Anania@ec. europa. eu Dr. Antonella Passani Head of Society, Innovation and Social Capital Unit T6 Ecosystems srl a. passani@t-6. it Abstract:
and investments made in Europe over the last decade. DSI aims to promote innovation and social change based on the network effect:
and the type of investments made by the European union in this field. The final part of the paper concerns DSI impact evaluation and proposes a methodological framework for assessing specific results in a qualitative and quantitative way.
These new communication technology development projects attract growing attention of governments and international funding bodies.
and DSI uses information and communication networks to do so. The idea behind it is that web platforms
The investments made by the 2 European commission since 1999 are indeed significant with the largest budgets coming from its Research Development and Innovation framework programme of activities.
and open hardware environments supporting social innovation by empowering and facilitating citizens'participation. One of the projects is responsible for the impact analysis of Digital Social Innovation impacts.
The EU development strategy on social innovation is to connect research organisations, with innovation agencies and with other types of intermediary enterprises:
or social enterprises are getting stronger. They attract growing attention, funding, and great expectations from citizens, from governments and from international funding bodies.
The analysis of the interplay between governments, NGOS, development agencies, industry and social enterprises is called multi-stakeholder analysis. It would be incorrect to see social innovation as a new or isolated concept or as a disruptive innovation.
With Digital Social Innovation (DSI) there is a new communication technology component, namely to set up Internet platforms and digital information processing tools to promote those value-generating collaborations
To quote the social economy Strasbourg Declaration of 16 january 2014:''Europe's social model needs to reinvent itself.
and the acquired technology skills create network effects impossible in a face-to-face environment. This interdisciplinary domain of activities recognise the need to go beyond technology engineering, to the social nature of progress
crowdsourcing and crowdfunding, big data visualisation and analytics, P2p production and consumption, edemocracy and eparticiaption. Crowdsourcing refers to a platform for on-line distributed problems and a network of coordinated human‘problem solvers'.
Monopoly rent or profits are based primarily on maintenance or acquisition of dominant position in established markets.
national governments and other stakeholders active in the collective awareness projects and social innovation projects. 4 OLD POWER NEW POWER Currency control,
Adaptation from Jeremy Heimans Tedsalon Talk (2014) The role of the European union In this policy context we document the investments made by the European Commission since 1999.
After a workshop on social innovation in 2009, President Barroso asked the Bureau of Economic policy Advisors to draft a report on social innovation as driver for social change,
DG Enterprise funds a social innovation platform (circa 5000 users) and organizes a competition in honour of social innovator Diogo Vasconcelos.
For example the Social Business Initiative is related a policy activity at the level of the enterprise (or firm) and market legislation:
and environmental sphere (Social Economy & Social Entrepreneurship, 2013). The Innovation Union supports social innovation,
Horizon 2020 will continue to support these social innovation measures under the heading of hubs and incubators for the Innovation Union.
CAPS are digital environments enabling and supporting social innovation, smart applications empowering and facilitating citizens participation.
and networking opportunities IA4SI: providing CAPS with an impact self-assessment methodology and related online tools SCICAFE2. 0:
The CHEST project offers €3 million in seed funding for digital social innovation ideas and prototypes.
It does so through its crowdfunding and crowdsourcing platform. It ran three open calls at European level,
the legal rights-related issues of social network such as the management of personal data and the potential economic value of users activities on social networks and the engagement and security issues of CAPS. 6 Tab. 2-CAPS ongoing project
Considering the typology of organisation engaged, 194 are social enterprises, charities or foundation, 183 are businesses,
and environment. 7 Fig. 1-Fields of activities of DSI as mapped in digitalsocial. eu (last access on November the 9th) Assessing the impacts on Digital Social Innovation initiatives According to the Naples 2. 0 Report
authors (Addario and Lane, 2014) there are two problems with evaluation and scalability comparisons: In the Innovation Society ideology, the success or failure of an innovation that is,
the profit it will generate in the marketplace. From this point of view, the projects that the innovating entrepreneur undertakes
must be driven primarily by economic value. In contrast, the social innovator's projects are driven primarily by social values,
In the Innovation Society's narrative, innovation projects scale with the profits they generate, which can be used to produce
after all, most aspects of most people's well-being, the quality of their personal lives and social interactions are determined in large part by factors specific to the environments in
The IA4SI methodological framework is based on a quali-quantitative multi-stakeholders approach, which engages projects coordinators,
they will select their stakeholders and end-users in this way describing who will benefit from the project outputs 3. Thirdly,
and human capital because its outputs and its activities are not leading to this kind of impacts. 5. At this point the SAT will show all the questions related to the impact dimensions selected by the project representatives. 6. The data inserted by CAPS representatives will be elaborated in real time by the SAT
easy-tounderstand way, project representatives will be able to visualise their impacts by comparing their performance with a set of benchmarks (Passani at al, 2014a.
