Opinion of the Economic and Social Committee on:

- the 'Amended proposal for a European Parliament and Council Decision concerning the Fifth Framework Programme of the European Community for Research, Technological Development and Demonstration Activities (1998-2002)`, and - the 'Amended proposal for a Council Decision concerning the Fifth Framework Programme of the European Atomic Energy Community (Euratom) for Research and Training Activities (1998-2002)` (98/C 73/31)

On 30 September 1997, the Economic and Social Committee, acting under the third paragraph of Rule 23 of its Rules of Procedure, decided to draw up an opinion on the above-mentioned amended proposals.

The Section for Energy, Nuclear Questions and Research, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 26 November 1997. The rapporteur was Mr Bernabei.

At its 350th plenary session (meeting of 11 December 1997) the Economic and Social Committee unanimously adopted the following opinion.

1. Recommendations

The Economic and Social Committee, having regard to:

1.1. its opinion adopted unanimously on 1 October 1997 on the Proposal for a Decision on the Fifth RTDD Framework Programme (1998-2002) and on the Proposal for a Decision on the Fifth Framework Programme for research and training activities (Euratom) (1998-2002) (), in which the Committee reserved the right to comment on the financial perspective established by the Commission;

1.2. its opinion of 30 May 1996 on the Green Paper on Innovation () and its own-initiative opinion of 1 October 1997 on the Impact on SMEs of the steady, widespread reduction in funds allocated to research and technological development in the EU (at Community and national level) ();

1.3. the conclusions of the extraordinary European Council meeting on employment, held on 20-21 November in Luxembourg, which placed the unemployment problem at the heart of EU concerns and emphasized that research policy, and in particular the Fifth Framework Programme, must play an important role in competitiveness and job creation, in particular by disseminating innovation and the transfer of technologies towards SMEs;

1.4. the Commission's amended proposal for a Decision of 11 August 1997 (), containing the budgetary strand of the Fifth Framework Programme, which confines itself to providing overall funding of ECU 16 300 million, shared between the thematic programmes according to the percentages indicated in the original proposal;

1.5. the lack of any breakdown of these resources between key actions, or of any indication of the criteria to be used for the future breakdown of resources between generic RTD activities, infrastructure support activities and key actions;

reiterates the need:

1.6. to provide funding of at least ECU 17 000 million for the Fifth Framework Programme, to be allocated as follows: ECU 15 533 million for the RTDD Framework Programme, and ECU 1 467 million for the Euratom programme;

1.7. to maintain a minimum flexibility reserve of 4,5 %, or ECU 700 million;

1.8. for a minimum threshold of public and private funding of ECU 1 000 million for each key action, which should be limited to ten or so, selected according to quantified criteria and objectives with a specific, performance-related timescale;

1.9. to provide the horizontal programmes with sufficient funding to enhance efficiency, to be allocated as follows: ECU 575 million for international cooperation; ECU 550 million for innovation and SMEs, and ECU 1 402 million for developing human potential;

1.10. to redefine the strategic role of the JRC, so as to enhance its strategic importance as a neutral centre of excellence both within and beyond the Community, to provide back-up for Community decision-making and other EU policies, and for the development of a strong European identity in the field of RTD and innovation, open to the global market and with appropriations of ECU 815 million;

calls on the Commission, the European Parliament and the Council:

1.11. to ensure close interaction between the Framework Programme and European, non-EU cooperation frameworks, particularly Eureka and Cost, and to develop, on the basis of analyses for each geographic area, coherent action for the CEEC, the Mediterranean Basin, the Newly Independent States (NIS), the dynamic economies of Asia and Latin America, developing countries and industrialized third countries;

1.12. to reframe and strengthen the SME innovation and participation action, with regard to streamlining intervention already planned under the Fourth Framework Programme, but supplementing it with new, specific features to promote a spirit of enterprise amongst researchers and scientists, and to create a new 'ad hoc` support mechanism for the setting-up of technological joint ventures, so that the results of Community research can be harnessed by industry and business;

1.13. to make the level of funding conditional on a larger percentage being earmarked for exchanges between the academic world and industry, universities and SMEs, major research centres, and industrial laboratories and SMEs;

