Hungarian position concerning the Common Strategic Framework
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- Aleesha Sanders
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1 Hungarian position concerning the Common Strategic Framework Foreword Today Europe is trying to find new approaches to overcome the economic crisis and to increase Europe s competitiveness. The EU has to compete effectively in the rapidly changing global environment, it must develop a more focused, strategic and integrated approach to research, development and innovation. The Framework Programme is the most distinguished R&D programme of the EU and it has to be developed in the light of a consistent strategy. It must be made more attractive and more accessible in the future for the European research community and for the industrial sector, in order to promote competitiveness and the creation of new jobs. The potential of Europe to compete more effectively on a global stage is rooted in its ability to innovate and to internationalise its innovations. Europe is facing huge challenges in order to close some critical gaps in the key fields of research, technology and innovation, gaps which exist both on a global scale and within the European Union. In the process of forming our position regarding the content of future research, technology and innovation programmes, we would like to focus on finding solutions to close or eliminate those gaps. i) There is a gap between the EU and the US and Japan with regard to innovation and R&D. European investment in R&D is 0,8% of GDP less than the US, and 1,5% less than Japan. Emerging countries and new competitors like China, Brasil, India are improving their innovation and R&D performance at an unprecedented rate. The instruments suggested here to close this gap are: research infrastructures, mobility, European Research Council, ICT based research like FET projects which accentuate excellence as a base for improving competitiveness in science and industry. ii) Second, there is a gap between aspirations and delivery. The Lisbon Strategy ambition was to reach R&D investment level of 3% of GDP. A decade later and we still have the same target in the framework of the Europe 2020 Strategy. Member States can design their own R&D policies more evidence based with reasonable targets for Such national reform programmes should fit with the European Research Area, and implementation of the programmes should be carefully monitored. The completion of the ERA by 2014 should not be considered a rigid target date, rather a natural process of evolution, and should include harmonization of the legal environment of RDI, comprising soft laws as well. To remain competitive Member States must begin structural reforms: to improve the business environment; to enhance excellence of research and the capacity to innovate; to turn ideas into new products and services, meeting market demand; and to promote the growth and internationalisation of SMEs. The Europe 2020 strategy specified the objective of increasing R&D expenditures of the EU to 3% of GDP by The compilation of all provisional national targets indicates an aggregated level of 2.7 or 2.8% of GDP, which is below the target of 3%. At the same time, it represents a significant effort, particularly in the current budgetary context. Alongside the national reform programmes, there are several other instruments and measures which might help to decrease the existing gap: bilateral cooperation; use of soft laws, regulations; ERA nets; clusters and networks; European Technology Platforms. In addition, we believe that the development of EU-wide output oriented indicators would provide more information about the Member States and Europe s actual innovation performance, rather than depend solely on the traditional input indicators of R&D expenditure. 1
2 iii) Third, there is a gap between the Member States and between the different regions. The latest findings of the European Innovation Scoreboard published in early February, indicated that the Eastern and Central European countries, with the exception of Estonia and Slovenia, belong to a group of moderate innovators or catching up countries. With regard to participation in FP7, the Interim Evaluation of the 7 th framework programme identified the problem of underrepresented Member States in FP7. However the problem of low participation could be measured and interpreted in many ways, the special innovation system of the Member States and the benchmark factors play a significant role (GDP basis or share of contribution to EU budget versus FP7 returns to Member States). Similarly, the results of the interim report of FP7 show this gap: while the 12 new Member States contribute more than 7% to the total EU GDP, their share is only slightly above 5% when we look at the total FP7 contribution. These imbalances mean unexploited potentials and loss of diversity. Instruments and measures proposed to abolish the gap include, harmonization of the measures of the Structural Funds and the Framework Programme. Furthermore, the Structural Funds should be better exploited to develop the next generation of R&D funding instruments based on smart regional specialization. Simplification of the programmes and procedures should be considered as well. iv) Finally, there is a gap between research and development, and the exploitation of the results. In this respect, we believe the synergies between the FP and other programmes are extremely important e.g. programmes integrated in the EIT or programmes integrating the R&D measures of CIP, better use of Structural Funds, linkages with ERA instruments as JPI or the ESFRI Roadmap. To reduce the gap and include the whole innovation chain in the process, we need to strengthen the participation of industry, and in particular of SMEs. We also need to consider restructuring the next programme in the light of the position of the Competitiveness and Innovation Programme (CIP), the use of the elements of the knowledge triangle in the frame of the European Institute for Innovation and Technology, and last but not least, the well defined thematic priorities. Based on the points raised above, we would like to propose the following main elements for the Common Strategic Framework. 1./ Working together to deliver on Europe Innovation The Common Strategic Framework shall cover the whole innovation chain from fundamental research to the exploitation of results, while strengthening industrial involvement and moving towards a market-oriented approach. We welcome the new approach of the Commission which integrates the Competitiveness and Innovation Programme (CIP), and the use of the elements of the knowledge triangle in the frame of the European Institute for Innovation and Technology. The use of pre-commercial procurement and models based on the Small Business Innovation Research (SBIR) Programme could address the need to increase the level of innovation, to tackle major societal challenges, and to support high growth SMEs. Principle of excellence Excellence must underpin European research. The Framework Programme should therefore remain a programme where projects are selected on the basis of excellence and relevance. Structure From the Hungarian perspective, we need a structure which will helps to close or eliminate the gaps mentioned in the foreword. As such, we propose to consider some new elements as well in designing the CSF.
