Documents considered by the Committee on 23 March - European Scrutiny Committee Contents

1   EU funding for research and innovation



COM(11) 48

Commission Green Paper: From Challenges to Opportunities: Towards a Common Strategic Framework for EU Research and Innovation Funding

Legal base
Document originated9 February 2011
Deposited in Parliament17 February 2011
DepartmentBusiness, Innovation and Skills
Basis of considerationEM of 3 March 2011
Previous Committee ReportNone
To be discussed in CouncilNo date set
Committee's assessmentPolitically important
Committee's decisionNot cleared; further information requested


1.1  The Europe 2020 Strategy, which was endorsed by the European Council in June 2010, seeks to address "bottlenecks to growth" and to transform the EU into a "smart, sustainable and inclusive economy delivering high levels of employment, productivity and social cohesion." It proposes seven "flagship initiatives" which are intended to help the EU and Member States achieve five headline targets agreed by the European Council covering employment; research, development and innovation; climate change and energy; educational attainment; and social inclusion. The headline target for research and development sets the goal of raising levels of private and public investment to 3% of GDP.

1.2  In its Communication on the Europe 2020 Strategy, the Commission says that investment in knowledge and innovation is essential to achieve "smart" growth and high quality jobs while also tackling global societal challenges, such as climate change, energy and resource efficiency, health and demographic change. In October 2010, the Commission published its flagship initiative, entitled Innovation Union, which seeks to promote a strategic approach to innovation in which "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."[1] The Commission identified ten strategic goals which include:

  • more investment in education and R&D;
  • the reform of existing EU and national research and innovation systems to improve performance and value for money and to avoid fragmentation;
  • simplification of access to EU funding for research and innovation and better use of public funding to leverage private sector investment;
  • enhanced cooperation between the scientific research community and business;
  • removal of barriers which make it difficult to bring innovative ideas to the market;
  • development of European Innovation Partnerships to pool human and financial resources in order to tackle major societal challenges; and
  • greater engagement with international partners.

1.3  At the same time, the Commission also published its Communication on the EU Budget Review which sets out the principles that should underpin the future EU Budget from 2014 onwards.[2] The Commission noted that, by the end of 2013, expenditure on research and innovation would amount to approximately 7% of the EU's budget but added that "future research and innovation spending must have an even stronger impact in terms of growth and job creation and in terms of significant social and environmental return." It suggested that the full range of EU funding instruments for research and innovation should be brought together within a Common Strategic Framework. The European Council endorsed this approach in Presidency Conclusions agreed in February 2011 and invited the Commission to put forward proposals by the end of 2011.[3]

The Green Paper

1.4  The Green Paper launches a public consultation on the key issues to be considered when developing a Common Strategic Framework for future EU research and innovation funding. The Commission expects to put forward formal legislative proposals by the end of 2011.

1.5  The Commission says that "Europe needs to make a step change in its research and innovation performance" or risks being left behind by other emerging economies. It highlights underinvestment in research and innovation, especially by the private sector, as a major weakness and suggests that coordinated action at EU level should reduce duplication and fragmentation, generate greater efficiency and impact, and help leverage more private investment. Evaluations of existing EU research and innovation programmes have identified a number of deficiencies, notably "the lack of a whole chain approach to research and innovation, the complexity of instruments, over-bureaucratic rules and procedures and a lack of transparency."[4] Future EU programmes should therefore seek to:

  • clarify their objectives, while maintaining sufficient flexibility to respond to emerging policy needs;
  • reduce complexity;
  • increase the added value of EU funds and their leverage effect on other public and private resources, and make it easier to pool national and regional funds in order to achieve a critical mass of funding;
  • simplify participation by reducing administrative burdens;
  • broaden participation in EU programmes, especially by SMEs, newer Member States and third countries; and
  • contribute to increasing EU competitiveness and/or the societal impact of EU-funded programmes by ensuring that the fruits of research are used by industry, investors, public authorities, other researchers or policy makers.

