Europeans Forge Science Common Market

For Europe, a new and eagerly anticipated era begins in 1992. That’s the year in which the 12 nations of the European Economic Community (EEC) will abolish the last of the internal trade barriers that have made Europe an economic and technological hodge-podge ever since the EEC was created in 1957. Among other benefits, 1992 will harmonize the standards, specifications, and regulations that have governed virtually every European product or service—from new pharmaceuticals to life-insurance policies. For companies operating in more than one EEC nation, that crazy-quilt of standards has meant a costly multiplicity of product designs, packaging, and regulatory procedures. And so everyone from perfume makers to the big auto companies anticipates bigger profits when 1992 finally rolls around. But corporate science is not waiting for 1992. In recent years researchers in European industry have jumped the gun, forging their own technological “common market.” Programs to promote intra-European joint ventures, legislation that makes it easier for scientists to work outside of their own countries, and a new pan-European attitude are combining to offer European industrial scientists more opportunities than ever before. Increasingly, Europe’s best and brightest researchers are crossing borders and joining forces to do battle on level ground with the U.S. and Japanese competition. “If we are to compete with the U.S. and Japan in advanced technologies, we face the major problem of the [small size of our domestic market,” says electrical engineer Michel Mercusat, managing director of Metravib Instruments in Lyons, France. “In my company’s business—developing high-technology vibration equipment—the U.S. has half the world market, Japan has 20%, and Europe represents 30%.” But, he notes, this 30% is divided among the many European nations: His own country accounts for only 6% of the world market, and the U.K. just 10%. Such a limited resource base often prevents any single European company from growing large enough to compete successfully on a global scale. “By collaborating with scientists and businessmen from other nations, we can open up all the European markets to our products.” Mercusat says. “Nineteen ninety-two will obviously give a big boost, but by working with firms from other countries now, we can establish ourselves across Europe before then, and also move into international markets earlier.” Such a “team attitude” is relatively new to European industry—and its advent can, in part, be attributed to the concept embodied in 1992. “The idea [of cross-border linkages] would have been impossible a few years ago,” says Fabienne Tardivon, board member of Euretec, a Paris-based biotech company. Euretec was formed last year by a group of French and Dutch partners (backed by an EEC investment of about $4 million) to develop improved animal feeds. Although there have never been any legal barriers to international collaboration, she says, “no one would have thought of it. That simply wasn’t done.” Vladimir Mollov, director of the Swiss venture capital firm Baring Brothers Hambrecht & Quist, concurs. “There is no doubt that 1992 has stimulated the imagination and interest of European scientists and businessmen.” Mollov is the European chief of BBHQ’s Alpine Fund, a program committed to bringing about more cross-border collaborations between scientists, engineers, and businessmen working to develop and commercialize advanced technology. Another reason for the new spirit ot cooperation is that many of the hassles that have long kept many European researchers close to home have been eliminated, and those that remain are being worked on. Until recently, for example, there was no central system of recognition of advanced degrees. But the Brussels-based European Commission (the EEC’s executive arm) is currently designing a system that calls for EEC-wide acceptance of degrees and professional licenses. Almost totally removed is the bureaucratic red tape that once surrounded social security benefits. “In the past, a German researcher working for two years in France, say, might find that that wasn’t applicable to his pension,” explains Anne Ruth Herkes, second secretary at the Washington embassy of the Federal Republic of Germany. Today, though, movement between the different national pension systems of the EEC has been. vastly simplified. But perhaps the biggest incentive for pan-European R&D collaborations is a series of EEC programs expressly designed to foster joint ventures between companies—and thus promote the development of European technology. One example is the year-old RACE (Research and Development in Advanced Communication Technol- ogies for Europe); another is ESPRIT (European Strategic Program for Research in Information Technology) set up in 1984 to fund joint research in telecommunications, advanced computers, and related areas. The result of such programs has been hundreds of “precompetitive” joint R&D programs in biotechnology, electronics, chemistry, communications, and energy research. Yet another EEC program, dubbed Eureka, unites companies and research institutes from a broad range of commercial technologies. As of late last year, the program consisted of 165 joint projects. To qualify for Eureka status (and EEC funding), a project must be outlined in detail by companies from at least two EEC countries, then approved by the respective governments. One Eureka