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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(82)287 final
Brussels,25thMay1982
TOWARDS AEUROPEAN STRATEGIC PROGRAMME FORRESEARCHeINFORMATIONTECHNOLOGIESmtheCommission totheCouncil)
COM(82)287final

-1-
TowardsaEuropeanStrategicProgramme
forResearchandDevelopmentinInformationTechnologies
A.INTRODUCTION
1.Concurrently ,withthepresenteconomiccrisis,Europeis
suffering fromdecliningcompetitiveness initsindustry.This
hasresultedinanincreasinglossofmarketsandinaconsequent
riseinunemployment .Increasingcompetition fromEurope'smajor
industrialcompetitorsisbeingexperienced evenmoreinthehigh
technologyindustrieswhicharekeytoEurope'sfuturegrowth.
2.Itisurgenttoreversethisunfavourable trend.TheCommission
hasgivenpriority-inthecontextofthe30thMayMandate-to
adaptingthewholerangeofCommunitypoliciestorespondtothe
presentsituationandtocontributetosolutions .
3.Information technologies affecttheentirefabricoftheeconomy.
Theirrapidapplication offersthekeytoincreased
competitiveness invirtuallyallmainsectorsbothin
manufacturing industryandintheservicesectors.
4.Notonlyisinformation technologyakeytocompetitiveness ,but
itisalsoamajorgrowthsector.Theworldmarketforinformation
technologyproductsisgrowingat10%annually-eveninthe
presentrecession.Annualworldsalesareperhaps100billionECU
and30%ofthismarketiswithinEurope.
5.TheCommissionhasrecognisedtheimportanceofincreasedefforts
intheinformation technologysectorasbeingamajorcomponentof
anyindustrialorresearchstrategy.Forexample,theCommission's
Conmunication oncommunityIndustryStrategy(1)(whichhighlights
theneedtopromotehigh-technology high-skillactivities),the
Communication onScientific andTechnicalResearch (2)(which
drawsattentiontotheurgentneedtoimplementaCommunity Rand
Dprogrammeininformationtechnologies )andtheCommunication on
IndustrialInnovation (3).
(1)ACommunityStrategytodevelopEuropeanIndustry,COM(81)639
(2)ScientificandTechnicalResearchintheEurppeanCommunity,
proposalsforthe1980s–COM(81)574
(3)Apolicyforindustrialinnovation–strategiclinesofa
Communityapproach,COM(81)620.

-2-
B.CHARACTERISTICS OFTHEINFORMATION TECHNOLOGY SECTOR(I.T.)
6.Adynamic,fast-moving hightechnologysector,theI.T.industry,
byrapidcontinuinggenerationofnewadvancedtechnologyproducts
isnowakeyfactorinpromotingeconomicandsocialdevelopment .
Thisrateoftechnological changeissogreatthataroundhalfthe
productsthatareonthemarkettodaydidnotexistthreeyears
ago.IntheI.T.sector,technologyisthekeytocompetitiveness .
7.Thisrateofchangeshowsnosignofslowingdown.All
technological indicators showthatthistrendwillcontinuebeyond
theforeseeable future.Newmicroelectronic technologies are
makingpossibleincreasesincircuitspeedandchipdensitiesthat
willreduceevenfurtherthecostofmemorydevicesandsoasto
produceevermorecosteffectiveandwidelyacceptableproductsin
theyearsahead.
8.Acontinuously growingrangeofI.T.productsisspreadinginto
everyaspectofdailylifebringingtoallsectorsofcommerceand
industryanimmediateandstrikingimprovement inefficiency and
productivity .Thisisthekeytotheprofitable competitivity
neededtocapturemarketsandcreatewealth.
9.Also,inanindustrywhichismovingatthatpace,investments are
extremelyheavy:infact,theI.T.industryhasbecomethe
"heaviest"industrywheretheratioofinvestmenttoturnoveris
nowhigherthananyotherindustry.
Reasons :
-rapidobsolescence
-thenecessitytopursueseveralR&Dapproachesinparallel,
sometimeswellintothedevelopment stage,astechnology
predictions areverydifficultinsuchafastmoving
environment .
10.TheI.T.industryisatpresentdominatedbytheU.S.A..This
positionissupported bycloselinksbetweenindustryand
universities (cf.Stanford;MIT),aswellasthescaleandnature
ofDepartmentofDefensesponsoredprogrammessuchasVHSIC(Very
HighSpeedIntegratedCircuits).
TheU.S.positionisnowbeingseriouslychallenged byJapan.The
Japaneseemployeffective ,co-ordinated industrialstrategies
basedongovernment sponsoredindustrialresearch.Thelatest
exampleisthefifth-generation computertechnology programme .

