# EUR-Lex - 52013DC0149 - EN

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# 52013DC0149

**COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS State of the Innovation Union 2012 - Accelerating change /* COM/2013/0149 final */**

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COMMUNICATION FROM THE COMMISSION TO
THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL
COMMITTEE AND THE COMMITTEE OF THE REGIONS

State of the Innovation Union 2012 -
Accelerating change

(Text with EEA relevance)

1.           Introduction

The Europe 2020
strategy and its ʻflagshipʼ initiatives focus on investments in
education, research and innovation as the key to achieving smart, sustainable
and inclusive growth. In this context, the Innovation Union flagship
initiative, together with the Digital Agenda, Industrial Policy and Resource
Efficient Europe flagships, and the Single Market Act, aim to create the best
conditions for Europe's researchers and entrepreneurs to innovate.

The Innovation
Union flagship in particular is about creating a vibrant, innovation-based
economy fuelled by ideas and creativity, capable of linking into global value
chains, seizing opportunities, capturing new markets and creating high-quality
jobs. Overall, progress towards setting up the policy framework for an Innovation
Union has been very positive: more than 80% of the initiatives are on track. The
call by the Heads of State and Government to deepen the European Research Area
is being turned into concrete actions. The Commission's ʻHorizon
2020ʼ proposal for a future European research and innovation programme marks
a clear break with the past by covering the entire value creation chain in one
single programme. The principle of ʻsmart consolidationʼ — i.e.
protecting or, if possible, increasing growth-friendly expenditures, such as
R&D — is now widely accepted and is embedded in the European Semester. The
business environment in Europe will become more innovation-friendly thanks to Single
Market measures such as the unitary patent, faster standard setting, modernised
EU procurement rules and a European passport for venture capital funds. European
Innovation Partnerships are pooling resources and concentrating demand and
supply-side measures on key societal challenges. While these measures still
need to be implemented to start bringing results, they represent a fundamental
shift in the right direction.

The global position
of Europe is still relatively strong. The EU is one of the world's
best-performers when it comes to producing high-quality science and innovative
products. It still captures the largest and a stable share (28%) of income
generated in global manufacturing value chains while the US and Japan saw their shares shrinking. Since 2008, the EU has improved its innovation
performance and it closed almost half of the innovation gap with the US and Japan[1]. The EU is also keeping its strong
innovation lead over Brazil, India, Russia, and China, although the latter is
most markedly catching up. In addition, South Korea has almost tripled its
innovation lead over the EU since 2008 and joined the US as an innovation leader.

Furthermore,
while public R&D spending in the EU grew throughout the crisis as governments
strived to keep up their R&D investments and thus incentivise businesses to
do likewise, recent data point to a potential reversal of this trend. In 2011,
for the very first time since the beginning of the crisis, the total public
R&D budget of the 27 EU Member States decreased slightly.

The on-going
economic crisis has also exposed structural weaknesses in Europe's innovation
performance. The 2013 Innovation Union Scoreboard shows that the process of
convergence in the innovation performance of Member States has come to a halt.
As convergence was the dominant pattern since the introduction of the
Scoreboard in 2001, this signals a clear risk of an increasing innovation
divide[2].
As the crisis gets longer and deeper, growth disparities between some European
regions are increasing, there is an even stronger need to implement the
Innovation Union swiftly and deepen it in the areas
crucial to innovation, such as higher education, innovation-based entrepreneurship
and demand-side measures. Momentum in fields like
social innovation will also need to be maintained.

Europe therefore needs fresh dynamism in its economy. Existing,
traditional industries in which Europe excels need to develop new applications
and new business models in order to grow and maintain their competitive
advantage. Furthermore, in dynamic fields such as ICT-based businesses and in
emerging sectors Europe needs more high-growth firms. This calls for an
innovation-driven structural change, but Europe is at present missing out on
the more radical innovations which drive and lead such structural change. Consequently,
what Europe needs most in the next decade is to attract top talent and reward
innovative entrepreneurs, to offer them much better opportunities to start and
grow new businesses

Against this
background, this communication:

·
summarises progress at Member State and European levels towards achieving an Innovation Union in 2012, and

·
concludes by outlining areas where the
Innovation Union can be deepened, including by drawing on the Innovation Union stress
test carried out by the European Research and Innovation Area Board[3].

2.           The State of National Research and Innovation Systems

2.1.        Investing for the future

Europe needs more and better investment in research and innovation to support
the competitiveness of its industry and to upgrade its research and innovation system.
Public and private investment in R&D is crucial to enable Europe to take
advantage of any rebound in the economy. The recovery in 2010 was substantially
stronger in countries which had previously invested the most in R&D and
innovation (e.g. Germany, Finland and Sweden)[4].

Public and
private investment in R&D was growing up to the economic crisis. Following
the outbreak of the crisis, a majority of Member States maintained or increased
their R&D investments, despite fiscal constraints, and overall R&D
spending over GDP increased from 1.85% in 2007 to 2.03% in 2011. However, in
eleven Member States[5]
it has grown less than GDP since the beginning of the crisis (Figure 1).

Figure 1:
Protecting public R&D spending

Overall, businesses in the EU also increased their expenditure on R&D
as a share of GDP from 2007 (1.18 %) to 2011 (1.27 %). This is in part due to
sustained R&D investment by European firms which expect their worldwide
investments in R&D to grow further by an average of 4 % annually over the
period 2012 – 2014[6].
Europe is also an attractive
place for foreign firms to invest in R&D and they have done so heavily. US firms account for two-thirds of internationally mobile R&D investments and their annual
R&D spending in Europe is 10 times greater than the amount they invest in China and India combined[7].

However, there are large differences between Member States and
between industrial sectors and actors. Some countries are seeing a fall in R&D
investment in the business sector, in particular by SMEs. This is mostly due to
low business confidence in the future prospects of the European economy,
despite cash reserves piling up in many companies' balance-sheets[8]. From a sectoral perspective,
many countries have seen an increase in R&D intensity in the more
traditional medium-tech industries (e.g. metals, rubber and plastics, food
products) as well as in growing markets driven by societal challenges such as
waste treatment, clean energy and water. Overall, the EU remains specialised in
medium-high R&D-intensity sectors which account for half of European
companies' R&D investment. By contrast, more than two-thirds of US
companies' R&D investment is clustered in high R&D-intensity sectors
(such as health and ICT)[9].

