Turning the European Union into an Innovation Union

13 June 2011

Director General for Research and Innovation, Robert Jan-Smits outlines how Europe can become an innovation union…

As consumers, we have all benefited from squeezed prices as techno-savvy emerging economies ’€“ China, India especially ’€“ become integrated into the world trade system; as citizens we are increasingly anxious that we may be the last generation to experience a generalised increase in wealth from the one before us. Securing sustainable growth in a global economy is therefore the prime objective of the EU and its Member States.

This will to a large extent depend on our capacity to innovate in products, services, business and social processes, which is why research and innovation are key strands of the Europe 2020 strategy.

Stark figures confront this ambition to use knowledge as a driver for sustainable growth. Albeit with large internal variations, Europe consistently spends less than 2 per cent of GDP on research and development, only two-thirds of that in the US and a little more than half the Japanese figure. Meanwhile, China’s investment is growing year by year and will be on a par with Europe in a few years. The EU Innovation Union Scoreboard tells a similar story: a big innovation gap with Japan and the US, with China (not to mention India and Brazil) quickly catching up.

The Commission’s Europe 2020 (EU2020) package, launched in March 2010, puts the ‘knowledge triangle’ of education, research and innovation at the heart of our strategy in response. Among the seven EU2020 flagship initiatives, the Innovation Union, launched in October 2010, sets out for the first time a comprehensive strategy to strengthen every link in the innovation chain, from ‘blue sky’ research to market.

Repeated independent evaluations have shown that, over the years, EU research and innovation policy and its key instrument the Framework Programme has proven a powerful means to bring the research and innovation actors together to provide critical mass for tackling EU-wide issues, enhancing the mobility and aspirations of researchers and building up the excellence of the European knowledge base.

The ongoing seventh framework programme (2007-2013) has seen not only a significant increase in funding levels, which are running at about ’‚€ 8 billion per year ’€“ probably the largest single research programme in the world ’€“ but also major innovations in the way programmes are designed and delivered. Two examples are the newly-established European Research Council, which has changed the rule book by establishing a competitive funding scheme for individual teams (rather than consortia) and the Risk Sharing Finance Facility (RSFF), which enables the framework programme to leverage loan finance for industrial research projects from the European Investment Bank. A number of important experiments have been conducted to optimise the delivery of research programmes, via structures such as the Joint Technology Initiatives in key areas such as aeronautics and pharmaceuticals.

Nevertheless Europe still has a long way to go to improve efficiencies by pooling strategies and research effort, cutting out costly duplication and streamlining research funding. National and regional governments still work too much on the basis of separate strategies.

A step change is required now, with more effective targeting of the EU budget on research and innovation on the strategic priorities for EU2020 and a radical overhaul of policy design, management and procedures. The Commission’s vision ’€“ strongly endorsed by the European Council ’€“ is that research and innovation programmes should be accommodated within a Common Strategic Framework (CSF), encompassing all relevant EU research and innovation funding now covered by the framework programme, the Community Innovation Programme (CIP) and the European Institute for Innovation and Technology (EIT), and organised around coherent goals and shared strategic objectives.

This approach was presented in a Green Paper published in February 2011. It is organised around three key objectives:

• Tackling societal challenges. The ambitious policy objectives in areas like climate change, energy security and healthy ageing identified by the Europe 2020 strategy are all transnational challenges and cannot be solved by individual countries in isolation. To address them effectively, a critical mass of effort is needed, along with close coupling of research and innovation. Support will be given to activities leading from research projects through proof of concept, pilot and demonstration work, bringing together the actors from different countries, sectors and perspectives. By focusing effort on a limited number of the most critical challenges, the required intensity of effort will be achieved, whilst building up a flexible knowledge base for broader policy needs.

• Strengthening competitiveness. Europe needs to be much more adept at turning research into tangible economic impact and attain industrial leadership in the novel productions and key technologies of the future, in areas like ICT, nanotechnology, advanced materials, space and biotechnology. Through a combination of research and innovation actions, access to risk financing (building on the RSFF and the CIP instruments) and more adventurous public procurement, the CSF will encourage the development of strategic technologies and exploit the pivotal role of fast-growing SMEs in transforming the structure of Europe’s economy, helping them to grow into tomorrow’s multinational companies.

• Strengthening Europe’s science base and the European Research Area (ERA). The Innovation Union flagship initiative envisages the completion of ERA by 2014 and the Lisbon treaty reinforces the legal base for this. Important strides have been made, but many political barriers to the mobility of knowledge remain. The CSF will further develop EU actions to support Europe’s world-class science base, through activities with recognised added value, in particular the European Research Council, access to large research infrastructures, and the Marie-Curie fellowship schemes.

This significant simplification of the funding architecture translates into a more ‘joined-up’ research and innovation landscape. On one hand, the agendas for each of these three blocks will be set directly by the relevant stakeholders ’€“ public policy actors, industry and the scientific community respectively. There will also be stronger complementarities with other Europe 2020 priorities, for example with the cohesion policy funds, which should themselves be increasingly focused on capacity building for science and research. On the other, the CSF will operate with a common toolbox of standardised but flexible funding instruments, reaching from frontier research to innovation and demonstration, diffusing the boundaries between the blocks; it is clearly crucial, for example, that the solutions to societal challenges are also means to strengthen European competitiveness.

It is vital that we continue to expand the range of participants, for example to ensure that younger, highly talented scientists and entrepreneurs and excellent institutions can be involved across the whole fabric of the EU and not just the better-equipped countries and regions. Complementary to the simplified architecture will be radically simplified procedures, reducing the administrative load on participants and speeding up the product management lifecycle.

Externalised management will be a further key to more effective and efficient operation; building on the experience of the ERC and the REA executive agencies, as well as public-public and public-private partnerships (as the JTIs) and the partnership with the European Investment Bank.

The Green Paper consultation which ended on 20 May has resulted in substantial feedback. A wrap-up event will be organised on 10 June to discuss the results with a broad range of stakeholders which will be the basis for a Commission proposal on the CSF by the end of 2011.

This article is due to appear in Public Service Review: European Science and Technology (Issue 11) this month.

This article is taken from http://www.publicservice.co.uk website.