-3-
Any European attempt tomatch competitive developments inthese
countries requires expenditure onaconcerted basis atleast ona
comparable scale (seeSection I.below .)
C. THE EUROPEAN INFORMATION TECHNOLOGY INDUSTRIES
11.Despite certain strengths ineach country ,during the past three
years the situation of the European Information Technology
industries has worsened .The financial position ofmost ofthe
companies isweak compared with their Japanese and American
competitors ,andtheir information technology products are notyet
making amajor contribution totheir profitability .
12.The overall balance oftrade for Europe inthe I.T. Sector is
negative .Studies show that there isalso anegative balance in
patents ,which isevidence that European industry islosing the
race tocreate the technology base .
13.Without this technology base the European I.T. industry is
increasingly dependent onforeign technology .However ,this
technology comes from companies who are its owncompetitors .Inan
area where success depends onhaving atechnical lead ,the
European industry frequently lags inthe introduction ofthe
latest technologies because itdoes not have access tothem at
source .
14.The result ofthis weakness intechnology exploitation isthat
only 40% ofthe European domestic market and 10% ofthe world
market is held byEuropean industry itself .
15. Inseveral key areas foreign competition has strengthened its
position :
- inmicroelectronic components ,both manufacture and design
ofintegrated circuits isdominated bytheJapanese andUSA
inmainframe computers IBM continues tobedominant ,the
turnover ofIBM Europe exceeding that ofthe ten largest
European companies together
- insmaller computers themain company successes have been in
the USA

-4-
- inconsumer electronics such asTVpicture tubes ,TV
receivers ,audio equipment and electronic games theJapanese
dominate world markets and European companies have suffered
noticeably
- intelecommunications noEuropean company approaches the
strength ofATT ,and the Japanese manufacturers pose an
increasing threat with the speed totheir introduction of
new technology .
16.European industry therefore finds itself inaposition where not
only is the domestic European market characterised by
fragmentation perpetuated by national standards or local
variations of international standards ,with the result of
increased costs and lower competitivity inexport markets ,but a
situation inJapan and the USA of increasing rate of new
technology creation .
17.Most of the major European companies are therefore at a
crossroads .Either they must increasingly rely onimported basic
technology with the consequent risks ofvulnerability toembargo ,
orthey must opt out ofthe race tobeinthe forefront ofhigh
technology and fall back onlower technology products .However ,
many oftheworld 'slargest growth markets are inhigh technology ,
and Europe cannot afford tosurrender these since they are toa
considerable extent its own domestic market .
D. TOWA RDS AEUROPEAN RESPONSE
18.Europe must create along-term strategy for its I.T. industries
whose aim must betoplace them inaposition oftechnological
equality with their competitors .Only in this way can its
industries hope tobecome competitive with theUSA andJapan .
19.This European strategy should enable the European industry to
attain eventually aworld market share comparable tothe relative
size oftheEuropean I.T. market itself ,e.g. ,30%oftheworld
market .
20.The main responses ofMember States tothe continued external
threat to their I.T. industries have sofar been national
responses .There exist awhole series ofnational support schemes
all designed tostrengthen national industry .Inresponse tonew
research programmes being announced andundertaken inthe USA and