3 - Grand challenges and Key enabling technologies as horizontal priorities; Main focus areas: - Research Infrastructures, - Human resources and mobility ; - SMEs, Innovation and Regional potential ; - ERC frontier research. Funding Funding available for the next FP should be at least the same level as the last years of the FP7. 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. Funding for technology transfer should be addressed more strategically, in line with the development of the ERA and in anticipation of the reinforcement of Knowledge Transfer.We support the development of the European Patent Fund in the frame of the new ERA Framework. Funding of EU R&D policies should be refocused to stimulate lead customer contracts. ICT and the development of services are important in Europe. ICT and biotechnology contribute in particular to the generation of companies with high tech potential, including young innovative companies and their spin-offs. We suggest there is serious consideration of increased support for ICT and biotech. At the same time, Hungary would draw attention to the fact that financial resources allocated to the ERC are inadequate, given that the programme is heavily oversubscribed. We suggest consideration be given to increasing the funding of the ERC. Financing basic research is risky, but it is a necessary investment into the future. While allocating the budget for future programmes a combination of technology push and supply-side elements, as well as demand-driven elements, are necessary, with a view to technology foresight. Simplification Simplification should be regarded as one of the key political issues of the future framework for EU research and innovation funding. The simplification process has to be continued to facilitate the participation of future applicants, with a focus on industry and SMEs. We believe that only a serious reduction in the complexity of the present research funding structures will promote the cooperation necessary for better exploitation of existing and potential synergies of the programmes. A stronger focus on research and innovation results, rather than on financial and administrative issues, can contribute to better performance and enhanced competitiveness of European research funding policy. More extended use of lump sum or flat rate payments should be encouraged in FP, instead of the reimbursement of actual costs. A common interpretation of all participation rules, from application to reporting, would also be highly welcome. From the perspective of simplification, our main recommendations are: The vision should be of a common interpretation of rules from application to reporting, a growing trust based approach, and improved communication and information flow between participants and COM staff. Legal certainty as a major principle should be followed throughout the whole procedure of research and innovation funding. In future R&D programmes it is of 3
4 utmost importance that there are clear structures and processes regarding the interpretation and implementation of rules. Hungary suggests that future R&D programmes should better diversify the size, scope and composition of consortia, taking into account the specific needs of industrial partners, and SMEs in particular. Parallel to this, connections to higher education institutes should also be encouraged so that the concept of the fully functioning knowledge triangle is better supported. In order to enhance and to speed up technology transfer, the funding of demonstration actions should be emphasized more. We propose that two stage proposals are more widely used in the future, in order to ease application procedures and increase participation. Project size/type Hungary underlines the importance of increasing the number of small- or medium scale research projects, as these types of projects are much more manageable. This would enable greater participation from SMEs and also from Hungarian research institutions. Coordination and support actions (CSA) should be retained, as these projects can contribute to establishing collaboration with international partners. In addition, they serve as networking platforms and can provide opportunities for involvement in international projects. It should be noted, however, that this type of instrument is only beneficial and efficient if the project participants can exploit and transfer the knowledge gained during the lifetime of the project. More extended use of bottom-up approach should be encouraged in the thematic programs, making funding available not only for specific research fields. Bottom-up approach is also more suitable for SMEs. The support of contracted R&D through collective research schemes is strongly recommended, in particular to enhance the participation of SMEs without in-house R&D capacities. Funding a greater number of small pilot research projects in new and emerging scientific fields, with highly innovative content and risky outcomes, could be a possible new direction. A 2-3 phase toll-gate funding model for high growth SMEs should be considered. As an integral part of the knowledge triangle, the involvement of Higher Education in the strategy planning of the new Framework Programme is a priority. This would require special attention to the particular funding needs of such institutions. Higher education institutions, and also non-profit research institutions, need more favourable funding arrangements (90%) because of their serious cash-flow constraints. Low-performing regions Ambitious European objectives concerning research and innovation will only be achieved through the efforts and contributions of the whole of Europe. There must be an inclusive approach and common effort in order to drawing effectively on the potential and intellectual capital within Europe as whole. The present situation in the field of RDI, which has a direct impact on EU economic growth, does not fully reflect the capabilities and potential as far as the involvement of the low- performing regions in FP7 is concerned. This is clearly substantiated by different statistics and the recent report on the interim evaluation of FP7. It is important to identify hidden excellence at the micro level which could be promoted through bilateral cooperation, small sized projects, the NCP network, and other EU measures. Additional support through access to Commission expertise, know-how, monitoring and benchmarking of activities should be given to NCP networks to improve effectiveness. 4
