Funding Innovation in the EU

The Commission wants to improve EU’s research and innovation performance and strengthen its competitiveness by creating a better funding system. Therefore, in its Green Paper published on the 9 February 2011, the Commission launched a public consultation to collect recommendations on this issue.

In the context of the Europe 2020 Strategy for smart, sustainable and inclusive growth, the EU has the objective to increase spending on research and development to reach 3 % GDP by 2020. Future EU funding programmes should focus more on Europe 2020 priorities, address societal challenges and key technologies, facilitate collaborative and industry-driven research, streamline the instruments, simplify access, reduce time to market and further strengthen excellence.
The Commission proposes a “Common Strategic Framework” for EU research and innovation funding, which was approved by the European Council at its meeting on 4 February 2011 as a way to improve the efficiency of research and innovation funding at national and EU levels. This Green Paper identifies key questions on how to achieve these objectives.

Improve EU’s research and innovation performance

In order to improve EU’s research and innovation performance, often outperformed by its competitors in these domains, changes should be made: 
• research and innovation funding  should be better linked and closer to EU’s policy objectives develop a simplified set of instruments and rules 
• public research and innovation funding is primarily organised at the national level, or an EU level actions would generate greater efficiencies and impact
• EU wide programmes should leverage private investment and make Europe a more attractive investment location
• integrate policies and EU funding from research to market which would improve turning knowledge into innovation

Current EU research and innovation programmes

The proposed Common Strategic Framework would cover the current research and innovation initiatives which are: 
• Seventh Framework Programme for Research which support research, technological development and demonstration activities across the EU
• Competitiveness and Innovation Framework Programme which aims to encourage the competitiveness of European Industry, with SMEs as its main target
• European Institute of Innovation and Technology which brings together the education, research and business sectors to stimulate innovation
The above programmes are set to cover the period 2007-2013. Their interim evaluation identified some deficiencies like the lack of a whole chain approach to research and innovation, the complexity of instruments, over-bureaucratic rules and procedures and a lack of transparency. Therefore, improvements for future programmes should focus on: 
• clarifying objectives and how they are translated into the supported activities, while
• maintaining flexibility to respond to emerging policy needs
• reducing complexity: reduce the set of instruments and the lack of coordination between EU and Member State which leaves a potential for overlap and duplication
• increasing added value and leverage effect on other public and private resources and avoiding duplication and fragmentation of funds
• simplifying participation by lowering administrative burdens, reducing time to grant and time to payment and achieving a better balance between cost and trust based approaches
• broadening participation in EU programmes : boost participation of SMEs newer Member States and third countries which could offer opportunities to capture the benefits of knowledge produced outside the EU
• increasing the competitiveness and societal impact from EU support: this would require better uptake and use of results by companies, investors, public authorities, other researchers and policy makers. It also involves supporting broader innovations like non-technological and social innovation
• better communication of EU’s objectives to a wider audience : the ultimate users of innovations like citizens, businesses or the public sector, should be involved much earlier in EU’s actions to accelerate and broaden the exploitation of results and to encourage greater public acceptance in sensitive fields such as security or nanotechnology

Towards a Common Strategic Framework for EU research and innovation

In line with the priorities of the Europe 2020 strategy, the Common Strategic Framework will focus on addressing societal challenges, encouraging the competitiveness of EU's industries and the state of its scientific and technological base.
At EU level, various programmes support research and innovation but they often operate independently of each other. The Common Strategic Framework would cover all relevant EU research and innovation funding currently provided.
The Common Strategic Framework aims at making EU funding more attractive and easy to access for participants. It would allow the development of a single entry point with common IT tools or a one stop shop for providing advice and support to participants.
The Framework would also enable the development of a simpler and more efficient structure and a streamlined set of funding instruments covering the full innovation chain.
There would be an administrative simplification through the development of a more standardised set of rules covering all participants in EU research and innovation programmes.
Public funding for research and innovation is mainly administered by Member States and often this fails to take proper account of its trans-national nature. Leveraging other public sources of funding would bring more efficiency, but this involves strong financial and political commitments from national and regional public authorities.

Tackling societal challenges

EU funding programmes should be linked closely to Europe 2020 objectives in areas of climate change, energy security, demographic ageing or resource efficiency by putting a stronger focus on tackling societal challenges.
Careful consideration is needed to identify those challenges. Current EU funding programmes have put effort in tackling societal challenges, by bringing researchers from across Europe together in collaborative networks. However, this approach does contribute achieving the necessary flexibility, creativity and cross disciplinary research needed.

Strengthening competitiveness

Europe needs to improve its performance in creating impact from research and innovation funding. Obstacles remain in transferring research outcomes from the laboratory through to the development, commercialisation and application phases. Industries should set priorities and public and private partnerships and it also involves broadening support across the full innovation cycle.

Enabling technologies such as ICT, nanotechnology, advanced materials, manufacturing, space technology or biotechnology is of vital importance to Europe's competitiveness.
Intellectual property rights governing EU research and innovation funding are decisive for efficient exploitation and technology transfer, while at the same time they need to ensure access to and rapid dissemination of scientific results.
The low level of private finance for research and innovation is a major slow down for Europe’s progress. Future EU research and innovation programmes should make full use of financial instruments to support the commercialisation of research results, the growth of innovative businesses and investments in major infrastructures.
New approaches could also be considered, particularly those stimulating the demand side and aiming to involve public and private end users earlier and more closely in the innovation process. 

Strengthening Europe's science base and the European Research Area

Funding provided through the Common Strategic Framework should be used to speed up progress towards a unified European Research Area.
In order to reach world class excellence, all researchers across the EU should be provided with the means to develop research and compete. This requires Member States to pursue modernisation agendas for their public research base and sustain public funding. EU funding, should assist to build up excellence where and as appropriate.
Through the actions of the research infrastructures programme, planning, preparation and construction of large scale research infrastructures have been improved.  A further deployment of e-Infrastructures is important to allow remote and virtual access to research facilities and to scientific information.

Next steps

In the Green Paper, the Commission raises a number of questions on all the issues concerned

in further developing a common strategic framework for EU research and innovation funding and its related instruments. Member States, the Parliament, and organisations are invited to participate in the debate and submit comments. The consultation will close on 20 May 2011.

On 10 June 2011, the Commission will organise a closing conference as a follow-up of the public consultation and discuss the results with the stakeholder community.
The Commission plans to put forward its formal legislative proposals for a Common Strategic Framework for EU research and innovation funding by the end of 2011. These proposals will be accompanied by ex-ante impact assessments, providing the necessary evidence base for the proposed options. The future EU research and innovation funding programmes will be part of the Commission's proposals for the next Multi-annual Financial Framework to be presented in June 2011. Specific proposals for funding programmes are due to be adopted by the end of 2011.