Bratislava, 17 October 2005
Conference, EU Structural Funds and RTD Support in Slovakia in the context of experiences of other Member
States - Technopol Congress Centre
Bratislava, 17 October 2005
Ladies and gentlemen,
I am delighted to be with you today to debate this crucial issue – crucial for economic growth and for Slovakia’s future Structural Fund programmes. As we all recognize, R&D is one of the key drivers of economic productivity and growth. As a source of innovation, it is particularly important in a Europe which – unlike some other global competitors - cannot rely on cheap labour or cheap supplies of natural resources to increase its levels of prosperity.
It is equally important as a tool for bringing about lasting structural changes in the economies of disadvantaged regions of Europe and enabling them to achieve their potential. This is why support for research and innovation already forms a large share of the support which the Structural Funds, particularly the European Regional Development Fund, provide for economic development.
Close to 10 billion euro is being invested in research, technological development and innovation by the Structural Funds between 2000 and 2006 – in technology transfer, research projects and in research infrastructure and equipment. And this is being done in regions which would not otherwise have benefited from this type of investment. This illustrates why the SF play a major part in delivering the EU’s Lisbon goals as well as in bringing about greater economic and social cohesion.
We are resolved that we need to progress further in the next programming period. So let me tell you what role we see for RTD in the next generation of Structural Fund programmes and how our proposals support it.
The draft regulations which the Commission proposed over a year ago already highlighted research and innovation as an investment priority for the Funds. The Community Strategic Guidelines we proposed in July put more flesh on these proposals. Increasing and improving investment in RTD is one of the four components of our Guideline on “improving knowledge and innovation for growth”. It is no accident that research is just one part of this guideline. From the point of view of cohesion policy, research investment is a means to an end – faster growth and job creation. So we need to see research not in isolation, but as the start of a process of knowledge-production which ends in commercial results.
Curiosity-driven basic research is laudable and important, but its economic benefits are often long-term at best. In contrast, the Structural Funds’ programmes need to improve regions’ economic performance in the short to medium term as well. So I encourage you to look at R&D in the context of innovation and to focus the Structural Funds on those R&D investments which will pay real economic dividends, whether you are thinking about research infrastructure or how to ensure that the benefits of foreign direct investment are genuinely integrated into your productive sector. Bear in mind that there are other instruments to support research in its pure form, including at Community level.
The Commission has worked to ensure that the Community instruments are more in tune with one another than in the past, so that the 7th Research Framework Programme will contain some elements destined to support research activity in less developed regions and the Structural Funds will complement Framework Programme priorities. We therefore wish to see national and regional authorities draw up strategies which enable their public and private sector research players to take advantage of both instruments.
The Structural Funds are unique in that they provide guaranteed funding for building up a region’s capacity to undertake research and innovation by improving facilities and know-how in both the public and private sectors. The support they provide can increase the extent to which a region’s public sector, businesses of all sizes or individuals use and benefit from new technologies. Policy makers need to address how they will use the opportunity which the Structural Funds provide to create a platform for future research and innovation activity. If we are genuine about achieving the Lisbon goals and realising the potential of all Europe’s regions, we need to move beyond a situation where 25% of R&D investments are made in just 8 regions. The Structural Funds offer the chance to do this.
Turning now to the specific issues of Structural Fund programming – what lessons have we learnt from the past? What issues demand particular attention in future?
First, we need to make sure that the level of investment from the Structural Funds into research and innovation is satisfactory. I would like to see all Member States and regions dedicating a substantial share of their Structural Fund, particularly their ERDF, resources to research and innovation in future. A good number already do, even in Objective 1 programmes, where a few leaders invest around a quarter of their ERDF resources in Research, Technological development and innovation. This may not be feasible in all regions in the short term, but my services will examine carefully whether the new programmes’ proposed resource allocations to RTDI represent a step up from what is being invested now and whether they are sufficiently ambitious.
Of course, sound investment depends on a sound strategy. You are right to prepare early with discussions such as today’s. You have the knowledge of the strengths and potential of Slovakia’s regions. You can learn from experience in other Member States. And the EU has supported the development of a wealth of tools – innovative actions programmes to test out new approaches, regional foresight exercises to identify future research opportunities, support for drawing up regional innovation strategies – all of which you can draw on to inform your future strategy for research and innovation.
A high-quality strategy must be based on high-quality analysis. And whilst regions’ situations and potential differ significantly, in an EU of over 200 regions, there are always similarly-placed regions with which to exchange experience and collaborate. Your objective must be to have strategies adapted to the situation in each region, corresponding to its economic development needs and potential, especially the needs of its small and medium-sized businesses. Clearly, some regions start from a stronger position than others. The objective must be to use the Structural Funds to enable each to improve on its current position.
