Prepared for the IIPS Symposium onGlobalization andJapan’s Science and Technology Strategy
19 – 20 November 2007
TokyoSession 1Monday, 19 November 2007

The European Research and Innovation Area:
Setting the pace for global Europe

Philippe de Taxis du PoëtEuropean Union - Delegation of the European Commission to Japan

The European Research and Innovation Area:
Setting the pace for global Europe

In a changing world characterised by the accelerating globalisation of research and innovationand the emergence of new scientific and technological powers, the European Research andInnovation Area is more than ever a cornerstone for a European knowledge society. Such asociety is one where research, education, training and innovation are fully mobilised to fulfil theeconomic, social and environmental ambitions of the EU and the expectations of its citizens.
The European research and innovation area concept combines: a European "internal market" forresearch, where researchers, technology and knowledge freely circulate; effective European-level
coordination of national and regional research activities, programmes and policies; and initiatives
implemented and funded at European level. The European Research and innovation Area that thescientific community, business and citizens need should have the following features:––––––

An adequate flow of competent researchers with high levels of mobility between institutions,disciplines, sectors and countries;
World-class research infrastructures, integrated, networked and accessible to research teams
from across Europe and the world;
Excellent research institutions engaged in effective public-private cooperation andpartnerships, forming the core of research and innovation 'clusters' including 'virtual researchcommunities', mostly specialised in interdisciplinary areas and attracting a critical mass ofhuman and financial resources;
Effective knowledge-sharing notably between public research and industry, as well as withthe public at large;
Well-coordinated research programmes and priorities, including a significant volume ofjointly-programmed public research investment at European level involving common
priorities, coordinated implementation and joint evaluation; andA wide opening of the European Research Area to the world with special emphasis onneighbouring countries and a strong commitment to addressing global challenges with
Europe's partners.

Some progress has been made since the concept was endorsed at the Lisbon European Council in2000. The European research and innovation area has become a key reference and many
initiatives have been launched in Europe over the last years, notably:–The EU Research Framework Programme is explicitly designed to support the creation ofERA and its funding has been substantially increased. New initiatives launched inconjunction with the 7th Framework Programme (2007-2013), such as the European ResearchCouncil, will have an important impact on the European research and innovation landscape.
The future European Institute of Technology also has the potential to play a substantial role increating world-class 'knowledge and innovation communities'.

–Initiatives have been launched to improve the coordination of research activities andprogrammes. They include the European Technology Platforms, through which industry andother stakeholders develop shared long-term visions and strategic research agendas in areas of1

business interest, and the bottom-up 'ERA-Net' scheme which supports the coordination ofnational and regional programmes.
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Policy coordination is addressed through the 'open method of coordination' and the use ofvoluntary guidelines and recommendations. This is stimulating a process of debate andreforms at national level, which has resulted in all Member States setting national R&D
investment targets in the context of the overall EU 3% of GDP R&D investment objective
and taking measures to improve their research and innovation systems.

–The EU has adopted a 'broad-based innovation strategy', which will improve the framework
conditions for research and innovation5. In this context, a modernised Community framework
for State aid for research and innovation6 and guidance for a more effective use of tax
incentives for R&D were adopted in November 2006, a European patent strategy is being
proposed to overcome the deadlock on the Community patent8, and initiatives are being
prepared to support the emergence of European 'lead markets' in promising technologyintensive sectors.

–EU cohesion policy and its financial instruments - the Structural Funds - give strong priority
to the development of research and innovation capacities, particularly in less developedregions. Together with the priority given in most Member States' internal policies, this canhelp the whole of Europe to participate in and derive full benefit from the European ResearchArea.

These initiatives are valuable steps on which further progress can be built. But much groundwork remains to be done to build the European research and innovation area, particularly to
overcome the fragmentation which remains a prevailing characteristic of the European publicresearch base.
–––––Researchers still see career opportunities curtailed by legal and practical barriers hampering
their mobility across institutions, sectors and countries.
Businesses often find it difficult to cooperate and enter into partnerships with research
institutions in Europe, particularly across countries.
National and regional research funding (programmes, infrastructures, core funding ofresearch institutions) remains largely uncoordinated. This leads to dispersion of resources,
excessive duplication, unrealised benefits from potential spillovers, and failure to play theglobal role that Europe's R&D capability would otherwise allow, notably in addressing major
global challenges.
Reforms undertaken at national level often lack a true European perspective and transnationalcoherence.
Fragmentation of public research diminishes Europe's attractiveness for business as a locationfor R&D investment.

