Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions - Improving knowledge transfer between research institutions and industry across Europe: embracing open innovation – Implementing the Lisbon agenda – {SEC(2007) 449}
Date: 2007-04-04
Institutions: European Commission
Subjects: EU research policy, cooperation policy, exchange of information, industry-research relations, knowledge management, research body, technology transfer, type of business

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 4.4.2007 
COM(2007) 182 final 

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE 
EUROPEAN PARLIAMENT, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

Improving knowledge transfer between research institutions 
and industry across Europe: embracing open innovation 

– Implementing the Lisbon agenda – 

{SEC(2007) 449} 

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   EN 

 
 
 
  
 
 
 
COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE 
EUROPEAN PARLIAMENT, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

Improving knowledge transfer between research institutions 
and industry across Europe: embracing open innovation 

– Implementing the Lisbon agenda – 

(Text with EEA relevance) 

A strong scientific knowledge base is one of Europe's traditional key assets and has allowed 
us  to  become  world  class  in  several  research  fields1.  In  spite  of  these  merits,  the  global 
position  of  European  research  is  currently  being  challenged  by  a  rapidly  changing  research 
landscape. Simultaneously, European research is faced with the implications of globalisation 
of  markets  and  industries,  digitalisation  and  new  technologies,  as  well  as  a  need  to  address 
societal issues such as an ageing population or climate change. 

In  its  broad-based  innovation  strategy  for  the  EU2,  the  importance  of  improving  knowledge 
transfer3  between  public  research  institutions4  and  third  parties,  including  industry  and  civil 
society  organisations  was  identified  by  the  Commission  as  one  of  ten  key  areas  for  action. 
This  Communication  responds  to  this  need  and  it  presents  a  number  of  orientations  for 
Member States. It sets out ideas on how Member States and the Community can act together, 
in  a  mutually  reinforcing  way,  to  overcome  some  of  the  existing  obstacles,  in  particular  in 
terms of promoting the trans-national dimension of knowledge transfer. It is accompanied by 
a  Commission  Staff  Working  Document  on  "voluntary  guidelines  for  universities  and  other 
research institutions to improve their links with industry across Europe" which are based on 
good practices identified by a number of national public authorities and the work of various 
European stakeholder associations.  

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2 
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4 

Europe currently has the highest per-capita numbers of science and engineering graduates and academic 
papers (Key Figures – http://ec.europa.eu/invest-in-research/monitoring/statistical01_en.htm) 
"Putting knowledge into practice: A broad-based innovation strategy for the EU" – COM(2006)502. 
Knowledge  Transfer  involves  the  processes  for  capturing,  collecting  and  sharing  explicit  and  tacit 
knowledge,  including  skills  and  competence.  It  includes  both  commercial  and  non-commercial 
activities such as research collaborations, consultancy, licensing, spin-off creation, researcher mobility, 
publication, etc. While the emphasis is on scientific and technological knowledge other forms such as 
technology-enabled business processes are also concerned. 
For the purpose of this document the term “Research Institutions” is used to cover all higher education 
institutions  (irrespective  of  their  name  and  status  in  the  Member  States,  e.g.  universities,  colleges  or 
polytechnics) and public research centres and organisations. 

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1. 

A NEED FOR ACTION 

One  important  problem  is  how  to  make  better  use  of  publicly  funded  R&D.  Compared  to 
North  America5,  the  average  university  in  Europe6,7  generates  far  fewer  inventions  and 
patents. This is largely due to a less systematic and professional management of knowledge 
and intellectual property by European universities. Moreover, efficient knowledge transfer in 
European research institutions is hindered by a range of factors, including: cultural differences 
between  the  business  and  science  communities;  lack  of  incentives;  legal  barriers;  and 
fragmented  markets  for  knowledge  and  technology8.  All  of  these  factors  adversely  affect 
European growth and jobs creation. 

