Communication from the Commission to the European parliament, the Council, the European Economic and Social Committee and the Committee of the Regions - Ex-post evaluation of the ‘Information Society Technologies (IST)’ Thematic Priority in the Sixth Framework Programme for Research, Technological Development and Demonstration (RTD)
Date: 2008-09-04
Institutions: European Commission
Subjects: data protection, information network, information policy, information society, research and development, transmission network

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 4.9.2008 
COM(2008) 533 final 

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

Ex-post evaluation of the ‘Information Society Technologies (IST)’ Thematic Priority in the 
Sixth Framework Programme for Research, Technological Development and Demonstration 
(RTD) 

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

Ex-post evaluation of the ‘Information Society Technologies (IST)’ Thematic Priority in the 
Sixth Framework Programme for Research, Technological development and Demonstration 
(RTD) 

1. 

Introduction 

(Text with EEA relevance) 

This  Communication  highlights  the  findings  and  recommendations  of  an  evaluation  of  the 
‘Information  Society  Technologies  (IST)’  Thematic  Priority  in  the  Sixth  Framework 
Programme  for  Research,  Technological  Development  and  Demonstration  (RTD),  in  the 
context  of  the  i20101  Strategy.  It  sets  out  the  Commission’s  initial  reactions  and  the 
measures already taken or planned. The evaluation, carried out from May 2007 to May 2008, 
responds to the requirements of the Financial Regulation2, its Implementing Rules3, and the 
provisions for evaluation for the Seventh Framework Programme4. 

2. 

Background 
The objectives of the Sixth Framework Programme5 (FP6) were to strengthen the European 
Research  Area  and  the  scientific  and  technological  bases  of  European  industry  and 
encourage its international competitiveness, and to promote research activities in support of 
other EU policies.  

In  FP6,  implemented  from  2003  until  2006,  the  major  investment  was  in  a  number  of 
thematic priorities intended to focus and integrate Community research: €3 984 million was 
invested in the ‘IST Thematic Priority’ and an additional €216 million was invested in high-
speed  networks  to  connect  research  institutions  in  Europe  with  others  in  the  world.  The 
budget  for  the  ‘Information  and  Communications  Technologies  (ICT)  Theme  under  the 
Seventh Framework Programme (FP7) is €9 050 million for the period 2007-2013.  

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Web reference: http://ec.europa.eu/information_society/eeurope/i2010/index_en.htm. 
Council Regulation No 1605/2002 of June 2002 on the Financial Regulation applicable to the general 
budget of the European Communities (OJ L248/1 – 16.9.2002). 
Commission  Regulation  No  2342/2002  of  23  December  2002  laying  down  detailed  rules  for  the 
implementation of the Council Regulation on the Financial Regulation applicable to the general budget 
of the European Communities (OJ L357/1 31.12.2002). 
Decision  No  1982/2006/EC  of  the  European  Parliament  and  the  Council  concerning  the  Seventh 
Framework  Programme  of  the  European  Community  for  research,  technological  development  and 
demonstration activities (2007-2013) (OJ L412/1 30.12.2006). 
Web reference: http://fp6.cordis.lu/fp6/home.cfm. 

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3. 

Conduct of the evaluation 

The  objective  of  the  evaluation  was  to  assess  the  systemic  effects  of  the  IST  research 
activities under the FP6, and the extent to which they have contributed to the FP6 and wider 
EU  strategic  objectives.  It  focused  on  the  relevance,  efficiency,  effectiveness,  utility  and 
sustainability6 of the investment. 
The evaluation was carried out by a panel of high-level independent experts7, chaired by Mr 
Esko  Aho,  supported  by  a  team  of  professional  evaluators8  The  Panel  analysed  the 
programme documentation and indicators of outputs and impacts. They took evidence from 
key  players  from  the  ICT  sector  and  organisations  carrying  out  IST  research  activities,  as 
well as from senior industrialists, venture capitalists and academics. The emerging findings 
were  discussed  with  members  of  the  European  Parliament’s  ITRE  committee  and  with 
Member State delegations on the IST programme committee (ICTC). 

The  evaluation  report  is  in  Annex  1  and  has  been  disseminated  widely,  including  through 
Europa9, and presented to the ICTC and the ICT Advisory Group. 

4. 

The Commission’s initial reactions, measures already taken or planned 

The Commission welcomes the report and takes full note of the 23 Recommendations in the 
following box. It proposes to make them the subject of a broad debate on European policy on 
innovation in ICT.  

