ft business and creativity

7/23/2019 FT Business and Creativity

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FTCreativity

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CREATIVITY & BUSINESS

CONTENTS

F T . C O M / C R E AT I V I T Y | 3

I N T R OD U CT I ON

Having the time andresources to explore ideas

N E I G H B OU R H OOD S

Cities thrive only if they

allow creative people toregenerate decaying areas

GOVERNMENTSInnovation demandsmore than tax breaks and

education schemes

CE N T R A L &

E A S T E R N E U R OP E

Start-ups are finding helpfrom new initiatives

EDUCATION

Countries that excel atproblem-solving encouragecritical thinking

M A S S P R OD UCT I ON

How can the EU cash-

in on its innovations?

5

6

10

12

16

20

Special reports editorMichael Skapinker

Head of editorial contentHugo Greenhalgh

Editor

Rohit JaggiProductioneditor

George Kyriakos

Picture editorMichael Crabtree

Art consultantSheila Jack

Sub-editorsAdrian Justins

Liz DurnoGlobal sales director

Dominic Good

Content activationdirectorAlexis Jarman

Content activationmanager

Mike DuffyProjectmanager

Nathalie Ravier

AdvertisingChris Walker

Advertising production

Daniel Lesar

CONTRIBUTORS

PETER ASPDEN is the

FTs arts writerTONY BARBER is

the FTs Europe editor

ANDREW BYRNE is aBrussels-based freelance writer

SHARMILA DEVI is an

FT contributorMATTHEW GARRAHAN is the

FTs global media editor

EDWIN HEATHCOTE is theFTs design and architecture critic

PETER MARSH is the FTsformer manufacturing editor

ROBERT ORRis the foreign desk editor

TANYA POWLEY is the FTs

manufacturing correspondentJEEVAN VASAGAR is theFTs Berlin correspondent

38

CLUSTERS

Innovation and excellenceis developing across Europe

B E S P OK E

Manufacturing power is

down but niche companiescan buck the trend

M U S I CHow Spotify is helping torevive the fortunes of the

global music industry

D E S I G N E R S

Its heritage is renownedbut the design industrymust adapt to thrive

ARTS

Business can take up theslack in arts funding

COLUMNSchools, businesses andpoliticians must encourage

creative pursuits

26

32

36

38

42

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PHOTO:BLOOMBERG

Follow us on Twitter@FTReports

All editorial content in thisreport is produced by the FT. Our

advertisers have no influence or

prior sight of the content.

Visitwww..com/creativity for

additional in-depthanalysis


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introduction

michael

skapinker

f t . c o m / c r e at i v i t y | 5

O

ne of the drawbacksof an otherwisefulfilling career

with a businessand financial news

organisation is the paucity ofstories one has with which to

impress schoolchildren. On theFinancial Times, we do not oftenget to interview Beyonc, Justin

Bieber or Zac Efron.When I speak at schools,

I know that students will not

be much taken with the chiefexecutives and finance directors

I could mention. I usually tellthem that I have interviewedSir Richard Branson, whichelicits mild interest, and Lord

Alan Sugar, once a computerentrepreneur but now known for

The Apprenticetelevision series.

In future talks I shouldmention Arthur Fry, though.Students may not have heard of

him, but they will know whathe invented. I interviewedFry nearly three decades ago

at the St Paul, Minnesota,headquarters of 3M, one ofthe worlds most innovative

companies. Fry had beenpuzzling about what 3M could

their time researching their ownprojects.

Every company, every country

has its own culture. In Israel, thecountry with the second highestlevel of innovation after the US

as measured by the value ofits start-ups state institutionsplay a central role. Many tech

entrepreneurs develop skills and

pick up contacts in Israeli armyintelligences Unit 8200. Thestate also plays a role in lending

money to promising, but risky,new ventures.

Other countries have had

less success. Many of the UKgovernments attempts in thepre-Thatcher years to support

technology winners were disasters,a notable exception being Rolls-Royce, the aircraft engine maker.

There is no one remedy thatevery company or country canapply. But there are two general

principles. The HBR post on 3Msaid the company spent timeidentifying customers pain

points. These are problemsthe customers have thingsthat could be done better. But

customers do not always knowwhat they need. It was onlywhen 3M sent out packs of

Post-it notes that customersrealised they wanted them. Thesecond key point is allowing

staff, particularly those thatdeal directly with customers, todevelop their products.

Many modern companiesdistance themselves from theircustomers, through outsourced

call centres and websites withno contact telephone numbersother than those call centres.

And many companies appearreluctant to allow employees tothink and act for themselves.

Overcoming both those

obstacles is todays business andcreativity challenge.n

Michael Skapinker is the editor ofFT Special Reports

do with a weak adhesive a

colleague had devised. Few couldsee the point of a glue that, whileit kept its stickiness, did not

really stick. Singing in his churchchoir, frustrated at how thepaper bookmarks in his hymn

book kept fluttering to the floor,Fry suddenly saw what he coulddo with that weak adhesive and the Post-it note was born.

Fry, I observed, could make afortune talking about the Post-it.He seemed unimpressed. He had

a yellow car with a personalised

Post-it number plate, and thatappeared to be it.

His attitude was typical of3M. The company, which makeseverything from dental implants

to carpark software, is quiet andunderstated. Many who use itsproducts have probably never

heard of 3M. But it is inventive.How does 3M do it? As Vijay

Govindarajan of Dartmouth

Colleges Tuck School ofBusiness and Srikanth Srinivasof healthcare consultancy

Medecision explained in aHarvard Business Review blogpost last year, 3M employees are

allowed to spend 15 per cent of

Nota Bene

Business innovationoccasionallyarisesoutof sheer inspiration

but all creatives need the timeand

resources toexplore ideas

PHOTO:GETT

y


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Gravity:Londons

bohemiancentre

hasshiedto

theEast End

whereworks like

LeonardoErlichs

DalstonHouse

canbefound

aplenty

In on thegroundcities thrive onlyif theyallowreative

people to regeneratedeayingareas,

says EdwinHeathcote


7/48f t .c o m / c r e at i v i t y | 7

The idea that thecreative quarter

is the key to theregeneration of anycity has become so

entrenched that it has becomealmost a clich. The orthodoxyis that it is the cultural pioneers

who are best able to turn arounddecaying districts and transform

them from neglected andeconomically stagnant sites intothriving, hipsterish hotspots.Richard Floridas 2002 book

The Rise of the Creative Classbecame the cornerstone of thisnotion and one that was adopted

by planners, sociologists andpoliticians as a kind of defaultposition. Creative quarters,

whats not to like?But, perhaps, now it is time

to reassess the results of this

almost obsessive drive to attractcreatives, to better understandhow this process has worked,and whether it is always positive.

London, with itsalmost maniacal churn, acity irredeemably in thrall to

property prices and with realestate as investment ratherthan home, is the ideal place

to start. The citys bohemiancentre has been shifting aroundfor centuries, from Chelsea

to Bloomsbury, from Sohoto Shoreditch and now on toHackney and Dalston.

Each of these areas became

artistic, literary and designcentres and each was, in turn,gentrified as the creative classes

made once unattractive areasedgy and seductive, a processthat attracted younger, affluent

middle classes who wanted to beassociated with hipness.

While this kind of

regeneration can seem anunalloyed good thing to cityboosters and economists, it has

its downsides. The speed andintensity of change in Londons

property market has, in recentyears, highlighted thoseproblems. Creative quarters

need time to grow. They needto build an infrastructure of thedifferent trades, venues, office

and workshop spaces and, mostimportantly, people, who arethen able to embed themselves

into the fabric of the city,

establishing the kind of networkthat builds into a specific urban

character something strongenough to attract others.

There are no fixed rules

for the kinds of infrastructureneeded to foster a creativecommunity but there are some

features that have consistentlyhelped. Among these is aparticular and fine balancebetween cost and centrality.

All the areas above, along withClerkenwell, Stoke Newington,Peckham, Bethnal Green,

Bermondsey and others wereblessed with proximity to thecity centre and an abundance

of cheap space. That kind ofloose-fit space, whether it wasonce industrial or warehouse,

dockside or commercial, doesnot dictate how it should beused. A factory or a printing

works, an office block or awarehouse can accommodate bigstudios or small incubator offices

alongside apartments and cafes.Also the grain of historic fabric,even if it only 50 years old, adds

an air of authenticity that alwaysseems lacking in the new.

