P O L I C Y B R I D G EP O L I C Y B R I D G E

THE INNovATIoN RoAD MAP

With thanks to our membersAristotle University of ThessalonikiChalmers University of Technology ESADEETH-ZürichImperial College LondonINSEADKarolinska InstitutetKU LeuvenThe Norwegian University of Science and TechnologyParisTech (association of 10 Grandes Écoles)Politecnico di MilanoTU DelftThe University of CambridgeUniversity College LondonThe University of WarwickSetSquared Partnership of the universities of Bath, Bristol, Southampton and Surrey

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For the past two years, leaders in European policy, industry and academia have been meeting to discuss new ideas in innovation policy. These are dispatches from those meetings, organised by Science|Business media network.

AIRING FRESH IDEAS IN INNovATIoN PoLICy

Innovation is vital for jobs, prosperity and social progress – and smart government policy to encourage it is urgently needed. But, as anyone familiar with the inner workings of the European Union knows, it can be very hard to get an open airing of new ideas in Brussels.

To help fix that, for the past two years the Science|Business media network has been organising a series of high-level meetings to encourage frank debate among leaders in European policy, academia and industry. This book comprises our dispatches from those meetings – and together they present an informative, lively record of the development of new innovation policies in Brussels.

Making EU innovation work better is the objective of the Policy Bridge. At present, key policy decisions are made in a democratic vacuum – decisions affecting how universities work, how tech companies get started, how inventions are protected or investors are rewarded. When it comes to these strands of innovation policy, coordination between Brussels and the 27 national capitals is slight. And the voices of smart outsiders – on university campuses, inside corporate labs, and in professional consulting organisations – are only intermittently heard. As the Economist put it in a trenchant 2007 opinion, the typical Brussels policy meeting comprises “good

coffee and croissants, dull speeches and a brief exchange of conventional wisdom.”

That has to change. Europe’s innovation performance is lagging – in fact, one European Commission staff analysis forecast that, at the rate China and India are rising and the EU is sinking, Europe may one day be the home of just 10 per cent of global knowledge creation. Already, its universities are not keeping up: only two Europeans figure on the most widely watched list of the world’s top 20 universities. At the same time, if you want to start a company based on research in Europe, there’s less than a third as much early-stage capital available than in the US. Patent activity is lower. Academic tenure and pension systems make mobility harder. And taxes are death.

The Science|Business Policy Bridge is an initiative to do something about all this – starting with improving the political dialogue.

Richard L. Hudson CEo & Editor Science|Business

Editor’s LEttEr

The European Institute of Innovation and Technology (EIT) has been approved by ministers from member states and by the European Parliament, with some last-minute horse-trading about its name and initials. But although financial support from the European Union is assured, a big question mark still remains over the hoped-for funding from industry – without which the whole project will founder.

The long and the short of itFinal agreement on the name of the EIT emerged after negotiations between the European Commission and Parliament. yes, it is the European Institute for Innovation and Technology. And yes, the abbreviation is EIT. What is not yet clear is whether the “I” stands for Institute or Innovation…or for both.

As Education Director General odile Quintin confirmed last week at a Science|Business conference, the Commission still expects half the funding to come from industry. The problem is that so far not a single company has publicly pledged to put money into the KICs, the Knowledge and Innovation Communities through which industry is to be involved.

Quintin was unfazed. Challenged on whether more than one or two companies had expressed an interest in KICs so far, she said, “Frankly, I am confident. I am sure that business will want to participate now that we have the political green light.” She expects that will to emerge more clearly once the EIT has begun work and the KICs have been defined.

But Quintin was reluctant to reveal which companies had expressed an interest. “We don’t want to pre-empt the formation of the KICs,” said Quintin. “The day [the EIT] is established we will see which businesses will declare themselves as wanting to be part of this process.” She added that Commission President José Manuel Barroso has met a number of businesses either jointly or in separate discussions.

Her confidence is based on the fact that two possible priority areas for the EIT – renewable energies and climate change – are hot areas for commercial development. Quintin also believes that industry will be attracted by the EIT’s independence from political pressure, as its governing board will decide what projects it will support.

That could turn out to be a Catch-22, as although the Commission and other European bodies have suggested priorities for the EIT, the institute will be entirely free to determine its own priorities, though Quintin added, “of course they will take account of what the Parliament and the Commission have said.”

What the EIT decides will depend on the governing body, which remains to be appointed. The European Parliament will receive prior notice of proposals for programmes, but will not be able to decide, said Quintin.

Quintin also called on the committee appointing the governing board to include representatives from SMEs, though she recognised that “it might be difficult for some SMEs to join in the first KICs, even in

the area of renewable energies and climate change”.

Meanwhile, countries are lining up to bid to host the new institute, with Germany, Austria and Poland among those that have expressed a keen interest. That could lead to a bidding war that would see money flowing in to the EIT – Poland, said Quintin, had already pledged €1 billion to the institute in the event it gets sited in the country.

Quintin was speaking at the inaugural meeting of the Science|Business Policy Bridge, a programme of EU innovation policy conferences and Web coverage intended to bring together the worlds of academia, industry and policy. Founding members of the Policy Bridge are Procter & Gamble, Microsoft, SAS and EuropaBio. The host was the secretariat of the European Free Trade Assocation.

NEW PERSPECTIvES oN EDUCATIoN AND SKILLS FoR THE 21ST CENTURyAn open discussion of new ideas for reforming Europe - knowledge base

EFTA Secretariat, Brussels - 28 November 2007

Keynote speaker: Odile Quintin, Director General for Education and Culture, European Commission

MEETING 1:

Supported by Members for Season 1 included: our university network plus:

Peter Wrobel

sEAsoN 1 – 2007-8

European Commission officials are studying ways to give R&D investment an additional boost from 2009, according to a senior EC research official.

The European Union has a “unique opportunity” to boost European competitiveness if a mid-term review of the seven-year EU Financial Perspective for 2007–2013 leads to overall budget increases, and in the longer run in the new Financial Perspectives beyond 2013, said Zoran Stancic, deputy director general of the research Directorate-General of the European Commission, at a seminar hosted by Science|Business in Brussels last week.

