IE 
HÉ COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 20.11.1996 
COM(96) 589 final 
The First Action Plan for 
Innovation in Europe 
Innovation for growth and employment 
(presented by the Commission) 

In order to fight unemployment, Europe must secure a 
stronger growth, better centred on the domains of the future 
(Confidence Pact for employment, June 1996) 
INTRODUCTION 
The public debate launched by the Green Paper has largely confirmed the basic principles of the 
Commission's diagnosis of the reasons for the innovation deficit1 plaguing the European Union. 
There is widespread agreement on the need for a global approach to the problem, incorporating 
technological aspects, training, venture capital development and the legal and administrative 
environment. The debate has also drawn attention to the importance of the international dimension 
and highlighted the diversity of national, regional and sectoral situations2. At the Florence Summit, 
the European council has clearly indicated that "the fight for employment must remain the main 
priority for the Union and its Member States" and within the framework of a strategy to achieve 
that objective "has requested the Commission to establish a plan of action for the measures to be 
undertaken in the field of innovation"3. 
As a matter of fact, new markets are developing at a steady pace in the domains of information, 
health, food processing and culture. A demand for new products and services is emerging. The 
ability to innovate in order to satisfy these new needs is a precondition for the future creation of 
jobs in Europe. This ability is also necessary in order to maintain competitiveness and employment 
in the other sectors of activity. 
To act for innovation is in first instance the responsibility of citizens, of industry and of national, 
regional and local authorities. 
Action at Community level, while respecting the rules of subsidiarity is necessary to draw up and 
enforce the rules of the game, particularly those on competition, intellectual property rights and the 
internal market. This level will also provide the necessary overview and enable exchanges of 
experience to be organised and best practice to be propagated. Lastly, the Commission should 
show an example by mobilising its own instruments, above all the Framework Programme for 
Research and Development, and the Structural Funds. 
The Green Paper on Innovation opened up a number of pathways. For the sake of efficiency, this 
"First Action Plan" refers to a limited number of priority initiatives to be launched very soon at 
Community level and includes a number of schemes put into action or announced since the launch 
of the Green Paper, identified as essential to the innovation process4. 
This is an initial action plan. The Commission is on the one hand continuing to investigate some of 
the long-term schemes identified in the Green Paper; on the other, it is proposing to carry out a 
more detailed analysis of activities which are the province of the Member States and of applicant 
countries5, with their collaboration, with the aim of establishing, in a second phase, a common 
reference framework which will help to identify priority options and opportunities for cooperation. 
The Action Plan for Innovation identifies three areas for action. 
1 The meaning and scope of Innovation are defined in that Green Paper (COM(95)688 final 
2 A summary of the comments received is given in Annex 2. 
3 Florence Summit, conclusions of the Presidency, 21 and 22 June 1996, SN/300/46 
4 Details of these initiatives and their justification are set out in Annex 1. 
5 The ten associated countries of Central Europe, Cyprus and Malta 
to foster an innovation culture; 
to establish a framework conducive to innovation; 
to better articulate research and innovation 
1. THE TOP PRIORITY IS TO FOSTER A GENUINE INNOVATION CULTURE. 
Innovation requires, first and foremost, a state of mind combining creativity, entrepreneurship, 
willingness to take calculated risks and an acceptance of social, geographical or professional 
mobility. Being innovative also demands an ability to anticipate needs, rigorous organisation and a 
capacity for meeting deadlines and controlling costs. 
An innovation mentality needs to be promoted, and neither legislation nor short-term measures will 
be of any use here! The means to act exist: 
(i) Education and training first 
At national level, continue reviewing courses and teaching methods, above all for their ability to 
stimulate creativity and a spirit of enterprise from the earliest age, and think about any changes 
which may be necessary to the training of trainers. Member States should also continue to develop 
life long training. 
The Commission's contribution will be to set up a permanent ''training and innovation" forum to 
stimulate the exchange of experience and best practice in this area. It will continue to implement 
the White Paper on Education and Training, particularly where apprenticeship (Erasmus 
apprenticeship, European apprentice statute) and continuing training are concerned. It will foster 
links between schools as part of the "Learning in the Information Society" initiative. 
(ii) Easier mobility for researchers and engineers to firms 
In the orientations for the Fifth Framework Programme for Research, the Commission proposes a 
wide programme with the main objective of enhancing human potential. It should in particular 
boost the efforts of the framework programme to arrange for transnational secondments of young 
researchers and engineers to businesses, in particular SMËs, to help with their innovation or 
technology transfer projects. 
Member States are invited to adopt similar measures and to set up the conditions for making this 
mobility a reality. 
The Commission has launched a debate on mobility on the basis of the Green Paper and will study 
the recommendations of the Veil group6. 
(iii) Demonstrate effective approaches to innovation in the economy and in society 
It is easier to make innovation acceptable and hence successful in the long run if citizens, industry, 
and their representatives are involved in the debate on the major technological choices to be made 
and if employees, users and consumers take part in the process. The dissemination of good 
practice in this field will be strengthened. 
The Commission has entrusted a high-level working party headed by Ms Veil with the task of 
examining the obstacles still hindering the free circulation of workers and individuals. On the 
basis of its conclusions the group will draw up proposals for removing the legislative, 
administrative and practical barriers identified. 
Moreover, the future framework programme for research should open up new approaches to 
demonstration, including technical, economic and social aspects, management and organisation, 
and fostering participation. 
(iv) Propagate the best management and organisational methods amongst businesses 
More and more of the firms that succeed are "agile", reactive and likely to forge cooperative links 
with external centres of expertise. 
Greater priority should be given at both national and Community level to disseminating 
organisational innovations and using information and communication technologies in this field. 
The Commission will see to favour the use the instruments at its disposal (the framework 
programme, the Structural Funds and the training programmes) to this end. Quality promotion 
policy contributes to steer business and public administrations in that direction. 
Emulation amongst firms, such as comparative evaluation or benchmarking, enabling them to 
compare themselves with the international leaders in their field, is an effective way of propagating 
good practice. The Commission will therefore set up a pan-European benchmarking system, 
starting with quality, and will help to network the national initiatives which it is inviting the 
Member States to develop7. 
(v) Lastly, stimulate innovation in the public sector and in government 
At national level, innovation training or awareness schemes for decision-makers and managers of 
projects and funds in the public domain need to be developed. 
The Commission will stimulate exchanges of experience on ways of promoting and propagating 
innovation in government departments and authorities. This may culminate in the issue of a Green 
Paper in 1998? 
It will also compile a permanent trend chart of innovation performance and policies in Europe, 
fonning the basis for a regular report on innovation in the European Union. 
Finally, Member States are requested to pursue their schemes for fostering competition in public 
invitations to tender and the use of performance standards. 
Z THE SECOND PRIORITY IS TO SET UP A LEGAL, REGULATORY AND 
FINANCIAL FRAMEWORK CONDUCIVE TO INNOVATION, 
(i) The legal and regulatory environment needs to be adapted and simplified. 
• The European Union and the Member States should first of all make efforts to improve the 
European patent system, making it more efficient, more accessible and less expensive. The 
public debate has confirmed the needs of users in this field. 
Many of the defects in the current situation stem from the coexistence in the European Union of 
three patent systems: national, European and Community. Since the European patent system 
provides for no European-level tribunal with jurisdiction over disputes in this area, there is a 
COM(96) 463, 9 October 1996. 
danger that the competent Courts in the Member States may deliver conflicting decisions. The 
Community patent is still not in force, not yet having been ratified by all Member States, and 
has already fallen behind the changing requirements and the construction of Europe. 
The Commission will prepare in 1997 a Green Paper on the issue of the Community patent. It is 
foreseen that this text will consider: 
* whether the Luxembourg agreement on the Community patent should be converted to a legal 
instrument under the Treaty. 
* whether national patent convention should be further harmonised at Community level. 
* whether bridges should be built between the European and the Community patent system. 
* whether it is possible to adapt the system of taxes and duties in a way that corresponds to the 
services provided and is not a barrier to the protection innovation. 
The Commission will pursue its plan with the Member states, to harmonise and complete 
legislation (especially with regard to the information society, design or employment) and will 
reinforce the role that it can play in the action against counterfeits. It will implement an 
information and support service for participants in the research framework programme. 
The Commission recommends that Member States put in place instruments for assisting SMEs 
and universities in the event of litigation, to raise awareness in SMEs and to develop training 
schemes in this area. 
• Business start-up and innovation support must be simplified at both national and 
Community level 
The Commission recommends that Member States set quantitative objectives and an ambitious 
timetable for cutting the formalities and delays involved in starting up businesses. 
The Commission will take on board what is being done in some Member States by testing an ex-
ante mechanism for assessing the impact of regulations on innovation within the general 
guidelines for legislative policy. 
Businesses, particularly SMEs, often get lost amongst the plethora of support services which 
have burgeoned at local, regional, national and Community level. Efforts to rationalise 
structures and coordinate initiatives need to be accentuated so as to maximise their added value 
and their effectiveness. 
Similarly, local or regional networks of one-stop shops for SMEs for innovation support need to 
be generalised. 
Suitable legal structures (European companies, joint undertakings) must be adopted, and the 
promotion of existing instruments (EEIGs) will be actively pursued. 
(ii) Innovation financing must be made easier in Europe 
In this vital area, much depends on private initiatives or those at regional and national level. The 
Commission needs to work on propagating good practice and facilitating its adoption, particularly 
with the support of pilot projects but also by mobilising the Structural Funds and newer 
instruments such as the European Investment Fund (EIF). This action should be guided by three 
objectives: 
• First, investment in risk capital and equity needs encouragement. 
This applies particularly to start-up investment and innovative, high-growth firms, which are a 
major source of new jobs. 
Long term sources of funding (pension funds, life insurance, "business angels" and save-as-
you-earn schemes) should be directed more towards risk investment. 
The Commission will support more EIF intervention to promote innovation. This could take the 
form of a pilot mechanism for attracting risk capital funds in which the EIF will take out 
shares8 to be invested in the early stages of investment and in innovative projects, particularly 
those derived from Community research. 
Secondly, the conditions within which European capital markets for innovative, high-growth 
companies (such as the New Market Federation or EASDAQ) develop must be secured, which 
means reviewing a number of legal and fiscal provisions and seeing to it that the necessary 
expertise is available. 
Thirdly, the interfaces between technological innovation and financial circles need to be 
strengthened. Support is needed for the transnational dissemination of good practice and the 
testing of new methods in this area. Also, closer links between Community research and risk 
capital should improve the exploitation of the results of the research. An information and 
guidance service on this topic will be set up for those taking part in the framework programme. 
3. THE THIRD PRIORITY IS TO GEAR RESEARCH MORE CLOSELY TO 
INNOVATION AT BOTH NATIONAL AND COMMUNITY LEVEL. 
In knowledge-based economies, the efficient systems are those which combine the ability to 
produce knowledge, the mechanisms for disseminating it as widely as possible and the aptitude 
of the individuals, companies and organisations concerned to absorb and use it. The crucial 
factor for innovation is thus the link between research (the production of knowledge), training, 
mobility, interaction (the dissemination of knowledge) and the ability of firms, particularly 
SMEs, to absorb new technologies and know-how. 
(i) At national level, several types of action are necessary, depending on the Member State; the 
Commission may give assistance where appropriate: 
• Firstly, develop a strategic foresight vision of research and of its application. 
Exercises such as,"key technologies", "Delphi" or "Foresight" can contribute to directing 
collective efforts to the sectors, areas or technologies, which are the most relevant for the future. 
Member States which do not have any experience in that area ought to consider the opportunity 
of this type of approach. 
The Commission will act to: 
- facilitating the exchange of experiences between Member states and exploiting the results of 
these exercises in order to identify relevant leads at the Community level. 
- reinforce technology watch at European level within the framework of the European Science 
and Technology Observatory, set up by the RCC's Institute for Prospective Technological 
Studies as focal point for the Member states observatories. 
8 Since June 1996, EIFs statute allows it to take such participations 
Secondly, strengthen the research carried out by industry, in both absolute and relative 
terms 
Member States are requested to draw up quantified and ambitious objectives aiming to increase 
the share on the Gross Internal Product dedicated to research, to development and to innovation, 
in particular by encouraging research undertaken by industry (in particular the one financed by 
enterprises or the one financed by governments within the limits allowed by article 92 of the 
Treaty). In Europe, the share of GDP devoted to research financed by industry, which offers 
more opportunities for exploitation, is on average 38% below that of the USA and 55% below 
that of Japan. 
Thirdly, encourage strongly the start-up of technology-based firms ("campus companies", 
spin-offs, etc.)' 
The Commission recommends that Member States step up the action they are taking in this area 
and exploit the structures which have proved effective in the field. 
As from 1997 it will organise a thorough exchange with Member States on this topic, involving 
leading players in the field. This will concentrate on measures for facilitating this spin-off 
process (covering intellectual property rights, social rights, financial arrangements, etc.) and 
national or regional promotion schemes. It will back up the dissemination of best practice 
through pilot projects involving, for example, university technology-transfer departments, the 
regional institutions concerned, venture capital companies and technology brokers. 
Fourthly, intensify the cooperation between public, university and industrial research 
The Commission recommends that Member States establish a legal and practical framework 
which will foster this cooperation by, for example: 
- providing opportunities for universities and researchers to spend some of their time 
developing companies; 
- enabling universities and public research centres to conclude exclusive contracts with 
industry for exploiting results, including through financial holdings. 
Lastly, strengthen the capacity of SMEs for absorbing new technologies and know-how, 
whatever their origin 
Substantial effort needs to be made in this area. Member States should extend the scope of 
their measures to include the transfer of technologies of international origin. Companies, 
particularly SMEs, should have easier access to expertise at the highest level, European or 
worldwide, in technological, organisational or management methods. 
At national and regional level, moreover, the drive to rationalise innovation support 
organisations, as mentioned above, needs to be accompanied by measures enabling them to 
achieve critical mass and the necessary degree of professionalism. 
The Commission will intensify activities for creating improved links between the various 
national and regional innovation-support systems. Working with the players concerned, it will 
help to professionalise or, where appropriate, certify the new professions which will need to 
emerge in this context. 
(ii) At European Union level, the Community will mobilise all of its innovation instruments 
• First, the Commission will establish within the Fifth Framework Programme a single, 
simplified horizontal framework for integrating the "innovation" and "SME" dimensions. 
Accepting that large companies have an important role to play in the Innovation process, in 
particular with smaller firms, this action should give more SMEs access to all research work 
and its results, develop technology transfer and stimulate innovation. 
- The Framework Programme approach should be an integrated approach. Research projects 
will take more systematic account of organisational, management, market, financial, legal and 
protection aspects. 
- Secondly, the methods of implementing projects and programmes will be changed. This 
means in particular: 
• the criteria for assessing proposals; 
• encouragement during the research phase to prepare for exploiting and disseminating the 
results (documentation of results, complementary studies, training schemes, licence 
preparation, finding partners, upstream consideration of the pre-standardisation dimension, 
etc.); 
• adapting to contracts, particularly to make them more flexible and to give better protection 
to the intellectual property rights of contractors where development or demonstration 
projects are concerned; 
• aiming at maximum user-friendliness for SMEs and faster procedures involving fixed 
deadlines for the various phases. 
Thirdly, the coordination of the conception and the management of these measures needs to be 
reinforced: 
• more global consistency of the actions; 
• an integrated range of services suited to the needs of the various categories of SMEs; 
• gateways between projects at different stages (research, demonstration, transfer, 
exploitation); 
• optimum use of the existing networks of assistance, with innovation, project preparation 
and the search for partners, especially with regards to SMEs. 
Lastly, the positive experience of the Research-Industry Task Forces will be put to contribution 
within the Fifth Framework Programme for Research. 
The debate on the Green Paper on Innovation and the experience gained through the Task 
Forces in the Fourth Framework Programme have demonstrated the usefulness of instruments 
which: 
better identify, together with users, researchers and industry, the technological obstacles whose 
solution is an economic and social priority in Europe; 
mobilise expertise and private or public resources, Community or national, to the maximum 
extent in order to bring large-scale targeted projects to a successful conclusion, thereby 
obtaining faster results from research effort, avoiding duplication and increasing the visibility 
and the exemplary nature of Community research. 
In consequence, it would be desirable to improve at Community level: 
the incentive character of participation in the work of Task forces, by taking innovation more 
into account as a selection criterion for projects within the Fifth framework programme; 
the efficiency of procedures by planning simultaneous or integrated calls for proposals for the 
various programmes for priority research. 
In addition, outside the framework programme, all Community instruments will be 
mobilised to support innovation: 
The increased input of the Structural Funds into innovation will be continued at both 
Community level (Article 10 of the ERDF, SME initiatives, ADAPT, LEADER II) and national 
and regional level. 
Member States and the regions concerned are requested to invest more in schemes linked to 
innovation, subject to the resources available for the current programming period and in the 
next generation of Structural Funds. 
Here, the Commission will draw on the experience gained with regional innovation strategy 
projects jointly subsidised by Article 10 of the ERDF and the Innovation programme. It will 
also stress the importance of innovation in its various initiatives. 
The European Union must make full use of the international dimension of innovation. Two-
thirds of world innovations and scientific discoveries are made outside the European Union, and 
most expanding markets are to be found outside Europe. This means, in particular: 
• closer interaction of the framework programme with the COST and EUREKA cooperation 
frameworks; 
• support for international industrial cooperation; 
• intensified international cooperation on research and development with non-Member 
countries; 
• stronger encouragement to entities in the countries concerned, through the possibilities 
offered by instruments such as TACIS, PHARE9, MEDA, etc. to search a stronger 
synergy with community research projects. 
• continued vigilance in international negotiations for aspects liable to affect European 
innovation and its outlets (such as intellectual property rights and anti-counterfeit 
measures). 
Lastly, the action plan will be fleshed out in various priority sectors or fields 
Situations vary widely according to the country, the sector and the technology. The action plan 
will therefore need to be adapted to certain fields or sectors designated as priorities. These 
might include environmental protection and sustainable development, the services sector, rural 
development, aspects related to demand and consumers, the audio-visual sector and better 
exploitation of space and dual-use technology. 
CONCLUSION 
In the three main fields identified, the Commission is putting forward those measures whose 
priority, expected impact or urgency has been confirmed by the debate. These are summarised in 
For those countires which are not applicant 
the tables below. At Community level these measures can be financed from existing or planned 
budgets. 
The main effort must nevertheless be made at local, regional or national level. The Commission 
proposes to analyse in more detail those activities which are the province of the Member States, in 
collaboration with them, in order to establish a joint reference framework and so help them identify 
the priority options and the opportunities for cooperation. 
It will take the necessary steps to ensure effective coordination of the measures deriving from 
various policies and will strengthen interaction with Member States. It invites the Member States 
to do the same. 
The Commission will draw up a detailed implementation schedule and will precisely quantify the 
costs of the measures it is proposing. On this basis it will submit the corresponding legislative and 
regulatory proposals to the Council, the European Parliament, the Economic and Social Committee 
and the Committee of the Regions. It will report regularly to the European Council on the 
implementation of the action plan, including, where necessary, proposals for any adjustments or 
additions which may prove necessary in the light of developments or in view of the specific 
contexts in which the plan is applied. 
The enthusiasm and energy demonstrated must be mobilised in order to implement this Action Plan 
and so build a more innovative, competitive and job-creating Europe. 
************************* 
The summary tables below are an integral part of this action plan. 
10 
1. FOSTERING AN INNOVATION CULTURE 
1.1 NEW ACTIONS 
1- Education and initial and further training 
Commission 
• Set up a "training and innovation" forum to exchange experience and disseminate best practice 
(1997). 
Member States and regional authorities 
• Make a critical examination of teaching programmes and methods and the training of 
instructors. 
• Adapt the content of initial training to develop, from the earliest age, creativity, spirit of 
enterprise, etc. 
2- Mobility of students, research workers and teachers 
Commission 
- Put forward a wide horizontal programme aiming to enhancing human potential in the Fifth 
Framework Programme for Research (first half of 1997); 
• Stimulate transnational "industrial PhDs" (placement of research workers/engineers in firms) 
(pilot action in 1997). 
• Make Community aids to mobility more flexible (5th FPRD). 
Member States 
• Adopt measures for the temporary secondment of research workers to firms, especially SMEs. 
• Ensure that the conditions actually exist for mobility between research and enterprises 
(assessment of qualifications, career development). 
3- Innovation and management of enterprises 
Commission 
• Promote organisational innovation through Community instruments at its disposal (framework 
programme, Structural Funds and training programmes, etc.) (1997/98). 
• Introduce a benchmarking system at the European level (pilot project in 1997). 
4-Public authorities 
Commission 
• Develop exchanges of experience on the promotion and dissemination of innovation in 
government offices and public services. Conference in 1997 and publication of a green paper in 
1998. 
• Compile a permanent trend chart of innovation performance and policies in Europe (to be put in 
place in 1997). 
Member States 
• Develop initiatives to provide information and increase awareness among politicians and senior 
officials of what is at stake with innovation. 
11 
1. FOSTERING AN INNOVATION CULTURE 
1.2 CURRENT ACTIONS FOR IMPROVING THE INNOVATION ENVIRONMENT IN 
EUROPE 
1- Education and initial and further training 
Commission 
• Implement the proposals of the White Paper on Education and Training (especially Erasmus 
apprenticeships, European apprenticeship statute). 
• Pilot projects to encourage links between schools ("Learning in the information society" 
initiative). 
Member State and regional authorities 
• Develop sandwich course training, especially at university level. 
• Encourage the effective knowledge of several Community languages. 
2- Mobility of research workers, students and teachers 
Commission and Member States 
• Launch a debate on the Green Paper with regard to the mobility of research workers, students 
and teachers, and implement proven routes of action; examine and possibly implement the 
recommendations of the Veil Group. 
3- Raising public awareness and involving those concerned 
Commission 
• Develop initiatives to disseminate best practice in this field. 
Member States 
• Foster a scientific and technical culture and awareness of the beneficial effects of innovation. 
Commission and Member States 
• Involve enterprises, the public and their representatives in discussing major technological 
options. 
• Develop measures to increase the involvement of employees, users or consumers and to 
facilitate the acceptance of innovation. 
4- Innovation and management of enterprises 
Member States 
• Increase training activities for innovation management. 
• Foster the development of the practice of "benchmarking" among enterprises. 
5- Public authorities 
Member States 
• Stimulate competition in public invitations to tender and the use of performance standards. 
12 
2 ESTABLISHING A FRAMEWORK CONDUCIVE TO INNOVATION 
2.1 NEW ACTIONS 
1- Protection of intellectual and industrial property 
Commission and Member States 
• Launch of a Green Paper on the issue of the Community patent (September 1997) 
Commission 
• Set up a service of assistance on intellectual property (IPR-Helpline) for Community research 
(1997). 
Member States 
• Set up instruments to inform and help SMEs and universities in the event of disputes. 
2- Administrative simplification 
Commission 
• Introduce a pilot mechanism for the ex-ante assessment of the impact of regulations on 
innovation (end 1997). 
• Implement operational procedures for coordinating Community innovation support networks 
(1997). 
Member States 
• Set objectives and a precise timetable for simplifying business start-up formalities. 
Member States and local authorities 
• Speed up the rationalisation of innovation support activities and bodies: 
3- Financing 
Commission 
• Reinforce EIF action in favour of innovation and cooperation between the EIB and the 
Structural Funds (beginning of 1997). 
• Improve the links between Community research and risk capital, particularly in order to provide 
information and guidance services for those taking part in the framework programme and for 
investors (mid-1997). 
• Develop the exchange of experience and the dissemination of best practice between Member 
states and operators (1997 and 1998). 
Member States 
• Introduce the framework conditions for stock exchanges for growth enterprises. 
• Make greater efforts to direct "patient" capital towards risk investment. 
4- Taxation 
Commission 
• Consider a communication on "taxation and innovation" (possibly in 1997). 
Member States 
• Promote fiscal and accounting treatment more favourable to intangible investment. 
13 
2. ESTABLISHING A FRAMEWORK CONDUCIVE TO INNOVATION 
2.2 CURRENT ACTIONS FOR IMPROVING THE INNOVATION ENVIRONMENT IN 
EUROPE 
1- Competition 
Commission 
• Follow-up to the Green Paper on merger monitoring, extending the field of application of unified 
European monitoring of mergers and harmonising the treatment of joint structural enterprises. 
• Publish a green paper on the application of the rules of competition to vertical agreements. 
• Continue the dialogue with the competition authorities in the United States, to allow the bringing 
together of the definitions of relevant market, particularly in agreements with a high technology 
content. 
2- Protection of intellectual and industrial property 
Commission and Member States 
• Complete the harmonisation of legislations to take account of developments linked to the 
technologies of the information society and supplement legislations on design protection and 
employees' inventions. 
Commission 
• Strengthen anti-counterfeit measures. 
Member States 
• Ensure the adoption of the proposal for a directive on biotechnological inventions. 
• Support the efforts of the European Patent Office to reduce filing costs. 
• Transpose the European directives on the protection of intellectual property into national legislation 
by the end of 1996. 
• Develop training in this field. 
• Make enterprises aware of the competitive benefits of protection. 
3- Administrative simplification 
Commission 
• Introduce into the work of the Committee for the improvement and simplification of the business 
environment a special action on innovation. 
• Accord the required importance to innovation when simplifying administration (e.g. in the choice of 
sector under the SLIM project). 
Member States 
• Provide enterprises with one-stop shops for innovation questions. 
4- Legal and regulatory environment 
Company law 
Council 
• Speedy adoption of a European Company Statute. 
Commission 
• Continue to encourage the use of European Economic Interest Groupings, especially by providing 
better information. 
• Study the feasibility of creating a joint undertaking statute (Article 130N of the Treaty). 
14 
3. GEARING RESEARCH TO INNOVATION 
3.1 NEW ACTIONS 
1.National measures and their Community back-up 
(i) Strengthening research carried out by companies 
Member States 
• formulate quantified objectives and put in place the appropriate incentive policies. 
(ii) Start-up of technology-based companies 
Commission 
• organise thorough exchanges with Member States and players in the field on legal, fiscal and 
promotional measures (1997). 
• launch pilot schemes for disseminating good practice, involving universities, risk capital, industry and 
regional institutions (1998). 
(iii) Intensified cooperation between research, universities and companies 
Member States 
• set up a legal framework to facilitate exploitation by research organisations, including business start-up. 
(iv) Strengthening the ability of SMEs to absorb technologies and know-how 
Member States 
- support transnational technology transfer. 
Commission and Member States 
• better links between national and regional innovation systems at Community level. 
(v) Demonstration of effective approaches to innovation 
Commission 
- set up a new generation of demonstration projects integrating the technical, organisational and social 
aspects of innovation (5th FPRD). 
2.Incorporating the Innovation and SME dimensions into the Framework Programme for 
Research 
Commission 
• adapt the implementation procedures for the Framework Programme (project selection criteria, faster 
project Selection, more demonstration schemes, legal framework for contracts) (4th and 5th FP). 
• strengthen the consultation and coordination role of the research-industry Task Forces. 
- develop a programme "Innovate and giving SMEs greater involvement and providing an integrated 
approach to the goal of innovation through the legal and financial treatment of projects, particularly 
those supporting SMEs (5th FPRD). 
3.Mobilise other Community instruments 
Commission and Member States 
• prepare to flesh out the action plan in various priority sectors and fields of technology. 
15 
3. GEARING RESEARCH TO INNOVATION 
3.2 CURRENT ACTIONS FOR IMPROVING THE INNOVATION ENVIRONMENT IN 
EUROPE 
1. National measures and Community back-up 
(i) A strategic vision of research and development 
Member States 
• consultations on long-term technology forecasting (Foresight). 
Commission 
• facilitate the exchange of experience and the exploitation of results on a Community scale; 
• stimulate the technology watch (network of national organisations around the European Science and 
Technology Observatory (ESTO)). 
(ii) Start-up of technology-based companies 
Member States 
• stronger promotion of "campus companies" and spin-offs. 
(iii) Intensified cooperation between research, universities and industry 
Member States 
• pursue and strengthen action in this area. 
Commission 
• analyse the obstacles and disseminate good practice; 
• support national efforts to improve the management of research and technology organisations and 
their international benchmarking; 
• organise sectoral and inter-sectoral technology platforms. 
(iv) Strengthening the ability of SMEs to absorb new technologies and knowledge 
Member States 
• improve the efficiency and transparency of support structures. 
Commission 
• help professionalise the innovation support services; 
• set up a scheme for promoting the absorption and use of technologies (first-use support, access to 
technologies not developed in the European Union, internationalisation of young technology-based 
firms, regional projects). 
(v) Demonstration of effective approaches to innovation 
Member States and Commission 
• make better use of specialists in the social and behavioural sciences in technology projects. 
2. Incorporating the Innovation and SME dimensions into the Framework Programme 
(see New Actions) 
3. Mobilise other Community instruments 
Commission and Member States 
• direct more of the Structural Funds towards innovation; 
• make the most of the international dimension of innovation. 
16 

ACTION PLAN FOR INNOVATION IN EUROPE 
ANNEX 1 
Description of actions 
/?** 
CONTENTS 
INTRODUCTION Ill 
1. Consultation iii 
2. Reactions iii 
3. A first Action Plan iv 
A - FOSTERING AN INNOVATION CULTURE: 6 
1. Education and training 6 
2. Encouraging mobility 8 
3. Raising public awareness and involving the operators concerned 8 
4. Business management 9 
5. Public authorities 10 
(i) Innovation in the public sector 10 
(ii) Public contracts 11 
(iii) Analysis of innovation policies and systems 11 
B. ESTABLISHING A FAVOURABLE FRAMEWORK 14 
1. Legal, administrative and regulatory environment 14 
(i) Competition 14 
(ii) Protection of intellectual and industrial property 15 
(iii) Administrative simplification 18 
(iv) Company law 20 
(v) Standards 21 
2. Financial environment 21 
(i) Financing 21 
(ii) Statutory deductions 23 
C- GEARING RESEARCH TO INNOVATION 27 
1. National measures with Community support 28 
(i) A long-term strategic approach to research 28 
(ii) Strengthening research carried out by industry 29 
(iii) Start-up of technology-based companies 29 
(iv) Closer cooperation between public research, universities and industry 30 
(v) Expansion of SMEs' capacity for absorbing new technologies and 
know-how 30 
(vi) Demonstration of effective approaches to innovation 31 
2. Incorporating the innovation and SME dimensions into the Framework 
Programme 32 
3. Mobilising other Community instruments 35 
(i) Gearing the Structural Funds more towards innovation 35 
(ii) Making the most of the international dimension of innovation 36 
(iii) Fleshing out the action plan in various priority sectors and fields of 
technology .....37 
CONCLUSION: 41 
S!% 
In order to fight unemployment. Europe must secure 
a growth stronger and better centred on the domains 
of the future (Confidence pact for employment, June 
1996). 
INTRODUCTION 
1. Consultation 
The Green Paper on Innovation1 prompted a very important reaction and there was a wide-ranging 
debate, which extended beyond the borders of the European Economic Area. More than 40 000 
copies were circulated. The Green Paper was studied by the various Community institutions, by the 
governments and by those directly concerned. 
The opinions of the European Parliament, the Economic and Social Committee and the Committee of 
the Regions2 were favourable and emphasised in particular the importance of technology 
dissemination, the principle of subsidiarity, the role the economic operators and the social aspect of 
innovation. 
In all the Member States, together with Norway and Iceland, conferences to discuss the Green Paper 
were organised at the Commission's initiative and with the support of the national authorities. They 
brought together more than 5 000 people: industrialists and representatives of research centres, 
financial institutions, government departments, innovation bodies, trade unions, universities, etc. 
More than 300 detailed contributions were also submitted to the Commission, mainly from 
enterprises or their representative organisations3. 
Lastly, in addition to the comments from field players directly involved, official responses4 were 
received from most of the Member States, as well as from Norway and Hungary. 
There was thus an unprecedented response to the need for innovation, viewed not as an end in itself 
but as an essential instrument for attaining fundamental social objectives and lasting and sustainable 
growth, as well as for improving the competitiveness of enterprises and employment. At the Florence 
Summit, the European council has clearly indicated that "the fight for employment must remain the 
main priority for the Union and its Member States" and within the framework of a strategy to achieve 
that objective "has requested the Commission to establish a plan of action for the measures to be 
undertaken in the field of innovation"5. As a matter of fact, new markets are developing at a steady 
pace in the domains of information, health, food processing and culture. A demand for new products 
and services is emerging. The ability to innovate in order to satisfy these new needs is a precondition 
for the future creation of jobs in Europe. This ability is also necessary in order to maintain 
competitiveness and employment in the other sectors of activity. 
