Consultation on the Future Framework for Research and Innovation Funding

Transcription

1 C O N S U L T A T I O N R E S P O N S E Consultation on the Future Framework for Research and Innovation Funding A response from Alcatel-Lucent to the European Commission MAY, 2011 MANAGER EU AFFAIRS ALCATEL-LUCENT GUILLAUME.MASCOT@ALCATEL-LUCENT.COM

2 1 Introduction More than ever, the EU faces the challenge of finding new ways to boost its economic growth. As public debt burdens make fiscal stimulus increasingly difficult, economic growth will be the key factor for an exit from the current crisis, and will play an important and long-term role in bringing the EU back to a road of economic and fiscal sustainability. As a major driver of growth, innovation must play a central role in the EU s economic strategy. The EU s existing approaches to research & development provide a good basis for this, but innovation performance remains below potential. Some important adjustments are needed to give the required boost to innovation activity in Europe. Companies large and small play a crucial role in turning research into innovation by ensuring that Europe s research and development results are applied in ways that stimulate economic growth. The EU R&D Framework Programmes have played an important role in stimulating knowledge creation and innovation in Europe. The share of company participation in EU Framework Programmes continues, however, to decline despite this important role: the private sector only accounts for about 25% of recipients of EU research funding under the 7th Framework Programme (FP7), even lower than under its predecessor, FP6 (30%). Despite some major strengths of the Framework Programme s architecture and approach, companies face significant difficulties. Amongst other things, complexity, slowness, lack of flexibility, burdensome administrative procedures, and an underemphasis of applied research and development and demonstration projects with industrial relevance, all reduce the attractiveness to business of participation in the Framework Programme. As a result, FP7 s capacity to contribute to innovation is well below potential. Overall expenditure on R&D in the EU continues to stagnate just below 2% of GDP, missing the target of 3% set in 2000 and now re-iterated in the Europe 2020 Strategy. Total R &D expenditure in the EU has also stayed below that of other major global economies like the US (2.76%), Japan (3.44%) and South Korea (3.21%). China s total share of R&D spending (1.44% of GDP) exceeded the share of 14 EU Member States. These trends must be addressed if innovation is to become a growth driver for the EU. Response from Alcatel-Lucent 2

3 In the light of the future discussion on the financial perspective the European Commission and the Member states have to create the right incentives and strongly promote R&D to allow Europe staying at the edge of knowledge based economy. We, therefore, urge the European Union to dedicate strong support to R&D in the future financial perspective. 2 ICT a strategic sector for the whole economy Today the worldwide ICT market has reached 2000bn and is still growing at 4% per year. Europe represents 34% of this market 1. Over the past ten years, a quarter of the EU GDP growth and 40% of EU productivity growth are due to ICT 2 developments. The sector is making an increasingly large contribution to the European Union s economy and differences in economic performance of the industrialised countries are closely related to the level of ICT investment and use. The ICT sector currently represents 12 million jobs in Europe and generates 6% of the EU GDP 3. At EU-27 level, each worker in the sector contributes 105,000 to the economy each year. This is more than twice the EU average of 50,000 4 across all sectors. In addition this sector is driving innovation and competitiveness in all other sectors of the economy. The European ICT sector is a powerful driver of sustainable growth and employment. It plays a major role in boosting innovation, creativity and competitiveness across all industry and service sectors. ICT represent a significant share of total value-added in European industrial strengths such as automobile (25%), consumer appliances (41%) or health and medical (33%), the lack of investment in ICT R&D is a threat to the entire European manufacturing and service sectors. The ICT sector has been recognised as a strategic investment sector with investment means for the US, Japan but also China and India. This leads to a bi-polarisation between the US and Asia of ICT research affecting the technology leadership of Europe (HW, content, Services and applications). The EU is in 3rd place for industry investment which is having an impact on its innovation capacity and strongly affecting society. Europe should therefore consider the ICT sector and its research as strategic and key in term of future growth and competitiveness. ICT research and Innovation have to be strongly financially supported and stimulated. 1 European Competitiveness Report 2006; EITO EU press release Reference. Reference: MEMO/05/184 3 EU press release Reference: IP/09/397 Date: 13/03/ CEBR report. The changing economic impact of the telecommunications sector in the EU. Brussels Dec Response from Alcatel-Lucent 3