But there should not be

too much heritage. Where thearchitecture is over-protected,rapid change is difficult. Where

its use is too prescribed or zoned,again, change and adaptationare stymied. It is precisely in the

blend and the flexibility of thatparticular cocktail of typology,age, disuse and adaptability to

changing trends that a quarterscreative resilience can lie.

Londons booming propertyPHoTo:REuT

ERS


8/48

market, hwever, ensres thateven the cheapest areas are

n lnger trly cheap and thekinds f spaces that were nceattractive nly t artists and

designers lfts and cnvertedindstrial spaces have becmeamng the mst desirable

residential spaces, t the extentthat develpers nw bild new

dmestic bildings t resembleindstrial interirs. Lndnslfts are nw, as they are in NewYrk where the trend kicked ff,

t f bnds t creatives.Yet their sccessrs are

nt being bilt. There is,

nderstandably, n lsenessin new develpment. usesare rthlessly prescribed ascmmercial, residential, retail

r cltral thats it. And theretail streets, nce the citys richincbatr f everything frm

wrkshps t markets, are beingbilt nly t attract the bigchains. There are n adaptable

spaces, nne f the big-scaleindstrial-type infrastrctrethat has prved s endring.

Develpers and architectsshld bild mre annymsly,creating bxes with less defined

ses. It is, f crse, difficlt tcnvince a bank f the vale inthis as-yet-ndefined ftre.

Regeneratin in Britain is

almst always cnceived interms f shps and shpping and

apartments with balcnies. It isextremely tw dimensinal.

Is anywhere in Erpe ding

it better?PHoToS:CoRBIS;G

ETTY;REuTERS

8 | f t . c o m / c r e at i v i t y

Occupation:

(belowle)

designers take

over a former

Philips factory

in Eindhoven

and (below

right)a design

showcase in

Milans Ventura

Lambrate

neighbourhoods

miLan, anther expensivemetrplis, has dne it well. The

city might be knwn fr fashinbt design ccpies an eqallyprminent rle, ntably with the

Salne de Mbile, the wrldsbiggest design fair, by far. Thefair is n the nremarkable Fiera

site bt the real actin ges n inevents dtted arnd the city.

First it spread t the ZnaTrtna, the residential andindstrial area arnd theVia Trtna, and then n t

Ventra Lambrate, a grittyindstrial district n the citysedge. In bth areas the design

events have seeded wrkshps,cafes, stdis and new cltralbildings, ften accmmdatedin frmer indstrial strctres

exactly the kind f framewrkneeded fr a creative district.It can manage the difficlt bt

critical shift frm high fashint artsy bhemianism within asingle blck.

barceLona is ften heldp as the mst visinary cityand it is difficlt t disagree.It is als instrctive t see the

parallels with Lndn. Bth arebig prt cities with rich histriccentres, bth are csmplitan

and trist centres and bthare pst-olympic cities. uK

pliticians have enthsiasticallypicked p n old StreetsSilicn Rndabt (a placeas nattractive as its name

sggests) bt Barcelna was inthe frefrnt f develping a

digital and innvatin districtwith its 22@, in the frmerindstrial district f Pblen.

The sccess f this hge chnkf creative city (eqivalent t115 histric city blcks) has been

dwn t visinary pliticians(ntably frmer mayr JanCls, nw head f uN Habitat),

sphisticated rban planning and

a clever se f zning. This mixesresidential with cmmercial,

and histric indstrial with finecntemprary architectre, sthat the blend in types f space

is maintained and the kind fgentrificatin that is s apparentand seemingly nstppable

in Lndn has been halted rdecelerated.

It shld nt be frgtten

that the citys infrastrctre isalmst impeccable: a fantasticmetr system ensres ne is

never mre than a few mintesaway frm a beach r a majrstatin. It is a cnnected city in

every way.

berLin had an experiencethat was different again. As

Germany renited, its newcapital fnd itself with a glt fempty cmmercial space as stateand mnicipal breacracies

that had nce been dplicatedwere ratinalised. In part,

the freeing p f the massiveaccmmdatin f the Stasi,East Germanys verbearingsecret plice, irnically created

the space that nw hses thecitys creatives. East Berlins


9/48

In style: enjoyingapintina

Budapestruin

pub (above),

Barcelonas

Poblenou

regeneration,

(belowle)

Berlins former

Templehof

airport isusedfor

adesignfestival

(belowright)

nw-defnct indstry, prppedp by sales t ther cmmnist

blc ecnmies, als left itslegacy f geners space.

A relative lack f speclatin

in the prperty markets helpsBerlin sstain its creativity.Hsing is mstly wned

by pensin fnds and bigrganisatins that are keen t

secre lng-term, hassle-freeretrns s rent is cheap andthe yng are able t stay incity centre accmmdatin as

lng as they like althghrental and prchase prices haveaccelerated recently.

After the fall f the Wall itwas Mitte and Krezberg thattk n the creative mantle,fllwed mre recently by

ne-time wrkers districtFriedrichshain. Yet even Berlinsclest districts are nt immne

t gentrificatin thgh here ittends t be bigger bars pshingt smaller nes and sqatters

being frced t f blcks thatn ne previsly cared abt.

budapest presents

anther versin f the pst-cmmnist creative city. Whilehardly a glbal capital f cl,this beatifl city is experiencing

a srprising trnrnd.Like Berlin, Bdapest was left

with abndant space after thefall f the ld regime bt space

was never that cheap. Bdapestscntribtin t the creative city

phenmenn is the rin pb,where yng entreprenerstake n crmbling, sally

fin-de-siecle bildings andtransfrm them int cmplexlabyrinths f bars, clbs, private

cinemas, restarants, shps andexhibitin spaces.

These prjects are semi-frmalised s that bildingwners are paid a small rent asthe yng tenants maintain and

imprve them.The ad-hc aesthetic is even

being reprdced in newer

bildings, t cris effect. Aseries f crtyards knwn asGzsd udvar (the heart f theJewish ghett dring the Nazi

era) is nw a teeming nightsptwhich, dring the day, is filledwith stdis and hipsters n

laptps lnging at caf tables.The transfrmatin f a ncern-dwn district f elderly

residents has been extrardinary.

paris shld be like Lndn,bt smehw is nt. Althghit has its fashinable districts,

the increasingly plarisedexclsin f the pr beyndthe Blevard Priphriqe

makes the city strggle. oncethe capital f bhemianism, it

is stymied byrigid rules andburgening prperty prices.The area arund the Gare du

Nrd, always rather seedy,prvides ne f the few citycentre spts fr creatives.

eindhoven illustratesa radical creative future. once

dminated by Philips hugefactries, it fund itself witha glut f empty industrial

prperty that prved a bn tdesigners and makers.

Spurred by the success f

its radical Design Academy,the likes f Piet Hein Eek have

bught swaths f industrialspace t rent t start-ups whcan design and manufacturetheir wares, making fr a

far richer and mre diversecreative ecnmy. It is stillsmall but truly engaging.

These different narratives shwthere is n single rule, nr even

a set f rules, that guaranteesthe seeding r the survival f acreative city. Yet, irnically, ne

f the critical factrs may wellbe failure. Creative ecnmiesdepend n slack and the kind

f redundant space that isthe result f ecnmic crisis,plitical upheaval, the cllapsef industry r sme ther

massive change.In a way this des nt

bde as well fr Lndn r,

say, Paris, as it might frNewcastle, Lille r Eindhven.The ptential fr revival is

there, in the infrastructure,

but peple need therreasns t cme. And at the

mment, it is Lndn, Parisand Barcelna that havethe cultural riches t attract

peple in the first place. n


10/48

GOVERNMENTS

1 0 | F T . C O M / C R E AT I V I T Y

WhenSir JamesDyson took

the bagout of thevacuum

cleaner in 1983, hewasdismissedas an oddballwith dangerous ideas.

Manufacturers anddistributors sawhis

designs as a threatand shuthimout oftheBritish market.Development agencies

turned downhisrequest for a grant to build afactory inWales. The former

theatre designer turnedengineer teeteredon the edge ofbankruptcy.

