Draft opinion of the Committee of the Regions on the "Communication from the Commission to the European Parliament, the Council — Innovation in a Knowledge-Based Economy"
Date: 2001-04-04
Institutions: European Committee of the Regions
Subjects: economic development, innovation, vocational training

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30.
In every Member State, and in respect of the subsidiarity
principle, the regional and local authorities should set up
centres for collecting the material resources needed for crisis
management and assistance, and provide for coordination of
operational teams in order to mobilise significant and sufficient
resources to deal with serious emergencies.

31.
The European Commission is clear in its desire to
integrate the existing programme of measures with the pro-
posed mechanism. The COR supports this as a means of
ensuring greater cohesion and complementarity between the
existing programme of measures and measures that will be
taken under the proposed new mechanism.

Brussels, 4 April 2001.

The President

of the Committee of the Regions

Jos CHABERT

Draft opinion of the Committee of the Regions on the ‘Communication from the Commission to
the European Parliament, the Council — Innovation in a Knowledge-Based Economy’

(2001/C 253/07)

THE COMMITTEE OF THE REGIONS,

having regard to the Communication from the Commission to the European Parliament, the Council —
Innovation in a Knowledge-Based Economy (COM(2000) 567 final);

having regard to the Commission Staff Working Paper — Trends in European innovation policy and the
climate for innovation in the Union (SEC (2000), 1564);

having regard to the decision of the Commission of 26 September 2000, under the first paragraph of
Article 265 of the Treaty establishing the European Community, to consult it on this matter;

having regard to the decision of the Bureau of the Committee of the Regions on 13 June 2000 and the
President’s decision on 15 November 2000 to instruct Commission 6 (Employment, Economic Policy,
Single Market, Industry and SMEs), in collaboration with Commission 5 (Social Policy, Public Health,
Consumer Protection, Research and Tourism), to draw up an opinion on the subject;

having regard to its Opinion on the Green Paper on Innovation (COM(95) 688 final) (1);

having regard to its Opinion on the First Action Plan for Innovation in Europe (COM(96) 589 final) (2);

(1) OJ C 182, 24.6.1996, p. 1.
(2) OJ C 244, 11.8.1997, p. 9.

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having regard to the supplementary Opinion (CdR 419/2000 rev.1 adopted by Commission 5 on
5 February 2001 [rapporteur: Mrs Piikivi (FIN/PES)];

having regard to the draft Opinion (CdR 468/2000 rev.) adopted unanimously by Commission 6 on
19 February 2001 [rapporteur: Mr Keymer (UK — PPE)],

at its plenary session of 4 and 5 April 2001 (meeting of 4 April) adopted the following opinion.

VIEWS AND RECOMMENDATIONS

framework conditions to allow innovation support to develop,
and this clearly involves creating a level playing field.

General aspects of innovation policy

1.
The Committee welcomes the opportunity to comment
on this important communication. In its 1996 opinion on the
European Commission’s Green Paper on Innovation,
the
Committee stressed the important role of local government in
innovation policies. The Committee has continued to stress
the local government role in subsequent innovation opinions.

2.
The Committee believes that this Communication is
generally a well-argued and sound set of proposals designed to
improve EU and individual Member States’ performance in the
field of innovation. Overall, it seems to reflect the current
shared understanding among practitioners and organisations
working in this area.

3.
Nevertheless, the Committee feels strongly that there
must be a concerted effort to increase the coherence between
innovation and other related policies. Economic and social
cohesion policies matter because they help shape the frame-
work in which new clusters of economic activity can take
place. EU Structural Funds for example have been crucial in
creating the infrastructure that helps declining and lagging
regions and areas to put new life into traditional industries,
and to develop new and hi-tech sectors. Skills policies matter
because the source of all innovation is the application of the
human intellect.

The Committee considers the five proposed priority
4.
objectives to be appropriate and relevant as they form part of
a coherent support system for innovation and reflect the key
issues facing the EU as a whole. Individual Member States may
of course have different emphases according to their own
systems and circumstances. The systemic view of innovation
which is based on continuous improvement of processes and
which implies not only the need to increase the knowledge of
individuals but also the development of collective knowledge,
is seen as the most valuable methodology for developing
innovation policies and strategies. The role of the EU and
Member States is therefore to focus on creating the right

5.
A key role for regions and local administrations is to
concentrate on local specific actions such as removing barriers
to the effective operation of the local and regional innovation
system. The Committee believes therefore that innovation
promotion policies should always be designed with sufficient
flexibility to allow localities and regions to design their own
support systems as appropriate.

The Committee believes that

innovation is the key
6.
process that links research with enterprise, and allows jobs,
goods and services to be created as a result.
Innovation
promotion policy should therefore be strategic, and not
sectoral, and as a consequence emphasis should be placed on
ensuring an integrated and coherent approach at all levels.

