 Thank you so much and good morning pleasure to be here and all of you have really proven Enormous stamina as we are now nearing the end so welcome to this session on identifying Factors that support or hinder the scaling up of a promising New ventures. I think as many of you know, this is a key issue in Europe For a long time the policy Making focused very much on fostering stimulating entrepreneurship and But I don't think that was really that is an issue But not only because if you look at the actual figures roughly 15% of Europeans are self-employed It's more or less the same as in the United States if not a little bit higher So we have a lot of people who are willing to start companies to go it on their own and who are willing to take a risk So what's the issue? The issue is around this ability to scale up. So if you look at Europe, we tend to have a disproportionate a number of Static firms so these are firms that don't really grow but they also don't really leave the market even though they are not highly performing and Most of them are certainly not what was yesterday. I think referred to as frontier firms. So They are slow to adopt new technologies. They tend to be slow to Internationalize and they tend to not be really at the cutting edge of innovation This is creating a number of problems in the European economy I recommend some interesting work that the OECD is doing on the link between productivity and inequality Which I think warrants more attention But in fairness to the companies, I think policymaking has Add okay on occasion also actually incentivized firms to stay small. It was Peter Pratt the chief economist of The ECB who yesterday spoke about once a company reaches 50 employees and many EU member states they need to start introducing works council Etc. And so what this has led to particularly in Italy and France is a large large number of Small firms that somehow miraculously stop growing when they reach 49 employees But we also I would say have in Europe a much stronger emphasis on incumbents I challenge you to name many very large International companies that have come come up here in Europe in the last two to three decades I personally can think only of SAP and that's certainly very different if you compare that to other parts of the the world But we also I think see that many European founders actually tend to sell their companies quite early So American companies are always very active coming to Europe and buying up the new the new very promising young firms But increasingly we're also seeing that the Chinese are scouting in Europe and buying up young companies So This phenomenon of not being able or willing to scale up I think is is very real and I look forward to discussing this very important Issue with a very distinguished panel that I'm sure has many more insights to offer And with that let me immediately go to Stefan Neugebauer from a BMW We already spoke yesterday in a deviant in one of the sessions But Stefan is here as because he serves as chairman of the European Road Transport Research Advisory Council, and I think it was already mentioned several times in the discussion At this conference that this is really a very critical moment for European car makers You know that this is a very very important part of our Economy, but as you said yesterday Stefan a lot of the value now is not just in the car itself But it's actually in the in the digital technologies that are in the car It's how it interacts the interconnect connectivity So, you know you'll certainly have much to say about this topic, and I'll take it. I'll give it over to you now Thank you and Thank you for inviting an engineer to this innovation panel And thank you for inviting somebody from the automotive industry. Why? Because automotive industry is the most innovative sector in Europe We are spending 40 billion euros each year for research and innovation More than any other sector. So automotive industry is the most innovative sector in Europe, and we are Responsible for more than 12 million jobs 12 million jobs in Europe Yesterday you voted for the Deconstruction of your industrial sectors, and most of you said yes Deconstruction is very important. I completely disagree. I completely disagree in my point of view for automotive industry We should keep this heart of European Economy we should keep it and we should improve this by innovation. So Deconstruction is For me not the right word. Maybe we should think about Reconstruction and reconstruction by innovation and we need this technical innovation because we are challenged by decarbonization to avoid CO2 emissions and by the digitalization and When you look at the targets for transport for decarbonization Then it's absolutely clear then that this can only be solved by a system approach. This means Not only better vehicles, of course better vehicles, but also a better Traffic system better traffic management better logistics and to avoid traffic and here digitalization can really help and In our point of view Digitalization will be a boost Will be a boost for jobs and growth in Europe When you are thinking About what is needed for digitalization? These are not only the sensors in the vehicles, but the sensors will be produced by highly Technology companies in Europe with a lot of jobs. We need the sensors We need the infrastructures the roads this traffic signs. We need the software. We need the telecommunication We need the data exchange. We need all these things. So the old the the old-fashioned segment road transport Could be a real boost for jobs and growth in Europe And we need a lot of research for this area How can we organize this research in Europe? We have a very good tool for this. It brings together all the different stakeholders and the stakeholders are the startups the University the research makers the Supply industry the OEMs the car manufacturers the infrastructures the SMEs All these are the different partners and they are coming together by public funded Pre-competitive research Public funded pre-competitive research. So there are some people today in