Today, Dysons companyemploysmore than 2,000 peopleinMalmesbury, Wiltshire, half

of themengineers.Muchof itsproductionnow takes place inAsia but Dyson plans to invest

250min its base, creating3,000 science andengineeringjobs by 2020.

The Dyson story tells us

something troubling aboutgovernment policy towardscreativity andbusiness in

Europe,whichappears at bestinactive, at worst obstructive.For everyDyson that swept to

market dominance, howmany

other creative entrepreneurshavestumbled for lack of support?

Now that only high-endmanufacturing remains viableinEurope and even that

maychange governmentsneed tofind ways to stokecreative thinking and identify

promising creative enterprisesat the conceptual stage. Policymakers increasingly talk about

Europes creative edge but aregovernments aware ofwhat isneeded to secure the continents

future as the homeofworld-beating innovation and design?

Awareness is definitely

increasing, says SirGeorge

Cox, former chairman of theDesign Council and author of the

influential Review on Creativityin Business commissioned bythe UKs Labourgovernment in

2005. But there is still somuchthatmust be done, he adds.

The report declaredboldly

that greater creativity is a key togreater productivity andcalledon government to champion

creativity, not just in artistic fields,but in every sector of the economy.

I didnt think myreport

was going to transform theworld, says Cox, a formeraeronautical engineer and

entrepreneur, nowa boardmember ofNYSEEuronext, thetransatlantic exchanges operator.

But you hope that you canmovethe thinking andunderstandingforward a bit.

The report called for three

broad actionsby governmentto boost creativity in business:offer incentives for research and

development; broadeneducationto equipstudentswith creativeskills; and raise awarenessof

the valueof creativity throughcentres that showcase creativeenterprise.

But Cox admits that a changeof government and the recession

Wheel of

fortune: Sir

James Dyson,

pictured driving

his favourite

car, the Mini,

overcame a lack

of government

support

meant that the implementationof his recommendations has been

uneven. Hard times force youto rethink how you do things these dayswe cant competeonprice, sowehave toearnour

living fromcreativity.ForEuropean governments,

that means broadening the scope

for tax credits inR&D, enablingcompanies to explore areaswithsomedegree of risk.Almost all

EU governments have adoptedR&D tax credit schemes andresearch suggests that these can

stimulate $3 of investment forevery$1 in subsidy.

But experience acrossEuropehas beenmixed. Germany isresponsible formuch of theincrease in R&D spending in

recent years and the country ishome toVolkswagen the worldleader in research investment

but the German governmentoffers tailoredgrants rather thanR&D tax credits. France and

Spain top the chart for R&Dsubsidy ratesbuthave verydifferent levels of investment.

TheOECDwarns thatR&D tax credit schemes favourestablishedmultinational firms

at the expense of young, domesticstart-ups that pioneer innovative

CreativedriveA surge in innovation is possible but

it demands more than tax breaks and

education schemes, saysAndrewByrne


11/48

PHOTO:RICH

ARD

SAKER/THEGUARDIAN

F T .C O M / C R E AT I V I T Y | 1 1

research.Most start-ups do nothave enough taxable income

to benefit from taxcredits butthey are often the most creativeenterprises andare responsiblefor almost 50per cent of new

employment since 2001.Hungarian software company

Prezi is a prime example of a

youngEuropean start-up thathas grown into a serious globalplayer, offering a product that is

both creative and functional. Thecloud-based tool allowsusers tozoom in and outof presentations

online or offline and now boastsmore than40m users, a figure

that is growing by 55,000a day.Peter Arvai is the co-founder

and chief executive of Prezi andfroma sun-filled room in Silicon

Valley he describes tome overSkype how heand two friends an artist and a computer scientist

turned a creative idea into aninnovative toolwith mass appeal.

It seemed ridiculousat the

timewhenwe sat downin a cafinBudapest in2008 toplan this wewanted to takeonGoogle,

Microsoft and Apple. But Imglad wedid.

Arvais experience illustrates

the struggle of young, creativecompanies trying to attract

government and investor

support. We worked for almosta year on the first version ofPrezi. Thiswas in2008 this

was a timeof recession so peoplewerent investing in start-ups ingeneral, but in particular not in

companies in Hungary.Did the enterprising team

receive support or interest from

theHungarian government? No,we did not, Arvai says.

Theonline company won

investor interest with an earlyprototype, however, andnowemploys nearly 100 engineers

at its headquarters inBudapest

and more than30 staff at itsoperations in SiliconValley.

Arvai is frustrated by the

failure of governments in Europeto create the conditions for start-ups to emerge.

The lack of a sense of urgencyin Europe is probably its biggestproblem.The onlyway we can

address this issue is throughamindset change, not throughtaxcodes or changing company

registration rules.Arvai cites the Estonian

start-up Skype: All of a sudden,

Estonians start believing thatthey could be competitivethroughpure creativity. As long

as they could come upwithaproduct that the worldneeded

andwas improvingpeoples lives,then they could compete in thatglobal economy.

Arvai points to a recent surveyby the Economistmagazine thatnow ranks Estonia as Europes

most entrepreneurial country.Around the same time as the

Prezi teamwas sketching ideasin a Budapest caf, a numberof universities inDublin wererethinking their approach to

educating students. The resultwas University CollegeDublinsInnovationAcademy, which

trains high-flying researchers increative skills and thenconnectsthemwith start-ups.

Theacademy was part-

financed by grants from theEuropean Commissionand theIrish government, and its staff

praise it as a model of educationpolicy that promotes creativitywith commercial applications.

Im not sure if governmentsare best placed todriveinnovation and creativity, says

DanHayden, an innovationspecialist at the academy. Butinstitutes like ours can be a real

driving force andgovernmentsupport for that is crucial.

EvenGeorge Cox admits

that the challenge of arming

European businesseswithcreative and innovative thinking

demandsmore than taxbreaksand education schemes.

He is convinced that the

potential for a creative surge ispresent in Europe if governmentscould adopt the solutions in

promoting research, seekingout andchampioning youngenterprises and reshaping

education.But the risksofinaction are great, and Arvai isforceful on the point: This is

by far themost important thingfacing European society in thenextfive to 10 years. And wehave

a lot of catchingup todo.


12/481 2 | f t .c o m / c r e at i v i t y

Ona cusp: Ivanka

Milenkovic

researchedand

implemented

higher levelsof

eciencyin food

production


13/48f t . c o m / c r e at i v i t y | 1 3

Opportunitymushrooms

Since the downturn, funding to central

and eastern Europe has been in shortsupply. But start-ups are nding help

from new initiatives. ByTonyBarber

Photograph byMatt Lutton

At Serbias Zvezdarascience and

technology park, a21-hectare concreteand glass complex

on the outskirts of Belgrade,Ivanka Milenkovic holds up aplate of succulent-looking oyster

mushrooms. Serbia has to playto its strengths. Agriculture is

one of them, she says, beforerevealing that her company hasgrown the mushrooms entirelyfrom recycled cellulose waste

materials.Milenkovic, a microbiologist

by training, is general manager

of Ekofungi, one of morethan 50 small businesses thatare benefiting from financial

grants allocated under a 8.4mEuropean Union-inspired projectdesigned to stimulate creativity

and the use of innovativetechnologies in Serbia.

Similar EU initiatives areafoot elsewhere in central and

eastern Europe as part of theblocs long-term effort to raiseliving standards, promote an

entrepreneurial spirit anddevelop competitive, value-addedindustries in the continents

former communist half.The World Bank administers

the Serbian project, with the

help of several Belgrade research

institutes, but the EU providesthe financing. The aim is also

to accustom administratorsand businesses to handling EUaid funds as Serbia gears up for

entry into the 28-nation bloc, aprospect the government hopeswill happen by 2020. Small and

medium-sized companies can wingrants of up to 80,000, if theydisplay a potential for creating

new intellectual property and formeeting a clear market demand.

Milenkovic is in no doubt

about the projects valuefor Serbia, a country whoseeconomic progress was severely

retarded after the fall of


14/48

management consultancy, net

foreign direct investment intocentral and eastern Europepeaked in 2007 at 33bn, or 5

per cent of the regions annualeconomic output.

Moreover, in the years betweenthe demise of communism in

1989 and the financial implosionof 2008, roughly 80 per cent ofthe regions foreign capital arrived

from western Europe. Most ofthis investment was concentrated

in sectors such as the car industry,banks and outsourcing, wherewestern European, US and Asianinvestors saw a chance to take

advantage of the well-educated,low-cost labour forces or toacquire assets at bargain prices.