a report for the use of European stakeholders, including citizens. These actions will make possible to better evaluate the investments made so far;
it will also be possible to better understand the replicability and transferability of these initiative at national and local level and in non-European countries.
but that ultimately it is stakeholder engagement that makes the difference to sustainable social innovation.
'11 Bibliography Addari, F. and Lane, D. A. 2014), Naples 2. 0 A social Innovation Competition, Report for Unicredit. available at http://socialrenaissance. it/images
. pdf Bund, W.,Hubrich, K.,Schmitz, B.,Mildenberger, G.,Krlev, G,(2013), Blueprint of social innovation metrics contributions to an understanding of opportunities and challenges
M. J.,Mcfarlan, F. W. 2011), Measuring the efficiency and effectiveness of a non profit's performance, Strategic Finance, 93/4, pp. 27-34.
Retrieved on 15th march 2014 from http://www. imanet. org/PDFS/Public/SF/2011 10/10 2011 epstein. pdf European commission,(2010), Communication from the commission to the European parliament, the council,
why it matters and how it can be accelerate, University of Oxford, Skoll centre for social entrepreneurship, Murray, R.,Caulier-Grice, J.,Mulgar, G.,(2010).
A methodology for the socioeconomic impact assessment of Software-as-a-service and Internet of Services research projects, Research Evaluation, 2014 23: 133-149 Passani A.,Spagnoli, F.,Prampolini, A.,Firus
BOOSTING EU COMPETITIVENESS IN A GLOBAL ECONOMY CEPS TASK FORCE REPORT CHAIR: MARIA ANVRET Senior Executive Scientific Expert and Advisor, Prof.
Phd, FRCPATH, Confederation of Swedish Enterprise RAPPORTEURS: MASSIMILIANO GRANIERI Assistant professor at the University of Foggia Law school ANDREA RENDA Research Fellow, CEPS TABLE OF CONTENTS Foreword...
18 1. 2. 1 The European Investment Bank...23 1. 3 Structure of the report...
65 5. 1 Standards, IPRS, and competition...69 5. 1. 1 Focus: Practices in patent pools...
85 i FOREWORD he European union is challenged in the global arena by emerging economies as well as by the US
it includes and involves stakeholders representing the many different sectors and parts in society, and often businesses coming from different regions.
This report presents a number of recommendations for actions that are needed to ensure that the EU becomes a more attractive place for investment and education and research opportunities.
It is the result of five meetings held between September 2009 and May 2010 and the participation of numerous industry stakeholders
practitioners, academics and representatives of institutions such as the European commission, the European Investment Bank and the European Patent office (see list at the T ii FOREWORD end of this report.
'but the puzzle has to be completed by involving the stakeholders and taking account of market needs
economies in terms of research, development and innovation (R&d&i. The 2009 European Innovation Scoreboard has shown positive signs in some regions,
but overall innovative investments by businesses still appear relatively weak. Importantly, highly dynamic sectors such as ICT (information communication technology) account for almost one half of EU productivity growth,
but at the same time are also the main reason for the US-EU gap. Re-launching Europe's ICT sector becomes even more crucial with the upcoming European Digital Agenda,
or 4%of GDP to the EU economy. Various reasons account for Europe's gap, certainly including the current fragmentation of the Internal Market and the absence of welldeveloped venture capital;
the overly complex governance of EU funding mechanisms, coupled with the extreme fragmentation of funding tools;
At the same time, in other sectors (e g. chemicals) the concept of‘open innovation'is permeating new business models,
a total lack of harmonisation prevents cross-border venture capital investment and the creation of funds in areas where financing for innovation is needed.
