Living Labs Europe

On 29-30 of June, we attended the thematic workshop of Europe INNOVA in Munich ‘Lead Markets and Innovation’. Raised by the Aho Group Report ‘’Creating an innovative Europe'’ into how the Lisbon objectives can be achieved, Lead Markets are widely discussed as an instrument to promote European competitiveness through local excellence, competitiveness and lead-user availabilities as catalysts for globally competitive products and solutions.

Particular issues raised by the workshop included European policy on innovation (David White, Director Innovation Policy EC DG Enterprise), which is yet to define a position towards lead markets as a growth instrument. It is a hotly debated topic inside the European Commission, and Prof Luke Geroghiu as member of the Aho group summarised the context in which the lead market was raised as a policy issue.

Living Labs Europe incorporates an advanced concept of lead markets, primarily through the integration of end-users into the innovation process, as well as the trans-European networking of markets and user-needs to serve innovation, attractiveness and economic development. Whilst each Living Lab is a local lead market for a prioritised set of solution areas, Living Labs Europe itself acts as a pan-European lead market.

A core set of factors were discussed that make lead markets, such as mobile ICT in the Baltic Sea Region, automotive and photo-voltaics in Germany, particularly competitive – attracting inward investments and setting global standards. Lead markets may best be identified by features such as competitive market structures, cost advantages, advanced demand structures, global transfer structures via participating Multi-National Corporations (MNC), and export advantages partly also due to advanced secondary services attuned with the specificity of the sector. Yet, it appears a challenge to accurately predict lead markets – as most are identified after they have developed.

mWatch methodologies, consisting of a mixture of indicators (Mobile Fluency, Innovative Climate, Management Capacity) go a long way to capture the localised Mobile Readiness. Demand and lead-users are identified, together with technical competences, the ability to innovate as well as the capacity to manage and lead horizontal projects. The Kaleidoscope of Innovative Projects showcases the leading projects and entrepreneurs exploiting or even surpassing the framework conditions – recognising the entrepreneurial and innovative spirit. mWatch intends to provide insights into emerging lead markets – as can be said about the top performing Estonia. Whether this lead market will be able to deliver the exportable goods, set international standards or even just sustain its position will remain to be seen.

Extensive discussions focused on standards and regulatory instruments to shape lead markets – not only through de-regulation, but by setting ambitious lead-targets (i.e. Germany’s renewable energy tariff; Japanese Top-Runner programme) that set internationally competitive performance and quality standards. Knut Blind, from ISI Fraunhofer, provided intriguing insights into the spectrum of instruments at the disposal of not only regulators, but also companies and shared standardisation platforms. Living Labs may consider direct end-user involvement in creation of standards – in mobile ICT with its acceptance challenges as a key hurdle to open markets. These may not only set the accessibility, but also the security / privacy of services provided as is shown by the concerns of the mStudent communities.

Whilst often a national competence, local governments in Living Labs Europe have already shown that particularly public procurement can act as an important standard-setting instrument. Hamburg is reviewing its urban furniture / outdoor advertising licensing to set a new standard via insisting on interactive functionality by the bidding firms. For providers, that may include globally operating urban furniture / outdoor advertising firms like JC Decaux, Wall AG and others, Living Lab Hamburg may become the de-facto benchmark with continuing high demands on service provision that will set standards elsewhere calling opening export opportunities for unique competences.

Experts reviewed the role of procurement as a critical issue in shaping lead markets, outlining the need to consider innovation and potential fostering of lead markets as part of specification, tendering and delivery processes. Competitive Dialogue, whilst only accepted as an exception to procurement rules, opens a channel to review technological possibilities with possible providers before finalising specifications. This, combined with directives explicitly excluding R&D activities from common procurement restrictions, may bear significant opportunities to make Living Labs more competitive as local and networked lead markets and enable more co-investment via true PPP.

Whether or not lead markets will feature as a strategic component in European innovation policy, it is clear that Living Labs Europe is set to achieve a networked market that may overcome also the issue of cross-border viability of lead market solutions. Already today, early steps are undertaken in the network with particular need to strengthen the advanced demand side and commitment by policy-makers to strategically procure and invest in innovative solutions. Unlike the eco- or space-technology sectors, Living Labs actively shape user-communities and their demands from a legitimised platform – that span not across a non-homogenous national market, but across a community of interested users and leaders across Europe.

This entry was posted on Sunday, November 12th, 2006 at 3:56 pm and is filed under Uncategorized, Living Labs Europe, Living Labs, Livinglabs, Innovation Environment, Interlace-Invent, Clusters, Europe INNOVA, Innovation Policy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.