Undoubtedly, these waves offoreign capital drove up overalllabour productivity, but the levels

attained were still below thoseof advanced western and Asianeconomies. Moreover, the benefits

of technology transfer and sharedmanagement expertise tendedto be limited to the industries in

which foreign direct investmentwas most heavily concentrated.

central and

eastern europe

14 | f t .c o m / c r e at i v i t y

Money ow:

investment

in central and

eastern Europe

has concentrated

in sectors like the

car industry, but

agriculture and

food processing

also show

potential

communism in eastern Europeby a decade of wars, extreme

nationalism and financial chaosunder Slobodan Milosevic, thelate despot who was overthrown

in 2000. It was partly Serbiasexperience of internationalisolation and economic

dislocation in the 1990s thatprompted her to search for ways

to increase the efficiency of localfood production.

Years of experiments led tothe invention of advanced waste

technology capable of producingthe substrate required for oystermushroom cultivation. This

might never have been convertedinto a business had it not been forthe EU-World Banks Innovation

Serbia Project, which providedfinance and technical advice.

Mushroom production

based on Milenkovics patentedtechnology began in June 2013,and she aims to produce 15-20tons of oyster mushrooms a year

for hotels, restaurants, cafs andbakeries.

For small businesses in

Serbia, conditions are verydifficult. Just wondering howto survive is todays problem,

Milenkovic says.But I look after my employees

like pearls, because they are sodedicated.

Other companies that benefitfrom the EU-World Bank project

include mBrainTrain, whichbuilds smartphone-operatedheadgear that records and

analyses electrical brain activity,aiding the rehabilitation of strokepatients, and Coprix Media,

which is developing an interactiveeducational application to helppre-school and primary children

learn basic mathematics.Before the innovation fund

existed you had to go to a bank

for credit, and either it would bevery expensive or you wouldnteven have got a meeting with the

bank manager, says VladimirKopric, chief executive of CoprixMedia. Now there is a better

understanding in Serbia thatinnovation drives the economy.

Of course, the sums of

money available underrecent programmes pale intoinsignificance compared with

the tens of billions of euros thatpoured into the region everyyear before the onset of the 2008

financial crisis. According to areport published last Decemberby the McKinsey Global Institute,

the research arm of the McKinsey


15/48

PhOTOS:rEU

TErS;BlOOMBErG

f t . c o m / c r e at i v i t y | 1 5

famyads, innovation paticulaly in te digitally diven

knowledge economy will needmoe effective collaboationbetween te egions business

communities and tecnicalunivesities, wic despitefinancial constaints continue to

tun out igly skilled engineesand pogammes. howeve,

deepening contacts wit tewolds most advanced economiescan be a mixed blessing, asmany of te best and bigtest

gaduates seek tei fotunesin te US and westen Euope,leaving a lack of skilled uman

esouces in tei ome countiestat ampes bot public andpivate r&D investments.

In few counties is te baindain as acute as in Bulgaia. Tenumbe of students at gaduate

level wo wentto te US in2010was ige tan te numbe fomPoland, even toug Bulgaias

7m population is not even one-fift as big as Polands 38m.

Woking conditions ae notattactive fo igly poductive

eseaces, te EuopeanCommissions diectoate-geneal fo eseac and

innovation wote in a epot lastyea on Bulgaia.

Te bain dain affects

Estonia, too, but fo Timo rein,

an Estonian-bon entepeneuin Califonia, tee ae ote,

moe cultual obstacles toinnovation. Witing in advanceof tis yeas Te Next Web

Confeence, eld in Amstedamlast mont, rein, co-foundeand cief executive of Pipedive,

a sales management and tainingcompany, said: Wit just 1.34mpeople in te entie county, and

te kind of mentality tat stiflesentepeneusip, most foundesave only ad tei eyes opened

wen teyve left te countyand seen te potential tat existsoutside Estonia and Euope at

lage.n

move towads investments in

moden tecnology tougfinancing fom te bankingsecto, says Edmond Panaiti,

Albanias agicultue ministe.Indeed, te McKinsey epot

identified agicultue and foodpocessing as an aea of potential

fo cental and easten Euope. Itsuggested tat, wit te elp ofte lage foeign food pocessos

suc as Nestl and Olam, aswell as te involvement of

pivate equity goups, te egioncould adopt new agicultualtecnologies and build foodeseac and development

centes.At pesent, food expots fom

cental and easten Euope

consist mainly of ceeal-basedpoducts and meat. Tagetedfoeign investment would enable

te egions food pocessingindusty to tun its attentionto ig value-added poducts

suc as daiy items, alcoolicbeveages and soft dinksassociated wit fitness and

ealt.Beyond te fields and

Wen te wests financialcisis slammed te bakes onfoeign diect investment in

cental and easten Euope, teegion made two unpleasantdiscoveies. Fist, it ad

abuptly lost one of te pincipalfoces popelling te laboupoductivity impovements of te

pevious two decades. Second,its domestic savings ates weetoo low to compensate fo te

fleeing foeign capital on wic

economic modenisation addepended.

Tese two factos explainte impotance of EU-fundedpogammes in sustaining

investment in te egion andin tying to cannel it in tediection of business ceativity.

A simila ole is played byte US Agency fo IntenationalDevelopment, wic, fo

example, launced a $33mpoject in Mac aimed atimpoving access to capital foinnovative agicultual businesses

in Albania. We ave to cangete mentality of suppot scemesand agicultual suvival, and


16/481 6 | f t . c o m / c r e at i v i t y

Go fgureCountries thatexcelatproblem-solving

encourage critical thinkingaswell as

factual learning,writes JeevanVasagar

Maths lessons havechanged sinceTom Ding was atschool. Recalling

his favouritesubject, Ding remembers: A bigpile of textbooks, the teacher

taking you through an example,giving you a bit of context andthen telling you what page to

open the book at.So he was surprised to enter

a classroom as a trainee maths

teacher to find the textbooks ona shelf while pupils grappledwith questions such as: Does

speaking a different languagemean you count differently? Inanother lesson, students debated

the best way to represent anumber was it as a fraction, adecimal or a percentage?

Ding, who gave up a career inadvertising to train as a teacherwith the UK state school chain

Ark, says that such questionsare a way for students to move

beyond rote learning. Ifsomething is learned too muchby rote, theres a chance thosebroader concepts are lost.

Education is under pressureto respond to a changing world.As repetitive tasks are eroded bytechnology and outsourcing, the

ability to solve novel problemshas become increasingly vital.

The origin of the word

computer is an indication of theshift. The first computers werenot machines but groups of

people, each working on part of acomplex calculation.

As computers have grown

more powerful, humans are

no longer needed to crunchthe numbers. Instead therole of people is to work out

which mathematical modelapproximates best to a real lifesituation whether that is the

fastest way to deliver Christmasshopping, or organising relief in adisaster zone.

As the rise of tech companiesshows, there are high salariesfor those most able to organise

the worlds messy information.The challenge for schools isto combine the teaching of

knowledge with the ability tomarshal those facts in unfamiliarsituations. How well are they

doing it? And can they do better?The first of those questions

was answered in April this year,

when the OECD published anassessment of the problem-solving skills of teenagers around

the world.About 85,000 teenagers

in 44 countries and regions

took the tests for the OECDsProgramme for InternationalStudent Assessment study. The

tests expected them to devisestrategies for tackling unfamiliarproblems. In one, they wereshown a map of routes linking

the suburbs of a fictional city andasked to suggest a place wherethree people could meet but no

one would have to travel for morethan 15 minutes.

They faced situations where

the information was incomplete,such as dealing with a new digitaldevice: You have no instructions

for your new air conditioner. Youneed to work out how to use it.

OK computer:

a unique

tablemethod

helped pupils

learnmaths in

the UKin 1960



PHOTO:gE

TTY


18/48

Singapore

562

SouthKorea

561

Japan

552

Macau (China)

540

HongKong (China)

540

Finland

523

England

517

Estonia

515

France

511

Netherlands

511

Thescoreis a meanscorethatcompares withan average of 500acrossall thecountries of theOrganisationfor EconomicCooperationandDevelopment.The studentswereset a number of

exercises,as partof theOECD's triennialProgrammefor School Assessment (Pisa). The2012 study assessedreal-life creative problem-solvingskillsfor thersttime.The countriesor regions

inthe chart have thehighestscoresin AsiaandEurope

Scoresin Asiancountries/region

Scoresin Europeancountries

to schools in the west. Critics ofeast Asian education systems

attribute their success at mathsand science to rote learnin.

