Past Success Through Innovation Does Not Ensure Future Success: Eric Schmidt Comments On The State of Innovation in Europe

Eric Schmidt, Executive Chairman and former CEO of Google, recently completed a guest article for Neelie Kroes, Commissioner for the Digital Agenda and Vice President of the European Commission. The main theme of the essay was innovation in Europe, which covered Schmidt’s recommendations for further encouraging innovation, notable innovative companies in Europe, and also touched upon political and economic factors that could increase innovation.

It could be argued that European countries such as England are some of the most innovative countries in the world, with UK companies claiming £1.35 billion in R&D tax credits in the 2012-13 tax year. However, Schmidt feels that more can be done to increase the amount of innovative startups and money invested into research and development. Unsurprisingly, Schmidt’s essay exclusively looked at digital innovation, as opposed to other areas such as cleantech or manufacturing.

Below Schmidt talks about forming what he calls a “digital single market”, although it is unclear from this statement what the economic and political implications would be for countries in the EU:

“Europe needs to reform and forge a true digital single market. This will give European entrepreneurs, who have all the right building blocks, the incentive to invest and the ability to achieve global scale at greater speed. Significant political will needs to be mustered to support these changes and ensure Europe’s startups succeed.”

Schmidt also made a point of drawing on a number of examples of European ‘tech’ companies that have become very successful over the last decade. Companies mentioned in the essay included:

• Shazam
• Criteo
• Spotify
• Skype
• Soundcloud

Taking the theme of innovation one step further, Schmidt talked about how innovation should be disruptive, referencing tech company Uber, who has majorly disrupted the taxi industry in dozens of countries across the world: “Most of all, Europe needs to accept and embrace disruption... The old ways of doing things need to face competition that forces them to innovate. Uber, for example, is shaking up the taxi market—for the good. It offers riders convenience and cheaper fares. Understandably, the incumbent taxi industry is unhappy.”

What is Uber?

Uber has been the subject of much controversy in recent months. The app, started in San Francisco in 2009, enables users to book taxis through their smartphone. Once the journey is complete, the payment card that the user registered to the app is automatically charged. Uber started out as a high-end taxi executive taxi/chauffer service but now offers much more cost-effective options that compete with the regular taxi. The company has faced notable opposition from established taxi companies in many of the 100 cities in which it operates in, including London, Seoul and New York.

Once Kroes has received essays from other future contributors including Vint Cerf, widely recognised as one of “the fathers of the internet”, it will be interesting to see how the European Commission plans to implement some of the advice from these essays in their efforts to further boost innovation in the EU.