Lastly, evaluations will better account for the coordinated impact of R&I support at EU, national and regional level, building on existing work to better track the impact of EU R&I Programmes at national level. The European RTD Evaluation Networkwill provide the basis for a substantially increased cooperation with Member States and Associated States.

The evaluations of the new Framework Programme will ensure coherence of methodologies and comprehensiveness of coverage (i.e covering all programme parts and all delivery mechanisms). Evaluation of individual programme parts can continue to make use of specific indicators that complement relevant the Programme-level indicators. The evaluation of the Framework Programme will build on the coordinated evaluations of each programme part, type of actions and delivery mechanism according to common evaluation criteria and standard methodologies (incl. counterfactual analysis and qualitative approaches such as case studies). The comprehensive interim evaluation of the entire Framework Programme is foreseen by 2024, to draw the first lessons from the changes introduced in the new Framework Programme. A full-scale ex-post evaluation is planned by 2030 to provide a full assessment of the new Programme and report on the longer-term impacts of previous ones.

Management and implementation data for all parts of the Programme and all delivery mechanisms will continue to be collected in close to real-time. This data will be collected in a centrally managed and harmonised way through the Common Support Centre. It will also continue to be publicly available on a dedicated on-line portal in close to real-time allowing extraction per programme parts, types of actions and types of organisations (including specific data for SMEs). This will include inter alia proposals, applications, participations and projects (number, quality, EU contribution etc.); success rates; profiles of evaluators, applicants and participants (partly based on unique identifiers, and including country, gender, turnover, role in project etc.); implementation (including time-to-grant, error rate, satisfaction rate and the rate of risk taking etc.); and financial contribution to EU climate and environmental objectives and other mainstreaming targets. A yearly analysis of progress on key dimensions of the Framework Programme’s management and implementation will be carried out.

·Difference-in difference based on the comparison of the performance of beneficiaries before/after the Programme.

·Regression discontinuity design based on the comparison of the performance between successful and unsuccessful applicants (pending their approval on data use);

·Propensity score matching- based on pairing with similar researchers/companies and the development of panel data;

Baselines, targets, and benchmarks will be established prior to the Programme’s launch. External experts will help establish accurate and timely baselines, and propose targets with appropriate benchmarks, where relevant. To the extent possible data will also be collected for control groups to allow counterfactual evaluation designs:

The micro-data behind the key impact pathway indicators will be collected in a centrally managed and harmonised way, with minimal reporting burden. This will be achieved, for example, by collecting at proposal stage the unique identifiers of applicants, by sourcing data automatically from existing external public and private databases also after project’s end (e.g. data on publications, patents, employment and turnover), by adopting new ICT tools (e.g. text mining) and by using alternative primary data sources (e.g. expert reviews). Longer-term impact indicators may be estimated based on dedicated studies. The data collected will allow tracking disaggregated indicators and be analysed per type of action, type of organisation, type of collaboration, sectors, disciplines, calls, countries (including associated and third countries).

ØPossibility for programme part or action specific indicators (but not in the legal base)

ØKey indicators are classified according to 9 key impact pathways, for tracking impact through short, medium and long term indicators – for more accurate reporting over time

ØKey indicators are set at Programme level according to the Programme objectives and are attributable to the Programme

ØManagement and implementation data are still collected and made available in close-to-real time through Dashboard but are not part of “performance indicators”

ØAll Horizon 2020 indicators related to outputs, results and impacts are maintained but streamlined and further specified to cover the whole Programme

onone is related to the programme as a whole (covering only programme parts)

§28 are related to outputs, results or impacts, out of which:

The impact pathways will be time-sensitive: they will distinguish between the short (typically as of one year, when the first projects are completed), medium (typically as of three years, and for the interim evaluation) and long term (typically as of five years, and for the ex-post evaluation). The impact pathway indicators will contain both qualitative and quantitative information, the availability of which will depend on the state of implementation of the Programme. These indicators serve as proxies to report on the progress made towards each type of impact at Programme level. Individual programme parts will contribute to these indicators to a different degree and through different mechanisms. Additional indicators might be used to monitor individual programme parts when relevant and commensurate. These indicators proposed (see Annex 6) reflect the lessons learnt from the interim evaluation of Horizon 2020: all Horizon 2020 indicators related to outputs, results and impacts are maintained but streamlined and further specified to cover the whole programme. The management and implementation data is still collected but is separated from the key performance indicators, as illustrated in Table 9 .

3.Economic impact: related to fostering all forms of innovation, including breakthrough innovation, and strengthening market deployment of innovative solutions

2.Societal impact: related to strengthening the impact of research and innovation in developing, supporting and implementing EU policies, and support the uptake of innovative solutions in industry and society to address global challenges;

1.Scientific impact: related to supporting the creation and diffusion of high-quality new knowledge, skills, technologies and solutions to global challenges;

Impact pathways, and related key impact pathway indicators, will structure the annual monitoring of the programme performance (see Annex 6) towards its objectives. The objectives translate into three complementary impact categories (each being tracked along several pathways), which reflect the non-linear nature of R&I investments:

·Two fully-fledged (meta)-evaluations of the programme at mid-term and ex-post (upon completion).

·Annual monitoring of the programme performance: tracking of performance indicators in the short, medium and longer-term according to key impact pathways towards Programme objectives, based on baselines and targets where possible;

The monitoring and evaluation framework of the new Framework Programme will have three main building blocks:

The Programme has the flexibility to easily adapt to emergencies or new priorities. The strategic flexibility in the programming process will allow the Commission to react to urgent needs and new priorities well beyond its start date in 2021. The Programme will be able to shift budget allocations within and between pillars. Similarly, the strong cross-disciplinary, cross-sector and cross-border nature of the Programme allow it to produce R&I results relevant to changing circumstances.

Internal coherence will be strengthened through a redesigned pillar structure. The Framework Programme will not set objectives per pillar but at Programme-level. Each pillar and programme part is expected to contribute to those objectives albeit to different degrees. This will in turn ensure that each euro invested in one area will generate multiple impacts.

Synergies will be enhanced through the revamped strategic planning process, which will allow for identifying common objectives and common areas for activities (such a partnership areas or mission areas) across different Multi-Annual Financial Framework programmes. It will be open for public consultation, involving EU Institutions and citizens and end-users in agenda-setting (co-design) for the Work Programme.

Continued simplification will enhance user-friendliness. User-friendliness will mainly be enhanced by maintaining the single set of rules, continuity of funding rates and new simplifications such as the new simplified cost options, and the increased cross-reliance on certified accounting systems. Moreover, the European Innovation Council will also act as a one-stop-shop for innovators looking for funding, while also rationalising existing funding schemes for innovation, and will be clearly and visibly branded as such. European Partnerships will be opened up for all interested stakeholders. The Research Participant Portal is already highly appreciated by stakeholders (as well as other Commission services,) and we will further improve its design for the new Programme. Finally, a "toolbox" will be created to provide a comprehensive overview of all available funding tools in the legal proposal.

The post-2020 COSME will address market failures that affect all SMEs and will promote entrepreneurship and the creation of growth of companies. Under the Framework Programme, the European Innovation Council (EIC) will directly support the activities and scale-up of high-risk profile innovative start-ups, SMEs and mid-cap firms, while the InvestEU programme will more broadly focus on R&I-driven innovative companies. The Enterprise Europe Network as a corporate tool with its Key Account Managers will continue to play a role in Business accelerator services of the EIC aiming at providing beneficiaries with access to partners, investors, and assistance (coaching, training, technical support).

The post-2020 LIFE programme will continue to act as a catalyst for implementing EU environment and climate policy and legislation, including by taking up and applying R&I results from the Framework Programmes and help deploying them at national and (inter-) regional scale. LIFE will continue to incentivise synergies with Horizon Europe through the award of a bonus point during evaluation for proposals which feature the uptake of Framework Programmes’ results. Horizon Europe will contribute to tackling environmental challenges in particular through the clusters on Health, Climate, Energy and Mobility and Food and Natural Resources by defining relevant R&I activities in the Strategic Research and Innovation Plan.

The InvestEU Fund will include financial instruments in four separate policy windows. An R&I thematic window will bundle financing activities that are closely linked to the objectives of the R&I Framework Programme, and dedicated products for innovative SMEs and mid-caps will be deployed through SME window. Blended finance in the Framework Programme will be provided by the EIC to high-risk market-creating innovations. Appropriate synergies with the new InvestEU programme shall be established, in particular regarding budgetary guarantees and leveraging Venture Capital funds supported by InvestEU.

The future Security and Border programmes will contribute to ensuring a high level of security in the Union, inter alia by tackling terrorism and radicalisation, organised crime and cybercrime, and by supporting the effective implementation of the European Integrated Border Management system. The programmes will support Member States’ efforts in these areas, including by incentivising Member States to take up and apply R&I results from the Framework Programme. The Framework Programme will support R&I in the area of security, including border management, in particular though the cluster on Resilience and Security. Potential complementary actions can also be considered under Horizon Europe regarding research and innovation for customs control equipment in view of the Union instrument for financial support for customs control equipment (CCE).