That said, the importance of knowledge transfer in boosting competitiveness and contributing 
to  the  effectiveness  of  public  research  is  increasingly  recognised  by  Member  States,  and  is 
reflected  in  their  National  Reform  Programmes  developed  under  the  Lisbon  strategy. 
Numerous  initiatives  are  being  taken  aiming  at  promoting  collaboration  between  research 
institutions  and  businesses.  Several  Member  States  have  taken  initiatives  to  promote  and 
facilitate  knowledge  transfer  (for  instance  new  laws,  IPR  regimes,  guidelines  or  model 
contracts) and many others are planning to intensify their efforts in this direction. However, 
these  initiatives  are  often  designed  with  a  national  perspective,  and  fail  to  address  the 
transnational  dimension  of  knowledge  transfer.  There  is,  therefore,  a  need  for  a  more  level 
playing field regarding university-industry R&D interactions in Europe. 

European universities and other research institutions are equally realising their changing role 
in the globalized economy and have undertaken interesting initiatives. They realise that they 
are  no  longer  simply  providing  the  local  area  with  graduates  but  that  they  find  themselves 
competing  on  a  global  scale  for  students,  researchers  and  industrial  partners.  In  turn,  they 
realise  that  they  will  have  to  provide  world  class  research  to  attract  said  students  and 
researchers in the future. In order to remain attractive, they will need to open up to business 
and international collaboration, which may also help leverage new funds Sharing knowledge 
in particular through R&D collaborations with business – while a potential source of income 
for research institutions – may well give an important boost to both quantity and quality of the 
research undertaken. 

2. 

INDUSTRY  AND  RESEARCH  INSTITUTIONS  –  WORKING  TOGETHER  TOWARDS  A 
KNOWLEDGE ECONOMY 

The  need  for  sharing  knowledge  between  research  institutions  and  industry  has  become 
increasingly  evident  in  recent  years.  Historically,  research  institutions  were  perceived  as  a 
source of new ideas and industry offered a natural route to maximising the use of these ideas. 
However, the past decade has seen a significant change in the roles of both parties. 

5 

6 

7 
8 

AUTM survey – 
http://www.autm.net/events/File/FY04%20Licensing%20Survey/04AUTM-USLicSrvy-public.pdf 
ProTon survey – 
http://www.protoneurope.org/news/2006/art2006/artjanmar06/2asfy2004/attachment_download/file 
ASTP survey 2006 – http://www.merit.unu.edu/publications/docs/200605_ASTP.pdf 
http://ec.europa.eu/invest-in-research/pdf/download_en/consult_report.pdf 

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Many  companies  are  developing  open  innovation  approaches  to  R&D,  combining  in-house 
and  external  resources,  and  aiming  to  maximize  economic  value  from  their  intellectual 
property,  even  when  it  is  not  directly  linked  to  their  core  business.  In  particular,  they  have 
begun to treat public research as a strategic resource. 

In  parallel,  it  has  become  clear  that  research  institutions  need  to  play  a  more  active  role  in 
their relationship with industry in order to maximize the use of the research results. This new 
role9  requires  specialist  staff  to  identify  and  manage  knowledge  resources  with  business 
potential, i.e. how best to take a new idea to market, ensure appropriate resources (funding, 
support services, etc.) to make it happen, and to obtain adequate buy-in by all stakeholders. 

2.1. 

Creating the conditions for successful knowledge transfer 

It  has  been  recognized  that  the  involvement  of  business  in  the  governance  of  research 
institutions can help to orient research and education activities towards the needs of society, 
bring  expertise  to  support  knowledge  transfer  activities,  and  signal  willingness  to  introduce 
innovation-oriented approaches in all activities. Such interaction has helped to facilitate inter-
sectoral mobility, namely through temporary staff exchanges as well as through the hiring of 
young graduates by industry.  

Furthermore, many European research institutions have set up knowledge transfer offices in 
recent  years,  aiming  to  improve  collaboration  and  exploitation  of  research  results  and  their 
uptake by business. Their success is largely dependent on the skills and competencies of their 
staff  as  well  as  the  strategic  role  assigned  to  them  and  their  managerial  autonomy.  The 
personnel working on knowledge transfer must possess a wide range of skills in order to 
carry out their tasks effectively. However, relatively inexperienced staff is often appointed 
to  such  positions.  Continuous  professional  development  exists  in  a  limited  number  of 
countries  but  it  is  often  inadequate  in  terms  of  cost  and/or  delivery.  The  Commission  is 
currently studying ways to address this problem. Seven Member States10, with the support of 
the Commission11, are building a framework to provide new knowledge transfer officers with 
a qualification which is mutually recognised between them. Furthermore, PROTON Europe12, 
building on the UK's Institute for Knowledge transfer13, is looking to create an accreditation 
scheme for existing knowledge transfer officers based on their experience and track record.  

