Opinion of the Committee of the Regions on the 'First Action Plan for Innovation in Europe` (97/C 244/02)

THE COMMITTEE OF THE REGIONS,

having regard to the First Action Plan for Innovation in Europe (COM(96) 589 final);

having regard to its decision of 8 March 1996, under the fourth paragraph of Article 198c of the Treaty establishing the European Community, to draw up an opinion on the subject and to instruct Commission 7 for Citizens' Europe, Research, Culture, Youth and Consumers to draw up the opinion;

having regard to the draft opinion (CdR 68/97 rev.) adopted by Commission 7 on 11 April 1997 (rapporteur: Mrs du Granrut);

whereas the White Paper on Growth, Competitiveness, Employment emphasizes the importance of intangible capital (education, qualifications, ability to innovate, industrial traditions) for Europe's economic and social prosperity;

whereas the European Council, meeting in Florence, clearly stated that 'the fight for employment must remain the top priority for the Union and its Member States`, and, within the framework of a strategy to achieve that objective, called on the Commission 'to draw up an action plan concerning the measures to be taken with regard to innovation`;

whereas the Committee of the Regions has already dealt with innovation issues in the following opinions:

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

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

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

- COR Opinion on encouraging utilisation of multimedia content - INFO 2000 ();

- COR Opinion on the Green Paper on Innovation ();

- COR Opinion on a third multiannual programme for small and medium-sized enterprises (SMEs) in the European Union (1997-2000) - maximizing European SMEs' full potential for employment, growth and competitiveness (),

adopted the following opinion at its 18th plenary session on 11 and 12 June 1997 (meeting of 12 June).

1. Introduction

1.1. Article 130 of the Treaty on European Union provides that the Community and the Member States shall ensure that the conditions necessary for the competitiveness of the Community's industry exist, and refers particularly to fostering better exploitation of the industrial potential of policies of innovation, research and technological development, and encouraging an environment favourable to initiative and to the development of undertakings throughout the Community, particularly small and medium-sized undertakings.

1.2. The Commission presented its Green Paper on Innovation at the Madrid European Council of 20 December 1995. The document set out a European strategy for the promotion of innovation, and aimed not just to boost activity and create jobs in the sector, but also to harness innovation to provide economic and socio-cultural progress for European citizens.

1.3. The green paper provided food for thought for all those involved in the development and dissemination of innovation - not least regional and local authorities. It provoked a considerable amount of reaction from the general public, government and Community institutions, and was the subject of several conferences held not just by the Member States, but also in neighbouring countries such as Hungary and Iceland.

1.4. The Commission presented the early findings of this consultation at a briefing in Rome on 29 May 1996, when the Committee of the Regions was invited to present its opinion on the green paper. The Commission emphasized the role of regional and local innovation systems, which are underpinned by networks involving the various innovation players, research centres, laboratories, universities, businesses, regional and local authorities, continuing vocational training and apprenticeship centres; by the complementarity of funds available at local level; and by the exploitation of the specific innovation potential of each local area.

2. General comments

2.1. The Commission's First Action Plan identifies three areas for action; for each area, specific action is suggested, primarily to the Community authorities and the Member States:

1) fostering a genuine innovation culture in the economy and society,

2) establishing a favourable legal, regulatory and financial framework,

3) gearing research more clearly to innovation at both national and Community level.

2.2. The Commission initiative

2.2.1. The Committee of the Regions welcomes the success of the Commission initiative in organizing, with the publication of its green paper, a wide consultation involving the authorities and economic and social interest groups in the innovation debate. The high level of participation is due both to the importance of the topic itself and to the overall way the Commission presented it.

2.2.2. Whilst research strives to uncover new techniques, it is innovation which paves the way for transforming and exploiting scientific potential. A company's capacity for innovation depends on its ability to harness new technologies in order to make new products, make better use of existing products or market them better, improve the skills of its employees, create jobs and make a positive contribution to the development of the European economy. Priority should be given then, to encouraging corporate activity throughout the various stages of the innovation process.