Figure 2: R&D investment by US and EU companies by sector group

Source: 2012 EU Industrial R&D
investment scoreboard

Furthermore, in Member States where the business sector is
knowledge-intensive and internationally competitive, the governments' strategy to
protect R&D spending helped maintain the level of private investment[10]. However, this proved more
difficult for countries suffering from sovereign debt crisis. In these
countries, liquidity constraints combined with an insufficiently
innovation–friendly environment and a lower level of business demand for
knowledge undermined the effectiveness of the counter-cyclic efforts to stimulate
business investment. This shows that investing in knowledge must go hand in
hand with reforms in the research and innovation system including
innovation-friendly framework conditions for innovative businesses.

While most Member States have applied a policy of smart fiscal
consolidation to their public investments in R&D and innovation, there is a risk now that the exceptional length and harshness of
the current crisis is beginning to undermine the policy consensus that such investments
need to be protected. In 2011, public R&D budgets[11] decreased for the first time
since the beginning of the crisis, though this is being
partly compensated by an increase in foregone tax revenues due to fiscal
incentives[12]. Comparing Member States' public budgets
for R&D 2011 and 2012, the number of countries which maintained or increased
their public spending is also shrinking. This presents a clear threat of
hollowing out Europe's innovation performance and endangering future
competitiveness.

When looking at
the entire knowledge triangle (education, research and innovation), we see a
similar pattern. In 2009, all but two Member States maintained or increased
their public spending on education[13]. Since
then, the continued pressure on public finances has led many governments to cut
investments in education[14].

2.2.        Reforming to raise efficiency
and effectiveness

At times of fiscal constraint, it is even more important to reform,
to get the most out of the money invested. There are still considerable differences between Member States in terms of their research and
innovation efficiency. For a given amount of public investment, some countries
achieve more excellence than others in science and technology (Figure 3).

Clearly therefore, although each national context calls for specific
solutions, a full deployment of the European Research Area would trigger substantial
efficiency gains in knowledge and technology capacities. The most successful
Member States have managed to increase the scientific quality and economic
impact of their science base, while others still face efficiency problems or make
little impact with their public investments.

Figure 3. Investment and research excellence[15]

Many EU Member States have launched ambitious policy reforms in
order to make their research and innovation system more efficient, in line with
the objectives of the European Research Area[16].
Several of these reforms were initiated before the crisis, but they have since
been extended or deepened. Also, the economic crisis has led to a stronger
integration of research and innovation in the broader national industrial and
macro-economic policies. New innovation bills and national strategies for
research and innovation are being drawn up or implemented in several countries,
and many governments are linking innovation to broader reform packages on
entrepreneurship, the business environment and the labour market, with a strong
focus on better commercialisation of research results.

Member States and Associated Countries have reported a range of National
Action Plans, programmes, strategies and legislative acts aimed at ensuring that
they train enough researchers to meet their national R&D targets[17]. In many cases, it is too
early to measure the direct or indirect impact of these measures. However, the
tendency at present is to have issue-based policies and action plans, which do
not necessarily form a coherent whole. A key step will be to move towards a
single integrated strategy addressing human resources issues in the
research profession.

Most
Member States have also designed or implemented legislative changes increasing the autonomy of universities. Some have
introduced new employment conditions for public sector researchers that allow
them to work with the private sector and commercialise their scientific
findings and technological inventions.

Measures are being put in place to support
the internationalisation of public and private research actors,
and in particular their integration in European-wide networks of knowledge
flows. Member States are increasingly considering the
benefits of integrating their national research and innovation systems into global
and European systems in order to tap into global value chains and address innovation
demand from new international markets. To this end, programmes promoting
R&D have to open up to international partners and cross-border
collaboration, which will strengthen complementarity of value chains across
countries. Public-private collaborations and the
internationalisation of firms are at the core of the strong cluster policies
that have been developed in many Member States in recent years.

Cross-border mobility is still relatively low. Researchers who do move tend to do so from
the public sector to the private sector, but the flow in the other direction is
marginal, as is any flow back and forth. Despite
progress in student mobility, too few universities and public research
organisations recruit foreign professors or recognise the importance of gaining
international experience for their staff[18].
There are scarce promotion prospects for innovative researchers collaborating
with the business sector and effective knowledge transfer is only visible in
the most dynamic Member States. Funding under most national and regional
research programmes is still largely closed to participants based in another Member State, and Europe thus misses opportunities for excellence and cross-border knowledge
flows.

Getting the
most out of public research funding requires a sound level of competition. This
can be achieved through project funding (open calls for proposals) and performance-based
institutional funding linked to scientific excellence, internationalisation,
and collaboration with business. More Member States, however, need to embrace a
move towards more competitive funding: so far, only a handful of countries have
set in place an effective funding allocation mechanism providing incentives for
excellence. Too often, institutional funding is allocated to universities and
public research organisations without any performance criteria or real
evidence-based monitoring. When allocation is de-coupled from performance, individual
researchers and institutions have few incentives to engage in European-wide
networking or competition, to strive for excellence or to cooperate with the private
sector.

Member
States are increasingly focusing on creating an innovation-friendly business
environment. The most widely-used measures are fiscal incentives for
R&D investments or innovation vouchers for companies wishing to buy services from R&D, technology and innovation services providers. Some Member States are also reducing tax rates on profits from
patents and other types of intellectual property. There is strong support for
providing easier access to risk capital for companies at their seed, start-up
and early-growth stages, and for innovative projects.

In national
policy mixes, however, there are still imbalances between supply push and
demand pull. Supply-side instruments such as grants,
subsidised loans and tax incentives, constitute over 90 % of the measures used[19]. Only a few countries are
actively using demand-side measures (e.g. through public procurement, standards
or regulation) to help develop markets for innovative solutions. Nevertheless,
many other Member States have begun discussing or
piloting such measures and are expected to start implementing them soon. The development
of new markets is mostly supported in the areas of sustainability, energy
efficiency and e-government applications.

2.3.        Leading change Towards
More Innovation in Europe

The crisis and increasing globalisation have changed the rules of
the game. Strategies based on investing in knowledge and getting the most out
of the existing national research and innovation systems are very important,
but not enough. The European economy needs a radical shift in business dynamics
towards high-growth and knowledge-intensive global markets with potential for creating more and better jobs. This
assessment is supported by the data illustrated in Figure 4, showing that
economies where the economic impact of innovation is the largest, have a higher
employment rate.

Figure 4: Economic impact of innovation is positively correlated to
employment

It is widely recognised that Europe needs its economic fabric to be
renewed and oriented towards sectors which are tomorrow’s markets and where it
can build sustainable competitive advantages, based on its highly educated
workforce. Such structural change is not yet taking place at the required pace.
In order to hasten the renewal of Europe’s economic fabric, policy-makers
urgently need to focus policy efforts on one of the main channels for such
renewal: the growth of innovative firms. By doing so, they will address a key
bottleneck to Europe’s economic performance.

