The First Action Plan for Innovation in Europe - Innovation for growth and employment
IE HÉ COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 20. 11. 1996 COM(96) 589 final The First Action Plan for Innovation in Europe Innovation for growth and employment (presented by the Commission) In order to fight unemployment, Europe must secure a stronger growth, better centred on the domains of the future (Confidence Pact for employment, June 1996) INTRODUCTION The public debate launched by the Green Paper has largely confirmed the basic principles of the Commission's diagnosis of the reasons for the innovation deficit1 plaguing the European Union. There is widespread agreement on the need for a global approach to the problem, incorporating technological aspects, training, venture capital development and the legal and administrative environment. The debate has also drawn attention to the importance of the international dimension and highlighted the diversity of national, regional and sectoral situations2. At the Florence Summit, the European council has clearly indicated that "the fight for employment must remain the main priority for the Union and its Member States" and within the framework of a strategy to achieve that objective "has requested the Commission to establish a plan of action for the measures to be undertaken in the field of innovation"3. As a matter of fact, new markets are developing at a steady pace in the domains of information, health, food processing and culture. A demand for new products and services is emerging. The ability to innovate in order to satisfy these new needs is a precondition for the future creation of jobs in Europe. This ability is also necessary in order to maintain competitiveness and employment in the other sectors of activity. To act for innovation is in first instance the responsibility of citizens, of industry and of national, regional and local authorities. Action at Community level, while respecting the rules of subsidiarity is necessary to draw up and enforce the rules of the game, particularly those on competition, intellectual property rights and the internal market. This level will also provide the necessary overview and enable exchanges of experience to be organised and best practice to be propagated. Lastly, the Commission should show an example by mobilising its own instruments, above all the Framework Programme for Research and Development, and the Structural Funds. The Green Paper on Innovation opened up a number of pathways. For the sake of efficiency, this "First Action Plan" refers to a limited number of priority initiatives to be launched very soon at Community level and includes a number of schemes put into action or announced since the launch of the Green Paper, identified as essential to the innovation process4. This is an initial action plan. The Commission is on the one hand continuing to investigate some of the long-term schemes identified in the Green Paper; on the other, it is proposing to carry out a more detailed analysis of activities which are the province of the Member States and of applicant countries5, with their collaboration, with the aim of establishing, in a second phase, a common reference framework which will help to identify priority options and opportunities for cooperation. The Action Plan for Innovation identifies three areas for action. 1 The meaning and scope of Innovation are defined in that Green Paper (COM(95)688 final 2 A summary of the comments received is given in Annex 2. 3 Florence Summit, conclusions of the Presidency, 21 and 22 June 1996, SN/300/46 4 Details of these initiatives and their justification are set out in Annex 1. 5 The ten associated countries of Central Europe, Cyprus and Malta to foster an innovation culture; to establish a framework conducive to innovation; to better articulate research and innovation 1. THE TOP PRIORITY IS TO FOSTER A GENUINE INNOVATION CULTURE. Innovation requires, first and foremost, a state of mind combining creativity, entrepreneurship, willingness to take calculated risks and an acceptance of social, geographical or professional mobility. Being innovative also demands an ability to anticipate needs, rigorous organisation and a capacity for meeting deadlines and controlling costs. An innovation mentality needs to be promoted, and neither legislation nor short-term measures will be of any use here! The means to act exist: (i) Education and training first At national level, continue reviewing courses and teaching methods, above all for their ability to stimulate creativity and a spirit of enterprise from the earliest age, and think about any changes which may be necessary to the training of trainers. Member States should also continue to develop life long training. The Commission's contribution will be to set up a permanent ''training and innovation" forum to stimulate the exchange of experience and best practice in this area. It will continue to implement the White Paper on Education and Training, particularly where apprenticeship (Erasmus apprenticeship, European apprentice statute) and continuing training are concerned. It will foster links between schools as part of the "Learning in the Information Society" initiative. (ii) Easier mobility for researchers and engineers to firms In the orientations for the Fifth Framework Programme for Research, the Commission proposes a wide programme with the main objective of enhancing human potential. It should in particular boost the efforts of the framework programme to arrange for transnational secondments of young researchers and engineers to businesses, in particular SMËs, to help with their innovation or technology transfer projects. Member States are invited to adopt similar measures and to set up the conditions for making this mobility a reality. The Commission has launched a debate on mobility on the basis of the Green Paper and will study the recommendations of the Veil group6. (iii) Demonstrate effective approaches to innovation in the economy and in society It is easier to make innovation acceptable and hence successful in the long run if citizens, industry, and their representatives are involved in the debate on the major technological choices to be made and if employees, users and consumers take part in the process. The dissemination of good practice in this field will be strengthened. The Commission has entrusted a high-level working party headed by Ms Veil with the task of examining the obstacles still hindering the free circulation of workers and individuals. On the basis of its conclusions the group will draw up proposals for removing the legislative, administrative and practical barriers identified. Moreover, the future framework programme for research should open up new approaches to demonstration, including technical, economic and social aspects, management and organisation, and fostering participation. (iv) Propagate the best management and organisational methods amongst businesses More and more of the firms that succeed are "agile", reactive and likely to forge cooperative links with external centres of expertise. Greater priority should be given at both national and Community level to disseminating organisational innovations and using information and communication technologies in this field. The Commission will see to favour the use the instruments at its disposal (the framework programme, the Structural Funds and the training programmes) to this end. Quality promotion policy contributes to steer business and public administrations in that direction. Emulation amongst firms, such as comparative evaluation or benchmarking, enabling them to compare themselves with the international leaders in their field, is an effective way of propagating good practice. The Commission will therefore set up a pan-European benchmarking system, starting with quality, and will help to network the national initiatives which it is inviting the Member States to develop7. (v) Lastly, stimulate innovation in the public sector and in government At national level, innovation training or awareness schemes for decision-makers and managers of projects and funds in the public domain need to be developed. The Commission will stimulate exchanges of experience on ways of promoting and propagating innovation in government departments and authorities. This may culminate in the issue of a Green Paper in 1998? It will also compile a permanent trend chart of innovation performance and policies in Europe, fonning the basis for a regular report on innovation in the European Union. Finally, Member States are requested to pursue their schemes for fostering competition in public invitations to tender and the use of performance standards. Z THE SECOND PRIORITY IS TO SET UP A LEGAL, REGULATORY AND FINANCIAL FRAMEWORK CONDUCIVE TO INNOVATION, (i) The legal and regulatory environment needs to be adapted and simplified. • The European Union and the Member States should first of all make efforts to improve the European patent system, making it more efficient, more accessible and less expensive. The public debate has confirmed the needs of users in this field. Many of the defects in the current situation stem from the coexistence in the European Union of three patent systems: national, European and Community. Since the European patent system provides for no European-level tribunal with jurisdiction over disputes in this area, there is a COM(96) 463, 9 October 1996. danger that the competent Courts in the Member States may deliver conflicting decisions. The Community patent is still not in force, not yet having been ratified by all Member States, and has already fallen behind the changing requirements and the construction of Europe. The Commission will prepare in 1997 a Green Paper on the issue of the Community patent. It is foreseen that this text will consider: * whether the Luxembourg agreement on the Community patent should be converted to a legal instrument under the Treaty. * whether national patent convention should be further harmonised at Community level. * whether bridges should be built between the European and the Community patent system. * whether it is possible to adapt the system of taxes and duties in a way that corresponds to the services provided and is not a barrier to the protection innovation. The Commission will pursue its plan with the Member states, to harmonise and complete legislation (especially with regard to the information society, design or employment) and will It will implement an reinforce the role that it can play in the action against counterfeits. information and support service for participants in the research framework programme. The Commission recommends that Member States put in place instruments for assisting SMEs and universities in the event of litigation, to raise awareness in SMEs and to develop training schemes in this area. • Business start-up and innovation support must be simplified at both national and Community level The Commission recommends that Member States set quantitative objectives and an ambitious timetable for cutting the formalities and delays involved in starting up businesses. The Commission will take on board what is being done in some Member States by testing an ex- ante mechanism for assessing the impact of regulations on innovation within the general guidelines for legislative policy. Businesses, particularly SMEs, often get lost amongst the plethora of support services which have burgeoned at local, regional, national and Community level. Efforts to rationalise structures and coordinate initiatives need to be accentuated so as to maximise their added value and their effectiveness. Similarly, local or regional networks of one-stop shops for SMEs for innovation support need to be generalised. Suitable legal structures (European companies, joint undertakings) must be adopted, and the promotion of existing instruments (EEIGs) will be actively pursued. (ii) Innovation financing must be made easier in Europe In this vital area, much depends on private initiatives or those at regional and national level. The Commission needs to work on propagating good practice and facilitating its adoption, particularly with the support of pilot projects but also by mobilising the Structural Funds and newer instruments such as the European Investment Fund (EIF). This action should be guided by three objectives: First, investment in risk capital and equity needs encouragement. This applies particularly to start-up investment and innovative, high-growth firms, which are a major source of new jobs. Long term sources of funding (pension funds, life insurance, "business angels" and save-as- you-earn schemes) should be directed more towards risk investment. The Commission will support more EIF intervention to promote innovation. This could take the form of a pilot mechanism for attracting risk capital funds in which the EIF will take out shares8 to be invested in the early stages of investment and in innovative projects, particularly those derived from Community research. • Secondly, the conditions within which European capital markets for innovative, high-growth companies (such as the New Market Federation or EASDAQ) develop must be secured, which means reviewing a number of legal and fiscal provisions and seeing to it that the necessary expertise is available. Thirdly, the interfaces between technological innovation and financial circles need to be strengthened. Support is needed for the transnational dissemination of good practice and the testing of new methods in this area. Also, closer links between Community research and risk capital should improve the exploitation of the results of the research. An information and guidance service on this topic will be set up for those taking part in the framework programme. 3. THE THIRD PRIORITY IS TO GEAR RESEARCH MORE CLOSELY TO INNOVATION AT BOTH NATIONAL AND COMMUNITY LEVEL. In knowledge-based economies, the efficient systems are those which combine the ability to produce knowledge, the mechanisms for disseminating it as widely as possible and the aptitude of the individuals, companies and organisations concerned to absorb and use it. The crucial factor for innovation is thus the link between research (the production of knowledge), training, mobility, interaction (the dissemination of knowledge) and the ability of firms, particularly SMEs, to absorb new technologies and know-how. (i) At national level, several types of action are necessary, depending on the Member State; the Commission may give assistance where appropriate: • Firstly, develop a strategic foresight vision of research and of its application. Exercises such as,"key technologies", "Delphi" or "Foresight" can contribute to directing collective efforts to the sectors, areas or technologies, which are the most relevant for the future. Member States which do not have any experience in that area ought to consider the opportunity of this type of approach. The Commission will act to: - facilitating the exchange of experiences between Member states and exploiting the results of these exercises in order to identify relevant leads at the Community level. - reinforce technology watch at European level within the framework of the European Science and Technology Observatory, set up by the RCC's Institute for Prospective Technological Studies as focal point for the Member states observatories. 8 Since June 1996, EIFs statute allows it to take such participations Secondly, strengthen the research carried out by industry, in both absolute and relative terms Member States are requested to draw up quantified and ambitious objectives aiming to increase the share on the Gross Internal Product dedicated to research, to development and to innovation, in particular by encouraging research undertaken by industry (in particular the one financed by enterprises or the one financed by governments within the limits allowed by article 92 of the Treaty). In Europe, the share of GDP devoted to research financed by industry, which offers more opportunities for exploitation, is on average 38% below that of the USA and 55% below that of Japan. Thirdly, encourage strongly the start-up of technology-based firms ("campus companies", spin-offs, etc. )' The Commission recommends that Member States step up the action they are taking in this area and exploit the structures which have proved effective in the field. As from 1997 it will organise a thorough exchange with Member States on this topic, involving leading players in the field. This will concentrate on measures for facilitating this spin-off process (covering intellectual property rights, social rights, financial arrangements, etc. ) and national or regional promotion schemes. It will back up the dissemination of best practice through pilot projects involving, for example, university technology-transfer departments, the regional institutions concerned, venture capital companies and technology brokers. Fourthly, intensify the cooperation between public, university and industrial research The Commission recommends that Member States establish a legal and practical framework which will foster this cooperation by, for example: - providing opportunities for universities and researchers to spend some of their time developing companies; - enabling universities and public research centres to conclude exclusive contracts with industry for exploiting results, including through financial holdings. Lastly, strengthen the capacity of SMEs for absorbing new technologies and know-how, whatever their origin Substantial effort needs to be made in this area. Member States should extend the scope of their measures to include the transfer of technologies of international origin. Companies, particularly SMEs, should have easier access to expertise at the highest level, European or worldwide, in technological, organisational or management methods. At national and regional level, moreover, the drive to rationalise innovation support organisations, as mentioned above, needs to be accompanied by measures enabling them to achieve critical mass and the necessary degree of professionalism. The Commission will intensify activities for creating improved links between the various national and regional innovation-support systems. Working with the players concerned, it will help to professionalise or, where appropriate, certify the new professions which will need to emerge in this context. (ii) At European Union level, the Community will mobilise all of its innovation instruments • First, the Commission will establish within the Fifth Framework Programme a single, simplified horizontal framework for integrating the "innovation" and "SME" dimensions. Accepting that large companies have an important role to play in the Innovation process, in particular with smaller firms, this action should give more SMEs access to all research work and its results, develop technology transfer and stimulate innovation. - The Framework Programme approach should be an integrated approach. Research projects will take more systematic account of organisational, management, market, financial, legal and protection aspects. - Secondly, the methods of implementing projects and programmes will be changed. This means in particular: • • • • the criteria for assessing proposals; encouragement during the research phase to prepare for exploiting and disseminating the results (documentation of results, complementary studies, training schemes, licence preparation, finding partners, upstream consideration of the pre-standardisation dimension, etc. ); adapting to contracts, particularly to make them more flexible and to give better protection to the intellectual property rights of contractors where development or demonstration projects are concerned; aiming at maximum user-friendliness for SMEs and faster procedures involving fixed deadlines for the various phases. Thirdly, the coordination of the conception and the management of these measures needs to be reinforced: • more global consistency of the actions; • • an integrated range of services suited to the needs of the various categories of SMEs; gateways between projects at different stages (research, demonstration, transfer, exploitation); optimum use of the existing networks of assistance, with innovation, project preparation and the search for partners, especially with regards to SMEs. • Lastly, the positive experience of the Research-Industry Task Forces will be put to contribution within the Fifth Framework Programme for Research. The debate on the Green Paper on Innovation and the experience gained through the Task Forces in the Fourth Framework Programme have demonstrated the usefulness of instruments which: better identify, together with users, researchers and industry, the technological obstacles whose solution is an economic and social priority in Europe; mobilise expertise and private or public resources, Community or national, to the maximum extent in order to bring large-scale targeted projects to a successful conclusion, thereby obtaining faster results from research effort, avoiding duplication and increasing the visibility and the exemplary nature of Community research. In consequence, it would be desirable to improve at Community level: the incentive character of participation in the work of Task forces, by taking innovation more into account as a selection criterion for projects within the Fifth framework programme; the efficiency of procedures by planning simultaneous or integrated calls for proposals for the various programmes for priority research. In addition, outside the framework programme, all Community instruments will be mobilised to support innovation: The increased input of the Structural Funds into innovation will be continued at both Community level (Article 10 of the ERDF, SME initiatives, ADAPT, LEADER II) and national and regional level. Member States and the regions concerned are requested to invest more in schemes linked to innovation, subject to the resources available for the current programming period and in the next generation of Structural Funds. Here, the Commission will draw on the experience gained with regional innovation strategy projects jointly subsidised by Article 10 of the ERDF and the Innovation programme. It will also stress the importance of innovation in its various initiatives. The European Union must make full use of the international dimension of innovation. Two- thirds of world innovations and scientific discoveries are made outside the European Union, and most expanding markets are to be found outside Europe. This means, in particular: • • • • • closer interaction of the framework programme with the COST and EUREKA cooperation frameworks; support for international industrial cooperation; intensified international cooperation on research and development with non-Member countries; stronger encouragement to entities in the countries concerned, through the possibilities offered by instruments such as TACIS, PHARE9, MEDA, etc. to search a stronger synergy with community research projects. continued vigilance in international negotiations for aspects liable to affect European innovation and its outlets (such as intellectual property rights and anti-counterfeit measures). Lastly, the action plan will be fleshed out in various priority sectors or fields Situations vary widely according to the country, the sector and the technology. The action plan will therefore need to be adapted to certain fields or sectors designated as priorities. These might include environmental protection and sustainable development, the services sector, rural development, aspects related to demand and consumers, the audio-visual sector and better exploitation of space and dual-use technology. CONCLUSION In the three main fields identified, the Commission is putting forward those measures whose priority, expected impact or urgency has been confirmed by the debate. These are summarised in For those countires which are not applicant the tables below. At Community level these measures can be financed from existing or planned budgets. The main effort must nevertheless be made at local, regional or national level. The Commission proposes to analyse in more detail those activities which are the province of the Member States, in collaboration with them, in order to establish a joint reference framework and so help them identify the priority options and the opportunities for cooperation. It will take the necessary steps to ensure effective coordination of the measures deriving from various policies and will strengthen interaction with Member States. It invites the Member States to do the same. The Commission will draw up a detailed implementation schedule and will precisely quantify the costs of the measures it is proposing. On this basis it will submit the corresponding legislative and regulatory proposals to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions. It will report regularly to the European Council on the implementation of the action plan, including, where necessary, proposals for any adjustments or additions which may prove necessary in the light of developments or in view of the specific contexts in which the plan is applied. The enthusiasm and energy demonstrated must be mobilised in order to implement this Action Plan and so build a more innovative, competitive and job-creating Europe. ************************* The summary tables below are an integral part of this action plan. 10 1. FOSTERING AN INNOVATION CULTURE 1. 1 NEW ACTIONS 1- Education and initial and further training Commission • Set up a "training and innovation" forum to exchange experience and disseminate best practice (1997). Member States and regional authorities • Make a critical examination of teaching programmes and methods and the training of instructors. • Adapt the content of initial training to develop, from the earliest age, creativity, spirit of enterprise, etc. 2- Mobility of students, research workers and teachers Commission - Put forward a wide horizontal programme aiming to enhancing human potential in the Fifth Framework Programme for Research (first half of 1997); • Stimulate transnational "industrial PhDs" (placement of research workers/engineers in firms) (pilot action in 1997). • Make Community aids to mobility more flexible (5th FPRD). Member States • Adopt measures for the temporary secondment of research workers to firms, especially SMEs. • Ensure that the conditions actually exist for mobility between research and enterprises (assessment of qualifications, career development). 3- Innovation and management of enterprises Commission • Promote organisational innovation through Community instruments at its disposal (framework programme, Structural Funds and training programmes, etc. ) (1997/98). Introduce a benchmarking system at the European level (pilot project in 1997). • 4-Public authorities Commission • Develop exchanges of experience on the promotion and dissemination of innovation in government offices and public services. Conference in 1997 and publication of a green paper in 1998. • Compile a permanent trend chart of innovation performance and policies in Europe (to be put in place in 1997). Member States • Develop initiatives to provide information and increase awareness among politicians and senior officials of what is at stake with innovation. 11 1. FOSTERING AN INNOVATION CULTURE 1. 2 CURRENT ACTIONS FOR IMPROVING THE INNOVATION ENVIRONMENT IN EUROPE 1- Education and initial and further training Commission • Implement the proposals of the White Paper on Education and Training (especially Erasmus apprenticeships, European apprenticeship statute). • Pilot projects to encourage links between schools ("Learning in the information society" initiative). Member State and regional authorities • Develop sandwich course training, especially at university level. • Encourage the effective knowledge of several Community languages. 2- Mobility of research workers, students and teachers Commission and Member States • Launch a debate on the Green Paper with regard to the mobility of research workers, students and teachers, and implement proven routes of action; examine and possibly implement the recommendations of the Veil Group. 3- Raising public awareness and involving those concerned Commission • Develop initiatives to disseminate best practice in this field. Member States • Foster a scientific and technical culture and awareness of the beneficial effects of innovation. Commission and Member States • Involve enterprises, the public and their representatives in discussing major technological options. • Develop measures to increase the involvement of employees, users or consumers and to facilitate the acceptance of innovation. 4- Innovation and management of enterprises Member States • Increase training activities for innovation management. • Foster the development of the practice of "benchmarking" among enterprises. 5- Public authorities Member States • Stimulate competition in public invitations to tender and the use of performance standards. 12 2 ESTABLISHING A FRAMEWORK CONDUCIVE TO INNOVATION 2. 1 NEW ACTIONS 1- Protection of intellectual and industrial property Commission and Member States • Launch of a Green Paper on the issue of the Community patent (September 1997) Commission • Set up a service of assistance on intellectual property (IPR-Helpline) for Community research (1997). Member States • Set up instruments to inform and help SMEs and universities in the event of disputes. 2- Administrative simplification Commission • • Introduce a pilot mechanism for the ex-ante assessment of the impact of regulations on innovation (end 1997). Implement operational procedures for coordinating Community innovation support networks (1997). Member States • Set objectives and a precise timetable for simplifying business start-up formalities. Member States and local authorities • Speed up the rationalisation of innovation support activities and bodies: 3- Financing Commission • Reinforce EIF action in favour of innovation and cooperation between the EIB and the • Structural Funds (beginning of 1997). Improve the links between Community research and risk capital, particularly in order to provide information and guidance services for those taking part in the framework programme and for investors (mid-1997). • Develop the exchange of experience and the dissemination of best practice between Member states and operators (1997 and 1998). Member States Introduce the framework conditions for stock exchanges for growth enterprises. • • Make greater efforts to direct "patient" capital towards risk investment. 4- Taxation Commission • Consider a communication on "taxation and innovation" (possibly in 1997). Member States • Promote fiscal and accounting treatment more favourable to intangible investment. 13 2. ESTABLISHING A FRAMEWORK CONDUCIVE TO INNOVATION 2. 2 CURRENT ACTIONS FOR IMPROVING THE INNOVATION ENVIRONMENT IN EUROPE 1- Competition Commission • Follow-up to the Green Paper on merger monitoring, extending the field of application of unified European monitoring of mergers and harmonising the treatment of joint structural enterprises. • Publish a green paper on the application of the rules of competition to vertical agreements. • Continue the dialogue with the competition authorities in the United States, to allow the bringing together of the definitions of relevant market, particularly in agreements with a high technology content. 2- Protection of intellectual and industrial property Commission and Member States • Complete the harmonisation of legislations to take account of developments linked to the technologies of the information society and supplement legislations on design protection and employees' inventions. Commission • Strengthen anti-counterfeit measures. Member States • Ensure the adoption of the proposal for a directive on biotechnological inventions. • Support the efforts of the European Patent Office to reduce filing costs. • Transpose the European directives on the protection of intellectual property into national legislation by the end of 1996. • Develop training in this field. • Make enterprises aware of the competitive benefits of protection. 3- Administrative simplification Commission • Introduce into the work of the Committee for the improvement and simplification of the business environment a special action on innovation. • Accord the required importance to innovation when simplifying administration (e. g. in the choice of sector under the SLIM project). Member States • Provide enterprises with one-stop shops for innovation questions. 4- Legal and regulatory environment Company law Council • Speedy adoption of a European Company Statute. Commission • Continue to encourage the use of European Economic Interest Groupings, especially by providing better information. • Study the feasibility of creating a joint undertaking statute (Article 130N of the Treaty). 14 3. GEARING RESEARCH TO INNOVATION 3. 1 NEW ACTIONS 1. National measures and their Community back-up (i) Strengthening research carried out by companies Member States • formulate quantified objectives and put in place the appropriate incentive policies. (ii) Start-up of technology-based companies Commission • organise thorough exchanges with Member States and players in the field on legal, fiscal and promotional measures (1997). • launch pilot schemes for disseminating good practice, involving universities, risk capital, industry and regional institutions (1998). (iii) Intensified cooperation between research, universities and companies Member States • set up a legal framework to facilitate exploitation by research organisations, including business start-up. (iv) Strengthening the ability of SMEs to absorb technologies and know-how Member States - support transnational technology transfer. Commission and Member States • better links between national and regional innovation systems at Community level. (v) Demonstration of effective approaches to innovation Commission - set up a new generation of demonstration projects integrating the technical, organisational and social aspects of innovation (5th FPRD). 2. Incorporating the Innovation and SME dimensions into the Framework Programme for Research Commission • adapt the implementation procedures for the Framework Programme (project selection criteria, faster project Selection, more demonstration schemes, legal framework for contracts) (4th and 5th FP). • strengthen the consultation and coordination role of the research-industry Task Forces. - develop a programme "Innovate and giving SMEs greater involvement and providing an integrated approach to the goal of innovation through the legal and financial treatment of projects, particularly those supporting SMEs (5th FPRD). 3. Mobilise other Community instruments Commission and Member States • prepare to flesh out the action plan in various priority sectors and fields of technology. 15 3. GEARING RESEARCH TO INNOVATION 3. 2 CURRENT ACTIONS FOR IMPROVING THE INNOVATION ENVIRONMENT IN EUROPE 1. National measures and Community back-up A strategic vision of research and development (i) Member States • consultations on long-term technology forecasting (Foresight). Commission • • stimulate the technology watch (network of national organisations around the European Science and facilitate the exchange of experience and the exploitation of results on a Community scale; Technology Observatory (ESTO)). (ii) Start-up of technology-based companies Member States • stronger promotion of "campus companies" and spin-offs. Intensified cooperation between research, universities and industry (iii) Member States • pursue and strengthen action in this area. Commission • analyse the obstacles and disseminate good practice; • support national efforts to improve the management of research and technology organisations and their international benchmarking; • organise sectoral and inter-sectoral technology platforms. Strengthening the ability of SMEs to absorb new technologies and knowledge (iv) Member States • improve the efficiency and transparency of support structures. Commission • help professionalise the innovation support services; • set up a scheme for promoting the absorption and use of technologies (first-use support, access to technologies not developed in the European Union, internationalisation of young technology-based firms, regional projects). (v) Demonstration of effective approaches to innovation Member States and Commission • make better use of specialists in the social and behavioural sciences in technology projects. 2. Incorporating the Innovation and SME dimensions into the Framework Programme (see New Actions) 3. Mobilise other Community instruments Commission and Member States • direct more of the Structural Funds towards innovation; • make the most of the international dimension of innovation. 16 ACTION PLAN FOR INNOVATION IN EUROPE ANNEX 1 Description of actions /?** CONTENTS INTRODUCTION 1. 2. 3. Consultation Reactions A first Action Plan A - FOSTERING AN INNOVATION CULTURE: 1. 2. 3. 4. 5. Education and training Encouraging mobility Raising public awareness and involving the operators concerned Business management Public authorities (i) (ii) (iii) Innovation in the public sector Public contracts Analysis of innovation policies and systems B. ESTABLISHING A FAVOURABLE FRAMEWORK 1. Legal, administrative and regulatory environment (i) (ii) (iii) (iv) (v) Competition Protection of intellectual and industrial property Administrative simplification Company law Standards 2. Financial environment (i) (ii) Financing Statutory deductions C- GEARING RESEARCH TO INNOVATION 1. National measures with Community support (i) (ii) (iii) (iv) (v) A long-term strategic approach to research Strengthening research carried out by industry Start-up of technology-based companies Closer cooperation between public research, universities and industry Expansion of SMEs' capacity for absorbing new technologies and know-how Demonstration of effective approaches to innovation (vi) 2. Incorporating Programme the innovation and SME dimensions into the Framework 32 3. Mobilising other Community instruments (i) (ii) (iii) Gearing the Structural Funds more towards innovation Making the most of the international dimension of innovation Fleshing out the action plan in various priority sectors and fields of technology. 37 CONCLUSION: 41 S!