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The Transformative Power
of Service Innovation
Innovation in Services
Rome, Italy | 17-18 February 2011 | www.europe-innova.eu/rome2011
Prepared by Europe INNOVA Communications
2 5.1 Welcome addresses Productivity in Services 13 13 13 14 16 17 9. 7.5 6.the m-revolution: how service innovations change established service sectors creating new markets 5.4 4. 8.1 10. The Handing over of the Recommendations of the Expert Panel to Vice-President Tajani and the Introduction to the Policy Recommendations 9. From Internet to mobile applications .4 5. eHealth Cultural Heritage and the Arts Urban Mobility Publishing Financial Services Roundtable on policy implications Concluding remarks Friday.1 5.3 3. 18 February 8. 2.2 3. Industrial Policy and Service Innovation Concluding remarks .1 3. Welcome addresses Emerging trends in value chain development: the catalysing role of service innovation 3 3 4 3.3 5.Contents Thursday 17 February 1. Re-invigorating the competitiveness of European industries through service innovation: how service innovation changes traditional industrial sectors to become more globally competitive and efficient 3. The Automotive Industry The Tourism Industry The Food Industry The Furniture Industry Roundtable on policy implications 5 5 6 6 6 7 8 8 10 10 11 11 12 12 5.
“As such. which this entails. the subject has changed. stressing that “what matters is to know which service innovations have the potential to change the global value chains and modify the rules of the game in other industries. How service innovation is implemented in companies is interesting. emphasised the importance of this conference for the European Commission. Knowledge intensive services (KIS) represent a growing sector generating 49% of EU27 Member States’ GDP. the creation of a European Service Innovation Centre is deemed to be a pertinent line of action to follow.” Source: Eurostat Reinhard Büscher. This is why looking at the transformative power of service innovation is the right way to understanding its role in transforming Europe’s economy and societies and the policy implications. opened the conference and welcomed all participants. but what is more important is how policies can support it. Head of Unit for Support for Industrial Innovation at DG Enterprise and Industry. in particular. Service innovation is very difficult to measure. as well as the approach to having it included on the political agenda. he emphasised the need for a fundamental mind shift to put the customer at the centre of attention and address his or her needs and this may require involving new stakeholders. Vice-President of Confindustria Servizi Innovativi e Tecnologici. The sector also has higher rates of employment of women and young people than the averages for the whole economy. Welcome addresses Ennio Lucarelli.” he said concluding that “we have to invest in creating a favourable working environment for them. as it would feature the results of the Expert Panel on service innovation. they offer opportunities for these categories of people who have been severely impacted upon by the economic crisis. Since the beginning of its work one year ago. In considering the Expert Panel’s recommendations. he added.” In the light of this.Thursday 17 February 1. 3 . He stressed that considerable attention was being paid to service innovation and its importance to Europe and Italian industry.
many new forms of services will be created. It’s just not very evenly distributed. it proposed that European institutions should give urgent consideration to the selection criteria and governance of Innovation Partnerships. These Partnerships. from the Copenhagen Institute for Futures Studies in Denmark. with the need to consider products in a cradle to cradle1 approach. The future of service innovation also implies that some jobs.htm 4 . User-driven innovation is already a hot topic but it is necessary to have a vision to take things even further. and in the meantime. which are large scale demonstration projects or ‘demonstrators’ as they were referred to in the report. are seen to be key drivers of innovation and industrial policy in the EU. from suggesting new services to participating in promoting the products they like. In addition. in order to understand the elements that were driving change. the relationship between manufacturing and services is changing. in the UK. Its mission was to make recommendations on how service innovation could contribute to the Europe 2020 Strategy.Allan Mayo. Retailers Consumers Manufacturers Materials are recycled into new products Take Back Programs mail-back.” 2. as they tended to be more critical and volatile than in the past. and then to customer satisfaction. Looking at the global picture.” Martin Kruse also made the point that keeping pace with customers’ needs and keeping them loyal was a complex matter. reflected on the scope of the Panel’s work. Allan Mayo believed “if industry itself is moving towards customer-oriented approaches. take-back services will be created between consumers and recycling services. employee satisfaction leads to more loyalty and quality. He explained that the Panel comprised twenty experts chosen from 140 applications from all parts of Europe. who had written “the future is already here.com/cradle_to_cradle. considered how service innovation can change traditional industrial sectors and make them more globally competitive and efficient.mcdonough. collection sites. Emerging trends in value chain development: the catalysing role of service innovation Martin Kruse. such as selling tickets at the entrance of cinemas. Chair of the Expert Panel on Service Innovation in the EU and Head of Services Policy Unit in the Department for Business. Innovation and Skills. will rapidly disappear. Customers’ involvement in the production chain 1 www. China has already passed Europe in clean energy investments. For example. haulers. so must the policies. From a human resources point of view. The challenge for Europe’s economy is to be prepared for these changes and he quoted the American-Canadian author William Gibson.” and expressed his hope that “the Expert Panel report will be a springboard for concrete policy actions to be taken faster. local governments Martin Kruse concluded that a key factor in the future will be the changes in the production chain: customers will permeate the value chain at all levels. The Panel made a number of recommendations but in terms of promoting the application of service innovation to meet societal challenges. These experts had started by reviewing case studies of smart services.
