COMMUNICATION FROM THE COMMISSION - "INVENTING TOMORROW" Europe's research at the service of its people
Date: 1996-07-10
Institutions: European Commission
Subjects: EU programme, EU research policy, innovation, scientific progress, socioeconomic conditions

COMMISSION  OF THE  EUROPEAN  COMMUNITIES 

* 

-tt 

Brussels,  10.0 M 990 
COM(96)  332  i-> al 

COMMUNICATION  FROM  THE  COMMISSION 

"INVENTING  TOMORROW" 
Europe's  research  at the service  of  its  people 

"INVENTING  TOMORROW" 
Europe's  research  at the service  of  its  people 

"...  apart  from  generating  new  knowledge,  we  would like  science  to  contribute 
to general well-being and social balance.  We want to see scientific progress  and 
innovation  making  a major  contribution  to Europe's  future ..." 

European  Research  Ministers,  1996 

The purpose of this document is to open a debate with the participation of  Parliament, Council and all those concerned by 
or interested in European research.  The aim is to decide together the guidelines which will serve as the basis for a detailed 
proposal for the Fifth Framework  Programme of research and technological development, which will determine Union action 
in this area as we move into the next millennium. 

SUMMARY 

INTRODUCTION 

I.  WHAT DO WE NEED FROM EUROPEAN RESEARCH AT THE BEGINNING OF THE 21st CENTURY? 

1.1 
1.2 
1.3 

General parameters 
Challenges and opportunities 
Main objectives 

11.1 
11.2 

II. MOVING FROM THE FOURTH TO THE FIFTH FRAMEWORK PROGRAMME 
Progress with the fourth framework programme 
Shifting the balance to improve the impact on society and the economy 
Supporting  basic research 
Bringing  research  more into line with  the  real market 
Doing more  to exploit results 

III.  PREUMINARY PROPOSAL FOR  THE STRUCTURE OF THE FIFTH FRAMEWORK PROGRAMME 

111.1  Content 

111.1.1  Priority topics (research at the service of the people) 

Unlocking  the  resources of the living  world and the  ecosystem 
Creating  a user-friendly  information  society 
Promoting  competitive  and sustainable  growth 

111.1.2  Horizontal activities 

Improving human potential 
Innovation  and participation  of SMEs 
Confirming  the  international  role of European research 

111.2 

Implementation 
Increasing  flexibility  in research  work and the  decision-making process 
Ensuring more  efficient  management 
Extending  the  range  of instruments  and means of coordination 

CONCLUSIONS 
Annex: facts, figures,  trends 

lA, 

INTRODUCTION 

The  world  is  changing  ever  more  rapidly.  Never  before  has  there  been  such a 

mix  of  trends,  ideas  and  aspirations,  feeding  on  each  other  and  contradicting 

each  other  at  the  same  time.  This  is  borne  out  by  three  statistics,  all  of  which 

were difficult to imagine even a few years ago.  In 1996 there are now  18  million 

unemployed  in Europe,  1.3  million declared  cases  of AIDS throughout the  world 

and  50  million  Internet  users. 

Everything seems  possible.  We now have a global economy.  Ideas, like capital, 

travel  around  the  earth  as fast  as fibre  optics  and  satellites  permit.  Every  day, 

shares  for  an  equivalent  of  US$2 000  billion  are  traded  throughout  the  world. 

Increasingly,  the  value  of  products  lies  in  their  intangible  characteristics. 

Unemployment  on the  other  hand  is a very tangible problem. 

Meanwhile,  work  continues  on  the  institutional  framework  for  Europe  with  the 
opening  of the  Intergovernmental  Conference  which  will determine  the  future  of 

the  continent  for  many years to come.  Research  policy will  have to  play  its part 

as  a force for  integration  and for  shaping  the future. 

On  a  day-to-day  basis,  in  a  European  society  which  is  torn  between  moving 

ahead  and  marking  time,  each  individual  is  at  the  same  time  a  citizen,  a 

consumer  of  products  and  services  and  a  source  of  ideas  and  patterns  of 

behaviour.  Locked  into  a  society  which  depends  ever  more  directly  on  the 

acquisition  of  knowledge,  individuals  sometimes  wonder  about  the  impact  of 

scientific  progress  on their  lifestyle  and values. 

There  is no denying that the world has become increasingly  complex.  In order to 

understand  it  better  and  to  feel  more  at  home  in  it,  individuals  require  more 

knowledge.  However,  the  answers  to  many  of the  major  problems  now  facing 

society  -  growth  and  unemployment,  and  also  health,  the  environment  and 

mobility  - have to  be sought  in science  and  technology. 

This  is  the  purpose  behind  European  research. 
It  is  not  an  end  in  itself  but  a 
means of meeting common objectives.  It is now time to change direction slightly 
in order to put it in its new context.  Hitherto research has been based largely on 
technical  achievement.  The  aim  now  is  to  make  research  more  efficient  and 
increasingly  directed  towards  meeting  basic  social  and  economic  needs  by 
bringing  about the  changes  which  each  individual  citizen desires. 

/. 

WHAT  DO  WE  NEED  FROM  EUROPEAN  RESEARCH  AT  THE 
BEGINNING  OF  THE 21ST CENTURY? 

Europe  needs  research  and  research  needs  Europe. 

With the globalization of economies and trade, the only way to solve many of our 

problems will be by bringing to bear the critical mass of Europe's own  resources 

and  knowhow.  Europe  provides  the  framework  for  national  and  local  research 

activities  and  Europe 

is 

the 

level  at  which  meetings  of  minds  and 

cross-fertilization  of  ideas takes  place. 

Article  130f of the Union Treaty establishes an original instrument, the framework 

programme  and sets out some general  objectives  for  research  in Europe: 

(i) 

to  strengthen  the  scientific  and  technological  bases  of  Community 

industry; 

(ii) 

(iii) 

to encourage  it to  become  more  internationally  competitive; 

to support  other  Community  policies. 

Four types  of activity  are envisaged: 

(i) 

(ii) 

(iii) 

(iv) 

research, technological  development  and demonstration  programmes; 

international  scientific  cooperation; 

dissemination  and optimization  of results; 

training  and  mobility  of  researchers. 

These four activities are the basis around which the fourth framework  programme 

is  organized.  They  correspond  to  areas  where  action  at  European  level  has 

proved fully justified. 

Now that it has established  its identity, European research has a value of its own. 

The  sum  is  greater  than  the  parts: joint  projects, which  are the  principal way  in 

which  it  operates,  are  an  investment  with  a  strong  multiplying  effect  in  both 

economic  and social terms. 

It  is  worth  noting  that  in  a  recent  opinion  poll  on  "Europeans,  science  and 
technology",  the  citizens  of the  Member  States supported  research at  European 
level "... for reasons of efficiency  ..." (64% of those polled thought that "... it is as 
efficient  as or more  efficient  than national research  ..."),  and considered  that  "... 

it  will increase  in importance  ..."  (79% "...  to the same extent  or greater  than  at 

present...")  and that  "...  it corresponds  with national interests  ..." (69%). 

/. 1 

General parameters 

Before  defining the  objectives  of the  new framework  programmes,  it is  essential 

to  consider  three  parameters  which  are  all  connected  in  different  ways  with 

added  value, which  is the  guiding  principle  of  Community  action: 

first  of  all,  the  time-scale  set  for  achievement  of  results  makes  it 

necessary to re-consider the time it takes for research to find its way onto 

the  market  and  into  daily  life.  For  example,  78%  of  the  revenue  of  the 

computer  industry  comes  from  products  which  have  been  on the  market 

for two years or less.  The research activities  undertaken  by companies in 

the  year  2000 will  be  aimed  at the  markets  in the  years  2003  to  2007  or 

thereabouts.  Community  research  must at the same time  prepare for the 
distant future  and take  account  of shorter  marketing  lead times. 

