State of the Innovation Union

Taking stock 2010 – 2014

Table of contents

Executive summary. 4

Strengthening the knowledge base and reducing fragmentation. 8

1. Key messages. 8

2. Progress so far 9

Commitment 1: Put in place national strategies to train enough researchers. 9

Commitment 2 – part 1: Test feasibility of independent university ranking. 11

Commitment 2 – part 2: Create business-academia Knowledge Alliances. 12

Commitment 3: Propose an integrated framework for e-skills. 13

Commitment 4: Propose an ERA framework and supporting measures. 15

Commitment 4.1 - Comparable research careers structures. 16

Commitment 4.2 - Innovative Doctoral training. 17

Commitment 4.3 – Creation of a Pan-European Pension Fund for Researchers. 18

Commitment 5: Construct the priority European research infrastructures. 18

Commitment 6: Simplify and focus the future EU R&I programmes on Innovation Union. 20

Commitment 7: Ensure stronger involvement of SMEs in future EU R&I programmes. 21

Commitment 8: Strengthen the science base for policy making through JRC and create EFFLA.. 22

Commitment 9: Set out an EIT Strategic Innovation Agenda. 23

Getting good ideas to market 25

1. Key messages. 25

2. Progress so far 25

Commitment 10 – Put in place EU level financial instruments to attract private finance. 25

Commitment 11 – Ensure cross-border operation of venture capital funds. 26

Commitment 12 – Strengthen cross-border matching of innovative firms with investors. 27

Commitment 13 – Review State Aid Framework for R&D&I. 28

Commitment 14 – Deliver the EU Patent 29

Commitment 15 – Screen the regulatory framework in key areas. 31

Commitment 16 – Speed up and modernise standard-setting. 32

Commitment 17 – Set aside dedicated national procurement budgets for innovation; Set up a EU level support mechanism and facilitate joint procurement. 33

Commitment 18 – Present an eco-innovation action plan. 36

Commitment 19- Part 1 – Establish a European Creative Industries Alliance. 38

Commitment 19- Part 2 – Set up a European Design Leadership board. 39

Commitment 20 – Promote open access; support smart research information services. 41

Commitment 21 – Facilitate collaborative research and knowledge transfer 43

Commitment 22 – Develop a European knowledge market for patents and licencing. 44

Commitment 23 – Safeguard against the use of IPRs for anti-competitive purposes. 45

Maximising social and territorial cohesion. 47

1. Key messages. 47

2. Progress so far 47

Commitment 24 and 25 – Improve the use of structural funds for research and innovation. 47

Commitment 26 – Launch a Social Innovation pilot; promote social innovation in European Social Fund 50

Commitment 27 – Support a research programme on public sector and social innovation; pilot a European Public Sector Innovation Scoreboard. 51

Commitment 28 – Consult social partners on interaction between the knowledge economy and the labour market 53

Pooling forces to achieve breakthroughs: European Innovation Partnerships 55

1. Key messages. 55

2. Progress so far 55

Commitment 29 – Pilot and present proposals for European Innovation Partnerships. 55

Leveraging our policies externally. 61

1. Key messages. 61

2. Progress so far 61

Commitment 30 – Put in place integrated policies to attract global talent 61

Commitment 31 – Propose common EU/Member States priorities and approaches for scientific cooperation with third countries. 62

Commitment 32 – Roll out global research infrastructures. 64

Making it happen. 65

1. Key messages. 65

2. Progress so far 65

Commitment 33 – Member States R&I Systems. 65

Commitment 34 – Develop an Innovation Headline Indicator and monitor progress using Innovation Union Scoreboard. 67

Innovation Convention 2011 and 2014. 69

Progress on Innovation Union Commitments 70

Executive summary

The Innovation Union was placed at the heart of the Europe 2020 strategy in 2010 with the aim to foster Europe's capacity to innovate. Innovation is indeed considered essential to preserve and improve Europe's competitiveness and its ability to create jobs and to tackle societal challenges. Four years after its launch, this Staff Working Document (SWD) takes stock of how it has been implemented and what first results it has delivered, keeping in mind that the Innovation Union is a ten years long strategy.

The Innovation Union is succeeding in building momentum around innovation, mobilising stakeholders and mainstreaming innovation in key European, national and regional policies.

Notably, the European budget allocated to research and innovation was increased, despite a decrease in the overall EU budget for 2014-2020. Also, despite the economic crisis, the Union has made progress towards its R&D investment target of 3%. This is a clear sign that the EU is prioritising growth and jobs.

Considerable measures have also been taken to ensure that the R&I budget is well spent, including through simplification of programme architecture and participation rules in Horizon 2020, the deployment of European Research Area (ERA) measures and the development of an indicator to monitor innovation output.

As a comprehensive strategy, the Innovation Union addresses a wide range of elements that impact Europe's innovation eco-system and is succeeding in changing it. Excellent progress has been made in delivering on each of the Innovation Union blocks:

· Strengthening the knowledge base and reducing fragmentation

The knowledge base in Europe is being strengthened, notably through the launch of Horizon 2020, the focusing of European Regional Development Funds on smart specialisation strategies, progress towards the European Research Area, and support for skills development. Within Horizon 2020, the new research and innovation framework programme, red tape was sensibly reduced, so as to allow wider, more competitive participation. All phases of the innovation cycle are now funded under a single programme, making sure that the knowledge produced can be better exploited for the realisation of new products and services. More private investment has been secured to address major societal challenges while boosting Europe's industrial competitiveness.

Public-private and public-public partnerships are one of the key elements of Horizon 2020. The private sector has committed to invest nearly €10 billion in Joint Technology Initiatives stimulating innovation in areas such as aeronautics, medicines, electronic components and systems, transport and bio-based industries, while contributing to reverse the declining role of industry in Europe. In addition, eight contractual Public Private Partnerships have been launched in areas such as green cars, energy efficient buildings and cleaner manufacturing processes, photonics and next generation internet. These partnerships are expected to leverage more than €6 billion of investments with substantial impact on the competitiveness of the EU industry and essential to address societal challenges.

The 2012 Communication on ERA helped to identify key measures to optimise the effectiveness of investment in R&D as well as to consolidate the partnership. The ERA Progress report also provides a factual basis to assess progress in key areas and work has started so as to assess the potential economic impact of these reforms.

Fragmentation is being reduced as well through better linkages between academia and business, between public and the private sectors and between sectors. Due to measures favouring researchers' mobility it is easier for European and third country researchers to develop their work anywhere in the continent.

· Getting ideas to market

Great efforts have been made in delivering the tools for a more innovation-friendly business environment in Europe, such as the unitary patent and the revised public procurement directives which offer better opportunities for innovating.

Instruments to ease access to finance are in place and are about to start delivering, including reinforced debt and equity facilities and the venture capital passport. Such newly launched mechanisms and initiatives provide substantial support for innovation by leveraging the engagement of industry and business. Measures to overcome the insufficient availability of finance in Europe, a major obstacle to getting innovations to the market, have been put in place: the Risk-Sharing Finance Facility, jointly set up by the European Commission with the European Investment Bank Group, has ensured that for every billion euro of EU budget money the EIB has mobilised €12 billion in loans and over €30 billion in final R&I investment. This has led to additional resources of up to €40 billion since 2007 for research and innovation activities which would otherwise be left unfunded. Moreover, a specific SME instrument scheme was created to support SMEs in realising their best ideas.

While public intervention has in the past typically been used to stimulate the supply of research and new knowledge, over recent years it has increasingly been used to stimulate the demand for innovation with instruments such as pre-commercial public procurement, innovation-friendly regulation and standards-setting. For instance, procurement of innovation was facilitated through the development of modernised procurement directives, a methodology for the screening of regulation in terms of its impact on innovation was developed and tested by the Commission, the eco-innovation action plan was launched, and standard setting was modernised and made faster.

· Maximising social and territorial cohesion

The Innovation Union has also tackled the challenge of territorial and social cohesion. For instance, smart specialisation strategies have been established as an ex-ante conditionality for investment priorities under research, technological development and innovation. The aim is to promote a better innovation performance across European regions and Member States, without compromising on excellence.

The increased emphasis on social and public sector innovation is ensuring a broader uptake and societal impact of innovation, as well as a change of mind-set with regards to who should be concerned by innovation and who can be an actor of change in the EU. In particular, momentum is building around public sector innovation, where actions undertaken went beyond the initial expectations of the Innovation Union.

· The European Innovation Partnerships

The European Innovation Partnerships (EIPs) have presented a new approach to EU research and innovation. Five EIPs have been launched in key areas of active and healthy ageing, water, agriculture, raw materials and smart cities. They are now all in the implementation stage, having identified priorities, engaging a wide range of partners across the demand and supply sides of innovation, and starting to deliver first results. An independent evaluation of the overall performance of the EIPs has concluded that there are sound reasons for the EU to continue promoting the EIP approach, provided that the EIPs target systemic innovation with a strong focus on diffusion of innovation.

· Leveraging our policies externally

The global dimension of innovation has equally been taken into account. Several initiatives have been developed to increase Europe’s attractiveness as a research and innovation destination and partnerships between the EU and its Member States have been strengthened in the definition of priorities for cooperation with third countries, including with regards to the development of global research infrastructures.