Re-invigorating the competitiveness of European industries through service innovation: how service innovation changes traditional industrial sectors to become more globally competitive and efficient To introduce this theme. The objective was to constantly follow the customers and to become integrated into their value chain. 10 minutes away from the Audi plant. a member of the Expert Panel and Director of Sapience ’00 in the Netherlands. 5 . For example. Audi operates a printer directly in the DHL premises that issues orders 300 minutes before the doors have to be fitted. DHL assembles the 100 components of the door panels of A6 cars that come from different providers. With the various colours and materials in which components are available. Its competitiveness is still very dependent on manufacturing. more than tea it’s often the art of serving tea that one is ready to pay for. In their premises in Offenau. 7. presented the service provided to Audi at its site in Neckarsulm.” 3. The benefits for Audi are the provision of assembled doors from one single source.1 The Automotive Industry The first case study was ‘the new role of transport and logistics services: example of DHL as car parts producer/supplier to Audi. and alternative routes are in place in case of any congestion.3. He also indicated that 33 companies had joined DHL in their various innovation partnerships.800 door panels for 700 cars are produced every day in Offenau and the assembly time per door panel is less than five minutes. anywhere and he said “nowadays. Director of DHL Solutions & Innovations at DHL Innovation Centre in Germany. He took the example of tea. Starbucks does not produce tea but they deliver anytime. Hans Rijckenberg. 2. Andreas Kruse explained that the DHL Innovation Centre included R&D activities to prototype and also to develop services. Then. focused on Europe’s challenges. as well as a seamless integration of this supply into their processes. but the associated delivery services and its whole value chain have been modified completely in recent years. which is an old product that has not changed for centuries. every 90 minutes a truck picks up 12 containers filled with doors and transports them to Neckarsulm. As a result.000 possible combinations exist. but the role of services is evolving as production functions are increasingly being integrated into service concepts.’ Andreas Kruse. The traffic is monitored constantly.
R&D Projects and Technology Transfer Unit Coordinator in Treviso Tecnologia. In addition. It is currently being operated in two cities – Ulm. from Daimler in Germany. and the implementation of the service in other cities in Europe and North America. an initial reluctance to using shared services.3 The Food Industry The case study on the food industry came from the Valtellina district of Lombardy. In the future. Thus.it/ was launched in October 2010 and offers food and wine from 40 producers. it should be possible to extend the model to other Italian regions to create effective networks of buyers and producers. 6 .storevaltellina. was presented by Andreas Leo.The second case study from the car industry. and Austin in Texas. as well as the limited Internet culture in the region. Some typical food products. but also that 30% of them had not known of Valtellina’s products. The price is 19 cents per minute in Ulm. Success in Ulm came rapidly. and also tourist information. in Germany. However. and then picked up in a station or tourist information centre. Specific services will also be developed to support producers in improving the promotion of their products. CEO of Pastificio di Chiavenna. 3. and the service now has 210. The network brings producers together to sell and deliver across Europe. for example. the initiative also had implementation issues. and includes an e-Commerce platform and courier delivery services. The first surveys showed that 85% of the customers were satisfied. and to penetrate deeper into European markets. 3. Anilkumar Dave. 3. but 76% of use is spontaneous and the customer satisfaction rate is 95%. was to create integration platforms for Valtellina’s SMEs to access global markets. access to transport. The CARD project was presented by Gaetano Mercadante from Confcultura and Gianluca Palmieri. This service offers on-demand cars that are accessible within a maximum five minute walk and can be used very flexibly. these are cheaper than owning or renting a car. However. culture and tourism services is integrated into one card. such as Bresaola. A car can be booked in advance. with an urban life style. CARD enables users to avoid queuing for tickets. the services acquired through the card can be modified if. which makes it difficult to implement innovations or offer new services. The card is an RFID card. Thus. Internet & New Technologies Manager at Trenitalia. such as competition between producers. The profile of the average Car2Go user is that of a younger person. to ensure that tourists can visit several cities. The idea behind the project is to bring together existing cards or passes. and 35 cents per minute in Austin and. in the Italian Alps. the objective will be to operate a business-to-store model in which producers would also sell in shops. Similar to the services that offer bicycles in many cities. Car2Go. It has the fifth biggest tourism sector in the world and tourism represents 12% of the country’s GDP. It is a very traditional sector. where people are more open to the idea of car sharing.4 The Furniture Industry The furniture sector was the next area to provide concrete examples of service innovation. Transport includes both train and local transport. The initiative presented by Fabio Moro. presented the case study on the NeroLuce Design Centre experience. Car2Go has a fleet of identical two-seater vehicles that can be returned to any Car2Go station. a destination is changed. considering all the costs involved. During the course of the journey. The website http://www. there was no network between food producers and the providers of tourism services. which are designed at city or regional levels for cultural and/or public transport services. as 30% are less than 35 years old. are part of the region’s economy and are attractive to tourists.2 The Tourism Industry Italy ranks very highly as one of the world’s and Europe’s most popular tourist destinations. which can be ordered online and tailored to the specific choices of the tourist. which represents 12% of the city’s inhabitants and 20% of all those who possess a driving licence. Other developments that are envisaged are the provision of electric cars.000 customers.
