EN   EN 
 
 
 EUROPEAN  
COMMISSION   
Brussels, 1.8.2019  
SWD(2019) 330 final/2  
 
CORRIGENDUM  
This document corrects SWD(2019) 330  final of 11.7.2019.  
This version corrects the omission of the annexes to the Impact Assessment.  
The text shall read as follows:  
COMMISSION STAFF WORKING DOCUMENT  
 
IMPACT ASSESSMENT  
 
Accompanying the document  
Proposal for a Regulation of the European Parliament and of the Council  
on the European Institute of Innovation and Technology (recast)  
 
and 
Proposal for a Decision of the European Parliament and of the Council  
on the Strategic Innovation Agenda of the European Institute of Innovation and 
Technology (EIT) 2021 -2027: Boosting the Innovation Talent and Capacity of Europe  
  
 
{COM(2019)  330 final} - {COM(2019)  331 final}  - {SEC(2019)  275 final}  -
 {SWD(2019)  331 final}   
 
1 TABLE OF CONTENTS  
1. INTRODUCTION : POLICY AND LEGAL CON TEXT  ................................ ................  5 
1.1. Scope of the impact assessment  ................................ ................................ .........  5 
1.2. Legal and operational context of the EIT and the KICs  ................................ .. 5 
1.3. The EIT as part of the Horizon Europe Programme  ................................ ....... 8 
1.4. What decisions on the future of the EIT have alre ady been taken in the 
Horizon Europe proposal and what are their implications? ............................  9 
1.5. The need to act  ................................ ................................ ................................ . 10 
1.5.1.  The need to amend the EIT Regulation  ................................ ......................  10 
1.5.2.  The need for a new Strategic Innovation Agenda of the EIT  ....................  10 
1.5.3.  Lessons learned  ................................ ................................ ...........................  11 
2. PROBLEM DEFINITION  ................................ ................................ ......................  13 
2.1. Suboptimal funding model  ................................ ................................ ..............  13 
2.2. Limited impact of EIT’s education activities  ................................ ..................  15 
2.3. Limited impact of EIT’s regional outreach  ................................ ....................  17 
2.4. Technical issues  ................................ ................................ ...............................  18 
2.5. Summary  of problems and technical issues to be addressed:  ........................  21 
3. WHY SHOULD THE EU AC T? ................................ ................................ ..............  22 
3.1. Legal basis  ................................ ................................ ................................ ........  22 
3.2. Subsidiarit y and proportionality: need for, and added value of EU action  .. 22 
4. OBJECTIVES : WHAT IS TO BE ACHIEV ED? ................................ ........................  23 
5. HOW OPTIONS ADDRESS P ROBLEMS AND TECHNICA L ISSUES  .........................  24 
5.1. Discussion of technical issues  ................................ ................................ .........  24 
5.2. Discussion of priority fields  ................................ ................................ .............  26 
5.3. Discussion of funding model  ................................ ................................ ...........  28 
5.3.1.  Continuation of current funding model (discarded)  ................................ .. 29 
5.3.2.  Introduction of a 50/50 co -funding rate (discarded)  ................................ .. 29 
5.3.3.  Introduction of a gradually decreasing EIT co -funding rate (retained)  ... 30 
5.4. Description of policy  options  ................................ ................................ ...........  34 
5.4.1.  Option 1: Baseline  ................................ ................................ .......................  34 
5.4.2.  Option 2  ................................ ................................ ................................ ........  35 
5.4.3.  Option 3  ................................ ................................ ................................ ........  38 
5.4.4.  Inputs of options  ................................ ................................ ..........................  40 
5.4.5.  Key features of options  ................................ ................................ ................  40 
6. IMPACT OF POLICY OPTI ONS ................................ ................................ ............  41 
6.1. Option 1: Baseline  ................................ ................................ ...........................  41 
6.2. Option 2  ................................ ................................ ................................ ............  43 
6.3. Option 3  ................................ ................................ ................................ ............  46 
6.4. Outputs of opti ons ................................ ................................ ............................  50 
7. HOW DO THE OPTIONS CO MPARE ? ................................ ................................ .. 51 
7.1. Risks associated with policy options  ................................ ...............................  53 
8. PREFERRED OPTION  ................................ ................................ .........................  55 
8.1. Implications of the preferred Option for the EIT Regulation and the SIA  ... 56 
9. HOW WILL IMPACT BE MO NITORED AND EVALUATE D? ................................ .. 57 
10. ANNEXES  ................................ ................................ ................................ ..........  61 
10.1.  Annex 1: Procedural information  ................................ ................................ ... 61 
 
2 10.2.  Annex 2a: Stakeholder consultation activities  ................................ ...............  67 
10.3.  Annex 2b: Public consultation - Synopsis Report  ................................ ..........  72 
10.4.  Annex 3: Who is affected and how?  ................................ ...............................  99 
10.5.  Annex 4A: Key achievements of the EIT  ................................ ......................  102 
10.6.  Annex 4B: key achievements and challenges as outlined in the EIT interim 
evaluation : ................................ ................................ ................................ ..... 103 
10.7.  Annex 5: Discarded policy options regarding the EIT under Horizon Europe
 ................................ ................................ ................................ ........................  107 
10.8.  Annex 6: Selection criteria for establishing KICs  ................................ ........  108 
10.9.  Annex 7: Social netw ork analysis of KICs’ partnerships  ............................  111 
10.10.  Annex 8:  Impact Indicator Framework  ................................ .......................  118 
10.11.  Annex 9: Analysis of possible themes for future KICs  ................................  132 
10.12.  Annex 10: Model -based Analysis on co -funding model for KICs  ...............  159 
10.13.  Annex 11: Overview of KIC c o-funding rates in 2014 -2017  .......................  185 
  
 
3 Glossary  
Term or acronym  Meaning or definition  
CLC  Co-Location Centre, a  geographical hub for the 
practical integration of the  knowledge triangle  
DG EAC  Directorate -General Education, Youth, Sport and 
Culture, a Directorate General of the European 
Commission  
DG GROW  Directorate -General Internal Market, Industry, 
Entrepreneurship and SMEs  
DG RTD  Directorate -General Research and  Innovation  
ECA  European Court of Auditors  
EFSI  European Fund for Strategic Investments  
EIC European Innovation Council  
RIS EIT Regional Innovation Scheme  
EIT European Institute of Innovation and Technology  
ERASMUS+  The EU programme supporting education, training, 
youth and sport in Europe during the 2014 -2020 
period  
ERDF  European Regional Development Fund  
ESIF  European Structural and Investment Fund  
EU European Union  
ExCo  Executive Committee of the EIT Governing Board  
GB Governing Board of  the EIT  
Horizon 2020  Horizon 2020 – the EU’s framework programme for 
research and innovation 2014 -2020  
HEI Higher Education Institution  
  
 
4 HEInnovate  Joint initiative of the European Commission and the 
OECD supporting HEIs wishing to increase their 
innovative and entrepreneurial potential  
HLG  High Level Group  
JRC Joint Research Centre, a Directorate General of the 
European Commission  
KAVA  KIC Added Value Activities  
KCA  KIC Complementary Activities  
KIC Knowledge and Innovation Community  
KPI Key Performance Indicator  
KTI Knowledge Triangle Integration - close, effective 
links between education, research, and innovation  
MFF  Multiannual Financial Framework  
OECD  Organisation for Economic Co -operation and 
Development  
OPC  Open Public Consultation  
R&I Research and Innovation  
R&D  Research and Development  
SIA Strategic Innovation Agenda  
SME  Small and Medium -sized Enterprise  
SPD Single Programming  Document  
SWD  Staff Working Document  
TFEU  Treaty on the Functioning of the European Union  
TRL  Technology Readiness Level - a method of estimating 
the maturity of technology  
 
 
  
 
5 1. INTRODUCTION : POLICY AND LEGAL CON TEXT  
 
1.1. Scope of the impact assessment  
 
This impact assessment accompanies the Commission proposals for an amendment of the 
European Institute of Innovation and Technology (EIT) Regulation1 through a recast2 and 
for a new Strategic Innovation Agenda (SIA) for the EIT for the period 2021 -2027. These 
initiatives aim to align the EIT legislative framework with the Commission proposal 
establishing the Horizon Europe Programme3, the next Union framework programme 
supporting research and innovation, to define the new priority fields of the EIT  as we ll 
as its financial needs, and to improve the functioning of the EIT taking into account the 
lessons learned from the past years.   
 
The Impact Assessment accompanying the proposal for Horizon Europe4 provided a 
clear, evidence -based blueprint for how the programme will help to consolidate European 
leadership in research and innovation to deliver scientific, economic and societal impact. 
It described the key objectives and rationale of the programme including a stronger focus 
on the added value of its parts .  
 
The Horizon Europe proposal confirmed the importance and contribution of the EIT and 
its Knowledge and Innovation Communities (KICs) in delivering the EU's strategic 
priorities in the area of innovation. It proposes the EIT budget for 2021 -2027, its scope, 
added -value and main areas of activity, while pointing to a revised role of the EIT in 
order to reinforce its contribution to Horizon Europe’s objectives.  However, t he Horizon 
Europe proposal itself does not provide the legal basis for continuing EI T operations 
beyond 2020, which would continue to be laid down in the EIT Regulation.      
 
This impact assessment does not cover the decisions already taken concerning the EIT in 
the Horizon Europe proposal (see section 1.3 and 1.4), since these were asses sed as part 
of the Horizon Europe impact assessment. Instead, this impact assessment focusses on 
key problems and issues that have been identified as hampering the effectiveness of the 
EIT based on lessons learned from the EIT interim evaluation and other key sources of 
evidence.  
1.2. Legal and operational context of the EIT and the KICs  
 
The European Institute of Innovation and Technology  
 
The EIT’s overall mission is to boost sustainable European economic growth and 
competitiveness by reinforcing the innovation capacity of the Member States and the 
Union. Set up in 2008, and part of Horizon 2020 since 2014, the EIT seeks to integrate 
the knowledge triangle of higher education, research and innovation, reinforce the 
Union's innovation capacity, and addr ess societal challenges. The EIT achieves these 
goals primarily through its Knowledge and Innovation Communities (KICs): large -scale 
European partnerships (with ~50 -400 partners) focussing on global societal challenges. 
                                                           
1 Regulation (EC) No 294/2008 of the European Parliament and of the Council of 11 March 2008 establishing the European Institut e 
of Innovation and Technology (OJ L 97, 9.4.2008, p. 1). Amended by Regulation (EU) No 1292/2013 of the European Parliament an d 
of the Council of 11 December 2013 (OJ L 347, 11.12.2013, p. 174).  
2 Interinstitutional Agreement of 28 November 2001 on a more structured use of the recasting technique for legal acts. OJ C 77,  
28.3.2002, p. 1.  
3 Proposal for a Regulation of the European Parliament and of the Council establishing Horizon Europe – the Framework Programme 
for Research and Innovation, laying down its rules for participation and dissemination. COM (2018 ) 435 final.  
4 SWD(2018) 307 fin al. 
 
6 The EIT provides grants to the KICs,  monitors their activities, supports cross -KIC 
collaboration and disseminates results and good practice. The EIT's Governing Board is 
responsible for the strategic orientation of the EIT and of the KICs and takes the 
decisions on the designation of the KIC s and their funding.  
 
The Horizon Europe Impact Assessment highlighted the role of the EIT in addressing 
specific structural weaknesses in the EU’s innovation capacity which are common to EU 
Member States. They include: the under -utilisation of existing re search strengths to 
create economic or social value; the lack of research results brought to the market; low 
levels of entrepreneurial activity and mind -set; low leverage of private investment in 
research and development; and an excessive number of barrier s to collaboration within 
the knowledge triangle of higher education, research, business and entrepreneurship on a 
European level. The EIT addresses these challenges through the KICs.  
 
The EIT's objectives, rationale, EU added value, budget, broad lines of  activity and 
performance indicators are currently defined in the Horizon 2020 Regulation5. The EIT 
Regulation sets out, in parallel, the mission and tasks for the EIT along with the 
framework for its functioning. The strategic, long -term priority fields a nd financial needs 
of the EIT for each seven -year period are laid down in the Strategic Innovation Agenda 
(SIA) of the EIT6. The SIA includes the detailed operating modalities of the EIT such as 
the selection and designation of the KICs and their performan ce monitoring, based on the 
framework set out in the EIT Regulation. The graph below illustrates the key aspects of 
the current regulatory environment.  
 
 
Figure 1: Current regulatory context of EIT, own illustration  
 
 
  
                                                           
5 Regulation (EU) No  1291/2013 of the European Parliament and of the Council of 11  December 2013 establishing Horizon 2020 - 
the Framework Programme for Research and Innovation (2014 -2020). OJ L 347, 20.12.2013, p. 104.  
6 Decision No 1312/2013/EU of th e European Parliament and of the Council of 11 December 2013 on the Strategic Innovation 
Agenda of the European Institute of Innovation and Technology (EIT): the contribution of the EIT to a more innovative Europe.  OJ L 
347, 20.12.2013, p. 892.  Horizon 2020  •General and specific objectives of the EIT  
•Broad lines of activity  
•Budget  
•Performance indicators  
EIT 
Regulation  •Mission and tasks of the EIT  
•Framework for its functioning  
SIA •Strategic direction  
•Activities and implementing provisions  
•Priority fields of the EIT  
•Financial needs  
 
7 Knowledge and Innovation Communities  
 
The KICs are autonomous partnerships of businesses, research institutes and higher 
education institutions (HEIs). The KICs are set up as legal entities under respective 
Member States’ laws, appoint a Chief Executive O fficer to run their operations and have 
their own governance systems. The relations between the EIT and KICs are laid down in 
contractual agreements, which set out their respective rights and obligations, ensure an 
adequate level of coordination and outlin e the mechanism for monitoring and evaluating 
KIC activities and outcomes. The KICs report on their activities on a yearly basis to the 
EIT. Specifically, the KICs submit their annual Business Plans to the EIT as the basis for 
the award of the EIT grant.  
 
Since 2010, eight KICs have been set up or designated to address specific societal 
challenges. According to the EIT Regulation (Article 7b) and the financial sustainability 
principles adopted by the EIT Governing Board7, the duration of EIT grant for each KIC 
is expected to last a maximum of 15 years after which the KIC should be able to pursue 
its activities without EIT funding. The areas of intervention of the current KICs are 
indicated below, together with their missions.  
 
 
Figure 2: Overview of curren t KICs, their missions and number of partners; own illustration  
 
  
                                                           
7https://ei t.europa.eu/sites/default/files/EIT%20GB%20Decision%20on%20principles%20on%20KIC%20Financial%20Substainabili
ty.pdf  

 
8 Each KIC aims at reinforcing innovation capacities by running a balanced portfolio of 
activities in three areas:  
1. Innovation support projects : aimed at supporting and developing new 
innovative products, services and solutions that address societal challenges in the 
KICs areas of activity. They may include the support to demonstrators, pilots or 
proofs of concept.   
2. Education : these include inno vative educational and training programmes 
offered by each KIC in the form of post -graduate (MSc/PhD) programmes, 
executive/ professional development courses, lifelong learning modules, summer 
schools, etc. The EIT Label ensures quality of the KIC educatio n programmes 
and recognition within and beyond the EIT Community.   
3. Business creation and support activities : these include start -up and accelerator 
schemes to help entrepreneurs and potential entrepreneurs translate their ideas 
into successful business. T he focus is primarily on access to market, access to 
finance, and access to networks, mentoring & coaching.   
 
KICs also engage in a range of outreach, communication, dissemination and horizontal 
cross -sectoral activities. Since 2014, the EIT has developed  the EIT Regional Innovation 
Scheme (RIS) as part of its outreach strategy in regions in Europe that are modest or 
moderate innovators according to the European Innovation Scoreboard8.  
 
1.3. The EIT as part of the Horizon Europe Programme  
 
The Horizon Europe impact assessment emphasises that the EIT should be more strongly 
integrated within Horizon Europe than is currently the case in Horizon 2020 and greater 
synergies with other components of the programme should be created. Within the 
Commission’s proposal f or Horizon Europe the EIT activities thus become part of the 
Pillar III “Open Innovation”, which focuses primarily on supporting breakthrough and 
market -creating innovation. The EIT and the KICs are also expected to play a key role in 
addressing global cha llenges and European industrial competitiveness - and achieving the 
objectives of future R&I missions - (Pillar II “Global Challenges and Industrial 
Competitiveness”) while also contributing to excellent science  (Pillar I).9  
 
A novelty of the Horizon Eur ope proposal is the introduction of multiannual Strategic 
Planning10 for ensuring the implementation of the programme -level objectives  in an 
integrated manner based on wide consultations about priorities and the suitable types of 
action and forms of implem entation, in particular European research and innovation 
partnerships . These European  Partnerships are initiatives where the Union, together with 
private and/or public partners (such as industry, public bodies or foundations) commit to 
support jointly the development and implementation of a programme of research and 
innovation activities. Horizon Europe promotes a more strategic, ambitious and impact -
oriented approach to these partnerships, ensuring that they can effectively contribute to 
the Union’s polici es and priorities11.  
                                                           
8 http://ec.europa.eu/growth/industry/innovation/facts -figures/scoreboards_en  
9 e.g. it is expected that the EIT will contribute to the clima te-related expenditure target which should exceed 35 % of the overall 
Horizon 2020 budget  
10 Annex I, COM(2018) 436 final, pp. 1 -2. 
11 European Partnerships will be designed on the basis of key principles of Union added value, transparency, openness, impact,  
leverage effect, long -term commitment of involved parties, flexibility, coherence and complementarity with Union, national and 
international initiatives.  The criteria for the selection, implementation, monitoring, evaluation and phasing out of Union funding for 
European partnerships are set out in Annex III of the proposed Regulation for Horizon Europe.  
 
9 Under the Horizon Europe proposal, the EIT KICs are considered as institutionalised 
European Partnerships. The alignment with the Horizon Europe framework will be 
supported  through the multiannual Strategic Planning, which will in par ticular 
incorporate  inter-disciplinary and cross -sectoral perspectives and  ensure  that all activities 
under Horizon Europe are coordinated in an effective manner . In particular, the Horizon 
Europe proposal emphasises that “proposals for future EIT KICs in compliance with the 
EIT Regulation will be indicated in the EIT Strategic Innovation Agenda (SIA) and will 
take into account the outcome of the Strategic Planning process and the priorities of the 
Global Challenges and Industrial Competitiveness pillar”12. 
 
To deliver on Horizon Europe objectives close cooperation with, in particular the 
European Innovation Council (EIC), will also be important to ensure synergies and 
impact. The EIT and the EIC are complementary.  The EIC will identify, develop and 
deploy breakthrough innovations, and support the rapid scale -up of innovative firms 
carrying out market -creating innovations at the European and international levels. On the 
other hand, the EIT will develop innovation ca pacity through knowledge triangle 
integration and support to innovation ecosystems. It will contribute to Horizon Europe 
with its distinctive focus on human capital, entrepreneurial education and support to 
business creation and development in specific the matic areas.  
 
 
1.4. What decisions on the future of the EIT have already been taken in the 
Horizon Europe proposal and what are their implications?  
 
A number of policy choices relating to the future of the EIT have already been made by 
the Commission through the adoption of the Horizon Europe proposal. Specifically, the 
Horizon Europe proposal sets out the budget for the EIT (EUR 3 billion for the period 
2021 -2027 13), its rationale, the areas of intervention which are the basis of EIT’s general 
objectives, and its broad lines of activity 14. In particular, the general objectives of the 
EIT are reflected in its areas of intervention defined by the Horizon Europe proposal:  
 
(1) Strengthening sustainable innovation ecosystems across Europe;  
(2) Fostering the development of entrepreneurial and innovation skills in a lifelong 
learning perspective and support the entrepreneurial transformation of EU 
universities;  
(3) Bring new solutions to global societal challenges to the market;  
 
The Horizon Europe proposal als o defines the criteria for selection, implementation, 
monitoring, evaluation and phasing -out of European Partnerships (including EIT KICs). 
It sets out the programme’s rules for participation and dissemination, as well as 
monitoring and evaluation requirem ents, which will apply to the EIT, in addition to 
relevant provisions of  the EIT Regulation 15. 
 
The Horizon Europe programme, however, does not specify the concrete actions nor the 
means and instruments to achieve the EIT’s objectives. In addition, it doe s not specify 
the expected results and resources that are needed to implement the EIT key actions to 
                                                           
12 Explanatory memorandum, COM(2018) 435 final, p. 15.  
13 Article 9, COM(2018) 435 final, p. 32.  
14 Annex I, COM(2018) 435 final, p. 3 and Annex I, COM(2018)436 final, pp. 70 -72. 
15 In particular, with regard to entities eligible for participation, entities eligible for funding, award criteria, funding rat es,  indirect 
costs, eligible costs.  
 
10 deliver on Horizon Europe objectives and expected scientific, economic and societal 
impacts.  
 
Indeed, the Horizon Europe proposal and its impact assessmen t recognise the role of the 
EIT Regulation in setting out the scope of the EIT’s functioning and in governing the 
selection and priority -setting process of the KICs taking into account the outcome of the 
Strategic Planning process and Horizon Europe criter ia for partnerships. They also 
recognise the role of the Strategic Innovation Agenda in setting the priority fields of the 
EIT and KICs for the 7 -year programming period.  
 
 
1.5. The need to act  
 
1.5.1.  The need to amend the EIT Regulation  
 
The EIT Regulation,  adopted in 2008, establishes the EIT. It sets out the mission and 
tasks of the EIT and the framework for its functioning. The Regulation was amended in 
2013 in order, inter alia , to align it with Horizon 2020.16  
 
The EIT Regulation is not in principle time  bound, contrary to the SIA. However, given 
that a number of provisions in the EIT Regulation make a direct reference to the current 
Horizon 2020 programme established for the period 2014 -2020, these provisions need to 
be amended, to make them compatible w ith the next Union framework programmes 
supporting research and innovation.   
 
 
1.5.2.  The need for a new Strategic Innovation Agenda of the EIT  
 
In line with Article 17 of the EIT Regulation a new Strategic Innovation Agenda  (SIA) 
is to be adopted for each 7 -year programming period (MFF).  
 
The SIA lays down the strategic, long -term priority fields and financial needs for the EIT 
for the period covered by the MFF. It also includes an overview of the planned higher 
education, r esearch and innovation activities and the respective budget breakdown. T he 
current SIA is limited in time and covers only the period 2014 -2020.  
 
The new SIA will put forward the strategic orientations, financial needs and sources of 
funding of the EIT for  the next MFF. Furthermore, the SIA will define the priority fields 
and time schedule for the selection and designation of KICs for the next programming 
period. It will include an overview of the planned higher education, research and 
innovation activities  and the budget breakdown over the period. The SIA is also a 
legislative tool to align the priority setting of the EIT with the Horizon Europe strategic 
programming.  
 
  
                                                           
16 Regulation  (EC) No 294/2008 of the European Parliament and of the Council of 11 March 2008 establishing the European Institute 
of Innovation and Technology (OJ L 97, 9.4.2008, p. 1). Amended by Regulation (EU) No 1292/2013 of the European Parliament an d 
of the Counc il of 11 December 2013 (OJ L 347, 11.12.2013, p. 174).  
 
11 Timing and coherence of the Strategic Innovation Agenda and Strategic Planning 
Process  
 
The new Strategic Innovation Agenda of the EIT for the period 2021 -2027 needs to be in 
place before 1 January 202117. The SIA will be adopted by the European Parliament and 
the Council, in accordance with the ordinary legislative procedure. 18 
 
While the sc ope of the Strategic Planning process under Horizon Europe, its legal form 
and overall timing are to be decided by the co -legislators, the preparatory process 
supporting the strategic planning has already started. The Commission is discussing 
currently pos sible partnerships in order to ensure the highest coherence and 
complementarity at service, cabinet and political level in the form of the Project Team 
Meeting on Competitiveness and Innovation .  In this context, it clearly emerged that the 
best option wou ld be to include initially one priority area/KIC theme in the new SIA 
proposal for the programming period 2021 -2027. Other priority areas/theme(s) for future 
KIC(s) within the said period would be proposed subsequently by the Commission taking 
into account  the outcome of the multiannual Strategic Planning process, new emerging 
priorities, and any other relevant developments. The SIA will outline the selection of the 
KICs taking into account the Strategic Planning process and the criteria for partnerships 
in line with Horizon Europe. The total number of future KICs for the programming 
period will depend on the adopted EIT budget.  
 
This approach would be in line with the EIT Regulation and would avoid any delay in the 
preparation and launching the call of the first new KIC in 2021. This would enable the 
EIT to continue developing innovative solutions addressing societal challenges through 
new KICs and contributing to the attainment of the objectives of Horizon Europe through 
a new KIC starting from 2021.  
 
The proposed approach for the adoption of the SIA would therefore ensure (i) the 
continued functioning of the EIT as from 1st January 2021, (ii) avoidance of unnecessary 
delay of the launch of any new KIC and (iii) addressing the need for the planning of new 
KICs to take account of the strategic planning process under Horizon Europe.  
 
 
1.5.3.  Lessons learned  
 
Given that the EIT Regulation needs to be revised to align it with the applicable Union 
framework programme supporting research and innovation  and that a new SIA needs to 
be proposed, it is appropriate to consider what other changes would be needed in order to 
improve the functioning of the EIT and enable it to fulfil its mission and objectives. 
These considerations should take account of a numb er of evaluations, audits reviews and 
reports on the EIT that have been carried out over the past few years.  
 
The following sections describe the key issues and technical problems that have been 
identified in these reports and assess the options for addre ssing these issues through the 
amendment of the EIT Regulation and the proposal for a new SIA.  
 
  
                                                           
17 According to Art. 1 of the current SIA, it will expire at the end of 2020.  
18 Based on Art. 17(4) of the EIT Regulation, which provides that acting on a proposal from the Commission, the European 
Parliament and the Council shall adopt the SIA in accordance with Art. 173(3) of the TFEU.  
 
12 The table below indicates the most important sources of evidence for this impact 
assessment.    
 
Lessons learned  
 The Court of Auditors report of 201619 acknowledged the raison -d'être  of the EIT 
but recommended a number of changes to the implementation model such as a revision  
of its funding model and changes to the EIT staff provisions in order to increase the 
overall effectiveness and achieve the expected impact of the EIT.  
 The EIT interim evaluation of 2017  and the related Commission Staff Working 
Document20 concluded that the EIT model remains valid. They highlighted the need for 
the EIT to improve in a number of operational areas and develop further synergies with 
other EU initiatives.   
 The High Level Group on the EIT  of 201721 identified a clear need to strengthen 
the role of the EIT as a provider of shared services and expertise to the KICs. It 
recognised the distinctive role education plays in knowledge triangle integration and 
called for the EIT to strengthen it.  
Table 1: Key sources of evidence on EIT; own illustration  
  
                                                           
19 European Court of Auditors (2016), Special Report on performance of the EIT (subsequently mentioned as ECA (2016), Special 
Report)  
20 C. Wilkinson and al./ICF (2017),  Evaluation of the European Institute of Innovation and Technology (EIT) (subsequently 
mentioned as ICF (2017), Evaluation), and European Commission, Staff Working Document on the Interim Evaluation of the EIT, 
SWD (2017) 351 final  (subsequently mentioned as SWD (2017) 351 final) .  
21 The High Level Group was established by Commissioner Tibor Navracsics in 2016 to review the EIT’s workings and make 
recommendations that can help guide the European Commission and the EIT Governing Board.  High Level Group on t he EIT (2016), 
The Future of the European Institute of Innovation and Technology (EIT). Strategic Issues and Perspectives (subsequently ment ioned 
as High Level Group (2016), Future of the EIT).  

 
13 2. PROBLEM DEFINITION  
This chapter presents the main problems and further technical issues driving EIT 
intervention within the Horizon Europe framework. It presents only those problems and 
technical issues that need to be addressed in the next programming period (2021 -2027) 
through legislative changes and decisions. These adjustments will increase the EIT’s 
efficiency, effectiveness and overall internal and external coherence, in combination with 
operational and managerial measures. The problems and issues identified below stem 
primarily from the EIT evaluation, the Court of Auditors report, and the High -Level 
Group report, and include references to the findings of those documents.  
 
2.1. Suboptimal funding model  
 
The EIT provides annual grants to KICs for a maximum of 15 years. The KICs 
implement their knowledge triangle integration activities based on annual Business Plans 
which are implemented by the KIC partners. The KIC activities are divided into two 
categories:  
 
a) activities funded up to 100 % by the EIT; and  
b) complementary activities which are not funded by the EIT.  
 
The distinction between these two types of activities determines the ceiling of the EIT’s 
contribution. According to the EIT Regulation, EIT funding may only cover a maximum 
of 25 % of a KIC’s overall costs (i.e . the sum of the costs of EIT -funded activities and 
non-EIT-funded activities - this complex model is set out in the Figure 3 below).  
 
 
 
Figure 3: EIT funding model, European Court of Auditors illustration  

 
14  
According to the Court of Auditors 2016 report,  the inclusion of “complementary 
activities” in the funding model is suboptimal given that both their definition and their 
interpretation are rather general and vague.22 This creates problems in applying the 
eligibility rules among partners and KICs. The cr iteria for the designation of 
complementary activities, i.e. their links to key activities and their proportionality, are 
unclear, and thus, of little added value.23  
 
As the Court of Auditors observed, “the measuring and reporting of KIC complementary 
activities are not essential to the achievements of the EIT’s objectives” as many 
complementary activities are not additional in practical terms,24 i.e. they are not directly 
triggered by the EIT intervention, already exist or will happen anyway.  Therefore, th e 
intended EIT financial leverage effect, i.e. ensuring that a substantial part of the overall 
KIC budget comes from non -EIT funding (such as membership fees, national or regional 
funding), is not applied in practice.25 In addition, the current funding moda lities create a 
disproportionate administrative burden in terms of financial reporting for the KICs. The 
Court of Auditors implied in its report clearly the need to focus on EIT -funded activities 
and concluded that the EIT funding model was not effective a nd requested its change in 
order to improve it.26  
 
An additional important aspect of the EIT funding model is the financial sustainability 
objective: KICs should gradually reduce their dependency from EIT funding for their 
further consolidation and further  expansion. In accordance with the EIT Regulation the 
EIT grants provided to KICs should normally cease after a maximum of 15 years. In 
order to support this objective, the EIT has adopted principles27 obliging each KIC to 
develop and implement a financial sustainability strategy and submit an annual progress 
report. However, the current funding model does not provide any specific incentives to 
KICs to gradually increase their levels of private funding. As a result, progress towards 
financial sustainability remains uneven amongst KICs (see Figure 4).  
 
                                                           
22 ECA (2016), Special Report, pp. 15 -20.  
23 An example used a lso by the European Court of Auditors is that KIC partners have reported as a  KIC complementary activity the 
cost of non -EIT students attending courses in which EIT students also participate. However, these costs are not additional as the 
courses were part  of the standard educational programme of the university.  
24 Ibid., p. 24  
25 The overall level of co -funding of KAVA activities by KICs was 23% in 2016 and 20% in 2017.   
26 Ibid., pp. 15 -20.  
27 Decision 4/2015 of the Governing Board on Principles of KICs fi nancial sustainability.  
 
15  
 
Figure 4: Co -funding attracted by KICs, 2017; own chart based on EIT data  
 
An additional challenge of the current funding model is the annual nature of the planning 
and preparation cycle of the KIC Business Plans.28 As the Court of Auditors observed, 
the current annual grant process is at odds with the need to reflect the longer -term 
perspective of innovation activities.29 The annual grant process is also a  major obstacle to 
planning and coordinating multiannua l innovation projects. This limits the potential of 
the KICs and leads to a suboptimal selection of innovation activities, low engagement of 
some KIC partners and limited networking and interaction.30   
 
Questions related to the EIT funding were also part o f an Open Public Consultation 
(OPC) which was launched in the context of the impact assessment. The majority of 
respondents31 supported the notion that KICs need a robust financial sustainability 
strategy from the outset (64% of respondents) and that securi ng other public funding for 
the operations of KICs is necessary (60% of respondents). Furthermore, securing funding 
from other sources, including those from private actors was the most popular solution 
cited by respondents in an open -ended question regardi ng financial sustainability.  
 
 
2.2. Limited impact of EIT’s education activities  
 
Since its set -up, the EIT has supported innovative education and training programmes by 
linking education, research and business; learning -by-doing curricula; entrepreneurship 
education; and international and cross -sectorial mobility. EIT students have strong 
entrepreneurial competences and high employability rates, suggesting that their skills and 
education are both recognised and useful.32 In the last four years, 43 ventures an d persons 
                                                           
28 The KICs’ Business Plan contains the detailed description of the activities that the KIC and its partners will run in the cou rse of the 
year and forms the basis on which the grant allocations are decided by the EIT Governing Boar d; (see details in Annex 5).  
29 ECA (2016), Special Report, pp. 26 -30.  
30 Based on the network analysis of partnering within KICs in the Study to support the Impact Assessment (SQW, November 2018), 
Annex 7.  
31 See Annex 2B  
32 There were close to entrepreneurial 1200 EIT Label graduates as of 2017, in addition to EIT students engaged in other 
programmes. See EIT (2017), Our Impact, from 2010 to 2016, pp. 33 -34 (eit.europa.eu/interact/bookshelf/eit -our-impact -2010 -2016 ), 
and SWD (2017) 351 final, p.28.    0,05,010,015,020,025,030,035,040,0
2014 2015 2016 2017Development of co -funding rate   
(% of KICs contribution)  
Climate KIC Innoenergy Digital Health
Raw Materials Food AVERAGE
 
16 from the EIT Community have been featured in Forbes Europe 30 under 30 lists.33 As 
highlighted by the EIT evaluation34, there are benefits to EIT -supported education 
activities resulting from: knowledge triangle integration and the integration of r esearch 
results and innovative practices into the education offer; involvement of industry in the 
design and delivery of the programmes; and access to accelerator programmes.  
 
However, the EIT evaluation and the High Level Group report to the Commissioner  also 
highlighted that the impact of the education activities of the EIT remains limited. The 
evaluation referred to the low awareness of the EIT education brand35. The EIT labelled 
programmes do not appear to have sufficient traction to create market deman d. 
Moreover, the evaluation found that links “between education and innovation -support 
activities [are underexploited], and will require further efforts in the coming future.”36  
More generally, in terms of overall impact, the Commission concluded in its St aff 
Working Document on the EIT evaluation that “stronger impact is expected from [EIT] 
education activities”.37 
 
A recent report38 of the Joint Research Centre argues that "together with research centres, 
HEIs are co -innovators of 70% of the innovations der ived from H2020 projects. 
However, further changes in strategic orientation and university governance are required 
for universities to realise their potential contribution as enablers of innovation. 
Excellence in research, high -quality education, entrepren eurship and contributions to 
innovation all need to be strengthened, while at the same time ensuring synergies 
between them.”39  
 
The Horizon Europe proposal has outlined a stronger role for the EIT in education. This 
relates to the need for stronger entrep reneurial and innovation capabilities and skills in 
HEIs.40 Against this backdrop, the Horizon Europe impact assessment called for “an 
enhanced role for the EIT in embedding innovation and entrepreneurial capabilities, 
prospective skills identification and talent development in HEIs”.41  
 
The challenge to increase the innovation capacity of HEIs is set to grow as they become 
more integrated in local, national and global innovation chains.42 In this context, the 
proposal for the Specific Programme under Horizon  Europe  identifies “ entrepreneurial 
and innovation skills in a lifelong learning perspective and the entrepreneurial 
transformation of EU universities ”43 as one of the intervention areas for the EIT.  
 
The stakeholders responding to the Open Public Consulta tion called for a stronger role of 
the EIT in education. A total of 65% of all OPC respondents44 agree or strongly agree 
that training opportunities to become more entrepreneurial and innovation minded are 
insufficient in Europe. The most popular suggestions from the respondents for achieving 
                                                           
33 See EIT (2017), Our Impact, p. 37 and EIT Press release: EIT entrepreneurs in the spotlight in Forbes 30 under 30 
(eit.europa.eu/newsroom/eit -community -entrepreneurs -spotlight -forbes -30-under -30).  
34 SWD (2017) 351 final, , pp. 40 -44.  
35 SWD (2017) 351 final , p.31.    
36 Ibid., p.28.   
37 Ibid., p.44.   
38 C. Benedetti Fasil et al. (2017 ), Current challenges in fostering the European innovation ecosystem, EUR 28796 EN, Publications 
Office of the European Union, Luxembourg, 2017, ISBN 978 -92-79-73862 -3, doi:10.2760/768124, JRC108368.  
39 Ibid., p. 10.  
40 See OECD (2009), Universities, innovation and entrepreneurship: criteria and examples of good practices. 
(http://www.oecd.org/cfe/leed/43201452.pdf ) as well as OECD country reviews on https://heinnovate.eu    
41 SWD (2018) 307 final,  p. 256  
42 See Renewed EU Agenda for Higher Education (COM(2017) 247) and the ones set in the Renewed EU Agenda for Research and 
Innovation (COM(2018)  306) as well as  High Level Group on maximizing the impact of EU Research & Innovation Programmes 
(2017) LAB – FAB – APP. Investing the European future we want, p.13.  
43 COM(2018) 436 final, p. 71  
44 Cf. Annex 2B  
 
17 the educational policy objective are for the EIT to provid e funding for innovation 
capacity development and rewarding/recognising HEIs to become more innovative and 
entrepreneurial (71% of respondents) and to launch new actions supporting education and 
human capital development through the identification of futur e skills needs (69% of 
respondents). In the same consultation however, only 23% of respondents support the 
strengthening of the EIT label. Furthermore, the representatives of business and regional 
associations interviewed by the Commission45 expressed the v iew that HEIs  should play 
a key role for a more entrepreneurial environment in Europe.  
 
 
2.3. Limited impact of EIT’s regional outreach  
 
The KICs consist of geographical hubs or co -location centres (CLCs) that bring together, 
at a local or regional level, education, research and industry partners of the KIC. As the 
EIT evaluation confirmed, CLCs broaden the EIT innovation support to some of EU's 
moderate innovation performers; nevertheless, the CLCs' support to the group of 
“moderate and modest innovator” c ountries46 remains limited to a small number of 
Member States (Portugal, Poland, Estonia, Greece, Slovenia)47. 
 
Both the evaluation of the EIT and the High -Level Group report highlighted that efforts 
are still needed for the KICs to be fully integrated into the local innovation ecosystems. 
60% of respondents to the consultation on the mid -term evaluation of the EIT reported 
that “the KIC had had little or no systemic impact on local, regional or national 
innovation ecosystems”.48  
 
The majority (77%) of all re spondents to the OPC agree or strongly agree that the joint 
activities between HEIs, businesses and research organisations are not sufficiently 
integrated within their regional and local ecosystems. This perception is even stronger 
(89% of respondents) in “moderate and modest innovators” countries. Similarly, the main 
issue raised by the representatives of the business and regional associations during the 
consultation organised by the Commission in November 2018 related to the necessity of 
linking the EIT a nd KIC activities to the regional and local Smart Specialisation 
Strategies.  
 
The problems of insufficient engagement of KICs in developing strong local innovation 
communities are further amplified by the fact that 73% of the EIT financial contribution 
is concentrated in five countries.49 This results in a lack of integration and promotion of 
KIC activities within the regions and local innovation ecosystems across Europe and 
limits their overall impact on regional innovation ecosystems.  
 
Through its Region al Innovation Scheme (EIT RIS) which was launched in 2014, the 
EIT developed an outreach strategy, which  is carried out through the activities of the 
KICs. Its main objective is to support countries and regions that lag behind in innovation 
                                                           
45 Views expressed in the  stakeholder workshops organised by the Commission in November and December 2018.  
46 This report adopts the categorisation of the European Innovation Scoreboard. The Scoreboard identifies countries as: Innovati on 
Leaders; Strong Innovators; Moderate Innovat ors; and Modest Innovators. ec.europa.eu/growth/industry/innovation/facts -
figures/scoreboards_en  
47 ICF (2017), Evaluation, p. 36, i.e. Portugal, Poland, Estonia, Greece, Slovenia  
48 Ibid., p. 84. and High Level Group (2016), Future of the EIT, p. 13.  
49 ECA  (2016), Special Report, pp. 42 -43. Funds are concentrated in partners from: Netherlands (24%), Germany (15%), France 
(13%), Sweden (12%) and United Kingdom (9%)  
 
18 performance50 by strengthening their capacity for innovation and by bringing the EIT 
model to these regions.  EIT RIS is a voluntary scheme and KIC do not have an 
obligation to implement it unless they decide to include it their Business Plans.  
 
Incentives for KICs to ope rate in EIT RIS territories are still limited, in comparison to the 
total budget available. The EIT RIS guidelines foresee that each KIC can apply for EUR 
1.5 to EUR 4 million annually. This is between 1.7% to 5% of the total annual grant for a 
first gener ation KIC in 2018. Such incentives appear insufficient to fully exploit the 
potential of the regional outreach of the KICs activities and do not adequately mitigate 
existing regional disparities.  
 
Given the novelty of the RIS any conclusions regarding its impact would be premature at 
this stage. However, there are indications that its effect is likely to be limited, partly due 
to  low budgets as well as differing strategies between the horizontal EI T RIS strategy 
and the individual strategies of the KICs that ultimately implement it on a voluntary 
basis.  
 
 
2.4. Technical issues  
 
In addition to the three key problem areas described above, the interim evaluation, the 
Court of Auditors Report, the High -Level Group Report, the Commission’s observations 
on the EIT functioning also point to a number of technical issues that the EIT needs to 
address in order to increase the effectiveness, efficiency and coherence of its operations, 
in line with its objectives a nd mission.  
 
KICs: openness, transparency and collaboration  
 
Limited transparency and openness of the KICs affect their partners and stakeholders. As 
the Court of Auditors observed in relation to KIC internal processes, the major 
challenges relate to the  limited number of partners involved in the strategic and 
operational decision -making of the KIC51; the selection of activities financed by the 
EIT52; and the lack of transparency and communication53, hindering wide participation, 
roll-out and replication.54 The high concentration of EIT financial support in a  small 
number of partners negatively impacts the attractiveness of the KICs for potential new 
partners.  
 
The High -Level Group report found that the limited openness of KICs,  and their 
innovation ecosyst ems as a whole, to new partners, as well as the lack of clear guidelines 
associated with becoming a partner can reduce the effectiveness of the EIT model. The 
Group report referred to the perception of the KIC as “closed clubs” and called for 
principles th at can better engage external partners including SMEs.55 A similar view was 
                                                           
50 Modest and moderate innovators in 2018, based on the European Innovation Scoreboard: Bulgaria, Croatia, Cyprus, Czech 
Republic, Estonia, Greece, Hungary, Latvia, Lithuania, Malta, Poland, Portugal, Romania, (South) Italy, Slovakia, Slovenia, S erbia 
and Tu rkey.  
51 ECA (2016), Special Report, p. 42.  
52 Ibid. p. 44; 50% of the respondents to the survey do not believe that the selection of the activities within the KIC is fair and 
transparent.  
53 Ibid. p. 44; some KIC partners have expressed their concerns by st ating that “there are a  couple of influential partners and they 
distribute the funds among themselves”.  
54 E.g. the websites of some KICs still lack basic information on the supported projects such as contact details of project 
coordinators, project duratio n, amount of EU -funding, and key deliverables. The EU as funding source is not properly indicated 
throughout the co -funded projects.  
55 High Level Group (2016), Future of the EIT, pp. 17 -18. 
 
19 reiterated by some participants in the consultations on Horizon Europe.56 Some 
stakeholders highlighted that “it is essential that the EIT and the KICs improve their 
openness and res ponsiveness to include new relevant actors and keeping a continuous 
outreach effort to renew and reinforce the member base”.57 Stakeholders also highlighted 
the potential synergies from more active collaboration between and across the KICs.58 
 
More than 50% of OPC respondents indicated that the EIT brand is not well 
recognised.59 The current EIT mechanisms to ensure systematic and wide dissemination 
of results to better inform European, national and regional policy makers of the 
achievements of KICs/EIT are no t effective.60  
 
The integration of the activities of HEIs, research organisations, and businesses is a 
cornerstone of the EIT innovation model and requires efficient collaboration among these 
actors. As confirmed by participants in the consultation activities run by the Commission, 
the level of cooperation between education and training institutions and businesses is 
insufficient. Business actors were not always willing to partner with academia thus 
confirming a broader problem in university -business  collaboration.61  
 
Furthermore, the social network analysis in Annex 7 suggests that in selected KICs up to 
83% of KIC beneficiaries participated in only one or two projects meaning that some 
organisations have weak ties with the system and that activities  are concentrated around a 
small number of organisations.  
 
 
EIT Governance  
 
Good governance of the EIT is essential for achieving its objectives and ensuring long -
term success. S tructures, processes, roles and responsibilities as established in the EIT 
Regulation  are interrelated. Several bodies play an important role and these are (1) a 
Governing Board62 (high -level members experienced in higher education, research, 
innovation and business) assisted by an Executive Committee , (2) a Director , appointed 
by the Governing Board  and (3) an Internal Auditing Function  advising the Governing 
Board  and the Director. The Commission has an observer role in the Governing Board . It 
also appoints the members of the Board but the latter is not obliged to report to the 
Com mission. Therefore, the Commission’s contribution to the effective and efficient 
functioning of the EIT and KICs is limited.  
 
  
                                                           
56 E. Griniece and M. Muizarajs (2018), Synthesis of stakeholders i nput for Horizon Europe, p. 64.  
57 Ibid.  
58 See Annex 2A  
59 ICF (2017), Evaluation, pp. 51 -52 
60 Ibid. 
61 European Commission (2018), The state of university -business cooperation in Europe. Publication available 
at.europa.eu/en/publication -detail/ -/publication/1b03ee59 -67a4 -11e8 -ab9c -01aa75ed71a1/language -en 
62 It adopts, for example, the draft EIT’s SIA, the SPD, the EIT’s budget, appropriate measures if the evaluation of a KIC shows  
inadequate results, appoints a nd dismisses the Director  and exercises disciplinary authority over him/her, promotes the EIT globally, 
etc.  
 
20 The external evidence on governance is not as extensive as in other areas; however, in 
the Commission’s experience it is clear that the current form of governance has an 
impact on the efficiency of the EIT’s functioning.  As an example, the current EIT 
Regulation does not rigorously distinguish between the supervisory powers of the 
Governing Board and the executive powers of the D irector, e.g. with regard to the 
continued monitoring and evaluation of the activities of the KICs. The governance 
structures should also better ensure that KICs operate in synergy with each other and 
with relevant EU policy objectives  
 
According to the EI T Regulation, the Stakeholder Forum  is intended to be a platform 
open to national, regional and local authorities, organised interests and individual entities 
from business, higher education, research, associations, civil society and cluster 
organisations,  as well as other interested parties from across the knowledge triangle. 
However, its  implementation is through one annual event63, which suggests that it is not 
effectively fulfilling its function due to its limited scope.  
 
The governance of the EIT has a lso been the subject of recommendations from the High 
Level Group on the EIT (HLG)64. Consequently, there is a need to clarify and adjust 
roles, responsibilities and the division of tasks between the Governing Board , the 
Executive Committee  and the Director  with a view to  increase clarity, avoid duplication 
and the need to simplify the EIT’s decision -making process65. In addition, a clarification 
of the role of the Stakeholder Forum is necessary in order to maximise its impact.  
 
 
Other issues  
 
As highlighted by the Court of Auditors’ 2016 report, there is a high staff turnover at the 
EIT linked to the fact that EIT staff contracts have limited duration compared to other 
similar EU bodies. This is an issue that needs to be addressed as it has imp act on the 
continuity of EIT's operations and its functioning.  
 
 
  
                                                           
63 The EIT is organising every year an event gathering EIT stakeholders. See for more  information  https://eit.europa.eu/innoveit  
64 High Level Group  (2016), Future of the EIT, pp. 22 -24. 
65 Supported by evidence from decentralised EU agencies concluding that a clear separation of roles and functions between the 
Management Board  and the Director , as foreseen in the founding regulations, is meant to avoi d overlap between the two, and allow 
the Management Board  to focus on strategic priorities and key management decisions.  
 
21 2.5. Summary of problems and technical issues to be addressed:  
 
The following problem tree exemplifies the drivers of the problems and technical issues:  
 
 
Figure 5: Problem tree; own illustration  
 
 
The following table shows the sources of problems and technical issues:  
Problem/technical  
issue  Regulation  SIA Operational/managerial  
measures  
Suboptimal funding 
model  X X  
EIT governance  X  X 
Future themes for  
new KICs   X  
Limited impact of 
education activities  X X  
Limited impact of 
regional outreach  X X  
Openness, transparency 
and collabor ation of 
KICs  X X X 
Horizontal: ensuring  
alignment within 
Horizon Europe and 
synergies   X X 
Table 2: Sources of problems and technical issues; own illustration  
  
Suboptimal KIC funding model
Limited impact of EIT  s regional 
outreach 
Limited impact of EIT education 
activities 
Limited inclusion of education in 
innovation ecosystemsLow integration and promotion of KIC 
activities within local environmentsLimited openness and 
transparency of KICs
Concentration of EIT 
funding in few countriesLow integration and promotion of 
KIC activities within local 
environmentsNon coherence between KIC 
strategies / business plans and EIT 
activities (RIS scheme ) vis-à-vis 
regions  
Limited entrepreneurial competences
Low co -funding attracted and limited 
progress in achieving financial 
sustainability
Low effectiveness of annual activity 
planning and budgeting 
Disproportionate admin burden on 
financial reportingLack of specific skills in key fields 
(individual level )
Lack of entrepreneurial capabilities of 
HEIs
(institutional level )ProblemsEffects 
Consequences
Technical issues
Collaboration and 
unexploited linkages 
between KTI activitiesEIT Governance – 
responsibilities and tasks Complicated concept of KAVA vs . KCA 
activities and related unclarity on 
eligibility among KIC partnersLow awareness of the EIT education 
activities , the concept of 
entrepreneurship education and linking 
the education , research and business  
Untapped potential to better link 
innovation players across EuropeDrivers
 
22 3. WHY SHOULD THE EU AC T? 
3.1. Legal basis  
 
The EU has a shared competence in industry policy based on Article 173 TFEU (Title 
XVII). According to Article 173(1), the Union and the Member States shall ensure that 
conditions necessary for the competitiveness of the Union's industry exist. For that 
purpose, in accordance with a system of open and competitive markets, their action shall 
be aimed also at fostering better exploitation of the industrial potential of policies of 
innovation, research and technological development. Article 173(3) foresees tha t the 
European Parliament and the Council, acting in accordance with the ordinary legislative 
procedure referred to in Article 294, may decide on specific measures in support of 
action taken in the Member States to achieve the mentioned objective, excludin g any 
harmonisation of the laws and regulations of the Member States. This provision is the 
legal basis of the EIT Regulation and of the EIT’s Strategic Innovation Agenda 2014 -
2020.   
 
The proposed reinforcement of the activities of the EIT, including in t he area of 
education and the regional dimension, are innovation -driven and aim at the fulfilment of 
the objective set out in Article 173 TFEU . Therefore, t he industry legal base provided in 
Article 173 TFEU  constitutes the legal base of both proposals asse ssed in this impact 
assessment.  
 
 
3.2. Subsidiarity and proportionality: need for, and added value of EU action  
 
The Commission proposals for amending the EIT Regulation through a recast and for a 
new SIA respect the principles  of subsidiarity  and proportionality . They do not go 
beyond what is required for achieving the Union's objectives and provide a clear EU 
added -value in terms of economies of scale, scope and speed of investments in research 
and innovation areas, compared to national and region al initiatives and solutions. 
Moreover, EU action would not interfere with purely domestic scenarios or require 
harmonisation of the laws and regulations of the Member States.  
 
The EIT has a unique way of building EU -wide innovation ecosystems of education , 
research, business and other stakeholders.66 Its activities have a cumulative effect, which 
support and stimulate Europe's expertise, notably, in key strategic fields. This strengthens 
the Union's competitiveness and innovation capacity for the benefits of society as a 
whole. Furthermore, cooperation ac tivities supported by the EIT lead to an increased 
quality of action, innovation and internationalisation of KIC partners and organisations, 
the creation of cross -border, multidisciplinary networks, more cross -sectoral cooperation 
and geographical outreach . 
 
