COMMUNICATION FROM THE COMMISSION - Promoting RTD cooperation with the world' s emerging economies
Date: 1996-07-19
Institutions: European Commission
Subjects: applied research, competitiveness, developing countries, international cooperation, research and development

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COMMISSION OF THE EUROPEAN  COMMUNITIES 

Brussels,  19.07.1996 
COM(96)344 final 

COMMUNICATION  FROM THE COMMISSION 

Promoting  RTD  cooperation  with the  world's  emerging  economies 

Promoting RTD cooperation with the world's emerging economies 

Foreword 

On  20  October  1995,  the  Commission  submitted  to  Council  a  communication  on 
"Perspectives  for  International  Cooperation  in  Research  and  Technological 
Development".  This  communication  provides  global  orientations  for  cooperation 
policies with third countries outside the Union. 

An  important  feature  of  the  above-mentioned  communication  is  that  it  singles  out 
various  groups  of  countries  (Europe  and  her  neighbours;  Highly  industrialised 
countries; Developing  countries; Emerging  economies  - NICs), and urges  the  Union 
to  address  them  selectively,  by  tailoring  appropriate  cooperation  schemes  and 
instruments. 

The  communication  in  object  addresses  the  so  called  "Emerging Economies"  and 
recommends to  implement  with these countries a new cooperation  frame,  capable to 
meet the global challenge posed by their booming industrialisation. 

Emerging Economics 

This  name  designates  a  group  of  developing  countries  currently  involved  in  deep 
economic reforms  and undergoing rapid industrialisation. These countries differ  from 
the  "less  advanced  developing  countries"  because  they  display  a  marked  dual 
character  and  behaviour,  with  large  zones  of  poverty  and  archaic  infrastructure 
bordered  by oases of leading-edge technology.  Examples of emerging economies are 
China, India, Brazil, as well, as other countries mainly located in South East Asia and 
Latin America. 

Emerging  economies  are,  at  the  same  time,  legitimate  candidates  for  development 
cooperation  and  strong  competitors  in  some  sectors  of  trade.  It  follows  that  if  the 
Union  wants  to  address  the  dual  features  of  their  S&T  apparatus,  it  should  also 
dispose of a dual cooperation scheme. Thus, the communication in object: "Promoting 
RTD cooperation with the world's emerging economies'',  recommends to complement 
the  current  "problem-solving"  approach  of  the  INCO-DC programme,  conceived  to 
tackle  specific  problems of the developing world, with a new  "opportunity-oriented" 
cooperation  initiative  aiming  at high-technology  sectors  conducive  to the  promotion 
of European S&T innovation on the emerging markets. 

i 

Tackling the developed segment of Emerging Economies 

The policy  driving the new cooperation  initiative  is similar to that  currently  in  force 
with  the  "Industrialised countries outside Europe",  and  is  grounded  on  two  basic 
principles: 

• 

• 

the  main  objective  of  the  cooperating  parties  shall  be  that  of  achieving  mutual 
benefit; 
the major task of RTD cooperation will be that of triggering industrial cooperation. 

Corollaries to the above principles, are the reciprocal  opening of RTD activities, the 
co-financing  of  joint  projects  and  the  development  of  appropriate  conventions 
securing effective  protection and equitable distribution of intellectual property rights. 

The implementation of the above principles and corollaries requires the possibility of 
opening  to  selected  countries  the  Community  research  programmes.  To  do  so,  the 
Commission  should  dispose  of  a  legal  base which,  for  programmes  not  unilaterally 
opened  for  participation  to  all  third  countries  (Article  8  opening),  can  only  be 
provided by the conclusion of country-specific  S&T cooperation agreements. 

In  preparation  of  such  a  major  thrust  of  RTD  cooperation  with  the  emerging 
economies,  the  communication  in  object  foresees  an  action  plan  aimed  at  the 
exploitation  of the whole range  of opportunities  offered  by the current  institutional 
framework.  This will comprise: 

- 

- 

the  promotion  of  the  participation  of  EEs'  research  institutions  in  specific 
programmes of the 4th Framework Programme; 

the  identification  of  a  hard  core  of  narrowly  defined  topics,  where  RTD 
cooperation is expected to have clear potential industrial  spin-offs; 

—  the launch of a substantial scheme of exchange of scientists and the organisation of 

a series of targeted scientific workshops; 

—  whenever it proves necessary  and in the framework  of the external relations policy 
and  its instruments  (Framework  Agreement  and Joint Committee), the  conclusion 
of  a  complementary  Science  and  Technology  cooperation  agreement  with  an 
emerging economy. 

