key: cord-016285-cwhmm3f6
authors: nan
title: Challenges to the European Exception: What Can S&T Do?
date: 2006
journal: A New Deal for an Effective European Research Policy
DOI: 10.1007/978-1-4020-5551-5_1
sha: 
doc_id: 16285
cord_uid: cwhmm3f6

nan

A quick review of the available evidence shows, however, that, while great strides have been made over the past few decades towards the achievement of these goals, Europe is facing significant challenges in most if not all of these areas. Economic growth is slow. Europe's competitive position is feeble. There are not enough jobs, and not enough of them are high-level. Europe is still characterised by significant poverty and regional inequality. An important demographic challenge is emerging. Europeans' health is affected by serious lifestyle and contagious diseases. And the environment is being degraded.

This is undermining what Europeans are most proud of and turning Europe into a negative exception at global level. The term "European exception" is most often used to refer to a European country not acting in accordance with what most other European countries are doing, whatever the field. Sometimes, however, the vocabulary is also used to refer to how Europe behaves differently from other advanced world economies. Usually, reference to the European exception has a positive tone to it. Europeans are proud of their commonly held values, their social model based on egalitarianism and solidarity, their high level of environmental awareness and protection and so on.

However, Europe appears to be the only advanced economy suffering from chronic low growth and high unemployment, and an unceasing lack of dynamism. Its levels of poverty and of individual and regional income inequality are not that far removed from US levels. And this makes Europeans feel anxious, and unsure of themselves, their future and further European integration.

Significant change has characterised the world economy over the past few decades. World trade has been liberalised as both formal and informal trade barriers have been reduced significantly, or disappeared altogether. Capital roams the planet freely in search of the best investment opportunities as barriers to capital mobility have been eliminated. Global communication and transportation networks have become denser and better integrated through a combination of technological and organisational innovation. The speed of technological change has accelerated while technologies are standardised more rapidly and use is made of modular production systems. As the combination of these factors has made it possible to locate the production of goods and services anywhere on the planet and still serve global markets, the global production system is in the process of being reconfigured.

The new international division of labour not only provides both developing and developed countries with ample opportunities, it also has shady sides. On the one hand, low-, medium-and to an increasing extent high-technology manufacturing and services industries are under threat from delocalisation or so-called off-shoring and outsourcing, resulting in at least short-term disruption and unemployment. Employment is also under threat from rapid process innovation leading to productivity increases. 2 On the other hand, rapid product innovation provides developed countries with opportunities to improve competitiveness and serve global markets by fleeing forward as it were. The race to upgrade the economy is never-ending, however, and innovation-based advantages are fleeting and unsustainable as rapid standardisation and modular production techniques quickly allow the production process to move partially or completely to developing countries.

As reflected in its lacklustre economic growth performance, Europe has not yet adapted to the rules of this new game. In the first half of the post-war period, the European economy grew as fast as the world economy ( Fig. 1.1) . 3 In the second half of the post-war period, however, the decline in economic growth was more pronounced in Europe than in the United States, Japan and other OECD economies (Figs 1.1 and 1.2) . In the last 15 years or so, Europe has done worse than the United States, while Japan has once again started to outperform Europe, and the large BRIC (Brazil, Russia, India, China) economies and smaller East Asian economies continue to grow rapidly. 4 The growth of output amounted to 1.3 per cent in the Euro area in 2005, substantially lower than the 3.5 per cent in the United States and the 2.7 per cent in Japan, and the 4.8 per cent at world level. Output is projected to grow by a higher 2.0 per cent in the Euro area in 2006, still Economic growth in the euro area has been lagging that of the best performing OECD countries since the mid-1990s. It should be acknowledged, however, that some EU countries have performed rather well economically in the past decade. This group includes the Member States formerly classified as cohesion countries (especially Ireland), as well as Finland, the Netherlands and the UK. Year Cumulative growth gap Fig. 1.2 . Slow European economic growth in the second half of the post-war period compared to other industrialised countries (cumulative economic growth gap between the EU and the other industrialised countries (current prices and current PPPs)) Source: DG Research Data: OECD Note: For both the EU-15 and the non-EU-15 OECD countries, 1974 GDP at current prices and current PPPs (billions of dollars) was taken as 100. For all following years, GDP growth in percentages relative to the 1974 amount was calculated. Then the series for the non-EU15 OECD countries (Australia, Canada, Iceland, Japan, Korea, Mexico, New Zealand, Norway, Switzerland, Turkey, US) was set to 100 and the difference with the series for the EU-15 calculated.

significantly lower than the 3.4 per cent in the United States and the 2.8 per cent in Japan, and the 4.9 per cent at world level. 5 Whenever Europe has been able to increase productivity in the past it has suffered in the field of employment, and vice versa, pointing to the existence of structural barriers to growth. 6

