The First Action Plan for Innovation in Europe - Innovation for growth and employment
Date: 1996-11-20
Institutions: European Commission
Subjects: action programme, development policy, economic policy, employment policy, innovation

IE 

HÉ 

COMMISSION  OF THE  EUROPEAN  COMMUNITIES 

Brussels,  20.11.1996 
COM(96)  589  final 

The First Action Plan for 
Innovation in Europe 

Innovation for growth and employment 

(presented  by  the  Commission) 

In order to fight  unemployment,  Europe must secure a 
stronger growth, better centred on the domains of the future 
(Confidence Pact for  employment,  June 1996) 

INTRODUCTION 

The public  debate  launched  by the  Green  Paper  has  largely  confirmed  the  basic  principles  of  the 
Commission's  diagnosis  of the  reasons  for  the  innovation  deficit1  plaguing  the  European  Union. 
There  is  widespread  agreement  on  the  need  for  a  global  approach  to  the  problem,  incorporating 
technological  aspects,  training,  venture  capital  development  and  the  legal  and  administrative 
environment.  The debate has also drawn attention to the importance of the international  dimension 
and highlighted the diversity of national, regional and sectoral situations2.  At the Florence Summit, 
the  European  council  has  clearly  indicated  that  "the fight for  employment  must  remain  the  main 
priority  for  the Union  and  its  Member  States" and  within the framework  of  a  strategy  to  achieve 
that objective  "has requested  the Commission  to establish  a plan  of action  for  the measures  to  be 
undertaken in the field of innovation"3. 

As a matter of fact, new markets are developing at a steady pace in the domains of  information, 
health, food processing and culture. A demand for new products and services is emerging. The 
ability to innovate in order to satisfy these new needs is a precondition for the future  creation of 
jobs in Europe. This ability is also necessary in order to maintain competitiveness and employment 
in the other sectors of activity. 

To act for  innovation  is in first instance the responsibility  of citizens, of industry  and of  national, 
regional and local authorities. 

Action at Community  level, while  respecting the  rules of subsidiarity  is necessary to draw  up  and 
enforce the rules of the game, particularly those on competition, intellectual property rights and the 
internal  market.  This  level  will  also  provide  the  necessary  overview  and  enable  exchanges  of 
experience  to  be  organised  and  best  practice  to  be  propagated.  Lastly,  the  Commission  should 
show  an  example  by  mobilising  its  own  instruments,  above  all  the  Framework  Programme  for 
Research and Development, and the Structural Funds. 

The Green Paper on Innovation opened up a number of pathways.  For the sake of efficiency,  this 
"First  Action  Plan" refers  to  a  limited  number  of  priority  initiatives  to  be  launched  very  soon  at 
Community  level and includes a number of schemes put into action or announced  since the  launch 
of the Green Paper, identified  as essential to the innovation process4. 

This is an initial action plan.  The Commission is on the one hand continuing to investigate some of 
the  long-term  schemes  identified  in the  Green  Paper;  on the  other,  it  is  proposing  to  carry  out  a 
more detailed analysis  of activities  which  are the province of the Member  States  and  of  applicant 
countries5,  with  their  collaboration,  with  the  aim  of  establishing,  in  a  second  phase,  a  common 
reference framework  which will help to identify  priority options and opportunities for cooperation. 

The Action Plan for Innovation identifies three areas for action. 

1  The meaning and scope of Innovation are defined in that Green Paper (COM(95)688  final 
2  A summary of the comments received is given in Annex 2. 
3  Florence Summit, conclusions of the Presidency, 21 and 22 June 1996, SN/300/46 
4  Details of these initiatives and their justification are set out in Annex 1. 
5  The ten associated countries of Central Europe, Cyprus and Malta 

to foster an innovation culture; 
to establish a framework  conducive to innovation; 
to better articulate research and innovation 

1.  THE TOP PRIORITY IS TO FOSTER A GENUINE INNOVATION CULTURE. 

Innovation  requires,  first  and  foremost,  a  state  of  mind  combining  creativity,  entrepreneurship, 
willingness  to  take  calculated  risks  and  an  acceptance  of  social,  geographical  or  professional 
mobility.  Being innovative also demands an ability to anticipate needs, rigorous organisation and a 
capacity for meeting deadlines and controlling costs. 

An innovation mentality needs to be promoted, and neither legislation nor short-term measures will 
be of any use here!  The means to act exist: 

(i) 

Education and training  first 

At national  level, continue  reviewing  courses  and  teaching  methods,  above  all  for  their  ability  to 
stimulate  creativity  and  a  spirit  of  enterprise from the earliest  age,  and  think  about  any  changes 
which may be necessary to the training of trainers.  Member States should also continue to develop 
life long training. 

The Commission's  contribution will  be to  set  up a  permanent  ''training and  innovation"  forum  to 
stimulate the exchange of experience and best practice  in this area.  It will continue to  implement 
the  White  Paper  on  Education  and  Training,  particularly  where  apprenticeship  (Erasmus 
apprenticeship,  European  apprentice  statute)  and continuing training are concerned.  It  will  foster 
links between schools as part of the  "Learning in the Information Society"  initiative. 

(ii)  Easier mobility for researchers and engineers to  firms 

In the orientations  for the Fifth  Framework  Programme for  Research, the Commission  proposes  a 
wide  programme  with  the  main  objective  of  enhancing  human  potential.  It  should  in  particular 
boost the efforts  of the framework  programme to arrange for  transnational  secondments  of  young 
researchers  and  engineers  to  businesses,  in  particular  SMËs,  to  help  with  their  innovation  or 
technology transfer  projects. 

Member  States are invited to adopt  similar measures  and to set up the conditions  for  making this 
mobility a reality. 

The Commission has launched a debate on mobility on the basis of the Green Paper and will study 
the recommendations of the Veil group6. 

(iii)  Demonstrate effective approaches to innovation in the economy and in society 

It is easier to make innovation acceptable and hence successful  in the long run if citizens,  industry, 
and their representatives  are involved  in the debate on the major  technological  choices to be made 
and  if  employees,  users  and  consumers  take  part  in  the  process.  The  dissemination  of  good 
practice in this field will be strengthened. 

The Commission has entrusted a high-level working party headed by Ms Veil with the task of 
examining the obstacles still hindering the free circulation of workers and individuals.  On the 
basis  of  its  conclusions  the  group  will  draw  up  proposals  for  removing  the  legislative, 
administrative and practical barriers identified. 

Moreover,  the  future  framework  programme  for  research  should  open  up  new  approaches  to 
demonstration,  including  technical,  economic  and  social  aspects,  management  and  organisation, 
and fostering  participation. 

(iv) 

Propagate the best management  and  organisational  methods amongst  businesses 

More and more of the firms that  succeed are "agile", reactive and likely to forge  cooperative  links 
with external centres of expertise. 

Greater  priority  should  be  given  at  both  national  and  Community  level  to  disseminating 
organisational  innovations  and  using  information  and  communication  technologies  in  this  field. 
The  Commission  will  see  to  favour  the  use  the  instruments  at  its  disposal  (the  framework 
programme,  the  Structural  Funds  and  the  training  programmes)  to  this  end.  Quality  promotion 
policy contributes to steer business and public administrations in that direction. 

Emulation  amongst  firms,  such  as  comparative  evaluation  or  benchmarking,  enabling  them  to 
compare themselves with the international  leaders in their field, is an effective  way of  propagating 
good  practice.  The  Commission  will  therefore  set  up  a  pan-European  benchmarking  system, 
starting  with  quality,  and  will  help  to  network  the  national  initiatives  which  it  is  inviting  the 
Member States to develop7. 

(v)  Lastly, stimulate innovation  in the public sector and in government 

At national  level,  innovation training or  awareness  schemes  for  decision-makers  and  managers  of 
projects and funds  in the public domain need to be developed. 

The  Commission  will  stimulate  exchanges  of  experience  on  ways  of  promoting  and  propagating 
innovation in government departments and authorities.  This may culminate in the issue of a Green 
Paper in 1998? 

It  will  also  compile  a  permanent  trend  chart  of  innovation  performance  and  policies  in  Europe, 
fonning the basis for a regular report on innovation in the European Union. 

Finally,  Member  States  are  requested  to pursue their  schemes  for  fostering  competition  in  public 
invitations to tender and the use of performance standards. 

Z  THE SECOND PRIORITY IS TO SET UP A LEGAL, REGULATORY  AND 

FINANCIAL FRAMEWORK CONDUCIVE TO INNOVATION, 

(i)  The legal and regulatory environment needs to be adapted and simplified. 

•  The European Union and the Member  States should first  of all make efforts  to improve the 
European  patent  system,  making  it  more efficient,  more accessible  and  less  expensive.  The 
public debate has confirmed the needs of users in this  field. 

Many of the defects  in the current situation stem from the coexistence in the European Union of 
three  patent  systems: national,  European  and  Community.  Since the  European  patent  system 
provides  for  no  European-level  tribunal  with jurisdiction  over  disputes  in this  area,  there  is  a 

COM(96) 463, 9 October 1996. 

danger that the competent  Courts  in the Member  States may deliver  conflicting  decisions.  The 
Community patent  is still  not  in  force,  not  yet  having  been  ratified  by all  Member  States,  and 
has already fallen behind the changing requirements and the construction of Europe. 

The Commission will prepare in  1997 a Green Paper on the issue of the Community patent.  It is 
foreseen that this text will consider: 

*  whether the Luxembourg agreement on the Community patent should be converted to a legal 

instrument under the Treaty. 

*  whether national patent convention should be further  harmonised at Community level. 
*  whether bridges should be built between the European and the Community patent system. 
*  whether it is possible to adapt the system of taxes and duties in a way that corresponds to the 

services provided and is not a barrier to the protection innovation. 

The  Commission  will  pursue  its  plan  with  the  Member  states,  to  harmonise  and  complete 
legislation  (especially  with  regard  to  the  information  society,  design  or  employment)  and  will 
It  will  implement  an 
reinforce  the  role  that  it  can  play  in  the  action  against  counterfeits. 
information  and support service for participants in the research framework  programme. 

The Commission  recommends that  Member States put in place instruments  for  assisting  SMEs 
and  universities  in the event  of  litigation, to  raise awareness  in  SMEs  and  to  develop  training 
schemes in this area. 

•  Business  start-up  and  innovation  support  must  be  simplified  at  both  national  and 

Community level 

The Commission recommends that  Member  States set quantitative objectives  and an  ambitious 
timetable for cutting the formalities and delays involved in starting up businesses. 

The Commission will take on board what is being done in some Member States by testing an ex-
ante  mechanism  for  assessing  the  impact  of  regulations  on  innovation  within  the  general 
guidelines for legislative policy. 

Businesses,  particularly  SMEs,  often  get  lost  amongst  the  plethora  of  support  services  which 
have  burgeoned  at  local,  regional,  national  and  Community  level.  Efforts  to  rationalise 
structures and coordinate initiatives need to be accentuated  so as to maximise their added  value 
and their  effectiveness. 

Similarly, local or regional networks of one-stop shops for SMEs for innovation support need to 
be generalised. 

Suitable  legal  structures  (European  companies, joint  undertakings)  must  be  adopted,  and  the 
promotion of existing instruments (EEIGs) will be actively pursued. 

(ii)  Innovation financing must be made easier in Europe 

In this vital area, much depends on private  initiatives or those at  regional  and national  level.  The 
Commission needs to work on propagating good practice and facilitating  its adoption, particularly 
with  the  support  of  pilot  projects  but  also  by  mobilising  the  Structural  Funds  and  newer 
instruments  such as the European  Investment  Fund  (EIF).  This action  should  be guided by  three 
objectives: 

First, investment  in risk capital  and  equity needs encouragement. 
This applies particularly  to start-up  investment  and  innovative, high-growth  firms,  which are  a 
major  source of new jobs. 

Long  term  sources  of  funding  (pension  funds,  life  insurance,  "business  angels"  and  save-as-
you-earn schemes) should be directed more towards risk investment. 

The Commission will support more EIF intervention to promote innovation.  This could take the 
form  of  a  pilot  mechanism  for  attracting  risk  capital  funds  in  which  the  EIF  will  take  out 
shares8 to be invested  in the early  stages  of investment and  in innovative projects,  particularly 
those derived from  Community research. 

• 

Secondly, the conditions within which European capital markets for innovative, high-growth 
companies (such as the New  Market Federation or EASDAQ) develop must be secured, which 
means  reviewing  a  number  of  legal  and  fiscal  provisions  and  seeing  to  it  that  the  necessary 
expertise is available. 

Thirdly,  the  interfaces  between  technological  innovation  and  financial  circles  need  to  be 
strengthened.  Support  is  needed  for  the transnational  dissemination  of  good  practice  and  the 
testing of new methods  in this  area.  Also, closer  links between  Community  research  and  risk 
capital  should  improve  the  exploitation  of  the  results  of  the  research.  An  information  and 
guidance service on this topic will be set up for those taking part in the framework  programme. 

3.  THE THIRD PRIORITY IS TO GEAR  RESEARCH MORE CLOSELY  TO 

INNOVATION AT BOTH NATIONAL AND COMMUNITY LEVEL. 

In knowledge-based  economies,  the  efficient  systems  are  those  which  combine  the  ability  to 
produce knowledge, the mechanisms for disseminating it as widely as possible and the aptitude 
of the  individuals,  companies  and  organisations  concerned  to  absorb  and  use  it.  The  crucial 
factor  for  innovation is thus the link between  research (the production of knowledge), training, 
mobility,  interaction  (the  dissemination  of  knowledge)  and  the  ability  of  firms,  particularly 
SMEs, to absorb new technologies and know-how. 

(i)  At national level, several types of action are necessary, depending on the Member State; the 

Commission may give assistance where appropriate: 

•  Firstly, develop a strategic foresight  vision of research and of its application. 

Exercises  such  as,"key  technologies",  "Delphi"  or  "Foresight"  can  contribute  to  directing 
collective efforts  to the sectors, areas or technologies, which are the most relevant for the  future. 
Member States which do not have any experience in that area ought to consider the  opportunity 
of this type of approach. 

The Commission will act to: 
- 

facilitating the exchange of experiences between Member states and exploiting the results of 
these exercises in order to identify  relevant leads at the Community level. 

- 

reinforce technology watch at European level within the framework  of the European  Science 
and Technology  Observatory,  set  up  by the  RCC's  Institute  for  Prospective  Technological 
Studies as focal point for the Member states observatories. 

8  Since June 1996, EIFs statute allows it to take such participations 

Secondly, strengthen  the research  carried  out by industry, in both  absolute and  relative 
terms 

Member States are requested to draw up quantified  and ambitious objectives  aiming to  increase 
the share on the Gross Internal  Product dedicated to research, to development and to innovation, 
in particular  by encouraging  research undertaken by industry (in particular  the one financed by 
enterprises  or the one financed by governments  within  the limits  allowed  by  article  92  of  the 
Treaty).  In  Europe, the share  of GDP  devoted to  research  financed  by  industry,  which  offers 
more opportunities  for exploitation,  is on average 38% below that  of the USA and  55% below 
that of Japan. 

Thirdly, encourage  strongly  the  start-up  of technology-based  firms  ("campus  companies", 
spin-offs,  etc.)' 

The Commission recommends that Member States step up the action they are taking in this area 
and exploit the structures which have proved effective  in the  field. 

As from  1997 it will organise a thorough exchange with Member States on this topic,  involving 
leading  players  in  the  field.  This  will  concentrate  on  measures  for  facilitating  this  spin-off 
process  (covering  intellectual  property  rights,  social  rights,  financial  arrangements,  etc.)  and 
national  or  regional  promotion  schemes.  It  will  back  up  the  dissemination  of  best  practice 
through  pilot  projects  involving,  for  example,  university  technology-transfer  departments,  the 
regional institutions concerned, venture capital companies and technology brokers. 

Fourthly, intensify the cooperation between public, university and industrial  research 

The  Commission  recommends  that  Member  States  establish  a  legal  and  practical  framework 
which will foster this cooperation by, for example: 

-  providing  opportunities  for  universities  and  researchers  to  spend  some  of  their  time 

developing companies; 

-  enabling  universities  and  public  research  centres  to  conclude  exclusive  contracts  with 

industry for exploiting results, including through financial holdings. 

Lastly,  strengthen  the  capacity  of  SMEs  for  absorbing  new  technologies  and  know-how, 
whatever their origin 

Substantial  effort  needs to  be  made  in this  area.  Member  States  should  extend  the  scope  of 
their  measures  to  include  the  transfer  of  technologies  of  international  origin.  Companies, 
particularly  SMEs,  should  have  easier  access  to  expertise  at  the  highest  level,  European  or 
worldwide, in technological, organisational or management methods. 

At  national  and  regional  level,  moreover,  the  drive  to  rationalise  innovation  support 
organisations,  as  mentioned  above,  needs  to  be  accompanied  by  measures  enabling  them  to 
achieve critical mass and the necessary degree of professionalism. 

The  Commission  will  intensify  activities  for  creating  improved  links  between  the  various 
national and  regional  innovation-support  systems.  Working with the players  concerned,  it will 
help to  professionalise  or,  where  appropriate,  certify  the  new  professions  which  will  need  to 
emerge in this context. 

(ii)  At European Union level, the Community will mobilise all of its innovation instruments 

•  First,  the  Commission  will  establish  within  the  Fifth  Framework  Programme  a  single, 
simplified  horizontal framework  for integrating the "innovation" and "SME" dimensions. 

Accepting  that  large companies  have  an  important  role to  play  in the  Innovation  process,  in 
particular with smaller firms, this  action  should give more SMEs  access  to  all  research work 
and its results, develop technology transfer and stimulate innovation. 

-  The Framework  Programme approach  should be an integrated  approach.  Research  projects 
will take more systematic  account of organisational,  management,  market,  financial,  legal and 
protection aspects. 

-  Secondly,  the  methods  of  implementing  projects  and  programmes  will  be  changed.  This 

means in particular: 

• 
• 

• 

• 

the criteria for assessing proposals; 
encouragement during the  research phase to prepare for exploiting  and disseminating  the 
results  (documentation  of  results,  complementary  studies,  training  schemes,  licence 
preparation, finding partners, upstream consideration of the pre-standardisation dimension, 
etc.); 
adapting to contracts, particularly to make them more flexible and to give better protection 
to  the  intellectual  property  rights  of  contractors  where  development  or  demonstration 
projects are concerned; 
aiming  at  maximum  user-friendliness  for  SMEs  and  faster  procedures  involving  fixed 
deadlines for the various phases. 

Thirdly, the coordination of the conception and the management of these measures needs to be 
reinforced: 

•  more global consistency of the actions; 
• 
• 

an integrated range of services suited to the needs of the various categories of SMEs; 
gateways between projects at different stages (research, demonstration, transfer, 
exploitation); 
optimum use  of the existing  networks of  assistance,  with  innovation,  project  preparation 
and the search for partners, especially with regards to SMEs. 

• 

Lastly, the positive experience of the Research-Industry Task Forces will be put to contribution 
within the Fifth Framework Programme for Research. 

The  debate  on  the  Green  Paper  on  Innovation  and  the  experience  gained  through  the  Task 
Forces  in the Fourth Framework  Programme have demonstrated the usefulness  of  instruments 
which: 

better identify, together with users, researchers and industry, the technological  obstacles whose 
solution is an economic and social priority in Europe; 
mobilise  expertise  and private  or  public  resources,  Community  or national,  to  the  maximum 
extent  in  order  to  bring  large-scale  targeted  projects  to  a  successful  conclusion,  thereby 
obtaining faster results from research effort,  avoiding duplication  and increasing the visibility 
and the exemplary nature of Community research. 

In consequence, it would be desirable to improve at Community level: 

the  incentive  character  of  participation  in the work  of Task  forces,  by taking  innovation  more 
into account as a selection criterion for projects within the Fifth  framework  programme; 
the efficiency  of procedures  by  planning  simultaneous  or  integrated  calls  for  proposals  for  the 
various programmes for priority  research. 

In  addition,  outside  the  framework  programme,  all  Community  instruments  will  be 
mobilised to support  innovation: 

The  increased  input  of  the  Structural  Funds  into  innovation  will  be  continued  at  both 
Community level (Article  10 of the ERDF, SME initiatives, ADAPT, LEADER II) and national 
and regional level. 

Member  States  and  the  regions  concerned  are  requested  to  invest  more  in  schemes  linked  to 
innovation,  subject  to  the  resources  available  for  the  current  programming  period  and  in  the 
next generation of Structural  Funds. 

Here,  the  Commission  will  draw  on  the  experience  gained  with  regional  innovation  strategy 
projects jointly  subsidised  by  Article  10 of  the  ERDF  and  the  Innovation  programme.  It  will 
also stress the importance of innovation in its various initiatives. 

The European  Union must make full  use of the international  dimension  of innovation.  Two-
thirds of world innovations and scientific  discoveries are made outside the European  Union, and 
most expanding markets are to be found outside Europe.  This means, in particular: 

• 

• 
• 

• 

• 

closer interaction of the framework  programme with the COST and EUREKA  cooperation 
frameworks; 
support for international industrial cooperation; 
intensified  international  cooperation  on  research  and  development  with  non-Member 
countries; 
stronger  encouragement  to  entities  in  the  countries  concerned,  through  the  possibilities 
offered  by  instruments  such  as  TACIS,  PHARE9,  MEDA,  etc.  to  search  a  stronger 
synergy with community research projects. 
continued  vigilance  in  international  negotiations  for  aspects  liable  to  affect  European 
innovation  and  its  outlets  (such  as  intellectual  property  rights  and  anti-counterfeit 
measures). 

Lastly, the action plan will be fleshed  out in various priority  sectors or fields 

Situations vary widely according to the country, the sector and the technology.  The action plan 
will  therefore  need  to  be  adapted  to  certain fields or  sectors  designated  as  priorities.  These 
might  include environmental  protection  and  sustainable development,  the  services  sector,  rural 
development,  aspects  related  to  demand  and  consumers,  the  audio-visual  sector  and  better 
exploitation of space and dual-use technology. 

CONCLUSION 

In  the  three  main  fields  identified,  the  Commission  is  putting  forward  those  measures  whose 
priority, expected  impact or urgency has been confirmed  by the debate.  These are summarised  in 

For those countires which are not applicant 

the tables  below.  At  Community  level  these  measures  can be financed  from  existing  or  planned 
budgets. 

The main effort  must nevertheless  be made at local,  regional  or national  level.  The  Commission 
proposes to analyse in more detail those activities which are the province of the Member States, in 
collaboration with them, in order to establish a joint reference framework and so help them identify 
the priority options and the opportunities for cooperation. 

It will  take  the  necessary  steps  to  ensure  effective  coordination  of  the  measures  deriving from 
various policies and will strengthen interaction with Member States.  It invites the Member States 
to do the same. 

The Commission will  draw up a detailed implementation schedule and will precisely  quantify  the 
costs of the measures it is proposing.  On this basis it will submit the corresponding legislative and 
regulatory proposals to the Council, the European Parliament, the Economic and Social Committee 
and  the  Committee  of  the  Regions. 
It  will  report  regularly  to  the  European  Council  on  the 
implementation  of the action plan,  including,  where necessary,  proposals  for  any  adjustments  or 
additions  which  may  prove  necessary  in  the  light  of  developments  or  in  view  of  the  specific 
contexts in which the plan is applied. 

The enthusiasm and energy demonstrated must be mobilised in order to implement this Action Plan 
and so build a more innovative, competitive and job-creating Europe. 

************************* 

The summary tables below are an integral part of this action plan. 

10 

1.  FOSTERING  AN INNOVATION  CULTURE 

1.1  NEW  ACTIONS 

1- Education and initial and further  training 

Commission 

•  Set up a  "training and innovation" forum  to exchange experience and disseminate  best  practice 

(1997). 

Member States and regional  authorities 

•  Make  a  critical  examination  of  teaching  programmes  and  methods  and  the  training  of 

instructors. 

•  Adapt  the  content  of  initial  training  to  develop,  from  the  earliest  age,  creativity,  spirit  of 

enterprise, etc. 

2- Mobility  of students, research workers  and teachers 

Commission 
-  Put  forward  a  wide  horizontal  programme  aiming  to  enhancing  human  potential  in  the  Fifth 

Framework Programme for Research (first half of 1997); 

•  Stimulate  transnational  "industrial  PhDs"  (placement  of  research  workers/engineers  in  firms) 

(pilot action in 1997). 

•  Make Community aids to mobility more flexible (5th FPRD). 

Member  States 
•  Adopt measures for the temporary secondment of research workers to firms, especially SMEs. 
•  Ensure  that  the  conditions  actually  exist  for  mobility  between  research  and  enterprises 

(assessment of qualifications, career development). 

3- Innovation and management of enterprises 

Commission 
•  Promote  organisational  innovation  through  Community  instruments  at  its disposal  (framework 

programme, Structural Funds and training programmes, etc.) (1997/98). 
Introduce a benchmarking system at the European level (pilot project in 1997). 

• 

4-Public authorities 

Commission 
•  Develop  exchanges  of  experience  on  the  promotion  and  dissemination  of  innovation  in 
government offices  and public services.  Conference in  1997 and publication of a green paper in 
1998. 

•  Compile a permanent trend chart of innovation performance  and policies in Europe (to be put in 

place in  1997). 

Member States 
•  Develop initiatives to provide information  and increase awareness among politicians and senior 

officials  of what is at stake with innovation. 

11 

1. FOSTERING AN INNOVATION CULTURE 

1.2 CURRENT ACTIONS FOR IMPROVING THE INNOVATION ENVIRONMENT IN 
EUROPE 

1- Education and initial and further training 

Commission 
•  Implement the proposals  of  the  White  Paper on Education  and Training  (especially  Erasmus 

apprenticeships, European apprenticeship statute). 

•  Pilot  projects  to  encourage  links  between  schools  ("Learning  in  the  information  society" 

initiative). 

Member State and regional  authorities 

•  Develop sandwich course training, especially at university level. 
•  Encourage the effective knowledge of several Community languages. 

2- Mobility of research workers, students and teachers 

Commission and Member States 

•  Launch a debate on the Green Paper with regard to the mobility of  research workers, students 
and  teachers,  and  implement  proven  routes  of  action;  examine  and  possibly  implement  the 
recommendations of the Veil Group. 

3- Raising public awareness and involving those concerned 

Commission 

•  Develop initiatives to disseminate best practice in this  field. 

Member States 
•  Foster a scientific and technical culture and awareness of the beneficial effects of innovation. 

Commission and Member States 

•  Involve  enterprises,  the  public  and  their  representatives  in  discussing  major  technological 

options. 

•  Develop  measures  to  increase  the  involvement  of  employees,  users  or  consumers  and  to 

facilitate the acceptance of innovation. 

4- Innovation and management of enterprises 

Member States 
•  Increase training activities for innovation management. 
•  Foster the development of the practice of "benchmarking" among enterprises. 

5- Public authorities 

Member States 
•  Stimulate competition in public invitations to tender and the use of performance standards. 

12 

2  ESTABLISHING  A FRAMEWORK  CONDUCIVE  TO  INNOVATION 

2.1  NEW  ACTIONS 

1- Protection  of intellectual  and  industrial  property 

Commission  and  Member  States 

•  Launch of a Green Paper on the issue of the Community patent (September  1997) 

Commission 

•  Set up a  service of assistance  on  intellectual  property  (IPR-Helpline) for  Community  research 

(1997). 

Member  States 

•  Set up instruments to inform and help SMEs and universities in the event of disputes. 

2- Administrative  simplification 

Commission 

• 

• 

Introduce  a  pilot  mechanism  for  the  ex-ante  assessment  of  the  impact  of  regulations  on 
innovation (end  1997). 
Implement  operational  procedures  for  coordinating  Community  innovation  support  networks 
(1997). 

Member  States 

•  Set objectives and a precise timetable for simplifying  business start-up formalities. 

Member  States  and  local  authorities 

•  Speed up the rationalisation of innovation support activities and bodies: 

3- Financing 

Commission 

•  Reinforce  EIF  action  in  favour  of  innovation  and  cooperation  between  the  EIB  and  the 

• 

Structural  Funds (beginning of 1997). 
Improve the links between Community research and risk capital, particularly in order to provide 
information  and guidance  services  for  those taking part  in the  framework  programme  and  for 
investors (mid-1997). 

•  Develop  the  exchange  of  experience  and  the  dissemination  of  best  practice  between  Member 

states and operators (1997 and  1998). 

Member  States 

Introduce the framework  conditions for stock exchanges for growth enterprises. 

• 
•  Make greater efforts  to direct "patient" capital towards risk investment. 

4- Taxation 

Commission 

•  Consider a communication on "taxation and innovation" (possibly in 1997). 

Member  States 

•  Promote fiscal and accounting treatment more favourable to intangible investment. 

13 

2.  ESTABLISHING A FRAMEWORK  CONDUCIVE TO  INNOVATION 

2.2  CURRENT ACTIONS FOR IMPROVING THE INNOVATION ENVIRONMENT  IN 

EUROPE 

1- Competition 

Commission 

•  Follow-up  to the  Green  Paper  on  merger  monitoring, extending  the field of  application  of  unified 

European monitoring of mergers and harmonising the treatment of joint structural enterprises. 

•  Publish a green paper on the application of the rules of competition to vertical agreements. 

•  Continue the dialogue with the competition  authorities  in the United  States,  to allow  the  bringing 
together  of  the  definitions  of  relevant  market,  particularly  in  agreements  with  a  high  technology 
content. 

2- Protection  of intellectual and industrial  property 

Commission and Member  States 

•  Complete  the  harmonisation  of  legislations  to  take  account  of  developments  linked  to  the 
technologies  of  the  information  society  and  supplement  legislations  on  design  protection  and 
employees' inventions. 

Commission 
•  Strengthen anti-counterfeit measures. 

Member  States 

•  Ensure the adoption of the proposal for a directive on biotechnological inventions. 
•  Support the efforts of the European Patent Office to reduce filing costs. 
•  Transpose the European directives on the protection of intellectual property into national  legislation 

by the end of 1996. 

•  Develop training in this  field. 
•  Make enterprises aware of the competitive benefits of protection. 

3- Administrative  simplification 

Commission 

• 

Introduce  into the work  of the  Committee  for  the improvement  and  simplification  of  the  business 
environment a special action on innovation. 

•  Accord the required importance to innovation when simplifying  administration (e.g. in the choice of 

sector under the SLIM project). 

Member  States 

•  Provide enterprises with one-stop shops for innovation questions. 

4- Legal and regulatory  environment 

Company law 

Council 

•  Speedy adoption of a European Company Statute. 

Commission 

•  Continue to encourage the use of  European  Economic Interest  Groupings, especially  by  providing 

better information. 

•  Study the feasibility of creating a joint undertaking statute (Article 130N of the Treaty). 

14 

3.  GEARING  RESEARCH  TO  INNOVATION 
3.1  NEW  ACTIONS 

1.National measures  and their Community  back-up 

(i) 

Strengthening  research  carried  out by  companies 

Member  States 
•  formulate quantified objectives and put in place the appropriate incentive policies. 

(ii) 

Start-up of technology-based  companies 

Commission 
•  organise  thorough  exchanges  with  Member  States  and  players  in  the  field  on  legal,  fiscal  and 

promotional measures (1997). 

•  launch pilot schemes  for disseminating  good  practice,  involving  universities,  risk  capital,  industry  and 

regional institutions (1998). 

(iii) 

Intensified  cooperation between  research, universities and  companies 

Member  States 

•  set up a legal framework to facilitate exploitation by research organisations, including business start-up. 

(iv)  Strengthening the ability of SMEs to absorb technologies  and  know-how 

Member  States 
-  support transnational technology transfer. 
Commission  and Member  States 
•  better links between national and regional  innovation systems at Community level. 

(v)  Demonstration  of effective  approaches to  innovation 

Commission 
-  set up a  new  generation  of  demonstration  projects  integrating  the  technical,  organisational  and  social 

aspects of innovation (5th FPRD). 

2.Incorporating  the  Innovation  and  SME  dimensions  into  the  Framework  Programme  for 

Research 

Commission 
•  adapt the  implementation  procedures  for  the  Framework  Programme  (project  selection  criteria,  faster 

project Selection, more demonstration schemes, legal framework for contracts) (4th and 5th FP). 

•  strengthen the consultation and coordination role of the research-industry Task Forces. 
-  develop  a  programme  "Innovate  and  giving  SMEs  greater  involvement  and  providing  an  integrated 
approach to  the  goal  of  innovation  through  the  legal  and financial treatment  of  projects,  particularly 
those supporting SMEs (5th FPRD). 

3.Mobilise  other Community  instruments 
Commission and Member  States 
•  prepare to flesh out the action plan in various priority sectors and fields of technology. 

15 

3.  GEARING  RESEARCH TO  INNOVATION 

3.2  CURRENT ACTIONS FOR IMPROVING THE INNOVATION ENVIRONMENT IN 
EUROPE 

1.  National measures and Community  back-up 

A strategic vision of research  and  development 

(i) 
Member States 
•  consultations on long-term technology forecasting (Foresight). 

Commission 
• 
•  stimulate the technology watch (network of national organisations around the European Science and 

facilitate the exchange of experience and the exploitation of results on a Community scale; 

Technology Observatory (ESTO)). 

(ii) Start-up of technology-based  companies 
Member States 
•  stronger promotion of "campus companies" and spin-offs. 

Intensified  cooperation between  research, universities and  industry 

(iii) 
Member States 
•  pursue and strengthen action in this area. 

Commission 
•  analyse the obstacles and disseminate good practice; 
•  support national efforts  to improve the management of research and technology organisations and 

their international benchmarking; 

•  organise sectoral and inter-sectoral technology platforms. 

Strengthening the ability of SMEs to absorb new technologies and knowledge 

(iv) 
Member States 
• 

improve the efficiency  and transparency of support structures. 

Commission 
•  help professionalise the innovation support services; 
•  set up a scheme for promoting the absorption and use of technologies (first-use support, access to 
technologies not developed in the European Union, internationalisation of young technology-based 
firms,  regional projects). 

(v) Demonstration  of effective  approaches to innovation 
Member States and  Commission 

•  make better use of specialists in the social and behavioural sciences in technology projects. 

2.  Incorporating the Innovation  and SME dimensions into the Framework  Programme 

(see New Actions) 

3.  Mobilise other Community  instruments 
Commission and Member  States 
•  direct more of the Structural Funds towards innovation; 
•  make the most of the international dimension of innovation. 

16 

ACTION PLAN FOR INNOVATION IN EUROPE 

ANNEX 1 

Description of actions 

/?** 

CONTENTS 

INTRODUCTION 

1. 
2. 
3. 

Consultation 
Reactions 
A first Action Plan 

A  -  FOSTERING AN INNOVATION  CULTURE: 

1. 
2. 
3. 
4. 
5. 

Education and training 
Encouraging mobility 
Raising public awareness and involving the operators concerned 
Business management 
Public authorities 
(i) 
(ii) 
(iii) 

Innovation  in the public sector 
Public contracts 
Analysis of innovation policies and systems 

B. ESTABLISHING A FAVOURABLE FRAMEWORK 

1. 

Legal, administrative and regulatory environment 
(i) 
(ii) 
(iii) 
(iv) 
(v) 

Competition 
Protection of intellectual and industrial property 
Administrative simplification 
Company  law 
Standards 

2. 

Financial environment 
(i) 
(ii) 

Financing 
Statutory deductions 

C-  GEARING RESEARCH TO INNOVATION 

1. 

National measures with Community support 
(i) 
(ii) 
(iii) 
(iv) 
(v) 

A long-term strategic approach to research 
Strengthening research carried out by industry 
Start-up of technology-based  companies 
Closer cooperation between public research, universities and industry 
Expansion  of  SMEs'  capacity  for  absorbing  new  technologies  and 
know-how 
Demonstration of effective  approaches to innovation 

(vi) 

2. 

Incorporating 
Programme 

the 

innovation  and  SME  dimensions 

into 

the  Framework 

32 

3.  Mobilising other Community instruments 

(i) 
(ii) 
(iii) 

Gearing the Structural Funds more towards innovation 
Making the most of the international dimension of innovation 
Fleshing  out  the  action  plan  in  various  priority  sectors  and  fields  of 
technology 

.....37 

CONCLUSION: 

41 

S!% 

Ill 
iii 
iii 
iv 

6 

6 
8 
8 
9 
10 
10 
11 
11 

14 

14 
14 
15 
18 
20 
21 

21 
21 
23 

27 

28 
28 
29 
29 
30 

30 
31 

35 
35 
36 

In  order  to  fight  unemployment.  Europe  must  secure 
a growth  stronger  and  better  centred  on  the  domains 
of  the future  (Confidence  pact  for  employment,  June 
1996). 

INTRODUCTION 

1. 

Consultation 

The  Green  Paper  on  Innovation1  prompted  a  very  important  reaction  and  there  was  a  wide-ranging 
debate,  which  extended  beyond  the  borders  of  the  European  Economic  Area.  More  than  40  000 
copies were circulated. The Green  Paper  was  studied  by the various  Community  institutions,  by the 
governments and by those directly concerned. 

The opinions of the European Parliament, the Economic and Social Committee and the Committee of 
the  Regions2  were  favourable  and  emphasised 
importance  of  technology 
dissemination,  the  principle  of  subsidiarity,  the role the economic  operators  and  the  social  aspect  of 
innovation. 

in  particular  the 

In all the Member  States, together with Norway  and  Iceland, conferences  to discuss the Green  Paper 
were organised  at the Commission's  initiative and with the support of the national  authorities.  They 
brought  together  more  than  5  000  people:  industrialists  and  representatives  of  research  centres, 
financial institutions, government departments, innovation bodies, trade unions, universities, etc. 

More  than  300  detailed  contributions  were  also  submitted  to  the  Commission,  mainly  from 
enterprises or their representative organisations3. 

Lastly,  in  addition  to  the  comments  from  field  players  directly  involved,  official  responses4  were 
received from  most of the Member States, as well as from Norway and Hungary. 

There was thus an  unprecedented  response  to the  need  for  innovation, viewed  not as an  end  in  itself 
but as an essential  instrument  for  attaining  fundamental  social objectives  and  lasting and  sustainable 
growth, as well as for  improving the competitiveness  of enterprises and employment. At the  Florence 
Summit, the  European  council  has clearly  indicated  that  "the fight for  employment  must  remain  the 
main priority for the Union and its Member States" and within the framework  of a strategy to achieve 
that  objective  "has  requested  the  Commission  to  establish  a  plan  of  action  for  the  measures  to  be 
undertaken  in the field of innovation"5.  As a matter of fact,  new markets  are developing  at a steady 
pace in the domains of  information,  health, food  processing and culture. A demand  for  new  products 
and services is emerging. The ability to innovate  in order to satisfy  these new needs is a  precondition 
for  the  future  creation  of  jobs  in  Europe.  This  ability  is  also  necessary  in  order  to  maintain 
competitiveness and employment in the other sectors of activity. 

2. 

Reactions 

The views that were expressed naturally differ,  but there was agreement on: 

• 
• 

• 

the importance and relevance of the discussion, 
the  integrated  approach  proposed  by  the  Commission  (ranging  over  the  questions  of  training, 
competition, legal and administrative framework, venture capital, etc.), 
the broad  lines of the diagnosis. 

"Green Paper on Innovation", COM(95)688  final. 

1 
2  See Annex 2c. 
3  The annexed document 2a summarises these contributions. 
4  See Annex 2b. 
5  Florence Summit, conclusions of the Presidency, 21 and 22 June 1996, SN/300/96. 

yff 

• 

the  urgent  need  for  action  that  is  coordinated  at  each  separate  level  of  intervention  as  well  as 
between  levels. 

A number  of salient  points  emerged  from  the  debate: 

• 

the  diversity  of  national,  regional  and  sectoral  circumstances.  A  uniform  Community-wide  approach 
which  would  disregard  these  specific  features  would  inevitably  fail.  To  act  for  innovation  is  in  first 
instance the  responsibility  of citizens, of  industry  and  of national,  regional  and  locaj  authorities. 

Strict application  of the  principle  of  subsidiarity  is  essential; 

• 

value added  at Community  level, especially  for: 
-  drawing  up  and  ensuring  compliance  with  the  rules  of  the  game  (framework  conditions  for 

competition,  the  internal  market,  industrial  property  rights, etc.); 

-  providing the overall  view  needed  for  formulating  options on a common  basis; 
-  exchanging  experiences  and  disseminating  best  practice; 
-  providing  the  necessary  impetus  and  political  signals  by  means  of  Community  policies  and 

instruments  (research,  structural  funds,  internal  markets,  SMEs,  etc.); 

• 

the areas  in which  priority  actions  should  be  launched, at both  national  and Community  levels. 

The  main  aims  are to: 

- 

foster  in  the  economy  and  society  a  genuine  innovation  culture,  favouring  creativeness, 
willingness  to  take  risks  and  experimentation.  This  requires,  in  particular,  long-term  actions 
in  the  areas  of  education  and  further  training,  closer  links  between  the  worlds  of  education 
and  the  economy  and  promoting  awareness  among  those  involved  in  the  public  and  private 
sectors; 

-  adapt  the administrative,  legal, regulatory  and  financial  environment,  so that  it  is  permanently 
more  conducive  to  innovation. 
In  addition  to  streamlining  administrative  procedures,  at 
Community  as  well  as  at  national  and  regional  levels,  this  involves  in  particular  rules  on 
competition  and  intellectual  property  to  encourage  innovation  and  legal  arrangements  to 
facilitate  the  setting-up  of  international  cooperation,  but  also  the  creation  of  an  environment 
which  is  more  conducive  to  innovation  financing  and  to  the  reinforcement  of  the  financial 
structure  and  own  funds  of  innovative  enterprises. 

