COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT Accompanying the document Proposal for a Regulation of the European Parliament and of the Council on the European Institute of Innovation and Technology (recast) and Proposal for a Decision of the European Parliament and of the Council on the Strategic Innovation Agenda of the European Institute of Innovation and Technology (EIT) 2021-2027: Boosting the Innovation Talent and Capacity of Europe
Date: 2019-07-11
Institutions: Directorate-General for Education, Youth, Sport and Culture, European Commission
Subjects: European Institute of Innovation and Technology, higher education, innovation, operation of the Institutions, research and development

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 11.7.2019  SWD(2019) 330 final  COMMISSION STAFF WORKING DOCUMENT  IMPACT ASSESSMENT  Accompanying the document Proposal for a Regulation of the European Parliament and of the Council on the European Institute of Innovation and Technology (recast)  and Proposal for a Decision of the European Parliament and of the Council on the Strategic Innovation Agenda of the European Institute of Innovation and Technology (EIT) 2021-2027: Boosting the Innovation Talent and Capacity of Europe   {COM(2019) 330 final} - {COM(2019) 331 final} - {SEC(2019) 275 final} - {SWD(2019) 331 final}  
 
 
TABLE OF CONTENTS 

1. 

INTRODUCTION: POLICY AND LEGAL CONTEXT ............................................................... 5 
Scope of the impact assessment ................................................................................. 5 
Legal and operational context of the EIT and the KICs ............................................. 5 
The EIT as part of the Horizon Europe Programme .................................................. 8 

1.1. 
1.2. 
1.3. 
1.4.  What decisions on the future of the EIT have already been taken in the Horizon 

1.5. 

Europe proposal and what are their implications? ..................................................... 9 
The need to act ......................................................................................................... 10 
1.5.1.  The need to amend the EIT Regulation ................................................................ 10 
1.5.2.  The need for a new Strategic Innovation Agenda of the EIT ............................... 10 
1.5.3.  Lessons learned .................................................................................................... 11 

2.  PROBLEM DEFINITION ..................................................................................................... 13 
Suboptimal funding model ....................................................................................... 13 
Limited impact of EIT’s education activities ........................................................... 15 
Limited impact of EIT’s regional outreach .............................................................. 17 
Technical issues ........................................................................................................ 18 
Summary of problems and technical issues to be addressed: ................................... 21 

2.1. 
2.2. 
2.3. 
2.4. 
2.5. 

3.  WHY SHOULD THE EU ACT? ............................................................................................ 22 
Legal basis ................................................................................................................ 22 
Subsidiarity and proportionality: need for, and added value of EU action .............. 22 

3.1. 
3.2. 

4.  OBJECTIVES: WHAT IS TO BE ACHIEVED? ...................................................................... 23 

5.  HOW OPTIONS ADDRESS PROBLEMS AND TECHNICAL ISSUES ......................................... 24 
5.1.  Discussion of technical issues .................................................................................. 24 
5.2.  Discussion of priority fields ..................................................................................... 26 
5.3.  Discussion of funding model .................................................................................... 28 
5.3.1.  Continuation of current funding model (discarded) ............................................ 29 
5.3.2.  Introduction of a 50/50 co-funding rate (discarded) ........................................... 29 
5.3.3.  Introduction of a gradually decreasing EIT co-funding rate (retained) .............. 30 
5.4.  Description of policy options ................................................................................... 35 
5.4.1.  Option 1: Baseline ................................................................................................ 35 
5.4.2.  Option 2 ................................................................................................................ 36 
5.4.3.  Option 3 ................................................................................................................ 39 
5.4.4.  Inputs of options ................................................................................................... 41 
5.4.5.  Key features of options ......................................................................................... 41 

6. 

IMPACT OF POLICY OPTIONS ........................................................................................... 42 
6.1.  Option 1: Baseline .................................................................................................... 42 
6.2.  Option 2 .................................................................................................................... 44 
6.3.  Option 3 .................................................................................................................... 47 
6.4.  Outputs of options .................................................................................................... 51 

7.  HOW DO THE OPTIONS COMPARE? .................................................................................. 52 
7.1.  Risks associated with policy options ........................................................................ 54 

8.  PREFERRED OPTION ......................................................................................................... 56 
Implications of the preferred Option for the EIT Regulation and the SIA............... 57 

8.1. 

9.  HOW WILL IMPACT BE MONITORED AND EVALUATED? .................................................. 58 

 
 
 
 
Glossary 

Term or acronym 

Meaning or definition 

CLC 

DG EAC 

Co-Location  Centre,  a geographical  hub  for 
practical integration of the knowledge triangle 

the 

Directorate-General  Education,  Youth,  Sport  and 
Culture,  a  Directorate  General  of  the  European 
Commission 

DG GROW 

Directorate-General 
Entrepreneurship and SMEs 

Internal  Market, 

Industry, 

DG RTD 

Directorate-General Research and Innovation 

ECA 

EFSI 

EIC 

RIS 

EIT 

ERASMUS+ 

ERDF 

ESIF 

EU 

ExCo 

GB 

European Court of Auditors 

European Fund for Strategic Investments 

European Innovation Council 

EIT Regional Innovation Scheme 

European Institute of Innovation and Technology 

The  EU  programme  supporting  education,  training, 
youth  and  sport  in  Europe  during  the  2014-2020 
period 

European Regional Development Fund 

European Structural and Investment Fund 

European Union 

Executive Committee of the EIT Governing Board 

Governing Board of the EIT 

Horizon 2020 

Horizon  2020  –  the  EU’s  framework  programme  for 
research and innovation 2014-2020 

HEI 

Higher Education Institution 

2 

 
 
 
HEInnovate 

Joint  initiative  of  the  European  Commission  and  the 
OECD  supporting  HEIs  wishing  to  increase  their 
innovative and entrepreneurial potential  

HLG 

JRC 

KAVA 

KCA 

KIC 

KPI 

KTI 

MFF 

OECD 

OPC 

R&I 

R&D 

SIA 

SME 

SPD 

SWD 

TFEU 

TRL 

High Level Group 

Joint  Research  Centre,  a  Directorate  General  of  the 
European Commission 

KIC Added Value Activities 

KIC Complementary Activities 

Knowledge and Innovation Community 

Key Performance Indicator 

Knowledge  Triangle  Integration  -  close,  effective 
links between education, research, and innovation 

Multiannual Financial Framework 

Organisation 
Development 

for  Economic  Co-operation 

and 

Open Public Consultation 

Research and Innovation  

Research and Development 

Strategic Innovation Agenda 

Small and Medium-sized Enterprise 

Single Programming Document 

Staff Working Document 

Treaty on the Functioning of the European Union 

Technology Readiness Level - a method of estimating 
the maturity of technology  

3 

 
 
 
 
 
1. 

INTRODUCTION: POLICY AND LEGAL CONTEXT 

1.1.  Scope of the impact assessment 

This  impact  assessment  accompanies  the  Commission  proposals  for  an  amendment  of  the 
European Institute of Innovation and Technology (EIT) Regulation1 through a recast2 and for 
a  new  Strategic  Innovation  Agenda  (SIA)  for  the  EIT  for  the  period  2021-2027.  These 
initiatives  aim  to  align  the  EIT  legislative  framework  with  the  Commission  proposal 
establishing  the  Horizon  Europe  Programme3,  the  next  Union  framework  programme 
supporting research and innovation, to define the new priority fields of the EIT  as well as its 
financial  needs,  and  to  improve  the  functioning  of  the  EIT  taking  into  account  the  lessons 
learned from the past years.   

The  Impact  Assessment  accompanying  the  proposal  for  Horizon  Europe4  provided  a  clear, 
evidence-based blueprint for how the programme will help to consolidate European leadership 
in research and innovation to deliver scientific, economic and societal impact. It described the 
key objectives and rationale of the programme including a stronger focus on the added value 
of its parts.  

The Horizon Europe proposal confirmed the importance and contribution of the EIT and its 
Knowledge and Innovation Communities (KICs) in delivering the EU's strategic priorities in 
the area of innovation. It proposes the EIT budget for 2021-2027, its scope, added-value and 
main  areas  of  activity,  while  pointing  to  a  revised  role  of  the  EIT  in  order  to  reinforce  its 
contribution  to  Horizon  Europe’s  objectives.  However,  the  Horizon  Europe  proposal  itself 
does  not  provide  the  legal  basis  for  continuing  EIT  operations  beyond  2020,  which  would 
continue to be laid down in the EIT Regulation.     

This impact assessment does not cover the decisions already taken concerning the EIT in the 
Horizon  Europe  proposal  (see  section  1.3  and  1.4),  since these  were  assessed  as  part  of  the 
Horizon Europe impact assessment. Instead, this impact assessment focusses on key problems 
and  issues  that  have  been  identified  as  hampering  the  effectiveness  of  the  EIT  based  on 
lessons learned from the EIT interim evaluation and other key sources of evidence.  

1.2.  Legal and operational context of the EIT and the KICs 

The European Institute of Innovation and Technology  

The  EIT’s  overall  mission  is  to  boost  sustainable  European  economic  growth  and 
competitiveness by reinforcing the innovation capacity of the Member States and the Union. 
Set up in 2008, and part of Horizon 2020 since 2014, the EIT seeks to integrate the knowledge 
triangle  of  higher  education,  research  and  innovation,  reinforce  the  Union's  innovation 
capacity, and address societal challenges. The EIT achieves these goals primarily through its 
Knowledge  and  Innovation  Communities  (KICs):  large-scale  European  partnerships  (with 

1  Regulation  (EC)  No  294/2008  of  the  European  Parliament  and  of  the  Council  of  11  March  2008  establishing  the  European  Institute  of 
Innovation and Technology (OJ L 97, 9.4.2008, p. 1). Amended by Regulation (EU) No 1292/2013 of the European Parliament and of the 
Council of 11 December 2013 (OJ L 347, 11.12.2013, p. 174). 
2 Interinstitutional Agreement of 28 November 2001 on a more structured use of the recasting technique for legal acts. OJ C 77, 28.3.2002, 
p. 1. 
3 Proposal for a Regulation of the European Parliament and of the Council establishing Horizon Europe  – the Framework Programme for 
Research and Innovation, laying down its rules for participation and dissemination. COM(2018) 435 final.  
4 SWD(2018) 307 final. 

4 

 
 
 
 
 
 
 
 
 
                                                            
~50-400  partners)  focussing  on  global  societal  challenges.  The  EIT  provides  grants  to  the 
KICs, monitors their activities, supports cross-KIC collaboration and disseminates results and 
good  practice.  The  EIT's  Governing  Board  is  responsible  for  the  strategic  orientation  of  the 
EIT and of the KICs and takes the decisions on the designation of the KICs and their funding. 

The Horizon Europe Impact Assessment highlighted the role of the EIT in addressing specific 
structural  weaknesses  in  the  EU’s  innovation  capacity  which  are  common  to  EU  Member 
States. They include: the under-utilisation of existing research strengths to create economic or 
social value; the lack of research results brought to the market; low levels of entrepreneurial 
activity and mind-set; low leverage of private investment in research and development; and an 
excessive  number  of  barriers  to  collaboration  within  the  knowledge  triangle  of  higher 
education,  research,  business  and  entrepreneurship  on  a  European  level.  The  EIT  addresses 
these challenges through the KICs. 

The  EIT's  objectives,  rationale,  EU  added  value,  budget,  broad  lines  of  activity  and 
performance  indicators  are  currently  defined  in  the  Horizon  2020  Regulation5.  The  EIT 
Regulation sets out, in parallel, the mission and tasks for the EIT along with the framework 
for its functioning. The strategic, long-term priority fields and financial needs of the EIT for 
each seven-year period are laid down in the Strategic Innovation Agenda (SIA) of the EIT6. 
The  SIA  includes  the  detailed  operating  modalities  of  the  EIT  such  as  the  selection  and 
designation of the KICs and their performance monitoring, based on the framework set out in 
the  EIT  Regulation.  The  graph  below  illustrates  the  key  aspects  of  the  current  regulatory 
environment. 

•General and specific objectives of the EIT 
•Broad lines of activity 
•Budget 
•Performance indicators 

Horizon 2020 

•Mission and tasks of the EIT 
•Framework for its functioning 

EIT 
Regulation 

•Strategic direction 
•Activities and implementing provisions 
•Priority fields of the EIT 
•Financial needs 

SIA 

Figure 1: Current regulatory context of EIT, own illustration 

5  Regulation  (EU)  No 1291/2013  of  the  European  Parliament  and  of  the  Council  of  11 December  2013  establishing  Horizon  2020  -  the 
Framework Programme for Research and Innovation (2014-2020). OJ L 347, 20.12.2013, p. 104. 
6 Decision No 1312/2013/EU of the European Parliament and of the Council of  11 December 2013 on the Strategic Innovation Agenda of 
the European Institute of Innovation and Technology (EIT): the contribution of the EIT to a more innovative Europe. OJ L 347, 20.12.2013, 
p. 892. 

5 

 
 
 
 
 
 
 
 
 
                                                            
Knowledge and Innovation Communities  

The KICs are autonomous partnerships of businesses, research institutes and higher education 
institutions  (HEIs).  The  KICs  are  set  up  as  legal  entities  under  respective  Member  States’ 
laws, appoint a Chief Executive Officer to run their operations and have their own governance 
systems.  The  relations  between  the  EIT  and  KICs  are  laid  down  in  contractual  agreements, 
which set out their respective rights and obligations, ensure an adequate level of coordination 
and outline the mechanism for  monitoring and evaluating KIC activities and outcomes.  The 
KICs report on their activities on a yearly basis to the EIT. Specifically, the KICs submit their 
annual Business Plans to the EIT as the basis for the award of the EIT grant. 

Since 2010, eight KICs have been set up or designated to address specific societal challenges. 
According  to  the  EIT  Regulation  (Article  7b)  and  the  financial  sustainability  principles 
adopted by the EIT Governing Board7, the duration of EIT grant for each KIC is expected to 
last a maximum of 15 years after which the KIC should be able to pursue its activities without 
EIT funding. The areas of intervention of the current KICs are indicated below, together with 
their missions.  

Figure 2: Overview of current KICs, their missions and number of partners; own illustration  

7https://eit.europa.eu/sites/default/files/EIT%20GB%20Decision%20on%20principles%20on%20KIC%20Financial%20Substainability.pdf 

6 

 
 
 
 
 
 
 
 
                                                            
Each  KIC  aims  at  reinforcing  innovation  capacities  by  running  a  balanced  portfolio  of 
activities in three areas:  

1.  Innovation  support  projects:  aimed  at  supporting  and  developing  new  innovative 
products, services and solutions that address societal challenges in the KICs areas of 
activity. They may include the support to demonstrators, pilots or proofs of concept.   

2.  Education: these include innovative educational and training programmes offered by 
each  KIC  in  the  form  of  post-graduate  (MSc/PhD)  programmes,  executive/ 
professional  development  courses,  lifelong  learning  modules,  summer  schools,  etc. 
The  EIT  Label  ensures  quality  of  the  KIC  education  programmes  and  recognition 
within and beyond the EIT Community.   

