TABLE OF CONTENTS

COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT......................... 1

1........... Procedural issues and consultation of interested parties.................................................... 1

1.1........ Policy context................................................................................................................. 1

1.2........ Organisation and timing................................................................................................... 2

1.3........ Consultation of interested parties and expertise................................................................ 3

2........... Problem definition........................................................................................................... 4

2.1........ The urgent need to improve research effectiveness in the EU............................................ 4

2.2........ Main problems hampering research performance in ERA................................................. 7

2.2.1..... Insufficient competition in national research systems......................................................... 8

2.2.2..... Barriers to pan-European cooperation and competition remain......................................... 9

2.2.3..... Persisting distortions among national labour markets for researchers............................... 11

2.2.4..... Limited progress on gender equality and gender content in research............................... 13

2.2.5..... Restricted circulation of and uneven access to scientific knowledge................................ 14

2.3........ The EU’s right to act, subsidiarity and EU added-value.................................................. 16

2.4........ Baseline scenario.......................................................................................................... 17

2.4.1..... Different levels of competition and low co-operation between research funding systems remain 17

2.4.2..... Limited action on researcher labour market towards mobility and careers....................... 18

2.4.3..... Unequal opportunities for female researchers and insufficient attention to gender content in research 18

2.4.4..... Uneven access and circulation of scientific knowledge remain......................................... 19

3........... Policy Objectives.......................................................................................................... 20

4........... Policy Options.............................................................................................................. 21

5........... Analysing the impacts and comparing the policy options................................................. 29

5.1........ Assessing the options.................................................................................................... 31

5.2........ Choosing the preferred policy option............................................................................. 34

5.3........ Risks and mitigating strategies....................................................................................... 36

6........... Monitoring and evaluation............................................................................................. 36

Annex 1: Consultation of interested parties and expertise used...................................................... 39

Annex 2: Further evidence for the problem analysis...................................................................... 46

Annex 3: Evaluation of previous and existing EU, regional and national initiatives........................... 56

Annex 4: Analysis of impacts: methodology and tools used........................................................... 73

Annex 5: Screening and selection of the specific measures for the policy options........................... 90

Annex 6: Detailed description of policy option 2 and 3, comparison of delivering mechanisms and problem tree 101

Annex 7: Possible indicators to be used for monitoring ERA progress......................................... 119

Annex 8: Glossary and acronyms............................................................................................... 125

Annex 9: Bibliography............................................................................................................... 135

COMMISSION STAFF WORKING DOCUMENT

IMPACT ASSESSMENT

Accompanying the document

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF REGIONS

A Reinforced European Research Area Partnership for Excellence and Growth (Text with EEA relevance)

1. Procedural issues and consultation of interested parties

1.1. Policy context

The European Research Area (ERA) is a unified research area open to the world based on the Internal Market, in which researchers, scientific knowledge and technology circulate freely and through which the Union and its Member States shall strengthen their scientific and technological bases as well as their competitiveness and their capacity to collectively address grand challenges.

ERA was launched with the European Commission's Communication 'Towards a European Research Area’ in January 2000[1] and was subsequently endorsed by the EU at the March 2000 Lisbon European Council. The Lisbon Treaty gives a new impetus and status to ERA, as it is now one of the key objectives of the Union[2]. Achieving ERA is thus a legal obligation for the EU and the Treaty provides a new basis for ERA policy.

The contribution of research to innovation and growth is precisely the aim of the 2010 Innovation Union (IU) flagship initiative launched as part of the Europe 2020 Strategy[3]. The IU Flagship announced for 2012 an ERA framework and supporting measures to remove obstacles to mobility and cross-border co-operation, to be in force by the end of 2014. This was endorsed by the European Council of 4 February 2011 (Council of the European Union, 2011 and reiterated by the European Council of 2012: "Innovation and research are at the heart of the Europe 2020 strategy. Europe has a strong science base but the ability to transform research into new innovations targeted to market demands needs to be improved. (…) efforts must be stepped up with a view to: – completing the European Research Area by 2014; in this connection the European Council welcomed the Commission's intention to propose an ERA framework in June 2012; – improving the mobility and career prospects of researchers; – rapidly establishing and implementing the inventory of EU-funded R&D and the single innovation indicator; (…)".

In a context of economic crisis, the completion of the European Research Area focusing on research and research-based solutions is even more urgent to support economic growth, scientific excellence and cohesion amongst regions and countries. Action is needed to overcome the negative effects of national fragmentation in the design and implementation of research policies and activities on Europe's research effectiveness. Measures should aim at increasing competition and exploiting cross-border synergies between national research systems, facilitate researcher careers as well as mobility, and the free circulation of knowledge, addressing thus the research component of the broader Innovation agenda of the Commission[4].

This Impact Assessment report accompanies the Communication from the Commission to the European Parliament, the Council, the Economic and Social Committee on ‘A Reinforced European Research Area Partnership for Excellence and Growth’, which presents actions responding to the need to complete ERA by 2014. This Communication was announced in the Commission's 2012 Legislative and Work programme (European Commission, 2010a).

1.2. Organisation and timing

The Commission's Directorate-General for Research and Innovation is the lead DG for this initiative.

Consultation with other Directorate-Generals (DGs) was carried out through the ERA inter-service group (ISG) and additional bilateral meetings. The ERA ISG, chaired by the RTD Deputy Director-General in charge of Innovation and ERA, included representatives from the following DGs: SG, SJ, AGRI, BEPA, COMP, DEVCO, EAC, ENV, ELARG, EMPL, ENER, ENTR, ESTAT, HOME, INFSO, JRC, MARE, MARKT, MOVE, REGIO, SANCO and TRADE. Most DG RTD Directorates were also represented[5]. The ERA ISG acted as the Steering Group for the ex-ante Impact Assessment and was convened for the identification of the problems (June 2011), the identification of policy options (October 2011) and the completion of the ex-ante Impact Assessment and Communication (February and March 2012 and consulted on the revised version of the Impact Assessment report in April 2012). The Legal Service was also consulted on several occasions.

In addition, bilateral meetings were organised with representative stakeholders: European Research Council (ERC), European Free Trade Association (EFTA), European Association of Research and Technology Organisations (EARTO), European University Association (EUA), Science Europe and League of European Research Universities (LERU). These meetings focused on the identification of problems in specific research sectors, policies and possible ways forward. The European Parliament, the Committee of the Regions and the European Economic and Social Committee were also informed of the public consultation and Impact Assessment work.

1.3. Consultation of interested parties and expertise

Several activities were carried out to consult stakeholders to gather the necessary evidence. Relevant activities included stakeholder consultations via a broad web-based public consultation (public consultation on the ERA Framework), conferences, numerous meetings with Member State representatives, experts and academics, high-level panels with leading experts/academics as well as studies and research projects. A summary of these activities is presented in Annex 1.

The various stakeholder consultations were crucial for identifying key issues hampering the development of ERA. The public consultation on the ERA Framework (from 13 September 2011 to 30 November 2011) provided an opportunity for a wide range of stakeholders to express their views on priorities for ERA. It gathered a total of 691 responses (590 responses to the online questionnaire and 101 ad-hoc contributions/position papers) from researchers (51% of respondents), research performing/funding organisations[6] (17%), citizens (12%) and the private sector (7%)[7]. The summary of the outcomes is provided in Annex 1.

The various stakeholder consultations revealed common concerns and issues within each group of actors. The key messages emerging were as follows:

For researchers, the key concerns are the low attractiveness of careers, the limited freedom of career movement and the lack of opportunities for cross-fertilisation of ideas. Key EU-level stakeholders[8] emphasised that researchers face insufficiently transparent procedures for appointment, hampered access to research results and insufficient interoperability of data repositories whilst grants are not easily portable or accessible to non-residents.

For research performing/funding organisations, more should be done to achieve excellence in research and better coordinate efforts for tackling grand challenges in Europe and internationally. Several stakeholder organisations[9] indicated that cross-border cooperation, increased pan-European competition and further support to suitable infrastructures and mechanisms for open access publishing and data repositories were desirable features for ERA. This group of stakeholders indicated the urgency to better involve them better in ERA policy.

For the private sector, there is general concern about the lack of highly-skilled and well-trained researchers in Europe. Industry also called for enhanced cooperation between education providers and the business sector. According to the ERA Framework consultation, businesses believe that the private sector academia and the business sector do not cooperate sufficiently. Small and medium-sized enterprises (SMEs) call in particular for enhanced cooperation/dialogue mechanisms and platforms between research stakeholders.

For Member States and Associate countries, action is needed at EU level to complete ERA to improve attractiveness of research careers and remove obstacles to mobility, enhance cross-border operations and support open access. Several Member States have underlined the need to promote excellence in research and to focus on global challenges. They have also called for strengthened cooperation between academia, research institutes and industry, whilst favouring a soft/voluntary approach based on best practices rather than hard legislative measures. Member States also pointed out the need to offer better career prospects through enhanced social security rights and easier grant portability.