To  perform  knowledge  transfer  activities  effectively,  research  institutions  need  to  have 
sufficient  autonomy  to  recruit  experienced  knowledge  transfer  staff  on  a  competitive 
basis.  Increased  mobility  between  the  public  and  private  sectors  will  help  research 
institutions' researchers and managers identify shared needs with industry. However, certain 
rules and administrative obstacles can discourage such mobility. For instance, rules relating to 
internships and labour-market regulation, in particular those dealing with social security and 
pension  arrangements,  can  impede  staff  exchanges.  Furthermore,  in  some  countries,  public-
sector  researchers  are  not  allowed  to  work  for  industry  on  a  part-time,  consultancy  or  other 
basis14. 

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14 

When referring to universities, this new role is also known as the "third mission."  
AT, NL, FR, IT, SE, BE, LT. 
OMC-Net project "Certified trans-national technology transfer manager." 
one of Europe's leading knowledge transfer associations – http://www.protoneurope.org 
www.iknowledge transfer.org.uk 
SEC(2006)971.  

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There is also a need for existing resources to be made more accessible. This can be partially 
achieved  through  co-ordination.  At  present,  certain  research  institutions  have  staff  who 
actively pursue links with industry, but who do not interact amongst themselves. By pooling 
their knowledge transfer competencies, they can ensure that such skills are made more widely 
available throughout the research institutions. Furthermore, significant benefits may arise by 
outsourcing  certain  specialised  functions  or  by  pooling  resources  or  R&D  results  (and 
associated  IP  rights)  between  several  research  institutions15.  Examples  of  pooling  resources 
between  several  knowledge  transfer  offices  include  the  patent  marketing  and  knowledge 
transfer  agencies  established  in  Germany,  the  North  of  England  Science  Initiative  or  the 
Belgian VIB16. Alternatively, such pooling can address a single industry sector (for example 
the White Rose Consortium17) or a single knowledge transfer activity.  

It  is  particularly  interesting  to  note  the  range  of  benefits  which  can  be  obtained  by  pooling 
patents  between  research  institutions.  A  patent  pool  can  help  create  a  critical  mass  of 
intellectual property which is necessary for an innovative idea to be attractive to the private 
sector.  If  marketed  properly,  every  relevant  industry  player  could  be  made  aware  of  the 
research  centres  that  generated  the  IP  and  this  would  help  catalyse  links  with  industry. 
Furthermore,  building  a  patent  pool  can  lead  to  stronger  relationships  between  knowledge 
transfer offices and provide a basis for further inter-institutional endeavours. Such pooling of 
resources appears to be particularly appropriate for those research institutions that do not have 
the  scope  and  volume  of  exploitable  research  results  to  justify  the  establishment  of  a 
knowledge transfer office. Where it is appropriate, Member States should actively promote 
and support the pooling of resources among research institutions. 

However  helpful  such  pooling  of  resources  can  be  at  a  national  or  regional  level,  these 
initiatives  rarely  address  the  transnational  dimension.  To  address  this  shortcoming,  the 
Commission  created  a  trans-European  network  aiming  to  facilitate  transnational  technology 
transfer,  namely  the  Innovation  Relay  Centres  (IRCs)  network18.  The  IRCs  are  based  in  33 
countries and provide personalised assistance for universities and industry (especially SMEs). 
By collaborating closely with a leading European university knowledge transfer association19 
they  have  created  a  simple  and  effective  system  which  allows  universities  to  share 
information  on  new,  commercially  relevant  technologies  in  a  structured  manner  with 
companies across Europe.  

2.2. 

