The EU has been struggling with a loss of productivity and slump in growth for almost two decades, while its competitors China and the US have surged ahead, taking the lead in innovation and retaining key industries.
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00:00My guest on the Europe Conversation this week is Antonio Campinos, president of the European
00:12Patent Organization. He says while Europe has lost competitiveness over the past two decades,
00:18there are opportunities in the United States given current political tensions
00:22where potentially talent could come back to Europe.
00:25Antonio Campinos, president of the European Patent Office, thank you very much for joining us on the Europe Conversation.
00:33It's a pleasure and honor to be here. Thank you for the invitation.
00:35Well, tell us a little bit about what the EPO does.
00:37The European Patent Organization has a European DNA, but is an international organization.
00:44And when you look to the world, it's the sole international organization who provides substantive examination of a patent.
00:52When you think that you have created a new technology, when you think that you have a new invention, you will seek for protection.
01:00And what the European Patent Office does is that it will check whether that technology that you forward to us
01:06and that you want to be protected as a patent is new, new compared to whatever has been invented or created by humanity.
01:14So patent literature, but also non-patent literature, like scientific papers.
01:19If it has an inventive step, what is an inventive step?
01:23It is that that invention is not obvious for an expert in the field.
01:27And then you can apply that technology to industry.
01:31We receive, we have 39 member states.
01:33So we almost have all European countries.
01:37We go beyond the EU, obviously.
01:39We have member states like Turkey or Norway.
01:42We receive 200,000 applications per year.
01:46You would say 200,000, wow.
01:48200,000, wow, yes.
01:50But if you compare to the US, that receives 600,000 applications.
01:54Or China, 1.5 million applications.
01:57You will see that 200,000.
01:59It's a good number.
01:59But still, there's a lot of technologies out there.
02:03Potential technologies, potential inventions are not converted into patents,
02:07which is the first step towards the commercialization.
02:10Yeah, so, I mean, why is it that Europe has been losing competitiveness
02:14and is not competing with the likes of the United States and China?
02:17I mean, it's a really big problem for Europe right now.
02:19Well, I think that in Europe, we have too much illegal approach to the matter.
02:28Patents is very much taught in universities on a legal perspective.
02:34In the US, it's rather the contrary.
02:37It's very much linked to the technology.
02:39So the approach is totally different.
02:41That's the first thing.
02:43The second thing is that, of course, we struggle into bringing ideas into the market.
02:49And the patent is really at the middle road.
02:51We have, like, 7,000 scientific publications per year in Europe.
02:58To give you an order of comparison, the Americans would have 500,000.
03:03The Chinese, 900,000.
03:06But when you see then the patent application,
03:08you will see that we struggle to convert all this knowledge
03:11into successful commercial viable products.
03:15And why is that?
03:16I mean, so we have these sort of ideas,
03:18but we're not able to translate it into the market.
03:19Well, we have a different risk appetite than the US, for instance.
03:24The US do not fear to fail.
03:28Failing for the US is the first attempt to success.
03:31Here in Europe, we have this approach of when you fail,
03:33you are, like, almost a marginal.
03:36So, and we applied that way of seeing the world to everything we do.
03:42So, for instance, if you want to invest in a new technology,
03:46you want to be reassured that it will be a success.
03:49But you never know.
03:50You don't know.
03:50And most probably you're going to fail.
03:54Now, what we need to do is, of course, like we discussed again on the drag report,
03:59I'd say that we're missing 800 billions to be a part with the Americans.
04:04But when you look at the structure of this investment,
04:07it's much more what we call seed capital.
04:10So, early stage capital.
04:11When you are creating your startup, what we struggle is to scale up, to gain dimension.
04:18And then we need more funding.
04:20We need more risk appetite.
04:22Because if you want to be sure that you're going to have a successful scaling up,
04:27I mean, maybe one in 100 startups created will be successful,
04:32will be one day a one billion startup, what we call a unicorn.
04:36So, we need to invest more in the scaling up and two more things.
04:41First, retaining our startups.
04:44It is estimated, I think, that 30% it's on the drag report.
04:4830% of our unicorns, so one billion euros startup, so to say,
04:55move their quantities abroad, mostly to the U.S.
04:59So, we need to retain, we need to retain them.
05:01You know, the Americans have a logo.
05:04They say, invented here, produced here.
05:08So, we need to start thinking the same way.
05:10What is invented in Europe needs to be produced in Europe.
05:14And now, with the geopolitical tensions,
05:16we might even have a strategic opportunity to attract talent,
05:20attract researchers, attract talented, gifted people from the U.S. to Europe.
05:26And where do you think the EU can maybe seek opportunities,
05:31given the political atmosphere at the moment?
05:34As I said, I think that we need to rely more and more and more on ourselves.
05:38There's a limit to what we can rely on ourselves.
05:41For instance, we don't have raw materials.
05:45We have little raw materials.
05:47So, we need to diversify to whom we buy the raw materials
05:50that we need to build the ships that are so important for the electric cart.
05:55So, we need to look into ourselves, look into the single market,
06:00the internal market, and remove any administrative barrier,
06:04any administrative barrier that still exists
06:07when you want to import and export within the external market.
06:11And believe me, there's a lot of, a lot of, a lot of barrier.
06:15The first barrier is the lack of trust.
06:18So, if, for instance, you want to develop a new technology
06:21and you need to apply, you apply for funding, for public funding,
06:24to the ICA's mayor, who are doing a terrific job, by the way.
