Opinion of the Economic and Social Committee on:

- the 'Proposal for a European Parliament and Council Decision adapting for the second time Decision 1110/94/EC on the fourth framework programme of activities in the field of research, technological development and demonstration (1994-1998) (as adapted by Decision 616/96/EC)` and

- the 'Proposal for a Council Directive adapting for the second time Decision 94/268/Euratom concerning the framework programme of activities in the field of research and training for the European Atomic Energy Community (1994-1998) (as adapted by Decision 96/253/Euratom)`

(96/C 212/06)

On 8 March 1996, the Council decided to consult the Economic and Social Committee, under Article 130i (1) and (2) of the Treaty establishing the European Community and Article 170 of the Treaty establishing the European Atomic Energy Community, on the above-mentioned proposals.

The Section for Energy, Nuclear Questions and Research, which was responsible for the Committee's work on the subject, adopted its Opinion on 14 May 1996. The Rapporteur was Mr Malosse.

At its 336th Plenary Session on 29 and 30 May 1996 (meeting of 29 May), the Economic and Social Committee adopted the following Opinion by 102 votes with five abstentions.

1. Economic and Social Committee recommendations

The Committee

1.1. stresses that research, technological development and innovation are one of the most urgent areas for action to enhance the competitiveness of community industry and to make a positive impact on employment, against the backdrop of economic and social cohesion;

1.2. is concerned that, at a time when the level of technology in the EU is increasingly lagging that of its major competitors, there is a serious risk that the RTD financial commitments made under the fourth framework programme (1994-1998) will be called into question;

1.3. insists on the importance of immaterial investments, especially in the fields of education, training and research, as part of the strategy for revitalizing competitiveness and employment in the European Union;

1.4. broadly approves the Commission proposals;

1.5. backs increased focusing of resources and a coordination of effort on concerted priorities;

1.6. regrets that the Commission has not made use of the supplementary financial leeway offered by the initial adjustment of the fourth framework programme and calls on the budgetary authorities to give substance to the European Community's commitment to an emphasis on long- and medium-term employment-enhancing policies;

1.7. reiterates its concerns regarding the lack of transparency in the way in which the research-industry Task Forces were set up and in the choice of common-interest projects for which the Community is now proposing particular action, especially on the financial side;

1.8. is concerned about the long-term risks inherent in the European Union specializing in a limited number of industrial areas and the danger this poses for economic and social cohesion;

1.9. reiterates its backing for task forces where they are vehicles for coordinating research projects at every stage of their implementation with a view to enhancing their coherence;

1.10. urges that greater attention be given to the option of supplementary programmes or European Union participation in RTD programmes undertaken by a number of Member States (Articles 130k and 130l of the Treaty);

1.11. regrets that the proposals under review do not provide for any new measures to increase SME involvement, despite the fact that SMEs are a major source of job creation in Europe, and proposes the establishment of a horizontal SME Task Force;

1.12. asks that some of the proposed supplementary financing go towards activities designed to disseminate and utilize the results of research activities to promote the dynamism of the research-innovation-market process; and proposes the establishment of a Task Force on innovation;

1.13. also calls for a strengthening of the scientific and technical cooperation with the countries of central and eastern Europe and with the Mediterranean countries, for instance by allocating part of this additional annual funding for that purpose.

2. Introduction

2.1. The fourth framework programme was conclusively adopted on 26 April 1994. Two decisions were taken on this issue, the first relating to the fourth European Community framework programme of activities in the field of research, technological development and demonstration (1994-1998) (), the second on the framework programme of activities in the field of research and training for the European Atomic Energy Community (1992-1998) (). The Committee had made its views known on the Commission's proposals for the fourth framework programme on 25 November 1993 ().

2.2. The framework programme seeks to approach the issue on four fronts using specific programmes. Between 27 July and 8 December 1994, twenty of these specific programmes were adopted under the 1994-1998 framework programme, fifteen of them in the first area of activity. The ESC had stated its views on these programmes.

2.3. The two decisions earmarked MECU 12 300 from the Community budget for the twenty specific programmes (MECU 11 046 for the European Community framework programme and MECU 1 254 for the Euratom programme).