Different parts of the Commission have already started preparing for the mid-term review, which will begin in earnest in 2009. “Knowledge investment [research, education, innovation] should have a strong case” for a larger budget, Stancic said, in line with the Commission’s wider priorities.

DG Research has a good track record for distributing large amounts of research money efficiently, he said.

The half-day seminar focused on the question of how the €54 billion allocated to research under the seventh Framework Programme (FP7) is being spent, but Stancic raised more fundamental questions.

“It’s not just how to spend the money but how much? Can we be more ambitious?” Is the money reserved for knowledge investment “too little, too late?” he asked.

In 2006 the European Parliament and the Council approved a 65 per cent increase

in EU-wide R&D spending over the next seven years. The sharp rise in the R&D budget illustrated how important politicians regarded research.

“I’m pleased to hear our political leaders highlight research as a key driver for the development of the EU and the world. I think we have a strong case. It’s a unique opportunity,” Stancic said”.

“The beginning of funding under FP7 is not as steep as the research community and Industry would like. Is the funding coming too late? We can’t shift money from one budget to another but through Annual Work Programmes, [but] we can shift gears,” he said.

If there are proposed increases in the budget following the mid-term review, the Commission will push to have those increases reflected in the research budget. Looking further forward, to the new Financial Perspectives beyond 2013, research would also be a contender for budget increases in real terms. The €72 billion figure the Commission originally proposed investing on FP7 when the budget was agreed two years ago was cut to €54 billion after lengthy debate both by the European Parliament and the Council.

“I don’t know if the Commission will be as ambitious as it was then but there’s no reason why it should be less ambitious,” he said.

Stancic ’s bullish remarks were welcomed by his fellow panelist, Professor Ernst-Ludwig Winnacker, Secretary General of the European Research Council, and by around 30 participants in the seminar from industry, universities and government authorities.

But Winnacker was less hopeful in the short term. “The possibility for radical changes to the budget in the mid-term review is very small,” he said, adding that the time to present more ambitious plans for European research is when the next seven-year budget is set in 2013.

The only way to get more funding for research in the meantime is for the 27 member states to spend a larger proportion of their national budgets on research and development. Winnacker praised Switzerland, a non-EU country that participates in EU research programmes. Switzerland spends 4.2 per cent of its budget on R&D. The EU average is 1.84 per cent. Some EU members including Italy spend less than 1 per cent on R&D. “Member states have to get their acts together: 1.84 per cent is too low,” he said.

HoW SHoULD THE EU SPEND ITS R&D MoNEy? An open discussion of new ideas on priorities for EU research spending.

17 January 2008

Keynote speaker: Zoran Stancic, Deputy Director General, DG RTD, European Commission

Keynote speaker: Ernst-Ludwig Winnacker, Secretary General, European Research Council

MEETING 2:

Supported by

Peter Wrobel

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WHo WILL LEAD THE LEAD MARKETS? An open discussion on the development of innovative markets in Europe.

12 March 2008 – Brussels

Jiri Plecity, Member of Cabinet for Vice President Gunther Verheugen

Pierre Vigier, Head, Innovation Policy Support, DG Enterprise

MEETING 3:

Supported by

As the European Commission embarks on an ambitious project to help Europe steal a commercial lead in key emerging technologies, it is becoming clear that handing out public money is not part of the plan: there is no new pot of EU gold.

Top Commission officials addressed around 30 company and university executives in March at a Science|Business Bridge seminar event devoted to the recently launched lead markets initiative.

Jiri Plecity, a member of Commission vice-president Gunter verheugen’s inner circle of advisors, and Pierre vigier, head of innovation policy in the Commission’s industry department, explained that the objective of the lead market initiative is primarily to remove obstacles that slow down the uptake of new products and services and thus impede the emergence of new markets.

one aim is to make public policy tools better coordinated around the EU to facilitate the emergence of the six lead markets, identified at the beginning of this year as being areas where Europe could become a dominant commercial force and where a variety of obstacles have been identified, Plecity said.

The six markets are eHealth, protective textiles, sustainable construction, recycling, bio-based products and renewable energies.

Policy deficiencies, not market ones

“We are addressing policy deficiencies rather than market deficiencies,” said vigier, referring to areas such as legislation, the setting of industry standards and public procurement policy. “It is not about creating artificially new markets with state aid or EU money”

Some delegates at the meeting said they did not fully understand the methodology of the project. vigier said that indeed the lead market initiative could be “misinterpreted”

by some who expect it to become yet another way of investing public money in research, repeating that it is not a supply-centered but a demand-centered initiative.

Michael Browne, director of European R&D at University College London asked: “What is the financial incentive for us to get involved in the lead markets initiative?”

vigier replied that there is “none directly”, but that the objective is to create a virtuous circle for investing in research, and “this is what Europe needs at the moment”. Plecity said, “The success of this initiative should not depend on public money,” he said.

vigier did, however, note that this doesn’t preclude making better use of existing resources. For instance, DG Research would be launching a call for proposals for networks in support of lead markets, at the level of the regions, with the aim of designing better relations between research agendas and industrial needs in support of lead markets in groups of regions, thus facilitating the access of these regions and their associated research institutes to Framework Programme 7.

Call to cut red tape

While the representatives of academia appeared disappointed about the lack of financial incentives, company executives were keen to revise unnecessary regulations and to make smarter use of public procurement. “This initiative mustn’t lead to additional burden,” warned, for instance, veronique De Waele, Manager for Corporate & Governmental Relations at the German chemicals group BASF. Instead of conducting new regulatory projects the EU should concentrate on getting rid of red tape, she said, referring specifically to two EU laws on the handling and recycling of industrial waste that are being reviewed at the moment.

“The Commission should make sure that legislative changes don’t add an additional burden to European companies,” she added.

Joachim von Heimburg, director of corporate R&D at the consumer products company Procter & Gamble, echoed these sentiments. He also said the lead markets project was “a wonderful opportunity for some regulations to disappear”. Both vigier and Plecity confirmed that the six action plans do indeed aim to improve the regulatory environment and make it conducive to innovation in a targeted way.

