COMMISSION STAFF WORKING PAPER EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENTIntegrating ex-ante evaluation requirements
Date: 2011-11-30
Institutions: European Commission
Subjects: EU financing, EU office or agency, EU research policy, higher education, innovation, research and development, research body

EUROPEAN COMMISSION 

Brussels, 30.11.2011 
SEC(2011) 1434 final 

COMMISSION STAFF WORKING PAPER 

EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT 
Integrating ex-ante evaluation requirements 

Accompanying the document 

Proposal for an amended Regulation of the European Parliament and of the Council  

on the European Institute of Innovation and Technology 

{COM(2011) 817 final} 
{COM(2011) 822 final} 
{SEC(2011) 1433 final} 

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1. 

Background  

The EIT was set up to fill a gap in the European landscape and with a clear objective: promote 
innovation  via  the  full  integration  of  the  knowledge  triangle  (research,  innovation  and 
education). The EIT is a novel initiative at EU level that explicitly links the full innovation cycle 
from education and knowledge creation to new market opportunities and business creation. The 
EIT  is  characterized  by  two  main  principles:  an  independent  EIT  organisation,  (neither  the 
Commission  nor  representatives  from  the  Member  States  are  members  of  the  EIT  Governing 
Board)  which  organizes  the  selection  process  of  KICs,  coordinates  them  with  a  flexible 
framework  and  disseminates  best  governance  and  funding  models  from  the  KICs;  and 
autonomous KICs, which define their internal organisation, composition, agendas and working 
methods.  

As  an  agency  and  in  contrast  to  programs,  the  EIT  does  not  have  actions  but  implements  its 
activities  notably  via  the  KICs  which  are  integrated,  long-term  partnerships,  set  for  a  period 
between 7-15 years, spanning over various financial frameworks. KIC have legal status. The first 
three  KICs  have  been  selected  in  the  fields  of  climate  change  adaptation  and  mitigation 
(ClimateKIC), future information and communication society (ICT Labs) and sustainable energy 
(InnoEnergy). The KICs are presented in more detail in the Annexes.  

The EIT has a EU budgetary contribution of €3 09m for the period 2008-13. The EIT has fully 
absorbed the amounts allocated in 2009 and 2010 (5,6 million and 26 million respectively) and is 
expected  to  fully  commit  the  55  millions  allocated  in  2011.  This  is  an  important  milestone, 
considering  the  large  volume  of  carry-overs  and  cancellations  of  operational  appropriations  of 
EU  agencies  especially  in  during  their  first  years  of  existence  (cf.  Report  of  the  Court  of 
Auditors). 

The EIT is reflected in the EU2020 and in key flagships and initiatives such as: 

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The Innovation Union Communication  

The Youth on the Move Communication  

Modernisation of the Higher Education Agenda  

The Commission's Regional Policy communication on smart growth  

2. 

Problem definition 

Innovation  has  been  put  at  the  top  of  the  EU  policy  agenda  for  a  good  reason.  A  number  of 
challenges  and  barriers  continue  to  inhibit  the  innovation  capacity  in  Europe  and  its  ability  to 
tackle complex societal challenges in a sustainable way. This has implications for the continued 
competitiveness  of  firms,  Higher  Education  Institutions  and  Research  Institutes  across  the  EU 
and, ultimately for the employment, social, environmental and economic well-being of citizens 
of  the  EU.  The  EIT  has  been  set  up  to  support  addressing  these  challenges.  Building  on  the 
Horizon 2020 challenges, the first EIT Impact Assessment and the positioning of the EIT within 
the innovation landscape, the following underlying drivers have been identified:  

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a poor record of developing, attracting and retaining talented individuals; 

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a fragmented innovation system; 

the  underutilisation  of  existing  research  strengths  in  terms  of  realising  economic  or 
social value; 

a low level of entrepreneurial activity, particularly in establishing potential high-growth 
businesses and capturing the value of research and innovation outputs. 

The talent challenge is characterised by the fact that Europe faces serious problems in attracting, 
retaining  and  developing  qualified  human  resources.  This  is  aggravated  by  the  fact  that  global 
competition for postgraduate student and researchers is increasing since the emerging economies 
play an ever more important role. 

The European Commission's Innovation Union highlights the need to get more value for money 
and  tackle  fragmentation.  EU  and  national  research  &  innovation  systems  need  to  be  better 
linked up with each other and their performance improved.  