3.  Business  creation  and  support  activities:  these  include  start-up  and  accelerator 
schemes  to  help  entrepreneurs  and  potential  entrepreneurs  translate  their  ideas  into 
successful business. The focus is primarily on access to market, access to finance, and 
access to networks, mentoring & coaching.   

KICs also engage in a range of outreach, communication, dissemination and horizontal cross-
sectoral  activities.  Since  2014,  the EIT  has  developed  the EIT  Regional  Innovation  Scheme 
(RIS)  as  part  of  its  outreach  strategy  in  regions  in  Europe  that  are  modest  or  moderate 
innovators according to the European Innovation Scoreboard8.  

1.3.  The EIT as part of the Horizon Europe Programme 

The  Horizon  Europe  impact  assessment  emphasises  that  the  EIT  should  be  more  strongly 
integrated  within  Horizon  Europe  than  is  currently  the  case  in  Horizon  2020  and  greater 
synergies  with  other  components  of  the  programme  should  be  created.  Within  the 
Commission’s proposal for Horizon Europe the EIT activities thus become part of the Pillar 
III  “Open  Innovation”,  which  focuses  primarily  on  supporting  breakthrough  and  market-
creating innovation. The EIT and the KICs are also expected to play a key role in addressing 
global challenges and European industrial competitiveness  - and achieving the objectives of 
future  R&I  missions  -  (Pillar  II  “Global  Challenges  and  Industrial  Competitiveness”)  while 
also contributing to excellent science  (Pillar I).9  

A  novelty  of  the  Horizon  Europe  proposal  is  the  introduction  of  multiannual  Strategic 
Planning10  for  ensuring  the  implementation  of  the  programme-level  objectives    in  an 
integrated manner based on wide consultations about priorities and the suitable types of action 
and  forms  of  implementation,  in  particular  European  research  and  innovation  partnerships. 
These  European  Partnerships  are  initiatives  where  the  Union,  together  with  private  and/or 
public partners (such as industry, public bodies or foundations) commit to support jointly the 
development  and  implementation  of  a  programme  of  research  and  innovation  activities. 
Horizon Europe promotes a more strategic, ambitious and impact-oriented approach to these 
partnerships,  ensuring  that  they  can  effectively  contribute  to  the  Union’s  policies  and 
priorities11.  

8 http://ec.europa.eu/growth/industry/innovation/facts-figures/scoreboards_en 
9 e.g. it is expected that the EIT will contribute to the climate-related expenditure target which should exceed 35 % of the overall Horizon 
2020 budget 
10 Annex I, COM(2018) 436 final, pp. 1-2. 
11  European  Partnerships  will  be designed  on  the basis of key  principles  of  Union  added  value, transparency,  openness,  impact,  leverage 
effect,  long-term  commitment  of  involved  parties,  flexibility,  coherence  and  complementarity  with  Union,  national  and  international 
initiatives. The criteria for the selection, implementation, monitoring, evaluation and phasing out of Union funding for European partnerships 
are set out in Annex III of the proposed Regulation for Horizon Europe. 

7 

 
 
 
 
 
                                                            
Under  the  Horizon  Europe  proposal,  the  EIT  KICs  are  considered  as  institutionalised 
European Partnerships. The alignment with the Horizon Europe framework will be supported  
through  the  multiannual  Strategic  Planning,  which  will  in  particular  incorporate inter-
disciplinary  and  cross-sectoral  perspectives  and  ensure  that  all  activities  under  Horizon 
Europe  are  coordinated  in  an  effective  manner.  In  particular,  the  Horizon  Europe  proposal 
emphasises that “proposals for future EIT KICs in compliance with the EIT Regulation will 
be  indicated  in  the  EIT  Strategic  Innovation  Agenda  (SIA)  and  will  take  into  account  the 
outcome  of  the  Strategic  Planning  process  and  the  priorities  of  the  Global  Challenges  and 
Industrial Competitiveness pillar”12. 

To deliver  on Horizon Europe  objectives close  cooperation with,  in  particular the European 
Innovation Council (EIC), will also be important to ensure synergies and impact. The EIT and 
the  EIC  are  complementary.  The  EIC  will  identify,  develop  and  deploy  breakthrough 
innovations, and support the rapid scale-up of innovative firms carrying out market-creating 
innovations at the European and international levels. On the other hand, the EIT will develop 
innovation  capacity  through  knowledge  triangle  integration  and  support  to  innovation 
ecosystems. It will contribute to Horizon Europe with its distinctive focus on human capital, 
entrepreneurial  education  and  support  to  business  creation  and  development  in  specific 
thematic areas. 

1.4.  What  decisions  on  the  future  of  the  EIT  have  already  been  taken  in  the 

Horizon Europe proposal and what are their implications? 

A number of policy choices relating to the future of the EIT have already been made by the 
Commission through the adoption of the Horizon Europe proposal. Specifically, the Horizon 
Europe proposal sets out the budget for the EIT (EUR 3 billion for the period 2021-202713), 
its rationale, the areas of intervention which are the basis of EIT’s general objectives, and its 
broad  lines  of  activity14.  In  particular,  the  general  objectives  of  the  EIT  are  reflected  in  its 
areas of intervention defined by the Horizon Europe proposal:  

(1) Strengthening sustainable innovation ecosystems across Europe;  
(2) Fostering  the  development  of  entrepreneurial  and  innovation  skills  in  a  lifelong 
learning perspective and support the entrepreneurial transformation of EU universities; 

(3) Bring new solutions to global societal challenges to the market; 

The  Horizon  Europe  proposal  also  defines  the  criteria  for  selection,  implementation, 
monitoring,  evaluation  and  phasing-out  of  European  Partnerships  (including  EIT  KICs).  It 
sets out the programme’s rules for participation and dissemination, as well as monitoring and 
evaluation requirements, which will apply to the EIT, in addition to relevant provisions of  the 
EIT Regulation 15. 

The  Horizon  Europe  programme,  however,  does  not  specify  the  concrete  actions  nor  the 
means  and  instruments  to  achieve  the  EIT’s  objectives.  In  addition,  it  does  not  specify  the 
expected results and resources that are needed to implement the EIT key actions to deliver on 
Horizon Europe objectives and expected scientific, economic and societal impacts.  

12 Explanatory memorandum, COM(2018) 435 final, p. 15. 
13 Article 9, COM(2018) 435 final, p. 32. 
14 Annex I, COM(2018) 435 final, p. 3 and Annex I, COM(2018)436 final, pp. 70-72. 
15 In particular, with regard to entities eligible for participation, entities eligible for funding, award criteria, funding rates,  indirect costs, 
eligible costs. 

8 

 
 
 
 
 
 
 
 
                                                            
Indeed, the Horizon Europe proposal and its impact assessment recognise the role of the EIT 
Regulation in setting out the scope of the EIT’s functioning and in governing the selection and 
priority-setting process of the KICs taking into account the outcome of the Strategic Planning 
process  and  Horizon  Europe  criteria  for  partnerships.  They  also  recognise  the  role  of  the 
Strategic Innovation Agenda in setting the priority fields of the EIT and KICs for the 7-year 
programming period.  

1.5.  The need to act  

1.5.1.  The need to amend the EIT Regulation  

The EIT Regulation, adopted in 2008, establishes the EIT. It sets out the mission and tasks of 
the EIT and the framework for its functioning. The Regulation was amended in 2013 in order, 
inter alia, to align it with Horizon 2020.16  

The EIT Regulation is not in principle time bound, contrary to the SIA. However, given that a 
number  of  provisions  in  the  EIT  Regulation  make  a  direct  reference  to  the  current  Horizon 
2020 programme established for the period 2014-2020, these provisions need to be amended, 
to  make  them  compatible  with  the  next  Union  framework  programmes  supporting  research 
and innovation.   

1.5.2.  The need for a new Strategic Innovation Agenda of the EIT 

In line with Article 17 of the EIT Regulation a new Strategic Innovation Agenda (SIA) is to 
be adopted for each 7-year programming period (MFF). 

The SIA lays down the strategic, long-term priority fields and financial needs for the EIT for 
the period covered by the MFF. It also includes an overview of the planned higher education, 
research  and  innovation  activities  and  the  respective  budget  breakdown.  The  current  SIA  is 
limited in time and covers only the period 2014-2020.  

The  new  SIA  will  put  forward  the  strategic  orientations,  financial  needs  and  sources  of 
funding of the EIT for the next MFF. Furthermore, the SIA will define the priority fields and 
time schedule for the selection and designation of KICs for the next programming period. It 
will include an overview of the planned higher education, research and innovation activities 
and  the  budget  breakdown  over  the  period.  The  SIA  is  also  a  legislative  tool  to  align  the 
priority setting of the EIT with the Horizon Europe strategic programming. 

16 Regulation (EC) No 294/2008 of the European Parliament and of the Council of 11 March 2008  establishing the European Institute of 
Innovation and Technology (OJ L 97, 9.4.2008, p. 1). Amended by Regulation (EU) No 1292/2013 of the European Parliament and of the 
Council of 11 December 2013 (OJ L 347, 11.12.2013, p. 174). 

9 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                            
Timing and coherence of the Strategic Innovation Agenda and Strategic Planning Process 

The  new  Strategic  Innovation  Agenda  of  the  EIT  for  the  period  2021-2027  needs  to  be  in 
place before 1 January 202117. The SIA will be adopted by the European Parliament and the 
Council, in accordance with the ordinary legislative procedure. 18 

While the scope of the Strategic Planning process under Horizon Europe, its legal form and 
overall timing are to be decided by the co-legislators, the preparatory process supporting the 
strategic  planning  has  already  started.  The  Commission  is  discussing  currently  possible 
partnerships in order to ensure the highest coherence and complementarity at service, cabinet 
and  political  level  in  the  form  of  the  Project  Team  Meeting  on  Competitiveness  and 
Innovation.    In  this  context,  it  clearly  emerged  that  the  best  option  would  be  to  include 
initially  one  priority  area/KIC  theme  in  the  new  SIA  proposal  for  the  programming  period 
2021-2027.  Other  priority  areas/theme(s)  for  future  KIC(s)  within  the  said  period  would  be 
proposed  subsequently  by  the  Commission  taking  into  account  the  outcome  of  the 
multiannual  Strategic  Planning  process,  new  emerging  priorities,  and  any  other  relevant 
developments. The SIA will outline the selection of the KICs taking into account the Strategic 
Planning  process  and  the  criteria  for  partnerships  in  line  with  Horizon  Europe.  The  total 
number of future KICs for the programming period will depend on the adopted EIT budget. 

This  approach  would  be  in  line  with  the  EIT  Regulation  and  would  avoid  any  delay  in  the 
preparation and launching the call of the first new KIC in 2021. This would enable the EIT to 
continue  developing  innovative  solutions  addressing  societal  challenges  through  new  KICs 
and  contributing  to  the  attainment  of  the  objectives  of  Horizon  Europe  through  a  new  KIC 
starting from 2021.  

The proposed approach for the adoption of the SIA would therefore ensure (i) the continued 
functioning of the EIT as from 1st  January 2021, (ii) avoidance  of unnecessary delay of the 
launch  of  any  new  KIC  and  (iii)  addressing  the  need  for  the  planning  of  new  KICs  to  take 
account of the strategic planning process under Horizon Europe. 

1.5.3.  Lessons learned 

Given  that  the  EIT  Regulation  needs  to  be  revised  to  align  it  with  the  applicable  Union 
framework  programme  supporting  research  and  innovation  and  that  a  new  SIA  needs  to  be 
proposed,  it  is  appropriate  to  consider  what  other  changes  would  be  needed  in  order  to 
improve  the  functioning  of  the  EIT  and  enable  it  to  fulfil  its  mission  and  objectives.  These 
considerations should take account of a number of evaluations, audits reviews and reports on 
the EIT that have been carried out over the past few years.  

The  following  sections  describe  the  key  issues  and  technical  problems  that  have  been 
identified  in  these  reports  and  assess  the  options  for  addressing  these  issues  through  the 
amendment of the EIT Regulation and the proposal for a new SIA. 

17 According to Art. 1 of the current SIA, it will expire at the end of 2020.  
18 Based on Art. 17(4) of the EIT Regulation, which provides that acting on a proposal from the Commission, the European Parliament and 
the Council shall adopt the SIA in accordance with Art. 173(3) of the TFEU.  

10 

 
 
 
 
 
 
 
 
 
 
 
 
                                                            
The table below indicates the most important sources of evidence for this impact assessment.    

Lessons learned  

 The Court of Auditors report of 201619 acknowledged the raison-d'être of the EIT 
but recommended a number of changes to the implementation model such as a revision 
of its funding model and changes to the EIT staff provisions in order to increase the 
overall effectiveness and achieve the expected impact of the EIT. 

 The EIT interim evaluation of 2017 and the related Commission Staff Working 
Document20 concluded that the EIT model remains valid. They highlighted the need for 
the EIT to improve in a number of operational areas and develop further synergies with 
other EU initiatives.   

 The High Level Group on the EIT of 201721 identified a clear need to strengthen 

the role of the EIT as a provider of shared services and expertise to the KICs. It 
recognised the distinctive role education plays in knowledge triangle integration and 
called for the EIT to strengthen it.  

Table 1: Key sources of evidence on EIT; own illustration 

19 European Court of Auditors (2016), Special Report on performance of the EIT (subsequently mentioned as ECA (2016), Special Report) 
20 C. Wilkinson and al./ICF (2017), Evaluation of the European Institute of Innovation and Technology (EIT) (subsequently mentioned as 
ICF (2017), Evaluation), and European Commission, Staff Working Document on the Interim Evaluation of the EIT, SWD (2017) 351 final 
(subsequently mentioned as SWD (2017) 351 final).  
21  The  High  Level  Group  was  established  by  Commissioner  Tibor  Navracsics  in  2016  to  review  the  EIT’s  workings  and  make 
recommendations that can help guide the European Commission and the EIT Governing Board.  High Level Group on the EIT (2016), The 
Future of  the  European  Institute  of  Innovation  and  Technology  (EIT).  Strategic  Issues  and  Perspectives  (subsequently  mentioned  as  High 
Level Group (2016), Future of the EIT).  

11 

 
 
 
 
                                                            
2.  PROBLEM DEFINITION 

This chapter presents the main problems and further technical issues driving EIT intervention 
within  the Horizon  Europe  framework.  It  presents  only  those  problems  and  technical  issues 
that  need  to  be  addressed  in  the  next  programming  period  (2021-2027)  through  legislative 
changes and decisions. These adjustments will increase the EIT’s efficiency, effectiveness and 
overall  internal  and  external  coherence,  in  combination  with  operational  and  managerial 
measures. The problems and issues identified below stem primarily from the EIT evaluation, 
the Court of Auditors report, and the High-Level Group report, and include references to the 
findings of those documents.  

2.1.  Suboptimal funding model  

The  EIT  provides  annual  grants  to  KICs  for  a  maximum  of  15  years.  The  KICs  implement 
their  knowledge  triangle  integration  activities  based  on  annual  Business  Plans  which  are 
implemented by the KIC partners. The KIC activities are divided into two categories: 

a) activities funded up to 100 % by the EIT; and 
b) complementary activities which are not funded by the EIT. 

