Professor Ron Johnston Australian Centre for Innovation Faculty of Engineering, University of Sydney Warren Centre Major Projects Committee 14 March 2007 Building the Infrastructure for an Innovative Knowledge Economy –European Experience

15 years old; non-profit but very commercial Mission – to assist organisations to better address the challenges of the future through innovation M

The European Challenge “Europe must break out of structures and expectations established in the post-WW2 era which leave it today living a moderately comfortable life on slowly declining capital…unsustainable in the face of rising competition from other parts of the world” “Europe must break out of structures and expectations established in the post-WW2 era which leave it today living a moderately comfortable life on slowly declining capital…unsustainable in the face of rising competition from other parts of the world” (Aho Report, p.1) (Aho Report, p.1)

AND “In the context of the Lisbon Strategy and the shift to a knowledge-based economy, Europe needs to ensure an attractive business environment for the development of key technology areas and markets where it should aim at achieving world-leading competitive advantage.” (DG-RTD) “In the context of the Lisbon Strategy and the shift to a knowledge-based economy, Europe needs to ensure an attractive business environment for the development of key technology areas and markets where it should aim at achieving world-leading competitive advantage.” (DG-RTD)

The Response Building the NEW Infrastructure 1. Strategic Intelligence 2. Demand-side policies to create opportunities for innovation 3. User-led manufacturing

Strategic Intelligence – a capacity to address the future Through Databases of foresight and forecasting Databases of foresight and forecasting Futurewatch/ over-the-horizon scanning Futurewatch/ over-the-horizon scanning Analyses of emerging technologies Analyses of emerging technologies Capacity building Capacity building Focussed R&D – FP7 €52 billion Focussed R&D – FP7 €52 billion Multiple applications Multiple applications

Demand-side policies – the rationale The primary target should be new and emerging markets for knowledge-intensive goods and services with a high growth potential, which require intensification of R&D efforts and where public authorities can play a critical role on the demand side.” (DG-RTD)

ExamplesPast InternetInternet Key platform technologies underpinning Nokia and Philips productsKey platform technologies underpinning Nokia and Philips products Aerospace and high-speed trainsAerospace and high-speed trainsFuture E-healthE-health PharmaceuticalsPharmaceuticals EnergyEnergy EnvironmentEnvironment Transport/logisticsTransport/logistics SecuritySecurity Digital contentDigital content (Aho Report)

Public Procurement Innovation in procurement processes Innovation in procurement processes Procurement from the market of innovative goods/ services Procurement from the market of innovative goods/ services Procurement of ‘prospective’ goods/services Procurement of ‘prospective’ goods/services Innovation in identification of procurement needs Innovation in identification of procurement needs

Characteristics of Lead Markets High per capita income High per capita income Quality and quantity of demand Quality and quantity of demand Good framework conditions for learning and innovation Good framework conditions for learning and innovation Pioneering, demanding regulations Pioneering, demanding regulations Competence in entire value chain Competence in entire value chain Image Image Clear major problems/challenges Clear major problems/challenges (Meyer-Kramer, 2004)

Opportunities? A better strategic intelligence capability will assist in identifying new business opportunities A better strategic intelligence capability will assist in identifying new business opportunities Demand-side policies will create a landscape for new business ventures Demand-side policies will create a landscape for new business ventures User-centred innovation has application in all industries, and challenges lowest- cost models User-centred innovation has application in all industries, and challenges lowest- cost models