The  execution  of  the  above  plan  will  result  in  the  creation  of  a  web  of  scientific 
partnerships  in  targeted  areas.  It  will  also  lay  down  the  bases  necessary  to  foster 
further  collaborative ventures on a larger scale. 

The  communication  in  object  also  stresses  the  highly  instrumental  role  that  S&T 
cooperation  agreements  may  play  in  the  setting  up  of  new,  structured  relationships 
with these countries of particular strategic interest for the Union. 

C O M M U N I C A T I ON  F R OM  T HE  C O M M I S S I ON 

Promoting  RTD 

cooperation  with  the  world's  emerging 

economies 

Foreword 

Global orientations for Community's  S&T cooperation with third countries were presented in 
the Commission's Communication: "Perspectives for International Cooperation in Research 
and  Technological Development'*,  issued on  18 October  1995. A section of this document, 
quoted below, pinpoints the common features of a group of countries, referred to as "emerging 
economies",  and urges the Union to address them with appropriate RTD cooperation actions. 

After the experience of the debt crisis in the 1980s several developing countries  in Latin America and 
Asia reformed their economic policy successfully.  (...) They have become a target for foreign investment 
from  industrialised countries and a meeting place for global competitors (e.g.  China,  India, Brazil etc.). 

In  spite  of  their  economic  success,  significant  parts  of  their  societies  still  share  development 
deficiencies.  RTD operation sometimes lack refinement or environmental and health requirement,  while, 
on the other hand, they have proved able to leapfrog traditional steps in technological development. 
Thus,  emerging  economies  appear  as partners for  RTD  cooperation under  two  different aspects. 
Objectives for  EU cooperation with these countries therefore refer,  on the one hand,  to those valid for 
developing countries  and, on the other hand,  to the acquisition of knowledge relevant for  an improved 
production  of  environmental  and  socially  sustainable  technologies.  To  increase  also  European 
competitiveness,  cooperative RTD will focus  on emerging markets. 
(...) 
The development of some of these countries may evolve in such a way that it might become interesting to 
conclude bilateral RTD agreements providing for project-by-project participation on a reciprocal basis. 

Drawing on the above arguments, the present Communication provides more detailed analysis 
on why the Union should endeavour to boost RTD cooperation with emerging economies, and 
how this can be achieved within the current institutional framework.  It is also intended to fuel 
the overall reflexions on RTD cooperation with third countries in view of the fifth Framework 
Programme and can clear the ground toward possible negotiations to establish bilateral RTD 
cooperation  agreements  with  selected  emerging economies of particular  strategic  interest  for 
the Union. 

The dual features  of  emerging economies 

We  are  using  the  term  "emerging economies" to  designate  those  developing  countries 
currently  involved  in  deep  economic  reforms,  notably  liberalisation,  and  undergoing  rapid 
industrialisation. As the term "emerging"  infers, these countries are still confronted,  although 
to  different  extents, with the typical  problems  of the  developing  world.  They  are,  however, 

1  Research and Technological  Development,  including demonstration 
2  COM(95)489 

2ft 

well  advanced  in  the  process  of  industrialisation  and  dispose  of  real  scientific  and 
technological capabilities in various leading-edge sectors. 

According  to  the  above  definition,  several  countries  in  the  world  can  reasonably  claim  an 
"emerging economy" status. Some of them, however, are growing at such a high rate and their 
potential markets are so vast that their eventual  "emergence"  will have a tremendous  impact 
on the global  economy. As already  mentioned  in the previous  Communication,  China, India 
and Brazil are examples of such emerging economies, of vital importance for the Union. 

For emerging economies with continental-scale populations and equally  large economies, the 
process of transformation  from  a "developing"  to an "industrialised"  society may take a long 
period  of time.  During  this time the  countries  display  a dual  character  and  behaviour,  with 
zones of poverty and archaic infrastructure  neighbouring oases of leading-edge technology. 

Science in China 

Remote Urumky  (Xinjiang)  tracks satellites and boasts a  25-meter radio telescope that is part  of the global 
Very Long Baseline Array to observe the most distant objects in the universe. 

Semitropical Hainan island is the site of  field  tests of genetically modified plants on a scale unknown in the 
West. 

Hefei, provincial capital ofAnhui  is home to elite University of Science and Technology of China, the national 
synchrotron radiation lab, and four  Chinese Academy of Science institutes. 

Industrial Shenyang (Liaoning),  is home to the highly rated Institute of Metal Science, specializing in advanced 
amorphous metals. 

Municipal and regional authorities of Shanghai are pumping funds  into Fudan and other major universities,  a 
new life science research centre,  a biotech park, and a 3.5-generation synchrotron facility  to join  the  16 CAS 
institutes and 24 state key labs in a bid for  high-tech leadership. 