% Ill iii iii iv 6 6 8 8 9 10 10 11 11 14 14 14 15 18 20 21 21 21 23 27 28 28 29 29 30 30 31 35 35 36 In order to fight unemployment. Europe must secure a growth stronger and better centred on the domains of the future (Confidence pact for employment, June 1996). INTRODUCTION 1. Consultation The Green Paper on Innovation1 prompted a very important reaction and there was a wide-ranging debate, which extended beyond the borders of the European Economic Area. More than 40 000 copies were circulated. The Green Paper was studied by the various Community institutions, by the governments and by those directly concerned. The opinions of the European Parliament, the Economic and Social Committee and the Committee of the Regions2 were favourable and emphasised importance of technology dissemination, the principle of subsidiarity, the role the economic operators and the social aspect of innovation. in particular the In all the Member States, together with Norway and Iceland, conferences to discuss the Green Paper were organised at the Commission's initiative and with the support of the national authorities. They brought together more than 5 000 people: industrialists and representatives of research centres, financial institutions, government departments, innovation bodies, trade unions, universities, etc. More than 300 detailed contributions were also submitted to the Commission, mainly from enterprises or their representative organisations3. Lastly, in addition to the comments from field players directly involved, official responses4 were received from most of the Member States, as well as from Norway and Hungary. There was thus an unprecedented response to the need for innovation, viewed not as an end in itself but as an essential instrument for attaining fundamental social objectives and lasting and sustainable growth, as well as for improving the competitiveness of enterprises and employment. At the Florence Summit, the European council has clearly indicated that "the fight for employment must remain the main priority for the Union and its Member States" and within the framework of a strategy to achieve that objective "has requested the Commission to establish a plan of action for the measures to be undertaken in the field of innovation"5. As a matter of fact, new markets are developing at a steady pace in the domains of information, health, food processing and culture. A demand for new products and services is emerging. The ability to innovate in order to satisfy these new needs is a precondition for the future creation of jobs in Europe. This ability is also necessary in order to maintain competitiveness and employment in the other sectors of activity. 2. Reactions The views that were expressed naturally differ, but there was agreement on: • • • the importance and relevance of the discussion, the integrated approach proposed by the Commission (ranging over the questions of training, competition, legal and administrative framework, venture capital, etc. ), the broad lines of the diagnosis. "Green Paper on Innovation", COM(95)688 final. 1 2 See Annex 2c. 3 The annexed document 2a summarises these contributions. 4 See Annex 2b. 5 Florence Summit, conclusions of the Presidency, 21 and 22 June 1996, SN/300/96. yff • the urgent need for action that is coordinated at each separate level of intervention as well as between levels. A number of salient points emerged from the debate: • the diversity of national, regional and sectoral circumstances. A uniform Community-wide approach which would disregard these specific features would inevitably fail. To act for innovation is in first instance the responsibility of citizens, of industry and of national, regional and locaj authorities. Strict application of the principle of subsidiarity is essential; • value added at Community level, especially for: - drawing up and ensuring compliance with the rules of the game (framework conditions for competition, the internal market, industrial property rights, etc. ); - providing the overall view needed for formulating options on a common basis; - exchanging experiences and disseminating best practice; - providing the necessary impetus and political signals by means of Community policies and instruments (research, structural funds, internal markets, SMEs, etc. ); • the areas in which priority actions should be launched, at both national and Community levels. The main aims are to: - foster in the economy and society a genuine innovation culture, favouring creativeness, willingness to take risks and experimentation. This requires, in particular, long-term actions in the areas of education and further training, closer links between the worlds of education and the economy and promoting awareness among those involved in the public and private sectors; - adapt the administrative, legal, regulatory and financial environment, so that it is permanently more conducive to innovation. In addition to streamlining administrative procedures, at Community as well as at national and regional levels, this involves in particular rules on competition and intellectual property to encourage innovation and legal arrangements to facilitate the setting-up of international cooperation, but also the creation of an environment which is more conducive to innovation financing and to the reinforcement of the financial structure and own funds of innovative enterprises. - maintain - but also and more usually to focus and consolidate - collective research efforts, especially among enterprises, as well as their ability to access and benefit from new technologies and knowledge, from whatever source. This involves better anticipation of requirements, technical changes and markets, together with closer collaboration between research and industry and a special emphasis on the dissemination of technologies and skills, especially among SMEs and the least favoured regions. • the importance of the international dimension, which is both a fact and a necessity6. Promoting innovation in Europe does not mean turning inward. Action needs to be taken against an open and dynamic background of international cooperation and competition. 3. A first Action Plan The Green Paper on Innovation suggested various options. For the sake of effectiveness, this First Action Plan outlines a limited number of priority actions to be launched speedily at Community level Two-thirds of the world's advances in science and technology are made outside the European Union. The expanding markets are outside Europe, primarily in south-east Asia, with its three billion inhabitants and an overall income which in a few years will exceed that of the United States and the European Union combined. Flows of capital, information and technology are global. Direct investment abroad soared from 68 billion dollars in 1960 to 1 650 billion in 1993, excluding intra-Cbmmunity investment. Strategic alliances, especially in the RTD field, undermine the ability of governments to identify the beneficiaries of their technology policies. Close on 40% of world trade is conducted within enterprises to and incorporates actions which are in progress or which have been announced since the publication of the Green Paper and which were identified there as vital for the process of innovation. This is a first action plan, with the Commission both continuing to study some of the options indicated in the Green Paper, the implementation of which requires a long-term approach, and also proposing with regard to activities which are the responsibility of the Member States and applicant countries to conduct a more thoroughgoing analysis in collaboration with them, with the aim of establishing at a second stage a common framework of reference which can help to identify the priority options, as well as opportunities for cooperation. With regard to the Community level, at this stage the only measures considered are those for which the operating method could be described and which can be inserted in the known budgetary framework, without incurring any new expenditure but through the possible reallocation of available resources. Innovation involves a variety of operators and implies an integrated approach with intensive interaction. This means that the proposed measures are inevitably multiple and varied. For the sake of clarity, they have been classified by order of decreasing chronology and likely effect in accordance into the following three objectives: • • • fostering an innovation culture in the economy and society; establishing a framework conducive to innovation; linking research and innovation more effectively. This initial plan outlines a general framework for action at Community and Member State level, and also for applicant countries7. It is intended to be the first stage in a lasting mobilisation of the Community, the governments and those in the field for the benefit of innovation. At Community level, the new actions will be launched immediately. Current actions will be speeded up or consolidated, if need be. Reflexion will continue and the plan will be applied, where appropriate, in the thematic fields and the industrial or service sectors where it seems suitable. At national level, the Commission will carry out further analysis, in collaboration with the Member States and applicant countries, in order to establish a common frame of reference and to help them identify priority options and cooperation opportunities. 7 In compliance with the conclusions of the Council meetings in Copenhagen and Essen, Community programmes or similar initiatives will be opened to allow the applicant countries to participate as part of the strategy for preparing for accession. These countries are therefore concerned by a large number of the points dealt with in the action plan. These are in particular the proposals on education and training, the mobility of students and research workers, public awareness, as well as the involvement of these countries in the Fifth Framework Programme's targeted socio-economic research. Furthermore, account must be taken of these countries with regard to the implementation of the recommendations on competition and improving the legal, administrative and regulatory environment. They should also be in a position to benefit fully from trans-European capital markets. The concrete arrangements for their involvement in the Fifth Framework Programme are still to be worked out. It is nevertheless likely that they will emphasise university-industry SMEs. A special debate will be initiated with these countries as part of the structural dialogue on the way in which they can be integrated in the action plan. innovation measures among links and for ? / A - FOSTERING AN INNOVATION CULTURE: 1. 1 Innovation depends on creativeness, a sense of initiative and enterprise, a willingness to take calculated risks and a readiness to cope with mistakes and accept social, geographical or professional mobility. But innovation also needs other skills: the ability to anticipate needs, careful organisation, and a capacity for meeting deadlines and controlling costs. Innovation increasingly relies on a wide range of interaction, which means that skills in information collection and processing and personal and social communication skills are also needed. A favourable culture is essential. The United States, with its frontier mentality and the idea of the melting pot, thrives on risk, social and geographical mobility and straightforward relations. In Japan, culture and society emphasise excellence, steady improvement and organisation. As for Europe, it has grown up around social systems which differ widely but where, today, as a rule, risk-taking is shunned in favour of seeking security and stability. Changing the culture and the mentality of a people cannot be achieved by legislation or by any short-term measures. Means of action exist, however. First and foremost come education and training. The mobility of people facilitates the spread of knowledge and the flow of ideas. Participative approaches make it easier for the groups concerned to adhere. Actions to inform and raise awareness, in particular through the use of new media, together with the dissemination of new methods of organising and managing business and government, are also needed. /. Education and training 1. 2. Initial education needs to concentrate on imparting the skills that are needed to produce and implement innovation. Technical education and vocational training must not be neglected8. But the acquisition of a basic educational grounding is essential to facilitate ongoing adaptation to the new skills that innovation requires. It is wrong to think that training at the start of life will always suffice. Training is a necessity throughout life. It comes up against particular problems in SMEs (especially the limited available time of managers and employees) which need to be dealt with through novel solutions9, possibly involving distance learning and multimedia techniques. The third multiannual programme for SMEs proposes pilot projects to help find new approaches in this area10. There is also a need to bring education and business closer together, especially by means of sandwich courses, so that apart from helping young people enter the job market it is possible to prepare for the new skills or qualifications that are needed and to adapt training to these needs. Alongside its education and training programmes, especially Leonardo da Vinci and Socrates, the European Union contributes to these aims through the European Social Fund under various Community objectives and initiatives such as ADAPT and EMPLOI. "In 1996 Europe had 4. 7 scientists and engineers for every thousand inhabitants, compared with 7. 4 in the United States and 8 in Japan. Also, the combined total of scientists and engineers in China, India and Indonesia is now the same as the figure for the European Union" ("Inventing tomorrow: Europe's research at the service of its people", p. 6). COM(96)332 final, 10/7/96 The joint Council and Commission report on employment (SI(95)1000) stresses the importance of adapting training programmes to the needs of SMEs and providing incentives for SMEs that want to invest in training. Proposal for a Council Decision on a Third Multiannual Programme for Small and Medium-sized Enterprises (SMEs) in the European Union (1997-2000), COM(96)98. 10 21 The Member States and regional or local authorities are invited to reinforce their action in these fields and, in particular, to: - take a critical look11 at the programmes and methods of education, especially their ability to stimulate critical sense, interpersonal communication, teamwork, willingness to experiment, skill in finding and using information, learning ability, entrepreneurial spirit; thinking, creativeness, lateral - analyse the changes that apparently need to be made to the training of trainers; - extend training, if need be, to include economics and management, company formation, protection of intellectual property, design and marketing, especially in science and technical courses; - develop sandwich courses at the level of higher education and decompartmentalise disciplines; - encourage the effective command of several Community languages12: - stimulate real cooperation between education and business; - develop long-term partnerships between enterprises and training bodies; - encourage broader access for enterprises to the best vocational training facilities in Europe. The Commission will continue to implement the proposals contained in the White Paper on Education and Training adopted in November 1995. It will promote the exchange of experience and the dissemination of good practice in these area among the Member States and with the social partners by introducing a permanent "training and innovation" forum. 1. 3. The Commission therefore plans to introduce from 1997 an "Erasmus of apprenticeship" and to draw up, with the governments and the social partners, a European apprentice statute. Furthermore, as part of the follow-up to the European Year of Life-long Learning, it will draw up proposals13 seeking to facilitate, at European level, the valorisation and accreditation of skills throughout life. 1. 4. Lastly, with the "Learning in the information society" initiative, it will set out to coordinate existing trans-European (education and telecommunications networks, Structural Funds) to link schools throughout Europe using existing national initiatives, promote the development of the software and content that are instruments and actions research, training, 11 As in Denmark, where the Ministry of Education recently considered means of fostering an innovation culture and entrepreneurial spirit from primary and secondary education. At Community level, the matter has already been considered in the White Paper on Education and Training. (COM(95)590 final, 29/11/95) 12 A survey of 927 SMEs in 1995 as part of the Euromanagement action revealed that the language barrier was a decisive factor for 67% of the SMEs that were eligible for Community R&D programmes but were afraid to go ahead. 13 On the basis of current evaluation of the Member States' transposition of the Council recommendation of June 30, 1993 (OJ L181,23/7/93) on access to continuing education. o u needed and to assist the training of teams to provide instruction in the use of these new technologies. 2. Encouraging mobility 1. 5. The mobility of students, research workers, engineers or scientists from one country or industrial sector to another, as from education or research to industry, encourages the transfer of technology and the dissemination of know-how. In spite of efforts to promote it, such as the programme for the training and mobility of researchers, this kind of mobility between research centres, universities and industry is all too often hampered by practical or cultural barriers. Similarly, as technologies are becoming more and more "trans-sectoral", mobility between branches of industry needs to be made easier. The Green Paper entitled "Education-Training-Research: Barriers to Transnational Mobility", published at the end of 199614, points out that the barriers to mobility arise mainly in the areas of right of residence, social security, taxation and the lack of a legal framework at European level, including for apprentices15. At Community level, the Commission will introduce the priority measures to encourage the mobility of students, teachers, engineers and researchers that have emerged from the debate on this Green Paper. In setting priorities for the Fifth Framework Programme for Research, the Commission is proposing a wide programme with the main objective of enhancing human potential. It should in particular boost the efforts to arrange for transnational secondments of young researchers and engineers to businesses, in particular SMEs, to help with their innovation or technology transfer It will take all the necessary steps to make the mobility aid programmes of the projects. Community more flexible, particularly by: - making exchanges of staff one of the eligible cost headings in long-term cooperation projects on RTD and the use of large-scale equipment16; - linking mobility support measures and research projects, enabling their beneficiaries to combine them in a single innovation project; - making age limits and authorised secondment periods more flexible, in order to enlarge the potential pool of beneficiaries (older researchers, SME staff). At national level, it will recommend establishing effective "interoperability" of the systems for assessing career development or qualifications (e. g. the introduction, in the systems for assessing government research workers, of a positive recognition of periods spent in industry, on industrial projects or for patents filed, as well as the adoption by the enterprises or bodies concerned of arrangements, in the event of external mobility, to ensure seamless careers). 3. Raising public awareness and involving the operators concerned 1. 6. Innovation can develop and spread only if it is accepted by society. It is stimulated by the existence of demanding consumers who accept novelty. Innovation is not restricted to advances in scientific knowledge and technical performance. Innovation in forms of social 14 COM (96) 462. 15 The Commission has asked a high-level group, chaired by Mrs Veil, to examine the barriers that still hamper the free circulation of workers and individuals. On the basis of its findings, the grotfp will draw up proposals to remove the legislative, administrative and practical barriers that have been noted. 16 Short-term scientific missions under COST are one example of short-term staff exchange. IL organisation and communication need to go hand-in-hand with technical or business innovation. This is often more difficult, since it affects the attitudes, values and positions of the social groups involved. There needs to be a special effort in this area. The need for and beneficial effect of change, in the broadest sense, need to be widely discussed. Mechanisms whereby enterprises, the public and their representatives can be involved in discussing the major technological options and arrangements for the involvement of employees, users or consumers pave the way for the acceptance and ultimate success of innovation. There are many initiatives and successes at national level in these fields. The exchange of experience between Member States needs to be stimulated, and also where appropriate the linking in networks at European level of successful ventures, if this can help with their dissemination and improvement. 1. 7 The Commission will make a coordinated effort to use its various resources to identify best practice and disseminate the methods facilitating the involvement of socio-economic operators in managing innovation projects likely to have major social impact. 1. 8. 1. 9. It will encourage greater cooperation among national and regional bodies responsible for the promotion of science and technology and innovation and will disseminate the best practice, as part of the INFO 2000 programme, especially via the national focal points network (MIDAS). It will study the feasibility of greater cooperation among European television companies, especially as part of the Media programme, with a view to using successful national experience as a basis for promoting programmes for the popularisation of science and technology, as well as ways of reflecting scientific work realistically in audio-visual fiction productions. 4. Business management 1. 10. Involvement in the management of enterprises is not of course the responsibility of public authorities. However, these authorities can and must create an environment conducive to the ongoing improvement of business management and organisation. The rapid spread of information and communication technologies will contribute greatly to these adaptations and must be actively supported. Innovation is primarily the responsibility of enterprises, and managing change is one of the main challenges they have to cope with. But change is occurring with increasing speed, affecting markets and techniques and the related methods of design, production and organisation. If they are going to remain competitive, enterprises need to be able to absorb new techniques. But it is just as important for them to modernise their structure and organisation and reshape the methods, roles and responsibilities of each in order to innovate. They have to become not only places of permanent apprenticeship but also learning enterprises. "Agile" enterprises that are ready to react speedily to changing circumstances, to forge cooperative links with a wide variety of external partners (other enterprises, universities, consultants, centres of excellence) and thereby to constitute flexible sets of competence are likely to be the best suited to the demands of innovation. Innovation is also prompted by changes in the regulatory environment, the availability of resources and forms of financing and communication. Enterprises need to keep an eye on changes in these fields and keep a technological, economic and business "watch". ts Emulation of other enterprises, especially by means of benchmarking, is an effective way of spreading good practice in these fields. There needs to be more widespread use of management techniques17 at the most suitable level, especially among SMEs. 1. 11. For the benefit of enterprises the Commission will launch transnational pilot actions for the networking of certain sectors or technologies (see section C3(iii) below). These actions should be designed to explore best practice in the management and training fields. The results of these projects will be disseminated throughout the Union. A European Guide to Industrial Innovation will offer manufacturers a method of self-assessment for their strengths and weaknesses in the field of innovation, together with a guide to the relevant help and advisory services. 1. 12. In its communication on benchmarking the competitiveness of European industry18, the Commission pointed to the usefulness of this move for improving the competitiveness of enterprises. The Member States are invited to encourage the development of this practice which allows enterprises to track their progress against the best performers in a number of key areas of their activity (similar to the R&D "scoreboard" in the United Kingdom or to the company visits as part of the TOP schemes in Germany and Spain, the "Références" programme in France or the Inside UK Enterprise scheme in the United Kingdom). For its part, the Commission will support the linking in a European network of the various schemes at national level. It will introduce a Europe-wide "benchmarking" system, especially in the field of quality. 1. 13. The Member States are called on to reinforce their actions for the training of business managers and the social partners in innovation management. The Commission will support training schemes for innovation management, especially through the development of European networks of business schools and their cooperation with industry and SME support bodies. These actions will be especially designed to encourage thought about new forms of business organisation and their impact on the support structures and SMEs. As part of the operations under Objectives 2 and 4 of the Community ADAPT and SME initiatives, the Commission will also increase its support for the training of business managers, in particular of SMEs, in new management methods and the training for employees that is needed to introduce these new methods in enterprises. 5. Public authorities (i) Innovation in the public sector 1. 14. Government policy-makers are paying more and more attention to innovation and technology. But their idea of what is at stake and of the potential of technology19, as well as of the details of action on innovation, remains generally sketchy. 17 These methods include quality management concurrent engineering, flexible or "smart" production methods, integrated logistics management, teamwork and the empowerment and involvement of employees. 18 "Benchmarking the competitiveness of European industry", COM(96) 463 final, 9 October 1996. 19 The proportion of political leaders in the countries of the European Union with a scientific or technical background is low; recent surveys among some governments have, confirmed that few of their members were skilled users of computers or the Internet. 10 26 The Member States are invited to take steps to ensure that politicians, senior officials, regional authorities, project and fund managers are informed and made aware of what is at stake with innovation and technology. 1. 15 Public spending is close to and even exceeds 50% of gross domestic product in several countries of the Union. In this context, improving performance and spreading innovation in the public sector and in government can have a significant direct economic impact. This should also contribute greatly to improving the environment in which enterprises operate, as emphasised by the Advisory Group on Competitiveness (Ciampi Group) in its second report. in conjunction with the European Institute for Public From 1997 the Commission, Administration and on the basis of current work, will undertake a series of discussions and exchanges of experience on the promotion and dissemination of innovation in government and public services. A conference on this topic will be organised in 1997, and its findings could result in the publication of a green paper at the beginning of 1998. 1. 16. The Commission will continue its action under the "Information Society" initiative designed to encourage innovative approaches in the public sector. (ii) Public contracts 1. 17. More active competition in the case of public invitations to tender is desirable, as it can stimulate innovation. Several provisions in European legislation on public contracts allow for derogation or special rules of application, especially in the special sectors (water, energy, etc. ), if a tender relates to innovative products or manufacturing processes; full use should be made of these possibilities. Furthermore, the use of performance standards can make it possible to arrive at innovative technical solutions while ensuring proper competition. (iii) Analysis of innovation policies and systems 1. 18. There is a need for careful monitoring and constant analysis of innovation processes, their results and their impact at the socio-economic level. The comparative study of innovation systems, policies and infrastructure in the developed nations, and especially in the European Union, needs to be continued and exchanges of information and experience among the Member States encouraged. It is also important to boost the development, coordinated by the Commission, of a harmonised statistical information system including regular surveys on innovation in industry, services and SMEs, while ensuring that there is no extra administrative burden on enterprises. The Commission will reinforce its system of collecting and analysing information on research and innovation. It will draw up a permanent management trend chart for innovation policy and performance in Europe, with comparisons with the rest of the world. It will produce and distribute widely a regular report on innovation in the Union, based on national and international studies and analyses in this field. 11 2> 1. FOSTERING AN INNOVATION CULTURE 1. 1 NEW ACTIONS 1- Education and initial and further training Commission • Set up a "training and innovation" forum to exchange experience and disseminate best practice (1997). Member States and regional authorities • Make a critical examination of teaching programmes and methods and the training of instructors. • Adapt the content of initial training to develop, from the earliest age, creativity, spirit of enterprise, etc. 2- Mobility of students, research workers and teachers Commission • Put forward a wide programme aiming to enhance human potential in the Fifth Framework Programme for Research (first half of 1997); • Stimulate transnational "industrial PhDs" (placement of research workers/engineers in firms) (pilot action in 1997). • Make Community aids to mobility more flexible (5th FPRD). Member States • Adopt measures for the temporary secondment of research workers to firms, especially SMEs. • Ensure that the conditions actually exist for mobility between research and enterprises (assessment of qualifications, career development). 3- Innovation and management of enterprises Commission • Promote organisational innovation through Community instruments at its disposal (framework programme, Structural Funds and training programmes, etc. ) (1997/98) • Introduce a benchmarking system at the European level, (pilot project in 1997) 4- Public authorities Commission • Develop exchanges of experience on the promotion and dissemination of innovation in government offices and public services. Conference in 1997 and publication of a green paper in 1998. • Compile a permanent trend chart of innovation performance and policies in Europe (to be put in place in 1997). Member States • Develop initiatives to provide information and increase awareness among politicians and senior officials of what is at stake with innovation. 12 it 1. FOSTERING AN INNOVATION CULTURE 1. 2 CURRENT ACTIONS FOR IMPROVING THE INNOVATION ENVIRONMENT IN EUROPE 1- Education and initial and further training Commission • Implement the proposals of the White Paper on Education and Training (especially Erasmus apprenticeships, European apprenticeship statute). • Pilot projects to encourage links between schools ("Learning in the information society" initiative). Member State and regional authorities • Develop sandwich course training, especially at university level. • Encourage the effective knowledge of several Community languages. 2- Mobility of research workers, students and teachers Commission and Member States • Launch a debate on the Green Paper with regard to the mobility of research workers, students and teachers, and implement proven routes of action; examine and possibly implement the recommendations of the Veil Group. 3- Raising public awareness and involving those concerned Commission • Develop initiatives to disseminate best practice in this field. Member States • Foster a scientific and technical culture and awareness of the beneficial effects of innovation. Commission and Member States • Involve enterprises, the public and their representatives in discussing major technological options. • Develop measures to increase the involvement of employees, users or consumers and to facilitate the acceptance of innovation. 4- Innovation and management of enterprises Member States • Increase training activities for innovation management. • Foster the development of the practice of "benchmarking" among enterprises. 5- Public authorities Member States • Stimulate competition in public invitations to tender and the use of performance standards. 13 Xf B. ESTABLISHING A FAVOURABLE FRAMEWORK 2. 1. The establishment of an environment conducive to innovation needs, in the first instance, competition to function properly. The next task is to introduce an effective system at an acceptable cost for the protection of intellectual and industrial property. This also involves constant efforts to lighten the burdens on enterprises, especially the administrative formalities, while maintaining the protection enjoyed by consumers with regard to health, safety and the environment. Lastly, innovators need to have easy access to the funding they require for the various stages of their projects, and that their fiscal treatment should be conducive to innovation. I. Legal, administrative and regulatory environment (i) Competition 2. 2. Competition is one of the driving forces behind innovation. It is stimulated by efforts to combat monopolies and to open and liberalise markets. The Commission has always devoted special attention to innovation in its competition policy. The Commission will therefore continue to ensure that competition functions properly internal market and internationally. It will continue its action for the liberalisation and deregulation of sectors of the European economy that have hitherto been protected or too strictly compartmentalised. in the 2. 3 The Commission, in applying competition law, acknowledges the economic importance of a properly functioning patent system. It guarantees holders, by means of individual exemptions as well as exemptions linked to technology transfer agreements, maximum freedom to exploit their patents without any unwarranted distortion of competition. Recently20, it adopted a new regulation exempting certain categories of technology transfer agreements, thereby streamlining the rules that had previously governed such agreements21. In the past the Commission has adopted similar regulations exempting specialisation agreements22 and research and development agreements23. The aim is to avoid an individual notification system and case-by-case consideration, while ensuring legal security. Since these two exemptions will expire on 31 December 1997, the Commission will revise them, after a green paper that may be published, in order to update and adapt them to the current circumstances. The rules on State aids in the field of research and development (new arrangements of February 1996) set out to ensure equal treatment for the various operators in this area. Following the debate on the revision of the regulation on the monitoring of concentrations, the Commission is putting to the Member States a proposal to expand the scope of European merger supervision in order to cover a larger number of operations of Community interest and to avoid enterprises having to give simultaneous notification of cooperation agreements to a large number of national authorities that apply very different procedures, deadlines and physical criteria. Mergers of Community interest would thus be supervised using uniform criteria by the Commission acting as sole European antitrust authority. The Commission is also- 20 Regulation No 240/96 of 31 January 1996. (OJ L31,9/2/96) 21 The new regulation in fact abolishes the discrepancies between the regulations on patent licensing and on the communication of know-how, eliminates or shifts to the appeals procedure (the period of which is reduced from six to four months) several clauses which in these regulations prevented the exemption of certain categories and provides for new lawful clauses to ensure greater contractual freedom for the parties. 22 Regulation No 417/85 of 19 December 1984 (OJ L53,22/2/85) 23 Regulation No 418/85 of 19 December 1984 (OJ L53,22/2/85) 14 3* proposing to harmonise the treatment of structural joint enterprises. Lastly, the Commission is currently completing a green paper on rules for vertical agreements (exclusive distribution agreements, etc. ) in competition law. With regard to new high-technology products, where markets increasingly overlap, exchanges of information between the various bodies supervising competition are extremely useful. The Commission will therefore continue its dialogue with the competition authorities in. the United States, to allow approximation of the definitions of the relevant market, especially concerning agreements with a high technology input. (ii) Protection of intellectual and industrial property • Reviewing the overall structure 2. 