2.3. Implementation of the subsidiarity principle

2.3.1. The Committee of the Regions regrets that the proposals for action contained in the Commission action plan are mainly addressed to the Commission and the Member States. However, some of the proposed measures directly concern regional and local authorities, since they affect their budget and partly overlap with their area of competence.

2.3.2. The Committee of the Regions would point out that, at the Rome Conference, the Commission recognized the role of regional and local authorities in mobilizing the players involved in innovation; the importance of regional and local partnerships in promoting innovation and creating jobs; and the view that 'strict application of the subsidiarity principle is necessary` not just for the benefit of citizens, businesses and their representatives, but particularly for the benefit of regional and local authorities.

2.4. The link between innovation and job creation

2.4.1. The Committee of the Regions welcomes the fact that the Action Plan for Innovation in Europe follows the priorities set by the Commission President in the Confidence Pact for Employment, presented at the Florence Summit in June 1996. The document states that 'innovation is vital, both for countries and for companies. To preserve growth, competitiveness and jobs, new ideas must be turned quickly into technical and commercial successes`.

2.5. The green paper's emphasis on the increasing importance of SMEs and the regional and local level

2.5.1. The Committee of the Regions regrets that the Action Plan does not take on board the green paper's decentralized approach to the innovation process.

2.5.2. EU-backed innovation boosts local and regional development, whether it be through Structural Fund programmes, the creation of Technological Development Relay Centres (Aire) under the Innovation programme, or the implementation of the Fourth RTD Framework Programme.

2.5.3. The Committee of the Regions would stress the importance of SMEs for economic and social development and spatial planning and the role of the regions in providing technological back-up and funding. As part of their mission to provide firms with aid and back-up, the regional and local authorities offer local funding, advice services, and facilities for staff training and executive recruitment.

2.6. The three action areas

2.6.1. The Committee of the Regions welcomes the Commission's choice. The three action areas proposed are complementary and cover all aspects of innovation promotion. The Committee feels that the broad scope of the measures reflects the complex nature of the innovation process.

2.6.2. The Committee of the Regions would ask for priority to be given to streamlining Community and national innovation policies, i.e. by simplifying Community and national support measures and procedures for promoting innovation, rather than creating new ones. This would make the various actions more consistent, whilst, at the same time, making them easier to grasp for the players concerned.

2.6.3. The Committee of the Regions regrets that the action plan makes no provision for information on the various types of aid available for innovation at Community and national level, and calls for readily accessible information to be provided for project managers in every region or local area. Regional and local authorities can help to disseminate this information, using the policies they implement in their own areas.

2.6.4. The Committee of the Regions calls for proposals on inter-disciplinary activities. These are necessary in order to meet the demands for new know-how both in business and public administration. Proposals for such initiatives are to be found in the Commission Working Paper () on a 5th Framework Programme for Research and Technological Development.

3. Specific comments

3.1. Action area 1: Fostering an innovation culture

3.1.1. Innovation is a new concept in the way our society works and thinks; it is underpinned both by products and manufacturing processes, and by the dynamism and creativity of the people involved in it. It would seem that it is the younger generations, those - in and out of work - who wish to have access to training, and people who have been alerted to the issues, who will be able to adapt to an innovation culture. This is why the Committee of the Regions endorses the Commission initiative to boost measures to promote education and training, by harnessing the Structural Funds and other programmes such as Leonardo and Socrates.

3.1.2. The Committee of the Regions believes that the Community Initiative Programmes Adapt and Emploi, and the Objectives 1, 2, 3, 4, 5b and 6 programmes should - given their considerable importance in terms of the ESF funding available for regional and local authorities - include all the subjects and educational back-up needed to propagate an innovation culture. Priority should be given to gaining a proper command of the new information and communication technologies.