Studies have indeed shown that, while there are fewer high-growth
innovative firms in Europe than in the US, overall employment growth depends
critically upon them: the number and share of high-growth firms may be small
but the number and share of the jobs they generate directly or indirectly is
disproportionately large. Moreover, high-growth innovative firms are essential
for productivity growth, as the main channel for such growth is the
re-allocation of jobs from firms with low productivity to more productive ones:
it has been estimated that differences in firm growth dynamics between the US
and the EU account for over two thirds of the EU’s underperformance vis-à-vis
the US in productivity growth in recent decades.

National policy-makers would benefit from
reviewing all the aspects of their ‘national entrepreneurship and innovation
system’ that may constitute bottlenecks to the growth of innovative firms.
Based on existing empirical evidence, policy actions should focus on the
following key aspects in particular:

·
Several aspects of the regulatory framework are
very important for firm growth dynamics: Member States need to address any
disincentives to growth present in their regulations. This may concern for
instance a modernised standard-setting and well-performing labour markets. Also
bankruptcy regimes that severely penalise ‘failed entrepreneurs’ have been
found to discourage high-growth entrepreneurship. More high-growth firms may
also mean more cases of failure. Beyond legislation, there is a need for change
in social attitudes towards entrepreneurs who have failed.

·
Access to debt and equity finance is of course
essential for enabling high-growth entrepreneurship. While many Member States
have already developed policies to address this issue, this might still be an
important bottleneck, particularly in Member States with less developed
financial markets. In that respect, the EU Regulation creating
a European Venture
Capital Fund adopted in
2012 is a major step forward as it will make it easier
for venture capitalists to raise funds across Europe for the benefit of
start-ups and SMEs[20].

·
The specific target of fostering the development
of young innovative firms needs to be fully integrated in the design of
research and innovation policy tools. While many Member States have developed
tax incentives to support R&D activities in all types of companies, there
is a need to offer specific, more favourable tax treatment for young innovative
companies.

·
There is a close link between growth, innovation
and internationalisation. Exporting and innovation are mutually reinforcing strategies
that result in higher export shares, turnover and employment growth at the firm
level. Policies supporting innovation and internationalisation should link up.
In that respect, cluster policies can be a critical tool, not least to support
the internationalisation of young innovative firms.

·
Young radical innovators also face problems in protecting
their intellectual property. Targeted or more general policies increasing both
the supply of (public) capital and the access to such capital and policies both
improving the IPR system and making it less costly will be beneficial to all
enterprises that grow and that want to innovate but in particular to
high-growth innovative enterprises. Sharing and professionalising access to IPR
portfolios, e.g. through patent pools within clusters, can also be instrumental
in developing innovation on a larger scale in Europe.

·
Gearing the R&D system towards knowledge
transfer, and in particular improving the linkages between the science base and
the business sector, is of primary importance for the creation and growth of
technology-based innovative companies. Many Member States have already
developed policies to boost the commercial exploitation of R&D; these policies
need to be further implemented, enhanced, evaluated and renewed accordingly.

·
It is essential to foster the specific
development of an innovation and entrepreneurship culture and attitude, not
least through the education system. Stimulating growth ambitions in new and
existing innovative businesses and supporting the provision of training, skills
upgrading opportunities and qualified coaching in young and small enterprises, e.g.
in relation to the management of innovation and rapid growth, has received less
attention in policies aimed at fostering firms’ growth.[21]

The above considerations are central to
achieving the Europe 2020 objectives and focusing on horizontal policies that seek
to provide a fertile breeding ground for the emergence of high-growth innovative
enterprises.

In addition to efforts at regional and national level, these
priorities should be supported by concerted efforts at EU level in order to
create an innovation friendly business environment across Europe. Measures of
this kind are outlined in the next section.

3.           Progress in Building an
Innovation Union

In 2012, good progress was made in
implementing the Innovation Union. More than 80% of commitments are on track
with on-going initiatives. In a few areas efforts need to be stepped up. These
include a more strategic use of innovation procurement, adoption of the Single
Market Act I proposals and rolling out the initiatives on the intellectual property
valorisation. This section focuses on key policy actions of 2012. A short overview on the state of play of
all 34 commitments of the Innovation Union is provided in the annex.

3.1.        Strengthening the knowledge
base and reducing fragmentation

Promoting excellence in education and
skills development

Current skills mismatches and shortages of
scientists and engineers present a threat to Europe's innovation capacity,
precisely at a time of increasing technological needs. In 2012, the Commission
presented the Rethinking Education Communication[22]. It focuses on the need to
develop transversal skills such as critical thinking, problem solving,
team-working and entrepreneurial skills and to enhance academia-business
partnerships.

The first Knowledge Alliances projects are
under way. Their aim is to set up cross-sector partnerships between employers
and educational bodies to address skills mismatches, e.g. in the audio-visual
industry (CIAKL project), in manufacturing by integrating factory and classroom
environments (KNOW-FACT project) and by fostering an entrepreneurial spirit in
students and staff (EUEN project). Further projects will follow in 2013, and
from 2014 onwards Knowledge Alliances will be part of the new Erasmus for All
programme.

In addition, a multi-dimensional and
international ranking of higher education institutions has started implementation
in 2012 following the conclusions of a feasibility study.

Delivering the European Research Area

The conditions are not
yet in place for achieving the European Research Area (ERA) – by 2014. ERA is a
unified research areas based on the Internal Market. ERA is part of the
Innovation Union and Horizon 2020 supports its implementation in many ways. It
is one of the key structural reforms to drive growth in Europe – and is
increasingly recognised as such. While progress to date has been slow, the Commission proposed a reinforced European Research Area
Partnership for Excellence and Growth[23]. Its focus
and a clear set of actions were
endorsed by the Competitiveness Council at its meeting on 11 December 2012. Under
the reinforced partnership, the Member States, stakeholder organisations and
the Commission will work together to enhance the effectiveness and efficiency
of the European public research system. They will do so by encouraging more openness and competition, greater
mobility for researchers, more cross-border cooperation and an optimal
circulation of knowledge. Progress towards achieving the ERA will have to be
monitored in close connection with the European Semester. It will also need top-level
steering by the Council, informed by regular dialogue with all stakeholders.
The Commission will develop a robust ERA monitoring mechanism in close
cooperation with the Member States.

The combined effect of the
EU reaching the 3% target of GDP dedicated to research, Horizon 2020, and an
increased share of transnational funding (currently 0.8%) thanks to achieving
the ERA, could generate as much as €445 billion of additional GDP
and 7.2 million extra jobs by 2030[24].

The Commission's
proposal for Horizon 2020 contributes to the establishment and functioning of
ERA, for example by making open access to scientific publications a general
principle of Horizon 2020. The Commission has also recommended that Member
States take a similar approach to the results of research funded under their
own national programmes[25].