-5-
Japanandtothecontinuedlossofmarkets,MemberStatesare
preparinganewseriesofnationalresponses ,andnational
strategies .
21.'However,nationalstrategies cannotaddresstherootofthe
problem.Thisisthatalltechnologyoptionsmustbepursuedand
developed,sinceitisnotpredictable whichinthelongtermwill
bethekeyones.Companies,andevenindividualcountries ,donot
havetheresources topursuethefullrangeoftechnology
options.
22.AEuropeanstrategymustre–inforcetheexistingeffortsof
nationalauthorities ,encouraging cooperation betweenEuropean
firmsandincreasingthedirectCommunitycontribution tothis
jointeffort.
23.Europeanindustryhasindicatedthatifsuchagoalistobe
achievedwithinthenexttenyears,amajorcooperative long-term
R&DeffortmustbelaunchedattheCommunitylevelinadditionto
andreinforced bythoseothermeasuresindicatedinI.below.
24.Suchaneffort(whichcouldbecalledtheEuropeanStrategic
ResearchProgrammeinInformation Technology-theESPRIT)should
havethreeobjectives :
-itmustbeaimedatpre-competitive technology ,
-itmustbeconcertedwithnationalactivities ,
-itmustbeofsubstantial scale,adequatetocatchupwithand
matchtheequivalenteffortsofJapanandtheUSA.
25.Otherimportantaspectsarethatitmustdrawonalltheavailable
skillsbyinvolvingpublicresearchinstitutesanduniversities ;
industrythroughouttheCommunitymustbenefitboththroughas
wideaparticipation aspossibleandthroughwidedissemination of
theresults.
26.GiventhesituationmuchofEuropeanindustryisnowin,andthe
revisionofnationalstrategies ,itisimportantthatthiseffort
belaunchedasrapidlyaspossible,toensurethatthecompanies
involvedintheI.T.industryarenotforcedtogiveupthe
possibilityofaEuropeanoption.

-6-
E.EUROPEAN STRATEGIC PROGRAMME OFRESEARCH ANDDEVELOPMENT IN
INFORMATION TECHNOLOGY ESPRIT
2/.AnumberofmajorEuropeancompaniesintheI.T.fieldhave,
togetherwiththeCommission ,enteredintoanexercisetodefinea
programmeofcooperative long-termresearchcapableofbeing
carriedoutbyindustryandresearchbodiesincooperation .
28.Theyhaveusedasabasisfordiscussion studieswhichwere
carriedoutbytheCommission withconsultants onthelong-lead-
timeresearchneedsofEuropeanindustry.Theconsultants in
questionreviewedpotentialareasoftechnology withaviewto
identifying thosewhichwere:
1.Necessaryforthecompetitivity oftheindustry,
2.SuitableforaEuropeaneffortratherthananationalone.
29.Theyconcludedthattherewerefivemajorareasofinformation
technology which,withaproperlyfocussedeffortataEuropean
level,offeredthepossibility forEuropeanindustrytoclosethe
technological gapwithitscompetitors andtohaveimmediately
availabletheabilitytoapplythesetechnologies toothersectors
withoutdependence onforeignsourcesofsupply.
30.Thecompaniesacceptedthebroadconclusions ofthesestudies.
WithintheframeworkoftheCommission ,workingtoanaccelerated
timescale ,anddeployingconsiderable resourcesintermsofkey
engineersthecompanieshavecreatedworkinggroupstostudyeach
ofthekeysub-sectors identified inthestudiesandforwhicha
newbodyofscienceandtechnologyisrequiredwithinthenewfive
totenyearsinordertodevelopanewgenerationofproductsand
systems.
31.Thesubjectareasbeingstudiedbythefivegroupsare:
-AdvancedMicroelectronics ,
-AdvancedInformation Processing ,
-SoftwareTechnology ,
-OfficeAutomation ,
-ComputerIntegratedFlexibleManufacturing .
32.Thispreparatory phasewillresultinthemainlinesofanoverall
programmewhichwillbeofaEuropeanscale.

