8 Innovation Union
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14035/10
COM(10) 546
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| Commission Communication: Europe 2020 Flagship Initiative Innovation Union
Commission staff working document: A rationale for action
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Legal base |
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Document originated | 6 October 2010
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Deposited in Parliament | 11 October 2010
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Department | Business, Innovation and Skills
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Basis of consideration | EM of 25 October 2010
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Previous Committee Report | None
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To be discussed in Council | 25-26 November 2010
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Committee's assessment | Politically important
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Committee's decision | Cleared
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Background
8.1 In June, the European Council agreed a new European Strategy
for Jobs and Growth the Europe 2020 Strategy which
included the following "EU headline target":
" improving the conditions for research and development,
in particular with the aim of raising combined public and private
investment levels in this sector to 3% of GDP".
Innovation Union is one of seven "flagship initiatives"
proposed by the Commission to implement the Europe 2020 Strategy.
According to the Commission, R&D spending in Europe is below
2%, compared with 2.6% in the US and 3.4% in Japan, mainly because
levels of private investment in Europe are lower. Knowledge and
innovation are the essential drivers of future growth, but depend
on high quality education, a strong research base, optimal use
of new information and communication technologies and a more business-friendly
environment that encourages innovation.[20]
Commission Communication on Innovation Union
8.2 The Commission's Communication seeks to place innovation
in products, services, business and social models at the
heart of the Europe 2020 Strategy. The Commission says that innovation
"is our best means of successfully tackling major societal
challenges, such as climate change, energy and resource scarcity,
health and ageing" while also strengthening the EU's international
competitiveness and capacity to create new jobs at a time when
public expenditure is significantly constrained. The Communication
promotes a "strategic approach to innovation
where
all policy instruments, measures and funding are designed to contribute
to innovation, where EU and national/regional policies are closely
aligned and mutually reinforcing and
where the highest
political level sets a strategic agenda, regularly monitors progress
and tackles delays".[21]
8.3 The Commission identifies ten strategic goals
for establishing a genuine Innovation Union by 2020. These are:
- more investment in education
and R&D;
- reform of existing EU and national research and
innovation systems to improve performance and value for money
and avoid fragmentation;
- reform of education systems, especially universities,
to attract world-class talent;
- greater mobility for researchers and innovators
within the EU by establishing a European Research Area by the
end of 2014;
- simplifying access to EU funding for research
and innovation and making better use of public funding to lever
private sector investment;
- enhancing co-operation between the scientific
research community and business;
- removing barriers which make it harder for innovative
ideas to be brought to the market;
- developing European Innovation Partnerships which
bring together a variety of stakeholders (covering, for example,
R&D, finance, business and marketing) to pool resources to
tackle a specific major societal challenge, such as energy security,
climate change, or active and healthy ageing;
- exploiting areas of existing
strength, such as design and the creative industries; and
- engaging more with international
partners by, for example, opening up R&D programmes to highly
qualified third country academics, researchers and innovators.
The Commission estimates that meeting the target
of spending 3% of EU GDP on R&D by 2020 could create 3.7 million
jobs and increase annual GDP by close to 800
billion by 2025.
8.4 In addition to the ten strategic goals, the Commission
identifies 34 "Innovation Union commitments" to be undertaken
by the Commission and/or Member States which are designed to:
- strengthen the knowledge base
and create a unified European Research Area;
- get good ideas to market;
- ensure that the Innovation Union encompasses
all of the EU's regions;
- pool resources through the creation of European
Innovation Partnerships; and
- put in place strong monitoring mechanisms to
make the Innovation Union a reality.
