# EUR-Lex - 52011PC0822 - EN

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# 52011PC0822

**Proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the Strategic Innovation Agenda of the European Institute of Innovation and Technology (EIT): the contribution of the EIT to a more innovative Europe /* COM/2011/0822 final - 2011/0387 (COD) */**

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EXPLANATORY MEMORANDUM

1.           CONTEXT OF THE PROPOSAL

The European Institute of Innovation and
Technology (EIT) has been set up by Regulation (EC) 294/2008 with the objective
of contributing to sustainable economic growth and competitiveness by
reinforcing the innovation capacity of the EU and its Member States via the
full integration of the knowledge triangle. According to the provisions of the
Regulation, and based on a draft proposal from the EIT, the Commission shall
adopt before the end of 2011 a proposal for adoption by the European Parliament
and the Council of the EIT Strategic Innovation Agenda, which will define
long-term priority fields for the EIT, including an overview of the planned
higher education, research and innovation activities, for a period of seven
years.

The EIT submitted its first draft Strategic
Innovation Agenda to the Commission before 30 June 2011.

2.           RESULTS OF CONSULTATIONS
WITH THE INTERESTED PARTIES AND IMPACT ASSESSMENTS

The preparation of the proposal took
account of the responses to the open public consultation on the EIT as well as
the results of the open public consultation on the Common Strategic Framework
for Research and Innovation Funding. Views were expressed by the Member States
and a wide range of stakeholders from industry, academia and civil society. It
showed a strong support to the mission of the EIT to drive more and better
cooperation between the worlds of higher education, entrepreneurship, research
and innovation. According to respondents, the EIT should play a distinctive
role in 'Horizon 2020', the future EU Programme for Research and Innovation,
and forge closer links with other European and national efforts. A majority of
respondents praised the way in which the EIT ensures the participation of
businesses in its work and urged the Institute to step up its outreach
activities. Moreover, respondents considered business involvement as highly
relevant for the future success of the EIT. Flexibility, clarity on rules and
clear returns on investment are therefore fundamental in order to attract
private sector participation.

The proposal also relies on the external
evaluation report in which the concept of integrating the knowledge triangle,
as well as the themes around which the EIT is structured, are regarded as highly
relevant. There is much support for the model which has been developed by the
EIT, based around long-term highly integrated networks of co-location centres.
Respondents were also positive, and consistent, in their perspective that the merit
of the KICs was to act as a catalyst for creating additional value from the
activities which individual members already undertake on a more fragmented
basis.

3.           LEGAL ELEMENTS OF THE
PROPOSAL

The proposal is based on Article 173(3) of
the Treaty on the Functioning of the European Union (TFEU). It builds on the
provisions laid down in the EIT Regulation and complements the proposals
included under the Horizon 2020 package.

4.           BUDGETARY IMPLICATION

The legislative financial statement
attached to the proposal amending the Regulation establishing the EIT sets out
the budgetary, human and administrative resource implications.

2011/0387 (COD)

Proposal for a

DECISION OF THE EUROPEAN PARLIAMENT
AND OF THE COUNCIL

on the Strategic Innovation Agenda of the
European Institute of Innovation and Technology (EIT): the contribution of the
EIT to a more innovative Europe

(Text with EEA relevance)

THE EUROPEAN PARLIAMENT AND THE
COUNCIL OF THE EUROPEAN UNION,

Having regard to the
Treaty on the Functioning of the European Union (TFEU) and in particular
Article 173(3) thereof,

Having regard to Regulation
(EC) No 294/2008 of the European Parliament and of the Council
of 11 March 2008 establishing the European Institute of Innovation and
Technology[1],
,

Having regard to the proposal from the
European Commission,

After transmission of the draft legislative
act to the national Parliaments,

Having regard to the opinion of the
European Economic and Social Committee[2],

Acting in accordance with the ordinary
legislative procedure,

Whereas:

(1)
Regulation (EC) No 294/2008 requires the
Commission to submit a proposal for the first Strategic Innovation Agenda
(hereinafter referred to as the SIA), on the basis of the draft provided by the
European Institute of Innovation and Technology.

(2)
The SIA should define long-term priory fields
for the European Institute of Innovation and Technology ("the EIT")
and include an assessment of its economic impact and capacity to generate best
innovation added-value. The SIA should take into account the results of the monitoring
and evaluation of the EIT.

(3)
The first SIA should include detailed
specifications and terms of reference concerning the operation of the EIT, the
modalities for co-operation between the Governing Board and the Knowledge and
Innovation Communities (hereinafter referred to as the KICs) and the modalities
for the funding of the KICs,

HAVE ADOPTED THIS DECISION:

Article 1

The Strategic Innovation Agenda of the European
Institute of Innovation and Technology as set out in the annex is hereby
adopted.

Article2

This
Decision shall enter into force on the twentieth day following that of its
publication in the Official Journal of the European Union.

Done at Brussels,

For the European Parliament                       For
the Council

The
President                                                 The President

ANNEX
THE EIT STRATEGIC INNOVATION AGENDA

1.
The european institute of innovation and
technology: an EU innovation player:

The Strategic Innovation Agenda (SIA) outlines the priorities for
the European Institute of Innovation and technology (EIT) over the period 2014-2020
as well as the modalities for its operation. It is therefore a key tool of
European policy makers to steer the strategic direction of the EIT, while
leaving considerable autonomy to the Institute in defining the ways and means
to achieve the set goals.

The SIA is the result of an in-depth process that has sought to take
stock of the EIT experience so far, and to fully reflect the reality of the
European innovation landscape. It is based on a first SIA draft from the EIT
Governing Board submitted to the European Commission on 15 June 2011, in
conformity with the requirements of the EIT Regulation. It also builds on the
results of an independent evaluation of the EIT's initial period as well as on a
consultation process open to all those having a current or potential stake in
the EIT's activities, including businesses, higher education institutions, and
research organisations, as well as national and regional authorities.

1.1.
EIT: Addressing societal challenges via
innovation in the knowledge triangle

In a rapidly changing world, Europe's
pathway to the future rests on growth which is smart, sustainable and
inclusive. To achieve this goal and to remain competitive in the global
knowledge economy, the 'knowledge triangle' of research, education and
innovation and the interaction between these three sides have been recognised
as key driving forces. The European Union has acted accordingly and identified
these fields as policy priorities in its Europe 2020 strategy. These priorities
are notably implemented through the flagship initiatives 'Innovation Union' and
'Youth on the Move', which form the overarching policy framework for EU actions
in these fields. They are complemented by the flagship initiatives on an
'Integrated Industrial Policy for the Globalisation Era' and on a
'Resource-Efficient Europe'. The European Institute of Innovation and
Technology will fully contribute to achieving the goals of these flagship initiatives.

The reasons for putting research, education
and innovation at centre stage are straightforward. In a context of increasing
global competition and facing a demographic challenge at home, Europe's future
economic growth and jobs will increasingly come from innovation breakthroughs
in products, services and business models as well as from its ability to
nurture, attract and retain talent. While there are individual success stories
across Europe, EU Member States on average underperform in comparison with
global innovation leaders. Moreover, the EU is facing increased competition for
talent from new centres of excellence in emerging economies.

A genuine change in our innovation systems
and paradigms is therefore necessary. Still too often, excellence in higher
education, research and innovation, while clearly existing across the EU,
remains fragmented. Europe needs to overcome this lack of strategic
co-operation across boundaries – countries, sectors and disciplines. Moreover,
Europe needs to embrace a true entrepreneurial culture, which is essential for
capturing the value of research and innovation, for setting-up new ventures and
actual market deployment of innovations in potential high-growth sectors.
Europe needs to foster the role of higher education institutions as engines of
innovation, as talented people need to be equipped with the right skills,
knowledge and attitudes in order to drive innovation forward.

The EIT has been set up precisely to this
end – to contribute to sustainable economic growth and competitiveness by
reinforcing the innovation capacity of the Union and its Member States. By
fully integrating the knowledge triangle of higher education, research and
innovation, the Institute will strongly contribute to tackling societal
challenges under Horizon 2020 and bring about systemic change in the way
European innovation players collaborate.

To achieve this goal, the EIT combines
strategic orientation at EIT level with a bottom up approach through its
Knowledge and Innovation Communities (KICs). KICs are highly integrated
partnerships, bringing together excellent universities, research centres, small
and large companies and other innovation actors on a long-term basis around specific
societal challenges. Each KIC is organized around a small number of interconnected
co-location centres where partners work closely together on a daily basis and
with an unprecedented degree of common strategic objectives. Co-location
centres build on existing centres of excellence, developing them further into
local innovation ecosystems and linking them together into a broader network of
innovation nodes across Europe. Within the EIT framework , the individual KICs
have been given a large degree of autonomy in defining their internal
organisation, composition, agenda and working methods, allowing them to choose
the approach that is best suited to meet their objectives. At strategic level,
the EIT organizes the selection process of KICs, coordinates them with a
flexible framework and disseminates their best governance and funding models.

Through the KICs, the EIT helps to create
environments where innovation is more likely to thrive and to generate
breakthroughs in the way higher education, research and business collaborate. This
approach helps addressing the increasingly complex societal challenges set out
in Horizon 2020 in a holistic way, bringing together excellent people from
different sectors, backgrounds and disciplines – who otherwise would not
necessarily meet – to jointly find solutions to the challenge.

Achievements

The EIT has completed its initial phase,
which was dedicated to launching its operations through the KICs and to put in
place the EIT decision making and executive functions – Governing Board and headquarters.
The EIT has also been successful in reaching its main objective - the full
integration of the entire innovation chain, bringing together higher education
institutions, research organisations and businesses via three initial Knowledge
and Innovation Communities, established in 2010 in areas identified by Council
and Parliament as essential to Europe's future development. These are sustainable
energy ('KIC InnoEnergy'), climate change adaptation and mitigation
('ClimateKIC') and future information and communication society ('EIT ICT
Labs').

Moreover, the EIT is now consolidating
itself as an innovation institution through the headquarters in Budapest. It
has also set up the EIT Foundation, a legally independent organisation
dedicated to promoting and supporting the work and activities of the EIT, and
to enhancing the EIT's societal impact.

KICs on their way to world class
integrated partnerships

The current three KICs have succeeded in
achieving critical mass in their respective areas, including a balanced participation
from the different components of the knowledge triangle. The combined strength
of partners in a KIC – both in number and in the weight they represent in their
respective fields – gives them the potential to be world class.

Graph 1- KICs co-location

The KICs have followed differentiated
approaches in building up their strategies and governance structures,
reflecting different thematic fields. One KIC has been set up as a company
while two others are non profit associations. All are structured around
approximately 30 core partners and five to six co-location centres, which are
usually flanked by a varying number of additional affiliate partners, including
small and medium sized enterprises (SMEs).

The set-up of the KICs as single legal
entities led by a Chief Executive Officer (CEO) provides a clear departure from
a traditional multi-beneficiaries approach. Moreover, all KICs follow business
logic for the strategic planning of their activities, and all KICs have
implemented the co-location concept: bringing diverse teams together in one
physical place, acting as a clearing house for many KIC activities, and
combining competences and skills developed in different areas of specialisation
at pan-European level.

KICs activities span the entire innovation
chain and include among others the setting up of EIT labelled Master and PhD
programmes which combine excellent science with entrepreneurship education,
business creation services, and mobility schemes. With the KICs' initial
activities focused on talent and people, first results have been achieved on
education and entrepreneurship, including the setting up of Masters and PhD programmes.
Two KICs have joined forces and co-operate in a joint Master programme in Smart
Grids.

The
KICs' achievements in their first year (2010-2011) are promising:

Nearly
500 students completed their training on summer courses and more than 200
students are presently enrolled in specific KIC-branded Master courses. And
demand from talented people is high: KIC InnoEnergy for example received 950
applications for their Master course with 155 students who could be admitted. Students
which graduated from ClimateKIC courses in 2010 and 2011 have formed an alumni
association with the aim to maintain long-term involvement with the KIC.

Six
start-ups have already been created with seed money from prizes and awards or
with support from the KICs. More than 50 start-ups are presently undergoing
incubation activities. EIT ICTLabs is supporting 18 small companies with
business coaches.

Links
within the knowledge triangle were established at regional level via
cross-disciplinary professional development programmes, such as Climate KICs'
'Pioneers in practice' programme (59 individuals have attended this mobility
scheme so far).

New
Intellectual Property (IP) rules were established stipulating sharing the
profits from IPR between companies involved and the KIC legal entity.