The  distinction  between  these  two  types  of  activities  determines  the  ceiling  of  the  EIT’s 
contribution. According to the EIT Regulation, EIT funding may only cover a maximum of 25 
%  of  a  KIC’s  overall  costs  (i.e.  the  sum  of  the  costs  of  EIT-funded  activities  and  non-EIT-
funded activities - this complex model is set out in the Figure 3 below). 

Figure 3: EIT funding model, European Court of Auditors illustration  

12 

 
 
 
 
 
 
 
 
According to the Court of Auditors 2016 report, the inclusion of “complementary activities” 
in the funding model is suboptimal given that both their definition and their interpretation are 
rather  general  and  vague.22  This  creates  problems  in  applying  the  eligibility  rules  among 
partners and KICs. The criteria for the designation of complementary activities, i.e. their links 
to key activities and their proportionality, are unclear, and thus, of little added value.23  

As  the  Court  of  Auditors  observed,  “the  measuring  and  reporting  of  KIC  complementary 
activities  are  not  essential  to  the  achievements  of  the  EIT’s  objectives”  as  many 
complementary  activities  are  not  additional  in  practical  terms,24  i.e.  they  are  not  directly 
triggered  by  the  EIT  intervention,  already  exist  or  will  happen  anyway.    Therefore,  the 
intended EIT financial leverage effect, i.e. ensuring that a substantial part of the overall KIC 
budget comes from non-EIT funding (such as membership fees, national or regional funding), 
is  not  applied  in  practice.25  In  addition,  the  current  funding  modalities  create  a 
disproportionate administrative burden in terms of financial reporting for the KICs. The Court 
of  Auditors  implied  in  its  report  clearly  the  need  to  focus  on  EIT-funded  activities  and 
concluded that the EIT funding model was not effective and requested its change in order to 
improve it.26  

An  additional  important  aspect  of  the  EIT  funding  model  is  the  financial  sustainability 
objective: KICs should gradually reduce their dependency from EIT funding for their further 
consolidation  and  further  expansion.  In  accordance  with  the  EIT  Regulation  the  EIT  grants 
provided to KICs should normally cease after a maximum of 15 years. In order to support this 
objective,  the  EIT  has  adopted  principles27  obliging  each  KIC  to  develop  and  implement  a 
financial  sustainability  strategy  and  submit  an  annual  progress  report.  However,  the  current 
funding  model  does  not  provide  any  specific  incentives  to  KICs  to  gradually  increase  their 
levels of private funding. As a result, progress towards financial sustainability remains uneven 
amongst KICs (see Figure 4). 

22 ECA (2016), Special Report, pp. 15-20.  
23 An example used also by the European Court of Auditors is that KIC partners have reported as a KIC complementary activity the cost of 
non-EIT students attending courses in which EIT students also participate. However, these costs are not additional as the courses were part of 
the standard educational programme of the university.  
24 Ibid., p. 24 
25 The overall level of co-funding of KAVA activities by KICs was 23% in 2016 and 20% in 2017.   
26 Ibid., pp. 15-20.  
27 Decision 4/2015 of the Governing Board on Principles of KICs financial sustainability.  

13 

 
 
 
 
 
                                                            
Development of co-funding rate   
(% of KICs contribution)  

40,0

35,0

30,0

25,0

20,0

15,0

10,0

5,0

0,0

2014

2015

2016

2017

Climate KIC

Innoenergy

Digital

Health

Raw Materials

Food

AVERAGE

Figure 4: Co-funding attracted by KICs, 2017; own chart based on EIT data 

An additional challenge of the current funding model is the annual nature of the planning and 
preparation cycle of the KIC Business Plans.28 As the Court of Auditors observed, the current 
annual  grant  process  is  at  odds  with  the  need  to  reflect  the  longer-term  perspective  of 
innovation  activities.29  The  annual  grant  process  is  also  a major  obstacle  to  planning  and 
coordinating multiannual innovation projects. This limits the potential of the KICs and leads 
to a suboptimal selection of innovation activities, low engagement of some KIC partners and 
limited networking and interaction.30   

Questions  related  to  the  EIT  funding  were  also  part  of  an  Open  Public  Consultation  (OPC) 
which was launched  in  the context of the impact assessment. The  majority of respondents31 
supported the notion that KICs need a robust financial sustainability strategy from the outset 
(64%  of  respondents)  and  that  securing  other  public  funding  for  the  operations  of  KICs  is 
necessary (60% of respondents). Furthermore, securing funding from other sources, including 
those  from  private  actors  was  the  most  popular  solution  cited  by  respondents  in  an  open-
ended question regarding financial sustainability. 

2.2.  Limited impact of EIT’s education activities  

Since  its  set-up,  the  EIT  has  supported  innovative  education  and  training  programmes  by 
linking  education,  research  and  business;  learning-by-doing  curricula;  entrepreneurship 
education;  and  international  and  cross-sectorial  mobility.  EIT  students  have  strong 
entrepreneurial  competences  and  high  employability  rates,  suggesting  that  their  skills  and 

28 The KICs’ Business Plan contains the detailed description of the activities that the KIC and its partners will run in the course of the year 
and forms the basis on which the grant allocations are decided by the EIT Governing Board; (see details in Annex 5). 
29 ECA (2016), Special Report, pp. 26-30.  
30 Based on the network analysis of partnering within KICs in the Study to support the Impact Assessment (SQW, November 2018), Annex 
7. 
31 See Annex 2B 

14 

 
 
 
 
 
 
 
 
                                                            
education  are  both  recognised  and  useful.32  In  the  last  four  years,  43  ventures  and  persons 
from  the  EIT  Community  have  been  featured  in  Forbes  Europe  30  under  30  lists.33  As 
highlighted by  the  EIT evaluation34,  there  are  benefits  to  EIT-supported education  activities 
resulting  from:  knowledge  triangle  integration  and  the  integration  of  research  results  and 
innovative  practices  into  the  education  offer;  involvement  of  industry  in  the  design  and 
delivery of the programmes; and access to accelerator programmes.  

However,  the  EIT  evaluation  and  the  High  Level  Group  report  to  the  Commissioner  also 
highlighted  that  the  impact  of  the  education  activities  of  the  EIT  remains  limited.  The 
evaluation  referred  to  the  low  awareness  of  the  EIT  education  brand35.  The  EIT  labelled 
programmes do not appear to have sufficient traction to create market demand. Moreover, the 
evaluation  found  that  links  “between  education  and  innovation-support  activities  [are 
underexploited], and will require further efforts in the coming  future.”36  More generally, in 
terms  of  overall  impact,  the  Commission  concluded  in  its  Staff  Working  Document  on  the 
EIT evaluation that “stronger impact is expected from [EIT] education activities”.37 

A  recent  report38  of  the  Joint  Research  Centre  argues  that  "together  with  research  centres, 
HEIs  are  co-innovators  of  70%  of  the  innovations  derived  from  H2020  projects.  However, 
further changes in strategic orientation and university governance are required for universities 
to realise their potential contribution as enablers of innovation. Excellence in research, high-
quality  education,  entrepreneurship  and  contributions  to  innovation  all  need  to  be 
strengthened, while at the same time ensuring synergies between them.”39  

The  Horizon  Europe  proposal  has  outlined  a  stronger  role  for  the  EIT  in  education.  This 
relates  to  the  need  for  stronger  entrepreneurial  and  innovation  capabilities  and  skills  in 
HEIs.40 Against this backdrop, the Horizon Europe impact assessment called for “an enhanced 
role for the EIT in embedding innovation and entrepreneurial capabilities, prospective skills 
identification and talent development in HEIs”.41  

The challenge to increase the innovation capacity of HEIs is set to grow as they become more 
integrated in  local,  national  and  global  innovation  chains.42  In  this context,  the  proposal  for 
the  Specific  Programme  under  Horizon  Europe    identifies  “entrepreneurial  and  innovation 
skills  in  a  lifelong  learning  perspective  and  the  entrepreneurial  transformation  of  EU 
universities”43 as one of the intervention areas for the EIT. 

32 There were close to entrepreneurial 1200 EIT Label graduates as of 2017, in addition to EIT students engaged in other programmes. See 
EIT  (2017),  Our  Impact,  from  2010  to  2016,  pp.  33-34  (eit.europa.eu/interact/bookshelf/eit-our-impact-2010-2016),  and  SWD  (2017)  351 
final, p.28.   
33  See  EIT  (2017),  Our  Impact,  p.  37  and  EIT  Press  release:  EIT  entrepreneurs  in  the  spotlight  in  Forbes  30  under  30 
(eit.europa.eu/newsroom/eit-community-entrepreneurs-spotlight-forbes-30-under-30).  
34 SWD (2017) 351 final, , pp. 40-44.  

35 SWD (2017) 351 final, p.31.   
36 Ibid., p.28.   
37 Ibid., p.44.   
38 C. Benedetti Fasil et al. (2017), Current challenges in fostering the European innovation ecosystem, EUR 28796 EN, Publications Office 
of the European Union, Luxembourg, 2017, ISBN 978-92-79-73862-3, doi:10.2760/768124, JRC108368. 
39 Ibid., p. 10. 
40  See  OECD 
innovation 
(http://www.oecd.org/cfe/leed/43201452.pdf) as well as OECD country reviews on https://heinnovate.eu   
41 SWD (2018) 307 final,  p. 256 
42  See  Renewed  EU  Agenda  for  Higher  Education  (COM(2017)  247)  and  the  ones  set  in  the  Renewed  EU  Agenda  for  Research  and 
Innovation  (COM(2018) 306) as  well  as  High  Level  Group  on  maximizing  the  impact  of  EU Research  &  Innovation  Programmes  (2017) 
LAB – FAB – APP. Investing the European future we want, p.13. 
43 COM(2018) 436 final, p. 71 

examples  of  good  practices. 

(2009),  Universities, 

entrepreneurship: 

criteria 

and 

and 

15 

 
 
 
 
 
 
                                                            
The stakeholders responding to the Open Public Consultation called for a stronger role of the 
EIT  in  education.  A  total  of  65%  of  all  OPC  respondents44  agree  or  strongly  agree  that 
training opportunities to become more entrepreneurial and innovation minded are insufficient 
in Europe. The most popular suggestions from the respondents for achieving the educational 
policy objective are for the EIT to provide funding for innovation capacity development and 
rewarding/recognising  HEIs  to  become  more  innovative  and  entrepreneurial  (71%  of 
respondents) and to launch new actions supporting education and human capital development 
through  the  identification  of  future  skills  needs  (69%  of  respondents).  In  the  same 
consultation  however,  only  23%  of  respondents  support  the  strengthening  of  the  EIT  label. 
Furthermore,  the  representatives  of  business  and  regional  associations  interviewed  by  the 
Commission45 expressed the view that HEIs should play a key role for a more entrepreneurial 
environment in Europe. 

2.3.  Limited impact of EIT’s regional outreach  

The KICs consist of geographical hubs or co-location centres (CLCs) that bring together, at a 
local  or  regional  level,  education,  research  and  industry  partners  of  the  KIC.  As  the  EIT 
evaluation  confirmed,  CLCs  broaden  the  EIT  innovation  support  to  some  of  EU's  moderate 
innovation performers; nevertheless, the CLCs' support to the group of “moderate and modest 
innovator” countries46 remains limited to a small number of Member States (Portugal, Poland, 
Estonia, Greece, Slovenia)47. 

Both the evaluation of the EIT and the High-Level Group report highlighted that efforts are 
still needed for the KICs to be fully integrated into the local innovation ecosystems. 60% of 
respondents to the consultation on the mid-term evaluation of the EIT reported that “the KIC 
had had little or no systemic impact on local, regional or national innovation ecosystems”.48  

The  majority  (77%)  of  all  respondents  to  the  OPC  agree  or  strongly  agree  that  the  joint 
activities between HEIs, businesses and research organisations are not sufficiently integrated 
within  their  regional  and  local  ecosystems.  This  perception  is  even  stronger  (89%  of 
respondents) in “moderate and modest innovators” countries. Similarly, the main issue raised 
by  the  representatives  of  the  business  and  regional  associations  during  the  consultation 
organised by the Commission in November 2018  related to the necessity of linking the EIT 
and KIC activities to the regional and local Smart Specialisation Strategies.  

The  problems  of  insufficient  engagement  of  KICs  in  developing  strong  local  innovation 
communities  are  further  amplified  by  the  fact  that  73%  of  the  EIT  financial  contribution  is 
concentrated  in  five  countries.49  This  results  in  a  lack  of  integration  and  promotion  of  KIC 
activities  within  the  regions  and  local  innovation  ecosystems  across  Europe  and  limits  their 
overall impact on regional innovation ecosystems.  

Through  its  Regional  Innovation  Scheme  (EIT  RIS)  which  was  launched  in  2014,  the  EIT 
developed  an  outreach  strategy,  which  is  carried  out  through  the  activities  of  the  KICs.  Its 

44 Cf. Annex 2B 
45 Views expressed in the stakeholder workshops organised by the Commission in November and December 2018. 
46 This report adopts the categorisation of the European Innovation Scoreboard. The Scoreboard identifies countries as: Innovation Leaders; 
Strong Innovators; Moderate Innovators; and Modest Innovators. ec.europa.eu/growth/industry/innovation/facts-figures/scoreboards_en 
47 ICF (2017), Evaluation, p. 36, i.e. Portugal, Poland, Estonia, Greece, Slovenia 
48 Ibid., p. 84. and High Level Group (2016), Future of the EIT, p. 13.  
49  ECA  (2016),  Special  Report,  pp.  42-43.  Funds  are  concentrated  in  partners  from:  Netherlands  (24%),  Germany  (15%),  France  (13%), 
Sweden (12%) and United Kingdom (9%) 

16 

 
 
 
 
 
 
 
 
                                                            
main objective is to support countries and regions that lag behind in innovation performance50 
by strengthening their capacity for innovation and by bringing the EIT model to these regions. 
EIT RIS is a voluntary scheme and KIC do not have an obligation to implement it unless they 
decide to include it their Business Plans.  

Incentives  for  KICs  to  operate  in  EIT  RIS  territories  are  still  limited,  in  comparison  to  the 
total budget available. The EIT RIS guidelines foresee that each KIC can apply for EUR 1.5 
to EUR 4 million annually. This is between 1.7% to 5% of the total annual grant for a first 
generation KIC in  2018. Such incentives  appear insufficient  to  fully exploit the  potential of 
the regional outreach of the KICs activities and do not adequately mitigate existing regional 
disparities.  

Given the novelty of the RIS any conclusions regarding its impact would be premature at this 
stage. However, there are indications that its effect is likely to be limited, partly due to  low 
budgets  as  well  as  differing  strategies  between  the  horizontal  EIT  RIS  strategy  and  the 
individual strategies of the KICs that ultimately implement it on a voluntary basis.  

2.4.  Technical issues  

In addition to the three key problem areas described above, the interim evaluation, the Court 
of Auditors Report, the High-Level Group Report, the Commission’s observations on the EIT 
functioning also point to a number of technical issues that the EIT needs to address in order to 
increase  the  effectiveness,  efficiency  and  coherence  of  its  operations,  in  line  with  its 
objectives and mission.  