In addition, the "Opinion on the development of an ERA Framework"[10] issued by the European Research Area Committee contributed to the identification of possible actions.

An informal meeting with Directors General of the 27 EU Member States Ministries took place in April, 2012. The DGs supported the overall approach and the ERA priorities envisaged, notably the choice to consider first the use of voluntary actions to complete ERA. Regarding measures to reinforce the partnership, they requested to take account the important relationship between national governments and national research actors, notably funding organisations.

1.4 Opinion of the Impact Assessment Board

Following the opinion of the Impact Assessment Board on the resubmitted report, this document includes a revised version of the problem definition, notably the gender aspects, it presents, when evidence is available, the efforts taken since 2000 on the specific barriers considered in this Communication. The presentation of the impacts and comparison of the policy options has been strengthened and includes the feedback of stakeholders. The proposed monitoring system is now presented in detail.

2. Problem definition

2.1. The urgent need to improve research effectiveness in the EU

European research is still among the best in the world. In many areas, research has enabled European companies to be leaders or first movers in technology development and be ahead of the game in many areas, setting the standards and performance levels for others to follow. For example, Europe has introduced "fly-by-wire" in the commercial aircraft industry and GSM in mobile telecommunications, promoted the growth of capabilities in satellite development and launch, invented the compact disc, and more recently fostered the emergence of the wind energy industry. Moreover, Europe is still the best producer of scientific publications worldwide and facing competition from emerging actors, it had lost less of its world share than the United States. Europe also generates more than 30% of world patent applications. (see Figure 1 below). Also, EU inward Foreign Direct Investment (FDI) in R&D is holding up, bucking the trend of a decline in overall inward FDI[11].

Figure 1: World share of scientific publications (2000 and 2009) (left) and EPO patent applications by inventor's country of residence (2007) (right)

However, Europe suffers from an innovation gap with the US, Japan and other competitor economies. The 'Innovation Union Scoreboard 2011' (European Commission, 2012a) shows that the US, Japan and South Korea have a performance lead over the EU27[12]. New economic powers such as Brazil, China and India have emerged and their R&D weight is already growing. This implies that, on the one hand, Europe is losing ground, in relative terms, in producing knowledge. Europe's share of publication is declining, not because Europe is publishing less, but because others are publishing more. Besides, the world share of the EU in excellent research is lower than that of the US: in 2007, Europe and the US produced respectively 32.4 % and 34.2% of the top-10% most cited scientific publications worldwide (European Commission, 2011c). On the other hand, global innovation leaders such as the US and Japan are particularly ahead of the EU27 on indicators of business activity. This reflects a lower presence of EU industry in sectors based on new technological paradigms (such as ICT and biotechnologies), as Europe has been less able, compared to the US, to develop competitive new technology-based business[13].

Europe also faces a series of crucial internal challenges: economic and financial crisis, low growth, ageing population, and a diverse set of environmental and grand challenges. To tackle these, Europe 2020 and the Innovation Union flagship initiative has put innovation at the centre of the EU's economic strategy. To respond to the many factors of Europe's weak innovation performance[14], the IU flagship sets up a comprehensive agenda to improve conditions and access to finance for research and innovation in Europe, to ensure that innovative ideas can be turned into products and services that create growth and jobs. One major component in the Innovation Union Flagship which requires action is research.

First, Europe invests too little in research compared to major competitors. In relative terms, the investment is lower than in the US (1.92% of GDP in Europe - or 201 billion Euros PPP in 2008- vs. 2.79% of GDP in the US (or 283 billion Euros PPP in the same year) (Eurostat). Recognizing that Europe's future growth relies to a large extent on research and innovation, the European Council reaffirmed in March 2010 that the overall R&D investment level should be increased to 3% of EU GDP as part of improving the conditions for research and development.

Second, knowledge production is concentrated in a relatively small number of Member States as indicated by the distribution of 10% of the most cited scientific publications and the share of patents applications by inventor's country application (Annex 2). This partly reflects the volume of public R&D expenditure in these Member States when compared with the rest of Europe (the GBAORD of DE, FR, IT, UK represented 64% of the total EU GBAORD in 2010) as well as the number of researchers in Member State.

Last but not least, Europe is short in the cutting-edge research that can deliver the breakthroughs required to fuel science and technology (S&T)-based business development. The EU deficit with respect to the US in scientific excellence is particularly important in some fast-moving fields which are precisely those where the US has generated most S&T-based growth (e.g. Information and Communication Technologies, Nanotechnology, Biotechnology, Molecular biology, Genetics). The EU deficit with regard to the US in the field of nanotechnologies is presented in Box 1 below.

Box 1: Research investment and research outputs: comparison between the EU and key third countries in the area of nanotechnologies

The case of nanotechnology is a good illustration of the underperformance of the European research system. In this key enabling technology, which is critical for future international competitiveness, the EU spends more public money annually than other countries. According to several recent estimates (NMP Scoreboard, 2011, Roco et al., 2010, OECD 2009), the European Union spends around 1.5 billion Euros annually (including the 27 Member States' national funding and EC funding), which is considerably more than the USA (1 billion Euros), Japan (0.47 billion Euros) and China (0.1 billion Euros). However, if one looks at highly cited scientific publications in this field, 10% of EU publications are in the top 10% most cited publications, compared to 16.1% for the USA, 5.4% for Japan and 8.1% for China. Another indication of Europe lagging behind is the market introduction of nanotechnology-based products and applications. According to a recent nanotechnology product inventory compiled by the Project on Emerging Nanotechnologies at the Woodrow Wilson International Centre, a total of 53% of identified nanotechnology-based products come from the US, followed by companies in East Asia (24%), Europe (15%), and other world regions (8%). Fragmented public funding in Europe leads to lower scientific and technological outputs per euro invested: the efficiency of EU countries can be seen lagging behind the US and the OECD average.

Overall European underperformance and differences in scientific output and quality amongst Member States entail missed opportunities notably in terms of growth and jobs. This is due to a variety of national, local-specific and international factors. Although it is difficult to disentangle research-specific factors from those outside the research field (i.e. factors linked to the overall economic structure and performance of a country, its labour market, the quality of its infrastructure and education and training systems, etc.) 'structural' factors such as different national approaches to competition for funding and cross-border cooperation, as well as to the fragmented labour markets for researchers; "delocalised" working methods; and policies promoting access to scientific knowledge and high speed interconnection of research centres with the availability of shared high performance computing services and unique collections of research information and data are specific to research policy. These underlying problems act as 'structural' breaks, as they do not permit the development of adequate framework conditions for research and innovation at national and European level – i.e. they constitute barriers or obstacles to the completion of ERA. In addition, the current highly variable and fragmented way of structuring research in Europe is not fostering open innovation, essential to enhance competitiveness and attractiveness of the European economy. A more co-ordinated approach to reduce this fragmentation between Member State research systems and removing barriers to competition and cooperation could act as drivers to improve the effectiveness of research in Member States and on the European level (and notably in less-advanced Member States). Reducing fragmentation and increasing effectiveness is even more important in times of budgetary austerity and when there is a need to optimise the innovation, economic, social and environmental returns on research investments.

2.2. Main problems hampering research performance in ERA

Since 2000, the European Union and Member States together have progressed towards a European Research Area. Commission initiatives supported by the Framework Programme include the European Research Council for basic research, ERA-NETs for the coordination of European, national and regional research programmes (e.g. E-Rare which co-ordinates almost half of rare disease research in Europe) and 'Article 185s' which integrate EU, national and regional efforts into a single European programme (e.g. the EMRP metrology or science of measurement initiative pools 44% of EU-wide resources into a single programme). Significant progress has also been made under Member States led ERA Partnership initiatives - Joint Programming[15] continues to gain momentum and political commitment, with the 2010 guidelines on framework conditions for joint programming in research[16] produced by the Member States providing an excellent basis on which to move to joint implementation; the 'European Partnership for Researchers[17] has led to improved management of research careers in a growing number of institutions by, inter alia, promoting take-up of the Commission-proposed Charter & Code[18] - furthermore, national efforts and the Framework Programmes have facilitated mobility for 30% of EU researchers[19]; The Knowledge Sharing[20] initiative has helped to ensure that all Member States have policies paying attention to the dissemination of knowledge. In the area of research infrastructures, a major step towards a coordinated policy approach was the establishment of the European Strategy Forum on Research Infrastructures, the e-Infrastructure Reflection Group and the first ever European Roadmap for Research Infrastructures in 2006 - subsequently up-dated in 2008 and 2010. Furthermore, since the entry into force of the Community legal framework for a European Research Infrastructure Consortium (ERIC[21]) in 2009, 12 European research infrastructures have been launched[22]. European Commission has also played a major role in supporting and coordinating the European level e-infrastructure development, especially in the areas of connectivity, high-performance computing and grid computing resources development. As a result, 8800 research and education institutions in 40 countries are benefiting from high-speed connectivity through GEANT with global connections, 24 countries have joined the Partnership for advance Computing in Europe (PRACE), the European Grid Infrastructure (EGI) supports 221 different scientific communities to share resources by means of a reliable and sustainable system.

