Explanatory Memorandum to COM(2007)514 - Participation by the EC in a research and development programme aimed at supporting research and development performing SMEs undertaken by several Member States - Main contents
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| dossier | COM(2007)514 - Participation by the EC in a research and development programme aimed at supporting research and development performing SMEs ... |
|---|---|
| source | COM(2007)514  |
| date | 12-09-2007 |
Objectives The objective of this proposal is the adoption of a decision by the European Parliament and the Council, on the basis of Article 169 of the EC Treaty, concerning the participation by the Community in the Eurostars joint research and development programme undertaken by several Member States (hereafter 'Eurostars Joint Programme'). This initiative, put forward by EUREKA, will support research and development performing SMEs (hereafter "R&D performing SMEs") in executing market-oriented research in transnational projects. 22 Member States and five other EUREKA countries i have committed themselves in principle to contribute financially to the Eurostars Joint Programme with an amount of EUR 300 million over the six years duration of the programme. The Community will co-finance Eurostars with an amount of up to EUR 100 million. In implementing Article 169, the participating Member States go beyond the mere coordination of research programmes, participating actively in a voluntary integration process covering scientific, management and financial aspects. Scientific integration includes common definition and implementation of the scientific and technological activities, and the central selection of project proposals on the basis of scientific excellence and expected economic impact. Management integration requires an effectively functioning dedicated implementation structure in charge of the centralised and efficient implementation of the Eurostars Joint Programme. Financial integration involves the establishment of a multi-annual financing plan to which the participating Member States, Iceland, Israel, Norway, Switzerland and Turkey effectively contribute. Grounds for the proposal In November 2004 the Competitiveness Council i stressed the importance of SMEs for European growth and competitiveness and thus the need for Member States and the Commission to enhance the effectiveness and complementarity of national and European support programmes for SMEs. In particular, the Council encouraged the Commission to explore the possible development of a bottom-up scheme for research-performing SMEs. The Council also recalled the importance of coordination of national programmes for the development of the European Research Area (ERA), and invited the Member States and the Commission to co-operate closely in identifying a limited number of areas for further application of the Article 169. The Council invited the Commission to further develop cooperation and coordination with European schemes and the Union, notably with EUREKA. In its 'Resolution on science and technology' i, the European Parliament firmly states that a more efficient and coordinated use should be made of other funding mechanisms and support mechanisms to support R&D and innovation, such as EUREKA. The Parliament advocates enhanced cooperation between national research programmes and calls on the Commission to take initiatives pursuant to Article 169 of the EC Treaty. The Seventh Framework Programme i (hereafter 'FP7') provides for the possibility to launch such Article 169 initiatives in areas identified in close association with the Member States. The participation of the Community in joint research programmes is especially relevant to European cooperation on a large scale in variable geometry between Member States sharing common needs and/or interests. Four areas have been identified in the Specific Programmes i including 'research performing SMEs' ("Eurostars") in the 'Capacities' Specific Programme i. Therefore, the 'Capacities' Workprogramme also refers to the Eurostars initiative i.
General context 1.3.1 SMEs in the globalised economy and the Lisbon process Representing 99% of all enterprises in Europe, SMEs i are a key element for the success of the renewed Lisbon partnership for growth and jobs, as they are essential sources of innovation and job creation i. They face many difficult challenges: strong global competition in the context of the rising internationalisation of value chains, faster product cycles, changes in economic structures and in the international division of labour. Many SMEs struggle to re-position themselves in the market place. Yet for innovative SMEs, their small size and flexible organisation may prove to be a significant advantage in this changing economic environment, enabling them to adapt quickly and in so doing seize new market opportunities. R&D performing SMEs can make a very important contribution towards the conversion of science and new technology into innovative products, processes and services, thus contributing to the achievement of the Lisbon objectives. 1.3.2 R&D performing SMEs in Europe R&D performing SMEs are defined as SMEs having their own research capabilities. These SMEs are knowledge-intensive, technology/innovation-based companies, playing a key role in the innovation process. Based on their own R&D capacity, they are able to develop products, processes or services that have a clear innovative or technological advantage. R&D constitutes a key element in their corporate strategy and business plans. Europe has too few of these SMEs strong in R&D and with the potential to grow and become large European and global players of tomorrow i. It is striking that 82% of the large US firms established after 1980 were created from scratch. In the EU, only 37% of the large firms established after 1980 were created from scratch i. Europe not only counts less R&D performing SMEs, but it is also reported that small US firms devote more resources to R&D in their growth phase compared to European companies. Europe is lagging behind in stimulating growth in R&D performing SMEs. National policies in the field are fragmented, and specific instruments at Community level are lacking. 