KICs: openness, transparency and collaboration  

Limited transparency and openness of the KICs affect their partners and stakeholders. As the 
Court of Auditors observed in relation to KIC internal processes, the major challenges relate 
to the limited number of partners involved in the strategic and operational decision-making of 
the KIC51; the selection of activities financed by the EIT52; and the lack of transparency and 
communication53,  hindering  wide  participation,  roll-out  and  replication.54  The  high 
concentration of  EIT  financial  support in  a small number of partners negatively impacts the 
attractiveness of the KICs for potential new partners.  

The High-Level Group report found that the limited openness of KICs, and their innovation 
ecosystems as a whole, to new partners, as well as the lack of clear guidelines associated with 
becoming a partner can reduce the effectiveness of the EIT model. The Group report referred 
to the perception of the KIC as “closed clubs” and called for principles that can better engage 
external partners including SMEs.55 A similar view was reiterated by some participants in the 

50  Modest  and  moderate  innovators  in  2018,  based  on  the  European  Innovation  Scoreboard:  Bulgaria,  Croatia,  Cyprus,  Czech  Republic, 
Estonia, Greece, Hungary, Latvia, Lithuania, Malta, Poland, Portugal, Romania, (South) Italy, Slovakia, Slovenia, Serbia and Turkey. 
51 ECA (2016), Special Report, p. 42. 
52 Ibid. p. 44; 50% of the respondents to the survey do not believe that the selection of the activities within the KIC is fair and transparent.  

53 Ibid. p. 44; some KIC partners have expressed their concerns by stating that “there are a couple of influential partners and they distribute 
the funds among themselves”. 
54  E.g.  the  websites  of  some  KICs  still  lack  basic  information  on  the  supported  projects  such  as  contact  details  of  project  coordinators, 
project duration, amount of EU-funding, and key deliverables. The EU as funding source is not properly indicated throughout the co-funded 
projects. 
55 High Level Group (2016), Future of the EIT, pp. 17-18. 

17 

 
 
 
 
 
 
 
 
 
                                                            
consultations on Horizon Europe.56 Some stakeholders highlighted that “it is essential that the 
EIT and the KICs improve their openness and responsiveness to include new relevant actors 
and  keeping  a  continuous  outreach  effort  to  renew  and  reinforce  the  member  base”.57 
Stakeholders also highlighted the potential synergies from more active collaboration between 
and across the KICs.58 

More than 50% of OPC respondents indicated that the EIT brand is not well recognised.59 The 
current  EIT  mechanisms  to  ensure  systematic  and  wide  dissemination  of  results  to  better 
inform European,  national and regional policy makers of the achievements of KICs/EIT are 
not effective.60  

The  integration  of  the  activities  of  HEIs,  research  organisations,  and  businesses  is  a 
cornerstone  of  the  EIT  innovation  model  and  requires  efficient  collaboration  among  these 
actors. As confirmed by participants in the consultation activities run by the Commission, the 
level of cooperation between education and training institutions and businesses is insufficient. 
Business actors were not always willing to partner with academia thus confirming a broader 
problem in university-business collaboration.61  

Furthermore, the social network analysis in Annex 7 suggests that in selected KICs up to 83% 
of KIC beneficiaries participated in only one or two projects meaning that some organisations 
have weak ties with the system and that activities are concentrated around a small number of 
organisations. 

EIT Governance  

Good governance of the EIT is essential for achieving its objectives and ensuring long-term 
success. Structures, processes, roles and responsibilities as established in the EIT Regulation 
are interrelated. Several bodies play an important role and these are (1) a Governing Board62 
(high-level  members  experienced  in  higher  education,  research,  innovation  and  business) 
assisted  by an  Executive  Committee,  (2)  a  Director,  appointed  by  the  Governing  Board  and 
(3)  an  Internal  Auditing  Function  advising  the  Governing  Board  and  the  Director.  The 
Commission has an observer role in the Governing Board. It also appoints the members of the 
Board but the latter is not obliged to report to the Commission. Therefore, the Commission’s 
contribution to the effective and efficient functioning of the EIT and KICs is limited.  

56 E. Griniece and M. Muizarajs (2018), Synthesis of stakeholders input for Horizon Europe, p. 64. 
57 Ibid.  
58 See Annex 2A 
59 ICF (2017), Evaluation, pp. 51-52 
60 Ibid. 
61 European Commission (2018), The state of university-business cooperation in Europe. Publication available at.europa.eu/en/publication-
detail/-/publication/1b03ee59-67a4-11e8-ab9c-01aa75ed71a1/language-en 
62 It adopts, for example, the draft EIT’s SIA, the SPD, the EIT’s budget, appropriate measures if the evaluation of a KIC shows inadequate 
results, appoints and dismisses the Director and exercises disciplinary authority over him/her, promotes the EIT globally, etc.  

18 

 
 
 
 
 
 
 
 
 
 
                                                            
The  external  evidence  on  governance  is  not  as  extensive  as  in  other  areas;  however,  in  the 
Commission’s experience it is clear that the current form of governance has an impact on the 
efficiency  of  the  EIT’s  functioning.    As  an  example,  the  current  EIT  Regulation  does  not 
rigorously  distinguish  between  the  supervisory  powers  of  the  Governing  Board  and  the 
executive powers of the Director, e.g. with regard to the continued monitoring and evaluation 
of the activities of the KICs. The governance structures should  also better  ensure that KICs 
operate in synergy with each other and with relevant EU policy objectives 

According to the EIT Regulation, the Stakeholder Forum is intended to be a platform open to 
national,  regional  and  local  authorities,  organised  interests  and  individual  entities  from 
business,  higher  education,  research,  associations,  civil  society  and  cluster  organisations,  as 
well  as  other  interested  parties  from  across  the  knowledge  triangle.  However,  its 
implementation  is  through  one  annual  event63,  which  suggests  that  it  is  not  effectively 
fulfilling its function due to its limited scope.  

The governance of the EIT has also been the subject of recommendations from the High Level 
Group  on  the  EIT  (HLG)64.  Consequently,  there  is  a  need  to  clarify  and  adjust  roles, 
responsibilities  and  the  division  of  tasks  between  the  Governing  Board,  the  Executive 
Committee and the Director with a view to  increase clarity, avoid duplication and the need to 
simplify  the  EIT’s  decision-making  process65.  In  addition,  a  clarification  of  the  role  of  the 
Stakeholder Forum is necessary in order to maximise its impact.  

Other issues 

As highlighted by the Court of Auditors’ 2016 report, there is a high staff turnover at the EIT 
linked to the fact that EIT staff contracts have limited duration compared to other similar EU 
bodies. This is an issue that needs to be addressed as it has impact on the continuity of EIT's 
operations and its functioning. 

63 The EIT is organising every year an event gathering EIT stakeholders. See for more information https://eit.europa.eu/innoveit 
64 High Level Group (2016), Future of the EIT, pp. 22-24. 
65 Supported by evidence from decentralised EU agencies concluding that a clear separation of roles and functions between the Management 
Board  and  the  Director,  as  foreseen  in  the  founding  regulations,  is  meant  to  avoid  overlap  between  the  two,  and  allow  the  Management 
Board to focus on strategic priorities and key management decisions. 

19 

 
 
 
 
 
 
 
 
 
 
                                                            
2.5.  Summary of problems and technical issues to be addressed: 

The following problem tree exemplifies the drivers of the problems and technical issues:  

Figure 5: Problem tree; own illustration 

The following table shows the sources of problems and technical issues:  

Problem/technical  
issue 

Regulation 

X 

X 

X 

X 

X 

Suboptimal funding 
model  

EIT governance 

Future themes for  
new KICs 

Limited impact of 
education activities 

Limited impact of 
regional outreach 

Openness, transparency 
and collaboration of 
KICs 

Horizontal: ensuring  
alignment within 
Horizon Europe and 
synergies  

SIA 

X 

X 

X 

X 

X 

X 

Table 2: Sources of problems and technical issues; own illustration 

20 

Operational/managerial 
measures 

X 

X 

X 

Suboptimal KIC funding modelLimited impact of EIT s regional outreach Limited impact of EIT education activities Limited inclusion of education in innovation ecosystemsLow integration and promotion of KIC activities within local environmentsLimited openness and transparency of KICsConcentration of EIT funding in few countriesLow integration and promotion of KIC activities within local environmentsNon coherence between KIC strategies/ business plans and EIT activities (RIS scheme) vis-à-vis regions  Limited entrepreneurial competencesLow co-funding attracted and limited progress in achieving financial sustainabilityLow effectiveness of annual activity planning and budgeting Disproportionate admin burden on financial reportingLack of specific skills in key fields (individual level)Lack of entrepreneurial capabilities of HEIs(institutional level)ProblemsEffects ConsequencesTechnical issuesCollaboration and unexploited linkages between KTI activitiesEIT Governance – responsibilities and tasks Complicated concept of KAVA vs. KCA activities and related unclarity on eligibility among KIC partnersLow awareness of the EIT education activities, the concept of entrepreneurship education and linking the education, research and business  Untapped potential to better link innovation players across EuropeDrivers 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.  WHY SHOULD THE EU ACT? 

3.1.  Legal basis 

The EU has a shared competence in industry policy based on Article 173 TFEU (Title XVII). 
According  to  Article  173(1),  the  Union  and  the  Member  States  shall  ensure  that  conditions 
necessary  for  the  competitiveness  of  the  Union's  industry  exist.  For  that  purpose,  in 
accordance with a system of open and competitive markets, their action shall be aimed also at 
fostering better exploitation of the industrial potential of policies of innovation, research and 
technological  development.  Article  173(3)  foresees  that  the  European  Parliament  and  the 
Council,  acting  in  accordance  with  the  ordinary  legislative  procedure  referred  to  in  Article 
294,  may  decide  on  specific  measures  in  support  of  action  taken  in  the  Member  States  to 
achieve the mentioned objective, excluding any harmonisation of the laws and regulations of 
the Member States. This provision is the legal basis of the EIT Regulation and of the EIT’s 
Strategic Innovation Agenda 2014-2020.   

The proposed reinforcement of the activities of the EIT, including in the area of education and 
the regional dimension, are innovation-driven and aim at the fulfilment of the objective set out 
in  Article  173  TFEU.  Therefore,  the  industry  legal  base  provided  in  Article  173  TFEU 
constitutes the legal base of both proposals assessed in this impact assessment. 

3.2.  Subsidiarity and proportionality: need for, and added value of EU action 

The Commission proposals for amending the EIT Regulation through a recast and for a new 
SIA respect the principles of subsidiarity and proportionality. They do not go beyond what 
is required for achieving the Union's objectives and provide a clear EU added-value in terms 
of  economies  of  scale,  scope  and  speed  of  investments  in  research  and  innovation  areas, 
compared to national and regional initiatives and solutions. Moreover, EU action would not 
interfere with purely domestic scenarios or require harmonisation of the laws and regulations 
of the Member States. 

The EIT has a unique way of building EU-wide innovation ecosystems of education, research, 
business and other  stakeholders.66  Its activities  have  a cumulative effect, which support  and 
stimulate  Europe's  expertise,  notably,  in  key  strategic  fields.  This  strengthens  the  Union's 
competitiveness and innovation capacity for the benefits of society as a whole. Furthermore, 
cooperation activities supported by the EIT lead to an increased quality of action, innovation 
and  internationalisation  of  KIC  partners  and  organisations,  the  creation  of  cross-border, 
multidisciplinary networks, more cross-sectoral cooperation and geographical outreach. 

The EIT is also the sole instrument within Horizon 2020 and the future Horizon Europe with a 
distinct  focus  on  education  as  a  key  driver  of  innovation,  growth  and  competitiveness.  The 
EIT  and  the  KICs  develop  innovative  education  and  training  programmes  by  linking 
education,  research  and  business;  learning-by-doing  curricula  and  robust  entrepreneurship 
education.  The  EIT  contributes  to  increasing  the  number  of  entrepreneurs  and  skilled 
professionals thus contributing to the overall development of human capital in Europe. 

66 ICF (2017), Evaluation, p. 36.  

21 

 
 
 
 
 
 
 
 
 
 
 
                                                            
4.  OBJECTIVES: WHAT IS TO BE ACHIEVED? 

The general objectives are reflected in the Horizon Europe programme proposal and presented 
below, along with the specific objectives that address the problems and technical issues facing 
the EIT. 

Figure 6: General and specific problems and objectives of the EIT; own illustration 

In line with the identified problems, the specific objectives, to be defined in the SIA are:  

a.  To  increase  the  impact  of  KICs  and  knowledge  triangle  integration  through  an 

effective and efficient EIT funding model;  

b.  To increase the innovation and entrepreneurial capacity of the higher education sector 

by promoting institutional change in HEIs in Europe;  

c.  To increase the regional outreach of the EIT in order to address regional disparities in 

innovation capacity across the EU; 

22 

I. Barriers to collaboration between higher education, research and businessII. Low levels of entrepreneurial activity  and lack of entrepreneurial mindsetIII. Underutilisation of existing research strengths to create economic or social valueSuboptimal KIC funding modelLimited impact of EITs regional outreach Limited impact of EIT education activities Technical issuesI. Strengthen sustainable innovation ecosystems   across EuropeII. Foster innovation and entrepreneurship through better education III.  Bring new solutions to global challenges to market Increase the impact of KICs and knowledge triangle integrationIncrease regional outreach of EIT by addressing regional disparities in innovation capacity across the EUIncrease innovation capacity of higher education by promoting entrepreneurial transformation of HEIsIndividual operational objectivesOBJECTIVESPROBLEMSGeneralSpecificEIT Regulation, SIAHorizon Europe 
 
 
 
 
 
 
5.  HOW OPTIONS ADDRESS PROBLEMS AND TECHNICAL ISSUES 

A  number  of  options  regarding  the EIT’s  future  direction  were  considered  and  discarded  in 
the Horizon Europe impact assessment67: namely, the Reduction/Discontinuation of EIT KICs 
interventions; the Continuation of the approach to EIT/KICs as implemented under Horizon 
202068;  the  Direct  integration  of  KICs  into  the  Framework  Programme  (without  the  EIT). 
Annex 5 provides details on policy options which were not considered viable and the reasons 
for this. 

Before  proceeding  to  the  discussion  of  the  three  policy  options,  sections  5.1.-5.3.  discuss 
measures to be taken in response to problems and technical issues described in section 2 for 
which  only  one  alternative  is  viable.  The  policy  options  are  presented  in  the  backdrop  of  a 
targeted EU level intervention on the basis of the Horizon Europe proposal for an EIT budget 
of EUR 3 billion (allowing the launch of one or two new KICs during 2021-2027 according to 
the option chosen). The options offer different strategic choices and are not cumulative even 
though a wide range of similarities exists across all of them.  