However, Member States should take more ownership of the ERA and translate it into national policies which could contribute to constructing ERA, building policy coherence across borders and across policy levels. Several barriers at national level[23] continue to act as major breaks to the development of adequate R&D framework conditions. These barriers negatively impact on the effectiveness of Europe's research and hamper the free movement of researchers, scientific knowledge and technology. Some are specific to the research field and should be addressed through policy intervention. These barriers are analysed in the sections below. The problem tree is presented in annex 6.

2.2.1. Insufficient competition in national research systems

The level of competition amongst researchers, research teams and institutions is determined in a large part by the way public funding mechanisms are organised at national level (i.e. how public resources are allocated to researchers, research teams and institutions). Competitive funding implies that several research teams compete for project funding. In the EU, the share of public funding (i.e. government budget appropriations or outlays on research and development – GBAORD) allocated competitively varies a lot, between 20% and 80% with an average of 40% allocated through open calls for research proposals (See Annex 2). The remaining share is allocated via 'institutional funding' (i.e. funding allocated as block funding to institutions), but the share of it linked to their performance varies greatly. The majority of universities in the EU still heavily rely on public 'institutional' funding not related to performance (OECD, 2011).

As a consequence, researchers, universities and research institutions throughout the EU do not face the same level of competition for accessing public funding. This is particularly problematic as there is clear evidence in the academic literature that excellence in science is linked to competition between researchers (Franzoni, Sclelatto and Stephan, 2011). Scientists evaluated through comparable international benchmarks (e.g. analysing their international publication patterns) achieve higher research quality[24]. The literature also demonstrates a clear link between a more competitive funding environment for universities and the productivity of the whole research system in terms of the number of publications per euro invested (Auranen and Nieminen, 2010). Competition for funding acts as a strong incentive for research institutions a) to improve their financial capacities, b) to increase the visibility of individual research institutions, c) to attract and retain the best brains and d) to attract more students, access additional funding etc. (Harris, 2005, p.36). Conversely, limited competition leads to insufficient specialisation: many European universities spread their research activity too thinly across many subject areas (Mitsos et al., 2012). Without international competition, it is difficult for each university or research organisations to identify those areas in which their teams are (or could be) competitive. Last but not least, competition ultimately pays off. Innovation leader countries in Europe[25] with open and competitive systems tend to exhibit stronger records of scientific quality, as measured by average citations (Mitsos, et al, 2012).

Furthermore, researchers, research teams and research programmes and proposals are not evaluated with comparable standards. Member States' evaluation systems are national-specific and do not use - in most case - comparable standards. This results in the fact that Member States with similar shares of competitive funding do not necessarily generate comparable levels of research quality. In some countries peer-review processes are very conservative, inward-looking or complacent (Harris, 2005, p.36). Progress is observed in a limited number of national funding agencies which have introduced evaluation by international peer-reviewers, by using the European Research Council evaluation for national funding decisions and by jointly organising trans-national competition between trans-national teams in some specific fields (e.g. ‘Open Research Area', Nordforsk initiatives and the Lead Agency Cooperation scheme). Increasing compatibility (even calibration) between the European Research Council and national research councils is also observed, as the latter progressively 'accept' the ERC evaluation results as a basis for awarding national grants to highly-rated researchers who fail to obtain ERC funding (European Commission, 2010f). However, these initiatives represent a limited share of total research public funding, therefore their impact on removing sheltered funding and increasing competition amongst researchers and research teams is bound to remain limited.

2.2.2. Barriers to pan-European cooperation and competition remain

Pan-European research cooperation has been concentrated around some major initiatives: the Framework Programmes, and the European Space Agency (ESA), the European Molecular Biology Laboratory (EMBL), European Organisation for Nuclear Research. According to estimates by the European Commission, trans-nationally coordinated public funding in Europe represented around 12% of national GBAORDs in 2010, of which 7.6% for FP7 activities, 2.5% for the activities carried out by ESA, and 1% for other transnational performers. This implies that only 0.8% of national GBAORDs is used for joint programmes identified by Member States, including those supported or co-funded by the European Commission, such as ERA-Nets, Article 185 activities, etc. Only a minor portion of the budget is allocated to trans-nationally coordinated bi- or multi-lateral programmes[26] such as DEUFRAKO (French-German cooperation in transport research) and the number of initiatives, even if rising steadily, remains too low. Evidence from cross-border cooperation through the Framework Programmes shows though that it is possible to improve R&D performance by increasing spill-overs between sectors and nations, and leverage additional public and private research investment by coordinating activities amongst Member States. The evidence shows also that "imposed" contractual requirements of the Framework Programmes have brought down the average number of steps for connecting two random entities, from 6 to 2.1-2.5 steps (Di Pietrantonio, 2009). This means a strong degree of networking and of dissemination and knowledge across Europe. The evaluation of schemes such as ERA-NET and Articles 185 and 187 initiatives, facilitated since FP6, shows their strong structuring and economic impacts[27]. The launch of the Joint Programming process has enabled Member States to start coordinating their research agendas in areas linked to grand challenges[28]. This mechanism entails the definition, development and implementation of a common strategic research agenda. Despite the existence of these initiatives, there are still significant barriers preventing Member States from cooperating in a more systematic manner.

The most important barriers are linked to the low compatibility and interoperability of national research programmes. Current features, organising and functioning principles of national research programmes do not provide sufficient flexibility for national programmes to cooperate[29]. As a result, it is difficult for researchers to establish cross-border research projects using national project funding, only some national programme cycles are synchronised, proposal and project evaluation systems and notably the use of fair and transparent international peer review selection differ. This problem is particularly important in the field of grand challenges where research efforts need to reach a critical mass, and where national research programmes designed and implemented within national borders do not reach the required scale and scope for generating the necessary breakthroughs. Moreover, national programmes are not inclined to align their mainstream research agendas, meaning that Member States tend to fund the same type of research. This leads to unnecessary duplication and insufficient scale and scope at EU level. This also implies insufficient funding left to supporting innovative scientific approaches (i.e. which are outside the mainstream agenda). Evidence of these problems has been documented for instance in the field of Cancer Clinical Practice Guidelines and organic food security (Delanghe, Muldur, Soete, 2009).

The low level of cross-border co-operation in research programmes implies that Europe is not using opportunities for enhancing the quality and impact of its research. Quantitative evidence of bibliometric and patent-based patterns show that the average impact (as measured by citations) of internationally co-authored work in most countries is significantly higher than purely domestic papers (see Annex 2)[30]. Similarly, inventions resulting from international cooperation have on average a higher impact than purely national ones (Guellec and Dernis, 2008). It is therefore not surprising that the EU has one of its highest scientific impacts in 'space' where research activities are highly coordinated and integrated across European countries[31]. Two other fields where cross-border collaboration rates are higher in the EU are 'physics' and 'earth and environmental sciences' in which respectively 85% and 50% of EU publications involve authors based in several Member States. In Germany, France and the UK, these two fields are among those with the highest scientific impact[32].

Barriers remain also in terms of access to large national research facilities of European interest for non-nationals as well as to pan-European research infrastructures for scientists working in non-participating Member States, as this is determined on a variable geometry basis. In both cases, access is determined on a national basis, linked with national preference. Difficulties in accessing research infrastructures are frequently cited as an obstacle to the development of ERA by stakeholders[33].

Member States activities on research infrastructures are not yet well incorporated into national research strategies. Large research infrastructures can increase the efficiency of research efforts, as they offer scale and scope and thus allow results to be delivered faster and at a lower cost compared to fragmented efforts. Evidence shows that the ratio between publications of pan-European RIs and budget/staff is much higher than the ratio achieved by national research facilities (see Annex 2 for further evidence). The European Strategy Forum on Research Infrastructures (ESFRI) has been the key driver for the establishment a coordinated mechanism for assessing the needs and priorities for new European RIs. The ESFRI process and Roadmap have triggered similar policy development at Member States level, with a majority of Member States having adopted or preparing such national roadmaps. EU initiatives have also addressed the issue of legal forms for European research infrastructure consortia (ERIC) adapted to the needs of new European infrastructures, responding to requests from EU countries and the scientific community. So far, two initiatives have been awarded the ERIC status by the Commission[34] and 10 more are in the process of being established as ERIC. Despite the remarkable progress made by ESFRI, the efficient development and maintenance of research infrastructures of pan-European interest is currently hampered by the fact that evaluation, monitoring and impact assessment mechanisms are not sufficiently harmonised across the EU. Political willingness and means to implement the reforms required are insufficient.

