COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document PROPOSAL FOR A DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the participation of the Union in a Research and Development Programme jointly undertaken by several Member States aimed at supporting research performing small and medium-sized enterprises
Date: 2013-07-10
Institutions: European Commission
Subjects: EU programme, European cooperation, competitiveness, research and development, small and medium-sized enterprises













EUR-Lex - 52013SC0243 - EN











|



52013SC0243

COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document PROPOSAL FOR A DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the participation of the Union in a Research and Development Programme jointly undertaken by several Member States aimed at supporting research performing small and medium-sized enterprises /* SWD/2013/0243 final */









COMMISSION STAFF WORKING DOCUMENT
EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT
Accompanying the document
PROPOSAL FOR A DECISION OF THE
EUROPEAN PARLIAMENT AND OF THE COUNCIL
on the participation of the Union in a Research and Development Programme jointly undertaken by several Member States
aimed at supporting research performing small and medium-sized enterprises
This Executive summary contains the main
findings and conclusions of the Impact Assessment report accompanying the
Commission Proposal for a Parliament and Council decision on the Eurostars-2
Joint Programme (hereinafter ‘Eurostars’) for the period 2014-20.
Eurostars was established in 2008 involving
all EU Member States and six associated countries. The programme supports research
performing SMEs involved in transnational collaborative R&D projects. The
EU participates in the programme under Article 185 TFEU (formerly Article 169
EC), with an overall contribution of EUR 100 million, against EUR 300
million from the participating countries. The programme is built on Eureka[1], and the Eureka secretariat is
the dedicated implementation structure.
In June 2012, the Eureka Ministerial
Conference, where all current Eurostars countries are represented, endorsed an
official declaration (the Budapest document) affirming their commitment to support
a strengthened version of the current Eurostars programme for the period
2014-20. The Union’s participation in Eurostars is considered fundamental for
the success of the programme and the EU is invited to join the programme.
The current Eurostars-2 budget projections for
contributions from Eurostars participating countries, is estimated at EUR 861
million. The projections at the time of preparing this Impact Assessment are
based on commitments received by the Eurostars representatives of 21 countries
(representing 88% of the budget), and estimation for 12 other countries. 
1.           Problem definition
1.1.        European SMEs — problem definition and the need for intervention at EU
level
Economic growth and
job creation in Europe
crucially depend on the growth of innovative firms. It is essential to foster economic growth and job creation in the EU so that
more European SMEs turn into growing innovative firms.
However, in Europe there is still
considerable fragmentation and compartmentalisation of national research and
innovation. Increasing technological complexity requires greater access to
expertise which is not readily available inside national borders. Transnational
R&D collaboration has a key role to play to give SMEs greater access to
markets beyond their national borders. There is thus a clear case for EU
intervention.
The EU’s right to act in this area is set
out in Article 185 TFEU. The value of public-public partnerships in contributing
to the achievement of the European Research Area (ERA) is recognised, as they
help align and synchronise national programmes. The Horizon 2020 Communication
also states that: ‘Partnership approaches on the basis
of Articles 185 and 187 of the Treaty will also be continued’.
1.2.        Lessons learned from the
current Eurostars programme
An interim evaluation was conducted in
2010. It concluded that: ‘Eurostars is a good programme, which meets its
objectives and adds value to European R&D performing SMEs.’ A number of
recommendations were also made to be implemented both in the short and
long-term to improve the programme and its impact. The European Commission sent
the results of the evaluation to the European Parliament and the Council in
April 2011.
According to the latest data available the
Eurostars Programme appears to be an attractive programme for
R&D-performing SMEs and to generate considerable positive economic effects
for the participating undertakings in terms of additional turnover, jobs
created and new products, processes or services on the market.
1.3.        Eurostars-2 in the context
of research for SMEs and the European Research Area
Since Eurostars was established in 2008,
political support for schemes in favour of research performing SMEs and for
instruments contributing to the ERA, has been growing.
The Innovation Union Communication (2011)
highlights the importance of SMEs in creating economic growth and jobs,
explicitly mentioning that further use should be made of partnerships with Member State agencies, building on the experience of the Eurostars initiative. In its Horizon 2020 proposal, the Commission therefore included
support for a programme dedicated to research performing SMEs, implemented by
an Article 185 TFEU initiative, building on Eurostars and refocusing it along
the lines stated in the interim evaluation.
Together with other complementary
initiatives, the Eurostars programme will form part of the Horizon 2020
integrated strategy to support SMEs. Complementarity between the other Horizon
2020 initiatives means that they will all aim to reach the same overall
objective, but each has its own specific features and target groups. 
Research performing SMEs participating in
R&D driven projects can continue to participate in the more traditional
collaborative projects under Horizon 2020, which is based on the intervention
logic of societal challenges and/or specific focus areas.
SMEs participating in market opportunity
driven projects and displaying high levels of technology readiness and at the
last stage of innovation activities, can receive support from the new SME
Instrument and, if in need of equity and loans to scale up their project
results for commercial exploitation, from the financial instruments. 
Eurostars-2, by specifically targeting the
transnational collaboration of research performing SMEs in any field, is
strategically positioned between the above mentioned measures. 
The
strategic positioning of these different instruments can be illustrated as
