'Failure to innovate will inevitably destroy wealth and our economic strength'

2006 Van der Grinten Lecture in Venlo

Venlo, The Netherlands, 22 November 2006 - 'The failure to innovate will inevitably destroy wealth and our economic strength'. This was the key message of Prof. Hans-Jörg Bullinger, President of Germany's Fraunhofer-Gesellschaft, at the annual Van der Grinten Lecture today in Venlo, hosted by Océ. Also addressing the international audience was Océ CEO Rokus van Iperen who focused attention on innovative developments in the community and in businesses. The event is named after pharmacist Lodewijk van der Grinten, who through his technological and commercial innovations in the 1870s laid the basis for the Océ company.

Mediocre investments, mediocre results

Prof. Hans-Jörg Bullinger is President of Germany's Fraunhofer-Gesellschaft, which is the largest applied research organisation in Europe serving both the public and private sectors. 'If we only invest in research and development (R&D) at a mediocre level, then all we are ever going to achieve are mediocre results,' he said.  

Prof. Bullinger underlined the vital need to increase R&D efforts and expenditures Europe-wide if both companies and national economies are to survive the ever-stronger winds of economic change and to stay alive in the long term. 'Revolutionary business models are destroying classical corporate structures, and aggressive newcomers are swallowing up cumbersome traditional concerns.'   

New models needed in Germany

Referring to the situation in Germany, Prof. Bullinger said a long period of relative stability has come to an end, with the country's Wirtschaftswunder not just stagnating but actually proving incapable of keeping up with today's globalised markets. 'We desperately need new models and concepts to enable us to react quickly and flexibly to changes in our environment,' he said. 'The ability to innovate has become the focus of our attempts to make provisions for the future.'
 
But innovation is not just a task of the free economy, Prof. Bullinger pointed out. Most nations have realised that inventions and discoveries can only grow and thrive on fertile ground in an innovation-friendly society. The frequently cited Lisbon declaration aims to make Europe the most innovative region in the world by 2010, with R&D funds increasing to three per cent of GDP. But at the moment spending EU-wide is just 1.99 per cent. In recent years Germany has made very little progress in its further development as a research nation, and the Netherlands is trailing even further behind with budget cuts by both state and economy.

Number of R&D experts in China exceed total German workforce

But money alone will not generate better research results, Prof. Bullinger warned. We also need to evaluate the efficiency of our research structures and gain more excellent research from each euro spent. Posing a particular threat is the rapidly changing global balance of power. China has now advanced to become the third strongest research country in the world, with an R&D budget of 103 billion dollars. The numbers of Chinese researchers are growing exponentially, for example, between 1997 and 2004 more new scientists and engineers joined the field of research in China than the total number working in Germany. India is showing a similar dynamic development, and with a 21 billion dollar R&D budget has become the world's tenth strongest research nation.
 
With companies increasingly linking their R&D spend with cyclical developments focused on short-term economic success, the economy has withdrawn from long term strategic research, reducing companies' chances of opening-up new markets. The state must therefore play a more important role by funding public research. The goal is to concentrate on existing competences in areas where Germany's traditional strengths can be consolidated and new, promising technologies can be expanded.
 
Prof. Bullinger advocated flexible innovation networks linking universities, research institutes and companies as models of the future. Companies and research institutes should no longer attempt to research and develop on their own, but should become familiar with other people's inventions and open themselves up to new forms of resource bundling and competence networking.

For more information:

Nick Gale
Manager Media Relations
Océ Technologies
Tel.: +31.77.359.5628
Email: nick.gale@oce.com