Although in their infancy, the six chosen areas already generate over €120 billion in sales and employ over 1.9 million people in the EU, the Commission said when it launched the lead markets proposal in January.

The Commission believes that with coordinated action by the 27 member states of the Union they could grow to over €300 billion in sales and over three million jobs by 2020.

“The lead markets initiative will foster the emergence of these markets by improving legislation, encouraging public procurement and developing interoperable standards,” the Commission said in a statement announcing the move.

The Commission insists it isn’t trying to pick winners. It won’t favor one company or research institute over another, it said, as this would be anti-competitive. “The initiative is decisively focused on a competitive, demand-driven approach,” the Commission said.

National government ministers will debate the lead markets initiative in May. Plecity said he expects the member states of the EU sign up to the plan. “We really believe in this. It’s not just another coordination exercise; it should also get strong results,” he said.

Lead markets: it’s about facilitation, not fundingPaul Meller

NEW PERSPECTIvES IN INTELLECTUAL PRoPERTy An open discussion of new ideas for reforming the IP system in Europe.

29 May 2008 – Brussels

Margot Fröhlinger, Director, DG Internal Markets

Alain Pompidou, Adviser, Centre Nationale de la Recherche Scientifique, and former President of the European Patent Office

MEETING 4:

Brussels is abuzz with speculation that Europe’s fragmented, costly and complex patent regime is about to reform. At the end of last month experts from the worlds of politics, industry and academia gathered to exchange views about the issue at a Science|Business Policy Bridge meeting.

While representatives from universities and business outlined their wish lists for change, two well-placed political figures gave their prognosis for the creation of a Community Patent and a single European patent litigation system.

Some ideas from the Science|Business Policy Bridge meeting: Guiseppe Conti, Head of Technology Transfer, Politecnico di Milano

1. Cancel filing fees, or introduce financial incentives for public Research organisations to file, thus boosting activity in filing EU patents based on European public research.

2. Introduce a provisional procedure in Europe, similar to the US provisional procedure, for fixing a priority date quickly, with the option of filing the full patent within next 12 months, and in order to be able to publish results without waiting for several weeks for the final patent document.

3. Develop guidelines for managing co-ownership of IP between public research organisations and industry.

Alain Pompidou, a former president of the European Patent office and member of the European Parliament, who now advises the French government, among others, on intellectual property reform, warned the 40-strong gathering that failure to make a breakthrough now could render Europe’s patent system redundant, due to technological changes afoot.

Meanwhile, Margot Fröhlinger, the European Commission’s top IP official, told attendees at the Science|Business Intellectual Property Bridge seminar that another technological

advance lay behind the raised expectations for a breakthrough – at least as far as the creation of a Community Patent is concerned.

Machine translation of patents into all the languages of the European Union is now possible, she said. “The translation of technical language is now highly precise,” she said, adding: “Even if the syntax is often wrong it’s understandable and good enough for non-legal summaries of patents.”

Compared with the astronomical cost of translating all patents into all languages, the system would not be that expensive: it would cost roughly €300,000 for each additional language pair (such a English-to-Hungarian or English-to-Romanian) to develop the electronic dictionaries needed to translate patent summaries into each language, she said

But not all agree

Such a simple idea could break the three-decade-long gridlock in setting up a Community Patent to replace the patchwork of national patents that exist at present. But, characterising the progress being made by national governments towards this end, Ms Fröhlinger said the chances have “turned gloomy” recently, because a small group of Member States are disagreeing with the idea.

These countries fear that they will become economic backwaters of the European Union if there is an agreement to publish patents in English, French or German – the three core languages of the EU. They want translations within the same legal status as the versions published in one of the core languages.

“There are grounds for optimism. The basis of an agreement is on the table now and there is room for compromise,” she said, but she did warn that the EU has come close to agreeing on a Community Patent on three previous occasions – in 1975, 1989 and 2003.

Mr Pompidou agreed that the translation machine could overcome the biggest cause for failure in the past – language – but he added that this time the stakes are far higher.

“If there’s no breakthrough on the Community Patent on the back of the automatic

translation system we’ll miss the train. By 2010 there will be an on-line patent exchange system created in Chicago by [the intellectual capital merchant banking firm] ocean Tomo. If there’s no single European patent by then, European companies will simply bypass the European patent system and file their inventions in the US, Japan or China, because there will be no more added value from a European patent,” he said.

An agreement on a Community Patent would require unanimous support from all 27 EU member states. Spain and Italy’s objections are troubling, Pompidou agreed. He warned that France, which takes over the six-month rotating presidency of the EU from Slovenia in July, “is not ready to move because it is not sure to get unanimity in the Council”.

A Single Litigation Area

Another problem, which has been cunningly sidelined since the end of last year, is the fact that the creation of Community Patent must go hand-in-hand with the creation of a single European litigation area.

Portugal separated the two issues during its six months at the helm last year. The move was praised at the time because it allowed discussions on both issues to progress faster than ever before.

However, to pretend that one or other issue could be sorted out alone, without the other,

Machine translation could break patent deadlockPaul Meller

MEETING 5:

DoES FRAMEWoRK WoRK?An exclusive roundtable meeting

20 November 2008 – Brussels

Clara de la Torre, Director, DG Research

Waldemar Kütt, Deputy Chef de Cabinet for Commissioner Potocnikv

The financial crisis has quashed hopes of an increase in the Framework Programme 7 (FP7) budget. Now the focus is on making it work better.

Just twelve short months ago, the mid-term review of the European Union’s R&D flagship, Framework Programme Six (FP6), was seen as a unique opportunity to lobby for an increase in the €54 billion budget for science and technology research. The scale of the impending global financial crisis was unknown at the time.

one year on that opportunity has been extinguished by the sudden and dramatic unravelling of the world’s financial system and the sharp decline into recession of some of Europe’s largest economies.

At a recent seminar in Brussels hosted by Science|Business, two brave senior European Commission officials involved in FP7 defended the programme amid specific criticisms – and concrete suggestions for how to make it work better – from a room full of corporate executives, university directors and research group representatives.