Graph 2 -KIC partners 2011 (Business,
HE, Research)

1.2.
EIT added value: distinguishing features

The EIT approach is characterized by a
number of elements by which it brings true added value at Union level:

·
Overcoming fragmentation via long-term integrated
partnerships and achieving critical mass through its European dimension: Building on existing cooperation initiatives, the EIT brings the
selected partnerships in the KICs to a more permanent and strategic level. KICs
allow world-class partners to unite in new configurations, optimize existing
resources, access new business opportunities via new value chains addressing
higher risk, and larger scale challenges. Moreover, while there are a
significant number of centres of excellence across EU Member States, they often
do not attain the critical mass for global competition individually. The KICs'
co-location centres offer strong local actors the opportunity to closely
connect to other excellent partners across borders, thereby allowing them to act
and be recognized globally.

·
Enhancing the impact of investments on
education, research and innovation and testing new ways for innovation
governance: The EIT acts as a catalyst, adding
value to the existing research base, by accelerating the take-up and exploitation
of technologies and research outcomes. Innovation activities contribute in turn
to align and leverage research investments and to make education and training
activities more responsive to business needs. To this end, the EIT has been
equipped with a substantial degree of flexibility to test out new innovation
models, allowing for true differentiation in the KICs' governance and funding
models and quick adaptation to better cope with emerging opportunities.

·
Nurturing talent across borders and fostering
entrepreneurship through knowledge triangle integration: The EIT nurtures people-driven innovation and puts students,
researchers, and entrepreneurs at the heart of its efforts. It provides new
career paths between academia and the private sector, and innovative schemes
for professional development. The EIT label attached to innovative KICs'
Masters and PhD programmes will contribute to creating an internationally
recognized brand of excellence helping to attract talent from Europe and
abroad. Entrepreneurship is fostered through a new generation of world-class
students, equipped with the knowledge and attitudes to turn ideas into new
business opportunities.

·
Smart funding through leverage combined with
a results- and business-oriented approach: The EIT
provides up to 25% of the KICs budget and catalyzes 75% of financial resources
from a wide range of public and private partners, creating a significant leverage effect by pooling large–scale
investment and streamlining different sources of public and private towards
jointly agreed strategies. Moreover, by focussing on both market and societal
impact, the EIT follows a results-oriented approach. KICs operate according to
a business logic, on the basis of annual business plans, including an ambitious
portfolio of activities from education to business creation, with clear
targets, deliverables and key performance indicators (KPIs) against which they
are measured.

1.3.
Synergies and complementarities with other
policy and funding initiatives

The inter-relationships between research,
innovation and education are increasingly being recognised within EU
initiatives and programmes. There is great potential for mutually reinforcing
actions at European, national and regional level. At EU level, the strategic
framework provided by Horizon 2020 – the Framework Programme for Research and
Innovation (2014-2020) – will further ensure these synergies are fully exploited.

The EIT will strongly contribute to the
objectives set out in Horizon 2020, in particular by addressing societal challenges
in a complementary way to other initiatives in these areas. Within Horizon
2020, the EIT will be part of the "tackling societal challenges"
objective but following the approach of seamless interaction across objectives,
it will also contribute to "industrial leadership and competitive
frameworks" by stimulating results-driven research and fostering the
creation of high growth innovative SMEs. Finally, it will contribute to the
creation of an "excellent science base" by fostering mobility across
boundaries – of disciplines, sectors and countries – and by embedding
entrepreneurship and a risk-taking culture in innovative post-graduates
degrees. The EIT will thereby significantly contribute to promoting the
framework conditions that are needed to realise the innovative potential of EU
research and to promote the completion of the European Research Area (ERA).

Moreover, the EIT brings a fully fledged
education dimension to the EU's research and innovation policy. Via innovative,
entrepreneurial education it plays an important bridging role between the
research and innovation framework and education policies and programmes and
provides the long term commitment needed to deliver sustainable changes in
higher education. Notably through new, trans and interdisciplinary EIT-labelled
degrees the EIT is leading a collaborative effort towards education for
innovation with clear spill over effects on the broader European agenda for the
modernisation of higher education institutions thereby promoting the European Higher
Education Area.

Moreover, there are opportunities for
mutually reinforcing interaction with the Union's Cohesion Policy by addressing
the linkages between the local and global aspects of innovation. Co-location
centres provide for cross-border collaboration and are well positioned to
capitalise on various funding schemes from their respective regions. The
co-location centres play a major role in strengthening the local-global
connectivity of the KIC as a whole, including through close co-operation with
regional authorities, in particular those involved in designing and delivering
the Regional Innovation Strategies for Smart Specialisation (RIS3). Furthermore,
linkages between KICs and local cluster organisations could be strengthened to
increase the involvement of SMEs in the activities of the KICs. While
opportunities for synergies differ depending on the thematic area of a KIC, a
number of initiatives and programmes at EU level seem particularly prone to
offering benefits from cooperation and coordination. As the very concept of the
EIT/KICs rests on adding value to existing European excellence, the KICs –
present and future – will by definition seek to explore these synergies to a
maximum. KICs will add value to initiatives that may exist in the relevant
areas, including Joint Programming Initiatives (JPIs), European Innovation
Partnerships (EIPs) and Public Private Partnerships (PPPs).

Joint Programming Initiatives, a key
instrument for addressing fragmentation in research, should provide the nucleus
of the pan-European KIC research base. In turn, KICs can speed up and foster
the exploitation of excellent public research pooled together by the JPIs,
thereby addressing fragmentation in innovation. The Joint Technology
Initiatives (JTIs) and the newly established Public and Private Partnerships
provide platforms for promotion of large-scale industry-driven research and
enhance the development of major technologies. KICs can help catalysing these
major research investments to boost technology transfer and commercialisation
and to develop new ventures within existing business via entrepreneurial
talent. Through its knowledge triangle approach, the EIT will complement
investment of the European Research Council (ERC) on world-class frontier
research by addressing the whole innovation chain from ideas to application and
exploitation and provide additional opportunities in innovation and exposure to
entrepreneurship to 'Marie Curie' researchers and 'Erasmus for all' students.

The upcoming European
Innovation Partnerships will provide overarching frameworks to facilitate
alignment and synergies among supply and demand-driven research and innovation
instruments and policies. The KICs can contribute to
the EIPs through their distributed nature and on the ground experience, and in
particular by developing the necessary human capital, educating key actors such
as entrepreneurs and researchers, and identifying
framework conditions and best practise on policy, regulatory or standardisation
issues in their relevant sector.

In practice, opportunities for synergies
will materialise in different ways, from KIC to KIC and challenge to challenge.
Today, linkages are being developed at KIC level with other initiatives,
varying according to the specificities of each KIC and its thematic area.

Examples
of synergies between KICs and other initiatives in practice (as of 09/2011)

·
EIT ICT Labs liaises and works closely with
the future Internet Public Private Partnership, the Artemis Joint Technology
Initiative and EUREKA initiatives such as ITEA (Information Technology for
European Advancement), and the Trust in Digital Life partnership. By applying
KIC "catalysts" such as the Innovation Radar, the Patent Booster and
the Technology Transfer along the lifecycle of EU funded research projects, EIT
ICT Labs boosts their market impact. By offering access to its co-location centres
it can enhance the mobility of people and ideas across Europe.

·
KIC InnoEnergy contributes to the delivery of
the EU's Strategic Energy Technology Plan (SET Plan), through inter alia, its
participation in the SETIS platform on technology watch and mapping. It also
currently interacts with the Commission's Joint Research Centre (JRC) for the
simulation capabilities in building scenarios.

·
Climate KIC is actively providing synergies
with Joint Programming Initiatives (JPIs) in the area, as the innovation agenda
and implementation plan of Climate KIC will be partially based on the common
strategic agenda identified in the JPI climate (climate services and adaptation).
Climate KIC Regional Innovation and Implementation Communities (RICs) provide
an original pan-European regional innovation model, which uses regions as test
beds, linking up the development of
managerial capability and regional strengths to global challenges.

2.
2. Deepening the role of the EIT after 2013:
priorities
2.1.
Incentivizing growth, impact and sustainability through
the EIT

Lessons from the
set up phase

The process of setting up the initial KICs
has involved a substantial 'learning by doing'. It has shown that KICs are novel concepts and the challenge of
getting legally organised as a KIC and forming contractual relationships with
KICs and their partners was underestimated by all parties involved in the
process. A lack of awareness of the suitability of different forms of legal
entity did not help smoothing the set-up process. While the bottom-up approach,
which gives substantial leeway to each KIC to organise their partnerships is to
be maintained, further guidance should be given to identify suitable legal
set-ups. Moreover, the challenge of bringing different academic and business
cultures together into one legal entity should not be underestimated; hence the
importance of sharing common values at both KIC and EIT level. Furthermore,
KICs are large scale institutional innovations, and no two KICs are the same.
This offers a rich array of innovation models, but also renders the overall
coordination and monitoring of KICs more challenging.

In the future, clearer guidance should be
given upstream since the selection process to ensure that essential strategic
features are shared by all KICs, while allowing for differentiated approaches
in KICs organisation, delivery and funding approaches. Finally, the current
total number of three KICs does not yet provide the critical mass for the EIT
to develop its full potential as a leading innovation Institute. With only three
KICs there are limited opportunities to achieve cross-KIC benefits of adjacent
innovation opportunities as well as to reap economies of scale in
administration and dissemination. It also means that the EIT is not of a
sufficient scale to truly act as a European institution in its own right. In
this respect additional KICs are required in order for the EIT to gain the
critical mass for being more than simply the ‘sum of its parts’. If the EIT is
to explore new innovation governance and management models through the KICs, a
limited number of additional partnerships need to be set up in order to enlarge
the sample on which the EIT experience is based upon.

The EIT as an
investor in the knowledge triangle

Building on these lessons the EIT aims to
consolidate and further develop its role as an 'investor' which nurtures and
enables existing centres of excellence in research, business and higher education
in Europe to come together and foster their long-term systematic collaborations
through the KICs.

The 'EIT investor' approach stands for a
focus on identifying best strategic opportunities and selecting a portfolio of
world-class partnerships – the KICs – to deliver on these. As part of this
approach, the EIT awards the annual grants to the KICs
based on their past performance and proposed activities in their business plan.
The assessment of the business plans will be supported by external, independent experts. In this perspective, the EIT should not only set out broad
directions and visions, but needs to provide KICs with an appropriate level of
support and monitor their performance. At the same time, KICs are given a
substantial degree of leeway to define their internal strategies and
organisation as well as to deliver their activities and mobilise the talent and
resources needed.

Returns on EIT investment in KICs will be
measured in terms of tangible benefits for the European economy and society at
large, such as creation of new business, products and services in existing and
future markets, better skilled entrepreneurial people, new and more attractive
job opportunities and the attraction and retention of talent from across the EU
and abroad.

This requires the set-up of a robust
monitoring and evaluation system for the EIT, focusing on achievements, outputs
and generation of both economic and societal impact to be benchmarked against
best international practices. Setting up a balanced performance monitoring
system to assess the EIT impact via the KIC, the EIT own performance as an
organisation and the EIT contribution to Horizon 2020 is a priority in this
direction.

An important element in this regard is also
the development, together with the KICs, of a true EIT 'corporate identity'
around a set of shared values. While all KICs and their individual partners do
have their own corporate identities and values, they all share values that
bring the EIT/KICs community together. They are: excellence across the
knowledge triangle; skilled and entrepreneurial people; long-term collaboration
across borders, disciplines and sectors; and the focus on societal and economic
impact. Such an identity will also enhance the external visibility and
reputation of the EIT and KICs.

2.1.1.
Consolidating and fostering growth and impact of
the existing KICs

The EIT will actively support the initial
three KICs to enhance their potential and impact and their contribution to the
objectives of Horizon 2020. Over time, the KICs will expand their initial
portfolio of activities in order to seize new market or societal opportunities.
To support these developments, the EIT will advise and define, in close
co-operation with each individual KIC, tailor-made co-financing strategies,
which at the same time underpin strategic activities from an EIT perspective.

KICs should remain dynamic partnerships and
hence be open to new partners but also to discontinue existing ones if
appropriate. The KIC should tap into new sources of existing and potential
excellence whenever they bring added value, through participation of new
partners in the existing co-location centres, enhanced cross-co-location work
within each KIC or even, the set-up of a new co-location centre, while keeping
their KIC partnership focused, robust and manageable.

