Opinion of the Committee of the Regions on the 'Green Paper on Innovation`

(96/C 182/01)

At its 12th Plenary Session held on 20 and 21 March 1996 (meeting of 21 March 1996), the Committee of the Regions adopted an Opinion on the 'Green Paper on Innovation`.

THE COMMITTEE OF THE REGIONS,

- Having regard to the decision taken by the Commission on 27 December 1995 to consult the Comittee of the Regions;

- Having regard to the Committee of the Regions' decision of 18 July 1995 assigning preparation of the Opinion to Commission 7 on Citizens' Europe, Research, Culture, Youth and Consumers;

- Having regard to the European Commission's Green Paper (COM(95) 688 final);

- Having regard to the Opinion of Commission 7 (Rapporteur: Mrs du Granrut) adopted unanimously on 27 February 1996 (CdR 61/96 fin.),

has adopted unanimously the following Opinion.

1. Introduction

1.1. Whereas Article 130 of the Treaty on European Union stipulates that 'the Community and the Member States shall ensure that the conditions necessary for the competitiveness of the Community's industry exist`; and whereas it also states that action shall be aimed in particular at 'fostering better exploitation of the industrial potential of policies of innovation, research and technological development` and at 'encouraging an environment favourable to initiative and to the development of undertakings throughout the Community, particularly small and medium-sized undertakings`.

1.2. Whereas the White Paper on Growth, Competitiveness, Employment, as well as the White Paper on Education and Training, underline the importance of non-physical capital (education, skills, capacity for innovation, industrial traditions) for the economic and social prosperity of Europe, and whereas this is seen as an asset to exploit to lay the foundations for sustainable development of the European economies, thereby enabling them to withstand international competition while creating the millions of jobs that are needed.

1.3. Whereas Mrs Monika Wulf-Mathies, European Commissioner for Regional Policies, pointed out at the 11th Plenary Session of the Committee of the Regions held on 17 and 18 January 1996 that a strong and dynamic innovation policy in Europe was the foundation of profitability, the competitiveness of the European economy, job-creation, spatial planning, social cohesion and more generally the improvement of living conditions.

1.4. Whereas an initial diagnosis of innovation in Europe has been carried out on the basis of the European report on science and technology indicators drawn up at the request of the former European Commissioner for Science, Research and Development, Professor Ruberti, in 1994.

1.5. Whereas the European Commission has drawn up a Green Paper on Innovation, presented to the Madrid European Council of 20 December 1995; and whereas that Green Paper proposes a European innovation strategy which aims not only to create jobs and activities in innovative sectors but to work towards the economic, social and cultural advancement of all citizens of the European Union.

1.6. Whereas this Green Paper constitutes a basis for discussions by all the parties likely to be affected by the development and dissemination of innovation, including first and foremost regional and local authorities; and whereas the Committee of the Regions has therefore decided, in accordance with Article 198c of the Treaty establishing the European Community, to draw up an Opinion on the subject.

1.7. Whereas the Committee of the Regions has already tackled innovation issues in four Opinions:

- Opinion on the integrated programme in favour of SMEs and the craft sector (COR 18/95) ();

- Opinion on Europe's way to the information society: an action plan (COR 21/95) ();

- Opinion on an industrial competitiveness policy for the European Union(COR 140/95) ();

- Opinion on the programme to stimulate the development of a European multimedia content industry (INFO 2000) (COR 22/96) ().

2. General comments

2.1. The Green Paper

2.1.1. The Committee of the Regions welcomes the Green Paper which, after having spelt out the new context and challenges of innovation, makes a critical analysis (in the positive sense of the word 'critical`) of the situation in Europe before proposing lines of action and concrete ideas on the establishment of a full-fledged innovation strategy for the European Union and the Member States. Innovations are crucial to the competitiveness of the European economy. But although businesses are the main focus, innovation is also important in the fields of environment, health, infrastructure, energy and spatial planning.

2.1.2. The COR approves the European Commission's view that all institutional, economic and social operators have a role to play in implementing an innovation policy. The COR feels that it is important for guidelines to be laid down, within the framework of a genuine system of partnership between the different bodies and authorities concerned, in order to a) correct the present dysfunctions in Europe, more particularly in respect of the dissemination of know-how and the application of research findings, and b) make innovation schemes more coherent across Europe. To this end, European, national and regional/local schemes need to be properly coordinated in accordance with the principle of subsidiarity.