The optimism of last January has dissipated somewhat. “There’s not much chance of a generous budget increase now,” said Clara de la Torre, Director for the Framework

Programme in DG Research.

de la Torre and Waldemar Kütt, deputy chef de cabinet for Science and Research Commissioner Janez Potočnik, were asked by several of the seminar participants why the procedure for handing out FP7 funds is so complicated and bureaucratic.

“you have to find a balance between accountability and ease of use,” said Kalliopi Spyridaki, EU public policy manager for the business intelligence software company SAS. “Businesses new to the world of EU research funding and small firms will be put at a distinct disadvantage by the complexity of the questionnaires.”

Lianne Pelmi, European external funding finance manager at Procter & Gamble gave a practical suggestion to make life easier: simplify the guidelines for FP7 applicants. Evaluation scores from the officials handling applications are low if you don’t interpret the complex guidelines correctly, she said.

De la Torre made a note of Pelmi’s suggestion regarding the guidelines. More broadly, she explained that the European Parliament demands that the Commission accounts for everything when it comes to distributing EU research funds. Kütt acknowledged the complexity

of the application paperwork and said that Commissioner Potocnik has committed to simplifying the Framework Programme wherever possible.

JTI overheads row simmers on

The capping of overhead costs as a proportion of grants handed out under the Joint Technology Initiatives (JTIs) sparked fear and loathing in roughly equal measure. Fear that the 20 per cent rule might be introduced to all FP7 programmes, and loathing, because researchers argue that as overheads often amount to 60 per cent of costs, most of them have to be paid for by the researcher or university, with no help from FP7.

“Will it result in all FP7 projects having a 20 per cent cap?” asked Mikael Kekkonen, project executive at the European Association of Research and Technology organizations (EARTo).

“our members are not criticising JTIs as such, just this 20 per cent rule. We hope it doesn’t eventually work its way into FP7,” he added.

Kütt assured Kekkonen this isn’t being planned and explained why it had been introduced for the JTIs. As well as trying to encourage research organisations to apply full cost accounting methods, he said, “The 20 per cent cap in JTIs is because we want

Making the most of FrameworkPaul Meller

is unrealistic. “There will be no Community Patent without a harmonised litigation system,” Pompidou said.

Sharing some of his inside knowledge of the French government’s thinking, Pompidou said that although his countrymen in office in Paris know what is at stake, the Ministry of Justice remains opposed to the creation of a single litigation area.

on the other hand, he said the French minister for Europe, Jean-Pierre Jouyet, may be in a position to convince the French

government to support the creation of the community patent and the single litigation area. “He managed to persuade the Parliament to back the signing of the London Protocol, so he could have another success with the Community Patent and single litigation area,” Pompidou said.

The London Protocol is an agreement to streamline translation requirements. It was ratified earlier this year after France finally agreed to sign up to it. Many countries in the EU, however, have refused to sign it – so its value is limited.

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more research for our bucks. We understand it created difficulties with some organisations. There are ways to fix this,” he said.

The row over JTIs, the European Union’s main programmes for industry/academic collaboration, first erupted in November 2008, with representatives of Europe’s universities and research and technology organisations claiming researchers would be put off applying if the European Union only funded 20 per cent of overhead costs.

The 20 per cent cap fell far short of what was promised in the EU’s research strategy for FP7, claimed the Deputy Secretary General of the European University Association, Dr John Smith, who said the rules of participation outlined in FP7 state that EU funds should cover 75 percent of direct costs of research and 60 percent of indirect costs or overheads, and questioned why these rules were not being applied to the JTIs

EARTo joined the debate, saying, “Such unrealistic capping of overhead costs displays grave ignorance of the economic realities of research.”

Full cost accounting

Michael Browne, Head of European R&D at University College London, asked if there was any news in relation to the flat indirect cost rate, which is due to be adjusted for the

start of 2010. He also asked the Commission “to take into consideration the fact that many universities throughout Europe are still not able to demonstrate Full Economic Costing, which means that a significant reduction in the current flat rate would be detrimental to the participation level and overall implementation of the Framework Programme.”

“We are getting contrasting messages,” said de la Torre. “The European Parliament feels strongly that we need to encourage universities to move towards full cost accounting. on the other hand we know that it is harder to do that in some countries than in others.”

Why aren’t JTIs more open? asked André Hagehülsmann, innovation manager for Europe at Microsoft. “We would appreciate more flexibility for organisations wanting to participate in FP7. FP7 should be more adaptive and reactive, and hence more agile and flexible,” he said.

Kütt agreed that JTIs are public–private partnerships and that the private side may take into account strategic considerations in building its side of the partnership. But the public contribution to a JTI is generally used for paying projects selected through a fully open call.

Why does private industry wield so much power in the JTIs? asked Joanna Mastalerek, finance manager at the European Liaison office of the German research organisations (KoWI). “For example, the governing board of the Hydrogen and Fuel Cell JTI has just one research body member for six from industry,” she pointed out

“There’s private money involved; when industry is paying half the bill you can’t expect to have the same EC rules as in usual collaborative contracts,” Kütt said in reply.

The Commission received praise as well as criticism, especially for the way FP7 is designed to encourage cooperation with research bodies outside the EU.

Daan Du Toit, senior science and technology representative at the South African mission to the EU, praised the fact that FP7 allows collaboration beyond the EU’s borders. “It’s a unique instrument for internationalising research, especially in the field of life sciences,” he said.

Another international representative echoed this praise, saying that many SMEs in her country are eager to get involved in FP7

The European Institute of Innovation and Technology, known simply as the EIT, will soon be inviting universities, research institutes and companies to participate in new research projects.

The aim: to create a dynamic new force for innovation in Europe, with business and academia working together not only in the lab, but also in converting scientific breakthroughs into commercial reality.

Science|Business held a half-day seminar on the subject on 22 January. Speakers included officials from the European Commission, and by telephone from Stockholm and vienna, two members of the governing board of the EIT. Herewith, a briefing on the EIT, gathered from information presented at the meeting.

What is the EIT?

“It is not like MIT (Massachusetts Institute of Technology), nor is it a network, nor is it a virtual entity. It is an EU body unlike any that currently exists, in that it doesn’t have an executive role, nor is it a regulatory body. It has a governing board located at the headquarters in Budapest; the KICs (knowledge and innovation communities) are halfway between networks and universities. The projects they will run will last between 7 and 15 years with the joint aims of education, research and business realisation,” said Pinuccia Contino, Member of Cabinet for Ján Figel, EU Commissioner for Education, Training, Culture and youth.

