Proposal for a Council Decision adopting a specific programme for research, technological development and demonstration on 'Promotion of innovation and encouragement of participation of SMEs` (1998 to 2002) (98/C 260/06) (Text with EEA relevance) COM(98) 305 final - 98/0182(CNS)

(Submitted by the Commission on 10 June 1998)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 130i(4) thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Parliament,

Having regard to the opinion of the Economic and Social Committee,

Whereas by Decision No . . ./98/EC (1), the European Parliament and the Council adopted the fifth framework programme of the European Community (hereinafter referred to as 'the fifth framework programme`) for research, technological development and demonstration (hereinafter referred to as 'RTD`) activities for the period 1998 to 2002 specifying inter alia the activities to be carried out in 'the field of promotion of innovation and encouragement of participation of SME's`;

Whereas Article 130i(3) of the Treaty stipulates that the framework programme shall be implemented through specific programmes developed within each activity under the framework programme, and that each specific programme shall define the detailed rules for implementing it, fix its duration and provide for the means deemed necessary;

Whereas, in accordance with Article 4(2) of Decision No 1110/94/EC of the European Parliament and of the Council of 26 April 1994 concerning the fourth framework programme of the European Community activities in the field of research, technological development and demonstration (1994 to 1998) (2) and Article 4(2) of the Council Decisions on the specific programmes implementing the fourth framework programme, the Commission has had an external assessment conducted which it has transmitted to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions together with its conclusions and comments;

Whereas the Scientific and Technical Research Committee has been consulted on the scientific and technological content of the specific programmes, as set out in the working paper adopted by the Commission on 5 November 1997 (3);

Whereas, in accordance with Article 130j of the Treaty, Council Decision 98/. . ./EC of . . . concerning the rules for the participation of undertakings, research centres and universities and for the dissemination of research results (4) (hereinafter referred to as 'the rules for participation and dissemination`) applies to this specific programme and allows the participation of the Joint Research Centre in the indirect actions covered by this specific programme;

Whereas, for the purpose of implementing this programme, in addition to cooperation covered by the Agreement on the European Economic Area or by an association agreement, it may be appropriate to engage in international cooperation activities, in particular on the basis of Article 130m of the Treaty, with third countries or international organisations;

Whereas implementation of this programme will also comprise activities and mechanisms aimed at stimulating, disseminating and exploiting RTD results, in particular vis-à-vis small and medium-sized enterprises, and activities to stimulate the mobility and training of researchers;

Whereas, in accordance with the objectives of the first action plan for innovation, research activities under the fifth framework programme should be geared more towards innovation;

Whereas the implementation of this programme should be monitored with a view to adapting it, where appropriate, to scientific and technological developments; whereas in due course there should also be an assessment of progress with the programme by independent experts,

HAS ADOPTED THIS DECISION

Article 1

In accordance with Article 3(1) of the fifth framework programme, the specific programme on 'Promotion of innovation and encouragement of participation of SME's` (hereinafter referred to as 'the specific programme`) is hereby adopted for the period from [the date of adoption of this programme] to 31 December 2002.

Article 2

1. In accordance with Annex III to the fifth framework programme, the amount deemed necessary for carrying out the specific programme (hereinafter referred to as 'the amount`) is ECU 350 million, including a maximum of 7,70 % for the Commission's administrative expenditure.

2. An indicative breakdown of this amount is given in Annex I.

3. Of this amount

- ECU 73,8 million is for the period 1998 to 1999, and

- ECU 276,2 million is for the period 2000 to 2002.

Where appropriate, the latter figure will be adapted in accordance with Article 3(3) of the fifth framework programme.

4. The budgetary authority shall, in compliance with the scientific and technological objectives and priorities laid down in this Decision, set the appropriations for each financial year taking into account the availability of resources within the multiannual financial perspective.

Article 3

1. The general outlines, the scientific and technological objectives and the priorities for the specific programme are set out in Annex II. They are consistent with the fundamental principles and the three categories of selection criteria indicated in Annex I of the fifth framework programme.

2. In accordance with these principles and criteria the selection criteria indicated in Article 10 of the rules for participation and dissemination shall be applied for the selection of the RTD activities to be carried out.