The Innovation Fund under the EU ETS will support low-carbon technology demonstration projects in the EU. It has been established by the revised EU ETS Directive and it will use the proceeds from the auctioning of at least 450 million allowances under the EU ETS, as well as leftovers from the current NER 300 programme. It will specifically target innovative low-carbon technology demonstration projects in industry, renewable energy, energy storage, carbon capture and storage (CCS) or industrial carbon capture and use (CCU) to be developed via the R&I window of the (InvestEU Programme) in addition to resources deployed therein. Horizon Europe will fund the development and demonstration of technologies that can deliver on the EU decarbonisation, energy and industrial transformation objectives.

There are inherent complementarities between Horizon Europe and the future Instrument, for example in so far as they both contribute towards the EU's international commitments such as the 2030 Agenda for Sustainable Development , the Paris Agreement on Climate Change, or the renewed EU-Africa Partnership among others. The Neighbourhood, Development and International Cooperation Instrument will continue to complement the Framework Programme by building research and innovation capacity (at individual, organisational or institutional levels) including through research infrastructures in third countries and regions. It will support the diffusion and uptake of innovations, the development of human capital and market access for technological solutions developed through collaborative research and innovation.

The future Neighbourhood, Development and International Cooperation Instrument will merge several EU external instruments existing in the 2014-2020 period. The broad instrument will include a prominent neighbourhood window, strong focus on migration including a 20% unallocated envelope and provisioning for Macro-Financial Assistance.

The post-2020 European Social Fund will continue to invest in human capital and skills development, as well as in social innovation. The ESF+ can mainstream and scale up new and innovative curricula for education and training programmes developed in R&I projects under the Framework Programme. Holders of the Seal of Excellence may be funded by the ESF+ to support activities promoting human capital development in research and innovation with the aim of strengthening the European Research Area. The Health strand of the ESF+ will mainstream innovative technologies and new business models and solutions, in particular those resulting from the Framework Programmes.

The post-2020 European Regional Development Fund (ERDF) will provide an important part of EU funds for R&I. The post-2020 ERDF may feature increased funds dedicated to the take-up of results and the rolling out of novel technologies and innovative solutions from past Framework Programme and Horizon Europe. It will continue to invest in actions that build R&I capacities of actors aimed at participating in the Framework Programme or other internationally competitive R&I programmes. Holders of Seal of Excellence labels from the Framework Programme may be funded by Member States and regions, where relevant to the local context and smart specialisation strategies, including with resources from any Union shared-management programme. The same applies for national funding of joint programmes co-funded under the Framework Programme. In addition, budget from share management could be voluntary transferred for implementation to central managed programmes. Part of the Framework Programme will continue to support low-performing countries in R&I, in the context of strengthening the European Research Area. Smart specialisation strategies will continue to promote innovation based on the strengths of each region and be a basis for ESI Funds investments in R&I and the innovation eco-systems.

Complementarity and synergies with the European Defence Fund will be ensured, so that results under civil R&I also benefit defence R&I and vice-versa.

The post-2020 Erasmus will continue to support mobility, cooperation and policy initiatives in the field of higher education. This includes support for integration of education, research and innovation, development of competences and inter-disciplinary, transferable, digital and entrepreneurial skills in forward-looking fields or disciplines and support to higher education institutions, research centres, businesses and civil society to contribute to innovation. The Framework Programme will continue to invest in the people behind research and innovation, strengthening their skills, training and career development and fostering the transfer of knowledge and cooperation between research-performing organisations and providing incentives for universities embracing open science policy. Horizon Europe will complement the Erasmus programme's support for the European Universities initiative, in particular its research dimension, as part of developing new, joint and integrated long-term and sustainable strategies on education, research and innovation based on trans-disciplinary and cross-sectoral approaches to make the knowledge triangle a reality.

DEP focuses on large-scale digital capacity and infrastructure building in High Performance Computing, Artificial Intelligence, Cybersecurity and advanced digital skills aiming at wide uptake and deployment across Europe of critical existing or tested innovative digital solutions. While several thematic areas addressed by both programmes converge, DEP will mainly focus on roll-out and deployment activities outside research and innovation, whereas the Framework Programme will focus on investing in the entire spectrum from research to market. R&I needs related to digital aspects are identified and established in Horizon Europe strategic R&I plan, while DEP capacities and infrastructures are made available to the research and innovation community, including for activities supported through Horizon Europe such as testing, experimentation and demonstration across all sectors and disciplines.

The post-2020 CEF will prioritise the large-scale roll-out and deployment of innovative new technologies and solutions which result from projects in transport, energy and telecommunications funded by the Framework Programmes. Horizon Europe will support all stages in the R&I chain, including non-technological and social innovation, and closer-to-market activities with innovative financial instruments. Through the Strategic Research and Innovation Plan, Horizon Europe will support R&I on transport, energy and mobility, in particular through the Climate, Energy and Mobility cluster, as well as digital technologies. The exchange of information and data between Horizon Europe and CEF projects will be facilitated, for example by highlighting technologies from the Framework Programme with a high market readiness that could be further deployed through CEF.

The post-2020 European Maritime and Fisheries Fund will provide important support to the implementation of the Common Fisheries Policy and the Maritime Policy. This programme will focus on creating the conditions for boosting competitiveness in the blue economy, especially through close-to-market innovation, access to marine knowledge and by ensuring a safe and secure maritime space. Strong and sustainable blue growth requires enhanced synergies with wider EU intervention. The Framework Programme is of particular relevance in this respect as it strengthens the knowledge base from which new, innovative products, processes and services can emerge in the maritime economy. The EMFF will support the rolling out of novel technologies and innovative products, processes and services, in particular those resulting from Horizon Europe in the fields of marine and maritime policy.

A key priority for the ‘second pillar’ of the post-2020 CAP is an increased focus on fostering innovation, in particular through wider diffusion of innovation, better access to new technologies and investment support. This will involve strengthening the links between agricultural and rural development policies and R&I in support to the development of knowledge and innovation systems. The development of an ambitious, integrated Strategic Research and Innovation Plan will define priorities of the Framework Programme in the area of food, nutrition security and sustainable management of natural resources with a view to develop synergies between the Framework Programme and the CAP. The latter will promote the use, implementation and deployment of innovative solutions, including those stemming from R&I projects funded by Horizon Europe.

Other MFF Programmes are closely linked to the new EU R&I Programme: synergies and complementarities between them should be enhanced (see Table 7 and Annex 7). Current Horizon 2020 beneficiaries also benefited from other EU programmes, e.g. the European Structural and Investment funds, EU Health Programme, and COSME.

The delivery tools of the Framework Programme will contribute to the cross-cutting objectives of the Multiannual Financial Framework (MFF), notably simplification, flexibility, coherence, synergies and focus on performance. Overall, the Framework Programme is expected to deliver large benefits that outweigh costs, in particular for the Programme's focus on performance, its flexibility, as well as its internal coherence and its synergy with other programmes (see Ta ble 8 ).

·Enhance focus on performance. Executive Agencies have reached and maintained very high levels of satisfaction among their beneficiaries, while at the same time successfully managing a larger number of projects than in FP7. This consistent high performance allows the Commission to focus on strategic priorities.

·Improve synergies with other programmes. Executive agencies manage parts of different programmes that complement each other: rationalising their portfolio can help aligning and integrating objectives of different programmes, for instance better linking R&I results to market deployment.

·Reduce administrative costs. Independent evaluations show that delegation to Executive Agencies brings substantial savings in administrative expenditure. The administrative costs of the programme implementation by Executive Agencies in Horizon 2020 are around 2-3% of the operational budget, which is well below the target of 5%.

What alternatives were considered? For the implementation of the new Framework Programme, the following alternative options were considered: an 'in-house' scenario (reintegration of part of the programme management in the Commission); maintaining the current status as in Horizon 2020; and full delegation of all programme's activities. The in-house scenario would imply returning to previous management modes that entailed comparably higher administrative costs. Specific scenarios for the implementation of the EIC activities through a dedicated Executive Agency are described in the Annex 8 on the EIC.

The Commission will increase the share of the budget delegated to Executive Agencies, subject to positive outcome of the mandatory Cost Benefit Analysis. Given the new elements in the scope of the new Framework Programme (e.g. missions and the EIC) and the increased budget to be delegated, the reshaping of the portfolios of the existing Executive Agencies will be needed along with exploring the possibility of establishing additional ones. Activities with substantial policy content will be excluded from delegation to Executive Agencies while, in parallel, the effective feedback of R&I data and results from Executive Agencies to the Commission will be reinforced, in line with the dissemination and exploitation strategy, to strengthen the inputs for policy-making.

·Higher market uptake, impact and innovation potential. Union support will ensure a constant stream of knowledge and innovations towards the scientific community, industry, policy-makers, and the public. Dedicated support services developed by the Commission, combined with the strengthened exploitation plans of the beneficiaries, will satisfy both the legitimate interest of beneficiaries and the interest of the public.

·Some additional reporting requirements. The possibility of additional reporting specifically on exploitation or impact demonstration and related administrative burden will be weighed against the need to have accurate information regarding the exploitation of results beyond the lifetime of the projects.