Promoting an entrepreneurial mindset 

The need to publish and make results freely available is often viewed as being incompatible 
with  industry's  need  to  keep  information  confidential  and  protected  by  intellectual  property 
rights  such  as  patents.  However,  experience  shows  that  promoting  innovation  and 
disseminating  new  knowledge  can  be  compatible,  provided  that  intellectual  property  issues 
are understood and managed professionally. Interaction on these points can be facilitated by 
tools  such  as  the  CREST  decision  tree20,  model  contracts  such  as  the  UK's  Lambert 
agreements21, or guidance such as the Danish document on Contacts, contracts and codices22, 

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21 
22 

See Irish report on technology transfer – http://www.universitiesireland.ie/news/techtransfer.php 
www.vib.be 
www.whiterose.ac.uk 
http://irc.cordis.lu 
ProTonEurope – http://www.protoneurope.org 
Crest decision tree – http://ec.europa.eu/invest-in-research/policy/crest_cross_en.htm 
Lambert agreements – http://www.innovation.gov.uk/lambertagreements 
Contacts, contracts and codices – http://billed.di.dk/wimpfiles/lores/image.asp?objno=/686201.pdf 

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as  well  as  through  awareness  initiatives  by  the  European  and  national  patent  offices.  The 
Responsible  Partnering  initiative23,  developed  by  4  major  European  university  and  industry 
associations  (EIRMA,  EUA,  PROTON,  EARTO),  presents  key  insights  into  how  effective 
research collaboration can be created. Member States have a role in the development and 
delivery of such initiatives and should support them actively. 

Various  "creative  commons"24  approaches  (open  access,  open  publications,  open  software, 
…)  are  increasingly  endorsed  by  many  universities.  These  mechanisms  can  ensure  a  more 
effective  dissemination  of  results  although  in  certain  cases  formal  protection  (e.g.  design 
rights, patents or material transfer agreements) may be necessary if a product is to be brought 
to  market  successfully.  It  is  therefore  important  to  ensure  that  researchers  are  aware  of  the 
benefits  of  both  approaches  and  that  decisions  are  made  on  the  basis  of  socio-economic 
impact.  Given  that  the  rules  governing  the  ownership  of  publicly-funded  R&D  results  still 
vary across Europe, it may be appropriate to revisit in the near future the question of a 
single European ownership model for publicly funded research. 

Fostering  an  entrepreneurial  mindset25  as  well  as  the  relevant  skills  among  researchers  can 
greatly  contribute  to  the  reduction  of  the  cultural  divide  which  exists  between  research 
institutions and industry. In order to foster interactions between them, researchers need to be 
provided  with  basic  knowledge  transfer  and  business  skills.  Entrepreneurship  education 
should  be  offered  to  provide  training  on  how  to  manage  intellectual  property,  interact  with 
industry,  start  and  run  a  business.  Although  tertiary  education  is  normally  highly 
decentralised,  there  are  examples  of  national  strategies  for  promoting  entrepreneurship  in 
higher  education  (e.g.  the  Science  Enterprise  Challenge  in  the  UK).  To  help  address  the 
question  of  content  of  such  courses,  the  Commission  is  currently  funding  a  project26  to 
create  a  core  set  of  training  materials  to  raise  awareness  of  the  importance  of  IP 
management issues amongst a variety of actors. 

In  addition,  one  of  the  most  effective  methods  of  developing  such  skills  and  sharing 
knowledge  is  the  movement  of  staff  between  research  institutions  and  industry.  The 
Commission  has  been  an  active  proponent  of  such  activities  through  the  "Marie  Curie 
Industry-Academia  Strategic  Partnership"  scheme  which  supports  the  development  of  such 
long-lasting  collaborations  via  the exchange  of  researchers.  The  new  research,  development 
and  innovation  State  aid  framework  has  also  introduced  a  measure  on  aid  for  the  loan  of 
highly qualified personnel from research institutions (or large companies) to SMEs. 

In  many  countries,  research  institutions  have  created  reward  systems  whereby  the  inventor 
receives a share of any profits made when licensing or spinning off inventions. An illustrative 
model is one where profits are split evenly between the researcher, the research institution and 
the  business  partner.  However,  although  some  financial  incentives  may  apply,  many  staff 
remain reluctant to take part in such activities, especially as they are not taken into account for 
career  progression.  It  is  therefore  important  that  the  appraisal  criteria  also  take  into 
account  other  activities  such  as  patenting,  licensing,  mobility  and  collaboration  with 
industry27.  