Second,  research  should  be  undertaken  at  European  level  only  if  it  is 

better  done  at that  level than  in the  Member  States or their  regions.  The 

framework  programme accounts for only a fraction of the research carried 

out 

in  Europe  and 

is  not  designed 

to  replace  national  research 

programmes.  On the  contrary,  research  at European  level has to  rely on 

sound  national  and  regional  structures, which  make  it easier  for  effective 

cooperation  to take  place. 

The  idea  is  to  coordinate  research  in  Europe  more  effectively  by 

ensuring  the compatibility,  complementarity  and general coherence  of the 

activities  undertaken  by  the  Union,  the  Member  States  and  in  other 

European  or  international  cooperation  frameworks. 

Finally,  as with  all  public  policies, the  Union's  research  must  comply  with 

the  principle  of  budgetary  efficiency,  since  this  will  be  a  permanent 

feature  of  the  planned  move  towards  economic  and  monetary  union. 

There will therefore  have to be a precise estimate of the critical masses of 

resources which will have to be deployed and the results expected  in each 

area  of  activity,  where  as  a  logical  consequence  topics  will  have  to  be 

chosen  more  selectively.  More than  ever  before,  European  research  will 

have to  make  a point  of being  as cost-effective  as possible. 

The  total  budgetary  allocation  will  have  to  be  decided  by  negotiation 

between  government  ministers  and  members  of  Parliament.  To  recall, 

European  research  investment  in  1995  amounted  to  1.9%  of  GDP, 

compared  with  2.45%  in  the  USA  and  2.95%  in  Japan,  where  research 

spending  has  been  increasing  by  3%  a  year  over  the  last  seven  years. 

Comparison with the major competitors  of the  Union indicates that  private 

investment  in research  in  Europe  needs to rise. 

The  level  of  research  is  a  sure  guide  to  the  confidence  of  a  country  or 

region  in  its own future.  Europe  must  "invent  tomorrow". 

1.2  Challenges  and  opportunities  (cf. annex) 

Various studies and forecasts  have been prepared  (the Commission's  "Scientific 

Indicators",  the  UK's  "Technology  Foresight',  France's  "Key  Technologies", 

OECD studies, etc.) which identify the challenges and opportunities which Europe 

will  encounter  as  we  move  into  the  next  millennium,  and  also  the  key  scientific 

and technical  areas. As examples  can be cited: 

The problems facing society in the  Union and the challenge of sustainable 
development, e.g.  the  problems  connected  with  the  need  for  mobility  (the 
negative  costs  of  traffic  jams,  accidents,  environmental  damage  and  human 
health are estimated  at ECU 250 billion a year), the ageing population and the 
increasing  cost  of  health  care  (the  percentage  of  the  population  over  75  is 
expected to increase by about 40% between now and the year 2010). 

The  concept  of  "eco-efficiency"  -  producing  more and better with less,  whilst 
respecting  the environment  - points  the way towards  reducing  the  burdens  of 
waste  and  pollution,  while  at  the  same  time  providing  the  opportunity  for 
businesses to make considerable savings. 

Market opportunities and job creation in Europe. Many areas of technology 
are  expected  to  show  rapid  growth:  examples  are  the  goods  and  services 
connected  with  environmental  protection  technologies,  an  area  where  certain 
European countries are a long way ahead (the European water market will grow 
to ECU 30 billion in the year 2000);  the biotechnologies market, which in 1996 
is  estimated  to  be worth  less  than  ECU 10 billion  but  is  expected  to  grow  to 
between  ECU 40  billion  and  ECU 80 billion  by the year 2000.  At world level, 
there is a disturbing correlation  between the loss of market shares in advanced 
technology  areas  by  European  industry,  the  rise  in  unemployment  and  the 
declining competitiveness  of European countries. 

These  trends  are  not  irreversible.  Various  studies  show  that,  for  example,  the 

rapid  and widespread  introduction  of advanced communications  throughout  the 

Union will add 3.5% to GDP growth  between now and 2010, leading directly  and 

indirectly  to the creation of six million  new jobs.  More generally,  conditions  need 

to be created which at the same time encourage the development  of high value-

added  activities,  and support  employment-intensive  growth. 

The challenge  of the globalization  of knowledge and Europe's place  in the 

world.  Two  thirds  of  world  advances  in  science  and  technology  take  place 

outside  the  Union.  Europe  currently  has  4.7  scientists  and  engineers  per 

1000  inhabitants  compared  with  7.4  in  the  USA  and  8  in  Japan.  A  new 

development  is that  together  the  total  number  of  scientists  and  researchers  in 

China,  India  and  Indonesia  is now the  same  as in the Union. 

Three  needs  arise  from  these  considerations: 

(i) 

on issues  of global  importance  (like  climatic  change  and the  emergence 

of new infectious diseases), knowledge, investment costs and risk should 

be shared; 

(ii) 

in areas where  Europe does not have expertise, it should be able to draw 

on skills  available  elsewhere  or  have  access to different  environments; 

(iii) 

Europe  should  bring  its  influence  to  bear  as widely  as  possible  (e.g. by 

defining world  standards)  in order  ultimately  to  capture  markets. 

77?e  European  innovation  "paradox". 

The  Green  Paper  on  innovation 

highlights a mismatch between Europe's scientific and technological potential and 

its record  on innovation.  For example, the total number  of patents registered  by 

Japan under the European patents system is higher than the number  applied for 

by  any  single  European  country. 

In addition,  it  costs  US$  120 000  to  file  and 

maintain  a patent  in 8 Member  States  compared  with  US$  13 000  in the  USA. 

SMEs  are a very  important  source  of innovation.  In addition to  a small  number 

of  high-tech  SMEs  (e.g.  in the  areas  of  software  and  biotechnology)  there  is a 

much  larger  number  of  conventional  SMEs  which  should  be  allowed  access  to 

research  work  and results. 

1.3  Main  objectives 

Scientific  and  technical  progress  should  pave  the  way  for  the  opening  up  of  new 

areas,  whether  they  relate to  knowledge,  ideas,  products,  processes  or  services, 

in  order  to  improve  the  quality  of  life  for  individuals  and  to  help  bring  about  the 

harmonious  development  of  employment,  the  economy  and  social  cohesion  in 

Europe.  It should  also  contribute to sustainable  development  and growth. 

If this  new  political will  is to  be  incorporated  into the  framework  programmes  of 

the  future,  within  the  guidelines  laid  down  by  the  Treaty,  while  supporting  the 

aims  of  Community  policies, various  requirements  will  have to  be met. 

It  is  essential  to  satisfy  the  expectations  of  our  citizens  for  improved 

quality  of  life,  work  and  environment,  by  making  systems,  products  and 

services  easy and safe to  use within  a perspective  of sustainable growth. 

If science and technology  are to be accepted and adopted by our citizens, 

research must be more comprehensible, more visible, and more accessible 

even though  modern  science  is becoming  increasingly  complex. 

Research  must  have  a  positive 

impact  on  employment  and 

competitiveness,  by  being  based  on  "...  non-material  investment  in 

human  capital  and  R&D,  innovation  ...",  as  was  emphasized  at  the 

Florence  European  Summit  in June  1996. 

Some  economists  consider  that  technological  change  and  the  level  of 

educational attainment account for 80% of growth.  The generation of new 

ideas, which  is a virtually  unlimited  resource,  is an  increasingly  important 

factor here and makes it possible to transcend physical limitations.  Recent 
studies1  have  shown  that  in  the  G7  countries  an  increase  in  research 
spending  of  US $100 will  increase  GDP by an average  of  US $123.  The 

way  to  encourage  the  emergence  of  an  innovatory  tertiary  sector,  which 

will create jobs, is to have high performance industries and services based 

on  high  research  intensity. 

The frontiers  of  knowledge  must  be  pushed  back  in a  number  of  key 

areas.  This  will  require  more  than  ever  respecting  the  principle  of 

excellence.  Working  together  the  best  research  teams  in  Europe  have 

recently  succeeded,  by  networking  and  by  pooling  their  equipment,  in 

sequencing the yeast genome, which is a world first and prepares the way 

for many medical and industrial applications.  Europe must be a reference 

and focal  point for world  science. 