2.2.3. Persisting distortions among national labour markets for researchers

Barriers remain to the implementation of open, transparent and merit based recruitment. Research shows that countries without sufficiently open, transparent, merit-based recruitment procedures coupled with relatively closed and unattractive research systems, high levels of endogamy and low levels of staffing autonomy are more likely to underperform in terms of research outcomes. Recruitment practices are not always transparent, for example, criteria for selection are not always advertised with the position or the rules for the identification of the members of the evaluation panel are not always known nor are they comparable across Member States. In seven Member States researchers' positions openings are not (or rarely) advertised through the common portal Euraxess Jobs Portal while in other countries the use of Euraxess varies significantly, creating information asymmetries for potential candidates. In several Member States, the institutions lack autonomy to select and hire staff. For example, in nine Member States, universities and research performing organisations face tight restrictions over hiring staff (European University Association, 2011). In four Member States the appointment of some or all senior positions needs to be confirmed by an external authority (European University Association, 2011). Inbreeding practices seem to prevail in Mediterranean countries and in the Eastern Member States (Technopolis, 2010). Hiring their own graduates as faculty induces lower performance (in terms of publications and prizes) (Aghion et al., 2008). It can be hypothesised that a certain number of researchers' positions are not filled in based on merit, although their exact number remains unknown (i.e. there are around 40,000 researchers vacancies per year, amongst which 9,600 are professorship positions) (Technopolis, 2010). Up to 70% of previously mobile researchers cited "finding a suitable position", as a 'major' obstacle to possible future mobility, explained partly by a lack of open and transparent recruitment procedures. A similar finding came out of the public consultation on the ERA framework (78% of respondents considering the lack of open recruitment as one of the main factors hindering internationally mobile researchers).As a consequence Europe is not fully taking advantage of the human capital available, preventing "brain circulation" and cross-fertilisation of ideas.

Working conditions of researchers in Member States differ and in some cases they are not sufficiently attractive to draw young people in the research profession, retain leading talent and attract foreign researchers. Career promotion practices and perspectives vary between countries: the UK career structure is primarily based on performance while a mix of seniority and performance predominates in most other countries. This implies that a researcher in the UK can obtain a full time, autonomous position in their mid-to-late twenties, whereas in many other Member States researchers do not obtain the same conditions until their late thirties or forties[35]. In many European countries, early career researchers have to spend many years on short-term contracts while most people from the same age group enjoy stable employment conditions in other sectors. While employment conditions and career patterns for young academics vary substantially by country, short-term employment up to the age of about 40 and high selectivity is common in a large number of countries (Teichler, 2011). Also, career structures do not always recognise mobility as a factor of productivity. The UK evidence shows that researchers who worked abroad are significantly more productive in terms of articles published than those who never left the UK. Support to inter-sectoral mobility is often lacking, with only one in six researchers in academia having experience in the business sector, and there are significant disparities between Member States (MORE Study, 2010). This is particularly important during doctoral training which is a problem for knowledge transfer according to European firms[36], as the supply of people who are qualified and trained in fields relevant to industry needs is insufficient. In the ERA public consultation only 22% of respondents find that researchers are well trained for the business labour market. This results in what is the ‘European exception’: the EU has only 46% of its research labour force in business compared to 69% in China, 73% in Japan and 80% in the US (Eurostat R&D statistics). Applying the Principles for Innovative Doctoral Training will ensure that the new generation of researchers has a set of skills which allows them to tackle societal challenges and contribute to innovation. Other EU funding schemes such as the Marie Curie actions have contributed to increased internationalisation of European research and 'brain circulation' (The Evaluation Partnership, 2010), but the number of researchers concerned remains limited when compared with the needs[37].

Conditions for portability of and access to grants also hamper researcher's mobility and careers vary between Member States. Researchers usually cannot take with them their national grants (this is the case in 13 Member States) and research teams cannot always involve partners from other countries in their research projects using national funding since in many countries (11 Member States) beneficiaries must be domestic institutions. Grants are limited to nationals in four Member States.

EU initiatives such as the Commission Recommendation on the 'European Charter for Researchers', the 'Code of Conduct for the Recruitment of Researchers' (hereunder referred to as the Charter and Code) and the ‘European Partnership for Researchers’(EPR) (European Commission, 2008a) have triggered several initiatives at national and institutional level. To support the concrete uptake of the Charter and Code principles, in 2008 the Commission launched the "Human Resources Strategy for Researchers incorporating the Charter and Code" and in 2009 established an "Institutional Human Resources Strategy Group" to provide a platform for the exchange of best practice among stakeholders from across Europe. However the implementation of the Charter and Code principles at institutional level remains slow. As to the EPR, while the Commission and Member States have delivered results in a number of priority areas and laid the ground for future action in other areas, progress at national level remains relatively slow and piecemeal. The lack of a baseline and clearly quantifiable targets in relation to some areas has resulted in Member States having different approaches[38]. Moreover, the level of involvement in the above initiatives varies between Member States and between priority areas.

2.2.4. Limited progress on gender equality and gender content in research

Not all Member States have national policies to encourage the use of the potential talent of female scientists and the integration of a gender dimension in research content. This implies that skilled female scientist's potential is under-utilised; that women are under-represented and gender balance is lacking in research and innovation decision-making; and that the lack of gender dimension in research content possibly undermines quality and relevance of research activities. This under-utilisation of the available skilled female researchers is a waste of talent as well as a waste of return on investment, which is particularly unacceptable when Europe’s future prosperity depends on its human capital. 45% of PhD graduates are women, but we have only 30% female researchers in Europe and just 19% in the top grade in academic careers. The number is even smaller at leadership level: only 13% of heads of institutions in the higher education sector. There is evidence that mixed research teams contribute to increased research performance as they benefit from a wider expertise, knowledge sharing, diverse points of view and a higher level of social intelligence. Given that a more equal participation of women in science would increase the diversity of the talent pool, a more diverse workforce and decision making process would have positive effects on scientific productivity and excellence. Furthermore, the lack of gender dimension in research content undermines the quality and relevance of knowledge. Not only would research quality benefit from this, but moreover, there are high enormous costs and even dangers associated to not taking into account the gender perspective in the research process would be avoided.

Positive developments can be observed in a few European countries, where research organisations are encouraged explicitly through legal provisions to adopt gender action plans. In several other countries there is a legal basis for the creation of gender action plans and positive action - although gender action plans are not explicitly an obligatory instrument to establish gender equality in science (this is the case in five Member States). Female scientists also tend to be less represented in the highest grade of research careers (European Commission, 2009b) and this varies significantly among Member States. For example in two Member States 25% of the heads of higher education institutions are female, whilst in four of them their share is below 10% (European Commission, 2009b). The female gender perspective in research agendas is seldom encouraged by Member States even if a small number of Member States fund programmes for gender equality and/ or gender in research content. Explicit gender requirements or evaluation criteria for funding in research programmes, projects or studies exist in, again, very few Member States. Without enhancing women's participation and the integration of the gender dimension in research content, ERA's aims to deliver high levels of employment, productivity and social cohesion are not fully achievable. A majority of respondents to the public consultation stated that a higher involvement of women in science would contribute to European socio-economic growth as well as impact research performance and research excellence.

2.2.5. Restricted circulation of and uneven access to scientific knowledge

Scientists, especially in less endowed institutions, have increasing problems to access scientific knowledge. Journals constitute over 90% of scholars' information sources (Tenopir et al., 2009, King et al., 2009). Journal subscription prices as well as the number of peer-reviewed journals are increasing rapidly. Between 1986 and 2008, journal subscription expenditures increased by 374% (Giglia, 2010b). A single institution cannot afford to subscribe to all the relevant ones, negatively affecting access[39], use and impact of knowledge (Gargouri et al., 2010). For more than a half of the respondents, one of the reasons for the absence of access was that their organisation's library had not purchased a licence for the content because of budgetary constraints. According to a 2009 UK survey (Publishing Research Consortium, 2009) a significant share of SMEs (55%) said that they had recently experienced difficulty accessing a research article (against 34% in the case of large companies), with cost reported as the key barrier. This prevents incorporating recent developments in research or innovation agenda, affecting their scientific quality and the economic outcome.

In April 2008, the Commission issued a Recommendation[40] on the management of intellectual property in knowledge transfer activities together with a Code of Practice for universities and other public research organisations. This Recommendation provides Member States and stakeholders with a set of best practices and policies to stimulate knowledge transfer. However, knowledge transfer between public research institutions and the private sector to foster innovation remains insufficient. Europe is lagging behind when compared with the US in terms of performance. Even if the share of public research funding coming from the private sector was higher in the EU (0.05% of GDP) than in the US (0.02%) or Japan (0.015%), on average the EU lagged behind in terms of scientific cooperation measured by co-publications (36.2 publications per million researchers, while in the USA they were 70.2). The number of staff (e.g. in university knowledge transfer offices) with experience in industry is significantly lower in Europe. In addition, only 5-6% of the researchers in the EU have moved back-and-forth between the public and private sector.