-  maintain  -  but  also  and  more  usually  to  focus  and  consolidate  -  collective  research  efforts, 
especially  among  enterprises,  as  well  as  their  ability  to  access  and  benefit  from  new 
technologies  and  knowledge,  from  whatever  source.  This  involves  better  anticipation  of 
requirements,  technical  changes  and  markets,  together  with  closer  collaboration  between 
research  and  industry  and  a  special  emphasis  on  the  dissemination  of  technologies  and  skills, 
especially among  SMEs and the  least  favoured  regions. 

• 

the  importance  of the  international  dimension,  which  is  both  a  fact  and  a  necessity6.  Promoting 
innovation  in  Europe  does  not  mean  turning  inward.  Action  needs  to  be  taken  against  an  open 
and dynamic  background  of  international  cooperation and  competition. 

3. 

A first  Action  Plan 

The  Green  Paper  on  Innovation  suggested  various  options.  For  the  sake  of  effectiveness,  this  First 
Action  Plan  outlines  a  limited  number  of  priority  actions  to be  launched  speedily  at  Community  level 

Two-thirds  of the world's  advances  in science  and technology  are made outside the  European  Union.  The 
expanding markets are outside Europe, primarily  in south-east Asia, with its three billion  inhabitants and an 
overall  income  which  in  a  few  years  will  exceed  that  of  the  United  States  and  the  European  Union 
combined.  Flows of capital, information  and technology  are global.  Direct investment abroad soared  from 
68  billion  dollars  in  1960  to  1 650  billion  in  1993,  excluding  intra-Cbmmunity  investment.  Strategic 
alliances, especially  in the RTD field, undermine the ability of governments to identify  the  beneficiaries  of 
their technology policies.  Close on 40% of world trade is conducted within enterprises 

to 

and incorporates actions which are in progress or which have been announced since the publication of 
the Green Paper and which were identified  there as vital for the process of innovation. 

This  is  a  first  action  plan,  with  the  Commission  both  continuing  to  study  some  of  the  options 
indicated  in the  Green  Paper,  the  implementation  of  which  requires  a  long-term  approach,  and  also 
proposing  with  regard  to  activities  which  are the  responsibility  of  the  Member  States  and  applicant 
countries  to  conduct  a  more  thoroughgoing  analysis  in  collaboration  with  them,  with  the  aim  of 
establishing  at  a  second  stage  a  common  framework  of  reference  which  can  help  to  identify  the 
priority options, as well as opportunities  for cooperation. With regard to the Community  level, at this 
stage the only measures considered  are those for  which the operating  method could be described  and 
which can be inserted  in the known budgetary framework,  without  incurring any new expenditure but 
through the possible reallocation of available resources. 

Innovation  involves  a  variety  of  operators  and  implies  an  integrated  approach  with  intensive 
interaction.  This means that the proposed  measures are  inevitably multiple and varied.  For the  sake 
of clarity, they have been classified  by order of decreasing chronology and  likely effect  in accordance 
into the following three objectives: 

• 
• 
• 

fostering  an innovation culture in the economy and society; 
establishing a framework  conducive to innovation; 
linking research and innovation more  effectively. 

This initial plan outlines a general  framework  for action  at Community  and Member  State  level, and 
also  for  applicant  countries7.  It  is  intended  to  be  the  first  stage  in  a  lasting  mobilisation  of  the 
Community, the governments and those in the field for the benefit  of innovation. 

At Community  level, the new actions will be launched  immediately.  Current actions will be speeded 
up  or  consolidated,  if  need  be.  Reflexion  will  continue  and  the  plan  will  be  applied,  where 
appropriate, in the thematic fields and the industrial or service sectors where it seems suitable. 

At national  level, the  Commission  will  carry  out  further  analysis,  in collaboration  with  the  Member 
States and  applicant  countries,  in order to establish a common  frame  of reference  and to help them 
identify  priority options and cooperation opportunities. 

7 

In  compliance  with  the  conclusions  of  the  Council  meetings  in  Copenhagen  and  Essen,  Community 
programmes or similar initiatives will be opened to allow the applicant countries to participate as part of the 
strategy  for  preparing  for  accession.  These countries are therefore  concerned  by a  large number  of the 
points dealt with  in the action plan.  These are in particular the proposals on education and training, the 
mobility of students and research workers, public awareness, as well as the involvement of these countries 
in the Fifth  Framework  Programme's  targeted  socio-economic  research.  Furthermore,  account  must be 
taken of these countries with regard to the  implementation  of the recommendations  on competition  and 
improving  the  legal,  administrative  and  regulatory  environment.  They  should  also be  in  a  position  to 
benefit fully from trans-European capital markets.  The concrete arrangements for their involvement in the 
Fifth  Framework Programme are still to be worked out.  It is nevertheless likely that they will emphasise 
university-industry 
SMEs. 
A special debate will be initiated with these countries as part of the structural dialogue on the way in which 
they can be integrated in the action plan. 

innovation 

measures 

among 

links 

and 

for 

? / 

A  -  FOSTERING  AN  INNOVATION  CULTURE: 

1.1 

Innovation  depends  on  creativeness,  a  sense  of  initiative  and  enterprise,  a  willingness  to  take 
calculated  risks  and  a  readiness  to  cope  with  mistakes  and  accept  social,  geographical  or 
professional  mobility.  But  innovation  also  needs  other  skills:  the  ability  to  anticipate  needs, 
careful  organisation,  and  a  capacity  for  meeting  deadlines  and  controlling  costs  .  Innovation 
increasingly  relies  on  a  wide  range  of  interaction,  which  means  that  skills  in  information 
collection  and  processing  and  personal  and  social  communication  skills  are  also  needed.  A 
favourable culture is essential. 

The  United  States,  with  its  frontier  mentality  and  the  idea  of  the  melting  pot,  thrives  on  risk, 
social  and  geographical  mobility  and  straightforward  relations.  In  Japan,  culture  and  society 
emphasise  excellence,  steady  improvement  and  organisation.  As  for  Europe,  it  has  grown  up 
around  social  systems which  differ  widely  but where, today, as a rule, risk-taking  is shunned  in 
favour of seeking security and stability. 

Changing the culture and the mentality  of a people cannot  be achieved  by  legislation  or by any 
short-term  measures.  Means of action  exist, however.  First and  foremost  come education  and 
training.  The  mobility  of  people  facilitates  the  spread  of  knowledge  and  the  flow  of  ideas. 
Participative  approaches  make  it easier  for  the  groups concerned  to  adhere.  Actions  to  inform 
and raise awareness, in particular through the use of new media, together with the dissemination 
of new methods of organising and managing business and government, are also needed. 

/.  Education and  training 

1.2. 

Initial  education  needs  to  concentrate  on  imparting  the  skills  that  are  needed  to  produce  and 
implement innovation.  Technical education and vocational training must not be neglected8.  But 
the acquisition  of a  basic  educational  grounding  is essential  to  facilitate  ongoing  adaptation  to 
the new skills that innovation requires. 

It  is wrong to think that training  at the  start of  life  will always  suffice.  Training  is a  necessity 
throughout  life. 
It  comes  up  against  particular  problems  in  SMEs  (especially  the  limited 
available  time  of  managers  and  employees)  which  need  to  be  dealt  with  through  novel 
solutions9,  possibly  involving  distance  learning  and  multimedia  techniques.  The  third 
multiannual  programme  for  SMEs  proposes  pilot  projects  to  help  find  new  approaches  in  this 
area10. 

There  is  also  a  need  to  bring  education  and  business  closer  together,  especially  by  means  of 
sandwich courses, so that apart from  helping young people enter the job  market  it is possible to 
prepare for the new skills or qualifications  that are needed and to adapt  training to these needs. 
Alongside  its  education  and  training  programmes,  especially  Leonardo  da  Vinci  and  Socrates, 
the European  Union  contributes to these aims through the European  Social  Fund  under  various 
Community objectives and initiatives such as ADAPT and EMPLOI. 

"In 1996 Europe had 4.7 scientists and engineers for every thousand inhabitants, compared with 7.4 in 
the United States and 8 in Japan.  Also, the combined total of scientists and engineers in China, India 
and Indonesia is now the same as the figure for the European Union" ("Inventing tomorrow: Europe's 
research at the service of its people",  p.6).  COM(96)332 final, 10/7/96 
The joint Council  and Commission  report on employment (SI(95)1000) stresses the  importance of 
adapting training programmes to the needs of SMEs and providing incentives for SMEs that want to 
invest in training. 
Proposal  for  a Council  Decision  on  a Third  Multiannual  Programme  for  Small  and  Medium-sized 
Enterprises (SMEs) in the European Union (1997-2000), COM(96)98. 

10 

21 

The Member  States  and regional  or  local  authorities  are invited to  reinforce  their action  in these 
fields  and, in particular, to: 

- 

take a critical  look11  at the  programmes  and  methods  of  education,  especially  their ability  to 
stimulate  critical  sense, 
interpersonal  communication, 
teamwork,  willingness  to  experiment,  skill  in finding and using  information,  learning  ability, 
entrepreneurial  spirit; 

thinking,  creativeness, 

lateral 

-  analyse the changes that apparently  need to be made to the training of trainers; 

-  extend  training,  if  need  be,  to  include  economics  and  management,  company  formation, 
protection  of  intellectual  property,  design  and  marketing,  especially  in  science  and  technical 
courses; 

-  develop  sandwich  courses  at  the 

level  of  higher  education  and  decompartmentalise 

disciplines; 

-  encourage the effective  command of several  Community  languages12: 

- 

stimulate real cooperation  between education and business; 

-  develop  long-term  partnerships  between  enterprises and training bodies; 

-  encourage broader access  for enterprises to the best vocational training facilities  in Europe. 

The  Commission  will  continue  to  implement  the  proposals  contained  in  the  White  Paper  on 
Education and Training adopted  in November  1995. 

It will  promote the exchange  of  experience  and the dissemination  of  good  practice  in these  area 
among the Member  States and with  the  social  partners by  introducing  a permanent  "training and 
innovation" forum. 

1.3.  The Commission  therefore  plans to  introduce  from  1997  an "Erasmus  of  apprenticeship" and to 
draw  up,  with  the  governments  and  the  social  partners,  a  European  apprentice  statute. 
Furthermore,  as  part of  the  follow-up  to  the  European  Year of  Life-long  Learning,  it will  draw 
up proposals13 seeking to facilitate,  at European  level, the valorisation  and accreditation  of  skills 
throughout  life. 

1.4.  Lastly,  with  the  "Learning  in  the  information  society"  initiative,  it  will  set  out  to  coordinate 
existing 
trans-European 
(education  and 
telecommunications  networks,  Structural  Funds)  to  link  schools  throughout  Europe  using 
existing  national  initiatives,  promote  the  development  of  the  software  and  content  that  are 

instruments  and  actions 

research, 

training, 

11  As in Denmark, where the Ministry of Education recently considered means of fostering an innovation 
culture  and entrepreneurial  spirit from primary  and secondary  education.  At Community  level,  the 
matter has already  been  considered  in the  White  Paper on  Education  and Training.  (COM(95)590 
final,  29/11/95) 

12  A  survey  of  927  SMEs  in  1995  as  part of  the  Euromanagement action  revealed  that the  language 
barrier  was  a  decisive  factor  for  67%  of  the  SMEs  that  were  eligible  for  Community  R&D 
programmes but were afraid to go ahead. 

13  On the basis of current evaluation of the Member States' transposition of the Council recommendation 

of June 30,  1993 (OJ L181,23/7/93) on access to continuing education. 

o u 

needed  and  to  assist  the  training  of  teams  to  provide  instruction  in  the  use  of  these  new 
technologies. 

2.  Encouraging  mobility 

1.5.  The mobility of students, research workers, engineers or scientists from  one country or  industrial 
sector  to  another,  as  from  education  or  research  to  industry,  encourages  the  transfer  of 
technology  and  the  dissemination  of  know-how.  In  spite  of  efforts  to  promote  it,  such  as  the 
programme  for  the  training  and  mobility  of  researchers, this kind  of mobility  between  research 
centres,  universities  and  industry  is  all  too  often  hampered  by  practical  or  cultural  barriers. 
Similarly,  as  technologies  are  becoming  more  and  more  "trans-sectoral",  mobility  between 
branches of industry needs to be made easier. 

The  Green  Paper  entitled  "Education-Training-Research:  Barriers  to  Transnational  Mobility", 
published at the end of  199614, points out that the barriers to mobility arise mainly  in the areas of 
right of residence, social  security, taxation  and the  lack of a legal framework  at European  level, 
including for apprentices15. 

At  Community  level,  the  Commission  will  introduce  the  priority  measures  to  encourage  the 
mobility  of students, teachers, engineers  and  researchers that  have emerged  from  the  debate  on 
this Green Paper. 

In  setting  priorities  for  the  Fifth  Framework  Programme  for  Research,  the  Commission  is 
proposing a wide programme with the main objective of enhancing human potential.  It should in 
particular  boost  the  efforts  to  arrange  for  transnational  secondments  of  young  researchers  and 
engineers to businesses, in particular  SMEs, to help with their innovation  or technology  transfer 
It  will  take  all  the  necessary  steps  to  make  the  mobility  aid  programmes  of  the 
projects. 
Community more flexible, particularly by: 

-  making exchanges of staff one of the eligible cost headings in long-term cooperation  projects 

on RTD and the use of large-scale equipment16; 

- 

linking  mobility  support  measures  and  research  projects,  enabling  their  beneficiaries  to 
combine them  in a single innovation  project; 

-  making  age  limits and  authorised  secondment  periods more flexible,  in  order  to enlarge  the 

potential pool of beneficiaries  (older researchers, SME staff). 

At national  level,  it will recommend  establishing  effective  "interoperability"  of the systems  for 
assessing  career  development  or  qualifications  (e.g.  the  introduction,  in  the  systems  for 
assessing  government  research  workers, of a positive  recognition  of periods  spent  in  industry, 
on  industrial  projects  or  for  patents  filed,  as well  as the adoption  by the  enterprises  or  bodies 
concerned of arrangements, in the event of external mobility, to ensure seamless careers). 

3.  Raising public  awareness and involving the operators concerned 

1.6. 

Innovation  can  develop  and  spread  only  if  it  is  accepted  by  society.  It  is  stimulated  by  the 
existence  of  demanding  consumers  who  accept  novelty. 
Innovation  is  not  restricted  to 
advances  in  scientific  knowledge  and  technical  performance.  Innovation  in  forms  of  social 

14  COM (96) 462. 
15  The Commission has asked a high-level group, chaired by Mrs Veil, to examine the barriers that still 
hamper the free circulation of workers and individuals.  On the basis of its findings, the grotfp will 
draw up proposals to remove the legislative, administrative and practical barriers that have been noted. 

16  Short-term scientific missions under COST are one example of short-term staff exchange. 

IL 

organisation  and  communication  need  to  go  hand-in-hand  with  technical  or  business 
innovation.  This is often  more difficult,  since it affects  the attitudes, values and positions of the 
social groups involved.  There needs to be a special effort  in this area. 

The need for and beneficial effect  of change, in the broadest sense, need to be widely discussed. 
Mechanisms  whereby  enterprises,  the  public  and  their  representatives  can  be  involved  in 
discussing the major technological  options and arrangements for the involvement of employees, 
users or consumers pave the way for the acceptance and ultimate success of innovation. 

There  are  many  initiatives  and  successes  at  national  level  in  these  fields.  The  exchange  of 
experience  between  Member  States  needs  to  be  stimulated,  and  also  where  appropriate  the 
linking  in  networks  at  European  level  of  successful  ventures,  if  this  can  help  with  their 
dissemination and  improvement. 

1.7  The Commission  will  make  a  coordinated  effort  to  use  its  various  resources  to  identify  best 
practice and disseminate the methods  facilitating  the  involvement  of socio-economic  operators 
in managing innovation projects  likely to have major  social impact. 

1.8. 

1.9. 

It  will  encourage  greater  cooperation  among  national  and  regional  bodies  responsible  for  the 
promotion  of science  and technology and  innovation  and will  disseminate  the best practice, as 
part of the INFO 2000 programme, especially via the national focal  points network (MIDAS). 

It  will  study  the  feasibility  of  greater  cooperation  among  European  television  companies, 
especially as part of the Media programme, with a view to using successful  national  experience 
as a basis for  promoting programmes  for the popularisation  of science and technology, as well 
as ways of reflecting  scientific work realistically in audio-visual fiction  productions. 

4.  Business  management 

1.10. 

Involvement  in  the  management  of  enterprises  is  not  of  course  the  responsibility  of  public 
authorities.  However,  these  authorities  can  and  must  create  an  environment  conducive  to  the 
ongoing  improvement  of  business  management  and  organisation.  The  rapid  spread  of 
information  and  communication  technologies  will  contribute  greatly  to  these  adaptations  and 
must be actively  supported. 

Innovation  is  primarily  the  responsibility  of  enterprises,  and  managing  change  is  one  of  the 
main  challenges  they  have  to  cope  with.  But  change  is  occurring  with  increasing  speed, 
affecting  markets  and  techniques  and  the  related  methods  of  design,  production  and 
organisation.  If they are going to remain competitive, enterprises need to be able to absorb new 
techniques.  But  it  is just  as  important  for  them  to modernise  their  structure  and  organisation 
and reshape the  methods, roles and  responsibilities  of each  in order to  innovate. They  have  to 
become not only places of permanent apprenticeship but also learning enterprises. 

"Agile"  enterprises  that  are  ready  to  react  speedily  to  changing  circumstances,  to  forge 
cooperative  links  with  a  wide  variety  of  external  partners  (other  enterprises,  universities, 
consultants,  centres  of  excellence)  and  thereby  to  constitute  flexible  sets  of  competence  are 
likely to be the best suited to the demands of innovation. 

Innovation  is  also  prompted  by  changes  in  the  regulatory  environment,  the  availability  of 
resources  and  forms  of  financing  and  communication.  Enterprises  need  to  keep  an  eye  on 
changes in these fields and keep a technological, economic and business "watch". 

ts 

Emulation  of  other  enterprises,  especially  by  means  of  benchmarking,  is  an  effective  way  of 
spreading good practice  in these  fields.  There needs to be more widespread  use of  management 
techniques17 at the most suitable level, especially among SMEs. 

1.11.  For  the  benefit  of  enterprises  the  Commission  will  launch  transnational  pilot  actions  for  the 
networking of certain  sectors or technologies (see section C3(iii) below).  These actions  should 
be designed to explore  best practice  in the management and training  fields.  The results of these 
projects will be disseminated  throughout the Union.  A European Guide to Industrial  Innovation 
will offer  manufacturers  a method  of  self-assessment  for  their  strengths  and  weaknesses  in the 
field of innovation, together with a guide to the relevant help and advisory services. 

1.12.  In  its  communication  on  benchmarking  the  competitiveness  of  European  industry18,  the 
Commission  pointed  to  the  usefulness  of  this  move  for  improving  the  competitiveness  of 
enterprises. 

The  Member  States  are  invited  to  encourage  the  development  of  this  practice  which  allows 
enterprises to track their progress against the best performers  in a number of key areas of their 
activity (similar to the  R&D "scoreboard"  in the United  Kingdom  or to the company  visits  as 
part of the TOP schemes  in Germany  and  Spain, the "Références"  programme  in France or the 
Inside UK Enterprise scheme in the United Kingdom). 

For  its  part,  the  Commission  will  support  the  linking  in  a  European  network  of  the  various 
schemes at national  level.  It will  introduce a Europe-wide  "benchmarking"  system,  especially 
in the field of quality. 

1.13.  The Member States are called on to reinforce their actions for the training of business managers 

and the social partners in innovation  management. 

The Commission will support training schemes for  innovation management, especially through 
the development of European networks of business schools and their cooperation  with  industry 
and SME support bodies.  These actions will be especially designed to encourage thought about 
new forms of business organisation and their impact on the support structures and SMEs. 

As  part  of  the  operations  under  Objectives  2  and  4  of  the  Community  ADAPT  and  SME 
initiatives, the Commission  will also  increase  its support for the training of business managers, 
in  particular  of  SMEs,  in  new  management  methods  and  the  training  for  employees  that  is 
needed to introduce these new methods in enterprises. 

5.  Public authorities 

(i)  Innovation in the public sector 

1.14.  Government policy-makers  are paying  more and more attention  to  innovation  and  technology. 
But their idea of what is at stake and of the potential of technology19, as well as of the details of 
action on innovation, remains generally sketchy. 

17  These methods  include quality management  concurrent engineering, flexible  or "smart" production 
methods,  integrated  logistics  management,  teamwork  and  the  empowerment  and  involvement  of 
employees. 

18  "Benchmarking the competitiveness of European industry", COM(96) 463 final, 9 October 1996. 
19  The proportion of political leaders in the countries of the European Union with a scientific or technical 
background  is  low;  recent  surveys  among  some  governments  have, confirmed  that  few  of  their 
members were skilled users of computers or the Internet. 

10 

26 

The Member  States are  invited to take  steps to ensure that politicians, senior officials,  regional 
authorities,  project  and  fund  managers  are  informed  and  made aware  of  what  is at  stake  with 
innovation and technology. 

1.15  Public  spending  is  close  to  and  even  exceeds  50%  of  gross  domestic  product  in  several 
countries of the Union.  In this context, improving performance  and spreading innovation  in the 
public  sector  and  in  government  can  have  a  significant  direct  economic  impact.  This  should 
also  contribute  greatly  to  improving  the  environment  in  which  enterprises  operate,  as 
emphasised by the Advisory Group on Competitiveness (Ciampi Group) in its second report. 

in  conjunction  with  the  European  Institute  for  Public 
From  1997  the  Commission, 
Administration  and  on  the  basis  of  current  work,  will  undertake  a  series  of  discussions  and 
exchanges of experience on the promotion  and dissemination  of innovation  in government and 
public  services.  A  conference  on  this  topic  will  be  organised  in  1997,  and  its  findings  could 
result in the publication of a green paper at the beginning of 1998. 

1.16.  The Commission  will  continue  its action  under the  "Information  Society"  initiative  designed  to 

encourage innovative approaches in the public sector. 

(ii)  Public contracts 

1.17.  More  active  competition  in  the  case  of  public  invitations  to  tender  is  desirable,  as  it  can 
stimulate  innovation.  Several  provisions  in  European  legislation  on  public  contracts  allow  for 
derogation or special rules of application, especially in the special sectors (water, energy, etc.), if 
a  tender  relates to  innovative  products  or  manufacturing  processes; full  use  should  be  made  of 
these possibilities.  Furthermore, the use of performance  standards can make it possible to arrive 
at innovative technical solutions while ensuring proper competition. 

(iii) Analysis of innovation policies and systems 

1.18.  There is a need for careful  monitoring and constant analysis of innovation processes, their results 
and  their  impact  at  the  socio-economic  level.  The  comparative  study  of  innovation  systems, 
policies and infrastructure  in the developed  nations, and especially in the European Union, needs 
to  be  continued  and  exchanges  of  information  and  experience  among  the  Member  States 
encouraged.  It is also important to boost the development, coordinated  by the Commission, of a 
harmonised  statistical  information  system  including  regular  surveys  on  innovation  in  industry, 
services and SMEs, while ensuring that there is no extra administrative burden on enterprises. 

The Commission  will  reinforce  its system  of  collecting and  analysing  information  on  research 
and  innovation.  It will draw up a permanent  management trend chart for  innovation  policy and 
performance  in  Europe,  with  comparisons  with  the  rest  of  the  world. 
It  will  produce  and 
distribute widely a regular report on innovation  in the Union, based on national and  international 
studies and analyses in this field. 

11 

2> 

1.  FOSTERING  AN INNOVATION  CULTURE 

1.1  NEW  ACTIONS 

1- Education  and  initial and  further  training 
Commission 

•  Set  up a  "training  and  innovation"  forum  to  exchange  experience  and  disseminate  best  practice 

(1997). 

Member States and  regional  authorities 

•  Make a critical examination of teaching programmes and methods and the training of instructors. 

•  Adapt  the  content  of  initial  training  to  develop,  from  the  earliest  age,  creativity,  spirit  of 

enterprise, etc. 

2- Mobility of students, research workers and  teachers 

Commission 
•  Put  forward  a  wide  programme  aiming  to  enhance  human  potential  in  the  Fifth  Framework 

Programme for Research (first  half of  1997); 

•  Stimulate  transnational  "industrial  PhDs"  (placement  of  research  workers/engineers  in  firms) 

(pilot action in  1997). 

•  Make Community aids to mobility more flexible (5th FPRD). 

Member  States 
•  Adopt measures for the temporary secondment of research workers to firms, especially SMEs. 

•  Ensure  that  the  conditions  actually  exist  for  mobility  between  research  and  enterprises 

(assessment of qualifications, career development). 

3- Innovation  and  management  of  enterprises 

Commission 
•  Promote  organisational  innovation  through  Community  instruments  at  its  disposal  (framework 

programme, Structural Funds and training programmes, etc.) (1997/98) 

• 

Introduce a benchmarking system at the European  level, (pilot project  in  1997) 

4- Public  authorities 
Commission 

•  Develop  exchanges  of  experience  on  the  promotion  and  dissemination  of  innovation  in 
government offices  and public services.  Conference  in  1997 and publication  of a green  paper in 
1998. 

•  Compile a permanent trend  chart of  innovation  performance  and  policies  in Europe (to  be put in 

place in 1997). 

Member  States 
•  Develop  initiatives to  provide  information  and  increase awareness  among  politicians  and  senior 

officials  of what is at stake with  innovation. 

12 

it 

1.  FOSTERING AN INNOVATION  CULTURE 

1.2  CURRENT  ACTIONS FOR IMPROVING  THE INNOVATION  ENVIRONMENT  IN 
EUROPE 

1- Education  and initial and further  training 
Commission 

• 

Implement  the  proposals  of  the  White  Paper  on  Education  and  Training  (especially  Erasmus 
apprenticeships, European apprenticeship statute). 

•  Pilot  projects  to  encourage  links  between  schools  ("Learning  in  the  information  society" 

initiative). 

Member State and regional authorities 

•  Develop sandwich course training, especially at university level. 

•  Encourage the effective  knowledge of several Community languages. 

2- Mobility of research workers, students and teachers 

Commission and Member States 

•  Launch a debate on the Green Paper with regard to the mobility of research workers, students and 
teachers,  and  implement  proven  routes  of  action;  examine  and  possibly  implement  the 
recommendations of the Veil Group. 

3- Raising public awareness and involving those concerned 

Commission 
•  Develop initiatives to disseminate best practice in this field. 

Member States 

•  Foster a scientific  and technical culture and awareness of the beneficial  effects  of  innovation. 

Commission and Member States 

• 

Involve  enterprises,  the  public  and  their  representatives  in  discussing  major  technological 
options. 

•  Develop measures to increase the involvement of employees, users or consumers and to  facilitate 

the acceptance of  innovation. 

4- Innovation and management of enterprises 

Member States 
• 

Increase training activities for innovation  management. 

•  Foster the development of the practice of "benchmarking" among enterprises. 

5- Public authorities 

Member States 
•  Stimulate competition  in public invitations to tender and the use of performance  standards. 

13 

Xf 

B.  ESTABLISHING A FAVOURABLE FRAMEWORK 

2.1.  The  establishment  of  an  environment  conducive  to  innovation  needs,  in  the  first  instance, 
competition  to  function  properly.  The  next  task  is  to  introduce  an  effective  system  at  an 
acceptable  cost  for  the  protection  of  intellectual  and  industrial  property.  This  also  involves 
constant efforts  to  lighten the burdens on enterprises, especially the administrative  formalities, 
while  maintaining  the  protection  enjoyed  by consumers  with  regard  to  health,  safety  and the 
environment.  Lastly,  innovators  need to  have easy access to the  funding  they  require for the 
various  stages  of  their  projects,  and  that  their  fiscal  treatment  should  be  conducive  to 
innovation. 

I. 

Legal, administrative and regulatory environment 

(i)  Competition 

2.2.  Competition  is  one  of  the  driving  forces  behind  innovation.  It  is  stimulated  by  efforts  to 
combat monopolies and to open and liberalise markets.  The Commission  has always devoted 
special  attention  to  innovation  in  its  competition  policy.  The  Commission  will  therefore 
continue  to  ensure  that  competition  functions  properly 
internal  market  and 
internationally.  It will  continue  its action  for the  liberalisation  and deregulation  of  sectors  of 
the European economy that have hitherto been protected or too strictly compartmentalised. 

in  the 

2.3  The Commission,  in  applying  competition  law,  acknowledges  the  economic  importance  of a 
properly functioning  patent system.  It guarantees holders, by means of  individual  exemptions 
as well  as exemptions  linked to technology transfer agreements, maximum  freedom  to exploit 
their patents without any unwarranted distortion of competition.  Recently20,  it adopted a new 
regulation  exempting  certain  categories  of  technology 
transfer  agreements,  thereby 
streamlining the rules that had previously governed such agreements21. 

In  the  past  the  Commission  has  adopted  similar  regulations  exempting  specialisation 
agreements22  and  research  and development  agreements23.  The  aim  is  to  avoid  an  individual 
notification system and case-by-case consideration, while ensuring legal security. 

Since these two exemptions will expire on 31 December 1997, the Commission will revise them, 
after  a green  paper  that  may  be  published,  in  order to  update  and  adapt  them  to  the  current 
circumstances.  The  rules  on  State  aids  in  the  field  of  research  and  development  (new 
arrangements of  February  1996)  set  out to  ensure equal treatment  for  the various  operators  in 
this area. 

Following the debate on the revision of the regulation on the monitoring of concentrations, the 
Commission  is  putting  to  the  Member  States  a  proposal  to  expand  the  scope  of  European 
merger supervision  in order to cover a larger number of operations of Community  interest and 
to avoid  enterprises  having  to  give  simultaneous  notification  of  cooperation  agreements  to a 
large  number  of  national  authorities  that  apply  very  different  procedures,  deadlines  and 
physical  criteria.  Mergers  of  Community  interest  would  thus  be  supervised  using  uniform 
criteria by the Commission acting as sole European antitrust authority.  The Commission is also-

20  Regulation No 240/96 of 31 January 1996. (OJ L31,9/2/96) 
21  The new regulation in fact abolishes the discrepancies between the regulations on patent licensing and 
on the communication of know-how, eliminates or shifts to the appeals procedure (the period of which 
is  reduced  from  six  to  four  months)  several  clauses  which  in  these  regulations  prevented  the 
exemption of  certain categories  and provides  for new  lawful  clauses to ensure  greater contractual 
freedom for the parties. 

22  Regulation No 417/85 of 19 December 1984 (OJ L53,22/2/85) 
23  Regulation No 418/85 of 19 December 1984 (OJ L53,22/2/85) 

14 

3* 

proposing to harmonise the treatment  of structural joint enterprises.  Lastly, the Commission  is 
currently  completing  a  green  paper  on  rules  for  vertical  agreements  (exclusive  distribution 
agreements, etc.) in competition  law. 

With  regard  to new  high-technology  products,  where  markets  increasingly  overlap,  exchanges 
of  information  between  the  various  bodies  supervising  competition  are  extremely  useful.  The 
Commission  will therefore  continue  its dialogue with the competition  authorities  in.the United 
States, to allow approximation  of the  definitions  of the relevant  market,  especially  concerning 
agreements with a high technology  input. 

(ii)  Protection of intellectual and industrial  property 

•  Reviewing the overall structure 

2.4.  The overall  structure  of the  European  system  for  the  protection  of  industrial  property  is far  too 
complex.  A "Community"  solution  has  been  adopted  for  trade  marks  and  designs  (Office  for 
Harmonisation  in  the  Internal  Market  in  Alicante),  as  well  as  for  plant  breeding  (Community 
Plant  Variety  Office,  provisionally  located  in  Brussels),  where  incidentally  the  first  protection 
rights  were  recently  granted.  An  international  convention  has  been  used,  however,  for  the 
European  (or  Community)  patent.  The  Community  can  negotiate  international  agreements 
(TRIPS agreements under the GATT, for example) and it can issue regulatory texts, but there  is 
a risk that they will have no effect  on the convention for the European patent. 

In  the  European  Union  there  are  currently  three  patent  systems,  only  two  of  which  are  fully 
operational.  There  are  national  patents  and  also  European  patents,  which  are  the  result  of  the 
Munich  Convention  of  1973  and  are  administered  by  the  European  Patent  Office  in  Munich. 
The  European  patent  is  not  a  uniform  industrial  property  right  but  it  allows  protection  to  be 
acquired  in as many European  countries as the applicant wants.  The advantage of this system  is 
its great flexibility,  but there  are some  drawbacks  because of the complexity  and  cost24.  Also, 
there  is  no  provision  in  the  system  for  any  court  at  European  level  with jurisdiction  in  patent 
disputes,  which  means  that  there  is  a  possibility  that  courts  in  the  Member  States  may  make 
different  rulings. 

The  overall  structure  of  the  patent  system  should  be  completed  by  the  entry  into  force  of  the 
third system  of protection, the Community  patent,  stemming from  the  Luxembourg  Convention 
of  1975.  This convention,  which  was amended  in  1989. has still  not entered  into force  because 
of delays in ratifying  it by the twelve Member States that signed it. 

The patent  system  in Europe was set up by means of  international  conventions.  The reason  for 
this  is that  these  initiatives  were  taken  at  a  time  when  the  Community's  responsibility  in  this 
field  had  not  yet  been  established.  This  time  is  now  over,  and  the  Court  of  Justice  has  on 
numerous occasions acknowledged  the Community's  power to act with regard to patents,  if this 
helps  to  attain  an  objective  of  the  Treaty  (free  movement  of  goods  or  establishment  of 
undistorted competition). 

According  to  the  views  expressed  by  users  of  the  system,  the  European  patent  is  generally 
satisfactory,  although there are two major  changes that need to be quickly  introduced.  The first 
concerns the  patentability  of  biotechnological  inventions,  where  current  uncertainty  should  be 
remedied by the speedy adoption  of the new draft  directive submitted  by the Commission  at the 
end of  1995.  The second change involves cutting the cost of European patents, and this could be 
achieved by revising the system  of fees  charged  by the European  Patent Office  and  by adapting 

24  The total  cost  of  filing  and  maintaining  a  patent  in  eight  Member  States  is  about  USD  120 000 

(compared with USD 13 000 for the whole of the United States). 

15 

V 

the  procedures  for  translating  European  patents.  Both  of  these  ideas  are  currently  being 
considered. 

As  for  the  Community  patent,  the  question  is  whether  in  its  current  form  it  still  satisfies  the 
objectives  that  were  outlined  at that  time  or  whether  it would  be  better  to  adapt  it to  progress  in 
In  its  current  form  the  Luxembourg 
the  construction  of  Europe  and  to  the  needs  of  users. 
Convention  applies  only to the twelve  Member  States that signed  it  in  1989.  The  enlargement  of 
the  Community  that  has  since  occurred,  and  further  enlargement  in  the  future,  require  the 
Convention  to  be adapted  to the new  circumstances. 

The  Commission  will  prepare  in  1997  a  green  paper  on  the  issue  of  the  Community  patent.  It  is 
foreseen  that this text will  consider: 

*  whether  the  Luxembourg  agreement  on  the  Community  patent  should  be  converted  to  a  legal 

instrument  under  the  Treaty. 

*  whether  national  patent convention  should  be  further  harmonised  at Community  level. 
*  whether  bridges  should  be built  between  the  European  and the Community  patent  system. 
*  whether  it  is possible  to  adapt  the  system  of  taxes  and  duties  in  a  way  that  corresponds  to  the 

services  provided  and  is not a  barrier to the protection  of  innovation. 

*  Special  case  of  biotechnology  and  the  information  society 

2.5 

In  advanced  technology  sectors,  such  as  the  information  society  or  biotechnology,  there  are 
considerable  economic  imperatives  involved25.  Speed  of action  or  response  is vital.  There  is  a 
need  to  achieve  speedy  harmonisation  at  world  level  of  the  rules  of  protection  relating  to  new 
technologies  if we  want to maintain  the  ability  for  relevant  research  in Europe  and  stimulate  the 
creation  of new  enterprises  and the marketing  of  results. 

The codecision  procedure  on  the  new  draft  directive  on the  legal  protection  of  biotechnological 
inventions  needs  to be completed  as quickly  as possible.  For  its part, the Commission  will  play 
an active  part  in the consideration  which  is now  getting under way with  regard  to the revision  of 
Article 27 of the TRIPS  agreement  and  the  follow-up  to the Convention  on  Biodiversity.  It  will 
ensure,  in  these  discussions,  that  European  industry  does  not  have  to  cope  with  conditions  that 
are  less  favourable  than  its  competitors'  because  of  restrictive  approaches  to  intellectual 
property  rights. 

inventions,  products  or  processes 

Article  27(1)  of  this  agreement  allows  all 
in  every 
technological  field  to  be  patented.  It  follows  that,  in  theory,  data  processing  programs  and 
software  inventions  can  be  patented.  On  this  basis  the  United  States  patent  office  has  decided 
in some cases to  issue  patents  for  data processing  programs  for  which  copyright,  which  is  usual, 
seemed  inadequate,  which  would  be  impossible  in  Europe.  This  situation  will  become  even 
more  complicated  with  the  development  of  multimedia  software  and  the  advent  of  the 
information  society. 

With  regard  to  the  patentability  of  software  and  the  repercussions  of  information  society 
technologies  on  industrial  property  rights,  the  Commission  recently  started  looking  at  the 
matter  together  with  those  concerned  with  a  view,  if  necessary,  to  supplementing 
the 
harmonisation  of  the  Member  States'  legislation.  The  Community  has  already  adopted  five 
directives  since  1991  on  copyright  and  related  rights. 
In  order  to  meet  the  new  challenges 
related  to  the  development  of  the  information  society,  the  Commission  has  published  a  Green 

25  Products  that  have  been  on the market  for  two years  or  less account  for  78% of  income  in  the  data 
processing industry.  The biotechnology market, valued at less than ECU  10 billion  in  1996, should be 
close to  ECU  80 billion  by the year 2000 (" Inventing tomorrow:  Europe's  research  at the  service of 
its people"). 

16 

37 

Paper  on  Copyright  and  Related  Rights  in  the  Information  Society,  which  prompted  wide-
ranging discussion  among those involved.  The Commission  has just adopted a Communication 
to the  Council  and  to  the  European  Parliament  concerning  the  follow  up  of the  Green  Paper; 
this  one  identifies  four  priority  issues  for  which  legislative  proposals  will  be  submitted  soon 
(rights of reproduction,  right  of comunication to the public, legal  protection  of the  integrity  of 
technical  systems and  rights of distribution.  In addition, it is proper to give special  attention  to 
the  questions  linked  to  the  application  of  the  rules  of  responsibility  within  the  global 
environment of the Information  society. 

•  Other harmonisation  methods 

2.6. 

In view of the major  economic importance of designs and models and of the differences  among 
the  Member  States  with  regard  to design  protection,  the  Commission  will  continue  its  efforts 
with  a  view  to  harmonising  national  laws26  and  to  create  a  body  of  Community  law  in  that 
field27.  In the field of employees'  inventions it will  launch a study on the need for and possible 
content  of  harmonised  national  laws  and  will  start  a  discussion  of  this  topic  with  those 
concerned.  Lastly, in the  light of comments on its green paper on Utility Models it will make a 
decision on the advisability of draft  Community  legislation in this field. 

2.7.  As the Commission  has pointed out in its Confidence  Pact for Employment, the potential of the 
internal  market  will  not  be  attained  unless  the  relevant  directives  are transposed  into  national 
In  particular,  in  the  key  area  of  intellectual  property  the 
legislation  and  actually  applied. 
situation  gives rise to concern, since only one directive has been transposed  by all the Member 
States.  The  Commission  asks  the  Member  States  in question  to  assume  their  responsibilities 
and to submit to their respective parliaments the required draft  legislation by the end of  199628. 

• 

Reducing  costs 

2.8. 

In the field of patents, there are supplementary  proposals designed  to solve the tricky  problem 
of translation, as well as alignment wiuYthe systems of rival countries with regard to eligibility 
and costs and help in combating  counterfeiting. 

The Commission supports the efforts  of the European Patent Office  to cut the costs of filing and 
maintaining  patents,  such  as the  review  of  current  requirements  concerning  translation  (along 
the  lines of the  1975  Convention  on the  Community  Patent,  which  requires  translations  only 
for  the  summary  and  in  the  event  of  protection  being  invoked)  and  will  study  whether  to 
introduce  incentive  measures  for  SMEs,  individual  inventors  and  universities  ("small  entity 
fee"). 

With  a view  to  a  better  allocation  of  the  resources  relating  to  fees  for  European  patents,  the 
member  States  are  called  on  to  examine  the  current  system  of  apportioning  the  fees  for 
maintaining  European  patents (half of which  at present are paid to the European  Patent  Office 
while  the  other  half  are  retained  by  the  contracting  States),  in  the  light  of  the  following 
questions: (1)  is  it  appropriate  that  taxes  to  maintain  the  validity  of  European  patents  should 
finance  part of the national patent systems? (2)should the present distribution  ratio be kept as it 
stands or should  it be modified? (3) within the framework  of promoting  innovation, doesn't this 
system  entail  negative  effects,  in  particular  when  a  large  part  of  these  resources  is  directly 
allocated to the general budget of the State and not to tasks directly related to innovation? 

26  Modified  directive  proposal  of  the  European  Parliament  and  of  the  Council  relative  to  the  legal 

protection of designs. OJ n° CI42 of 14 May 1996, page 7. 

27  Regulation  proposal  of  the  European  Parliament  and  of  the  Council  on  community  designs  and 

models. COM(93)342 final. OJ N°C29 

28  Action for Employment in Europe: A Confidence Pact, CSE (96) 1 final, 05.06.1996. 

17 

1} 

•  Promoting  protection 

2.9.  Actions  to  make  enterprises  aware  of  the  range  of  possibilities  provided  by  the  system  for 
protection  and training  are needed. The Commission,  in the Fifth  Framework  Programme, will 
reinforce  its activities in this field, especially: 
•  exchanging  best  practice  among the  Member  States  (especially  the  national  patent  offices) 
and with the EPO concerning the dissemination of "patent" information,  and especially ways 
of making it accessible and comprehensible to SMEs; 

•  checking the novelty of research  proposals29, and the introduction  of an  information  service 

for those involved  in the framework  programme (" IPR-Help Line"). 

