EN Official Journal of the European Union C 65/22

Opinion of the European Economic and Social Committee on the ‘Proposal for a Decision of the European Parliament and of the Council establishing a Competitiveness and Innovation Framework Programme (2007-2013)’

(COM(2005) 121 final — 2005/0050 (COD))

(2006/C 65/03)

On 25 April 2005 the Council decided to consult the European Economic and Social Committee, under Articles 156, 157(3) and 175(1) of the Treaty establishing the European Community, on the abovementioned proposal.

The Section for the Single Market, Production and Consumption, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 20 October 2005. The rapporteur was Mr Welschke, the co-rapporteur Ms Fusco.

At its 422nd plenary session, held on 14 and 15 December 2005 (meeting of 14 December 2005), the European Economic and Social Committee adopted the following opinion by 125 votes to two with one abstention.

1. Preliminary remarks

1.1 Many growth, employment and innovation indicators suggest that the European Union has been falling behind in global competition over the past few years and is continuing to do so. Bringing down unemployment, creating new jobs and promoting the economic growth required for that purpose on a sustainable basis is becoming the EU's biggest economic and social challenge.

1.2 Businesses have a vital role to play in meeting these challenges. 98 % of businesses in Europe are small and medium-sized enterprises (SMEs). They provide 55 % of private-sector jobs. In terms of production processes, products and services SMEs have considerable innovative potential.

1.3 Many businesses take advantage of the benefits of the European single market. Often, however, because of remaining restrictions, limited staff and financial capacity and lack of information, they are unable to make full use of the single market's potential. That can be remedied by the consistent implementation of the Lisbon strategy, completion of the single market and further market opening, better regulation, and support programmes that generate European added value.

1.4 Modern administrations and efficient public services can also do much to promote competitiveness and innovation in Europe. Cross-border twinning between authorities at all levels can improve the administrative cooperation that is becoming increasingly necessary, facilitate exchanges of experience and exploit examples of best practice for the benefit of all.

2. Summary of the Commission document

2.1 The Competitiveness and Innovation Framework Programme (CIP), which is set to run from 2007 to 2013, is intended to help implement the refocused Lisbon strategy and the Community strategy for sustainable development.

2.2 The CIP marks the continuation of a range of existing Community support programmes in various policy areas and presents them as a package with a coherent legal basis. The Commission is proposing a ‘financial reference amount’ of EUR 4. 212,6 million.

2.3 The CIP is open to all EU Member States, EU candidate countries, countries of the European Economic Area (EEA) and countries of the western Balkans. Other non-EU countries may also take part if this is provided for in bilateral agreements.

2.4 The CIP is designed to foster competitiveness of enterprises, and particularly SMEs; to promote innovation and make it market-viable; to accelerate the development of the information society; and to promote energy efficiency and the use of new and renewable energy sources.

2.5 Underpinned by Articles 156, 157(3) and 175(1) of the Treaty establishing the European Community, the proposal seeks to establish a significant and coherent legal basis for specific Community support programmes and relevant parts of other Community programmes in fields critical to boosting European productivity, innovation and sustainable growth, while at the same time addressing complementary environmental concerns. The CIP is made up of three specific sub-programmes.

2.6 The purpose of the Entrepreneurship and Innovation programme is to create a framework for entrepreneurship, innovation and competitiveness. It targets businesses in all economic sectors, whether hi-tech or traditional. The aim is to improve access to finance for SME start-ups and growth. Other key elements include cooperation between businesses, the fostering of innovation and the promotion of environmental technologies. The budgetary allocation for this programme is EUR 2,631 million.

2.7 The ICT policy support programme is designed to promote the adoption of information and communication technologies in businesses, administrations and public-sector services. The proposed measures flesh out and support the new EU initiative i2010, which in the years ahead is set to provide the framework for the establishment of a single European information area and the strengthening of the internal market in information products and services. The budgetary allocation for this programme is EUR 801.6 million.

2.8 The Intelligent Energy — Europe programme seeks to support sustainable development as it relates to energy; to improve security of supply and energy efficiency; to reduce dependence on energy imports; and to increase renewable energy's share of gross inland consumption to 12 %. Priorities include projects to promote and disseminate sustainable energy technologies; improved administrative structures and closer networking; and action to raise overall awareness of the need for sustainable energy use. The Intelligent Energy Executive Agency set up by the Commission is to remain in place. The budgetary allocation for this programme is EUR 780 million.