Several EU initiatives have addressed the issue of open access to scientific knowledge and of knowledge transfer. The Council Conclusions (14865/07) invited the Commission to experiment with open access in the Framework Programme and Member States to reinforce national strategies on access to scientific information, thus building on the Commission Communication on scientific information in the digital age[41]. Since then, funding and soft measures have been adopted at EU level to support the development of open access. As a result of FP7, scientific publications resulting from a set of EU-funded projects are now increasingly available in open access. Despite their relevance, FP-funded measures concern only a very limited share of EU’s overall R&D expenditure and their impact remains thus limited. Member States[42] are not equally advanced in how they support and address the issue of open access (European Commission, 2011d).

In addition to open access, effective implementation of ERA for research excellence requires a strategic approach to promoting the development and take up of digital research services and the transformation of traditional ways of doing research into new data-intensive and collaborative research paradigms. Member States have different usage policies for publicly funded research e-infrastructures. In some cases high-speed connection networks or supercomputers are offered only for universities, in others to schools and hospitals, and in others allow linkages with commercial services providers and industrial research. Different national policies create obstacles for multi-national research collaborations, if research consortia have partners of different types. This is against the principles of Innovation Union. Also, the new millennium has seen an accelerating deployment of information and communication technologies, and a rising tide of information sweeping across all scientific areas. Although in a digital age the majority of knowledge transfer and creation takes place through digital means, there are several barriers preventing researchers from having seamless access to research on-line services. This creates major obstacles for collaboration and resource sharing between organisations across borders. For instance, researchers wishing to access research related services online, e.g. publications, research data, or computing services, have to apply and manage different user accounts depending on the service provider or the administrative location of the researcher. Europe lacks a common Authentication (identification) and Authorisation (rights to access services) Infrastructure (AAI) which provides researchers with seamless access to research services in digital ERA. In the last years, there has been progress in this area, through eduGAIN European inter-federation service. Currently, eduGAIN has 11 members, 4 candidates and 2 pilot countries[43]. However, several countries have not yet joined service, and there is no clear data on the number of research institutions in different MS providing the necessary identification services needed to implement the cross-border access to digital research services. Development of new modes for research through different digital research services has been supported through framework programme funding. In the last years, some Member States have set up national level strategies or joint collaboration to deal with the issues relating to digital research services provision and take-up (UK, NL, Nordic countries)[44]. However, this is not enough to ensure efficient research and innovation through the potential of digital services for all European researchers in all Member States. Effective implementation of Digital ERA requires strategic action in all Member States, with active involvement of all research related stakeholders.

2.3. The EU’s right to act, subsidiarity and EU added-value

Article 179[45] of the Treaty on the Functioning of the European Union (TFEU) lays down the right for the Union to create the necessary conditions for realising the European Research Area. Article 182.5 of the TFEU allows the use of the legislative procedure to establish the measures necessary for the implementation of the European Research Area.

The completion of ERA does not put into question the sovereignty of Member States. The Treaty clearly states that research is a policy area of shared competence between Member States and the Union. All the measures proposed in the ERA framework are compliant with the Treaty provision (TFEU, Art. 4.3) stating that the exercise of EU competence shall not result in Member States being prevented from exercising theirs. The options selected illustrate how European integration and internal reform of research systems must go hand in hand, respecting the subsidiarity principle. The objectives of the proposed actions cannot be achieved sufficiently by Member States in the framework of their national constitutional system (necessity test). Three options are proposed to tackle the identified problems: (1) Reinforced partnership for ERA; (2) Sectoral legal measures for ERA; and (3) Development of an overall legal framework at Community level. Given the persistent barriers and the limited progress observed 12 years after the launching of ERA, the Union is best placed to provide directions for Member States and the Union, on the basis of Article 179 for the first one, and through Article 182.5 for the two others.

European added-value is demonstrated by several reasons. First, optimised allocation of activities – where necessary - will be attained through a coordinated approach, improving effectiveness of research systems and reducing unnecessary duplication of efforts. Second, level playing field and critical mass are expected to be achieved from the implementation of ERA, thus allowing creating the conditions for the most productive research teams to work together and to be competitive internationally. Third, European impetus maximises the possibility of completing ERA in the short term, given the persistence of national barriers mentioned above. Fourth, the European Union level is the best one to assess objectively whether progress has been attained, whether it is proportionate; and whether there is a need for further action to improve the situation.

In particular, European action will warrant the implementation of common approaches so that researchers, knowledge and technologies circulate freely across Europe, thus promoting the opportunities for effective research systems. It will ensure transnational ‘connectivity’ of the European research system for every region and country in Europe, thus helping solving the innovation divide. For example, the development of open access to scientific publications and research data is very important for researchers who are based in less endowed universities/research organisations. EU intervention will help ensuring similar conditions for competition in an EU-wide space, both in relation to research projects selection and researchers recruitment. Moreover, EU intervention can facilitate the removal of barriers to launch large-scale and complex research efforts between Member States to tackle grand challenges. Setting up common research priorities and agendas requires a strong interface with i) policy-makers in charge of the policies addressing those challenges and framing the markets where the innovations need to take place; and ii) the industry active on these markets. In the context of the Single Market, such interfaces can be best organised at EU level. Common solutions developed through cross-border collaboration may lead to common standards, thus contributing to shaping new markets and providing more certainty to R&D investment.

Alternative solutions exist through the setting up of inter-governmental agreements; however the administrative and legal processes which typically have to be followed under such intergovernmental schemes are sometimes considered as too lengthy, difficult and cumbersome and may not lead to completion of ERA by 2014.

2.4. Baseline scenario

The baseline scenario reflects how the current situation would evolve without intervention. Solving the problems presented above require both strong political willingness and the means to implement the reforms required. However, efficiency in the use of public funds can be a major driver in times of budgetary constraints. But if some reforms are undertaken in each Member State, they would probably be insufficient and carried out in an uncoordinated way, reinforcing fragmentation within Europe. FP7 will continue to foster cross-border and excellent research, but no additional funding would accompany reforms at Member State level.

2.4.1. Different levels of competition and low co-operation between research funding systems remain

In the short term, the current activities will probably not induce progress in terms of promoting competition and co-operation in national research funding systems nor at cross-border level, as most of the observed barriers and fragmentation between national systems will remain. Barriers to competition in national research systems would remain as there is no indication that structural changes may take place in national funding systems. However, some progress can be expected in terms of compatible evaluation systems through an extended use of ERC evaluation mechanisms by some national funding agencies. Limited and uneven progress is expected in continuing the implementation of joint programming between Member States. The recently adopted framework conditions for joint programming will foster Member States common, voluntary policy actions on public research, but probably at a slow pace. Besides, the degree of concrete commitment to joint actions will be a function of the budgetary situation in participating Member States. Under the current circumstances, it is probable that major research actors will continue driving the process, with little cooperation with lagging Member States. This may reinforce the innovation divide. Existing cooperation initiatives between some of Member States research programmes are expected to continue.

Reinforced attention to grand challenges, increased technological leadership and funding the innovation capability of firms can be expected through the adoption of the Commission proposal for Horizon 2020 programme. This programme will run from 2014 to 2020. It has been developed to increase the contribution of research and innovation to tackle grand challenges and promote innovation. However, even if the proposal includes an increased budget (approximately 80 billion Euros) when compared to previous FPs, this budget will still represent only a small share of the total funding for research in Europe and insufficient to raise substantially overall performance and only after 2014.

In the field of research infrastructures, the sustainability of Member State financial commitments for developing and maintaining research infrastructures may be challenged in the short or medium term. With a majority of Member States facing budgetary squeezes and postponing long-term and major investments, the financing of the European Strategy Forum on Research Infrastructures (ESFRI) Roadmap may be jeopardised. As part of the ESFRI Roadmap, 48 priority pan-European research infrastructures have been identified in a number of scientific fields and 10 projects have already started, whilst additional 17 projects are due to be launched before the end of 2013[46]. Considering that the commitment at the Innovation Union is to implement 60% of the ESFRI Roadmap projects by 2015, it is expected that the current pace and efforts will be sufficient to meet the goal if no deviations take place.

The baseline situation will hardly respond to stakeholder's expectations. 82% of the on-line respondents to the consultation on ERA see developing more synergies between European and national actions as important, while 79% believe that EU support for transnational access to research infrastructures of pan-European relevance should be increased. Strengthening the inter-operability of instruments and of scientific data at EU level and increasing awareness at EU level of access opportunities to national research infrastructures are also considered as 'important' and 'very important' by more than 70% of respondents.