5 For the low performing countries, it is extremely important to establish excellent national systems. This can be greatly assisted with the help of EU funds as complementary funding. The national strategies for international R&D cooperation should be in synergy with the use of the Structural Funds. In addition synergies between FP and Structural Funds could be better exploited. The Research infrastructure, Mobility, ERC programmes should play an important role in strengthening the scientific-technological capacities of the low performing countries, and so contribute to unlocking the full internal potential of the ERA. When evaluating proposals, the extent to which the proposal will contribute to building excellence and strengthening capacities should be taken into account under the criteria of impact. We would encourage increasing the number of smaller projects, as this may promote the participation of smaller countries and of low-performing regions. National Reform Programmes Europe 2020 strategy specified the objective of increasing R&D expenditures of the EU to 3% of GDP by The measures of the National Reform Programmes should be taken into consideration in the allocation of the funding by the CSF. A closely related factor in the EU's innovation performance is the share of fast growing, innovative companies in the economy. There is a need to remove obstacles to the growth of innovative companies. This can include improving framework conditions and access to finance. From the point of view of RDI development, we would focus on growth enhancing measures, giving special attention to ways of attracting private capital to finance growth. 2./ Tackling societal challenges Hungary supports that Joint Programming Initiatives shall play a significant role in tackling societal challenges. However, ERANET, ERANET+ programmes, which are more manageable in size and already proven their added value, need also to be maintained in the next Framework Programme. These schemes are favourable for low-performing regions as they can join these projects more easily, strengthening their involvement in the FP. The European Innovation Partnership is a new approach to involving Member States in coordinating and linking already existing measures, programmes along the whole innovation chain. We find it an important initiative and we look forward to the AHA pilot creating more efficiency, consistency and synergy among the programmes, at the same time as having simple governance structures. 3./ Strengthening competitiveness SME/industry participation In the frame of CSF we consider support for research based and market driven innovation as a prime principle. At the same time, a broad understanding of innovation, including adaptive and non technological innovation, is a precondition to the realization of CSF (most important are measures strengthening the innovation market, such as standardization and and the unitary European patent system). We have high expectations regarding the standards package, expected at the end of the year. Hungary suggests taking the elements of the whole innovation chain into consideration while designing the next framework programme, including initiatives which contribute to enhancing the international competitiveness of European industry. 5
6 The increased participation of industry, and especially of SMEs, in CSF should be taken into account during the planning of the programmes, bearing in mind the particular needs of industry and of the different types of SME. In order to attract more stakeholders from industry to participate in the next FP, we propose the following: - Awareness raising and providing more information concerning the framework programme and its instruments - Increasing the number of small and short-term projects, while making the mechanisms of longer projects more flexible in order to offer opportunities for SMEs to join as partners during the operations of the project. - Supporting the contributions of micro SMEs in university and in technology centers, or as members of Technology Platforms, in the development of cutting edge. There is also a need to improve opportunities for participation among spin off enterprises. - Setting up a guarantee fund for SMEs to facilitate their involvement. - Making better use of funding for RDI, facilitating companies access to financing, and promoting venture capital. In order to strengthen the lead customer model, generous bilateral (customer/supplier) grants should be provided, involving private sector customers in line with the State Aid regulation. We believe it necessary to provide financial resources from the budget of the next framework programme to co-fund national SBIR programmes for public sector customers. Support for SMEs should remain an important horizontal objective in the CSF. In addition to that, dedicated programmes which reflect the needs of different types of SMEs should be established. Giving support to high-tech R&Đ performing SMEs through the EUROSTARS programme shall be encouraged. Technology platforms and professional associations shall have an enhanced role in the future, and initiatives for carrying out collective research would be very welcome. In supporting close-to-market research, the positive experience with EUREKA- EUROSTARS model can be taken into account. We have to stress that industry