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Closing the
                      Innovation Gap
                         in Europe
                     How much can a crisis help ?



                               Bruno Lanvin
                         Executive Director, INSEAD-eLab




Ghent, 12 May 2009                      iMinds Conference 2009   1/33
Four points
• Innovation is under renovation
• Can Europe seize the opportunity ?
      – Will it have the muscle ?
      – Will it have the brains ?
      – Will it have the guts ?
• The growing significance of the local level



Ghent, 12 May 2009          iMinds Conference 2009   2/33
Three points
• Innovation is under renovation
• Can Europe seize the opportunity ?
      – Will it have the muscle ?
      – Will it have the brains ?
      – Will it have the guts ?
• The growing significance of the local level



Ghent, 12 May 2009          iMinds Conference 2009   3/33
(Source : WEF/Innovation 100)




Ghent, 12 May 2009   iMinds Conference 2009                  4/33
Ghent, 12 May 2009   iMinds Conference 2009   5/33
Ghent, 12 May 2009   iMinds Conference 2009   6/33
Ghent, 12 May 2009   iMinds Conference 2009   7/33
Three points
• Innovation is under renovation
• Can Europe seize the opportunity ?
      – Will it have the muscle ?
      – Will it have the brains ?
      – Will it have the guts ?
• The growing significance of the local level



Ghent, 12 May 2009          iMinds Conference 2009   8/33
Can Europe seize the opportunity ?

              Intensity of downpour
                 (in liters/second)
                                Anticipated velocity of pedestrian
                                        crossing the sreet
                                       (in meters/second)



                 Estimated ground speed
          of vehicles heading towards observer
                       (in km/hour)


Distance to reach other side of the street (in meters)


  Ghent, 12 May 2009                     iMinds Conference 2009      9/33
Will Europe have the muscle ?
Ghent, 12 May 2009   iMinds Conference 2009   10/33
R&D Spending (private + public) as % of GDP




EU 27 1,82




Ghent, 12 May 2009            iMinds Conference 2009   11/33
Europe’s innovation on steroids ?


                                • Small Business Act
                                • Venture Capital
                                • Partnership



                     (I) = f ( SBA, VC, PPP)
Ghent, 12 May 2009            iMinds Conference 2009   12/33
Will Europe have the brains ?



Ghent, 12 May 2009   iMinds Conference 2009   13/33
Ghent, 12 May 2009   iMinds Conference 2009   14/33
Skills matter to global competitiveness
                                                   6.00
WEF Global Competitiveness Index 2008-2009 (GCI)



                                                   5.50
                                                                Eighty-four percent of the variation in
                                                                the WEF Global Competitiveness
                                                                Index is accounted for by the eSkills




                                                                                                                                                                           © INSEAD eLab 2009 – Source : INSEAD/eLab database and research
                                                                Readiness Index
                                                   5.00




                                                   4.50



                                                               GCI average: 4.22
                                                   4.00




                                                   3.50                                                                         Global Competitive Index (GCI)
                                                                                                                                             Predicted
                                                                                                                                             Actual
                                                   3.00




                                                                                                                 eSRI average: 3.92
                                                   2.50
                                                        2.00       2.50        3.00        3.50           4.00         4.50           5.00            5.50       6.00


                                                                              INSEAD eLab eSkills Readiness Index 2008 (eSRI)

                                                   Ghent, 12 May 2009                                     iMinds Conference 2009                                   15/33
Skill needs for a sustainable
            development in Europe

                          Talents for the Global Knowledge Economy
                     C

                     B-             Occupational skills



                     B                      Literacy & Basic Skills
                                          (Math, Science, IT Literacy)


                                        © INSEAD eLab 2009 – Source : INSEAD/eLab database and research



Ghent, 12 May 2009                  iMinds Conference 2009                                  16/33
Europe’s Skill Challenge:
           Uneven but Widespread
                     A

