Communication from the Commission - Competitive European Regions through Research and Innovation - A contribution to more growth and more and better jobs {SEC(2007)1045}
Date: 2007-08-16
Institutions: European Commission
Subjects: EU employment policy, EU research policy, competitiveness, economic and social cohesion, economic growth, innovation, knowledge economy, research and development

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 16.8.2007 
COM(2007) 474 final 

COMMUNICATION FROM THE COMMISSION 

COMPETITIVE EUROPEAN REGIONS THROUGH RESEARCH AND 
INNOVATION 

A contribution to more growth and more and better jobs 

{SEC(2007)1045} 

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COMMUNICATION FROM THE COMMISSION 

COMPETITIVE EUROPEAN REGIONS THROUGH RESEARCH AND 
INNOVATION 

A contribution to more growth and more and better jobs 

1. 

INTRODUCTION 

Central  to  the  realisation  of  the  renewed  Partnership  for  Growth  and  Jobs  is  the  effort  to 
promote the knowledge economy, in particular through research, technological development 
and innovation. At the Community level, the Union possesses three key support instruments: 
Cohesion policy which is funded under the Structural Funds and Cohesion Fund; the Research 
Framework  Programme;  and  the  Competitiveness  and  Innovation  Framework  Programme. 
This Communication aims to show the synergies of design of the funding instruments of the 
European research, innovation and cohesion policies. In order to increase the effectiveness of 
the  three  instruments,  these  synergies  should  now  be  translated  into  synergies  of  action  by 
national and regional authorities as well as regional actors. The Communication takes stock of 
the current situation and calls on Member States and regions to make more effective use of 
the EU Research, Innovation and Cohesion policies and instruments.  

Research  and  innovation  are  crucial  to  addressing  some  of  the  major  issues  facing  the 
European Union and upholding an EU model based on economic growth, social responsibility 
and sustainable development. We need to raise productivity, increase employment rates and 
shift  to  higher  value-added  economic  activities.  Workers  need  higher-level  skills  and  the 
capacity to adapt to change. Investing in human capital is therefore of crucial importance in 
order to increase research and innovation efforts. 
Research  and  innovation  also  offer  solutions  to  overcome  unsustainable  use  of  resources 
(including energy consumption), to address climate change, and to deal with the challenges of 
demographic  change.  In  an  open  global  economy,  competitiveness  lies  in  the  capacity  of 
businesses to create high value-added goods and services. A move towards innovation-based 
growth is therefore at the heart of the renewed Lisbon agenda which forms the EU response to 
globalisation. 

Innovation  is  most  effectively  addressed  at  regional  level,  as  physical  proximity  fosters  the 
partnerships  between  actors  in  both  public  and  private  sectors.  The  formation  of  regional 
clusters is often the key to the successful promotion of research, technological development 
and  innovation.  The  capacity  of  regional  decision  makers  and  entrepreneurs  to  turn 
knowledge,  skills  and  competencies  into  sustainable  competitive  advantage  is  crucial  to 
regions'  economic  performance.  However,  European  regions  vary  considerably  in  their 
capacity  to  absorb  and  develop  knowledge  and  technology.  This  impedes  their  growth 
prospects  and  is  likely  to  reinforce  the  considerable  disparities  in  prosperity  across  the  EU 
which have widened following recent enlargements. 

The  new  challenges  facing  the  EU  are  of  increasing  complexity.  They  call  for  a  more 
structured and strategic mix of Community, national and regional policies. 

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The  common  or  complementary  policy  priorities  of  the  Community's  Research,  Innovation 
and Cohesion Policies in the Lisbon context are: 

•  To build a European Research Area (ERA) by contributing to increased R&D capacity by 

promoting European excellence, and by reducing structural disparities; 

•  To  improve  performance  in  R&D  and  innovation,  therefore  contributing  to  economic 
growth  and  job  creation,  by  stimulating  a  healthy  economic  environment,  facilitating 
access  to  risk  capital,  underpinning  the  development  of  innovating  clusters,  enhancing 
human  capital,  supporting  technology  transfer  activities  especially  from  universities  and 
research  centres  to  SMEs  and  between  SMEs,  and  helping  public  R&D  and  knowledge 
institutions to connect with the local business community, for example through networking 
activities; 

•  To  strengthen  competitiveness  of  European  businesses  and  regions,  in  particular  by 
fostering  entrepreneurship  and  supporting  SMES,  including  through  a  business  support 
network;  

•  To strengthen the economic and social cohesion of the enlarged European Union in order 
to promote the harmonious, balanced and sustainable development of the Community; 

•  To promote national, regional and interregional innovation strategies; 
•  To promote innovation and innovative clusters. 

2. 

