness in relation to elsewhere in the world is fading rather than strengthening.
In January, I led a four-member group of experts, who presented their own view of how this trend could be reversed.
In our presentation, we paid attention to demand rather than supply: how to create a well-functioning European market for innovative products and services. In many areas, the research and development investments of European companies are being directed outside the European Union, as the home market is not working.
Another major challenge is to transfer resources from old structures to the knowledge and competence-based economy. In many fields, the technological solutions required for reform are available, but inflexible organisations or out-of-date operating models are preventing their efficient exploitation.
Our working group proposes a Pact for Research and Innovation, which would gather together all the key measures, which are needed to create the market, increase financial resources and promote the transfer of resources. A model for this could be the internal market programme of the late 1980s, the implementation of which was a wonderful example of the EU’s ability to concentrate on the big picture and get the Member States to approve decisions that were hard but important for the future.
Finland’s own experiences back up the operating model that we are proposing. We began the systematic increase of R&D funding back in the early 1980s, but this alone would not have allowed us to become a small but significant technological force in the global economy. We also needed to create a market, which was based on domestic needs, but received a boost through European integration. A decisive stage was experienced during the economic crisis of the early 1990s.
This forced both the private and public sectors to mobilise, and to rapidly shift their resources from the old to the new. When, at the same time, more favourable attitudes developed towards entrepreneurship and risk-taking, the road ahead opened up.
If the strong commitment that we are proposing can be achieved, this should be immediately visible in the practical operations in some key areas. As such strategic areas, we proposed eHealth, pharmaceuticals, energy, environment, security, transport and logistics and digital content. In Europe, all these fields face both threats and opportunities, to which Member States cannot respond solely by themselves, but also need European co-operation.
The problem is that time is running out. If we are unable to reverse this trend, more and more European companies will have to seek solutions to ensure global competitiveness by investing in R&D work outside Europe. Individual Member States too will have to seek alternative ways to ensure their own competitiveness.
Globalising companies can survive without Europe, but Europe cannot survive without them. Similarly, it is impossible to imagine a strong European Union unless it is strong and competitive in all vitally important fields both now and in the future.
Therefore we must act ‘before it is too late’.
Esko Aho
You can send comments and feedback to the writer via Sitra’s communications by e-mail, toimitus@sitra.fi