But the OECDs assessment

suests that schools in eastAsia are developin thinkinskills as well as providin a solid

roundin in core subjects.Across the world, the OECD

study found a stron and positive

correlation between performancein problem solvin andperformance in maths, readin

and science.In eneral, the hih-

performin students were also

1 8 | f t .c o m / c r e at i v i t y

And they had to cope withsurprises. In another problem,

students were told to buy anumber of tickets at a concessionfare from a ticket machine, only

to discover that the concessionwas not available.

Schools in Europe are

frequently criticised by businessleaders as exam factories thatchurn out students unable to cope

with life beyond the classroom.But the lesson to be drawn frominternational comparison is that

Europes schools are far better atteachin creative thouht thanthis criticism implies.

Students from the mainwestern European countries Enland, France, germany,

Italy, the Netherlands andBelium all performed abovethe averae, as did pupils from

the Czech Republic and Estonia.In the rest of the rich world, theUS, Canada and Australia also

performed above averae. Butthe laurels were taken by eastAsian territories; Sinapore

and South Korea performedbest, followed by Japan, and theChinese reions of Macau and

Hon Kon.That result poses a challene

How 15-year-olds score at problem solving

gRAPHIC:KRIPAPANCHOlI.

SOURCE:OE

CD


19/48

education

PHOTO:gETT

Y

in the forefront of what you aredoin how is this hepin us?

How can we use this in anothercontext? That is the point ofeducation, to deveop a rowth

mindset, he states.It is hard to know how much

of the advantae east Asian

pupis have in internationacomparisons comes from the

academic riour of their schoos,and how much is derived fromrecent reforms in the countriesthat have souht to ive students

a more hoistic education.The OECD suests that

those countries where students

do best at probem sovin, arenot ony ood at teachin thecore subjects, but are ood at

providin earnin opportunitiesthat prepare students we forcompex, rea-ife probems.

Din, the trainee mathsteacher, says the schoo where heworks in north london attempts

to sidestep the debate betweenfacts and skis by pursuin bothwith equa reish.

On the one hand, our maths

essons bein with times tabedris, says Din. We put a otof emphasis on repetition, and

frequent testin means studentsare reuary rehearsin andassessin what they know.

On the other hand, we aso

try to use rich, open questionsto structure the units of work,

makin them more enjoyabeand memorabe for students, andaowin us to avoid shaow rote

earnin and discuss hiher-orderconcepts aon the way.n

Somethingdoesnt addup:

rote learning

alone leaves

pupils less

able tosolve

problems

In his eary pays, it is quitemechanica, and as he oes on

he is payin with these fiuresof speech and usin them in acreative way. learnin by rote, far

from stiflin creativity, enabedit, Christodouou says.

Some arue that pacin too

stron an emphasis on chidrenacquirin knowede aone eaves

them struin when faced withmore compex probems.

Tim Tayor, a former primaryschoo teacher who now trains

teachers, says: If you front-oadknowede and eave a thethinkin and critica questionin

unti ater, chidren dontdeveop as effective earners.

There are some eneric toos

that transfer across discipines,Tayor arues. What is readinif not a conitive too? And that

is ceary transferabe.The stye of teachin that he

coaches, caed Mante of theExpert, encouraes chidren

to pose as experts faced withan imainary scenario; aiminto enae their imainations

and hep them fiure out howthey woud et access to theinformation they need.

In a cass studyin the greatFire of london, for exampe,pupis wi pay the parts of

experts hepin a museum create

an exhibition about the fire. Itsa way of makin content more

meaninfu, Tayor says.The way to teach eneric

skis is to be mindfu of it as a

teacher, Tayor suests. Youcreate opportunities to keep that

the ones best abe to cope with

unfamiiar situations.But there were interestin

exceptions to the rue. When

Japanese students werecompared with chidren in othercountries of simiar performance

in maths, science and readin,the Japanese teenaers showedbetter probem-sovin abiities.

This, the OECD suested,miht be expained by Japansfocus on deveopin probem-

sovin skis throuh cross-curricuar, student-ed projects.

Whie there is areement

about the oa, there is a divideover how best to teach chidrenthe ski of critica thinkin.

Daisy Christodouou, aneducationaist and the author of

SevenMyths about Education,

arues that such skis aredomain specific they cannot betransferred to an area where ourknowede is imited.

Tryin to teach abstractstrateies that can appy acrossdomains, there isnt much

evidence for that, she says.The farther away from the

oriina domain you are, the

weaker the transfer is. In ourives this does rin true. Wea know peope who are ood

at thinkin criticay about ahistorica probem, and not very

ood at thinkin criticay about amathematica probem.

Critica thinkin is a ski thatis impossibe to teach directy

but must be intertwined withcontent, Christodouou arues.Shakespeare, auded for breakin

rues, was the product of a riidytraditiona education.

We have a ood idea of

what Shakespeares educationwas ike, she says. He woudhave earned fiures of speech

by heart, in latin. And therhetorica devices that heearned as a schooboy are

depoyed with increasinconfidence in his pays.


20/4820 | f t .c o m / c r e at i v i t y

In a factory inthe smallSwedish industrial townof Finspng, high-tech3Dprintingmachines are

meltingfine layers ofmetalpowder with lasers to formcomplexparts of expensive

gas turbines.The technology inside

thesebulky machines is being

used by Siemens, the Germanelectronics and engineeringgroup, to speedup repairs

and cut costswithin itspower generationservice andmaintenance division. In certain

cases, the time taken to repairdamagedturbineburners hasbeen cut from44 weeks to four.

Also knownas additivemanufacturing, 3D printingis one example of the sort of

technological leadership that isseen as key to boostingEuropesmanufacturing recovery and

competing against countries withlower production costs.

Siemens is one of thefirst companies to produce3D-printed heavy-duty industrialparts for gas turbines but many

other heavyweightEuropeanmanufacturers are exploringhow the nascent technology canimprove their performance.

BAESystems, theBritishdefence company, says its RAFTornado fighter jetshave flown

the firstmetal 3Dprinted flyingparts and Rolls-Royce, the UKaerospace company, plans to

use3Dprinting to producecomponents for its jet engines.

TheEUs competitive edge

will more than ever be based

Blowing inthewindHowcan theEUcash-in onits innovations?

Theanswer isobvious, itmustspend

moreonR&D,writesTanyaPowley

on innovation, productivity andtheEU economys transitioninto higher-techandhigher-value-added activities, says

BertDHooghe, policy adviserat the European Round Tableof Industrialists, a leading

manufacturing lobby group.Europe is already a world

leader in areas fromcar and

aerospace manufacturing tochemicals, and its focus onhigh-tech niches which are less

subject to low-cost competition remains a source of strength.

However, there are concerns

that the continent is laggingbehind its competitors onseveral fronts. It is facing

growingcompetition from theUS, where shale gas discoveriesare helping to reinvigorate the

countrys manufacturing sector,and China, which has steppedup its investment into high-

valuemanufacturing, no longersatisfiedwith just being the

workshop of theworld.European industrialists

agree that innovation is key butthe research anddevelopment

picture gives cause for concern.Overall EUR&D spending

has remained at about 2 per centofGDP inthe last decade, a long

way off the 3 per cent target theEUwants to achieve by2020. Italso lags behind Japan and the

US, at 3.4 per cent and 2.8percent respectively. Furthermore,theEuropean Commission

estimates that China couldovertake the EU in absolute R&Dspendingby as early as 2014.

The share of patent

Big fans:

Danish turbine

systems

company DEIF

has20 percent

of its workers

in R&D roles


21/48

PHOTO:AFP/

GETTy


22/48

maSS ProDUctioN

2 2 | f t . c o m / c r e at i v i t y

Visit.com/creativity-graphene for a

look into theUKs stake ingraphene

applications man of whichare applicable tomanufacturing alsogives a hint of this

competitive threat. In the past 13ears, the number of patentsfiledb companies in the EU has fallen

to about 110,000 and jumpedfromabout 25,000 tomore than400,000 inChina, according to

figures from theWorld Bank.