However. Roundtable on policy implications The morning session concluded with a Roundtable discussion on the policy implications of the development of service innovation. research centres and experts. 4. and Treviso Tecnologia is a not-for-profit agency promoting innovation. she indicated that the focus should not be on sectors. The NeroLuce Design Centre operates in collaboration with the Treviso Tecnologia network of universities. to support cultural and creative industries to better exploit their innovation potential and to stimulate spill-overs from the creative industries into other industries.The Veneto region has an industrial economy. Lisbeth Bahl Poulsen. but on processes. The NeroLuce Design Centre was set up to foster synergies between innovative and conventional services. This approach proved to meet a real need of regional companies and since it was established in 2009. SMEs have access to virtual prototyping rooms and can test the designs or the ergonomics of the furniture that is being developed but the IPR always stays within the company. noted that the case studies showed that service innovation is applicable to a broad range of companies and to many areas. to create ‘ad-hoc’ working groups customised for specific needs. the centre has maintained a high loyalty rating. from the Support for Industrial Innovation Unit of DG Enterprise and Industry. The challenge is to promote better transnational 7 . This is the approach adopted by the European Commission in establishing a European Creative Industries Alliance (ECIA). Its approach is ‘user-centred’ and it enables SMEs to access methodologies and technologies that they could not afford on their own. as many issues and solutions transcend sectoral barriers. supporting technology transfer and also offering information and training to regional stakeholders.
the Alliance will bring together policy-makers and implementers to improve the position of creative services in the market. The importance of making better use of available resources. one of the Expert Panel members and a Senior Advisor in the Confederation of Danish Industry. The Roundtable panelists agreed that one aim should be to educate young people so that these future entrepreneurs understand that manufacturing and services are not separate activities and that both need to be integrated into the processes and structures of companies. “I would not draw a line between technology and innovative services. Similarly. He believed that “today’s central point is knowledge. All the different components of the economic system need to move in the same direction. as this border is blurred. Regarding the relationship with technologies he said. In some cases. On the financing of support for service innovation. Thus.cooperation and support services in this field. with a view to creating new and better jobs and sustainable growth in the EU. Vice President of Confindustria SIT addressed the barriers that still exist across Europe. Lisbeth Bahl Poulsen warned participants to avoid the trap of associating service innovation with technological innovation and concluded “technology transfer is important but for service innovation.” In his view. several complementary points were addressed. which prevent innovative ideas from reaching the market. a cross-sectoral approach is important. Transversal and trans-sectoral training was one way to foster creativity. was also stressed. and support a change of paradigm to encourage services and industries to work together.” New technological applications make it possible to meet the needs of customers and provide new services.” She regarded voucher schemes as good approaches for involving SMEs in the development of service innovations. particularly because new technologies have enabled competition across sectors and also small companies to enter large markets. and that service innovation can impact on production methods. During the discussion with the audience. through an improved alliance between the provider and the customer. increase productivity and simplify the placements of products on the market. emphasised the difficulties in changing the mindset of companies and particularly those in the more traditional sectors. the key words are knowledge transfer. such as sustainable development. Technology transfer is still a big problem and policies should be developed to help the worlds of research and of innovative service companies to meet. policy-making should be driven by identified needs. However. and there should be transition phases. design and designers have a great role to play in creating and developing new innovative services but she insisted on the need for the creative sector to improve its ability to sell its services. although they still need to be better adapted to the user’s needs. it was also noted that creativity could not be taught and so it was important was to nurture it and to create conditions under which new ideas could emerge. led by more advanced knowledge sectors like ICT. She also said “The most promising innovation will come from cross-sector and cross-field cooperation. in areas such as logistics and transport. many opportunities remain underexploited. For example. He also believed that all production sectors should evolve together. 8 . However. Jette Nøhr. To do so. new products even change the content of companies’ services. private financing systems should support this change. but was not enough in itself.” Roberto Magliuo. the discussion concluded that policy-making was important for changing Europe. including those in the public sector. He stressed the gap between innovation creation in universities and the applications in large industries. Andrea Bianchi. noted that large companies already knew about service innovation and how to implement it. Director for Industrial Policies and Competitiveness of the Italian Ministry for Economic Development.