A good balance between co-operation and competition is equally
important for bringing KICs to maximum performance. The EIT will incentivize
KICs to engage in cross-KIC work in areas which offer a strong potential for
synergies, e.g. via joint professional development courses, joint research
activities, masters or PhDs degrees or cross-KIC mobility between academia and
business. At the same time, the EIT will provide incentives for a certain
degree of competition to encourage KICs to stay focused on results and impact
and take appropriate measures in case of underperformance.

KICs not only build on their partners'
existing excellent research base, but are also the frontrunners for promoting
and implementing the EIT's educational mission. The objective is to educate and
train talented people with the skills, knowledge and mindset needed in a global
knowledge economy. To this end, the EIT actively promotes, inter alia, the
EIT-labelled degrees by monitoring their quality and coherent implementation
across KICs. In this endeavour they will make extensive use of peer and expert
evaluations, and establish a dialogue with national and quality assurance
bodies. This will enhance the national and international recognition of the EIT
labelled qualifications and raise their attractiveness globally, while
providing a platform for collaboration at international level. In the future,
KICs will be encouraged to expand their educational activities beyond
post-graduate education to a greater variety of study modes to cater for a
wider range of innovative, professional development activities, involving
executive education, tailor-made training courses and summer schools. To
enhance the impact of KICs' educational activities and to reach out to a wider
audience, KICs may envisage the design, on an experimental basis, of modules
for undergraduate courses or packages targeted to school education.

The EIT
will:

·
Gradually set- up competitive review
mechanisms for the allocation of a percentage of the KICs grant, which will
take into account that KICs grow at different speeds.

·
Incentivise KICs to develop joint activities on
cross-cutting issues .

·
Set up a system of peer evaluations for EIT
labelled qualifications and engage in dialogue with national and international
quality assurance bodies.

·
Encourage KICs to develop a greater variety
of educational and training activities.

2.1.2.
Creating new KICs

In order to further enhance impact and to
incentivise innovation in new areas of societal challenges, the EIT will
gradually expand its portfolio of KICs. By following an incremental development
path in establishing new KICs, the EIT will ensure that lessons learned from
previous rounds are duly taken into consideration, and that KICs are set up
only in areas where there is a clear innovation potential and top-class
excellence to build on. In the period 2014-2020, new KICs will therefore be set
up in two waves, i.e. three new KICs each in 2014 and 2018, leading up to a
portfolio of nine KICs in the period 2014-2020 (equalling the set-up of 40-50
co-location centres across the EU). A potential new selection process for KICs
in 2018 shall strongly build on the results of a thorough external evaluation
of the EIT and existing KICs, including an assessment of KICs' economic and
societal impact and the contribution of the EIT to strengthening the innovation
capacity of the EU and Member States, as well as on the results from the
evaluations of Horizon 2020.

New KICs will be set up in areas
of large societal challenges which offer a true innovation potential. The EIT
thereby fully contributes to the goals of the larger EU policy agenda and in
particular to the objectives of Horizon 2020, which identifies a number of
large societal challenges, and enabling and industrial technologies. The objective is to set up KICs in thematic areas which, due to their magnitude and complex
nature, can only be addressed through a cross-disciplinary, cross-border, and
cross-sectoral approach. The selection of the thematic fields therefore needs
to be based on a careful analysis as to whether a KIC can bring true added
value and have a positive impact on economy and society.

The European Commission has carried
out this analysis through a process designed to objectively assess the
potential of future KIC themes. One starting point was the draft SIA which the
EIT Governing Board submitted to the Commission in June 2011. In parallel, a
set of robust criteria was developed to allow for an objective assessment of
the innovation potential offered by each future theme. The validity of these
criteria was checked with the wider innovation community from across the
knowledge triangle through an open public consultation. This process resulted
in the following list of criteria.

·
Address major economic
and societal challenges Europe faces, and contribute to the delivery of the Europe
2020 Agenda;

·
Align and co-ordinate
with relevant EU policies as well as with existing initiatives under Horizon
2020 and Erasmus for All.

·
Be able to mobilize
investment and long-term commitment from the business sector; have an existing
market for its products or be able to create new ones;

·
Create sustainable and
systemic impact, measured in terms of new educated entrepreneurial people, new
technologies and new business ;

·
Bring together a critical
mass of world-class research, education and innovation stakeholders, which
would otherwise not unite;

·
Require
trans-disciplinary approaches and the development of new types of education
across the boundaries of disciplines;

·
Address major innovation
gaps such as the European paradox, i.e. themes where Europe has a strong
research base but a weak innovation performance.

The assessment of the
themes proposed in the EIT draft as well as by the wider stakeholder community clearly
showed a certain degree of variation regarding potential impact the
establishment of a KIC would offer. As a result, a number of themes were
discarded entirely; others were redefined in order to better respond to the
specificities of the European and global context in this area.

The following thematic
areas have been identified as those where the establishment of a new KIC has
greatest potential to add value to existing activities and bring about a real
boost to innovation:

·
Added-value manufacturing

·
Food4future - sustainable
supply chain from resources to consumers

·
Innovation for healthy
living and active ageing

·
Raw materials –
sustainable exploration, extraction, processing, recycling and substitution

·
Smart secure societies

·
Urban mobility

More
details on the individual themes are provided in the factsheets at the end of
the document[3].

Based
on these themes, the EIT will have the autonomy to organise the future KICs
selection process. The
success of future calls for KICs will depend largely on clear guidance as regards
the expectations and requirements, as well as a timeframe allowing KIC
applicants to get solidly organised both legally and financially before
submitting a proposal. KICs will be selected against detailed
criteria defined in the EIT Regulation, based on the overarching principles of
excellence and innovation relevance. Any KIC selected will need to demonstrate
how it will create maximum impact in the given area and prove the viability of
its strategy.

In view of the two waves of KIC selections foreseen
in 2014 and 2018, three themes have been identified for the first wave. Reflecting
the need for a gradual approach in establishing new KICs, the selection of the
first three themes has been based on the maturity of the field, the potential
societal and economic impact, as well as the opportunities for synergies with
other initiatives. They are:

·
Innovation for healthy
living and active ageing

·
Raw materials –
sustainable exploration, extraction, processing, recycling and substitution

·
Food4future - sustainable
supply chain from resources to consumers

For the second wave in 2018, the remaining themes (urban
mobility, added-value manufacturing and smart secure societies) will be
considered, while taking into account new and unforeseen challenges which may
arise in the future.

The EIT will

·
Timely prepare a selection procedure for a
second wave of KICs in 2014 and – after the evaluation of Horizon 2020,
including its specific programme and the EIT – for a third wave in 2018

·
Ensure that framework conditions of future
KIC selection procedures are conducive to an optimal outcome, notably by
providing clear guidance concerning requirements and processes, and by allowing
sufficient time for proposers to organise the partnership

2.2.
Enhancing EIT's impact

Fostering innovation across the Union

In the initial period, the EIT has mainly
focused its efforts on establishing the KICs. While it is a clear goal for the
EIT to strengthen existing centres of excellence, the EIT will need to ensure
it also delivers benefits to areas of the Union which are not directly
participating in KICs. It is therefore mission critical for the EIT to actively
promote the dissemination of good practices for the integration of the
knowledge triangle in order to develop a common innovation and knowledge sharing
culture.

In the future, the EIT must work to make
the KIC experience understandable and replicable and build it into a culture
that can act as a role model in Europe and beyond. By identifying, analysing
and sharing good practices, as well as new governance and funding models from
the KICs, the EIT seeks to ensure that knowledge generated within the EIT and
its KICs is disseminated and capitalised upon for the benefit of people and
institutions, including those not directly participating in the KICs.

The EIT can play the decisive role in
synthesising the diversity of approaches applied by the KICs and in making them
transferable in areas where innovation capacity is weak, and which would otherwise
not be able to benefit from the experience gained by the EIT. Such outreach
will ensure that the benefits of the EIT experience promote the development of
innovation capacity in these areas. This activity is able to generate strong
returns in so far as it builds on the work of the KICs.

Main drivers of learning at EIT level may
be: innovation-driven research for the creation of new businesses and new
business models, management of IP portfolios and new approaches to IP sharing,
entrepreneurship and new integrated forms of multi-disciplinary education; innovative
governance and financial models based in the concept of open innovation or
involving public authorities. This will help the EIT to be a role model and to
act as a 'game shifter' in the European innovation landscape and to become an
internationally recognised innovation institution.

Fostering and attracting talent

Talented people are at the heart of
successful innovation. It is one of the EIT's foremost roles to give talented
people the opportunity to use their potential to the full and to create
environments where they can thrive. Through the KICs, the EIT is generating
such environments, but needs to complement them with strategies for attracting
and including top talent from beyond the KICs.

The EIT will therefore put in place a
specific people scheme to ensure that talent – students, researchers, teaching
staff and entrepreneurs at all career levels – beyond the co-location centres
will be fully connected to the initiative. Such a scheme will not only provide
top talents from beyond the KICs with the opportunity to benefit from the
innovation environments created within the co-location centres, but will also
provide them with incentives to make full use of the knowledge and know-how
acquired in areas beyond the KICs. Typically, the EIT Foundation could play a
significant role in this area.

Moreover, the EIT has a clear role to play
in attracting talent from outside the EU. By creating a strong brand and
forging strategic relations with key partners from around the globe, the EIT
can add to the attractiveness of the partners within the KICs. In close
cooperation with the KICs, the EIT should develop a strong international
strategy, identifying and liaising relevant interlocutors and potential
partners. In this context the EIT and its KICs should take full advantage of
existing EU initiatives in the area, such as the 'Erasmus for all' programme
and the Marie Curie Actions. In addition, the EIT can foster knowledge sharing,
mentoring and networking by encouraging the setting up of an EIT alumni network.

The EIT will complement its efforts to
promote talented people and brilliant ideas by other measures, such as the
organisation of competitions for ideas or awarding of prizes, either as an own
initiative or in cooperation with leading global partners.

The EIT
will

·
In close cooperation with the KICs, establish
a scheme ('EIT fellows') allowing high talent people from across the EU and
beyond to get involved in the activities of KIC co-location centres for a
limited period of time, thereby creating mutual benefits for the participant as
well as for the KIC.

·
Set up/customise a web based tool to provide
a platform for knowledge sharing and networking around the EIT.

·
Build and support a functional and strong
network of graduates from EIT/KIC educational and training activities ('EIT
alumni').

·
Make lessons learned and successes from KICs
systematically accessible to the wider EU innovation community and beyond. This
may include the development of a repository of open course ware from the EIT's
and KICs' educational and training activities.

2.3.
New delivery mechanisms and results-oriented
monitoring

Simplification, implemented in a
responsible and accountable manner, is a must for the EIT to achieve effective
results, promote innovation breakthroughs and the involvement of the business
community. There is still room for the EIT to exploit its flexibility to a
full, in order to push simplification further.

As an 'investor' in KICs, the EIT considers
simplification as a dynamic process, embedded in the EIT operation and an
integral part of its supporting function towards the KICs. To this end, the EIT
will strive to adapt, improve and streamline its monitoring, reporting and
funding processes and constantly seek for simplified approaches that can help
the KICs to cope with new, emerging needs and foster their impact.

The KICs will provide an ideal testing
ground for new approaches to funding and management of innovation. Through
KICs' experimentation and experience, the EIT will deliver a simplification
agenda in key areas such as contractual agreements, simplified reporting, lumps
sums and flat rates.

The Commission will closely monitor the
EIT's ability to deliver the simplest possible agreements and principles for
the funding and management of KICs activities, based on the EIT's own
simplification agenda. Insights gained – including failures – will be shared
with future KICs and EU programmes and schemes under Horizon 2020.

The Commission
has reinforced its efforts in supporting the EIT towards establishing a sound
and solid results-oriented monitoring system. This monitoring system will ensure
full accountability of the EIT and the KICs, quality of the deliverables, the
contribution to Horizon 2020 priorities, and at the same time allow for
sufficient flexibility in the KICs' business dynamics. It will allow the EIT to develop a solid capacity for gathering and
analysing the input from the KICs, to measure the
performance of the EIT against its own objectives and to benchmark EIT and KICs against best practices at European and global
level. The system will be designed in a flexible manner and if needed adjusted
to take into account the EIT's and KICs' evolving and growing portfolio of
activities. Following the recommendation of the independent
external evaluation and the overarching monitoring provisions under Horizon
2020, the Commission has proposed, in association with the EIT and the KICs, the
establishment of a results-orientated performance monitoring system for the EIT,
addressing four activity levels:

·
Horizon 2020 level: to regularly monitor the EIT and KICs' contribution to achieving
the objectives of Horizon 2020

·
EIT level: to
assess the performance of the EIT as an efficient and
effective EU body; this will be measured in terms of
support provided to the KICs, the intensity and coverage of its outreach,
dissemination and international activities and its ability to deliver
simplified procedures.

