I'm in Andorra at the Future of Europe Summit, which takes place for the first time. It's my first time in Andorra, a small place hanging on mountain slopes, living on commerce, banking and tourism (but while the ski season is supposed to start next week, there is no snow) and carrying a somewhat dodgy reputation. The country is rich, but traffic is chaotic; public transit infrastructure is weak; scaffolding and construction are everywhere, as are shops: this is a no-VAT shopping nirvana. "We didn't really have any productive or industrial activity here, it's tourism and trade", Juli Minoves, the Foreign Affairs Minister, told me over coffee. In the last couple of years however, the government (like many other governments) has tried to reposition the country for the knowledge economy - and this conference (200 attendees from all over the continent) is part of that effort. Here are my running notes.
After a short welcome message by Albert Pintat, Andorra's prime minister, Claude Smadja, the conference's producer, says that the FES is designed as a platform for imagining "how to re-engineer Europe's dynamism and redefine its role in the global economy". In recent years, initiatives to relaunch Europe have been numerous - the most prominent being the EU's Lisbon Agenda, established in 2000 to "make the EU the most competitive and dynamic knowledge-driven economy by 2010". But "it has not been working - says Smadja - almost all of its objectives won't be met". There is a need for a more aggressive, imaginative, flexible thinking. That's the aim of this conference (I will be moderating a couple of sessions on innovation and entrepreneurship today and tomorrow).
Mark Minevich, the founder of Going Global Ventures and author of "Six Billion Minds", is the first speaker and does something totally unexpected: he shows a couple dozen slides full of data and quotes on poverty, on change, on speed, on interconnectedness, on globalization, and shows them in silence, asking the audience to read them before he starts his speech. The audience is baffled, but reads, and then Minevich moves into the speech, talking about globalization - its benefits and the imbalances it has created - and warning the Europeans in the room about the growing role of China and India. His tone is at moments surprisingly adversarial, setting a tone of "us-against-them", although he manages to build in softer statements such as "the new economic paradigm is about the economy of knowledge, and it requires six billion minds working together to create insights, ideas, innovation". He points out the absolute crucial need to re-think education. A point emphasized by Claude Smadja: "the challenge for Europe is to learn to 'fall forwards' - to not to be afraid of failures, and learn from them. Europe has developed a mindset oriented towards security and predictability, while we should be risk-takers. It's a revolution of mindsets that we need; this question is at the heart of the challenges that face Europe today, and it starts in the education system". A Chinese woman in the audience, Yohong Ai, takes exception with Minevich's adversarial views of China: "We see the outside world as a place of cooperation, not competition". Another woman, from Spain, adds that "countries that are experienced in cultural coexistence will have more capacity to go ahead".
Holger Hartmann, the CEO of BadenSolar, a German company selling solar energy systems, and Christoph Loch, professor of corporate innovation at French business school INSEAD, are the panelists in a session on corporate innovation moderated by Liz Padmore, former director at Accenture.
Loch says that innovation is not only about new products and new businesses; it's also about processes, about continuous improvement; and about new ways to dealing with the customers. In all of these dimensions, "large European organizations are quite good at innovation". However, what large companies in Europe are not doing: they're not created alot of jobs (they generally operate in mature markets, have productivity improvements). Jobs are created by small companies. That's where Europe has a problem: we don't create enough companies, they don't grow enough. We have a problem in renewing companies. Governments can set frameworks, encourage education, but "the dynamics of innovation lies in the private sector". Collectively we have to innovate ourselves out of fear of failure - and (reference to the previous speech) we should stop feeling that we're under siege by China and India.
Hartmann is a former consultant (theory) who became an entrepreneur (practice), and tells a tale of managing a company in an innovative market growing up to 30% per month, in an industry where shortages of materials are becoming apparent (the world's production capacity for silicon, key component of solar panels, is insufficient, and prices have doubled): "you need to learn to balance customization of the offer with streamlining of the business; at the end of the day, innovation in products and processes is about output".
My take is: Europe has a problem with a culture that tends to limit risks and make them predictable, rather than seek to diminish the cost of failure - which would allow for more risk-taking. That's a known issue but, suggests Lucy Marcus of Marcus Ventures Consulting, there are signs that it's starting to be overcome, that people are taking risks with their ideas.
In a lunch session, Fields Wicker-Miurin, co-founder of LeadersQuest in the UK, and Edward Girardet, a Swiss author, explore the question of leadership. Wicker-Miurin talks about creating LeadersQuest, which is a non-profit that organizes "quests" (structured trips) for high-achieving individuals to major regions of the world, seeking knowledge and understanding. "We can't ignore the world anymore, be it Darfur or the latest technology; we are at a critical point and we have only a little window to make the right choices; the world is our mirror, it reflects our values and priorities and choices". Where do we go to find out about the right choices? "I don't trust what I read in newspapers, I don't trust futurists, I learn best by going and seeing and debating and disagreeing and sharing and testing" and that's why we set up LeadersQuest: we learn by going, not by staying where we are".
