Thursday, July 21, 2005

Sidetracked

No, no, not this blog, but the Lisbon Agenda. I expect our readers will recall that its purpose was to turn the European economy into the fastest growing, most dynamic one with the best IT base in the world by 2010.

Well, one or two things have gone wrong. In fact, they were never right. In the first place, of course, there is no such thing as a European economy. There are economies in the various countries and they manage in various ways (mostly badly).

Furthermore, economic growth depends on economic initiative and enterprise. The idea that you can somehow create enterprise, initiative and entrepreneurship, thus producing growth, by a set of rules, lists of things to do and tables on which things done are ticked off, is laughable. But that is the mindset of the people who run our countries. They believe in management not politics, in corporatism not business and they are absolutely convinced that nothing and nobody can function without a set of rules provided and executed by the politicians, civil servants and regulators.

So much for the basis of the Lisbon Agenda. Alas, some of the details have not been too hopeful, either.

In order to encourage investment in R&D, the Commission has established a European Research Council. Well, that should solve our problems without the slightest difficulty.

According to the BBC website:

“The ERC is envisioned as an independent, quality-driven funding body run by scientists, modelled on the US National Science Foundation and National Institutes for Health.

Supporters argue that it will help drive up the competitiveness and, by extension, the quality of scientific research within Europe by giving a clearer focus to the way funding is distributed.”

Well, of course, supporters would argue that, wouldn’t they. The rest of us might find it difficult to make that logical connection between a pan-European institution, made up of scientists, who happen to be good at politicking (the two British membes are, we are unsurprised to find, Professor Wendy Hall, head of the School of Electronics and Computer Science, at the University of Southampton and Lord May of Oxford, the outgoing president of the Royal Society, Britain's academy of science) and competitiveness or quality of scientific research, pure or applied.

The unfortunate fact is, that, as the BBC so nicely puts it:

“Europe is now on track to miss the so-called Lisbon objective of boosting its spend to 3% of GDP by 2010.”

Quite so. In fact,

“The figures show the bloc devoted just 1.93% of its wealth (GDP) in 2003 to this important area - compared with 2.59% in the US and 3.15% in Japan.

Some emerging Asian countries, such as China, are now increasing their R&D investment to a rate where they will soon catch and overtake Europe.”

One rather interesting and worrying aspect of it all is that while R&D expenditure by EU firms in the USA has increased by 54% between 1997 and 2002, expenditure by US companies in the EU in the same period increased by only 38%.

This would indicate that it is the European or, more precisely, EU environment that is slowing down research and development. I am not convinced that creating a pan-European agency is quite the answer to that problem.

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