2.4.2. Limited action on researcher labour market towards mobility and careers

Distortions in the labour market for researchers will continue to exist or worsen, notably in a context of budgetary cuts and economic austerity. In-breeding practices are likely to persist and may even be exacerbated in Mediterranean countries and East European Member States as shrinking public R&D expenditure may lead to fewer senior and permanent research positions. There is little evidence suggesting that Member States lagging behind will undertake the necessary reforms to ensure that open, transparent and merit-based recruitment procedures are in place in all universities and public research institutes. Most likely the share of positions advertised on Euraxess (currently about 30% of all researchers' positions in Europe) will increase slowly in the short to medium-term. Researcher mobility will not be substantially enhanced as restrictions to grant portability and accessibility are likely to continue in a majority of Member States. Uneven and patchy implementation of the Charter and Code and the EPR by Member States and research organisations in the area of recruitment and portability of grants is expected to continue in the short and medium-term. The number of research employers and funders in Europe participating in the "Human Resources Strategy" process is expected to rise at a relatively slow pace[47].

The status quo is not acceptable for stakeholders. 81% of the respondents to the public consultation on the ERA Framework consider that working conditions and career prospects of public sector researchers are less attractive than those of other professionals with similar qualifications. Up to 75% of respondents believe that the lack of attractiveness stems from universities and research institutions being underfunded, limited availability of research positions, low wages and insufficient cooperation between academia and the private sector.

2.4.3. Unequal opportunities for female researchers and insufficient attention to gender content in research

No significant improvements are expected with regard to gender equality and the gender dimension in research even if a broad majority of respondents to the ERA consultation consider that a higher involvement of women in science will contribute to European socio-economic growth. Although some slow progress may be achieved in some Member States (and mostly on an ad-hoc manner), the percentage of female researchers in senior and management research positions in the EU27 is likely to stagnate or increase in a marginal and irregular manner. There is no ground for expecting radical changes in terms of gender dimension in research in the majority of Member States where no such measures exist. Gender equality will continue to be promoted through EU programmes (i.e. mainstreaming of gender within the Science in Society FP7 Programme, Horizon 2020 and the research part of the Structural Funds) and various activities (i.e. the development of indicators, analyses and guidelines), however the overall impact on improving gender equality will remain limited to the beneficiaries of the EU programmes and to the small number of beneficiary institutions and will therefore be insufficient to correct the under-representation of women in science. The two-year public information campaign to be launched in 2012 will aim tackle stereotypes on gender and attracting and retain more women in scientific careers[48]. However, existing and planned initiatives will not be sufficient to support long-term structural change at Member States and institutional level in gender management and research design and implementation. A multiplier effect is required in order to reach a critical mass of research institutions by strengthening the collaboration among Member States on the basis of a common approach or guidelines.

2.4.4. Uneven access and circulation of scientific knowledge remain

Access to publications and data will remain limited and uneven and researchers in less-advanced Member States or less-endowed institutions will continue to experience barriers in accessing knowledge. Policies on open access will continue being implemented unevenly by research funding organisations in 17 Member States and by universities or research centres with open access mandates in 22 Member States.

Identity federation services will continue being provided through EduGAIN by 11 member countries, and current candidate (4) and pilot (2) countries will develop into becoming members. . European level expansion of the identity federation services and their deployment for online access to publications and research data as well as computing and virtual collaboration services is uneven, as it depends on strategies of national authorities and individual research institutions. Without joint coordination it is unlikely by 2014 these services will be made widely available to all researchers across Europe.

National support to the implementation of e-services will remain limited and uneven. Absence of co-operation among the Member States in the roll-out of new services (building on the available e-infrastructures, pooling of resources) will hinder their effective use. This may result in a limited use of the current facilities during off-peak periods and ultimately an inefficient use of resources. Industrial research partners will keep facing problems if trying to participate in multinational research collaboration because of lacking shared acceptable usage policies for common collaborative research infrastructures.

Actions to promote knowledge transfer will continue to be implemented on a case by case basis, with some Member States taking the lead and some other lagging behind. The Commission is supporting the development of knowledge transfer capacity in higher education institutions and public research organisations, in particular through its 2008 Intellectual Property Recommendation[49].

3. Policy Objectives

The European Research Area policy overarching goal is to increase the performance, excellence and impact of Europe’s Research and Development system. It will help the EU back to the path of economic growth by fostering scientific excellence and research underpinning innovation and increasing the attractiveness of the EU as a research location.

The objective of the Communication is to identify and promote actions which ensure that by 2014 the adequate conditions are in place for improving the effectiveness of European research systems.

Specific objective || Operational objective for 2014

More effective national research systems || Barriers to competition and the use of international peer review evaluation in national research systems are removed

Optimal transnational co-operation and competition || Barriers to compatibility and interoperability between national research programmes and to access to pan-European research infrastructures are removed

One pilot cross-border synchronised research call, notably on grand challenges, launched using international peer review evaluation and a single pan-European score

Harmonised monitoring, evaluation and impact assessment principles and procedures for pan-European research infrastructures are adopted and implemented

An open labour market for researchers || Barriers to open, transparent and merit based recruitment in public research systems, cross-border portability of and accessibility to national grants are removed

Frameworks supporting the career development of researchers and innovative doctoral training are adopted and implemented

Gender equality and gender mainstreaming in research || Barriers to gender equality and the gender dimension in research are removed

Optimal circulation, access to and transfer of scientific knowledge || Policies and means for facilitating online access to publicly-funded scientific publications and data are defined and coordinated Policies to foster knowledge transfer, cross-border sharing of e-infrastructure and take up of digital services for research are defined Electronic identity services for researchers enabling transnational access to digital services (collaboration, computing, scientific information) are implemented or planned

4. Policy Options

To complete ERA by 2014 many barriers at national level have to be removed quickly. This report analyses four policy options. The first one is Policy Option 1 (Business as usual). The three other policy options would follow alternative paths to achieve the overall objective and they all require action from Member States, Research funding and performing organisations and the Commission. Their implementation would neither entail increased public R&D spending at Member State level nor increased cross border funding (only reallocation based on commonly agreed agendas). Policy Option 2 (Reinforced Partnership for ERA) is based on voluntary action at Member State level whose progress would be partly linked with the European Semester. This option also entails reinforced partnership between research funding and performing organisations (hereunder referred to as research stakeholders) and the Commission. Policy Option 3 (Sectoral legal measures for ERA) combines legally-binding measures for ERA with voluntary actions by Member States, linked as appropriate with the European Semester. It also entails reinforced partnership between research funding and performing organisations (hereunder referred to as research stakeholders) and the Commission. Policy Option 4 (ERA Framework Directive) explores the adoption of a coherent legal framework of principles and mechanisms.

The potential measures included in the options were identified and screened on the basis of their advantages and disadvantages. The intervention logic and the full spectrum of measures envisaged to address each specific objective is presented in Annex 5.

Policy option 1: Business as usual (BAU)

This option would entail the continuation of current policies, presented in the Baseline. The major development would be based on the adoption and implementation in 2014 of Horizon 2020, with its increased budget supporting research and innovation cross-border activities.

Policy option 2: Reinforced partnership for ERA

To deliver ERA by 2014, reforms of the national research and innovation systems and reinforced partnership - deeper, wider and more efficient than to date - between Member States, the Commission and research stakeholder organisations would be at the core of this policy option. It fully develops the ERA partnership via the implementation of the ‘Ljubljana Process’[50].

This policy option would entail that Member States undertake reforms for ERA as called for by the Innovation Union. A Commission Communication would invite Member States to remove specific barriers for competition and co-operation as well as for fostering a research friendly environment. Member State would be invited to include in the National Reform Programmes[51] an annex in which they specify the reforms planned by field of action. The Commission would assess the reforms and publish ERA-Progress reports in September every year, possibly with ERA recommendations for Member States. In case of persisting barriers, different options will be considered, including the legislative options, based on the new provisions in the TFEU. This mechanism is expected to motivate Member States to undertake the necessary reforms.

At the same time, this option foresees the research stakeholder organisations[52] would take responsibility for the ERA actions addressed to them within the limits of their respective autonomies and jurisdictions as set by national authorities. Relevant research stakeholder organisations would be invited to sign with the Commissioner a Joint Statement in general terms of their willingness to work towards completing ERA. They would also set out the specific ERA actions they would take in terms of timing, deliverables, public reporting on progress, etc. in a Memorandum of Understanding co-signed with the Commission or a unilateral declaration, informing their respective national authorities and the other Partners.

