Priorities for national research policies beyond 2010 – Industrial perspectives
October 5, 2009Discussant session 2.1
1. Introduction
Firms only invest to the extent that they can expect sufficiently attractive returns. As private R&D investments in Europe are lagging, framework conditions for R&D and innovation are apparently less favourable here than elsewhere. To increase private R&D investments, a wide range of policy measures at European and national levels is needed: more public investments in the Knowledge Triangle of education, research and innovation on the input side of the innovation system, measures to improve the throughput of the innovation system in terms of efficiency and effectiveness, and a strong market demand for innovative products and services to “pull through” innovation from the output side of the innovation system. In the following sections, these three aspects of the innovation system are used as a structure for commenting on the findings of the Expert Group (EG) on the 3% Objective and making additional policy recommendations.
2. Input or supply side of the innovation system
· The EG recommends a target of 5 % of GDP by 2020 for public and private investments in R&D and Higher Education in the EU, allowing Member States to differentiate in their balances and targets. In the recent Bruegel memos to the new Commission, the same 5 % target is proposed, to be reached by 2014 instead of 2020. This aggregate metric resembles the “investment in knowledge” defined by the OECD, basically as the sum of expenditures on R&D, higher education and software.
· The Netherlands employs yet another metric: the “knowledge investment ratio” defined as the sum of expenditures on R&D and education (not only tertiary). The Dutch ambition for this metric is an increase of 1.2 % of GDP on this metric between 2006 and 2016, with a 10-year roadmap (“knowledge investment agenda”) to get there. This would be an example of the 5-year roadmaps recommended by the EG.
· While for public investments indeed clear targets can be set (e.g. the Barcelona 1% public R&D investment target for 2010), private investments should rather be considered the result: a yardstick for the success of public policies to make a Member State attractive to private knowledge investments. As an alternative to the 5% target proposed by the EG on the 3% Objective, the Expert Group on the Role of Community Research Policy in the Knowledge-Based Economy calls for a new 3% target for the EU as a whole, consisting of 2% of GDP devoted to public investments in higher education and 1% of GDP devoted to public investments in R&D.
3. Throughput or efficiency and effectiveness of the innovation system
· A complication in the governance of the Knowledge Triangle is that the three corners have different spatial characteristics: innovation is predominantly of a regional nature, of course with some national and international aspects; education is mainly – but not only – a national affair and scientific research is typically borderless.
· Although not mentioned by the EG, the EIT can play a very instrumental role in achieving synergy between research, education and innovation activities in the Knowledge Triangle.
· To increase the performance and efficiency of national research funding systems, Member States should consider awarding grants to their national ERC applicants that have submitted proposals meeting the ERC quality threshold without being retained for ERC funding.
· As a key enabler of the Open Innovation processes highlighted by the EG, the Responsible Partnering Handbook[1] should be actively promoted by Member States in their national programmes. An update is planned just before the ERA Conference.
· Implementing efficient and effective public-private research partnerships (e.g. JTIs) through lean instruments, without resorting to the status of “Community body”, will require adaptation of the EU Financial Regulation. Also the much needed breakthrough in cutting the notorious red tape in the Framework Programme by means of a more risk-tolerant and trust-based approach in research funding can only be achieved by adapting the Financial Regulation. Member States and European Parliament are urged to support such adaptations to the Financial Regulation.
· There is a need for a better mechanism for pooling resources from the Community and Member States in variable geometries, e.g. for Joint Programming. Although progress is being made in the ICT JTIs, current mechanisms are not working optimally in case oversubscription levels in Member States are out of balance.
4. Output or demand side of the innovation system
· If there is no market demand for innovative products and services, there is no point for firms in investing in the Knowledge Triangle. The EG paper fails to explicitly address this part of the equation. Nevertheless, the EG rightly urges for completion of the internal market and harmonization of regulations, which are key elements in making Europe more interesting as a market for innovative products and services.
· Member States can stimulate market demand by national actions similar to the EC Lead Market Initiative (entailing regulation, standardisation and procurement), and/or direct involvement in the latter.
· A specific instrument for national public authorities to stimulate demand for innovation is Pre-Commercial Procurement of R&D services, a very promising scheme modelled upon successful US examples and put forward by the Commission at the end of 2007.
· Addressing societal challenges with innovative technologies can also boost market demand, while at the same time focussing the various public and private actions on the input, throughput and output sides of the innovation system on common goals. In view of the caring characteristics of European society, societal challenges could even develop into very promising Lead Markets.
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