The Common Strategic Framework for EU research and innovation funding

1.6  The Commission says that the Common Strategic Framework for future EU research and innovation funding programmes should have four overarching objectives:

  • to contribute to the achievement of Europe 2020 objectives;
  • to tackle societal challenges;
  • to strengthen the competitiveness of Europe's industrial base; and
  • to promote excellence in Europe's scientific and technological base.

Contributing to Europe 2020 objectives

1.7  The Common Strategic Framework should cover all future EU research and innovation funding and establish coherent goals and shared strategic objectives which complement the proposed Common Strategic Framework for EU cohesion policy and proposals for future rural development funding programmes. This should allow for more strategic planning and a greater concentration of resources to help deliver Europe 2020 priorities. EU funding should be easier to access, especially for SMEs, and funding instruments streamlined and simplified. The Commission seeks views on how to achieve the following:

  • making EU research and innovation funding more attractive and easy to use for participants;
  • ensuring that EU innovation funding covers the full innovation cycle, from research to market uptake, and maximises the benefit of acting at EU level, including a strong emphasis on leveraging other sources of funding;
  • using EU research and innovation funding to pool EU and national resources and support joint programming initiatives between Member States;
  • maintaining an appropriate balance between smaller, targeted projects and larger, strategic ones;
  • developing a standardised set of rules to simplify participation in EU-funded programmes while also allowing for some differentiation between funding instruments to respond to the diverse needs of beneficiaries, such as SMEs;
  • identifying appropriate performance indicators to measure the success of EU research and innovation funding; and
  • ensuring that EU research and innovation funding complements funding available to less developed regions under the EU's cohesion policy as well as future EU rural development programmes.

Tackling societal challenges

1.8  The Commission says that the Europe 2020 Strategy sets ambitious policy objectives in areas such as climate change, energy security, demographic ageing and resource efficiency, but that "careful consideration is needed to identify those challenges where EU level intervention can truly make a difference, while avoiding overly prescriptive scientific and technological choices."[5] The Commission highlights the concept of European Innovation Partnerships as a means of pooling effort and resources and focussing activities across the innovation cycle (bringing research to market). It seeks views on how to achieve the following:

  • ensuring an appropriate balance between "agenda-driven" research, where areas for research are determined in advance, and "curiosity-driven" research;
  • using EU research and innovation funding to support policy making and address societal challenges; and
  • attracting greater public interest and involvement in EU research and innovation activities.

Strengthening competitiveness

1.9  The Commission says that greater effort is needed to involve industry in setting priorities for EU research and innovation so that innovative goods and services can be brought to the market. It highlights the "pivotal role" of SMEs and the need for "open, light and fast implementation schemes [to] enable SMEs and other stakeholders from industry and academia to explore new ideas and opportunities as they emerge, in a flexible way, opening new avenues for innovation." The Commission describes the low level of private investment in research and innovation as "a major bottleneck" and suggests making full use of financial instruments such as the Risk Sharing Finance Facility (funded in part from the EU budget and in part by the European Investment Bank) to overcome market gaps and to "support the commercialisation of research results, the growth of innovative businesses and investments in major infrastructures." [6] The Commission seeks view on how to achieve the following:

  • ensuring that EU funding reflects the broad scope of innovation, including social and eco-innovation;
  • strengthening and facilitating the participation of industry and SMEs in EU research and innovation programmes, including through public-private partnerships;
  • designing open, light and fast implementation schemes which are flexible enough to enable novel ideas to be brought to market, especially by SMEs;
  • encouraging greater use of equity and debt-based EU financial instruments;
  • modifying public procurement rules to encourage innovation; and
  • considering how intellectual property rights relating to EU research and innovation funding affect the balance between competitiveness, on the one hand, and the need for access to, and dissemination of, the results of scientific research.

