Opinion on:

- the proposal for a Council Decision concerning the Rules for the participation of undertakings, research centres and universities in the specific programmes of research, technological development and demonstration of the European Community,

- the proposal for a Council Decision concerning the Rules for the participation of undertakings, research centres and universities in the specific programmes of research and training of the European Atomic Energy Community, and - the proposal for a Council Decision concerning the Rules for the dissemination of the research results from the specific programmes of research, technological development and demonstration of the European Community (1) (94/C 295/08)

On 30 March 1994 the Council decided to consult the Economic and Social Committee, under Article 1300(2) of the European Union Treaty and Article 170 of the Treaty establishing the European Atomic Energy Community, on the abovementioned proposals.

The Section for Energy, Nuclear Questions and Research, which was responsible for preparing the Committee`s work on the subject, adopted its Opinion on 10 May 1994. The Rapporteur, acting without a Study Group, was Mr Bernabei.

At its 316th Plenary Session (meeting of 1 June 1994) the Economic and Social Committee unanimously adopted the following Opinion.

1. Introduction

1.1. The Fourth Framework Programme for Community research, technological development and demonstration activities (1994-1998) was finally adopted on 26 April 1994 (1) (2).

1.2. Under the third paragraph of Article 130I of the European Union Treaty, the Framework Programme is implemented through specific programmes developed within each of the specified activities.

1.3. In tandem, Article 130J of the Treaty also provides that the Council shall determine, for the implementation of the Framework Programme:

- the rules for the participation of undertakings, research centres and universities, and

- the rules governing the dissemination of research results.

1.4. Since some of the specific programmes are based on the provisions of the EURATOM Treaty, the Commission is presenting two separate proposals - though they contain broadly similar provisions - regarding the participation rules.

1.5. However, the EURATOM Treaty does not formally require the Council to adopt such rules. As the Commission points out in its explanatory memorandum (point 6), the main purpose is to 'enable interested participants to see that a common approach is adopted for RTD activities irrespective of the legal basis of the activity`.

1.6. Compared with the previous rules, the Commission considers that the proposals contain three key innovations:

- 'technology users` and entities which do not have their own research structures will now be able to participate, under certain conditions, in research activities;

- account is taken of the increased importance of international RTD cooperation and greater pooling of efforts with non-EU countries and international organizations, as well as the broader range of sectors open to such cooperation;

- RTD management costs will be kept in check and procedures will be streamlined and simplified.

1.7. As regards the rules governing dissemination of results, the Commission is only proposing one Decision since the EURATOM Treaty contains such rules (Arts. 12 to 29) in respect of programmes based on that Treaty.

1.8. Essentially, the Commission proposal, unlike the very detailed provisions of the EURATOM Treaty, simply provides that, in the case of cost shared RTD projects, the contractors carrying out the work remain the owners of the results. They must exploit or commercialise them in conformity with the interests of the Community, grant licences and user rights among themselves and grant access rights, against payment or other conditions, to other interested parties who may need to use the results.

2. Appraisal of the Commission`s proposals

2.1. The Committee endorses the objectives and underlying principles of the present Commission proposals.

2.2. Above all it welcomes the drive to simplify and streamline especially the general rules governing participation in specific programmes as part of an increased effort to coordinate Community research activities and ensure greater transparency in their implementation.

2.3. The Committee also notes with pleasure that these proposals aim to boost participation by SMEs in research programmes on the basis of three principles: transparency, openness and equal opportunity.

2.4. However, the Committee observes that the proposed rules are solely intended as framework rules for the implementation of all specific programmes. If need be, these rules can be set out in greater detail and supplemented within these different specific programmes in the light of their individual aims and scientific and technical content.

2.5. The Committee will have the possibility in due course, should it so wish, to state its views on these potential special provisions in connection with its examination of these various specific programmes, on which it has concurrently been consulted.

2.6. Nonetheless the Committee regrets that the Commission, in presenting these proposals, did not take advantage of the opportunity to undertake a substantial improvement in the general arrangements for participation in the specific programmes, especially the dissemination of research results from such programmes.

2.7. The Committee also observes that the general nature and lack of detail of the proposed rules leaves the Commission considerable freedom of movement and appraisal, which can be questioned.

2.8. It would have seemed preferable to find a better balance between the flexibility necessary on account of the wide variety of specific programmes covered by these rules and the need to provide potential participants in these programmes with a sufficiently clearcut and transparent reference framework within which to oper-ate in submitting their proposals to participate in research activities and/or in the dissemination of research results.

