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RESEARCH & INNOVATION POLICY

Valanta Milliou

cmilliou@aueb.grhttp://www.aueb.gr/users/milliou/teaching.html

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1. Introduction

2. Theoretical Support

3. Practice

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1. INTRODUCTION

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Research & Innovation

Scientific research gives us new knowledge about the world

and leads to inventions/innovations that change our lives.

The application of the results of research in the production

process increases the competitiveness of the firms and of

the economy in general.

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Research & Innovation in Europe Europe has a proud history of discovery and invention.

Two centuries ago it launched the industrial revolution.

More recent examples:

- Mobile phone

- Airbus planes

- Worldwide web (European Centre for Nuclear Research -

CERN)

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Research & Innovation in Europe Individual firms and national research centres in Europe do

not always have the resources they need to compete in

today’s global economy.

They face particularly tough competition from rivals in the

United States and Asia (2001: 1,9 % GDP of EU, 3,1 % of

Japan, 2,8 % of the U.S.)

→ Collectively, the EU and its member states must do more

to boost European research.

→ The EU has developed the Research & Innovation Policy.

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Research & Innovation PolicyWith this policy, the EU:

- Promotes research programmes

- Funds joint projects

- Breaks down the barriers which, until now, have hindered

cooperation between scientists in different countries.

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Research & Innovation Policy

At their Lisbon Summit in March 2000, EU leaders agreed

that the European Union should aim to become the world’s

most competitive economy by 2010.

Research and new technologies have a vital role to play in

achieving this goal.

→ The importance of the Research & Innovation Policy has

significantly increased.

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2. THEORETICAL SUPPORT

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“Technological ”Gap

The starting point of the policy is that Europe is not taking

full advantage of its research and technology abilities

because the research attempts that take place are

dispersed and duplicated.

There is a “Technology Gap” between Europe and the U.S.

and Japan. This is demonstrated in many statistical data of

the European Commission.

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Kenneth ArrowHe applied economic analysis to advocate government financial support for “basic research”.

Basic research: The bedrock of technological progress.

Experimental or theoretical work undertaken primarily to

acquire new knowledge of the underlying foundations of

phenomena and observable facts, without any particular

application or use in view (e.g. nanotechnology).

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Kenneth Arrow (συν.)

There are 3 categories of economic problems which make inadvisable to leave the allocation of resources for invention to the market mechanism:

1. Uncertainty

Uncertainty about financial gain.

Risks of failure are high, both because the research might

lead to a dead end and because there is a risk that, even if it

were fruitful, a speedier rival might beat them to the harvest.

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Kenneth Arrow (con.)

2. Indivisibility

Where markets are indivisible, there are problems both in

assessing demand and securing payment.

Indivisibilities in the process of research itself (e.g. atomistic

industry)

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Kenneth Arrow (con.)

3. Inappropriability

The originator of the invention may be unable to gain due

reward.

Ideas are easily stolen.

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Imperfect Private Capital Markets

The bankers are unappreciative of the full value of

technological opportunities.

In response to this, governments have from time established

mechanisms targeted at the provision of funds for

technology.

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3. PRACTISE

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History Review

1957: Treaty of Rome did not include any clear provision for

the Research and Innovation Policy.

Foundation of the Joint Research Center as part of the

European Commission.

1980s: With the creation of the common market, the EU

took more responsibilities in this area and in the

coordination among the member-states.

Creation of the Framework Programmes.

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History Review (con.)

1986: A new treaty (the Single European Act) confirms that

science is now an EU responsibility.

1992: Treaty of Maastricht increases the role of the EU in

this area.

2000: Lisbon summit.

They call for the creation of the European Research Area.

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History Review (con.)

2003: EU leaders agree to raise spending on R&D to 3% of

GDP by 2010.

2005: During discussions for the last framework

programme, the creation of the European Research Council

was decided.

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Joint Research Center (JRC)The JRC is the EU’s own research body. In addition to

providing independent advice and technical support for the

European Commission, it carries out its own scientific

research – helping to create a safer, cleaner, healthier and

more competitive Europe.

Two of the JRC’s top priorities are ensuring the safety of

nuclear reactors, particularly in central and eastern Europe,

and managing nuclear waste.

With an overall staff of 2 100, the JRC operates at seven

sites across the EU.

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Framework Programmes

Since 1984, the EU has run its research and technological

development policy on the basis of multiannual framework

programmes.

The first framework programme covered the period 1984-

1987. The sixth covered the period 2002-2006 and the

current one, the seventh, covers the period 2007-2013.

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7th Framework Programme

Some important differences from the 6th Framework

Programme:

- Increase 63% in the budget.

- Focus on research areas (e.g. health, space)

- Creation of the European Research Council: For the

funding of the most ambitious and innovative research

projects that involve more risk and might have long run

benefits.

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7th Framework Programme (cont.)

Its main programmes include:

1.Cooperation

Programme aims to stimulate cooperation and improve links

between industry and research within a transnational

framework.

2. Ideas

The Programme is intended to enhance exploratory

research in Europe, i.e. aimed at discovering new

knowledge that fundamentally changes our vision of the

world and our way of life (European Research Council)

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7th Framework Programme (cont.)

3. People

The Programme will harness significant financial resources

that can be used to improve the career prospects of

researchers in Europe and attract more high-quality young

researchers. The EU hopes to encourage training and

mobility so that European researchers can realise their full

potential (e.g. "Marie Curie" actions).

4. Nuclear Power

Nuclear fission and radiation protection.