·
Cross-KIC level:, to monitor the
contribution of all KICs to achieving the EIT strategic objectives, as identified
in a dedicated instrument such as an EIT Scoreboard.

·
Individual KIC level: to monitor individual KIC performance based on individual targets and key performance indicators (KPIs) as laid
down in the individual KIC business plans. KIC have
different business models and markets and thus different industrial KPIs which
are central for the successful management of the individual KIC.

The EIT will

·
Set up a simplification agenda, including
benchmarks to assess progress, and report to the Commission on its implementation
progress through the Annual Activity Report;ensure that new models of
simplification are disseminated across the EU and inform other EU initiatives.

·
Establish, in cooperation with the Commission
and the KICs, a comprehensive system to monitor:the EIT's contribution to Horizon
2020; the EIT's impact via its own and KIC activities; and KIC results. The EIT
will report on all its monitoring activities in the annual activity report

3.
Effective decision making and working
arrangements

The EIT’s governance structure combines the
bottom-up approach of the KICs with strategic guidance from the EIT level.
Decision-making at the EIT level therefore needs to be characterised by a truly
strategic outlook, combined with efficient implementing mechanisms and a
systematic involvement of knowledge triangle actors across Europe.

The governance model of the EIT has proven
its overall value. However, experiences from the initial period show that
further efforts can be made to enhance the effectiveness of the EIT's decision-making
and implementing mechanisms. The relationship between the EIT Governing Board,
responsible for strategic decisions, and the EIT headquarters, responsible for
implementation, has to be more clearly defined and streamlined. The EIT headquarters
will have to define the critical domains where the EIT should provide support
to the KICs, striking an appropriate balance between supporting and monitoring
functions. Finally, the Governing Board needs to better ensure that strategic
decisions are properly informed by the experiences from the KICs and the wider
innovation community.

3.1.
Streamlining and clarifying EIT decision-making

The EIT Governing Board sets the strategic
direction of the EIT and the framework conditions for the KICs, and through its
members connects the EIT with the various stakeholder communities in the field.
In line with the EIT's business-orientated approach, decision-making needs to
be efficient, quick, and focused.

Determining factors in this regard are
size, composition and procedures of the Governing Board. The principle of
independent members, combined with a limited number of elected members
representing the KIC community, has proven its value and allows gathering of
expertise from across the knowledge triangle. The initial model with 18 elected
members plus, more recently, four additional KIC representatives has, however,
shown its limitations. A Board scaled down in size will lead to more efficient
decision-making and reduce administrative overheads. Finally, further efficiency
can be gained by re-focusing the EIT Governing Board towards its core role of providing
strategic guidance. Moreover, coherence with other EU initiatives will be
further strengthened via reinforced consultation with the European Commission
on the EIT Triennial Work Programme.The information on EIT and KICs from the
EIT Triennal Work Programme will enable to assess and ensure complementarity
with the other parts of Horizon 2020 and other Union Policies and instruments. All
these changes have been incorporated in the modified EIT regulation
accompanying the SIA.

The decisions of the EIT Governing Board
are implemented by the EIT headquarters under the leadership of the Director
who is accountable for the EIT’s actions. In doing so, the headquarters mirror
the results-oriented nature of the EIT and its KICs and are the driving force
behind simplification of procedures. At the same time, the EIT headquarters
develop the capacity to systematically digest the learning from the KICs and
make these findings available for the benefit of the wider innovation
community. Over time, the EIT headquarters will become a resourceful repository
of good practice and a real knowledge partner for policy makers.

Attraction and retention of talented
professionals is a challenge for the EIT headquarters. To equip the EIT office
with the best talent and skills, it will define a clear human resource
strategy, including options beyond direct employment such as secondments or
temporary attachments, promoting regular exchanges of staff and internships
with excellent innovation, research and education institutions from the EU and
the rest of the world.

The EIT will

·
Ensure through a smart human resource
strategy, including systematic use of internal and external expertise, and
internal management procedures that the EIT will develop into a reference
institution for innovative governance.

·
Take concrete measures to further promote a
culture of openness and transparency.

3.2.
Investing in KICs: EIT-KICs relations

Interactions between the EIT and the KICs
not only provide the framework for KICs to operate successfully, but are also
at the core of the mutual learning process enabling the EIT to play its role as
a test bed for new innovation models. In order to provide KICs with appropriate
framework conditions, clear and coherent guidance must be given by the EIT at
all stages of the process without at the same time being overly prescriptive.
Interactions between EIT headquarters and the KICs need to be systematic and
trust-based in order to achieve maximum efficiency. Both the contractual
relations between the EIT and the KICs as well as the organisational
arrangements of the EIT headquarters should contribute thereto.

Moving away from a merely administrator
role, the EIT headquarters will optimise their operational functions to steer
the KICs to maximum performance and make good results widely available. There
are efficiency gains to be achieved from providing a number of centralised
services and functions, rather than at individual KIC level. While all KICs
work on specific themes, a number of elements are of a cross-cutting nature and
it is precisely there where the EIT can provide tangible added value. Such
knowledge provider functions can relate notably to the EIT headquarters
becoming an information broker and resourceful interlocutor, e.g. in fostering
cross-KIC exchange and mutual learning, facilitating relations with the EU
institutions and other key organisations, such as the Organisation for Economic
Co-operation and Development (OECD), or on specific cross-cutting issues, such
as counselling on IP, technology and knowledge transfer, benchmarking against
international best practices, or undertaking anticipation and foresight studies
to identify future directions for the EIT and the KICs. The EIT and KICs should
decide together where these tasks can be most effectively dealt with. In this
regard, it will be of crucial importance for the EIT and the KICs to establish
viable mechanisms for systematic collaboration around cross-cutting issues.

The EIT will

·
Provide clear and coherent guidance on the
expectations, obligations and responsibilities throughout the entire life cycle
of the KICs.

·
Develop in close cooperation with the KICs a
capacity within EIT headquarters to facilitate cross-KIC exchange and learning.

·
Provide a number of services to KICs on
horizontal issues where efficiency gains can be achieved, as well as implement
other corporate policies to the same end.

3.3.
Engaging with stakeholders

Active exchange and mutual learning with other
initiatives should be a cornerstone of the EIT's efforts in testing out new
innovation models. The EIT therefore needs to tap into existing good practices
and external expertise in order to become the reference body for innovation it
aspires to. It is therefore indispensable for the Governing Board to take its
decisions informed by the insights and needs of the innovation actors on the
ground, and in the context of the wider European framework. By embracing a
culture of openness and external engagement, the EIT can actively promote the
take-up and acceptance of new innovations by society at large.

To this end, the EIT will directly engage
with Member States and other stakeholders from across the innovation chain,
generating beneficial effects on both sides. In order to render such dialogue
and exchange more systematic, the setting up of an EIT
Stakeholder Forum, bringing together the wider
community of stakeholders around cross-cutting issues could be an appropriate
tool to facilitate a two-way, interactive communication. Stakeholders will
include representatives of national and regional authorities, organized
interests and individual entities from business, higher education, and
research, cluster organisations, as well as other interested parties from across
the knowledge triangle. The organisation of the Stakeholder Forum has been
incorporated in the modified EIT regulation accompanying the SIA.

Moreover, active consultation with other EU
institutions, in particular with relevant services of the Commission, from
early on in the process will help to maximise synergies and mutual learning
with other EU initiatives.

The EIT will

·
Set up a regular EIT Stakeholder Forum, to
facilitate interaction and mutual learning with the wider innovation community
from across the knowledge triangle, and including national and regional
authorities. In this context, the web-based platform can further help fostering
interactions between participants.

·
Make systematic use of existing associations
of universities, business and research organisations and cluster organisations as
platforms for the knowledge exchange and dissemination of results.

·
Establish a mechanism to further facilitate
synergies between the EIT/KICs and other EU initiatives, such as an annual
meeting between the EIT, the KICs and relevant services of the European
Commission.

4.
Estimate of financial needs and sources of
funding 2014-2020
4.1.
Consolidating a smart funding model towards KICs

The EIT designed an original funding model which
builds on joint strengths and resources of existing excellent organisations;
EIT funding acts as a catalyst to leverage and pool together supplementary
financial resources from a wide range of public and private partners. On this
basis, the EIT provides on average up to 25% of the total KIC funding, while
the remaining minimum 75% should come from non-EIT sources. This includes KIC
partners' own revenues and resources, but also public funding at national,
regional and EU level, in particular the – current and future – Structural Funds
and the Framework Programme for Research and Innovation. In the latter case the
KICs (or some of their partners) apply for funding in accordance with the
respective rules of the programmes and on an equal footing with other applicants.
The contribution from KIC partners is not a classic grant
"co-financing" requirement, but a pre-requisite for a minimum level
of involvement of existing organisations and their financial commitment to the
KIC. This bottom-up approach guarantees strong commitment from KIC partners,
incentivizes investment and stimulates structural and organizational change
among KIC partners and beyond. The experience of the initial KICs shows that
industry is financially committed to the delivery of the KIC business plans and
that the share of the KIC budget from industrial partners amounts between
20%-30% of the total KIC annual budget. Furthermore, KICs have managed to align
and pool additional streams of national funding, which would not have been
available otherwise (by way of illustration, the German Government has decided
to entrust the management of the "Software Campus" education
initiative to ICT Labs, with a budget of 50 million € over a 5-year period,
coming from both public and private sources).

The EIT funding is foreseen only for "KIC added value activities", namely
activities that allow the integration of knowledge triangle (education,
research and innovation) policies and partners within and across the KIC, in
accordance with the objectives and priorities laid down in the KIC business
plans. It includes in particular education, entrepreneurship and business
creation projects of the KICs, which top up investment in well-established
activities (eg. existing research projects). The administration, management and
coordination activities of the KIC should also be covered by the EIT
contribution.

KICs go through various development phases
with different characteristics of their total budgets before reaching cruising
speed. The absorption capacity of a KIC is relatively limited at the very
beginning, but develops substantially over the following years.

After an initial set-up phase of two years,
KIC budgets grow exponentially and can mobilise a significant level of new
resources from existing and new partners in a relatively short time. To reach a
sufficient critical mass and to achieve impact at European level, KIC annual
budgets will be between 250-450 million euro at cruising speed, depending on
the strategy, partnership and market potential of each individual KICs.

While KICs will not be fully financially
independent from the EIT, they will be encouraged to become sustainable in the
medium-term; i.e. reduce their dependency from EIT funding- for their further
consolidation and further expansion. EIT funding will continue to be provided
for certain KIC added value activities where EIT investment brings substantial
returns, such as education, business creation, co-location, outreach and
dissemination

Currently, the EIT funding to the KICs is
carried out solely via grants. In the next Multiannual Financial Framework (MFF
2014-2020) new financial mechanisms may well be established via debt or equity
instruments. As an 'investor' in KICs, the EIT will follow these developments
closely, and will encourage KICs access to make full use of them, facilitating
and coordinating access if appropriate.

4.2.
EIT budget needs

The EIT's budget needs in the period
2014-2020 are 3,1 billion euro and are based on three main components: the
necessary expenditure for consolidation of the existing three KICs, gradual
development towards new KICs in 2014 and 2018 respectively, and dissemination
and outreach activities and administrative expenditure.

Around 1,69 billion euro (53,15% of the
total EIT budget) is envisaged to fund the KICs designated in 2009 and already
operating at the cruising speed; 1,01 billion euro (31,81%) is envisaged for
the second wave of KICs (at that time during the start up and development
phases) and 259,75 million euro (8,16%) for KICs established as a result of the
third wave.

Therefore, the projected EIT budget for the
KICs in the period 2014-2020 equals to 2,9 billion euro (93,13% of the EIT
total budget for the period 2014/2020). Through the EIT's strong leverage
effect, the KICs are expected to mobilise a further 8,890 billion euro of other
public and private sources.

The EIT will also engage in a number of
dissemination and outreach activities, such as the EIT fellowship programme
which will significantly enhance the impact of its operations across Europe.
Moreover, a number of cross-cutting supporting and monitoring services will
provide added value and efficiency gains for KIC activities. In implementing
and developing these activities, the EIT will need to follow a strategy aimed
at a high efficiency ratio, i.e. a maximum of impact to be achieved through
light-touch mechanisms. Around 141,76 million (4,4%) of the EIT budget is
needed to implement these activities.

