Abstract Throughout history innovations has come to change society and peoples life conditions. Inventions can be dived into four different categories of inventions – physical, digital, processes and service. There are inventions that are a mix or cross-over between the four different types of inventions. I give comments on how Horizon 2020, EIN, EBN and the Commissions innovation indicators will benefit by adopting all these types of innovations equally.

1. Jan Softa CEO at somerco.com
Date: 2013-09-01
Enhance EC member states competitiveness in R &D
Part 7: Different types of innovations
Abstract
Throughout history innovations has come to change society and peoples life conditions. Inventions can be dived
into four different categories of inventions – physical, digital, processes and service. There are inventions that
are a mix or cross-over between the four different types of inventions. I give comments on how Horizon 2020,
EIN, EBN and the Commissions innovation indicators will benefit by adopting all these types of innovations
equally.
Background
Helping geniuses! Our slogan sums up who Somerco aims to help. Somerco are a company
that target to help researchers and innovators so that these geniuses can create prosperity and
jobs in society. In this discussion draft, I present how Horizon 2020, EIN, EBN and the
Commissions innovation indicators will benefit by adopting all these types of innovations
equally.
Introduction
Throughout history innovations has come to change society and peoples life conditions.
Innovations in agriculture as the steel plough has changed how man harvest crops, in
medicine we have invented vaccines that has extinct deadly deceases like the plague and
more lately web shops on Internet has changed the way we do business and buy products. For
centuries, new innovative industry process has enabled us to get access to products that once
were for the very few to be everyman’s commodity. It is also important to acknowledge the
importance of how new innovative services has changed our lives. Examples of innovative
services are insurances for animals and cars and when Xerox made it possible for companies
in the 70s to get access to quality printers by introducing a lease option instead of buying
their printers. These examples can be dived into four different categories of inventions –
physical, digital, processes and service. There are inventions that are a mix or cross-over
between the four different types of inventions. I give examples on this in physical inventions
when it concern nanotechnology but also on other places. I will discuss how Horizon 2000,
EIP, EBN and the Commission innovation indicator can help to offer customers new
innovative products and services.
How are innovations accepted?
Historically, innovative physical products have been accepted as a significant breakthrough
on the market by industry, people and governmental organizations. The engines of cars are
one example and a recent example are when Nintendo in 2006 had invented a video game
you control with a magic wand.1 Yet today innovative physical products have this
acceptance.
Digital products have been around the shortest time, but its innovations have become
accepted as breakthroughs by all sectors of society. The first digital products made it possible
to digitally programme machines to carry out commands, which was a shift from when it had
to be carried out by power cables and mechanics. Later there was the introduction of the
1
Best inventions of 2006. http://content.time.com/time/specials/packages/0,28757,1939342,00.html

2. Jan Softa CEO at somerco.com
Date: 2013-09-01
Internet which is the foundation for information society. Youtube who is a part of the
information society was nominated as the most innovative product when it was released in
the 2000s.
Innovative industry processes that radically improve or enable new products to enter the
market often gain acceptance by industry. That counts for both physical and digital industry
processes. In physics, it was considered a breakthrough when it was possible to control
fission energy. The innovative process for stabilizing fission was later used in nuclear
reactors. An example on an innovation in digital processes is the introduction of developing
software in the cloud. It is has been accepted and frequently used by the software industry.
I believe new innovative services are just as important when it concern how competitive
companies can be in all industry sectors. When it concern new innovative services it is rare
that these receive funding from funding programs. It could be because their inventions are not
possible to feel or see, but entirely based on an idea. Often new start-up companies who have
an innovative idea are not receiving capital from funding programs and have to turn to the
capital market to seek finance. However, often innovative services get accepted by industry,
but people normally do not think of them as innovative.
Examples
Below I discuss examples on the four different types of invention with examples on crossovers.
Physical inventions
By physical inventions I do not limit it to physical science inventions. It is an invention with
a material you can feel or touch. The most known inventions are the physical like the light
bulb, the screw and the band-aid. The story behind the band-aid is that Earle Dickson was
employed as a cotton buyer for the Johnson & Johnson when he invented the band-aid in
1921. His wife Josephine Dickson was always cutting her fingers in the kitchen while
preparing food. Earle Dickson took a piece of gauze and attached it to the center of a piece of
tape, and then covered the product with crinoline to keep it sterile. His boss, James Johnson,
saw Earle Dickson's invention and decided to manufacture band-aids to the public and make
Earle Dickson vice-president of Johnson& Johnson.2 More recently, we have got more and
more examples of high-tech physical inventions such as microchips based on
nanotechnology. For instance, Canadian researchers have developed a prototype microchip
that could one day lead to a portable device for diagnosing cancer in 30 minutes. The chip
uses nanotechnology — wires and materials on the scale of a billionth of a metre —to detect
chemical markers that indicate the presence of cancer, as well as the cancer's type and
severity.3
Digital inventions
There are plenty of examples on digital inventions. Some of these are entirely new
inventions. The digitalization has also meant that old products have become re-invented and
easier to use. An example is the camera that no longer needs to be constricted to the capacity
of a film role. Now it is the memory card that gives the photographer the opportunity to take
2
History of the Band-Aid. http://inventors.about.com/od/bstartinventions/a/bandaid.htm
Microchip uses nanotechnology to detect cancer. http://www.cbc.ca/news/technology/microchip-usesnanotechnology-to-detect-cancer-1.807521
3

