MEMO/08/430

Brussels, 24 June 2008

"Aho Report" on EU High-Tech Research: A Wake-up Call for Innovation in Europe, says Commissioner Reding

Europe has started doing better in high-tech research but still has a lot more to do, particularly to capitalise on the results. This is the conclusion of the independent expert report, chaired by former Finnish Prime Minister Esko Aho, that analysed the effectiveness of Information Society research under the EU's 6th Framework Programme for Research and Development. Although Europe has considerably improved its high-tech research, with the European Commission taking the lead in boosting Micro Computer (IP/08/283) and Nano-Electronic (IP/08/284) research, it now needs to move up a gear to bridge the innovation gap with other parts of the world.

The EU has invested over €4 billion in Information Society research between 2003 and 2006, complementing the €100 billion invested by Member States and private companies. While implementing a new research programme that will run until 2013, the Commission has requested an independent panel of experts, chaired by former Finnish Prime Minister Esko Aho, to explore how the effectiveness of the EU's research spending could be improved in order to strengthen Europe's competitiveness.

Esko Aho today handed the independent panel's final report over to Viviane Reding, EU Commissioner for Information Society and Media.

"In recent years Europe's Information Society research has delivered encouraging results from mobile communications to Electronic Stability Control systems in motor cars. However, I believe a systemic change in the EU's research policy is needed to avoid that EU research spending is not more than a mere drop in the ocean," said Esko Aho, chairman of the expert panel. "I call on the EU Member States and on the European Parliament to equip the EU with the right, flexible tools to better focus European high-tech research and to open it up to more risk and to new international partners."

"The Aho Report should be a wake-up call for all policy makers responsible for economic policy, research and budgetary rules," said Information Society Commissioner Viviane Reding in a first reaction to the report. "The €4 billion spent on high-tech research is a considerable amount of taxpayer's money. However, Europe does not get the most out of it in terms of growth, jobs and innovation. The Aho Report has rightly concluded that the effectiveness of Europe's high-tech research is too often stifled by red tape, a lack of venture capital and a risk-averse mentality in both national and European administrations. I thank Esko Aho and his distinguished panel for having used plain English to highlight these shortcomings."

As regards the required follow-up to the Aho Report, Commissioner Reding concluded: "The consequences to be drawn from the Aho Report will have to be discussed intensely by the Council of Ministers, the European Parliament and also the European Commission itself as a matter of priority under the forthcoming French Presidency. In this debate, nothing should be a taboo. I will not be satisfied by empty promises when what we need is a strong shared will to reform the system of EU research. One measure for the Commission to explore is to centralise and focus EU research in one department. We should also better exploit public-private partnerships allowing for more flexibility under the EU's rules. I will address these issues in a Communication to the European Parliament and the Council in autumn this year. European competitiveness within a rapidly changing world economy is at stake, so we have no time to lose."

The "Aho Panel" included the following independent experts:

• Mr. Esko Aho (Chairman) - former Prime Minister of Finland and President of the Finnish National Fund for Research and Development (Sitra)
• Mr. Michel Cosnard - Professor at the Polytechnic School of the University of Nice-Sophia Antipolis, Chairman and CEO of INRIA (Institut National de Recherche en Informatique et en Automatique)
• Mr. Hans-Olaf Henkel - Professor at the University of Mannheim and former CEO of IBM Europe, Middle East and Africa as well as former President of the Federation of German Industries
• Mr. Luc Soete - Director of UNU-MERIT (the United Nations University – Maastricht Economic and social Research and training centre on Innovation and Technology)
• Mrs. Nicoletta Stame - Professor, Social Policy, University of Rome “La Sapienza” and Co-founder and first president of AIV (Italian Evaluation Association)

- Mr. Pavel Telička – former EU Commissioner (Health and Consumer Protection), Cofounder of BXL Consulting and Senior Advisor, European Policy Centre.