5.1.  Discussion of technical issues  

Openness, transparency and collaboration  

Limited  transparency  and  openness  affect  negatively  the  collaboration  of  EIT  stakeholders. 
Technical amendments in the EIT Regulation would be necessary to reinforce the principles 
of openness and transparency, particularly: the provision on transparency of both the EIT and 
KIC and access to documents and extending the selection criteria for KICs to incentivise the 
addition  of  new  members  and  including  references  to  Horizon  Europe  principles  of 
transparency and openness for European Partnerships.  

A number of technical measures can be introduced by the EIT which do not require additional 
amendments to the EIT Regulation. Such measures include the creation of  guidelines by the 
EIT to  be followed by KICs as  regards transparency and openness aspects, in  particular the 
selection of new partners, the preparation of the Business Plan69 and the openness of activities 
to  third  parties.  The  Governing  Board  (GB)  would  monitor  how  KICs  apply  the  guidelines 
and take them into account in the assessment of KICs’ performance for the funding allocation. 
This  includes  the  possibility  to  explore  how  strategic  priorities  that  are  not  foreseen  to  be 
addressed by new KICs can eventually be efficiently supported through collaborative action 
among  several  KICs  (cross-KIC  actions).  This  applies  even  more  so  if  more  than  one  KIC 
already foresee activities common for a policy objective.   

In  addition,  the  KICs’  multi-annual  strategies  need  to  describe  how  the  KICs  will  ensure 
openness  to  relevant  partners  and  stakeholders  and  how  it  intends  to  reach  new  potential 
partners  across  Europe.  Other  measures  include  ensuring  that  KICs  transparently  share  the 
conditions  and  the  criteria  to  become  partners  as  well  as  improving  the  procedure  for  the 
preparation of a KIC multi-annual strategy and Business Plan (including the identification of 
priorities, synergies with other KICs and other EU-activities, the selection of activities and the 
allocation of funds). Finally, the Governing Board could incentivise KICs that demonstrably 
increase the share of calls, in particular for innovation projects that are open to third parties.  

67 SWD(2018) 307 final, p. 129  
68 This approach was discarded due to its perceived lack of integration of EIT in the overall R&I framework  
69 Including guidance on streamlining the policy goals/targets and its monitoring.  

23 

 
 
 
 
 
 
 
                                                            
In  its  monitoring,  the  EIT  should  signal  over-concentration  of  EIT  financial  support  to  the 
Governing  Board  which  should  be  able  to  request  operational  measures  from  the  KIC  that 
mitigate such over-concentration. More generally, transparency guidelines should ensure that 
KIC Business Plans contain the information on the level and intensity of cooperation between 
KIC  partners  (i.e.  overview/ratio  of  KIC  partners/beneficiaries  within  individual  KIC 
activities,  innovation  projects  or  education  programmes;  and  breakdown  of  funding 
distribution among individual  partners). Such measures should be monitored by the EIT via 
relevant indicators and trigger action at the level of the Governing Board if related objectives 
are not met.  

Governance  

There  is  a  need  for  clarification  of  the  roles  for  the  EIT  Governing  Board,  Executive 
Committee  and  Director.  The  Governing  Board  needs  to  strike  the  right  balance  between 
strategic leadership of the EIT and KICs and responsibility for operational aspects of the EIT 
and KICs.70 In addition, the Governing Board has to give overall guidance to the EIT while 
respecting the autonomy of the KICs.71 While the EIT Regulation qualifies all decisions of the 
Governing Board as ‘strategic’, it is clear that some decisions are operational in nature such as 
the establishment of advisory groups or the implementation arrangements for the operation of 
an Internal Auditing Function.  

The  EIT  would  benefit  from  a  more  guidance  from  the  Governing  Board  on  key  strategic 
issues.    The  Governing  Board  currently  does  not  play  a  sufficiently  strong  role  in  the 
monitoring,  supervision  and  steering  of  KICs,  which  could  be  strengthened  by  supervising 
more  closely  the  ongoing  evaluation  and  monitoring  of  KICs.  A  clearer  division  of  tasks 
could  help  the  Governing  Board  to  achieve  balance  between  strategic  leadership  and 
operational aspects.  

The  assistance  by  the  Executive  Committee  to  the  Governing  Board  should  be  clarified  in 
order  to  provide  more  effective  support  (eg.  preparation  by  Executive  Committee  of  the 
meeting  of  the  Governing  Board  in  cooperation  with  the  Director;  consultation  of  the 
Exectutive  Committee  by  the  Director  on  key  documents  such  as  the  draft  Single 
Programming  Document  and  draft  consolidated  annual  activity  report).  The  Commission’s 
role should also be clarified to reflect its legal obligations in terms of monitoring and sound 
financial management. A requirement for agreement by the Commission on a limited number 
of strategic issues (e.g. monitoring and financial allocation principles) should be introduced.   

The  EIT  Stakeholder  Forum  should  take  into  consideration  the  activities  of  the  Forum  of 
Member  States  and  Associated  Countries’  public  authorities  and  bodies  to  be  established 
under the Horizon Europe programme. This forum will promote coordination and dialogue on 
the development of the EU’s innovation ecosystems and between EU and national innovation 
policies and programmes.  

70 Under the current EIT Regulation, the GB has to i) take the necessary strategic decisions on the EIT and KICs by, for example, adopting 
the Strategic Programming Document (SPD) and EIT’s budget, the draft SIA, selecting a partnership as a KIC; ii) exercise responsibility for  
operational aspects of the EIT and KICs, e.g. by adopting procedures for financing, monitoring and evaluating the activities of the KICs; and 
iii) respect the substantial autonomy of the KICs by not influencing their internal organisation and composition , precise agenda or working 
methods. 
71 As a result of the broad scope of the KICs autonomy in the EIT Regulation, the KICs have tended to grow large, strong and independent, 
while the GB has built up the corresponding capacity to successfully oversee their strategic development and performance. The result is a 
lack of operational transparency of the KICs, a problem identified in ECA (2016), Special Report, and High Level Group (2016), Future of the 
EIT. 

24 

 
 
 
                                                            
Moreover, several amendments to the EIT Statutes annexed to the EIT Regulation would be 
necessary  to  reinforce  the  EIT  governance  provisions.  In  particular,  this  would  include 
changes  to  clarify  the  role  of  the  Governing  Board,  the  Executive  Committee,  the  Director 
and the Commission in the governance of the EIT with a view to increase its effectiveness; 
and  to  clarify  the  role  of  the  Stakeholder  Forum.  In  addition,  provisions  as  regards  staff 
contracts should be amended to allow for contracts of an indefinite duration in line with other 
comparable bodies, in order to ensure the continuity of EIT operations. 

5.2.  Discussion of priority fields  

According to the EIT Regulation, the SIA should define the priority fields for the future KICs. 
The Governing Board of the EIT proposed four possible priority themes for future KICs in its 
Strategic Outline on the Future of the EIT72  and the draft Strategic Innovation Agenda of the 
EIT that was submitted to the European Commission in accordance with the EIT Regulation. 
The priority fields proposed by the Governing Board have been subject to a further thorough 
assessment  by  the  Commission  (see  Annex  9  for  more  details).  It  should  be  noted  that  this 
assessment  did  not  include  a  detailed  specific  assessment  of  the  potential  economic,  social 
and  environmental  impacts  of  possible  KICs  launched  under  each  of  the  proposed  priority 
fields since this is not explicitly required by the EIT Regulation.73  

The final Commission assessment, summarised in the table below, 1) builds on several reports 
and assessments conducted by the EIT and the Commission against various sets of criteria and 
2) is based on the evaluation of 9 key aspects that condition the selection of the priority fields. 
Annex 9 summarizes the assessment process and its different steps and outcomes.  Annex 6 
outlines  the  European  partnerships  criteria  that  will  be  reflected  in  the  call  for  selection  of 
future KICs and in their multiannual strategies.  

72 See for more details the strategic outline published by the EIT GB: https://eit.europa.eu/sites/default/files/eit_strategic_outline_0.pdf  
73  The  same  approach  was  followed  by  the  Commission  and  co-legislators  for  the  preparation  and  adoption  of  the  current  Strategic 
Innovation Agenda 2014-2020. 

25 

 
 
 
 
 
 
 
                                                            
Key aspects 

Cultural and 
Creative 
Industries 

Security and 
Resilience 

Water, Marine 
and Maritime 

Inclusion, 
Integration 
and Migration 

Coherence and synergies with 
EU R&I and Education 
landscape 

Not covered by planned similar 
EU initiatives (i.e. partnerships) 

Fragmentation of the innovation 
value-chain 

Suitability  of  the  EIT  model  to 
address innovation bottlenecks 

Ability to mobilize investment 
and sufficient market for 
innovation 

Modernisation/transformation 
potential  of 
system and skills gap  

the  Education 

Regional dimension 

Citizen-focus approach  

Synergies with and 
complementarity to existing 
KICs 

TOTAL 

++ 

++ 

++ 

+ 

++ 

++ 

++ 

++ 

17 

++ 

++ 

+ 

+ 

++ 

+ 

+ 

++ 

++ 

+ 

+ 

+ 

++ 

+ 

12 

+ 

+ 

++ 

+ 

+ 

12 

+ 

++ 

++ 

0 

0 

++ 

+ 

++ 

0 

10 

Table 3: Selection of future priority fields, Commission assessment 

As a result of this assessment process, the field of Cultural and Creative Industries (CCI) has 
been identified as the most adequate thematic priority for the first KIC to be launched under 
Horizon Europe as it obtained the best results in the overall assessment against the proposed 
criteria. CCI  are a sector with a high growth potential, many grass-roots initiatives and strong 
citizen appeal. They are strongly embedded in their local and regional ecosystems. However, 
the  innovators  and  business  creators  in  this  sector  lack  the  needed  entrepreneurial  and 
innovation skills. For these reasons, the KIC model seems particularly well adapted.  

26 

 
 
 
 
 
Cultural  and  Creative  Industries  also  complement   very  well  the  themes  of  the  8  already 
existing KICs in the EIT portfolio. Last but not least, they cover an area for which no other 
potential  partnership  is  foreseen  and  where  there  is  a  strong  political  support  from  the 
European  Parliament  and  from  Member  States.  Therefore,  this  theme  has  proven  to  be  the 
most  suitable  to  the  KIC  model  and  complements  well  the  activities  of  the  existing  ones. 
These conclusions would be reflected in the SIA, along with an indication for the launch of 
such a KIC. A call would be launched in 2021 that would lead to the designation of a KIC in 
the year after, i.e. 2022.   

5.3.  Discussion of funding model 

In  line  with  the  EIT  Regulation  provision  that  requires  funding  for  KICs  to  cease  normally 
after a maximum of 15 years, the EIT Governing Board adopted principles for the financial 
sustainability  of  the  KICs  in  2015,  based  on  its  initial  experience  with  the  first  generation 
KICs  launched  in  2010.  In  the  principles,  the  Board  outlined  that  that  the  maximum  EIT 
contribution to a KIC for eligible costs should start to decrease from 100% to 80% in year 11 
of the EIT grant agreement with the KIC74, implying there is no co-funding obligation for the 
KIC  in  the  years  one  to  ten.  While  this  decision  was  the  first  to  explicitly  introduce  co-
funding from the KIC partners, given that no KIC has entered its eleventh year by 2019, its 
effectiveness cannot currently be assessed.  

KIC  partners  already  attract  co-funding,  albeit  to  a  very  different  extent.  The  figure  below 
provides an overview of the co-funding attracted by KICs so far – ranging from 9.7% in EIT 
InnoEnergy (launched in 2009) to 27% in EIT Health (launched in 2014). The figure shows 
the average co-funding increasing from 9% to 19% between 2014 and 2017 (see Annex 11 for 
more  details).  However,  as  shown  in  the  Figure  7,  it  is  evident  there  are  significant 
performance  differences  between  the  KICs.  In  particular,  two  out  of  three  first  generation 
KICs have significant difficulties in attracting co-funding.  

Co-funding rate, 2017 
(% of KICs contribution) 

30,0

25,0

20,0

15,0

10,0

5,0

0,0

Climate KIC

Innoenergy

Digital

Health

Raw
Materials

Food

AVERAGE

Figure 7: Co-funding rate (% of KICs contribution) in different KICs in 2017; EIT data 

74 The decision applies to the so-called KAVA activities (KIC-value added activities), ie. the activities that can be funded with up to 100% 
(see chapter 2.1. for an explanation). The Governing Board decided in 2015 that  the maximum EIT contribution to a KIC will be reduced 
from up to 100% funding to KAVA after 10 years of a KIC’s designation to 80%, on average, in year 11 and thereafter progressive annual 
reductions:  60%  in  year  12,  40%  in  year  13,  20%  in  year  14  and  10%  in  year  15.  This  decision  has  not  been  revoked  since  then  as  it  is 
expected that the Commission will revise the funding model, in accordance with the Court of Auditors recommendation.  

27 

 
 
 
 
 
 
 
 
                                                            
In  this  context  and  in  view  of  the  recommendation  of  the  Court  of  Auditors,  different 
solutions have been analysed in order to address the suboptimal funding model of the EIT: a 
continuation  of  the  current  practice;  an  introduction  of  a  co-funding  rate  in  line  with  the 
Horizon Europe provisions for partnerships; and a decreasing EIT co-funding rate. Annex 10 
provides a financial modelling analysis of the implications of co-funding.  

5.3.1.  Continuation of current funding model (discarded) 

Not  changing  the  current  funding  model  would  mean  that  there  would  continue  to  be  a 
funding  model  that  does  not  distinguish  clearly  between  the  EIT  grant  and  real  external 
investment.  The  KIC  activities  not  funded  by  the  EIT  would  continue to  be  included  in  the 
calculation  basis  when  determining  the  EIT’S  financial  contribution  to  the  KIC.  The  yearly 
reporting of the KIC complementary activities, both in the Business Plans and in the financial 
reports submitted by the KICs, would continue to add considerable burden with limited added 
value.  

As a result, the funding allocation would continue to be ineffective and disincentivise KICs 
from implementing sound financial sustainability strategies. The expected leverage effect will 
continue to be undemonstrated. Finally, not responding to the recommendation of the Court of 
Auditors75 is not a justified option, so this solution is discarded. 

5.3.2.  Introduction of a 50/50 co-funding rate (discarded) 

In light of the 2015 decision of the Board, the subsequent recommendations of the High Level 
Group and the Court of Auditors, the data available, and the need to strengthen KIC partners 
contributions or other revenue sources, an alternative to the continuation of the current model 
is to consider the introduction of an explicit co-funding model to replace current practice.   

One  possibility  would  be  to  adopt  the  guidance  provided  for  institutionalised  European 
Partnerships  based  on  Articles  185  and  187  of  the  TFEU.  The  provisions  in  Annex  III  on 
Partnerships  of  the  Horizon  Europe  proposal  stipulate,  “the  financial  and/or  in-kind, 
contributions from partners other than the Union, will at least be equal to 50%”.76 The shift to 
such  a  funding  model  would  however  raise  a  number  of  serious  concerns  in  terms  of 
feasibility and the overall impact on the KIC.77   

While  it  can  be  assumed  that  co-funding  of  KICs  would  gradually  increase,  it  seems 
implausible that KICs would be able to adapt to a co-funding rate of 50% in the transition to 
the Horizon Europe framework as of 2021 onwards. Such a change in the funding model of all 
existing KICs would imply a far-reaching revision of all existing financial management and 
planning  practices.  Such  an  abrupt  change  would  need  to  be  agreed  by  all  KIC  partners 
putting  the  KIC  partnership  at  risk.  It  is  not  excluded  that  it  can  seriously  destabilise  the 
current structure which is based on existing guidance.  