follows:
Eurostars-2, in addition and differently
from the other measures, contributes to the integration and harmonisation of
national programmes.
2.           Analysis of Subsidiarity
The follow-up Eurostars programme will
require a new co-decision by the European Parliament and the Council according under
Article 185 TFEU.
The programme will respect the
proportionality principle as the Member States will be responsible for
implementation and for all operational aspects. The EU’s role is limited to
providing incentives for improved coordination of participating programmes and
harmonisation of rules and regulations to benefit SMEs interested in transnational
R&D activities, and to ensuring synergy with other complementary programmes
under Horizon 2020.
3.           Objectives
The general objective of the initiative is to stimulate economic growth and job creation by boosting the
competitiveness of research performing SMEs through transnational R&D
collaboration.
To achieve this general objective, two specific
objectives have been set.
·                        
To promote transnational research for research
performing SMEs in any field, leading to the introduction of new or improved
products, processes or services in the market by the participating SMEs.
·                        
To contribute to the completion of the ERA and
increase the accessibility, efficiency and efficacy of public funding for research
performing SMEs in Europe by aligning, harmonising and synchronising the
national funding mechanisms.
To reach the specific objectives above, five
operational objectives have been identified (not mentioned here).
Below is a summary of the problems, general
objective, specific objectives and operational objectives for Eurostars-2.
4.           Policy
options
The following three options have been assessed
in detail:
Option 1 — The business as usual (BAU) option, i.e. continuing the current Eurostars Joint Programme over the next programming
period (2014-20) in its current format, implementation modalities and overall
budget.
Option 2 — The zero option (Zero), i.e. no EU involvement in Eurostars 2.
Option 3 — The reinforced partnership
option.
Option 3 means that the current Eurostars
Joint Programme would be continued in the next programming period as an Article
185 initiative in an improved format based on full implementation of the
recommendations made in the interim evaluation, greater integration and an
extended scale.
Strongly encouraged by the Commission
services, Eureka Member States have started to make improvements to shorten the
time to contract, align their rules and processes more, make their administration
leaner and increase synchronisation and integration. To extend the programme
and support more research intensive SMEs with growth potential, Member States
envisage increasing substantially the funding of the programme. Consequently,
and in order to incentivise and support these improvements, the EU should
increase its financial contribution accordingly.
5.           Analysing
the impacts
5.1.        Impact on administrative burden and simplification
potential
In principle, there is potential for
simplification in all three options. However, alignment, harmonisation, and
changing the administrative procedures come at an initial cost. National
programmes need to analyse their systems and change them where necessary. Current
rules, regulations and guidelines need to be changed. The benefit for SMEs is
immediately obvious, but the benefit for the administrations comes only
gradually over time. The likelihood and intensity of change increase with the
increase of perceived incentives. In that sense it can be estimated that the
decrease in administrative burden and the potential for simplification to the
benefit of SMEs increases from Zero to BAU and is the greatest in the Reinforced
partnership option.
5.2.        Critical
mass
Although the BAU option would have the same
impact in terms of critical mass, its current scope and scale is insufficient.
Eureka Member States have already started to increase their financial
contribution under the current programme, but incentives for national
programmes to make further efficiency and effectiveness gains are lacking due
to the Commission being unable to match those additional funds. 
The Zero option is less likely to achieve a
critical mass, but more importantly, the EU would not be able to sufficiently
contribute to increase efficiency and effectiveness, as outlined above.
The Reinforced partnership option would
contribute considerably more than BAU to achieve the critical mass needed for
the programme to achieve the intended impacts. It would also do more to encourage
success rates for potential beneficiaries.
5.3.        Leverage effect
5.3.1.     The BAU option
If Eureka participating countries provided
the same annual budget for the period 2014-20 as they did in 2008-13, around EUR 300
million national funds would be pooled, giving a total budget of public funding
of EUR 400 million for the seven-year period 2014-20. The EU’s
contribution would amount to 25 % of the total public funds, as in the
original Eurostars 1 budget. 
Under the BAU option, some 1 560 new
products or improved products, processes or services would be on the market
(three years after the end of each project). This is a rough estimate as there
is not a direct link between the level of funding and results/impact of the
project.
5.3.2.     The
Zero option
The impact on overall R&D investments
would be lower than in the BAU option. Consequently, the potential impact in
terms of economic growth, jobs and competitiveness would be modest, or possibly
even non-existent.
5.3.3.     The Reinforced Partnership
option
As of mid-January 2013, Eureka Member
States estimated their budget provisions for the period 2014-20 at EUR 861
million. If the Commission maintains its current contribution of 25 % of
the overall public funding, the EU contribution would be EUR 287 million[2], leading to a total public
funding for Eurostars 2 for 2014-2020 of EUR 1.147 billion.
The overall public funding invested in the Eurostars
projects is expected to leverage private funding of some EUR 1.4 billion.
Total funding (public and private) would be more than EUR 2.5 billion.
The impacts of the Reinforced partnership
option, as compared to the BAU option, would be higher in two aspects:
·                        
Impacts in terms of increased investment in
R&D and in the number of new jobs and growth created in the participating
SMEs.
·                        
Impacts in terms of pooling Eurostars
participating countries’ funds, scientific, financial and management integration
and synchronisation of national funding and thus their contribution to the ERA.