There is excellent potential within the European research and innovation structure, provided by a 
series of centres of excellence that have emerged. There is, however, scope for improving the 
utilisation of this excellence.  

Europe lacks the generally entrepreneurial culture that characterises the US or the emerging 
Asian  economies.  A  major  reason  for  this  might  be  the  different  attitudes  to  risk,  seen  as  a 
defining  factor  of  entrepreneurship.  Also,  in  Europe  the  concept  of  entrepreneurial  thinking  is 
largely confined to business schools and economics courses.  

The EIT's independent evaluation confirmed the EIT concept and general objectives but referred 
to some issues related to the implementation of the EIT following its launch. In assessing how 
far the EIT achieved its overall objective of increasing the innovation capacity of Member States, 
the  evaluation  found  that  the  impact  of  EIT  in  structuring  innovation  across  Europe  is  limited 
due to factors such as lack of critical mass, administrative inefficiencies and limited economies 
of scale related to a limited scope of activities. It is important to underline that all of these issues 
are related to the implementation of the EIT. 

3. 

Synergies, complementarities and EU Added Value  

In  its  Common  Strategic  Framework  for  Research  and  Innovation  (Horizon  2020),  the 
Commission  identified  three  complementary  and  interlinked  pillars:  Excellence  in  the  science; 
Tackling  societal  challenges;  Creating  industrial  leadership  and  Competitive  frameworks.  The 
promotion  of  innovative  education  and  entrepreneurial  mindsets  is  a  particularly  unique 
dimension and the main contribution of the EIT across the three pillars of Horizon 2020. As part 
of  Horizon  2020,  the  EIT  has  been  framed  within  the  pillar  "Tackling  societal  challenges", 
through  its  innovation  activities  and  knowledge  triangle  integration.  However,  given  its 
integrated, cross–cutting nature, synergies should also be sought with other pillars, in particular 
the  "competitiveness"  pillar.  Linkages  are  being  developed  at  KIC  level  with  other  initiatives, 
which materialise in a variety of ways, from KIC to KIC and challenge to challenge.  

As  Horizon  2020  does  not  cover  education  activities  beyond  the  EIT,  the  EIT  has  a  particular 
contribution to make to the objectives of Horizon 2020 via innovative, entrepreneurial education, 
playing  an  important  bridging  role  between  the  Research  and  Innovation  Framework  and 

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education policies and programmes. In this context, the EIT will contribute to achievements of 
the  European  Higher  Education  Area.  In  particular,  through  new,  trans/interdisciplinary  EIT-
labelled degrees, the EIT is leading a collaborative effort towards education for innovation with 
clear spill over effects on the broader European agenda for the modernisation of higher education 
institutions. 

Moreover,  the  EIT  can  contribute  to  the  Cohesion  Framework  by  addressing  the  linkages 
between the local and global aspects of innovation. Co-location centres provide for cross-border 
collaboration within and outside of the KIC networks and are well positioned to capitalise and 
benefit from various funding schemes from their respective regions. Via the co-location centres, 
the EIT and KICs have a strong territorial impact and offer  an important element of European 
added value next to the development of smart specialisation and clusters. 

The European nature of the EIT offers a strong element of EU added value. At present, the EIT 
is  the  only  EU  initiative  that  explicitly  links  the  full  innovation  cycle  from  education  and 
knowledge  creation  to  new  market  opportunities  and  business  creation.  This  is  beginning  to 
demonstrate  a  number  of  potential  efficiency  gains,  as  has  been  suggested  by  the  external 
evaluation of the EIT.1 Other EU initiatives also do not have the same institutional dimension.  

The EIT specifically aims to brings added value at EU level by:  

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Building up new innovation models via world-class long-term integrated partnerships;  

Overcoming fragmentation and connecting excellence across the EU;  

Fostering entrepreneurship through knowledge triangle integration;  

Nurturing talent across borders;  

Operating according to a results-oriented approach;  

Experimental character;  

Leverage on private investment.  

4. 