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25 
26 
27 

http://www.responsible-partnering.org 
See e.g. http://creativecommons.org 
COM(2004)70.  
IP4Inno – http://www.proinno-europe.eu/ip4inno.html 
EUA Vienna conference conclusions – 
http://www.eua.be/fileadmin/user_upload/files/EUA1_documents/report_web%20221006.1161606166446.pdf 

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3. 

MAKING IT HAPPEN: MEMBER STATES AND THE COMMUNITY WORKING TOGETHER 

Both  research  institutions  and  industry  can  benefit  from  public  policy  support  at  regional28, 
national and Community level. This support can take different forms, from the promotion of 
exchange  of  good  policies  to  direct  financial  support  to  knowledge  transfer  mechanisms. 
Member States cooperation activities in the European Research Area (ERA) and through the 
Lisbon strategy via the implementation of the "3% action plan"29 continue to deliver concrete 
results.  Member  States  should  make  full  use  of  the  available  funding  sources,  and 
encourage research institutions to do so. Cohesion policy funding (the European Regional 
Development  Fund  and  the  European  Social  Fund),  national  funding  in  line  with  the  new 
Community  framework  for  State  aid  for  research  and  development  and  innovation  (RDI)30, 
and the European Framework Programmes should all be used to leverage more links between 
industry and research institutions.  

3.1. 

The European Institute of Technology 

The establishment of a European Institute of Technology (EIT) is a good example of how the 
EU can implement innovative governance models - as set forth in the modernisation agenda 
for  universities  -  to  inspire  change  and  accelerate  the  processes  of  knowledge  transfer  in 
existing  institutions,  as  well  as  increase  their  links  with  industry,  as  an  integral  part  of  the 
strategy  to  harness  Europe's  innovation  capacity.  Since  the  Commission  first  launched  the 
idea  in  2005,  a  wide  consultation  process  and  an  extensive  impact  assessment  work  have 
taken  place.  The  Commission  expects  that  discussions  in  the  European  Council  and 
Parliament will be completed in 2007 and that the EIT will become operational in 2008. 

The EIT is a visionary and bold endeavour for the long term. It will focus on the development 
and integration of all aspects of the knowledge triangle – innovation, research and education – 
in  areas  that  present  challenges  for  Europe's  future.  In  particular,  the  EIT  will  promote 
research  institutions  -  industry  interactions  and  knowledge  transfer.  It  will  feature  a 
balanced composition of both business and academic expertise in its governing body and will 
provide  a  reference  model  for  experimenting  with  more  business-oriented  approaches  to 
governance. 

The EIT will bring important added-value to existing EU initiatives in the area of knowledge 
transfer: 

–  The business sector will play a crucial role in every EIT activity. The final goal of the EIT 
is clearly innovation and translation of the results of research and education into innovative 
solutions. 

–  It  is  intended  to  be  Europe's  innovation  flagship,  sending  a  clear  message  of  Europe's 

commitment to reinforce innovation and inspire change in its research institutions. 

–  It  will  integrate  for  the  first  time  the  three  components  of  the  knowledge  triangle  on  an 
equal  footing.  Education  especially  is  seen  as  an  essential  element  in  the  innovation 
process. 

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30 

E.g. in support of clusters, "business eco-systems" 
COM(2003)226. 
RDI State Aid Framework – OJ C 323 of 30.12.2006  

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The  Commission  has  proposed  the  establishment  of  an  ‘integrated  EIT’  model  combining 
both a bottom up and a top down approach based on a two-tier structure. Firstly, a governing 
board  representing  both  business  and  academia  will  provide  strategic  guidance  on  the 
selection,  evaluation  and  coordination  of  Knowledge  and  Innovation  Communities  (KICs). 
Secondly, a set of autonomous KICs will be selected to carry out the work of the EIT across 
Europe. They will fully integrate and perform innovation, research and education activities on 
designated  themes.  They  will  be  joint-ventures  of  partner  organisations  representing 
universities, research organisations and business. 

3.2. 