2. Reactions 
The views that were expressed naturally differ, but there was agreement on: 
• the importance and relevance of the discussion, 
• the integrated approach proposed by the Commission (ranging over the questions of training, 
competition, legal and administrative framework, venture capital, etc.), 
• the broad lines of the diagnosis. 
1 "Green Paper on Innovation", COM(95)688 final. 
2 See Annex 2c. 
3 The annexed document 2a summarises these contributions. 
4 See Annex 2b. 
5 Florence Summit, conclusions of the Presidency, 21 and 22 June 1996, SN/300/96. 
yff 
• the urgent need for action that is coordinated at each separate level of intervention as well as 
between levels. 
A number of salient points emerged from the debate: 
• the diversity of national, regional and sectoral circumstances. A uniform Community-wide approach 
which would disregard these specific features would inevitably fail. To act for innovation is in first 
instance the responsibility of citizens, of industry and of national, regional and locaj authorities. 
Strict application of the principle of subsidiarity is essential; 
• value added at Community level, especially for: 
- drawing up and ensuring compliance with the rules of the game (framework conditions for 
competition, the internal market, industrial property rights, etc.); 
- providing the overall view needed for formulating options on a common basis; 
- exchanging experiences and disseminating best practice; 
- providing the necessary impetus and political signals by means of Community policies and 
instruments (research, structural funds, internal markets, SMEs, etc.); 
• the areas in which priority actions should be launched, at both national and Community levels. 
The main aims are to: 
- foster in the economy and society a genuine innovation culture, favouring creativeness, 
willingness to take risks and experimentation. This requires, in particular, long-term actions 
in the areas of education and further training, closer links between the worlds of education 
and the economy and promoting awareness among those involved in the public and private 
sectors; 
- adapt the administrative, legal, regulatory and financial environment, so that it is permanently 
more conducive to innovation. In addition to streamlining administrative procedures, at 
Community as well as at national and regional levels, this involves in particular rules on 
competition and intellectual property to encourage innovation and legal arrangements to 
facilitate the setting-up of international cooperation, but also the creation of an environment 
which is more conducive to innovation financing and to the reinforcement of the financial 
structure and own funds of innovative enterprises. 
- maintain - but also and more usually to focus and consolidate - collective research efforts, 
especially among enterprises, as well as their ability to access and benefit from new 
technologies and knowledge, from whatever source. This involves better anticipation of 
requirements, technical changes and markets, together with closer collaboration between 
research and industry and a special emphasis on the dissemination of technologies and skills, 
especially among SMEs and the least favoured regions. 
• the importance of the international dimension, which is both a fact and a necessity6. Promoting 
innovation in Europe does not mean turning inward. Action needs to be taken against an open 
and dynamic background of international cooperation and competition. 
3. A first Action Plan 
The Green Paper on Innovation suggested various options. For the sake of effectiveness, this First 
Action Plan outlines a limited number of priority actions to be launched speedily at Community level 
Two-thirds of the world's advances in science and technology are made outside the European Union. The 
expanding markets are outside Europe, primarily in south-east Asia, with its three billion inhabitants and an 
overall income which in a few years will exceed that of the United States and the European Union 
combined. Flows of capital, information and technology are global. Direct investment abroad soared from 
68 billion dollars in 1960 to 1 650 billion in 1993, excluding intra-Cbmmunity investment. Strategic 
alliances, especially in the RTD field, undermine the ability of governments to identify the beneficiaries of 
their technology policies. Close on 40% of world trade is conducted within enterprises 
to 
and incorporates actions which are in progress or which have been announced since the publication of 
the Green Paper and which were identified there as vital for the process of innovation. 
This is a first action plan, with the Commission both continuing to study some of the options 
indicated in the Green Paper, the implementation of which requires a long-term approach, and also 
proposing with regard to activities which are the responsibility of the Member States and applicant 
countries to conduct a more thoroughgoing analysis in collaboration with them, with the aim of 
establishing at a second stage a common framework of reference which can help to identify the 
priority options, as well as opportunities for cooperation. With regard to the Community level, at this 
stage the only measures considered are those for which the operating method could be described and 
which can be inserted in the known budgetary framework, without incurring any new expenditure but 
through the possible reallocation of available resources. 
Innovation involves a variety of operators and implies an integrated approach with intensive 
interaction. This means that the proposed measures are inevitably multiple and varied. For the sake 
of clarity, they have been classified by order of decreasing chronology and likely effect in accordance 
into the following three objectives: 
• fostering an innovation culture in the economy and society; 
• establishing a framework conducive to innovation; 
• linking research and innovation more effectively. 
This initial plan outlines a general framework for action at Community and Member State level, and 
also for applicant countries7. It is intended to be the first stage in a lasting mobilisation of the 
Community, the governments and those in the field for the benefit of innovation. 
At Community level, the new actions will be launched immediately. Current actions will be speeded 
up or consolidated, if need be. Reflexion will continue and the plan will be applied, where 
appropriate, in the thematic fields and the industrial or service sectors where it seems suitable. 
At national level, the Commission will carry out further analysis, in collaboration with the Member 
States and applicant countries, in order to establish a common frame of reference and to help them 
identify priority options and cooperation opportunities. 
7 In compliance with the conclusions of the Council meetings in Copenhagen and Essen, Community 
programmes or similar initiatives will be opened to allow the applicant countries to participate as part of the 
strategy for preparing for accession. These countries are therefore concerned by a large number of the 
points dealt with in the action plan. These are in particular the proposals on education and training, the 
mobility of students and research workers, public awareness, as well as the involvement of these countries 
in the Fifth Framework Programme's targeted socio-economic research. Furthermore, account must be 
taken of these countries with regard to the implementation of the recommendations on competition and 
improving the legal, administrative and regulatory environment. They should also be in a position to 
benefit fully from trans-European capital markets. The concrete arrangements for their involvement in the 
Fifth Framework Programme are still to be worked out. It is nevertheless likely that they will emphasise 
university-industry links and measures for innovation among SMEs. 
A special debate will be initiated with these countries as part of the structural dialogue on the way in which 
they can be integrated in the action plan. 
? / 
A - FOSTERING AN INNOVATION CULTURE: 
1.1 Innovation depends on creativeness, a sense of initiative and enterprise, a willingness to take 
calculated risks and a readiness to cope with mistakes and accept social, geographical or 
professional mobility. But innovation also needs other skills: the ability to anticipate needs, 
careful organisation, and a capacity for meeting deadlines and controlling costs . Innovation 
increasingly relies on a wide range of interaction, which means that skills in information 
collection and processing and personal and social communication skills are also needed. A 
favourable culture is essential. 
The United States, with its frontier mentality and the idea of the melting pot, thrives on risk, 
social and geographical mobility and straightforward relations. In Japan, culture and society 
emphasise excellence, steady improvement and organisation. As for Europe, it has grown up 
around social systems which differ widely but where, today, as a rule, risk-taking is shunned in 
favour of seeking security and stability. 
Changing the culture and the mentality of a people cannot be achieved by legislation or by any 
short-term measures. Means of action exist, however. First and foremost come education and 
training. The mobility of people facilitates the spread of knowledge and the flow of ideas. 
Participative approaches make it easier for the groups concerned to adhere. Actions to inform 
and raise awareness, in particular through the use of new media, together with the dissemination 
of new methods of organising and managing business and government, are also needed. 
/. Education and training 
1.2. Initial education needs to concentrate on imparting the skills that are needed to produce and 
implement innovation. Technical education and vocational training must not be neglected8. But 
the acquisition of a basic educational grounding is essential to facilitate ongoing adaptation to 
the new skills that innovation requires. 
It is wrong to think that training at the start of life will always suffice. Training is a necessity 
throughout life. It comes up against particular problems in SMEs (especially the limited 
available time of managers and employees) which need to be dealt with through novel 
solutions9, possibly involving distance learning and multimedia techniques. The third 
multiannual programme for SMEs proposes pilot projects to help find new approaches in this 
area10. 
There is also a need to bring education and business closer together, especially by means of 
sandwich courses, so that apart from helping young people enter the job market it is possible to 
prepare for the new skills or qualifications that are needed and to adapt training to these needs. 
Alongside its education and training programmes, especially Leonardo da Vinci and Socrates, 
the European Union contributes to these aims through the European Social Fund under various 
Community objectives and initiatives such as ADAPT and EMPLOI. 
10 "In 1996 Europe had 4.7 scientists and engineers for every thousand inhabitants, compared with 7.4 in 
the United States and 8 in Japan. Also, the combined total of scientists and engineers in China, India 
and Indonesia is now the same as the figure for the European Union" ("Inventing tomorrow: Europe's 
research at the service of its people", p.6). COM(96)332 final, 10/7/96 
The joint Council and Commission report on employment (SI(95)1000) stresses the importance of 
adapting training programmes to the needs of SMEs and providing incentives for SMEs that want to 
invest in training. 
Proposal for a Council Decision on a Third Multiannual Programme for Small and Medium-sized 
Enterprises (SMEs) in the European Union (1997-2000), COM(96)98. 
21 
The Member States and regional or local authorities are invited to reinforce their action in these 
fields and, in particular, to: 
- take a critical look11 at the programmes and methods of education, especially their ability to 
stimulate critical sense, lateral thinking, creativeness, interpersonal communication, 
teamwork, willingness to experiment, skill in finding and using information, learning ability, 
entrepreneurial spirit; 
- analyse the changes that apparently need to be made to the training of trainers; 
- extend training, if need be, to include economics and management, company formation, 
protection of intellectual property, design and marketing, especially in science and technical 
courses; 
- develop sandwich courses at the level of higher education and decompartmentalise 
disciplines; 
- encourage the effective command of several Community languages12: 
- stimulate real cooperation between education and business; 
- develop long-term partnerships between enterprises and training bodies; 
- encourage broader access for enterprises to the best vocational training facilities in Europe. 
The Commission will continue to implement the proposals contained in the White Paper on 
Education and Training adopted in November 1995. 
It will promote the exchange of experience and the dissemination of good practice in these area 
among the Member States and with the social partners by introducing a permanent "training and 
innovation" forum. 
1.3. The Commission therefore plans to introduce from 1997 an "Erasmus of apprenticeship" and to 
draw up, with the governments and the social partners, a European apprentice statute. 
Furthermore, as part of the follow-up to the European Year of Life-long Learning, it will draw 
up proposals13 seeking to facilitate, at European level, the valorisation and accreditation of skills 
throughout life. 
1.4. Lastly, with the "Learning in the information society" initiative, it will set out to coordinate 
existing instruments and actions (education and training, research, trans-European 
telecommunications networks, Structural Funds) to link schools throughout Europe using 
existing national initiatives, promote the development of the software and content that are 
11 As in Denmark, where the Ministry of Education recently considered means of fostering an innovation 
culture and entrepreneurial spirit from primary and secondary education. At Community level, the 
matter has already been considered in the White Paper on Education and Training. (COM(95)590 
final, 29/11/95) 
12 A survey of 927 SMEs in 1995 as part of the Euromanagement action revealed that the language 
barrier was a decisive factor for 67% of the SMEs that were eligible for Community R&D 
programmes but were afraid to go ahead. 
13 On the basis of current evaluation of the Member States' transposition of the Council recommendation 
of June 30, 1993 (OJ L181,23/7/93) on access to continuing education. 
o u 
needed and to assist the training of teams to provide instruction in the use of these new 
technologies. 
2. Encouraging mobility 
1.5. The mobility of students, research workers, engineers or scientists from one country or industrial 
sector to another, as from education or research to industry, encourages the transfer of 
technology and the dissemination of know-how. In spite of efforts to promote it, such as the 
programme for the training and mobility of researchers, this kind of mobility between research 
centres, universities and industry is all too often hampered by practical or cultural barriers. 
Similarly, as technologies are becoming more and more "trans-sectoral", mobility between 
branches of industry needs to be made easier. 
The Green Paper entitled "Education-Training-Research: Barriers to Transnational Mobility", 
published at the end of 199614, points out that the barriers to mobility arise mainly in the areas of 
right of residence, social security, taxation and the lack of a legal framework at European level, 
including for apprentices15. 
At Community level, the Commission will introduce the priority measures to encourage the 
mobility of students, teachers, engineers and researchers that have emerged from the debate on 
this Green Paper. 
In setting priorities for the Fifth Framework Programme for Research, the Commission is 
proposing a wide programme with the main objective of enhancing human potential. It should in 
particular boost the efforts to arrange for transnational secondments of young researchers and 
engineers to businesses, in particular SMEs, to help with their innovation or technology transfer 
projects. It will take all the necessary steps to make the mobility aid programmes of the 
Community more flexible, particularly by: 
- making exchanges of staff one of the eligible cost headings in long-term cooperation projects 
on RTD and the use of large-scale equipment16; 
- linking mobility support measures and research projects, enabling their beneficiaries to 
combine them in a single innovation project; 
- making age limits and authorised secondment periods more flexible, in order to enlarge the 
potential pool of beneficiaries (older researchers, SME staff). 
At national level, it will recommend establishing effective "interoperability" of the systems for 
assessing career development or qualifications (e.g. the introduction, in the systems for 
assessing government research workers, of a positive recognition of periods spent in industry, 
on industrial projects or for patents filed, as well as the adoption by the enterprises or bodies 
concerned of arrangements, in the event of external mobility, to ensure seamless careers). 
3. Raising public awareness and involving the operators concerned 
1.6. Innovation can develop and spread only if it is accepted by society. It is stimulated by the 
existence of demanding consumers who accept novelty. Innovation is not restricted to 
advances in scientific knowledge and technical performance. Innovation in forms of social 
14 COM (96) 462. 
15 The Commission has asked a high-level group, chaired by Mrs Veil, to examine the barriers that still 
hamper the free circulation of workers and individuals. On the basis of its findings, the grotfp will 
draw up proposals to remove the legislative, administrative and practical barriers that have been noted. 
16 Short-term scientific missions under COST are one example of short-term staff exchange. 
IL 
organisation and communication need to go hand-in-hand with technical or business 
innovation. This is often more difficult, since it affects the attitudes, values and positions of the 
social groups involved. There needs to be a special effort in this area. 
The need for and beneficial effect of change, in the broadest sense, need to be widely discussed. 
Mechanisms whereby enterprises, the public and their representatives can be involved in 
discussing the major technological options and arrangements for the involvement of employees, 
users or consumers pave the way for the acceptance and ultimate success of innovation. 
There are many initiatives and successes at national level in these fields. The exchange of 
experience between Member States needs to be stimulated, and also where appropriate the 
linking in networks at European level of successful ventures, if this can help with their 
dissemination and improvement. 
1.7 The Commission will make a coordinated effort to use its various resources to identify best 
practice and disseminate the methods facilitating the involvement of socio-economic operators 
in managing innovation projects likely to have major social impact. 
1.8. It will encourage greater cooperation among national and regional bodies responsible for the 
promotion of science and technology and innovation and will disseminate the best practice, as 
part of the INFO 2000 programme, especially via the national focal points network (MIDAS). 
1.9. It will study the feasibility of greater cooperation among European television companies, 
especially as part of the Media programme, with a view to using successful national experience 
as a basis for promoting programmes for the popularisation of science and technology, as well 
as ways of reflecting scientific work realistically in audio-visual fiction productions. 
4. Business management 
1.10. Involvement in the management of enterprises is not of course the responsibility of public 
authorities. However, these authorities can and must create an environment conducive to the 
ongoing improvement of business management and organisation. The rapid spread of 
information and communication technologies will contribute greatly to these adaptations and 
must be actively supported. 
Innovation is primarily the responsibility of enterprises, and managing change is one of the 
main challenges they have to cope with. But change is occurring with increasing speed, 
affecting markets and techniques and the related methods of design, production and 
organisation. If they are going to remain competitive, enterprises need to be able to absorb new 
techniques. But it is just as important for them to modernise their structure and organisation 
and reshape the methods, roles and responsibilities of each in order to innovate. They have to 
become not only places of permanent apprenticeship but also learning enterprises. 
"Agile" enterprises that are ready to react speedily to changing circumstances, to forge 
cooperative links with a wide variety of external partners (other enterprises, universities, 
consultants, centres of excellence) and thereby to constitute flexible sets of competence are 
likely to be the best suited to the demands of innovation. 
Innovation is also prompted by changes in the regulatory environment, the availability of 
resources and forms of financing and communication. Enterprises need to keep an eye on 
changes in these fields and keep a technological, economic and business "watch". 
ts 
Emulation of other enterprises, especially by means of benchmarking, is an effective way of 
spreading good practice in these fields. There needs to be more widespread use of management 
techniques17 at the most suitable level, especially among SMEs. 
1.11. For the benefit of enterprises the Commission will launch transnational pilot actions for the 
networking of certain sectors or technologies (see section C3(iii) below). These actions should 
be designed to explore best practice in the management and training fields. The results of these 
projects will be disseminated throughout the Union. A European Guide to Industrial Innovation 
will offer manufacturers a method of self-assessment for their strengths and weaknesses in the 
field of innovation, together with a guide to the relevant help and advisory services. 
1.12. In its communication on benchmarking the competitiveness of European industry18, the 
Commission pointed to the usefulness of this move for improving the competitiveness of 
enterprises. 
The Member States are invited to encourage the development of this practice which allows 
enterprises to track their progress against the best performers in a number of key areas of their 
activity (similar to the R&D "scoreboard" in the United Kingdom or to the company visits as 
part of the TOP schemes in Germany and Spain, the "Références" programme in France or the 
Inside UK Enterprise scheme in the United Kingdom). 
For its part, the Commission will support the linking in a European network of the various 
schemes at national level. It will introduce a Europe-wide "benchmarking" system, especially 
in the field of quality. 
1.13. The Member States are called on to reinforce their actions for the training of business managers 
and the social partners in innovation management. 
The Commission will support training schemes for innovation management, especially through 
the development of European networks of business schools and their cooperation with industry 
and SME support bodies. These actions will be especially designed to encourage thought about 
new forms of business organisation and their impact on the support structures and SMEs. 
As part of the operations under Objectives 2 and 4 of the Community ADAPT and SME 
initiatives, the Commission will also increase its support for the training of business managers, 
in particular of SMEs, in new management methods and the training for employees that is 
needed to introduce these new methods in enterprises. 
5. Public authorities 
(i) Innovation in the public sector 
1.14. Government policy-makers are paying more and more attention to innovation and technology. 
But their idea of what is at stake and of the potential of technology19, as well as of the details of 
action on innovation, remains generally sketchy. 
17 These methods include quality management concurrent engineering, flexible or "smart" production 
methods, integrated logistics management, teamwork and the empowerment and involvement of 
employees. 
18 "Benchmarking the competitiveness of European industry", COM(96) 463 final, 9 October 1996. 
19 The proportion of political leaders in the countries of the European Union with a scientific or technical 
background is low; recent surveys among some governments have, confirmed that few of their 
members were skilled users of computers or the Internet. 
10 
26 
The Member States are invited to take steps to ensure that politicians, senior officials, regional 
authorities, project and fund managers are informed and made aware of what is at stake with 
innovation and technology. 
1.15 Public spending is close to and even exceeds 50% of gross domestic product in several 
countries of the Union. In this context, improving performance and spreading innovation in the 
public sector and in government can have a significant direct economic impact. This should 
also contribute greatly to improving the environment in which enterprises operate, as 
emphasised by the Advisory Group on Competitiveness (Ciampi Group) in its second report. 
From 1997 the Commission, in conjunction with the European Institute for Public 
Administration and on the basis of current work, will undertake a series of discussions and 
exchanges of experience on the promotion and dissemination of innovation in government and 
public services. A conference on this topic will be organised in 1997, and its findings could 
result in the publication of a green paper at the beginning of 1998. 
1.16. The Commission will continue its action under the "Information Society" initiative designed to 
encourage innovative approaches in the public sector. 
(ii) Public contracts 
1.17. More active competition in the case of public invitations to tender is desirable, as it can 
stimulate innovation. Several provisions in European legislation on public contracts allow for 
derogation or special rules of application, especially in the special sectors (water, energy, etc.), if 
a tender relates to innovative products or manufacturing processes; full use should be made of 
these possibilities. Furthermore, the use of performance standards can make it possible to arrive 
at innovative technical solutions while ensuring proper competition. 
(iii) Analysis of innovation policies and systems 
1.18. There is a need for careful monitoring and constant analysis of innovation processes, their results 
and their impact at the socio-economic level. The comparative study of innovation systems, 
policies and infrastructure in the developed nations, and especially in the European Union, needs 
to be continued and exchanges of information and experience among the Member States 
encouraged. It is also important to boost the development, coordinated by the Commission, of a 
harmonised statistical information system including regular surveys on innovation in industry, 
services and SMEs, while ensuring that there is no extra administrative burden on enterprises. 
The Commission will reinforce its system of collecting and analysing information on research 
and innovation. It will draw up a permanent management trend chart for innovation policy and 
performance in Europe, with comparisons with the rest of the world. It will produce and 
distribute widely a regular report on innovation in the Union, based on national and international 
studies and analyses in this field. 
11 
2> 
1. FOSTERING AN INNOVATION CULTURE 
1.1 NEW ACTIONS 
1- Education and initial and further training 
Commission 
• Set up a "training and innovation" forum to exchange experience and disseminate best practice 
(1997). 
Member States and regional authorities 
• Make a critical examination of teaching programmes and methods and the training of instructors. 
• Adapt the content of initial training to develop, from the earliest age, creativity, spirit of 
enterprise, etc. 
2- Mobility of students, research workers and teachers 
Commission 
• Put forward a wide programme aiming to enhance human potential in the Fifth Framework 
Programme for Research (first half of 1997); 
• Stimulate transnational "industrial PhDs" (placement of research workers/engineers in firms) 
(pilot action in 1997). 
• Make Community aids to mobility more flexible (5th FPRD). 
Member States 
• Adopt measures for the temporary secondment of research workers to firms, especially SMEs. 
• Ensure that the conditions actually exist for mobility between research and enterprises 
(assessment of qualifications, career development). 
3- Innovation and management of enterprises 
Commission 
• Promote organisational innovation through Community instruments at its disposal (framework 
programme, Structural Funds and training programmes, etc.) (1997/98) 
• Introduce a benchmarking system at the European level, (pilot project in 1997) 
4- Public authorities 
Commission 
• Develop exchanges of experience on the promotion and dissemination of innovation in 
government offices and public services. Conference in 1997 and publication of a green paper in 
1998. 
• Compile a permanent trend chart of innovation performance and policies in Europe (to be put in 
place in 1997). 
Member States 
• Develop initiatives to provide information and increase awareness among politicians and senior 
officials of what is at stake with innovation. 
12 
it 
1. FOSTERING AN INNOVATION CULTURE 
1.2 CURRENT ACTIONS FOR IMPROVING THE INNOVATION ENVIRONMENT IN 
EUROPE 
1- Education and initial and further training 
Commission 
• Implement the proposals of the White Paper on Education and Training (especially Erasmus 
apprenticeships, European apprenticeship statute). 
• Pilot projects to encourage links between schools ("Learning in the information society" 
initiative). 
Member State and regional authorities 
• Develop sandwich course training, especially at university level. 
• Encourage the effective knowledge of several Community languages. 
2- Mobility of research workers, students and teachers 
Commission and Member States 
• Launch a debate on the Green Paper with regard to the mobility of research workers, students and 
teachers, and implement proven routes of action; examine and possibly implement the 
recommendations of the Veil Group. 
3- Raising public awareness and involving those concerned 
Commission 
• Develop initiatives to disseminate best practice in this field. 
Member States 
• Foster a scientific and technical culture and awareness of the beneficial effects of innovation. 
Commission and Member States 
• Involve enterprises, the public and their representatives in discussing major technological 
options. 
• Develop measures to increase the involvement of employees, users or consumers and to facilitate 
the acceptance of innovation. 
4- Innovation and management of enterprises 
Member States 
• Increase training activities for innovation management. 
• Foster the development of the practice of "benchmarking" among enterprises. 
5- Public authorities 
Member States 
• Stimulate competition in public invitations to tender and the use of performance standards. 
13 
Xf 
B. ESTABLISHING A FAVOURABLE FRAMEWORK 
2.1. The establishment of an environment conducive to innovation needs, in the first instance, 
competition to function properly. The next task is to introduce an effective system at an 
acceptable cost for the protection of intellectual and industrial property. This also involves 
constant efforts to lighten the burdens on enterprises, especially the administrative formalities, 
while maintaining the protection enjoyed by consumers with regard to health, safety and the 
environment. Lastly, innovators need to have easy access to the funding they require for the 
various stages of their projects, and that their fiscal treatment should be conducive to 
innovation. 
I. Legal, administrative and regulatory environment 
(i) Competition 
2.2. Competition is one of the driving forces behind innovation. It is stimulated by efforts to 
combat monopolies and to open and liberalise markets. The Commission has always devoted 
special attention to innovation in its competition policy. The Commission will therefore 
continue to ensure that competition functions properly in the internal market and 
internationally. It will continue its action for the liberalisation and deregulation of sectors of 
the European economy that have hitherto been protected or too strictly compartmentalised. 
2.3 The Commission, in applying competition law, acknowledges the economic importance of a 
properly functioning patent system. It guarantees holders, by means of individual exemptions 
as well as exemptions linked to technology transfer agreements, maximum freedom to exploit 
their patents without any unwarranted distortion of competition. Recently20, it adopted a new 
regulation exempting certain categories of technology transfer agreements, thereby 
streamlining the rules that had previously governed such agreements21. 
In the past the Commission has adopted similar regulations exempting specialisation 
agreements22 and research and development agreements23. The aim is to avoid an individual 
notification system and case-by-case consideration, while ensuring legal security. 
Since these two exemptions will expire on 31 December 1997, the Commission will revise them, 
after a green paper that may be published, in order to update and adapt them to the current 
circumstances. The rules on State aids in the field of research and development (new 
arrangements of February 1996) set out to ensure equal treatment for the various operators in 
this area. 
Following the debate on the revision of the regulation on the monitoring of concentrations, the 
Commission is putting to the Member States a proposal to expand the scope of European 
merger supervision in order to cover a larger number of operations of Community interest and 
to avoid enterprises having to give simultaneous notification of cooperation agreements to a 
large number of national authorities that apply very different procedures, deadlines and 
physical criteria. Mergers of Community interest would thus be supervised using uniform 
criteria by the Commission acting as sole European antitrust authority. The Commission is also-
20 Regulation No 240/96 of 31 January 1996. (OJ L31,9/2/96) 
21 The new regulation in fact abolishes the discrepancies between the regulations on patent licensing and 
on the communication of know-how, eliminates or shifts to the appeals procedure (the period of which 
is reduced from six to four months) several clauses which in these regulations prevented the 
exemption of certain categories and provides for new lawful clauses to ensure greater contractual 
freedom for the parties. 
22 Regulation No 417/85 of 19 December 1984 (OJ L53,22/2/85) 
23 Regulation No 418/85 of 19 December 1984 (OJ L53,22/2/85) 
14 
3* 
proposing to harmonise the treatment of structural joint enterprises. Lastly, the Commission is 
currently completing a green paper on rules for vertical agreements (exclusive distribution 
agreements, etc.) in competition law. 
With regard to new high-technology products, where markets increasingly overlap, exchanges 
of information between the various bodies supervising competition are extremely useful. The 
Commission will therefore continue its dialogue with the competition authorities in.the United 
States, to allow approximation of the definitions of the relevant market, especially concerning 
agreements with a high technology input. 
(ii) Protection of intellectual and industrial property 
• Reviewing the overall structure 
2.4. The overall structure of the European system for the protection of industrial property is far too 
complex. A "Community" solution has been adopted for trade marks and designs (Office for 
Harmonisation in the Internal Market in Alicante), as well as for plant breeding (Community 
Plant Variety Office, provisionally located in Brussels), where incidentally the first protection 
rights were recently granted. An international convention has been used, however, for the 
European (or Community) patent. The Community can negotiate international agreements 
(TRIPS agreements under the GATT, for example) and it can issue regulatory texts, but there is 
a risk that they will have no effect on the convention for the European patent. 
In the European Union there are currently three patent systems, only two of which are fully 
operational. There are national patents and also European patents, which are the result of the 
Munich Convention of 1973 and are administered by the European Patent Office in Munich. 
The European patent is not a uniform industrial property right but it allows protection to be 
acquired in as many European countries as the applicant wants. The advantage of this system is 
its great flexibility, but there are some drawbacks because of the complexity and cost24. Also, 
there is no provision in the system for any court at European level with jurisdiction in patent 
disputes, which means that there is a possibility that courts in the Member States may make 
different rulings. 
The overall structure of the patent system should be completed by the entry into force of the 
third system of protection, the Community patent, stemming from the Luxembourg Convention 
of 1975. This convention, which was amended in 1989. has still not entered into force because 
of delays in ratifying it by the twelve Member States that signed it. 
The patent system in Europe was set up by means of international conventions. The reason for 
this is that these initiatives were taken at a time when the Community's responsibility in this 
field had not yet been established. This time is now over, and the Court of Justice has on 
numerous occasions acknowledged the Community's power to act with regard to patents, if this 
helps to attain an objective of the Treaty (free movement of goods or establishment of 
undistorted competition). 
According to the views expressed by users of the system, the European patent is generally 
satisfactory, although there are two major changes that need to be quickly introduced. The first 
concerns the patentability of biotechnological inventions, where current uncertainty should be 
remedied by the speedy adoption of the new draft directive submitted by the Commission at the 
end of 1995. The second change involves cutting the cost of European patents, and this could be 
achieved by revising the system of fees charged by the European Patent Office and by adapting 
24 The total cost of filing and maintaining a patent in eight Member States is about USD 120 000 
(compared with USD 13 000 for the whole of the United States). 
15 
V 
the procedures for translating European patents. Both of these ideas are currently being 
considered. 
As for the Community patent, the question is whether in its current form it still satisfies the 
objectives that were outlined at that time or whether it would be better to adapt it to progress in 
the construction of Europe and to the needs of users. In its current form the Luxembourg 
Convention applies only to the twelve Member States that signed it in 1989. The enlargement of 
the Community that has since occurred, and further enlargement in the future, require the 
Convention to be adapted to the new circumstances. 
The Commission will prepare in 1997 a green paper on the issue of the Community patent. It is 
foreseen that this text will consider: 
* whether the Luxembourg agreement on the Community patent should be converted to a legal 
instrument under the Treaty. 
* whether national patent convention should be further harmonised at Community level. 
* whether bridges should be built between the European and the Community patent system. 
* whether it is possible to adapt the system of taxes and duties in a way that corresponds to the 
services provided and is not a barrier to the protection of innovation. 
* Special case of biotechnology and the information society 
2.5 In advanced technology sectors, such as the information society or biotechnology, there are 
considerable economic imperatives involved25. Speed of action or response is vital. There is a 
need to achieve speedy harmonisation at world level of the rules of protection relating to new 
technologies if we want to maintain the ability for relevant research in Europe and stimulate the 
creation of new enterprises and the marketing of results. 
The codecision procedure on the new draft directive on the legal protection of biotechnological 
inventions needs to be completed as quickly as possible. For its part, the Commission will play 
an active part in the consideration which is now getting under way with regard to the revision of 
Article 27 of the TRIPS agreement and the follow-up to the Convention on Biodiversity. It will 
ensure, in these discussions, that European industry does not have to cope with conditions that 
are less favourable than its competitors' because of restrictive approaches to intellectual 
property rights. 
Article 27(1) of this agreement allows all inventions, products or processes in every 
technological field to be patented. It follows that, in theory, data processing programs and 
software inventions can be patented. On this basis the United States patent office has decided 
in some cases to issue patents for data processing programs for which copyright, which is usual, 
seemed inadequate, which would be impossible in Europe. This situation will become even 
more complicated with the development of multimedia software and the advent of the 
information society. 
