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Uddannelses- og Forskningsudvalget 2014-15 (1. samling)
FIV Alm.del Bilag 36
Offentligt

MEETING OF CHAIRPERSONS OF COMMITTEES ON EMPLOYMENT, RESEARCH

AND INNOVATION

Session IV – Research: an engine for growth

Concept note

Europe’s position in the world economy is rapidly changing. By 2050, Europe’s

share of world GDP

could be much less than its current 22.9% (2012 figure).

The European Union still accounts for

the largest share of worldwide exports,

equal to 15.5%.

As stated by the European Commission in its communication of last June,

Research and innovation as sources of renewed growth,

Europe is well placed to

capture the next growth opportunities. With the largest internal market in the

world it is home to many of the world's leading innovative companies, and has a

leading position in many fields of knowledge and key technologies such as

health, food, renewable energies, environmental technologies and transport. It

has an invaluable capital stemming from its highly educated workforce and its

leading talent in cultural and creative industries. However, efforts are still required

to ensure the smooth functioning of its single market, to improve the framework

conditions for businesses to innovate, and to speed up investments in

breakthrough technologies in fast-growing areas.

According to the Commission, to reap the benefits from these advantages in

terms of economic prosperity and quality of life, governments across Europe

need to take an active stance in supporting growth enhancing policies, notably

research and innovation.

As to funding for research, the

Innovation Union

– one of the flagship

initiatives of the

Europe 2020

strategy – has set a target of spending 3% of GDP

on research and development for the Member States (1% in public funding, 2% in

private investment) by 2020, with the goal of creating 3.7 million jobs and

increasing annual GDP by about €800 billion. In the

communication

“State of the

Innovation Union 2012 – Accelerating change”, presented on 21 March 2013, the

Commission reported that public and private investment in R&D grew until 2011

(to 2.03% of GDP) but subsequently declined.

In line with the Europe 2020 strategy, one of the EU’s goals is to create the

necessary conditions to make EU industry competitive, creating jobs and

supporting growth. One of the levers for achieving this goal involves exploiting

the industrial potential of innovation and research policies most effectively.

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For that purpose, one of the three pillars of

Horizon 2020

– the main EU

programme for financing research and innovation, with over €77 billion in seven

years budgeted (from 2014 to 2020) – is so-called

"Industrial Leadership”,

the

general goal of which (with €17 billion in funding allocated) is to make Europe a

more attractive location to invest in research and innovation, provide more

investment in key industrial technologies, maximize the growth potential of

European companies by providing them with adequate levels of finance and help

innovative European SMEs to grow into world-leading companies.

Furthermore, the approach of using public-private partnerships based upon a

contractual agreement between the Commission and industrial partners aimed at

offsetting the high risk for private actors of investing in research and to “join

forces with the private sector […] to achieve results that one country or company

is less likely to achieve alone”,

is itself an innovation under the Horizon 2020

programme.

The data show that many of the recent productivity improvements are the

result of innovation and that, on average, the countries that invested most heavily

in research and development prior to and during the crisis are those that have

demonstrated the greatest resilience during the recession.

In recent years companies have begun to invest in a wider range of intangible

goods (also going beyond the traditional research and development sector),

specifically in data, software, patents, design, new organizational processes and

specific entrepreneurial expertise. This is referred to as knowledge-based capital

(KBC).

Investments by companies in KBC help stimulate growth and productivity, as

shown in studies conducted for the European Union and the United States:

investments by companies in KBC have contributed 20% to 34% to the average

increase in workplace productivity (OECD).

Based on the foregoing, it is necessary to consider:

a) whether the policies implemented by the European Union are appropriate

for promoting research activities, focusing especially on those that can

serve as lever to foster European competitiveness and growth;

b) what solutions and experiences have been found – including in the form of

incentives and subsidies – to be best suited to encouraging an increase in

the share of GDP allocated to research and development;

c) within the context of the various national experiences, which research

projects and programmes have been most effective in terms of generating

returns and reutilisation by the productive sector;

d) what role should public finance play in allocating adequate returns to be

used for research and what measures can be taken to foster public-private

partnerships with greater involvement of private-sector capital.