Lisbon Strategy 2.1: Europe - the most creative economy in the world (full)

Lisbon Strategy 2.1:Lisbon Strategy 2.1:Europe Europe -- the most creative the most creative economy in the worldeconomy in the worldPre-Presidency Conference, Ljubljana,December 3-4,2007

dr. Žiga Turk, ministerGovernment Office for GrowthSLOVENIA

ziga.turk@gmail.com

2008: Starting a new chapter 2008: Starting a new chapter in European historyin European history

end of period of EU looking inwardtreaty signed, form defined, expansion from EU15 to EU27success of Euro

time to look at the content, not formtime to look outwardtime to shape, not respond to globalization

Lisbon Strategy is response Lisbon Strategy is response to globalization which is to globalization which is driven by driven by ……

freedom in politicsfall of iron curtain and Berlin wall

freedom in tradefree trade agreements in WTO and GATT

advances in logisticsof goods: container ships, DHL, UPS …of information: internet, mobile phones

Europe a follower, not driver of these processes

Context Context -- Lisbon Strategy Lisbon Strategy

Lisbon 1.0 (2000)most competitive economy in the worldJapan and USA

Lisbon 2.0 (2005)growth and jobslooking inward

if it's not broken don't fix it …

Lisbon 2.1 (2008)

SWOTSWOT

Strengths: cares for people, cares for nature, quality of life, social security, health system, culture of peace, human rights, tolerance, cooperation, tradition in science and art, humanism …Opportunities: builds on strengths, attracts talents, innovates in all aspects of living, adapts and opens up to the world, projects its values to the world, dynamic economy

Weaknesses: no risk taking, little individualism, depending on government, highly regulated, low entrepreneurial drive, weak r&d - industry links, decreasing quality of education, weak capital markets, unreadiness to hard work, hard study …Threats: does not address weaknesses, graying of population, unable to compete with Asia, closes itself from the world, Europe is satisfied, tired and lazy

In the wake of the Asian In the wake of the Asian centurycentury

1800s … European Century1900s … American Century2000s … Asian Century

"they know it belongs to them"again!

AsiaAsia

India + China GDP > West's GDP until 1820India + China GDP > West's GDP after 2050 or before?other BRIC countries!

Innovation?Innovation?

United States graduated roughly70,000 undergraduate engineersChina graduated 600,000 and India 350,000.½ of software developed in India½ of Fortune 500 outsource software work to Indianew R&D centers of Microsoft, Cisco, Google, IBM … are in Asia, not Europeby 2020 80% of scientific papers in sci&tech will be written by asiansout of top 10 universities 2 in EuropeAsia (Singapore) is setting education standards

Innovation is Innovation is not enough!not enough!

The shiftThe shift

Agriculture Age (farmers)Industrial Age (factory workers)Information Age (knowledge workers - innovators)Conceptual Age (creators)

Source: Dan Pink, A Whole New Mind

Theoretical basisTheoretical basis

Schumpeter:products fulfill needs"profit is result of innovation"

Dan Pink (rephrased):products fulfill passions"profit is result of creativity"

Do you buy Do you buy what you what you

need?need?

Or do you buy Or do you buy what you what you

think and feel think and feel you need?you need?

Do you pay Do you pay for functionfor function

or do you pay or do you pay for meaning?for meaning?

Added valueAdded valuein functionin function

or inor inmeaningmeaning??

1 EUR 30 EUR

Price of function is Price of function is dropingdroping, , and price of meaning risingand price of meaning rising

price of funcion

pric

e of

mea

ning

imageimage

trade marktrade mark

designdesign

environmentaly

friendly

environmentaly

friendly

"home made"

"home made"

trustedtrusted

just function more

"healthy""healthy"

“fair”“fair”

marketingmarketing

who can thinkof it

who iswilling topay for it

who cansell it

Who makes Who makes meaning?meaning?

What gives What gives meaning?meaning?

what is meaning?what is meaning?

what gives meaning?what gives meaning?

what influences what influences meaning?meaning?

values, morals, values, morals, virtues!virtues!

MORALIZATION OF MORALIZATION OF THE MARKETS!THE MARKETS!