the European arena and Brussels arena. They think oh, we are spending money for this industry and automotive industry They are earning so much money Why should we spend money for them? We should kick them out from the funding Yes, you can do this, but then industry is out Why? Because no No private company will spend money in a pre-competitive public research project where the results of of Completely published so if you want to kick out industry Then you should do this, but then you destroy the ecosystem The ecosystem for boosting innovation in our for our society Therefore, we need to keep this and we need to keep also the funding for Industrial partners because they have to do the dissemination. They have to do the market introduction so we have a very successful European contractual Public-private partnership. It's a European green vehicle initiative. We did this It started 10 years more than 10 years ago Dealing with electro mobility. It was very successful very successful and in our point of view We should go on by creating another public-private partnership, which is dealing with digital digitalization of road transport if we do so We bring together the stakeholders the researchers the universities the industry and we can create the next level of technology And we can create jobs and growth. Thank you Stefan thank you so much. I think this was Very important to explain the sort of interplay between what private companies do and public Authorities because they will have to deliver on a lot of what you are talking about not just in helping to fund this But also in creating the infrastructure that you talked about So I think very very interesting what you what you had to say now next up is Jose Pozo a director of technology and innovation at the European photonics industry Consortium. This is an area where Europe has actually I think quite a few very promising companies I'm sure you will tell us about that and we look forward to what you have to say Thank you very much and first of all, thank you for the European Central Bank for inviting me It is an honor to be here today as I said I'm the CTO of epic the European photonics industry consortium we have 306 members most of them 90% of them in Europe and one of the things that we do is To promote photonics and to make sure people understand that photonics will make a big difference in In the way that we see the world in the way that we use the world the way that we interact with the world So yesterday was here and I had a really nice experience talking to all of you and many of you actually asked me What is photonics? So today I have to admit in the previous coffee break. I prepare this slide quickly To let you know what photonics is and photonics is most of you have heard of what lasers are lenses mirrors LEDs solar panels, but what can you actually do with that? So I summarized in three families with photonics you can make things a lot of people have heard of 3d printing We have heard from b&w laser based manufacturing is a big thing in Germany where you can actually construct almost everything using light But in addition you can sense things you can actually not only sense a weapon in In a carriage bar, but you can also sense cancer in tissue and You can also communicate things and that's what everybody knows about the optical fiber communication has revolutionized the world And now you can watch Netflix in 4k in your computer really fantastic things that you can do with photonics When you look at the epic Network at the 306 companies that form epic you realize that for a technology in which and you are totally right Europe in many of these fields is leading is leading you look at the companies and 60% of those companies have less than 20 employees And when I talk to them because one of the things my job really is to talk to these companies to understand What are the bottlenecks and how to connect them how to how to help them in this association? They all tell me we are scared to grow because most of the things that Anna has mentioned But also we are really at the valley of death. We have great IP. We are trying to scale up We are trying to find the tools and it's very difficult for us to find those tools that can allow us to go to the volume Manufacturing to go to satisfy the demands of all our customers. We have a few products in the market We are surviving but we have the ideas to grow, but we don't have we lack the means the tools to go to that volume manufacturing So I was very impressed by the the presentation of professor Berger That was really nice. You said that in the MIT and in the US there are these Innovation centers for for manufacturing and then you said that in Europe. There is this French Organizations that doing something in Europe. We do have also innovation centers for manufacturing European Commission has put lots of money on this around 100 million euros to set up pilot lines for the production of many different technologies among one of them photonics Five years ago the European Commission together with photonics 21 Allowed photonics to be one of the six key enabling technologies other ones where nanotechnologies biotech advanced materials Micro nanotechnologies and advanced manufacturing and when they said photonics a key enabling technology We want the companies who develop photonic devices to enable this production And we're gonna set these pilot lines for deploying this technology And all the things and you have here for examples peaks for life pie scale Mirfa picks up Those are pilot lines that today they said that this distribution share of facilities and companies can go to them And can actually manufacture their technology the each of them focus on different technologies For example peaks for life that's biosensors By scale does all that Mirfa focuses on chemical sensors and picks up that's packaging of Silicon photonics. I think many of you actually have heard of silicon photonics since you are working very close to MIT and Silicon Valley sit okay for me to take up all how many of you have heard the word silicon photonics So I count