                     B

                     C

                     D

                     E



                             © INSEAD eLab 2009 – Source : INSEAD/eLab database and research



Ghent, 12 May 2009       iMinds Conference 2009                                  17/33
Availability of scientists and engineers
 R        Countries       Index
 4        India           5.92
 7        France          5.68
 12       USA             5.60
 16       Germany         5.44
 17       Belgium         5.34
 45       Spain           4.71
 49       Italy           4.59
 67       Estonia         4.33
 77       China           4.16
 81       Luxemburg 4.06
 91       Slovenia        3.85
                                      © INSEAD eLab 2009 – Source : INSEAD/eLab database and research



     Ghent, 12 May 2009           iMinds Conference 2009                                  18/33
Quality of maths and science education
 R        Countries       Index
 1        Singapore       6.34
 2        Belgium         6.29
 6        France          5.71
 11       India           5.38
 14       Netherlands 5.27
 43       USA             4.54
 55       China           4.38
 57       Italy           4.27
 66       Spain           3.93
 89       Portugal        3.43
                                      © INSEAD eLab 2009 – Source : INSEAD/eLab database and research



     Ghent, 12 May 2009           iMinds Conference 2009                                  19/33
Innovation and education in the
Quality of
               world’s top 15 knowledge economies
education
                               NZ
     1                                                                 DK
                              (21)                                             FIN          (NRI ranking
                                        NOR                            (1)
                                        (10)                                   (4)          in brackets)
                              AUS
     5                        (15)
               ICE                                                             SWE
                (8)                                             NED             (2)
                                                        CAN
     10                                   IRE                    (6)
                                                        (11)
                                          (21)
                                                        UK
     15                                                 (9)             USA
                                                                         (6)

     20
                                                 GER
                                 AUT             (16)
     25                          (17)


     30
                                                                                     SUI
                                                                                     (5)
                                                                                               Innovation
             30          25    20         15             10            5             1        performance
                                                        © INSEAD eLab 2009 – Source : INSEAD/eLab database and research



    Ghent, 12 May 2009                              iMinds Conference 2009                                  20/33
Two post-crisis scenarios
overall demand
& skills supply
                                             Market/skills demand

                                                                            With European Skills Pact



                                                                              Skills supply


                  Skills shortage
                                                                          Without European Skills Pact




                                                                                     time


                      pre-crisis    crisis                  post-crisis
                                                  © INSEAD eLab 2009 – Source : INSEAD/eLab database and research



 Ghent, 12 May 2009                          iMinds Conference 2009                                   21/33
The way forward

•        prevent talent drain during the crisis
•        more maths & science
•        seize the cleantech opportunity
•        enhance openess and mobility




Ghent, 12 May 2009          iMinds Conference 2009   22/33
Will Europe have the guts ?




Ghent, 12 May 2009   iMinds Conference 2009   23/33
Ghent, 12 May 2009   iMinds Conference 2009   24/33
SIZE(*) matters
                     • Build on success           • Benchmark
                     • Focus resources            • Encourage risk taking,
                     • Be open                      multi-disciplinary work
                                                    and bold innovation
                       (*) Special Innovation Zones in Europe




Ghent, 12 May 2009                          iMinds Conference 2009      25/33
Innovation is a mindset
• A culture of innovation requires the
  recognition of the right to fail
• Incremental innovation can grow from
  specialization; disruptive innovation
  demands inter-disciplinarity, openness
  and collaboration
• A critical factor of innovation success is
  timing : time-to-market, agility are key

Ghent, 12 May 2009       iMinds Conference 2009   26/33
What are we waiting for ?
Indecision in times of crisis is more
deadly than in normal times. Innovation
will make the difference between the
players who will be on the right/wrong
side of the street when the weather
improves and traffic grows again.




Ghent, 12 May 2009                iMinds Conference 2009   27/33
Three points
• Innovation is under renovation
• Can Europe seize the opportunity ?
      – Will it have the muscle ?
      – Will it have the brains ?
      – Will it have the guts ?
• The growing significance of the local level



Ghent, 12 May 2009          iMinds Conference 2009   28/33
The Power of Being Small
   – Global connected hubs
   – Small big players : Estonia, Singapore, Qatar
   – Regions and municipalities as champions