4. The overall structure of the European system for the protection of industrial property is far too complex. A "Community" solution has been adopted for trade marks and designs (Office for Harmonisation in the Internal Market in Alicante), as well as for plant breeding (Community Plant Variety Office, provisionally located in Brussels), where incidentally the first protection rights were recently granted. An international convention has been used, however, for the European (or Community) patent. The Community can negotiate international agreements (TRIPS agreements under the GATT, for example) and it can issue regulatory texts, but there is a risk that they will have no effect on the convention for the European patent. In the European Union there are currently three patent systems, only two of which are fully operational. There are national patents and also European patents, which are the result of the Munich Convention of 1973 and are administered by the European Patent Office in Munich. The European patent is not a uniform industrial property right but it allows protection to be acquired in as many European countries as the applicant wants. The advantage of this system is its great flexibility, but there are some drawbacks because of the complexity and cost24. Also, there is no provision in the system for any court at European level with jurisdiction in patent disputes, which means that there is a possibility that courts in the Member States may make different rulings. The overall structure of the patent system should be completed by the entry into force of the third system of protection, the Community patent, stemming from the Luxembourg Convention of 1975. This convention, which was amended in 1989. has still not entered into force because of delays in ratifying it by the twelve Member States that signed it. The patent system in Europe was set up by means of international conventions. The reason for this is that these initiatives were taken at a time when the Community's responsibility in this field had not yet been established. This time is now over, and the Court of Justice has on numerous occasions acknowledged the Community's power to act with regard to patents, if this helps to attain an objective of the Treaty (free movement of goods or establishment of undistorted competition). According to the views expressed by users of the system, the European patent is generally satisfactory, although there are two major changes that need to be quickly introduced. The first concerns the patentability of biotechnological inventions, where current uncertainty should be remedied by the speedy adoption of the new draft directive submitted by the Commission at the end of 1995. The second change involves cutting the cost of European patents, and this could be achieved by revising the system of fees charged by the European Patent Office and by adapting 24 The total cost of filing and maintaining a patent in eight Member States is about USD 120 000 (compared with USD 13 000 for the whole of the United States). 15 V the procedures for translating European patents. Both of these ideas are currently being considered. As for the Community patent, the question is whether in its current form it still satisfies the objectives that were outlined at that time or whether it would be better to adapt it to progress in In its current form the Luxembourg the construction of Europe and to the needs of users. Convention applies only to the twelve Member States that signed it in 1989. The enlargement of the Community that has since occurred, and further enlargement in the future, require the Convention to be adapted to the new circumstances. The Commission will prepare in 1997 a green paper on the issue of the Community patent. It is foreseen that this text will consider: * whether the Luxembourg agreement on the Community patent should be converted to a legal instrument under the Treaty. * whether national patent convention should be further harmonised at Community level. * whether bridges should be built between the European and the Community patent system. * whether it is possible to adapt the system of taxes and duties in a way that corresponds to the services provided and is not a barrier to the protection of innovation. * Special case of biotechnology and the information society 2. 5 In advanced technology sectors, such as the information society or biotechnology, there are considerable economic imperatives involved25. Speed of action or response is vital. There is a need to achieve speedy harmonisation at world level of the rules of protection relating to new technologies if we want to maintain the ability for relevant research in Europe and stimulate the creation of new enterprises and the marketing of results. The codecision procedure on the new draft directive on the legal protection of biotechnological inventions needs to be completed as quickly as possible. For its part, the Commission will play an active part in the consideration which is now getting under way with regard to the revision of Article 27 of the TRIPS agreement and the follow-up to the Convention on Biodiversity. It will ensure, in these discussions, that European industry does not have to cope with conditions that are less favourable than its competitors' because of restrictive approaches to intellectual property rights. inventions, products or processes Article 27(1) of this agreement allows all in every technological field to be patented. It follows that, in theory, data processing programs and software inventions can be patented. On this basis the United States patent office has decided in some cases to issue patents for data processing programs for which copyright, which is usual, seemed inadequate, which would be impossible in Europe. This situation will become even more complicated with the development of multimedia software and the advent of the information society. With regard to the patentability of software and the repercussions of information society technologies on industrial property rights, the Commission recently started looking at the matter together with those concerned with a view, if necessary, to supplementing the harmonisation of the Member States' legislation. The Community has already adopted five directives since 1991 on copyright and related rights. In order to meet the new challenges related to the development of the information society, the Commission has published a Green 25 Products that have been on the market for two years or less account for 78% of income in the data processing industry. The biotechnology market, valued at less than ECU 10 billion in 1996, should be close to ECU 80 billion by the year 2000 (" Inventing tomorrow: Europe's research at the service of its people"). 16 37 Paper on Copyright and Related Rights in the Information Society, which prompted wide- ranging discussion among those involved. The Commission has just adopted a Communication to the Council and to the European Parliament concerning the follow up of the Green Paper; this one identifies four priority issues for which legislative proposals will be submitted soon (rights of reproduction, right of comunication to the public, legal protection of the integrity of technical systems and rights of distribution. In addition, it is proper to give special attention to the questions linked to the application of the rules of responsibility within the global environment of the Information society. • Other harmonisation methods 2. 6. In view of the major economic importance of designs and models and of the differences among the Member States with regard to design protection, the Commission will continue its efforts with a view to harmonising national laws26 and to create a body of Community law in that field27. In the field of employees' inventions it will launch a study on the need for and possible content of harmonised national laws and will start a discussion of this topic with those concerned. Lastly, in the light of comments on its green paper on Utility Models it will make a decision on the advisability of draft Community legislation in this field. 2. 7. As the Commission has pointed out in its Confidence Pact for Employment, the potential of the internal market will not be attained unless the relevant directives are transposed into national In particular, in the key area of intellectual property the legislation and actually applied. situation gives rise to concern, since only one directive has been transposed by all the Member States. The Commission asks the Member States in question to assume their responsibilities and to submit to their respective parliaments the required draft legislation by the end of 199628. • Reducing costs 2. 8. In the field of patents, there are supplementary proposals designed to solve the tricky problem of translation, as well as alignment wiuYthe systems of rival countries with regard to eligibility and costs and help in combating counterfeiting. The Commission supports the efforts of the European Patent Office to cut the costs of filing and maintaining patents, such as the review of current requirements concerning translation (along the lines of the 1975 Convention on the Community Patent, which requires translations only for the summary and in the event of protection being invoked) and will study whether to introduce incentive measures for SMEs, individual inventors and universities ("small entity fee"). With a view to a better allocation of the resources relating to fees for European patents, the member States are called on to examine the current system of apportioning the fees for maintaining European patents (half of which at present are paid to the European Patent Office while the other half are retained by the contracting States), in the light of the following questions: (1) is it appropriate that taxes to maintain the validity of European patents should finance part of the national patent systems? (2)should the present distribution ratio be kept as it stands or should it be modified? (3) within the framework of promoting innovation, doesn't this system entail negative effects, in particular when a large part of these resources is directly allocated to the general budget of the State and not to tasks directly related to innovation? 26 Modified directive proposal of the European Parliament and of the Council relative to the legal protection of designs. OJ n° CI42 of 14 May 1996, page 7. 27 Regulation proposal of the European Parliament and of the Council on community designs and models. COM(93)342 final. OJ N°C29 28 Action for Employment in Europe: A Confidence Pact, CSE (96) 1 final, 05. 06. 1996. 17 1} • Promoting protection 2. 9. Actions to make enterprises aware of the range of possibilities provided by the system for protection and training are needed. The Commission, in the Fifth Framework Programme, will reinforce its activities in this field, especially: • exchanging best practice among the Member States (especially the national patent offices) and with the EPO concerning the dissemination of "patent" information, and especially ways of making it accessible and comprehensible to SMEs; • checking the novelty of research proposals29, and the introduction of an information service for those involved in the framework programme (" IPR-Help Line"). 2. 10. The Member States are also invited to develop, with full regard for the international dimension, their training activities on protection30. • Combating counterfeiting 2. 11. Counterfeiting imposes a significant cost31. It therefore constitutes a special threat to SMEs, which are often reluctant to take legal action, especially in a third country. The Member States are invited to set up a support system for for SMEs and universities in the event of disputes and, where appropriate, loan procedures designed to finance the cost of a patent and the introduction of insurance schemes to protect enterprises, especially SMEs, against infringements of their intellectual and industrial property rights. The Commission has ordered a study on the potential role of the Community, by way of supplementing national action, in combating counterfeiting and will start consultation on the basis of the results. (iii) Administrative simplification 2. 12. "Administrative and regulatory constraints cost far too much in Europe. Some studies suggest the cost comes to more than ECU 100 billion a year32, particularly disadvantaging SMEs. Both the Community's approach and the work of national authorities in this area need to be reviewed. "33 A step in this direction has been taken with the establishment of the Molitor Group34 and the creation by the Commission, as part of its integrated programme for SMEs and craft industries, of the Committee on the Improvement and Simplification of the Business Environment. This committee provides the framework for the exchange of best practice in this area between the Member States and the Community. The Commission will put a proposal to the committee for a special programme on innovation. 29 The QUICK SCAN system pilot project under the Innovation programme, and in conjunction with the EPO, shows that the costs involved come to less than 0. 5% of the total costs of the project, and that it affects some 5% of the projects, which have to be redefined, reorganised or rejected for the lack of novelty. 30 Like Germany, which created 100 teaching posts in higher technical education during the first half of 1996. 31 In 1994 industry in Europe spent about ECU 2 billion on legal or out-of-court proceedings to protect patents. 32 A survey of 8 000 SMEs by the French Ministry of Industry in 1995-1996 revealed that the average annual cost of completing official forms was equivalent to one person working full-time for three months. 33 Action for Employment in Europe: A Confidence Pact, CSE (96) 1 final, p. 8. 18 Ih • Business start-ups The formalities relating to business start-ups, together with all the other compulsory procedures, are generally more complicated and take longer for European enterprises than for their competitors elsewhere. This has an effect on their dynamism, especially with regard to competitiveness. The studies and investigations that have been conducted have shown that some Member States had already started a sustained effort towards administrative simplification. In some countries of the European Union, the formalities for starting up an enterprise have thus been reduced to a single form at a one stop shop. Other countries that have not adopted measures of this kind are called on to follow this example and to simplify the formalities for setting up new enterprises. (Measures for stimulating business start-ups are also referred to in points B2 (i) Financing and C3 (iii) Start-up of technology-based companies. ) • Analysis of the impact of rules on innovation 2. 13. In the area of the internal market, the Commission recently launched a pilot project designed to simplify legislation in four test sectors: the SLIM initiative (Simpler Legislation for the Internal Market), a testing ground for more ambitious actions. If the pilot project is a success, the Commission will take account, when new sectors are being considered as part of the SLIM initiative, of the possible impact of the legislation on innovation and will ask the SLIM teams involved to attach the required importance to this aspect during their work. As has been done in some Member States, the Commission will test an ex-ante mechanism for assessing the impact of regulations on innovation35 as part of the general guidelines for legislative policy36. A much more uniform application of Community rules by national administrations also needs to be encouraged. This requires greater cooperation among the relevant authorities in the Member States, in line with the Council Resolution of 8 July 199637. The Commission will develop its support actions, especially with regard to the exchanging and joint training of national officials, similar to the Mattheus and Karolus programmes. • One stop shops to support innovation 2. 14 The readiness of public authorities and private operators to provide support services to SMEs has often resulted in a variety of advice, information and assistance services at national or regional level, the relevance and intelligibility of which are no longer obvious to the recipients. 34 Comments of the Commission on the report of the Independent Experts Group on Legislative and Administrative Simplification, SEC(95) 2121 final, 29 November. 35 Similar to the German Federal Ministry of Economic Affairs, which indicated in a report entitled "The future of the German industrial site", adopted in 1993, that "the German Government will ensure that existing or planned legislative and administrative provisions will be examined to see whether they represent an obstacle to innovation and to avoid, in the future, other provisions with the same effect**. A working party on the "deregulation of research and innovation" was formed 18 months ago within the Ministry of Research, Technology and Education. It reviews laws and regulations, etc. , from the angle of research and innovation. It is advised by external experts from many disciplines. The comments are sent to the relevant ministry, which is required to reply. Experience so far has shown that 70-80% of complaints are unfounded or can be easily resolved by properly applying existing rules. Another important problem that was identified is the multiplication of legal texts on the same subject but starting from different angles. The question is here is one of coordination. 36 SEC (95) 2255/7 37 OJ C224, 1/8/96 19 The Member States where there has been no initiative along these lines are invited to provide SMEs with networks of one stop shops operating at local or regional level which can be contacted by enterprises and others involved in innovation for information on innovation support questions and to make the best possible use of the opportunities offered by new information and communication technologies in these fields. At Community level the Commission will disseminate good practice in this field and implement greater coordination among the various networks for research and innovation support that are its responsibility. It will also ensure better contact between these networks and the national bodies performing the same functions in the Member States, in order to draw on existing bodies with acknowledged expertise. It will promote the EuroInfoCentres as the initial contact points for SMEs that do not yet have links with other networks38. (iv) Company law Initiatives are needed concerning the European company statute, the promotion of EEIGs and the joint undertaking or private company statutes. * European company statute 2. 15. The adoption of the European company statute would make it possible to lift certain obstacles to innovation that stem from the application of fifteen different legal systems and would help to attract the private capital that is needed for major innovation projects39. Enterprises in Europe would benefit from a legal framework adapted to the internal market and world competition. In November 1995 the Commission initiated a wide-ranging consultation of the institutions and social partners at Community level concerning the Communication of 14 November 199540 on informing and consulting workers. The primary aim of this Communication is to make the Community framework in this area more consistent and complete and to facilitate the adoption of the European Company Statute which has been with the Council for many years, and consequently some other proposals for statutes such as those relating to the European cooperative society, the European association and the European mutual society, as well as the proposal for the tenth directive on cross-border mergers. The Commission has set up a group of high-level experts responsible for presenting proposals which could resolve the impasse affecting these particular matters. • Other types of company 2. 16. The European Economic Interest Grouping (EEIG) is an instrument for cooperation among enterprises which has already proved its worth for launching and managing innovative projects. The Commission will encourage better dissemination of information on EEIGs. 2. 17* In the search for a structure that will make genuine legal integration a possibility, in addition to the cooperation permitted by EEIGs, the Commission is examining the feasibility of a joint undertaking statute based on Article 130N of the Treaty, which provides for the possibility of 38 Proposal for a Council decision on a Third Multiannual Programme for Small and Medium-sized Enterprises (SMEs) in the European Union (1997-2000), COM(96) 98 final, 20 March 1996. 39 The Ciampi Group estimated mat the lack of such a framework involves enterprises in an extra cost of ECU 30 billion every year. At the conclusion of the Florence Summit the European Council asked for negotiations to be speeded up with a view to its speedy adoption. 40 COM(95)547 final, 26/11/95 20 the Community's setting up "joint undertakings or any other structure necessary for the efficient execution of Community research, technological development and demonstration programmes". 2. 18» It also seems useful to encourage the creation at national level of a simplified private company statute. A flexible legal instrument of this kind would help the formation of small enterprises and companies with private share ownership, which are often innovative, without affecting the safeguards which company law must continue to provide for companies with wide share ownership. (v) Standards 2. 19. The creation of an environment for standards that is conducive to innovation instead of hampering it requires the promotion of performance standards and voluntary agreements, better links between the formulation of standards and scientific and technical development (perinormative research), together with greater awareness among those who devise and use standards, especially SMEs. The Member States (and, in their areas of responsibility, the European standardisation committees) are the adoption of voluntary standards between manufacturers and suppliers and, whenever possible in the technical rules and standards they issue and for public contracts, opt for performance standards, thereby ensuring greater freedom for designers of new products and stimulating competition among suppliers. to encourage invited They are also invited to increase their actions for informing and raising the awareness of enterprises, and also of industrial designers and research laboratories working on standards, and to promote the involvement of industry and SMEs in standardisation bodies and committees. The Commission intends in its Fifth Framework Programme to devote more attention to the links between research projects for the development of new technologies and standardisation activities (especially prestandards), as well as to the application of scientific knowledge to measuring performance (standardisation-oriented research and metrology). The Joint Research Centre (JRC) will have a special role to play in this latter area. The Commission will catalyse initiatives of market players for the deployment of new standards applications through experimentation, validation and demonstration (pilot) projects. the The Commission will promote cross fertilisation between sectors by stimulating assimilation of standardised products, services and best practices from highly innovative sectors into more classical industrial sectors. 2. Financial environment (i) Financing 2. 20. The question of financing is one of the major priorities that emerged from the discussion prompted by the Green Paper on Innovation. In this field a lot depends on private initiative or on the national or regional dimension. The aims to be pursued include: • developing a trans-European capital market for innovative enterprises, serving as the counterpart of the NASDAQ in the United States, as well as encouraging additional initiatives at national level; 21 •>> • encouraging investment in equity finance, in particular through venture capital, especially for new enterprises (start-up) and high-growth innovative enterprises which are a major source of new jobs41; improving the interfaces between those involved in innovation (including participants in Community research programmes) and the world of finance42. • For its part, the Commission has to ensure that the right framework conditions are in place, i. e. especially the effective introduction of the single market and compliance with the rules of competition. It also plans to work on ensuring that best practice is disseminated and facilitating their adoption, primarily through support for pilot actions but also by making full use of the Structural Funds and other existing instruments such as the EIB or the European Investment Fund. 2. 21 • Development of capital markets for high growth enterprises The Commission will see to it that the framework conditions are put in place for the development and proper operation in Europe of stock markets for "growth enterprises". In particular, the Member States need to complete the transposition into national law of the directives on financial services and information on enterprises, cooperation among national supervisory bodies needs to be increased, and the remaining legislative or regulatory obstacles need to be removed. There is also a need to create an environment conducive to their proper operation in terms of: - informing enterprises, and preparing applicants (the multiannual programme for SMEs provides for the part use of the Euromanagement initiative); - practices for dissemination of information on enterprises; - - electronic communication systems, etc. training of required specialists (analysts); A study which is being conducted as part of the Innovation programme will allow to specify the actions to be undertaken. • Investing in equity for innovation 2. 22. The Commission will disseminate existing best practice to direct long term savings (pension investment life insurance, save-as-you-earn schemes, "business angels") towards funds, involving risk. 2. 23. It will endeavour to consolidate the development of venture capital in Europe by encouraging the establishment of a favourable fiscal and regulatory framework in the Union and by favouring the establishment and use by the profession of performance statistics which could be evaluated in an objective and comparable manner at international level, especially with a view to facilitating the raising of new capital among institutional investors. 41 In 1994 ECU 310 million was invested by venture capital in Europe in start-up projects, representing 5. 7% of the value of all such investment that year. In the United States the corresponding figure was 37%. The proportion of venture capital invested in technology-based projects in Europe in 1993 was 17% in terms of value. In the United States the figure was about 80%. 42 In order to encourage investment in high-technology projects, EUREKA prompted in 1995 the "Interlaken Declaration", which was signed by banks in many EUREKA countries as well as by the EIB. This declaration represents an indication of goodwill with the aim of examining, in a favourable light but without any guarantee of acceptance, applications for risk, investment from EUREKA projects. 22 3* 2. 24. Also, as indicated in the Confidence Pact for Employment, the Commission plans to strengthen cooperation between the EIB and the Structural Funds in order to develop financial instruments for the benefit of innovative enterprises and projects in the least favoured regions. 2. 25. In collaboration with the EIF, the Commission will study the possibility of introducing mechanisms to support venture capital investment which have already proved successful, in particular in the United States (loans based on the amount of funds raised), and whose leverage effect on investors' anticipated returns minimises the impact of their fiscal treatment. 2. 26. The Commission will endeavour to strengthen the actions of the European Investment Fund in favour of innovation by introducing a pilot mechanism to encourage venture capital funds in which the EIF will have holdings to invest43 in the early stages of investment and innovative projects. • Developing interfaces between investors and innovators 2. 27. Using existing bodies, the Commission will develop the exchange of experience and the dissemination of best practice between public or private national and regional operators44. As part of the Innovation programme, it will provide support for transnational cooperation for the joint testing of new methods (e. g. technology rating, use of patents as guarantee, etc. ). 2. 28 The Commission will endeavour to improve access to private finance (venture capital) for those involved in Community research programmes (and Eureka). This could involve the setting up of an "Innovation Financing Help-Desk" designed to inform potential investors about current projects and their potential (e. g. access to Eurotech Data) and to help the enterprises and researchers in question to have easier access to private capital, especially at national level (e. g. information on sources and terms of access to venture capital, investors' expectations, etc. ). (ii) Statutory deductions 2. 29. The Commission has already issued a number of recommendations and communications in fields affecting the fiscal treatment of innovation. Two examples are the communication on the fiscal environment of small and medium-sized enterprises (SMEs) and the recommendation concerning the taxation of SMEs45. The Commission has previously stressed the need for a global approach to the question of statutory deductions (direct taxes, indirect taxes, social security contributions) in the wider context of Community policies. The European Council in Florence46 asked the Council for a report on the development of tax systems within the Union that took into account the need to create a fiscal environment which stimulates enterprises and the creation of jobs. This work will include possible actions to improve the fiscal environment of enterprises, which would also help innovation. There is a need, for example, to review the fiscal treatment of cross-border payments, interest and charges, since the Council has not been able to reach agreement on a Community solution. Given that intangible investment has a strong work content (research, training), it is much more affected than tangible investment by the steady rise in labour-related tax and social security 43 Since June 1996, the statute of the FEI allows it to take such participations 44 The first topics may be the stimulation (of networks) of Business Angels and their involvement in innovation, securitisation, hybrid financing (public-private) or the assessment of technical risk by financial institutions. 45 94/390/EC,dd 25/05/94, OJL177dd 09/07/94. 46 See conclusions of the Presidency, Florence 21 and 22 Juin 1996, SN/300/96 23 3 contributions. This structural trend, which has been detrimental to employment, ought to be reversed, as was pointed out in the White Paper entitled "Growth, Competitiveness, Employment". In 1997 the Commission will consider a communication on taxation and innovation which will take into account the effects of the trend in the structure of statutory deductions and which will propose to the Member States a number of "good practices" in this area, based on an analysis of national circumstances in the light of work under way in the Member States and the OECD. 230. The Commission will analyse means of promoting a fiscal and accounting treatment of intangible investment, especially in training47, that is conducive to competitiveness. 47 The White Paper on Education and Training recommends equal treatment for tangible investment and investment in training. 24 to? 2. ESTABLISHING A FRAMEWORK CONDUCIVE TO INNOVATION 2. 1 NEW ACTIONS 1- Protection of intellectual and industrial property Commission and Member States • Launch of a Green Paper on the issue of the Community patent (September 1997) Commission • Set up a service of assistance on intellectual property (IPR-Helpline) for Community research (1997) Member States Set up instruments to inform and help SMEs and universities in the event of disputes. 2- Administrative simplification Commission • • Introduce a pilot mechanism for the ex-ante assessment of the impact of regulations on innovation (end 1997). Implement operational procedures for coordinating Community innovation support networks (1997) Member States • Set objectives and a precise timetable for simplifying business start-up formalities. Member States and local authorities • Speed up the rationalisation of innovation support activities and bodies. 3- Financing Commission • Reinforce EIF action in favour of innovation and cooperation between the EIB and the Structural Funds (beginning of 1997). • Improve the links between Community research and risk capital, particularly through the provision of information and guidance services for those taking part in the framework programme and for investors (mid-1997). • Develop the exchange of experience and the dissemination of best practice between Member states and operators (1997 and 1998). Member States • Introduce the framework conditions for stock exchanges for growth enterprises. • Make greater efforts to direct "patient" capital towards risk investment. 4- Taxation Commission • Consider a communication on "taxation and innovation" (possibly in 1997). Member States - Promote fiscal and accounting treatment more favourable to intangible investment. 25 h 2. ESTABLISHING A FRAMEWORK CONDUCIVE TO INNOVATION 2. 2 CURRENT ACTIONS FOR IMPROVING THE INNOVATION ENVIRONMENT IN 1- Competition EUROPE Commission • FoIlowTup to the Green Paper on merger monitoring, extending the field of application of unified European monitoring of mergers and harmonising the treatment of joint structural enterprises. • Publish a green paper on the application of the rules of competition to vertical agreements. • Continue the dialogue with the competition authorities in the United States, to allow the bringing together of the definitions of relevant market particularly in agreements with a high technology content. 2- Protection of intellectual and industrial property Commission and Member States • Complete the harmonisation of legislations to take account of developments linked to the technologies of the information society and supplement legislations on design protection and employees' inventions. Commission • Strengthen anti-counterfeit measures. Member States • Ensure the adoption of the proposal for a directive on biotechnological inventions. • Support the efforts of the European Patent Office to reduce filing costs. • Transpose the European directives on the protection of intellectual property into national legislation by the end of 1996. • Develop training in this field. • Make enterprises aware of the competitive benefits of protection. 3- Administrative simplification Commission • Introduce into the work of the Committee for the improvement and simplification of the business environment a special action on innovation. • Accord the required importance to innovation when simplifying administration (e. g. in the choice of sector under the SLIM project). Member States • Provide enterprises with one-stop shops for innovation questions. 4- I^gal and regulatory environment Company law Council • Speedy adoption of a European Company Statute. Commission • Continue to encourage the use of European Economic Interest Groupings, especially by providing better information. • Study the feasibility of creating a joint undertaking statute (Article 130N of the Treaty). 26 h\ C- GEARING RESEARCH TO INNOVATION 3. 1. European firms have more difficulty than their competitors in turning the fruits of research into innovative products. The wide variety of situations in Europe means that this is not always true to the same extent, of course, but a number of indicators show that the efforts made so far have been inadequate48. 3. 2. Decision-makers and taxpayers regard an increase in research input as justifiable in a period of cuts in public expenditure49 and when businesses are striving to become competitive, if its advantages and spin-offs for society (health research, environmental protection, energy savings, etc. ) and for new products, processes or services are clearly perceived. Of course, research has the further objective of pushing back the boundaries of knowledge without necessarily bringing immediate practical benefits for industrial applications. Both basic and longer-term research are preparations for the future, but such work may also produce spin offs industrial applications. It therefore deserves to be pursued, particularly at national level, where most money is spent on it, but also at Community level in certain cases. in terms of immediate In knowledge-based economies, the efficient systems are those which combine the ability to produce knowledge, the mechanisms for disseminating it as widely as possible and the aptitude of the individuals, companies and organisations concerned to absorb and use it. The crucial factor for innovation is thus the link between research (the production of knowledge), training, mobility, interaction (the dissemination of knowledge) and the ability of firms, particularly SMEs, to absorb new technologies and know-how. 48 The document "The Competitiveness of European Industry" (COM(96) 463/3) is clear in its diagnosis: "Research and development represents another significant form of intangible investment for which European performance is insufficient. In spite of maintaining an advanced science base, total European spending on R&D at 1. 9% of GDP is up to one-third lower than that of the United States (2. 5%) and Japan (3. 0%). Research undertaken and financed by industry itself is an area for which the European lag with the United States and Japan remains particularly large (1% of GDP compared with 1. 6% and 2. 2% respectively). Europe has not been using its advanced base in science and technology to the best advantage and indeed the European research base does appear to be less market-oriented than that of its major competitors. Product development makes up less than half of R&D spending in Germany and France compared with over 60% in the United States and Japan. In addition, fewer human resources are devoted to R&D. Scientific research personnel represent only 0. 47% of the labour force, compared to 0. 74% in the United States and 0. 80% in Japan. Between 1984 and 1993, the European Union lost share in patents, the principal method of protecting intellectual property, for all sectors except aerospace and transport equipment. In terms of the total number of patents, however, these two sectors remain quite minor. In chemicals, the loss in share remained limited. The most significant loss took place in electronics, a sector in which R&D is highly intensive and which exerts considerable influence on innovation in the rest of industry through technology embedded in investment goods". 49 At the conclusion of its meeting in Florence the European Council asked Member States to strengthen their efforts to re-balance their budgets in the light of the general principles already identified, particularly with a view to reducing expenditure rather than increasing revenue, to restructure their expenditure selectively so as to promote intangible investment in human capital and research and development, innovation and the infrastructures essential to competitiveness: SN/300/96. 27 ** 3. 