1 

International  R&D  spillovers.  European  Economic  Review,  vol.  39, No  5,  May  1995. 

7 

A  more  determined  effort  must  be  made  to  create  a favourable  climate 

for  research  and  innovation  in  Europe.  The  framework  programme 

must  help  the  Member  States  to  adapt  their  research  and  innovation 

systems  and  make them  more  coherent. 

Efforts  must  continue  at  strengthening  partnership  links  throughout 

Europe  between  scientists,  industry,  universities  and consumers  so  as to 

share out the  risks, investment  costs and benefits of research and to  help 

create  a  real  European  scientific  area  and single  market.  In this  respect 

it is encouraging  to  note that  in some industrial programmes two thirds  of 

the partnerships  established  for a given project  carry  on after  it has  been 

completed. 

List of criteria 

On the basis  of these objectives  it is possible to draw  up a list of criteria.  Now 

that  a  measure  of  maturity  has  been  achieved, the  fifth  framework  programme 

should  provide  the  opportunity  for  choosing  topics  more  selectively,  by 

concentrating on those areas where Community research can play a decisive role. 

Each  topic  should  be  selected  according  to  an  optimal  combination  of  criteria 

under the following  three  headings. 

(i) 

"Basic  principles", in particular: 

the  value  added  at  European  level, with  reference  to  the  principle  of 
subsidiarity  and the resources available; 

the  concepts  of  public  and  social  acceptability,  which  ensure  that 
research is meaningful to European citizens. 

(ii) 

"Major concerns", like those repeatedly proposed at European summit meetings, 
in particular: 

tackling unemployment, through the possibilities of creating new jobs, or 
through a high level of employment  in the areas selected for research; 

competitiveness, by concentrating on Europe's real assets (for example 
its knowhow, and its production and exploitation capacity), on the basis of 
the priorities  identified by industry and market development prospects; 

helping to establish the  information  society; 

promoting  a  model  for  sustainable  development  by  improving  living 
conditions  and  reducing environmental  damage; 

preparing for  the  accession  of  new  Member  States  from  Central  and 

Eastern  Europe and the  Euro-Mediterranean  partnership. 

(iii) 

Support  for  Community  policies,  in particular through: 

helping to develop  policies for  agriculture  and fisheries; 

defining the tools  and systems  needed for  transport; 

knock-on  effects  on the  European  regions  (cohesion  policy); 

expanding  knowledge  and  developing  new  techniques 

for  health 

protection; 

developing  and  refining  new energy  technologies; 

involving SMEs more  in research  and innovation. 

//. 

MOVING  FROM  THE  FOURTH  TO  THE  FIFTH  FRAMEWORK 
PROGRAMME 

The vast input already received for the next framework programme makes it clear 
that merely continuing the fourth framework programme would not be appropriate. 

The  priority  would  seem  to  be  to  consolidate  our  research  efforts.  Secondly, 

although  it  is  worth  persevering  with  certain  projects  and  tried  and  tested 
principles  and  procedures,2  it  is  essential  to  incorporate  new  topics  and  new 
ways of organising  research.  Attempts to shift the balance must be viewed in the 

light  of  the  initial  findings  arising  from  analysis  of  the  fourth  framework 

programme. 

11.1  Progress  with the fourth  framework programme 

The fourth framework programme has been running for 18 months and is proving 

extremely  attractive. 

In  1995  more  than  20  000 proposals  were  received, 

resulting  in 3 000  projects  involving  more than  10 000  participants. 

It can  be  observed  that  the  size  of  projects  is tending  to  increase,  including  on 

average  more  participants  from  a  larger  number  of  Member  States,  the  rate  of 

renewal  of participants  is increasing  (37% on average  of which 40% are SMEs). 

One  area  of  concern  is the  continual  increase  in the  number  of  proposals  not 

accepted:  on  average  only  1 in 6  has  received funding. 

These  preliminary  figures  clearly  indicate  a  need for  better  targeting  of calls  for 

proposals  and for  more  concentrated  efforts  as  a way  of reducing  the  dispersal 

of resources and the administrative  burden.  A detailed evaluation of projects will 

accompany  the formal  proposal for  a fifth framework  programme. 

Most  contributions  received  from  Member  States  and  other  bodies  with  an  interest  in the  future 
of Community  research emphasize the positive aspects of the framework  programmes,  particularly 
in the fields  of industrial research, establishing networks of researchers and encouraging researcher 
mobility. 

Over  time,  apart  from  various  "success  stories"  (eg  sequencing  of  the  yeast  genome,  parallel 
computers,  télécoms standards, first demonstrations of nuclear fusion)  it can be said that  100 000 
partnership  links  have  been  established  across  Europe,  which  often 
lead  to  commercial 
relationships. 

10 

11.2  Shifting  the  balance  to  improve  the  impact  on  society  and  the 

economy 

The  new  general  policy  guidelines  to  put  research  at  the  service  of  the  people 

can best be achieved by improving the bases of European competitiveness within 

a perspective of sustainable development. This can be done by, at the same time, 

providing  better  support for the production  of new  ideas, taking  more account  of 

the realities of demand and reinforcing  links with organizations which can help to 

exploit  the  results. 

Supporting  basic  research 

Reduction  in  the  period  of  time  which  elapses  between  "discovery"  in  the 

laboratory  and  putting  products  "on  the  market",  as  well  as  the  wider  range  of 

inputs  required  for  the  development  of complex  systems, tends  to  eliminate  the 

old distinction  between  basic  research  and  industrial and applied  research.  It is 

now  difficult  to  catalogue  the  discovery  of  a  new  computer  algorithm  or  a 

breakthrough  in  the  sequencing  of  genomes,  since  the  time  between  the 

discovery  of  new  knowledge  and  its application  may  be extremely  short. 

Consequently  it is essential to maintain a research context which  is open to  new 

ideas,  for  work  on  basic  questions  which  may  possibly  generate  new  fields  of 

activity. 

Bringing  research  more into line  with the real market 

Discussions  of the framework  programme  have always touched  on the  distance 

between  research  and  the  market  and  the  difference  between  "academic"  and 

"industrial"  research.  This  is  how  the  idea  of  "precompetitive"  research  came 

about,  although  its  boundaries  have  become  rather  vague  and  in  practice  it  is 

largely  ignored  by the  major  competitors  in Europe. 

Competition,  whether  intellectual,  industrial  or  economic,  is  one  of  the  basic 

driving forces behind research.  However, three observations should be taken into 

account when  preparing the framework  programme.  First,  research should  now 

be viewed  within  its world  context;  second, the  spiralling  costs  of  research  and 

development are now beyond the means of individual operators or even individual 

states, which  means  that  risks  and  investment  costs  have  to  be  systematically 

shared  out; third,  it is important to  consider  how  results can  be exploited. 

11 

Experience  shows  that  we  should  be  moving  from  research  aimed  purely  at 

technological  achievement  to  research  aimed  at  satisfying  consumers  by 

providing  high  quality  goods  and  services  which  are  produced  in an  acceptable 

manner  at  low  cost  and  which  are  at  the  same  time  highly  diversified  and 

personalized  and  rapidly  available. 

The  need  to  involve  users  much  more  in  project  design,  which  is  beneficial  in 

terms of meeting  real needs, presupposes that  much greater attention should be 

given to demonstration and prestandardization activities.  This will require varying 

the  level  of  support  given, with  appropriate  transparency,  whilst  complying  with 

international rules on research aid and the Community framework for state aid for 

research. 

Doing more  to exploit results 

In previous framework  programmes, not enough has always been done to exploit 

results.  Additional  efforts  are  required  in  order  to  extend  the  relationships 

between partners and networks so that results are better exploited and to ensure 

that risks are funded by calling on a wider  range of sources of finance,  including 

financial  institutions  and  risk  capital  organizations. 

