A4-0165/96

Resolution on the Green Paper on Innovation (COM(95)0688 - C4-0609/95)

The European Parliament,

- having regard to the Commission's Green Paper on Innovation (COM(95)0688 - C4-0609/95),

- having regard to the positive potential of SMEs for both employment and innovation,

- having regard to the report of the Committee on Research, Technological Development and Energy and the opinions of the Committee on Economic and Monetary Affairs and Industrial Policy, the Committee on Social Affairs and Employment and the Committee on Culture, Youth, Education and the Media (A4- 0165/96),

A. whereas innovation is needed to improve the competitive position of European industry and is fundamental to job creation and economic growth,

B. whereas the Green Paper on Innovation recognizes the important interrelationship between innovation and society and whereas this must be taken into account in the formulation of any European innovation strategy,

C. whereas innovation has beneficial social effects in terms of creating new employment, helping to improve social and working conditions and expanding consumer choice, but at the same time it poses a number of challenges to policy-makers,

D. whereas in relation to employment policy the recognition of innovation and its impact on the job-intensity of growth requires that innovation policy in Member States be integral to the annual employment surveillance procedure,

E. whereas innovation depends on the context in which technology is used as well as on research and technological development (R& TD),

F. whereas the innovative performance of an economy depends not only on the performance of specific research institutions or enterprises but also on the degree to which they interact with each other and with social institutions in a collective system of knowledge creation and use,

G. whereas efforts to promote innovation by a centralised 'top-down, pick the winners' approach have generally been unsuccessful,

H. whereas public resources can be effectively deployed to bring together research institutes, government agencies and industrial organisations to develop jointly long-term research programmes that serve their identified interests in a 'bottom-up' approach with high levels of transparency, visibility and accountability,

I. whereas knowledge can be converted to profitable use only through necessary 'complementary assets', including production capacities, technological support systems and distribution networks, while many enterprises have a limited capacity to manage new technologies,

J. whereas developments in the information society are of particular relevance to all aspects of innovation,

I. DISSEMINATION AND EXPLOITATION OF R& TD RESULTS

1. Appreciates the Commission's analysis of the situation in the Union and welcomes the Routes of Actions proposed in the Green Paper, while considering that clear priorities need to be established among them; in this context asks the Commission:

- to take into account the differences between the dual aims of competition and cooperation in R& D;

- to continue to publish and update the Science and Technology indicators (Ruberti Report 1994);

- to prepare suitable innovation indicators for presentation in the White Paper using such quantified measures and indicators;

- to incorporate into any Action Plan a rolling review of best practice, encouraging innovation in individual Member States;

2. Believes that the European Union should make a much greater commitment to the diffusion of technical know-how within its borders with the aim of making technology more accessible, relevant and exploitable across the Union;

3. Believes that such a commitment generally requires:

- more support for the INNOVATION programme and the Stimulation of the Training and Mobility of Researchers programme (including students) and a link between these programmes and existing Task Forces;

- more cooperation between the INNOVATION Programme, the specific research programmes and the Commission's horizontal policies for the dissemination of results;

- concrete plans for the dissemination and exploitation of EU R& TD results and explicit attention to organisational innovation and design in EU R& TD Specific Programmes;

- the establishment, in line with the recommendation of the 1994 mid-term review of VALUE II, of a Task Force involving the services responsible for the dissemination and exploitation of R& TD, the management of specific R& TD programmes, and users of R& TD products and processes, in order to draw up a common methodology to be implemented by the specific programmes to foster the dissemination and exploitation of R& TD projects;

4. Believes that EU actions should focus specifically on:

- support for research that is interdisciplinary, application-oriented and network-driven;

- support for research to create future industries which do not currently have a sufficient industrial base to be self-supporting;

- support for regional networks of non-industrial and industrial research organisations as well as firms, the creation of consortia with partners from each part of the value chain, and more participation by industrial research laboratories in Activity four of the Framework Programme;

- the elaboration of 'visible aims' that would involve society early on in the R& TD process;

5. Stresses the mutual advantage of current and future developments in the information society and innovation and calls on the Community institutions, the Member States and all others concerned to strive to ensure that these developments strengthen and enrich each other; in particular takes the view that:

- efforts should be made to develop the management of and access to information in Europe and considers that the development of strategies and tools aimed at reducing the gap with the USA, Japan, and Europe's other main competitors in this field should be a high priority;

- the foundations for innovation must be laid in schools, which should therefore have access to the Internet;

- necessary regulation must not hamper the ability to innovate of individuals, universities and firms, which should have access to information networks;

- a balance must be struck between the interests of the general public, business and state as regards the protection of information ;

- the work of existing and new observatories should be coordinated and more closely defined;

- public broadcasting is of particular importance as a purveyor of high quality science, education and information programmes and can do much to assist and implement the concept of 'lifelong learning' without resorting to traditional formal educational methods;