The EIT is also the sole instrument within Horizon 2020 and the future Horizon Europe 
with a distinct focus on education as a key driver of innovation, growth and 
competitiveness. The EIT and the KICs develop innovative education and training 
programmes  by linking education, research and business; learning -by-doing curricula and 
robust entrepreneurship education. The EIT contributes to increasing the number of 
entrepreneurs and skilled professionals thus contributing to the overall development of 
human c apital in Europe.  
                                                           
66 ICF (2017), Evaluation, p. 36.  
 
23 4. OBJECTIVES : WHAT IS TO BE ACHIEV ED? 
The general objectives are reflected in the Horizon Europe programme proposal and 
presented below, along with the specific objectives that address the problems and 
technical issues facing the EIT.  
 
I. Barriers to collaboration between higher 
education , research and business
II. Low levels of entrepreneurial activity  and lack of 
entrepreneurial mindset
III. Underutilisation of existing research strengths 
to create economic or social value
Suboptimal KIC funding model
Limited impact of EIT s regional outreach 
Limited impact of EIT education activities 
Technical issues
I. Strengthen sustainable innovation ecosystems   
across Europe
II. Foster innovation and entrepreneurship
 through better education 
III.  Bring new solutions to global challenges to 
market 
Increase the impact of KICs and knowledge triangle 
integration
Increase regional outreach of EIT by addressing regional 
disparities in innovation capacity across the EU
Increase innovation capacity of higher education by 
promoting entrepreneurial transformation of HEIs
Individual operational objectives
OBJECTIVES PROBLEMS
GeneralSpecificEIT Regulation , SIAHorizon Europe
 
Figure 6: General and specific problems and objectives of the EIT; own illustration  
 
In line with the identified problems, the specific objectives, to be defined in the SIA are:  
 
a. To increase the impact of KICs and knowledge triangle integration through an 
effective and efficient EIT funding model;  
b. To increase the innovation and entrepreneurial capacity of the higher education 
sector by promoting institutional change in HEIs in Eur ope;  
c. To increase the regional outreach of the EIT in order to address regional 
disparities in innovation capacity across the EU;  
  
 
24 5. HOW OPTIONS ADDRESS P ROBLEMS AND TECHNICA L ISSUES  
A number of options regarding the EIT’s future direction were considered a nd discarded 
in the Horizon Europe impact assessment67: namely, the Reduction/Discontinuation of 
EIT KICs interventions; the Continuation of the approach to EIT/KICs as implemented 
under Horizon 202068; the Direct integration of KICs into the Framework Programme 
(without the EIT). Annex 5 provides details on policy options which were not considered 
viable and the reasons for this.  
 
Before proceeding to the discussion of the three policy options, sections 5.1. -5.3. discuss 
measures to be taken in response  to problems and technical issues described in section 2 
for which only one alternative is viable. The policy options are presented in the backdrop 
of a targeted EU level intervention on the basis of the Horizon Europe proposal for an 
EIT budget of EUR 3 b illion (allowing the launch of one or two new KICs during 2021 -
2027 according to the option chosen). The options offer different strategic choices and 
are not cumulative even though a wide range of similarities exists across all of them.  
 
5.1. Discussion of technical issues  
 
Openness, transparency and collaboration  
 
Limited transparency and openness affect negatively the collaboration of EIT 
stakeholders. Technical amendments in the EIT Regulation would be necessary to 
reinforce the principles of openness a nd transparency, particularly: the provision on 
transparency of both the EIT and KIC and access to documents and extending the 
selection criteria for KICs to incentivise the addition of new members and including 
references to Horizon Europe principles of t ransparency and openness for European 
Partnerships.  
 
A number of technical measures can be introduced by the EIT which do not require 
additional amendments to the EIT Regulation. Such measures include the creation of 
guidelines  by the EIT to be followed b y KICs as regards transparency and openness 
aspects, in particular the selection of new partners, the preparation of the Business Plan69 
and the openness of activities to third parties. The Governing Board (GB) would monitor 
how KICs apply the guidelines and take them into account in the assessment of KICs’ 
performance for the funding allocation. This includes the possibility to explore ho w 
strategic priorities that are not foreseen to be addressed by new KICs can eventually be 
efficiently supported through collaborative action among several KICs (cross -KIC 
actions). This applies even more so if more than one KIC already foresee activities 
common for a policy objective.   
 
In addition, the KICs’ multi -annual strategies  need to describe how the KICs will ensure 
openness to relevant partners and stakeholders and how it intends to reach new potential 
partners across Europe. Other measures inclu de ensuring that KICs transparently share 
the conditions and the criteria to become partners as well as improving the procedure for 
the preparation of a KIC multi -annual strategy and Business Plan (including the 
identification of priorities, synergies with  other KICs and other EU -activities,  the 
selection of activities and the allocation of funds). Finally, the Governing Board could 
                                                           
67 SWD(2018) 307 final, p. 129  
68 This approach was discarded due to its perceived lack of integration  of EIT in the overall R&I framework  
69 Including guidance on streamlining the policy goals/targets and its monitoring.  
 
25 incentivise KICs that demonstrably increase the share of calls, in particular for 
innovation projects that are open to third p arties.  
In its monitoring, the EIT should signal over -concentration of EIT financial support to 
the Governing Board which should be able to request operational measures from the KIC 
that mitigate such over -concentration. More generally, transparency guide lines should 
ensure that KIC Business Plans contain the information on the level and intensity of 
cooperation between KIC partners (i.e. overview/ratio of KIC partners/beneficiaries 
within individual KIC activities, innovation projects or education program mes; and 
breakdown of funding distribution among individual partners). Such measures should be 
monitored by the EIT via relevant indicators and trigger action at the level of the 
Governing Board  if related objectives are not met.  
 
Governance  
 
There is a need for clarification of the roles for the EIT Governing Board, Executive 
Committee and Director. The Governing Board needs to strike the right balance between 
strategic leadership of the EIT and KICs and responsibility for operational aspects of the 
EIT and KICs.70 In addition, the Governing Board has to give overall guidance to the EIT 
while respecting the autonomy of the KICs.71 While the EIT Regulation qualifies all 
decisions of the Governing Board as ‘strategic’, it is clear that some decisions are 
operational in nature such as the establishment of advisory groups or the implementation 
arrangements for the operation of an Inter nal Auditing Function.  
The EIT would benefit from a more guidance from the Governing Board on key strategic 
issues.  The Governing Board currently does not play a sufficiently strong role in the 
monitoring, supervision and steering of KICs, which could be  strengthened by 
supervising more closely the ongoing evaluation and monitoring of KICs. A clearer 
division of tasks could help the Governing Board to achieve balance between strategic 
leadership and operational aspects.  
The assistance by the Executive Co mmittee to the Governing Board should be clarified in 
order to provide more effective support (eg. preparation by Executive Committee of the 
meeting of the Governing Board in cooperation with the Director; consultation of the 
Exectutive Committee by the Di rector on key documents such as the draft Single 
Programming Document and draft consolidated annual activity report). The 
Commission’s role should also be clarified to reflect its legal obligations in terms of 
monitoring and sound financial management. A r equirement for agreement by the 
Commission on a limited number of strategic issues (e.g. monitoring and financial 
allocation principles) should be introduced.   
The EIT Stakeholder Forum should take into consideration the activities of the Forum of 
Member States and Associated Countries’ public authorities and bodies to be established 
under the Horizon Europe programme. This forum will promote coordination and 
dialogue on the development of the EU’s innovation ecosystems and between EU and 
national innovati on policies and programmes.  
                                                           
70 Under the current EIT Regulation, the GB has to i) take the necessary strategic decisions on the EIT and KICs by, for example, 
adopting the Strategic Programming Document (SPD) and EIT’s budget, the draft SIA, selecting a partnership as a KIC; ii) exer cise 
responsibility for  operational aspects of the EIT and KICs, e.g. by adopting procedures for financing, monitoring and evalua ting the 
activities of the KICs; and iii) respect the substantial autonomy of the KICs by not influencing their internal organisation and 
composition , precise agenda or working methods.  
71 As a result of the broad scope of the KICs autonomy in the EIT Regul ation, the KICs have tended to grow large, strong and 
independent, while the GB has built up the corresponding capacity to successfully oversee their strategic development and 
performance. The result is a lack of operational transparency of the KICs, a pro blem identified in ECA  (2016), Special Report, and 
High Level Group  (2016), Future of the EIT . 
 
26 Moreover, several amendments to the EIT Statutes annexed to the EIT Regulation would 
be necessary to reinforce the EIT governance provisions . In particular, this would include 
changes to clarify the role of the Governing Board,  the Executive Committee, the 
Director and the Commission in the governance of the EIT with a view to increase its 
effectiveness; and to clarify the role of the Stakeholder Forum. In addition, provisions as 
regards staff contracts should be amended to allo w for contracts of an indefinite duration 
in line with other comparable bodies, in order to ensure the continuity of EIT operations.  
 
5.2. Discussion of priority fields  
 
According to the EIT Regulation, the SIA should define the priority fields for the future 
KICs. The Governing Board of the EIT proposed four possible priority themes for future 
KICs in its Strategic Outline on the Future of the EIT72  and the draft Strategic 
Innovation Agenda of the EIT that was submitted to the European Commission in 
accordance with the EIT Regulation . The priority fields proposed by the Governing 
Board have been subject to a further thorough assessment by the Commis sion (see Annex 
9 for more details). It should be noted that this assessment did not include a detailed 
specific assessment of the potential economic, social and environmental impacts of 
possible KICs launched under each of the proposed priority fields sin ce this is not 
explicitly required by the EIT Regulation.73  
 
The final Commission assessment, summarised in the table below, 1) builds on several 
reports and assessments conducted by the EIT and the Commission against various sets 
of criteria and 2) is based on the evaluation of 9 key aspects that condition the sele ction 
of the priority fields. Annex 9 summarizes the assessment process and its different steps 
and outcomes.  Annex 6 outlines the European partnerships criteria that will be reflected 
in the call for selection of future KICs and in their multiannual stra tegies.  
 
  
                                                           
72 See for more details the strategic outline published by the EIT GB: 
https ://eit.europa.eu/sites/default/files/eit_strategic_outline_0.pdf   
73 The same approach was followed by the Commission and co -legislators for the preparation and adoption of the current Strategic 
Innovation Agenda 2014 -2020.  
 
27 Key aspects  Cultural and 
Creative 
Industries  Security and 
Resilience  Water, Marine 
and Maritime  Inclusion, 
Integration 
and Migration  
Coherence and synergies with  
EU R&I and Education 
landscape  ++ ++ ++ + 
Not covered by planned similar 
EU initiatives (i.e. partnerships)  ++ + + ++ 
Fragmentation of the innovation 
value -chain  ++ + + ++ 
Suitability of the EIT model to 
address innovation bottlenecks  ++ ++ ++ 0 
Ability to mobilize investment 
and sufficient  market for 
innovation  + + + 0 
Modernisation/transformation 
potential of the Education 
system and skills gap  ++ + + ++ 
Regional dimension  ++ + ++ + 
Citizen -focus approach  ++ ++ + ++ 
Synergies with and 
complementarity to existing 
KICs  ++ + + 0 
TOTAL  17 12 12 10 
Table 3: Selection of future priority fields, Commission assessment  
 
As a result of this assessment process, the field of Cultural and Creative Industries (CCI) 
has been identified as the most adequate thematic priority for the first KIC to be launched 
under Horizon Europe a s it obtained the best results in the overall assessment against the 
proposed criteria. CCI   are a sector with a high growth potential, many grass -roots 
initiatives and strong citizen appeal. They are strongly embedded in their local and 
regional ecosystem s. However, the innovators and business creators in this sector lack 
the needed entrepreneurial and innovation skills. For these reasons, the KIC model seems 
particularly well adapted.  
 
  
 
28 Cultural and Creative Industries also complement  very well the themes of the 8 already 
existing KICs in the EIT portfolio. Last but not least, they cover an area for which no 
other potential partnership is foreseen and where there is a strong political su pport from 
the European Parliament and from Member States. Therefore, this theme has proven to 
be the most suitable to the KIC model and complements well the activities of the existing 
ones. These conclusions would be reflected in the SIA, along with an in dication for the 
launch of such a KIC. A call would be launched in 2021 that would lead to the 
designation of a KIC in the year after, i.e. 2022.   
 
5.3. Discussion of funding model  
 
In line with the EIT Regulation provision that requires funding for KICs to ce ase 
normally after a maximum of 15 years, the EIT Governing Board adopted principles for 
the financial sustainability of the KICs in 2015, based on its initial experience with the 
first generation KICs launched in 2010. In the principles, the Board outline d that that the 
maximum EIT contribution to a KIC for eligible costs should start to decrease from 
100% to 80% in year 11 of the EIT grant agreement with the KIC74, implying there is no 
co-funding obligation for the KIC in the years one to ten.  While this decision was the 
first to explicitly introduce co -funding from the KIC partners, given that no KIC has 
entered its eleventh year by 2019, its effectiveness cannot currently be assessed.  
 
KIC partners already attract co -funding, albeit to a ver y different extent. The figure 
below provides an overview of the co -funding attracted by KICs so far – ranging from 
9.7% in EIT InnoEnergy (launched in 2009) to 27% in EIT Health (launched in 2014). 
The figure shows t he average co -funding increasing from 9 % to 19% between 2014 and 
2017 (see Annex 11 for more details). However, as shown in the Figure 7, it is evident 
there are significant performance differences between the KICs. In particular, two out of 
three first generation KICs have significant difficul ties in attracting co -funding.  
 
  
Figure 7: Co-funding rate (% of KICs contribution) in different KICs in 2017; EIT data  
 
                                                           
74 The decision applies to the so -called KAVA activities (KIC -value added activities), ie. the activities that can be funded with up to 
100% (see chapter 2.1. for an explanation). The Governing Board decided in 2015 that the maximum EIT contribution to a KIC wi ll 
be reduced from up to 100%  funding to KAVA after 10 years of a KIC’s designation to 80%, on average, in year 11 and thereafter 
progressive annual reductions: 60% in year 12, 40% in year 13, 20% in year 14 and 10% in year 15. This decision has not been 
revoked since then as it is ex pected that the Commission will revise the funding model, in accordance with the Court of Auditors 
recommendation.  0,05,010,015,020,025,030,0
Climate KIC Innoenergy Digital Health Raw
MaterialsFood AVERAGECo-funding rate, 2017  
(% of KICs contribution)  
 
29 In this context and in view of the recommendation of the Court of Auditors, different 
solutions have been analysed in order to addre ss the suboptimal funding model of the 
EIT: a continuation of the current practice; an introduction of a co -funding rate in line 
with the Horizon Europe provisions for partnerships; and a decreasing EIT co -funding 
rate. Annex 10 provides a financial modell ing analysis of the implications of co -funding.  
 
 
5.3.1.  Continuation of current funding model (discarded)  
 
Not changing the current funding model would mean that there would continue to be a 
funding model that does not distinguish clearly between the EIT grant and real external 
investment. The KIC activities not funded by the EIT would continue to be included i n 
the calculation basis when determining the EIT’S financial contribution to the KIC. The 
yearly reporting of the KIC complementary activities, both in the Business Plans and in 
the financial reports submitted by the KICs, would continue to add  considerabl e burden 
with limited added value.  
 
As a result, the funding allocation would continue to be ineffective and disincentivise 
KICs from implementing sound financial sustainability strategies. The expected leverage 
effect will continue to be undemonstrated. Finally, not responding to the recommendation 
of the Court of Auditors75 is not a justified option, so this solution is discarded.  
 
 
5.3.2.  Introduction of a 50/50 co -funding rate (discarded)  
 
In light of the 2015 decision of the Board, the subsequent recommendati ons of the High 
Level Group and the Court of Auditors, the data available, and the need to strengthen 
KIC partners contributions or other revenue sources, an alternative to the continuation of 
the current model is to consider the introduction of an explici t co-funding model to 
replace current practice.   
 
One possibility would be to adopt the guidance provided for institutionalised European 
Partnerships based on Articles 185 and 187 of the TFEU. The provisions in Annex III on 
Partnerships of the Horizon Eur ope proposal stipulate, “the financial and/or in -kind, 
contributions from partners other than the Union, will at least be equal to 50%”.76 The 
shift to such a funding model would however raise a number of serious concerns in terms 
of feasibility and the ove rall impact on the KIC.77   
 
While it can be assumed that co -funding of KICs would gradually increase, it seems 
implausible that KICs would be able to adapt to a co -funding rate of 50% in the transition 
to the Horizon Europe framework as of 2021 onwards. Such a change in the funding 
model of all existing KICs would imply a far -reaching revision of all existing financial 
management and planning practices. Such an abrupt change would need to be agreed by 
all KIC partners putting the KIC partnership at risk. It is not excluded that it can  
seriously destabilise the current structure which is based on existing guidance.  
 
In addition, the application of a harmonised co -funding rate of 50% across all eight KICs 
- that are in very different stages of development - would disrupt all KICs and th e entire 
                                                           
75 ECA (2016), Performance report, p. 51  
76 See COM(2018) 435 final, Annex III, p.7.  
77 It is expected that the final HE Regulation will requir e the limit of 50% of EU financial contribution will apply only to 
institutionalised partnerships under Article 185 and 187 of the TFEU.  
 
30 KIC operation model. It would be contradictory to the guidance provided by the EIT GB 
which aimed to allow for some flexibility in preparing KICs better for financially 
sustainability with a decreasing rate of co -funding by the EIT.  
 
Moreover, su ch a rate would not provide sufficient incentives to any new KICs to apply 
to upcoming calls or to the achievement of the financial sustainability goals by the 
current ones. In the case of new KICs, the obligation to co -fund 50% of the budget from 
the very  beginning entails a clear risk of non -implementation, as partners would be more 
reluctant to engage in long -term partnerships that requires them to commit significant 
resources over up to 15 years. It is very likely that calls for proposals for future KIC s 
would not attract interest under this co -funding rate.  
 
Apart from the significant operational implications of a shift to a 50% co -funding model, 
the financial modelling in Annex 10 shows that even though attractive in theory in the 
short term, a co -funding rate of 50% would be a suboptimal solution in the long -term. 
Moreover, there are significant enforcement issues with such a rate that may prevent 
partners from participating in the activities, both for existing and new KICs.  
 
In addition, a co -fundin g of 50% appears more suitable for research -industry partnerships 
where industrial partners have a core interest in shaping and controlling the research and 
development agenda. It seems however less suitable for a KIC that includes at its core 
also educati on and entrepreneurship activities that aim at developing skills and a more 
entrepreneurial culture. Such activities are traditionally addressed by and in close 
collaboration with the education sector and are more difficult to fund from private 
sources.  
 
In conclusion, there is a considerable risk that a co -funding rate of 50% applied across all 
KICs may lead to premature termination of the activities of at least some KICs, while 
causing severe disruption in all of them and preventing new ones from startin g. For this 
reason this option is discarded as well.  
 
 
5.3.3.  Introduction of a gradually decreasing EIT co -funding rate (retained)  
 
A number of reasons suggest a gradually decreasing EIT co -funding rate would be an 
appropriate solution to the problem at hand.   
 
First, the establishment of EIT co -funding rates that would reflect the decision adopted 
by the Governing Board in 2015 and the needs of KICs across their different phases 
(start -up phase, ramp -up phase, maturity phase, exit from the EIT grant). It would  
support them more effectively towards achieving financial sustainability and result in 
additional economic benefits due to the significant investment made already.78 It would 
provide clarity on specific co -funding conditions for the different phases. This would 
result in higher planning security and private investment in KIC -supported 
projects/sectors, enabling KICs to gradually focus more on higher added -value activities 
and services they provide.  
 
Secondly, the introduction of a gradually decreasing rate  of EIT co -funding would 
stimulate and reward performance and best practice. While most of the KICs already 
have adequate non -EIT co -funding rates, some of them do not. This is the case of two out 
                                                           
78 See Annex 10 for details  
 
31 of the three first generation KICs (EIT InnoEnergy at 9.7% and EIT Climate -KIC at 
12.6% in 2017) despite them being fully mature and receiving a grant of around EUR 85 
million and EUR 80 million, respectively for 2017. However, given the clear guidance of 
the Governing Board from 2015 it is expected that their per formance will improve 
between 2018 and 2020 (latest data available is 2017) as the EIT Governing Board has 
raised this issue with the KICs in its monitoring and supervision.  
 
A co -funding rate applicable to the KICs should reflect best performance and aim to 
increase the performance of KICs that under -perform. Based on the KIC development 
model, a decreasing funding rate would involve four phases. A start -up phase (years one 
to four) will involve the set -up of the organisational structure of the KIC, establishing its 
management and operational structures and defining the short -term business strategy. 
This phase will be supported with up to 100% of the eligible cost within the av ailable 
grant. This is necessary as the KICs build up their operations in the first years and the 
absolute size of the grant is growing only over time (for example, EIT Health, launched 
in 2014, received the followings amounts: EUR 3.2 million  (2015); EUR  20.7 million 
(2016), EUR 34.2 million (2017) and EUR 57.7 million (2018)).79  
 
In the ramp -up phase (years five to seven) the KIC will consolidate its partnership 
structure and deliver on its mid -term business strategy. The EIT will support the KIC 
with up  to 80% of the eligible costs, requiring the KIC to match at least 20% of the cost. 
In the maturity phase (years eight to eleven), the KIC will grow, expand and the EIT will 
support it with up to 70% of the budget. Finally, in line with the G overning Board 
principles for financial sustainability, during the exit phase (years twelve to fifteen), the 
EIT will request the KIC to gradually increase its co -funding rate on an annual basis. The 
“exit from EIT grant” phase is in line with the guidance of the Govern ing Board that 
stipulated a decrease starting with 80% in year 11 and thereafter progressive annual 
reductions: 60% in year 12, 40% in year 13, 20% in year 14 and 10% in year 15”.80 The 
EIT will discontinue its annual grant to the KIC after year fifteen.  
 
The table below provides an overview of the proposed decreasing co -funding rate that 
adapts and formalizes the decision taken by the Governing Board.  
 Start -up Ramp -up Maturity  Exit from EIT grant  
Years  1 – 4 5 – 7 8 – 11 12 – 15 
EIT Co -
funding rate  Up to 
100%  Up to 80%  Up to 70%  50% at year 12, 
decreasing by 10% per 
annum  
Table 4: Overview of the proposed decreasing co -funding rate for the EIT grant; own illustration  
 
  
                                                           
79 Internal data and reporting provided by the EIT to the European Commission.  
80 The same document stipulates “in year 11 and thereafter progressive annual reductions: 60% in year 12, 40% in year 13, 20% in  
year 14 and 10% in year 15”.  
 
32 Unlike the Governing Board proposal of 2015, the proposed decreasing co -funding rate 
would ensure that co -funding is applied early on in the KIC operations (starting at year 5 
instead of 11), thereby significantly increasing the commitment of the partners and their 
long-term planning security. The proposed EIT co -funding rate would gradually decrease 
over the years 5 to 15 and facilitate the KICs transition to financial sustainability, rather 
than start to fall steeply after 10 years. All other things being  equal, the proposed 
decreasing rate would also trigger higher private investment than the current GB proposal 
(see also Annex 10). Finally, such a co -funding rate reflects well the best performing 
KICs today that should gradually become the benchmark.  
 
Figure 7: EIT co -funding rate, EIT expected grant and KIC co -funding in perspective; own projection  
 
The adaptation of the funding model would increase the non -EIT co -funding share. As a 
result, higher private investments from both existing KIC beneficiaries as well as new 
partners investing in KIC -supported projects would be likely in the medium to the long 
term as the simulations in Annex 10 demonstrate.81 Furthermore, the adaptation of the 
funding model is in line with the views of the majority  of stakeholders expressed in the 
Open Public Consultation. Securing other public or private funding for the operation of 
KICs from the outset was the most popular solution cited and supported by 64% of the 
respondents.   
 
 
  
                                                           
81 The simulation results in Helsinki -Uusima and Noord -Brabant regions suggest that the accelerating of the private investment in the 
medium - to long -run is the most effective when the increasing co -funding rate over time is applied (policy option 2) attracting 
annually EUR 96.62 million and EUR 324 million respectively in 2035.  0102030405060708090
0%10%20%30%40%50%60%70%80%90%100%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15EIT co -funding rate, EIT expected annual grant and KIC 
co-funding in 15 years perspective  
EIT co-funding rate (%) EIT co-funding (Meuro) KIC co-funding (Meuro)
 
33 The implications of changes to  the funding model would be different for different waves 
of KICs:  
 
 First wave  (three KICs launched in 2010): somewhat affected as the funding by 
the EIT will be discontinued after 2024 and Governing Board guidance from 2015 is 
broadly in line with curr ent proposal.  
 Second and third wave  (three KICs launched in 2014 and 2016): moderately 
affected since the change in the funding model would happen in the middle of their 
programming period. However, the KICs of 2014 and 2016 already now have a non -
EIT co -funding rate of between 20 to 25 % which is in full compliance with the 
proposal.     
 Fourth wave  (two KICs launched in 2018): no significant implications as they 
would start up their activities in 2019 and 2020 which would allow for smooth 
integration into any new funding model.  
 For any future KICs : no particular implications as they would be launched in the 
next programming period.  
 
Table 5: Implications of new co -funding model on KICs; own analysis  
 
The theoretical and empirical simulation analyses  in Annex 10, point to the overall large 
potential of the EIT investment support to leverage additional private investment into 
KIC projects through gradually decreasing EIT co -funding rates. However this may also 
have an effect on the number of KIC partne rs and the membership. Higher KIC co -
funding rates could imply fewer partners willing to participate and contribute to the 
operation of the KICs. Such a scenario could however be counterbalanced with 
appropriate EIT incentives that reduce the financial, te chnology or market uptake risks of 
the potential KIC investors.   
 
A number of additional measures aimed at improving the efficiency of the funding 
allocation will support the application of the new funding model. First, a comprehensive 
and in -depth review  after seven years of KIC operations would be the opportunity for the 
EIT Governing Board to decide if a KIC has demonstrated adequate and expected results 
with the option to discontinue funding82. This review would guarantee transparency and 
would be in li ne with the guiding principles and criteria for European Partnerships in 
Horizon Europe and best practice in the EU.83 
 
A possible challenge may emerge if there is non -compliance by the KIC with the non -
EIT co -funding rule. For this there are effective miti gation measures. Firstly, a KIC must 
respect the financial principle of the EIT when preparing their Business Plans (prepared 
and submitted in year n -1), necessitating that the KIC will have to make the relevant 
calculations before proposing its Business P lan and requesting a budget to implement it.  
Secondly, should a KIC still have difficulties to match the EIT grant, then the Governing 
Board could reduce the absolute EU contribution to a level that the KIC can match, 
according to the rules. Such flexibil ity is currently possible and can be implemented 
through managerial measures.  
                                                           
82 The possibility that th e EIT Governing Board has of terminating a KIC should its results be inadequate is foreseen in the current 
EIT Regulation. The new EIT Regulation should include a clear reference to the 7 -year review and the possible termination or 
suspension of funding.   
83 Cf. the review process of the Exzellenzinitiative in Germany which can extend the status of an “excellent university”. Deutsche 
Forschungsgemeinschaft, http://www.dfg.de/foerder ung/programme/exzellenzinitiative/   

 
34 5.4. Description of policy options  
 
Three policy options are presented below: a baseline reflecting the continuation of 
business as usual; and two different options addressing the pr oblems and technical issues 
identified in the impact assessment.   
 
The following graph presents comprehensively the intervention logic of all the Options 1, 
2 and 3. It is to be noted that the options are expected to achieve the outputs, results and 
impac ts to a different extent (further developed in section 6).  
 
Direct support actions for 
entrepreneurial and innovation 
capacity development of Higher 
Education Institutions 
8 existing KICs
2 new KICs
8 existing KICs
1 new KIC
Creation of EIT hubs in all MS
- Collaborative small scale projects for    
knowledge triangle integration
- Brokerage between KICs and regions
- knowledge triangle integration services 
(business support , education )
Businesses involved 
in EIT activities
Regional actors in 
Europe involved 
in EIT activities
HEIs  involved in 
EIT activities
Start -ups 
supported by EIT
Increased knowledge sharing and 
networking in innovation ecosystems 
involving more actors at regional level 
Increased quality of 
entrepreneurial higher education
Reduction in skills 
mismatches in key 
sectors
Effective and efficient 
new businesses 
creation
Increased innovation capacity in Europe
More entrepreneurial and innovative European higher education ; 
Improved human capital and talent for innovation   Budget
85 %
15 %Budget
70 %
30 %KIC activities EIT activitiesACTIVITES OUTPUTS RESULTS IMPACTS
Students involved 
in EIT activities
Dedicated EU financial , human and organisational resources to EIT as part of Horizon Europe ; KICs as organisations performing activities and 
networks of HEIs , businesses , research and civil society ; EIT as organisation performing horizontal activities beyond the remit of KICs ; INPUT
New products , 
services or processes 
on the market
KICs co-funding
Suboptimal KIC funding model
 Limited impact of EIT s regional outreach 
 Limited impact of EIT education activities 
 Technical issues
Increase the impact of KICs and 
knowledge triangle integration
Increase regional outreach of EIT and 
address regional disparities in innovation 
capacity across the EU
Increase innovation and entrepreneurial 
capacity of higher education institutions in 
Europe
Improve operational effectiveness 
and efficiency of EIT ISSUES OBJECTIVES
OPTION 2 OPTION 3
8 existing KICs
2 new KICsBudget
97 %OPTION 1
Basic coordination
- EIT RIS
- EIT Label3 %
 
 
Figure 8: Intervention logic; own illustration  
 
 
5.4.1.  Option 1: Baseline  
 
The baseline option represents the continuation of EIT’s activities as they are today with 
essential adjustments necessary to align it with the proposal for Horizon Europe. The 
EIT’s activities would be planned and implemented to maximise synergies and 
complementarities with the actions (clusters and missions) under the Global Challenges 
and Industrial Competitiveness Pillar. EIT would comply with implementation, 
monitoring and evaluation criteria for European Partnerships.   
In addition, the EIT will devel op synergies with the European Innovation Council  in 
offering support to highly innovative ventures in both start -up and scale -up stages, in 
particular through KICs. In order to ensure alignment with the overall Horizon Europe 
proposal in terms of administ rative rules, a simplification of rules would be pursued.  
 
35 The EIT and the KICs  would keep their current model  and continue business as usual. 
The EIT would continue to operate only through KICs. The role of KICs as drivers of 
innovation ecosystems in speci fic fields and the EIT as primarily a grant management 
agency would not change. The funding model of KICs would stay unchanged. Horizontal 
activities, such as the EIT Label or the EIT Alumni would continue operating on their 
current basis. The Regional Inn ovation Scheme (EIT RIS), would continue to be 
performed on a voluntary basis and its activities would not be part of a KIC’ overall 
strategy.  
 
No new actions  would be launched by the EIT to further address education and regional 
aspects as part of the ba seline.  
 
In line with the EIT Regulation, the first three KICs84 would cease  to receive EIT 
financial support after 2024. The five KICs85 that started operations between 2015 and 
2019 would reach maturity in the new programming period.   
 
Within the propose d budget of EUR 3 billion and based on the current funding model, 
two new KICs would be launched within the timeframe of 2021 – 2027, the first in the 
field of Culture and Creative Industries (CCI), the second on a theme to be defined taking 
into account t he Horizon Europe Strategic Planning exercise.  
 
In terms of budget , Option 1 would represent a continuation of the current distribution of 
budget between KIC activities, the EIT -driven activities and the EIT administrative 
budget, i.e. 97% of the budget for the grants to KICs and the rest divided between the 
EIT-driven a ctivities and its administrative budget. No changes would be made to the 
EIT staff provisions and duration of staff contracts.   
 
 2021  2022  2023  2024  2025  2026  2027  Total  
Admin budget  6 7 7 7 7 7 7 48 
KIC -related expenditure  401 388 424 427 424 435 431 2930  
EIT-driven activities  2 2 3 3 4 4 4 22 
Total EIT Budget  409 399 437 441 439 446 444 3000  
Table 6: Indicative budget under option 1 (MEUR); own illustration  
 
 
5.4.2.  Option 2  
 
Option 2 builds on the baseline. In addition to the essential adjustments necessary to 
align with the proposal for Horizon Europe, (=baseline), it adopts a number of technical 
measures to enhance the functioning of the EIT. Synergies with the proposal for Horizon 
Europe will be similar to those under the baseline.  
 
Option 2 introduces a new EIT action  in order to address its specific objectives in the 
fields of education and regional outreach. The main defining feature of this action would 
be the direct sup port action for entrepreneurial and innovation capacity development of 
                                                           
84 EIT InnoEnergy, EIT Digital, EIT Climate -KIC 
85 EIT Food, EIT Health, EIT Raw Materials, EIT Manufacturing, EIT Urban Mobility  
 
36 Higher Education Institutions (HEIs). In addition, complementarities with other EU level 
programmes (e.g. ERDF, Erasmus+) or national programmes and funding instruments 
would increase.   
 
The EIT would adapt its  funding model and implement a gradually decreasing EIT co -
funding rate, as described in section 5.2. Another important aspect of this Option would 
be the introduction of a long -term planning perspective of innovation activities 
(multiannuality). In order to address technical issues  hampering its functioning, the EIT 
would also adapt its governance model and improve openness, transparency and 
collaboration.  
 
The Regional Innovation Scheme  will be further strengthened by integratin g it fully in 
the KIC Business Plans and making it a core activity of the KIC with an increased 
budget.  
 
A substantial number of stakeholders in the Horizon Europe consultations referred to the 
role of the EIT in Horizon Europe in bridging R&I instruments  with support to higher 
education .86 The EIT will simplify the EIT labelling process, extending it to a wider 
lifelong learning perspective and to external quality assurance.87 In order to address its 
specific objectives, the EIT would launch a new support a nd coordination action  
aimed at supporting the development of entrepreneurial and innovation capacity of 
HEIs . This action will build on HEInnovate, a proven concept developed by the 
Commission and OECD.  
 
HEInnovate is a policy framework of the Commission and the OECD launched in 2013, 
that offers (1) a methodology for HEIs to develop their innovation and entrepreneurial 
capacities  and (2) a methodology to Member States to review their higher education 
systems. To date more than 1000 HEIs have used HEInnov ate and a number of Member 
States have hosted HEInnovate policy reviews by OECD.88 This demand suggests that 
there is a strong need in HEIs to develop their innovation and entrepreneurial capacity in 
a structured and systematic way. However, tn the current programming period (2014 -
2020) the use of HEInnovate is not linked to any funding support.  
 
Given its experience in the knowledge triangle integration that directly supports 
innovation capacity development the EIT is uniquely positioned to implement an ac tion 
aimed at supporting the development of entrepreneurial and innovation capacity of HEIs. 
The action would integrate the HEInnovate  methodology of the Commission and the 
OECD and would fund entrepreneurial and innovation capacity development in HEIs. 
The new support and coordination action would include the following elements:  
 
                                                           
86 E. Griniece and M. Muizarajs (2018), Synthesis of stakeholders input for Horizon Europe, p . 62.  
87 Such an approach could build on e.g. the ‘European Innovation Associate’ pilot (DG GROW) –a test to establish a SME -driven 
scheme to attract foreign recent PhD graduates (or PhD graduate returnees to their countries of origin) to R&I posts in smal l 
innovative enterprises, or the toolbox initially developed for the EC and now operated by the ‘European Innovation Management  
Academy’ in Düsseldorf, Germany ( www.improve -innovation.eu  )   
88 Five Member States (NL, IE, HU, PL, BG) completed an OECD review and four (IT, AT, CR, RO) are currently undergoing one.  
 
37  Support the entrepreneurial and innovation capacity development in HEI in the 
following HEInnovate dimensions: Leadership and Governance; Digital 
Transformation; Organisational  Capacity; Entrepreneurial Teaching and Learning; 
Preparing and Supporting Entrepreneurs; Knowledge Exchange; Internationalisation; 
and Measuring Impact.   
 Transferring innovation and entrepreneurial know -how between HEIs, by 
networking partners established in one region with HEIs established in other regions;  
 Bringing innovative HEIs from across the EU closer to KICs stakeholders 
communities and the EIT RIS stakeholder communities and connect local HEIs to 
European value chains in which KICs are involved;  
 Entrepreneurial and innovation capacity building services - including business 
support services, entrepreneurial education;  
 Support synergies and a lignment between different EU programmes contributing 
to innovation capacity;  
Table 7: Overview of new action supporting the entrepreneurial and innovation capacity of HEIs; own 
illustration  
 
The EIT would implement the aforementioned action through  annual calls and a 
dedicated budget. The calls would support collaborative projects comprising consortia of 
a minimum of three HEIs.89 The EIT would provide specific guidance, expertise and 
coaching to participating HEIs and develop evidence on best practic es and share it with 
the wider innovation community.   
 
Bridging regional disparities  will be a significant part of the new action as the EIT 
would particularly target HEIs from modest and moderate innovator countries to help 
them strengthen the regional i nnovation footprint and smart specialisation strategies of 
their HEIs. The EIT would allocate at least 25% of the overall budget of the action 
(around EUR 420 million) to projects led by a partner from a modest or moderate 
innovator country.  The open natu re of the calls (open to all HEIs) and the widening 
dimension will reach out to as many institutions from modest and moderate innovator 
countries as possible.  
 
Within the proposed budget of Euro 3 billion and based on the introduction of a co -
funding mode l that aims to increase private investment from KIC, Option 2 would see 
two new KICs  launched within the timeframe of 2021 -2027, the first on Cultural and 
Creative Industries and a second on a theme to be decided by taking into account the 
future Strategic  Planning Process. In line with the EIT Regulation, the first three KICs 
(launched in 2010) would cease to receive EIT financial support after 2024.  
 
  
                                                           
89 The specific rules for setting up consortia will be in compliance with the relevant rules of Horizon Europe programme.  

 
38 The more efficient funding of KIC through the decrease of EIT co -funding will result in 
the EIT being ab le to launch EIT -driven activities within its proposed budget . The 
distribution of budget between KIC activities, EIT -driven activities and EIT 
administrative budget would be as follows: 83% of the budget for the grants to KICs and 
the rest split between E IT-driven activities (15%) and administrative budget (1.8%).  
 
 2021  2022  2023  2024  2025  2026  2027  Total  
Admin budget  10 10 10 10 10 10 10 70 
KIC -related 
expenditure  342 335 367 370 366 374 360 2513  
EIT-driven activities  19 36 56 66 79 76 85 417 
Total EIT Budget  371 381 432 445 454 464 454 3000  
Table 8: Indicative budget under option 2 (MEUR); own illustration  
 
 
5.4.3.  Option 3    
 
Similar to option 2, option 3 builds on the baseline, adopts essential adjustments 
necessary to align with the Horizon Europe proposal and develop synergies  with it, and 
includes the same co -funding model and technical measures to enhance the functioning 
of EIT as option 2.  
 
Option 3 differs from option 2 in that it would introduce a new activity  of setting up a 
EIT Hub in each Member States in order to address the limited impact of the EIT’s 
regional outreach activities, instead of the support and coordin ation action aimed at 
supporting the development of entrepreneurial and innovation capacity of HEIs proposed 
in option 2.  
 
The EIT Hubs in the Member States would build on and gradually absorb the current 
Regional Innovation Scheme  of the EIT. The EIT wou ld directly implement the EIT 
Hubs to foster knowledge triangle integration, for example, via support for collaborative 
projects on a smaller scale than KICs. The projects would include partners from higher  
education , research and business. The EIT Hubs wo uld also serve as a broker between 
the existing KICs and the needs of the local innovation community of the Member States 
and regions.  
  
The EIT Hubs would ensure pro -active engagement with beneficiaries, development of 
local ecosystems as well as provisi on of services and small -scale grants to the 
beneficiaries, based on transparent criteria. They would also facilitate the management of 
knowledge triangle projects targeting regions where they operate. The EIT Hubs would 
serve the following functions:  
 
39  Brokerage between KIC activities and local partners and support cross -KIC 
collaboration in connecting to local partners  
 Bringing the KICs stakeholders communities and the RIS stakeholder 
communities closer together, as well as support collaboration between  European 
Structural and Investment Funds (ESIF) managing authorities and KICs and connect 
stakeholders to European value chains in which KICs are involved  
 Managing annual grants in support of knowledge triangle integration for 
collaborative projects, in cluding business support services, entrepreneurial education;  
 Transferring expertise and know -how between KIC and regions, by networking 
partners established in one region with EIT Hubs established in other Member States;  
 Establishing links between lo cal actors including innovation agencies, KICs and 
related R&I Initiatives, notably Strategic Value Chains, European partnerships, other 
EU-funded initiatives like Digital Innovation Hubs;  
 
Table 9: Overview of EIT Hubs activities; own illustration  
 
The EIT would manage the Hubs in all Member States90. The Hubs would support small -
scale knowledge triangle integration projects between at least one HEI, one business and 
one research organisation from at least 3 countries 8989. A particular emphasis will be 
put on developing effective collaboration between HEIs and businesses as this is usually 
the weakest link in innovation projects. The EIT would provide specific guidance, 
expertise and coaching to participating organisations and develop evidence on best 
practice and share it with the wider innovation community. The EIT would allocate 
around EUR 800 million of the total budget to this action.  
 
In terms of budget implications, Option 3 would foresee 70% of the budget for the grants 
to KICs and the rest would be split between EIT -driven activities (27%) and 
administrative budget (3%).  Only one new KIC would be launched during the next 
programming period , on the theme of Cultural  and Creative Industries. In line with the 
EIT Regulation, the first three KICs launched in 2010 would cease to receive EIT 
financial support after 2024.  
 
 2021  2022  2023  2024  2025  2026  2027  Total  
Admin budget  8 12 12 13 14 15 16 90 
KIC -related 
expenditure  290 281 307 308 307 311 298 2100  
EIT-driven activities  37 76 111 129 139 158 160 810 
Total EIT Budget  334 361 426 447 464 489 477 3000  
Table 10: Indicative budget under option 3 (MEUR); own illustration  
  
                                                           
90 In Hungar y as the EIT wwouldassume this role through its headquarters based in Budapest  

 
40 5.4.4.  Inputs of options  
 
The following table summarises the inputs to the presented options:  
 
 Option 1 
(baseline)  Option 2  Option 3  
EIT administrative budget (mio EUR)  48 60 90 
EIT funding to KICs (mio EUR)  2930  2500  2100  
Maximum number of KICs active during SIA  10 10 9 
Budget for EIT -driven activities (mio EUR)  22 440 810 
EIT Hubs in EU Member States91 0 0 26 
Table 11: Inputs of discussed options; own illustration  
 
5.4.5.  Key features of options  
 
The following table summarises the key features of the presented options:  
 
Issue  Option 1 (baseline)  Option 2  Option 3  
Number of KICs   8 existing KICs  
 2 new KICs   8 existing KICs  
 2 new KICs   8 existing KICs  
 1 new KIC  
Alignment with Horizon 
Europe  
  synergies with 
partnerships, missions, 
EIC  Same as option 1   Same as option 1  
Technical issues 
(openness and 
transparency; 
governance)   No changes  
  adaptation of 
governance  
 measures to increase 
openness and 
transparency   Same as option 2  
Funding model   No changes   New funding model 
based on gradually 
decreasing co -funding 
rate   Same as option 2  
New actions addressing 
problems on limited 
impact of education and 
regional outreach   None   New action to support 
actions for 
entrepreneurial and 
innovation capacity 
development of HEIs  
 Strengthening of 
Regional Innovation 
Scheme  
 Strength ening of EIT 
Label   New action to create 
EIT Hubs in Member 
States to support 
collaborative small 
scale projects for 
knowledge triangle 
integration  
 Strengthening of EIT 
Label  
Table 12: Key features of options, own illustration   
                                                           
91 Hubs would operate in all Member States except Hungary and the United Kingdom following its expected withdrawal in 2019.  
 
41 6. IMPACT OF POLICY OPTI ONS 
 
The following section contains a qualitative and quantitative assessment of the main 
economic, societal and innovation impacts identified in areas where the options are likely 
to have effects. The projections of future performance are based on past data re ported by 
the EIT using existing performance indicators. The accuracy of forecasts based on 
historical data is limited but considered the best method to assess the results of the KICs. 
While undertaking such an assessment ex -ante, it is important to rememb er that the EIT 
operates in the dynamic and evolving innovation landscape. The novel character of the 
EIT and the knowledge triangle integration model suggest that its impacts are gradually 
evolving and can only be demonstrated in the long -term.  
 
6.1. Option 1 : Baseline  
 
The EIT would continue to support KICs  and build innovation ecosystems across the 
EU. The first three KICs, launched in 2010, will cease to receive an EIT grant after 2024 
(in line with the maximum duration for support provided by the EIT to KIC) while one 
new KIC would be set up in 2022 and a  second in 2025.  
 
Synergies and complementarities with other EU programmes and funding instruments 
would increase due to the closer alignment with Horizon Europe, and in particular Pillars 
II and III.  Consequently, the overall effectiveness in spending p ublic money on 
innovation would improve although its quantification is not available.  The presence of 
the EIT will remain concentrated  in a limited number of Member States (see below). 
More than half of the EIT co -location centres (CLC) are placed in 6 countries, while only 
six CLCs out of 51 in total are located in moderate and modest innovator countries.  
 
Figure 9: Co -location centre s of the EIT as of 2018; EIT data  
 
In the absence of effective transparency, openness and collaboration measures, activities 
of the EIT would remain limited to the KICs' partners. No significant diversification of 
the partnership is expected in the absence  of  a change in the approach towards openness 
and transparency.  
 
No enhancement of SME participation is expected in this option as there would be no 
particular incentives for SMEs in place.  012345678EIT Co -location Centres (CLCs) of the EIT, 2018  
 
42  
Concentration of funds would be unlikely to change, in line wi th the current trends, with 
around 73 % of the total budget concentrated in partners from five countries (see problem 
definition, page 16).  
 
The establishment of the EIT with the KICs and their co -location centres were directly 
responsible for approximate ly 430 FTE direct jobs in 2016 (with a portfolio of 5 KICs, 
two of which only starting) across the EU.92 Based on this data, and a portfolio of 10 
mostly mature KICs between 2021 -2027, it is estimated that the number of equivalent 
FTE in the EIT and KICs wo uld reach 1000.  
 
Data reported from the three first -wave KICs, suggests that they have supported start -
ups, scale -ups and business ventures that have created around 6,100 jobs93 by 2016. 
Building on a portfolio of up to 10 KICs between 2021 and 2027, it is  assumed that the 
number of indirectly created jobs will more than double, i.e. around 12,000 jobs will be 
indirectly created.  
 
The structure of the KIC with regard to the type of partners and their overall weight 
would not be expected to change.  
 
Around  300 HEIs would continue to be part of the EIT Community as KIC partners, with 
some fluctuations over the years due to the cessation of the EIT grant to the first 
generation of KICs after 2024 and the set -up of two new KICs during the Horizon 
Europe progra mming period.  
 
With additional and more mature KICs, opportunities for knowledge transfer would 
increase proportionately. Based on past performance, it is estimated that between 2021 -
2027 around 3500 new products, services or processes would reach the mar ket.94   
 
It is estimated that over 2021 -2027 around 10,000 students would participate in EIT 
education  activities through the EIT label and adjacent activities, which would equip 
them with solid entrepreneurial and innovation skills. It is likely that a part of them 
would  become entrepreneurs and attract e conomic activity to regions where they are 
based, meaning agglomeration effects would continue. Currently, the ratio of student -to-
entrepreneur in the EIT is around 1.8%, meaning some  200 start -ups could be created by 
students (8 start -ups created by EIT students in 2017).  Together with the start -ups created 
as a result of KIC innovation projects, the number of start -ups supported by the EIT 
would reach almost 400.  
 
The impacts describ ed above would be visible across all the sectors in which KICs 
operate, though to different extents: the most significant impacts would be observed in 
the areas of health, raw materials, food, urban mobility, and added -value manufacturing 
as the KICs addre ssing these priority fields would all reach maturity during 2021 -2027. 
The impacts of the first generation of KICs (EIT Climate -KIC, EIT InnoEnergy and EIT 
Digital) would be expected to remain. The impacts of new KICs would be visible mainly 
in the field o f Cultural and Creative Industries – to be launched in 2022.  The impact of 
the second KIC, if launched as expected around 2025, would be marginal during the 
Horizon Europe programming period.  
                                                           
92 EIT (2017) Our Impact, p. 4, available at https://e it.europa.eu/sites/default/files/11983 -eit-
2017_our_impact_from_2010_to_2016.pdf  
93 Ibid. 
94 See output table at the end of this section  
 
43  
Students participating in EIT education activities would continue to acquire 
entrepreneurial competences, and have high employability rates 95. However, the 
systemic impact of EIT educational activities, i.e. beyond the direct KIC partners and 
beneficiaries , would remain restricted due to the lack of external quality assurance and 
limited visibility of the EIT Label.  
 
There would be no changes in the funding model. The yearly reporting of the KIC 
complementary activities, both in the Business Plans and in t he financial reports 
submitted by the KICs would continue to add significant administrative burden with no 
added value. The absence of clear rules for external co -funding will result in missed 
efficiencies and lost opportunities to establish stronger incen tives f or financial 
sustainability.   
 
Option 1 would mean a continuation of EIT administrative expenditure at current levels 
(EUR 48 million over 7 years) in line with the overall budget increase of the EIT over the 
programming period of seven years arisin g from staffing. Within this option, the staff 
provisions of the EIT and  duration of staff contracts would not be amended.   
 
6.2. Option 2  
 
The EIT would continue to support KICs and build innovation ecosystems across 
Europe . The key results of KIC activities (EIT Label graduates; start -ups created by EIT; 
new products and services on the market) would be broadly similar to the baseline given 
that the number of new KICs will be the same. However, there would be a number of 
efficiency gains resulting from the improvements related to the technical issues and the 
introduction of a co -funding model.   
 
Establishing clearer implementation measures and tools regarding openness, transparency 
and collaboration would facilitate access to KIC and CLCs96 and improve  the interaction 
with partners. This would be particularly the case for partners from modest and moderate 
innovator countries or SMEs. This would increase the likelihood of new CLCs in modest 
and moderate innovator countries for  both existing and new KICs. While difficult to 
estimate an absolute result, it is likely t hat the number of the CLC in modest and 
moderate innovator countries will at least double.  
  
The integration of the Regional Innovation Scheme in the KICs multi -annu al strategies 
and Business Plans would increase the effectiveness of EIT’s regional outreach. 
Assigning a higher budget to the RIS activities from the current average of 4.3% to at 
least 10% will also increase their impact. Stronger impact would be expecte d to 
materialise in those countries and regions that are moderate and modest innovators as the 
number of o rganisations engaged with KICs would grow and their activities would 
increase due to increased knowledge and technology transfers linked to a stronger  EIT 
regional focus.97   
 
Improving the functioning of the EIT governance would have a generally positive effect 
for the function of the EIT and the KIC in terms of effectiveness and efficiency.  
                                                           
95 See Annex 4  
96 EIT RIS innovation hubs could be seen as embryonic CLCs in RIS -eligible countries, directly sharing and disseminating KIC 
knowledge and know -how to local knowledge triangle stakeholders.  
97 Liang J. and Goetz, S. (2018), “Technology intensity and agglomera tion economies”, Research Policy  47, pp. 1990 –1995; see also: 
Apa, Noni, Orsi and Sedita (2018), “Knowledge space oddity: How to increase the intensity and relevance of the technological 
progress of European regions”, in Research Policy  47, pp. 1700 –1712  
 
44  
The change in the funding model would mean annual reporting of the KIC 
complementary activities would no longer be necessary, resulting in significant reduction 
of administrative burden. The information obligations arising from the KIC grant 
agreements (i.e. declaration of costs of associated activities) with its i ntention to show the 
financial commitment of KIC partners and its leverage effect will become redundant with 
the introduction of the new co -funding model for KICs. The alleviation of such a 
requirement on the side of the EIT as well as KICs and their partners will ease their 
resources for other tasks and improve the efficiency of the KICs operations .  
 