·More economic and societal impact. By fostering better exploitation of R&I results, a more EU-focussed exploitation increases the accessibility of high quality content, while ensuring that the benefits serve the EU. They aim at better ensuring the right balance between the pursuit of EU strategic interests in terms of competitiveness and job creation on one hand, and attractiveness for industry and openness to international participation on the other. This will assist market uptake, boost impact, and increase the innovation potential of results supported by EU funding.

What alternatives were considered? Alternatives for better exploitation of R&I results that were considered range from not having specific rules at all, to having more stringent rules across the board. Having a more stringent general rule was considered unjustified, as there may be valid reasons why exploitation occurs elsewhere (the EU often still benefits from such exploitation). Moreover, such a broad approach would deter industrial and international participants. Having no rules at all, and leaving the full choice of exploitation location to market forces was considered insufficent to safeguard the appropriate exploitation of results for the benefit of the Union.

More emphasis is put on to promoting the exploitation of R&I results, in particular in the EU. Horizon 2020 provides for a "best effort" to exploit results and, if indicated in the Work Programme, for additional exploitation obligations. In Horizon Europe, the "best effort" approach to exploit must have a particular focus on the EU. As in Horizon 2020, the Work Programme can specify additional obligations if justified. The beneficiaries must include in their proposals a dissemination and exploitation plan that must be updated during and after the end of the project, to ensure a continued focus on the exploitation of results.

Horizon Europe will provide dedicated support to dissemination (including through open access to scientific publications), exploitation and knowledge diffusion actions. Strong emphasis will be placed on portfolios of research results for targeted diffusion to end-users, citizens, public administrations, academia, civil society organisations, industry and policy-makers, including through the use of data intelligence tools for harvesting knowledge and providing innovative data uses and visualisation.

·Increase simplification for beneficiaries of EU funds. The Systems and Processes Audit (SPA) allows for more synergies with the Audits carried out under the shared management mode (e.g. especially those performed under the European Regional Development Fund). With this cross-reliance between audits, the Commission increases efficiency and effectiveness, avoids duplication of audit efforts and initiates a process where auditors within the Commission can exchange data and reviews.

·Reduce administrative burden. Compared to Horizon 2020, the Systems and Processes Audit (SPA) will lead to a reduction of the audit burden of the beneficiary that has been positively assessed. A beneficiary which is positively assessed via a Systems and Processes Audit, receives a long term assurance that their usual accounting practices are compatible with the Horizon Europe’s eligibility requirements, whilst the need for further auditing ceases to exist. The introduction of Systems and Processes Audit is a holistic audit approach, resulting into an overall assurance which when achieved, results into a significant reduction of the audit burden.

What alternatives were considered? The concept of cross-reliance on other audits or assessments with other EU programmes was considered, however its effectiveness depend on the homogeneity of the rules between programmes. Identifying possible common benchmarks / principles or best practises for a broader acceptance of usual cost accounting practices of beneficiaries from different sectors and different countries can be further explored as a second alternative in view of moving a step forward from a ‘rule-based’ approach towards a ‘principle-based’ one. However, it should be noted that such a challenging alternative would be possible only once having taken into account the eligibility criteria of the different programmes, in the particular context of the absence of any international standard in that matter.

Further efforts in the area of ex-ante controls through implementing additional automated checks and tools for simpler entry of the data, will have a positive impact where beneficiaries need to submit information to Commission. Integration of ex-post audit support into the Participant Portal will enable better view on the progress of the audits to the beneficiaries, allow completely electronic exchange of documents and notifications, all that can anticipate additional reduction of burden and costs to beneficiaries.

A wider cross-reliance on audits and assessments – including with other EU programmes – is envisaged. The increased alignment to the Financial Regulation provide an opportunity for audit synergies via Systems and Processes Audit. Indeed Systems and Processes Audit avoid duplication of audits, since there will be a common audit approach on common financial rules and hence a more harmonised and simple audit approach. By cross relying on audits of beneficiaries among the various EU programmes, the need for additional auditing will gradually be reduced. In addition, cross-reliance has been explicitly considered in other elements of assurance (e.g. Systems and Processes audits and audit on transactions) resulting into a reduced need for financial audits on beneficiaries with positive results in their Systems audits. Moreover, cross-reliance could be part of the conditions under which the obligation for the beneficiary to submit a certificate on the financial statement can be waived.

·Maintain a strong focus on excellence and performance. Streamlined but adaptable rules will help applicants design well-focussed proposals, and will lead to processes in which the best proposals are identified and selected as quickly as possible.

·Achieve a balance between flexibility and coherence. The current system has been shown to work well, and there is no evidence for the need for a fundamental change. However, missions and the EIC require a proactive portfolio management to reach their objectives, calling for flexibility to ensure overall consistence. Providing the main ground rules in the legislation, while permitting adaptability via the Work Programme, has proven in the current and previous programmes to ensure coherence across the board, predictability for applicants, and smooth business processes, while maintaining a strong degree of flexibility and the possibility for experimentation.

What alternatives were considered? A possible alternative was the exclusion from the Rules for Participation of these provisions, relying instead on the full flexibility offered by the Financial Regulation (leaving the criteria and other provisions for the Work Programmes). Although this would maximise flexibility, it risks a divergence of rules in practice, jeopardise smooth business processes, and lead to unpredictability for applicants. Specifying in full detail the criteria for evaluation and selection of proposals in the Rules would ensure a high degree of coherence across the programme and a measure of stability for applicants but would represent a significant loss of flexibility.

For collaborative projects, the consortium must include at least three independent legal entities established in a different Member State or associated country, and with at least one of them established in a Member State, unless otherwise provided for in the work programme. For other specific activities (i.e. EIC, ERC, co-fund, or MSCA training and mobility actions), different minimum conditions apply. Additional eligibility criteria may be laid down in the work programme. In case of actions carried out outside the Union using and/or generating classified information, a security agreement have to be concluded between the Union and the third country in which the activity is conducted.

The key elements of the proposal evaluation and selection system will be maintained, including the use of independent experts, and the use of three award criteria (based on excellence, impact and quality and efficiency of the implementation) across the board, with differentiation for the proposals for ERC frontier research actions, which will continue to apply only the excellence criterion and for the EIC’s Accelerator whose evaluation will include valuation of risk. Small improvements in order to address lessons learnt from the Horizon 2020 Interim Evaluation (e.g. to improve quality of feedback to applicants, differentiated expert panels, and multi-stage and multi-step procedures, gender balance in evaluation panels and the integration of the gender dimension in R&I content) can be ensured throughout the implementation of the Work Programmes. To increase the societal relevance and applicability of proposals, greater use of civil society expertise should be encouraged in appropriate evaluation panels. In particular for missions and the EIC, the Commission may select proposals based not only on the merit of individual proposals, but also in relation to the overall coherence of the portfolio of projects and other Union policy objectives. While the main principles would be spelled out in advance in the Rules, the Work Programmes will provide further details on the application of the award criteria depending on the objectives of the calls and instruments (e.g. the aspects to be taken into account under the evaluation procedures).

·Increase leverage through active measures put in place for EU R&I funding to stimulate private finance. For instance, proposals may also be submitted by investors including public innovation agencies looking for co-investment. A set of actions to improve ‘investment-readiness’ and ‘bankability’ will continue from the Horizon 2020 EIC Pilot in term of coaching (InvestHorizon), and the EIC events aimed at matching investor/investee and awareness raising.

·Raise availability of large-scale risk finance in Europe by providing large tailor-made investments that combine EU support through grants and blended finance, in addition to investment through support to equity or guarantees.

·A conditional grant combined with a loan or equity: the payment of all or part of the grant is conditional on the grantee obtaining at least a matching amount as a loan or an equity investment (such as venture capital) from a lender or investor.

·A loan combined with a grant: the proportion of grant to loan depends on an assessment of the riskiness of the innovation whose development the funding will support: the higher the risk, the greater the grant component. This approach can be combined with the whole or partial write-off of the loan if the development of the innovation fails for technical or commercial reasons; or the reimbursement of part of the grant if the innovation succeeds.

National innovation agencies such as Vinnova, BPI France, Innovate UK and CDTI operate blended finance in the form of grants in combination with soft loans and venture investments:

What alternatives were considered? While innovation at large will be reinforced by the InvestEU single fund - providing indirect financial instruments carried out through the European Investment Bank Group or other implementing partners, with a dedicated window for R&I investments and specific products for innovative companies - financial intermediaries (banks and investors) may remain averse to the residual risk they bear when investing in high-risk innovative projects. To date, available private and corporate financing remains small for late stage of innovation activities and market take-up for high-risk breakthrough innovations, as financial institutions must limit their risks to maintain their market rating. There is hence a necessity for direct Union intervention. Providing only for grant allows to start de-risk operations and attract private or corporate finance, but partially, as some activities too close to market, including deployment and scale-up, may not be covered by grants. Furthermore, the classical alternative of awarding blended finance to a project by allocating grant-type funding (through the Framework Programme) and financial instruments (through InvestEU) might not be fully adapted to the needs of risky breakthrough innovators, who need to proceed to the market quickly.

