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Fostering innovation in the services sector

The services sector plays an increasingly important role in the economy. It accounts for about two thirds of employment and GDP and it is the only sector of the European economy that has generated jobs in the last two decades. The growing significance of services is also reflected in its increasing innovative activity, with services accounting for a greater share of overall R&D activity, patenting and trademark activity. However, the share of service firms that innovate is still lower when compared with the level of innovation in the manufacturing sector, with the notable exception of ICT services, where R&D expenditures seem to be as important as in manufacturing. Empirical evidence suggests, furthermore, that non-technological innovation plays a very important role in the service sector.

In the Council conclusions on the Communication "Putting knowledge into practice: A broad based innovation strategy for the EU" of 4 December 2006, the Commission was invited to "prepare by April 2007 an overall assessment on innovation in services evaluating e.g. the related need for policy adjustments where appropriate. The Commission is also invited to take into account the various forms of non-technological innovation".

As a first step to follow this request the Commission published in July 2007 a Staff Working Document Towards a European strategy in support of innovation in services: Challenges and key issues for future actions" which analyses the specific patterns of service innovation and identifies the main challenges to the support of innovation in services with the view to fully exploiting their innovative potential and fostering the growth of the service economy in Europe.

A public consultation on the Staff Working Document on innovation in services was held from October until end December 2007. The objective of the consultation was to get feedback from stakeholders on the challenges and key issues of a policy framework to support service innovation, as identified in the SWD. In general the analysis presented by the Commission's SWD is strongly supported by the large majority of the respondents.

To further validate the results of the open consultation a workshop entitled "Towards a European Strategy in Support of Innovation in Services" was held in Brussels with academic and industrial stakeholders on 4 February 2008. This workshop mainly confirmed the results summarised below and offered further insights into existing market failures and the scope and motivation of Member States to support innovation in services. As a next step the Commission services will prepare a Communication by September 2008 setting out a European Strategy in support of service innovation. Specific emphasis will be given to the challenges of supporting young innovative service companies with high growth potential.

In the Communication "Putting knowledge into practice: a broad-based innovation strategy for the EU", adopted on 13 September 2006, the Commission also announced the creation of a pan-European platform to better link universities, entrepreneurship and finance in order to foster innovative start-ups in the services sector. This action - the European Innovation Platform for Knowledge Intensive Services (KIS-IP) has been implemented under the Europe INNOVA initiative, following a call for proposals published in 2007. The platform consists of 3 sectoral networks in the fields of ICT, renewable energy and satellite applications and one horizontal action. The KIS-IP will be reinforced with 2-3 new sectoral networks in 2009 following an open call for proposals to be published in June 2008.


@2006 IPA CIFATT Craiova. All rights reserved.