· Making it happen

Progress in Europe and Member State’s innovation performance has been monitored in the framework of the integrated economic coordination (‘European Semester’), through the Innovation Union Scoreboard and the Innovation Union Competitiveness Report. This will be continued and improved through the Policy Support Facility under Horizon 2020. Exchange of best practices and mutual learning have equally been facilitated by the EU. In order to better monitor how well the expenditure in R&I is delivering results, an innovation output indicator has been developed. It allows a measure of the ability of the economy to transform knowledge into successful marketable innovations, so as to inform policy makers about the effectiveness of their expenditure in R&I and innovation eco-system.

Over the past years, a fundamental shift in the right direction has happened, reducing the innovation performance gap with our main competitors. The latest Innovation Union Scoreboard shows that, since 2008, the EU has managed to close almost half of its innovation performance gap with the US and Japan. Nevertheless, the gap with South Korea is widening and China is quickly catching up. As a consequence, we should not be content with the results achieved and stop paying the necessary attention to Europe's innovation performance. The EU, its Member States and other stakeholders need to continue working together to improve the European innovation eco-system.

Some important gaps remain and need to be filled in order to turn Europe into a more innovative society. The experience gained in the first years of implementation of the Innovation Union is useful in identifying needs for exploring better responses to Europe’s innovation-related issues.

The eco-system for innovation has been greatly improved by putting in place key single market measures. Nevertheless, inconsistencies of rules and practices remain and are hampering the development of high growth innovative firms, which often find it too burdensome and risky to operate on other European markets. This reduces the diffusion of innovative products and services and limits the chances for the emergence of new ones. The prospects of a full roll-out of the single market would indeed be a major driver of investment and innovation, including through the exploitation of digital technologies.

Closer involvement of society has proven to be key in fostering a wider innovation culture in Europe. It should be promoted in all phases of the innovation cycle so as to make innovation more relevant and acceptable and to improve its uptake.

The public sector is increasingly recognised as a key driver of innovation. While its role in promoting innovation through regulation, fiscal policies, standard setting, procurement and supply-side policies has been tested in the past – and although there is room for an increased uptake of such tools in the future and for a better mix of supply and demand policies – its capacity to innovate itself so as to become more user-friendly, efficient and effective should be further explored.

Not all citizens and firms are on an equal footing with regards to innovation capacities and access to the benefits of innovation. Improving the inclusiveness of innovation appears to be increasingly important. At the same time, innovation can help lagging regions transform their economies and make them more competitive. Moreover, the benefits derived from the roll-out of smart specialisation strategies for research and innovation could be multiplied through better linkages across regions, allowing for the development of complementarities and European value chains.

Despite great progress made through the EIT, the Knowledge Alliances and other skills development schemes, skills shortage and mismatch is still important. It does not only concern sector-specific skills, but also numeracy and literacy skills, as well as the ‘21st century skills’ for creativity and entrepreneurial spirit.

Innovation is becoming more central to our economy and to our society. As illustrated in this SWD, all of the Innovation Union commitments are currently on course, setting the building blocks for increased growth and jobs. To continue to reap the fruit of all the measures that the Innovation Union has put in motion, it is now essential to ensure their full roll-out and use as well as to anticipate, where possible, further actions to optimise their impact, based on the lessons learnt during the first years of implementation. Strengthening the knowledge base and reducing fragmentation 1. Key messages

Good progress has been achieved in setting the basis for strengthening Europe's knowledge base and reducing its fragmentation.

The launch of the new EU research and innovation framework programme, Horizon 2020, and the development of ERA measures are important stepping stones in the path to a more research and innovation friendly environment in Europe.

Horizon 2020 is the biggest EU research and innovation framework programme ever launched, with over €80 billion dedicated to excellent research, industrial leadership and key societal challenges. It contributes to strengthening the knowledge base in Europe not only by funding research, but also by mainstreaming funding for activities in all stages of the innovation cycle, from frontier research to close-to-market innovation. It supports and encourages the participation of businesses, including SMEs. In parallel, billions are being invested in innovation-driven public private partnerships.

Key measures have been defined and put in place to attract more people to science and train enough researchers, in particular in the framework of the European Research Area.

The ERA is also contributing to reducing the fragmentation of the knowledge base in Europe, by putting in place measures aiming at facilitating the mobility of researchers across borders and across business and academia, among others. The recently launched U-multirank also contributes to this goal by improving the comparability of Higher Education Institutions based on broader criteria than other international university rankings. Also better coordination among European policies, for instance through the Grand Coalition for Digital Jobs, is key to reach this goal.

Examples of other measures that both strengthen Europe's knowledge base and reduce its fragmentation through better opportunities for linkages between business and academia include activities by the EIT KICs, the Knowledge Alliances, the development of the Innovative Doctoral Training Principles and the Maria Skłodowska Curie actions under Horizon 2020.

A better mapping of specific needs for research and innovation has been made possible, through a strengthened cooperation between the policy directorates of the Commission and the Joint Research Centre as well as due to the work carried out by the European Forum for Forward Looking Activities (EFFLA).

These actions are already providing valuable results and contributions to Europe's innovation eco-system. Nevertheless, it is too early to assess their full long term impact. For instance, Horizon 2020 was launched in 2014, but it will take some time before the projects and actions funded bear fruit.

Some gaps also remain in the implementation of the actions stemming from the commitments of the Innovation Union in this area. In particular, better coordination between policies at the European and Members States level would be highly profitable, notably with regards to researchers' mobility, open recruitment and uptake of the Innovative Doctoral Training Principles.

2. Progress so far Commitment 1: Put in place national strategies to train enough researchers

"By the end of 2011, Member States should have strategies in place to train enough researchers to meet their national R&D targets and to promote attractive employment conditions in public research institutions. Gender and dual career considerations should be fully taken into account in these strategies."

Over the past years, Member States have introduced a range of measures, programmes, strategies and legislative acts to address the barriers to an open and attractive European labour market for researchers.

The Researchers Report 2013[1] showed that the vast majority of countries reported new measures to train enough researchers to meet their national targets. This includes mainly three strands of measures: a) measures that national authorities and/or institutions have put in place to attract people to take science to an advanced level and thus potentially to become researchers; b) measures to enhance the quality and efficiency of doctoral training and provide life-long learning to researchers in accordance with national priorities and industry requirements; c) measures aiming to develop doctoral training in cooperation with industry so as to better link academia and the industry sector, leading to the development of projects of common interest and to an increased exploitation of research results by the enterprises.[2] The ERA Progress Report 2013[3] shows that incentives and/or strategies for gender equality in research are, to various degrees, in place in at least 18 Member States. It also shows that awareness programmes to attract girls to science and women to research are enforced by more than one third of Member States.

A series of EU policy initiatives such as the development of the EURAXESS network, in particular a large increase in the use of EURAXESS Jobs, the ‘Scientific Visa Directive’ (see commitment 30), a Human Resources Strategy for Researchers based on the Charter and Code,[4] and Principles of Innovative Doctoral Training have contributed to this progress. Marie Skłodowska-Curie actions (MSCA) contribute to influencing ERA by setting standards for research training, attractive employment conditions and open recruitment for all EU-researchers, and by aligning national resources as well as influencing regional or national programmes through the co-fund mechanism.

Marie Skłodowska-Curie actions (MSCA) in Horizon 2020

65,000 researchers will be funded under MSCA in Horizon 2020. All of them will receive high quality research training and excellent career opportunities in both public and private sectors. The MSCA are exemplary in the way they have integrated the principles set out in the European Charter for Researchers and the Code of Conduct for the Recruitment of Researchers, notably by providing employment contracts with full social security coverage to Marie Curie fellows, offering outstanding career development opportunities to the researchers funded by the programme and using open, transparent, impartial and equitable methods for their selection and recruitment. All MSCA funded jobs are systematically published on the EURAXESS Jobs portal where a dedicated search directory has been set up. Gender is of particular concern to MSCA funding. The programme aims to increase women's participation in research through practices of equal treatment and family-friendly measures (a dedicated family allowance under Horizon 2020). The Career Restart Panel also helps those who wish to resume a career in research after a break.

Through the COFUND mechanism, extended in Horizon 2020 to doctoral programmes, the relevant regional, national and international actors introduce or further develop the transnational dimension of their offers. Moreover, they will be encouraged to align the practices of their doctoral and fellowship programmes with the EU principles on Innovative Doctoral Training.

“EURAXESS – Researchers in Motion” is a pan-European initiative across 40 countries[5] that aims to facilitate the mobility of researchers and enhance scientific collaboration between Europe and the world. The EURAXESS member countries have underlined their commitment to contribute to policy initiatives at both national and European level, by promoting the EURAXESS Jobs portal and improving outreach to industry partners who have specific needs.

Researchers can find more than 8,000 research-related offers on EURAXESS Jobs on any given day. In 2013, more than 40,000 jobs were published online compared with 7,500 in 2010. This excellent progress, which is helping to match demand and supply across borders, is due to concerted efforts by the Commission, several Member States and institutions to ensure that a much larger proportion of research vacancies are posted on the portal, e.g, the inclusion of vacancies from major job providers such as Naturejobs, AcademicTransfer (NL), Galaxie (FR), CINECA (IT) and Focus Research (BE). Some countries have also adopted national legislation to make it mandatory for publicly funded institutions to advertise their positions at EURAXESS Jobs (e.g. Poland, Croatia, Italy).

Researchers relocating in one of the 40 countries across Europe can also rely on the personalised assistance provided by the EURAXESS Service Centres. Since 2009 nearly one million researchers’ queries have been treated.