2.10.  The Member States are also invited to develop, with full  regard for the international  dimension, 

their training activities on protection30. 

•  Combating  counterfeiting 

2.11.  Counterfeiting  imposes  a  significant  cost31.  It therefore  constitutes  a  special  threat  to  SMEs, 

which are often  reluctant to take legal action, especially in a third country. 

The Member  States are  invited to set up a support  system  for  for  SMEs and  universities  in the 
event  of  disputes  and,  where  appropriate,  loan  procedures  designed  to  finance  the  cost  of  a 
patent  and  the  introduction  of  insurance  schemes  to  protect  enterprises,  especially  SMEs, 
against infringements  of their intellectual and industrial property rights. 

The  Commission  has  ordered  a  study  on  the  potential  role  of  the  Community,  by  way  of 
supplementing  national  action,  in  combating  counterfeiting  and  will  start  consultation  on  the 
basis of the results. 

(iii) Administrative  simplification 

2.12.  "Administrative and  regulatory constraints cost  far too much  in Europe.  Some studies  suggest 
the cost comes to more than ECU  100 billion a year32, particularly disadvantaging SMEs.  Both 
the  Community's  approach  and  the  work  of  national  authorities  in  this  area  need  to  be 
reviewed."33 

A step  in this direction  has  been  taken  with  the establishment  of the  Molitor  Group34  and  the 
creation by the Commission, as part of its integrated  programme for  SMEs and craft  industries, 
of the  Committee on  the  Improvement  and  Simplification of the Business  Environment.  This 
committee  provides  the  framework  for  the  exchange  of best  practice  in this area  between  the 
Member States and the Community.  The Commission will put a proposal to the committee  for 
a special programme on  innovation. 

29  The QUICK SCAN system pilot project under the Innovation programme, and in conjunction with the 
EPO, shows that the costs involved come to less than 0.5% of the total costs of the project, and that it 
affects  some 5% of the projects, which have to be redefined, reorganised  or rejected  for the lack of 
novelty. 

30  Like Germany, which created  100 teaching posts in higher technical education during the first half of 

1996. 

31  In 1994 industry in Europe spent about ECU 2 billion on legal or out-of-court proceedings to protect 

patents. 

32  A survey of 8 000 SMEs by the French Ministry of Industry in  1995-1996 revealed that the average 
annual cost of  completing  official  forms  was equivalent to one person  working  full-time  for  three 
months. 

33  Action for Employment in Europe: A Confidence Pact, CSE (96) 1 final, p.8. 

18 

Ih 

•  Business  start-ups 

The formalities  relating to business start-ups, together with all the other compulsory procedures, 
are  generally  more  complicated  and  take  longer  for  European  enterprises  than  for  their 
competitors  elsewhere.  This  has  an  effect  on  their  dynamism,  especially  with  regard  to 
competitiveness. 

The studies and  investigations  that  have  been  conducted  have shown  that  some  Member  States 
had already started a sustained effort  towards administrative simplification.  In some countries of 
the  European  Union,  the  formalities  for  starting  up an  enterprise  have  thus  been  reduced  to  a 
single form  at a one stop shop .  Other countries that have not adopted  measures of this kind are 
called  on to follow  this example  and  to  simplify  the formalities  for  setting  up new  enterprises. 
(Measures  for  stimulating  business  start-ups  are also  referred  to  in points  B2  (i)  Financing  and 
C3 (iii) Start-up of technology-based  companies.) 

•  Analysis  of the impact of rules on  innovation 

2.13.  In the area of the internal market, the Commission  recently  launched a pilot project  designed  to 
simplify  legislation  in four test sectors: the  SLIM initiative (Simpler Legislation  for the  Internal 
Market),  a  testing  ground  for  more  ambitious  actions.  If  the  pilot  project  is  a  success,  the 
Commission  will  take  account,  when  new  sectors  are  being  considered  as  part  of  the  SLIM 
initiative, of the  possible  impact  of  the  legislation  on  innovation  and  will  ask  the  SLIM  teams 
involved to attach the required  importance to this aspect during their work. 

As has been done in some Member States, the Commission will test an ex-ante mechanism  for 
assessing  the  impact  of  regulations  on  innovation35  as  part  of  the  general  guidelines  for 
legislative policy36. 

A much  more uniform  application  of  Community  rules by national  administrations  also  needs 
to  be  encouraged.  This  requires  greater  cooperation  among  the  relevant  authorities  in  the 
Member  States,  in  line  with  the  Council  Resolution  of  8 July  199637.  The  Commission  will 
develop  its  support  actions,  especially  with  regard  to  the  exchanging  and  joint  training  of 
national officials,  similar to the Mattheus and Karolus programmes. 

•  One stop shops to support  innovation 

2.14  The readiness  of public authorities  and  private  operators to provide  support  services  to  SMEs 
has  often  resulted  in  a  variety  of  advice,  information  and  assistance  services  at  national  or 
regional level, the relevance and intelligibility of which are no longer obvious to the recipients. 

34  Comments of the Commission  on the  report  of the  Independent  Experts  Group on  Legislative and 

Administrative Simplification, SEC(95) 2121 final, 29 November. 

35  Similar to the German Federal Ministry of Economic Affairs, which indicated in a report entitled "The 
future  of the German  industrial site", adopted  in  1993, that "the German  Government  will ensure 
that  existing  or  planned  legislative  and  administrative  provisions  will  be  examined  to  see 
whether they  represent  an  obstacle to  innovation  and  to avoid, in the  future,  other  provisions 
with the same effect**.  A working party on the  "deregulation  of  research  and  innovation" was 
formed  18 months ago within the Ministry of Research, Technology and Education.  It reviews laws 
and regulations, etc., from the angle of research and innovation.  It is advised by external experts  from 
many  disciplines.  The  comments  are  sent  to  the  relevant  ministry,  which  is  required  to  reply. 
Experience so far has shown that 70-80% of complaints are unfounded  or can be easily resolved by 
properly applying existing rules.  Another important problem that was identified  is the multiplication 
of legal texts on the same subject but starting from different  angles.  The question  is here is one of 
coordination. 
36  SEC (95) 2255/7 
37  OJ C224, 1/8/96 

19 

The Member  States where there  has  been  no  initiative  along these  lines are  invited  to  provide 
SMEs  with  networks  of  one  stop  shops  operating  at  local  or  regional  level  which  can  be 
contacted  by  enterprises  and  others  involved  in  innovation  for  information  on  innovation 
support  questions  and  to  make  the  best  possible  use  of  the  opportunities  offered  by  new 
information  and communication technologies  in these fields. 

At Community  level the Commission  will disseminate  good practice  in this field and  implement 
greater coordination  among the various networks for research and innovation  support that are its 
responsibility.  It will also ensure  better contact  between these networks and the national  bodies 
performing  the  same  functions  in the  Member  States,  in order  to draw  on  existing  bodies  with 
acknowledged  expertise.  It  will  promote  the  EuroInfoCentres  as  the  initial  contact  points  for 
SMEs that do not yet have links with other networks38. 

(iv) Company law 

Initiatives are needed concerning the European company statute, the promotion of EEIGs and the 
joint undertaking or private company statutes. 

*  European company  statute 

2.15. The adoption of the European company  statute would make it possible to  lift  certain obstacles to 
innovation  that  stem  from  the  application  of  fifteen  different  legal  systems  and  would  help  to 
attract the private  capital  that  is needed  for  major  innovation  projects39.  Enterprises  in  Europe 
would benefit from  a legal framework  adapted to the internal market and world  competition. 

In November  1995 the Commission  initiated  a wide-ranging consultation  of the  institutions and 
social  partners at Community  level  concerning  the Communication  of  14 November  199540 on 
informing and consulting workers. 

The primary aim of this Communication  is to make the Community framework  in this area more 
consistent  and  complete  and to  facilitate  the  adoption  of the European  Company  Statute  which 
has been  with  the  Council  for  many  years, and  consequently  some other  proposals  for  statutes 
such  as  those  relating  to  the  European  cooperative  society,  the  European  association  and  the 
European mutual society, as well as the proposal for the tenth directive on cross-border mergers. 

The Commission  has set up a group of high-level  experts responsible  for  presenting  proposals 
which could resolve the impasse affecting  these particular matters. 

•  Other types of  company 

2.16.  The  European  Economic  Interest  Grouping  (EEIG)  is  an  instrument  for  cooperation  among 

enterprises which has already proved its worth for  launching and managing innovative projects. 

The Commission will encourage better dissemination of information  on EEIGs. 

2.17*  In the search for a structure that will make genuine  legal integration a possibility, in addition to 
the  cooperation  permitted  by  EEIGs,  the  Commission  is examining  the  feasibility  of  a  joint 
undertaking  statute  based  on Article  130N of the Treaty, which  provides  for  the  possibility  of 

38  Proposal  for  a Council  decision  on  a Third  Multiannual  Programme  for  Small  and  Medium-sized 

Enterprises (SMEs) in the European Union (1997-2000), COM(96) 98 final, 20 March 1996. 

39  The Ciampi Group estimated mat the lack of such a framework involves enterprises in an extra cost of 
ECU 30 billion every year.  At the conclusion of the Florence Summit the European Council asked 
for negotiations to be speeded up with a view to its speedy adoption. 

40  COM(95)547 final, 26/11/95 

20 

the  Community's  setting  up  "joint  undertakings  or  any  other  structure  necessary  for  the 
efficient  execution  of  Community  research,  technological  development  and  demonstration 
programmes". 

2.18»  It also seems useful  to encourage the creation  at national  level of a simplified  private  company 
statute.  A flexible  legal  instrument  of this kind  would  help the  formation  of small  enterprises 
and companies with  private  share ownership, which  are often  innovative, without affecting  the 
safeguards  which  company  law  must  continue  to  provide  for  companies  with  wide  share 
ownership. 

(v)  Standards 

2.19.  The  creation  of  an  environment  for  standards  that  is  conducive  to  innovation  instead  of 
hampering it requires the promotion of performance  standards and voluntary agreements, better 
links  between  the  formulation  of  standards  and  scientific  and  technical  development 
(perinormative  research),  together  with  greater  awareness  among  those  who  devise  and  use 
standards, especially SMEs. 

The  Member  States  (and,  in  their  areas  of  responsibility,  the  European  standardisation 
committees)  are 
the  adoption  of  voluntary  standards  between 
manufacturers  and  suppliers  and,  whenever  possible  in the technical  rules  and  standards  they 
issue and for public contracts, opt for  performance  standards, thereby ensuring greater  freedom 
for designers of new products and stimulating competition among suppliers. 

to  encourage 

invited 

They  are  also  invited  to  increase  their  actions  for  informing  and  raising  the  awareness  of 
enterprises, and also of industrial designers and research laboratories working on standards, and 
to promote the involvement of industry and SMEs in standardisation bodies and committees. 

The  Commission  intends  in  its  Fifth  Framework  Programme  to  devote  more  attention  to  the 
links  between  research  projects  for  the  development  of  new  technologies  and  standardisation 
activities  (especially  prestandards),  as  well  as  to  the  application  of  scientific  knowledge  to 
measuring performance  (standardisation-oriented  research and metrology).  The Joint  Research 
Centre (JRC) will have a special role to play in this latter area. 

The  Commission  will  catalyse  initiatives  of  market  players  for  the  deployment  of  new 
standards applications through experimentation, validation and demonstration (pilot) projects. 

the 
The  Commission  will  promote  cross  fertilisation  between  sectors  by  stimulating 
assimilation  of  standardised  products,  services  and  best  practices  from  highly  innovative 
sectors into more classical  industrial sectors. 

2.  Financial environment 

(i)  Financing 

2.20.  The  question  of  financing  is  one  of  the  major  priorities  that  emerged  from  the  discussion 
prompted  by the Green  Paper on Innovation.  In this field a lot depends on private  initiative  or 
on the national or regional dimension.  The aims to be pursued include: 
•  developing  a  trans-European  capital  market  for  innovative  enterprises,  serving  as  the 
counterpart  of  the  NASDAQ  in  the  United  States,  as  well  as  encouraging  additional 
initiatives at national  level; 

21 

•>> 

•  encouraging investment  in equity finance,  in particular through venture capital, especially  for 
new enterprises (start-up) and high-growth  innovative enterprises which are a major source of 
new jobs41; 
improving  the  interfaces  between  those  involved  in  innovation  (including  participants  in 
Community research programmes) and the world of finance42. 

• 

For its part, the Commission  has to ensure that the right framework  conditions are  in place,  i.e. 
especially  the  effective  introduction  of  the  single  market  and  compliance  with  the  rules  of 
competition.  It also plans to work on ensuring that best practice  is disseminated  and  facilitating 
their  adoption,  primarily  through  support  for  pilot  actions  but  also  by  making  full  use  of  the 
Structural  Funds  and  other  existing  instruments  such  as  the  EIB  or  the  European  Investment 
Fund. 

2.21  •  Development of capital markets for  high growth enterprises 

The  Commission  will  see  to  it  that  the  framework  conditions  are  put  in  place  for  the 
development and proper operation  in Europe of stock markets for "growth enterprises". 

In  particular,  the  Member  States  need  to  complete  the  transposition  into  national  law  of  the 
directives  on  financial  services  and  information  on  enterprises,  cooperation  among  national 
supervisory  bodies  needs  to  be  increased,  and the  remaining  legislative  or regulatory  obstacles 
need to  be  removed.  There  is also  a  need  to  create  an  environment  conducive  to their  proper 
operation in terms  of: 

- 

informing  enterprises, and preparing applicants (the multiannual  programme for  SMEs 
provides for the part use of the Euromanagement initiative); 

-  practices for dissemination of information  on enterprises; 
- 
-  electronic communication  systems, etc. 

training of required specialists (analysts); 

A study which is being conducted  as part of the Innovation programme will allow to specify  the 
actions to be undertaken. 

•  Investing in equity for  innovation 

2.22.  The  Commission  will  disseminate  existing  best  practice  to  direct  long  term  savings  (pension 
investment 
life  insurance,  save-as-you-earn  schemes,  "business  angels")  towards 

funds, 
involving risk. 

2.23.  It will endeavour to  consolidate  the development  of venture capital  in  Europe  by  encouraging 
the  establishment  of  a  favourable  fiscal  and  regulatory  framework  in  the  Union  and  by 
favouring the establishment  and use by the profession  of performance  statistics which could be 
evaluated  in an objective  and  comparable  manner at international  level, especially with a view 
to facilitating the raising of new capital among institutional investors. 

41  In 1994 ECU 310 million was invested by venture capital in Europe in start-up projects, representing 
5.7% of the value of all such investment that year.  In the United States the corresponding figure was 
37%.  The proportion of venture capital invested in technology-based projects in Europe in 1993 was 
17% in terms of value.  In the United States the figure was about 80%. 

42  In  order  to  encourage  investment  in  high-technology  projects,  EUREKA  prompted  in  1995  the 
"Interlaken Declaration", which was signed by banks in many EUREKA countries as well as by the 
EIB.  This declaration represents an indication of goodwill with the aim of examining, in a favourable 
light  but  without  any  guarantee  of  acceptance,  applications  for risk, investment  from  EUREKA 
projects. 

22 

3* 

2.24.  Also, as indicated  in the Confidence  Pact for  Employment, the Commission  plans to  strengthen 
cooperation  between  the  EIB and the  Structural  Funds in order to develop financial  instruments 
for the benefit  of innovative enterprises and projects  in the least favoured  regions. 

2.25.  In  collaboration  with  the  EIF,  the  Commission  will  study  the  possibility  of  introducing 
mechanisms  to  support  venture  capital  investment  which  have  already  proved  successful,  in 
particular  in the United  States (loans  based  on the amount of funds  raised), and whose  leverage 
effect  on investors' anticipated  returns minimises the impact of their fiscal  treatment. 

2.26.  The Commission  will  endeavour  to  strengthen  the  actions of the  European  Investment  Fund  in 
favour  of  innovation  by  introducing  a  pilot  mechanism  to  encourage  venture  capital  funds  in 
which  the  EIF  will  have  holdings  to  invest43  in  the  early  stages  of  investment  and  innovative 
projects. 

•  Developing interfaces  between investors and innovators 

2.27.  Using  existing  bodies,  the  Commission  will  develop  the  exchange  of  experience  and  the 
dissemination  of best  practice  between  public  or  private  national  and  regional  operators44.  As 
part of the  Innovation  programme,  it will  provide  support  for  transnational  cooperation  for  the 
joint testing of new methods (e.g. technology rating, use of patents as guarantee, etc.). 

2.28  The Commission  will endeavour to  improve access to private finance  (venture capital) for those 
involved in Community research programmes (and Eureka).  This could  involve the setting up of 
an  "Innovation  Financing  Help-Desk"  designed  to  inform  potential  investors  about  current 
projects  and  their  potential  (e.g.  access  to  Eurotech  Data)  and  to  help  the  enterprises  and 
researchers  in question  to have easier  access to private capital, especially  at national  level (e.g. 
information  on sources and terms of access to venture capital, investors' expectations, etc.). 

(ii)  Statutory deductions 

2.29.  The  Commission  has  already  issued  a  number  of  recommendations  and  communications  in 
fields affecting  the fiscal  treatment of innovation.  Two examples are the communication on the 
fiscal  environment  of  small  and  medium-sized  enterprises  (SMEs)  and  the  recommendation 
concerning the taxation of SMEs45. 

The  Commission  has  previously  stressed  the  need  for  a  global  approach  to  the  question  of 
statutory  deductions  (direct  taxes,  indirect  taxes,  social  security  contributions)  in  the  wider 
context of Community policies. 

The European  Council  in Florence46 asked  the Council  for a report on the  development  of tax 
systems within the Union  that took  into account the need to create a fiscal  environment  which 
stimulates  enterprises  and  the  creation  of  jobs.  This  work  will  include  possible  actions  to 
improve the fiscal environment  of  enterprises,  which  would  also  help  innovation.  There  is a 
need,  for  example,  to  review  the  fiscal  treatment  of  cross-border  payments,  interest  and 
charges, since the Council has not been able to reach agreement on a Community solution. 

Given that intangible investment has a strong work content (research, training), it is much more 
affected  than  tangible  investment  by  the  steady  rise  in  labour-related  tax  and  social  security 

43  Since June 1996, the statute of the FEI allows it to take such participations 
44  The first topics may be the stimulation  (of networks) of Business Angels and their  involvement in 
innovation,  securitisation,  hybrid financing (public-private)  or  the  assessment  of  technical  risk by 
financial  institutions. 

45  94/390/EC,dd 25/05/94, OJL177dd 09/07/94. 
46  See conclusions of the Presidency, Florence 21 and 22 Juin 1996, SN/300/96 

23 

3 

contributions.  This  structural  trend,  which  has  been  detrimental  to  employment,  ought  to  be 
reversed,  as  was  pointed  out  in  the  White  Paper  entitled  "Growth,  Competitiveness, 
Employment". 

In  1997 the Commission  will  consider  a communication  on taxation  and  innovation  which  will 
take  into account the effects  of the trend  in the structure of statutory deductions  and  which  will 
propose to the Member  States a number of "good practices" in this area, based on an analysis of 
national circumstances in the light of work under way in the Member States and the OECD. 

230.  The  Commission  will  analyse  means  of  promoting  a  fiscal  and  accounting  treatment  of 

intangible investment, especially in training47, that is conducive to competitiveness. 

47  The White Paper on Education and Training recommends equal treatment for tangible investment and 

investment in training. 

24 

to? 

2.  ESTABLISHING  A FRAMEWORK  CONDUCIVE TO INNOVATION 

2.1  NEW  ACTIONS 

1- Protection of intellectual and industrial  property 

Commission and Member States 

•  Launch of a Green Paper on the issue of the Community patent (September  1997) 

Commission 

•  Set  up  a  service  of  assistance  on  intellectual  property  (IPR-Helpline)  for  Community  research 

(1997) 

Member States 

Set up instruments to inform  and help SMEs and universities in the event of disputes. 

2- Administrative  simplification 

Commission 

• 

• 

Introduce  a  pilot  mechanism  for  the  ex-ante  assessment  of  the  impact  of  regulations  on 
innovation (end  1997). 

Implement  operational  procedures  for  coordinating  Community  innovation  support  networks 
(1997) 

Member States 

•  Set objectives and a precise timetable for simplifying  business start-up  formalities. 

Member States and local authorities 

•  Speed up the rationalisation of innovation support activities and bodies. 

3- Financing 

Commission 

•  Reinforce  EIF action  in favour  of innovation  and cooperation between the EIB and the  Structural 

Funds (beginning of  1997). 

• 

Improve  the  links  between  Community  research  and  risk  capital,  particularly  through  the 
provision  of  information  and  guidance  services  for  those  taking  part  in  the  framework 
programme and for investors (mid-1997). 

•  Develop  the  exchange  of  experience  and  the  dissemination  of  best  practice  between  Member 

states and operators (1997 and 1998). 

Member States 

• 

Introduce the framework  conditions for stock exchanges for growth enterprises. 

•  Make greater efforts  to direct "patient" capital towards risk investment. 

4- Taxation 

Commission 

•  Consider a communication on "taxation and innovation" (possibly in 1997). 

Member States 

-  Promote fiscal and accounting treatment more favourable to intangible investment. 

25 

h 

2.  ESTABLISHING  A FRAMEWORK  CONDUCIVE TO  INNOVATION 
2.2  CURRENT  ACTIONS  FOR  IMPROVING  THE INNOVATION  ENVIRONMENT  IN 

1- Competition 

EUROPE 

Commission 
•  FoIlowTup  to  the  Green  Paper  on  merger  monitoring,  extending  the  field  of  application  of  unified 

European monitoring of mergers and harmonising the treatment of joint structural enterprises. 

•  Publish a green paper on the application of the rules of competition to vertical agreements. 
•  Continue  the  dialogue  with  the  competition  authorities  in  the  United  States,  to  allow  the  bringing 
together  of  the  definitions  of  relevant  market  particularly  in  agreements  with  a  high  technology 
content. 

2- Protection of intellectual  and industrial  property 

Commission  and Member  States 
•  Complete the harmonisation of legislations to take account of developments  linked to the technologies 
of  the  information  society  and  supplement  legislations  on  design  protection  and  employees' 
inventions. 

Commission 
•  Strengthen anti-counterfeit measures. 

Member States 
•  Ensure the adoption of the proposal for a directive on biotechnological  inventions. 
•  Support the efforts of the European Patent Office  to reduce filing costs. 
•  Transpose the European directives on the protection of intellectual  property into national  legislation by 

the end of  1996. 

•  Develop training in this field. 
•  Make enterprises aware of the competitive benefits of protection. 

3- Administrative  simplification 

Commission 
• 

Introduce  into  the  work  of  the  Committee  for  the  improvement  and  simplification  of  the  business 
environment a special action on innovation. 

•  Accord the required  importance  to  innovation  when  simplifying  administration  (e.g.  in the choice  of 

sector under the SLIM project). 

Member States 
•  Provide enterprises with one-stop shops for innovation questions. 

4- I^gal and regulatory  environment 

Company law 

Council 
•  Speedy adoption of a European Company Statute. 

Commission 
•  Continue  to  encourage  the  use  of  European  Economic  Interest  Groupings,  especially  by  providing 

better information. 

•  Study the feasibility of creating a joint undertaking statute (Article  130N of the Treaty). 

26 

h\ 

C-  GEARING  RESEARCH  TO  INNOVATION 

3.1.  European  firms  have  more  difficulty  than  their competitors  in turning  the  fruits  of  research  into 
innovative  products.  The  wide  variety  of  situations  in  Europe  means  that this  is  not always  true 
to the  same extent,  of  course,  but a number of  indicators  show  that the  efforts  made  so  far have 
been  inadequate48. 

3.2.  Decision-makers  and  taxpayers  regard  an  increase  in  research  input  as justifiable  in a period  of 
cuts  in  public  expenditure49  and  when  businesses  are  striving  to  become  competitive,  if  its 
advantages  and spin-offs  for  society  (health  research,  environmental  protection,  energy  savings, 
etc.) and for new products, processes or services are clearly  perceived. 

Of  course,  research  has  the  further  objective  of  pushing  back  the  boundaries  of  knowledge 
without  necessarily  bringing  immediate  practical  benefits  for  industrial  applications.  Both  basic 
and  longer-term  research  are  preparations  for  the  future,  but such  work  may  also  produce  spin 
offs 
industrial  applications.  It  therefore  deserves  to  be  pursued, 
particularly  at national  level,  where  most  money  is  spent  on  it,  but  also  at Community  level  in 
certain cases. 

in  terms  of  immediate 

In  knowledge-based  economies,  the  efficient  systems  are  those  which  combine  the  ability  to 
produce  knowledge,  the  mechanisms  for  disseminating  it as widely  as  possible  and the  aptitude 
of  the  individuals,  companies  and  organisations  concerned  to  absorb  and  use  it.  The  crucial 
factor  for  innovation  is  thus  the  link  between  research  (the  production  of  knowledge),  training, 
mobility,  interaction  (the  dissemination  of  knowledge)  and  the  ability  of  firms,  particularly 
SMEs, to absorb new technologies  and  know-how. 

48  The document "The Competitiveness of European Industry" (COM(96) 463/3)  is clear in its diagnosis: 
"Research  and  development  represents  another  significant  form  of  intangible  investment  for  which 
European performance  is insufficient.  In spite of maintaining an advanced science base, total European 
spending on R&D at  1.9% of GDP is up to one-third lower than that of the  United States (2.5%) and 
Japan (3.0%). Research undertaken and financed by  industry  itself  is an area for which the European 
lag with the United States and Japan remains particularly large (1% of GDP compared with  1.6% and 
2.2% respectively). 

Europe  has  not  been  using  its  advanced  base  in  science  and technology  to  the  best  advantage  and 
indeed  the  European  research  base  does  appear  to  be  less  market-oriented  than  that  of  its  major 
competitors.  Product development  makes up less than half of R&D spending  in Germany and France 
compared  with  over  60%  in  the  United  States  and  Japan.  In  addition,  fewer  human  resources  are 
devoted to R&D. Scientific  research personnel represent only 0.47% of the labour force,  compared to 
0.74% in the United States and 0.80% in Japan. 

Between  1984 and 1993, the European Union lost share in patents, the principal method of protecting 
intellectual  property,  for all  sectors  except  aerospace  and transport  equipment.  In terms  of  the total 
number of  patents,  however,  these  two  sectors  remain  quite  minor.  In  chemicals,  the  loss  in share 
remained limited. The most significant  loss took place in electronics, a sector in which R&D is highly 
intensive  and  which  exerts  considerable  influence  on  innovation  in  the  rest  of  industry  through 
technology embedded in investment goods". 

49  At the conclusion of its meeting in Florence the European Council asked Member States to strengthen 
their  efforts  to  re-balance  their  budgets  in  the  light  of  the  general  principles  already  identified, 
particularly with a view to reducing expenditure rather than increasing revenue, to  restructure  their 
expenditure  selectively  so  as  to  promote  intangible  investment  in  human  capital  and  research 
and development, innovation and the infrastructures essential to competitiveness: SN/300/96. 

27 

** 

3.3.  This  requires  a  series  of  specific,  essentially  national  measures  which  the  Community  can 
support  by  disseminating  good  practice,  establishing  gateways  between  national  innovation 
systems and taking similar or complementary measures at Union level. 

The second series of measures  is concerned with the architecture and methods of the Framework 
Programme,  the  aim  being  to  meet  the  needs  of  industry  and  society  more  closely  and  to 
integrate the  innovation  and  SME dimensions  fully,  particularly through the development  of the 
Task Force system as a coordination  mechanism. 

Lastly,  the  Community  will  see  to  it  that  other  policies  and  instruments,  particularly  the 
Structural  Funds and international  cooperation  schemes, are properly mobilised to this end. 

I.  National  measures  with Community  support 

3.4.  There  are  huge  differences  between  national  contexts, and  all  initiatives  taken  will  need  to  be 
tailored  to the situation  in the country  concerned.  A number of general  recommendations  can 
nevertheless be applied according to the needs of each innovation system. They concern: 

(i) 

• a long-term strategic approach to research; 

(ii)  • strengthening of research by industry, in both absolute and relative terms; 

(iii)  «start-up of technology-based  companies; 

(iv)  «closer cooperation between public, university and industrial research; 

(v)  • expansion of the capacity of SMEs for absorbing new technologies and know-how; 

(vi)  •demonstration  of effective  approaches to innovation. 

(i)  A long-term strategic approach to research 

3.5.  Europe needs to develop a long-term  strategic approach to research and its applications which is 
targeted more closely at growth sectors of the market (including services) and at relevant gaps in 
national markets50.  Initiatives of the "Key Technologies", "Delphi" and "Foresight" variety may 
help direct collective effort  towards those sectors, disciplines or technologies which will be most 
crucial in the future.  Their forte  lies in their ability to foster broad-based  discussion  of potential 
technology  options,  to  generate  industry/research/public-sector/training/financing  and  other 
networks and to spark off interdisciplinary and inter-sectoral thinking. 

The Commission's role will be to: 

facilitate exchanges of experience between Member States in this sector; 

- 
-  exploit the results of these initiatives to identify  suitable pathways on a Community scale; 
-  strengthen technology watch activities at European level within the European  Science and 
Technology  Observatory  (ESTO),  set  up  by  the  Institute  for  Prospective  Technological 
Studies of the JRC as a focal  point for Member States' observatories. 

The  Commission  invites  Member  States  which  have  no  experience  in  this  area  to  consider 
pursuing  this  type  of  long-term  approach  (it  will,  if  necessary,  make  a  financial  contribution 
from  the Structural Funds). 

50  The expected growth  in the services sector has better prospects for job creation than  manufacturing 
industry,  for  example.  The  innovation  process  in mis sector  is very  different  from  that  of  more 
traditional sectors. 

28 

W 

The  Commission  will  also  set  up  a  working  party  to  examine  the  types  of  -  and  means  of 
administering - research and technology transfer  programmes best suited to the needs of firms in 
the  services  sector,  based  on  the  experience  gained  through  specific  programmes  which  are 
already aimed  directly  at services (e.g. telematics, transport)  and through  the  Leonardo  training 
projects. 

(ii)  Strengthening  research carried out by industry 

3.6.  The share of GDP devoted to research  financed  by  industry varies widely from  one country to the 
next: some are already  above the  level of our competitors, while others still have a long way to 
go.  The  total  for  Europe  is  38% below  that  of  the  USA  and  55% below  that  of  Japan.  Good 
practice, already fairly widespread  but requiring strengthening  in certain regions, includes: 

- 

- 

involving  industry  in  defining  research  programmes  and,  where  appropriate,  in  assessing 
proposals; 

increased  contract  activities  of  public  research  centres  and  universities  (some  of  their 
resources must come from  industrial contracts, obtained through competition); 

-  generalised cooperative research programmes (of the COST or EUREKA variety), requiring a 

minimum participation  from  businesses; 

- 

institutional mechanisms or suitable tax incentives. 

Member  States are requested  to draw up quantified  and ambitious objectives  aiming to  increase 
the share on the Gross Internal Product dedicated to research, to development and to  innovation, 
in particular  by encouraging  research  undertaken  by  industry  (in  particular  the one  financed  by 
enterprises  or the  one  financed  by  governments  within  the  limits  allowed  by  article  92  of  the 
Treaty). 

(iii) Start-up of technology-based  companies 

3.7 

Actions  for  encouraging  researchers  and  engineers  to  start  up  technology-based  companies, 
whether  within  universities  ("campus  companies")51,  located  in  science  parks  or  as  spin-offs 
from  large firms, need to be  intensified. 

Member  States are  invited to  step up the action  they are taking  in this area, subject  to the  rules 
governing  State  aid  and  with  emphasis  on  indirect  measures,  by  exploiting  existing  structures 
which  have  been  proved  to  work,  such  as  the  European  Community  Business  and  Innovation 
Centres (EC-BICs). 

The  Commission  meanwhile  will  begin  in  early  1997  to  organise,  as  part  of  the  Innovation 
Programme, a more thorough exchange with Member  States on the best practice  in this  domain, 
involving  leading  players  in  the  field.  This  exchange  will  concentrate  on  measures  for 
facilitating  the  spread  of  such  practice  (covering  intellectual  property  rights,  social  rights, 
financial  arrangements, etc.) and national or regional promotion schemes. 

51  Numerous  empirical  studies  have  demonstrated  the  economic  impact  of  mis  type  of  company, 
particularly  where  innovation  dissemination  is  concerned  (Storey,  1996),  and  the  added  value  of 
public support for their start-up (Mustar, 1995). 

29 

•f 

It will  support  the dissemination  of  best  practice  through  pilot  projects  involving,  for  example, 
university  technology-transfer  departments  and  the  regional  institutions  concerned  (local 
authorities, chambers of commerce etc.), risk capital companies and technology brokers. 

(iv) Closer cooperation  between public research, universities and industry 

3.8  This type of cooperation  needs to be  intensified  at  national  and  regional  level  and  geared  more 
effectively  towards  innovation,  start-up of new companies and. more  generally, the transfer  and 
dissemination of knowledge by: 

-  closer  links  between  research  with  training,  by  anticipating  the  needs  of  the  productive 

sector; 

-  opportunities  for  universities  and  researchers  to  spend  some  of  their  time  developing  a 

company; 

-  a legal  instrument enabling university staff  and public research centres to conclude exclusive 
contracts  with  industry  for  exploiting  results  (already  practised  in  several  countries),  or  by 
taking equity participation; 

-  encouraging research  and technology organisations to introduce management and  assessment 
parameters  taking  these  aspects  into  account  and  to  develop  international  benchmarking 
practices; 

-  stimulating  dialogue  between  the  producers  and  users  of  technology  (such  as  sectoral  and 

inter-sectoral forums, technology clubs, etc.). 

The Commission  will  continue to analyse the existing  barriers and the  factors  conducive  to this 
cooperation and will disseminate the results to interested circles on a wide scale. 

It  will  support  the  efforts  made  at  national,  regional  and  professional  level  to  improve  the 
management of research and technology centres to gear them up for innovation and will organise 
transnational  sectoral  or  trans-sectoral  forums  with  the  aim  of  setting  up  specific  cooperation 
schemes, and will ensure that they are professionally  organised and managed. 

The  aim  of  these  forums  will  be  to  foster  dialogue  with  industrial  and  research  circles  and 
between  representatives  of  industry  themselves  on technological  and  organisational challenges 
requiring a response  on  a European  scale  via  the  framework  programme  or other  mechanisms. 
The forums  might constitute a basis for exchanges of best practice amongst firms and sectors of 
activity.  If  the  mechanisms  enable  key  pilot  schemes  to  be  identified,  the  Commission  will 
ensure  that  the  necessary  resources  for  trying  out  these  innovative  approaches  are  made 
available. 

The Commission  will also draw on the experience of the research-industry  Task Forces in order 
to strengthen cooperation  between  players and disciplines and to concentrate and coordinate the 
efforts  made. 

(v)  Expansion of SMEs' capacity for absorbing new technologies and know-how 

3.9. 

This aim  is to  be  pursued  whatever  the  origin  of  new  knowledge,  methods  and  technologies. 
On a national scale this would involve such schemes as: 

-  enhancing  the  effectiveness  and  transparency  of  national  or  regional  innovation  support 

activities; 

30 

<W 

-  developing  the job  of  mediator  -between  research, technology  and  SMEs (interface  services 
similar  to  the  British  Business  Links,  technology  follow-up  teams  similar  to  the  French 
centres de resources technologiques,  etc.)- able to put technological  problems  in the  context 
of all SME innovation requirements (organisation, training, marketing, financing, etc.); 

-  easier access to external  expertise,  European  or world-wide,  particularly  where  organisation 
and  management  methods  are  concerned  (e.g. the knowledge  resource  centres  advocated  in 
the Ciampi report) and cooperation  between firms (clusters, networks and value chains); 

-  helping to recruit or second researchers, engineers and technicians to SMEs; promoting visits 
(particularly  transnational)  between  firms  and  other  methods  of  demonstrating  innovative 
technologies, methods and processes. 

Member States ought to extend the scope of their national measures for  fostering  the transfer  of 
technology of international  origin. 

A continued  drive  is needed  to rationalise  activities and  innovation-support  organisations  in the 
regions and Member States (see Section Bl  (iii) above), enabling them to reach critical mass and 
the necessary degree of  professionalism. 

The Commission  will  continue  to  support  such  procedures  under  the  Structural  Funds  and  the 
Innovation  Programme  (regional  innovation  strategies and audits of the  regional  infrastructures 
for supporting technology transfer  and  innovation). 

The Commission  will  also  intensify  activities  for  creating  improved  links  between  the  various 
national and regional  innovation-support  systems. 

Working  with  players  in  the  field,  it  will  identify  the  skills  required  and  the  tools  needed  to 
professionalise  or, where appropriate,  certify  the new professions  which  will  need to emerge  in 
this context. 

The Commission  will  put  forward,  as  part  of the  Fifth  Framework  Programme,  a coherent  and 
reinforced  set  of  initiatives  for  encouraging  and  facilitating  the transfer,  use  and  absorption  of 
technologies, whether or not these were developed in the European Union. 

It  further  proposes  to  give  a  considerable  boost  to  the  innovation  support  measures  under  the 
Structural  Funds (see  Section  C3 (i)). Closer  and  more systematic coordination  will  ensure  that 
these initiatives are complementary. 

These initiatives may include the  following: 

support  for  technology  transfer  to  companies  or  sectors  in  less-developed  regions, 
particularly under the Structural Funds; 

support  for  the  first  use  of  new  technologies,  subject  to  subsequent  dissemination  of  the 
experience  acquired  by the  user (along  the  lines of the  FUSE  initiative  and  ESPRIT), and 
for  technology  transfer  schemes  giving  young  innovative  firms  access  to  European  or 
international markets. 

(vi) Demonstration of effective  approaches to innovation 

3.10 

The Commission,  in collaboration  with European  industry, will put forward  a new generation  of 
transnational  demonstration  projects,  many  of  them  under  the  European  Union  research 

31 

47 

programmes, 
organisational  and  social  aspects. 

illustrating  effective  approaches 

to 

innovation  and 

incorporating 

technical, 

These  transnational  projects  will  provide  a  framework  for  "live"  testing  of  transnational 
innovation  and  will  demonstrate  how  similar  innovations  are  treated  in  different  cultural  and 
national  contexts,  thus  making  it  easier  to  remove  obstacles  to  their  dissemination.  They  will 
above  all: 

• 

• 

• 

• 

• 

enable  new  methods,  partnerships  and  services  (such  as  intellectual  property  rights,  project 
management  and  innovation  financing)  to  be  tested: 

show  how  to optimise  the  social  benefits  of technical  innovation,  particularly  those  affecting 
employment  and  improvements  to  working  conditions  but  also  involving  the  adoption  of 
common  standards; 

develop  good  participative  management  practice,  so  as  to  improve  and  accelerate  industrial 
innovation; 

enable  social  groups52 able to act  as  innovation  catalysts and  multipliers  to take  part; 

encourage  inter-sectoral  apprenticeship  by  disseminating  the  results  of  pilot  innovation 
projects  between  sectors. 

The  Commission  recommends  that  industrial  research  projects  take  socio-economic  aspects  into 
account  and  will  take  steps  to  promote  their  incorporation  into  its  own  programmes,  with  the 
help of economic  and  social  science  experts. 

It  will  take  appropriate  steps  under  the  Fifth  Framework  Programme  to  support  research  and 
development  schemes  offering  short-term  and  medium-term  results  and  guaranteeing 
the 
environmental  sustainability  of  production  systems,  and  to  facilitate  the  social  acceptance  of 
new  technologies,  particularly  those  in  the  information  society  (such  as  projects  demonstrating 
the  ability  of  new  technologies  to  give  stronger  protection  to  fundamental  rights,  such  as  the 
respect of  private  life  through  the  use of  privacy-enhancing  technologies). 

2. 

Incorporating 

the  innovation  and  SME  dimensions  into  the  Framework  Programme 

3.11.  This  means  totally  re-engineering  the  Framework  Programme. 

Its  approach,  implementation 

methods  and  management  organisation  therefore  need  to be  adapted: 

(i) An  integrated  approach 

3.12. 

First,  the  Framework  Programme  approach  needs  to  be an  integrated  approach.  The  Green  Paper 
debate  has  confirmed53  that  research  and  technology  in  general  were  merely  one  aspect  of 
innovation  -  an  important  one,  of  course,  but  insufficient  on  its  own.  The  organisational, 

52  The Green  Paper "Living and  Working  in the  Information  Society" illustrates  how  important  it  is  for 
society as a whole and for wage-earners  in industry to accept change.  This last point will be enlarged 
on  in the  Green  Paper  on  work  organisation  which  is currently  being  drafted.  COM(96)  389  final, 
24/7/96 

53 

In  the  Community  innovation  survey,  the  ability  to  solve  technical  problems  was  the  least  of  the 
obstacles to innovation named by companies. 

32 

management,  market,  financial,  legal,  protection,  etc.  aspects  will  be  taken  into  account  more 
systematically.  This has a number of implications: 

• 

these  elements  will  be  incorporated  from  the  definition  phase  of  the  most  industrial 
programmes  and  the  corresponding  projects  (including  the  safeguarding  of  intellectual 
property  rights, standards and the  subsequent  assessment  of conformity  with  such  standards, 
private financing networks, long-term market analysis, design, etc.); 

•  closer links between  RTD and other policies (training, internal market. Structural  Funds, etc.) 
will  be  fostered  with  a  view  to  meeting  the  general  criteria  for  rapid  exploitation  and 
dissemination of results; 

• 

the  Task  Force  mechanism  as  a  coordination  instrument  for  designing  and  monitoring 
initiatives targeted  at  priority  societal  and  industrial  objectives,  making  for  visible,  selective 
and concentrated  effort,  will be refined  to make the selection  of topics more transparent  and 
to ensure that as many SMEs as possible from  all regions take part. 