A selection criterion specific to this programme shall also be applied: the participation of industrial entities in the shared-cost actions should be appropriate to the nature of the activity.

All these criteria shall be complied with in the implementation of the programme, including the work programme referred to in Article 5(1), although they may be weighted differently.

3. The rules for participation and dissemination shall apply to the specific programme.

4. Detailed rules for financial participation by the Community in the specific programme are defined in Article 4 of the fifth framework programme.

5. The indirect RTD actions under the specific programme are defined in Annexes II and IV to the fifth framework programme.

Specific rules for implementing the programme are set out in Annex III.

Article 4

In the light of the criteria set out in Article 3, and the scientific and technological objectives and priorities set out in Annex II, the Commission shall:

(a) monitor the implementation of the specific programme and, where appropriate, submit proposals for adapting it, in accordance with Article 5(1) of the fifth framework programme,

(b) have the external assessment provided for in Article 5(2) of the fifth framework programme conducted concerning the activities carried out in the fields covered by the specific programme.

Article 5

1. The Commission shall draw up a work programme specifying:

(a) the content of Annex II;

(b) the indicative timetable for the implementation of the specific programme;

(c) the coordination arrangements indicated in Annex III;

(d) and, where necessary, the selection criteria and the arrangements for applying them for each type of indirect RTD action.

The work programme shall be updated where appropriate.

2. For the purpose of implementing the indirect RTD actions, the Commission shall, on the basis of the work programme, initiate the procedures set out in the rules for participation and dissemination, primarily through calls for proposals.

Article 6

1. The Commission shall be responsible for the implementation of this specific programme.

2. It shall be assisted by a Programme Committee composed of representatives of the Member States and chaired by the representative of the Commission.

3. The representative of the Commission shall submit to the Programme Committee a draft of the measures to be taken concerning:

- the drawing-up and updating of the work programme referred to in Article 5(1),

- the drawing-up of the terms of reference for the external assessment provided for in Article 5(2) of the fifth framework programme,

Article 7

1. The Programme Committee shall deliver its opinion on the draft measures referred to in Article 6(3) within a time limit which the Chairman may lay down according to the urgency of the matter. The opinion shall be delivered by the majority laid down in Article 148(2) of the Treaty in the case of decisions which the Council is required to adopt on a proposal from the Commission. The votes of the representatives of the Member States within the Committee shall be weighted in the manner set out in that Article. The Chairman shall not vote.

The Commission shall adopt the measures envisaged if they are in accordance with the opinion of the Committee.

If the measures envisaged are not in accordance with the opinion of the Committee, or if no opinion is delivered, the Commission shall, without delay, submit to the Council a proposal relating to the measures to be taken. The Council shall act by a qualified majority.

If, on expiry of a period of six weeks from the referral of the matter to the Council, the Council has not acted, the proposed measures shall be adopted by the Commission.

2. The Commission shall regularly inform the Programme Committee of progress with the implementation of the specific programme, and shall in particular provide it with information about the results of the evaluation and selection of the indirect RTD actions.

Article 8

This Decision is addressed to the Member States.

(1) Common position 31/98, adopted by the Council on 23 March 1998 (OJ C 178, 10.6.1998, p. 1).

(2) OJ L 126, 18.5.1994, p. 1. Decision as last amended by Decision No 2535/97/EC (OJ L 347, 18.12.1997, p. 1).

(3) COM(97)553 final.

(4) COM(97)587 final (OJ C 40, 7.2.1998, p. 14).

ANNEX I

THE GENERAL OUTLINES, THE SCIENTIFIC AND TECHNOLOGICAL OBJECTIVES AND THE PRIORITIES

INTRODUCTION

Innovation is a key factor in industrial competitiveness, sustainable economic and social development and job creation. It is a complex phenomenon involving many players (firms, universities, research centres and financial operators, etc.) and is an important component of behavioural developments and overall social dynamics. Business competitiveness depends to a large extent on the ability to innovate: as a result of the development of new products and services, costs can be contained and competition can be handled. In the information technology sector, for example, 78 % of income is derived from products that have been on the market for two years or less. It is therefore essential to promote innovative activities, including the creation of innovative businesses, and to facilitate the dissemination and exploitation of research results and support technology transfer. Europe needs to exploit more effectively its research activities and its high level of creativity in terms of knowledge and know-how in order to give the economy and society the full benefit of this. It is vital that the research effort should be accompanied and guided by an ambitious European innovation policy.