Blended finance will help companies to scale up. The supply of flexible and agile funding schemes is essential for innovators. Grants will continue for projects that are far from the market, for example for basic research . Yet, projects that are closer to market may still present a too high-risk profile, preventing them access to risk finance. Through the European Innovation Council (EIC), the new Framework Programme will offer large-scale blended funding (grants or reimbursable advance with equity or guarantees) to companies undertaking such projects, for late stage innovation activities, but also for market deployment activities such as pilot manufacturing, large trials or ensuring regulatory compliance , tailored to their risk level and technological maturity. The overall purpose of blended finance shall be to support high-risk innovations beyond the usual limits of grant-based research, where the risks – whether technological, market or regulatory – cannot be borne by the market alone. By combining grant-type funding with equity or guarantees under the EIC, the Programme will hence bridge the financing gap between late stages of R&I and market uptake and deployment, and will encourage investors and lenders to support innovative high-risk projects, with a greater propensity to co-invest or to offer lower interest-rates and less onerous requirements for collateral.

·More coherence with the Financial Regulation. An alignment of the rules with other EU funding programmes will also allow the beneficiaries to apply even more widely their usual accounting practices, as this reduces the need to amend reporting models to the various (and sometimes diverging) needs of each EU programme. This harmonisation and further acceptance of the beneficiaries’ usual accounting practices will reduce the administrative burden of the beneficiaries.

·Lower error rate. The further acceptance of the beneficiaries’ usual cost accounting practices will reduce the error rate on issues that have generated recurrent and repetitive errors under FP7 and Horizon 2020. For example, the abolition of the additional remuneration scheme will allow the beneficiaries to report their personnel cost with respect to their usual accounting practices, whilst the current experience on auditing lump sums has confirmed the low error rate on such transactions.

·Lower administrative burden. The broader acceptance of beneficiaries’ usual cost accounting practices, the abolition of the additional remuneration scheme, and the extended use of lump sum and output-based funding significantly contributes to simplification, as they improve and simplify reimbursement of actual costs, while providing flexibility. In particular, the use of lump sums reduces substantially the reporting requirements from beneficiaries during the lifetime of the project, shifting the focus of project monitoring from financial checks to performance and content.

What alternatives were considered? Alternative simplified costs options were assessed regarding rules for personnel costs, such as optional unit cost (hourly rate) or contributions not linked to costs but were not found feasible. Fully relying on the Financial Regulation was also considered, but such an approach would imply a significant departure from current practices (lack of continuity) and would be negatively perceived by beneficiaries.

The system of in-kind contributions provided by third parties to beneficiaries will be further aligned to the Financial Regulation: in-kind contributions against payment will be treated and reimbursed under other budget categories according to the eligibility criteria for actual costs. In addition, the calculation of in-kind contribution free-of-charge will be further simplified: no distinction will be made if these resources are used on the premises of beneficiaries or third parties and beneficiaries will no longer need to declare them, under specific conditions, as receipts.

As regards actual costs, the calculation of personnel costs will be further simplified and aligned to the Financial Regulation. The distinction between basic and additional remuneration will be removed and the Horizon 2020 capping on the additional remuneration abolished. For beneficiaries with project-based remuneration, costs of personnel will be eligible up to the remuneration that the person would be paid for the time worked in projects funded by national schemes.

The cost reimbursement scheme will be further simplified. The two current unit costs (average personnel costs and internally invoiced goods and services) calculated in accordance with the beneficiary's practices will be maintained. In addition, in view of simplification, the unit cost for internally invoiced goods and services will allow for a higher acceptance of the usual cost accounting practices. Beneficiaries will be able, under certain conditions , to calculate such unit cost based on ‘actual direct and indirect costs', provided those costs are recorded in their accounts. The need to further align programme provisions with beneficiaries’ accounting practices was also a recommendation from the European Court of Auditors. In order to lower administrative burden, an increased use will be made of lump-sum project funding against fulfilment of activities – building on the experience from the lump-sum pilot in Horizon 2020 – as well as other simplified forms of funding provided by the new Financial Regulation, including other incentives based on contributions not linked to costs, where appropriate.

·Reduced oversubscription. Extending the use of flexibility to establish lower funding rates in the Work Programme can contribute to reducing oversubscription for targeted calls or topics. The level of co-investment will increase or at least remain the same as in Horizon 2020.

·Further simplification and more flexibility. The benefits of the current funding model have already largely materialised: simple financial management of projects; reduced complexity of the financial rules; reduced financial error rate; acceleration of the granting processes.

·Maintained programme attractiveness. Continuity in the funding model enhances predictability, legal certainty, attractiveness and ease of access to the Programme. Administrative burden would not increase. On the contrary, a significant departure from the Horizon 2020 model would force beneficiaries to adapt once again to a new system.

What alternatives were considered? Alternatives to the continuation were considered, mainly to reduce oversubscription, but maintaining attractiveness (i.e. broad involvement from all sectors and disciplines) is more important. A lower funding rate for all projects (e.g. 75%) would allow a larger number of beneficiaries to benefit from EU support. However, such an approach would decrease the overall attractiveness of the programme, especially for non-profit entities and SMEs, hence affecting the principle of excellence. Different levels of funding for industry compared to other types of beneficiaries were also considered, but this approach would have a negative impact on industry participation, on simplification and on time-to-grant. Alternative ways to address oversubscription are also identified in section 3.4 on critical mass.

Rules on funding rates will be maintained. Given the largely positive assessment of the Horizon 2020 funding model, Horizon Europe will maintain the single reimbursement rate for direct costs (up to 100% of the total eligible costs for Research and Innovation Actions and up to 70% for Innovation Actions) and the single flat rate for indirect costs (25% is applied to the total direct eligible costs). Similarly, the funding rate will be a maximum - this ceiling can be reduced for implementing specific actions, where duly justified (e.g. for Euratom, or specific close-to-market calls).

·Increased flexibility while maintaining legal certainty. The Framework Programme will further improve the balance between flexibility and legal certainty e.g. by allowing funding bodies to establish rules that depart from those laid down in the Financial Regulation or in the Rules for Participation, in order to accommodate their specific operating needs of individual initiatives in duly justified cases.

·Improved synergies with other EU programmes. As the number of derogations to the Financial Regulation is reduced, EU programmes are more likely to share common rules. This increases the possibility for more targeted multi-faceted EU support, for instance through missions.

·More simplification and reduced costs. The single set of rules contributes to the rationalisation of the new Framework Programme. It further harmonises and streamlines implementation methods, hence simplifying the burden e.g. for preparing and submitting proposals. It increases the accessibility and attractiveness of the programme, in particular for applicants with limited resources, such as SMEs.

What alternatives were considered? Keeping Horizon 2020 status quo was considered for predictability, but this would have been a missed opportunity to streamline the approach taken on derogations (e.g. by maintaining the scope of the derogations for Art. 187 TFEU initiatives separate from other institutionalised European Partnership Initiatives) and for further simplification. Returning to FP7 Rules would provide more flexibility (e.g. by allowing different funding bodies to adopt rules as they see fit), but this would result in diverging rules, undermining simplification, legal certainty and hampering participation.

The principle of a single set of rules will continue with further improvements. In line with the corporate approach towards a single-rule book and the preparation of the MFF, the new EU Financial Regulation will be used as a common reference under which the rules applicable to all EU funding programmes will be aligned. Derogations to the Financial Regulation are kept to the minimum, but maintained in order to strike the right balance between full harmonisation and specific needs of individual initiatives. The new Rules for Participation allow other funding bodies, in particular bodies implementing Article 185 or 187 TFEU initiatives, to establish limited derogations in their basic acts in cases duly justified by their specific needs. Furthermore, the Participant Guarantee Fund (renamed Mutual Insurance Mechanism) will be extended to article 185 TFEU institutionalised European Partnerships.

·Better alignment of national and EU policies. Involvement of Member States at early stage in the discussion on the strategic planning and in consequences in the work programme preparation will help to build better alignment between national and EU R&I activities.

·Higher coherence within the Programme and enhanced synergies with other EU Programmes. By bringing together all Commission services and implementing bodies, the Strategic R&I Plan will ensure a stronger and more inclusive agenda-setting process, whereby the linkages between EU Programmes would be strengthened, promoting faster dissemination and uptake of R&I results.

·Increased co-creation with other EU Institutions and citizens. While in Horizon 2020 the priority setting was defined mostly with targeted consultations, the new Strategic R&I Plan will be more open for general public consultation, involving citizens, customers and end-users in agenda-setting (co-design) for the Programme. In particular, the public will have a say in the definition of R&I missions.

In addition, a simpler governance structure with ad-hoc and flexible advisory mechanisms and Programme Committee configurations will improve the rationalisation and simplification of the planning process, hence delivering results more efficiently and transparently.

Towards a strategic, impact-oriented and collegial planning process. The strategic planning process will provide multi-annual strategic orientations for the Framework Programme. It will be co-created in synergy with other EU programmes and policies, with the intention of giving coherence to the entire portfolio of actions supported by the EU under the MFF. The process will be streamlined into a single Commission document, applying to all Programme components, including missions, European Partnerships, and the EIT Strategic Innovation Agenda. This draft Strategic R&I Plan will be open for public consultation, providing more involvement of EU Institutions and citizens than previously. The Work Programmes will then be developed on the basis of the finalised Strategic Plan.

