Brussels, 26 June 2012
Key Enabling Technologies – A bridge to growth and jobs
Europe is a global leader in the development of Key Enabling Technologies (KETs) and it has all that is necessary to remain in this position. The EU holds a strong competitive advantage: it is the only region to master all six KETs (micro-/nanoelectronics, nanotechnology, photonics, advanced materials, industrial biotechnology, advanced manufacturing technologies). Over the years, Europe's strong R&D base has championed all six KETs, maintaining a leading position with 32 % of the global patent applications between 1991 and 2008.1 However, despite these strengths, the EU is not capitalising on its knowledge base: the EU’s major weakness lies in translating its knowledge base into goods and services and EU patents are, more and more, exploited outside the EU.
The urgency to act quickly is further demonstrated by recent developments in the machine tool industry, one of the key KETs application sectors: the European share in global production dropped from 44% in 2008 to 33% in 2010, to the advantage of Asian competitors, namely China (including Taiwan) and Korea.2 This lack of KETs-related manufacturing is all the more detrimental to the EU for two reasons. Firstly, in the short term, opportunities for growth and job creation will be missed; secondly, in the long term, there may also be a loss of knowledge generation, because R&D and manufacturing are intrinsically linked, mutually reinforcing and, thus, often take place in close proximity to each other.
Therefore the European Commission has published an action plan to promote Key Enabling Technologies. The European strategy for Key Enabling Technologies – A bridge to growth and jobs outlines a strategy and concrete steps aiming to four main objectives:
focus EU policy and adapt their instruments in the next multi-annual financial framework on research and innovation, cohesion policy, and prioritise EIB lending activities in favour of KETs deployment;
ensure coordination of EU and national activities so as to achieve synergies and complementarities between those activities and the pooling of resources where necessary;
establish simple and effective governance structures, notably a coordination group within the Commission, and an external advisory KETs Issues Group which will ensure smooth implementation of the KETs policy and exploitation of synergies at the different levels.
mobilise existing trade instruments to ensure fair competition and a level international playing field.
1. KETs research and innovation financing – an integrated approach
The Commission KETs strategy will streamline existing and upcoming EU policies and put them into a cohesive framework that will ensure an adequate focus on the third industrial revolution. This will translate in focusing the EU policies in the next multi-annual financial framework on research and innovation, cohesion policy, State-aids and prioritise EIB lending activities in favour of KETs deployment. Some actions already started within the FP7. The Commission is planning the following actions:
Promoting research on KETs
Allocate € 6.7 bn in industrial capabilities on KETs in Horizon 2020. This comprises support for pilot lines and demonstrator projects, including those of larger scale, for achieving technology and product validation under industrial conditions and more integration and cross-fertilisation between the six KETs. There will be a particular focus to address societal challenges.
Establish and implement a multi-annual work-programme for projects implementing simultaneously several KETs in coordination with other relevant programmes.
Implement innovation-oriented public-private partnerships (PPPs) for those KETs where the necessary conditions specified in Horizon 2020 are in place.
Cohesion Policy to support KETs
Promote KETs-related cluster-specific actions in KETs-related domains (training of cluster managers, visits, matchmaking events).
Launch a study on national KETs policies to promote the exchange of good practices in this area.
Member States and regions are also invited to do their part by exploiting research and innovation strategies for smart specialisation to support spill-over effects of KETs-based solutions, strengthening existing and possibly developing new European industrial value chains.
Member States should make also use of INTERREG and other Structural Fund programmes to exploit complementarities between regional smart specialisation strategies and support spill-over effects of KETs-based solutions, strengthening existing and possibly developing new European industrial value chains through transnational and multi-disciplinary cooperation.
European Investment Bank to finance KETs
Work out an agreement with the European Investment Bank (EIB), which:
will define KETs as a mutual priority area to ensure that vital lending is provided to eligible private-sector investments in product demonstration and first production projects promoting KETs.
continue with the EIB its vital R&D&I support to KETs projects, and provide additional resources via the new SME risk-sharing instrument (RSI) for the next financing period.
State aid to trigger investments in KETS without impaction on competition
The Commission recalls in this strategy its intention to modernise State aid rules. They should facilitate the treatment of State aid which is well-designed, targeted at proven market failures and has a clear incentive effect and limited impact on competition.