The Commission would also propose measures in different forms (such as Recommendations) to complete ERA. The Commission would support Member States and stakeholder organisations. It would ensure that Horizon 2020 helps to consolidate the completion and functioning of ERA from 2014, supporting ERA-compliant actions relating to researcher careers and mobility, gender action, cross-border cooperation, open access, knowledge transfer and infrastructures. It would ensure inclusive ERA policy development by supporting structured dialogue with research stakeholder organisations and relevant civil society bodies - e.g. in the form of a dedicated stakeholder platform.

The set of measures which will be included in the Communication are presented below, by specific objective:

More effective national research systems:

· Member States are invited to introduce or enhance competitive funding through calls for proposals and institutional assessments as the main modes of allocating public funds to research and innovation, introducing legislative reforms if necessary; and to ensure that all public bodies responsible for allocating research funds apply the core principles of international peer review

· The Commission will support through the Smart Specialisation Platform Member States and regions in using Structural Funds to develop research capacity and smart specialisation strategies, including support to joint research programmes, in line with Cohesion Policy objectives; support mutual learning and the exchange of good practice between Member States on the removal of national legal and other barriers to ERA for the priorities set out in this Communication; and support ERA Chairs aimed at fostering structural change in institutions to raise their research quality to international levels of excellence

Optimal transnational co-operation and competition

· Member States are invited to step up efforts to implement joint research agendas addressing grand challenges, sharing information about activities in agreed priority areas, ensuring that adequate national funding is committed and strategically aligned at European level in these areas and that common ex post evaluation is conducted; ensure mutual recognition of evaluations that conform to international peer-review standards as a basis for national funding decisions; remove legal and other barriers to the cross-border interoperability of national programmes to permit joint financing of actions including cooperation with non-EU countries where relevant; confirm financial commitments for the construction and operation of ESFRI, global, national and regional RIs of pan-European interest, particularly when developing national roadmaps and the next Structural Fund programmes; and remove legal and other barriers to cross-border access to RIs

· Research stakeholder organisations are invited to agree on common funding principles - eligible costs, reporting requirements, etc. to make national research programmes compatible, interoperable (cross-border) and simpler for researchers; pilot the use of synchronised calls with, where possible, single joint international peer review evaluation of proposals as a basis for funding decisions; and further develop and deploy the Lead-Agency, Money-Follows-Cooperation Line, Money-Follows-Researcher and other models for cross-border cooperation

· The Commission will pursue, stimulate and participate in Public-Public Partnerships to address grand challenges as set out in the Communication on Partnering in Research and Innovation to co-ordinate and leverage Member States' contributions and ensure close coordination with relevant activities under Horizon 2020; on the basis of the information supplied by Member States, map activities in agreed priority areas, with a view to identifying strengths, weaknesses, gaps and duplications; support Member States and research funding organisations in implementing joint international peer review evaluations and setting common funding standards - e.g. through an ERA Mark label recognising best practice in cross-border research operations; support through Horizon 2020 access to RIs as well as the on-going overall integration of EU RIs particularly those awarded ERIC status; encourage Member States to link RI roadmaps to the ESFRI roadmap and smart specialisation strategies in Structural Funds co-financed research and innovation programmes, reinforcing the capacity of less favoured regions to host and participate in RIs of pan-European and international interest; support training programmes for the management of such RIs; develop in cooperation with ESFRI, e-IRG and other stakeholders a Charter of Access setting out common standards and harmonized access rules and conditions for the use of RIs; work with ESFRI to set priorities for implementing the Roadmap and to provide advice and guidance to Member States on overcoming legal, financial or technical obstacles to implementation; define with ESFRI, e-IRG and other stakeholders common evaluation principles, impact-assessment criteria and monitoring tools which can be applied in regional, national and European programmes to help combine funds from different sources; and work with e-IRG to promote the alignment of EU and national approaches to eRI development and use

An open labour market for researchers

· Member States are invited to remove legal and other barriers to the application of open, transparent and merit based recruitment of researchers and which hamper cross-border access to and portability of national grants; support a national body to implement the Declaration of Commitment to provide coordinated personalised information and services to researchers through the pan-European EURAXESS network and the setting up and running of structured innovative doctoral training programmes applying the Principles for Innovative Doctoral Training; and create an enabling framework for implementing the HR Strategy for Researchers incorporating the Charter & Code.

· Research stakeholder organisations are invited to advertise all vacancies on the EURAXESS Jobs portal using the common profiles established in the European Framework for Research Careers; fill research positions according to open, transparent and merit based recruitment procedures proportionate to the level of the position in line with the basic principles of the Charter & Code and including non-EU nationals; develop strategies to support the career development of researchers in line with the HR Strategy for Researchers; define and implement principles for accessibility to and portability of national grants, provide structured doctoral training based on the Principles for Innovative Doctoral Training; and develop and implement structured programmes to increase mobility between industry and academia

· The Commission will bridge information gaps to foster mobility and research career development by assessing and strengthening collaboration and coordination in the EURAXESS network for researchers to have direct access to personalised assistance, making it the means of accessing tailor-made assistance; support the setting up of a European Accreditation Mechanism for Charter & Code-based human resources management in universities and publicly-funded research institutions and the work of a 'pathfinder group' of countries for the achievement of automatic recognition of comparable degrees; as well as take initiatives to address social security barriers for researchers in the EU and further facilitate the entry and stay of third country national researchers by clarifying in a Communication EU rules on coordination of social security schemes for groups of workers with a high level of intra-EU mobility, including researchers, resuming work on a pension portability Directive setting minimum standards for the acquisition and preservation of supplementary pension rights, supporting stakeholders in setting up pan-European supplementary pension fund(s) for researchers and reviewing Directive 2005/71/EC on a specific procedure for admitting third country nationals for the purposes of scientific research

Gender equality and gender mainstreaming in research

· Member States are invited to create a legal and policy environment and provide incentives to remove legal and other barriers to the recruitment, retention and career progression of female researchers while fully complying with EU law on gender equality, address gender imbalances in decision making processes and strengthen the gender dimension in research programmes; engage in partnerships with funding agencies, research organisations and universities to foster cultural and institutional change on gender - charters, performance agreements, awards and ensure that at least 40% of the under-represented sex participate in committees involved in recruitment/career progression and in establishing and evaluating research programmes

· Research stakeholder organisations are invited to implement institutional change relating to HR management, funding, decision-making and research programmes through Gender Equality Plans which aim to conduct impact assessment / audits of procedures and practices to identify gender bias, implement innovative strategies to correct any bias and set targets and monitor progress via indicators

· The Commission will foster gender equality and the integration of a gender dimension in Horizon 2020 programmes and projects from inception, through implementation to evaluation, including through the use of incentives; and propose in 2013 a Recommendation to Member States with common guidelines on institutional change to promote gender equality in universities and research institutions and dedicate specific funds to reinforce collaboration between Member States

Optimal circulation, access to and transfer of scientific knowledge

· Member States are invited to define and coordinate their policies on access to and preservation of scientific information; ensure that public research contributes to Open Innovation and foster knowledge transfer between public and private sectors through national knowledge transfer strategies; harmonise access and usage policies for research and education-related public e-infrastructures and for associated digital research services enabling consortia of different types of public and private partners; and adopt and implement national strategies for electronic identity for researchers giving them transnational access to digital research services

· Research stakeholder organisations are invited to adopt and implement open access measures for publications and data resulting from publicly funded research; implement and promote the uptake of electronic identity and digital research services; ensure optimal interaction and linkages and strategic partnering between academia and industry and define joint collaborative research agendas to maximize the use of research results; and improve recognition and professionalization of knowledge transfer activities and strengthen the role of knowledge transfer offices

· The Commission will establish open access to scientific publications as a general principle for all EU funded projects in Horizon 2020. For research data, develop a flexible approach that takes into account different scientific areas and business-related interests; continue to fund infrastructure projects related to open access; adopt a Communication and Recommendation to Member States on access to and preservation of scientific information in the digital age; propose a roadmap for e-infrastructure development to support e-Science through open access to research tools and resources; support activities to raise stakeholder awareness of open access and e-Science; promote knowledge transfer activities in Europe through networking of innovative university-business platforms, including bottom up, practitioner-led initiatives, and sectoral knowledge transfer offices; work with stakeholders to develop a set of model consortium agreements to enhance knowledge transfer; and facilitate a Member State forum for regular exchange and reporting on national developments on the provision, take-up and use of digital research services.

Annex 6 presents the details of the measure and the main actors responsible for their delivery.

Policy option 3: Sectoral legal measures for ERA

This policy option responds to the request of the Impact Assessment Board and includes a number of binding legal measures proposed by the Commission in several sectors (i.e. topic-specific fields) as required. The rationale for proposing such binding measures is that legislation more surely guarantees that common principles and governance mechanisms would be put in place and that barriers indeed would be removed, and that adequate framework conditions would be in place in all Member States. Legal measures would ensure uniform implementation of key ERA elements, which may entail reforms at Member State level. Legal measures would be possible given the new legal competencies of the Union to achieve ERA introduced by the Lisbon Treaty (Article 179.1 TFEU in conjunction with Art. 182.5 TFEU), bearing in mind the shared competence.