and establishing their business where opportunities are unexploited still. Finally, issues such as the Community Patent, clear rules on technology transfer and the standardisation process are essential for a functioning Internal Market. 2. The innovation challenge requires an integrated and comprehensive approach The problem to be solved (demand from the market
and society) should be the starting point for innovation policy; the scientific questions cannot be the only driver for innovation.
Demand-side measures, such as the lead market initiative and pre-commercial public procurement, are powerful tools that should be developed to create the market incentives for innovation. 3. There is a growing gap between public policy
(i e. pumping innovation into the market) to a more demand-driven approach as far as new applications
and too many instruments for funding, creating a complex environment for potential applicants. The current system lacks synchronisation and is unfit to reach small firms effectively;
As observed in other areas and debates (e g. telecoms, competition policy, financial services, etc. it would be possible to establish a centralised/coordinated policy at EU level,
market players should be involved to make sure that the demand perspective is taken adequately into account in deciding where public money should be spent
and streamline communication with stakeholders, thus avoiding the‘spontaneous disorder',in which too many funding tools appear sub-additive rather than self-reinforcing. f) Coordinating innovation and research policy with other EU policy objectives already at the budget allocation stage,
high-impact projects receive adequate funding and return innovation and growth on this investment. The European Institute of Innovation and Technology (EIT) is to be a key driver of sustainable European growth and competitiveness through the stimulation of world-leading innovations with a positive impact on economy and society.
The EIT is the first European initiative to integrate fully the three sides of the‘knowledge triangle'(higher education,
In addition to cross-border venture capital and technology transfer support via the European Investment Fund (EIF), the European Investment Bank (EIB) could consider widening the scope of applications, in particular by broadening and deepening risk-sharing operations,
i e. to include innovative services and demandside measures, such as the lead market initiative or pre-commercial procurement.
An important issue is the EIB's ability to reach dynamic and innovative small firms
and help them grow through early-stage financing. Currently the EIB finds it very challenging to reach SMES due to the large size of the total loan volume it manages compared to the relatively small number of officers in charge of their management.
On the contrary, it may discourage investment by major players. Access to CRTS does not depend on the removal of IPRS and patents.
Encourage the elimination of tariff barriers for CRTS One serious obstacle to investment by advanced companies in LDCS
and competition especially when they are picked up by the market and not imposed top-down. This calls for a pro-active standards policy only at EU level
and there is no competition between different standards. In all other cases the market should be allowed to pick up the best standard. 19.
Clearer competition rules The European commission should provide policy documents that: clarify the relationship between standard-setting organisations and intellectual property rights (IPRS;
BOOSTING EU COMPETITIVENESS IN A GLOBAL ECONOMY INTRODUCTION. TOWARDS EUROPE 2020 he word innovation lies increasingly at the core of the EU agenda.
the gap emerges in particular in the ICT and the commercial services sectors. In particular, ICT is currently the determinant of approximately one half of EU productivity increases,
TOWARDS EUROPE 2020 An important issue is the ability of the European Investment Bank (EIB) to reach dynamic and innovative small firms
in which SMES suffer from a chronic lack of support for innovative investments, in particular due to difficulties in accessing both public and private sources of funding.
Figure 4 below shows the results of a recent survey of stakeholders, in which more than 96%of the surveyed respondents considered that lack of access to finance innovation
Figure 4. Key barriers to access to finance according to stakeholders Source: http://ec. europa. eu/enterprise/policies/innovation/files/swd effectiveness. pdf A NEW APPROACH TO INNOVATION POLICY IN THE EUROPEAN UNION 15 Box 1. Key enabling
technologies On 30 september 2009, the European commission adopted a Communication on Preparing for our future: developing a common strategy for key enabling technologies in the EU (COM (2009) 512 final, 30.09.2009.