Objectives 

The external evaluation of the EIT validated the concept of the EIT and its goals of contributing 
to improving the innovation capacity of the EU by involving partner organisations in integrated 
innovation,  research  and  education  activities  at  the  highest  standards.  EIT's  ambition  of 
becoming  a  model  for  the  integrated  European  Innovation  Research  and  Education  area  by 
generating innovations in areas of key economic or societal interest remains appropriate. Since 
the  introduction  of  the  EIT,  the  importance  of  EU  support  for  tackling  societal  challenges  has 
increased  in  significance.  The  rationale  for  public  intervention  is  strong  given  the  levels  of 
market  failure  present  and  the  missing  incentives  for  firms  to  engage  in  innovation  addressing 
societal challenges. 

In full alignment with other EU initiatives the general objectives of the EIT are to 

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http://ec.europa.eu/dgs/education_culture/evalreports/index_en.htm#educationHeader 

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Contribute  to  reinforcing  the  innovation  capacity  of  Member  States  and  the  EU  by 
promoting  the  formation  of  integrated  and  co-located  partnerships  which  combine 
innovation, research and education activities and act as globally recognized flagships for 
new models of innovation; 

Deliver actions which tackle key societal challenges through developing new products, 
processes and services of the highest international standards. 

Some more specific objectives underpin the general objectives outlined above: 

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Integration of the knowledge triangle (of research, innovation and education) to create 
economic  and  social  value  and  to  enhance  the  returns  from  greater  levels  of 
collaboration and co-operation. 

Enhancement  of  the  attractiveness  and  commercial  relevance  of  post-graduate 
education; opportunities to attract, develop and retain appropriate skills; 

Exploitation  of  the  underutilised  potential  of  the  EU’s  research  strengths  to  deliver 
greater returns in the product and labour markets;  

Development of effective collaborative linkages between centres of excellence to create 
a critical mass for advanced innovation and education; 

Promotion  of  the  development  of  innovative  products  and  processes  where  market 
failures lead to a sub-optimal provision;  

Strengthening  the  capacity  for  entrepreneurship  across  the  EU  to  create  new  business 
activity  and  increased  realisation  of  the  potential  value  of  research  and  educational 
outputs; 

Strengthening  existing  and  potential  centres  of  research,  innovation  and  educational 
excellence  in  the  EU  to  produce  globally  competitive  centres  of  activity  with  global 
reputations for excellence; 

Addressing disparities in innovation capacity across the EU by developing and sharing 
the knowledge of the returns to the new models of innovation practices and governance. 

While addressing its specific objectives, the EIT operational objectives are guided by the need to 
achieve  critical  mass  of  KICs  through  consolidation  and  expansion;  enhance  administrative 
efficiency  and  capacity  through  providing  support  functions  for  the  KIC,  simplification 
measures,  targeted  services  and  outreach  strategy  including  internationalisation;  improve  and 
extend the EIT activities including dissemination with view of achieving economies of scale. 

5. 

Policy options 

A number of options for the development of the EIT were considered prior to its launch in 2009 
and were subject to an impact assessment2. There has been no significant change in the context to 
warrant  the  reinstatement  of  those  options  which  were  rejected  and  so  the  current  IA  does  not 

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http://eit.europa.eu/fileadmin/Content/Downloads/PDF/Official_documents/impact_en.pdf 

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consider those rejected options further3. Instead the Options presented build upon the experience 
gained  in  the  first  two  years  of  the  EIT’s  activities.  The  Options  are  guided  by  the  objectives 
outlined above.  

Three Options have been analysed: 

Option 1. Closure 

One Option for the EIT would be to wind up its activities. This forms the ‘stop option’ and all 
activities of the EIT are assumed to cease. Any prolongation of the activities of the KICs would 
be dependent upon their ability to secure funds to replace those lost from the winding-up of the 
EIT.  It  is  considered  unlikely  that  the  three  KICs  would  be  able  to  continue  activities  as  the 
evaluation  of  the  EIT  found  that  they  were  not  yet  financially  self-sufficient.  Some  residual 
activity might be maintained and assumptions to this effect are built into the assessment exercise. 
No  other  existing  initiative  at  EU  level  can  support  the  long-term  integration  of  excellent 
research, education and innovation to address specific societal challenges. Moreover, the role to 
be played by the EIT in dissemination of good practices of innovation would remain unfulfilled. 

Option 2. Baseline 

Continuing with the existing 3 KICs would enable the EIT to consolidate its activities and focus 
upon  a  limited  number  of  priority  fields.  Under  this  baseline  scenario,  the  existing  pattern  of 
activity of EIT and the KICs is assumed to continue on a similar pattern and scale. The Option 
would not involve any expansion of funds to the EIT but would continue its existing budget. Any 
expansion  of  activity  by  the  KICs  would  be  as  a  result  of  their  ability  to  secure  additional 
funding.  