2.4. With the accession to the European Union of Austria, Finland and Sweden, Community resources have increased; spending on research and development is also set to rise as these countries take part in the specific programmes. Consequently, an initial 6,5 % rise in the financing mentioned above was approved on 4 and 26 March 1996 (). The Committee had endorsed this initial adjustment on 5 July 1995 ().

2.4.1. This percentage rise is the equivalent of an addition of MECU 800 to the total level of funding allocated to the fourth framework programme. The overall figure has thus risen from MECU 12 300 to 13 100, with MECU 11 746 as opposed to MECU 11 046 allocated to the European Community framework programme (a rise of MECU 718) and MECU 1 336 as opposed to MECU 1 254 earmarked for the Euratom framework programme (an increase of MECU 82). This additional funding has been distributed across the board to the various specific programmes.

2.5. Under the terms of Article 1(3) of both decisions of 26 April 1994, an additional MECU 700 may, should the need arise, be allocated to the fourth framework programme by 30 June 1996 at the latest. However, the decision on whether to release this additional finance was pegged to 'an assessment of the state of implementation of the framework programmes, their contribution to the competitiveness of Community industry and the development of the financial perspective of the European Union`.

2.6. In line with the four criteria outlined in both April 1994 decisions, the Commission believes the conditions have been fulfilled for the approval of the additional MECU 700 (point two of the Explanatory Memorandum).

2.7. The Commission also stresses that its analysis of the Community's research need in key areas of interest for industry and society, and the state of affairs in the European Community's main competitors, highlights a number of areas in which enhanced research activities on the part of the European Union would accrue considerable benefits; the Commission therefore calls for an urgent and substantial increase in research funding.

2.7.1. However, in the light both of budgetary constraints on Community research funding and the need to avoid spreading financial resources too thinly, thereby diminishing their impact, the Commission considers it essential to channel this supplementary financing towards areas where the need to step up action is most urgent.

2.8. For this reason, the Commission proposes a two-pronged approach to the specific programmes concerned; two distinct, but complementary facets are to be explored:

- increased refocusing of activities and enhanced inter-programme Community coordination with measures implemented by the Member States, with a view to overcoming the fragmentation of RTD measures and to avoid a duplication of effort; and

- additional financial support to enhance certain research activities; the selective nature of this financing will make it possible to expand the activities to the degree required to make them viable.

2.9. The Commission has identified five areas where there must be a greater drive towards research and, as well as laying particular stress on enhancing inter-programme coordination, also endorses additional financing here. These five areas are as follows:

- aeronautics (new-generation aircraft) (MECU 165);

- educational multimedia (MECU 125);

- the automobile (car of tomorrow) (MECU 130);

- transport intermodality and interoperability (MECU 90);

- the environment (MECU 190, of which MECU 85 is earmarked for water protection measures and MECU 105 for nuclear safety).

2.10. In three other areas which are also considered to be of priority importance, the Commission proposes changing the scientific and technical content of the specific programmes in order to target research activities more directly and to ensure better inter-programme coordination. At this stage, however, the Commission does not envisage granting additional funding in these cases. The three areas are:

- life sciences (vaccines and viral diseases);

- trains and railway systems of the future;

- maritime systems.

2.11. With the exception of the environment, these priorities correspond to the issues dealt with by the seven research-industry operational units (Task Forces) which have been established by the Commission with a view to improving the coordination of RTD activities at Community and national level. A new Task Force on water is due to be established shortly.

2.12. More specifically, these Task Forces were set up with three objectives:

- to define research priorities better and to liaise with industry, including SMEs and the users of the research results, to identify bottlenecks;

- to ensure that the activities under way in the fourth framework programme are more efficiently coordinated;

- to study all the other (financial and regulatory) options outside the framework programme in order to promote an environment favourable to innovation and facilitate inter-firm cooperation.

3. Overall evaluation of the Commission's proposals

3.1. The Committee backs in principle the allocation of an additional MECU 700 for the fourth framework programme (1994-1998) and the selective approach taken by the Commission to the distribution of this funding among the various specific programmes with a view to focusing additional research activities on areas where direct industrial application is a possibility.

3.2. The ESC recalls the criticism it has voiced on numerous occasions of the meagre level of funding allocated to Community RTD programmes, which bears no relation to the pivotal role research and technological development should have in the drive to boost competitiveness and employment in the European Union ().