The introduction of explicit conditions for co-funding will lead to stronger private 
investment and external involvement . Specifically, between EUR 1500  and 1800 million 
in co -funding is expected to be  generated. This would reflect the preferences of the 
majority of stakeholders in the OPC who expressed their support to co -funding. 
Commitment from partners would further increase the likelihood of KICs to achieve 
financial sustainability in the long -run as the number of their stakeholders will grow. 
KICs are expected to adjust to the new funding model as most of them already have 
significant co -funding. Greater openness and stronger performance monitoring b y the 
governing board would contribute to raising the overall efficiency of the KIC model. In 
the case of difficulties for some KICs (for example the first generation that will stop to 
receive an EIT grant after 2024), the EIT Governing Board could introdu ce transitory 
measures.  
 
The introduction of a long -term planning perspective of innovation activities and the 
move away from the current annual granting scheme (annuality) would imply that KICs 
would offer greater legal and financial security for KIC par tners. It would also 
consolidate the innovation activities in line with the multiannual strategies adopted by the 
KIC. It would ease the administrative burden by reducing the annual reporting and would 
facilitate the assessment of the KIC performance over the long term. Generally, it would 
help to ensure business continuity.  
 
The number of start -ups generated would not necessarily increase in linear terms in 2021 -
2027, compared to the baseline. However, the higher private investment and external 
participat ion would improve the general quality of new business creation. While difficult 
to quantify, some efficiency gains are expected in terms of survival rates of start -ups and 
higher commercialisation of ideas and technological maturity (TRL98).   
 
Compliance a nd implementation costs arising from the adaptation of the funding model 
would be expected to be higher for those KICs and their partners that would have to 
adjust their established processes and operation systems, and relatively low for those that 
are at the starting phase and establishing their operation modes. However, given that 
most KICs already attract co -funding, the measure would likely increase on average the 
performance across KICs, as those lagging behind would need to accelerate their efforts 
in attracting co -funding and catch up with best practice or risk correction measures 
requested by the EIT Governing Board.  
 
The impacts described above will be visible across all the sectors that KIC operate in 
with the most significant impacts in the areas  of health, raw materials, food, urban 
mobility, and added -value manufacturing as the KICs addressing these priority fields will 
all reach maturity during 2021 -2027.  
                                                           
98 Technology Readiness Level (TRL) – a method of estimating technological maturity and capability.  
 
45  
Impact of the new Action on supporting the entrepreneurial and innovative capacity of 
HEIs  
 
On top of the KIC results, the impact of the EIT would be distinctive as a result of the 
new actions that the EIT would launch to support the innovative capacity of HEIs. The 
new EIT actions would spread best practice and help create a community of 
entrepreneurial HEIs across institutions, disciplines, countries and regions99. The social 
impact of the entrepreneurial transformation of higher education through this measure 
would be reflected by the involvement of staff, students and institutions. Provid ing 
funding for innovation capacity development of HEIs is the most popular suggestion 
among the OPC respondents in order to achieve the educational policy objective for the 
EIT.   
 
As a result of the action, around 450 HEIs and more than 20,000 students would be 
expected to participate in HEInnovate -driven in capacity development actions. 
Entrepreneurial and intrapreneurial100 activities in the participating HEIs would lead to 
higher levels of economic activity, particularly in modest and moderate innovator  
countries, given the open nature of the annual calls and the earmarked budget (25% of 
the action budget would be allocated to projects led by partners from modest and 
moderate innovator countries). The illustration below provides an overview of the key 
assumptions behind this actions.  
 
 Total budget of this action is around 420 Million, or 60 Million per year  
 Annual calls for projects including at least 3 HEIs and an average budget of max 
EUR 3 million per project  
 Each HEI will involve at least 50 s tudents in the capacity building action  
 23 projects per year leading to ~150 projects in total (2021 -2027)  
 150 projects with at least HEIs each means 450 HEIs (involving at least 50 
students each) means at least 22500 students (2021 -2027)  
 At least 25 % of projects would directly involve partners from moderate and 
modest innovator countries, i.e. 25% of 450 HEIs, or ~110 HEIs  
 Overall participants from moderate and modest innovation countries, i.e. 200 
(current RIS) and 200 (future RIS) and at least 11 0 (HEIs projects)  
 
Table 13: Assumptions behind new action supporting the innovative capacity of HEI; own illustration  
 
It is realistic to assume that at least 15% of all EU HEIs would be reached through the 
HEInnovate capacity development actions (450 in total over 7 years from around 3300 
HEIs in the EU) over the 7 years.  The impacts would be visible in both economic and  
social terms through teaching, research, and entrepreneurial activities.101 More 
                                                           
99 E.g. HEinnovate country reviews which demonstrate the importance and the challenge for HEIs to develop their entrepreneurial 
and innovation capacity. The r eports show that pioneering initiatives emerge in a number of HEIs, but need to be broader, more 
systematic and taken forward by HEI leaders in collaboration with key stakeholders. The reviews are available at 
www.H EInnovate.eu .   
100 Intrapreneurship is the act of behaving like an entrepreneur  while working within a large organisation.  
101 Jacob, M et al.  (2003) : “Entrepreneurial transformations in the Swedish University system: the case of Chalmers University of 
Technology”, in: Research Policy  32, pp.  1555 –1568.  Also Guerrero, M., Cunningham, J. and Urbano, D., (2015), “Economic 

 
46 specifically, there is evidence that scientific productivity is positively associated with 
entrepreneurial effectiveness so participating HEIs could be expected to increase their 
scientific production levels.102  Finally, raising awareness about the entrepreneurial 
capacity of an HEI is crucial because perceiving an HEI as having a low or high 
entrepreneurial capacity has an important effect on whether an academic engages in 
entrepreneurial activities, thus influencing the overall entrepreneurial aptitude of 
academics.103 
 
 
Together with the new action, the impact of the existing EIT Label, which is awarded to 
the KIC education programmes, would increase via stronger quality assur ance 
mechanisms including external reviews. This would positively influence the recognition 
of the label outside the EIT community.  
 
Synergies and complementarities with other EU programmes and funding instruments 
would increase due to closer alignment wi th the proposal for Horizon Europe, and in 
particular Pillars II and III104.  In addition, strong cross -over synergies and 
complementarities would be expected to emerge between the Horizon Europe and the 
Erasmus+ programme as a result of the scaling up of the action supporting the innovation 
capacity of HEIs by the EIT. In budgetary terms, Option 2 would mean a re -balancing of 
the expenditure of the EIT back to around one -third of the total budget allocated to 
education (currently, only 17% of the KIC -related expenditure are spent on education, 
this would increase to around 31% with the proposed action under Option 2).  
 
Compared to the baseline scenario, Option 2 would mean an increase in EIT 
administrative costs (EUR 70 million compared to the EUR 48 millio n baseline) in line 
with the overall budget increase of the EIT over the programming period of seven years 
arising from staffing and setting up a stronger capacity and expertise in the EIT. This 
increase appears commensurate with the overall growth of acti vities and responsibilities 
of the EIT. Within this option, the staff provisions and duration of staff contracts of the 
EIT would be aligned with those of other agencies in order to ensure the continuity of the 
EIT operation.  
 
6.3. Option 3  
 
The EIT would conti nue to support KICs and build innovation ecosystems across 
Europe. Within the given budget distribution of this option only one KIC could be 
launched (in 2022). The key results of KIC activities (EIT Label graduates; start -ups 
created by EIT; new products and services on the market) would be broadly similar to 
Options 1 and 2.  
Impacts resulting from the introduction of clearer rules for transparency, openness and 
collaboration would be similar to those under Option 2. The effect from the adjustments 
in the governance of the EIT would be similar to those under Option 2 with the exception 
of introducing relevant governance provisions for the implementation of the new Action 
                                                                                                                                                                            
impact of entrepreneurial univ ersities’ activities: An exploratory study  of the United Kingdom”, in Research Policy , Volume 44, Issue 
3, April 2015, pp. 748 -764 
102 Van Looy, B., (2011), “Entrepreneurial effectiveness of European universities: An empirical assessment of antecedents and tra de-
offs”, in  Research Policy  40, pp. 553 –564.  
103 Kalar, B. and Antoncic, B.,  (2015)  “The entrepreneurial university, academic activities and technology and knowledge transfer in 
four European countries”, in Technovation  36-37, pp. 1 –11. 
104 E.g. it is expected that EIT actions will better contribute to 35% of the overall financial envelopes to climate objectives within the 
Horizon Europe.  
 
47 described below. Compliance and implementation costs arising from the adaptation of 
the funding model would be similar to those under Option 2.   
 
Impact of new EIT Hubs -related action  
 
The most significant differences in terms of impact under Option 3 would be linked to 
the creation of the EIT Hubs.  
This option would have a high impact on  the management and governing bodies of the 
EIT.  It would have significant implications in terms of human resources, budget and task 
allocations. High administrative overhead costs for the EIT would arise from setting -up, 
staffing and developing EIT Hubs,  ensuring quality of services provided, allocation of 
funds to these hubs as well as reporting to the EIT. The establishment of the EIT Hubs 
would mean that staff would need to be appointed on a permanent basis to maintain 
them. Assuming that each Hub woul d be staffed by a minimum of five persons (a head of 
the hub; three account managers for education, innovation, and entrepreneurship; and a 
communication officer), around 130 positions would have to be managed by the EIT 
structure, in addition to the resou rces needed at the EIT itself. This means that the EIT 
staff needs over the period of 2021 -2027 would be expected to more than double 
compared to Option 2.  
 
 Total budget of EIT Hubs action over 7 years = around 810 Mio  
 Set up and maintenance of 26 EIT Hubs with average administrative cost of  
EUR 600 000 per year x 7 years = around EUR 110 million;  
 Operational budget over 7 years = EUR 700 million  
(annual budget = EUR 100 million);  
 Each Hub to run annual projects promoting knowledge triangle activities with  
at least 1 HEIs, 1 Research and Technology Organisation and 1 business and an average 
volume of max EUR 3 million per project; at least 20 students to be involved per project;  
 Total number of projects over 7 years: ~ 230;  
 Total number of organisations participating in EIT Hubs activities: ~ 700  
 60% of results should be traced directly to moderate and modest innovator countries  
 700 x 60% = c. 450 institutions involved in  moderate and modest innovator countries  
 Overall participants from moderate and modest innovation countries, i.e. 200  
(current RIS) + 200 (future RIS) + 450 (HEI projects)  
Table 14: Assumptions behind new action on EIT Hubs; own illustration  
 
The imple mentation of the EIT Hubs would need to take place gradually and would 
require strong efforts at the beginning for their establishment and continuous efforts for 
their coordination   The substantial time lag between putting operational structures in 
place,  implementing tasks in regions and seeing the overall effects would significantly 

 
48 influence the perceived success of Option 3, particularly concerning the timeliness of 
impact.  
 
Knowledge triangle integration in regions would increase as a result of operat ions of the 
EIT Hubs though the annual calls.  In particular, the cooperation with education and 
training in the regional innovation ecosystems would improve, reflecting the positive 
operational experiences with the KICs. The EIT hubs would primarily serve  as  
technology transfer hubs connecting businesses and knowledge providers and ensuring 
regional outreach of successful KIC activities and experiences already existing in 
agglomeration economies.  
 
A moderate reduction in the skills gaps and skills shorta ges would be expected in the 
areas of active operation of EIT Hubs. The relative number of partners from modest and 
moderate innovator countries as compared to leading innovators in the regional 
ecosystem would increase. Job creation and revenue growth in local innovation 
ecosystem would increase marginally as a result of the activities of the EIT Hubs.  
 
 
Interaction between agglomeration economies and the proposed new EIT 
Hubs105  
Agglomeration economies, in a general sense, refer to productivity improvements 
accruing to the co -location of economic activity, typically within, and near cities. 
Economically useful innovation is centred on corporate functions such as R&D 
which are typi cally co -located with other high -value adding activities such as 
marketing, design, or IT services. Economic analysis, most recently on global value 
chains (OECD 2013; Belderbos et al., 2016), confirms that these corporate 
activities thrive in cities, wher e they benefit from large, dynamic pools of highly 
qualified professionals and a dense network of complementary services, including 
public research.  Such effects are clearly visible in the KICs.  
However, excellent research and innovation do not take plac e only in cities. 
Converging evidence (Varga et al., 2013; De Backer et al., 2017) suggest that the 
geographical distribution of business -driven research differs considerably to that of 
public research -driven science and innovation. There is evidence to su ggest that 
agglomeration is not particularly relevant for the creation of this latter type of 
knowledge (Bonaccorsi and Daraio, 2005; Varga et al., 2013).  Therefore it can be 
assumed that regional outreach activities of the EIT such as those proposed by E IT 
Hubs can help connect businesses and public knowledge providers irrespective of 
location.  
 
Table 15: Agglomeration economies and EIT Hubs, an overview of arguments  
 
As in option 2, synergies and complementarities with other EU programmes and funding 
instruments would increase due to closer alignment with the proposal for Horizon 
                                                           
105 Based on literature review of: OECD (2013), Supporting Investment in Knowledge Capital, Growth and Inn ovation, OECD 
Publishing, Paris; De Backer, K., Destefano, T. and Moussiegt, L. (2017), “The links between Global Value Chains and Global 
Innovation Networks: An Exploration”, OECD Science, Technology and Innovation Policy Papers, No. 37, April; Belderbos,  R., 
Sleuwaegen, L., Somers, D. and De Backer, K. (2016), “Where to Locate Innovative Activities in Global Value Chains: Does Co -
location Matter?”, OECD Science, Technology and Industry Policy Papers, No. 30, OECD Publishing, Paris.; Bonaccorsi, A. and 
Daraio, C. (2005), “Exploring size and agglomeration effects on public research productivity”,  Scientometrics, Vol. 63, pp. 87 -120; 
Varga, A., Pontikakis, D. and Chorafakis, G. (2014), “Metropolitan Edison and cosmopolitan Pasteur?  Agglomeration and 
interre gional research network effects on European R&D productivity”, Journal of Economic Geography, Volume 14(2), pp. 229 –
263.  
 
49 Europe, and in particular Pillars II and III.  In addition, specific synergies would be 
expected to emerge with relevant regional innovation policies such as smart 
specialisatio n strategies or the European Regional Development Fund (ERDF).    
 
Option 3 would mean an increase in EIT administrative costs (EUR 90 million compared 
to EUR 70 million in Option 2 and the baseline value of EUR 48 million), primarily in 
order to manage th e significant coordination and transaction costs incurred by the launch 
of a new Action, the EIT Hubs. Within this option, the staff provisions and duration of 
staff contracts of the EIT would be aligned with those of other agencies in order to ensure 
the continuity of the EIT operation.  
 
  
 
50 6.4. Outputs of options  
 
The following tables present a summary of the outputs of the presented options:  
 
 
Option 1 
(baseline)106 Option 2107 Option 3108 
# of HEI involved in EIT activities109  300 750110 530111 
# of students involved  in EIT activities112 10000  30000113 14600114 
# of businesses involved in EIT activities115 800 950 1030  
# of start -ups supported by EIT116  400 680 490 
# of products, services or processes on the 
market117 3500  4300  4100  
KIC partners’ co -funding in EUR million 
(2021 -2027)118 500 1800  1520  
# of participating organisations from moderate 
or modest innovator countries119 200 500 850 
Table 16: Outputs of options; own projections based on past EIT performance  
 
  
                                                           
106 All figures in baseline refer to projections based on past performance and derive from the performance achieved by the KICs i n 
2013 -2017.  
107 See Table 12 on the new action under option 2 for detailed assumptions.  
108 See Table 13 on the new action under option 3 for detailed assumptions.  
109 HEIs refer to Higher Education Institutions involved the EIT educational activities. Baseline figu re includes KIC partners.  
110 Figure includes baseline + all HEIs to participate in the new action launched under option 2.  
111 Figure includes baseline + all HEIs to participate in the new action launched under option 3.  
112 Baseline includes students partici pating in EIT Label and related activities.  
113 Figure includes students participating in the new action launched under option 2. It is assumed that 150 students are involve d in 
each project.  
114 Figure includes students participating in the new action launc hed under option 3. It is assumed that 20 students are involved in 
each project.  
115 Baseline includes business partners in KICs. Option 2 and 3 figures include, respectively business partners in actions under 
Options 2 and 3.  
116 Baseline includes start -ups supported by EIT through KICs. Option 2 and 3 figures include, respectively start -ups emerging from 
actions under Options 2 and 3. Under Option 2 at least 2 Start -ups are expected to emerge from each supported project, i.e. 280 start -
ups over 7 years. Und er Option 3 it is assumed that 1 start -up is created  per 3 projects as the focus is on knowledge triangle 
integration more generally.  
117 Baseline includes new products, services or processes brought to the market through KICs. Option 2 and 3 figures inclu de, 
respectively business partners in actions under Options 2 and 3. It is assumed that at least 3 new products/services/processe s/ideas are 
brought to the market as a result of each start -up, i.e. 840 new solutions over 7 years  
118 Baseline includes co -funding attracted at a rate of 20% (slightly higher than today).  
119 Baseline includes the number of EIT RIS partners. Option 2 and 3 include the expected number of additional partners 
participating in the actions supported by those options.  
 
51 7. HOW DO THE OPTIONS CO MPARE ?  
 
The following chapter summarises the evidence and arguments outlined above and 
presents the effectiveness, efficiency and coherence of the Options. It presents the risks 
associated to the Options.  
 
 
Option 1  Option 2  Option 3  
Effectiveness  0 ++ ++ 
Objective 1:  
KIC funding  No particular effect as 
business as usual will 
continue.  
 Introduction of co -funding 
rates will increase long -
term impact of investment 
and support the financial 
sustainability strategies.  Identical to Option 2  
 
0 ++ ++ 
Objective 2: 
Regional outreach  No particular effect as 
business as usual will 
continue.  New action supporting 
HEIs will positively 
impact institutions from 
countries so far not 
reached by the EIT. 
Widening dimension of the 
action will further support 
regio nal outreach.  Actions addressing the 
regional disparities in 
innovation capacity would 
be implemented through 
the EIT hubs.  T he impact 
is expected to be highest in 
regions from countries that 
are moderate and modest 
innovators.  
0 + ++ 
Objective 3: HEIs  
innovation 
capacity  No particular effect as 
business as usual will 
continue.  New EIT actions would 
create a structuring effect 
supporting the 
transformation of the HEI. 
Increased impacts through 
engagement of a high 
number of organisations 
and students.  Spill-over effects expected 
from Knowledge Triangle 
Integration projects 
supported by the Hubs due 
to the participation of at 
least one HEI per project.  
0 ++ + 
Objective 4: Other 
technical issues  No particular effect as 
business as usual will 
continue.  Significant improvements 
and adjustments resulting 
from adapting the technical 
issues.  Identical to Option 2.  
0 ++ ++ 
 
  
 
52 Efficiency  0 ++ + 
Cost -benefit of 
managing KICs  
 No particular effect as 
business as usual will 
continue.  
 Higher cost -effectiveness 
due to the establishment of 
co-funding rates, clearer 
measures for openness and 
collaboration.  
Reduction of 
administrative burden  
for KICs.  Identical to Option 2  
 
0 ++ ++ 
Cost of new 
actions  Not applicable  
 Low additional 
administrative costs due to 
use of established shared 
services (procurement, 
project management, IT, 
legal).  
 Increase in the capacities 
of the EIT, its staffing 
levels as well as the 
overhaul of its operational 
systems to manage EIT 
Hubs w ill incur significant 
costs. Administrative 
burden on the EIT and its 
regional operational hubs 
will increase. Given the 
ratio of spending moving 
towards the EIT hubs 
operation and their 
relatively marginal role in 
contributing to the 
objectives, the overa ll 
efficiency of spending will 
decrease.  
 0 - -- 
Administrative 
burden  Significant as no 
mitigations measures  
are taken  
 Decrease in the 
administrative burden due 
to introduction of co -
funding model and clearer 
measures on openness, 
transparency  
With regard to new action 
supporting HEIs, no 
significant burden as 
shared services of the EIT 
will be used.  Identical to Option 2.  
 
 
 
With regard to EIT Hubs, 
administrative burden is 
likely given the need to 
establish new structures.  
0 ++ + 
 
  
 
53 Coherence  0 ++ + 
Horizon Europe 
coherence  Alignment with European 
Partnerships; EIC; 
Strategic Planning Process.  
 Similar to baseline.  
 
High coherence with 
Horizon Europe mandate 
for the EIT in terms of 
education.  Similar to baseline.  
 
Role of EIT in tackling 
regional disparities. 
However, possible 
ambiguities between 
excellence and cohesion 
principles.  
0 ++ + 
Synergies with 
other EU 
programmes or 
policies  No particular effect as 
business as usual will 
continue.  
 Strong synergies with 
other Commission 
initiatives (e.g. 
HEInnovate, smart 
specialisation strategy).  Strong synergies through 
alignment with smart 
specialisation strategies via 
EIT Hubs.  
0 ++ ++ 
Table 17: Comparison of options. Key: The Options are rated according to their impact. Policy Option 1 
(baseline scenario) is set to zero and the impacts of the rest of the policy Options on the stated/foreseen 
KPIs are expressed as net changes compared to it, i.e. + positive effect, ++ significantly positive  effect, - 
negative effect and – significantly negative effect.  
Source: own analysis  
 
7.1. Risks associated with policy options  
 
There are risks associated with all options that are set out in Table 17 below.  The 
analysis is conceptual and based on qualitativ e assessment. It covers economic, consumer 
welfare, environmental quality and health risks. Due to the nature of the policy there will 
not be any particular health or environmental risks. Risks to consumer welfare are also 
considered to be low as it is dee med unlikely that the options will reduce the availability 
of goods or services, or make those available significantly more expensive. There are 
three principal economic risks:  
 
Risk of closed ecosystems – i.e. the establishment of KICs as integrated lega l entities 
leads to collusive behaviour between partners involved in the KIC. Such risk has a low 
probability with a potential moderate impact on economic welfare. A related risk is that 
EU actions in this area could distort markets if EU funds simply subs idise activities 
which would have occurred anyway and thus ‘crowd out’ private sector investment. This 
risk is estimated as high with a moderate impact on net economic welfare. Due to these 
dead -weight risks the overall risk of market distortion is moderat e with a potential 
moderate impact on economic welfare. The risk can be mitigated with increased 
openness and transparency of KICs.  
 
Risk of disparities in economic growth due to EU support for KICs – i.e. supporting the 
development of a limited number of  centres of excellence would enhance their 
economies and create positive externalities leading to the increased growth of these 
centres compared to other parts of the EU. The probability of this occurring is high whilst 
the magnitude of the effect on dispa rities in economic growth is likely to be moderate, all 
other things being equal. The establishment of integrated entities of firms and institutions 
of higher education and research could also create barriers to new market entrants in 
locations outside the  centres of operation. This would be due to a more difficult access of 
external institutions and actors to knowledge, talent and finance. The probability of this 
occurring is high with effects of moderate magnitude if realised.  
 
 
54 This risk can be mitigated  through measures under Option 2 and 3 (deepening the 
Regional Innovation Scheme, the set up of new actions to support the entrepreneurial 
capacity of HEIs across the EU and the establishment of EIT Hubs) and boosting the 
dissemination of best practices be yond the EIT and KIC Communities.  
 
Risk of KICs not reaching financial sustainability. The probability of this occurring is 
high whilst the magnitude of the economic effect on existing innovation ecosystems will 
be considerable. A continued low level of pr ivate funding may provide disincentives to 
KICs pursuing financial sustainability. Unclear guidance on the future relationship 
between EIT and KICs that stop receiving EIT grants after 15 years may further increase 
the risk. Potential future benefits and g ains from long -term investments made by the KIC 
over their programming period may be forfeit. The risk can be mitigated with the 
introduction of specific co -funding rates that will increase private investment and with a 
clearer model for the future relatio nship between EIT and KICs that cease to receive 
funding from the EIT. Guidance from the EIT is also important - evidence suggests that 
the second and third generation of KICs incorporate financial sustainability objectives 
more effectively than the first generate of KICs.  
 
Risk  Probability  Magnitude  
Consumer welfare  Low Slight  
Negative health impacts  Low Slight  
Environmental degradation  Low Slight  
Economic well -being  Moderate  Moderate  
Collusive behaviour  Moderate  Moderate  
Deadweight  High  Moderate  
Disparities in economic growth  High  Moderate  
Agglomeration economies  High  Moderate  
Barriers to market entry  High  Moderate  
 
A potential risk is one of incomplete, or no policy implementation.  It is possible that 
calls for proposals for future KICs would  not attract interest. However, based on current 
experience this is unlikely. Currently, there seems to be sufficient demand in consortia to 
apply for new KICs.120  
 
  
                                                           
120 In the 2018 call  for new KICs there were 6 and 4 proposals for Urban Mobility and Added -Value Manufacturing, respectively.  
 
55 8. PREFERRED OPTION  
 
The baseline would see a business as usual with essential but limited adjustments of the 
EIT into the Horizon Europe framework but without addressing the problems the EIT 
faces.  Options 2 and 3 would address the identified problems, respond to the Horizon  
Europe ambitions in terms of education and regional outreach and include adaptations 
and improvements to address the technical issues identified.   
 
Option 2 would see a concerted action by the EIT aimed at supporting the development 
of innovative capacity of HEIs that would lead to economic and social spill -overs and 
higher competitiveness. This would come at a relatively low cost and by using the 
existing administrative capacity of the EIT and economies of scale to a considerable 
extent. Involving HEIs from across the EU through the new Action would contribute to 
mitigate the unbalanced strengthening of existing centres of excellence at the expense of  
regions from countries with modest or moderate innovation performance.  
 
Stronger openness and transparency measures would help to unlock the innovative 
potential in a wide range of organisations. Sharing knowledge and expertise in a targeted 
way beyond K ICs would further add EU value. The introduction of co -funding would 
lead to greater levels of private investment in KICs and enhance the promotion of new 
business development and creation. This would increase the potential of reaching the EIT 
financial su stainability objectives in the medium - to long -term. There would be 
improvements in the regional outreach due to the integration of RIS in the KIC strategies 
and an increased RIS budget.  
 
Option 3 in comparison would see the EIT increasing its regional out reach to local 
innovation ecosystems via a distributed network of EIT Hubs that support small -scale 
knowledge triangle integration projects. This would gradually lead to knowledge spill -
over effects resulting in increased innovative behaviour of participat ing institutions. 
However, the relative cost of achieving this would be significantly higher than in Option 
2. The impact of the regional outreach would be likely to occur only in the long -term due 
to the time lag between set up of EIT Hubs and any activit ies they would support. The 
financial and administrative resources required for setting up the structures to implement 
Option 3 would be high. Finally, the administrative burden created from the 
implementation of this Option in multiple locations and the n eed to coordinate at a 
centralised EIT level would not be commensurate to the potential benefits within the 
proposed budget.  
 
Based on the assessment of impacts presented above, Option 2 represents the most 
suitable way to implement the objectives of the initiative while offering the highest 
impacts. It would allow for a targeted and proportionate action, amounting to an 
incremental strengthening of the intervention alongside reinforced legal certainty. Option 
2 would be a significant improvement over the baseline Option, it would reflect well the 
stakeholders views and could be implemented within the suggested timeframe. Particular 
attention has been paid to the contribution of each Option to the attainment of the overall 
delivery of EU priorities as set i n the Horizon Europe proposal and the role of the EIT in 
that programme, while also comparing their effectiveness, efficiency and coherence.  
 
  
 
56 8.1. Implications of the preferred Option for the EIT Regulation and the SIA  
 
EIT Regulation  
 
A clear objective of the amendment to the EIT Regulation through the recast legislative 
technique would be to ensure greater legal certainty and stability of the Regulation in 
accordance with the Commission’s better regulation and law -making principles121 in 
terms of structure a nd legal drafting. This would enable the EIT Regulation to focus on 
the main principles of the functioning of the EIT/KICs and, at the same time, facilitate 
the application of its provisions.   
 
In light of the above, the recast EIT Regulation would be tim e-neutral and principle -
based. This would be achieved by putting greater emphasis on the principle -based 
approach in the EIT Regulation, avoiding maximum harmonization and focusing on 
necessary provisions enabling the functioning of EIT and KIC, and at the  same time, by 
developing and detailing these principles in the proposed new SIA. In addition, the new 
EIT Regulation would be time -neutral in the sense that the need for its amendments at the 
end of each MFF would in principle not be necessary or only min imal. It would be for 
the SIA to ensure the necessary alignments with the objectives of the European 
Framework programme for research and innovation funding the EIT, with the monitoring 
and obligations of that programme, and also to foster synergies with t he other relevant 
programmes of the respective MFF.  
 
Moreover, the EIT Regulation would be amended in order to reinforce the role of the EIT 
in developing innovation capabilities through addressing global challenges and to 
strengthen the legal clarity of i ts provisions. Additional adjustments would be needed to 
ensure compliance of the EIT Regulation with the new Commission’s Framework 
Financial Regulation.  
 
Strategic Innovation Agenda 2021 -2027  
 
The SIA will set the priorities of the EIT for 2021 -2027. It will align the EIT future 
development with the Horizon Europe general framework and ensure synergies and 
complementarities with the latter. The SIA will include the specific objectives of the EIT . 
It will propose concrete measures to enhance the transparency and openness of the KIC 
model in line with Horizon Europe criteria for European partnerships and define guiding 
principles for the role of KIC co -location centres. The SIA will set clear co -funding 
modalities for implementation by the KICs. It will provide guidance to the KICs when 
they reach the maximum 15 year limit after which the EIT grant support to the KIC will 
stop. It will include the main principles of the post -15 year relationship bet ween the EIT 
and KICs.  
 
The SIA will include clear objectives for and in particular define the new action in 
support of increasing the innovation capacity of HEIs to be launched by the EIT in the 
next programming period. It will strengthen the regional im pact of the EIT through the 
new actions and through strengthening of the RIS. The SIA will include an overview of 
the financial and human resources needed for the implementation of the EIT objectives. 
Clear monitoring and evaluation provisions will be defi ned taking into account the 
Horizon Europe framework and the EIT’s specificities.  
                                                           
121 Commission’s Better Regulation Guidelines; SWD(2017) 350 final. Interinstitutional Agreement on Better Law -Making; OJ L 
123, 12.5.2016, p. 1. Inte rinstitutional Agreement on a more structured use of the recasting technique for legal acts. OJ C 77, 
28.3.2002, p. 1  
 
57 9. HOW WILL IMPACT BE MO NITORED AND EVALUATE D? 
Monitoring and evaluation are fundamental tools in measuring the impact of the EIT and 
will be further strengthened and continuously improved over the next programming 
period. Given the nature of the knowledge triangle integration model, it will be importa nt 
to apply a monitoring framework that allows flexibility at all relevant levels (EU, EIT, 
KIC) and ensures coherence with the general objectives of Horizon Europe and impacts 
sought.  
 
Monitoring  
 
The EIT has developed metrics to measure the progress of  the KICs. Several Key 
Performance Indicators (KPIs) are applied to all KICs.122 However, the KPIs could be 
further fine -tuned in terms of the relevance of KICs' performance. There is a need for a 
balance between a clear set of EIT key performance indicators  (horizontal) to measure 
the KICs overall performance on the one hand and the KICs sector specific indicators 
(vertical) on the other. Moreover, the monitoring model and the KPIs of the EIT are 
perceived by stakeholders as too focused on input and output ( short -term measures) with 
limited attention to results and impacts123 and are not aligned with the proposed 
indicators and monitoring system of the Horizon Europe Programme, including 
monitoring aspects of the partnerships.124  
 
All inputs, outputs, results and impacts identified in this impact assessment will be 
monitored through indicators. Such indicators already exist for the majority of the 
examples. Whenever they do not exist, new indicators will be developed in order to 
enable the EIT to monitor the achievement of its objectives. The chart below provides an 
overview of how operational objectives and related indicators link to the specific 
objectives and related indicators.  
 
                                                           
122 Full list of core KPIs: ec.europa.eu/research/participants/data/ref/h2020/other/guides_for_applicants/h2020 -core-kpis-kic-eit-
2018_en.pdf  
123 E.g. ICF (2017), Evaluation of the EIT, pp. 35 -36, High Level Group on the EIT (2016), The Future of the EIT, p. 24, European 
Court of Auditors (2016), Special Report on performance of the EIT, pp. 30 and 49  and SWD on the Interim evaluation of the EIT, 
SWD (2017) 351 final, p. 44.  
124 Cf. Horizon Europe impact assessment, SWD (2018) 307; Regulation Horizon Europe, COM(2018) 435 final. Annex III.  
 
58 
Improve effectiveness and efficiency of 
EIT funding
Increase regional outreach of EIT by addressing 
regional disparities in innovation capacity across 
the EU
Increase innovation capacity of higher education by 
promoting entrepreneurial transformation of HEIs
Improve operational effectiveness and 
efficiency of EITMonitoring Indicators
Monetary value of non -EIT KIC 
funding Financial sustainability ratio
(total revenues / total expenditure )
HEIs involved in EIT and KIC 
activitiesNo. and % of organisations involved in EIT /KIC 
activities from regions outside the KIC CLC regionsNo. of participants completing 
eligible EIT programmeReduction in skills mismatches No. of product innovations launched 
Start -up creation and survival rate
Strengthen sustainable innovation 
ecosystems   across Europe
Foster innovation and entrepreneurship
 through better education 
Bring new solutions to global challenges to market 
Time to grant No. of new KIC partners every yearNo. of entities participating in 
EIT/KIC activities
Increase oppeness and transparencyOperational Specific General
 
 
Figure 10: Link betw een operational objectives and indicators to specific objectives and indicators; own 
illustration  
 
The table below provides an overview of key indicators that will be collected.  
 
General 
objective  Monitoring 
Indicator  Targets125 
2023  
2027  Sources of data / 
collection methods  Data 
availa
bility  Respons
ible 
body  Link to Horizon 
Europe impact 
pathway  
Strengthen 
sustainable 
innovation 
ecosystems and 
bring new 
solutions on the 
market  No. of product 
innovations 
(goods or 
services) 
launched on the 
market  1.500  
4.000  Annual programme / 
monitoring data  
Rolling survey of 
organisations in 
receipt of KIC 
support at set time 
intervals (i.e. 1, 3, 
years post support)  Yes 
 
No EIT Innovation -based 
growth  
Start -ups 
supported  and 
survival rate  300 
700 Annual programme /  
monitoring data  
Rolling survey of 
start-ups created as a 
result of EIT activity  Yes 
 
No EIT Innovation -based 
growth  
Foster innovation 
and 
entrepreneurship 
through 
education  Reduction in 
skills mismatches  
 
No. of direct and 
indirect jobs 
created by 
organisations 
benefiting from 
KIC support   
 
 
40% increase  
 
100% increase  Rolling survey of 
organisations/employ
ers in receipt of KIC 
support at set time 
intervals (i.e. 1, 3 and 
5 years post support)  No EIT, 
Europea
n 
Commiss
ion Strengthening the 
uptake of 
innovation in 
society  
                                                           
125 Baseline for comparison is 2020  
 
59  
Specific 
objective  Monitoring 
Indicator  Targets  
2023  
2027  Sources of 
data / 
collection 
methods  Data 
avail
abilit
y Respo
nsible 
body  Link to Horizon 
Europe impact pathway  
Increase impact 
of KIC through 
more effective 
EIT funding  Monetary value 
of non -EIT KIC 
funding  700 MEUR  
1500 MEUR  Annual 
programme / 
monitoring 
data Yes EIT n.a. 
 Financial 
sustainability 
ratio 
(total revenues / 
total expenditure 
) n.a. Annual 
programme / 
monitoring 
data Yes EIT n.a. 
Increase 
innovation 
capacity of 
higher education  HEIs involved in 
EIT and KIC 
activities  300 
750 Annual 
programme / 
monitoring 
data Yes EIT Strengthening human 
capital in R&I  
No. of 
participants 
completing 
eligible EIT/KIC 
education 
programme  10.000  
30.000  Annual 
programme/  
monitoring 
data Yes EIT Strengthening human 
capital in R&I  
Increase 
regional 
outreach  No. of 
entities/organisat
ions 
participating in 
EIT/KIC 
activities from 
regions outside 
the KICs’ CLC 
regions  50% increase  
100% increase  Annual 
programme / 
monitoring 
data Yes EIT Strengthening the uptake 
of innovation in society  
Operational 
objectives  Monitoring 
Indicator   Sources of 
data / 
collection 
methods  Data 
avail
abilit
y Respo
nsible 
body  Link to Horizon 
Europe impact pathway  
Improve 
operational 
effectiveness 
and efficiency of 
EIT Time to grant  n.a. Annual 
programme / 
monitoring 
data Yes EIT n.a. 
Increase 
openness and 
transparency  No. of 
entities/organisat
ions 
participating in 
EIT/KIC 
activities  20% increase  
50% increase  Annual 
programme / 
monitoring 
data Yes EIT Innovation -based growth  
      
Table 19: Specific and operational objectives to be monitored by indicators; own illustration  
 
In parallel and in full compatibility with existing monitoring tools, a close alignment will 
be sought between the EIT monitoring provisions and those that are put in place for 
Horizon Europe. For example, the EIT will align its monitoring tools with the I mpact 
Pathways of Horizon Europe that seek to address the need for scientific, economic and 
 
60 societal impacts indicators more comprehensively. It will be a responsibility of the EIT to 
regularly monitor the operational performance of the KICs and to adapt its monitoring 
and reporting systems continuously. The results of such monitoring will feed into the 
business planning processes of the KICs an d into the EIT decision -making on the 
allocation of the budget and preparation of the framework partnership agreements with 
the KICs as beneficiaries. The monitoring results should feed continuously into the 
policy -making process.   
 
Evaluation  
 
The evalu ation of the performance of the EIT will be carried out by the Commission in 
line with the requirements of the EIT Regulation and will feed into the overall Horizon 
Europe programme evaluation that will be carried mid -term and ex -post. This will 
include an  assessment of the synergies of the EIT with the other instruments of the 
programme.  
 
With regard to the KICs, a specific indicator framework will be used to assess the 
performance of the KICs during the next Strategic Innovation Agenda (2021 -2027). The 
framework draws from current and previous indicators, fills gaps and deficiencies 
identified in the existing performance measurement system and is aligned to the Horizon 
Europe indicator framework. While this is still in development, some key parts are 
outlined in more detail in Annex 8. Further work on evaluation will be pursued with the 
JRC's Competence Centre on Microeconomic Evaluation.  
  
 
61 10. ANNEXES  
10.1. Annex 1:  Procedural information  
Lead DG, D Ecide Planning/CWP references  
 
The work on the impact assessment was led by the Directorate -General for Education, 
Youth, Sport and Culture (DG EAC) which is responsible for the coordination of the 
activities related to the functioning of the EIT.  
 
The Impact assessment supports two De cide Planning initiatives as follows:  
 
 EAC - PLAN/2017/987 - Amendment of the Regulation on the European Institute 
of Innovation and Technology (EIT)  
 
 EAC - PLAN/2017/1516 -  Strategic Innovation Agenda for the period 2021 -2027 
of the European Institute of  Innovation and Technology (EIT)  
 
Organisation and timing  
 
The impact assessment covers all the elements needed for (1) the EIT Regulation revision 
and (2) the SIA 2021 -2027, i.e. the EIT vision, mission, objectives, governance and 
operation model as well as funding model.    
Both the revisions of the EIT Regulation and the SIA are part of the wider Horizon 
Europe process and hence the timely adoption of both initiatives is of utmost importance.  
The Impact assessment steering group (IASG) was established in January 2018 and held 
five meetings to steer the various phases of the process including the preparation of the 
Open Public Consultation (OPC).  
 
The Commission’s adoption of the proposal for a  new Strategic Innovation Agenda (SIA) 
for the EIT for the period 2021 – 2027 as well as the amendment of the Regulation on the 
EIT are expected in May 2019.  
 
Consultation of the RSB  
 
The Impact Assessment Report was submitted to the Regulatory Scrutiny B oard on xx 22 
January 2019 and discussed at the meeting of the Board on 13 February 2019. The Board 
issued a negative opinion on 15th February. The impact assessment report was revised 
taking into account the Board’s comments and recommendations.  
 
The foll owing table explains how the Board's recommendations have been addressed in 
the revision of the report.  
 
  
 
62 Main RSB considerations  Measures taken and the changes 
introduced in the revised IA report  Where  
1. The report does not explain what 
still needs to be decided and what 
is covered under Horizon Europe.  
 
 
 
 It is also unclear which elements 
pertain to the new SIA and the 
amended EIT Regulation, 
respectively.  The report has been revised to explicitly 
state what decisions on the future of the 
EIT have already been made in the 
Horizon Europe proposal and what issues 
are left for the EIT Regulation and SIA.  
 
The report now contains clarifications as 
regards the scope of the impact 
assessment, the legal and operational 
context of the EIT and KICs and how the 
EIT Regulation and the SIA link to the 
Horizon Europe programme.  Chapter 1.3. and 
1.4 
 
 
 
 
Chapter 1.4. and 
1.5 
2. The report does not provide 
evidence that demonstrates the 
need to act on alleged problems.  
 
 
 
 
 
 
 
 
 
 
 The problem definition has been 
restructured and additional evidence on 
problems, drivers and effects has been 
added.  
 
The core problems have been identified as  
(i) suboptimal funding model  
(ii) limited impact of EIT’s 
educational activities  
(iii) limited impact of EIT’s regional 
outreach  
 
To better illustrate the linkages and 
relations, a problem tree (Figure 4) with 
drivers and consequences has been added.  Chapter 2  
 
 
 
 
Chapter 2.1. -2.3 
 
 
 
 
 
 
Chapter 2.5.  
 
 
3. It is also not clear how the options 
respond comprehensively to the 
reported problems.  An intervention logic (Figure 7) has been 
added to explain how problems are 
addressed. The three options address all  
identified problems, but to a different 
extent.  Chapter 5.4.  
4. The report does not explain why 
the reallocation of funds works in 
opposite directions for different 
options, nor does it explain what 
the regional hubs achieve.  The chapter on impacts provides additional 
argumentation on the effects of the 
reallocation of funds proposed under 
option 3. The same section incudes a brief 
discussion on agglomeration economies in 
the context of option 3.  
 
Additional details have been added on the 
functions of the EIT Hubs.  Chapter 6.3  
 
 
 
 
 
 
Chapter 5.3  
  
 
  
 
63 RSB further considerations and 
adjustments required  Measures taken and the changes 
introduced in the revised IA report  Where  
1. The report should better explain 
what the Commission  needs to 
decide at this stage. It should 
clarify the urgency to act and 
coherence with other initiatives. 
The elements already covered 
under the Horizon Europe proposal 
should come out more clearly. 
Also, the policy context should 
explain the alignment wi th the 
priorities and strategic planning of 
the programme. In particular, the 
report should clarify the timing and 
coherence between the choice of 
additional KICs in the SIA and the 
ongoing strategic planning process 
of Horizon Europe. It should 
acknowledg e any possible risks in 
this respect. It should better 
delineate between the content of 
the SIA and the EIT Regulation.  Decisions made and to be made with 
regard to the EIT have been explicitly 
outlined.  
 
An explanation of the need to act has been 
added.  
 
The introduction has been restructured to 
include the policy context and the strategic 
planning process (SPP) of the Horizon 
Europe programme, its scope, timing as 
well as the approach of aligning the 
EIT/KIC priority areas in the new SIA 
proposal with t he SPP of the Horizon 
Europe. Risks were clearly identified. A 
clearer delineation between SIA and 
Regulation was added.  
 
 Chapters 1.4 and 
1.5  
 
 
 
Chapter 1.5  
 
 
 
Chapter 1.3 and 
1.4 
2. The intervention logic should show 
how the identified problems get in 
the way of achieving the policy 
objectives, and how measures 
contained in the alternative options 
would resolve this. The report 
should better explain why the 
problems require a legislative 
solution. It should better use the 
available evidence, e.g. the in terim 
evaluation and the Court of 
Auditors report. The problems and 
their magnitude need more in -depth 
analysis, notably in the areas of 
education and regional outreach. 
Other relevant problems need 
assessment, such as administrative 
costs or burdens for S MEs. The 
section should also better outline 
the problems specific to KICs, 
especially the choice of new ones.  The problem definition has been 
restructured. Core problems have been 
identified. Additional evidence on 
problems, drivers and effects have been 
added. A problem tree has been added.  
 
The remaining issues (e.g. openness, 
transparency, KICs collaboration, EIT 
governance) that need to be addressed 
through legislative changes or technical 
operational adjustments are brought under 
the separate heading of “technical issues”.  
 
The chapter presents a summary of how 
problems and technical issues can be 
tackled through the available instruments, 
i.e. legislative changes or technical 
adjustments in the current legislative base 
in order to increase EIT’s effic iency, 
effectiveness and overall coherence, 
whenever applicable in combination with 
operational and managerial measures.  
 
The intervention logic has been revised 
and the relations between  problems 
identified and objectives to be achieved are 
now made clea rer. 
 Chapter 2  
 
 
 
 
 
Chapter 2.1. - 2.3 
 
 
 
 
 
 
Chapter 2.4  
 
 
 
 
 
 
 
 
 
  
 
64 3. Based on the improved 
description of the scope of this 
initiative, the baseline should 
include all elements that the 
Horizon Europe proposal has 
already determined. It should not 
assume elements which are still 
undecided. It should explain the 
consequences of not acting.  The baseline option has been revised to 
clearly represent the continuation of EIT’s 
activities as they are today with essential 
adjustments necessary to align it with the  
Horizon Europe framework programme. 
These include in particular collaboration 
and synergies with relevant Horizon 
Europe, alignment with the Strategic 
Planning Process of Horizon Europe, and 
synergies with the European Innovation 
Council.  
 
The consequence s of not acting are 
explained in the introductory chapters.  Chapter 5.4  
 
 
 
 
 
 
 
 
 
 
 
Chapter 1.5  
 
4. The options should contain 
alternative solutions to the 
identified problems and for the 
decisions to take, such as the 
choice of themes for new KICs. 
The report should make clear 
what measures are contained in 
each option, and how they would 
tackle the problems in practice. 
The options should explore 
alternative uses of the available 
budget. In particular, they should 
better explain alternatives 
regarding t he number, funding 
and management of the KICs 
and of centralised EIT actions. 
They should also explain how 
incentives would result in 
adequate private co -financing. 
The report should report on the 
opinions of stakeholders on the 
options.  The policy options  have been  
differentiated further and additional 
clarifications on the individual elements of 
each option have been added.  
 
See also point 3 above.  
 
The report makes clear what measures are 
contained within each option and 
distinguishes more clearly between them 
in terms of KIC activities (no. of new 
KICs), EIT horizontal activities and 
budget allocation for these.  
 
Option 2 comprises the direct suppo rt 
actions for entrepreneurial and innovative 
capacity development of HEIs and 
introduces the key assumptions and 
rationale for the action.  
 
Option 3 key feature is the creation of EIT 
hubs in all MS as a main instrument to 
achieve EIT operational and spe cific 
objectives. The key assumptions and 
rationale for the EIT Hubs are explained.  
 
All options are presented with their 
proposed budgets.  
 
The report further explains how incentives 
would result in private co -financing and 
lists also mitigation measure s.  
 
The inputs into the individual options in 
terms of budget are provided. The 
differentiation for each option is made 
clear as regards the administrative budget, 
the budget to KICs and the budget to 
horizontal EIT activities.  
 
Intervention logic charts  are added to 
outline the links at different levels (i.e. 
between problems, objectives and 
options).  Chapter 5.3.  
 
 
 
 
 
 
Chapter 5.3  
 
 
 
 
 
 
Chapter 6.2.  
 
 
 
 
 
Chapter 6.3.  
 
 
 
 
 
Chapter 5.3  
 
 
Annex 10 + Chapter 
5.3.3.  
 
 
Chapter 5.4.4.  
 
 
 
 
 
 
Chapter 5.4  
5. The report should better explain 
what the probability of success The impact chapter of the report has been 
revised in order to better capture the Chapter 6  
 
 
65 is under each option. It should 
better analyse all relevant 
impacts, including regulatory 
costs and benefits, social 
impacts, and impacts on SMEs. 
The report should clarify the 
expected societal return of the 
different options, including the 
regional outreach. It should 
examine whether regional 
outreach might conflict with 
agglomeration economies in 
creating knowledge. How the 
report arrives at the preferred 
option should come out more 
clearly. Th e report should use 
clear criteria to compare across 
the alternatives.  relevant impacts including the regulatory 
costs and benefits, social impacts and 
regional outreach and i mpact.  
 
The impact analysis is based on the 
projection of the key output indicators as 
follows:  
 HEIs involved in EIT activities  
 Students involved in EIT 
activities  
 Businesses involved in EIT 
activities  
 Products, services, processes or 
ideas generated  
 Start -ups supported  
 Value of KIC co -funding  
 No. of external participants as a 
measure of regional activity  
 
New set of criteria has been introduced to 
compare the options.  
(1) effectiveness in reaching the 
operational objective  
(2) efficiency, cost -benefit of 
managing KICs and cost -benefit 
of introducing new actions  
(3) coherence with Horizon Europe 
and synergies with other EU 
programmes and policies  
Simple and user friendly comparison table 
have been introduced with qualitative 
assessment of options per criteria and 
rating s according to their impact.     
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Chapter 7  
 
 
 
6. The evaluation arrangements 
should define benchmarks for 
what success of the initiative 
would look like. In doing so, the 
report should identify 
operational objectives and link 
them with monitoring indicators.  The evaluation and monitoring part  has 
been revised.  
Specific and operational objectives have 
been linked to the monitoring indicators 
for measuring the achievements.  
Sources of data collection have been 
added and the pr ocesses of monitoring and 
evaluation as well as responsibilities of 
involved bodies were clarified.  Chapter 9  
 
 
 
7. The presentation of the report 
should be more reader friendly, 
avoiding jargon and using plain 
language. It should enable the 
reader to understand how the 
EIT works and cooperates with 
KICs. The report should be self -
standing and independent from 
annexes and external documents, 
e.g. the evaluation. The report 
could use more visual aids, e.g. a 
problem tree, illustrations and 
diagrams  The d ifferent issues in individual chapters 
have been complemented with visual tools 
(charts, graphs, tables) to allow the reader 
easily capture the complex issues.  
A native English speaker has proofread 
the document.  
The overall presentation and reading of 
the report has improved in order to reflect 
a common structure of the presentation.  
 Entire report  
Evidence, sources and quality  
 
 
66 The impact assessment is based primarily on the results of the latest evaluation, review 
and analysis done by the following studies, reports and consultations that are presented 
below:  
 Commission Staff Working Document on the Interim Evaluation of the European 
Institute of Innovation and Technology (EIT), SWD (2017) 351 final;  
 Wilkinson, C. et al. / ICF (2017), Evaluation of the European Institute of 
Innovation and Technology (EIT);  
 European Court of Auditors (2016), Special Report on the EIT  
 Report  on the strategic issues, perspectives and future of the EIT of the High 
Level Group set up by Commissioner Tibor Navracsics (published in 2016)  
 Study to support the Impact Assessment (SQW, November 2018)  
 Directorate -General for Research and Innovation  (2018), A new horizon for 
Europe. Impact assessment of the 9th EU framework programme for research and 
innovation, SWD(2018) 307.  
 
 
 
  
 
67 10.2. Annex 2a:  Stakeholder consultation activities  
Annex 2A provides a brief synopsis of the outcomes of the consultation activities that 
have been undertaken as part of the preparation of the impact assessment on the new 
Strategic Innovation Agenda of the European Insti tute of Innovation and Technology 
(EIT) and the revision of the EIT Regulation. Table 1 provides a short overview of the 
nature, scope and timing of the consultations and the next sections present the results.  
 