project is a four-year venture to develop an excimer laser for use in chemical synthesis. The effort invalves scientists and engineers from Ultra Centrifuge Nederland (UCN), a uranium-processing company in Almelo, Netherlands; a consortium of British corporations (including British Aerospace); and Italy’s ENEA, a governmental energy agency. In suburban Paris, meanwhile, eight-year-old Alsys has teamed up with two British firms to produce ADA-language software. Due to end late this year, the two-year program was funded by a $1-million EEC loan, which will be repaid over four years from software royalties, says Etienne Morel, Alsys’ managing director. “The British partners are experienced in hardware and the software environment, while our background is in computer language and compiler technology,” he says. “You learn much from each other in that kind of relationship.” Could Alsys have performed the work on its own? “Probably,” says Morel, “but it would have cost much more.” Cost Per Company Most such ventures are still in the early stages, and financial payoffs may be years away. But so far, sources laud the benefits—beginning with shared R&D costs, which translates into more big-ticket R&D being performed. “With three or four companies working on a project, the total cost rises by about 30% because of personnel training, travel, and communications,” says Jean Siotis, EEC’s head of telecommunications in Brussels. “But with many participants, the cost per company can be very low.” That’s important for any company, of course, but especially so for the EEC’s thousands of small and medium-sized firms that have long lacked the resources to either conduct sophisticated R&D or bring it to market, but can now team up with such corporations as West Germany’s Siemens and France’s Thomson. Of 148 recently approved ESPRIT programs, says Siotis, 137 involve companies with 500 or fewer employees. “There’s much pressure [from Brussels] to include these companies in our R&D,” says materials engineer Willem A. Ledeboer, European affairs coordinator at electronics giant Philips N.V. in Eindhoven, the Netherlands. “Some want to join us as a way of learning on the job, and we discourage that. But most of them bring advanced skills to the collaboration—in custorn software and integrated circuits, for example—and that benefits everyone.” Philips now supports about 110 joint projects, he says, about half of which are under the ESPRIT banner. New Alternatives But the benefits of these and hundreds of other joint programs will extend far beyond commercial competitiveness. They should also yield important payoffs for the average researcher—and heading the list is new career opportunities. At UCN, for example, technical director Norbert Hootsman notes that several scientists have already been hired for the Eureka program, and more will be added as the project progresses. The programs also offer new alternatives for university researchers who may be facing cuts in government spending. “For many years, people have [been reluctant to join] universities because of funding uncertainties,” says Willem Witteman, chief scientist at UCN. “These collaborations give many of them an attractive opportunity to move into industry." Herkes at the West German embassy is convinced that within the next few years the growing size of the R&D network will lead to EEC-wide help-wanted newspapers and magazines aimed at scientists and other professions. Such publications today—when they exist at all—are generally limited to individual nations, or to strictly regional resources such as universities and government research institutes. Less tangible benefits also arise from the fact that many researchers are working with scientists outside their own countries for the first time. Euretec’s Tardivon notes that despite the geographic proximity, “very few French rsearchers had ever been to Holland. Now they’re learning things first-hand that the Dutch have always been very good at, such as animal field tests. And the Dutch scientists are learning new methods in protein separation from the French.” That also gives researchers new understanding of other countries’ science and industrial policies—an important benefit given the increasingly global nature of science. Unlike the U.S., notes Hootsmans, it can be almost impossible for European researchers to learn how things are done just 100 miles away, unless the results have been published—usually nine months or more after the work is completed. “When you’re working side by side with another scientist, you pick up little tips and subtleties you can’t get from a journal,” says Witteman. It’s much too early to predict the ultimate impact of the collaborative programs, of course. Nor can anyone say whether the goal of technological competitiveness will overcome the national rivalries and suspicions that still make the EEC a house divided. Still, there’s a new sense of energy in European industrial R&D, a perception that the dark winter of Europessimism really has ended. “Every company will still be guided by its own long-term interests,” cautions UCN’s Hootsmans. “But these programs force us to think in international rather than national terms. And that has made us much more daring than ever before.” H. Garrett Deyoung is a Hingham Mass.-based freelance writer specializing in international business and technology issues.

Europeans Forge Science Common Market

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