for the camera. I am counting five to ten percent Silicon photonics is one of these technologies that is gonna revolutionize the way that data is used in data centers They are gonna increase the capacity of data centers by one or two orders of magnitude They are gonna allow the companies that have been mentioned in this in this forum in the previous Partners like this Google Facebook Apple They're going to allow to have lots and lots of more data processing in the data centers But there is one problem which is that the silicon photonics IP a lot of it is in Europe So Europe has the key to enable this huge step by silicon photonics So to conclude my presentation. I think I still have one minute. I want to tell you a tale the tale of a Photonics company, which I'm gonna call photonics company X Photonics company X have Amazing ideas and great IP. They actually do the patent with the patent office They did a great patent on something in photonics. I'm gonna call it silicon photonics, right? Something in silicon photonics the IP was actually acquired through easy European Commission funded projects in the FP 7 Horizon 2020 programs Projects funded by the money from taxpayers European taxpayers and This IP has actually made this company do some business analytics do some business mod business plan and With the help of lots of consultants in the audience they managed to go To get this business plan and say we have to go to the market So they started it took maybe four days to two months as it was said in the previous presentation But they started company X How does this beautiful story end? Well, I'm gonna tell you about different outcomes the worst outcome I'm not gonna mention the company disappears. I'm not gonna say that I'm gonna say the happy endings and they're not so happy endings The first outcome the company is rapidly acquired by US company. Why Chinese company Z? I think maybe you already who know who Y and Z are and Yeah, for me, that's a really really not so happy ending Very happy for the for the company who developed company X But not for the taxpayers not for the European Commission Not for the money the effort from the European universities to develop silicon photonics to the point of be leading leading the world right now Let's focus on different outcome the company says we are not gonna sell we are gonna go fabulous We don't want to make our own manufacturing. We are gonna try to find other companies who do manufacturing for IP and try to negotiate their IP Two possibilities. They are part of a European ecosystem. Yes. That's fantastic. That's what we want to do That's what we want to promote help the companies help each other this company company X Finds companies in the surroundings. Maybe not yet graphically located, but in a clear ecosystem that can help them to the manufacturing There's a contract manufacture to another ecosystem to another company to a maybe CMOS platform in China Again, we lose the IP again. We lose the market. I like again Manufacturing is not done in Europe. Not so happy and The final one and is the one that I think we need to focus you one companies to scale up to ramp up We need to help them set up the facilities to do their own manufacturing Maybe share those facilities maybe do the spiral lines funded by European Commission But we have to help them and that's I think it will leave this room We saw clear statements of how we can help the companies grow into the point that they can do their own manufacturing Then we can say that we did a great job these days. Thank you very much Thank you. I thought that was extremely interesting because what it proves is I mean so much of our discussion is around technology I find that that's not necessarily our weak spot. It is much more about helping companies To stay here to do their business here So it's a lot around the larger framework conditions for companies, which is not oftentimes Not often enough mentioned in relation to to innovation Being scared to grow is for me as something very worrisome on the policymaking side So thank you for sharing that. It's also by the way the perfect segue to our next speaker who is Deborah Revoltella the director of the economic department and At the European investment a bank Deborah has done for many years very important Insightful research into what we are all discussing here today. So it'll be a pleasure to listen to you Deborah over to you Thank you very much. I feel I'm going back to the discussion that unfortunately I missed yesterday because I'm going to be more on the Economist side discussing but I hope still to be able to bring us some interesting point into the debate and The angle that they take as I was saying I'm an economist and working On different topics including investment activities because I work also in the European investment bank That is actually quite relevant for whatever we are discussing last year It's a European institution for the non-Europeans is a European institution Funded by the 28 member states of the European Union. We are supporting investment and last year We were financing us on 15 billion investments in innovation 80 billion overall and we are the largest venture capital in Europe taken at large We invest in fund-on-fans about at the end that we have a quite a strong rule. So What I'm going to present is basically some hints that come from a very recent study we Detectively will be presented in two weeks time and the study is Looking at so we have interviewed 12,500 firms in Europe being a representative of all countries all size of firms Etc. And we have a lot of insight on what is in the ring The old service is focusing on investment. What is constraining investment? What are the priorities of investment and different kind of investment for Per firm and also what are the constraints to investment activities that come from various Element and I think what is interest I skip this because they have a much less time than I thought I will skip a few of the slide. I think at the overall environment is very important We are talking Europe that is coming out of from