Key enabling technologies (KETS) are defined by the following features: i) they are knowledge-intensive (high R&d and capital expenditure;
and are of systemic relevance to economies. KETS are important for several reasons: They are the driving force behind the development of goods and services.
They are at the forefront of competitiveness, innovation and the EU knowledge-based economy. They modernise the industrial base and further strengthen the research base.
They create related ecosystems of SMES. Against this background, the Commission highlighted the need to develop a strategic approach for KETS,
while maintaining openness in the EU economy. Also the conclusions of the Competitiveness Council of 28 may 2009 welcomed the Commission's initiative to develop a proactive policy for enabling high-technologies.
Specifically, the Communication tries to identify the KETS that strengthen the EU's industrial and innovation capacity to address the societal challenges ahead,
The following five KETS have been identified in the 2009 Communication. Nano-technology holds the promise of leading to the development of smart nano-and micro-devices and systems and to radical breakthroughs in vital fields such as health care, energy, environment and manufacturing.
Micro-and nano-electronics, including semiconductors, are essential for all goods and services that need intelligent control in sectors as diverse as automotive and transportation, aeronautics and space.
Smart industrial control systems permit more efficient management of electricity generation, storage, transport and consumption through intelligent electrical grids and devices.
increasing venture capital, increasing the availability of skilled labour and enhancing international cooperation. In more in detail, short-term solutions include better application of existing state aid rules, a level international playing field and improved access to finance.
various preparatory policy documents, communications and staff working documents in particular, the Communication Reviewing Community innovation policy in a changing world;
and services where innovation is needed both and possible and where the use of the above-mentioned instruments influencing the capacity to put new products on the market rapidly in a more focused way can make a real difference (bio-based products,
and services that create growth and jobs. Within this context emerging initiatives include actions to strengthen EU instruments to support innovation (including through closer collaboration with the EIB;
and to promote entrepreneurship by supporting young innovative companies. The new flagship initiative also deals with multilevel governance
for example the US and Japan in terms of investment in R&d&i. Public funds at EU level are available.
A NEW APPROACH TO INNOVATION POLICY IN THE EUROPEAN UNION 23 1. 2. 1 The European Investment Bank The European Investment Bank Group already leverages EU budgetary funds in support
of R&d&i investment. In addition to cross-border venture capital and technology transfer support via the European Investment Fund (EIF),
the EIB could consider widening the scope of applications, in particular by broadening and deepening risk-sharing operations,
to include for instance innovative services and demand-side measures, such as the Lead Market Initiative or‘pre-commercial procurement'.
'5 Figure 8 below summarises the different sources of EU funding available by differentiating between the different phases of growth of a firm.
IP financing, technology transfer, seed financing, investment readiness Target group: VC Funds, business angels EIF product:
financing SMES/Midcaps, banks, PE investors (sub-investment grade) Loans (incl. Mezzanine), funded risk-sharing facilities with banks (investors) 4 Investment lloans Investment lloans RDI financing Midcaps/Large corporates/public sector entities (investment
grade) Loans, guarantees Later Stage Counterparts Source: Presentation by Harald Gruber at the CEPS Task force. 5‘Pre-commercial procurement'describes an approach to procuring R&d services other than those where the benefits accrue exclusively to the contracting authority for its use in the conduct of its own affairs,
on condition that the service provided is remunerated wholly by the contracting authority. See the Commission Communication Pre-commercial procurement:
Driving innovation to ensure sustainable high quality public services in Europe, COM (2007) 799 final, 14.12.2007.24 INTRODUCTION.
1. Highly attractive terms and conditions (AAA rating and non-for-profit pricing) 2. Long maturities of up to 10 years or more 3. Direct EIB participation of up to
such as senior investment loans. RSFF instead is used to fuel innovation by sub-investmentgrade rated firms (Moody's BBB-or less),
The EIB chooses firms based on projects that appear mature enough to demonstrate the capacity to repay debt on the basis of a credible business plan.