Senior R&D Engineer at INTRACOM TELECOM. there is now a wide range of mobile-related services such as location-based services.” he concluded. from Leoon Consulting in Austria. as there is an ongoing transition from product development to service delivery. in which Europe is no longer a hot spot. However. rather than ICT. which includes many elderly people. markets remained very national and there were too few incentives to test new services.1 eHealth Ilias Lamprinos. it emerged that the critical mass of users that was needed to make these services sustainable had not yet been attained. The platform they developed presented programmers with incentives to invest in apps development. in Greece presented the IntLIFE project. From Internet to mobile applications – the m-revolution: how service innovations change established service sectors creating new markets Hannes Leo. is not always familiar with technology. crowd sourcing. he explained that service concepts vary depending on the location within the value chain and that many business opportunities are opening up as a result of the changes that are occurring in the healthcare value chain. In the health sector. with the introduction of Apple and the AppStore for the iPhone. driven. If the mobile revolution took longer than expected to start. Interoperability problems also arise as the service is obliged to make use of existing equipment. The mobile phone is used to record data related to the owner’s activity through the imbedded sensors. He pointed out that at the beginning this industry had been building its model around service innovation. But the real change in the market’s structure and operation happened in 2008. with a different value capture model. but the sector has witnessed a transition from hard to soft coded innovation. introduced the session by recalling how mobile services had developed in parallel with the mobile industries themselves. which means developing mobile services is not a priority in itself. However. and proposed a new eco-system for innovation. In the discussion with the audience. services are clinically. It created community-based innovation. The target group. as they could benefit from appropriate returns. Transformation in the health domain is important he said. It can be used by healthcare professionals for telemedicine services or by citizens to access and maintain their health records. mobile advertising. “Mobile services have started to deliver. 5. smart systems and mobile payment. The IntLIFE project is a platform collecting information on the patterns of daily life via a mobile space. he cited some barriers to the development of such services. Referring to the following slide. 9 .5. All companies were looking for the ‘killer application’ and thought that providing internet on mobile phones was the final milestone.
thanks to geo-localisation. sound and text. culinary delicacies or restaurants. which had implications for the number of visitors to museums and cultural institutions. Fred van Schoonhoven concluded with three recommendations. Parma implemented a mix of measures with a single challenge to “conciliate liveability with economic vitality. 10 . The traffic congestion has been reduced considerably and. A pioneer of multi-media tours in 2002-3. even for small cultural institutions. multimedia contents and games.” Selling the service to cities or regions also proved difficult as the public procurement conditions were often incompatible with their business model. AbelLife’s business model is based on a small team of entrepreneurs. as has the satisfaction of the local citizens. were often faced with congestion. they have actually improved. and the general benefits of the initiative still have to be measured in detail. a fleet of vehicles powered by natural gas and equipped with the necessary navigation equipment. to make the step from research to SMEs possible and – Three: barriers are the funding of service innovation and lack of knowledge in tenders. It illustrated mobility solutions at local level. from then on it’s entrepreneurship and user involvement – Two: involve future entrepreneurs in research. research has shown that it is the relationship with the physical experience of seeing art that is the most sustainable. to reinforce their audience engagement but the question is ‘how can the museum meet them where they are – and take them somewhere new?’ ”This suggests. who are involved in research. but the key is putting the customer and not the technology first. and is now leading in the use of social networks like Twitter. For years. the narrow streets of the old city centre. in recent years it has been increasing the number of visitors thanks to smart phones. To regulate the traffic. From his experience. new technologies seemed to make it possible to create entirely virtual museums. presented by Fred van Schoonhoven. the Tate has been at the forefront of using new technologies to improve the visitor experience. The Tate is also developing content that can be tailored to users based on their location. where loads can be handled and deliveries prepared. even if that is not in the gallery. Mobile technologies have a great potential. perhaps.” he concluded. actually increases the number of visits to art galleries and museums.” 