Small and medium-sized enterprises (SMEs) are important innovation vectors and players. They play an essential role in the European economy and their development can make a vital contribution to the emergence of new activities, the competitiveness of European industry, economic growth and employment; they also have special features which necessitate appropriate stimulation and follow-up measures. Action at European level is needed, to supplement the initiatives taken by the Member States, in order to help SMEs to globalise their activities and gain access to new technologies, be they high-tec SMEs or SMEs which, though having little or no research capacities of their own, need to make use of new technologies developed by others.

Promoting innovation and encouraging SME participation, although not synonymous, are closely linked activities. This programme will therefore help to optimise the efforts devoted to these two themes.

Strategic objective of the programme

The strategic aim is to improve the economic and social impact of research and development activities, in particular under the framework programme, by ensuring better dissemination and exploitation of their results and the transfer and dissemination of technologies from various sources, taking into account the needs of customers and users.

This aim will be pursued by establishing a coherent innovation policy contributing towards the implementation of the first action plan for innovation, and by paying particular attention to SMEs and their participation in the fifth framework programme.

The activities carried out in this programme will be complementary to activities undertaken within Member States. They will support, supplement and give direction to activities carried out under other specific programmes or, where appropriate, in the context of other Community activities, in order to achieve this objective.

Links with other Community programmes and activities

The other programmes will contribute actively, in close coordination and in interaction with this programme, to the attainment of this strategic objective and pursue, to this end, the general objectives set out in Annex II (third activity) to the fifth framework programme.

In the context of the fifth framework programme, this programme will promote and coordinate activities carried out in relation to innovation and SMEs, notably in coherence with the SME policy.

On the basis of the measures, instruments and expertise developed in the context of its specific activities, it will in particular focus on the design of mechanisms to facilitate the exploitation and transfer of results, the participation of SMEs, the evaluation of results, and the post-auditing of their exploitation in order to evaluate their economic and social impact. Action in the context of this programme will be based in particular on the activities carried out by the 'innovation units`, of which it will coordinate the activities in order to integrate the innovation dimension in the implementation of the programmes.

COORDINATION ACTIVITIES RELATING TO INNOVATION AND SME PARTICIPATION

Objectives

The aim is to coordinate and support the efforts under the thematic programmes to integrate the 'innovation` and 'SMEs` dimensions when setting their priorities, establishing their work programmes, and carrying out their activities; to ensure the overall consistency of activities relating to innovation and SMEs and their harmonisation within the thematic programmes; and to ensure the optimum use of skills, experience and infrastructure existing at the horizontal level or in other programmes.

Activities in the field of innovation

In order to achieve the strategic objective of the programme, the bulk of the work will be carried out within the thematic programmes under the impulse of the innovation units so as to take account of the specific features of the research topics and ensure the best possible match between the exploitation of results and their application context.

Firstly, the programme will ensure synergy between the innovation units, and will interact with the thematic programmes in respect of the definition and implementation of their specific tasks, which could, in particular, comprise:

- providing support for activities carried out with regard to innovation, such as the follow-up of technology transfer and the launch of projects with a demonstration effect,

- exploiting the thematic networks, activities and mechanisms stimulating the utilisation and transfer of results or the creation of innovative firms, e. g. by facilitating access to private funding,

- organising studies to evaluate projects and their results with a view to promoting their exploitation, in particular through a technology implementation plan.

Secondly, this programme will contribute, together with the thematic programmes, to defining the methods and mechanisms contributing towards an increase in the exploitation of the results of the research projects under these programmes and ensuring the coherence and effectiveness of the dissemination of information on the research and development projects and results via the horizontal network and service infrastructures (CORDIS, IRCs).

