Research and innovation – The key to European competitiveness Research and Innovation – preparing the ground for smart, sustainable and inclusive growth in Europe. Wolfgang Burtscher Deputy Director General for Research and Innovation European Commission Research and innovation – The key to European competitiveness Oslo, 20 May 2011

Framework conditions for next generation of research and innovation funding Europe: Gaps in R&D investment and innovation compared to international competitors Europe 2020 strategy for smart, sustainable and inclusive growth Headline targets, including 3% of GDP invested in R&D 7 flagship initiatives, including Innovation Union, Digital Agenda for Europe, Resource Efficient Europe, Industrial policy for the globalisation era and Youth on the move Endorsed at several occasions by European Council as key for growth and jobs Communication of European Commission on « EU-Budget Review » (19 th October 2011) Interim evaluation of 7 th Framework Programme

The world share of the EU in R&D expenditure has decreased by 1/5 since 1995 The world share of the EU in R&D has been continuously decreasing due to rapid growth in emerging countries, in particular in Asia. In 2008, the EU represented about 23% of R&D expenditure in the world, against almost 29% in 1995, i.e. a 22% decrease in 13 years. This is good news that other countries become important actors in R&D and innovation activities. But this is also a challenge for Europe. Source: DG Research and Innovation Data: Eurostat, OECD, UNESCO,

Innovation gap with US and Japan, emerging countries catching up EU Percentage gaps between EU performance (0) and other countries across 12 indicators. Other counties, such as India and Brazil, are developing fast. Source: 2010 Innovation Union Scoreboard

License and patent revenues from abroad The EU does not get enough revenues from the world market of technology License and patent revenues from abroad (% of GDP) 0.43 0.22 0.19 0.64 0.53 0.21 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 United States Japan EU % 2000 (1) 2009 (2) Japan and the US get much more license revenues from abroad than the EU. The Scoreboard shows that Brazil is rapidly catching up on this indicator. What do all these results tell us? Obviously that the exploitation of research results by the business sector is not working as well as in the US and Japan and that the EU should improve its ability to commercialise its technological knowledge abroad. We need in priority more fast-growing innovative firms in new markets responding to world's demand, as well as the creation of a better functioning knowledge market in Europe. The EU must therefore work hard on improving the framework conditions and the environment for innovation along the lines of the priorities presented in Innovation Union. We need to start thinking more strategically and focus on key framework conditions to enable easier access to finance for SMEs, faster interoperable standard setting, more affordable Intellectual Property Rights and create a genuine European knowledge market. Other key initiatives will aim to reinforce the single market by creating the conditions for EU-wide operation of Venture Capital and facilitating joint public procurement of innovative products and services. Source: DG Research and Innovation Data: Eurostat Notes: (1) EU: 2004. (2) US, JP: 2008.

EU Budget Review – Main messages EU Budget = key tool for implementing Europe 2020 and Innovation Union Budget Review: key principes for future budget Close alignment with Europe 2020 priorities; Stronger EU added value; Clearer focus on results and impact (innovation!); Leveraging other sources of funding ‘Full range of research and innovation instruments should work together in a Common Strategic Framework’

EU added value of research and innovation funding Enable cross-border pooling of resources to achieve critical mass and diffusion of knowledge Promote competition in research and innovation, thereby raising levels of excellence Offers a wide range of training possibilities Provides a way to deal with pan-European policy challenges (societal challenges) Raises the international attractiveness of EU research and innovation Act as a catalyser and for development of common solutions Financial instruments with high leverage

Shortcomings of research and innovation funding - Interim evaluation of FP7 Complexity - too many instruments and funding mechanisms, complex landscape Further simplification- less variation in rules, simpler audits and controls, avoid duplicate information Better strategy for innovation – involve users, how to commercialise results, generate impacts Need to focus resources – with critical mass to address the grand challenges Broaden participation – industry, SMEs, new Member States, women, new innovation actors Clearer agendas - driven by scientific, industrial, social objectives

Consultation until 20 May 2011 What is the Green Paper “Towards a Common Strategic Framework for research and innovation funding” about Seeking stakeholders’ views on key issues and questions regarding the Common Strategic Framework Consultation until 20 May 2011 Feeding into Commission’s formal proposals for CSF by the end of 2011 4 blocks of questions: Delivering on Europe 2020: level of ambition of CSF, simplification, links to other sources of funding; Tackling societal challenges; Strengthening competitiveness; Strengthening the science base and the European Research Area.

Consultation on the Common Strategic Framework Consultation closed on 20 May: More than 900 questionnaire responses received About 300 position papers Strong support for concept of Common Strategic Framework, with simplification a key issue Clear messages on need for more openness in calls and for more high-risk projects out of mainstream to stimulate innovation

Common Strategic Framework Major improvements to EU research and innovation funding for post 2013 period Scope: The Framework Programme for research, technological development and demonstration (currently FP7, €53 billion 2007-2013) The Competitiveness and Innovation Framework Programme (CIP) (€3.6 billion 2007-2013) The European Institute for Innovation and Technology (EIT) (€309 million 2007-2013) Strengthening complementarities with the Structural Funds (€86 billion) Coherent set of funding instruments along the whole innovation chain Basis for far reaching simplification of rules and procedures

CSF will increase IMPACT FROM different priorities in each programme and initiative TO common strategic priorities, focusing on Excellence in the science base (e.g. ERC, Marie Curie, research infrastructures) Tackling societal challenges such as health and wellbeing, food security, secure, clean and efficient energy, smart transport, resource efficiency and climate, etc.) Creating industrial leadership and competitive frameworks (SMEs, RSFF, JU, etc.) FROM gaps between the stages (R&D, demonstration, market take up, etc) TO coherent support for projects and organisations across the innovation cycle from research to retail FROM difficult translation of research results into products/services TO stronger support for innovation, including non-technological innovation and market take up

CSF is basis for SIMPLIFICATION FROM different rules in each programme and initiative TO more standardised rules across all initiatives – which meet the different needs and with flexibility where needed (e.g. for the EIT) FROM a large variety of funding schemes within and between programmes TO a rationalised toolkit of schemes across the Common Strategic Framework FROM multiple websites, guidance documents, applications TO common entry points, one stop shops, common IT platforms

CSF is basis for SIMPLIFICATION - Principles Participants are at the heart of the simplification agenda Broad acceptance of participants usual cost accounting practices including average personnel costs Greater resort to flat rates and lump sums where appropriate Review of audit strategy towards risk based audits and implementation of single audit principle

Thank you for your attention Find out more and participate in the debate at: http://www.ec.europa.eu/research/csfri/