1. K. Lautso 14.12.2006 1 K. Lautso: Research and Development – effectiveness through international co-operation Financing for Research and Development EIB EFCA Seminar Brussels14.12.2006

2. K. Lautso 14.12.2006 2 Structure n Background n The Consultants’ role in publicly funded R&D n FP 7 – an opportunity n FP 7 – improved conditions n Problems (1) – co-ordination n Problems (2) – societal nature of research problems n Problems (3) – National co-funding n What is the added value for public co-funders in funding international research? n What is the added value for research(ers) n Conclusions

3. K. Lautso 14.12.2006 3 Background n WSP LT Consultants is a Finnish consultancy specialised in transport, environment and infrastructure research, planning and design. 125 employees. Part of WSP Group since 2002. n More than 20 EC funded research projects as co-ordinator or partner since 1994 for –DG TREN –DG Research –JRC –IEE –ECA n Success rate 25-67%, average 37%

4. K. Lautso 14.12.2006 4

5. K. Lautso 14.12.2006 5 The Consultants’ role in publicly funded R&D n The driving force for participation: research needs emerge from everyday consultancy work - research results produce added value to everyday commercial projects n Resources for self-financed own R&D are small => interest for publicly funded research exists although the research does not fully respond to own research needs

6. K. Lautso 14.12.2006 6 FP 7 – an opportunity n FP 7 2007 – 2013 n Total EC funding (in EUR million) 50521* out of which of special interest to EFCA members: out of which of special interest to EFCA members: ICT9110 Energy2300 Environment1900 Transport4180 Total17490 ~ 2500/a * Council’s agreement of July 2006 n Comparisons: –Total R&D in EU-25: 200 billion/a (Japan, China 100, USA 250) –The Finnish GNP share of EC transport research funding would be 6M€/a, the MINTC’s R&D budget is 7-9 M€/a

7. K. Lautso 14.12.2006 7 FP 7 – Improved conditions n EIB participation ( Risk-sharing Finance Facility) n More power to the co-ordinator n Better conditions for SMEs n Improved bureaucracy n Overall: Payment, quarantee, IPR etc. conditions are fair

8. K. Lautso 14.12.2006 8 Problems (1) – co-ordination n Most of the costs of preparing the proposal are on the co- ordinator n Management activities do not add to the substance knowledge n The tools of the co-ordinator in problem situations are weak but responsibilities are heavy n Management of big consortia, together with many formal requirements, becomes extremely difficult n Result (1): Lack of interest for co-ordination activities n Result (2): Together with the overhead calculation rules EC funded research may turn out to be a non-competitive alternative for some research organisations - the best resources are not attracted. This is not beneficial for the funding agencies nor for the European Research Strategy.

9. K. Lautso 14.12.2006 9 Problems (2) – societal nature of research problems n Results of societal research problems, such as –policy research –environmental issues –etc. are difficult to commercialise n The problem owner and the end user of these results is society n It should not be assumed that individual companies would co- finance this type of research, although they are in excellent position to do the research n => public funding is needed to cover 100% of the costs

10. K. Lautso 14.12.2006 10 Problems (3) – National funding n Difficult to have firm funding commitments from national authorities in advance or at all n Problem for all parties: Out of ten negotiated projects only three are successful => Clear indication, well in advance, on what projects could be nationally funded is essential and needed

11. K. Lautso 14.12.2006 11 What is the added value for public organisations in funding EC research? n Benefit = VR x E x RN, where VR= Volume of Research (€) E = Efficiency factor E = Efficiency factor RN= Response to the specified research need n Case (1), nationally funded research; Case (2), EC co-funded research n VR(1) = 1,0 VR(2) = 6 x 2 =12 (6 partners, 50% EC funding) E(1) = 1,0 E(2) = 0,8 RN(1) = 1,0 RN(2) = 0,4 n Benefit(1)=1.0 Benefit(2)=4,0 Benefit(1)=Benefit(2) if RN = 0,1 RN can and should be affected by public organiasations n Quality(2)>Quality(1)

12. K. Lautso 14.12.2006 12 What is the added value for public organisations in funding EC research? n scale: research that would be impossible to be funded on national basis is made possible through international co-operation and funding n Overlapping work avoided n Multidisciplinary approaches and mix of cultures are more likely to lead to new approaches and innovative results

13. K. Lautso 14.12.2006 13 What is the added value for research(ers) n Multidisciplinary approaches and mix of cultures are more likely to lead to new approaches and innovative results n Long programmes improve the security and possibilities for specialisation for the researchers n Somewhat flexible base work load smoothens the overall load n transfer of methods and tools, benchmarking, networks

14. K. Lautso 14.12.2006 14 Conclusions n There is a clear interest for consultants to participate in publicly funded R&D programmes for several reasons (change of knowledge, methodologies networks etc.) n Because of the vicinity of (needs for) practical applications the consultants are in a good position to do the R&D work efficiently n The major problem is in finding national co-funding in international projects n Funding international R&D projects may offer national co- funding organisations remarkable potential benefits and more efficient use of public money than investing the same money in national R&D projects

15. K. Lautso 14.12.2006 15 Thank you for your attention!