Commissioner Danuta Hübner: “Research, Development and Innovation in new Regional Agenda: Developing Synergies” EP ITRE Committee

Brussels, 29 November 2005

Honourable Members,

I am delighted to have the opportunity to join you today and discuss the Commission’s proposals for cohesion and research. Let me start by saying that I am a strong believer in working together. I am convinced that in order to cope effectively and efficiently with the challenges which are laying ahead of the Union we have no other alternative.

This is particularly true when we are seeking for synergy between different Community policies which take as an objective the EU capacity to innovate. Without a strong and sustainable capacity to innovate the Union will not become a better place to live and work.

In the strive for exploiting better the synergy between the EU policies and harnessing all of them for the sake of innovation, the regional level is essential. And it is important to remember that we are not starting from the scratch, that already today we have many best practices entrenched in the regional policy. Clearly, the ideas which form the basis of innovation may come from research activities, but we all know that the definition of innovation is much broader.

It is equally important to remember that the regional policy is a tool for bringing about lasting structural changes and accelerating the pace of transition from traditional to a knowledge based economy in the economies of less prosperous regions of Europe. This is why support for research and innovation is of key importance in the Commission’s efforts to advance both economic and social cohesion and the Lisbon agenda.

Regional disparities with regard to R&D investment and innovative capacity

Some EU regions already perform well in relation to the Lisbon target of 3% of GDP being invested into R&D. However, only one new Member State has a region where R&D intensity is above 3% threshold. The lowest R&D intensities are found also in many Greek, Spanish and Portuguese regions. In many Cohesion Fund countries, even the regions with the highest investments in R&D are below 1%. The best – performing regions in Spain, Portugal, Poland, Hungary and Slovenia have R&D intensities of around 1,5%. However, low performance is not limited to the recently acceded Member States. R&D intensities of less then 1% can be found in regions in virtually all the EU-15 Member States as well, making strong regional concentration a feature of Europe’s research landscape. Whilst this may be inevitable in some regions with particular natural handicaps, it is not a model we can allow to continue if we are serious about the EU’s competitiveness and about reducing economic disparities.

Regions in Community research policy

Whereas regions are central to cohesion policy, they have been comparatively marginal to Community research policy. A Commission Communication of 2001 on “The regional dimension of the European Research Area” proposed a number of strategies and initiatives, without this making any substantial difference to the role which regions, particularly less favoured regions, play in 6th Framework programme (FP6). However, greater academic and political recognition of the role of regions as economic centres and the increased visibility of cohesion policy after enlargement has meant that regions receive increased attention in the proposals for 7th Framework Programme (FP7).

At present, FP6 contains only one activity focused explicitly on regions: the ‘Regions of Knowledge’ initiative, started as a pilot project in 2003 at the request of the European Parliament, with a budget of €2.5 million. It aims to build up regional research actors’ capacities and know-how on research policy and activities. A second call for proposals was issued at the end of 2004 to cover prospective studies, benchmarking and other analytical techniques focusing on increasing R&D investment at regional level. Projects will be selected shortly.

FP6’s ERA-NET scheme also provides support for projects on trans-national co-ordination of research activity at regional level, but the levels of awards to regional authorities are relatively low.

Participation in the RTD Framework Programme

For the participation in FP6, which varies considerably between Member States (it is dominated by Germany, the UK and France), regional data is not collected, but it is estimated that research actors in Objective 1 regions make up around 14% of participants in FP6. Some argue that, whilst this seems low, it is in line with the level of research activity conducted in these regions. The issue has become more controversial after enlargement, since a large number of Member States now appear to benefit comparatively little from the Framework Programme.

Participation in FP6 by type of organization also varies. In 2004, the largest share of FP funding (34%) went to higher education and almost 32% to research centres, indicating that the Framework Programme is primarily an instrument for academic research. Industry participants received just under 20% of the funding approved in 2004.

The target for SME participation in FP6 is 15%. No information is available on levels to date of SME participation in FP6, due to gaps in RTD’s contracts database. An Inter-Service Task Force found that funding requested by SMEs amounted to 13.0% in 2003: the actual level of funding awarded is likely to be slightly less.

From the point of view of cohesion policy it is those two elements – industry and SME participants – which are essential for the building of regional innovation capacity. This takes me to the central issue, which I would like to discuss with you today – how the Structural Funds support research activity now and what place is research and innovation going to occupy in the new regional agenda for 2007-2013 years.

Direct investment in RTDI through the Structural Funds

97% of the Structural Funds support for Research, Technology, Development and Innovation (RTDI) in the current financial perspective is made through European Regional Development Fund and it amounts to €10.5 billion – 8% of the whole ERDF envelope - in the form of grants.

The investment provided can be distinguished into four categories:

Ø research projects based in universities and research institutes receive about 26% of total RTDI investment. The selection of the project is made at the regional level and is based on strong competition between the applications. Some MS have “Science” Operational Programmes.

Ø research and innovation infrastructure (public facilities, but also technology transfer centres and incubators) receives slightly over 25% of the total;

Ø innovation and technology transfer and setting up networks and partnerships between businesses and/or research centres receives about 37% of the total;

Ø training for researchers (co-financed by the ESF) receives about 3% of the total.

About 70% of total Structural Funds RTDI investment goes into capacity building in Objective 1 regions. There is no significant difference between Objective 1 or 2 regions in terms of the share of funding going into particular categories of RTDI activity. The Structural Funds make no sharp distinction between research and innovation-related activities. However, the balance is strongly in favour of applied research and innovation, since these are likely to have greater economic benefits in the short to medium term.