Excellent research does not happen in a vacuum. It requires the best research infrastructures
as platforms for collaboration to address research issues that cannot be addressed
by individual Member States or regions acting alone. The Commission and the Member States are together making progress on building
the 48 priority research infrastructures identified in
2010 by the European Strategy Forum on Research Infrastructures (ESFRI). About 27 of them are expected to be under implementation during
2013.

Extreme Light Infrastructure is a distributed
infrastructure hosted in the Czech Republic, Hungary and Romania. It forms a pan-European Laser facility which is expected to hold the world's most
intense lasers. It involves nearly 40 research and academic institutions from
13 EU Member States. The three sites should be operational in 2015. ELI will be
the first infrastructure identified by ESFRI to be located in new Member
States. It is largely being co-financed by the EU's structural funds. The
project is a very good example of how research infrastructures can meet the
objectives not only of scientific excellence, but also of regional development
and European cohesion.

Focusing EU funding on Innovation
Union priorities

Horizon 2020 – the new EU instrument for
research and innovation funding from 2014 - will bring together all
European-level support for research and innovation under one umbrella. In line
with the ambition set out in the Innovation Union, Horizon 2020 marks an
important break from the past, with funding having a more challenged-based
approach, simpler rules for participants, and more effective delivery of
results.

A key feature of Horizon 2020's new
approach is the emphasis given to innovation. Concretely, this means more
funding for: testing, prototyping, demonstration and pilot type activities;
business-driven R&D, promoting entrepreneurship and risk-taking; shaping
demand for innovative products and services through standard-setting and public
procurement; and encouraging innovation in non-technological areas such as
design, service innovation and creativity, new business models and social
innovation, thereby reflecting a broad approach to innovation. There will also
be a revamped approach to SMEs that includes a dedicated instrument for
supporting companies that show a strong ambition to develop, grow and
internationalise[26].
Also in Horizon 2020, the Marie Skłodowska-Curie Actions (MSCA) will contribute
to the Innovation Union target of one million more researchers.

The current Seventh Framework Programme for
Research (FP7) takes on board Horizon's 2020 new emphasis on innovation. The 2013 FP7 Work
Programmes embrace a much larger part of the innovation cycle than ever before
and provide the biggest ever calls for proposals, totalling € 8.1 billion. The
aim is to better ensure that the fruits of research can be exploited, and to
help place new products and services on the market.

Boosting talent and new business
creation: the European Institute of Innovation and Technology

The European Institute of Innovation and
Technology (EIT) puts the concept of the ʻknowledge triangleʼ (education,
research and business) into action through new types of partnership – Knowledge
and Innovation Communities (KICs). There are currently three KICs - on climate
change, sustainable energy and the future information and communication
society. EIT's KICs education programmes focus on entrepreneurship and
innovation skills to give students and business innovators the knowledge and
attitudes they need to turn ideas into business opportunities. The EIT has
defined the criteria for awarding an EIT label for Masters courses and PhD
programmes.

Europe is facing a considerable shortage of engineers and
ICT practitioners with the right combination of skills. The EIT ICT Labs Master School is one of the largest joint European ventures in higher education
trying to remedy this problem. It involves 21 KICs universities and business
schools. The institutions involved are delivering seven technical majors and a
fully standardised minor in Innovation and Entrepreneurship. Students will also
benefit from a mentoring scheme and an internship at one of the industry
partners. Approximately 200 students were admitted to the 2012 programme.

Entrepreneurial education is combined with
a range of business support services and several innovation schemes to
accelerate the delivery of innovation to the market such as the InnoEnergy Highway and the Climate-KIC Market Accelerator. The impact is already being seen,
with research results and new ideas getting to the market faster and attracting
first customers.

Thanks to a funding from the EIT Climate-KIC, Naked
Energy, a design and innovation start-up, was able to deliver a real-world
pilot of their solar technology at a meaningful scale. This new piece of
technology sparked interest and led to an agreement with Sainsbury’s, the major
supermarket chain.

"Climate-KICs role has been to identify
opportunities, to match make and to open doors for us. It’s like ‘sheltered
innovation’. Quite simply, our relationship with Climate-KIC allows us to sit
at the table with the big players." Christophe Williams Managing Director,
Naked Energy

"We know the UK. But there must be brilliant
ideas out there we don’t know about and Climate-KIC can bring these to us. We
want to get involved at the embryonic stage in order to help shape the
technology in a commercially meaningful way." David Penfold Sainsbury’s
Supermarkets Ltd

The proposal for the EIT's ʻStrategic
Innovation Agendaʼ outlines the consolidation and
further development of the three existing KICs and the creation of six new ones:
innovation for healthy living and active ageing; food4future; raw materials,
added value manufacturing; smart secure societies; urban mobility. The EIT will
strongly contribute to the objectives set out in Horizon 2020.

3.2.        Getting good ideas to market

The Innovation Union aims to remove
obstacles that prevent innovators from translating ideas into new products and services
that can be sold on world markets. Europe needs to unleash its innovative potential
by faster standard-setting, cheaper obtention of patent protection, smarter
public procurement of innovative products and services, and better access to finance
for innovators and SMEs. The proposals on these four innovation drivers were
fast-tracked through the Single Market Act I (2011). They should start bringing
a new impetus to European innovation from 2013, as two proposals were adopted
in 2012 and the other two are expected to be adopted in 2013.

Financing innovation

Europe has no
shortage of innovative ideas waiting to be converted into successful business
models. The first obstacle is often access to finance, further exacerbated by
the on-going crisis. Europe has experienced a 45% drop
in venture capital fundraising following the crisis. Moreover, Business Angel investment is currently some
five times greater in the US than in Europe[27].

In its 2012 report, the Expert Group on cross border matching of innovative firms with suitable investors
recommended to support venture capital funds with real
potential, professionalise the business angel community, monitor and encourage crowd
funding, and provide investor-readiness training for
innovative entrepreneurs. In 2013, the Commission will also present a green paper on long-term financing
of the European economy.

To remove obstacles to cross-border investment, two legislative
proposals on ʻSocial Entrepreneurship Fundsʼ and ʻVenture
Capital Fundsʼ[28]
were agreed in 2012 with official adoption expected in early 2013. In addition,
the Commission completed its examination of potential tax
obstacles to cross-border venture capital investment, on the basis of which it
will consider next steps with a view to presenting solutions in 2013.

The Programme for the Competitiveness of
Enterprises and SMEs (COSME) and Horizon 2020 will jointly support an equity
and a debt financial instrument from 2014 onwards. On the equity side, both
programmes will jointly make seed, early-stage and growth-stage investments in
support of a seamless, EU-wide venture capital scheme. Horizon 2020 will focus
on the early stage, and COSME on the growth stage. On the debt side, both
programmes will provide loans, guarantees and counter-guarantees.