RESPECTING DIFFERENCES WHILE ACHIEVING SYNERGIES 

level, 

innovation  policy  focuses  on 

When  looking  at  possibilities  for  achieving  greater  synergies  between  policies,  we  must 
understand  the  starting  points  and  specific  features  of  each.  The  EUs'  Research  Policy, 
Innovation Policy and Cohesion Policy contribute to the common objective of creating jobs 
and growth in different ways. While EU research policy focuses on promoting excellence at 
into  business 
international 
opportunities  and  new  solutions  for  societal  needs,  including  through  process  and 
organisational innovations affecting structures, processes and linkages between organisations. 
Cohesion  policy  focuses  on  promoting  regional  excellence.  In  the  current  programming 
period it has become a major source of investment in support of the Lisbon Strategy in fields 
such  as  RTD  and  innovation  both  in  the  least  developed  region  where  capacity  for  these 
activities  needs  to  be  created,  and  in  the  more  advanced  regions  where  they  need  to  be 
reinforced. For Cohesion Policy programmes covering 2007-2013 Member States are required 
to 'earmark' between 60% and 75% of the resources available for Lisbon-related investment, 
notably  in  RTD  and  innovation.1  The  scope  for  synergies  with  research  and  innovation 
policies is therefore greater than ever before. 

turning  knowledge 

In seeking to increase coordination between the three policies it is necessary to take account 
of the fact that: 

(1) 

Each of the policies has a different legal basis in the EU treaty. While the overall goal- 
jobs and growth - is the same, the objectives need to be defined in accordance with the 
Treaty. 

1 

The 60% target is for the least developed (Convergence) regions while the 75% target is for the other 
(Competitiveness)  regions.  The  targets  are  compulsory  for  EU-15  and  voluntary  for  EU-12.  The 
Commission will report fully on Member States' programmes in a Communication on "Delivering the 
Lisbon Agenda in the regions – innovation and cohesion policy 2007-2013" in autumn 2007. 

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(2) 

(3) 

Relating  to  their  different  Treaty  basis,  research  and  innovation  instruments  target 
specific themes, while cohesion policy instruments target specific geographical areas. 
The first set of instruments results in thematic specialisation, whereas the second seeks 
to promote an integrated approach. 

There  are  also  differences  in  implementation  methods.  The  7th  Framework 
Programme  essentially  uses  competitive  calls  for  proposals  at  European  level.  In  the 
evaluation  of  proposals  the  Commission  is  assisted  by  independent  experts  and  the 
proposals are selected on the basis of excellence. The Competitiveness and Innovation 
Framework Programme also uses calls for proposals at European level for the ICT and 
Intelligent  Energy  components,  while  the  other  financial  instruments  work  with  a 
permanent open call for expression of interest that will be considered by the European 
Investment  Fund  (EIF)  and  the  Commission.  Cohesion  policy  programmes  are 
implemented  on  the  basis  of  shared  management  between  the  EU  and  the  Member 
States  in  a  system  of  multi-level  governance.  Whilst  they  often  also  use  competitive 
calls for tender, the scope of intervention is generally limited to a region (though some 
cohesion policy programmes also cover a Member State or a group of regions). Hence 
the  selection  process  is  based  primarily  on  regional  partnerships.  Due  to  these 
differences, the direct beneficiaries can differ as well. 

Against this background, the Commission, in drawing up policies for the period 2007-2013, 
has examined how the three Community policies can best complement one another and how 
bridges  can  be  built  between  the  five  relevant  instruments,  i.e.  the  7th  RTD  Framework 
programme (FP7), the Framework programme on Competitiveness and Innovation (CIP) and 
the  instruments  of  Cohesion  Policy:  (i.e.  the  Structural  Funds;  European  Regional 
Development  Fund  (ERDF)  and  European  Social  Fund  (ESF)2),as  well  as  the  European 
Agricultural  Fund  for  Rural  Development  (EAFRD).  The  instruments  now  offer  greater 
potential than before for co-ordinated use, as is described in Annex I. The fact that the five 
instruments  now  cover  the  same  time-horizon  (2007-2013)  will  also  facilitate  their 
coordinated use. 

A number of specific initiatives were introduced in the 7th Framework programme to increase 
the capacity of operators from regions lagging behind to participate in co-operation projects, 
but  it  was  not  considered  appropriate  to  propose  selection  criteria  to  reflect  the  regional 
dimension  of  a  project  or  differentiated  aid  rates  depending  on  the  development  stage  of  a 
region. Similarly, while Cohesion Policy does not set specific minimum allocations for RTDI, 
or indeed for any sector, both the Regulations and the Strategic Guidelines on Cohesion give a 
clear impetus to raise research and innovation capacity in the regions by funding productive 
investment together with help for initiating strategies for R&D and innovation based on local 
assets.  Indicative  figures  are  that  Member  States  have  "earmarked"  around  €45  billion  of 
cohesion  policy  funding  for  investments  in  research  and  development  and  innovation, 
including  investment  in  human  capital.  This  is  more  than  three  times  the  amount  that  was 
invested in these areas in the period 2000-2006. 

