Authors Iain Begg | Gabriel Glöckler | Anke Hassel ... - The Europaeum

particular, “Through the Open Method of Coordination the Commission
will help to facilitate the modernisation and restructuring of education
systems so that they provide the necessary competences to foster
innovation”. 25
There are two ways to interpret this objective. A first interpretation would
suggest that the Commission is arguing that the education systems within
the EU should keep pace with the rapid technological changes that the
world is experiencing, particular in the ITC sector. If this is the case, it
is unclear what value added the EU could play apart from dispensing
common sense to national policymakers, for example by calling for schools
to be provided with computers. On the other hand, if this programme is
suggesting that each member state should aim at endowing the population
with the same kinds of skills, then this directly clashes with the logic of the
VoC, and is likely to result in very little policy learning at all.
As recalled earlier, patterns of innovations are one of the key aspects
of divergence between LMEs and CMEs. This is not to say that one has
more innovation capacity. Rather, because of their different institutional
configurations, LMEs tend to favour radical innovation in products and
processes, while less dynamic CMEs develop innovation patterns that
express themselves in marginal, but steady, increments. 26
To offer stylised EU-focused evidence to corroborate this story, Figure
1 compares four EU countries: Germany and the UK are archetypal
Coordinated Market and Liberal Market Economies respectively. Denmark
and Sweden are more intermediate cases, with the former leaning towards
the LME cluster, and the latter towards the CME cluster. These countries
are the overall EU leaders in innovation (together with Finland), 27 and
therefore they represent the model that other less dynamic countries
should emulate.
The bars in each graph show the industrial sectors in which those countries
hold a strong comparative advantage. The bars identify the category
of goods that are leaders in export performance within each country
vis-à-vis all the other countries in the world. 28 The widest difference in
comparative advantage is between Germany and the UK. They share a
strong comparative advantage only in one category, i.e. power generating
machinery and equipment (SITC 71), in which arguably both radical leaps
of innovations and incremental small-scale improvements are likely to play
a role. For the rest, Germany specialises in the production of goods such
as metalworking machinery (SITC code 73), general industrial machinery
Chapter 8 – Dermot Hodson and Marco Simoni 123