Continuing  efforts  are  made  to  simplify  and  reduce  administrative  burdens,  within  the 
constraints of sound financial management. In the FP7, a flat-rate for overheads is accepted 
for  some  participants,  including  SMEs,  and  average  personnel  costs  can  be  used.  Prior 
financial  viability  checks  are  only  carried  out  for  the  project  coordinators  and  participants 
seeking  more  than  €0.5  million  in  funding.  The  previous  requirement  for  financial 
guarantees is replaced by a guarantee fund, and audit certificates are only requested for cost 
claims  of  over  €0.375  million.  There  is  also  now  a  unique  participant  registration  system, 
such  that  each  participating  organisation  need  only  register  once.  Costs  are  reimbursed  for 
each financial statement, and reporting schedules can be specific to each project. 

To increase flexibility, the project consortia can re-distribute budget to participants without 
informing  the  Commission;  and  each  consortium  has  full  management  autonomy  and  can 
change participants according to the rules they define in their consortium agreement, with a 
simple notification to the Commission. 

To  attract  more  small,  high-growth  companies,  the  Community  can  now  reimburse  up  to 
75% of costs for SMEs, universities and public organisations, compared to 50% under FP6. 
Management  costs  are  reimbursed  at  100%  without  a  cap,  and  the  advance  payment  is 
usually 50% of the total Community contribution. 

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Web reference: http://ec.europa.eu/budget/evaluation/Key_documents/regureq_en.htm. 
Panel: Mr E. Aho (Chairman) - former Prime Minister of Finland and President of the Finnish National 
Fund for Research and Development (Sitra), Mr M. Cosnard - Professor at the Polytechnic School of 
the University of Nice-Sophia Antipolis, Chairman and CEO of INRIA, Mr H-O. Henkel - Professor at 
the University of Mannheim and former CEO of IBM Europe, Middle East and Africa as well as former 
President  of  the  Federation  of  German  Industries,  Mr  L.  Soete  -  Director  of  UNU-MERIT,  Mrs  N. 
Stame - Professor, Social Policy, University of Rome ‘La Sapienza’ and co-founder and first president 
of AIV, Mr P. Telička - former EU Commissioner and Senior Advisor, European Policy Centre. 
Ramboll Management, contracted under the framework contract for evaluations and evaluation-related 
services managed by the Budget Directorate-General of the European Commission. 
Web ref.: http://ec.europa.eu/dgs/information_society/evaluation/rtd/fp6_ist_expost/index_en.htm. 

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The 23 Recommendations of the ‘Aho Report’: 

(1) 

(2) 

It is recommended that efforts be made to continue to consolidate public-private partnerships of a more permanent nature, 
such as Joint Technology Initiatives (JTIs), under the Seventh Framework Programme. 

It is recommended to continue the effort to ensure that support for SMEs and for large firms is not ‘compartmentalised’ into 
different measures or tools. 

(3)  A  platform  should  be  created  under  the  Seventh  Framework  Programme  for  new  and  high-growth  companies  to  meet 

venture capital investors. 

(4)  Participation from outside Europe should be encouraged in all projects, from both developing and industrialised countries. 

(5)  The  advisory  system  —  e.g.  the  IST  Advisory  Group  —  should  be  Internationalised  by  including  top  scientists  and 

engineers from around the world. 

(6)  The  latest  international  developments  and  challenges  should  be  reflected  in  the  work  programme.  A  more  flexible 

approach may be needed to integrate new, interesting developments in the field faster. 

(7)  The  research  effort  should  focus  on  creating  and  sustaining  world  leadership  where  Europe  already  has  a  comparative 
advantage  and  where  Europe  has  a  new  opportunity  to  take  the  lead.  Europe  should  be  selective  and  not  attempt  to 
become a world leader in every area. 

(8)  The  eInfrastructures  approach  should  be  expanded  to  more  application-oriented  and  user-oriented  platforms  in  other 

sectors. 

(9)  Accounting  control  in  JTIs  should  be  carried  out  by  Member  States  and  participating  companies,  with  a  minimum  of 

intervention at Community level. 

(10)  The Panel strongly recommends developing a more trust-based approach towards participants at all stages. The existence 

of a few unfortunate examples should not be allowed to stand in the way of innovation. 

