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									"Check against delivery!"

                            Commissioner Janez POTOČNIK

        'Research: the private sector's partner in

                                Bled, Slovenia

                                17 May, 2007
Ladies and Gentlemen,

I would like to start by welcoming you to Slovenia and
congratulating you on choosing an excellent venue for this
year's conference.

The British writer Somerset Maugham wrote excellent
books, but also gave useful advice. He once said that at a
dinner, you should eat wisely but not too well – and talk
well, but not too wisely. You are the judge of whether I
follow his advice tonight.

The theme of this year's conference is 'Private sector and
development'. It is a short title, but holds a long story. I
will try to give you a very brief version tonight. As EU
Research Commissioner, it will not surprise you that I
want to concentrate on research and innovation's role in
aiding development.

People often divide the world into camps. There is the
developed world, the developing world, emerging
economies, First World, Third World, and so on. But as
we all know, in reality, these are just quick terms for very
different and complex stages.

Europe is a good example highlighting how these terms
do not always tell the full story. On the one hand, we have
several countries which invest more in research and
development than even leading countries, like the US and
Japan. But we also have many countries who still invest
less than the EU average as a whole.

The EU set R&D investment target levels with an eye of
these leading countries' levels. But we are also aware that
China will have caught up with the EU levels as early as
2009. In fact, its public investment in R&D recently
surpassed Japan's, making it the world's third largest
government investor in R&D.

We need to add to this changing picture the fact that
development, like research, does not necessarily start and
end at a country's borders. Look at places like Mumbai in
India: that one Indian city has more millionaires than
many individual EU countries – including probably this

And an American Express study found last month that
the Indian city which is now producing new millionaires
faster than any other is Bangalore. Indian is the fastest
growing wealth base in Asia Pacific – and Bangalore is
growing faster than the Indian rate.

And what is Bangalore famous for? It's research and
development base. Just ask Google, Nokia, Bell and the
many other companies already there.

There are poles of development in the heart of the Third
World and pockets of poverty at the centre of the First
World. Both can be addressed by increased private sector
involvement in research.

How? The increased globalisation of trade and knowledge
means that business and research offer more than just
solutions:   they    offer   innovation     and   economic

Let's look at solutions first. Take climate change for
example. The United Nation's IPCC (International Panel
on Climate Change) has said that poor countries will be
worst affected by climate change's effects, such as
increased threat of desertification, floods, mass migration
and loss of biodiversity.

But the knowledge, the expertise to tackle climate change
is based largely in richer countries. And so are the
opportunities to commercially exploit the new advances.
So by researching and innovating in more so called
developed countries, we can alleviate the worst effects of
climate change in the poorer ones.

By the way, some would say this is not just an
opportunity, but a duty. The IPCC's figures show that we,
the 20% of the world who live in rich countries, create
almost half the world's greenhouse gases.
I am pleased to say we have increased the EU funding to
both environmental and energy research in the new EU
Framework Programme, FP7.

But my message tonight is that this research can only
bring real solutions to both ends if the private sector is
committed. EU countries recognised the importance of
this, when we committed to increase spending on R&D to
3% of total EU GDP in 2000. Of this, two thirds was to
come from the private sector. I am sorry to say that we
still have a long way to go on both targets.

What can we do to improve this?
We know that business needs incentives to invest. And
that is why the EU has an innovation plan, which joins up
many areas of interest to the private sector. We are
increasing links with business before, during and after
research projects. How? By

  • collaborating closely with the private sector on
    deciding which the research areas are selected for
    research workprogrammes, as well as providing new
    sources of financing for riskier research

  • by entering into public/private projects for major
    research sectors, with new multi-million Joint
    Technology Initiatives about to be launched this year

  • and   by   improving     intellectual   property   right
    protection for knowledge – both across the EU with
    a new attempt to style a European Community patent
    and also specifically in research, by clarifying IPR
    rules for EU funded research.

Why is this important? Because recent studies indicate
that a high quality public research base is one of three
main factors for attracting business R&D investment.

And this is a lesson for all of us, North and South.
Attracting R&D intensive investment, especially foreign
direct investment is a challenge for everyone – but one
worth addressing. Because the rewards of this kind of
investment are undeniable.

It brings not only capital and jobs, but also knowledge,
skills, technology, and, importantly, opportunities.

For developing countries to attract quality foreign direct
investment, they must first invest in their knowledge base.
This means education, research, infrastructure and

By doing this, developing countries will be better
positioned to tap into the world economy. The EU
research policy is helping build up this knowledge base in
the developing world.

  • We have science and technology cooperation
    agreements with specific countries;
  • We have opened up the Framework Programme to
    third countries;
  • And researchers from all over the world are now
    increasing the mobility of knowledge and skills
    through the Framework Programme.

We know that cooperation is one of our biggest weapons.
That is why more than half of the EU's Framework
Programme's budget is dedicated to cooperative research
projects. And we also know the private sector is
fundamental if internal research is to become external

My final point is that research, like development, is never
static. And so we need to keep our eyes and ears open to
the latest needs, the newest directions. That is what the
European Commission is doing right now.

We have opened up a public consultation on how to
develop the European Research Area. We want to know
  • How can it better serve researchers, or businesses or
    developing countries?
  • How can we increase mobility and cooperation,
    between countries and sectors?
  • What new infrastructures are needed to make the
    process work more smoothly?

We want feedback from as many people as possible. I
encourage you all to take the opportunity to give us your
comments. They may lead to concrete changes very soon.

Ladies and Gentlemen,

Europe alone cannot 'create' development. Nor can the
private sector. Nor can research.

But together, they can create the conditions for
development. That is the task in front of us in the future.

But now, I will leave you now to concentrate on the food
in front you tonight and wish you a pleasant meal, or as
we say in Slovenian: "Dober tek!"

Thank you.


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