2.9 The CIP will operate on the basis of annual work programmes. The Commission intends to ensure implementation of these programmes. Management committees are to provide back-up for the measures at Member State level and ensure the coherence of national activities.

3. General comments

3.1 The CIP proposal is wide-ranging and covers a broad spectrum of policies and programmes. The comments here relate only to those aspects which the Committee considers to be of particular importance or where it would like to see additional considerations borne in mind.

3.2 The Committee welcomes the CIP as an important step towards establishing synergies to promote business competitiveness and innovation and to foster sustainable development. The proposed measures and tools can play a key part in strengthening social cohesion, promoting sustainable economic development and achieving the Lisbon strategy's growth and employment objectives. This is why the Commission also highlights the CIP as an important element of Community policy in its proposed action plan to revitalise the Lisbon strategy at Community level (COM(2005) 330).

3.3 The 2004 Kok report refers to the key factors determining the competitiveness of the European economy. The report rightly recommended that measures be taken to develop the knowledge society further, complete the single market, improve the business climate, modernise the labour market (not least through strategies for lifelong leaning and active ageing) and promote environmental sustainability. The Committee feels that the onus is on the Member States in particular to do everything they can to boost businesses competitiveness by establishing the requisite conditions, and considers the EU support programmes an important and effective adjunct in this connection. In addition to the CIP, the framework research programme, the lifelong learning strategy and the Structural Funds are of particular importance.

3.4 Businesses boost their innovative capacity not only by exploiting technological progress. Innovation is also furthered by making the entrepreneurial spirit a more established fixture in each country's society and culture and expanding managerial knowledge, as well as by responsible business management and the pursuit of cross-border activities. When setting goals for the CIP, it would be a mistake to interpret innovation too narrowly, thereby squandering opportunities for more growth, employment and social cohesion. Businesses are key players in the process of innovation, and the social partners should be involved appropriately in implementing that process.

3.5 Innovation is born in people's minds. A high level of education and training is essential if there is to be a sustained increase in innovative capacity in the European Union. It is a duty equally incumbent on employers, workers, governments, universities, schools and all other stakeholders to raise the innovative potential of our societies still further. Cross-border projects are a good way to build on national efforts to promote the knowledge society. The Committee is pleased that the EU is targeting education and training, not least through Community schemes such as Socrates (education in general), Tempus (university studies) and Leonardo da Vinci (vocational training). The integrated action programme for education, training and lifelong learning, which is set to run from 2007 to 2013, can also play a key part in boosting businesses' innovative capacity and making the CIP a success.

3.6 The Committee welcomes the Commission's intention to boost businesses' innovative capacity and competitiveness through better regulation and a systematic review of existing legislation to check for disproportionate burdens. It is particularly important that any new rules be subject to an effective impact assessment. When conducting this impact assessment, the Commission should work closely with the Competitiveness Council and the European Parliament.

3.7 The Committee shares the Commission's view that horizontal and coordinating EU measures can generate major added value. It will be particularly important to provide businesses with information that is as practical as possible and to give them easy access to CIP actions and tools.

3.8 The Committee backs the Commission's aim of using the CIP to promote traditional and not only hi-tech sectors. Such traditional sectors in particular have the potential to play an even greater role in boosting employment and strengthening social cohesion if they are given the opportunity to become more competitive and innovative. There is also considerable innovative potential in the services and logistics sectors.

3.9 The Committee would ask the Commission not to be too restrictive in identifying the framework programme's target groups, so as to secure maximum added value across as many different regions and sectors as possible. Cooperatives, consortia, mutuals, innovative start-ups and microenterprises can also help boost competitiveness and innovative capacity within the EU. Cooperatives, for instance, make it possible to utilise size-related advantages which have a favourable impact on market access (including participation in larger invitations to tender), market position, the development of management potential, further training and research capacity. A key condition for access to CIP projects should be the extent to which the target groups develop feasible ideas that help boost competitiveness and innovation and warrant support. Foundations, associations and chambers of industry and commerce play a key role as intermediaries with regard to the framework programme.