(11)  Shorter  proposals  should  be  required  with  fewer  details  of  work  packages  and  a  focus  on  the  appropriateness  of 

partnerships, in particular the inclusion of highly innovative participants. 

(12)  More complete and helpful feedback should be provided to proposers whose ideas are not funded. 

(13)  A new approach should be tested whereby proposals are not fully evaluated initially. All applications passing a few basic 
checks  should  be  given  a  small  amount  of  ‘seed  funding’  for  an  exploratory  phase.  After  this,  exploratory  projects  with 
successful results would be selected for full project funding. 

(14)  Financing  projects  based  on  actual  performance  rather  than  promises  and  reputation  could  both  reduce  the  initial 
paperwork and be a viable way of attracting innovative (small) companies that would not otherwise consider applying for 
Community funding. 

(15)  Consideration  should  be  given  to  expanding  the  two-step  evaluation  procedure  from  the  Open  part  of  the  ‘future  and 
emerging technology’ area to other parts of the programme — prospective participants first provide a broad outline of their 
project idea, and only provide a more refined plan once they are selected. 

(16)  Reporting,  which  is  time-consuming  and  may  be  untimely,  should  be  optimised  to  allow  the  participants  to  report  when 

there is something to report. 

(17)  It should be possible to refocus research on different priorities if this becomes necessary during implementation. 

(18)  Similarly, more flexibility should be allowed in the composition of partnerships during the project, including the possibility of 
changing partners if the research takes a direction that would benefit from new partners or the replacement of partners. 

(19)  The  Panel  recommends  a  more  strategic  use  of  standardisation  to  create  new  EU-wide  markets.  Standard-setting  is 

needed as a tool for pulling through innovations and creating viable markets for new products and services. 

(20)  Welcoming  the  recent  Commission  Communication  on  pre-commercial  procurement,  the  Panel  recommends  that  new 

initiatives be taken to allow public authorities to procure the development of innovative goods and services. 

(21)  The European single market needs to be made more effective for business angels and venture capitalists, and European 

investment funds need to be more effectively utilised to pull through innovations from the Framework Programmes. 

(22)  When  this  cannot  be  left  to  market  forces,  a  more  strategic  approach  to  standardisation  at  European  level,  focused  on 
interoperability and development of standards where there is a well-documented need for coherent innovative services and 
European leadership, will be in the broader public interest. 

(23)  The  interconnection  of  large  regional  and  national  eInfrastructures  should  be  further  developed.  EU-wide  platforms  and 
infrastructures are needed in sectors such as eGovernment (especially procurement), eHealth (cross-border applications), 
logistics and transport. Framework RTD should be complemented by other measures, in particular public procurement at 
both national and European level. 

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The Commission agrees that additional efforts should be made to increase the global reach of 
the  programme  in  areas  where  Europe  can  take  the  lead.  All  projects  are  now  open  to 
participation from more than 150 countries with international cooperation agreements, under 
the same conditions as for the 38 associated and Member States. A new funding instrument 
is  available  for  wider  international  collaboration.  The  Commission  will  explore  options  to 
further increase the global reach of ICT research. 

The  Commission  agrees  that  the  European  innovation  environment  is  critical  to  effective 
exploitation  of  the  ICT  research  results,  and  it  welcomes  in  particular  the  Panel’s 
recommendations on the need for systemic changes. It is essential that Europe is made more 
attractive to investment in research and innovation and that the right conditions are created 
for  small,  high-tech  companies  to  flourish  and  grow.  As  a  first  step,  the  Commission  will 
examine  mechanisms  to  help  new  and  high-growth  companies  to  meet  venture  capital 
investors.  Secondly,  the  Commission  will  explore  options  to  speed  up  the  process  of 
developing  standards  and  specifications  for  innovative  products  and  services.  Lastly,  the 
Commission  will  explore  options  for  more  holistic  innovation  ‘eco-systems’10  that  would 
reduce  the  fragmentation  of  public  and  private  markets  for  innovative  solutions;  exploit 
synergies; and coordinate European efforts more systematically. This effort would build on 
the Lead Market Initiative11; Pre-Commercial Procurement12, and take account of the lessons 
learnt from Joint Technology Initiatives, Joint National Research Programmes, and European 
Technology Platforms. 

5. 