'Available data testify to a European‘lag'vis-à-vis the United states, Asia and several emerging economies in terms of research, development and innovation (R&d&i.
but overall innovative investments by businesses still appear to be relatively weak, especially if compared to the US
The first conclusion reached is that any solution must be developed with due attention to the changing global environment of innovation.
Second, as stated, there is an increased desire to have R&d closer to customers in foreign markets.
Available data 6 See European Innovation Scoreboard 2009 at http://ec. europa. eu/enterprise/newsroom/cf/document. cfm?
With respect to the EU, US and Japan, the US appears to be a major destination and the EU a major source of R&d investments.
US firms seem to be more active than EU firms. o Inventive collaboration in ICT R&d with Asian economies is still relatively low,
including, most notably, the services sector. Financial markets are fragmented and the level of regulation (e g. taxation) varies across countries.
a total lack of harmonisation prevents cross-border venture capital investment and the creation of funds in areas where financing for innovation is needed.
and establishing their business where opportunities are unexploited still. This calls for urgent action at the EU level to ensure that the free movement of capital
and services is achieved finally. A NEW APPROACH TO INNOVATION POLICY IN THE EUROPEAN UNION 31 The concept of‘open innovation'permeates most of the recent policy discussions at international level.
As recently reported also by the OECD, the organisation of innovative activities (technological as well as non-technological) across firm boundaries is clearly on the increase, with more balance between internal and external sources of innovation...
Industries such as chemicals, pharmaceuticals and information and communication technology (ICT) typically show high levels of open innovation. 7 Open innovation implies, inter alia, the use of internal and external R&d sources;
openness to external business models, a variety of IP generators and collaborations (SMES, academics, etc. and a proactive IP asset management.
demand-driven The problem to be solved (demand from the market and society) should be the starting point for innovation policy;
At the same time, both the supply and the demand for innovation should lie at the heart of EU policy-making.
Demand-side measures, such as the Lead Market Initiative and precommercial public procurement are powerful tools that should be developed to create the market incentives for innovation.
(i e. pumping innovation into the market) to a more demand-driven approach as far as new applications
From a demand-side perspective: Public-private partnership schemes (PPPS) should be extended and promoted as the governing principle in all cases in
In designing and shaping the new Framework Programme (FP8) market players should be involved to make sure that the demand perspective is taken adequately into account in deciding where public money should be spent
There is a general need to expand private investment and public financial support, and the amount of risk capital from different 34 A NEW APPROACH TO INNOVATION POLICY IN THE EU sources;
In addition, we must expand the public EU and member state and private capital to innovation by:
o Establishing an integrated venture capital market in Europe o Expanding the permanent risk-sharing products of EIB o Developing tax incentives to support investments in R&d and innovation, especially for young innovative companies.
The European Institute of Innovation and Technology (EIT) is to be a key driver of sustainable European growth and competitiveness through the stimulation of world-leading innovations with a positive impact on economy and society.
o Addressing major challenges and opportunities; o Creating, capturing and transferring breakthroughs into business opportunities;
o Forming effective governance, leadership and networks; o Exchanging and coordinating research and incubating efforts;
In addition to cross-border venture capital and technology transfer support via the European Investment Fund (EIF), the European Investment Bank (EIB) could consider widening the scope of applications, in particular by A NEW APPROACH TO INNOVATION POLICY IN THE EUROPEAN UNION 35 broadening and deepening risk-sharing operations,
to include, for instance, innovative services and demand side measures, such as the lead market initiative or pre-commercial procurement.
An important issue is the EIB's ability to reach dynamic and innovative small firms
and help them grow through early-stage financing. Currently the EIB finds it very challenging to also reach SMES due to the large size of the total loan volume it manages compared to the relatively small number of officers in charge of their management.
and streamline communication with stakeholders, thus avoiding the current‘spontaneous disorder',in which too many funding tools appear sub-additive rather than self-reinforcing.
