K. Lautso K. Lautso: Research and Development – effectiveness through international co-operation Financing for Research and Development EIB EFCA Seminar Brussels

K. Lautso 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

K. Lautso 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 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%

K. Lautso

K. Lautso 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

K. Lautso FP 7 – an opportunity n FP – 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

K. Lautso 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

K. Lautso 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.

K. Lautso 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

K. Lautso 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

K. Lautso 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)

K. Lautso 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

K. Lautso 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

K. Lautso 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

K. Lautso Thank you for your attention!