With regard to the patentability of software and the repercussions of information society 
technologies on industrial property rights, the Commission recently started looking at the 
matter together with those concerned with a view, if necessary, to supplementing the 
harmonisation of the Member States' legislation. The Community has already adopted five 
directives since 1991 on copyright and related rights. In order to meet the new challenges 
related to the development of the information society, the Commission has published a Green 
25 Products that have been on the market for two years or less account for 78% of income in the data 
processing industry. The biotechnology market, valued at less than ECU 10 billion in 1996, should be 
close to ECU 80 billion by the year 2000 (" Inventing tomorrow: Europe's research at the service of 
its people"). 
16 
37 
Paper on Copyright and Related Rights in the Information Society, which prompted wide-
ranging discussion among those involved. The Commission has just adopted a Communication 
to the Council and to the European Parliament concerning the follow up of the Green Paper; 
this one identifies four priority issues for which legislative proposals will be submitted soon 
(rights of reproduction, right of comunication to the public, legal protection of the integrity of 
technical systems and rights of distribution. In addition, it is proper to give special attention to 
the questions linked to the application of the rules of responsibility within the global 
environment of the Information society. 
• Other harmonisation methods 
2.6. In view of the major economic importance of designs and models and of the differences among 
the Member States with regard to design protection, the Commission will continue its efforts 
with a view to harmonising national laws26 and to create a body of Community law in that 
field27. In the field of employees' inventions it will launch a study on the need for and possible 
content of harmonised national laws and will start a discussion of this topic with those 
concerned. Lastly, in the light of comments on its green paper on Utility Models it will make a 
decision on the advisability of draft Community legislation in this field. 
2.7. As the Commission has pointed out in its Confidence Pact for Employment, the potential of the 
internal market will not be attained unless the relevant directives are transposed into national 
legislation and actually applied. In particular, in the key area of intellectual property the 
situation gives rise to concern, since only one directive has been transposed by all the Member 
States. The Commission asks the Member States in question to assume their responsibilities 
and to submit to their respective parliaments the required draft legislation by the end of 199628. 
• Reducing costs 
2.8. In the field of patents, there are supplementary proposals designed to solve the tricky problem 
of translation, as well as alignment wiuYthe systems of rival countries with regard to eligibility 
and costs and help in combating counterfeiting. 
The Commission supports the efforts of the European Patent Office to cut the costs of filing and 
maintaining patents, such as the review of current requirements concerning translation (along 
the lines of the 1975 Convention on the Community Patent, which requires translations only 
for the summary and in the event of protection being invoked) and will study whether to 
introduce incentive measures for SMEs, individual inventors and universities ("small entity 
fee"). 
With a view to a better allocation of the resources relating to fees for European patents, the 
member States are called on to examine the current system of apportioning the fees for 
maintaining European patents (half of which at present are paid to the European Patent Office 
while the other half are retained by the contracting States), in the light of the following 
questions: (1) is it appropriate that taxes to maintain the validity of European patents should 
finance part of the national patent systems? (2)should the present distribution ratio be kept as it 
stands or should it be modified? (3) within the framework of promoting innovation, doesn't this 
system entail negative effects, in particular when a large part of these resources is directly 
allocated to the general budget of the State and not to tasks directly related to innovation? 
26 Modified directive proposal of the European Parliament and of the Council relative to the legal 
protection of designs. OJ n° CI42 of 14 May 1996, page 7. 
27 Regulation proposal of the European Parliament and of the Council on community designs and 
models. COM(93)342 final. OJ N°C29 
28 Action for Employment in Europe: A Confidence Pact, CSE (96) 1 final, 05.06.1996. 
17 
1} 
• Promoting protection 
2.9. Actions to make enterprises aware of the range of possibilities provided by the system for 
protection and training are needed. The Commission, in the Fifth Framework Programme, will 
reinforce its activities in this field, especially: 
• exchanging best practice among the Member States (especially the national patent offices) 
and with the EPO concerning the dissemination of "patent" information, and especially ways 
of making it accessible and comprehensible to SMEs; 
• checking the novelty of research proposals29, and the introduction of an information service 
for those involved in the framework programme (" IPR-Help Line"). 
2.10. The Member States are also invited to develop, with full regard for the international dimension, 
their training activities on protection30. 
• Combating counterfeiting 
2.11. Counterfeiting imposes a significant cost31. It therefore constitutes a special threat to SMEs, 
which are often reluctant to take legal action, especially in a third country. 
The Member States are invited to set up a support system for for SMEs and universities in the 
event of disputes and, where appropriate, loan procedures designed to finance the cost of a 
patent and the introduction of insurance schemes to protect enterprises, especially SMEs, 
against infringements of their intellectual and industrial property rights. 
The Commission has ordered a study on the potential role of the Community, by way of 
supplementing national action, in combating counterfeiting and will start consultation on the 
basis of the results. 
(iii) Administrative simplification 
2.12. "Administrative and regulatory constraints cost far too much in Europe. Some studies suggest 
the cost comes to more than ECU 100 billion a year32, particularly disadvantaging SMEs. Both 
the Community's approach and the work of national authorities in this area need to be 
reviewed."33 
A step in this direction has been taken with the establishment of the Molitor Group34 and the 
creation by the Commission, as part of its integrated programme for SMEs and craft industries, 
of the Committee on the Improvement and Simplification of the Business Environment. This 
committee provides the framework for the exchange of best practice in this area between the 
Member States and the Community. The Commission will put a proposal to the committee for 
a special programme on innovation. 
29 The QUICK SCAN system pilot project under the Innovation programme, and in conjunction with the 
EPO, shows that the costs involved come to less than 0.5% of the total costs of the project, and that it 
affects some 5% of the projects, which have to be redefined, reorganised or rejected for the lack of 
novelty. 
30 Like Germany, which created 100 teaching posts in higher technical education during the first half of 
1996. 
31 In 1994 industry in Europe spent about ECU 2 billion on legal or out-of-court proceedings to protect 
patents. 
32 A survey of 8 000 SMEs by the French Ministry of Industry in 1995-1996 revealed that the average 
annual cost of completing official forms was equivalent to one person working full-time for three 
months. 
33 Action for Employment in Europe: A Confidence Pact, CSE (96) 1 final, p.8. 
18 
Ih 
• Business start-ups 
The formalities relating to business start-ups, together with all the other compulsory procedures, 
are generally more complicated and take longer for European enterprises than for their 
competitors elsewhere. This has an effect on their dynamism, especially with regard to 
competitiveness. 
The studies and investigations that have been conducted have shown that some Member States 
had already started a sustained effort towards administrative simplification. In some countries of 
the European Union, the formalities for starting up an enterprise have thus been reduced to a 
single form at a one stop shop . Other countries that have not adopted measures of this kind are 
called on to follow this example and to simplify the formalities for setting up new enterprises. 
(Measures for stimulating business start-ups are also referred to in points B2 (i) Financing and 
C3 (iii) Start-up of technology-based companies.) 
• Analysis of the impact of rules on innovation 
2.13. In the area of the internal market, the Commission recently launched a pilot project designed to 
simplify legislation in four test sectors: the SLIM initiative (Simpler Legislation for the Internal 
Market), a testing ground for more ambitious actions. If the pilot project is a success, the 
Commission will take account, when new sectors are being considered as part of the SLIM 
initiative, of the possible impact of the legislation on innovation and will ask the SLIM teams 
involved to attach the required importance to this aspect during their work. 
As has been done in some Member States, the Commission will test an ex-ante mechanism for 
assessing the impact of regulations on innovation35 as part of the general guidelines for 
legislative policy36. 
A much more uniform application of Community rules by national administrations also needs 
to be encouraged. This requires greater cooperation among the relevant authorities in the 
Member States, in line with the Council Resolution of 8 July 199637. The Commission will 
develop its support actions, especially with regard to the exchanging and joint training of 
national officials, similar to the Mattheus and Karolus programmes. 
• One stop shops to support innovation 
2.14 The readiness of public authorities and private operators to provide support services to SMEs 
has often resulted in a variety of advice, information and assistance services at national or 
regional level, the relevance and intelligibility of which are no longer obvious to the recipients. 
34 Comments of the Commission on the report of the Independent Experts Group on Legislative and 
Administrative Simplification, SEC(95) 2121 final, 29 November. 
35 Similar to the German Federal Ministry of Economic Affairs, which indicated in a report entitled "The 
future of the German industrial site", adopted in 1993, that "the German Government will ensure 
that existing or planned legislative and administrative provisions will be examined to see 
whether they represent an obstacle to innovation and to avoid, in the future, other provisions 
with the same effect**. A working party on the "deregulation of research and innovation" was 
formed 18 months ago within the Ministry of Research, Technology and Education. It reviews laws 
and regulations, etc., from the angle of research and innovation. It is advised by external experts from 
many disciplines. The comments are sent to the relevant ministry, which is required to reply. 
Experience so far has shown that 70-80% of complaints are unfounded or can be easily resolved by 
properly applying existing rules. Another important problem that was identified is the multiplication 
of legal texts on the same subject but starting from different angles. The question is here is one of 
coordination. 
36 SEC (95) 2255/7 
37 OJ C224, 1/8/96 
19 
The Member States where there has been no initiative along these lines are invited to provide 
SMEs with networks of one stop shops operating at local or regional level which can be 
contacted by enterprises and others involved in innovation for information on innovation 
support questions and to make the best possible use of the opportunities offered by new 
information and communication technologies in these fields. 
At Community level the Commission will disseminate good practice in this field and implement 
greater coordination among the various networks for research and innovation support that are its 
responsibility. It will also ensure better contact between these networks and the national bodies 
performing the same functions in the Member States, in order to draw on existing bodies with 
acknowledged expertise. It will promote the EuroInfoCentres as the initial contact points for 
SMEs that do not yet have links with other networks38. 
(iv) Company law 
Initiatives are needed concerning the European company statute, the promotion of EEIGs and the 
joint undertaking or private company statutes. 
* European company statute 
2.15. The adoption of the European company statute would make it possible to lift certain obstacles to 
innovation that stem from the application of fifteen different legal systems and would help to 
attract the private capital that is needed for major innovation projects39. Enterprises in Europe 
would benefit from a legal framework adapted to the internal market and world competition. 
In November 1995 the Commission initiated a wide-ranging consultation of the institutions and 
social partners at Community level concerning the Communication of 14 November 199540 on 
informing and consulting workers. 
The primary aim of this Communication is to make the Community framework in this area more 
consistent and complete and to facilitate the adoption of the European Company Statute which 
has been with the Council for many years, and consequently some other proposals for statutes 
such as those relating to the European cooperative society, the European association and the 
European mutual society, as well as the proposal for the tenth directive on cross-border mergers. 
The Commission has set up a group of high-level experts responsible for presenting proposals 
which could resolve the impasse affecting these particular matters. 
• Other types of company 
2.16. The European Economic Interest Grouping (EEIG) is an instrument for cooperation among 
enterprises which has already proved its worth for launching and managing innovative projects. 
The Commission will encourage better dissemination of information on EEIGs. 
2.17* In the search for a structure that will make genuine legal integration a possibility, in addition to 
the cooperation permitted by EEIGs, the Commission is examining the feasibility of a joint 
undertaking statute based on Article 130N of the Treaty, which provides for the possibility of 
38 Proposal for a Council decision on a Third Multiannual Programme for Small and Medium-sized 
Enterprises (SMEs) in the European Union (1997-2000), COM(96) 98 final, 20 March 1996. 
39 The Ciampi Group estimated mat the lack of such a framework involves enterprises in an extra cost of 
ECU 30 billion every year. At the conclusion of the Florence Summit the European Council asked 
for negotiations to be speeded up with a view to its speedy adoption. 
40 COM(95)547 final, 26/11/95 
20 
the Community's setting up "joint undertakings or any other structure necessary for the 
efficient execution of Community research, technological development and demonstration 
programmes". 
2.18» It also seems useful to encourage the creation at national level of a simplified private company 
statute. A flexible legal instrument of this kind would help the formation of small enterprises 
and companies with private share ownership, which are often innovative, without affecting the 
safeguards which company law must continue to provide for companies with wide share 
ownership. 
(v) Standards 
2.19. The creation of an environment for standards that is conducive to innovation instead of 
hampering it requires the promotion of performance standards and voluntary agreements, better 
links between the formulation of standards and scientific and technical development 
(perinormative research), together with greater awareness among those who devise and use 
standards, especially SMEs. 
The Member States (and, in their areas of responsibility, the European standardisation 
committees) are invited to encourage the adoption of voluntary standards between 
manufacturers and suppliers and, whenever possible in the technical rules and standards they 
issue and for public contracts, opt for performance standards, thereby ensuring greater freedom 
for designers of new products and stimulating competition among suppliers. 
They are also invited to increase their actions for informing and raising the awareness of 
enterprises, and also of industrial designers and research laboratories working on standards, and 
to promote the involvement of industry and SMEs in standardisation bodies and committees. 
The Commission intends in its Fifth Framework Programme to devote more attention to the 
links between research projects for the development of new technologies and standardisation 
activities (especially prestandards), as well as to the application of scientific knowledge to 
measuring performance (standardisation-oriented research and metrology). The Joint Research 
Centre (JRC) will have a special role to play in this latter area. 
The Commission will catalyse initiatives of market players for the deployment of new 
standards applications through experimentation, validation and demonstration (pilot) projects. 
The Commission will promote cross fertilisation between sectors by stimulating the 
assimilation of standardised products, services and best practices from highly innovative 
sectors into more classical industrial sectors. 
2. Financial environment 
(i) Financing 
2.20. The question of financing is one of the major priorities that emerged from the discussion 
prompted by the Green Paper on Innovation. In this field a lot depends on private initiative or 
on the national or regional dimension. The aims to be pursued include: 
• developing a trans-European capital market for innovative enterprises, serving as the 
counterpart of the NASDAQ in the United States, as well as encouraging additional 
initiatives at national level; 
21 
•>> 
• encouraging investment in equity finance, in particular through venture capital, especially for 
new enterprises (start-up) and high-growth innovative enterprises which are a major source of 
new jobs41; 
• improving the interfaces between those involved in innovation (including participants in 
Community research programmes) and the world of finance42. 
For its part, the Commission has to ensure that the right framework conditions are in place, i.e. 
especially the effective introduction of the single market and compliance with the rules of 
competition. It also plans to work on ensuring that best practice is disseminated and facilitating 
their adoption, primarily through support for pilot actions but also by making full use of the 
Structural Funds and other existing instruments such as the EIB or the European Investment 
Fund. 
2.21 • Development of capital markets for high growth enterprises 
The Commission will see to it that the framework conditions are put in place for the 
development and proper operation in Europe of stock markets for "growth enterprises". 
In particular, the Member States need to complete the transposition into national law of the 
directives on financial services and information on enterprises, cooperation among national 
supervisory bodies needs to be increased, and the remaining legislative or regulatory obstacles 
need to be removed. There is also a need to create an environment conducive to their proper 
operation in terms of: 
- informing enterprises, and preparing applicants (the multiannual programme for SMEs 
provides for the part use of the Euromanagement initiative); 
- practices for dissemination of information on enterprises; 
- training of required specialists (analysts); 
- electronic communication systems, etc. 
A study which is being conducted as part of the Innovation programme will allow to specify the 
actions to be undertaken. 
• Investing in equity for innovation 
2.22. The Commission will disseminate existing best practice to direct long term savings (pension 
funds, life insurance, save-as-you-earn schemes, "business angels") towards investment 
involving risk. 
2.23. It will endeavour to consolidate the development of venture capital in Europe by encouraging 
the establishment of a favourable fiscal and regulatory framework in the Union and by 
favouring the establishment and use by the profession of performance statistics which could be 
evaluated in an objective and comparable manner at international level, especially with a view 
to facilitating the raising of new capital among institutional investors. 
41 In 1994 ECU 310 million was invested by venture capital in Europe in start-up projects, representing 
5.7% of the value of all such investment that year. In the United States the corresponding figure was 
37%. The proportion of venture capital invested in technology-based projects in Europe in 1993 was 
17% in terms of value. In the United States the figure was about 80%. 
42 In order to encourage investment in high-technology projects, EUREKA prompted in 1995 the 
"Interlaken Declaration", which was signed by banks in many EUREKA countries as well as by the 
EIB. This declaration represents an indication of goodwill with the aim of examining, in a favourable 
light but without any guarantee of acceptance, applications for risk, investment from EUREKA 
projects. 
22 
3* 
2.24. Also, as indicated in the Confidence Pact for Employment, the Commission plans to strengthen 
cooperation between the EIB and the Structural Funds in order to develop financial instruments 
for the benefit of innovative enterprises and projects in the least favoured regions. 
2.25. In collaboration with the EIF, the Commission will study the possibility of introducing 
mechanisms to support venture capital investment which have already proved successful, in 
particular in the United States (loans based on the amount of funds raised), and whose leverage 
effect on investors' anticipated returns minimises the impact of their fiscal treatment. 
2.26. The Commission will endeavour to strengthen the actions of the European Investment Fund in 
favour of innovation by introducing a pilot mechanism to encourage venture capital funds in 
which the EIF will have holdings to invest43 in the early stages of investment and innovative 
projects. 
• Developing interfaces between investors and innovators 
2.27. Using existing bodies, the Commission will develop the exchange of experience and the 
dissemination of best practice between public or private national and regional operators44. As 
part of the Innovation programme, it will provide support for transnational cooperation for the 
joint testing of new methods (e.g. technology rating, use of patents as guarantee, etc.). 
2.28 The Commission will endeavour to improve access to private finance (venture capital) for those 
involved in Community research programmes (and Eureka). This could involve the setting up of 
an "Innovation Financing Help-Desk" designed to inform potential investors about current 
projects and their potential (e.g. access to Eurotech Data) and to help the enterprises and 
researchers in question to have easier access to private capital, especially at national level (e.g. 
information on sources and terms of access to venture capital, investors' expectations, etc.). 
(ii) Statutory deductions 
2.29. The Commission has already issued a number of recommendations and communications in 
fields affecting the fiscal treatment of innovation. Two examples are the communication on the 
fiscal environment of small and medium-sized enterprises (SMEs) and the recommendation 
concerning the taxation of SMEs45. 
The Commission has previously stressed the need for a global approach to the question of 
statutory deductions (direct taxes, indirect taxes, social security contributions) in the wider 
context of Community policies. 
The European Council in Florence46 asked the Council for a report on the development of tax 
systems within the Union that took into account the need to create a fiscal environment which 
stimulates enterprises and the creation of jobs. This work will include possible actions to 
improve the fiscal environment of enterprises, which would also help innovation. There is a 
need, for example, to review the fiscal treatment of cross-border payments, interest and 
charges, since the Council has not been able to reach agreement on a Community solution. 
Given that intangible investment has a strong work content (research, training), it is much more 
affected than tangible investment by the steady rise in labour-related tax and social security 
43 Since June 1996, the statute of the FEI allows it to take such participations 
44 The first topics may be the stimulation (of networks) of Business Angels and their involvement in 
innovation, securitisation, hybrid financing (public-private) or the assessment of technical risk by 
financial institutions. 
45 94/390/EC,dd 25/05/94, OJL177dd 09/07/94. 
46 See conclusions of the Presidency, Florence 21 and 22 Juin 1996, SN/300/96 
23 
3 
contributions. This structural trend, which has been detrimental to employment, ought to be 
reversed, as was pointed out in the White Paper entitled "Growth, Competitiveness, 
Employment". 
In 1997 the Commission will consider a communication on taxation and innovation which will 
take into account the effects of the trend in the structure of statutory deductions and which will 
propose to the Member States a number of "good practices" in this area, based on an analysis of 
national circumstances in the light of work under way in the Member States and the OECD. 
230. The Commission will analyse means of promoting a fiscal and accounting treatment of 
intangible investment, especially in training47, that is conducive to competitiveness. 
47 The White Paper on Education and Training recommends equal treatment for tangible investment and 
investment in training. 
24 
to? 
2. ESTABLISHING A FRAMEWORK CONDUCIVE TO INNOVATION 
2.1 NEW ACTIONS 
1- Protection of intellectual and industrial property 
Commission and Member States 
• Launch of a Green Paper on the issue of the Community patent (September 1997) 
Commission 
• Set up a service of assistance on intellectual property (IPR-Helpline) for Community research 
(1997) 
Member States 
Set up instruments to inform and help SMEs and universities in the event of disputes. 
2- Administrative simplification 
Commission 
• Introduce a pilot mechanism for the ex-ante assessment of the impact of regulations on 
innovation (end 1997). 
• Implement operational procedures for coordinating Community innovation support networks 
(1997) 
Member States 
• Set objectives and a precise timetable for simplifying business start-up formalities. 
Member States and local authorities 
• Speed up the rationalisation of innovation support activities and bodies. 
3- Financing 
Commission 
• Reinforce EIF action in favour of innovation and cooperation between the EIB and the Structural 
Funds (beginning of 1997). 
• Improve the links between Community research and risk capital, particularly through the 
provision of information and guidance services for those taking part in the framework 
programme and for investors (mid-1997). 
• Develop the exchange of experience and the dissemination of best practice between Member 
states and operators (1997 and 1998). 
Member States 
• Introduce the framework conditions for stock exchanges for growth enterprises. 
• Make greater efforts to direct "patient" capital towards risk investment. 
4- Taxation 
Commission 
• Consider a communication on "taxation and innovation" (possibly in 1997). 
Member States 
- Promote fiscal and accounting treatment more favourable to intangible investment. 
25 
h 
2. ESTABLISHING A FRAMEWORK CONDUCIVE TO INNOVATION 
2.2 CURRENT ACTIONS FOR IMPROVING THE INNOVATION ENVIRONMENT IN 
EUROPE 
1- Competition 
Commission 
• FoIlowTup to the Green Paper on merger monitoring, extending the field of application of unified 
European monitoring of mergers and harmonising the treatment of joint structural enterprises. 
• Publish a green paper on the application of the rules of competition to vertical agreements. 
• Continue the dialogue with the competition authorities in the United States, to allow the bringing 
together of the definitions of relevant market particularly in agreements with a high technology 
content. 
2- Protection of intellectual and industrial property 
Commission and Member States 
• Complete the harmonisation of legislations to take account of developments linked to the technologies 
of the information society and supplement legislations on design protection and employees' 
inventions. 
Commission 
• Strengthen anti-counterfeit measures. 
Member States 
• Ensure the adoption of the proposal for a directive on biotechnological inventions. 
• Support the efforts of the European Patent Office to reduce filing costs. 
• Transpose the European directives on the protection of intellectual property into national legislation by 
the end of 1996. 
• Develop training in this field. 
• Make enterprises aware of the competitive benefits of protection. 
3- Administrative simplification 
Commission 
• Introduce into the work of the Committee for the improvement and simplification of the business 
environment a special action on innovation. 
• Accord the required importance to innovation when simplifying administration (e.g. in the choice of 
sector under the SLIM project). 
Member States 
• Provide enterprises with one-stop shops for innovation questions. 
4- I^gal and regulatory environment 
Company law 
Council 
• Speedy adoption of a European Company Statute. 
Commission 
• Continue to encourage the use of European Economic Interest Groupings, especially by providing 
better information. 
• Study the feasibility of creating a joint undertaking statute (Article 130N of the Treaty). 
26 
h\ 
C- GEARING RESEARCH TO INNOVATION 
3.1. European firms have more difficulty than their competitors in turning the fruits of research into 
innovative products. The wide variety of situations in Europe means that this is not always true 
to the same extent, of course, but a number of indicators show that the efforts made so far have 
been inadequate48. 
3.2. Decision-makers and taxpayers regard an increase in research input as justifiable in a period of 
cuts in public expenditure49 and when businesses are striving to become competitive, if its 
advantages and spin-offs for society (health research, environmental protection, energy savings, 
etc.) and for new products, processes or services are clearly perceived. 
Of course, research has the further objective of pushing back the boundaries of knowledge 
without necessarily bringing immediate practical benefits for industrial applications. Both basic 
and longer-term research are preparations for the future, but such work may also produce spin­
offs in terms of immediate industrial applications. It therefore deserves to be pursued, 
particularly at national level, where most money is spent on it, but also at Community level in 
certain cases. 
In knowledge-based economies, the efficient systems are those which combine the ability to 
produce knowledge, the mechanisms for disseminating it as widely as possible and the aptitude 
of the individuals, companies and organisations concerned to absorb and use it. The crucial 
factor for innovation is thus the link between research (the production of knowledge), training, 
mobility, interaction (the dissemination of knowledge) and the ability of firms, particularly 
SMEs, to absorb new technologies and know-how. 
48 The document "The Competitiveness of European Industry" (COM(96) 463/3) is clear in its diagnosis: 
"Research and development represents another significant form of intangible investment for which 
European performance is insufficient. In spite of maintaining an advanced science base, total European 
spending on R&D at 1.9% of GDP is up to one-third lower than that of the United States (2.5%) and 
Japan (3.0%). Research undertaken and financed by industry itself is an area for which the European 
lag with the United States and Japan remains particularly large (1% of GDP compared with 1.6% and 
2.2% respectively). 
Europe has not been using its advanced base in science and technology to the best advantage and 
indeed the European research base does appear to be less market-oriented than that of its major 
competitors. Product development makes up less than half of R&D spending in Germany and France 
compared with over 60% in the United States and Japan. In addition, fewer human resources are 
devoted to R&D. Scientific research personnel represent only 0.47% of the labour force, compared to 
0.74% in the United States and 0.80% in Japan. 
Between 1984 and 1993, the European Union lost share in patents, the principal method of protecting 
intellectual property, for all sectors except aerospace and transport equipment. In terms of the total 
number of patents, however, these two sectors remain quite minor. In chemicals, the loss in share 
remained limited. The most significant loss took place in electronics, a sector in which R&D is highly 
intensive and which exerts considerable influence on innovation in the rest of industry through 
technology embedded in investment goods". 
49 At the conclusion of its meeting in Florence the European Council asked Member States to strengthen 
their efforts to re-balance their budgets in the light of the general principles already identified, 
particularly with a view to reducing expenditure rather than increasing revenue, to restructure their 
expenditure selectively so as to promote intangible investment in human capital and research 
and development, innovation and the infrastructures essential to competitiveness: SN/300/96. 
27 
** 
3.3. This requires a series of specific, essentially national measures which the Community can 
support by disseminating good practice, establishing gateways between national innovation 
systems and taking similar or complementary measures at Union level. 
The second series of measures is concerned with the architecture and methods of the Framework 
Programme, the aim being to meet the needs of industry and society more closely and to 
integrate the innovation and SME dimensions fully, particularly through the development of the 
Task Force system as a coordination mechanism. 
Lastly, the Community will see to it that other policies and instruments, particularly the 
Structural Funds and international cooperation schemes, are properly mobilised to this end. 
I. National measures with Community support 
3.4. There are huge differences between national contexts, and all initiatives taken will need to be 
tailored to the situation in the country concerned. A number of general recommendations can 
nevertheless be applied according to the needs of each innovation system. They concern: 
(i) • a long-term strategic approach to research; 
(ii) • strengthening of research by industry, in both absolute and relative terms; 
(iii) «start-up of technology-based companies; 
(iv) «closer cooperation between public, university and industrial research; 
(v) • expansion of the capacity of SMEs for absorbing new technologies and know-how; 
(vi) •demonstration of effective approaches to innovation. 
(i) A long-term strategic approach to research 
3.5. Europe needs to develop a long-term strategic approach to research and its applications which is 
targeted more closely at growth sectors of the market (including services) and at relevant gaps in 
national markets50. Initiatives of the "Key Technologies", "Delphi" and "Foresight" variety may 
help direct collective effort towards those sectors, disciplines or technologies which will be most 
crucial in the future. Their forte lies in their ability to foster broad-based discussion of potential 
technology options, to generate industry/research/public-sector/training/financing and other 
networks and to spark off interdisciplinary and inter-sectoral thinking. 
The Commission's role will be to: 
- facilitate exchanges of experience between Member States in this sector; 
- exploit the results of these initiatives to identify suitable pathways on a Community scale; 
- strengthen technology watch activities at European level within the European Science and 
Technology Observatory (ESTO), set up by the Institute for Prospective Technological 
Studies of the JRC as a focal point for Member States' observatories. 
The Commission invites Member States which have no experience in this area to consider 
pursuing this type of long-term approach (it will, if necessary, make a financial contribution 
from the Structural Funds). 
50 The expected growth in the services sector has better prospects for job creation than manufacturing 
industry, for example. The innovation process in mis sector is very different from that of more 
traditional sectors. 
28 
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The Commission will also set up a working party to examine the types of - and means of 
administering - research and technology transfer programmes best suited to the needs of firms in 
the services sector, based on the experience gained through specific programmes which are 
already aimed directly at services (e.g. telematics, transport) and through the Leonardo training 
projects. 
(ii) Strengthening research carried out by industry 
3.6. The share of GDP devoted to research financed by industry varies widely from one country to the 
next: some are already above the level of our competitors, while others still have a long way to 
go. The total for Europe is 38% below that of the USA and 55% below that of Japan. Good 
practice, already fairly widespread but requiring strengthening in certain regions, includes: 
- involving industry in defining research programmes and, where appropriate, in assessing 
proposals; 
- increased contract activities of public research centres and universities (some of their 
resources must come from industrial contracts, obtained through competition); 
- generalised cooperative research programmes (of the COST or EUREKA variety), requiring a 
minimum participation from businesses; 
- institutional mechanisms or suitable tax incentives. 
Member States are requested to draw up quantified and ambitious objectives aiming to increase 
the share on the Gross Internal Product dedicated to research, to development and to innovation, 
in particular by encouraging research undertaken by industry (in particular the one financed by 
enterprises or the one financed by governments within the limits allowed by article 92 of the 
Treaty). 
(iii) Start-up of technology-based companies 
3.7 Actions for encouraging researchers and engineers to start up technology-based companies, 
whether within universities ("campus companies")51, located in science parks or as spin-offs 
from large firms, need to be intensified. 
Member States are invited to step up the action they are taking in this area, subject to the rules 
governing State aid and with emphasis on indirect measures, by exploiting existing structures 
which have been proved to work, such as the European Community Business and Innovation 
Centres (EC-BICs). 
The Commission meanwhile will begin in early 1997 to organise, as part of the Innovation 
Programme, a more thorough exchange with Member States on the best practice in this domain, 
involving leading players in the field. This exchange will concentrate on measures for 
facilitating the spread of such practice (covering intellectual property rights, social rights, 
financial arrangements, etc.) and national or regional promotion schemes. 
51 Numerous empirical studies have demonstrated the economic impact of mis type of company, 
particularly where innovation dissemination is concerned (Storey, 1996), and the added value of 
public support for their start-up (Mustar, 1995). 
29 
•f 
It will support the dissemination of best practice through pilot projects involving, for example, 
university technology-transfer departments and the regional institutions concerned (local 
authorities, chambers of commerce etc.), risk capital companies and technology brokers. 
(iv) Closer cooperation between public research, universities and industry 
3.8 This type of cooperation needs to be intensified at national and regional level and geared more 
effectively towards innovation, start-up of new companies and. more generally, the transfer and 
dissemination of knowledge by: 
- closer links between research with training, by anticipating the needs of the productive 
sector; 
- opportunities for universities and researchers to spend some of their time developing a 
company; 
- a legal instrument enabling university staff and public research centres to conclude exclusive 
contracts with industry for exploiting results (already practised in several countries), or by 
taking equity participation; 
- encouraging research and technology organisations to introduce management and assessment 
parameters taking these aspects into account and to develop international benchmarking 
practices; 
- stimulating dialogue between the producers and users of technology (such as sectoral and 
inter-sectoral forums, technology clubs, etc.). 
The Commission will continue to analyse the existing barriers and the factors conducive to this 
cooperation and will disseminate the results to interested circles on a wide scale. 
It will support the efforts made at national, regional and professional level to improve the 
management of research and technology centres to gear them up for innovation and will organise 
transnational sectoral or trans-sectoral forums with the aim of setting up specific cooperation 
schemes, and will ensure that they are professionally organised and managed. 
The aim of these forums will be to foster dialogue with industrial and research circles and 
between representatives of industry themselves on technological and organisational challenges 
requiring a response on a European scale via the framework programme or other mechanisms. 
The forums might constitute a basis for exchanges of best practice amongst firms and sectors of 
activity. If the mechanisms enable key pilot schemes to be identified, the Commission will 
ensure that the necessary resources for trying out these innovative approaches are made 
available. 
The Commission will also draw on the experience of the research-industry Task Forces in order 
to strengthen cooperation between players and disciplines and to concentrate and coordinate the 
efforts made. 