“EIT is the first institution trying to see the whole innovation chain, from education to business. There will be a focus on entrepreneurial education. EIT is trying a new way of doing business, trying to capitalise on existing but fragmented excellence. EIT is also a new way to promote innovation; it’s about putting people together, vCs, researchers, corporations etc. EIT is the only initiative of its kind with a strong brand image. These are all elements that make EIT different to what already exists. EIT is

excellence-driven. It will target excellent people in what amounts to a global outreach with the secondary goal of reversing the brain-drain from Europe,” said Lucia Recalde Langarica, head of the EIT task force, in the Commission’s Directorate General for Education and Culture.

“EIT is not just another EU research programme. We have too many of those already. The aim here is to cluster research and education together with entrepreneurship and industrial partners. A typical KIC would be situated in a university town that has a good business school and a history of entrepreneurial spirit,” said Alexander von Gabain, chief scientific officer, Intercell and EIT governing board member.

How did it come into being?

It was advanced in 2005 by Commission President José Manuel Barroso.

Political agreement was secured in April last year. Soon after that Budapest was chosen to host the headquarters, a chairman of the EIT’s governing board, Martin Schuurmans, was picked, and now the governing board is drawing up the official call to participate in the EIT.

What decisions lie ahead?

In the next few months the board will select KICs. There’s a stringent deadline for this – January 2010. The call for proposals will be launched in April this year and run until the end of August, followed by four months for evaluation.

How will it operate?

The EIT governing board will choose the areas on which to focus but then the KICs will adopt a bottom-up approach. Any decisions to commercialise a piece of research will be taken by the KIC, not by the EIT board. How the KICs are structured still remains to be seen.

The KICs’ shape is the burning issue for the governing board. They won’t be networks, but

highly integrated partnerships. They won’t be starting a project from scratch, but rather building on research that is already under way. The Commission and Member States will play no role on the governing Board.

What are its biggest challenges?

The money issue is challenging, make-or-break. If EIT can attract private funding it will fly. If not, it will fail.

EIT challenges: the need for entrepreneurship, building networks and deciding how co-location will work; also the question of money – €20 million to €25 million will go into each KIC each year, but the KICs need an annual budget of €100 million to get them moving.

What is its budget and how much of that comes from the private sector?

The initial budget of €309 million covers the period up to 2013. That’s not a lot – it is seen as a launch period. The politicians don’t want to give billions to EIT yet, but more funds will follow after 2013 if they are convinced during this first phase. Success depends on how many KICs the EIT proposes. The EIT will cover 25 per cent of the cost of each KIC. KICs will have proven themselves by the summer of 2011 when the governing board will produce its first strategic agenda for beyond 2013, and possibly request more funding.

So where will the 75 per cent of the budget come from? From universities, corporations, other EU programmes such as structural funds. The governing board doesn’t want funding for the KICs spread too thinly in terms of geography. There has to be a concentration of efforts – this is central to the EIT vision.

A word of warning: “The Commission must all along channel more funds into EIT. With only the resources we have the EIT won’t take off in the way we hope,” said von Gabain.

EIT – HoW WILL IT WoRK? An exclusive meeting of the Science|Business Policy Bridge

22 January 2009 – Brussels

Featuring:

• Anders Flodström • EIT Executive Committee, University Chancellor, Swedish National Agency for Higher Education• Alex von Gabain, EIT Governing Board, Chief Scientific Officer, Intercell GMBH• Karin Markides, President, Chalmers University of Technology• Lucia Recalde Langarica, Head of the EIT Task Force, Directorate-General for Education and Culture, European

Commission; • Pinuccia Contino, Member of Cabinet for Ján Figel, EU Commissioner for Education, Training, Culture and Youth.

MEETING 6:

Science|Business Special Briefing: EIT – How it will workPaul Meller

There is as much to be lost as gained for Europe’s academic community from the creation of the European Institute for Innovation and Technology (EIT), according to Karin Markides, rector of Chalmers University of Technology in Sweden and vice-president of the CESAER (the Conference of European Schools for Advanced Engineering Education and Research).

But she wants Chalmers to participate in the EIT project, which got the political go-ahead last year and will soon invite colleges, institutes and businesses to compete for places in its so-called knowledge and innovation communities (KICs).

For someone who has spent their whole working life inside universities, apart from a two-year stint at vinnova, the Swedish government innovation agency, Markides shows an unusual awareness of the world of business.

And ironically, it is this awareness that fuels her doubts about the grand European project, inspired by European Commission president José Manuel Barroso – ironic because the role of the private sector is crucial to the success of the EIT.

In an interview with Science|Business last week at a meeting in Brussels, Markides explained how her university has embraced the world of business through partnerships and collaboration.

Chalmers claims to be a pioneer in Europe in the field of start-up companies. In addition to technology, natural sciences and architecture – its three academic fortes – it also teaches entrepreneurship and innovation, and it hosts science parks and incubators for young technology firms. Big companies such as Ford subsidiary volvo Cars and truck maker Scania are partners in the Chalmers Automotive Academy.

‘You have to be humble’

“our contacts with businesses are at the highest level, CEos,” Markides says with

some pride. “The big companies function on a global, as well as a local level. you have to be aware of that and you have to be humble,” she adds.

Working together with companies is the best way for science and technology to make an impact in society. But for the relationship to work successfully “you must consider the culture and the driving forces” of your corporate partners, and they have to do the same, she says.

“our entrepreneurial school and innovation system need private sector funding and the personal engagement of senior businessmen and women. We get both through the trust we have built dealing with the CEos of companies,” she says.

And here’s the rub. “By joining a KIC, Chalmers could put these close ties with companies, and the trust they are built on, at risk.”

So why is she willing to take that risk? “It is important that Chalmers contributes in the development of the next practice to make Europe a good place to do research,” she says.

She has some specific concerns about the way the EIT is being set up. She is a great fan of benchmarking and she argues that this process appears to have been somewhat overlooked by the architects of the EIT, although the structure has been developed with MIT and Cambridge as models.