Conclusions 

The  Commission  invites  the  European  Parliament  and  the  Council  to  take  note  of  the 
findings  and  recommendations  of  the  evaluation  Panel,  and  to  reflect  on  how  best  to  take 
them  forward.  In  particular,  the  Commission  recognises  that  further  reduction  of  red  tape 
remains  a  significant  challenge.  It  shares  the  Panel’s  view  of  the  need  to  develop  a  risk-
tolerant  implementation  of  the  rules  on  research  funding.  It  believes  that  the  European 
Parliament  and  the  Council  also  have  a  role  to  play  in  enabling  such  a  trust-based 
environment, and invites them to take this into account in future discussions of the FP Rules 
of Participation and the Financial Regulation. 

The Commission will consult on the findings and recommendations with the aim to increase 
flexibility, cut red tape and to respond to the call for a greater strategic impact from EU level 
research. To this end, the Commission is launching an on-line public consultation on broader 
and  longer-term  policy  implications  alongside  the  present  evaluation  report,  the  results  of 
which  will  be  summarised  in  a  Communication  on  ICT  research  and  innovation  in  early 
2009. 

The  interim  evaluation  of  ICT  RTD  in  the  FP7  will  also  allow  the  effectiveness  of  new 
measures to be assessed. It will be available in late 2009 as a basis for further reflection. 

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The network of researchers and entrepreneurs, interacting with investors and markets. 
Communication on ‘A lead market initiative for Europe"’ COM(2007) 860. 
Communication  on  ‘Pre-commercial  Procurement:  Driving  innovation  to  ensure  sustainable  high-
quality public services in Europe’ COM(2007) 799. 

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ANNEX 1 
KEY FINDINGS AND RECOMMENDATIONS FROM THE EVALUATION REPORT 

Innovations 
to  Europe's 
in  Information  and  Communication  Technologies  (ICT)  are  vital 
competitiveness and economic welfare. They form the foundation for a knowledge- based economy: 
their development and use is crucial to sustaining growth and productivity. Investment in information 
society research and technology development has therefore rightly been a thematic priority in the 6th 
Framework Programme for Research and Technological Development (IST-FP6) – allocated €4B from 
2003 to 2006. 

This  evaluation  of  the  IST  thematic  priority  has  looked  at  how  effective  the  research  has  been  at 
creating new knowledge and innovation, as well as converting these innovations into economic growth 
and welfare through Europe's broader innovation systems. 

The research investment has been well managed and has been effective in reaching its goals. However, 
improvements  can  be  made  in  the  flexibility  and  simplification  of  the  funding  mechanism,  and  in 
strengthening  the  global  impact  of  European  research  in  this  area.  More  flexibility  in  programme 
the  Panel’s 
administration  can  help  attract  more  new  high-growth  companies.  Most  of 
recommendations  regarding  the  management  of  the  research  could  be  implemented  by  the 
Commission within the duration of the 7th Framework Programme (in 2010 to 2013).  

Other recommendations may require a more long-term effort and/or reach beyond the domain of the 
Framework Programmes at a more strategic and political level. The extent to which new knowledge 
and  skills  created  in  Europe  are  exploited  in  Europe  depends  on  a  broad  portfolio  of  policies  and 
measures which affect the innovation "eco-system". Systemic change is needed to remove barriers to 
innovation  and  promote  stronger  interactions  between  users,  researchers  and  business  -  notably  in 
regional innovation systems. 

The evaluation has identified a number  of opportunities to improve the environment for innovations 
from  ICT  research  in  the  European  Framework  Programmes.  Greater  synergies  are  needed  with 
venture capital investment; with regional innovation strategies and with public procurement. A more 
strategic,  European  level,  approach  is  needed  to  standardisation,  lead  market  development  and  the 
mobilisation of public-private partnerships, as in the Joint Technology Initiatives launched as a result 
of activities in the 6th Framework Programme.  

1. 

1.1. 

MANAGEMENT OF THE EUROPEAN RESEARCH INVESTMENT 

Utility and sustainability – the role of IST-FP6 

Much of the research funded by the EU under IST-FP6 would not have been undertaken, or 
only undertaken in a much reduced form, without European support. IST-FP6 has therefore 
played a significant role in taking research activities to European and global levels. This is 
especially true when effectiveness requires critical mass, broad discussions and “new eyes” 
on a problem, or when research needs to be shared with an advanced group of experts in the 
field.  