3.10 Given the budgetary constraints in the Member States and at European level, CIP funding is limited. The Committee expects the programme to be given adequate funding under the next financial perspective, on which a decision is still pending. At the same time, it is essential to focus available funding as efficiently as possible on the target groups and in a way that is best suited to achieving the desired outcome. The Commission should examine the extent to which funding currently earmarked for managing the programme can be used for projects.

3.11 The Committee welcomes the Commission's intention to evaluate the experience it has gained with the existing programmes, to correct any shortcomings and, when implementing the CIP, to draw on examples of best practice. Benchmarking and monitoring that is readily understandable to all stakeholders will help make the CIP a success. Any findings that could help make the CIP as effective as possible should be incorporated into the annual planning of work at an early stage. The Commission and the players involved in implementing the programmes should take a critical look at the mid-term review to see if any changes need to be made, with due regard to the experiences of businesses and the other target groups. However, the certainty with which all project stakeholders must be able to plan ahead should not be undermined at any time.

3.12 The Committee feels it of the utmost importance that Member States take on board the concept of ‘additionality’. Member States are urged to maintain their national support at the planned levels irrespective of financial contributions from the EU. As the Committee see it, Member States are committed the agreed objective of devoting 3 % of GDP to research and development. CIP implementation must not result in any slackening of Member States' efforts to achieve this objective.

3.13 The Commission is right to point to the need for close links between the CIP's tools and measures and other EU programmes and initiatives. Links with the 7th Framework Research Programme, the lifelong learning strategy and structural policy programmes are of particular importance. The Commission should take steps to ensure that all the directorates-general involved pursue coherent objectives. Transparency must be guaranteed for the activities and decisions of all the stakeholder bodies. Horizontal synergies and vertical synergies between the EU and the Member States and between business, science and the public authorities will only be fully attainable if the substantive and organisational priorities of these programmes are well coordinated.

4. Specific comments

4.1 When implementing the CIP, the target groups must have ready access to the proposed programmes. This was not always fully guaranteed in the past. Funding must be allocated efficiently and on the basis of practical need, with as few bureaucratic hurdles as possible (inter alia as regards reporting and documentation).

4.2 The Commission should administer the CIP in an efficient and user-friendly way by adopting a coherent approach. All players involved in implementing the CIP rely both on long-term certainty to plan ahead and on transparency. It would be helpful to use an external agency to handle the administrative side of the programmes if administrative procedures could be considerably simplified and costs cut as a result.

4.3 The Commission's SME observatory should play an even more active back-up role with regard to the CIP's implementation. This could further improve the exchange of knowledge and experience between the Member States, between businesses, and between industry, science and the public authorities. The SME observatory reports should be examined with a view to their practicability and relevance to the target groups. It would be helpful to define the observatory's remit in such a way that the input from all target groups (as defined in point 3.9) is clearly brought to bear.

4.4 The Entrepreneurship and Innovation programme

4.4.1 For SMEs and innovative micro-enterprises, access to capital remains very limited — despite the fact that this problem has been well known for many years. Action is needed on this front without delay. The financial instruments proposed under this programme are of crucial importance for the success of European enterprise policy. The Committee trusts that they will be able to do much to move things forward and generate leverage.

4.4.2 The Committee advocates allocating resources to appropriate financial intermediaries in order to reduce financing costs (including staffing and administrative costs) and to lower financing risks. The High Growth and Innovative SME Facility (GIF), the SME Guarantee Facility (SMEG) and the Capacity Building Scheme (CBS) are designed to help make it easier for businesses to finance loans and access risk capital. Providing loans to innovation-driven SMEs and micro-enterprises, especially in their start-up and growth phase, will boost their growth and employment potential. Small and micro loans should also be made available for appropriate projects.

4.4.3 The Committee thinks that building up and expanding cross-border activities should also be considered as an integral part of European policy and a key SME strategy to boost competitiveness and innovation. All the actions and tools provided for in the programme should serve this objective. On this front, the Commission should provide businesses with active support through ‘cooperation exchanges’, practical information and other appropriate measures.