a very strong crisis on investment point of view You have a recovery, but it's very much uneven among countries and still today We have investment that at the European level is some 8% below the pre-crisis level. So that's the contest where we are living in in terms of Business investment that we see that there is a recovery now actually we are in a positive phase of the investment cycle But what you see is that the firm are really Complaining on the quality. It's not an economic really term, but on the quality of their capital So they are not concerned on the fact that they didn't invest enough because they now feel that they don't have enough Production capacity, but they are feeling that the quality of the capital is not what could have been They feel that Technology is not a state of the art is some 50% of firms that say they have a key Mentor that is a state of the art also in terms of climate efficiency There are gaps in terms of a quality structure of capital and in line with these firm are made mostly Thinking for the future in investing into a replacement and also in a new product and services. So that is a very interesting point But on product and services, I will say something more going on again in terms of impediments firms that think that uncertainty and that's we are from everywhere Where is the main impediment to investments? But there are other important elements Well, which I wanted to detail a little bit more going forward that one is the availability of skills and the other two are labor and business regulations So I think in Europe we talk a lot to do about that we needed to do more about it but it's a particularly relevant for new firm younger firms and particularly relevant for More innovative firms to address that sinker related to labor market and business regulation And then we come to access to finance where the claim of the firms are not my claim Is that this is an impediment but only for some firms particularly the young one may be the innovative ones But it's not the major issues that the other impediment are more relevant. I Go quickly through some of the slide and adjust that catch your attention to a few things These are European firms and their intention to invest in the What sorry not an intention to invest what they have done I saw investing in whether they were investing in new products that are new to the company new to the country or New in the global market as you see I think the the last three parts are really the firms that are innovating In something new and it's a really an idea of innovation at large because it's a product of processes Etc. We ask something very wide and you see that you have some 50% of the firms innovating But mostly and there is a lot of room still to go on that is a new to the company new to the country So in Europe there is a lot of adoption of innovation. There are also leaders firms and according to countries you see the different dynamics, but a lot is still going on into these These are adoption of technology and upscaling and it's also fits very well I will it's what I was saying before about the quality concern in terms of capital I go to the slide on impediments and here basically we ask to all firms And then I have some means on what the young and innovative say but this is the picture for all firms on What are the key impediments and you see that? That the first one as I was saying is uncertainty and that's related to many different factors That are really also firm specific country specific And and Cycle specific order than structural, but but I forget these elements for now I wanted to concentrate on the other impediments and here I think what emerged and when I saw the result I was quite surprised is that for firms overall One of the major constraint to the investment is the availability of skills and here I think that if you If you look only for the young firms, you see a statistically significant a much higher probability That the firms that are younger they feel availability of skills also to be To be a major obstacle and that this is consistently true in almost all countries in 10 22 countries Out of 28 member states and the issue of skills I think it's something where we ever to To have us on a stronger policy response on different point of view at the European level So the skill issue is an issue in a core Europe in the Germany in other countries that you would expect because the economic Economic cycle is much stronger, etc But it's also a very strong constraint in all central Eastern European countries where you add a lot of also brain drain in the last years and and you have a lot of of of constrain at the end for the firm dynamic and I think on the skills part of no other element that I wanted to add I think it's Extremely important to do something in terms of skills development also at the European level Because there is a component related to the inclusiveness of growth that we are not of not really focusing here We are talking about competitive an issue But you can have a competitiveness associated to the inclusiveness of growth and their skill and skill development becomes extremely important The other two barriers that are quite relevant and are particularly relevant if you think at the innovative companies Is a labor market regulation and business regulation? I think a labor market regulation the literature shows that there are that First the young firms that tend also to To to be more affected that there are scale issues and I think we find exactly the same thing a gap at the 50 on a growing firms so the growth firms that can be really Affected by labor market regulation and business regulation But I think that there is another element that one has to think about Labor market regulation is also affecting the propensity of firms to invest in intangible And I think it's a very much approved by the literature and business regulation I very much affects the reallocation of the resources in most cases We're coming out of from a crisis that like the one that we have seen in Europe Is a very dangerous thing you try to get the