Activities  of  the  EIT  would  continue  at  the  present  (planned)  level.  This  includes  activities 
related to entrepreneurship and workshops bringing together KIC participants. Under this Option 
new KICs could only be established once an existing KIC had ceased to receive funding from the 
EIT.  This  would  maintain  a  constant  budget  and  retain  the  operation  of  three  EU-supported 
KICs. The EIT's and KICs imprint on European innovation will be limited due to lack of critical 
mass  to  make  a  noticeable  impact  (cf.  although  there  is  no  consensus  as  to  what  constitutes 
critical  mass,  most  respondents  believed  that  somewhere  between  6  and  10  KICs  would  be  an 
appropriate scale for the future) .  

Option 3. Progressive Growth and extended activities 

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Five  options  were  debated:  1)  the  Centralized  EIT  being  a  centrally  governed  institution  performing 
directly research, education and innovation activities and directly responsible for the KIC management ; 2) 
the  Distributed  EIT  where  the  EIT  is  a  funding  body  but  KIC  are  autonomous  and  perform  directly 
education, research and innovation activities; 3) the Integrated EIT which is a combination of Options 1) 
and  2)  and  where  the  EIT  Governing  Board  sets  the  overall  strategy,  selects,  evaluates  and  monitors  the 
KIC but KIC are autonomous to organise their activities; 4) the Funding-Labelling EIT where the EIT acts 
as  a  funding  body  and  awards  the  EIT  label  based  on  excellence;  5)  the  Status-quo  (a  ‘no  EIT’  option). 
Two  options  were  also  excluded  during  this  first  assessment  process,  namely;  a)  The  single  green  field 
institution  and  b)  The  network  of  organizations.  Policy  option  3  emerged  as  the  preferred  option.  The 
Impact  Assessment  exercise  states  that  “This  option  aims  at  finding  a  balance  between  option  1  and  2 
keeping the benefits of both while avoiding their drawbacks” (p.32). 

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Under  this  Option  a  number  of  new  KICs  would  be  launched  by  the  EIT,  and  thus  a  greater 
number of priority fields would be covered. The budget for each newly-launched KIC would be 
the approximately same as that currently applied to existing KICs. Based upon the analysis of the 
supporting study to this impact assessment regarding economies of scale and the EIT proposals 
for the future it is considered that the total number of KICs could eventually rise to up to 9 by 
2020.  This  will  enable  the  EIT  to  achieve  its  expected  impact  on  innovation,  research  and 
education and is based on the assumption that each KIC is composed between 5 to 6 centres of 
excellence (co-location centres), and that the very same centres may participate in more than one 
KIC,  hence  leading  up  to  approximately  a  critical  mass  of  50  centres  of  excellence  across  the 
EU.  A  further  expansion  beyond  the  9  KICs  may  compromise  the  principle  of  world-class 
excellence, which is a cornerstone of the EIT model.  

Current and planned activities of the EIT would continue and expand in order to consolidate the 
EIT as a learning organisation in its own right. This would include developing dissemination and 
outreach  strategies  as  well  as  the  ‘internationalisation’  agenda  of  the  EIT  regarding  its 
relationships  with  3rd  countries.  Furthermore,  this  option  implies  that  the  EIT  starts  additional 
activities  in  order  to  extend  the  benefits  gained  through  the  KICs  to  audiences  beyond  those 
directly involved in the KICs. The EIT would operate additional activities which would serve to 
link  firms,  research  institutes,  Higher  Education  Institutions  and  public  authorities  located  in 
areas where innovation capacity is weaker. The EIT would seek to promote the development of 
innovation capacity in these areas. This would not involve a dilution of the ‘excellence’ criteria 
applied to the selection of KICs but would constitute a deepening of the role of the EIT. 

6. 

Assessment of impacts 

The EIT is intended to boost the innovation capacity of the EU and Member States in order to 
increase the competitiveness of the EU economy and to develop innovations addressing societal 
challenges. The EIT has the potential to bring about strong diffusion and institutional effects by 
identifying  and  disseminating  best  practice  governance  and  funding  models  from  the  KICs, 
making  sure  that  knowledge  from  the  KICs  is  captured,  valorised  and  capitalised  across  the 
Union and beyond.  