Ghent, 12 May 2009        iMinds Conference 2009   29/33
Ghent, 12 May 2009   iMinds Conference 2009   30/33
Ghent, 12 May 2009   iMinds Conference 2009   31/33
The ABCDE of
        innovation-based competition
Agility               - React swiftly to opportunities
                      - Infrastructure, networks
Be on the map           and hub positioning
                      - Open-mindedness
Cooperate               & multi-disciplinarity
Desire                - Local will to create, risk,
                        adapt and change
Excellence            - Attract and retain talent

 Ghent, 12 May 2009    iMinds Conference 2009      32/33
Thank you for your attention

                          bruno@lanvin.org




Ghent, 12 May 2009                iMinds Conference 2009   33/33

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I Minds2009 Bruno Lanvin Closing The Innovation Gap In Europe

  • 1. Closing the Innovation Gap in Europe How much can a crisis help ? Bruno Lanvin Executive Director, INSEAD-eLab Ghent, 12 May 2009 iMinds Conference 2009 1/33
  • 2. Four points • Innovation is under renovation • Can Europe seize the opportunity ? – Will it have the muscle ? – Will it have the brains ? – Will it have the guts ? • The growing significance of the local level Ghent, 12 May 2009 iMinds Conference 2009 2/33
  • 3. Three points • Innovation is under renovation • Can Europe seize the opportunity ? – Will it have the muscle ? – Will it have the brains ? – Will it have the guts ? • The growing significance of the local level Ghent, 12 May 2009 iMinds Conference 2009 3/33
  • 4. (Source : WEF/Innovation 100) Ghent, 12 May 2009 iMinds Conference 2009 4/33
  • 5. Ghent, 12 May 2009 iMinds Conference 2009 5/33
  • 6. Ghent, 12 May 2009 iMinds Conference 2009 6/33
  • 7. Ghent, 12 May 2009 iMinds Conference 2009 7/33
  • 8. Three points • Innovation is under renovation • Can Europe seize the opportunity ? – Will it have the muscle ? – Will it have the brains ? – Will it have the guts ? • The growing significance of the local level Ghent, 12 May 2009 iMinds Conference 2009 8/33
  • 9. Can Europe seize the opportunity ? Intensity of downpour (in liters/second) Anticipated velocity of pedestrian crossing the sreet (in meters/second) Estimated ground speed of vehicles heading towards observer (in km/hour) Distance to reach other side of the street (in meters) Ghent, 12 May 2009 iMinds Conference 2009 9/33
  • 10. Will Europe have the muscle ? Ghent, 12 May 2009 iMinds Conference 2009 10/33
  • 11. R&D Spending (private + public) as % of GDP EU 27 1,82 Ghent, 12 May 2009 iMinds Conference 2009 11/33
  • 12. Europe’s innovation on steroids ? • Small Business Act • Venture Capital • Partnership (I) = f ( SBA, VC, PPP) Ghent, 12 May 2009 iMinds Conference 2009 12/33
  • 13. Will Europe have the brains ? Ghent, 12 May 2009 iMinds Conference 2009 13/33
  • 14. Ghent, 12 May 2009 iMinds Conference 2009 14/33
  • 15. Skills matter to global competitiveness 6.00 WEF Global Competitiveness Index 2008-2009 (GCI) 5.50 Eighty-four percent of the variation in the WEF Global Competitiveness Index is accounted for by the eSkills © INSEAD eLab 2009 – Source : INSEAD/eLab database and research Readiness Index 5.00 4.50 GCI average: 4.22 4.00 3.50 Global Competitive Index (GCI) Predicted Actual 3.00 eSRI average: 3.92 2.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00 5.50 6.00 INSEAD eLab eSkills Readiness Index 2008 (eSRI) Ghent, 12 May 2009 iMinds Conference 2009 15/33
  • 16. Skill needs for a sustainable development in Europe Talents for the Global Knowledge Economy C B- Occupational skills B Literacy & Basic Skills (Math, Science, IT Literacy) © INSEAD eLab 2009 – Source : INSEAD/eLab database and research Ghent, 12 May 2009 iMinds Conference 2009 16/33