resources blocked in the wrong areas And you don't have the necessary reallocation of resources. I just jump up quickly to almost the last thing because I'm Using a lot of time. I was saying that finance is not the main constraint But it's still a constraint for certain firms in particularly the most innovative one I think what we clearly see is that there is the most innovative I don't have it in the in the Slide but the most innovative firms have a statistically prove much a probability of having internal financing rather than external financing and that's really coming from From the environment that we also see from the survey that Young firm have a much more recourse to along from family and friend a little bit more equity But then they also tend to be more finance Constraints, so at the end is not the major impediment of the finance part, but there is something to do in terms of finance If I can adjust the last word on what the AB group is doing on that point of view I was saying at the very beginning that we are a European institution. We are Dedicated to supporting investment activities and last year we were lending almost 15 billion directly to innovation Projects and among the other thing I think we are present in all the scaling up a phase of financing of innovation among the other thing I think one of the most relevant success of what we do is what we are doing is also related to the venture capital where in the period 96 to 2014 we were lending almost 11 billion of investment in a venture capital as a fund of funds and What we are really keen of doing is trying to demonstrate that we are Fund of the fund but we are catalyzing order investment and I think we have quite a some good result Proving it. Thank you so much I think that's extremely important to have sort of data at the firm level and asking them what Concretely are the bottlenecks so I mean, thank you for sharing that with us. I thought that was extremely Extremely interesting. So last but not least we now go to Vladimir Bulo which the co-director of the MIT innovation initiative and Also the person who's responsible for this amazing new Nanotechnology Research Center, which was already mentioned last evening over dinner of letting me a great You can be with us and over to you. Thank you very much I'm gonna try to be as quick as I can Telling you about how to redefine innovation for from perspective of a startup I think it's very important to recognize that as you do innovation you're spending money You're actually not generating value The value is only once in a while going to be generated if that particular innovation can truly be scaled up To get you to the place where you can't scale up. That's a very important place to be but the one thing we often miss Is what's the journey from innovating the very first idea to actually reaching million people with that idea? So I'll ask very simple questions on how long does it take to actually innovate? And so let's take some very simple examples at the beginning of the 20th century a tremendous innovation came about it was known as the zipper Now if you look at the zipper and you ask how long should they take to make some small mechanical parts string them together and Use them as a zip. Well, it took about a dozen years 12 years roughly speaking from the first idea To the ability to actually make a million boots that use the zipper Why because the manufacturing process for making small parts that needed to be made precisely simply do not exist It was a brand-new innovation became much simpler once the foundry of making such small parts came about and anyone else can reproduce it Let's move to the middle of the 20th century and look at a little more advanced innovation of Velcro And again, how long did it take from the first idea to million people using it primarily popularized by the Apollo missions? But still it took about 13 years to figure out how to extrude the fibers get the right kinds of young modulus and flexibility and Now that is all the things we now take for granted right because the foundry of making those particular Elements exists and it's very easy to utilize for the next replica of a velcro like technology But if I'm going to invent an entirely new technology, how long will it take? So here is another one that you might have seen around in form of a cell phone that might have indeed a screen up in the front The screen that you typically look at will either be a liquid crystal or more recently organic light emitting device also known as the OLED How long did it take to make OLEDs from the first demonstration to actually million OLEDs being used in form of cell phones? Well about 25 years Why because we used an entirely different kind of a semiconductor known as molecular thin film No one ever bothered figuring out how those work. It took a while and once you actually had one pixel that worked really really well Making a million pixels that all of them work just right and all of me work with hundred percent yield because it turns out us as users We don't like to have displays that have bad pixels You actually have a yield of ninety nine point nine nine nine percent in order to be able to make it to something You can sell well that took 25 years because no one knew how to actually put down Semiconductors of that quality over large areas as needed to make actual displays That's why OLEDs still come in a form of cell phones rather than large screen TVs Those are available as well, but those are much more expensive Well, so look at the journey of how to make a new idea and let me simplify it and takes let's say a decade I'm simplifying it right could be a little bit less or could be a lot more as you've seen What happened before as Suzanne Berger pointed to us before is well Used to be that there will be a spark of innovation maybe at university maybe at some other innovation center and then Corporate labs would hear those ideas by listening to us give talks at conferences reading our papers and Given the first three years at universities next seven in corporate labs You could finally be ready