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Janez Potočnik European Commissioner for Science and Research Innovation: Building a Successful Future for Europe Launch of BusinessEurope paper - European Research Policy and Programmes and their Relevance to Innovation Brussels, 12 October 2009

European Commission - SPEECH/09/465   12/10/2009

Other available languages: none

SPEECH/0 9/465

Janez P otočnik

European Commissioner for Science and Research

Innovation: Building a Successful Future for Europe

Figures and graphics available in PDF and WORD PROCESSED


Launch of BusinessEurope paper - European Research Policy and Programmes and their Relevance to Innovation

Brussels, 12 October 2009

Ladies and Gentlemen,

BusinessEurope has shown an excellent sense of timing with the publication of this new paper. It's an expression of the need to reinvigorate our research and innovation strategies. And it is timely, because EU research policy is approaching a crossroads.

The coming months will see the adoption of a European Innovation Plan, much discussion on the coming mid-term evaluation of the Seventh Framework Programme and the future of Framework Programmes in general, a new Commission, and debate on the EU's future budgetary arrangements.

The paper underlines the need for a more integrated approach to research and innovation and to develop supply-side and demand-side policies in a complementary manner. It makes a forceful case for coherence between the "knowledge triangle" policies of research, education and innovation.

This coherency is necessary and we need to strengthen cooperation at a European level if we want to address the challenges that we are facing in today's dramatically changing world. A world that is more interconnected and more interdependent, a world that is facing challenges of climate change, security of energy, food and water supply, potential pandemics, aging societies, ..just to name a few. We need a strong Europe, a Europe in which all actors - politicians, industry, scientist and broader society work together to tackle these challenges. This is a new, additional Raison d'être for strengthening cooperation in the European Union, a Union that has brought us peace, stability, security and a promise of prosperity in the last 6 decades.

But we also need to consider the global economic crisis. It has taught us quiet dramatically how important sustainability is for us – not only sustainability of environment, food, energy and water supply – but also sustainability of profits and financial markets. And we need to find global solutions to these problems.

I firmly believe in the importance of knowledge, technology and innovation in dealing with these huge, societal challenges.

The BusinessEurope paper clearly recognizes the importance of research and knowledge. But we need to be better - we need to do more, with less. We need to make our European Research landscape more effective and that is why I appreciate the recommendation to develop an effective governance system for ERA, the European Research Area. ERA stands for the free movement of researchers, technology and knowledge, called the "Fifth Freedom", in recognition of its power to boost the European economy in much the same way as the free movement of people, capital, goods and services have done. This is a matter close to my heart, and to that of the Competitiveness Council. Under the Swedish Presidency, it has put two issues firmly at the top of the agenda:

  • better links between the different elements of the knowledge triangle;

  • better governance of the ERA.

It seems then that BusinessEurope knows where the pressure-points are with regard to European research and innovation.

And it would be fair to say that research policy is truly at a crossroads.

Despite some progress and a lot of effort, the overall European research effort seems to have levelled off at around 1.84% of EU GDP. Our latest data show that this average figure hides great differences. Despite a general effort from the less well-performing countries — mostly the new member states — to approach the 3% of GDP target, variations between countries remain significant. At the same time, US investment in the field stands at 2.61%, even though it is stagnating, and Japan's investment is at 3.2%. Then of course there is China and other developing countries — who are fast approaching these figures.

There have been many attempts to explain it. It seems, however, that the answer is pretty simple: it is largely the result of too low private investment. European high-tech industries do not play as big a part in our industrial structures as in those of for instance the US or Japan. The intensity of R&D investment within industrial sectors is also generally lower in Europe than, for example, in the US.

Investing in research is of course one way forward. And we continually call on European governments to do just that – in particular in times of crisis. And there are positive signs. A recent Commission's survey has shown, that in 2009, 23 of them are increasing or maintaining their public investment in research.

This is good news and endorses our calls to invest in research to counter the economic crisis, and to emerge stronger out of it. Historical evidence shows that keeping or even increasing R&D investments in times of crisis is the right thing to do – both for the public and for the private sector. Finland, Japan and the US are examples from the past – and also the iPod and fuel-efficient air-craft engines were developed in times of crisis. But of course, I realise that the situation can change if the pressure on public finance increases further in the next years.

To support public and private sector's efforts, we also need to actively create the framework conditions for research and innovation, the roadmap for which is laid out in the EU's Lisbon Strategy.

It's a tall order, but it is worth it. A properly functioning research and innovation ecosystem is something I've made a priority and I am not alone. Just look at the policies of the countries that are leading in the innovation stakes. For them, r esearch policy remains of fundamental importance, as the European Innovation Scoreboard demonstrates. For the 'innovation leaders' countries, the top three policy priorities are all related to research, and by this, I mean:

  • R&D cooperation;

  • Getting strategic research agendas ri ght, and

  • Excellence and management of research.