•  Coordination of Community and national  policies should be put into practice. 

(ii)  Adapted approaches to  implementation 

3.13. 

Secondly, the ways of  implementing  programmes and projects will be adapted, primarily  with a 
view to: 

• 

determining  the overall  technological  aims and content of the work  programmes  for  specific 
programmes, taking  account of the main  factors  affecting  innovation  in their own  spheres of 
activity; 

revision  or stricter  application  of the  evaluation  criteria  for  project  proposals  to  place  more 
stress on the novelty of proposals, the quality of the exploitation  plans submitted  by the main 
contractors  within  consortia  (and  the  extent  to  which  they  match  the  business  plans  of  the 
companies  or  research  centres  concerned),  the  relevance  of  elements  needing  access  to  a 
transnational  level  (effects  of  scale,  access  for  SMEs  to  the  European  market,  etc.),  the 
expected benefits  for other Community policies (employment, cohesion, environment, etc.); 

encouraging  preparations  to  exploit  and  disseminate  results  during  the  research  stage  by 
making  available  to the  contractors  new  instruments, methods  or  good  practice  and  support 
services  for  innovation  and technology  management,  intellectual  property,  access to  sources 
of private finance,  etc.  As stated  above, close  links will be established  between  Community 
research  and  innovation  projects  and  sources  of  risk  capital  able  to  provide  finance  for 
projects  arriving  on  the  market,  in  cooperation  with  the  European  Investment  Fund  in 
particular; 

• 

redirecting  the management  and contractual  follow-up  of projects  towards  producing  results 
("deliverables")  and/or  achieving  measurable  objectives  ("milestones")  clearly  identified  by 
each  main  partner  within  a consortium.  "Project  Life-Cycle  Management  for  RTD" will  be 
developed, tested and put into practice. This model aims to achieve homogeneous criteria and 
methods  for  the  whole  of  the  Framework  Programme,  possibly  using  Total  Quality 
Management techniques. 

33 

aiming  at  maximum  user-friendliness  for  SMEs:  faster  procedures,  a  single  interface  and  a 
system of rolling calls for proposals with a two-stage submission  procedure; 

adapting  contracts  to  allow  more  flexibility  in  forming  consortia  and  enable  them  to  be 
changed  during  the  project,  e.g.  by  bringing  in  SMEs  or  transfer  organisations  at  a 
downstream  stage  to  exploit  or  transfer  the  results,  or  to  give  stronger  protection  to  the 
intellectual  property  rights  of  contractors  when  development  or  demonstration  projects  are 
involved; 

• 

• 

strengthening  the measures taken (methods and resources)  under the specific  programmes  in 
order  to  promote  the  exploitation  of  their  results  and  the  dissemination,  mainly  through 
demonstration  programmes, of the generic know-how and technologies generated by them, to 
enable a growing number of firms to benefit  from  the spin-offs  of Community RTD. 

Effective  exploitation  of  the  results  of  research  projects  will  depend  largely  on  the  action 
taken by the partners themselves from  the research phase onwards to prepare for  exploitation 
by  consortia  or,  failing  this,  for  transfer  to  other  partners  (complementary  studies  on 
technology  introduction,  training  in  new  technologies,  documentation  from  the  start  of  the 
project,  preparation  of licences, identification  of partners, etc.). Substantial funding  is needed 
for such action  if it is to work. The research  project  should therefore  be part of an  innovation 
strategy.  This  must  be  taken  into  account  in  the  selection  criteria,  throughout  the 
implementation  of the project and in the assessment of the results. 

(iii)  Coordinated  management 

3.14.  Accepting  that  large  companies  have  an  important  roie  to  play  in  the  Innovation  process,  in 
particular  through  their  collaboration  with  smaller  firms,  this  action  should  give  more  SMEs 
access to all research work and  its results, develop technology transfer  and stimulate  innovation. 
This will call for closer coordination of the various initiatives so as to ensure: 

-  better overall  consistency,  optimum  exploitation  of  synergies  between  the various  initiatives 

and increased visibility for action  in support of innovation and SMEs; 

-  an  integrated  range  of  services  designed  specifically  for  different  categories  of  SME 
(including  intellectual  property  rights,  innovation  management  methods  and  access  to  risk 
capital); 

-  more  homogeneous  implementation  of  measures  for  promoting  innovation  and  measures 
aimed  at  SMEs, and  the  provision  of  gateways  between  projects  at various  stages  (research, 
demonstration, transfer,  exploitation); 

-  greater coordination with other policies (regional, training, etc.). 

Innovation  promotion  and  more  effective  involvement  of  SMEs  will  depend  largely  on  the 
availability, strengthening and rationalisation of existing networks of locally-based  organisations 
covering  the  entire  territory  and  possessing  the  necessary  skills  for  advising  and  assisting  the 
various  players  concerned,  particularly  SMEs,  in  innovation,  preparing  projects  and  finding 
partners (see Sections Bl(iii) and Cl(v)). 

The  proposed  programme  "Innovate  and  enable  SMEs'  participation"  should  boost  and 
effectively  coordinate  efforts  to  innovate,  to  disseminate  technology  and  to  promote  greater 
participation by SMEs in research. 

34 

5~ v 

3.15.  Finally, the debate on the Green Paper on Innovation and the experience gained through the Task 
Forces  in  the  Fourth  Framework  Programme  have  demonstrated  the  usefulness  of  instruments 
which: 

• 

identify,  together  with  users,  researchers  and  industry,  the  technological  obstacles  whose 
solution is an economic and social priority in Europe; 

•  mobilise expertise  and  private  or public  resources. Community  or national, to the  maximum 
extent  in order to  bring  large-scale  targeted  projects to a successful  conclusion,  so obtaining 
faster  results  from  research  effort,  avoiding  duplication  and  increasing  the visibility  and the 
exemplary nature of Community research. 

In consequence, it would be desirable to improve at Community level: 

•  general  incentives  to  participate  in  the  work  of  Task  forces,  by  taking  innovation  more  into 

account as a selection criterion for projects within the Fifth  framework  programme; 

• 

the  efficiency  of  procedures  by  planning  simultaneous  or  integrated  calls  for  proposals  for  the 
various programmes for priority research. 

3.  Mobilising other  Community  instruments 

(i)  Gearing the Structural Funds more towards innovation 

3.16.  Not all regions have equal  innovation capacity.  Statistics show that the technology gap between 
the  developed  and  less-developed  regions  of  the  European  Union  is  twice  the  size  of  the 
"cohesion" gap, and  various  factors  threaten  to widen the gulf  still  further.  The  region  is thus 
becoming a particularly appropriate level for promoting and strengthening  innovation  in Europe. 
Moreover, the  links  between  cohesion,  research  and  innovation  can  be  managed  more easily  at 
regional level.  Three considerations support this argument: 

• 

• 

• 

innovation  policy  must  be  based  on  in-depth  knowledge  of  the  demand  from  companies, 
including  SMEs,  in  a  given  economic  system:  there  is  no  standard  model  which  could  be 
generalised  and this type of policy  should  be anchored  in a regional  context.  Regions  must 
find  their own paths to  innovation; 

the region  is the most  suitable  level  for  the necessary collaboration  between  the key  players 
in innovation; 

regional  and  local  authorities  are  best  placed  to organise, at  their  own  level,  the  innovative 
environment which  is the basis for regional  innovation capacity. 

With  the  above  points  in  mind,  and  in  addition  to  the  action  taken  to  promote  innovation 
throughout the European  Union, the Commission  has implemented  initiatives  for  strengthening 
the importance given to innovation  in the Structural Funds.  Most Commission  initiatives such as 
the SME initiative, ADAPT and LEADER II, as well as Article  10 of the ERDF, give  innovation 
high  priority.  Moreover,  innovation  is  one  of  the  priorities  of  the  new  directives  concerning 
Objective  2,  which  states  that  "innovation  is  essential  for  maintaining  competitiveness  and 
employment". 

In  the  same  vein,  the  Commission  considers  that  innovation  is  an  important  element  of  the 
priority given to employment  in the use of structural  funds.  It considers  desirable therefore  that 
Member States and the regions concerned  invest more in innovation promotion schemes, subject 

35 

5/ 

to the resources available for the current planning period and in the next generation of  Structural 
Funds54. 

The  Commission  will  draw  on  the  experience  gained  from  the  regional  innovation  strategy 
projects supported jointly under Article  10 of the ERDF and the Innovation programme. 

In the Objective  1 and 2 regions, the Commission  recommends that Member  States and  local or 
regional  authorities  concerned  to  take  fully  into  account  the  necessity  to  concentrate  the 
measures  for  innovation,  and  particularly  research,  development,  technology  transfer  and 
qualifications  for workers, in order to satisfy  the priority given to employment.  In rural areas, in 
particular  objective  5b areas,  the  Commission  will  see, within  the  framework  of  strategies  for 
employment,  to disseminate  as widely  as possible the good  practice  identified  and  validated  by 
the European Innovation  and rural development  Monitoring System within the framework  of the 
LEADER II initiative.  Under Objective 4 of the Community initiative ADAPT, efforts  will need 
to  concentrate  on  innovation  action,  particularly  on  anticipating  requirements  and  improving 
training systems, and helping SMEs to manage their human resources more  efficiently. 

(ii)  Making the most of the international  dimension of innovation 

3.17  Action  in  support  of  innovation  should  take  account  of  the  globalisation  of  technologies  and 
markets.  Flows  of  information,  knowledge  and  capital  are  accelerating  and  multiplying  on  a 
world scale.  Incorporating this dimension means taking several complementary approaches: 

•  Closer  interaction  between  the  Framework  Programme  and  the  COST  and  EUREKA 

cooperation  frameworks. 

•  Support for international  industrial cooperation and promotion of collaboration  between firms 
on the basis of bilateral  agreements, giving European firms, particularly  SMEs, better access 
to world technologies, knowledge  and  skills, taking maximum  advantage  of their  know-how 
and strengthening their profiles  on the markets of the future. 

•  Intensified  international RTD cooperation with non-member countries.  This should be in line 
with  the  political  objectives  of  the  European  Union  (e.g.  on  energy  and  environmental 
protection or the establishment  of the  information  society), adhere to the principle of  mutual 
interest and, where appropriate, be based on bilateral agreements.  In a spirit of reciprocity  it 
will  aim  to  involve  organisations  in  non-member  countries  in  Community  RTD  projects. 
Special attention  will be given to the countries of Central and Eastern  Europe on the  waiting 
list  for  accession  to  the  EU.  Another  aim  will  be  to  boost  the  attraction  of  the  European 
research  area  for  researchers  from  countries  with  which  the  European  Union  has  links. 
Lastly, specific  international  scientific  cooperation activities will be drawn up on the basis of 
topics and countries or regions such as the Mediterranean, the CIS and developing countries, 
in support of external policies and the industrial policy of the European Union. 

54  The Employment Confidence  Pact identifies  the development of SMEs as the priority  for  structural 

policy, stating that  "There should be a special effort  in favour of the formation  of SMEs  and one-
person firms. What is needed now is to make wider use of innovatory measures that have been proved 
to  work,  especially  those involving financial engineering  -  notably  access to  risk capital.  The 
development of SMEs is also helped by the research and technological innovation effort, as in the case 
of environmental  technology,  and especially  access  to new markets  linked to  environment-friendly 
products."  (Action  for  Employment  in Europe: A Confidence  Pact, CSE(96)1 final, 5 June  1996, 
page 24.) 

36 

si 

•  Stronger  encouragement  to  entities  in  the  countries  concerned,  through  the  possibilities 
offered  by  instruments  such  as TACIS,  PHARE55,  MEDA, etc. to  search  a stronger  synergy 
with community research  projects. 

•  Continued  vigilance  in  international  negotiations  over  aspects  liable  to  affect  European 
innovation and its outlets (such as intellectual property rights and anti-counterfeit  measures). 

(iii) Fleshing out the action plan in various priority sectors and fields of technology 

3.18  Some  of  the  proposals  in  this  action  plan  may  prove  to  be  suitable  to  specific  sectors  or 
technologies  and  adjustments  will  be  necessary.  The  Commission  will,  as  far  as  is  possible, 
arrange  for  effective  cross-over  learning  by  setting  up  inter-sectoral  and  inter-technology  links. 
Efforts  will  be  made  to take  more account  of  the  preoccupations  of  industry  when  policies  are 
drawn up. 

The  fields  to  be  fleshed  out  include  better  exploitation  of  space  and  dual-use  technology,  rural 
development,  consumption  and  the  audio-visual  sector  as  well  as  the  environment  and  the 
services sector.  Some examples are given below: 

a) 

Innovation  is an  important  factor  in the development  of rural economies.  Emphasis  should 
therefore  be placed on encouraging  and disseminating  innovation  in the various domains of 
rural development, above all: 

• 
• 

• 

getting SMEs in rural areas to use new technologies; 
improving  access  by  users  in  rural  and/or  peripheral  areas  to  modern  methods  of 
information  and  communication; 
extending  the  services  rendered  to  agricultural  producers  and  SMEs  in  rural  areas 
(studies, assistance with management, forecasting,  risk assessment, etc.). 

b)  Aspects of demand  are essential to  innovation. This means, in particular,  ensuring that new 
products  and  services  meet  the  needs  not  only  of  firms  but  of  the  end  user.  Innovation 
should  above  all  meet  needs  which  may  not  be  apparent  through  market  forces  alone 
(aspects  of  social  and  territorial  cohesion,  universal  and  general-interest  services,  user-
friendly  products  and  services,  illiteracy,  social  exclusion  etc.).  Considerations  of  demand 
also need to take a "sustainable consumption" approach. 

This  also  affects  consumer  protection  in  terms  of  product  quality  and  legal  environment. 
The  latter  is particularly  important to computer  products or services (Internet,  smart  cards, 
cybercash, etc.).  Legislation  on these  is still  in embryo where both  law and order and  user 
protection are concerned.  A multidisciplinary  approach to these issues needs to be  fostered 
in order to identify  the action which needs to be taken. 

c)  The audio-visual  sector  is a priority area whose evolution  has accelerated  under the  impact 
of  new  technologies.  The  Commission  will  encourage  partnerships  between  the  digital 
electronics  industry and centres of culture (broadcasters, museums and designers).  To this 
end,  wider  consultation  procedures  on  the  effects  the  new  technologies  may  have  on  the 
audio-visual sector in Europe will be launched and pilot demonstration  projects will be run. 

d)  An  important  sector  of  economic  growth  is  the  environmental  sector  (e.g.  waste  water, 
waste management, air and noise emissions) both, in terms of manufacturing  industries and 

55  For non applicant countries 

37 

f? 

services.  These  sectors  have  shown  a  significantly  higher  growth  than  the  rest  of  the 
economy.  Jobs in this sector grew vy 3% per year - about twice the rate of other sectors. 

Currently  the  environmental  sector  is  dominated  by  end-of-pipe  technology  (and  related 
services).  However,  the  future  trend  will  be towards  the  development  of  integrated  clean 
technologies,  an  area  where  innovation  is  essential  and  necessary  to  speed  up  market 
introduction and application of these technologies. 

38 

f* 

3.  GEARING RESEARCH TO INNOVATION 

3.1  NEW ACTIONS 

1.National measures and their Community back-up 

(i) 

Strengthening research carried out bv companies 

Member States 

•  formulate quantified  objectives and put in place the appropriate incentive policies. 

(ii) 

Start-Hp of technology-based companies 

Commission 

•  organise thorough exchanges with Member States and players in the field on legal, fiscal and promotional 

measures (1997). 

•  launch  pilot schemes  for  disseminating  good  practice,  involving  universities,  risk  capital,  industry  and 

regional institutions (1998). 

(iii) 

Intensified cooperation between research, universities and companies 

Member States 

•  set up a legal framework  to facilitate exploitation by research organisations, including business start-up. 

(iv)  Strengthening the ability of SMEs to absorb technologies and know-how 

Member States 
•  support transnational technology  transfer. 
Commission and member states 
•  better links between national and regional innovation systems at Community level. 

(v)  Demonstration of effective approaches to innovation 

Commission 
•  set  up a  new  generation  of  demonstration  projects  integrating  the  technical,  organisational  and  social 

aspects of innovation (5th FPRD). 

2.Incorporating the Innovation and SME dimensions into the Framework Programme for Research 

Commission 
•  adapt  the  implementation  procedures  for  the  Framework  Programme  (project  selection  criteria,  faster 

project selection, more demonstration schemes, legal framework for contracts); 

•  strengthen the consultation and coordination role of the research-industry Task Forces; 
•  develop,  a  programme  "Innovate  and  giving  SMEs  greater  involvement  and  providing  an  integrated 
approach to the goal of innovation through the legal and financial  treatment of projects, particularly those 
supporting SMEs (5th FPRD). 

3.Mobilise other Community instruments 

Commission and Member States 
•  prepare to flesh out the action plan in various priority sectors and fields of technology. 

39 

?7 

3.  GEARING  RESEARCH  TO  INNOVATION 
3.2. CURRENT  ACTIONS  FOR  IMPROVING  THE  INNOVATION  ENVIRONMENT  IN  EUROPE 

1.  National  measures  and  Community  back-up 

(») 

A strategic  vision  of research  and  development 

Member  States 
•  consultations on  long-term  technology  forecasting  (Foresight). 

Commission 
• 
• 

facilitate  the exchange of experience and the exploitation of results on a Community  scale; 
stimulate  the  technology  watch  (network  of  national  organisations  around  the  European  Science  and 
Technology  Observatory  (ESTO)). 

(ih Start-up  of technology-based  companies 

Member  States 

• 

stronger promotion  of "campus companies" and  spin-offs. 

(iii) 

Intensified  cooperation  between  research, universities and  industry 

Member  States 
•  pursue and strengthen  action  in this area. 
Commission 
•  analyse the obstacles and disseminate  good  practice; 
• 

support  national  efforts  to  improve  the  management  of  research  and  technology  organisations  and  their 
international  benchmarking; 

•  organise sectoral  and  inter-sectoral technology  platforms. 

(iv)  Strengthening  the ability of SMEs  to absorb  new technologies and  knowledge 

improve the efficiency  and transparency  of support structures. 

Member  States 
• 
Commission 
•  help professionalise  the innovation  support  services; 
• 

set  up  a  scheme  for  promoting  the  absorption  and  use  of  technologies  (first-use  support,  access  to 
technologies not developed  in the European  Union,  internationalisation  of young technology-based  firms, 
regional  projects). 

(v) Demonstration  of effective  approaches  to  innovation 

Member  States and  Commission 
•  make better use of specialists  in the social and behavioural sciences in technology  projects. 

2.  Incorporating  the  Innovation  and  SME  dimensions  into the Framework  Programme 

(see New  Actions) 

3.  Mobilise other  Community  instruments 

Commission  and  Member  States 
•  direct more of the Structural  Funds towards  innovation; 
•  make the most of the international dimension of  innovation. 

40 

r Ù 

CONCLUSION: 

In  the  three  main  fields  identified,  the  Commission  is  putting  forward  those  measures  whose 
priority, expected  impact or urgency has been confirmed  by the debate. 

At Community  level  these measures  can  be financed  from  existing  or planned  budgets  without 
additional  funding. 

The main effort  must nevertheless be made at local, regional or national  level. Action  in support 
of innovation  must be first and  foremost  the province of the Member  States and those active  in 
the field - above all companies. 

A more thorough analysis will be needed  to take account of the wide variety  of situations  in the 
Member  States.  The  Commission  proposes  to  organise  this  in  close  collaboration  with  the 
Member  States,  so  as  to  establish  a joint  reference  framework  and  so  help  them  identify  the 
priority options and the opportunities for  cooperation. 

It  requests  Member  States  to take the  necessary  steps to ensure,  on  an  internal  basis,  efficient 
coordination  of the measures deriving  from  various policies and, on an external  basis, optimum 
interaction with the other Member States and with the European Union. 

The Commission  will  draw  up  a  detailed  implementation  schedule  and  will  precisely  quantify 
the  costs  of  the  measures  it  is  proposing.  On  this  basis  it  will  submit  the  corresponding 
legislative and regulatory  proposals to the Council, the European  Parliament, the Economic  and 
Social Committee and the Committee of the Regions. 

The  Commission  will  report  regularly  to  the  European  Council  on  the  implementation  of  the 
action  plan,  including,  where necessary,  proposals  for  any adjustments  or additions  which  may 
prove necessary in the light of developments or in view of the specific contexts in which the plan 
is applied. 

The enthusiasm  and  energy  demonstrated  must  be mobilised  in order to  implement  this  Action 
Plan and so build a more innovative, competitive and job-creating Europe. 

41 

f/ 

ANNEX  2 

1. 

Reactions to the  consultation  on the  Green Paper 

2. 

Recent  developments  in  innovation  policy  in  the 
Member  States 

3. 

Statistical  tables 

anx1-en.doc 

i 

x*cv 
70 

ANNEX 2 . 1. 
Reactions  to the  consultation 

A. Summary  of the comments from those in the 

field 

B. Reaction  of the  governments 
C. Reaction  of the  institutions 

fc 

2.1-A-  Summary  of the comments  from 
those  in the field 

X 

éo 

Introduction 

Consultation  on  the  Green  Paper  nas  involved  an  unprecedented  deoate  on 
innovation  not  only  m  the  fifteen  countries  ot  the  European  Union,  Out  also  in 
Norway  and  Iceland. 

More  than  forty  thousand  copies  of  the  Green  Paper  were  distributed.  It  was 
analysed,  discussed  and  commented  upon  ov  researchers,  the  heaas  of  large 
concerns  and  SMEs,  public  authorities,  trade  unions,  professional  associations 
and  the  various  Community  institutions.  Conferences  were  held  in  17  countries 
involving  nearly  5000  persons. 

A  large  number  of  specific  proposals  were  suomitted  to  the  Commission.  Apart 
from  the  national  conferences,  whose  reports  of  proceedings  reflect  the  range 
of  reactions  and  the  expectations  aroused  bv  this  initiative,  the  Commission 
received  more  than  300  contributions  directly1,  and their  length  and  the  quality 
of  analysis  of  many  of  them  Dear  witness  to  the  interest  aroused  by  the  Green 
Paper. 

,  national  and  European  federations, 

An  initial  analysis  of  the  reports  of  proceedings  of  the  conferences  and the  most 
representative  (particuiarlv  of  the  main  professionai  associations  and  trade 
unions 
large  concerns  and  financial 
institutions)  and  relevant  contributions  is  given  here.  These  communications 
mainly  concern  the  topics  and  the  various  routes  of  action  proposed  by  the 
Green  Paper,  in  particular  as  regards  the  improved  orientation  of  research 
towards  innovation,  improvements  in  innovation  financing,  intellectual  property 
rights  and  support  for  SMEs.  In  addition,  some  of  these  contributions  propose 
topics  little  touched  on  in  the  Green  Paper,  such  as  organisational  innovation, 
innovation  in services, the  role  of  large  concerns, etc. 

This  document  gives  an  initial,  non-exhaustive  summary  of  these  comments, 
grouped  under  the  main topics  in the  Green  Paper.  The  summary  does  not  cover 
either  the  contributions  of  the  Eurooean  institutions  or  the  officiai  contributions 
of  the  Member  States,  which  are  descnbea  in  Chapters  2  and  3  of  this  annex 
respectively. 

The list of individual  reactions to the Green Paper is annexed 

M 

Résumé 

1.  Amongst  the  topics  proposed  by  the  Green  Paper,  a  number  of  major  subjects 
in 
innovation 
for  small  and 

are  touched  upon  more  frequently 
particular,  the 
financing,  the  protection  of 
medium-sized  enterprises. 

improved  orientation  of  R&D  towards 

in  the  contributions.  This  concerns, 

industrial  property  and  support 

innovation, 

institution.  As  regards  public  research  efforts,  there 

As  regards  the  improved  orientation  of  research  towards  innovation,  the  general 
opinion  is  that  the  links  between  the  world  of  research  and  industry  must  be 
improved  by  strengthening  the  capacity  for  dialogue  between  the  t wo  and  by 
improving  researchers'  understanding  of  the  problems  of  the  business  world. 
Technology  watch  is  considered  important,  and  national  initiatives  must  be 
coordinated  and  exchanges  of  information  improved,  rather  than  setting  up  a 
new  Community 
is  a 
financing  of  pre-
difference  of  opinion  between 
competitive  research  only  and  those  who  favour  the  financing  of  the  entire 
research  process  (up  to  the  industrial-scale  phase).  In  general  terms,  task  forces 
are  of  interest  to  the  larger  countries,  but  the  desire  is  that  their  working  should 
be  more  transparent  and  that  manufacturers  should  be  able  to  become  more 
involved  in  their  definition.  Finally,  there  is  unanimous  agreement  that  research 
programmes  should  be  faster  in  selecting  projects  and  that  their  procedures 
should  simplified.  As  things  stand  at  present,  they  seem  ill-suited  to  almost  all 
SMEs. 

the  proponents  of 

the 

As  regards  human  resources,  greater  mobility 
is  recommended,  particularly 
recognition  of 
between  university  and 
qualifications  and  greater  emphasis  on  innovation-linked  matters  in  school  and 
university  curricula. 

industry,  along  with  Europe-wide 

innovation  financing  were 
the  subject  of  a  great  many 
Improvements 
in 
comments  which 
focused,  in  particular,  on  the  need  for  a  European-level 
financial  market  for  innovative  businesses,  the  establishment  of  links  between 
technology  and  financing, the  introduction  of  guarantee  schemes  and  the  use  of 
the  tax  system  to  promote  innovation. 

As  regards  the  legal  and  regulatory  environment,  the  comments  focused  on 
industrial  property  rights  - considered  to  be  a tool  which  was  expensive,  difficult 
to  access  and  unfamiliar  to  businesses  -  and  the  need  for  a  company  statute 
suitable  for  the  single  market  and  affordable  to  SMEs. 

Finally,  a  great  many  suggestions  concerned  direct  support  for  SMEs  and  the 
national  or  regional  support  infrastructure  for  such  businesses.  These  are 
frequently  specific  to  the  individual  Member  States,  and  it  is  difficult  to  discern 
any  common  denominator.  However,  there  are  some  recurrent  features,  such  as 
research 
the  need 
to 
programmes, 
-
particularly  public  -  services  and  to  consider  SMEs  no  longer  in  isolation,  but 
against  the  background  of  their  relationship  with  large  concerns,  customers  and 
suppliers. 

in  (national  and  Community) 
transparent 

facilitate  participation 
to 

rationalise  and  make  more 

the  supply  of 

s  kl O ^-

2. 

In  addition,  some  comments  concerned  topics  wnich  were  not.  or  hardly, 
toucned  upon  in  the  Green  Paper: 

it  is  the 

This  concerned,  in  particular,  innovation  In  the  services  sector  (despite  the  fact 
that 
(ditto) 
"Innovation in  services  is  a  field  which  has  been  largely  ignored.  Innovation  in 
the  services  sector  plays  an  important  role  in  instigating  changes  in  the 
manufacturing sector" (Oslo). 

in  Europe)  and  in  the  public  sector 

largest  employer 

innovation,  wniie  neglecting 

There  was  some  criticism  that  the  Green  Paper  puts  too  much  emphasis  on  the 
technological  aspects  of 
the  social  and 
environmental  factors.  In  particular,  some  circies  feel  that  the  promotion  of  the 
that 
organisational  capacity  of  businesses  nas  been  ignored.  "The  DGB  regrets 
the  Green Paper  is  too  much  geared  towards  the promotion  of  technology and 
that  it  takes  only  little  account  of  direct  measures  to  promote  the  operational 
capacities of  businesses,  which  are  of  decisive importance  in  absorbing RTD". 
Furthermore,  the  trade  unions  (particularly  in  Germany)  regret  the  absence  of  a 
reference,  in  the  proposed  measures,  to  those  measures  aimed  at  motivating 
and  involving  employees.  The  UEAPME  also  points  out  that  "It  is  important 
to 
remember  that  innovation  means  more  than  just  the  development  of  new 
products: it  is also organisational and structural".  In the  same  vein,  the  concept 
of 
insufficiently 
emphasised  as  compared  with  radical  innovation  and  high  technology  (IRDAC). 
Large  concerns  are  frequently  mentioned  in  the  contributions  as  producing  a 
large  number  of  innovations.  There  is  some  surprise  that  they  do  not  then 
feature  in the  Green  Paper.  "Large  businesses are left  out  of  the debate, despite 
the fact  that  they  are  major  sources of  R&D  and  the  first  to  adopt innovations 
coming from  SMEs"  (CEST). 

incremental  (progressive) 

to  have  been 

innovation 

felt 

is 

Finally,  the  picture  painted  by  the  Green  Paper  is  sometimes  felt  to  be too  bleak. 
The  pharmaceutical  industry,  for  instance,  is  cited  as  an  example  of  a  European 
sector  which  has  been  very  successful  in  exploiting  its  technological  know-how 
in the  commercial  world. 

3.  The  main  topics  raised  in  the  various  contributions  are  given  below  according  to 

the  five  major  objectives  set  out  in the  summary  of  the  Green  Paper: 

improving  the  orientation  of  research  towards  innovation 

• 
•  bolstering  the  human  resources  for  innovation 
• 
•  establishing  a  legal  and  regulatorv  environment  conducive  to  innovation 
•  developing  the  role  and  procedures  of  the  public  authorities 

improving  the  conditions  for  financing  innovation 

t»; 

1 /  Directing  researcn  efforts  more towards  innovation 

It  is  important 
particular  universities, 

to  improve 
and 

in  Europe  between 

links 
industry. 

the  world  of  research, 

in 

There  is  a  widespread  w i sh  for  improved  adaptation  of  research  programmes  to 
the  needs  of 
to 
industry.  Some  contributions  nevertheless  stress 
maintain  fundamental  research  w h i ch  is  not  directly  linked  to  immediate  market 
increased  dialogue  and 
needs.  This  adaptation  could  be 
coordination  b e t w e en  sectors,  particularly  w i th  a  view 
to  avoiding  harmful 
competition  in  the  use  of  the  resources  devoted  to  research.  It  also  requires  the 
intermediaries  such  as  collective  research  associations, 
active  involvement  of 
the 
and 
university  to  industry. 

the  organisation  of 

the  outcome  of 

-  and  support 

-  technology 

the  need 

transfer 

from 

for 

One  of  the  proposals  at  the  Paris  conference  was  to  increase  the  involvement  in 
in  establishing 
research  of  business  engineers  and  project  managers 
relations  between  businesses  and  accompanying  research  projects  right  up  to 
their  transfer  to  industry.  (The  contribution  of  the  CNPF  also  points  out  that, 
is  a  need  to  reassess  the  technology  programmes  and 
within  France,  there 
research  bodies,  w h i ch  have  in  many  cases  " a g e d"  w i t h o ut  any  subsequent 
review.) 

trained 

for 

system 

leeway 

(Madrid). 

in  industry" 

researchers 

for  assessing 

is  an  obstacle 

their 
It  is  proposed  that  these  criteria  be  revamped 

The  unsuitability  of  university  assessment  criteria  is  frequently  mentioned.  The 
taking 
traditional  criteria  are  based  on  publications  and  leave  no 
account  of  researchers'  aptitude  for  mobility  and  exchanges  w i th  industry. 
"The 
current 
to 
public 
participation 
and  that  the  use  of  research  results  by  businesses  become  a  positive  criterion. 
The  principles  currently  governing 
regarded  as  a 
powerful  brake  on  such  collaboration.  Researchers  in  fact  often  have  a  job  for 
life.  "Fixed-term 
for  researchers  working 
should  be  encouraged, 
when 
awareness  could  be  enhanced  and  they  could  be  trained  in  knowledge  of  the 
the 
business  w o r l d.  H o w e v e r, 
contrary,  young  researchers  should  be  assured  of  stable  career  prospects 
in 
order  to  ensure  t h at  t h ey  have  the  peace  of  mind  needed  for  their  creativity. 

institutes 
them  on 
In  addition,  their 

tax  incentives 
the  labour  market" 

in  public 
for 
(Milan). 

they  become  available  on 

trade  union  organisations 

researchers'  careers  are 

research 
taking 

possibly  with 

that,  on 

contracts 

think 

firms 

the 

Technology  watch  and  economic 

information 

Technology  foresight  and  technology  w a t ch  exercises  carried  out  at  national 
level  are  sometimes  considered  by  businesses  as  a  means  of  orienting 
the 
technological  and  industrial  policies  of  the  Member  States,  rather  than  as  tools 
useful  to  businesses.  "Technology 
create  jobs  only  in  the  science  of  forecasting  and  not  in  businesses" 
is 
Economic  and 
considered  a  problem 
is 
nevertheless  t h o u g ht  necessary,  w i th  manufacturers  taking  part  in  prospective 
technological  study  projects  and  the  results  of  such  projects  providing  some  of 
the  information  of  use  to  businesses. 

for  businesses  -  particularly  SMEs  - 
to  be  dealt  w i th  separately,  although  a  summary 

information 

watch  and 

initiatives 
(UEAPME). 

technology 

technical 

foresight 

*H 

As  regards  prospective  technological  studies,  emphasis  is  placed  on  the  need  to 
exploit  w h at  has  already  been  acnieved  by  Memcer  States  Dv  relying  on  their 
individual  skills.  Setting  up  a  n e t w o rk  of  such  initiatives  receives  more  support 
than  developing  a  new  scheme  at  European  ievel.  "The  centralised  model 
for 
technology 

foresight 

is  risky" 

(Oslo). 

on 

the 

information 

technoiogicai 

SMEs  appear  to  oe  making 
insufficient  use  of  the  technology  w a t c h.  Some 
doubts  are  expressed  as  to  the  neeo  to  provide  businesses  w i th  even  more 
information.  The  Berlin  conference  stressed  that. "In  general.  SMEs  do  not  need 
the 
more 
they  nave".  At  this  level,  the  distinction  b e t w e en  technoiogicai  and 
information 
economic 
information  appears  artificial.  Businesses  shouid  be  supplied  w i th 
information  of  direct  use  to  t h e m,  e.g.  information  on  markets,  the  competition 
and  the  financial  and  legal  fields.  Manv  correspondents  say  t h at  SMEs  should  be 
made  more  aware  of  economic  intelligence.  The  suitable  f r a m e w o rk  for  this  type 
of  action  would  seem 
level,  at  w h i ch  exchanges  of 
information  and  studies  b e t w e en  businesses  could  be  organised  and  local  bodies 
such  as  Chambers  of  Commerce  and  Innovation  Relay  Centres  involved. 

They  already  cannot  use 

situation. 

regional 

to  be 

the 

The public  effort 

A  number  of  points  arose  as  to  the  advisability  of  increasing  the  public  RTD 
effort,  in  particular  the  questioning  of  the  distinction  b e t w e en  precompetitive 
and  other  research,  the  notice  taken  of  cohesion  objectives  and  the  need  for 
efforts  to  be  more  narrowly  f o c u s e d. 

The  participants  at  the  German  and  British  conferences  displayed  a  certain  lack 
of  enthusiasm  for  a  possible  increase  in  R&D  budgets.  While  this  is  regarded  as 
a  possible  additional  burden  on  businesses,  a  large  number  of  comments 
question  the  existence  of  a  direct  link  between  R&D  expenditure  and  the  results 
in  terms  of  innovation.  The  Birmingham  conference  felt  t h at  "Europe  does  not 
need  more 
research". 

correctly-applied, 

It  needs 

research. 

effective 

and 

high-quality 

in  R&D  programmes 

to 
Taking  account  of  cohesion  objectives 
conflict  w i th  the  objective  of  strengthening  the  innovative  capacity  of  European 
businesses,  particularly  by  the  participants  at  the  Berlin  conference.  The  BDI.  in 
particular,  states  that  "It  is  just  as  harmful 
research  policy 
structural 
considered 
developed 
such  cooperation 

to 
the 
funds".  Nevertheless,  measures  aimed  at  strengthening  cohesion  are 
and  more 
between 
the  benefits  of 

"Cooperation 
regions  must  be  promoted, 

less-developed 
that 
(Madrid). 

taking  care  to  ensure 
regions" 

funds  a/located 
from 

for  cohesion  objectives, 

in  the  less-favoured 

to  use  Community 

as  it  is  justified 

to  fund  R&D 

necessary. 

t h o u g ht 

remain 

is 

A  number  of  contributors  feel  t h at  the  question  of  the  advisability  of  financing 
beyond  the  precompetitive  stage  -  and  particularly  in  the  industrial  application 
phase  -  remains 
innovation 
In  particular, 
"The 
process  does  not 
Support  must  be 
continued  and  include  market  entry" 
(Berlin).  The  Madrid  conference  mentions 
initial 
launching  a  programme  which  might 
the  possibility  of 
applications  of  specific  technologies  w h i ch  have  already  proved  their  industrial 
"Moving 
utility.  However,  there  is  clear  opposition  from  some  large  concerns. 

to  be  settled. 
finish  with 

of  a  prototype. 

the  production 

it  is  felt 

finance 

t h at 

the 

^ 

towards  zhe  marKei-oiace  means 

that 

favouring  a  smgie  commercial  enterprise  or  publishing 

it  must  cnoose 
tate-
sustainable" 

information.  Neither  of 

these  strategies 

is  realisticailv 

puoliciy-fundeo  R&D 
between  overtly 
stage 
(SmitnKline  Beecham). 

Finally,  certain  sectors  (the  electrical  industries,  in  particular)  feel  there  should 
be compensation  for  the  fall  in  public  R&D  spending  on  defence. 

Task  forces 

Task  forces  are  generally  considered  -  particularly  by  the  large  countries  -  to  be 
a  useful  instrument  for  concentrating  resources  in  major  fields.  Nevertheless,  in 
order  to  improve  their  transparency,  it  is  recommended  that  manufacturers  be 
more  effectively  involved  right  from  the  design  phase  in  selecting  topics  and 
preparing  the  work  programme.  "The  role  and  operation  of  the  Task  Forces 
must  be  open  and  informed  by  consultation  with  industry  and  the  output 
from 
various  national  foresight  programmes" 

(CBI). 

While  the  participation  of  SMEs  in  the  task  forces  is  considered  desirable,  a 
large  number  of  comments  stress  tne  incompatibility  between  SMEs  and  task 
forces.  The  latter  are  regarded  as  being  ot  potential  benefit  above  all  to  large 
concerns,  and  this  explains  the  reservations  on  the  part  of  some  Member 
States.  "The  task  forces,  as  set  out  in  the  Green  Paper,  are  of  no  use  to 
Portugal" 

(Lisbon). 

Finally,  some  major  manufacturers  have  reservations  about  any  move  on  the 
part  of  the  European  Union  to  coordinate  industrial  research  efforts.  They  feel 
that  a  better  solution  would  be  to  strengthen  the  cohesion  of  the  Community 
programmes. 

Research programmes 

In  particular,  they  seldom  appear 

There  is  unanimous  agreement  that  these  should  speed  up  the  selection  of 
projects  and  simplify  procedures. 
to  be 
adapted  to  the  constraints  facing  SMEs:  the  cost  of  drawing  up  a  file  is 
considered  disproportionate. 
for 
Community  support 
(Birmingham).  Finally,  the 
business  needs  greater  freedom  and  flexibility  in  the  use  of  the  funds.  The  very 
participation  of  SMEs  in  the  framework  programme  is  questioned,  since  it  is  felt 
that  only  a  very  small  number  of  them  are  capable  of  making  a  genuine 
contribution  and  hence  being  eligible 
the  specific 
programmes. 

"A  small'  high-tech  business  cannot  wait 

for  participation 

is  an  eternity" 

-  six  months 

in 

A  number  of  proposals  are  aimed  at  decentralising  the  decision-making 
procedures  and  setting  up  bodies  in  the  field.  One  comment  mentions  that 
to 
"EUREKA-type  projects,  which  are  close 
products,  are  worthy  of  reinforcement" 
that 
participation  in  the  specific  programmes  could  be  replaced  by  more  flexible 
arrangements  involving  indirect  support. 

to  manufacturers'  concerns  and 
(Paris). 

is  also  suggested 

It 

Furthermore,  a number  of  comments  relate  to  the  project  selection  procedures: 

they  shouid  involve  more  experts  from  industry 

66 

Technical  Qualifications  snouid  cs  aeciaing  criteria, 
•nvoivement  ot  a  numoer  ot  partners  from  different  Memper  States 
the  performance  oojectives  snouid 
investment  in  terms  of  R&D  and  innovation 
ïhe  project  evaluation  snouid  take  account  not  only  of  the  business  oians. 
but-also  ot  he  pians  of  the  researcn  institutes  taxing  part  in  the  projects 

:ake  account  of 

ratner  man 

return  on 

the 

the 

ihe  programmes  should 

Finally, 
the  concept  oi 
collaboration  between  small  and  large  businesses,  and  it  should  be  possiPie  to 
subsidise  projects  deriving  from  predetermined  topics. 

rr.ore  account  of 

take 

2/  Bolstering  the  human  resources for  innovation 

The mobility  of  persons  between  research,  the  education  system  and 
must be  strengthened. 

industry 

to 

This  echoes  the  concern  mentioned  before  as  regards  the  criteria  for  assessing 
researchers,  which  do  not  encourage  them  to  take  part  in  industrial  projects. 
integrate  young  graduates  into  businesses,  particularly 
Making  it  easier 
'Local 
SMEs,  is  considered  by  ail  the  conferences  to  be  highly 
mobility  of  researcners  and  students  between  academic  and  industrial  circles 
to  imorove  education  and  training,  but  also  to 
might  be  an  interesting  way 
foster 
(UNICE).  There  are  already 
inventiveness 
the  United 
programmes  at  national 
Kingdom.  CIFRE  ana  CORTECHS  in  France,  etc.)  which  could  act  as  examples 
for  other  Memoer  States.  One  specific  suggestion  relates  to  graduates  with 
doctorates,  whose 
through  post-doctorate 
traineeships  in  businesses,  in  particular  SMEs. 

level  (Teacning  Company  Scheme 

integration  could  be  neloed 

and  entreoreneursnio' 

important. 

in 

A  number  of  comments  -  sometimes  contradictory  -  are  aimed  at  adapting  the 
programmes  (particularly  the  Communitv  ones)  to  promote  mobility: 

they  should  be  made  more  flexible  in  order  to  genuinely  meet  the  needs  of 
ousinesses 
they  should  have  no  age  limit 
they  should  be  more  focused 
they  should  be  expanded  and  have  their  funding  increased 

The  lack  of  internal  employee  mobility  towards  fields  in  different  specialisms  is 
regretted.  There  is  a  need  to  reward  changes  of  stream,  promote  assistance  for 
career  guidance,  help  staff  to  cope  with  change, expand  part-time  working,  etc. 
There  were  numerous  suggestions  to  the  effect  that  school  and  university 
curricula  should  include  subjects  of  relevance  to  innovation.  In  particular,  there 
is  a  need  to  include  economics  and  management  in  the  training  of  scientists. 
More 
in  scientific  and 
technical  curricula,  industrial  property  rights  should  feature  more  prominently  in 
university  and  even  secondary  education,  etc. 

importance  snouid  be  attached 

to  experimentation 

Training  should  be  suitable  for  all  levels  -  whether  for  future  managers  or  future 
unskilled  operators,  who  should  be  prepared  for  frequent  rethinks  and  technical 
changes 

yr  U 

For  some  bodies,  t h e.  Commission  s  intervention  should  be  directed 
towards 
developing  networks  of  national  agencies  w i th  responsioiiitv  in  the  field,  rather 
than  setting  up  an  additional  body. 

