Simplification of regulatory environments, addressing monopolies which present a barrier to new market entries, reduction of patenting costs and a mechanism for establishing standards in emerging technologies will all go a long way towards developing a market that is more conducive to technological innovation in all states.
As I stated recently, I believe that outsourcing of public sector services could significantly increase the market for such services and offer incentives to service providers to use innovation as a means of gaining competitive advantage. Leveraging of public procurement as a tool for the private sector to develop new and innovative products and services is another measure at the disposal of governments.
Just to mention two initiatives that Malta is embarking on, I would like to point out that the government has recently developed a national research and innovation strategy which will shortly be published for public consultation. This strategy includes a number of action points addressing five key areas. These are science popularisation, funding for academic postgraduate research, funding for industry research, promotion of participation in Framework Programmes and a review of public research institutions. Malta’s university has also very recently embarked on an initiative with the ultimate objective of enhancing effective co-operation between university and local industry.
However when taking such policies in a European context we must also keep in mind that given that member states differ in terms of industrial structure, economic development and levels of research, development and innovation activity, a right policy mix is required at community level. Member states must be able to continue undertaking appropriate measures at national level since measures viewed as a priority for a member state having an advanced economy may not necessarily be a priority for another with a less developed economy.
Nevertheless, it is true that the same objectives and broad action lines would apply equally to both states. It is in the level of detail and implementation methods that the differences lie.
In order to achieve the desired results I believe that detailed policy frameworks should be agreed to at community level, but still recognising the principle of subsidiarity and allowing enough latitude for member states to implement agreed actions within the context of their socio-economic realities.
At community level, initiatives could include the further promotion of public-private partnerships and clustering between universities and industry – such initiatives are relevant both for research as well as for innovation. Attention should be given equally to service providers and manufacturing firms.
Fostering entrepreneurship should also remain an important element for innovation policy. In this respect, access to finance for start-ups and young innovative enterprises is a crucial element in order to enable young entrepreneurs with innovative ideas to develop these into marketable products. Since such initiatives are very often viewed as high-risk, entrepreneurs often experience great difficulty in obtaining finance for their ventures. The European Commission’s very recent Communication on Financing SME Growth is definitely a step in the right direction.
Similarly, the recent initiative by the commission on state aid for research and innovation is most welcome. When it comes to the development of innovative products, the element of market failure may be greater than for other products or services.
The bottom line is that all EU states have to establish the right framework conditions for enterprise by improving the quality of regulation, removing unnecessary burdens and having a more functional intellectual property system, among others.
Censu Galea is Competitiveness and Communications Minister