5.” The solution adopted was to establish logistics platforms outside the city. Effects on pollution. He explained that their growing popularity means that “galleries can increasingly switch to the Internet as a vehicle for in-house content delivery. It offers suggestions on how to navigate through the most beautiful routes and on thematic approaches. that the critical success factor for galleries like the Tate in this area will be whether they can produce over time the right cross-platform content that the public wants. when the city undertook a reorganisation of the distribution of goods within its boundaries. such as machines or cars. history and leisure. including noise. The AbelLife application. All goods vehicles are directed to these platforms. Expert Panel member and Director of Creative Industries at NESTA Policy and Research Unit in the UK. Fred van Schoonhoven explained that “we made the choice to always have a profitable business model. movies. At the beginning of the century. Then.2 Cultural Heritage and the Arts Hasan Bakhshi. “One: at the early stage (open) research is important. focused his intervention on the Tate Modern Gallery. from AbelLife in the Netherlands. whilst there were initial fears that the new arrangements could have a negative effect on local services. as banks and private equity don’t lend money to buy something they can’t recover afterwards. thus optimising the routes and deliveries. including children’s activities. art. The second speaker from the cultural sector invited the audience to look outside.5. However. offers tourism and leisure information about the area where you are based.” One of the first barriers AbelLife encountered was in funding its innovation and he recalled that “we had to work with our own cash flow.3 Urban Mobility A case study from the city of Parma was presented by Valeria Battaglia of Federtrasporto and Allesandra Raffone of Almaviva TSF. such as access to collections and databases. which has historic value and attendant needs for preservation. takes the products to the city centre. virtual exhibitions. creating opportunities to establish repeated relationships with visitors and allow them in real time to share and recommend museum content and experiences to others through their social networks”. What is offered online. With the high level of urbanisation. which implies a constantly changing business model. or more specific information delivered through pictures. The platforms also offer complementary services such as indications of available parking spaces and local traffic information.
which collects news from other sources. These include the users. or viewing of. banks and the accounts of large public and private accounts. Didier Marissal from Belgium. who all have to make transactions. 13 TV channels. or to organise the payroll of large account holders. which is more than the business of large banks in the country. 7 radio channels. telecom operators. offer a large market for mobile banking. This is a flexible. In 2010.” he emphasised. 1 replay TV service and 2 internet portals. automated. the public audiovisual service. articles. is a group that comprises 21 regional sites. Tribalnets was introduced by its founder.5. The platform is equipped with an advanced search engine that can identify news on similar contents or topics and can also provide statistical information such as the number of hits on. where the there is a very large number of people. who are keen on having additional revenues. and cheaper. The history of Tribalnets started in Africa. and all metadata included make it easy. and banks that cannot always afford to have branches located close to all of their customers. who make payments by sms. It automatically transcribes contents from broadcast news and it can make syntactic and semantic analyses of the content. At the same time. It can also organise the contents by theme and group them with other sources to produce press clippings and reports with images. of course. Technological Strategies Director in RAI. RAI was awarded a prize by Confindustria for its ‘Hyper Media News’ service. this corresponds to a real need and it suits all parties.4 Publishing Luigi Rocchi. telecom options are growing and thus. “It’s a simple and innovative solution to manage the flow of information that every professional news service or private user is faced with every day” explained Georgio Dimino. 5. an Engineer at RAI. Didier Marissal said that 14 million people were using mobile banking and this involved a total sum of 1 million euro per day. Using Kenya as an example. The classification per file and topic.5 Financial Services The final case study of the day was on digital financial services that use existing mobile networks. to search. 11 . sort and archive. multimedia news system. Tribalnets’ platforms can also be used to supply Equity Bank services to a country. Tribalnets is an open multi-telecom and multi-bank access that facilitates the deposit and withdrawal of money and transactions between private users. 1 international channel. videos or websites. who have no bank accounts. There is currently a very large number of people unbanked or under-banked. a particular news item. RAI. “This is not service for the sake of a service. made a presentation on innovation in the media sector.