From a strategic point of view, investment to support research and innovation should be seen in its wider context. Support is also needed to develop skills – whether this is ensuring a better supply of specialist researchers, developing technology transfer specialists, or ensuring that private sector managers fully understand the business potential of research and innovation. Research and innovation investment is also unlikely to flourish without adequate business support facilities and services to make practical links between research and private enterprise. And since hi-tech ventures are often failed by the market even in sophisticated financial environments, we need to consider how to use the Structural Funds for this type of financial engineering.
Future programming strategies for the Structural Funds should encompass these issues, since the quality of the wider environment for conducting research and producing innovation is at least as important as providing investment for specific projects. This is why my services, in collaboration with DG Information Society, are organising a Conference on knowledge society and Structural funds in Gothenburg in November. It will showcase successes of the Nordic experience, but will have very high-level participation from the EU-10, including Slovak ministers as speakers, to debate this experience for your situations.
I mentioned the opportunity which the EU offers for collaboration between regions. Today’s conference wisely draws on the experience of other Member States to inform discussion and Slovakia’s plans for the future. I do not think I can overemphasize the importance of learning from one another’s experience – as we will do at Gothenburg - and from joining forces. We can do this at the level of Member States and regions in conferences like this one. We also need to ensure this happens within and between regions.
We know that innovation is the result of inter-action and co-operation, but we also know from experience that external players only rarely achieve it on their own. They need public authorities to provide a supportive environment for collaboration. This begins by administrations ensuring their economists and their research and innovation specialists continuously work together to ensure joined-up policies, which take account of the needs and potential of both the public and private sector. We need to intensify our efforts in this respect to reach our strategic goals.
The need to collaborate more closely is also a critical issue on another level. One of Europe’s key weaknesses, even in highly developed regions, is the fact that research results are often not translated into commercial success because research and business circles operate independently and because there is a lack of specialist intermediaries to link up researchers with entrepreneurs and to advise them.
It is essential to connect public authorities, large and small businesses and universities and research institutes and to form regional networks between them. Again, this is a major theme at Gothenburg. Structural Funds programmes must also ensure that there are advice services and facilities to support the process of transforming knowledge and technological development into commercial products and processes. Support for technology transfer already forms almost 40% of ERDF investment in the area of research and innovation and I would like to see its share in programmes increased.
One last issue I wish to emphasize is the need to focus investment. You will be aware that one of the recommendations of the Commission’s Cohesion Guidelines is the need to support the creation of regional and trans-regional clusters of excellence. We want to move beyond a situation where research and innovation are hailed as the key motors of growth and competitiveness, but mainly conducted in a few privileged regions. But experience shows us that research needs a critical mass of people exchanging ideas – and sharing sometimes expensive facilities.
Even today, geographical proximity plays an important role in innovation, making it particularly important to support networks linking businesses to other firms, to universities, research centres and specialists in technology transfer. So clusters are essential. And these – thanks to modern information technology – can be virtual also. What is necessary is to use strategic planning tools to make sure that opportunities for growth poles are properly identified and not limited only to, say, regions with a capital city.
These form challenging questions for future programmes. But I am convinced that there are five key elements:
- the need to intensify collaboration and take a wider view in policy-making,
- the need to develop more sophisticated and ambitious strategies,
- the need to be results-oriented in our investments
- the need to forge links between the worlds of research and business in order to fully benefit from the potential of both, and, of course
- the need to make sure that the opportunity which the Structural Funds offer for supporting research and innovation is really used to the full.
In the tense context of budget negotiations, there is a tendency in some quarters to characterize the Structural Funds as a mere income redistribution mechanism through which wealthier Member States prop up the economies of poorer ones. Nothing could be further from the truth – the Structural Funds support profound structural change in regional economies through supply-side investments. Investments in better infrastructure, modernizing the productive sector and improving skills and adaptability are not dependency-perpetuating subsidies. They are ways of transforming a region’s economy in a lasting way, enabling it to realise its potential and benefit both its own citizens and the EU as a whole. I firmly believe that the Structural Funds can help to address Europe’s underperformance in research and innovation and I exhort you to take full advantage of the unique opportunities which they offer both for supporting structural reform and for creating a knowledge-based economy.
I wish you a fruitful debate this afternoon and hope that the ideas it generates will substantially enrich the future strategy for investing the Structural Funds to Slovakia’s and Europe’s benefit.