2. Europe to play a relevant role in a globally competitive market
The Commission will strive to ensure a favourable trade environment and a global level playing field. This includes:
the facilitation of market access and investment opportunities;
avoiding international market distortion;
improving IPR (Intellectual Property Rights) protection;
promoting reciprocity notably in public procurement;
reducing the use of subsidies and tariff; and
non-tariff barriers at global level and verifying compliance with applicable EU and WTO rules.
The Commission will further promote cooperation with third countries in the area of KETs based on mutual benefits.
3. Appropriate skills to ensure future of KETS in Europe
The shortage of sufficient skilled labour and entrepreneurs capable of handling the highly multi-disciplinary nature of KETs remains a major problem in the EU. In the area of e-skills, for example, the level of computer science graduates is declining while up to 700.000 ICT practitioners will be needed to fill vacancies in the EU by the year 2015 (IP/12/259 e-Skills week 2012: There is a job waiting for you).
The Commission will, under Horizon 2020, continue and reinforce actions to attract youngsters to KETs and include training activities aimed at improving skills in KETs product demonstration projects also by:
encouraging the establishment by the European Institute of Innovation and Technology (EIT) of a Knowledge and Innovation Community (KIC) on added-value manufacturing that would integrate business, research and higher education in this field and, inter alia, allow for targeted skills development and related education and innovation activities;
publishing a Communication which will address the changing and rapidly evolving challenges for skills supply in the EU by the end of 2012;
developing partnerships between education and business such as Knowledge Alliances for Higher Education in order to foster innovation and allow for more targeted curricula with regard to market needs including KETs; and
looking at ways to increase the supply of skilled labour in KETs-related areas, including through highly skilled talent from outside the EU.
4. Monitoring mechanism ensures dynamic KETS development at EU level
The Commission will launch a monitoring mechanism on KETs in 2013, which will provide relevant market data on the supply of and demand for KETs in the EU and other regions; and make the results of the monitoring mechanism publicly available on a dedicated website.
KETs potentials in the fields of jobs and societal challenges
KETs provide indispensable technologies enabling a wide range of product applications, including those required for:
developing low carbon energy technologies,
improving energy and resource efficiency,
boosting the fight against climate change, or
allowing for healthy ageing.
KETs feed into many different industrial value chains and sectors in heterogeneous ways. They create value along the whole chain – from materials through equipment and devices, to products and services. KETs will catalyse the strengthening and modernising of the industrial base as well as drive the development of entirely new industries in the coming years.
Small and medium enterprises (SMEs) are expected to account for the majority of future jobs. For example, in the photonic sector the bulk of the 5,000 European companies are SMEs. In Germany, about 80% of the nanotechnology companies are SMEs. In nanotechnology alone, employment estimates show that in 2008 there were 160 000 workers globally. This represents a 25% increase from 2000. The expected growth for nano-related jobs is forecast to be up to 400 000 by 2015 in Europe, mainly in SMEs. The micro- and nanoelectronics industry and its natural downstream ICT industries created more than 700 000 additional jobs during the last decade in Europe, showing a trend towards more service-oriented and highly skilled jobs and rapid recovery after the crisis. Industrial biotechnology has been recognised as the driving KET for the bioeconomy.
Defining Key Enabling Technologies (KETs)
The Commission defines KETs as ‘knowledge intensive and associated with high R&D intensity, rapid innovation cycles, high capital expenditure and highly skilled employment. They enable process, goods and service innovation throughout the economy and are of systemic relevance. They are multidisciplinary, cutting across many technology areas with a trend towards convergence and integration. KETs can assist technology leaders in other fields to capitalise on their research efforts’.3
Based on current research, economic analyses of market trends and their contribution to solving societal challenges, micro-/nanoelectronics, nanotechnology, photonics, advanced materials, industrial biotechnology, advanced manufacturing technologies, have been identified as the six EU's KETs.
Definition of a KETs-based product
A KETs-based product is:
an enabling product for the development of goods and services enhancing their overall commercial and social value;
induced by constituent parts that are based on nanotechnology, micro/nanoelectronics, industrial biotechnology, advanced materials and/or photonics; and, but not limited to
produced by advanced manufacturing technologies.