The  rules  on  intellectual  property  are  closely  linked  with  the  question  of 

partnership  and  exploitation.  They  will  have  to  be  changed  to  take  account  of 

technological  progress,  to  provide  more  incentive  for  the  exploitation  of  results 

and to ensure that  European  interests  are pursued  at world level. 

12 

///. 

PRELIMINARY  PROPOSAL  FOR  THE  STRUCTURE  OF  THE  FIFTH 
FRAMEWORK PROGRAMME3 

Given  the  framework  and  list  of  criteria  set  out  above,  an  initial  outline  can  be 

drawn  of  the  structure  and  content  of  the  future  framework  programme  and  of 

ways  of implementing  it. 

111.1  Content 

Without  prejudice  to  the  final  structure,  the  number  of  subjects  has  been 

deliberately  limited  and the following three  priorities  can  be  identified  along  with 

three  horizontal  activities. 

///. 1.1  Priority  topics (research at  the service  of the people) 

The focus  is on the targeting  of  activities  and the  impact  the  research will  have 

on  people's  lives. 

• 

Unlocking  the  resources of the  living world and the  ecosystem:  The  life 
sciences  and the  environment  are  literally  vital to  people's  lives  and  have  an 
especially  critical  impact  on health. Europe  must realize the full potential of its 
scientific and technical assets in these areas, which are also promising in terms 
of the growth of markets and the creation of jobs. 

This topic will in particular cover the acquisition and utilization of knowledge about 
fundamental  mechanisms  affecting  human life, especially  in the fields of health 
and food. Emphasis will be placed in particular on the acquisition of fundamental 
knowledge,  the  prevention  of  disease,  (research  on  the  brain  and  newly 
developing infectious diseases) and the quality, safety and renewable  nature of 
bioproduction, while complying with ethical rules. 

For the environment, the development of environmental regulations, tax incentives 
and wider adherence to the principle of responsible behaviour call for a greater 
understanding of the interplay between environmental factors and the introduction 
of advanced forms of technology in order to safeguard natural resources, reduce 
the use made of them and tackle the problems of pollution and waste. 

By  extension,  this  discussion  also  covers  the  EURATOM  framework  programme. 

13 

This  highly  interdisciplinary  research  could in particular  include  in-depth study of 

matters relating to global environmental change, the basic cycles, natural hazards 

and  European  ecosystems. 

Creating  a  user-friendly  information  society:  Europe  has  made  a name  for 

itself  by  developing  the  concept  of  an  "information  society",  linking  together 

technical, economic and industrial considerations and the social dimension.  The 

very  numerous  applications to which  it lends  itself  in virtually  all areas  of activity 

underline  its  enormous  potential  for  increasing  the  competitiveness  of  industry 

and satisfying  the  demands  of the individual. 

The  anticipated  technological  and  industrial  convergence  between  computers, 

telecommunications  and the media  is now rapidly  coming  about through the use 

of digital systems and multimedia.  The non-material aspects of this development, 

in  particular  the  "content"  of  software,  are especially  important.  The  aim  now is 

to  identify  the  research  needed for  an  information  society. 

This research could aim at the development of technology, infrastructure, services 

and  applications  that  are  interoperable  at  world  level.  It  will  provide  the 

foundations for very many jobs in tomorrow's world and will contribute toward the 

decentralization  and  personalization  of  activities  in  a  more  competitive  and 

innovative  framework. 

The  identification  of and experimentation  with these  new concepts  and tools will 

give  people  easier  access  to  information  and  education  throughout  their  lives, 

help  people  to share  the  cultural  heritage  and  preserve  linguistic  diversity. 

Promoting competitive  and sustainable  growth:  This topic covers  a range of 

priorities  which  are  the  result  in  particular  of various  Community  policies.  They 

have  a  major  impact  on  the  competitiveness  of  the  Union  in  view  of  the 

considerable  number of jobs involved and their common feature  is that they lead 

to a reorganization  of production  systems  in the  interests  of sustainable growth. 

Conventional  forms  of  industrial  manufacturing  as  well  as  the  design  and 

production  of new products and materials will, for example, have to integrate the 

notions  of  product  "life  cycle",  lower  costs, the  development  of  standards,  and, 

more generally, "externalities", all of which have too often been disregarded  in the 

past.  Services and intangible activities, techniques for the design, production and 

management  of complex systems and ergonomie considerations, all of which are 

becoming  increasingly  important  in the  economy,  could also  be developed. 

14 

In  the  energy  domain,  priority  could  be  given  to  the  development  and 

demonstration  of safe, acceptable  energy  systems which comply with  standards 

and environmental  constraints  and  are  competitive  in terms  of  production  costs 

and the  global  economy.  Research  might  also  cover  the  rational  management 

of energy  in everyday  life ( e.g. the "town and home of the future"), as well as the 

various  options  as  regards  the  production  and storage  of energy  with  a view to 

the  medium-term  and long-term. 

As regards the mobility  of passengers  and freight,  research  could be directed in 

particular  at  optimizing  efficiency,  safety,  environmental 

impact  and 

competitiveness as these are all necessary to promote the quality of products and 

services, to  ensure  their  integration  at the  European  level and to  capture  world 

markets.  Particular  attention  could  be  paid  to  the  question  of  intermodality, 

combining  different  transport  modes. 

In the agricultural sector, it is necessary to flesh out the concept of an "integrated 

rural development  policy". All activities  in rural areas,  including forests,  could be 

linked within an integrated approach, based on the need for competitiveness  and 

sustainability  and  ensuring  optimum  land  use  in these  areas.  New  instruments 

and systems to optimize and diversify  production  need to be developed, focusing 

on complete cycles and sequences, multifunctional management  (production and 

ecological and social aspects) and links between activities, incorporating  quality, 

health,  environmental  and socio-economic  considerations  at all levels. 

Lastly,  in the  fisheries  sector,  a multidisclipinary  approach  could  be  adopted  to 

shape  the  future  of  this  industry  and  help  to  restore  fish  stocks  to  their  normal 

levels. 

III. 1.2  Horizontal  activities 

These  activities  will  include  two  components:  one  general  component  designed 

to  meet  common  needs  and  provide  general  coordination,  and  the  other 

component  related  to  the  list  of  priority  topics  above. 

Improving human potential: Greater effort is needed to improve the training and 

mobility  of scientists, including those in industry, and to encourage them to seek 

scientific  research  posts  in  Europe.  This  would  require  the  provision  of 

compatible 

training  courses  and  equitable  treatment  of  visiting  scientists 

throughout  Europe,  extending  the  communication  and  exchange  networks 

between  laboratories  and companies  and granting  access to major facilities, the 

duplication  of  which  should  be  avoided,  while  ensuring  that  new  projects  are 

better  coordinated. 

15 

The promotion of a European identity by introducing a European science prize (as 

recently  suggested  by  the  European  Parliament)  and  the  qualification  of 

"European  scientist"  could  be  pursued.  Better  links  could  also  be  sought  with 

education  and training  policy  mechanisms. 

In a socio-economic  context,  action will be needed to identify  social needs more 

clearly  and to improve  understanding  of the  social  impact  of  research  work,  the 

changes  taking  place  in  European  society  and  the  diverse  nature'  of  its 

component  parts and foundations, eg by increasing capacity for foresight and the 

study  of various  scenarios  resulting  from  the  introduction  of technology  at work 

and 

in  the  economy,  education  and  culture. 

New  organisational  and 

developmental  models  which  may  help to  reduce  problems  of  exclusion  and to 

achieve  a breakthrough  in the  creation  of  new jobs  might  be analyzed  together 

with the  most  promising  experiments  carried  out  in this area. 

Innovation  and  participation  of  SMEs:  Access  to  all  research  and  research 

results  by a larger  number of "conventional" SMEs and mid-sized firms could be 

facilitated  through  the  introduction  of  a  single,  simplified  framework  and  the 

development  of technology  transfer  mechanisms. 

In parallel, following the guidelines  laid down in the  innovation action  plan, more 

attention could also be given to the ways in which results are analyzed and used 

to the  best  possible  effect  and to the  establishment  of  links with  risk capital  and 

financial engineering  mechanisms,  as seen in the success  of the  NASDAQ.  An 

analysis  could  also  be  made  of different  ways  of encouraging  research. 