Underlying Europe's lacklustre economic growth performance is its weak competitive position. The most common definition of competitiveness refers to the overall capacity to improve standards of living in a sustainable way. 7 States during the 1950s and 1960s. But since the 1970s, European standards of living have not increased relative to the United States ( Fig. 1.3) . 8 Labour productivity is another common measure of competitiveness. Though, except for a few countries, the productivity gap was never closed in the end, for most of the post-war period the EU somehow caught up on average with the United States. 9 This catch-up has now stopped and is even being reversed. Since 1995, for the first time in three decades, growth in US labour productivity has outstripped that of the Union (Fig. 1.4) . 10 This EU productivity downturn is of a structural nature and mainly due to an outdated and inflexible industrial structure slow to adapt to the intensifying pressures of globalisation and rapid technological change. 11 Deindustrialisation is often taken as a further sign of Europe's deteriorating competitiveness. The fear is that slow labour productivity growth, high labour costs, 1970  1972  1974  1976  1978  1980  1982  1984  1986  1988  1990  1992  1994  1996  1998  2000  2002  2004 Year GDP per capita (US=100) EU15 EURO AREA Fig. 1 and short and inflexible working hours drive entire industries to low-cost, hightech countries in Eastern Europe and Asia. The evidence for deindustrialisation is not clear-cut. Some analyses point out that industry still accounts for the same important share of Gross Domestic Product in terms of volume as in the past, while the declining share in terms of value added and employment is due simply to decreasing prices because of productivity gains and exposure to competition higher than that for services. Should it occur, the impact of deindustrialisation would indeed be worrying: the existence of many services depends on the presence of industry; industry pays better wages than services, even for low-skilled jobs; industry accounts for most innovations and technological revolutions; and industry has an important strategic role. 12 Europe's feeble competitive position is also clear from its weak trade performance, especially that at the high-tech end. Europe's most dynamic export products are generally not those one would closely associate with the knowledge-based economy. The top three products with the fastest growing market share are floor coverings, pork and poultry fat, and hemp. On the other hand, if one looks at products for which market share is in major decline (> 10 per cent loss in market share), the EU has many more (345 product groups) than the United States (65) or Japan (90). What is more, in Europe many technological products are among them (e.g. air launchers, turbines, insulating glazing, drugs containing alkaloids or hormones, telephones, photographic film). 13 High-tech manufacturing exports represent a much smaller proportion of total manufacturing exports in Europe than in the United States or Japan (in 2002, 19.7 per cent vs. 28.5 per cent and 26.5 per cent respectively). 14 Europe's share of global high-tech manufacturing exports, though increasing, is lower than that of the United States (in 2002, 16.7 per cent vs. 19.5 per cent respectively). 15 And Europe runs a structural deficit in high-tech manufacturing trade, whereas the United States and Japan run surpluses. 16

The European employment input is significantly lower than that in the United States. First, though apparently catching-up, the European employment rate is still substantially lower than that of the United States ( Fig. 1.5 ). In 2004, the EU-25 employment rate was 63.3 per cent and the EU-15 one 64.7 per cent, so 6 to 7 percentage points below the target under the Lisbon agenda, compared to 71.2 per cent in the United States. 17 This is mainly due to the limited participation of women, the young, and the elderly in the labour force. At 55.7 per cent and .0 per cent, the female and older people's employment rates were about 4 and 9 percentage points below the Lisbon targets for 2010. 18 Second, Europe also scores lower than the United States in terms of the number of hours worked annually per employee ( Fig. 1.6 ). 19 For a long time, the low employment rate and number of hours worked annually per employee were explained with reference to the European emphasis on work-life balance. A growing number of authors draw attention to the existence of disincentives to work, however, the main one being the lack of employment opportunities. 20 This lack of employment opportunities is clear from the high unemployment rates. In 2004, about 19.4 million Europeans were out of work. This equalled 9.0 per cent of the labour force, some 4 percentage points higher than the rates in the United States and Japan ( Fig. 1.7) . 21 The proportion of high-level jobs is also considerably lower in Europe than in the United States. 22

Though Europe likes to pride itself on its superior social model, poverty rates are rather high, and regional inequality is substantial. In 2004, the at-risk-of-poverty 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Year

EU-15 24 The Gini coefficienta number between 0 and 1 used to express the degree of income inequality, where 0 corresponds to perfect income equality and 1 corresponds to perfect income inequality -was 0.30 in both the EU-15 and the EU-25 ( Fig. 1.8) . 25 The share of children living in households with income below the poverty line ranges from 7 per cent in Slovenia and 9 per cent in Denmark to 30 per cent in Slovakia. 26 28 The EU is also marked by substantial inequality in income levels. In 2002, Gross Domestic Product (GDP) per capita was below 75 per cent of the EU-25 average in 63 out of 254 NUTS 2 regions examined in the EU-25. 29 The highest 28 Eurostat. 29 At the beginning of the 1970s, Eurostat set up the 'Nomenclature of Statistical Territorial Units' (NUTS) as a single, coherent system for dividing up the European Union's territory in order to produce regional statistics for the Community. NUTS subdivides each Member State into a whole number of regions at NUTS 1 level. Each of these is then subdivided into regions at NUTS level 2, and these in turn into regions at NUTS level 3. Leaving aside regional Gross Domestic Product per capita (Inner London -United Kingdom) was about 10 times the lowest one (Lubelskie -Poland).