1.3.3 Coordination of national and European research programmes The 'Impact assessment and ex ante evaluation' carried out as part of the preparation of the Seventh Community Framework Programme i identified the lack of coordination of national research policies as a major structural deficit of the European R&D system. This fragmentation of activities is a serious impediment to full realisation of the ERA. The differences in design and implementation of national programmes makes cross-border S&T cooperation more difficult and leads to an inefficient allocation of resources. New initiatives are needed to move towards better coordination and synergy of the activities undertaken at Community and Member State level. This should have a positive overall effect on the impact of R&D carried out across Europe thanks to the increased scale and better overall allocation of the mobilised resources. 1.3.4 EUREKA and the Framework Programme EUREKA is an inter-governmental initiative established in 1985 and aimed at supporting market-oriented transnational R&D and innovation projects across all sectors. It is composed of 38 members, including the European Community. The Communication from the Commission on the ERA in 2000 called for closer relations with initiatives such as EUREKA. At the EUREKA Ministerial Conference in Paris in June 2004, an important step was taken with regard to concrete cooperation between the Framework Programme and EUREKA. The ministers responsible for EUREKA and the Commissioner for Research invited the European Commission to explore the possibility of setting up concrete financing mechanisms reinforcing cooperation between EUREKA and the Framework Programme, including SMEs, on the basis of instruments such as Articles 171 or 169 of the Treaty. Thereafter, EUREKA developed the Eurostars Joint Programme, to be implemented via Article 169 and targeting R&D performing SMEs with high growth potential. 1.3.5. Previous activities and experience The key lesson from the first Article 169 initiative on clinical trials (EDCTP) is that such an initiative can only function effectively if there are three levels of integration between the national programmes involved: scientific, management and financial integration. EDCTP has also shown that the latter is of particular importance and that from the outset, a clear, multi-annual commitment by the participating countries must be ensured in financial terms.
Existing provisions in the area of the proposal Although SMEs have access to a number of programmes under the Framework Programme, there is currently no specific scheme addressing R&D performing SMEs. SMEs can participate in FP7 in two ways. Firstly, SMEs are encouraged to participate in collaborative projects under the 'Cooperation' programme. In addition, the action 'Research for the benefit of SMEs' targets SMEs in need of outsourcing R&D. EUREKA supports market-oriented transnational research projects without any thematic restriction. Once awarded the EUREKA label, project partners have to look to their own national programmes for funding as there is no central funding mechanism. The Eurostars Joint Programme complements both the activities of the Framework Programme and EUREKA, by offering a bottom-up programme, which is specifically tailored towards R&D performing SMEs. The Eurostars Joint Programme places SMEs in the driving seat, favours small consortia, encourages market-oriented research, results in the synchronisation and harmonisation of national procedures, and finally, it offers a secured funding mechanism to the project participants.
Consistency with the other policies and objectives of the Union SMEs are a key element for success in the renewed Lisbon partnership for growth and jobs i. Eurostars aims to stimulate the particularly important segment of R&D performing SMEs, and in doing so contributes to the Barcelona objective of 3% GDP invested in research. In the context of the development of the ERA i a more co-ordinated implementation of national and European research programmes and closer relations between European organisations for scientific and technological co-operation, like EUREKA, were proposed. The recent Green Paper on the ERA also refers to the role of intergovernmental networking structures such as EUREKA, which could further contribute to the coherence of activities within the ERA i. Eurostars will contribute to these objectives. The programme is also expected to facilitate the development and wider use by SMEs of environmental technologies, eco-innovations, environment-friendly products and practices, thus allowing to protect the environment more efficiently. It also gives EU SMEs an advantage on green markets which is in line with EU policy initiatives i.
CONSULTATION OF INTERESTED PARTIES
Consultation methods, main sectors targeted and general profile of respondents The FP7 stakeholder consultation was launched on the basis of the Communication "Science and Technology, the key to Europe's future - Guidelines for future European policy to support research" of June 2004. This consultation was aimed at engaging a broad range of stakeholders who are involved in research activities, research policies and the exploitation of research results. The SME consultation on future EU research policies was organised in two stages. As a first step, the Irish EU presidency organised a conference entitled 'Research, Innovation and European SMEs', which was followed by the conference 'Investing in Research and Innovation', with a session on "SMEs, R&D and Innovation" under the Dutch presidency. In the second stage, two SME stakeholder workshops were organised in November 2004 and January 2005. The FP7 Advisory Group on SMEs was informed and consulted about the content of the Eurostars Joint Programme. The members of CREST (Scientific and Technical Research Committee) have been regularly informed and consulted on the development of the Article 169 initiatives and were also involved in the discussion on integration of the scientific, management and financial aspects. In the frame of EUREKA, the Eurostars initiative was regularly discussed with the Member States.