1.14. to safeguard consistency between the need for an integrated approach to the Fifth Framework Programme and concentration and interoperability of the generic research, support for major infrastructure and key actions which make up the new Community framework;

1.15. to identify a range of qualitative/quantitative indicators to guide and control key action activity such as helping to improve the socio-economic foundations for the development of sustainable growth and employment capacity, potential take-up rate, level of strategic visibility and European dimension, interaction between Community, European and national action, involvement of SMEs in the sector, potential spin-offs in terms of new business start-ups, new jobs and new occupations;

1.16. to distribute the ECU 11 491 million overall funding for the thematic programmes so that a substantial portion is reserved for key actions, keeping an average quota, which would vary from one thematic programme to another, of no more than 25 % for generic RTD activities and major infrastructure;

1.17. to ensure that each key action has an adequate percentage of funding for demonstration, innovation and SMEs, in order to bolster the research-innovation-market sequence;

1.18. to integrate and thereby streamline the content of the proposed key actions by refocusing them - where possible - within the framework of the thematic programmes proposed by the Commission;

1.19. to select ten or so key actions relating to the Community RTDD Framework Programme and one relating to the Euratom Programme, and provide them with sufficient funding to achieve critical mass, take-up rate, scientific excellence and strategic visibility;

1.20. to make the provision of funding for the key actions contingent on performance assessments, in order to avoid a five-year freeze, during which RTDD activities with a low level of scientific excellence and innovation are funded merely as a matter of routine;

1.21. to provide modern, simple, transparent management procedures capable of capping administrative costs and red tape by assigning clear responsibilities to a restricted number of bureaucratic and decision-making levels, with collective decisions being confined to the highest levels, i.e. the Commissioners responsible.

2. Introduction

2.1. On 1 October 1997, the Committee unanimously adopted its opinion on the Proposal for a European Parliament and Council Decision on the Fifth RTDD framework programme (1998-2002), and the Proposal for a Council Decision on the Fifth Framework Programme of the European Atomic Energy Community (Euratom) for research and training activities (1998-2002) ().

2.2. In this opinion, the Committee reserved the right to issue an additional opinion, once the Commission had established the financial perspective and adopted the relevant proposal. The amended proposal () was adopted by the Commission on 11 August 1997.

2.3. The Commission proposes an increase of 3 %, or ECU 16 300 million, based on GNP forecasts. This is in line with its decision on Agenda 2000 (), adopted on 15 July 1997, advocating an increase faster than GNP growth for certain internal policy programmes which have been given priority, including research.

2.4. The Commission proposes the following breakdown of the maximum overall amount: ECU 14 833 million for the Fifth RTDD Framework Programme, and ECU 1 467 million for the Euratom Framework Programme.

2.5. In the financial statement, the Commission renews its proposal to organize RTDD action around three thematic programmes, three horizontal programmes and one direct action for the JRC; this is without prejudice to any Council decisions relating to the application of Articles 130k, l and n.

2.6. The proposal confines itself to a breakdown of the maximum overall amount on the basis of the percentages given in the original proposal. For key actions, the proposal provides no breakdown of resources, nor does it indicate the criteria for a future breakdown of resources between generic RTD activities, infrastructure support activities and key actions.

2.7. Moreover, in the amended proposal's cost-effectiveness analysis, the Commission () merely describes the specific objectives of each of the six themes as 'quantifiable`, without providing any details of the quantification procedure or of any arrangements for accurate monitoring and evaluation of the declared objectives throughout the lifetime of the actions.

3. The financial perspective and the new format of the Framework Programme

3.1. The Committee would reiterate the recommendation made in its opinion of 1 October for provision of funding for the Fifth Framework Programme of at least ECU 17 000 million, 'to be shared between a limited number of thematic programmes and key actions, and focusing more on measures within and beyond the horizontal actions` (). The ECU 16 300 million suggested by the Commission would be supplemented by a flexibility reserve of ECU 700 million for the Fifth Framework Programme. This would provide a reserve quota from the outset, and would avoid the need for the complicated discussions which took place under the Fourth Framework Programme for the allocation of extra funding following the mid-term report; it would also meet the recommendations of the various assessment reports, and the Davignon report in particular.

