Pre-Presidency Conference, Ljubljana, December 3-4,2007

1. Lisbon Strategy 2.1:
Europe - the most creative
economy in the world
Pre-Presidency Conference, Ljubljana,
December 3-4,2007
dr. Žiga Turk, minister
Government Office for Growth
SLOVENIA
ziga.turk@gmail.com

2. 2008: Starting a new chapter
in European history
end of period of EU looking inward
treaty signed, form defined,
expansion from EU15 to EU27
success of Euro
time to look at the content, not form
time to look outward
time to shape, not respond to globalization

3. Lisbon Strategy is response
to globalization which is
driven by …
freedom in politics
fall of iron curtain and Berlin wall
freedom in trade
free trade agreements in WTO and GATT
advances in logistics
of goods: container ships, DHL, UPS …
of information: internet, mobile phones
Europe a follower, not driver of these
processes

4. Context - Lisbon Strategy
Lisbon 1.0 (2000)
most competitive economy in the world
Japan and USA
Lisbon 2.0 (2005)
growth and jobs
looking inward
if it's not broken don't fix it …
Lisbon 2.1 (2008)

5. SWOT
Strengths: cares for Weaknesses: no risk taking,
little individualism, depending
people, cares for nature,
on government, highly
quality of life, social regulated, low entrepreneurial
security, health system, drive, weak r&d - industry links,
culture of peace, human decreasing quality of education,
rights, tolerance, weak capital markets,
unreadiness to hard work, hard
cooperation, tradition in
study …
science and art,
Threats: does not address
humanism … weaknesses, graying of
Opportunities: builds on population, unable to compete
strengths, attracts talents, with Asia, closes itself from the
world, Europe is satisfied, tired
innovates in all aspects of
and lazy
living, adapts and opens
up to the world, projects
its values to the world,
dynamic economy

6. In the wake of the Asian
century
1800s … European Century
1900s … American Century
2000s … Asian Century
quot;they know it belongs to themquot;
again!

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

8. Innovation?
United States graduated roughly
70,000 undergraduate engineers
China graduated 600,000
and India 350,000.
½ of software developed in India
½ of Fortune 500 outsource software work to India
new R&D centers of Microsoft, Cisco, Google, IBM … are
in Asia, not Europe
by 2020 80% of scientific papers in sci&tech will be
written by asians
out of top 10 universities 2 in Europe
Asia (Singapore) is setting education standards

9. Innovation is
not enough!

10. The shift
Agriculture Age (farmers)
Industrial Age (factory workers)
Information Age (knowledge
workers - innovators)
Conceptual Age (creators)
Source: Dan Pink, A Whole New Mind

11. Theoretical basis
Schumpeter:
products fulfill needs
quot;profit is result of innovationquot;
Dan Pink (rephrased):
products fulfill passions
quot;profit is result of creativityquot;

12. Do you buy
what you
need?

13. Or do you buy
what you
think and feel
you need?

14. Do you pay
for function
or do you pay
for meaning?

15. Added value
in function
or in
meaning
?

16. Price of function is droping,
and price of meaning rising
image design
image design quot;healthyquot;
quot;healthyquot;
quot;home
quot;home
trade mark
trade mark madequot;
madequot; “fair”
“fair”
marketing trusted
marketing trusted
price of meaning
environmental
environmental
yy
who can think
friendly
friendly
of it
who can
sell it
who is
willing to
30 EUR
price of funcion 1 EUR
pay for it
just function more

17. Who makes
meaning? what is meaning?
what gives meaning?
what influences
What gives
meaning?
values, morals,
virtues!
meaning? MORALIZATION OF
THE MARKETS!