Summary of responses and how they have been taken into account The stakeholder consultation shows strong support for the measures supporting research in SMEs and for their benefit. Among the SMEs involved in research activities, a major distinction should be made between R&D performing SMEs and R&D outsourcing SMEs. Policy initiatives should take the needs of these different groups into account. Some stakeholders argued in favour of a dedicated bottom-up scheme targeting research-performing SMEs. The stakeholders pointed out that schemes focussing on outsourcing R&D were not suited for SMEs wishing to carry out their own research. Moreover, within the collaborative projects of the Framework Programme, some stakeholders were concerned about the minor role played by research performing SMEs. It was also recommended that a more coherent approach should be developed throughout the various national, regional and European funding programmes, through effective collaboration between national and European initiatives such as the Framework Programme and EUREKA. The four Article 169 initiatives put forward in the Specific Programmes of FP7, which include Eurostars, have been discussed in CREST and were found to be in the most advanced stage of development.
Policy options and how they compare The Commission has not conducted a full impact assessment of this proposal. Nevertheless, an ex-ante assessment was carried out, wherein a number of policy options were considered and compared, for which a summary is given below. Option 1: No joint programme, no FP7. In this hypothesis, R&D performing SMEs would only rely on the available national programmes. However, these programmes often lack the right incentives to develop international consortia which are needed to optimally benefit from opportunities offered at European and global level. Moreover, the absence of action at Community level would result in greater fragmentation of the research effort and less efficient use of public spending for research due to the unnecessary duplication of R&D-related work. Option 2: No joint programme, only FP7 FP7 offers several opportunities for SMEs to participate in R&D activities. The funding scheme 'Research for the benefit of SME' supports the outsourcing of R&D by SMEs to RTD performers. SMEs can participate in collaborative projects under the 'Cooperation' programme. However, R&D performing SMEs often operate in niche markets which cannot always be covered by the topics defined in the Work Programme. Moreover, the timing might not be appropriate, especially considering the dynamic, market-oriented approach of R&D in these companies. Finally, SMEs are not necessarily in the driving seat of these projects. The ERA-NET scheme aims to coordinate national and regional research programmes. ERA-NET+ provides an incentive for several national programmes to organise a single joint call, bridging the gap between ERA-NET and Article 169. However, these two schemes do not envisage the creation of a joint programme with a lasting integrating effect upon the participating national programmes. Option 3: Eurostars Joint Programme Using Article 169 of the Treaty is the most powerful method of achieving cooperation between national research programmes through the joint implementation of complete programmes or large parts of programmes. This facilitates the achievement of results unattainable with other means because of the scale and diversity of the resources mobilised and the structural effects of combining Community and Member States efforts. The Eurostars Joint Programme provides significant leverage for Community funding: with a Community contribution of up to EUR 100 million, the participating Member States, Iceland, Israel, Norway, Switzerland and Turkey will contribute EUR 300 million, resulting in a programme with EUR 400 million of public funding. Assuming project funding rates in the range of 50%-75%, Eurostars could mobilise between EUR 133 and 400 million i of additional private funding for the duration of the Programme. The Eurostars Joint Programme has been tailor-made for R&D performing SMEs, offering a bottom-up approach which is of particular relevance as these firms often operate in niche markets and have to respond quickly to new market demands. It will give the opportunity to these SMEs to initiate and lead market-oriented R&D projects with the partner(s) that best complement their competences and capabilities. Finally, the Eurostars Joint Programme aims at offering fast decision-making procedures, synchronisation and harmonisation of national procedures, and a secured funding to the participants in selected projects.
Why use Article 169? Comparison of the different policy options has shown that the participation of the Community in a joint research programme based on Article 169 is the only option which will make it possible to tackle all the issues related to support to R&D performing SMEs: Support for R&D performing SMEs is at present heavily fragmented and lacks a coherent approach. There is a strong need to go beyond the coordination of national programmes by pooling national and Community resources and establishing a joint programme tailored to the needs of these SMEs. The participation of the Community in the Eurostars Joint Programme based on Article 169 is the concrete fulfilment of closer collaboration between EUREKA and the Framework Programme, which constitutes a milestone in the realisation of the European Research Area. Through the application of Article 169 a framework is created which pools a critical mass of resources and allows for the lasting integration of national programmes, including scientific, management and financial aspects. Using Article 169 confers a significant leverage on the Community funding, as EUR 100 million is expected to mobilise between EUR 433 and 700 million of national public funds and private funds altogether. By implementing and financing joint activities under the Eurostars Joint Programme, a dynamic process will be created, leading to the integration of the participating national programmes, to the enhancement of the scientific and technical excellence, and to the improvement of the efficiency in the management, therefore contributing to the realisation of the objectives of the European Research Area.