2.8.1. The Committee feels that the Commission should also study the possibility of putting forward proposals devised to stimulate the commercial exploitation of new technologies by EU firms.

2.9. Here the Committee would advocate that a specific chapter dealing with the implementation of future Council decisions on this matter be inserted in the annual report on research and technological development activities and the dissemination of results, provided for in Article 130P of the European Union Treaty.

2.10. Accordingly, bearing in mind the many comments on both substance and form set out below, the Committee only reluctantly approves the Commission`s proposals.

3. Rules governing participation in the research programmes

3.1. General comments

3.1.1. The Committee would stress that the proposed option whereby these framework rules can be dealt with in greater detail and supplemented within the specific programmes must not be allowed to generate a proliferation of special rules which would further complicate the maze of procedures for participation in research programmes. Their purpose is to steer implementation of the specific programmes; they must not act as a deterrent to potential participants in research projects.

3.1.2. In addition, the adoption and implementation of these rules must go hand in hand with a drive to boost transparency and information, especially among the SMEs, universities and research centres, to ensure that all interested parties have equal chances of taking part in programmes. Here equal access to information is a sine qua non.

3.1.2.1. The Committee therefore regards the handbook recently published by the Commission on the procedures for implementation of Community research programmes as a step in the right direction. This publication follows on other initiatives in 1993 to improve the consistency and transparency of research programme management: calls for proposals on fixed dates four times a year, simplification of the particulars required of applicants, etc.

3.1.2.2. In the Committee`s view, the Commission should take further action, such as:

- widespread calls for parties to express interest, prior to calls for proposals;

- widespread organization of information days for potential participants in research activities;

- publication of calls for parties to express interest and calls for proposals in the national press and the relevant specialist periodicals;

- publication in the Official Journal of the European Communities of all annual work programmes required to be drawn up in connection with implementation of the specific programmes.

3.1.2.3. In addition, the Committee feels that handbooks such as the one mentioned above, along with any other information on research programmes, should be made available, particularly in the languages of those countries where programme participation is weakest.

3.1.3. Further, the Committee would point out that the three-month deadline set for presentation of proposals for research projects under the quarterly calls for proposals is too short in some cases to allow certain applicants to submit their proposals.

3.1.3.1. The underlying reasons are many and often cumulative: lack of understanding or unfamiliarity with existing procedures, difficulties in gaining access to information, especially for new applicants who are not included on the Commission`s address lists, remote geographical location, difficulty in finding partners established in another Member State.

3.1.3.2. The Committee therefore urges the Commission to study this matter and, in certain cases, to review the deadlines for presentation of research projects.

3.1.3.2.1. Further, when project proposals have been submitted to the Commission, the deadlines for dealing with them should be shortened and the procedures culminating in a decision to grant, or not to grant, Community financial aid should be streamlined.

3.1.4. However, the above measures are not sufficient per se. Other schemes (in particular as regards organizational and financial management of research programmes and projects) are clearly vital to gear existing procedures to the capacities of the various categories of potential participants, and foster the desired economic and social cohesion within the European Union.

3.1.5. The Committee is pleased to note that the Commission proposes to authorize the participation of 'technology users` in research activities and to make it easier for SMEs which do not have their own research facilities to join forces with bodies such as research centres in cooperative research and thereby participate in research projects.

3.1.5.1. This second proposal, based on the measures envisaged for the CRAFT sub-programme, under the BRITE/EURAM (1) programme is clearly conducive to greater participation by such undertakings in research programmes.

3.1.5.2. However, as the Commission itself stressed in its Communication of 30 September 1993 on SMEs and Community activity in research and technological development, in connection with the CRAFT sub-programme, the success of such activities presupposes greater efforts among SMEs to 'make them aware of the potential of new technologies and to help them to elaborate projects and identify partners` [COM(93) 356 final, page 13].

3.1.5.3. Here the Committee welcomes the Euromanagement R& TD II pilot project (2) launched by the Commission. This project aims, using accounting methods, to:

- assess the resources available to a sample of European SMEs which create or use new technologies, for entering into transnational technological cooperation schemes;

- advise SMEs in the sample on the most appropriate national and/or Community forms of aid to innovation and research;

- identify and support SMEs whose RTD projects are likely to lead to suitable proposals for submission in response to invitations to tender issued under the Community RTD programmes concerned by the pilot project or, where appropriate, under EUREKA or national programmes.