3. This requires a series of specific, essentially national measures which the Community can support by disseminating good practice, establishing gateways between national innovation systems and taking similar or complementary measures at Union level. The second series of measures is concerned with the architecture and methods of the Framework Programme, the aim being to meet the needs of industry and society more closely and to integrate the innovation and SME dimensions fully, particularly through the development of the Task Force system as a coordination mechanism. Lastly, the Community will see to it that other policies and instruments, particularly the Structural Funds and international cooperation schemes, are properly mobilised to this end. I. National measures with Community support 3. 4. There are huge differences between national contexts, and all initiatives taken will need to be tailored to the situation in the country concerned. A number of general recommendations can nevertheless be applied according to the needs of each innovation system. They concern: (i) • a long-term strategic approach to research; (ii) • strengthening of research by industry, in both absolute and relative terms; (iii) «start-up of technology-based companies; (iv) «closer cooperation between public, university and industrial research; (v) • expansion of the capacity of SMEs for absorbing new technologies and know-how; (vi) •demonstration of effective approaches to innovation. (i) A long-term strategic approach to research 3. 5. Europe needs to develop a long-term strategic approach to research and its applications which is targeted more closely at growth sectors of the market (including services) and at relevant gaps in national markets50. Initiatives of the "Key Technologies", "Delphi" and "Foresight" variety may help direct collective effort towards those sectors, disciplines or technologies which will be most crucial in the future. Their forte lies in their ability to foster broad-based discussion of potential technology options, to generate industry/research/public-sector/training/financing and other networks and to spark off interdisciplinary and inter-sectoral thinking. The Commission's role will be to: facilitate exchanges of experience between Member States in this sector; - - exploit the results of these initiatives to identify suitable pathways on a Community scale; - strengthen technology watch activities at European level within the European Science and Technology Observatory (ESTO), set up by the Institute for Prospective Technological Studies of the JRC as a focal point for Member States' observatories. The Commission invites Member States which have no experience in this area to consider pursuing this type of long-term approach (it will, if necessary, make a financial contribution from the Structural Funds). 50 The expected growth in the services sector has better prospects for job creation than manufacturing industry, for example. The innovation process in mis sector is very different from that of more traditional sectors. 28 W The Commission will also set up a working party to examine the types of - and means of administering - research and technology transfer programmes best suited to the needs of firms in the services sector, based on the experience gained through specific programmes which are already aimed directly at services (e. g. telematics, transport) and through the Leonardo training projects. (ii) Strengthening research carried out by industry 3. 6. The share of GDP devoted to research financed by industry varies widely from one country to the next: some are already above the level of our competitors, while others still have a long way to go. The total for Europe is 38% below that of the USA and 55% below that of Japan. Good practice, already fairly widespread but requiring strengthening in certain regions, includes: - - involving industry in defining research programmes and, where appropriate, in assessing proposals; increased contract activities of public research centres and universities (some of their resources must come from industrial contracts, obtained through competition); - generalised cooperative research programmes (of the COST or EUREKA variety), requiring a minimum participation from businesses; - institutional mechanisms or suitable tax incentives. Member States are requested to draw up quantified and ambitious objectives aiming to increase the share on the Gross Internal Product dedicated to research, to development and to innovation, in particular by encouraging research undertaken by industry (in particular the one financed by enterprises or the one financed by governments within the limits allowed by article 92 of the Treaty). (iii) Start-up of technology-based companies 3. 7 Actions for encouraging researchers and engineers to start up technology-based companies, whether within universities ("campus companies")51, located in science parks or as spin-offs from large firms, need to be intensified. Member States are invited to step up the action they are taking in this area, subject to the rules governing State aid and with emphasis on indirect measures, by exploiting existing structures which have been proved to work, such as the European Community Business and Innovation Centres (EC-BICs). The Commission meanwhile will begin in early 1997 to organise, as part of the Innovation Programme, a more thorough exchange with Member States on the best practice in this domain, involving leading players in the field. This exchange will concentrate on measures for facilitating the spread of such practice (covering intellectual property rights, social rights, financial arrangements, etc. ) and national or regional promotion schemes. 51 Numerous empirical studies have demonstrated the economic impact of mis type of company, particularly where innovation dissemination is concerned (Storey, 1996), and the added value of public support for their start-up (Mustar, 1995). 29 •f It will support the dissemination of best practice through pilot projects involving, for example, university technology-transfer departments and the regional institutions concerned (local authorities, chambers of commerce etc. ), risk capital companies and technology brokers. (iv) Closer cooperation between public research, universities and industry 3. 8 This type of cooperation needs to be intensified at national and regional level and geared more effectively towards innovation, start-up of new companies and. more generally, the transfer and dissemination of knowledge by: - closer links between research with training, by anticipating the needs of the productive sector; - opportunities for universities and researchers to spend some of their time developing a company; - a legal instrument enabling university staff and public research centres to conclude exclusive contracts with industry for exploiting results (already practised in several countries), or by taking equity participation; - encouraging research and technology organisations to introduce management and assessment parameters taking these aspects into account and to develop international benchmarking practices; - stimulating dialogue between the producers and users of technology (such as sectoral and inter-sectoral forums, technology clubs, etc. ). The Commission will continue to analyse the existing barriers and the factors conducive to this cooperation and will disseminate the results to interested circles on a wide scale. It will support the efforts made at national, regional and professional level to improve the management of research and technology centres to gear them up for innovation and will organise transnational sectoral or trans-sectoral forums with the aim of setting up specific cooperation schemes, and will ensure that they are professionally organised and managed. The aim of these forums will be to foster dialogue with industrial and research circles and between representatives of industry themselves on technological and organisational challenges requiring a response on a European scale via the framework programme or other mechanisms. The forums might constitute a basis for exchanges of best practice amongst firms and sectors of activity. If the mechanisms enable key pilot schemes to be identified, the Commission will ensure that the necessary resources for trying out these innovative approaches are made available. The Commission will also draw on the experience of the research-industry Task Forces in order to strengthen cooperation between players and disciplines and to concentrate and coordinate the efforts made. (v) Expansion of SMEs' capacity for absorbing new technologies and know-how 3. 9. This aim is to be pursued whatever the origin of new knowledge, methods and technologies. On a national scale this would involve such schemes as: - enhancing the effectiveness and transparency of national or regional innovation support activities; 30 <W - developing the job of mediator -between research, technology and SMEs (interface services similar to the British Business Links, technology follow-up teams similar to the French centres de resources technologiques, etc. )- able to put technological problems in the context of all SME innovation requirements (organisation, training, marketing, financing, etc. ); - easier access to external expertise, European or world-wide, particularly where organisation and management methods are concerned (e. g. the knowledge resource centres advocated in the Ciampi report) and cooperation between firms (clusters, networks and value chains); - helping to recruit or second researchers, engineers and technicians to SMEs; promoting visits (particularly transnational) between firms and other methods of demonstrating innovative technologies, methods and processes. Member States ought to extend the scope of their national measures for fostering the transfer of technology of international origin. A continued drive is needed to rationalise activities and innovation-support organisations in the regions and Member States (see Section Bl (iii) above), enabling them to reach critical mass and the necessary degree of professionalism. The Commission will continue to support such procedures under the Structural Funds and the Innovation Programme (regional innovation strategies and audits of the regional infrastructures for supporting technology transfer and innovation). The Commission will also intensify activities for creating improved links between the various national and regional innovation-support systems. Working with players in the field, it will identify the skills required and the tools needed to professionalise or, where appropriate, certify the new professions which will need to emerge in this context. The Commission will put forward, as part of the Fifth Framework Programme, a coherent and reinforced set of initiatives for encouraging and facilitating the transfer, use and absorption of technologies, whether or not these were developed in the European Union. It further proposes to give a considerable boost to the innovation support measures under the Structural Funds (see Section C3 (i)). Closer and more systematic coordination will ensure that these initiatives are complementary. These initiatives may include the following: support for technology transfer to companies or sectors in less-developed regions, particularly under the Structural Funds; support for the first use of new technologies, subject to subsequent dissemination of the experience acquired by the user (along the lines of the FUSE initiative and ESPRIT), and for technology transfer schemes giving young innovative firms access to European or international markets. (vi) Demonstration of effective approaches to innovation 3. 10 The Commission, in collaboration with European industry, will put forward a new generation of transnational demonstration projects, many of them under the European Union research 31 47 programmes, organisational and social aspects. illustrating effective approaches to innovation and incorporating technical, These transnational projects will provide a framework for "live" testing of transnational innovation and will demonstrate how similar innovations are treated in different cultural and national contexts, thus making it easier to remove obstacles to their dissemination. They will above all: • • • • • enable new methods, partnerships and services (such as intellectual property rights, project management and innovation financing) to be tested: show how to optimise the social benefits of technical innovation, particularly those affecting employment and improvements to working conditions but also involving the adoption of common standards; develop good participative management practice, so as to improve and accelerate industrial innovation; enable social groups52 able to act as innovation catalysts and multipliers to take part; encourage inter-sectoral apprenticeship by disseminating the results of pilot innovation projects between sectors. The Commission recommends that industrial research projects take socio-economic aspects into account and will take steps to promote their incorporation into its own programmes, with the help of economic and social science experts. It will take appropriate steps under the Fifth Framework Programme to support research and development schemes offering short-term and medium-term results and guaranteeing the environmental sustainability of production systems, and to facilitate the social acceptance of new technologies, particularly those in the information society (such as projects demonstrating the ability of new technologies to give stronger protection to fundamental rights, such as the respect of private life through the use of privacy-enhancing technologies). 2. Incorporating the innovation and SME dimensions into the Framework Programme 3. 11. This means totally re-engineering the Framework Programme. Its approach, implementation methods and management organisation therefore need to be adapted: (i) An integrated approach 3. 12. First, the Framework Programme approach needs to be an integrated approach. The Green Paper debate has confirmed53 that research and technology in general were merely one aspect of innovation - an important one, of course, but insufficient on its own. The organisational, 52 The Green Paper "Living and Working in the Information Society" illustrates how important it is for society as a whole and for wage-earners in industry to accept change. This last point will be enlarged on in the Green Paper on work organisation which is currently being drafted. COM(96) 389 final, 24/7/96 53 In the Community innovation survey, the ability to solve technical problems was the least of the obstacles to innovation named by companies. 32 management, market, financial, legal, protection, etc. aspects will be taken into account more systematically. This has a number of implications: • these elements will be incorporated from the definition phase of the most industrial programmes and the corresponding projects (including the safeguarding of intellectual property rights, standards and the subsequent assessment of conformity with such standards, private financing networks, long-term market analysis, design, etc. ); • closer links between RTD and other policies (training, internal market. Structural Funds, etc. ) will be fostered with a view to meeting the general criteria for rapid exploitation and dissemination of results; • the Task Force mechanism as a coordination instrument for designing and monitoring initiatives targeted at priority societal and industrial objectives, making for visible, selective and concentrated effort, will be refined to make the selection of topics more transparent and to ensure that as many SMEs as possible from all regions take part. • Coordination of Community and national policies should be put into practice. (ii) Adapted approaches to implementation 3. 13. Secondly, the ways of implementing programmes and projects will be adapted, primarily with a view to: • determining the overall technological aims and content of the work programmes for specific programmes, taking account of the main factors affecting innovation in their own spheres of activity; revision or stricter application of the evaluation criteria for project proposals to place more stress on the novelty of proposals, the quality of the exploitation plans submitted by the main contractors within consortia (and the extent to which they match the business plans of the companies or research centres concerned), the relevance of elements needing access to a transnational level (effects of scale, access for SMEs to the European market, etc. ), the expected benefits for other Community policies (employment, cohesion, environment, etc. ); encouraging preparations to exploit and disseminate results during the research stage by making available to the contractors new instruments, methods or good practice and support services for innovation and technology management, intellectual property, access to sources of private finance, etc. As stated above, close links will be established between Community research and innovation projects and sources of risk capital able to provide finance for projects arriving on the market, in cooperation with the European Investment Fund in particular; • redirecting the management and contractual follow-up of projects towards producing results ("deliverables") and/or achieving measurable objectives ("milestones") clearly identified by each main partner within a consortium. "Project Life-Cycle Management for RTD" will be developed, tested and put into practice. This model aims to achieve homogeneous criteria and methods for the whole of the Framework Programme, possibly using Total Quality Management techniques. 33 aiming at maximum user-friendliness for SMEs: faster procedures, a single interface and a system of rolling calls for proposals with a two-stage submission procedure; adapting contracts to allow more flexibility in forming consortia and enable them to be changed during the project, e. g. by bringing in SMEs or transfer organisations at a downstream stage to exploit or transfer the results, or to give stronger protection to the intellectual property rights of contractors when development or demonstration projects are involved; • • strengthening the measures taken (methods and resources) under the specific programmes in order to promote the exploitation of their results and the dissemination, mainly through demonstration programmes, of the generic know-how and technologies generated by them, to enable a growing number of firms to benefit from the spin-offs of Community RTD. Effective exploitation of the results of research projects will depend largely on the action taken by the partners themselves from the research phase onwards to prepare for exploitation by consortia or, failing this, for transfer to other partners (complementary studies on technology introduction, training in new technologies, documentation from the start of the project, preparation of licences, identification of partners, etc. ). Substantial funding is needed for such action if it is to work. The research project should therefore be part of an innovation strategy. This must be taken into account in the selection criteria, throughout the implementation of the project and in the assessment of the results. (iii) Coordinated management 3. 14. Accepting that large companies have an important roie to play in the Innovation process, in particular through their collaboration with smaller firms, this action should give more SMEs access to all research work and its results, develop technology transfer and stimulate innovation. This will call for closer coordination of the various initiatives so as to ensure: - better overall consistency, optimum exploitation of synergies between the various initiatives and increased visibility for action in support of innovation and SMEs; - an integrated range of services designed specifically for different categories of SME (including intellectual property rights, innovation management methods and access to risk capital); - more homogeneous implementation of measures for promoting innovation and measures aimed at SMEs, and the provision of gateways between projects at various stages (research, demonstration, transfer, exploitation); - greater coordination with other policies (regional, training, etc. ). Innovation promotion and more effective involvement of SMEs will depend largely on the availability, strengthening and rationalisation of existing networks of locally-based organisations covering the entire territory and possessing the necessary skills for advising and assisting the various players concerned, particularly SMEs, in innovation, preparing projects and finding partners (see Sections Bl(iii) and Cl(v)). The proposed programme "Innovate and enable SMEs' participation" should boost and effectively coordinate efforts to innovate, to disseminate technology and to promote greater participation by SMEs in research. 34 5~ v 3. 15. Finally, the debate on the Green Paper on Innovation and the experience gained through the Task Forces in the Fourth Framework Programme have demonstrated the usefulness of instruments which: • identify, together with users, researchers and industry, the technological obstacles whose solution is an economic and social priority in Europe; • mobilise expertise and private or public resources. Community or national, to the maximum extent in order to bring large-scale targeted projects to a successful conclusion, so obtaining faster results from research effort, avoiding duplication and increasing the visibility and the exemplary nature of Community research. In consequence, it would be desirable to improve at Community level: • general incentives to participate in the work of Task forces, by taking innovation more into account as a selection criterion for projects within the Fifth framework programme; • the efficiency of procedures by planning simultaneous or integrated calls for proposals for the various programmes for priority research. 3. Mobilising other Community instruments (i) Gearing the Structural Funds more towards innovation 3. 16. Not all regions have equal innovation capacity. Statistics show that the technology gap between the developed and less-developed regions of the European Union is twice the size of the "cohesion" gap, and various factors threaten to widen the gulf still further. The region is thus becoming a particularly appropriate level for promoting and strengthening innovation in Europe. Moreover, the links between cohesion, research and innovation can be managed more easily at regional level. Three considerations support this argument: • • • innovation policy must be based on in-depth knowledge of the demand from companies, including SMEs, in a given economic system: there is no standard model which could be generalised and this type of policy should be anchored in a regional context. Regions must find their own paths to innovation; the region is the most suitable level for the necessary collaboration between the key players in innovation; regional and local authorities are best placed to organise, at their own level, the innovative environment which is the basis for regional innovation capacity. With the above points in mind, and in addition to the action taken to promote innovation throughout the European Union, the Commission has implemented initiatives for strengthening the importance given to innovation in the Structural Funds. Most Commission initiatives such as the SME initiative, ADAPT and LEADER II, as well as Article 10 of the ERDF, give innovation high priority. Moreover, innovation is one of the priorities of the new directives concerning Objective 2, which states that "innovation is essential for maintaining competitiveness and employment". In the same vein, the Commission considers that innovation is an important element of the priority given to employment in the use of structural funds. It considers desirable therefore that Member States and the regions concerned invest more in innovation promotion schemes, subject 35 5/ to the resources available for the current planning period and in the next generation of Structural Funds54. The Commission will draw on the experience gained from the regional innovation strategy projects supported jointly under Article 10 of the ERDF and the Innovation programme. In the Objective 1 and 2 regions, the Commission recommends that Member States and local or regional authorities concerned to take fully into account the necessity to concentrate the measures for innovation, and particularly research, development, technology transfer and qualifications for workers, in order to satisfy the priority given to employment. In rural areas, in particular objective 5b areas, the Commission will see, within the framework of strategies for employment, to disseminate as widely as possible the good practice identified and validated by the European Innovation and rural development Monitoring System within the framework of the LEADER II initiative. Under Objective 4 of the Community initiative ADAPT, efforts will need to concentrate on innovation action, particularly on anticipating requirements and improving training systems, and helping SMEs to manage their human resources more efficiently. (ii) Making the most of the international dimension of innovation 3. 17 Action in support of innovation should take account of the globalisation of technologies and markets. Flows of information, knowledge and capital are accelerating and multiplying on a world scale. Incorporating this dimension means taking several complementary approaches: • Closer interaction between the Framework Programme and the COST and EUREKA cooperation frameworks. • Support for international industrial cooperation and promotion of collaboration between firms on the basis of bilateral agreements, giving European firms, particularly SMEs, better access to world technologies, knowledge and skills, taking maximum advantage of their know-how and strengthening their profiles on the markets of the future. • Intensified international RTD cooperation with non-member countries. This should be in line with the political objectives of the European Union (e. g. on energy and environmental protection or the establishment of the information society), adhere to the principle of mutual interest and, where appropriate, be based on bilateral agreements. In a spirit of reciprocity it will aim to involve organisations in non-member countries in Community RTD projects. Special attention will be given to the countries of Central and Eastern Europe on the waiting list for accession to the EU. Another aim will be to boost the attraction of the European research area for researchers from countries with which the European Union has links. Lastly, specific international scientific cooperation activities will be drawn up on the basis of topics and countries or regions such as the Mediterranean, the CIS and developing countries, in support of external policies and the industrial policy of the European Union. 54 The Employment Confidence Pact identifies the development of SMEs as the priority for structural policy, stating that "There should be a special effort in favour of the formation of SMEs and one- person firms. What is needed now is to make wider use of innovatory measures that have been proved to work, especially those involving financial engineering - notably access to risk capital. The development of SMEs is also helped by the research and technological innovation effort, as in the case of environmental technology, and especially access to new markets linked to environment-friendly products. " (Action for Employment in Europe: A Confidence Pact, CSE(96)1 final, 5 June 1996, page 24. ) 36 si • Stronger encouragement to entities in the countries concerned, through the possibilities offered by instruments such as TACIS, PHARE55, MEDA, etc. to search a stronger synergy with community research projects. • Continued vigilance in international negotiations over aspects liable to affect European innovation and its outlets (such as intellectual property rights and anti-counterfeit measures). (iii) Fleshing out the action plan in various priority sectors and fields of technology 3. 18 Some of the proposals in this action plan may prove to be suitable to specific sectors or technologies and adjustments will be necessary. The Commission will, as far as is possible, arrange for effective cross-over learning by setting up inter-sectoral and inter-technology links. Efforts will be made to take more account of the preoccupations of industry when policies are drawn up. The fields to be fleshed out include better exploitation of space and dual-use technology, rural development, consumption and the audio-visual sector as well as the environment and the services sector. Some examples are given below: a) Innovation is an important factor in the development of rural economies. Emphasis should therefore be placed on encouraging and disseminating innovation in the various domains of rural development, above all: • • • getting SMEs in rural areas to use new technologies; improving access by users in rural and/or peripheral areas to modern methods of information and communication; extending the services rendered to agricultural producers and SMEs in rural areas (studies, assistance with management, forecasting, risk assessment, etc. ). b) Aspects of demand are essential to innovation. This means, in particular, ensuring that new products and services meet the needs not only of firms but of the end user. Innovation should above all meet needs which may not be apparent through market forces alone (aspects of social and territorial cohesion, universal and general-interest services, user- friendly products and services, illiteracy, social exclusion etc. ). Considerations of demand also need to take a "sustainable consumption" approach. This also affects consumer protection in terms of product quality and legal environment. The latter is particularly important to computer products or services (Internet, smart cards, cybercash, etc. ). Legislation on these is still in embryo where both law and order and user protection are concerned. A multidisciplinary approach to these issues needs to be fostered in order to identify the action which needs to be taken. c) The audio-visual sector is a priority area whose evolution has accelerated under the impact of new technologies. The Commission will encourage partnerships between the digital electronics industry and centres of culture (broadcasters, museums and designers). To this end, wider consultation procedures on the effects the new technologies may have on the audio-visual sector in Europe will be launched and pilot demonstration projects will be run. d) An important sector of economic growth is the environmental sector (e. g. waste water, waste management, air and noise emissions) both, in terms of manufacturing industries and 55 For non applicant countries 37 f? services. These sectors have shown a significantly higher growth than the rest of the economy. Jobs in this sector grew vy 3% per year - about twice the rate of other sectors. Currently the environmental sector is dominated by end-of-pipe technology (and related services). However, the future trend will be towards the development of integrated clean technologies, an area where innovation is essential and necessary to speed up market introduction and application of these technologies. 38 f* 3. GEARING RESEARCH TO INNOVATION 3. 1 NEW ACTIONS 1. National measures and their Community back-up (i) Strengthening research carried out bv companies Member States • formulate quantified objectives and put in place the appropriate incentive policies. (ii) Start-Hp of technology-based companies Commission • organise thorough exchanges with Member States and players in the field on legal, fiscal and promotional measures (1997). • launch pilot schemes for disseminating good practice, involving universities, risk capital, industry and regional institutions (1998). (iii) Intensified cooperation between research, universities and companies Member States • set up a legal framework to facilitate exploitation by research organisations, including business start-up. (iv) Strengthening the ability of SMEs to absorb technologies and know-how Member States • support transnational technology transfer. Commission and member states • better links between national and regional innovation systems at Community level. (v) Demonstration of effective approaches to innovation Commission • set up a new generation of demonstration projects integrating the technical, organisational and social aspects of innovation (5th FPRD). 2. Incorporating the Innovation and SME dimensions into the Framework Programme for Research Commission • adapt the implementation procedures for the Framework Programme (project selection criteria, faster project selection, more demonstration schemes, legal framework for contracts); • strengthen the consultation and coordination role of the research-industry Task Forces; • develop, a programme "Innovate and giving SMEs greater involvement and providing an integrated approach to the goal of innovation through the legal and financial treatment of projects, particularly those supporting SMEs (5th FPRD). 3. Mobilise other Community instruments Commission and Member States • prepare to flesh out the action plan in various priority sectors and fields of technology. 39 ?7 3. GEARING RESEARCH TO INNOVATION 3. 2. CURRENT ACTIONS FOR IMPROVING THE INNOVATION ENVIRONMENT IN EUROPE 1. National measures and Community back-up (») A strategic vision of research and development Member States • consultations on long-term technology forecasting (Foresight). Commission • • facilitate the exchange of experience and the exploitation of results on a Community scale; stimulate the technology watch (network of national organisations around the European Science and Technology Observatory (ESTO)). (ih Start-up of technology-based companies Member States • stronger promotion of "campus companies" and spin-offs. (iii) Intensified cooperation between research, universities and industry Member States • pursue and strengthen action in this area. Commission • analyse the obstacles and disseminate good practice; • support national efforts to improve the management of research and technology organisations and their international benchmarking; • organise sectoral and inter-sectoral technology platforms. (iv) Strengthening the ability of SMEs to absorb new technologies and knowledge improve the efficiency and transparency of support structures. Member States • Commission • help professionalise the innovation support services; • set up a scheme for promoting the absorption and use of technologies (first-use support, access to technologies not developed in the European Union, internationalisation of young technology-based firms, regional projects). (v) Demonstration of effective approaches to innovation Member States and Commission • make better use of specialists in the social and behavioural sciences in technology projects. 2. Incorporating the Innovation and SME dimensions into the Framework Programme (see New Actions) 3. Mobilise other Community instruments Commission and Member States • direct more of the Structural Funds towards innovation; • make the most of the international dimension of innovation. 40 r Ù CONCLUSION: In the three main fields identified, the Commission is putting forward those measures whose priority, expected impact or urgency has been confirmed by the debate. At Community level these measures can be financed from existing or planned budgets without additional funding. The main effort must nevertheless be made at local, regional or national level. Action in support of innovation must be first and foremost the province of the Member States and those active in the field - above all companies. A more thorough analysis will be needed to take account of the wide variety of situations in the Member States. The Commission proposes to organise this in close collaboration with the Member States, so as to establish a joint reference framework and so help them identify the priority options and the opportunities for cooperation. It requests Member States to take the necessary steps to ensure, on an internal basis, efficient coordination of the measures deriving from various policies and, on an external basis, optimum interaction with the other Member States and with the European Union. The Commission will draw up a detailed implementation schedule and will precisely quantify the costs of the measures it is proposing. On this basis it will submit the corresponding legislative and regulatory proposals to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions. The Commission will report regularly to the European Council on the implementation of the action plan, including, where necessary, proposals for any adjustments or additions which may prove necessary in the light of developments or in view of the specific contexts in which the plan is applied. The enthusiasm and energy demonstrated must be mobilised in order to implement this Action Plan and so build a more innovative, competitive and job-creating Europe. 41 f/ ANNEX 2 1. Reactions to the consultation on the Green Paper 2. Recent developments in innovation policy in the Member States 3. Statistical tables anx1-en. doc i x*cv 70 ANNEX 2. 1. Reactions to the consultation A. Summary of the comments from those in the field B. Reaction of the governments C. Reaction of the institutions fc 2. 