2.1.3. The COR welcomes the fact that regional and local authorities figure prominently among the partners cited in various passages of the European Commission's Green Paper. The European Commission emphasizes that a decentralized approach should be adopted to the promotion of innovation for three main reasons: regional and local authorities are the decision-making level closest to economic players and ordinary members of the public; research and innovation generally fall within the remit of regional and local authorities; and, finally, the cross-functional nature of innovation has implications for all policies falling within the remit of regional and local authorities (education and training; the environment; spatial planning and local development; aid for SMEs).

2.1.4. The COR welcomes the opportunity to be able to help devise a policy for promoting innovation in Europe. In particular, it is pleased to have the chance to emphasize the role of regional and local authorities in increasing the European Union's innovative capacity.

2.1.5. The COR nevertheless regrets that the Green Paper does not mention areas of priority intervention. The planned routes of action cover too vast a field. To obtain effective results, efforts should therefore be concentrated on a number of priority areas.

2.2. Implications for regional and local authorities

2.2.1. The Committee of the Regions agrees that an energetic policy to promote innovation, based on the innovation capacity of business and on support from the authorities, is a pre-condition for creating jobs and for maintaining and improving competitiveness in Europe. It is indeed necessary for all economic and social partners, be they public or private, to be aware of the strategic importance of harnessing Europe's scientific and technological potential to an innovation process which increases productivity, improves product quality, leads to the development of new products, and generally contributes to the regeneration of Europe's economic fabric.

2.2.2. The Committee of the Regions also considers that innovation is a collective process rooted in its social environment. The political and institutional organization of a given society, together with its economic structure, determine the capacity for generation and acceptance of innovation. The participation and motivation of local players offer guarantees not only as to the dynamism of research and innovation policy, but also its acceptance by workers, firms and the public in general. Regional and local authorities thus bear a major responsibility for getting local players to actively encourage innovation.

2.3. Aid for innovation

2.3.1. The COR considers that regional and local authorities must be involved in the creation of a legal, economic, financial and training environment that is conducive to innovation. From a regulatory point of view, regional and local authorities, with their knowledge of local requirements in terms of technical regulations, the protection of non-physical assets and administrative simplifications, have a key role to play in the creation of optimum conditions for the introduction and concrete implementation of an innovation policy.

2.3.2. The COR considers that the provision of financial support for research centres and business innovation must remain one of the public authorities' priorities despite the increasingly tight squeeze on public-sector budgets.

Here it is important to also make private financial circles more aware of the challenges of innovation in Europe. Steps to this end, which should form part of the overall plan for Economic and Monetary Union, must help promote a new banking culture based on greater acceptance of the risks associated with the financing of research and development. It is also important for multinationals, which have the resources and a solid experience of innovation, to make these available to SME/SMIs.

Finally, the COR considers that the European Commission should clarify the rules governing the contribution of the Structural Funds to the venture capital needed for the creation and development of businesses. It will help if the clearer arrangements are operational when negotiations take place on the renewal of certain regional programmes for the 1997-1999 period, and on new post-2000 programmes. It would also be useful if national rules were reviewed with a view to ensuring consistency between the different aid mechanisms.

2.3.3. The COR emphasizes the need to develop policies to encourage innovation so that manufacturing processes can be improved, new industrial and tertiary-sector products created, and training schemes set up as part of a policy to support SMEs/SMIs. Each and everyone of them should have access to an innovation and research network. Much has been done by the European Union in this area to support the efforts of regional and local authorities. For example, the Structural Funds play a part in developing centres of excellence revolving around industrial and university centres, in introducing new pedagogical aids for school, university and adult education, in the establishment of research and technology-transfer centres which enable researchers to be more mobile.

2.3.4. The COR considers that the tasks of monitoring innovation and keeping it permanently in the public eye must be linked to regional educational and training schemes. It is important for teachers, academics and trainers to transmit a new innovation-oriented culture to their pupils, students and business employees. This requires more efficient use of new information and communication technologies. To this end, the Socrates, Leonardo and INFO 2000 Community programmes must be deployed to help support local action.

2.4. Dissemination of innovation and economic and social cohesion

2.4.1. The COR considers that regional and local authorities contribute to economic and social cohesion in Europe and help to improve living conditions, more especially in Objective I Regions, by supporting the dissemination of innovation results. The application and networking of regional innovation facilities will further spatial restructuring in Europe, thanks notably to new information and communication technologies. In this respect the COR urges that particular attention be paid to peripheral regions.