(v) Expansion of SMEs' capacity for absorbing new technologies and know-how 
3.9. This aim is to be pursued whatever the origin of new knowledge, methods and technologies. 
On a national scale this would involve such schemes as: 
- enhancing the effectiveness and transparency of national or regional innovation support 
activities; 
30 
<W 
- developing the job of mediator -between research, technology and SMEs (interface services 
similar to the British Business Links, technology follow-up teams similar to the French 
centres de resources technologiques, etc.)- able to put technological problems in the context 
of all SME innovation requirements (organisation, training, marketing, financing, etc.); 
- easier access to external expertise, European or world-wide, particularly where organisation 
and management methods are concerned (e.g. the knowledge resource centres advocated in 
the Ciampi report) and cooperation between firms (clusters, networks and value chains); 
- helping to recruit or second researchers, engineers and technicians to SMEs; promoting visits 
(particularly transnational) between firms and other methods of demonstrating innovative 
technologies, methods and processes. 
Member States ought to extend the scope of their national measures for fostering the transfer of 
technology of international origin. 
A continued drive is needed to rationalise activities and innovation-support organisations in the 
regions and Member States (see Section Bl (iii) above), enabling them to reach critical mass and 
the necessary degree of professionalism. 
The Commission will continue to support such procedures under the Structural Funds and the 
Innovation Programme (regional innovation strategies and audits of the regional infrastructures 
for supporting technology transfer and innovation). 
The Commission will also intensify activities for creating improved links between the various 
national and regional innovation-support systems. 
Working with players in the field, it will identify the skills required and the tools needed to 
professionalise or, where appropriate, certify the new professions which will need to emerge in 
this context. 
The Commission will put forward, as part of the Fifth Framework Programme, a coherent and 
reinforced set of initiatives for encouraging and facilitating the transfer, use and absorption of 
technologies, whether or not these were developed in the European Union. 
It further proposes to give a considerable boost to the innovation support measures under the 
Structural Funds (see Section C3 (i)). Closer and more systematic coordination will ensure that 
these initiatives are complementary. 
These initiatives may include the following: 
support for technology transfer to companies or sectors in less-developed regions, 
particularly under the Structural Funds; 
support for the first use of new technologies, subject to subsequent dissemination of the 
experience acquired by the user (along the lines of the FUSE initiative and ESPRIT), and 
for technology transfer schemes giving young innovative firms access to European or 
international markets. 
(vi) Demonstration of effective approaches to innovation 
3.10 The Commission, in collaboration with European industry, will put forward a new generation of 
transnational demonstration projects, many of them under the European Union research 
31 
47 
programmes, illustrating effective approaches to innovation and incorporating technical, 
organisational and social aspects. 
These transnational projects will provide a framework for "live" testing of transnational 
innovation and will demonstrate how similar innovations are treated in different cultural and 
national contexts, thus making it easier to remove obstacles to their dissemination. They will 
above all: 
• enable new methods, partnerships and services (such as intellectual property rights, project 
management and innovation financing) to be tested: 
• show how to optimise the social benefits of technical innovation, particularly those affecting 
employment and improvements to working conditions but also involving the adoption of 
common standards; 
• develop good participative management practice, so as to improve and accelerate industrial 
innovation; 
• enable social groups52 able to act as innovation catalysts and multipliers to take part; 
• encourage inter-sectoral apprenticeship by disseminating the results of pilot innovation 
projects between sectors. 
The Commission recommends that industrial research projects take socio-economic aspects into 
account and will take steps to promote their incorporation into its own programmes, with the 
help of economic and social science experts. 
It will take appropriate steps under the Fifth Framework Programme to support research and 
development schemes offering short-term and medium-term results and guaranteeing the 
environmental sustainability of production systems, and to facilitate the social acceptance of 
new technologies, particularly those in the information society (such as projects demonstrating 
the ability of new technologies to give stronger protection to fundamental rights, such as the 
respect of private life through the use of privacy-enhancing technologies). 
2. Incorporating the innovation and SME dimensions into the Framework Programme 
3.11. This means totally re-engineering the Framework Programme. Its approach, implementation 
methods and management organisation therefore need to be adapted: 
(i) An integrated approach 
3.12. First, the Framework Programme approach needs to be an integrated approach. The Green Paper 
debate has confirmed53 that research and technology in general were merely one aspect of 
innovation - an important one, of course, but insufficient on its own. The organisational, 
52 The Green Paper "Living and Working in the Information Society" illustrates how important it is for 
society as a whole and for wage-earners in industry to accept change. This last point will be enlarged 
on in the Green Paper on work organisation which is currently being drafted. COM(96) 389 final, 
24/7/96 
53 In the Community innovation survey, the ability to solve technical problems was the least of the 
obstacles to innovation named by companies. 
32 
management, market, financial, legal, protection, etc. aspects will be taken into account more 
systematically. This has a number of implications: 
• these elements will be incorporated from the definition phase of the most industrial 
programmes and the corresponding projects (including the safeguarding of intellectual 
property rights, standards and the subsequent assessment of conformity with such standards, 
private financing networks, long-term market analysis, design, etc.); 
• closer links between RTD and other policies (training, internal market. Structural Funds, etc.) 
will be fostered with a view to meeting the general criteria for rapid exploitation and 
dissemination of results; 
• the Task Force mechanism as a coordination instrument for designing and monitoring 
initiatives targeted at priority societal and industrial objectives, making for visible, selective 
and concentrated effort, will be refined to make the selection of topics more transparent and 
to ensure that as many SMEs as possible from all regions take part. 
• Coordination of Community and national policies should be put into practice. 
(ii) Adapted approaches to implementation 
3.13. Secondly, the ways of implementing programmes and projects will be adapted, primarily with a 
view to: 
• 
• determining the overall technological aims and content of the work programmes for specific 
programmes, taking account of the main factors affecting innovation in their own spheres of 
activity; 
revision or stricter application of the evaluation criteria for project proposals to place more 
stress on the novelty of proposals, the quality of the exploitation plans submitted by the main 
contractors within consortia (and the extent to which they match the business plans of the 
companies or research centres concerned), the relevance of elements needing access to a 
transnational level (effects of scale, access for SMEs to the European market, etc.), the 
expected benefits for other Community policies (employment, cohesion, environment, etc.); 
encouraging preparations to exploit and disseminate results during the research stage by 
making available to the contractors new instruments, methods or good practice and support 
services for innovation and technology management, intellectual property, access to sources 
of private finance, etc. As stated above, close links will be established between Community 
research and innovation projects and sources of risk capital able to provide finance for 
projects arriving on the market, in cooperation with the European Investment Fund in 
particular; 
redirecting the management and contractual follow-up of projects towards producing results 
("deliverables") and/or achieving measurable objectives ("milestones") clearly identified by 
each main partner within a consortium. "Project Life-Cycle Management for RTD" will be 
developed, tested and put into practice. This model aims to achieve homogeneous criteria and 
methods for the whole of the Framework Programme, possibly using Total Quality 
Management techniques. 
33 
• 
• aiming at maximum user-friendliness for SMEs: faster procedures, a single interface and a 
system of rolling calls for proposals with a two-stage submission procedure; 
adapting contracts to allow more flexibility in forming consortia and enable them to be 
changed during the project, e.g. by bringing in SMEs or transfer organisations at a 
downstream stage to exploit or transfer the results, or to give stronger protection to the 
intellectual property rights of contractors when development or demonstration projects are 
involved; 
strengthening the measures taken (methods and resources) under the specific programmes in 
order to promote the exploitation of their results and the dissemination, mainly through 
demonstration programmes, of the generic know-how and technologies generated by them, to 
enable a growing number of firms to benefit from the spin-offs of Community RTD. 
Effective exploitation of the results of research projects will depend largely on the action 
taken by the partners themselves from the research phase onwards to prepare for exploitation 
by consortia or, failing this, for transfer to other partners (complementary studies on 
technology introduction, training in new technologies, documentation from the start of the 
project, preparation of licences, identification of partners, etc.). Substantial funding is needed 
for such action if it is to work. The research project should therefore be part of an innovation 
strategy. This must be taken into account in the selection criteria, throughout the 
implementation of the project and in the assessment of the results. 
(iii) Coordinated management 
3.14. Accepting that large companies have an important roie to play in the Innovation process, in 
particular through their collaboration with smaller firms, this action should give more SMEs 
access to all research work and its results, develop technology transfer and stimulate innovation. 
This will call for closer coordination of the various initiatives so as to ensure: 
- better overall consistency, optimum exploitation of synergies between the various initiatives 
and increased visibility for action in support of innovation and SMEs; 
- an integrated range of services designed specifically for different categories of SME 
(including intellectual property rights, innovation management methods and access to risk 
capital); 
- more homogeneous implementation of measures for promoting innovation and measures 
aimed at SMEs, and the provision of gateways between projects at various stages (research, 
demonstration, transfer, exploitation); 
- greater coordination with other policies (regional, training, etc.). 
Innovation promotion and more effective involvement of SMEs will depend largely on the 
availability, strengthening and rationalisation of existing networks of locally-based organisations 
covering the entire territory and possessing the necessary skills for advising and assisting the 
various players concerned, particularly SMEs, in innovation, preparing projects and finding 
partners (see Sections Bl(iii) and Cl(v)). 
The proposed programme "Innovate and enable SMEs' participation" should boost and 
effectively coordinate efforts to innovate, to disseminate technology and to promote greater 
participation by SMEs in research. 
34 
5~ v 
3.15. Finally, the debate on the Green Paper on Innovation and the experience gained through the Task 
Forces in the Fourth Framework Programme have demonstrated the usefulness of instruments 
which: 
• identify, together with users, researchers and industry, the technological obstacles whose 
solution is an economic and social priority in Europe; 
• mobilise expertise and private or public resources. Community or national, to the maximum 
extent in order to bring large-scale targeted projects to a successful conclusion, so obtaining 
faster results from research effort, avoiding duplication and increasing the visibility and the 
exemplary nature of Community research. 
In consequence, it would be desirable to improve at Community level: 
• general incentives to participate in the work of Task forces, by taking innovation more into 
account as a selection criterion for projects within the Fifth framework programme; 
• the efficiency of procedures by planning simultaneous or integrated calls for proposals for the 
various programmes for priority research. 
3. Mobilising other Community instruments 
(i) Gearing the Structural Funds more towards innovation 
3.16. Not all regions have equal innovation capacity. Statistics show that the technology gap between 
the developed and less-developed regions of the European Union is twice the size of the 
"cohesion" gap, and various factors threaten to widen the gulf still further. The region is thus 
becoming a particularly appropriate level for promoting and strengthening innovation in Europe. 
Moreover, the links between cohesion, research and innovation can be managed more easily at 
regional level. Three considerations support this argument: 
• innovation policy must be based on in-depth knowledge of the demand from companies, 
including SMEs, in a given economic system: there is no standard model which could be 
generalised and this type of policy should be anchored in a regional context. Regions must 
find their own paths to innovation; 
• the region is the most suitable level for the necessary collaboration between the key players 
in innovation; 
• regional and local authorities are best placed to organise, at their own level, the innovative 
environment which is the basis for regional innovation capacity. 
With the above points in mind, and in addition to the action taken to promote innovation 
throughout the European Union, the Commission has implemented initiatives for strengthening 
the importance given to innovation in the Structural Funds. Most Commission initiatives such as 
the SME initiative, ADAPT and LEADER II, as well as Article 10 of the ERDF, give innovation 
high priority. Moreover, innovation is one of the priorities of the new directives concerning 
Objective 2, which states that "innovation is essential for maintaining competitiveness and 
employment". 
In the same vein, the Commission considers that innovation is an important element of the 
priority given to employment in the use of structural funds. It considers desirable therefore that 
Member States and the regions concerned invest more in innovation promotion schemes, subject 
35 
5/ 
to the resources available for the current planning period and in the next generation of Structural 
Funds54. 
The Commission will draw on the experience gained from the regional innovation strategy 
projects supported jointly under Article 10 of the ERDF and the Innovation programme. 
In the Objective 1 and 2 regions, the Commission recommends that Member States and local or 
regional authorities concerned to take fully into account the necessity to concentrate the 
measures for innovation, and particularly research, development, technology transfer and 
qualifications for workers, in order to satisfy the priority given to employment. In rural areas, in 
particular objective 5b areas, the Commission will see, within the framework of strategies for 
employment, to disseminate as widely as possible the good practice identified and validated by 
the European Innovation and rural development Monitoring System within the framework of the 
LEADER II initiative. Under Objective 4 of the Community initiative ADAPT, efforts will need 
to concentrate on innovation action, particularly on anticipating requirements and improving 
training systems, and helping SMEs to manage their human resources more efficiently. 
(ii) Making the most of the international dimension of innovation 
3.17 Action in support of innovation should take account of the globalisation of technologies and 
markets. Flows of information, knowledge and capital are accelerating and multiplying on a 
world scale. Incorporating this dimension means taking several complementary approaches: 
• Closer interaction between the Framework Programme and the COST and EUREKA 
cooperation frameworks. 
• Support for international industrial cooperation and promotion of collaboration between firms 
on the basis of bilateral agreements, giving European firms, particularly SMEs, better access 
to world technologies, knowledge and skills, taking maximum advantage of their know-how 
and strengthening their profiles on the markets of the future. 
• Intensified international RTD cooperation with non-member countries. This should be in line 
with the political objectives of the European Union (e.g. on energy and environmental 
protection or the establishment of the information society), adhere to the principle of mutual 
interest and, where appropriate, be based on bilateral agreements. In a spirit of reciprocity it 
will aim to involve organisations in non-member countries in Community RTD projects. 
Special attention will be given to the countries of Central and Eastern Europe on the waiting 
list for accession to the EU. Another aim will be to boost the attraction of the European 
research area for researchers from countries with which the European Union has links. 
Lastly, specific international scientific cooperation activities will be drawn up on the basis of 
topics and countries or regions such as the Mediterranean, the CIS and developing countries, 
in support of external policies and the industrial policy of the European Union. 
54 The Employment Confidence Pact identifies the development of SMEs as the priority for structural 
policy, stating that "There should be a special effort in favour of the formation of SMEs and one-
person firms. What is needed now is to make wider use of innovatory measures that have been proved 
to work, especially those involving financial engineering - notably access to risk capital. The 
development of SMEs is also helped by the research and technological innovation effort, as in the case 
of environmental technology, and especially access to new markets linked to environment-friendly 
products." (Action for Employment in Europe: A Confidence Pact, CSE(96)1 final, 5 June 1996, 
page 24.) 
36 
si 
• Stronger encouragement to entities in the countries concerned, through the possibilities 
offered by instruments such as TACIS, PHARE55, MEDA, etc. to search a stronger synergy 
with community research projects. 
• Continued vigilance in international negotiations over aspects liable to affect European 
innovation and its outlets (such as intellectual property rights and anti-counterfeit measures). 
(iii) Fleshing out the action plan in various priority sectors and fields of technology 
3.18 Some of the proposals in this action plan may prove to be suitable to specific sectors or 
technologies and adjustments will be necessary. The Commission will, as far as is possible, 
arrange for effective cross-over learning by setting up inter-sectoral and inter-technology links. 
Efforts will be made to take more account of the preoccupations of industry when policies are 
drawn up. 
The fields to be fleshed out include better exploitation of space and dual-use technology, rural 
development, consumption and the audio-visual sector as well as the environment and the 
services sector. Some examples are given below: 
a) Innovation is an important factor in the development of rural economies. Emphasis should 
therefore be placed on encouraging and disseminating innovation in the various domains of 
rural development, above all: 
• getting SMEs in rural areas to use new technologies; 
• improving access by users in rural and/or peripheral areas to modern methods of 
information and communication; 
• extending the services rendered to agricultural producers and SMEs in rural areas 
(studies, assistance with management, forecasting, risk assessment, etc.). 
b) Aspects of demand are essential to innovation. This means, in particular, ensuring that new 
products and services meet the needs not only of firms but of the end user. Innovation 
should above all meet needs which may not be apparent through market forces alone 
(aspects of social and territorial cohesion, universal and general-interest services, user-
friendly products and services, illiteracy, social exclusion etc.). Considerations of demand 
also need to take a "sustainable consumption" approach. 
This also affects consumer protection in terms of product quality and legal environment. 
The latter is particularly important to computer products or services (Internet, smart cards, 
cybercash, etc.). Legislation on these is still in embryo where both law and order and user 
protection are concerned. A multidisciplinary approach to these issues needs to be fostered 
in order to identify the action which needs to be taken. 
c) The audio-visual sector is a priority area whose evolution has accelerated under the impact 
of new technologies. The Commission will encourage partnerships between the digital 
electronics industry and centres of culture (broadcasters, museums and designers). To this 
end, wider consultation procedures on the effects the new technologies may have on the 
audio-visual sector in Europe will be launched and pilot demonstration projects will be run. 
d) An important sector of economic growth is the environmental sector (e.g. waste water, 
waste management, air and noise emissions) both, in terms of manufacturing industries and 
55 For non applicant countries 
37 
f? 
services. These sectors have shown a significantly higher growth than the rest of the 
economy. Jobs in this sector grew vy 3% per year - about twice the rate of other sectors. 
Currently the environmental sector is dominated by end-of-pipe technology (and related 
services). However, the future trend will be towards the development of integrated clean 
technologies, an area where innovation is essential and necessary to speed up market 
introduction and application of these technologies. 
38 
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3. GEARING RESEARCH TO INNOVATION 
3.1 NEW ACTIONS 
1.National measures and their Community back-up 
(i) Strengthening research carried out bv companies 
Member States 
• formulate quantified objectives and put in place the appropriate incentive policies. 
(ii) Start-Hp of technology-based companies 
Commission 
• organise thorough exchanges with Member States and players in the field on legal, fiscal and promotional 
measures (1997). 
• launch pilot schemes for disseminating good practice, involving universities, risk capital, industry and 
regional institutions (1998). 
(iii) Intensified cooperation between research, universities and companies 
Member States 
• set up a legal framework to facilitate exploitation by research organisations, including business start-up. 
(iv) Strengthening the ability of SMEs to absorb technologies and know-how 
Member States 
• support transnational technology transfer. 
Commission and member states 
• better links between national and regional innovation systems at Community level. 
(v) Demonstration of effective approaches to innovation 
Commission 
• set up a new generation of demonstration projects integrating the technical, organisational and social 
aspects of innovation (5th FPRD). 
2.Incorporating the Innovation and SME dimensions into the Framework Programme for Research 
Commission 
• adapt the implementation procedures for the Framework Programme (project selection criteria, faster 
project selection, more demonstration schemes, legal framework for contracts); 
• strengthen the consultation and coordination role of the research-industry Task Forces; 
• develop, a programme "Innovate and giving SMEs greater involvement and providing an integrated 
approach to the goal of innovation through the legal and financial treatment of projects, particularly those 
supporting SMEs (5th FPRD). 
3.Mobilise other Community instruments 
Commission and Member States 
• prepare to flesh out the action plan in various priority sectors and fields of technology. 
39 
?7 
3. GEARING RESEARCH TO INNOVATION 
3.2. CURRENT ACTIONS FOR IMPROVING THE INNOVATION ENVIRONMENT IN EUROPE 
1. National measures and Community back-up 
(») A strategic vision of research and development 
Member States 
• consultations on long-term technology forecasting (Foresight). 
Commission 
• facilitate the exchange of experience and the exploitation of results on a Community scale; 
• stimulate the technology watch (network of national organisations around the European Science and 
Technology Observatory (ESTO)). 
(ih Start-up of technology-based companies 
Member States 
• stronger promotion of "campus companies" and spin-offs. 
(iii) Intensified cooperation between research, universities and industry 
Member States 
• pursue and strengthen action in this area. 
Commission 
• analyse the obstacles and disseminate good practice; 
• support national efforts to improve the management of research and technology organisations and their 
international benchmarking; 
• organise sectoral and inter-sectoral technology platforms. 
(iv) Strengthening the ability of SMEs to absorb new technologies and knowledge 
Member States 
• improve the efficiency and transparency of support structures. 
Commission 
• help professionalise the innovation support services; 
• set up a scheme for promoting the absorption and use of technologies (first-use support, access to 
technologies not developed in the European Union, internationalisation of young technology-based firms, 
regional projects). 
(v) Demonstration of effective approaches to innovation 
Member States and Commission 
• make better use of specialists in the social and behavioural sciences in technology projects. 
2. Incorporating the Innovation and SME dimensions into the Framework Programme 
(see New Actions) 
3. Mobilise other Community instruments 
Commission and Member States 
• direct more of the Structural Funds towards innovation; 
• make the most of the international dimension of innovation. 
40 
r Ù 
CONCLUSION: 
In the three main fields identified, the Commission is putting forward those measures whose 
priority, expected impact or urgency has been confirmed by the debate. 
At Community level these measures can be financed from existing or planned budgets without 
additional funding. 
The main effort must nevertheless be made at local, regional or national level. Action in support 
of innovation must be first and foremost the province of the Member States and those active in 
the field - above all companies. 
A more thorough analysis will be needed to take account of the wide variety of situations in the 
Member States. The Commission proposes to organise this in close collaboration with the 
Member States, so as to establish a joint reference framework and so help them identify the 
priority options and the opportunities for cooperation. 
It requests Member States to take the necessary steps to ensure, on an internal basis, efficient 
coordination of the measures deriving from various policies and, on an external basis, optimum 
interaction with the other Member States and with the European Union. 
The Commission will draw up a detailed implementation schedule and will precisely quantify 
the costs of the measures it is proposing. On this basis it will submit the corresponding 
legislative and regulatory proposals to the Council, the European Parliament, the Economic and 
Social Committee and the Committee of the Regions. 
The Commission will report regularly to the European Council on the implementation of the 
action plan, including, where necessary, proposals for any adjustments or additions which may 
prove necessary in the light of developments or in view of the specific contexts in which the plan 
is applied. 
The enthusiasm and energy demonstrated must be mobilised in order to implement this Action 
Plan and so build a more innovative, competitive and job-creating Europe. 
41 
f/ 
ANNEX 2 
1. Reactions to the consultation on the Green Paper 
2. Recent developments in innovation policy in the 
Member States 
3. Statistical tables 
anx1-en.doc i x*cv 
70 
ANNEX 2.1. 
Reactions to the consultation 
A. Summary of the comments from those in the 
field 
B. Reaction of the governments 
C. Reaction of the institutions 
fc 
2.1-A- Summary of the comments from 
those in the field 
X éo 
Introduction 
Consultation on the Green Paper nas involved an unprecedented deoate on 
innovation not only m the fifteen countries ot the European Union, Out also in 
Norway and Iceland. 
More than forty thousand copies of the Green Paper were distributed. It was 
analysed, discussed and commented upon ov researchers, the heaas of large 
concerns and SMEs, public authorities, trade unions, professional associations 
and the various Community institutions. Conferences were held in 17 countries 
involving nearly 5000 persons. 
A large number of specific proposals were suomitted to the Commission. Apart 
from the national conferences, whose reports of proceedings reflect the range 
of reactions and the expectations aroused bv this initiative, the Commission 
received more than 300 contributions directly1, and their length and the quality 
of analysis of many of them Dear witness to the interest aroused by the Green 
Paper. 
An initial analysis of the reports of proceedings of the conferences and the most 
representative (particuiarlv of the main professionai associations and trade 
unions , national and European federations, large concerns and financial 
institutions) and relevant contributions is given here. These communications 
mainly concern the topics and the various routes of action proposed by the 
Green Paper, in particular as regards the improved orientation of research 
towards innovation, improvements in innovation financing, intellectual property 
rights and support for SMEs. In addition, some of these contributions propose 
topics little touched on in the Green Paper, such as organisational innovation, 
innovation in services, the role of large concerns, etc. 
This document gives an initial, non-exhaustive summary of these comments, 
grouped under the main topics in the Green Paper. The summary does not cover 
either the contributions of the Eurooean institutions or the officiai contributions 
of the Member States, which are descnbea in Chapters 2 and 3 of this annex 
respectively. 
The list of individual reactions to the Green Paper is annexed 
M 
Résumé 
1. Amongst the topics proposed by the Green Paper, a number of major subjects 
are touched upon more frequently in the contributions. This concerns, in 
particular, the improved orientation of R&D towards innovation, innovation 
financing, the protection of industrial property and support for small and 
medium-sized enterprises. 
As regards the improved orientation of research towards innovation, the general 
opinion is that the links between the world of research and industry must be 
improved by strengthening the capacity for dialogue between the two and by 
improving researchers' understanding of the problems of the business world. 
Technology watch is considered important, and national initiatives must be 
coordinated and exchanges of information improved, rather than setting up a 
new Community institution. As regards public research efforts, there is a 
difference of opinion between the proponents of the financing of pre-
competitive research only and those who favour the financing of the entire 
research process (up to the industrial-scale phase). In general terms, task forces 
are of interest to the larger countries, but the desire is that their working should 
be more transparent and that manufacturers should be able to become more 
involved in their definition. Finally, there is unanimous agreement that research 
programmes should be faster in selecting projects and that their procedures 
should simplified. As things stand at present, they seem ill-suited to almost all 
SMEs. 
As regards human resources, greater mobility is recommended, particularly 
between university and industry, along with Europe-wide recognition of 
qualifications and greater emphasis on innovation-linked matters in school and 
university curricula. 
Improvements in innovation financing were the subject of a great many 
comments which focused, in particular, on the need for a European-level 
financial market for innovative businesses, the establishment of links between 
technology and financing, the introduction of guarantee schemes and the use of 
the tax system to promote innovation. 
As regards the legal and regulatory environment, the comments focused on 
industrial property rights - considered to be a tool which was expensive, difficult 
to access and unfamiliar to businesses - and the need for a company statute 
suitable for the single market and affordable to SMEs. 
Finally, a great many suggestions concerned direct support for SMEs and the 
national or regional support infrastructure for such businesses. These are 
frequently specific to the individual Member States, and it is difficult to discern 
any common denominator. However, there are some recurrent features, such as 
the need to facilitate participation in (national and Community) research 
programmes, to rationalise and make more transparent the supply of -
particularly public - services and to consider SMEs no longer in isolation, but 
against the background of their relationship with large concerns, customers and 
suppliers. 
s kl O^-
2. In addition, some comments concerned topics wnich were not. or hardly, 
toucned upon in the Green Paper: 
This concerned, in particular, innovation In the services sector (despite the fact 
that it is the largest employer in Europe) and in the public sector (ditto) 
"Innovation in services is a field which has been largely ignored. Innovation in 
the services sector plays an important role in instigating changes in the 
manufacturing sector" (Oslo). 
There was some criticism that the Green Paper puts too much emphasis on the 
technological aspects of innovation, wniie neglecting the social and 
environmental factors. In particular, some circies feel that the promotion of the 
organisational capacity of businesses nas been ignored. "The DGB regrets that 
the Green Paper is too much geared towards the promotion of technology and 
that it takes only little account of direct measures to promote the operational 
capacities of businesses, which are of decisive importance in absorbing RTD". 
Furthermore, the trade unions (particularly in Germany) regret the absence of a 
reference, in the proposed measures, to those measures aimed at motivating 
and involving employees. The UEAPME also points out that "It is important to 
remember that innovation means more than just the development of new 
products: it is also organisational and structural". In the same vein, the concept 
of incremental (progressive) innovation is felt to have been insufficiently 
emphasised as compared with radical innovation and high technology (IRDAC). 
Large concerns are frequently mentioned in the contributions as producing a 
large number of innovations. There is some surprise that they do not then 
feature in the Green Paper. "Large businesses are left out of the debate, despite 
the fact that they are major sources of R&D and the first to adopt innovations 
coming from SMEs" (CEST). 
Finally, the picture painted by the Green Paper is sometimes felt to be too bleak. 
The pharmaceutical industry, for instance, is cited as an example of a European 
sector which has been very successful in exploiting its technological know-how 
in the commercial world. 
3. The main topics raised in the various contributions are given below according to 
the five major objectives set out in the summary of the Green Paper: 
• improving the orientation of research towards innovation 
• bolstering the human resources for innovation 
• improving the conditions for financing innovation 
• establishing a legal and regulatorv environment conducive to innovation 
• developing the role and procedures of the public authorities 
t»; 
1 / Directing researcn efforts more towards innovation 
It is important to improve links in Europe between the world of research, in 
particular universities, and industry. 
There is a widespread wish for improved adaptation of research programmes to 
the needs of industry. Some contributions nevertheless stress the need to 
maintain fundamental research which is not directly linked to immediate market 
needs. This adaptation could be the outcome of increased dialogue and 
coordination between sectors, particularly with a view to avoiding harmful 
competition in the use of the resources devoted to research. It also requires the 
active involvement of intermediaries such as collective research associations, 
and the organisation of - and support for - technology transfer from the 
university to industry. 
One of the proposals at the Paris conference was to increase the involvement in 
research of business engineers and project managers trained in establishing 
relations between businesses and accompanying research projects right up to 
their transfer to industry. (The contribution of the CNPF also points out that, 
within France, there is a need to reassess the technology programmes and 
research bodies, which have in many cases "aged" without any subsequent 
review.) 
The unsuitability of university assessment criteria is frequently mentioned. The 
traditional criteria are based on publications and leave no leeway for taking 
account of researchers' aptitude for mobility and exchanges with industry. "The 
current system for assessing public researchers is an obstacle to their 
participation in industry" (Madrid). It is proposed that these criteria be revamped 
and that the use of research results by businesses become a positive criterion. 
The principles currently governing researchers' careers are regarded as a 
powerful brake on such collaboration. Researchers in fact often have a job for 
life. "Fixed-term contracts for researchers working in public research institutes 
should be encouraged, possibly with tax incentives for firms taking them on 
when they become available on the labour market" (Milan). In addition, their 
awareness could be enhanced and they could be trained in knowledge of the 
business world. However, the trade union organisations think that, on the 
contrary, young researchers should be assured of stable career prospects in 
order to ensure that they have the peace of mind needed for their creativity. 
Technology watch and economic information 
Technology foresight and technology watch exercises carried out at national 
level are sometimes considered by businesses as a means of orienting the 
technological and industrial policies of the Member States, rather than as tools 
useful to businesses. "Technology watch and technology foresight initiatives 
create jobs only in the science of forecasting and not in businesses" (UEAPME). 
Economic and technical information for businesses - particularly SMEs - is 
considered a problem to be dealt with separately, although a summary is 
nevertheless thought necessary, with manufacturers taking part in prospective 
technological study projects and the results of such projects providing some of 
the information of use to businesses. 
*H 
As regards prospective technological studies, emphasis is placed on the need to 
exploit what has already been acnieved by Memcer States Dv relying on their 
individual skills. Setting up a network of such initiatives receives more support 
than developing a new scheme at European ievel. "The centralised model for 
technology foresight is risky" (Oslo). 
SMEs appear to oe making insufficient use of the technology watch. Some 
doubts are expressed as to the neeo to provide businesses with even more 
information. The Berlin conference stressed that. "In general. SMEs do not need 
more information on the technoiogicai situation. They already cannot use the 
information they nave". At this level, the distinction between technoiogicai and 
economic information appears artificial. Businesses shouid be supplied with 
information of direct use to them, e.g. information on markets, the competition 
and the financial and legal fields. Manv correspondents say that SMEs should be 
made more aware of economic intelligence. The suitable framework for this type 
of action would seem to be the regional level, at which exchanges of 
information and studies between businesses could be organised and local bodies 
such as Chambers of Commerce and Innovation Relay Centres involved. 
The public effort 
A number of points arose as to the advisability of increasing the public RTD 
effort, in particular the questioning of the distinction between precompetitive 
and other research, the notice taken of cohesion objectives and the need for 
efforts to be more narrowly focused. 
The participants at the German and British conferences displayed a certain lack 
of enthusiasm for a possible increase in R&D budgets. While this is regarded as 
a possible additional burden on businesses, a large number of comments 
question the existence of a direct link between R&D expenditure and the results 
in terms of innovation. The Birmingham conference felt that "Europe does not 
need more research. It needs correctly-applied, effective and high-quality 
research". 