With the aim to
increase lending to research- and innovation-driven SMEs, the Risk-Sharing
Instrument (RSI) was launched as part of the RSFF in early 2012 in the form of
a guarantee scheme to encourage banks to provide more loans to innovative SMEs
and small midcaps.

During
2012, the Risk-Sharing Finance Facility (RSFF) focused additional resources on
research infrastructures, with a substantial loan of up to €300 million extended to ESO (European
Southern Observatory) to support the construction of the European Extremely
Large Telescope (E-ELT). This revolutionary ground-based telescope will have a
39-metre main mirror and will be the largest optical/near-infrared telescope in
the world: “Europe's window on the universe”.

In 2013, the
European Investment Bank will start channelling an additional €10-15 billion to innovation and skills via
a new Growth & Employment facility, thus generating up to €65 billion of additional investment.

Shaping demand
for innovative products and services

Innovative companies can only be successful if there is a market for
their goods and services, and consumers willing to buy them. The new
standardisation package, effective from 1 January 2013, and the proposal for
the modernisation of the EU public procurement law, are key milestones towards
helping innovative products and services reach the market faster. As a result
of the former, a European standard should be developed twice as fast by 2020
and the latter will enable public procurers to use a special procedure for
buying innovative goods and services, buy jointly with procurers from other
Member States to share risks and costs, and include the innovative character in
the award criteria. However, the proposals on procurement still need to be
adopted by the European Parliament and the Council.

Innovation procurement[29] is slowly picking up across Europe. In 2012, Italy assigned more than €300 million[30]
to pre-commercial procurement (PCP)[31].
PCP will be deployed in Southern Italy with the support of structural funds, as
has been done in other Italian regions. Moreover, the higher risk related to these purchases
can be covered by a special risk-sharing
facility established in cooperation with the European Investment Bank. Cross-border
collaboration is also developing. The Nordic Ministers
of Industry launched a ʻlighthouse projectʼ in
health care to strengthen the collaboration between Norway, Finland, Sweden, Denmark and Iceland on innovation procurement.

Transnational cooperation on innovation procurement
is currently supported in a few areas with EU research and innovation funding.
In 2012, 16 projects were launched to drive innovation procurement involving
procurers from the majority of Member States. The projects will encourage
public procurers to deploy more innovative solutions in the areas of lighting
systems, energy efficient buildings, supercomputing technology, and better care
for elderly, smart transport systems, intelligent border security control, and
intelligent textiles for fire brigades. In 2013, such EU-level support is
likely to more than double, approaching €100 million.

Under the FP7 project SILVER, public
procurers from five countries - UK, Denmark, Sweden, Finland and the Netherlands - will together launch the first cross-border pre-commercial procurement call
for tender in early 2013. The call will aim at developing new robotics
solutions for assisting elderly people with physical disabilities. By making a
PCP call the consortium anticipates having access to new technological
solutions which when implemented in elderly care, will make it possible by 2020
to care for 10% more people using the same number of carers.

Better integration of
standardisation issues early in research and innovation projects is crucial for
knowledge dissemination, interoperability between products and services, and
eventually opening up new markets. Standardisation deliverables are being
developed within FP7 projects. New projects were launched in 2012 to speed the
delivery of standards inspired by FP-funded research results, for example for bio-based
products, 3D printing, smart textiles and the use of wood in construction.
Further uptake is expected in 2013 with around 75 calls
for proposals mentioning standards.

Each company has
to manage multiple and dynamic relationships within several networks. Setting
up bilateral electronic data exchange with every single business partner is
very cumbersome, especially for non-hierarchical manufacturing networks, and delays
and errors can easily occur. The key objective of the inTime
project is to improve delivery and reliability in customer-supplier
relationships, balancing production in the overall network. Based on the
project results, a standardisation deliverable was published in September 2012.
The multilateral communication platform described in the deliverable enables
participating companies, especially SMEs, to simplify and streamline their
business relations, as only one channel is needed to establish communication
with all business partners on the platform.

Innovative products and services are also at the heart of the Eco-Innovation
Action Plan (EcoAP) adopted in December 2011[32].
The EcoAP aims to create growth and jobs with products, services, and business
solutions with a positive environmental impact. It comprises seven actions: (1)
environmental policy and regulation review; (2) demonstration and market
replication projects; (3) standards and performance targets; (4) finance and
support service to SMEs; (5) new skill and jobs; (6) international cooperation;
and, (7) European Innovation Partnerships[33].

Eco-innovation
market replication projects, managed by the Executive Agency for Competitiveness
and Innovation, turn innovations into marketable green products and services.
Success stories include GLASSPLUS, and SATURN.[34] GLASSPLUS offers a means to reuse the
glass from old TV sets. 60 000 sets already found a new life as tiles.
SATURN recovers non-ferrous metals from municipal waste, with unmatched
separation and purity rates, above, respectively, 98 and 90%.

Capitalising on intellectual property and creativity

Intellectual Property Rights regimes have a
crucial impact on how new knowledge and creations are owned, shared and used.
Therefore they constitute a key component of the framework conditions for
research and innovation.

The historic agreement on the unitary
patent was reached in December 2012[35].
This should allow the first European patent with unitary effect to be granted
and registered in spring 2014. Member States will however need to swiftly
ratify the Unified Patent Court Agreement in order to comply with the 2014
Innovation Union deadline.

Patent Translate, a machine translation
service, went live in March 2012[36].
The tool is being developed by the European Patent
Office in cooperation with Google. It already offers translations from, and
into, English for fourteen languages, and will gradually extend coverage to 32
languages by 2014. Patent Translate, a service free of charge, will make the
content of patents and patent-related documents published anywhere in the world
easily accessible for everyone.

In 2012, the Commission presented an
analysis of the major obstacles that European companies, especially SMEs, face
in valorising existing patents. It also outlined some possible steps that could
be taken to breathe new life into neglected intellectual property[37]. The Commission also launched a
strategy for promoting cultural and creative sectors, with a focus on their
innovation potential[38].

The European Creative Industries Alliance launched
a policy dialogue and eight concrete actions on innovation vouchers, better
access to finance and cluster excellence & cooperation for the further
development of creative industries and better use of all forms of knowledge and
creativity by other industries. The European Design Leadership Board delivered
21 recommendations based on which the Commission will implement an action plan
for promoting the take-up and understanding of the role of design in innovation
policy.

3.3.        European Innovation
Partnerships

The European
Innovation Partnership (EIP) approach to accelerate the development and uptake
of innovations for societal challenges has entered a new phase during 2012 with
the pilot on ʻActive and Healthy Ageingʼ (AHA) moving from planning
to implementation, and with the approach being proposed for four more areas.