“I think it is important to evaluate your process against the best process already around. With the EIT I don’t think this is part of the plan for the launched KICs,” she says.

Decision time for the EIT

The EIT’s first call for proposals will run from April to August this year. Markides said the way it is written will be vital. “The EIT must decide if it wants to build functional clusters or networks of partners situated in different locations around Europe,” she says.

And especially with the private sector in

mind, she urges the EIT’s governing board to “ask for growth and goal indicators in the KICs, rather than just defining entrance rules”.

“There are as many risks as opportunities with the EIT. It’s important to take into account the experiences and good practice in Europe so that we don’t make this big project hamper existing long-term innovation capacity building,” she says. “This is why I think that the CESAER network would be a most useful ‘benchmark’ group to provide ‘next practice’ for the development of EIT.”

CESAER is a non-profit-making international association of 60 European engineering universities, colleges and schools. Its main objective is to improve links between the students and researchers in its members.

Does she also see Chalmers, with its ties between business and basic science, its science parks and its specialised clusters as a role model for the EIT? “you could learn a lot from it,” she says modestly.

What will the first KICs focus on?

For now, three themes: Renewable/sustainable energy, climate change and IT. So either you find a way to focus on one of those three or you can’t participate this time.

How does a university get involved in a KIC?

If researchers already get funding, they brings it with them to the KIC. The KICs will also apply directly for FP7 money, not via the EIT. The same goes for private sources of funding.

The EIT: a two-edged sword, says leading rectorPaul Meller

TIME FoR A GLoBAL PATENT?21 April 2009 - Brussels

Featuring: Alison Brimelow President of the European Patent Office

MEETING 7:

Hosted by

Alison Brimelow, EPo President

The European Patent office is pushing for slow, steady coordination of the way that patent offices work in the world’s five biggest patent systems, according to EPo president Alison Brimelow. The outcome won’t be a ‘world patent’ system any time soon – but it will go a long way towards making the system more efficient.

Brimelow believes that while a global patent regime is unrealistic, there are many ways of working better together. Speaking at a Science|Business policy bridge meeting in Brussels on 21 April, she said that work has begun on harmonising the way each of the biggest five patent authorities in the world – the US, the EU, China, Japan and Korea – classifies its patent applications. While not glamorous, a common classification system would at least permit inventors to search more easily for prior art across the five regions.

“If you want to harmonise the litigation system you first have to harmonise the process of granting patents.” Bruno vandermeulen of law firm Bird & Bird.

“I expect we will be able to do this within the next two to three years,” Brimelow said. Similarly, working together on training patent examiners and streamlining their databases could help bring the regimes closer together, she said.

These are a few of the ten projects the five patent authorities have signed up to. Brimelow hopes that they will serve as “building blocks” for a global patent system, but she doubted there will ever be global unity on patents.

“There are things that are patentable in the US that are simply inadmissible in Europe,” she said, adding, “I don’t see much hope of

any harmonisation on substantive matters. Even within Europe, in some areas, patents don’t get treated the same in different countries”. She continued: “Do I think the time is right for a global patent system? No. Do I think we should work towards creating one? yes.” Better coordination with other offices is essential, she added, “if the patent system is to remain relevant.”

She described the growth in the number of patent applications around the world as “remorseless”, and warned that without more coordination, patent offices will get buried in work, which will delay the process of assessing applications.

“Is a patent still relevant if it takes seven years to get approval? We are living on borrowed time,” she said. Efforts to unite Europe’s fragmented patent jurisdictions regime were stepped up last month when the European Commission announced it is launching a renewed effort to create a single patent litigation system for the EU.

However, many delegates participating in the seminar, who included patent attorneys, examiners, company executives and university representatives, remain sceptical of there ever being a breakthrough.

“If you want to harmonise the litigation system you first have to harmonise the process of granting patents,” said Bruno vandermeulen, a partner at the law firm Bird & Bird. But Europe has been trying to forge a single Community Patent for over 30 years without success, and vandermeulen doubted the politicians are ready for a breakthrough now.

“There’s no doubt that we need a Community Patent. However, prospects of obtaining a rapid solution seem dim,” Brimelow said.

Patents: slow and steady wins the race?Paul Meller, Brussels

Hosted by

It may seem an odd time to be discussing the creation of a global patent system. Gardens around the offices of the Munich-based European Patent office were besieged by pigs and tractors recently, as part of a demonstration against biotech patents.

Meanwhile, campaigners against the introduction of patents on pure software are starting to crank up their lobbying ahead of an enlarged board of appeal examination of the issue later this year.

“There is a sense of disquiet. This is a clear political fact that makes me pause when discussing the idea of a global patent,” said EPo president Alison Brimelow.

However, in spite of anxieties in some quarters the demand for patents continues to rise, especially in Asia. But even in developed, western economies the demand is relentless, Brimelow told a gathering of patent lawyers, technology transfer experts from universities and corporate executives.

This rocketing demand poses threats to the system. “Patents are all about being open and clear. If you have volumes of unapproved patents pending the system can’t be open and clear,” she said.

If patent offices around the world coordinated their efforts more this could help tackle the relentless demand, she said, as failure to cooperate results in wasteful duplication of efforts. The five most important patent offices – in the US, Japan, China, South Korea and the EU – have begun 10 projects intended to serve as building blocks for a global patent system.

The projects include an attempt to harmonise the classification of patents, how patent examiners are trained, and how patents are searched. A further idea is to help examiners to connect to each other, for example via a version of facebook.

Harmonisation of patent classification is the most likely of these projects to be carried out. The idea is to adapt all patent offices to the best ways of classifying being carried out by the five patent offices at present. This

could be achieved within two to three years, Brimelow said.

She is less precise about the other initiatives but very clear about one important fact standing in the way of a truly global patent system. “There won’t be technical cooperation concerning the substance of patents so I do not see Europe accepting US-style business methods,” Brimelow said.

one of the fears – particularly in the software community – is that globalization of patents will mean dumbing down to the system in the US, where the bar for what can be patented is set lower than in Europe.

