27 September 2012, Krakow (Poland) European Commission European Commission, DG REGIO

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1 Financing Science and Business in the new financial perspective 27 September 2012, Krakow (Poland) European Commission European Commission, DG REGIO

2 Outline 1. EU 2020, Regional Policy and Research&Innovation 2. R&I in the new Cohesion Policy Regulatory Framework 3. Cohesion policy and Horizon 2020

3 Budget for Cohesion Policy post 2013 billion EUR (2011 prices) Cohesion Fund 68.7 Less developed regions Transition regions 39.0 More developed regions 53.1 Territorial Cooperation 11.7 Extra allocation for outermost and northern regions 0.9 TOTAL* Connecting Europe facility for transport, energy and ICT 40.0 TOTAL *Includes 2,5 billion EUR allocation for food for deprived persons

4 Geographical coverage of support Three categories of regions Less developed regions (GDP per capita < 75% of EU average) Transition regions (GDP per capita between 75% and 90%) More developed regions (GDP per capita > 90%) The new category of transition regions replaces the current statistical phasing-out and phasing-in regions Why a new category for transition regions? Fairer system for regions with similar level of economic development Helps to soften the transition between less and more developed regions Safety net for regions whose GDP per capita is below 75% of the EU average in

5

6 The more economically developed countries the more spendings on R&D in GDP GERD % share in GDP by countries in ,5 GERD share in GDP 4 3,5 3 2,5 2 1,5 Finland 3,87% 3% EU 2020 target 2% EU 2010 average Finland, Sweden, Denmark 3%-4% France, Germany 2,3%-2,8% Estonia, Czech, Hungary 1,1%-1,6% 1 0,5 Poland 0,74% Lithuania, Poland, Latvia, Slovakia, Bulgaria, Romania ,5%-0,8% years Source: Eurostat

7 The Policy Context and its dimensions Raising scientific and technological excellence combined with business application is a pre-requisite forthesuccessoftheeurope2020: Necessary for the Union to advance and gain new ground in knowledge Crucial to acquire or maintain technological leadership Important to meet the big societal challenges of the present and of tomorrow

8 Cohesion Policy funding for R&I Cohesion Policy innovation support over total aid: 4% in % in % in % in 07-13

9 Regulatory framework Thematic concentration to maximise the impact of investments 2. Conditionalities and strengthened partnership to ensure effective implementation 3. Novelties to be kept on mind for translating RIS3 strategies into OP Cohesion Policy

10 Thematic concentration Europe 2020 inclusive sustainable smart 1. Research and innovation 2. Information and Communication Technologies 3. Competitiveness of Small and Medium-Sized Enterprises (SME) 4. Shift to a low-carbon economy 5. Climate change adaptation and risk management and prevention 6. Environmental protection and resource efficiency 7. Sustainable transport and disposal of congestion on major network infrastructure 8. Employment and support for labour mobility 9. Social inclusion and poverty reduction 10. Education, skills and lifelong learning 11. Increased institutional capacity and effectiveness of public administration

11 ERDF Investment priorities (Art. 5) 1). Strengthening research, technological development and innovation: enhancing research and innovation infrastructure (R&I) and capacities to develop R&I excellence and promoting centres of competence, in particular those of European interest; promoting business R&I investment, product and service development, technology transfer, social innovation and public service applications, demand stimulation, networking, clusters and open innovation in SMEs through smart specialisation; supporting technological and applied research, pilot lines, early product validation actions, and advanced manufacturing capabilities and first production in Key Enabling Technologies and diffusion of general purpose technologies; 2). Enhancing access to and use and quality of ICT: extending broadband deployment and the roll-out of high-speed networks ; developing ICT products and services, e-commerce and enhancing demand for ICT; strengthening ICT applications for e-government, e-learning, e-inclusion and e-health; 3). Enhancing the competitiveness of SMEs: promoting entrepreneurship, in particular by facilitating the economic exploitation of new ideas and fostering the creation of new firms; developing new business models for SMEs in particular for internationalisation;

12 ERDF : Concentration on R&I and SMEs to maximise impact Research and Innovation SMEs competitiveness Energy efficiency and renewable energy 6% 60% 20% 44% Developed regions and transition regions Less developed regions Flexibility (different regions present different needs) Special arrangements for the previously convergence regions Cohesion Policy