-7-
33.The European dimension ofany such programme will need tobe
reinforced byattention tostandards ,opening upofthe markets
andperhaps 'improving the financial environment .However ,the
starting point must beagenuinely valid technology programme .
Once 'the main lines have been identified within the present
preparatory phase itwill bediscussed with theEuropean industry
ingeneral ,major users ,research institutions and national
authorities ,andthese discussions have already started .
F. NATURE OFTHE PROGRAMME
34.ESPRIT will build onexisting Community activities .It isa
logical follow-on tothe Community microelectronics programme and
to the existing multiannual programme which concentrates on
networks ,applications and software .However ,because ofthe need
for scale and the need toaddress all thekey I.T. sectors ESPRIT
will be significantly larger inscale and be asystematic ,
integrated approach .
35.The main lines ofESPRIT will consist ofanumber oflong-lead -
time R&D programmes ofsufficient depth and variety that the
results will provide anoverall capability that can beexploited
bythewhole oftheEuropean I.T. industry tocompete successfully
with USandJapanese efforts inthis field .
36.The following brief outline ofthe nature ofthe five areas
indicates the large extent bywhich R&D inonearea isneeded for
the development ofavital capability inanother .
Itfollows therefore ,that toestablish acompetitive European
Community presence intheworld markets ,theR&Dprogrammes inall
five areas are very closely related from the point ofview of
industrial exploitation andtherefore theresults from allthose
areas should beavailable atroughly the same time .The great
volume ofvery high quality ,multidisciplined research and
development skills that areneeded tomake this possible ,canbe
obtained only bybringing together theappropriate scientific and
technical resources ofthewhole Community .

-8-
i) Advanced Microelectronics
Microelectronics provides the common operational circuit
technology onwhich all modern electronic systems rely in
order to perform their functions . Advances in
microelectronics technology are aimed atproducing smaller ,
more reliable and more powerful devices , capable of
performing more functions oroperations than those inuse
today .
They will enable anew generation of cost-effective
electronic equipment and systems tobeintroduced and the
cost per function ofexisting systems tobereduced .
The successful design and manufacture ofthese devices
depends upon the availability ofnew capabilities based on
Advanced Information Processing ,Software Technology and
Computer Integrated Manufacturing technologies arising from
the work programmes initiated inthese areas .
The existing Community microelectronic technology programme
(1)concentrates onsome ofthe new technologies needed to
design and manufacture VLSI (2)microelectronic circuits .
The programme initiates cooperation atCommunity level
between industry ,research establishments and universities ,
inprojects that are the first steps ofthe long-term R&D
programme inadvanced microelectronic technology envisaged
inthis communication .
ii)Advanced Information Processing (AIP )
The nature ofthenewgeneration ofAIP isthat they will be
more directly orientated towards the needs ofhuman ,non
specialist users than are the data processing systems that
are available today .They will provide for new kinds of
direct communication between man and machine such as
pictures and speech ,and their functions will bemuch like
human thought ,association and inference ,rather than
calculation and data storage .
AIP systems will require advanced architecture and further
miniaturisation inmicroeelectronics ,areliability much
increased beyond that which ispossible today and novel
ideas ininformation science .
(1)Council Regulation 3744/82
(2)Very Large scale integration .

-9-
Thesuccessfulimplementation oftheR&Dprogrammeneeded
toachievethesegoalsdependsupontheavailability ofnew
capabilities inthefieldsofSoftwareTechnology and
ComputerAidedDesigntoolsforAdvancedMicroelectronic
1Devicesarisingfromtheworkprogrammesinitiatedinthese
areas.
iii)SoftwareTechnology
Thepresentnatureofsoftwaretechnologyisthatitisboth
skilled-labour intensiveandbarelyadequatetomeetcurrent
systemrequirements .Substantial advancesandimprovements
onpresentsoftwaredevelopment andengineering techniques
arenecesary,inparticular thoseneededtoestablishthe
generationofhighlymodularsoftware,enablingindividual
modulestobe"reusable"inotherprogrammesforwhichthe
samefunctionsarerequired.
Thiswillleadtocost-effective productionofthecomplex
programmes requiredtocontrolthenewgeneration ofAIP
systems.Projectswithinthisthemewilldevelopandbuild
uponacommonsetoftoolsandmethods,todefineand
implement a"secondgeneration "softwareengineering
environment bywhichtoachievethesegoals.
iv)SystemsforOfficeAutomationandComputerIntegrated
FlexibleManufacturing
Thenatureofthesesystemsisthattheydependuponthe
development ofanextensiverangeofcost-effective highly
reliablesensorsandtransducers andtheavailability ofthe
newcapabilities thatwillbeprovidedbythesectors
describedintheprecedingparagraphs .
Thesedevelopments andcapabilities willopenthewaytothe
designandintroduction ofavastrangeofnewproductsand
systems.Itshouldbenotedhoweverthatonekeyto
successful commercial exploitation andusebyEuropean
industryandbusiness,isaEuropean-scale market
characterised bycontinental-wide adoptionofappropriate ,
common,telecommunications -compatiblestandards,operating