In the EU the system not only sets tougher standards for applicants, it’s also much more expensive to litigate here than stateside, partly because you have to fight it out in several different national patent courts, rather than in just one in the US.

“We file only in the US, for reasons including the cost of filing and litigation in Europe as well as the complexity of the system here. Within the EU patent reform, it will be important to consider mechanisms to ensure high-quality patents,” said Kalliopi Spyridaki, EU affairs manager at SAS.

Talk of a global patent seems all the more premature when Europe can’t even agree on a single patent regime for itself. Earlier this year the European Commission launched a new drive to create a single patent litigation system for Europe, but Brimelow, among others, wasn’t very impressed.

“If you want to harmonize the litigation system you have to harmonize the system of granting patents first”, said Bruno vandermeulen, a partner at the law firm Bird & Bird. The creation of a single European patent, known as the Community Patent, has been blocked for over three decades, he said.

one way forward would be for EU countries to reach an agreement along the lines of the Paris Convention (which covers other types of intellectual property such as trade marks and copyright), vandermeulen suggested.

Brimelow said the failure of European countries to overcome their national self-interest and forge a single patents regime is very unsatisfactory and is largely down to a ‘what’s in it for me’ attitude.

vandermeulen went further, suggesting that the inertia shows that Europe’s patents community comprises “the last racists in Europe”.

“A lot of costs are caused by the current discrepancy between the various national systems as they are now. By creating an EU-wide patents system then the national level would have to disappear.”

The language issue is often cited as the main stumbling block for the creation of a Community patent. But Brimelow said that it has nothing to do with problems of expression or being understood. “It’s about national identity and as such very important,” she said.

Similarly, many patent practitioners feel that the need for a national patent office in all 35 EPo countries is more about emotion than about real need.

They suggest that the way patent offices are funded and structured needs to be re-worked. Countries feel they need a patent office like they need a national airline but it was suggested that there should be more cooperation, so that, for example, the best examiners in one particular field handle all applications in that field across Europe.

Another suggestion for the national patent offices that arose from the seminar: small innovators especially will always want to work in their own language, so perhaps the majority of national patent offices should serve as advisors to potential applicants rather than as patent examiners.

Food for thought indeed.

Is the demand for patents stifling reform?Paul Meller, Brussels

RESEARCH AND INNovATIoN: WHAT’S NExT IN BRUSSELS?6 November 2009

Featuring• Prof. John Wood, Chair of the European Research Area Board (ERAB)• Maria Da Graça Carvalho, MEP, member of the Committee on Industry, Research• and Energy (ITRE)• James Elles, MEP, member of the Committee on Budgets• Diogo Vasconcelos, Chair of the Business Panel on Future EU Innovation Policy,• and Distinguished Fellow, Cisco Systems International• Olof Sandberg, Senior Adviser, Ministry of Education and Research, Sweden• Luc Soete, Chair, Knowledge-Based Economy Expert Group and Director, United• Nations University-MERIT• Bjarne Kirsebom, Minister, Research, Permanent Representation of Sweden to the• European Union• Gernot Klotz, Executive Director Research and Innovation, CEFIC• John Wyles, Director, Science|Business Innovation Board

MEETING 8:

one Lisbon process is on the way out: the aim of Europe becoming the most competitive knowledge-based economy in the world by 2010. That process and its targets are being quietly forgotten. But another, broader, political process is under way, with the Lisbon Treaty set to come into force by the end of 2009. A new European Commission is being formed and a new European Parliament was voted into power just a few months ago.

The hope among several scientific advisory groups is that the momentum around these developments will provide an opportunity for the EU to update its approach to research, development and innovation (RDI) and bring it

into the heart future EU policy.

In the aftermath of the elections to the European Parliament several groups set out their recommendations to European policymakers on what the major challenges for society are and what needs to be done if they are to be tackled. A Science Business Policy Bridge event, held in Brussels on 6 November, brought these different groups together with the aim of finding common ground on the essential principles needed for an EU policy on research, development and innovation fit for the 21st century.

“We need a radical new approach for innovation,” said Maria Da Graça Carvalho,

a member of the European Parliament’s committee on industry, research and energy. She urged the definition of innovation to be widened, to cover for example innovation in childcare, education and healthcare services. “Innovation and knowledge are going to be central to a lot of other EU policies,” she said.

This central role for innovation and knowledge was underlined by a plea from the expert groups that RDI programmes focus on the “grand challenges” – the major challenges facing society.

This does not mean climate change alone. It includes issues such as healthcare for an ageing population and sustainable

What next in Brussels?Anna Jenkinson

consumption and production. A step in the right direction, said seminar participants, is the EU’s Lund Declaration from July 2009, which says that “European research must focus on the Grand Challenges of our time moving beyond current rigid thematic approaches”.

The expert groups are not short of specific suggestions on how to turn this wish into reality. Ideas include directing a third of all funding and a third of all scientists towards research focused on societal challenges.

Come together

Bringing people together and removing barriers between individual disciplines was also emphasised by the European Technology Platforms expert group, which was formed to give the European Commission advice on the future role of these platforms. ETPs, which connect European companies, knowledge institutes and policy makers in individual technology fields, should form temporary clusters to work on solutions to a particular societal challenge, the ETP expert group said.

Such clusters will also help foster an environment of open innovation, considered a key element if Europe is to innovate in a globally significant way.

“open innovation is based on the power of networks and access to knowledge across Europe and globally,” said the Business Panel on Future EU Innovation Policy, which emphasises how information technologies are transforming how people interact. Meanwhile, the European Research Area Board has said knowledge institutions of the future will be open and digitally networked, and they will cooperate with industry and society.

But grand ideas are not enough. If the grand challenges stand any chance of being solved, EU member states need to coordinate better, there needs to be less paperwork, and all aspects of RDI funding, regulation and standard-setting must pursue the same aims, the expert groups said.

Go for gold

EU programmes need to play a greater role and ensure that they are more attractive to industry and academia by being more flexible – and being the gold standard for excellence, the groups said.

once again, money matters, and how to fund all these ideas of focusing on the grand challenges, investing in world-class research infrastructure, open innovation and better governance is another big issue.