If the EIT is to pioneer new models of open
innovation and simplification, this should be reflected in its approach to administration.
The EIT headquarters needs to be a lean organisation, which follows a strategic
approach towards tapping into expertise whenever needed, but without creating
unnecessarily heavy and permanent structures. The costs of administrative
expenditure, covering necessary staff, administrative, infrastructure and
operational expenses, will over time not exceed 2,4% of the EIT budget. Part of
the administrative expenditure is covered by the host country Hungary through
provision of free of charge office space until the end of 2030, as well as an
annual contribution of 1.5 million euro to the staff cost until the end of
2015. On this basis, administrative expenditure will therefore be approximately
77 million euro for 2014-2020.

Graph 3: Breakdown of the budget needs

The precise breakdown is provided in the
financial statement attached to the proposal for amendment of the EIT
Regulation.

The EIT during the next MFF will primarily
be funded through a contribution from Horizon 2020, of which an amount of 2.8
billion euro is envisaged. In addition the EIT will receive a contribution equalling
around 2.5% of the total EIT budget from Norway, Island and Liechtenstein who
are participating states by means of a European Economic Area decision.

Factsheet 1: Added-value Manufacturing

1.
THE CHALLENGE

One of the major challenges defined in the
European Innovation Agenda and which also has to be addressed within the
framework of Horizon 2020 is the competitiveness of EU Member States on the
global market. One of the sectors where the problem is particularly urgent is
manufacturing.

Manufacturing in European
countries is under considerable strain: increased competition from other
developed economies, low cost production in developing countries, and scarcity
of raw materials are putting pressure on the European manufacturing companies.
Parallel to this, there are further factors driving change in the manufacturing
sector: new market and societal needs, rapid advances in science and
technology, environmental and sustainability requirements.

One possible answer to address these
challenges is the development of a "high value (or added-value)
manufacturing" industry. This concept defines an integrated system
including the whole cycle of production, distribution and end-of-life treatment
of goods and products/services applying a customer/user driven innovation
system. Rather than competing primarily on cost, added value manufacturers
deliver value by delivering product/service innovation, establishing process
excellence, achieving high brand recognition and/or contributing to a
sustainable society[4].

The
manufacturing sector is of considerable economic, social and environmental
significance. In 2010 the manufacturing sector
accounted for 15.4% of EU GDP and over 33 million jobs[5]. This figure increases to 37%
if power generation, construction, and associated business services are
included. At the same time, manufacturing also contributed to about 25% of the
waste, 23% of greenhouse gases and 26% of NOx generated in Europe.

Bearing this in mind, it is quite clear
that the overall objectives in the field of manufacturing must be increased
competitiveness of Europe within the global market as well as the development
of more sustainable and environment-friendly manufacturing processes.

2.
RELEVANCE AND IMPACT

A KIC on added-value manufacturing will
help meeting Horizon 2020 priorities in terms of
advanced manufacturing and processing, and its specific objective of
"transforming today's industrial forms of production towards more knowledge
intensive, sustainable, low-carbon, trans-sectoral manufacturing and processing
technologies, to realise innovative products, processes and services".

It will be
able to mobilise investment and long-term commitment from the business sector, and to expand and create new markets. It could have in particular
a function in supporting the actions defined in the Strategic Research Agenda
of the European Technology Platform (ETP) "Manufuture":

·
Development of added-value products and
services;

·
Development of new business models;

·
Development of advanced manufacturing
engineering processes;

·
New emerging manufacturing sciences and
technologies;

·
Transformation of existing research and
education infrastructures to support world-class manufacturing.

Whilst
supporting the development of new products, services, business models and
manufacturing processes, emphasis should be put on sustainability, with the
reduction of resource and energy inefficiencies, maximising positive
environmental impacts, but also contributing to strengthening positive economic
and social impacts. Concretely, such clean approach will imply energy and
material efficient processes and machinery, the use of renewable power sources,
and/or the employment of smart energy management, leading thus to significant
reductions of waste and emissions. By contributing to the development and
deployment of more sustainable, resource-efficient and competitive
manufacturing, a KIC would be able to trigger industry and consumers
behavioural change and to create systemic impact.

A KIC on added-value
manufacturing could also have a very important role and impact at regional
level: Fostering the creation of interconnected
regional clusters with local transfers and collaboration, developing
competences in high-end manufacturing technologies, and developing excellence
in manufacturing technologies would be the key missions of a KIC at regional
level. In this connection, specific attention could be given to those
regions more affected by declining manufacturing capacity as well as to SMEs.

One of the
major challenges for reaching the above aims is the availability of a highly qualified
workforce which is sufficient in quality as well as in numbers. A KIC would
therefore have a very important role to play in re-shaping the education
landscape in this field. By creating closer links between skills demanders and
education providers, a KIC would promote joint post-graduate degrees,
post-graduate professional training and industrial "real-life"
courses.

Capacity-building
will be also a central element of a KIC in added-value manufacturing. This
concerns not only the supply of high qualified work force, but also the
possibility of establishing the KIC as a forum for interaction and promotion of
transdisciplinary skills and competences, particularly for the
combination of multiple key enabling technologies as proposed by the High-Level Group on Key Enabling Technologies (KETs)[6].

A KIC on this
area will have the potential to bring together different actors and
stakeholders in this very transdisciplinary sector, including key
upstream and downstream parts of the value chain. This includes processing
industries (e.g. steel or chemicals) which are immediately linked with the
value chain for added-value manufacturing.

3.
SYNERGIES AND COMPLEMENTARITIES WITH
EXISTING INITIATIVES

A KIC as
described above would be complementary to a number of other EU initiatives, as
well as at the level of Member States and industry associations.

In addition to
the already mentioned ETP "Manufuture", it could also establish links
with the ETPs on Smart Systems Integration and the
Joint Technology Initiative (JTI) on Embedded Computing Systems. The Public
Private Partnership (PPP) on Factories of the Future as well as a number of
Framework Programmes (FP) projects would also be natural co-operation partners.
The KIC would take into account the research priorities and action plans
defined in the framework of the ETPs and the research work carried out so far
by the JTI, PPP and FP projects in this area.

Similarly, it would
also liaise with the CIP (Competitiveness and Innovation Programme)
eco-innovation market replication projects, where experience in the area of
more sustainable manufacturing has been developed. Such experience will
continue with Horizon 2020 namely in the context of the Climate action,
Resource efficiency and Raw Materials societal challenges. Synergies may also
be considered with the Environmental Technologies Verification (ETV) pilot
programme, which aims at promoting high value environmental technologies by
providing a third-party validation of their performance.

An added-value
manufacturing KIC could be also a connection point for synergy effects with the
European Technology Research Council, which the High-Level Group on Key
Enabling Technologies recommends for promoting excellence in technological
research and innovation.

A KIC in this
area would be complementary to these activities since it would focus on
transdisciplinary activities within the knowledge triangle with a strong focus
on entrepreneurial education.

4.
CONCLUSION

A KIC which focuses on the integration of
all stakeholders concerned with manufacturing and which puts a strong focus on
re-shaping the education agenda in this field would be well-suited to address
the challenges outlined above. It also meets the criteria put forward for the
selection of KIC themes in the SIA:

·
It addresses a major economic and societal
relevant challenge Europe is facing (to increase the competitiveness of EU
Member States on the global market and contribute to the development of a more
sustainable and environmentally-friendly manufacturing process), and
contributes to the delivery of the Europe 2020 agenda of smart and sustainable
growth.

·
This KIC focus is aligned with the priorities
defined in Horizon 2020 and complementary with other EU activities in the area.

·
It can build on a solid industrial sector which
will be attracted by a KIC.

·
It offers possibilities for various emerging
products, services and business models, and – above all – it will be
well-suited to address the urgent need for qualified people in this sector.

·
It takes a systemic approach and thus requires
transdisciplinary work and the development of new education across the
boundaries of disciplines.

·
It will bring together a critical mass of excellent
research, innovation, education and training stakeholders along the value
chain, which would otherwise not unite.

·
It will address the European paradox, since it
will capitilise EU's strong research base and find new
innovative approaches to ensure a more competitive, sustainable and
resource-efficient manufacturing sector.

Factsheet 2: Food4Future – Sustainable
supply chain from resources to consumers

1.
THE CHALLENGE

The global food supply chain is facing a
complex set of challenges.

On the demand
side, the situation is characterised by an increasing world population, by an
increasing standard of living (especially in the new emerging countries)
creating demand for a more varied, high-quality diet requiring additional food
production. As a result the UN has predicted that food demand will rise by
around 70% by 2050[7].
At the same time, the fast expansion of the bioenergy sector further
accentuates the demand for by-products derived from the food production
process.

On the supply
side, global climate change will aggravate pressures on food production and
food supply. In addition, a number of food production systems in the world are
unsustainable. Without change, the global food system will continue to degrade
the environment and compromise the world’s capacity to produce food in the
future.

These problems
in particular have to be seen in connection with consumers' attitudes and
concerns, as production is driven by consumers and markets. During the last two
decades the complexity of food consumption has increased dramatically.
Consumers demand affordable, diversified, high quality and convenient food
products responding to their tastes and needs. Concerns regarding various
issues, ranging from food safety and environmental protection to ethical
considerations, such as fair trading practices or animal welfare, are
continuously increasing and result in growing demands by consumer groups for
political action. Finally, food consumption habits (including food wastage) can
have strong impacts on consumer health and well-being, as well as on primary
production and on the environment.

Horizon 2020 addresses this complexity and
defines the challenges relating to this sector: "The
challenge is to secure supplies of safe and high quality food and bio-based
products and to ensure sustainable management of biological resources,
contributing to both rural and coastal development and to competitiveness of
the European biobased industries, while preserving terrestrial and marine
eco-systems, reducing fossil-dependency, mitigating and adapting to climate
change and promoting zero-waste."

2.
RELEVANCE AND IMPACT

A KIC on
sustainable supply chain will help meeting Horizon 2020 priorities, namely those defined in the context of the societal
challenge "Food Security, Sustainable Agriculture and the
Bio-Economy".

This
thematic field is in addition highly relevant in terms of economic and societal
impact. Questions of food safety and security have
a bearing on nearly all sectors of our economy and society, and very often call
for regulatory action.

The food
industry is the largest manufacturing sector in Europe and plays an essential
role in Europe's wider economic development. Despite its relevant role, the
competitiveness of the European food and drink industry is being challenged.
Over the last decade, Europe's share of the global market has declined from 25%
to 21% in the face of competition from emerging economies, such as China, India
and Brazil. Increasingly unable to compete on cost alone, the European food
industry needs to be able to add value by creating healthier, more sustainable
and resource-efficient products if it is to reverse this decline.

Action is
needed to ensure a climate resilient and sustainable global food system while
meeting the increasing food demand within the constraints of available
land and declining fish stocks, protecting the natural environment and
safeguarding human health.

A KIC in this
area will focus on the food supply chain. This focus lends itself particularly
well to the holistic approach of a KIC. It comprises resource input in the very
beginning of the chain (fertilisers, etc.), food production, processing,
packaging and distribution; and it ends with the consumers which might be a
specific priority of a KIC (reduction of food waste, healthy nutrition, etc.).
The objective is to ensure a more efficient and effective food supply chain
system, while improving the sustainability and traceability in all parts of
this chain.

Addressing the
food supply chain via a KIC will thus give the possibility to address not only
some of the major economic and societal relevant challenges Europe is facing,
but also to mobilise investment and long-term commitment from the business
sector – namely, in the deployment of new and innovative technologies,
processes and knowledge to increase sustainable food production, processing,
packaging and distribution, to reduce waste and promote better nutrition.
Through its integrative approach, a KIC in this area will be able to influence
the industry approach to focus more on consumer-driven innovation. This will go
along with the potential of new business models and market strategies that
focus on consumers' needs and trends and build upon enhanced awareness of the
food chain, which can have potential to get innovations and technological
possibilities in line with consumer interests and thus create new business
opportunities.

A KIC in this
area will be very important to overcome the high level of fragmentation of
the whole food supply chain. It will blend a critical mass of excellent
research, innovation, education and training stakeholders along the whole chain.
All elements of the chain (primary sector, food production, food processors,
retailers, food service channels and – not least – the consumer) are
inextricably linked to each other for the conception of future innovations. A
KIC will provide the necessary systemic and transdiciplinary approach to
tackle these issues.

