Prime Minister Vanhanen at the Networked Business and Government - Something Real for the Lisbon Strategy Conference in Helsinki

Chairman, ladies and gentlemen,
We have gathered in this Finnish Presidency conference to discuss the competitiveness and innovativeness of Europe, and also to find concrete measures for putting the Lisbon strategy in real life. The strengthening of European competitiveness is our common challenge. Responding to this challenge requires investment in research and development, focusing of R&D, efficient utilisation of ICT, and broad-based co-operation in many areas.

The seminar is well-timed, coming just after an important milestone in the Finnish Presidency: the informal EU summit which was held in Lahti last Friday. One of the main themes of that summit was Innovation policy as a source of European growth. The EU leaders had a good discussion and agreed on many important issues that have direct relevance for our innovation policy.

It was very clear in our discussions at the Lahti Summit that we need a comprehensive strategy on intellectual property rights in the EU. This is important part of an effective innovation policy. By placing importance - for instance - on the quality of patents, the EU could also put pressure on our competitors. We welcome the Commission's intention to prepare a comprehensive strategy on intellectual property rights in 2007. Patents are an essential part of intellectual property rights. We look forward to the Commission's proposals on how to develop the patent system in Europe.

We agree that the European patent system must be made more cost-effective and more predictable. We must also improve the litigation system. Basically we have three options: First, we can leave things as they are. This would be by far the worst option. Second, EU Member States could take a step forward through the London Agreement. The London Agreement relates to the simplification of the existing European Patent System. The third option is that we seek Community solutions in order to improve the patent system. This should be our ultimate goal.

Another central theme in our discussion was enhancing the co-operation between the private and public sectors. We agree that we need to help companies in finding early seed money. European Technology Platforms and Joint Technology Initiatives are excellent examples of public-private partnerships. Companies are willing to invest in these initiatives. Public funding by the Member States and the EU is therefore a high priority for some of the projects that are ready to be launched.

The Finnish Government has made a commitment to allocate public research funding to one of the most advanced initiatives called Artemis. Its aim is to enhance Europe's leading position in certain electronic systems, so called embedded systems that will become omnipresent in our daily lives from our cars to our refrigerators. The Finnish Government's total contribution will be 70 million euros over a seven-year period starting from next year. I am very pleased that the Commission gives its full support to this initiative and announced that it will go ahead with Artemis as a Joint Technology Initiative, the first of its kind, and also match funding.

We also had a discussion on the proposal to create the European Institute of Technology, which was adopted by the Commission only two days ago. The Institute should have a real impact in filling Europe's innovation gap. We are pleased that during our Presidency we will be able to start working on the details of this proposal in the Council. There are of course many open questions at this stage.

We also touched upon standardisation and agreed on its importance in supporting innovations. Our work on innovation policy will not end with the Lahti Summit. I will keep this high on the agenda during the rest of our Presidency too.

Ladies and gentlemen, as individual European nations, we are globally only small layers in the field of research and development, when we measure the expenditure spend on R&D and the number of researchers. However, by co-operation and by concentrating on quality versus quantity, Europe can really make a difference in the global markets.

During the Presidency, Finland has been concentrating on the challenges now facing Europe, such as globalisation, improving competitiveness, population ageing, climate change, energy policy and productivity of the service sector. Finland is also promoting the development of a broad-based innovation policy, drawing on the recommendations made in Esko Aho's innovation report as one source of ideas.

In the development of EU innovation policy we want to adopt a broader approach encompassing demand for innovation. Notwithstanding the importance of joint and national measures to increase research and development funding and to put it to more effective use, innovation policy cannot make a real difference unless measures are taken to develop the markets that encourage innovation and generate new demand for it.

Such measures include standards, IPR questions, public procurement, steps to make markets function more effectively, greater mobility of research resources and closer interdisciplinary cooperation between universities, business, public sector and civic society as a whole. And also bold structural changes in our society.

Ladies and gentlemen, Finland published its proposal for the third national Information Society Strategy in September. This new strategy is also available in English here in this conference. As the title of the strategy tells, we want to create a renewing, human-centric and competitive Finland.

Improving of productivity, especially in the service sector, is one of our national and European level challenges. This is also emphasized in our national strategy.

