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IN THE early 1980s, an economist in the US coined the term ‘Eurosclerosis’
to describe Europe’s apparent inability to master and exploit the challenge
of new technologies. Today, the pessimism has virtually disappeared, as
many of Europe’s industrial and political leaders express a new-found confidence
in their ability to stay on equal terms with their US and Japanese competitors.

In the vanguard of this cultural revolution has been Esprit, the European
Strategic Programme for Research in Information Technology, launched by
the European Commission in Brussels in 1984 at the initiative of the then
commissioner for industry and research, the Belgian viscount Etienne Davignon.
Many of those who have been closely involved in the development of Esprit
since then met in Brussels at the end of last month to examine the successes
and failures of the programme so far.

The meeting took place at a critical time. The European Commission is
currently negotiating its total budget for research over the next five years
under the so-called Framework Programme.

A key question is how much further the Commission should go in providing
public funds to support the development of Europe’s information technology
industry. By 1993, this will be the largest economic sector in Europe, and
almost two-thirds of other industrial and service sectors will depend upon
it for their efficiency and competitiveness. The Esprit conference was told
that the successful use of IT will be vital if European industry is to exploit
the changes heralded by the advent of the single market in 1992. The conference
even touched on the potential of IT in establishing new links between Eastern
and Western Europe.

Esprit began in 1984, when the first five years were allocated total
funding of 1.5 billion European Currency Units. (Pounds sterling 1 billion).
Half of this came from the community and half from industrial and academic
partners. The second phase of Esprit, amounting to 3.2 billion ECUs (Pounds
sterling 2.3 billion) is funded in the same way. The 10-year scheme, Europe’s
largest single research programme, had three main aims.

Esprit’s overall strategy was to provide Europe’s IT industry with the
basic technologies it would need to remain competitive with the US and Japan
in the 1990s. It also aimed to promote cooperation between European companies
in this field, and to add momentum to the use of international standards.

But the goal of building up technologies with which Europe might fend
off the US and Japan has proved difficult to achieve. This is largely due
to the lack of capital investment available to IT in Europe compared with
the US and Japan, according to Brian Oakley, who was the first director
of Britain’s national research initiative in IT, the Alvey programme, and
is now a member of the Esprit advisory board.

Laurence Clarke, another former head of the Alvey programme who now
coordinates GEC’s input into Esprit, feels that despite the influence of
Esprit, Europe, like Alice in Wonderland, is still having to run fast just
to keep still in its development of basic technologies.

Horst Nasko, chairman of the Esprit Advisory Board and a member of the
executive board of Nixdorf, the West German computer company, agrees that
European industry still has a long way to go: ‘Two-thirds of memory chips
are produced by Japanese manufacturers, and this share gets close to 90
per cent for the more advanced type of memory, such as the 1-megabit DRAM
(dynamic random-access memory) . . . nearly 90 per cent of the production
of 32-bit microprocessors is concentrated in three US companies.’

Antonio La Pergola, chairman of the European Parliament’s committee
on energy, research and technology, agrees that although Europe has made
an appreciable gain in basic technology compared with the US and Japan,
it is investing still pitifully little money. The $4-billion budget for
Europe’s Joint European Submicron Silicon Initiative (Jessi) to develop
advanced chips is still only a fraction of the amount spent by the leading
Japanese electronics companies in a single year. He says that Europe’s budgets
are ‘inadequate for the achievement of the political goals we have been
looking for’.

Without the necessary investment, says Oakley, whole sectors of the
market – such as that for the peripheral parts of computers like printers
and displays – will slip out of Europe’s fingers just as consumer electronics
eluded Europe and was exploited by the Japanese.

Nevertheless, many industrialists concede that without Esprit, Europe’s
basic technology would be far behind its current status. Esprit has helped
to persuadeEurope’s industrialists to tackle R&Dprojects that they would
not otherwisehave attempted. What is more, much ofthis R&D has already
led to the development of prototypes and products. Morethan 100 Esprit projects
were able topresent concrete results in Brussels, andmany of these are now
sufficiently advanced to be sold against competitive products on the world
market . Esprit reduces the cost of investing in both R&D and marketing.
This is a huge stimulus for an industry whose products can become obsolete
in as little as three years.

Industry took hold of the reins of Esprit from the very start. Nasko
feels that this has been the programme’s overriding achievement: ‘As a result,
strategy is being more clearly articulated and, on a European level, being
pursued in a more focused way,’ he says. ‘Once people get off their backsides
and talk to other companies and universities, they find it really does work,’
says Clarke.

Oakley points out that this cross-fertilisation of technology will play
an increasingly important role as Europe’s microelectronics and software
sectors continue their process of restructuring over the next few years.
Companies in these two sectors have recently shown a penchant for mergers
and joint ventures, coalescing to form the powerful, multinational concerns
that are felt to be necessary to compete with the rest of the world.

According to La Pergola, however, Esprit is now so popular that it risks
becoming unwieldy. At the Brussels conference, he warned that the bureaucracy
attached to projects under Esprit can be slow and cumbersome, and urged
that this be sorted out so that the politicians discussing the Framework
Programme could not pick on this one problem as a reason to reduce funding
to Esprit.