The major added
value of a KIC in this area will be its role in addressing the current
shortage of skills and human resources. Currently, probably as many
as half of the European food and beverage manufacturing industries are facing a
shortage in scientific and skilled personnel. This is a barrier to innovation
in this sector. By integrating education with the other sectors of the
knowledge triangle, a KIC will address this issue. It will at the same time
offer the opportunity to stimulate new educated entrepreneurial people, capable
of developing new innovative technologies and business. This focus on entrepreneurship
would be particularly relevant in the food sector, which characterised by a
high number of SMEs.

The major risks
associated to the success of a KIC under this theme are mainly related to the
necessary accompanying innovation framework conditions, which KICs are not
directly addressing. For increasing sustainability throughout the food supply
chain, some changes in regulation may be needed in order, for example, to
internalise food production costs. Therefore, the KICs need to liaise with
ongoing EU and national innovation and policy activities on these matters (see
next section).

3.
SYNERGIES AND COMPLEMENTARITIES WITH
EXISTING INITIATIVES

The EU is fully
engaged in this field. A KIC would contribute to address Horizon 2020 societal
challenge "Food Security, Sustainable Agriculture and the
Bio-Economy". It would in particular co-operate with the proposed European
Innovation Partnership (EIP) "Agricultural Productivity and
Sustainability". Whilst the latter will put emphasis on building bridges
between cutting-edge research and practical innovation, a KIC would in
particular create complementarity in educating key actors, such as
entrepreneurs and consumers. Coordination is also needed, with the Joint
Programming Initiative "Agriculture, Food Security and Climate
Change", which will pool national research efforts to integrate
adaptation, mitigation and food security in the agriculture, forestry and land
use sectors. The European Maritime and Fisheries Fund will promoting
environmental and social sustainability of fisheries and aquaculture, thus
highlighting the need for technical developments coupled with new
entrepreneurial skills in these fields, in line with the evolution of
consumers' behaviour, providing possibilities for synergies. Likewise,
coordination will also be possible with the recently launched JPI "Healthy
Food for a Healthy Life" and "Connecting Climate Research in
Europe", and with European Technology Platforms in relating areas (in
particular, the Food for Life Platform) or
numerous FP 7 projects. Similarly, it would also liaise with the CIP
(Competitiveness and Innovation Programme) eco-innovation market replication
projects, where food and drink is one of the priority areas. Such experience
will continue with Horizon 2020 namely in the context of the Climate and
Resource Efficiency societal challenge.

A KIC in this
area would be complementary to these activities since it would focus on
transdisciplinary activities within the knowledge triangle with a strong focus
on innovative products and services and entrepreneurial education as well as on
consumer issues.

4.
CONCLUSION

A KIC which focuses on the food supply
chain is most suited to address the challenges outlined above. It also meets
the criteria put forward for the selection of KIC themes:

·
It addresses a major economic and societal
relevant challenge (the need to ensure a resilient and
sustainable food system while meeting the increasing food demand within
the constraints of available land, protecting the natural environment and
safeguarding human health), and contributes to the delivery of the Europe 2020
agenda and its objectives on climate and energy, employment, innovation and
education.

·
This KIC focus is aligned with priorities
defined in Horizon 2020 and complementary with other EU activities in the food
sector, in particular with the EIP "Agricultural Productivity and
Sustainability".

·
It is able to mobilise investment and long-term
commitment from the businesses sector and offers possibilities for various
emerging products and services – namely, in the deployment of new and
innovative technologies, processes and knowledge to increase sustainable food
production, processing, packaging and distribution, to reduce waste and promote
better nutrition.

·
It creates sustainable and systemic impact,
measured in terms of new educated entrepreneurial people, new technologies and
new business. It will foster new technological developments and more efficient
and sustainable production systems.

·
It aims at overcoming the high level of
fragmentation of the whole food supply chain; favouring traceability; and will bring
together a critical mass of excellent research, innovation, education and
training stakeholders along the whole chain.

·
It thus requires transdisciplinary work
involving different areas of knowledge, such as agronomy, ecology, biology,
chemistry, nutrition, and socio-economy.

·
It will address the European paradox, since it
will find new innovative approaches to ensure a more
sustainable and efficient supply chain and to improve food security.

Factsheet 3: Innovation for Healthy Living and Active
Ageing

1.
THE CHALLENGE

Health, demographic change and well-being
have been identified as major societal challenges which will be addressed
within the framework of Horizon 2020. The overarching
aims of any action to address this challenge should be to improve the quality
of life of European citizens of all ages and to maintain economic
sustainability of the health and social care systems in the face of increasing
costs, shrinking human resources and citizens' expectations for the best care
possible.

The challenges relating to the health and
social care sector are numerous and closely interlinked. They range from
chronic diseases (cardiovascular, cancer, diabetes)
together with overweight and obesity, infectious (HIV/AIDS, tuberculosis) and
neurodegenerative diseases (exacerbated by an increasingly ageing population)
to social isolation, reduced wellbeing, increased dependency of patients on
formal and informal care, and multiple exposure to environmental factors with
unknown long-term health consequences. In addition, barriers for the
application, exploitation and deployment of new findings, products and services
prevent to effectively respond to those challenges.

The response to these challenges has been
defined in Horizon 2020 as aiming "to provide better health, quality of
life and general wellbeing for all by supporting research and innovation
activities. These activities will focus on the maintenance and promotion of
health throughout our lifetimes, and on disease prevention; on improving our
ability to cure, treat and manage disease and disability; supporting active
ageing; and on contributing to the achievement of a sustainable and efficient
care sector."

2.
RELEVANCE AND IMPACT

A KIC on
innovation for Healthy Living and Active Ageing will help meeting Horizon 2020
priorities, namely those defined in the context of
the societal challenge "Health, Demographic Change
and Wellbeing".

This
thematic field is highly relevant from a societal and public policy point of
view. Questions of healthy living and active ageing
have a bearing on nearly all sectors of our lives and society, and very often
call for regulatory action. The health and social
care sector is also highly relevant from a socio-economic perspective, since it is one of the sectors on which
most money is spent (public and private);[8]
and the sector does not only offer opportunities for economic and technological
innovation, it also has a great potential for social innovation.

The
socio-economic relevance can be further underlined by the fact that Europe
benefits from the presence of a solid pharmaceutical sector and well-developed
health and social care systems providing jobs to millions of people across the
EU. The sector is also one of the biggest high-tech manufacturing sectors in
the EU. The potential for growth in these areas is very high since an ageing
society means an increase of aggregated demand for care and independent living
products and services.

Other sectors
also come into play, such as tourism. The ageing population is formed to a
large extent by a generation which is used to travel and still willing to
travel, has high quality demands, and hence a growing need of accessible
services (transport, hotels, entertainment etc). More accessible tourism
services can boost the competitiveness of the whole sector and would promote
further inclusion of the ageing population.

Not least, the EU
benefits from a world-class level of research and education in this area.
In many EU countries excellent research infrastructures and institutions do
exist which provide an attractive basis for industry involvement in the
planned activities of the EIT.

The challenges related to healthy living
are valid across Europe. The responses, which can be provided by a KIC, require
the intense co-operation between excellent, multidisciplinary and
multi-sector teams with participants from all sectors of the knowledge triangle
(research, business and education). A KIC on this theme would have the added
value of linking the activities of innovation and higher education with the
already existing excellent research base. In doing so, it will put
particular emphasis on higher education curricula, new skills development (needed
e.g. for technology development but also for elderly care), strengthening
entrepreneurial aspects in order to foster the development of a highly
entrepreneurial workforce in the area, to support the development of new
products and services, and to strengthen existing value chains or even
create new ones. Examples of potential products and services that could be
created through a KIC go beyond technology applications (such as
applications that treat, code, standardise and interpret data in areas like
cancer, cardiovascular diseases; or tools for risk assessment and early
detection), and could trigger social innovation with new concepts
improving for example lifestyle management and nutrition, fostering active and
independent living in an age-friendly environment, or maintaining economically
sustainable care systems.

Focusing on the systemic aspects of
European health and social care systems and support to active ageing, a KIC on
this thematic field would also include a stronger co-operation between large
and smaller, more specialised, firms for greater knowledge circulation. In
addition, a specific added value a KIC could provide in this area could be the
creation of innovative partnerships at the local level which is of particular
importance in the services sector.

Through its integrative approach to the
knowledge triangle, a KIC on healthy living and active ageing would be
therefore a key contributor to addressing the 'European paradox': adding
value to the excellent EU's position in scientific research, and transforming
this asset into innovative products and services, and new business
opportunities and markets.

The major risks associated to the success
of a KIC under this theme are mainly related to the necessary accompanying
innovation and policy regulatory framework conditions, which could require some
adaptations KICs are not directly aiming at addressing[9]. Therefore the need of KICs
liaising with ongoing EU and national innovation and policy activities on these
matters (see next section).

3.
SYNERGIES AND COMPLEMENTARITIES WITH
EXISTING INITIATIVES

Health and active
ageing related issues are strongly supported by many EU initiatives. Such
initiatives encompass a broad range of policy domains in addition to the health
sector, such as economy, security and the environment. They therefore
indirectly contribute to such targets of Europe 2020 as R&D/Innovation,
employment and social inclusion.

A KIC on
innovation for healthy living and active ageing will closely co-operate with
the pilot European Innovation Partnership (EIP) on Active and Healthy Ageing. It
will take into account the concrete actions presented in the EIP Strategic
Innovation Plan and contribute to delivering its objectives. It will create
complementarity in education and training key actors, but also in providing a
unique structured network of practitioners well placed to identify framework
conditions and best practise on policy, regulatory or standardisation issues
having an impact in the sector. In the context of the EIP, a KIC in this area can
also contribute to the Lead Market Initiative – eHealth which aims at
stimulating the market for innovative eHealth solutions through its focus on
policy instruments (standardisation, certification systems and public
procurement).

Coordination
will be also fostered with the Joint Programming Initiative (JPI) to boost
research on Alzheimer’s and other neurodegenerative diseases, and the JPI 'More
Years, Better Lives' - the potential and challenges of demographic change. A
KIC in this area will speed up and foster the exploitation of excellent public
research pooled together by these JPIs, and thereby address fragmentation in
the innovation landscape.

A KIC will also
strongly build on and capitalise the major research results of the Joint
Technology Initiative on Innovative Medicines and of the numerous framework
programme research projects addressing this thematic field (such as the health
research programme or the ICT research activities on health and ageing) to
boost technology transfer and commercialisation via entrepreneurial top talent.
Likewise, it will coordinate with the work of the Ambient Assisted Living Joint
Programme and the Competitiveness and Innovation Programme.

In conclusion,
a KIC in this area would be complementary to these activities since it would
focus on transdisciplinary activities within the knowledge triangle with a
strong focus on innovative products and services and entrepreneurial education.

4.
CONCLUSION

A KIC which focuses on the broader issue of
innovation for healthy living and active ageing meets the criteria put forward
for the selection of KIC themes:

·
It addresses a major economic and societal
relevant challenge (lifelong health and wellbeing of
all, while maintaining economically sustainable care systems), and contributes
to the delivery of the Europe 2020 agenda and its objectives on employment,
innovation, education and social inclusion.

·
This KIC focus is aligned with priorities
defined in Horizon 2020 and complementary with other EU activities in the
health and social care areas, in particular with the EIP on Active and Healthy
Ageing.

·
It can build on a strong research base and on a
solid industrial sector which will be attracted by a KIC. It is able to
mobilise investment and long-term commitment from the businesses sector and
offers possibilities for various emerging products and services.

·
It will address the European paradox, since it
will capitalise EU's strong research base and find new
innovative approaches to improve the quality of life of European citizens and
to maintain economic sustainability of the health and social care systems.

·
It creates sustainable and systemic impact,
measured in terms of new educated entrepreneurial people, new technologies and
new business. It will foster new technological developments and social
innovation.

·
It aims at overcoming the high level of
fragmentation of the whole health and social care sector; and will bring
together a critical mass of excellent research, innovation, education and
training stakeholders along the sector.

·
It takes a systemic approach and thus requires
transdisciplinary work involving different areas of knowledge, such as
medicine, biology, psychology, economy, sociology, demography, ICT.

Factsheet 4: Raw materials[10] – Sustainable
exploration, extraction, processing, recycling and substitution

1.
THE CHALLENGE

Modern society is totally dependent upon
access to raw materials. Access to affordable materials is essential for the
effective functioning of the EU economy. However, the triptych of decreasing
finite natural resources, an ever increasing human population, and rapidly increasing
levels of consumption in the developing world are putting increasing demands on
the planets' raw materials and natural resources. These factors are some of
those responsible for the predicted increase in natural resource consumption during
the next decades.