3. Jan Softa CEO at somerco.com
Date: 2013-09-01
far more pictures than earlier. Also you do not need to send your film role for developing
before you can see your photos since software enables you to do this right away on your PC,
Mac, TV or tablet. Moreover, today’s printer manufacturers also sell papers suitable for
printing high resolution photos.
When it concern innovation processes it can be divide into both physical and digital.
Inventions in processes - physical
More recently, the German Federal Ministry of Education and Research (BMBF) subsided
the project “Technologies for Sustainability and Climate Protection – Chemical Processes
and Use of CO2”scheme.4 BASF, the Linde Group and ThyssenKrupp plan to develop an
environmentally friendly and competitive basis for utilizing the climate gas carbon dioxide
(CO2) on an industrial scale. They aim to employ innovative process technology to use
carbon dioxide as a raw material, with positive effects on climate protection. In the first step,
an innovative high-temperature technology will process natural gas to obtain hydrogen and
carbon. Compared to other processes, this technology produces very little CO2. The hydrogen
is then reacted with large volumes of CO2, also from other industrial processes, to give
syngas. A mixture of carbon monoxide and hydrogen, syngas is a key raw material for the
chemical industry and is also suitable for producing fuels.
Inventions in processes - digital
EU is also interested in financially supporting innovative digital processes. An example is a
CORDIS funded project who study how innovative 3D integration technology could improve
industrial processes. The process, which consists in stacking 2 D dies and connecting them in
the 3rddimension in order to speed up communication between chips, can be found in
appliances such as miniaturised implantable medical devices and radio frequency devices
found in mobile phones. 3D integration is a very promising area of technological
development and carries huge potential.
'Supporting the development of micro-assembling techniques through this project will allow for keep our
industries afloat in a very competitive international environment' said Dr Michael Gauthier, FAB2ASM
coordinator.5
Inventions in services
I give two examples on inventions in services, one social invention and one from industry.
An example on a social invention is the micro finance loans that were developed by the
Grameen Bank who is a microfinance organization and community development bank
founded in Bangladesh. It makes small loans to the impoverished without requiring collateral.
Micro-credit loans are based on the concept that the poor have skills that are under-utilized,
and with incentive, they can earn more money. Grameen Bank is owned by the borrowers of
the bank, most of whom are poor women. Of the total equity of the bank, the borrowers own
94%, and the remaining 6% is owned by the Government of Bangladesh. Grameen Bank have
won a Noble Prize for introducing these loans.6
4
Technologies for Sustainability and Climate Protection - Chemical Processes and Use of
CO2.http://www.fona.de/en/9852
5
Innovative 3D integration technology could improve industrial processes.
http://cordis.europa.eu/fetch?CALLER=EN_NEWS&ACTION=D&RCN=35951
6
Grameen Bank http://en.wikipedia.org/wiki/Grameen_Bank

