00:07My guest today on 12 minutes with is Antonio Campinos, the president of the European Patent Office, an international organization
00:16with its headquarters in Munich, which examines as many as 200,000 European patent applications each year. President, welcome to
00:25the program.
00:25Thank you. Thank you for having me. So let's start with this perennial question of Europe's competitiveness problem. We're seeing
00:32a major political push here in Europe to solve this. We're hearing that the economy is lagging behind competitors, that
00:38we really need to do something about this urgently. When is your institution, the European Patent Office, come in into
00:45all of this?
00:46Well, before I tell you or try to explain where we come in, let me tell you that the diagnostic
00:52is known. It's publicly known. I mean, we need to complete the internal market.
00:56This corresponds to a non-costal barrier of around 40 to 60 percent for our goods, 100 to 110 percent
01:03for our services. This has been estimated of a non-generation of GDP of around 600 to 700 billion euros,
01:12which is basically what we need to complete the internal market.
01:16And it is clear that we need to remove as many barriers, as many bureaucratic barriers that we can, in
01:25order to free a little bit of space for micro entities, for research centers, for universities to bring as many
01:30ideas from the lab to the market.
01:33So, it's practically what we need to do. In particular, when you think about the trade volumes within Europe and
01:42between Europe and the rest of the world, we see that 60 percent of the trade volumes are between our
01:48member states and 40 percent of our member states and the rest of the world.
01:51So, in a way, we need to look at our competition rules and not say that we need to deregulate
01:58them. But it is clear that these rules are designed for within the internal market and not for Europe competing
02:03in the global market.
02:04So, we need to have a look into it. Because in the past 50 years, we didn't generate a 100
02:10billion worth company or a trillion worth company, which is basically the value of many, many, many U.S. or
02:19many U.S. companies or Chinese companies.
02:22Yes, Europe is known as a powerhouse for research, for innovation. But you've just described that the big economic costs
02:29of not completing the internal market and the fact that we don't have a European GAFAM, let's say.
02:33And why is that? What are the barriers?
02:36It's all about scale. So, we started about simplifying the rules, refocusing the rules, striking the right balance between international
02:44trade and trade within Europe.
02:47We don't have enough scale because we are fragmented. We are in some areas. We really act as an internal
02:55market. But in other areas, we still operate like 27 national markets.
03:00We have more than 30 stock exchanges in Europe. The value of all these stock exchanges together is 45%
03:08of our GDP. The value of Nasdaq, of Dojon, of S&P 500 is 150% of the American GDP.
03:19So, that explains why two-thirds of our investment in ARD, which are around 2.2% of our GDP,
03:26come from the public sector.
03:27And rather, when you look at the Americans, the majority of the ARD investment comes from the private sector. So,
03:34we have a problem of scale and of attracting sufficient funds in order to bring this idea from the lab
03:41to the market.
03:42And that's all the work that the Commission is doing, looking at the period of time, 2028, 2036, which is
03:493 trillion financial envelope, in order to allow our startups to get the funding they need and to be able
03:58to operate in a more seamless manner in the internal market.
04:02Do you think that the EU institutions, including the Commission here in Brussels, understands the enormity of the challenge? Are
04:08they focused on the right priorities?
04:09No, they are. I think that it's fair to say that in the past few months, I mean, both the
04:16European Council, the Council of Ministers, the European Parliament, and the European Commission are on the right track.
04:22And the free trade agreements are good agreements for us. They might be a little bit painful in certain areas.
04:29We saw the demonstrations, the strikes of agriculture in France.
04:35But the free trade agreements, what they do is they expand our internal markets. And as we have to compete
04:41with China and with the US, having access to the Canadian market, having access to the Mercosur market, having access
04:49to the Indian market, and more recently to the Australian market, is a good thing for us overall.
04:53We're hearing as well that, you know, when it comes to the big sectors of the future, clean tech, AI,
05:00quantum, that Europe is lagging behind, that China and the US are really accelerating.
05:06You obviously have access to a wealth of data as the European Patent Office into where innovation is actually happening
05:11right now. Is the outlook as gloomy as we're being told it is?
05:15Yeah, I don't think so. But I think that we really need to learn the lessons from the past. And
05:20it's clear that when you look at the research center, the major research center in the world, many are situated
05:25in Europe. Oxford, Cambridge, and SIC, just to name the two first that come to my mind.
05:29In terms of fundamental research, if we are not the best, we are among the best. And when you look
05:36at the patent data, you will see that when we are developing a technology at the fundamental research level, we
05:43have 50% of overall European patents.
05:47But when we come close to the market, which means when you have to embody this technology in products or
05:53in services, that's where you see that the Chinese or the Asian companies and the US companies, they come very
05:59strong at us.