With less than 20 months left before Beijing takes over, Hong Kong is going all out to become an R&D base 
for  China. The ultramodern  University of Science and Technology aspires to be China's top scientific centre by 
decade's end. 

Indian software in the world 

Commuters on the London underground probably  do not realise that  they have a  Bombay-based computer 
company to thank when the trains run on time. 

Elsewhere,  passenger travelling on many international airlines, should thank Indian software companies for 
ensuring most aircraft leave on lime. 

In the manufacturing sector,  several American companies use software developed in India. 

An  important European society uses a  distribution management  application package designed and  built by 
Indian scientists to integrate sales forecasting. 

Even the Barcelona Olympics relied on Indian software engineers from a Delhi-based company who designed 
a system for  TV graphics. 

While North America and Europe are still asleep, programmers in Bangalore are maintaining software systems 
and fixing  "bugs "forfinancial  services companies around the world, using high speed satellite data links. 

2ê 

Brazil: physicists hand-build a synchrotron 

Campinas. -On  a hilltop on the outskirts of this university town in southeastern Brazil, physicists and artisans 
have been engaged for  the past  10 years in a unique and, many would say, wildly ambitious project. They are 
building an electron storage ring: a 29-meter-diameter accelerator for  electrons.  Within a year, if it all goes as 
planned, the ring will spring to life as the heart of the first and only synchrotron light source in the Southern 
Hemisphere. 

Because of their dual features, emerging economies are, at the same time, legitimate candidates 
for  development  cooperation,  strong  competitors  in  some  sectors  of  trade  and  a  currently 
expanding  market  which  will  reach  very  important  dimensions  in  the  years  to  come. 
Development  concerns  have  thus  to  be  seen  against  the  backdrop  of  global  strategic 
considerations. 

Cooperation with the emerging economies: a competitive background 

The economic rationale for a greater involvement of the Union with the emerging economies 
is  based  on the  steep  rise  of their  economic  power  and  the  need  for  the  Union  to  secure a 
substantial  participation  in  their  markets.  Given  that  economic  advance  in  the  emerging 
economies  is  increasingly  driven  by the expansion  of their  technology-based  industries,  the 
proactive deployment of Europe's S&T strength in these countries could represent a powerful 
mechanism  for  achieving  a  substantial  increase  of  the  Union's  market  share.  It  will  also 
contribute  to the socio-economic  development  of the region  by helping the partner  countries 
to adopt best practice and learn from the experiences of the Union. 

The use of S&T to strengthen the presence of the European industry in the emerging markets 
will have, however, to face a highly competitive  background: for historical  and  geographical 
reasons the US and Japan have already achieved a strong position in these emerging markets, 
also through an enterprising S&T cooperation policy. 

Japanese companies going global in Asia 

A close look at recent Japanese foreign  investments in Asia reveals that Japanese companies are increasingly 
setting up research laboratories  in neighbouring countries.  In doing so,  they are integrating their activities 
from  R&D to manufacturing and trade. 

The  bursting of  the financial  bubble  in  the  early  '90s had  already  led  to  a  massive  wave  of companies 
transferring their operations abroad.  The number of industrial and commercial units in Asia rose from  3370 in 
1988 to 6632 in  1994. 

The country which has benefited most from  these trends is China, whereas  India does not seem to represent a 
major target for Japanese manufacturing activities. 

The classic enterprise partnership/networking scheme of the  "keiretsu" is reproduced in many cases: the big 
firms bring their own subcontractors with them, leaving little room for competitors. 

The setting  up  of  R&D  centres  in Asia  is  also  a  way  of  compensating for  the  weakness of  home based 
manufacturing R&D.  This  is  already  quite  clear  in  the  case  of  the  software  industry. Several Japanese 
companies have transferred R&D facilities in  Shanghay and Beijing. Globalisation is an attempt to exploit the 
comparative advantages of the parties involved 

But this situation can change. For example, not only several European firms have established 
themselves  as  leading  competitors  in  local  markets, but  official  representatives  of  emerging 
economies  have  formally  sought  increased  involvement  of  the  Union  in  S&T  cooperation: 
they  value  the  Union  both  as  a  source  of  advanced  S&T  know-how  and  as  an  important 
partner for their  future. 

With a few  notable exceptions,  European companies have been slower than their US counterparts to spot the 
opportunities,  in India..... A  number of initiatives  have been taken to  try and  correct this imbalance.  These 
include the establishment of a Bangalore-based company called 3SE by  the European Commission and the 
Indian Government to promote cooperation between the EU and India in computer software. 

