14 Research and innovation
| (26953)
13606/05
COM(05) 488
+ ADD 1
+ ADD 2
| Commission Communication: More research and Innovation — Investing for Growth and Employment: A Common Approach
Commission staff working document — steps for implementation
Commission staff working document — impact assessment
|
| Legal base | — |
| Document originated | 12 October 2005
|
| Deposited in Parliament | 27 October 2005
|
| Department | Trade and Industry
|
| Basis of consideration | EM of 9 November 2005
|
| Previous Committee Report | None
|
| To be discussed in Council | 28 November 2005
|
| Committee's assessment | Politically important
|
| Committee's decision | Cleared; but further information requested
|
Background
14.1 In March 2002, the European Council concluded that, in order
to close the gap between the EU and its major competitors, there
must be a significant growth in research and development (R&D)
and innovation. Spending on R&D and innovation should be increased
with the aim of approaching 3% of the EU's gross domestic product
by 2010. Two-thirds of this should come from the private sector.[33]
14.2 In March 2005, the European Council reached
conclusions on the mid-term review of the Lisbon Strategy.[34]
It called on all the Community institutions and the Member States
to relaunch the Strategy on the basis of three elements, of which
the first is knowledge and innovation. The European Council commented:
"it is important to develop research, education
and all forms of innovation insofar as they make it possible to
turn knowledge into added value and create more and better jobs".[35]
The document
14.3 The Commission notes that nearly all Member
States have set targets which — if met — would bring
total EU research investment to 2.6% of gross domestic product
(GDP) by 2010. But most Member States' actual expenditure on R&D
falls far short of what their national targets, let alone the
EU target, would require. In 2003, total R&D investment in
the EU was 1.93% of GDP, compared with 2.59% in the USA and 3.5%
in Japan. In the same year, the private sector's share of the
EU's total R&D expenditure was 55.6%, compared with 63.1%
in the USA and 74.5% in Japan. World-wide competition to attract
investment in research and innovation is growing and comes not
only from established competitors such as the USA and Japan but
also from new ones, such as China, India and Brazil.
14.4 The Commission says that the main objective
of its Communication is to contribute to the implementation of
the Lisbon Strategy by setting out the action that needs to be
taken over the next few years to support research and innovation.
14.5 The Communication has four sections. Each section
makes proposals for action by the Commission and by Member States.
Section 1 — Putting research and innovation
at the heart of EU policies
14.6 The Commission says that it will:
- identify regulatory barriers
to research and innovation;
- make State aids more sympathetic to research
and innovation;
- support action to improve the intellectual property
rights system and make it more effective;
- support, monitor and develop action under the
EU's human resources strategy for researchers;
- promote the use of public procurement as a means
to stimulate innovation; and
- give guidance on the use of tax incentives to
promote R&D.
14.7 The Commission invites Member States, in parallel
with the Commission's actions, to:
- transpose Community legislation
into national law in a way that will promote, not hamper, research
and innovation;
- use State Aids to support research and innovation;
- adopt the Commission's proposal for a Community
Patent;
- implement the Community Recommendations and Directives
on attracting and retaining researchers and facilitating their
mobility within the EU;
- consider reviewing their public procurement practices;
and
- voluntarily implement the Commission's guidance
on tax incentives for R&D.
Section 2 — Putting research and innovation
at the heart of EU funding
14.8 The Commission says that it will:
- encourage the use of the Structural
Funds to support research and innovation;
- promote better access to finance for innovative
small and medium-sized enterprises (SMEs);
- support the development of new technologies and
their take-up by the market; and
- "mobilise" national and regional research
and innovation programmes and other sources of funding.
14.9 The Commission invites Member States to:
- adopt the Commission's proposals
for the Structural and Cohesion Funds for 2007-13 and use the
new opportunities they offer to support research and innovation;[36]
- use the financing facilities proposed in the
draft Decision to establish a Competitiveness and Innovation Programme
(CIP);[37]
- adopt the Commission's proposals for the EU's
7th R&D Framework Programme (7th R&DFP);[38]
and
- use Community support schemes to foster transnational
cooperation under the CIP and 7th R&DFP.
Section 3 — Putting research and innovation
at the heart of business
14.10 The Commission says that it will:
- define EU guidelines to improve
research collaboration and the transfer of knowledge between publicly-funded
research and industry;
- promote knowledge-driven industrial clusters;
- provide enterprises (and SMEs, in particular)
with business support services (for example, information about
grants);
- disseminate information about, good practice
in planning, implementing and marketing innovative products and
adopting innovative working practices;
- define a strategy to promote innovative services;
and
- establish a European industrial research and
innovation monitoring system.
14.11 The Commission invites Member States, in parallel
with the Commission's actions, to:
- voluntarily implement the planned
EU guidelines on research collaboration and on knowledge transfer
between publicly-funded research and industry;
- make full use of the Structural Funds to foster
industrial clusters and to improve support services for innovative
firms;
- promote innovation management and consider awarding
innovation prizes;
- consider ways to promote innovative services;
and
- take account of the results of EU monitoring
of industrial research and innovation.
Section 4 — Improve research and innovation
policies
14.12 The Commission says that it will:
- monitor and support research
and innovation policy developments;
- develop ways to analyse the introduction and
performance of research and innovation policies; and
- assess Member States' approaches to supporting
research and innovation and disseminate good practice.
14.13 The Commission invites Member States to:
- cover research and innovation
in their National Reform Programmes;
- use the statistical and policy analysis produced
by the Commission; and
- use the planned information on good practice.
14.14 Detailed information about each of the actions
outlined in the four sections is given in an annex (ADD1) to the
Communication.
The Government's view
14.15 The Parliamentary Under-Secretary of State
for Science and Innovation at the Department of Trade and Industry
(Lord Sainsbury of Turville) tells us that the bridging of the
research and innovation is welcome. He notes that the Communication
does not contain substantial new initiatives. But the Communication
says that the Commission intends to make proposals about the use
of tax incentives for R&D. The Minister says that taxation
is a matter reserved to Member States.
14.16 The UK Presidency will seek to agree Council
Conclusions on the Communication at the Competitiveness Council
on 28 November.
Conclusion
14.17 The Communication does not make new proposals
for expenditure. Most of the action it describes is already in
preparation. We are content to clear it from scrutiny.
14.18 We note, however, that the Commission intends
to issue guidance on the use of tax incentives for R&D. As
the Minister says, taxation is not a matter for the Commission
and, in our view, it is outside the Commission's competence to
give the guidance it proposes. We ask the Minister to tell us
if the point is discussed at the Competitiveness Council on 28
November and to send us a copy on the Conclusions of the meeting.
33 Barcelona European Council on 15/16 March 2002,
conclusion 47. Back
34
Brussels European Council on 22/23 March 2005, conclusions 4 to
41. The Strategy agreed by the Lisbon European Council in March
2000 set the EU the goal of becoming, by 2010, "the most
competitive and dynamic knowledge-based economy in the world capable
of sustainable economic growth with more and better jobs and greater
social cohesion". Back
35
Paragraph 10 of the European Council's conclusions. Back
36
See (25864) 11606/04: HC 42-xxxii (2003-04), para 10 (13 October
2004). Back
37
See (26495) 8081/05: HC 34-i (2005-06), para 20 (4 July 2005). Back
38
See (26581) 8087/05: HC 34-i (2005-06), para 21 (4 July 2005). Back
| 