Taking account of cohesion objectives in R&D programmes is thought to 
conflict with the objective of strengthening the innovative capacity of European 
businesses, particularly by the participants at the Berlin conference. The BDI. in 
particular, states that "It is just as harmful to use Community funds a/located to 
research policy for cohesion objectives, as it is justified to fund R&D from the 
structural funds". Nevertheless, measures aimed at strengthening cohesion are 
considered necessary. "Cooperation between less-developed and more 
developed regions must be promoted, taking care to ensure that the benefits of 
such cooperation remain in the less-favoured regions" (Madrid). 
A number of contributors feel that the question of the advisability of financing 
beyond the precompetitive stage - and particularly in the industrial application 
phase - remains to be settled. In particular, it is felt that "The innovation 
process does not finish with the production of a prototype. Support must be 
continued and include market entry" (Berlin). The Madrid conference mentions 
the possibility of launching a programme which might finance the initial 
applications of specific technologies which have already proved their industrial 
utility. However, there is clear opposition from some large concerns. "Moving 
^ 
puoliciy-fundeo R&D towards zhe marKei-oiace means that it must cnoose 
between overtly favouring a smgie commercial enterprise or publishing tate-
stage information. Neither of these strategies is realisticailv sustainable" 
(SmitnKline Beecham). 
Finally, certain sectors (the electrical industries, in particular) feel there should 
be compensation for the fall in public R&D spending on defence. 
Task forces 
Task forces are generally considered - particularly by the large countries - to be 
a useful instrument for concentrating resources in major fields. Nevertheless, in 
order to improve their transparency, it is recommended that manufacturers be 
more effectively involved right from the design phase in selecting topics and 
preparing the work programme. "The role and operation of the Task Forces 
must be open and informed by consultation with industry and the output from 
various national foresight programmes" (CBI). 
While the participation of SMEs in the task forces is considered desirable, a 
large number of comments stress tne incompatibility between SMEs and task 
forces. The latter are regarded as being ot potential benefit above all to large 
concerns, and this explains the reservations on the part of some Member 
States. "The task forces, as set out in the Green Paper, are of no use to 
Portugal" (Lisbon). 
Finally, some major manufacturers have reservations about any move on the 
part of the European Union to coordinate industrial research efforts. They feel 
that a better solution would be to strengthen the cohesion of the Community 
programmes. 
Research programmes 
There is unanimous agreement that these should speed up the selection of 
projects and simplify procedures. In particular, they seldom appear to be 
adapted to the constraints facing SMEs: the cost of drawing up a file is 
considered disproportionate. "A small' high-tech business cannot wait for 
Community support - six months is an eternity" (Birmingham). Finally, the 
business needs greater freedom and flexibility in the use of the funds. The very 
participation of SMEs in the framework programme is questioned, since it is felt 
that only a very small number of them are capable of making a genuine 
contribution and hence being eligible for participation in the specific 
programmes. 
A number of proposals are aimed at decentralising the decision-making 
procedures and setting up bodies in the field. One comment mentions that 
"EUREKA-type projects, which are close to manufacturers' concerns and to 
products, are worthy of reinforcement" (Paris). It is also suggested that 
participation in the specific programmes could be replaced by more flexible 
arrangements involving indirect support. 
Furthermore, a number of comments relate to the project selection procedures: 
they shouid involve more experts from industry 
66 
Technical Qualifications snouid cs aeciaing criteria, ratner man the 
•nvoivement ot a numoer ot partners from different Memper States 
the performance oojectives snouid :ake account of the return on 
investment in terms of R&D and innovation 
ïhe project evaluation snouid take account not only of the business oians. 
but-also ot he pians of the researcn institutes taxing part in the projects 
Finally, ihe programmes should take rr.ore account of the concept oi 
collaboration between small and large businesses, and it should be possiPie to 
subsidise projects deriving from predetermined topics. 
2/ Bolstering the human resources for innovation 
The mobility of persons between research, the education system and industry 
must be strengthened. 
This echoes the concern mentioned before as regards the criteria for assessing 
researchers, which do not encourage them to take part in industrial projects. 
Making it easier to integrate young graduates into businesses, particularly 
SMEs, is considered by ail the conferences to be highly important. 'Local 
mobility of researcners and students between academic and industrial circles 
might be an interesting way to imorove education and training, but also to 
foster inventiveness and entreoreneursnio' (UNICE). There are already 
programmes at national level (Teacning Company Scheme in the United 
Kingdom. CIFRE ana CORTECHS in France, etc.) which could act as examples 
for other Memoer States. One specific suggestion relates to graduates with 
doctorates, whose integration could be neloed through post-doctorate 
traineeships in businesses, in particular SMEs. 
A number of comments - sometimes contradictory - are aimed at adapting the 
programmes (particularly the Communitv ones) to promote mobility: 
they should be made more flexible in order to genuinely meet the needs of 
ousinesses 
they should have no age limit 
they should be more focused 
they should be expanded and have their funding increased 
The lack of internal employee mobility towards fields in different specialisms is 
regretted. There is a need to reward changes of stream, promote assistance for 
career guidance, help staff to cope with change, expand part-time working, etc. 
There were numerous suggestions to the effect that school and university 
curricula should include subjects of relevance to innovation. In particular, there 
is a need to include economics and management in the training of scientists. 
More importance snouid be attached to experimentation in scientific and 
technical curricula, industrial property rights should feature more prominently in 
university and even secondary education, etc. 
Training should be suitable for all levels - whether for future managers or future 
unskilled operators, who should be prepared for frequent rethinks and technical 
changes 
yr U 
For some bodies, the. Commission s intervention should be directed towards 
developing networks of national agencies with responsioiiitv in the field, rather 
than setting up an additional body. 
3/ Improving the conditions for financing innovation 
Financing is obviousiv a major concern. However, some comments draw 
attention to the fact that financing remains a resource like anv other, and that it 
alone is not enougn to ensure innovation. "The problems associated with 
organisation and entrepreneurial attitudes are more important than tne financial 
or technological deficits" I'Berlin). 
There is a major role for the European Union in facilitating the exchange of 
experience and best, practice, sn implementing harmonisation measures, or 
encouraging transnational financing initiatives 
Markets 
Most of the national conferences are in favour of the creation of a (NASDAQ-
type) European market on which shares in young growth companies could be 
traded. Plans for setting up such a market should be speeded up. "ft is not 
satisfying to have to be forced to point successful venture capital businesses 
towards the US market, and this will naturallv have major repercussions on the 
business itself, even to the extent of demanding relocation" (BDI). National 
markets of this type must become international (Paris). 
Since this type of market caters only for the most dynamic businesses, other 
solutions have to be found to encourage investors (assistance funds for the 
transmission of enterprises, schemes giving investors the chance to recover 
their shareholding, mutualisation of risks along the lines of the Joint Venture 
Capital Fund. etc.). 
Technology and financing 
There is general agreement on the need for more account to be taken of 
innovation and technology by financial institutions. To this end. it is suggested 
that technology investment operations be launched, perhaps by setting up a 
bank specialised in technology (Birmingham), that a technical certification or 
guarantee/insurance system be set up (at Community, national or regional level) 
to serve as a point of first resort and attract outside finance, and that the 
development of "technology rating" systems be encouraged, so as to be able to 
quantify the chances of the industrial success of a technical project. "The 
European Union must encourage exchanges of experience on this subject" 
(ANVAR). 
* t>? 
Guarantees 
Encouraging support from banks for innovative businesses involves minimising 
the risk to the banks, in France, "increasing the SOFARIS coverage rates should 
encourage banks to provide more funding for innovative SMEs" (Paris). Against 
this background, the fact that the EIF provides guarantees to banks is widely 
welcomed (Dublin, Helsinki, Milan, etc.). 
Mutual guarantee societies should be authorised in a Directive to have a more 
favourable capital ratio. "The risk cover levels required from these societies for 
providing guarantees should be authorised to be more or less the same as those 
for banks" (Madrid). 
Taxation 
There is almost unanimous agreement on the need for more favourable tax 
treatment of the investor in innovative projects or companies. In particular, it is 
suggested that the capital gains on innovation securities (particularly in the case 
of individual investors) should be subject to lower taxes or even exempted, that 
the risk of loss for venture capital shareholders should be limited, perhaps via a 
tax credit corresponding to a certain percentage of the investment, that 
distributed profits should be tax-exempted, etc. 
These tax measures might be aimed specifically at encouraging sources of 
"patient" capital (pension funds, life insurance funds, save-as-you-eam 
schemes) to turn to venture capital investments. 
Finally, several suggestions relate to the improved tax treatment of investment 
by businesses in innovation, particularly in the field of training. 
Other measures 
Start-up capital should be encouraged, perhaps along the lines of the American 
SBICs, so as to ensure a better yield. The various schemes set up in this field 
by the Member States should be studied and, if appropriate, introduced 
elsewhere. 
The EVCA (European Venture Capital Association) recommends that the EIF 
should invest directly in SME capital via venture capital funds. This idea is 
generally welcomed by the national conferences, although it is difficult to 
assess the costs and impact of this type of measure. "There is no objection as 
regards the possibility of innovation funds, but there is some concern at seeing 
the money simply injected here and there" (Zeist, NL). 
The regulatory conditions within the Union must be harmonised to avoid a flight 
of capital to wherever conditions are most favourable. 
^ 6<3 
4/ Encouraging a legai and regulatory environment conducive to 
innovation 
Intellectual and industrial property rights attracted a number of comments. It is 
generally felt that their importance is underestimated. The expensiveness of 
patent procedures and the need for a harmonised system in Europe are two 
points with regard to which most of the national conferences consider the 
present situation unsatisfactory. 
Intellectual property rights 
A large number of comments concern patents. The situation in Europe is 
regarded as too complex. "777e decision-makers should develop an integrated 
approach with a view to improved protection of intellectual property rights in all 
fields" (UNICE). As the Birmingham conference points out, "A patent covering all the 
Member States is a clear priority". The entry into force of the Community patent should be 
promoted. There is unanimous agreement that the costs involved in patents, particularly the 
cost of translation, are too high. To make a future Community patent more attractive, these 
costs and the processing period must be reduced. In line with many other comments, the 
Athens conference calls for "a reduction in the cost of registering and protecting patents. 
R&D funding should be extended to the registration costs for innovative products. 
The importance of access to information on patents (information network, 
databases) is underlined. It also appears desirable to improve the image of 
industrial property rights, particularly by including specific courses in university 
(or even secondary) curricula. "In the US and Japan, patents and trademarks are 
considered factors which improve productivity" (Madrid). 
Efforts to achieve harmonisation are considered necessary and even urgently 
required in the new technologies (particularly biotechnology and 
telecommunications). 
Opinion seems to be predominantly unfavourable as regards the use of utility 
models. "The Commission should neither encourage their use at national level 
nor promote their use in the Union" (Birmingham). 
Defending one's intellectual property rights, particularly in third countries, is an 
expensive business. It is suggested that an insurance scheme be set up to cover 
these such costs, perhaps supported by public funds. "The introduction of such 
an insurance system for infringement of intellectual property rights. Such a 
system could be funded/supported from public funds" (Sweden. 
Administrative simplification 
Administrative simplification is considered essential. There is a widely shared 
opinion that it would be better to remove the administrative obstacles rather 
than set up new structures to overcome them. "It is more useful to remove the 
various administrative obstacles than to set up even more structure for 
overcoming them" (UAPME). In this context, ANVAR mentions that "the one-
stop shop has proved to be a bad idea". 
1o 
Company law 
All the comments agree as to tne adoption of a European puclic limited 
company statute going beyond the concept of an EEIG. However, it is 
frequently felt that this concept is difficult to apply to SMEs. for wnom there 
should be a special statute. "The rapid adoption of a European public limited 
company statute is a major factor in facilitating cross-border cooperation. The 
proposal for a small European iimiteo comoany' is a step towards achieving a 
joint solution" (DIHT). 
Competition 
Competition is generally regarded as one ot the driving forces of innovation. 
However, a number of comments call for a degree of relaxation of the rules in 
this field. The German Association of Chamoers of Commerce states that 
"Progress in certain fields is possible only through joining forces". 
Some contributions call for a reduction in the administrative burden on 
businesses by extending the field of application of the uniform ruies on mergers 
in Europe and by harmonising the treatment of structural joint subsidiaries. The 
BDI points out. in particular, that "The Commission should expedite and simplify 
authorisation procedures for cooperative projects. The current legal situation 
tends to stifle cooperation because of lengtny procedures and a lack of legal 
certainty. Moreover, the scope of application of European merger control should 
be extended, so that companies are no longer compelled to notify joint 
subsidiaries simultaneously to a large number of national authorities". In similar 
vein, according to Siemens: "More and more cooperation agreements are 
subject to national merger control. This involves considerable expense and 
effort for the firms concerned, as well as risks. Mergers should be controlled on 
the basis of uniform criteria by the Commission". 
Siemens also mentions that "Article 85 also covers barriers to vertical 
competition, whereas only the principle of abuse applies to this field under 
German competition law ... as regards ex emotions by category for relations 
between firms (supplier and OEM contracts)" 
Others mention a revision of Articie 85 "to make competition between 
competitors possible (American 'rule of reason') except in the case of abuse or 
contraindication" (Thomson Multimédia). In the same way: "Article 85 should 
be rewritten with a view to liberalisation and a comprehensive and dynamic 
market approach" (IBM France). 
Assessment of the impact of regulations on innovation 
"All regulations must be assessed on the basis of their capacity to promote or 
hamper innovation. To this end, businesses must be involved as far upstream as 
possible in drawing up these rules at both local and European level" (CNPF). 
M 
5/ Adapting the roie and procedures of public action in favour of 
innovation 
Althougn this topic attracts a iarge numcer of comments, it is sometimes 
difficult to obtain a coherent overview, particularly because of the major 
differences in the situation in the individual countries. Some major subjects of 
interest can. however, oe discerned. 
Support for SMEs 
There is frequent criticism of the system of classifying SMEs by employment 
size class, as this is considered unsuitable for reflecting the wide range of 
problems affecting them. 
Several contributions also stress that, instead of placing the emphasis solely on 
SMEs as opposed to large concerns, account should be taken of the entire 
customer-supplier chain and the large concerns' unused technological resources. 
In general, the comments are in agreement that pilot projects aimed at the 
internationalisation of SMEs must be encouraged. Moreover, "accompanying 
measures should be taken to allow selected SMEs access to markets and 
transnational cooperation, together with otner firms or with universities or 
research centres in other countries" (Madrid). 
The national or regional support infrastructure 
One general remark is that the public support programmes may appear 
complicated to SMEs. which have difficulty finding their way around them. The 
German chambers of commerce state that they would welcome a rationalisation 
of the Community information centres, while the British employers' federation 
stresses the use of existing initiatives rather than the creation of new ones. 
"Care should be taken to find the right balance between proximity and 
proliferation of information relay centres that would lead to confusion and 
subsequent rejection" (UNICE). 
The French conference also mentions that the creation of support networks for 
SMEs should be promoted and the public support schemes opened up. More 
generally, most countries are trying to promote global approaches to the 
problems of SMEs. 
The Spanish contributions reveal a particular interest in the regional level (while 
stressing the fact that the Green Paper does not devote enough attention to 
regional aspects) and in strengthening the role of local authorities in innovation. 
This view is supported by several other contributions which mention the role of 
the local authorities in the field of support for SMEs. The field of science parks 
is also frequently mentioned as one in which there have been successes and 
which should be taken into account. Some other contributions are less upbeat, 
and the Land of Hessen states that "It is important to strengthen the regional 
dimension of innovation; however, regional innovation must not be taken as a 
cure for all ills or as a reaction to the increasing globalisation of economies". 
yr V 
Research programmes 
A number of comments of relevance to this heading had already been made 
under the heading "Directing research efforts more towards innovation", in 
particular as regards the difficulty facing SMEs wishing to take part in the 
research programmes. To overcome these difficulties, Daimler-Benz mentions 
that one effective way of fostering the participation of SMEs in the research 
programmes might be to involve them in the programmes together with the 
large concerns. 
Other measures might be more effective for SMEs than the research 
programmes "with a view to meeting the needs of SMEs in the innovation 
process. General instruments, tax incentives, joint industrial research projects 
and the utilisation of results are more suitable than fixed quotas in the specific 
programmes" (BDI). 
The Madrid conference, finally, notes that there is a need to "improve 
transparency in the presentation of the procedures for public support for firms, 
so that the stages the proposal must follow, the assessment criteria, the 
payment schedule, etc. are known from the outset". It is also suggested that 
the application forms should be made more comprehensible and that businesses 
should be helped in replying to the authorities' requests. 
vT 73 
APPENDIX 
List of individual reactions to the 
Green Paper 
\r •fif 
List of individual reactions to the Green Paper 
Names Acronyms Country 
ABB 
CÀDÀS 
AËI 
"ANACT 
ÀNVÀR aBaCus Partnership * 
ABB Ov " 
Acaoémie des Sciences - institut de France - Comité Applications de 
Action in Europe for Education. Invention, and Innovation 
Afonso Paulo Manuel (consultant) 
Agence Nationale pour l'Amélioration des Conditions ae Travail 
Agence Nationale pour la Valorisation de la Rechercne 
Agencia d'Àvaluacio de fecnologia Medica * 
Air France 
Air Liquide 
Akademie fur Innovation, Unternehmensdesign und Politikgestaitung GmbH Die Denkfabrik 
Àkademie fur f echnikfoigenabschàtzung * 
Àilianz Lebensversicherung, ÀG _ 
Amerada Hess ltd 
Amsterdam Economiser) en Sociaal Instituut * 
Amsterdam University * Un. Kingdom 
Finland 
France 
France 
Spain 
France 
France 
Spain 
France 
France 
Germany 
Germany 
Germany 
Un. Kingdom 
ESI-VU Netherlands 
Netherlands 
ARGO Arm der KartnerLandesregierung _ 
Ann Christoph (professeur) 
Ânsaldo * _ 
Àrcadi - Réseau - Association des Consultants 
ARGO - Plastic Packaging Materials - Plastics in Ëngeering 
Arôvit Petfood * * _ 
Associaçâo Portuguesa de Professionals em Socioiogia industrial, aas Org. e APSIOT 
Association "Industrialisation des Recherches sur les Procédés et Jesj IREPÀ 
Association des Large concerns Françaises AGREF 
Association Nationale de la Recherche Technique ANRT 
Association of European Radios AER 
Assôciazione ItaÏÏa per la Ricerca ' 
Àssociazione Tiguïiio_Attiva + Promotiguïiio sri _ _ 
Atlantis Research Organisation Austria 
Germany 
Italy 
France 
Greece 
Denmark 
Portugal 
France 
France 
France 
Belgium 
AIRI Italy 
Italy 
Greece 
Banca Nazionalejdel Layoro 
Banca Sella 
BASF BNL Italy 
Italy 
BASF Germany 
Bayerische Vereinsbank, AG 
Bayerisches Forchungszentrum fur Wissensbasierte Système 
Becdelievre RolandJConseiller Général Le Mans) 
Bertelsmann, ÀG 
Bio Soft ' " _ _ _ _ 
Bodilsen Holding 
Boehnnger ingelneim _ 
Bonn International Centre for Conversion * 
Bonnaure P. (expert) 
Bosch, GjmbH 
Bouju André (consultant) 
British Ceramic Confederation 
British Technology Group _ 
British Telecom 
Bundësarbeitkammer in der Standigen Vertretung Ôsterreichs oei der EU 
Bundesveroand der Cteutschen Industrie 
Bureau of European Designers Associations 
Burmah Castrol _ _ __ 
Bûro fur Énergie und C^kologieManagement _ 
CÀRIPLO~""~ ~ "'IJIJII'1..^1II'Z.-1.1..1" 
Casa de la Sabiduria SA FORWISS Germany 
Germany 
France 
Germany 
Denmark 
Denmark 
Germany 
Germany 
France 
Germany 
BCC 
BTG Switzeriana 
Un. kingdom 
BT JJn^ Kingdom 
Un. kingdom 
BAK 
BDI Austria 
Germany 
BEDA Netherlands 
Un. Kingdom 
Germany 
CARIPLO Italy 
Spain 
Centre d'Études et Recherches Appliquées à la Gestion _ CERAG 
Centre de coolâérationjnternationale en recherche agronomique * CIRAÔ___ 
Centre""d'ë-Ressources et d'initiatives pour i'international (Ministère de CR2i France 
France 
France 
Centre européen d'entreprise et d'innovation Promotech France 
CentreÉuropéen des Entreprises ài Participation Publique Çl?^ „.Ç?!?ÎM!T! 
Centre for Exploitation of Science and Technology Ç§?J _ Un. Kingdom 
Centre forrWorlcing~LTfe Research^& Dev.ment - Halmstad Ùniversity_ _ _ Ç^!u .sJ^?^?n. 
Centre fëchnïque ides Industries Mécaniques CETJM France 
Centro de Enlace del Mediterraneo - Innovation Relay Centre_- CÉNEMÉS Spain 
Centre de Formaçao Professional para a industria Ceramica • CENCAL Portugal 
r^ 
Centro de Robotica Intelligente 
Centro di Ricerca Fitotecnica 
Centro Promotor de inovacao e Negocios 
CERAME-UNIE Bureau de liaison des industries céramioues européennes 
Chanrmre de Commerce Américaine - The EU Committee 
Chambre de Commerce et d'Industrie de Paris 
Chambre économique autrichienne 
Chambre Régionale de Commerce et d'Industrie de Lorraine 
Chartered Society of Designers 
Chemical Industries Association 
Christeijk Nationaal Vakverbono 
Colas 
Colonia Assurance 
Commersbank. AG 
Compagnie des Signaux 
Compagnie Nationale des Conseils en Propriété Industrielle 
Compania Ëspanola de Petroleos 
Computermac * • UNINOVA_ 
ICPTN 
CËRAMI UNIE 
CCI de Paris 
CCI de Lorraine 
^CSCT " ^ 
jCIÂ 
CNV 
CS Portugal 
Italy" 
Portugal 
Belgium 
Belgium 
France 
Austria 
Prance 
Un. Kingdom 
Un. Kingdom 
Netherlands 
France 
Germany 
Germany 
France 
CNCPI 
CEPSA 
Confédération Européenne des Syndicats CES France 
Spain 
Denmark 
Belgium 
Confederation of British Industry 
Confindustria CBI Un. Kingdom 
Italy 
Conseil Européen de l'Industrie Chimique CEFIC 
Conseil National du Patronat Français^ 
Consejo Superior de Investigaciones Cientificas 
Consiglio Nazionale délie Ricerche 
Construction Industry Council CNPF Belgium 
France 
CSIC Spain 
CNR 
CIC 
Construction Research and Innovation Strategy Panel 
Cornwall Innovation Centre, Ltd 
Corporacion Empresanal de Extremadura CRISP Jtajy 
Un. Kingdom 
Un. Kingdom 
Un. Kingdom 
Cranfield International Ecotechnology Research Centre 
Crédit Local de France Spain 
Un. Kingdom 
France 
CUV Progress CUV Progress Bulgaria 
Daimler Benz Germany 
Danel Technology Consultant France 
De Montgolfier. Philippe (consultant) - Essor Europe France 
Deutsche Aktionsgemeinschaft Bildung-Erfindung Innovationen DABEI Germany 
Deutsche Ausgleichbank 
Deutsche Bahn Germany 
DB Germany 
Deutsche Bank, A.G 
Deutsche Erfinder Akademie Germany 
Germany 
Deutsche Telekom 
Deutscher Gewerkschftsbund - Bundesvorstand 
Deutscher Industrie und Handelstag 
Ejner Hessei * * 
Electrolux DGB 
DIHT Germany 
Germany 
Germany 
Denmark 
Belgium 
Empresa Nacionai de Innovacion Sociedad Anonima 
Enemaerke & Petersen •* 
Ente ENISA Spain 
per le Nuove Tecnologie, l'Energia e I'Ambiente 
Ernst & Young ENEA 
Esbjerg Oilfield Services J^* '__ 
Escuela Superior de Administration y DJreccion de Empresas de la ESADE 
Espoirs Suscités par lesjjudes et la Recherche Club Esper 
Ésso, AG 
ÉTÂN • ^_ ~ ~_" __" \ " 
Étane S.A. Denmark 
Italy 
Denmark 
Denmark 
Spain 
France 
Germany 
ETAN Belgium 
Greece 
Europabiiro der Deutscnen Kommunalen Selbsverwaltung 
Europe's J500 
European Association of Aerospace industries Europabiiro 
JEurope's 500 
AECMÀ Germany 
EBN_ _ 
Eurofer 
ÊCCRËDI 
EuroCase European Autorr^tjvejnitiative^roup *L^'G 
European Business and Innovation Centre Network 
European Confederation of Iron and Steel Industries 
European Council for Construction. Research. Development and Innovation 
European Council of Àppiied Sciences and Engineering 
European Economic Interest Group * ; ( ZEUS 
European Federation of Equipment Leasing Company Associations Leaseurope 
European Federation of technology & Innovation Consultants EFTIC 
European Fondation for Entrepreneurship Research _§^Ë^ 
European Independent Steel Works Association EISA Denmark 
Belgium 
Germany 
Belgium 
Luxembourg 
Belgium_ 
Belgium 
Greece 
Belgium 
France 
Belgium 
Belgium 
vT K 
European Industrial Researcn Managment Association EIRMA 
European Institute ot Social Studies * 
European Organisation for Researcn and Treatment ot Cancer EORTC 
European Organisation for Technical Approvals EOT A 
European Public Telecommunications Network Operators Association ETNO 
European Telecommunication Professional Electronic industry ECTEL 
European Venture Capital Association EVCÀ 
Eurostat " _ 
Fauconnier Jean-Marie, (architecte) 
Fédération Internationale des Conseils en Propriétés industrielles 
Federation of European Cancer Societies 
Federation of Smail Businesses - National Federation ot self empioyeo and 
Federazione Italians aelle Casse flurali e Artigiane 
FIAJAuto^ ~ ~~'_ ~- —^" ~ -—-
FIAT S.p'.A. 
Finmeccanica 
Finnish Forest Industries Federation 
Forbitec FICPI 
r-ECS 
FSET_ 
RAT 
FIAT France 
jtajy 
Belgium 
Belgium 
Belgium 
Un. Kingdom 
Belgium 
Luxembourg 
France 
Un. Kingdom 
Belgium 
Un. Kingdom 
Italy 
Italy 
Italy 
Italy 
Finland 
Portugal 
COTEC Ford-Werke _ 
Fraunhofer - Patentstelle fur die Deutsche Forschung 
Fraunhofer-lnstitut fur Systemtechnik und Innovationsforschung * 
Fundacion Cotec para la innovacion tecnologica 
Fundacion para el Desarrolïo de la Funcion Social de las Communicaciones Fundesco 
Gaz de France 
General Electric Compagny 
Générale de Placement Banque 
GlaxoWeilcome Pic 
GPVindustri '»""»" '""_ _ "1_~_ _ "~'""_"~ 
Groupe Ecole de Hautes Etudes Commerciales du Nord 
Groupement Européen des Caisses d'Epargne 
Groupement Européen des Entreprises d'Electricité 
Halarose of Oxford Germany 
Germany 
Germany 
Spain 
Spain 
France 
G.P Banque Un. Kingdom 
France 
Un. Kingdom 
Denmark 
EDHEC 
GECE" " France 
Belgium 
Eurelectric Belgium 
Un. Kingdom 
Handelsblatt - Wirtschafts und Finanzzeitung 
Haour Georges (professeur ) Germany 
Switzerland 
Hellenic Republic^ Ministry of Development 
Helsinki Inventors' Association Greece 
HEKE Finland 
Helsinki School of Economics 
Hessisches Ministerium des 
Hoescn - Krupp, AG 
Huber Edelstahl _ _ 
lb Andersen Industri ** 
IBM DeutschTand 
Ideon Centre . 
Industrie und Handelskammer zu Aachen 
Industry Research and Development Group 
Infobrief * 
Innovation Relay^ Centre - Northof England 
Innovatop Business Administration * 
Innern & fur Landwirtschaft, Finland 
Forsten, Germany 
Germany 
Germany 
Denmark 
IHK zu Aachen 
IRC North England Germany 
Sweden 
Germany 
Ireland 
Luxembourg 
Un. Kingdom 
Germany 
Institut Catala de Tecnologia 
Institut Français du Pétrole * 
Institut National de Recherche Agronomique * 
Institute for Managment of Innovation a_hd_Jj2chnology _ 
Institute for Material Researcn - Universitair Centrum Umburgs_ 
Institute for Strategic Consumer Research ICT 
jFP 
jNRA 
IMIT Spain 
France 
France 
Sweden 
Belgium 
SWOKA Netherlands 
Institute of Professional Representatives before the European Patent Office EPI 
Institution of jCivH |ngeneers 
instîtuto de Desevoivimento e inovacao Tecnologica ao Minho 
Instituto Superior de Economia e Gestao 
Instituto SuperiorTecnico 
Instituut voor Maatschappelijke Innovatie France 
IDITE Minho 
CEDE ""_ 
1ST Un. Kingdom 
Portugal 
Portugal 
Portugal 
_ IMI_ 
Instrument, Measuring,Technique Servicing and Trading Company Limited MTA/MMSZ 
Inter Primo ^ 
International Federation of Science Editors _ IFSE 
Istituto di studi sulla ricerca e documentazione scientifica- _Consiglio i ISRDS - CNR 
Istituto Sperjmentale per la Frutticoltura * 
Jular Impotaçào e comércio de madeiras, Lda _ 
Kiel Institute of_World Economics^ .* _ _ 
Knight Peter (consultant) Netherlands 
Hungary 
Denmark 
Italy 
Italy 
Italy 
Portugal 
Germany 
Kingdom Un. 
*r ?7 
Koff 
Koninkliike Hoogovens 
Kovacs llona (professeur) 
Kraft Malerwerkstàtten Gmbh 
Kredietbank 
Kreditanstalt fur Wiederaufbau 
Krog Iversen &Co * * 
Labbri Mirko.(project manager) 
Lacave Michel et Dei Castillo Jaime (consultants! 
Lahure Bernard (consultant) 
Lancashire Enterprises 
Lancaster Centre for the Study of Environmental Change 
Landesbank Berlin 
Larsson John (consultant) 
Library and Information Commission 
Lloyds f SB Group 
LPE JD Databank (Lex Poot) 
Lyonnaise des Eaux 
Magneti Marelli 
Managment Construction and Engineering 
Marks & Spencer 
Maroushkina Maria (consultante) 
Medinova ÀB 
Merck KgaA Darmstadt 
Micrel 
Minister of Education of Lithuania 
Mission of the Republic of Hungary to the Eurooean Communities 
M.O.A. Développement 
Monte deiPaschi di Siena 
Mordchelles Régnier G. (consultant) 
Morgan Bruce Sollicitors Tavocats) 
Morin Jacques (consuitant) 
Mulcahy Noel (professor) ARTA Denmark 
Netherlands 
Portugal 
Germany 
Belgium 
Germanv 
Denmark 
Italy 
Spain 
France 
Un. Kingdom 
Uji.JCingdom 
Germany 
Denmark 
LPE 
MACE 
M.O.A. 
Multi-Poles 
National Committe for Technological Development 
NatïônaiSchooï of Public Health _* 
Nestlé 
Nethold Finance 
Nonhoff Dieter (consultant) 
North East innovation Center Company, Ltd 
North Tyneside Council 
Nuclear Research Institute - Oepanment of Nuclear Technology 
Nutek 
nv Bank Nederlandse Gemeenten 
Observatory on Agricultural Research Systems * 
Oie Flensted Holding * * 
Omega Generation _ 
Organisation de Copération et de Développement Économiques 
ôsterreichische Patentanwaît Kammer 
OtatonKY~"~^ 
Otto Versana 
P.T. Holding "" "•""™1_. ZIII1ZZZZZI1IZ......"...1Z"I"I- Z 
Pateloup Monique (consultante) 
Patent-6ch Registreringsverket 
Pechinev 
Pentacie 
PFI-Prûf- und Forschungsintitut fur die Schuhherstellung * 
Piastre Robert (inventeur) 
Preussag AG j __;. 