75 ECA (2016), Performance report, p. 51 
76 See COM(2018) 435 final, Annex III, p.7. 

77 It is expected that the final HE Regulation will require the limit of 50% of EU financial contribution will apply only to institutionalised 
partnerships under Article 185 and 187 of the TFEU. 

28 

 
 
 
 
 
 
 
 
 
 
 
                                                            
In  addition, the  application  of  a  harmonised  co-funding  rate  of  50%  across  all  eight  KICs  - 
that are in very different stages of development - would disrupt all KICs and the entire KIC 
operation  model.  It  would  be  contradictory  to  the  guidance  provided  by  the  EIT  GB  which 
aimed to allow for some flexibility in preparing KICs better for financially sustainability with 
a decreasing rate of co-funding by the EIT.  

Moreover,  such  a  rate  would  not  provide  sufficient  incentives  to  any  new  KICs  to  apply  to 
upcoming calls or to the achievement of the financial sustainability goals by the current ones. 
In the case of new KICs, the obligation to co-fund 50% of the budget from the very beginning 
entails a clear risk of non-implementation, as partners would be more reluctant to engage in 
long-term partnerships that requires them to commit significant resources over up to 15 years. 
It is very likely that calls for proposals for future KICs would not attract interest under this co-
funding rate.  

Apart from the significant operational implications of a shift to a 50% co-funding model, the 
financial modelling in Annex 10 shows that even though attractive in theory in the short term, 
a co-funding rate of 50% would be a suboptimal solution in the long-term. Moreover, there 
are  significant  enforcement  issues  with  such  a  rate  that  may  prevent  partners  from 
participating in the activities, both for existing and new KICs.  

In  addition,  a  co-funding  of  50%  appears  more  suitable  for  research-industry  partnerships 
where  industrial  partners  have  a  core  interest  in  shaping  and  controlling  the  research  and 
development agenda. It seems however  less  suitable for a KIC that  includes  at its core also 
education  and  entrepreneurship  activities  that  aim  at  developing  skills  and  a  more 
entrepreneurial  culture.  Such  activities  are  traditionally  addressed  by  and  in  close 
collaboration with the education sector and are more difficult to fund from private sources.  

In  conclusion,  there  is  a  considerable  risk  that  a  co-funding  rate  of  50%  applied  across  all 
KICs may lead to premature termination of the activities of at least some KICs, while causing 
severe disruption in  all of them and preventing new ones  from starting. For this reason this 
option is discarded as well.  

5.3.3.  Introduction of a gradually decreasing EIT co-funding rate (retained) 

A  number  of  reasons  suggest  a  gradually  decreasing  EIT  co-funding  rate  would  be  an 
appropriate solution to the problem at hand.   

First, the establishment of EIT co-funding rates that would reflect the decision adopted by the 
Governing Board in 2015 and the needs of KICs across their different phases (start-up phase, 
ramp-up  phase,  maturity  phase,  exit  from  the  EIT  grant).  It  would  support  them  more 
effectively  towards  achieving  financial  sustainability  and  result  in  additional  economic 
benefits due to the significant investment made already.78 It would provide clarity on specific 
co-funding conditions for the different phases. This would result in higher planning security 
and  private  investment  in  KIC-supported  projects/sectors,  enabling  KICs  to  gradually  focus 
more on higher added-value activities and services they provide.  

Secondly, the introduction of a gradually decreasing rate of EIT co-funding would stimulate 
and  reward  performance  and  best  practice.  While  most  of  the  KICs  already  have  adequate 

78 See Annex 10 for details 

29 

 
 
 
 
 
 
 
 
 
 
                                                            
non-EIT co-funding rates, some of them do not. This is the case of two out of the three first 
generation KICs  (EIT  InnoEnergy at  9.7%  and  EIT  Climate-KIC  at  12.6%  in  2017)  despite 
them being fully mature and receiving a grant of around EUR 85 million and EUR 80 million, 
respectively for 2017. However, given the clear guidance of the Governing Board from 2015 
it  is  expected  that  their  performance  will  improve  between  2018  and  2020  (latest  data 
available  is  2017)  as  the  EIT  Governing  Board  has  raised  this  issue  with  the  KICs  in  its 
monitoring and supervision.  

A co-funding rate applicable to the KICs should reflect best performance and aim to increase 
the  performance  of  KICs  that  under-perform.  Based  on  the  KIC  development  model,  a 
decreasing funding rate would involve four phases. A start-up phase (years one to four) will 
involve the set-up of the organisational structure of the KIC, establishing its management and 
operational  structures  and  defining  the  short-term  business  strategy.  This  phase  will  be 
supported with up to 100% of the eligible cost within the available grant. This is necessary as 
the  KICs  build  up  their  operations  in  the  first  years  and  the  absolute  size  of  the  grant  is 
growing only over time (for example, EIT Health, launched in 2014, received the followings 
amounts: EUR 3.2 million  (2015); EUR 20.7 million (2016), EUR 34.2 million (2017) and 
EUR 57.7 million (2018)).79  

In the ramp-up phase (years five to seven) the KIC will consolidate its partnership structure 
and deliver on its mid-term business strategy. The EIT will support the KIC with up to 80% of 
the eligible costs, requiring the KIC to match at least 20% of the cost. In the maturity phase 
(years eight to eleven), the KIC will grow, expand and the EIT will support it with up to 70% 
of the budget. Finally, in line with the Governing Board principles for financial sustainability, 
during  the  exit  phase  (years  twelve  to  fifteen),  the  EIT  will  request  the  KIC  to  gradually 
increase its co-funding rate on an annual basis. The “exit from EIT grant” phase is in line with 
the guidance of the Governing Board that stipulated a decrease starting with 80% in year 11 
and thereafter progressive annual reductions: 60% in year 12, 40% in year 13, 20% in year 14 
and 10% in year 15”.80 The EIT will discontinue its annual grant to the KIC after year fifteen.  

The table below provides an overview of the proposed decreasing co-funding rate that adapts 
and formalizes the decision taken by the Governing Board.  

Start-up 

Ramp-up 

Maturity 

Exit from EIT grant 

Years 

1 – 4 

5 – 7 

8 – 11 

12 – 15 

EIT 
funding rate 

Co-

Up to 
100% 

Up to 80% 

Up to 70% 

50% at year 12, 
decreasing by 10% per 
annum 

Table 4: Overview of the proposed decreasing co-funding rate for the EIT grant; own illustration 

79 Internal data and reporting provided by the EIT to the European Commission.  
80 The same document stipulates “in year 11 and thereafter progressive annual reductions: 60% in year 12, 40% in year 13, 20% in year 14 
and 10% in year 15”. 

30 

 
 
 
 
 
 
 
 
                                                            
Unlike the Governing Board proposal of 2015, the proposed decreasing co-funding rate would 
ensure that co-funding is applied early on in the KIC operations (starting at year 5 instead of 
11),  thereby  significantly  increasing  the  commitment  of  the  partners  and  their  long-term 
planning security. The proposed EIT co-funding rate would gradually decrease over the years 
5  to  15  and  facilitate  the  KICs  transition  to  financial  sustainability,  rather  than  start  to  fall 
steeply after 10 years. All other things being equal, the proposed decreasing rate would also 
trigger higher private investment than the current GB proposal (see also Annex 10). Finally, 
such  a  co-funding  rate  reflects  well  the  best  performing  KICs  today  that  should  gradually 
become the benchmark.  

EIT co-funding rate, EIT expected annual grant and KIC 
co-funding in 15 years perspective 

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

90

80

70

60

50

40

30

20

10

0

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

EIT co-funding rate (%)

EIT co-funding (Meuro)

KIC co-funding (Meuro)

Figure 7: EIT co-funding rate, EIT expected grant and KIC co-funding in perspective; own projection  

The  adaptation  of  the  funding  model  would  increase  the  non-EIT  co-funding  share.  As  a 
result,  higher  private  investments  from  both  existing  KIC  beneficiaries  as  well  as  new 
partners investing in KIC-supported projects would be likely in the medium to the long term 
as  the  simulations  in  Annex  10  demonstrate.81  Furthermore,  the  adaptation  of  the  funding 
model is in line with the views of the majority of stakeholders expressed in the Open Public 
Consultation.  Securing  other  public  or  private  funding  for  the  operation  of  KICs  from  the 
outset was the most popular solution cited and supported by 64% of the respondents.   

81  The  simulation  results  in  Helsinki-Uusima  and  Noord-Brabant  regions  suggest  that  the  accelerating  of  the  private  investment  in  the 
medium- to long-run is the most effective when the increasing co-funding rate over time is applied (policy option 2) attracting annually EUR 
96.62 million and EUR 324 million respectively in 2035.  

31 

 
 
 
 
 
 
 
                                                            
The implications of changes to the funding model would be different for different waves of 
KICs:  

 First wave (three KICs launched in 2010): somewhat affected as the funding by the 
EIT will be discontinued after 2024 and Governing Board guidance from 2015 is broadly in 
line with current proposal. 

 Second and third wave (three KICs launched in 2014 and 2016): moderately affected 

since the change in the funding model would happen in the middle of their programming 
period. However, the KICs of 2014 and 2016 already now have a non-EIT co-funding rate 
of between 20 to 25 % which is in full compliance with the proposal.     

 Fourth wave (two KICs launched in 2018): no significant implications as they would 

start up their activities in 2019 and 2020 which would allow for smooth integration into any 
new funding model. 

 For any future KICs: no particular implications as they would be launched in the next 

programming period. 

Table 5: Implications of new co-funding model on KICs; own analysis 

The  theoretical  and  empirical  simulation  analyses  in  Annex  10,  point  to  the  overall  large 
potential  of  the  EIT  investment  support  to  leverage  additional  private  investment  into  KIC 
projects through gradually decreasing EIT co-funding rates. However this may also have an 
effect on the number of KIC partners and the membership. Higher KIC co-funding rates could 
imply fewer partners willing to participate and contribute to the operation of the KICs. Such a 
scenario  could  however  be  counterbalanced  with  appropriate  EIT  incentives  that  reduce  the 
financial, technology or market uptake risks of the potential KIC investors.   

A number of additional measures aimed at improving the efficiency of the funding allocation 
will  support  the  application  of  the  new  funding  model.  First,  a  comprehensive  and  in-depth 
review after seven years of KIC operations would be the opportunity for the EIT Governing 
Board to decide if a KIC has demonstrated adequate and expected results with the option to 
discontinue funding82. This  review would guarantee  transparency and would be in  line with 
the  guiding  principles  and  criteria  for  European  Partnerships  in  Horizon  Europe  and  best 
practice in the EU.83 

A possible challenge may emerge if there is non-compliance by the KIC with the non-EIT co-
funding rule. For this there are effective mitigation measures. Firstly, a KIC must respect the 
financial principle of the EIT when preparing their Business Plans (prepared and submitted in 
year  n-1),  necessitating  that  the  KIC  will  have  to  make  the  relevant  calculations  before 
proposing its Business Plan and requesting a budget to implement it.  Secondly, should a KIC 
still  have  difficulties  to  match  the  EIT  grant,  then  the  Governing  Board  could  reduce  the 

82 The possibility that the EIT Governing Board has of terminating a KIC should its results be inadequate is foreseen in the current EIT 
Regulation. The new EIT Regulation should include a clear reference to the 7-year review and the possible termination or suspension of 
funding.   

83  Cf.  the  review  process  of  the  Exzellenzinitiative  in  Germany  which  can  extend  the  status  of  an  “excellent  university”.  Deutsche 
Forschungsgemeinschaft, http://www.dfg.de/foerderung/programme/exzellenzinitiative/  

32 

 
 
 
 
 
 
                                                            
absolute  EU  contribution  to  a  level  that  the  KIC  can  match,  according  to  the  rules.  Such 
flexibility is currently possible and can be implemented through managerial measures.  

33 

 
 
 
 
 
5.4.  Description of policy options 

Three policy options are presented below: a baseline reflecting the continuation of business as 
usual; and two different options addressing the problems and technical issues identified in the 
impact assessment.   

The following graph presents comprehensively the intervention logic of all the Options 1, 2 
and 3. It is to be noted that the options are expected to achieve the outputs, results and impacts 
to a different extent (further developed in section 6). 

Figure 8: Intervention logic; own illustration 

5.4.1.  Option 1: Baseline  

The  baseline  option  represents  the  continuation  of  EIT’s  activities  as  they  are  today  with 
essential adjustments necessary to align it with the proposal for Horizon Europe.  The EIT’s 
activities  would  be  planned  and  implemented  to  maximise  synergies  and  complementarities 
with  the  actions  (clusters  and  missions)  under  the  Global  Challenges  and  Industrial 
Competitiveness  Pillar.  EIT  would  comply  with  implementation,  monitoring  and  evaluation 
criteria for European Partnerships.   
In addition, the EIT will develop synergies with the European Innovation Council in offering 
support  to  highly  innovative  ventures  in  both  start-up  and  scale-up  stages,  in  particular 
through KICs. In order to ensure alignment with the overall Horizon Europe proposal in terms 
of administrative rules, a simplification of rules would be pursued. 

34 

Direct support actions for entrepreneurial and innovation capacity development of Higher Education Institutions 8 existing KICs2 new KICs8 existing KICs1 new KICCreation of EIT hubs in all MS- Collaborative small scale projects for    knowledge triangle integration- Brokerage between KICs and regions- knowledge triangle integration services (business support, education)Businesses involved in EIT activitiesRegional actors in Europe involved in EIT activitiesHEIs  involved in EIT activitiesStart-ups supported by EITIncreased knowledge sharing and networking in innovation ecosystems involving more actors at regional level Increased quality of entrepreneurial higher educationReduction in skills mismatches in key sectorsEffective and efficient new businesses creationIncreased innovation capacity in EuropeMore entrepreneurial and innovative European higher education; Improved human capital and talent for innovation   Budget85 %15 %Budget70 %30 %KIC activitiesEIT activitiesACTIVITESOUTPUTSRESULTSIMPACTSStudents involved in EIT activitiesDedicated EU financial, human and organisational resources to EIT as part of Horizon Europe; KICs as organisations performing activities and networks of HEIs, businesses, research and civil society; EIT as organisation performing horizontal activities beyond the remit of KICs; INPUTNew products, services or processes on the marketKICs co-fundingSuboptimal KIC funding modelLimited impact of EITs regional outreach Limited impact of EIT education activities Technical issuesIncrease the impact of KICs and knowledge triangle integrationIncrease regional outreach of EIT and address regional disparities in innovation capacity across the EUIncrease innovation and entrepreneurial capacity of higher education institutions in EuropeImprove operational effectiveness and efficiency of EIT ISSUESOBJECTIVESOPTION 2OPTION 38 existing KICs2 new KICsBudget97 %OPTION 1Basic coordination- EIT RIS- EIT Label3 % 
 
 
 
 
 
 
 
 
The EIT and the KICs would keep their current model and continue business as usual. The 
EIT would continue to operate only through KICs. The role of KICs as drivers of innovation 
ecosystems in specific fields and the EIT as primarily a grant management agency would not 
change. The funding model of KICs would stay unchanged. Horizontal activities, such as the 
EIT Label or the EIT Alumni would continue operating on their current basis. The Regional 
Innovation Scheme (EIT RIS), would continue to be performed on a voluntary basis and its 
activities would not be part of a KIC’ overall strategy.  