Table 1. Scope of the consultation activities  
Issue  Type of consultations  Date of consultations  
Challenges hampering innovation 
in Europe  Open Public Consultation (OPC) with 
157 responses and 14 written position 
papers  10 October –  
5 December 2018  
EIT objectives  OPC with 157 responses and 14 written 
position papers  10 October – 5 
December 2018  
EIT impact indicators  Interviews with representatives of DG 
EAC, EIT and KICs (16 in total)*  February – July 2018  
Online consultation with 
representatives of KICs (8 responses)*  April – May 201 8 
Workshop with representatives of EC, 
EIT, and KICs*  15 May 2018  
Options for improvements in 
operation of the EIT and the 
KICs  OPC with 157 responses and 14 written 
positions  10 October – 5 
December 2018  
Interviews with representatives of DG 
EAC, EIT  and KICs (23 in total)  February – September 
2018  
Workshop with representatives of EC, 
and EIT *  15 May 2018  
Stakeholder meeting – Education and 
Research Organisations/ Associations  22 November 2018  
Stakeholder meeting – Business and 
Regions Associations  29 November 2018  
Themes for the establishment of 
future KICs  Interviews with representatives of 
academia, businesses and thematic 
networks (25 in total)  February – July 2018  
OPC with 157 responses  and 14 written 
positions  10 October – 5 
December 2018  
  
* Note: Consultations have been carried out as part of the Study to support the Impact assessment on the 
Strategic Innovation Agenda of the EIT.  
 
  
 
68 Findings from the consultation activities    
Challenges hampering innovation in Europe  
The open public consultation (OPC)126 conducted by the European Commission showed 
strong agreement amongst respondents that there is scope for further reinforcing the role 
of research and innovation in Europe with a view to address global challenges. The 
majority of respondents also agreed with the following statements:  
 the European innovation ecosystem is fragmented  
 the transfer of ideas, technologies and talents from education and research into 
start-ups and techno logy is not fast enough  
 companies with potential for international growth have to cope with the 
fragmentation and diversity of national markets.  
 
The breakdown of the results by respondents from different country groups (using 
countries identified as ‘innovation leaders and strong innovators’ and countries identified 
as ‘moderate and modest innovators’), showed that the results were very similar, wi th 
both groups in agreement on many of the statements. However, respondents from 
‘moderate and modest innovators’ tend to agree more that joint activities between 
education and industry have not been sufficiently integrated within their regional and 
local ecosystems, and there is insufficient involvement of end -users and citizens in the 
co-design, experimentation and testing of innovation solutions.  
 
A high degree of consistency was also found when the statements were broken down by 
respondents distinguish ing between citizens and representatives of company/business 
organisations, academic/research organisations and others. When asked in an open -
response question about the factors that hinder active involvement in existing pan -
European innovation ecosystems,  the most common factors noted were ‘lack of visibility 
and awareness of existing innovation ecosystems and opportunities’, ‘bureaucracy and 
administrative complexity’ and ‘the barriers between nation -states’.  
 
EIT objectives  
 
The respondents to the OPC (1 57 responses and 14 written positions) provided their view 
on how best to achieve the three EIT policy objectives. The main actions identified in 
relation to the three EIT policy objectives were as follows:  
 
 Objective 1:  To foster, grow, strengthen and develop current or new sustainable 
innovation ecosystems across Europe.  
 
o Supporting the involvement of final users in the development of 
innovative solutions.  
o Harnessing the synergies among existing innovation activities at  EU and 
national levels.  
o Increasing the effectiveness of cooperation and coordination of existing 
KICs and related activities.  
 
  
                                                           
126 An analysis of the results of the OPC is provided in Annex 2B.  
 
69  Objective 2:  To improve the human capital base for innovation through 
developing talents and enhancing skills and competences, to make 
entrepreneurship and innovation culture in Europe stronger, more inclusive and 
more open, and to contribute to the entrepreneurial tr ansformation of higher 
education institutions across the EU.  
 
o Providing funding for innovation capacity development and 
rewarding/recognising universities for becoming more innovative and 
entrepreneurial.  
o Launching new actions supporting education and huma n capital 
development through the identification of future skills needs.  
 
 Objective 3: To develop and bring new solutions to global societal challenges to 
the market by integrating education, business and research, as well as other 
relevant players (such a s municipalities, civil society, large industry, small and 
medium -sized enterprises, etc.) according to the sector.  
 
o Development of new products and services, which involve all relevant 
stakeholders.  
o Making business support services widely available.  
o Incre asing support for financial and capital raising services and attracting 
private funding.  
 
 
EIT impact indicators  
 
The consultation activities occurred between DG EAC, the EIT and its KICs, and the 
Joint Research Centre of the Commission tackled two main aspects of the development 
of the impact indicator framework.   
 
First, it helped in identifying a set of key princi ples for the indicator framework  to 
follow, namely:  
 
 To maximize the consistency and coherence of the impact indicators, including, 
where possible, to introduce consistent definitions for specific indicators and a more 
harmonised approach to the measurement of impact, particularly in terms of impact 
indicators of the new Horizon Europe Programme.  
 To include a balanced coverage across the three levels of impact: 1) economic 
development (e.g. jobs, economic growth), 2) innovation and education syste m 
effects (e.g. capacities to innovation, collaborations, networks, and ecosystem effects) 
and 3) societal benefits (e.g. to cover the foci of KICs, such as on climate, health, 
energy etc.).  
 To address prevailing gaps in the existing core indicator set, in  particular to address 
the outcomes and the longer -term impacts, as well as the effects on different regions.  
 
Second, a set of aspects to be duly taken into account to best meet the different 
stakeholders’ perspectives on the impact indicators. The follow ing four key points were 
pertinent in developing the final set of recommended indicators.  
 
  
 
70  Clarifying the core purpose of the Indicator Framework – i.e. to provide evidence 
about the long -term socio -economic impacts of the KIC model but also to 
acknowled ge the role of initial indicators as per the results chain (or logic chain) in 
terms of how these impacts are brought about.  
 Acknowledging the challenges to decide on resource allocation using long -term 
indicators – i.e. KICs contribute to long -term effect s but should not be accountable 
for them.  
 Some expected outcomes/impacts do not fit easily within the indicator framework 
and would be best assessed through multiple methods of research (rather than single 
indicators), and in particular through evaluative research where a degree of 
judgement will be required.  
 Challenges to provide evidence about the causality and attribution in the indicator set, 
and the importance of evaluative research for helping to test causality, or at least the 
contribution of the KIC  model and KIC activities to outcomes and impacts.  
 
The subsequent workshop, survey and consultations with stakeholders on the impact 
indicators were used to gather further feedback, in particular on the perceived importance 
and value of different indicators, and the specific challenges and possible solutio ns in 
defining and measuring certain indicators. The results were fed into the refinement and 
finalisation of the recommended indicator set.   
 
Options for improving the operation of the EIT and the KICs  
 
The respondents to the OPC provided their views on the most important aspects for 
ensuring the financial sustainability of KICs. According to them, a robust financial 
strategy for a KIC from the outset and continuous monitoring and evaluation of its 
implementation would be the best strategy.  
 
With regard to the criteria for selecting and implementing new KICs the prevailing views 
point to the societal impact of the proposed activities, including their potential to address 
the Sustainable Development Goals.  
 
The main points raised by the representatives of the university/research associations 
and organisations highlight the negative cost -benefit ratio for a university involvement  
in a KIC and the ineffectiveness of too many currently existing  university labels. They 
also point to  1) the need to make the cond itions for university participation simpler and 
more enabling, and 2) the importance of the regionalisation of universities and their link 
to Smart Specialisation Strategies. In addition, academic stakeholders consider that EIT 
educational activities shoul d be complementary and build on already existing experience 
of innovative universities  with regard to collaborative research, problem based learning, 
developing entrepreneurial courses, creation of incubators with regional authorities and 
companies, etc. M any of them also stressed the limited involvement of KIC partners in 
KIC educational activities and the need for more integrated system that would allow 
innovative educational institutions to participate in KICs  on an informal and simplified 
basis.  
 
  
 
71 The main issues raised by the representatives of business and regional associations  
related to the necessity of linking the EIT and KIC activities to the regional and local 
Smart Specialization Strategies including the unmet potential for synergies with other  
funding opportunities ( ESFI, regional/local funds). Representatives of business 
associations pointed out, in particular, to the need to make KICs more open and more 
easily accessible by potential partners. Furthermore, involvement of all (big and small) 
companies is considered important. With regard to education, the prevailing views are 
that the HEIs  should play a key role for a more entrepreneurial environment in Europe.  
Last but not least, emphasis is put on the lack of ambition of the EIT as an institu te, in 
view of the need to further develop its model, to scale up the good lessons learned and to 
better exploit the critical mass attained.  
 
The interviews with representatives from the EIT, KICs, European Commission, 
European Parliament and Academia, as  well as the stakeholder workshop, provided input 
on the challenges to the current EIT/KIC model and the options for improvement which 
has been incorporated in the Impact assessment report.  
 
Possible themes for future KICs  
  
The interviews with representat ives of academia, businesses and thematic networks 
focused on the feasibility and relative merits of setting up future KICs in the following 
possible areas  taking also into account the proposal of the EIT Governing Board: Security 
and Resilience ; Inclusion , Integration and Migration ; Water, Marine, and Maritime ; 
Cultural and Creative Industries . The prevailing opinion of the interviewees is that the 
EU has competitive advantage and can deliver further economic growth within all these 
areas due to its strong  R&I base. Furthermore, the KIC model is perceived to be well 
suited to addressing bottlenecks for innovation in relevant industries and thematic areas.  
 
The respondents to the OPC also suggested other themes such as artificial intelligence; 
mobility; cul tural and creative sectors; sustainable development; and transport.  
 
With regard to the criteria for new KICs the following were particularly identified:  
 
 New KICs should have the potential to enhance the wider EU economic 
competitiveness without being li mited to a specific economic sector (e.g. 
sufficient water availability and security is required for many sectors to prosper). 
KICs should also aim to contribute to the evidence -based decision making in 
public and private sectors, and contribute to EU poli cy objectives, in particular to 
sustainable development and quality of life.  
 
 The implementation of new KICs should address the geographical disparity in 
economic, innovation and social terms so that the benefits of KICs activities 
could be distributed equally among European regions.  
 
 
 
 
  
 
72 10.3. Annex 2b:  Public consultation - Synopsis Report  
 
The Open Public Consultation (OPC) was run as a component of the European 
Commission’s broad -based Impact assessment to support its proposals for revision of the 
Regulation establishing the European Institute of Innovation and Technology (EIT) (EC 
No 294/2 008) and adoption of a new Strategic Innovation Agenda of the EIT for 2021 -
2027.  
 
The purpose of the OPC was to gather information, opinions and views from a wide 
range of stakeholders on 1) the challenges and opportunities in the European research and 
innovation area, 2) the policy objectives of the EIT, and 3) the policy options to tackle 
the challenges. The OPC provided an opportunity to ‘open up’ the data collection 
exercise to a broad community of individuals and organisations, and give them the 
oppor tunity to provide input to the evaluation.  
 
The OPC was managed by DG EAC in line with the principles for consultations set out 
by the Commission’s Better Regulation Guidelines – i.e. participation, openness and 
accountability, effectiveness, and coherence . 
 
Consultation questionnaire design  
 
The OPC consisted of a structured questionnaire designed by the Commission Services 
and was accessible for completion online (via the EUSurvey platform). The majority of 
the questions were closed and provided a number of opportunities for the respondents to 
provide more detailed open -ended comments. To encourage a good response rate, the 
length of the questionnaire was kept short, covering 20 questions in total. It consisted of 
an introductory part (details on the respo ndents), and three thematic parts - on challenges 
and opportunities , policy objectives , and options . In addition to responding to concrete 
questions, the respondents had an opportunity to also submit separate written 
contributions.  
 
Sample design and questionnaire distribution  
 
The OPC was launched on 10 October 2018 and closed on 5 December 2018. It was open 
to anybody interested in sharing their opinion on the topic. The consultation was 
primarily accessible via the European Commission’s dedicated pu blic initiatives webpage 
and was promoted via the European Commission’s standard channels for running a 
public consultation.  
 
The OPC received the following responses:  
 
 157 completed questionnaires  
 14 written positions127 – two of these were specific propo sals for particular 
themes to focus on in the future. The remaining 12 provided further detail in line 
with the points raised in the online questionnaire and/or advocated the specific 
role(s) that different communities/groups/organisations could play.  
 
  
                                                           
127 There were 16 written  documents, though two of these duplicated the online responses to the open questions.  
 
73 The response rate is consistent with what would be expected for an OPC carried out as 
part of an evaluation exercise.  
 
Data analysis  
 
Both the quantitative and qualitative data from the OPC were analysed. The analysis of 
the results is based on the follow ing considerations and analytical protocols:  
 
 The data were anonymized with only the key characteristics (e.g. organisation 
type, and level of innovativeness of the country of residence of the response) 
being attributed to the responses.  
 The relatively small sample size did not allow for a quantitative disaggregation by 
country of origin of the participants.  
 Where relevant, quantitative data were disaggregated between: i) respondents 
from leading innovators and moderate innovators; and ii) type of organi sation 
respondents represented. However, these disaggregated results need to be treated 
with some caution as well given the small sample sizes. The following analysis 
points out where substantial differences between respondents form different types 
of orga nization appear.  
 
Results of the OPC  
 
Types of respondents  
 
As Figure 1 shows, the most common types of respondent to the OPC were those 
replying in their private capacity as EU-citizens  (32% of all respondents) and those 
responding as representatives of an academic or research organisation  (32%).  
Business organisations  made up 16% of respondents. The ‘other’  category includes a 
mix of representatives from public authorities, non -governm ental organisations, 
environmental organisations and non -EU citizens. Five responses were submitted on 
behalf of KIC organisations.  
 
Figure 1. The type of the organisation that respondents represented  
 
Q: I am giving my contribution as:  
 
Base: all partic ipants (N=157)  
Source: Open Public Consultation  
 
 
  32%  
32%  20%  16%  
EU citizen Academic/research organisations
Other Company/business organisation
 
74 Size of organization or institution  
 
Figure 2 shows the types of organisations represented in the consultation. For those 
responding on behalf of organisations, more than half (56%) participated on behalf  of a 
large organization (i.e. 250 or more employees). The remainder were split fairly evenly 
between micro, small and medium -sized entities.  
 
Figure 2. The size of the organisation that respondents represented  
Q: Organisation size  
 
Base: all participan ts responding on behalf of organisations (N=101)  
Source: Open Public Consultation  
 
 
Country of origin of respondents  
 
As visible from Figure 3 below, the two countries with highest number of respondents 
were Belgium (15%) and Germany (12%). These were followed by France and the 
Netherlands, accounting for 9% and 8% of all respondents respectively.  
 
Figure 3. Country of origin of respondents  
Q: Country of origin  
  
Base: all participants (N=157)  
Note: ‘Other’ includes countries with one respondent (Latvia, Malaysia, Austria, India, Egypt, Lithuania, China, Brazil, 
and Ireland) ; Source: Open Public Consultation  
 
 17%  15%  12%  56%  
0%10%20%30%40%50%60%
Micro (1 to 9
employees)Small (10 to 49
employees)Medium (50 to 249
employees)Large (250 or more)15%  
12%  
9% 
8% 
6% 
6% 
6% 
5% 
5% 
4% 
4% 
4% 
3% 
2% 
2% 
2% 
1% 
1% 
6% 
0%2%4%6%8%10%12%14%16%
 
75 Questions on challenges and opportunities in the European innovation area  
 
The open public consultation included questions on the challenges and opportunities in 
the European innovation area. The former category included a set of statements related to 
structural weaknesses that have been identified as hampering innovation in Euro pe. 
Respondents were asked to rate these on a scale from strongly agree  to strongly disagree .  
 
In the present section, the results are firstly presented in aggregate, before providing 
analysis by country groups (‘innovation leaders and strong innovators’ and ‘moderate 
and modest innovators’) and respondent type (EU citizens, a company/business 
organisation, an academic/research organisation or other). After the statements, the 
respondents were provided with two open -response questions to share views/feedba ck on 
the factors that hinder active involvement of interested parties in existing pan -European 
innovation ecosystems and other challenges and opportunities in the research and 
innovation area that are relevant to the operations of the EIT. The analysis of  these open -
response questions can be consulted at the end of this section.  
 
Aggregate results  
 
The results show that almost all (96%) respondents agreed  or strongly  agreed with the 
statement that “there is scope for further reinforcing the role of researc h and 
innovation in Europe to address global challenges” . The majority of respondents also 
agreed with statements about the fragmentation of the European innovation ecosystem  
(85%), the slow transfer of ideas, technologies and talents from education and 
research into start -ups and technology  (84%) and the issue of companies with the 
potential for international growth facing the fragmentation and diversity of national 
markets  (78%).  
 
At the other end other scale, over a third (34%) disagreed  or strongly disa greed  with the 
statement that “there are not enough measures supporting entrepreneurship in 
Europe”  whilst over a quarter (26%) disagreed  or strongly disagreed  that there are 
insufficient training opportunities in Europe to become more entrepreneurial and 
innovation -minded . Nevertheless, although both statements received the greatest levels 
of disagreement from respondents, the majority of the participants in the consultation still 
agreed  or strongly agreed  with them (50% and 65%, respectively).  
  
 
76 Figure 4.  Rating of structural weaknesses, hampering innovation in Europe  
 
Q: A number of structural weaknesses have been identified as hampering innovation in Europe. 
Based on your personal experience, how would you rate the following statements?  
 
Base: all participants (N=157)  
Source: Open Public Consultation  
 
 
Results by country groups  
 
Responses to each of the statements have also been broken down by whether respondents 
are ‘innovation leaders and strong innovators’ (n=94), ‘moderate and modest innovators’ 
(n=54) or ‘non -EU’ (n=9). As there were only nine non -EU respondents, the results for 
this group have been excluded from our reporting (though they are shown in the charts 
below for completeness).  
 
On the whole, for a number of statements, the results are remarkably similar when 
broken down by ‘innovation leaders and strong innovators’ and ‘moderate and modest 
innovators’. Similar responses were given on statements about the fragmentation of the 
European innovation ecosystem , (84% and 87% agreed  or strongly agreed, respectively) 
and further reinforcing the role of research and innovation in Europe to address 
global challenges  (97% and 96%, respectively).  

 
77 For some statements, however, there are some notable differences in the responses from 
the tw o groups (see Figure 5). For example, 89% of ‘moderate and modest innovators’ 
agreed or strongly agreed with the statement that “ the joint activities between higher 
education institutions, businesses and research organisations are not sufficiently 
integrat ed within their regional and local ecosystems” , compared with 72% of 
‘innovation leaders and strong innovators’. In addition, a slightly higher proportion of 
‘moderate and modest innovators’ (85%) agreed or strongly agreed that, in Europe, there 
is insuffi cient involvement of end -users and citizens in the co -design, experimentation 
and testing of innovation solutions , compared with ‘innovation leaders and strong 
innovators’ (70%).  
 
Figure 5: Statements replies by country groups  
 
 
 
 
 
Base: all participants; Innovation leaders and strong innovators N=94, Moderate and modest innovators N=54, Non -EU 
N=9.  
Source: Open Public Consultation  
 
Results by respondent type  
 
Responses to each of the statements have also been broken down by whether respondent s 
are responding in their quality of EU citizens, a company/business organisation, an 
academic/research organisation or other. Any interpretation of these results should start 
with an acknowledgement that these results are based on small sample sizes (EU c itizens 
N=51, company/business organisations N=25, academic/research organisations N=50, 
other N=31).  
 
Overall, there was a high degree of consistency between the groups. For example, almost 
all respondents across the different groups agreed or strongly a greed with the 
statement that “There is scope for further reinforcing the role of research and 
innovation in Europe to address global challenges”  (96% of EU citizens, 100% of 
company/business organisations, 94% of academic/research organisations and 94% of  
other respondents).  

 
78 For some statements there were more mixed responses across respondent types. Almost 
two-thirds (63%) of EU citizens and over half (52%) of company/business organisations 
agreed  or strongly agreed  that there are not enough measures supp orting 
entrepreneurship in Europe , but only 46% of academic/research organisations and 35% 
of other respondents did so. In addition, 60% of company/business organisations and 
60% of academic/research organisations, compared with 75% of EU citizens, agreed or 
strongly agreed that there are insufficient training opportunities to become more 
entrepreneurial and innovation -minded . 
 
Figure 6: Statements replies by respondent type  
 
 
 
 
 
 
Base: all participants; Academic/research organisations N=50, Company/business organisations 
N=25, EU citizens N=51, Other N=31.  
Source: Open Public Consultation  
 
  

 
79  
 
 
 
 
 
 
 
 
 
 
 
 
Factors that hinder involvement in existing pan -European innovation ecosystems  
 
The first open -ended question in this section of the survey asked the respondents to 
comment on the key factors that hinder the active involvement of interested parties in 
existing pan -European innovation ecosystems. 88 respondents answered this question 
and raised a variety o f barriers to involvement. The content within each response was 
coded into one or more categories and later analysed.  
 
From this analysis, the three most common factors , mentioned over 20 times in the 
responses, were ‘lack of visibility and awareness of existing innovation ecosystems 
and opportunities’, ‘bureaucracy and administrative complexity’ and ‘the barriers 
between nation -states’.  Other notable factors mentioned repeatedly (between 5 and 20 
times) were ‘ fragmentation’, ‘insufficient collaboration a nd networking’, ‘funding’ 
and ‘a lack of understanding about the needs of small and medium -sized enterprises 
(SMEs)’ . Finally, other factors raised less than five times in the responses were ‘risk 
aversion’, ‘a lack of an entrepreneurial mindset’, ‘insuffi cient sharing of good 
practice’ and ‘issues with measurement’.  
 
Lack of visibility and awareness around the existing innovation ecosystems and 
opportunities was among the most common factors of hindering innovation. Some of the 
comments are highlighted bel ow: 
 
 
Source: Open Public Consultation  
 
  
“Insufficient information on existing 
innovation ecosystems and opportunities; 
lack of knowledge on how one can 
participate or get involved”
“More efforts should be directed to better reach 
potential interested parties of the existing 
European innovation ecosystems to increase 
their possibilities of networking”“[Need more] awareness 
of the opportunities and a 
common platform to meet 
and exchange ideas”
“Visibility for pan -
European innovation 
ecosystems needs to be 
increased ”
“Insufficient information on existing  
innovation ecosystems and opportunities;  
lack of knowledge on how one can  
participate or get involved”  
“More efforts should be directed to better reach  
potential interested parties of the existing  
European innovation ecosystems to increase  
their possibilities of  
networking”  
“[Need more] awareness  
of the opportunities and a  
common platform to meet  
and exchange ideas”  
“Visibility for pan  
- 
European innovation  
ecosystems needs to be  
increased  
” 
 
80 One respondent offered a solution to this problem by suggesting that as information “on 
competitions and grants does not reach those concerned”, a “single portal” should be 
developed and used across European agenc y projects. This was echoed in separate 
written submissions, where a recommendation to develop a simpler access to what is 
available through European support was made.  
 
Another key factor that many raised was bureaucracy and administrative complexity . 
This was often linked to the large amount of paperwork that needed to be filled out, long 
lead in times for submitting projects, the scope of the work for the application, and the 
complexity of reporting outputs and impact.  This was a common theme in the sepa rate 
written submissions made to the OPC.  These highlighted, for example, the need to: 
simplify KIC tools and rules; address administrative barriers facing KICs, including 
through multi -annual funding; and align financial management and reporting with 
Horizon Europe.  
 
Many respondents noted that national differences and local context were hindering 
factors.  Some of the national differences were cultural, educational or linked to language 
or regulations:  
 
 
Source: Open Public Consultation  
 
Linked to this, some highlighted  fragmentation  either with a lack of connection between 
different initiatives or with too many unconnected networks and ecosystems without 
critical mass. Instead, respondents asked for a “one -stop shop” or a few strong “places to 
be”. 
 
The issue of collaboration and networking , particularly across different actors, was 
also highlighted along with the need to join up potential partners at the right time (see 
quotes below).  The additional written submissions echoed this strongly, which partly  
reflected the nature of the respondents, coming from associations of particular 
universities, SME communities etc.  These contributions pointed to various 
recommendations, including: drawing in Research and Technology Organisations 
(RTOs); recognising the  role of universities that may not be part of the core stakeholder 
groups of KICs, e.g. through greater outreach and information -sharing; and adopting 
appropriate incentives to engage SMEs.  
 
“Still the national barriers, [e.g.] understanding 
of regional cultures and behaviour, 
languages,…missing…a seamless 
qualification and education system with 
recognition at all levels”“Not all member states are 
equally represented in the 
different EU structures 
targeting innovation in the 
EU. Measures targeting 
Central and Eastern 
Europe and the Balkans 
should be tailor -made to 
the local context.”“Different rules in different countries…different 
regulations regarding personal data ”
 
81  
Source: Open Public Consultation  
 
A number of issues related to funding  were raised by respondents. Alongside the need 
for funding, other issues included complex funding rules , lack of commitment to multi -
year or long -term funding , and little low risk follow -up funding for completed projec ts. 
 
A lack of understanding around the needs of SMEs that hinder them from getting 
involved was highlighted:  
 
 
Source: Open Public Consultation  
 
  
“Insufficient knowledge and networking of 
academic and business is also an issue”
“The facilitators should put extra focus on 
matchmaking among members within their own 
ecosystem. Focus should be put on knowledge 
sharing and promoting partners, there 
capacities and values for others within the 
ecosystem”“Culture of actors according to 
their affiliation (basic research 
organisation, RTO, 
universities/teaching facilities, 
enterprises). The EIT is 
necessary to bring together these 
actors and to “collaborate” 
together (integration)”
“Need more local / regional supports for identifying the appropriate partners 
for them at different moments of their projects”
“Uneven balance between academic expertise and business knowledge of 
opportunities -academic environment seems much better suited for current setup 
of innovation projects. Only those companies with sufficient size or very specific 
expertise seem to be joining innovation ecosystems due to workload and 
prioritization issues”
“Time investment needed, especially for 
SMEs. Too low chance of success, 
especially for SMEs, compared to the 
administrative burden”
“Support programs have not been designed with entrepreneurs in mind. Most 
seem to be structured such that their target audience appears to be large 
universities or large corporate innovation divisions. For example, when you win 
a Climate -KIC grant, you must manage all cashflow for that grant for 18 months 
before you receive a pay -out. For a large entity this isn't a problem, but for a 
technology start -up that cannot access debt, this is a major challenge.”“Low participation of SMEs 
in innovation activities 
(lack of financial resources 
and skills)”.
“Too many administrative burdens for SMEs”
 
82 Challenges and opportunities in the research and innovation area  
 
The second open -ended question asked respondents to comment on any other challenges 
and opportunities in the research and innovation area relevant to the operations of the 
EIT. One of the opportunities that came up most frequently among respondents was to 
build upon and strengthen collaborations and networks  at many different levels – 
between businesses, institutions, KICs, and regional and pan -European innovation 
ecosystems:  
 
 
Source: Open Public Consultation  
 
This was also a common theme in a number of w ritten submissions. Some of the raised 
points include:  
 
 The integration across KICs  was identified as an opportunity.  This included 
learning exchanges between KICs, and in particular from more to less well -
developed KICs, though there was a cautionary not e on the context -specificity of 
certain KICs.  In addition, it was noted that tools or mechanisms should be 
developed to facilitate cross -KIC activity more readily when the opportunities are 
identified.  A broader point was made that technologies developed  through KICs 
are likely to be relevant across boundaries, and often companies do not even see 
these artificial boundaries. Mechanisms that can facilitate knowledge sharing 
would be beneficial to industry.  
 It was identified that Horizon Europe  needs to provide mechanisms to facilitate 
connections and links between innovation ecosystems, for example through 
greater emphasis of European Innovation Ecosystems action under Pillar III.  
 A cautionary note was made that KICs face the risk to become closed clubs . They 
need to have better outreach to other higher education institutions to share 
lessons, and to provide information on opportunities relevant to the institutions.  
 
Other opportunities, mentioned less frequently by respondents, related to r aising 
awareness and promoting the EIT  among the general public, connecting the education 
system to industry – “EIT should be a driving force to implement a more  business -
oriented approach in Universities and research centres” – and improving the 
implement ation and commercialisation of innovations.  
 

 
83 On the other hand, many mentioned challenges related to funding and investment . For 
example, Europe  “lack[s] a platform offering more visibility of high -potential early stage 
ventures and technologies among comp etent investors”; “High quality ‘frontier science’ 
needs to be matched equally with high quality, diverse and ‘deep’ long term funding”; 
and “Short term budgets…hinder sustainability in innovation partnerships and more 
long-term strategies”.  
 
Other challe nges, mentioned less frequently by respondents, related to barriers to 
participation such as bureaucracy, the “missing alignment between regional, national 
and EU research and innovation activities”  and the difficulties entrepreneurs and 
start -ups face  to access funding and contribute to the EIT and the KICs as they “lack the 
operational diversity and internal organizational infrastructure [that] the large companies 
and the universities have in place to support the formalities of the EU and the EIT KIC”.  
Separate written submissions identified potential routes to addressing these challenges, 
for instance through associations representing SMEs or the intermediaries that could 
provide a structured approach to doing so (e.g. the European Business and Innovatio n 
Centre Network).  
 
Questions on policy objectives for the EIT  
 
The respondents to the online public consultation were asked to share their opinions with 
respect to the three policy objectives set for the operation of EIT for the period 2021 -
2027. In their  replies, the participants could choose more than one action to achieve each 
policy objective. The three most popular suggestions for activities to help pursue each 
objective are described in the section below.  
 
Policy objective 1:  To foster, grow, strengt hen and develop current or new 
sustainable innovation ecosystems across Europe .  
 
The most often selected action to achieve this policy objective was supporting the  
involvement of final users in the development of innovative solutions  (67%). This 
approach was most popular among respondents from ‘other’ organisations, EU citizens 
and company representatives and less so among respondents from academic/research 
institutions.  
Another popular action for achieving the policy objective was harnessing the synergies  
among existing innovation activities at EU and national levels (65%). This option 
was cited most often by representatives of academic/research organisations  and it was 
more favoured by innovation leaders as opposed to moderate and modest innovators.  
 
Increasing the effectiveness of cooperation and coordination of existing KICs and 
related activities  was another popular option (61%), selected particularly by 
representatives of academic/research organisations and EU -citizens.  
 
 
  
 
84 Figure 7. The most relev ant activities for the EIT to achieve the Policy Objective 1  
Base: all participants; Academic/research organisations N=50, Company/business organisations N=25, EU citizens 
N=51, Other N=31.   
  Q: In your opinion, what are the most relevant activities for the EIT to best achieve the 
following policy objectives?  
 Policy objective 1:  To foster, grow, strengthen and develop current or new sustainable 
innovation ecosystems across Europe by connecting people, disciplines, sectors, 
organisations and resources within a specific Knowledge and Innovation Community (KIC).  
 
 
Base: all participants (N=157)  
Source: Open Public Consultation  
Note: the figures demonstrate the distribution of answers among all respondents. As the respondents had an ability 
to select several answers  up to four), the percentages do not add up to 100%    
 
   61%  53%  67%  65%  34%  47%  
0% 10% 20% 30% 40% 50% 60% 70% 80%Increasing effectiveness of cooperation and
coordination of existing KICs and related
activitiesEnhancing participation of partners from
public authorities (national/regional/local) in
the KICs, including for social innovation and
public sector innovationSupporting the involvement of final users and
citizens in the co-design, experimentation and
testing of innovative solutionsHarnessing synergies among existing
innovation activities at EU and national level
and thus improving the environment within
which innovation can flourish.Accelerating support to regions towards
excellence in European countries that are
modest/moderate innovatorsSetting up new KICs in a number of thematic
areas in line with European priorities and
global challenges
55%  74%  74%  61%  35%  48%  
61%  51%  71%  63%  45%  41%  
52%  36%  68%  60%  24%  44%  
68%  50%  58%  72%  28%  52%  
0% 10% 20% 30% 40% 50% 60% 70% 80%Increasing effectiveness of cooperation and
coordination of existing KICs and related
activitiesEnhancing participation of partners from public
authorities (national/regional/local) in the KICs,
including for social innovation and public…Supporting the involvement of final users and
citizens in the co-design, experimentation and
testing of innovative solutionsHarnessing synergies among existing
innovation activities at EU and national level
and thus improving the environment within…Accelerating support to regions towards
excellence in European countries that are
modest/moderate innovatorsSetting up new KICs in a number of thematic
areas in line with European priorities and global
challenges
Academic/research organisations Company/business organisation EU citizen Other
 
85  
Base: 148 respondents: Innovation leaders and strong innovators N=94, Moderate and  modest innovators N=54. Non -
EU (N=9) res pondents are excluded due to the very small sample size.  
Source: Open Public Consultation  
 
 
The respondents were given the option to suggest any additional activities they 
considered important for achieving the first policy objective. Making KICs more 
inclusive by enhancing the participation of a wider range of stakeholders , such as 
SMEs, investors, and non -EU stakeholders, was the most widely agreed upon solution 
(30%), and the breadth of potential stakeholders and means of engagement is illustrated 
in the  quotes below. This appeared to be a particularly important issue, underscored in 
some of the position papers provided by respondents, which emphasised the importance 
of creating stronger ties with higher education institutions.  
 
This activity was followed  by other suggestions, such as building a strong network 
through partnerships with other initiatives  (e.g. Digital Innovation Hubs) (21%) and 
removing administrative red tapes , as the system was perceived as too slow and 
complex and some requirements such as financial sustainability were put forward for 
reinterpretation (10%). Fostering complementarity and avoiding duplication with 
other current and future EU initiatives , as well as reducing the administrative 
workload of KICs , associated with application, reporting and evaluation, were some of 
the more prominently discussed issues in the position papers.  
 
Lastly, introducing a more  bottom -up approach  by involving municipalities and 
citizens and supporting cross -KIC innovation synergies and projects were recommended 
by 6% of respondents each, illustrated in some of the quotes below and also was 
elaborated in several position papers.  
 61%  54%  67%  56%  57%  44%  
61%  51%  68%  71%  21%  47%  
0% 10% 20% 30% 40% 50% 60% 70% 80%Increasing effectiveness of cooperation and
coordination of existing KICs and related
activitiesEnhancing participation of partners from
public authorities (national/regional/local) in
the KICs, including for social innovation and…Supporting the involvement of final users and
citizens in the co-design, experimentation and
testing of innovative solutionsHarnessing synergies among existing
innovation activities at EU and national level
and thus improving the environment within…Accelerating support to regions towards
excellence in European countries that are
modest/moderate innovatorsSetting up new KICs in a number of thematic
areas in line with European priorities and
global challenges
Innovation leaders and strong innovators Moderate and modest innovators
 
86  
Source: Open Pub lic Consultation  
 
 
Policy objective 2:  To improve the human capital base for innovation through 
developing talents and enhancing skills and competence; to make entrepreneurship 
and innovation culture in Europe stronger, more inclusive and more open, and to 
contribute to the entrepreneurial tra nsformation of higher education institutions 
across the EU.  
 
The most popular suggestion for achieving this policy objective was providing funding 
for innovation capacity development and rewarding/recognising universities for 
becoming more innovative and e ntrepreneurial  (71%). It was embraced most 
predominantly among academic/research organisation representatives, EU citizens and 
respondents within the ‘other’ category as opposed to business representatives.  
 
Another similarly often -selected option was laun ching new actions supporting 
education and human capital development through the identification of future skills 
needs  (69%). There was consensus across different types of respondent for this option.  
 
Some actions were much less popular, in particular strengthening the EIT label  
(supported by 23%).  Several of the separate written submissions discussed the EIT label.  
There was a sense that it was not very well -known, though it was noted by one 
respondent that it potentially had some value outside of Europ e.  Two respondents 
highlighted the need to go beyond postgraduate degrees when considering the EIT label, 
or the education aspect of KIC activities more generally, as innovation needed to be part 
of the “main” curriculum.  
 
 
  

 
87 Figure 8. The most relevant activities for the EIT to achieve the Policy Objective 2  
Base: all participants; Academic/research organisations N=50, Company/business organisations N=25, EU 
citizens N=51, Other N=31. Source: Open Public Consultation  
 Q: In your opinion, what are the most relevant activities for the EIT to best achieve the following 
policy objectives?  
 Policy objective 2:  To improve the human capital base for innovation through developing 
talents and enhancing skills and competences; to make entrepreneurship and innovation 
culture in Europe stronger, more inclusive and more open, and to contribute to the 
entrepreneurial tr ansformation of higher education institutions across the EU.  
can be best achieved through  
 
Base: all participants (N=157)  
 23%  69%  51%  41%  71%  
0% 10% 20% 30% 40% 50% 60% 70% 80%Strengthening the EIT label (certificate of
quality for programmes) by improving its
quality and having external quality assurance
and recognitionLaunching new actions supporting education
and human capital development such as the
identification of future skills needs for industry
to tackle global challenges and related…Providing support for mainstreaming innovative
practices into the schools or the Vocational
Education and Training (VET) sector or into
non-formal educational contextExploiting synergies and coordination with
other actions and innovation activitiesProviding funding for innovation capacity
development and rewarding/recognising
universities becoming more entrepreneurial
and innovative institutions
32%  74%  48%  39%  81%  
18%  65%  69%  31%  75%  
20%  68%  40%  56%  56%  
24%  72%  40%  44%  70%  
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%Strengthening the EIT label (certificate of quality
for programmes) by improving its quality and
having external quality assurance and recognitionLaunching new actions supporting education and
human capital development such as the
identification of future skills needs for industry to
tackle global challenges and related training
programmesProviding support for mainstreaming innovative
practices into the schools or the Vocational
Education and Training (VET) sector or into non-
formal educational contextExploiting synergies and coordination with other
actions and innovation activitiesProviding funding for innovation capacity
development and rewarding/recognising
universities becoming more entrepreneurial and
innovative institutions
Academic/research organisations Company/business organisation EU citizen Other
 
88  
Base: 148 respondents: Innovation leaders and strong innovators N=94, Moderate and modest innovators N=54. 
Non -EU (N=9) respondents are excluded due to the very small sample size.  
Source: Open Public Consultation  
 
 
The respondents were also given the option to suggest any additional activities they 
considered important for achieving the second policy objective. The most often -
suggested activity was providing affordable and easy access to training  (21%), by 
creating continued education online course platform of developing short training and 
empowerment programmes for entrepreneurs. This was follo wed propositions for 
strengthening collaboration between stakeholders  (8%) by creating partnership 
between industry and higher education and aligning with other programmes  (8%), such 
as Erasmus+. Cross -disciplinary collaboration , which allows for the excha nge of 
practices, and encouraging innovation at universities by incorporating entrepreneurial 
courses were each supported by 6% of respondents.  
 
In general, creating and fostering synergies appeared  to be a prominent issue as it was 
discussed at length in the position papers. For example, there were suggestions to create 
specific tools that facilitate the connection between different KICs around common 
topics, thus avoiding overlaps and fostering collaboration. Additionally, it was 
emphasised that the focus  should not only be on increasing university -business 
collaborations but also on ensuring the active involvement of local and regional 
stakeholders. It was suggested that this can be achieved by introducing more transparent 
participation rules.  
 31%  74%  59%  30%  72%  
17%  67%  49%  47%  69%  
0% 10% 20% 30% 40% 50% 60% 70% 80%Strengthening the EIT label (certificate of
quality for programmes) by improving its
quality and having external quality assurance
and recognitionLaunching new actions supporting education
and human capital development such as the
identification of future skills needs for
industry to tackle global challenges and
related training programmesProviding support for mainstreaming
innovative practices into the schools or the
Vocational Education and Training (VET)
sector or into non-formal educational contextExploiting synergies and coordination with
other actions and innovation activitiesProviding funding for innovation capacity
development and rewarding/recognising
universities becoming more entrepreneurial
and innovative institutions
Innovation leaders and strong innovators Moderate and modest innovators
 
89  
Source: Open Public Consultation  
 
 
Policy objective 3:  To develop and bring new solutions to global societal challenges 
to the market .  
 
When asked how the third policy objective could be best achieved, the most favoured 
approach by the respondents was the develo pment of new products and services, 
which involve all relevant stakeholders (64%). The proportion of responses was evenly 
distributed among all respondent groups.  
 
Another similarly popular choice was making business support services widely 
available  (63% ). The distribution between respondent groups was not even, as business 
respondents seemed to agree with this approach to a lesser extent than the other groups. 
Additionally, respondents from moderate and modest innovators were more supportive 
compared to innovation leaders.  
 
Lastly, the majority of respondents also favoured increasing support for financial and 
capital raising services and attracting private funding  (61%). This approach seemed 
to be supported the most by the respondents within the ‘other’ category and EU -citizens 
as opposed to academic/research organisation representatives. It also appeared to be 
much less likely to be selected by innovation leaders.  
 
Conversely, provision of customised support for specific target groups (36%) did not 
recei ve a lot of support, particularly by business representatives and respondents from 
innovation leaders.  
Figure 9. The most relevant activities for the EIT to achieve the Policy Objective 3  
Q: In your opinion, what are the most relevant activities for the EIT to best achieve the following policy 
objectives?  
 Policy objective 3:  To develop and bring new solutions to global societal challenges to the 
market by integrating education, business and research, as well as other relevant players (such 
as municipaliti es, civil society, large industry, small and medium -sized enterprises, etc.) 
according to the sector.  
can be best achieved through : 
 
90   
Base:  all participants (N=157)  
 
 
Base: all participants; Academic/research organisations N=50, Company/business organisations N=25, EU citizens N=51, 
Other N=31.  Source: Open Public Consultation  63%  41%  36%  64%  61%  48%  
0% 10% 20% 30% 40% 50% 60% 70%Increased attention to mentoring, coaching,
technical assistance and other advisory
activities to make business support services…Increased support for legal and regulatory
adviceCustomised support for specific target groups
(young people, women, etc.)Increased support to development of new
products and services where all relevant
players, including municipalities and civil…Increased support for financial and capital
raising services and attracting private fundingSpecific actions based on new business
models and digital strategies for business
74%  42%  48%  65%  74%  68%  
65%  37%  39%  65%  63%  31%  
48%  28%  12%  60%  60%  76%  
62%  52%  36%  64%  52%  38%  
0% 10% 20% 30% 40% 50% 60% 70% 80%Increased attention to mentoring, coaching,
technical assistance and other advisory
activities to make business support services
widely available and accessible, covering both…Increased support for legal and regulatory
adviceCustomised support for specific target groups
(young people, women, etc.)Increased support to development of new
products and services where all relevant
players, including municipalities and civil
society, take partIncreased support for financial and capital
raising services and attracting private fundingSpecific actions based on new business models
and digital strategies for business
Academic/research organisations Company/business organisation EU citizen Other
 
91  
Base: 148 respondents: Innovation leaders and strong innovators N=94, Moderate and modest  innovators 
N=54. Non -EU (N=9) respondents are excluded due to the very small sample size.  
Source: Open Public Consultation  
 
 
The respondents were also given the option to put forward any additional activities they 
considered important for achieving the third policy objective. Inclusion and 
collaboration with other European and national programmes  was the most -often 
suggested act ivity (24%) by, for example, ensuring a greater eligibility for the 
participation of local and regional authorities in project proposals. Involvement of a 
wider range of stakeholders , such as regional ecosystems (15%), collecting and 
popularising best prac tices and successful cases  (5%), incentivising the private 
sector to take part in innovative projects  (5%) and standardisation across 
alternative and competitive technology solution providers  (5%) were some of the 
more popular activities among the responde nts of the survey.  
The importance of regional authorities and ecosystems, as well as closer cooperation 
between the nodes of the knowledge triangle are illustrated in the quotes below:  
 
  74%  39%  41%  65%  72%  43%  
57%  43%  31%  65%  52%  51%  
0% 10% 20% 30% 40% 50% 60% 70% 80%Increased attention to mentoring, coaching,
technical assistance and other advisory
activities to make business support services…Increased support for legal and regulatory
adviceCustomised support for specific target groups
(young people, women, etc.)Increased support to development of new
products and services where all relevant
players, including municipalities and civil…Increased support for financial and capital
raising services and attracting private fundingSpecific actions based on new business
models and digital strategies for business
Innovation leaders and strong innovators Moderate and modest innovators

 
92 The respondents were also asked to list any other policy objectiv es they deemed 
important for the future of the EIT. Overall, nurturing the existing innovation 
ecosystems was the most popular policy objective among the respondents  (30%). 
They placed emphasis on the role of EIT as a connector. Similarly, better coordinat ion 
between stakeholders, resources and initiatives  (17%) involvement of new 
stakeholders such as students  (17%), and provision of SME -specific support  (13% ) 
were some of the other objectives put forward by the respondents of the survey.  
 
 
Source: Open P ublic Consultation  
 
 
Questions on options to tackle the challenges  
 
The respondents were asked to share their opinions with respect to the options for 
tackling challenges. First, they provided answers with respect to the most important 
aspects for ensuring  the financial sustainability of KICs . According to them, a robust 
financial strategy from the outset of a KIC and the continuous monitoring of its 
implementation and evaluation  was the best strategy (64%), an opinion particularly 
prevalent among responden ts within the ‘other’ category.  
 
Similarly, securing other sources of public funding for the operations of KICs was 
favoured by respondents (60%) and in particular by those within the ‘other’ category and 
academic/research organisations. Strategies such a s strict application of quality 
management principles  (27%) and regular membership fees  (27%) were the least 
popular among the respondents.  
 
The participants were also asked to suggest any other aspects they considered important 
for achieving the financial  sustainability of KICs. The most popular solution according to 
them was securing funding from other sources, through national funding, 
sponsorship by private actors, and grants, among others  (36%). They also suggested 
increased monitoring and regulation  (18% ), multi -annual budget planning  (9%) and 
increased entrepreneurial focus within KICs  (6%).  
The requirement that funding be awarded for one year  at a time rather than for multiple 
years was presented in several position papers as impeding participation  and suggestions 
were made to switch to a multi -annual funding model.  
 

 
93  
Source: Open Public Consultation  
 
The respondents were also invited to give suggestions for other suitable thematic areas  
that could be implemented through future EIT KICs to deliver on EU priorities and 
challenges.  The following list contains the most -often suggested themes128: 
 
 Water - suggested by 17% (23 respondents)  
 Marine sciences - suggested by 9% (12 respondents)  
 AI - suggested by 6% (8 respondents)  
 Mobility - suggested by 6% (8 respondents)  
 Cultural and creative sectors - suggested by 6% (8 respondents)  
 Sustainable development - suggested by 5% (7 respondents)  
 Transport - suggested by 5% (7 respondents)  
 Space and spac e technologies - suggested by 4% (6 respondents)  
 Security - suggested by 4% (6 respondents)  
 Circular economy - suggested by 4% (5 respondents)  
 Robotics - suggested by 4% (5 respondents)  
 Smart cities - suggested by 3% (4 respondents)  
 
The separate position papers also included suggestions for KICs, notably on 
water/marine/maritime with a vision statement offered for BlueGrowth, and with a 
similar vision statement offered for nutrients sustainability (relating to agricultural 
networks).  
 
                                                           
128 The themes suggested where KICs already exist have been filtered out. These are: Energy - suggested by 20% (27 respondents), 
Health - suggested by 14% (19 respondents) , Climate change - suggested by 13% (18 respondents), Digitalisation - suggested by 13% 
(18 respondents), Food - suggested by 7% (10 respondents)  
 
 

 
94 Figure 10. The most i mportant aspects to ensure financial sustainability of KICs  
Q: According to the EIT Regulation, KICs shall develop strategies for financial sustainability beyond the 
funding from the European Research and Innovation Framework Programme (in a time -frame of  seven to 
fifteen years). In your view, which of the following aspects are the most important for ensuring financial 
sustainability of KICs?  
 
Base:  all participants (N=157)  
 
Base: all participants; Academic/research organisations N=50, Company/business organisations N=25, EU 
citizens N=51, Other N= 31. Source: Open Public Consultation  27%  60%  46%  64%  27%  51%  
0% 10% 20% 30% 40% 50% 60% 70%Strict application of quality management
principles in operations of the KICsSecuring of other sources of public funding for
the operations of KICs, beyond the funding
from the European Research and Innovation
Framework ProgrammeSecuring of direct equity investments into
businesses supported by a KICA robust financial sustainability strategy from
the outset of a KICļs operation, and the
continuous monitoring of its implementation
and periodic evaluation (e.g. regular…Regular (e.g. annual, commensurate to the
level of participation, etc.) membership fees
applied for partners participating in KIC
activitiesEstablishment of a dedicated fund by KICs
(with KIC investments or with external
investments) to facilitate financing of the their
operations
35%  71%  48%  84%  19%  55%  
20%  57%  47%  59%  37%  49%  
28%  48%  56%  64%  32%  40%  
30%  62%  38%  58%  20%  56%  
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%Strict application of quality management
principles in operations of the KICsSecuring of other sources of public funding for
the operations of KICs, beyond the funding
from the European Research and Innovation
Framework ProgrammeSecuring of direct equity investments into
businesses supported by a KICA robust financial sustainability strategy from
the outset of a KICļs operation, and the
continuous monitoring of its implementation
and periodic evaluation (e.g. regular…Regular (e.g. annual, commensurate to the
level of participation, etc.) membership fees
applied for partners participating in KIC
activitiesEstablishment of a dedicated fund by KICs
(with KIC investments or with external
investments) to facilitate financing of the their
operations
Academic/research organisations Company/business organisation EU citizen Other
 
95 Base: 148 respondents: Innovation leaders and strong innovators N=94, Moderate and modest innovators 
N=54. Non -EU (N=9) respondents are excluded due to the  very small sample size.  
Source: Open Public Consultation  
 
 
The respondents were also asked to indicate what the most important criteria were for 
the selection and implementation of new KICs  in pre -defined thematic areas based on 
EU priorities. The most po pular criterion by far was the societal impact of the proposed 
activities, including their potential to address the Sustainable Development Goals 
(77%) . This option was particularly popular among the representatives of business and 
academic/research organi sations alike.  
 
Two other criteria that were selected by more than half of the respondents were expected 
economic competitiveness and structure of the value -added chain and production 
strategies of the proposed partnerships  (57%)  and synergies with existin g Research 
and Innovation Partnerships and other types of actions at European, national and 
regional level (55%) . The former was significantly more popular among representatives 
of the academic/research organisation than any of the other groups of responde nts and 
least favoured by moderate/modest innovators. In contrast, the latter criterion was most 
popular among business organisation representatives.  
 
Conversely, criteria such as suitability of the EIT/KIC model for implementation of 
the proposed activiti es and degree of higher education excellence of the proposed 
partnership in this area and potential for reinforcement of relevant skills and 
talents , were viewed as the least important by the respondents.  28%  59%  57%  70%  30%  57%  
24%  62%  39%  57%  29%  46%  
0% 10% 20% 30% 40% 50% 60% 70% 80%Strict application of quality management
principles in operations of the KICsSecuring of other sources of public funding for
the operations of KICs, beyond the funding
from the European Research and Innovation…Securing of direct equity investments into
businesses supported by a KICA robust financial sustainability strategy from
the outset of a KICs operation, and the
continuous monitoring of its implementation…Regular (e.g. annual, commensurate to the
level of participation, etc.) membership fees
applied for partners participating in KIC…Establishment of a dedicated fund by KICs
(with KIC investments or with external
investments) to facilitate financing of the…
Innovation leaders and strong innovators Moderate and modest innovators
Figure 11. The most important criteria for the selection and implementation of new KICs  
Q: In your opinion, which should be the most important criteria for the selection and implementation of 
new KICs in pre -defined thematic areas based on EU priorities?  
 
