In 2010, the European Union (EU) committed to building the ‘Innovation Union’. This initiative responded to the economic challenges which the EU faced in the wake of the Global Financial Crisis, and the recognition that the EU was trailing others (specifically the United States and Japan) in its innovation performance. In short, Europe’s scientific expertise was not linked closely enough with industry and the enhancement of economic competitiveness. Horizon 2020, launched in 2014, has provided the largest public fund supporting research and innovation in the world, structured in such a way as to promote collaboration between scientific and industrial organisations.
The effectiveness of the development of the Innovation Union depends on the openness of global trade. The EU’s approach is reflected in its key statement on trade in 2015, Trade for All. The fundamental elements of the Innovation Union rely on increasing both Member State and EU support for scientific endeavour, but also ensuring that it is closely linked with industry and processes of commercialisation. Ultimately, competitiveness depends on access to global markets, and hence the importance of new agreements that reduce both the costs and regulatory barriers to trade. EU research demonstrates that this contributes, in turn, to higher employment and wages leading to enhanced social prosperity (a key objective of the Europe 2020 Strategy).
However, the nature of contemporary global trade is poorly understood, both by citizens throughout North America, Europe and Australasia, and by their political representatives. The interconnectedness of global value chains, and the extent to which components move around the world before becoming goods ready for market, means that there are many barriers to open trade other than tariffs. As a ‘knowledge economy’ becomes increasingly central to people’s well-being, services become as important a part of global trade as goods. The EU’s policies with respect to the ‘Innovation Union’ and to opening up global trade reflect a very positive approach to these issues.
The purpose of this project is to promote improved public understanding of the relationship between innovation and competitiveness and a more open global trading environment, and how this improves prosperity for the EU and its global partners. Its specific objectives are to strengthen EU studies in this field by:
- Performing an observatory function in bringing together research on the EU’s initiatives on innovation and competitiveness and global trade, and the implications for the global trading environment;
- Engaging senior policy makers, senior business leaders, academics and other key stakeholders in focused discussion of key issues under negotiation in efforts to develop more open global trading arrangements; and
- Promoting public discussion about the relationship amongst innovation, competitiveness and trade, and the implications for improved prosperity.
These objectives will be pursued with specific reference to the efforts to achieve free trade agreements between the EU and Australia, and the EU and New Zealand.
The principal outcomes from the project will be increased accessibility for both stakeholders and citizens to information about the emerging characteristics of regional, national and global economies, and the opportunities which can follow from more open global trade. Its impact will be reflected in more knowledgeable debate in all forums about the prospects for more open global trade.