In particular, the Committee considers that there should
7.
be more emphasis on the strategic role of local government in
promoting and stimulating innovation. Local authorities are
directly responsible for many of the functions which contribute
to the innovation support system. These include economic
development; education and training; development of science,
technology and business parks; land-use planning to assist in
attraction of investment and the formation of clusters, and so
on. Local government systems and structures may vary
between Member States, but they have a common responsi-
bility to act strategically to bring together these various
innovation-related functions (including those provided locally
by national government agencies)
in order to provide a
coherent framework in which firms can operate and innovate.

8. Moreover, local government should actively be encour-
aged to mesh their policies with policies operating at national
and European levels to ensure a strong, united and transparent
framework for the promotion of innovation.

there continues to be
9.
The Committee believes that
excessive red tape affecting SMEs which,
inter alia, stifles
innovation. Moreover, SMEs have to contend with inadequate
innovation and R&D and
measures for the financing of
innovation information systems, which reduce their innovative
capacity.

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Finally, the Committee considers that the Communi-
10.
cation underplays the immense impact
local government
itself can have in stimulating innovation in the local
economy. Local government is a procurer of goods and
services on behalf of the community it serves. It is a direct
provider of services in its own right; and is engaged in
civic participation through,
raising the
information and
example,
for
communications
technologies. Local government has a
role to play in exploiting new technologies;
significant
encouraging
suppliers;
implementing new systems of service delivery; and applying
new forms of management as a public sector employer.

intelligent use of

level of
the

innovative

behaviour

local

its

in

Objective 1 — Coherence of innovation policies

11.
The Committee welcomes the proposal to implement a
framework for dialogue, coordination and cooperation which
will make it possible to identify, evaluate comparatively and
benchmark Member States’ innovation policies and perform-
ance. This dialogue should include relevant actors at all levels
within the Member States, as well as with the EU.

12.
The Committee believes that the European Commission
itself can do more to assist this process. This can be through
the creation of a website; by disseminating good practice on
training technologists to become entrepreneurs; and by issuing
guidance on how to establish effective business incubators.
Moreover, within its own initiatives such as the Framework
Programme for Research and Development, the Commission
could simplify the call procedures and the bidding process in
order to make it less time-consuming and costly for potential
participants.

13.
The European Commission should encourage activities
aimed at establishing contact, cooperation and coordination
between (local and regional) authorities and/or institutions.
This is necessary for example when international cooperation
or coordination is planned. This means not only scaling down
and simplifying rules and procedures but also accelerating
them. It should also be sufficient for participants in initiatives
to show that they have made the necessary efforts to find
international cooperation partners.

15.
At the national level, while always being mindful to
avoid misuse of state aids and distortion of the Single Market,
all Member States could employ fiscal incentives including via
regional and local government to encourage additional efforts
to promote in-company R&D, particularly for SMEs, and new
procedures for knowledge management. These measures,
going with the grain of the market, would do much to raise
the adaptability of enterprises within the EU, relative to their
global counterparts.

16.
The Committee warmly welcomes the European Inno-
vation Scoreboard. This provides a suitably compact range of
indicators that seek to reflect
the various dimensions of
innovation performance across the Union and Member States.
The Commission should ensure that this relatively concise set
of indicators be maintained so that there is a continued
focusing of effort around key priorities.

17.
The Committee recommends that consideration also be
given to drawing up and publishing an innovation scoreboard
at regional
level, enabling local and regional authorities,
the academic community (universities, colleges and research
institutes) and businesses to evaluate and monitor the success
of regional innovation activity.

18.
The Committee believes that the main challenge facing
the Innovation Scoreboard will be to ensure consistency of
data across the EU and over time. Both the Commission and
individual Member States should be urged to increase the
quality and robustness of the European-wide data sets used.
The Scoreboard should be updated frequently and should also
attempt to analyse defined patterns and trends identified in the
management of innovation.

19.
The Committee believes that where suitable indicators
or proxies do not currently exist, efforts should be made to fill
these gaps and to give a more accurate picture of innovation
rates.

The Commission should consider extending the Inno-
20.
vation Scoreboard to include the EU applicant countries,
together with non-EU European countries. This would better
reflect the realities of commercial interaction between organis-
ations and the efficiency of networking in this area within the
European space as a whole.

21.
The Committee supports the efforts of DG Enterprise
to increase the frequency of the Community Innovation Survey
from every four years to every two years.

The Committee notes that, in order to promote inno-
14.
vation,
the fifth RTD Framework Programme (Decision
182/1999/EC, 22 December 1998) requires that research
projects include a Technological Implementation Plan, and
recommends that good examples and operational models of
TIP implementation should be effectively disseminated by
being widely publicised.

The Commission should undertake frequent and regular

22.
reviews of innovation progress by Member States.

23.
The Committee would welcome ideas from the Com-
mission relating to further strands of research to help strength-
en our understanding of innovation systems and ways to
support them.