Enlargement, for the European Union, is at one and the same time a challenge and an achievement, a "raison d'être" and a "façon d'être". It is a continuation of the historical process that started over 50 years ago with the Communities' inception, developed through several steps (in 1973, 1981, 1986, 1991, 1995) , and reached a high point -albeit not an end-point -with the enlargement of the European Union to 10 countries of Eastern and Southern Europe on 1 May 2004. Preparation for that enlargement took several years and by the time they joined, the EU-10 had successfully transformed their economies from centrally planned to functioning free market ones. Compliance with the Copenhagen criteria for accession served as a powerful catalyst for change. This assessment is detailed in a recent stock-taking exercise in which the Commission services have provided strong evidence and analyses indicating that the 2004 enlargement constitutes an economic success for the "old" and the "new" Member States alike. 30 It has to be noted that enlargement has been a dynamic process rather than a discrete event and that its effects will become visible over time. Figure 1 .9 shows that convergence and catching up in real income have been at work throughout the period since the late 1990s. Per-capita incomes are now much closer to EU-15 levels than they were in 1997, the year in which enlargement prospects crystallized in the Commission's Agenda 2000. After the output collapse in the early years of transition, growth rates in the EU-10 have been higher than in the EU-15, but also more volatile. The key contributors to actual and potential economic growth in the EU-10 have been capital accumulation and technical progress (the so-called Total Factor Productivity, TFP), while the contribution of labour has been mostly negative (that being a reflection of weak employment growth and, to a lesser extent, of an ongoing decline in hours worked per employee). In general, and consistent with the convergence hypothesis, Member States with lower initial (1997) per capita income tended to grow faster in the intervening years.

Birth rates continue to be low in Europe. 31 Everywhere, the fertility rate is below the threshold needed to renew the population (around 2.1 children per woman), the local level (municipalities), the internal administrative structure of the Member States is generally based on two of these three main regional levels. This existing national administrative structure may be, for example, at NUTS 1 and NUTS 3 levels (respectively the Länder and Kreise in Germany, or at NUTS 2 and NUTS 3 (régions and départements in France, Comunidades autónomas and provincias in Spain). 30 of AIDS deaths was estimated at 3.1 million. 38 In Europe, the number of newly reported HIV infections is increasing, while that of newly diagnosed AIDS cases is decreasing. In the 17 EU countries with data available for 1996 and 2003 for both HIV infections and AIDS cases, the number of newly reported HIV infections increased by almost 75 per cent (from 7641 to 13,257) while the number of newly diagnosed AIDS cases fell by over 55 per cent (from 4 085 to 1 772). 39 Europe is also affected by other communicable diseases including SARS and avian influenza.

One of the most worrying challenges for Europe, and indeed for the whole world, concerns the deterioration of the environment. European citizens overwhelmingly agree that the state of the environment influences their quality of life (72 per cent), that policy-makers should consider the environment to be just as important as economic and social policies (85 per cent), and that policy-makers should take into account environmental concerns when deciding policy in other areas such as the economy and employment. 40 "A high level of protection and improvement of the quality of the environment" is a European Community objective (see above). Europe has been implementing environmental action plans and pursuing sustainable development strategies at both national and European level for quite some time now. It plays a leading role in the fight against global warming. 41 And it occupies a strong position in the field of environmental technologies.

Yet, because of population growth; consumption patterns; market, policy and political failures; features of existing technologies; and world views and values, Europe and the world at large are still far removed from a development trajectory that is truly sustainable, that is, which satisfies the current needs of society (growth, competitiveness, employment, etc.) without compromising the needs of future generations. 42 European citizens worry most about water pollution (of seas, rivers, lakes, underground sources, etc.) (47 per cent); man-made disasters (major oil spills, industrial accidents, etc.) (46 per cent); climate change (45 per cent); and air pollution (45 per cent). 43 The Sixth Environment Action Programme of the European Community 2002-2012 (6 th EAP) identifies four priority areas for urgent action: (1) climate change; (2) nature and biodiversity; (3) environment and health and quality of life; and (4) resources and waste. The environmental objectives of the EU Sustainable Development Strategy include: (1) addressing climate change; (2) better management of natural resources; and (3) making transport more sustainable. A 2004 review of nine recent comprehensive analyses of global environmental problems (Table 1 .1) showed near-unanimous agreement that the three problems posing the greatest threats to the global environment and continuing economic development include: (1) water quality and access; (2) climate change; and (3) loss of biodiversity. 44 Climate change forecasts indicate that, if the level of emissions is not curbed, the temperature level will rise and risks such as water shortage, malaria and hunger will increase and affect millions of people by 2080 ( Fig. 1.11 ).