No  new  actions  would  be  launched  by  the  EIT  to  further  address  education  and  regional 
aspects as part of the baseline.  

In line with the EIT Regulation, the first three KICs84 would cease to receive EIT financial 
support  after  2024.  The  five  KICs85  that  started  operations  between  2015  and  2019  would 
reach maturity in the new programming period.   

Within  the  proposed  budget  of EUR 3 billion and based on the current  funding  model,  two 
new KICs would be launched within the timeframe of 2021 – 2027, the first in the field of 
Culture  and  Creative  Industries  (CCI),  the  second  on  a  theme  to  be  defined  taking  into 
account the Horizon Europe Strategic Planning exercise.  

In  terms  of  budget,  Option  1  would  represent  a  continuation  of  the  current  distribution  of 
budget  between  KIC  activities,  the  EIT-driven  activities  and  the  EIT  administrative  budget, 
i.e.  97%  of  the  budget  for  the  grants  to  KICs  and  the  rest  divided  between  the  EIT-driven 
activities and its administrative budget. No changes would be made to the EIT staff provisions 
and duration of staff contracts.   

2021 

2022 

2023 

2024 

2025 

2026 

2027 

Total 

Admin budget 

6 

7 

7 

7 

7 

7 

7 

48 

KIC-related expenditure 

401 

388 

424 

427 

424 

435 

431 

2930 

EIT-driven activities 

2 

2 

3 

3 

4 

4 

4 

22 

Total EIT Budget 

409 

399 

437 

441 

439 

446 

444 

3000 

Table 6: Indicative budget under option 1 (MEUR); own illustration 

5.4.2.  Option 2 

Option  2  builds  on  the  baseline.  In  addition  to  the  essential  adjustments  necessary  to  align 
with the proposal for Horizon Europe, (=baseline), it adopts a number of technical measures 
to enhance the functioning of the EIT. Synergies with the proposal for Horizon Europe will 
be similar to those under the baseline. 

Option 2 introduces a new EIT action in order to address its specific objectives in the fields 
of  education  and  regional  outreach.  The  main  defining  feature  of  this  action  would  be  the 
direct  support  action  for  entrepreneurial  and  innovation  capacity  development  of  Higher 

84 EIT InnoEnergy, EIT Digital, EIT Climate-KIC 
85 EIT Food, EIT Health, EIT Raw Materials, EIT Manufacturing, EIT Urban Mobility 

35 

 
 
 
 
 
 
 
 
 
 
 
                                                            
level 
Education  Institutions  (HEIs).  In  addition,  complementarities  with  other  EU 
programmes (e.g. ERDF, Erasmus+) or national programmes and funding instruments would 
increase.   

The  EIT  would  adapt  its  funding  model  and  implement  a  gradually  decreasing  EIT  co-
funding rate, as described in section 5.2. Another important aspect of this Option would be the 
introduction of a long-term planning perspective of innovation activities (multiannuality). In 
order  to  address  technical  issues  hampering  its  functioning,  the  EIT  would  also  adapt  its 
governance model and improve openness, transparency and collaboration.  

The Regional Innovation Scheme will be further strengthened by integrating it fully in the 
KIC Business Plans and making it a core activity of the KIC with an increased budget.  

A substantial number of stakeholders in the Horizon Europe consultations referred to the role 
of  the  EIT  in  Horizon  Europe  in  bridging  R&I  instruments  with  support  to  higher 
education.86 The EIT will simplify the EIT labelling process, extending it to a wider lifelong 
learning  perspective  and  to  external  quality  assurance.87  In  order  to  address  its  specific 
objectives,  the  EIT  would  launch  a  new  support  and  coordination  action  aimed  at 
supporting  the  development  of  entrepreneurial  and  innovation  capacity  of  HEIs.  This 
action will build on HEInnovate, a proven concept developed by the Commission and OECD. 

HEInnovate is a policy framework of the Commission and the OECD launched in 2013, that 
offers (1) a methodology for HEIs to develop their innovation and entrepreneurial capacities  
and  (2)  a  methodology  to  Member States  to  review  their  higher  education  systems.  To  date 
more  than  1000  HEIs  have  used  HEInnovate  and  a  number  of  Member  States  have  hosted 
HEInnovate policy reviews by OECD.88 This demand suggests that there is a strong need in 
HEIs to develop their innovation and entrepreneurial capacity in a structured and systematic 
way. However, tn the current programming period (2014-2020) the use of HEInnovate is not 
linked to any funding support.  

Given  its  experience  in  the  knowledge  triangle  integration  that  directly  supports  innovation 
capacity  development  the  EIT  is  uniquely  positioned  to  implement  an  action  aimed  at 
supporting  the  development  of  entrepreneurial  and  innovation  capacity  of  HEIs.  The  action 
would integrate the HEInnovate methodology of the Commission and the OECD and would 
fund  entrepreneurial  and  innovation  capacity  development  in  HEIs.  The  new  support  and 
coordination action would include the following elements:  

86 E. Griniece and M. Muizarajs (2018), Synthesis of stakeholders input for Horizon Europe, p. 62.  
87 Such an approach could build on e.g. the ‘European Innovation Associate’ pilot (DG GROW) –a test to establish a SME-driven scheme to 
attract foreign recent PhD graduates (or PhD graduate returnees to their countries of origin) to R&I posts in small innovative enterprises, or 
the toolbox initially developed for the EC and now operated by the ‘European Innovation Management Academy’ in Düsseldorf, Germany 
(www.improve-innovation.eu )   
88 Five Member States (NL, IE, HU, PL, BG) completed an OECD review and four (IT, AT, CR, RO) are currently undergoing one.  

36 

 
 
 
 
 
 
 
                                                            
 Support the entrepreneurial and innovation capacity development in HEI in the 
following HEInnovate dimensions: Leadership and Governance; Digital Transformation; 
Organisational Capacity; Entrepreneurial Teaching and Learning; Preparing and 
Supporting Entrepreneurs; Knowledge Exchange; Internationalisation; and Measuring 
Impact.   

 Transferring innovation and entrepreneurial know-how between HEIs, by networking 

partners established in one region with HEIs established in other regions;  

 Bringing innovative HEIs from across the EU closer to KICs stakeholders 
communities and the EIT RIS stakeholder communities and connect local HEIs to 
European value chains in which KICs are involved; 

 Entrepreneurial and innovation capacity building services - including business support 

services, entrepreneurial education;  

 Support synergies and alignment between different EU programmes contributing to 

innovation capacity; 

Table  7:  Overview  of  new  action  supporting  the  entrepreneurial  and  innovation  capacity  of  HEIs;  own 
illustration 

The  EIT  would  implement  the  aforementioned  action  through  annual  calls  and  a  dedicated 
budget. The calls would support collaborative projects comprising consortia of a minimum of 
three  HEIs.89  The  EIT  would  provide  specific  guidance,  expertise  and  coaching  to 
participating  HEIs  and  develop  evidence  on  best  practices  and  share  it  with  the  wider 
innovation community.   

Bridging  regional  disparities  will be  a  significant  part  of  the  new  action  as  the  EIT  would 
particularly  target  HEIs  from  modest  and  moderate  innovator  countries  to  help  them 
strengthen the regional innovation footprint and smart specialisation strategies of their HEIs. 
The  EIT  would  allocate  at  least  25%  of  the  overall  budget  of  the  action  (around  EUR  420 
million) to projects led by a partner from a modest or moderate innovator country.  The open 
nature of the calls (open to all HEIs) and the widening dimension will reach out to as many 
institutions from modest and moderate innovator countries as possible.  

Within the proposed budget of Euro 3 billion and based on the introduction of a co-funding 
model that aims to increase private investment from KIC, Option 2 would see two new KICs 
launched within the timeframe of 2021-2027, the first on Cultural and Creative Industries and 
a  second  on  a  theme  to  be  decided  by  taking  into  account  the  future  Strategic  Planning 
Process. In line with the EIT Regulation, the first three KICs (launched in 2010) would cease 
to receive EIT financial support after 2024. 

89 The specific rules for setting up consortia will be in compliance with the relevant rules of Horizon Europe programme.  

37 

 
 
 
 
 
 
 
                                                            
The more efficient funding of KIC through the decrease of EIT co-funding will result in the 
EIT being able to launch EIT-driven activities within its proposed budget. The distribution of 
budget between KIC activities, EIT-driven activities and EIT administrative budget would be 
as  follows:  83%  of  the  budget  for  the  grants  to  KICs  and  the  rest  split  between  EIT-driven 
activities (15%) and administrative budget (1.8%). 

2021 

2022 

2023 

2024 

2025 

2026 

2027  Total 

Admin budget 

10 

10 

10 

10 

10 

10 

10 

70 

KIC-related 
expenditure 

342 

335 

367 

370 

366 

374 

360 

2513 

EIT-driven activities 

19 

36 

56 

66 

79 

76 

85 

417 

Total EIT Budget 

371 

381 

432 

445 

454 

464 

454 

3000 

Table 8: Indicative budget under option 2 (MEUR); own illustration 

5.4.3.  Option 3    

Similar to option 2, option 3 builds on the baseline, adopts essential adjustments necessary to 
align with the Horizon Europe proposal and develop synergies with it, and includes the same 
co-funding model and technical measures to enhance the functioning of EIT as option 2.  

Option 3 differs from option 2 in that it would introduce a new activity of setting up a EIT 
Hub  in  each  Member  States  in  order  to  address  the  limited  impact  of  the  EIT’s  regional 
outreach  activities,  instead  of  the  support  and  coordination  action  aimed  at  supporting  the 
development of entrepreneurial and innovation capacity of HEIs proposed in option 2.  

The  EIT  Hubs  in  the  Member  States  would  build  on  and  gradually  absorb  the  current 
Regional Innovation Scheme of the EIT. The EIT would directly implement the EIT Hubs to 
foster knowledge triangle integration, for example, via support for collaborative projects on a 
smaller  scale  than  KICs.  The  projects  would  include  partners  from  higher  education, 
research and business. The EIT Hubs would also serve as a broker between the existing KICs 
and the needs of the local innovation community of the Member States and regions.  

The EIT Hubs would ensure pro-active engagement with beneficiaries, development of local 
ecosystems as well as provision of services and small-scale grants to the beneficiaries, based 
on  transparent  criteria.  They  would  also  facilitate  the  management  of  knowledge  triangle 
projects  targeting  regions  where  they  operate.  The  EIT  Hubs  would  serve  the  following 
functions: 

38 

 
 
 
 
 
 
 
 
  
 Brokerage between KIC activities and local partners and support cross-KIC 

collaboration in connecting to local partners 

 Bringing the KICs stakeholders communities and the RIS stakeholder communities 

closer together, as well as support collaboration between European Structural and 
Investment Funds (ESIF) managing authorities and KICs and connect stakeholders to 
European value chains in which KICs are involved 

 Managing annual grants in support of knowledge triangle integration for collaborative 

projects, including business support services, entrepreneurial education;  

 Transferring expertise and know-how between KIC and regions, by networking 

partners established in one region with EIT Hubs established in other Member States; 

 Establishing links between local actors including innovation agencies, KICs and 
related R&I Initiatives, notably Strategic Value Chains, European partnerships, other EU-
funded initiatives like Digital Innovation Hubs;  

Table 9: Overview of EIT Hubs activities; own illustration 

The EIT would manage the Hubs in all Member States90. The Hubs would support small-scale 
knowledge  triangle  integration  projects  between  at  least  one  HEI,  one  business  and  one 
research  organisation  from  at  least  3  countries8989.  A  particular  emphasis  will  be  put  on 
developing effective collaboration between HEIs and businesses as this is usually the weakest 
link in innovation projects. The EIT would provide specific guidance, expertise and coaching 
to  participating  organisations  and  develop  evidence  on  best  practice  and  share  it  with  the 
wider  innovation  community.  The  EIT  would  allocate  around  EUR  800  million  of  the  total 
budget to this action.  

In terms of budget implications, Option 3 would foresee 70% of the budget for the grants to 
KICs  and  the  rest  would  be  split  between  EIT-driven  activities  (27%)  and  administrative 
budget (3%).  Only one new KIC would be launched during the next programming period, on 
the theme of Cultural and Creative Industries. In line with the EIT Regulation, the first three 
KICs launched in 2010 would cease to receive EIT financial support after 2024. 

2021 

2022 

2023 

2024 

2025 

2026 

2027 

Total 

Admin budget 

8 

12 

12 

13 

14 

15 

16 

90 

KIC-related 
expenditure 

290 

281 

307 

308 

307 

311 

298 

2100 

EIT-driven activities 

37 

76 

111 

129 

139 

158 

160 

810 

Total EIT Budget 

334 

361 

426 

447 

464 

489 

477 

3000 

Table 10: Indicative budget under option 3 (MEUR); own illustration 

90 In Hungary as the EIT wwouldassume this role through its headquarters based in Budapest 

39 

 
 
 
 
 
 
 
 
                                                            
5.4.4.  Inputs of options  

The following table summarises the inputs to the presented options:  

EIT administrative budget (mio EUR) 

EIT funding to KICs (mio EUR) 

Maximum number of KICs active during SIA 

Budget for EIT-driven activities (mio EUR) 

EIT Hubs in EU Member States91 

Table 11: Inputs of discussed options; own illustration 

5.4.5.  Key features of options  

Option 1 
(baseline) 

Option 2 

Option 3 

48 

2930 

10 

22 

0 

60 

90 

2500 

2100 

10 

440 

0 

9 

810 

26 

The following table summarises the key features of the presented options:  

Issue 

Option 1 (baseline) 

Option 2 

Option 3 

Number of KICs 

 8 existing KICs 
 2 new KICs 

 8 existing KICs 
 2 new KICs 

 8 existing KICs 
 1 new KIC 

Alignment with Horizon 
Europe 

 synergies 

with 
partnerships,  missions, 
EIC 

 Same as option 1 

 Same as option 1 

Technical issues 
(openness and 
transparency; 
governance) 

 No changes 

Funding model  

 No changes 

New actions addressing 
problems on limited 
impact of education and 
regional outreach  

 None 

 adaptation 
governance 

to 

 measures 
openness 
transparency 

of 

 Same as option 2 

increase 
and 

 New 
based 
on 
decreasing 
rate  

funding  model 
gradually 
co-funding 

 New  action  to  support 
for 
and 
capacity 

actions 
entrepreneurial 
innovation 
development of HEIs 

 Strengthening 

of 
Innovation 

Regional 
Scheme 

 Same as option 2  

 New  action  to  create 
EIT  Hubs  in  Member 
support 
States 
to 
small 
collaborative 
for 
scale 
knowledge 
triangle 
integration 

projects 

 Strengthening  of  EIT 

Label 

Table 12: Key features of options, own illustration  

 Strengthening  of  EIT 

Label  

91 Hubs would operate in all Member States except Hungary and the United Kingdom following its expected withdrawal in 2019.  

