Knowledge-intensive services spring from EU platform

The centrepiece of the European Commission’s push to make the service industries more innovative is establishing a networking arrangement - styled as a ‘European platform’ - for knowledge-intensive services.

Services are thought to offer significant opportunities for innovation that have been under-exploited until now. In its 2006 strategy for innovation, the Commission declared: "Not only does the service sector account for more than two-thirds of gross domestic product (GDP) and employment, but there are also many possible synergies with industrial innovation. Since much service innovation is primarily linked to the business model rather than to developing new technologies, it is often relatively accessible to less technologically developed regions."

At this point the Commission already had in mind the creation of a platform to help ‘incubate’ innovative small companies in the service sector. However the platform that was opened up in May, inviting requests for funding, is far more ambitious. It takes on suggestions from a group of experts set up to advise on innovation and services last year.

The aim of the platform is to foster technological and organisational innovation in services, taking into account the interconnections between research, skills, entre-preneurship, finance and industry clusters. It will be a public-private partnership, supporting informal co-operation and networking between innovative service companies, knowledge-transfer institutes, incubators and investors.

The platform is intended to act as a repository of knowledge and good practice for innovation in services, and one of its first tasks will be to produce a guide on how organisational innovation can be encouraged. It will also establish a business community with at least 100 young, innovative service companies with high growth potential and, among other events, organise annual European venture contests.

Beyond this general work, the platform will establish up to three sector-specific networks. Each will assess the research and skills needs of potential high-growth companies in the sector and help them establish links with relevant research and business partners. The networks will also design and test improved support mechanisms for start-ups and young firms with high growth potential, and help them access funding.

The choice of sectors will depend on the response to the call for proposals, although applicants have been asked to focus on service innovations within specific industrial sectors, thus addressing the links between manufacturing and services. Among the Commission’s suggestions for suitable sectors are environmental technologies, new materials, biotechnology and satellite downstream applications.

The Commission has set aside up to €5 million for the platform over three years. It should be up and running in January 2008.

The expert group’s other recommendations have fared less well with the Commission, partly because they were based on setting up new organisations. One was to establish a European Institute for Service Innovation, which would identify future service needs, test new concepts and run pilot projects. A second was for an Innovation Service Exchange Network to be set up, to encourage communication between companies and with academia. Finally the experts wanted to see the EU provide financial support for the market testing, marketing and overseas expansion of new innovative service products.

"We are not in favour of establishing new special ‘service bodies’ such as those recommended by the group," explained a spokesman for enterprise commissioner Günter Verheugen. "We prefer to support the integration of service innovation in the activities of the European Institute of Technology by focusing more on services in the knowledge intensive communities, and to support service development within the 7th Framework Programme [for research] and the Competitiveness and Innovation Programme."

The platform has also taken on some of the tasks that the expert group set out for its other initiatives, for example establishing business communities and defining research agendas. "We firmly believe that such open platforms involving partners from different communities are more promising than the rather static approach of creating new service-specific institutes, which may even contribute to deepening the gaps between manufacturing and services," the spokesperson explained. "In this respect, it should be taken into account that the boundaries between services and manufact-uring are increasingly blurring, with manufact-uring being both an important user as well as a supplier of services."

The centrepiece of the European Commission’s push to make the service industries more innovative is establishing a networking arrangement - styled as a ‘European platform’ - for knowledge-intensive services.