EN Official Journal of the European Union C 34/24

Opinion of the European Economic and Social Committee on ‘Role and effect of JTIs and PPPs in implementing Horizon 2020 for sustainable industrial change’

(own-initiative opinion)

(2017/C 034/04)

Rapporteur: Mr Antonello PEZZINI Co-rapporteur: Mr Enrico GIBELLIERI

Plenary Assembly decision 21/01/2016 Legal basis Rule 29(2) of the Rules of Procedure Own-initiative opinion Body responsible Consultative Commission on Industrial Change (CCMI) Adopted in commission 28/09/2016 Adopted at plenary 19/10/2016 Plenary session No 520 Outcome of vote (for/against/abstentions) 212/1/1

1. Conclusions and Recommendations

1.1. The EESC considers that public-private partnerships (1) in research and innovation are a formula for excellence and a powerful tool to address the main issues affecting Europe’s competitiveness, and have the capacity to respond effectively to major socioeconomic, employment and environmental sustainability challenges.

1.2. R&I is not a one-way, linear process. The EESC believes that if the technological, environmental and social dimensions are to be fully taken on board in Horizon 2020 (H2020) public-private partnerships, a new approach is needed, based on greater transparency concerning the results and socioeconomic impact achieved.

1.3. The EESC is of the view that partnerships should adopt a broader vision of innovation, taking account of innovation in services, social innovations and the necessary upgrading of SMEs and the social economy so they can be brought in more effectively at every stage of demonstrating and developing applications.

1.4. The social legitimacy of innovation should be fostered in JTIs and cPPPs by increasing the involvement of the weaker stakeholders (trade unions, SMEs and NGOs) in the overall direction and strategic programming of R&I work, in keeping with the provisions of Regulation (EC) No 2012/1025 on standardisation, particularly where strategies and the selection of projects and their social value are concerned.

1.5. The EESC considers that PPPs need to be more market-driven, focusing attention on aspects such as interoperability, standardisation, harmonisation and transnational technology transfer, so that results are sustainable at regional level and can be disseminated across the EU.

1.6. The EESC urges that JTIs and cPPPs be put in place in order to: — boost coherence with other partnerships and initiatives on a scene increasingly crowded with concurrent policies; — extend the value chain with a sharper focus on the market and broader participation from the demand side in terms of both numbers of users in the countries involved and new actors throughout the value chain, making use of the synergies generated by interoperability with other initiatives; — give greater prominence to multidisciplinary approaches, bringing in new stakeholder communities, especially at local, grassroots level; — JTIs and cPPPs should encourage SMEs to participate actively in the innovation process at an earlier phase, so that they gradually develop their own R & D potential.

1.7. The EESC recommends that JTIs and cPPPs launch new innovative measures to boost interaction with leading investors by devising innovative business measures and progressive occupational profiles, by fostering forums that include the social partners, and by targeting support on the speedy exploitation of post-project markets.

1.8. The EESC attaches importance to more robust monitoring of JTI and cPPP capacity and coherence of action using more flexible tools that meet market requirements; and to more dynamic approaches to ensuring quality, including a full set of Key Dynamic Performance Indicators (KDPI), comparable across different initiatives, so that an annual synoptic assessment of all JTIs and cPPPs can be submitted to the European and national institutions and to European taxpayers.

1.9. The EESC calls for greater efforts to ensure internal coherence between the objectives and priorities of the EU’s FP9 and industry’s R&I strategies reflected in JTIs and cPPPs in coordination with all other forms of partnership for innovation to be found in other regional national and European policies.

1.10. The EESC proposes setting up a European Innovation Council with strong representation of industry and society, with pan-European infrastructure networks to support innovation, as a useful instrument for closer coordination of initiatives, not least with the courses of action of other European and international R&I organisations, and with comparable international partnerships (2).

1.11. The EESC urges regional and local authorities to give high priority to relevant JTI and cPPP innovation when planning and implementing measures such as smart specialisation strategies, cohesion policy operational and cooperation programmes, research and innovation programmes and projects to implement climate change adaptation plans.