for production At universities we spent money in a corporate labs product development. We also spent money so still we didn't actually generate a profit from this investment and Hence thanks to the financial pressures as a pie study informed us There's a new way to think about how to make money in such world what spends all this money making new ideas Why even focus on the green and blue areas there? Why not just look at the very last end of the process and indeed companies like Apple the most successful technology company out there? Looks at what is available and it comes up with clever ways of designing those particular elements into an existing technology So who takes the middle slack part that corporate labs are not focusing on anymore? Well, that is where the startups are and from prospective universities This is the most exciting place to launch our students into as a matter of fact The reason why we have students at universities is because we convince them that their job is to change the world Well, how are they gonna change the world? They're gonna step into an entity that does someone else's work in years 9 and 10 of production process They can change the world by stepping into a startup having it daring enough To be able to define their own vision of what the world should be and then going ahead and implementing it And you know it takes naivete to do that, right? Who in the right mind would choose the as much? Uncertainty to undertake as their job and career the first one they're gonna step into Because actually if you look at the success of ideas, this is back in 1997 But you can reproduce this study by others and you'll find very quickly that out to a 3,000 raw ideas You might find file a few of those as disclosed patents and maybe 150 patent applications might even come out of that, but only one Will actually yield a useful technology Now how come? Is it because all those other ideas are bad? Well, no It's the support of the idea as it marches through the ecosystem of being actually developed into a useful thing That actually starts killing off one idea after another until you finally do have a success You're gonna be able to share with others Alright, so how do I define then the next set of opportunities? Well, that's what MIT focuses on Fiona Murray pointed to us that we study both the practice of innovation Guys like me who actually make technologies, but much more importantly we focus on the science of innovation Why is it that some technologies do so well and why is it that others do not? Why is it that certain ecosystems are so effective in translating the next set of ideas and why is it that others do not? Those are the rules of regulations that can then allow us to make simple choices and actually redefine the next set of technologies So let me give you one example So this is a plot that's now our probosc Marty Schmidt and our colleague Alex low come put together a little while ago They were looking at things and saying how much do things cost per pound and what's the annual volume? You're gonna have to you know make them out to still make a viable product So make big things like Boeing 777 or one of those huge tools that does silicon processing They weigh a lot they cost a lot per pound or per kilogram those of us in Europe here But the annual volume is relatively low hamburgers on the other hand Costs very little per pound and indeed you make a lot of them So let me imagine one day trying to make actually a transformative energy technology Well, wait a second if I'm gonna do that. I'm gonna have to make a lot of that technology So I need to be at the cost per pound of a hamburger So what would be a transformative energy technology? Well, how about silicon solar cells Well, the challenge with those is they are kind of heavy So is there a way for me to redefine solar cells by using this graph? Well, yes Why silicon solar cell heavy actually turns out because a piece of glass that's holding it is very very heavy And you need it because silicon is brittle. You want to make sure he doesn't crack Well, can I make a solar cell like this? This is a piece of paper Painted with molecular semiconductor seems one needs those OLEDs that can also act like a solar cell But ways. Oh, it's only a fraction of what the silicon piece of glass is to silicon with a piece of glass ways Why does this matter? Well, it might matter if indeed I want to reach that particular point of large production Give me a lot of Lot lot of production but make sure the weight of this thing is not very much So the cost is not very much Because if I can have power in a form of such portable light weight Imperceptibly light solar cells I might be able to put it on any surface. I want in developed world But more importantly I can actually make it affordable to have it be delivered in the developing world Where in India there are 600 million people without access to grid electricity and they can't have it because it's a year salary to buy One silicon solar panel Bring down the weight and you'll bring down the cost and you'll be able to transform the lives of About one and a half billion people in the world Very simple metric guided by the intuition that you can derive by asking What's the science of innovation not the practice of innovation or go ahead? You know make it even more ridiculously light Here is a picture of a solar cell that is so light that you can put it on top of a soap bubble It's about 1 400 times as much as silicon ways And yes, it's imperceptibly light and you know what use another kinds of nanoscale technologies And you can make it imperceptible You can make solar cells that actually look like absolutely nothing They look like a piece of glass because they do not absorb visible, but they do absorb if a red light Well, would you ever use those? Well, yes, any surface you touch now can be solar active Internet of things can be real because it wouldn't require powering this will provide its own power If I give you a Kindle that is coated with such a solar cell You will never have to recharge it again because the ambient light