The  achievements  have  high  sustainability.  Participants  gain  significant  benefit  from 
strengthened networks, new knowledge and skills. The networking effects are crucial, with 
many  participants  developing  long-lasting  collaboration.  Some  of  these  networks  have 
become  stable  structures  that  form  the  core  of  wider  collaborative  environments,  such  as 
European  Technology  Platforms.  As  a  result,  JTIs  have  been  introduced  as  a  way  of 
strengthening public-private partnerships in research at the European level. The new JTIs on 
nano-electronics  and  "embedded  systems"  are  good  examples  of  how  the  Framework 
Programme will have a positive long-term impact. 

It  is  recommended  that  efforts  are  made  to  continue  to  consolidate  public-private 
partnerships of a more permanent nature, such as JTIs, from the 7th Framework Programme. 

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1.2. 

Effectiveness – the impact of IST-FP6 research 

Overall, the participation rate of small companies (SMEs) has been sustained at over 20%, 
which  is  well  above  the  15%  target  set  by  the  European  Parliament  and  the  Council. 
However,  the  involvement  of  high-growth  companies  in  the  programme  remains  low.  This 
raises  questions  about  the  degree  to  which  the  Framework  Programme  is  attractive  and 
accessible  to  high-growth  companies,  and  the  degree  to  which  participation  in  it  assists 
access to venture capital and to European and global markets.  

Both small and large firms are required to create the optimum environment for SME growth, 
and financing mechanisms should be open to both. Both types of firms have their role in the 
innovation eco-system and each is important to the other. It is positive that the collaborative 
research in the Framework Programme enables small and large companies to work together 
in  most  projects.  However,  the  smaller  "targeted  research"  projects  must  not  become  a 
special instrument for SMEs and larger Integrated Projects must not be overly dominated by 
large enterprises. 

It is recommended to continue the effort to ensure that support for SMEs and for large firms 
is not “compartmentalised” into different measures or tools. 

Research  networks  created  through  participation  in  European  projects  have  increased  the 
effectiveness  of  knowledge  transfer  among  organisations  and  the  speed  of  diffusion  of 
information, as well as the mobility of human resources. Changes in research partnerships as 
a consequence of participation in the Framework Programme are one of the areas where the 
impact of EU investment is most visible. Many participants report that the strong networks 
created during the Framework Programme will continue as the basis for their future research 
cooperation. 

Much of the  research is “far from the  market” or basic  research, and commercialisation of 
new  products  and  services  is  not  a  direct  objective.  Little  has  been  done  recently  to  link 
participants  to  the  venture  capital  community.  A  facility  to  promote  such  links  was 
beginning to be developed in the period up to the year 2002, but largely vanished with the 
economic downturn immediately thereafter. It is time to consider reintroducing one or more 
instruments for this purpose. 

A platform should be created within the scope of the 7th Framework Programme for new and 
high-growth companies to meet venture capital investors. 

In  section  2.1  further  recommendations  are  made  to  strengthen  this  link  and  to  stimulate 
subsequent market innovations. 

International cooperation between the EU and China, India and Africa has been strengthened 
and 60% of the top-25 global innovation-leaders are involved in the programme. Integrated 
Projects  have  been  effective  in  connecting  European  IST  research  to  the  world  innovation 
system.  However,  international  co-operation  should  also  be  used  to  bring  the  best  science 
and  technology  of  the  world  to  European  researchers,  so  that  they  can  build  upon  it.  It  is 
therefore recommended to further globalise the Framework Programme, as elaborated below. 

1.3. 

Globalising the Framework Programme 

Europe  cannot  afford  to  be  an  RTD  “Fortress".  European  researchers  need  to  be  partners 
with the best in the world, whether they are from inside or outside of Europe. There is a need 
to  open  up  further  to  the  world  so  that  developing  European  research  and  innovation  can 
draw  upon  the  best  minds  and  the  best  ideas,  regardless  of  their  origin.  In  addition,  some 
technologies  developed  in  Europe  will  need  to  be  commercialised  in  other  markets,  in 
collaboration with non-European firms, to the eventual benefit of European companies and 
consumers.  

If  the  best  researchers  from  around  the  world  participate  in  the  Framework  Programme,  it 
will  also  become  more  attractive  for  the  best  European  researchers.  This  is  particularly 

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relevant  for  highly  innovative  smaller  high-growth  firms  which  are  not  currently  well 
represented  in  the  programme.  Giving  them  the  opportunity  to  work  with  the  world’s  best 
researchers and innovators would increase their motivation to take part in the programme. 