Confirming  the  international  role  of  European  research:  The  following 

guidelines  could  be  implemented  in  line  with  the  Union's  political  objectives 

(particularly  its foreign  policy  objectives)  and the principle  of mutual  interest  and 

on  the  basis  of  bilateral  or  regional  agreements,  and  decisions  to  start 

programmes  and  specific  projects: 

the  direct,  improved  involvement  of  certain  outside  participants 

in 

research programme  projects.  Particular  attention  could be given to the 

Central  and  East  European  countries  in  order  to  help  with  their  rapid 

accession to the  Union, and to encourage  them to become  fully  involved 

in research. At the same time, for  mutual  benefit, greater  participation  of 

the  industrialized  countries,  the  emerging  economies  and  possibly  the 

countries  of the  Mediterranean  could  be envisaged. 

16 

the introduction  of schemes  to improve  cooperation  at European  level 
and  to make the European  research  area more attractive  to  scientists 
from countries with which the Union has beneficial links; 

the definition of specific international scientific cooperation projects, along 
with  the  appropriate  resources,  either  on  specific  topics  or  relating  to 
specific countries or regions such as the Mediterranean, the CIS and the 
developing  countries,  to  support  external  policy  objectives,  involving 
industry and European centres of excellence. 

III.2 

Implementation 

With  each  framework  programme,  the  question  arises  of  the  "dispersion"  of 

projects  and  resources.  There  is  also the  problem  of  incorporating  novel  ideas 

that  arise  during  the  course  of  the  programme  and  the  difficulty  of  winding  up 

activities,  each  of which  is of interest,  de facto, to  a particular  group  of people. 

The time  has  come  to  be  more  selective  about  topics  and to  ensure  a  greater 

concentration  of  resources.  For  it  to  succeed,  this  approach  must  be 

accompanied by greater effectiveness  in implementation while complying strictly 

with  the  principle  of transparency,  especially  in the  project  selection  process. 

The  Commission  will  also  work  to  ensure  the  avoidance  of  fragmentation  in 

Community  research. 

Increasing  flexibility in research  work and the decision-making  process 

The procedures set up over the years for the framework  programme  need 

to  be  slimmed  down, while  retaining  the  defining  principles  of equality  of 

treatment  and  access  and of  transparency. 

There 

is  much  room  for 

improvement 

in  the 

institutional  support 

arrangements.  At the Intergovernmental Conference, the Commission will, 

for  example,  advocate  a  simplified  decision-making  procedure  for 

implementation  of  research  policy  and specific  programmes  and for  their 

adoption  by  a  qualified  majority.  Matters  could  also  be  simplified  by 

reducing  considerably  the  number  of  programmes  and the  number  of 

committees. 

It  needs  to  be  possible  to  supplement  and  adjust  work  programmes  at 
regular  intervals  in  line  with  scientific  and  technical  changes  and  policy 

17 

developments.  In the event of an emergency, as recently with the problem 

of  "mad  cow  disease",  there  needs  to  be  an  arrangement  for  the  rapid 

regrouping  of  several  areas  of  action  around  a single  target,  for  bringing 

together  the  resources  needed  and,  where  appropriate,  for  redirecting 

effort. 

Ensuring  more  efficient management 

A  slight  improvement  would  seem  to  be  possible  where  management 

techniques  are  concerned.  The  Commission  has  called  for  ideas  about 

possible  ways  of  simplifying  internal  management  procedures  and  the 

procedures  governing  external  contractual  relations. 

A stated aim is to shorten the deadlines and reduce administrative costs, 

e.g. when selecting proposals and concluding contracts, and when making 

payments,  a  matter  of  particular 

importance 

for  small 

firms  and 

researchers  in receipt of grants. 

The  calls  for  proposals  must  be  published  on  a  regular  basis,  be 

compatible  with  the  working  patterns  of  industry,  research  centres  and 

universities, and meet the requirements of sound management.  Where the 

procedures  governing the selection  of proposals  are concerned, it would 

seem  to  be  necessary  to explain the selection  criteria  more  clearly. 

Lastly, the  need  is being felt for some  kind of  monitoring  tool with  which 

to measure, in real time and on the basis of objectives, indicators and high 

quality  statistics, the state  of progress  and  performance  of the  framework 

programme, and a forum (e.g. on the Internet) for ongoing dialogue with 

participants  in  the  Fifth  Framework  Programme  and  other  interested 

parties. 

Extending  the range  of instruments  and means of coordination 

The  approach  so  far,  which  has  very  largely  consisted  of juxtaposing  a 

large  number  of  projects  (50/50  partnership  for  a  project  generally  of  a 

modest  size),  should  be  replaced  by  a  wider  range  of  modalities  and 

financial  instruments  more  appropriate to the various  objectives,  whereby 

it  is  possible  to  establish  closer  links  between  Community  activities  and 
national  activities  or  between  national  activities  on certain topics. 

In order to be able to respond rapidly to the considerable pressure to allow 

spontaneous  proposals,  to  include  emerging  interdisciplinary  research 

topics  (e.g. neurosciences)  and to  allow  for the  unexpected, there  needs 

to  be  some  leeway,  albeit  strictly  controlled  in terms  of  decision-making; 

The following  instruments  in particular  are envisaged: 

a  small  number  of  horizontal  programmes  with  a  strong  focus  on  generic 
technologies applicable to many areas, capable of giving rise to and sustaining 
more targeted research topics not necessarily always specified initially; 

"task forces". This approach  is that of targeted  research, open to all comers, 
on  unifying  topics.  Task  force  activities  are  a new concept  introduced  by the 
Commission on an experimental basis with the fourth framework programme; 

This type of research is based on the idea of placing advances in knowledge and 
technologies  at  the  service  of  central  societal  and  industrial  objectives,  thus 
meeting the three objectives of transparency,  selectiveness and concentration. 
In practice, the task forces are primarily coordination instruments for formulating 
and  monitoring  the  implementation  of  a  limited  number  of  new  short-term 
activities, for which priorities must be identified in close consultation with industry, 
consumers and governments. 

instruments  for encouraging cooperation  between  Member States.  To be 
truly  significant,  European  research  must  not confine  itself to work  carried out 
together  solely  within  the  specific  programmes.  Depending  on  the  genuine 
desires of the Member States, the Commission is willing to promote this approach 
on  specific  topics,  making  use  of  the  possibilities  afforded  by  Articles 130k 
(supplementary programmes), 130I (participation in projects undertaken by certain 
Member  States) or 130n (participation  in joint undertakings)  of the Treaty. 

Where  thèse  first  three  instruments  are  concerned,  COST  could  be  used, as  it 

was to begin with, as a breeding ground for ideas, while links with EUREKA could 

be  improved  in  order  to  direct  the  results  of  Community  research  towards  the 

market.  This  would  necessitate  closer  interaction  between  the  framework 

programme  and  these  two  forums  for  cooperation  whose  strategy  is  currently 

under  review. 

19 

In  addition,  there  is  a  need  for  more  exchange  of  information  and  better 

research  policies  and 
coordination  between  Community  and  national 
investments.4  Greater  consistency  would  entail  a  competitive  advantage  and  a 

financial  saving,  enabling  the  Union  and  the  Member  States  to  focus  more 

effectively  on  their  respective  objectives. 

to ensure that the framework  programme  is better equipped to provide  effective 

support  for  other  Community  policies,  there 

is  a  need  for  a  significant 

improvement 

in  the  mechanisms  for  liaising  and  interfacing  with  the 

instruments  of  the  other  policies  so  as  to  make 
instruments 
"interoperable"5  with  research  and  to  make  the  Community  activities  more 
effective. 

these 

International cooperation6 and the Structural  Funds are chiefly concerned.  In the 
latter  -case,  the  aim  is  to  encourage  the  Member  States  to  devote  a  larger 

proportion  of  structural  resources  to  research  in  order  to  foster  the  rapid 

development of their potential for scientific excellence and confirm the catching-up 
process  that  has begun7. 

the Joint  Research Centre:  the  role and tasks  of public  laboratories  are  being 

carefully examined in all the major industrialized countries.  The laboratories  that 

go to  make  up the JRC should, similarly,  be used for clear  and ambitious  tasks, 

striving  for  excellence  and  focusing  on  a  few  aspects  in  line  with  new  needs 

emanating  from  industry  and the  market.  It is necessary  in  particular: 

to make available independent and impartial expertise to meet the needs 

of Community  policies and contribute towards the scientific basis for Union 

policy  decisions; 

to  ensure  closer  links  between  the  institutes  and  the  national  and 

international  laboratories. 

