European Innovation

This was the name of a policy seminar that the Lisbon Council hosted today. We were blessed to have with us Commissioner Kuneva, who never fails to impress, and Mario Monti, who is such a monumental figure in his own right.

I think the power and potential of consumer policy is vastly overlooked and under-estimated, not the least by journalists who seem to have more or less slept through the pronounced changes that took place somewhere mid-term in the first Barroso Commission. It was originally spearheaded by Commissioner Reding and her workings on roaming charges, but was carried forward in a powerful, convincing and coherent manner after Commissioner Kuneva entered the Commission in 2007.

So what is the change that I am talking about? It’s the realisation that a policy and regulatory focus on consumers leads to better social and economic outcomes than Europe’s more traditional approach of protecting producers. Thankfully we had an executive from Philips on hand who explained that it is the user-centric approach, coupled with a belief in healthy competition, that is making his company so successful. I could just see jaws dropping in the audience when they heard that companies not only accept but embrace competition because it creates the internal pressure to drive forward innovation and deliver superior products and services.

If I have one prediction to make is that there will be a new “economic triangle” emerging in the next Barroso Commission. It will consist of the internal market, competition and consumer affairs. This is not business-as-usual and is a profound break with the past. It will reward companies that are innovative, entrepreneurial and relentless in their pursuit of consumer interests, and will punish those companies that excessively rely on user lock-in, rent-seeking, protectionism and subsidies – and there are many of these “zombie companies”. Think of how often you are not satisfied with a service but have nowhere else to turn to; how much you would like to switch providers but are prohibited from doing so or there are no alternatives (i.e. cable operators in Brussels); how much easier your life would be if your service providers just tried a bit harder, or were a bit more innovative. As an individual consumer, some of this may only be a minor inconvenience, but when you run an organization, the lack of proper and affordable business services is a drag on your productivity and performance. And hey, organizations and businesses are consumers too. That is often overlooked.

Either way, today’s event confirmed that we are entering a new era; that there will profound changes going forward; that the entire internal market project needs a “new deal”, as Professor Monti coined it. I couldn’t agree more.

Download Commissioner Kuneva’s e-brief on A Blueprint for Consumer Policy

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