Euro-Sante :: Euro-Health

Beggar in Venis, May 2008
Government greed at work

Greedy governments stifle innovation by reserving all the intellectual property of publicly funded research for their own use. The problem is that governments are not very good at knowing what to do next, and invariably tie up valuable innovation in bureaucratic process, without adding any social value at all.

The Eurocrats like US comparisons, so here is a good one. In 1945, the US Government commissioned Vanevar Bush to review the role of science in post-war America. His report founded the US National Science Foundation. It was, however, not until US scientific pre-eminence in patents began to flag when compared to Japan and others, that US legislators realised that they were hogging all the innovation. The result, the Bayh-Dole Act (the University and Small Business Patent Procedures Act) in 1980 gave US universities and businesses ownership of the discoveries resulting from US government-funded research. The result is what we have today, and why the EU compares unfavourably.

The whole EU labours under mistaken beliefs about the central role of government in adding value. In this case, getting the dead hand of the state off the bright ideas of the research community galvanised the US academic and commercial communities into entrepreneurial development which continues to this day.

Some EU members are very good at converting research into commercial products, have vibrant venture capitalists who are knowledgeable in finding winners, coupled with entrepreneurial research communities. Others, of course, are laggards, or worse, deadwood. The Biopolis report is a useful map of the terrain in one area. Sitting at the heart of the issue, though, is the academic culture itself which in many countries lacks an entrepreneurial dimension, with inappropriate incentives and featherbedding of senior academics. Perhaps the greatest threat to innovation besides greedy governments, is academic tenure.

The race these days goes to the smartest. Let’s hope the Commission’s Communication on Pre-commercial Procurement will actually drive innovation.

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