3.2. Whilst the Committee endorses the proposed appropriation of ECU 1 467 million for the Euratom programme, subject to the specific comments made in this opinion and in particular the reservation expressed about the 'thermonuclear fusion` key action, it feels that the Community RTDD appropriation should be increased to ECU 15 533 million, thus giving an aggregate total of ECU 17 000 million for the two Framework Programmes.

3.3. In this respect, the Committee would reiterate the recommendations already made, viz.:

- to retain a flexibility reserve of ECU 700 million (4,5 %) to deal, on the one hand, with urgent, unforeseen problems, and on the other, with pilot activities and demonstration projects for any new key actions and/or actions adopted under Article 130 k, l and n;

- to require a minimum threshold of combined public and private funding of ECU 1 000 million for each key action, in order to ensure the critical mass needed to provide adequate visibility and concrete results which can be assessed in the short- and medium-term;

- to concentrate research efforts on some ten key actions, selected according to quantified criteria and objectives with a specific, performance-related timescale;

- to increase funding for horizontal actions so as to provide, in particular, visibility and consistency for international cooperation at least on a level with that of the Fourth Framework Programme; boost dissemination and optimization of results, particularly for SMEs; refocus researcher training and mobility to provide greater balance between the academic world and industry;

- to redefine the role of the JRC and its institutions, enhancing its strategic importance, and making allocation of funding subject to its providing more efficient interinstitutional back-up for Community decision-making, helping to develop the European and international aspects of RTDD, and ensuring high-grade back-up for Community policies, particularly by stepping up measurement and testing, the setting of Europe-wide standards, and checks on fraud; and making the allocation of funding conditional on its openness to the European scientific and industrial community, and to the global market;

- to provide each thematic programme with a forecasting and assessment system which would be employed in the sectors covered by the programme for technology and industrial trend analyses, and could be used to refocus short- and medium-term objectives 'in progress`, and identify new options and needs as they arise.

3.4. Pursuant to these recommendations, the Committee suggests the following breakdown for the ECU 15 533 million:

>TABLE>

4. Breakdown of funding for the horizontal programmes

4.1. International cooperation

4.1.1. The Committee would emphasize the vital importance of international cooperation in a global EU-third country market, and the need to ensure close interaction with non-EU cooperation frameworks, particularly Eureka and Cost.

4.1.2. This area needs to maintain an independent cooperation strand to complement and bolster the activities of the thematic programmes, in an integrated approach.

4.1.3. The Committee reiterates the need to develop a proper analysis for the different geographical areas, identified in terms of technological development and scientific excellence and giving precedence to neighbouring areas and applicant countries, with a view to solving common problems and securing mutual advantages.

4.1.4. It is the Committee's view that the breakdown of funding should give priority to areas bordering on the EU, and that around 50 % of the total amount should go to the first two of the following six specific areas: the associated and applicant countries of central and eastern Europe; the third countries of the Mediterranean Basin, strengthening the technological research and innovation dimension of the Euro-Mediterranean partnership; the countries of the former Soviet Union, preserving their research potential and scientific excellence and helping to solve the economic transition and security problems; the dynamic economies of Asia and Latin America, as emerging international players in various RTD sectors, developing countries, particularly as regards protection of the environment and health; and industrialized third countries, which are both competitors and partners of the EU in the global market.

4.1.5. In addition to the action for specific geographic areas, the Committee feels that the horizontal programme for international cooperation should address the important task of ensuring closer links with the non-EU European cooperation frameworks, and with international organizations. Greater consistency and better integrated, more regular coordination are required, particularly with Eureka and Cost, as their flexibility, voluntary coordination arrangements, and bottom-up approach make them a model of scientific cooperation and technological innovation which can help to resolve the European innovation paradox.

4.1.6. The Committee considers that the strategic importance of both international cooperation strands warrant maintaining funding at least equal to the ECU 575 million available under the Fourth Framework Programme. ECU 75 million of this should be earmarked for strengthening the cooperation frameworks, particularly with Eureka and Cost, and the remaining ECU 500 million divided between the six specific geographical intervention areas.