AlexandreAffre, directorof Industrial Affairs at

BusinessEurope, a trade bod,believesEurope is missing aculture of innovation.

We are not onlmissing pureinnovation in terms of productsand processes butalso innovation

in thedecision-makingprocessinEurope, he sas.Affrebelievesthat EU legislation is often too

prescriptive, restricting the abilitof companies to innovate.yet some countries in

Europe are performing betterthan others. Finland, Sweden,Denmark andGerman spendthe most onR&D in the area.

Christian Diemer, chiefexecutive atHeitkamp&ThumannGroup, theworlds

largestmanufacturer of battercomponents, sas innovation isextremel important. It hired

a group innovation director lastear to make sure the companconcentrated on the right projects

and recognised earl trends.DEIF, a Denmark-based niche

manufacturer of control sstems

for wind turbines, also recognisesthe importance of innovation:20per cent of its workforce are

engineers emploed in R&D.Ithasmanaged tokeepall ofits production inDenmark and

93per cent of its products areexported, to countries such asChina, India and Brazil.

Toke Foss, chief executive atDEIF, believes that part of itssuccesshas been in offeringan

entire service package, ratherthan selling just a product.Thisis an areawhere manEuropean

companies have leapt in frontof their industrial rivals. Some

European industrials nowmakeasmuch as half their revenuesandprofits not from producing

things, but fromprovidingservices to their customers.

Niche can mean highl

individualised production thatrespondsbetter to clients needs

with production spread aroundtheworld, sas UweCombchen,

director general of engineeringindustr group Ceemet.

Onebig consequenceof

the financial crisis is thatmanufacturing has jumped upthe political agenda inEurope

with governments across thecontinent clamouring to proclaimthemselves pro-manufacturing.

Brussels wants toreindustrialise Europe andaims b 2020 to raise industrs

share of EUgross domesticproduct from15.6 per cent to20 per cent. Polic makers and

businesses agree there is a needto improve the infrastructureof innovation, fromnurturing

new ideas to financinghigh-tech start-ups. TheEU facesa commercialisation gap,

sasDHooghe. Too oftenEU inventions/knowledge isnot translated into EU-based

innovation, he complains.

Brussels is addressing someof these problems through

itsHorizon 2020 innovation andresearch strateg, which aimsto inject 70bn into European

technolog-driven industries overthe next seven ears.

But Europe faces a more

pressing concern: a lack of skills.We simplneed to invest morein education and training ifwe are going to be able to keep

upwith our competitors, sasCombchen. Europe is slowllearning German, Austria and

Denmark are bright examplesof successful sstemswith highlevels of work-based learning.

SanSebastin,bestknown

for surfinganditsbite-sized

pintxos,isalsohometoa

smallcompanyatthecentreofa

globalraceto takegraphene the

so-calledwondermaterial from

thelab tothefactoryfloor.

Graphenea,a Spanish

technologycompanysetup in2010,is oneof Europesmain

producersof graphene,which

promisesa rangeofapplications

fromsuperfastcomputers

andfoldablemobilephonesto

superstrongaircrawings.

Thematerial, a layerofcarbon

asingleatomthick,is stronger

thandiamondbutstretcheslike

rubberand conductselectricity

better thancopper.

Butwhile grapheneresearch

waspioneeredintheUK almost

10yearsagowhenitwas

isolatedatManchester

University, earning

Russian-born

scientistsAndre

GeimandKostya

Novoselovthe

NobelPrizein

2010concerns

havegrown

thatthecountry,

alongwith therest

ofEurope,hasfailed

tocapitaliseonitsearlyscientificbreakthrough.

In2012, therewere7,351

graphene-relatedpatentsand

patent applications.China

made2,200oftheapplications,

surpassingboththeUS and

Europe,accordingtofigures

fromCambridgeIP.

Thisdisparitybetween

producingacademicresearch

andcommercialisationisdubbed

theEuropeanParadox.The

continentis goodatproducing

cutting-edgescientificresearch,

butit isnotsogoodat turningit

intomarketableproducts.

Butthereare signs thatEurope

Advantage EU


23/48

graphene-strengthened

tennisrackets,areavailable andflexible

displayscreensarenotfar

away thereallybigapplications

inelectronicsareunlikelytobe

readyuntilthe 2020s.

AndreaFerrari, professorof

nanotechnologyanddirector

of theCambridgeGraphene

Centre, saysEuropealreadyleads

thewayin graphenescience.

Maybewhenitcomesto the

finalapplicationat themoment

Europeis notleading, hesays.

Butthisinvestment thatwe

nowhaveis tomakesure that

theapplicationsof grapheneare

actuallybasedinEurope.

Netgains:

graphene-based

tennis rackets

like theone

usedbyNovak

Djokovic are

alreadyon the

market

canreclaimthe lead. In2013, the

EUlauncheda1bn research

programmethataims tofindways

ofcommercialisinggraphene.

SanSebastin-based

Grapheneais likely tobeoneof

themainbeneficiariesof this

10-year investmentpush. It isone

ofagroupofsmallcompanies

makinggraphene,mainly for

researchanddevelopment.Otherplayers inEurope include

SpanishrivalAvanzare,and

AppliedGrapheneMaterials,

aDurhamUniversityspinout.

Europeisverywell-positioned

tolead thisemerging

sector, saysJesusde la

Fuente,chiefexecutiveat

Graphenea.

The

company,

which

employs

11peopleand

exportsgraphene

materialsto 40

countries,supplies

its productsto global

operationssuchas

NokiaandPhilips. Itis

partof agrowingclusterof

nanotechnologycompanies

basedatthenanotechnology

researchcentre,CIC nanoGune, in

SanSebastin.

TheUKgovernmentis also

determinedtoprotectthecountrys stake ingraphene,with

plans toopena61mNational

Graphene InstituteinManchester

nextyear.

Fuentesays researchand

developmentspending is

crucial forEuropes future

business success. Graphene

isanewmaterial,marketand

technology.There isa long

way tolargeadoption

ofgraphenematerials

andwehave tobe

focusedonthelong-term

competitiveness, he says.

Althougha fewniche

applications, suchas


24/48


25/48


26/48

SoarawaysuccessesThere are many reasons why clusters of

innovation and excellence are developing

across Europe, writes SharmilaDevi


27/48

Trailblazer:

LEThas

producedits

L410aircra

formore than

40years in

theCzech

Republic


28/48

PHoTo:HoK

andglowfrogsTudios


Brain box: the

500mFrancis

CrickInstitute

in Londonwill

be Europes

biggest

bioscience

research

centre

LonDon:

BioSciEncE

T exp l e

bcece cte, steve

Bte, che exectve the

Bity act

(Bia), e the exmpe

ythetc by.

sythetc ethe, hch h

eve bee e c, c be m ce. Cmpe

th hee l c

mmetey tk t the

h ty t fi be

ppct, he y. Theye

t tck me cece pk

bt b cty.

The uK h the et

ppee y btech pect

e te the us, cc

t ept t ye pce by

the Bia fic evce

ctcy fim EY.

The uK btech ect

h me th 400 ptet

pct the ppee 2013

the ee Epe,

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fi the ext t pt.

gby, C

Mchett hve the e.

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next ye, the 500m

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t the , tetmet pevet ee

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cpt t t e ce te, th ox Cmbe the the t

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repbc. d the svetye t exceet, the cet expete ect

ecet tht e.i the me fie, we h

the eht t e cetve

e ty th ete ptet.


29/48f t .c o m / c r e at i v i t y | 2 9

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d t eete e ecmcpptte f the uK.

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lbty f Mec By.Thee e btt hde

t be vecme, thh, ch

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aepce h bee fict pt f the Czechdt mx. ove the pt 100

ye, cd eve decdef Cmmm, t h dvcedfm e ctee f epce

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pdct t me phtctedpdct ch cmmec

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dvte ch hh-techect bece eve thh theemy be cte th e

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epce cmpe tctbte t ab edpt the b mket.