Commenting on the specific case of Italy.” Mobile services are crucial to reaching people in some parts of the world and the public sector’s eco-system needs to be opened to other operators. from Innovation Services HP in Italy.6. we need to provide demand and give start-ups their first clients. “however. some problems still need to be addressed. He also welcomed the activities organised by the Enterprise Europe Network (EEN) and.” stated Reinhard Büscher. referred to a smart city project. Expert Panel member and Managing Director ZENIT GmbH in Germany. but we now need to change the approach to delivering government services and create new demand. rather than taking into consideration problems or needs for which a client would be ready to pay. Too often. thought that the sectoral approach may not be the most relevant one. in particular. Lorenzo Gonzales. whilst the public sector should provide the foundations. Confindustria Vice President for Industrial Districts and Local Policies.” The service industry is fundamental to competitiveness and to the widening of the horizon for enterprises. not by policy-makers. to create new opportunities and to solve problems. Kearney and the Innovation and R&D Management Practice Lead in Germany referred to the IMP3rove innovation management service (www. For policy-makers. “eHealth is a very important sector. remove the barriers. Renzo Turatto. For Lanfranco Marasso. 7. However. Director of Innovation in Public Sector Engineering. events where views can be exchanged and training offered to managers. “as it is fundamental to help our industries. but added. He explained that “it’s a demonstrator project. Partner in A. and looks for consumers to pay for it. he believed. There are many opportunities opening up for application providers. It is important to be able to adapt quickly to changes in market needs and conditions. in which 1 million euro was invested to cut long-term energy consumption by half.” he said. for its SMEs. Often.T. He welcomed the report of the Expert Panel and highlighted its importance. He noted that several measures had been initiated by Confindustria such as credit arrangements for SMEs.” Kai Engel. sometimes as a result of their lack of ability to manage innovation. “We have the tools already available to make public services innovative. This is the logic behind the large demonstrators recommended in the Expert Panel conclusions.improve-innovation. incentives are provided to different operators. “the public sector needs to build an ecosystem in which the citizen is at the centre. Department Head for Digital Public Administration and Innovation at the Italian Presidency of the Council of Ministers. mobilising demand at cluster or regional level is much more promising than focusing on individual companies. saving the European economy will require bold decisions and aggressive approaches to market. such as privacy issues and having people modify their standardised processes. Public authorities must also help develop a European market for services but it is industry that should pick the ideas and adapt to the new markets. Reinhard Büscher. 12 . but they cannot seize them. since it impacts on a large part of the population”.” In industrial regions. and let the market do the change. returned to the topic of eHealth services. the companies take the lead and the initiative.” In his view. which can also generate impact in other regions. Peter Wolfmeyer. And it was initiated by the companies in the region. service innovation can be supported at different levels – from small companies to system levels. Roundtable on policy implications The case study presentations were followed by a second Roundtable discussion on policy implications. in particular. Europe starts with a solution. he felt that the country needed to push up its levels of export and to harvest economic development. but the speed of the market in this field is faster than the speed of policy development. in general”. Head of the Support for Industrial Innovation Unit in DG Enterprise and Industry opened the debate by declaring that “Europe needs a critical discussion on how to get back on the growth track. which need to develop new business models and place more emphasis on merit. This can be delivered through the transformative power of services. “Instead of supporting research.eu) to illustrate the room for improvement in supporting SMEs. Concluding remarks The concluding remarks on this first day of conference were given by Aldo Bonomi. he said. He believed that “we should set the international rules for payments. This is the challenge for Europe and.
notably on the Industrial Policy for the Globalisation Era flagship initiative. in summer 2010. there is a risk that this ‘know-how’ could be exported and Europe would no longer have this added value. He regarded this as a key element in supporting the development of services as “Brains are our raw material. but from demand. To achieve these objectives. Confindustria has also been working on recommendations on new forms of financing for companies. underlined the fact that the difficult situation has necessitated the development of more appropriate economic models. His first point was that. at a time when manufacturing companies can change their location. opened the meeting by looking at the role of services in the development of Europe’s economy. Alberto Tripi welcomed the revision of the Late Payment Directive published. which is particularly large in 13 . However. “if a strong industrial policy is implemented. within all sectors. A revision of existing European policy in this field was needed and in his opinion.” Giorgio Squinzi. productivity has been the growth driver of economies. on the timing of payments by public sector entities. Authorities should also help as companies can’t do it all. There is a productivity gap between Europe and the US. labour productivity had followed different tracks within European countries. 8. Confindustria has provided significant resources to support technological innovation in both manufacturing and services companies. research and intelligence and also that the bureaucratic and administrative burden on companies should be reduced. Welcome addresses Alberto Tripi. Senior Fellow at McKinsey GIobal Institute then presented the conclusions of a study on productivity in services. and the role of service innovation in relation to the single market. He was certain that “the economy cannot start from manufacturing.” 8. Confindustria Delegate for Services and Technologies. Confindustria Vice-President for Europe. with Northern Europe outperforming and Southern Europe underperforming EU15 productivity growth. The complementary aims are to increase the size of these companies and to introduce further services in manufacturing companies to make them more effective. and on public procurement procedures. we could finally speak of development and not of crisis anymore. In Italy.” He recommended that more investment should be made in science.Friday 18 February The second day of the conference had a strong policy focus on the Europe 2020 Strategy. More than 40% of European GDP derives from innovation services and. and they need to be paid for on time.1 Productivity in Services Jan Mischke. productivity and growth of services. for decades.
