2005 presentation on service innovation, productivity, R&D, and EU performance

1. Service Innovation and the European Economy - from Lisbon to London Ian Miles PREST, MBS, University of Manchester [email_address]

4. EU falls behind in research By Clive Cookson in London and George Parker in Brussels Published: October 23 2005 The European Union has fallen further behind the rest of the world in research and development spending according to new figures published on Monday… The increase in corporate R&D investment for 2004-05 was 2 per cent in Europe but 7 per cent in the US and Asia, according to the International R&D Scoreboard. South Korea had the most spectacular annual growth in R&D investment - 40 per cent - led by Samsung Electronics, Hyundai Motor and LG Electronics. The increase for Japan was a more modest 4 per cent. Europe's failure to keep pace with its competitors in "a race to the top" will be a key theme of this Thursday's EU summit at Hampton Court, near London. … A priority of the British presidency of the EU is to refocus the Union's €100bn-a-year budget towards R&D and away from traditional support for farming and struggling regions…. The R&D research and development scoreboard … lists the world's top 1,000 companies by R&D spending…. European companies as a whole have not increased R&D investment over the past four years, while their US counterparts are spending 12 per cent more on R&D than their four-year average. ….

5. The EU service economy Percentage Shares of Employment Service sectors are reported here: there are also growing shares of service activities within firms in other sectors sector ^

9. In general - services’ R&D growing faster US EU15 Services and R&D But is this a statistical artefact - improved measurement? Real Growth Rates of Business Expenditure on R&D as a share of GDP, 1987-1999

11. (Technology) Innovation Expenditure, Leading Services

13. Overall – services are slightly less likely to innovate But some services – especially KIBS – are highly innovative. Innovative effort also tends to be lower, and focused on acquisition. And many of these are sources of innovation for whole economy Typically – poorer links to innovation systems.

14. Services Innovation Styles differ Source: Howells and Tether 2004

15. Barriers to Innovation 1998-2000 (CIS3) Lack of Innovation Economic Lack of Lack of Organisl. Lack of Regulatory Lack of Financing costs costs personnel market rigidities technical constraints response information information source: Pilat presentation of CIS3 data

18. End of Presentation