The  interest  shown  by  emerging  economies'  policymakers  in  strengthening  and  deepening 
scientific  collaboration with the Union goes beyond the mere recognition that Europe was the 
cradle of western scientific  methodology and home for the largest number of Nobel laureates. 
It rather  results  from  a series of circumstances, such as the strong ties still  existing  between 
some of the emerging countries and some Member States, the interest they may have for  the 
European market or, also, the perception that the European scientific  space is a component of 
a  wider  cultural  space,  where  science  and  scientific  cooperation  develop  in  submission  to 
essential ethic requirements. 

The  success  of  the  Framework  Programmes  and,  in  the  late  '80s  -  early  '90s,  that  of  the 
"International  Scientific  Cooperation  (ISC)" programme, has brought the Union  itself to the 
forefront  of the attention of third countries.  This not only strengthened the perception of the 
Union  as the  focal  point  for  advanced  technology  sourcing  in Europe;  it also designated  the 
Union  as  a  special  partner  in  cross-border  scientific  collaboration,  carrying  a  unique 
multicultural  cooperation  know-how,  capable of setting off  from  its competitors  in terms of 
the value of what it has to  offer. 

The  Union  cannot  afford  to  stay  at  the  edge  of  this  global  challenge.  It  is  essential  to  the 
economic  and  geopolitical  interests  of  the  EU  to  engage  in  broader  cooperation  with  the 
emerging  economies. Action needs to be taken promptly  and the strategy  adopted  should  be 
tailored  to meet the challenges of each individual  country, taking into account the actions of 
the Union's competitors. 

Past and present policies for S&T cooperation with the Emerging Economies 

The European Union has been cooperating in S&T sectors with these economies since  1983. 
Cooperation took place, until  1994, under two programmes:  "Science and Technology for  the 
Development (STD) "  and  "International Scientific Cooperation (ISC) ". 

With  the  adoption  of  the  Fourth  Framework  Programme,  these  two  interrelated  initiatives 
were  merged  to  form  the  Part  C  of  the  INCO  programme.  "Scientific and Technological 
Cooperation with the Developing Countries (INCO DC) ", which started operation in 1995. 

With  the  INCO  DC  programme  the  Union  disposes  of  an  instrument  for  RTD  cooperation 
with developing countries sensu stricto.  It has been conceived to address problems common to 
all developing countries, notably basic needs and quality of life, and it plays an important role 

in  associating  the  DCs  scientific  communities  with  the  relevant  knowledge  and  the 
technologies  available  in  Europe.  This  programme,  to  which  more  than  209  Mioccu  were 
allocated for the period  1995-98, is open to three "Sectors of general importance": sustainable 
management  of  renewable  natural  resources; improvement  of agricultural  and  agroindustrial 
production; and health. It also foresees cooperation in "Additional sectors of mutual interest": 
information  and  communication  technology,  non  nuclear  energy,  biotechnology  and 
production sectors. 

Examples of DCs  specific problems addressed by the INCO DC programme 

Tropical forests resource development - Prevention of losses of soil and biodiversity in drylands and highlands 
-  Improvement of livestock farming  -  Increased productivity of animal and plant species in wetland  -  Health 
care delivery models  -  Prevention and combating of predominant diseases (e.g. support for  research for  a 
malaria vaccine)  -  Malnutrition  -  Reproductive health. 

It is now time that this work be complemented by a new approach to take account of the dual 
nature  of  emerging  economies  within  the  global  framework  of  the  political,  economic  and 
cooperation  relationships  which  the  European  Union  has  already  established  with  these 
countries. 

The  new  cooperation  initiative  will  address  the  developed  segment  of  these  countries  and 
target technology  sectors close to industry, such as those addressed under the 4th Framework 
Programme by the specific programmes and the Task Forces, or by any other similar form of 
Community research that will be implemented under future Framework Programmes. 

Examples of  high technology RTD themes where cooperation with the emerging economies should be 
strengthened and oriented toward industry 

-  Space  technology  and  applications  -  Coastal zone  and  shelf  seas  management 

Computer  and  multimedia  technologies 
technologies 
Technologies to increase the safety and efficiency and decrease the environmental impact of transport systems 
-  Nuclear safety  - Biomedical technology and engineering  -  Vaccinology -  Pharmaceutical research  -
Clean energy sources  -Energy-saving  RTD  -  Earthquake engineering -,  etc. 

•  Clean manufacturing 
-

-  Personal  communication networks 

The above examples of core technologies are growing rapidly in the emerging economies, and 
official  representatives of these countries have repeatedly asked the Union to move the centre 
of gravity of RTD cooperation toward them. 

Considering  that  it  is  in this  bracket  of  science that joint  efforts  are most  likely  to  produce 
industrial  cooperation  spillovers,  the  Union  should  wait  no  more  and  tailor  its  cooperation 
instruments accordingly. 