handed over the Panel’s final report and recommendations to Vice-President Tajani. which are sometimes overlooked. However. Allan Mayo. He identified several drivers that spurred service sector competition. and • Societal challenges. Allan Mayo presented the main steps in the Panel’s work together with its recommendations. increased public demand and the promotion of clusters. who is also the European Commissioner responsible for Industry and Entrepreneurship.0 (semantic) to the forefront. 14 . In an inspiring speech. economic gains often come from innovation in processes and business models in high-employment sectors. productivity and growth (See figure on p. such as the ageing population and the threat of climate change. 9. including the development of standards that help service innovation to grow. other intermediate goods and services. The productivity growth gap in local services between Europe and the United States is mainly due to differences in multifactor productivity he said. availability of skilled engineers. compared to the US. which may explain the higher productivity of US companies. He explained that multifactor productivity was a productivity measure that relates gross output to primary inputs such as capital and labour and intermediate inputs such as energy. companies have only recently been moving to service models and investing in services. The phrase ‘transformative power of service innovation’ comes from evidence of the ability of some services to generate profound changes in the value chain and to redefine the rules in some markets. Jan Mishchke highlighted the fact that increases in productivity often come from process changes in high-employment sectors. and finally clusters between universities. recent trends show that European manufacturing companies increasingly involve services as an element of their activities. In the course of 2010. If new technology can be a trigger. industry. • Technological changes that should soon bring web 3. which had been outlined by Jan Mishchke.” The main drivers he said were standardisation. The report came with an annex of more than twenty detailed case studies. The Panel examined the major trends and challenges that Europe was facing including: • A decline in the growth of productivity. 13) Taking the example of the evolution of the cost and revenue of RFID tags. European manufacturing has been relatively successful compared to local services. In Europe. the Panel met four times to consider how service innovation could support smart. sustainable and inclusive growth. R&D commitment and public demand. Chair of the Expert Panel on Service Innovation in the EU. The 20 experts in the Panel had a clear mandate to tie their work directly to the Europe 2020 Strategy and its seven flagship initiatives. As indicated by the McKinsey study. He concluded that specific interventions were needed to provide favourable framework conditions. The main conclusion to be drawn from the study was that “boosting service sector productivity may well be the largest economic growth opportunity for Europe. The Handing over of the Recommendations of the Expert Panel to Vice-President Tajani and the Introduction to the Policy Recommendations After one year of work. and public sector and open markets.local services.
The demonstrators will bring together industry. transport. opportunities for service transformation and barriers to progress as well as skills needs. smart cities and dynamic regions. societal challenge. R&D and people and skills through a service lens. • Develop dedicated programmes in support of innovative services. They will identify infrastructure and new technology requirements. and not the other way around. these stakeholders will contribute their practical experience to articulate demand and define possible options. 15 . national and regional levels. in line with the Innovation Partnership approach. research institutions. market framework. Working cooperatively. service providers. • Strengthen political leadership at the European. near-market projects that will be user-experience oriented. The Panel made recommendations on five main areas: • Raise awareness of the transformative potential of service innovation and its contributions to EU competitiveness. the flagship initiatives of the Europe 2020 Strategy. regulators and users. The demonstrators will be large-scale. Developing the conditions for these changes to take place requires looking at policies for infrastructure. Allan Mayo also insisted on the need for better integration and coordination of policies to match these objectives and. traffic. in particular. the need for specific (interoperable) standards.” Virtually all areas are concerned such as health.Allan Mayo said that such major modifications can only be achieved “if you start from the customer experience and go to a new technology or service. • Build new competitive business from service innovation and improve the agility of policy making to do so. • Promote the application of service innovation to meet societal challenges.