As highlighted by the Resource-Efficiency
Roadmap and Horizon 2020, we should aim to ensure accessibility and  availability
of raw materials that is needed for the European economy and for the
satisfaction of our well being, whilst achieving a resource efficient economy
that meets the needs of a growing population within the ecological limits of a
finite planet.

2.
RELEVANCE AND IMPACT

This thematic
field is highly relevant in terms of economic and societal impact. Raw
materials are crucial for the world economy and quality of life; increasing
resource efficiency will be key to securing growth and jobs for Europe. It will
bring major economic opportunities, improve productivity, drive down costs and
boost competitiveness.

Whilst the
EU does have an excellent research pedigree and various centres of excellence
exist, much more could be done to capitalise on this within this priority area. A KIC would be particularly suited for this.

Aligning with other EU activities, a KIC in
this area should concentrate on fostering a knowledge hub and centre of
expertise on academic, technical and practical education and research in
sustainable surface, subsurface and deep-sea mining, material management,
recycling technologies, material substitution and geopolitical trade in raw
materials. This would act as a broker and clearing house for European centres
of excellence on these related topics and manage a research programme of
strategic importance to EU industry. For this reason and in order to maximise
the impact of the actions and avoid any duplication with EU activities,
including the EIP on Raw Materials, the KIC will provide the necessary
complement in the areas of human capital (i.e. training, education) for the
technology innovative pilot actions (e.g. demonstration plants) for land and
marine exploration, extraction and processing, collection and recycling. At the
same time it could include targets around becoming a technology pioneer by
creating pilot schemes and demonstrators of innovative processes and solutions,
involving for example the use of economically attractive and sustainable
alternative materials of strategic importance to the EU. It can consequently
trigger the expansion of existing markets and creation of new ones,
namely in the areas of sustainable extraction and processing, materials
management, recycling technologies, and materials substitution. It will be
necessary to assess impacts and develop innovative, cost-effective adaptation
and risk prevention measures for particularly sensitive habitats, such as the
Arctic.

A KIC in this area will be very important
to overcome the barrier which lack of technology constitutes. Technical
innovation is required to develop a host of complementary technologies that
could change the shape of traditional mineral and raw material value chains.
This is an area that requires further work to develop new processes and in
order to optimise and commercialise existing knowledge in this area. The
entrepreneurial approach of a KIC would be particularly suited to address this
issue.

Another added value element of a KIC on raw
materials is its contribution to addressing the sector's limited
networking opportunities. In fact, the disparate nature of the
various involved research areas means that there are limited opportunities to
meet researchers within different subject areas and benefit from the cross
pollination of ideas and collaboration that will be required to foster cost
effective low carbon, environmentally sound solutions. Networking within a
KIC, bringing together stakeholders from the three strands of the knowledge
triangle across the whole value chain would contribute to overcome this
weakness. It will give the possibility for enhancing both technology,
knowledge and know-how transfer, as well as to provide researchers, students
and entrepreneurs the knowledge and skills necessary to deliver innovative
solutions and to turn them into new business opportunities.

3.
SYNERGIES AND COMPLEMENTARITIES WITH
EXISTING INITIATIVES

The EU has identified this priority field
as one of the grand challenges. A KIC would contribute to Horizon 2020, namely
to the societal challenge related to the supply of raw materials and resource
efficiency. It would contribute to the proposed EIP on Raw Materials. The EIP on Raw Materials will provide overarching
frameworks to facilitate alignment and synergies among existing supply and
demand-driven research and innovation instruments and policies in the field.
This will cover technology-focused activities, but also the identification of
framework conditions and best practise on policy, regulatory or standardisation
issues having an impact on innovation in a given sector or challenge. A KIC in this area would create complementarity in educating
key actors, but also in providing a unique structured network of practitioners.
It would provide a solid basis for supporting other innovation-related actions
which will be carried out in the framework of the EIP, and for the success of
which human capital is an absolute necessity. It will also be well placed to
support the EIP in the identification of framework conditions and best practise
on policy, regulatory or standardisation issues having an impact on the sector.
A KIC would also strongly build on and capitalise the results of the numerous research projects of the 7th Framework Programme
addressing the topic, in particular those funded in the framework of the nanosciences, nanotechnologies, materials & new production
technologies, and environment themes.

Similarly, it
would also liaise with the CIP (Competitiveness and Innovation Programme)
eco-innovation market replication projects, where material recycling is one of
the priority areas. Such experience will continue with Horizon 2020, namely in
the context of the climate action, resource efficiency,
and sustainable supply of raw materials societal
challenges.

A KIC in this
area would be complementary to these activities since it would focus on
transdisciplinary activities within the knowledge triangle with a strong focus
on innovative products and services and entrepreneurial education.

4.
CONCLUSION

A KIC in this area is most suited to
address the challenges outlined above. It also meets the criteria put forward
for the selection of KIC themes in the SIA:

·
It addresses a major economic and societal
relevant challenge Europe is facing (the need to develop innovative solutions
for the cost-effective, low carbon and environmentally friendly exploration,
extraction, processing and recycling of raw materials), and contribute to the
delivery of the Europe 2020 agenda and its objectives on climate and energy,
employment, innovation and education.

·
This KIC focus is aligned with priorities
defined in Horizon 2020 and complementary with other EU activities in the raw
materials area, in particular with the EIP on Raw Materials.

·
It is able to mobilise investment from the
businesses sector and offers possibilities for various emerging products and
services – namely, in the areas of sustainable extraction and processing,
materials management, recycling technologies, and materials substitution.

·
It creates sustainable and systemic impact,
measured in terms of new educated entrepreneurial people, new technologies and
new business. It offers, in particular, opportunities for social value creation
by making efforts towards addressing the goal of sustainability of the whole
product lifecycle: using raw material more efficiently and improving
effectively recycling and recovering of raw materials.

·
It includes a strong education component which
is lacking in other initiatives, and will bring together a critical mass of
excellent research and innovation stakeholders.

·
It requires transdisciplinary work involving
different areas of knowledge, such as geology, economics, environmental
sciences, chemistry, mechanics and multiple industrial areas (construction,
automotive, aerospace, machinery and equipment, and renewable energies).

·
It will address the European paradox, since
Europe counts with a strong research base and a weak innovation performance on
this area. It offers opportunities for innovation in sustainable mining and
materials management. Substitution and recycling can promote further sector
change and enhance investment activities through the creation of new products,
services and supply chain approaches.

Factsheet 5: Smart Secure Societies

1.
THE CHALLENGE

One of the major challenges to be addressed
within the framework of Horizon 2020 is the need to foster secure European
societies in the context of growing global interdependencies and the transition
towards digital societies.

Today's societies are facing serious
security challenges that are growing in scale and sophistication. These
challenges are triggered by developments ranging from organised crime,
terrorism, to cross border illegal activity and natural and man-made disasters,
which put at risk and destabilise the basic principles of our societies. Moreover,
cyber attacks and breaches to privacy are putting at risk the whole operation
of Internet and all the services running on it. In support of EU's policies to
tackle these challenges, action is needed to deliver innovation in the security
sector. Action is in particular necessary to exploit the information and
communication technologies and related services' potential to tackle the
security challenges. The objective is to address Europe's security gaps,
through the development and deployment of innovative ICT solutions fighting,
preventing and mitigating serious and organised crime (including cyber crime),
terrorism, strengthening the management of our external land and sea borders,
and building resilience to natural and man-made disasters, such as forest
fires, earthquakes, floods and storms. This objective will also include the
development of ICT technologies, devices and services for the prevention,
management and recovery from cyber-attacks and breakdowns of ICT
infrastructures, raising trust and security on-line and protecting privacy,
identity and private data. As a transversal priority, these objectives should
be met whilst respecting ethics, privacy, and citizens' fundamental rights.

2.
RELEVANCE AND IMPACT

Security is highly relevant from a
policy and socio-economic point of view. From the
public policy perspective, maintaining an adequate level of security within any
society can be considered as a basic (pre-)requisite for establishing an
environment in which individual and companies are motivated to carry out their
activities. In particular, the expansion of the digital single market is
dependent on user's trust in the security of transactions, integrity of their
data and the protection of their privacy and identity. The events related to
'global terrorism' and the increased damages to human lives and assets produced
by natural and man-made disasters have over the past years further increased
the policy relevance of this field.

On top of these public concerns, this field
is also relevant from a socio-economic point of view. It is estimated that the
world security market for security solutions (excluding defence) was of 45
billion Euro is 2009 and is expected to grow to more than 87 billion euro in
2020 (an average growth larger than 6%/year)[11].
It employs about 250.000 workers at the world level and about 50.000 in Europe.
Looking at indirect employment, EU security services market is constituted by
more than 1.700.000 private guards[12].
In addition to the market size of IT security, some estimates indicated that
the direct cost of cyber crime to be 350 billion euro per year worldwide, and
around 80 billion euro in the EU.

A KIC on smart secure societies will be
able to mobilise investment and long-term commitment from the business sector, as well as to expand and create new markets for its products and
services. Within the framework of a KIC, the business sector could be attracted
by the market opportunities for innovative ICT products and services
supporting, inter alia, more intelligent solutions for crime prevention, higher
security standards through electronic identification and authentification,
smarter borders, and warning systems to better protect critical
infrastructures. Due to the transversal nature of security technologies, the
activities of this KIC will impact not only the ICT security sector, but also
the whole ICT market for equipment and access device manufacturers and service
providers.

The societal dimension of security
could be further enhanced by the KIC integrative approach to innovation and its
potential to promote social innovation. Building on a strong research and
scientific base, a KIC in this area will be able to bring together education
and innovation stakeholders which would otherwise not unite to develop new
knowledge, concepts, business models, approaches and strategies to tackle
societies' security challenges and promote citizens' well being. The objective
is that these new innovative products, services, processes, models and
approaches developed in the framework of the KIC meet the pressing needs for
more secure European societies, where citizens feel secure in their daily lives
(including those at more vulnerable positions).
Attention could be paid to the protection of individual's privacy, protection
of children in the internet and protections against abuses of identity and
profiling, while increasing user friendliness and adoption.

The societal dimension of a KIC on secure
societies could be further reinforced by the KICs co-location model, through
which regional actors work closely together whilst combining competences and
skills developed in different areas of specialisation.

A major added value element of a KIC on
smart secure societies will be its contribution to helping overcome
the current levels of fragmentation and compartmentalisation the sector faces
across Europe. Through its integrative nature and transdisciplinary
approach, it will create the opportunity to establish a closer cooperation between
the knowledge triangle actors (business, research and universities),
individuals and public authorities acting on different areas of knowledge, and
thus ensure a better articulation between technological, societal, policy and
regulatory considerations and the market potential.

A KIC on smart secure societies will also
help addressing the need for a qualified workforce. It will have a very
important role to play in re-shaping the education landscape in this field. It
will at the same time offer the opportunity to stimulate new educated
entrepreneurial people, capable of developing new innovative technologies,
services and business. This focus on entrepreneurship would be particularly
relevant in this area, which has the potential to involve a high number of
SMEs.

In connection with the KIC innovation and
educational objectives, a KIC can also indirectly trigger increased awareness of citizens, private sector, and institutional end-users'
(civil protection, police forces, border guards,etc.) as well as affect their attitudes
towards new innovative solutions.

Whilst a KIC on smart secure societies has
the potential to create sustainable and systemic impact measured in
terms of new educated entrepreneurial people, new technologies, business,
models and approaches, it also offers the possibility for impact at global
level. Security challenges are global in nature and should be addressed in
cooperation with third countries.

The major risks for the success of a KIC in
this area are mainly related to the lack of the required innovation framework
conditions, such as clear regulatory conditions, standardisation and public
procurement. In fact, in some European countries, the absence of a clear public
policy and strategy towards security has been pointed out as a factor that
reduces clarity in terms of demand and supply side developments. Another
difficulty relating to the security sector is the definition of its boundaries
to defence requirements. While defence will not be covered in the framework of
a KIC on smart secure societies, there is a blurring of distinctions between
security and defence in terms of the associated technology and system
requirements. Finally, a pre-condition for the success of this KIC is to get
the involvement of end-users and, in particular, public authorities. This is a
difficult task and will require close cooperation with relevant Commission's
policy initiatives in this field. These risks are expected to be tackled
through KIC's liaison with ongoing EU and national innovation and policy activities
on these matters (see next section).

3.
SYNERGIES AND COMPLEMENTARITIES WITH
EXISTING INITIATIVES

A KIC as described above would be
complementary to a number of EU initiatives in this thematic area.