06:00So we need to improve that. And that's exactly when you move this idea from the lab to the market.
06:06What are the consequences for the European economy of not doing that, not achieving that?
06:11We lose a race, which is called the standards, which is these patents who are very close to the markets.
06:19They will be those who will set the standards and they will be called the essential patents. So the most
06:26valuable patents. So we will lose that race. We will not be setting the standard as we've been setting standards
06:33in the past.
06:33We're also hearing a lot of concern about this kind of flight of manufacturing power to other parts of the
06:39world. I'm thinking especially of China, especially when it comes to those key sectors of the future. How much of
06:45a concern is that?
06:46Well, it's kind of a concern, you know, because I mean, when you look, for instance, when you look at
06:54what powers all this technology, immediately comes to your mind these rare materials or this rare earth, because basically all
07:05those who finish inium, gallium, germanium, lithium, you name them.
07:09And they are absolutely fundamental to produce what is called a permanent magnet. The permanent magnet functions without electricity, basically.
07:18And these permanent magnets, they use all kinds of high tech technologies.
07:22So if we were to create a supply chain from zero to the level the Chinese are, where they produce,
07:31they manufacture 90% of the rare minerals, and they have, their mines represent 60% of the overall volumes,
07:42it will take us easily 10, 15 years.
07:45And that's why I think, for instance, that another technology, which we have been talking in Europe, but not as
07:53much as we've been talking about AI or the quantum technologies, but it's the recycling, the materials recycling technologies, so
08:00that we build circular economies around specific technical field, it's fundamental for our autonomy, for our sovereignty.
08:08Yes. Yes. We are seeing, though, a push to deregulate, kind of a stripping back on some of the, maybe,
08:15the ambitions here in the European Union.
08:18Do you think that it's creating uncertainty, this kind of push to deregulate and pull back on regulation?
08:23No, I don't think so, because, you know, the AI Act, the Quantum Act, I mean, the act that relates
08:30to a technology that you can define vertically, there are good regulations, and we need to keep them, and we
08:39need to develop them.
08:39What I'm talking is about, you know, whatever implies a taxable fee, whatever implies bureaucracy, whatever implies registration, whatever implies
08:49licenses, whatever implies intermediaries that take apart of your time, that take apart of your money.
08:55And today, in the digital world, where we are, powered by AI and tomorrow by quantum, all these intermediaries, they're
09:03not needed, all these filling taxes and registries, they're not needed anymore.
09:08To close, I want to maybe take a step back and look globally, because there is a sense that we're
09:15seeing a big shift in power, maybe, where who's driving the global economy.
09:20We're seeing a lot of instability as well, a lot of volatility, particularly due to the geopolitical context.
09:28Where does this leave Europe, do you think?
09:30I mean, when you look at the 10 big sector, technological sectors, or you look at the 10 first big
09:38companies that file the more patents in these different areas, you will find four European amongst the 10.
09:44We're not bad.
09:45But we need to grow more of these companies.
09:48We need to grow more startups companies and become these first billion market value, the 10 billion market value, 100
09:56billion, the hectocorn, and then the 1 trillion.
09:58That's where we need to focus.
09:59Because there are major US companies that seem to be accelerating, accelerating, and making it very difficult to catch up
10:06as well.
10:07Some US multinationals that are investing more in innovations than certain economies.
10:14Yeah, I think that there's technological battles where we can bring some more incremental improvements, because we lost more or
10:21less the race, the race to the cloud, the race to AI.
10:25But we can still, we still have very excellent startups operating in these fields.
10:31But the next big revolution I see is the quantum technology.
10:35And we're still in the phase between fundamental research and development research.
10:41But we're coming very close to the market.
10:43And typically, that's where Europe loses the battle of competitiveness, of innovation.
10:48So that's where we need to focus.
10:51And to focus there, we really need to defragment the internal market.
10:55We might need to discuss, I mean, the creation of the stock market for the EU, and not these more
11:01than 30 international stock markets.
11:05And to scale up these startups to become global players.
11:08Okay, finally, just to close, we've had two major reports in, about two years ago, from Letta and Draghi, both
11:15previously Italian prime ministers.
11:18Yes.
11:19Mario Draghi didn't warn that if Europe doesn't do anything urgently, could face a slow agony.
11:25Is that still a fear, a possibility?
11:27I mean, at a macro level, macroeconomic level, we are among the most costly social models, and the most beautiful
11:35ones.
11:36I see myself in the European social model.
11:38But this social model, this pension system that we have, social security systems that we have, unemployment, needs to be
11:46financed.
11:46And in order to be financed, we have no other alternative to increase our productivity and to be more competitive.
11:52Great. Antonio Campinas, thank you so much for joining us.
11:54Thank you so much for having me invited.
11:57Thank you so much for joining us.
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