RTD Programmes - the future Investing in research : an action plan for Europe

Website: ec.europa.eu/research/era/index_en.html
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Policy Documents



The following information comes from the Europa Website, from which links to further doccuments can be obtained. These include:

• COM(2003)266 final of 30.4.2003 - Text of the Communication Investing in Research
• SEC (2003) 489 - Text of the background information (Staff working paper) including review of national policies and assessment of the contribution of FP6 to the objectives)

A CALL FOR ACTION

The Barcelona European Council launched in March 2002 a call for action to increase investment in research and technological development and close the gap with Europe's main competitors. Investment in research, the European Council decided, should rise from 1.9% to 3% of GDP in the European Union by 2010, and the share funded by business should rise to two-thirds of the total. Since then all stakeholders have confirmed the relevance of that call and the need to act quickly, on the lines suggested by the Commission communication of September 2002 "More research for Europe: towards 3% of GDP" . The gap in research investment between the European Union and the United States is already in excess of € 120 billion per year and widening fast, with alarming consequences for the long-term potential for innovation, growth and employment creation in Europe. As explained in the September 2002 communication, the gap is linked to less attractive conditions for private investment in research in Europe, due both to lower and possibly less effective public support, and to various obstacles in the wider framework conditions of European research and innovation.

From September 2002 onwards the Commission undertook a wide consultation of European institutions, Member States, acceding and candidate countries, as well as of stakeholders, notably European industry and the financial sector. Responses were overwhelmingly supportive of the 3% objective and of its emphasis on business investment in research. Many replies contained useful insights and proposals that have been used in preparing the present action plan. All Member States, acceding and candidate countries agreed on the importance of increasing investment in research, and most indicated that they had already put in place policies and concrete measures to that effect, or were in the process of doing so. Many have also set national targets in line with the European 3% objective. For example, both France and Germany have adopted the 3% objective for themselves, and so has a future Member State, Slovenia. Momentum is thus building up.

Both the European Economic and Social Committee and the Committee of the Regions supported the 3% objective, as did the Members of the European Parliament who took part in a public debate on that theme.

The numerous detailed replies received from industry and business associations were also unanimously supportive. Many, like the European association of industry (UNICE) and the European Round Table of Industrialists (ERT), stressed that reaching the 3% objective is crucial for Europe's competitiveness but will require major policy changes to restore Europe's attractiveness for research investment. ERT made the 3% objective the main focus of its recommendations to the European Council of March 2003 and UNICE one of its major topics. Associations representing small and medium-size enterprises (SMEs) concurred on the importance of increased investment in research for their constituencies.

A major lesson from the consultation is that large European companies are planning to maintain a significant degree of investment in research despite the current economic slowdown and despite, notably, the sharp downturn in some high-tech sectors. However, as tougher economic conditions make it even more important for these companies to rationalise their global development, they are not planning new research investment in the European Union but rather in other regions that they deem more attractive, such as the United States and some Asian countries. European SMEs, meanwhile, find that their ability to invest in research and innovation is often limited by both reduced auto-financing capacity and more difficult access to external financing. The current economic conditions have further restricted their access to finance for research and technological innovation activities. The economic downturn makes it thus even more important and urgent to focus public action on supporting research and innovation.

According to an econometric study undertaken for the Commission services , attaining the 3% of GDP objective for research investment would have a significant impact on long-term growth and employment in Europe, in the order of 0.5% of supplementary output and 400,000 additional jobs every year after 2010 . The full impact on growth and employment may be even higher thanks to the boost that additional world-class research will give to the international competitiveness of European industry and services and to Europe's global economic attractiveness. Last but not least, more research in areas of social and environmental interest will help Europe lead the way towards a more sustainable future. As emphasised by the Commission in its report to the March 2003 European Council , investing in research is thus at the heart of the strategy set by the Lisbon European Council in March 2000 for Europe's economic, social and environmental renewal.

The European Council of 21 March 2003 called on the Commission to prepare the present action plan and asked the Commission, the Council and Member States to take action on its basis.

The action plan is based on a broad and systemic approach to research and innovation. Both the consultation and supporting studies showed that such an approach is the only credible path to deliver the major increases needed in public and private research investment. Assuming an average EU GDP growth rate of 2% per year until 2010, the targets set in Barcelona (3% and 2/3 from the private sector) require a growth rate of 8% per year for the overall European research effort, shared between a 9% yearly increase for business funding and a 6% yearly increase for public funding. .

In order to achieve this, the action plan first addresses the need to develop a common understanding shared at all policy levels and by all stakeholders, and to ensure sustained and coherent progress throughout Europe. This can notably be achieved by using, where appropriate, an open co-ordination process, European technology platforms and a mutual learning process for European regions, and by designing and implementing policy mixes that combine in a coherent way a broader range of policy instruments. Making the whole of Europe working together is an important issue (see chapter 3 of COM(2003)266).

The action plan then covers successively aspects linked to the effectiveness of public support for research, to the level of public resources made available, and to the improvement of framework conditions:

• improving the effectiveness of public support for research and innovation, both financial and in the form of human resources and the public research base (see chapter 4);
• redirecting public resources towards research and innovation, through increased attention to public spending quality, adapted state aid rules, better use of public procurement (see chapter 5);
• improving framework conditions for research and innovation such as intellectual property rights, product market regulations, competition rules, financial markets, tax conditions and the corporate management and reporting of research (see chapter 6)

  The action plan should be seen in the broader context of the various policy initiatives and the co-ordination process that form part of the Lisbon strategy, notably in the fields of economic and employment policies, enterprise policy, education and training policy, and the internal market strategy. In particular, measures to encourage investment in research must go hand in hand with measures to foster enterprises' motivation to innovate and their capabilities to draw concrete benefits from research - measures that are implemented through industrial, entrepreneurship and innovation policies. tThe recent communication on innovation policy highlights the importance of non-technological forms of innovation , identifies the various policy areas having a bearing on enterprises' propensity to innovate, and maps out a route to strengthen innovation policies through co-operation and mutual learning. The pursuit of structural reforms in product, services, capital and labour markets is also important for the creation of a more dynamic and competitive business environment which is conducive to more investment in research and innovation. The action plan addresses specific aspects with a direct bearing on investment in research.

  The action plan is supported by a dedicated Website which contains supporting documents and links to other sites devoted to related policies and activities. The site will be enriched and updated continuously, notably to monitor the implementation of the action plan. The annexed working document of the Commission services provides specific elements of information and analyses in support of the action plan.