1-A- Summary of the comments from those in the field X éo Introduction Consultation on the Green Paper nas involved an unprecedented deoate on innovation not only m the fifteen countries ot the European Union, Out also in Norway and Iceland. More than forty thousand copies of the Green Paper were distributed. It was analysed, discussed and commented upon ov researchers, the heaas of large concerns and SMEs, public authorities, trade unions, professional associations and the various Community institutions. Conferences were held in 17 countries involving nearly 5000 persons. A large number of specific proposals were suomitted to the Commission. Apart from the national conferences, whose reports of proceedings reflect the range of reactions and the expectations aroused bv this initiative, the Commission received more than 300 contributions directly1, and their length and the quality of analysis of many of them Dear witness to the interest aroused by the Green Paper. , national and European federations, An initial analysis of the reports of proceedings of the conferences and the most representative (particuiarlv of the main professionai associations and trade unions large concerns and financial institutions) and relevant contributions is given here. These communications mainly concern the topics and the various routes of action proposed by the Green Paper, in particular as regards the improved orientation of research towards innovation, improvements in innovation financing, intellectual property rights and support for SMEs. In addition, some of these contributions propose topics little touched on in the Green Paper, such as organisational innovation, innovation in services, the role of large concerns, etc. This document gives an initial, non-exhaustive summary of these comments, grouped under the main topics in the Green Paper. The summary does not cover either the contributions of the Eurooean institutions or the officiai contributions of the Member States, which are descnbea in Chapters 2 and 3 of this annex respectively. The list of individual reactions to the Green Paper is annexed M Résumé 1. Amongst the topics proposed by the Green Paper, a number of major subjects in innovation for small and are touched upon more frequently particular, the financing, the protection of medium-sized enterprises. improved orientation of R&D towards in the contributions. This concerns, industrial property and support innovation, institution. As regards public research efforts, there As regards the improved orientation of research towards innovation, the general opinion is that the links between the world of research and industry must be improved by strengthening the capacity for dialogue between the t wo and by improving researchers' understanding of the problems of the business world. Technology watch is considered important, and national initiatives must be coordinated and exchanges of information improved, rather than setting up a new Community is a financing of pre- difference of opinion between competitive research only and those who favour the financing of the entire research process (up to the industrial-scale phase). In general terms, task forces are of interest to the larger countries, but the desire is that their working should be more transparent and that manufacturers should be able to become more involved in their definition. Finally, there is unanimous agreement that research programmes should be faster in selecting projects and that their procedures should simplified. As things stand at present, they seem ill-suited to almost all SMEs. the proponents of the As regards human resources, greater mobility is recommended, particularly recognition of between university and qualifications and greater emphasis on innovation-linked matters in school and university curricula. industry, along with Europe-wide innovation financing were the subject of a great many Improvements in comments which focused, in particular, on the need for a European-level financial market for innovative businesses, the establishment of links between technology and financing, the introduction of guarantee schemes and the use of the tax system to promote innovation. As regards the legal and regulatory environment, the comments focused on industrial property rights - considered to be a tool which was expensive, difficult to access and unfamiliar to businesses - and the need for a company statute suitable for the single market and affordable to SMEs. Finally, a great many suggestions concerned direct support for SMEs and the national or regional support infrastructure for such businesses. These are frequently specific to the individual Member States, and it is difficult to discern any common denominator. However, there are some recurrent features, such as research the need to programmes, - particularly public - services and to consider SMEs no longer in isolation, but against the background of their relationship with large concerns, customers and suppliers. in (national and Community) transparent facilitate participation to rationalise and make more the supply of s kl O ^- 2. In addition, some comments concerned topics wnich were not. or hardly, toucned upon in the Green Paper: it is the This concerned, in particular, innovation In the services sector (despite the fact that (ditto) "Innovation in services is a field which has been largely ignored. Innovation in the services sector plays an important role in instigating changes in the manufacturing sector" (Oslo). in Europe) and in the public sector largest employer innovation, wniie neglecting There was some criticism that the Green Paper puts too much emphasis on the technological aspects of the social and environmental factors. In particular, some circies feel that the promotion of the that organisational capacity of businesses nas been ignored. "The DGB regrets the Green Paper is too much geared towards the promotion of technology and that it takes only little account of direct measures to promote the operational capacities of businesses, which are of decisive importance in absorbing RTD". Furthermore, the trade unions (particularly in Germany) regret the absence of a reference, in the proposed measures, to those measures aimed at motivating and involving employees. The UEAPME also points out that "It is important to remember that innovation means more than just the development of new products: it is also organisational and structural". In the same vein, the concept of insufficiently emphasised as compared with radical innovation and high technology (IRDAC). Large concerns are frequently mentioned in the contributions as producing a large number of innovations. There is some surprise that they do not then feature in the Green Paper. "Large businesses are left out of the debate, despite the fact that they are major sources of R&D and the first to adopt innovations coming from SMEs" (CEST). incremental (progressive) to have been innovation felt is Finally, the picture painted by the Green Paper is sometimes felt to be too bleak. The pharmaceutical industry, for instance, is cited as an example of a European sector which has been very successful in exploiting its technological know-how in the commercial world. 3. The main topics raised in the various contributions are given below according to the five major objectives set out in the summary of the Green Paper: improving the orientation of research towards innovation • • bolstering the human resources for innovation • • establishing a legal and regulatorv environment conducive to innovation • developing the role and procedures of the public authorities improving the conditions for financing innovation t»; 1 / Directing researcn efforts more towards innovation It is important particular universities, to improve and in Europe between links industry. the world of research, in There is a widespread w i sh for improved adaptation of research programmes to the needs of to industry. Some contributions nevertheless stress maintain fundamental research w h i ch is not directly linked to immediate market increased dialogue and needs. This adaptation could be coordination b e t w e en sectors, particularly w i th a view to avoiding harmful competition in the use of the resources devoted to research. It also requires the intermediaries such as collective research associations, active involvement of the and university to industry. the organisation of the outcome of - and support - technology the need transfer from for One of the proposals at the Paris conference was to increase the involvement in in establishing research of business engineers and project managers relations between businesses and accompanying research projects right up to their transfer to industry. (The contribution of the CNPF also points out that, is a need to reassess the technology programmes and within France, there research bodies, w h i ch have in many cases " a g e d" w i t h o ut any subsequent review. ) trained for system leeway (Madrid). in industry" researchers for assessing is an obstacle their It is proposed that these criteria be revamped The unsuitability of university assessment criteria is frequently mentioned. The taking traditional criteria are based on publications and leave no account of researchers' aptitude for mobility and exchanges w i th industry. "The current to public participation and that the use of research results by businesses become a positive criterion. The principles currently governing regarded as a powerful brake on such collaboration. Researchers in fact often have a job for life. "Fixed-term for researchers working should be encouraged, when awareness could be enhanced and they could be trained in knowledge of the the business w o r l d. H o w e v e r, contrary, young researchers should be assured of stable career prospects in order to ensure t h at t h ey have the peace of mind needed for their creativity. institutes them on In addition, their tax incentives the labour market" in public for (Milan). they become available on trade union organisations researchers' careers are research taking possibly with that, on contracts think firms the Technology watch and economic information Technology foresight and technology w a t ch exercises carried out at national level are sometimes considered by businesses as a means of orienting the technological and industrial policies of the Member States, rather than as tools useful to businesses. "Technology create jobs only in the science of forecasting and not in businesses" is Economic and considered a problem is nevertheless t h o u g ht necessary, w i th manufacturers taking part in prospective technological study projects and the results of such projects providing some of the information of use to businesses. for businesses - particularly SMEs - to be dealt w i th separately, although a summary information watch and initiatives (UEAPME). technology technical foresight *H As regards prospective technological studies, emphasis is placed on the need to exploit w h at has already been acnieved by Memcer States Dv relying on their individual skills. Setting up a n e t w o rk of such initiatives receives more support than developing a new scheme at European ievel. "The centralised model for technology foresight is risky" (Oslo). on the information technoiogicai SMEs appear to oe making insufficient use of the technology w a t c h. Some doubts are expressed as to the neeo to provide businesses w i th even more information. The Berlin conference stressed that. "In general. SMEs do not need the more they nave". At this level, the distinction b e t w e en technoiogicai and information economic information appears artificial. Businesses shouid be supplied w i th information of direct use to t h e m, e. g. information on markets, the competition and the financial and legal fields. Manv correspondents say t h at SMEs should be made more aware of economic intelligence. The suitable f r a m e w o rk for this type of action would seem level, at w h i ch exchanges of information and studies b e t w e en businesses could be organised and local bodies such as Chambers of Commerce and Innovation Relay Centres involved. They already cannot use situation. regional to be the The public effort A number of points arose as to the advisability of increasing the public RTD effort, in particular the questioning of the distinction b e t w e en precompetitive and other research, the notice taken of cohesion objectives and the need for efforts to be more narrowly f o c u s e d. The participants at the German and British conferences displayed a certain lack of enthusiasm for a possible increase in R&D budgets. While this is regarded as a possible additional burden on businesses, a large number of comments question the existence of a direct link between R&D expenditure and the results in terms of innovation. The Birmingham conference felt t h at "Europe does not need more research". correctly-applied, It needs research. effective and high-quality in R&D programmes to Taking account of cohesion objectives conflict w i th the objective of strengthening the innovative capacity of European businesses, particularly by the participants at the Berlin conference. The BDI. in particular, states that "It is just as harmful research policy structural considered developed such cooperation to the funds". Nevertheless, measures aimed at strengthening cohesion are and more between the benefits of "Cooperation regions must be promoted, less-developed that (Madrid). taking care to ensure regions" funds a/located from for cohesion objectives, in the less-favoured to use Community as it is justified to fund R&D necessary. t h o u g ht remain is A number of contributors feel t h at the question of the advisability of financing beyond the precompetitive stage - and particularly in the industrial application phase - remains innovation In particular, "The process does not Support must be continued and include market entry" (Berlin). The Madrid conference mentions initial launching a programme which might the possibility of applications of specific technologies w h i ch have already proved their industrial "Moving utility. However, there is clear opposition from some large concerns. to be settled. finish with of a prototype. the production it is felt finance t h at the ^ towards zhe marKei-oiace means that favouring a smgie commercial enterprise or publishing it must cnoose tate- sustainable" information. Neither of these strategies is realisticailv puoliciy-fundeo R&D between overtly stage (SmitnKline Beecham). Finally, certain sectors (the electrical industries, in particular) feel there should be compensation for the fall in public R&D spending on defence. Task forces Task forces are generally considered - particularly by the large countries - to be a useful instrument for concentrating resources in major fields. Nevertheless, in order to improve their transparency, it is recommended that manufacturers be more effectively involved right from the design phase in selecting topics and preparing the work programme. "The role and operation of the Task Forces must be open and informed by consultation with industry and the output from various national foresight programmes" (CBI). While the participation of SMEs in the task forces is considered desirable, a large number of comments stress tne incompatibility between SMEs and task forces. The latter are regarded as being ot potential benefit above all to large concerns, and this explains the reservations on the part of some Member States. "The task forces, as set out in the Green Paper, are of no use to Portugal" (Lisbon). Finally, some major manufacturers have reservations about any move on the part of the European Union to coordinate industrial research efforts. They feel that a better solution would be to strengthen the cohesion of the Community programmes. Research programmes In particular, they seldom appear There is unanimous agreement that these should speed up the selection of projects and simplify procedures. to be adapted to the constraints facing SMEs: the cost of drawing up a file is considered disproportionate. for Community support (Birmingham). Finally, the business needs greater freedom and flexibility in the use of the funds. The very participation of SMEs in the framework programme is questioned, since it is felt that only a very small number of them are capable of making a genuine contribution and hence being eligible the specific programmes. "A small' high-tech business cannot wait for participation is an eternity" - six months in A number of proposals are aimed at decentralising the decision-making procedures and setting up bodies in the field. One comment mentions that to "EUREKA-type projects, which are close products, are worthy of reinforcement" that participation in the specific programmes could be replaced by more flexible arrangements involving indirect support. to manufacturers' concerns and (Paris). is also suggested It Furthermore, a number of comments relate to the project selection procedures: they shouid involve more experts from industry 66 Technical Qualifications snouid cs aeciaing criteria, •nvoivement ot a numoer ot partners from different Memper States the performance oojectives snouid investment in terms of R&D and innovation ïhe project evaluation snouid take account not only of the business oians. but-also ot he pians of the researcn institutes taxing part in the projects :ake account of ratner man return on the the ihe programmes should Finally, the concept oi collaboration between small and large businesses, and it should be possiPie to subsidise projects deriving from predetermined topics. rr. ore account of take 2/ Bolstering the human resources for innovation The mobility of persons between research, the education system and must be strengthened. industry to This echoes the concern mentioned before as regards the criteria for assessing researchers, which do not encourage them to take part in industrial projects. integrate young graduates into businesses, particularly Making it easier 'Local SMEs, is considered by ail the conferences to be highly mobility of researcners and students between academic and industrial circles to imorove education and training, but also to might be an interesting way foster (UNICE). There are already inventiveness the United programmes at national Kingdom. CIFRE ana CORTECHS in France, etc. ) which could act as examples for other Memoer States. One specific suggestion relates to graduates with doctorates, whose through post-doctorate traineeships in businesses, in particular SMEs. level (Teacning Company Scheme integration could be neloed and entreoreneursnio' important. in A number of comments - sometimes contradictory - are aimed at adapting the programmes (particularly the Communitv ones) to promote mobility: they should be made more flexible in order to genuinely meet the needs of ousinesses they should have no age limit they should be more focused they should be expanded and have their funding increased The lack of internal employee mobility towards fields in different specialisms is regretted. There is a need to reward changes of stream, promote assistance for career guidance, help staff to cope with change, expand part-time working, etc. There were numerous suggestions to the effect that school and university curricula should include subjects of relevance to innovation. In particular, there is a need to include economics and management in the training of scientists. More in scientific and technical curricula, industrial property rights should feature more prominently in university and even secondary education, etc. importance snouid be attached to experimentation Training should be suitable for all levels - whether for future managers or future unskilled operators, who should be prepared for frequent rethinks and technical changes yr U For some bodies, t h e. Commission s intervention should be directed towards developing networks of national agencies w i th responsioiiitv in the field, rather than setting up an additional body. 3/ Improving the conditions for financing innovation Financing is obviousiv a major concern. However, some comments draw attention to the fact that financing remains a resource like anv other, and that it innovation. alone organisation and entrepreneurial or technological deficits" "The problems attitudes are more important associated than is not enougn to ensure with financial I'Berlin). tne There is a major role for the European Union in facilitating the exchange of experience and best, practice, sn implementing harmonisation measures, or encouraging transnational financing initiatives Markets Most of the national conferences are in favour of the creation of a (NASDAQ- type) European market on w h i ch shares in young growth companies could be is not traded. Plans for setting up such a market should be speeded up. "ft businesses satisfying towards the on business (BDI). National to markets of this type must become international the US market, and this will naturallv have major itself, even capital repercussions the extent of demanding to point successful to be forced relocation" to have venture (Paris). Since this type of market caters only for the most dynamic businesses, other solutions have to be found to encourage investors (assistance funds for the recover transmission of enterprises, schemes giving investors their shareholding, mutualisation of risks along the lines of the Joint Venture Capital Fund. etc. ). the chance to Technology and financing for more account is general agreement on the need There to be taken of innovation and technology by financial institutions. To this e n d. it is suggested investment operations be launched, perhaps by setting up a that technology bank specialised in technology (Birmingham), that a technical certification or guarantee/insurance system be set up (at Community, national or regional level) the to serve as a point of first resort and attract outside development of "technology rating" systems be encouraged, so as to be able to "The quantify the chances of subject" European Union must encourage (ANVAR). industrial success of a technical project. finance, and that of experience exchanges this the on * t>? Guarantees Encouraging support from banks for innovative businesses involves minimising the risk to the banks, in France, "increasing the SOFARIS coverage rates should encourage banks to provide more funding for innovative SMEs" (Paris). Against this background, the fact that the EIF provides guarantees to banks is widely welcomed (Dublin, Helsinki, Milan, etc. ). Mutual guarantee societies should be authorised in a Directive to have a more for favourable capital ratio. "The risk cover levels required from these societies providing guarantees should be authorised to be more or less the same as those for banks" (Madrid). Taxation There is almost unanimous agreement on the need for more favourable tax treatment of the investor in innovative projects or companies. In particular, it is suggested that the capital gains on innovation securities (particularly in the case of individual investors) should be subject to lower taxes or even exempted, that the risk of loss for venture capital shareholders should be limited, perhaps via a that tax credit corresponding distributed profits should be tax-exempted, etc. to a certain percentage of investment, the These tax measures might be aimed specifically at encouraging sources of "patient" capital funds, save-as-you-eam life (pension schemes) to turn to venture capital investments. insurance funds, Finally, several suggestions relate to the improved tax treatment of investment by businesses in innovation, particularly in the field of training. Other measures Start-up capital should be encouraged, perhaps along the lines of the American SBICs, so as to ensure a better yield. The various schemes set up in this field introduced by the Member States should be studied and, if appropriate, elsewhere. The EVCA (European Venture Capital Association) recommends that the EIF should invest directly in SME capital via venture capital funds. This idea is generally welcomed by the national conferences, although it is difficult to assess the costs and impact of this type of measure. "There is no objection as regards the possibility of innovation funds, but there is some concern at seeing the money simply injected here and there" (Zeist, NL). The regulatory conditions within the Union must be harmonised to avoid a flight of capital to wherever conditions are most favourable. ^ 6<3 4/ Encouraging a legai and regulatory environment conducive to innovation Intellectual and industrial property rights attracted a number of comments. It is generally felt that their importance is underestimated. The expensiveness of patent procedures and the need for a harmonised system in Europe are two points with regard to which most of the national conferences consider the present situation unsatisfactory. Intellectual property rights A large number of comments concern patents. The situation in Europe is integrated regarded as too complex. "777e decision-makers should develop an approach with a view to improved protection of intellectual property rights in all fields" (UNICE). As the Birmingham conference points out, "A patent covering all the Member States is a clear priority". The entry into force of the Community patent should be promoted. There is unanimous agreement that the costs involved in patents, particularly the cost of translation, are too high. To make a future Community patent more attractive, these costs and the processing period must be reduced. In line with many other comments, the Athens conference calls for "a reduction in the cost of registering and protecting patents. R&D funding should be extended to the registration costs for innovative products. The importance of access to information on patents (information network, databases) is underlined. It also appears desirable to improve the image of industrial property rights, particularly by including specific courses in university (or even secondary) curricula. "In the US and Japan, patents and trademarks are considered factors which improve productivity" (Madrid). Efforts to achieve harmonisation are considered necessary and even urgently required and telecommunications). biotechnology technologies (particularly new the in Opinion seems to be predominantly unfavourable as regards the use of utility models. "The Commission should neither encourage their use at national level nor promote their use in the Union" (Birmingham). Defending one's intellectual property rights, particularly in third countries, is an expensive business. It is suggested that an insurance scheme be set up to cover these such costs, perhaps supported by public funds. "The introduction of such rights. Such a an insurance system system could be funded/supported for infringement of intellectual property (Sweden. from public funds" Administrative simplification Administrative simplification is considered essential. There is a widely shared opinion that it would be better to remove the administrative obstacles rather than set up new structures to overcome them. "It is more useful to remove the various administrative for overcoming them" (UAPME). In this context, ANVAR mentions that "the one- stop shop has proved to be a bad idea". to set up even more structure obstacles than 1o Company law All the comments agree as to tne adoption of a European puclic limited company statute going beyond the concept of an EEIG. However, it is frequently felt that this concept is difficult to apply to SMEs. for wnom there limited should be a special statute. "The rapid adoption of a European public company statute is a major factor in facilitating cross-border cooperation. The proposal for a small European iimiteo comoany' is a step towards achieving a joint solution" (DIHT). Competition Competition is generally regarded as one ot the driving forces of innovation. However, a number of comments call for a degree of relaxation of the rules in this field. The German Association of Chamoers of Commerce states that "Progress in certain fields is possible only through joining forces". for cooperative projects. The current Some contributions call for a reduction in the administrative burden on businesses by extending the field of application of the uniform ruies on mergers in Europe and by harmonising the treatment of structural joint subsidiaries. The BDI points out. in particular, that "The Commission should expedite and simplify authorisation procedures legal situation tends to stifle cooperation because of lengtny procedures and a lack of legal the scope of application of European merger control should certainty. Moreover, joint be extended, so subsidiaries simultaneously In similar to a large number of national authorities". to Siemens: "More and more cooperation agreements are vein, according to national merger control. This involves considerable expense and subject effort for the firms concerned, as well as risks. Mergers should be controlled on the basis of uniform criteria by the Commission". that companies are no longer compelled to notify Siemens also mentions competition, whereas only German competition between firms (supplier and OEM contracts)" that the principle of abuse applies law. as regards ex emotions by category "Article 85 also covers barriers to vertical to this field under relations for Others mention a revision of Articie 85 "to make competition between competitors possible (American 'rule of reason') except in the case of abuse or In the same way: "Article 85 should contraindication" be rewritten with a view to liberalisation and a comprehensive and dynamic market approach" (IBM France). (Thomson Multimédia). Assessment of the impact of regulations on innovation "All regulations must be assessed on the basis of their capacity to promote or hamper innovation. To this end, businesses must be involved as far upstream as possible in drawing up these rules at both local and European level" (CNPF). M 5/ Adapting the roie and procedures of public action in favour of innovation this topic attracts a iarge numcer of c o m m e n t s, to obtain a coherent overview, particularly because of is sometimes Althougn difficult the major differences in the situation in the individual countries. Some major subjects of interest can. h o w e v e r, oe discerned. it Support for SMEs There is frequent criticism of the system of classifying SMEs by employment size class, as this the wide range of problems affecting t h e m. is considered unsuitable for reflecting Several contributions also stress t h a t, instead of placing the emphasis solely on SMEs as opposed to large concerns, account should be taken of the entire customer-supplier chain and the large concerns' unused technological resources. In general, the c o m m e n ts are in agreement that pilot projects aimed at the "accompanying internationalisation of SMEs must be encouraged. Moreover, and selected SMEs access measures transnational or research centres firms or with universities together with otner in other countries" cooperation, should be to markets to allow (Madrid). taken The national or regional support infrastructure is t h at remark One general the public support programmes may appear complicated to SMEs. w h i ch have difficulty finding their w ay around t h e m. The German chambers of commerce state that they would w e l c o me a rationalisation of the C o m m u n i ty information centres, while the British employers' federation stresses the use of existing initiatives rather than the creation of new ones. "Care should proliferation subsequent find relay centres proximity to confusion taken information right balance between that would rejection" (UNICE). lead the be to of and and The French conference also mentions that the creation of support networks for SMEs should be promoted and the public support schemes opened up. More generally, most countries are the problems of SMEs. to promote global approaches trying to The Spanish contributions reveal a particular interest in the regional level (while stressing the fact that the Green Paper does not devote enough attention to regional aspects) and in strengthening the role of local authorities in innovation. This view is supported by several other contributions w h i ch mention the role of the local authorities in the field of support for SMEs. The field of science parks is also frequently mentioned as one in which there have been successes and which should be taken into account. Some other contributions are less upbeat, and the Land of Hessen states that "It is important regional innovation must not be taken as a dimension of innovation; of cure for all ills or as a reaction to the increasing globalisation to strengthen economies". however, regional the yr V Research programmes A number of comments of relevance to this heading had already been made under the heading "Directing research efforts more towards innovation", in particular as regards the difficulty facing SMEs wishing to take part in the research programmes. To overcome these difficulties, Daimler-Benz mentions that one effective way of fostering the participation of SMEs in the research programmes might be to involve them in the programmes together with the large concerns. research Other measures might be more effective innovation programmes "with a view process. General instruments, research projects and the utilisation of results are more suitable than fixed quotas in the specific programmes" the the needs of SMEs in the joint industrial tax incentives, to meeting for SMEs (BDI). than "improve The Madrid conference, to finally, notes firms, for transparency in the presentation of the procedures for public support the so that payment schedule, etc. are known It is also suggested that the application forms should be made more comprehensible and that businesses should be helped in replying to the authorities' requests. follow, from the outset". the assessment criteria, the proposal must is a need the stages there that vT 73 APPENDIX List of individual reactions to the Green Paper \r •fif List of individual reactions to the Green Paper Names Acronyms Country ' - * * * * " _ _ _ * * _ _ ARGO ESI-VU "ANACT ÀNVÀR Association des Consultants ABB CÀDÀS AËI aBaCus Partnership * ABB Ov Acaoémie des Sciences - institut de France - Comité Applications de Action in Europe for Education. Invention, and Innovation Afonso Paulo Manuel (consultant) Agence Nationale pour l'Amélioration des Conditions ae Travail Agence Nationale pour la Valorisation de la Rechercne Agencia d'Àvaluacio de fecnologia Medica * Air France Air Liquide Akademie fur Innovation, Unternehmensdesign und Politikgestaitung GmbH Die Denkfabrik Àkademie fur f echnikfoigenabschàtzung Àilianz Lebensversicherung, ÀG Amerada Hess ltd Amsterdam Economiser) en Sociaal Instituut Amsterdam University Arm der KartnerLandesregierung Ann Christoph (professeur) Ânsaldo _ Àrcadi - Réseau ARGO - Plastic Packaging Materials - Plastics in Ëngeering Arôvit Petfood Associaçâo Portuguesa de Professionals em Socioiogia industrial, aas Org. e APSIOT Association "Industrialisation des Recherches sur les Procédés et Jesj IREPÀ AGREF Association des Large concerns Françaises ANRT Association Nationale de la Recherche Technique AER Association of European Radios AIRI Assôciazione ItaÏÏa per la Ricerca Àssociazione Tiguïiio_Attiva + Promotiguïiio sri Atlantis Research Organisation Banca Nazionalejdel Layoro Banca Sella BASF Bayerische Vereinsbank, AG Bayerisches Forchungszentrum fur Wissensbasierte Système Becdelievre RolandJConseiller Général Le Mans) Bertelsmann, ÀG Bio Soft Bodilsen Holding Boehnnger ingelneim Bonn International Centre for Conversion Bonnaure P. (expert) Bosch, GjmbH Bouju André (consultant) British Ceramic Confederation British Technology Group British Telecom Bundësarbeitkammer in der Standigen Vertretung Ôsterreichs oei der EU Bundesveroand der Cteutschen Industrie Bureau of European Designers Associations __ Burmah Castrol _ _ Bûro fur Énergie und C^kologieManagement CÀRIPLO~""~ Casa de la Sabiduria SA Centre d'Études et Recherches Appliquées à la Gestion Centre de coolâérationjnternationale en recherche agronomique Centre""d'ë-Ressources et d'initiatives pour i'international Promotech Centre européen d'entreprise et d'innovation Çl?^ CentreÉuropéen des Entreprises ài Participation Publique Ç§?J Centre for Exploitation of Science and Technology Centre forrWorlcing~LTfe Research^& Dev. ment - Halmstad Ùniversity_ _ _ Ç^!u Centre fëchnïque ides Industries Mécaniques Centro de Enlace del Mediterraneo - Innovation Relay Centre_- CÉNEMÉS Centre de Formaçao Professional para a industria Ceramica BCC BTG BT BAK BDI BEDA ~ "'IJIJII'1. ^1II'Z. -1. 1. 1" CERAG CIRAÔ___ (Ministère de CR2i FORWISS CARIPLO CENCAL CETJM BASF BNL _ _ ' " _ _ _ _ _ _ _ * * • Un. Kingdom Finland France France Spain France France Spain France France Germany Germany Germany Un. Kingdom Netherlands Netherlands Austria Germany Italy France Greece Denmark Portugal France France France Belgium Italy Italy Greece Italy Italy Germany Germany Germany France Germany Denmark Denmark Germany Germany France Germany Switzeriana Un. kingdom JJn^ Kingdom Un. kingdom Austria Germany Netherlands Un. Kingdom Germany Italy Spain France France France France „. Ç?!?ÎM!T! Un. Kingdom. sJ^?