Council Conclusions

of 13 May 2003

on "strengthening European innovation policy"

(2003/C 149/02)

THE COUNCIL OF THE EUROPEAN UNION,

1. RECALLING:

- the conclusions of the Lisbon European Council on the strategy for making the EU the world's most competitive and dynamic knowledge-based economy, capable of sustainable economic growth with more and better jobs and greater social cohesion by 2010 and the further elaboration of this strategy by the Stockholm, Gothenburg and Barcelona European Councils;

- the Council conclusions of 5 December 2000 on innovation as a factor for competitiveness;

- the conclusions of the Barcelona European Council which called for a significant boost of the overall R& D and innovation effort in the Union;

- the conclusions of the Copenhagen European Council concerning enlargement;

- the Council conclusions of 3 March 2003 on the promotion of entrepreneurship and small firms;

- the contribution of the Competitiveness Council to the Spring European Council 2003 adopted on 3 March 2003;

- the conclusions of the Brussels European Council of 20 and 21 March 2003, giving priority to innovation and entrepreneurship and stressing the need for Europe to do more to turn ideas into real value-added.

2. WELCOMES:

- the Commission's Communication on "Innovation policy: updating the Union's approach in the context of the Lisbon strategy" which stresses the multi-dimensional nature of the innovation phenomenon;

- the Commission's intention to increase its efforts to foster a European Innovation Policy that contributes to strengthening European competitiveness and progress towards a knowledge-based economy.

3. RECOGNISES THAT:

- innovative activity driven, inter alia, by a high level of competition between enterprises is a key factor in stimulating productivity growth and competitiveness;

- innovative activities and technological breakthroughs are key factors to achieve sustainable development;

- the full scope and importance of the innovation phenomenon requires developing a better understanding of the drivers of innovation in the European context;

- enlargement has the potential to change significantly the Union's innovation performance thus creating new opportunities and challenges;

- the EU needs to improve the environment for innovation in order to close the gap with its major trading partners;

- enterprises are at the heart of the innovation process, and innovation policy must have positive effects on their behaviour, capabilities and operating environment;

- innovation policy should form part of a coherent framework of policies for developing the competitiveness of European enterprises;

- innovation policy should, where appropriate, be complemented by a sectoral dimension, inter alia in relation with specific technologies;

- access to finance is a prerequisite for creating favourable conditions for innovative enterprises, in particular for small firms; the Innovation Initiatives of the European Investment Bank could play an important role towards this aim;

- the sixth RTD framework programme and the development of the European research area (ERA), including improved synergies with European initiatives and coordinated joint efforts such as Eureka, must play an important role in encouraging and stimulating innovation;

- frontier and leading edge technologies and technologies of a strategic nature, such as space technology, advanced information and communication technology, biotechnology and defence and security related R& D could play an important role in stimulating innovation and competitiveness;

- the exchange of good practice and experience within the Union, as well as the reduction of obstacles to innovation, could contribute to increasing the innovation performance of the Union as a whole in order to meet the Lisbon objectives;

- the Common political approach adopted by the Council on 3 March 2003 gives strong impetus to the Community patent, which is of crucial importance for the protection of intellectual property and to stimulate innovation.

4. EMPHASISES THAT:

- innovation goes beyond technological innovation and can take many other forms, such as through the development of new business concepts, new means of distribution, marketing or design and through organisational or presentational change;

- the speed and efficiency of the spreading of innovation through the economy is critical to productivity, economic growth and job creation; advanced electronic communications are a powerful engine within the Information Society which contributes to the momentum of this process;

- enterprises must be considered as central to innovation in Europe and small firms should benefit from improved business support services facilitating access to technical, financial and legal information and advice;

- the emergence of new firms such as new technology based firms (NTBFs) and spin-offs, such as those arising from universities and private knowledge-based companies, is a strong force for innovation in many sectors and that it is these firms which often have strong potential for growth;

- R & D and technology transfer are essential for long-term economic growth, while recognising that they must be accompanied by measures to facilitate the successful exploitation of results, such as prototyping, testing and adaptation, engineering, reengineering and demonstration;

- well-functioning co-operation between the science sector and industry is one of the major factors facilitating innovation in enterprises;

- business investment in R & D and innovation in the Union should be increased, moving towards the Barcelona objective of approaching 3 % of GDP;

- measures supporting the creation of framework conditions such as highly competitive markets, well-functioning capital markets, including seed and venture capital, sophisticated consumer demand and a supportive regulatory environment are conducive to innovation;

- joint public and private partnerships in particular in R & D, including through the use of support infrastructures, such as science parks and business incubators, contribute to the effectiveness of public investments in innovation;

- flexible, mobile and skilled human resources are required for innovation and that the quality of education and training, including vocational training, must be improved in order to move towards a knowledge-based economy.