Preussenelektra, AG 
Qazar 7 _ _ _ _ _ 
Rank Xerox _ ^_ _ _ _ ___ 
Renault _ __ _ ._ 
Repsoi, S.A 
Researcn ana Consultancy Services tor Food. Land, ana Environment 
RETI NET - University of Salford 
Reunanen Matti - Kunnioittaen (consultant) 
Roma Ricerche Un. Kingdom 
Un. Kingdom 
Netherlands 
France 
Italy _ 
Uo. Kingdom 
Un. Kingdom 
Russia 
Sweden 
Germanv 
Greece 
Lithuania 
Hungary 
France 
Italy 
France 
Un. kingdom 
France 
Ireland 
Luxembourg 
Hungary 
Greece 
Nutek 
IBV 
BNG 
OCDE 
PRV Switzerland 
Belgium 
Germany 
Un. Kingdom 
Un. kingdom 
Czech Rep. 
Sweden 
Netherlands 
Italy 
Denmark 
Italy 
France 
Austria 
Finland 
Germany 
Denmark 
France 
Sweden 
France 
SAC 
Réti-net France 
Germany 
France, 
Germany 
Germany 
Un. Kingdom^ 
On. kingdom 
France 
Spain 
Un. kingdom 
Belgium 
Finland 
Italy 
J*T VS 
RWE AG (Khunt Oietmar» 
Siemens AG 
Smithkline Beecham 
SNIA Ricerche 
Sociedad Êstatal para ei Desarolio del Diseho industrial 
Société de Caîcui Mathémathique 
Steelcon Chimney, Esbjerg * * 
Stephens David Huw (consultant) 
STOAS_ * ~ """ *'"/' *~ " ^~ 
StokisO_if_ 
Stratégie et Mutation (consultants) 
Strategiscne Studien der Transtormationsprozesse. Forschung una Beratung 
Studio Tempo, s.r.l 
Swedish Inventor Association 
Swiss Federal Institute of Technology at Zurich _ 
Swissair 
Tampere University of Technology 
Tech'Innove Exapnsion _ 
Technologie Beratung _ 
Technology Innovation Information _ 
f ËKÊS - Teknologian Kehittamiskeskus DPI 
SCM 
S&M 
ETHZ Germany 
Germanv 
Belgium 
ttaiv 
Spain 
France 
Denmark 
Uh. Kingdom 
Netherlands 
Belgium 
France 
Germany 
Italy 
Sweden 
Switzerland 
Switzerland 
Finland 
France 
Germany 
Til Luxembourg 
TEKES Finland 
Télédiffusion de France _ 
Telefonica 
The CIM Institute * 
The College of Management • 
Thomson Multimedia 
Totai _ 
Toy Manufacturers of Europe 
Trinity College - Dublin 
Unibus Rutertratik * * 
Unilever TDF France 
Spain 
Un. Kingdom 
Tel Aviv Israel 
TME France 
France 
Belgium 
Ireland 
Denmark 
Netherlands 
Union des Assurances de Paris 
Union des Banks Switzerland's UAP France 
_UBS_ 
UNICÊ Switzerland 
Union des Confédérations de l'Industrie et des Employeurs dMEurooe 
Union Européenne de l'Artisanat et des Petites et des Moyennes Entreprises UEAPME Belgium 
Belgium 
Union Française des Designers industriels 
Union Internationale des Associations et organismes techniques 
Unioncamere Piemonte _ 
Unité de Formation et de Recherche en Science Sociales * 
UniversidadI Nacional de Jducation a Distancia * 
Universidade Aberta 
Ùniversidade Autonoma de Lisboa 
Université degli Studi di Pavia. Dip.to di Elettronica, Prof. Franco Maloberti 
Université di Bologna * 
Université de Innsbruck _ _ _ 
Université de Lund UFDI France 
UATI France 
CTESI ltaly_ 
France 
Spain 
Portugal 
Université deJVilnius 
University College Gaiway ACLU 
UCG Portugal 
Italy 
Italy _ 
Austria_ 
Sweden 
Lithuania 
Ireland 
University of Hamburg 
University of Hamlstadt - ^gsl^nHalmstadt 
University of jCentral England in Birmingham 
University of Gôteborg * 
University of Iceland, Scientific and technical Information Services 
UniversityVf Sheffield (National transputer Support Ce_ntre> _ 
University of Sussex^^cience Poiicy Research Unit 
University of Sydney - Graduate School of Business 
University of Warwick J* _ 
Usinor-Saciior 
Veba, AG 
Verbindungsburo des Landes Sachsen-Ànhalt bei der Europàische Union 
Vew.XG (ZÏegier Fritz) 
Victoria HoldingJ/ersicherung, AG 
Vienna Ëconomics_ and BA University __ * 
Vijla'ReSTud_ __"._" _..__.. 
Voest Alpine Stahl Linz 
Volkswagen * . 
Volvo ÀB 
Vuman technology Services * Germany 
_HH 
UCÉ* Sweden 
Un. Kingdom 
Sweden 
Islande 
NTSC 
^SPRU" 
~GSB Sydney 
WRI Un. Kingdom 
Un: Kingdom 
Australia 
Un. Kingdom 
France 
Germany 
Belgium 
Germany 
Germany 
Austria 
Finland 
Austria 
Germany 
Sweden 
Un. Kingdom 
n 
Welsh Development Agency 
Wenzel Joachim (avocat) 
Wilson Roger (consultant) 
Wirtschaftskammer Osterreich 
Yorkshire and Humberside Regional Technology Network WDA 
WKO Un, Kingdom 
Germany 
Un. Kingdom 
Austria 
RTN Un. Kingdom 
Zentrum Mechanisierung &Technologie Germany 
jwr w 
2.1-B- Reaction of the Governments 
(Summary established by the Commission services) 
*%4 
THE AUSTRIAN GOVERNMENT'S RESPONSE TO THE GREEN PAPER ON INNOVATION 
The Austrian government welcomes the GP! ana finds it positive to see a broad 
definition of the innovation concept being used, which recognises the importance not 
only of technological factors but also issues such as organisation, management, 
participation, qualifications and culture, innovation is important for economic 
competitiveness, jobs and societal problems. 
From an Austrian perspective, social innovation snouid be given more emphasis, with 
an accent on the relationship between technology, innovation and employment. 
However, future actions should take into account the qualified work in innovation 
policy and employment of the different organisation in the Member States, as well 
as, the studies of the OECD. 
The debate raised by the GPI is a process which, in Austria, will be combined with 
finalising a national technology policy concept. The Austrian Government welcomes 
the fact that innovation has gained a central position in the preparation of guidelines 
for the 5° FP, and propose that, at Community level, the INNOVATION programme 
should play a leading and co-ordination roie. 
Subsidiarity 
The principle of subsidiarity must be the starting point for all considerations with 
regard to education, taxation, legal and other institutional characteristics. Caution 
should be raised against creating new bureaucratic procedures with which to tackle 
the individual Action Lines of the GPI. Pragmatism and recognition of the crucial role 
played by individual economic actors should be the guiding principle. 
Task Forces 
Task forces are considered useful however, attention should be paid to the financial 
contribution of the Union. Transparency and Member States' participation in decision 
making must be secured 
SMEs 
The 'supply side' must be better adapted to the real technology transfer and 
innovation needs of SMEs. Useful pointers in this direction would be to consider the 
notion of 'continuous innovation', better use of powerful IT instruments, acceptance 
of the long term perspective from idea to commercial realisation, and adaptation of 
the support programmes accordingly. (The contribution of the CREST Working Group 
on SMEs could usefully influence further work on the GPI). 
Orientation of R&D towards innovation 
The Austrian government is also convinced that: 
• innovation should be given a high priority in general in the Framework Programme; 
• organisational and structural innovations are at least as important as the 
exploitation of inventions; 
I •v 
* a European innovation Awara ana oossioie PR activities snouid be organisée by 
cne Commission m oraer TC oromote innovation among SMEs, as well as. the 
general public. 
The Austrian government is sceDticai on the -oie of a centraiiseO institution tor 
technology watch. 
Human resources for innovation 
The government, in principle, supports me GPI proposais concerning human 
resources, notably: 
the importance of teaching technoiogicai themes in schools; 
the need for better capabilities in communication and co-operation: 
the promotion of a better image of scientific and technological disciplines: 
life long learning; 
more attention to innovation management in education 
the enhancement of knowledge transfer and innovation through improved mobility 
of students, researchers and technicians/engineers; 
improved financial conditions for innovation 
For the Austrian government a distinction shouia be made between Business Angels 
(mainiv for smali companies), venture caoitai (for medium sized firms) and EASDAQ 
(for larger firms). Banks need to develop a culture oriented towards innovation and 
risk. More generally there is a need for stronger coherence and networking amongst 
different services for technology transfer, finance, management, organisation, 
technology, etc.. The instruments of the Structural Funds could be more effectively 
directed towards innovation. 
Fiscal subsidies are limited by national budget constraints and, in any case, they are 
subject to the subsidiarity principle. 
Create an environment favourable to innovation 
• It is better to reduce barriers to innovation than to create inefficient assistance for 
overcoming them. 
• The setting up of firms and innovative projects should be simpler: a general 
improvement of co-ordination between locai. regional, national and Community 
levels is necessary. 
• A culture of (de)regulation is required which takes into account the needs and 
possibilities of entrepreneurs. 
• The strategic use of patent is lacking ana should be made an element in patent 
policy at national level and in the European Patent Office. 
• Harmonisation of patents fees and lower fees for SMEs are recommended. 
• Use of licences as a marketing instrument should be better promoted. 
& n 
DANISH GOVERNMENT'S RESPONSE TO THE GREEN PAPER ON INNOVATION. 
The Danish Government welcomes the initiative of giving a more central role to the 
innovation perspective in policies for researcn and industry. The subject of 
Innovation has been topical in Denmark. The cultural context, social ana institutional 
innovation, regara for the protection of natural and energy resources, as well as 
information society impacts, are all part of the context in which the Danish 
Government welcomes a discussion of concrete actions. However, in its opinion 
there is a need for better use of analytical tounaation (OECD ana EU studies, for 
example) to harness a coherent strategy Tor innovation initiatives. The Danish 
Government agrees with the five general objectives of the GPI. with certain 
reservations: 
Community R&D policy should not be confounded with narrow industry policy 
objectives 
Improving the access to finance should primarily be seen as a national concern 
In general, the actions at Communitv level must respect the principle of subsidiarity 
and therefore be justified by their European dimension, as for instance in the case for 
standards, IPR or especially expensive R&D. 
The following specific points are raised witn regard to the GPI action lines. 
Technology Watch will become more and more important for decision makers in 
the public and private sector. Community efforts should aim to develop 
cooperation and methodology in this discipline between the various national 
institutes. 
Priority areas for EU R&D should be defined with more attention to the demand 
side. 
Education must remain the concern of each individual MS however whilst 
rooted in the traditions of MS culture it could incorporate a European mutual 
recognition of skills and merits. 
Whilst agreeing with the benefits of mobility, such schemes must not become 
obligatory. Noting that the TMR programme has not achieved a sufficiently 
industry orientated dimension, such schemes must have different and realistic 
means of meeting different needs. 
Special attention is needed towards administrative and economic barriers for 
SME participation in RTD programmes. The Coordination of the Commissions 
own instruments such as Relay Centres and CRAFT is worth considering. 
Fiscal instruments should not be introduced at Community level but increased 
transparency of innovation and company related credits would be welcome. 
The primary aim of the Danish Governments Industrial policy is to encourage 
innovation in enterprises, especiailv in SMEs and at regional level. SMEs wno 
generally suffer from a lag in comoetencies and management remain a major 
*H 
concern and internal reinforcement. networK and clusters are cited as key 
issues in this regard. 
The objective of developing 'Economic intelligence' is an area in which the 
Danish Government would be keen to develop further experience. 
1* 
THE GERMAN GOVERNMENT'S RESPONSE TO THE GREEN PAPER ON INNOVATION 
The German Federal Government welcomed the publication of the Commission's GPI 
and reported that the 'Innovation Debate' had been going on in Germany for a 
considerable time. There is a strong recommendation from this response that 
innovation issues should be managed at Member State and Regional level for best 
results. It was also highlighted that the exchange of information and experience 
between Member States was of vital importance. It was felt that the Commission 
could undertake the coordination to initiate such dialogues. 
It made particular reference to the following German initiatives the experience of 
which it felt could be of value to the European innovation debate: 
• The Koopman report deals with the formal presentation and effectiveness of 
regulations 
• The INSTI programme (Innovationsstimulierung der Deutschen Wirtschaft durch 
wissenschaftlich-technische Information) the aim of which is to help stimulate the 
German economy by providing relevant scientific / technical information 
• The Delphi technology foresight initiative has operated successfully at national 
level 
Each Member States' education system is unique, however it should contain basic 
Information Technology Skills, legal / commercial studies. It should equip those that 
have the ability and will to pursue individualised career paths. 
Technology watch activities are more successful if carried out at national level and 
Community coordinated comparisons made. Ultimately the decisions on what 
technologies are of most important are the responsibility of each individual business. 
Regular Innovation surveys in each MS were not were not recommended at this 
point. 
The German Government agrees with issues relating to intellectual property and 
points out that patents are often a key factor in obtaining finance. It suggests that 
to illustrate to the public the true cost of patent infringement, estimation of the social 
costs should be illustrated e.g. loss of profit for industry and subsequent 
unemployment. It agrees in principle with Community. In the field of education, wide 
use of utility models. 
It advocates greater transparency between MS on the content of courses rather than 
concentrating on the mutual recognition of the end product, e.g. qualifications. 
In order to enhance the mobility of researchers and students it suggests that EU 
structural funds be used to employ graduates or school leavers as innovation 
assistants. 
The simplification of administration procedures was welcomed and it was suggested 
that a seminar with industrial participation should be established to 'Brain Storm' on 
how to simplify procedures. 
*lb 
Whilst in agreement with the conceot mat researcn efforts snouid be better directed 
towards innovation, care must be taken mat this does not hinaer creativity or 
decrease the level of basic science in particular, at Community level. 
• The EU R&D programme should concentrate on a few specific areas of strategic 
importance to Europe's future: 
• EU R&D should be reserved for larger, nigh risk projects that could not be tackled 
at national level: 
• The objectives of each R&D programme snouid be cieariy defined with particular 
emphasis on their impact on the areas of strategic importance: 
• EU Structural Funds to be targeted for innovative means: 
• There is also agreement with the target that each MS increases its R&D 
expenditure to 3% of its GDP 
The German Government agrees that the benefits of innovation need to recognised, 
particularly by the gênerai public and ceiieves that the suggestions in the GPI do not 
go far enough. It suggests the following actions. 
• the impact of the EU R&D programmes to day to day life should be illustrated to 
the public. 
• examine the possibility of getting a group of PR consultants to put in place a 
series of practical measures to Dromote a positive image of innovation, possibly 
using modern IT methods. 
• In future such measures should accompany the Framework Programmes. 
*r ?1 
THE SPANISH GOVERNMENT'S RESPONSE TO THE GREEN PAPER ON 
INNOVATION. 
General comments 
The Spanish Government welcomes the Green Paper. It approves the horizontal and 
integrated approach of the Paper and shares the need to articulate a European 
strategy to foster innovation. Although the Spanish Government shares in general 
the analysis undertaken of the situation in Europe, it regrets that the Paper does not 
fully exploit certain pointers given in the "White Paper on Growth, Competitiveness 
and Employment", such as: the economic fracture between large companies and 
SMEs, the social fracture, etc. In particular the poor treatment given to innovation as 
foundation of a long standing technological, social and economic cohesion, is 
considered inadequate. 
The Green Paper limits itself to addressing the main obstacles and challenges to 
innovation without a proper framework proposal to foster innovation. in the E.U. 
Finally more attention should be given to initiatives to promote technology transfer 
among regions and (traditional) sectors, to strengthen the competitiveness of SMEs. 
Specific comments 
/. Route of action 1: to develop technology monitoring and foresight. 
The role foreseen for the Institute for Prospective Technological Studies (IPTS) 
should be wider. 
2. Route of action 2: to better direct research effort towards innovation. 
• The Programme Committees should address task force activities. 
• Early SME participation in R + D activities, not only on application results. 
• Among the parameters for the monitoring and evaluation of research 
programmes, social and economic cohesion and improvement of living 
conditions should be included. 
3. Route of action 4: to further the mobility of students and researchers. 
Actions should be designed to attract (and retain) skilled human resources to less 
favoured regions. 
4. Route of action 5: to promote recognition of the benefits of innovation. 
Traditional media (T.V., radio, press ...) should be used to promote the public 
awareness in this field. 
5. Route of action 7: to set up a fiscal regime beneficial to innovation. 
In the context of public deficit reduction, a previous thorough analysis of the 
budget cost of new schemes should be compulsory. 
6. Route of action 8: to promote intellectual and industrial property. 
Research centres (public and private) should also be the beneficiaries of promotion 
policies. 
"%% 
7. Route of action 9: to simp/if y administrative procedures. 
The Commission's views are fully shared. 
8. Route of action 12: to encourage innovation in enterprises (SMEs) and strengthen 
the regional dimension of innovation. 
The necessary inter-regional cooperation and the coordination role of national 
administrations should be strengthened. 
9. Route of action 13: to update public action for innovation. 
Direct public support instruments should also be encouraged. 
Finally innovation policies should be addressed at the level of Heads of 
State/Governments, as the appropriate political forums to incorporate innovation 
issues into Council Minister's agendas. 
""39 
THE FINNISH GOVERNMENT'S RESPONSE TO THE GREEN PAPER ON INNOVATION. 
The Finnish Government welcomed the GPI ana wanted to share the experience it 
has gained at Member State level with the Community and to actively participate in 
the follow up work associated with this publication. The following current initiatives 
in Finland- have proven particularly successful and may be of interest to other 
Member States. 
(i) National High Technology Mentor Programme has been introduced and tested 
with promising results. Experienced industrialists rate interested SMEs and 
issue a "European Venture Capital Certificate" to facilitate discussions with 
financiers. This approach has been prepared in co-operation with the 
Commission. 
(ii) Kera (the Regional Deveiopment Fund) has recently introduced a publicly funded 
small (under 20,000ECU) quick loan facility with very low security 
requirements for new companies, it has been very well received by SMEs. 
The Finnish Government supports the rapid increase of R&D expenditure. Europe 
cannot compete with Japan and US unless this expenditure reaches approximately 
3% of GDP. To enable favourable deveiooment of a European innovation policy and 
promote the industrial competitiveness of Europe; the R&D expenditure should be 
increased both on a national level and European level. The ideas on improving 
European innovation processes must be incorporated into the fifth FWP to ensure its 
impact on European competitiveness: There is a need for external assistance in 
evaluating innovation; making market analysis and in other issues where the SMEs 
have insufficient competence. 
It supports the establishment of the EASDAQ and suggests that technology rating at 
a European level be experimented with and such knowledge disseminated. It also 
recommends that banks should develop skills and knowledge about the technologies 
and the specific financing issues that arise for technology based companies. TEKES 
is about to embark on the use of a new financing instrument called an equity loan. 
This loan is calculated as the company:s own equity capital, thus improving the 
company's balance sheet. Use of regionai development funds should be directed to 
R&D projects at the national level. 
It does not support the role of the IPTS in technology monitoring and would prefer to 
see current national systems used ana experience exchanged. 
Innovation in the service industry should be encouraged. The service sector should 
be included in the innovation financing systems and be treated on equal level with 
industry, as it is at least as important for employment. 
The following elements relating to innovation should be carried out at Community 
level: 
(i) preparation of common standards, directives and global agreements, 
(ii) mechanisms and cooperation forums that help MS and their enterprises to 
learn from the experience of each other, 
(iii) projects that are so wide or expensive that one country alone could not 
undertake them. 
So 
(iv) new common legislative and regulatory elements (e.g. European Company 
Statute), 
(v) coordination of EU innovation policy activities with other Union measures 
(e.g. structural funds, industrial policy). 
j/f 
COMMENTS BY THE FRENCH AUTHORITIES ON THE GREEN PAPER ON 
INNOVATION 
The Green Paper on Innovation is a useful contribution to public depate and an 
undogmatic statement on the important subject of innovation. 
Innovation and subsidiarity 
Innovation is a good example of a clear application of subsidiarity (innovation is first 
and foremost the responsibility of companies and founders of companies, since it is 
they, not governments, which have good ideas). European Union involvement in 
innovation is justifiable primarily for companies active on the European and world 
markets. Access for SMEs to European programmes needs to be improved. 
Analysis of the Green Paper 
In order to improve the private financing of innovation in SMEs. France has taken risk 
capital support measures such as the creation of the Nouveau Marché (1996). 
Studies of tax reforms aimed at innovative companies are under way, together with 
an incentive for pension funds, once set up, to invest some of their resources in 
innovation. 
France emphasises that it would be in favour of a Community patent (ratification of 
the 1992 agreement on the Community patent). 
Simplifying administrative procedures is still a matter for the Member States. 
The Commission analysis of the inadequacv of research input is pessimistic. In 
France, large sums have been invested in research at both national and Community 
level. 
France feels that basic research should be subsidised by the State in order to 
guarantee, inter alia, a link between basic research and the development of new 
products. 
France regrets that the Green Paper does not cover profit-sharing by researchers or 
nursery schemes. 
Action paths of the Green Paper 
France notes that the Green Paper lacks specific proposals and practical action which 
could be taken by the Commission. 
The Green Paper makes little mention of the Framework Research and Development 
Programme, and the over-rigid separation between Action 3. "Dissemination and 
exploitation of results" and Action 1, "Implementation" of research programmes, is 
regrettable. Better coordination between these two initiatives would be desirable in 
the Fifth Framework Programme. 
France also calls for more clarity in the objectives of the Framework Programme, 
which should promote our competitiveness in science and technology and cannot 
simultaneously play a specific coordination role (which is more a task for the ERDF). 
France welcomes the excellent Task Forces initiative. 
H 
France has more reservations about the emergence of new observatories such as the 
"European Innovation and Rural Development Observatory'' and the "European 
Observatory of Innovative Practice in Vocational Training". 
Strengthening the Seville Institute is not a priority. On the other hand, France 
suggests that more could be made of the forecasting efforts of the Member States, 
such as "Technology Foresight" in the United Kingdom and "100 Key Technologies" 
in France. 
France wishes the European Union to act as a coordinator and to ensure that there is 
consistency between public initiatives and private input which will, within the 
Framework Programme, support the industrial research financed jointly by the 
Commission and manufacturers or public laboratories. The Commission could thus 
give basic research a genuinely European dimension and boost the development of 
key technologies. 
*f 9% 
THE IRISH GOVERNMENT'S RESPONSE TO THE GREEN PAPER ON INNOVATION. 
"he Irish Government welcomed the GPI ana agreea in principle with the main thrust 
of its contents. The following points illustrate the Irish Government's point of view 
in relation to specific items: 
(i) There is a limit to the capacity of Member States to mount extensive 
Technology Watch exercises, thus it wouid be bénéficiai if this activity 
could be carried out at the EU level concentrating on 'technology push' 
(ii) Task Forces as currently presented would oniy stimulate innovation in 
certain sectors or countries. It is suggested that the method of selection of 
Task Forces should reflect the needs of ail Member States. 
(iii) The importance given to SMEs in the GPI is welcomed and the Irish 
Government, under its EU Presidency has been instrumental in having a 
Working 
Group of CREST establishea to examine ways of encouraging greater SME 
participation in EU researcn programmes. Whilst a number of Routes of 
action would also facilitate improving conditions for SMEs, it was stressea 
that a more interventionist policy was required to extract ideas ana 
knowledge in research institutes into the commercial phase. Current 
policies in Finland and Israel were cited as examples. 
(iv) The perception of science, technology and innovation must be improved 
amongst decision makers, industry and the public. The whole concept of 
learning needed to be instilled as part of the innovation process. Training 
was considered too specific an activity to achieve this mentality. 
(v) Financial incentives were considered most critical and proposals to establish 
EASDAQ. bank guarantees in favour of innovative SMEs by the EIF and the 
creation of multinational seed capital funds were welcomed 
(vi) The importance of technology transfer was emphasised ana it was 
suggested that a dedicated set of actions be drawn up to emphasise that 
the absorption of tecnnoiogy, regardless of whether it was created inside 
Europe or outside can often be a more relevant solution for firms than 
internal R&D. 
(vii)The STIAC (Science, Technology and Innovation Advisory Council) review 
emphasised the importance of linkages and networks, particularly to 
overcome the disadvantage of small scale 
X^y 
THE ITALIAN GOVERNMENT'S RESPONSE TO THE GREEN PAPER ON INNOVATION. 
The Italian Government welcomed the Green Paper on innovation and agreed with its 
conclusion and proposed action. It feeis that the GPI and the Synthesis Conference 
in Rome (30 May 1996) were useful opportunities to raise awareness on various 
matters related to innovation in Europe. 
The Italian Government agrees that investments in science and technology should be 
made according to the needs of society and/or industry. 
It suggests that, apart from the barriers to innovation considered in the GPI, future 
action should take into account sectoral barriers to innovation, i.e. those relating to 
specific sectors of industry such as assembly, manufactured goods production and 
mature industries. 
It suggests that particular attention be paid to encouraging the protection of 
European Union intellectual property. 
3T 9\ 
THE NORWEGIAN GOVERNMENT'S RESPONSE TO THE GREEN PAPER ON 
INNOVATION. 
The Norwegian Government welcomed this initiative to enhance the innovative 
capacity of Europe. The following points highlight its opinions on critical factors 
emanating from the debate. 
(i) Efforts on technology watch should be better coordinated ana the work of 
institutes like iPTS should be wideiv disseminated. 
(ii) Further work in the area of statistical innovation surveys is required. Such 
work should be more closeiv linked to OECD work. 
(iii) The Community should play a key role in developing new and transparent 
skills recognition systems 
(iv) The development of a European capital market. EASDAQ. was welcomed 
(v) Concerned at European companies moving their R&D activities outside of 
Europe due to inhibiting legislation e.g. intellectual property iaw. Further 
initiatives in this area should be closely linked to OECD & WTO initiatives 
and coordinated between national and communitv levei. 
(vi) Exchange of experience in the field of regional conditions for innovation 
should be strengthened 
The Norwegian Government points out the fact that skills to analyse and identify 
economic intelligence are in short supply and need to be strengthened. It also 
stressed that a European innovation policy for the 21st Century must include a 
deeper analysis of the innovative capacity of the service industry. 
** a / 
THE PORTUGUESE GOVERNMENT'S RESPONSE TO THE GREEN PAPER ON 
INNOVATION 
1 Policy of Innovation 
The tormuiation of the "European paraaox" involves a iinear ana out ofdate vision ot 
the phenomenon of innovation. The R&D ooucies and a possible Community 
innovation Policy can neither remeav the gaps ot the inaustnai Policies ana of 
Enterprise Policies, nor solve maior orooiems. such as the distribution ana 
demonstration, which are of a prime necessitv for tne SMES. For Portugal, the 
transfer of resources of the R&D programmes towards a Policy of Innovation appears 
to be missing viability at the political and economic levels. 
2. Growth and Employment - social and organizational Innovation 
Portugal considers that the green Paper tackles only in a limited way the problem of 
the links between innovation, growth and employment. It is not the technologies 
which can solve the problems of the organizations, or which create new 
opportunities for the companies, but their innovative application in way, including the 
new forms of social and organizational innovation. In this respect. Portugal also 
wishes the implementation of actions referring to town planning and to the 
revitalization of the rurai areas, teacning and the training, health and proolems of the 
3rd age. 
3. Financing 
Portugal considers that the creation of a framework favourable to the operation of a 
European financial market should be envisagea, bv encouraging the creation of 
European venture capital companies to finance the companies offering innovative 
goods and services. At the same time, it gives its assent for the creation of a market 
of the type EASDAQ. 
4. Taxation 
In order to be able to create a system of tax incentive articulated with the national 
systems of direct aid, Portugal suggests that action should be taken at the level of 
the tax harmonization for reasons of competition, in view of the increasing 
homogeneity of the regulations and in view of the conaitions of investment in the 
single market. 
5. Transnational networks between companies 
Portugal stresses the lack of encouragement and of Community support (in particular 
in the SMES) allowing the participation of the companies of the countries the least 
advanced in shared cost transnational projects, gathering major companies and SME. 
Consequently, it proves necessary to promote, within the SMES, the knowledge of 
the European markets, and of the methods of access to the R&D Community funding, 
and to develop cooperation networks. 
i 
6. Task forces 
The laudable intentions to coordinate and articulate between the various programmes 
which justify the creation of the Task forces suffered from the lack of transparency 
of their selection and financing procedures, thus generating confusion in the debate 
between the green Paper on innovation, the financial aid for the 4th. PCRD, and the 
beginning of the discussion of the 5th PCRD. However, Portugal is favourable to the 
Task forces concerning the intermodality of transport, maritime transport and 
multimedia educational software. 
* 9} 
THE DUTCH GOVERNMENT'S RESPONSE TO THE GREEN PAPER ON INNOVATION. 
The Dutch Government is in full agreement with the main points outlined in the Green 
Paper on Innovation. Recent studies undertaken in the Netherlands have enabled this 
country to have experience in almost all the Routes of Actions described in the GPI. 
Conscious of the principle of subsidiarity the Dutch Government feels that activities 
at Community level should only be considered if a project transcends the national 
dimension or if they arise directly as a result of Community policy or regulations. 
The following points illustrate the Dutcn Government's view on key policy areas: 
(i)Cautions against the use of European funds as investment capital 
(ii) Welcomes the formation of EASDAQ, on condition that such an exchange is 
left to the market 
(iii) Cautions against European prises or certificates until the value of such 
Community initiatives become clearer 
(iv) Endorses the key issues relating to permanent education and emphasises 
the need to establish methods of mutual recognition of training and skills of 
each MS. 
The Dutch Government points out that the inclusion of issues of a general nature e.g. 
administrative costs, labour / patent law etc. which are often addressed in separate 
regular consultative forums, specifically set up for that purpose. It is imperative that 
innovation is included on the agenda of these forums. 
"W 
SWEDISH GOVERNMENT'S RESPONSE TO THE GREEN PAPER ON INNOVATION 
The Swedish Government was concerned at the very technical slant to innovation 
that was presented and stresses that innovation influences every aspect of life. It 
particularly emphasises the role of schools in the creativity of individuals and 
suggests that work by the OECD couid be of interest on this subject. It feels that all 
the Routes of Actions are geared to improved economic performance through 
innovation and while this is commendable there are societal needs to be addressed 
which will also require very innovative approaches e.g. care for the increasing 
numbers of elderly people in the population. Organisational innovations were also 
considered lacking. 
A few specific points gives an indication of the Swedish Government's opinion of the 
GPI. 
The role of the Commission in improving European Innovation should be limited 
to activities which are not viable to undertake at national level. One major area 
would be the coordination of transfer and exchange of experiences and 
knowledge between Member State. 
The contents of the thirteen Routes of Actions contain nothing new. Such 
information has been tried and tested for some considerable time, often not 
succeeding in contributing much to innovation. 
It is concerned that the ratification of the European patent convention might not 
be such a positive approach. 
It recommends that the work on innovation which has been undertaken by the OECD 
should act as a focal point for any further innovation activities undertaken by the 
Commission. 
36 
UK GOVERNMENT'S RESPONSE TO THE GREEN PAPER ON INNOVATION 
The UK welcomes the Commission's initiative to prepare and publish the Green 
paper. UK particularly welcomes the recognition of the need to build on the 
successful experience of individual regions 3nd countries to spread best practice 
throughout Europe. Moreover, UK welcomes the emphasis on the need to learn from 
each other through the exchange of best practice, rather than on all Member States 
necessarily doing the same thing. 
In particular at the Community level, UK welcomes and supports the Commission 
addressing deregulation, streamlining of procedures and competition, as well as the 
use of private contractors and decentralisation. There is room to increase the 
effectiveness of existing actions and initiatives within the Community and for better 
coordination between EU activities. 
Better direct research efforts towards innovation 
Mechanisms linking basic research and innovation are essential. However, little 
attention has been paid to incremental innovation which is particularly important 
when considering innovation in SMEs. 
The UK is strongly in favour of effective interprogramme cooperation. Task forces are 
found to be helpful in the recognition of useful areas for cooperation. However, the 
operation of the first round of Task forces has raised a number of concerns. 
Welcomes the proposal to include in the IV FP monitoring and evaluation procedures 
an assessment of the impact of innovation. 
Agrees with the need to take innovation factors into account in V FP, but is unclear 
about how the Commission intends to do that. 
There is no need for a new Community information programme. 
The scope for adding value through technology monitoring and foresight at a 
Community level is relatively limited. 