1.12. The EESC is convinced that strategic, smart and timely investment in appropriate, environmental-friendly innovative solutions and in green infrastructure provide a launchpad for a sound and effective reindustrialisation process based on research and innovation and on their market applications.

1.13. The EESC draws attention to the need to ‘align research and innovation instruments and agendas in Europe’ with those under the forthcoming FP in order to ‘ensure continued investment in those sectors where Europe has a leading position in the world’ (3), based on a stable outlook, which depends on regular efficiency checks.

1.14. The EESC calls upon the Commission, the European Parliament and the Council to work together to hold an interinstitutional conference as soon as possible on the role of public-private technology partnerships in European reindustrialisation, with a view to the next R&I Framework Programme after 2020.

2. JTIs and cPPPs for research and innovation

2.1. Joint Technology Initiatives (JTIs) are public-private partnerships in key areas of European R&I established under Decision No 1982/2006/EC of the European Parliament and of the Council (4). As far back as the 7th Framework Programme (FP7) onwards, traditional instruments had proved unable to increase and improve the European economy’s competitiveness. Industrial partnerships are geared to R&I and have clearly identified industrial market objectives, better financial and human resource concentration and sufficient leveraging to provide a decisive push to accelerate the transformation of scientific and technological breakthroughs into market innovations.

2.2. The current H2020 FP has introduced substantial innovations with respect to structure, leaving more space for influence and synergies with industry and Member States through various forms of PPP to support sectors that: — create high-quality jobs; — respond better to the need for sustainable growth and competitiveness; — have a strong, innovative and rapid impact on the development of European businesses, especially small enterprises and start-ups; — foster new occupational profiles in a rapidly changing world; — can develop local and regional initiatives.

2.3. A range of initiatives have been set up to support different types of partnerships that are either geared to the industrial sector, supported by the scientific community, or steered by public authorities.

2.4. The EU institutions have given strong support to the European Technology Platforms (ETPs) set up at the initiative of industries in order to establish a bottom-up process for defining common strategic objectives and priorities.

2.5. The current 38 ETPs — plus three cross-cutting initiatives — have a strategy, mobilisation and dissemination function. In order to fulfil their role, their main activities cover: — developing strategic R&I programmes including technology roadmaps and implementation plans; — direct participation of industry in FP initiatives and cooperating with national networks; — fostering networking opportunities along the value chain to address cross-sectoral challenges and promote more open models of innovation; — promoting opportunities for international cooperation, as channels for the programming and implementation of H2020; and — launching and consolidating public-private partnerships within the FP and creating JTI ventures for the joint management of public and private initiatives.

2.6. JTIs bring together the European Commission, Member States, academia and industry around scientific and technological sectors of high value to society, mainly by supporting cooperative research and innovation in Europe where common technological and economic objectives have been clearly identified.

2.7. The main objective of JTIs is to increase the impact of public and private investment in research activities and consolidate the European research and innovation area by helping to foster cutting-edge scientific and technological innovation in the context of the Europe 2020 strategy.

2.8. The idea behind JTIs is to be open to new participants and be able to communicate with a wide public, and to have a leveraging effect, with European economic contributions, in a clear structure that can encourage industry, SMEs, the social economy and Member States to increase their participation and their investment.

2.9. JTIs initially emerged from the work of the European Technology Platforms , on which the EESC drew up an own-initiative opinion (5), and which were able to define common, shared views on sectoral development, identifying problems for resolution.

2.10. The criteria for identifying the sectors for which JTIs need to be set up have been defined as follows: the strategic relevance of the sector and clear objectives; high European added value; capacity to leverage substantial, long-term investment; and appropriate and quick responses to the growth, sustainability and climate challenges.

2.11. In order to determine levels of innovation it is not sufficient to consider only the funds invested, we must also have economic performance and market indicators on this expenditure. cPPPs are required to submit annual reports on the activities undertaken, the European added value gained in real terms, the effectiveness of innovative financial leverage instruments and the qualitative and quantitative attainment of socioeconomic objectives.

