European Governments Must Stop Investing in Airy Visions of Innovation and Start Guestioning the Ways in Which Their Own Systems and Structures Are Built. Policy Making Is Too Often Based on Outdated Belief Systems

Article excerpt

The EU has visions of Europe being the most innovative region in the world. But most European economies are stuttering away without much steam. Growth is anaemic. People are losing confidence in the political system, evident in the recent referendums on the European constitution, and unemployment remains high at more than ten per cent in countries like Germany and France.

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Are European governments doing the right things to stimulate innovation? Or are their efforts being blocked by industrial structures, which are preventing new firms from picking up speed?

Policy making often rests on belief systems that have been formed during certain periods or under special conditions. The current Swedish system (large companies, high R&D expenditures, poor general economic performance) has its roots before World War I, when public institutions entered into partnerships with big Swedish firms to ensure innovation and growth. This set in concrete the belief that only heavyweight companies could play an innovative role in the economy. That system, with its in-built preferences, still exists today.

This example illustrates the fact that governance structures and practices are often biased and ill-informed. Governments in industrialised countries experience this in many facets. Norway, for instance, is strongly committed to a macro-economic policy regime, which leaves less room for micro and cluster-related policies. …