In February
the Commission endorsed the Strategic Implementation Plan (SIP) presented by
the AHA Steering Group and set out EU level actions in support. This included
an invitation for stakeholders to commit in writing to concrete actions and/or
to become a reference site, and the setting up a marketplace for innovative
ideas helping stakeholders find partners, share
emerging initiatives and disseminate evidence.

There was an encouraging response with 261 commitments to six
specific actions submitted by groups of stakeholders bringing together public
authorities, technology companies, health providers, industry and
non-governmental organisations. In addition, 54 regions expressed their interest to become a reference
site, serving as illustrations of good practice and to engage in scaling up and
replication of innovative solutions. Close to 500 partners have signed up to
the web-based marketplace[39].

Commitments have come from all EU Member
States mobilising over 1000 regions and municipalities in the EU, as well as from
other countries. Altogether the submissions show that over 4 million European
citizens could directly benefit from the Partnership which is intended to
have the critical mass to bring about real reform in the way we receive and
provide care in Europe. The six stakeholder groups
published their Action Plans in November 2012 outlining key deliverables and
outcomes for the next 2-3 years.

“The EIP on Active and Healthy Ageing is a
great example of how cooperation can be put in practice; not just between
companies but between stakeholders across the value chain. In the case of AHA
the risk is not in the technology, as most technologies are already there. It
is a matter of fusion of technologies (data communication, data handling,
sensor networks...) in real-life settings, and as a result it is much more about
social innovation: new ways of doing things and new business models. When
people start doing things in new ways, investment opportunities will arise. We
go for these. We will invest in innovation for active and healthy ageing,
because you at the Commission have committed yourselves to lowering the
investment risk by creating awareness and a receptive community, and obviously
because there is a huge market emerging for ageing related services, which is
very attractive to move into." Dr. Jos B. Peeters, Capricorn Venture
Capital

Following the endorsement
of the AHA SIP, the Commission put forward proposals for
new EIPs drawing lessons from the pilot, such as the need for light governance
and clarifying that EIPs do not replace formal decision making processes for
funding programmes or legislation.

In February, the
Commission proposed EIPs on ʻAgricultural Productivity and Sustainabilityʼ and on
ʻRaw Materialsʼ. In May it added a proposal
for an EIP on 'Water' and in July it proposed an EIP on ʻSmart Cities and Communitiesʼ'. Following endorsements from the Council,
the ʻWaterʼ EIP delivered its SIP in
December 2012, and expectations are that the ʻAgricultureʼ, the ʻRaw
Materialsʼ and ʻSmart Cities and Communitiesʼ SIPs will be issued
during 2013 so that implementation can start as early as possible.

A progress evaluation of AHA and a broader independent expert
evaluation of the EIP approach are planned for 2013 to assess if there are any
additional measures or amendments needed to improve the impacts of the current
EIPs and to set the conditions for further EIPs.

3.4.        Maximising social and
territorial cohesion

Closing innovation divide

The country performance analysis[40] and the Regional Innovation
Scoreboard 2012[41]
(Figure 4) show that regional innovation divergences persist and risk growing
with the crisis. Strong and innovative regions drive performance
in the most innovative countries, and such drivers are less prevalent in other
Member States. While regional innovation performance remained relatively stable
over 2007-2011, it showed a much higher degree of
variation than the country level performance. This regional diversity calls for
a better tailoring of innovation policies to the relative strengths of
individual regions. This will be encouraged under the future Cohesion Policy
2014-2020[42].
Member States will have to develop research and innovation strategies for smart
specialisation focused on a limited number of priorities. The Smart
Specialisation Platform[43]
is helping public authorities design such strategies through peer-reviews, guidelines,
and workshops across Europe. Currently, three EU Member States and 103 regions
from 19 other Member States are registered with the platform. To help regions
climb the ʻstairway to excellenceʼ, synergies between Horizon 2020
and Cohesion funding will be maximised, twinning/teaming
between existing and emerging centres of excellence will be supported, a policy-learning
facility set up and European Research Area chairs established.

Figure 5: Innovation performance by regions

Source: Regional Innovation Scoreboard 2012

Supporting social innovation

Social innovation is gaining momentum in Europe. Social Innovation Europe[44],
a virtual hub for building and streamlining social innovation, attracted nearly
50000 people in its first 18 months. With unemployment soaring, in October 2012
the Commission launched a competition calling for new ideas to help
people move towards work or into new types of work. In parallel, as a follow-up
to the Single Market Act I, the Social Business
Initiative[45]
is addressing the obstacles that hamper the development of the social
enterprise sector such as legislation, funding and the visibility and
recognition of the social added value of this sector.

Social
innovation and social policy experimentation in the fields of employment and
social policies have continued to be supported during 2012 through PROGRESS[46] and the European Social Fund
(ESF). The future 2014-2020 programming period of the ESF,
European Regional Development Fund (ERDF) and the new Programme for Social
Change and Innovation (PSCI) will reinforce such support.

Since 2011, through
FP7, the EU has supported about €30 million worth research projects on social
innovation and it is funding two networks of incubators
to nurture and scale up successful social innovations. Social innovation will be further supported under Horizon 2020. This
will be supported by the Commission’s commitment in the Single Market Act II[47] to develop
a methodology to measure the socio-economic benefits created by social
enterprises.

Finding innovative ways of financing social
innovation and supporting the modernisation of social protection policies are part
of the ʻSocial Investment Packageʼ presented in February 2013. It
focuses on increasing the sustainability and adequacy of budget and social
policies: activating social policies and services; investing in children and
youth; and streamlining EU governance for social policies, monitoring and
communicating with citizens.

Experience underlines the importance of
citizens as key actors of social innovation and the need for broad partnerships
for promoting innovation in social policy mechanisms, including third sector non-profit
and civil society organisations. Innovation in the corporate social
responsibility area (CSR) contributes to a holistic, future-oriented approach
to public-private partnership in addressing social challenges.