With regards to the promotion of attractive employment conditions, EU Member States and Associated Countries continue to support the implementation of the European Charter & Code (C&C) which aims to improve researchers’ working conditions. In particular, the European Charter for Researchers addresses the roles, responsibilities and entitlements of researchers and their employers or funding organisations. The Code of Conduct for the Recruitment of Researchers aims to improve recruitment, to make selection procedures fairer and more transparent and proposes different means of judging merit. More than 480 organisations from 35 countries in Europe and beyond have explicitly endorsed the principles underlying the C&C and the level of institutional endorsements of the C&C principles continues to grow. The Commission’s Human Resources Strategy for Researchers focuses on the practical implementation of the C&C principles. More than 300 universities, research institutes and funders participate in it. So far, 178 'HR Excellence in Research' logos have been awarded to acknowledge their efforts.

Europe has relatively few researchers employed in industry, making up only 45% of total researchers compared with 78% in the US, 74% in Japan and 62% in China.[6] At the same time Europe continues to train an increasing number of PhDs (from around 72,000 in 2000 to 115,000 graduates in 2010). Although the nature of PhD training is diversifying and the majority of PhD graduates embark on careers outside of academia (evidence shows that in France, Germany and the UK over 50% of all PhD degree holders now take up jobs outside academia), early stage researchers are often inadequately informed about career paths outside of academia and have insufficient experience in industry and other relevant employment sectors. Only one in ten early-stage researchers reported receiving training in entrepreneurship or intellectual property rights during their PhD.

As a response, the Commission has worked with experts from industry, academia, and national research ministries to prepare seven Principles for Innovative Doctoral Training,[7] to foster excellence and a critical mind-set and provide young researchers with transferable skills and exposure to industry and other employment sectors. The Council of Ministers has endorsed these principles and has called on Member States and universities to provide financial support (see Commitment 4).

The MSCA will enable around 25,000 doctoral candidates (around 3% of the total number in the EU) to be recruited by 2020 to high-quality programmes in Europe. These will provide experience outside academia, hence developing increased employability skills amongst PhD holders.

A number of challenges remain and a coordinated effort by Member States and institutions is needed to remove remaining obstacles to researcher mobility, training and attractive careers. This includes ensuring that all research positions are subject to open, transparent and merit-based recruitment practices. Member States, research funding and research performing organisations are also encouraged to promote a wider uptake of the innovative doctoral training principles, including, where appropriate, through use of the European Structural and Investment Funds.

The Commission is therefore working closely with the ERA Steering Group on Human Resources and Mobility, composed of Member State representatives on a range of initiatives related to an open labour market for researchers with ERA. In particular, two Working Groups have been formed to tackle the issues of Innovative Doctoral Training and the Professional Development of Research Careers. This will include the development of a toolkit for those looking to implement the Innovative Doctoral Training principles.

Commitment 2 – part 1: Test feasibility of independent university ranking

"In 2011 the Commission will, on the basis of the current preparatory work, support an independent multi-dimensional international ranking system to benchmark university performance. This will allow the best performing European universities to be identified. In 2011 further steps will be proposed in a Communication on the reform and modernisation of higher education."

Higher education institutions play an important role in several areas, including teaching, research knowledge transfer, international positioning and regional engagement. In order to reform higher education in Europe, increased transparency about how Europe's higher education institutions perform on each one of these dimensions is needed. To this end, the Commission has been working on the delivery of a new, independent and multidimensional ranking system to benchmark Higher Education Institutions (HEIs) performance, U-Multirank.

U-Multirank differs from existing world rankings by having a multidimensional, user-driven approach to international ranking of higher education institutions. It takes a holistic approach to rankings with the following five dimensions: teaching and learning, research, knowledge transfer, international orientation and regional engagement. There is no pre-defined weighting to the dimensions and indicators, unlike existing world rankings (which emphasise research through a composite indicator that accounts for around 60% of the individual ranking place). As a result, it provides a more rounded approach to measuring university performance, by assessing all aspects of University activity, and it provides an overview of the diversity of European higher education, identifying the outstanding performers across all areas where HEIs are active.

This ranking is user-driven, as it allows users to develop personalised rankings by selecting indicators in terms of their own preferences and provides both ranking of whole institutions and of disciplines. The four disciplines in the 2014 ranking are: business studies, mechanical engineering, electrical engineering and physics.

The first U-Multirank results, with more than 500 HEIs (whole institutions) and 1272 disciplines (four discipline-specific rankings) were published in May 2014. In addition, over 360 institutions were included on the basis of publicly available data (from bibliometric and patent databases) mainly in the area of research and knowledge transfer. Participating institutions come from 70 countries around the world. Around 62 % of all institutions are from Europe, 17 % from North America, 14 % from Asia and 7 % from Oceania, Latin America and Africa. .

U-Multirank is an important tool for every stakeholder involved: for policy makers as a transparency tool to reform higher education based on the inherent strengths of individual HEIs and thus build diversity and specialisation within European higher education; for students to make informed choices of where to study; for HEIs to seek partners and compare performance with their peers; and for business to find suitable partners for cooperation.

U-Multirank will publish three additional rankings in 2015, 2016 and 2017 before an independent organisation (independent from the Commission, member states and higher education institutions) is established in 2017. The European Commission will fund U-Multirank until the independent organisation is created.

Commitment 2 – part 2: Create business-academia Knowledge Alliances

"The Commission will also support business-academia collaborations through the creation of "Knowledge Alliances" between education and business to develop new curricula addressing innovation skills gaps. They will help universities to modernise towards inter-disciplinarity, entrepreneurship and stronger business partnerships."

Knowledge Alliances are structured partnerships bringing together higher education institutions and companies with the aim to design and deliver new curricula and courses, to develop new and innovative ways of teaching and learning, to facilitate the flow of knowledge between higher education and companies, to stimulate interdisciplinary activities/learning and to develop entrepreneurial skills and attitudes. Knowledge Alliances cover a comprehensive set of different activities, including for example exchanges of students/academics and company staff.

The ultimate goal of the Knowledge Alliances is to stimulate innovation in and through higher education and to make the cooperation between higher education and business a more common feature in European higher education systems.

The Commission launched the first call for the creation of the first three Knowledge Alliances pilot projects in 2011, which was followed by a second one in 2012. Both calls were supported with €1 M provided by the European Parliament each and both met with high interest (93 and 103 applications respectively) and provided a very strong proof of concept.

Following their success, in 2013 the Knowledge Alliances were integrated into the last call for proposals under the Lifelong Learning Programme (2007-2013) and were included in the Commission's proposal for the Erasmus+ programme, with an expected output of around 150 Knowledge Alliances over the funding period (2014-2020).

Commitment 3: Propose an integrated framework for e-skills

"In 2011, the Commission will propose an integrated framework for the development and promotion of e-skills for innovation and competitiveness, based on partnerships with stakeholders. This will be based on supply and demand, pan-European guidelines for new curricula, quality labels for industry-based training and awareness-raising activities."

The growth, competitiveness and innovation capability of European industry as well as social cohesion are increasingly dependent on the strategic and efficient use of information and communication technologies (ICT), as well as the knowledge, skills, competences and inventiveness of the European workforce and citizens.

There is broad consensus about the crucial importance of the long-term challenge of e-skills for Europe. As new technologies are developing rapidly, e-skills are increasingly sophisticated and need to be constantly updated. With demand for skilled ICT practitioners exceeding supply, Europe could face a shortage of up to 560,000 ICT workers in 2015 which could exceed 1 million by 2020. There is a critical need for individuals with e-skills as well as creativity, innovation and higher-level conceptual skills.

In response to this challenge, over the period 2010-2014 several important results have been delivered at EU level.

Foresight scenarios on the supply and demand (2015-2020) including individual country reports, an analysis of the impact of cloud computing, of cybersecurity, green IT and global sourcing on e-skills have been developed.

In 2012, two seminal reports on 'e-Skills and ICT Professionalism: Fostering a European ICT profession' and on 'e-Leadership: Vision, Roadmap and Foresight Scenarios' presented a clear vision and roadmap (2014-2020) for the promotion of ICT professionalism and of e-leadership in Europe.

The European e-Competence Framework 3.0 (e-CF) has been released in December 2013 by the European Standardisation Committee (CEN). It constitutes a basis for the development of the ICT profession together with bodies of knowledge, ethics and education and training. It has already been adopted by several countries as a national standard, e.g. Italy and the Netherlands, and should become a European standard in 2015. Based on the e-CF online self-assessment tools have been developed, e.g. by CEPIS and EXIN, and proposals for quality labels for IT industry training and certification have been released. The proposed labels are based on the e-Competence Framework and EQAVET (the European Quality Assurance in Vocational Education and Training) enabling to make it possible to distinguish different types of training and certification referenced against the e-Competence Framework. Leading IT companies have now been able to map their IT training courses and certifications against the e-CF, e.g. as Microsoft, Cisco, CompTIA, HP etc.

In 2013, e-leadership skills have started to become an issue in policy and multi-stakeholder initiatives of 21 of 27 EU Member States. Developments are still in their infancy, though, with the exception of Denmark, Germany, Finland, Malta, the Netherlands and the UK. These skills have only become an issue in countries which rank at the top in Europe in terms the propensity for a country to exploit the opportunities offered by ICT.

A complementary initiative on the development of common bodies of knowledge has been launched in January 2014 and future work will also address the issue of professional ethics. The first conference on the international dimension of e-skills and ICT professionalism on 26 March 2014 in Brussels attracted leading experts from Australia, Brazil, Canada, Chile, Japan, India, Malaysia, Russia, South Africa and the USA.