Although cooperation, in particular with Asia and Africa, has been strengthened, the Panel 
recommends that these efforts are taken even further in order to make the programme truly 
global: 

Encourage  participation  from  outside  Europe  in  all  projects.  Participation  from  both 
developing and industrialised non-European countries should be encouraged. 

Internationalise  the  advisory  system  –  e.g.  the  IST  Advisory  Group  -  by  including  top 
scientists and engineers from around the world 

Reflect the latest international developments and challenges in the work programme. A more 
flexible  approach  may  be  needed  to  integrate  new,  interesting  developments  in  the  field 
faster.  

Focus the research effort on creating and sustaining world leadership where Europe already 
has  a  comparative  advantage  and  where  Europe  has  a  new  opportunity  to  take  the  lead. 
Europe should be selective and not attempt to become world leader in every area 

1.4. 

Relevance and strategic impact – IST-FP6 and wider EU objectives 

IST  research  investments  in  2003-2006  have  contributed  to  sustain  and  create  European 
world  leadership  in  some  research  areas,  although  not  always  translated  into  lead  market 
capabilities  in  ICT  and  applications.  IST-FP6  has  reinforced  market  leadership  in  mobile 
communications  and  research  leadership  in  high-speed  networking,  GRIDs,  advanced 
robotics  and  audiovisual  systems.  World  leadership  has  been  achieved  in  the  development 
and use of high-speed e-Infrastructures for science and research. In these areas, opportunities 
have been created for new entrants (notably SMEs) in addition to the continued participation 
of  leading  companies.  Support  to  emerging  technologies  has  created  world  leadership  in 
quantum communications, nano-electronics and complex systems. 

The  successful  development  of  high-speed  electronic  networks  (eInfrastructures)  has 
demonstrated the importance of European intervention in infrastructure development. These 
initiatives have created European world leadership.  

The  e-infrastructures  approach  should  be  expanded  to  more  application-oriented  and  user-
oriented platforms in other sectors. 

The European Research Area has been strengthened, especially through Integrated Projects, 
Networks of Excellence, and the clustering of projects. European Technology Platforms have 
extended cooperation beyond the individual projects financed under the IST-FP6. They have 
fostered  wider  synergies  with  national  and  private-sector  initiatives  and  have  been  an 
essential  step  towards  new  Joint  Technology  Initiatives  (JTIs).  These  are  an  incentive  for 
industry and Member States to increase their R&D funding. They provide a way of creating 
new partnerships between publicly and privately-funded organisations involved in research, 
focusing on areas where research and technological development can contribute to European 
competitiveness and improving the quality of life. They can therefore be seen as a pioneering 
approach in pooling public and private research efforts and they have become an integrated 
part of the 7th Framework Programme. 
Both JTIs and "living labs"13 have the potential to further strengthen the innovation process 
in other areas. They represent a more “systemic” approach by bringing together the supply 
side  (enterprises  and  researchers)  and  the  demand  side  (users  and  public  authorities).  JTIs 

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Living labs are city- level centres of innovation and experimentation, generally in mobile technologies 
and applications, bringing together users and developers to create and test ideas and products. 

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and  "living  labs"  could  also  be  used  as  vehicles  for  targeted  public  procurement  of 
innovation.  However,  the  Panel  is  concerned  that  JTIs  may  be  subject  to  overly-strict  EU 
administrative  controls  which  may  inhibit  innovation  and  participation  of  innovative 
companies, as has been the case for the Framework Programme. 

The Panel recommends that accounting control in JTIs is carried out by Member States and 
participating companies, with a minimum of intervention at the Community level. 

1.5. 

Efficiency – cutting red tape 

It is important to pursue the goals of the research in a cost-effective manner. Further efforts 
are  needed  on  simplification  and  reduction  of  administrative  burdens  of  the  Framework 
Programme, both for participants and for the Commission. They have not been significantly 
reduced  in  the  6th  Framework  Programme,  because  of  the  unfamiliarity  with  the  new 
instruments  and  the  large  number  of  partners  in  Integrated  Projects  and  Networks  of 
Excellence.  Some  improvements  have  been  made  in  the  transition  to  the  7th  Framework 
Programme,  but  there  is  a  need  for  further  simplification  and  increased  flexibility.  The 
Commission should explore options for further simplification. 