As observed in other areas and debates (e g. telecoms, competition policy, financial services, etc. it would be possible to establish a centralized/coordinated policy at EU level (see also point above),
For example, there has been a lively debate over Europe's huge investment in the ITER project,
European firms have the opportunity to compete over an internal market with no internal barriers,
the European patent can be granted to up to 37 contracting states. 15 The European parliament of Enterprises (Eurochambres) debated
while improving the existing systems was declared by the Commission in its Communication More Research and Innovation Investing for Growth and Employment:
The failure to adopt one single language for patents implies the need to use translation services
and to investments in research by 20 Two cases are taken often as an example of inconsistent results:
since the patentee can use them anyhow to exclude competitors and stifle genuine competition until someone,
The Proper Balance Of Competition And Patent Law And Policy, 2003 available at http://www. ftc. gov/os/2003/10/innovationrpt. pdf. Presentations by Bruno van Pottelsberghe
Yet, the internet economy, globalisation and industrial cycles have been producing a growing number of patent applications.
Helping business compete in the global economy, 2008, p. 25.24 Data are available in the Communication from the Commission to the European parliament
and the Council Enhancing the patent system in Europe, COM (2007) 165 def, p. 7. A NEW APPROACH TO INNOVATION POLICY IN THE EUROPEAN UNION 47 case of SMES.
47 Journal of Law and Economics 45 74 (2004), have demonstrated that individuals and small firms in the US can be at a significant disadvantage in protecting their patent rights because of the small size of their portfolios. 48 PATENT LAW
though, additional problems would have to be tackled, such as competition between NPOS, which may translate into a‘race to the bottom';
and economics literature has explained that costs related to patent protection trigger a comparison with alternative forms of protection,
including i) the level of jurisdiction (and competence for each Economics of Trade secret Law, in 5 Journal of Economic Perspectives 61-72 (1991;
and the metrics for statistical services. 30 ii. The adoption of a‘Raising the Bar'initiative,
Both areas of technology transfer also relate to the impact of public investment into research and, more closely,
which can complete the transformation of Europe from the old economy to the new, innovation-based economy, with value-added, intellectual capital intensive activities.
One major goal of any policy on innovation should be to pay more attention to the return on investment for public money devoted to research.
and calls into question contractual forms or venture partnering, whereas transfer of knowledge also means skills, mobility of researchers, incentives for talent.
The adoption of the green economy as a new paradigm for a fresh start in environmentcompliant entrepreneurial activities has seen recently a growing interest in fostering an economic development based on eco-efficient technologies, not just in terms of cost-effective, friendly solutions,
the transfer of technology in this field is about ensuring appropriate returns on investments. At the outset, the definition of CRTS is necessary to identify those technologies
and fields of research that are need in of financial support because of their expected ability to produce the kind of economic results that fit the green economy standard of environmentally-friendly innovation.
Thus, LDCS are seen as an opportunity to delocalise manufacturing activities in the first place, but also research and development in the case of the presence of skilled and qualified workforces.
since large investments are required along the value chain. Yet, the role of IP protection should be emphasised,
LDCS have need a great to access CRTS for the production of energy in a way that does not compromise environment equilibrium,
A Law and Economics Primer, available at http://www. earthinstitute. columbia. edu/cgsd/documents/lewisreichman. pdf (last visit April 18,
of which is that actions also on the demand side of technology are required and, to a more general level,
At the same time, though, compulsory licensing brings about negative incentives on R&d investments and business development since returns for technology producers become shaky. 35 The idea was developed first by Cohen and Levinthal (1990),
In this respect, intellectual property rights are still one of the determinants of foreign direct investments (FDI)
Notably, a failure to protect R&d investments abroad due to opportunistic behaviours of competing MNCS or other foreign institutions would result in harm to LDCS,
since in the long run FDIS will be redirected towards those countries that ensure higher standards of protection for R&d investments.