Activities to increase the participation of SMEs

The strategic objective of the programme entails the coordination of support for SME participation in RTD and demonstration activities carried out in the framework of these programmes:

- 'cooperative research` schemes enabling at least three mutually independent SMEs from at least two different Member States to jointly seek the resolution of their common technological problems internally or by entrusting it to third legal entities, including industrial entities, with appropriate research or technological validation capacities;

- schemes to support and encourage SME participation in collaborative and cooperative research projects (for example on the basis of subsidies for the preparatory phase known as 'exploratory awards`), respecting SMEs' need for a flexible and easily accessible support system.

These schemes aimed at encouraging and facilitating SME participation in RTD activities relate to all the objectives and priorities of the specific programmes in their entirety.

In addition, the programme will provide support for organising and improving the dissemination and exploitation of results within the thematic programmes, in order, among other things, to facilitate SME participation in validation and demonstration projects in the context of the key actions.

ACTIVITIES SPECIFIC TO THE HORIZONTAL PROGRAMME

PROMOTION OF INNOVATION

Supplementing the activities carried out within the thematic programmes, the specific activities will help to promote a favourable environment for innovation in Europe and to establish a framework enabling a large number of economic operators to benefit from innovation.

(i) Making better use of the results of Community research

Objective

The aim is to increase the level of use made of the results of research and thus to contribute to the general objective of improving the economic and social impact of framework programme activities.

Activities

- Identification and design of mechanisms to facilitate, in the life-cycle of projects, the protection of knowledge acquired, the exploitation or transfer of the technologies and results produced and access to methods of private financing making it possible to ensure that use is made of the results. Organisational changes liable to promote innovation will also be encouraged.

- Organisation of exchanges of information and good practices between programmes.

- Promotion of the implementation of these mechanisms by other programmes, in particular with the assistance of the innovation units.

(ii) New approaches to technology transfer

Objective

The European Union's inadequate performance as far as innovation is concerned is to a large extent attributable to the uneven development in Europe of the 'innovation culture`. This culture can be developed by encouraging experiments concerning the transfer of technology on an international scale.

The aim is, in harmony with the activities carried out under the thematic programmes, to develop, validate and implement methodologies in the context of pilot/demonstration technology-transfer projects, taking into account the features of particular sectors of activity.

Activities

- Promoting the take-up of new technologies, and analysing the technological, economic, organisational and social aspects observed in this process.

- Contributing to the transnational dissemination and utilisation of results not arising from the specific programmes.

These activities could include an international dimension (international technology-transfer trials in collaboration with other Community initiatives) and seek to explore new forms of technology transfer.

(iii) Studies and good practices

Objectives

To bridge the innovation gap, the Community should identify, analyse and promote the application of good innovation practices.

The aim is to analyse and benchmark innovation performances and policies in a common reference framework and promote concertation, exchanges, and the dissemination and application of good practices.

Activities

- Preparation and periodical publication of an innovation trend chart in accordance with the action plan for innovation in Europe.

- Organisation of schemes to promote good practices with regard to innovation (in particular concerning the financing, setting-up and development of innovative businesses, and protection and transfer of technology).

- Establishment and regular updating of a 'knowledge` base on innovation policies, practices and performances (in particular concerning the financing, setting-up and development of innovative businesses, and protection and transfer of technology).

ENCOURAGING SME PARTICIPATION

(i) A one-stop entry point

Objective

The aim is to make it easier for SMEs to take part in Community programmes by offering them an additional means of access, a single complementary entry point, common to all the programmes and making use of existing support networks in Member States.

Activities

Setting-up of an infrastructure to enable SMEs:

- To be made aware of the importance and impact of Community RTD activities and to make their needs known;

- To receive information about the programmes and have access to assistance with the preparation of proposals (including help with the creation of consortiums);

- To participate more easily in Community programmes;

- To submit proposals at any time, in the context of a permanently open call, with a view to benefiting from measures specific to them, such as exploratory awards or 'cooperative research` activities (CRAFT).

(ii) Joint support and assistance instruments

Objective

The aim is to simplify and harmonise SME participation conditions in order to supplement and strengthen the impact of the one-stop office, preferably through the fullest possible use of the most suitable electronic means (electronic information packages and electronic submission of proposals, 'help line`, specialised Intranet networks, etc.).

