Opinion of the Committee of the Regions on the Proposal for a Decision of the European Parliament and of the Council establishing a Competitiveness and Innovation Framework Programme (2007-2013)
Date: 2005-11-16
Institutions: European Committee of the Regions
Subjects: EU programme, State aid, competitiveness, entrepreneurship, innovation, small and medium-sized enterprises

16.5.2006

EN

Official Journal of the European Union

C 115/17

Opinion of the Committee of the Regions on the Proposal for a Decision of the European Parlia-
ment and of the Council establishing a Competitiveness and Innovation Framework Programme
(2007-2013)

(2006/C 115/04)

THE COMMITTEE OF THE REGIONS,

HAVING REGARD TO the Proposal for a Decision of the European Parliament and of the Council estab-
lishing a Competitiveness and Innovation Framework Programme (2007-2013), COM(2005) 121 final —
2005/0050 (COD);

HAVING REGARD TO the decision of the European Commission of 6 April 2005 to consult it on the
subject, under Article 265 and Article 156 of the Treaty establishing the European Community;

HAVING REGARD TO the decision of its President of 19 May 2005 to instruct its Commission for
Economic and Social Policy to draw up an opinion on this subject;

HAVING REGARD TO its Draft Opinion CdR 150/2005 rev. 2 adopted on 23 September 2005 by its
Commission for Economic and Social Policy (Rapporteur: Mr Harry Dijksma, Member of the Executive
Council of the province of Flevoland (NL/ALDE);

WHEREAS it has recently issued opinions on most of the programmes and relevant topics covered in the
proposed Competitiveness and Innovation Framework Programme, and whereas there would be little point
in repeating views expressed in the past which are still valid;

Adopted the following opinion at its 62nd plenary session, held on 16/17 November 2005
(meeting of 16 November).

The CIFP is welcome

1.
The Committee of the Regions is pleased to note that,
with its Proposal for a Decision of the European Parliament
and of the Council establishing a Competitiveness and Innova-
tion Framework Programme (2007-2013) (CIFP), the European
Commission is acting on its wish for improved coordination
between various sorts of EU sectoral policy, for greater consid-
eration to be given to SMEs and for enhanced competitiveness.

The CIFP in the various levels of European government

2.
The Commission considers that its proposal does justice
to the principles of subsidiarity and proportionality. The
Committee broadly concurs with the Commission's argument
in the light of current practice.
It considers, however, that,
particularly with regard to implementation, the devolved levels
of government are not assigned their proper role as participants
in good European governance.

The Committee regards the CIFP as an improvement on
remains a top-down approach,

3.
the existing situation.
however, which does not necessarily lead to the best results.

It

5.
The economy is rapidly becoming internationalised. The
Committee therefore considers that a properly funded Euro-
pean policy framework for competitiveness and innovation
remains essential, despite changes in the division of responsibil-
ities between EU, Member States and the devolved levels of
government.

the leverage effect,

Partly as a result of

6.
the financial
contribution of the EU generates substantial European added
value. The Committee believes that a sufficient budget
is
required for CIFP activities throughout Europe. Policy and
financial commitment is required of all European levels of
government in order to achieve the objectives of the Lisbon
strategy.

The question the Committee would like to raise in this
7.
connection is this:
is the Lisbon strategy not still based too
much on linear thinking? Would it not now make more sense
to think in terms of breaking trends, using Europe's specific
strengths as the starting point?

4.
Through its framework policy the Union must encourage
government and the business community to rediscover their
own strengths in a changing international context, and in the
process act as an instigator, the creator of conditions, supple-
menting a top-down approach with one that works from the
bottom up,
top-down
programmes with local and regional authorities merely filling
in the blanks.

imposing

detailed

rather

than

Europe's

strength is

diversity, not

8.
standardisation.
Custom-made solutions are also needed when promoting
competitiveness via innovation. Their administrative practices
make the devolved levels of government best placed to
promote competitiveness through innovation in their area. An
integrated approach can best be achieved close to the grass
roots. Synergies are greatest here and cooperative arrangements
can be quickly established.

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Official Journal of the European Union

16.5.2006

9.
The devolved levels of government therefore have to play
a full and central role in implementing this pan-European
policy in the framework of European partnership.

Entrepreneurship and innovation

10.
The Committee therefore calls on all the branches of
European government to promote innovation within their own
organisations, and in the process to be on the lookout for ways
of stimulating innovative behaviour by third parties. There is
no doubt that the credibility of innovation policy, and thus its
effectiveness, are enhanced when government itself sets a good
example.

CIFP — simplification and coherence

11.
The CIFP simplifies the existing situation. However, one
management committee and one work programme would be
preferable to three in the interests of policy coherence and effi-
ciency. Clearly, the existence of different work programmes
with the same purpose means that good coordination will be
essential if optimum benefits are to be obtained.

various

12.
In its proposal the Commission outlines the policy rela-
tionship between the individual components of the CIFP, and
between the CIFP and the
relevant European
programmes This gives a coherent overview of policy. It would
be a good thing for the annual work programme to make it
clear how this link between the CIFP and other European
programmes, particularly the Seventh framework programme
for research,
technological development and demonstration
activities (FP7-RTD), can be used in practice to establish inte-
grated national, regional and local action programmes which
create optimum synergies.