would go and provide you the power you need Similarly, if I could cover a skyscraper like this one with such solar cells about a quarter of the electricity We of that skyscraper could could be provided with today's transparent technology Well, that's a transformative way of thinking or what opportunities are and so when we think about scale up we think about this our carriers of innovation are people and this Particular picture is actually taken from our largest auditorium And what you're looking at is a few students presenting their final project in class called two double and nine product engineering This is what gets our students to come and see other people present things If you want to get together one thousand two hundred and twenty six students show them technology That's what works at MIT and The reason why it works is because our ecosystem is geared towards that That's what you need to build to generate innovations You want to have the enthusiasm and naivete that your job is to change the world and you will actually do it You'll guide yourself to the following which is about 31% of all of MIT Alums are named as inventors of patents and you can ask how many of them start companies out of 130,000 alums about 30,000 of them as Fiona found out with Ed Roberts as a co-author That 30,000 130,000 alums actually start companies Add the values of companies and comes out to about 1.9 trillion dollars or roughly equal to 10th largest economy in the world That's what innovation is about and that's what you could be done by generating a cluster of people excited enough to make the next step together Excellent. Thank you so much. I'm very glad also you spoke last because you again put everything a little bit into context We're running out of time, but before I go to the floor I want to have a brief exchange between Vladimir and Stefan because what emerged in our preparatory Discussion was what you were talking about the breakthrough technologies and Stefan made the point well in Europe were actually much better at incremental innovation sort of improving a little bit at a time and then Vladimir Tell tell the group what you said in there in one minute or less You spend one dollar on research you spend ten dollars in development and you spend hundred dollars on production That is the usual ratio of What you need to cost spend out so the moment you start doing production you have committed yourself to where you need to go There are two types of innovation Stefan's way of innovation in my way of innovating And I think those are absolutely both valid as a way of moving the world forward The question is what up final output you want is it indeed to read train to read redefine the world Or is it to improve the world beyond what he's seen before thanks to the existence of today's technology? They're both valid ways of advancing and what did you say about Tesla? Well, I was mentioning the fact that if batteries in Tesla happened to be one-tenth of the cost of what they are today I'm not sure that we would have combustion engines That would be a transformative way of changing a very different industry This is the perfect segue to Stefan because this will be Existential for Europe. This is our key industry. What will happen to Germany if we get this wrong? Stefan, can you answer this in two minutes or less? I try to I try to First of all Tesla is a perfect example How Texas can help to introduce innovation to the market? When I thinking about Some European countries like Denmark in Denmark Tesla is very successful Why is it so successful? One reason is that a Tesla has a lot of benefits in Texas and therefore a Tesla Which is a high-end luxury car costs more than a BMW 3 series I was responsible for so You can imagine Taxes are impossible, but now this is changing. The second thing is that the European OEMs the car manufacturers They have stakeholders and they want to earn money. They want to earn money and the financial model of Tesla in US is different from from this the third thing and now I'm talking as an engineer that the Tesla car in a techno technology point of view is a traditional I would like to say Old-fashioned car what they did is they put 700 kilograms of batteries in a luxury car with more than two tons two in the 2.2 or 2.5 tons and this is not What we have in mind when we are talking about Sustainability, but they have a big market success and why do they have this big market success? Because they did quite the opposite of the things which had been recommended by the Political level the political level. They wanted to have small electric city cars in the lower segment Tesla did quite the opposite and now the political level they're talking to us and say Well, why didn't you do this like a Tesla? so But we are doing this and we launched the European green vehicle initiative I just mentioned and the whole Automotive sector in Europe is changing to electromobility. This will happen. There's no doubt about this This will happen now We are in a transition period and the important question is when will it happen? How fast will it happen and so on because we have to change our business and at the moment you as a customer You're not buying these cars You're not buying these cars, but I'm quite sure you will buy these cars in the future Because we are improving these cars. So we are working in the transition phase Very good. I'm very glad we had this exchange because as I said before this will be absolutely crucial in Europe That we get this right and so we open to the floor for very brief comments or questions I have to ask you to stay under one minute and to To introduce yourself briefly we go first to you, please Microphone very quickly, please. Where's the microphone? Don't we have a microphone Okay, and then what wait, it's coming. It's coming. It's coming and Very very quickly just just on the question of value and how you create value. This is particularly to Stefan You mentioned the Tesla what we're talking here is about user centered design the value that the consumer views It's about the image of the product It's