Analyses of why Europe is lacking behind in creating value from ICT research.

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ROI of European Projects –
From Research to Innovation
A mixture of facts, policies and personal experience in ICT
Richard Benjamins
Director User Modelling
Telefonica R&D
July 2011
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A brief personal history,
partly with Rudi Studer –
knowledge research in
Europe
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Mid nineties – Applications
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Mid nineties – Applications
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Late nineties – Communities
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So I moved to industry in 2000 – technology
transfer
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That made me start thinking
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Let me check …
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A story of European ICT R&D
“Easy to say”
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The Lisbon Council 2000: High Ambitions
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The Union has today
set itself a new
strategic goal for the
next decade: to
become (2010) the
most competitive and
dynamic knowledge-
based economy in
the world …

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The Barcelona European Council 2002: on
track?
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Many Europeans like to think of their
continent as a global economic
superpower. But when compared to the
US over the last decade or so, Europe
looks like a laggard.
Even when European businesses do
create new products, the dismal failure
of the EU to launch the Community
patent on schedule potentially
jeopardises intellectual property rights.
The process of starting a new business
in the EU is slow and expensive. Once
established, European businesses face
a daunting burden of red tape

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Did Europe achieve its objectives in 2010
…?
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But EU doesn’t give up: high ambitions for
2020
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The Commission is putting forward seven
flagship initiatives to catalyse progress under
each priority theme
"Innovation Union" to improve framework
conditions and access to finance for
research and innovation so as to ensure that
innovative ideas can be turned into products
and services that create growth and jobs
Horizon 2020. The new name for the future
EU funding programme for research and
innovation

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Research and Innovation
statistics
World – EU – Spain -
Germany
“Hard to do”
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ICT matters in EU R&D business
expenditure
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Though EU is under-spending compared to
ROW
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And US is more active in patent generation
in ICT than EU
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And Spain has lowest number of patents in
ICT
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Number of researchers by world region
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Number of researchers per EU country
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In 2008, 130.000 (OECD 2019)

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Publications by region
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Publications per country
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GERD, Gov-financed GERD and BERD
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Global expenditure R&D
Gov expenditure
Business expenditure

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Business R&D expenditure on ICT in EU
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Global venture capital activity
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Venture Capital in EU
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Science and innovation profile of Spain
2008
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OECD 2008

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Germany on its way to 3% investment in
R&D, above EU average (not only ICT)
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Germany, overall, has healthy KPIs
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And Rudi’s institute is among the top5 in
Germany in FP7
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And Telefonica in Spain as well
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Why is it so hard for Europe to
innovate?
A personal interpretation
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Innovation is more than research (R) and
(&) more than development (D)
=+
A process to make it
profitable
A good idea
(invention) INNOVATION
…IMPROVED
CUSTOMER
SATISFACTIO
N
NEW INCOMES
REDUCED COSTS
Social benefits

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But innovation is not easy
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Europe and US face problems in different
phases of innovation process
Situation in US Situation in EU
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Different philosophies to R&D and
innovation
US
100% funding of R&D
IPR retained by organisation,
but free, eternal license to
USA government
Focus is on the research
• Stimulate use
Success = market activity 
increased productivity and
competitiveness
EU
50% funding (75% since
FP7)
IPR retained by
organisations
Large focus on justifying
spent to EC
• Avoid abuse
Success = a new R&D
project  no increased
productivity and
competitiveness35

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Funding the best project versus the right
project
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Why is Europe not producing more ICT
product companies?
Nr of researchers is OK
Nr of publications is
excellent
Nr of patents is lower
than in US
Venture capital activity is
lower than in US
A cultural aspect?
•Research is cool,
marketing is not done
•We invent and publish, no
patents please, all open
source
•We don’t like risks
An educational
challenge?
•EU engineers do not learn
business aspects while at
university
•They focus on the
technology, not on the
customer
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Is SAP the only large one?

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Technology Transfer: a typical problem for
EU and National States R&D projects
Framework
Programmes include an
obligatory exploitation
work stream
•Has usually less than
10% of effort
•Often considered as a
necessary evil
•No follow up after project
end
In FP6, EC recognised
this fact and created a
program to fund
projects to bring result
to market
•But funded only 10% of
costs
In FP7, EC created
Competitiveness and
Innovation (CIP)
Programme
•Up to 50% of costs
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EU and national states R&D projects:
their strengths and weaknesses
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• Create European people infrastructure to
perform research at the EU level
• R&D jobs in research organizations and
companies
• Defining new R&D projects
Strengths
• No systematic technology transfer from
research to the market
• Low number of ICT product start-ups
• Low contribution to competitiveness of
EU in ICT product business
Weaknesses

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An illustration from Spain
The right climate to start high tech
companies?Question to Spanish parents: What would you like your
child to become
•1. Civil servant
•2. Work at Telefonica
Question to young people becoming active on labour
market: Where would you like to work?
•1. Public Administration
•2. Telefonica
Spain is wary of risks
Failure doesn’t look good on your CV
Spanish labour market is very closed
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How to innovate then in
Europe?
Guidelines
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Build the links between academic and
commercial world
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Innovation has changed in the last 20 years
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Long processes (time to
market)
Evolve from a waterfall model
to an agile development
(permanent beta )
Researchers and developers
do not connect with customers
(new technologies finding a
problem to be solved)
Co-creation with customers
(needs to be satisfied);
trendspotting, user labs, living
labs; solutions to be loved
Researchers and developers
are not familiar with marketing
processes and strategies
From technology-driven to
commercial –driven innovation
Closed internal process Open innovation
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3
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Weak IPR policies 5
Include IPR subjects as an
essential part of internal
research

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5 focus areas
Technological difference – check before starting research
Endorsed innovation – find early on business champions
Market competition – constantly monitor market developments
Partner for industrialization – reaching large markets becomes easier
Licensing the technology
• Requires an IPR policy
• Forces one to be competitive
• Enables tracking of results
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Thank you for
your attention
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