Reinforce human resources for innovation 
The recommendations are relevant. However. Member States will have a range of 
different priorities and approaches to improving their training systems. 
Public authorities, at either national or Community level are not best-placed to 
identify skills and qualifications needed by businesses. There is no justification for 
setting up a new institution which would duplicate the work already undertaken. 
There is no case for any increased funding of TMR, .nor justification for creating 
further initiatives. 
*/[GO 
Improve the conditions for the financing of innovation 
The suggested mechanisms should be developed within the private sector. 
Experience shows that lack of access to finance is seldom a main barrier to innovate, 
though it is often used as an excuse. No objections however to proposals to allow 
the EIF to invest in equity. 
Taxation issues are primarily a matter for Member States at national level under the 
subsidiarity principle. 
Foster a legal and regulatory environment favourable to innovation 
Supportive to efforts in international forums to achieve harmonisation, where such 
measures are likely to lead to an improvement in the trading environment and/or 
greater efficiencies or reduced costs in the IPR system. 
The UK supports the promotion of patent information services as a method of 
technology watch. 
The UK fully supports the streamlining of administrative procedures at the 
Community level. 
No opposition, in principle, to a European Company Statute (ECS). However there is 
no justification for a separate form of ECS or EEIG for small or for innovative 
companies. 
Control of state aids should be a major priority for the Commission. In principle, the 
UK fully supports the Commission efforts to restrict the levels of state aid to large 
investment products. UK welcomes and fully supports the Commission's proposal to 
continue to have competition rules which facilitate technology transfer. 
Adapt the role and modalities of public action regarding innovation 
The UK Supports the objective of fostering cooperation among enterprises and 
strengthening groupings Encouraging an internationaily-minded approach among 
enterprises is an important issue. 
Framework Programmes should not be used to support regional actions which are 
best carried out through the use of Structural Funds. 
There should be proper evaluation of Community, national and regional investment in 
innovation. Regional and national initiatives should be evaluated by Member States, 
welcomes the Commission facilitating exchange of best practice between regions and 
countries. 
^/fo/» 
2.1-C- Reaction of the Institutions: 
(Summary established by the Commission services) 
1. Parliament 
2. Economic and Social Committee 
3. Committee of the Regions 
/ A°& 
1, Comments from the European Parliament 
The European Parliament has welcomed the Green Paper and its Action Routes, and 
is keen that measurable results should foilow. in a 35-point resolution, the Parliament 
calls among other things for: 
Dissemination and exploitation of RTD results 
• Better diffusion of technical know-how, including more support for the Innovation 
Programme and the programme for the Stimulation of the Training and Mobility of 
Workers. 
• A new Task Force to foster dissemination and exploitation of RTD. 
• Focus on research that is interdisciplinary, application-oriented and network-
driven, or that covers industries currently too small to be self-supporting in 
research. 
• Greater use of information technology, the foundation to be laid by having 
Internet access for all schools. 
• Priorities to be set based on a better knowledge of the innovation process, 
founded on quantitative innovation indicators. 
• A permanent review of national 'best practice' encouraging innovation in the 
Member States. 
Monitoring of RTD 
• Improved cooperation as regards national and EU research policies. 
• The Joint Research Centre's Institute for Prospective Technological Studies to 
have a key role in developing network links between centres engaged in similar 
activities. 
Economic and financial considerations 
• Member States to review their fiscal regimes with a view to promoting innovation. 
Suggestions include Japanese-style regulation of domestic financial markets, 
longer payback periods for investment, and cheap loans to innovative companies. 
• More competition within the internal market, preventing large companies from 
dominating markets and subsidies. 
• Independent technical assessments to give banks a better understanding of 
technology-based firms. 
* A**> 
Administrative and legal constraints 
• Simplification of administrative procedures at both national and Community level. 
The Commission's SLIM initiative (Simpler Legislation for the internal Market) is 
welcomed, and the Parliament aiso calls for consideration of further administrative 
simplification of the research framework programmes. 
• Early adoption of the European Company Statute. 
• Patent protection periods that vary according to the product type, so as to 
balance innovation (helped by patents) with competitions (hindered by patents). 
Encouraging SMEs to innovate 
• Support for innovation at the regional levei. and programmes to encourage SMEs, 
to cooperate with universities, industrial research centres, and big enterprises 
• Attention to be paid to the roie of intermediary organisations such as banks, 
consultants, marketing cooperatives and technical colleges in helping small firms. 
• Structural Funds to be oriented towards innovation. 
• Recognition that SMEs are not a homogeneous group, so that poiicv should 
respect their differences and be targeted on the basis of size and sector. 
• Help for SMEs to reduce the financial risks of innovation, including support from 
the European Investment Bank 
Social, educational and training aspects 
• Better communication between researchers and the public, especially through 
public broadcasting. Funding should carry a responsibility to communicate 
research findings to the public. 
• A more consumer-oriented research policy. 
• Greater involvement of the workforce in the innovation process, through 
education and direct participation. 
• Attention to 'incremental' innovation, which can be just as important as products 
that are fundamentally new. 
• Emphasis on the integration of innovation in education and vocational training, 
and a new framework for future innovation-based professional qualifications. 
Task forces and innovation 
• Debate on the goals of the Task Forces and the establishment of clear links 
between their work and the Green Paper's Action Routes. 
$oir 
2. Opinion of the Economic and Social Committee 
The Economic and Social Committee welcomes the Green Paper and feels that an 
integrated horizontal approach is essential for the success of any innovation policy. 
It considers that encouragement of innovations must become the principal objective 
of decision-makers, as this is the key to improving competitiveness, employment and 
development, and that joint action must be taken at European level, while respecting 
the principle of subsidiarity. The Committee also considers that innovations are also 
key factors in economic and social cohesion. 
The Committee stresses the importance of the entire research system, backed up by 
technology foresight. 
The Committee feels that there should be greater reliance on a bottom-up approach, 
that more attention should be paid to the point of view of potential users, and that 
interaction between researchers and users should be promoted. 
Resources should be concentrated in joint fields and projects which are of essential 
importance. Cooperation is essential, since effective use of the resources is more 
important than their quantity. Efforts should be concentrated and priority given to the 
objectives. 
The Committee considers that conditions favouring innovation come about as a result 
of integrating firms, research centres and other factors on a scale that is large 
enough to generate "critical mass". 
The Committee feels that innovation policy must improve the opportunities for the 
most poorly equipped firms to join innovation networks. 
The Committee stresses that innovation policy within a firm or in any other structure 
requires the participation of all employees, in particular through further training and 
an atmosphere which is open and conducive to cooperation. 
Of the issues which the Commission reviews and which are favourable to innovation, 
the Committee feels that: each new proposal for legislation should be assessed with 
regard to its effects, a sustainable demand must be created in sectors important for 
society, and market rigidity must be reduced. 
In the view of the Committee, among the most important areas for action are: 
orientation of research, supported by technology foresight, training, financing, 
taxation, openness of markets and dissemination of innovation to SMEs. 
The Committee considers it necessary to promote synergy between research, 
industrial and other policies. 
The Committee thinks that the Green Paper stresses cooperation between research 
centres and firms but fails to take account of factors such as cooperation between 
different departments within a firm, the fact that a firm's potential increases with the 
quality of work for employees, the firm's staff policy and the distinction between 
internal and external mobility. 
As regards the routes of action in the Green Paper, the Committee has the following 
comments to make: 
*4oï 
Route of action ~i • Technology watch ana foresight. Institutes involved in 
prospective technoiogicai studies in the Memoer States snouid be encouragea. 
Route of action 2 - Orientation of researcn towaras innovation. The authorities have 
the right to intervene, particularly in sectors important for society, where the market 
itself wouid not generate demand, by using task force-type activities. 
Route of action 3 - Initial and further training. There must be a move towards 
ongoing improvement. The Knowledge Resource Centres protect should be iaunched, 
the purpose of wnich is to act as an interface oetween tne supply ana aemana for 
information in the brancn of training in question. 
Route of action 4 - Furthering the mobility of students and researchers. Mobility 
between different sectors and within individual countries must be promoted. 
Route of action 5 - Promoting recognition of the benefits of innovation. Any 
campaigns to heighten public awareness must be based on a thorough understanding 
of the factors involved. 
Route of action 6 - Improving the financing of innovation. Everything should be done 
to ensure that SMEs have the same financing conditions as those enjoyed by large 
firms. 
Route of action 7 - A fiscal regime conducive to innovation. When enacting or 
amending the tax system, any negative effects this mav have on innovation must be 
considered. 
Route of action 8 - Promotion of intellectual and industrial property. A European 
patent system should introduced. 
Route of action 9 - Simplification of administrative procedures. It is high time that 
concrete measures were taken. 
Route of action 10 - A favourable legal and regulatory framework. Account should be 
taken of innovation needs in EU competition policy. European standards concerning 
health, the environment and safety should be strict and binding. 
Route of action 11 - Development of "economic intelligence" action. The task of the 
authorities is to facilitate more education in this area. 
Route of action 12 - Encouragement of innovation in enterprises, especially SMEs, 
and strengthening the regional dimension of innovation. Economic and social 
cohesion is a key objective of the Union, and subsidiarity is its guiding principle. 
Route of action 13 - Updating public action for innovation. Action is increasingly 
being directed towards cooperation with the different segments of society. 
"/tot, 
3. Opinion of the Committee of the Regions 
The Committee of the Regions welcomes the Green Paper and thinks that it is 
necessary to achieve genuine coordination of measures to disseminate know-how 
and exploit results, while respecting the principle of subsidiarity, it welcomes the 
importance attached to local and regional authorities. 
The Committee approves of the idea of a proactive policy on innovation and 
mobilising local operators, as this is essential for maintaining and strengthening 
competitiveness and creating jobs. The locai and regional authorities bear a major 
responsibility for this mobilisation. 
As regards support for innovation, iocai and regional authorities must be involved in 
setting up a legal, economic, financial and training environment that is conducive to 
innovation. The Committee insists on the priority which the authorities must give to 
financial support for research centres and innovation. Private financial circles must 
also be made more aware of the challenges of innovation. Finally, rules governing the 
intervention of the structural funds in financing venture capital must be clarified, so 
that this tool can become operational. There is a need to develop policies to 
encourage innovation with a view to improving manufacturing processes, creating 
new industrial and tertiary-sector products and setting up training schemes as part of 
a policy to support SMEs. The European Union has frequently supported efforts by 
local and regional authorities in this field. Finally, regional education and training 
programmes must help to provide training in innovation, supported in this by the 
Socrates, Leonardo and INFO 2000 programmes. 
The Committee considers that dissemination of the results of innovation contributes 
to economic and social cohesion, and that improved spatial restructuring will result in 
the networking of regional innovation systems. Local and regional authorities must 
promote the establishment of links between research centres, universities and 
industry for the purpose of developing networks for exchanging information and 
experience at regional, transregionai and cross-border levels. Mechanisms for 
assisting innovation should not be confined to research and development, but should 
also extend to the marketing and industrialisation phases. There is a need to set up a 
regional technology watch policy. The Committee considers that the European 
network of Innovation Relay Centres must reach a critical size, in geographical terms, 
and that, as part of the simplification of the schemes to provide aid and for the 
dissemination of research results, these centres could act as "one-stop shops" for 
SMEs. 
As regards the routes of action in the Green Paper, The Committee has the following 
comments to make: 
Route of action 1 - To develop technology monitoring and foresight. The information 
collected and processed by the Seville Institute for Prospective Technological Studies 
must be exploitable at regional and local levei. 
Route of action 2 - To better direct research efforts towards innovation. Local and 
regional authorities must set up SME monitoring and watchdog organisations with a 
view to increasing SMEs' capacity for research into new technologies. 
'/fol 
Route of action 3 - To develop initial and further training. Regional ana local 
authorities can familiarise voung people with innovation, witn the tinanciai support of 
the European Union, and develop researcn cooperation between 'irms and 
educational establishments. 
Route of action 4 - To further the mooilitv of students and researchers. The 
Committee emphasises the importance of mooility and underlines the role,of local ana 
regional authorities, who are aoie tc forge cooperation iinks between the regions of 
Europe. 
Route of action 5 - To promote recognition of the benefits of innovation. The 
Committee would like to see local and regional authorities kept informed of 
successful experience in innovation. 
Route of action 6 - To improve the financing of innovation. It is important to make all 
the financial partners aware of the need to overhaui their aid machinery and to 
introduce mechanisms for encouraging them to become involved in innovation 
projects. 
As regards routes of action 1, 8. 9 et 10, tne Committee approves the proposal to 
consult local economic and social operators on the establishment of a tax. 
administrative and legal environment conaucive to innovation. Regional seminars 
could be organised as part of measures to simpiify the business environment. 
Route of action 11 - To develop economic intelligence actions. The budgets of 
regional schemes in this field must be increased, whether for back-up for advisory 
services, continuing training or assistance in the recruitment of managerial staff. It 
would be of great help to have regular assessments of measures taken by the 
authorities in order to identify the impact of these policies. 
Route of action 12 - To encourage innovation in enterprises, especially, SMEs, and to 
strengthen the regional dimension of innovation. The local or regional ievei is the 
most appropriate one for contacting businesses on matters concerning innovation. 
Route of action 13 - To update public action for innovation. The Committee approves 
the suggestions on the new conception of the roie of the State in innovation. 
In conclusion, the Committee welcomes the European Commission's initiative. It 
underlines the repeated references to subsidiarity and the role of local and regional 
authorities. Its Members will be invited to give an account of their experience and 
submit proposais which might be of help in drawing up the summary report and the 
action plan. 
A*>% 
ANNEX 2.2. 
Recent developments in innovation 
policy in the Member States 
Joî 
RECENT DEVELOPMENTS IN INNOVATION POLICY 
!N THE MEMBER STATES 
Introduction 
In the next pages a number of seiectea innovation policv developments in EU 
Member States in the 1990s is presentee, in order to illustrate what is now 
embracea by the concept of innovation ooiicv examples are clustered according to 
the three oroaa obiectives of the innovation Action Plan: 
A Human resources, education ana training 
B Frame conditions for entrepreneursnip ana innovation finance 
C RTD ana industry 
Concentrating such masses of information into a few pages can of course not do 
justice to the approaches of individual governments. However, it is easily observed 
that EU governments are attentive to giving new advanced content and increased 
coherence to their policies for innovation and technological change. Germany's 
Bundesbericht Forschung 1996. the UK White Papers and the three-yearly 
government proposals in Sweden are illustrative of such efforts. 
A Human resources, education and training 
Education, vocational training, further training, and concern for the skills level of the 
entire work force are strong elements in the innovation policies. However, 
educational budgets in Member States are more decentralised than budget lines of 
most other innovation policy relevant actions. The observation that science subjects 
trail in popularity among school children and young people has become a concern to 
most Member State governments. For example, the Science and Technology Policy 
Council of Finland states in its development strategy Towards an innovative society, 
that ",..the quality of teaching will be imorovea and educational content will be 
renewed for ail levels of education". The Innovation Agencv in Austria Dromotes 
innovative projects in schools, nurtures innovative problem solutions deveiooea by 
students by funding project costs, giving prizes to winning teams and enabling them 
to participate in international competitions. The agency also runs the Award for 
Innovation. In Luxembourg a revision of the law of the secondary technical education 
and the relevant engineering diploma is promoted. In addition, the "Prix à 
l'Innovation", has been developed by the Luxembourgish Federation of Industries and 
in connection with the educational system. In Denmark, the Ministry of Education is 
working on the ways that innovation and entrepreneurial culture can be encouraged 
from the primary and secondary educational levels. Also, the THOR (Technology by 
Highly Oriented Research) initiative, which is scneduled for 1 997 and will consist of 
a limited number of big research grants awarded to excellent scientists will also 
contribute to make the area of technology and science more attractive for young 
people to enter, in the United Kingdom the Prince of Wales Award has recently been 
extended with prizes also for the most commercially successful innovations. 
!f we look in more specific areas in the field of education we can mention the 
following initiatives: 
y 
A. 1 The training and mobility of researchers at doctoral level 
In Germany the international exchange of researchers is supported through several 
programmes, such as the Alexander von Humboldt Stiftung giving grants to more 
than 2000 researchers per year and the Deutscher 'Akademischer Austauschdienst 
supporting more than 50000 individuals Der year. In addition, the DFG doctoral 
programme (Graduiertenkollegs) has grown rapidly from ECU 1.6 million in 1990 to 
ECU 41 million in 1995. The Three-year pian for research and innovation 1994-96. 
in Italy, states that " the instruments of University diploma and the research 
doctorate, which have been introduced far later than in other industrialised countries, 
must be made more responsive to the requirements of the country's production 
system". 
In Greece the programme of targeted research fellowships (YPER) started in 1995 
with the aim to create a pool of highly educated persons dealing with industry 
related problems. In Spain the national programme for the training of research 
personnel has been focused towards the priority areas of the 19 national 
programmes making up the Third national R&D plan (1996-1999). In Ireland PhD 
support grants wiil increase in 1997 from ECU 1250 per individual at present to ECU 
2500 which is in addition to the number of PhD students supported by other lines in 
the S&T budget. In Denmark the government continues to give high priority to the 
training of researchers, for example by continuing the programme for visiting 
researchers from abroad and by providing grants for Danish research students to go 
abroad. The aim is to at least maintain the present level of enrolment at PhD 
courses. 
A.2 The linkages between university level education and the enterprise sector 
In this field most policies and measures aimed at supporting the mobility of 
university graduates into their first jobs and to promote the exchange of research 
staff. In Belgium the Flemish and Walloon regions have each implemented 
programmes aiming at the financial support of graduates' recruitment by enterprises, 
especially SMEs. in Wallonia. the FIRST programme enables researchers to be 
recruited by universities and comoanies (SMEs) with a view to developing 
partnerships, and in Flanders a similar scheme is linked to the sponsoring of 
enterprise clusters. In the UK, the Teaching Company Scheme, encourages the 
mobility of students and graduates towards industry. Also, career problems of 
contract research staff at universities have been eased through an agreement 
involving the research councils, the Royai Society and the British Academy. In the 
Netherlands additional funds wiil be used for the Kennisdragers in het Midden- en 
K/einbedrijf (KIM) project (similar to the UK teaching company scheme.) In Sweden 
a report from the Ministry of Industry recommends that PhD programmes should be 
adapted to industry needs and that a new type of industrial associate professors 
should be introduced to allow the hiring of persons with experience from industry. 
The Ministry of Education and Science in Spain, has initiated a sectoral programme 
for the training of university academic staff and improvement of research personnel 
with the aim to promote the exchange of research personnel between industries and 
public research centres and the development of enterprises' R&D units. 
In Germany, under the particular aim to integrate R&D man power in R&D projects of 
SMEs in the new Lander, several programmes under BMBF and BMWi continue and 
are increased in volume. The creation, in 1995, of the Centre of Advanced European 
/f/f/f 
Studies (CAESAR) in Bonn is another effort to :ncrease flexibility, notably avoiding 
giving tenure to researchers, insteaa. scientists will be nirea to worK ror only five 
years on funaamentai and application onenteo researcn projects such as nano-
technoiogy or bio-electronics which are oromising for the next century. Another 
novelty will be that CAESAR is to be financea as a private institute living from the 
interest of-the initial enaowment of ECU 360 million trom the federal government 
and ECU 34 mio from North Rhine Westphalia. In Denmark the industrial PhD 
Fel/owsnms continue at the levei of 45 new graOuates per year, wnich are 
simultaneously empioyea by a company ana enroilea at a university institute as a 
PhD students. ^ne Greek programme Diavios nas a pilot demonstration character 
(co-financea by the European Social Funo) aiming to suoport first contacts between 
students ana companies having RTD activities, in Ireland schemes for graduate 
training ana mobility include financial support for companies'" R&D personnel in order 
to work in overseas companies R&D departments: training to graauate 
entrepreneurs to assist them in developing skills reauired to run their own business: 
and. assistance to SMEs to recruit technical graduates for 1 year period. 
A.3 Vocational training and further training 
Memper States governments address the reauirements for vocational training ana 
further training primarily from the objective or giving an increasea proportion of 
young people adequate skills ana maintain tne employaoility of young people. 
In the United Kingdom, the government, through the White Paper Competitiveness. 
Forging Ahead (1995), endorses the new national targets for education and training 
put forward by the National Advisory Council for Education and Training (NACETT) 
and sets out its concrete objectives including the support of a Sector Target 
Challenge for industry training organisations ana others: the comparison of basic 
qualifications for employment with those of ieading competing countries and work 
with the industry training organisations to bencnmark training in companies: to run a 
small firms training challenge offering a total of ECU 6 mio for the best training 
projects involving ten or more small companies; and, to publish a consultation 
document on individual responsibility for lifelong vocational learning. The Science 
and Technology Policy Council of Finland states in 1993 [Towards an innovative 
society) that, a growing emphasis wiil be placed on basic skills in initial vocational 
education aiming at more comprenensive curricula: and an evaluation of the 
educational sector of adults training will take place due to its growing importance. 
In the Netherlands the White Paper 'Knowledge in action" (1995) stated the need to 
increase the efficiency and effectiveness of current funding to vocational training and 
enterprise oriented training; to finance annuailv with ECU 7 mio an innovation fund 
for technology and vocational training; and to stimulate fiscally apprenticeship and 
trainees in enterprises. In Austria technology relevant vocational training measures 
include the introauction and use of new technologies, methods, organisational forms, 
and promotion of quality; the development of educational models combining at-work 
and external qualifications; models that consider the connection between 
technological and communicative and social competencies; and development of 
cross-companv qualification co-operation. 
B Framework conditions for entrepreneurship and innovation finance 
Recent national White Papers and Action Plans show the need to rationalise the 
framework conditions to support SMEs and industrial competitiveness. The 
-^ 
following examples are listed under some main categories related to entrepreneurship 
and innovation finance. 
B. 1 Administrative simplifications 
Administrative simplifications, deregulation and liberalisation, establishment of one-
stop shops for enterprises are all part of many governments' published plans, in 
Belgium each one of the regions is planning the establishment of one-stop shops, as 
part of their efforts to simplify administrative procedures. In Denmark, as part of a 
larger action plan, the Ministry of Business and Industry includes several elements in 
its project to reduce administrative burdens like the removal or simplification of 
existing administrative rules; the simplification of fees and taxes; and, the 
establishment of a simplified reporting system so that companies can satisfy all 
authorities through reporting to a single point. Both France and Germany have 
established one stop shops for administrative formalities. The German BMBF 
likewise reviews the existing legislation from the point of view of its effect on 
research and innovation. In France a pilot project will be launched in four regions in 
order to co-ordinate technical legal interventions of various state departments. In 
the United Kingdom a prototype one-stop regulation-shop has been developed and 
will be demonstrated at selected Business Links throughout the country. 
Furthermore, the Minister for Science and Technology has announced a package of 
deregulation measures to help small firms in the areas of singie notification for tax 
and National Insurance for new businesses; new rights for businesses in 
enforcement actions; streamlined development controls; a draft bill for consultation 
in industrial tribunals; and a prototype IT system to provide them forms and 
regulations. 
B. 2 IPR and patents 
The excessive costs of patent protection in Europe compared with patent costs in 
the United States, and the increasing number of new problems related to IPR are 
addressed in most Member States. The variety of measures demonstrates the 
difficulty of combining the benefits of protection (allowing a pay-back to the 
inventor/innovator) with the benefits of wider exploitation of new products, 
processes (in particular in biotechnology), or services. 
The European Patent Convention has been joined by Finland and it is under 
consideration in Ireland to do likewise. Patent protection in Greece has been 
extended from 15 to 20 years to make it compatible with EU guidelines. In the 
United Kingdom studies are underway on the role of the UK Patent Office vis-à-vis 
the European Patent Convention and on the role of European directives applied to 
biotechnological inventions. 
Other initiatives to make better use of patent information are taken in Austria with 
the establishment of a platform called 'Patentverwertung'; in Spain with aid from the 
Ministry of Industry-, and in Belgium via the Office for Industrial Property Rights. In 
Germany subsidies to SMEs for patent application will be available from 1997 and 
100 new teaching posts in patent information will be created at science and 
engineering faculties under a new programme Innovationsstimulierung der deutschen 
Wirtschaft durch wissenschaftlich-technische Information (INSTI). 
r/\^ 
intellectual property ngnts Droblems are unaer scrutiny in manv countries. New 
norms nave come into force in italv concerning procedures ana sanctions concerning 
patents, trade marks, royalties etc.. wniie. in Germanv. the SchlichterKommission s 
•ecommendations are now in the form ot government proposals to be aoproved by 
the Bundesrat. BMBF is supported ir. this work as well as in diminishing non-legai 
barriers to-research ana innovation by the so-called Cleanngstelle fur Innovation und 
Recht. in Sweden the particular proclems ot IPR wnen industry uses university 
research capabilities have been studied by tne Ministry of Industry. 
B. 3 Norms and standards 
There is an uneven presence of adequate infrastructures to promote recent years' 
advances in the use of high qualitv norms and standards, hot least in the field of 
services and in the application of total oualitv standards or design as a competition 
parameter. Among the recent developments are the following: 
In Spain regulations for the quality and industrial security and for environmental 
audits have come into function with a view to help exports, and a National 
Certification Agency (ENAC) has been created as a private association, in Sweden 
the system for testing ana control wiil be further aaaptea to European rules. In the 
United Kingdom the new national accreaitation boav for conformity assessment 
service, known as the United Kingdom Accreditation Service (UKAS), came into 
being in August 1995. thus comoieting the orivatisation of the former National 
Measurement Accreditation Services iNAMAS). In Austria support has been made 
available fpr ISO 9000 reviews in the service sector, and the Innovation Agency 
promotes industrial design. In Greece and Portugal promotion of standardisation and 
certification are parts of the action iines for the promotion of industrial development 
and innovation. 
B.4 Innovation Financing 
Innovation financing and the more substantial investments needed for the 
exploitation of innovative products ana processes are supported, in particular with a 
view to the needs of SMEs. in ail Merrmer States with schemes for seed and venture 
capital, soft loans and guarantees, or incentives to private savings, 'business angels' 
ana moves to allow pension funds and building societies to make funds available for 
knowiedge-based enterprises. In manv Member States the government budgets also 
allow for some revenue losses through fiscal incentives in the iarge financial markets 
of London, Frankfurt, Brussels ana Paris concrete steps being taken towards the 
formation of EASDAQ (National Association of Securities Dealers Automated 
Quotation) by the end of 1996.. 
in Austria two initiatives will be implemented: Privatcapital for SMEs with guarantees 
for private investors, development of a standardised model for mobilizing equity 
capital, and establishing a "market" for business angels; and Grundungssparen for 
long term investment credits for new businesses at the start up phase and for the 
foundation and take over of enterprises. A seed financing scheme funded by the ITF 
and managed by the Innovationagentur provides assistance to new businesses active 
in novel technologies, by furnishing consulting services and supplying venture 
capital. In Denmark the Industrial Development Companies scheme provides a 
guarantee (at 50 per cent) for investment by private develoDment companies that 
finance SMEs in need of further capital ana management competence. Twelve such 
x 
'/4U 
investment companies have Qeen aoproveo since !994 under an overall state 
guarantee of ECU 132 mio. in Finland eauitv basea development loans tor R&D in 
SMEs and venture capital for business start-ubs, the latter through the recently 
established Finnisn industrial Fund, seem to continue. 
in France -the launch of the 'NOUVEAU MARCHE" is expected to mobilise key 
oiayers on the French eauitv market and aims to achieve around 30 introductions 
each year. The Frencn Plan for innovation foresees that venture capital funds snouio 
mobilise ECU 155 mio within 3 years, in Germanv the Deutsche Bôrse announced. 
in March 1996. that it wiil open a Neuer Marki ;n 1997. This new marKet will target 
telecommunication, biotechnology, multimeaia ana new services. Deutsche Bôrse 
will also join with the 'Nouveau Marcne* in Pans ana the Brussels Bourse with a view 
to develop a network of new markets for eauities (EURONM) in growth companies. 
Government supported eouity and credit scnemes for SMEs wiil also be extended: 
the Kreditanstalt fur Wiederaufbau innovation loan programme is to be improved with 
at least ECU 525 mio per year (pending approval by the European Commission); and, 
the experimental Beteiiigungskapital fur junge Technologieunternehmen (BJTUJ 
started in 1989, and wiil be continued by Beteiiigungskapital fur kleine 
Technologieunternehmen (BTU) with the reiease of another ECU 471 mio. 
In Greece a Technology Performance Financing -type (XAT) programme wiil soon be 
launched with the aim to distribute the innovation financing amongst three parties, 
i.e. the technology supplier, the technoiogy user and the financial institution. In 
Spain one of the action lines of the SME initiative for industrial development is 
devoted to the improvement of the access of SMEs to sources of financing and to 
the support of networks of interface organisations of financial character. ICO-Pymes 
is a new form of credit line available to companies that develop projects financed by 
the Centre for industrial and Technoiogicai Development (CDTI), with the possibility 
for additional finance up to 70 per cent ot the total investment of the project. The 
National Innovation Company (ENISA) which JS a public venture-capital company 
foresees in its plan for 1996-1999 investments of ECU 21 mio. In Luxembourg, the 
"Société Nationale de Crédit et de d'Investissement" (SNCI) has developed loan 
schemes for technology and innovation related projects. 
In the Netherlands, while administrative costs for businesses are found to be a 
gênerai problem concerning all kinds of companies, there are many initiatives to 
facilitate credit and finance for technoiogy investment like the simplification of 
applications will be simplified for pilot studies and small credits from the Technical 
Deveiooment Fund (Techniscn OntwikKelingsKreoiet)'. Techno-starters will be given 
extra support by the Government: Tecnnoiogy brokers (seed capital or iicenses): 
Technoiogy ratings (feasibility check). in Sweden three NUTEK programmes are 
running, which bring down the costs of SMEs that engage in innovative projects; 
SNITS that supports technology transfer through feasibility awards for the 
development of a business plan: SMINT that promotes the formation of R&D 
consortia in particular for international co-operation: and, seed financing gives small 
feasibility awards and soft loans for innovative projects during the stages before 
commercial financing is possible. A Swedish version of the UK Business Exoansion 
Scheme has been introduced, allowing for tax savings when investing in small 
unlisted firms. A new risk capitai operation for small, innovative firms is being 
launched by the Swedish Industry Fund. In 1993, the Swedish parliament decided to 
dissolve the Wage-Earners Funds. About ECU 770 mio were allocated to risk capitai 
operations (while a iarger ameunt was used to create 18 research foundations). 
'/A^ 
In the United Kingdom, the government's proposals in the 1995 and 1996 White 
Papers on competitiveness include the encouragement of greater competition in the 
provision of capital, in particular to SMEs; help of growing businesses to get access 
to the most appropriate finance through a new Business Link service in England, 
Enterprise Networks in Scotland, and Business Connect in Wales; continue to 
encourage prompt payment; and allow corporate bonds into personal equity plans 
and loosen restrictions to make it easier for companies to issue bonds. In the UK, 
that concentrates more than 45% of the venture capitai funds in Europe, a number 
of initiatives and schemes have developed like the networks of Business Angels or 
the development of the 'Alternative investment Market (AIM)' by the London Stock 
Exchange in July 1995. 
B. 5 Fiscal incentives 
Fiscal incentives for firms to perform R&D are now in widespread use in Member 
States (Austria, Belgium, Greece, Ireland. The Netherlands, Spain and Sweden) but 
have been abandoned in Finland. For example, in Greece, the Investment Law was 
amended in 1994. It provides a wide range of incentives (investment grants, interest 
subsidies, tax allowances and increased depreciation rates) aiming simultaneously at 
promoting regional development. In Belgium the federal government has plans to 
revise the fiscal regime in order to encourage the reinforcement of the enterprises' 
own resources. Self-financing within the SMEs will be made more attractive. Higher 
fiscal deductions will also be linked to the deposit of patents. In Luxembourg, fiscal 
incentives for material investments in enterprises have been developed in a way to 
indirectly promote innovation in firms. 