Innovation vs. CreativityInnovation vs. Creativity

Innovation: “The past few decades have belonged to a certain kind of person with a certain kind of mind—computer programmers who could crank code, lawyers who could craft contracts, MBAs who could crunch numbers." Creativity: "The future belongs to a very different kind of person with a very different kind of mind—creators and empathizers, pattern recognizers and meaning makers. These people—artists, inventors, designers, storytellers, caregivers, consolers, big picture thinkers—will now reap society’s richest rewards and share its greatest joys.”Source: Dan Pink, A Whole New Mind

Left brain vs. right brainLeft brain vs. right brain

“The era of ‘left brain’ dominance—is giving way to a new world in which ‘right brain’ qualities—inventiveness, empathy, meaning—will govern.”left brain - rational, methodical, mathematical … culturally independentright brain - intuitive, artistic, sprititual… depends on cultural background Source: Dan Pink, A Whole New Mind

““Human Human creativity is the creativity is the

ultimate ultimate economic economic

resource.resource.””

Source: Richard Florida,Source: Richard Florida,

The Rise of the Creative ClassThe Rise of the Creative Class

War forWar fortalent!talent!

Educate talentEducate talent

Attract talentAttract talent

Retain talentRetain talent

Florida's 3 "Florida's 3 "T"sT"s

Talent (educate, attract, retain)½ mil. top EU engineers and researchers abroad

Technologyattracts talent

Tolerancemakes talent stay

Back to Back to Lisbon 2.1Lisbon 2.1creativity, creativity,

entrepreneursentrepreneurship, values hip, values ……

open

met

hod

of c

oord

inat

ion

Structure of Lisbon Strategy 2.1Structure of Lisbon Strategy 2.1citizen dimension (!)member state dimensionEuropean Union dimensionglobal dimension (new)

(1) innovation and creativity

(2) business environment

(3) caring for people

(4) caring for the environment

(1) i

nnov

atio

n an

d cr

eativ

ity

(2) b

usin

ess

envi

ronm

ent

(3) c

arin

g fo

r peo

ple

(4) c

arin

g fo

r the

env

irone

mnt

si.nergysi.nergy

Growth of EU companiesGrowth of EU companies

profitability

worldcompanies

Europeancompanies

phase 1:opening

phase 2:scale

phase 3:focus

phase 4:balance/alliance

reve

nues

industry maturity

innovation& start-up

gap

innovation& start-up

gap

consolidation/monopoly

gap

consolidation/monopoly

gap

Jobs: Invest in HRJobs: Invest in HR

souc

e:Eu

rope

’s E

rodi

ngW

ealth

of K

now

ledg

eJe

an P

isan

i-Fer

ry

Jobs: Higher GDP,Jobs: Higher GDP,less endowment at lay offless endowment at lay off

Education challengeEducation challenge

Focus in LS 2.1Focus in LS 2.1

knowledge, innovation and creativitykeyword: creativity

growth, competitiveness & entrepreneurshipkeyword: entrepreneurship

jobs, human resourceskeyword: talents, flexibility, best person for the job

energy and climate changekeyword: income or cost

managementorganize CLP in 4 themes, have CLP reviewed yearly as wellsuggest organizing NRP 2.1 into 4 themessuggest yearly member state reporting into 4 themes

1. 1. PillarPillar: : Increasing the Increasing the EUEU’’ss economic economic

potential through R&Dpotential through R&D

Promote Creativity as a horizontal issue to make Europe the most creative place in the worldInnovation: generation and application of knowledge –establishment of the European Research Area (ERA), focus on the successful introduction of the European Institute of Technology (EIT) as a link between the public research sphere, the European higher educational environment and the economy. Introduction of knowledge as 5th freedomEstablishment of joint technology initiatives (JTI)Opening the research infrastructure for researchers in SMEs, improving the competitiveness of the EU, Member States and regions;Inclusion of neighboring regions (especially the West Balkans) in European research programs.

2. 2. pillarpillar: : Developing a competitive Developing a competitive economic environment in the EUeconomic environment in the EU

Promote enterprenurialship and growth of SMEsAccess of SMEs to sources of fundingCompany clustering as one of the ways for SMEs to gain access to the research infrastructure, link to the 1st pillar. Deepening of the internal market;

suitable framework for regulation, liberalization and transfer of benefits internal competitiveness of the European market, development of integrated policies for innovation and creativity in order to support growth of SMEs are required at the external level Europe should take the leadership in standards in the field of environment, better regulation, intellectual property

Eliminating administrative barriers and reducing administrative burdens, especially for SMEs and citizens;

accelerating the adoption of the program of simplifying EU legislation, adopting national goals and strategies for reducing administrative barriers for companies and citizens (national goals comparable to goals on the EU level).