^?n. France Spain Portugal r^ Centro de Robotica Intelligente Centro di Ricerca Fitotecnica Centro Promotor de inovacao e Negocios CERAME-UNIE Bureau de liaison des industries céramioues européennes Chanrmre de Commerce Américaine - The EU Committee Chambre de Commerce et d'Industrie de Paris Chambre économique autrichienne Chambre Régionale de Commerce et d'Industrie de Lorraine Chartered Society of Designers Chemical Industries Association Christeijk Nationaal Vakverbono Colas Colonia Assurance Commersbank. AG Compagnie des Signaux Compagnie Nationale des Conseils en Propriété Industrielle Compania Ëspanola de Petroleos * • Computermac Confédération Européenne des Syndicats Confederation of British Industry Confindustria Conseil Européen de l'Industrie Chimique Conseil National du Patronat Français^ Consejo Superior de Investigaciones Cientificas Consiglio Nazionale délie Ricerche Construction Industry Council Construction Research and Innovation Strategy Panel Cornwall Innovation Centre, Ltd Corporacion Empresanal de Extremadura Cranfield International Ecotechnology Research Centre Crédit Local de France CUV Progress Daimler Benz Danel Technology Consultant De Montgolfier. Philippe (consultant) - Essor Europe Deutsche Aktionsgemeinschaft Bildung-Erfindung Innovationen Deutsche Ausgleichbank Deutsche Bahn Deutsche Bank, A. G Deutsche Erfinder Akademie Deutsche Telekom Deutscher Gewerkschftsbund - Bundesvorstand Deutscher Industrie und Handelstag Ejner Hessei * * Electrolux Empresa Nacionai de Innovacion Sociedad Anonima Enemaerke & Petersen Ente Ernst & Young Esbjerg Oilfield Services Escuela Superior de Administration y DJreccion de Empresas de Espoirs Suscités par l e s j j u d es et la Recherche per le Nuove Tecnologie, l'Energia e I'Ambiente J^* '__ •* Ésso, AG UNINOVA_ ICPTN CËRAMI UNIE CCI de Paris CCI de Lorraine ^CSCT jCIÂ CNV " ^ CS CNCPI CEPSA CES CBI CEFIC CNPF CSIC CNR CIC CRISP CUV Progress DABEI DB DGB DIHT ENISA ENEA la ESADE Club Esper • ^_ ~ ÉTÂN Étane S. A. Europabiiro der Deutscnen Kommunalen Selbsverwaltung ~_" __" \ " ETAN Europe's J500 European Association of Aerospace industries European Autorr^tjvejnitiative^roup European Business and Innovation Centre Network European Confederation of Iron and Steel Industries European Council for Construction. Research. Development and Innovation European Council of Àppiied Sciences and Engineering European Economic Interest Group European Federation of Equipment Leasing Company Associations European Federation of technology & Innovation Consultants European Fondation for Entrepreneurship Research European Independent Steel Works Association * ( ; Europabiiro JEurope's 5 00 AECMÀ _ *L^'G E B N_ Eurofer ÊCCRËDI EuroCase ZEUS Leaseurope EFTIC _§^Ë^ EISA Portugal Italy" Portugal Belgium Belgium France Austria Prance Un. Kingdom Un. Kingdom Netherlands France Germany Germany France France Spain Denmark Belgium Un. Kingdom Italy Belgium France Spain Jtajy Un. Kingdom Un. Kingdom Un. Kingdom Spain Un. Kingdom France Bulgaria Germany France France Germany Germany Germany Germany Germany Germany Germany Germany Denmark Belgium Spain Denmark Italy Denmark Denmark Spain France Germany Belgium Greece Germany Denmark Belgium Germany Belgium Luxembourg Belgium_ Belgium Greece Belgium France Belgium Belgium vT K European Industrial Researcn Managment Association European Institute ot Social Studies * European Organisation for Researcn and Treatment ot Cancer European Organisation for Technical Approvals European Public Telecommunications Network Operators Association European Telecommunication Professional Electronic industry European Venture Capital Association " _ Eurostat Fauconnier Jean-Marie, Fédération Internationale des Conseils en Propriétés industrielles Federation of European Cancer Societies (architecte) Federation of Smail Businesses - National Federation ot self empioyeo and Federazione Italians aelle Casse flurali e Artigiane F I A J A u t o^ ~- — ^" ~~'_ - —- ~ ~ EIRMA EORTC EOT A ETNO ECTEL EVCÀ FICPI r-ECS F S E T_ R AT FIAT FIAT S. p'. A. Finmeccanica Finnish Forest Industries Federation Forbitec Ford-Werke Fraunhofer - Patentstelle fur die Deutsche Forschung Fraunhofer-lnstitut fur Systemtechnik und Innovationsforschung Fundacion Cotec para la innovacion tecnologica _ * COTEC Fundacion para el Desarrolïo de la Funcion Social de las Communicaciones Fundesco Gaz de France General Electric Compagny Générale de Placement Banque GlaxoWeilcome Pic _ '»""»" " 1 _ ~_ GPVindustri '""_ Groupe Ecole de Hautes Etudes Commerciales du Nord Groupement Européen des Caisses d'Epargne Groupement Européen des Entreprises d'Electricité Halarose of Oxford Handelsblatt - Wirtschafts und Finanzzeitung Haour Georges (professeur ) Hellenic Republic^ Ministry of Development Helsinki Inventors' Association _ "~'""_"~ G. P Banque EDHEC GECE" " Eurelectric Business Administration Innern & fur * Landwirtschaft, Helsinki School of Economics Hessisches Ministerium des Hoescn - Krupp, AG Huber Edelstahl _ _ lb Andersen Industri IBM DeutschTand ** HEKE Forsten, Ideon Centre Industrie und Handelskammer zu Aachen Industry Research and Development Group. Infobrief Innovation Relay^ Centre - Northof England * Innovatop Institut Catala de Tecnologia * Institut Français du Pétrole Institut National de Recherche Agronomique Institute for Managment of Innovation a_hd_Jj2chnology _ Institute for Material Researcn - Universitair Centrum Umburgs_ Institute for Strategic Consumer Research Institute of Professional Representatives before the European Patent Office * IHK zu Aachen IRC North England ICT j FP j N RA IMIT SWOKA EPI Institution of jCivH |ngeneers instîtuto de Desevoivimento e inovacao Tecnologica ao Minho Instituto Superior de Economia e Gestao Instituto SuperiorTecnico Instituut voor Maatschappelijke Innovatie Instrument, Measuring,Technique Servicing and Trading Company Limited _ IDITE Minho CEDE ""_ 1ST IMI_ M T A / M M SZ ^ Inter Primo International Federation of Science Editors _ Istituto di studi sulla ricerca e documentazione scientifica- _Consiglio i ISRDS - CNR Istituto Sperjmentale per la Frutticoltura Jular Kiel Institute of_World Economics^ Knight Peter (consultant) Impotaçào e comércio de madeiras, Lda. * _ _ IFSE _ * France jtajy Belgium Belgium Belgium Un. Kingdom Belgium Luxembourg France Un. Kingdom Belgium Un. Kingdom Italy Italy Italy Italy Finland Portugal Germany Germany Germany Spain Spain France Un. Kingdom France Un. Kingdom Denmark France Belgium Belgium Un. Kingdom Germany Switzerland Greece Finland Finland Germany Germany Germany Denmark Germany Sweden Germany Ireland Luxembourg Un. Kingdom Germany Spain France France Sweden Belgium Netherlands France Un. Kingdom Portugal Portugal Portugal Netherlands Hungary Denmark Italy Italy Italy Portugal Germany Un. Kingdom *r ?7 Koff Koninkliike Hoogovens Kovacs llona (professeur) Kraft Malerwerkstàtten Gmbh Kredietbank Kreditanstalt fur Wiederaufbau Krog Iversen &Co Labbri Mirko. (project manager) Lacave Michel et Dei Castillo Jaime (consultants! Lahure Bernard (consultant) Lancashire Enterprises Lancaster Centre for the Study of Environmental Change Landesbank Berlin Larsson John (consultant) * * Library and Information Commission Lloyds f SB Group LPE JD Databank (Lex Poot) Lyonnaise des Eaux Magneti Marelli Managment Construction and Engineering Marks & Spencer Maroushkina Maria (consultante) Medinova ÀB Merck KgaA Darmstadt Micrel Minister of Education of Lithuania Mission of the Republic of Hungary to the Eurooean Communities M. O. A. Développement Monte deiPaschi di Siena Mordchelles Régnier G. (consultant) Morgan Bruce Sollicitors Tavocats) Morin Jacques (consuitant) Mulcahy Noel (professor) Multi-Poles National Committe for Technological Development NatïônaiSchooï of Public Health _* Nestlé Nethold Finance Nonhoff Dieter (consultant) North East innovation Center Company, Ltd North Tyneside Council Nuclear Research Institute - Oepanment of Nuclear Technology Nutek nv Bank Nederlandse Gemeenten Observatory on Agricultural Research Systems Oie Flensted Holding Omega Generation Organisation de Copération et de Développement Économiques ôsterreichische Patentanwaît Kammer O t a t o n K Y ~ " ~^ Otto Versana P. T. Holding "" "•""™1_. ZIII1ZZZZZI1IZ. ". 1Z"I"I- Z Pateloup Monique (consultante) Patent-6ch Registreringsverket Pechinev Pentacie PFI-Prûf- und Forschungsintitut fur die Schuhherstellung Piastre Robert (inventeur) Preussag AG Preussenelektra, AG Qazar 7 Rank Xerox Renault Repsoi, S. A Researcn ana Consultancy Services tor Food. Land, ana Environment RETI NET - University of Salford Reunanen Matti - Kunnioittaen (consultant) Roma Ricerche _ _ _ ___ __ _ _ _ __;. ^_ * *. _ _ _ _ _ _ _ * * j ARTA LPE MACE M. O. A. Nutek IBV BNG OCDE PRV SAC Réti-net Denmark Netherlands Portugal Germany Belgium Germanv Denmark Italy Spain France Un. Kingdom Uji. JCingdom Germany Denmark Un. Kingdom Un. Kingdom Netherlands France Italy _ Uo. Kingdom Un. Kingdom Russia Sweden Germanv Greece Lithuania Hungary France Italy France Un. kingdom France Ireland Luxembourg Hungary Greece Switzerland Belgium Germany Un. Kingdom Un. kingdom Czech Rep. Sweden Netherlands Italy Denmark Italy France Austria Finland Germany Denmark France Sweden France France Germany France, Germany Germany Un. Kingdom^ On. kingdom France Spain Un. kingdom Belgium Finland Italy J*T VS * _ _ _ _ _ * * ^~ """ TME * ' " /' *~ " S&M ETHZ Tel Aviv DPI SCM Til TEKES TDF RWE AG (Khunt Oietmar» Siemens AG Smithkline Beecham SNIA Ricerche Sociedad Êstatal para ei Desarolio del Diseho industrial Société de Caîcui Mathémathique Steelcon Chimney, Esbjerg * * Stephens David Huw (consultant) STOAS_ * ~ StokisO_if_ Stratégie et Mutation (consultants) Strategiscne Studien der Transtormationsprozesse. Forschung una Beratung Studio Tempo, s. r. l Swedish Inventor Association Swiss Federal Institute of Technology at Zurich Swissair Tampere University of Technology Tech'Innove Exapnsion Technologie Beratung Technology Innovation Information f ËKÊS - Teknologian Kehittamiskeskus Télédiffusion de France Telefonica The CIM Institute The College of Management • Thomson Multimedia Totai _ Toy Manufacturers of Europe Trinity College - Dublin Unibus Rutertratik Unilever Union des Assurances de Paris Union des Banks Switzerland's Union des Confédérations de l'Industrie et des Employeurs dMEurooe Union Européenne de l'Artisanat et des Petites et des Moyennes Entreprises UEAPME Union Française des Designers industriels Union Internationale des Associations et organismes techniques Unioncamere Piemonte Unité de Formation et de Recherche en Science Sociales UniversidadI Nacional de Jducation a Distancia Universidade Aberta Ùniversidade Autonoma de Lisboa Université degli Studi di Pavia. Dip. to di Elettronica, Prof. Franco Maloberti Université di Bologna Université de Innsbruck Université de Lund Université deJVilnius University College Gaiway University of Hamburg University of Hamlstadt - ^gsl^nHalmstadt University of jCentral England in Birmingham University of Gôteborg University of Iceland, Scientific and technical Information Services UniversityVf Sheffield (National transputer Support Ce_ntre> University of Sussex^^cience Poiicy Research Unit University of Sydney - Graduate School of Business University of Warwick J* Usinor-Saciior Veba, AG Verbindungsburo des Landes Sachsen-Ànhalt bei der Europàische Union Vew. XG Victoria HoldingJ/ersicherung, AG Vienna Ëconomics_ and BA University __ * Vijla'ReSTud_ __". _" Voest Alpine Stahl Linz Volkswagen Volvo ÀB Vuman technology Services UAP _UBS_ UNICÊ _HH UCÉ* (ZÏegier Fritz) UFDI UATI CTESI _. __. ACLU _ _ UCG _ _ _ _ * * * * * *. NTSC ^SPRU" ~GSB Sydney WRI Germany Germanv Belgium ttaiv Spain France Denmark Uh. Kingdom Netherlands Belgium France Germany Italy Sweden Switzerland Switzerland Finland France Germany Luxembourg Finland France Spain Un. Kingdom Israel France France Belgium Ireland Denmark Netherlands France Switzerland Belgium Belgium France France ltaly_ France Spain Portugal Portugal Italy Italy _ Austria_ Sweden Lithuania Ireland Germany Sweden Un. Kingdom Sweden Islande Un. Kingdom Un: Kingdom Australia Un. Kingdom France Germany Belgium Germany Germany Austria Finland Austria Germany Sweden Un. Kingdom n Welsh Development Agency Wenzel Joachim (avocat) Wilson Roger (consultant) Wirtschaftskammer Osterreich Yorkshire and Humberside Regional Technology Network Zentrum Mechanisierung &Technologie WDA WKO RTN Un, Kingdom Germany Un. Kingdom Austria Un. Kingdom Germany jwr w 2. 1-B- Reaction of the Governments (Summary established by the Commission services) *%4 THE AUSTRIAN GOVERNMENT'S RESPONSE TO THE GREEN PAPER ON INNOVATION The Austrian government welcomes the GP! ana finds it positive to see a broad definition of the innovation concept being used, which recognises the importance not only of technological factors but also issues such as organisation, management, for economic participation, qualifications and culture, competitiveness, jobs and societal problems. innovation important is From an Austrian perspective, social innovation snouid be given more emphasis, with an accent on the relationship between technology, innovation and employment. However, future actions should take into account the qualified work in innovation policy and employment of the different organisation in the Member States, as well as, the studies of the OECD. The debate raised by the GPI is a process which, in Austria, will be combined with finalising a national technology policy concept. The Austrian Government welcomes the fact that innovation has gained a central position in the preparation of guidelines for the 5° FP, and propose that, at Community level, the INNOVATION programme should play a leading and co-ordination roie. Subsidiarity The principle of subsidiarity must be the starting point for all considerations with regard to education, taxation, legal and other institutional characteristics. Caution should be raised against creating new bureaucratic procedures with which to tackle the individual Action Lines of the GPI. Pragmatism and recognition of the crucial role played by individual economic actors should be the guiding principle. Task Forces Task forces are considered useful however, attention should be paid to the financial contribution of the Union. Transparency and Member States' participation in decision making must be secured SMEs The 'supply side' must be better adapted to the real technology transfer and innovation needs of SMEs. Useful pointers in this direction would be to consider the notion of 'continuous innovation', better use of powerful IT instruments, acceptance of the long term perspective from idea to commercial realisation, and adaptation of the support programmes accordingly. (The contribution of the CREST Working Group on SMEs could usefully influence further work on the GPI). Orientation of R&D towards innovation The Austrian government is also convinced that: innovation should be given a high priority in general in the Framework Programme; important as the innovations are at least as • • organisational and structural exploitation of inventions; I •v * a European innovation A w a ra ana oossioie PR activities snouid be organisée by cne Commission m oraer TC oromote innovation among SMEs, as well as. the general public. The Austrian government technology w a t c h. is sceDticai on the -oie of a centraiiseO institution tor Human resources for innovation The government, resources, notably: in principle, supports me GPI proposais concerning human the importance of teaching technoiogicai themes in schools; the need for better capabilities in communication and co-operation: the promotion of a better image of scientific and technological disciplines: life long learning; more attention to innovation management in education the enhancement of knowledge transfer and innovation through improved mobility of students, researchers and technicians/engineers; improved financial conditions for innovation For the Austrian government a distinction shouia be made between Business Angels (mainiv for smali companies), venture caoitai (for medium sized firms) and E A S D AQ (for larger firms). Banks need to develop a culture oriented t o w a r ds innovation and risk. More generally there is a need for stronger coherence and n e t w o r k i ng a m o n g st finance, management, organisation, different services technology, etc. The instruments of the Structural Funds could be more effectively directed t o w a r ds innovation. technology transfer, for Fiscal subsidies are limited by national budget constraints and, in any case, t h ey are subject to the subsidiarity principle. Create an environment favourable to innovation • It is better to reduce barriers to innovation than to create inefficient assistance for overcoming t h e m. • The setting up of firms and innovative projects should be simpler: a general locai. regional, national and C o m m u n i ty improvement of co-ordination b e t w e en levels is necessary. • A culture of (de)regulation is required w h i ch takes into account the needs and possibilities of entrepreneurs. • The strategic use of patent is lacking ana should be made an element in patent policy at national level and in the European Patent Office. • Harmonisation of patents fees and lower fees for SMEs are recommended. • Use of licences as a marketing instrument should be better promoted. & n DANISH GOVERNMENT'S RESPONSE TO THE GREEN PAPER ON INNOVATION. for in policies researcn and The Danish Government welcomes the initiative of giving a more central role to the innovation perspective The subject of Innovation has been topical in Denmark. The cultural context, social ana institutional innovation, regara for the protection of natural and energy resources, as well as information society the Danish Government welcomes a discussion of concrete actions. However, in its opinion there is a need for better use of analytical tounaation (OECD ana EU studies, for initiatives. The Danish example) to harness a coherent strategy Tor innovation Government agrees with the GPI. with certain five general objectives of the reservations: impacts, are all part of the context in which industry. Community R&D policy should not be confounded with narrow objectives industry policy Improving the access to finance should primarily be seen as a national concern In general, the actions at Communitv level must respect the principle of subsidiarity and therefore be justified by their European dimension, as for instance in the case for standards, IPR or especially expensive R&D. The following specific points are raised witn regard to the GPI action lines. Technology Watch will become more and more important for decision makers in the public and private sector. Community efforts should aim to develop cooperation and methodology in this discipline between the various national institutes. Priority areas for EU R&D should be defined with more attention to the demand side. Education must remain the concern of each individual MS however whilst rooted in the traditions of MS culture it could incorporate a European mutual recognition of skills and merits. Whilst agreeing with the benefits of mobility, such schemes must not become obligatory. Noting that the TMR programme has not achieved a sufficiently industry orientated dimension, such schemes must have different and realistic means of meeting different needs. Special attention is needed towards administrative and economic barriers for SME participation in RTD programmes. The Coordination of the Commissions own instruments such as Relay Centres and CRAFT is worth considering. Fiscal instruments should not be introduced at Community level but increased transparency of innovation and company related credits would be welcome. The primary aim of the Danish Governments Industrial policy is to encourage innovation in enterprises, especiailv in SMEs and at regional level. SMEs wno generally suffer from a lag in comoetencies and management remain a major *H concern and internal issues in this regard. reinforcement. networK and clusters are cited as key The objective of developing 'Economic intelligence' is an area in which the Danish Government would be keen to develop further experience. 1* THE GERMAN GOVERNMENT'S RESPONSE TO THE GREEN PAPER ON INNOVATION The German Federal Government welcomed the publication of the Commission's GPI 'Innovation Debate' had been going on in Germany for a and reported that the considerable time. There is a strong recommendation that innovation issues should be managed at Member State and Regional level for best It was also highlighted that the exchange of information and experience results. between Member States was of vital importance. It was felt that the Commission could undertake the coordination to initiate such dialogues. from this response It made particular reference to the following German initiatives the experience of which it felt could be of value to the European innovation debate: • The Koopman report deals with the formal presentation and effectiveness of regulations • The INSTI programme (Innovationsstimulierung der Deutschen Wirtschaft durch wissenschaftlich-technische Information) the aim of which is to help stimulate the German economy by providing relevant scientific / technical information • The Delphi technology foresight initiative has operated successfully at national level Each Member States' education system is unique, however it should contain basic It should equip those that Information Technology Skills, legal / commercial studies. have the ability and will to pursue individualised career paths. Technology watch activities are more successful if carried out at national level and Community coordinated comparisons made. Ultimately the decisions on what technologies are of most important are the responsibility of each individual business. Regular Innovation surveys in each MS were not were not recommended at this point. The German Government agrees with issues relating to intellectual property and It suggests that points out that patents are often a key factor in obtaining finance. to illustrate to the public the true cost of patent infringement, estimation of the social costs should be industry and subsequent It agrees in principle with Community. In the field of education, wide unemployment. use of utility models. illustrated e. g. loss of profit for It advocates greater transparency between MS on the content of courses rather than concentrating on the mutual recognition of the end product, e. g. qualifications. In order to enhance the mobility of researchers and students it suggests that EU innovation structural funds be used to employ graduates or school assistants. leavers as The simplification of administration procedures was welcomed and it was suggested that a seminar with industrial participation should be established to 'Brain Storm' on how to simplify procedures. *lb Whilst in agreement with the conceot mat researcn efforts snouid be better directed towards innovation, care must be taken mat this does not hinaer creativity or decrease the level of basic science in particular, at Community level. • The EU R&D programme should concentrate on a few specific areas of strategic importance to Europe's future: • EU R&D should be reserved for larger, nigh risk projects that could not be tackled at national level: • The objectives of each R&D programme snouid be cieariy defined with particular emphasis on their impact on the areas of strategic importance: • EU Structural Funds to be targeted for innovative means: • There is also agreement with the target that each MS increases its R&D expenditure to 3% of its GDP The German Government agrees that the benefits of innovation need to recognised, particularly by the gênerai public and ceiieves that the suggestions in the GPI do not go far enough. It suggests the following actions. • the impact of the EU R&D programmes to day to day life should be illustrated to the public. • examine the possibility of getting a group of PR consultants to put in place a series of practical measures to Dromote a positive image of innovation, possibly using modern IT methods. • In future such measures should accompany the Framework Programmes. *r ?1 THE SPANISH GOVERNMENT'S RESPONSE TO THE GREEN PAPER ON INNOVATION. General comments The Spanish Government welcomes the Green Paper. It approves the horizontal and integrated approach of the Paper and shares the need to articulate a European strategy to foster innovation. Although the Spanish Government shares in general the analysis undertaken of the situation in Europe, it regrets that the Paper does not fully exploit certain pointers given in the "White Paper on Growth, Competitiveness and Employment", such as: the economic fracture between large companies and SMEs, the social fracture, etc. In particular the poor treatment given to innovation as foundation of a long standing technological, social and economic cohesion, is considered inadequate. The Green Paper limits itself to addressing the main obstacles and challenges to innovation without a proper framework proposal to foster innovation. in the E. U. Finally more attention should be given to initiatives to promote technology transfer among regions and (traditional) sectors, to strengthen the competitiveness of SMEs. Specific comments /. Route of action 1: to develop technology monitoring and foresight. The role foreseen for the Institute for Prospective Technological Studies (IPTS) should be wider. 2. Route of action 2: to better direct research effort towards innovation. • The Programme Committees should address task force activities. • Early SME participation in R + D activities, not only on application results. • Among for the monitoring and evaluation of the parameters improvement of research living programmes, social and economic cohesion and conditions should be included. 3. Route of action 4: to further the mobility of students and researchers. Actions should be designed to attract (and retain) skilled human resources to less favoured regions. 4. Route of action 5: to promote recognition of the benefits of innovation. Traditional media (T. V. , radio, press. ) should be used to promote the public awareness in this field. 5. Route of action 7: to set up a fiscal regime beneficial to innovation. In the context of public deficit reduction, a previous thorough analysis of the budget cost of new schemes should be compulsory. 6. Route of action 8: to promote intellectual and industrial property. Research centres (public and private) should also be the beneficiaries of promotion policies. "%% 7. Route of action 9: to simp/if y administrative procedures. The Commission's views are fully shared. 8. Route of action 12: to encourage innovation in enterprises (SMEs) and strengthen the regional dimension of innovation. The necessary inter-regional cooperation and the coordination role of national administrations should be strengthened. 9. Route of action 13: to update public action for innovation. Direct public support instruments should also be encouraged. innovation policies should be addressed at Finally State/Governments, as the appropriate political forums to incorporate issues into Council Minister's agendas. level of Heads of innovation the ""39 THE FINNISH GOVERNMENT'S RESPONSE TO THE GREEN PAPER ON INNOVATION. The Finnish Government welcomed the GPI ana wanted to share the experience it has gained at Member State level with the Community and to actively participate in the follow up work associated with this publication. The following current initiatives interest to other in Finland- have proven particularly successful and may be of Member States. (i) National High Technology Mentor Programme has been introduced and tested with promising results. Experienced industrialists rate interested SMEs and issue a "European Venture Capital Certificate" to facilitate discussions with financiers. This approach has been prepared the Commission. in co-operation with (ii) Kera (the Regional Deveiopment Fund) has recently introduced a publicly funded low security small requirements for new companies, it has been very well received by SMEs. (under 20,000ECU) quick facility with very loan The Finnish Government supports the rapid increase of R&D expenditure. Europe cannot compete with Japan and US unless this expenditure reaches approximately 3% of GDP. To enable favourable deveiooment of a European innovation policy and promote the industrial competitiveness of Europe; the R&D expenditure should be increased both on a national level and European level. The ideas on improving European innovation processes must be incorporated into the fifth FWP to ensure its impact on European competitiveness: There is a need for external assistance in evaluating innovation; making market analysis and in other issues where the SMEs have insufficient competence. It supports the establishment of the EASDAQ and suggests that technology rating at a European level be experimented with and such knowledge disseminated. It also recommends that banks should develop skills and knowledge about the technologies and the specific financing issues that arise for technology based companies. TEKES is about to embark on the use of a new financing instrument called an equity loan. This loan is calculated as the company:s own equity capital, thus improving the company's balance sheet. Use of regionai development funds should be directed to R&D projects at the national level. It does not support the role of the IPTS in technology monitoring and would prefer to see current national systems used ana experience exchanged. Innovation in the service industry should be encouraged. The service sector should be included in the innovation financing systems and be treated on equal level with industry, as it is at least as important for employment. The following elements relating to innovation should be carried out at Community level: (i) preparation of common standards, directives and global agreements, (ii) mechanisms and cooperation forums that help MS and their enterprises to learn from the experience of each other, (iii) projects that are so wide or expensive that one country alone could not undertake them. So (iv) new common legislative and regulatory elements (e. g. European Company Statute), (v) coordination of EU innovation policy activities with other Union measures (e. g. structural funds, industrial policy). j/f COMMENTS BY THE FRENCH AUTHORITIES ON THE GREEN PAPER ON INNOVATION The Green Paper on Innovation is a useful contribution to public depate and an undogmatic statement on the important subject of innovation. Innovation and subsidiarity Innovation is a good example of a clear application of subsidiarity (innovation is first and foremost the responsibility of companies and founders of companies, since it is they, not governments, which have good ideas). European Union involvement in innovation is justifiable primarily for companies active on the European and world markets. Access for SMEs to European programmes needs to be improved. Analysis of the Green Paper In order to improve the private financing of innovation in SMEs. France has taken risk capital support measures such as the creation of the Nouveau Marché (1996). Studies of tax reforms aimed at innovative companies are under way, together with an incentive for pension funds, once set up, to invest some of their resources in innovation. France emphasises that it would be in favour of a Community patent (ratification of the 1992 agreement on the Community patent). Simplifying administrative procedures is still a matter for the Member States. The Commission analysis of the inadequacv of research input is pessimistic. In France, large sums have been invested in research at both national and Community level. France feels that basic research should be subsidised by the State in order to guarantee, inter alia, a link between basic research and the development of new products. France regrets that the Green Paper does not cover profit-sharing by researchers or nursery schemes. Action paths of the Green Paper France notes that the Green Paper lacks specific proposals and practical action which could be taken by the Commission. The Green Paper makes little mention of the Framework Research and Development Programme, and the over-rigid separation between Action 3. "Dissemination and exploitation of results" and Action 1, "Implementation" of research programmes, is regrettable. Better coordination between these two initiatives would be desirable in the Fifth Framework Programme. France also calls for more clarity in the objectives of the Framework Programme, which should promote our competitiveness in science and technology and cannot simultaneously play a specific coordination role (which is more a task for the ERDF). France welcomes the excellent Task Forces initiative. H France has more reservations about the emergence of new observatories such as the Innovation and Rural Development Observatory'' and the "European "European Observatory of Innovative Practice in Vocational Training". Strengthening the Seville Institute is not a priority. On the other hand, France suggests that more could be made of the forecasting efforts of the Member States, such as "Technology Foresight" in the United Kingdom and "100 Key Technologies" in France. France wishes the European Union to act as a coordinator and to ensure that there is consistency between public initiatives and private input which will, within the Framework Programme, support the industrial research financed jointly by the Commission and manufacturers or public laboratories. The Commission could thus give basic research a genuinely European dimension and boost the development of key technologies. *f 9% THE IRISH GOVERNMENT'S RESPONSE TO THE GREEN PAPER ON INNOVATION. "he Irish Government welcomed the GPI ana agreea in principle with the main thrust of its contents. The following points illustrate the Irish Government's point of view in relation to specific items: (i) There is a limit to the capacity of Member States to mount extensive Technology Watch exercises, thus it wouid be bénéficiai if this activity could be carried out at the EU level concentrating on 'technology push' (ii) Task Forces as currently presented would oniy stimulate in It is suggested that the method of selection of innovation certain sectors or countries. Task Forces should reflect the needs of ail Member States. (iii) The importance given to SMEs in the GPI is welcomed and the Irish Government, under its EU Presidency has been instrumental in having a Working Group of CREST establishea to examine ways of encouraging greater SME participation in EU researcn programmes. Whilst a number of Routes of action would also facilitate improving conditions for SMEs, it was stressea ideas ana that a more knowledge Current policies in Finland and Israel were cited as examples. interventionist policy was required into the commercial phase. in research to extract institutes (iv) The perception of science, technology and innovation must be improved amongst decision makers, industry and the public. The whole concept of learning needed to be instilled as part of the innovation process. Training was considered too specific an activity to achieve this mentality. (v) Financial incentives were considered most critical and proposals to establish EASDAQ. bank guarantees in favour of innovative SMEs by the EIF and the creation of multinational seed capital funds were welcomed (vi) The technology importance of it was suggested that a dedicated set of actions be drawn up to emphasise that the absorption of tecnnoiogy, regardless of whether it was created inside Europe or outside can often be a more relevant solution for firms than internal R&D. transfer was emphasised ana (vii)The STIAC (Science, Technology and Innovation Advisory Council) review to linkages and networks, particularly emphasised overcome the disadvantage of small scale importance of the X ^y THE ITALIAN GOVERNMENT'S RESPONSE TO THE GREEN PAPER ON INNOVATION. The Italian Government welcomed the Green Paper on innovation and agreed with its conclusion and proposed action. It feeis that the GPI and the Synthesis Conference in Rome (30 May 1996) were useful opportunities to raise awareness on various matters related to innovation in Europe. The Italian Government agrees that investments in science and technology should be made according to the needs of society and/or industry. It suggests that, apart from the barriers to innovation considered in the GPI, future action should take into account sectoral barriers to innovation, i. e. those relating to specific sectors of industry such as assembly, manufactured goods production and mature industries. It suggests European Union intellectual property. that particular attention be paid to encouraging the protection of 3T 9\ THE NORWEGIAN GOVERNMENT'S RESPONSE TO THE GREEN PAPER ON INNOVATION. The Norwegian Government welcomed innovative capacity of Europe. The following points highlight its opinions on critical factors emanating from the debate. to enhance the initiative this (i) Efforts on technology watch should be better coordinated ana the work of institutes like iPTS should be wideiv disseminated. (ii) Further work in the area of statistical innovation surveys is required. Such work should be more closeiv linked to OECD work. (iii) The Community should play a key role in developing new and transparent skills recognition systems (iv) The development of a European capital market. EASDAQ. was welcomed (v) Concerned at European companies moving their R&D activities outside of Europe due to inhibiting legislation e. g. intellectual property iaw. Further initiatives in this area should be closely linked to OECD & WTO initiatives and coordinated between national and communitv levei. (vi) Exchange of experience in the field of regional conditions for innovation should be strengthened The Norwegian Government points out the fact that skills to analyse and identify It also economic intelligence are in short supply and need to be strengthened. stressed that a European innovation policy for the 21st Century must include a deeper analysis of the innovative capacity of the service industry. ** a / THE PORTUGUESE GOVERNMENT'S RESPONSE TO THE GREEN PAPER ON INNOVATION 1 Policy of Innovation The tormuiation of the "European paraaox" involves a iinear ana out o f d a te vision ot innovation. The R&D ooucies and a possible C o m m u n i ty the phenomenon of inaustnai Policies ana of innovation Policy can neither Enterprise Policies, nor solve maior orooiems. such as the distribution ana the demonstration, w h i ch are of a prime necessitv transfer of resources of the R&D programmes towards a Policy of Innovation appears to be missing viability at the political and economic levels. tne SMES. For Portugal, the gaps ot remeav the for innovation, g r o w th and employment. the problems of 2. G r o w th and Employment - social and organizational Innovation Portugal considers that the green Paper tackles only in a limited w ay the problem of technologies the links between create n ew w h i ch can solve opportunities for the companies, but their innovative application in w a y, including the In this respect. Portugal also new wishes the revitalization of the rurai areas, teacning and the training, health and proolems of the 3rd age. forms of social and organizational implementation of actions It is not the the organizations, or w h i ch innovation. referring t o wn planning and the to to 3. Financing Portugal considers that the creation of a framework favourable to the operation of a the creation of European European venture capital companies innovative goods and services. At the same t i m e, it gives its assent for the creation of a market of the type EASDAQ. financial market should be envisagea, bv encouraging to finance the companies offering 4. Taxation In order to be able to create a system of tax incentive articulated w i th the national systems of direct aid, Portugal suggests that action should be taken at the level of the increasing reasons of competition, homogeneity of the regulations and in view of the conaitions of investment in the single market. tax harmonization in v i ew of the for 5. Transnational n e t w o r ks b e t w e en companies Portugal stresses the lack of encouragement and of Community support (in particular in the SMES) allowing the participation of the companies of the countries the least advanced in shared cost transnational projects, gathering major companies and SME. Consequently, it proves necessary to promote, within the SMES, the knowledge of the European markets, and of the methods of access to the R&D C o m m u n i ty f u n d i n g, and to develop cooperation n e t w o r k s. i 6. Task forces The laudable intentions to coordinate and articulate between the various programmes w h i ch justify the creation of the Task forces suffered from the lack of transparency of their selection and financing procedures, thus generating confusion in the debate between the green Paper on innovation, the financial aid for the 4 t h. PCRD, and the beginning of the discussion of the 5 th PCRD. However, Portugal is favourable to the Task transport and multimedia educational s o f t w a r e. transport, maritime forces concerning intermodality of the * 9} THE DUTCH GOVERNMENT'S RESPONSE TO THE GREEN PAPER ON INNOVATION. The Dutch Government is in full agreement with the main points outlined in the Green Paper on Innovation. Recent studies undertaken in the Netherlands have enabled this country to have experience in almost all the Routes of Actions described in the GPI. Conscious of the principle of subsidiarity the Dutch Government feels that activities at Community level should only be considered if a project transcends the national dimension or if they arise directly as a result of Community policy or regulations. The following points illustrate the Dutcn Government's view on key policy areas: (i)Cautions against the use of European funds as investment capital (ii) Welcomes the formation of EASDAQ, on condition that such an exchange is left to the market (iii) Cautions against European prises or certificates until the value of such Community initiatives become clearer (iv) Endorses the key issues relating to permanent education and emphasises the need to establish methods of mutual recognition of training and skills of each MS. The Dutch Government points out that the inclusion of issues of a general nature e. g. administrative costs, labour / patent law etc. which are often addressed in separate regular consultative forums, specifically set up for that purpose. It is imperative that innovation is included on the agenda of these forums. "W SWEDISH GOVERNMENT'S RESPONSE TO THE GREEN PAPER ON INNOVATION the role of schools The Swedish Government was concerned at the very technical slant to innovation that was presented and stresses that innovation influences every aspect of life. It individuals and particularly emphasises in the creativity of It feels that all suggests that work by the OECD couid be of interest on this subject. the Routes of Actions are geared to through innovation and while this is commendable there are societal needs to be addressed increasing which will also require very innovative approaches e. g. care for the numbers of elderly people in the population. Organisational innovations were also considered lacking. improved economic performance A few specific points gives an indication of the Swedish Government's opinion of the GPI. The role of the Commission in improving European Innovation should be limited to activities which are not viable to undertake at national level. One major area would be transfer and exchange of experiences and knowledge between Member State. the coordination of The contents of the thirteen Routes of Actions contain nothing new. Such information has been tried and tested for some considerable time, often not succeeding in contributing much to innovation. It is concerned that the ratification of the European patent convention might not be such a positive approach. It recommends that the work on innovation which has been undertaken by the OECD should act as a focal point for any further innovation activities undertaken by the Commission. 