4.4.4 The complexity of European aid arrangements and the legal framework involved makes it essential to provide businesses and other target groups with tailor-made information and advice. The best means of achieving that is through a European-wide network of information channels working successfully together. In this way, it is possible to heighten awareness still further among the public and among businesses of the added value of European programmes and projects. This also ties in, among other things, with the new EU communication strategy.

4.4.5 The Committee is keen that the planned invitation to tender for network partners to provide support services for businesses and innovation should be subject to transparent rules and be open to all regional and sectoral organisations, which, by virtue of their structure and the services they offer, can respond directly to business concerns. The Commission is advised to give individual consideration to the credentials of existing Euro Info Centres (EIC), the Innovation Relay Centres (IRC) and the Business Innovation Centres (BIC).

4.5 The ICT policy support programme

4.5.1 The Committee welcomes the line taken by this programme. This sector is a driving force behind the increased productivity that is necessary in all economic fields. The proposed measures may be expected to generate considerable European added value.

4.5.2 Promoting the European information society will help foster sustainable economic development, boost European social integration and improve people's quality of life. When implementing this programme, it is particularly important to ensure that all companies have access, including those in traditional sectors.

4.5.3 Targeted projects, consolidated measures and the establishment and expansion of cross-border networks and clusters can boost technology transfer and the application of innovative, market-based ICT solutions. The Committee is pleased that joint technical specifications and action plans are to be drawn up to facilitate public procurement in this sector.

4.5.4 In terms of structure and planning, the ICT policy support programme should be coordinated very closely with the initiative i2010 — A European Information Society for growth and employment (COM (2005) 229). The Committee is working on a separate opinion on the i2010 initiative.

4.6 The Intelligent Energy — Europe programme

4.6.1 The Committee welcomes the scope of the proposed programme. Energy efficiency, the promotion of renewables and the diversification of energy supply are vital for sustainable economic development and environmental protection in Europe. The programme should help harness the energy sector's full innovative potential, not least in the fields of systems engineering and energy conversion.

4.6.2 Market-oriented technologies and competitive products will be crucial in determining whether the programme is able to achieve its objectives. The Committee is therefore pleased at the support to be given to projects that make it easier to convert innovation into marketable products. However, such activities can only be useful early on in the innovation process. Basically, the only way to develop the best technologies and competitive products or services is through l competition.

4.6.3 The Committee welcomes the Commission's plan to promote the sustainable use of energy resources and to disseminate information to that end. These activities should be aimed not only at specialist groups but also at the wider public. The ongoing Sustainable energy for Europe campaign has an important contribution to make in this regard. It is designed to spread examples of best practice and further raise public awareness of the need to use energy efficiently and protect the environment. The Committee trusts that this campaign and the Intelligent Energy-Europe programme usefully complement each other.

5. Final recommendations

5.1 The Committee would encourage the Commission to set out the aims and structure of the CIP even more clearly. A good example is the list of planned implementing measures in CIP Article 6. The individual programmes and tools could be presented in a similarly systematic fashion, thereby making the CIP more readily understandable for the target groups. Civil society organisations should also be involved in this process.

5.2 The Committee expects that consolidating a range of programmes and individual measures will produce added value. That will only succeed through optimum coordination, consistency between the individual measures taken, and coordination with other relevant EU schemes. The onus here is on the Commission and the managing authorities in particular.

5.3 The Committee is pleased that the CIP is based on the EU's key economic, social, environmental and energy policy objectives. In implementing the CIP, it will be important to structure the annual work programmes in a practical way that is of clear relevance to the target groups, not least innovative businesses. That can only be achieved through the appropriate involvement of the target groups even at the planning stage.

5.4 For the purposes of improved implementation and policy continuity, the Committee calls on the Commission to clarify the links between the CIP and other related existing and future initiatives, notably the 2000 European Charter for Small Enterprises, the 2003 Entrepreneurship in Europe Action Plan and the Communication that has been announced on SME policy for the years ahead. This would be of great value to business representatives and policy makers at national, regional and local level.

5.5 The Committee will be closely monitoring CIP implementation. It reserves the right to submit fresh recommendations in the light of experience gained or as part of the mid-term review.