Co-operation activities  

Efforts to enable public research institutions to develop more effective links with industry, in 
particular  SMEs,  have  been  at  the  core  of  Member  States  and  Community  cooperation 
activities  to  implement  the  3%  R&D  target  of  the  EU's  Growth  and  Jobs  strategy.  These 
activities  have  taken  place  within  the  Committee  for  Scientific  and  Technical  Research 
(CREST), which acts as an interface to put into practice the open method of coordination, a 
policy  cooperation  tool  based  primarily  on  exchange  of  information  and  best  practice. 
Previous sections refer to some of the results of this cooperation that take the form of expert 
advice,  policy  recommendations,  guidance  documents,  peer  review  of  national  policies  and 
awareness raising initiatives31. 

These co-operation activities will continue and results should feed into Member States action 
to  improve  knowledge  transfer  and  research  institutions  -  industry  links.  The  more  relevant 
policy initiatives should be included in the next generation of National Reform Programmes 
(2008-2011). As a follow up to a seminar held in Lisbon for national Lisbon coordinators on 
knowledge  partnerships,  Member  States  have  forwarded  a  range  of  interesting  examples. 
However,  these  initiatives  are  obviously  often  designed  from  a  national  perspective,  and  do 
not  address  the  trans-national  dimensions  of  knowledge  transfer.  The  elaboration  of 
concrete  initiatives  at  Community  level  should  be  explored  to  support  Member  State 
efforts and raise the trans-national dimension of some measures. 

Two  areas  requiring  special  efforts  at  Member  State  and  Community  level  are  the 
development  of  tailored  measures  to  promote  research institutions - SME interaction and of 
tools to measure progress: 

•  Promoting research institutions - SME interactions 

Most interactions between research institutions and companies involve large firms. This is due 
to the fact that such collaborations are considered to be more durable and regular than with 
SMEs. 

Evidently, SMEs are a very diverse clientele for knowledge transfer services. Manufacturing 
SMEs  in  the  high-tech  sectors  typically  have  proportionally  high  R&D  budgets  and  close 
links  to  academia  as  a  results  of  the  very  short  product  cycles.  In  traditional  sectors,  the 
capacity  of  SMEs  to  actively  engage  in  knowledge  transfer  activities  is  typically  limited  by 
constraints in human and financial resources. It is therefore important to encourage SMEs to 
absorb new and external knowledge for faster innovation.  

31 

Report of the CREST Expert Group "Promote the reform of public research centres and universities in 
particular to promote transfer of knowledge to society and industry" – 
http://ec.europa.eu/invest-in-research/pdf/download_en/final_crest_report_march2006.pdf 

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An example of existing good practice is the Netherlands' innovation vouchers scheme whose 
main objective is to enable SMEs to buy knowledge and strategic consultancy from research 
institutions through innovation vouchers (worth €7500) and thus to stimulate interaction and 
exchange between the knowledge suppliers and SMEs. The knowledge supplier can then hand 
in  the  voucher  to  the  Innovation  Agency  SenterNovem  and  receive  payment.  State  aid  rules 
allow supporting such consultancy with public funds32. 

Member States should use the mechanisms at their disposal to promote such knowledge 
transfer activities (e.g. innovation vouchers or R&D tax credits allowing the reimbursement 
of R&D outsourced to research institutions). 

•  Measuring progress 

Monitoring  knowledge  transfer  activities  has  several  purposes  including  helping  research 
institutions  promote  what  has  been  achieved  for  the  public  good.  While  several  university 
rankings exist, they mostly rely on academic indicators such as publications and numbers of 
PhDs, and do not consider performance in the exploitation of R&D results. There is evidence 
that33 the benchmarking of “innovation-related activities”, especially if conducted on the 
basis of comparable metrics across the EU, would allow research institutions to compare 
their own achievements at European as well as at national level. The Commission will set 
up an expert group in 2007 to tackle these issues. 

3.3. 

Financial support 

•  State aid 

The new RDI State aid framework intends to clarify the State aid rules applicable to R&D&I-
funding activities, including the financing of knowledge transfer activities. This clarification 
was  necessary  since  public  research  institutions  have  increasingly  acted  as  private 
undertakings in domains bordering market activity, making State aid issues more relevant for 
them. 