Mobilising public sector innovation

Given the large weight of the sector and
the current financial and political situation, Europe must mobilise innovation
in its public sector if it is to excel and remain internationally competitive. In
addition, the modernisation of public administration is one of the five
priorities set out in the Commission's 2013 Annual Growth Survey. The pilot European Public Sector Innovation Scoreboard[48] is the first EU-wide attempt
to better understand and analyse innovation in the public sector. The analysis
clearly shows that improved public services make it
much more likely that companies will innovate and
experience an increase in sales. Also, countries that perform well on the
quality of public services tend to perform better on innovation (Figure 6). High-quality,
innovative administrations are therefore a key asset for spurring Europe's innovation performance. Figure 6. Government effectiveness and the economic
impact of innovation

3.5.        Leveraging our policies
externally

Europe should maximise
the excellence of its science base and spur the growth of innovative companies
through active international cooperation and by creating the right conditions
to attract top talent. The Commission has therefore set out a new strategy for
developing international cooperation in research and innovation[49]. The strategy proposes to
further focus cooperation on EU strategic priorities while maintaining the
tradition of openness to third country participation in EU research. This
includes addressing global challenges, but also making Europe a more attractive
location for research and innovation. At the same time, it is essential that the
innovation dialogues with third countries take into account the need to promote
a level playing field for European players present in their territories and to
strengthen legal certainty for investors, notably on intellectual property
rights - this is particularly relevant in the framework of the up-coming
negotiations of investment agreements with third countries such as China.

The new strategy will be mainly implemented
through Horizon 2020, as well as through joint initiatives with EU Member
States. A central element is the development of multi-annual roadmaps with key
third country partners to enhance and focus international cooperation. These
roadmaps will connect to the work of the Strategic Forum for International
Science and Technology Cooperation (SFIC) to ensure consistency and
complementarity between actions taken by the EU and the Member States. The SFIC is currently engaged in three targeted initiatives
with India, the USA, and China, and in October 2012 agreed to launch an
initiative on Brazil.

The Group of Senior Officials (GSO)[50] set out recommendations for a Framework for international
cooperation on global research infrastructures. The report has been broadly
endorsed by the science ministers of the CARNEGIE group[51].

Nearly all Member States have taken some
action to attract more talent from overseas[52],
but it is too early to judge the success of these measures. The Commission
intends in 2013 to table a new proposal for a single Directive to make EU
migration rules simpler for certain groups, including researchers, ensuring
that admission schemes and rights are uniform and transparent across the EU.

4.           CONCLUSIONS AND NEXT
STEPS

The economic situation in Europe remains
fragile. The short-term outlook is still precarious. Nevertheless, positive
trends are visible and recent in-depth reforms should bear fruit in the medium
to long term.

Europe's answer to
the uncertainty fuelled by the crisis must be to rigorously pursue and rapidly
implement the Innovation Union strategy set out in 2010. Good progress has already
been made in many areas. Results of this should start being reflected in the
real economy. Innovation Union will help create a climate of confidence in the
European Union for businesses and citizens. It will do so through sustained
investment in research and innovation, further sweeping reforms to create a
true European Research Area, setting better framework conditions for innovative
businesses and better matching supply- and demand-side measures.

However, Europe needs to do more to make
the Innovation Union a reality. In light of the on-going crisis, decreasing public
confidence and the risk of an innovation divide, the EU and its Member States must speed up their joint efforts and deepen the Innovation Union.

The immediate challenge is the extent to
which the Innovation Union will foster the emergence of truly ʻspecialisedʼ
regional innovation profiles embracing the increasing fragmentation of value
chains and the increasing heterogeneity of required knowledge inputs. More
attention to the role of regional innovation policy is the only viable way to compensate
and possibly off-set the talent brain drain from Europe’s less-favoured regions
towards Europe’s research excellence hotspots[53].

To help address the reflection on new
sources of growth, the Commission will, in addition to pursuing the
implementation of the agreed Innovation Union measures, prepare next steps for
deepening the Innovation Union. These are based on emerging trends, expert
advice and views of stakeholders. They will focus on:

–
accelerating structural change within existing
sectors and by diversifying into new emerging sectors, and supporting the
development of high-growth innovative enterprises through EU policies and
coordinated additional initiatives;

–
closing the innovation divide between European
regions through smart specialisation and synergies between Horizon 2020 and the
structural funds;

–
working on innovation-friendly framework
conditions for innovative businesses, including innovation clusters;

–
identifying concrete ways of boosting innovation
in and through the public sector;

–
developing a coherent policy
approach for open innovation and knowledge transfer;

–
accounting for the value of intellectual property,
facilitating patent valorisation and ensuring the sound and effective protection of know-how and
confidential business information in order to facilitate knowledge transfer;

–
driving retail innovation as a key action of the
European Retail Action Plan, helping smooth the path from idea to market for
innovative products and services by tapping the potential of the retail sector
with its economic weight (4.3% of EU GDP and 8.3 % of EU employment) and direct
contact with consumers;

–
combining new technologies and services with
innovation in business models.

To bring about real change, Europe has to step up its commitment to deliver innovation-based growth. Innovation Union objectives should drive the future agenda for European
integration. No country alone can deliver an innovative EU economy. It is time
for European institutions, Member States, regions and all stakeholders to pitch
in.

ANNEX

Annex: 2012
progress on 34 commitments set out in the Innovation Union flagship initiative COM (2010) 546 final

In green = commitments that are on track
and for which initiatives are on-going and progressing well;

In orange = commitments with delayed/partially
implemented measures;

In red = comitments for which no
initiatives have been taken up.

More information on each commitment
available at: http://i3s.ec.europa.eu/home.html

|| Innovation Union commitment || Deadline || Progress

1 || Put in place national strategies to train enough researchers || 2011 ||

2 || Test the feasibility of independent university ranking || 2011 ||

Create business-academia "Knowledge Alliances" ||

3 || Propose an integrated framework for e-skills || 2011 ||

4 || Propose an ERA framework and supporting measures || 2012 ||

5 || Construct the priority European Research Infrastructures || 2015 – 60% ||

6 || Simplify and focus future EU research and innovation programmes on the Innovation Union || 2011 ||

7 || Ensure stronger involvement of SMEs in future EU R&I programmes || ||

8 || Strengthen the science base for policy making through the JRC; Set up a Forum on Forward-Looking Activities || ||

9 || Set out the EIT strategic agenda || Mid 2011 ||

10 || Put in place EU-level financial instruments to attract private finance || 2014 ||

11 || Ensure the cross border operation of venture capital funds; taxation || 2012 ||

12 || Strengthen the cross border matching of innovative firms with investors || ||

13 || Review the State Aid Framework for R&D&I || 2011 ||

14 || Deliver the EU Patent || 2014 ||

15 || Screen the regulatory framework in key areas || Start in 2011 ||

16 || Speed up and modernise standard-setting || Early 2011 ||

17 || Set aside dedicated national procurement budgets for innovation || Start in 2011 ||

Set up an EU-level support mechanism and facilitate joint procurement || ||

18 || Present an eco-innovation action plan || Early 2011 ||

19 || Set up a European Design Leadership Board || 2011 ||

Establish a European Creative Industries Alliance || ||

20 || Promote open access; support smart research information services || ||

21 || Facilitate collaborative research and knowledge transfer ||   ||

22 || Develop a European knowledge market for patents and licensing || 2011 ||

23 || Safeguard against the use of IPRs for anti-competitive purposes || ||

24/ 25 || Improve the use of Structural Funds for research and innovation || Start in 2010 Platform by 2012 ||