4 Moreover ICT research has to be a distinct field of research and should not be diluted in various challenges 3 General Framework The next Framework Programme should strengthen the EU s innovation potential. Greater emphasis should be given to the whole value chain from basic research to innovation, demonstration and market deployment stages. The active participation of companies in this process should be encouraged as a way to strengthen the capacity of EU R&D to drive innovation activity. World-class research excellence leading to high-quality output is more likely to produce innovation if the research also aims for global industry relevance and impact. The next Framework Programme should aim to reinforce EU excellence in areas with industry relevance. Greater goal-orientation and flexibility to adjust to changing circumstances would encourage business participation and lead to world-class research excellence in areas of importance for the European economy. The Framework Programme s objectives should focus on the Grand Challenges as public, private and scientific interests broadly coincide in these areas. However, greater prioritisation is recommended, and a more explicit overall objective of creating sustainable economic growth and promoting European competitiveness would further increase industrial and societal relevance. R&D funding should support the entire innovation process, from the initial stages of development of new technologies all the way through to demonstration projects with an emphasis on rapid commercialisation (deployment). Despite an increase of the total budget of FP7 and in particular for the ICT part, it is also important to notice that the numbers of priorities and themes covered by the Framework Programme have also increased. The European Union is greatly recognised for its diversity but excellence should not be diluted in various fields of research. Europe should probably focus more on key R&D priorities with high impact on the economy and the society such as ICT. Concentrate resources around fewer, coordinated efforts with a sufficiently large critical mass to significantly impact a small number of priority research areas. The Framework Response from Alcatel-Lucent 4

5 Programme s management capacity should correspond to the number of priority goals, and funding adequacy must be ensured. The principle of subsidiarity, applied in many other areas, may be a useful guiding concept in determining where EU-level research focus can produce most value. In today s model proposals are evaluated based on the completion of stated goals. Programmes should be funded based on bold proposals. To encourage more disruptive research we would suggest a new model where the project is funded based on the quality of the idea and the progress is monitored through a periodic peer review process. If substantial progress is not being made the incremental funding for the next phase is cut and the project is terminated. This allows programs to be bold and disruptive while being audited and responsible. It also allows researchers to really propose stretch goals with the benefit that even if they are not fully realized we have gone much farther than if we had started with an incremental objective. There are many examples from industry as well as governmental funding where creative research is done in the form a competition for a solution of a grand challenge (improve algorithm by 10%, first to record images from the moon, etc.) where the winner is awarded a monetary prize. The model varies from full funding at the end to incremental funding throughout the research project. In either case institutions, corporations, and individuals are drawn towards large and public challenges. The spontaneity and insight into these solutions are hard to predict a priori. As stated earlier, Europe should promote the participation of the industrial sector in R&D programmes as it is an integral part of the eco-system. In addition to the principles developed above, Alcatel-Lucent is also asking for an increase in industrial relevance of EU research programmes by: involving business more strongly in a transparent process that deals with priority-setting, evaluation, and the development of calls removing constraints that restrict formation of consortia best suited to deliver results, e.g. by allowing smaller project teams with reduced requirements for regional coverage emphasising technological excellence and the potential market impact in the selection of projects with industry relevance, explicitly furthering the detailed qualification and quantification of the expected impacts excellence and impact should be key criterion in the projects evaluation giving preference to radical and disruptive innovations over mainstream projects developing a generous Venture capital programme including higher funding schemes, even up to 100% Response from Alcatel-Lucent 5