2.12. The purpose of this opinion is to highlight the influence that industry’s direct participation in R&I, funded by the EU through institutional JTIs and cPPPs, has on industrial policy and industrial change and propose improvements.

3. Prospects for developing JTIs and cPPPs to secure sustainable industrial change

3.1. The EU’s R&I framework programmes have had difficulty in addressing the real needs of European industry, which often risk being overlooked during the preparation of the general objectives and in the work programmes, thereby consolidating the European paradox, which can be summed up as Europe’s high science output and low capacity to transform this output into market innovation, as compared with its competitors.

3.2. The work and action of ETPs have gradually altered this approach. European industry has managed to set targets and priorities for the major manufacturing sectors, which have largely been incorporated into the structure and objectives of H2020.

3.3. There has been a shift from a top-down to a bottom-up approach spanning the whole innovation cycle and aiming to achieve higher Technology Readiness Levels (TRLs) in order to develop new production technologies, new products, and new skills.

3.4. JTIs and cPPPs should be key tools for ensuring that industry plays an active role in multiannual programming and in implementing the H2020 Community measures. The private sector is committed to investing some EUR 10 billion in Joint Technology Initiatives to stimulate innovation in seven sectors, helping to reverse the decline in the European manufacturing industry’s role.

4. Comments and observations on upcoming challenges for the Union

4.1. The Committee is firmly convinced that the various forms of R&I partnerships are a formula for excellence with regard to development and a powerful tool to address the main issues affecting the EU’s competitiveness.

4.2. The Committee considers that JTIs and cPPPs are positive experiences for the creation of EU-wide partnerships, if they can provide a multiannual framework for combining EU and national resources with private resources, know-how and research and innovation capacities in order to share knowledge and disseminate key innovations in sectors that are crucial to success on the global market.

4.3. In the EESC’s view JTIs and cPPPs must meet their responsibilities effectively in terms of: — economic results; — optimisation of the sector’s added economic-technological-innovative value; — capacity to bring competitive technologies to the market; — increased financial leverage effect; — greater involvement of SMEs, the social economy and end users; — flexibility and rapidity in transferring innovative outcomes; — networking; — a role clearly geared to reindustrialising the European economy; — environmental sustainability and climate challenges; — sustainable carbon-free product and process design; — social and employment challenges; — active involvement of local areas. The development of new technologies and innovation on the part of industry must lead to high-quality training for human resources and new, advanced occupational skills, with closer and more systematic involvement of the social partners and local authorities in defining and applying the sector’s broad strategies.

4.4. According to the most recent reports published by the EC in 2016 (6), initial survey results (7) show that while H2020 seems to respond adequately to the need to open up to PPPs, these approaches do not always fully meet the requirements for openness and stimulation to bring in newcomers. There is no general agreement on their capacity to support jobs, growth, investment and rapid development on the digital single market, although views are more positive regarding the capacity to meet energy and climate changes.

4.5. Similarly, the ability of JTIs and cPPPs to interact successfully with other EU financial instruments such as the European Structural and Investment Funds (ESIF) and the European Fund for Strategic Investments (EFSI) is perceived as very limited, although some JTIs have signed relevant protocols. It is important in the EESC’s view that synergies be generated to promote the involvement of regional and local actors, facilitating alignment with common operating standards.

4.6. Given that the rate of rejection of project proposals appears to be running at 7 to 1 in H2020 — a higher rate than under FP7 where it was 5 to 1 — it would seem advisable to rebalance the pool of independent expert evaluators to whom project applications are submitted. More than 50 % of project applications in the first H2020 cPPP calls for proposals were from industry, but at the same time more than half the expert evaluators had an academic background compared to just over one fifth with private sector expertise.

4.7. The tables available for JTIs and cPPPs reveal significant positive features for the sustainability and competitiveness of European industry. Activities are formulated by private partners through a broad and open system of consultations on preparing work programmes and the associated calls for proposals in response to, and reflecting, industry’s real needs, with high mobilisation rates and a powerful leverage effect of 3 to 9.

4.8. With regard to the partial table of JTI calls in 2014, this type of partnership should provide greater clarity concerning its institutional status and levels of governance, in response to European taxpayers and the EU institutions.