18. Innovation 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.quot;
Creativity: quot;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

19. Left 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 independent
right brain - intuitive, artistic, sprititual
… depends on cultural background
Source: Dan Pink, A Whole New Mind

20. “Human
creativity is the
ultimate
economic
resource.”
Source: Richard Florida,
The Rise of the Creative Class

21. War for Educate talent
talent! Attract talent
Retain talent

22. Florida's 3 quot;Tquot;s
Talent (educate, attract, retain)
½ mil. top EU engineers and
researchers abroad
Technology
attracts talent
Tolerance
makes talent stay

23. Back to
Lisbon 2.1
creativity,
entrepreneurs
hip, values …

24. Structure of Lisbon Strategy 2.1
citizen dimension (!)
member state dimension
open method of coordination
European Union dimension
(4) caring for the environemnt
(1) innovation and creativity
global dimension (new)
(2) business environment
si.nergy
(3) caring for people
(1) innovation and creativity
(2) business environment
(3) caring for people
(4) caring for the environment

25. Growth of EU companies
European
companies
revenues
consolidation
consolidation
profitability
/monopoly
/monopoly
gap
gap
innovation
innovation
& start-up
& start-up
gap
gap
world
companies
industry maturity
phase 1: phase 2: phase 3: phase 4:
opening scale focus balance/alliance

26. Jobs: Invest in HR
souce:
Europe’s Eroding Wealth of Knowledge
Jean Pisani-Ferry

27. Jobs: Higher GDP,
less endowment at lay off

28. Education challenge

29. Focus in LS 2.1
knowledge, innovation and creativity
keyword: creativity
growth, competitiveness & entrepreneurship
keyword: entrepreneurship
jobs, human resources
keyword: talents, flexibility, best person for the job
energy and climate change
keyword: income or cost
management
organize CLP in 4 themes, have CLP reviewed yearly as well
suggest organizing NRP 2.1 into 4 themes
suggest yearly member state reporting into 4 themes

30. 1. Pillar: Increasing the EU’s economic
potential through R&D
Promote Creativity as a horizontal issue to make Europe the
most creative place in the world
Innovation: 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 freedom
Establishment 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.

31. 2. pillar: Developing a competitive
economic environment in the EU
Promote enterprenurialship and growth of SMEs
Access of SMEs to sources of funding
Company 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 patent
the comprehensive strategy on intellectual property rights

32. 3. pillar: Adapting the social model to the
modern 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 needs
External migration: demand on higher skilled workers?
Respond to the demographic trends

33. 4. pillar: Energy and climate change
Promoting sustainable development and renewable energy
recourses
EU 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.

34. Focus (summary)
knowledge, innovation and creativity
support for JTI, technology platforms
widening of ERA towards SE Europe
knowledge as 5th freedom
ERA and ERA
networked approach to concentration
growth, competitiveness & entrepreneurship
entrepreneurship, education, role models
SMEs, early stage financing
internal market (review)
continued reduction of administration burden
jobs, human resources
sharing best practices on flexisecurity
improving education of youth and adults, weakness in knowledge triangle
perspectives of the young
energy and environment
environmental policies as key driver of innovation and consequently economic
growth

35. Creativity as the horizontal
issue in the four themes
innovation and creativity
not only engineers but designers, artists
competitiveness
how to make talents entrepreneurial
people
how to educate, attract and retain talent,
how to make talent entrepreneurial,
how to flexibly employ talents
environment
make it into a value, make it into a business
opportunity

36. Role of Europe in
globalization
it is ultimately about values
well 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 property
export these values
creating products fitting this world view
exporting products
creativity is the key!

37. We have
legacies and
traditions to
build on!

38. PS.

39. The Chinese
invented cheap
paper.
In 15th century
Europe learned Democratic use of
paper. It can be used
for anything. So many
to use it. more people can
learn, create …

40. The first
communi-
cation
revolution

41. The
Reneissance
follows.
Europe takes In ethics, arts,
science, technology.
the lead.
World domination
follows. Culminates in
the early 20th century.

42. In the20 th
Century
Americans Democratic use of
invent the digital technology.
Anyone can be an
Internet. author.
Anyone can publish.
Do movies.
Do music.
Europe learns Spread ideas.
to use it.
Values.
His or her own.

43. The second
communication
revolution

44. Not in colonies. Not in
steel production.
In ideas. In values.
Creativity 2.0
Everyone gets
involved
Creative, media
empowered society!
What will we Or we get so poor
manufacturing will
come back to Europe.
make of it? No room for
complecancy

45. References
Dan Pink, A Whole New Mind
Richard Florida: The Raise of the
Creative Class
Jeremy Rifkin: The European Dream