3.1.5.4. This auditing is to be carried out by consultancy bodies for SMEs which will be financed by the Commission for 50 % of the costs of their activities. The remaining 50 % can be funded from local, regional or national sources (public, semi-public or private).

3.1.6. However, there is no point in making it easier for SMEs to participate in research programmes unless, at the same time, the procedures for submitting, selecting and managing research projects are simplified and streamlined. The various stages still all too often resemble an obstacle race which from the very start deters many SMEs.

3.1.6.1. The length and complexity of these procedures, irrespective of the improvements already made by the Commission, were especially highlighted in the Court of Auditors special report No 6/93 concerning the European research and development programmes in the field of information technology (the ESPRIT programmes) (1) but this criticism applies, to a greater or lesser degree, to all research programmes.

3.1.6.2. The poor scientific and technical quality of research project proposals and inadequate funding facilities are not sufficient arguments to justify the low acceptance rate of these proposals (e.g. roughly one in four under the ESPRIT programme). In addition, the Court of Auditors stresses in its report that 'the acceptance rate for proposals from SMEs is lower than that for proposals from large undertakings, where the rate rises to one proposal in two or three` (see point 1.12 of the report).

3.1.6.3. These procedures, compounded by lack of information, often place a heavy, and even impossible, financial burden on many SMEs, universities or research centres who are forced to turn to external consultants for the preparation and follow-up of their proposals, when they do not give up all together. Further, these administrative costs are not refunded by the Commission.

3.1.6.4. The Committee regards this state of affairs as unacceptable and calls on the Commission to study the possibility of acting on the following recommendations:

- in the case of some categories of participants and according to set criteria, 50 % of the administrative costs connected with the preparation and follow-up of research project proposals, whether accepted or rejected, could be covered by the Community;

- free assistance could be given to SMEs, universities and research centres lacking the staff and/or funds with the preparation and follow-up of proposals. Such assistance could be provided, for instance, by the information centres (currently 27 in number and distributed among all Member States) set up under the VALUE programme (2).

3.1.6.5. The Committee would also point out that, in its Own-initiative Opinion of 26 May 1993 (3) on the Fourth Framework Programme of Community activities in the field of research and technological development (point 3.5.1), it called for the setting up of an 'RTD Optimization Fund` offering SMEs an integrated aid package, including help with the drawing-up of the contract and implementation of the project.

3.1.6.6. The Committee also requests the Commission to study the possibility of modulating Community financial assistance, which currently may not exceed 50 % of a project`s cost, in the light of the new opportunities for aid to research projects opened up by the recent GATT Agreements, in particular Article 8 of the Agreement on subsidies and countervailing measures.

3.1.6.7. Here account could be taken, for instance, of the legal nature, location and research potential (both staff and research facilities) of the entities concerned, bearing in mind the aims set for research policy in the European Union Treaty.

3.1.7. On the budgetary front, the Committee is well aware, as the Court of Auditors mentions in the report referred to above, that the Commission frequently cuts back, sometimes substantially, the budget agreed for the implementation of a research project, compared to the amount originally requested, thereby often forcing the project participants to try to find additional funding. This approach, combined with the rejection of a large number of proposals, thus makes it possible to keep requests for financial aid within the limits of the available appropriations.

3.1.7.1. The Committee agrees with the Court of Auditors` comments that, whereas this situation cannot be criticized as such, the effectiveness of the methods used by the Commission can be questioned, along with their impact on the scientific and technical quality of the projects carried out.

3.1.7.2. In addition, the Committee has misgivings regarding the criteria which determine the Commission`s decisions in this matter.

3.1.7.3. In any event, the Committee feels that additional funding should be possible, where justified on account of the scientific and technical quality of the proposals submitted so that these projects can be completed, regardless of Community budgetary constraints.

3.1.7.4. The Committee calls on the Commission to study the possibility of additional funding, either by the European Investment Bank (EIB) or under the Structural Funds. Bearing in mind the increased pooling of effort between national and Community research activities, the scope for local, regional or national financing should also be explored.

3.1.8. In addition, the Committee shares the serious concern expressed by the Court of Auditors regarding major delays in the Commission`s payments. The Court stresses that such delays create cash-flow problems, especially for universities and SMEs. The economic survival of these SMEs may depend on prompt payment (see point 1.48 of the report).

