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MEMO/11/872

Brussels, 5 December 2011

State of the Innovation Union – Progress report issued by the European Commission

The European Commission has issued a comprehensive progress report on the Innovation Union, a flagship initiative under the Europe 2020 growth strategy for the decade. The report comes after the recent celebration of the first anniversary of the Innovation Union. A brief summary on the text follows below.

Turning Europe into a true Innovation Union

The Innovation Union is one of the seven flagship initiatives of the Europe 2020 strategy for a smart, sustainable and inclusive economy. Launched by the European Commission in October 2010, it aims to improve conditions and access to finance for research and innovation in Europe, to ensure that innovative ideas can be turned into products and services that create growth and jobs. Two key messages are identified at the report:

  • Innovation is our best mean to help put the European economy back on track and tackle societal challenges such as climate change, health and ageing.

  • Achieving the Innovation Union objectives, our innovation imperative, has become even more important and urgent, and good progress has been achieved in 2011.

Where are we with the Innovation Union?

Good progress has been made in launching and implementing 30 out of the 34 Innovation Union commitments. Notably, by the end of 2011, based on wide stakeholder consultations, the Commission will have put forward all the six legislative proposals announced in the Innovation Union. These proposals will bring a step change in framework conditions for innovation in Europe.

Although many milestones have been reached already, much is still to be done. In particular, the report highlights that efforts need to be stepped up at national level to prioritise investments in research and innovation and to set aside dedicated budgets for public procurement of innovative products and services to drive demand for innovative solutions. The Commission will also step up efforts to issue eco-innovation action plan and screen the regulatory framework in key areas.

Why should we invest in research and innovation when Europe is going through the deepest crisis since decades?

We need to innovate to get Europe back on the path to growth and jobs. Europe is going through very tough times. The economic recovery has come to a stall and public confidence has deteriorated. The pressure to cut investments in future sources of economic growth is huge.

In times of austerity fiscal consolidation is a necessity. However, to come out stronger from the current crisis, the fiscal consolidation needs to be “smart” in order not to jeopardise future growth. “Smart” means preserving and reinforcing investments in education, research and innovation, sources of our future growth, while increasing efficiency and carrying out structural reforms.

This is of crucial importance in the context of increased competition. The global quest for knowledge is intensifying. According to the Innovation Union scoreboard (IP/11/114) and the Innovation Union Competitiveness report (IP/11/692) published in 2011, Europe is not closing the innovation gap with the innovation leaders, US and Japan. Furthermore, China, India and Brazil are rapidly catching up

The 2011 State of the Innovation Union shows that strong commitment to research and innovation, combined with an innovation-friendly business environment, is a very effective way to pull Europe out of the crisis. Those countries that traditionally invest more in research and innovation have done relatively well recently and weathered the economic crisis better. Investments in research and innovation increase the chances to smooth the adverse impact of the crisis while offering the tools to bounce back quicker when recovery takes place. It also requires a combined set of policies influencing the overall framework conditions for innovation and the sound functioning of product markets.

What has been done in 2011 to help Europe innovate?

Horizon 2020 - more and better funding for research and innovation

The Commission has proposed to increase investments in research, innovation and education in support of the EU's pro-growth agenda. Horizon 2020 (link to IP/11/1475), the new €80 billion investment programme for research and innovation brings together all existing EU research and innovation funding and provides support in a seamless way from idea to market, through streamlined funding instruments and simpler programme architecture and rules for participation.

Horizon 2020 enacts many of the specific Innovation Union commitments, notably by: focusing on societal challenges, simplifying access, involving SMEs, strengthening financial instruments, supporting public procurement of innovation, facilitating collaboration, and supporting research on public sector and social innovation.

Furthermore, the future Cohesion policy will have an increased focus on research and innovation. In more developed regions, at least 80% of resources from European Regional Development Fund at national level will be allocated to innovation together with the priorities on low-carbon economy and competitive SMEs. This amount will be 50% in less developed regions. In line with a more strategic focus, the support will be conditional on the existence of a national or regional strategy for smart specialisation.