As  the  Community  Strategic  Guidelines  indicate,  the  key  to  a  coherent  support  strategy  for 
research,  technological  development  and  innovation  lies  with  the  Member  States  and  the 
regions.  They  assess  the  investment  needs  and  develop  the  project  pipeline.  While  as  a 

2 

As  the  other  instrument  of  cohesion  policy,  the  Cohesion  Fund,  is  not  directly  linked  to  research, 
technological development and innovation (RTDI), it is not discussed here. 

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question of sound financial management of public funds, it is not possible to combine funding 
from two different Community sources for the same set of eligible costs (Council Regulation 
(EC)  No  1083/2006,  Article  54(5)),  it  is  possible  to  use  Structural  Funds,  the  EAFRD  and 
other  EU  funds  for  different  aspects  or  phases  of,  for  example,  a  research  and  innovation 
project or programme, provided that the aspect or phase concerned meets the relevant funding 
source's criteria for support. 

At the same time, synergy should not be reduced simply to complementary project funding. It 
is  also  relevant  in  the  building  and  development  of  research  and  innovation  capacity.  The 
exchange of knowledge fostered by the Community instruments is also an important form of 
synergy.  In  addition,  all  relevant  Community  instruments  can  support  innovations  in  the 
social  area.  All  three  Community  instruments  offer  extensive  opportunities  (including 
foresight activities) for sharing know-how about research and innovation between EU regions. 
The  transfer  of  good  practices  through  inter-regional  partnerships  is  essential  for  improving 
performance on research and innovation throughout the EU. In the case of Cohesion Policy, 
the Regions for Economic Change initiative and the mainstreaming of innovative actions and 
transnational  programmes  in  ESF  operational  programmes  will  play  an  important  role  here, 
while in the 7th Framework Programme there will be dedicated activities such as 'Regions for 
Knowledge',  'Unlocking  Research  Potential'  and  'ERA-NET'.  Finally,  the  CIP  offers  further 
possibilities  for  exchange  of  knowledge  and  good  practice  in  particular  in  the  field  of 
innovation. 

3. 

TOWARDS  MORE  SYNERGIES  BETWEEN  RESEARCH,  INNOVATION  AND  COHESION 
POLICIES 

The  need  for  increased  synergies  between  Research,  Competitiveness  and  Regional  policies 
was repeated during recent meetings of the Competitiveness Council3. A number of advisory 
groups and other actors have also addressed these issues and called for improved cooperation 
and  coordination  at  national  level  between  the  different  players.4  These  groups  have  made 
recommendations covering a variety of issues: 

(a) 

The value for national and regional authorities of developing a specific strategy 
for  co-ordinated  use  of  the  Framework  Programme  and  the  Cohesion  Policy 
programmes as part of their RTDI strategy.  

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On  25  June  2007  the  Council  (Competitiveness)  adopted  conclusions  "on  more  efficient  support  to 
research and innovation: coordinating the use of the research framework programme and the structural 
funds".  Among  other  things,  the  conclusions  underline  the  importance  of  the  development  of  RTDI 
strategies and the strengthening of governance and the development of RTDI excellence. 
The Scientific and Technical Research Committee of the EU (CREST) adopted guidelines on "How to 
make better coordinated use of Framework Programme and Structural Funds to support R&D"; 
The  European  Research  Advisory  Board  (EURAB)  provided  advice  on  "Energising  Europe’s 
Knowledge Triangle of Research, Education and Innovation through the Structural Funds"; The 
European  Strategy  Forum  for  Research  Infrastructures  (ESFRI)  has  called  for  more  synergies  as 
regards Research Infrastructures. ESFRI will produce an analysis on regional aspects of pan-European 
Research Infrastructures in early 2008. The ITRE committee of the European Parliament has recently 
commissioned  a  study  “Synergies  between  the  EU  7th  Research  Framework  Programme,  the 
Competitiveness and Innovation Framework Programme and the Structural Funds” which calls 
for increasing synergies between FP7, CIP and SF, trying to avoid gaps and overlapping. 

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(b) 

(c) 

(d) 

(e) 

(f) 

The importance of using the opportunities provided by Cohesion Policy and the 
Framework  Programme  to  strengthen  the  governance  of  RTDI  strategies 
through exchange and networking.  

Proposals  for  effective  synergies  in  key  areas:  strengthening  and  developing 
RTDI  capacity,  developing  excellence,  paying  due  attention 
to  SME 
dimension,  building  co-operation  at  European  and  international  level  and 
strengthening the economic exploitation of R&D results. 