A sense of urgency in revisiting the European research and innovation area stems from the factthat globalisation of research and technology is accelerating. These developments bring newopportunities for Europe and the world. Science knows no boundaries and the issues that researchand innovation are asked to deal with are increasingly global. The European research andinnovation area should therefore be open to the world. A coherent approach towards international
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S&T cooperation, under the banner of global sustainable development, can assist in building
bridges between nations and continents. A success story such as ITER shows that Europe canhave the will and capacity for leadership to address global challenges with partners around theworld. In other areas such as the environment, Europe is increasingly involved in globalinitiatives.
In recent years the response to globalisation has moved to the heart of the EU policy agenda. The
relaunch of the Lisbon Strategy in Spring 2005 put Europe back on track to face up tocompetition as the touchstone for creating growth and jobs in the modern global economy. In
their informal meeting at Hampton Court in October 2005, the Heads of State and Government
set out the key challenges posed by globalisation in areas like innovation, energy, migration,
education and demography.
At the Spring European Council in 2006, it was agreed to move up a gear in the work of therenewed Lisbon strategy for growth and jobs to spearhead the response of the European economy.
The Lisbon strategy for growth and jobs can continue to provide the backbone for a European
approach to globalisation. The four priority areas agreed by the 2006 Spring European Council
provide the right frame for the Strategy at both EU and national level:—More R&D and innovation: Globalisation has stepped up the pace of change fortechnology and for ideas. The emphasis in this area has been on increasing R&D
expenditure and Member States are making progress towards the 3% GDP target. All
Member States have set national targets; the challenge for public and in particular theprivate sector is to meet them. But investment alone will not guarantee an improved R&D
performance. We need a market which cuts the lead time to transform innovation into new
products and services. Europe needs the right conditions for research and innovation toflourish – such as attractive careers for researchers, a modern IPR system andinteroperable standards. A knowledge economy needs free movement for ideas andresearchers, adding a "fifth freedom" to the four freedoms of the Internal Market andcreating a genuine European Research Area.

—A more dynamic business environment: SME and entrepreneurship has been put high on
the reform agenda. The task now is to fully unlock the growth and jobs potential of SMEs
and make full use of their innovative capacities. The Commission will seek the views ofSMEs and their representatives to help design a "Small Business Act" for Europe with aview to making a wide range of proposals to support SMEs by the end of 2008.

—Greater employability and investment in people: Both globalisation and technologicalchange risk increased inequality, opening up the gap between the skilled and the unskilled.
The best solution is to help each individual to adapt, by improving the quality andavailability of education and training for all ages. There is a growing interest in"flexicurity." This can help people to manage employment transitions more successfullyin times of accelerating economic change. By upgrading their skills, and protecting people
rather than particular jobs, it helps people to move into better paid, more satisfying jobs,
or even start their own businesses.

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—Energy and climate change: The ambitious targets set by the European Union to cut
greenhouse gas emissions and drive low-carbon energy are based on two key foundations:a conviction that, with mechanisms like trading to let the market lead the process,fundamental change is within our economic reach; and confidence that there has been areal sea change in citizens' commitment to reform. At the same time, this ambitious
approach provides the best possible platform for international negotiations to tackle
climate change worldwide. The Lisbon strategy can promote a new ecological approach toindustrial and innovation policy – to stimulate and mainstream sustainable andenvironmentally-friendly technologies.

__________
The climate change and energy challenge is particularly important as the future of the planet
depends on the response of governments and societies. The response will call for a significant
mobilisation of the scientific community. The research efforts committed to deal with thischallenge will depend not only on the credibility of the technological responses but also on therhythm of adaptation and the suitability of solutions introduced by societies and their political,
economic and social actors.
The European Union has made the fight against climate change one of its main objectives foraction. The stakes are crucial. Without changes in the current situation, energy demand will
increase by 50% by 2030 and result – combined with the increase in world population – in a
doubling of CO2 emissions, accelerating global warming with a whole series of uncontrollable
consequences that will affect the living conditions of the world population.
At the European Council in March 2007, the Union adopted the strategic objective to limit global
warming to no more than two degrees Celsius above pre-industrial levels. It set the 3 times "20objectives" for 2020: -20% greenhouse gas emissions, +20% improvement in energy efficiency,with 20% coming from renewable energy sources. The Union's aim is that by 2050, thedeveloped countries will have reduced their emissions by 60-80%.
Research and innovation are concerned at multiple levels through providing new knowledge, newtechnologies and new concepts. It is instrumental at the level of problem analysis and relatedsolutions, in the policy-making process and in the economy and society at large. Research andinnovation are important elements in the success of the three objectives set by the Union:—

Reduction of greenhouse gas emissions by 20% by 2020, and in case of a global andcomprehensive agreement, by 30%, and call for a global reduction of up to 50% by 2050
compared to 1990 levels. Research and technological innovation have a strong bearing on theprocess, methods, technologies, materials which allow a reduction in the negative impacts ofenergy production and consumption on the climate and environment particularly through:Power stations (e.g. capture of CO2, advanced reactors); Energy Intensive Sectors (steelworks,cement works, chemical/paper/aluminium industries); and Transportation (air, water, rail,road).