Addressing such environmental problems is highly complex. One of the premises of sustainable development is that environmental problems interact with each other, as well as with economic and social issues. Climate change affects agriculture, forestry, water availability, marine systems, terrestrial ecosystems, health and, last but not least, the economy. Forests and oceans act as climate regulators but also harbour a wide diversity of species. Decisively tackling the issue of biodiversity will require i.a. making forestry sustainable, addressing pollution, and dealing with climate change. Pollution negatively affects health, from allergies and infertility to cancer and premature death. In the mid-1990s damage costs to the EU caused by air pollution originated in the EU (see Table 1 .2) were calculated to be around 2 per cent of EU GDP (ranging from 0.3 to 3.2 per cent) and damages to EU and non EU countries caused by air pollution originated within the EU were estimated to be 2.6 per cent of EU GDP (with ranges between 0.4 and 6.9 per cent), with health damages accounting for the largest share. 45 An animal and human health problem like aviary flu also constitutes a threat to biodiversity.

Environmental degradation contributes to the increase recorded in the number of disasters and, in relation to this, to a heightened sense of vulnerability (see Fig. 1 .13 in the last section of this chapter). Disasters can be man-made or natural and include wildland fires, earthquakes, volcanic eruptions, landslides/debris flows, floods, extreme weather, tropical cyclones, sea and lake ice, coastal hazards including tsunamis, pollution events, and so on. During the period 1990-1999, disasters killed 500,000 people and caused 750 billion dollars of damage.

Throughout history, the relation between science and society has been marked by both continuity and change. 46 The continuity is situated in the tension between the C H A P T E R 1 philosophical and intellectual pursuit of and search for knowledge on the one hand, and the desire of researchers and their supporters to make scientific knowledge useful and apply it on the other hand. This tension was first recognised by the ancient Greek philosophers, and has been reflected in recurring calls from philosophers and scientists throughout history, including today, for more "research for its own sake". Within the context of this tension, the change has been located in what has constituted or better what has been considered useful knowledge in each age, in other words in "the changing social expectation of science": "What counts as useful knowledge differed from patron to patron and society to society, so that Cosimo de Medici and the United States Department of Energy looked for quite different 'products' to be created by their clients, but both traded support for the potential of utility". From century to century, societal expectations of S&T have not just changed. They have also increased. In the era of the ancient Greek philosophers, societal expectations of S&T were rather low. S&T was a highly controlled activity carried out by a small elite group of people for philosophical or religious objectives. At present, however, it is considered a powerful tool for political, economic, and social change. In between, S&T helped exploit worldwide resources as trade empires and colonies expanded (18th century); helped expanding and consolidating trade empires and colonies, and turn their natural resources into wealth, or make up for the lack of trade empires and colonies (19th century); helped fight wars (First World War and Second World War); and helped producing consumer goods, consumer medicines, exploring space, addressing environmental challenges, exploring the human genome, and so on (post-war period). It is no exaggeration to say that as a result today societal expectations of S&T have never been higher in industrial countries. In the United States, the Carnegie Commission on Science, Technology, and Government listed in 1992 no less than 25 major societal goals to which S&T can contribute (Table 1. 3). And a National Academies report noted in 2005 that "the nation increasingly looks to the scientific and engineering communities for solutions to some of its most intractable problems, from chronic disease to missile defence, to transportation woes, to energy security, to ensuring clean air and clean water. Expectations for S&T are perhaps higher than at any other time in our history and are placing unprecedented demands on leadership". 47 needs of society as they change over time, or in other words, to become a 'science and technology for society' ". 48 Things are no different in Europe. In 2000, the European Commission remarked that "expectations of science and technology are getting higher and higher, and there are few problems facing European society where science and technology are not called upon, one way or another, to provide solutions". 49 out of the challenges Europe is facing, and recommendations have been made on how to address them. Time and again the same wide range of urgently to be addressed challenges is identified. The reports are also near-unanimous in the key role assigned to S&T in this respect, as will be seen in Chapter 3. In other words, great expectations are held of S&T as regards the tackling of the multitude of challenges Europe is facing. This will be developed in Chapter 3 as part of the new policy context that enabled the genesis of the Lisbon Strategy as well as of the 7th Framework Programme.