4.1.7. Further to this specific funding and to the resources which will have to be allocated for the key actions, it will be necessary to establish joint, systematic activation mechanisms with the Phare, Tacis, Meda, ALA and EDF-ACP programmes.

4.2. Innovation and participation of SMEs

4.2.1. The Committee feels that if this strand is not reframed and stepped up, by upgrading the content and increasing funding, then the whole new format of the Fifth Framework Programme and the very idea of 'problem solving` at the service of the individual, business and society, could be called into question. 'Innovative` results and a 'break with the past` cannot be guaranteed by simply continuing with the current activity framework.

4.2.2. It is not enough for the only new input to consist of one-stop shops, innovation units to complement exploratory awards and support for cooperative research, networks and services providing information and assistance on intellectual property and innovation funding, if this is not accompanied by arrangements to facilitate the creation and growth of innovative firms, and by more direct, non-intermediary instruments to support the various types of small business which constitute the key players in innovation.

4.2.3. For this reason the Committee suggests creating specific mechanisms for setting up new innovative firms to harness directly the fruits of Community research, and the encouragement of a spirit of enterprise amongst researchers and scientists, providing them with the know-how needed to translate patents and licences into industrial and commercial successes, thus instilling a European dimension to the global market.

4.2.4. The full implementation of the horizontal programme on 'researcher training and mobility` will have to be backed up by an adequate budget heading (ECU 50 million) for training industrial and academic researchers, parallel to that of the specific sector in order to ally strategic, organizational, managerial and commercial skills with technological skills linked to strategic business sectors and partnership networks. This would enable researchers to acquire practical 'hands on` experience through internships and development programmes carried out in conjunction with industry, and help them to assess the market potential for patenting their discoveries and the potential economic and commercial outlets for their work (in conjunction with the European Patent Office and national patent offices).

4.2.5. In order to make it easier for businesses to promote transnational cooperation between SMEs and researchers and harness the results of Community research, entrepreneurial initiative must be supported by measures to bring together and consolidate different areas of scientific and industrial excellence.

4.2.6. To this end, a specific support measure should be provided for the establishment of technological joint ventures between two or more partners from different Member States, to cover expense on market research, legal work, environmental impact, the implementation of quality technical standards, and, more generally, the business plan they need in order to pool their own resources or those from the venture capital and banking sector, with a possible Community contribution of up to 10 % of total investment in the new joint venture.

4.2.7. Support for these activities within the Fifth Framework Programme should include a new specific budget heading of ECU 150 million for this horizontal programme, to ensure it has the visibility needed to launch pilot projects.

4.2.8. The other horizontal programme activities - after being skewed towards the real end users and complemented by trend charts of national innovation measures and codes of good practice showing an innovation-friendly financial, regulatory and legal framework for industrial property- should be provided with Fourth Framework Programme levels of funding, topped up by a 3 % increase in real terms, equal to ECU 350 million.

4.2.9. Funding for the SME innovation and participation programme must be tied in with that available from the Structural Funds, the EIB and the EIF, and with existing mechanisms for new innovative start-ups in the Jop and Ecip third country markets.

4.3. Researcher mobility

4.3.1. In keeping with the Fifth Framework Programme's new 'problem solving` approach, the programme will have to be firmly skewed towards integrating the academic world and industry, with greater emphasis on the development of new occupations, with reference to point 4.2.4 above and the future needs of the proposed key actions. Again with an eye to the horizontal programme for SME innovation and participation and the thematic programmes, the Committee's earlier opinion highlighted the need for measures to provide 'temporary secondments for university researchers and those working in corporate research centres - especially in SMEs - ... [in order] to disseminate best practices, and monitor the needs and potential for technology development and scientific cooperation.`

4.3.2. Consequently, the level of funding (ECU 1 402 million) which the Commission proposes for this action must be conditional on a larger percentage being earmarked for exchanges between the academic world and industry, universities and SMEs, major research centres, and industrial laboratories and SMEs, with a view to cohesion, dissemination of technology and promotion of scientific excellence and top-quality standards.

5. Breakdown of funding for the thematic programmes

5.1. In view of the new 'problem solving` slant of the Fifth Framework Programme, based on quantified, priority targets with performance-related timescales for research, the Committee welcomes the Commission's new simpler thematic approach, focusing on three major areas, but feels the environmental strand could stand alone.