Against this, it seems to me, and this is echoed in your paper, that we have to 'supersize' our research policies. We need them to be bolder , better and bigger:

  • Bolder , there is a growing consensus for a much stronger focus on societal challenges, tackled in close cooperation of all players – Commission, Member States, industry and research community.

  • Better , our policy making, at all levels, needs to be more efficient and more effective.

  • Bigger , which refers to the fact that increased investment in research is necessary to answer the major societal challenges.

To respond to the call for bold ness, we have launched a new initiative to encourage large scale cooperation between Member States - "Joint Programming". It very much follows the concept of European Technology Platforms and brings together Member States to develop visions and strategic research agendas on how to tackle societal challenges in such areas as energy, health and ageing. Challenges that are beyond the scope of any one country to tackle effectively on its own. Member States, supported by the Commission, are in the process of discussing proposals and identifying the most mature and relevant ones. In the meantime, many countries are paving the way by preparing a pilot initiative on neurodegenerative diseases, particularly Alzheimer's.

A number of initiatives have been taken to make our R&D policies and programmes better and more efficient:

  • We are creating a European single market for research and technology, attractive to the outside world and which will facilitate real research cooperation and coordination in a spirit of 'open innovation'. To realise the fifth freedom, we have launched initiatives to enhance the career prospects and mobility of researchers, increase knowledge transfer between public research organisations and industry; and a strategic framework for international cooperation in science and technology.

  • Our new European Research Council nurtures and promotes excellence in research also at European level by creating competition between individual scientists for the funding of frontier research. The knowledge they create will in the end lead to new technologies and innovations and provides the basis for competitive industries.

  • We are taking a close look at the EU rulebook for funding of research and innovation. The system that governs the current 7th Framework Programme is a real product of its times and is beginning to show its age. It needs a rational rethink with "simplification" as a top priority.

We have concentrated funding into bigger, large scale programmes, in particular with a view of encouraging and leveraging private investment

  • One of the major innovation of FP7 has been the launch of a number of Joint Technology Initiatives, JTIs for short. They have emerged from strategic research agendas of several European Technology Platforms. We launched these JTIs to help respond to the needs of industry for a more strategic approach to technology development. They cover innovative medicines (IMI), aeronautics (CleanSky), nanoelectronics (ENIAC), embedded computing systems (ARTEMIS) and fuel cells and hydrogen (FCH). As you'll recall, JTIs are 50:50 public-private partnerships and this is reflected in their budgets, which range from €1 billion to €3 billion.

  • We've launched three new public-private partnerships for research in the areas of Energy-Efficient Buildings, where a budget of €1 billion is foreseen; Factories of the Future (with a focus on sustainable manufacturing) with a budget of €1.2 billion; and Green Cars, where a research budget of €1 billion is accompanied by €4 billion of loans.

  • We have stimulated private sector investment into R&D and innovation through the Risk-Sharing Finance Facility, f inanced jointly by FP7 and the European Investment Bank. The objective is to help innovation project get access to loans. It has been created for European research-intensive entities, including SMEs and research infrastructures. Many sectors have already received loans: energy, ICT, life sciences and automotive companies. In total, 45 RSFF operations have been approved so far and the value of signed loans has reached €2.1 billion by the middle of this year.

These JTIs and PPPs could contribute to an industrial policy implemented at European level. Besides these direct research funding instruments, one could of course explore other ones such as public procurement of research and innovation – an instrument that has been used very successfully in the US.

I'm talking broadly of course, and scientific research as such is only part of the picture. Much more challenging is the question of how to create a genuinely European industrial and technology policy.

We have in recent years tried new ways of stimulating the demand side for innovations, because we know that Europe is not as good as it's competitors when it comes to the take-up and application of the technologies we invent. This is where the Lead Market Initiative, LMI, comes into play.

  • The initial phase of the LMI targets six markets for innovative goods and services: sustainable construction, protective textiles, renewable energy, recycling, bio-based products, and e-health. We want to build and strengthen our leadership in these markets through better regulation, standardisation and public procurement.

The Commission has assessed recent EU and national policies supporting innovation and by next Spring, it intends to come up with a 'European Act for Innovation'. This will propose policies for the medium to long-term and will be part of our exit strategy from the current crisis.

Ladies and gentleman:

I must admit that papers do not normally excite me! However, the one that BusinessEurope presented today is different… coming as it does at a time when research and innovation in Europe could head forward into a better-planned, more coordinated future, or find itself stalled in a dead end street.

BusinessEurope's report is therefore a very welcome intervention in the context of the preparation of the post-2010 EU policy strategy, the review of ERA governance, and the preparation of future EU innovation policy. It will help us all to improve our understanding of what a comprehensive research and innovation policy in Europe should look like.

Thank you for your attention.


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