Guidelines for a new policy of RTD cooperation with the Emerging Economies 

Following on from previous arguments, it is in the Union's interest to set a new and ambitious 
agenda  of  RTD  cooperation  with  the  emerging  economies.  The  scale  of  this  cooperation 
should be commensurate with the challenge posed by the booming industrialisation of these 
countries  and  the  benefits  that  the  Union  can  expect  from  a  far-sighted  deployment  of  its 
cooperative strength. 

The  policy  driving  the  new  cooperation  initiative  should  complement  the  problem-solving 
approach  of  the  INCO-DC  programme.  It  should  adopt  instead  a  proactive  opportunity-
oriented  perspective  aiming at core science  sectors conducive to the promotion  of European 
S&T innovation on the emerging markets, while remaining watchful that cooperative research 
is not be used for military purposes. 

The  policy  of  RTD  cooperation  with  the  highly  developed  segment  of  the  emerging 
economies will therefore be grounded on the following principles: 

•  the main objective of  the cooperating parties shall be that of achieving mutual benefit 
(from  the Union's  viewpoint  this will  mean, chiefly,  promotion  of the  European  industry 
presence  in  the  emerging  markets;  e.g.  by  implementing  well  targeted  technology 
demonstration projects in jointly selected sectors); 

•  where appropriate, RTD cooperation should be used to trigger industrial cooperation 
(this should be achieved through the creation of a network  of alliances, linking  European 
and EEs' centres of excellence in RTD topics of industrial relevance). 

From the above principles stem the following corollaries: 
-  cooperation sectors should be agreed on jointly by the parties. This will provide both sides 
with  the  opportunity  to  target  narrowly  defined  RTD  themes  with  good  prospects  of 
industrial  cooperation  in  the  short  term.  In  this  context,  the  Union  may  foster  RTD 
cooperation by financing  partially the initial steps of the collaborative work provided by its 
partners in the emerging economies; 

-  cooperation between the Union and the emerging economies should be set up on equal and 
reciprocal grounds. An accomplished expression of such partnership will thus consist in the 
eventual  participation  of research  and  technical  institutions  of one  parly  into the  publicly 
funded  RTD programmes of the other. In practice, this would imply both the opening to the 
emerging economies of some Community RTD activities and, reciprocally, the opening to 
European companies of selected outside programmes; 
transnational  research  projects  carried  out  within  the  framework  of  a mature  partnership 
will not require transfer of funds from one party to the other; 

- 

-  joint  activities  should  be  implemented  under  appropriate  conventions  securing  effective 
protection  and  equitable  distribution  of  intellectual  property  rights.  This  is  particularly 
necessary  when  the  partner  country  has  not  endorsed  the  relevant 
international 
conventions,  including  the TRIPS Agreement  of the GATT-WTO, the  Berne  Convention 
(Paris Act 1971), and the Paris Convention (Stckholm Act 1967). 

The implementation of the above principles and corollaries suggests the adoption of a flexible 
cooperation  scheme  similar  to  that  currently  in  force  with  "Industrialised countries  outside 
Europe ".  However, due to the particular  features  of emerging economies, it is important to 
tailor the new scheme appropriately. 

Blueprint for a new RTD cooperation scheme with the emerging economies 

Experience  gathered  at Community  level  shows that a mere, passive opening  of Community 
RTD programmes to third countries is not sufficient  to trigger a significant  response of their 

scientific  operators.  Conversely,  if  the  opening  of  the  same  programmes  is  endorsed  by  a 
political  commitment  to promote  RTD cooperation,  the resulting  collaboration  may  become 
substantial. 

It follows that,  since the Union is determined to launch a high profile  RTD cooperation with 
the emerging economies, it shall be ready to account for a substantial political and managerial 
investment. This can be outlined as follows. 

•  The Union should first undertake to seize all cooperation opportunities already offered  by 

the opening-up of various specific programmes to the participation of third countries. 

•  To carry out cooperation with the emerging economies in sectors of advanced technology, 
the  Commission  should  also  be  able  to  open  their  participation  in  additional  specific 
programmes. According to Council decision of 21 November  1994 (94/763/CE), the Union 
must  then  envisage  to  conclude  with  selected  emerging  economies  S&T  cooperation 
agreements  The implementation of this procedure is not only the ultimate expression  of a 
political  will  to  foster  RTD  collaboration.  It  also  allows  the  parties  to  tailor  country-
specific RTD cooperation frames and orientate the scientific communities towards selected 
RTD themes and technological challenges of common interest. 

