Definitions proposals for draft Framework for state aid for research and development and innovation Document Original text Proposal Notes

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1 Definitions proposals for draft Framework for state aid for research and development and innovation Document Original text Proposal Notes (e) 'applied research' means Applied research is experimental or theoretical work industrial research, experimental undertaken to acquire new knowledge of the underlying development, or any combination of foundation of phenomena and observable facts, directed both; primarily towards a specific practical aim or objective Paper of the services of DG Competition containing a draft Framework for state aid for research and development and innovation Note: Applied Research corresponds to Technology Readiness Levels (TRL) from 1 to 2 (Definition is compiled from OECD Frascati Manual) If we want to describe the whole cycle of the development of new product (as it could be presumed from this attempt of definition) we have to include in this cycle all levels of TRL system from 1 to 9. For this purpose the following definition (or something similar) could be proposed: New Product Development Cycle is comprised as the planned activities directed to acquiring the knowledge and use this knowledge for the developing of new products, and the introductions of such products to the market. Note: New Product Development Cycle corresponds to Technology Readiness Levels (TRL) from 1 to 9 Explanation: the whole cycle of the development of new research based products encompasses both types of R&D activities research ( Applied Research ) and technological ( Experimental Development ) Even accepting erroneous definitions (see below), of the document under consideration, this definition is absolutely illogical: Industrial Research includes modelling, prototyping, piloting, market validation activities and applied research as well (it encompasses the whole cycle of the development of new product), when Experimental Development includes the same activities (modelling, prototyping, piloting, market validation activities). Furthermore, statement any combination of both is misleading. How could two overlapping activities be combined? 1 1

2 2. (j) 'experimental development' means acquiring, combining, shaping and using existing scientific, technological, business and other relevant knowledge and skills with the aim of developing new or improved products, processes or services. This may also include, for example, activities aiming at the conceptual definition, planning and documentation of new products, processes or services. Experimental development may comprise prototyping, demonstrating, piloting, testing and validation of new or improved products, processes or services in environments representative of real life operating conditions where the primary objective is to make further technical improvements on products, processes or services that are not substantially set. This may include the development of a commercially usable prototype or pilot which is necessarily the final commercial product and which is too expensive to produce for it to be used only for demonstration and validation purposes. Experimental development does not include routine or periodic changes made to existing products, production lines, manufacturing processes, services and other Experimental Development is systematic work, drawing on existing knowledge gained from research and/or practical experience, which is directed to producing new products, or to substantially improving those already produced. (additionally see definition of the term Product ) Note: Experimental Development corresponds to TRL from 3 to 9 TRL system levels from 5 to 8 correspond to the second part of the Experimental Development activity and could be defined as Technology Demonstration stage (see below) (It is suggested modified definition from OECD Frascati Manual). Explanation: Experimental Development is the complex of the activities aiming the development of new products and introducing them into market. These activities use scientific, technological, practical and business knowledge and are executed using technological methods. Scientific Research methods are not used in Experimental Development. Experimental Development according to this definition includes two main stages of the production of the new products for the market: 1) development of the product (TRL 3-5) including the finishing of the product prototype; 2) preparation of the product for the market (TRL 6-9) including demonstration, piloting and market validation processes Definition suggested in the document is more descriptive than defining which is dangerous for legal document because could be interpreted in many ways. All examples and explanations have to be transferred to manuals or vademecums. 2

3 operations in progress, even if those changes may represent improvements. 15 Note: Experimental development usually corresponds to Technology Readiness Levels Technology (Product) Demonstration is the second stage of Experimental Development activity comprising the processes encompassing all activities related to the preparation of the new product or significantly improved existing one for its introducing into market. Note: Technology (Product) Demonstration stage corresponds to TRL from 6 to 9 The definition could be used if we want to define separately the second (the last) stage of Experimental Development which corresponds to the TRL from 6 to 9 Explanation: Technology demonstration activities may include product prototype demonstration, improvement, piloting and market validation processes encompassing standardization, certification and metrology demands. 3. Definition is absent Product (as economy category) the object made as a result of work or attempts which could be placed on the market for the satisfaction of desires and needs 4. 'fundamental research' means experimental or theoretical work undertaken primarily to acquire new knowledge of the underlying foundations of phenomena and observable facts, without any direct commercial application or use in view 16 Note: Fundamental research usually corresponds to Technology Readiness Level 1. Explanation: Product in that perception may comprise technology, material, device, article, process, system, service, solution of human or social problems, etc. 'fundamental research' means experimental or theoretical work undertaken primarily to acquire new knowledge of the underlying foundations of phenomena and observable facts, without any direct commercial application or use in view Note: Fundamental Research does not fall within the scope of the technology management system of TRL because this system is related to the human s activities for solving its problems but not for learning about the laws of nature. Defining the Product in the broadest meaning as all economically valuable objects made by humans eases the understanding of all types of products and clear definition and distinguishing of all stages of innovation cycle. Fundamental Research according to definition in the document (which is absolutely clear and correct) is undertaken for to acquire the knowledge without any direct commercial application or use in view, i. e. could not correspond to the technology development i. e. to the any Technology Readiness Level (see also the definition of the term Technology ) 3

4 5. 'industrial research' means the planned research or critical investigation aimed at the acquisition of new knowledge and skills for developing new products, processes or services or for bringing about a significant improvement in existing products, processes or services. It comprises the creation of components parts to complex systems, and may include the construction of prototypes in a laboratory environment or in an environment with simulated interfaces to existing systems as well as of small scale pilot lines to test and validate the manufacturing method performance, when necessary for the industrial research and notably for generic technology validation Note: Industrial research usually corresponds to Technology Readiness Levels 2-4. Proposal: Do not use the term Industrial Research and instead of this term to define the first stage of Experimental Development, i. e. Technology (Product) Development (see below) 6. Technology (Product) Development is experimental development activities aimed to the development of new product or significant improvement of the existing one and resulting in the producing of the prototype of the new product Note: Technology Development stage corresponds to TRL from 3 to 5 7. Definition is absent Technology is the making, modification, usage, and knowledge of tools, machines, techniques, crafts, systems, methods of organization, in order to solve a problem, improve a pre-existing solution to a problem, achieve a goal or perform a specific function. 8. Definition is absent Research studious inquiry or examination; especially: investigation or experimentation aimed at the discovery and interpretation of facts, revision of accepted theories or laws in the light of new facts, or practical application of such new or revised theories or laws 2. In the EU regulation the term Industrial Research is still valid and defined as Applied Research according to OECD Frascati Manual. Actual (in this document) definition encompasses very broad scale of activities from applied research to all experimental development activities, i. e. encompasses all R&D activities. This actual definition (description) does not correspond to the statement in the note that these activities could be assigned to the TRL 2-4 because prototyping, piloting and validation are the activities typical for higher levels of TRL system (5-9) Following the logic of clear definition of all stages of innovation cycle those early levels of TRL system could be defined as Technology (Product) Development stage (first part of Experimental Development activities) Attention: proposed definition is encompassing all technologies including non-technological technologies as well (social, cultural and humanitarian technologies) 2 4

5 Explanation: (Scientific) Research includes Fundamental Research and Applied Research activities are aimed at acquiring of scientific knowledge. Research activities could be executed using exclusively scientific methods when Experimental Development activities are aimed at the development of new products and are executed using technological methods. 5

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