6.1.  Most relevant economic, social and environmental impacts  

Economic  effects:  The  strongest  effects  are  found  around  research  and  innovation  activity  and 
the influence on investment flows. The distributed model adopted for the EIT encourages cross-
border  flows  and  contributes  to  the  development  of  a  single  European  area  for  education, 
research and innovation.  

Social  effects:  Welfare  benefits  accrue  owing  to  the  development  of  innovations  addressing 
societal  challenges.  The  Options  will  also  support  the  modernisation  of  Higher  Education 
stimulating additional social benefits. 

Environmental  effects:  They  are  -  at  worst  -  neutral,  at  best,  particular  fields  of  activity  may 
promote the development of innovations which provide positive environmental benefits.  

6.2. 

Qualitative assessment of significant impacts 

Innovation and research. Each Option will promote stronger levels of research and innovation, 
and  improve  the  efficiency  of  the  innovation  effort.  This  will  be  done  through  providing 

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investment  in  innovation  activity.  In  addition,  Option  3  will  provide  positive  benefits  also 
indirectly through supporting the generation and dissemination of better practices in innovation 
promotion and innovation governance. 

Education  systems.  Options  2  and  3  will  both  improve  the  quality  of  education  provision, 
particularly with regards to business involvement, and the provision of entrepreneurial education. 
Option 3 will also provide some positive impacts through raising awareness of good practice in 
those parts of the EU which are not directly participating in the EIT. 

Internal  market  and  competition.  There  is  a  potential  positive  impact  for  the  EIT,  through  the 
KICs,  on  the  movement  of  workers,  the  flow  of  capital  and  on  better  consumer  choices.  The 
impacts  will  be  stronger  under  Option  3  than  under  Option  2  owing  to  the  greater  scale  of 
activity under this Option. Option 1 will have some positive residual impact but this is unlikely 
to significantly affect market conditions. 

Competitiveness, trade and investment. The effect of the EIT, through the KICs, on productivity 
is likely to be positive under all Options. The scale of the impact will be greatest under Option 3 
and least significant under Option 1. Options 2 and 3 are also likely to deliver gains in the global 
competitiveness  of  firms  and  institutions  involved.  The  activity  of  the  EIT  will  also  provoke 
cross-border investment flows through the relocation of economic activity.  

Consumers and households. Options 2 and 3 are likely to have positive, albeit modest, impact on 
consumers and households by providing new goods and services.  

Specific sectors and regions. Owing to the multi- and cross-disciplinary approaches adopted in 
the KICs, many sectors will potentially engage with the EIT. The regional impacts of the EIT are 
likely  to  be  more  significant.  Regions  and  Member  States  which  are  the  site  for  co-location 
centres will have opportunities for positive benefits through economies of agglomeration and the 
reaping of positive externalities. This is only valid for Options 2 and 3. Moreover, Option 3, in 
seeking  to  extend  the  coverage  of  the  EIT  to  generate  new  models  of  innovation  governance 
across the EU has the potential to generate positive benefits in all EU regions.  

Third countries/international relations. Options 2 and 3 are considered to have the potential to 
affect investment flows between the EU and third countries through creating a more conducive 
environment  for  that  investment.  Both  Options  may  also  act  to  attract  flows  of  students  and 
researchers from 3rd countries.  

Macro-economic environment. All options will have a positive impact on economic growth. This 
will occur both through demand-side effects and positive improvements to the supply-side. The 
scale of the impact will be greatest under Option 3 and least significant under Option 1.  

Employment  and  labour  markets.  All  options  facilitate  new  job  creation  and  support 
entrepreneurship.  The  scale  of  the  impact  will  be  greatest  under  Option  3  and  least  significant 
under Option 1. Options 2 and 3 will also support the functioning of labour markets in the EU 
through  encouraging  the  temporary  mobility  of  labour  to  engage  in  knowledge  exchange 
activities.  

Environmental  impacts.  Options  2  and  3  will  have  positive  impacts  on  climate;  transport  and 
energy  use;  air  quality;  renewable  and  non-renewable  resources,  and  environmental 
consequences of firms and consumers.  

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6.3. 