The delegation to implementing bodies allows Commission services to focus on policy-making and strategic planning, while maximizing the effective and efficient use of EU funding. Executive Agency evaluations confirmed their effectiveness and high value for money, with administrative costs well below 5%.

To ensure a more modern, effective and dynamic implementation, while reducing staffing by 5% over 5 years, 75% of Horizon 2020 budget is delegated to other EU bodies: Executive Agencies (55%), Public Private Partnerships (Art. 187 TFEU initiatives, 10%), the European Investment Bank (4%), the European Institute of Technology (EIT, 4%) and Public-Public Partnerships (Art. 185 TFEU initiatives, 2%). The remaining 25% is managed "in house" by the Commission.

Beneficiaries develop activities for better dissemination and exploitation but results are still not fully accessible to all relevant stakeholders and this represents a barrier to knowledge circulation and to innovation uptake. The uneven exploitation capacity among beneficiaries hinders market uptake. Moreover, feedback from R&I projects into policy-making must be strengthened.

Throughout Horizon 2020, specific calls for proposals, coordination and support actions and public procurement provide targeted assistance to projects in order to optimise the dissemination and exploitation of their research results. To further assist project consortia, the Commission provides tailor-made support services, e.g. the Common Exploitation Booster, the Common Dissemination Booster and the Innovation Radar.

The Common Support Centre strengthened the corporate approach in implementing the programme and in auditing projects. However, some Joint Undertakings expressed the need of additional direct audit coverage and considered the common representative sample as not sufficient enough for their needs, leading to a potential increase of audit burden towards the Horizon 2020 beneficiaries.

The general rules related to the management and implementation of projects are detailed in the Model Grant Agreement. Beneficiaries are bound by the grant agreement they sign with the Commission. The audit and control system seeks an appropriate balance between trust and control, taking into account administrative burden for participants. The Horizon 2020 audit strategy is based on the financial audit of a representative sample of expenditure, and is complemented by a selection based on risk assessment

The Horizon 2020 proposal evaluation and selection process is generally highly regarded. Still, some stakeholders asked for more transparency, found the quality of evaluation feedback received uneven, and considered that the evaluation experts sometimes appeared to lack the appropriate expertise. To increase efficiency in relation to over-subscription, two-stage calls for proposals were identified as good practice.

Major investment decisions are taken at the stage of evaluation and selection of proposals. The system, based on independent expert judgement ensures that the selected projects are the best. The approach ensures maximum coherence across the different implementing bodies, based on three award criteria against which proposals are evaluated: Excellence; Impact; and Quality and efficiency of the implementation.

Only a small number of firms receiving Horizon 2020 grants benefitted from Horizon 2020 financial instruments. Extremely few companies taking part in Horizon 2020 obtained investments for scaling up from InnovFin. This points to a potential lack of integration between the grant and non-grant based instruments at different stages of the innovation cycle but also to limitations of intermediated risk-sharing mechanism where the initial risk is to be fully borne by the Union due to market risk-aversion.

More than 90% of the Horizon 2020 support is grant based, while the rest is provided with financial instruments (i.e. debt or equity) through the European Investment Bank (InnovFin) . Pre-commercial public procurement (PCP), public procurement for innovation (PPI) and inducement prizes represent only a limited share of the Horizon 2020 budget.

While beneficiaries express preference for actually incurred costs, a number of financial complexities are inherent to this model (e.g. calculation of the monthly hourly rate, additional remuneration). Moreover, reimbursement of actual costs focuses attention on justification of costs, and not on the expected impact as in the case of lump-sum funding. Further simplification of the actual cost reimbursement system is necessary, in particular for personnel costs. The European Court of Auditors also proposed that the post 2020 Framework Programme assesses the need for further use of simplified cost options such as lump sum project funding and prizes.

Horizon 2020 features a simplified cost reimbursement system with enhanced use of unit costs, flat-rates and lump sums, while actual cost reimbursement (i.e. costs actually incurred by beneficiaries) is used still for the majority of the budget. Unit costs are used for specific types of personnel costs (i.e. for average personnel costs and SME owners without a salary) and other direct costs (i.e. internal invoices), while indirect costs are covered by a single flat-rate. Lump sums, at the start of Horizon 2020, were used for small-sized projects (e.g. Phase 1 of the SME Instrument). In the 2018-20 Work Programme, pilot actions were launched for testing lump sum project funding for "mainstream" collaborative R&I projects.

The funding model has not led to a significant change in funding intensity. The funding model is a simplification measure that allows for flexibility and that has mobilised and largely satisfied stakeholders . The overall funding rate is on average 70% of total project eligible costs (both direct and indirect). In a simplification survey , 78% of respondents appreciated the single reimbursement rate.

The rules concerning the contribution of the EU to eligible costs do not differentiate between organisation categories or types of activities (in contrast to the FP7 funding model, which used a complex matrix of organisation categories and activity types). Its main features are a single reimbursement rate for direct costs (up to 100% of eligible costs for Research and Innovation Actions, and up to 70% for Innovation Actions ) and a single flat rate for indirect costs (25% is applied to the direct eligible costs ).

The single set of rules and its harmonised implementation via the CSC are widely seen by beneficiaries as advantageous, contributing to increased legal certainty, coherence and simplification of the rules, though some partners perceived it as a loss of flexibility compared to FP7. Moreover, Member States have repeatedly expressed their wish to include Art. 185 TFEU initiatives under the the Participant Guarantee Fund , which does not currently cover them.

The single set of rules (i.e. the Rules for Participation and dissemination of results) implies that the same rules are applied in all parts of the programme, regardless of the implementing body (Commission, Executive Agencies, Joint Undertakings). Only a very limited number of derogations from the Rules for Participation exist, when duly justified, e.g. for specific operating needs of public-to-public partnerships (Art. 185 TFEU) and public-private partnerships (Art. 187 TFEU) . The Common Support Centre (CSC) harmonises implementation of the rules across all implementing actors.

The strategic planning process improved the intelligence base underpinning priority-setting, and made the focus of the programme more in line with stakeholders needs. Nonetheless, the translation of high-level challenges and objectives into specific calls and topics is not always clear, while the transparency in the WP formulation process and the participation of stakeholders/and citizens/CSOs in agenda-setting were identified as areas for improvement.

The priority-setting process is defined in multiannual Work Programmes (WP). The WPs identify the priorities in calls for proposals. They allow some flexibility to respond to new developments . The strategic planning process builds on: Scoping Papers developed by the Commission; foresight; targeted consultations of industry, academia and civil society; and input from experts (Advisory Groups). The WPs are adopted by Commission Decision, in consultation with Member State representatives in the 14 configurations of the Programme Committee.

What do we have now?

Impact depends ultimately on the dissemination and exploitation of R&I data and results, and it needs to be effectively captured and communicated. An ambitious and comprehensive dissemination and exploitation strategy will increase the availability of R&I data and results and accelerate their uptake to boost the overall impact of the Programme. The strategy will move from a focus on individual projects to analyses of portfolio of R&I results in key policy areas and will further endorse Open Access policy to incentivise the exploitation of R&I results. In particular, clusters of mature R&I results will be exploited in synergy with other EU programmes to foster their uptake at national and regional level, maximising the European innovation potential. This will be complemented by effective R&I communication and outreach campaigns that build trust and engage citizens.

Optimising delivery is also key to achieve higher impact and further simplification. When properly designed, the Rules for Participation ensure legal certainty for participants and contribute to overall coherence in terms of implementation. Simplification remains a continuing endeavour in Horizon Europe, building on the achievements of Horizon 2020, which reduced the administrative burden and costs for applicants, and made it more attractive for newcomers and SMEs through new elements like its funding model (single reimbursement rate and a flat rate for indirect costs), the Participant Portal, and e-signatures. Beneficiaries and stakeholders have reacted very positively.

·Future and Emerging Technologies as separate label, but activities included in other parts

·Science with and for Society (becomes intervention areas within ERA foundation

·Leadership in enabling and industrial technologies (becomes cross-cluster, though in particular in Digital and Industry cluster)

·Strengthening the European Research Area : covers Science With and for Society, and Spreading Excellence and Widening Participation, which are Horizon 2020 specific objectives

·Societal Challenges: becomes Global Challenges and Industrial Competitiveness pillar and covers the LEITs specific objective of the Industrial Leadership pillar and the EIT, which was a separate specific objective

·Excellent Science: becomes Open Science pillar and does not include the FET specific objective

Efficient delivery is essential for reaching all the Programme’s objectives. This section will describe the improvements made in order to better reach the cross-cutting objectives of the MFF: simplification, flexibility, coherence, synergies and focus on performance. These improvements are based on recommendations for optimising delivery from the Horizon 2020 Interim Evaluation and the Lamy High Level Group report. The changes are presented in a structured way along the typical lifecycle of EU R&I support. When changes represent a significant departure from Horizon 2020 (see Table 6 for lessons learnt from Horizon 2020), they will be assessed qualitatively and, where possible, quantitatively. More details can be found in the Annex 9 on the Rules for Participation.