MEP James Elles, the longest-serving member of the European Parliament’s budget committee and one of the seminar’s speakers, said that a scarcity of funds and high government deficits means that a focus on excellence is required more than ever to make the most of available funds. The more the focus is on excellence, the more likely it is that the funds will be available, he said.

Several financing ideas generated interest. For example the Knowledge-Based Economy expert panel has suggested a new target for target Europe’s knowledge investment target: 3 per cent. By 2020, said the panel, 1 per cent of Europe’s GDP should be spent from public funds on research and development and 2 per cent on higher education.

The Business Panel on Future EU Innovation Policy came up with a new meaning for the acronym EIB: rather than European

Investment Bank, it could be a European Innovation Bank, putting innovation at the core of financial institutions.

Whatever the avenue pursued, Europe has to find fiscal policies and new public-private co-financing methods that will make it easier for researchers, engineers and entrepreneurs to find the cash they need to get their ideas to the marketplace, the groups agreed.

The overriding message: innovation must play a pivotal role in the EU. By coming together and sharing their ideas and suggestions, the various expert groups underlined the urgency of the need to change the EU’s mindset. It remains to be seen whether they can convey that urgency to policymakers.

FOCUS/SCOPE

• Focus on the direction, not the rate, of technological change. Focus RDI priorities on the Grand Challenges/societal challenges.

• Broaden the definition of innovation in policy. Think globally in innovation policy and programmes.

• Invest in e-science and digital infrastructure, e.g. broadband in every home and office and smart electricity grids.

• Focus on excellence and encourage risk-taking. EU programmes should stand for best practice across Europe.

• Funding for demonstration projects should be easier.

GOVERNANCE

• Improve systematic long-term planning for RDI policy and programmes, including a Green Paper exercise to include many stakeholders.

• Better coordinate/synchronise EU policy between Brussels and the member-states, and between governments and other stakeholders. Engage social actors in policy formulation from the start.

• Define the new Chief Science Advisor role as a step towards good advice and leadership on RDI issues at the EU.

• Use public procurement as a tool to encourage innovation.

• Reform of the EU administration for RDI through:

- Creation of arms-length agencies - Reform the financial regulations to

reduce red tape - Create more flexibility in programming,

to adjust to changing needs

FUNDING

• Raise the focus and profile for innovation at the European Investment Bank, and make a European Innovation Bank, to focus on the knowledge economy.

• Create new joint partnerships between the European Investment Fund and others, e.g. in corporate venturing and social innovation funds.

• Create a European version of Britain’s post-war 3i: a public/private direct investment fund to encourage restructuring towards innovation.

• Set a new, post-Lisbon 3% target for public-sector spending: 1% of GDP goes to R&D, 2% to higher education.

OPEN INNOVATION

• Improve mobility of researchers to encourage cross-fertilisation of ideas and people across borders, disciplines and the industry/academic divide.

- End academic tenure?

• Get a community patent – reform intellectual property rules to create a single market

• Create new platforms and networks for innovation. European Technology Platforms should broaden to include innovation action plans.

• Improve public attitudes and the innovation culture through:

- An emphasis on trust and ethics in R&D - Highlighting the role of

entrepreneurship

Research and innovation: ideas on the tableScience|Business reporting

An overview of some of the recommendations discussed at the Science|Business Policy Bridge event “Research and innovation: what’s next in Brussels?”, held in Brussels on 6 November 2009.

The European Parliament is proposing to spend €1 million to improve long-term policy research in order to inform decisions taken by the leadership of the European Union. The aim is for all EU institutions to be able to approach policy-making from the basis of common analyses of the probable outcomes of major issues facing Europe, said MEP James Elles in an interview with Science|Business.

The proposal, made in a recently adopted amendment to the EU’s draft budget for 2010, calls for a system to be set up across the EU’s various institutions that would be coordinated between the European Parliament, the European Commission and the Council of Ministers. The goal is for it to be up and running by 2012.

Elles, who tabled the amendment on behalf of the European Conservatives and Reformists group, said the system would have a similar function to the US National Intelligence Council, which describes itself as, “A centre of strategic thinking within the US Government,” providing the President and senior policymakers with analyses of foreign policy issues.

The move by the European Parliament – which awaits approval by the Council – is one of a series of calls to improve the way the EU

plans its policies. The Parliament is due to release a report, “EU policy challenges 2009-2019”, the first time it has drawn up such a long-term analysis. Meanwhile, the European Commission recently published its foresight report, “The World in 2025.” And in recent weeks several scientific advisory groups have handed policy makers their assessments of the major challenges for society and recommendations of what needs to be done to tackle these issues.

Elles, the longest-serving member of the European Parliament’s budget committee, told Science|Business that examining long-term trends must become a central a part of European thinking, as is the case in the US and China. Such an approach is essential for effective forward planning and the right budgetary analysis, he said.

“There is very little capacity for the analysis of long-term trends in Europe,” Elles argues. Too much time has been spent concentrating on “reassuring and underpinning our structures” rather than on the debate of, “how we remain competitive in the 21st century,” he said.

Elles founded the Transatlantic Policy Network way back in 1992, and relations between business and policymakers in the US and Europe is an issue close to his heart.

one of his goals for the new parliamentary term is to put a greater focus on how a trans-Atlantic partnership can address global challenges.

one manifestation of US’s technological advantage over Europe can be seen in the vastly greater strength of its IT sector. Part of the reason for Europe’s long-term failure to foster global IT companies is that European policy does not recognise the extent to which the Internet is a tool for innovation, Elles said.

The European Internet Foundation – co-founded by Elles in 2000 and led by MEPs with membership from technology companies and associations – aims to change that mindset. In its latest report, the foundation analysed probable outcomes for how the digital world may look in 2025, and identified areas that should therefore be EU policy priorities.

There seems to be no shortage of recommendations circulating, but it remains to be seen to what extent this advice is heeded and coordinated.

European Parliament proposes €1M system to improve foresight researchScience|Business reporting

“A lot of costs are caused by the current discrepancy between the various national systems as they are now. By creating an EU-wide patents system then the national level would have to disappear.”

P O L I C Y B R I D G EP O L I C Y B R I D G E

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