4—Increase in energy efficiency with a view to saving 20% of EU energy consumption
compared to projections for 2020. Research and innovation here are concerned with such
issues as energy efficiency of transportation (air, water, rail and road) and the efficiency ofheating and lighting in buildings and homes.

—Renewable energy: 20% of the total energy consumption in 2020 should come fromrenewable energies, including a minimal proportion of 10% of biofuels in the total petrol anddiesel consumption for transport. Research and innovation cover the improvement in theefficiency of alternative energy technologies (solar, wind, biofuels) resulting in a reduction in
their cost to encourage them to be used more widely, new fuel sources (new generation ofbioethanols).

Research and innovation, in general, are preparing for the setting-up in the medium to long termof a low carbon economy and society in all its economic, social, and technological dimensions,by looking at the implications of the transition for the different sectors and in particular for theenergy-intensive sectors such as the iron and steel industry, chemical industry, transport andagriculture. Research also covers new energy sources (hydrogen, thermonuclear fusion, etc),
while at the same time addressing new generation nuclear fission reactors.
Most of the EU 7th Research Framework programme themes are already largely driven towards
the achievement of sustainable development objectives, which cover climate change as a toppriority. The FP7 budget allocated for research, energy and transport has been increased andamounts to EUR 8.4 billion for the period 2007-2013. But the contribution of research to theCCE challenge goes beyond these three areas. Indeed, the contribution includes all researchaiming at moving towards a low-carbon economy and diminishing the other greenhouse gasemissions. This includes agricultural research, ICT research, materials research, social sciences &humanities, spatial research, nuclear research (fission and fusion), science in society, andresearch infrastructures.
As to the implementing instruments, European research is strongly committed to reaching theobjectives set by the European Union, notably:—

Of the 34 European technology platforms, 15 focus on energy/climate change questions:aeronautics, advanced engineering materials construction, biofuels, rail road, steel, electricity
networks, wind energy, hydrogen and fuel cell, photovoltaics, sustainable chemistry,waterborne, zero emission fossil fuel power plants, forestry. A further related platform in theenergy field, the Sustainable Nuclear Energy Technology Platform is in preparation.

—

Of the active ERANETS, 14 are working on the climate change - energy challenge:
renewable energies, zero emission power plants, hydrogen and fuel cells, solar photovoltaic,
innovative energy, sustainable businesses, sustainable buildings, climate change, sustainableurban environment, road research, efficient transport systems, cooperation with SouthAmerica, China, and South-East Europe.

—

The objective of the Fusion part of the Euratom programme in the near term is the successful
realisation of the ITER project and preparations for the earliest possible start of theexperimental demonstration activities.
5—Of the six Joint Technology Initiatives (JTIs), 2 are directly related to the CCE challenge, i.e.
"Hydrogen and Fuel Cells Initiative" and "Clean Sky", and two are closely linked:"Nanoelectronics Technologies 2020" and "Global monitoring for Environment and security".
The "Clean Sky" JTI in particular aims at developing environmentally friendly technologies
in the EU air transport sector. The target is to reduce CO2 emissions from planes by 50% in2020 through drastic reduction in fuel consumption (improvement of engine efficiency andaircraft operation).

—The Earth Observation activity (GEO) is strongly "climate change impacts" oriented and it isexpected to provide essential information for the understanding and prediction of climatechange.

—In the area of research infrastructures, the Sixth Framework Programme set up "Integrated
Infrastructures Initiatives" (for airborne environmental research, for atmospheric processes,
research on atmospheric aerosols, characterisation of the European terrestrial biosphere) to
support research in the area of climate change. In the roadmap established by ESFRI for FP7,
7 of the preparatory phase projects are directly linked to climate change.

The global dimension of the challenge related to climate change has initiated a number ofinternational research efforts and collaborations, in which Europe has played and continues toplay a key role. International co-operation for research and technological innovation is crucial
and can have many benefits, including exchange and sharing of knowledge, skills, and providing
effective and equitable responses on the scale required.
__________

It is clearer than ever that the EU can only achieve its objectives at home by being active andunited on the global stage. The Lisbon Strategy for Growth and Jobs is the right backbone for theEuropean response to globalisation. Its further deepening is the way to create the wealth that cangive practical meaning to core European values of social inclusion and of European andinternational solidarity. As globalisation is constantly evolving, Europe must ensure that its
external and internal policies are mutually reinforcing and be ready to refine them.

Dr. Philippe de Taxis du PoëtFirst Counsellor - Head of Science & Technology
European Union - Delegation of the European Commission to Japan

This text is based in particular on:
Communication from the European Commission 'The European interest: succeeding in the age of globalisation',
3 October 2007, http://ec.europa.eu/commission_barroso/president/pdf/COM2007_581_en.pdf
European Commission Green Paper 'The European Research Area: new perspectives', 4 April 2007,
http://ec.europa.eu/research/era/pdf/era_gp_final_en.pdf

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