1.6. 

Simplifying management  

The measures taken by the Commission to ensure responsible use of public funds can often 
inhibit  the  programme  from  reaching  its  full  potential,  for  example  many  of  the  most 
innovative companies – in particular high-growth SMEs – are discouraged from participating 
in the research programme because of the cumbersome procedures for both application and 
implementation.  

The system of evaluation of proposals can discourage newcomers: feed-back on the quality 
of applications to unsuccessful proposers is reported by participants as poor compared with 
communication  from  private  sector  funding  sources;  a  consensus-based  evaluation  process 
tends to result in projects offering incremental developments rather than radical innovations; 
and it is difficult to attract the best scientists from industry as evaluators.  

While these are common problems in all public research funding, some were exacerbated in 
the  6th  Framework  Programme  by  the  introduction  of  new  instruments  and  increased 
overheads linked to the management of very large project consortia.  

The  Panel  strongly  recommends  developing  a  more  trust-based  approach  towards 
participants at all stages. The existence of a few unfortunate examples should not be allowed 
to stand in the way of innovation. Specific elements in the development of such an approach 
are detailed below. 

Efforts should be made to both simplify and introduce flexibility in the three key phases of 
the  project  lifecycle  –  the  application, the  evaluation  of  proposals,  and  the  management  of 
funded projects:  

At the application stage, it is recommended:  

To  require  shorter  proposals  with  fewer  details  of  work  packages  and  a  focus  on  the 
appropriateness of partnerships, in particular the inclusion of highly innovative participants. 

At the evaluation of proposals stage, it is recommended: 

That more complete and helpful feedback is made available to proposers whose ideas are not 
funded. 

To test a new approach whereby proposals are not fully evaluated initially. All applications 
passing  a  few  basic  checks  should  be  given  a  small  amount  of  "seed  funding"  for  an 
exploratory phase. After this, exploratory projects with successful results would be selected 
for full project funding. Financing projects based on actual performance rather than promises 
and  reputation  could  both  reduce  the  initial  paperwork  and  be  a  viable  way  of  attracting 

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innovative (small) companies which would not otherwise consider applying for Community 
funding. 

To explore expanding the two-step evaluation procedure from the Open part of the "future 
and  emerging  technology"  area  to  other  parts  of  the  programme  -  prospective  participants 
first provide a broad outline of their project idea, and only provide a more refined plan once 
they are selected. This may increase the workload for the Commission in the early phases, 
and  lengthen  the  evaluation  process,  but  it  will  significantly  reduce  the  burden  on  the 
research community of preparing proposals.  

At  the  stage  of  project  management,  the  main  problem  is  the  rigidity  of  carrying  out  the 
research  according  to  a  fixed  schedule  and  with  a  partnership  established  in  advance.  It  is 
therefore recommended: 

To  optimise  reporting,  which  is  time-consuming  and  may  be  untimely,  and  allow  the 
participants to report when there is something to report. 

To  allow  the  refocusing  of  the  research  on  different  priorities  if  this  becomes  necessary 
during implementation. 

Similarly,  to  allow  more  flexibility  in  the  composition  of  partnerships  during  the  project, 
including the possibility of changing partners if the research takes a direction which would 
benefit from new partners or replacement of partners. 

2. 

BROADER POLICY RECOMMENDATIONS: REALISING THE FULL BENEFIT IN GROWTH 
AND WELFARE THROUGH THE EUROPEAN INNOVATION ECO-SYSTEM 

ICT is an enabling, pervasive technology, whose benefit depends on a dynamic "eco-system" 
of RTD and innovation. Supply-side support alone to RTD, such as that of the Framework 
Programme,  is  not  sufficient.  It  is  also  necessary  to  improve  the  linkage  of  RTD  into  the 
innovation “ecosystem” in Europe. The approach to innovations must be to simultaneously 
"push"  through  RTD  and  "pull"  through  market  demand  and  public  services,  with  efforts 
needed simultaneously at national/regional level and at the European level.  

For these reasons, the Panel has devoted a significant part of their evaluation to those factors 
which  determine  the  outcomes  and  impact  of  European  research.  Many  of  the  Panel’s 
recommendations  therefore  relate  to  systemic  measures  which  lie  outside  the  Framework 
Programme  management,  but  which  must  be  associated  with  it.  There  are  several  areas  in 
which an effort should be made, but the Panel has focused on two key issues: 

–  Developing new markets, and 

–  Improving European infrastructures and interoperability. 