3/ Improving  the  conditions  for  financing  innovation 

Financing 
is  obviousiv  a  major  concern.  However,  some  comments  draw 
attention  to  the  fact  that  financing  remains  a  resource  like  anv  other,  and  that  it 
innovation. 
alone 
organisation  and  entrepreneurial 
or  technological  deficits" 

"The  problems 
attitudes  are  more  important 

associated 
than 

is  not  enougn 

to  ensure 

with 
financial 

I'Berlin). 

tne 

There  is  a  major  role  for  the  European  Union  in  facilitating  the  exchange  of 
experience  and  best,  practice,  sn  implementing  harmonisation  measures,  or 
encouraging  transnational  financing  initiatives 
Markets 

Most  of  the  national  conferences  are  in  favour  of  the  creation  of  a  (NASDAQ-
type)  European  market  on  w h i ch  shares  in  young  growth  companies  could  be 
is  not 
traded.  Plans  for  setting  up  such  a  market  should  be  speeded  up.  "ft 
businesses 
satisfying 
towards 
the 
on 
business 
(BDI).  National 
to 
markets  of  this  type  must  become  international 

the  US  market,  and  this  will  naturallv  have  major 
itself,  even 

capital 
repercussions 

the  extent  of  demanding 

to  point  successful 

to  be  forced 

relocation" 

to  have 

venture 

(Paris). 

Since  this  type  of  market  caters  only  for  the  most  dynamic  businesses,  other 
solutions  have  to  be  found  to  encourage  investors  (assistance  funds  for 
the 
recover 
transmission  of  enterprises,  schemes  giving  investors 
their  shareholding,  mutualisation  of  risks  along  the  lines  of  the  Joint  Venture 
Capital  Fund.  etc.). 

the  chance  to 

Technology  and 

financing 

for  more  account 

is  general  agreement  on  the  need 

There 
to  be  taken  of 
innovation  and  technology  by  financial  institutions.  To  this  e n d.  it  is  suggested 
investment  operations  be  launched,  perhaps  by  setting  up  a 
that  technology 
bank  specialised  in  technology 
(Birmingham),  that  a  technical  certification  or 
guarantee/insurance  system  be  set  up  (at  Community,  national  or  regional  level) 
the 
to  serve  as  a  point  of  first  resort  and  attract  outside 
development  of  "technology  rating"  systems  be  encouraged,  so  as  to  be  able  to 
"The 
quantify 
the  chances  of 
subject" 
European  Union  must  encourage 
(ANVAR). 

industrial  success  of  a  technical  project. 

finance,  and  that 

of  experience 

exchanges 

this 

the 

on 

* 

t>? 

Guarantees 

Encouraging  support  from  banks  for  innovative  businesses  involves  minimising 
the  risk  to  the  banks,  in  France,  "increasing  the  SOFARIS coverage  rates  should 
encourage  banks  to  provide  more  funding  for  innovative  SMEs"  (Paris).  Against 
this  background,  the  fact  that  the  EIF  provides  guarantees  to  banks  is  widely 
welcomed  (Dublin,  Helsinki,  Milan,  etc.). 

Mutual  guarantee  societies  should  be  authorised  in  a  Directive  to  have  a  more 
for 
favourable  capital  ratio.  "The  risk  cover  levels  required  from  these  societies 
providing  guarantees  should  be  authorised 
to  be  more  or  less  the  same  as  those 
for  banks" 

(Madrid). 

Taxation 

There  is  almost  unanimous  agreement  on  the  need  for  more  favourable  tax 
treatment  of  the  investor  in  innovative  projects  or  companies.  In  particular,  it  is 
suggested  that  the  capital  gains  on  innovation  securities  (particularly  in  the  case 
of  individual  investors)  should  be  subject  to  lower  taxes  or  even  exempted,  that 
the  risk  of  loss  for  venture  capital  shareholders  should  be  limited,  perhaps  via  a 
that 
tax  credit  corresponding 
distributed  profits  should  be tax-exempted,  etc. 

to  a  certain  percentage  of 

investment, 

the 

These  tax  measures  might  be  aimed  specifically  at  encouraging  sources  of 
"patient"  capital 
funds,  save-as-you-eam 
life 
(pension 
schemes)  to  turn  to  venture  capital  investments. 

insurance 

funds, 

Finally,  several  suggestions  relate  to  the  improved  tax  treatment  of  investment 
by  businesses  in  innovation,  particularly  in the  field  of  training. 

Other measures 

Start-up  capital  should  be  encouraged,  perhaps  along  the  lines  of  the  American 
SBICs,  so  as  to  ensure  a  better  yield.  The  various  schemes  set  up  in  this  field 
introduced 
by  the  Member  States  should  be  studied  and,  if  appropriate, 
elsewhere. 

The  EVCA  (European  Venture  Capital  Association)  recommends  that  the  EIF 
should  invest  directly  in  SME  capital  via  venture  capital  funds.  This  idea  is 
generally  welcomed  by  the  national  conferences,  although  it  is  difficult 
to 
assess  the  costs  and  impact  of  this  type  of  measure.  "There  is  no  objection  as 
regards  the  possibility  of  innovation 
funds,  but  there  is  some  concern  at  seeing 
the  money  simply  injected  here  and  there"  (Zeist,  NL). 

The  regulatory  conditions  within  the  Union  must  be harmonised  to  avoid  a  flight 
of  capital  to  wherever  conditions  are  most  favourable. 

^ 

6<3 

4/  Encouraging  a  legai  and  regulatory  environment  conducive  to 
innovation 

Intellectual  and  industrial  property  rights  attracted  a  number  of  comments.  It  is 
generally  felt  that  their  importance  is  underestimated.  The  expensiveness  of 
patent  procedures  and  the  need  for  a  harmonised  system  in  Europe  are  two 
points  with  regard  to  which  most  of  the  national  conferences  consider  the 
present  situation  unsatisfactory. 

Intellectual property  rights 

A  large  number  of  comments  concern  patents.  The  situation  in  Europe  is 
integrated 
regarded  as  too  complex.  "777e  decision-makers  should  develop  an 
approach  with  a  view  to  improved  protection  of  intellectual  property  rights  in  all 
fields"  (UNICE).  As  the  Birmingham  conference  points  out,  "A patent  covering all  the 
Member States is a clear priority".  The entry into force of the Community patent should be 
promoted. There is unanimous agreement that the costs involved in patents, particularly the 
cost of translation, are too high. To make a future Community patent more attractive, these 
costs and the processing period must be reduced. In line with many other comments, the 
Athens conference  calls  for  "a reduction in  the cost of registering and protecting patents. 
R&D funding  should be extended to the registration costs for  innovative products. 
The  importance  of  access  to  information  on  patents  (information  network, 
databases)  is  underlined.  It  also  appears  desirable  to  improve  the  image  of 
industrial  property  rights,  particularly  by  including  specific  courses  in  university 
(or  even  secondary)  curricula.  "In  the  US and  Japan,  patents  and  trademarks  are 
considered  factors  which  improve  productivity" 

(Madrid). 

Efforts  to  achieve  harmonisation  are  considered  necessary  and  even  urgently 
required 
and 
telecommunications). 

biotechnology 

technologies 

(particularly 

new 

the 

in 

Opinion  seems  to  be  predominantly  unfavourable  as  regards  the  use  of  utility 
models.  "The  Commission  should  neither  encourage  their  use  at  national 
level 
nor  promote  their  use in  the  Union" 

(Birmingham). 

Defending  one's  intellectual  property  rights,  particularly  in  third  countries,  is  an 
expensive  business.  It  is suggested  that  an insurance  scheme  be set  up to  cover 
these  such  costs,  perhaps  supported  by  public  funds.  "The introduction  of  such 
rights.  Such  a 
an  insurance  system 
system  could  be  funded/supported 

for  infringement  of  intellectual  property 
(Sweden. 

from  public  funds" 

Administrative simplification 

Administrative  simplification  is  considered  essential.  There  is  a  widely  shared 
opinion  that  it  would  be  better  to  remove  the  administrative  obstacles  rather 
than  set  up  new  structures  to  overcome  them.  "It is more  useful  to remove  the 
various  administrative 
for 
overcoming  them"  (UAPME).  In  this  context,  ANVAR  mentions  that  "the  one-
stop  shop  has proved  to  be a bad  idea". 

to  set  up  even  more  structure 

obstacles 

than 

1o 

Company  law 

All  the  comments  agree  as  to  tne  adoption  of  a  European  puclic  limited 
company  statute  going  beyond  the  concept  of  an  EEIG.  However, 
it  is 
frequently  felt  that  this  concept  is  difficult  to  apply  to  SMEs.  for  wnom  there 
limited 
should  be  a  special  statute.  "The  rapid  adoption  of  a  European  public 
company  statute 
is  a  major  factor  in  facilitating  cross-border  cooperation.  The 
proposal  for  a  small  European  iimiteo  comoany'  is  a  step  towards  achieving  a 
joint  solution" 

(DIHT). 

Competition 

Competition  is  generally  regarded  as  one  ot  the  driving  forces  of  innovation. 
However,  a  number  of  comments  call  for  a  degree  of  relaxation  of  the  rules  in 
this  field.  The  German  Association  of  Chamoers  of  Commerce  states  that 
"Progress  in  certain  fields  is possible  only  through  joining 

forces". 

for  cooperative  projects.  The  current 

Some  contributions  call  for  a  reduction 
in  the  administrative  burden  on 
businesses  by  extending  the  field  of  application  of  the  uniform  ruies  on  mergers 
in  Europe  and  by  harmonising  the  treatment  of  structural  joint  subsidiaries.  The 
BDI points  out.  in  particular,  that  "The  Commission  should  expedite  and  simplify 
authorisation  procedures 
legal  situation 
tends  to  stifle  cooperation  because  of  lengtny  procedures  and  a  lack  of  legal 
the  scope  of  application  of  European  merger  control  should 
certainty.  Moreover, 
joint 
be  extended,  so 
subsidiaries  simultaneously 
In  similar 
to  a  large  number  of  national  authorities". 
to  Siemens:  "More  and  more  cooperation  agreements  are 
vein,  according 
to  national  merger  control.  This  involves  considerable  expense  and 
subject 
effort  for  the  firms  concerned,  as  well  as  risks.  Mergers  should  be  controlled  on 
the basis  of  uniform  criteria  by  the  Commission". 

that  companies  are  no 

longer  compelled 

to  notify 

Siemens  also  mentions 
competition,  whereas  only 
German  competition 
between  firms  (supplier  and  OEM  contracts)" 

that 

the  principle  of  abuse  applies 
law  ...  as  regards  ex emotions  by  category 

"Article  85  also  covers  barriers 

to  vertical 
to  this  field  under 
relations 

for 

Others  mention  a  revision  of  Articie  85  "to  make  competition  between 
competitors  possible  (American  'rule  of  reason')  except  in  the  case  of  abuse  or 
In  the  same  way:  "Article  85  should 
contraindication" 
be  rewritten  with  a  view 
to  liberalisation  and  a  comprehensive  and  dynamic 
market  approach"  (IBM  France). 

(Thomson  Multimédia). 

Assessment of  the impact  of regulations on innovation 

"All  regulations  must  be  assessed  on  the  basis  of  their  capacity 
to  promote  or 
hamper  innovation.  To  this  end,  businesses  must  be  involved  as  far  upstream  as 
possible  in  drawing  up  these  rules  at  both  local  and  European  level"  (CNPF). 

M 

5/  Adapting  the  roie  and  procedures  of  public  action  in  favour  of 
innovation 

this 

topic  attracts  a  iarge  numcer  of  c o m m e n t s, 
to  obtain  a  coherent  overview,  particularly  because  of 

is  sometimes 
Althougn 
difficult 
the  major 
differences  in  the  situation  in  the  individual  countries.  Some  major  subjects  of 
interest  can.  h o w e v e r,  oe  discerned. 

it 

Support  for  SMEs 

There  is  frequent  criticism  of  the  system  of  classifying  SMEs  by  employment 
size  class,  as  this 
the  wide  range  of 
problems  affecting  t h e m. 

is  considered  unsuitable 

for  reflecting 

Several  contributions  also  stress  t h a t,  instead  of  placing  the  emphasis  solely  on 
SMEs  as  opposed  to 
large  concerns,  account  should  be  taken  of  the  entire 
customer-supplier  chain  and  the  large  concerns'  unused  technological  resources. 
In  general,  the  c o m m e n ts  are  in  agreement  that  pilot  projects  aimed  at 
the 
"accompanying 
internationalisation  of  SMEs  must  be  encouraged.  Moreover, 
and 
selected  SMEs  access 
measures 
transnational 
or 
research  centres 

firms  or  with  universities 

together  with  otner 

in  other  countries" 

cooperation, 

should  be 

to  markets 

to  allow 

(Madrid). 

taken 

The national  or  regional  support 

infrastructure 

is 

t h at 

remark 

One  general 
the  public  support  programmes  may  appear 
complicated  to  SMEs.  w h i ch  have  difficulty  finding  their  w ay  around  t h e m.  The 
German  chambers  of  commerce  state  that  they  would  w e l c o me  a  rationalisation 
of  the  C o m m u n i ty  information  centres,  while  the  British  employers' 
federation 
stresses  the  use  of  existing  initiatives  rather  than  the  creation  of  new  ones. 
"Care  should 
proliferation 
subsequent 

find 
relay  centres 

proximity 
to  confusion 

taken 
information 

right  balance  between 

that  would 

rejection" 

(UNICE). 

lead 

the 

be 

of 

to 

and 
and 

The  French  conference  also  mentions  that  the  creation  of  support  networks  for 
SMEs  should  be  promoted  and  the  public  support  schemes  opened  up.  More 
generally,  most  countries  are 
the 
problems  of  SMEs. 

to  promote  global  approaches 

trying 

to 

The  Spanish  contributions  reveal  a  particular  interest  in  the  regional  level  (while 
stressing  the  fact  that  the  Green  Paper  does  not  devote  enough  attention 
to 
regional  aspects)  and  in  strengthening  the  role  of  local  authorities  in  innovation. 
This  view  is  supported  by  several  other  contributions  w h i ch  mention  the  role  of 
the  local  authorities  in  the  field  of  support  for  SMEs.  The  field  of  science  parks 
is  also  frequently  mentioned  as  one  in  which  there  have  been  successes  and 
which  should  be  taken  into  account.  Some  other  contributions  are  less  upbeat, 
and  the  Land  of  Hessen  states  that  "It  is  important 
regional 
innovation  must  not  be  taken  as  a 
dimension  of  innovation; 
of 
cure  for  all  ills  or  as  a  reaction 

to  the  increasing  globalisation 

to  strengthen 

economies". 

however, 

regional 

the 

yr  V 

Research programmes 

A  number  of  comments  of  relevance  to  this  heading  had  already  been  made 
under  the  heading  "Directing  research  efforts  more  towards  innovation",  in 
particular  as  regards  the  difficulty  facing  SMEs  wishing  to  take  part  in  the 
research  programmes.  To  overcome  these  difficulties,  Daimler-Benz  mentions 
that  one  effective  way  of  fostering  the  participation  of  SMEs  in  the  research 
programmes  might  be  to  involve  them  in  the  programmes  together  with  the 
large  concerns. 

research 
Other  measures  might  be  more  effective 
innovation 
programmes  "with  a  view 
process.  General  instruments, 
research  projects 
and  the  utilisation  of  results  are  more  suitable  than  fixed  quotas  in  the  specific 
programmes" 

the 
the  needs  of  SMEs  in  the 
joint  industrial 

tax  incentives, 

to  meeting 

for  SMEs 

(BDI). 

than 

"improve 
The  Madrid  conference, 
to 
finally,  notes 
firms, 
for 
transparency  in  the  presentation  of  the  procedures  for  public  support 
the 
so  that 
payment  schedule,  etc.  are  known 
It  is  also  suggested  that 
the  application  forms  should  be  made  more  comprehensible  and  that  businesses 
should  be  helped  in  replying  to  the  authorities'  requests. 

follow, 
from  the  outset". 

the  assessment  criteria, 

the  proposal  must 

is  a  need 

the  stages 

there 

that 

vT  73 

APPENDIX 

List of  individual  reactions to  the 
Green  Paper 

\r  •fif 

List  of  individual  reactions  to  the  Green  Paper 

Names 

Acronyms 

Country 

' 

- 

* 

* 

* 

* 

" 

_ 

_ 

_ 

* * 

_  _ 

ARGO 

ESI-VU 

"ANACT 
ÀNVÀR 

Association des Consultants 

ABB 
CÀDÀS 
AËI 

aBaCus Partnership  * 
ABB Ov 
Acaoémie  des  Sciences  -  institut  de  France  -  Comité  Applications  de 
Action in Europe for  Education.  Invention, and Innovation 
Afonso  Paulo Manuel  (consultant) 
Agence  Nationale  pour  l'Amélioration des Conditions ae  Travail 
Agence  Nationale  pour la Valorisation de la Rechercne 
Agencia d'Àvaluacio  de fecnologia  Medica  * 
Air France 
Air Liquide 
Akademie fur Innovation,  Unternehmensdesign und Politikgestaitung  GmbH  Die Denkfabrik 
Àkademie fur  f echnikfoigenabschàtzung 
Àilianz Lebensversicherung, ÀG 
Amerada  Hess ltd 
Amsterdam  Economiser) en Sociaal Instituut 
Amsterdam  University 
Arm der KartnerLandesregierung 
Ann Christoph  (professeur) 
Ânsaldo 
_ 
Àrcadi - Réseau 
ARGO - Plastic Packaging Materials - Plastics in Ëngeering 
Arôvit  Petfood 
Associaçâo  Portuguesa  de  Professionals em Socioiogia  industrial, aas Org. e  APSIOT 
Association  "Industrialisation  des  Recherches  sur  les  Procédés  et  Jesj IREPÀ 
AGREF 
Association des Large concerns  Françaises 
ANRT 
Association Nationale  de la Recherche Technique 
AER 
Association of  European Radios 
AIRI 
Assôciazione ItaÏÏa  per la Ricerca 
Àssociazione  Tiguïiio_Attiva  +  Promotiguïiio sri 
Atlantis Research Organisation 
Banca Nazionalejdel Layoro 
Banca Sella 
BASF 
Bayerische Vereinsbank,  AG 
Bayerisches Forchungszentrum fur Wissensbasierte  Système 
Becdelievre RolandJConseiller Général Le Mans) 
Bertelsmann, ÀG 
Bio Soft 
Bodilsen Holding 
Boehnnger ingelneim 
Bonn International  Centre  for Conversion 
Bonnaure P.  (expert) 
Bosch, GjmbH 
Bouju André  (consultant) 
British Ceramic Confederation 
British Technology  Group 
British Telecom 
Bundësarbeitkammer in der Standigen Vertretung Ôsterreichs oei der EU 
Bundesveroand der Cteutschen Industrie 
Bureau of  European Designers Associations 
__ 
Burmah Castrol  _  _ 
Bûro fur Énergie und C^kologieManagement 
CÀRIPLO~""~ 
Casa de la Sabiduria SA 
Centre d'Études et  Recherches Appliquées à la Gestion 
Centre de coolâérationjnternationale en recherche  agronomique 
Centre""d'ë-Ressources  et  d'initiatives  pour  i'international 
Promotech 
Centre européen d'entreprise et d'innovation 
Çl?^ 
CentreÉuropéen des Entreprises ài  Participation Publique 
Ç§?J 
Centre for Exploitation of Science and Technology 
Centre forrWorlcing~LTfe Research^& Dev.ment - Halmstad Ùniversity_  _  _  Ç^!u 
Centre  fëchnïque ides Industries Mécaniques 
Centro de Enlace del Mediterraneo  - Innovation Relay Centre_- CÉNEMÉS 
Centre de  Formaçao Professional para a industria Ceramica 

BCC 
BTG 
BT 
BAK 
BDI 
BEDA 

~  "'IJIJII'1..^1II'Z.-1.1..1" 

CERAG 
CIRAÔ___ 

(Ministère  de  CR2i 

FORWISS 

CARIPLO 

CENCAL 

CETJM 

BASF 

BNL 

_  _ 

'  " 

_ 

_ 

_ 

_ 

_ 

_ 

_ 

* 

* 

• 

Un.  Kingdom 
Finland 
France 
France 
Spain 
France 
France 
Spain 
France 
France 
Germany 
Germany 
Germany 
Un.  Kingdom 
Netherlands 
Netherlands 
Austria 
Germany 
Italy 
France 
Greece 
Denmark 
Portugal 
France 
France 
France 
Belgium 
Italy 
Italy 
Greece 
Italy 
Italy 
Germany 
Germany 
Germany 
France 
Germany 
Denmark 
Denmark 
Germany 
Germany 
France 
Germany 
Switzeriana 
Un. kingdom 
JJn^ Kingdom 
Un.  kingdom 
Austria 
Germany 
Netherlands 
Un.  Kingdom 
Germany 
Italy 
Spain 
France 
France 
France 
France 
„.Ç?!?ÎM!T! 
Un. Kingdom 
.sJ^?^?n. 
France 
Spain 
Portugal 

r^ 

Centro  de  Robotica  Intelligente 
Centro  di  Ricerca  Fitotecnica 
Centro  Promotor  de  inovacao  e  Negocios 

CERAME-UNIE  Bureau  de  liaison  des  industries  céramioues  européennes 
Chanrmre  de  Commerce  Américaine  -  The  EU  Committee 
Chambre  de  Commerce  et  d'Industrie  de  Paris 
Chambre  économique  autrichienne 
Chambre  Régionale  de  Commerce  et  d'Industrie  de  Lorraine 
Chartered  Society  of  Designers 
Chemical  Industries  Association 
Christeijk  Nationaal  Vakverbono 
Colas 
Colonia  Assurance 
Commersbank.  AG 
Compagnie  des  Signaux 
Compagnie  Nationale  des  Conseils  en  Propriété  Industrielle 
Compania  Ëspanola  de  Petroleos 
*  • 
Computermac 
Confédération  Européenne  des  Syndicats 

Confederation  of  British  Industry 
Confindustria 
Conseil  Européen  de  l'Industrie  Chimique 
Conseil  National  du  Patronat  Français^ 
Consejo  Superior  de  Investigaciones  Cientificas 
Consiglio  Nazionale  délie  Ricerche 
Construction  Industry  Council 
Construction  Research  and  Innovation  Strategy  Panel 
Cornwall  Innovation  Centre,  Ltd 
Corporacion  Empresanal  de  Extremadura 
Cranfield  International  Ecotechnology  Research  Centre 
Crédit  Local  de  France 
CUV  Progress 
Daimler  Benz 
Danel  Technology  Consultant 
De  Montgolfier. Philippe  (consultant)  -  Essor  Europe 
Deutsche  Aktionsgemeinschaft  Bildung-Erfindung  Innovationen 

Deutsche  Ausgleichbank 
Deutsche  Bahn 
Deutsche  Bank,  A.G 
Deutsche  Erfinder  Akademie 

Deutsche  Telekom 
Deutscher  Gewerkschftsbund  -  Bundesvorstand 
Deutscher  Industrie  und  Handelstag 
Ejner  Hessei 
* * 
Electrolux 
Empresa  Nacionai  de  Innovacion  Sociedad  Anonima 
Enemaerke  &  Petersen 
Ente 
Ernst  &  Young 
Esbjerg  Oilfield  Services 
Escuela  Superior  de  Administration  y  DJreccion  de  Empresas  de 
Espoirs  Suscités  par  l e s j j u d es  et  la  Recherche 

per  le  Nuove  Tecnologie,  l'Energia  e  I'Ambiente 

J^*  '__ 

•* 

Ésso,  AG 

UNINOVA_ 

ICPTN 

CËRAMI  UNIE 

CCI  de  Paris 

CCI  de  Lorraine 
^CSCT 
jCIÂ 
CNV 

" 

^ 

CS 
CNCPI 
CEPSA 

CES 
CBI 

CEFIC 
CNPF 
CSIC 
CNR 
CIC 
CRISP 

CUV  Progress 

DABEI 

DB 

DGB 
DIHT 

ENISA 

ENEA 

la  ESADE 

Club  Esper 

• 

^_ ~ 

ÉTÂN 
Étane  S.A. 
Europabiiro  der  Deutscnen  Kommunalen  Selbsverwaltung 

~_" __" 

\ 

" 

ETAN 

Europe's  J500 
European  Association  of  Aerospace  industries 
European  Autorr^tjvejnitiative^roup 
European  Business  and  Innovation  Centre  Network 
European  Confederation  of  Iron  and  Steel  Industries 
European  Council  for  Construction.  Research.  Development  and  Innovation 
European  Council  of  Àppiied  Sciences  and  Engineering 
European  Economic  Interest  Group 
European  Federation  of  Equipment  Leasing  Company  Associations 
European  Federation  of  technology  &  Innovation  Consultants 
European  Fondation  for  Entrepreneurship  Research 
European  Independent  Steel  Works  Association 

* 

( 

; 

Europabiiro 
JEurope's  5 00 
AECMÀ 

_ 

*L^'G 
E B N_ 
Eurofer 
ÊCCRËDI 
EuroCase 

ZEUS 
Leaseurope 
EFTIC 
_§^Ë^ 
EISA 

Portugal 
Italy" 
Portugal 
Belgium 
Belgium 
France 
Austria 
Prance 
Un.  Kingdom 
Un.  Kingdom 
Netherlands 
France 
Germany 
Germany 
France 
France 
Spain 
Denmark 
Belgium 

Un.  Kingdom 
Italy 
Belgium 
France 
Spain 
Jtajy 
Un.  Kingdom 
Un.  Kingdom 
Un.  Kingdom 
Spain 
Un.  Kingdom 
France 
Bulgaria 
Germany 
France 
France 
Germany 
Germany 
Germany 
Germany 
Germany 
Germany 
Germany 
Germany 
Denmark 

Belgium 
Spain 
Denmark 
Italy 
Denmark 
Denmark 
Spain 
France 
Germany 
Belgium 
Greece 
Germany 
Denmark 
Belgium 
Germany 
Belgium 
Luxembourg 
Belgium_ 
Belgium 
Greece 
Belgium 
France 
Belgium 
Belgium 

vT  K 

European  Industrial  Researcn  Managment  Association 
European  Institute  ot  Social  Studies 

* 

European  Organisation  for  Researcn  and  Treatment  ot  Cancer 

European  Organisation  for  Technical  Approvals 
European  Public  Telecommunications  Network  Operators  Association 
European  Telecommunication  Professional  Electronic  industry 
European  Venture  Capital  Association 

"  _ 

Eurostat 
Fauconnier  Jean-Marie, 
Fédération  Internationale  des  Conseils  en  Propriétés  industrielles 
Federation  of  European  Cancer  Societies 

(architecte) 

Federation  of  Smail  Businesses  -  National  Federation  ot  self  empioyeo  and 
Federazione  Italians  aelle  Casse  flurali  e  Artigiane 
F I A J A u t o^ 

~-  — ^" 

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EIRMA 

EORTC 

EOT A 
ETNO 
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EVCÀ 

FICPI 
r-ECS 

F S E T_ 

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FIAT 

FIAT  S.p'.A. 
Finmeccanica 
Finnish  Forest  Industries  Federation 
Forbitec 
Ford-Werke 
Fraunhofer  -  Patentstelle  fur  die  Deutsche  Forschung 
Fraunhofer-lnstitut  fur  Systemtechnik  und  Innovationsforschung 
Fundacion  Cotec  para  la  innovacion  tecnologica 

_ 

* 

COTEC 

Fundacion  para  el  Desarrolïo  de  la  Funcion  Social  de  las  Communicaciones 

Fundesco 

Gaz  de  France 
General  Electric  Compagny 
Générale  de  Placement  Banque 
GlaxoWeilcome  Pic 

_ 

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GPVindustri 
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Groupe  Ecole  de  Hautes  Etudes  Commerciales  du  Nord 
Groupement  Européen  des  Caisses  d'Epargne 
Groupement  Européen  des  Entreprises  d'Electricité 
Halarose  of  Oxford 
Handelsblatt  -  Wirtschafts  und  Finanzzeitung 
Haour  Georges  (professeur  ) 
Hellenic  Republic^ Ministry  of  Development 
Helsinki  Inventors'  Association 

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G.P  Banque 

EDHEC 
GECE"  " 
Eurelectric 

Business  Administration 

Innern  & 

fur 

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Landwirtschaft, 

Helsinki  School  of  Economics 
Hessisches  Ministerium  des 
Hoescn  -  Krupp,  AG 
Huber  Edelstahl  _  _ 
lb  Andersen  Industri 
IBM  DeutschTand 

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HEKE 

Forsten, 

Ideon  Centre 
Industrie  und  Handelskammer  zu  Aachen 
Industry  Research  and  Development  Group 

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Infobrief 
Innovation  Relay^ Centre  -  Northof  England 

* 

Innovatop 
Institut  Catala  de  Tecnologia 

* 

Institut  Français  du  Pétrole 
Institut  National  de  Recherche  Agronomique 
Institute  for  Managment  of  Innovation  a_hd_Jj2chnology 
_ 
Institute  for  Material  Researcn  -  Universitair  Centrum  Umburgs_ 
Institute  for  Strategic  Consumer  Research 
Institute  of  Professional  Representatives  before  the  European  Patent  Office 

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IHK  zu  Aachen 

IRC  North  England 

ICT 

j FP 
j N RA 
IMIT 

SWOKA 

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Institution  of jCivH |ngeneers 
instîtuto  de  Desevoivimento  e  inovacao  Tecnologica  ao  Minho 
Instituto  Superior  de  Economia  e  Gestao 
Instituto  SuperiorTecnico 
Instituut  voor  Maatschappelijke  Innovatie 
Instrument,  Measuring,Technique  Servicing  and  Trading  Company  Limited 

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IDITE  Minho 
CEDE 
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Inter  Primo 
International  Federation  of  Science  Editors 
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Istituto  di  studi  sulla  ricerca  e  documentazione  scientifica- _Consiglio i ISRDS  -  CNR 
Istituto  Sperjmentale  per  la  Frutticoltura 
Jular 
Kiel  Institute  of_World  Economics^ 
Knight  Peter  (consultant) 

Impotaçào  e  comércio  de  madeiras,  Lda 

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IFSE 

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France 

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Belgium 

Belgium 
Belgium 
Un.  Kingdom 
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Luxembourg 
France 
Un.  Kingdom 
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Finland 

Portugal 
Germany 

Germany 
Germany 

Spain 

Spain 

France 
Un.  Kingdom 
France 

Un.  Kingdom 
Denmark 

France 
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Un.  Kingdom 
Germany 
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Finland 
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Germany 
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Koff 
Koninkliike  Hoogovens 
Kovacs llona  (professeur) 
Kraft  Malerwerkstàtten Gmbh 
Kredietbank 
Kreditanstalt  fur Wiederaufbau 
Krog Iversen &Co 
Labbri Mirko.(project manager) 
Lacave Michel et  Dei Castillo Jaime  (consultants! 
Lahure Bernard (consultant) 
Lancashire Enterprises 
Lancaster  Centre for the Study of  Environmental  Change 
Landesbank  Berlin 
Larsson John  (consultant) 

* * 

Library and Information Commission 
Lloyds f SB Group 
LPE JD  Databank  (Lex Poot) 
Lyonnaise des Eaux 
Magneti Marelli 
Managment  Construction and Engineering 
Marks & Spencer 
Maroushkina  Maria  (consultante) 
Medinova ÀB 
Merck KgaA Darmstadt 
Micrel 
Minister of  Education of  Lithuania 
Mission of the  Republic of  Hungary to the  Eurooean  Communities 
M.O.A.  Développement 
Monte deiPaschi di Siena 
Mordchelles Régnier G.  (consultant) 
Morgan Bruce Sollicitors Tavocats) 
Morin  Jacques (consuitant) 
Mulcahy Noel (professor) 
Multi-Poles 
National Committe for  Technological  Development 
NatïônaiSchooï  of  Public Health  _* 
Nestlé 
Nethold Finance 
Nonhoff  Dieter  (consultant) 
North East innovation Center  Company, Ltd 
North Tyneside Council 
Nuclear  Research Institute  -  Oepanment  of  Nuclear  Technology 
Nutek 
nv Bank Nederlandse  Gemeenten 
Observatory  on Agricultural  Research Systems 
Oie Flensted Holding 
Omega Generation 
Organisation de Copération et de Développement  Économiques 
ôsterreichische Patentanwaît Kammer 
O t a t o n K Y ~ " ~^ 
Otto Versana 
P.T. Holding ""  "•""™1_. ZIII1ZZZZZI1IZ......"...1Z"I"I- Z 
Pateloup Monique  (consultante) 
Patent-6ch  Registreringsverket 
Pechinev 
Pentacie 
PFI-Prûf- und Forschungsintitut  fur die Schuhherstellung 
Piastre Robert  (inventeur) 
Preussag AG 
Preussenelektra, AG 
Qazar  7 
Rank Xerox 
Renault 
Repsoi, S.A 
Researcn ana Consultancy Services tor Food. Land, ana  Environment 
RETI NET  - University of  Salford 
Reunanen Matti -  Kunnioittaen (consultant) 
Roma Ricerche 

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Smithkline  Beecham 
SNIA  Ricerche 
Sociedad Êstatal para ei Desarolio del Diseho industrial 
Société de Caîcui Mathémathique 
Steelcon Chimney,  Esbjerg 
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Stephens David Huw  (consultant) 
STOAS_  *  ~ 
StokisO_if_ 
Stratégie et  Mutation  (consultants) 
Strategiscne  Studien der Transtormationsprozesse.  Forschung una  Beratung 
Studio  Tempo, s.r.l 
Swedish Inventor  Association 
Swiss Federal Institute  of  Technology  at  Zurich 
Swissair 
Tampere  University of  Technology 
Tech'Innove  Exapnsion 
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f ËKÊS - Teknologian  Kehittamiskeskus 
Télédiffusion de France 
Telefonica 
The CIM Institute 
The College of Management  • 
Thomson  Multimedia 
Totai 
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Toy  Manufacturers  of  Europe 
Trinity  College - Dublin 
Unibus Rutertratik 
Unilever 
Union des Assurances de Paris 
Union des Banks Switzerland's 
Union des Confédérations de l'Industrie et des Employeurs dMEurooe 
Union Européenne de l'Artisanat et des Petites et  des Moyennes  Entreprises  UEAPME 
Union Française des Designers industriels 
Union Internationale des Associations et organismes techniques 
Unioncamere  Piemonte 
Unité de Formation et  de Recherche en Science Sociales 
UniversidadI Nacional de Jducation a Distancia 
Universidade Aberta 
Ùniversidade Autonoma  de Lisboa 
Université degli Studi di Pavia. Dip.to di Elettronica,  Prof. Franco  Maloberti 
Université di Bologna 
Université de Innsbruck 
Université de Lund 
Université deJVilnius 
University College Gaiway 
University of  Hamburg 
University of  Hamlstadt - ^gsl^nHalmstadt 
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University of  Gôteborg 
University of  Iceland, Scientific  and technical Information  Services 
UniversityVf  Sheffield  (National transputer  Support  Ce_ntre> 
University of  Sussex^^cience Poiicy Research Unit 
University of  Sydney - Graduate  School of  Business 
University of Warwick 
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Veba, AG 
Verbindungsburo des Landes Sachsen-Ànhalt bei der  Europàische  Union 
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Victoria  HoldingJ/ersicherung, AG 
Vienna Ëconomics_ and BA University  __ * 
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Volkswagen 
Volvo ÀB 
Vuman technology  Services 

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Welsh Development  Agency 
Wenzel Joachim  (avocat) 
Wilson Roger  (consultant) 
Wirtschaftskammer  Osterreich 
Yorkshire  and  Humberside  Regional  Technology  Network 
Zentrum  Mechanisierung  &Technologie 

WDA 

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Un,  Kingdom 
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jwr  w 

2.1-B-  Reaction  of the  Governments 

(Summary  established  by  the  Commission  services) 

*%4 

THE AUSTRIAN  GOVERNMENT'S  RESPONSE TO THE GREEN PAPER ON  INNOVATION 

The  Austrian  government  welcomes  the  GP!  ana  finds  it  positive  to  see  a  broad 
definition  of  the  innovation  concept  being  used,  which  recognises  the  importance  not 
only  of  technological  factors  but  also  issues  such  as  organisation,  management, 
for  economic 
participation,  qualifications  and  culture, 
competitiveness,  jobs  and  societal  problems. 

innovation 

important 

is 

From an Austrian  perspective,  social  innovation  snouid  be given  more  emphasis,  with 
an  accent  on  the  relationship  between  technology,  innovation  and  employment. 
However,  future  actions  should  take  into  account  the  qualified  work  in  innovation 
policy  and  employment  of  the  different  organisation  in  the  Member  States,  as  well 
as, the  studies  of  the  OECD. 

The  debate  raised  by  the  GPI  is  a  process  which,  in  Austria,  will  be  combined  with 
finalising  a  national  technology  policy  concept.  The  Austrian  Government  welcomes 
the  fact  that  innovation  has  gained  a  central  position  in the  preparation  of  guidelines 
for  the  5°  FP,  and  propose  that,  at  Community  level,  the  INNOVATION  programme 
should play  a leading  and  co-ordination  roie. 

Subsidiarity 

The  principle  of  subsidiarity  must  be  the  starting  point  for  all  considerations  with 
regard  to  education,  taxation,  legal  and  other  institutional  characteristics.  Caution 
should  be  raised  against  creating  new  bureaucratic  procedures  with  which  to  tackle 
the  individual  Action  Lines  of  the  GPI.  Pragmatism  and  recognition  of  the  crucial  role 
played  by  individual  economic  actors  should  be the guiding  principle. 

Task  Forces 

Task  forces  are  considered  useful  however,  attention  should  be  paid  to  the  financial 
contribution  of  the  Union.  Transparency  and  Member  States'  participation  in  decision 
making  must  be secured 

SMEs 

The  'supply  side'  must  be  better  adapted  to  the  real  technology  transfer  and 
innovation  needs  of  SMEs.  Useful  pointers  in this  direction  would  be  to  consider  the 
notion  of  'continuous  innovation',  better  use  of  powerful  IT  instruments,  acceptance 
of  the  long  term  perspective  from  idea  to  commercial  realisation,  and  adaptation  of 
the  support  programmes  accordingly.  (The  contribution  of  the  CREST  Working  Group 
on SMEs could  usefully  influence  further  work  on the GPI). 

Orientation of R&D  towards  innovation 

The Austrian  government  is also  convinced  that: 

innovation  should  be given  a high  priority  in general in the  Framework  Programme; 
important  as  the 
innovations  are  at 

least  as 

• 
•  organisational  and  structural 
exploitation  of  inventions; 

I  •v 

* 

a  European  innovation  A w a ra  ana  oossioie  PR  activities  snouid  be  organisée  by 
cne  Commission  m  oraer  TC  oromote  innovation  among  SMEs,  as  well  as.  the 
general  public. 

The  Austrian  government 
technology  w a t c h. 

is  sceDticai  on  the  -oie  of  a  centraiiseO 

institution 

tor 

Human  resources 

for 

innovation 

The  government, 
resources,  notably: 

in  principle,  supports  me  GPI  proposais  concerning  human 

the  importance  of  teaching  technoiogicai  themes  in  schools; 
the  need  for  better  capabilities  in  communication  and  co-operation: 
the  promotion  of  a  better  image  of  scientific  and  technological  disciplines: 
life  long  learning; 
more  attention  to  innovation  management  in  education 
the  enhancement  of  knowledge  transfer  and  innovation  through  improved  mobility 
of  students,  researchers  and  technicians/engineers; 

improved 

financial  conditions 

for 

innovation 

For  the  Austrian  government  a  distinction  shouia  be  made  between  Business  Angels 
(mainiv  for  smali  companies),  venture  caoitai  (for  medium  sized  firms)  and  E A S D AQ 
(for  larger  firms).  Banks  need  to  develop  a  culture  oriented  t o w a r ds  innovation  and 
risk.  More  generally  there  is  a  need  for  stronger  coherence  and  n e t w o r k i ng  a m o n g st 
finance,  management,  organisation, 
different  services 
technology,  etc..  The  instruments  of  the  Structural  Funds  could  be  more  effectively 
directed  t o w a r ds  innovation. 

technology 

transfer, 

for 

Fiscal  subsidies  are  limited  by  national  budget  constraints  and,  in  any  case,  t h ey  are 
subject  to  the  subsidiarity  principle. 