06:28I mean, the number of formulas that you need to fill,
06:31the number of declarations you need to provide,
06:34it's, I mean, it's right like 20% of the time
06:36that you should be dedicated to investigation to filling for them.
06:39We have to stop that.
06:40We need to cut the red tape.
06:42We need to simplify our legislation.
06:45So, the criticisms of the EU is constantly about red tape.
06:48I mean, regulations are important,
06:49but is it essentially that we're not matching the regulation with the innovation?
06:54I mean, in a way, I think that it went too far.
06:56Okay.
06:57Well, it's the balance in one side.
07:00For instance, if you take our competition law or competition rules,
07:04they are there to protect free competition.
07:06Good thing.
07:06They are there to protect consumers.
07:09Good thing.
07:10But tell me, how many tech giants we have in Europe,
07:14in the IT area, for instance?
07:16How many big providers of cloud services we have in Europe?
07:20So, maybe the competition law should be when we compete within Europe,
07:24but we need to create the right incentives to create technological giants.
07:30If you look at the 50 most important companies in the world,
07:33Europeans, we have four.
07:35And this is also because of the competition law.
07:38So, we need to see where to apply this competition law.
07:41As I say, it's within the single market.
07:42It's fine.
07:43But if you want to compete with the US and China,
07:45you need to have the right incentives and the right approach,
07:49concentration approach,
07:50in order to gain the same dimension that are the Chinese and the Americans.
07:53You know, one of the things I want to ask you about,
07:55because you mentioned in Mario Draghi's report,
07:57he's calling for 800 billion euros a year investment.
08:00That is a moment.
08:02Do you believe that the EU is finally grabbing this opportunity?
08:05Because at the same time,
08:06he and President Macron have said that
08:08the European way of life is mortal and could die if we don't.
08:13Absolutely.
08:13I totally agree with the statement.
08:15I mean, we have the most expensive social model.
08:18I mean, how many days of holidays you have?
08:20Well, I have.
08:22I'm like 30.
08:23Yeah.
08:23I mean, in 15 years from now, I will have a pension.
08:28I have a social security coverage that is amazing.
08:31When you look at what the Americans have,
08:33they don't have even half of what we have.
08:36But we need to finance that.
08:37And to finance that, there's no other way to be more competitive.
08:42To gain competitive, you need to be innovative.
08:44To be innovative, you need technologies.
08:46And that will bring increases in productivity
08:48that we need to finance these 800 billions
08:51or maybe finance the Europe of space,
08:54of Europe of defense.
08:55We need to be more productive.
08:57But are we there?
08:57That's what I'm asking.
08:58No, we're not there.
08:59We lost productivity.
09:00We lost productivity when we compare ourselves
09:03to the Americans and to the US.
09:05We lost productivity in the past 20 years.
09:07Yes.
09:08And why did we do that?
09:09And how can we get this back?
09:10We need to focus on gaining efficiency gains
09:14in our traditional industry.
09:16And we need to promote more and more disruptive technologies
09:19that will bring these increases in productivity,
09:21such as AI.
09:23Who doesn't use an AI model?
09:25I won't make no advertising.
09:27I'll make no advertising for specific AI models.
09:30But AI models are bringing a revolution in our lives,
09:34bringing increases, tremendous increase in productivity,
09:38but they need to spread.
09:38They need to touch all industries.
09:41I want to bring you back to the political situation
09:43that we're in now with the United States.
09:45What do you think the implications of this trade war will be
09:49for Europe, of course, in terms of the economies,
09:52but also the dissolution in some way of the sort of
09:55Western alliance, transatlantic alliance?
09:57Well, I mean, tariffs are not good for trade and not good for the European trade,
10:03but they're not good for the American trade.
10:05In the meantime, we need to rely on ourselves.
10:07We need to diversify our supply chains and we need to look more,
10:12maybe look for expand our free trade agreements with natural partners.
10:18I would say Canada, for instance, Mexico, so north of the U.S., south of the U.S.,
10:23and obviously China.
10:24And what do you think the opportunities lie?
10:26Do you believe that maybe the innovation could come this way amid an insecure United States?
10:32I mean, there's no alternative.
10:35I mean, you said that, I don't know how you say this in English,
10:38but the necessity brings ingenuity.
10:43And we are indeed in need.
10:45We are in deep need.
10:46We are in deep need.
10:47So humankind is never as creative as when he is in need.
10:51And we are in need.
10:53The sense of urgency is there.
10:55So I think that, I mean, this is more than a wake-up call.
10:58This is a different world in which we have entered.
11:01And we are strong in Europe.
11:03We are still a big economic powerhouse.
11:07And the only thing is that we need to diversify.
11:10We can't rely now exclusively in the U.S. to protect us or to trade with us.
11:14We need to diversify our partnerships.
11:16Okay, just final question then.
11:18Are you optimistic about the next five years amid everything that we've talked about today?
11:23Global political instability, concerns around EU competitiveness and innovation.
11:29Are you optimistic?
11:31I think, to be honest, it's not a matter of being optimistic or not optimistic.
11:35The matter is that we will be somewhere in five years from now.
11:38And if we have noticed that something very wrong happened and will not happen.
11:42Europe has a strong history.
11:44Europe will be there in five years from now.
11:45We have a longer history than the Americans, I think.
11:47Okay.
11:48By my own calculations.
11:49Antonio Campinas, president of the European Patent Organization.
11:52Thank you very much for joining us.
11:54It was a pleasure.