The role that S&T can play in addressing all these challenges is expected to be substantial. This section will show that S&T indeed has the potential to contribute to a range of economic, social and environmental challenges: it can improve economic performance, promote employment, improve public health, tackle demographic, cohesion and environmental challenges, and so on.

Modern mainstream economic theory -whether neoclassical, endogenous or evolutionary -has recognised for quite some time now that technological progress and innovation are the main engines of economic growth. According to Baumol, innovation explains much of the extraordinary economic growth record under capitalism. The reason is that in important parts of the economy, competition is based on innovation rather than price. Firms are therefore forced by market pressure to support innovative activity systematically and substantially. 50 According to Romer, productivity growth is driven by innovation resulting in the creation of new though not necessarily improved product varieties. 51 And under the Schumpeterian paradigm, growth results from "quality improving innovations that render old products obsolete, and hence involves the force that Schumpeter called 'creative destruction' ". 52 Even basic research generates several direct economic benefits. It is a source of useful new information; it creates new instrumentation and methodologies. Those engaged in basic research develop skills which yield economic benefits when individuals move from basic research carrying codified and tacit knowledge. Through participation in basic research, access is granted to networks of experts and information. Those There is also empirical support for the contribution of S&T to economic performance (see tables and sources in annex). Estimates of private returns to firms' own investment in R&D still produce varying figures, but there is an emerging consensus that gross returns between 20 and 30 per cent are common and plausible (Table 1.4) . Microeconomic studies confirm the existence of significant spillovers of knowledge from the firms that perform the R&D to other firms and industries. Taking account of measured spillovers typically raises the estimated gross rate of return on business investment into the range of 30 to 40 per cent (Tables 1.5-1.7) . Macroeconomic studies, which by definition cover all sectors of the economy, also find significantly higher returns to R&D in OECD countries, with estimates ranging from 50 per cent to over 100 per cent. A recent Austrian report found that the rise of corporate spending on R&D from 0.8 per cent to 1.1 per cent of Gross Domestic Product in the second half of the 1990s produced a boost of three tenths of a per cent in growth. 54 Both microeconomic and macroeconomic studies find that an important source of productivity growth in all OECD countries comes from the international diffusion of technology. A country's ability to absorb those foreign technologies is enhanced by investment in education and by investment in own R&D.

The economic literature is not conclusive on the employment effects of innovation, since process innovation (the introduction of labour-saving technologies) is likely to have a negative effect on employment, assuming all other factors remain constant, while product innovation creates new markets and employment opportunities. 55 But empirical evidence suggests that technological change promotes employment. Such evidence includes a recent study of the Directorate-General Employment which found that the rate of growth of total factor productivity (due to improvements in the efficiency of production or to pure technological progress) has a positive impact on the employment rate, with a one-year lag, and that both in the short-and long-term, countries with higher than average total factor productivity growth tend also to have higher than average growth in employment. 56 Clear evidence exists that more computerised or R&D-intensive industries increased their demand for college-educated workers at a faster rate in the 1980s. Such high-skilled workers also command higher wages, as the consensus is that the increase in the schooling wage premium and the rise in wage inequality are driven by technological change. 57 Support also comes from the observation that all Member States saw employment levels in the high technology sector rise between 1997 and 2002, leading to an increase of almost 2 million for the Union as a whole, with employment in high-tech services accounting for 1.4 million of this total (Fig. 1.12) . 58 

Through its contribution to product, process and service innovation, productivity growth, and the creation of more and higher paid jobs, research and innovation can also help meet the challenges of ageing and cohesion. Higher employment rates and levels of productivity -to which S&T can contribute -would allow for maintaining or increasing living standards, and for the absorption of increasing medical and pension costs. Doubling the growth of productivity over the next few decades would allow for maintaining current levels of industrial production and average per capita income with some 40 million elderly in the EU. 59 The best solution to poverty is investing in education. 60 For instance, in general the lower the illiteracy rate, the higher per capita income. 61 Higher levels of educational attainment enhance the chance of finding work and enjoying a decent standard of living. However, education is not yet accessible for everyone and often only to those who can afford it. Improving access to educations takes time and effort. Education is, therefore, in its own right not powerful enough to solve the poverty problem.