See Article  130h of the  Union  Treaty:  "The Community and the Member States shall  coordinate 
their research and technological development activities so as to ensure that national policies  and 
Community policy  are mutually consistent." 
Experience  with  the  task  force  approach  has  shown  how  difficult  it  is  to  involve  different 
programmes  (e.g.  research  and  education  programmes)  in  a joint  call  for  proposals  exercise. 
Where  international  scientific  cooperation  is  concerned,  improvements  are  already  in  sight  with 
programmes  such as TAC1S, PHARE  and MEDA  being opened  up more widely  in order to allow 
the  participation  in Community  research  projects  of entities  from  the  countries  concerned. 
A communication  on the relationships between research and the structural  funds  is currently  being 
prepared  by  the  Commission. 

20 

The  JRC  needs  to  be  given  the  organizational  flexibility  it  requires  to  be  in  a 

better  position  to  cooperate  with  industry  and  users  within  a  properly  adapted 

legal framework.  The emphasis  will be on utilizing the  know-how  and expertise 

of  the  institutes'  researchers  and  facilities,  which  in  many  areas  are  unique  in 

Europe, transfers  of technologies,  and industrial joint ventures. 

21 

CONCLUSIONS 

The  preparations  for the fifth framework  programme  are taking  place  in a period 

of  rapid  and  far-reaching  change.  The  critical  problem  of  employment,  the 

increasing  globalization  of the  economy,  and the  movements  in  progress  in  the 

building of Europe (Intergovernmental Conference, economic and monetary union, 

enlargement)  introduce  many  additional factors  in this exercise. 

We  therefore  need  to  examine  under  a  new  light  the  rationale  for  European 

research. 

If  it  is  to  continue  to  exist,  its  tasks  must  be  more  transparent  and 

visible, it must be carried out more simply, and its results must be more effective. 

A first set of guidelines can be drawn.  While maintaining the continuity  of certain 

recognized  achievements,  new balances  must be established  and the content of 

research  topics  renewed  in the  light  of  the  challenges  and  opportunities  of  the 

horizon 2000+. 

Basically,  it  is  a  question  of  moving  on  from  research  focusing  solely  on 

technological  performance  towards  research  focusing  on  the  citizen  and  the 

response to  economic  and social  needs. 

In order  to  succeed, a strong  political will  based  on consensus  is  needed.  The 

Commission 

invites  discussions  and  reactions 

to 

these 

first  guidelines. 

Subsequently, 

it  will  be  submitting  detailed  proposals  to  the  Parliament  and 

Council. 

22 

Fact, figures and trends 

1.  Europe's  position  in world  research 

2.  The  European  paradox 

3.  European  research within the international technological  scene 

4.  American and Japanese  research  efforts 

5.  SMEs, research and employment 

6.  Visions of the future and priorities 

7.  Society's  needs and market prospects:  some  examples 

Sustainable development  and the  environment 

Biotechnologies 

Health 

The information  society 

ii 

1.  Europe's  position  in world  research 

The share of GDP devoted to research, expenditure by industry on research, expenditure on research per inhabitant, the 
total  number  of researchers  and  of researchers  in companies  in proportion  to the  active  population  as a whole  are all 
lower in the European  Union than their equivalents in the United  States of America  and Japan. 

EU  15 

USA 

JAPAN 

Total R&D expenditure (million ecu) 1994 

121,882 

1 4 2 , 0 47 

104,069 

Total R&D expenditure as a % of GDP 1995 

1.91 

2.45 

2.95 

Total R&D expenditure per inhabitant (ecu) 1994 

329 

545 

833 

%  of  total  R&D  expenditure  financed  by  the  State 
1893 
%  of  total  R&D  expenditure  financed  by  industry 
1993 

39.6 

39.2 

19.7 

53.5 

58.7 

73.4 

Number of researchers  1993 

774,071 

9 6 2 , 7 00 

5 2 6 , 5 01 

Number of researchers  per thousand  active  persons 
1993 

4.7 

7.4 

8.0 

Number of researchers in companies  1993 

3 7 6 , 0 00 

7 6 5 , 0 00 

3 6 7 , 0 00 

Number  of  researchers  in  companies  per  thousand 
active  persons  1993 

2 

6 

6 

Source:  European Commission DG XII, from  data supplied by OECD 

Observing the major indicators (expenditure on research, the number of researchers) for other regions of the world reveals 
that the nations of the Triad are no longer the only players on the international  scientific  and technological  stage.  New 
powers are emerging and progressively hoisting themselves up to the level of the most advanced countries. 

Main indicators for some areas of the world 

Gross Domestic 
Expenditure on R&D 
(  $ billions) 

GERD/Gross 
Domestic Product 
% 

R&D scientists & 
engineers (000s) 

R&D scientists per 
thousand population 

Central  &  Eastern  European 
Countries 
Israël 
Latin  America 
NICs 

China 
India 

2.89 
1.24 
3.93 
10.73 
22.24 
7.1 

1.5 
1.9 
0.4 
1.3 
0.7 
0.8 

285.5 
20.1 
158.5 
136.7 
391.1 
106.0 

2.2 
3.8 
0.3 
1.5 
0.3 
0.1 

Source: European Commission DG XII  (1994) European Report on S&T 
Indicators;  UNESCO; OST estimates and treatment, 1995 

UNESCO, World Science Report 

lit 

2.  The European paradox 

World share of publications in % 

EU  15 
USA 
JAPAN 
OTHERCOUNTRIES 
WORLD  -  Total 

| 

1981 
29 
37 
7 
27 
100 

1993 
32 
36 
8 
24 
100 

| 

Europe remains a major  scientific  power:  about one-
third  of  the  world's  scientific  publications  originate 
in  the  European  Union  and  Europe's  share  of  this 
total  has  even  increased  in  the  last  few  years.  An 
analysis of the patents registered  in the United  States 
and  in Europe  reveals, however, that  European  tech 
nological performance  is, overall, weaker than that of 
its competitors:  this is the "European  paradox". 

World share in % terms of registered  patents 

EU  15 
USA 
JAPAN 
OTHERCOUNTRIES 
WORLD  -  Total 

In  the  USA 

In  Europe 

1990 
23 
45 
25 
7 
100 

1993 
18 
50 
24 
8 
100 

1990 
46 
26 
21 
7 
100 

1993 
46 
29 
18 
7 
100 

Source:  European Commission DG XII, OECD,  EUROSTAT 

If we break  down  the  shares  of  European  and American  patents  worldwide  by  field,  what  clearly  emerges  is the pre 
dominance  of Japan  in advanced  technologies, the importance of traditional  sectors in Europe and the substantial pres 
ence of American  industry in all sectors. 

The positions of the Triad by technological  area, measured  in patents, 1993 

European patents world share  (%) 

US patents world share  (%) 

EUROPE 

European Union 

USA 

Japon 

European Union 

USA 

Japon 

Electroncis/  electricity 

Instruments/optics 

Chemistry/pharmaceuticals 

Industrial  processes 

Mechanical 
engineering/transport 

Consumer goods 

34.2 

37.8 

40.3 

50.1 

58.5 

64.0 

30.0 

32.4 

33.7 

25.6 

19.2 

16.9 

WE 

jijl&ffilj 

Source: USPTO data; OST and CHI-Reasearch  treatments, 1995. 