Some Member States and regions devote a greater share of their programme resources to RTDI than others. Relatively low investment in this area characterizes Ireland and France, not simply the Cohesion Fund countries. In some cases, there may be sound reasons for this (e.g. if national support for this area is particularly high). However, it is an issue which the Commission will scrutinise when Member States put forward their future strategies for the use of Structural Funds.

Indirect support for RTDI through the Structural Funds

The Structural Funds have also supported the development of strategies as well as funded RTDI projects through the “innovative actions” programmes,. The “innovative actions” with the overall budget of 400 million EUR and more then 130 projects of 2-3 million EUR size focus on three strategic themes: (i) knowledge-based technological innovation (ii) sustainable development and (iii) information society. Each of these priorities has a network of regions; in the case of knowledge-based technological innovation it is ERIK (the European Regions Knowledge-based Innovation Network). Here partner regions deal with fundamental issues related to knowledge based technological innovation, such as clusters and business networks, regional innovation benchmarking and foresight, services and support to start-ups and spin-offs, the relationship between science and industry. Conclusions reached in such networks feed back into mainstream Structural Funds programmes and further improve their quality.

The Community Framework Programme and regional policy in 2007-2013

A new element in the 7th Framework Programme is its increased focus on regions. It is achieved in particular by the programme “Capacities”, one of four major strands making up the 7th FP.

Capacities include support for research infrastructures, research for the benefit of SMEs, the new Regions of Knowledge action and the Research Potential action focused on convergence regions. This is the programme with the strongest direct links to cohesion policy, where the EU level can best co-operate with the activities at the national and regional levels. In particular two actions are directly relevant – (i) an extended “Regions of Knowledge” initiative, aimed at strengthening the research potential of European regions by encouraging and supporting the development across Europe of regional “research driven clusters” associating universities, research centres, enterprises and regional authorities and (ii) an action on “Research Potential”, focused explicitly on convergence regions, aimed at strengthening the capacities of researchers in these regions to successfully participate in research activities at EU level.

Steps to increase coherence between Community policies

More emphasis on research, development and innovation in cohesion policy for 2007-2013

The new generation of cohesion policy programmes in 2007-2013 aims to increase coherence between cohesion policy and the Lisbon agenda and between cohesion policy and other Community policies. The synergy with research policy have therefore received considerable attention. They take two forms:

First, as set out in the Community Strategic Guidelines for Cohesion Policy, we propose to increase and improve investment in RTDI through the Structural Funds. The guidelines identify four priorities for investment in this respect:

• strengthening co-operation among businesses and between businesses and public research/higher education institutions by supporting the creation of regional and trans-regional clusters of excellence;
• supporting RTD activities in SMEs and enabling SMEs to access RTD services in publicly-funded research institutions;
• supporting regional cross-border and transnational initiatives aimed at strengthening research collaboration and capacity building in priority areas of EU research policy;
• strengthening R&D capacity building, including information and communication technologies, research infrastructure and human capital in areas with significant growth potential.

Synergy with FP7 is therefore present through both the general objectives and through specific links. The general aim will be to build up research and innovation capacity in all regions, thereby increasing their competitiveness and enable participation in FP7.

Secondly, there will be specific complementarities in terms of:

- certain areas of investment (e.g. major European research infrastructures, increasing the potential of research teams in convergence regions, emerging and existing centres of excellence, researchers' training and conditions)

• implementing of the research strategies developed under FP7’s 'Regions of Knowledge'.

There will therefore be links between the policies throughout the strategy-formulation and implementation cycle of the Structural Funds programmes.

What more can be done?

As I mentioned before, we in the Commission are determined to work together across different Directorates General to strengthen the links between research, innovation and growth.

Among new ideas that have obvious relevance to a wide range of EU policies – on research, innovation, competitiveness, SMEs – is the idea of clusters. Let me quote Michael Porter, perhaps the foremost economist in this field: “Regional economic performance is strongly affected by the strength of clusters and the vitality and plurality output of innovation.” And the “importance of regional economies to the overall performance of nations” is “striking”.

That is why I am working together with Janez Potocnik and Günther Verheugen on new approach to clusters, seeking to ensure that our policies work together and improve EU policy framework for innovation. There is scope for building on existing strengths, involving authorities and other stakeholders at the regional and local level, and focusing on areas of market failure such as education and training, industry-research links (including science parks, business incubators, SME technology networks), and access to finance. On the latter let me tell you that I have presented recently to Member States a new facility, JEREMIE. The main Objective of this facility is, which contains a series of coherent actions to improve the access of innovative SMEs to finance, is to improve and enhance financial engineering capacity at the regional level. Finally, in June 2006 I organize a conference on best practices in technology transfer, which will focus on clusters. My objective is to turn it later into an educational facility, which would help in training cluster managers at the regional and local level.

Honourable Members,

I thank you again for the opportunity to address you today and look forward to hearing your views on what I have said. I understand that you have invited the opinion of the REGI Committee on FP7 and I welcome this as a sign that both our institutions are working to step up coherence between cohesion and research policies. I hope that my remarks illustrate the role which the new regional agenda play in increasing economic growth and competitiveness and bringing about a widespread knowledge-based economy.

Item source: SPEECH/05/751 Date: 01/12/2005 Previous Item Back to Titles Print Item Selection and Arrangement Copyright © 2005 Public Info Net Ltd.