Minister Juhan Partsi kõne TAFTIE aastakonverentsil "Heaven or Hell: Innovating Cyber Future"
Dear innovation promoters,
I would like to say at first that it is great honour for Estonia to have the Chairmanship of TAFTIE, the European Network of Innovation Agencies, in 2011, and I hope that this conference with the main topic of innovation in cyber space will bring many new ideas about how to make the most effective use of the opportunities created by ICT for the benefit of innovation in the increasingly networked world and about how to avoid possible risks.
Europe is a part of the Old World. The word „old“ mostly adds dignity to Europe in this phrase, referring to our powerful history and cultural history, long traditions and a wealth of experience. We have to admit, however, that we literally are the old world, lagging behind from the aspects of innovation.
Why is it that innovation in Europe is constantly lagging behind or does not develop so fast as the so-called new country, the USA, or Japan – a country with dignified history but innovative by nature? I believe that the reason lies in the shaky basis, low flexibility and tough competition between the EU Member States instead of having cooperation. Many new ideas and principles have remained just ideas and are not functioning in reality. One of such examples if the common internal market without barriers or obstacles, which is a fundamental principle of the European Union. In the current situation, the internal market without borders exists only on paper and its implementation in actual economic life is a very slow process. I will bring only one example to you about e-commerce. Estonia has been an EU Member State already since spring 2004 but it is still not possible to order goods from many online stores to Estonia without any actual reasons. Isn’t it a crazy situation. In 2011, when computers and the internet have been used by the general population for almost 20 years, there is no common functioning and universally recognised system of e-authentication and e-identification within the EU. It is, for instance, easier for Estonian citizens to order e-books or music from US online stores than from the European ones.
Another factor which directly discourages innovation in Europe and which I cannot be satisfied with is the unreasonably costly, complicated and time-consuming patent registration system of the EU. A patent registered with the European Patent Office currently has to be registered separately also with every member state where protection is applied for, and each member state may require translation of the whole documentation into its official language. The average cost of registration of a European patent is up to 12,500 euros, if the patent has been registered with only 13 countries, and more than 32,000 euros, if it has been established in the whole EU. According to the evaluation of the Financial Times, patenting of an invention in just a half of the EU Member States costs ten times more than patenting in the USA as a whole. Therefore it is no wonder that promising inventors and start-up businesses do not hurry to register their innovations – they simply have no such resources. Disputes over the streamlining and harmonisation of the EU patent registration process have been going on for decades. I consider solution of this problem very important and the Estonian Government has also made concrete respective suggestions to EU institutions.
Such absurd bureaucratic requirements are also the reason why many good innovative ideas die out already before they can start their life.
The European Commission has developed the Single Market Act as an effort to remove obstacles from the EU internal market. The 12 primary measures fortunately include also the objective of creating the unitary patent protection for the greatest possible number of Member States and a unified patent litigation system, and ensuring mutual recognition of the e-identification and e-authentication systems. But this is surely not enough to provide a final solution for the situation and help Europe stand on its feet again.
In my opinion, the activities of TAFTIE may turn out to be the most successful of the measures taken by the European Commission. Your similar organisations should have considerably more rights to express their opinion and I would like to hope that your efforts will make Europe work faster, more efficiently and in harmony. This is necessary to catch up both the USA and Japan with our innovation activities.
The national financing of innovation development has surely also an important role. We can see that for instance in 2008 the average level of expenditures of EU Member States on research and development activities was 1.90% of the GDP but at the same time in the USA 2.76% and in Japan 3.44%. (According to the Strategy EU2020, the objective of Europe is to increase the rate of total expenditure to 3% of the GDP in the next 9 years.)
I am glad to say that the Estonian Government has decided to continue the public programmes of research, development and innovation to a full extent in the years of crisis and even to increase the percentage of total R&D expenditure from the GDP. For instance, during the years of crisis 2008–2009, our level of R&D&I expenditure increased by 0.13 percentage points. I believe that next to the strong revival of export markets, investments in R&D&I have been an important factor for taking the Estonian economy out of the crisis and we can currently say that the Estonian economy is doing well. This is demonstrated also by the economic growth of 8 per cent in the first quarter.
But I find that our level of total expenditure is still too modest. This is particularly evident in comparison with our innovative neighbours Finland and Sweden which spent, respectively, 3.73 and 3.75% on R&D 3 years ago!
One may ask where R&D investments should be directed in a country which has no such R&D-intensive industries as the automotive or pharmaceutical sector. Estonia has luckily always been on good terms with the IT field.
Estonia is currently known as an innovative IT country in the world, we have been pioneers in several respects in the field of e-government and several solutions which have been used by the Estonian population for more than a decade already, are only emerging in other countries. People can fully communicate with the state and local governments through their computer, without leaving home. Whether it is applying for a place in a kindergarten or establishing a new company. They can participate also in parliamentary elections on the internet by using their identity card. Estonia is also endearingly called the Skype country as the Skype software was created by Estonians and most of the Skype development team and 44% of the total staff of Skype are currently working in Estonia.
Already now, several new potential Skypes are emerging. Although the population of Estonia is only 1.4 million people, which means that we do not have a large labour force, we have many smart solutions. Their sustainable emergence is confirmed also by the fact that 6 Estonian companies found their way to Innovate Now!, the Global Top 100 of start-up businesses. Also other similar charts have always included some IT start-ups from Estonia. All this results from the decisions adopted some time ago to focus more on the IT field.
Bearing in mind the main topic „Heaven or Hell: Innovating Cyber Future“ of this conference today, we can say that in many respects, Estonia is a paradise for the innovative cyber world, which however, does not mean that we have not been through hell.
In 2007, Estonia was the target of extensive cyber attacks and it was a difficult situation for us. It was our strategic choice at that moment to take the problem and turn it into an advantage. The NATO Cyber Defence Centre is operating in Estonia today, the EU IT Agency will start operation next year and Estonia has become a spokesman on cyber defence subjects on the international arena. Our universities offer programmes of master studies on the cyber defence subject and intense scientific research is performed. The cyber defence subject is increasingly moving also to private businesses, e.g. Symantec has expanded its A&T centre in Estonia in the recent years and several start-up businesses are striving forward in this field.
So... The rapid developments in the cyber world are bringing along several heavenly and hellish experiences for Europe both today and in the future but by learning from each other we can be better prepared for them and make them work better for our benefit. The conference today with the participation of representatives of innovation agencies of all European countries is the best place for sharing such experience and generation of new ideas.
It is important for us next to overcome the internal market failures with our close cooperation. This is an absolutely necessary step to catch up Japan and the USA also in the field of innovation.
Thank you and have a useful day!