Activities

- Preparation of joint contractual and information-management tools.

- Assistance for SMEs supplementing that provided directly by the local networks and the thematic programmes.

- Assistance for SMEs while projects are being carried out: this may take the form of 'training` workshops open to project coordinators or intermediaries concerning the management of research contracts, the coordination of projects or other topics of general interest to SMEs.

(iii) Economic intelligence

Objective

The aim is to help SMEs to identify their needs and anticipate technological trends, and to direct them towards Community instruments in particular which will enable them to do so.

Activities (in liaison with the IPTS)

- Identification of relevant information, using existing sources, on market trends and the state of the art (e. g. through workshops bringing together suppliers, users, SMEs and large firms).

- Making this information available to SMEs using the existing information networks and services.

JOINT INNOVATION/SMEs ACTIVITIES

(i) European network for the promotion of research and innovation

The programme should rationalise and coordinate the networks providing information and assistance concerning the Community's research and innovation activities, thus constituting an effective infrastructure for information, assistance, cooperation and innovation-promotion, aimed particularly at SMEs and making full use, in particular, of the existing networks of Innovation Relay Centres (IRCs) and CRAFT contact points.

Objectives

The aim is to increase firms' receptiveness to technologies capable of helping them to improve their innovative capacity, to encourage transnational transfers of technologies, whatever their origin, to promote the dissemination and exploitation of the results of Community research, and to inform and assist potential participants in such research activities.

Activities

- Promotion of technology transfer reflecting the needs of the local economic, industrial and social fabric.

- Establishment of means of cooperation and transnational partnerships between firms.

- Support for the dissemination and exploitation of the results of Community research activities, e. g. by organising 'technology fairs`.

- Promotion of innovation through experimental networks and services.

- Assistance to guide firms' participation in the programmes and help them put together transnational projects.

(ii) Electronic information services and other means of dissemination

Objectives

The aim is to group together and encourage the dissemination, in the context of a joint information service, of all the data needed to publicise more effectively research and innovation activities, the procedures for carrying them out, and their results; to inform the general public about the socio-economic impact of innovation policies, and fuel the debate about the issues at stake where these policies are concerned, given the needs of individuals.

Activities

- Consolidation of the CORDIS Community information service by reorganising the information gathering and circulation mechanisms, improving ease of access (multilingualism, 'users` interface), adapting the content to the needs of SMEs and their support networks and developing tailor-made tools.

- Extension of the ERGO (European Research Gateway On-line) pilot scheme by establishing a link between CORDIS and the national scientific and technical information sources.

(iii) Intellectual property

Objectives

The aim is, first of all via information and where appropriate via pilot activities, to encourage the use of knowledge-protection systems - for the purposes either of effective protection or of information-gathering (research results, market trends, search for industrial alliances, etc.) - and to facilitate access to the various sources of information about intellectual and industrial property. Another objective is to protect the knowledge and the possession of the Community (JRC) and to provide assistance to framework programme participants.

Activities

- Contribution to the establishment of an information system giving access to the various sources of information about patents, other intellectual property rights, the legislation in force and the interpretation thereof.

- Creation of a 'help-desk` for participants in Community programmes.

- Activities concerning the protection and utilisation of research results belonging to the Community, in liaison with the JRC.

- Carrying-out of pilot activities such as evaluation of the innovative nature of project proposals ('quick scan`); collaboration with the European Patents Office and the national offices.

(iv) Access to private innovation financing

Objectives

The aim is to provide SMEs, and in particular SMEs participating in Community research activities, or exploiting the results thereof, with information and advice about the opportunities for access to private innovation-financing instruments (financial markets, venture capital) and to promote cooperation between financial sources, researchers and industry via pilot activities.

Activities

- Development of an information and assistance service to facilitate access to sources of private financing.

- Implementation, in the context of the thematic programmes or with the assistance of the innovation-support networks, of ad hoc awareness-raising, incentive and training schemes, and organisation of transnational investment forums bringing together entrepreneurs, researchers, and financial operators, and in particular continuation of the LIFT (Links to Innovation Financing for Technology) activities.