3.2.1. The Committee notes with regret that this criticism has lost none of its validity:

- For one thing, science and technology policy in the Member States is subject to budgetary constraints imposed by the determination to bring down government deficits; this has led to stagnation, and even cuts in real terms, in RTD funding since the early 1990s ().

- In addition, all studies confirm that European industry is continuing to lose competitiveness to its main US, Japanese and South-East Asian rivals, one of the main reasons being the constant decline in Europe's ability to keep pace in technology sectors in the 1980s and 1990s ().

3.3. The Committee welcomes in principle the Commission's selective approach which fosters enhanced concentration of resources and coordinated action on common priorities.

3.3.1. An approach of this kind fully matches the Committee's previous recommendations that the funding allocated to the most immediately affected specific programmes should focus, as a matter of priority, on areas of research which would make a direct contribution to revitalizing growth and employment in Europe ().

3.4. Having said that, the Committee notes that these proposals alter the balance between the research priorities of the fourth framework programme. The Committee therefore feels that this move goes beyond mere mid-term revision and anticipates the forthcoming debate on the fifth framework programme due to start at the end of 1996. The Committee urges that the decisions taken here should not prejudice the outcome of this debate.

3.5. Moreover, despite endorsement in principle, the Committee wishes to express a certain number of more specific reservations and recommendations.

4. Budgetary aspects

4.1. The Committee notes that the Commission proposals do not fully exploit the scope for supplementary financing, which, at the 6,5 % rate used for the initial adjustment necessitated by the accession of Austria, Finland and Sweden, would amount to MECU 745.

4.2. The reasons given by the Commission for setting a MECU 700 ceiling on its proposals are the constraints placed on the Community budget and a desire for sound financial management. The Committee subscribes to these concerns unreservedly.

4.2.1. The Commission therefore asserts in the explanatory memorandum its intention of incorporating this supplementary finance into the overall ceiling for the 1993-1999 financial perspectives; to facilitate this, the proposal is merely to raise substantially the present ceilings of category 3, which covers the financing of research and other internal policies.

4.3. The proposals for revamping the financial perspectives for 1997-1999, adopted by the Commission on 20 March 1996, consolidate these lines of approach which had, in fact, been confirmed initially by the Commission President before the European Parliament on 31 January last.

4.4. The Committee notes that the revamping proposed by the Commission has been made possible by releasing ECU 4 billion, largely a result of savings made in agricultural spending in the wake of the reform of the CAP and positive developments on the market.

4.5. The Committee regrets in this context that the Commission did not think it appropriate to make use of the additional financial leeway of MECU 45 offered by the initial adjustment of the fourth framework programme.

4.6. The Committee feels that a proposal of this kind, far from jeopardizing fiscal discipline and orthodoxy, would have confirmed that research and innovation are central to promoting the competitiveness of the Community's industry and have a positive impact on jobs against the backdrop of social and economic cohesion.

4.7. However, the proposal from the President of the Commission mentioned above, calling on all political, economic and social players to unite in a Europe-wide pact of confidence to promote jobs, seems to indicate a more purposeful attitude on the part of the Commission, all the more so since the Commission President also presented this additional financing as one of the main elements of the Commission's own initiatives for encouraging investment, growth and employment.

4.8. The Committee therefore calls on the Commission and the budgetary authorities to give substance to the European Union's commitment to employment-enhancing policies by pursuing a more ambitious line of action, with adequate funding.

4.9. In this context, the Committee also stresses the absolute need to place a strict limit on management and administrative expenditure and to allocate to research in the strict sense the lion's share of the additional funding, which is to be allocated to the implementation of the fourth framework programme.

5. Defining research priorities

5.1. The Committee feels that the Commission has failed to give adequate reasons for the way it selected priority areas for supplementary funding and regrets that it has no information on how the decision was taken to divide up the MECU 700 among the five areas of activity.

5.2. The Committee can but note that the priority areas chosen by the Commission coincide with those of the Task Forces, which were selected without any debate in the various bodies involved in the decision-making process.

5.2.1. The Commission's action therefore gives rise to the assumption that the proposals made and priorities set were to a certain extent predetermined by the fields covered by the Task Forces, with the criteria the Commission claims to have applied coming into play merely in a secondary capacity.