To raise awareness on e-skills and the demand for highly skilled digital jobs the Commission organised the e-Skills Week (26-30 March 2012). This initiative demonstrated a strong mobilisation of stakeholders in a wide range of pan-European and national activities including 2.235 events involving over 1.8 million participants in 37 European countries. New 'e-Skills for Jobs"' campaigns will be organised over the period 2014-2016 with a view to reach larger target groups. As a result, numerous multi-stakeholder partnerships have been launched and in March 2014 a comprehensive analysis of the situation in Europe has been released: 'e-Skills in Europe: Measuring progress and Moving Ahead' including the benchmarking of Member States policies and over 100 multi-stakeholder partnerships.

The analysis of national policy and initiatives in the ICT domain across EU Member States shows high or even very high levels of activity in many countries not only in the digital literacy domain but also in the e-skills area where the focus is on ICT practitioners. The group of leading countries includes the UK and Ireland. Belgium, Germany, Denmark, France, Malta the Netherlands and Sweden also perform strongly in terms of the level of activity for ensuring adequate supply of ICT practitioners on the labour market. There are clear indications that the e-skills agenda and the subsequent initiatives by the Commission including the e-Skills Manifesto in 2012 have triggered Member States to engage in public debates about the e-skills issue and helped them to develop appropriate responses. However, the degree of integration and consistency of policy-making is still limited in a significant number of Member States. Many countries lack a master strategy or the topic still does not attract continuous attention in policy-making across the different policy areas concerned. Typically, measures are taken for adapting the education system to the demands of a knowledge-based economy, but in some countries little reference is being made to ICT practitioner skills and the need to boost supply of suitably qualified ICT professionals.

Building on the strong interest of stakeholders, President Barroso, Vice-Presidents Kroes and Tajani, Commissioners Andor and Vassiliou launched the 'Grand Coalition for Digital Jobs' in March 2013 at the conference on 'e-Skills and Education for Digital Jobs'. This initiative aims to further raise the profile of current efforts and increase the overall supply of ICT professionals and to match supply and demand of digital skills better. The goal is to start to increase the supply of ICT practitioners by 2015, so as to ensure a sufficient number in Europe by 2020. The initial mandate of the Grand Coalition runs from 2013 to 2015 with a review foreseen at the end of this term. The results of the Grand Coalition are encouraging: we have received more than 40 pledges so far, including from large companies, e.g. Google, Telefonica, SAP, Microsoft, Cisco, Oracle etc. Pledges have come in also from smaller companies, education providers and NGOs, while policy-makers all over Europe and the European Council (24-25 October 2014) have provided strong political support to the initiative. In addition, National Coalitions are being developed in more than 10 Member States with the aim of facilitating action at local level. For example, Lithuania and Poland have officially launched their national coalitions.

The main priorities for the future (2014-2020) will be the promotion of ICT professionalism and e-leadership and the generation of a larger talent pool of ICT professionals, entrepreneurs, business leaders, managers and advanced users with a focus on the strategic use of new information and communication technologies. After a continuous decline since 2006, the supply of ICT practitioners has started to improve slowly after 2009. This promising trend must be sustained to maximise the benefits for Europe of the digital economy.

Commitment 4: Propose an ERA framework and supporting measures

"In 2012, the Commission will propose a European Research Area framework and supporting measures to remove obstacles to mobility and cross-border co-operation, aiming for them to be in force by end 2014."

In 2012 the Commission adopted the Communication 'A Reinforced European Research Area Partnership for Excellence and Growth' which sets out five priorities: more effective national research and innovation systems, optimal transnational cooperation and competition (including research infrastructures), an open labour market for researchers, gender equality and gender mainstreaming in research and optimal circulation, access to and transfer of scientific knowledge. For each priority, the Communication presents a series of actions to be undertaken by Member States, Stakeholder Organisations and the Commission. It also announces the setting up of the ERA Monitoring Mechanism to identify progress in ERA.

Alongside the ERA Communication, the Commission launched a Stakeholder Platform in which currently six European stakeholder organisations (SHO) take part.[8] These SHO have agreed to work together with the Commission towards the implementation of ERA. The Platform provides a forum where they interact regularly to explore the best ways to facilitate the implementation of the key ERA priorities.

In 2013 the Commission presented the first ERA Progress Report, which included a thorough presentation of the state of play of ERA in the Member States and some Associated Countries as well as indications of ERA implementation by research performing organisations. Structural reforms are already being implemented at Member State level, and ERAC[9] has become a major forum of policy exchanges between Member States in terms of research policy.

Almost all SHO published a report on how they have progressed towards ERA. The reports shows real progress has been made by the members of the SHO, especially in fields such as research infrastructures, doctoral training, gender policy and open access to publications. However, cross border research cooperation would need more support to achieve its full potential.

The Competitiveness Council, on 21 February 2014, acknowledged that "the ERA Progress Report 2013 provides a good initial analysis of the state-of-play of the implementation of the ERA priorities in the Member States and at European level. The report shows that much has already been achieved towards the construction of ERA, and also gives a first indication of possible areas for future action".

It also "invited the Member States in close cooperation with the Commission, considering the ERAC opinion and working through ERAC, to develop by mid-2015 an ERA roadmap at European level". Accordingly, it called on the Member States "to take fully into account the ERA implementation when developing national strategies. This may include the development of national ERA initiatives".

In 2014 the Commission will present the second ERA Progress Report, It will include a full assessment of progress in the adoption of policies in support of ERA. It will also present the implementation of ERA by research funders – the ones translating national policies into concrete measures - and by research performing organisations – the ones implementing the ERA actions in their daily work - in the different countries.

The Joint Programming process is one of the five ERA partnerships launched by the Commission in 2008.[10] A first assessment suggests that three Public-public partnerships can contribute to increased growth and well-being in the EU:

The Joint Programming Initiative (JPI) on Neurodegenerative diseases (JPND) gathers 25 Member States. It has much increased the coordination of ERA research and contributed to increasing fourfold investment in the area between 2007 and 2011. Its Joint Call on Biomarkers for Alzheimer’s disease is one of the biggest in the world. The JPI has attracted Canada as a full partner and the US National Institutes of Health (US-NIH) is negotiating possible collaborations. The Commission proposed to invest €600 M in a Joint Programme with 37 EU Member States and Associated Countries through the Art.185 initiative on Metrology.[11] According to the ex-ante Impact Assessment, the first Art.185 initiative (2007-2013) has contributed to increasing coordination on metrology research in the ERA, delivering equal quality to US NIST activities, for a fourth of the investment. All countries in the ERA undertake research on rare diseases, as private business would not invest in diseases affecting each less than 0.05% of Europeans. However, together, the more than 6,000 diseases affect directly some 25 million Europeans.[12] No country can deal with such diseases alone. The ERA-NET scheme and the International Rare Diseases Research Consortium (IRDiRC)[13] have increased coordination of research not only in Europe, but in the whole world, contributing to the fact that available therapies on rare diseases were multiplied tenfold, from 14 in 2010, to more than 100 in 2014.[14] Commitment 4.1 - Comparable research careers structures

The 2011 communication ‘Towards a European Framework for Research Careers’ set the basis for the creation of a framework that allows better comparability for research careers structures. The European Framework for Research Careers (EFRC) identifies both necessary and desirable characteristics, which could be applicable across a wide range of careers, including those in higher education, the private and public sectors. The Framework is intended to foster cross-border and cross-sector researcher mobility, helping researchers to identify job offers and employers to find suitable candidates.

The Framework consists of four profiles:

- R1 - First Stage Researcher (up to the point of PhD)

- R2 - Recognised Researcher (PhD holders or equivalent who are not yet fully independent)

- R3 - Established Researcher (researchers who have developed a level of independence)

- R4 - Leading Researcher (researchers leading their research area or field)

Consensus among stakeholders on the Framework was reached in 2011 and the report was adopted by the ERA Steering Group on Human Resources and Mobility. The Framework was firstly introduced - for self-categorisation purposes - on the EURAXESS Jobs Portal and in 2012 the ERA Communication invited research stakeholder organisations to advertise all vacancies on the EURAXESS Jobs portal using the common profiles established in the Framework.

In 2013 most universities, other research organisations, funders and companies refer to the EFRC in their recruitment, human resources management, training and all the EURAXESS Jobs and national portals use the framework and its descriptors for their job categorisation. Also EU programmes (Framework Programme, Erasmus, Erasmus Mundus) use the framework and its descriptors for their grant schemes.

Commitment 4.2 - Innovative Doctoral training

In 2011, a set of Principles for Innovative Doctoral training were defined with the help of experts from university associations, industry and funding organisations. They reflect the Salzburg Principles of the EUA, good practice in Member States and the Marie Curie experience. The Principles were adopted by the ERA Steering Group on Human Resources and Mobility and endorsed in the November 2011 Council conclusions on the Modernisation of Higher education.

The principles refer to: 1) Research Excellence, 2) Attractive Institutional Environment (in line with the Charter & Code), 3) Interdisciplinary Research Options, 4) Exposure to industry and other relevant employment sectors, 5) International networking, 6) Transferable skills training, 7) Quality Assurance.

The 2012 ERA Communication invited research stakeholders to "provide structured doctoral training based on the Principles for Innovative Doctoral Training" and "develop and implement structured programmes to increase mobility between industry and academia".