The Community patentthe comprehensive strategy on intellectual property rights

3. 3. pillarpillar: : Adapting the social model to the Adapting the social model to the

modern competitive economymodern competitive economy

Implementation of flexicurity (conditions and the approach):the right balance and coordination should be achieved between flexibility on the labor market and social security, which should be ensured for the unemployed. importance of social partners.

Active employment policies (new activation polices, measures to stipulate active work – social protection benefits that stipulate work) and lifelong learning policies – for the increase employment security. Promotion of labour market policies as incentives of productivity growth,Knowledge society: the triangle between education, knowledge and economy should be closely connected with labour market needsExternal migration: demand on higher skilled workers? Respond to the demographic trends

4. 4. pillarpillar: : Energy and Energy and climatclimatee changechange

Promoting sustainable development and renewable energy recoursesEU needs to improve its energy and resource efficiency and develop and fully utilized new low-carbon technologies. In this respect, the expected Strategic Energy technologies Plan needs to answer the question of available financing instruments; the SET plan shall involve new proposals for better coordination and the increase of available public funds for SET-related research.Security of energy supply and liberalization of energy and gas markets.To achieve the commitments set by the European Council, EU will need to start systematically and consistently investing into sustainable low carbon and resource efficient technologies. Removal of all barriers to trade in renewables and environmental technologies, by, among others, adoption of EU wide standards, which will be set at the most progressive end.Moralization of the markets.

Focus (summary)Focus (summary)

knowledge, innovation and creativitysupport for JTI, technology platformswidening of ERA towards SE Europeknowledge as 5th freedomERA and ERAnetworked approach to concentration

growth, competitiveness & entrepreneurshipentrepreneurship, education, role modelsSMEs, early stage financinginternal market (review)continued reduction of administration burden

jobs, human resourcessharing best practices on flexisecurityimproving education of youth and adults, weakness in knowledge triangleperspectives of the young

energy and environmentenvironmental policies as key driver of innovation and consequently economic growth

Creativity as the horizontal Creativity as the horizontal issue in the four themesissue in the four themes

innovation and creativitynot only engineers but designers, artists

competitivenesshow to make talents entrepreneurial

peoplehow to educate, attract and retain talent,how to make talent entrepreneurial,how to flexibly employ talents

environmentmake it into a value, make it into a business opportunity

Role of Europe in Role of Europe in globalizationglobalization

it is ultimately about valueswell designed, fair, environmentally friendly, nice, trustworthy …Europe's role in the globalized world is to

shape values … dealing with conflict, addressing climate change, agreement among generations, social sensitivity, global empathy … valuing design, brand, intellectual propertyexport these valuescreating products fitting this world viewexporting products

creativity is the key!

We have We have legacies and legacies and traditions to traditions to

build on!build on!

PS.PS.

The The ChineseChineseinvented cheap invented cheap

paper.paper.

In 15In 15thth century century Europe learned Europe learned

to use it.to use it.

Democratic use of Democratic use of paper. It can be used paper. It can be used for anything. So many for anything. So many more people can more people can learn, create learn, create ……

The first The first communicommuni--

cationcationrevolutionrevolution

The The ReneissanceReneissance

follows.follows.

Europe takes Europe takes the lead.the lead.

In ethics, arts, In ethics, arts, science, technology. science, technology. World domination World domination follows. Culminates in follows. Culminates in the early 20the early 20thth century.century.

In the 20In the 20thth

Century Century AmericansAmericansinvent the invent the Internet.Internet.

Europe learns Europe learns to use it.to use it.

Democratic use of Democratic use of digital technology.digital technology.

Anyone can be an Anyone can be an author.author.

Anyone can publish.Anyone can publish.

Do movies.Do movies.

Do music.Do music.

Spread ideas.Spread ideas.

Values.Values.

His or her own.His or her own.

The second The second communication communication

revolutionrevolution

What will we What will we make of it?make of it?

Not in colonies. Not in Not in colonies. Not in steel production.steel production.

In ideas. In values.In ideas. In values.

Creativity 2.0Creativity 2.0

Everyone gets Everyone gets involvedinvolved

Creative, media Creative, media empowered society!empowered society!

Or we get so poor Or we get so poor manufacturing will manufacturing will come back to Europe.come back to Europe.

No room for No room for complecancycomplecancy

ReferencesReferences

Dan Pink, A Whole New MindRichard Florida: The Raise of the Creative ClassJeremy Rifkin: The European Dream