36 UK GOVERNMENT'S RESPONSE TO THE GREEN PAPER ON INNOVATION The UK welcomes the Commission's initiative to prepare and publish the Green paper. UK particularly welcomes the successful experience of individual regions 3nd countries to spread best practice throughout Europe. Moreover, UK welcomes the emphasis on the need to learn from each other through the exchange of best practice, rather than on all Member States necessarily doing the same thing. the need to build on the recognition of In particular at the Community level, UK welcomes and supports the Commission addressing deregulation, streamlining of procedures and competition, as well as the use of private contractors and decentralisation. There the effectiveness of existing actions and initiatives within the Community and for better coordination between EU activities. is room increase to Better direct research efforts towards innovation Mechanisms attention has been paid to incremental innovation which is particularly when considering innovation in SMEs. linking basic research and innovation are essential. However, little important The UK is strongly in favour of effective interprogramme cooperation. Task forces are found to be helpful in the recognition of useful areas for cooperation. However, the operation of the first round of Task forces has raised a number of concerns. Welcomes the proposal to include in the IV FP monitoring and evaluation procedures an assessment of the impact of innovation. Agrees with the need to take innovation factors into account in V FP, but is unclear about how the Commission intends to do that. There is no need for a new Community information programme. The scope for adding value Community level is relatively limited. through technology monitoring and foresight at a Reinforce human resources for innovation The recommendations are relevant. However. Member States will have a range of different priorities and approaches to improving their training systems. Public authorities, at either national or Community to identify skills and qualifications needed by businesses. There is no justification for setting up a new institution which would duplicate the work already undertaken. level are not best-placed There is no case for any increased funding of TMR,. nor justification for creating further initiatives. */[GO Improve the conditions for the financing of innovation the private sector. The suggested mechanisms should be developed within Experience shows that lack of access to finance is seldom a main barrier to innovate, though it is often used as an excuse. No objections however to proposals to allow the EIF to invest in equity. Taxation issues are primarily a matter for Member States at national level under the subsidiarity principle. Foster a legal and regulatory environment favourable to innovation Supportive to efforts in international forums to achieve harmonisation, where such measures are likely to lead to an improvement in the trading environment and/or greater efficiencies or reduced costs in the IPR system. The UK supports the promotion of patent information services as a method of technology watch. The UK fully supports Community level. the streamlining of administrative procedures at the No opposition, in principle, to a European Company Statute (ECS). However there is no justification for a separate form of ECS or EEIG for small or for innovative companies. Control of state aids should be a major priority for the Commission. In principle, the UK fully supports the Commission efforts to restrict the levels of state aid to large investment products. UK welcomes and fully supports the Commission's proposal to continue to have competition rules which facilitate technology transfer. Adapt the role and modalities of public action regarding innovation The UK Supports the objective of fostering cooperation among enterprises and strengthening groupings Encouraging an internationaily-minded approach among enterprises is an important issue. Framework Programmes should not be used to support regional actions which are best carried out through the use of Structural Funds. There should be proper evaluation of Community, national and regional investment in innovation. Regional and national initiatives should be evaluated by Member States, welcomes the Commission facilitating exchange of best practice between regions and countries. ^/fo/» 2. 1-C- Reaction of the Institutions: (Summary established by the Commission services) 1. Parliament 2. Economic and Social Committee 3. Committee of the Regions / A°& 1, Comments from the European Parliament The European Parliament has welcomed the Green Paper and its Action Routes, and is keen that measurable results should foilow. in a 35-point resolution, the Parliament calls among other things for: Dissemination and exploitation of RTD results • Better diffusion of technical know-how, including more support for the Innovation Programme and the programme for the Stimulation of the Training and Mobility of Workers. • A new Task Force to foster dissemination and exploitation of RTD. • Focus on research that driven, or that covers industries currently too small to be self-supporting research. is interdisciplinary, application-oriented and network- in • Greater use of information technology, the foundation to be laid by having Internet access for all schools. • Priorities to be set based on a better knowledge of the innovation process, founded on quantitative innovation indicators. • A permanent review of national 'best practice' encouraging innovation in the Member States. Monitoring of RTD • Improved cooperation as regards national and EU research policies. • The Joint Research Centre's Institute for Prospective Technological Studies to have a key role in developing network links between centres engaged in similar activities. Economic and financial considerations • Member States to review their fiscal regimes with a view to promoting innovation. financial markets, Suggestions include Japanese-style regulation of domestic longer payback periods for investment, and cheap loans to innovative companies. • More competition within the internal market, preventing large companies from dominating markets and subsidies. • Independent technical assessments to give banks a better understanding of technology-based firms. * A**> Administrative and legal constraints • Simplification of administrative procedures at both national and Community level. The C o m m i s s i o n 's SLIM initiative (Simpler Legislation for the internal Market) is w e l c o m e d, and the Parliament aiso calls for consideration of further administrative simplification of the research framework programmes. • Early adoption of the European Company Statute. • Patent protection periods that vary according to the product type, so as to balance innovation (helped by patents) w i th competitions (hindered by patents). Encouraging SMEs to innovate • Support for innovation at the regional levei. and programmes to encourage SMEs, to cooperate w i th universities, industrial research centres, and big enterprises • Attention to be paid to the roie of intermediary organisations such as banks, consultants, marketing cooperatives and technical colleges in helping small f i r m s. • Structural Funds to be oriented towards innovation. • Recognition t h at SMEs are not a homogeneous group, so that poiicv should respect their differences and be targeted on the basis of size and sector. • Help for SMEs to reduce the financial risks of innovation, including support f r om the European Investment Bank Social, educational and training aspects • Better c o m m u n i c a t i on between researchers and the public, especially public broadcasting. Funding should carry a research findings to the public. responsibility to t h r o u gh c o m m u n i c a te • A more consumer-oriented research policy. • Greater involvement of education and direct participation. the workforce in the innovation process, t h r o u gh • Attention to 'incremental' innovation, w h i ch can be just as important as p r o d u c ts that are fundamentally n e w. • Emphasis on the integration of innovation in education and vocational training, and a n ew f r a m e w o rk for future innovation-based professional qualifications. Task forces and innovation • Debate on t he goals of the Task Forces and the establishment of clear links between their w o rk and the Green Paper's Action Routes. $oir 2. Opinion of the Economic and Social Committee The Economic and Social Committee welcomes the Green Paper and feels that an integrated horizontal approach is essential for the success of any innovation policy. It considers that encouragement of innovations must become the principal objective of decision-makers, as this is the key to improving competitiveness, employment and development, and that joint action must be taken at European level, while respecting the principle of subsidiarity. The Committee also considers t h at innovations are also key factors in economic and social cohesion. The Committee stresses the importance of the entire research s y s t e m, backed up by technology foresight. The Committee feels that there should be greater reliance on a bottom-up approach, that more attention should be paid to the point of v i ew of potential users, and that interaction between researchers and users should be p r o m o t e d. Resources should be concentrated in joint fields and projects w h i ch are of essential importance. Cooperation is essential, since effective use of the resources is more important than their quantity. Efforts should be concentrated and priority given to the objectives. The Committee considers that conditions favouring innovation come about as a result of large enough to generate "critical m a s s ". f i r m s, research centres and other factors on a scale that integrating is The Committee feels t h at innovation policy must improve the opportunities for the most poorly equipped firms to join innovation networks. The Committee stresses t h at innovation policy within a f i rm or in any other structure requires the participation of all employees, in particular t h r o u gh further training and an atmosphere w h i ch is open and conducive to cooperation. Of the issues w h i ch the Commission reviews and w h i ch are favourable to innovation, the Committee feels t h a t: each n ew proposal for legislation should be assessed w i th regard to its effects, a sustainable demand must be created in sectors important for society, and market rigidity must be reduced. In the view of orientation of taxation, openness of markets and dissemination of innovation to SMEs. the C o m m i t t e e, among research, supported by the most technology important areas foresight, training, for action are: financing, The Committee considers industrial and other policies. it necessary to promote synergy between research, The Committee thinks that the Green Paper stresses cooperation between research centres and firms but fails to take account of factors such as cooperation between different departments w i t h in a f i r m, the fact that a f i r m 's potential increases w i th the quality of work for employees, the firm's staff policy and the distinction between internal and external mobility. As regards the routes of action in the Green Paper, the Committee has the following comments to make: *4oï Route of action ~i • Technology watch ana prospective technoiogicai studies in the Memoer States snouid be encouragea. foresight. Institutes involved in Route of action 2 - Orientation of researcn towaras innovation. The authorities have the right to intervene, particularly in sectors important for society, where t he market itself wouid not generate d e m a n d, by using task force-type activities. t o w a r ds Route of action 3 - Initial and further ongoing improvement. The Knowledge Resource Centres protect should be iaunched, the purpose of w n i ch is to act as an interface oetween tne supply ana aemana for information in the brancn of training in question. training. There must be a move Route of action 4 - Furthering the mobility of students and researchers. Mobility between different sectors and w i t h in individual countries must be p r o m o t e d. innovation. Any Route of action 5 campaigns to heighten public awareness must be based on a t h o r o u gh understanding of the factors involved. - Promoting recognition of the benefits of Route of action 6 - Improving the financing of innovation. Everything should be done to ensure that SMEs have the same financing conditions as those enjoyed by large firms. Route of action 7 - A fiscal regime conducive to innovation. When enacting or amending the tax system, any negative effects this mav have on innovation must be considered. Route of action 8 - Promotion of intellectual and industrial property. A European patent system should introduced. Route of action 9 - Simplification of administrative procedures. It is high time that concrete measures were t a k e n. Route of action 10 - A favourable legal and regulatory framework. A c c o u nt should be taken of innovation needs in EU c o m p e t i t i on policy. European standards concerning health, the environment and safety should be strict and binding. Route of action 11 - Development of "economic intelligence" action. The task of the authorities is to facilitate more education in this area. Route of action 12 - Encouragement of innovation in enterprises, especially SMEs, innovation. Economic and social and strengthening cohesion is a key objective of t he U n i o n, and subsidiarity is its guiding principle. regional dimension of the Route of action 13 - Updating public action for innovation. A c t i on is being directed t o w a r ds cooperation w i th the different segments of society. increasingly "/tot, 3. Opinion of the Committee of the Regions The Committee of the Regions welcomes the Green Paper and thinks that it is necessary to achieve genuine coordination of measures to disseminate know-how and exploit results, while respecting the principle of subsidiarity, it welcomes the importance attached to local and regional authorities. The Committee approves of the idea of a proactive policy on innovation and mobilising local operators, as this is essential for maintaining and strengthening competitiveness and creating jobs. The locai and regional authorities bear a major responsibility for this mobilisation. As regards support for innovation, iocai and regional authorities must be involved in setting up a legal, economic, financial and training environment that is conducive to innovation. The Committee insists on the priority which the authorities must give to financial support for research centres and innovation. Private financial circles must also be made more aware of the challenges of innovation. Finally, rules governing the intervention of the structural funds in financing venture capital must be clarified, so that this tool can become operational. There is a need to develop policies to encourage innovation with a view to improving manufacturing processes, creating new industrial and tertiary-sector products and setting up training schemes as part of a policy to support SMEs. The European Union has frequently supported efforts by local and regional authorities in this field. Finally, regional education and training programmes must help to provide training in innovation, supported in this by the Socrates, Leonardo and INFO 2000 programmes. The Committee considers that dissemination of the results of innovation contributes to economic and social cohesion, and that improved spatial restructuring will result in the networking of regional innovation systems. Local and regional authorities must promote the establishment of links between research centres, universities and industry for the purpose of developing networks for exchanging information and for experience at regional, transregionai and cross-border assisting innovation should not be confined to research and development, but should also extend to the marketing and industrialisation phases. There is a need to set up a regional technology watch policy. The Committee considers that the European network of Innovation Relay Centres must reach a critical size, in geographical terms, and that, as part of the simplification of the schemes to provide aid and for the dissemination of research results, these centres could act as "one-stop shops" for SMEs. levels. Mechanisms As regards the routes of action in the Green Paper, The Committee has the following comments to make: Route of action 1 - To develop technology monitoring and foresight. The information collected and processed by the Seville Institute for Prospective Technological Studies must be exploitable at regional and local levei. Route of action 2 - To better direct research efforts towards innovation. Local and regional authorities must set up SME monitoring and watchdog organisations with a view to increasing SMEs' capacity for research into new technologies. '/fol - To develop Route of action 3 local authorities can familiarise voung people w i th innovation, w i tn the tinanciai support of and the European Union, and develop educational establishments. researcn cooperation between training. Regional ana initial and further 'irms - To the mooilitv of students and researchers. The Route of action 4 Committee emphasises the importance of mooility and underlines the role,of local ana regional authorities, w ho are aoie tc forge cooperation iinks between the regions of Europe. further Route of action 5 - To promote Committee w o u ld successful experience in innovation. to see like recognition of the benefits of local and regional authorities kept innovation. The informed of Route of action 6 - To improve the financing of innovation. It is important to make all the financial partners aware of the need to overhaui to innovation introduce mechanisms projects. their aid machinery and for encouraging to become involved t h em in As regards routes of action 1, 8. 9 et 10, tne Committee approves the proposal to t a x. consult the establishment of a administrative and innovation. Regional seminars could be organised as part of measures to simpiify the business environment. local economic and social operators on legal environment conaucive to intelligence actions. The budgets of Route of action 11 - To develop economic regional schemes in this field must be increased, whether for back-up for advisory services, continuing training or assistance in the recruitment of managerial staff. It t he would be of great help authorities in order to identify the impact of these policies. to have regular assessments of measures taken by Route of action 12 - To encourage innovation in enterprises, especially, SMEs, and to strengthen the regional dimension of innovation. The local or regional ievei is the most appropriate one for contacting businesses on matters concerning innovation. Route of action 13 - To update public action for innovation. The Committee approves the suggestions on the new conception of the roie of the State in innovation. In conclusion, the Committee welcomes It underlines the repeated references to subsidiarity and the role of local and regional authorities. Its Members will be invited to give an account of their experience and submit proposais w h i ch might be of help in drawing up the summary report and the action plan. the European Commission's initiative. A*>% ANNEX 2. 2. Recent developments in innovation policy in the Member States Joî RECENT DEVELOPMENTS IN INNOVATION POLICY !N THE MEMBER STATES Introduction in EU In the next pages a number of seiectea Member States is n ow embracea by the concept of innovation ooiicv examples are clustered according to the three oroaa obiectives of the innovation Action Plan: innovation policv developments illustrate w h at is presentee, the 1 9 9 0s in order to in A B C Human resources, education ana training Frame conditions for entrepreneursnip ana innovation finance RTD ana industry Concentrating such masses of information into a few pages can of course not do justice to the approaches of individual governments. H o w e v e r, it is easily observed that EU governments are attentive to giving new advanced content and increased innovation and technological change. Germany's coherence Bundesbericht three-yearly government proposals in Sweden are illustrative of such e f f o r t s. the UK White Papers to their policies for Forschung 1996. and the A Human resources, education and training in the The Innovation Agencv force are strong elements Education, vocational training, further training, and concern for the skills level of the entire w o rk innovation policies. However, educational budgets in Member States are more decentralised than budget lines of most other innovation policy relevant actions. The observation that science subjects trail in popularity among school children and young people has become a concern to Policy most Member State governments. For example, the Science and Technology Council of Finland states in its development strategy Towards an innovative society, that ",. the quality of teaching will be imorovea and educational content will be renewed for ail levels of e d u c a t i o n ". in Austria Dromotes innovative projects in schools, nurtures innovative problem solutions deveiooea by students by funding project costs, giving prizes to winning teams and enabling them to participate for In Luxembourg a revision of the law of the secondary technical education Innovation. and "Prix à is promoted. l'Innovation", has been developed by the Luxembourgish Federation of Industries and in connection w i th the educational s y s t e m. In Denmark, the Ministry of Education is working on the w a ys that innovation and entrepreneurial culture can be encouraged from the primary and secondary educational levels. Also, the THOR (Technology by initiative, w h i ch is scneduled for 1 9 97 and will consist of Highly Oriented Research) a limited number of big research grants awarded to excellent scientists will also contribute to make the area of technology and science more attractive for young people to enter, in the United Kingdom the Prince of Wales Award has recently been extended w i th prizes also for the m o st commercially successful innovations. in international competitions. The agency also runs the Award relevant engineering diploma In addition, the the look in more specific areas !f we following initiatives: in the field of education we can mention the y A. 1 The training and mobility of researchers at doctoral level In Germany the international exchange of researchers is supported through several programmes, such as the Alexander von Humboldt Stiftung giving grants to more than 2000 researchers per year and the Deutscher 'Akademischer Austauschdienst the DFG doctoral supporting more than 50000 individuals Der year. programme (Graduiertenkollegs) has grown rapidly from ECU 1. 6 million in 1990 to ECU 41 million in 1995. The Three-year pian for research and innovation 1994-96. in Italy, states that " the instruments of University diploma and the research doctorate, which have been introduced far later than in other industrialised countries, must be made more responsive to the requirements of the country's production system". In addition, focused (YPER) started in 1995 In Greece the programme of targeted research fellowships industry with the aim to create a pool of highly educated persons dealing with research In Spain the national programme related problems. for the training of the 19 national the priority areas of towards personnel has been programmes making up the Third national R&D plan (1996-1999). In Ireland PhD support grants wiil increase in 1997 from ECU 1250 per individual at present to ECU 2500 which is in addition to the number of PhD students supported by other lines in In Denmark the government continues to give high priority to the the S&T budget. for visiting training of researchers, for example by continuing researchers from abroad and by providing grants for Danish research students to go abroad. The aim is to at least maintain the present level of enrolment at PhD courses. the programme A. 2 The linkages between university level education and the enterprise sector regions have each (SMEs) with a view In Belgium the Flemish and Walloon the FIRST programme enables researchers In this field most policies and measures aimed at supporting the mobility of university graduates into their first jobs and to promote the exchange of research staff. implemented programmes aiming at the financial support of graduates' recruitment by enterprises, especially SMEs. in Wallonia. to be recruited by universities and comoanies to developing partnerships, and in Flanders a similar scheme is linked to the sponsoring of In the UK, the Teaching Company Scheme, encourages the enterprise clusters. mobility of students and graduates towards industry. Also, career problems of contract research staff at universities have been eased through an agreement In the involving the research councils, the Royai Society and the British Academy. Netherlands additional funds wiil be used for the Kennisdragers in het Midden- en K/einbedrijf (KIM) project (similar to the UK teaching company scheme. ) In Sweden a report from the Ministry of Industry recommends that PhD programmes should be adapted to industry needs and that a new type of industrial associate professors should be introduced to allow the hiring of persons with experience from industry. The Ministry of Education and Science in Spain, has initiated a sectoral programme for the training of university academic staff and improvement of research personnel with the aim to promote the exchange of research personnel between industries and public research centres and the development of enterprises' R&D units. In Germany, under the particular aim to integrate R&D man power in R&D projects of SMEs in the new Lander, several programmes under BMBF and BMWi continue and are increased in volume. The creation, in 1995, of the Centre of Advanced European /f/f/f (CAESAR) funaamentai and application onenteo in Bonn is another effort to :ncrease flexibility, notably avoiding Studies five giving tenure to researchers, insteaa. scientists will be nirea to worK ror only researcn projects such as nano- years on the next century. Another technoiogy or bio-electronics which are oromising for novelty will be t h at CAESAR is to be financea as a private institute living f r om the interest o f - t he initial e n a o w m e nt of ECU 3 60 million t r om the federal government and ECU 34 mio f r om North Rhine Westphalia. PhD Fel/owsnms levei of 45 new graOuates per year, w n i ch are simultaneously empioyea by a company ana enroilea at a university institute as a ^ne Greek programme Diavios nas a pilot demonstration character PhD students. (co-financea by the European Social Funo) aiming to suoport first contacts b e t w e en students ana companies having RTD activities, for graduate training ana mobility include financial support for companies'" R&D personnel in order to work graauate R&D entrepreneurs to assist t h em in developing skills reauired to run their o wn business: and. assistance to SMEs to recruit technical graduates for 1 year period. In Denmark the industrial Ireland schemes departments: in overseas continue at companies training the to in A. 3 Vocational training and further training Memper States governments address the reauirements for vocational training ana further the objective or giving an increasea proportion of young people adequate skills ana maintain tne employaoility of young people. training primarily from (1995), including involving its concrete objectives the support of a Sector for Education and Training for industry training organisations ana others: In the United Kingdom, the government, through the White Paper Competitiveness. Forging Ahead endorses the new national targets for education and training put forward by the National Advisory Council (NACETT) and sets out Target the comparison of basic Challenge qualifications for employment w i th those of ieading competing countries and w o rk w i th the industry training organisations to bencnmark training in companies: to run a small firms training challenge offering a total of ECU 6 mio for the best training to publish a consultation ten or more small companies; and, projects document on individual responsibility for lifelong vocational learning. The Science and Technology Policy Council of Finland states in 1 9 93 innovative that, a g r o w i ng emphasis wiil be placed on basic skills in initial vocational society) education aiming at more comprenensive curricula: and an evaluation of the educational sector of adults training will take place due to its growing importance. In the Netherlands the W h i te Paper (1995) stated the need to 'Knowledge increase the efficiency and effectiveness of current funding to vocational training and enterprise oriented training; to finance annuailv w i th ECU 7 mio an innovation f u nd for technology and vocational training; and to stimulate fiscally apprenticeship and trainees in enterprises. In Austria technology relevant vocational training measures include the introauction and use of new technologies, methods, organisational f o r m s, and promotion of quality; the development of educational models combining a t - w o rk and external b e t w e en that technological and communicative and social competencies; and development of cross-companv qualification co-operation. qualifications; models connection in action" consider [Towards the an B Framework conditions for entrepreneurship and innovation finance Recent national White Papers and Action Plans show the need to rationalise framework conditions industrial competitiveness. to support SMEs and the The -^ following examples are listed under some main categories related to entrepreneurship and innovation finance. B. 1 Administrative simplifications rules; fees and Administrative simplifications, deregulation and liberalisation, establishment of one- stop shops for enterprises are all part of many governments' published plans, in Belgium each one of the regions is planning the establishment of one-stop shops, as part of their efforts to simplify administrative procedures. In Denmark, as part of a includes several elements in larger action plan, t he Ministry of Business and Industry like the removal or simplification of its project to reduce administrative burdens existing administrative the the simplification of establishment of a simplified reporting system so that companies can satisfy all authorities through reporting to a single point. Both France and Germany have established one stop shops BMBF likewise reviews its effect on In France a pilot project will be launched in four regions in research and innovation. order to co-ordinate technical legal interventions of various state departments. In the United Kingdom a prototype one-stop regulation-shop has been developed and will be demonstrated country. selected Business Links at for Science and Technology has announced a package of Furthermore, the Minister deregulation measures to help small firms in the areas of singie notification for tax and National in enforcement actions; streamlined development controls; a draft bill for consultation in forms and industrial regulations. for administrative legislation from tribunals; and a prototype for new businesses; the point of v i ew of for businesses The German taxes; and, the existing formalities. t h r o u g h o ut to provide IT system Insurance rights them new the B. 2 IPR and patents The excessive costs of patent protection in Europe compared w i th patent costs in the United States, and the increasing number of new problems related to IPR are the addressed difficulty of combining the inventor/innovator) w i th the benefits of wider exploitation of new products, processes (in particular in biotechnology), or services. in most Member States. The variety of measures demonstrates to the benefits of protection (allowing a pay-back in Ireland has been is under it The European Patent Convention consideration in Greece has been extended from 15 to 20 years to make it compatible w i th EU guidelines. In the United Kingdom studies are underway on the role of the UK Patent Office vis-à-vis the European Patent Convention and on the role of European directives applied to biotechnological inventions. likewise. Patent protection joined by Finland and to do Other initiatives to make better use of patent information the establishment of a platform called 'Patentverwertung'; Ministry of Industry-, and in Belgium via the Office Germany subsidies to SMEs for patent application will be available from 1 9 97 and 100 new information will be created at science and engineering faculties under a new programme Innovationsstimulierung (INSTI). Wirtschaft durch wissenschaftlich-technische are taken in Austria w i th in Spain w i th aid from the for Industrial Property Rights. teaching posts Information in patent der deutschen In r/ \^ property ngnts Droblems are unaer scrutiny intellectual in manv countries. New norms nave come into force in italv concerning procedures ana sanctions concerning s patents, trade marks, royalties etc. wniie. in Germanv. the SchlichterKommission •ecommendations are n ow in the form ot government proposals to be aoproved by is supported ir. this work as well as in diminishing non-legai the Bundesrat. BMBF und barriers to-research ana innovation by the so-called Cleanngstelle fur Innovation Recht. industry uses university the particular proclems ot research capabilities have been studied by tne Ministry of Industry. in Sweden IPR wnen B. 3 Norms and standards There is an uneven presence of adequate infrastructures to promote recent years' advances in the use of high qualitv norms and standards, hot least in the field of services and in the application of total oualitv standards or design as a competition parameter. A m o ng the recent developments are the following: for into the new national accreaitation boav the quality and f u n c t i on w i th a view industrial security and for environmental to help exports, and a National (ENAC) has been created as a private association, in Sweden In Spain regulations audits have come Certification Agency In the the system for testing ana control wiil be further aaaptea to European rules. for c o n f o r m i ty assessment United Kingdom into Service service, k n o wn as the United Kingdom Accreditation former National the orivatisation of being In Austria support has been made Measurement Accreditation Agency available fpr ISO 9 0 00 reviews promotes industrial design. In Greece and Portugal promotion of standardisation and certification are parts of the action iines for the promotion of industrial development and innovation. in the service sector, and the Innovation thus comoieting Services in August 1 9 9 5. iNAMAS). (UKAS), came the B. 4 Innovation Financing the more substantial financing and investments needed the Innovation exploitation of innovative products ana processes are supported, in particular w i th a view to the needs of SMEs. in ail Merrmer States with schemes for seed and venture capital, soft loans and guarantees, or incentives to private savings, 'business angels' ana moves to allow pension f u n ds and building societies to make f u n ds available for knowiedge-based enterprises. In manv Member States the government budgets also allow for some revenue losses t h r o u gh fiscal incentives in the iarge financial markets the of London, Frankfurt, Brussels ana Paris concrete steps being taken t o w a r ds formation of EASDAQ (National Association of Securities Dealers A u t o m a t ed Quotation) by the end of 1 9 9 6. for for business angels; and Grundungssparen for SMEs w i th guarantees in Austria t wo initiatives will be implemented: Privatcapital a standardised model for mobilizing equity for private investors, development of capital, and establishing a " m a r k e t" for long term investment credits for n ew businesses at the start up phase and for the foundation and take over of enterprises. A seed financing scheme funded by the ITF and managed by the Innovationagentur provides assistance to n ew businesses active furnishing consulting services and supplying venture technologies, by in novel scheme provides a Industrial Development the In Denmark capital. guarantee (at 50 per cent) for investment by private develoDment companies that finance SMEs in need of further capital ana management competence. T w e l ve such Companies x '/4U investment companies have Qeen aoproveo since guarantee of ECU 132 mio. SMEs and venture capital for business start-ubs, the latter established Finnisn ! 