In the meantime, contributions to a solution to poverty can also be expected from Science and Technology. Besides investing in education and developing skills, this means dedicating research programmes to find ways to fight inner-city poverty, to relieve the effects of urbanisation, to diminish the impacts of ever increasing mobility on our environment, and to improve the quality of life of the vulnerable groups in society, such as the handicapped and the ill, the elderly and the young. In developing countries this can take the form of helping to improve the productivity of natural and physical assets, for example, by protecting farmland against erosion and desertification, preserving an area's natural resources, building easy-tomaintain water storage facilities and de-salinisation installations, and strengthening farmers' diagnostic capabilities in relation to livestock diseases, to name a few. 62 That these advances have important impacts on farmers' income levels has been repeatedly demonstrated by the different targeted activities across the Framework Programmes. 63

Science and Technology can also make a large contribution to the improvement of public health. It can assist in prevention (e.g. through the development of vaccinations), it can play an important role in the quicker and more reliable diagnosis of diseases (e.g. through the further development of medical imaging), and it can find treatments for diseases or, in the absence of treatments, it can help finding ways to control them (e.g. HIV/AIDS retroviral drugs). S&T can also help to lessen the impact of disease. Furthermore, S&T can help to find new ways to deliver treatment (e.g. ambulant rather than hospital treatment) and can provide better tools for health care system management. A good illustration of the way in which Science and Technology can make a positive contribution to public health is the Article 169 EDCTP 64 initiative referred to in Chapter 4.

It is also useful to take a step back here. Globalisation in this regards also means the globalisation of infection transmission. As travel of people (and goods) intensifies, communicable diseases constitute challenges which it is increasingly difficult to confine. Interconnectedness is a defining feature of our modernity. As a case in point, healthcare systems are indeed organised as systems -which can lead to catastrophic failures such as the consequences of HIV-infected blood supplies that took a particular prominence in France but did in fact strike many countries. Ours is a vulnerable society. While that vulnerability is most strikingly epitomized by Ebola-type viruses, with diverse profiles of outbreaks, it is also revealed through 62 World Bank, World Development Report 2000/2001. 63 The International S&T cooperation with third countries (INCO) is one of those programmes which have been developed around the idea that poverty can be overcome by successfully developing human and institutional resources. 64 European and Developing Countries Clinical Trials Partnership. the rise of nosocomial infections (i.e. ills originating in the very places which are devised to heal). These further illustrate the flipside -or paradoxical unanticipated consequences -of healthcare as interconnected systems. Yet, while avian flu and SARS together with the above examples represent the globalisation of infection transmission, they also point to the globalisation of the means to tackle public health challenges. The relative containment of avian flu and SARS, and even more so the eradication of smallpox (the variola virus), constitute inspirational successes in that regard.

There is no doubt that the solution to the environmental challenge has to come first and foremost from elsewhere than from new technological development. Available technological best practices should first of all be disseminated as widely as possible. A change of mentality is also required leading to less consumption of more carefully selected resources and increased reuse and recycling within the limits of the current technological frontier.

Yet it does not seem unjustified to expect a contribution from new technological development. Technology is already used in a variety of ways when it comes to the environment, and everywhere there is great scope for improvement. Technology in the form of satellites is used to monitor the global environmental situation and change therein. Technology in the form of super computers is used to develop climate models and make predictions. Technological development has made industrial production less resource intensive. It has also reduced the energy consumption of machinery (e.g. cars). S&T has been successful at developing alternatives for harmful substances (e.g. within the context of fighting ozone depletion). Technological development has increased the extent to which a larger variety of goods can be recycled. The production of green energy is wholly dependent on technological development. And S&T is needed to mitigate the impacts of environmental degradation. This need for a joint undertaking -combining existing technologies, technological innovations, as well as political innovations -is illustrated in Fig. 1 .13 in the case of climate change (the fight to curb greenhouse gas emissions, that is).

As the next chapter will further examine, S&T is not only an indispensable source for the evidence base on challenges such as environmental degradation, they are also taken to be one of the causes of such predicaments. One can undoubtedly point to the lack of societal controls on the use of S&T, to environmentally harmful production and consumption patterns, and to other types of failures in this regard. Nonetheless, the outlook can change fundamentally if one can conceive of S&T as part of the solution rather than the problem.

The "precautionary principle" is a useful notion to mark that double perspective. It can first be taken as stifling innovation in the name of environmental protection; but more interestingly, it can be understood as promoting innovations that take account of social and environmental difficulties, taking account of risks as well as benefits, taking account of less tractable, longer-term consequences. Its emphasiseven with its origin in German environmental legislation in the 1970s -was as much on environmental protection as on gaining a competitive advantage through innovations on the backdrop of environmental regulation. Indeed, although this remains a fiercely debated question, a recent survey of the literature 65 indicates that a transparent and non-discriminatory regulatory framework, coupled with high environmental standards, is an engine for innovation and business opportunities. This engine functions notably through the creation of lead markets. 66 The story of the catalytic converters provides a compelling example of such R&D-based win-win.