In  most  cases,  relations  with  the  emerging  economies  are  covered  by  Framework 
for  cooperation.  Such  Framework  Agreements  contain  a  "Future 
Agreements 
developments" clause which allows the level of cooperation to be enhanced by the addition 
of  agreements  on  specific  sectors  or  activities.  Thus,  whenever  political  and  other 
considerations  (participation  in  otherwise  closed  programmes,  reciprocity,  intellectual 
property  rights, etc.) demand, an S&T Cooperation  Agreement,  referring  explicitly  to the 
Framework Agreement and the Joint Committee, will be concluded. 

If  it  proves  opportune  to  conclude  an  S&T  Cooperation  Agreement  with  an  emerging 
economy  which  has  not  concluded  with  the  Union  a  Framework  Agreement  for 
cooperation, the specific  S&T Agreement will be consistent with the general policy of the 
Union towards the country concerned. 

The follow-up  of each S&T Cooperation Agreement  shall be insured  by  a Joint  Group 
for  Cooperation  in  Science  and  Technology  (JGSTC);  forum  of  dialogue,  orientation 
and monitoring  of cooperation  activities. These Joint Groups should comprise senior civil 
servants, prominent  scientists, industrialists  and policy  makers  from  both  sides. When an 
emerging  economy  has  concluded  with  the  Union  a  Framework  Agreement  for 
cooperation,  to  insure the coherence  of the  external  action the Joint  Group will  be  a sub 
committee of the Joint Committee. 

The key to the success of the entire operation will depend on the capacity of the JGSTCs to 
trigger  the  growth  of  "bottom-up"  cooperation  proposals  and  to  orientate  them  towards 
selected  target  sectors. The Joint  Groups  should be particularly  vigilant  in relation  to the 
implementation  of  the  reciprocity  principle.  Participation  in  each  other's  programmes 
should  be  real  and  produce  a  two-way  flow  of  information,  scientific  workforce  and 
innovative projects. 

It  is  important  to  stress  that,  in  case  of  participation  of  outside  partners  in  Community 
research programmes, the JGSTCs will have no  power of intervention  in the Community 
internal procedures of submission, evaluation and selection of projects. 

The impact of the cooperation scheme on the development of cooperation activities should 
be  monitored  periodically.  Evaluation  reports  should  be  thoroughly  discussed  by  the 
JGSTCs in order to take the necessary steps to comply with the recommendations. 

Concertation with Member States: dialogue with the industry 

The success of the above-mentioned  S&T cooperation policy rests on the will  of the Union 
and  its  Member  States  to  produce  a  coherent  thrust  aiming  at  the  strengthening  of  the 
competitive  position  of  European  high-tech  companies  in  the  markets  of  the  emerging 
economies.  This  is  not  simply  to  underline  the  principle  of  subsidiarity,  but  rather  it  is the 
expression  of  a crucial  step which  needs to be taken  and  the very justification  for  this  new 
European initiative. 

Member  States  have  already  been  cooperating,  on  a  bilateral  basis,  with  the  emerging 
economies  in  scientific  and  technological  sectors.  Some  of  these  States  have  achieved 
particularly  good  results  and  established  durable  relationships.  They  pride  the  success 
obtained  through  their  national  collaboration  schemes  and  prepare  themselves  to  face  the 
challenge of market globalisation. 

On the other hand, European firms are generally favourable  to the idea of a more active role 
of  the  Union  in  international  S&T  collaboration.  They  consider  that  a  Community-driven 
framework  for RTD cooperation activities, can provide their ventures with a high profile and a 
strong  negotiating  leverage.  They  also  point  out  that  poor  Community  coordination  might 
allow twin cooperation  projects to mature into the cooperation schemes of different  Member 
States, and consider such potential duplications as a threat to European credibility. 

Thus, the  fundamental  pattern  of the cooperation  initiative  foreseen  in  this  Communication, 
and the ground on which it will have to grow, shall and will be an intensive concertation with 
the Member States. The Delegations in the respective countries, will be called to play a central 
role in the accomplishment of this task. 

The Union and the Member  States have here a new opportunity to seize: that of promoting a 
European  dimension  in  the  RTD  cooperation  with  the  world  emerging  economies,  that  of 
orienting scientific  research towards innovation and that of using European innovation to help 
the European enterprise position itself in the emerging markets. 

Particular  attention  should  be  paid  to  the  actual  involvement  of  European  industry  in  this 
endeavour.  IRDAC, in its role of advisory  body to the Commission  in the field of  industrial 
research and development, should be associated with the implementation of the new policy at 
all stages. In the preparatory phase it could assist the Commission in the identification  of the 
most  promising  cooperation  themes  and  actions, as well  as of the  industrial  operators  most 
suitable  to  play  an  active  role  internationally.  Later  on,  it  should  be  associated  with  the 
different  activities of the Joint S&T Cooperation Committees. 