This set of legislative measures would be completed by voluntary actions by Member States and stakeholders. They would cover areas where Member States and stakeholders are best placed to identify and address key barriers. In these areas, the Commission Communication would identify as in the previous option both the barriers to be removed as well as the operational strategies to be adopted.

The measures will address the following objectives and will include the following actions:

More effective national research systems:

· Member States to undertake national reforms to remove legal, administrative and other types of barriers to competitive funding allocation

· The Commission to propose legislative measure on international peer review evaluation for national funding decisions

Optimal transnational co-operation and competition:

· Member States to remove legal, administrative and other types of barriers to cross-border access to national research infrastructures of European interest; set up jointly with stakeholder organisations joint calls using common international peer review evaluation (notably within the Joint Programming process) and a 'Charter for Access' for research infrastructures

· The Commission to launch the 'ERA Mark' label for cross-border research programmes and to propose legislative measures on common principles for cross-border operations, on common principles for the monitoring, evaluation and impact assessment of research infrastructures and funding decisions and on common principles and procedures for the setting up and management of pan-European research infrastructures

An open labour market for researchers:

· Member States and stakeholder organisations to set up frameworks and strategies for the career development of researchers, innovative doctoral training, to advertise vacancies and provide tailored information to mobile researchers on national single access points/Euraxess

· The Commission to set up an accreditation mechanisms for the Charter and Code, to propose legislative measures on common principles on open, transparent and merit-based recruitment of researchers and on common principles for portability of grants and for access to national grants and to adopt relevant support measures (e.g. Communication on social security) and amendments to key EU legislation (Directive 2005/71/EC)

Gender equality and gender mainstreaming in research:

· Member States and stakeholder organisations to integrate the gender dimension into publicly funded research programmes and implement gender strategies and action plans

· The Commission to propose a Commission Recommendation on guidelines for institutional change in universities and other research organisations (foreseen on 2013)

Optimal circulation, access to and transfer of scientific knowledge:

· The Commission to propose a Commission Communication and Recommendation on access to and preservation of scientific information in the digital age and to provide support measures on digital ERA; legislative measures on open access to all publicly-funded scientific publications as well as for research data, when relevant; on specific identity provision and federation approach for researchers and scholars to be implemented by all MS and all research organisations and using publicly funded research infrastructures for research consortia with private and industrial research organisation partners.

As in the previous option, research stakeholder organisations would be responsible to implement flanking actions within the context of their specific commitments. Their actions would be reinforced by the adoption of the principles and mechanisms included in the legal measures.

Annex 6 provides an overview of the legislative and voluntary measures included in policy option 3.

Policy Option 4: ERA Framework Directive

This policy option would consist of a comprehensive legal package in the form of a Directive which would contain legally binding measures in conjunction with the freedom for Member States to choose the appropriate means to achieve the results required by the Directive. To express that the Directive intends to be of an overarching nature, covering the whole research system, it will be referred to as a Framework Directive. Whilst policy option 3 contains a set of separate legal and non-legal measures, this policy option would bundle the different legal measures into a single framework. Legal measures are based on the legal competencies of the Union to achieve ERA introduced by the Lisbon Treaty (Article 179.1 TFEU in conjunction with Art. 182.5 TFEU).

The objective of the Framework Directive would be to introduce binding principles as well as specific provisions facilitating competition and cross-border research, the opening up of the labour market for researchers and the free circulation of knowledge. This approach would lead to a situation where common standards and principles are applied across the EU. Given the diversity of the rules underpinning national R&D systems, the framework directive approach allows Member States to choose the most adequate means to obtain the results made obligatory by the Framework Directive.

The Directive would contain principles, (governance) procedures, and provisions that are binding on Member States as to the barriers to remove. Technical or operational details would be included in annexes and could be subject to review by an implementing committee.

The provisions would contain the definition, objective and scope of ERA, identify the main actors, as well as their rights and obligations. The policy coordination role of the Commission under Article 181 TFEU would be set in an appropriate governance framework aiming as consistency between Member States' and EU's policy and action in this area.

By introducing ERA as an instrument for sectoral integration in the field of R&D, distinct from the Internal Market, the Treaty legislator has expressed that measures to complete ERA go over and above those of the Internal Market. In other words, measures to achieve free circulation of researchers, knowledge and technology are not confined to those that establish free movement of persons, goods, services and capital. They can for instance also encompass research policy coordination, promotion and assistance measures.

The framework directive would include the following provisions:

· General principles for ERA (legally binding provisions applying to all Member States)

· The establishment of ERA as a 'unified research area based on the internal market which is open to the world, in which researchers, scientific knowledge and technology circulate freely and though which the Union and its Member States shall strengthen their scientific and technological bases as well as their competitiveness';

· Policy coordination and reporting: a governance mechanism to ensure consistency between national R&D policies, and between those policies and European R&D policy. The monitoring and subsequent evaluation would be performed by the Commission.

Specific provisions regulating ERA:

· More effective national research systems: the framework directive would require Member States to ensure that funding, as defined in the Directive, takes place on a competitive basis and also to use an international peer review evaluation processes (binding provision) for the allocation of funds to projects;

· Optimal transnational co-operation and competition: the framework directive would require Member States to enhance research co-operation through a) adoption of minimum standards for the interoperability of research systems, b) carrying out synchronised calls for research proposals in conjunction with a common international peer review system; and c) adoption of principles to reinforce access to pan-European research infrastructures;

· An open labour market for researchers: the framework directive would require Member States to adopt strategies and action plans on a) career development of researchers, b) principles for open recruitment in public research systems, c) principles for cross-border portability and accessibility of national grants and d) the setting up of doctoral training linking private and public sector;

· Gender equality and gender mainstreaming in research: the framework directive would require Member States to adopt strategies and action plans on gender.

· Optimal circulation, access to and transfer of scientific knowledge: the framework directive would require Member States to adopt relevant policies and measures for ensuring open access to scientific publications and scientific data and online research and identification services and shared usage policies for digital ERA.

The Commission would propose the Framework Directive at the earliest in 2013.

5. Analysing the impacts and comparing the policy options

The policy options consist of different mechanisms to remove barriers and promote effectiveness of research systems. Once and if all ERA related measures are put in place, they are expected to attain similar indirect impacts (as, for example, on excellence and performance). Therefore, the main differences in terms of impacts reside in the timing for delivering the expectations, in the implementation costs associated and in acceptance by Member States and Stakeholders of each option. But before presenting the specific assessment of each option, the overall added value of ERA in terms of indirect economic, social and environmental impacts as well as the main caveats which may arise will be discussed.

Expected economic impact of ERA

Public and private sectors in all Member States would benefit from the efficiency gains of the increased cooperation as well as competition for funding in national systems. It is expected that more funding would be allocated to the best performing researchers, that through more cooperation between Member States better solutions to grand challenges would be found and that public and private sectors everywhere and notably in less endowed regions have access to and the advantage of scientific knowledge and of conditions promoting open innovation.

A decreasing share of non-performance based institutional funding would imply greater focus on financial sustainability of scientifically strong fields in these institutions. This would entail trying to recover the full economic costs of research activities. Full economic costing would require that capital and infrastructure costs associated with each piece of research commissioned from public research establishments are included in the final price. This would be a major change and represents a step towards establishing internal and external market pricing[53]. It could be expected though that in Member States where institutional funding is not linked to performance, or where evaluation systems do not follow international standards, universities and other research performing organisations may resist the removal of barriers. However, the need for more efficient use of scarce public funding may convince Member States to pursue the necessary reforms. Besides, the improved context for the research systems and a reinforced cross border focus on grand challenges could leverage private investment in research.

A reallocation of national funds to transnationally coordinated funding could benefit the EU's economy and job market. For example, in the case that the removal of barriers which would improve the conditions for cross border cooperation and interaction would lead Member States to gradually reallocate funding to increase the attention given to transnational activities (i.e. to reach 4% research funding by 2020, from the current 0.8% share), this would induce a possible extra gain of GDP of 16 billion Euros in 2030 (0.25% additional GDP growth on top of the 0.92% additional growth expected from Horizon 2020). Higher transnational coordinated funding would create 323,000 additional jobs. The impact would be much stronger if the Barcelona target (3% of GDP dedicated to research) were reached by 2020. The combined effect of the Barcelona target, Horizon 2020 and an increased share of transnational funding would imply 445 billion Euros extra GDP and 7.2 million more jobs in 2030 (See Annex 4 for a detailed presentation of the simulations).

Measures linked to the development of the digital ERA would also lead to coordinated demand for the provisions of interoperable and effective digital research services, which will boost the ICT sector and ICT innovations in the EU