Their wider uptake has been explored through a study on the Implementation of the principles in 2013 (with on-site visits to 20 universities in 16 countries during 2013) and Marie Curie Action grant support. The aim was to verify the feasibility of the principles against current institutional practice and the emerging needs of the Innovation Union and to propose a set of recommendations to promote the implementation of the principles on a Europe wide scale. According to the results of the study, the principles are well-accepted and subscribed to by all target groups at institutional, doctoral, policy and non-academic levels and are considered as a ‘guiding tool’. Research excellence seems to be the ‘leading’ principle, based on quality assurance and attractiveness of the research/institutional environment.

Half of the Marie Skłodowska-Curie funding in Horizon 2020 will be dedicated to innovative doctoral training, including industrial and joint doctorates. Marie Skłodowska-Curie actions (MSCA) will combine research excellence with training on entrepreneurial skills and encourage doctoral candidates to engage with industry and other employers during their fellowship, thus reducing cultural and other barriers to mobility and inter-sector collaboration

A Working Group has been created by the ERA Steering Group on Human Resources and Mobility to look at practical ways to widen the uptake of the principles across Europe.

MSCA-backed researchers in team behind Higgs boson 'God particle' discovery

Six researchers associated to the Marie Skłodowska-Curie Initial Training Network (ITN) ACEOLE were directly involved in the revolutionary sub-atomic particle discovery of the Higgs Boson by the CERN, the European nuclear research facility. The discovery stands out as one of the great scientific achievements of the 21st Century so far.

The six fellows involved helped to develop the data readout systems used at the Large Hadron Collider particle accelerator tunnel at CERN.

Researchers from another ITN, 'TALENT', provided operational support for the experiment. This other network, created in 2012, is developing measurement tools for a better understanding of the precise nature of the new particle.

Commitment 4.3 – Creation of a Pan-European Pension Fund for Researchers

International mobility of researchers contributes to excellence. However, some administrative settings discourage such mobility. For instance, mobile researchers risk losing their supplementary pension benefits. In fact, approximately 12% or 154,000 researchers from higher education institutions risk losing their pension entitlements when moving to another country.[15]

Building on earlier preparatory work, the Commission committed in 2012 to support stakeholders in setting up pan-European supplementary pension fund(s) for researchers. The purpose of the project is to ensure adequate and sustainable occupational pensions for mobile and non-mobile researchers in the European Economic Area.

A Task Force was created in 2013 to prepare a proposal on the establishment of a pan-European Retirement Savings Vehicle (RSV) for professionals employed by research organisations. In early 2014 the Task Force transformed into a consortium of committed employers. The purpose of the consortium is to promote the establishment of the Institution for Occupational Retirement Provision (IORP) that will manage occupational pension plan(s) for the benefit of researchers (and their beneficiaries) of the sponsoring undertakings (universities and/or research institutions) within the EEA. The consortium will represent sponsoring undertakings in the governance structure of the IORP and promote insurance-based or other forms of occupational retirement provision for researchers in the EU to supplement the IORP.

In addition to the seminars to raise awareness, the European Commission has foreseen €1.8 million under Horizon 2020 to sponsor the set-up of notably the IORP and the insurance scheme as well as the functional administration, including the selection of provider(s). The fund should become operational by the beginning of 2015, with defined pension contributions being transferred to the fund in early 2015.

Commitment 5: Construct the priority European research infrastructures

"By 2015, Member States together with the Commission should have completed or launched the construction of 60% of the priority European research infrastructures currently identified by the European Strategy Forum for Research Infrastructures (ESFRI). The potential for innovation of these (and ICT and other) infrastructures should be increased. The Member States are invited to review their Operational Programmes to facilitate the use of cohesion policy money for this purpose."

ESFRI, the European Strategy Forum on Research Infrastructures, is a strategic instrument whose mission is to support a coherent and strategy-led approach to policy-making on research infrastructures in Europe, and to facilitate multilateral initiatives leading to the better use and development of research infrastructures, at EU and international level. This strategy aims to overcome the barriers stemming from the fragmentation of national R&I policies and provides Europe with the most up-to-date Research Infrastructures, responding to the rapidly evolving science frontiers, promoting knowledge-based technologies and their extended use.

ESFRI issued a new Roadmap in 2010 highlighting priorities for research infrastructures for the following 10 years. The seventh Framework Programme for Research (2007-2013) has supported all ESFRI projects on the 2010 ESFRI Roadmap in order to carry out their Preparatory Phase towards actual construction and operation. The 2010 ESFRI Roadmap comprises forty-eight ESFRI research infrastructures, which cover a broad spectrum of scientific fields and includes also two projects from CERN’s European Strategy for Particle Physics. Projects in the 2010 ESFRI Roadmap span social sciences and humanities (5), environmental sciences (9), energy (7), biological and medical sciences (13), materials and analytical facilities (6), physical sciences and engineering (7) and e-infrastructures (1). They are of different sizes and scope. These include the upgrading and/or the creation of 14 new large-scale single sited expensive facilities and 36 distributed RI, which in many cases will offer new European services and facilitate access of researchers to scientific resources, data, information and material in various scientific domains.

The ESFRI Implementation Group (IG) published in 2012 its first report on the state of the implementation of the projects on the ESFRI Roadmap 2010. The results of the IG report show that the projects are making good progress towards achieving the Innovation Union Commitment. The report identified a total of 27 projects that were "under implementation" making, thus, up to 56% of the 48 ESFRI projects. According to the IG report, the most frequently cited bottleneck for ESFRI RI was, however, the development of a suitable funding model, which would be at the same time sustainable, equitable and realistic. Securing the necessary funding from Member States and Associated Countries is exacerbated by the current economic crisis. Eighteen national roadmaps are already published.[16] The focus of the current process is more on making decisions and securing long term commitments to the construction. However, according to conservative estimates, 14 ESFRI projects currently provide services to users.

An experts workshop was held in 2011 to assess the potential of RI for industrial innovation. Such workshop provided recommendations to enhance the role of RI in Horizon 2020.

The European Commission, together with ESFRI, established a High Level Expert (AEG) in 2012 in order to make a more detailed assessment of the financial and managerial maturity of the ESFRI projects towards implementation. Published in 2013, the AEG report[17] shows that most of the ESFRI projects need substantial support and guidance both in terms of managerial and financial security but also regarding stakeholder engagement, project management, user strategy and risk evaluation.

The European Commission published the first Horizon 2020 calls for research infrastructures and has secured exceptional financial support for this ESFRI shortlist of projects. This one-time EU financial contribution under Horizon 2020 will only be made available once the Member States’ commitment to those projects is confirmed.

Progress has been made in the adoption of Member States' and Associated Countries' national roadmaps which underpin national decisions for the participation to ESFRI projects. Long term investment and commitments of the Member States and Associated Countries to the implementation process is crucial.

In 2014, Commission services will issue a guide setting out cost-benefit analysis of major projects, including research infrastructure. Since 2007 JASPERS, a joint technical assistance facility for major projects run by the EIB with Commission co-funding, provided support for the preparation and implementation of research infrastructures, including 14 major projects with a total cost of over EUR 2 billion. Also the Commission encourages the inclusion of support for the ESFRI roadmap in national and regional programmes and smart specialisation strategies (as recommended by the 2012 ERA Communication). This reflects the requirement in the ex-ante conditionality relating to research and innovation infrastructures and capacities to adopt an indicative multi-annual plan for budgeting and prioritisation of investments linked to EU priorities, and, where appropriate, ESFRI.

Commitment 6: Simplify and focus the future EU R&I programmes on Innovation Union

"Future EU research and innovation programmes will focus on Europe 2020 objectives and particularly the Innovation Union. In 2011, looking ahead to the next financial perspectives, the Commission will set out ways for future programmes to focus more on societal challenges, streamline funding instruments and radically simplify access through a better balance between a control-based and a trust-based system. The role of the ERC in promoting excellence should be strengthened and industry driven priorities reinforced (including industry driven partnerships in areas such as key enabling technologies) in the research Framework Programme."

Horizon 2020, the new EU programme for research and innovation running from 2014-2020, was proposed by the European Commission in November 2011 and adopted by the European Parliament and the Council in December 2013. The first work-programme (covering 2014-2015) was adopted by the Commission in December 2013 and agreed by the Member States and EEA EFTA countries in February 2014.

With a budget of nearly €80 billion over seven years, Horizon 2020 is the biggest EU research programme yet, and one of the biggest publicly funded worldwide. It is a totally new type of research and innovation programme for the EU that has been designed to deliver results that make a difference to people's lives. Built on three pillars – Excellent Science, Industrial Leadership and Societal Challenges - it will fund all types of activities, from frontier science to close-to-market innovation.

Horizon 2020 focuses on Europe 2020 and the Innovation Union in particular, by bringing together all existing EU research and innovation funding, providing support in a seamless way from idea to market, through streamlined funding instruments and simpler programme architecture and rules for participation.