For indicative purposes, if there is the
same link between funding and impact currently experienced in Eurostars 1, the
turnover in participating SMEs could be expected to increase by some EUR 12
billion and around 30 000 new jobs (EUR 10 million of increased
turnover and 25 new jobs for each EUR 1 million of public funding, three
years after the end of each project). For both turnover and jobs, that is
almost three times higher than under the BAU option. Furthermore, some 4 500
new or improved products, processes or services could be on the market (three
years after the end of each project).
5.4.        Innovation impact
All three
options have an impact on innovation. A larger dedicated programme as described
in option 3 would lead to more innovations and would have a greater economic
impact, in particular with respect to the competitiveness of European SMEs.
5.5.        Economic impact
Option 3 would generate substantial
benefits for the European economy, such as strengthening the European industry on
the global market, creating new jobs and helping to boost European GDP. In
particular, technologies developed in the framework of the Eurostars programme would
help the European industry to maintain its competitiveness.
5.6.        Social impact
Social impacts mainly relate to employment
and labour markets, in terms of the creation of high-skilled jobs, and making
the public administration more efficient, in particular cutting the
administrative burden for SMEs. In addition, the knowledge and innovative
solutions that result from Eurostars projects are clearly helping to increase
socioeconomic welfare. Again, option 3 is likely to generate the greatest impact.
6.           Comparing
the options
6.1.        Comparison of the options
   Option Criteria || Business as Usual (Option 1) Baseline || Zero Option   (Option 2) || Reinforced Partnership (Option 3)   
 Effectiveness ||   ||   ||   
 Critical mass || = || -/= || + 
 Impact on SMEs || = || -/= || + 
 Leverage effect || = || -/= || + 
 Innovation impact || = || -/= || + 
 Economic impact || = || -/= || + 
 Social impact || = || =/- || + 
 Lesser administrative burden for SMEs || = || -/= || + 
 Best practice and mutual learning of national programmes || = || =/- || + 
 - || = || + 
 Disadvantage compared to reference || Same impact as reference || Benefit compared to reference 
6.2.        Preferred option
Based on this assessment, the Reinforced partnership
option provides the best means to achieve the defined objectives. In addition,
it would generate very positive synergy with other SME-related programmes under
Horizon 2020 and could build on the achievements and experience gained in
Eurostars 1.
Option 3 would generate a higher level of
integration and harmonisation of national programmes with a clear added benefit
in cutting administrative burden for SMEs, due to the sharing of best practices
and mutual learning. These would be explicit aspects embedded in the programme.
It would help to overcome the market
failures SMEs face when they seek to innovate and enter or develop new markets.
It would help to move pre-competitive
research closer to market by accelerating the market introduction of new
technologies. Furthermore, the current economic and financial situation makes
investment in technology even more necessary for growth and competitiveness.
This was the preferred option according to
the results of the stakeholder consultations.
The current estimate is that Eureka Member
States’ contribution to Eurostars 2 would amount to EUR 861 million. The
driving force behind this financial commitment, in particular in the current
period of scarce public funds and cuts to various Member States’ R&D
spending, is unsurprisingly triggered by the expectation of a similarly ambitious
intervention by the EU.
7.           Monitoring
and evaluation
The impact of Eurostars as a programme should be monitored by
assessing the increase in total turnover for participating organisations three
years after the end of the programme. Other output indicators concern job
creation, market introduction of new products, processes and services and
knowledge generation. Since these mainly focus on the impact after the end of
the projects (usually three years after), these indicators will be collected
systematically from the outset.
An interim evaluation of Eurostars-2 will
be carried out by independent experts three years after the start of the programme.
The evaluation will cover the criteria identified in the proposal for Horizon
2020 for assessing potential initiatives under Article 185. The Commission must
send the conclusions of the evaluation, and its own observations, to the European
Parliament and the Council.
An independent ex-post evaluation will be
carried out at the end of the EU’s participation in the programme, and no later
than 2023, reviewing the performance, quality and impact of the Eurostars
programme and of Eurostars projects. 
[1]               Eureka is a European Intergovernmental network, established by a
Conference of Ministers of 17 countries and Members of the Commission of the
European Communities in 1985, with the aims to supporting industrial research collaboration. It currently
counts 40 member countries and supports also Individual projects, Clusters and
Umbrella besides Eurostars. 
[2]               Since the final budget from Eurostars
countries is not yet definitive, the EU contribution is indicated with
reference to the information provided by Eurostars countries in January 2013.