  • 17. Europe’s Skill Challenge: Uneven but Widespread A B C D E © INSEAD eLab 2009 – Source : INSEAD/eLab database and research Ghent, 12 May 2009 iMinds Conference 2009 17/33
  • 18. Availability of scientists and engineers R Countries Index 4 India 5.92 7 France 5.68 12 USA 5.60 16 Germany 5.44 17 Belgium 5.34 45 Spain 4.71 49 Italy 4.59 67 Estonia 4.33 77 China 4.16 81 Luxemburg 4.06 91 Slovenia 3.85 © INSEAD eLab 2009 – Source : INSEAD/eLab database and research Ghent, 12 May 2009 iMinds Conference 2009 18/33
  • 19. Quality of maths and science education R Countries Index 1 Singapore 6.34 2 Belgium 6.29 6 France 5.71 11 India 5.38 14 Netherlands 5.27 43 USA 4.54 55 China 4.38 57 Italy 4.27 66 Spain 3.93 89 Portugal 3.43 © INSEAD eLab 2009 – Source : INSEAD/eLab database and research Ghent, 12 May 2009 iMinds Conference 2009 19/33
  • 20. Innovation and education in the Quality of world’s top 15 knowledge economies education NZ 1 DK (21) FIN (NRI ranking NOR (1) (10) (4) in brackets) AUS 5 (15) ICE SWE (8) NED (2) CAN 10 IRE (6) (11) (21) UK 15 (9) USA (6) 20 GER AUT (16) 25 (17) 30 SUI (5) Innovation 30 25 20 15 10 5 1 performance © INSEAD eLab 2009 – Source : INSEAD/eLab database and research Ghent, 12 May 2009 iMinds Conference 2009 20/33
  • 21. Two post-crisis scenarios overall demand & skills supply Market/skills demand With European Skills Pact Skills supply Skills shortage Without European Skills Pact time pre-crisis crisis post-crisis © INSEAD eLab 2009 – Source : INSEAD/eLab database and research Ghent, 12 May 2009 iMinds Conference 2009 21/33
  • 22. The way forward • prevent talent drain during the crisis • more maths & science • seize the cleantech opportunity • enhance openess and mobility Ghent, 12 May 2009 iMinds Conference 2009 22/33
  • 23. Will Europe have the guts ? Ghent, 12 May 2009 iMinds Conference 2009 23/33
  • 24. Ghent, 12 May 2009 iMinds Conference 2009 24/33
  • 25. SIZE(*) matters • Build on success • Benchmark • Focus resources • Encourage risk taking, • Be open multi-disciplinary work and bold innovation (*) Special Innovation Zones in Europe Ghent, 12 May 2009 iMinds Conference 2009 25/33
  • 26. Innovation is a mindset • A culture of innovation requires the recognition of the right to fail • Incremental innovation can grow from specialization; disruptive innovation demands inter-disciplinarity, openness and collaboration • A critical factor of innovation success is timing : time-to-market, agility are key Ghent, 12 May 2009 iMinds Conference 2009 26/33
  • 27. What are we waiting for ? Indecision in times of crisis is more deadly than in normal times. Innovation will make the difference between the players who will be on the right/wrong side of the street when the weather improves and traffic grows again. Ghent, 12 May 2009 iMinds Conference 2009 27/33
  • 28. Three points • Innovation is under renovation • Can Europe seize the opportunity ? – Will it have the muscle ? – Will it have the brains ? – Will it have the guts ? • The growing significance of the local level Ghent, 12 May 2009 iMinds Conference 2009 28/33
  • 29. The Power of Being Small – Global connected hubs – Small big players : Estonia, Singapore, Qatar – Regions and municipalities as champions Ghent, 12 May 2009 iMinds Conference 2009 29/33
  • 30. Ghent, 12 May 2009 iMinds Conference 2009 30/33
  • 31. Ghent, 12 May 2009 iMinds Conference 2009 31/33
  • 32. The ABCDE of innovation-based competition Agility - React swiftly to opportunities - Infrastructure, networks Be on the map and hub positioning - Open-mindedness Cooperate & multi-disciplinarity Desire - Local will to create, risk, adapt and change Excellence - Attract and retain talent Ghent, 12 May 2009 iMinds Conference 2009 32/33
  • 33. Thank you for your attention bruno@lanvin.org Ghent, 12 May 2009 iMinds Conference 2009 33/33