IRDAC's part in the consultation process will not only help maintaining a permanent dialogue 
between European RTD and European industry; it may also encourage the cooperating Parties 
in  the  emerging  economies  to  request  the  involvement  of  similar  bodies,  capable  of 
interfacing  between  their  RTD  establishments  and  their  respective  national  industries.  This 
will create a true forum  of dialogue and negotiation between all the operators involved  in the 
planning  and  management  of  cooperation  activities,  and,  hopefully,  will  contribute  to 
breaking down the barriers still existing between scientific and industrial operators. 

Action plan 

The action plan will address two different  objectives: 

— 

— 

to  seize  the  whole  range  of  opportunities  offered  by  the  fourth  framework 
programme to develop and redirect the present orientations; 
to prepare a major thrust of RTD  cooperation with the emerging economies. 

This will be executed by means of the following actions: 

• 

• 

• 

The  Commission  should  optimize  the  opportunity  offered  by  the  current  INCO 
programme  and  encourage  cooperation  initiatives  in  industry-oriented  sub-sectors 
opened for participation of the emerging economies; 

An information  campaign should be launched in Europe and in the emerging economies, 
to  promote  the  participation  of  EEs'  research  institutions  in  relevant  Community 
specific programs; 

In  parallel  with  this  action  and  in  collaboration  with  the  partner  governments,  the 
Commission will launch a first pilot scheme for exchange of scientists  This action will 
offer  several distinct advantages: 

- 

in conformity  with the subsidiarity principle it will complement the complex array 
of scientific  mobility schemes already implemented by several Member States with 
individual emerging economies; 

— focussed  on  scientific  sectors  relevant  to  the  specific  programmes  of  the  4th 
Framework  Programme,  it  may  help  reinforce  the  research  capacity  of  European 
consortia already operating in these programmes; 

— it  will  create  a  first  web  of  partnerships  between  the  Union  and  the  emerging 
economies  in  areas  of Community's  competence, thus paving  the  way  for  formal 
participation  of  research  institutions  located  in  these  countries  in  Community 
research programmes; 
it will also allow the Commission to identify  a hard core of narrowly defined topics, 
where  RTD  cooperation  with the  different  emerging  economies  is  expected  to  be 

- 

3  The  Commission  implemented  previously,  under  the  ISC  programme,  a  large  scheme  of  fellowship 
allocation  to leading  scientists of third countries to spend 6-12  months  in European  laboratories.  A scheme of 
exchange  of  scientists  should  revive  the  success  of  that  promising  action,  adding  to  it  the  new  dimension  of 
reciprocity,  more suited to a policy of equal partnership with emerging economies 

manageable,  with  clear  potentials  for  industrial  cooperation  spin-offs,  and 
particularly beneficial for both parties. 

—  it  will  finally  allow  the  obtention  of  precious  information  in  view  of  the 
implementation  of a further  and  much  wider  scheme  for  the exchenge  of  leading 
scientists between the Union and the emerging economies. This scheme, which the 
Commission  plans to implement  in future  Framework  Programmes, will  allow the 
establishment of a vast network of durable relationships. 

• 

Finally, whenever it proves necessary and in the framework  of the external relations policy 
and  its  instruments  (Framework  Agreement  and  Joint  Committee),  the  Commission  will 
enter negotiations  aiming  at the conclusion  of a complementary  Science and  Technology 
cooperation  agreement  with  an  emerging  economy  in  accordance  with  the  rules  and 
mechanisms proposed at the paragraph "Blueprint for  a new RTD cooperation scheme with 
the emerging economies ". 

10 

FINANCIAL  STATEMENT 

l.  Title of the operation 

International  scientific  cooperation  :  Proposal  for  the implementation  of a new cooperation 
scheme aimed at the promotion of S&T collaboration between the Union and the "Emerging 
Economies" of the world, in sectors with industrial  spin-offs. 

2.  Relevant budget headings 

Costs  for  accompanying  measures  and  pilot  activities  will  be  charged  to  specific  budget 
headings  of 
the  programme:  Cooperation  with  Third  Countries  and  International 
Organisations (INCO). 

B6-7211 

3.  Legal Basis 

Council Decision 94/807/EC of 23 November 1994. 

4.  Description of the operation 

4.1. 

Specific objectives of the operation 

The  essential  objective  is  to  open  a  new  cooperation  channel  with  the  EEs  of  particular 
strategic interest for the Union. This channel will complement the current "problem-solving" 
approach  of  the  INCO-DC  programme,  conceived  to  tackle  specific  problems  of  the 
developing  world,  with  a new "opportuinity  oriented"  initiative  aiming at high  technology 
sectors conducive to the promotion of  European S&T innovation on the emerging markets. 