5.2. Moreover, the Committee endorses the approach mainly as a means of reducing the number of programme committees, facilitating research link-ups, and providing greater leeway to review and fine-tune the priority themes within the specific thematic programmes.

5.3. Indeed, the Commission seems to regard the thematic programmes as the main source of flexibility for allocating funding priorities for the individual key actions contained therein, thus making refocusing possible both 'within each programme` as it progresses and with the generic and basic research activities and those in support of research infrastructure.

5.4. In this respect, the key actions become the main tool for focusing EU research strategies. Consequently, the Committee would stress the lack of objective qualitative/quantitative indicators which could be used to give a breakdown of funding per key action, and establish the link between key actions and both generic RTDD activities and support for research infrastructure.

5.5. To this end, the Committee feels that it is essential to establish a number of performance indicators, e.g.:

- the contribution to improving the socioeconomic foundations for the development of sustainable growth and employment capacity; here the Committee advocates close collaboration on innovation with the social partners, relevant social interest groups and SMEs;

- potential take-up rate: a yardstick for the industry's ability to invest its own resources in Community projects; in order to safeguard scientific excellence in the selection of projects, there must be an appropriate proposal/selection ratio, given that below the minimum threshold, research is deprived of scientific excellence and the necessary selectivity; whilst above the maximum ceiling, participation is discouraged, and resources are wasted in planning and presenting proposals;

- strategic visibility and European dimension: a yardstick for the strategic position of the key action with regard to global competition and internal cohesion;

- degree of interlinkage between Community and national actions: assesses the degree of coordination between research actions at various levels;

- presence of SMEs in the sector: identifies the number of 'developers of technology`, 'technology users` and 'technology followers` in the areas covered by the key actions;

- potential spin-offs: measures the potential spin-offs of innovative research in key action areas in terms of new business start-ups, new direct and indirect employment and new occupations;

- levels and quality of employment.

5.6. On the basis of these indicators, the critical mass set by the Commission at ECU 1 000 million per key action, and the fact that the key actions would be limited to ten, the Committee proposes that ECU 11 491 million be reserved for the thematic programmes, focusing mainly on key actions and keeping an average quota, which would vary from one thematic programme to another, of no more than 25 % for generic RTD and major infrastructure.

5.6.1. This breakdown complies with the strategic objective of concentrating considerable resources on key actions which are likely to yield concrete results in the short to medium term, boosting competitiveness and employment, and providing visible, tangible fulfilment of real everyday needs. At the same time a sufficient percentage must be earmarked for generic and basic research and for infrastructure support research, in order to provide wider options for refocusing the key actions over the medium- long-term and to take on board new strands and emerging scientific and industrial needs.

5.6.2. As each key action combines technological research, innovation, dissemination, demonstration, assessment and coordination, the percentage of funding recommended by the Committee is warranted by the need to maintain high industrial participation levels of 50 % in order to reach the minimum threshold of ECU 1 000 million.

5.7. Given that in selecting key actions, account must be taken of the fact that there is a ceiling on the number of actions, and that each action must achieve an overall critical mass of ECU 1 000 million in public and private funding, the above criteria would be used to identify the thematic priorities, earmark the relevant funding, refocus the activities and re-allocate funding.

5.8. The Committee would emphasize the need for the appropriations for each key action to include a percentage of funding for demonstration, innovation and SMEs, in order to speed up the research-innovation-market sequence and be consistent with the actions envisaged under the horizontal programme on SME innovation and participation.

6. Selection and funding of key actions

6.1. As the Committee pointed out in its earlier opinion, the selective streamlining of key action research areas and relevant appropriations is held back by the lack of joint industrial and technological forward studies, and of the means to mobilize all the various levels of European research in a concerted effort (trend charts).

6.2. Similarly, with regard to the data bases for each intervention area, the inconsistent, piecemeal nature of the available data regarding the indicators identified by the Committee can only, at this juncture, provide sweeping generalizations; however, the general message is that resources should be focused in order to avoid scattering them over such a myriad of themes that critical mass is not achieved.