We see, that the information society of the future will be a well developed knowledge and service society, and the broad exploitation of ICT will make service production clearly more efficient. ICT will also enable the structural reform of physical and electronic services, in other words, the development of completely new production models, services and service combinations.

At the same time the border between product and service will become less clear: services will be commercialised and the customer will be offered combinations of physical products and services. This convergence of service production made possible by ICT represents a development direction that is parallel to the technical and industrial convergence now in progress.

In our vision for 2015 a move from industrial society structures to information society structures has occurred. Processes and operating models have been reformed and made more effective through the creative and productive utilisation of the opportunities provided by new, more efficient technology. Also the majority of routine work has been automated.

Ladies and gentlemen, we mostly talk about European innovation from the supply side: how to make European companies more innovative. However, we talk less often about the role of public demand, the role of European public procurers of goods and services in the innovation process.

Yet, if we look at many of the success stories in European innovation - the rise of the Alcatels, Siemens, Philips, Finmeccanicas, Ericssons, Nokias... we find that they all have benefited from the active engagement of a demanding first public buyer.

The demand side is vital in stimulating innovation. Through the procurement choices that European procurers make on a daily basis in the health, transport or government sectors, for example, European procurers stimulate the creation and influence the development of markets for products and services for all Europeans.

The public sector in Europe is facing great challenges for which it needs innovative solutions. By buying the development of solutions that do not yet exist, so called pre-commercial procurement, European procurers can engage effectively on the demand side, to use public purchasing power to steer the development of new technologically innovative solutions that address the needs of European citizens while at the same time stimulate local and regional innovation.

The European Commission has in its September communication on innovation highlighted pre-commercial procurement by the public sector as an untapped opportunity for innovation in Europe. Commission has also promised to prepare a handbook that will explain how pre-commercial and commercial procurement can stimulate innovation. Demanding public buyers can help us all to achieve greater innovation in Europe, give us more efficient public services and stimulate the creation of European lead markets for the products and services of tomorrow.

Ladies and gentlemen, consider this two-day conference a very important event, not only for its content but also for its timing. I also look forward to this conference coming up with new ideas for policy measures.

As you have all noticed, this conference has been built to be interactive. This interactiviness will also continue during the next weeks when the so called Helsinki Manifest will be prepared based on the results and conclusions of this conference. The Helsinki Manifest will be submitted to the forthcoming EU Presidencies, Germany and Portugal, and to the European Commission.

This Helsinki Manifest will be published on November 20th, the same day on which Finnish presidency will launch a European Network of Living Labs in Espoo. One part of this conference is a preseminar for that launch event.

Ladies and gentlemen, the issue of the European Network of Living Labs has been discussed in the context of European Information Society technology and innovation policies, including the i2010 policy.

However, the area is at the core of reaching the competitiveness, research and innovation goals, as well as European-wide Single Market as Information Space. The European Network of Living Labs is the first step towards a new European Innovation System. It can be highlighted as a tool for research, innovation and pre-commercialization processes at both regional and European level.

The Network of Living Labs is a realistic opportunity linking in a multidisciplinary and co-creative way the public and private stakeholders for innovation and growth, particularly in knowledge intensive, user-centric services.

The European Network of Living Labs improves the innovation performance especially in the pre-market development, prototyping, piloting, validating and take-up phases of the innovation process. This has a strong potential to lead to new job creation particularly in the knowledge society. The process also opens new avenues for innovation; as prerequisite for lead market and service industry co-creation, with wide participation of citizens as workers, residents, consumers and service users.

In this frame of reference, the European Network of Living Labs may serve not only for new human-centric knowledge society services, business and technology development; it may also offer better opportunities for global scalability of new innovations, e.g. bigger volumes from the beginning, and rapid market entries, while the innovation has been developed in many markets at the same time.

We should see this development as one of the major options to create together unique profile for Europe in global competitiveness: Europe is for human-centric, all-inclusive knowledge society services and technologies.

Ladies and gentlemen, Finnish Presidency is willing to work on behalf of our common goals and new European Innovation System. Together we can create renewing, human-centric and competitive Europe.

Allow me to wish you a very successful and result-oriented conference day!