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wet we apt d, ce

t ye, neqy Capt the uK wet Ctytethe fm the nt

The jet stream:

aerospace

companies

from across

theglobeare

setting upshop

in theCzech

Republic


30/48

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cete te the 1990 fictoo gemy e phycpce the eo o compe


31/48f t .c o m / c r e at i v i t y | 3 1

Thats logistics:

DHLwas

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geographical

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32/483 2 | f t . c o m / c r e at i v i t y

The future is far

from rosy formanymanufacturers inEurope butRoberto

Gavazzi, chiefexecutive of Boffi, a top Italianmaker of upmarket kitchen and

bathroom units, is upbeat.I amvery confident that

the currentdifficult markets

are getting better for the bestbrands, he declares.

Underlying this sentiment

is Gavazzis belief that Boffi like manyother Europeanmanufacturers of a similarmould

has built up strengths not justin product creation but in usingservice and design skills to offer

customers something special thatwould be hard to obtain fromrival businesses.

Consumers are evenmoreselective they want to choose

only thoseproducts that have areal addedvalue, he says. So[they choose]not only designand function, as is normal for

our collections, kitchens andbathrooms, but now they wantincreasingly to buy something

that gives them a very specialmood or atmosphere.Here, Ithink we candowell.

Making marine instrumentsfor jobs such asmeasuring thesalt concentration in seawateror locating underwater objects

suchasmines is a very differentindustry sector. ButMatthewQuartley is also looking to the

future with some optimism.

Quartley is the managingdirector of Valeport, a UK

company that is among theleadingbusinesses globally initsfield. It has recently invested2.5m in a new production and

commercial centre at its basein a quiet corner of southwestEngland, a sign of confidence

that the company is ready tocontinue its substantial growth ofrecent years.

We havea staff of 75 while in2003we employed only 30, saysQuartley. The new investment

hasgiven us room to breathe.Boffi and Valeport are among

hundreds of topmanufacturing

businesses based in Europe thathave eschewedmass market,commodity-style sectors.

Instead theyhave concentratedon narrow niche areas ofindustry where often fairly small

enterprises can command aglobal presence.

Other attributes shared by

thesemanufacturers includereliance on specialist technicalskills, an emphasis on product

customisationand use ofhybridised supply chainsthat combine the far-flung

with the local. For example,European businesses keep costsunder control by purchasing

standardised componentsandmaterials from low-wageeconomies. At the same time

theymaintain strong linkswithkey local suppliers thatmakedesign-intensive components and

Storage wars: the

EUcan take on

foreign markets

with high-

qualityspecialist

products

like Norbert

Wangens

kitchen cube

design

CounterintelligenceEurope isdeclining asamanufacturing power

butnichecompanies that expandand invest

wisely canbuckthe trend, says PeterMarsh


33/48


34/48

BeSPoKe


but take it into a differentmarket. In this way, Vitronic,

a German company that useslaser scanning in instrumentsthat measure the speeds of road

vehicles, has moved into areassuch as laser-based identificationsystems for monitoring

the movement of goods inwarehouses and factories.

The success of some leadingEuropean businesses is alsolinked to their ability to extendtheir reach on a global level

while retaining a strong base intheir home country.

Baader of Germany is a leader

in the field of fish-processingmachines, suited to handlingdifferent species of fish andwhich both automate messy jobs

such as removal of bones andextraneous tissue and reducethe risks of contamination.

The company has extensiveglobal connections just overhalf its 1,100 employees are

outside Germany but the mainproduction is done in Baadershome country.

Sometimes the emphasisin terms of global connectionscauses the domestic aspect of the

companys operations to shrink,while its overseas activitiesincrease. Thus Bisazza of Italy

a leading maker of decorative

mosaic tiles has reduced itsworkforce in Italy over the past

five years while extending itsmanufacturing and assemblyplants in countries such as

Mexico, India and China.More frequently, however,

top European manufacturers

go in both directions at once.Trumpf, the German companythat is the worlds biggest maker

of laser cutting machines forsheet metal, recently underlinedits commitment to overseas

expansion through the purchaseof JFY, a leading Chinesemachine maker. But its key

production and development

assemblies that are often crucial

to the final product.But the positions of many of

Europes specialist manufacturershave inevitably been harmed by

the deep economic difficulties ofrecent years, linked particularlyto the2007-08 financial implosion.

Meanwhile the rise ofmanufacturing in China and

other fast-growing economieshas greatly reduced the share ofleading European countries inglobal manufacturing output,

which (excluding Russia) fellfrom 28 per cent in 2000 tojust over 21 per cent in 2012,

according to UN data.Even Germany dropped from

7 per cent to 6 per cent over the

period, while Britains sharehalved to just under 2 per cent.

With large swathes of

mainstream industry, includingcars, white goods and steel,suffering severe falls in demand,

manufacturing employment inthe EU between 2007 and 2013declined by roughly 10 per cent,

equivalent to a loss of some 3mjobs. Despite a recent recovery itremains sluggish.

It might seem surprisingthat so many leading specialistcompanies are feeling cheery.

Take Enrico Krog Iversen, chiefexecutive of Universal Robots,

a Danish producer of highlyadaptable industrial robots thatwork on production lines aroundthe world.

Universal Robots, which

was founded in 2005, has100 employees and relies on anetwork of about 25 key suppliers

based in Denmark that makemany of the crucial engineeringassemblies and parts. Europe has

many of the important technicalskills and some strong clusters oftechnology-based businesses. For

our sort of manufacturer, I dontsee any major challenges ahead,Iversen says.

Such views are not universally

shared. Alberto Alessi, general

manager of Alessi, the Italianmaker of upmarket kitchen goodsand other products, says: Im not

at all optimistic for the future ofmanufacturing in Europe. In aworld where consumer products

tend to [move] to industrialcommodities without soul orcharacter, high production

costs will make the [Europeanposition] too difficult.

But the balance of opinion

leans towards optimism. Sohow have the most successfulEuropean small to mid-

sized production businessesmanaged to cling on to andsometimes extend their global

capabilities? One answer is thatthey have stuck to their keystrengths built around specialist

products or machines wherethe relative smallness of themarket plus the difficulties ofreplicating the required degree

of know-how act as a bigbarrier to potential competitors.

For instance, Blum of Austria

has built up a leading positionin the narrow field of hinge andfastener systems for furniture.

It holds 1,200 patents coveringthe esoteric aspects of motioncontrol for doors and shelving

units and it sells 1,100 differentvarieties of hinge.

Similarly specialised isBelgium-based IBA, which is theworlds biggest supplier of novelmachines for treating cancer

patients by directing streamsof protons at the affected areas.About 25,000 patients have been

treated on IBA equipment whichthe company says is more thanon all competing installations

combined withthe cost of amachine plus ancillary equipmentvarying from $25m to $50m.

Sometimes a company canuse its strength in a narrowproduct area to extend its reach

into related fields that relyon the same basic technology

Visit.com/creativity-robots for

a proleofUniversalRobots


35/48

PHOTO:GETT

Y

Small fry:

Europe

produces

automatic fish

processors,

robotic

assemblies

andluxury

kettles

centre remains in its basein Stuttgart, which employs

a quarter of the companys10,000-strong global workforce.

Nicola Leibinger-Kammller,

Trumpfs president, plays upGermanys strengths in specialistmechanical and electronic

technologies. Germany, and inparticular our home region of

Baden-Wurttemberg, are for usstill the best machine constructionlocations in the world, she says.

Also, many of the topmanufacturers in Europe say that

remaining at the highest level interms of technology capabilitiesis an essential part of their ability

to keep ahead of competitors inother nations such as China andIndia that may have the benefit of

lower costs.However, Fabio DeLonghi,

chief executive of DeLonghi, the

Italian company best known forits consumer domestic appliancessuch as coffee machines and

kettles, says that attemptingto innovate by channellingmoney towards research in new

materials and electronic controlmechanisms is only part of thestory. What is needed, he says,

is matching these efforts withthinking about the requirementsof the customer. Only those

companies capable of delivering

meaningful innovation innovation that improves

the consumption experienceand delivers benefits thatconsumers can perceive will

remain ahead of the curve in thefuture.

Hans Langer, chief executive of

EOS, a German company that isamong the top producers globallyof novel families of 3D printing

machines, has a similar emphasison developing technology whileat the same time listening tocustomers. In close co-operation

with [customers], we will pushthe technology to the next level,he says.