31.8 

23.4 

20.0 

16.6 

15.5 

8.0 

m $ 

11.5 

14.9 

28.2 

22.3 

23.6 

19.1 

46.7 

50.8 

51.0 

50.5 

45.4 

50.1 

35.4 

28.0 

19.7 

19.3 

22.5 

12.5 

•iaiiiitii&iii* 

WÊM 

BMI8 

iiiiiiiiiiiiiil* 

ïiiiliiiiiitiiéiiiêi* 
UNESCO World Science Report 

c^ 

,;T 

3.  European research within the international technological scene 

A decline in the balance of trade between the Union and the rest of the world  for high-level  R&D goods  indicates 
that  European  technological  competitiveness  is being  eroded:  in the last ten  years, the deficit  has increased  ten 
fold. 

Trade balance in thousand million dollars 

Industrial 
sectors, 
which: 

of 

European 
Union 

High-level  R&D 

Mediunrvlevel 
R&D 

Low-level  R&D 

-2.21 

6 9 . 93 

3 5 . 75 

1982 

USA 

Japan 

European 
Union 

1991 

USA 

Japan 

13.48 

15.98 

-23.64 

12.48 

5 2 . 36 

6.23 

-18.01 

54.92 

2 4 . 07 

8 7 . 79 

-23.44 

133.34 

5.54 

-43.05 

-9.21 

Source:  Chelem  CEPII;  OSTtraitement  OST,  S&TIndicators 

1996 

US Technology Position Relative to Japan & Europe 

Lag 

Parity 

Lead 

Substantial 

Slight 

Slight 

Substantial 

E n e r gy 

Energy  efficiency 

Storage,conditioning,  distribution  & 
transmission 

Improved  generation 

E n v i r o n m e n t al 

q u a l i ty 

Monitoring  &  assessment 

Pollution  control 

Remediation  &  restoration 

I n f o r m a t i on  &  c o m m u n i c a t i on 

Components 

Communications 

Compouting  systems 

Information  management 

Intelligent  complex  adaptive  systems 

Sensors 

Sottware  and  toolkits 

L i v i ng 

s y s t e ms 

Biotechnology 

Medical  technologies 

Agricultural  and  food  technologies 

Human  systems 

M a n u f a c t u r i ng 

Disciete  product  manufacturing 

Continuous  materials  processing 

Micro/nanofabrication  and  machining 

M a t e r i a ls 

Materials 

Structures 

T r a n s p o r t a t i on 

Aerodynamics 

Avionics  &  controls 

Propulsion  &  power 

Systems  integration 

Human  interface 

-
• 
• 

• 

«• 

o 
o 
o 

*. 

«a 

— 

o 

E> 

o 
•  > 

o 

CO 

• 

o 

y 

<p 

O 

«= 

o 

«• 

• 
• 
• 

«• 

• 

o 

<^ 

O 

> 

— 
• 
-» 
— 

> 

• 
• 

• 
• 

«• 

• 
• 
• 

o 

<s 

C= 

O 
> 

-» 

Source:  National  Critical 
Technologies  Review  Groups 

Science  Engineering 

Indicators  1996 

A  comparison  of 
the  American, 
European  and  Japanese  positions  in  a 
series of "critical  technologies"  shows 
that,  despite the erosion  of its position 
in some  sectors, the USA continues  to 
dominate  the  international  technologi 
cal scene. 

US Technology  Position 
Relative  to: 

Improved 
^> 
-» 

Declined 

Maintained 

*a 

«• 

O 
• 

Japan 
Europe 

1990-94  Trend 

4.  American and Japanese research efforts 

United States of America 

Although  there was a nominal  increase  between  1990 and  1996 in the American  federal  budget  for research,  in fact it 
declined  slightly in real terms. The origin of this fall  was a reduction  in military R&D funding. 

On the other  hand,  civilian  research  expenditure  has increased  in real  terms by $3.4 billion  in the last  five  years. The 
relative shares of the health, space, energy and basic research sectors in the federal  budget  increased. For 1997, despite 
budgetary  restrictions, the Clinton/Gore Government  proposed  a budget  increase of 1.6%. 

Evaluation of priorities of American federal R&D funding 
(R&D budget appropriations by socio-economic objective) 

-

7990 

1995 

1996 

Total value (in $ million) 

63 781 

70  309 

70 503 

Defence 
Health 
Space  research and technology 
Science 
Energy 
Natural resources and environment 
Transport 
Agriculture 
Other 

62.6 
13.0 
9.0 
3.8 
4.3 
2.2 
1.6 
1.5 
2.0 

54.8 
16.2 
11.2 
4.0 
4.1 
2.9 
2.7 
1.7 
2.4 

53.3 
16.7 
11.2 
4.3 
4.4 
3.1 
2.8 
1.7 
2.5 

Percentage  total 

100.0 

100.0 

100.0 

Source:  National  Science  Foundation 

Between  1991 and 1995, funding  for American research programmes based on partnerships with the private sector grew 
considerably  in number. 

Selected Federal Partnership with Industry 

SEMATECH - Consortium on semiconductor tecrnxriogy 

TRP - Technology Reinvestman} Project 

CRADAs - Cooperâtsvè Research mû  Development Agreements 

M€P - IvUmutacturtng Extension Program 

ATP ~ Advanced TechooJotiy Project 

S8IR ~ Small Business Invôstmont m Research 

S 

«  ' 

1000 

1388 

1989 

1990 

1991 

1902 

1993 

1995 

Ysarr, show" zm fecal wm,  K-.-j. FY'1^5 , 1  Octets  '**« i;; 30 S~ptac>bor KKK; 

Source:  Department  of  Commerce  data,  1995 

UNESCO,  World  Science  Report 

: 

f" 

Japan 

While occupying a leading position  in the application  of technology,  but behind the United  States and Europe in basic 
research  Japan has begun to make  massive  investments  in science  and  human  resources  for  research  purposes  At the 
purposes. At tne 
same time, its level of industrial research remains high. 

Increases in the Japanese  public  research  budget  in 1996: 

Total public research  budget- 

+ 6.9% 

Bodies: 

Ministry of Science (MONBUSHO): 

+ 7 2% 

Ministry of International Trade and Industry (MITI); 

+ 53% 

Science and Technology Agency (STA): 

Industrial Research and Technology Agency: 

+7,2% 

+7,4% 

Programmes 

Post-doctoral fellowships: 

Programme for centres of excellence; 

Research aid grants; 

+  33»5% 

+ 23,8% 

+  10.2% 

'industrial Science and Technology'* programme; 

+ 6.3% 

Areas (examples') 

Strategic basic research; 

Space; 

Nuclear energy; 

4. |£Q% 

+ 5.2% 

+  ^2% 

rr 

5.  SMEs, research and employment 

SMEs are the largest source of employment  in the European Union. In addition, small and very small undertakings pro 
duce  the  most  innovations. Analysis  reveals  that  the  sectors  with  the  greatest  growth  in  research  investment  are  also 
those where most jobs are being  created. 

Share of SMEs in the total employment of the 
EU 

(<250  employees 

ISME 

•  Large  undertakings 

(>250 

employees 

Source: European Commission Eurostat,  SME Project database, 1995. 

Percentage breakdown of innovations according to categories 
of salaried employees (Ireland, Italy, Netherlands, 
United Kingdom) 

Size category 
1-19 
20-49 
50-99 
100-499 
500-999 
1000 and over 

Ireland 
61.0 
21.0 
9.0 
8.0 
1.0 

mL 
14.4 
21.3 
27.2 
14.1 
5.5 
17.5 

Netherlands 
35.0 
18.4 
10.9 
21.1 
14.6 

UK 
22.4 
14.7 
26.7 
15.6 
7.6 
13.0 

Source: 

European SME Observatory,  1995. 