Indeed, a study of the Vattenfall Institute and Mckinsey highlights the fact that many low-cost technologies are available to reduce CO2 emissions that could be used eventually also by LDCS. 37 36 Copenhagen Economics
Copenhagen, 2009.37 See Vattenfall Institute and Mckinsey, Global cost curve of GHG abatement opportunities beyond business as usual by 2030,2007.
and autochthon entrepreneurship that should be fostered by cooperation with technology owners. Coupled with the need for an increased absorptive capacity, local development is only possible through cooperation between transferor and transferee.
demonstrated the clear benefits of standards and standardisation to the wider economy. Standards may play a role in facilitating the sharing of common technological solutions,
These requirements are complemented sometimes by a description of the process, products or services. The process of formulating
At the same time, standards can have both positive and negative effects on competition, and this inevitably warrants a case-by-case approach.
Enabling small and medium-sized enterprises to achieve greater benefit from standards and from involvement in standardisation, Rotterdam School of management, Erasmus University, at http://www. ecap-sme. org/documenti/primapagina
stronger interaction of European Standardisation Bodies with fora and consortia, researchers and industry stakeholders; and more coordination between the European Standardisation System and global standards. 42 In addition to the recommendations of the EXPRESS group (and those that will come from an upcoming study on IPR and standardisation),
Also NORMAPME (European Office of Crafts, Trades and Small and Medium sized Enterprises for Standardisation) reported that finding information about standards including
http://ec. europa. eu/enterprise/policies/european-standards/files/express/exp 384 express report final distrib en. pdf. The Expert Panel for the Review of the European Standardisation System (EXPRESS) comprised 30 individual
Section 5. 1 below explores the issue of industry standards, IPRS and competition. Section 5. 2 deals with European Standardisation bodies.
and competition In certain sectors, one of the issues that affects the development of certain types of standards
and their impact on competition and competitiveness is the interface between IPRS and standards. The European commission has recalled on several occasions that misuse of IPRS in the standardisation process can significantly affect access by industry players to relevant markets.
former Commissioner for Competition (and current Commissioner for the Digital Agenda) Neelie Kroes stated recently that:
competition and innovation is a very complex exercise. On the one hand, as shown in Figure 15 below,
The overall impact 70 STANDARDS AND STANDARDISATION POLICY IN EUROPE on competition is positive whenever the standard fosters aggressive downstream competition
when chosen too early, standards can limit product variety by stimulating‘intra-standard'competition in markets where‘inter-standard'competition could have led to better competitive outcomes and faster innovation to the benefit of end consumers
especially if the pace of innovation in the sector at hand does not lead to overlapping generations of products and consequently to a genuine‘competition for the market'.
The ultimate impact of the standard-setting process on competition and innovation depends on the relative weight of those costs and benefits.
In terms of development, standards should ideally be developed by all affected stakeholders. They also need to be based on a solid consensus:
Examination of the selected technologies for which patent protection is requested demands very sophisticated standard setting processes and complex interfaces between standards-developing organisations (SDOS) and patent offices. 5. 1. 1 Focus:
according to economic theory, may be expected to be lower than the cost of separately negotiated licenses); They can clear blocking patents that would
who may end up stifling competition within the pool. In addition, the success of technology innovation may be linked to the capability to interoperate, hence to the success of the standards,
When potential problems are solved effectively in terms of governance and competition, patent pools can have a pro-competitive effect, lowering prices,
which is on the way to becoming Next Generation Standard for mobile broadband communications 45 mobile operators worldwide have announced already that they will adopt it.
which is likely to include a Communication, a legislation proposal for the reform of the European Standardisation System;
This will be a key opportunity to provide guidance on the practices that are likely to minimize the anti-competitive impacts of standard-setting activities.
o Emphasise the general benefits of standards (for companies, national competition authorities and judges; o Provide guidance on the relationship between standards and IPRS (also other than patents.