The Committee is pleased to note that the Commission
16.
gives consideration to the whole range of SMEs, including very
small, traditional and family businesses. This also applies to the
role of local and regional financial funds and intermediaries.
However, the policies of both the relevant European institu-
tions and the supervising and managing authorities often
impede the provision of risk capital. Here too renewal of policy
and rules is needed.

17.
The CIFP places heavy emphasis on cooperation,
including transnational cooperation, for which partners from
three countries are required. The Committee recommends
making provision for twinning in view of the effectiveness of
intensive one-to-one cooperation.

In order to help SMEs cross the notorious cooperation
18.
it would be worthwhile encouraging small-scale,
threshold,
firm-level joint ventures at local and regional level, possibly as
a precursor to further-reaching cooperation.

The Committee is pleased that young people are made a
19.
specific target group for the Entrepreneurship programme. But
from a social point of view, it would be equally desirable to
target older people and minorities in connection with entrepre-
neurship.

ICT policy

for

action. Only when the

The CIFP offers a framework programme with many
13.
opportunities
annual work
programmes are drawn up, however, will it become clear what
actions are planned, when, to whom they are available and in
what form, what criteria the Commission will apply, and thus
in general what opportunities exist in practice. The Committee
wishes to be briefed on the process of drawing up the work
like the European Parliament, so that, where
programmes,
it can make its views known in good time.
appropriate,
Regional governments should also have access to the draft
programmes, so that
they can express their opinions and
suggestions and build on their role to pave the way for compe-
titiveness.

In the ICT programme,

20.
the Committee recommends
adopting an approach which takes in the whole ‘chain’, as is
done in the case of environmental
to provide
market incentives for accelerated implementation of the neces-
sary broadband ICT applications, broadband infrastructure and
similar technologies.

technology,

21.
Government, like the services sector, makes less use of
ICT than it should. The Committee considers that the devolved
levels of government should make an effort to set an example.
Where they have insufficient capacity or resources, they should
be supported by other national or European-level authorities in
identifying creative solutions and making maximum use of
their own opportunities on their own responsibility.

14.
European programmes are often considered difficult of
access. The Committee therefore calls on the Commission to
use short, clear procedures, with clear criteria and a minimum
administrative burden, from application through to audit, and
obviously with optimum use made of ICT.

Intelligent Energy-Europe

In the light of

the Committee asks the
15.
Commission to seriously consider delegating at least implemen-
tation and management tasks to the devolved levels of govern-
ment, which are willing and able to perform them.

the above,

22.
In the introductory chapter of the Explanatory Memor-
andum of its proposal the Commission mentions LIFE as one
of the existing instruments to be incorporated into the CIFP.
LIFE is not, however, mentioned again in the proposal. Or at
least not in an obvious way. The role of the CIFP with regard
to LIFE should be clarified.

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Official Journal of the European Union

C 115/19

Although this

is not mentioned in the CIFP,

the
23.
Committee assumes that
the recently launched Sustainable
Energy-Europe campaign, which runs until 2008, and the Intel-
ligent Energy-Europe programme are to be coordinated.

State aid

24.
The Committee welcomes that on 21 September 2005
the European Commission has launched a public consultation
on the rules on state aid for innovation (COM(2005) 436) but
regrets the tight deadline for replies.

The Committee wants to state the following on this matter:

— The Committee expresses,

in line with the objective of
simplification, its support to the integration of innovation
in current rulings as opposed to creating new ruling.

— It supports the objective to target innovation-related state

aid towards small and medium-sized enterprises.

— It pleas for retention of the current allowed cumulation of

aid for innovation and regional aid.

— The Committee wonders, with regard to innovative start-
ups, why only ‘exemptions of [50 %] on social contribu-

Brussels, 16 November 2005.

tions and other local/regional
profits)’ are envisaged.

taxes (i.e. not

linked to

— It welcomes that ‘State aid to SME's and/or to activities far
away from the market may qualify for lighter procedural
rules, and could be exempted from notification’ (recital 24).

The Committee questions however the focus given by the
Commission to ‘market failure’. The Commission admits indeed
that innovation related-activities are specific in that they are
often distant from the market: ‘Experience shows that it is very
difficult to know in advance which innovative products and
services will become successful in the market.’ (recital 18)

Final comment

The Committee believes that with this opinion it can
25.
contribute to an improved policy to boost competitiveness
through innovation and promote discussion on the financial
perspective;
it believes that adjusting the CIFP in the way
proposed will contribute to a more balanced distribution of
responsibilities and tasks in European government.

The President

of the Committee of the Regions

Peter STRAUB