5.3. This inference cannot but reinforce the concerns and reservations expressed by the Committee, in its Opinion on the coordination of research and technological development policies (), as regards the lack of transparency in the way in which the Commission established these Task Forces and in the selection of mutual-interest projects for which it is now proposing particular action.

5.4. The Committee's consternation over this issue, which it has already expressed in the past, is thereby reinforced. These Task Forces, which were set up as conduits for coordination, must not become the accepted vehicles for determining and managing research priorities, thus precluding any degree of flexibility in determining the main areas of action.

5.4.1. The Committee therefore believes that the Commission proposals sow a certain degree of confusion regarding the selection criteria for the strategic research topics, the ways and means of implementing RTD activities in practice and internal Commission management and coordination instruments for research activities.

5.5. The Committee reiterates its warning on 'the inherent weakness of a top-down approach, which is liable to be unrealistic and to underestimate the rapidly changing nature of worldwide technological challenges` ().

5.6. In the Committee's view, the Commission should take another look at the priorities it has set, in the light of consultations with all the sectors concerned, including SMEs and research bodies. Consultation of this kind should help achieve a wide degree of consensus among those active in the research and innovation field, as to the areas on which the proposed action, and especially financing, should focus. Account should also be taken here of the balance between research priorities which was established when the fourth framework programme was adopted.

5.7. The Committee stresses, not least in the run-up to the fifth framework programme, the importance for the European Union of having a real research and development technology strategy based on the work of the European Science and Technology Observatory set up as part of the Seville-based Institute for Prospective Technology Studies, so as to allow all those involved in research and innovation to take part in this strategy and, in particular, set their RTD objectives and priorities.

5.8. If this is not done, the Committee believes there is a danger that:

- there will be specialization in too limited a number of industrial areas where projected growth might not meet expectations, with a resultant weakening of the European economy; and

- the technological gulf which divides the regions of the European Union will widen if research is geared towards industrial sectors involving only a minimum of players concentrated in a few geographical areas.

5.9. The ESC insists that priority must be given to research activities which enhance the competitiveness of European industry while at the same time having a positive impact on employment throughout the European Union ().

5.10. Against this backdrop, the Committee, given the challenges facing European education and training systems, supports the Commission's proposals designed to promote research into educational multimedia, inter alia by granting additional funding.

5.10.1. The Committee thus reiterates the importance of immaterial investments which encompass policies of research, technological innovation and the enhancement of human resources.

5.10.2. The Committee stresses how important it is for future multimedia systems, services and content to play a part in developing the humanistic and educational values, which are the backbone of teaching and training systems in the European Union, and in preserving the EU's cultural and linguistic diversity.

6. Research-industry Task Forces and coordination of research policy

6.1. The Committee reiterates its backing for the Task Force arrangement since this enables coherent, rational management in conformity with the needs of industry and society. The Committee stresses that these Task Forces must broadly focus on coordinating research projects at every stage of their implementation.

6.2. If this is the remit given by the Commission, the Task Forces may, the Committee believes, give a major boost to the implementation of the next framework programme, and enhance its coordination while ensuring that the staffing and administrative costs are kept to a strict minimum.

6.3. Whatever the case may be, the Committee once again very much regrets that the Commission pays so little attention to the option of complementary programmes or European Union involvement in RTD programmes undertaken by several Member States, as provided for in Articles 130k and 130l of the Treaty.

6.3.1. The Committee is all the more surprised over this issue, given that the competent Commissioner, Mrs Cresson, has reiterated on a number of occasions her intention of bringing these provisions into play () (). Moreover, the Commission's Work Programme for 1995 already envisaged making use of the supplementary funding of the fourth framework programme to launch complementary schemes ().

6.3.2. The Committee recalls that, at its meeting of 10 March 1995, the Research Council noted that the implementation of these arrangements required close examination (). The Committee urgently calls on the Commission to carry out an examination of this kind and to submit the results quickly as part of the preparations for the fifth framework programme.

6.4. In this connection, the Committee believes that these arrangements could be used to generate synergies between Community RTD activities and Eureka projects, in particular by means of greater European Union involvement in these schemes, as indeed is already envisaged by the fourth framework programme.