The  framework  considers  that  the  primary  activities  of  public  research  institutions,  in 
particular the conduct of independent research for more knowledge and better understanding, 
including collaborative research, and the dissemination of research results will normally be of 
a  non-economic  character  (i.e.  there  are  no  goods  or  services  provided  on  an  existing 
market)34.  Knowledge  transfer  activities  have  a  non-economic  character  if  they  are 
"internal"35 and all income from theses activities is reinvested in the primary activities of the 
research organisations36. 

32 

33 

34 
35 

36 

Such  support  could  fall  either  under  the  provisions  on  consultancy  in  Commission  regulation(EC) 
No 70/2001 on the application of Articles 87 and 88 of the EC Treaty to State aid to small and medium-
sized enterprises, OJ L 10 of 13.1.2001, or under point 5.6. of the new RDI State aid framework. 
ITTE  report  on  "Improving  institutions  for  the  transfer  of  technology  from  science  to  enterprises"  – 
http://ec.europa.eu/enterprise/enterprise_policy/competitiveness/doc/itte_expertgroupreport.pdf 
Point 3.1.1 of the framework. 
By internal nature, the Commission means a situation where the management of the knowledge of the 
research organisation(s) is conducted either by a department or a subsidiary of the research organisation 
or  jointly  with  other  research  organisations.  Contracting  the  provision  of  specific  services  to  third 
parties by way of open tenders does not jeopardise the internal nature of such activities. 
The  Commission  must  be  notified  of  all  remaining  kinds  of  technology  transfer  activities  receiving 
State funding. 

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Evidently, any economic activity performed (e.g. consultancy, contract research, renting out 
infrastructures,  etc.)  should  take  place  at  normal  market  conditions,  and  public  funding  of 
such  activities  will  generally  be  considered  to  constitute  State  aid,  and  are  subject  to  the 
corresponding regulatory provisions. 

The  new  framework  also  provides  that  research  institutions  should  separately  allocate  costs 
and  revenues  to  economic  and  non-economic  activities,  in  order  to  avoid  possible  cross-
subsidisation.  To  achieve  this,  it  is  suggested  that  Member  States  should  encourage  and 
facilitate the introduction of full cost accounting in research institutions, which will also 
have the added benefit of facilitating participation in the Seventh Framework Programme. If 
such measures are not introduced, any public funding in support non-economic activities may 
be deemed to constitute State aid. 

•  EU cohesion policy 

The  proximity  of  research  institutions  and  firms  often  facilitates  knowledge  transfer,  which 
emphasises  the  crucial  role  which  regional  and  local  authorities  can  play.  Support  for 
knowledge transfer activities is available through EU cohesion policy as part of the Growth 
and Jobs strategy. 

For example, cohesion policy's main instrument, the European Regional Development Fund 
(ERDF),  is  used  to  support  incubators  and  science  parks  (infrastructures  and  accompanying 
services) which are an effective means to spin-out knowledge into the market place and can 
help create better SMEs – university links. Well-run incubators and clusters have significant 
advantages which make them outstanding instruments of knowledge transfer, most notably for 
high  technology.  A  distinctive  feature  is  that  services  are  available  which  increase  the 
likelihood  of  knowledge  transfer  occurring  successfully.  However,  as  well  as  support  for 
infrastructure, the ERDF provides co-financing of around €4 bn in the period 2000-2006 for 
innovation  and  technology  transfer  and  for  establishing  networks  and  partnerships  between 
business and research institutions. The ERDF therefore plays a significant role in facilitating 
interaction between public research organisations and industry, both in terms of regional and 
trans-regional interaction. 

Furthermore,  the  European  Social  Fund  (ESF)  provides  financial  support  through  the 
assistance to persons (training, guidance, etc.), and for the development and modernisation of 
educational  structures  and  systems.  In  the  new  programming  period  (2007-13),  there  is  an 
increased emphasis on strengthening research and innovation, particularly through knowledge 
transfer. 

