Fostering Invention and Innovation: Europe’s collaborative R&TD initiatives

Technology,1 and the rapid pace of innovation, are the most dynamic forces for change in the international system. Schumpeter (1942) saw technology as the main engine powering capitalism. For business, technology constitutes a core variable in the competitiveness of firms. Corporate competitive advantage derives in large part from the sophistication of a given firm’s technology base; together with the firm’s ability to constantly introduce or adopt new technologies (Rosenthal, 1993, p.9). Technology may be described as the fourth and most important factor of production (Williams 1984, p.70). Access to know-how, to technology, is a constantly increasing factor in the world economy, in a way that access to markets has been in the past. Through its impact on the industrial base of the modern state, it has a pervasive effect on a nation’s long-term economic performance. Technology shapes the rules of competition and demarcates those with power from those without (Lawton 1997a, p.1). Dynamic efficiency (the speed with which an economy develops and uses new technologies) is a vital part of this power relationship. When formulating technology policy for industrial competitiveness, it is vital to distinguish between supporting technology development and facilitating or encouraging dynamic efficiency. This differentiation has not always been evident in European technology policies.