4. Jan Softa CEO at somerco.com
Date: 2013-09-01
Examples of service inventions by industry include social media and crowd-sourcing. We are
all familiar with the influence social media companies such as Facebook, Myspace and Mixi
(Japan) has in our private lives and to an increasing extent in our professional life and I
predict that in a few years social media will be a natural part of most professionals working
hours. Crowd-sourcing is a more recent example on how people can get help with their
projects in art, to develop games, get to conduct science and so on. The CrowdFlower
Platform puts the control in your hands and the tools the experts use. You customize your
crowdsourcing solution and launch microtasks to a crowd of 5 million contributors in order to
achieve high-quality results.
Innovations and comments on Horizon 2020, EIP, EBN and the Commission innovation
indicator.
Horizon 2020
Horizon 2020 is the financial instrument implementing the Innovation Union, a Europe 2020
flagship initiative aimed at securing Europe's global competitiveness. Running from 2014 to
2020 with a budget of just over €70 billion, the EU’s new program for research and
innovation is part of the drive to create new growth and jobs in Europe.
Comments on Horizon 2020
There are plenty of subjects to discuss when it concern how Horizon 2020 can help
innovative companies and I focus on the funding of research projects.
If the purpose with the funding projects is to have innovations and research that can create
new jobs and prosperity in society I believe Horizon 2020 should have a great acceptance of
all these types of innovative products and services I discuss above. As it is now, there is a
large focus on physical and digital innovations. Also innovations of processes have a large
acceptance. These are often based on mixes of physical and digital inventions. I do not know
about any innovative services that have been funded in FP5, FP6 or FP7. A clarification is
needed. I and my company Somerco attended a FP7 meeting in Brussels among several other
social media companies. It proves EU has a large interest in supporting this business sector. It
is possible for social media companies to receive funding under the condition they wanted to
research and develop a technology that was novel.7 It was made clear that it was not possible
to receive funding for just providing an innovative service. For Horizon 2020, I believe it
could be interesting to also fund any type of innovative service without any requirements of a
technology attached to it. Most likely funding of such a project will be at a much lower cost.
So why not start on a trial basis to put a cap on how much these types of innovations can
apply for?
There are different options for funded research projects to be run. (a) In a traditional way,
where the projects participants research for a few years and reach conclusions, products or
services. Here the IP rights can be decided before the project start. (b) Another option is to
opt for running crowd-sourced research projects that are not open source. When it concerns
the IP-rights in these projects they belong to the participants who have a legal agreement
between them.(c) The third option is to run open source projects that are conducted by the
7
I actually was in contact with some of the ones who attended this meeting and presented a new type of
technology I had figured out for social media.

5. Jan Softa CEO at somerco.com
Date: 2013-09-01
project participants. After the project ends the IP-rights are non-relevant. It means anyone
have the right to earn money on their research results in the future. (d) The last option is
crowd sourcing projects who also are open sourced. The crowd sourcing means that anyone
can give input on the project while it is running and the open source means the IP-rights are
not valid.
Crowd-sourced projects most often enable a faster development of research results and
thereby more research/euro. New products and services are being developed faster and can
enter the market sooner. There are already crowd sourced projects run by EU. I believe it will
benefit the competiveness of the EU-zone if this approach increases. It means, when it is
possible I think Horizon 2020 should push for this solution in their funding of research
projects. In the open source community crowd sourced project are the most common. This is
an interesting option for EU to consider when it concern to resolve large societal challenges
as climate change. On climate change it will enable researchers in political science, physics
and biology to contribute, green entrepreneurs and industry to collaborate with each other in
order to find solutions on how to save and produce energy more efficient. More specified
examples are in medicine and health were the pharmacy companies probably will spend less
money on developing drugs because they are not likely to be very profitable, but the benefits
for the treatment of those receiving the care will be large. It could be new innovative drugs or
big improvements of existing treatments.
EIP
European Innovation Partnerships (EIPs) are a new approach to EU research and innovation.
EIPs are challenge-driven, focusing on societal benefits and a rapid modernisation of the
associated sectors and markets. EIPs act across the whole research and innovation chain,
bringing together all relevant actors at EU, national and regional levels in order to: (i) step up
research and development efforts; (ii) coordinate investments in demonstration and pilots;
(iii) anticipate and fast-track any necessary regulation and standards; and (iv) mobilise
‘demand’ in particular through better coordinated public procurement to ensure that any
breakthroughs are quickly brought to market. Rather than taking the above steps
independently, as is currently the case, the aim of the EIPs is to design and implement them
in parallel to cut lead times.
EIP has European Innovation Partnerships who focus on societal challenges. These are
Active and Healthy Ageing; Agricultural Sustainability and Productivity; Smart Cities and
Communities; Water and also Raw Materials.
Comments on EIP
To solve these societal challenges it is important to embrace all disciplines in science and
also engage old and new types of start-ups and companies in this process. Their innovations
can help us solve these challenges. However, it is important to not restrict on a certain type of
innovations, but to embrace all four types of innovations and the mixes there are between
them. The benefit with accepting all types of innovations are exemplified on an agreement–
the trade of CO2 emissions who focus on tackling a large societal problem. When it was
released it was a new innovative type of service. Before adopting this agreement, much
research was conducted in many science disciplines and also innovators with knowledge from
all different types of innovation contributed.