A KIC on smart secure societies will contribute to Horizon 2020 objectives. It
will build up on the results of the numerous FP research projects addressing the topic - in particular,
those funded in the framework of security, ICT trust & security, future
internet and socio-economic sciences and humanities. It will take into account relevant
activities of the JRC.

It will also liaise with the work of the
relevant EU Agencies, such as FRONTEX (in the field of border security),
Europol (in the fight against serious international crime
and terrorism),ENISA (on network and information security), and CEPOL (the
European Police College).

A KIC in this
area would be complementary to these activities since it would focus on
transdisciplinary activities within the knowledge triangle with a strong focus
on innovative products and services and entrepreneurial education.

4.
CONCLUSION

A KIC which focuses on the role of ICT for
delivering innovation to secure societies and puts a strong focus on re-shaping
the education agenda in this field would be well-suited to address the
challenges outlined above. It also meets the criteria put forward for the
selection of KIC themes in the SIA:

·
It addresses a major economic and societal
relevant challenge (the need to reduce security gaps and lead to prevention of
security threats while integrating societal aspects), and contributes to the
delivery of the Europe 2020 agenda and its objectives on employment,
innovation, education and social inclusion.

·
This KIC focus is aligned with priorities
defined in Horizon 2020 and complementary with other EU activities in the area.

·
It is able to mobilise investment and long-term
commitment from the businesses sector and offers possibilities for various
emerging products and services.

·
It creates sustainable and systemic impact,
measured in terms of new educated entrepreneurial people, new technologies,
business and services. It will foster new technological developments and social
innovation.

·
It will build on a strong research and
scientific base, and bring together education and innovation stakeholders which
would otherwise not unite to develop new knowledge, concepts, business models,
approaches and strategies to tackle societies' security challenges.

·
It contributes to overcoming the current levels
of fragmentation and compartmentalisation the sector faces across Europe.

·
It takes a systemic approach and thus requires
transdisciplinary work involving different areas of knowledge, such as ICT, socio-economic sciences and humanities, civil protection, health,
transportation, energy among others.

Factsheet 6: Urban Mobility

1.
THE CHALLENGE

The theme of smart, green and integrated
transport has been identified as one of the major societal challenges which
will be addressed within the framework of Horizon 2020. The 2011 Transport
White Paper further reinforces the importance of taking action in this domain
during the next decade. Urban mobility is a particularly challenging task. It
addresses a number of topics such as transport (including new mobility concepts, transport organisation, logistics, transport systems
safety and security), environmental issues (reduction of greenhouse gases, air
pollution and noise) urban planning (new concepts for bringing work and living
closer together), and has an important impact both at the economic and social
levels (new business creation, employment, social inclusion, housing and
location strategies). The overarching aim is to improve the quality of life of
European citizens who – in increasing numbers – live in large urban
conglomerations where much of Europe's economic performance is generated.[13]

Sustainable urban mobility can only be
achieved if breakthrough innovations leading to greener, more inclusive, safer
and smarter solutions are found. Failing to achieve this will – in the long run
- result in high societal, ecological, and economic costs. However, new
innovative mobility concepts – in particular when individual means of
transportation are to be replaced by public and collective means of transport –
should be accepted by citizens. Bringing about behavioural changes with no
disadvantages for the quality of life and the cost of living in urban areas
will be one of the great challenges to be addressed in this area.

2.
RELEVANCE AND IMPACT

The key
objective of a KIC on urban mobility will be to ensure a greener, more inclusive,
safer and smarter urban mobility system.

As already
outlined above, the theme is highly relevant from a societal and public
policy point of view. It also is highly relevant from a socio-economic
perspective since it involves important economic sectors in GDP and employment
terms, such as the automotive or the construction sectors. Urban mobility is,
in addition, linked with environmental protection strategies and fully embedded
in policies of social inclusion, location, housing and urban design.

A KIC on urban
mobility is both in line with the priorities defined in Horizon 2020 and
with Europe 2020 strategy objectives of achieving a smarter, more
sustainable, low carbon and inclusive urban development. A KIC in this thematic
area could contribute to each of Europe 2020 strategy objectives by, for
example, the promotion of eco-efficient solutions, intelligent ICT schemes for
traffic management, and provision of more efficient and affordable transport
services.

In fact, since
urban mobility is by nature systemic, a KIC on this area could offer many
possibilities for innovation along the innovation chain, such as the
development of multi-modal transport systems, and smarter and more sustainable
transport solutions.

A KIC on urban
mobility draws on a solid technological and industrial base and offers
a potential for new products and services[14],
in particular in the fields of sustainable planning and eco-industries.

Furthermore,
the development of innovative urban mobility models will also benefit from the
strong policy attention and support that this thematic priority profits from. In
addition, these innovative urban models can have a global impact if they
are transferred to the massively growing urban conglomerations in other parts
of the world, especially in Africa, Asia and Latin America.

A KIC in this
area will put urban mobility and urban transport planning in the wider context
of sustainable urban planning and spatial development at local and regional
level. The KIC would thus have the advantage of working in a
multi-disciplinary and cross-sectoral field and of contributing to overcome the
current levels of organisational fragmentation the sector faces. It would
create the opportunity to establish a closer cooperation between public
authorities (mainly at local, regional levels), local associations, and the
private sector (such as developers and infrastructure actors), research
institutes and universities (integrating the knowledge triangle). Bringing
together world-class partners in new configurations will give the KIC on urban
mobility the possibility of optimising existing resources and exploit the
business opportunities created through these new value-chains.

The KIC on
Urban Mobility will focus on those activities of the innovation triangle which
can benefit from additional EU support specifically via the EIT. In reality,
the major added value of a KIC in this area will be its role in integrating the
three strands of the knowledge triangle and in bringing systemic change in the
way the innovation players work together. Likewise, KIC focus on
people-driven innovation, which puts students, researchers and
entrepreneurs at the heart of KIC efforts, will be fundamental to address the
challenges outlined above. Consequently, there will be a strong emphasis on
education/training, entrepreneurship and deployment of results, e.g. developing
skills and knowledge of urban transport professionals in local and regional
administrations (life-long learning / staff exchange programmes / professional
training), proposing specific higher education programmes in Urban Mobility
(summer schools/exchange schemes), taking innovative transport concepts
successfully to the market (support for spin-offs and start-ups from
universities and research institutions, etc.). Moreover, the concept of
co-location could be strengthened within a KIC focussing on this theme, since
naturally this thematic area has a strong local and regional dimension.

3.
SYNERGIES AND COMPLEMENTARITIES WITH
EXISTING INITIATIVES

Mobility
related issues are strongly supported by many EU initiatives. The EU is fully
engaged in this field.

Links with
other EU activities exist and will be enhanced. A KIC on urban mobility will
take into account the actions developed in the framework of the Action Plan on
Urban Mobility and the Intelligent Transport System Action Plan.

It will in
particular co-operate with the planned European initiatives on smart cities and communities, encompassing energy efficiency, ICT and
urban transport. A KIC would in particular create complementarity
in educating key actors, but also in providing a structured network of practitioners well placed to identify framework
conditions and best practise on policy and regulatory issues having an impact
on the sector.

Coordination is
also needed with the Joint Programming Initiative "Urban Europe",
which will pool national research efforts to transform urban areas to centres
of innovation and technology, realise eco-friendly and intelligent
intra-interurban transport logistic systems, reduce the ecological footprint
and enhance climate neutrality. A KIC in this area will speed up and foster the
exploitation of excellent public research pooled together by these JPIs, and
thereby address fragmentation in the innovation landscape.

The CIVITAS
initiative which supports demonstration and research projects to implement
innovative measures in clean urban transport, and the
European Industrial Initiative on Smart Cities & Communities aiming at
making the production and use of energy in cities more
sustainable and efficient will also be natural cooperation initiatives of a KIC
on urban mobility.

A KIC in this
area could also establish links with the transport and energy related European
Technology Platforms (ETPs), the Public Private Partnership (PPP) on European Green
Cars, and the numerous Framework Programme (FP) projects in this area. The KIC
would take into account the research priorities and action plans defined in the
framework of the ETPs and the research work carried out so far by the PPP and
FP projects to enhance and accelerate the take up and exploitation of these
research outcomes.

Complementarities
will be also sought with the "European Mobile and Mobility Industries
Alliance". Co-funded under the Competitiveness and Innovation Programme, the
European Mobile and Mobility Industries Alliance aims at bringing together
regional and national policy makers supporting innovative service solutions in
mobile and mobility industries in view to mobilise more and better support to
innovative service SMEs in such industries.

It will also
coordinate with the Intelligent Energy Europe, the eco-innovation market
replication, and the ICT based services and pilot projects for smart urban
mobility under the Competitiveness and Innovation Programme (CIP).

A KIC in this
area would be complementary to these activities since it would focus on
transdisciplinary activities within the knowledge triangle with a strong focus
on innovative products and services and entrepreneurial education.

A KIC focusing
on urban mobility would also be complementary to some of the specific
activities already pursued by two existing KICs. Namely, Climate KIC
activities under the theme transitioning to low-carbon resilient cities, and
EIT ICT Labs work under the focus areas of intelligent
transportation systems and digital cities of the future. The KIC on urban
mobility will take on board the work carried in the framework of these KICs and
place it in the wider context of a greener, more inclusive, safer and smarter urban mobility system.

4.
CONCLUSION

A KIC focusing on urban mobility is most
suited to address the challenges outlined above. It also meets the criteria put
forward for the selection of KIC themes:

·
It addresses a major economic and societal
relevant challenge (to achieve a European transport
system that is resource-efficient, environmentally-friendly, safe and seamless
for the benefit of the citizens, the economy and the society), and contributes
to the delivery of the Europe 2020 agenda and its objectives on climate and
energy, employment, innovation and education.

·
This KIC focus is aligned with priorities
defined in Horizon 2020 and complementary with other EU activities in the
transport, environmental and energy areas.

·
By strengthening entrepreneurial thinking it
integrates emerging technologies with new value chains and supports the
translation of academic research on into products and services.

·
It will thus address the European paradox, since
it will capitilise EU's strong research base and find new
innovative approaches to ensure a greener, more inclusive, safer and smarter
urban mobility system.

·
It will blend a critical mass of excellent
research, innovation, education and training stakeholders, which would
otherwise not unite

·
It adopts a cross-sectoral approach and
therefore connects the different levels of responsibility from private entities
to public administration – in particular at local level - to the individual
citizen.

·
It requires transdisciplinary work involving
different areas of knowledge, and the development of new types of education
across the boundaries of disciplines.

[1]               OJ L 97, 9.4.2008, p. 1.

[2]               OJ C , , p. .

[3]               The factsheets provide a synthesis of the analysis
carried out on the relevance and added value of creating a KIC in the proposed
themes. They give indicative information on what a KIC in the specific area
could do, but do not prescribe future KICs' activities and working
methods".

[4]               Concept presented at Sainsbury Review: The Race to
the Top – Lord Sainsbury’s review of the UK Government’s Science and Innovation
Policies, 5 October 2007.

[5]               Eurostat.

[6]               http://ec.europa.eu/enterprise/sectors/ict/files/kets/hlg_report_final_en.pdf

[7]               Food and Agriculture Organisation of the United
Nations (FAO). 2009. Global agriculture towards 2050.

[8]               Spending on health differs from country to country.
Share in GDP ranges from 1.1 to 9.7% and from 4% to over 18% of total public
spending. Health related sectors have a high R&D intensity: pharmaceuticals
and biotechnology outnumber by far any other sector (15.9%); health care equipment
and services are also very high (6.8 %).

[9]               For example in terms of patient's access to high
quality medicines, which is prolonged because of legislation for approving new
drug products on the market with more time dedicated to tests and certification
and for setting prices and reimbursement modalities.

[10]             In this document the narrower definition of “non
energy, non agricultural raw materials” will be used in order to reduce
potential overlap with existing Climate Change and Energy KICs, as well as with
other future KIC priority areas such as food.

[11]             Data from European Organisation for Security.

[12]             Data from the Confederation of European Security
Services.

[13]             More than 70% of Europeans live in urban areas, which
represent more than 25% of the EU territory. Around 85% of the EU’s GDP is
generated in urban areas. Urbanisation is expected to rise in Europe to some
83% by 2050.

[14]             Some examples of new potential markets: new services
for travellers, maintenance, and management of traffic movements and road
congestion; new applications in vehicles; immersive communication services to
support communication and avoid travelling (JRC 65426 EN).