A first step in that perspective consists in acknowledging the need to sever the link between economic growth and environmental degradation. The endeavour of a duly responsible polity -with a concern for the quality of life of present and future generations -is then to optimise the effects of its economic activity, that is to minimise adverse externalities without sacrificing part of its material well-being or endangering economic growth. 65 A second step consists not in ignoring the above "limits to growth" understanding, but in researching other links between development and sustainability. This move is at the heart of the role of S&T in relation to the environment -and is indeed at the heart of the Lisbon Strategy as underscored in the Conclusions of the 2001 Göteborg Summit. The potential of technology to create synergies between environmental protection and economic growth was emphasised by the October 2003 European Council. That well-established premise is taken to its most fruitful operational conclusions in the Environmental Technologies Action Plan. 67 More recently, the benefits of S&T for the economy and environment alike were further examined in the "Towards a more sustainable EU" report for the Dutch Presidency and indeed in the Kok report of November 2004. 68 In fact Europe occupies a strong position in the field of environmental technologies. Of course this also relates to the fragile but powerful synergies, introduced above, between environmental promotion/protection, S&T, and growth and competitiveness.

These potential benefits can also be of great importance for developing countries. With appropriate technology transfer they can provide these countries with affordable solutions for reconciling their desire for strong economic growth with the need to do so without increasing the pressure on the local -or the globalenvironment. This North-South dimension highlights the sustainable development predicament as differentiated yet common. The question of sustainable development can be posed along two main lines: a question of adapting -or otherwise innovating -appropriate "clean" technologies, and a question of redefining needs and lifestyles. Now it is interesting to re-consider the climate change issue in the light of the above remarks. The European Union has taken a leading role in the international process to tackle global warming so as to promote environmentally responsible choices by all actors. The EU has ratified the Kyoto Protocol early on, joined by almost all of its international counterparts on this course -most recently Russia. Its successes are also the planet's successes. The EU is committed to meet its Kyoto emissions reduction targets 69 and continues to show leadership on this issue. The role of S&T is set to become even more central in the post-Kyoto (post-2012) regime, for which negotiations are starting now. The need for new and cleaner technologies as an indispensable means to tackle energy demands and CO 2 emissions was the main message of the latest yearly report of the More widely, S&T plays an important part in the EU's capacity to shape -and implement -international agreements.

By way of conclusion, it is worthy of note that the answers which science and technology can bring to environmental problems are increasingly judged with reference to the changes they bring in society. They demand choices of policies and governance, the impact of which on economic and social groups must be measured in terms of effectiveness and efficiency, the spread of costs and benefits, and social or regional equity. This is only possible if research also seeks to develop the knowledge-base and methodologies needed by such analyses.

The ultimate answer? The ultimate challenge?

As the previous discussion of the contribution of S&T to employment or environmental challenges has shown, it is not always clear-cut where problems start and where solutions end. Or to put these tangled matters even more simply in this case: the role that S&T can play is manifold. And nowhere is this manifoldness better encapsulated than in the predicament of the "Knowledge Society". 71 Here the challenges, the expectations, and indeed the role of S&T in eliciting and addressing them, are brought together in ways that it is most illuminating to examine. First, this section probes the mutual shaping of science and culture. Second, it foregrounds some collateral features of the knowledge society, and in particular the vulnerability that accompanies its emergence. This will lead up, in Chapter 2, to a discussion of our modernity -or modernities -as characterised by a distribution of goods but also of ills or risks, and of knowledge or claims thereon. Indeed, in this subsequent chapter, the problematic and ambivalent relations between S&T and the public at large will be considered in the perspective of the weaknesses of European S&T. But firstly we must examine the crucial place of S&T within our Knowledge Society in the making.

The mutual shaping of culture and S&T The examples in this chapter have already shown how profoundly our culture is marked by S&T developments. At the same time as S&T shapes our society, they are themselves produced, taken up, reconfigured, shaped by society. That is one (double) way in which culture is decidedly scientific culture, and thus in which S&T is at the heart of this nearly eponymic "Knowledge Society". But to allow all sections of society to benefit from those advances -as well as to take part in that shaping process -individuals need to be provided with the appropriate equipment, in terms of education, skills, awareness, and appreciation for the stakes in S&T endeavours. Vital for a democratic society 71 in this day and age, such demands point towards another crucial sense for scientific culture, also exposing the acute need for it to be developed. Actions to foster a thorough public grasp of what is science and how it contributes to society are thus sine qua non to a full-fledged democratic society.