Budgetary assumptions and assessment of cost effectiveness 

In  order  to  assess  the  impacts  of  the  various  options  assumptions  are  made  as  to  the  possible 
income and expenditure of the EIT and the KICs. Overall levels of impacts will vary depending 
upon the budgets available and the type of expenditure. The budget estimates are based on the 
KIC lifecycle4 and on the principle that a KIC will be financed on average for up to 25% of its 
global expenditure for the whole life-cycle (15 years). The assumptions are as follows:  

Option 1: No EU expenditure on EIT HQ or KICs. The own income and expenditure of KICs 
from 2014-2020 is assumed to be around one third of total KIC activity in 2013. Expenditure is 
thus strongest in early years and trending to zero by 2020. No income or expenditure by EIT HQ. 

Option  2:  EU  income  and  expenditure  by  3  KICs  2014-2020  to  total  €1,800m.  This  figure  is 
based on assumptions of the budget required to consolidate existing KICs and a budget for the 
EIT  for  outreach  and  dissemination,  cross-cutting  support  to  the  KICs  and  EIT  administrative 
expenditures. During the 2014-2020 period, the EIT contribution to the three KICs will cover the 
last years of their "development phase", and "achieving sustainability phase". KICs own resource 
expenditure to total some €4,000m. EIT HQ to have  income and expenditure in same period of 
some €55m.  

Option  3:  EU  income  and  expenditure  by  9  KICs  2014-2020  to  total  €2,800m.  This  figure  is 
based  on  assumptions  of  the  budget  required  to  consolidate  existing  KICs,  a  gradual 
development towards new KICs (three new KICs by 2015 and 2018 each) and a budget for the 
EIT  for  outreach  and  dissemination,  cross-cutting  support  to  the  KICs  and  EIT  administrative 
expenditures. The budget reflects the different stages of development of the 9 KICs. Expenditure 
will be strongest in later years as KICs profiled to come on stream in a staggered manner. KICs 
own resource  expenditure to total  some  €6,100m.  EIT  HQ  to  have  in come  and  expenditure  in  same 
period of some €100m. 

7. 

Comparing the options 

Based  on  the  assessment  of  impacts  (DG-internal  and  by  an  external  consultant),  conclusions 
have been made with regard to the strengths and weaknesses of the individual options and their 
ability  to  achieve  the  objectives  outlined  further  above.  The  different  options  have  also  been 
compared  with  regard  to  their  effectiveness,  efficiency  and  coherence.  Finally,  some  possible 
risks associated with the different options have been examined. The results are the following:  

Option  1  does  not  deliver  against  the  objectives  of  the  EIT  in  comparison  to  the  baseline.  Its 
main beneficial feature is that it involves no EU expenditure, whilst still reaping the benefits of 
past  investments  in  the  KICs.  These  benefits  will  decay  over  the  period  of  the  coming 

The KIC life cycle phases cover the following phases: 

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a)  a  "setting-up"  phase  of  2  years:  it  is  a  time  for  a  KIC  to  get  organised,  set  up  necessary  financial  and  legal 
structures as well as recruit crucial staff. The implementation of the real KIC activities will start notably on 
the second year of implementation. 

b) "development" phase of 3 years: it is assumed that the KIC has been already established and begun implementing 
its core activities, however still dynamically expanding in terms of the scope of activities and the number of 
partners. This would lead to a substantial increase of the KIC budgets. 

c)  "cruising  speed"  phase  of  6  years:  the  KIC  has  a  stable  structure  with  clearly  defined  scope  of  activities.  d) 
"achieving sustainability" phase of 4 years: the KIC activities are similar to cruising speed phase while the 
EIT contribution will gradually decrease requiring a KIC to assure other sources of revenues. 

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Multiannual  Financial  Framework.  Were  there  evidence  of  significant  government  failure  with 
respect to the EIT, such as deadweight, crowding-out of investment or misdirected investments 
then Option 1 would offer additional benefits. However, the external evaluation of the EIT did 
not find any evidence of such failures. 
The administrative costs of this option will decrease significantly as the activities of the EIT are 
assumed  to  cease.  The  costs  of  administrative  expenditure,  covering  necessary  staff, 
administrative,  infrastructure  and  operational  expenses  until  the  wind  up  of  the  EIT  activities 
will not exceed 1 % of the EIT Budget. 

