Selecting and Designing European ICT Innovation Policies Andrea Renda Senior Research Fellow, CEPS George C. Lamb, Jr. Regulatory Fellow, Duke University Brussels, 8 April 2016
Introduction Academic literature increasingly advocates a missionoriented innovation policy, calling on governments to play a fundamental, enabling role Basic research Skills Mission-oriented platforms Policy coherence Better regulation (European Commission 2015) Is ICT different?
Foundations of the ICT ecosystem (1) Four main characteristics Computing power and Moore s law (1975) Modularity/granularity (System goods, distributed services and architectures) An end-to-end, initially neutral architecture with intelligence distributed at the edges, allowing for permissionless innovation Digital information goods, which offer unprecedented opportunities for sharing, versioning, re-use, sampling, etc.
Foundations of the ICT ecosystem (2) Leading to significant peculiarities Relatively high R&D intensity (especially at lower layers infrastructure, hardware and STS) Short product life-cycles and the parallel development of multiple product generations Distributed incremental innovation (at least in the early years of the Internet) Network externalities (direct and indirect, often coupled with learning effects) Low barriers to entry at higher layers
Current trends in the ICT ecosystem From neutral to platformized Virtualization and the cloud Openness and collaboration Data-driven innovation Internet of Things (incl. Industrie 4.0) Internet of value: distributed ledgers A recombination of the above?
From the spaghetti bowl to the lasagna DRM Content layer (e.g. web pages, audiovisual content, Voice calls) Application layer (e.g. web browsing, streaming media, email, VoIP, database services) Logical layer (e.g. TCP/IP, domain names, telephone numbering systems, etc.) Physical (transport) layer (e.g. coaxial cable, backbones, routers, servers) OS, middleware Fixed Mobile Other 6 6
TO THE CLOUD TIRAMISU Cloud Delivered Services Cloud delivered services (SaaS, PaaS, AaaS, IaaS) Cloud platform (Operational and business support services) Cloud platform Virtualized resources (Virtual network, server, storage) System resources (network, server, storage) Physical (transport) layer (e.g. coaxial cable, backbones, routers, servers) Fixed (xdsl, Cable, Fiber) Mobile (LTE, WiMax, etc.) Other (ereaders, PDAs) 7
Source: Palacin et al. (2013) The Internet is becoming flatter (1)
Source: Palacin et al. (2013) The Internet is becoming flatter (2)
Layers and speed Source: Clarke and Claffy (2015)
From foundations to policies
Future trends to be expected Further expansion Further virtualization Robotics and cyber-physical smart objects Deep machine learning and smart algorithms
Laws that learn
Consequences for EU policy (1) R&D support and traditional demand-side policies most relevant for lower layers At higher layers, more agile instruments Prizes and challenges Public-private demand-side instruments Pay for success/social impact bonds Data-oriented policies Open data policies Hackathons, datapaloozas A data-oriented regulatory framework EU presidential fellows program managed by the ERC? Public intrapreneurs to engage more with entrepreneurs
Consequences for EU policy (2) Need for more flexible, effective policymaking E.g. Regulatory Sandbox approach in the UK Not just red tape: avoid incumbency problems and set rules that are fit for data-driven innovation Cooperate and engage with platforms: avoid the neutrality/responsibility problem Fix horizontal policies, fine-tuning them to the different layers Incorporate technology roadmaps and the opinion of multistakeholder platforms as inputs in the policymaking process Ongoing monitoring of policy impacts, including through open government techniques
Simplicity in the governance of innovation policy Two Councils in charge of linking scientific and technological input with policy ERC and EIC Three Agencies in charge of implementing and orchestrating multi-stakeholder, mission-oriented platforms EIB, EIT, JRC Smaller and more local actions to be implemented by the European Commission (vouchers, regional fund allocations, etc.)
Selecting and Designing European ICT Innovation Policies Andrea Renda Senior Research Fellow, CEPS George C. Lamb, Jr. Regulatory Fellow, Duke University Brussels, 8 April 2016