6. Jan Softa CEO at somerco.com
Date: 2013-09-01
All different types of innovations are relevant for the challenges mapped out by EIN. Some of
the societal challenges require more input from one type of innovation than the other types.
Active and healthy ageing requires more innovative services in the health sector, than more
new physical and digital inventions of processes for industry. While the challenges we face
with raw material would benefit a lot from new physical and digital innovations of processes
in order for us to have a more efficient usage of these materials. Cities and communities are
complex because it is a mix of nature and man-made constructions. Therefore, I believe
Smart cities and communities are the societal challenge who needs to embrace all these types
of innovations and mixes between them the most. Water and also Agricultural Sustainability
and Productivity will benefits with openness to all the types of innovations I discuss.
EBN
The European Business & Innovation Centre Network (EBN) is organisations which promote
innovation and entrepreneurship. They help enterprises to innovate; they drive the creation of
start-ups (support to innovation, incubation and internationalisation) and they promote
economic development through job and enterprise creation and development.
Comments on EBN
In one of my other papers called Business incubators, financial recycling and incentives I
discuss how EBN can be a hub for European business incubators run by the public sector and
how this will benefit society at large. This paper discusses improvements of EBNs services
and its expansion in Europe.
My comments here focus on how EBN could work in order to help innovative companies by
focusing on three measures (a) new establishments of BICs and (b) cooperation’s with other
organisations and (c) the use of social media.
To continue new establishments of BICs in the EU-zone is important and they could increase
enormously if the suggestion I wrote about in the paper called Business incubator, financial
recycling and incentives is adopted. An important expansion area is in the accession countries
as the Balkans and Turkey. Other nearby European countries as Ukraine, Moldavia and
perhaps even Russia is interesting for the access to new trading markets. Since 2006 EBN has
managed to extend its network by setting-up new “EC-Business and Innovation Centres” in
Morocco, Lebanon, and has provided technical assistance to Business Support Organisations
in Jordan. To continue to expand into the MENA countries are important.
EBN could start with focusing on some types of innovation support depending on what area
or country they set up a new establishment. It is important already in the initial stage to map
out together what support will benefit them fastest and in the long-run. When this is clear it is
easy to decide what route to take. Countries may have different preferences depending on
what industry and resources they can offer now and in the future. Some countries could be
interested in developing innovating services and digital innovations because they do not have
a large manufacturing industry in their country. In another case, an area of a country could
have much manufacturing industry and need help to commercialize innovative processes for
industry. So with this knowledge established EBN should match the right professionals from
EBN with the innovators and government in the area. EBN could also suggest that they
develop an expertise in how to develop innovative services to the industry in this area and
provide this knowledge to them.

7. Jan Softa CEO at somerco.com
Date: 2013-09-01
When it concern cooperation with other organisations EBN have multiple options to consider
in order to help the different types of innovations find their new customers. I choose to
mention the power of the WAINOVA network and Chambers of Commerce. Since EBN is a
member of WAINOVA it is a good starting point to develop its network by the help of
ARUP, ASPA and the other international, national and regional members. This network are
not only helpful for sharing knowledge, but can also be used as a tool for getting the new
innovative products and services to find new industry partners who can manufacture their
products and introduce their services to potential new clients. I believe an introduction
contact by EBN is helpful for all companies, but especially for start-ups. Another benefit is
that the marketing cost of new innovative products and services are probably much lower
than usual marketing costs since these channels are used by EBN. Besides using WAINOVA
as a tool to disseminate new innovative products and services EBN cooperation with
Chambers of Commerce is a natural step when the start-ups have developed their products
and services. These are less focused on the innovation part and more focused on the
commercial side of helping innovative companies. Obviously, they are to be used when the
innovative products and services are ready to be manufactured and introduced to new
customers.
In society, social media has a natural place for professionals when they do business. When
you have an innovation ready for market it can be used in order find new customer based on
the same interest in groups at Facebook, LinkedIN, Somerco, Xing or Viadeo. Also video
channels like Youtube and Vimeo are perfect to use for promotion and for instruction videos
for their innovations. Twitter is another excellent tool to use when innovators want to build a
customer relation with existing and new clients. The social media dashboard Hootsuite has
many so called plug-INS that can help companies to conduct business. The plug-ins are either
free to use or you pay a small subscription fee. There are plenty of other examples of social
media that can be used by innovators and their companies. Just because it is an important part
of business and will be even more important part in the future it is important that EBN can
provide knowledge in this field to their innovators and their companies. Therefore, I believe it
should be a part of every business developer’s knowledge base.
The Commission innovation indicator
Commissioner Máire Geoghegan-Quinn, responsible for Research, Innovation and Science,
said: "The European Union must turn more great ideas into successful products and services
in order to lead in the global economy. We also have to close a worrying 'innovation divide'.
The proposed indicator will help us measure how we are doing and pinpoint areas where
countries need to take action."8
The proposed indicator is based on four components chosen for their policy relevance. (A)
Technological innovation as measured by patents. (B) Employment in knowledge-intensive
activitiesas a percentage of total employment. (C) Competitiveness of knowledge-intensive
goods and services. This is based on both the contribution of the trade balance of high-tech
and medium-tech products to the total trade balance, and knowledge-intensive services as a
share of the total services exports. (D) Employment in fast-growing firms of innovative
sectors.
8
Commission launches new innovation indicator. http://europa.eu/rapid/press-release_IP-13-831_en.htm