4.9. The EESC believes that JTIs and cPPPs, including the tools for opening up and participatory access, must meet urgent requirements in line with a strong growth policy, including the full contribution of the social partners.

4.10. JTIs and cPPPs are in fact competing in a global race to be the frontrunners in the development and marketing of the new technologies of the future. They therefore require the development and implementation of clear industrial strategy objectives: — flexibility; — transparent and efficient evaluation systems; — appropriate criteria for scientific/technological excellence and industrial relevance; — compliance with the principles of sound financial management; — capacity to involve SMEs effectively; — rapid development of start-ups/spin-outs.

4.11. The EESC emphasises the need to involve all stakeholders in Europe’s key industrial sectors — spanning all types of goods, sizes of enterprises, human resources and their training, development and representatives — in order to improve the integration of the social aspects and SMEs and the stakeholder participation in R&I projects.

4.12. The EESC therefore considers it important to introduce appropriate social and training instruments to be important, and to use key performance dynamic indicators (KPDI) to monitor not only patents and scientific publications but also, and most importantly, the evolving impact on social and economic aspects and on training for new occupational profiles.

4.13. The EESC sees mobilising private sector investment, successfully building on public funding and with a powerful leverage effect, as a key factor in reaching the Europe 2020 growth and employment targets, and, in particular, the 3 % investment in R&I.

4.14. Innovation activities with higher TRLs should continue to benefit from investment support plans for industrial infrastructure and plants, which are based on a stable outlook and subject to regular efficiency checks, along the lines of Commission President Juncker’s European Fund for Strategic Investments (EFSI).

4.15. The EESC believes that members of industry should be more involved in R&I programmes and the programme committees, which are crucial to the development of broad-based industrial involvement in each Member State.

4.16. Lastly, the EESC considers that the Member States and the EC should review and harmonise — where possible and appropriate — the regulatory framework for industrial sectors, including JTIs and cPPPs, which are required to maximise added value in terms of environmental, economic, social and employment benefits, smart business models and solutions in integrated territories, new skills and social innovations (8).

4.17. The EESC considers that the development of different types of R&I partnerships under a wide range of EU policies, and not only under H2020, should be marked by greater coherence and better coordination in R&I actions, as part of an overall EU view encompassing the internal and external dimensions. Setting up a European Innovation Council with strong representation of industry and society, flanked by pan-European infrastructure networks to support innovation, could help foster a more efficient framework.

4.18. With a view to FP9 (9), the EESC advocates devising a transparent framework for the qualitative and quantitative evaluation of the success or failure, in economic, innovative, social and environmental terms, of the work of current JTIs and cPPPs. This should involve industrial end users, the social partners, SME representatives and civil society in evaluating strategic priorities and reshaping the future partnerships on which efforts should focus as 2030 approaches.

Brussels, 19 October 2016. The President of the European Economic and Social Committee Georges DASSIS

(1) There are two categories of public-private partnerships (PPPs): JTIs are Joint Technology Initiatives under Article 187 TFEU, with a joint undertaking regulation; cPPPs are contractual joint initiatives under Horizon 2020, with memoranda of understanding.

(2) See European Research Area & Innovation Committee, Strategic Forum for International S&T Cooperation, Brussels, February 2015 — ERAC-SFIC 1353/15.

(3) See COM(2016) 5 final: ‘A number of JTIs have signed Memoranda of Understanding with European Regional Development Funds managing authorities setting up a framework for structured cooperation’.

(4) OJ L 412, 30.12.2006, p. 1.

(5) OJ C 299, 4.10.2012, p. 12.

(6) See SWD(2016) 123 final, April 2016.

(7) A fuller examination will be possible following publication of the interim report in 2017.

(8) See for example the arrangements in place in some Member States, under which industrial sector partnerships can call directly on the public authorities to see if they can remove technical and legal obstacles or barriers hampering the rapid translation of technological discoveries into market innovations.

(9) See opinion INT/792 — ‘Mid-term evaluation of Horizon 2020’ (see page 66 of the present Official Journal).