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Objective 2 — A regulatory framework conducive to
innovation

24.
The Committee supports the intention agreed at the
Lisbon European Council to reduce administrative and regulat-
ory burdens on firms. Indeed, the Committee wishes to see
more positive action taken to deal with excessive bureaucracy.
For example, the greater use of cost/benefit analysis of red tape
should be adopted by Member States. Regulations should have
a finite life, requiring renewed justification if they are to be re-
imposed for a further finite period. The Committee would like
to see indicators covering the extent of red tape, and the efforts
made by Member States to remove it,
included in the
Innovation Scoreboard.

businesses. Innovation is therefore triggering fiercer compe-
tition, rewarding those able to earmark greater resources
— human as well as financial — to introducing planning and
management systems which act as instruments to help reshape
companies’ strategies and organisational structures, provided
they are adequately planned and implemented.

30.
The Committee believes that promoting innovation in
the service sector should not be ignored. This ranges from
those professional and financial services targeted towards
industry and commerce; to broader consumer-oriented activi-
ties such as retail and leisure.

25.
The Committee stresses the importance of innovation-
related intellectual property in the knowledge-based economy
and notes that application of research findings requires clear
guidelines on ownership relations between the academic
community and individual researchers.

31.
The Committee feels that efforts should be stepped up
to ensure that scientific communities (universities, other higher
educational institutions and research centres) increase their
role in the creation of innovative firms by means of suitable
vehicles (spin-offs etc).

26.
The Committee recommends that rules governing the
intellectual property of researchers be harmonised in the EU,
which will encourage researchers to appraise the economic
value of their findings and will also enhance application-
in different
oriented cooperation between researchers
countries.

The Committee recommends clarifying whether intel-
27.
lectual property rights to the results of research projects
conducted with public funding can be protected by using
project funding to obtain patents.

Objective 3 — Encourage the creation and growth of
innovative enterprises

The Committee believes that while the Communication
28.
is right to highlight the importance of innovative, technology-
based start-ups in providing high quality skilled jobs in the
future, it is important also to make the point that ‘innovative’
does not always mean ‘hi-tech’. There are many ‘traditional’
sectors, ranging from steel production to food processing,
that can benefit greatly from developing new products and
processes. This is particularly important for localities and
regions located outside the central European ‘core’ and whose
economies are still characterised by more traditional industries,
such as footwear and textiles.

The Committee notes that technological

innovation
29.
now concerns almost all sectors, and the trend to innovation
is on-going, rapid, all-embracing and transferable between

include

seeking

Examples

framework.

32. Moreover, elements of the public sector should not
be overlooked as potential beneficiaries of a supportive
to
innovation
implement new methods of delivery of services ranging from
health to transport; developing new forms of democratic
and/or civic participation; and providing and commissioning
public amenity such as planning and architecture. In rural
zones and upland regions in particular, there is an urgent
need to promote innovative ways of providing services to
local populations, families and businesses, in order to ensure
that populations remain in place and companies stay in
business. Continuing to provide services in the traditional
forms often means that they have to be cut, forcing residents
to leave important and vulnerable areas. The Committee
feels particularly strongly that local government should be
recognised as having both a role and a responsibility in this
context.

Objective 4 — Improving key interfaces in the innovation
system

The Committee

strongly supports

the proposed
33.
measures for strengthening co-operation between researchers,
companies and public bodies. Increased co-operation between
all involved will make the innovation support system work
more effectively. Local authorities, through their economic
development function, can act as extremely effective facilitators
for this.

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34.
The Committee points out that collaboration between
business and science is becoming increasingly important; at
the regional and local level, there is a particular need to find
new forms of collaboration between science and SMEs. They
must redefine their customer-producer relationship based on
reciprocity and derive new forms of innovation management
from this.

mission underplays the role of local government in promoting
and delivering it. Moreover, the work-based dimension of
lifelong learning and knowledge management deserve more
attention since they do as much to improve skills and make
innovative individuals and teams available to companies in all
sectors as does scientific, technological or indeed graduate
employment.

35.
The Committee recommends that models be sought in
higher education of best practice with regard to support
measures and the knowledge needed to provide these, thereby
helping researchers to understand the commercial value of
their findings, and facilitating the protection and licensing of
intellectual property, and advocates that good practice be
widely publicised.

36.
The Committee welcomes the reference to life-long
learning in the Communication but considers that the Com-

Objective 5 — A society open to innovation

37.
The Committee considers that the final recommen-
dation for Member States under Objective 5 — stimulating
public demand for innovation by dynamic purchasing policies
in public administrations — is a much more significant issue
than the Communication would suggest. The US Small
Business Investment Research programme, which legislates for
a minimum quota for SMEs and start-ups in public sector
research funding (and which has been operating for around
30 years), is an exemplar in this regard.

Brussels, 4 April 2001.

The President

of the Committee of the Regions

Jos CHABERT