6.3. The Committee anyway emphasizes, in accordance with its previous opinion of 1 October 1997 (), the need 'for the number of key actions to be cut to no more than ten or so` and 'to be selected for their prospects of direct impact in terms of application and concrete results, which should also have a strong media impact`.

6.4. By way of example, the Committee has selected three key actions in the field of health, the environment and natural resources; three key actions relating to the creation of the information society; and five key actions in the field of production, energy and transport systems.

6.5. To ensure a critical mass of shared actions that would make it possible to exceed the overall threshold mentioned of ECU 1 000 million, the Committee considers it appropriate to keep Community financing for each key action between ECU 700 and 900 million, in accordance with the take-up capacity of the economic sectors concerned, maintaining levels of scientific excellence and taking account of the indicators mentioned in point 5.5, especially with regard to the impact on competitiveness of the business structure, new and better jobs and the creation of new occupational profiles.

6.6. Such an arrangement requires substantial integration between Community and national programmes, not to mention an adequate proportion of actions in the areas of demonstration, innovation, optimization and dissemination of results, and training for new occupations.

6.7. The Committee believes, however, that it should be possible to vary the funding arrangements during the programme according to performance and the innovative, practical benefits, as well as new market, industrial and scientific trends. It is important to avoid a five-year 'freeze` during which activities with low take-up capacity would be allocated funds as a matter of routine, which would diminish scientific excellence and, ultimately, European competitiveness in global markets.

6.8. Implementation of the strategy envisaged by the Commission for the activities covered by the Fifth Framework Programme (Euratom), includes a key action on 'controlled thermonuclear fusion` and generic research into 'nuclear fission`. Bearing in mind the political, financial and technical uncertainties surrounding research into nuclear fusion, particularly as regards the forthcoming quadrilateral ITER (International Thermonuclear Experimental Reactor) agreement - currently the main international programme under the JET programme - the Committee feels that a substantial portion of the resources earmarked for this key action should be put aside and their allocation at the end of the two-year period be made conditional on an assessment of the action's consistency with international strategies. In any case, initiatives which are likely to make substantial headway in building constructive relations with industry should be encouraged.

6.8.1. In this respect, the Committee believes that ECU 500-600 million should be earmarked for this key action, with the remaining ECU 900-1000 million being allocated to nuclear fission RTD, with the bulk of this being allocated to the following three areas of activity: (i) reactor safety and protection from radiation, (ii) the nuclear fuel cycle and the development of a comprehensive nuclear waste disposal policy taking into account the desire of the public for long-term waste to be stored in a retrievable state, and (iii) assistance with the design of a new generation of reactors which are safer, more competitive and smaller than the existing designs. Special priority must be given to improving nuclear safety in central and eastern Europe, and to closing down unsafe plant, within the framework of the EU enlargement negotiations.

6.9. A quality control assessment system for up-and-running Euratom RTD projects must be created to assess such aspects as scientific excellence, originality, and the potential success rate for both science-based and user-based projects.

7. Keeping down costs and running time

7.1. The Committee would emphasize that it is imperative for the Fifth Framework Programme's new integrated approach, in the run-up to the 21st century, to be backed up by: modern, simple, transparent, and, most of all, efficient management procedures that will limit costs and time spent on administration; the assignment of precise, detailed responsibilities within the relevant Commission departments; and confinement of collective decision-taking to the highest levels, i.e. the Commissioners responsible.

7.2. The Committee believes that this reorganization is indispensable if the new Framework Programme format is not to undermine the need to keep down costs and time spent on administration, and the economies of scale which are an integral part of the new key action strategy, as recommended by all interested parties, and by industry in particular.

Brussels, 11 December 1997.

The President of the Economic and Social Committee

Tom JENKINS

() OJ C 355, 21.11.1997.

() OJ C 212, 22.7.1996.

() OJ C 355, 21.11.1997.

() COM(97) 439 final.

() OJ C 355, 21.11.1997.

() COM(97) 439 final.

() COM(97) 2000 final.

() Point 9 of the financial statement appended to the amended proposal.

() OJ C 355, 21.11.1997.

() OJ C 355, 21.11.1997.