6. Stresses the need to create a climate favourable to innovation in the EU, by improving the staffing, premises and equipment of universities and also through result-oriented research and the linking of universities and technical institutes, which should be open to all;

II. MONITORING OF R& TD

7. Underscores the need for:

- improved cooperation as regards national and EU research policies;

- prompt and widespread dissemination of information from 'technology watch' programmes;

- constant monitoring of developments in the quality of the results of EU R& TD programmes;

8. Welcomes the emphasis on the need for better concertation between decision makers - including within the Commission - and underlines the need to promote a dialogue between public authorities and industry, so as to establish a consensus as to the future policy framework, thereby fostering confidence in long-term prospects which will help to encourage long-term investment;

9. With respect to the Institute for Prospective Technological Studies (IPTS) of the Joint Research Centre:

- welcomes the 'technology watch' function of IPTS, but considers that efficient policies to foster innovation must also rely on significant reliable and comparable data relating to all aspects of the innovation process, including its potential impact on productivity, and therefore calls on the Commission to set up a quantitative information system ('tell-tale' system) for this purpose, to facilitate the setting and monitoring of precise objectives;

- calls on the Commission to accord greater priority to the examination of the context of technological change and the assessment of scientific and technological options, and for IPTS to be given a key role in developing network links between centres engaged in these activities and in evaluating the outcome of foresight programmes in terms of innovation;

- recognises in particular the need for close links between IPTS and Parliament's Scientific and Technological Options Assessment unit (STOA) and for adequate staffing and funding of STOA;

III. ECONOMIC AND FINANCIAL CONSIDERATIONS FOR INNOVATION

10. Calls on Member States urgently to review the impact of taxation regimes on the propensity to innovate and calls for adjustment of fiscal systems to favour innovation, especially with regard to intangible forms of investment which will boost economic growth and increase prospects for employment; in this respect:

- recalls that the Commission's Annual Economic Report for 1996 welcomes the fact that the profitability of businesses is currently high, while wage developments remain moderate;

- stresses that fiscal incentives are equivalent to subsidies and should not be directed towards types of innovation likely to generate rapid returns in the marketplace, but should be directed instead towards types of innovation most likely to generate positive externalities, eg. technologies with pervasive spin-offs for other sectors;

- notes that high profitability in Europe is partly a reflection of the high returns demanded by lenders and shareholders and notes that the level of investment might be higher if the profitability test which potential investments must pass were less stringent;

- points to the Japanese example where domestic financial markets are highly regulated, with a view to encouraging innovation, and calls on the Commission to examine the viability of this type of approach in a European setting;

11. Calls for competition to be promoted within the internal market, to render it impossible for a few large enterprises to determine the course of innovation and monopolize subsidies from the EU and the Member States, developing products for which there is little demand;

12. Calls on the Commission to examine the constraints imposed on governments and regional authorities by European competition policy in terms of their ability to offer cheap loans to innovative firms;

13. Considers that the reluctance of financial institutions to cope with the demands of innovative enterprises is partly explained by the lack of technical understanding in banks and other financial institutions and should be addressed by the establishment of independent assessment bodies which could provide 'technical ratings¨ to complement the analysis of financial ratios and urges Member States and the Commission to give priority to measures for making the financial system more pro-innovative;

IV. ADMINISTRATIVE AND LEGAL CONSTRAINTS

14. Is concerned that cumbersome legal and administrative procedures at both Member State and Union levels are an impediment to the exploitation of technological advances by business, research centres and universities, and therefore:

- emphasises that harmonisation at European level can contribute to the simplification of administrative procedures by replacing fifteen sets of regulation with a single set;

- welcomes the Commission's Simpler Legislation for the Internal Market - SLIM - initiative in the context of the Green Paper; stresses the continued need for full Social Partner and SME involvement in the process;

- calls for early adoption of the European Company Statute;

- calls for ongoing consideration of further administrative simplification of the Fourth Framework Programme involving the range of Commission services in the programme;

15. Agrees that it is important to promote intellectual and industrial property in terms of cost and speed of the procedures as an incentive to innovation, but believes that this should be balanced by the need to allow the development of generic products which generate competition, thereby providing the impetus to businesses to innovate further; believes therefore that the periods of time during which protection is granted should vary according to the product type;

V. ENCOURAGING SMES TO INNOVATE

16. Stresses the important role played by SMEs in job creation and in regional and local development and therefore calls for:

- clear mechanisms for SMEs to participate in EU research projects and to apply the results thereof;

- specific programmes that would encourage the cooperation of SMEs with universities, industrial research centres and big enterprises with a view to disseminating and exploiting technology;

- greater attention to be paid to the role of local and regional-based institutions and public policy in fostering cooperation and competition among enterprises;

- the development and exploitation of a range of intermediary organisations (such as banks, consultants, marketing cooperatives and technical colleges) which can help to meet the needs of small firms;

- an examination of ways in which the Structural Funds can be directed towards innovation;