The  Community  Strategic  Guidelines  on  Cohesion37  set  out  an  indicative  framework  for 
Member  States'  future  Structural  and  Cohesion  Funds  strategies  and  programmes. 
Encouraging  innovation  is  identified  as  a  major  priority  and  the  guideline  on  "Improving 
Knowledge  and  Innovation  for  Growth"  indicates  a  range  of  knowledge  and  technology 
transfer activities which should receive attention. In particular, Member States' support for 
co-operation  between  businesses  and  universities  and  for  knowledge  transfer 
infrastructures  and  services  should  be  enhanced,  so  as  to  further  strengthen  the  regional 
dimension of the knowledge economy. 

37 

COM(2006)386 and Council Decision 2006/702/EC of 6 October 2006. 

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•  The  EC  Framework  Programmes  for  research  &  development  ("FP")  and  for 

competitiveness & innovation ("CIP") 

Transnational  knowledge  transfer  has  always  been  at  the  heart  of  the  Research  & 
Technological Development Framework Programme (FP). Indeed, most FP projects involve a 
mix  of  participants  from  the  public  and  private  sectors,  from  several  countries.  Certain 
thematic areas, such as the ICT sector, have been particularly successful in this respect: more 
than  90%  of  projects38  involve  research  institutions  -  industry  collaboration.  This  clearly 
facilitates  the  development  of  technologies  ready  for  commercial  exploitation.  As  well  as 
R&D  projects,  the  FP  also  funds  the  intersectoral  mobility  of  research  staff,  including 
university-industry exchanges. 

The  new  Competitiveness  and  Innovation  Programme  will  support  all  forms  of  innovation, 
public-private  partnerships  and  measures  to  improve  access  to  finance  including  loans, 
venture  capital,  and  "business  angel"  finance.  It  will  also  fund  novel  ways  to  facilitate 
knowledge sharing between research institutions and companies, in particular for SMEs39, as 
well  as  new  trans-national  clustering  initiatives.  In  the  area  of  eco-innovation,  it  will  in 
particular  support  the  market  up-take  of  innovative  technologies  and  practices  through pilot 
and market replication projects. 

In  order  to  maximise  the  impact  of  these  two  Framework  Programmes,  they  will  work 
together to provide a suite of complementary activities for R&D projects in order to promote 
knowledge transfer, and the exploitation of R&D results. 

Evidently, as  well  as directly promoting knowledge transfer activities, the Commission also 
promotes  the  exchange  of  good  practice  in  support  of  knowledge  transfer  between 
Governments.  In  this  respect,  the  Community  offers  various  opportunities  for  regional  and 
transnational policy learning40.  

4. 

CONCLUSION 

Interactions  between  the  public  research  base  and  industry  have  been  gradually  increasing 
over  the  past  decade.  These  can  vary  from  contractual  research  to  collaborative  research  or 
even to structured partnerships Most of these interactions involve the transfer of knowledge 
between  the  stakeholders  concerned,  and  enhance  the  socio-economic  impact  of  publicly-
funded  research,  e.g.  by  creating  new  useful  products,  new  jobs  and  sometimes  new 
companies. 

The analysis and policy orientations set out in this Communication constitute a starting point 
for discussions on a common European framework for knowledge transfer in order to create a 
level playing field and a more coherent European landscape for knowledge transfer. 

38 
39 
40 

Under FP6. 
www.europe-innova.org 
e.g. ERAnet, PRO INNO Europe, ERIK and OMC-Net. 

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Furthermore,  the  voluntary  guidelines  presented  in  the  accompanying  Commission  Staff 
Working  Document  are  intended  to  help  research  institutions  identify  shared  interests  with 
industry and facilitate mutually beneficial knowledge transfer arrangements. These guidelines 
will  become  a  living  document,  complemented  by  additional  work  to  be  undertaken  by  a 
group  of  high-level  industry  and  academic  actors.  This  group  will  be  launched  in  2007  and 
will  provide  advice  on  other  actions  which  it  could  take  to  promote  knowledge  transfer  in 
Europe.  

In addition, co-operation between Member States and the Community level will also continue 
in the context of the Lisbon strategy for growth and jobs. Major policy initiatives in this area 
taken  by  Member  States  should  be  reflected  in  the  National  Reform  Programmes,  and  the 
exchange of good practice will continue to be promoted by the Commission. 

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