1. 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

2. 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

3. 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,

4. Innovation gap with US and Japan, emerging countries catching upEU
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

5. 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.

6. 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’

7. 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

8. 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

9. 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.

10. 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

11. 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 )
The Competitiveness and Innovation Framework Programme (CIP) (€3.6 billion )
The European Institute for Innovation and Technology (EIT) (€309 million )
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

12. 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

13. 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

14. 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

15. Thank you for your attention
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