R&D expenditure and growth in jobs, 1973-1990 
Average percentage growth rates per industry in relation to total 
industrial growth for the 13 OECD countries 

Pharmaceutical  products 

Computers 

o 

o 

Stone 
o 

Other means of transport  O 

Scientific 
instruments 
O 

Non-ferrous 
metals 

O  Cars 
Food 

Chemical 
products 

ot* 

1 
Non-electrical  equipment 

Radio, TV and 
communications 

O  e t*u iPm e nt 

O  Aerospace 
1 

1 

O 
Ferrous metals 

Oil refining  O  O 

Wood 

Q  Paper 

O  Rubber 

2  -4 

o 
Textiles 

T 

Electrical equipment 

Shipbuilding 

-Q 

0 
-1 
Relative annual growth of jobs 

1 

Source:  OECD 
STAN Database 

o<f 

6.  Visions of the future and  priorities 

For the last thirty years, Japan and the United  States have regularly carried out "foresight  exercises" (studies  for sci 
entific  and  technological  future  planning). Operations  of this type have recently  been  launched  in  Europe  (particu 
larly  in the United  Kingdom, France, Germany, Denmark, the Netherlands  and Spain). 

A comparison  of their conclusions  shows a high level of convergence  in the priorities  chosen when  the subjects  are 
merged  at high and  medium  levels  (optoelectronics  and artificial  intelligence; nanotechnologies  and new and  intel 
ligent materials; biotechnologies, molecular biology and neurosciences; environmental  technologies and clean ener 
gy production  technologies, etc.). 

In terms of economic and social  objectives,  two major  themes emerge: 

the information  society; 

sustainable  development. 

These conclusions  also converge  with  those of "Project  2025" undertaken  at the  request  of  18 major  organizations 
and companies  in the USA, United  Kingdom  and Germany. Based on a critical analysis of  1500 foresight  exercises 
carried  out  since  1970, this project  has resulted  in the drawing  up of a list  of  83 "high  probability" hypotheses  for 
the year  2025. The  major  themes  include:  integrated management of the environment and natural resources; inte 
grated management of human health; the advent of the  "electronic global village "; intelligent manufacturing. 

Source: OECD Science  Technology Industry Review, No  17,  Special issue on Government Technology Foresight Exercises:  The competitive posi 
tion of European science, technology and industry - an ESTA opinion in relation with the 5th Framework Programme; L'avenir  hautement pro 
bable, 83 hypothèses sur l'année, 2025, Joseph  Coates, Futuribles, April 1996. 

O 

*£•" 

7.  Society's needs and market prospects: Some examples 

Sustainable development and the environment 

There can be no sustainable  development  without  research  playing  its part. Among  others, two of the major  problems 
to be  solved  are  water  resources  and  the  impact  of  transport  on  the  environment.  At  European,  as  at  world  level, the 
environment  represents a potentially  important  market. 

Water: a rare  resource 

Water is becoming a rare resource in Europe and in the world. 65% of the water drawn from  rivers, lakes and  aquifers 
in the  world  is used  by  agriculture.  1 000  tonnes  of water  are needed  to  produce  a tonne  of  wheat. An  additional 
27 million cubic metres are needed to feed  the 90 million  people being added to the world population  every year. 

20% of European  surface  waters are under threat. 60% of farmland  presents a concentration  of fertilizers  and pesti 
cides which is hazardous to the water quality in its vicinity. Between  15 and 30% of the water collected  in Europe is 
lost in the course of its distribution. 

Source:  Commission staff  working paper  on Research-Industry Task Forces (SEC(96)568)/The state of the planet  1996. 

Transport  costs 

In the space of 50 years, the world  population  has doubled  while the number  of private  vehicles  has  increased  ten 
fold and now amounts to about 500 million. At this rate there will be  1  000 million cars in the world by 2025 or 2030. 
In Europe alone the number of cars is expected  to increase by 25% between  1992 and 2005. 

Transport  accounts  for  30% of  final  energy  requirements  and  is responsible  for  25% of  all  CO2  emissions.  Road 
transport alone represents 80% of the CO2 produced  by transport. The total cost of problems other than health prob 
lems attributed to emissions  from  transport  is estimated  at between  0.3 and 0.4% of GDP. 

Source: Commission staff  working paper  on Research-Industry Task Forces (SEC (9 6) 5 68)/The Economist, 22 June  1996 "Living with the car": a 
survey. 

The world environmental  market 
Estimates in $ '000 million 

OECD 

ECOTEC 

ETDC 

Year 
North  America 
Latin  America 
Western  Europe 
Eastern  Europe/NIS 
Asia  &  the  Pacific 
World  total 
Source: OECD (1992); ECOTEC (1994); ETDC (1994); OTA  (1994). 

2000 
147 
5 
89 
9 
63 
320 

2000 
125 
-
78 
21 
42 
300 

2000 
217 
-
188 
25 
138 
580 

Environmental 
Business 
International 
1998 
199 
10 
132 
27 
49 
426 

*\ 

Biotechnologies 

The market for biotechnology-based  products is one of the fastest  growing in the world. In terms of the number of com 
panies, jobs,  turnover  or  research  expenditure,  American  efforts  in  this  area  are  currently  much  greater  than  their 
European  counterparts. 

Global  Sales for Biotechnology-Based  products 
10 year Projection  (1996-2006) - in 1996 $ Billions 

Non 
medical 
diagnosis 

Specialized 
fields 

Agriculture 

Human 
diagnosis 

Human 
treatment 

Source: Consulting Resources Corp. 

EU vs US BIOTECH  SECTORS 
(Ecu Millions) 

Europe 

US 

1  158 

605 

9.663 

5.859 

~ 

~ 

Financial 

Turnover 

R&D  Expenditure 

Industry 

Number  of  Companies 

584 

1.308 

Number  of  employees 

17  200 

108.000 

"~~ 

Source: Ernest & Young BioBusiness 

10 

VI 

Health 

Europe's population is becoming older. By the year 2020, over a quarter of people will be more than 60 years old, while 
those under the  age of 20 will  constitute  only just  over  one-fifth  of the population.  The  consequences  of this trend  in 
medical and public health terms are important. 

EU population by age group (%) 

0-19 
~ ~ 2 0 - 5S 

1960  1965  1970  1975  1980  1985  1990  1995  2000  2005  2010  2015  2020 

Source: Eurostat, Europe in figures 

Throughout  the world, infectious  diseases affect  hundreds of millions of people and kill tens of millions. 

Populations Affected  by Various Infectious Diseases, 1993 

Disease 

Acute  Respiratory  Infections 

Diarrheal  Diseases 
Tuberculosis 
Malaria 
Measles 

Hepatitis  B 

HIV/AIDS 
Cholera 
Polio 

Source: WHO, 1995 

11 

Deaths 
4.1  million 

3.0  million 
2.7  million 
2.0  million 
1.2  million 

1.0  million 

7 0 0 0 00 
6800 
5500 

| 

Incidence 
248  million 

1.8  billion 
8.8  million 

300-500  million 

(prevalence) 

45  million 

2.2  million 

2-3  million 
3 8 0 0 00 
110000 

State of the  World 1996 

- ** 

The information society 

Europe has entered  the information  society. The number of connections by private individuals and firms to the Internet 
and the market  for  CD-Rom  drives is increasing at a steady pace. American firms are currently  producing  most  of the 
CD-Roms  available 

The Internet Market in Europe, 1994-2000 
Number of Households with Internet Access (Milhons) 

•  Spain 
•  I t a ly 
•  France 
B United  Kingdom 
DGermany 
•  Rest  of  Europe 

Source: European Information Technology Obsen'atoiy  EITO  1996 

Homes equipped with CD-Rom drives 

World production  of CD-Roms in  1995 

In gUllions of  units 

40 

1994 

1995 

1996 

1997 

1998 

Source: Inteco 1994 

Source: TPFL Publishing, Facts & Figures 95 

12 

'^ 

ISSN 0254-1475 

COM(96) 332 final 

DOCUMENTS 

EN 

15 

Catalogue number  : CB-CO-96-356-EN-C 

ISBN 92-78-06929-9 

Office  for Official  Publications of the European  Communities 

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