96 Base: all participants; Academic/research organisations N=50, Company/business organisations N=25, EU 
citizens N=51, Other N=31.  Source: Open Public Consultation   
Base:  all participants (N=157)  
 
 77%  30%  50%  55%  32%  34%  46%  57%  50%  
0%10% 20% 30% 40% 50% 60% 70% 80% 90%Societal impact of proposed activities of the
partnership in this area, including potential to…Suitability of the EIT/KIC model for
implementation of the proposed activitiesMeasures to ensure transparency and
openness as regards the setting of priorities…Synergies with existing Research and
Innovation Partnerships and other types of…Degree of higher education excellence of the
proposed partnership in this area and…Potential of the proposed partnership to ensure
financial sustainability; clear exit strategy…Degree of research and innovation excellence
of the proposed partnership in this areaExpected economic competitiveness and
structure of the value added chains and…Measures to ensure transparency and
openness as regards the wide involvement of…
71%  48%  48%  61%  29%  39%  39%  48%  55%  
69%  25%  49%  47%  31%  35%  35%  27%  57%  
88%  24%  48%  72%  12%  24%  24%  36%  64%  
84%  26%  54%  52%  44%  36%  36%  68%  54%  
0%10%20%30%40%50%60%70%80%90%100%Societal impact of proposed activities of the
partnership in this area, including potential to
address the Sustainable Development Goals…Suitability of the EIT/KIC model for
implementation of the proposed activitiesMeasures to ensure transparency and
openness as regards the setting of priorities
and objectives as well as dissemination,…Synergies with existing Research and
Innovation Partnerships and other types of
actions at European, national or regional levelDegree of higher education excellence of the
proposed partnership in this area and potential
for reinforcement of relevant skills and talent…Potential of the proposed partnership to ensure
financial sustainability; clear exit strategy and
phasing-out measuresDegree of research and innovation excellence
of the proposed partnership in this areaExpected economic competitiveness and
structure of the value added chains and
production strategies of the proposed…Measures to ensure transparency and
openness as regards the wide involvement of
partners from different sectors including…
Academic/research organisations Company/business organisation EU citizen Other
 
97 Base: 148 respondents: Innovation leaders and strong innovators N=94, Moderate and modest innovators N=54. 
Non -EU (N=9) respondents are excluded due to the very small sample size .  
Source: Open Public Consultation  
 
 
The respondents were also given the opportunity to indicate what other criteria they 
considered important for the selection and im plementation of new KICs in pre -defined 
thematic areas based on EU priorities. The most popular criterion among them was the 
potential of the KICs to address important sustainability issues (e.g. by using metrics 
such as CO 2 reduction impact) (26%). Other suggestions included the potential for 
closing an existing knowledge gap or meeting specific market needs  (13%), potential 
or intention for collaboration with other KICs  (13%), potential positive impact on 
quality of life  (9%) and potential for achieving specific EU policy objectives  (9%). 
The range of criteria are illustrated in the quotes below.  78%  20%  57%  57%  39%  41%  41%  33%  65%  
76%  32%  45%  56%  28%  29%  29%  52%  55%  
0%10% 20% 30% 40% 50% 60% 70% 80% 90%Societal impact of proposed activities of the
partnership in this area, including potential…Suitability of the EIT/KIC model for
implementation of the proposed activitiesMeasures to ensure transparency and
openness as regards the setting of priorities…Synergies with existing Research and
Innovation Partnerships and other types of…Degree of higher education excellence of the
proposed partnership in this area and…Potential of the proposed partnership to
ensure financial sustainability;  clear exit…Degree of research and innovation excellence
of the proposed partnership in this areaExpected economic competitiveness and
structure of the value added chains and…Measures to ensure transparency and
openness as regards the wide involvement…
Innovation leaders and strong innovators Moderate and modest innovators
 
98  
 
Source: Open Public Consultation  
 
  

 
99 10.4. Annex 3:  Who is affected and how?  
Practical implications of the initiative  
This annex assesses the different impacts of the identified preferred policy option 
(Option 2) on the main stakeholders, as well as on the economy as a whole. The key 
stakeholders that would be affected by the proposed legislation include in particular 
higher education institutions, businesses and pu blic bodies at EU level (the EIT) as well 
as various regional actors. Since the proposed intervention is an enabling legislation, the 
impact both in terms of potential benefits and potential costs would depend on the 
magnitude of the KIC activities as auto nomous organisations.  
The general benefits and costs of the preferred option are summarised in Table 1 and 
Table 2 below, respectively. They present the key costs and benefits which have been 
identified and assessed during the Impact Assessment process.  
 
  
 
100 Table 1: Overview of benefits  
 
I. Overview of Benefits (total for all provisions) – Preferred Option (Option 2)  
Description  Amount 129 Comments  
Direct benefits  
Number of students involved in 
EIT entrepreneurial education 
actions  22.500 students  
 The impact of the new action of the EIT on supporting 
entrepreneurial and innovative capacity of HEIs will 
increase through engaging more partners in the education 
activities, reaching out to more students, facilitating the 
transformation of good ideas in new ventures and 
supporting capacity development of higher education 
institutions  
Number of graduates of EIT 
labelled programmes  10.000 graduates  KICs offer technical education programmes (mainly 
Masters and PhDs) with a strong focus on soft skills, 
entrepren eurship and innovation management, mobility 
aspects, trans -disciplinarity. The EIT Label will be 
strengthened in its quality assurance mechanisms  and will 
be extended to lifelong learning activities.  
Number of Higher Education 
Institutions (HEI) participating 
in the EIT entrepreneurial 
capacity actions  450 HEIs  The EIT will launch a new action by providing support to 
higher education institutions to further develop their 
entrepreneurial and innovation capabilities using the 
HEInnovate framework to design action plans and 
implement them. By linking financial support (through 
specific calls for proposals addressing beneficiaries which 
are not necessarily partners of a KIC) to develop 
education & training programmes an d support the 
entrepreneurial capacities of higher education institutions 
in low innovation performing regions, the EIT will 
contribute to reducing the innovation divide.  
Number of innovative products 
(goods or services) launched on 
the market as well as  new 
processes, methods, ideas or 
marketing innovations 
implemented  4300 products  The number of product innovations (goods or services) 
launched on the market during and following KIC support 
or the number of processes and marketing innovations or 
new/sig nificantly improved methods introduced following 
KIC support. By innovations, we mean new or 
significantly improved products (goods or services), 
processes, ideas or marketing innovations implemented.  
Start -ups supported  680 start -ups Innovative technolo gical solutions can be commercialised 
by new start -ups, brought to market by existing 
businesses, implemented to strengthen existing 
businesses, or used as a basis for further technological 
development. Through the policy of supporting ‘better’ 
and not ‘mo re’ start -ups, it is assumed that the number of 
start-ups generated will not necessarily increase in 2021 -
2027, but that the quality of the start -ups increases.  
Participating organisations from 
moderate or modest innovator 
countries  500 Overall participation in ETI and KIC activities of 
organisations from moderate and modest innovation 
countries will comprise the current and future RIS 
participating organisations as well as organisations 
participating in new action of the EIT on supportin g 
entrepreneurial and innovative capacity of HEIs . 
 
Table 2: Overview of the costs  
                                                           
129 The numbers, where available, arise from the calculations and projections that are detailed in chapter 6 of the main report, the 
impact analysis.  
 
101  
II. Overview of costs – Preferred option (Option 2)  
 Citizens/  
Consumers  KICs (and its partners – businesses, 
universities, RTOs)  EIT Administrations  
One-off Recurrent  One-off Recurrent  One-off Recurrent  
All 
considered 
actions   Direct 
costs  None  None  For existing 
KICs: Adapt the 
monitor system 
in order to 
account for the 
indicators’ 
framework.  
 
Compliance and 
implementation 
costs arising 
from adaptation 
of the funding 
model for 
already existing 
KICs.   
 
Costs of 
applying to 
become a KIC.  Increased 
administrative 
costs due to the 
need to widen the 
scope of their 
monitoring 
activities and 
report on additional 
performance 
indicators.   
 
Annual 
membership fees of 
KIC partners -  
recurrent cost  Put in place 
the new 
monitoring 
system.  Admin co sts for 
improved 
monitoring and 
supervision of 
KICs  
 
Increased number 
of EIT staff to 
monitor KICs and 
to manage the EIT 
own’s activities 
(i.e. support to 
HEIs to develop 
their 
entrepreneurial and 
innovation 
capacity).   
 
Overall costs of 
EIT as a central  
service over 7 
years is EUR 70 
million  
Indirect 
costs  None  None   None  None  None  
 
102 10.5. Annex 4A:  Key achievements of the EIT  
Source: EIT data  
EIT Climate -KIC  EIT InnoEnergy  EIT Digital  EIT Health  EIT Raw Materials  
EIT Core KPIs 2013 -2017  
- EIT labelled programme 
graduates: 375  
- New or improved products/ 
services/ processes launched: 306  
 
EIT Core KPIs 2017  
- Start -ups created by students & 
graduates from EIT labelled 
programmes: 2  
- Start -ups created as a result of 
innovation projects: 2  
- Start -ups supported by KICs: 
266  
- Investment attracted by start -
ups supported by KICs: 
187,832,231.25 EUR  
- Success stories submitted and 
accepted by EIT: 58  
- External participants* 
(individ uals) in EIT RIS 
programmes: 22  
- External participants* 
(organisations) in EIT RIS 
programmes: 33  
- Financial Sustainability; 
revenue of KIC LE: 2,629,576.44 
EUR  
- Financial Sustainability; FS 
coefficient: 3.72%  EIT Core KPIs 2013 -2017  
- EIT labelled programme 
graduates: 707  
- New or improved products/ 
services/ processes launched: 73  
 
  
EIT Core KPIs 2017  
- Start -ups created by students & 
graduates from EIT labelled 
programmes: 4  
- Start -ups created as a result of 
innovation project s: 0  
- Start -ups supported by KICs: 80  
- Investment attracted by start -ups 
supported by KICs: 32,000,000.00 
EUR  
- Success stories submitted and 
accepted by EIT: 12  
- External participants* 
(individuals) in EIT RIS 
programmes: 17  
- External participant s* 
(organisations) in EIT RIS 
programmes: 110  
- Financial Sustainability; revenue 
of KIC LE: 4,932,738.41 EUR  
- Financial Sustainability; FS 
coefficient: 6.50%  
 EIT Core KPIs 2013 -2017  
- EIT labelled programme 
graduates: 610  
- New or improved products/ 
services/ processes launched: 219  
 
 
EIT Core KPIs 2017  
- Start -ups created by students & 
graduates from EIT labelled 
programmes: 2  
- Start -ups created as a result of 
innovation projects: 9  
- Start -ups supported by KICs: 33  
- Investment attracted by start -ups 
supported by KICs: 5,850,000.00 
EUR  
- Success stories submitted and 
accepted by EIT: 8  
- External participants* 
(individuals) in EIT RIS 
programmes: 0  
- External participants* 
(organisations) in EIT RIS 
programmes: 9  
- Financial Sustainability; revenue 
of KIC LE: 2,448,785.07 EUR  
- Financial Sustainability; FS 
coefficient: 3.80%  
 EIT Core KPIs 2013 -2017  
- EIT labelled programme 
graduates: n/a  
- New or improved products/ 
services/ processes launched: 22  
 
 
EIT Core  KPIs 2017  
- Start -ups created by students & 
graduates from EIT -labelled 
programmes: 0  
- Start -ups created as a result of 
innovation projects: 0  
- Start -ups supported by KIC: 100  
- Investment attracted by start -ups 
supported by KIC: 27,900,000.00 
EUR  
- Success stories submitted and 
accepted by EIT: 26  
- External participants* 
(individuals) in EIT RIS 
programmes: 0  
- External participants* 
(organisations) in EIT RIS 
programmes: 7  
- Financial Sustainability; revenue 
of KIC LE: 6,620,836.00 EUR  
- Financial Sustainability; FS 
coefficient: 19.94%  
 EIT Core KPIs 2013 -2017  
- EIT-labelled programme 
graduates: 0  
- New or improved products/ 
services/ processes launched: 7  
 
 
EIT Core KPIs 2017  
- Start -ups created by students &  
graduates from EIT -labelled 
programmes: 0  
- Start -ups created as a result of 
innovation projects: 3  
- Start -ups supported by KIC: 34  
- Investment attracted by start -ups 
supported by KIC: 3,601,433.00 
EUR  
- Success stories submitted and 
accepted by EIT : 8  
- External participants* 
(individuals) in EIT RIS 
programmes: 0  
- External participants* 
(organisations) in EIT RIS 
programmes: 12  
- Financial Sustainability; revenue 
of KIC LE: 7,148,045.45 EUR  
- Financial Sustainability; FS 
coefficient: 21.69%  
 
 
103 10.6. Annex 4B:  key achievements and challenges as outlined in the EIT 
interim evaluation130:  
Key achievements  
 
The EIT evaluation has come to the conclusion that the rationale behind the 
establishment of the EIT is still valid. The EIT/KICs model which aims at contributing to 
the development of the EU and Member States innovation capacity in order to tackle 
societa l challenges, through the integration of the knowledge triangle131, is unique and 
highly relevant.  It targets major structural weaknesses of the innovation capacities in the 
EU (in key thematic areas) such as the limited entrepreneurial culture, the low level of 
cooperation between academia and industry and the insuffic ient development of human 
potential, and aims to contribute to closing the innovation gap between the EU and its 
key competitors.   
 
The EIT and the KICs contribute to the Horizon 2020 specific objectives on "societal 
challenges" and on "Leadership in enab ling and industrial technologies". In particular as 
a result of the strong involvement of industrial participants, KICs innovation activities 
brought solutions closer to the market and paved the way for industrial and commercial 
implementation in areas of societal challenges. The KICs innovation projects comprise 
demonstrators, pilot plants, proofs of concept and help develop solutions in response to a 
specific business opportunity.   
 
The EIT -KICs model delivers concrete results. The first wave KICs132 has g ained 
recognition for its activities in the areas of innovation, entrepreneurship and education133. 
The EIT and the KICs add value beyond national initiatives, primarily by focusing on the 
integration of the knowledge triangle, building new types of cooperat ion links and 
facilitating cross -border interactions.  
 
The co -location centres (CLCs)134  represent a key aspect of the KICs´ business model 
needed to deliver concrete results on the local level and have an impact on local 
innovation ecosystems in thematic areas. They have been instrumental for widening the 
KICs’ geographical scope to EU's moderate innovation performers. CLCs have 
successfully built links with local governments and other institutions or organisations 
where they are located. However, further efforts are needed for the KICs to become fully 
integrated into the local innovation ecosystems. Furthermore, KICs' support to the 
organisations from EU -13 Member States135, while better than the average of Horizon 
2020, remains limited to a small number of these Member States.   
 
KICs cross -border operations give KIC partners and beneficiaries access to peers, 
investors and customers that they might otherwise find difficult to identify and build 
links with.  
 
The EIT educational programmes attract high calib re students. Graduates from EIT 
labelled courses appreciate the multidisciplinary approach, combining technical 
knowledge with entrepreneurial and innovation education, the direct access to businesses 
and the international mobility. However, their integrat ion in KICs innovation and 
                                                           
130 SWD (2017) 351 final  
131 Knowledge triangle refers to the interaction between research, education and innovation and to an attempt to better link toge ther 
these key concepts which are key drivers of a knowledge -based society.  
132 EIT Climate -KIC, EIT Digital and EIT InnoEnergy  
133 EIT (2017), Our Impact from 2010 to 2016, pp. 34 -39, provides examples of this recognition.   
134 Co-location centre means a geographical area where the main knowledge triangle partners are based  and can easily interact, 
providing the focal point for the KICs’ activity in that area.  
135 Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Romania, Slovakia and Slovenia  
 
104 entrepreneurship activities is still under -exploited and there is room for improvement. 
Furthermore, KICs´ education activities did not generate so far a significant number of 
student -led start -ups.  
 
While taking into account th e evidence about the concrete results achieved by the EIT in 
the past years, the impacts are mainly limited to the partners (especially higher education 
institutions and companies), graduates and start -ups that have directly cooperated with 
the KICs. When extending the analysis to the systemic impacts of the EIT, the evidence 
is less clear.  
 
The potential of the EIT and the KICs to contribute to EU policy -making in specific 
fields is apparent although this potential has not been utilized at its best. The K ICs´ 
efforts to address national and regional administrations and authorities, in particular those 
involved in designing and delivering Research and Innovation Strategies for Smart 
Specialization (S3) should be improved.  
 
The administrative expenditure of  the EIT has been steadily decreasing over time and is 
significantly below the 5% threshold set out for Horizon 2020. The time required for the 
EIT to finalise the grant procedure has steadily decreased overtime.  In 2016 the average 
time to grant was five  months.   
 
The KICs´ external revenues mostly originate from membership fees but also from 
sponsorships, educational services, revenue sharing agreements, equity participation, 
consulting services, third party (mainly national and regional) grants. The KI Cs' capacity 
to achieve financial sustainability is an issue and it may be challenging for KICs to 
become fully self -financing after 15 years, while maintaining the full range of knowledge 
triangle activities. Activities which generate less income (e.g. ed ucation ones) would be 
under particular risk as well as other activities with a limited market value. This is 
confirmed by the High Level Group report of 2016136.  
 
The EIT model is unique among the EU and Member States innovation support 
initiatives in tack ling relevant societal challenges through strengthening cooperation 
between partners in business, higher education and research – KTI.137 The KICs have 
been successful in involving the diversity of actors in the knowledge triangle, thus 
contributing to reduc e the fragmentation in their sectoral ecosystems. Better 
dissemination of information about the KTI model, both within the KICs and beyond, in 
order to make it better understood and foster the implementation of the model in practice, 
is however needed.  
 
KICs are perceived as communities with a fairly balanced representation of all 
knowledge triangle actors. Furthermore, KICs managed to attract the most relevant 
European actors in their respective fields. Most KICs have gone beyond the ‘classical’ 
actors of the knowledge triangle to also involve other actors such as public authorities 
(e.g. EIT Climate -KIC) and civil society organisations (e.g. EIT Health) and also actively 
participated in EU initiatives that promote partnerships among the EC, governments and  
private actors (e.g. EIT InnoEnergy involvement in the Strategic Energy Technology 
Plan's various working groups).   
 
                                                           
136 Report of the High Level Group on the  EIT set up by Commissioner Tibor Navracsics, 2016, pp.8 and 9; 
https://ec.europa.eu/education/sites/education/files/eit -hlg-final-report_en.pdf     
137 Knowledge Triangle Integration  
 
105 The flexibility of the EIT model is suitable and allows for testing potential new initiatives 
in the area of innovation support, e.g. the EIT Regional Innovation Scheme initiative.  
 
The cross -KICs interactions, through the active support of the EIT, have been steadily 
increasing. They have resulted in mutual learning and sound evolution of KICs 
governance and management model.  
 
Key challenges  
 
Key challenges that would need to be addressed to improve the EIT/KIC model have 
been identified and are presente d below:  
 
 Strengthening the EIT/KICs model as a relevant mechanism at EU level in 
addressing key societal challenges and delivering on Horizon 2020 objectives, in 
particular, to further improve the linkages between the knowledge triangle 
activities, especially between innovation and business creation activities  
 
 Better articulating the EIT model and objectives, and further raise the awareness 
of the EIT brand through strengthening the EIT/KIC communication efforts with 
a focus on concrete examples, ca se studies, success stories, results achieved and 
impact.  
 
 Encouraging cross -KIC collaboration and ever stronger participation of the 
private sector, in particular SMEs, in KICs activities.  
 
 Making the selection process (through which KICs provide support  to innovation 
projects) more transparent and communicate the selection results to the wider 
KIC community more efficiently.  
 
 Ensuring synergies and complementarities with other innovation initiatives at EU, 
national and regional level at both implementati on and programming level;  
 
 Increasing the dialogue and interaction with policy -makers at EU, national and 
regional level with a view to better contribute to EU policy -shaping in respective 
fields of action;   
 
 Improving the practical integration of KIC ac tivities within regional and local 
innovation ecosystems and enhance cooperation with regional and local 
innovation actors, in particular, through better use of the co -location centres, for 
inter-regional cooperation.  
 
 Increasing further the attractiveness  and competitiveness of KICs' education 
programmes by better monitoring the education offer, in view of improving 
recruitment procedure and ensuring a high quality, with the goal of increasing 
KICs´ outreach and reduce the drop -out rate at the application stage; fostering and 
sharing experience across KICs; strengthening the EIT label, and systematically 
monitoring the skills acquired, and the outcomes and impact of the courses;   
 
 Taking concrete actions to link KICs and public -private partnerships with si milar 
goals, in order to promote new and emerging curricula in a variety of industrial 
sectors  
 
106  
 Exploring synergies with Commission's skills development policies and further 
promote the human capital, entrepreneurial and digital skills development in both 
formal and informal / non -formal contexts as important elements in any 
successful innovation eco systems, in particular at the design of KICs educational 
programmes.  
 
 Fostering an entrepreneurial mind -set at a broader scale by going beyond formal 
education and engaging inter alia in executive education, short courses, online 
learning and vocational t raining including professional development.  
 
 Enhancing efforts in making KICs’ management structures more efficient and 
effective.   
 
 Measuring and reporting more extensively on activities and achievements related 
to EU policy priorities in thematic areas ; further improving and reviewing the 
system for monitoring the implementation of EIT and KICs' activities towards 
Horizon 2020 objectives in order to better measure and capture their direct and 
indirect results and impact, and taking measures that would a llow to better assess 
the cost effectiveness of KICs in achieving their results.  
 
 Exploring ways to optimise the administrative procedures and reduce the burden 
imposed on KICs’ operations, while making sure the data to assess the actual 
performance is col lected.  
 
 
 
107 10.7. Annex 5:  Discarded policy options regarding the EIT under 
Horizon Europe  
As part of the Horizon Europe Impact assessment, taking into account the stakeholder 
input and suggestions on the improvement of the EU R&I partnership landscape, the 
following policy alternatives regarding the EIT’s future role and operation have been 
considered and discarded.  
Reduction/Discontinuation of EIT KICs interventions  
The EIT is highly relevant and has a clear EU added value as there is no other instrument 
that builds EU -wide ecosystems of education, research, business and other stakeholders 
(EIT interim evaluation). The reduction of the EIT scope of its intervention or a full or 
partial phasing out of KICs from the current operating model would bear severe 
implications and negative impact on the knowledge triangle integration development, the 
research and innovation p erformance and the overall research and innovation landscape 
in Europe.   
Continuation of strategic approach to EIT/KICs as implemented under Horizon 2020   
EIT/KICs would operate on the basis of initial objectives, scale and operating modes. 
The key challe nge of rationalization of the European R&I partnerships landscape in line 
with the overall objectives of the future Horizon Europe Programme would not be 
realised. The coherence between the EIT and other EU innovation policy initiatives and 
instruments at programming as well as implementation level would not be matched. The 
key difference between hereby discarded option and the baseline option analyzed in the 
main body report lies in the proper alignment of the EIT operations with the requirements 
of Horizo n Europe programme in case of baseline option.   
Direct integration of KICs into the Framework Programme (without EIT)   
As confirmed by the past evaluations, the EIT model comprising the EIT and its 
Knowledge Innovation Communities (KICs) is valid and work ing well. The EIT has 
tailored its support structure to the specific needs and goals of the KICs by providing 
coordination and steering (i.e. requirements for setting up KICs, performance based 
funding, simplification). Through systematic focus on cross -KIC activities, sharing of 
best practices and integrating lessons learnt from the past, the EIT has built up 
knowledge and experience on which each KIC can draw (i.a. framework for guidance to 
set up new KICs). In turn, the KICs provide the EIT with practica l insights and feedback 
on what works on the ground and what does not (thus increasing effectiveness and 
synergies).   
  
The EIT/KIC model is based on a long -term approach to innovation, i.e. KICs are set up 
bearing in mind a long -term perspective to achie ve the impact and their sustainability 
beyond the direct public financial support. The EIT provides a wide range of services, 
from education, training and coaching, building and maintaining networks where young 
entrepreneurs and enterprises connect with fu ture partners and investors in order to take 
up the research results and bringing them to the market. This goes far beyond the 
management of EU contracts and projects. The EIT has thus built up a wealth of 
knowledge and experience on innovation that is uni que at a European scale and 
decoupling of EIT and KICs would cause the effectivity loss. The gradually built -up EIT 
Community of regular exchange, mutual support and trust would disappear.  Further, the 
current efficiency at the EIT central management leve l as well as in the management of 
KIC operations would be lost.  
 
108 10.8. Annex 6:  Selection criteria for establishing KICs  
The Commission proposal for establishing the Horizon Europe programme stipulates that 
European Partnerships, including KICs, should be selected, implemented, monitored, 
evaluated and phased -out according to five criteria as outlined in Annex III of the 
proposal138. In that light it is necessary to asse ss to what extent the new Horizon Europe 
criteria framework on partnerships covers the aspects of the current KIC selection 
criteria, and whether there is a need for additional selection criteria specific to KICs.  
Table 1 provides a mapping of the proposed criteria for the selection of European 
Partnerships and the criteria the EIT currently uses for the selection of proposals to 
establish a KIC139. The results suggest that the new criteria cover well most of the aspects 
of the current selection criteria for KICs, and only minor deviations (i.e. additional 
criteria) will be needed to reflect KICs’ specificities.  
 
Annex 9 provides analysis of possible thematic areas for future KICs taking into account 
criteria for selection  and implementation of European partnerships.  
 
Table 1: Mapping of criteria for selection of KICs and the criteria for establishing 
European Partnerships.  
Criteria for selection of KICs  Criteria for establishing 
European Partnerships  Assessment  
1.1. Strategic approach : 
relevance, specificity and value -
added of the strategic approach and 
proposed focus within the theme; 
applicability of the KIC model to 
tackle the societal challenge(s) of 
Horizon 2020 via a 
multidisciplinary approach by 
integrating the Knowledge 
Triangle and fostering 
entrepreneurship and innovation 
throughout Europe  Evidence that the European 
Partnership is more effective in 
achieving the related objectives 
of the Programme, in particular 
in delivering clear impacts for 
the EU and its citizens, notably 
in view of delivering on global 
challenges and research and 
innovation objectives, securing 
EU competitiveness and 
contributing to the strengthening 
of the European Research and 
Innovation Area  and 
international  
commitments;  Overall the criteria are well 
aligned.  
Assessment of the extent to 
which a KIC is more effective 
than other forms of partnerships 
in achieving the related 
Programme objectives should be 
carried out as part of the EIT 
SIA.  
1.2. KIC partnership innovation 
potential : Innovation potential of 
the partnership to implement the 
KIC’s strategy, demonstrated by 
the combined strength and quality 
of the partners (including SMEs), 
forming a diverse, balanced, 
collaborative and world -class 
partnership  
1.3. Synergies : Demonstrate value 
added and readiness to establish 
concrete synergies and 
complementarities, positioning of 
the KIC vis -à-vis other relevant 
public, private and third sector 
initiatives at EU and other levels  Coherence an d synergies of the 
European Partnership within the 
EU research and innovation 
landscape  The criteria are well aligned  
2.1. Operations : The quality of the 
KIC leadership team profiles 
(management and governance Transparency and openness of 
the European Partnership as 
regards the identif ication of Alignment can be achieved by 
pursuing one of the two options:  
- Set general standards for all 
                                                           
138 European Commission (2018) Proposal for a Regulation of the European Par liament and of the Council establishing Horizon 
Europe – the Framework Programme for Research and Innovation, laying down its rules for participation and dissemination, 
COM(2018) 435 final. Annex III  
139 EIT (2017) Call for KIC proposals 2018 - Evaluation Cr iteria, 02519.EIT.2017.I.GB46. 
<https://eit.europa.eu/sites/default/files/evaluation_criteria_call_for_kics_2018.pdf>  
 
109 Criteria for selection of KICs  Criteria for establishing 
European Partnerships  Assessment  
teams); effectiveness of the 
operational structure including 
selection and connectivity of 
colocation centres and 
demonstration how the Knowledge 
Triangle Integration approach will 
be implemented on the operational 
level  priorities and objectives, and the 
involvement of partners and 
stakeholders from different 
sectors, including international 
ones when relevant  KICs regar ding the 
requirements for selection of 
specific thematic priorities 
and involvement of partners 
and stakeholders  
- Amend the selection criteria 
and request all applicants to 
reflect the proposed principles 
for selection of priorities and 
involvement of partn ers, and 
stakeholders in the proposals 
for KICs’ partnership (at the 
application stage).  
2.2. KIC business model and 
financial plan : feasibility of the 
KIC’s business model and 
financial plan (including EIT and 
non-EIT resources) for attracting 
financial resources and achieving 
financial sustainability in the long 
term; a plan for the management 
and exploitation of intellectual 
property supporting the KIC’s 
business model.  Ex-ante demonstration of the 
partners’ long term commitment, 
including a minimum sha re of 
public and/or private 
investments  The criteria are well aligned  
3.1. Impact and KIC scoreboard : 
planned pan -European impact on 
the societal challenge, human 
capital, job creation, economic 
growth demonstrated by the 
strategy; quality and relevance o f 
the outreach (in particular EIT 
Regional Innovation Scheme); 
relevance and feasibility of the 
expected outcomes, outputs and 
Key Performance Indicators (KPIs) 
included in a KIC Scoreboard and 
their contribution to the EIT 
Scoreboard  Ex-ante demonstration  of 
additionality and directionality 
of the European Partnership, 
including a common vision of 
the purpose of the European 
Partnership. This vision will 
include in particular:  
- identification of measurable 
expected outcomes, 
deliverables and impacts 
within specific timeframes, 
including key economic value 
for Europe;  
- demonstration of expected 
qualitative and quantitative 
leverage effects;  
- approaches to ensure 
flexibility of implementation 
and to adjust to changing 
policy or market needs, or 
scientific advanc es; 
- exit-strategy and phasing -out 
measures  The criterion for European 
Partnerships is broader and will 
require some integrations to the 
corresponding KICs’ selection 
criteria.. However, some 
elements are already covered 
under other KIC selection 
criteria:  
- KICs should demonstrate 
leverage effects when 
outlining their business model 
and financial plan as well as 
the expected synergies.  
- KICs should demonstrate 
approaches to ensure 
flexibility of implementation 
under the proposed plan of 
operations  
- Maximum du ration of the 
financial support is indicated 
in the EIT Regulation;  
- KIC exit strategy (including 
long-term financial 
sustainability) should be 
outlined in the KIC business 
model and financial plan.  
  
 
110 3.2 Dissemination of results and 
communication : dissem ination 
plans for KIC results, including 
sharing good practices within, 
between and beyond the KICs, 
across EU Member States, regions 
and institutions to ensure a 
widening of the reach of the EIT 
and increase of its impact; quality 
and relevance of the KIC  
communication strategy including 
the contribution to building the 
EIT brand identity  Key elements are covered by the 
criteria “Evidence of 
effectiveness in achieving the 
objectives of the Framework 
Programme” and “Openness and 
transparency” where partners hip 
proposals have to describe 
mechanisms related to 
communication and 
dissemination of results.  The EIT criteria has a scope that 
includes (and goes beyond) what 
is covered by the relevant 
Horizon Europe partnership 
criteria.  
 
Source: IA support study of SQW  
 
 
 
 
 
 
 
 
 
 
  
 
111 10.9. Annex 7:  Social network analysis of KICs’ partnerships  
 
The Social network analysis140 examines the level and intensity of cooperation between 
the KICs partners and supports some of the statements in the problem definition as well 
as in the impact analysis section of the main IA report, in particular those related to the 
transparency, openn ess, effectiveness and efficiency of the activities and operations of 
the KICs.  
 
The analysis covers the first three KICs as they are most mature: EIT Digital, EIT 
Climate, and EIT InnoEnergy. It is based on four main indicators: density and 
distribution of the network, distribution of KIC beneficiaries by a number of projects and 
by a number of partners as well as the distribution of funding . The data on KICs’ 
partners has been extracted from KICs Business Plans for 2014 – 2017141 manually as 
well as by the use of automatic text analysis and extraction algorithms.  
 
The analysis came with three main findings:  
 
 EIT Digital and EIT Climate KIC have developed relatively dense networks of 
partners, whereas the network of EIT InnoEnergy  proves to be more fragmented 
segregated around  three clearly pronounced clusters.  
  
 All three KICs have a large share of partners (ranging between 30% in EIT 
Digital and 83% in EIT InnoEnergy) that participated in less than three projects 
and engaged in p artnerships with a small number of organisations in the period 
2014 – 2017.  
 
 The funding is highly concentrated - 5% of the organisations claimed between 
31% (EIT Digital) and 64% (EIT InnoEnergy) of - the total funding for a 
respective KIC in 2016 and 20 17. When excluding the KIC central offices and 
co-location centres, then the top 5% of the beneficiaries receive from 30% (EIT 
Digital) to 43% (EIT Climate KIC) of total EIT KAVA funding.  
 
EIT Digital  
 
The social network analysis suggests (see figure B4-1) that the partnership structure of 
EIT Digital cannot be characterised as fragmented. The figure demonstrates that there is 
only one large cluster and no separate islands of organisations are visible. The results 
remain valid when additional constrain ts are introduced to the network, such as limiting 
the network to organisations that cooperate frequently (see figure B4 -2) or introducing 
budgetary constraints (see Notes below figures B4 -1 and B4 -2). The density of the social 
network142 is 0.195 (with maxi mum possible value of 1) further strengthening the 
conclusion that all participating organisations are strongly clustered.  
 
  
                                                           
140 This analysis has been carried out by ICF and was part of the study to support the Impact assessment of the EIT, Annex B4, pp . 
130-sq. 
141 For EIT Climate it covers 2015 -2017, because the received Business Plan for 2014 did not contain the relevant Annexes.  
142 Density - proportion of direct ties in the network compared to the total number of possible ties.  
 
112 Though the organisations are in a cluster, around 30% of beneficiaries of EIT Digital 
participated in one or two projects and eng aged with less than 11 partners (see Figure B4 -
3 and B4 -4). Sparse participation could indicate weak ties within the cluster or the 
disparities between the small number of core and the large number of peripheral partners. 
In fact, seven organisations (5% o f all partners) claimed 31% of the funding in 2016 -
2017. If the estimates exclude KIC central offices and co -location centres, then the top 
5% (7 organisations) claimed approximately 30% of the funding.  
 
Source: EIT data; IA support study of SQW  
Figure B4-1. Social network of all organisations that 
participated in EIT Digital (2014 -2017)  
 Figure B4 -2. Social network of organisations that had 5 or 
more cooperation’s in EIT Digital (2014 -2017)  
 
 
 
Source: SQW estimates, based on EIT Digital Business Pla ns (2014/2015/2016/2017)  

 
113  
Source: EIT data; IA support study of SQW  
 
EIT Climate KIC  
 
The social network of organisations participating in the EIT Climate KIC looks 
similar to the EIT Digital one (see figures B4 -5). There is one large cluster without 
an indication of smaller islands of activities. The density of this network is 0.219. 
This result also stands with additional constraints (see figure B4 -6).  
 
  Notes:  
1. The number 
inside blue 
circles refers to 
a unique 
identifier of an 
organization 
that 
participated in 
EIT Digital 
2014 -2017;  
2. The width of 
the grey line 
indicates the 
number of 
cooperation’s 
organisations 
had;  
3. The results 
changes 
marginally 
when budgetary 
constraints of 
EUR 10,000 or 
EUR 100,000 
were 
introduced in to 
the social 
networks.  
 Figure B4 -3. Number of organisations that in 2014 -2017 partnered up with a specified number of unique 
partners in EIT Digital pro jects  
 
 
Figure B4 -4. Number of organisations that in 2014 -2017 participated in a specified number of EIT 
Digital projects  
   53 
21 23 
16 
9 9 9 10 9 5 
0102030405060
 1-10  11-20  21-30  31-40  41-50  51-60  61-70  71-80  81-90 91+No. of KIC beneficiaries  
Number of partners  
57 
28 26 
12 14 19 
5 1 2 
0102030405060
 1-2  3-5  6-10  11-15  16-25  26-50  51-75  76-99 100+No of KIC beneficiaries  
Number of projects  
 
114 However, 47% of KIC beneficiaries participated in only one or two projects (see 
figure B4 -7). This implies that even though there is a strong singular cluster, some 
organisations are weakly integrated into the system. In addition, this also indic ates 
that activities are strongly concentrated around several organisations. This claim is 
further supported by the fact that 11 organisations (5% of all organisations that 
participated in EIT Climate in 2016 -2017) claimed 52% of the budget. If the 
estimat es exclude KIC central offices and co -location centres, then top 5% (10 
beneficiaries) claimed approximately 43% of the funding. This disparity in funding 
is much stronger in EIT Climate KIC in comparison to EIT Digital.  
 
Figure B4 -5. Social network of a ll organizations that 
participated in EIT Climate (2015 -2017)*  Figure B4 -6. Social network of organisations that had 5 or 
more cooperation’s in EIT Climate (2015 -2017)*  
  
  
 
Source: SQW study and estimates, based on EIT Climate KIC Business Plans (2015/2016/2017)  

 
115  
  Notes:  
1.The number inside blue circles refers to a unique identifier of an organization that participated in EIT Digital 2014 -2017;  
2.The width of the grey line indicates the number of cooperation’s organisations had;  
3.The results changes marginally when budgetary constraints of EUR 10,000 or EUR 100,000 were introduced in to the social networks.  
* The 2014 data was excluded from the analysis as we did not have access to the complete Business Plan for that year  
 
Figure B4 -7. Number of organisations that in 2015 -2017* partnered up with a specified number of unique partners in EIT 
Climate KIC projects  
 
 
 
 
 
 
Figure B4 -8. Number of organisations that in 2015 -2017* participated in a specified number of EIT Climate KIC 
projects  
 
 
 
 
Source: Own estimates, based on EIT Climate KIC Business Plans (2015/2016/2017)  
* The 2014 data was excluded from the analysis as we did not have access to the Business Plan from that year  28 33 41 
17 14 56 
33 35 
14 
0102030405060
 1-10  11-20  21-30  31-40  41-50  51-75  76-99  100-150  151+No. of KIC beneficiaries  
Number of partners  
126 
65 
33 
22 14 9 
1 1 
020406080100120140
 1-2  3-5  6-10  11-15  16-25  26-50  51-75  76+No. of KIC beneficiaries  
Number of projects  
 
116 EIT InnoEnergy  
 
Unlike other KICs, EIT InnoEnergy is more fragm ented. Figure B4 -9 shows that 
organisations participating in the EIT InnoEnergy are divided into three pronounced 
clusters, while a large number of organisations are on the outskirts. Figure B4 -10 
provides additional insight by showing that after removing all organisations that 
participated in EIT InnoEnergy only several times (less than 5), the network becomes 
very thin. This implies that the fragmentation seen in figure B4 -9 is due to some 
organisations only participating in EIT InnoEnergy ones or twice, and hence not having 
had the chance to work with many partners. A low Social network density of 0.116 
further supports this conclusion. The network in B4 -10 could be considered as the core of 
EIT InnoEnergy community.  
 
The above conclusions are further sup ported by Figure B4 -11, which demonstrates that 
around 83% of all organisations participated in only one or two EIT InnoEnergy projects. 
In addition, 5% (11 organisations) in this KIC claimed around 64% of the overall funding 
in 2016 and 2017. If the estim ates exclude KIC central offices and co -location centres, 
then top 5% (11 organisations) claimed approx. 37% of the funding.  
 
 
 
  Figure B4 -9. Social network of all organizations that 
participated in EIT InnoEnergy (2014 -2017)  Figure B4 -10. Social network of organisations that had 5 or 
more cooperation’s in EIT InnoEnergy (2014 -2017)  
  
Source:  SQW study and estimates, based on EIT InnoEnergy Business Plans (2014/2015/2016/2017)  
Notes: The number inside blue circles refers to a unique identifier of an org anization that participated in EIT Digital 2014 -2017;  
The width of the grey line indicates the number of cooperation’s organisations had;  
The results changes marginally when budgetary constraints of EUR 10,000 or EUR 100,000 were introduced in to the social netwo rks.   

 
117 Figure B4 -11. Number of organisations that in 2014 -2017 partnered up with a specified number of unique 
partners in EIT InnoEnergy projects  
 
 
 
Figure B4 -12. Number of organisations that in 2014 -2017 participated in a specified number of EIT 
InnoEnergy projects  
 
 
 
 52 
29 66 
55 
6 5 3 2 1 4 010203040506070
 1-10  11-20  21-30  31-40  41-50  51-60  61-70  71-80  81-90 91+No. of KIC KIC beneficiaries  
Number of partners  
90 95 
22 
6 6 3 1 
0102030405060708090100No. of KIC beneficiaries  
Number of projects  
 
118 10.10.  Annex 8:  Impact  Indicator Framework  
The Annex 8 sets out the comprehensive Indicator Framework for the EIT and the KICs. The indicator framework is comprised of the system of 
indicators proposed for regular monitoring and review by EIT and the KIC. The Framework also includes a sub -set of indicators recommended for less 
frequent review as part of the evaluative research, which will be timed to coincide with evaluation cycles. The framework com prise the indicators directly 
relevant to economic development outcomes that stem from the three nodes of the knowledge triangle, the indicators associated with cross -KTI outputs 
and the development of ecosystems, and the indicators associated with the performance of KICs in operational terms. The Frame work does not comprise 
the so cietal development indicators, which will be subject to discussion and agreement between the EIT and KICs in terms of definit ions, data sources, 
collection frequencies, etc.  
Category  Indicator  Definition  
Resource  
Current Core 
KPI 
Breakdowns  
Source  
Frequenc y 
Other  
 Note (e.g. changes to Core KPI)  
Outputs  
Education  No. participants completing eligible 
EIT/KIC education courses / 
programmes  Participants should have completed one of the 
following:  
 EIT Label courses/programmes  
 Professional/ workforce courses lasting for 
at least 5 days  
 Other non -degree programmes (e.g. 
Summer schools of 5 days or more and 
other extra -curricular courses such as 
entrepreneurship training of 5 days or more)  
 MOOC/MOOPs of 3 modules or more.  
Unit of analysis is completions, so indi viduals 
completing more than one can be counted 
twice (or more). No. days and modules 
completed are provided based on testing 
feedback but would be subject to agreement 
between EIT/KICs.     
 
    
 Indicator to be expanded to 
include a fuller range  of courses 
to reflect the broader suite of education 
activities of the KICs. The breakdowns 
required will ensure that time -series 
comparisons can be made with data 
already collected on EIT Label courses.  
Breakdown by each type of 
education course/ progra mme. 
The number of days/modules represent 
our recommendation to the EIT and are 
based on the feedback from the testing 
phase.  
 

 
119 Business and 
enterprise  No. businesses supported  To measure the number of business supported 
by KIC activities - using current Core KPI 
definition but extended to businesses of all 
stages, e.g. KICs should justify that the support 
provided contributes to the businesses 
growth/potential growth. Examples of such 
services are mentoring, consultancy (e.g. 
access to finance and markets , product/service 
marketing, legal advice, internationalisation, 
innovation, match -making, etc). The services 
should be provided for a minimum period as 
set by EIT (see “Note” column).     
 
    
 Core KPI broadened to include 
the total number of businesses 
that have received some form of 
eligible support (i.e. not just start -ups).  
Breakdown by: business stage 
(i.e. start -ups up to two years 
old, and established businesses of two 
years old or more); business size 
(i.e. SME and large company); 
and route/type of support received by 
business -supported (i.e. education 
courses/programmes, start-up support, 
innovation projects).  
The current definition used by EIT is 
based on services provided for a total 
period of at least two months. We 
recommend seeki ng to redefine the 
eligibility criteria in terms of person -
days of support provided.  
Research and 
innovation  No. of innovation projects progressing 
towards commercialisation  To measure the number of innovations 
resulting from innovative projects that have  
progressed towards commercialisation, defined 
as one or more of: progress by at least one 
technology or manufacturing readiness level 
(TRL/MRL); prototype/proof of concept/beta 
version developed; product/service/model 
piloted. The definition may be extend ed for 
KIC-specific measures (see “Note” column)     
TRL  
    
 
 The indicator will be useful for 
providing an intermediate 
measure of the progress of innovations, 
and to help in the contextualisation of 
outcome indicators.  
EIT to agree with KICs the 
precise definition for measuring 
progress towards commercialisation, 
due to the use of different measures by 
KICs.  
Indicator to contribute to the 
measurement of Horizon 
Europe impact pathway No.7 –
innovation outputs.  
Research and 
innovation  No. of innovations produced that have 
filed for some form of intellectual 
property (IP) protection  To measure the number of innovations 
resulting from innovative projects (i.e. filings 
for some form of intellectual property   
 
  
   
  
TRL 

 
120 protection - patents, trademarks, regis tered 
designs, copyrights).  
Research and 
innovation  No. of peer reviewed scientific 
publications  No. of peer reviewed scientific publications 
that have been produced as a result of KIC -
funded innovation projects.   
   
WoS    
  Definition aligned with 
Horizon Europe indicator to 
measure number of peer -reviewed 
scientific publications. Indicator to 
contribute to the measurement of 
Horizon Europe impact pathway No.1 
–publications.  
KTI (2+ 
nodes)  No. non -Education partners involved 
in Education activities  To measure the number of business and other 
non-Education organisations (e.g. tertiary 
sector organisations) that are involved in KIC 
education programmes. Involvement defined as 
any form of formal engagement, from 
attendin g an education service to involvement 
in the delivery of education programmes.    
 
    
  It is important to note that 
although it is not immediately 
obvious what 'good' performance 
means for this indicator, it is designed 
to provide contextual information when 
analysed in combination related 
indicators that measure the extent of 
knowledge triangle integration (e.g. 
Network strength analysis). It also 
enables an assessment of any 
particularly high or low concentrations 
by location.  
KTI (2+ 
nodes)  No. non -business partners involved in 
business start -up activities  To measure the number of education, research 
and other non -business organisations (e.g. 
tertiary -sector organisations) that are involved 
in KIC start -up activities/programmes. 
Involv ement is defined as any type of formal 
engagement (e.g. attending a start -up 
service/activity, involvement in the delivery of 
start-up activities/programmes).    
    
  As above.  
Operational  No. of organisations 'engaged' with 
the RIS (by engagement frequency)  To measure the number of organisations that 
have engaged with each KIC who have also 
engaged with the RIS – covering the origin of 
the partner and destination of the engagement 
(i.e. location and route/type of support).  
Engagement should be a fo rmal and active 
participation that has involved dedicating time, 
resources or funding to an activity.    
 
    
  Disaggregated in terms of the 
type/intensity of engagement 
(classified from low to high -intensity 
engagement, and the frequency of 
engagement).  
Location to include the origin of 
the partner and destination of 
the engagement  – e.g. location(s) in 

 
121 which engagement occurs.  
This indicator provides 
important contextual 
information when analysed in 
combination with related outcome 
indicat ors linked to KIC performance 
in RIS countries (e.g. to inform steps 
towards improving the performance of 
'modest and moderate' innovators) and 
provides evidence on countries with 
high or low concentrations.  
Operational  No. and % of partners from EIT RIS 
countries  As per indicator name.  
   
    
 Core KPI expanded to all 
'engaged' organisations and 
whether they have engaged with RIS 
countries.  
 
Operational  Measure of operational efficiency 
(e.g. time to grant)  To measure operational efficiency, two  
“options” are proposed, as follows:   
 time to grant - % of grants signed within a 
pre-determined time frame (90 days)  
 grant utilisation rate – % grant utilised each 
year    
   
 Following the testing phase, we 
recommend that the EIT select 
one or both of the proposed “options”, 
through an agreement with the KICs.  
Operational  No. of partners making financial 
contributions to the KIC  To measure a number of partners and donors 
making cash and in -kind contributions, to be 
broken down as follows:  
 contributions to KIC KAVA and KCA 
activities  
 contributions to fund KIC operations (e.g. 
membership fees)   
  
    
 Breakdown by nature of 
financial contribution and 
route/type of support received by 
business receiving investment (e.g. 
education courses/ programmes, start -
up support, innovation projects). 
Financial contribution breakdowns 
include:  
 contributions to KAVA and KCA 
activities  
 contributions to KIC operations (e.g. 
membership fees)  
Following testing with KICs, we 
propose the following 
breakdowns by the size of the financial 

 
122 contribution, as follows:  
 EUR 0 to 9,999k  
 EUR 10,000 to 49,999  
 EUR 50,000 to 99,999  
 EUR 100,000 to 249,999  
 EUR 250,000 to 499,999  
 EUR 500,000 to  999,999  
 EUR 1,000,000 plus  
  
 
123 Short -term Outcomes  
Economic 
development  Value of private / public investment 
mobilised / attracted within N years 
by supported businesses  To measure the EUR value of private / public 
capital attracted by businesses in receipt of 
KIC support (as under output indicator above) 
or receipt of innovation project funding, within 
a three years post -support (e.g. last received 
KIC KAVA support activity).   
  
 
    
 Core KPI expanded to the value 
of investment attracted by 
businesses supported across activities 
(as defined in output indicator above) 
and also including those in receipt of 
innovation project funding.  
Breakdown by route/type of 
support received by business 
receiving investment (e.g. education 
courses/programme s, start -up support, 
innovation projects)  
Economic 
development  No. start -ups created and surviving 
for 12 months  To measure the number of sustainable start -ups 
created as a result of KIC activities, e.g. 
entrepreneurship support, innovation projects, 
graduate training. Outcome eligible once a 
business has started trading and been trading 
for 12 months.    
 
 
  
   
 Breakdown by route/type of 
support received by each start -
up created (e.g. education courses/ 
programmes, start -up support, 
innovation projects).  
Data collection will draw 
on a mix of research, 
combining programme/monitoring data 
with a rolling survey with start -ups 
created as a result of KIC activities one 
year after they are established, where 
necessary.  
There is scope to extend to 3 years 
post-establishment.  
 
Economic 
development  No. and % of businesses supported 
that reported growth in either 
employment or turnover  To measure the number and % of businesses 
that report employment and/or turnover growth 
that is attributable to KIC sup port. The 
indicator will be dependent on self -reporting. 
% should be based on a sample, and then no. 
calculated through appropriate scaling up and 
weighting to respondent profile.    
 
    
 Breakdown by route/type of 
support received by an 
organisation supported (e.g. education 
courses/ programmes, start -up support, 
innovation projects).  
Rolling survey of organisations 
in receipt of KIC support at set time 
intervals (i.e. 1, 3 and 5 years post 
support).  

 
124 Ecosystem 
development  No. and % of participants in education 
programmes that are:  
 in employment relevant to the KIC  
 in intrapreneurial roles / roles 
supporting innovation in their 
organisation  
 in managerial roles  
 contributing to KIC activities (e.g. 
roles on EIT innovation projects)  
 To be  measured through follow -on surveys of 
participants, and so dependent on self -
reporting of what participants are now doing. 
This does not need to be attributed to their 
participation in education programmes. % 
should be based on a sample, and then no. 
calculated through appropriate scaling up and 
weighting to respondent profile.    
 
 
    
 Rolling survey of participants in 
education courses/programmes 
at set time intervals (i.e. 1, 3 and 5 
years post completion).  
Breakdown by each type of 
education course/ programme.  
 
 
Ecosystem 
development  Value of R&D investment changes by 
engaged businesses  A measure of the value of R&D investment 
changes attributable to KIC support based on 
self-reported survey responses.   
  
    
 Breakdown by route/type of 
support received by each start -
up created (e.g. education 
courses/programmes, start -up support, 
innovation projects).  
Rolling survey of organisations 
in receipt of KIC support at set 
time intervals (i.e. 1, 3 and 5 years post 
support).  
 Indicator to c ontribute to the 
measurement of Horizon 
Europe impact pathway No.9 – amount 
of public and private investment 
mobilised.  
Ecosystem 
development  No. products (goods or services) 
launched on the market  A measure of the number of product 
innovations (goods or services) launched on 
the market during and following KIC support 
based on self -reported survey responses. By 
innovations, we mean new or significantly 
improved products (goods or services) sold. 
Innovations should be reported in the year 
when they were in troduced on the market.    
  
    
 Core KPI extended to measure 
over a range of set time -
intervals (i.e. up to 5 years rather than 
only 3).  
Breakdown by route/type of 
support received by each start -
up created (e.g. education courses/ 
programmes, start-up support, 
innovation projects).  
Rolling survey of organisations 
in receipt of KIC support at set 
time intervals (i.e. 1, 3 and 5 years post 

 
125 support).  
Indicator to contribute to 
Horizon Europe impact 
pathway No.7 – the measurement of 
innovations.  
Ecosystem 
development  No. new processes, methods or 
marketing innovations implemented  A measure of the number of processes and 
marketing innovations or new/significantly 
improved methods introduced following KIC 
support over set time intervals based on se lf-
reported survey responses. Innovations should 
be reported in the year when they were 
introduced on the market.    
  
    
 Core KPI extended to measure 
over a range of set time -
intervals.  
Breakdown by route/type of 
support received by each start-
up created (e.g. education courses/ 
programmes, start -up support, 
innovation projects).  
Rolling survey of organisations 
in receipt of KIC support at set 
time intervals (i.e. 1, 3 and 5 years post 
support).  
Indicator to contribute to 
Horizon Europe impact 
pathway No.7 – the measurement of 
innovations.  
Ecosystem 
development  Network strength analysis  Recommendation is to assess the number of 
'nodes' and 'linkages', and their intensity, 
within a defined network map for a KIC (e.g. 
location -based, market - or technology -based). 
This would be an evaluative assessment, which 
would be reproduced to examine changes over 
time.     
 
