Presentation to Joint Meeting of the Competitiveness and Growth and the Research Working Parties

Cyril Robin-ChampigneulDg RTD

8 October 2010

Keith SequeiraDg 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!

Figure Private Expenditure on R&D as % of GDP (1) - average annual

growth (%) in the major economies, 2000-2007 (2)

-0,2-0,7

2,5

5,0

9,8

-2,0

0,0

2,0

4,0

6,0

8,0

10,0

12,0

EU-27 US Japan South Korea China

%

Declining EU share of knowledge productionEvolution of World R&D expenditure in real terms, PPS€ at 2000 prices and exchange rates, 1995-2008EU-27

US

Japan

ROW

0

100

200

300

400

500

600

700

800

900

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

PP

S€

200

0 (

bil

lio

ns)

Stagnating business R&D

Average annual growth as % of GDP, EU-27, US, Japan,

South Korea & China, 2000-2007

Globalisationof knowledge

SANCHES Luisa (REGIO)

US

Economic and financial crisis

EU lost six million jobs, €1000 Bn annual GDP due to crisis

Invest in future growthEU 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

Actions1. 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

Actions4. Commission to propose a European Research Area framework (2012)

to remove obstacles to mobility and cross-border cooperation by 20145. EU and Member States to complete or launch 60% of priority European

research infrastructures by 2015.

Focusing EU funding instrumentsIssues • 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 companiesFew European SMEs grow into major companiesSpecific market gaps for start ups, for high growth companies, and for

financing major research and innovation projectsRSFF, CIP Financial Instruments cannot meet demand.

Actions10. 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 investors13. 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

innovationImportance of eco-innovation

Actions14. Rapid agreement on EU patent15. 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 policyMuch IPR is dormant, as it is difficult to find a user.

Actions19. Establish Design Leadership Board & Creative Industries

Alliance (2011)20. Open access to FP research publications21. 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

Actions24. Improve use of Structural Funds by Member States with

Commission supported « smart specialisation » platform25. Preparations on future Structural Funds to support innovation26. Launch social innovation pilot and mainstream in European

Social Funds 27. Research programme on social and public sector innovation28. 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 PartnershipsKey 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 Partnerships2010– 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 cooperationKey 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 conclusionsDec. 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…

Innovation Union website

http://ec.europa.eu/innovation-union/

Innovation Facebook page

http://www.facebook.com/Innovation.Union

Innovation unlimited blog

http://blogs.ec.europa.eu/innovationunlimited