Esprit is now so successful that some industrialists fear the commission
will react in the same way as the British government did once it realised
that the Alvey programme was working. Ministers spotted that Alvey was producing
prototypes that might be useful for industry, at which point the government
withdrew the funding for the bulk of the programme, leaving industry to
pick up the pieces which it thought might have potential.

‘The time may have come to extend the Esprit umbrella to the threshold
of industrial application,’ said Umberto Agnelli of Fiat at the Esprit conference.
This would be a sea change for Esprit, which was originally intended to
concentrate on pre-competitive research, and steer clear of the market place.

Esprit has risen to the challenge of its third goal, to pave the way
for international standards, and has produced several successful initiatives.
‘The US has now realised that here we have an organised force with a major
say in the standards market,’ says Oakley. One example is the development
of software known as the Portable Common Tool Environment (PCTE), which
provides a standard way for people working in industry and universities
to develop their programs. So far, more than 150 universities are using
this software, which aims to speed up the work of software engineers.

Esprit has also helped to set up standards for office-based computer
systems, allowing people to use one set of software to manipulate documents
on many types of computer, and to send the document’s electronically between
systems from different manufacturers. This is known as the OfficeDocument
Architecture (ODA), and hasalready been adopted by internationalstandards
bodies.

Esprit has also helped to promote theuse of standards in factories,
so that onecompany’s design office, its suppliers, itsproduction team and
those on the factoryfloor can communicate easily on a computer network.

An analysis of the success of Esprit from the viewpoint of academia
produces a slightly different picture to that portrayed by industry. The
universities of Europe have played a secondary role to their industrial
partners. Some academics feel that university researchers saw few benefits
of their own from the first phase of Esprit. They have accused it of serving
only toset up a convenient pool of researchers,stretching across Europe,
for industry todip into at will.

Universities are taking a far more active role in the second phase of
Esprit. Part of the reason for this was the formation last year of a pure
research element to Esprit. This project, which is worth 63 million ECU
(Pounds sterling 46 million), covers three areas; microelectronics, computer
science and artificial intelligence. It includes work on high-temperature
superconductors, organic materials, optical computing, software languages,
robotics and vision and neural networks. The basic research programme was
conceived in response to industry’s leading role in Esprit proper, which
some thought might focus Esprit too firmly on the short-term advantages.

So what are the reasons for the success of the Esprit programme? And
what lessons should the rest of Europe’s research community learn from it?
The directorate in Brussels which handles information technology and telecommunications
is unusual in that it has an unusually large number of industrialists on
its staff – seconded from their employers in the IT industry. This has helped
to encourage industry to feel involved in Esprit, and confident that the
commission will heed its views.

Another strong message, from industry as well as officials at the commission,
is that companies in Europe have found a refreshing challenge in the process
of peer review that accompanies Esprit projects. Often, it is their competitors
who review their work. University groups are used to this, but it is new
to industrial researchers.

Esprit may represent only 5 per cent of the R&D expenditure of the
IT industry, but it clearly plays an important role in harnessing the many
currents of research that run through Europe’s information technology companies.
But the future of Esprit hangs in the balance with the rest of the research
programmes under Framework. Britain has a track record of objecting to the
commission’s budget proposals for Framework. ‘Time is short, very short,’
said Nasko at the conference, ‘I appeal to the 12 ministers of research
for quick decision making on the new Framework Programme.’

* * *

Europe versus the rest of the world

MORE than 200 projects beganlife under the first phase of Esprit,each
containing at least two industrialpartners from different member states.
Atthe programme’s peak, 3000 engineersand scientists from 420 independent
organisations were working full-time on its projects.

At this year’s Esprit conference in Brussels, more than 100 projects
were able to demonstrate significant results. In some cases, researchers
exhibited products that are selling on world markets.

The Supernode project, set up by Britain and France, is one example.
The first phase of this project developed a cheap parallel supercomputer
for Europe. The second phase, Supernode II, aims to develop software to
run on the computer.

The Supernode machine is based on the Transputer – a computer built
on a single chip by the British company called Inmos. The company was recently
brought by SGS-Thomson, the Franco-Italian electronics company. Supernode
computerscost about Pounds sterling 250 000, but are as powerful as supercomputers
which can cost millions of pounds (see Technology, this issue).

According to Brian Oakley, the former head of Britain’s Alvey programme
of research in information technology, the Supernode project would never
have got off the ground without Esprit. He feels that the computer the project
has produced can compete well with those developed under Japan’s national
effort to develop a so-called fifth-generation computer – a computer that
would be capable of processing knowledge in a similar way to the human brain.

Another major project, which has yet to be formally launched, is the
European Microprocessor Initiative. This five-year programme will be Europe’s
answerto a Japanese initiative known as Tron. Both projects aim to bring
together several computer manufacturers to develop advanced microprocessors
that use the same design of hardware.

The leading partners in the European project are the Italian computer
company Olivetti, SGS-Thomson and the French company Bull. Those involved
believe that the project would never have taken place without the sense
of community generated by Esprit, and that this represents Europe’s chance
to confront competition from the US and Japan in microprocessor technology.

The European chips will be based on the transputer processor from Inmos,
and will employ the sub-micrometre technology to be developed under Europe’s
Joint European Submicron Silicon Initiative (Jessi) to cram more than 10
times as many transistors onto a chip the same size. The processors will
be designed to function in personal computers and work stations that can
run several processors in parallel.