9 94 under an overall state in Finland eauitv basea development loans tor R&D in recently industrial Fund, seem to continue. through the the is expected 'NOUVEAU MARCHE" to mobilise key introductions foresees that venture capital funds snouio in Germanv the Deutsche Bôrse a n n o u n c e d. ;n 1997. This new marKet will target in France -the launch of oiayers on the French eauitv market and aims to achieve around 30 each year. The Frencn Plan for innovation mobilise ECU 155 mio within 3 years, in March 1 9 9 6. that it wiil open a Neuer Marki Bôrse telecommunication, biotechnology, multimeaia ana new services. Deutsche will also join w i th the 'Nouveau Marcne* in Pans ana the Brussels Bourse w i th a v i ew to develop a n e t w o rk of new markets for eauities (EURONM) in g r o w th companies. Government supported eouity and credit scnemes for SMEs wiil also be e x t e n d e d: the Kreditanstalt innovation loan programme is to be improved w i th at least ECU 5 25 mio per year (pending approval by the European Commission); a n d, the experimental Beteiiigungskapital started 1 9 8 9, and wiil be Technologieunternehmen (BTU) w i th the reiease of another ECU 4 71 mio. fur continued Technologieunternehmen by Beteiiigungskapital fur Wiederaufbau (BJTUJ kleine junge fur in initiative -type (XAT) programme wiil soon be In Greece a Technology Performance Financing launched w i th the aim to distribute the innovation financing amongst three parties, In i. e. the technology supplier, the technoiogy user and the financial is lines of the SME Spain one of the action devoted to the improvement of the access of SMEs to sources of financing and to the support of networks of interface organisations of financial character. ICO-Pymes is a new f o rm of credit line available to companies that develop projects financed by the Centre for additional finance up to 70 per cent ot the total investment of the project. The National foresees in its plan for 1 9 9 6 - 1 9 99 investments of ECU 21 mio. "Société Nationale de Crédit et de d'Investissement" schemes for technology and innovation related projects. In Luxembourg, the loan (ENISA) which JS a public venture-capital c o m p a ny for industrial and Technoiogicai Development (CDTI), w i th the possibility i n s t i t u t i o n. development (SNCI) has developed Innovation Company industrial for for like finance initiatives investment technoiogy for businesses are f o u nd to be a In the Netherlands, while administrative costs to gênerai problem concerning all kinds of companies, there are many facilitate credit and the simplification of applications will be simplified for pilot studies and small credits from the Technical Techno-starters will be given Deveiooment Fund (Techniscn OntwikKelingsKreoiet)'. iicenses): extra support by the Government: Tecnnoiogy brokers (seed capital or Technoiogy ratings (feasibility check). in Sweden three NUTEK programmes are running, w h i ch bring d o wn the costs of SMEs that engage in innovative projects; the SNITS development of a business plan: SMINT formation of R&D consortia in particular for international co-operation: and, seed financing gives small innovative projects during the stages before feasibility awards and soft loans for Exoansion commercial financing is possible. in small Scheme has been unlisted is being innovative In 1 9 9 3, the Swedish parliament decided to launched by the Swedish dissolve the Wage-Earners Funds. A b o ut ECU 7 70 mio were allocated to risk capitai operations (while a iarger ameunt w as used to create 18 research foundations). A Swedish version of the UK Business firms. A new risk capitai operation investing firms introduced, allowing feasibility awards tax savings w h en that promotes that supports Industry Fund. technology for small, transfer through the for for '/A^ In the United K i n g d o m, the government's proposals in the 1 9 95 and 1 9 96 W h i te Papers on competitiveness include the encouragement of greater competition in the provision of capital, in particular to SMEs; help of growing businesses to get access to the most appropriate finance through a new Business Link service in England, Enterprise Networks to encourage prompt payment; and allow corporate bonds into personal equity plans and loosen restrictions to make it easier for companies to issue bonds. In the UK, that concentrates more than 4 5% of the venture capitai funds in Europe, a number of initiatives and schemes have developed like the networks of Business Angels or the development of the 'Alternative investment Market ( A I M )' by the London Stock Exchange in July 1 9 9 5. in Scotland, and Business Connect in Wales; continue B. 5 Fiscal incentives Fiscal incentives for firms to perform R&D are n ow in widespread use in Member States (Austria, Belgium, Greece, Ireland. The Netherlands, Spain and Sweden) but Law w as have been abandoned in Finland. For example, in Greece, the Investment amended in 1 9 9 4. It provides a wide range of incentives (investment grants, interest subsidies, tax allowances and increased depreciation rates) aiming simultaneously at promoting regional development. to revise the fiscal regime in order to encourage the reinforcement of the enterprises' o wn resources. Self-financing within the SMEs will be made more attractive. Higher In Luxembourg, fiscal fiscal deductions will also be linked to the deposit of patents. incentives for material investments in enterprises have been developed in a w ay to indirectly promote innovation in firms. In Belgium the federal government has plans to late f r om integrated set of the STIAC, was an including dividend relief encourage multinational on R&D efforts were taken into use in the In Finland general tax deductions In Ireland, among t he 1980s but do not belong any more to the fiscal instruments. to tax measures recommendations stimulate business R&D, t ax for owner managers, R&D credits, reduction of costs for R&D personnel and R&D service companies, and t ax regional changes headquarters and strategic functions in Ireland. In the Netherlands ECU 23 mio per year will be given to improve depreciation flexibility of innovative technologies d r a wn to Promote Research and towards the Netherlands. Since 1 9 9 4, funds under the Act Development through tax incentives, has been increased; WBSO is offered reduction in personnel costs through a reduction of taxes and premiums either as paid by the employer, on salaries for R&D personnel; or, as an extra income tax reduction added to the tax forfeit for the self-employed w ho themselves develop R&D activities t he beginning of 1 9 9 6. Forty per cent may be deducted of the R&D costs of enterprises that exceed the average of the costs incurred during the preceding t wo years. incentives have come In Spain fiscal companies into force in SMEs. establish (WBSO), their to in C RTD and Industry in several Many countries have seen some changes of ministerial portfolios, instances f o l l o w i ng a change of government. The c o m m on trend has been to achieve a more p o w e r f ul co-ordination of policies research and human resources. Objectives coincide and all countries prepare or implement actions w i th large similarities, most visible w i th regard to information society initiatives. Priorities differ among countries according to the current situation of the science, technology industry, for /I4& and innovation svstem in eacn country. The size ot individual economies, industrial structure, specific economic problems are liKewise factors that determine priorities at the national and regional level. Below are summarised characteristic examples ot latest developments. C. 1 Technology foresight Committee Information foresight networks exercises using Delphi- In 1995 the first results of large scale tecnnoiogy foresight technique were puPlisheo in the United Kingdom, France and Germany. Already the follow-up is seen in the f o rm of impact on the government R&D expenditure plans. In ana Policy Advice programme will be extended Austria the Technology are at work in the Netherlands where aiso to 1998. Technology the major the Consultative Ireland has also developed a strategy for its research organisations in its studies. technology Policy Council (chaired by the Prime Minister) monitors emerging technoiogicai needs of t he economy. In Denmark a n ew Technoiogy Assessment Council has been created to give advice to parliament and government w i th special emphasis on initialising public and debates on various emerging technologies. Assessment !n Luxembourg a technology w a t ch initiative is developing by the Ministry of Economy and CRP-Henn Tudor. In Spain the National Evaluation aiso carries out studies and prospective analyses. In Finland. The Science and Technology foresight exercises. for Explorative involves Agency Studies (OCV) C. 2 Multiannual programming Comprehensive multiannual programming at government to statutory yearly budgets and finance acts, is a common exercise in several Member States. In most of the f o l l o w i ng examples those plans outline both the overall aims and budget lines and institutions. in addition level, for technology programmes. for Economic Affairs innovation in the United In Finland a Examples of annual expenditure plans w i th almost equal details relevant areas are those for Trade and industry by the Cabinet Office Kingdom and of the Ministry (BMWi) Germany. major exercise is performed every five vears in order to establish new generations of national represents a three-vearly review. Programme implementing a third Three-year Portugal muitiannuai government's programme. was introduced in June 1 9 9 5. three-yearly proposal industry !n Germany the Bundesbericht 1996 Greece is in the middle of the 2nd Operational is (1994-99), In In accordance w i th established practice in Sweden a for is due in September 1 9 9 6, following a proposal institutes In Spain the Third national plan and Technology for (EPET II) research and is part of for R&D the n ew (1996-1999) while (1994-96). the best R&D financing of for Research for research Forschung innovation in 1 9 9 5. Italy plan C. 3 White Papers the political White Papers and national strategies or development plans harness authority for further co-ordination over time and over otherwise separate budget lines. Examples relevant for innovation vary in detail and scope. A national strategy In Finland a strategy for for science and research is being established in Denmark. innovation was published in 1 9 93 and a White Paper entitled Industrial Policy Vision In was published in 1 9 96 and is expected to be followed by a technology strategy. ^? France me Ministry ot industry has announcec a oian for innovation. me Netherlands nave o o t h. in 1 9 9 5. proaucea White Papers on the theme of in knowledge society. document. Shaping our century, prepared for the Minisier Kingdom, f r om where exercise an annual institution. Ireland and the Ireland -auncned a new 15-year strategy ;n for Enterprise and Employment, 21st Finally, the United tne the terminology oi White Papers originates. n-as made fuiure: A strategy In 1 9 96 Forfas ror enterprise ireiana the in C. 4 New national organisational forms Reallocation of government portfolios ana departmental responsibilities are another inaicator of poiicv development. The trend in several countries has been to maintain or raise the level at w n i ch R&D exoenditure industry relevant budgets. is co-ordinateo w i th other for Economic Affairs. is the forum for co-operation agreements In Austria the t wo main ministries are. n o w, the Ministry the Arts and the Ministry Science Policy Conference competencies of federal, regional and community authorities. and information technology legislation on the advisory system nas oeen passed in 1995 and 1 9 9 6. the Science and Technology Policy Council emerging technoiogicai needs of the economy. and inter-ministerial the involving In Denmark research is, since 1994. combined in one Ministry and a new In Finland (chaired by the Prime Minister) monitors for Science, Transports In Belgium the for Education, Science, Research and Technoiogy for Researcn, Technology and In Germany the fédérai government orovides most of its research finance through the (BMBF). By reorganised Ministry creating, in 1 9 9 5. the Council under the Fédérai Chancellor a piatform has Peen made for directing the dialogue between science, industry, unions and politics towards central questions for the future. In has been created by merging the Ministries Greece a new Ministry in itaiy the three-yeariv clans will be updated of Industry, Trade and T o u r i s m. Economic f r om annually under guidelines Planning; that w o u ld entrust an external observatory w i th the evaluation of universities and public research bodies; the AG/TEC. Minister of the a parliamentary c o m m i t t ee inter-ministerial is examining a bill the agency industry. has been set up under of Development initiative of innovation, Committee Innovation the for for to (PEDIP II, multiannual innovation policy its aims concerning several information society, vocational issues In Portugal, the new government has stated the best R&D central for Institute organisations, the SupDort of Small and Medium for example); important changes are made in t he Ministry of Economy and the Ministry of Science f o r w a rd an and Technology. f r om approach already introduced in the Third national plan June 1 9 9 5. (OST) has been transferred to the Department of Trade ana industry In the United Kingdom the Office of Science and Technology the new government's proposals carry financing training, and (1996-1999) Firms and investment in 1 9 9 5. In Spain (IAPMEI), for R&D the for C. 5 Directing R&D towards innovation Following are a number of characteristic examDles of Member States' programmes and instruments to better direct research efforts towards innovation and international competitiveness. * * *% technology and s o f t w a re development, and in Austria the t wo main instruments are tne Researcn Promotion Puna (FFF). w h i c h. in 1 9 9 4, shifted its focus to areas sucn as micro-electronics, environment protection, and information Technology Funds (ITF). in Belgium the university-industry interface structures and the science parks have multiplied during the last ten years in addition to sectoral joint in research centres, jointly financed bv the fecerai government and the regions, Denmark to strengthen research in universities ano approved technoiogicai institutes as well as new strategic programmes: THOR (Tecnno/ogy ov Highly Oriented Research) w h i ch is scheduled awarded to excellent scientists for basic research orpjects w i th paramount plan relevance; and a new action entrepreneurs establishment and survival of n ew enterprises, especially SMEs. for 1997 will consist of a iimited number of big research grants industrial the research package has ailocated money the g o v e r n m e n ts focuses on Innovaiion fowards latest the (VTT) w h i ch of for innovation w i th a major shift of its interventions technology strategy will act as a guideline for In Finland the above mentioned Finnisn iTEKES) which has a centrai funding role for the Technology Development Centre implementation both university research and industrial research, as well as for other bpdies. for example the Technical Researcn Centre of Finland is the single largest research institute; both TEKES and VTT have been through a process Industry of evaluation in order to improve effectiveness. t o w a r ds has announced a plan issues (ECU 155 mio will be devoted to the development of Key Technologies-re\ate6 schemes. The SME, Trade and a call for proposals) as well as of Handicraft Ministry (ANVAC) devoted to the development of innovation w i t h in the service and trade sectors. The de Ministry Ressources Technologiques n ow going on in six regions. As f r om 1 9 9 7. a bonus aid of 5 to 1 0% will be given to those big companies which will include partnerships w i th SMEs in their projects. Medical research action lines will be modified to increase mobility between research and clinical activities, and to focus research on medicai research and bio-sciences. has announced the creation of a new public agency labelisation of Centres In France the Ministry its priorities of Research has among the ANVAR the In Germany the introduction of model projects ILeitprojekte) will help to an early understanding bv researchers and users of h ow to exploit the existing R&D potential: and the Ministry for Economic Affairs (BMWi) has. since unification, stepped up its commitments to programmes for R&D personnel, innovation support, and research suppprt in the new Lander, for example in the form of Innovationkollegs involving different scientific departments and innovative enterprises, each for a period of five In Greece the management of existing schemes and the launch of n ew ones years. Social Funds; a continue for number of programmes require the active participation of enterprises: Programme the development the for improving (SYN) and Programme industrial of targeted implementation of the Community (EKVAN), Co-financing programme (PAVE), Research consortia to be based on the competitiveness of industrial fellowships research research (YPER). In Ireland an additional ECU 5 mio allocation for science, technology and innovation programmes w as announced in March 1 9 96 wnilst the overall government response to the Science. Technology and Innovation Advisory Council report is yet to be finalised: the Programmes (PATs) represent a medium to long-term strategy for the development or a technological infrastructure to serve Irish industry. In Italy the Three-year plan ror research and innovation Technologies in Advanced (STIAC) 1994-96 /t*$ considers, that the Inter-Universitv Consortia wnich have Deen successful ana offer prospects tor a greater efficiency in me use OT resources, snouid be categorised as institutions; and gives directions ror CNR 'greater integration of its activities w i th rhose ot other puoiic and private entities!. ENEA (since the 1980s diversifying into new Technologies, energy and research bodies of other Technological Ministries; - under Researcn (MURST) new contracts have been signed in the framework of the National Researcn Programmes on: technologies for tne construction and the protection of buildings, environment, and cardiologyt the environment) and for University and Scientific the Minisiry and in In the Netherlands the policy initiatives outlined in the White Paper "Knowledge action" are being developed, for example: subsidies tor Project-basea co-operation will be given to promote co-operation between ousinesses themselves and b e t w e en private sector and research institutes m a range of technology fields. The Cabinet In Portugal the wiil be establishing Leading Technological for above mentioned administrative restructuring aims at more efficiency, including In the t wo main, EU suoported. incentive programmes PEDIP II and PRAXIS XXI. science poiicy the focus will be on the support to the excellence of research t e a m s, instead of physical as weli as on training and employment ot researchers, to infrastructure. the encourage promotion (PACT!) concentrates on and improves existing instruments and creates new mecnanisms. include a stronger c o m m i t m e nt for the National programme system science-iechnology-industry intangicle and innovation oolicv wilj the Industrial (Topinstituten). investments. In Spain linking-up institutes the of for at eight universities started their activities centres the National Boara in In Sweden 28 competence Technoiogicai 1995 w i th support f r om in Development (NUTEK) aiming at creating concentrated development which industrial partners participate actively: RTD consortia is a temporary 5-year programme under w h i ch 22 ccnsortia have been launcned. In the United Kingdom the major influence of the Foresight programme is seen on for example the S&T priorities ot the research councils and government departments: since March 1 9 9 5. 13 new LINK programmes have been targeted on kev areas of promise and research relevant to business will be taken into account w n en f u n d i ng universities research environments for regional Industrial and C. 6 SMEs. innovation support infrastructures and regional dimension the co-operation among major levei has been accompanied by Re-organisation at government institutions as w e l l. Intermediary institutions for the suppprt of technology and private non-profit entities outside making this n e t w o rk of national initiatives is illustrated in some ot the examples. restructuring of transfer institutions are often organised as the oubiic sectcr. The regional dimension of intermediaries more efficient and better connected w i th researcn for Institute the Austrian the Promotion intends to start a firm-to-firm visit-scheme; the Austrian has In Austria (WIFI), for develpped a comprehensive management consultancy service and the Ministry Industrial Economic Affairs transfer programme w i th Promotion Fund has launched an innovative technology 'Contact Projects' to marketable products; the European Recovery Programme Fund (ERP) has shifted its emphasis development, in addition to other infrastructure and internationalisation. The Innovation Agency, the possibility of grants or subsidised the Economy innovation, investment promotion including regional loans from to of *Alo or Austrian activities mentioned above, is the general secretariat tor the Association in Belgium the Fiemisn government, for examoie, fosters the Technology Centres, establishing of collaboration clusters among enteronses concerned mainly w i th R&D and the supply OT technological services. entrepreneurs plan wwards for 1 9 96 and 1997 aims at: In DenmarK the Action strengthening the entrepreneurial culture, reducing administrative Purdens. improving access to financing of innovation, strengtnening and rationalisation of the regional advice and support services, and making special efforts to suppprt high t e ch ana inncvative entrepreneurs. connection w i th t he best laboratories of universities and research institutes as one of the iinks between R&D and the regional policy. In Finland Centres of Expertise are established in in the innovation plan will imply a In France the n ew strategy foreseen tor ANVAR better follow up of fast g r o w i ng companies, introduce project evaluation criteria concerning the impact of the projects on g r e w th and employment, reinforce the role of regional delegations, and offer new financing instruments; as already mentioned, for SMEs. Further plans to reorganise the support to new companies creation and survival are expected in the a u t u m n. The regional dimension in national STI policies is strengthened bv the ORATE (Observation Régionale de l'Appui Technologique aux initiative, taken Py the Ministry of Education and Researcn. This initiative Entreprises! links regional authorities to assure a coherent set of measures. ORATE focuses aiso on human resource requirements and on the medium term economic impact w i t h in the region of technology d i f f u s i o n. layer ot SMEs w i th innovative g r o w th responsibilities pf the the to In Germany three current programmes of the BMWi will be merged into one federal t he programme w i th a considerable increase of funding; programmes under BMBFTor new Lander provide enterprises support laoour costs w h en new scientists or engineers are recruited, give suppprt to small enterprises for the use of-external R&D contracts, support key technoiogy In technoiogicai development the decentralised establishment of sectoral Greece is in addition to companies, science and technology parks and liaison offices the STRIDE-Hellas (PEPER) and Projects Technoiogy Brokerage are launched. In Ireland, in addition to existing programmes, 37 county enterprise boards have been established to encourage new firm f o r m a t i on and to assist micro enterprises already in existence tc develop; there is a proposal to assist companies to f o rm company netwprks. fields ano support establishing new o r o g r a m m e. Programmes for Demonstration f i r m s. In Italy the rationalisation of the technoiogicai infrastructure for SMEs is one of. the aims in the Three-year plan 1994-96. A number of local for research ana innovation initiatives (incubators, research laboratories, information society experiments etc. ) have been taken involving local industry, Chambers of Commerce, universities and regional authorities. In the Netherlands a range of innovation facilities for SMEs and which operate as tax and credit incentives has been mentioned above. A m o ng n ew improve co-operation b e t w e en projects can be mentioned Enterprise Houses intermediary t e c h n o l o gy transfer organisations. Also nationai instruments for generic technologies have facilities for SMEs. to In Portugal the above mentioned IAPMEI wiil be more closelv involved in providing advice and service to SMEs: the science park Taguspark has iaunched so-called anchor projects w i th t he involvement of large R&D institutes, companies and banks; the potential of science and technoiogy parks in the Lisbon area and incubation centres is being studied. One of the three instruments of the technological policy in Spain under the Ministry of Industry is the Institute of the Small and Medium Sized Industrial Enterprises (IMIP). resources larger companies as for regional development in Sweden, mentioned above, The 22 new RTD consortia institutes, are helping SMEs in supported regions to co-operate and to regard for competence. Other new universities and instruments are, for example a pilot programme for technology to SMEs from industrial research institutes which aims at creating longer lasting networks, ALMI Business Partners which is a government-owned consultancy with 40 offices, in technoiogicai services between SMEs and public and support In the United Kingdom the Cabinet Office foresees a further technology providers. increase in the number of 'Teaching Company Scheme' programmes, as well as the growth of a similar 'College-Business Partnership' launched early 1996 and a rapid uptake by companies of the new services from 'Design Counsellors' which are an addition to the Business Link scheme. the trade transfer to ^/llZy Recent White Papers and launch of strategic plans of Member States AUSTRIA "Technoiogiepolitisches Konzeot der Bundesregierung Seibersdorf & Joanneum Research, Mav 1996. (draft)", WIFO, "Informationsoffensive. Bundeskanzler Vranitzky stellte Weichen fur den Informations-Highway", in Innovativ. 3/1994 Oktober. in Alpbach die - "BMoWV Grussworte webmaster@iis. joanneum. ac. at. (04/07/95). Informationsgesellschaft Bundesminister von - Telekom Mag. Viktor Initiative Osterreich, from Klima", DENMARK "Research in perspective, White paper on a national research strategy", Ministry of Research and Information Technology 1995. "From vision to action, Information Technology, 1995. info-societv 2000", Ministry of Research and "Erhvervsredegorelse 1995", Ministry of Industry and Business. 1995. "Open dialogue on Danish research for the future, Research policy 1996 report to the Danish Parliament", Ministry of Research and Information Technology, June 1996 FINLAND "Towards an innovative society, A development strategy for Finland", Science and Technology Policy Council of Finland. 1993. "Finland's way to the information society, The national strategy", Ministry of Finance, 1995. "National Policy Council, November 1995. innovation system and employment". Science and Technology "Industrial policy vision", Ministry of Industry, May 1996. FRANCE "Les 100 technologies clés pour l'industrie française à l'horizon 2000", Direction générale des stratégies industrielles, 1995. L'innovation dans les PME, Rapport Chabbal, 1995 GREECE 2nd Operational Programme for Research and Technology (EPET II). Operational programme for the Industry (1994-1999) GERMANY "Bundesbericht Forschung 1996", BMBF, 1996. "Forschungsleistungsplan 1994 des Bundesministeriums BMWi, 1994. fur Wirtschaft", IRELAND "Making knowledge work for us, A strategic view of science, technology and innovation in Ireland", STIAC, 1995. "Shaping our future: A strategy for enterprise in Ireland in the 21st century", Forfas, May 1996. ITALY "Ricerca e innovazione per io sviluppo. Piano triennela della ricerca 1994- 1996", MURST, 1994 THE NETHERLANDS "Kennis in beweging, Over kennis en kunde in de Nederlandse économie", EZ, OC&Wand LNV, 1995. "SWAP 2000", EZ, and OC&W, 1996 PORTUGAL "Program do XII Governo Constitutional", 1995. SPAIN "III Plan Nacional de l + D 1996-1999". CICYT. "Libro Blanco de la industria: Una poiftica industria para Espana". "Estrategia Tecnologfa Energética de Largo Alcance (ESTELA)", Ministry of Industry and Energy, 1995. SWEDEN "Nâringsdepartementet", Regeringens proposition 1994/95:100 Bilaga 13, 1994. "Âtgarder for att bredda och utveckla anvandingen av informationsteknik", Regeringens proposition 1995/96:125. 1996. "Samverkan mellan hôgskolan och naringslivet". Ministry of Industry, 1996. "Forskning och pengar", Ministry of Education. 1996. THE UNITED KINGDOM "Competitiveness: Forging ahead. White paper", DTI, 1995. "Trade and Industry 1996, The Government's Expenditure Plans 1996-97 to 1998-99", Presented to Parliament by the President of the Board of Trade and Industry. , 1996. "Developing a Winning Partnership", A report of a joint City/Industry working group established by the Innovation unit of DTI. "Foresight, First progress report", OST. 1996. "Competitiveness, Creating the enterprise centre of Europe", HMSO, June 1996. "Forward look of government-funded science, engineering and technology 1996", HMSO. y ANNEX 2. 3. Statistical tables ENCL0S-3. DOC 18. 10. 96 10. 30 *//•£ tf Table 1 Europe in World-wide research: R&D indicators for the Triad Total R&D expenditures (MECUs) 1994 121 882 142 047 104 069 EU15 USA JAPAN Total R&D expenditures as % of GDP 1995 Total R&D expenditures per inhabitant (ECUs) 1994 % of total R&D expenditures financed by governments 1993 % of total R&D expenditures financed by industry 1993 Number of researchers 1993 Number of researchers per thousand employed 1993 Number of researchers in industry 1993 Number of researchers per thousand employed in industry 1993 1. 91 329 39. 6 53. 5 2. 45 545 39. 2 58. 7 2. 95 833 19. 7 73. 4 774 071 962 700 526 501 4. 7 7. 4 8. 0 376 000 765 000 367 000 2 6 6 Source: European Commission. DG XII from OECD data Iable_2 Recent trends for R&D undertaken by firms (US prices 1987, billions ECUs, average annual growth rates) Source: MERIT, data: OECD, EUROSTAT. IMF. UNIDO and UNESCO Percentages 11981-1991 Q1991-1993 fat, Table 3 Positions of the Triad by technoiogicai area, measured in patents, 1993 EUROPE Electronics / electricity Instruments / optics Chemicals / pharmaceutical prod. Industrial processes Mechanical engineering / transports Consumer goods All area Share (%) of Eurooean patents in the Worla USA Japan EU Share i%) of US patents in the World USA Japan 5U 34. 2 37. 8 40. 3 50. 1 58. 5 64. 0 46. 4 j i | j 30. 0 32. 4 33. 7 25. 6 19. 2 16. 9 27. 3 31. 8 23. 4 20. 0 16. 6 15. 5 8. 0 20. 9 11. 5 14. 9 28. 2 22. 3 23. 6 19. 1 16. 6 46. 7 50. 8 51. 0 50. 5 45. 4 50. 1 48. 7 35. 4 28. 0 19. 7 19. 3 22. 5 12. 5 25. 0 Source: USPTO. Data: Treatments STO and CHI-Research. 1995. UNESCO reoon on Science in the World. Table 4: R&D EXPENDITURES (AS A % OF GDP) AND THEIR EVOLUTION FOR SELECTED COUNTRIES R&O expenses as a % of GNP Source: World-wide report on competitivitv. World economic forum. IMD Table 5 Gross Domestic R&D Expenditures as % of GNP by Member State 3 -r 2. 5 + 2 + 1. 5 + 1 + 0,5 + F UK DK NL B I IRL E P GR Reference years: 1 9 91 (B), 1 9 92 (D, F, IRL, P), 1 9 93 (UK, DK, NL, I, E, GR) Source: Eurostat, research and development, annual statistics 1995. labiée DISTRIBUTION OF INNOVATION EXPENSES IN 1992 IN SOME MEMBER STATES * Testing Market analysis Others Product design R&D Patents • In 1992. in the 12 Member States of that time except Luxembourg, plus Norway, Switzerland and Iceland Source: EVCA, Ernst & Young 'jlf Table 7 DISTRIBUTION OF INNOVATION EXPENSES IN 1 9 92 IN SOME MEMBER STATES BY FIRM SIZE4 100% 9 a 3 c 0 OL • Market analysis •Testing • Others a Product design a Patents • R&D * In 1992 in the 12 Member States of that time, except Greece, Portugal, United Kingdom and France. For Germany, only data relative to large firms are known. Source: CIS, Preliminary results WAYS OF KEEPING UP COMPETITIVITY IN TERMS OF PRODUCT INNOVATION IN SOME MEMBER STATES * 60 T 50 + Adv. on the compet In the design & planning Complexity of the proa. Secret Patent* Registration ofconcept I Large Q Medium • Small * In 1992 in the 12 Member States of that time, except Spain, France, Italy, Greece, Portugal and United Kingdom Source: CIS Preliminary results /. AV^ Table 9 IMPORTANCE OF FACTORS HAMPERING INNOVATION 60 , Economic factors Firms linked factors I. P. R. Too simple to Customers' Timetable copy reaction Lack of tech. opportunities QNon-inno Qlnno* * Companies having undertaken product or process innovation during the period 1990- 1992 Source: EUROSTAT (CIS). Preliminary results Table 10 IMPORTANCE OF THE OBJECTIVES OF INNOVATION 90 T lllllllll Increase market share Lower prod, cost quality improve Product Widen prod. prod. range markets flexibility conditions product Improve Replace Decrease working obsolete damages Create new to the environ. Percentage of firms considering these factors as very important or essential (reference years: 1990-1992) Source: CIS (Preliminary results) Objectives * A*> Table 11 Significant correlation coefficients between employment, product innovation, process innovation average growth rates in various European countries (1970 - 1992) Product innovation Process Innovation Year: 70-90 80-90 39-92 91-92 70-90 80-90 § 5 52 91-92 Belgium Denmark France Germany Italy Netherlands Norway Spain United Kingdom + + + + + + + + + + + + +~ - + + + + + + + 5 " 0 6 + + 0 0 + 5 - - Ô 5 + + + + + + + + + + + + + + - + 5 + + + + + 5 - - 5 + + 5 5 + 5 - 5 5 5 + Source: EIMS, Innovation and employment in Europe. CIS data, Licht, 1995 Iable_L2 Changes in employment in micro-firms and small, medium size and large firms, Europe-15, 1988-1995, 1 9 8 8 = 1 00 110 T 105 -r 100 SmaN 1988 1989 1990 1991 1992 1993 1994 1995 Source: Research and studies on small firms, ElM, Vol. A, n° 11/12, November 1994 sfZ* Table 13 C o m p a ny registration per c o u n t ry 1 9 8 8 - 1 9 9 3, 1 9 8 8= 1 00 Germany 1 Germany 2 Belgium Denmark Spain France Greece Ireland Italy Luxembourg Netherlands Portugal Un. Kingdom Austria Finland Norway Sweden 1988 100 n. d. 100 100 n. d. 100 100 100 100 100 100 100 100 100 100 100 100 1989 103 n. d. 100 117 100 101 84 99 95 130 109 112 109 115 108 n. d 99 1990 114- 100 95 117 99 99 70 98 94 137 112 125 109 83 95 76 117 1991 120 110 93 143 107 91 62 n. d 114 140 121 119 91 79 88 n. d 101 1992 122 102 97 131 118 90 69 n. d 103 149 135 146 75 91 92 52 84 1993 125 101 n. d. n. d. n. d. 90 76 n. d 97 159 n. d. 141 67 102 96 n. d 94 change in % + 25 + 1 -3 + 31 + 18 -10 -24 -2 -3 + 59 + 35 + 41 -33 + 2 -4 -48 -6 Median Value 100 103 99 107 99. 5 99 -1 Germany 1 refers to the former West Germany, Germany 2 to re united Germany Sources: Germany Austria Belgium Denmark Spain Fin/and France Greece Ire/and Italy Luxembourg Norway Netherlands Portugal United Kingdom Sweden IfM, Bonn IFG Databank, Vienna National Statistical Office Danish Statistical Office Office of industry registration and IKEI estimates Finnish Statistics, Company register INSEE, SIRENE file, 1994, ANCE National Statistical Office of Greece Inventory of Industrial Production 1987-1990 Movimprese Data Bank Comapny register Central Statistical Office Van der Hoeven, WHM and WHJ Verhoeven, Creatie en teloorgang van arbeidsplaatsen. Studies and research on smalt firms, ElM, 1994 INE-Monetary and Financial Statistics Estimate of company birth. National Westminster Bank Swedisk statistics Ml Table 14 Impact of innovation on employment. The case of Italy Employment Growth Rates Innovative companies Non-innovative companies Size 20-199 200-499 500 + Employment Growth 1992 1. 07 1. 01 0. 98 Productivity Growth Export share 1992 1. 12 1. 14 1. 10 73. 0 81. 3 98. 3 Employment Growth 1992 1. 03 | j 0. 98 0. 94 Productivity Growth Export share 1992 1. 03 0. 95 0. 86 59. 0 64. 5 68. 1 Source: ElMS, Impact of Innovation on Employment in Italy. Analysis from CIS data, 1995. Intangible factors and competitiveness Table 15 Innovation Patents Quality Promotion Processes Sales effort -2 0 2 4 6 8 Emerging market share Source: PIMS 1994. QLow D Average flHigh > 3 3 C u 9 < O 3 CO 3 Ot 5- o -I <* 10 PIMS (Profile Impact of Market Strategy) pioneered by General Electrics and further developed at Harvard. PIMS associates Ltd (USA) and selected academic partners including the Irish Management Institute are responsible for PIMS data gathering research and consulting. Analysis carried out for units within large companies in Northern America (mainly United States) and in Europe (50% in the United Kingdom) /III Table 16 VENTURE CAPITAL DISTRIBUTION OF STAGES IN PERCENTAGE OF INVESTMENTS IN EUROPE IN 1995* Expansion 52. 8% Replacement 9. 8% Buy-out 21. 5% * 15 European Member States except Luxembourg, plus Norway, Switzerland and Iceland Source: EVCA, Ernst & Young Table 17 DISTRIBUTION ON INVESTMENTS IN 1995 BY INVESTED AMOUNT •Buy-Out • Replacement Capital Q Expansion I Start-up & Seed Source: EVCA - Ernst & Young /l$U IittaJA investment» in Venture capital in Europe and the United States ( 1 9 9 5) Total fnvestmema U8A(1) TScu 5 748. 000 Jo** 1. 100 UE{2) KECU è. 546,000 + 2 4. 9SS 445 20 S8 10 1. 475. 000 3. 307. 000 •32. 000 Invaatmanta par stags taad & start-up development Leveraged buy-out Investments per aaeter Informât*-tachno. life sdenoee non-technology avg alia of aaad- SSÉSL (1) Soiérc*:V9ntuf90na (American Company) (2IËVCA 2. 041. 000 1. 398. 000 1. 709. 000 932 46 24 30 320. 000 2. 300. 000 2. 900. 000 S. 7 42 62 939 902. 000 422. 000 4. 222. 000 260 16 8 70 • 60% increase In the number of invaatmanta (1984-1996 period) • • 1100 Invaatmanta in the United Statas in 1996. IlWf-lft laxaaindaotial contributions In Europfl aa a pafoantage of flPP (1893) Country Germany Austria Belgium Denmark Spain Finland Pranee Ireland Italy Luxembourg Norway Natharianda Portugal Unfted Kingdom Sweden Taxes and social contributions % of GDP 41. 4 43. 7 4 4T 49. 0 30s 45. 9 43,2 36. 8'• 42. 3 45T 47. 6 47. 0 33. 0" 32. 2 50. 6 • mt •• 1992 Scurca: Eunottat, Taxes and social contributions f 982-1 $93 A\S ISSN 0254-1475 COM(96) 589 final DOCUMENTS EN 08 04 15 10 Catalogue number : CB-CO-96-606-EN-C ISBN 92-78-11815-X Office for Official Publications of the European Communities L-2985 Luxembourg