Some key elements of Horizon 2020 are:

· A challenge-based approach to key issues facing societies, such as healthcare, sustainable agriculture, smarter and greener transport, and climate change;

· Investment in Key Enabling Technologies such as photonics, nanotechnologies and biotechnology;

· A dedicated SME Instrument and a 'Fast Track to Innovation' pilot scheme to speed up the time from idea to market, and to increase the participation of industry, SMEs and first time applicants (see commitment 7);

· Innovative public-private partnerships in areas such as new medicines, greener aircraft technologies and electronics;

· A reinforced European Institute of Innovation and Technology (see commitment 9);

· Increased funding for the European Research Council, already one of the world's premier frontier-research funding agencies;

· Strengthened Marie Skłodowska-Curie actions, providing grants for research fellowships (see commitments 1 and 4);

· A renewed focus on widening participation in less well-performing EU countries, including better synergies with European Structural and Investment Funds;

· A reinforced cooperation between science and society, pairing scientific excellence with social awareness and responsibility, increasing the attractiveness of science careers and promoting gender equality in research and innovation.

The programme for the first time brings all EU-level funding for research and innovation under one roof, provides a single set of rules and will radically slash red tape. The overarching goal is a more coherent, simpler programme that will make it easier to participate, especially for smaller research organisations and small businesses. Key elements include: a simpler programme architecture which makes it easier for participants to identify where funding opportunities exist; a single set of participation rules applying to all funding provided; electronic signature of grants and amendments; simpler funding rules, with overall two standard funding rates; a reduced burden of financial controls and audits, due partly to the use of flat rates for indirect costs, a major source of error in the past.

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

"The Commission will design future EU research and innovation programmes to ensure simple access and stronger involvement of SMEs, in particular those with a high growth potential. Further use should be made of partnerships with Member State agencies, building in particular on the experience of the Eureka Eurostars initiative."

The Horizon 2020 programme includes an integrated approach to SMEs.

SMEs are encouraged to participate across the whole Horizon 2020 programme. They can engage in collaborative projects as part of a consortium, and are supported through a new, dedicated SME Instrument[18] specially designed for highly innovative SMEs that want to develop, grow and internationalise, regardless of whether they are high-tech and research-driven or non-research conducting, social or service companies. The integrated approach, together with simplification efforts, are anticipated to lead to a minimum of 20% (some €8.65 billion) flowing to SMEs from the total combined budgets of the specific objective 'Leadership in enabling and industrial technologies' and the 'Societal Challenges' over the 2014-2020 duration of Horizon 2020. Furthermore, at least one-third of the €2.842 billion budget of the debt and equity facilities of the 'Access to Risk Finance' part of Horizon 2020 is expected to be absorbed by SMEs.

The SME Instrument will be crucial in achieving this target, as at least €3 billion will be channelled through it. The Instrument aims to fill gaps in funding for early-stage, high-risk research and innovation by SMEs, as well as stimulating breakthrough innovation. It provides easy access for small firms, with simple rules and procedures, and is designed to encourage individual SMEs (as potential mono-beneficiaries) to put forward their most innovative ideas. The permanently open call launched in March 2014 offers business innovation grants - a lump sum of €50,000[19] - for feasibility assessment purposes; business innovation grants of €500,000 to €2.5 million[20] for innovation development and demonstration; free-of-charge business coaching, to support and enhance a firm’s innovation capacity and help align the project with the company's strategic business needs; a wide range of innovation support services; and facilitated access to risk finance to foster the commercial take-up of the innovation.

The Eurostars 2 Joint Programme, undertaken by several Member States and Associated Countries in the framework of Eureka, with the participation of the EU, promotes market-oriented transnational activities of research-intensive SMEs in any field. By pooling together national resources, Eurostars 2 also aims at strengthening the integration of national research programmes contributing to the achievement of the European Research Area. The Joint Programme was proposed as part of the Innovation Investment Package in July 2013 and interinstitutional negotiations were successfully completed in February 2014.

Commitment 8: Strengthen the science base for policy making through JRC and create EFFLA

"The Commission will strengthen its science base for policy making through its Joint Research Centre. The Commission will also create a "European Forum on Forward Looking Activities" bringing together existing studies and data and involving public and private stakeholders to improve the evidence base of policies."

Over the past years, the Joint Research Centre (JRC) has taken a number of initiatives to strengthen connections between its science and the Commission's policy agenda and meet the goal of becoming a major player in transforming science into policy advice. The new JRC Work Programme for 2014-15 identifies how the JRC's science supports different EU policies. In cooperation with Policy Directorates General in the Commission, the JRC aims to ensure that its scientific output is focused on the Commission's policy priorities.

The JRC is also raising the profile of science in policy debates through high level events bringing together top scientists and EU policymakers on key political issues.

Moreover, the JRC has reinforced its participation in the internal Commission impact assessment process for new policy initiatives and has revived its work on foresight, to help science inform strategy setting. It is carrying out foresight studies with the aim of contributing to the EU Policy cycle. So far, it has completed one foresight study on the Future of Standards and Standardisation. A JRC foresight study on Food and Health is also nearing completion. Two further studies on the Future of Eco-Industries and Global Food Security will be completed by June 2014.

The European Forum on Forward Looking activities (EFFLA) was established in 2011. It delivered 17 policy briefs[21] on issues ranging from institutionalising foresight in Research and Innovation policy to societal challenge addressed by Horizon 2020.

EFFLA has also made recommendations for developing a foresight culture in the Commission, as well as for sense-making, foresight standards and cooperation with Member States. In addition, EFFLA has given advice on the societal challenges in Horizon 2020.

By advising the Commission on how to make foresight an integral part of the strategic programming cycle, EFFLA gave the Commission the capacity to better manage uncertainty and to address threats, to seize opportunities and to become a better user of foresight.

EFFLA played a key role in the establishment of a 'foresight hub' – a dedicated foresight team within the Commission. This hub's role is to coordinate foresight across Horizon 2020 and to draw on foresight from Member States and elsewhere to inform strategic programming. A network of 'foresight correspondents' has been set up, in order to enable the existing foresight knowledge and in Horizon 2020 projects to be used more efficiently and effectively.

Commitment 9: Set out an EIT Strategic Innovation Agenda

"By mid-2011, the EIT should set out a Strategic Innovation Agenda (SIA) to expand its activities as a showcase for Innovation in Europe. This should map out its long-term development within the Innovation Union, including the creation of new Knowledge and Innovation Communities (KICs), close links with the private sector and a stronger role in entrepreneurship. It should also build on the EIT Foundation set up in 2010 and on the introduction in 2011 of the "EIT degree" as an internationally recognized label of excellence."

The European Institute of Innovation and Technology (EIT) brings together the three strands of the knowledge triangle of higher education, research and innovation in new types of partnership – Knowledge and Innovation Communities (KICs).

The Strategic Innovation Agenda (SIA) of the EIT was presented in 2011. It outlines the consolidation and further development of the three existing KICs - on climate change (Climate-KIC), sustainable energy (KIC InnoEnergy) and the future information and communication society (EIT ICT Labs) - and the creation of five new ones in the areas of innovation for healthy living and active ageing, food for future, raw materials, added value manufacturing, and urban mobility. The proposal further includes measures enhancing EIT's impact and ensuring KICs' expertise and lessons learned are shared across Europe. Based on the SIA, the call for KICs in the areas of ‘Innovation for Healthy Living and Active Ageing’ and ‘Raw Materials’ was launched in February 2014.

The criteria for awarding an EIT label for KICs Masters courses and PhD programmes were defined in 2012. By the end of 2012, more than 35 Masters courses have obtained the EIT label and more than 1,000 students have enrolled in EIT education programmes. As result of the education, innovation, business support and entrepreneurship activities, more than 100 start-ups have been created to date, more than 400 business ideas have been incubated and around 90 new products, services and processes have been launched.

By 2020 the EIT is expected to train 10,000 Master students and 10,000 PhDs, create 600 new companies, and achieve systemic impact in the way universities, research centres and companies cooperate for innovation. 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.

EIT ICT Labs Master School

In 2014 the first Master students from the two year programme in ICT Innovation will graduate from the 21 participating top European universities. Their career options look bright as the evaluations from faculty, industry and the students themselves show that the combination of a technical major in the field of ICT and a minor in Innovation and Entrepreneurship truly boosts these skills.

The students are immerged in to the innovation areas of EIT ICT Labs through summer schools and winter camps connecting them to the ecosystem of researchers and industry in the field. This has proved to be very inspirational and a number of commercial ideas, projects and start-ups have formed. At the summer school on Health and Wellbeing in 2013 the students pitched ICT Business solutions for Philips by the end of the two week course.

“The students did very well. In general terms the quality of the solutions was quite good and some of them are nice input to our business cases. The enthusiasm and eagerness to crunch the cases were tremendous. The solutions were really refreshing in some cases and the final pitches showed that the students integrated the information they got in between. Fast learners! Very promising high potentials”, said Lisette Appelo, Director Human Capital of Philips.

By each year the activities of the EIT ICT Labs is scaling up by 100% so in autumn 2014 nearly 400 students will be welcomed and almost 100 will continue with further studies, as intrapreneurs in large companies or developing their own business creations.

The Foundation of the EIT (EITF) is an independent organisation dedicated to promoting a culture of innovation and entrepreneurship in Europe. It aims to enlarge the impact of the EIT via the promotion of entrepreneurial education, the creation of a new generation of young people with an entrepreneurial mind-set, and the development of an international network of talented professionals. The EIT Foundation gathers ten prominent companies actively involved in the implementation of the EIT Foundation’s work programme.

In 2013, the EITF has started implementing its work programme via the launch of the Young Leaders Programme - an entrepreneurial and leadership training programme gathering young professionals, entrepreneurs and students from all over Europe to ponder over EU's innovation challenges and propose recommendations to overcome them to key innovation leaders. The Young Leaders group presented their conclusions and recommendations to a high-level audience in the Foundation's Annual Innovation Forum organised on the topic of data-driven innovation in March 2013. A new edition of the Young Leaders Programme on the topic of Future Learning Environments was launched in March 2014.