Alternative measures to increase the success rate are not expected to be fully effective. Using financial instruments through the InvestEU programme and enhancing complementarities with other MFF programmes, including the European Regional Development Fund, would allow funding more R&I projects. More use of two-stage calls would filter proposals at an early stage. However, financial instruments are not appropriate for all projects, and two-stage calls will not solve the problem for unfunded high quality proposals. Likewise, decreasing the size of projects would imply abandoning larger scale projects, mainly affecting collaborative projects, which are an intrinsic part of the EU added value of the Programme. More strict eligibility criteria can improve overall success rate, however will not address the issue of low success rate for high-quality proposals. Lastly, decreasing the funding rate would lower effectiveness because applicants, including those with high-quality proposals, would need to find complementary funding, and could be discouraged from applying or taking risks.

Over the first three years of Horizon 2020, only 11.6% of the proposals could be funded. This low success rate can be explained by the high attractiveness of the Programme, which has led to a sharp increase in the number of eligible proposals compared to FP7 . Moreover, in the first years of Horizon, only 1 in 4 high quality proposals could be funded - an additional EUR 62 billion would have been needed to fund all proposals independently evaluated above the stringent quality threshold. . This underfunding represents an opportunity cost for Europe's promising R&I potential, since it undermines the critical mass needed to tackle global challenge; constitutes a waste of resources for the applicants (who spent an estimated EUR 636 million a year preparing proposals), deters excellent R&I players from applying, and deprives the EU of the full potential of the Programme. Based on the steady trend observed over the last decade, the number of proposals should be larger than in Horizon 2020. If the resources allocated to the Programme would remain similar to those of Horizon 2020 (in constant prices), the success rate would likely decline, or at best be maintained at ~12%, with only 20% -25% of high-quality proposals funded. This success rate is too low for the Programme to be efficient - a success rate of 15-20% (comparable to FP7), and funding for at least 30% of high quality proposals would be ideal.

Achieving critical mass is key for the efficiency and effectiveness of the Programme. Horizon Europe cannot work effectively if it is not able to fund a sufficiently broad portfolio of relevant technologies and a sufficiently large range of complementary R&I projects that can build on each other and contribute to the objectives of the Programme. Reaching critical mass means that the Programme should be able to fund projects large enough to bring together across countries, sectors and disciplines, all partners and resources required to achieve the targeted objectives. Critical mass is also needed to support large-scale initiatives, preparing full market deployment of solutions in areas like batteries, infectious diseases, smart and clean buildings and vehicles, low-emission technologies, circular economy, solutions for plastic waste, and connected/automated cars. Ambitions will have to be scaled back equally across the Programme if critical mass would not be available.

·Put in place an ambitious and comprehensive dissemination and exploitation strategy for increasing the availability of R&I results and accelerating their uptake to boost the overall impact of the Framework Programme and the European innovation potential.

·Provide holistic support throughout the dissemination and exploitation lifecycle to ensure a constant stream of innovations stemming from the Framework Programme.

·Put in place a comprehensive go-to-market package to incentivise the exploitation of Framework Programme’s results by helping beneficiaries to find the most appropriate instruments and channels for the market uptake of their innovations.

·Improved monitoring and dissemination of R&I results including through initiatives such as the Dissemination and Exploitation Boosters and the Innovation Radar – also directed to other EU programmes for further implementation

·Support with the EIC the deployment of market-creating innovations and the scale-up of start-ups, innovative SMEs and mid-capital firms with breakthrough potential to create new markets by blended finance of grants and financial instruments under the EIC;

·Support to roll out and replication of innovative solutions with cross-border and transnational dimension;

·Establish pipelines of innovative solutions (originated from R&I projects) targeted to public and private investors, including the EIC’s Accelerator and other EU programmes;

·Support innovation actions and the demonstration of technological and non-technological innovative solutions of a first-of-a-kind nature in Europe with potential for replication;

·Ensure market uptake is considered at the phase of proposal development, fostering applicants to co-create/experiment their research and solutions with users from the outset, to ensure improved fit to the final needs, including within the KICs co-location centres;

What can the Framework Programme do more for market uptake?

·Develop standards for innovative products and services, but with limited progress so far.

·Supports public demand for innovative solutions, through Public Procurement for Innovation and Pre-Commercial Procurement. This support is limited to the coordination costs between procurers.

·Provides support to closer-to-market activities, including the launch and scale-up of innovative companies, without distorting competition within the EU.

·Speeds up the introduction of innovations on the market and supports coaching and mentoring of companies.

·Supports the development of innovative solutions until demonstrators and pilots (introduction of a first-of-its-kind innovation in the EU).

What does Horizon 2020 currently do for market uptake?

Improving market uptake of innovative solutions is a broad concept encompassing various activities, which help R&I-driven innovation to succeed on the market and create new value for market players and consumers/citizens alike. However, market uptake goes beyond R&I. Therefore, activities under the Framework Programme alone cannot suffice to incentivise broad market uptake and dissemination of innovative solutions. Other EU programmes need to also play a key role (see Annex 7 on Synergies).

Lastly, these effects will be amplified by strengthened synergies and complementarities with other EU Programmes (see Annex 7). This will entail for example stronger alignment of priorities; clearer complementarities; more flexible co-funding schemes to pool resources at EU level; common strategic planning processes to allocate funding; greater alignment between applicable rules; and eligibility of R&I high-quality proposals for funding by other EU programmes (e.g. Seal of Excellence, co-funded European Partnerships), stronger involvement of existing networks at EU level (e.g., the Enterprise Europe Network). Portfolios of R&I results will be made available for EU regions for potential uptake based on their specific needs, thus maximising the benefits coming from synergies with EU initiatives, for increasing regional competitiveness and innovation. This will maximise the impact of investments, speed up market uptake and the development of a comprehensive R&I ecosystem. Moreover, the Framework Programme will deepen links with EU policy priorities by bringing R&I results into policy-making, with full involvement of sectoral policy-makers.

Horizon Europe will deliver more value for money. Figure 8 shows that the future Programme is expected to generate even more economic benefits due to the improvements in the programme structure and design, which together with more delivery for impact (see section 4) will ensure that the Programme will be cost-effective.

Horizon Europe is expected to generate more substantial economic benefits. Compared to the baseline (Section 2.1), the improvements will increase the overall impact, with different possible scenarios depending on how R&I leverage, diffusion and economic performance will react to these changes. Illustrative results from the NEMESIS model (see Annex 5) show that the estimated GDP gains for the EU compared to the baseline can range from +0.04% in a low scenario to +0.1% in a more optimistic scenario (direct and indirect effect). The total impact of the Programme on EU GDP could range from EUR 30 billion to EUR 40 billion per year over 25 years (EUR 800 billion to EUR 975 billion in total).

The EIC which aims to capitalize on EU science strengths and improve transition from science to breakthrough innovation, (i.e. innovation with highest impact) is expected to be particularly effective in assisting companies along their innovation journey by offering innovators seamless support (from grants to blended finance, from early stage research to market uptake). Missions which aim to set ambitious goals and channel EU R&I investment to areas with highest added value (i.e. highest impact) would allow the Programme to deliver better on EU strategic challenges; support the implementation of EU policy priorities; improve the contribution to EU policy-making; increase cross-sector and cross-disciplinary cooperation; and improve the societal uptake of innovative solutions based on better communication with, and involvement of, citizens. Strengthening international cooperation would foster R&I by attracting even more of the world's top innovators, knowledge-intensive companies, scientific organisations and researchers. Strengthening open science policy should create and diffuse better high-quality knowledge, while better involving and informing citizens. The integrated approach for partnerships would improve leverage of, and alignment to, Member State and private investments.

Impact is expected to be even higher than for the current Programme, because of improved programme-design novelties, increased internal coherence between Programme pillars, with more focus on cross-disciplinary, cross-sectoral and cross-policy activities, increased synergies with the MFF programmes, rationalisation, more user-friendly modalities, increased openness to all stakeholders, more flexibility and efficient delivery mechanisms, including a more effective dissemination and exploitation of R&I results.

·Enhanced impact of EU R&I funding. The new approach to partnerships will ensure that partnerships will only be established in cases where desired impacts cannot be created by other Framework Programme’s actions. As EU co-funding will be limited to agreed EU strategic priorities, including EU R&I missions, the overall impact of EU R&I funding will be increased by leveraging additional investments on EU policy priorities, by providing 'directionality' to these investments, and by reaching out to a broader set of stakeholders.

·More openness and flexibility. Partnerships will be open to all types of stakeholders (Member States, civil society/foundations, industry, including small and medium sized enterprises) with no entrance barriers for newcomers and smaller R&I players. Flexibility will be encouraged with a simplified toolbox, and a lifecycle-based planning and implementation approach.

·Improved coherence and simplification. The clear rationale for the use of R&I partnerships, the elaboration of distinct and clear intervention logics based on policy objectives and the application of an impact-based criteria framework along the life cycle of R&I partnerships, including their phasing-out will guide the establishment of the next generation of partnerships. This will lead to a smaller number of more coherent partnerships and improve the overall coherence of the European R&I ecosystem.

What are the risks? The major risk for the new policy approach is considered to be the expectations from the current partnerships to continue on a business as usual approach and expect more or less automatic renewal without being in line with the criteria set. It is crucial to ensure early involvement of Member States and stakeholders, including currently active initiatives, in the strategic programming process to build trust and ownership on the agreed future priorities.