6.4.1. An approach of this kind would fit perfectly with the strengthening of the research-innovation process; the Committee has already stressed the need for this ().

6.5. The Committee also feels that the European Union could benefit from taking greater part in the activities of the European Space Agency. This is not mentioned in the Commission proposals for aeronautics.

6.6. Finally the Committee also feels that it might be better for certain research activities given priority status by the Commission proposals to be assigned to complementary programmes co-financed by the Member States to whom they are of greatest interest.

7. SME involvement

7.1. The second report of the Consultative Group on Competitiveness, submitted in December 1995, reiterates the need for SME-support to be the backbone of any drive to stimulate employment and competitiveness in Europe.

7.2. Against this backdrop, the Council Resolution of 27 November 1995 on small and medium-sized enterprises (SMEs) and technological innovation () invited the Commission to 'increase real, effective participation by SMEs in R& D programmes` and to 'strengthen measures to disseminate and transfer technology in close collaboration with the Member States`.

7.3. The Committee notes that the measures to stimulate technology, in particular those such as the Craft scheme which are specially financed within the various research programmes, have done much to increase SME involvement in RTD activities both as providers and users of high value-added goods and services.

7.4. The Committee therefore very much regrets that the Commission proposals do not include new measures to boost SME involvement. Moreover, it is concerned that the activities of the task forces may undermine the Commission's efforts to simplify, and make more transparent, procedures for involvement in specific research programmes, and in particular to facilitate SME access to research finance.

7.5. The Committee feels particular attention should focus on specialist and craft-based small and medium-sized enterprises where coordination of RTD activities will enhance technological developments and promote forms of management which raise competitiveness, itself a creator of jobs.

7.6. For its part, the ESC proposes giving specific preference to SMEs, including subcontractors, in new priority research activities. The Committee therefore proposes adding the following recital to the Commission proposals:

'Whereas small and medium-sized enterprises (SMEs) make a major contribution to job creation in Europe; whereas SMEs constitute a considerable pool of innovation; and whereas care should therefore be taken to ensure that these SMEs have prime access to the fourth framework programme and are able to benefit quickly from research findings, thus making them more competitive.`

7.7. The Committee notes with concern that the way in which the Commission sets up its Task Forces leads to preferential relations with enterprises which dominate the industrial sectors concerned. Consequently, it proposes that a horizontal SME Task Force be established as quickly as possible to coordinate all the policies and instruments designed to promote development and strengthen the technological and innovative capacity of SMEs, as indeed is called for by the above-mentioned Council Resolution.

7.7.1. The establishment of a Task Force of this kind would give substance to the priority which, in the speech mentioned above, the President of the Commission attached to SMEs within the context of employment promotion measures.

8. Policy of innovation

8.1. One of the major challenges facing Europe today is how to translate the results of successful research into marketable innovations ().

8.2. The Committee therefore very much regrets the absence of proposals for allocating supplementary financing to the specialized programme designed to disseminate and utilize the results of research activities, technological development and demonstration (), and to strengthen the impact of activities undertaken within this framework.

8.3. The Committee feels that this situation hardly conforms to the guidelines and proposals set out in the Green Paper on innovation () which the Commission submitted last December and on which the Committee has been asked to draw up a separate Opinion.

8.3.1. This is all the more deplorable since the Commission makes no provision for additional funding to encourage entrepreneurial innovation or to ensure that, within a reasonable space of time, the European Union is able to translate the results of research projects into new, marketable products or processes.

8.4. The Committee thus believes that the activities undertaken under the specialized programme have a major role to play in the fourth framework programme; this more than justifies increased financing. In its Opinion on this programme (), the ESC deplored the insufficient funding the Council had granted to the fourth framework programme - around 2 % of the overall appropriation.

8.5. The Committee also believes that the establishment of a Task Force on innovation would guarantee the synergy required between research policy and industrial policy and would foster policies and instruments which promote the dynamism of the research-innovation-market process in the pursuit of industrial competitiveness, employment growth and economic and social cohesion.

9. Nuclear safety

9.1. The Committee welcomes the Commission's proposal to increase the level of funding allocated to the specific research and training scheme in the field of safety of nuclear fission (). This proposal matches previous ESC positions.

9.2. The Committee also endorses the Commission's intention to earmark a major part of the proposed MECU 105 to improving nuclear safety in central and eastern Europe and in the CIS.