17. Recognizes that SMEs are not a homogenous group of businesses and that a comprehensive policy is needed to involve them in the innovation process. That policy should:

- identify and respect their differences with large companies in the management of technology;

- focus on target groups on the basis of size and sector;

- place at its core technological training and in particular continuous education;

18. Emphasises the potential economic risks associated with innovation, especially in the case of SMEs, and calls for concerted action:

- to create more favourable tax and financial conditions;

- to devise models for the promotion of joint ventures between SMEs and research institutes, including the provision of risk capital;

- to encourage equity financing, loans and loan guarantees, particularly by the European Investment Bank, the European Investment Fund, and the European Loan Insurance Scheme for Employment (ELISE), whose level and speed of funding for SMEs should be improved;

19. Calls upon the Commission to establish a European network for women who set up in business;

VI. SOCIAL, EDUCATIONAL AND TRAINING ASPECTS OF INNOVATION

20. Regrets that, in comparison with the USA, a traditional European communication system consists of a wide gulf between researchers, particularly those engaged in fundamental research, and public debate; considers that targeted efforts should be made to close this gulf by making it possible for wider sections of the public to understand current research findings;

21. Considers it essential to incorporate the social dimension in verification of research; believes inter alia that, to this end, project applications should be formulated accordingly and the allocation of funding should be conditional upon a commitment to communicate the findings to the outside world;

22. Calls for a more consumer-oriented innovation policy;

23. Stresses above all that it is only with highly developed systems of worker information and participation that innovation can be introduced effectively into the workplace and that the innovative capabilities and capacity of the workforce can be maximised. Believes in this context that the European Union should:

- continue to foster and promote the principles and ideas of worker participation;

- further the social dialogue at European level with greater attention being paid to the implications of innovation for industrial relations;

- assist in the training of collective bargaining partners so that they are more aware of the impact of innovation;

24. Calls for special attention to be paid to marginal product refinement and improvement, which is vital to on-going competitiveness, so that disproportionate costs do not deter small-scale innovation, whilst respecting high standards of worker, environmental and consumer protection, areas where Europe can develop an important 'first mover' advantage in new environmental growth industries;

25. Takes the view that the concept of innovation contains a qualitative component that is not sufficiently highlighted in the Green Paper; there, innovation is understood mostly as the introduction of new practices that increase the competitiveness of innovative undertakings (and national economies) - but not every such new practice is desirable; calls therefore on the Commission also to measure the suitability for promotion of innovations against social and ecological criteria;

26. Calls on the Commission to recognize the need for integration of all aspects of innovation into education, particularly vocational training, and to recognise that the instruments necessary for registering new, innovation- based qualification requirements for future professions do not exist; requests the Commission to create those instruments;

27. Welcomes the Green Paper's proposals to use the 1996 European Year of Lifelong Learning as a platform to adapt education and training systems to the impact of innovation. Stresses the importance of providing greater contact between the world of education, research and enterprise. Urges the involvement, as far as possible, of SMEs and the craft sector in the innovation process. Believes that the debate on the White Paper on Education and Training must be also a vehicle to raise awareness of the importance of innovation;

28. Highlights the need for coordination with other relevant Community actions, as for example the revised Employment and ADAPT Community initiatives incorporating NOW which includes support for the development of innovatory assessment methods to integrate within career structures all the experiences and activities carried out by women, HORIZON which facilitates innovative approaches to reducing the labour costs for employers of groups with lower productivity in the labour market, YOUTHSTART which includes the development of innovatory approaches to labour market integration of young people especially through distance learning and ADAPT-BIS which includes financing for innovation;

VII. TASK FORCES AND INNOVATION

29. Recognises that the seven Task Forces described in the Green Paper have brought together a range of services within the Commission, are expanding networks among enterprises and research institutes and will influence the planning of the Fifth Framework Programme;

30. Strongly regrets, however, that those Task Forces are the product of a selection process in the Commission that lacked transparency and analytical rigour and thus appeared arbitrary;

31. Regrets also that, notwithstanding the Commission's assertions, there has been no serious effort to enhance coordination of national and EU research policies through the Task Forces;

32. Calls for an open debate on the goals of existing or other Task Forces and for clear links to be established between the work of the existing Task Forces and the Green Paper's Routes of Actions;

33. Notes that the White Paper on Growth, Competitiveness and Employment identified information technology and biotechnology as growth sectors and regrets that no attention was paid to these sectors in the Green Paper; believes too that environmental technologies, nanotechnology and multi-media educational software should have received more attention;

34. Stresses that - with over 130 specific proposals contained in the Green Paper - the test will be the Commission's success in implementing them, and calls on the Commission fully to consult the European Parliament on the follow-up to the Green Paper - including the Action Plan expected later this year - and to put forward a mechanism for continued collaboration with Parliament on the progress of the innovation programme;

35. Instructs its President to forward this resolution to the Commission, the Council, and the governments of the Member States.