EU still falls behind US technology innovations

The European Union's lack of technological innovation and urgency in bringing cutting-edge technologies to market is causing the EU to lag behind the U.S. in competitiveness and living standards, the European Commission (EC) said in its annual report on competitiveness, enterprise policy and innovation.

"For most sectors, R&D (research and development) intensity is higher in the U.S. than in the EU. Most strikingly, in office machinery and computers, research intensity in the U.S. is three times greater than in the EU," said Erkki Liikanen, Commissioner for Enterprise and the Information Society in a speech in Brussels Thursday.

Technology-driven industries have become a key aspect in driving productivity increases in the U.S. and only more recently in the EU, Liikanen said.

One way of tracking the health of the IT industry in a given country is to measure the nation's success in international markets, and Liikanen pointed out that when it comes to high-tech products -- including products from aerospace, information and communications technology (ICT) and pharmaceuticals technology sectors -- the EU's total exports are only about two thirds of the corresponding U.S. share.

Of all of the countries that make up the EU, only Ireland performed better than the U.S., Liikanen said. Although almost all EU member states were able to increase the share of high-tech products in their total exports between 1999 and 2000, "the differences relative to the U.S. and Japan remain substantial," Liikanen said.

"This gap underlines the need for continued and increased efforts to restructure, innovate and adapt new technologies. Behind the successful and innovative companies are always people with ideas and a willingness to take risks," Liikanen said.

For Europe to compete successfully against the U.S. and Japan, member states must refocus their joint agendas and sign on to what Liikanen called the eEurope Action Plan. The plan includes better broadband access for consumers, releasing the entrepreneurial potential in the EU and reinforcing innovation with open, competitive markets and an aggressive R&D program, Liikanen said.

In taking a stronger hand to promote the eEurope Action Plan, the EU is ready to take legal action against member states whose former telecommunication monopolies have failed to open the local loop to competition, thereby slowing the growth of broadband access and services, Liikanen said.

"In bad times, short-term issues often come to dominate the policy agenda. However, neglecting our long-term priorities in the present economic slowdown would be a serious mistake. Only a dynamic and competitive enterprise sector can pull our economies into a new upturn," Liikanen said.

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