Presentation to Joint Meeting of the Competitiveness and Growth and the Research Working Parties Cyril Robin-Champigneul Dg RTD 8 October 2010 Keith Sequeira Dg ENTR

Why Innovation Union? A cornerstone of Europe 2020 strategy Three aspects: -Globalisation of knowledge production and innovation capacities -Impact of the crisis on public and private finance, survival of innovative SMEs -Major challenges to address with reduced means  Innovation emergency!

Declining EU share of knowledge production Evolution of World R&D expenditure in real terms, PPS€ at 2000 prices and exchange rates, EU-27 US Japan ROW PPS€2000 (billions) Stagnating business R&D Average annual growth as % of GDP, EU-27, US, Japan, South Korea & China, Globalisation of knowledge SANCHES Luisa (REGIO) US

Economic and financial crisis EU lost six million jobs, €1000 Bn annual GDP due to crisis  Invest in future growth EU target of 3% of GDP for R&D in 2020 could create a net 3.7 million jobs and close to €800 Bn annual GDP by 2025  Make the most of available resources through leverage effects, integration and cooperation

Societal challenges Climate change Health and ageing Use of natural resources Energy security Clean transport Land use …. Powerful drivers of change in economy and society Major global market opportunities Requiring EU-scale approaches From research to market New needs  new ideas  new markets

What is Innovation Union? Strategic approach Partnership with Member States From idea to market Tackling weaknesses Under-investment Fragmentation Framework conditions Building on strengths Focus on societal challenges Broad concept of innovation Involving all actors Highlights European Innovation Partnerships European Research Area framework Streamlined EU programmes New financial instruments Reform of standardisation system Public procurement of innovation Social innovation pilot Stronger monitoring Innovation Convention  A distinctive European approach to innovation

Strengthening the knowledge base Getting good ideas to market Maximising social and regional benefits Collaborating internationally Key measures of Innovation Union Pooling efforts for breakthroughs

Excellence in education and skills Issues Universities need reform to specialise/diversify and attract top talents EU needs at least one million more researchers to reach its R&D targets Education & training should better match business needs Actions 1. National strategies to boost training and careers of researchers (2011) 2. Independent multidimensional university ranking system and launch of business-education « knowledge alliances » (2011) 3. Commission to promote e-skills for innovation (2011)

Delivering the European Research Area Issues Costly fragmentation and overlaps between national research and innovation systems Need for a unified European Research Area where all actors move and operate as easily as within national borders Complex funding landscape creating administrative burden for researchers and business Urgent need for world-class research infrastructures Actions 4. Commission to propose a European Research Area framework (2012) to remove obstacles to mobility and cross-border cooperation by EU and Member States to complete or launch 60% of priority European research infrastructures by 2015.

Focusing EU funding instruments Issues Need to support the whole innovation chain, from research to market Further simplify access for beneficiaries, including SMEs Develop scientific evidence to support policy-making Promote the European Institute of Innovation & Technology Actions 6. Focus future EU R&I programmes on EU2020 and Innovation Union: societal challenges, with streamlining/ simplification (2014) 7. Ensure strong involvement of SMEs with high growth potential (2014) 8. Develop the Joint Research Centre’s role to support the science base for policy making through forward-looking activities 9. European Institute of Innovation & Technology to set out a strategic innovation agenda (2011)

Strengthening the knowledge base Getting good ideas to market Maximising social and regional benefits Collaborating internationally Key measures of Innovation Union Pooling efforts for breakthroughs

Access to finance Issues Lack of finance is main constraint on innovative companies Few European SMEs grow into major companies Specific market gaps for start ups, for high growth companies, and for financing major research and innovation projects RSFF, CIP Financial Instruments cannot meet demand. Actions 10. New generation of Financial instruments with EIB (by 2014) 11. Regime for cross border Venture Capital funds (2012) 12. Stronger brokerage between innovative SMEs and investors 13. Review State Aid framework, to enable support to all forms of innovation (2011)

A Single Innovation Market Issues Costly EU patent system Lack of harmonised regulations for innovations EU standard setting too slow Public procurers lack incentives, knowledge or scale to benefit from innovation Importance of eco-innovation Actions 14. Rapid agreement on EU patent 15. Screen regulatory frameworks linked to Partnerships (2011) 16. Reform EU standard setting & link to R&D projects (2011) 17. Member States to set aside procurement budgets for innovation, with EC technical/ financial support (2011) 18. Commission to present an eco-innovation action plan (20110

Openness and creative potential Issues Many different forms of innovation (open, user driven, systemic etc.) EU strengths in design and creativity not recognised in policy Much IPR is dormant, as it is difficult to find a user. Actions 19. Establish Design Leadership Board & Creative Industries Alliance (2011) 20. Open access to FP research publications 21. Model agreements for collaborative research and knowledge transfer 22. Develop EU knowledge markets to trade & invest in patents (2011) 23. Examine the role of Competition Policy

Strengthening the knowledge base Getting good ideas to market Maximising social and regional benefits Collaborating internationally Key measures of Innovation Union Pooling efforts for breakthroughs

Social and territorial cohesion Issues -Innovation needed everywhere -Need to avoid an “innovation divide” -Make best use of € 86 Bn Structural Funds earmarked for research and innovation until 2013 Actions 24. Improve use of Structural Funds by Member States with Commission supported « smart specialisation » platform 25. Preparations on future Structural Funds to support innovation 26. Launch social innovation pilot and mainstream in European Social Funds 27. Research programme on social and public sector innovation 28. Innovation all occupations, starting with caring sector

Strengthening the knowledge base Getting good ideas to market Maximising social and regional benefits Collaborating internationally Key measures of Innovation Union Pooling efforts for breakthroughs

European Innovation Partnerships Key issues − Major societal challenges require joint responses across policies and across EU − Numerous sub-critical, uncoordinated initiatives: − between EU / Member States / Regions − R&D / Market-side actions (public procurement, standards, regulation) European Innovation Partnerships are: Frameworks bringing together main actors and actions - At EU and national levels - From research to market - Around common objectives and targets

European Innovation Partnerships 2010 – Pilot on active and healthy ageing Aim: two additional healthy life years by 2020 – Council, Parliament to discuss the concept – Member States and stakeholders invited to join 2011 – Others to follow pending discussions and building on pilot experience – Topics considered: smart cities, water, raw materials, mobility, agriculture,

Strengthening the knowledge base Getting good ideas to market Maximising social and regional benefits Collaborating internationally Key measures of Innovation Union Pooling efforts for breakthroughs

International cooperation Key issues -Third countries see 27+1 small/medium parties, not one major partner -Europe’s openness is not always reciprocated -Global challenges require a global response Actions 30. Attract high skilled third country nationals 31. Joint EU / national priorities for cooperation with third countries (2012) 32. Agree international infrastructures with world partners (2012)

Making it happen! A priority for EU Institutions – European Council dedicated discussion in December – Council invited to meet as “Innovation Council” – European Parliament discussions – Innovation Group of Commissioners Accelerating national reforms – Self assessments of R&I systems under Europe 2020 Tracking progress – EU target of 3% of GDP on R&D and national targets – New indicator on fast-growing innovative firms – New Scoreboard of 25 indicators Annual Innovation Convention

Next steps Oct. 12, Nov. 26: Competitiveness Council conclusions Dec. 16: European Council European Parliament debate Implementation Launch of European Innovation Partnerships, … Proposals for future EU programmes, European Research Area,.. Implementation in Member States, regions…

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