3.1.8.1. Such delays generate financial costs and debt. Here again the situation is unacceptable, especially as the Commission is more at fault than contractors. The comments on the ESPRIT programme are broadly true of all research programmes.

3.1.8.2. The Committee therefore is in full agreement with the conclusions of the Court of Auditors as regards the need to consider improving and streamlining financial management. In addition to the suggestions made in the Court`s report, the Committee asks the Commission to study the possibility of implementing a system of refundable advance payments or of considering the refund of interest paid on capital borrowed to cope with payment delays, especially for the share of such delays for which the Commission is responsible.

3.1.9. Lastly, the Committee regrets the absence of any measure to give further encouragement to research cooperation between firms and universities. This is particularly regrettable because, in the Opinion referred to above, the Committee urged 'the identification of new measures such as the introduction of procedures designed to stimulate cooperation between large and small businesses and between businesses and the universities through particularly suitable channels of evaluation or increased funding` (see point 3.5.5).

3.2. Specific comments

3.2.1. Article 2

3.2.1.1. In Article 2(1)(a) the Committee proposes that the word 'regularly` be deleted.

3.2.1.2. Its inclusion creates ambiguity and is inconsistent with the principle of equal access to research programmes since it reflects an established bias in favour of entities already participating in research programmes, whether Community or national.

3.2.1.3. In addition, the proposed Decision does not stipulate that the legal entities from third countries referred to in Article 2(2) must regularly carry out a research activity.

3.2.1.4. The wording of Article 2(2), which sets out the rules governing participation of legal entities from third countries in Community research activities, needs to be clarified. It is far from clear which third countries are concerned or what rules are applicable.

3.2.2. Article 3

3.2.2.1. In the first paragraph of Article 3(1) it should be specified that calls for proposals are 'normally` published on fixed dates.

3.2.3. This addition would provide a legal basis for the current practice, of which the Committee approves insofar as it reflects a greater drive for transparency.

3.2.3.1. In the Committee`s view, the wording of Article 3(4) is incompatible with Article 2(3), which provides that 'technology users` and other legal entities 'not having adequate research facilities of their own` may participate in research activities.

3.2.3.2. The insertion at the start of Article 3(4) of the phrase 'Subject to the provisions of Article 2(3)...` (remainder unchanged) is therefore proposed.

3.2.4. Article 4

3.2.4.1. The wording of Article 4(1) should be revised. At present it specifies that two legal entities established in associated states can conduct research activities yet, in the same paragraph, it stipulates that 'normally at least one of the contractors is established in a Member State`.

3.2.4.2. The Committee also proposes the deletion of 'normally` in this paragraph.

3.2.4.3. In its view, the establishment of at least one of the contractors in a Member State should be a binding rule in the light of the aims set by the European Union Treaty, and previously the Single Act, for RTD research policy.

3.2.4.4. The Committee proposes the insertion of a fourth paragraph stating that additional proposal selection criteria may be required in connection with the specific programmes with the intention of promoting SME participation in research activities. This addition would reflect the concern expressed by the Committee in this Opinion.

3.2.5. Article 9

3.2.5.1. This Article should be amended so as to provide that future actions adopted by the Council shall remain applicable during the lifespan of the Fourth Framework Programme (1994-1998) and not until they are 'replaced by another Decision of the Council based on Article 130J of the Treaty`.

3.2.5.2. The Committee considers that the proposed amendment would protect all entities concerned against any change in the rules governing participation in research activities during the lifespan of the actual Framework Programme, thereby providing them with a secure reference structure.

4. Rules on dissemination of research results

4.1. The Committee points to the limited aims of the Commission proposal, viz to set out the principles applicable to (a) the ownership of intellectual property rights resulting from RTD work funded by the Community and (b) the dissemination of research results.

4.2. In any event, it keenly regrets that the Commission proposal largely contents itself with reproducing Article 8 of the Council Decision of 29 April 1992 'on the dissemination and exploitation of knowledge resulting from the specific programmes of research and technological development of the Community` (1). In particular, Article 1(2) provides that the Commission alone shall determine the arrangements for implementation of the rules on dissemination of results which are set out in this proposal. No provision is made for information of the Committee, or any other institution, on these arrangements.