   
 Reporting in line with timings 
of evaluative research.  
Data collection will draw 
on a mix of research, 
combining programme/monitoring data 
with primary research (e.g. 
surveying/consultations).  
Ecosystem 
development  No. and % high impact (“World -class 
science”) scientific publications  Measured as the number and share of 'high 
impact' (“World -class science) publicatio ns. 
High impact defined using SciVal’s Field -
Weighted Citation Impact (FWCI) measure. 
Indicator to be aligned fully with Horizon 
Europe indicator.   
     
 Definition aligned with 
Horizon Europe indicator to 
measure “World -class science” 
impacts. Indicator to contribute to the 
measurement of Horizon Europe 
impact pathway No.1 –world -class 
science.  

 
126 Operational  No. success stories submitted to and 
accepted by EIT  To measure the number of good practices or 
success stories presented by KICs to the EIT  
according to a specific format and accepted by 
the EIT including eligible nominees for the 
EIT awards. See the “Note” column for the 
links to evaluative research.   
     
 Reporting in line with timings 
of evaluative research. In 
addition to the numbers of cases, the 
success stories provide the basis for 
case study examples of the ways in 
which impacts are brought about, the 
scope of impacts and the potential scale 
of impacts. These should be 
synthesised to help provide an 
evaluation evidence base , and 
complemented with other in -depth case 
studies to understand instances where 
the EIT/KIC model has proved less 
successful.  
  

 
127 Operational  Value of KIC funding secured from 
partners and other donors  The value of cash and in -kind contributions, 
to be broken down as follows:  
 contributions KIC KAVA and KCA 
activities  
 contributions to fund KIC operations 
(e.g. membership fees)   
  
    
 Breakdown by nature of 
financial contribution and 
route/type of support received by 
business receiving investment (e.g. 
education courses/ programmes, 
start -up support, innovation 
projects). Financial contribution 
breakdowns include:  
 contributions to KAVA and KCA 
activities  
 contributions to KIC operations 
(e.g. membership fees)  
Indicator to contribute to 
the measure ment of 
Horizon Europe impact pathway 
No.9 – amount of public and private 
investment mobilised.  
Operational  Social media/online 
presence/audience  The sum of followers on three major social 
media channels: Facebook, Twitter, and 
LinkedIn.      
SM   
  
  

 
128 Medium - to Long -term Outcomes  
Economic 
development  Cost savings achieved by direct 
participants of KIC support (e.g. as a 
result of implementing new 
innovations)  To measure the value of cost savings achieved 
by direct beneficiaries of KIC support that are  
identified as being due to the support provided 
by the KIC. Values to be estimated in EUR 
and based on self -reported assessment as part 
of follow -up surveys of participants.   
     
 Rolling survey of organisations 
in receipt of KIC support at set 
time intervals (i.e. 1, 3 and 5 years post 
support).   
Indicator to contribute to the 
measurement of Horizon 
Europe impact pathway No.7 – 
economic growth.  
Economic 
development  Jobs created in organisations directly 
benefiting from KIC support  To measure the number of jobs created by 
direct beneficiaries of KIC support that are 
identified as being due to the support provided 
by the KIC. Values to be estimated in FTE 
estimates based on self -reported assessment as 
part of follow -up surveys of participants.   
     
 As above.  
Indicator to contribute to the 
measurement of Horizon 
Europe impact pathway No.8 – total 
employment.  
Economic 
development  Jobs safeguarded in organisations 
directly benefiting from KIC support  To measure the number of jobs safeguarded 
by direct beneficiaries of KIC support that are 
identified as being due to the support provided 
by the KIC. Values to be based on FTE 
estimates based on self -reported assessment as 
part of follow -up surveys of participants.   
     
 As above.  
Indicator to contribute to the 
measurement of Horizon 
Europe impact pathway No.8 – total 
employment.  
Economic 
development  Revenue growth achieved in 
organisations directly benefiting from 
KIC support  To measure the value of revenue growth 
achieved by direct beneficiaries of KIC 
support that are identified as being due to the 
support provided by the KIC. Values to be 
estimated in EUR and based on self -reported 
assessment as part of follow -up surveys of 
participants.   
     
 As above.  
Indicator to contribute to the 
measurement of Horizon 
Europe impact pathway No.7 – 
economic growth.  
  

 
129 Ecosystem 
development  % of businesses that have benefited 
from KIC support that have engaged 
in different forms of innovation 
activities in the last 2 years (defined 
using CIS activities)  A measure of the % of businesses that have 
benefitted from KIC support that have 
engaged in different forms of innovation 
activities, using CIS categories (e.g. In -
house R&D; External R&D; Acquisition of 
machinery, equi pment, software & 
buildings; Acquisition of existing 
knowledge from other enterprises or 
organisations; Training for innovative 
activities; Market introduction of 
innovations; Design, Other).    
    
 As above.  
Ecosystem 
development  Reduction in skills mismatches (e.g. % 
of engaged employers reporting skills 
gaps and skills shortages)  For all employers that have engaged with the 
relevant KIC in any way, to measure the 
extent to which they experience skills 
challenges. Challenges are defined as the % of 
employers (responding to a survey) that have 
reported: i) skills gaps (i.e. they have 
employees that do not have the necessary 
skills to carry out their roles); and ii) skills 
shortages (i.e. they have unfilled vacancies 
because applicants did not possess t he 
required skills).    
    
 Rolling survey of organisations/ 
employers in receipt of KIC 
support at set time intervals (i.e. 1, 3 
and 5 years post support).  
Ecosystem 
development  Policy influence following Horizon 
Europe impact pathways from the 
production of policy -relevant findings, 
to dissemination/engagement, to a 
material impact on policy (e.g. No. 
policies [“approaches” or “practices”] 
influenced [changed or improved])  To assess, using a case -based approach, the 
nature and scope of policies (defined in terms 
of “approaches” or “practices”) that have been 
influenced (i.e. changed or improved) by KIC 
activities.    
 
    
 Breakdown by route/type of 
support that led to policy 
changes or improvements (e.g. 
education courses/programmes, start-up 
support, innovation projects).  
Ad-hoc evaluative 
research, including 
surveys, consultations with expert 
stakeholders and textual analysis to 
identify and verify cases of policy 
influence (potentially as part of 
independent evaluation work).  
Operational  Measure of financial sustainability  To measure the total revenues generated by 
the KIC divided by the total expenditure on    
   
  

 
130 KIC activities (i.e. KAVAs) in year N.  
Operational  Net Promoter Score on overall 
satisfaction with EIT / KICs  To measure the satisfaction of all engaged 
organisations on a scale of 1 -10. The Net 
Promoter Score (NPS) is compiled by 
dividing the total number of EIT/KIC 
'promoters' (defined as those scoring their 
level of satisfaction as 9 or 10) by the number 
of EIT/KIC 'detractors' (defined as those 
scoring their level of satisfaction as 6 or 
below).    
 
 
    
 Breakdown by route/type of 
support received (e.g. education 
courses/programmes, start -up support, 
innovation projects).  
 
 
 

 
131 Symbol  Description  
 Indicator is proposed to be used as part of competitive resource allocation  
 Indicator is a prevailing core KPI (expansions/extensions to Core KPIs, where relevant, are described in the “Note” column)  
 Indicator is fully aligned with the Horizon Europe Indicator Framework  
 Indicator is to be broken down by the route/type of support received (e.g. education courses/programmes, start -up support, innovation projects), or by some other form of 
breakdown by “type” (as described in the “Note” column)  
 Indicator is to be broken down by location (i.e. country, and reported based on RIS and non -RIS countries)  
 Indicator is to be broken down by gender  
 Indicator is to be broken down by type of education course/ programme  
 
TRL  
 Indicator is to be broken down by TRL level (or equivalent measure of progress towards commercialisation  
 Indicator is to be broken down into value banding (in EUR)  
 Data is to be collected using programme/monitoring data  
 Data is to be collected using a survey tool and relies on self -reporting. The relevant survey population is described in the “Note” column  
 
WoS  
 Data is to be collected from the Web of Science (WoS) databased  
 
SM 
 Data is to be collected from each KICs social media (SM) account  
 Data is to be collected, collated, and reported on annually  
 Data is proposed to be collected and analysed in line with evaluative reporting requirements  
 Indicator is intended as a learning indicator, or for use in contextualising a combination of indicators. More detail is prov ided in the  “Note” column  
 Indicator was included in the testing phase of work  

 
 10.11.  Annex 9:  Analysis of possible themes for future KICs  
Introduction  
The EIT Regulation stipulates that “the SIA shall define the priority fields and the long -term 
strategy for the EIT and shall include an assessment of its socioeconomic impact and its 
capacity to generate the best innovation added -value”143. This Annex provides the outline of 
the indicative priority fields for possible future KICs. The analysis is based on the themes 
(=priority fields) proposed by the EIT Governing Board in its Strategic Outline on the Future 
of the EIT144  and reflected in the draft  Strategic Innovation Agenda of the EIT that was 
submitted to the European Commission (DG EAC) in accordance with Article 17.  The 
assessment of the individual priority fields  is based on criteria which are in line with the 
Horizon Europe Programme and ta kes into account the Strategic Planning Process of Horizon 
Europe given the need to ensure synergies and coherence of KICs within the EU research and 
innovation landscape.  
The themes identified and put forward by the EIT Governing Board are:  
1) Cultural and Creative Industries,  
2) Security and Resilience;  
3) Water, Marine, and Maritime;  
4) Inclusion, Integration and Migration.  
These themes were also included in the Open Public Consultation carried out in the period 
10th October to 5th December 2018 by the European Commission (DG EAC). The main results 
of this OPC show that the EU has competitive advantage and can deliver further economic 
growth within these areas due to a strong R&I base.  
The Commission has cross -checked the themes for future KICs prop osed by the EIT by 
applying the criteria listed below. They build on the criteria used by the EIT (under Horizon 
2020) for the themes proposed in the draft SIA that was submitted to the European 
Commission (DG EAC) ; are aligned with the future Horizon Euro pe programme; and are 
complemented with the new requirements for KICs that will be introduced as part of the 
revision of the EIT legal basis:  
1) Alignment of the theme with the thematic clusters of the Global Challenges and 
Industrial Competiveness pillar of the future Horizon Europe programme145   
2) EU economic and R&I strengths and weaknesses in the thematic area  
3) Prospects for financial sustainability of a future KIC in a specific thematic area  
4) Existing bottlenecks for innovation within a thematic area and exten t to which the KIC 
model could address them  
5) Suitability and relevance of the proposed indicator framework (Annex 8) for 
measuring the impacts of a future KIC within a specific thematic area  
 
Process  
                                                           
143 See Article 17 of the EIT Regulat ion  
144 See for more details the strategic outline published by the EIT GB: https://eit.europa.eu/sites/default/files/eit_strategic_outline_0.pdf   
145 The thematic clusters are the following: 1) Health, 2) Inclusive and Secure Society, 3) Digital and Industry, 4) Climate, Energy and 
Mobility, 5) Food and Natural Resources.  
 
133 The following table summarises the process undertaken i n identification of the future priority 
fields:  
 
WHO  WHAT  CRITERIA/OBJECTIVES  OUTCOME  
EIT (with the 
help of external 
experts and the 
JRC) Gap analysis  based on:  
- Mapping of societal challenges 
already addressed by the existing 
KICs  
- Foresight studies , in particular 
the Bohemia study, and aligned 
with the Sustainable 
Development Goals (SDG)s  Criteria : 
- Potential theme should address major 
societal challenges  with a citizen -
centred approach , sufficiently broad  
and based on a variety of foresight 
studie s. 4 thematic areas  have been identified:  
- Security and resilience  
- Inclusion, integration and migration  
- Water, marine and maritime  
- Cultural and creative industries  
 
EIT (with the 
help of external 
experts)  Analysis of the 4 identified 
thematic areas  to verify their 
suitability to the EIT model of 
intervention, and stakeholders 
consultation  (notably through 
INNOVEIT 2017)  Criteria : 
- Fine-tuning of the scope (broad), the 
(societal) challenge  and the citizen -
centred approach . 
- Possibility and advantage for 
Europe  (and complementary or similar 
initiatives).  
- Added value of applying the EIT 
Model  
- Extend to which the area is already 
covered through activities by existing 
KICs The work of the experts has resulted in four 
reports  (outlining the c hallenges, the  
potential impact of addressing them  and  the 
EIT added value), all concluding that  the 
identified challenges could be successfully 
addressed through the establishment of a 
KIC  as this would bring high added value.  
 
The final result consi sts of  4 thematic 
factsheets  included in the draft Strategic 
Innovation Agenda 2021 -2027 submitted to 
the Commission in December 2017.  The 
EIT GB decided to keep the option of an 
open call for KIC  that would be further 
explored in view of responding to an  
emerging challenge in the future . 
European 
Commission 
(with the help of 
external experts 
through a 
support study by 
SQW) Assessment of the themes  
proposed by the EIT against a 
set of criteria complementary  to 
those applied by the EIT and in 
line with Horizon Europe 
Programme.   Criteria : 
- Alignment of the theme with the 
thematic clusters  of Pillar II of Horizon 
Europe Programme.  
- EU economic and R&I strengths and 
weaknesses  in the thematic area.  
- Prospec ts for financial sustainability  
- Existing bottlenecks  for innovation 
within a thematic area and extent to 
which the KIC model could address 
them.  
- Suitability and relevance of the 
proposed indicator framework  for 
measuring the impacts of a future KIC 
within a specific thematic area.  The assessment resulted in 4 reports  on the 
proposed priority fields.  
 
 
European 
Commission  Inclusion of the themes in the 
Open Public Consultation  
carried out in the period 10th 
October to 5th December 2018 by 
the European Commission (DG 
EAC). Objectives : 
- Get stakeholders’ input  on the 
thematic areas proposed by the EIT as 
well as other possible ones.  The main results of this OPC showed that 
the EU has competitive advantage  and can 
deliver further economic growth within the 4 
thematic areas proposed by the EIT due to a 
strong R&I base.  
 
Other areas emerging from the OPC were 
either already addressed to a certain extend 
by the existing KICs or too n arrow to be 
addressed under the EIT KIC model.  
  
 
134 European 
Commission  As part of the Impact 
Assessment, analysis of the 4 
proposed thematic fields 
building on the previous 
analytical steps.  
 
 
 
 
 
 
As preparatory phase of the 
SPP of Horizon Europe, check 
of the coherence and 
complementarity of potential 
themes with potential EU 
partnerships.  Objectives:  
- Identify the thematic areas with the 
potential to be addressed by a KIC 
under Horizon Europe programme.  
- Propose the theme for the first KIC 
to be launche d in 2021.  
- Propose the themes that would be 
designated following theStrategic 
Planning Process (2024 -2027).   
 
Criteria:  
- Coherence and synergies with EU 
R&I and Education landscape  
- Not covered by planned similar EU 
initiatives  
- Fragmentation of th e innovation 
value -chain  
- Suitability of the EIT model to 
address innovation bottlenecks  
- Ability to mobilize investment and 
sufficient market for innovation  
- Modernisation/transformation 
potential of the Education system and 
skills gap  
- Regional dimension  
- Citizen -focus approach  
- Synergies with and complementarity 
to existing KICs  
 The Impact Assessment led to the 
conclusion that the 4 priority fields 
Security and Resilience; Inclusion, 
Integration and Migration; Water, 
Marine and M aritime; and Cultural and 
Creative Industries  are suitable to be 
addressed by a KIC under Horizon 
Europe Programme.   
 
 
 
The analysis also led to the identification 
of Cultural and Creative Industries as the 
thematic priority for the first KIC to be 
launc hed under Horizon Europe as it 
showed the highest degree of maturity of 
all themes in its assessment against the 
proposed criteria and demonstrated 
strong potential to complement and 
synergise with all existing KICs.  
 
Furthermore, as regards the 
complement arity with both the EU 
Partnerships as well as the existing KICs, 
the CCI theme scores higher than the 
three other areas studied.  
 
The remaining 3 thematic areas will be 
further analysed and assessed during the 
Strategic Planning Process (2024 -2027)        
Source: own analysis  
 
 
Specific priority fields  
Cultural and Creative Industries146 
 
Cultural and Creative Industries represent a horizontal solution to an array of rising 
challenges, which are of a permanent nature, and can be addressed through research  and 
innovation activities. These challenges can be grouped into four pillars: 1) Europeans' 
creativity, cultural diversity and values; 2) European identity and cohesion; 3)  European 
employment, economic resilience, and smart growth; and 4) Europe as a glo bal actor.  
  
                                                           
146 Creative and Cultural sectors ( CCS) means all cultural and creative sectors whose activities are based  on cultural values and/or artistic 
and other creative expressions, whether those activities are market -or non -market -oriented, whatever the type of structure that carries them 
out, and irrespective of how that structure is financed. Those activities inclu de the development, the creation, the production, the 
dissemination and the preservation of goods and services which embody cultural, artistic or other creative expressions, as we ll as related 
functions such as education or management. The cultural andcrea tive sectors include inter alia architecture, archives, libraries and museums, 
artistic crafts, audio -visual (including film, television, video gamesand multimedia), tangible and intangible cultural heritage, design, 
festivals, music, literature, performin g arts, publishing, radio and visual arts (EIF)  
 
135 The challenges related to the first Pillar, Europeans’ creativity, cultural diversity, and 
values, affect citizens’ resilience, limit their flexibility, and threaten the preservation of the 
quality of life.147 The following points need to be addressed:  
 Shortage of cross -cutting skills that are needed for innovation and crucial in light of 
labour market changes. Video and computer games, literature, publishing, performing 
and visual arts can offer innovative way s of obtaining skills (e.g. digital skills via 
video games and creativity in general).  
 Innovative practices in heritage services, museums, and libraries and film heritage 
institutions are crucial to reveal the importance of different cultures and can address 
the sense of loss of identity that results from globalization148.  
 
Societal challenges related to the second Pillar, European identity and cohesion,  can 
generally be described in terms of lack of ‘bridges’ connecting different parts of the society 
and include the following:  
 
 Social exclusion. CCIs favour innovative forms of community participation. 
Innovations in design, architecture and the use of public spaces, as well as culture -led 
social innovation, can offer effective ways to raise the quality of life of excluded 
groups.149  
 Development of a European identity: culture regularly tops the list of the factors that 
most create a feeling of community among EU citizens.150 Our creations reflecting our 
common cultural heritage and cultural and linguistic d iversity highlight the importance 
of artistic and creative freedom in Europe and are at the heart of the EU project and of 
the EU identity. There is now evidence that when people have wide access to culture 
(physically or through digital means) and are act ively engaged in cultural activities, 
they are more likely to understand and adopt shared common values. The 2018 
European Year of Cultural Heritage confirmed the importance that citizens attach to 
their European cultural heritage, both national and non -national. Seven European 
citizens in ten agree they feel pride in a historical monument or site, work of art or 
tradition from a European country other than their own, and that living close to places 
related to Europe's cultural heritage can give people a se nse of belonging to Europe 
(both 70%)151. 
 Discriminatory attitudes towards different cultures. European society faces challenges 
regarding the inclusion of immigrants and intercultural dialogue. Literature, film, and 
performing and visual arts are a way of b ecoming familiar with previously unknown 
cultures and innovative solutions in museums and libraries (such as education 
programs, targeted actions to less -represented communities) can foster interaction with 
migrants and counter stereotyping.  
  
                                                           
147 Gustafsson C. and Lazzaro E. (2017). Input to EIT’s Strategic Innovation Agenda. Future EIT Thematic Areas. Expert analysis. Culture, 
Cultural Heritage and Creative Industries.  
148 OMC Report on Promoting Acc ess to Culture via Digital Means: Policies and Strategies for Audience Development, June 2017  
149 OMC Report on Participatory Governance of Cultural Heritage, April 2018  
150 Standard Eurobarometer, 2017  
151 https://europa.eu/cultural -heritage/toolkits/special -eurobarometer -europeans -and-cultural -heritage_en   
 
136 Pillar three, European employment, economic resilience, and smart growth,  addresses 
economic challenges such as u nemployment (especially youth unemployment) and global 
competition for the brightest minds and capital.  Culture -based and creativity -driven 
innovations boost European competitiveness either directly by creating new enterprises and 
jobs or indirectly by creating cross -sector benefits to the wider economy, improving quality of 
life and increasing the attractiveness of Europe . The contribution of cu lture and creativity to 
innovation is not limited to the direct impact of the CCIs, since innovation across -the-board is 
increasingly driven by non -technological factors such as creativity, design and new 
organisational processes or business models. In par ticular, cultural and creative industries 
with distinct value chains (i.e. music, design, fashion, audio -visual, video games, architecture 
…) have a strong innovation capacity in economic terms and are able to drive innovation in 
other sectors of the econo my.152 CCIs are early adopters of new technologies and  often play a 
central role in the digital transformation and integration between the digital and physical 
worlds, which is at the heart of the fourth industrial revolution . The contribution that culture 
can bring to most creative processes in industry, science or services was highlighted in 
various experts’ reports153 . 
A potential future KIC on CCIs should address cross -innovation, the process through which 
creative industries share information, collaborat e and work with other sectors to promote new 
thinking, is key to trigger innovation in other sectors of the economy and help services and 
manufacturing to become more competitive in the global market. CCIs can play a role 
triggering innovation in other sec tors’ value chains and in the creation of new business 
models.  
The fourth pillar relates to the role of Europe as a global actor and aims at addressing 
challenges such as:  
 
 The global dynamic of power is currently shifting, yet EU countries retain significant 
clout in “soft power indexes”, also because of their strong performance when it comes 
to cultural assets.154 In a world that is becoming increasingly inter -connected, IT 
innovations would however be essential to  enhance the dissemination of the c ontent 
created in Europe.  
 Sustainability and Climate change. The United Nations’ Agenda 2030 for sustainable 
development defines culture as a “crucial enabler” of sustainable development. Some 
CCIs (e.g. design, architecture, etc.) contribute actively to t he sustainable development 
and drive green innovation , while cultural content (literature, film and the arts) can 
raise awareness of ecological problems and inform public opinion.  
  
                                                           
152 The content creation process lies at the heart of the CCS i.e. the artistic process. The created content provides input for both the cultural 
as well as the creative sub -sectors of the CCS market. However, beyond the classical CCS sub -sectors, the artistic content created has an 
impact on a wide range of industries that depend on the creative output stemming from CCS: Consumer electronics e.g. TV, Tuners, DVD; 
Telecom services and hardware e.g. smartphones, computers; Industrial design; Tourism e.g. Cultural heritage, historical site s, recreation 
parks; Software; Education e.g. cultural and ter tiary education  
153 Policy Handbook on Promotion of Creative Partnerships, an OMC report from March 2014  
154 https://softpower30.com/wp -content/uploads/2018/07 /The-Soft-Power -30-Report -2018.pdf , the EU has placed seven countries among 
the top ten for culture, which helps keeping five EU countries among the top ten in the global index.  
 
137  The global digital race. New technologies (i.e. ICTs, AI, IoT, blockchain ) are radically 
transforming the way we live, work and communicate. Seven out of 10 largest firms in 
terms of market capitalisation are digital. None are European. European CCIs are 
important generators of content, products and services globally and could play a 
positive role in the creation of new business models and cross -sectoral value chains.  
 
Alignment with Horizon Europe, including with the Global Challenges and Competitiveness 
pillar  
 
The Cultural and Creative Industries theme is aligned with EU priorities. It is included as an 
area of intervention  on Cultural Heritage under the cluster Inclusive and Secure Society  of the 
Global Challenges and Industrial Competitiveness Pillar of the Horizon Europe proposal. A 
future KIC c ould provide valuable horizontal inputs across various activities to be carried out 
in the Inclusive and Secure Society  cluster and the one on Digital and Industry. Furthermore, 
it could efficiently complement other parts of the Horizon Europe Programme, t he 
intervention of the existing EIT Digital and the actions foreseen under the new Creative 
Europe Programme , as well as other EU programmes (Invest EU, cohesion funds, Single 
Market Programme).   
 
Cluster  Areas of 
intervention  Relevant broad lines of acti vities  
Inclusive and 
secure society  Cultural heritage  KIC within the theme can address all lines of activity. It can 
particularly foster connections between emerging creative sectors and 
cultural heritage, embed cutting edge technologies including digital 
ones into heritage studies and sciences, and help cult ural heritage to 
contribute to sustainable development.   
Democracy  KIC within the theme can address the line of activity related to the 
role of multi -cultural citizenship and identities in relation to 
democratic citizenship and political engagement.  
Digital and 
Industry  Manufacturing 
Technologies  KIC within the theme can provide horizontal inputs to most lines of 
activity since creative and cultural inputs are indispensable in the 
development of concepts for new products and are vital to help 
generate  added value.  
 
Economic and research capacities of the sector  
 
Culture and creativity are important assets for the economy. Cultural and creative industries in 
Europe are at the forefront of innovation and at the origin of spill -overs to other sectors. They 
provide more than 12 million full -time jobs, which amounts to 7.5 % of the EU’s work force, 
creating approximately EUR 509 billion in value added to GDP. CCIs in the EU employ 2.5 
times more people than automotive manufacturers and five times more tha n the chemical 
industry.155 
There is an EU trade surplus in cultural goods156 amounting to EUR 8.7 billion. In addition, 
42% of total economic activity in the EU (some EUR 5.7 trillion annually) is generated by IP -
                                                           
155 http://www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&reference=P8 -TA-2016 -0486   
156 Eurostat, 2016 figures, http://ec.europa.eu/eurostat/web/culture   
 
138 intensive industries – which have a strong con nection to CCIs - and approximately 38% of all 
employment in the EU (82 million jobs) is in industries that have an above -average use of IP 
rights.157  
Thriving areas are often places where artistic and cultural producers emerge which puts  
culture high on th e agenda of cities, regions and territories, as recently recognised by the 
OECD.158 As demonstrated by the EU Cultural and Creative Cities Monitor159, leading 
cultural and creative cities are more prosperous,  have more jobs, and more human capital. 
Former industrial cities are therefore putting investment in culture and creativity at the centre 
of their local development strategies to support policy objectives ranging from urban 
regeneration and economic divers ification to job creation and social innovation and cohesion.  
Regional smart specialisation strategies are being implemented across the EU, and around 6% 
of all 1,300 regional smart specialisation priorities refer to culture under different angles (e.g. 
cultural heritage, creative industries, etc.). Culture and creativity are also critical for the 
economic and social development of low -income cities and regions and can further help 
address disparity issues across Europe.  
Europe's cultural diversity depend s on resilient and robust cultural and creative sectors. 
However those sectors, notably the audiovisual  or music sector, are facing a number of 
challenges, as a result of the increased competition from global players and the digital shift. 
Producers, dist ributors, broadcasters, cinema theatres and all types of cultural organizations 
need to innovate in order to attract new generations of audiences   
 
  
                                                           
157 https://www.epo.org/about -us/annual -reports -statistics/annual -report/2016/highlights/economic -impact -of-IP.html   
158 http://www.oecd.org/cfe/leed/venice -2018 -conference -culture/documents/Culture -and-Local -Development -Venice.pdf   
159 https://ec.europa.eu/jrc/en/publication/eur -scientific -and-technical -research -reports/cultural -and-creative -cities -monitor -2017 -editio n  
 
139 Strengths  Weaknesses  
Strong and growing research base. In 
2014, 18.7% of patent publications and 
around 40% of trademarks registered in 
Europe were related to the CCIs.160 The 
number of patents in these sectors have 
been growing during the last years.161 Lack of cooperation  between researchers and research and 
industry . There is a lack of coordination of R&D eff orts, 
sharing of methods, results, and best practices.162 Additionally, 
most of the research is produced in national languages, which 
leads to repetition, as researchers are often unaware of similar 
projects.163 
Europe is the second CCI market in the 
world (2 6% of estimated employment and 
31% of estimated revenues).164 4% of EU 
GDP and 7.5% of EU employment are 
created in CCIs.165 High market concentration. Three European countries – 
Germany, United Kingdom, and France – are the absolute 
leaders in CCIs compared t o other European countries, 
generating around 50% of turnover and added value.166  
EU is especially strong in the advertising 
sector (50.4% of global revenues, 52.6% 
of global employment). Additionally, 
39.6% of the global workforce in 
architecture is worki ng in Europe.167 
EU is also strong in the sector of fashion 
(EU export in fashion goods accounts for 
12.3%)168 Insufficient skills provision.  Cultural and creative studies in 
European universities are mostly focused on the “creative part” 
and their graduates are not always ready to enter the modern 
labour market as they lack cross -sectoral (entrepreneurial, 
digital, financial management) skills .169 With regards to HE 
institutions, the EU is trailing behind the USA in 
Communication & Media studies (while EU universities are 
performing better in more traditional disciplines such as Art & 
Design or Performing arts).170 
Europe's creativity is recognize d 
worldwide  European industries are challenged by digitization and 
globalization and their powerful impact on the way artists 
produce and distribute their works and relate to their audiences. 
The collapse of DVD markets, new consumer expectations and 
the c ontinued power of US studios  together with the rise of 
global digital giants like Amazon, Itunes, Google and Netflix 
have impacted the traditional value chain.  
 
  
                                                           
160 Austrian Institute for SME Research and VVA Europe (2016). Boosting the competitiveness of cultural and creative industries f or 
growth and jobs. Final report, p. 78.  
161 Ibid. 
162 Gustafsson C. and Lazzaro E. (2017). Input to EIT’s Strategic Innovation Ag enda. Future EIT Thematic Areas. Expert analysis. Culture, 
Cultural Heritage and Creative Industries, p.12.  
163 Interviews.  
164 EY (2015). Cultural times. The first global map of cultural and creative industries. Study on behalf of the International Con federat ion of 
Societies of Authors and Composers (CISAC).  
165 Austrian Institute for SME Research and VVA Europe (2016). Boosting the competitiveness of cultural and creative industries f or 
growth and jobs. Final report, p. 62. Gustafsson C. and Lazzaro E. (2017). Input to EIT’s Strategic Innovation Agenda. Future EIT Thematic 
Areas. Expert analysis. Culture, Cultural Heritage and Creative Industries, p.1.  
166 De Voldere, I., Durinck E., Mertens, K., Cardon, C., Maenhout, T., Warmerdam, S., Versteegh, M., Canton, E. ( 2013). Survey on access 
to finance for cultural and creative sectors. Evaluate the financial gap of different cultural and creative sectors to suppor t the impact 
assessment of the creative Europe programme. Study prepared for the European Commission, p. 59 . 
167 Austrian Institute for SME Research and VVA Europe (2016). Boosting the competitiveness of cultural and creative industries f or 
growth and jobs. Final report, p. 43.  
168 VVA Europe (2016). Boosting the competitiveness of cultural and creative industries for growth and jobs. Final report, p 67, p. 71  
169 Ibid. p. 56, interviews.  
170 TopUniversities 2017 ranking.  
 
140 Financial sustainability of a KIC  
The analysis suggests that the characteristics of the theme do not imply any significant risks in 
terms of financial sustainability of the future KIC. In particular:  
 Membership fees  could generate an income stream if the KIC managed to attract larger 
CCI companies with long time horizons. As pointed out by the OECD, cultural 
productions occur in networks of firms where larger corporate entities coexist with 
numerous small and special ised firms where the output content and design are constantly 
changing. 90 -95% of CCIs organisations in Europe are in fact micro -enterprises (fewer 
than 10 employees) and freelancers.171 
 
 Income from the provision of services . This stream could be significan t, if some of the 
most pressing challenges are alleviated: access to finance, integration into global value 
chains, etc.  
 
 Capitalisation on return on investment/equity  of incubated start -ups could be 
challenging. CCIs are characterised by a large number of  start-ups and continuous 
renewal, but scaling up and growth of companies could be an issue. However, recent 
examples of highly successful and fast growth start -ups, for example in the Virtual 
Reality, animation or video gaming industry have demonstrated t he dynamism of the 
sector, its major potential and the possibly fast return on investment.     
 
 Income from education and training.  The interaction between STEM and art and design 
is driving substantive innovation and creativity. There is therefore a need to encourage 
education providers to equip students in arts and creativity, business and technology with 
the knowledge and competences needed to work across cultural and creative sectors and 
disciplines. This new trend could open opportunities for business model on education.   
 
Potential to address bottlenecks for innovation  
The existing KIC model is well designed to address the innovation bottlenecks faced by the 
CCIs that include emerging sub -sectors as well as very mature ones that undergo a profound 
digital transformation:  
 Lack of entrepreneurship and related skills;  
 Lack of platforms for scaling -up of innovations, difficult access to international value 
added chains;  
 Insufficient integration of creative clusters and hubs;  
 Disconnection between educatio n, research, and businesses;  
 
There are two additional bottlenecks that a future KIC could successfully address:  
First, a KIC in CCIs could tackle structural obstacles related to the access of private 
finance  by taking into account the positive experience of the EU Cultural and Creative 
Sectors Guarantee Facility, as well as the examples of EU countries where investment in 
knowledge assets is higher than in tangible ones.172 
                                                           
171 Gustafsson C. and Lazzaro E. (2017). Input to EIT’s Strategic Innovation Agenda. Future EIT Thematic Areas. Expert analysis. Culture, 
Cultural Herit age and Creative Industries, p.6.  
172 https://www.nesta.org.uk/report/uk -investment -in-intangible -assets/   
 
141 Second, a KIC in CCIs could address  growth challenges and market access by working in a 
different and innovative way, with skills development at the core and relying on a larger 
geographical scale which will allow focusing on complementarities of skills and CCI products 
and services.  
A specif ic challenge posed by digitisation is the power of big platforms which facilitate 
access to multiple markets, but at the same time exploit their power by keeping a significant 
share of generated revenue. Attempts by alternative platforms173 so far have not b een very 
successful, because of the competitive advantages of incumbents and strong network effects. 
In only one area, music streaming, the leader is a European company, Spotify, which 
demonstrates the capacity for European champions to take and keep leade rship on global 
content markets.  The EU's Digital Single Market Strategy174 is addressing some of these 
challenges, in particular as concerns the so -called “value gap”, the fair remuneration of 
authors and creators, and fairness and transparency in the plat forms -to-business transactions. 
The market for cultural digital services is therefore in evolution, and a re -balancing of the 
power relations can be expected in the near future.  
 
Suitability of themes vis -à-vis impact indicators  
Overall, the impact indica tors are relevant for a future KIC in the CCI area. The financial 
sustainability indicator is also very relevant given the challenges such a KIC might face. The 
definition of appropriate societal impact indicators should also take into account the breadth 
of challenges that the CCIs could address. The possibility of a CCI KIC to create co -location 
centres across Europe would allow a better link with regional initiatives along the Research 
and Innovation Strategies for Smart Specialisation (RIS3) across Euro pe. Overall, this theme 
appears to be particularly well suited for an EIT -KIC model intervention. The degree of 
maturity of this theme against all criteria envisaged suggests that a KIC on CCI could already 
be launched at the very beginning of the new prog ramme.   
 
Security and Resilience  
In recent years security threats have become more varied and more international, as well as 
increasingly cross -border and cross -sectorial in nature. The EU and its Member States face 
new and complex security threats which mainly originate from instability in the EU's 
immediate neighbourhood175 and also reflect the rapid technological and social and economic 
developments in the world. Therefore, the freedom and security of European citizens require 
anticipation, prevention, an d protection from threats as well as resilience, i.e. ability to 
withstand stress and rapidly recover from disruptions.  
 
This thematic area covers the following specific issues which all require innovative solutions 
to address the challenges:176 
 
 Identifica tion of threats to citizens, goods, and organisations . Threats can arise from 
systemic technological malfunction or targeted malicious activities (e.g. terrorist acts). 
Hence, there is a need for innovation in tools and systems to monitor and identify sign als 
of threats from large quantities of data.  
 
                                                           
173 Consider Dailymotion, which is an alternative to YouTube developed in France.  
174 https://ec.europa.eu/digital -single -market/en/policies/shaping -digital -single -market   
175 Communication on the European Agenda on Security, COM (2015) 185 final  
176 Jacquotte O. P., Castor M. (2017). Input to EIT’s Strategic Innovation Agenda. Future EIT Thema tic Areas. Expert analysis. Security 
and Resilience, pp. 3 -7. 
 
142  Risk and crisis management, the resilience of systems . Open and interconnected 
technological and social systems face risks of diverse origins: environment, technology, 
human, etc. Threats can easily spill over across borders and sectors and therefore have 
large amplitude of impact. Innovations are needed for  developing resilience -capable 
systems, improving risk and crisis management.  
 
 Protection of infrastructures and soft targets.  Modern societies are heavily reliant on 
infrastructures contributing and ensuring the well -being of citizens. Some of them (e.g.  
water distribution and sanitation, energy creation) are vital to the very life of people and 
therefore their disruption could have extreme consequences. Hence, there is a need for 
innovations for protecting infrastructures, improving resilience to disrupt ions, and 
localisation of negative impacts.  
 
 Information security.  Hacking, illegal electronic surveillance, espionage, the spread of 
misinformation can undermine economic and democratic structures. To address these 
challenges innovation in cyber security as well as prevention of the spread of deliberately 
fake informati on is therefore needed.  
 
 Human understanding and control of highly automated systems / Artificial 
Intelligence (AI).  Humans increasingly rely on AI to control critical societal systems, 
although the algorithms of decision making are not entirely clear. The refore, there is a 
need for innovation and applications that could control and protect AI systems and robotic 
solutions from ill -intentioned attacks.  
 
 The basic resilience of society.  Societies’ capabilities of managing disruptions in the 
basic societal f unctions (e.g., water, food, and electricity) are often limited to a few days. 
Furthermore, there is a need to prepare for mitigation of latent and increasing 
environmental stress (e.g. water crisis in Cape Town), as well as emerging stressors (e.g. 
thunde rstorm asthma in Birmingham and Melbourne). Innovative solutions are required to 
improve the capability to manage disruptions and increasing stress in basic societal 
functions like water, food, and electricity. Furthermore, there is a need for technologies  
and services making it cheaper and easier for citizens to be prepared for disruptions.  
 
 System usability.  There is a range of existing systems that could be applied to improve 
the security and resilience of societies. Nevertheless, they have become overly  complex to 
manage and use for non -specialists. Innovations would therefore help improve user -
interfaces and bring the technologies closer to ordinary users.  
 
Alignment with Horizon Europe, including the Global Challenges and Competitiveness pillar  
 
The Security and Resilience  theme corresponds to the clusters of activities of the Global 
Challenges and Industrial Competitiveness Pillar as outlined in the Commission proposal for 
establishing Horizon Europe programme. A KIC established within the Security a nd 
Resilience theme could therefore contribute to four areas of intervention under the Inclusive 
and Secure Society cluster: Democracy, Disaster -Resilient Societies, Protection and Security, 
and Cybersecurity. Potential work of a KIC on cybersecurity, cont rol of automated systems, 
and protection of infrastructures could also contribute to the activities carried out within the 
Digital and Industry cluster.   
 
143 Cluster  Areas of 
intervention  Relevant broad lines of activities  
Inclusive and secure 
society  Democracy  KIC within the theme can address lines of activities aiming 
at addressing populism, extremism, radicalisation, terrorism 
and including and engaging disaffected and marginalised 
citizens, as well as enhancing the role of multi -cultural 
citizenship  and identities in relation to democratic 
citizenship and political engagement.  
Disaster -Resilient 
Societies  KIC within the theme can address all lines of activities  
Protection and 
Security  KIC within the theme can address all lines of activities  
Cybersecurity  KIC within the theme can address all lines of activities  
Digital and 
Industry  Key Digital 
Technologies  KIC within the theme can address most lines of activities, in 
particular, those related to systems and computing 
technologies security.   
Artificial 
Intelligence and 
Robotics  KIC within the theme can provide horizontal inputs to most 
lines of activity  
Next Generation 
Internet  KIC within the theme can provide horizontal inputs to most 
lines of activity  
Advanced 
Computing and 
Big Data  KIC within the theme can provide horizontal inputs to most 
lines of activity  
Space  KIC within the theme can provide horizontal inputs to the 
line of activity aiming at developing secure satellite 
communications for EU governmental actors.  
 
Economic and research capacities of the sector  
 
The European research, Higher Education Institutions, and enterprises are among the major 
players in the field. Nevertheless, Europe faces fierce competition in this field from the USA 
and increasingly from China. Further more, development of innovations related to security and 
resilience would require the established players to diversify from defence -related activities. 
The Table below provides an overview of European strengths and weaknesses in the field of 
Security and R esilience.  
 
  
 
144 Strengths  Weaknesses  
Strong industrial, research, and HE base. The 
EU security industry has approx. EUR 200 bn. 
annual turnover and around 5 million 
employees (including the defence sector)177. In 
2015, the EU ranked second (behind the USA) 
in the global security industry, with a global 
market share of 30%178. The EU MSs comprise 
5 out of 10 leading countries with the highest 
average H -index in research fields associated 
with the theme179. European industrial, research, and HE base is 
trailing behi nd that of the USA. Recently China 
has also made significant progress in the field180. 
Europe has a strong competitive advantage in 
advanced engineering and manufacturing. 
Europe has also made significant progress in 
building up capacities in information security 
field (security analytics, threat intelligence, 
mobile and cloud security)181.  European businesses and research organisations 
working in the field are more focused on defence 
and aerospace  rather than on security and 
resilience.182  
The USA and China  are leading global efforts in 
security -related AI and big data systems183.  
New players are emerging, e.g. Baltics (Estonia 
in particular) are rapidly building up capacities 
related to information security184. High concentration: most of the R&D spending, 
research centres, and innovative enterprises are 
concentrated in a handful of countries (the UK185, 
Germany, France, Italy, Sweden, and the 
Netherlands)186. 
 
Financial sustainability of potential KIC  
The economic landscape of the theme does not suggest major risks for the financial 
sustainability of a future KIC. There is a significant number of large innovative enterprises 
that could be interested in joining the KIC and contributing to its financial s ustainability 
through membership fees. The field is ripe for fast growing innovative start -ups. Hence, a 
future KIC can expect income stream from return on investment/equity of incubated start -ups. 
A future KIC could also expect some income from education and provision of services, 
although this is likely to depend on the quality and uniqueness of the services offered.  
 
  
                                                           
177 European Commission (2017). Security research and innovation – Boosting effectiveness of the Security Union. Booklet, p. 5.  
178 AmCham EU (2015). Security and Defence. Together for European Gro wth, p. 7. Retrieved at 
http://www.amchameu.eu/sites/default/files/publications/files/security_and_defence_brochure_2016_0.pdf   
179 Scimago  Journal & Country Rank, 2016. The following research subarea were used to estimate the average H -index of countries in the 
Security and Resilience: (i) Aerospace engineering, (ii) Communication, (iii) Computer networks and communications, (iv) Cont rol and  
systems engineering, (v) Information systems and management, (vi) Modelling and simulation, (vii) Political science and inter national 
relations, (viii) Safety research, (ix) Safety, Risk, reliability and quality.  
180 AmCham EU (2015), Scimago Journal &  Country Rank, 2016 and interviews.   
181 Interviews, AmCham EU (2015) and Optimity advisors (2016).  
182 Interviews.  
183 Interviews.  
184 Interviews.  
185 Brexit will further reduce European capacities in this theme.  
186 Interviews and previous studies: Jacquotte O. P., Castor M. (2017). AmCham EU (2015). European Parliament (2016). The future of EU 
defence research.  
 
145 Potential to address bottlenecks for innovation  
There is a large number of bottlenecks for innovation in the field that a future KIC cou ld 
potentially address. These include:  
 Heavy path -dependency and rigid innovation agendas . Public funding in the 
Member States (MS), as well as research and industrial base, are strongly concentrated 
in traditional defence sectors. Work is typically struct ured around long -term R&D 
programmes. As the new security challenges have emerged, attention has shifted 
towards new areas of work, such as cyber -security, monitoring, and prevention of 
threats (predominantly terrorism), etc. However, the interviewees sugg ested that the 
established industrial players treat innovations for mitigating the newly emerging risks 
as potential niches, rather than core future markets. Public authorities, firms, and 
societies at large tend to downplay the likelihood of rare high -impact events. As a 
result, the markets for non -defence security and resilience innovations are rather 
shallow (unless high -impact events occur, which leads to a surge in demand).  
 Fragmentation of efforts.  There are strong economic arguments for closer Europ ean 
cooperation. First, MS face similar challenges, but due to a low likelihood of high -
impact crises individually each country tends to underinvest in early identification, 
management, and mitigation of risks. Second, the performance of innovations based 
on AI and big data significantly improves with larger quantities of data, which is 
difficult to obtain for low -likelihood events. Hence, the more regions and countries use 
such innovations, the better they could become. However, the economic arguments are 
not always compatible with the political determination of governments to develop own 
systems that constitute part of national security.  
 Neglect of social innovations.  There is a widespread perception that technological 
innovations are necessary to address  challenges related to security and resilience. The 
interviewed experts argued that while technology definitely has an important role to 
play, a significant share of the challenges require social innovations, which have been 
largely neglected to date. This  also explains why the uptake of available technologies 
has been rather weak. Examples of social innovations include: strengthening media 
literacy to fight the spread of misinformation, prevention of radicalisation, etc.  
 Lack of the necessary skills.  This is particularly relevant for information security, 
human understanding and control of highly automated systems and Artificial 
Intelligence, and system usability sub -challenges. For example, Europe is expected to 
face a shortage of 350,000 experts in cyber security by 2022.187  
The work of a future KIC could be constrained by several legal and technical obstacles.  
 Innovations for early identification of threats can face difficult questions regarding the 
balance between security and respect for human rights. He nce, application of 
innovations (e.g. face recognition) that rely on personal data can be subject to 
regulatory uncertainty in Europe, while countries with looser regulatory regimes (e.g. 
China) enjoy a competitive advantage in developing such technologies  (sometimes at 
the expense of the respect for human rights).  
 There is a lack of ‘soft’ infrastructure (commonly agreed terminology, frameworks), 
which inhibit cross -national cooperation in developing innovations in the fields of 
                                                           
187 Global Information Security Workforce Study 2017.  
 
146 security and resilience.188 While a future KIC could contribute to the alleviation of 
these bottlenecks, they span beyond the direct control of Innovation Communities.  
 The sectors covered by the theme are very diverse, from information and cybersecurity 
to resilience of critical infrastructure. Attempts to cover most of the sectors by a future 
KIC could result in spreading its resources thinly and in the need to develop a coherent 
overall strategy exploiting the synergies between its members. Therefore, a refinement 
or possibly a narrower scope of the theme could be considered to ensure greater 
coherence of economic activities.  
 
Suitability of themes vis -à-vis impact indicators  
A future KIC in the field of Security and Resilience  could adopt a number of strategies. On 
the one hand, the KIC could aim to transform the mature industries (e.g. defence and security 
industry, operators of ‘hard’ and ‘soft’ infrastructures, ICT) by attracting established players 
and facilitating diversif ication of their activities to new areas of security and resilience. On the 
other hand, the KIC could aim to develop market -creating innovations by facilitating the 
emergence of new players. Either strategy (or their combination) is likely to contribute to  the 
attainment of the proposed economic medium/long term indicators. As with many of the 
KICs, the definition of appropriate societal impact indicators will require careful 
consideration. It is a particular challenge here given the intrinsic difficulties in measuring 
levels of security and resilience.  
 
Water, Marine, and Maritime  
The overuse and mismanagement of natural resources in the last century has placed a great 
pressure on freshwater ecosystems.189 At the same time, new technologies and the need to 
decarbonise the economy are leading to increasing use of marine resources. A major 
challenge in this field is to create a sustainable, circular, and blue economy that is based on 
sufficient quantities of water as well as on healthy and functioning freshwater and marine 
ecosystems with a view to tackle the following points:  
 Water scarcity, drought, and floods. Continued climate change and over -extraction of 
fresh water are causing a rise in severity and fre quency of water scarcity and droughts. 
Simultaneously, increasing scale of economic activities in coastal areas, floodplains, and 
deltas, and the reduction of the natural water retention contribute to the increase in the 
likelihood and adverse impacts of f loods. Therefore, innovative methods and technologies 
are needed to gather, predict, and disseminate information about waterbodies’ safety, 
potential threats, and mitigation of risks.  
 
  
                                                           
188 Lange D., Honfi D., Petersen L., Rod B., Pursiainen C. (2017). Application of Resilience Concepts to C ritical Infrastructure in the 
IMPROVER Project, in EC, Proceedings of the 1st International Workshop on Resilience, p. 39.  
189 Bergkamp G. and Vassilopoulou V. (2017). Input to EIT’s Strategic Innovation Agenda. Future EIT Thematic Areas. Expert analys is. 
Water, marine and maritime, p. 2.  
 
147  Marine and freshwater ecosystem degradation. Waterborne  pollution (es pecially from 
agriculture) and human activities damage to coastal and marine ecosystems. Waste 
reduction, improvement in water treatment and less environmentally damaging offshore 
activity are needed as well as better ways of monitoring the marine environm ent. The 
environmental status of 80% of the species and habitats assessed under the EU’s Marine 
Strategy Framework Directive is ‘unknown’.  
 
 Decarbonisation. All s cenarios presented in the Commission’s Clean Planet 
Communication190 on achieving a zero carbon economy by 2050 include an enormous 
growth in offshore wind energy – between 10 and 50 times the present capacity. 
Unprecedented expansion of other activities is also forecast. Installations for energy from 
tide and waves will shift from demonstration to p roduction. Aquaculture, particularly 
shellfish and algae, for food and feed will move further offshore and expand at least 
tenfold to compensate for land lost from food production for biofuels. An ecosystem of 
service providers for developing, manufacturin g, installing, cabling, supplying and 
maintaining these facilities as well as checking their impact on ecosystems will need to be 
developed.  
 
 Circular and blue economies include two large segments:    
o Water management on land. A relatively small amount of wastewater is currently 
reused in Europe. At the same time, other countries in the world are increasingly 
facing water shortages. Therefore, there is a need for innovations to ensure 
sustainability of freshwater ecosystems. The innovations could include new 
technologies for water extraction, reuse, and treatment as well as social innovations 
(e.g. pricing models) that could alter the behaviour of consumers.  
 
o Blue (marine) economy includes a range of traditional (e.g. shipping, tourism) and 
newly emerging  sectors (e.g.  blue biotech). There is a need for a range of innovations 
to set the traditional sectors along a sustainable growth path as well as to kick -start 
economic activities of sectors that are in the early stages of development but that have 
large market opportunities.  
 
Alignment with Horizon Europe, including the Global Challenges and Competitiveness pillar  
 
The scope of the theme corresponds well with the Food and Natural Resources cluster of the 
Global Challenges and Industrial Competitiveness Pillar as outlined in the Commission 
proposal for establishing Horizon Europe programme. In particular, a f uture KIC within this 
theme could significantly contribute to the following  areas of interventions: Seas and Oceans, 
Circular Systems, Environmental Observation, and Biodiversity and Natural Capital. It would 
also contribute to the climate, energy and mobility cluster.   
 
  
                                                           
190 https://ec.europa.eu/clima/policies/strategies/2050_en  
 
148 Cluster  Areas of 
intervention  Relevant broad lines of ac tivities  
Climate, 
energy and 
mobility  Energy systems 
and grids  
Clean transport 
and mobility  KIC can develop an ecosystem of service providers with special 
knowledge of challenging offshore conditions that can contribute to 
expansion of offshore energy that will consolidate European 
leadership and will be essential for meeting carbon emission targets.  
Food and 
natural 
resources  Environmental 
Observation  KIC within the theme can provide horizontal inputs to most lines of 
activity  
Biodiversity and 
Natural Capital  KIC within the theme can provide horizontal inputs to most lines of 
activity  
Food systems  Aquaculture, both freshwater and marine, will play an increasing role 
in food and feed systems as agricultural land shifts to biofuel 
production.  
Sea and Oceans  KIC within the theme can address all lines of activities  
Circular Systems  Circular use of water resources, including reduction of water demand, 
prevention of losses, water reuse, recycling and valorisation of 
wastewater and governance mode ls for smart water allocation, 
addressing sources of pollution and tackling other pressures on water 
resources  
 
Economic and research capacities of the sector  
 
The Water, Marine, and Maritime theme has a relatively strong knowledge base as well as 
high market potential. The sectors of the highest significance in Europe are the following:  
 Marine supplies. It has  a production value in the EU of around EUR 52.5 bn per year. 
The largest two players in this sector in the EU are Germany (EUR 12.8 bn.) and Italy 
(EUR 8.7 bn).191 Production of marine supplies includes shipbuilding, boatbuilding, 
and repair . Shipbuilding in Europe has an annual turnover of around EUR 13 bn and 
a workforce of 500 thousand.192 Italy has the biggest boatbuilding industry in Europe 
with a share of approx. 28%.193 
 
 Coastal tourism. Tourism alone makes up nearly 40% of the Blue Economy’s value 
added and 55% of all the people employed in the European Blue Economy.194 In 
addition, according to the World Economic Forum Travel and Tourism 
compet itiveness index (2017)195, half of the countries in the top ten are from the 
EU196. 
 