plays an important role in the development of research infrastructures as well. The construction and operation of RIs are through the Member States. The return on investment is growth in scientific knowledge and training of highly skilled people, and through industrial engagement in the development of RI facilities. Industry participation initiates substantial local activity in terms of funds, manpower, SME supply etc. We suggest that the next FP should enhance and catalyse interaction between RI providers and potential industrial partners, and promote development of economic and financial analysis to explore the economic impact of this activity (multiplication effect, tax returns, man-power creation etc.). This can lead to the implementation of more efficient funding mechanisms for RIs and can better support governments in infrastructure decisions. The participation of industry is key to tackling societal challenges. Societal challenges will require cross-sectoral approaches e.g. between transport, ICT and energy sectors to address the climate and energy change challenges. This implies new kinds of cluster efforts. The European Innovation Partnerships (EIP) could provide a framework for such crosssectoral approaches to demand driven measures. The EIP could be able to mobilize crosssector partnerships in pre-commercial and innovation procurement to bring new solutions to the market. Key Enabling Technologies are important in solving societal issues, funding lines for KET might enhance SME and industry participation. Research collaboration between SMEs and regional R&D institutes and universities should be kept on the agenda. Successful cooperation in innovation requires a fine-tuned match between academic knowledge and the concrete practice of SMEs that is difficult to achieve. Most opportunities in this field seem to lie in science based university-firm linkages. 6
7 Especially in high-tech industries, an efficient vehicle for capitalizing on academic knowledge is through spin off enterprises with strong university connections. This directly creates innovative, knowledge-intensive SMEs. However, there is a need to strengthen researchers managerial skills to successfully run a business. SMEs are highly dependent on the skill level of their workforce for their innovative capacity, especially in the context of collaboration. In general, regional supply of skilled labor is probably the most important innovation support that universities can provide to SMEs. Attention should be paid to the European Institute of Innovation and Technology which was created with the aim of strengthening cooperation between the main representatives of the knowledge triangle, in order to effectively utilize the results of innovation processes. This effort should be emphasised in shaping the framework strategy as well. CIP Competitiveness and Innovation Framework Programme: For better linking innovation and research, better harmonisation and coordination between FP and CIP is necessary. This is especially important in the case of counselling SME s on FP7 participation, where there might be duplications in the current system. We agree that the most successful programmess of the CIP should be continued (e.g. the financial instruments in support of SMEs, the Enterprise Europe Network, and the market replication projects). We would like to highlight the role of financial instruments, as there is a growing demand for this type of support from SMEs. In the case of financial guarantees, administrative burdens should be reduced. Better orientation of RSSF towards SMEs is of utmost importance. EEN is a sufficient network for innovation services and it could be used more efficiently during the whole cycle, from research to innovation. It could be a potential actor linking transnational technology transfer offices at universities and industry. Instruments that we suggest to use more for the linkage of FP and CIP are EIT and KIC, JTI, EUREKA, RSFF. Concerning the pilot projects, we think that SME support should be strengthened (e.g. by an official NCP network) and rules of participation should be simplified. 4./ Strengthening Europe s science base and the European Research Area Research Infrastructures Research Infrastructures (RI) are key elements of European competitiveness. Hungary is committed to actively support the construction of the European Research Area (ERA) and contribute to innovation in Europe. These goals can only be achieved by the broad collaboration of all countries in the European Union on a basis of shared efforts and benefits. The development of a balanced network of European research infrastructures should be a key component of the next FP agenda. The implementation of the ESFRI Roadmap might require an enhanced and harmonised education and training scheme at graduate and post-graduate level. Both users and providers of infrastructure services should be trained for the optimal use of the facilities, such that the education scheme should help through mixing competencies and cross-fertilization. More synergies between Marie Curie programme and research infrastructures are recommended. How large-scale research infrastructures and industry could benefit more from grants in MC should be reviewed. Technologies on campus are growing more diverse, and the interdependencies between infrastructure systems and applications are increasing. Implementing and optimizing a successful infrastructure environment requires a high quality workforce of operators, managers and researchers. To develop and maintain a cutting edge infrastructure, colleges and universities have to expand the scale of infrastructure investment, therefore innovation in 7