8. Jan Softa CEO at somerco.com
Date: 2013-09-01
Comments on the Commission innovator indicator
Access to digital innovations have many advocates in the open source community. There are
numerous of examples in software of open source projects whose products are crowdsourced9 and managed on an industrial level. It is important to not exclude their important
contribution to society and value their desire to be funded. How will open source project
affect one of the innovator indicators - namely to measure patents? Open source in R & D has
come to stay and are increasing in importance. It is important to acknowledge also in the
innovator indicator. Projects that before might have led to a few patents are with open source
leading to no patents, but many new innovations since others have the right to use the project
results without explicit permission from the patent holder. Should there be an additional
indicator for innovations based on open source? Of course! But how can this be measured? A
simple way is that everyone who develops innovative products based on an open source
funded projects by EU has to accredit it to the project and also report it to them or EU. You
could explain in an open source agreement the purpose is to measure innovations success and
therefore those who not report it could be fined if they have used innovations based on open
source projects funded by EU. Even if Wikimedia is not focusing on innovations, some
lessons can be learned here for how the ones who uploaded the free to use pictures and
movies are given credit and a notice when it is used.10
Employment in knowledge-intensive activities as a percentage of total employment and
employment in fast-growing firms of innovative sectors are important indicators. When it
concern employment due to innovations, there are different factors to consider when you
measure these indicators. I start with commenting employment in knowledge-intensive
activities as a percentage of total employment. This component captures the structural
orientation of a country towards knowledge-intensive activities (KIA), by measuring the
people it employs in KIA in business industries, where at least one third of the employees
have a higher education degree, as a proportion of the total number of employees in that
country. It is a very important indicator for countries to measure, but perhaps it could be more
inclusive. To start with innovations do not necessary come only from those with a higher
education. There are plenty of innovators without higher education who have developed
several innovations. Some of these will be represented in the innovation indicator employment in fast-growing firms of innovative sectors. But still not all innovators without a
higher education work in these sectors. Perhaps, one way to include also these innovators is
to measure whether they have part-time or full-time employment as innovators by themselves
or by others.
The success of innovations depends on the ones who developed the innovation and on those
who can manufacture the innovation at a fair price. Often subcontractors are used for the
manufacturing. It covers employment at subcontractors on the condition that these are based
in the same country. Moreover, I believe the purpose is not to measure employment at
subcontractors outside countries in the EU-zone so these two employment indicators do not
need further development in this issue. Instead, in these cases the success of the different
types of innovation can be measured by the innovation indicator competitiveness of
knowledge-intensive goods and services.
9
Crowd sourced meaning that it is possible for many to contribute with knowledge in the development of
products and services.
10
Open source importance to science and society is more elaborate discussed in the paper: Open source – from
science to society.

9. Jan Softa CEO at somerco.com
Date: 2013-09-01
Draft proposals
Enhance the competiveness of EC member states Part 1 - Designated tax to science
Enhance the competiveness of EC member states Part 2 – Strategy to support the software
industry
Enhance the competiveness of EC member states Part 3 – Actions to support women in ICT
Enhance the competiveness of EC member states Part 4 – Going abroad – Competitive assets
Enhance the competiveness of EC member states Part 5 – Business incubators, financial
recycling and incentives into reward
Enhance the competiveness of EC member states Part 6 – Standardization as a tool to
increase competiveness
Enhance the competiveness of EC member states Part 7 – Different types of innovations
Enhance the competiveness of EC member states Part 9 – Crowd sourcing and crowd
funding
Enhance the competiveness of EC member states Part 10 – Green VAT for business
Enhance the competiveness of EC member states Overview – Old and new key areas in order
to increase the competiveness of the industry
Input on threats against information society