13 Current ERDF allocations to thematic objectives with proposed ring fencing 1. Strengthening research, technological development and innovation, 3. Enhancing the competitiveness of SMEs 4. Supporting the shift towards a low carbon economy in all sectors 4. supporting the shift towards a low carbon economy in all sectors Objective bill EUR % current ERDF allocations bill EUR % current ERDF allocations convergence 50 37% (50%) 10 6% (6%) competitiveness 15 57% (80%) 3 9% (20%)

14 and what it means for research & innovation? Some 90billion for R&I and SME competitiveness in BUTthatdependson EP andcouncil's decisions on budgets and regulations...

15 Ex-ante Conditionalities "Ex ante conditionalities are defined to ensure that the necessary framework conditions for the effective use of Union support are in place. " "The Commission shall assess the information provided on the fulfilment of ex ante conditionalities in the framework of its assessment of the Partnership Contract and programmes. It may decide, when adopting a programme, to suspend all or part of interim payments to the programme pending the satisfactory completion of actions to fulfil an ex ante conditionality. The failure to complete actions to fulfil an ex ante conditionality by the deadline set out in the programme shall constitute a basis for suspending payments by the Commission. "

16 Thematic ex-ante conditionalities state-of-play regarding RIS3 conditionality Thematic objectives Ex ante conditionality Criteria for fulfilment 1. Strengthening research, technological development and innovation (R&D target) (referred to in Article 9(1) ) 1.1. Research and innovation: The existence of a national or regional research and innovation strategy for smart specialisation in line with the National Reform Programme, to leverage private research and innovation expenditure, which complies with the features of well-performing national or regional research and innovation systems A national or regional research and innovation strategy for smart specialisation is in place that: is based on a SWOT analysis to concentrate resources on a limited set of research and innovation priorities; outlines measures to stimulate private RTD investment; contains a monitoring and review system. A Member State has adopted a framework outlining available budgetary resources for research and innovation; A Member State has adopted a multiannual plan for budgeting and prioritization of investments linked to EU priorities (European Strategy Forum on Research Infrastructures -ESFRI).

17 Regulation: Thematic and general ex-ante conditionalities set out in the Regulation Preparation of programming documents: Member States undertake a self-assessment verifying whether the ex-ante conditionality criteria have been met. Conditionality respected: Draft programmes explain that no further action needs to be taken Partially respect: Draft programmes lay down commitments for fulfilment Not respected: Suspend payments pending completion of actions Submission of programming documents: The results of the self-assessment and commitments are synthesised in the Partnership Contract are included in the draft programmes. Negotiation and agreement on commitments: The agreed commitments are set out in the programmes and synthesised in the Partnership Contract.

18 Important novelties for R&I in proposed Regulations (1) SMEs only! Large Firmsonlyin connectionwith R&TD+i. Art.3 (ERDF Reg.): "The ERDF shall support productive investment, which contributes to creating and safeguarding sustainable jobs, through direct aid to investment in SMEs" Promoting internationalisation: Art (b) (CPR Reg.): if the operation is for the benefit of the programme area: "The total amount allocated under the programme to operations located outside the programme area [but within the Union] does not exceed 10% of the support from the ERDF, CF and EMFF (3% for EAFRD)"

19 Important novelties for R&I in proposed Regulations (2) and interregional collaboration: Art (c) v (CPR Reg.): "An Operational Programme shall set out the contribution to the integrated approach for territorial development set out in the Partnership Contract (Agreement), including the arrangements for interregional and transnational actions with beneficiaries located in at least one other Member State" Innovative actions in the field of sustainable urban development: CPR Art 84(7) "0,2% of the ERDF resources for the Investment for growth and jobs goal shall be allocated to innovative actions at the initiative of the Commission in the area of sustainable urban development" (not under shared management; urban development platform to facilitate networking among cities with IA)