-10-
procedures andotheruserrulesandprotocolsforusein
nationalgovernment ,companyandeducationsystemsand
publicpurchasingspecifications andprocedures .
R&Dprojectsinthissectorwillbeaimedatdeveloping
commontechnologies relatedtothedefinitionofuserand
interfacestandardsthatsatisfytheserequirements .
G.NEEDFORPILOTPROJECTS
37.Inthecourseoftheirinvestigations intothebroaddefinitionof
ESPRIT,theworkinggroupshaveidentified anumberofpilot
projectsoflimitedscopecomparedtothewholeprogramme ,but
which,bytheirnature,arerepresentative ofthedifferenttypes
ofactivitythatconstitute ESPRIT.
38.Theprojectshaveadoublepurpose :
-toconstitute concreteexamplesfromwhichtodevelopand
validatethemethodsandframeworkofcooperation ,
-tomaintain themomentum towardsthedefinition and
realisation ofthewholeprogramme.
39.Itshouldbeemphasisedagainthattheseprojectsdonotconstitute
acomprehensive ,integrated programme (asESPRITwill)and
thereforeshouldnotbejudgedinthatlight.Rather,ashasbeen
saidbefore,theyaremeanttobestartersfortheoperation .
H.TIMETABLE
40.Ashasbeenstatedabovetheneedfortheaboveprogrammeis
urgent.Becauseofthis,thepresentCommunication isbeing
submittedtotheCouncilsothatpreparatory discussions canbe
initiatedtoenabledecisionstobetakenmorerapidlylateron.
ThemainESPRITprogrammewillbepreparedandpresentedintime
fordiscussions tobeginbeforeDecember1982.Inordertoallow
themainprogrammetobegininJanuary1984,thesecondhalfof
1983willhavetobedevotedtonegotiating andsettingupthe
cooperative mechanism.

-11-
41.Ashasbeen stated earlier there isaneed forpilot projects and
these will beprepared much earlier andsubmitted totheCouncil
before theautumn ofthis year ,toenable them tobegin inJanuary
1983 .iThe aims ofthese pilot projects have been stated inthe
previous section .Itisenvisaged that theCommunity contribution
tothis preliminary phase would beoftheorder of10-12 MECU ,and
this sumisincluded bytheCommission inthe1983 budget .
42.Before anyproposals arepresented theconsultation process will be
widened toinclude industry andnational authorities onaswide a
basis aspracticable ,and tobring inmajor users andscientific
bodies .
I. ESPRIT INTHE WIDE RCONTEXT
43.Howlarge should theESPRIT programme be?Asstated earlier ,it
must atleast match comparable efforts intheU.S.A. andJapan .
44. Inthe U.S.A. ,15.7% ofthe national 1981 R&D budget of$68.6
billion ($10.8 )was forelectronics andrelated technologies .Of
this figure some 47% was tobeprovided byindustry and 49% by
government .(1)
Twoexamples ofjoint U.S. government /industry programmes are the
VHSIC (2)programme -$210 million over 6years ,with an
industrial contribution ofatleast that amount -and the ICAM (3)
programme -towhich the U.S. government iscontributing $100
million over 5years .Itisalso worth noting that inthe U.S.A.
even though many ofthe companies ,have much greater research
programmes than European ones ,some ofthem (including IBM !)are
combining toconduct research inkey areas .
45. InJapan ,thetotal figure forresearch appears comparable tothat
ofEurope ,but their results have been spectacularly striking in
comparison .This appears tobedue ,amongst other things totheir
clear strategic objectives and the fact that research and
exploitation isconcentrated onafewlarge companies .
There are anumber ofprogrammes involving government andindustry ,
ofwhich well-known examples aretheVLSI (4)programme which was $
139million ;PIPS (5)$82million ;high speed computer -$148
million over 7years ;operating systems -$148million over 4
years ,and soon.
(1)Source -Study onLong Lead Time R&DfortheCommission (Phase
(2)Very High Speed Integrated Circuits
(3)Integrated Computer –Aided Manufacture
(4)Very Large Scale Integration
(5)Pattern Integration Processing Systems