2.4.2. The COR believes that regional and local authorities must encourage the creation at regional, interregional and cross-frontier level of links between research centres, universities and industry for the exchange of information. The Green Paper identifies a number of interesting examples based on the pooling of services to local socio-economic operators and it would be beneficial if all potential partners were aware of these possibilities. In Italy industrial districts have developed around small businesses operating in the same industrial sector; in Denmark a large proportion of SMEs belong to the same research and innovation network; and in Baden-Wuerttenberg a comprehensive technical support infrastructure has been set up for smaller firms and for research and teaching establishments.

2.4.3. The COR urges that the mechanisms set up to assist innovation and the dissemination of innovation results should not be confined to the development of new processes and to research and development in general, but should also extend to the financing of the marketing and industrialization phases where the real job creation takes place. The COR also believes that innovation per se can make a contribution to job-creation.

2.4.4. The COR shares the view that a regional 'technological watch` should be set up throughout Europe so that the authorities, businesses and research centres can monitor trends in European innovation more closely. In this context the Committee of the Regions welcomes the creation of the European 'Innovation` programme, one of whose aims is to encourage the creation of Innovation Relay Centres charged with the task of disseminating and applying research findings and facilitating the use of Community mechanisms for assisting research, technological development, demonstration and exploitation projects.

The COR considers it important that the European network of Innovation Relay Centres should be sufficiently large, in geographical terms, to ensure that its promotional work in local industry, notably for the purposes of exploiting R& D findings of Community and other origin, is more effective. At the present time the network of Innovation Relay Centres has 52 constituent members and four associate members in the Union, Iceland and Norway.

Finally, the Committee of the Regions considers it important that the Innovation Relay Centres, some of which have come into existence with the help of regional and local authorities, should be able to draw on the experience of local centres of excellence in order to be able to exploit know-how in accordance with local needs. It is also important that these Centres should use the new information and communication mechanisms available to forge cooperation links with other bodies, bearing in mind their own geographical areas of intervention (agricultural regions, industrial areas, etc.). Priority should also be given to harnessing new information and communication technologies to assist innovation and make the European economy more dynamic.

2.4.5. The COR would like the discussions which will be triggered by the Green Paper to be regarded by the European Union and the other public partners as an opportunity to simplify the machinery for support and the dissemination of research findings, including for example the search for partners, so that economic and social operators can have access to more comprehensible and practical information. It would help in this respect if regional and local authorities, acting in conjunction with Innovation Relay Centres, could become 'one-stop-shops` for SMEs in particular.

2.4.6. The Committee of the Regions welcomes the foundation of the Institute for Prospective Technological Studies in Seville, noting that its main functions are to develop a 'technology watch` and carry out research into the links between technology, employment and competitiveness. The information which such an organization is charged with collecting should be directly accessible regionally so that there can be a genuine circulation of know-how at that level.

3. Specific comments

3.1. Route of Action 1 (page 38): 'To develop technology monitoring and foresight`

The COR urges that information collected and processed by Seville's Institute for Prospective Technological Studies be exploited at regional level, so as to foster interregional exchanges and give regional and local authorities a statistical basis for comparison which could be used to provide an overview of technological innovations in Europe.

3.2. Route of Action 2 (page 38): 'To better direct research efforts towards innovation`

In addition to the creation of Community-level task forces and an increase in the proportion of GDP devoted nationally to innovation and research, there is no doubt that regional and local authorities are in a good position to exert a strong influence on the organization of research in their home areas and to put in place SME monitoring and watchdog organizations with a view to a) increasing SME capacity for research into new technologies and b) facilitating their exploitation of research findings.

3.3. Route of Action 3 (page 39): 'To develop initial and further training`

The COR considers that regional and local authorities, within the limits of their powers in the fields of education and training, and with the financial aid proposed by the European Union in programmes such as the Structural Funds, Socrates, Leonardo and INFO 2000, can familiarize young people with innovation and its role in management, and can make it possible for them to take up trades and professions dependent on innovation and research; local and regional authorities can also pave the way for greater research cooperation between firms and educational establishments and, finally, create an environment where innovative pedagogical methods leading to creativity and mobility can be tried out. The regions, acting locally, can also promote cooperation between universities, professional bodies and firms.

3.4. Route of Action 4 (page 40): 'To further the mobility of students and researchers`

The COR emphasizes the importance of the mobility of students, researchers and business employees as vectors of an innovation culture in Europe. It underlines the role of regional and local authorities who, despite different social and legal systems, are able to forge close links with other European regions in the fields of research, education, training, apprenticeships, etc.