8 university infrastructure management (and property management) is a necessary condition for the quality development of R&D. Improving efficiency, reducing management costs and eliminating management system deficiencies, regulating management practices and building infrastructure, equipment and ICT projects belong to the ultimate goals of infrastructure management. Maximising the use of existing research infrastructure capacity is also a top priority. A major component of RI development has been the support of facilities by the transnational access (TNA) instrument. It is crucial to continue this support, because it is a very efficient tool in encouraging researcher mobility, and thus European integration. RIs at national and pan-european level will enhance the necessary conditions for pooling talent, maximising resources and ensuring the best outcome of RI investments in a given region. At the same time, it is a way of optimising the geographic balance of infrastructures in Europe. The setting up of ESFRI Roadmap has inspired the elaboration of national roadmaps, which has particular importance in smaller countries and especially for new member states with access to structural funds for RI development. Along these lines, in Hungary a national research infrastructure register has been set up and a national research infrastructure roadmap is to be developed. This provides a solid basis on which to elaborate a national strategy, in anticipation of necessary funds, and to mandate agencies to advance integration at the European level. This can serve as a model for further harmonisation of the ESFRI Roadmap and national initiatives. For a more balanced construction of the RIs and to increase the involvement of smaller member states at affordable investment efforts, we suggest the creation of sub-units or outstations of a given large-scale facility, based on to competencies. The creation of a research infrastructure technology platform with a high-tech industrial base would promote local strengths, interests, resources and cost efficiency for various partners of the consortium. ERC/mobility: Providing the highest standards of human resources is a main consideration for strengthening competitiveness. Maintaining a high quality workforce is largely dependent on education, and higher education in particular. Therefore investing into the training of top quality researchers, capable of sharing their knowledge, is a crucial element to the European Science Strategy. For the same reason, higher education must partake more actively in building the knowledge triangle. Better synergy and coherence is needed between the ERC grants and the EIT KICs (Knowledge and Innovation Communities) programmes. High quality basic research is needed to create new initiatives and to have successful breakthroughs in innovation. ERC has succeeded in stimulating scientific excellence by supporting identification of new opportunities and directions in many fields of frontier research, its nature being investigator-driven and bottom up. Hungary considers it important to continue the ERC approach with the ongoing and already approved practices. Hungary is convinced that ERC should be strengthened and should go on supporting frontier research. But frontier research should not be the focus of only ERC. Marie Curie actions supporting researchers careers, and promoting the realisation of ERA, need as much attention. The academic sphere, due to its inherent nature, can be considered an ideal partner in frontier research. Higher education and universities have enormous untapped capacity to move forward science, particularly in knowledge transfer, a main element of the ERA initiative. Early-stage researchers should be provided with more opportunities to improve their research skills and to join established research teams. Experienced researchers would benefit from the opportunity to acquire new research skills. This broadening of their horizons also helps to broaden Europe s knowledge base and enhance career prospects. The design of new ERC instruments should be continued, and focus on making a greater contribution to the Innovation Union and to solving the Grand Challenges. 8
9 We are convinced that in our technology oriented era frontier research has a different relationship with competitiveness than in previous times. For this reason we support the possibility of establishing an ERC Proof of Concept scheme, constituting a bridge to industry. It is necessary to support the realisation of the aims of the IU, with special regard to the formation of an R&D policy at European level, which would be attractive for industry. Under the Marie Curie Actions, we would support re-launching of the transfer of knowledge programme. This staff exchange programme would enable transfer of knowledge in key research areas, between two or more institutions from different regions of Member or Associated States. This could enhance the involvement of low-performing countries. Hungary would support enhancing the significance of the reintegration/career integration scheme within the Marie Curie Actions, as this scheme can efficiently contribute to encourage researchers who have carried out their main research activities in a third country for a considerable period of time, to return to Europe. This way the research base of Europe can be further strengthened. Synergies between Marie Curie programme and research infrastructures are recommended, the potential of MC grants for industry should also be better exploited. Mobility could be further encouraged at global level to enhance the general attractiveness of Europe as a major hub for global brain circulation, with positive effects on R&D and innovation performance in the EU. The Hungarian position has been prepared by the Ministry for National Economy in consultation with the National Innovation Office, Hungarian Academy of Sciences, Ministry of National Resources, and Ministry of Foreign Affairs. The results of national consultation on the future FP with the research community and stakeholders has also been taken into consideration. 9
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