3.1.3. The Committee of the Regions would also emphasize that regional and local authorities can exploit their education and training remit to promote a culture of innovation; this could include providing equipment for secondary schools and training centres, and designing training schemes.

3.1.4. The Committee of the Regions welcomes the fact that the Commission plans in 1997 to set up, a Forum on 'training and innovation` for the exchange of experience and the dissemination of best practices. The Forum must be open to regional and local experience, particularly as regards education, training and optimization of results. The Committee believes it is important to organize seminars, on-campus courses and meetings between European universities to discuss the subject of innovation.

3.1.5. The Committee of the Regions believes it is important that the Fifth RTD Framework Programme should include a measure to improve employee skills alongside other, more technical measures. Measures to promote researcher mobility, and transnational corporate secondments for young research workers and engineers are needed to accompany innovation and technology transfer projects. These could be encouraged via cooperation agreements between European regional and local partner authorities.

3.1.6. As regards the pilot project for the 'stimulation of transnational industrial PhDs`, which aims to provide secondments for research workers and engineers to businesses during 1997, the Committee of the Regions feels it is important to set up a centralized bulletin-board for industrial research secondments, as is the case for laboratory secondments (Marie Curie scholarship under the Fourth RTD Framework Programme).

3.1.7. The Committee of the Regions would insist on the need to provide innovation players with ready access to programmes and funding, and to improve information coordination. Information Technology and the Internet could be harnessed here. The Committee would point out the role of the regional and local authorities, who work in partnership with business, research centres and universities, in disseminating information and raising public awareness.

3.1.8. The Committee of the Regions endorses the Commission's wish to boost the system for collating and analysing information on research and innovation. The Committee calls for the information to be made available to regional and local bodies - they are responsible for disseminating and optimizing the results, particularly the Innovation Relay Centres (IRC) - to make it easier for them to carry out their monitoring duties and to identify technology opportunities and research breakthroughs which can be transferred to industry. These relay centres need to be more clearly identified.

3.2. Action area 2: establishing a favourable legal, regulatory and financial framework

3.2.1. The Committee of the Regions believes it necessary to develop one-stop shops for innovation back-up. Technology Dissemination Networks (TDN) must be developed and supported in order to obtain optimum territorial coverage, and to organize exchanges of information and experience by region or geographical area.

3.2.2. The Committee of the Regions calls on the Commission to clarify the Structural Funds' intervention rules on risk capital, so that European funding can top up the local funding already provided by regional and local authorities. The Committee would stress the urgency of this clarification, which should be used to pave the way for the implementation of the new Objective 2 programmes for 1997-1999.

3.2.3. The cost of developing and starting up innovatory projects is often beyond the resources of businesses, particularly SMEs. They must have access to 'patient capital`, pension funds or long-term savings, or to locally available capital. Interest rates and taxation on bank loans are too high for businesses and finance companies.

3.2.4. The establishment of local funding bodies with capital at their disposal - part of which could come from the Commission - could make it possible to create businesses from new technologies and to market technologically innovative products.

3.2.5. The Committee of the Regions would emphasize the importance of the regional dimension in funding innovation, particularly the role of the regional and local authorities who often stand surety for innovatory projects applying for funding to the private banking sector.

3.2.6. Regarding access to Community calls for tender, the Committee of the Regions feels it is important to simplify procedures, particularly as regards taking greater account of corporate performance and objectives, reducing the time needed to release Community funds, supporting corporate associative network initiatives and technology transfers from contractors to their suppliers and subcontractors.

3.2.7. The Committee of the Regions calls for the rapid determination of the legal status of the European patent and of the European public limited company, as their absence continues to be an obstacle to innovation.

3.3. Action area 3: Gearing research to innovation

3.3.1. The Committee of the Regions stresses existing partnerships between regional and local authorities, business and universities on regional and local development issues. Further to this, they could assume responsibility for framing innovation support strategies. The Committee of the Regions would point out the need for the decision makers in Structural Fund objective areas to work out innovation support strategies. This should take place in partnership with other regional and local Structural Fund players. This action could accompany the implementation of the Territorial Employment Pacts.