Strengthening Europe's scientific base

1.10  The Commission considers that the development of a genuinely unified European Research Area[7] would help Europe to become a centre of "world class excellence where ground-breaking research results are generated which are able to drive structural change."[8] It says that excellence can only thrive where researchers have adequate resources and compete against each other. The Commission therefore calls on Member States "to pursue ambitious modernisation agendas for their public research base and sustain public funding." It highlights the need for international cooperation but says that openness to participation in EU-funded research and innovation programmes should be reciprocated in third countries and cover not only access to funding but also market access and protection of intellectual property rights. The Commission seeks view on how to achieve the following:

  • strengthening the role of the European Research Council[9] to support world class excellence, and providing EU support for Member States to develop excellence;
  • strengthening Marie Curie actions[10] to promote cross-border mobility and research collaboration;
  • strengthening female participation in science and innovation;
  • supporting research infrastructures (including EU-wide e-Infrastructures);
  • identifying priority areas for international cooperation; and
  • considering the appropriate balance between EU funding and other (policy or legislative) measures to complete the European Research Area by 2014.

1.11  The Commission invites responses to the Green Paper by 20 May 2011.

The Government's view

1.12  The Minister of State for Universities and Science (Mr David Willetts) says that existing EU instruments for funding research and innovation have their own separate budgets and administrative procedures and operate independently of each other. He continues:

"The Government supports in principle the Commission's objective to bring together in a more coordinated manner the key funding instruments [...] within a coherent strategic framework and welcomes the consultation which the Commission has launched.

"The Government considers that the administrative arrangements for future EU research and innovation programmes must be radically simplified in order to continue to attract high quality participants from academia and business, especially SMEs. The Government also considers that it is important to consider mechanisms which will increase the socio-economic impact of these programmes."[11]

1.13  The Minister notes the "fundamental role" that research and innovation will play in addressing societal challenges, as well as encouraging the competitiveness of European industry and the excellence of the scientific and technological base in Europe. He adds:

"The Government agrees that support for research and innovation should be a priority over the next Financial Perspective, subject to the imperative of real overall budgetary restraint."[12]

1.14  He says that the Government will produce a formal response to the Green Paper as part of a wider UK position paper on EU research and innovation funding and that he will provide us with a copy. He adds that the UK's devolved administrations are likely to produce their own response to the Green Paper, but says that the Scottish Government has expressed its support for the overall objectives proposed for the Common Strategic Framework and believes that there is scope to develop greater synergies with EU cohesion funding to support innovation.


1.15  Research and innovation undoubtedly has an important role to play in addressing some of the big societal challenges identified in the Europe 2020 Strategy while also helping European businesses to be more competitive in a global market. The difficulty lies in determining how best to deploy EU funds for research and innovation in a way that makes the most out of every euro at a time when public budgets are severely constrained.[13] We think that the Green Paper raises some important questions about the nature, quality and purpose of EU funding for research and innovation and we agree with the Commission that "careful consideration is needed to identify those challenges where EU level interventions can truly make a difference."[14]

1.16  We note the Government's support in principle for developing a Common Strategic Framework for EU research and innovation funding and look forward to considering its formal response to the Green Paper shortly. Meanwhile, the document remains under scrutiny.

1   See HC 428-viii (2010-11), chapter 8 (17 November 2010). Back

2   See HC 428-xi (2010-11), chapter 4 (15 December 2010). Back

3   See Back

4   See page 5 of the Commission's Green Paper.  Back

5   See para 4.2, page 8 of the Green Paper.  Back

6   See page 10 of the Green Paper.  Back

7   The Minister's Explanatory Memorandum describes the objectives of the European Research Area as follows: creating a single market for R&D which includes facilitating the free movement of researchers, developing excellent European research infrastructures, enabling easy exchange of knowledge, developing best practice in intellectual property management for publicly-funded research, and coordinating research activities to tackle global issues. See also Article 179 TFEU.  Back

8   See para 4.4, page 11 of the Green Paper.  Back

9   The European Research Council was officially launched in 2007 and awards grants by means of an open competition to researchers who demonstrate excellence and innovative thinking in their scientific field.  Back

10   Marie Curie actions fund cross-border collaboration in science and the humanities.  Back

11   Paras 25 and 26 of the Minister's Explanatory Memorandum.  Back

12   Para 24 of the Minister's Explanatory Memorandum.  Back

13   See p. 4 of the Green Paper. Back

14   Para 4.2 of the Green Paper. Back

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2011
Prepared 31 March 2011