5. CONFIRMS that European innovation policy development requires in particular:

- interaction with other policy areas for improving the environment for innovative enterprises;

- stimulation of greater market dynamism, including the acceptance of new products by customers and the emerging concept of "lead markets";

- public sector involvement resulting from its role as a major user of new products and services (e.g. e-government);

- strengthening the regional dimension of innovation policy, notably by the development of clusters of excellence.

6. INVITES THE MEMBER STATES AND ACCEDING COUNTRIES TO:

- build and strengthen innovation strategies, ensuring a well-coordinated approach among national and regional authorities;

- define policy objectives in the field of innovation, reflecting the specificity of their respective innovation systems, and views of the most appropriate route to achieving improved innovation performance;

- create favourable framework conditions that foster innovation and take into account the specificities of small firms;

- improve indicators within the context of an upgraded European innovation scoreboard and to set their own quantitative and/or qualitative targets on a voluntary basis;

- encourage national statistical offices in improving the collection of comparable, up-to-date statistical data of quality in the area of innovation, while taking into account the need not to increase the burden on enterprises when collecting data;

- promote innovation through public authorities as providers of advisory and support services, as implementers of regulatory and administrative rules, and through their role as a major consumer of products and services;

- encourage regional and local authorities in the development of innovation strategies building on specific regional or local strengths and cross-border partnerships involving all relevant actors;

- continue their efforts to improve innovative firms' access to competitively rated finance, and consider the potential for encouraging innovation where appropriate through various forms of policy incentives;

- redirect State aid, as necessary, towards stimulating innovation, bearing in mind the need for a global reduction of State aid.

7. INVITES THE COMMISSION TO:

- ensure a well coordinated approach for a European innovation strategy, in particular by improving framework conditions for innovation;

- upgrade the European innovation scoreboard to take account of the multidimensional nature of innovation and increase the coherence of the various policy benchmarking exercises, for example, European innovation scoreboard, enterprise scoreboard, science and technology key figures;

- take into account the impact of its initiatives on the innovation performance of enterprises, in particular small firms;

- strengthen existing procedures and processes enabling Member States and acceding countries to learn from each other's experience in the development and implementation of innovation policy;

- support the creation of an environment conducive to innovation by considering, in particular, when reviewing the Community framework on state aid, the best means of taking into account market failures in generating innovation and its dissemination;

- continue its support for the efforts of Member States' regional authorities in devising innovation policies;

- support acceding countries in rapidly developing their framework for innovation, and extend the European innovation scoreboard to give the same coverage to acceding countries as to the current Member States;

- report regularly on progress in strengthening innovation policy at national and EU level.

8. INVITES THE MEMBER STATES, ACCEDING COUNTRIES AND THE COMMISSION TO:

- cooperate in further developing the analysis and discussion of the innovation process, policies and performances;

- ensure appropriate coordination of innovation policy, on a voluntary basis, at EU, national and regional levels;

- strengthen existing processes, in the framework of the Trend Chart on Innovation in Europe, enabling Member States to learn from each other's experience in innovation policy development and implementation;

- contribute to promoting innovation in the public sector by promoting training and awareness activities on policies and factors shaping the innovation performance of firms;

- exchange good practices and consider launching initiatives offering, on a voluntary basis, independent evaluations of individual national programs, schemes and support agencies for promotion of innovation;

- intensify their cooperation and create a framework of common objectives for strengthening innovation in the EU, including an assessment mechanism for taking stock of the progress achieved, while respecting the characteristics of national innovation systems and the diversity of national approaches;

- actively engage in the definition of further action required in order to support the Council's work in rapidly progressing towards more favourable conditions in which business can innovate, with a view to contributing effectively to reaching the Lisbon objectives.