8.5 Specific initiatives proposed include:
- a Commission Communication
in 2011 on the reform and modernisation of higher education, to
include proposals for an independent international ranking system
to benchmark university performance and the creation of "knowledge
alliances" to enhance business-academia collaboration;
- Commission proposals in 2012 to remove obstacles
to cross-border mobility and co-operation for researchers;
- Commission proposals to improve access to finance,
including closer collaboration with the European Investment Bank
to encourage private finance and fill gaps in funding for research
and innovation, as well as possible legislative measures to enable
venture capital funds to operate and invest freely within the
EU;
- a mid-term review in 2011 of the framework for
state aid for R&D to clarify which forms of innovation may
be supported;
- legislative proposals in 2011 to ensure that
the procedures for setting standards keep pace with, and foster,
innovation and interoperability;
- the creation of public procurement markets across
the EU for innovative products and services which improve the
quality and efficiency of public services, with Member States
setting aside dedicated budgets for this purpose from 2011;
- presentation in 2011 of an "eco-innovation
action plan" to use innovation to tackle environmental challenges;
- establishment of a European Design Leadership
Board and a European Design Excellence Label in 2011 to enhance
the role of design in innovation policy;
- adoption of an EU patent and the development
of proposals in 2011 for creating a European knowledge market
for patents and licensing to bring innovative ideas to the market;
- better targeting of structural funds to focus
on innovation;
- the launch, in 2011, of a major research programme
on public sector and social innovation, accompanied by a pilot
European Public Sector Innovation Scoreboard to benchmark public
sector innovation;
- better use of the European Social Fund to promote
social innovation, including the launch of a European Social Innovation
pilot to enable innovators in the social sector to network and
exchange expertise;
- the launch in 2011 of a pilot European Innovation
Partnership on active and healthy ageing which will seek, by 2020,
to extend by an average of two years the number of healthy years
lived; and
- the establishment of a European
Research and Innovation Performance Scoreboard to record the progress
made by Member States against a range of innovation indicators.
The Government's view
8.6 In his Explanatory Memorandum of 25 October,
the Minister for Universities and Science (Mr David Willetts)
says that:
"The Government broadly welcomes the scope,
analysis and level of ambition within Innovation Union, notably
the focus on private-sector led innovation to spur sustainable
growth while addressing major societal challenges. The Communication
correctly identifies the fundamental importance of innovation
in its broadest sense in driving sustainable growth.
While research features prominently as an essential building block
for innovation, it makes a persuasive case for the importance
of non-technological innovation, for example new business models,
design, services and social innovation".[22]
8.7 The Government considers that EU-level action
could "add value" in a number of areas, notably by helping
to leverage more private sector finance and scaling up investment
funds available to innovative SMEs, as well as by encouraging
the public procurement of innovative products. The Government
supports the Commission's proposed pilot European Innovation Partnership
on active ageing but emphasises the need for clear governance
arrangements and simple, flexible and efficient mechanisms to
ensure the proper co-ordination of supply-side and demand-side
measures.
8.8 The Minister says that UK structural funding
programmes already focus on research and innovation but Member
States should retain the freedom to ensure that future funding
programmes "support Member States' own policies and are aligned
with their own delivery mechanisms".[23]
He notes that the Commission may propose legislative measures
to implement some of the ideas contained in the Innovation Union
Communication and that these must be subject to a rigorous impact
assessment, conform to better regulation requirements and "think
small" principles. Legislative proposals will be considered
"on their merits", and the Government will seek to ensure
that they do not infringe national competence in areas such as
training, tax and research policy. The Minister indicates that
proposals to develop a new knowledge market for patents and licensing
will require a full cost/benefit assessment and adds that the
Government does not consider the development of a new global ranking
system for universities to be a priority.
8.9 While the Minister notes that the main focus
of the Commission Communication is to establish a framework to
encourage and support innovation through the realignment of existing
schemes and mechanisms, he adds that some of the ideas may involve
commitments from the EU budget and/or future legislation. He says
that the November Competitiveness Council is likely to adopt Conclusions
on the Communication and will have an important role to play in
promoting sustainable economic growth and monitoring the implementation
of the ideas contained in the Innovation Union Communication,
but that "this should not be at the expense of a more strategic
monitoring of Europe 2020 as a whole".
Conclusion
8.10 We note that Innovation Union is one of seven
"flagship initiatives" proposed by the Commission to
implement the Europe 2020 Strategy for Jobs and Growth. It contains
some ambitious ideas which, if realised, could provide an important
stimulus for sustainable economic growth within the internal market
and, for that reason, we think it merits a Report to the House.
However, as we observed in our Report on another flagship initiative
Youth on the Move the broad scope and generality
of the Commission's Communication make it difficult to discern
where the boundary between EU and national action lies.[24]
While we are content to clear the Communication from scrutiny,
we shall seek to ensure that any future legislative proposals
resulting from it do not encroach on areas of national competence
and are a necessary and proportionate means of achieving their
stated goals. We will also subject to careful scrutiny any proposals
that involve additional expenditure by Member States or from the
EU budget.
20 See Commission Communication on Europe 2020: A
Strategy for smart, sustainable and inclusive growth, COM(10)
2020. Back
21
See Executive Summary, p.2 of the Commission's Communication. Back
22
See Minister's Explanatory Memorandum, paragraph 19. Back
23
See paragraph 23 of the Minister's Explanatory Memorandum. Back
24
See HC 428-iv (2010-11), chapter 8 (20 October 2010). Back
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