-12-
46.InEurope(althoughitistooearly)toquantifytheESPRIT
programmeconsiderable sumsmustbeinvolved.Althoughtherearea
numberofnationalEuropeanprogrammes onthisscalethereare
significant differences .InparticulartheU.S.A.andJapanese
programmesarebuildingblocks,inthattheyrelatetoeachother
andleadtofurtherprogrammes .ForexampletheU.S.A.VHSIC
programmewillleadtotheUHSIC(1)programme.
InJapanthePIPSandhighspeedcomputerareanintegratedpartof
thepushtowardsArtificialIntelligence Systems.
47.ESPRITwillimprovetheuseofEuropean R&Dresourcesprovidedit
isinthenatureofabuildingblock.Thismeanstheremustbea
dynamicapproachtotheprogranme.Projectsmustbeadded(or
discarded )astechnologyitselfevolves.
48.Theultimatesuccessofanysuchprogranmehoweverwillonlybe
measuredbyEuropeanindustryincreasingitsshareofEuropeanand
worldmarket.
49.ThiswillonlybepossibleifR&Displacedinthecontextofa
widerstrategysupportedbynationalauthorities andtheCommunity.
Forthecompaniesawiderstrategymayimplyadegreeofindustrial
specialization .Fornationalauthorities thisshouldmean
concentration notonlyonR&Dbutincreasedeffortsinthefieldof
norms,standardsandpublicprocurementpoliciestoensurethatthe
largestpossiblemarketexistsinEurope.
50.SomeexistingCommunityactivitiesareaimedatsupportingindustry
andnationalauthorities intheseaimsandothers,likethe
microelectronics programme ,leadintoESPRIT.Amongstthefirst
typeare:
i)Themulti-annual informatics programmepromulgated byCouncil
regulation 1996/79.Thisconcentrates onthecooperative
developmentofavarietyofsoftwareandapplicationprojects
ofCommunityinterestandthecreationofsupportivedata
bases.
ii)Themaintenanceofaworkinggrouponstandardisation (the
W.G.S.)concernedwiththeidentification ofneedsfor
Community andinternational standardsinthefieldof
information technologysystems.
(1)UltraHighSpeedIntegratedCircuits

-13-
iii)TheproposalonTelecommunications toharmonisefuture
integratedservicedigitalnetworksandcreateanopen
Communitymarketfortelematicterminals.Thisiscurrently
^eforetheCouncilandthereisanurgentneedfora
decision.
iv)Anumberofprojectsaimedatthedefinitionofcompatible
standards anduseofI.T.inofficeautomation and
information exchangesystems.ACommunityaction,INSIS
(Inter-Institutional Information System),isenvisaged.
Itistheintentiontoreinforcetheseactivities .
CONCLUSION
TheCommission invitestheCouncil :
-toaccepttheurgentneedforaEuropeanStrategicResearch
Programmeintheinformation technologyfield.
-toagreethegeneraloutlinesgiveninthispaper.
-toapprovethetimescaleandproceduressetoutinsectionH
above.