4.3. It feels that the Commission, in presenting this proposal, should have seized the chance to spell out in detail the rights and obligations connected with the dissemination and exploitation of research results. The Committee would therefore have expected the Commission to set out rules regarding:

- ownership rights;

- protection of knowledge resulting from research activities;

- dissemination of knowledge to the various participants in a research project and to third parties established in the Community which, though not participating in this project, also carry out research activities;

- exploitation and commercialization of knowledge;

- restrictions applicable to dissemination of knowledge;

- dissemination of knowledge belonging to the Community;

- publication and dissemination of information on research projects and their results;

- conditions governing the access of legal entities from third countries to knowledge resulting from Community research activities.

4.4. The current situation is particularly regrettable since the White Paper on 'Growth, Competitiveness, Employment` of December 1993 devotes a key chapter to this matter and stresses that shortcomings as regards the dissemination and exploitation of research results and their conversion into innovative products and procedures are one of the main deficiencies of the European research system. This weakness seriously undermines the competitiveness of Community industry.

4.4.1. In this connection, the Committee would also refer to its Opinion of 20 October 1993 on Growth,Competitiveness, Employment, which was its own contribution to the preparation of the White Paper (2).

4.5. The Committee feels that it would have been particularly appropriate to spell out and give widespread publicity to all these rules because of the frequent lack of information, indeed ignorance, on the part of many research programme participants as regards the rights and obligations applicable to protection of knowledge and results from Community research activities. This is particularly true of a large number of SMEs.

4.5.1. In the Committee`s view, action on at least two fronts is needed:

4.5.1.1. Firstly, all participants in research projects should be informed by the Commission, on conclusion of the contract, of the rules applicable to the protection of knowledge and results acquired from their research work. Here again the organization of information days could be considered.

4.5.1.2. Secondly, participants in research projects should be able, if they so wish, to receive help from experts specialized in patents, and more generally intellectual property, as part of the process to protect their results. These experts could be attached to the various information centres mentioned above and be funded by the Commission under the various specific programmes or the programme for the dissemination and exploitation of RTD.

4.6. The Committee does not intend in this Opinion to state its views on measures relating to the actual dissemination and exploitation of research results, which are the subject of a specific research programme under the Fourth Framework Programme. The Committee has also been consulted on this proposal and is to deliver an Opinion at a later date.

5. Final recommendations

5.1. The Committee urges the Commission and the Council to heed the following final recommendations:

5.1.1. Renewed efforts should be made to simplify, streamline and improve the transparency of the procedures relating to information, submission of project proposals, selection, management, dissemination and exploitation of R& D results and specifically find expression in the decisions concerning the general framework and specific programmes as well as Community action to promote measures fostering awareness among associations, organizations and centres providing assistance to firms.

5.1.2. The White Paper makes it clear that the potential of the internal market will not be fully exploited unless the SMEs, which play a key catalyst role, are duly involved by boosting their competitiveness, improving their financing, supporting cooperation between firms, improving the quality of management and technological auditing and achieving a decentralized economy with greater commitment to communication and participation in information and knowledge. These statements must be incorporated into a dynamic regulatory framework to aid SMEs, and notably into the Community`s RTD policy.

5.1.3. The guidelines for a policy of global competitiveness focus particularly on encouraging speedier dissemination of R& D results and speeding up their exploitation in competitive processes and products, with a better interface between producer and user and development of 'clusters` of competitive activities taking advantage of regional diversities within the Community. These guidelines must be translated into practical Community and national structural measures so as to give effective scope for the potential creation of new jobs, particularly in SMEs.

Done at Brussels, 1 June 1994.

The Chairman

of the Economic and Social Committee

Susanne TIEMANN

(1) OJ No C 81, 18. 3. 1994, pp. 9, 12, 15.

(2) OJ No L 115, 6. 5. 1994, p. 31.

(3) OJ No L 126, 18. 5. 1994, p. 1.

(4) OJ No L 375, 31. 12. 1991, p. 18.

(5) OJ No C 99, 8. 4. 1994, p. 23.

(6) OJ No C 45, 14. 2. 1994.

(7) Specific programme for the dissemination and utilization of scientific and technological research results (Value) 1989 to 1992 - OJ No L 200, 13. 7. 1989, p. 23.

(8) OJ No C 201, 26. 7. 1993, p. 36.

(9) OJ No L 141, 23. 5. 1992, p. 1.

(10) OJ No C 352, 30. 12. 1993, p. 32.