Improving the Investment Climate in Croatia • Evening for Safe Steps ...

News&ViewsreportInnovation is the Key forby Mikael Hagström, Executive Vice President, Europe, Middle East, Africa and AsiaIn today’s speech, I will focus on the topic of innovation, more particularlysocial innovation.We have an important and critical event in front of us in Croatia,and that is the membership of the European Union which we supportthrough AmCham at the European level. I firmly believe that there is a lotwe can do as companies and member companies, not only to help makethis happen, but more importantly, to prepare Croatia for accessing theEU community in a more competitive and stronger way.These are difficult times. The recession has had a strong gripon Croatia for some time. One important step that needs to be taken is toimprove the investment environment, to make it more business friendly,efficient and transparent - in other words, to give Croatia the tools to attractmore foreign investments in general.I believe that Croatia has significant economic potential becauseof three main reasons. First, Croatia is a land of physical beauty andabundant natural resources. Second, a solid infrastructure is in place inCroatia, and the scale of the investments in infrastructure is significant,including the work done with the digital infrastructure. Of equal importanceis the third reason, which is education. On a very high level, thecurrent education standing has produced a talented and well-educatedwork force. I experience the need for talent on a daily basis, when wedo our own company projects that are innovative, such as in the area ofsocial networking for instance. It is very difficult to find specialists in thatarea, yet they are certainly available in Croatia. I think the opportunity ishere, and it is here now. That is why I believe the topic of innovation isso important.Opportunity to innovateIn my mind, innovation is about reusing what has already beeninvented but in new ways, and then acting on that opportunity. Most ofyou are familiar with new products from companies like Apple, to namejust one. Now, Apple did not come up with some major invention butinstead did a fantastic work around finding new uses for already existingtechnology. When we look at which companies have the strongest footprintin the digital industry, we notice that many of these companies arebased in the US, especially when you look at the top 10 websites, the top10 e-commerce sites or the top 10 social networking sites. But I believethat there are many opportunities for European companies to follow inthese footsteps, and Croatia has a natural role to play.When I think about the need for innovation, both the businessand public sector come to mind. In our work with governments and organizationsaround the world, we have seen that there response to theeconomic crisis to fall into three basic categories. The first is what I callthe “knee-jerk” reaction. When the pressure is intense, quick actions -any actions - are taken, just to demonstrate that the government doesnot stay immobile. The second is the “wait and see” approach, taking noaction while hoping that things will improve on their own - most often thannot, in vain. The third option is strongly linked to taking actions based onknowledge, to create a vision of building a new future. This is what I wantto focus on - what we can do now to come out of the crisis not only stablebut significantly stronger, to build a future that is based on innovation.Innovation emergencyI believe that innovation is required to accelerate growth. Governmentsacross the world are battling with the same challenges, such asunemployment and various social and demographic issues like aging orurbanization. These current trends put pressure on social infrastructure.Now is the time to reform, transform and modernize the way governmentsand countries are being run.The EU Commissioner for Research made some interestingremarks. For example, Europe has actually the largest pool of doctoralgraduates in the world. Therefore, Europe and Croatia specifically canbenefit greatly from commercializing innovations. It is not surprising thatthe Organization for Economic Cooperation and Development (OECD)is focusing very strongly on investments for innovation in Europe. Theywant to speed up and improve the competitiveness by increasing theinvestments and research in Europe. This desire is shared by the EuropeanCommission at the highest level, which underlines the topic of the“innovation emergency,” or a need to view innovation as the urgent key tobuilding sustainable growth in many areas.We can find examples in the issue of aging societies. Aging societiesare global phenomena. Most parts of Asia, with a few exceptionssuch as India, will soon be impacted. With health care costs rising, thereis a requirement to find a new way to maintain service levels at the sameor even reduced costs. Meanwhile, citizens are expecting better serviceand ways to increase their quality of life, which is an area where innovationplays an important role. Innovating in the use of preventive medicationincreases the quality of life. With the help of modern medical devices,people can live longer, healthier lives and can also enjoy reduced hospitalcare costs. The issue of preventive medication is a global topic, but thereare available solutions that are already invented. They just need to becombined and utilized in a new way.How do we get there? Education, marketinnovation and better public-private partnershipsIf we look at the economic situation in Croatia, innovation willbe fundamental to quick-start the recovery. In order to get an innovationframework functioning, three areas are going to be extraordinarilyimportant.At the European level, the quality of education is critical. Today’steachers still write on blackboards and use the same teaching principles10 ISSUE 4/2010