2.1. 

Developing new markets 

Innovation  needs  new  capital  investment.  However,  venture  capital  is  less  available  in 
Europe than in the USA. During most of the 6th Framework Programme, the availability of 
early stage (seed and start-up) venture capital in the EU15 was approximately half of that in 
the  US.  In  addition,  European  public  authorities  do  not  fully  utilise  their  considerable 
purchasing  power  to  foster  innovation  through  procurement  of  innovative  services  and 
technologies. 

Although knowledge flows in both directions between the EU and the US, there is a net flow 
from Europe to the US. Thus, while enterprises often choose Europe as a location for R&D, 
commercialisation of their research results in many cases takes place in the US, a tendency 
further  supported  by  the  fact  that  the  top  50  global  companies  in  the  ICT  sector  are 
predominantly American or Japanese. 

To improve the “ecosystem” of R&D and innovation in Europe, the demand for innovative 
solutions and the financing of high-growth innovative enterprises must be increased.  

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Strengthening the demand for innovative solutions 

To ensure that R&D results are converted into growth and benefit for society, there is a need 
for an accompanying multifaceted, demand-oriented effort.  

The  Panel  recommends  a  more  strategic  use  of  standardisation  to  create  new  EU-wide 
markets.  Standard-setting  is  needed  as  a  tool  for  pulling  through  innovations  and  creating 
viable markets for new products and services. 

The  public  sector  has  the  potential  to  create  demand  for  innovative  goods  and  services. 
Public  procurement  currently  accounts  for  approximately  17%  of  Europe’s  GDP. 
Historically,  it  has  been  one  of  the  strong  drivers  of  innovation  and  take-up  of  new 
technologies. However, Europe is lagging behind the US, where public procurement plays a 
key role in innovation. Thus, there is potential for significantly grater value to be generated 
by the Framework Programme research through increased public procurement of innovation 
at regional, national and EU level. At the same time, it should be emphasized that research 
and  procurement  of  innovation  should  not  focus  only  on  products,  but  also  on  the 
development of new, innovative services.  

the  recent  Commission  Communication  on  pre-commercial 
The  Panel  welcomes 
procurement,  and  recommends  that  new  initiatives  are  taken  to  allow  public  authorities  to 
procure the development of innovative goods and services. 

Increasing the availability of financing 

Europe lags behind the US in the availability of finance to support the growth of companies. 
Not enough venture capital is available in Europe and many technologies and services with 
commercial  potential,  developed  by  small,  highly  innovative  European  firms,  attract  US 
investment. The growth benefits of these firms are effectively relocated from Europe to the 
US.  Europe  needs  to  be  competitive  not  only  in  technology  development  but  also  in  the 
availability  of  capital  for  innovation  and  growth.  We  must  secure  European  resources  for 
these companies to grow. This will also secure a new base of innovative companies capable 
of  participating  in  Framework  Programmes.  Business  angels,  seed  capital  and  full-scale 
venture capital need to be available in order to have a well-functioning financial market for 
innovation and growth. 

The European single market needs to be made more effective for business angels and venture 
capitalists,  and  European  investment  funds  need  to  be  more  effectively  utilised  to  pull 
through innovations from the Framework Programmes. 

2.2. 

Improving European infrastructures, standards and interoperability 

The  development  of  cross-border  infrastructure,  interoperability  and,  in  some  sectors, 
standards, is one of the areas where true European added value can be achieved.  

In  some  cases,  the  market  takes  care  of  the  development  of  de  facto  standards  through 
competition.  However,  national  regulations  and  practices  can  constitute  barriers  to  the 
development  of  European  and  global  standards.  This  fragments  markets  and  prevents 
European companies from reaping the full benefits of a single European market. 

A more strategic approach to standardisation at the European level, when this cannot be left 
to market forces, focused on interoperability and development of standards where there is a 
well-documented need for coherent innovative services and European leadership, will be in 
the broader public interest. 

The interconnection of large regional and national eInfrastructures should be further 
developed.  EU-wide  platforms  and  infrastructures  are  needed  in  sectors  such  as 
eGovernment (especially procurement), eHealth (cross-border applications), logistics 
and  transport.  Framework  RTD  should  be  complemented  by  other  measures,  in 
particular public procurement at both national and European level.  

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