9.3. In this connection, the Committee underlines the great importance of close cooperation with scientific bodies and personnel in these countries who, while they may have highly-skilled expertise and very sophisticated technologies, are desperately short of financial resources.

9.4. The ESC also stresses the synergistic relations to be established with the Phare and Tacis programmes.

10. International cooperation

10.1. The Committee highlights the meagreness of the MECU 25 additional funding which the Commission is proposing to allocate to the specific R& TD programme in the field of cooperation with third countries and international organizations (). To cap it all, these funds are only allotted to three of the five areas chosen by the Commission for supplementary financing: educational multimedia (MECU 10), transport intermodality and interoperability (MECU 10) and water (MECU 5).

10.2. Despite the Commission's assertion that its proposals are in line with its Communication of October 1995 on perspectives for international cooperation in research and technological development (), the Committee is bound to conclude that the proposed funding is disproportionate to the declared objectives, since this communication stated the intention of granting supplementary financing for cooperation activities with:

- the countries of central and eastern Europe (CEEs) as they prepare for accession; and

- the Mediterranean countries with a view to promoting research and technological development, the first step on the road to creating a common Euro-Mediterranean scientific area.

10.3. The Committee recalls that in its Opinion on this specific programme (), it had already railed against the Council's decision to cut by almost a third the funding proposed by the Commission for scientific and technical cooperation measures. The present proposals can hardly be said to answer this criticism.

10.4. The Committee notes with satisfaction the declared intention of the Council Presidency inter alia to consolidate the Euro-Mediterranean partnership in the field of research and development technology in areas such as water management, maritime transport, agriculture and fisheries, civil protection, health and the safeguarding of cultural heritage.

10.5. The Committee asks that concrete financial backing be given to the intentions laid down by the Commission in its communication and that the appropriation for the specific programme be increased.

10.6. The Committee feels that the decisions to this effect would be fully in line with the Resolution adopted by the Research Council on 25 March 1996 in the wake of the above-mentioned communication () and with the conclusions adopted by the Council Presidency the same day on scientific and technical cooperation between the European Union and, on the one hand, non-Member Mediterranean countries and, on the other, the associated countries of central and eastern Europe.

10.7. The Committee reiterates that important advantages can be gained from close collaboration with scientific bodies and staff from countries outside the EU. The establishment and development of collaboration of this kind should be a preeminent tenet of international cooperation and should be preferred to study and technical aid activities which often have little real justification.

Done at Brussels, 29 May 1996.

The President

of the Economic and Social Committee

Carlos FERRER

() OJ No L 126, 18. 5. 1994, p. 1.

() OJ No L 115, 6. 5. 1994, p. 31.

() OJ No C 34, 2. 2. 1994, p. 90.

() OJ No L 86, 4. 4. 1996, pp. 69 and 72.

() OJ No C 256, 2. 10. 1995, p. 12.

() 1994 European Report on Science and Technology Indicators, European Commission, November 1994.

() OJ No C 393, 31. 12. 1994, p. 117.

() OJ No C 18, 22. 1. 1996, p. 54.

() OJ No C 18, 22. 1. 1996, point 4.3.8.

() In this connection, the Committee makes reference to the forthcoming Opinion on the employment impact of new technology.

() See speech given by Mrs Cresson at the 3rd Plenary Session of the European Science and Technology Assembly, 8 April 1995.

() See also Mrs Cresson's speech to the European Parliament Commission on Research, Technological Development and Energy, 25 April 1995.

() OJ No C 225, 30. 8. 1995, p. 6.

() Press Release 'Research` 5425/95 (Press 71).

() OJ No C 341, 19. 12. 1995, p. 3.

() Enhancing European Competitiveness - Second Report of the Competitiveness Advisory Group - December 1995.

() OJ No L 361, 31. 12. 1994, p. 101.

() COM(95) 688 final.

() OJ No C 393, 31. 12. 1994, p. 151.

() OJ No L 361, 31. 12. 1994, p. 132.

() OJ No L 334, 22. 12. 1994, p. 109.

() COM(95) 489 final.

() OJ No C 393, 31. 12. 1994, p. 148.

() OJ No C 110, 16. 4. 1996, p. 1.