” he said.1 Industrial Policy and Service Innovation Antonio Tajani. and we need a revolution to this end. and finance is an instrument to support and create new jobs. He stressed the current importance of service innovation for the European economic context and its perspectives and he wanted the Expert Panel’s report to provide a stimulus to European policy-makers over the coming months. but little is done for service innovation SMEs. as he highlighted. His view was that “If Europe cannot compete on quantity. Vice President Tajani expressed his conviction that industrial policy could not be successful if the potential of service innovation was not recognised and if synergies were not built across sectors. He thanked the organisers and hosts of the conference.” Italy is in a situation of financial crisis.” In concluding his speech. especially across borders. He concluded that “to win the race. and from internal factors in the Italian economy. thanked Allan Mayo for his interesting speech and the excellent work of the Expert Panel. it must concentrate on quality. He emphasised that “this is a marriage between services and manufacturing. Europe needs research. in particular. a Service Gazelles Programme as “we talk a lot about SMEs in Europe. Three of these measures are energy related. Innovation was the instrument for competitiveness in the world. he stressed that there was a race to the top. Stefano Selli. we don’t have a chance to win in the future”.” 9. we provide you with a route to the top. The Panel recommended. Taking the example of space projects like Galileo and GMES. with the Chinese having recently launched their agenda on service development.” Finally. 16 . financial services. for too long we have divided and opposed both. and addressed this final message to the audience. from the Italian Ministry for Economic Development. Stronger synergies were being developed between the ministries and institutions for their implementation and Stefano Selli stressed the importance for Italy of putting this programme and its measures into action. “this is the modern way to develop the economy and it is also the way in which services are linked. And there is no quality without innovation. across policies and across countries. in which it has to make difficult decisions and in his view.” To internationalise and market its innovative industries. He emphasised that the 8th Framework programme FP8. as they sit at the crossroads between sectors and have the potential to both influence them and increase their competitiveness. but also about better services being developed for European citizens. also welcomed the Expert Panel’s report because “the work that has been done will be a precious input into the Italian government’s policy planning. and two address new technology and cultural assets. The real economy is the heart. To tackle these problems. Clusters were appropriate tools to foster Europe’s productivity and. in turn. Europe 2020 targets are challenging but with this report. for the period 2014-2020. the panel recommends the creation of a European Service Innovation Centre to provide an evidence base as well as foresight studies for businesses. must provide SMEs with simplified access to financial aid from the EU. In particular. in particular. 75% of new jobs are somehow related to services. His analysis was that the recent crisis had demonstrated that it was erroneous to separate manufacturing from services and. policy-makers and other stakeholders. In Europe. he underlined the lack of Italian public investment in R&D and the lack of development of the financial sector. “without innovation. like globalisation. Vice-President Tajani pointed out that they were not only about technology. the Italian government had identified five areas of key importance to the country and established a programme with a number of new measures to support or promote these areas. represent 30% of Europe’s exports.” Europe should now look at services in crucial sectors.To raise awareness. “We should do the opposite. sometimes you have to take a different route. which. Vice-President of the European Commission. like design. the need for innovation comes both from outside factors.
concluded the session by stating that there was an urgent need to improve the growth paths. Ways of discovering new growth business models and growth prospects have been at the centre of attention in recent years in Italy. which would also require strong cultural efforts. She concluded that there was also a need to mobilise public opinion in favour of support for the dissemination and uptake of new technologies. for example. Member of the European Parliament and Vice-Chair of its Committee on Industry. Research and Energy (ITRE) also expressed her interest in the Expert Panel’s report and noted the significance and importance of its recommendations. she said. He also informed the audience that Confindustria had given both support and a stimulus to the Expert Panel’s report by offering good examples or case studies of innovative services. closed the conference by underlining how Confindustria had reinforced the importance of service innovation by applying innovation in organising supply chains and in designing products.” 17 .” She was of the view that much of the potential success rests in the hands of the Member States and regions that play a vital role in the implementation of the relevant policies. His. “This report and its recommendations will be much appreciated”. Linda Lanzillotta. from both the private sector and the public sector in. final message was that “applying innovative services in different sectors is the best way to leverage their impact on the economy. and the conference’s. Developing innovative services requires strong public governance to coordinate. such as RAI’s new hypermedia platform. Concluding remarks Stefano Pileri. the digital infrastructure.” She added that progress should be made in this regard and that “European institutions have to understand that this is a crucial moment. and major investments have been made.Patrizia Toia. President of Confindustria. Member of the Italian Parliament. 10. facilitate and provide the right framework conditions. and that it is high time to act. “because service innovation is very important and topical for European competitiveness and development. Servizi Innovativi e Technologici.
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