Importantly, S&T developments accompany and affect lifestyle changes in societies. In this respect the taking up of mobile phones or GSM provides interesting illustrations. 72 The GSM has strikingly changed the way people communicate with their loved ones, organize their work and outings, and live everyday. As regards research, innovation, and competitiveness, the rise of the GSM standard provides an inspiring example of European leadership. 73 In effect, new information and communication technologies open up opportunities for new lifestyles and new ways of working. 74 Remote working or online trading decouples economic activity from a particular geographic location (be it the office, capital cities or structurally favoured regions). Moreover, such technologies can facilitate access to employment -and other forms of social inclusion/participation 75 -among sections of society (people with physical disabilities, the elderly) who may otherwise be excluded. Key to achieving those benefits is ensuring that people are equipped with the necessary skills to get involved. Much information society literature 76 also hypothesises that "eWork" (remote working) may contribute to environmental sustainability as, in addition to other dematerialisations, travelling to work is reduced. On the other hand, transport technologies themselves -from the wheel through to the airplanecontinue to have a central role in society, for example in enabling communication.

The quality of human life is made up of many more components than the ones already mentioned: greater access to knowledge, better nutrition and health services, more secure livelihoods, clean air to breathe, security against crime and physical violence, satisfying leisure hours, political and cultural freedoms and sense of participation in community activities. S&T can contribute to improvements and bring lasting solutions in each of these areas. For example, investment in research and new technologies to achieve sustainable transport solutions generates desirable impacts on the quality of life worldwide: less energy consumption; fewer air pollution; less respiratory diseases; lower noise levels; increased space and security for pedestrians and cyclists resulting in more friendly cities for children and older people; less congestion; fewer road accidents; and so on. Besides, it is S&T which makes possible the novel lifestyles -and indeed the novel societydiscussed above.

It may be that, in solving some age-old problems, S&T has created the possibility for new problems to emerge. Yet even to address these new problems we can hardly do without S&T. But we can -and rightfully do -concern ourselves with the consequences of the solutions we devise.

The vulnerable society and the knowledge society S&T has brought a mix of benefits and risks. In the modern world heightened wellbeing and security are accompanied by increased vulnerability and insecurity. This vulnerability can take many forms, from loneliness or travelling accidents to industrial disasters or the twisting of human rights in a totalitarian state. Fig. 1 .14 provides an illustration of the rising challenge represented by disasters. Here "disasters" include both technological and natural events. 77 The dramatic increase shown on the graph may be due not only to the consequences of concentrated urbanisation, climate change, and so on, but also to a heightened sense of vulnerability and risk, together with a better ability to measure disasters.

Hence the emerging knowledge society will have its problems too. Besides, it will not depend solely on S&T but also on governance and on the citizens who will make up our society -and shape it. Yet it is characterized by an increasingly pivotal role for S&T. The knowledge society requires a revolution in our understanding of knowledge: not only with regard to S&T researchers, but also concerning a democratisation or broadening of knowledge production. 78 This has profound implications for decision-making, for the lay-expert divide, for the handling of risks and uncertainties, and indeed for the relations between citizens and institutions of governance, as every individual should be recognized as -and given the means to be -a person of knowledge. Europe finds itself in a peculiar situation in this regard, and the following chapter will unpack the paradoxical relations between S&T and its citizen.

This chapter has explored in greater detail some important economic, social and environmental challenges Europe is facing, the expectations held of S&T in addressing these challenges, and the role that S&T could potentially play. The 7th Framework Programme was designed against the background of Europeans feeling anxious because the continent is experiencing a number of important economic, social and environmental challenges -or indeed against the background of a Europe turning from a positive into a negative "exception" at global level. Economic growth is slow. Europe's competitive position is feeble. There are not enough jobs, and not enough of them are high-level. Europe is still characterised by significant poverty and regional inequality. An important demographic challenge is emerging. Europeans' health is affected by serious lifestyle and contagious diseases. And the environment is being degraded.

As will be further examined at the end of Chapter 2 and in Chapter 3, expectations of S&T have never been higher than they are now. Such expectations held of S&T are partially justified. S&T can indeed play an important role in addressing societal economic, social and environmental challenges. S&T is the engine of economic growth and competitiveness. The employment effects of S&T are positive. S&T can play a major role in addressing the consequences of ageing, and the cohesion and public health challenges. S&T can play a key role in addressing environmental challenges. S&T is part and parcel of our lives, be they framed in a Knowledge Society or otherwise, and they are the linchpin of the latter's emergence.

However, as will be seen in the next chapter, for S&T to be able to realise its potential, some serious S&T weaknesses will have to be addressed. 

United Nations Research Institute for Social Development, Information and Communication Technologies and Social Development in Senegal: an Overview/Les technologies de l'information et de la communication

Groupe Spécial Mobile" hosted by the European Conference of Postal and Telecommunications Administrations, and its specifications where defined by the European Telecommunications Standards Institute in the late 1980s. Commercial operation began -and the world's first GSM phone call was made

European Foundation for the Improvement of Living and Working Conditions & PREST

European Commission, DG JRC -Institute for Prospective Technological Studies

Impact of ICT on Sustainable Development