3.3.2. The Committee of the Regions suggests that the interface between research and innovation be enhanced via courses which allow a period of secondment to a high-tech company to be tacked on to the normal training period for researchers. The aim would be to give researchers an insight into the organization and technology requirements of the firm, and to encourage him/her to follow up the laboratory research programme with an innovation project.

3.3.3. The Committee of the Regions considers it necessary to develop specific assessment instruments within the research centres, so that research can take account of results optimization from the very outset. These instruments would make self-assessment possible, in order to determine which results should be disseminated. It is important that a legal and financial framework be provided to encourage research organization spin-off action, including start-ups.

3.3.4. Regarding the ambition to create closer links between research, universities and businesses, the Committee of the Regions broadly endorses the Commission Working Paper's proposals for a 5th Framework Programme ().

3.3.5. Regarding new actions, the Committee suggests that a network of European experts - along the lines of the Sprint programme - be set up to audit innovation actions. Appraisals could be made of particularly interesting regional or local projects set up by the universities or local authorities.

3.3.6. The Committee of the Regions believes it is important to identify key sectors and concentrations of expertise at regional and local level in order to assess strengths and weaknesses, and to have a reference laboratory capable of organizing technology and innovation transfers with other regional and local authorities.

4. Conclusions

4.1. Whilst the Committee of the Regions welcomes the Commission initiative on a specific action plan for innovation, it nevertheless regrets that, despite the conclusions of the Rome Conference, the action plan contains no measures of direct interest to the regional and local authorities, and that small and medium-sized enterprises are not better served by the proposed measures.

4.2. The Committee of the Regions believes that the three action areas proposed by the Commission cover all aspects of promoting innovation:

1) Fostering a genuine innovation culture in the economy and society.

2) Establishing a favourable legal, regulatory and financial framework.

3) Gearing research and development more closely to innovation at both national and Community level.

4.3. Regarding action area 1, the Committee endorses the Commission initiative to encourage action on education and training - the linchpin of an innovation culture - and to include in the various Commission-funded programmes all the educational back-up needed to disseminate such a culture. The Committee endorses all programmes for exchanges of experience and the dissemination of best practice.

4.4. The Committee of the Regions recognizes the merits of facilitating the mobility of research workers, and of employing researchers and engineers in companies.

4.5. The Committee of the Regions would point out the vital role of regional and local authorities in disseminating the fruits of innovation to businesses and existing bodies such as the Innovation Relay Centres (IRC) - still relatively low-profile - which provide small and medium-sized enterprises with an extremely useful technology monitoring service.

4.6. Regarding action area 2, and further to the creation of one-stop shops and technology dissemination networks, the Committee of the Regions would emphasize the need to find 'patient capital`, e.g. from pension funds or other sources, to fund innovation. The Committee would also point out the role of local funding bodies which provide effective funding and stand surety for the suitability of the projects.

4.7. Regarding action area 3, the Committee of the Regions would emphasize the need, on the one hand, to make research and the universities more alive to business requirements, and on the other, to determine priority areas.

4.8. Finally, the Committee of the Regions calls for a network of European experts to be set up to assess the regional and local impact of innovation programmes - particularly in terms of employment - and for the establishment of regional and local reference laboratories capable of organizing transfers of technology and know-how between the various regional and local authorities.

Brussels, 12 June 1997.

The Chairman of the Committee of the Regions

Pasqual MARAGALL i MIRA

() OJ C 210, 14. 8. 1995, p. 92.

() OJ C 210, 14. 8. 1995, p. 109.

() OJ C 100, 2. 4. 1996, p. 14.

() OJ C 129, 2. 5. 1995, p. 39.

() OJ C 182, 24. 6. 1996, p. 1.

() OJ C 34, 3. 2. 1997, p. 34.

() COM(97) 47 final.

() COM(97) 142 final.