Create  an  environment 

favourable 

to 

innovation 

• 

It  is  better  to  reduce  barriers  to  innovation  than  to  create  inefficient  assistance  for 
overcoming  t h e m. 
•  The  setting  up  of 

firms  and 

innovative  projects  should  be  simpler:  a  general 
locai.  regional,  national  and  C o m m u n i ty 

improvement  of  co-ordination  b e t w e en 
levels  is  necessary. 

•  A  culture  of  (de)regulation  is  required  w h i ch  takes  into  account  the  needs  and 

possibilities  of  entrepreneurs. 

•  The  strategic  use  of  patent  is  lacking  ana  should  be  made  an  element  in  patent 

policy  at  national  level  and  in  the  European  Patent  Office. 

•  Harmonisation  of  patents  fees  and  lower  fees  for  SMEs  are  recommended. 
•  Use  of  licences  as  a  marketing  instrument  should  be  better  promoted. 

&  n 

DANISH  GOVERNMENT'S  RESPONSE TO  THE  GREEN  PAPER  ON  INNOVATION. 

for 

in  policies 

researcn  and 

The  Danish  Government  welcomes  the  initiative  of  giving  a  more  central  role  to  the 
innovation  perspective 
The  subject  of 
Innovation  has  been  topical  in  Denmark.  The  cultural  context,  social  ana  institutional 
innovation,  regara  for  the  protection  of  natural  and  energy  resources,  as  well  as 
information  society 
the  Danish 
Government  welcomes  a  discussion  of  concrete  actions.  However,  in  its  opinion 
there  is  a  need  for  better  use  of  analytical  tounaation  (OECD  ana  EU  studies,  for 
initiatives.  The  Danish 
example)  to  harness  a  coherent  strategy  Tor  innovation 
Government  agrees  with 
the  GPI.  with  certain 
five  general  objectives  of 
the 
reservations: 

impacts,  are  all  part  of 

the  context 

in  which 

industry. 

Community  R&D  policy  should  not  be  confounded  with  narrow 
objectives 

industry  policy 

Improving  the  access  to  finance  should  primarily  be seen  as  a national  concern 

In  general,  the  actions  at  Communitv  level  must  respect  the  principle  of  subsidiarity 
and therefore  be  justified  by  their  European  dimension,  as  for  instance  in the  case  for 
standards,  IPR or  especially  expensive  R&D. 

The following  specific  points  are  raised  witn  regard  to  the  GPI  action  lines. 

Technology  Watch  will  become  more  and  more  important  for  decision  makers  in 
the  public  and  private  sector.  Community  efforts  should  aim  to  develop 
cooperation  and  methodology  in  this  discipline  between  the  various  national 
institutes. 

Priority  areas  for  EU  R&D  should  be  defined  with  more  attention  to  the  demand 
side. 

Education  must  remain  the  concern  of  each  individual  MS  however  whilst 
rooted  in  the  traditions  of  MS  culture  it  could  incorporate  a  European  mutual 
recognition  of  skills  and  merits. 

Whilst  agreeing  with  the  benefits  of  mobility,  such  schemes  must  not  become 
obligatory.  Noting  that  the  TMR  programme  has  not  achieved  a  sufficiently 
industry  orientated  dimension,  such  schemes  must  have  different  and  realistic 
means  of  meeting  different  needs. 

Special  attention  is  needed  towards  administrative  and  economic  barriers  for 
SME  participation  in  RTD  programmes.  The  Coordination  of  the  Commissions 
own  instruments  such  as  Relay  Centres  and  CRAFT  is  worth  considering. 

Fiscal  instruments  should  not  be  introduced  at  Community  level  but  increased 
transparency  of  innovation  and  company  related  credits  would  be  welcome. 

The  primary  aim  of  the  Danish  Governments  Industrial  policy  is  to  encourage 
innovation  in  enterprises,  especiailv  in  SMEs  and  at  regional  level.  SMEs  wno 
generally  suffer  from  a  lag  in  comoetencies  and  management  remain  a  major 

*H 

concern  and  internal 
issues in this  regard. 

reinforcement.  networK  and  clusters  are  cited  as  key 

The  objective  of  developing  'Economic  intelligence'  is  an  area  in  which  the 
Danish Government  would  be  keen to  develop  further  experience. 

1* 

THE  GERMAN  GOVERNMENT'S  RESPONSE TO  THE GREEN  PAPER  ON  INNOVATION 

The  German  Federal  Government  welcomed  the  publication  of  the  Commission's  GPI 
'Innovation  Debate'  had  been  going  on  in  Germany  for  a 
and  reported  that  the 
considerable  time.  There  is  a  strong  recommendation 
that 
innovation  issues  should  be  managed  at  Member  State  and  Regional  level  for  best 
It  was  also  highlighted  that  the  exchange  of  information  and  experience 
results. 
between  Member  States  was  of  vital  importance. 
It  was  felt  that  the  Commission 
could  undertake  the  coordination  to  initiate  such  dialogues. 

from  this  response 

It  made  particular  reference  to  the  following  German  initiatives  the  experience  of 
which  it  felt  could  be of  value  to  the  European  innovation  debate: 

•  The  Koopman  report  deals  with  the  formal  presentation  and  effectiveness  of 

regulations 

•  The  INSTI  programme  (Innovationsstimulierung  der  Deutschen  Wirtschaft  durch 
wissenschaftlich-technische  Information)  the  aim  of  which  is  to  help  stimulate  the 
German  economy  by  providing  relevant  scientific  / technical  information 

•  The  Delphi  technology  foresight  initiative  has  operated  successfully  at  national 

level 

Each  Member  States'  education  system  is  unique,  however  it  should  contain  basic 
It  should  equip  those  that 
Information  Technology  Skills,  legal  /  commercial  studies. 
have the  ability  and  will  to  pursue  individualised  career  paths. 

Technology  watch  activities  are  more  successful  if  carried  out  at  national  level  and 
Community  coordinated  comparisons  made.  Ultimately 
the  decisions  on  what 
technologies  are of  most  important  are the  responsibility  of  each  individual  business. 

Regular  Innovation  surveys  in  each  MS  were  not  were  not  recommended  at  this 
point. 

The  German  Government  agrees  with  issues  relating  to  intellectual  property  and 
It  suggests  that 
points  out  that  patents  are  often  a  key  factor  in  obtaining  finance. 
to  illustrate  to  the  public  the  true  cost  of  patent  infringement,  estimation  of  the  social 
costs  should  be 
industry  and  subsequent 
It  agrees  in  principle  with  Community.  In the  field  of  education,  wide 
unemployment. 
use of  utility  models. 

illustrated  e.g. 

loss  of  profit 

for 

It  advocates  greater  transparency  between  MS  on the  content  of  courses  rather  than 
concentrating  on the  mutual  recognition  of  the  end product,  e.g.  qualifications. 

In  order  to  enhance  the  mobility  of  researchers  and  students  it  suggests  that  EU 
innovation 
structural  funds  be  used  to  employ  graduates  or  school 
assistants. 

leavers  as 

The  simplification  of  administration  procedures  was  welcomed  and  it  was  suggested 
that  a  seminar  with  industrial  participation  should  be  established  to  'Brain  Storm'  on 
how  to  simplify  procedures. 

*lb 

Whilst  in  agreement  with  the  conceot  mat  researcn  efforts  snouid  be  better  directed 
towards 
innovation,  care  must  be  taken  mat  this  does  not  hinaer  creativity  or 
decrease  the  level  of  basic  science  in  particular,  at  Community  level. 

•  The  EU  R&D  programme  should  concentrate  on  a  few  specific  areas  of  strategic 

importance  to  Europe's  future: 

•  EU  R&D  should  be  reserved  for  larger,  nigh  risk  projects  that  could  not  be  tackled 

at  national  level: 

•  The  objectives  of  each  R&D  programme  snouid  be  cieariy  defined  with  particular 

emphasis  on  their  impact  on  the  areas  of  strategic  importance: 

•  EU Structural  Funds  to  be targeted  for  innovative  means: 

•  There 

is  also  agreement  with 

the 

target 

that  each  MS 

increases 

its  R&D 

expenditure  to  3%  of  its  GDP 

The  German  Government  agrees  that  the  benefits  of  innovation  need  to  recognised, 
particularly  by  the  gênerai  public  and  ceiieves  that  the  suggestions  in  the  GPI  do  not 
go  far  enough.  It  suggests  the  following  actions. 

• 

the  impact  of  the  EU  R&D  programmes  to  day  to  day  life  should  be  illustrated  to 
the  public. 

•  examine  the  possibility  of  getting  a  group  of  PR  consultants  to  put  in  place  a 
series  of  practical  measures  to  Dromote  a  positive  image  of  innovation,  possibly 
using  modern  IT  methods. 

• 

In future  such  measures  should  accompany  the  Framework  Programmes. 

*r  ?1 

THE  SPANISH  GOVERNMENT'S  RESPONSE  TO  THE  GREEN  PAPER  ON 
INNOVATION. 

General  comments 

The  Spanish  Government  welcomes  the  Green  Paper. 
It  approves  the  horizontal  and 
integrated  approach  of  the  Paper  and  shares  the  need  to  articulate  a  European 
strategy  to  foster  innovation.  Although  the  Spanish  Government  shares  in  general 
the  analysis  undertaken  of  the  situation  in  Europe,  it  regrets  that  the  Paper  does  not 
fully  exploit  certain  pointers  given  in  the  "White  Paper  on  Growth,  Competitiveness 
and  Employment",  such  as:  the  economic  fracture  between  large  companies  and 
SMEs, the  social  fracture,  etc.  In particular  the  poor treatment  given to  innovation  as 
foundation  of  a  long  standing  technological,  social  and  economic  cohesion,  is 
considered  inadequate. 

The  Green  Paper  limits  itself  to  addressing  the  main  obstacles  and  challenges  to 
innovation  without  a  proper  framework  proposal  to  foster  innovation. in  the  E.U. 
Finally  more  attention  should  be  given  to  initiatives  to  promote  technology  transfer 
among  regions  and  (traditional)  sectors,  to  strengthen the  competitiveness  of  SMEs. 

Specific  comments 

/.  Route of action  1: 

to develop technology monitoring and foresight. 

The  role  foreseen  for  the  Institute  for  Prospective  Technological  Studies  (IPTS) 
should  be  wider. 

2.  Route of action  2: 

to better  direct research effort  towards innovation. 

•  The  Programme  Committees  should address task  force  activities. 
•  Early  SME  participation  in R + D activities,  not only  on application  results. 
•  Among 

for  the  monitoring  and  evaluation  of 

the  parameters 

improvement  of 

research 
living 

programmes,  social  and  economic  cohesion  and 
conditions  should  be included. 

3.  Route of action  4: 

to further  the mobility of students and researchers. 

Actions  should  be  designed  to  attract  (and  retain)  skilled  human  resources  to  less 
favoured  regions. 

4.  Route of action  5: 

to promote recognition of  the benefits  of innovation. 

Traditional  media  (T.V.,  radio,  press  ...)  should  be  used  to  promote  the  public 
awareness  in this field. 

5.  Route of action  7: 

to set  up a fiscal regime beneficial to innovation. 

In  the  context  of  public  deficit  reduction,  a  previous  thorough  analysis  of  the 
budget  cost  of  new  schemes  should  be compulsory. 

6.  Route of action  8: 

to promote intellectual and industrial property. 

Research  centres  (public  and private)  should also be the  beneficiaries  of  promotion 
policies. 

"%% 

7.  Route  of  action  9: 

to  simp/if y administrative  procedures. 

The  Commission's  views  are fully  shared. 

8.  Route  of  action  12:  to  encourage  innovation  in  enterprises  (SMEs)  and  strengthen 

the regional  dimension  of 

innovation. 

The  necessary  inter-regional  cooperation  and  the  coordination  role  of  national 
administrations  should  be  strengthened. 

9.  Route  of  action  13:  to  update  public  action  for 

innovation. 

Direct  public  support  instruments  should  also  be encouraged. 

innovation  policies  should  be  addressed  at 

Finally 
State/Governments,  as  the  appropriate  political  forums  to  incorporate 
issues  into  Council  Minister's  agendas. 

level  of  Heads  of 
innovation 

the 

""39 

THE FINNISH  GOVERNMENT'S  RESPONSE  TO  THE GREEN PAPER  ON  INNOVATION. 

The  Finnish  Government  welcomed  the  GPI  ana  wanted  to  share  the  experience  it 
has  gained  at  Member  State  level  with  the  Community  and  to  actively  participate  in 
the  follow  up  work  associated  with  this  publication.  The  following  current  initiatives 
interest  to  other 
in  Finland-  have  proven  particularly  successful  and  may  be  of 
Member  States. 

(i)  National  High  Technology  Mentor  Programme  has  been  introduced  and  tested 
with  promising  results.  Experienced  industrialists  rate  interested  SMEs  and 
issue  a  "European  Venture  Capital  Certificate"  to  facilitate  discussions  with 
financiers.  This  approach  has  been  prepared 
the 
Commission. 

in  co-operation  with 

(ii)  Kera  (the  Regional  Deveiopment  Fund)  has  recently  introduced  a publicly  funded 
low  security 

small 
requirements  for  new  companies,  it  has  been very  well  received  by  SMEs. 

(under  20,000ECU)  quick 

facility  with  very 

loan 

The  Finnish  Government  supports  the  rapid  increase  of  R&D  expenditure.  Europe 
cannot  compete  with  Japan  and  US  unless  this  expenditure  reaches  approximately 
3%  of  GDP.  To  enable  favourable  deveiooment  of  a  European  innovation  policy  and 
promote  the  industrial  competitiveness  of  Europe;  the  R&D  expenditure  should  be 
increased  both  on  a  national  level  and  European  level.  The  ideas  on  improving 
European  innovation  processes  must  be  incorporated  into  the  fifth  FWP  to  ensure  its 
impact  on  European  competitiveness:  There  is  a  need  for  external  assistance  in 
evaluating  innovation;  making  market  analysis  and  in  other  issues  where  the  SMEs 
have  insufficient  competence. 

It  supports  the  establishment  of  the  EASDAQ  and  suggests  that  technology  rating  at 
a  European  level  be  experimented  with  and  such  knowledge  disseminated. 
It  also 
recommends  that  banks  should  develop  skills  and  knowledge  about  the  technologies 
and  the  specific  financing  issues  that  arise  for  technology  based  companies.  TEKES 
is  about  to  embark  on  the  use  of  a  new  financing  instrument  called  an  equity  loan. 
This  loan  is  calculated  as  the  company:s  own  equity  capital,  thus  improving  the 
company's  balance  sheet.  Use  of  regionai  development  funds  should  be  directed  to 
R&D  projects  at  the  national  level. 

It  does  not  support  the  role  of  the  IPTS  in  technology  monitoring  and  would  prefer  to 
see current  national  systems  used  ana  experience  exchanged. 
Innovation  in  the  service  industry  should  be  encouraged.  The  service  sector  should 
be  included  in  the  innovation  financing  systems  and  be  treated  on  equal  level  with 
industry,  as  it  is  at  least  as  important  for  employment. 

The  following  elements  relating  to  innovation  should  be  carried  out  at  Community 
level: 

(i)  preparation  of  common  standards,  directives  and  global  agreements, 

(ii)  mechanisms  and  cooperation  forums  that  help  MS  and  their  enterprises  to 

learn from  the  experience  of  each  other, 

(iii)  projects  that  are  so  wide  or  expensive  that  one  country  alone  could  not 

undertake  them. 

So 

(iv)  new  common  legislative  and  regulatory  elements  (e.g.  European  Company 

Statute), 

(v)  coordination  of  EU  innovation  policy  activities  with  other  Union  measures 

(e.g.  structural  funds,  industrial  policy). 

j/f 

COMMENTS  BY  THE  FRENCH  AUTHORITIES  ON  THE  GREEN  PAPER  ON 
INNOVATION 

The  Green  Paper  on  Innovation  is  a  useful  contribution  to  public  depate  and  an 
undogmatic  statement  on the  important  subject  of  innovation. 
Innovation and  subsidiarity 

Innovation  is  a  good  example  of  a  clear  application  of  subsidiarity  (innovation  is  first 
and  foremost  the  responsibility  of  companies  and  founders  of  companies,  since  it  is 
they,  not  governments,  which  have  good  ideas).  European  Union  involvement  in 
innovation  is  justifiable  primarily  for  companies  active  on  the  European  and  world 
markets.  Access  for  SMEs  to  European  programmes  needs to  be improved. 
Analysis of  the  Green  Paper 

In order  to  improve  the  private  financing  of  innovation  in  SMEs.  France  has taken  risk 
capital  support  measures  such  as  the  creation  of  the  Nouveau  Marché  (1996). 
Studies  of  tax  reforms  aimed  at  innovative  companies  are  under  way,  together  with 
an  incentive  for  pension  funds,  once  set  up,  to  invest  some  of  their  resources  in 
innovation. 

France  emphasises  that  it  would  be  in  favour  of  a  Community  patent  (ratification  of 
the  1992  agreement  on the  Community  patent). 

Simplifying  administrative  procedures  is still  a  matter  for  the  Member  States. 
The  Commission  analysis  of  the  inadequacv  of  research  input  is  pessimistic. 
In 
France,  large  sums  have  been  invested  in  research  at  both  national  and  Community 
level. 

France  feels  that  basic  research  should  be  subsidised  by  the  State  in  order  to 
guarantee,  inter  alia,  a  link  between  basic  research  and  the  development  of  new 
products. 

France  regrets  that  the  Green  Paper  does  not  cover  profit-sharing  by  researchers  or 
nursery  schemes. 

Action  paths  of  the  Green  Paper 

France  notes that  the  Green  Paper  lacks  specific  proposals  and  practical  action  which 
could  be taken  by the  Commission. 

The  Green  Paper  makes  little  mention  of  the  Framework  Research  and  Development 
Programme,  and  the  over-rigid  separation  between  Action  3.  "Dissemination  and 
exploitation  of  results"  and  Action  1,  "Implementation"  of  research  programmes,  is 
regrettable.  Better  coordination  between  these  two  initiatives  would  be  desirable  in 
the  Fifth  Framework  Programme. 

France  also  calls  for  more  clarity  in  the  objectives  of  the  Framework  Programme, 
which  should  promote  our  competitiveness  in  science  and  technology  and  cannot 
simultaneously  play  a specific  coordination  role  (which  is more  a task  for  the  ERDF). 
France  welcomes  the  excellent  Task  Forces  initiative. 

H 

France  has  more  reservations  about  the  emergence  of  new  observatories  such  as  the 
Innovation  and  Rural  Development  Observatory''  and  the  "European 
"European 
Observatory  of  Innovative  Practice  in Vocational  Training". 

Strengthening  the  Seville  Institute  is  not  a  priority.  On  the  other  hand,  France 
suggests  that  more  could  be  made  of  the  forecasting  efforts  of  the  Member  States, 
such  as  "Technology  Foresight"  in  the  United  Kingdom  and  "100  Key  Technologies" 
in France. 

France  wishes  the  European  Union  to  act  as a coordinator  and to  ensure  that  there  is 
consistency  between  public  initiatives  and  private  input  which  will,  within  the 
Framework  Programme,  support  the 
industrial  research  financed  jointly  by  the 
Commission  and  manufacturers  or  public  laboratories.  The  Commission  could  thus 
give  basic  research  a  genuinely  European  dimension  and  boost  the  development  of 
key technologies. 

*f 

9% 

THE IRISH  GOVERNMENT'S  RESPONSE  TO  THE GREEN PAPER  ON  INNOVATION. 

"he  Irish  Government  welcomed  the  GPI  ana  agreea  in  principle  with  the  main  thrust 
of  its  contents.  The  following  points  illustrate  the  Irish  Government's  point  of  view 
in  relation  to  specific  items: 

(i)  There  is  a  limit  to  the  capacity  of  Member  States  to  mount  extensive 
Technology  Watch  exercises,  thus  it  wouid  be  bénéficiai  if  this  activity 
could  be  carried  out  at  the  EU level  concentrating  on  'technology  push' 

(ii)  Task  Forces  as  currently  presented  would  oniy  stimulate 

in 
It  is  suggested  that  the  method  of  selection  of 

innovation 

certain  sectors  or  countries. 
Task  Forces  should  reflect  the  needs  of  ail  Member  States. 

(iii)  The  importance  given  to  SMEs 

in  the  GPI  is  welcomed  and  the 

Irish 
Government,  under  its  EU  Presidency  has  been  instrumental  in  having  a 
Working 
Group  of  CREST  establishea  to  examine  ways  of  encouraging  greater  SME 
participation  in  EU  researcn  programmes.  Whilst  a  number  of  Routes  of 
action  would  also  facilitate  improving  conditions  for  SMEs,  it  was  stressea 
ideas  ana 
that  a  more 
knowledge 
Current 
policies  in  Finland  and  Israel  were  cited  as  examples. 

interventionist  policy  was  required 

into  the  commercial  phase. 

in  research 

to  extract 

institutes 

(iv)  The  perception  of  science,  technology  and  innovation  must  be  improved 
amongst  decision  makers,  industry  and  the  public.  The  whole  concept  of 
learning  needed  to  be  instilled  as  part  of  the  innovation  process.  Training 
was  considered  too  specific  an  activity  to  achieve  this  mentality. 

(v)  Financial  incentives  were  considered  most  critical  and  proposals  to  establish 
EASDAQ.  bank  guarantees  in  favour  of  innovative  SMEs  by  the  EIF  and  the 
creation  of  multinational  seed  capital  funds  were  welcomed 

(vi)  The 

technology 

importance  of 

it  was 
suggested  that  a  dedicated  set  of  actions  be  drawn  up  to  emphasise  that 
the  absorption  of  tecnnoiogy,  regardless  of  whether  it  was  created  inside 
Europe  or  outside  can  often  be  a  more  relevant  solution  for  firms  than 
internal  R&D. 

transfer  was  emphasised  ana 

(vii)The  STIAC  (Science,  Technology  and  Innovation  Advisory  Council)  review 
to 

linkages  and  networks,  particularly 

the 

emphasised 
overcome  the  disadvantage  of  small  scale 

importance  of 

X ^y 

THE ITALIAN  GOVERNMENT'S  RESPONSE TO  THE GREEN PAPER  ON  INNOVATION. 

The  Italian  Government  welcomed  the  Green  Paper  on  innovation  and  agreed  with  its 
conclusion  and  proposed  action. 
It  feeis  that  the  GPI  and  the  Synthesis  Conference 
in  Rome  (30  May  1996)  were  useful  opportunities  to  raise  awareness  on  various 
matters  related  to  innovation  in  Europe. 

The  Italian  Government  agrees  that  investments  in  science  and  technology  should  be 
made  according  to  the  needs  of  society  and/or  industry. 

It  suggests  that,  apart  from  the  barriers  to  innovation  considered  in  the  GPI,  future 
action  should  take  into  account  sectoral  barriers  to  innovation,  i.e.  those  relating  to 
specific  sectors  of  industry  such  as  assembly,  manufactured  goods  production  and 
mature  industries. 

It  suggests 
European  Union  intellectual  property. 

that  particular  attention  be  paid  to  encouraging 

the  protection  of 

3T  9\ 

THE  NORWEGIAN  GOVERNMENT'S  RESPONSE  TO  THE  GREEN  PAPER  ON 
INNOVATION. 

The  Norwegian  Government  welcomed 
innovative 
capacity  of  Europe.  The  following  points  highlight  its  opinions  on  critical  factors 
emanating from  the  debate. 

to  enhance  the 

initiative 

this 

(i)  Efforts  on  technology  watch  should  be  better  coordinated  ana  the  work  of 

institutes  like  iPTS  should  be  wideiv  disseminated. 

(ii)  Further  work  in  the  area  of  statistical  innovation  surveys  is  required.  Such 

work  should  be  more  closeiv  linked  to  OECD  work. 

(iii)  The  Community  should  play  a  key  role  in  developing  new  and  transparent 

skills  recognition  systems 

(iv)  The  development  of  a  European  capital  market.  EASDAQ.  was  welcomed 

(v)  Concerned  at  European  companies  moving  their  R&D  activities  outside  of 
Europe  due  to  inhibiting  legislation  e.g.  intellectual  property  iaw.  Further 
initiatives  in  this  area  should  be  closely  linked  to  OECD  &  WTO  initiatives 
and  coordinated  between  national  and communitv  levei. 

(vi)  Exchange  of  experience  in  the  field  of  regional  conditions  for  innovation 

should  be  strengthened 

The  Norwegian  Government  points  out  the  fact  that  skills  to  analyse  and  identify 
It  also 
economic  intelligence  are  in  short  supply  and  need  to  be  strengthened. 
stressed  that  a  European  innovation  policy  for  the  21st  Century  must  include  a 
deeper  analysis  of  the  innovative  capacity  of  the  service  industry. 

**  a  / 

THE  PORTUGUESE  GOVERNMENT'S  RESPONSE  TO  THE  GREEN  PAPER  ON 
INNOVATION 

1  Policy  of  Innovation 

The  tormuiation  of  the  "European  paraaox"  involves  a  iinear  ana  out  o f d a te  vision  ot 
innovation.  The  R&D  ooucies  and  a  possible  C o m m u n i ty 
the  phenomenon  of 
inaustnai  Policies  ana  of 
innovation  Policy  can  neither 
Enterprise  Policies,  nor  solve  maior  orooiems.  such  as 
the  distribution  ana 
the 
demonstration,  w h i ch  are  of  a  prime  necessitv 
transfer  of  resources  of  the  R&D  programmes  towards  a  Policy  of  Innovation  appears 
to  be  missing  viability  at  the  political  and  economic  levels. 

tne  SMES.  For  Portugal, 

the  gaps  ot 

remeav 

the 

for 

innovation,  g r o w th  and  employment. 
the  problems  of 

2.  G r o w th  and  Employment  -  social  and  organizational  Innovation 
Portugal  considers  that  the  green  Paper  tackles  only  in  a  limited  w ay  the  problem  of 
technologies 
the  links  between 
create  n ew 
w h i ch  can  solve 
opportunities  for  the  companies,  but  their  innovative  application  in  w a y,  including  the 
In  this  respect.  Portugal  also 
new 
wishes 
the 
revitalization  of  the  rurai  areas,  teacning  and  the  training,  health  and  proolems  of  the 
3rd  age. 

forms  of  social  and  organizational 
implementation  of  actions 

It  is  not  the 
the  organizations,  or  w h i ch 

innovation. 
referring 

t o wn  planning  and 

the 

to 

to 

3.  Financing 
Portugal  considers  that  the  creation  of  a  framework  favourable  to  the  operation  of  a 
the  creation  of 
European 
European  venture  capital  companies 
innovative 
goods  and  services.  At  the  same  t i m e,  it  gives  its  assent  for  the  creation  of  a  market 
of  the  type  EASDAQ. 

financial  market  should  be  envisagea,  bv  encouraging 

to  finance  the  companies  offering 

4.  Taxation 
In  order  to  be  able  to  create  a  system  of  tax  incentive  articulated  w i th  the  national 
systems  of  direct  aid,  Portugal  suggests  that  action  should  be  taken  at  the  level  of 
the 
increasing 
reasons  of  competition, 
homogeneity  of  the  regulations  and  in  view  of  the  conaitions  of  investment  in  the 
single  market. 

tax  harmonization 

in  v i ew  of 

the 

for 

5.  Transnational  n e t w o r ks  b e t w e en  companies 
Portugal  stresses  the  lack  of  encouragement  and  of  Community  support  (in  particular 
in  the  SMES)  allowing  the  participation  of  the  companies  of  the  countries  the  least 
advanced  in  shared  cost  transnational  projects,  gathering  major  companies  and  SME. 
Consequently,  it  proves  necessary  to  promote,  within  the  SMES,  the  knowledge  of 
the  European  markets,  and  of  the  methods  of  access  to  the  R&D  C o m m u n i ty  f u n d i n g, 
and  to  develop  cooperation  n e t w o r k s. 

i 

6.  Task  forces 
The  laudable  intentions  to  coordinate  and  articulate  between  the  various  programmes 
w h i ch  justify  the  creation  of  the  Task  forces  suffered  from  the  lack  of  transparency 
of  their  selection  and  financing  procedures,  thus  generating  confusion  in  the  debate 
between  the  green  Paper  on  innovation,  the  financial  aid  for  the  4 t h.  PCRD,  and  the 
beginning  of  the  discussion  of  the  5 th  PCRD.  However,  Portugal  is  favourable  to  the 
Task 
transport  and 
multimedia  educational  s o f t w a r e. 

transport,  maritime 

forces  concerning 

intermodality  of 

the 

*  9} 

THE  DUTCH  GOVERNMENT'S  RESPONSE  TO  THE GREEN PAPER  ON  INNOVATION. 

The  Dutch  Government  is  in  full  agreement  with  the  main  points  outlined  in the  Green 
Paper  on  Innovation.  Recent  studies  undertaken  in the  Netherlands  have  enabled  this 
country  to  have  experience  in  almost  all  the  Routes  of  Actions  described  in  the  GPI. 
Conscious  of  the  principle  of  subsidiarity  the  Dutch  Government  feels  that  activities 
at  Community  level  should  only  be  considered  if  a  project  transcends  the  national 
dimension  or  if  they  arise  directly  as  a  result  of  Community  policy  or  regulations. 
The  following  points  illustrate  the  Dutcn  Government's  view  on  key  policy  areas: 

(i)Cautions  against  the  use  of  European  funds  as investment  capital 
(ii)  Welcomes  the  formation  of  EASDAQ,  on  condition  that  such  an exchange  is 

left  to  the  market 

(iii)  Cautions  against  European  prises  or  certificates  until  the  value  of  such 

Community  initiatives  become  clearer 

(iv)  Endorses  the  key  issues  relating  to  permanent  education  and  emphasises 
the  need  to  establish  methods  of  mutual  recognition  of  training  and  skills  of 
each  MS. 

The  Dutch  Government  points  out  that  the  inclusion  of  issues  of  a general  nature  e.g. 
administrative  costs,  labour  /  patent  law  etc.  which  are  often  addressed  in  separate 
regular  consultative  forums,  specifically  set  up  for  that  purpose. 
It  is  imperative  that 
innovation  is  included  on  the  agenda  of  these  forums. 

"W 

SWEDISH  GOVERNMENT'S  RESPONSE TO  THE GREEN  PAPER  ON  INNOVATION 

the  role  of  schools 

The  Swedish  Government  was  concerned  at  the  very  technical  slant  to  innovation 
that  was  presented  and  stresses  that  innovation  influences  every  aspect  of  life. 
It 
individuals  and 
particularly  emphasises 
in  the  creativity  of 
It  feels  that  all 
suggests  that  work  by  the  OECD  couid  be  of  interest  on  this  subject. 
the  Routes  of  Actions  are  geared  to 
through 
innovation  and  while  this  is  commendable  there  are  societal  needs  to  be  addressed 
increasing 
which  will  also  require  very  innovative  approaches  e.g.  care  for  the 
numbers  of  elderly  people  in  the  population.  Organisational  innovations  were  also 
considered  lacking. 

improved  economic  performance 

A  few  specific  points  gives  an  indication  of  the  Swedish  Government's  opinion  of  the 
GPI. 

The  role  of  the  Commission  in  improving  European  Innovation  should  be  limited 
to  activities  which  are  not  viable  to  undertake  at  national  level.  One  major  area 
would  be 
transfer  and  exchange  of  experiences  and 
knowledge  between  Member  State. 

the  coordination  of 

The  contents  of  the  thirteen  Routes  of  Actions  contain  nothing  new.  Such 
information  has  been  tried  and  tested  for  some  considerable  time,  often  not 
succeeding  in  contributing  much  to  innovation. 

It  is  concerned  that  the  ratification  of  the  European  patent  convention  might  not 
be such  a  positive  approach. 

It  recommends  that  the  work  on  innovation  which  has  been  undertaken  by  the  OECD 
should  act  as  a  focal  point  for  any  further  innovation  activities  undertaken  by  the 
Commission. 

36 

UK  GOVERNMENT'S  RESPONSE  TO  THE  GREEN  PAPER  ON  INNOVATION 

The  UK  welcomes  the  Commission's  initiative  to  prepare  and  publish  the  Green 
paper.  UK  particularly  welcomes 
the 
successful  experience  of  individual  regions  3nd  countries  to  spread  best  practice 
throughout  Europe.  Moreover,  UK  welcomes  the  emphasis  on  the  need  to  learn  from 
each  other  through  the  exchange  of  best  practice,  rather  than  on  all  Member  States 
necessarily  doing  the  same  thing. 

the  need  to  build  on 

the  recognition  of 

In  particular  at  the  Community  level,  UK  welcomes  and  supports  the  Commission 
addressing  deregulation,  streamlining  of  procedures  and  competition,  as  well  as  the 
use  of  private  contractors  and  decentralisation.  There 
the 
effectiveness  of  existing  actions  and  initiatives  within  the  Community  and  for  better 
coordination  between  EU  activities. 

is  room 

increase 

to 

Better  direct  research  efforts  towards  innovation 
Mechanisms 
attention  has  been  paid  to  incremental  innovation  which  is  particularly 
when  considering  innovation  in  SMEs. 

linking  basic  research  and  innovation  are  essential.  However, 

little 
important 

The  UK  is  strongly  in  favour  of  effective  interprogramme  cooperation.  Task  forces  are 
found  to  be  helpful  in  the  recognition  of  useful  areas  for  cooperation.  However,  the 
operation  of  the  first  round  of  Task  forces  has  raised  a number  of  concerns. 

Welcomes  the  proposal  to  include  in  the  IV  FP monitoring  and  evaluation  procedures 
an assessment  of  the  impact  of  innovation. 

Agrees  with  the  need  to  take  innovation  factors  into  account  in  V  FP,  but  is  unclear 
about  how  the  Commission  intends  to  do  that. 

There  is  no  need  for  a  new  Community  information  programme. 

The  scope  for  adding  value 
Community  level  is  relatively  limited. 

through  technology  monitoring  and  foresight  at  a 

Reinforce  human  resources  for  innovation 

The  recommendations  are  relevant.  However.  Member  States  will  have  a  range  of 
different  priorities  and  approaches  to  improving  their  training  systems. 

Public  authorities,  at  either  national  or  Community 
to 
identify  skills  and  qualifications  needed  by  businesses.  There  is  no  justification  for 
setting  up  a new  institution  which  would  duplicate  the  work  already  undertaken. 

level  are  not  best-placed 

There  is  no  case  for  any  increased  funding  of  TMR, .nor  justification  for  creating 
further  initiatives. 

*/[GO 

Improve the  conditions  for  the  financing  of  innovation 

the  private  sector. 
The  suggested  mechanisms  should  be  developed  within 
Experience  shows  that  lack  of  access  to  finance  is seldom  a  main  barrier  to  innovate, 
though  it  is  often  used  as  an  excuse.  No  objections  however  to  proposals  to  allow 
the  EIF to  invest  in  equity. 

Taxation  issues  are  primarily  a  matter  for  Member  States  at  national  level  under  the 
subsidiarity  principle. 

Foster  a legal and  regulatory  environment  favourable  to  innovation 

Supportive  to  efforts  in  international  forums  to  achieve  harmonisation,  where  such 
measures  are  likely  to  lead  to  an  improvement  in  the  trading  environment  and/or 
greater  efficiencies  or  reduced  costs  in the  IPR system. 

The  UK  supports  the  promotion  of  patent  information  services  as  a  method  of 
technology  watch. 

The  UK  fully  supports 
Community  level. 

the  streamlining  of  administrative  procedures  at 

the 

No  opposition,  in  principle,  to  a  European  Company  Statute  (ECS).  However  there  is 
no  justification  for  a  separate  form  of  ECS  or  EEIG  for  small  or  for  innovative 
companies. 

Control  of  state  aids  should  be  a  major  priority  for  the  Commission.  In  principle,  the 
UK  fully  supports  the  Commission  efforts  to  restrict  the  levels  of  state  aid  to  large 
investment  products.  UK  welcomes  and  fully  supports  the  Commission's  proposal  to 
continue to  have  competition  rules  which  facilitate technology  transfer. 

Adapt the  role and  modalities  of  public  action  regarding  innovation 

The  UK  Supports  the  objective  of  fostering  cooperation  among  enterprises  and 
strengthening  groupings  Encouraging  an 
internationaily-minded  approach  among 
enterprises  is an important  issue. 

Framework  Programmes  should  not  be  used  to  support  regional  actions  which  are 
best  carried  out through  the  use  of  Structural  Funds. 

There  should  be  proper  evaluation  of  Community,  national  and  regional  investment  in 
innovation.  Regional  and  national  initiatives  should  be  evaluated  by  Member  States, 
welcomes the  Commission  facilitating  exchange  of  best  practice  between  regions  and 
countries. 

^/fo/» 

2.1-C-  Reaction  of  the  Institutions: 

(Summary  established  by the Commission services) 

1. Parliament 
2. Economic  and Social  Committee 
3. Committee  of  the  Regions 

/ A°& 

1,  Comments  from the  European  Parliament 

The  European  Parliament  has  welcomed  the  Green  Paper  and  its  Action  Routes,  and 
is  keen that  measurable  results  should  foilow.  in  a  35-point  resolution,  the  Parliament 
calls  among  other  things  for: 

Dissemination  and  exploitation  of  RTD  results 

•  Better  diffusion  of  technical  know-how,  including  more  support  for  the  Innovation 
Programme  and  the  programme  for  the  Stimulation  of  the  Training  and  Mobility  of 
Workers. 

•  A  new  Task  Force to  foster  dissemination  and  exploitation  of  RTD. 

•  Focus  on  research  that 

driven,  or  that  covers  industries  currently  too  small  to  be  self-supporting 
research. 

is  interdisciplinary,  application-oriented  and  network-
in 

•  Greater  use  of 

information  technology,  the  foundation  to  be  laid  by  having 

Internet  access  for  all  schools. 

•  Priorities  to  be  set  based  on  a  better  knowledge  of  the  innovation  process, 

founded  on  quantitative  innovation  indicators. 

•  A  permanent  review  of  national  'best  practice'  encouraging  innovation  in  the 

Member  States. 

Monitoring  of  RTD 

• 

Improved  cooperation  as  regards  national  and  EU research  policies. 

•  The  Joint  Research  Centre's  Institute  for  Prospective  Technological  Studies  to 
have  a  key  role  in  developing  network  links  between  centres  engaged  in  similar 
activities. 

Economic  and financial  considerations 

•  Member  States  to  review  their  fiscal  regimes  with  a view  to  promoting  innovation. 
financial  markets, 

Suggestions  include  Japanese-style  regulation  of  domestic 
longer  payback  periods  for  investment,  and  cheap  loans  to  innovative  companies. 

•  More  competition  within  the  internal  market,  preventing  large  companies  from 

dominating  markets  and  subsidies. 

• 

Independent  technical  assessments  to  give  banks  a  better  understanding  of 
technology-based  firms. 

*  A**> 

Administrative  and  legal  constraints 

•  Simplification  of  administrative  procedures  at  both  national  and  Community  level. 
The  C o m m i s s i o n 's  SLIM  initiative  (Simpler  Legislation  for  the  internal  Market) 
is 
w e l c o m e d,  and  the  Parliament  aiso  calls  for  consideration  of  further  administrative 
simplification  of  the  research  framework  programmes. 

•  Early  adoption  of  the  European  Company  Statute. 
•  Patent  protection  periods 

that  vary  according 

to 

the  product 

type,  so  as 

to 

balance  innovation  (helped  by  patents)  w i th  competitions  (hindered  by  patents). 

Encouraging  SMEs  to  innovate 

•  Support  for  innovation  at  the  regional  levei.  and  programmes  to  encourage  SMEs, 
to  cooperate  w i th  universities,  industrial  research  centres,  and  big  enterprises 
•  Attention  to  be  paid  to  the  roie  of  intermediary  organisations  such  as  banks, 

consultants,  marketing  cooperatives  and  technical  colleges  in  helping  small  f i r m s. 

•  Structural  Funds  to  be  oriented  towards  innovation. 
•  Recognition 

t h at  SMEs  are  not  a  homogeneous  group,  so  that  poiicv  should 

respect  their  differences  and  be  targeted  on  the  basis  of  size  and  sector. 
•  Help  for  SMEs  to  reduce  the  financial  risks  of  innovation,  including  support 

f r om 

the  European  Investment  Bank 

Social,  educational  and  training  aspects 

•  Better  c o m m u n i c a t i on  between  researchers  and  the  public,  especially 

public  broadcasting.  Funding  should  carry  a 
research  findings  to  the  public. 

responsibility 

to 

t h r o u gh 
c o m m u n i c a te 

•  A  more  consumer-oriented  research  policy. 
•  Greater 

involvement  of 
education  and  direct  participation. 

the  workforce 

in 

the 

innovation  process, 

t h r o u gh 

•  Attention  to  'incremental'  innovation,  w h i ch  can  be  just  as  important  as  p r o d u c ts 

that  are  fundamentally  n e w. 

•  Emphasis  on  the  integration  of  innovation  in  education  and  vocational 

training, 

and  a  n ew  f r a m e w o rk  for  future  innovation-based  professional  qualifications. 

Task  forces  and  innovation 

•  Debate  on  t he  goals  of  the  Task  Forces  and  the  establishment  of  clear 

links 

between  their  w o rk  and  the  Green  Paper's  Action  Routes. 

$oir 

2.  Opinion  of  the  Economic  and  Social  Committee 

The  Economic  and  Social  Committee  welcomes  the  Green  Paper  and  feels  that  an 
integrated  horizontal  approach  is  essential  for  the  success  of  any  innovation  policy. 