36/48

photos:get

ty;KevinMazur/WireiMage

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Streamingsaved the

radio starSpotify is helping to revive

the fortunes of the global

music industry, reports

MatthewGarrahan


37/48

music

f t .c o m / c r e at i v i t y | 3 7

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times:a song

bySwedishDJ

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rst to reach

200mstreams

onSpotify

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38/48XX | f t . c o m / X X X X X X X X X X X X X



Now, more than ever,design is discussed,

disseminated,published andcelebrated.

Magazines glamorise designand websites provide access tothe newest fads. Fairs, festivals,

exhibitions, biennials andauction rooms elevate design

into a cultural medium on anequal footing with art.

No company in recent yearshas done more to promote the

cult of design than Apple, whosestyle guru is British designerSir Jonathan Ive, a quiet but

obsessive character whose eyefor detail and minimal style hascreated the highest-impact cult

products in a generation. Afterall, what is Apple but design?

Whether it is the sleek,

seamless objects themselves,which would have beenunimaginable a decade ago, orthose magical apps that appear

as if from the ether, Applehas put design centre stageand any company aiming to

emulate its premium pricingand cult success is forced toaccommodate design at the

centre of its strategy.But has even that measure of

success really made a difference?

Has it made design as an

industry more central? Is designfundamentally at the heart of

business or is it still regardedonly as an add-on or a luxury?The evidence points to the latter.

Despite everything, despitethe glamour of design and theclamour to be designers, big

business still seems to somehowdisdain design. Beyond therarefied world of high fashion,

design remains marginalised.Europe was traditionally

the home of design-centred

production and its decline canbe seen by comparing a goldenage in the 1950s and 1960s

with contemporary production.

Modelbehaviour

Its heritage is renownedbut the

designindustrymustadapt to

thrive, says EdwinHeathcote


40/48

international mid-century design

culture. Even today, a walkaround the Milan furniture fairis an extraordinary testament to

the skill of the craftsmen whorapidly produce hundreds ofprototypes for the exhibitions.

In recent years, though, manyof the Italian manufacturershave been voicing their concern

that things cannot remainthe same. Competition andcopying from China is crippling

their traditional markets. Thenewer model of commissioningdesigners from beyond Italy has

ensured Italian companies stayedat the forefront of international

design but it has also diluted theidea of Italian design, its identity.At the same time the generationof craftsmen is ageing and is not

necessarily being replaced.The current big thing is 3D

printing and the idea that we

will all be enabled to becomesmall-batch manufacturers ofour own designs. But the way in

which this may accelerate a lossof crafts skills is little discussed.It is not a Luddite position

to express nervousness aboutdiluting the skills that have madeEuropean design such a thrivingindustry and have given it that

distinctive edge.

DeSiGN

PHOTO:BLOO

MBERG

40 | f t . c o m / c r e at i v i t y

Topgear:

Renaulthas

collaborated

withsci-f

designerRoss

Lovegrove.

Below:shelves

atMilans

FurnitureFair

Think of Ettore Sottsasssextraordinary work for Olivetti

(comparable with Ives worktoday) or of Dieter Rams longline of exquisite products for

Braun (Rams has been a hugeinfluence on Ive). Think ofthose companies today and it is

impossible not to perceive thesteep decline of design.

Similarly if we think of SirKenneth Grange, Britains mostrevered industrial designer,and his mass market work for

companies from Kenwood toKodak, we can see that, despiteall the hype, despite the massive

proliferation of design as an idea,design was far more mainstreamin the middle of the last centurythan it is today.

Even the big Italianmanufacturers, for half a centurythe mainstay of the European

design industry, are now warningthat European production couldcollapse under intense pressure

from Asia. And if that doeshappen there is a real dangerthat the industry that sustains

design will disappear.Yet, despite the shakiness of

the big picture, there are signs

that things could be different.The Netherlands brings aparticular understanding to

design, an idea that its impact

need not be solely on productsbut on society itself. Judging

the Netherlands Design Prizeearlier this year I was struck byhow far almost all the entries

had moved from industrialproduction. There was socialdesign and conceptual design

and a complete lack of the usualchairs and coffee pots.

Instead there were real

surprises including Temstem,an app developed for peoplewho hear voices in their heads

and which purportedly calmsthose voices by using the affectedlanguage recognition part of the

brain to play simple word games.

It is a stunningly simple solution

to a complex and damagingproblem achieved in the mostdirect way imaginable witha clearly-designed and freely

downloadable app.Another Dutch entry,

Fairphone, presented a design

for a smartphone in which all theelements are ethically sourced,

environmentally friendly andcompletely recyclable. It seemsextraordinary that this phone,almost indistinguishable

from most others, couldbe manufactured in such aradically different way and for a

comparable price.Denmark has famously

embraced design almost to

excess. When every home andevery commercial interior isimpeccably designed and filled

with beautiful design objects, theaesthetic landscape can becomealmost anodyne. Nevertheless,

Danish companies have beensuccessfully building on that richhistory of modernist design with

firms including Fritz Hansen,Stelton and Kvadrat producingsuperb, Danish-designed

products in Denmark itself.Italy remains arguably the

most intriguing model. Its

design industry famously grewfrom the ruins of wartime

production when armamentsproduction was switched toconsumer goods, helped bygenerous Marshall Plan funding.Its manufacturing success was

an economic miracle almost tomatch Germanys, its industrybecoming synonymous with

everything from motor scootersand fashion to espressomachines and sports cars.

And each of these productswas sold on the back of Italysuniquely seductive design.

The countrys culture of smalland medium-sized familycompanies proved nimble and

perfectly suited to the emerging



fashion scene completely outof proportion to their home

countrys size. They presentonly the most visible crown of acountry in thrall to design.

We have become used toproduct designers, fashiondesigners, architects, graphic

designers and so on andtheir role in any evolution of

European design is secure as thecontinent continues to exportits most famous brands. Butperhaps where the future lies is

in the application of design toless familiar areas.

The emergence of social

design and conceptual design,for instance, promises toquestion, undermine andreinterpret accepted dogma.

If designers are able to applytheir intelligence to processesas well as products, to society as

well as shoes, then real changesmight emerge. Corporationsare cautious, but it will happen.

Some of the more radical andintellectual design practicesincluding Jurgen Bey, Ezio

Manzini and Marti Guixe havebeen positing probing questions.

They have introduced the

idea of a critical design that,rather than using design to solvea problem, uses it to begin to

illuminate the complex issues

around a problem, as well astaking design beyond product

and into human behaviour.In the meantime, social

design, the idea that design

should contribute to good in theworld, is beginning to have animpact on services and delivery

in everything from social workto healthcare and education.Perhaps, counterintuitively, an

alternative future for design maywell lie here. Designers alwayswork in the future with an ability

to anticipate change. If industrydeclines and power shifts, designstill may have a future, albeit one

that looks very different.n

collaboration that can leadnot only to breakthroughs andcrossovers in technology but also

to a kind of brand differentiationthat might be critical in thecurrent struggling market.

Britain has had huge successin exporting industrial designers.If the Netherlands is known for

its unconventional, eccentricconcepts and Italy for its sexystyling, the Brits are known for a

robust and elegant functionalismin a tradition that stretches backto Kenneth Grange and beyond.Currently Jasper Morrison

is one of the most renowneddesigners working for a range

of international companies butother less familiar names includeSam Hecht and Kim Collin ofIndustrial Facility, Sebastian

Bergne and Barber Osgerby, allworking for a remarkable rangeof international companies

and creating a kind of hybridEuropean design that blendsfunctional, elegant British design

with continental Europeanmanufacturing flair.

The Belgians have also been

a surprisingly strong designpresence. Ann Demeulemeester,Dries van Noten and Martin

Margiela and Raf Simons haveexerted a huge impact on the

One arena in which Europehas been embracing design

is the automotive industry.Prestige manufacturers such asFerrari and Porsche have always

made an issue out of design,celebrating individual talentsand design consultants (Ghia

and Pininfarina, for example)but the more commercialcompanies have kept design

in-house and anonymous. A bigchange has been the deliberateassociation of cars with design.

In April, Volkswagenshowcased its neat, diminutiveXL1 not at a car show but at the

Milan Furniture Fair, just as last

year Renault first showed itsextraordinary Twin Z concept

car with its theatrical brakelights extending across the wholerear and its stunning, organic

wheels at the Milan show. Forthis, Renault commissionedBritish designer Ross L

ft business and creativity

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