6 allowing for a high flexibility 4 Better coordination between EU and member States level Today we are confronted with a growing number of instruments in the European landscape. We recommend enhanced operation and synergies between EU, trans-national and national instruments with a clear recognition of their respective contribution. Moreover, financing similar research programs in different countries is not necessarily a waste of resources because research is essentially a random process and it is important to spread risks and to maintain competition. In that sense, industry needs European AND national fundings. However it is essential that these programmes at EC, trans-national (e.g. EUREKA) and national levels, their outcomes and their return on experience are known and shared at EU level, in order to reduce fragmentation and as much as possible the duplication / not invented here effects. Instruments like EC EIT KICs may be appropriate to ensure the development of tight connections between these initiatives, through specific catalyst actions. It is important that Member states develop a common vision and share their strategic research agendas. Several actions can be considered: from exchange of best practices to launch of coordinated calls and joint programming. Nevertheless experience shows that cofinancing instruments make EU-wide projects much more burdensome on an administrative level as it turns out in a significant number of cases that one member state is not able to provide the national financing part of a successfully rated EU project. Support of the EC to member state initiatives (through joint programming initiatives) would be beneficial on the condition that the EC rules do not add an extra bureaucratic level to contract management and that funding rates of the member states would not be decreased by the contribution provided by the Union. If co-financing should be used in future research funding projects, then it is absolutely necessary that EU and member states have agreements in place that ensure adequate budget allocation and aligned decisions on both sides. 5 European Technology Platforms (ETPs) Response from Alcatel-Lucent 6

7 The ETPs have produced industry-driven Strategic Research Agendas (SRAs), which already have had their impact on the Work Programmes of FP7. Furthermore, as they are now increasingly serving as pan-european references for national and even regional programmes, the ETPs are contributing to the ERA objectives. In this context, Alcatel-Lucent wishes to particularly highlight the 8 ETPs in the ICT domain (ARTEMIS, NET!WORKS, ENIAC, EPoSS, EUROP, NEM, NESSI, Photonics21). The ETPs should play a key consultant role to the European Commission for European strategic research including exploring tools (regulation and funds) in order to position future technologies which will make European citizens leading users of ICT worldwide. ETPs expertise should be used as tool for new sources of financing including structural funds, public procurement and developing leading edge markets on a European and then global scale. On the operational side ETPs should have a consultant role for some project evaluation related to new and long-term vision as the Next Wireless Generation or the Internet of the future for example. ETP must be a place where industrial projects are synchronized, and where pre-standardization is discussed (not to replace already existing standardization bodies such as ETSI). The current discussion on the future of Innovation may represent the possibility to redefine the scope and actions of the ETPs. As illustration, in the context of the Future Internet developments, one of the possible orientations could be to develop the European Future Internet Alliance (EFIA) with (1) the ETPs in a first step becoming specific working groups/tracks of EFIA and (2) the current EC and ETPs events like Future Network and Mobile Summit, ServiceWave, NEM Summit becoming specific tracks attached to the Future Internet Assembly (FIA). EFIA could allow the creation of an innovative eco system for Future Internet adoption in Europe by developing very tight connections between ICT stakeholders and non ICT actors (usage areas / vertical applications). The setting-up of EFIA would rely on one single clear governance model (Board, Steering Committee) avoiding multiplication of the ETPs governing bodies. The rationalization of events (e.g. two Future Internet weeks per year including all thematics) would ensure critical mass and avoid loss of efforts, energy and money in participating to too many events tackling too repetitive issues. This will allow to have a more holistic approach and could address further analysis of the societal challenges that Europe is facing. 6 Complementarities of funding and new tools Response from Alcatel-Lucent 7

8 Cohesion policy has definitely a role to play in Europe to promote innovation. Structural Funds can be used more to stimulate regional R&D activity and public procurement of new technologies and R&D from the private sector. The capacity of recipient countries to draw on Structural Funds for R&D purposes should be improved. As first customers and early adopters, public sector entities can support the development of pre-commercial prototypes, test them in a live environment and contribute to the perfection and market uptake of their commercial applications. As a significant source of demand in the EU, public procurement can thus drive the development and implementation of new technologies, including through public-private partnerships (PPPs). Public procurement should be the channel through which the public sector leads by example, ensuring that the highest standards and latest technologies are used in public projects. However, this type of public procurement should be funded separately from the future Framework Programme. The EC and Member states should explore the use of public procurement for R&D and innovation as extensively used in the United States. As the public procurement is a national responsibility, the EC should promote possible joint pre-commercial public procurement between member states to ensure a critical mass and acceptance. 7 Structure and processes of the Framework programme It is important to introduce a systemic approach. The possibility to cover the current ICT challenges in a systemic way, without being constrained by the technical silos and respective EC organizational constraints. As illustration, the current operation structured around EC organization and the related Work Programme clustered in Strategic Objectives prevented addressing cross-areas technologies (e.g. Services and Network) and cross-domains issues (e.g. ICT technologies and societal challenges - applications usage areas). Under each programme, individual projects should have more flexibility to adapt to market developments, thus retaining their relevance. Research projects should enjoy greater flexibility in the pursuit of their top-level key performance indicators (KPIs) by allowing project work plans to be adapted to market developments. It should also be possible to easily implement smaller projects focused on individual R&D stages or with a limited number of partners. Response from Alcatel-Lucent 8

