EU Commission wants to cut red tape to attract venture capital to cutting edge high-tech research.

PRESS RELEASE: Brussels, 4 September 2008.
The Commission today called on the Parliament and Council to support a new drive to cut red tape and allow greater flexibility to make European high-tech research more effective. It was responding to the 'Aho report', the most comprehensive evaluation of EU ICT research yet, looking beyond the management of research to evaluate its impact on innovation. The report highlighted that EU research could be of greater benefit for European competitiveness by involving and supporting high growth companies and providing better links between research and venture capital.

The Commission, which has launched several initiatives to involve leading companies in research(IP/08/910, IP/08/824, IP/08/785), is committed to making the information and communications technology (ICT) research it supports more effective in terms of delivering business opportunities. It is also launching a public consultation that will feed into proposals to this end in early 2009.

"European ICT research is a world leader in telecommunications and audiovisual systems and in application areas such as intelligent cars and medicine. However, we are falling behind in terms of the level and intensity of ICT research spending and we consistently fail to commercialise research results," said Viviane Reding, Commissioner for Information Society and Media. "EU ICT research must be turned into growth, jobs and competitiveness. For this to happen we need a Single Market approach to ICT research and innovation. We need less administrative red tape and risk-aversion and a more proactive policy environment. We did this with in mobile phones, today there are 3 billion in use worldwide on the European GSM standard. We can do it again."

The Commission is set to invest €9 billion in high-tech research under its ICT research programme between 2007 and 2013. Today it responded to the main findings of a report on its ICT research published by a panel headed by former Finnish Prime Minister Esko Aho (MEMO/08/430). EU research from 2003 until 2006 received €4 billion funding, bringing together over 4500 research organisations and resulted in world-leadership of areas of technology research, like 45 nanometre miniaturised chips that can be used in smaller and more functional PCs and mobile phones.

The Aho report* highlighted the need to cut red tape to attract more SMEs to EU research and said that more needed to be done to ensure commercialisation of research results. This includes more public-private partnerships such as the Joint Technology initiatives for nanoelectronics (IP/08/284) and embedded systems (IP/08/283) for which the Commission invested €5 billion earlier this year.

It also recommended actions to further cut administrative burdens to make it easier for innovative companies to participate in EU research and turn its results into products and services for consumers in Europe and beyond (shorter, simpler application procedures, for example). The Parliament and the Council are now invited to support the Commission in developing a more risk-tolerant approach to supporting research in the EU.

To maximise the impact of its ICT research on growth and jobs, the Commission also wants a more innovation-friendly environment where it would be easier for high-growth companies to link to venture capital and to develop standards for innovative new products. These are some of the issues that will be addressed by a public consultation on ICT research being launched in parallel with today's Communication (IP/08/1287).

Background:

The Communication and the "Aho Report" on the Effectiveness of Information Society Research in the EU's 6th Framework Programme 2003-2006 are available here.

*The "Aho Panel" included the following independent experts:
-Mr. Esko Aho (Chairman) - former Prime Minister of Finland and President of the Finnish National Fund for Research and Development (Sitra)
-Mr. Michel Cosnard - Professor at the Polytechnic School of the University of Nice-Sophia Antipolis, Chairman and CEO of INRIA (Institut National de Recherche en Informatique et en Automatique)
-Mr. Hans-Olaf Henkel - Professor at the University of Mannheim and former CEO of IBM Europe, Middle East and Africa as well as former President of the Federation of German Industries
-Mr. Luc Soete - Director of UNU-MERIT (the United Nations University – Maastricht Economic and social Research and training centre on Innovation and Technology)
-Mrs. Nicoletta Stame - Professor, Social Policy, University of Rome “La Sapienza” and Co-founder and first president of AIV (Italian Evaluation Association)
- Mr. Pavel Telička – former EU Commissioner (Health and Consumer Protection), Cofounder of BXL Consulting and Senior Advisor, European Policy Centre.

The 23 Recommendations of the "Aho Report" are:

1. It is recommended that efforts are made to continue to consolidate public-private partnerships of a more permanent nature, such as Joint Technology Initiatives (JTIs) from the 7th Framework Programme.

2. It is recommended to continue the effort to ensure that support for SMEs and for large firms is not “compartmentalised” into different measures or tools.

3. A platform should be created within the scope of the 7th Framework Programme for new and high-growth companies to meet venture capital investors.

4. Encourage participation from outside Europe in all projects. Participation from both developing and industrialised non-European countries should be promoted.

5. Internationalise the advisory system – e.g. the IST Advisory Group – by including top scientists and engineers from around the world

6. Reflect the latest international developments and challenges in the work programme. A more flexible approach may be needed to integrate new, interesting developments in the field faster.

7. Focus the research effort on creating and sustaining world leadership where Europe already has a comparative advantage and where Europe has a new opportunity to take the lead. Europe should be selective and not attempt to become a world leader in every area

8. The eInfrastructures approach should be expanded to more application-oriented and user-oriented platforms in other sectors.

9. The Panel recommends that accounting control in JTIs is carried out by Member States and participating companies, with a minimum of intervention at the Community level.

1. The Panel strongly recommends developing a more trust-based approach towards participants at all stages. The existence of a few unfortunate examples should not be allowed to stand in the way of innovation. Specific elements in the development of such an approach are detailed below.
2. To require shorter proposals with fewer details of work packages and a focus on the appropriateness of partnerships in particular the inclusion of highly innovative participants.
3. That more complete and helpful feedback is made available to proposers whose ideas are not funded.
4. To test a new approach whereby proposals are not fully evaluated initially. All applications passing a few basic checks should be given a small amount of "seed funding" for an exploratory phase. After this, exploratory projects with successful results would be selected for full project funding.
5. Financing projects based on actual performance rather than promises and reputation could both reduce the initial paperwork and be a viable way of attracting innovative (small) companies which would not otherwise consider applying for Community funding.
6. To explore expanding the two-step evaluation procedure from the Open part of the "future and emerging technology" area to other parts of the programme – prospective participants first provide a broad outline of their project idea, and only provide a more refined plan once they are selected. This may increase the workload for the Commission in the early phases, and lengthen the evaluation process, but it will significantly reduce the burden on the research community of preparing proposals.
7. To optimise reporting, which is time-consuming and may be untimely, and allow the participants to report when there is something to report.
8. To allow the refocusing of the research on different priorities if this becomes necessary during implementation.
9. Similarly, to allow more flexibility in the composition of partnerships during the project, including the possibility of changing partners if the research takes a direction which would benefit from new partners or replacement of partners.
10. The Panel recommends a more strategic use of standardisation to create new EU-wide markets. Standard-setting is needed as a tool for pulling through innovations and creating viable markets for new products and services.
11. The Panel welcomes the recent Commission Communication on pre-commercial procurement, and recommends that new initiatives are taken to allow public authorities to procure the development of innovative goods and services.
12. The European single market needs to be made more effective for business angels and venture capitalists, and European investment funds need to be more effectively utilised to pull through innovations from the Framework Programmes.
13. A more strategic approach to standardisation at the European level, when this cannot be left to market forces, focused on interoperability and development of standards where there is a well-documented need for coherent innovative services and European leadership, will be in the broader public interest.
14. The interconnection of large regional and national eInfrastructures should be further developed. EU-wide platforms and infrastructures are needed in sectors such as eGovernment (especially procurement), eHealth (cross-border applications), logistics and transport. Framework RTD should be complemented by other measures, in particular public procurement at both national and European