It  considers  that  encouragement  of  innovations  must  become  the  principal  objective 
of  decision-makers,  as  this  is  the  key  to  improving  competitiveness,  employment  and 
development,  and  that  joint  action  must  be  taken  at  European  level,  while  respecting 
the  principle  of  subsidiarity.  The  Committee  also  considers  t h at  innovations  are  also 
key  factors  in  economic  and  social  cohesion. 

The  Committee  stresses  the  importance  of  the  entire  research  s y s t e m,  backed  up  by 
technology  foresight. 

The  Committee  feels  that  there  should  be  greater  reliance  on  a  bottom-up  approach, 
that  more  attention  should  be  paid  to  the  point  of  v i ew  of  potential  users,  and  that 
interaction  between  researchers  and  users  should  be  p r o m o t e d. 

Resources  should  be  concentrated  in  joint  fields  and  projects  w h i ch  are  of  essential 
importance.  Cooperation 
is  essential,  since  effective  use  of  the  resources  is  more 
important  than  their  quantity.  Efforts  should  be  concentrated  and  priority  given  to  the 
objectives. 

The  Committee  considers  that  conditions  favouring  innovation  come  about  as  a  result 
of 
large 
enough  to  generate  "critical  m a s s ". 

f i r m s,  research  centres  and  other 

factors  on  a  scale  that 

integrating 

is 

The  Committee  feels  t h at  innovation  policy  must  improve  the  opportunities  for  the 
most  poorly  equipped  firms  to  join  innovation  networks. 

The  Committee  stresses  t h at  innovation  policy  within  a  f i rm  or  in  any  other  structure 
requires  the  participation  of  all  employees,  in  particular  t h r o u gh  further  training  and 
an  atmosphere  w h i ch  is  open  and  conducive  to  cooperation. 

Of  the  issues  w h i ch  the  Commission  reviews  and  w h i ch  are  favourable  to  innovation, 
the  Committee  feels  t h a t:  each  n ew  proposal  for  legislation  should  be  assessed  w i th 
regard  to  its  effects,  a  sustainable  demand  must  be  created  in  sectors  important  for 
society,  and  market  rigidity  must  be  reduced. 

In  the  view  of 
orientation  of 
taxation,  openness  of  markets  and  dissemination  of  innovation  to  SMEs. 

the  C o m m i t t e e,  among 
research,  supported  by 

the  most 
technology 

important  areas 

foresight, 

training, 

for  action  are: 
financing, 

The  Committee  considers 
industrial  and  other  policies. 

it  necessary 

to  promote  synergy  between 

research, 

The  Committee  thinks  that  the  Green  Paper  stresses  cooperation  between  research 
centres  and  firms  but  fails  to  take  account  of  factors  such  as  cooperation  between 
different  departments  w i t h in  a  f i r m,  the  fact  that  a  f i r m 's  potential  increases  w i th  the 
quality  of  work  for  employees,  the  firm's  staff  policy  and  the  distinction  between 
internal  and  external  mobility. 

As  regards  the  routes  of  action  in  the  Green  Paper,  the  Committee  has  the  following 
comments  to  make: 

*4oï 

Route  of  action  ~i  •  Technology  watch  ana 
prospective  technoiogicai  studies  in  the  Memoer  States  snouid  be  encouragea. 

foresight. 

Institutes 

involved 

in 

Route  of  action  2  -  Orientation  of  researcn  towaras  innovation.  The  authorities  have 
the  right  to  intervene,  particularly  in  sectors  important  for  society,  where  t he  market 
itself  wouid  not  generate  d e m a n d,  by  using  task  force-type  activities. 

t o w a r ds 
Route  of  action  3  -  Initial  and  further 
ongoing  improvement.  The  Knowledge  Resource  Centres  protect  should  be  iaunched, 
the  purpose  of  w n i ch  is  to  act  as  an  interface  oetween  tne  supply  ana  aemana  for 
information  in  the  brancn  of  training  in  question. 

training.  There  must  be  a  move 

Route  of  action  4  -  Furthering  the  mobility  of  students  and  researchers.  Mobility 
between  different  sectors  and  w i t h in  individual  countries  must  be  p r o m o t e d. 

innovation.  Any 
Route  of  action  5 
campaigns  to  heighten  public  awareness  must  be  based  on  a  t h o r o u gh  understanding 
of  the  factors  involved. 

-  Promoting  recognition  of  the  benefits  of 

Route  of  action  6  -  Improving  the  financing  of  innovation.  Everything  should  be  done 
to  ensure  that  SMEs  have  the  same  financing  conditions  as  those  enjoyed  by  large 
firms. 

Route  of  action  7  -  A  fiscal  regime  conducive  to  innovation.  When  enacting  or 
amending  the  tax  system,  any  negative  effects  this  mav  have  on  innovation  must  be 
considered. 

Route  of  action  8  -  Promotion  of  intellectual  and  industrial  property.  A  European 
patent  system  should  introduced. 

Route  of  action  9  -  Simplification  of  administrative  procedures.  It  is  high  time  that 
concrete  measures  were  t a k e n. 

Route  of  action  10  -  A  favourable  legal  and  regulatory  framework.  A c c o u nt  should  be 
taken  of  innovation  needs  in  EU  c o m p e t i t i on  policy.  European  standards  concerning 
health,  the  environment  and  safety  should  be  strict  and  binding. 

Route  of  action  11  -  Development  of  "economic  intelligence"  action.  The  task  of  the 
authorities  is  to  facilitate  more  education  in  this  area. 

Route  of  action  12  -  Encouragement  of  innovation  in  enterprises,  especially  SMEs, 
innovation.  Economic  and  social 
and  strengthening 
cohesion  is  a  key  objective  of  t he  U n i o n,  and  subsidiarity  is  its  guiding  principle. 

regional  dimension  of 

the 

Route  of  action  13  -  Updating  public  action  for  innovation.  A c t i on  is 
being  directed  t o w a r ds  cooperation  w i th  the  different  segments  of  society. 

increasingly 

"/tot, 

3.  Opinion  of  the  Committee  of  the  Regions 

The  Committee  of  the  Regions  welcomes  the  Green  Paper  and  thinks  that  it  is 
necessary  to  achieve  genuine  coordination  of  measures  to  disseminate  know-how 
and  exploit  results,  while  respecting  the  principle  of  subsidiarity,  it  welcomes  the 
importance  attached  to  local  and regional  authorities. 

The  Committee  approves  of  the 
idea  of  a  proactive  policy  on  innovation  and 
mobilising  local  operators,  as  this  is  essential  for  maintaining  and  strengthening 
competitiveness  and  creating  jobs.  The  locai  and  regional  authorities  bear  a  major 
responsibility  for  this  mobilisation. 

As  regards  support  for  innovation,  iocai  and  regional  authorities  must  be  involved  in 
setting  up  a  legal,  economic,  financial  and  training  environment  that  is  conducive  to 
innovation.  The  Committee  insists  on  the  priority  which  the  authorities  must  give  to 
financial  support  for  research  centres  and  innovation.  Private  financial  circles  must 
also  be made  more  aware  of  the  challenges  of  innovation.  Finally,  rules  governing  the 
intervention  of  the  structural  funds  in  financing  venture  capital  must  be  clarified,  so 
that  this  tool  can  become  operational.  There  is  a  need  to  develop  policies  to 
encourage  innovation  with  a  view  to  improving  manufacturing  processes,  creating 
new  industrial  and  tertiary-sector  products  and  setting  up training  schemes  as  part  of 
a  policy  to  support  SMEs.  The  European  Union  has  frequently  supported  efforts  by 
local  and  regional  authorities  in  this  field.  Finally,  regional  education  and  training 
programmes  must  help  to  provide  training  in  innovation,  supported  in  this  by  the 
Socrates,  Leonardo  and  INFO  2000  programmes. 

The  Committee  considers  that  dissemination  of  the  results  of  innovation  contributes 
to  economic  and  social  cohesion,  and  that  improved  spatial  restructuring  will  result  in 
the  networking  of  regional  innovation  systems.  Local  and  regional  authorities  must 
promote  the  establishment  of 
links  between  research  centres,  universities  and 
industry  for  the  purpose  of  developing  networks  for  exchanging  information  and 
for 
experience  at  regional,  transregionai  and  cross-border 
assisting  innovation  should  not  be  confined  to  research  and  development,  but  should 
also  extend  to  the  marketing  and  industrialisation  phases.  There  is a  need  to  set  up a 
regional  technology  watch  policy.  The  Committee  considers  that  the  European 
network  of  Innovation  Relay  Centres  must  reach a critical  size,  in geographical  terms, 
and  that,  as  part  of  the  simplification  of  the  schemes  to  provide  aid  and  for  the 
dissemination  of  research  results,  these  centres  could  act  as  "one-stop  shops"  for 
SMEs. 

levels.  Mechanisms 

As  regards  the  routes  of  action  in the  Green  Paper,  The  Committee  has the  following 
comments  to  make: 

Route  of  action  1  -  To  develop  technology  monitoring  and  foresight.  The  information 
collected  and processed  by the  Seville  Institute  for  Prospective  Technological  Studies 
must  be exploitable  at  regional  and local  levei. 

Route  of  action  2  -  To  better  direct  research  efforts  towards  innovation.  Local  and 
regional  authorities  must  set  up  SME  monitoring  and  watchdog  organisations  with  a 
view  to  increasing  SMEs'  capacity  for  research  into new  technologies. 

'/fol 

-  To  develop 

Route  of  action  3 
local 
authorities  can  familiarise  voung  people  w i th  innovation,  w i tn  the  tinanciai  support  of 
and 
the  European  Union,  and  develop 
educational  establishments. 

researcn  cooperation  between 

training.  Regional  ana 

initial  and 

further 

'irms 

-  To 

the  mooilitv  of  students  and  researchers.  The 
Route  of  action  4 
Committee  emphasises  the  importance  of  mooility  and  underlines  the  role,of  local  ana 
regional  authorities,  w ho  are  aoie  tc  forge  cooperation  iinks  between  the  regions  of 
Europe. 

further 

Route  of  action  5  -  To  promote 
Committee  w o u ld 
successful  experience  in  innovation. 

to  see 

like 

recognition  of 

the  benefits  of 

local  and 

regional  authorities  kept 

innovation.  The 
informed  of 

Route  of  action  6  -  To  improve  the  financing  of  innovation.  It  is  important  to  make  all 
the  financial  partners  aware  of  the  need  to  overhaui 
to 
innovation 
introduce  mechanisms 
projects. 

their  aid  machinery  and 

for  encouraging 

to  become 

involved 

t h em 

in 

As  regards  routes  of  action  1,  8.  9  et  10,  tne  Committee  approves  the  proposal  to 
t a x. 
consult 
the  establishment  of  a 
administrative  and 
innovation.  Regional  seminars 
could  be  organised  as  part  of  measures  to  simpiify  the  business  environment. 

local  economic  and  social  operators  on 
legal  environment  conaucive  to 

intelligence  actions.  The  budgets  of 
Route  of  action  11  -  To  develop  economic 
regional  schemes  in  this  field  must  be  increased,  whether  for  back-up  for  advisory 
services,  continuing  training  or  assistance  in  the  recruitment  of  managerial  staff. 
It 
t he 
would  be  of  great  help 
authorities  in  order  to  identify  the  impact  of  these  policies. 

to  have  regular  assessments  of  measures  taken  by 

Route  of  action  12  -  To  encourage  innovation  in  enterprises,  especially,  SMEs,  and  to 
strengthen  the  regional  dimension  of  innovation.  The  local  or  regional  ievei  is  the 
most  appropriate  one  for  contacting  businesses  on  matters  concerning  innovation. 

Route  of  action  13  -  To  update  public  action  for  innovation.  The  Committee  approves 
the  suggestions  on  the  new  conception  of  the  roie  of  the  State  in  innovation. 

In  conclusion,  the  Committee  welcomes 
It 
underlines  the  repeated  references  to  subsidiarity  and  the  role  of  local  and  regional 
authorities.  Its  Members  will  be  invited  to  give  an  account  of  their  experience  and 
submit  proposais  w h i ch  might  be  of  help  in  drawing  up  the  summary  report  and  the 
action  plan. 

the  European  Commission's 

initiative. 

A*>% 

ANNEX  2.2. 
Recent  developments  in innovation 
policy  in the  Member  States 

Joî 

RECENT  DEVELOPMENTS  IN INNOVATION  POLICY 
!N THE  MEMBER  STATES 

Introduction 

in  EU 
In  the  next  pages  a  number  of  seiectea 
Member  States 
is  n ow 
embracea  by  the  concept  of  innovation  ooiicv  examples  are  clustered  according  to 
the  three  oroaa  obiectives  of  the  innovation  Action  Plan: 

innovation  policv  developments 

illustrate  w h at 

is  presentee, 

the  1 9 9 0s 

in  order 

to 

in 

A 
B 
C 

Human  resources,  education  ana  training 
Frame  conditions  for  entrepreneursnip  ana  innovation  finance 
RTD  ana  industry 

Concentrating  such  masses  of  information  into  a  few  pages  can  of  course  not  do 
justice  to  the  approaches  of  individual  governments.  H o w e v e r,  it  is  easily  observed 
that  EU  governments  are  attentive  to  giving  new  advanced  content  and  increased 
innovation  and  technological  change.  Germany's 
coherence 
Bundesbericht 
three-yearly 
government  proposals 

in  Sweden  are  illustrative  of  such  e f f o r t s. 

the  UK  White  Papers 

to  their  policies  for 

Forschung 

1996. 

and 

the 

A 

Human  resources,  education  and  training 

in 

the 

The  Innovation  Agencv 

force  are  strong  elements 

Education,  vocational  training,  further  training,  and  concern  for  the  skills  level  of  the 
entire  w o rk 
innovation  policies.  However, 
educational  budgets  in  Member  States  are  more  decentralised  than  budget  lines  of 
most  other  innovation  policy  relevant  actions.  The  observation  that  science  subjects 
trail  in  popularity  among  school  children  and  young  people  has  become  a  concern  to 
Policy 
most  Member  State  governments.  For  example,  the  Science  and  Technology 
Council  of  Finland  states  in  its  development  strategy  Towards  an  innovative 
society, 
that  ",..the  quality  of  teaching  will  be  imorovea  and  educational  content  will  be 
renewed  for  ail  levels  of  e d u c a t i o n ". 
in  Austria  Dromotes 
innovative  projects  in  schools,  nurtures  innovative  problem  solutions  deveiooea  by 
students  by  funding  project  costs,  giving  prizes  to  winning  teams  and  enabling  them 
to  participate 
for 
In  Luxembourg  a  revision  of  the  law  of  the  secondary  technical  education 
Innovation. 
and 
"Prix  à 
is  promoted. 
l'Innovation",  has  been  developed  by  the  Luxembourgish  Federation  of  Industries  and 
in  connection  w i th  the  educational  s y s t e m. 
In  Denmark,  the  Ministry  of  Education  is 
working  on  the  w a ys  that  innovation  and  entrepreneurial  culture  can  be  encouraged 
from  the  primary  and  secondary  educational  levels.  Also,  the  THOR  (Technology 
by 
initiative,  w h i ch  is  scneduled  for  1 9 97  and  will  consist  of 
Highly  Oriented  Research) 
a  limited  number  of  big  research  grants  awarded  to  excellent  scientists  will  also 
contribute  to  make  the  area  of  technology  and  science  more  attractive  for  young 
people  to  enter,  in  the  United  Kingdom  the  Prince  of  Wales  Award  has  recently  been 
extended  w i th  prizes  also  for  the  m o st  commercially  successful  innovations. 

in  international  competitions.  The  agency  also  runs  the  Award 

relevant  engineering  diploma 

In  addition, 

the 

the 

look  in  more  specific  areas 

!f  we 
following  initiatives: 

in  the  field  of  education  we  can  mention 

the 

y 

A.  1  The training  and  mobility  of  researchers  at  doctoral  level 

In  Germany  the  international  exchange  of  researchers  is  supported  through  several 
programmes,  such  as  the  Alexander  von  Humboldt  Stiftung  giving  grants  to  more 
than  2000  researchers  per  year  and  the  Deutscher  'Akademischer  Austauschdienst 
the  DFG  doctoral 
supporting  more  than  50000  individuals  Der  year. 
programme  (Graduiertenkollegs)  has  grown  rapidly  from  ECU  1.6  million  in  1990  to 
ECU 41  million  in  1995.  The  Three-year  pian  for  research  and  innovation 
1994-96. 
in  Italy,  states  that  " 
the  instruments  of  University  diploma  and  the  research 
doctorate,  which  have  been  introduced  far  later  than  in  other  industrialised  countries, 
must  be  made  more  responsive  to  the  requirements  of  the  country's  production 
system". 

In  addition, 

focused 

(YPER) started  in  1995 
In  Greece  the  programme  of  targeted  research  fellowships 
industry 
with  the  aim  to  create  a  pool  of  highly  educated  persons  dealing  with 
research 
In  Spain  the  national  programme 
related  problems. 
for  the  training  of 
the  19  national 
the  priority  areas  of 
towards 
personnel  has  been 
programmes  making  up  the  Third  national  R&D  plan  (1996-1999). 
In  Ireland  PhD 
support  grants  wiil  increase  in  1997  from  ECU  1250  per  individual  at  present  to  ECU 
2500  which  is  in  addition  to  the  number  of  PhD  students  supported  by  other  lines  in 
In  Denmark  the  government  continues  to  give  high  priority  to  the 
the  S&T  budget. 
for  visiting 
training  of  researchers,  for  example  by  continuing 
researchers  from  abroad  and  by  providing  grants  for  Danish  research  students 
to  go 
abroad.  The  aim  is  to  at  least  maintain  the  present  level  of  enrolment  at  PhD 
courses. 

the  programme 

A.2 

The linkages between  university level  education and the enterprise sector 

regions  have  each 

(SMEs)  with  a  view 

In  Belgium  the  Flemish  and  Walloon 

the  FIRST  programme  enables  researchers 

In  this  field  most  policies  and  measures  aimed  at  supporting 
the  mobility  of 
university  graduates  into  their  first  jobs  and  to  promote  the  exchange  of  research 
staff. 
implemented 
programmes  aiming  at  the  financial  support  of  graduates'  recruitment  by  enterprises, 
especially  SMEs.  in  Wallonia. 
to  be 
recruited  by  universities  and  comoanies 
to  developing 
partnerships,  and  in  Flanders  a  similar  scheme  is  linked  to  the  sponsoring  of 
In  the  UK,  the  Teaching  Company  Scheme,  encourages  the 
enterprise  clusters. 
mobility  of  students  and  graduates  towards 
industry.  Also,  career  problems  of 
contract  research  staff  at  universities  have  been  eased  through  an  agreement 
In  the 
involving  the  research  councils,  the  Royai  Society  and  the  British  Academy. 
Netherlands  additional  funds  wiil  be  used  for  the  Kennisdragers  in  het  Midden-  en 
K/einbedrijf  (KIM)  project  (similar  to  the  UK  teaching  company  scheme.) 
In  Sweden 
a  report  from  the  Ministry  of  Industry  recommends  that  PhD  programmes  should  be 
adapted  to  industry  needs  and  that  a  new  type  of  industrial  associate  professors 
should  be  introduced  to  allow  the  hiring  of  persons  with  experience  from  industry. 
The  Ministry  of  Education  and  Science  in  Spain,  has  initiated  a  sectoral  programme 
for  the  training  of  university  academic  staff  and  improvement  of  research  personnel 
with  the  aim  to  promote  the  exchange  of  research  personnel  between  industries  and 
public  research  centres  and the  development  of  enterprises'  R&D  units. 

In Germany,  under  the  particular  aim  to  integrate  R&D  man  power  in  R&D  projects  of 
SMEs  in  the  new  Lander,  several  programmes  under  BMBF  and  BMWi  continue  and 
are  increased  in  volume.  The  creation,  in  1995,  of  the  Centre  of  Advanced  European 

/f/f/f 

(CAESAR) 

funaamentai  and  application  onenteo 

in  Bonn  is  another  effort  to  :ncrease  flexibility,  notably  avoiding 
Studies 
five 
giving  tenure  to  researchers,  insteaa.  scientists  will  be  nirea  to  worK  ror  only 
researcn  projects  such  as  nano-
years  on 
the  next  century.  Another 
technoiogy  or  bio-electronics  which  are  oromising  for 
novelty  will  be  t h at  CAESAR 
is  to  be  financea  as  a  private  institute  living  f r om  the 
interest  o f - t he  initial  e n a o w m e nt  of  ECU  3 60  million  t r om  the  federal  government 
and  ECU  34  mio  f r om  North  Rhine  Westphalia. 
PhD 
Fel/owsnms 
levei  of  45  new  graOuates  per  year,  w n i ch  are 
simultaneously  empioyea  by  a  company  ana  enroilea  at  a  university  institute  as  a 
^ne  Greek  programme  Diavios  nas  a  pilot  demonstration  character 
PhD  students. 
(co-financea  by  the  European  Social  Funo)  aiming  to  suoport  first  contacts  b e t w e en 
students  ana  companies  having  RTD  activities, 
for  graduate 
training  ana  mobility  include  financial  support  for  companies'"  R&D  personnel  in  order 
to  work 
graauate 
R&D 
entrepreneurs  to  assist  t h em  in  developing  skills  reauired  to  run  their  o wn  business: 
and.  assistance  to  SMEs  to  recruit  technical  graduates  for  1  year  period. 

In  Denmark  the  industrial 

Ireland  schemes 

departments: 

in  overseas 

continue  at 

companies 

training 

the 

to 

in 

A.3 

Vocational  training  and  further  training 

Memper  States  governments  address  the  reauirements  for  vocational  training  ana 
further 
the  objective  or  giving  an  increasea  proportion  of 
young  people  adequate  skills  ana  maintain  tne  employaoility  of  young  people. 

training  primarily 

from 

(1995), 

including 

involving 

its  concrete  objectives 

the  support  of  a  Sector 

for  Education  and  Training 

for  industry  training  organisations  ana  others: 

In  the  United  Kingdom,  the  government,  through  the  White  Paper 
Competitiveness. 
Forging  Ahead 
endorses  the  new  national  targets  for  education  and  training 
put  forward  by  the  National  Advisory  Council 
(NACETT) 
and  sets  out 
Target 
the  comparison  of  basic 
Challenge 
qualifications  for  employment  w i th  those  of  ieading  competing  countries  and  w o rk 
w i th  the  industry  training  organisations  to  bencnmark  training  in  companies:  to  run  a 
small  firms  training  challenge  offering  a  total  of  ECU  6  mio  for  the  best 
training 
to  publish  a  consultation 
ten  or  more  small  companies;  and, 
projects 
document  on  individual  responsibility  for  lifelong  vocational  learning.  The  Science 
and  Technology  Policy  Council  of  Finland  states  in  1 9 93 
innovative 
that,  a  g r o w i ng  emphasis  wiil  be  placed  on  basic  skills  in  initial  vocational 
society) 
education  aiming  at  more  comprenensive  curricula:  and  an  evaluation  of 
the 
educational  sector  of  adults  training  will  take  place  due  to  its  growing  importance. 
In  the  Netherlands  the  W h i te  Paper 
(1995)  stated  the  need  to 
'Knowledge 
increase  the  efficiency  and  effectiveness  of  current  funding  to  vocational  training  and 
enterprise  oriented  training; 
to  finance  annuailv  w i th  ECU  7  mio  an  innovation  f u nd 
for  technology  and  vocational  training;  and  to  stimulate  fiscally  apprenticeship  and 
trainees  in  enterprises. 
In  Austria  technology  relevant  vocational  training  measures 
include  the  introauction  and  use  of  new  technologies,  methods,  organisational  f o r m s, 
and  promotion  of  quality;  the  development  of  educational  models  combining  a t - w o rk 
and  external 
b e t w e en 
that 
technological  and  communicative  and  social  competencies;  and  development  of 
cross-companv  qualification  co-operation. 

qualifications;  models 

connection 

in  action" 

consider 

[Towards 

the 

an 

B 

Framework  conditions  for  entrepreneurship  and  innovation  finance 

Recent  national  White  Papers  and  Action  Plans  show  the  need  to  rationalise 
framework  conditions 

industrial  competitiveness. 

to  support  SMEs  and 

the 
The 

-^ 

following  examples  are  listed  under  some  main  categories  related  to  entrepreneurship 
and  innovation  finance. 

B. 1  Administrative 

simplifications 

rules; 

fees  and 

Administrative  simplifications,  deregulation  and  liberalisation,  establishment  of  one-
stop  shops  for  enterprises  are  all  part  of  many  governments'  published  plans, 
in 
Belgium  each  one  of  the  regions  is  planning  the  establishment  of  one-stop  shops,  as 
part  of  their  efforts  to  simplify  administrative  procedures. 
In  Denmark,  as  part  of  a 
includes  several  elements  in 
larger  action  plan,  t he  Ministry  of  Business  and  Industry 
like  the  removal  or  simplification  of 
its  project  to  reduce  administrative  burdens 
existing  administrative 
the 
the  simplification  of 
establishment  of  a  simplified  reporting  system  so  that  companies  can  satisfy  all 
authorities  through  reporting  to  a  single  point.  Both  France  and  Germany  have 
established  one  stop  shops 
BMBF 
likewise  reviews 
its  effect  on 
In  France  a  pilot  project  will  be  launched  in  four  regions  in 
research  and  innovation. 
order  to  co-ordinate  technical  legal  interventions  of  various  state  departments. 
In 
the  United  Kingdom  a  prototype  one-stop  regulation-shop  has  been  developed  and 
will  be  demonstrated 
country. 
selected  Business  Links 
at 
for  Science  and  Technology  has  announced  a  package  of 
Furthermore,  the  Minister 
deregulation  measures  to  help  small  firms  in  the  areas  of  singie  notification  for  tax 
and  National 
in 
enforcement  actions;  streamlined  development  controls;  a  draft  bill  for  consultation 
in 
forms  and 
industrial 
regulations. 

for  administrative 
legislation  from 

tribunals;  and  a  prototype 

for  new  businesses; 

the  point  of  v i ew  of 

for  businesses 

The  German 

taxes;  and, 

the  existing 

formalities. 

t h r o u g h o ut 

to  provide 

IT  system 

Insurance 

rights 

them 

new 

the 

B. 2 

IPR and  patents 

The  excessive  costs  of  patent  protection  in  Europe  compared  w i th  patent  costs  in 
the  United  States,  and  the  increasing  number  of  new  problems  related  to  IPR  are 
the 
addressed 
difficulty  of  combining 
the 
inventor/innovator)  w i th 
the  benefits  of  wider  exploitation  of  new  products, 
processes  (in  particular  in  biotechnology),  or  services. 

in  most  Member  States.  The  variety  of  measures  demonstrates 
to 

the  benefits  of  protection 

(allowing  a  pay-back 

in 

Ireland 

has  been 

is  under 
it 
The  European  Patent  Convention 
consideration 
in  Greece  has  been 
extended  from  15  to  20  years  to  make  it  compatible  w i th  EU  guidelines.  In  the 
United  Kingdom  studies  are  underway  on  the  role  of  the  UK  Patent  Office  vis-à-vis 
the  European  Patent  Convention  and  on  the  role  of  European  directives  applied  to 
biotechnological  inventions. 

likewise.  Patent  protection 

joined  by  Finland  and 

to  do 

Other  initiatives  to  make  better  use  of  patent 
information 
the  establishment  of  a  platform  called  'Patentverwertung'; 
Ministry  of  Industry-,  and  in  Belgium  via  the  Office 
Germany  subsidies  to  SMEs  for  patent  application  will  be  available  from  1 9 97  and 
100  new 
information  will  be  created  at  science  and 
engineering  faculties  under  a  new  programme  Innovationsstimulierung 
(INSTI). 
Wirtschaft  durch  wissenschaftlich-technische 

are  taken  in  Austria  w i th 
in  Spain  w i th  aid  from  the 

for  Industrial  Property  Rights. 

teaching  posts 

Information 

in  patent 

der  deutschen 

In 

r/ \^ 

property 

ngnts  Droblems  are  unaer  scrutiny 

intellectual 
in  manv  countries.  New 
norms  nave  come  into  force  in  italv  concerning  procedures  ana  sanctions  concerning 
s 
patents,  trade  marks,  royalties  etc..  wniie.  in  Germanv.  the  SchlichterKommission 
•ecommendations  are  n ow  in  the  form  ot  government  proposals  to  be  aoproved  by 
is  supported  ir.  this  work  as  well  as  in  diminishing  non-legai 
the  Bundesrat.  BMBF 
und 
barriers  to-research  ana  innovation  by  the  so-called  Cleanngstelle 
fur  Innovation 
Recht. 
industry  uses  university 
the  particular  proclems  ot 
research  capabilities  have  been  studied  by  tne  Ministry  of  Industry. 

in  Sweden 

IPR  wnen 

B. 3 

Norms  and 

standards 

There  is  an  uneven  presence  of  adequate  infrastructures  to  promote  recent  years' 
advances  in  the  use  of  high  qualitv  norms  and  standards,  hot  least  in  the  field  of 
services  and  in  the  application  of  total  oualitv  standards  or  design  as  a  competition 
parameter.  A m o ng  the  recent  developments  are  the  following: 

for 
into 

the  new  national  accreaitation  boav 

the  quality  and 
f u n c t i on  w i th  a  view 

industrial  security  and  for  environmental 
to  help  exports,  and  a  National 
(ENAC)  has  been  created  as  a  private  association,  in  Sweden 

In  Spain  regulations 
audits  have  come 
Certification  Agency 
In  the 
the  system  for  testing  ana  control  wiil  be  further  aaaptea  to  European  rules. 
for  c o n f o r m i ty  assessment 
United  Kingdom 
into 
Service 
service,  k n o wn  as  the  United  Kingdom  Accreditation 
former  National 
the  orivatisation  of 
being 
In  Austria  support  has  been  made 
Measurement  Accreditation 
Agency 
available  fpr  ISO  9 0 00  reviews 
promotes  industrial  design. 
In  Greece  and  Portugal  promotion  of  standardisation  and 
certification  are  parts  of  the  action  iines  for  the  promotion  of  industrial  development 
and  innovation. 

in  the  service  sector,  and  the  Innovation 

thus  comoieting 
Services 

in  August  1 9 9 5. 

iNAMAS). 

(UKAS), 

came 

the 

B.4 

Innovation 

Financing 

the  more 

substantial 

financing  and 

investments  needed 

the 
Innovation 
exploitation  of  innovative  products  ana  processes  are  supported,  in  particular  w i th  a 
view  to  the  needs  of  SMEs.  in  ail  Merrmer  States  with  schemes  for  seed  and  venture 
capital,  soft  loans  and  guarantees,  or  incentives  to  private  savings,  'business  angels' 
ana  moves  to  allow  pension  f u n ds  and  building  societies  to  make  f u n ds  available  for 
knowiedge-based  enterprises.  In  manv  Member  States  the  government  budgets  also 
allow  for  some  revenue  losses  t h r o u gh  fiscal  incentives  in  the  iarge  financial  markets 
the 
of  London,  Frankfurt,  Brussels  ana  Paris  concrete  steps  being  taken  t o w a r ds 
formation  of  EASDAQ 
(National  Association  of  Securities  Dealers  A u t o m a t ed 
Quotation)  by  the  end  of  1 9 9 6 .. 

for 

for  business  angels;  and  Grundungssparen 

for  SMEs  w i th  guarantees 
in  Austria  t wo  initiatives  will  be  implemented:  Privatcapital 
a  standardised  model  for  mobilizing  equity 
for  private  investors,  development  of 
capital,  and  establishing  a  " m a r k e t" 
for 
long  term  investment  credits  for  n ew  businesses  at  the  start  up  phase  and  for  the 
foundation  and  take  over  of  enterprises.  A  seed  financing  scheme 
funded  by  the  ITF 
and  managed  by  the  Innovationagentur 
provides  assistance  to  n ew  businesses  active 
furnishing  consulting  services  and  supplying  venture 
technologies,  by 
in  novel 
scheme  provides  a 
Industrial  Development 
the 
In  Denmark 
capital. 
guarantee  (at  50  per  cent)  for  investment  by  private  develoDment  companies 
that 
finance  SMEs  in  need  of  further  capital  ana  management  competence.  T w e l ve  such 

Companies 

x 
'/4U 

investment  companies  have  Qeen  aoproveo  since 
guarantee  of  ECU  132  mio. 
SMEs  and  venture  capital  for  business  start-ubs,  the  latter 
established  Finnisn 

! 9 94  under  an  overall  state 
in  Finland  eauitv  basea  development  loans  tor  R&D  in 
recently 

industrial  Fund,  seem  to  continue. 

through 

the 

the 

is  expected 

'NOUVEAU  MARCHE" 

to  mobilise  key 
introductions 
foresees  that  venture  capital  funds  snouio 
in  Germanv  the  Deutsche  Bôrse  a n n o u n c e d. 
;n  1997.  This  new  marKet  will  target 

in  France  -the  launch  of 
oiayers  on  the  French  eauitv  market  and  aims  to  achieve  around  30 
each  year.  The  Frencn  Plan  for  innovation 
mobilise  ECU  155  mio  within  3  years, 
in  March  1 9 9 6.  that  it  wiil  open  a  Neuer  Marki 
Bôrse 
telecommunication,  biotechnology,  multimeaia  ana  new  services.  Deutsche 
will  also  join  w i th  the  'Nouveau  Marcne* 
in  Pans  ana  the  Brussels  Bourse  w i th  a  v i ew 
to  develop  a  n e t w o rk  of  new  markets  for  eauities  (EURONM)  in  g r o w th  companies. 
Government  supported  eouity  and  credit  scnemes  for  SMEs  wiil  also  be  e x t e n d e d: 
the  Kreditanstalt 
innovation  loan  programme  is  to  be  improved  w i th 
at  least  ECU  5 25  mio  per  year  (pending  approval  by  the  European  Commission);  a n d, 
the  experimental  Beteiiigungskapital 
started 
1 9 8 9,  and  wiil  be 
Technologieunternehmen 

(BTU)  w i th  the  reiease  of  another  ECU  4 71  mio. 

fur 
continued 

Technologieunternehmen 

by  Beteiiigungskapital 

fur  Wiederaufbau 

(BJTUJ 
kleine 

junge 

fur 

in 

initiative 

-type  (XAT)  programme  wiil  soon  be 

In  Greece  a  Technology  Performance  Financing 
launched  w i th  the  aim  to  distribute  the  innovation  financing  amongst  three  parties, 
In 
i.e.  the  technology  supplier,  the  technoiogy  user  and  the  financial 
is 
lines  of  the  SME 
Spain  one  of  the  action 
devoted  to  the  improvement  of  the  access  of  SMEs  to  sources  of  financing  and  to 
the  support  of  networks  of  interface  organisations  of  financial  character. 
ICO-Pymes 
is  a  new  f o rm  of  credit  line  available  to  companies  that  develop  projects  financed  by 
the  Centre 
for  additional  finance  up  to  70  per  cent  ot  the  total  investment  of  the  project.  The 
National 
foresees  in  its  plan  for  1 9 9 6 - 1 9 99  investments  of  ECU  21  mio. 
"Société  Nationale  de  Crédit  et  de  d'Investissement" 
schemes  for  technology  and  innovation  related  projects. 

In  Luxembourg,  the 
loan 

(ENISA)  which  JS  a  public  venture-capital  c o m p a ny 

for  industrial  and  Technoiogicai  Development 

(CDTI),  w i th  the  possibility 

i n s t i t u t i o n. 
development 

(SNCI)  has  developed 

Innovation  Company 

industrial 

for 

for 

like 

finance 

initiatives 

investment 

technoiogy 

for  businesses  are  f o u nd 

to  be  a 
In  the  Netherlands,  while  administrative  costs 
to 
gênerai  problem  concerning  all  kinds  of  companies,  there  are  many 
facilitate  credit  and 
the  simplification  of 
applications  will  be  simplified  for  pilot  studies  and  small  credits  from  the  Technical 
Techno-starters  will  be  given 
Deveiooment  Fund  (Techniscn  OntwikKelingsKreoiet)'. 
iicenses): 
extra  support  by  the  Government:  Tecnnoiogy  brokers  (seed  capital  or 
Technoiogy  ratings  (feasibility  check). 
in  Sweden  three  NUTEK  programmes  are 
running,  w h i ch  bring  d o wn  the  costs  of  SMEs  that  engage  in  innovative  projects; 
the 
SNITS 
development  of  a  business  plan:  SMINT 
formation  of  R&D 
consortia  in  particular  for  international  co-operation:  and,  seed  financing  gives  small 
innovative  projects  during  the  stages  before 
feasibility  awards  and  soft  loans  for 
Exoansion 
commercial  financing  is  possible. 
in  small 
Scheme  has  been 
unlisted 
is  being 
innovative 
In  1 9 9 3,  the  Swedish  parliament  decided  to 
launched  by  the  Swedish 
dissolve  the  Wage-Earners  Funds.  A b o ut  ECU  7 70  mio  were  allocated  to  risk  capitai 
operations  (while  a  iarger  ameunt  w as  used  to  create  18  research  foundations). 

A  Swedish  version  of  the  UK  Business 

firms.  A  new  risk  capitai  operation 

investing 
firms 

introduced,  allowing 

feasibility  awards 

tax  savings  w h en 

that  promotes 

that  supports 

Industry  Fund. 

technology 

for  small, 

transfer 

through 

the 

for 

for 

'/A^ 

In  the  United  K i n g d o m,  the  government's  proposals  in  the  1 9 95  and  1 9 96  W h i te 
Papers  on  competitiveness  include  the  encouragement  of  greater  competition  in  the 
provision  of  capital,  in  particular  to  SMEs;  help  of  growing  businesses  to  get  access 
to  the  most  appropriate  finance  through  a  new  Business  Link  service  in  England, 
Enterprise  Networks 
to 
encourage  prompt  payment;  and  allow  corporate  bonds  into  personal  equity  plans 
and  loosen  restrictions  to  make  it  easier  for  companies  to  issue  bonds. 
In  the  UK, 
that  concentrates  more  than  4 5%  of  the  venture  capitai  funds  in  Europe,  a  number 
of  initiatives  and  schemes  have  developed  like  the  networks  of  Business  Angels  or 
the  development  of  the  'Alternative  investment  Market  ( A I M )'  by  the  London  Stock 
Exchange  in  July  1 9 9 5. 

in  Scotland,  and  Business  Connect 

in  Wales;  continue 

B. 5 

Fiscal 

incentives 

Fiscal  incentives  for  firms  to  perform  R&D  are  n ow  in  widespread  use  in  Member 
States  (Austria,  Belgium,  Greece,  Ireland.  The  Netherlands,  Spain  and  Sweden)  but 
Law  w as 
have  been  abandoned  in  Finland.  For  example,  in  Greece,  the  Investment 
amended  in  1 9 9 4.  It  provides  a  wide  range  of  incentives  (investment  grants,  interest 
subsidies,  tax  allowances  and  increased  depreciation  rates)  aiming  simultaneously  at 
promoting  regional  development. 
to 
revise  the  fiscal  regime  in  order  to  encourage  the  reinforcement  of  the  enterprises' 
o wn  resources.  Self-financing  within  the  SMEs  will  be  made  more  attractive.  Higher 
In  Luxembourg,  fiscal 
fiscal  deductions  will  also  be  linked  to  the  deposit  of  patents. 
incentives  for  material  investments  in  enterprises  have  been  developed  in  a  w ay 
to 
indirectly  promote  innovation  in  firms. 

In  Belgium  the  federal  government  has  plans 

to 

late 

f r om 

integrated  set  of 

the  STIAC,  was  an 

including  dividend  relief 

encourage  multinational 

on  R&D  efforts  were  taken  into  use  in  the 

In  Finland  general  tax  deductions 
In  Ireland,  among  t he 
1980s  but  do  not  belong  any  more  to  the  fiscal  instruments. 
to 
tax  measures 
recommendations 
stimulate  business  R&D, 
t ax 
for  owner  managers,  R&D 
credits,  reduction  of  costs  for  R&D  personnel  and  R&D  service  companies,  and  t ax 
regional 
changes 
headquarters  and  strategic  functions  in  Ireland. 
In  the  Netherlands  ECU  23  mio  per 
year  will  be  given  to  improve  depreciation  flexibility  of  innovative  technologies  d r a wn 
to  Promote  Research  and 
towards  the  Netherlands.  Since  1 9 9 4,  funds  under  the  Act 
Development 
through  tax  incentives,  has  been  increased;  WBSO  is  offered 
reduction  in  personnel  costs  through  a  reduction  of  taxes  and  premiums 
either  as 
paid  by  the  employer,  on  salaries  for  R&D  personnel;  or,  as  an  extra  income 
tax 
reduction  added  to  the  tax  forfeit  for  the  self-employed  w ho  themselves  develop 
R&D  activities 
t he 
beginning  of  1 9 9 6.  Forty  per  cent  may  be  deducted  of  the  R&D  costs  of  enterprises 
that  exceed  the  average  of  the  costs  incurred  during  the  preceding  t wo  years. 

incentives  have  come 

In  Spain  fiscal 

companies 

into  force 

in  SMEs. 

establish 

(WBSO), 

their 

to 

in 

C 

RTD  and  Industry 

in  several 
Many  countries  have  seen  some  changes  of  ministerial  portfolios, 
instances  f o l l o w i ng  a  change  of  government.  The  c o m m on  trend  has  been  to  achieve 
a  more  p o w e r f ul  co-ordination  of  policies 
research  and  human 
resources.  Objectives  coincide  and  all  countries  prepare  or  implement  actions  w i th 
large  similarities,  most  visible  w i th  regard  to  information  society  initiatives.  Priorities 
differ  among  countries  according  to  the  current  situation  of  the  science,  technology 

industry, 

for 

/I4& 

and  innovation  svstem  in  eacn  country.  The  size  ot  individual  economies,  industrial 
structure,  specific  economic  problems  are  liKewise  factors  that  determine  priorities  at 
the 
national  and  regional  level.  Below  are  summarised  characteristic  examples  ot 
latest  developments. 