9 Some resources should be specifically assigned to short-term projects focusing on technology, research and innovation challenges that can be implemented swiftly as market opportunities emerge. 8 Modalities and rules for participation Industry participation in the future Framework Programme should be boosted by reviewing some of the modalities applied under FP7. Companies struggle with the high level of complexity of the existing R&D and innovation landscape, as described above. In addition, they encounter a high level of complexity at all stages of the FP7 process: multiplicity of calls and information sources, onerous applications for funding, cumbersome contract negotiations, differentiation in interpretations of contractual rules, burdensome administration and reporting requirements, oversized consortia, and programme fragmentation. The EU s innovation capacity can be strengthened by addressing these multiple levels of complexity in ways that will encourage greater industry involvement. Many proposals have already been made in this area. We would specifically highlight the following: Streamline application and approval processes, so that a project can start at the latest six months after the submission deadline. Apply more flexibility in cost accounting and reporting. Beneficiaries should be able to use standard reporting practices (e.g. approved national reporting practices) or company accounting rules accepted by external auditors. Reporting requirements should be less detailed, leave more flexibility in choosing the most appropriate cost model, and their timing be based on achievement of milestones rather than fixed dates. Streamline official documentation. The number and size of official documents could be reduced. This could in part be achieved by harmonising the rules governing the various instruments of the R&D and innovation landscape, and by reducing the number of funding instruments available. To avoid misinterpretation exact definitions e.g. what eligible and actual costs are, deviation bandwidths for average costs, etc. must be included in the official contract documents, e.g. Annex II and NOT in the, e.g. Financial Guidelines which are not part of the Grant Agreement. Response from Alcatel-Lucent 9

10 Improve coherence in the implementation of rules and principles governing the different instruments (especially across different Directorates-General) and reduce the discretionary interpretation of project officers negotiating mandates. Take a more trust-based approach that is less risk-averse. The threat of personal financial liability of Commission civil servants leads to an excessively risk-averse approach. Yet innovation implies a certain degree of risk-taking. Risk-taking should also be supported by ensuring that project partners will not be required to return funding under the future Framework Programme once it has been awarded and approved, with the understanding that all remedies should remain available in cases of fraud. Continue to ensure budget clarity through a clear division of the annual budget for each thematic priority and for each call. The time for payments after the submission of project reports should be shortened (this could be supported by streamlined reporting requirements). Increased market-orientation of the future Framework Programme will require a review of Intellectual Property Rights (IPR) provisions governing the collaborative research. In general, IPR provisions in the contract with the funding authority should remain flexible, should be neutral and not endorse the preferred options of one or another group of participants in the Framework Programme, and aim to ensure predictability. For global companies, the treatment of subsidiaries in third countries is an important issue. These subsidiaries should not be treated as third parties. Arrangements regarding IPR ownership and access rights should be subject to contractual freedom between the participating entities. 9 International cooperation An opening of the European Research Area (ERA) to the world should reflect the value of intellectual property, justified commercial interests and the opening of opportunities to non-eu countries should be undertaken only where a reciprocal opening is offered by collaborating countries or regions. Europe should take the benefit of its excellence and its position in the Global Research Area. Bilateral cooperation could be implemented with high research intensity area in order to become a research hub and maybe attract more researchers. Response from Alcatel-Lucent 10

11 10 e-infrastructure The Research Infrastructures part of the successive Framework Programmes has traditionally been almost entirely used for public research infrastructures. The challenge is to increase participation of industry, either as a supplier of private research infrastructures in an Open Innovation setting, or as a user of public research infrastructures. This would benefit basic research as well as industrial research. 11 Skills and Careers (Marie Curie) Skills and career development of researchers should be promoted to consolidate European excellence in research, and support should be provided so that researchers can use their expertise in Europe instead of having other countries benefiting from their training. In this respect we fully support the establishment of an European Industrial Doctorates programme. Response from Alcatel-Lucent 11