Options 2 and 3 meet the objectives of the EIT most strongly. The impact of Option 3 is greater 
than that of Option 2 owing to its greater scale. The scale of Option 3 provides a further benefit 
in  that  it  is  less  affected  by  the  potential  weakness  of  privileging  existing  networks.  This 
weakness is relatively greater for Option 2. The cost-effectiveness of Option 2 is stronger than 
Option 1 because the EIT will maintain the scale of operation. Implementation costs will also be 
proportionately  reduced  as  they  will  be  spread  across  the  actual  number  of  KICs.  The 
administrative  costs  of  the  option  will  not  increase  significantly.  The  costs  of  administrative 
expenditure,  covering  necessary  staff,  administrative,  infrastructure  and  operational  expenses, 
will not exceed 2 % of the EIT Budget. 

Option  3  scores  positively  in  terms  of  raising  the  international  profile  of  the  EIT,  and,  most 
significantly, in sharing the knowledge generated within the EIT with external actors and agents. 
In particular, Option 3 offers a means to mitigate some of the territorial imbalances associated 
with Option 2. The cost-effectiveness of Option 3 is stronger than Option 2 because the EIT has 
reached  a  more  efficient  scale  of  operation.  Implementation  costs  will  also  be  proportionately 
reduced  as  they  will  be  spread  across  a  greater  number  of  KICs.  The  costs  of  administrative 
expenditure,  covering  necessary  staff,  administrative,  infrastructure  and  operational  expenses, 
will not exceed 2.16% of the EIT Budget. 

Option 3 has two weaknesses. Firstly, its very scale may begin to introduce market distortions. 
This will not be the case in Option 1 and is less likely under Option 2. Secondly, it strengthens 
existing  centres  of  excellence  and  risks  reinforcing  prevailing  disparities  in  relative  innovation 
performance  between  regions  of  the  EU.  However,  it  is  believed  that  the  EIT  will  be  able  to 
mitigate these effects by taking appropriate action. 

On the basis of the evidence available, Option 3 is the preferred option. 

8. 

Monitoring and evaluation 
The  EIT  evaluation5  made  a  number  of  strong  recommendations  regarding  the 
monitoring and evaluation of the EIT and the Commission is to follow up on these in its 
Evaluation  Action  Plan.  The  recommendations  stressed  the  importance  of  establishing 
robust monitoring procedures in association with the KICs, that the EIT should act as a 
challenging partner to the KICs, and that the EIT should adopt a culture of ‘openness’. 
The EIT should seek to develop a culture of continuous evaluation across the EIT. This 
should  seek  to  evaluate  the  innovative  practices  being  implemented  within  and  across 
the  KICs  and  to  identify  the  returns  being  achieved  from  investments  made.  The  EIT 
should  seek  to  work  with  the  KICs  to  continuously  improve  performance  and  should 

5 

http://ec.europa.eu/dgs/education_culture/evalreports/index_en.htm#educationHeader 

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seek to make available the lessons it has learnt to help improve performance elsewhere 
in the EU.  

In  response  to  its  responsibility,  the  Commission  is  fully  committed  to  support  the  EIT  in 
establishing  a  sound  and  solid  results-oriented  monitoring  system  while  fully  respecting  the 
contractual  relations  between  the  EIT  and  the  KICs.  In  doing  so,  it  is  important  to  design  and 
implement  the  monitoring  system  around  with  EIT  with  view  of  at  least  four  key  determining 
factors: 

• 

• 

• 

• 

The  European  policy  level:  The  need  for  an  interface  between  the  EIT  and  the 
overarching Horizon 2020 monitoring system and the Innovation Union monitoring.  

The  EIT-Institute  level:  A  set  of  indicators  measuring  the  progress  of  the  EIT  own 
processes and activities such as dissemination, outreach, human resources development. 
The  indicators  should  correspond  to  the  objectives  of  an  efficient  and  effective 
institution.  

The cross-KIC-level: A common set of SMART indicators applicable across all KICs, 
for  example  via  a  further  development  of  the  EIT  Scoreboard  to  be  managed  and 
applied by the EIT. The SMART indicators should correspond to the objectives of the 
EIT. 

The  individual  KIC  level:  KIC  have  different  business  models  and  markets  and  thus 
different industrial KPIs. The KIC own KPIs shall be taken into account by the EIT in 
measuring the progress achieved against the objectives set in the annual Business Plans. 
The KIC own KPI should correspond to the objectives of the KIC. 

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