standard by its very nature limits technical competition o Ex-Ante Disclosure of Maximum Royalty Rates is far more controversial,
AND STANDARDISATION POLICY IN EUROPE‘early'contributors over‘late'contributors since early contributors declare their IPRS at a time where there is less competition. o The ex ante disclosure of most restrictive licensing terms is recommended also not,
and comments on their likely impact in terms of competition and innovation. A NEW APPROACH TO INNOVATION POLICY IN THE EUROPEAN UNION 79 Table 2. IPR Disclosure rules and potential impact Rule Licensor member promises Comment Disclosure I have some patents
Common in open source IP environments. No financial compensation for technology providers. F) RAND Once the standard is set,
Standards contribute positively to growth and competition, especially when they are picked up by the market
and there is no competition between different standards. In all other cases, the market should be allowed to pick the best standard,
Competition rules should provide general guidance. In particular, the upcoming new guidelines on horizontal agreements which will focus in particular on R&d agreements,
Committee for Electro-technical Standardisation) CRT Climate-Related Technology DG Directorate General (of the European commission) DG ENTR Directorate General for Enterprise and Industry DG RTD
Directorate General for Research EIB European Investment Bank EIT European Institute of Innovation and Technology EOTA European Organisation for Technical Approvals EPLA European Patent
ETSI European Telecommunications Standards Institute ICT Information and Communication Technologies IP5 The five major intellectual property offices:
Copenhagen Economics and The IPR Company (2009), Are IPR a Barrier to the Transfer of Climate Change Technology?
Enabling small and medium-sized enterprises to achieve greater benefit from standards and from involvement in standardisation, Rotterdam School of management, Erasmus University, 2009 (http://www. ecap-sme. org/documenti
/primapagina/stampa/SME%20access%20report%20200 9-08-21. pdf). European commission (2005), Communication More Research and Innovation Investing for Growth and Employment:
A Common Approach, COM (2005) 448 final, 12 october, p. 7. European commission (2009), Communication Preparing for our future:
European commission (2009), Communication Reviewing Community innovation policy in a changing world, COM (2009) 442 final, 2 september.
European commission (2009), European Innovation Scoreboard 2009 (http://ec. europa. eu/enterprise/newsroom/cf/document. cfm?
a vision for 2020, Report of the Expert Panel for the Review of the European Standardisation System, exp384, February (http://ec. europa. eu/enterprise/policies/european-standards/files/express
/exp 384 express report final distrib en. pdf). Friedman, D d.,W. M. Landes and R. A. Posner (1991), Some Economics of Trade secret Law, Journal of Economic Perspectives, Vol. 5, pp
Journal of Law and Economics, Vol. 47, pp. 45-74. Lewis, T. and J. H. Reichman (2003), Using Liability Rules to Stimulate Local Innovations in Developing Countries:
A Law and Economics Primer,(http://www. earthinstitute. columbia. edu/cgsd/documents/lewisrei chman. pdf). Ordover, J. A. 1991), A Patent system for Both Diffusion
Vattenfall Institute and Mckinsey (2007), Global cost curve of GHG abatement opportunities beyond business as usual by 2030.85 LIST OF TASK FORCE PARTICIPANTS, SPEAKERS AND INVITED GUESTS Chair:
Principal Economist DG ENTRE European commission hasan. alkas@ec. europa. eu Mr. Emmanuel Bentejac Veolia Environment emmanuel. bentejac@veolia. com Mr
Electricity and Semiconductor Technology European Patent office Mr. Harald Gruber Head of Division European Investment Bank-EIB H. gruber@eib. org Mr. André
Hagehülsmann Innovation Manager Europe Microsoft andrehag@microsoft. com Mr. Jacques Hayward Special Advisor Veolia Environment jacques. hayward@veolia. com Mr
R&d and Chair Glaxosmithkline jacqueline. hunter@gsk. com Mr. Michael Jacob Head of Section Ministry of Enterprise, Energy & Communications michael. jacob@enterprise. ministry
Ms. Lotta Liljelund Head of Section Division Research, Innovation & Industry Ministry of Enterprise, Energy and Communications, Sweden A NEW APPROACH TO INNOVATION POLICY IN THE EUROPEAN UNION 87
. Per Tervahauta Counsellor for Industrial Affairs Permanent Representation of Sweden to the EU per. tervahauta@foreign. ministry. se Mr. Kristian Uppenberg Senior Economist European Investment Bank
Senior Fellow Economics & Management of Innovation ULB and Bruegel bruno. vanpottelsberghe@ulb. ac. be Mrs. Renate Weissenhorn Head of Unit DG ENTR European commission renate
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