3.5. Route of Action 5 (page 41): 'To promote recognition of the benefits of innovation`

The COR welcomes the European Commission's idea of launching a Community information scheme covering successful experience in the Member States and the positive results of European innovations. The COR would like to see regional and local authorities involved in the project, as this would enable them to add to the information gathered and to assist in its dissemination, using new communication and information technologies. It will be helpful if an initial analysis of the positive examples is available when the fifth framework programme on research is being prepared and when an innovation action programme is launched subsequent to the consultations on the Green Paper.

3.6. Route of Action 6 (page 41): 'To improve the financing of innovation`

The COR considers that funding for research into innovation, and for the promotion and dissemination of findings, needs to be brought more into line with current needs. For this reason it is important to use the Green Paper to make all the financial partners aware of the need to overhaul their aid machinery, including objectives and operational modes (given the horizontal nature of innovation), and to ensure that current funding appropriations, be they public or private, European or regional, are disbursed more effectively and in a more coordinated fashion (preparation of the fifth framework programme on research, the financing of pilot projects on the interregional exchange of information on experience). Mechanisms for project appraisal, innovation risk insurance and mutual guarantee schemes should also be introduced to encourage financial organizations to provide loans or become partners in national and regional innovation projects.

3.7. Route of Action 7 (page 42): 'To set up a fiscal regime beneficial to innovation`; Route of Action 8 (page 42): 'To promote intellectual and industrial property`; Route of Action 9 (page 43): 'To simplify administrative procedures`; Route of Action 10 (page 44): 'A favourable legal and regulatory framework`

The COR approves the Green Paper's proposal that local economic and social operators be consulted in order to establish, with them, the best conditions for the creation of a tax, administrative and legal environment conducive to innovation and the dissemination of results.

The Green Paper proposes a programme of concerted action to improve and simplify the business environment, especially with regard to the establishment, development and transfer of enterprises. In this connection, the COR considers that regional seminars could be organized in order to secure a proper representation of the economic and social interests concerned and to disseminate the idea that decentralized, regional-level information centres are needed both to provide information and to help enterprises, particularly SMEs, complete administrative formalities.

3.8. Route of Action 11 (page 44): 'To develop "economic intelligence" actions`

The COR approves the proposals. It considers however that the funds allotted to regional organizations for the promotion of economic intelligence should be expanded in the following areas: back-up for advisory services (audits and quality diagnosis), continuing training, assistance in the recruitment of managerial staff. It would be of great help here if steps taken by regional and local authorities were evaluated regularly in order to identify their impact on the economic performance of the enterprises which have received assistance.

3.9. Route of Action 12 (page 45): 'To encourage innovation in enterprises, especially SMEs, and to strengthen the regional dimension of innovation`

The COR endorses the statement that the local or regional level is the most appropriate level for contacting enterprises, especially SMEs, to a) provide them with the support necessary to forge types of cooperation that are likely to increase know-how, b) introduce new technologies and rationalize back-up services, and c) strengthen cooperation between universities and industry.

3.10. Route of Action 13 (page 46): 'To update public action for innovation`

The COR approves the proposals of the Green Paper regarding the new conception of the role of the State in support of research and innovation. This new role would include awareness-raising, the provision of incentives, the simplification and stability of aid provision, and the circulation of information. It welcomes the reference in the Green Paper to the principle of subsidiarity, noting that this is needed to make the economic and social climate more receptive to innovation and to ensure close cooperation between consulted operators on the one hand and decision-takers on the other.

4. Conclusions

4.1. The Committee of the Regions welcomes the European Commission's initiative on the promotion and dissemination of innovation. It is particularly pleased that consultations will be held to develop and flesh out the Green Paper. It also underlines the repeated references to subsidiarity and the role of regional and local authorities.

4.2. The Green Paper is an opportunity for the Committee of the Regions to act as a link between the European Union and regional and local operators. Members will be invited to give an account of their personal experience and submit proposals; these may come in useful when the European Commission draws up its summary report and definitive action plan at the end of the consultation phase. In this way, the Committee of the Regions will be able to familiarize the regional and local authorities which it represents, with the work being done by the European Union to promote innovation.

Done at Brussels, 21 March 1996.

The Chairman

of the Committee of the Regions

Pasqual MARAGALL i MIRA

() OJ No C 210, 14. 8. 1995, p. 92.

() OJ No C 210, 14. 8. 1995, p. 109.

() OJ No C 100, 2. 4. 1996, p. 14.

() OJ No C 129, 2. 5. 1996, p. 39.