4.2.  Duration 

Ongoing  annual  budget  entry,  subject  to  annual  budget  disponibilities  under  the  present 
INCO programme 1996-98. 

5.  Classification of the expenditure 

5.1.  Non-compulsory expenditure 
5.2.  Differentiated  appropriations 

AA 

6.  Type of expenditure 

Financing of missions to various EEs by Commission officials  and EU experts; organisation 
of  joint  workshops;  joint  studies;  implementation  of  a  pilot  phase  for  the  exchange  of 
scientists. 

7.  Financial Impact 

7.1.  Method of calculating the total annual cost of the action (estimate) 

•  5  Workshops  [China,  India(x2),  Brazil  and  Mexico]  on  space  technologies, 

engineering seismology and advanced materials: 

0.450  MI-X'U 

•  5  Studies  (China,  India,  Brazil, Mexico, Argentina)  to define  a new  strategy  for 

RTD cooperation with the emerging economies: 

0.280 MECU 

•  Travel  and  subsistance  expenses  for  visits  to  the  Emerging  Economies  by  EU 

officials  and experts: 

0.050  MECU 

Total Optimale) : 0.780 MECU 

7.2.  Breakdown of the elements of the action (MECU) 

Breakdown 
Workshops 
Studies 
Missions 
Total 

Commitment appropriations  in MECU 
(current prices, estimate) 

1996 
0.450 
0.280 
0.050 
0.780 

1997 
0.450 
0.280 
0.050 
0.780 

1998 
0.450 
0.280 
0.050 
0.780 

Total 
1.350 
0.840 
0.150 
2.340 

12 

7.3. 

Schedule Commitments appropriations / Payments appropriations 

Commitments  appropriations 

Payments  appropriations 

1996 
1997 
1998 

1996 
0.780 

0.780 

1997 
0.780 

1998 
0.780 

0.780 

0.780 
0.780 

Total 
2.340 

0.780 
0.780 
0.780 
2.340 

Total 

0.780 

0.780 

8.  Anti-fraud  measures 

There  are  many  administrative  and  financial  controls  at  each  stage  of  the  signature  and 
implementation of research contracts. Among these controls are the following: 

At the stage prior to the conclusion 

•  Initial selection of proposals based on the scientific merit of the project and on the realism 
of  research  costs  relative  to  the  content,  duration  of  the  project  and  its  potential 
implications. 

•  Analysis of financial  details submitted by the proposers in the contract negotiation  form. 

After  signature of the contract 

•  Examination  of  expenditure  at  a  number  of  levels  (financial  officer,  scientific  officer) 

before payment. 

•  Internal audit performed by the Financial Controller. 

•  On-site  audit,  which  should  allow  the  detection  of  errors  and  other  irregularities  by 
examination of supporting documents. In order to improve the efficiency  of these controls, 
the  Commission  services  have  established  an  audit  Unit  which  coordinates  all  controls 
taking  place. These  controls  are  carried  out either  by  members  of this  audit  Unit,  or by 
audit firms with which the Commission has concluded a contract, under the supervision of 
personnel from this Unit. 

•  On the  spot  inspections  made by the Financial  Controller  of the  Commission  and  by  the 

Court of Auditors of the European Union. 

9.  Cost-effectiveness  analysis 

9.1. 

Specific  objectives, target population 

43 

o  The new scheme for cooperation with the Emerging Economies is designed to enable the 
European Union and the EEs to profit, on the basis of the principle of mutual benefit, from 
the scientific and technical progress achieved under their reciprocal research programmes; 

»  beneficiaries  in  the  European  Union  and  the  Emerging  Economies  will  be the  scientific 
communities, the industrial  sector and the general public, thanks to the direct and indirect 
effects  of cooperation. 

9.2. 

Justification  of the operation 

Community  budget  intervention  is  indispensible  because  the  planned  cooperation  comes 
under the implementation of the Framework Programme, including the budgetary section. 

9.3.  Monitoring and evaluation of the operation 

An evaluation of all the cooperation activities in the context of this action will be made by the 
Commission's departments at the end of 1998. 

10.  Implications for administrative expenditure 

•  The  Commission  is  not  requesting  any  additional  posts  for  the  management  of  this 

cooperative action. 

•  No officials  are being specifically  assigned to manage this action.  Tt vvill be managed by 

the staff authorised for the 4th Framework Programme. 

At, 

ISSN 0254-1475 

COM(96) 344  final 

DOCUMENTS 

EN 

U  15  16 

Catalogue number  :  CB-C0-96-343-EN-C 

ISBN 92-78-06610-9 

Office for Official  Publications of the European Communities 

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