The Foundation of the EIT has also launched a European internship programme. The programme targets EU's talented people and aims at equipping them with the competences needed to work in highly entrepreneurial and innovative frameworks. The programme will contribute to bridging current skills and innovation gaps across countries, sectors or disciplines and help tackling youth unemployment challenges.

In the coming years the implementation of the SIA actions will be completed and the EIT Foundation will be consolidated. As indicated in the SIA, the EIT is expected to enhance and widen its impact across the innovation community in the next seven year period.

Getting good ideas to market 1. Key messages

The business environment in Europe is becoming more innovation-friendly due to measures that favour the faster flow of ideas to market.

Better instruments to access finance, including reinforced debt and equity facilities and the venture capital passport, are in place and are about to start delivering. Clearer rules for state aid will start applying in the second half of 2014, leading to the possibility for Member States to design better economic incentives for innovation.

The basis for the development of a more efficient knowledge system that protects intellectual property and investments in knowledge while providing the conditions for open collaboration and knowledge sharing are in place. This concerns in particular the Unitary Patent, the exploration of knowledge markets for patents and licences, and the transition from a the concept of knowledge transfer to a system based on co-creation and open innovation.

Improved tools to foster demand for innovation have been put in place, including more modern standard setting, an operational methodology for regulatory screening, better rules for public procurement of innovation and the eco-innovation action plan.

New opportunities to innovate in the area of service innovation, building on a user-oriented approach, were exploited through initiatives linked to design, such as the European Design Leadership Board.

2. Progress so far Commitment 10 – Put in place EU level financial instruments to attract private finance

"By 2014: on the basis of Commission proposals, the EU should put in place financial instruments to attract a major increase in private finance and close the market gaps in investing in growth and innovation. Contributions from the EU budget should create a major leverage effect and expand on the success of current programmes. The Commission will work with the European Investment Bank Group, national financial intermediaries and private investors to develop proposals addressing the following critical gaps: investment in early stages of firm development, including knowledge transfer and start-ups; venture capital for fast growing firms expanding on EU and global markets; loans for innovative fast growing SMEs. The proposed instruments will have a high leverage effect, an efficient management and a simple access for businesses."

Horizon 2020 includes, for the first time in a framework programme, a specific section on 'Access to Risk Finance'. This covers a set of debt and equity financial instrument facilities and a range of accompanying measures that scale up and refine the debt financial instruments - the RSFF[22] and the RSI[23] - implemented under FP7, and the early-stage equity facility - GIF-1[24] - implemented under CIP. The facilities are designed to complement the financial instruments of COSME.[25] The first work-programme (covering 2014-2015) was agreed by the Member States and EEA EFTA countries in February 2014.[26] The budget for 2014-2020 in current prices[27] is €2,842 million.

As in FP7, debt and equity facilities will be run in a demand-driven manner, though the priorities of particular sectors or of other EU programmes will be targeted if top-up funding is made available, including from managing authorities wishing to invest part of their European Structural and Investment Funds (ESIF) programme contribution. The focus remains on attracting private investments into R&I. As before, firms and other entities located in the EU or in non-EU countries associated to Horizon 2020 are eligible as beneficiaries unless otherwise specified.

On the debt side, the products offered cover loans for R&I-driven SMEs and small midcaps,[28] loans, plus hybrid and mezzanine finance, for R&I-driven (or R&I undertaken by) medium and large midcaps, as well as loans for R&I undertaken by large firms, universities and other public research organisations, R&I infrastructures, public-private partnerships, and special-purpose vehicles or projects.

The equity facilities offer early-stage venture capital (VC) and quasi-equity for SMEs and small midcaps, plus a degree of potential investment in the growth stage, as well as equity and other forms of risk capital for the early stages, such as business angels investment, or technology transfer activities.

The European Investment Bank (EIB) and the European Investment Fund (EIF) will play an important role, as entrusted entities, in implementing each financial instrument facility on behalf of and in partnership with the European Commission. For EIF, this role includes (as under FP7 and CIP) conducting calls for expressions of interest for selecting the financial intermediaries, such as banks and risk-capital funds, that will make the actual loans to, or investments in, SMEs and small midcaps. While EIB will make large loans directly, it will also be able to use financial intermediaries as well, particularly when supporting medium and large midcaps. Exploratory talks with other financial institutions of comparable stature are underway, and in future one or more may join EIB and EIF in running facilities for the European Commission. The first calls for expressions of interest by financial intermediaries are likely to take place in the third quarter of 2014, assuming that negotiations with EIB and EIF are successfully concluded by the end of the second quarter.

Commitment 11 – Ensure cross-border operation of venture capital funds

"By the end of 2011, the Commission will present a proposal for a new legislative regime to ensure that Venture Capital funds established in any Member State can function and invest freely in the EU."

Access to finance is essential to enhance the competiveness and growth potential of SMEs. For this reason the European Commission is presenting a strategy to promote better access to finance for SMEs which includes a proposal for a regulation setting uniform rules for the marketing of venture capital funds.

The European Venture Capital Regulation (EuVECA) entered into force in July 2013. The new regulation makes it easier for venture capitalists to raise funds across Europe for the benefit of start-ups. The approach is simple: once a set of requirements is met, all qualifying fund managers can raise capital under the designation 'European Venture Capital Fund' across the EU. They will therefore no longer need to meet requirements which are different in every Member State. By introducing a single rulebook, venture capital funds will have the potential to attract more capital commitments and become bigger.

There is considerable interest by smaller operators to establish themselves as EuVECA managers. This is not surprising as the EuVECA rules explicitly limit eligible managers to firms that operate beneath the Alternative Investment Fund Managers Directive (AIFMD)[29] thresholds.

At present, three requests for a cross-border marketing passport have been filed with the competent national authorities, two in the UK and one in Slovakia. The latter was unfortunately withdrawn due to the cost of obtaining a registration. Indeed, as predicted in the pre-legislative impact assessment, the main obstacle to a rapid roll-out of EuVECA funds is the national registration process. In the post-crisis environment, national regulators are extremely cautious in registering smaller operators who find it more difficult than their larger peers to comply with a variety of post-crisis requirements, such as the separation of portfolio management and risk management functions or the independent valuation of investment assets.

More work needs to be conducted within the European Securities and Markets Authority (ESMA)[30] in order to entice national regulators to adopt a more flexible attitude in authorising EuVECA managers. Alternatively, the option of opening EUVECA funds to managers authorised under the AIFMD could be explored. The deployment of impact of this commitment will require striking a delicate balance between post crisis requirements on prudential oversight and the need to stimulate investment in Europe's real economy.

Commitment 12 – Strengthen cross-border matching of innovative firms with investors

"The Commission will strengthen cross-border matching of innovative firms with suitable investors. It will appoint a leading figure to lead the process. In addition, in the context of the SME Finance Forum, the Commission will focus inter alia on the particular financing problems faced by small, innovative companies."

In order to identify current trends and best practices in the area of matching innovative firms with investors on a cross-border basis and formulate policy recommendations, a European expert group was set up by the European Commission. The expert group was chaired by Anthony Clarke, Chairman of the British Business Angel Association and delivered recommendations to be considered both at the EU and at Member States level.

The expert group also made recommendations with regards to how R&D grants should be set up and recommended the creation of a business angels facility and of rules that would favour cooperation among business angels and venture capitalists. Recommendations concerning R&D grants were taken into account in the design of the new SME instrument (see commitment 7). To follow up on the recommendation concerning business angels, a study was included in the Horizon 2020 work programme for 2014-2015 which should deliver a more comprehensive picture of the potential for angel and crowd-funding investors to improve access to risk finance in the EU for, in particular, SMEs and small midcaps. In addition a pilot of a business angels facility focussing on ICT will be launched in 2015.

The Startup Europe initiative,[31] together with other matchmaking projects, have been launched in 2013 and 2014 to support accelerating programmes, coaching and mentoring of Web and ICT entrepreneurs, developing their investment readiness and facilitating interactions with investors across Europe.

Several meetings of the SME Finance Forum bringing together SMEs, banks and other financial institutions were organised from 2012 to 2014 to monitor the market situation and explore new ideas to improve access to finance for SME, including small, innovative companies.

The Commission is considering the recommendations made with regard to venture capital in the implementation details for the central financial instruments under Horizon 2020 and COSME.

Also, as a follow-up to the recommendations, the Enterprise Europe Network will provide more extensive advice and assistance to SMEs on accessing finance, and will cooperate closely with other local service providers such as financial intermediaries and accountants.

Commitment 13 – Review State Aid Framework for R&D&I

"In 2011 the Commission will conduct a mid-term review of the State aid Framework on research, development and innovation clarifying which forms of innovation can be properly supported, including for key enabling technologies and innovations addressing major societal challenges, and their best use by Member States. The Commission will assess the effectiveness of the temporary State aid measures introduced in 2008, including the increased "safe harbour" for venture capital investments, and on this basis make the necessary proposals."

The Mid-Term Review of the Community framework for State Aid for research and development and innovation was finalised in 2011.[32] Its objective was to start reflecting on the contribution of the R&D&I State Aid rules to the EU innovation goals in order to further promote private investment in R&D, smarter public investment and overall innovation.

The Mid-Term Review concluded that the current R&D&I Framework constitutes a useful instrument for well-targeted public support although all its possibilities have not been utilised by Member States to their full extent.