 Maritime transport . The share of maritime seaborne trade is estimated to account for 
around 60 -70% of all international trade.197 EU maritime transport sector has an 
annual turn over of around EUR 20 bn. and a workforce of 350.000198 
                                                           
191 BALance (2014). Competitive position and future opportunities of the European marine supplies industry, Final Report, p. 31.  
192 European Commission (2009). A sea chan ge for ocean management. A European strategy for marine and maritime research, p. 8.  
193 BALance (2014). Competitive position and future opportunities of the European marine supplies industry, Final Report, p. 33.  
194 European Union (2017). Blue Economy in the  EU. Retrieved from https://publications.europa.eu/en/publication -detail/ -
/publication/030d66f1 -5564 -11e7 -a5ca-01aa75ed71a1/ language -en  
195 World Economic Forum (2017). The Travel & Tourisms Competitiveness Report 2017.  
196 Spain, France, Germany, United Kingdom, and Italy.  
197 Union for the Mediterranean (2017). Blue economy in the Mediterranean. Report, p. 39.  
 
149  
 Fisheries and aquaculture. Fisheries  have an annual turnover of around EUR 20 bn 
and a workforce of 500.000.199 In 2015, it has produced around 6.4 m tons of live 
weight equivalent.200 The volume of EU aqu aculture production in 2015 equated to 
one-fifth of total EU fisheries production and accounted for around EUR 4.1 bn.201 
The largest EU players in the field are Spain (23.3% of all volume), the United 
Kingdom (16.8%), and France (13%). Conversion of land for biofuel to meet EU’s 
decarbonisation strategy will require increasing food production offshore. Aquaculture 
can produce protein for food or feed with a lower carbon footprint than terrestrial 
equivalents.  
 
 Marine energy. European companies are among the leaders in developing ocean 
energy technologies. Around half of the world’s tidal energy developers and 60% of 
wave energy developers are located in the EU. The highest share of tidal and wave 
energy developers on the global scale are owned by the Unit ed Kingdom (19% of tidal 
and 18% of wave energy developers).202  
 
 Offshore oil and gas. It is the biggest sector in marine energy and raw materials 
industry. The size of offshore oil and gas industry in 2012 was EUR 107 -133 bn, it 
employed 25 -50.000 people.203 
 
 Blue biotechnology. The sector accounts for 2 -5% of the marine economy and could 
have an annual turnover of between EUR 302 and EUR 754 m. The competitive 
advantage of the EU lies in its R&D activities, access to marine resources, and 
development of infr astructure to support these activities.204 
 
 Water supply and wastewater treatment  sector is increasingly innovative. 2018 
Global Cleantech 100 Report205 presents the top companies in technologies, services, 
and business models reducing the strains on the hydro logical cycle and ensuring 
reliable access to clean water. Three out of the top 5 companies are of European origin 
(Organica Water in Hungary, OxyMem in Ireland, and Voltea in the Netherlands).  
  
                                                                                                                                                                                     
198 European Commission (2009). A sea change for ocean management. A European strategy for marine and maritime research, p. 8.  
199 European Commission (2009). A sea change for ocean management. A European strategy for marine and maritime research, p. 8.  
200 Euros tat (2017). Fishery statistics. Retrieved from http://ec.europa.eu/eurostat/statistics -
explained/index.php/Fishery_statistics#Total_product ion  
201 Eurostat (2017). Aquaculture statistics. Retrieved from http://ec.europa.eu/eurostat/statistics -explained/index.php/Aquaculture_statistics   
202 Magagna D., Shortall R., Telsnig T., Uihlein A., Vasquez Hernandez C. (2017). Supply chain of renewable energy technologies in 
Europe. An analysis for wind, geothermal and ocean energy. Report for Joint Research Centre.  
203 Ecorys (2012). Blue Growth. Scenarios and drivers for Sustainable Growth from the Oceans, Seas and Coasts. Third interim repo rt, p. 
98. 
204 Remotti L. and Damvakeraki T. (2015). Ocean Research in Horizon 2020: The Blue Growth Potential. Study for the ITRE C ommittee, p. 
14. 
205 Cleantech Group (2018). Global’18 Cleantech 100. A Barometer of the Changing Face of Global Cleantech Innovation. Report.  
 
150 The Table below discusses other strengths and weaknesses in the thematic area in Europe.  
Strengths  Weaknesses  
Strong research base. In the field of water scarcity, 
droughts, and floods Europe has the second largest 
number of patents (behind only 
Japan).206Furthermore, European researchers have 
produced more research  papers on water science 
and technology in the past fifteen years than 
researchers from any other country.207  Lack of focus in Higher Education. The academic 
programmes tend to be rather broad, whereas the sub -
sectors require quite specific knowledge and sk ills. 
Additionally, curricula in areas such as engineering, 
urban design, architecture, and similar do not 
sufficiently cover issues related to ecology, marine 
engineering, and management of water.208  
High market potential. The EU is one of the 
leaders, al ongside China and USA, in marine 
economy. Counting all activities that depend on the 
sea, the EU blue economy employs around 5.4 
million and has an annual gross value of EUR 500 
bn.209 Maritime industries in the EU represent 
around 5% of EUs gross domestic p roduct.210 Different industries often rely on the same water 
bodies.211 This presents a challenge as there is a need 
to accommodate the conflicting needs of sectors . For 
example, the potential of harvesting marine 
biotechnologies relies on the quality of water , which 
may be negatively affected by shipping and industrial 
aquaculture.  
Newly emerging innovative sectors. The divides 
between researchers and enterprises are less 
prevalent in emerging sectors, such as 
biotechnologies, aquaculture and marine energy 
production.212 The marine biotechnologies sector is 
dominated by enterprises that build their business 
models on innovations and are strongly rooted in 
research.213 The energy sector also develops a large 
number of innovations aimed at improvements in 
the effi ciency of wave, tidal and wind turbines.214  Lack of cooperation. Less than 20% of R&D 
organisations in water sciences have an effective 
cooperation with industries or enterprises.215 
 
  
                                                           
206 Bergkamp G. and Vassilopoulou V. (2017). Input to EIT’s Strategic Innovation Agenda. Future EIT Thematic Areas. E xpert analysis. 
Water, marine and maritime, p. 11.  
207 Ibid. 
208 Bergkamp G. and Vassilopoulou V. (2017). Input to EIT’s Strategic Innovation Agenda. Future EIT Thematic Areas. Expert analys is. 
Water, marine and maritime, p. 10.  
209 European Commission (2012), B lue Growth opportunities for marine and maritime sustainable growth. COM (2012) 494 final, p. 2.  
210 EC (2009). A sea change for ocean management. A European strategy for marine and maritime research, p. 8.  
211 OECD (2016). The Ocean Economy in 2030, p. 20.  
212 BALance (2014). Competitive position and future opportunities of the European marine supplies industry. Final report, p. 119.  
213 Interviews.  
214 BALance (2014). Competitive position and future opportunities of the European marine supplies industry. Final rep ort, pp. 114 -115. 
215 Bergkamp G. and Vassilopoulou V. (2017). Input to EIT’s Strategic Innovation Agenda. Future EIT Thematic Areas. Expert analys is. 
Water, marine and maritime, p. 13.  
 
151 Financial sustainability of a KIC  
The analysis suggests that the characteristics of the theme, the structure of value -added chains 
and strategies of the key players do not imply any significant risks in terms of financial 
sustainability of the future KIC. It will largely depend on the stra tegy and business plan of the 
KIC.  
Potential to address bottlenecks for innovation  
The key bottlenecks to innovation include lack of engineering and entrepreneurship skills, 
fragmentation of efforts and disconnect between education, research, and innovati on 
activities216 as well as an under -developed knowledge base (e.g., up to 50% of the seafloor 
does not have high -resolution topographic maps217). A KIC would be an appropriate 
instrument in addressing these bottlenecks.  
However, due to a very broad definitio n of the theme, a future KIC would face multiple 
challenges.  
1) The sectors covered by the theme are very diverse, from very mature (e.g. fisheries and 
shipbuilding) to the newly emerging ones (e.g. blue biotech), and attempts to cover most of 
the sectors could impede formulation of a coherent KIC strategy. However,  a KIC could help 
transfer lessons learned in traditional industries such as oil and gas to the emerging ones.   
2) Most of the sectors rely on relatively distinct value -added chains and knowledge bases, 
although there are some opportunities for synergies (e.g. shipbuilding knowledge could be 
used in offshore oil and gas sector). Hence, there is a risk that a KIC will develop only loosely 
connected networks.  
3) Due to geographical, economic, policy, and other reasons, the scientific and economic 
competence -base is very unequally distributed among the EU MS (see Table below). For 
instance Mediterranean countries lag the northern countries in renewable energy because of 
oceanographic conditions such as a narrow continental shelf. But innovation already in the  
pipeline can overcome these challenges.  
All of the above implies that:  
 If a future KIC aimed at covering most of the sectors, its resources would be spread 
widely, but thinly, it would struggle to develop a coherent strategy and exploit the 
synergies bet ween its members.  
 The development of a coherent strategy and priority work fields could take a 
significant amount of time and resources. The existing KICs that were set -up within 
very broadly defined areas, such as EIT Climate -KIC or EIT Digital, have spe nt over 
five years and used multiple iterations to flesh out their strategy in tackling the socio -
economic challenge at hand. Experience already gained under EU research 
programmes, the integrated maritime policy and the water framework directive c ould 
participate in  shorten ing these timescales.   
  
                                                           
216 ECORYS (2012). Blue Growth Scenarios for Sustainable Growth from the O ceans, Seas and Coasts. Final report.  
217 DG MARE (2014). Innovation in the Blue Economy: realising the potential of our seas and oceans for jobs and growth. COM(2014)  254 
final/2.  
 
152 Narrower scope of the theme would therefore facilitate management of the above risks. 
Refinement of the theme could be considered in terms of ensuring greater coherence of 
economic activities (e.g. blue economy). A recent study218 suggested that the largest potential 
for European R&D to deliver innovation and jobs rests in the following blue economy sectors: 
aquaculture, marine tourism, coastal protection, blue biotechnology, ocean energy, and seabed 
mining . However, marine aquaculture is damaged if water quality in outflow from rivers is 
poor so bringing the two communities together would provide real added value. The priority 
should remain at ensuring that industry has the skills, technology and entreprene urship 
necessary to exploit the potential of the sea for meeting the challenges of a low carbon 
economy whilst ensuring that this expansion does not compromise the natural capital for 
future generations.   
Maturity of sectors covered by Water, Marine and M aritime theme  
 
Sectors  Leading European countries*  
Mature industries  
Coastal tourism, passenger ferry services, cruise tourism, 
yachting and similar  Most Member States  
Inland waterway transport  Most Member States  
Deep -sea and short -sea shipping  BE, EL,  DE, DK, UK, NO, IT, FR, NL  
Shipbuilding and ship repair  DE, DK, IT, NL, RO  
Fisheries  DK, ES, FR, NL, UK  
Offshore oil and gas  DK, IT, NL, UK, NO  
Water supply, treatment and other water management on 
land  Most Member States  
Growing industries  
Aquaculture  EL, ES, IT, FR, NO, UK  
Coastal protection  BE, NL  
Industries at pre -development stage  
Blue biotech  DE, NO, FR, UK  
Blue energy (incl. offshore wind and ocean renewable 
energy)  DK, ES, FR, IE, PT, SE, UK  
Seabed mining  DE, FR, UK  
Source: compilation based on Remotti L. and Damvakeraki T. (2015). Ocean Research in Horizon 2020: The 
Blue Growth Potential; ECORYS (2012) Blue Growth Scenarios for Sustainable Growth from the Oceans, Seas 
and Coasts, Final report; Deloitte (2017) EU Ship ping Competitiveness Study and interviews. Note: * the list is 
by no means complete.  
  
                                                           
218 Remotti L. and Damvakeraki T. (2015). Ocean Research in Horizon 2020: The B lue Growth Potential. Study for the ITRE Committee.  
 
153 Suitability of themes vis -à-vis impact indicators  
Overall, the medium/long -term outcome indicators are relevant for a future KIC. However, 
the targets/expected values o f the indicators depend on the strategy of a future KIC (if the 
scope of the theme is left unchanged). On the one hand, a KIC could focus on improving the 
quality of ecosystems (e.g. Plastic -free oceans as proposed in the Mazzucato report219). In this 
case, most of the economic impacts (job creation, revenue growth, etc.) on the blue economy 
would be indirect, attained over a longer period of time, and spread along a wide range of 
sectors (e.g. tourism, fisheries, blue biotech). On the other hand, a KIC could focus on the 
development of the most promising fields of the blue economy. This should result in larger 
short -term economic impacts. However, the two issues are linked and considering them 
together would avoid unintended consequences.   
Inclusion, Integration, and Migration  
The European society is facing major demographic changes – rising life expectancy, 
migration, reducing family sizes, and others. Furthermore, social and economic trends pose 
challenges for social cohesion and inclusion.   The two major interlinked issues within the 
theme are:  
 Demographic change and the ageing population has wide  ranging implications for the 
labour market, sustainability of social insurance systems as well as increased demand for 
care, healthcare, and rela ted services.  This creates the need for technological innovations 
in areas such as healthcare, home care, and housing, innovative solutions for the inclusion 
of vulnerable elderly groups, and organisational changes in healthcare, education, and 
social secu rity. 
 
 Social inclusion and active citizenship as drivers for economic growth. The share of 
people at the risk of poverty or social exclusion in the EU MS ranges from 14% to 41.3% 
in 2015.220 Poverty and exclusion hinder the development of talents, reduces participation 
in the labour market and civic engagement as well as undercuts one’s self -esteem and self -
sufficiency. Two groups are particularly vulnerable in Europe:  
 
o Youth  not enrolled in education, employment or training (NEETs). Educational 
chances of children still strongly depend on the socio -economic status and parents’ 
linguistic background. Disadvantaged children may face lower employment and 
earning potential, which not only makes t hem vulnerable but also limits social 
cohesion and economic growth. Thus, there is a need for social innovations in 
reaching out to NEETs, fostering their human capital and entrepreneurial skills.  
 
o Migrants : immigrants, refugees, and asylum -seekers.  Migrants still face challenges in 
accessing employment, education, institutions, goods, and services, which limits their 
participation in society. The inclusion of migrants can strengthen the innovation 
potential of the EU and help address issues such as l abour market shortages. For 
enhanced inclusion, there is a need for the development of social innovations and 
social enterprise models, innovative solutions to simplify administration and banking 
processes.  
                                                           
219 Mazzucato M. (2018). Mission -Oriented Research & Innovation in the European Union. A problem – solving approach to fuel 
innovation – led growth.  
220 LaGro, Yosifova (2017). Input to EIT’s Strategic Innovation Agenda. Future EIT Thematic Areas. Expert Analysis. Inclusion and  
integration, p. 5.  
 
154  
Alignment with Horizon Europe, including the Glo bal Challenges and Competitiveness pillar  
 
The scope of the theme corresponds well with the Inclusive and Secure Society cluster of the 
Global Challenges and Industrial Competitiveness Pillar as outlined in the Commission 
proposal for establishing Horizon Europe programme. A KIC established within the Inclusion, 
Integration, and Migration theme could directly contribute to two areas of intervention: 
Democracy  and Social and Economic Transformations .  
 
Cluster  Areas of 
intervention  Relevant broad lines of activities  
Inclusive 
and 
Secure 
Society  Democracy  Deliberative and participatory democracy and active and inclusive 
citizenship, including the digital dimension  
The impact of economic and social inequalities on political 
participation and democracies, demonstrating how reversing 
inequalities and combatting all forms of discrimination including 
gender, can sustain democracy  
Social and 
Economic 
Transformations  Social sustainability beyond GDP only indicators especially new 
economic and business models and new financial technologies  
Tax and benefits systems together with social security and social 
investment policies with a view to reversing inequalities and 
addressing the negative impacts of technology, demographics and 
diversity  
Human mobility in the global and local contexts for better migration 
governance, integration of migrants including refugees; respect of 
international commitments and human rights; greater, improved 
access to quality education, training, support services, active and 
inclusive citizenship especially for the vulnerab le; 
 
 
Economic and research capacities of the sector  
 
The EU has a broad but patchy research and higher education base in the areas of Inclusion, 
Integration and Migration. It covers most of the issues within the theme but there is a need for 
a more concerted effort in order to innovate and address challenges in the field. EU Member 
States spend large shares of their GDP on social protection and health. There is also 
increasing awareness of the new market opportunities and social value that can be tap ped in 
the area. The Table below provides an overview of the European strengths and weaknesses in 
the field of Inclusion, Integration and Migration.  
  
 
155  
Strengths  Weaknesses  
There is significant potential in the European 
social economy, which accounts for approx. 2 
million enterprises (10% of all European 
businesses) and employs over 11m paid 
members (or 6% of the employed).221 The untapped potential of social 
entrepreneurship. Neither the European funding 
system nor the legal framework is well -suited to 
supp ort social entrepreneurship.222 Due to 
complicated bureaucratic processes, social 
enterprises find it difficult to access funding 
schemes, to support their further development and 
ultimately achieve sustainability.223  
 
Strong research base. The EU MSs comprise 6 
out of 10 leading countries with the highest 
average H -index in research fields associated 
with the theme.224 The number of European HE institutions 
ranked as excellent is considerably lower than 
the rest of the world. Only three to four European 
universities were in the top 20 disciplines related to 
the thematic area.225 
MS have allocated significant funding to 
address the challenges. In 2016 the EU spent 
19.1% of its GDP on social protection and 
7.1% on health226.  A large share of providers of soci al services 
relies on public funding , which is highly volatile 
in times of economic or social crises. This 
undercuts the development of viable long -term 
business models.  
 
Financial sustainability of a KIC  
There are three groups of players in the thematic area: national and regional authorities, social 
enterprises and NGOs, and for -profit enterprises. The first two groups are not likely to 
significantly contribute to the financial sustainability of the futur e KIC through membership 
fees or payments for services. Over the past decade, they have faced a combination of fiscal 
austerity and an increased demand for services due to the migration crisis, residual effects of 
the financial crisis, etc. For -profit ente rprises typically provide services and products at the 
higher end of the market, e.g. care and support for the disabled or elderly who can afford the 
services. Hence, while some of the enterprises could contribute to the financial sustainability 
of the KIC , their interests might not be well -aligned with the social mission of the KIC.  
  
                                                           
221 Grigore A. (2013). Social economy entities: a worldwide overview, Review of Applied Socio -Economic Research,  6(2).  
222 BEPA (2010). Empowering people, driving change. Social Innovation in the European Union, p. 102.  
223 LaGro, Yosifova (2017). Input to EIT’s Strategic Innovation Agenda. Future EIT Thematic Areas. Expert Analysis. Inclusion and  
integration, p. 8.  
224 Scimago Journal & Country Rank, 2016. The following research subarea were used to estimate the average H -index of countries in the 
inclusion, integration, and migration thematic area: (i) Aging, (ii) Communication, (iii) Cultural studies, (iv) Demography, (v) Education, 
(vi) E -learning, (vii) Geography, planning and development, (viii) Geriatrics and gerontology, (ix) Gerontology, (x) Industrial rela tions, (xi) 
Occupational therapy, (xii) Organisational behaviour and human resource management, (xiii) Public administration, (xiv) Social psychology, 
and (xv) Social work.  
225 Disciplines considered: Education & Training, Social Policy & Administration, Sociology (3 EU universities in the top 20), Ps ychology 
(4 EU universities in the top 20).  
226 Eurostat (2018). Go vernment expenditure by function for European Union (28 countries). Retrieved at 
http://ec.europa.eu/eurostat/statistics -explained/index.php/Government_expenditure_by_function_ –_COFOG  
 
156 The future KIC could contribute to the creation and growth of social enterprises that are 
renowned for the development of social innovations.227 However, it is not likely that  return on 
investment/equity of incubated start -ups will constitute a significant stream of KIC’s income. 
First, social enterprises are focused on generating a return for society rather than return on 
investment.228 Hence, profits (if any) are usually reinve sted in scaling up the services.  
Second, to generate a significant return on investment, social enterprises need stable streams 
of income. Most social enterprises adopt a ‘hybrid’ business model, i.e. derive their revenues 
from a combination of the market  (sale of goods and services) and non -market (subsidies, 
grants, donations, etc.) sources. Research shows that public sector funding dominates the 
revenue streams of social enterprises. For example, around 45% of social enterprises in Italy 
mainly rely on public funding. In the UK, 52% of social enterprises derive some and 23% 
derive all their income from the public sector.229 Hence, financial stability, growth, and 
ultimately return on investment will to a large extent depend on the level of public funding.  
Careers in the field do not offer high financial rewards. This could negatively impact the 
capacities and/or willingness of prospective students to pay tuition fees for EIT labelled 
courses. As a result, it is not likely that the future KIC could generate  significant income from 
its education services.  
Overall, there are significant risks that the future KIC will not generate sufficient income 
through traditional sources of revenue (membership fees, the sale of services, and return on 
investment and tuiti on fees). Unless the KIC develops alternative income streams, it is not 
likely to be financially sustainable.  
 
Potential to address bottlenecks for innovation  
There is high demand for innovations in the field. However, the interviews and desk research 
suggest that there are three long -standing challenges to the development and take -up of 
innovations in the field.  
1) Constraints in scaling -up of innovations . Traditional businesses predominantly focus on 
relatively standardised products and services that ca n be easily traded across markets. Hence, 
scaling typically involves the growth of business and expansion to new markets. However, the 
actors within social economy typically focus on the provision of services that are difficult to 
transfer, because they ar e generally labour intensive, personalised and relational.230 As a 
result, social -innovations face challenges when ‘travelling’ across social enterprises, policy 
domains and regions / countries.231  
2) Limited access to private finance . While traditional enter prises aim to maximise 
shareholder value, the actors in the field of inclusion and integration prioritise social value or 
seek to strike a balance between the two. As a result, the start -ups and scale -ups are less 
attractive to the established providers of  debt and equity capital. Furthermore, national 
regulation can also impose additional barriers. For example, social enterprises in the Czech 
Republic are prohibited from using own assets as collaterals to guarantee loans, while in 
Romania bank rules place not-for-profit social enterprises among the riskiest borrowers.232  
                                                           
227 DG GROWTH. Social enterprises [website]. Retrieved at: http://ec.europ a.eu/growth/sectors/social -economy/enterprises_en  
228 OECD/European Union (2013). Policy Brief on Social Entrepreneurship.  
229 European Commission (2015). A map of social enterprises and their eco -systems in Europe. Synthesis report, pp. 36 -37.  
230 European Union/OECD (2016) Policy Brief on Scaling the Impact of Social Enterprises.   
231 Benton, Glennie (2016). Digital Humanitarianism: How Tech Entrepreneurs Are Supporting Refugee Integration, p. 21.  
232 European Commission (2015). A map of social enter prises and their eco -systems in Europe. Synthesis report.  
 
157 3) Constraints in distributing profits.  Social enterprises (particularly, if they are registered 
as non -profits) also face obstacles in distributing profits, which inhibits access to equity 
finance233.  
To alleviate the challenges, a number of alternative funding instruments have emerged (see 
below), although their scale and impact remains limited.234 Hence, national/regional 
authorities and the Commission stepped -in to support the development of  an ecosystem of 
finance for social enterprises. The EU Programme for Employment and Social Innovation 
(EaSI) provides loan guarantees for social enterprises as well as supports development of 
social finance markets in Europe. Furthermore, the European Fun d for Strategic Investment’s 
(EFSI) equity instrument supports social enterprises through pilot equity investments.  
Alternative funding sources for social enterprises  
 
Source: OECD/European Union (2013) Policy Brief on Social Entrepreneurship  
  
                                                           
233 Ibid. 
234 Ibid. Source  Explanation  Examples  
Solidarity finance  Use of traditional financial instruments (e.g. 
pension funds, savings, credit) to advance the 
public good.  Finansol (France, 200  000 
subscribers in 2005)  
Venture philanthropy  Application of the venture capital model into a 
social investment strategy to include blended 
returns (i.e. financial revenues and social 
benefits).  (Venture Experiment Programme 
by the Rockefeller Foundation  
Institutional investors  Institutional investors such as pension or mutual 
funds, insurance companies, or traditional banks 
can target investments in social enterprises either 
directly or through dedicated funds.  Pension and insurance funds,  
Donor -advised funds (DAFs): 
Pioneered by Fidelity’s Non -
profit Charitable Gift Fund  
Individual investors  Highly motivated high net worth individuals or 
“citizen investors” invest in social enterprises 
either directly or through dedicated funds.  Angel investors, High Net Worth 
Investors  
Crowdfunding  Web platforms connecting entrepreneurs with 
multiple “citizen investors”  Kiva; Just giving  
 
158 The third group of bottlenecks concerns access to the market. In a number of cases, pure 
markets for inclusion and integration services do not exist, because the end -users (e.g. 
unemployed youth, migrants, etc.) do not have the means to pay for the services. Hence, 
service providers rely on funding from charities and regional/na tional authorities. When 
markets do exist, social enterprises typically offer products and services at higher price levels 
in comparison to for -profit enterprises. The price differences arise due to the need to divest 
some of the revenues for social purpos es or due to the adopted production processes (e.g. 
social enterprises employ lower productivity workers, such as the disabled).235 Hence, such 
enterprises strongly rely on socially active consumers and tailored public procurement rules to 
compete with other  providers.  
Given the overwhelming constraints and challenges, there would be significant risks for a 
future KIC in terms of financial sustainability and potential overlaps with other public 
interventions that aim to address similar societal challenges. A  range of national/regional and 
EU-level instruments have already attempted to address existing challenges in the field with 
some success and ensuring synergies by a future KIC would be therefore important.  
Suitability of theme vis -à-vis impact indicators  
Overall, most of the medium/long -term outcome indicators are relevant for a future KIC. 
However, the characteristics of the theme could have implications on the definition of targets. 
These are discussed in the table below.  
Indicators  Comment  
Jobs created / safeguarded in organisations 
directly benefiting from KIC support.  The indicator is relevant, but it does not capture the 
additional social value of employing disadvantaged 
groups, which is a widespread practice of enterprises 
working in th e field. It may be worth considering 
distributional weights as a means of contextualising 
this indicator for this particular theme.  
Revenue growth achieved in organisations 
directly benefiting from KIC support  To an extent, this will depend on the level of public 
funding to inclusion and integration and / or the 
extent to which the organisations supported by a KIC 
crowd -out the incumbents.  
Cost savings achieved by organisations 
directly benefiting from KIC support  Highly relevant indicator  
% of business  that have benefited from KIC 
support and engaged in different forms of 
innovation activities in the last two years  Highly relevant indicator  
Reduction in skills mismatches  Highly relevant indicator  
Financial sustainability coefficient  Highly relevant in dicator, but there are significant 
risks to the financial sustainability of a KIC in this 
area 
Net promoter score on overall satisfaction 
with EIT / KIC  Highly relevant indicator  
                                                           
235 OECD/European Union (2013) Policy Brief on Social Entrepreneurship.  
 
159 Contribution to alleviating societal challenge  Social impact indicators are  highly relevant, but 
there are significant challenges in demonstrating the 
contribution of concrete initiatives or enterprises236.  
10.12.  Annex 10:  Model -based Analysis on co -funding model for KICs  
Model -based analysis of the Commission proposal for  
the revision  of the EIT Regulation carried out by the Commission's Research Joint 
Centre  
Non-technical summary  
This Annex describes a model -based analysis assessing impacts of co -funding modalities 
under the four policy scenarios considered in the EIT Impact Assessmen t. The analysis 
consists of two parts: a theoretical model -based analysis and an empirical model -based 
analysis. Both approaches provide illustrative examples of selected likely key impacts 
triggered by EIT -supported investments on an additional investment  leveraged by the EIT 
contribution, without aiming to cover the entire spectrum of potential impacts on the EU 
economy, society and environment. Two channels of the policy adjustment are considered: 
the co -funding rate and the risk premium component of the  cost of capital.  
The results from the theoretical analysis suggest that both the co -funding rate and the risk 
premium matter importantly for the EIT-support on leveraging an additional investment. The 
higher is the policy ability to reduce financial, tech nology or market uptake risks, the larger is 
the potential of the EIT investment support to leverage an additional investment in KIC -
supported projects/sectors. Results for the co-funding rate are more nuanced, as higher co -
funding rate per se implies high er investment leverage per investor but also fewer investors. A 
second important result is that the two policy intervention channels – the co -funding rate and 
the risk premium component of the cost of capital – interact mutually . This implies that, for 
example, a decrease in the number of investors due to higher co-funding rate could be offset 
by lowering the risk premium component of the cost of capital.  
The results from the empirical simulation analysis confirm that those EIT policy options with 
the highe st capacity to reduce the risk premium component of the cost of capital and impose 
the highest private investment co-funding rate are leveraging the highest amounts of an 
additional investment in KIC -supported projects/sectors. Among the four analysed scen arios, 
these are scenarios S2A and S2B with the highest cumulative leverage effects over the entire 
2021 -2035 year period. In contrast, scenario S1A performs considerably weaker in terms of 
leveraging an additional (private) investment. In terms of the EIT  financial sustainability, 
these simulation results suggest that the EIT policy scenarios S2A and S2B are considerably 
more financially sustainable than the EIT policy scenarios S1A and S1B when a time horizon 
of two entire programming periods is considere d. 
  
                                                           
236 OECD/European Union (2013). Policy Brief on Social Entrepreneurship.  
 
160 1 Introduction  
The European Institute of Innovation and Technology (EIT) has been set up in response to the 
need to address major societal challenges by improving the innovation performance of the 
EU. Among major challenges to the innovation performan ce is the need for an increased R&D 
investment in the EU. The overall mission of the EIT is to contribute to a sustainable 
economic growth and competitiveness of Europe by reinforcing the innovation capacity of the 
Member States and the Union.  
In order to address these challenges and achieve innovation objectives, the EIT provides an 
investment support in selected policy areas with the greatest benefits for society: Climate, 
Digital, Innovative Energy, Health, Raw Materials, Urban Mobility and Added Value 
Manufacturing. The bottom -up approach of the EIT activities aims primarily at creating 
knowledge and innovation and encouraging greater R&D investment in these policy areas. 
These are essential to address the knowledge and innovation gap in Europe, thereby 
supporting the Union's strategic objectives and policy priorities, including a long -term growth 
and competitiveness but also wider societal impacts.  
The objective of the EIT impact assessment is to provide an evidence base for two 
Commission proposals: (i)  the Commission proposal for an amendment of the EIT 
Regulation, which is its founding legal base; and (ii) the Commission proposal for a new 
Strategic Innovation Agenda (SIA) for the EIT for the period 2021 – 2027 setting out its 
strategic priorities and objectives during the Horizon Europe programming period. This 
Annex provides a scientific support by enlarging the evidence base of potential impacts of 
alternative EIT funding scenarios.237 
To study the impact of EIT investment -support measures on private i nvestments, we develop 
a stylised investment model. Using this model, we undertake a conceptual and simulation 
analysis by looking at the impact of the co -funding rate and policy -induced changes in the risk 
premium component of the cost of capital. Both in  the theoretical model and simulation 
analysis we analyse two scenarios with two subs -scenarios: with and without the enforcement 
of the private co -funding of the investment support and with and without reduction in the risk 
premium component of the cost o f capital. They help us to identify and understand potential 
implications of alternative EIT funding scenarios.  
The results from the theoretical analysis suggest that both the co -funding rate and the risk 
premium component of the cost of capital  matter imp ortantly for the EIT-support on 
leveraging an additional investment. The higher is the policy ability to reduce financial, 
technology or market uptake risks, the larger is the potential of the EIT investment support to 
leverage an additional investment in KIC-supported projects/sectors. Results for the co-
funding rate are more nuanced, as higher co -funding rate per se implies higher investment 
leverage per investor but also fewer investors. A second important result is that the two policy 
intervention chann els – the co -funding rate and the risk premium component of the cost of 
capital – interact mutually . This implies that, for example, a decrease in the number of 
                                                           
237 A complete description of the analysis presented in this Annex with all the assumptions and sensitivity analysis is provided in JRC 
reports Kancs, D. (2019) "Economic Impacts of the European Institute of Innovation and Technology Investment Strategies: A Model -based 
Assessment", JRC Working Papers JRC115573, Joint Research Centre, European Commission; Ivanova, O., Kancs D., and Thissen, M.  
(2019): Regional Macroeconomic Impacts of EIT Investments in the EU, JRC Working Papers, Joint Research Centre, Europe an 
Commission.  
 
161 investors due to higher co-funding rate could be offset by lowering the risk premium 
component of the cost of capital.  
The results from the empirical simulation analysis confirm that those EIT policy options with 
the highest capacity to reduce the risk premium component of the cost of capital and impose 
the highest private investment co-funding rate  are leveraging the highest amounts of an 
additional investment in KIC -supported projects/sectors. Among the four analysed scenarios, 
these are scenarios S2A and S2B with the highest cumulative leverage effects over the entire 
2021 -2035 year period. In con trast, scenario S1A performs considerably weaker in terms of 
leveraging an additional (private) investment. In terms of the EIT financial sustainability, 
these simulation results suggest that the EIT policy scenarios S2A and S2B are considerably 
more finan cially sustainable than the EIT policy scenarios S1A and S1B when a time horizon 
of two entire programming periods is considered.  
 
2 The EIT investment support  
Policy impacts on economy, society and environment in general and – due to various inter-
sectoral, inter -regional and inter -temporal linkages and interdependencies – EIT investment 
support effects in particular are diverse and complex. Because of their prominent role in 
improving the innovative performance of the Member States and the Un ion, two types of 
effects of EIT -supported investments are of particular interest in the context of EIT 
investment support policies: (i) impacts on the EU economy in general (demand effects (e.g. 
hiring of workers, machinery), structural effects (e.g. prod uctivity and human capital growth), 
and macroeconomic effects (e.g. on GDP and employment)); and (ii) impacts on the 
additional investment leverage in particular (existing KIC partner investment, new 
investors).238 Increase in the private investment will tri gger further impacts on economy 
(demand, structural, macro -economic, etc.). The main emphasis of the analysis detailed in this 
Annex is on impacts on the leverage of an additional investment, as these effects very 
considerably among the three considered EI T funding scenarios. As noted above, there are 
many more economic impacts, as well as societal and environmental effects which, however, 
are not considered in the present analysis.  
 
2.1 Impacts on economy  
Economic impacts of EIT investment support policies  are not only multi -faceted and non -
linear, many of them are unobservable and hence cannot be identified by simply looking at 
data. For example, when the EIT Digital  invests in a broadband network, direct observable 
activities include the amount of workers' time required to lay network cables underground, 
machinery and materials such as the fibre optic cables. The length of cabling kilometres can 
be observed, the work ers' time can be measured – in Figure 1 they are referred to as the 
demand effect on the economy . 
The constructed broadband network connects homes and businesses enabling faster 
communication services. Eventually, these effects can be observed and measured  directly too. 
                                                           
238 For the sake of the notational simplicity, in the context of this impact assessment we refer to all non -EIT investment as a private 
investment.  
 
162 It is less straightforward, however, to measure how the new services may help to create new 
businesses or disrupt existing ones, how productivity may be increasing, fostering the 
changing nature of work, etc. In Figure 1 they are referred to  as the structural effect on 
economy . These structural effects are confounded by other simultaneous developments and 
policies, making it extremely challenging to establish a causal link to EIT investments. Given 
that it would be impossible or prohibitively  expensive to measure them on a case -by-case 
basis, a model -based scenario analysis is being used that allows to simulate the potential 
development of the economy with and without the EIT digital interventions and 
compare/quantify the difference between al ternative policy scenarios.  
Another example, the EIT InnoEnergy  supports the supply of energy produced in a 
sustainable and affordable manner. The elaboration of such new innovative energy 
technologies is human capital and physical capital intensive, creat ing an immediate demand 
for these factors (highly skilled workers and machinery) in the economy. Again, in Figure 1 
they are referred to as the demand effect on the economy . These demand effects can be 
observed and their use and the associated costs can be  accounted for relatively 
straightforwardly.  
In the medium - to long -run, the newly innovated sustainable and renewable energy production 
technologies also reduce the EU economy's dependence on the imported energy, increase the 
efficiency of the energy prod uction and consumption, as well as create new energy supplying 
businesses in the EU. In Figure 1 they are referred to as the structural effect on economy . 
These structural effects in the EU economy are associated with a much larger uncertainty – as 
innovat ion is an inherently uncertain process – their causality and size are much more 
challenging to establish. Therefore, a model -based scenario analysis is required, as already 
noted above.  
Figure 1. Mechanics of the EIT investment sup port impact on economy  
 
Source: JRC illustration  
  

 
163 Demand side effects (direct, indirect and induced effects) together with structural effects (e.g. 
productivity, cost -advantage and competitiveness effects) result in total macro -economic 
effects on the ec onomy, such as GDP and employment. In Figure 1 they are referred to as the 
total effect on economy . Although, many production, consumption, trade, GDP, employment, 
etc. can be observed and measured, due to simultaneous developments and confounding 
factors,  it is rather challenging to establish causality between EIT -supported investments and 
growth of these indicators. For such purposes, a model -based scenario analysis needs to be 
undertaken that allows to simulate the potential development of the economy wi th and 
without EIT interventions and quantify/compare differences in production, consumption, 
trade, GDP, employment, etc. between alternative policy scenarios.  
For a holistic and comprehensive understanding of net effects of EIT -supported investments, 
in addition to the impact on economy, also inputs and their costs need to be accounted for. 
Indeed, the EIT investment budget – similarly to the entire EU budget – has certain sources of 
revenues that can be traced back to taxes paid by households and busines s in each Member 
State and region. Part of the required EIT funding comes from extra household savings, part 
of it comes from borrowing abroad, yet another part is derived from relocating existing 
savings that may have been invested differently. A similar line of argument applies also to the 
measurement and tracking of inputs needed to finance these investments. In the context of 
funding and financing, advantages of using an economic model are that funding can be linked 
to sources and all inputs and their c osts can be thoroughly accounted for.  
Finally, there are also spill -overs to other regions and sectors, even those not directly 
benefiting from EIT -supported investments. For example, through inter -sectoral input -output 
linkages, through cross -border trade  of goods and services, knowledge spill -overs and a 
spatial diffusion of technology, also not directly supported regions/sectors benefit from EIT -
supported investments in the medium - to long -run. On the other hand, policy -induced 
crowding -in and pro -compet itive effects on input and output markets may increase 
competition and eventually crowd out less competitive companies in some regions/sectors.239 
In Figure 1 they are referred to as the indirect economic effects . To be able to consider the full 
range of such effects  ̶  both positive and negative  ̶  and to form a more comprehensive view 
of the total net economic impact, a model -based analysis is required.  
 
2.2 Leverage of an additional investment  
Among various impacts on economy, EIT -supported investment s affect the investment 
decisions of private investors in the KIC -supported projects/sectors – Climate, Digital, 
Innovative Energy, Health, Raw Materials, Urban Mobility and Added Value Manufacturing. 
Higher private investments may result from both existin g KIC beneficiaries ( incumbent 
companies ) as well as new partners investing in KIC -supported projects/sectors ( new 
investors ). 
EIT-supported investments constitute only part of the total investment in economy, the major 
part of investment being provided by  private and public investors.240 The extent to which 
                                                           
239 Michalek, J., P. Ciaian and D. Kancs, 2016. "Investment Crowding Out: Firm -Level Evidence fro m Northern Germany," Regional 
Studies, 50(9), 1579 -1594.  
240 In the context of this impact assessment we refer to all non -EIT investment as a private investment.  
 
164 existing KIC beneficiaries engage in KIC project/sector investments can be affected by co -
funding rates that are laid down in the EIT legislative framework. For example, in the case of 
a 50% co -funding ra te, the investment provided by KIC beneficiaries have to at least match 
the investment amount made available by the EIT via KIC (the investment amount provided 
by private investors can be higher though). In Figure 2 this is referred to as the incumbent 
company investment . 
Second, financial instruments, such as the EIT -supported investments, offer the potential to 
help cushioning financial, technology and market uptake risks. Among others, EIT -supported 
investments reduce the cost of capital and contribute t o an improved risk -reward profile of 
KIC investment projects. All other things being equal, lower KIC -project -related risks imply 
lower risk premium which, because of lower capital costs, makes investment in KIC -
supported projects/sectors more attractive ( compared to other investment alternatives). As a 
result, more private investors are willing to invest into KIC -supported projects/sectors. In 
Figure 2 these are referred to as new investors . 
Figure 2. Mechanics of the EIT investmen t support impact on private investments  
 
Source: JRC illustration  
The two effects together – increase in the incumbent company investment (intensive margin) 
and increase in the number of investors (extensive margin) – determine the total leverage 
effect on an additional investment . Note that the two adjustment channels of the EIT 
investment support – the co -funding rate and the risk premium component of the cost of 
capital – may work in the opposite direction for incumbent and new investors, depending on 
how exactly the EIT investment support is implemented. For example, whereas higher co -
funding rate implies higher additional investment leverage from incumbent investors, it may 
also imply fewer (particularly risk averse) new investors. As we will see in t he next section, 
this decrease can be offset through a policy intervention, for example, by lowering the risk 
premium component of the cost of capital.  
 
  

 
165 3 Model -based analysis of the EIT impact on the leverage of an additional investment  
One of the main objectives of the EIT is to improve the innovation performance in the EU. 
Improving the innovation performance requires higher R&D investment, an important part of 
which should come from private sources. In this section, we develop a stylised investment 
model and analyse the impact of EIT investment -support measures on the leverage of an 
additional investment. The ability leverage an additional investment is of particular interest, 
because the alternative EIT funding scenarios suggest important differences in the KIC ability 
to leverage an additional investment.  
In order to study the impact of EIT investment -support measures on the leverage an additional 
investment, we develop a simple investment model. Using this model, we undertake a 
conceptual and simulat ion analysis by looking at the impact of different co -funding rates and 
policy -induced changes in the risk premium component of the cost of capital. Both in the 
theoretical model and simulation analysis we analyse two scenarios with two subs -scenarios: 
with and without the enforcement of the private co -funding of the investment support and 
with and without reduction in the risk premium component of the cost of capital. They help us 
to identify and understand potential implications of differences in co -fundi ng rates between 
EIT funding scenarios and the role of financial, technology or market uptake risks.  
 
3.1 Theoretical model -based analysis  
3.1.1 The model  
The model has four types of agents that are active on the capital market: a representative firm 
(private investor), loan suppliers (banks), capital suppliers (e.g. machinery/technology 
suppliers) and government (policy framework). Banks provide loans to firm. The firm uses 
loan to buy capital goods from capital suppliers. The firm uses the services o f capital goods to 
produce final products. The government may intervene in the capital market via an investment 
support.  
The representative firm's output in a given KIC sector is assumed to be a function of the 
capital amount, 𝐾. The production function i s represented by 𝑓(𝐾) with 𝑓𝑘>0 and 𝑓𝑘𝑘<
0.241 Capital, 𝐾, is a stock variable, which supplies services used by the firm during the 
production process. For simplicity, we assume that the entire investment capital, 𝐾, is 
financed from a bank loan, 𝐿, at a fixed interest rate, 𝑖. The capital good's price is equal to the 
discounted net present value of future rents.  The firm's profit function is given by:  
Π=𝑝𝑓(𝐾)−𝑘𝐾 
Where 𝑘 is the rental price of capital, 𝑘=𝑅(𝑖+𝛿), 𝑝 is the price of the final product,242 𝑅 is 
the unit price of the capital good, and 𝛿 is the capital depreciation rate. The firm's capital 
rental unit costs include interest payments, 𝑖𝑅, and depreciation costs, 𝛿𝑅.243 
  
                                                           
241 𝑓𝑘 and 𝑓𝑘𝑘 are first and second derivatives of the production function with respect to ca pital, respectively.  
242 For the sake of simplicity, we assume that the analysed regional economy is small and open, which implies that the output pri ce is fixed.  
243 For example, if 𝛿=0 then the capital good is non -depreciable, such as land.  
 
166 The firm's equilibrium conditions  are given by:  
𝑝𝑓𝑘=(1+𝜙)𝑘=(1+𝜙)𝑅(𝑖+𝛿) 
𝐾=𝑆 
𝐿=𝑅𝐾 
Where 𝑆 is the capital supply function. Equation (2) represents the firm's marginal condition 
for capital derived from the profit maximisation problem. It represents the firm's decision on 
the optimal quantity of the capital use by taking into consideration margi nal benefits, 𝑝𝑓𝑘, and 
marginal costs, (1+𝜙)𝑘, adjusted by the risk premium component of the cost of capital 
factor, 𝜙. The capital equilibrium condition (2) yields a standard capitalisation formula 
𝑅=𝑝𝑓𝑘/(1+𝜙)(𝑖+𝛿), which implies that the capital g ood's price is equal to the net 
present value of future capital rents. Parameter 𝜙 measures the degree of 
imperfections/uncertainties (defined as the ratio between the marginal profit and the rental 
price of capital), it is inversely related to the risk p remium. If 𝜙>0, then the firm's marginal 
value product of capital exceeds the marginal cost of capital,  𝑘. The risk premium component 
of the cost of capital constrain the capital use and hence the firm profitability; everything else 
equal, by increasing investment, the firm could increase its profit. If 𝜙=0, then the firm's 
equilibrium condition (2) is equal  with the competitive/perfect capital market result, where 
𝑝𝑓𝑘=𝑘, implying that all profitable opportunities of the capital use are exploited, if this 
equilibrium holds.  
Equation (3) represents the equilibrium market clearing condition for the capital  good, where 
the capital good's supply, 𝑆, equals the firm's demand for capital, 𝐾. To simplify the analysis, 
we assume a perfectly elastic capital supply, implying that the rental price of capital, 𝑘, is 
fixed.244 
The total firm loan demand, 𝐿, is deter mined by the capital good's price, 𝑅, and the quantity 
of capital invested by firm, 𝐾, 𝐿=𝑅𝐾 in equation (4). Implicitly, we assume that capital 
costs are exclusively financed through bank loans. The total firm's interest costs on the loan 
equal 𝑖𝑅𝐾,245 as the firm uses loans to purchase capital goods from capital suppliers. In return, 
it pays interest costs to the bank on the borrowed loan.  
The capital market is illustrated in Figure 5 . Condition (2) determines the firm's demand for 
capital services and in Figure 5  is shown by curve 𝐷𝑝𝑐 without the risk premium component 
of the cost of capital  (𝜙=0), and by curve 𝐷𝑖𝑐 with the risk premium component of the cost 
of capital (𝜙>0). The vertical difference between 𝐷𝑝𝑐 and 𝐷𝑖𝑐 represents the risk premium, 
[𝜙/(1+𝜙)𝑝𝑓𝑘]. The horizontal c urve,  𝑆, represents the supply of capital services.  The 
intersection between demand and supply yields the equilibrium capital rental price and capital 
use, (𝑘∗,𝐾𝑝𝑐∗) and (𝑘∗,𝐾𝑖𝑐∗), without and with policy -induced reductions in the risk premium 
compone nt of the cost of capital, respectively. The investment is smaller with than without 
policy -induced reductions in the risk premium component of the cost of capital, 𝐾𝑖𝑐∗<𝐾𝑝𝑐∗. 
                                                           
244 This is consi stent with the short -run modelling of the capital market, where firms adjust capital quantities as a response to a policy 
change. Other effects, such as changes in prices and/or quantities of other inputs will take place in the medium to long -run. Usually,  in the 
firm investment literature variable inputs are assumed to change in the short -run, whereas capital is assumed to change in the long -run. 
Because our objective is to analyse the effect of investment support, changes in the firm capital is a short -run effect of policy changes. In the 
long-run, adjustment of other inputs and/or prices follow as a reaction to policy -induced capital change.  
245 This assumption is not strictly needed in the model to obtain these results. The interest rate, i, represents inc ome to capital owners. If one 
would consider a firm -owned capital, then the interest rate, i, would represent the opportunity cost of capital.  
 
167  
3.1.2 EIT investment support  
Let 𝛼  denote the investment co -funding rat e of the EIT investment support. The co -funding 
rate, 𝛼, measures the share of the EIT -supported investment (purchase costs of EIT capital 
investments). In line with EIT co -funding rules, the maximum quantity of capital eligible for 
support is limited at 𝐾𝑚𝑎𝑥.246 
In order to ensure a long -term financial sustainability, the EIT investment support aims to 
increase the quantity or/and the quality of the private investment in the KIC -targeted 
project/sector, i.e. to create an additionality effect to the EIT investment. In the underlying 
model this implies to increase the firm's stock of capital relative to the capital stock used by 
firms at the prevailing market prices of capital before the EIT investment support. With the 
investment support, the firm's profi t function (1) changes to:  
Π=𝑝𝑓(𝐾𝑛𝑜+𝐾𝑠)−𝑘𝐾𝑛𝑜−[𝑘−𝛼𝑖𝑅]𝐾𝑠 
subject to the investment support constraint  𝐾𝑠≤𝐾𝑚𝑎𝑥 
where  𝐾𝑛𝑜 is the part of capital that does not benefit from the EIT investment support, and 
 𝐾𝑠 is the part of capital tha t benefits from the investment support, consistent with the 
implementation regulation of the EIT investment support.  
The value of the EIT investment support per unit of capital is equal to the capital price 
multiplied by the co -funding rate, 𝛼𝑅. The firm 's loan demand decreases by an equivalent 
amount resulting in lower loan interest costs. More precisely, the investment support reduces 
loan interest costs per unit of the supported capital by 𝛼𝑖𝑅, i.e. 𝑖𝑅−𝛼𝑖𝑅 =(𝑅−𝛼𝑅)𝑖=
(1−𝛼)𝑖𝑅. This way, the EIT investment support reduces the user cost of capital in the 
model.  
The implementation details of the investment support have important implications for the 
firm's investment behaviour, particularly in terms of how it affects the user cost of capital and 
hence the marginal capital profitability. Depending on whether the investment support affects 
the capital profitability at the margin or not, the firm's equilibrium capital marginal condition 
(2) changes as follows:247 
Firm's equilibrium conditions, when the investment support affects the capital profitability at 
the margin:  
𝜕Π
𝜕𝐾𝑛𝑜=𝑝𝑓𝑘(𝐾𝑛𝑜)−(1+𝜙)𝑘=0 
𝜕Π
𝜕𝐾𝑠=𝑝𝑓𝑘(𝐾𝑛𝑜+𝐾𝑠)−(1+𝜙)(𝑘−𝛼𝑖𝑅)−𝜆=0 
Firm's equilibrium conditions, when the investment support does not affect the capital 
profitability at the  margin:  
𝜕Π
𝜕𝐾𝑠=𝑝𝑓𝑘(𝐾𝑠)−(1+𝜙)(𝑘−𝛼𝑖𝑅)−𝜆=0 
                                                           
246 This is a more realistic assumption, because the actual budget for the EIT is limited and is subject to competi tion, implying that not all 
capital benefits from the support. We assume  𝐾𝑚𝑎𝑥 sufficiently low; less than the equilibrium quantity of investment in the absence of 
support (see below).  
247 We consider the case when the investment support affects only th e firm's interest costs. In general, this is consistent with the 
implementation of the firm -level investment support. The investment support facilitates the purchase of capital. The depreciation costs ( 𝛿𝑅) 
are not eligible for the investment support.  
 