In Finland general tax deductions on R&D efforts were taken into use in the late 
1980s but do not belong any more to the fiscal instruments. In Ireland, among the 
recommendations from the STIAC, was an integrated set of tax measures to 
stimulate business R&D, including dividend relief for owner managers, R&D tax 
credits, reduction of costs for R&D personnel and R&D service companies, and tax 
changes to encourage multinational companies to establish their regional 
headquarters and strategic functions in Ireland. In the Netherlands ECU 23 mio per 
year will be given to improve depreciation flexibility of innovative technologies drawn 
towards the Netherlands. Since 1994, funds under the Act to Promote Research and 
Development (WBSO), through tax incentives, has been increased; WBSO is offered 
either as reduction in personnel costs through a reduction of taxes and premiums 
paid by the employer, on salaries for R&D personnel; or, as an extra income tax 
reduction added to the tax forfeit for the self-employed who themselves develop 
R&D activities in SMEs. In Spain fiscal incentives have come into force in the 
beginning of 1996. Forty per cent may be deducted of the R&D costs of enterprises 
that exceed the average of the costs incurred during the preceding two years. 
C RTD and Industry 
Many countries have seen some changes of ministerial portfolios, in several 
instances following a change of government. The common trend has been to achieve 
a more powerful co-ordination of policies for industry, research and human 
resources. Objectives coincide and all countries prepare or implement actions with 
large similarities, most visible with regard to information society initiatives. Priorities 
differ among countries according to the current situation of the science, technology 
/I4& 
and innovation svstem in eacn country. The size ot individual economies, industrial 
structure, specific economic problems are liKewise factors that determine priorities at 
national and regional level. Below are summarised characteristic examples ot the 
latest developments. 
C. 1 Technology foresight 
In 1995 the first results of large scale tecnnoiogy foresight exercises using Delphi-
technique were puPlisheo in the United Kingdom, France and Germany. Already the 
follow-up is seen in the form of impact on the government R&D expenditure plans. In 
Austria the Technology Information ana Policy Advice programme will be extended 
to 1998. Technology foresight networks are at work in the Netherlands where aiso 
the Consultative Committee for Explorative Studies (OCV) involves the major 
research organisations in its studies. Ireland has also developed a strategy for its 
technology foresight exercises. In Finland. The Science and Technology Policy 
Council (chaired by the Prime Minister) monitors emerging technoiogicai needs of the 
economy. In Denmark a new Technoiogy Assessment Council has been created to 
give advice to parliament and government with special emphasis on initialising public 
debates on various emerging technologies. In Spain the National Evaluation and 
Assessment Agency aiso carries out studies and prospective analyses. !n 
Luxembourg a technology watch initiative is developing by the Ministry of Economy 
and CRP-Henn Tudor. 
C. 2 Multiannual programming 
Comprehensive multiannual programming at government level, in addition to 
statutory yearly budgets and finance acts, is a common exercise in several Member 
States. In most of the following examples those plans outline both the overall aims 
and budget lines and institutions. 
Examples of annual expenditure plans with almost equal details for innovation 
relevant areas are those for Trade and industry by the Cabinet Office in the United 
Kingdom and of the Ministry for Economic Affairs (BMWi) Germany. In Finland a 
major exercise is performed every five vears in order to establish new generations of 
national technology programmes. !n Germany the Bundesbericht Forschung 1996 
represents a three-vearly review. Greece is in the middle of the 2nd Operational 
Programme for Research and Technology (EPET II) (1994-99), while Italy is 
implementing a third Three-year plan for research and innovation (1994-96). In 
Portugal muitiannuai financing of the best R&D institutes is part of the new 
government's programme. In Spain the Third national plan for R&D (1996-1999) 
was introduced in June 1995. In accordance with established practice in Sweden a 
three-yearly proposal for research is due in September 1996, following a proposal for 
industry in 1995. 
C.3 White Papers 
White Papers and national strategies or development plans harness the political 
authority for further co-ordination over time and over otherwise separate budget 
lines. Examples relevant for innovation vary in detail and scope. A national strategy 
for science and research is being established in Denmark. In Finland a strategy for 
innovation was published in 1993 and a White Paper entitled Industrial Policy Vision 
was published in 1 996 and is expected to be followed by a technology strategy. In 
^? 
France me Ministry ot industry has announcec a oian for innovation. Ireland and 
me Netherlands nave ooth. in 1995. proaucea White Papers on the theme of the 
knowledge society. In 1996 Forfas in Ireland -auncned a new 15-year strategy 
document. Shaping our fuiure: A strategy ror enterprise ;n ireiana in the 21st 
century, prepared for the Minisier for Enterprise and Employment, Finally, the United 
Kingdom, from where the terminology oi White Papers originates. n-as made tne 
exercise an annual institution. 
C.4 New national organisational forms 
Reallocation of government portfolios ana departmental responsibilities are another 
inaicator of poiicv development. The trend in several countries has been to maintain 
or raise the level at wnich R&D exoenditure is co-ordinateo with other industry 
relevant budgets. 
In Austria the two main ministries are. now, the Ministry for Science, Transports and 
the Arts and the Ministry for Economic Affairs. In Belgium the inter-ministerial 
Science Policy Conference is the forum for co-operation agreements involving the 
competencies of federal, regional and community authorities. In Denmark research 
and information technology is, since 1994. combined in one Ministry and a new 
legislation on the advisory system nas oeen passed in 1995 and 1996. In Finland 
the Science and Technology Policy Council (chaired by the Prime Minister) monitors 
emerging technoiogicai needs of the economy. 
In Germany the fédérai government orovides most of its research finance through the 
reorganised Ministry for Education, Science, Research and Technoiogy (BMBF). By 
creating, in 1995. the Council for Researcn, Technology and Innovation under the 
Fédérai Chancellor a piatform has Peen made for directing the dialogue between 
science, industry, unions and politics towards central questions for the future. In 
Greece a new Ministry of Development has been created by merging the Ministries 
of Industry, Trade and Tourism. in itaiy the three-yeariv clans will be updated 
annually under guidelines from the inter-ministerial Committee for Economic 
Planning; a parliamentary committee is examining a bill that would entrust an 
external observatory with the evaluation of universities and public research bodies; 
AG/TEC. the agency for innovation, has been set up under the initiative of the 
Minister of industry. 
In Portugal, the new government has stated its aims concerning several issues 
central to innovation policy (PEDIP II, multiannual financing for the best R&D 
organisations, the information society, vocational training, and the Institute for 
SupDort of Small and Medium Firms and investment (IAPMEI), for example); 
important changes are made in the Ministry of Economy and the Ministry of Science 
and Technology. In Spain the new government's proposals carry forward an 
approach already introduced in the Third national plan for R&D (1996-1999) from 
June 1995. In the United Kingdom the Office of Science and Technology (OST) has 
been transferred to the Department of Trade ana industry in 1 995. 
C.5 Directing R&D towards innovation 
Following are a number of characteristic examDles of Member States' programmes 
and instruments to better direct research efforts towards innovation and international 
competitiveness. 
***% 
in Austria the two main instruments are tne Researcn Promotion Puna (FFF). which. 
in 1994, shifted its focus to areas sucn as micro-electronics, environment protection, 
information technology and software development, and the Innovaiion and 
Technology Funds (ITF). in Belgium the university-industry interface structures and 
the science parks have multiplied during the last ten years in addition to sectoral joint 
research centres, jointly financed bv the fecerai government and the regions, in 
Denmark the governments latest research package has ailocated money to 
strengthen research in universities ano approved technoiogicai institutes as well as 
new strategic programmes: THOR (Tecnno/ogy ov Highly Oriented Research) which 
is scheduled for 1997 will consist of a iimited number of big research grants 
awarded to excellent scientists for basic research orpjects with paramount industrial 
relevance; and a new action plan fowards entrepreneurs focuses on the 
establishment and survival of new enterprises, especially SMEs. 
In Finland the above mentioned Finnisn technology strategy will act as a guideline for 
the Technology Development Centre iTEKES) which has a centrai funding role for 
both university research and industrial research, as well as for other implementation 
bpdies. for example the Technical Researcn Centre of Finland (VTT) which is the 
single largest research institute; both TEKES and VTT have been through a process 
of evaluation in order to improve effectiveness. In France the Ministry of Industry 
has announced a plan for innovation with a major shift of its interventions towards 
the development of Key Technologies-re\ate6 issues (ECU 155 mio will be devoted to 
a call for proposals) as well as of the ANVAR schemes. The SME, Trade and 
Handicraft Ministry has announced the creation of a new public agency (ANVAC) 
devoted to the development of innovation within the service and trade sectors. The 
Ministry of Research has among its priorities the labelisation of Centres de 
Ressources Technologiques now going on in six regions. As from 1997. a bonus aid 
of 5 to 10% will be given to those big companies which will include partnerships 
with SMEs in their projects. Medical research action lines will be modified to increase 
mobility between research and clinical activities, and to focus research on medicai 
research and bio-sciences. 
In Germany the introduction of model projects ILeitprojekte) will help to an early 
understanding bv researchers and users of how to exploit the existing R&D potential: 
and the Ministry for Economic Affairs (BMWi) has. since unification, stepped up its 
commitments to programmes for R&D personnel, innovation support, and research 
suppprt in the new Lander, for example in the form of Innovationkollegs involving 
different scientific departments and innovative enterprises, each for a period of five 
years. In Greece the management of existing schemes and the launch of new ones 
continue to be based on the implementation of the Community Social Funds; a 
number of programmes require the active participation of enterprises: Programme for 
the development of industrial research (PAVE), Research consortia for improving the 
industrial competitiveness (EKVAN), Co-financing programme (SYN) and Programme 
of targeted research fellowships (YPER). 
In Ireland an additional ECU 5 mio allocation for science, technology and innovation 
programmes was announced in March 1996 wnilst the overall government response 
to the Science. Technology and Innovation Advisory Council (STIAC) report is yet to 
be finalised: the Programmes in Advanced Technologies (PATs) represent a medium 
to long-term strategy for the development or a technological infrastructure to serve 
Irish industry. In Italy the Three-year plan ror research and innovation 1994-96 
/t*$ 
considers, that the Inter-Universitv Consortia wnich have Deen successful ana offer 
prospects tor a greater efficiency in me use OT resources, snouid be categorised as 
institutions; and gives directions ror CNR 'greater integration of its activities with 
rhose ot other puoiic and private entities!. ENEA (since the 1980s diversifying into 
new Technologies, energy and the environment) and research bodies of other 
Ministries; - under the Minisiry for University and Scientific and Technological 
Researcn (MURST) new contracts have been signed in the framework of the National 
Researcn Programmes on: technologies for tne construction and the protection of 
buildings, environment, and cardiologyt 
In the Netherlands the policy initiatives outlined in the White Paper "Knowledge in 
action" are being developed, for example: subsidies tor Project-basea co-operation 
will be given to promote co-operation between ousinesses themselves and between 
private sector and research institutes m a range of technology fields. The Cabinet 
wiil be establishing Leading Technological institutes (Topinstituten). In Portugal the 
above mentioned administrative restructuring aims at more efficiency, including for 
the two main, EU suoported. incentive programmes PEDIP II and PRAXIS XXI. In 
science poiicy the focus will be on the support to the excellence of research teams, 
as weli as on the training and employment ot researchers, instead of physical 
infrastructure. Industrial innovation oolicv wilj include a stronger commitment to 
encourage intangicle investments. In Spain the National programme for the 
promotion and linking-up of the science-iechnology-industry system (PACT!) 
concentrates on and improves existing instruments and creates new mecnanisms. 
In Sweden 28 competence centres at eight universities started their activities in 
1995 with support from the National Boara for Industrial and Technoiogicai 
Development (NUTEK) aiming at creating concentrated research environments in 
which industrial partners participate actively: RTD consortia for regional development 
is a temporary 5-year programme under which 22 ccnsortia have been launcned. In 
the United Kingdom the major influence of the Foresight programme is seen on for 
example the S&T priorities ot the research councils and government departments: 
since March 1995. 13 new LINK programmes have been targeted on kev areas of 
promise and research relevant to business will be taken into account wnen funding 
universities 
C.6 SMEs. innovation support infrastructures and regional dimension 
Re-organisation at government levei has been accompanied by restructuring of 
institutions as well. Intermediary institutions for the suppprt of technology transfer 
and the co-operation among major researcn institutions are often organised as 
private non-profit entities outside the oubiic sectcr. The regional dimension of 
making this network of intermediaries more efficient and better connected with 
national initiatives is illustrated in some ot the examples. 
In Austria the Austrian Institute for the Promotion of the Economy (WIFI), has 
develpped a comprehensive management consultancy service and the Ministry for 
Economic Affairs intends to start a firm-to-firm visit-scheme; the Austrian Industrial 
Promotion Fund has launched an innovative technology transfer programme with 
'Contact Projects' including the possibility of grants or subsidised loans to 
marketable products; the European Recovery Programme Fund (ERP) has shifted its 
emphasis from investment promotion to innovation, regional development, 
infrastructure and internationalisation. The Innovation Agency, in addition to other 
*Alo 
activities mentioned above, is the general secretariat tor the Association or Austrian 
Technology Centres, in Belgium the Fiemisn government, for examoie, fosters the 
establishing of collaboration clusters among enteronses concerned mainly with R&D 
and the supply OT technological services. 
In DenmarK the Action plan wwards entrepreneurs for 1996 and 1997 aims at: 
strengthening the entrepreneurial culture, reducing administrative Purdens. improving 
access to financing of innovation, strengtnening and rationalisation of the regional 
advice and support services, and making special efforts to suppprt high tech ana 
inncvative entrepreneurs. In Finland Centres of Expertise are established in 
connection with the best laboratories of universities and research institutes as one of 
the iinks between R&D and the regional policy. 
In France the new strategy foreseen tor ANVAR in the innovation plan will imply a 
better follow up of fast growing companies, introduce project evaluation criteria 
concerning the impact of the projects on grewth and employment, reinforce the role 
of regional delegations, and offer new financing instruments; as already mentioned, 
for SMEs. Further plans to reorganise the support to new companies creation and 
survival are expected in the autumn. The regional dimension in national STI policies 
is strengthened bv the ORATE (Observation Régionale de l'Appui Technologique aux 
Entreprises! initiative, taken Py the Ministry of Education and Researcn. This initiative 
links the innovative growth layer ot SMEs with the responsibilities pf regional 
authorities to assure a coherent set of measures. ORATE focuses aiso on human 
resource requirements and on the medium term economic impact within the region of 
technology diffusion. 
In Germany three current programmes of the BMWi will be merged into one federal 
programme with a considerable increase of funding; programmes under BMBFTor the 
new Lander provide enterprises support to laoour costs when new scientists or 
engineers are recruited, give suppprt to small enterprises for the use of-external R&D 
contracts, support key technoiogy fields ano support establishing new firms. In 
Greece the decentralised establishment of sectoral technoiogicai development 
companies, science and technology parks and liaison offices is in addition to the 
STRIDE-Hellas orogramme. Programmes for Demonstration Projects (PEPER) and 
Technoiogy Brokerage are launched. In Ireland, in addition to existing programmes, 
37 county enterprise boards have been established to encourage new firm formation 
and to assist micro enterprises already in existence tc develop; there is a proposal to 
assist companies to form company netwprks. 
In Italy the rationalisation of the technoiogicai infrastructure for SMEs is one of. the 
aims in the Three-year plan for research ana innovation 1994-96. A number of local 
initiatives (incubators, research laboratories, information society experiments etc.) 
have been taken involving local industry, Chambers of Commerce, universities and 
regional authorities. In the Netherlands a range of innovation facilities for SMEs and 
which operate as tax and credit incentives has been mentioned above. Among new 
projects can be mentioned Enterprise Houses to improve co-operation between 
intermediary technology transfer organisations. Also nationai instruments for generic 
technologies have facilities for SMEs. 
In Portugal the above mentioned IAPMEI wiil be more closelv involved in providing 
advice and service to SMEs: the science park Taguspark has iaunched so-called 
anchor projects with the involvement of large R&D institutes, companies and banks; 
the potential of science and technoiogy parks in the Lisbon area and incubation 
centres is being studied. One of the three instruments of the technological policy 
in Spain under the Ministry of Industry is the Institute of the Small and Medium Sized 
Industrial Enterprises (IMIP). 
The 22 new RTD consortia for regional development in Sweden, mentioned above, 
are helping SMEs in supported regions to co-operate and to regard institutes, 
universities and larger companies as resources for competence. Other new 
instruments are, for example a pilot programme for technology transfer to SMEs 
from industrial research institutes which aims at creating longer lasting networks, 
ALMI Business Partners which is a government-owned consultancy with 40 offices, 
and support to the trade in technoiogicai services between SMEs and public 
technology providers. In the United Kingdom the Cabinet Office foresees a further 
increase in the number of 'Teaching Company Scheme' programmes, as well as the 
growth of a similar 'College-Business Partnership' launched early 1996 and a rapid 
uptake by companies of the new services from 'Design Counsellors' which are an 
addition to the Business Link scheme. 
^/llZy 
Recent White Papers and launch of strategic plans of Member 
States 
AUSTRIA 
"Technoiogiepolitisches Konzeot der Bundesregierung (draft)", WIFO, 
Seibersdorf & Joanneum Research, Mav 1996. 
"Informationsoffensive. Bundeskanzler Vranitzky stellte in Alpbach die 
Weichen fur den Informations-Highway", in Innovativ. 3/1994 Oktober. 
"BMoWV - Informationsgesellschaft - Telekom Initiative Osterreich, 
Grussworte von Bundesminister Mag. Viktor Klima", from 
webmaster@iis.joanneum.ac.at. (04/07/95). 
DENMARK 
"Research in perspective, White paper on a national research strategy", 
Ministry of Research and Information Technology 1995. 
"From vision to action, info-societv 2000", Ministry of Research and 
Information Technology, 1995. 
"Erhvervsredegorelse 1995", Ministry of Industry and Business. 1995. 
"Open dialogue on Danish research for the future, Research policy 1996 
report to the Danish Parliament", Ministry of Research and Information 
Technology, June 1996 
FINLAND 
"Towards an innovative society, A development strategy for Finland", Science 
and Technology Policy Council of Finland. 1993. 
"Finland's way to the information society, The national strategy", Ministry of 
Finance, 1995. 
"National innovation system and employment". Science and Technology 
Policy Council, November 1995. 
"Industrial policy vision", Ministry of Industry, May 1996. 
FRANCE 
"Les 100 technologies clés pour l'industrie française à l'horizon 2000", 
Direction générale des stratégies industrielles, 1995. 
L'innovation dans les PME, Rapport Chabbal, 1995 
GREECE 
2nd Operational Programme for Research and Technology (EPET II). 
Operational programme for the Industry (1994-1999) 
GERMANY 
"Bundesbericht Forschung 1996", BMBF, 1996. 
"Forschungsleistungsplan 1994 des Bundesministeriums fur Wirtschaft", 
BMWi, 1994. 
IRELAND 
"Making knowledge work for us, A strategic view of science, technology and 
innovation in Ireland", STIAC, 1995. 
"Shaping our future: A strategy for enterprise in Ireland in the 21st century", 
Forfas, May 1996. 
ITALY 
"Ricerca e innovazione per io sviluppo. Piano triennela della ricerca 1994-
1996", MURST, 1994 
THE NETHERLANDS 
"Kennis in beweging, Over kennis en kunde in de Nederlandse économie", EZ, 
OC&Wand LNV, 1995. 
"SWAP 2000", EZ, and OC&W, 1996 
PORTUGAL 
"Program do XII Governo Constitutional", 1995. 
SPAIN 
"III Plan Nacional de l + D 1996-1999". CICYT. 
"Libro Blanco de la industria: Una poiftica industria para Espana". 
"Estrategia Tecnologfa Energética de Largo Alcance (ESTELA)", Ministry of 
Industry and Energy, 1995. 
SWEDEN 
"Nâringsdepartementet", Regeringens proposition 1994/95:100 Bilaga 13, 
1994. 
"Âtgarder for att bredda och utveckla anvandingen av informationsteknik", 
Regeringens proposition 1995/96:125. 1996. 
"Samverkan mellan hôgskolan och naringslivet". Ministry of Industry, 1996. 
"Forskning och pengar", Ministry of Education. 1996. 
THE UNITED KINGDOM 
"Competitiveness: Forging ahead. White paper", DTI, 1995. 
"Trade and Industry 1996, The Government's Expenditure Plans 1996-97 to 
1998-99", Presented to Parliament by the President of the Board of Trade and 
Industry ..., 1996. 
"Developing a Winning Partnership", A report of a joint City/Industry working 
group established by the Innovation unit of DTI. 
"Foresight, First progress report", OST. 1996. 
"Competitiveness, Creating the enterprise centre of Europe", HMSO, June 
1996. 
"Forward look of government-funded science, engineering and technology 
1996", HMSO. 
y 
ANNEX 2.3. 
Statistical tables 
ENCL0S-3.DOC 18.10.96 10.30 *//•£ tf 
Table 1 
Europe in World-wide research: R&D indicators for the Triad 
Total R&D expenditures (MECUs) 1994 
Total R&D expenditures as % of GDP 1995 
Total R&D expenditures per inhabitant 
(ECUs) 1994 
% of total R&D expenditures financed by 
governments 1993 
% of total R&D expenditures financed by 
industry 1993 
Number of researchers 1993 
Number of researchers per thousand 
employed 1993 
Number of researchers in industry 1993 
Number of researchers per thousand 
employed in industry 1993 EU15 
121 882 
1.91 
329 
39.6 
53.5 
774 071 
4.7 
376 000 
2 USA 
142 047 
2.45 
545 
39.2 
58.7 
962 700 
7.4 
765 000 
6 JAPAN 
104 069 
2.95 
833 
19.7 
73.4 
526 501 
8.0 
367 000 
6 
Source: European Commission. DG XII from OECD data 
Iable_2 
Recent trends for R&D undertaken by firms 
(US prices 1987, billions ECUs, average annual growth rates) 
Percentages 
11981-1991 Q1991-1993 
Source: MERIT, data: OECD, EUROSTAT. IMF. UNIDO and UNESCO 
fat, 
Table 3 
Positions of the Triad by technoiogicai area, measured in patents, 1993 
Share (%) of Eurooean patents in 
the Worla 
EUROPE EU USA Japan 
Electronics / electricity 
Instruments / optics 
Chemicals / pharmaceutical prod. 
Industrial processes 
Mechanical engineering / 
transports 
Consumer goods 
All area 34.2 j 30.0 
37.8 32.4 
i 
40.3 | 33.7 
50.1 j 25.6 
58.5 19.2 
64.0 16.9 
46.4 27.3 31.8 
23.4 
20.0 
16.6 
15.5 
8.0 
20.9 Share i%) of US patents in the 
World 
5U USA Japan 
11.5 
14.9 
28.2 
22.3 
23.6 
19.1 
16.6 46.7 
50.8 
51.0 
50.5 
45.4 
50.1 
48.7 35.4 
28.0 
19.7 
19.3 
22.5 
12.5 
25.0 
Source: USPTO. 
Data: Treatments STO and CHI-Research. 1995. UNESCO reoon on Science in the World. 
Table 4: 
R&D EXPENDITURES (AS A % OF GDP) AND THEIR EVOLUTION 
FOR SELECTED COUNTRIES 
R&O expenses as a % of GNP 
Source: World-wide report on competitivitv. World economic forum. IMD 
Table 5 
Gross Domestic R&D Expenditures as % of GNP by Member State 
3 -r 
2.5 + 
2 + 
1.5 + 
1 + 
0,5 + 
F UK DK NL B I IRL E P GR 
Reference years: 1991 (B), 1992 (D, F, IRL, P), 1993 (UK, DK, NL, I, E, GR) 
Source: Eurostat, research and development, annual statistics 1995. 
labiée 
DISTRIBUTION OF INNOVATION EXPENSES IN 1992 IN SOME 
MEMBER STATES * 
Testing 
Others 
Product design Market analysis 
R&D 
Patents 
• In 1992. in the 12 Member States of that time except Luxembourg, plus Norway, Switzerland and 
Iceland 
Source: EVCA, Ernst & Young 
'jlf 
Table 7 
DISTRIBUTION OF INNOVATION EXPENSES IN 1992 IN SOME MEMBER STATES BY FIRM SIZE4 
100% 
9 
a 3 c 0 
OL • Market analysis 
•Testing 
• Others 
a Product design 
a Patents 
• R&D 
* In 1992 in the 12 Member States of that time, except Greece, Portugal, United 
Kingdom and France. For Germany, only data relative to large firms are known. 
Source: CIS, Preliminary results 
WAYS OF KEEPING UP COMPETITIVITY IN TERMS OF PRODUCT 
INNOVATION IN SOME MEMBER STATES * 
60 T 
50 + 
Adv. on the 
compet In 
the design 
& planning Complexity 
of the proa. Secret Patent* Registration 
ofconcept 
I Large Q Medium • Small 
* In 1992 in the 12 Member States of that time, except Spain, France, Italy, Greece, 
Portugal and United Kingdom 
Source: CIS Preliminary results 
/. AV^ 
Table 9 
IMPORTANCE OF FACTORS HAMPERING INNOVATION 
60 , 
Economic Firms linked I.P.R. Too simple to Customers' Timetable Lack of tech. 
factors factors copy reaction opportunities 
QNon-inno Qlnno* 
* Companies having undertaken product or process innovation during the period 1990-
1992 
Source: EUROSTAT (CIS). Preliminary results 
Table 10 
IMPORTANCE OF THE OBJECTIVES OF INNOVATION 
90 T 
lllllllll 
Increase Lower Product Widen Create improve Improve Replace Decrease 
market prod, cost quality prod. new prod. working obsolete damages 
share range markets flexibility conditions product to the 
environ. 
Objectives 
Percentage of firms considering these factors as very important or essential (reference 
years: 1990-1992) 
Source: CIS (Preliminary results) 
* A*> 
Table 11 
Significant correlation coefficients between employment, product 
innovation, process innovation average growth rates in various 
European countries (1970 - 1992) 
Product innovation Process Innovation 
Year: 70-90 80-90 39-92 91-92 70-90 80-90 §552 91-92 
Belgium + + + 0 + + + 5 
Denmark + + + 0 + + + 5 
France + + + + + + + + 
Germany + +~ 5 5 + + 5 5 
Italy + - " - + - - -
Netherlands + + 0 - + + - 5 
Norway + + 6 Ô + 5 5 5 
Spain + + + 5 + + + 5 
United Kingdom + + + + + + + + 
Source: EIMS, Innovation and employment in Europe. CIS data, Licht, 1995 
Iable_L2 
Changes in employment in micro-firms and small, medium size and large 
firms, Europe-15, 1988-1995, 1988=100 
110 T 
105 -r 
100 SmaN 
1988 1989 1990 1991 1992 1993 1994 1995 
Source: Research and studies on small firms, ElM, Vol. A, n° 11/12, November 1994 
sfZ* 
Table 13 
Company registration per country 1988-1993, 1988= 100 
1988 1989 1990 1991 1992 1993 change in % 
Germany 1 100 103 114- 120 122 125 
Germany 2 n.d. n.d. 100 110 102 101 
Belgium 100 100 95 93 97 n.d. 
Denmark 100 117 117 143 131 n.d. 
Spain n.d. 100 99 107 118 n.d. 
France 100 101 99 91 90 90 
Greece 100 84 70 62 69 76 
Ireland 100 99 98 n.d n.d n.d 
Italy 100 95 94 114 103 97 
Luxembourg 100 130 137 140 149 159 
Netherlands 100 109 112 121 135 n.d. 
Portugal 100 112 125 119 146 141 
Un. Kingdom 100 109 109 91 75 67 
Austria 100 115 83 79 91 102 
Finland 100 108 95 88 92 96 
Norway 100 n.d 76 n.d 52 n.d 
Sweden 100 99 117 101 84 94 
Median Value 100 103 99 107 99.5 99 + 25 
+ 1 
-3 
+ 31 
+ 18 
-10 
-24 
-2 
-3 
+ 59 
+ 35 
+ 41 
-33 
+ 2 
-4 
-48 
-6 
-1 
Germany 1 refers to the former West Germany, Germany 2 to re united Germany 
Sources: Germany 
Austria 
Belgium 
Denmark 
Spain 
Fin/and 
France 
Greece 
Ire/and 
Italy 
Luxembourg 
Norway 
Netherlands 
Portugal 
United Kingdom 
Sweden IfM, Bonn 
IFG Databank, Vienna 
National Statistical Office 
Danish Statistical Office 
Office of industry registration and IKEI estimates 
Finnish Statistics, Company register 
INSEE, SIRENE file, 1994, ANCE 
National Statistical Office of Greece 
Inventory of Industrial Production 1987-1990 
Movimprese Data Bank 
Comapny register 
Central Statistical Office 
Van der Hoeven, WHM and WHJ Verhoeven, Creatie en 
teloorgang van arbeidsplaatsen. Studies and research on smalt 
firms, ElM, 1994 
INE-Monetary and Financial Statistics 
Estimate of company birth. National Westminster Bank 
Swedisk statistics 
Ml 
Table 14 
Impact of innovation on employment. The case of Italy 
Size 
20-199 
200-499 
500 + Employment Growth Rates 
Innovative companies 
Employment 
Growth 
1992 
1.07 
1.01 
0.98 Productivity 
Growth 
1.12 
1.14 
1.10 Export 
share 1992 
73.0 Non-innovative companies 
Employment 
Growth 
1992 
1.03 
81.3 | 0.98 
98.3 j 0.94 Productivity 
Growth 
1.03 
0.95 
0.86 Export 
share 1992 
59.0 
64.5 
68.1 
Source: ElMS, Impact of Innovation on Employment in Italy. Analysis from CIS data, 1995. 
Table 15 
Intangible factors and competitiveness 
Innovation 
Patents 
Quality 
Promotion 
Processes 
Sales effort > 
3 3 C 
u 
9 < O 
3 
CO 
3 
Ot 
5-
o 
-I <* 
QLow D Average flHigh -2 0 2 4 6 8 10 
Emerging market share 
Source: PIMS 1994. 
PIMS (Profile Impact of Market Strategy) pioneered by General Electrics and further developed at 
Harvard. PIMS associates Ltd (USA) and selected academic partners including the Irish 
Management Institute are responsible for PIMS data gathering research and consulting. 
Analysis carried out for units within large companies in Northern America (mainly United States) 
and in Europe (50% in the United Kingdom) 
/III 
Table 16 
VENTURE CAPITAL 
DISTRIBUTION OF STAGES IN PERCENTAGE OF INVESTMENTS IN 
EUROPE IN 1995* 
Expansion 
52.8% Replacement 
9.8% 
Buy-out 
21.5% 
* 15 European Member States except Luxembourg, plus Norway, Switzerland and 
Iceland 
Source: EVCA, Ernst & Young 
Table 17 
DISTRIBUTION ON INVESTMENTS IN 1995 
BY INVESTED AMOUNT 
•Buy-Out • Replacement Capital Q Expansion I Start-up & Seed 
Source: EVCA - Ernst & Young 
/l$U 
IittaJA 
investment» in Venture capital in Europe and the United States (1995) 
TScu U8A(1) UE{2) 
KECU 
è.546,000 Total fnvestmema 5 748.000 Jo** 1.100 + 2 4.9SS 
Invaatmanta par 
stags 
taad & start-up 
development 
Leveraged buy-out 1.475.000 
3.307.000 
•32.000 20 
S8 
10 445 320.000 
2.300.000 
2.900.000 S.7 
42 
62 939 
Investments per 
aaeter 
Informât*-tachno. 
life sdenoee 
non-technology 
avg alia of aaad-
SSÉSL 2.041.000 
1.398.000 
1.709.000 46 
24 
30 902.000 
422.000 
4.222.000 16 
8 
70 
932 260 
(1) Soiérc*:V9ntuf90na (American Company) 
(2IËVCA 
• 60% increase In the number of invaatmanta (1984-1996 period) 
• • 1100 Invaatmanta in the United Statas in 1996. 
IlWf-lft 
laxaaindaotial contributions In Europfl aa a pafoantage of flPP (1893) 
• mt 
•• 1992 Country 
Germany 
Austria 
Belgium 
Denmark 
Spain 
Finland 
Pranee 
Ireland 
Italy 
Luxembourg 
Norway 
Natharianda 
Portugal 
Unfted Kingdom 
Sweden Taxes and social contributions 
% of GDP 
41.4 
43.7 
44T 
49.0 
30s 
45.9 
43,2 
36.8'• 
42.3 
45T 
47.6 
47.0 
33.0" 
32.2 
50.6 
Scurca: Eunottat, Taxes and social contributions f 982-1 $93 
A\S 


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