20 Important novelties for R&I in proposed Regulations (3) Social innovation: ESF Art. 9: all areas falling under the scope of the ESF; Member States shall identify themes for social innovation; Commission shall facilitate capacity building for social innovation + in ERDF investment priority 1(b) physical infrastructure in the areas of energy, environment, transport, and ICT (but not in more developed regions) Common Strategic Framework: translates the objectives and targets of smart, sustainable and inclusive growth into key actions for the ERDF, the CF, the ESF, the EAFRD and the EMFF which will ensure an integrated use of the CSF Funds to deliver common objectives (CPR Art )

21 Horizon 2020 Framework Programme Overall amount for Horizon 2020:EUR 80 billion 46% increase compared to current period ( ) Responding to the economic crisis to invest in future jobs and growth Addressing peoples' concerns about their livelihoods, safety and environment Strengthening the EU's global position in research, innovation and technology

22 Horizon 2020 Objectives and structure Europe 2020 priorities International cooperation European Research Area Shared objectives and principles Tackling Societal Challenges Health, demographic change and wellbeing Food security and the bio-based economy Secure, clean and efficient energy Smart, green and integrated transport Supply of raw materials, resource efficiency and climate action Inclusive, innovative and secure societies EIT will contribute to addressing these challenges Creating Industrial Leadership and Competitive Frameworks Leadership in enabling and industrial technologies Access to risk finance Innovation in SMEs Excellence in the Science Base Frontier research (ERC) Future and Emerging Technologies (FET) Skills and career development (Marie Curie) Research infrastructures Simplified access Common rules, toolkit of funding schemes Coherent with other EU and MS actions

23 Horizon 2020 and Cohesion policy Horizon 2020 Cohesion Policy Framework EU level challenges through EU level open competitions Promoting excellence in research and innovation regardless of geographical location Supporting mainly individual and frontier research Awarded directly to final beneficiaries Focus on building basis for having state-of-the-art EU products (industrial leadership) Different objectives and intervention modes: With strong complementarities: Building regional/national capacities for R&I (facilities, infrastructures, skills) Aiming at reducing regional disparities Supporting mainly applied research and commercialisation Awarded through shared management through national or regional public intermediaries Focus on commercialising of research to ensure economic growth based on market needs and critical skills

24 Innovation-friendly business environments stimulate R&D excellence Innovation is not just R&D. For most companies and the majority of regions their competitiveness are not mainly or primarily dependent on R&D efforts but on knowledge absorption (education and training, advanced business services) and diffusion (technology transfer, ICT, entrepreneurship) largely dependent on internal and external connectivity Proportion of innovation active enterprises with no R&D, Sources: Eurostat CIS6; R.J. Adams, The distribution of innovation activity across UK industry, BIS (2010) from a presentation by Michael Kitson Judge Business School, University of Cambridge and UK-Innovation Research Centre "Innovation is not just science and technology; it is also the creation of a multitude of new products and services in all sectors of the economy, new marketing methods and changes in the ways of organising businesses, in their business practices, workplace organisation and external relations" (OECD 2010). "Innovations are not just the results of scientific work in a laboratory-like environment this is the exception rather than the rule the causality between science and innovation has proven weaker than expected innovation emerge increasingly in practice-based processes based on the ability to interact and build networks with other innovation agents" (V. Haarmaakopi et al 2008)

25 Thank you for your attention For further information: Europe 2020: Innovation Union: Horizon 2020: FP7: EC Research Infrastructures and ESFRI: EC Regional Policy:

26 Thematic ex-ante conditionalities state-of-play regarding RIS3 conditionality Thematic objectives Ex ante conditionality Criteria for fulfilment 1. Strengthening research, technological development and innovation (R&D target) (referred to in Article 9(1) ) 1.1. Research and innovation: The existence of a national or regional research and innovation (strategy) (strategic policy framework(s)) for smart specialisation in line with the National Reform Programme, to leverage private research and innovation expenditure, [ which complies with the features of well-performing national or regional research and innovation systems.] For research infrastructures only: 1.2 The existence of a multi-annual plan for budgeting and prioritization of investments. is based on a SWOT analysis to concentrate resources on a limited set of research and innovation priorities; outlines measures to stimulate private RTD investment; contains a monitoring [ and review ] system. A framework outlining available budgetary resources for research and innovation; A [indicative] multi-annual plan for budgeting and prioritization of investments linked to EU priorities [and, where appropriate, the] European Strategy Forum on Research Infrastructures -ESFRI).

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