Europe makes a fresh start - Roland Berger Strategy Consultants

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Europe makes a fresh start
Let us first take a brief look at the discipline of invention, however, which
can be measured in terms of the number of patent applications and patents
granted. As regards patents granted by the European Patent Office in 2004,
European companies still had the edge over the rest of the world: 53.6
percent of all patents were granted to European countries, 24.2 percent
to the USA, 17.8 percent to Japan, and 4.4 percent to other countries.
However, a different picture emerges when one examines patent applications
in the same year: Europe accounted for 49.6 percent, the USA 24.2
percent, Japan 16.6 percent, and other countries 7.5 percent. Patent
applications are more critical as a forward-looking measure, because –
roughly speaking – tomorrow's patents will emerge from today's applications.
And precisely on this score, Europe is in danger of falling behind
relative to the rest of the world, and especially relative to the USA. This
first link in the innovative chain is of paramount importance, however.
Countries and regions that stumble at this hurdle can scarcely hope to
catch up when it comes to product development and marketing.
European companies are therefore called on to ramp up – or at least
improve the efficiency of – their research and development work. Nokia
furnishes tangible evidence that this circle can indeed be squared. The
Finnish company continually increases its patent output while reducing
its R&D spend. How does it do this? By adopting a typically European
approach: Nokia cooperates extensively with other companies, rivals,
suppliers, customers and employees, as well as with university and
non-academic research establishments.
The gulf that separates Europe from other regions is even wider in the
development of inventions into marketable products. Europe is the home
of many ground-breaking inventions: the computer, the fax machine, the
Internet, the principle by which MP3 compression works, to name but
a few. Yet others have been the first to get these inventions to market.
This first-mover advantage has enabled American and Japanese firms
to control lucrative markets and earn a lot of money – money they have
then plowed back into new inventions and developments. So what can
the Europeans do better in future?
First, they must become more adept at estimating the potential of inventions.
And second, they must transform these inventions into products
more quickly. Both goals can be met if R&D units collaborate more closely
with Marketing departments. In some cases, it is even advisable to let
Marketing take the lead. Motorola's new series of mobile phones illustrates
just how successful this strategy can be.