What are the characteristics of a leader? "Courage. Understanding the difference between raising a concern and influencing a change. Being the change you want to see in the world." (Ghandi said that, I believe) "Remove obstacles - including removing ourselves to create a space for the next generation to come and take responsibility. Being multisectoral and multigenerational in the choices we make". How do you really change things? "The world needs hundreds of millions of leaders - maybe even 6 billion leaders", says Wickers-Miurin. However, she also points out to the business leaders in the room their own responsibility: "we tend to blame politicians, but the truth is that we should try to make it easier for them to take the right decisions".
I'm moderating the next panel, on innovation and entrepreneurship, so just a few notes. Panelists are Adriaan Dierx, head of competitiveness and innovation at the EU; Rebecca Harding, who runs the Global Entrepreneurship Monitor at the London Business School; Antoni Martinez, head of the Energy Park at b_TEC in Barcelona (see also previous post), and Javier Echarri, secretary general of the European private equity and venture capital association.
Dierx talks about innovation from a policy-making perspective, pointing out that innovation is complex and systemic in nature. "Investments in knowledge and human capital are crucial drivers of innovation, but in order for it to blossom we also need functioning markets and real demand (from both individuals, businesses and public entities)", he says.
Rebecca Harding runs the Global Entrepreneurship Monitor, an annual assessment of the level of entrepreneurial activity in 40-something countries. The next report is due in early January. I ask her if she can share some findings. Higher level of entrepreneurialism are emerging in many European countries. "The dotcom boom, despite the stock market bust, has inspired many, and globalization has meant that entrepreneurial activity among European countries is leveling off". "The US is losing part of its gloss". "In Asia - but also in Germany - a big part of it is necessity entrepreneurship, not driven by innovation and ideas, but by the labour market's conditions".
Echarri stresses a point that was made in a previous session: "Europe is not that bad, actually; education and research are excellent". "We use US parameters to measure our entrepreneurial levels, but here innovation happens in big corporations, the state plays a bigger role, so lots of innovation is kind of hidden". He sees the big problem of Europe in scaling new companies, and advocates radical positive discrimination in favor of very innovative new entreprises: "We are distributing the money among too many, sprinkling here and there: we should focus".
Martinez describes the b_TEC project to create a technology district in Barcelona, underscoring the role of local entities (governments) in fostering innovation.
Someone from the audience asks whether entrepreneurship can be learned. Harding: "people that are very successful entrepreneurs are wired in a different way, it's not only about education. There is a "U" correlation between formal qualifications and entrepreneurship: high levels of entrepreneurship among people with low qualifications, and among highly qualified people, with a big 'soft belly' in between". Says someone else from the audience: "the idea that innovation is driven by competition and by consumer demand is dangerous. What drives innovation is the quality of people's thinking, their ability to see an opportunity and run through it".
Education is also the topic of the last panel of the day, with Fields Wicker-Miurin of LeadersQuest; Francesc Solé Parellada, director of innovation at the Polytechnic University of Catalunya; Magda Rosenmöller of business school IESE in Barcelona; and Aurore Wanlin, a research fellow at the Center for European Reform in the UK; moderated by Claude Smadja. There is a general feeling that there is something wrong today about Europe's education system. Europe is losing ground in terms of higher education, in terms of its capability to produce the kinds of skills and expertise that are needed in a world of global competition, in which the Western world has lost the quasi-monopoly on knowledge that it enjoyed for a long time. Smadja: "There are many centers of educational excellence in Europe, but looking at the efforts that India and China are putting into developing their educational capabilities, with resources and single-mindedness, it makes you wonder".
Wanlin presents some findings of a report published by CER a few months back, diagnosing the European higher education system. Generally, European universities don't perform good enough. There are about 2000 universities in Europe, and each is trying to do some research; the US has 3300 universities, but only 250 or so do post-grad student awards and are research-intensive. Which means (the same point made by Echarri in the previous session) that research funding in Europe is spread too thin. Parellada underscores the lack of accountability of university authorities, while Rosenmöller says that business schools represent in some way a sweet spot, having gained ground in international comparison.
Wicker-Miurin starts with a sequence of numbers: 600'000, 250'000, 70'000, 19'000: that's the number of annual engineering graduates in China, India, the US and the UK. When compared to the population, these figures are not radically disproportionate, but Europe clearly has a problem with scientific disciplines, which don't seem to attract big numbers (in the UK there are twice as many graduates in "creative" disciplines as in engineering). And she quotes a Chinese woman answering to a British reporter who asked what she thought of British Universities: "they are fine if you can't get into a Chinese one". "If you had two or three years of a future's leader life, what would we want that person to learn? If we ask ourselves this question seriously, I don't think that what we are currently doing in education would be the answer".