In addition, the proposed COSME Programme (Programme for the Competitiveness of Enterprises and SMEs, IP/11/1476) will focus on financial instruments and support to the internationalisation of enterprises. The Programme is expected to assist yearly 39 000 firms, helping them create or save 29 500 jobs and launch 900 new business products, services or processes, yearly.

Working in partnership to address societal challenges

The Commission has piloted the first European Innovation Partnership in the area of Active and Healthy Ageing. Innovation Partnership is a novel concept to speed up innovations addressing a well-defined target within a specific societal challenge. It provides a platform mobilising actors across policy areas, sectors and borders to commit and contribute to supply and demand side measures across the research and innovation cycle. The pilot partnership aims to add two healthy years to our average lifespan. The Strategic Implementation Plan of the pilot partnership was presented in November 2011. The experience gained in setting up this pilot will pave the way for other partnerships.

Getting good ideas to the market

There has been good track record on putting in place the conditions that will smooth the path from idea to market and boost private investments in research and innovation.

In April, the Commission has tabled legislative proposals for unitary patent protection which will reduce costs of patents in Europe by up to 80%. In June, the Commission presented a standardisation package aiming to modernise European standard-setting in the face of present and future challenges. The target is to speed up standard-setting processes by 50 % by 2020.

In December 2011, the Commission will present the two other proposals. The first one will propose a new regime for venture capital funds so that they can easily raise capital across Europe. The second proposal will modernise the EU public procurement legislation, including concrete measures to facilitate innovation.

The Commission has also investigated options to enhance exploitation of intellectual property rights and will discuss in 2012 the way forward.

Delivering the European Research Area

With the European Council conclusions of 4 February 2011, Member States are clearly committed to completing the European Research Area by 2014. During autumn 2011, the Commission carried out a wide-ranging public consultation on the remaining obstacles to be removed to complete the European Research Area. In 2012, the Commission will propose an ERA Framework that would create a highly efficient and integrated research system in Europe.

Promoting the European Institute of Innovation and Technology as a model of innovation governance in Europe

To better integrate the innovation cycle, the European Institute of Innovation and Technology (EIT) brings together higher education institutions, research organisations and businesses in new types of partnerships — Knowledge and Innovation Communities (KICs) —operating in the areas of sustainable energy (KIC InnoEnergy), climate change adaptation and mitigation (Climate-KIC) and future information and communication society (EIT ICT Labs).

On 30 November, the Commission adopted a proposal for the EIT's 'Strategic Innovation Agenda' which defines the framework for the Institute's operations in the years to come. It focuses on consolidating the three existing KICs and gradually setting up new ones, which will address major societal challenges in line with the Horizon 2020 objectives.

…and much more

Key milestones have been reached on many other Innovation Union commitments. For example, the Social Innovation Europe initiative was launched in March and a Smart Specialisation Platform was released in June. A European Design Leadership Board has been set up. A pilot project for Knowledge Alliances between business and academia has been launched. The European Commission has also piloted an EU-level support for public procurers.

What are the next steps in 2012?

Next year, the Commission will continue delivering on the Innovation Union actions, notably by presenting the two remaining Innovation Union initiatives scheduled for 2012: the proposal for the European Research Area Framework and the new innovation headline indicator.

In tandem with the innovation policy measures under way, the Commission will review the current approaches to innovation in other EU policies and propose strategies to mainstream innovation into all EU policies.

Background

The State of the Innovation Union 2011 provides information on progress achieved in implementing the 34 commitments of the Innovation Union. The details on the state of play of each commitment can be consulted through the Innovation Union Information and Intelligence System (I3S) accessible at http://i3s.ec.europa.eu.

For more information:

Report State of the Innovation Union 2011

Innovation Union Information and Intelligence System (I3S):

http://i3s.ec.europa.eu

Innovation Union website:

http://ec.europa.eu/research/innovation-union


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