Contents
Summary of the proposed action The Eurostars initiative aims to create a joint research and development programme by providing the necessary legal and organisational framework for large-scale European cooperation between Member States on applied research and innovation in the area of R&D performing SMEs. Austria, Belgium, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, the Netherlands, Poland, Portugal, Romania, Slovenia, Spain and Sweden (hereinafter referred to as 'the participating Member States') as well as Iceland, Israel, Norway, Switzerland and Turkey (hereinafter referred to as 'the other participating countries') have agreed to coordinate and jointly implement activities aimed at contributing to the Eurostars Joint Programme. The overall value of their participation is estimated at a minimum of EUR 300 million over the six-year period covered by the programme. In order to increase the impact and critical mass of the Eurostars Joint Programme and to add an incentive for greater integration among the participating national programmes, the Community should participate and make a financial contribution of up to EUR 100 million subject to efficient implementation and financial commitments by Member States in line with the criteria set out in the FP7 decision.
Legal basis The proposal for the Eurostars Joint Programme is based on Article 169 of the EC Treaty, which provides for the participation of the Community in research programmes jointly undertaken by several Member States. This proposal corresponds to the indirect centralised management, according to the provisions of Art. 54(2)(c) of the Financial Regulation. According to Article 56 of the Financial Regulation, the Commission shall first obtain evidence of the existence and proper operation of, inter alia, grant-award procedures, an internal control system, an adequate accounting system within the entity to which it entrusts implementation, and an independent external audit.
Subsidiarity principle The subsidiarity principle applies insofar as the proposal does not fall under the exclusive competence of the Community.
The objectives of the proposal cannot be sufficiently achieved by the Member States as national programmes usually do not sufficiently address the globalising environment of R&D performing SMEs. National programmes often lack the possibility to fund cross-border collaborative SME projects in a sufficiently harmonised and synchronised way.
The added value of the Community action is significant as the Community intervention will enable the creation of a new legal framework where Community and national funding can be combined under a common strategy to stimulate transnational collaborative R&D projects initiated and led by R&D performing SMEs. The pooling of resources from national programmes and from the Community enables a critical mass to be achieved that can better address the challenges faced by R&D performing SMEs. This would otherwise not be feasible using the existing structures in the Framework Programme and within national programmes.
The leverage effect on national and private funding for R&D is significant, as a Community contribution of EUR 100 million could mobilize between EUR 433 and 700 million of national public and private funds for the benefit of R&D performing SMEs, which represents a multiplication factor between 4 and 7.
The proposal therefore complies with the subsidiarity principle.
Proportionality principle The proposal complies with the proportionality principle for the following reason(s).
The Eurostars Joint Programme is aimed at integrating research and development activities in the field of R&D performing SMEs throughout Europe. The centralised management of the programme will ensure consistency in the execution of the action. The role of the Community is limited to providing incentives for improved coordination and integration, and ensuring synergies with relevant complementary activities under the Framework Programme and the Competitiveness and Innovation Programme. Member States will be responsible for developing all operational aspects in order to participate in Eurostars.
The proposed organisational structure ensures that the administrative burden is kept to a minimum, by having the dedicated structure in charge of the overall planning, organisation of calls and evaluations, monitoring of projects and management of the Community contribution. The effective payment to participants in selected projects will be managed by the funding bodies designated by the participating Member States.
The proposed instrument is a co-decision by the European Parliament and the Council, which is the means for implementing Article 169.
The budgetary implications of this proposal are already included in the legal basis of FP7 i as well as in the 'Capacities' Specific Programme of FP7. The agreement to be concluded between the Commission and the dedicated implementation structure shall ensure that the financial interests of the Community are protected.
Simplification
The proposal provides for the simplification of administrative procedures for public authorities (EU or national) and for private parties.
The EU will deal directly with the dedicated implementation structure of Eurostars which will be in charge of allocating, monitoring and reporting on the use of the Community contribution.
Recipients of the Eurostars research funding will benefit from using the national funding rules which are more familiar to them.
The proposal includes a review clause.
European Economic Area The proposed act concerns an EEA matter and should therefore extend to the European Economic Area.