What is the EU added value? The main added value derives from the additional private and public R&I investments on EU priorities (additionality and leverage), the alignment of these investments towards common objectives (directionality) and the achievement of impacts that cannot be created by other Framework Programme actions or national action alone. In addition, the revised policy approach will substantially improve the coherence between European Partnerships and the Framework Programme in general, based on clear criteria identified together with Member States and other stakeholders. EU investments in R&I will be simpler to communicate and understand for stakeholders. The approach will build on, and bring together, all the on-going and future partnerships.

The design and implementation of future European Partnerships will include an improved coherence between Framework Programme’s actions and R&I partnerships, as well as among initiatives. In addition, communication and outreach will be strengthened by a clear, easy-to-communicate architecture under the umbrella term “European Partnerships”. This encompasses all Partnerships with Member States, Associated or Third Countries and/or other stakeholders such as civil society/foundations and/or with industry (including small and medium sized enterprises), with greater openness to international cooperation. European Partnerships will only be developed on agreed EU policy priorities in the context of the Framework Programme, and subject to the criteria set out in the Framework Programme. They will be limited in time with clear conditions for phasing out from the Framework Programme funding. There will be only three types of intervention modes (i.e. several Horizon 2020 labels like P2P, PPP, ERA-NET, FET Flagship and cPPP will be discontinued): i) co-programmed European Partnerships between the EU, Member States, and/or other stakeholders, based on Memoranda of Understanding or contractual arrangements with partners; ii) co-funded European Partnerships, based on a single, flexible programme co-fund action for R&I activities; iii) institutionalised European Partnerships (based on Art. 185 or 187 TFEU, and EIT regulation for KICs). Following a life-cycle approach the legal act will set out the criteria for the selection, implementation, monitoring, evaluation and phasing out of all European Partnerships.

The strategic planning process of the Framework Programme (see section 4.1) will frame the establishment of European Partnerships. This will ensure that the next generation of partnerships will support agreed EU priorities and will lead to a rationalised R&I landscape, with fewer, but more targeted initiatives receiving co-funding/investment from the Framework Programme.

What changes? An overall European Partnerships strategy based on an objective- and impact-driven intervention logic will be developed and implemented in order to ensure that partnerships are established or renewed only in cases where impacts need to be created that cannot be achieved by other Framework Programme’s actions or national action alone. All future European Partnerships will be designed based on the principles of Union added value, transparency, openness, impact, leverage effect, long-term financial commitment of all the involved parties, flexibility, coherence and complementarity with Union, local, regional national and international initiatives.

t schemes should be carefully evaluated, and the discontinuation of funding should be an option (i.e. sunset clauses).

A large share of stakeholders submiting position papers is concerned by the complexity of the EU R&I funding landscape. A dozen stakeholders explicitly emphasise the fact that exsisting suppor

What did the other EU institutions say? The Competitiveness Council Conclusions stressed that the current R&I ecosystem has become too complex, and that all partnership initiatives should have an exit strategy from EU funding. The European Research Area and Innovation Committee (ERAC) considers it particularly urgent to rationalise the funding schemes, while considering public-to-public partnerships essential for more coordinated implementation of national and EU R&I. The European Parliament advocates ‘decomplexifying’ the EU funding landscape.

What do we have now? Horizon 2020 supports two broad categories of partnerships: those mainly involving industry, i.e. Article 187 initiatives or Public-Private-Partnerships (PPPs) and contractual PPPs (cPPPs); and those involving mainly Member States, i.e. Article 185 initiatives or Public-Public-Partnerships (P2Ps), ERA-NET Cofund, European Joint Programming-Cofund and Joint Programming Initiatives. Moreover, there are other types of mixed partnerships such as the Knowledge and Innovation Communities (KICs) of the European Institute of Innovation and Technology (EIT) (integrating the knowledge triangle) and the Future and Emerging Technologies Flagships.

Why do we need it? The European R&I partnership landscape grew significantly in size and complexity over the last decade with an increasing risk of overlap and non-coherence with the EU framework programme and between the partnerships themselves. In particular, there is a large number of Public-Public Partnership initiatives (currently close to 100). Still, Partnerships are key to achieving policy objectives that the Framework Programme alone cannot achieve. Reforming the current partnership landscape and improving the design and implementation of future European Partnerships, renewed or newly set-up, should make it possible to use their full potential in achieving ambitious policy objectives.

·Higher societal and policy impact. Open science policy allows citizens to be part of the research process (for example through citizen science), helping lifelong learning and developing an informed society for the 21st century challenges. Accessible R&I data and results can be used for evidence-based policy-making, therefore they contribute to strengthening the policy role of R&I.

·Increased accessibility to high quality digital content. Data are increasingly becoming the starting point for innovation, with high returns. With digitisation, it can be expected that SMEs and other companies will base new business models on digital content, hence will reap the benefits of a strengthened Open data environment in Europe and maximise the exploitation of digital resources through reusability.

·Higher levels of excellent research and innovation. Placing high quality content in the open, and stimulating knowledge circulation and the reuse of results, improves science communication and enables interdisciplinary research.

·Increased availability of scientific output in open access. A higher percentage of projects will make their outputs (publications, data, algorithms etc.) available in open access because of the simplification of provisions, the stricter formulation of exceptions, and financial support provided through the Programme.

What are the risks? The main concern on Open Science in Horizon Europe relates primarily to the requirement for open access to data from research projects. Without clearly explained safeguards, this policy could be perceived as deterrent for industry and businesses to participate. This is why, while open access to research data will be the standard, Horizon Europe will be fortified with robust exceptions to this rule, where access to data needs to be protected and Intellectual Property Rights protected. The principle that research data has to be 'as open as possible, as closed as necessary' will be emphasised every time it is necessary. A concern shared also at the time of Horizon 2020 is that the development of open access in Europe may offer content paid by European taxpayers for exploitation to the entire world, and therefore advantages other countries for more severe competition in research and innovation. The Commission is not the only funder with such open access and open science policy requirements. Funders across the globe are aligned in mandating open access to publications and data and relevant open science policies. It is not expected that Europe will set itself into a comparative disadvantage in this way, vis-à-vis other countries across the world.

What is the EU added value? Even while Member States are developing their own policies for Open Science, the positive effect of EU action is substantial. Horizon Europe will contribute towards policy alignment across the Member States and thus towards the development of a better and more unified environment for research collaboration in ERA and beyond it. Requirements of the Programme have structuring effects that accelerate the propagation of Open Science policy via collaborative projects in the research community. Horizon Europe will accelerate the transition towards Open Science by building a European Open Science Cloud supported by world-class infrastructure that will gradually also benefit industry and the public sector.

What changes? The Framework Programme will fully embrace and support Open Science policy as the new research modus operandi through various requirements in the Work Programmes. It will go beyond the open access policy of Horizon 2020, requiring immediate open access for publications and data (with robust opt-outs for the latter), and research data management plans to support sound data management; it will foster the proliferation of FAIR data (findable, accessible, interoperable and re-usable). It will support activities that promote a sustainable and innovative scholarly communications ecosystem; it will foster activities for the enhancement of researcher skills in open science and support reward systems that promote open science; it will integrate research integrity in the open science activities and support citizen science. Lastly, it will also support the introduction of next generation indicators for the assessment of research.

The majority of stakeholders who referred to Open Science note that data and knowledge produced from EU funded projects should be shared openly. However, some business representatives underlined the need for the opt-out option to be maintained to secure confidentiality of market-oriented innovation outputs. Stakeholders also highlight that open science, open data and open access calls for new principles in citation and academic reward system and requires attention to the development of skills in research data management

What did the other EU institutions say? The European Parliament opinion is in favour of the general principle of Open Access, while the European Research Area and Innovation Committee (ERAC) regards the 100% Open Access policy of Horizon 2020 as a clear measure in favour of knowledge circulation. Importantly, the Council Conclusions on the transition towards an Open Science System give valuable guidance for the future, while the Council Conclusions on the Interim Evaluation of Horizon 2020 highlight the role of Open Science in boosting impact and transparency.

What do we have now? There is a shift towards a more open, collaborative, data-intensive and networked way of doing research and sharing research results, enabled by developments in ICT and related infrastructures and the increasing proliferation of data. Open access to publications is mandatory, while open access publishing is encouraged, and relevant costs eligible. Beneficiaries are encouraged by guidelines to keep enough (copy)right to self-archive, but are not legally empowered to do so. Participation in the Open Research Data Pilot is the default for Horizon 2020 projects, and it requires a Data Management Plan and open access to research data, but there are solid conditions to opt-out from the Pilot at any stage.

Why do we need it? The next Framework Programme should fully embrace Open Science as a way of strengthening scientific excellence, benefiting from citizen participation, achieving better reproducibility of results and increasing knowledge circulation and the re-use of research data, hence accelerating the take-up of R&I knowledge and solutions and increasing the EU policy and societal impact of the Framework Programme.

