Europe needs think-tanks to match its ambitions
 

W. Chan Kim and Renée Mauborgne
  

VIEWPOINT

Rather than throw money at them, more information should be available about the strengths of the continent's research centres.

Whatever the faults of European leaders, lack of ambition is not one of them. In March 2000 they unanimously agreed to make Europe, "the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth". 

This goal has thrown innovation to the top of the strategic totem pole. In the industrial economy, one could reasonably argue that scale and size were the chief measure of competitiveness. In the post-industrial economy, however, innovation is the driver of revitalisation, job creation and the growth of new enterprises. With the US economy slowing, is Europe building an engine of innovation?

To glimpse an answer we have looked at European and US think-tanks central to research competitiveness. Along with corporate research and development centres, think-tanks are the most important "idea centres" for building Europe's future innovation and growth advantage.*

First, the numbers. Although the European Union has a larger economy, the US has 30 per cent more internationally recognised think-tanks - that is, research institutes composed of scholars and scientists with academic, government and/or private experience. Most of such centres in both Europe and the US are independent (80 per cent in the US and nearly 70 per cent in Europe). A handful are university and government affiliated but otherwise independent. Moreover, the total number of researchers and the budgets for each are also higher in the US. The 82 internationally recognised think-tanks in the US had a total budget of $1.2 bn last year for 8,500 staff. Their 58 European counterparts employed 4,400 people and received $300m.

An equally telling insight came from gathering the data. In spite of all our efforts, we could find no single repository of information about European think-tanks. National inventories were not easily identifiable or accessible and in many cases seemed not to exist. In the US, by contrast, it was relatively easy to identify, sort and classify think-tanks.

If these essential actors cannot be identified, how can the European public fully benefit from the knowledge they produce? How can small and medium-size companies seek out and learn from their efforts?

A second weakness - in both the US and the European Union - is a lack of systematic scrutiny. In the industrial economy, this laissez-faire approach may have been acceptable. It is not today, when ideas and innovation are among the strongest correlates with competitive strength.

Something that is not measured is often less competitive and productive. In going to think-tanks' websites, reading their materials and talking to members of staff, we found it pretty unclear how performance and productivity were assessed.

The best proxy for think-tanks' performance is the number of citations they and their staff receive in important publications for their work. Yet this measure, which was offered by an observer of US think-tanks** is only an indirect gauge of performance.

A measure of effectiveness would allow for limited budgets to be awarded to those that are most effective that than the best solicitors of funds.

More than 40 per cent of European tanks are predominantly funded by the public sector, compared with less than 15 per cent in the US, giving Europe particular reason to ensure proper competition for public funds.

Europe also has relatively few think-tanks that convert scientific and technological innovation into commercial opportunities. This has cost Europe jobs and competitiveness. Quartz technology was invented by the Swiss but exploited by the watch industries of Japan and Hong Kong - until Nicholas Hayek created Swatch. In the US in the past 10 years the mass of wealth and job creation has come from linking new ideas to commerce.

In their own ways, Starbucks, the coffee shop, Home Depot, the DIY chain and Wal-Mart today the largest employer in the world, all applied innovative ideas to the mass market.

The money invested in European and US think-tanks and R & D centres is large and growing. Should the benefits that flow from them too not be markedly increasing by releasing further potential for research?

Before throwing more money at the issue, Europe would be wise to start identifying the wealth of think-tanks in its midst, ranking and assessing their performance so that they can openly compete for funds and their knowledge can be better leveraged, and orientating think-tanks and R & D centres - at least in part - to commercial opportunities.