A more commercial future for IRCs?

Brussels, 26 Nov 2002

The seventh annual meeting of the Innovation Relay Centre (IRC) network in Nuremburg from 20 to 22 November featured discussions on how IRCs should be financed, and in particular, on the issue of how much of their income should come from European Community funds.

Established in 1995 as a pilot project to encourage technology transfer across Europe, the IRC network began with 75 per cent of its funding coming from the European Community and the rest coming largely from national authorities. This percentage has fallen considerably in the intervening years down to the current level of 50 per cent.

Addressing an audience of IRC representatives from all around Europe at the meeting, Giulio Grata, Director of the Innovation Directorate from the European Commission's Enterprise DG, announced that it was now time to consider dropping the Community's financial input below the 50 per cent level, perhaps to 40 per cent.

Heinz Zourek, Deputy Director-General of DG Enterprise, said that the Commission is satisfied with the work of the IRCs, but that it was always meant to be a 'kick off' project. Now, almost eight years after the IRC network was established, he believes it is time to release the network further into the market to see if it is a commercially viable operation.

Mr Grata discussed the way in which IRCs might respond to this challenge. They would have to analyse the new situation with their national authorities and business clients, he thought. They could extend their range of services or streamline them: 'Maybe you discard some things that are of lesser interest. Maybe you concentrate on things that bring more rewards. Adjustments will have to take place.'

One response to a further cut in Community funding would be for IRCs to begin charging for their services. Vassilios Tsakalos of the IRC Help-Forward service told one seminar at the conference that this would enhance the professional status of IRCs and lead clients to value their work more. Staff morale can also be boosted, he argued, when IRC services are accepted by the market and not just funded by public money.

However, Peter Wolfmeyer of IRC North Rhine-Westphalia made the point that although IRCs could have made some money from clients two years ago, the more difficult economic conditions of today mean that now is not the right time to start charging clients for services. Hans-Jorgen Flor of IRC Norway added that charging raises a public service dilemma for IRCs whereby they may indeed be able to make money by working for the larger SMEs (small and medium sized enterprises), but this means that they might have to neglect the smallest businesses.

Mr Zourek responded to these points by saying that if IRCs do not want to change to a more commercial mode of operation, they would have to take on the status of a public service. In this case, he said, 'we would have to change the rules radically [...] the European Parliament would establish and run the networks and you would have to stand under the control of the Court of Auditors because then you would be rendering a public service.' This outcome would mean that IRCs would lose the flexibility that currently allows them to be so helpful to enterprises.

The Commission will continue its discussions with the Member States on the issue but in a closing address to the conference, Yannis Tsilibaris Acting Head of the Networks and Services Unit in DG Enterprise, asked the audience of IRC representatives not to rush to judgement. It may be a number of years, he claimed, before any further reduction in Community funding for IRCs is actually implemented, although it is important at this stage to prepare the network for such an eventuality.

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CORDIS RTD-NEWS/© European Communities, 2001