about the the dynamic that the feel that the customer gets and interacting with the product as an engineer How would you comment on that because one thing that Tesla does really well is project itself as something? Like Apple does as an item of value in itself its design its flow its interaction with the user It's much more than engineering. What are your observations on that? We'll take a couple. Thank you very good point user centricity We had a gentleman back there. Please introduce yourself and ask a very quick question and you need to run faster I'm Jean-Jacques de Croft I wonder if there is not a huge disconnect here We talk about ecosystems and all these very interesting and complicated concepts but What the entrepreneurs are telling us through your survey yesterday the testimony of a gentleman is that We want less regulation. We want labor markets that are more flexible Less cumbersome and so that there seem to be low-hanging fruits that we we don't Take advantage of and shouldn't we focus on that first and then also on ecosystems and Thank you It's it's a valid point you're making because a very few people would make the connection between innovation and regulation Where regulation can actually also be an enabler of innovation if you think about the GPS standard Which is which was a regulation who else wants to go the gentleman over there and and you already have the microphone very good You're improving. Thank you. Go ahead a brief comment I don't think we're very far away from electrifying our cars already My son told me a couple of months ago His car is fine, but he's thinking about the next car He did a calculation which is almost surprising because he's not an engineer and he's not numbers oriented He did a calculation the higher price of the original cost Offsetting against the lower fuel costs and he determined that with a certain amount of Kilometers per year the electrical car is cheaper over its use time His next car will be an electrical car And I would guess he'll probably be in the market in a year or two There are lots of others who this is not Adequately conveyed to the customers they see the higher original acquisition cost Nobody bothers to tell them that their fuel costs are going to be a lot lower Electricity costs less than gasoline per watt delivered on the axles Very good. Thank you before I go back to the panel Is there anyone in this room who actually has scaled up in Europe? Okay I will let that speak for itself. No, I'm kidding. You know, I'm gonna go back. I'm gonna go back. Yes Okay, so I'm gonna go back to the panel have to ask you to reflect on everything you heard You won't be able to answer everything just in one minute or less. You can respond to what you just heard and Then I'll come back to you one last time for yeah, I'll already tell you I want you to make one recommendations in 20 seconds or less so you can already start thinking about it But now we start with you Stefan very briefly. I Completely agree Tesla did a great job by creating this image and the image for the premium segment and Europe is strongly linked to the premium segment is very Important and we can learn out of this. I completely agree image for premium for European cars is always important Excellent. Thank you. Josie Yeah, actually, I do agree on the value One of the things that makes me worried is I don't like to live in a world in which you can pay for your groceries Using an app, but we don't get the screen for cancer regularly I don't like living in this world actually and the reason we live in that world is the way that we define the business case of the Companies we're always looking at black boxes. How much money you put in how much money you get out But not what what is the cost of having a person only one day in a hospital instead of three months? What is the cost of a life? What is the cost of an early diagnostic of cancer? Why it's not that added to a business plan? Thanks. Excellent. Thank you, Deborah. I I fully agree that there is more to do in terms of a regulation and regular labor market regulation and business regulation is something that has to be tackled and I think it's part of the strategies that the European level to try to do more in In that direction, I think he's a is actually very good at to complement the two things So do these and also do whatever we are hearing that is extremely interesting In terms of a creating ecosystem, etc. So complementing the two things. Thank you So the benefit of clusters of innovators is that you can very rapidly exchange a labor force in a particular company in order to meet the need Indeed the success of Silicon Valley in many ways is because everyone is doing software And you can switch jobs in a matter of a day and find yourself useful to another company because of your talents Enabling such rapid change of ideas is really what leads to innovations And if anything that hampers ability for humans to exchange is indeed was gonna slow us down Wonderful. Thank you so much before I let you go as was just said I work for the president of the European Commission When I go back to Brussels What do you want me to say to him on scaling up one recommendation one thought 20 seconds or less? We start with you Stefan Go on with the successful public private partnerships So say On the on the words of Carlos Muet as yesterday be techno-optimistic we have a problem to solve for we have a nice problem to solve Very good. Thank you Deborah I think at the the only show on skills and education and thinking about the stronger European intervention in terms of Education something that is more also appealing on a European point of view as soon as Thank you. Let me very simple develop a strong partnership with MIT I don't mean to I don't mean to be rude But I now need to ask you to get off the stage very quickly Because there is no break between now and the next session and I ask our moderator for the next session Please come up along with the panelists, you know who you are quick quick quick quick quick or otherwise We're gonna lose a lot of people in the room. Come on