168 𝜕Π
𝜕𝐾𝑛𝑜=𝑝𝑓𝑘(𝐾𝑠+𝐾𝑛𝑜)−(1+𝜙)𝑘=0 
where 𝜆 is the shadow price of the eligibility constraint,  𝐾𝑠≤𝐾𝑚𝑎𝑥. The profit equation (5) 
implies that the profitability  of capital is higher for the supported capital, 𝐾𝑠, (by 𝛼𝑖𝑅) than 
for the non -supported capital, 𝐾𝑛𝑜. However, the investment support improves the capital 
profitability at the margin only in equations (7) -(8) but not in equations (9) -(10). This 
difference is due to the enforcement/non -enforcement of the private investment co -funding or 
due to policy -induced changes in the risk premium component of the cost of capital (see 
further). We illustrate this in Figure 6  for the capital demand without a policy -induced 
reduction of the risk premium component of the cost of capital, 𝛿𝐷𝑝𝑐.248 
First, consider equations (7) -(8), which describe an EIT policy scenario when the investment 
co-funding is enforced. The firm's capital equilibrium without the investment support is 
(𝑘∗,𝐾𝑝𝑐∗). Up to the equilibrium investment without support 𝐾𝑝𝑐∗, the investment support has 
no effect on the marginal capital profit ability. Capital 𝐾𝑝𝑐∗ does not benefit from the 
investment support (i.e. 𝐾𝑛𝑜=𝐾𝑝𝑐∗), and the capital demand is given by curve 𝐷𝑝𝑐 (this 
follows from equation (7)). For investment higher than 𝐾𝑝𝑐∗, the investment support increases 
the capital profitability at the margin (by 𝛼𝑖𝑅∗) for the quantity of capital up to 𝐾𝑚𝑎𝑥, which 
represents the supported capital, 𝐾𝑠=𝐾𝑝𝑐𝑠∗−𝐾𝑝𝑐∗=𝐾𝑚𝑎𝑥 (this follows from equation (8)).249 
This implies a di scontinuous firm's capital demand. Starting on the left -hand side in Figure 6 , 
the capital demand is given by curve 𝐷𝑝𝑐,𝐷𝑝𝑐𝑠,𝐷𝑝𝑐. By assumpti on, when the investment co -
funding is enforced, equations (7) -(8) always hold. This is because the investment co -funding 
makes only additional capital eligible for the support. In the presence of the risk premium 
component of the cost of capital, equations  (7)-(8) will hold both with and without the 
investment co -funding enforced (see further).  
Next, consider equations (9) -(10), which describe an EIT policy scenario when the investment 
co-funding is not enforced. Up to investment 𝐾𝑝𝑐1, the investment sup port increases the 
profitability of capital at the margin (by 𝛼𝑖𝑅∗) up to the maximum quantity 𝐾𝑚𝑎𝑥 =
(𝐾𝑠=𝐾𝑝𝑐1=𝐾𝑚𝑎𝑥) and the capital demand is given by curve ,𝐷𝑝𝑐𝑠1 (this follows from 
equation (9)). Beyond capital 𝐾𝑝𝑐1, the investment su pport does not affect the firms' marginal 
profitability, implying that the capital demand is unchanged at 𝐷𝑝𝑐 (this follows from 
equation (10)). As above, this implies a discontinuous firm's capital demand. Starting on the 
left-hand side in Figure 6 , the capital demand is given by curve 𝐷𝑝𝑐𝑠1,𝐷𝑝𝑐. Note that at the 
margin, the firm's capital profitability is not affected by the investment support, investment is 
at 𝐾𝑝𝑐∗. Such sit uation may occur when the investment co -funding is not enforced and there 
are no policy -induced changes in the risk premium component of the cost of capital, as shown 
next.  
 
3.1.3 Scenario 1: No enforcement of the private investment co -funding  
In this sect ion, we analyse the impact of the EIT investment support on the leverage of an 
additional investment without the enforcement of the private investment co -funding. From the 
four scenarios, the EIT policy scenarios S1A and S1B have a zero private investment co-
                                                           
248 Similar can be shown for the imperfectly competitive demand, 𝐷𝑖𝑐. 
249 Note that in the case shown in Figure 6, the eligibility constraint 𝐾𝑠≤𝐾𝑚𝑎𝑥 is binding, 𝜆>0. This does not hold in general though. For 
a sufficiently high maximum eligibility threshold, firm may prefer to not exploit the investment support possibility in full.  
 
169 funding rate in the first 15 and 10 years, respectively. Hence, they correspond to the situation 
analysed in this section.  
Baseline BL : First, consider a baseline scenario without policy -induced changes in the risk 
premium component of the cost of capit al, implying that the investment support does not 
affect the capital profitability at the margin. This scenario serves as baseline against which to 
compare other possible capital market outcomes triggered by policy. In Figure 5 , the 
equilibrium investment without the investment support is 𝐾𝑝𝑐∗. As above, the maximum 
eligibility threshold  is 𝐾𝑚𝑎𝑥, where 𝐾𝑚𝑎𝑥 <𝐾𝑖𝑐∗.250 In this case, the equilibrium capital with 
and without the EIT investment support is 𝐾𝑝𝑐∗, the entire support (area FG) benefits firm and 
the investment support does not create distortions on the capital market. In equilibrium, firm 
invests 𝐾𝑝𝑐1 and receives the investment support up to the maximum, 𝐾𝑝𝑐1=𝐾𝑚𝑎𝑥, and gains 
the full value of the support, area H (=area FG). However, firm can consider expanding 
investments by 𝐾𝑚𝑎𝑥. In this case, the equilibrium investment would shift to 𝐾𝑝𝑐∗ and firm's 
gains would equal to area G. Given that area H is larger than area G, due to a decreasing 
capital productivity, it does not pay -off to increase capital beyond 𝐾𝑝𝑐∗, if 𝐾𝑠<𝐾𝑝𝑐∗.251 This 
implies that without a policy -induced reduction of the  risk premium component of the cost of 
capital, private investments are crowded out by subsidised investments; private investments 
would be undertaken also in absence of an investment support, suggesting no leverage of an 
additional investment.  
Scenario S1 : Next, consider a scenario with policy -induced changes in the risk premium 
component of the cost of capital, implying that the investment support affects the capital 
profitability at the margin. Because of the capital increase by 𝐾𝑚𝑎𝑥 (to 𝐾𝑖𝑐∗), firm gains from 
the investment support are equal to area ABC , which is more than firm gains (area H) obtained 
if the capital use is kept unchanged at 𝐾𝑖𝑐∗ (Figure 5 ). Hence, in a scenario with policy -induced 
changes in the risk premium component of the cost of capital, for firm it is optimal to increase 
investment by 𝐾𝑚𝑎𝑥 whereas the equilibrium capital without the enforcement of the 
investment co -funding is at 𝐾𝑖𝑐𝑠∗.252 
 
  
                                                           
250 Note that 𝐾𝑚𝑎𝑥 <𝐾𝑖𝑐∗ also implies that 𝐾𝑚𝑎𝑥 <𝐾𝑝𝑐∗. 
251 The intuition behind this result is that without changes in the risk premium component of the cost of capital firms can exploit  all 
profitable investment opportunities even without the investment support.  Providing an investment support to firms (such that  𝐾𝑠<𝐾𝑝𝑐∗) does 
not alter investment opportunities available to firms. An optimal firm's behaviour is to use the same quantity of capital wit h and without the 
investment support.  
252 Note that this does not hold in general, only for cases when the mark -up is sufficiently large, as shown in Figure 5. 
 
170 3.1.4 Scenario 2: Enforcement of the private investment co -funding  
In this section, we analyse the impact of the EIT investment support on the levera ge of an 
additional investment under the enforcement of the private investment co -funding. EIT 
funding conditionalities imply that policy makers enforce private investors to increase their 
investment by the quantity of the supported investment relative to the equilibrium investment 
at the prevailing market price of capital. From the four analysed scenarios, the EIT policy 
scenarios S2A and S2B have the highest private investment co -funding rates and hence most 
closely corresponds to the scenario analysed in  this section.  
The equilibrium conditions of the rental price and capital use without the investment support 
are (𝑘∗,𝐾𝑝𝑐∗) and (𝑘∗,𝐾𝑖𝑐∗) without and with policy -induced changes in the risk premium 
component of the cost of capital, respectively. Under t he enforcement of the private 
investment co -funding, capital 𝐾𝑝𝑐∗ and 𝐾𝑖𝑐∗ is not eligible for the investment support, only 
capital beyond these levels can be granted an investment support ( Figure 5 ). With the 
enforcement of the private investment co -funding, the EIT investment support shifts the 
equilibrium investment from 𝐾𝑖𝑐∗ to 𝐾𝑖𝑐𝑠∗ with policy -induced changes in the risk pre mium 
component of the cost of capital, and from 𝐾𝑝𝑐∗ to 𝐾𝑝𝑐𝑠∗ without policy -induced changes in the 
risk premium component of the cost of capital. In both cases, the quantity of capital increases 
by the eligibility threshold, 𝐾𝑚𝑎𝑥. Note that onl y part of capital, 𝐾𝑚𝑎𝑥, benefits from the EIT 
investment support. Although, the uptake of the EIT investment support is voluntary, firms 
have incentives to make use of the investment support, because the policy support reduces the 
user costs of the EI T-supported capital. Indeed, there are important differences on the private 
investment leverage with or without policy -induced changes in the risk premium component 
of the cost of capital, as shown next.  
Baseline BL : First, consider a scenario without poli cy-induced changes in the risk premium 
component of the cost of capital, implying that the investment support does not affect the 
capital profitability at the margin. This scenario serves as baseline against which to compare 
other equilibrium investments t riggered by alternative policy scenarios. In absence of a 
policy -induced reduction of the risk premium component of the cost of capital, the additional 
investment 𝐾𝑚𝑎𝑥 generates productivity gains equal to area GH, which is less than the rental 
cost of  capital (area FGH ), implying a net welfare loss equal to area F. Area F is a 
deadweight loss resulting from a misallocation of capital recourses. Firm benefits part of the 
investment support, which is equal to area G (equal to  productivity gain, area  GH, plus the 
policy support, area FG, minus the rental costs of capital, area  FGH ). Hence, without policy -
induced changes in the risk premium component of the cost of capital, an investment policy 
which supports the private investment may be welfare decreasing . 
Scenario S2 : Next, consider a scenario with policy -induced changes in the risk premium 
component of the cost of capital, implying that the investment support affects the capital 
profitability at the margin. In presence of policy -induced changes in the risk premium 
component of the cost of capital, the additional investment 𝐾𝑚𝑎𝑥 generates productivity gains 
equal to area ABCE  in Figure 5 . Policy costs are equal  to area BC, implying a net welfare gain 
equal to area A (equal to  the productivity gain, area  ABCE , minus the rental costs of capital, 
area BCE ).253 Firm gains are equal to area ABC, given by the net productivity gain (area A) 
                                                           
253 Note that this is not a general result. If the mark -up is not sufficiently large, then the net effect of the investment support could actually 
lead to a welfare loss.  
 
171 and the gain from the support (area BC).254 Hence, by reducing the risk premium component 
of the cost of capital, an investment support policy with the enforcement of the private 
investment co -funding may generate welfare gains.  
 
3.2 Model -based scenario a nalysis  
In this section, we empirically analyse four policy scenarios for a targeted EU level 
intervention on the basis of the Horizon Europe proposal for an EIT budget of 3 Billion EUR. 
The planning of future EIT expenditures, they will be aligned with th e Strategic Planning 
process with regard to the European Partnerships and the Global Challenges and Industrial 
Competitiveness pillar of Horizon Europe, while respecting the specificities of the EIT and its 
funding framework. All four EIT scenarios focus o n promoting and supporting sustainable 
innovation ecosystems across Europe, as envisaged in the Open Innovation pillar of the 
Horizon Europe proposal and in synergy with the Global Challenges and Industrial 
Competitiveness pillar of the Horizon Europe prop osal. 
In order to illustrate how the EIT investment support may affect the leverage of an additional 
investment, we simulate and discuss in detail results for two NUTS2 regions – Noord -Brabant 
(NL41) in the Netherlands and Helsinki -Uusimaa (FI1B1) in Finla nd.255 These two regions 
are selected, because the economies of these two EU regions benefiting from the EIT -
supported investment are fundamentally different. Second, also the EIT investment support is 
rather different in these two regions, both in terms of its magnitude and structure (KIC 
investment areas).  
In 2016, the EIT -supported investments in Noord -Brabant in the Netherlands amounted to 
2.87 percent of the total regional gross expenditure on R&D (GERD), which was 3012.39 
million Euro in NL41.256 The shar e of the EIT -supported investment was even higher, when 
considering the largest beneficiary sectors of the EIT support. For example, in the energy 
sector the share of the EIT -supported investment (EIT InnoEnergy) was as high as 34.91 
percent in the gross s ectoral expenditure on R&D in NL41. The EIT -supported investment 
share was considerably lower in ICT industries (EIT Digital), it amounted to 7.35 percent in 
the sectoral gross expenditure on R&D in NL41. These innovation data are used for the policy 
scena rio construction (see step 3).  
In order to undertake a model -based scenario analysis, first, regional accounts data from the 
Eurostat (Regional economic accounts - ESA 2010 (reg_eco10)) are used to parameterise and 
solve the model for the base year (2016).  By correctly calibrating the model, we are able to 
exactly reproduce the base year economy as observed in the Eurostat data. At this step, no 
policy support is implemented in the model yet.  
In a second step, the model is used to construct and simulate the  baseline scenario until the 
year 2035. Simulating the baseline scenario is needed, as the baseline development of 
                                                           
254 In a general equilibrium model, tax distortions and other inter -sectoral and inter -regional spillovers are accounted for to obtain total 
welfare effects of the investment support.  
255 Note that for a comprehensive and holistic capture of all regional and sectoral impacts of EIT -supported investments, all regional and 
sectoral economies (inclu ding those not receiving the EIT support) should be analysed in the model simultaneously; the presented analysis of 
few selected regions is for an illustrative purpose only.  
256 Eurostat: Intramural R&D expenditure (GERD) by sectors of performance and NUTS 2  regions [rd_e_gerdreg]. 
http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=rd_e_gerdreg   
 
172 economy without the policy support cannot be observed. The key baseline scenario 
assumptions are summarised in Tables 1 and 2 (row Baseline B L). There is no EIT supported 
investment implemented in the baseline scenario; baseline indicators, such as, an additional 
investment leverage will be used as benchmark against which to compare policy scenario 
outcomes.  
In a third step, impacts of the four  alternative EIT policy scenarios are encoded in form of 
model scenarios. The policy scenario construction requires four types of data to approximate 
the true private investment effect of the EIT investment support: (i) private co -funding rates 
for each EI T policy scenario; (ii) the average of the pre - and post -risk premium (before and 
after EIT -supported investments) under the four alternative EIT policy scenarios; (iii) the 
percentage increase in the capital stock induced by reduction in the risk premium;  and (iv) the 
capital -output ratio.  
 
Table 1: Scenario differences in Noord -Brabant: EIT -supported investment and the 
private investment co -funding rate, percent  
 
The private investment co -funding rates under each policy scenario are derived directly from 
the four alternative EIT funding scenarios and are summarised in Table 1. For the sake of 
comparability and to facilitate the link between the theoretical and empi rical analysis, we 
denote the analysed scenarios in the same way in both theoretical and simulation sub -sections: 
Scenario S1 and Scenario S2.257 As Table 1 suggests, there are import differences both in co -
funding rates between the four EIT policy scenarios  as well as in the co -funding rate 
development over time (2021 -2035). On average, throughout the entire 15 year period, the 
highest co -funding rate is in the EIT policy scenario S2B; the lowest in scenario S1A. By the 
end of the analysed period (2035), the  highest private co -funding rate is envisaged in the EIT 
policy scenario S1B (90%), followed by S2A (80%).  
The size of reduction in the risk premium that would come with EIT -supported investments is 
more difficult to pinpoint, as there are many con -funding  factors and econometric estimates 
are not available for EIT investments yet. Using EIB -supported investments and their impact 
on the risk premium as an example,258 together with base year EIT investment data for the 
Noord -Brabant region and the proposed EIT  budget distribution under the four policy 
scenarios, we estimate that EIT -supported investments would imply a reduction in the risk 
premium of 32.97 – 43.88% (i.e. the real interest rate would drop by 1.56 – 2.08 percentage 
points) for EIT -supported inves tment projects in the Noord -Brabant region in the 
Netherlands.259 The likely development of the risk premium in KIC -supported projects/sectors 
                                                           
257 Scenario S1 encompasses two EIT policy sub -scenarios (S1A and S1B); Scenar io S2 encompasses two EIT policy sub -scenarios (S2A 
and S2B).  
258 Di Comite, F., D. Kancs and P. Lecca (2016) 'Regional macroeconomic Impacts of EIB Investments in the EU', JRC Report, Europe an 
Commission, DG Joint Research Centre.  
259 Given the uncertainty as sociated with reduction in the risk premium that would come with EIT -supported investments, we undertake 
extensive sensitivity analysis with up to 10% lower and 10% higher reductions in the risk premium.  
Year 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Code Scenario 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
BL Baseline 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
S1A Scenario 1A 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
S1B Scenario 1B 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 20.00 40.00 60.00 80.00 90.00
S2A Scenario 2A 0.00 0.00 0.00 0.00 20.00 20.00 20.00 30.00 30.00 30.00 30.00 50.00 60.00 70.00 80.00
S2B Scenario 2B 0.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00
 
173 under the four EIT policy scenarios is summarised in Table 2. Among others, differences in 
the risk premium reducti on across scenarios as reported in Table 2 are due to differences in 
the EIT investment support implementation.  
Table 2: Scenario differences in Noord -Brabant: EIT -supported investment and the risk 
premium of KIC -supported projects/sectors, percentage poin ts 
 
The other two types of the required information for the scenario construction – the percentage 
increase in the capital stock induced by reduction in the risk premium and the capital -output 
ratio – are computed within the model based on regional econom ic accounts data.  
With the calibrated model and encoded policy scenarios at hand, in a fourth step we undertake 
a model -based scenario analysis to assess how different EIT funding scenarios (the key 
differences being stipulated in the four alternative poli cy scenarios) might affect the 
behaviour of private investors. We model an exogenous but highly persistent temporary 
reduction in the risk premium. To examine the model dynamics when the economy is affected 
by a reduction in the risk premium, EIT -supported  investments enter the model through 
lowering the user cost of capital. Hence, a reduction in the risk premium of investment in 
KIC-supported projects/sectors triggered by EIT -supported investments would lower the rate 
of return required by investors to un dertake new investment.  Decrease in the interest rate 
implies higher desired capital stock level and thus has a positive impact on the private 
investment. In other words, as shown in section 3.1, lower the risk premium component of the 
cost of capital imp ly lower risk for investors, increasing the willingness of private investors 
(particularly of risk averse investors) to invest in the KIC -supported projects/sectors (Climate, 
Digital, Innovative Energy, Health, Raw Materials, Urban Mobility and Added Value  
Manufacturing). In terms of the EIT financial sustainability this implies that, in order to 
achieve the same climate, digitalisation, energy, heath etc. EIT objectives, lower amounts of 
the EIT -supported investment may be required in the medium -to long -run.260  
  
                                                           
260 Ceteris paribus and assuming that productivity gains from a public and private investment in the same EIT policy area would be equal.  
Year 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Code Scenario 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
BL Baseline 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00
S1A Scenario 1A 3.68 3.68 3.68 3.67 3.63 3.61 3.57 3.54 3.51 3.52 3.48 3.48 3.47 3.46 3.44
S1B Scenario 1B 3.66 3.66 3.66 3.61 3.59 3.55 3.55 3.56 3.51 3.48 3.38 3.27 3.08 3.02 2.92
S2A Scenario 2A 3.65 3.65 3.65 3.65 3.60 3.59 3.55 3.53 3.45 3.38 3.28 3.18 3.05 3.00 2.93
S2B Scenario 2B 3.65 3.65 3.65 3.58 3.54 3.47 3.45 3.40 3.39 3.35 3.34 3.29 3.24 3.20 3.18
 
174 The simulated private investment amounts that eventually would be attracted by the EIT -
supported investment for each of the four EIT policy scenarios are reported in Table 3.  
Table 3: Model -based simulation results: the private investment leverage in the Noord -
Brabant region, million EUR  
 
According to our simulation results, the EIT -supported investment in the Noord -Brabant 
(NL41) region would attract the highest amount of the private investment under scenario S2B 
in the short -run: around 271 milli on Euro in 2023 -2024 (see row S2B Table 3). In the 
medium - to long -run, however, the EIT -supported investment in Noord -Brabant would attract 
comparably high annual amounts of the private investment under three scenarios S1B, S2A 
and S2B, each of them lever aging 216 -221 million Euro in 2035, which suggests convergence 
in the leverage impact. These results are not surprising, as funding levels are similar and also 
co-funding rates converge across these three scenarios in the medium - to long -run (see Table 
1 above). In contrast, scenario S1A performs considerably weaker in terms of leveraging an 
additional (private) investment (see row S1A Table 3). These simulation results are also 
consistent with the theoretical analysis presented in section 3.1, according to  which – 
everything else equal – Scenario S2  is more effective in terms of attracting the private 
investment than Scenario S1 . 
As regards cumulative leverage effects over the entire 2021 -2035 year period, scenarios S2A 
and S2B seem to be more effective in attractive an additional (private) investment. In terms of 
the EIT financial sustainability, these cumulative results suggest that the EIT policy scenarios 
S2A and S2B are considerably more financially sustainable than the EIT policy scenarios S1A 
and S1B when a time horizon of two entire programming periods is considered.  
Table 4 decomposes the simulation results reported in Table 3 into intensive and extensive 
margins of the private investment growth. More investors investing in the EIT KIC areas 
implies  that the variety of investment ideas/projects and capital input use will be larger. 
Variety gains in turn can be quantified as welfare gains, as consumers (both households and 
firms) generally value the variety choice.261 Hence, an increase in the number of  investors (as 
opposite to an increasing investment size of existing investors) can serve as an additional 
source of welfare gains triggered by the EIT investment support.  
Table 4: Model -based simulation results: the new investors share in the total privat e 
investment in the Noord -Brabant region, percent  
 
                                                           
261 Kancs D. and P. Persyn (2019) 'Welfare Gains from the Variety Growth', JRC Technical Report JRC114590, European Commission, D G 
Joint Research Centre.  
Year 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Code Scenario 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
BL Baseline 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
S1A Scenario 1A 174.62 176.17 178.80 179.20 180.79 182.38 183.17 183.96 184.76 186.43 191.37 198.78 206.98 213.54 216.83
S1B Scenario 1B 194.04 195.59 198.21 198.61 200.20 201.79 202.58 203.38 204.17 212.54 230.87 258.35 286.64 309.94 321.59
S2A Scenario 2A 202.61 207.97 211.55 213.54 221.49 229.44 233.41 237.38 241.36 243.03 254.33 271.27 292.19 308.30 316.36
S2B Scenario 2B 254.91 258.85 271.01 271.41 273.00 274.59 275.38 276.18 276.97 278.65 283.58 290.99 299.19 305.76 309.04
Year 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Code Scenario 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
BL Baseline 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
S1A Scenario 1A 56.06 56.17 56.33 56.36 56.48 56.61 56.65 56.69 56.73 56.86 57.11 57.43 57.68 57.83 57.90
S1B Scenario 1B 56.96 57.07 57.22 57.26 57.38 57.51 57.55 57.14 55.85 52.81 48.29 42.54 36.33 32.04 29.87
S2A Scenario 2A 56.71 55.92 55.60 54.84 52.91 50.76 49.08 47.84 46.61 45.18 42.97 40.30 36.82 34.30 32.92
S2B Scenario 2B 43.50 42.76 41.70 40.62 39.64 39.76 39.80 39.84 39.88 40.01 40.26 40.59 40.84 40.99 41.05
 
175 According to the model -based simulation results reported in Table 4, the new investors' share 
in the private investment is the highest under the EIT policy scenario S1A, it increases 
slightly from around 56% in the short -run to almost 58% in the medium - to long -run. Hence, 
the EIT policy scenario S1A turns out to be the most attractive for new investors, because of 
less strict co -funding rules and because of the reduced risk premium.  However, as noted 
above, the total private investment would be attracted considerably less under this EIT policy 
scenario (see Table 3). The new investors share in the private investment in the Noord -
Brabant region is considerably lower under EIT policy scenarios S1B, S2A and S2B as, under 
these scenarios, incumbent firms have to invest more in KIC -supported project/sectors to 
become eligible to benefit from the EIT investment support, which is due to stricter private 
investment co -funding requirements. In other words, higher c o-funding rate implies higher 
investment leverage per investor though also fewer investors.  
In absolute terms (measured in million Euro), however, Table 4 does not imply that the new 
investors' investment under EIT policy scenarios S1B, S2A and S2B is lower than under the 
EIT policy scenario S1A. Note also that, according to the model -based simulations, in all four 
EIT-policy scenarios the new investors share in the private investment is larger than zero. 
This result is driven by both incumbent as well as new investor increase in investments due to 
the reduced risk premium (lower user cost of capital). Depending on the scenario -specific co -
funding rate, existing investors adjust their investments to a larger or smaller extent, which 
provides one mechanis ms affecting the new investors share in the private investment.  
It has to be noted that these results are sensitive with respect to the EIT investment support 
implementation details. If, in contrast, the investment additionality condition will be imposed 
equally to all new and incumbent investors and only for an additional investment, then this 
will primarily benefit incumbent investors. In contrast, if the investment additionality 
condition will be imposed equally to all – new and incumbent investors – only for 
new/additional private investment, then this will benefit primarily incumbent investors.262 To 
better understand the mechanics behind these channels of the private investment adjustment, 
the next section offers a model -based analysis.  
Finally, when con tinuing simulations for the very long -run post -EIT-investment period until 
2050 (not reported), we can observe that the reduction in the risk premium leads to higher 
investment, as the regional economy adjusts to higher aggregate capital intensity. Once th e 
adjustment to higher capital intensity in the simulated Noord -Brabant region is completed, 
investment falls back to the previous level. Thus, a reduction in the risk premium only has a 
short - to medium -term effect on the private investment (after the EIT  investment support has 
been phased out) with the adjustment period depending on adjustment rigidities. Nevertheless, 
the policy -induced structural effects, e.g. an increased productivity, human capital, energy 
efficiency, lower CO2 emissions, etc., remain  in the Noord -Brabant region also in the long -
run. 
The second simulation example illustrates how EIT investments may affect the economy of 
the Helsinki -Uusimaa (FI1B1) NUTS2 region in Finland. In 2016, the EIT -supported 
investments in the Helsinki -Uusimaa region amounted to 0.40 percent of the total regional 
                                                           
262 Brandsma A., P.  Ciaian and D. Kancs, 2013. "The Role of Additionality in the EU Cohesion Policies," JRC Working Papers JRC81893, 
Joint Research Centre.  
 
176 gross expenditure on R&D (GERD), which was 2897.70 million Euro in FI1B1.263  As for the 
above analysed Noord -Brabant (NL41) in the Netherlands, the share of the EIT -supported 
investment was considerably higher, when considering the largest beneficiary sectors of the 
EIT-support. In 2016, the two most intensively KIC -supported policy areas in the Helsinki -
Uusimaa region were Digital and Raw Materials.  
In order to undertake a model -based scenario analysis, we follow the steps outlined above for 
the Noord -Brabant region in the Netherlands. First, regional accounts data from the Eurostat 
(Regional economic accounts - ESA 2010 (reg_eco10)) are used to solve the model for the 
base year (2016). By correctly calib rating the model, we are able to exactly reproduce the 
base year economy as observed in the Eurostat data. At this step, no policy scenarios are 
implemented in the model yet.  
In a second step, the model is used to construct and simulate the baseline scenar io until the 
year 2035. Simulating the baseline scenario is needed, as the baseline development of 
economy without the policy support cannot be observed. The key baseline scenario 
assumptions are summarised in Tables 5 and 6 (row Baseline BL ). There is no EIT supported 
investment implemented in the baseline scenario; baseline indicators, such as the private 
investment, will be used as benchmark against which to compare policy scenario outcomes.  
Table 5: Scenario differences in Helsinki -Uusimaa: EIT-supported investment and the 
private investment co -funding rate, percent  
 
In a third step, impacts of the four alternative EIT policy scenarios are encoded in form of 
model scenarios. The private investment co -funding rates under each policy scenario are 
derived directly from the four alternative EIT funding scenarios and are summarised in Table 
5. For the sake of comparability and to facilitate the link between the theoretical and empirical 
analysis, we denote the analysed scenario in the same way in both theoretical and simulation 
sub-sections: Scenario S1 and Scenario S2.264 As Table 5 suggests, there are both import 
differences in co -funding rates between the four EIT policy scenarios as well as in the co -
funding rate development over time (2021 -2035) . On average, the highest co -funding rate is 
in the EIT policy scenario S2B; the lowest in scenario S1A. The size of reduction in the risk 
premium that would come with EIT -supported investments is more difficult to pinpoint, as 
there are many con -funding f actors and econometric estimates are not available for EIT 
investments yet. Using EIB -supported investments and their impact on the risk premium as an 
example,265 together with base year EIT investment data for the Noord -Brabant region and the 
proposed EIT b udget distribution under the four policy scenarios, we estimate that EIT -
supported investments would imply a reduction in the risk premium of 10.63 – 25.17% (i.e. 
                                                           
263 Eurostat: Intramural R&D expenditure (GERD) by sectors of performance and NUTS 2 regions [rd_e_gerdreg]. 
http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=rd_e_gerdreg   
264 Scenario S1 encompasses two EIT policy sub -scenarios (S1A and S1B); Scenario S2 encompasses two EIT policy sub -scenarios (S2A 
and S2B).  
265 Di Comite, F., D. Kancs and P. Lecca (2016) 'Regional Macroeconomic Impacts of EIB Investments in the EU', JRC Technical Repo rt, 
European Commission, DG Joint Research Centre.  
Year 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Code Scenario 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
BL Baseline 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
S1A Scenario 1A 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
S1B Scenario 1B 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 20.00 40.00 60.00 80.00 90.00
S2A Scenario 2A 0.00 0.00 0.00 0.00 20.00 20.00 20.00 30.00 30.00 30.00 30.00 50.00 60.00 70.00 80.00
S2B Scenario 2B 0.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00
 
177 the real interest rate would drop by 0.50 – 1.07 percentage points) for EIT -supported 
investm ent projects in the Helsinki -Uusimaa region in Finland.266 The likely development of 
the risk premium in KIC -supported projects/sectors under the four EIT policy scenarios are 
summarised in Table 6. Among others, differences in the risk premium reduction acr oss 
scenarios as reported in Table 6 are due to differences in the EIT investment support 
implementation. The other two types of the required information for the scenario construction 
– the percentage increase in the capital stock induced by reduction in t he risk premium and 
the capital -output ratio – are computed within the model, based on Regional economic 
accounts data. In a fourth step, we use the calibrated model and encoded policy scenarios to 
undertake a model -based scenario analysis to assess how di fferent EIT funding models (the 
key differences being stipulated in the four alternative policy scenarios) might affect the 
behaviour of private investors. We model an exogenous but highly persistent temporary 
reduction in the risk premium. To examine the model dynamics when the economy is affected 
by a reduction in the risk premium, EIT -supported investments enter the model through 
lowering the user cost of capital. The obtained simulation results for Helsinki -Uusimaa are 
reported in Tables 7 and 8.  
Table 6: Scenario differences in Helsinki -Uusimaa: EIT -supported investment and the 
risk premium of KIC -supported projects/sectors, percentage points  
 
The simulation results reported in Table 7 suggest that in the short -run, scenario S2B would 
leverage the high est amounts of an additional private investment in EIT -supported 
projects/sectors in the Helsinki -Uusimaa region in Finland: around 78 Million Euro in 2021, 
79 Million Euro in 2022 and 82 Million Euro in 2023. In the medium - to long -run, however, 
the EIT -supported investment in Helsinki -Uusimaa would attract comparably high annual 
amounts of the private investment under three scenarios S1B, S2A and S2B, each of them 
leveraging 93 -96 million Euro in 2035, which suggests convergence in the leverage impact. 
These results are not surprising, as funding levels are similar and also co -funding rates 
converge across these three scenarios in the medium - to long -run (see Table 5 above). In 
contrast, scenario S1A performs considerably weaker in terms of leveraging an a dditional 
(private) investment (see row S1A Table 7). These simulation results are also consistent with 
the theoretical analysis presented in section 3.1, according to which – everything else equal – 
Scenario S2  is more effective in terms of attracting the  private investment than Scenario S1 .  
As regards cumulative leverage effects over the entire 2021 -2035 year period, scenarios S2A 
and S2B seem to be more effective in attractive an additional (private) investment. In terms of 
the EIT financial sustainability, these cumulative results suggest that the EIT policy scenarios 
S2A and S2B are considerably more financially sustainable than the EIT policy scenarios S1A 
S1B when the horizon of two entire programming periods is considered. Finally, these 
financial sustainability results comparing the four analysed scenarios are consistent with those 
presented above for the Noord -Brabant region.  
                                                           
266 Given the uncertainty associated with the reduction  in the risk premium that would come with the EIT investment support, we undertake 
extensive sensitivity analysis with up to 10% lower and 10% higher reductions in the risk premium.  
Year 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Code Scenario 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
BL Baseline 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00
S1A Scenario 1A 4.90 4.90 4.90 4.86 4.83 4.80 4.76 4.73 4.69 4.66 4.61 4.58 4.54 4.52 4.50
S1B Scenario 1B 4.91 4.91 4.91 4.88 4.85 4.83 4.80 4.77 4.71 4.62 4.49 4.33 4.14 4.04 3.93
S2A Scenario 2A 4.90 4.90 4.90 4.86 4.81 4.75 4.69 4.63 4.58 4.49 4.40 4.28 4.14 4.06 3.99
S2B Scenario 2B 4.86 4.86 4.86 4.80 4.75 4.70 4.65 4.60 4.55 4.50 4.45 4.40 4.35 4.33 4.30
 
178 Table 7: Model -based simulation results: the private investment leverage in the 
Helsinki -Uusimaa region, million EUR  
 
Although, qualitatively these results for the Helsinki -Uusimaa region are comparable to those 
for the Noord -Brabant region presented above, the order of magnitude is considerably lower 
though, which can be seen by comparing Tables 3 and 7. The lower impact on the private 
investment in the Helsinki -Uusimaa region as compared to the Noord -Brabant region is 
mainly due to considerably lower EIT -supported investments. These simulation results are 
also consistent with the theoretical analysis presented in s ection 3.1, according to which – 
everything else equal – Scenario S2  is more effective in terms of attracting the private 
investment than Scenario S1 . 
Table 8 decomposes the simulation results reported in Table 7 into intensive and extensive 
margins of the  private investment growth. The simulation results reported in Table 8 are 
comparable to those reported for the Noord -Brabant region in the Netherlands both in terms 
of the rank order and in terms of magnitude.  
Table 8: Model -based simulation results: the new investors share in the total private 
investment in the Helsinki -Uusimaa region, percent  
 
Again, it has to be noted that these results are sensitive with respect to the EIT investment 
support implementation details. If incumbent investors will first be  required to increase their 
co-funding of already existing EIT support before they can benefit from a further EIT 
investment support, then this will primarily benefit and hence attract new (risk averse) 
investors. If, in contrast, the investment additional ity condition will be imposed equally to all 
new and incumbent investors and only for an additional investment, then this will primarily 
benefit incumbent investors. To better understand the mechanics behind these channels of the 
private investment adjustm ent, the next section offers a model -based analysis.  
 
  
Year 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Code Scenario 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
BL Baseline 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
S1A Scenario 1A 53.08 53.70 54.75 54.91 55.54 56.18 56.50 56.82 57.13 57.78 59.70 62.59 65.79 68.35 69.64
S1B Scenario 1B 60.55 61.17 62.22 62.38 63.01 63.65 63.97 64.28 64.60 66.53 71.03 77.78 84.85 90.63 93.53
S2A Scenario 2A 64.27 65.65 66.89 67.37 69.28 71.19 72.14 73.09 74.05 74.69 77.89 82.68 88.43 92.90 95.13
S2B Scenario 2B 78.04 79.13 82.09 82.25 82.89 83.52 83.84 84.16 84.48 85.12 87.04 89.93 93.13 95.70 96.98
Year 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Code Scenario 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
BL Baseline 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
S1A Scenario 1A 56.07 56.19 56.34 56.38 56.51 56.64 56.68 56.72 56.76 56.89 57.15 57.48 57.73 57.88 57.94
S1B Scenario 1B 57.00 57.11 57.27 57.30 57.43 57.56 57.61 57.20 55.91 52.85 48.30 42.52 36.31 32.02 29.85
S2A Scenario 2A 56.76 55.96 55.64 54.88 52.93 50.76 49.08 47.85 46.61 45.19 42.99 40.34 36.86 34.35 32.98
S2B Scenario 2B 43.52 42.78 41.72 40.64 39.66 39.79 39.83 39.87 39.91 40.04 40.30 40.63 40.88 41.03 41.09
 
179 4 Sensitivity analysis  
In the simulation analysis that we have presented in section 3.2 above, we have assumed a 
continuation of the current distribution of budget between KIC activities, the EIT -driven 
activities and the EIT administrative budget, i.e. 97% of the budget would be allocated as 
grants to KICs and the rest divided between the EIT -driven activities and its administrative 
budget. Further, we did not assume that any changes would be made to the EIT staff 
provisions and duration of staff contracts. With respect to the three EIT policy options 
discussed in the EIT Impact Assessment, these EIT budget distribution assumptions roughly 
correspond to the EIT Option 1.  
In order to explore how sensiti ve the simulated EIT leverage effects might be with respect to 
alternative EIT budget distributions, in this section we undertake an extensive sensitivity 
analysis, selected results of which are presented below. In the presented sensitivity analysis, 
we in vestigate the impact of the share of the total funding (3 billion over 2021 -2027) that is 
allocated via KICs as an investment support versus directly via the EIT for improving the 
business and investment environment in regions. In particular, we reduce the  KIC budget 
share (and increase the EIT budget share accordingly) by 15% in two steps. These two 
resulting sensitivity analysis scenarios are labelled as SA1 and SA2 (see Table 9), EIT budget 
distribution assumptions sensitivity analysis scenarios SA1 and SA2 roughly correspond to 
the EIT Option 2 and 3.  
Table 9: The distribution of the EIT budget between KIC activities, EIT own activities 
and the EIT administrative budget, percent  
 
The sensitivity analysis results are presented in Figures 3 and 4. The two  Figures plot 
sensitivity analysis results for the Noord -Brabant (NL41) NUTS2 region in the Netherlands 
and Helsinki -Uusimaa (FI1B1) NUTS2 region in Finland, respectively. The y axis measures 
Million Euros, whereas EIT investment costs (bars) and the addit ional private investment 
leverage (shaded area) are directly comparable. For convenience, they are plotted in the same 
units on the y axis.  
The sensitivity analysis results for the Noord -Brabant region suggest that the main 
simulations results presented in  Section 3 are still valid also under different EIT budget 
distributions. First, from these results we can learn that the larger is the EIT budget share 
allocated via KICs as an investment support of companies, the larger tend to be short - and 
KICs budget share in percent (100 = 3 bilion 2021-2027)
Year 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Code Option 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
BLBaseline 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
SA0 KIC±013.37 12.93 14.13 14.23 14.13 14.50 14.37 14.37 14.37 14.37 14.37 14.37 14.37 14.37 14.37
SA1 KIC-15 11.40 11.17 12.23 12.33 12.20 12.47 12.00 12.00 12.00 12.00 12.00 12.00 12.00 12.00 12.00
SA2 KIC-30 9.67 9.37 10.23 10.27 10.23 10.37 9.93 9.93 9.93 9.93 9.93 9.93 9.93 9.93 9.93
Administrative budget share in percent (100 = 3 bilion 2021-2027)
Year 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Code Option 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
BLBaseline 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
SA0 AB±0 0.20 0.23 0.23 0.23 0.23 0.23 0.23 0.23 0.23 0.23 0.23 0.23 0.23 0.23 0.23
SA1 AB±0 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33
SA2 AB±0 0.27 0.40 0.40 0.43 0.47 0.50 0.53 0.53 0.53 0.53 0.53 0.53 0.53 0.53 0.53
E IT activities share in percent (100 = 3 bilion 2021-2027)
Year 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Code Option 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
BLBaseline 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
SA0 EIT±0 0.07 0.07 0.10 0.10 0.13 0.13 0.13 0.13 0.13 0.13 0.13 0.13 0.13 0.13 0.13
SA1 EIT+15 0.63 1.20 1.87 2.20 2.63 2.53 2.83 2.83 2.83 2.83 2.83 2.83 2.83 2.83 2.83
SA2 EIT+30 1.23 2.53 3.70 4.30 4.63 5.27 5.33 5.33 5.33 5.33 5.33 5.33 5.33 5.33 5.33
 
180 medium -term leverage effects compared to long -term effects. In contrast, the larger is the EIT 
budget share allocated via the EIT for improving the business and investment environment in 
regions, the larger tend to be medium - and long -term leverage effects compared to  short -term 
effects.  
Second, the sensitivity analysis results presented in Figure 3 suggest that there are differences 
in the magnitude of the private investment leverage effect, when the EIT budget allocation is 
changed from KICs as an investment support versus directly in favour of the EIT for 
improving the business and investment environment in regions, and these differences are 
different across the four analysed EIT policy scenarios (S1A, S1B, S2A and S2B). 
Importantly, the main message for policy remai ns the same also under based on sensitivity 
analysis results: S2A and S2B are considerably more financially sustainable than the EIT 
policy scenarios S1A and S1B, particularly in the long -run, which is well visible in the upper 
bounds of shaded areas in Fi gure 3.  
Figure 3. Sensitivity analysis results for the Noord -Brabant region in Million Euro [y 
axis]: EIT investment costs (bars) and an additional private investment leverage (shaded 
area)  
 
The sensitivity analysis results for the Helsinki -Uusimaa (FI1B1) NUTS2 region in Finland 
are reported in Figure 4. Again, we can clearly see that the main simulations results presented 
in Section 3 are still valid also under different EIT budget distributions. for the Noord -Brabant 
region, t he main message for policy remains the same also under based on sensitivity analysis 
results: S2A and S2B are considerably more financially sustainable than the EIT policy 
scenarios S1A and S1B, particularly in the long -run, which is well visible in the up per bounds 
of shaded areas in Figure 4.  
0100200300400500
2020 2025 2030 2035
Lower/upper bounds Central value
EIT investment costsScenario S1A-NL41
0100200300400500
2020 2025 2030 2035
Lower/upper bounds Central value
EIT investment costsScenario S1B-NL410100200300400500
2020 2025 2030 2035
Lower/upper bounds Central value
EIT investment costsScenario S2A-NL41
0100200300400500
2020 2025 2030 2035
Lower/upper bounds Central value
EIT investment costsScenario S2B-NL41
 
181 Generally, results from the sensitivity analysis suggest that our simulation results presented in 
Section 3 are robust and stable with respect to the share of the total funding (3 billion over 
2021 -2027) that is allo cated via KICs as an investment support versus directly via the EIT for 
improving the business and investment environment in regions. As expected, there are 
differences in the magnitude of the private investment leverage effect. Qualitatively, however, 
the above presented simulation results for the four analysed EIT policy scenarios do not 
change significantly under different EIT budget distributions.  
Figure 4. Sensitivity analysis results for the Helsinki -Uusimaa region in Million Euro [y 
axis]: EIT investment costs (bars) and an additional private investment leverage (shaded 
area)  
 
 
5 Conclusions  
In this Annex, we investigate the impact of EIT investment -support measures on private 
investments. We develop and apply a stylised inve stment model to undertake a conceptual 
and simulation analysis by looking at the impact of the co -funding rate and policy -induced 
changes in the risk premium component of the cost of capital. Both in the theoretical model 
and simulation analysis we analyse  two scenarios with two sub -scenarios: with and without 
the enforcement of the private co -funding of the investment support and with and without 
reduction in the risk premium component of the cost of capital. They help us to identify and 
understand potenti al implications between alternative EIT funding scenarios.  
The results from the theoretical analysis suggest that both the co -funding rate and the risk 
premium component of the cost of capital  matter importantly for the EIT-support on 
0306090120150
2020 2025 2030 2035
Lower/upper bounds Central value
EIT investment costsScenario S1A-FI1B1
0306090120150
2020 2025 2030 2035
Lower/upper bounds Central value
EIT investment costsScenario S1B-FI1B10306090120150
2020 2025 2030 2035
Lower/upper bounds Central value
EIT investment costsScenario S2A-FI1B1
0306090120150
2020 2025 2030 2035
Lower/upper bounds Central value
EIT investment costsScenario S2B-FI1B1
 
182 leveraging an additio nal investment. The higher is the policy ability to reduce financial, 
technology or market uptake risks, the larger is the potential of the EIT investment support to 
leverage an additional investment in KIC -supported projects/sectors. Results for the co-
funding rate are more nuanced, as higher co -funding rate per se implies higher investment 
leverage per investor but also fewer investors. A second important result is that the two policy 
intervention channels – the co -funding rate and the risk premium component of the cost of 
capital – interact mutually . This implies that, for example, a decrease in the number of 
investors due to higher co-funding rate could be offset by lowering the risk premium 
component of the cost of capital.  
The results from the em pirical simulation analysis confirm that those EIT policy options with 
the highest capacity to reduce the risk premium component of the cost of capital and impose 
the highest private investment co-funding rate are leveraging the highest amounts of an 
addit ional investment in KIC -supported projects/sectors. Among the four analysed scenarios, 
these are scenarios S2A and S2B with the highest cumulative leverage effects over the entire 
2021 -2035 year period. In contrast, scenario S1A performs considerably weake r in terms of 
leveraging an additional (private) investment. In terms of the EIT financial sustainability, 
these simulation results suggest that the EIT policy scenarios S2A and S2B are considerably 
more financially sustainable than the EIT policy scenario s S1A and S1B when a time horizon 
of two entire programming periods is considered.  
Turning to limitations and caveats of our analysis, first, it has to be noted that whereas 
scenario S1A can clearly be considered the least effective both according to both the 
theoretical and empirical analysis (because a private investment cofounding is not enforced), 
based on our stylised investment model, it is not straightforward to distinguish between 
scenarios S2A and S2B, as long -run results for these two policy scena rios are fairly similar. 
Under different sets of assumptions related to the estimated reductions in the risk premium 
component of the cost of capital or in another EU region with a different structure of the 
regional economy, the results may be different, favouring scenario S2A in one case whereas 
S2B in another.  
Second, it has to be recognised that the theoretical model developed and the simulation 
analysis undertaken are highly stylised, allowing to identify and decompose only key channels 
of the private investment adjustment. There are, however, many more economic, societal and 
environmental effects, which are not considered in the present analysis. Similarly, it has to be 
reminded that these two regions have served solely as examples to illustrate how EI T 
investments could affect the EU economy. In order to establish the full impact of EIT 
investments, a simulation analysis of the entire EU economy should be undertaken.  
Further, our results hint at possible challenges in the EIT policy implementation and  
monitoring stage, particularly regarding the enforcement of the investment co -funding. The 
reason is that in most cases there are no counterfactual data available to policy makers to 
check the firm investment level with and without the investment support.  Policy makers can 
only observe the capital use with the investment support. Firms, in contrast, do not have 
incentives to reveal their true counterfactual investment intentions. This may make the 
monitoring of the investment additionality costly and hard to realise in praxis.  
 
 
183 Figure 5. EIT investment support and additionality with a policy -induced reduction in 
the risk premium component of the cost of capital   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
F 
K 
k 
Kic* 
Dic 
S 
A 
E 
αiR* 
Dpc 
Kpc* 
k* 
Kics* 
Kmax 
C 
H 
Kmax  
 
Kmax 
H 
G 
Kpcs* 
B 
Kpc1 
 
184 Figure 6. EIT investment support and additionality  without a policy -induced reduction 
in the risk premium component of the cost of capital  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
K 
k 
S 
αiR* 
Dpc 
Kpc* 
k* 
Kmax  
Kmax 
Kpcs* 
 Kpc1 
Dpcs 
Dpc 
αiR* 
Dpcs1 
αiR* 
 
185 10.13.  Annex 11:  Overview of KIC co -funding rates in 2014 -2017  
In line with EIT’s objective of producing long lasting impact, the KICs are expected to 
gradually become financially sustainable in the long -term as stipulated in Art. 6 of the EIT 
Regulation.  
 
According to the EIT Strategic Innovation Agenda 2014 -2020, w hile KICs are not expected to 
become financially independent from the EIT during its first years of operation, they should 
gradually reduce its dependency from EIT funding and mobilise other resources, e.g. revenues 
from activities, IP rights, return on in vestments or venture capital.  
 
The financial sustainability principle forms an integral part of the KIC’s business model. The 
EIT has developed the principles of financial sustainability that provide the framework for the 
KICs to achieve the goal and that  contain definitions related to financial sustainability, 
guidance for development of financial sustainability strategies and principles and measures to 
incentivise KICs sustainability (e.g. (max. EIT contribution over years).  
 
The average KICs own contri bution has increased from 9% to 19% of their overall annual 
budget between 2014 and 2017. Figure 1 provides the development of the KICs own co -
funding rates broken down per individual KICs. Similarly Figure 2 provides the changes in 
EIT contribution to the  KICs overall budget over 2014 -2017. Figure 7 provides for 
comparison of co -funding rates over 2014 -2017 (% of EIT vs. KICs contribution).  
 
Figure 3 and Figure 4 provides the EIT contribution rates for individual KICs in 2014 and 
2017 respectively.  
 
Figur e 5 and Figure 6 provides the KIC own contribution rates for individual KICs in 2014 
and 2017 respectively.  
Figure 1: Development of co -funding rate (% of KICs contribution) in different KICs over 
2014 -2017; EIT data  
 
Figure 2: Development of co -funding  rate (% of EIT contribution)    in different KICs over 
2014 -2017; EIT data  0,05,010,015,020,025,030,035,040,0
2014 2015 2016 2017Development of co -funding rate   
(% of KICs contribution)  
Climate KIC Innoenergy Digital Health
Raw Materials Food AVERAGE
 
186  
 
 
Figure 3: Co -funding rate (% of EIT contribution) in different KICs in 2014; EIT data  
 
 50,055,060,065,070,075,080,085,090,095,0100,0
2014 2015 2016 2017Development of co -funding rate  
(% of EIT contribution)  
Climate KIC Innoenergy Digital Health
Raw Materials Food AVERAGE
87,588,088,589,089,590,090,591,091,592,092,5
Climate KIC Innoenergy Digital AVERAGECo-funding rate, 2014  
(% of EIT contribution)  
 
187 Figure 4: Co -funding rate (% of EIT contribution) in different KICs in 2017; EIT data  
 
 
Figure 5: Co -funding rate (% of KICs contribution) in different KICs in 2014; EIT data  
 
  0,010,020,030,040,050,060,070,080,090,0100,0
Climate KIC Innoenergy Digital Health Raw Materials Food AVERAGECo-funding rate, 2017  
(% of EIT contribution)  
0,02,04,06,08,010,012,0
Climate KIC Innoenergy Digital AVERAGECo-funding rate, 2014  
(% of KICs contribution)  
 
188 Figure 6: Co -funding rate (% of KICs contribution) in different KICs in 2017; EIT data  
 
  0,05,010,015,020,025,030,0
Climate KIC Innoenergy Digital Health Raw
MaterialsFood AVERAGECo-funding rate, 2017  
(% of KICs contribution)  
 
189 Figure 7: Comparison of co -funding rates over 2014 -2017 (% of EIT vs. KICs contribution) ; 
EIT data  
      
 
 
 
 
 
 
 
 
 
 
 
 
  90,7  9,3 Co-funding rate in 2014 (%)  
EIT contribution KICs own contribution
90,4  9,6 Co-funding rate in 2015 (%)  
EIT contribution KICs own contribution
 
190  
 
     
 
 
 
 
 
 
 80,6  19,4  Co-funding rate in 2016 (%)  
EIT contribution KICs own contribution
81,5  18,5  Co-funding rate in 2017 (%)  
EIT contribution KICs own contribution