The need for better communication and collaboration between the national and 
regional actors involved in delivering the FP, the CIP and the Cohesion Policy 
and the need for improved information for beneficiaries. 

The use of actions supported by the Capacities Specific Programme of the 7th 
Framework  Programme  to  inform  the  development  or  delivery  of  actions 
through the relevant Cohesion Policy programme of the participating regions; 
and the use in turn of Cohesion Policy programmes to lay the foundations for 
future participation in the Framework Programmes. 

The  need  for  greater  synergies  between  the  Cohesion  Policy  and  the  FP7  on 
Research Infrastructures, and the importance of involving the "newer" Member 
States in the European Roadmap for Research Infrastructures in a meaningful 
way. 

4. 

CONCLUSIONS 

The  EU  has  complementary  policies  in  place  to  support  research,  innovation  and 
entrepreneurship  in  Europe's  regions  and  Member  States.  Providing  the  basis  of  excellent 
research  and  innovation  in  Europe  is  the  precondition  for  maintaining  the  EU  model  of 
sustainable  development.  Cohesion  policy  can  help  all  regions  to  build  up  research  and 
innovation capacity, to stimulate and support innovations in the social area, and to exchange 
good  practice  through  trans-national  and  inter-regional  co-operation.  Once  regional  actors 
have  reached  a  sufficient  level  of  capacity  to  compete  successfully  in  European  framework 
programmes, the RTD FP and CIP “develop” this capacity further by continuing the exchange 
of  good  practices,  stimulating  a  multi-national  approach  and  connecting  players  together  in 
concrete  problem  solving  initiatives.  In  turn,  the  Structural  Funds  might  support  needs 
previously identified under RTDI FP and CIP instruments. 

The  Community  has  ensured  that  synergies  exist  between  the  instruments  established  to 
further  growth  and  employment.  The  synergies  of  design  should  now  be  translated  into 
synergies  of  action  by  national  and  regional  authorities  and  other  stakeholders.  The 
responsibility  to  meet  the  ambitious  targets  on  improving  the  EU's  research  and  innovation 
performance  lies  with  the  Member  States.  In  cohesion  policy,  the  Community  has  a  major 
source  of  investment  for  this  effort  and  the  progress  which  Member  States  are  making  in 
using this policy to stimulate research and innovation in the European Union in the 2007-2013 
period is encouraging. However, the Commission believes that more can be done at national 
and regional level in terms of improved information on and use of the instruments.  

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(1) 

(2) 

(3) 

(4) 

The Commission invites Member States to improve the arrangements for co-ordinated 
preparation  and  use  of  Community  instruments  to  support  RTD,  innovation  and 
cohesion  at  national  and  regional  level  and  to  include  in  the  reports  on  the 
implementation  of  the  National  Reform  Programmes  information  on  how  these 
arrangements contribute to addressing the countries' key challenges. The opportunities 
for  co-ordinated  use  should  be  considered  in  preparing  strategies  and  operational 
mechanisms, and for different aspects and phases of research and innovation projects. 
Systems  should  also  be  put  in  place  to  raise  the  awareness  of  the  actors  involved  in 
Innovation 
implementing 
Programme, and cohesion policy programmes at national and regional level, including 
national and regional research and innovation ministries, of the opportunities offered 
by these three Community instruments; to stimulate the use of these instruments; and 
to  exchange  information  and  best  practice  on  exploiting  synergies  between  the 
instruments  and  to  make  available  information  on  the  three  instruments  for  potential 
beneficiaries. 

the  Framework  Programme,  Competitiveness  and 

The  Commission  will  prepare  by  the  end  of  2007  a  practical  guide  looking  at  the 
funding opportunities through the eyes of a research institution or a company wishing 
to use EU funding to undertake research and innovation activities. The guide will also 
examine  how  to  set  up  mechanisms  at  national  and  regional  levels  to  foster  co-
ordinated access to the different instruments, and explain Article 54(5) of the Council 
Regulation (EC) No 1083/2006 on the use of funding from two different Community 
sources for the same set of eligible costs; 

The  Commission  will  report  in  spring  2009  on  the  progress  made  at  national  and 
regional level in co-ordinated use of the Community's instruments and on examples of 
good practice at national and regional level;  

To  facilitate  complementary  funding  from  Community,  national  and  regional 
instruments,  the  Commission  will  regularly  inform  national/regional  authorities  on 
organisations established in their respective territories which have benefited from FP7 
and  CIP  grants.  Such  information  will  be  provided  via  the  existing  governance 
structures set out for each of these instruments. 

In order to follow up the actions identified in this Communication, the Commission will bring 
together at regular intervals stakeholders competent in the areas of research, innovation and 
regional  development,  as  well  as  all  Commission  services  concerned  by  the  issue  of 
'Competitive European Regions', to provide support and advice on relevant measures. 

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