·More impact from the Programme. Increased international cooperation will reinforce EU R&I excellence and the creation and diffusion of high-quality knowledge in the EU. Cooperating internationally is indispensable as the scope and interconnectivity of global societal challenges increase and require more international joint action and coordination of agendas International openness of the innovation eco-systems will strengthen EU competitiveness by promoting a level playing field and enhancing supply and demand of innovative solutions. The association agreements with countries having proven R&I capacities will facilitate mutual access to European and third-country know-how and markets, as cooperation with top third country innovators facilitates access to expertise that is increasingly developed outside the EU.

·Higher influence of the EU in shaping global R&I systems. This approach will enhance the EU leading role in setting the policy agenda, in particular for addressing common challenges and for achieving the Sustainable Development Goals. The mutual benefits of international cooperation strengthen EU leadership in the knowledge-intensive economy. The Programme will be an effective instrument in Europe's efforts to harness globalisation by removing barriers to innovation and by establishing fairer framework conditions with international partners.

·Improved excellence of the Programme. Attracting and collaborating with the world's top researchers, innovators and knowledge-intensive companies reinforces the EU’s science and technology base. Evidence shows that international collaboration increases the impact of scientific publications.

What are the risks? The main risk is that the proposed specific objective, priorities for actions and instruments to be used will not be sufficient for strengthening international cooperation in the Programme compared to the current situation. Regarding the process, there is also the risk that European objectives both in terms of global challenges and competitiveness take less of a driving role in priority-setting when more international partners are involved. International S&T cooperation policy dialogues and broad consultations should ensure that international joint actions are strategically designed in line with EU interests and agreed with international partners based on mutual interest and common benefit.

What is the EU added value? Openness of the Framework Programme to third countries enhances the EU added value of the Programme itself, allowing EU participants to collaborate with the best minds in the world. The EU can more effectively shape policy agendas when represented as a single voice in multilateral fora and international organisations. The EU has a comparative advantage as compared to single Member States when negotiating bilateral agreements with third countries regarding framework conditions such as mutual openness of funding programmes or issues related to Intellectual Property Rights (IPR) protection. Thanks to the Framework Programme, Member States are enabled to cooperate with several third countries, including countries with which they do not have bilateral agreements. Increasing international cooperation does not go beyond what is necessary to achieve the objectives of the programme.

·Each Association Agreement to the Framework Programme should define the scope, specific terms and conditions of participation, as well as the rules governing the financial contribution of the associated country. These rules should ensure a close approximation between payments and returns.

·The Framework Programme will define which countries will be able to apply for association, what criteria should be used to assess their applications, and what principles should apply for the terms and conditions regarding their participation.

What changes? The Framework Programme will intensify cooperation in line with the strategy for EU international R&I cooperation and the "Open to the World" R&I priority. The programme will extend openness for association, beyond EU enlargement, EEA countries and ENP countries, to include all countries with proven science, technology and innovation capacities to make cooperation and funding of joint projects as smooth as possible. The programme should increasingly invite partners from the rest of the world to join EU efforts as an integral part of initiatives in support of EU actions for sustainable development; it should provide more support for activities that facilitate the collaboration of European researchers with their counterparts worldwide, enable international mobility of researchers and ensure access to research infrastructures globally; and it should extend support to joint and coordinated funding of global industrial research and innovation cooperation. The programme should continue to fund entities from low-mid income countries, and to fund entities from industrialised and emerging economies only if they possess essential competences or facilities. The programme will intensify support to international flagships, partnerships, bilateral and multilateral initiatives and joint programmes and calls, to increase access to researchers, knowledge and resources worldwide and optimise benefits from cooperation.

Some stakeholders also advocate science as a platform for international diplomacy. A few stakeholders noted that EU could adopt legislation to encourage exploitation of research and inno

A predominant view among stakeholders is that cooperation should be strengthened to counter the drop in internationalisation activities and participation rates from third countries that was experienced in Horizon 2020.

What did the other EU institutions say? The Council and the European Parliament have called for strengthening international R&I cooperation in the Framework Programme, including with associated countriesand emerging countries, as soon as possible through concrete actions. The Parliament, in addition, has highlighted the value of science diplomacy. Council Conclusions have also reaffirmed the importance of reciprocity.

What do we have now? Association to the programme is limited to countries geographically close to Europe. Organisations from non-associated third countries can participate in projects in all parts of the programme, except for mono-beneficiary grants, specific close-to-market innovation activities and actions for access to risk finance. Except for a few cases, only participants from low- and middle-income countries are automatically eligible to receive EU funding. EU funding can be exceptionally granted to third-country entities whose participation is deemed essential for carrying out an action.

Why do we need it? International cooperation in R&I is vital for ensuring access to talent, knowledge, know-how, facilities and markets worldwide, for effectively tackling global challenges and for implementing global commitments.

·Reduced gap between science/innovation and society. R&I missions will be easy to communicate, in order to mobilise citizens and end-users in their co-design and co-creation (e.g. through citizen science and user-led innovation). In turn, this increases the relevance of science and innovation for the society and it would stimulate the societal uptake of innovative solutions and leverage business investment.

·Increased impact on global challenges and EU policy priorities. Missions will increase effectiveness in delivering societal impact for end-users and citizens, by prioritising investments and set directions to achieve objectives with societal relevance. Missions will set the direction for the EU regulatory framework, and leverage further public and private sector R&I investments in Europe.

·Improved cross-sectoral and cross-disciplinary cooperation. Missions will require expertise from different sectors and disciplines to come together. For example, climate action requires meaningful collaboration across sectors such as urban planning, construction, energy efficiency in buildings, mobility, behavioural aspects, food, environmental capacity, and in many other areas. The mission-oriented approach will work across clusters to promote system-wide transformation.

What are the risks? The success of missions hinges on the timely and due dialogue with stakeholders, to avoid disengagement or weak interest. Moreover, in the implementation phase, the evaluation and monitoring mechanisms will need to be sophisticated enough to capture the long-term impacts of missions. Finally, the ultimate uptake and roll-out of innovative solutions arising from missions will depend on wider framework conditions – this kind of wider support to uptake can be supported through policy actions in the spirit of the Inovation Principle, or through Innovation Deals.

What is the EU added value? Setting R&I missions at EU level gives them the critical mass necessary to address global challenges. They will help the EU to better deliver on Sustainable Development Goals and its strategic policy priorities. Setting R&I missions at EU level would also facilitate ensuring that the EU regulatory framework fully supports the achievement of such an EU mission, for instance through applying the innovation principle, setting standards at EU level, or through joint public procurement at EU level. Missions can involve end-users and citizens much more closely in EU R&I activities.

At the implementation stage, Mission Boards for each mission will ensure proper involvement of stakeholders and end-users. Mission Boards will be involved in co-designing the missions involving stakeholders and the wider public, providing input to the content of the call for proposals and the evaluation of project proposals and in monitoring missions. A mission manager will be appointed for each mission with the task of ensuring that the mission objectives are reached through a portfolio approach. By involving citizens and stakeholders in the definition, selection and monitoring of missions, a sense of urgency and collective commitment will be created while also ensuring societal ownership of the missions .

Missions will be selected (after the launch of Horizon Europe) according to the following selection criteria:

Different types of missions can be envisaged, for example missions to accelerate progress towards a set technical or societal solution, focusing large investments on a specific target (e.g. accelerate market uptake of post Li-ion energy storage solutions) or missions for transforming an entire social or industrial system within an established timeframe (e.g. transformation of the entire energy system or mobility system in cities). Evidence indicates that a combination of approaches would be most suited to the scale of EU-level missions and the complex challenges which they will address.

What changes? Horizon Europe will introduce a limited number of highly visible R&I missions. Missions will replace and build on the Horizon 2020 Focus Areas. They will be well-defined and self-standing programme parts, as opposed to the Focus Areas. This will more clearly and directly incentivise cross-sectoral and cross-disciplinary cooperation. Clear objectives and rationale will be established at the mission's inception (addressing a specific weakness identified in the focus areas approach) in order to define targets, clear time-bound goals and expected impact. Finally, missions will be more closely co-designed with end-users and citizens, thus prioritising public engagement and involvement and "building upon existing work and prior commitments to bring societal actors together to prioritise R&I activity".

need to engage wider society in identifying the most relevant missions within broader societal challenges.

e scenario. In general, stakeholders consider that tangible missions that underpin the overall political objectives could enhance visibility and create a more engaging narrative of the Framework Programme. There is also a widespread acknowledgement on the

Almost all stakeholders referencing R&I missions clearly supported mission-orientation of Horizon Europe or acknolwedged it as a possible futur

What did the other EU institutions say? All EU Institutions stress the importance of involving citizens more profoundly in the co-design and co-creation of R&I contents to maximise the impact generated by the Framework Programme. The European Parliament recognises the importance of society playing a more active part in defining and addressing the problems, and in jointly putting forward the solutions. The Committee of the Regions is calling for the adoption of a new, complementary approach based on missions and for greater importance of science-society actions. The European Economic and Social Committee calls for increased involvement of Civil Society Organisations in the Framework Programme. The Council Conclusions and the European Research Area and Innovation Committee (ERAC) point to the need to deliver better and continued outreach to society, and call for exploring a mission-oriented approach.

What do we have now? Horizon 2020 featured over 20 Focus Areas in key domains, where priorities cut across different parts of the programme (e.g. blue growth, circular economy, digital security), to concentrate resources and ef