C. 1 

Technology 

foresight 

Committee 

Information 

foresight  networks 

exercises  using  Delphi-
In  1995  the  first  results  of  large  scale  tecnnoiogy  foresight 
technique  were  puPlisheo  in  the  United  Kingdom,  France  and  Germany.  Already  the 
follow-up  is  seen  in  the  f o rm  of  impact  on  the  government  R&D  expenditure  plans.  In 
ana  Policy  Advice  programme  will  be  extended 
Austria  the  Technology 
are  at  work  in  the  Netherlands  where  aiso 
to  1998.  Technology 
the  major 
the  Consultative 
Ireland  has  also  developed  a  strategy  for  its 
research  organisations  in  its  studies. 
technology 
Policy 
Council  (chaired  by  the  Prime  Minister)  monitors  emerging  technoiogicai  needs  of  t he 
economy.  In  Denmark  a  n ew  Technoiogy  Assessment  Council  has  been  created  to 
give  advice  to  parliament  and  government  w i th  special  emphasis  on  initialising  public 
and 
debates  on  various  emerging  technologies. 
Assessment 
!n 
Luxembourg  a  technology  w a t ch  initiative  is  developing  by  the  Ministry  of  Economy 
and  CRP-Henn  Tudor. 

In  Spain  the  National  Evaluation 
aiso  carries  out  studies  and  prospective  analyses. 

In  Finland.  The  Science  and  Technology 

foresight  exercises. 

for  Explorative 

involves 

Agency 

Studies 

(OCV) 

C. 2  Multiannual 

programming 

Comprehensive  multiannual  programming  at  government 
to 
statutory  yearly  budgets  and  finance  acts,  is  a  common  exercise  in  several  Member 
States.  In  most  of  the  f o l l o w i ng  examples  those  plans  outline  both  the  overall  aims 
and  budget  lines  and  institutions. 

in  addition 

level, 

for 

technology 

programmes. 

for  Economic  Affairs 

innovation 
in  the  United 
In  Finland  a 

Examples  of  annual  expenditure  plans  w i th  almost  equal  details 
relevant  areas  are  those  for  Trade  and  industry  by  the  Cabinet  Office 
Kingdom  and  of  the  Ministry 
(BMWi)  Germany. 
major  exercise  is  performed  every  five  vears  in  order  to  establish  new  generations  of 
national 
represents  a  three-vearly  review. 
Programme 
implementing  a  third  Three-year 
Portugal  muitiannuai 
government's  programme. 
was  introduced  in  June  1 9 9 5. 
three-yearly  proposal 
industry 

!n  Germany  the  Bundesbericht 
1996 
Greece  is  in  the  middle  of  the  2nd  Operational 
is 
(1994-99), 
In 

In  accordance  w i th  established  practice  in  Sweden  a 
for 
is  due  in  September  1 9 9 6,  following  a proposal 

institutes 
In  Spain  the  Third  national  plan 

and  Technology 
for 

(EPET  II) 
research  and 

is  part  of 
for  R&D 

the  n ew 
(1996-1999) 

while 
(1994-96). 

the  best  R&D 

financing  of 

for  Research 

for  research 

Forschung 

innovation 

in  1 9 9 5. 

Italy 

plan 

C.3  White  Papers 

the  political 
White  Papers  and  national  strategies  or  development  plans  harness 
authority 
for  further  co-ordination  over  time  and  over  otherwise  separate  budget 
lines.  Examples  relevant  for  innovation  vary  in  detail  and  scope.  A  national  strategy 
In  Finland  a  strategy  for 
for  science  and  research  is  being  established  in  Denmark. 
innovation  was  published  in  1 9 93  and  a  White  Paper  entitled  Industrial  Policy  Vision 
In 
was  published  in  1 9 96  and  is  expected  to  be  followed  by  a  technology  strategy. 

^? 

France  me  Ministry  ot  industry  has  announcec  a  oian  for  innovation. 
me  Netherlands  nave  o o t h.  in  1 9 9 5.  proaucea  White  Papers  on  the  theme  of 
in 
knowledge  society. 
document.  Shaping  our 
century,  prepared  for  the  Minisier 
Kingdom,  f r om  where 
exercise  an  annual  institution. 

Ireland  and 
the 
Ireland  -auncned  a  new  15-year  strategy 
;n 
for  Enterprise  and  Employment, 

21st 
Finally,  the  United 
tne 

the  terminology  oi  White  Papers  originates.  n-as  made 

fuiure:  A  strategy 

In  1 9 96  Forfas 

ror  enterprise 

ireiana 

the 

in 

C.4 

New  national  organisational 

forms 

Reallocation  of  government  portfolios  ana  departmental  responsibilities  are  another 
inaicator  of  poiicv  development.  The  trend  in  several  countries  has  been  to  maintain 
or  raise  the  level  at  w n i ch  R&D  exoenditure 
industry 
relevant  budgets. 

is  co-ordinateo  w i th  other 

for  Economic  Affairs. 
is  the  forum  for  co-operation  agreements 

In  Austria  the  t wo  main  ministries  are.  n o w,  the  Ministry 
the  Arts  and  the  Ministry 
Science  Policy  Conference 
competencies  of  federal,  regional  and  community  authorities. 
and  information  technology 
legislation  on  the  advisory  system  nas  oeen  passed  in  1995  and  1 9 9 6. 
the  Science  and  Technology  Policy  Council 
emerging  technoiogicai  needs  of  the  economy. 

and 
inter-ministerial 
the 
involving 
In  Denmark  research 
is,  since  1994.  combined  in  one  Ministry  and  a  new 
In  Finland 

(chaired  by  the  Prime  Minister)  monitors 

for  Science,  Transports 

In  Belgium  the 

for  Education,  Science,  Research  and  Technoiogy 
for  Researcn,  Technology  and 

In  Germany  the  fédérai  government  orovides  most  of  its  research  finance  through  the 
(BMBF).  By 
reorganised  Ministry 
creating,  in  1 9 9 5.  the  Council 
under  the 
Fédérai  Chancellor  a  piatform  has  Peen  made  for  directing  the  dialogue  between 
science,  industry,  unions  and  politics  towards  central  questions  for  the  future. 
In 
has  been  created  by  merging  the  Ministries 
Greece  a  new  Ministry 
in  itaiy  the  three-yeariv  clans  will  be  updated 
of  Industry,  Trade  and  T o u r i s m. 
Economic 
f r om 
annually  under  guidelines 
Planning; 
that  w o u ld  entrust  an 
external  observatory  w i th  the  evaluation  of  universities  and  public  research  bodies; 
the 
AG/TEC. 
Minister  of 

the 
a  parliamentary  c o m m i t t ee 

inter-ministerial 
is  examining  a  bill 

the  agency 
industry. 

has  been  set  up  under 

of  Development 

initiative  of 

innovation, 

Committee 

Innovation 

the 

for 

for 

to 

(PEDIP 

II,  multiannual 

innovation  policy 

its  aims  concerning  several 

information  society,  vocational 

issues 
In  Portugal,  the  new  government  has  stated 
the  best  R&D 
central 
for 
Institute 
organisations, 
the 
SupDort  of  Small  and  Medium 
for  example); 
important  changes  are  made  in  t he  Ministry  of  Economy  and  the  Ministry  of  Science 
f o r w a rd  an 
and  Technology. 
f r om 
approach  already  introduced  in  the  Third  national  plan 
June  1 9 9 5. 
(OST)  has 
been  transferred  to  the  Department  of  Trade  ana  industry 

In  the  United  Kingdom  the  Office  of  Science  and  Technology 

the  new  government's  proposals  carry 

financing 
training,  and 

(1996-1999) 

Firms  and 

investment 

in  1 9 9 5. 

In  Spain 

(IAPMEI), 

for  R&D 

the 

for 

C.5 

Directing  R&D  towards 

innovation 

Following  are  a  number  of  characteristic  examDles  of  Member  States'  programmes 
and  instruments  to  better  direct  research  efforts  towards  innovation  and  international 
competitiveness. 

* * *% 

technology  and  s o f t w a re  development,  and 

in  Austria  the  t wo  main  instruments  are  tne  Researcn  Promotion  Puna  (FFF).  w h i c h. 
in  1 9 9 4,  shifted  its  focus  to  areas  sucn  as  micro-electronics,  environment  protection, 
and 
information 
Technology  Funds  (ITF). 
in  Belgium  the  university-industry  interface  structures  and 
the  science  parks  have  multiplied  during  the  last  ten  years  in  addition  to  sectoral  joint 
in 
research  centres,  jointly  financed  bv  the  fecerai  government  and  the  regions, 
Denmark 
to 
strengthen  research  in  universities  ano  approved  technoiogicai  institutes  as  well  as 
new  strategic  programmes:  THOR  (Tecnno/ogy 
ov  Highly  Oriented  Research)  w h i ch 
is  scheduled 
awarded  to  excellent  scientists  for  basic  research  orpjects  w i th  paramount 
plan 
relevance;  and  a  new  action 
entrepreneurs 
establishment  and  survival  of  n ew  enterprises,  especially  SMEs. 

for  1997  will  consist  of  a  iimited  number  of  big  research  grants 
industrial 
the 

research  package  has  ailocated  money 

the  g o v e r n m e n ts 

focuses  on 

Innovaiion 

fowards 

latest 

the 

(VTT)  w h i ch 

of 
for  innovation  w i th  a  major  shift  of  its  interventions 

technology  strategy  will  act  as  a  guideline  for 
In  Finland  the  above  mentioned  Finnisn 
iTEKES)  which  has  a  centrai  funding  role  for 
the  Technology  Development  Centre 
implementation 
both  university  research  and  industrial  research,  as  well  as  for  other 
bpdies.  for  example  the  Technical  Researcn  Centre  of  Finland 
is  the 
single  largest  research  institute;  both  TEKES  and  VTT  have  been  through  a  process 
Industry 
of  evaluation  in  order  to  improve  effectiveness. 
t o w a r ds 
has  announced  a  plan 
issues  (ECU  155  mio  will  be  devoted  to 
the  development  of  Key  Technologies-re\ate6 
schemes.  The  SME,  Trade  and 
a  call  for  proposals)  as  well  as  of 
Handicraft  Ministry 
(ANVAC) 
devoted  to  the  development  of  innovation  w i t h in  the  service  and  trade  sectors.  The 
de 
Ministry 
Ressources  Technologiques 
n ow  going  on  in  six  regions.  As  f r om  1 9 9 7.  a  bonus  aid 
of  5  to  1 0%  will  be  given  to  those  big  companies  which  will  include  partnerships 
w i th  SMEs  in  their  projects.  Medical  research  action  lines  will  be  modified  to  increase 
mobility  between  research  and  clinical  activities,  and  to  focus  research  on  medicai 
research  and  bio-sciences. 

has  announced  the  creation  of  a  new  public  agency 

labelisation  of  Centres 

In  France  the  Ministry 

its  priorities 

of  Research 

has  among 

the  ANVAR 

the 

In  Germany  the  introduction  of  model  projects 
ILeitprojekte)  will  help  to  an  early 
understanding  bv  researchers  and  users  of  h ow  to  exploit  the  existing  R&D  potential: 
and  the  Ministry  for  Economic  Affairs 
(BMWi)  has.  since  unification,  stepped  up  its 
commitments  to  programmes  for  R&D  personnel,  innovation  support,  and  research 
suppprt  in  the  new  Lander,  for  example  in  the  form  of  Innovationkollegs 
involving 
different  scientific  departments  and  innovative  enterprises,  each  for  a  period  of  five 
In  Greece  the  management  of  existing  schemes  and  the  launch  of  n ew  ones 
years. 
Social  Funds;  a 
continue 
for 
number  of  programmes  require  the  active  participation  of  enterprises:  Programme 
the  development 
the 
for  improving 
(SYN)  and  Programme 
industrial 
of  targeted 

implementation  of  the  Community 

(EKVAN),  Co-financing  programme 

(PAVE),  Research  consortia 

to  be  based  on  the 

competitiveness 

of  industrial 

fellowships 

research 

research 

(YPER). 

In  Ireland  an  additional  ECU  5  mio  allocation  for  science,  technology  and  innovation 
programmes  w as  announced  in  March  1 9 96  wnilst  the  overall  government  response 
to  the  Science.  Technology  and  Innovation  Advisory  Council 
report  is  yet  to 
be  finalised:  the  Programmes 
(PATs)  represent  a  medium 
to  long-term  strategy  for  the  development  or  a  technological  infrastructure  to  serve 
Irish  industry. 

In  Italy  the  Three-year  plan  ror  research  and  innovation 

Technologies 

in  Advanced 

(STIAC) 

1994-96 

/t*$ 

considers,  that  the  Inter-Universitv 
Consortia  wnich  have  Deen  successful  ana  offer 
prospects  tor  a  greater  efficiency  in  me  use  OT resources,  snouid  be  categorised  as 
institutions;  and  gives  directions  ror  CNR  'greater  integration  of  its  activities  w i th 
rhose  ot  other  puoiic  and  private  entities!.  ENEA  (since  the  1980s  diversifying 
into 
new  Technologies,  energy  and 
research  bodies  of  other 
Technological 
Ministries;  - under 
Researcn  (MURST)  new  contracts  have  been  signed  in  the  framework  of  the  National 
Researcn  Programmes 
on:  technologies  for  tne  construction  and  the  protection  of 
buildings,  environment,  and  cardiologyt 

the  environment)  and 
for  University 

and  Scientific 

the  Minisiry 

and 

in 
In  the  Netherlands  the  policy  initiatives  outlined  in  the  White  Paper  "Knowledge 
action"  are  being  developed,  for  example:  subsidies  tor  Project-basea 
co-operation 
will  be  given  to  promote  co-operation  between  ousinesses  themselves  and  b e t w e en 
private  sector  and  research  institutes  m  a  range  of  technology  fields.  The  Cabinet 
In  Portugal  the 
wiil  be  establishing  Leading  Technological 
for 
above  mentioned  administrative  restructuring  aims  at  more  efficiency,  including 
In 
the  t wo  main,  EU  suoported.  incentive  programmes  PEDIP  II  and  PRAXIS  XXI. 
science  poiicy  the  focus  will  be  on  the  support  to  the  excellence  of  research  t e a m s, 
instead  of  physical 
as  weli  as  on 
training  and  employment  ot  researchers, 
to 
infrastructure. 
the 
encourage 
promotion 
(PACT!) 
concentrates  on  and  improves  existing  instruments  and  creates  new  mecnanisms. 

include  a  stronger  c o m m i t m e nt 
for 

the  National  programme 
system 

science-iechnology-industry 

intangicle 
and 

innovation  oolicv  wilj 

the 
Industrial 

(Topinstituten). 

investments. 

In  Spain 

linking-up 

institutes 

the 

of 

for 

at  eight  universities  started  their  activities 

centres 
the  National  Boara 

in 
In  Sweden  28  competence 
Technoiogicai 
1995  w i th  support 
f r om 
in 
Development 
(NUTEK)  aiming  at  creating  concentrated 
development 
which  industrial  partners  participate  actively:  RTD  consortia 
is  a  temporary  5-year  programme  under  w h i ch  22  ccnsortia  have  been  launcned. 
In 
the  United  Kingdom  the  major  influence  of  the  Foresight  programme  is  seen  on  for 
example  the  S&T  priorities  ot  the  research  councils  and  government  departments: 
since  March  1 9 9 5.  13  new  LINK  programmes  have  been  targeted  on  kev  areas  of 
promise  and  research  relevant  to  business  will  be  taken  into  account  w n en 
f u n d i ng 
universities 

research  environments 

for  regional 

Industrial 

and 

C.6 

SMEs.  innovation  support  infrastructures  and  regional  dimension 

the  co-operation  among  major 

levei  has  been  accompanied  by 

Re-organisation  at  government 
institutions  as  w e l l.  Intermediary  institutions  for  the  suppprt  of  technology 
and 
private  non-profit  entities  outside 
making  this  n e t w o rk  of 
national  initiatives  is  illustrated  in  some  ot  the  examples. 

restructuring  of 
transfer 
institutions  are  often  organised  as 
the  oubiic  sectcr.  The  regional  dimension  of 
intermediaries  more  efficient  and  better  connected  w i th 

researcn 

for 

Institute 

the  Austrian 

the  Promotion 

intends  to  start  a  firm-to-firm  visit-scheme;  the  Austrian 

has 
In  Austria 
(WIFI), 
for 
develpped  a  comprehensive  management  consultancy  service  and  the  Ministry 
Industrial 
Economic  Affairs 
transfer  programme  w i th 
Promotion  Fund  has  launched  an  innovative  technology 
'Contact  Projects' 
to 
marketable  products;  the  European  Recovery  Programme  Fund  (ERP)  has  shifted  its 
emphasis 
development, 
in  addition  to  other 
infrastructure  and  internationalisation.  The  Innovation  Agency, 

the  possibility  of  grants  or  subsidised 

the  Economy 

innovation, 

investment 

promotion 

including 

regional 

loans 

from 

of 

to 

*Alo 

or  Austrian 
activities  mentioned  above,  is  the  general  secretariat  tor  the  Association 
in  Belgium  the  Fiemisn  government,  for  examoie,  fosters  the 
Technology  Centres, 
establishing  of  collaboration  clusters  among  enteronses  concerned  mainly  w i th  R&D 
and  the  supply  OT  technological  services. 

entrepreneurs 

plan  wwards 

for  1 9 96  and  1997  aims  at: 
In  DenmarK  the  Action 
strengthening  the  entrepreneurial  culture,  reducing  administrative  Purdens.  improving 
access  to  financing  of  innovation,  strengtnening  and  rationalisation  of  the  regional 
advice  and  support  services,  and  making  special  efforts  to  suppprt  high  t e ch  ana 
inncvative  entrepreneurs. 
connection  w i th  t he  best  laboratories  of  universities  and  research  institutes  as  one  of 
the  iinks  between  R&D  and  the  regional  policy. 

In  Finland  Centres  of  Expertise 

are  established 

in 

in  the  innovation 

plan  will  imply  a 
In  France  the  n ew  strategy  foreseen  tor  ANVAR 
better  follow  up  of 
fast  g r o w i ng  companies,  introduce  project  evaluation  criteria 
concerning  the  impact  of  the  projects  on  g r e w th  and  employment,  reinforce  the  role 
of  regional  delegations,  and  offer  new  financing  instruments;  as  already  mentioned, 
for  SMEs.  Further  plans  to  reorganise  the  support  to  new  companies  creation  and 
survival  are  expected  in  the  a u t u m n.  The  regional  dimension  in  national  STI  policies 
is  strengthened  bv  the  ORATE  (Observation  Régionale  de  l'Appui  Technologique 
aux 
initiative,  taken  Py  the  Ministry  of  Education  and  Researcn.  This  initiative 
Entreprises! 
links 
regional 
authorities  to  assure  a  coherent  set  of  measures.  ORATE 
focuses  aiso  on  human 
resource  requirements  and  on  the  medium  term  economic  impact  w i t h in  the  region  of 
technology  d i f f u s i o n. 

layer  ot  SMEs  w i th 

innovative  g r o w th 

responsibilities  pf 

the 

the 

to 

In  Germany  three  current  programmes  of  the  BMWi  will  be  merged  into  one  federal 
t he 
programme  w i th  a  considerable  increase  of  funding;  programmes  under  BMBFTor 
new  Lander  provide  enterprises  support 
laoour  costs  w h en  new  scientists  or 
engineers  are  recruited,  give  suppprt  to  small  enterprises  for  the  use  of-external  R&D 
contracts,  support  key  technoiogy 
In 
technoiogicai  development 
the  decentralised  establishment  of  sectoral 
Greece 
is  in  addition  to 
companies,  science  and  technology  parks  and  liaison  offices 
the 
STRIDE-Hellas 
(PEPER)  and 
Projects 
Technoiogy  Brokerage  are  launched.  In  Ireland,  in  addition  to  existing  programmes, 
37  county  enterprise  boards  have  been  established  to  encourage  new  firm  f o r m a t i on 
and  to  assist  micro  enterprises  already  in  existence  tc  develop;  there  is  a  proposal  to 
assist  companies  to  f o rm  company  netwprks. 

fields  ano  support  establishing  new 

o r o g r a m m e.  Programmes 

for  Demonstration 

f i r m s. 

In  Italy  the  rationalisation  of  the  technoiogicai  infrastructure  for  SMEs  is  one  of.  the 
aims  in  the  Three-year  plan 
1994-96.  A  number  of  local 
for  research  ana  innovation 
initiatives  (incubators,  research  laboratories,  information  society  experiments  etc.) 
have  been  taken  involving  local  industry,  Chambers  of  Commerce,  universities  and 
regional  authorities. 
In  the  Netherlands  a  range  of  innovation  facilities  for  SMEs  and 
which  operate  as  tax  and  credit  incentives  has  been  mentioned  above.  A m o ng  n ew 
improve  co-operation  b e t w e en 
projects  can  be  mentioned  Enterprise  Houses 
intermediary  t e c h n o l o gy  transfer  organisations.  Also  nationai  instruments  for  generic 
technologies  have  facilities  for  SMEs. 

to 

In  Portugal  the  above  mentioned  IAPMEI  wiil  be  more  closelv  involved  in  providing 
advice  and  service 
to  SMEs:  the  science  park  Taguspark  has  iaunched  so-called 
anchor  projects  w i th  t he  involvement  of  large  R&D  institutes,  companies  and  banks; 

the  potential  of  science  and  technoiogy  parks  in  the  Lisbon  area  and  incubation 
centres  is  being  studied.  One  of  the  three  instruments  of  the  technological  policy 
in  Spain  under  the  Ministry  of  Industry  is the  Institute  of  the  Small  and  Medium  Sized 
Industrial  Enterprises  (IMIP). 

resources 

larger  companies  as 

for  regional  development 

in  Sweden,  mentioned  above, 
The  22  new  RTD  consortia 
institutes, 
are  helping  SMEs  in  supported  regions  to  co-operate  and  to  regard 
for  competence.  Other  new 
universities  and 
instruments  are,  for  example  a  pilot  programme  for  technology 
to  SMEs 
from  industrial  research  institutes  which  aims  at  creating  longer  lasting  networks, 
ALMI  Business  Partners  which  is  a  government-owned  consultancy  with  40  offices, 
in  technoiogicai  services  between  SMEs  and  public 
and  support 
In  the  United  Kingdom  the  Cabinet  Office  foresees  a  further 
technology  providers. 
increase  in  the  number  of  'Teaching  Company  Scheme'  programmes,  as  well  as  the 
growth  of  a  similar  'College-Business  Partnership' 
launched  early  1996  and  a  rapid 
uptake  by  companies  of  the  new  services  from  'Design  Counsellors'  which  are  an 
addition  to  the  Business  Link  scheme. 

the  trade 

transfer 

to 

^/llZy 

Recent  White  Papers  and  launch  of  strategic  plans  of  Member 
States 

AUSTRIA 

"Technoiogiepolitisches  Konzeot  der  Bundesregierung 
Seibersdorf  & Joanneum  Research,  Mav  1996. 

(draft)",  WIFO, 

"Informationsoffensive.  Bundeskanzler  Vranitzky  stellte 
Weichen  fur  den  Informations-Highway",  in Innovativ.  3/1994  Oktober. 

in  Alpbach  die 

- 

"BMoWV 
Grussworte 
webmaster@iis.joanneum.ac.at.  (04/07/95). 

Informationsgesellschaft 
Bundesminister 
von 

-  Telekom 
Mag. 

Viktor 

Initiative  Osterreich, 
from 

Klima", 

DENMARK 

"Research  in  perspective,  White  paper  on  a  national  research  strategy", 
Ministry  of  Research  and  Information  Technology  1995. 

"From  vision  to  action, 
Information  Technology,  1995. 

info-societv  2000",  Ministry  of  Research  and 

"Erhvervsredegorelse  1995",  Ministry  of  Industry  and  Business.  1995. 

"Open  dialogue  on  Danish  research  for  the  future,  Research  policy  1996 
report  to  the  Danish  Parliament",  Ministry  of  Research  and 
Information 
Technology,  June  1996 

FINLAND 

"Towards  an innovative  society,  A  development  strategy  for  Finland",  Science 
and Technology  Policy  Council  of  Finland.  1993. 

"Finland's  way  to  the  information  society,  The  national  strategy",  Ministry  of 
Finance,  1995. 

"National 
Policy  Council, November  1995. 

innovation  system  and  employment".  Science  and  Technology 

"Industrial  policy  vision",  Ministry  of  Industry,  May  1996. 

FRANCE 

"Les  100  technologies  clés  pour  l'industrie  française  à  l'horizon  2000", 
Direction  générale  des stratégies  industrielles,  1995. 

L'innovation  dans  les  PME,  Rapport  Chabbal,  1995 

GREECE 

2nd  Operational  Programme  for  Research and Technology  (EPET  II). 

Operational  programme  for  the  Industry  (1994-1999) 

GERMANY 

"Bundesbericht  Forschung  1996",  BMBF,  1996. 

"Forschungsleistungsplan  1994  des  Bundesministeriums 
BMWi,  1994. 

fur  Wirtschaft", 

IRELAND 

"Making  knowledge  work  for  us,  A  strategic  view  of  science,  technology  and 
innovation  in  Ireland", STIAC,  1995. 

"Shaping  our  future:  A  strategy  for  enterprise  in  Ireland  in  the  21st  century", 
Forfas,  May  1996. 

ITALY 

"Ricerca  e  innovazione  per  io  sviluppo.  Piano  triennela  della  ricerca  1994-
1996",  MURST,  1994 

THE  NETHERLANDS 

"Kennis  in  beweging,  Over  kennis  en  kunde  in de  Nederlandse  économie",  EZ, 
OC&Wand  LNV,  1995. 

"SWAP  2000",  EZ, and OC&W,  1996 

PORTUGAL 

"Program  do  XII  Governo  Constitutional",  1995. 

SPAIN 

"III  Plan  Nacional  de  l + D  1996-1999".  CICYT. 

"Libro  Blanco  de la industria:  Una  poiftica  industria  para  Espana". 

"Estrategia  Tecnologfa  Energética  de  Largo  Alcance  (ESTELA)",  Ministry  of 
Industry  and  Energy,  1995. 

SWEDEN 

"Nâringsdepartementet",  Regeringens  proposition  1994/95:100  Bilaga  13, 
1994. 

"Âtgarder  for  att  bredda  och  utveckla  anvandingen  av  informationsteknik", 
Regeringens  proposition  1995/96:125.  1996. 

"Samverkan  mellan hôgskolan och  naringslivet".  Ministry  of  Industry,  1996. 

"Forskning  och  pengar",  Ministry  of  Education.  1996. 

THE UNITED  KINGDOM 

"Competitiveness:  Forging  ahead. White  paper",  DTI,  1995. 

"Trade  and  Industry  1996,  The  Government's  Expenditure  Plans  1996-97  to 
1998-99",  Presented  to  Parliament  by the  President  of  the  Board  of  Trade  and 
Industry  ...,  1996. 

"Developing  a  Winning  Partnership",  A  report  of  a  joint  City/Industry  working 
group  established  by the  Innovation  unit  of  DTI. 

"Foresight,  First  progress  report",  OST.  1996. 

"Competitiveness,  Creating  the  enterprise  centre  of  Europe",  HMSO,  June 
1996. 

"Forward  look  of  government-funded  science,  engineering  and  technology 
1996",  HMSO. 

y 

ANNEX  2.3. 

Statistical tables 

ENCL0S-3.DOC  18.10.96  10.30 

*//•£ tf 

Table 1 

Europe  in  World-wide  research:  R&D  indicators  for  the  Triad 

Total  R&D expenditures  (MECUs)  1994 

121  882 

142 047 

104 069 

EU15 

USA 

JAPAN 

Total  R&D expenditures  as % of  GDP 1995 

Total  R&D expenditures  per  inhabitant 
(ECUs)  1994 
%  of total  R&D expenditures  financed  by 
governments  1993 
%  of total  R&D expenditures  financed  by 
industry  1993 
Number  of  researchers  1993 

Number  of  researchers  per thousand 
employed  1993 
Number  of  researchers  in industry  1993 

Number  of  researchers  per thousand 
employed  in industry  1993 

1.91 

329 

39.6 

53.5 

2.45 

545 

39.2 

58.7 

2.95 

833 

19.7 

73.4 

774  071 

962  700 

526  501 

4.7 

7.4 

8.0 

376 000 

765  000 

367  000 

2 

6 

6 

Source: European  Commission. DG XII  from  OECD data 

Iable_2 

Recent trends  for  R&D  undertaken  by  firms 
(US  prices  1987,  billions  ECUs, average  annual  growth  rates) 

Source: MERIT,  data:  OECD, EUROSTAT.  IMF.  UNIDO and UNESCO 

Percentages 

11981-1991 Q1991-1993 

fat, 

Table 3 

Positions  of  the  Triad  by  technoiogicai  area,  measured  in  patents,  1993 

EUROPE 

Electronics  /  electricity 

Instruments  /  optics 

Chemicals  /  pharmaceutical  prod. 

Industrial  processes 

Mechanical  engineering  / 
transports 
Consumer  goods 

All  area 

Share  (%)  of  Eurooean patents  in 
the  Worla 
USA 

Japan 

EU 

Share  i%)  of  US patents  in  the 
World 
USA 

Japan 

5U 

34.2 

37.8 

40.3 

50.1 

58.5 

64.0 

46.4 

j 

i 

| 

j 

30.0 

32.4 

33.7 

25.6 

19.2 

16.9 

27.3 

31.8 

23.4 

20.0 

16.6 

15.5 

8.0 

20.9 

11.5 

14.9 

28.2 

22.3 

23.6 

19.1 

16.6 

46.7 

50.8 

51.0 

50.5 

45.4 

50.1 

48.7 

35.4 

28.0 

19.7 

19.3 

22.5 

12.5 

25.0 

Source:  USPTO. 
Data:  Treatments  STO  and  CHI-Research.  1995.  UNESCO reoon  on  Science  in  the  World. 

Table 4: 

R&D  EXPENDITURES  (AS  A  %  OF GDP) AND THEIR  EVOLUTION 
FOR  SELECTED  COUNTRIES 

R&O expenses as a % of GNP 

Source:  World-wide  report  on  competitivitv.  World  economic  forum.  IMD 

Table 5 

Gross Domestic  R&D Expenditures  as % of GNP by Member  State 

3  -r 

2.5  + 

2  + 

1.5  + 

1  + 

0,5  + 

F 

UK 

DK 

NL 

B 

I 

IRL 

E 

P 

GR 

Reference  years:  1 9 91  (B),  1 9 92  (D,  F,  IRL,  P),  1 9 93  (UK,  DK,  NL,  I,  E,  GR) 

Source:  Eurostat,  research  and  development,  annual  statistics  1995. 

labiée 

DISTRIBUTION  OF INNOVATION  EXPENSES IN  1992  IN SOME 
MEMBER  STATES  * 

Testing 

Market analysis 

Others 

Product design 

R&D 

Patents 

•  In  1992.  in the  12  Member  States  of  that time  except  Luxembourg, plus Norway,  Switzerland  and 
Iceland 
Source: EVCA,  Ernst & Young 

'jlf 

Table 7 
DISTRIBUTION  OF  INNOVATION  EXPENSES  IN  1 9 92  IN  SOME  MEMBER  STATES  BY  FIRM  SIZE4 

100% 

9 
a 
3 
c 
0 

OL 

•  Market analysis 

•Testing 

•  Others 

a  Product design 

a  Patents 

•  R&D 

*  In  1992  in  the  12  Member  States  of  that  time,  except  Greece,  Portugal,  United 

Kingdom and France.  For Germany, only data relative to large firms are known. 

Source: CIS,  Preliminary results 

WAYS  OF KEEPING UP COMPETITIVITY  IN TERMS  OF PRODUCT 
INNOVATION  IN SOME MEMBER STATES  * 

60  T 

50  + 

Adv. on the 
compet In 
the design 
& planning 

Complexity 
of the proa. 

Secret 

Patent* 

Registration 
ofconcept 

I Large  Q Medium  •  Small 

*  In 1992 in the  12  Member  States of that time, except Spain, France, Italy, Greece, 
Portugal and United  Kingdom 

Source:  CIS  Preliminary  results 

/.  AV^ 

Table 9 

IMPORTANCE  OF FACTORS  HAMPERING  INNOVATION 

60 

, 

Economic 
factors 

Firms linked 
factors 

I.P.R. 

Too simple to  Customers' 

Timetable 

copy 

reaction 

Lack of tech. 
opportunities 

QNon-inno  Qlnno* 

*  Companies  having  undertaken  product  or  process  innovation  during  the  period  1990-

1992 

Source:  EUROSTAT (CIS). Preliminary results 

Table  10 

IMPORTANCE  OF THE OBJECTIVES OF INNOVATION 

90  T 

lllllllll 

Increase 
market 
share 

Lower 

prod, cost  quality 

improve 
Product  Widen 
prod. 
prod. 
range  markets  flexibility  conditions  product 

Improve  Replace  Decrease 
working  obsolete  damages 

Create 
new 

to the 
environ. 

Percentage  of  firms  considering  these  factors  as  very  important  or  essential  (reference 
years:  1990-1992) 
Source:  CIS (Preliminary results) 

Objectives 

* A*> 

Table 11 

Significant  correlation  coefficients  between  employment,  product 
innovation,  process  innovation  average  growth  rates  in  various 
European  countries  (1970  -  1992) 

Product  innovation 

Process  Innovation 

Year: 

70-90 

80-90 

39-92 

91-92 

70-90 

80-90 

§ 5 52 

91-92 

Belgium 

Denmark 

France 

Germany 

Italy 

Netherlands 

Norway 

Spain 

United  Kingdom 

+ 

+ 

+ 

+ 

+ 

+ 

+ 

+ 

+ 

+ 

+ 

+ 

+~ 

- 

+ 

+ 

+ 

+ 

+ 

+ 

+ 

5 

" 

0 

6 

+ 

+ 

0 

0 

+ 

5 

- 

- 

Ô 

5 

+ 

+ 

+ 

+ 

+ 

+ 

+ 

+ 

+ 

+ 

+ 

+ 

+ 

+ 

- 

+ 

5 

+ 

+ 

+ 

+ 

+ 

5 

- 

- 

5 

+ 

+ 

5 

5 

+ 

5 

-

5 

5 

5 

+ 

Source: EIMS, Innovation  and employment in Europe.  CIS data, Licht,  1995 

Iable_L2 

Changes  in employment  in  micro-firms  and small, medium  size  and  large 
firms,  Europe-15,  1988-1995,  1 9 8 8 = 1 00 

110 T 

105 -r 

100 

SmaN 

1988 

1989 

1990 

1991 

1992 

1993 

1994 

1995 

Source: Research and studies on small firms, ElM,  Vol. A, n°  11/12,  November  1994 

sfZ* 

Table  13 

C o m p a ny  registration  per  c o u n t ry  1 9 8 8 - 1 9 9 3,  1 9 8 8=  1 00 

Germany  1 
Germany  2 
Belgium 
Denmark 
Spain 
France 
Greece 
Ireland 
Italy 
Luxembourg 
Netherlands 
Portugal 
Un.  Kingdom 
Austria 
Finland 
Norway 
Sweden 

1988 
100 
n.d. 
100 
100 
n.d. 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 

1989 
103 
n.d. 
100 
117 
100 
101 
84 
99 
95 
130 
109 
112 
109 
115 
108 
n.d 
99 

1990 
114- 
100 
95 
117 
99 
99 
70 
98 
94 
137 
112 
125 
109 
83 
95 
76 
117 

1991 
120 
110 
93 
143 
107 
91 
62 
n.d 
114 
140 
121 
119 
91 
79 
88 
n.d 
101 

1992 
122 
102 
97 
131 
118 
90 
69 
n.d 
103 
149 
135 
146 
75 
91 
92 
52 
84 

1993 
125 
101 
n.d. 
n.d. 
n.d. 
90 
76 
n.d 
97 
159 
n.d. 
141 
67 
102 
96 
n.d 
94 

change  in  % 
+  25 
+  1 
-3 
+  31 
+  18 
-10 
-24 
-2 
-3 
+  59 
+  35 
+  41 
-33 
+  2 
-4 
-48 
-6 

Median  Value 

100 

103 

99 

107 

99.5 

99 

-1 

Germany  1 refers  to  the  former  West  Germany,  Germany  2 to  re united  Germany 

Sources: 

Germany 
Austria 
Belgium 
Denmark 
Spain 
Fin/and 
France 
Greece 
Ire/and 
Italy 
Luxembourg 
Norway 
Netherlands 

Portugal 
United  Kingdom 
Sweden 

IfM,  Bonn 
IFG Databank,  Vienna 
National  Statistical  Office 
Danish  Statistical  Office 
Office  of  industry  registration  and IKEI estimates 
Finnish  Statistics,  Company register 
INSEE,  SIRENE file,  1994, ANCE 
National  Statistical  Office  of Greece 
Inventory  of  Industrial  Production  1987-1990 
Movimprese  Data Bank 
Comapny  register 
Central  Statistical  Office 
Van der Hoeven,  WHM and  WHJ  Verhoeven,  Creatie en 
teloorgang  van arbeidsplaatsen.  Studies  and research  on  smalt 
firms,  ElM,  1994 
INE-Monetary  and Financial  Statistics 
Estimate  of  company  birth.  National  Westminster  Bank 
Swedisk  statistics 

Ml 

Table 14 

Impact  of  innovation  on  employment.  The  case  of  Italy 

Employment  Growth  Rates 

Innovative 

companies 

Non-innovative 

companies 

Size 

20-199 

200-499 

500  + 

Employment 
Growth 
1992 
1.07 

1.01 

0.98 

Productivity 
Growth 

Export 
share  1992 

1.12 

1.14 

1.10 

73.0 

81.3 

98.3 

Employment 
Growth 
1992 
1.03 

| 

j 

0.98 

0.94 

Productivity 
Growth 

Export 
share  1992 

1.03 

0.95 

0.86 

59.0 

64.5 

68.1 

Source:  ElMS, Impact  of  Innovation  on Employment  in  Italy. Analysis  from  CIS data,  1995. 

Intangible  factors  and  competitiveness 

Table  15 

Innovation 

Patents 

Quality 

Promotion 

Processes 

Sales effort 

-2 

0 

2 

4 

6 

8 

Emerging  market share 

Source: PIMS  1994. 

QLow 

D Average 

flHigh 

> 
3 
3 
C 
u 
9 < 

O 

3 
CO 
3 
Ot 
5-
o 

-I  <* 
10 

PIMS  (Profile  Impact  of  Market  Strategy)  pioneered  by  General  Electrics  and further  developed  at 
Harvard. PIMS associates  Ltd  (USA)  and selected  academic  partners  including  the  Irish 
Management  Institute  are responsible  for  PIMS data  gathering  research  and  consulting. 
Analysis  carried  out  for  units  within  large  companies  in  Northern  America  (mainly  United  States) 
and in  Europe  (50%  in the  United  Kingdom) 

/III 

Table  16 

VENTURE CAPITAL 
DISTRIBUTION  OF STAGES  IN PERCENTAGE OF INVESTMENTS  IN 
EUROPE IN  1995* 

Expansion 

52.8% 

Replacement 

9.8% 

Buy-out 
21.5% 

*  15 European  Member  States  except  Luxembourg, plus Norway,  Switzerland  and 

Iceland 

Source: EVCA, Ernst & Young 

Table 17 

DISTRIBUTION  ON INVESTMENTS  IN  1995 
BY INVESTED  AMOUNT 

•Buy-Out 

•  Replacement Capital  Q Expansion 

I Start-up & Seed 

Source:  EVCA  -  Ernst  &  Young 

/l$U 

IittaJA 

investment»  in  Venture  capital  in  Europe  and  the  United  States  ( 1 9 9 5) 

Total fnvestmema 

U8A(1) 

TScu 
5  748.000  Jo** 1.100 

UE{2) 

KECU 
è.546,000 

+ 2 

4.9SS 

445 

20 
S8 
10 

1.475.000 
3.307.000 
•32.000 

Invaatmanta par 
stags 
taad & start-up 
development 
Leveraged buy-out 
Investments per 
aaeter 
Informât*-tachno. 
life sdenoee 
non-technology 
avg alia of aaad-
SSÉSL 
(1) Soiérc*:V9ntuf90na (American Company) 
(2IËVCA 

2.041.000 
1.398.000 
1.709.000 
932 

46 
24 
30 

320.000 
2.300.000 
2.900.000 

S.7 
42 
62 

939 

902.000 
422.000 
4.222.000 
260 

16 
8 
70 

•  60% increase In the number of invaatmanta  (1984-1996 period) 
• • 1100 Invaatmanta in the United Statas in  1996. 

IlWf-lft 

laxaaindaotial  contributions In Europfl aa a pafoantage of  flPP  (1893) 

Country 

Germany 
Austria 
Belgium 
Denmark 
Spain 
Finland 
Pranee 
Ireland 
Italy 
Luxembourg 
Norway 
Natharianda 
Portugal 
Unfted Kingdom 
Sweden 

Taxes and social contributions 
% of GDP 
41.4 
43.7 
4 4T 
49.0 
30s 
45.9 
43,2 
36.8'• 
42.3 
45T 
47.6 
47.0 
33.0" 
32.2 
50.6 

•  mt 
••  1992 
Scurca: Eunottat,  Taxes and social contributions  f 982-1 $93 

A\S 

ISSN 0254-1475 

COM(96) 589 final 

DOCUMENTS 

EN 

08  04  15  10 

Catalogue number  :  CB-CO-96-606-EN-C 

ISBN 92-78-11815-X 

Office  for Official  Publications of the European Communities 

L-2985 Luxembourg