The full text of the "Aho Report" on the Effectiveness of Information Society Research in the EU's 6th Framework Programme 2003-2006 is available at:

http://ec.europa.eu/dgs/information_society/evaluation/rtd/fp6_ist_expost/index_en.htm

The 23 Recommendations of the "Aho Report":

1. It is recommended that efforts are made to continue to consolidate public-private partnerships of a more permanent nature, such as Joint Technology Initiatives (JTIs) from the 7th Framework Programme.

2. It is recommended to continue the effort to ensure that support for SMEs and for large firms is not “compartmentalised” into different measures or tools.

3. A platform should be created within the scope of the 7^th Framework Programme for new and high-growth companies to meet venture capital investors.

4. Encourage participation from outside Europe in all projects. Participation from both developing and industrialised non-European countries should be promoted.

5. Internationalise the advisory system – e.g. the IST Advisory Group – by including top scientists and engineers from around the world

6. Reflect the latest international developments and challenges in the work programme. A more flexible approach may be needed to integrate new, interesting developments in the field faster.

7. Focus the research effort on creating and sustaining world leadership where Europe already has a comparative advantage and where Europe has a new opportunity to take the lead. Europe should be selective and not attempt to become a world leader in every area

8. The eInfrastructures approach should be expanded to more application-oriented and user-oriented platforms in other sectors.

9. The Panel recommends that accounting control in JTIs is carried out by Member States and participating companies, with a minimum of intervention at the Community level.

1. The Panel strongly recommends developing a more trust-based approach towards participants at all stages. The existence of a few unfortunate examples should not be allowed to stand in the way of innovation. Specific elements in the development of such an approach are detailed below.
2. To require shorter proposals with fewer details of work packages and a focus on the appropriateness of partnerships in particular the inclusion of highly innovative participants.
3. That more complete and helpful feedback is made available to proposers whose ideas are not funded.
4. To test a new approach whereby proposals are not fully evaluated initially. All applications passing a few basic checks should be given a small amount of "seed funding" for an exploratory phase. After this, exploratory projects with successful results would be selected for full project funding.
5. Financing projects based on actual performance rather than promises and reputation could both reduce the initial paperwork and be a viable way of attracting innovative (small) companies which would not otherwise consider applying for Community funding.
6. To explore expanding the two-step evaluation procedure from the Open part of the "future and emerging technology" area to other parts of the programme – prospective participants first provide a broad outline of their project idea, and only provide a more refined plan once they are selected. This may increase the workload for the Commission in the early phases, and lengthen the evaluation process, but it will significantly reduce the burden on the research community of preparing proposals.
7. To optimise reporting, which is time-consuming and may be untimely, and allow the participants to report when there is something to report.
8. To allow the refocusing of the research on different priorities if this becomes necessary during implementation.
9. Similarly, to allow more flexibility in the composition of partnerships during the project, including the possibility of changing partners if the research takes a direction which would benefit from new partners or replacement of partners.
10. The Panel recommends a more strategic use of standardisation to create new EU-wide markets. Standard-setting is needed as a tool for pulling through innovations and creating viable markets for new products and services.
11. The Panel welcomes the recent Commission Communication on pre-commercial procurement, and recommends that new initiatives are taken to allow public authorities to procure the development of innovative goods and services.
12. The European single market needs to be made more effective for business angels and venture capitalists, and European investment funds need to be more effectively utilised to pull through innovations from the Framework Programmes.
13. A more strategic approach to standardisation at the European level, when this cannot be left to market forces, focused on interoperability and development of standards where there is a well-documented need for coherent innovative services and European leadership, will be in the broader public interest.
14. The interconnection of large regional and national eInfrastructures should be further developed. EU-wide platforms and infrastructures are needed in sectors such as eGovernment (especially procurement), eHealth (cross-border applications), logistics and transport. Framework RTD should be complemented by other measures, in particular public procurement at both national and European