In parallel, a broader reflection was launched on the future R&D&I State aid policy, including on wider and more substantive issues such as aid effectiveness, architecture, and proportionality of the rules. To this effect a public consultation in the form of a questionnaire was opened to Member States and stakeholders between 2011 and 2012.

The European Commission then launched in 2012 the State Aid Modernisation (SAM), an ambitious reform package of State Aid policy with three key objectives: to foster growth in a strengthened, dynamic and competitive internal market, in line with the objectives of the Europe 2020 growth strategy; to focus enforcement on cases with the biggest impact on internal market; to streamline rules and ensure faster decisions.

The implementation of SAM is now well advanced. In particular, in 2013 the Council has adopted the revised Enabling regulation, which introduces new categories of aid that the Commission may decide to exempt from the obligation of prior notification, including innovation aid.

The Commission has also already adopted a number of revised rules, including new Risk Finance guidelines, which aim at ensuring that, in case of market failures, SMEs and small and innovative mid-caps have proper access to finance in order to bring new products and ideas to the market.

The new SAM rules are expected to be in place, ready to be used by Member States from the 1 July 2014. The new General Block Exemption Regulation (GBER) is expected to be significantly extended and, in particular, it should increase the notification thresholds for R&D projects and include new exempted categories such as innovation aid and aid for research infrastructure. The new GBER should therefore ensure that a large majority of research, development and innovation (R&D&I) aid should be granted without need for notification to the Commission. The newly revised R&D&I framework is also expected to improve clarity and establish greater legal certainty about the forms of support for investments in R&D&I which are compatible with EU State aid rules or lie outside the scope of the rules altogether. The Risk Finance Guidelines are better taking into account the needs of both innovative SMEs and Midcaps. Finally, the current Community Framework for State aid for R&D&I deals with compatibility of aid under Article 107(3)(b) of the Treaty, concerning aid to an important project of common European interest (IPCEI). In the revised guidelines and SAM rules, this guidance is expected to be elaborated and published in a new separate stand-alone Communication covering IPCEI.

Commitment 14 – Deliver the EU Patent

"The European Parliament and Council should take the necessary steps to adopt the proposals on the EU patent (at present European patent with unitary effect or unitary patent), its linguistic regime and the unified system of dispute settlement."

The 'Unitary patent package' was agreed between 2012 and 2013. It includes a Regulation creating a Unitary Patent (UP) and a Regulation establishing a translation regime applicable to the UP, as well as an international agreement among Member States setting up a single and specialised patent jurisdiction (the Unified Patent Court, UPC). The patent package implements enhanced cooperation between 25 Member States (all Member States except Italy, Spain and Croatia; the latter has expressed its willingness to join the enhanced cooperation).

The UP regulations entered into force on 20 January 2013. However, they will only apply from the date of entry into force of the UPC Agreement, which requires a minimum of 13 ratifications, including ratifications by France, Germany and the UK. So far the UPC agreement has been ratified by Austria and France. The first UP providing uniform protection within the territory of the participating 25 Member States is expected to be granted in the course of 2015. [33]

The patent with unitary effect is going to be optional for European patent holders wishing to protect their invention in the territory of 25 Member States in a one-stop-shop. Costs and administrative burden will be reduced since the UP will be granted centrally by the EPO with minimum translation requirements and no necessity to validate a granted patent on a national level.

The costs of a Unitary patent for 25 Member States, covering procedural fees, i.e. on-line filing, search, examination and grant of a patent, and translations are expected to be remarkably reduced, leading to an estimated 85% of cost savings for users of the unitary patent protection.[34] Nevertheless, the real costs of the Unitary patent depend on the implementation of the patent, the details of which are currently being defined by the Select Committee of the European Patents Office[35].

The Unified Patent Court is expected to start functioning in the course of 2015. It will be a single and specialised jurisdiction with competence for the future UP and the “classical” European patents avoiding unnecessary duplication of litigation cases before the national courts of several Member States. The savings from having access to a Unified Patent Court would be between 148 to €289 million[36] per year. Cases in the UPC will be heard by highly experienced legally and technically qualified judges sitting in multinational panels and applying common procedural rules. The result will be development of a coherent and consistent case-law, thereby increasing legal certainty and predictability.

Since 2013 machine translations of patent applications and granted patents are available online and free of charge from and into English, French and German for 21 EU official languages (Patent Translate).[37]

Technical implementation of the UP regulations is carried out by the Select Committee, established in March 2013 within the structure of European Patent Organisation (EPO) by the participating Member States. The Commission is an observer in this Committee. As a result of the work of the Select Committee, the Implementing rules for the UP will be finalised by June 2014, the discussion on the financial aspects of the UP as well as the discussion on the modalities of the compensation scheme for translation costs are ongoing.

In order for the UPC to become operational as soon as possible after the entry into force of the UPC Agreement, in February 2013 the signatory Member States created a Preparatory Committee in charge of the setting up of the UPC. The Commission is an observer in this Committee. The objective is to prepare the UPC to be fully operational in 2015.

Commitment 15 – Screen the regulatory framework in key areas

"Starting in 2011 EU and Member States should undertake a screening of the regulatory framework in key areas, starting with those linked to eco-innovation and to the European Innovation Partnerships. This will identify the rules that need to be improved or updated and/or new rules that need to be implemented in order to provide sufficient and continuous incentives to drive innovation. The Commission will provide guidance on how best to organise this screening exercise."

The regulatory environment is an important factor influencing the innovation activities of companies and the wider economic system within which they operate. Regulations can both foster or hamper innovation depending on how they are designed and implemented. For example, rules that are too prescriptive can in some cases not leave space for innovations but ambitious standards can work as an innovation driver.

In order to provide guidance on how best to organise the screening exercise, the Commission had the responsibility to develop a methodology that allows to assess the effect of the regulatory frameworks on innovation.. The aim is to identify the rules that need to be improved or updated and/or new rules that need to be implemented in order for regulation to foster innovation in those areas.

The methodology allows any policy maker who is interested in re-thinking regulatory set-ups to better foster innovation to analyse the innovation-regulation interaction through a six step approach. This methodology has been applied to the 'Water' and 'Raw Materials' European Innovation Partnerships (EIPs) (see commitment 29). This allowed to identify the innovation effects of concrete regulations, as well as to test the tool. It is now ready to be applied to areas where a need to address the impact of legislation on innovation has been identified.

The Water Framework Directive: stimulating innovation in Europe

The water framework directive (WFD, 2000) was found to have stimulated innovation directly and indirectly through quality requirements for water and stipulations on the use of best available technology. Infrastructure investments were necessary to varying degrees in the EU-15 and the, then, accession countries. Through the framework directive, the demand for water-related goods and services was induced. Being a stringent and reliable regulation, it signalled to European companies in the water sector a growing demand that was met through the diffusion of innovative goods and spurred the demand for innovative goods and services. The EU-internal demand for water goods was and still is mainly supplied by a growing European industry. Existing EU legislation, including several EU Directives are seen as important drivers as they provide ‘room’ for innovation by imposing stricter standards which require new technologies to meet them. Environmental regulations were found to be more influential in promoting technological innovation in the water sector than economic regulation.

Current waste legislation: more ambitious regulation is needed to foster innovation

Current legislation constitutes a barrier to innovation in terms of recycling and in view of fostering the use of secondary raw materials. Waste legislation basically aims to divert waste disposal away from landfill – with the effect that many countries have invested in incinerating technologies and infrastructures creating large capacities at relatively low cost for disposing of waste. This form is by far cheaper than recycling, which needs a thorough sorting and dismantling of complex goods prior to recovering useful materials. Recycling is also still too costly compared to buying new raw material. Since the price of the competing technology and raw material respectively are too cheap to pose a real driver towards recycling and the use of secondary raw materials, much more demanding regulation, possibly in a package with fiscal measures is needed to incentivise recycling, and to create demand and a new market for secondary raw materials.

The methodology and results were presented to the High-Level Group Meeting on Eco-innovation and will inform the activities under Action 1 'Environmental policy and regulation' of the Eco-innovation Action Plan (see commitment 18).

In the medium term it is expected that the EIPs Water and Raw Materials will use the results of the study to identify key innovation barriers in their respective fields of action. Based on this exercise, it will be possible to undertake concrete actions in order to ensure that legislation supports innovation.

In the long-term, a similar impact is expected in other sectors. The methodology has been developed with the objective of being flexible enough so that it can be used in any policy area. It is ready to be taken up to screen regulatory frameworks in other sectors and re-shape legislation to make it more innovation friendly.

Commitment 16 – Speed up and modernise standard-setting

"In early 2011, as a first step, the Commission will present a Communication accompanied by a legislative proposal on standardisation, which will inter alia cover the ICT sector, in order to speed up and modernise standard-setting to enable interoperability and foster innovation in fast-moving global markets. This will be combined with a multi-annual programme to anticipate new standardisation needs and integration of standards into R&D projects in the research Framework Programme. The Communication will also examine options for ensuring in a longer term perspective that the standardisation system is able to adapt to the quickly evolving environment and to contribute to Europe’s strategic internal and external objectives (relating, among others, to innovation and technological development), including through the launch of an independent review."

A Communication setting out a strategic vision for European standards was published in 2011 and a Regulation implementing its legislative measures followed in 2012. Together they set the basis for a European standardisation system that is fit to foster innovation.

In this package, the Commission requires faste