26 || Launch a Social Innovation pilot; promote social innovation in the European Social Fund || ||

27 || Support a research programme on public sector and social innovation || Start in 2011 ||

Pilot a European Public Sector Innovation Scoreboard

28 || Consult social partners on interaction between the knowledge economy and the labour market || ||

29 || Pilot and present proposals for European Innovation Partnerships || 2011 ||

30 || Put in place integrated policies to attract global talent || 2012 ||

31 || Propose common EU/MS priorities and approaches for scientific cooperation with third countries || 2012 ||

32 || Roll-out global research infrastructures || 2012 ||

33 || Self-assess national research and innovation systems and identify challenges and reforms; || ||

34 || Develop an innovation headline indicator || ||

Monitor progress using the Innovation Union Scoreboard || ||

[1]               Innovation Union Scoreboard 2013

[2]               Idem.

[3]               1st Position paper of the European
Research Area and Innovation Board (ERIAB): "Stress-test" of the
Innovation Union; November 2012, forthcoming at http://ec.europa.eu/research/era/partnership/expert/eriab_en.htm

[4]               State of the Innovation Union 2011, COM (2011) 849

[5]               For some of these Member States, the difference can
be partly compensated by foregone tax revenues due to the use of fiscal
incentives for R&D investment.

[6]               The 2012 EU Survey on R&D Investment Business
Trends , European Commission, 2012

[7]               'Internationalisation of business investments in
R&D and analysis of their economic impact', European Commission, 2012, http://ec.europa.eu/research/innovation-union/index_en.cfm?pg=other-studies.

[8]               'Dead money', The Economist, 3 November 2012

[9]               The 2012 EU Industrial R&D investment scoreboard,
European Commission, 2012, http://iri.jrc.ec.europa.eu/research/scoreboard_2012.htm

[10]             When asked about effects of policies and external
factors on their innovation activities, top EU companies highlight the strong
positive effects of fiscal incentives, national grants, EU financial support
and public-private partnership both at national and EU level (source: see
footnote 4).

[11]             Government budget
appropriations or outlays for R&D (GBAORD).

[12]             Science, Technology and Industry Scoreboard 2011, OECD
.

[13]             European Commission Staff Working Document ' Education
and Training Monitor 2012'

[14]             European Commission COM(2012)
669/3 'Rethinking Education: Investing in skills for better socio-economic
outcomes'

[15]             The linear interpolation indicates the correlation
between the two variables in Figures 3 and 5. The size of the bubble reflects
the size of the economy (as a share of EU GDP).

[16]             'Country
profiles : description of the performance and key features of Member
States’ research and innovation systems' , Staff Working Document accompanying
the communication

[17]              ́Researchers' Report 2012, commissioned by DG Research
and Innovation, http://ec.europa.eu/euraxess/pdf/research_policies/121003_The_Researchers_Report_2012_FINAL_REPORT.pdf

[18]             See annex Country profiles: description of the
performance and key features of Member States' research and innovation
systems'. Information can also be found in the Impact Assessment annexed to the
EC communication "A Reinforced European research Partnership for
excellence and growth", 17.07.2012 (COM 2012 392 final)

[19]             ERAC's Opinion on the Commission's Annual Growth Survey,
February 2012

[20]             In addition, the Commission will publish in the coming
weeks a green paper on long-term financing of the European economy where the
drivers and constraints to long term financing as well as ideas for action and
possible new instruments/initiatives will be presented.

[21]             European Commission (2011), Policies in support of
high-growth innovative SMEs, INNO-Grips Policy Brief No 2.

[22]             COM(2012)669

[23]             COM(2012)392final.

[24]             SWD(2012)212,
Commission Staff Working Document – Impact Assessment accompanying
Communication (2012)392 final

[25]             COM (2012) 401 final and COM (2012) 417 final

[26]             This new scheme, inspired by
the SBIR scheme in the United States, is also a response to the request made by
the European Council in 2011 to explore how best to meet the needs of
fast-growing innovative companies through a market-based approach.

[27]             Report of the Chairman of the expert group on the cross
border matching of innovative firms with suitable investors; European
Commission 2012; http://ec.europa.eu/transparency/regexpert/index.cfm?do=groupDetail.groupDetailDoc&id=6008&no=1

[28]             COM(2011) 860 final and COM(2011) 862
final .

[29]             Innovation procurement includes pre-commercial
procurement (PCP) and public procurement of innovative solutions (PPI).

[30]             €170 Mio Italian national funding, combined with
additional EU Structural funds and EIB support.

[31]             PCP is a method for
procuring R&D services with the purpose of developing a new product or
solution.

[32]             COM(2011) 899 final.

[33]             http://ec.europa.eu/environment/ecoap/index_en.htm

[34]             http://www.glassplus.eu/home.aspx,
http://www.saturn.rwth-aachen.de/

[35]             Adoption of the two regulations
implementing enhanced cooperation in the area of the creation of unitary patent
protection http://ec.europa.eu/internal_market/indprop/patent/index_en.htm

[36]             http://www.epo.org/searching/free/patent-translate.html

[37]             SWD (2012) 458 final,

[38]             COM(2012)537 final.

[39]             http://webgate.ec.europa.eu/eipaha

[40]             See annex on Member State's performance accompanying the
communication

[41]             http://ec.europa.eu/enterprise/policies/innovation/files/ris-2012_en.pdf

[42]             See http://ec.europa.eu/regional_policy/what/future/proposals_2014_2020_en.cfm

[43]             http://s3platform.jrc.ec.europa.eu

[44]             http://www.socialinnovationeurope.eu/

[45]             COM(2011) 682 final of 25th
October 2011

[46]             The PROGRESS programme is an EU financial instrument http://ec.europa.eu/research/infrastructures/index_en.cfm?pg=success9

[47]             COM(2012) 573 final of 3rd
October 2012

[48]             Pilot European Public Sector Innovation Scoreboard 2013

[49]             COM(2012)497

[50]             The GSO is composed by
representatives from Brazil, Canada, China, the European Commission, France, Germany, India, Italy, Japan, Mexico, Russia, South Africa, UK, and USA. Australia obtained the status of observer country since November 2011

[51]             The Carnegie Group is composed
of Science ministers/ advisors of the G8 + European Commission + Outreach 5
(Canada, France, Germany, Italy, Japan, Russia, UK, US + Brazil, China, India,
Mexico, South Africa)

[52]             Researchers' report 2012

[53]             1st Position paper of the European Research
Area and Innovation Board (ERIAB): "Stress-test" of the Innovation
Union; November 2012