- Exchanges of experience with the players concerned in the Member States, and establishment of transnational networks involving private and public operators on specific projects, and carrying-out of pilot activities to try out new approaches (e. g. technology assessment, mobilisation of local capital, benchmarking of performances).

- Facilitating the establishment of contacts with financial sources with a view to the exploitation of the results of Community research.

(v) Mechanisms to facilitate the setting-up and development of innovative firms

Objectives

The aim is, in accordance with the guidelines of the Amsterdam European Council, to analyse, identify and validate, in the context of pilot activities, new approaches to support for the setting-up and development of innovative firms, and to encourage private investment (in particular venture capital) (1) in such firms.

Activities

- Study and analysis of obstacles to the private financing of innovation and measures to create an environment favourable to the setting up and development of innovative firms.

- Targeting of private financing on the early stages of innovative high-tech projects, and firms with a substantial growth potential, in particular via initiatives based on the experience acquired with the I-TEC pilot project (innovation and equity capital) in cooperation with the European Investment Fund (EIF), the European Investment Bank (EIB) and other financial operators.

- Assistance for fund managers (and in particular managers of venture capital funds) to acquire lasting expertise in the evaluation and management of this type of project.

(1) Commission Communication 'Risk capital, a key to job creation in the European Union`; SEC(98)552 final.

ANNEX II

SPECIFIC RULES FOR IMPLEMENTING THE PROGRAMME

The specific programme will be implemented through the indirect RTD actions defined in Annexes II and IV to the fifth framework programme. In addition, the following rules specific to this programme will apply:

1. Accompanying measures

The accompanying measures will comprise in particular:

- studies in support of the specific programme, including the preparation of future activities and the innovation trend chart,

- the exchange of information, conferences, seminars, workshops and scientific and technical meetings on topics related to activities under the programmes,

- mechanisms to facilitate the protection of knowledge, and access to private financing methods,

- recourse to external expertise, including access to scientific databases, in particular for the purposes of the monitoring of the specific programme provided for in Article 5(1) of the fifth framework programme, the external assessment provided for in Article 5(2) of the fifth framework programme and the evaluation of indirect RTD actions and the monitoring of their implementation,

- dissemination, information and communication activities, including scientific publications, and activities for the exploitation of results and the transfer of technologies,

- training schemes related to RTD activities covered by the specific programme, other than Marie Curie fellowships,

- support for schemes to provide information and assistance for research players, including SMEs,

- recourse to external capacities for the establishment of and access to services and networks for information, assistance and promotion of research and innovation.

2. Pilot activities

The pilot activities will be carried out in the areas indicated in Annex I to this Decision. They will be aimed at trying out new measures which require specific implementing arrangements, on account of their nature, their context and the categories of players that they involve. In accordance with Article 9(3) of the rules for participation and dissemination, these arrangements may depart from the procedures generally applicable to indirect RTD actions, on condition that they provide for evaluation and selection procedures respecting the principles of equity and transparency.

3. Coordination arrangements

The Commission will endeavour, within the programme, to ensure complementarity between the indirect RTD actions, in particular by grouping them around a common objective, and to avoid duplication, while respecting the legitimate interests of proposers of indirect RTD actions.

Coordination will also be ensured between actions under the specific programme and those carried out in:

- other specific programmes implementing the fifth framework programme,

- the research and training programmes implementing Council Decision . . ./. . ./Euratom of . . . concerning the fifth framework programme of the European Atomic Energy Community (Euratom) for research and training activities (1998-2002),

- other European research frameworks such as Eureka and COST,

- other Community research-related instruments such as PHARE, TACIS, MEDA, the EIF, the Structural Funds and the EIB,

It will comprise:

(i) the identification of common themes or priorities, resulting in particular in:

- the exchange of information,

- the carrying out of work decided upon jointly, entailing in particular the joint initiation of one of the procedures referred to in Article 9 of the rules for participation and dissemination,

- the examination of the lessons learned from carrying out this work and the evaluation of their economic and social impact,

(ii) the reassignment of proposals for indirect RTD actions between specific programmes or between a specific programme and a research and training programme.