Last month, TCS Daily and the Property Rights Alliance hosted a high-profile debate in Brussels featuring two prominent Members of the European Parliament, Toine Manders and Britta Thomsen, and two NGOs to discuss "The Creative Class: Who Owns the Future?" In the engaging atmosphere of the debate, both MEPs called for stronger protection of intellectual property (IP) right protection in the EU as a means to stimulate creativity and generate more jobs.
As European director of CompTIA, which represents the Information Communication Technology (ICT) industry, I could not be more thrilled by their comments. Yes, Europe needs a strong regime for protection of IP. But when will we get it?
Last summer, the European Parliament rejected a proposed directive that would have protected computer-implemented inventions. Different arguments motivated MEPs to vote against the legislation, including the belief by some that passage of a harmonized regime could put small- and medium-sized enterprises (SMEs) at a disadvantage both in the EU and around the world.
On the contrary, a solid legal foundation provides more certainty and therefore helps SMEs to avoid huge costs on legal matters - as is currently the case. Today, EU companies, especially SMEs, are still waiting for a strong IP regime, which would ensure that inventors are able to benefit from their creative inventions and receive financing for their projects.
Financial institutions are extremely reluctant to loan money to small SMEs for software development, due to the obvious lack of a strong IP regime. With little or no IP protection, banks consider any potential loan to an SME in the ICT industry as a "risky" investment and, hence, lend less money than they would otherwise do in a context more conducive to IP protection.
Companies in Europe's ICT sector - nearly half of which are SMEs - are struggling on a daily basis to compete in the global workplace. They valiantly strive to support research and development to stimulate innovation and generate higher employment within the EU. All the while they are hamstrung by a system that does not adequately protect and promote its creations.
So it is perhaps not surprising that, according to latest figures, in the EU the top 500 private R&D spenders actually reduced their R&D investment by around 2 percent. Outside the EU the top 500 spent 3.9 percent more.
Thus, it is not hard to see why the economies of "old Europe" are faltering, and why over the course of the last decade unemployment within Europe is twice or more what it is in North America. During the past decade, Canada's economy has grown by 44 percent and the US is up 41 percent. Meanwhile, France has seen only a 22 percent rise and Germany an increase of 14 percent. The figures speak for themselves.
As envisaged in the Lisbon Agenda, policymakers recognized all the way back in 1999 that EU had its work cut out for it in making the EU the most dynamic and knowledge-based economy in the world. That statement of goals aside, however, the EU still lags behind the US in terms of economic capacity.
Is real progress being made?
In Europe, the results are yet to come. We are experiencing more competition than ever from abroad, amplified by the fact that the Asian economies of both China and India are becoming the world's new Silicon Valleys, picking up the slack created largely by the EU's flat-footed efforts. A key aspect to this slide is the EU's inability to modernize and harmonize its IP regime, frustrating integral private investment needed to shoulder risk for SMEs and large companies alike. Without private investment, innovation cannot hope to flourish.
It is clear that there is a need for less talk and more action.
In its report to this week's EU economic summit, the European Commission acknowledged the crucial role the ICT industry can play in creating jobs and increasing the level of employment in the EU. The meeting of course is focused on the Lisbon Agenda and the promotion of job creation and innovation in Europe. Concerning the attempts to propose new patent legislation, we can only hope that MEPs will do better if the Commission were to allow them to vote on it again.
The EU cannot have it both ways - thriving as a knowledge-based economy, yet not offering the tools to adequately protect that knowledge. Thus, the EU must deliver strong protection of its IP. This, in turn, will both stimulate innovation and create long-term jobs, and will go a long way towards fulfilling its vaunted Lisbon goals.
The author is Director of CompTIA, Europe.