40 

 
 
 
 
 
 
 
 
 
 
                                                            
6. 

IMPACT OF POLICY OPTIONS 

The  following  section  contains  a  qualitative  and  quantitative  assessment  of  the  main 
economic, societal and innovation impacts identified in areas where the options are likely to 
have effects. The projections of future performance are based on past data reported by the EIT 
using  existing  performance  indicators.  The  accuracy  of  forecasts  based  on  historical  data  is 
limited but considered the best method to assess the results of the KICs. While undertaking 
such an assessment ex-ante, it is important to remember that the EIT operates in the dynamic 
and  evolving  innovation  landscape.  The  novel  character  of  the  EIT  and  the  knowledge 
triangle  integration  model  suggest  that  its  impacts  are  gradually  evolving  and  can  only  be 
demonstrated in the long-term.  

6.1.  Option 1: Baseline 

The EIT would continue to support KICs and build innovation ecosystems across the EU. 
The first three KICs, launched in 2010, will cease to receive an EIT grant after 2024 (in line 
with  the  maximum  duration  for  support  provided  by  the  EIT  to  KIC)  while  one  new  KIC 
would be set up in 2022 and a second in 2025.  

Synergies and complementarities with other EU programmes and funding instruments would 
increase due to the closer alignment with Horizon Europe, and in particular Pillars II and III.  
Consequently,  the  overall  effectiveness  in  spending  public  money  on  innovation  would 
improve  although  its  quantification  is  not  available.    The  presence  of  the  EIT  will  remain 
concentrated in a limited number of Member States (see below). More than half of the EIT 
co-location centres (CLC) are placed in 6 countries, while only six CLCs out of 51 in total are 
located in moderate and modest innovator countries.  

EIT Co-location Centres (CLCs) of the EIT, 2018  

8
7
6
5
4
3
2
1
0

Figure 9: Co-location centres of the EIT as of 2018; EIT data 

In  the  absence  of  effective  transparency,  openness  and  collaboration  measures,  activities  of 
the  EIT  would  remain  limited  to  the  KICs'  partners.  No  significant  diversification  of  the 
partnership  is  expected  in  the  absence  of    a  change  in  the  approach  towards  openness  and 
transparency.  

41 

 
 
 
 
 
 
 
 
No  enhancement  of  SME  participation  is  expected  in  this  option  as  there  would  be  no 
particular incentives for SMEs in place.  

Concentration  of  funds  would  be  unlikely  to  change,  in  line  with  the  current  trends,  with 
around  73  %  of  the  total  budget  concentrated  in  partners  from  five  countries  (see  problem 
definition, page 16).  

The  establishment  of  the  EIT  with  the  KICs  and  their  co-location  centres  were  directly 
responsible for approximately 430 FTE direct jobs in 2016 (with a portfolio of 5 KICs, two of 
which only starting) across the EU.92 Based on this data, and a portfolio of 10 mostly mature 
KICs between 2021-2027, it is estimated that the number of equivalent FTE in the EIT and 
KICs would reach 1000.  

Data  reported  from  the  three  first-wave  KICs,  suggests  that  they  have  supported  start-ups, 
scale-ups and business ventures that have created around 6,100 jobs93 by 2016. Building on a 
portfolio of up to 10 KICs between 2021 and 2027, it is assumed that the number of indirectly 
created jobs will more than double, i.e. around 12,000 jobs will be indirectly created.  

The structure of the KIC with regard to the type of partners and their overall weight would not 
be expected to change.  

Around  300  HEIs  would  continue  to  be  part  of  the  EIT  Community  as  KIC  partners,  with 
some fluctuations over the years due to the cessation of the EIT grant to the first generation of 
KICs  after  2024  and  the  set-up  of  two  new  KICs  during  the  Horizon  Europe  programming 
period.  

With additional and more mature KICs, opportunities for knowledge transfer would increase 
proportionately.  Based  on  past  performance,  it  is  estimated  that  between  2021-2027  around 
3500 new products, services or processes would reach the market.94   

It  is  estimated  that  over  2021-2027  around  10,000  students  would  participate  in  EIT 
education  activities  through  the  EIT  label  and  adjacent  activities,  which  would  equip  them 
with solid entrepreneurial and innovation skills. It is likely that a part of them would become 
entrepreneurs  and  attract  economic  activity  to  regions  where  they  are  based,  meaning 
agglomeration  effects  would  continue.  Currently,  the  ratio  of  student-to-entrepreneur  in  the 
EIT  is  around  1.8%,  meaning  some  200  start-ups  could  be  created  by  students  (8  start-ups 
created  by  EIT  students  in  2017).  Together  with  the  start-ups  created  as  a  result  of  KIC 
innovation projects, the number of start-ups supported by the EIT would reach almost 400. 

The impacts described above would be visible across all the sectors in which KICs operate, 
though  to  different  extents:  the  most  significant  impacts  would  be  observed  in  the  areas  of 
health,  raw  materials,  food,  urban  mobility,  and  added-value  manufacturing  as  the  KICs 
addressing these priority fields would all reach maturity during 2021-2027. The impacts of the 
first  generation  of  KICs  (EIT  Climate-KIC,  EIT  InnoEnergy  and  EIT  Digital)  would  be 
expected to remain. The impacts of new KICs would be visible mainly in the field of Cultural 
and Creative Industries – to be launched in 2022.  The impact of the second KIC, if launched 
as expected around 2025, would be marginal during the Horizon Europe programming period.  

92 EIT (2017) Our Impact, p. 4, available at https://eit.europa.eu/sites/default/files/11983-eit-2017_our_impact_from_2010_to_2016.pdf 
93 Ibid. 
94 See output table at the end of this section 

42 

 
 
 
 
 
 
 
 
 
                                                            
Students  participating  in  EIT  education  activities  would  continue  to  acquire  entrepreneurial 
competences,  and  have  high  employability  rates  95.  However,  the  systemic  impact  of  EIT 
educational  activities,  i.e.  beyond  the  direct  KIC  partners  and  beneficiaries,  would  remain 
restricted due to the lack of external quality assurance and limited visibility of the EIT Label.  

There  would  be  no  changes  in  the  funding  model.  The  yearly  reporting  of  the  KIC 
complementary activities, both in the Business Plans and in the financial reports submitted by 
the KICs would continue to add significant administrative burden with no added value. The 
absence  of  clear  rules  for  external  co-funding  will  result  in  missed  efficiencies  and  lost 
opportunities to establish stronger incentives for financial sustainability.  

Option 1 would mean a continuation of EIT administrative expenditure at current levels (EUR 
48  million  over  7  years)  in  line  with  the  overall  budget  increase  of  the  EIT  over  the 
programming  period  of  seven  years  arising  from  staffing.  Within  this  option,  the  staff 
provisions of the EIT and  duration of staff contracts would not be amended.   

6.2.  Option 2 

The EIT would continue to support KICs and build innovation ecosystems across Europe. The 
key results of KIC activities (EIT Label graduates; start-ups created by EIT; new products and 
services on the market) would be broadly similar to the baseline given that the number of new 
KICs will be the same. However, there would be a number of efficiency gains resulting from 
the improvements related to the technical issues and the introduction of a co-funding model.   

Establishing clearer implementation measures and tools regarding openness, transparency and 
collaboration  would  facilitate  access  to  KIC  and  CLCs96  and  improve  the  interaction  with 
partners. This would be particularly the case for partners from modest and moderate innovator 
countries or SMEs. This would increase the likelihood of new CLCs in modest and moderate 
innovator  countries  for  both  existing  and  new  KICs.  While  difficult  to  estimate  an  absolute 
result, it is likely that the number of the CLC in modest and moderate innovator countries will 
at least double. 

The  integration  of  the  Regional  Innovation  Scheme  in  the  KICs  multi-annual  strategies  and 
Business  Plans  would  increase  the  effectiveness  of  EIT’s  regional  outreach.  Assigning  a 
higher budget to the RIS activities from the current average of 4.3% to at least 10% will also 
increase their impact. Stronger impact would be expected to materialise in those countries and 
regions that are moderate and modest innovators as the number of organisations engaged with 
KICs  would  grow  and  their  activities  would  increase  due  to  increased  knowledge  and 
technology transfers linked to a stronger EIT regional focus.97   

Improving the functioning of the EIT governance would have a generally positive effect for 
the function of the EIT and the KIC in terms of effectiveness and efficiency.  

95 See Annex 4  
96 EIT RIS innovation hubs could be seen as embryonic CLCs in RIS-eligible countries, directly sharing and disseminating KIC knowledge 
and know-how to local knowledge triangle stakeholders. 
97 Liang J. and Goetz, S. (2018), “Technology intensity and agglomeration economies”, Research Policy 47, pp. 1990–1995; see also: Apa, 
Noni,  Orsi  and  Sedita  (2018),  “Knowledge  space  oddity:  How  to  increase  the  intensity  and  relevance  of  the  technological  progress  of 
European regions”, in Research Policy 47, pp. 1700–1712  

43 

 
 
 
 
 
 
 
  
 
 
                                                            
The  change  in  the  funding  model  would  mean  annual  reporting  of  the  KIC  complementary 
activities  would  no  longer  be  necessary,  resulting  in  significant  reduction  of  administrative 
burden. The information obligations arising from the KIC grant agreements (i.e. declaration of 
costs  of  associated  activities)  with  its  intention  to  show  the  financial  commitment  of  KIC 
partners  and  its  leverage  effect  will  become  redundant  with  the  introduction  of  the  new  co-
funding model for KICs. The alleviation of such a requirement on the side of the EIT as well 
as KICs and their partners will ease their resources for other tasks and improve the efficiency 
of the KICs operations.  

The introduction of explicit conditions for co-funding will lead to stronger private investment 
and external involvement. Specifically, between EUR 1500 and 1800 million in co-funding is 
expected to be generated. This would reflect the preferences of the majority of stakeholders in 
the OPC who expressed their support to co-funding. Commitment from partners would further 
increase  the  likelihood  of  KICs  to  achieve  financial  sustainability  in  the  long-run  as  the 
number of their stakeholders will grow. KICs are expected to adjust to the new funding model 
as  most  of  them  already  have  significant  co-funding.  Greater  openness  and  stronger 
performance  monitoring  by  the  governing  board  would  contribute  to  raising  the  overall 
efficiency of the KIC model. In the case of difficulties for some KICs (for example the first 
generation that will stop to receive an EIT grant after 2024), the EIT Governing Board could 
introduce transitory measures.  

The  introduction  of  a  long-term  planning  perspective  of  innovation  activities  and  the  move 
away from the current annual granting scheme (annuality) would imply that KICs would offer 
greater legal and financial security for KIC partners. It would also consolidate the innovation 
activities  in  line  with  the  multiannual  strategies  adopted  by  the  KIC.  It  would  ease  the 
administrative burden by reducing the annual reporting and would facilitate the assessment of 
the  KIC  performance  over  the  long  term.  Generally,  it  would  help  to  ensure  business 
continuity.  

The  number  of  start-ups  generated  would  not  necessarily  increase  in  linear  terms  in  2021-
2027,  compared  to  the  baseline.  However,  the  higher  private  investment  and  external 
participation would improve the general quality of new business creation. While difficult to 
quantify, some efficiency gains are expected in terms of survival rates of start-ups and higher 
commercialisation of ideas and technological maturity (TRL98).   

Compliance and implementation costs arising from the adaptation of the funding model would 
be  expected  to  be  higher  for  those  KICs  and  their  partners  that  would  have  to  adjust  their 
established  processes  and  operation  systems,  and  relatively  low  for  those  that  are  at  the 
starting phase and establishing their operation modes. However, given that most KICs already 
attract  co-funding,  the  measure  would  likely  increase  on  average  the  performance  across 
KICs, as those lagging behind would need to accelerate their efforts in attracting co-funding 
and catch up with best practice or risk correction measures requested by the EIT Governing 
Board.  

The impacts described above will be visible across all the sectors that KIC operate in with the 
most  significant  impacts  in  the  areas  of  health,  raw  materials,  food,  urban  mobility,  and 
added-value manufacturing as the KICs addressing these priority fields will all reach maturity 
during 2021-2027.  

98 Technology Readiness Level (TRL) – a method of estimating technological maturity and capability. 

44 

 
 
 
 
 
 
 
                                                            
Impact of the new Action on supporting the entrepreneurial and innovative capacity of HEIs 

institutions,  disciplines,  countries  and  regions99.  The  social 

On top of the KIC results, the impact of the EIT would be distinctive as a result of the new 
actions that the EIT would launch to support the innovative capacity of HEIs. The new EIT 
actions  would  spread  best  practice  and  help  create  a  community  of  entrepreneurial  HEIs 
across 
the 
entrepreneurial transformation of higher education through this measure would be reflected by 
the involvement of staff, students and institutions. Providing funding for innovation capacity 
development of HEIs is the most popular suggestion among the OPC respondents in order to 
achieve the educational policy objective for the EIT.   

impact  of 

As a result of the action, around 450 HEIs and more than 20,000 students would be expected 
to  participate  in  HEInnovate-driven  in  capacity  development  actions.  Entrepreneurial  and 
intrapreneurial100 activities in the participating HEIs would lead to higher levels of economic 
activity, particularly in modest and moderate innovator countries, given the open nature of the 
annual  calls  and  the  earmarked  budget  (25%  of  the  action  budget  would  be  allocated  to 
projects  led  by  partners  from  modest  and  moderate  innovator  countries).  The  illustration 
below provides an overview of the key assumptions behind this actions.  

 Total budget of this action is around 420 Million, or 60 Million per year 

 Annual calls for projects including at least 3 HEIs and an average budget of max EUR 

3 million per project  

 Each HEI will involve at least 50 students in the capacity building action 

 23 projects per year leading to ~150 projects in total (2021-2027) 

 150 projects with at least HEIs each means 450 HEIs (involving at least 50 students 

each) means at least 22500 students (2021-2027) 

 At least 25% of projects would directly involve partners from moderate and modest 

innovator countries, i.e. 25% of 450 HEIs, or ~110 HEIs 

 Overall participants from moderate and modest innovation countries, i.e. 200 (current 

RIS) and 200 (future RIS) and at least 110 (HEIs projects) 

Table 13: Assumptions behind new action supporting the innovative capacity of HEI; own illustration 

It  is  realistic  to  assume  that  at  least  15%  of  all  EU  HEIs  would  be  reached  through  the 
HEInnovate capacity development actions (450 in total over 7 years from around 3300 HEIs 
in the EU) over the 7 years.  The impacts would be visible in both economic and social terms 
through  teaching,  research,  and  entrepreneurial  activities.101  More  specifically,  there  is 
evidence that scientific productivity is positively associated with entrepreneurial effectiveness 

99  E.g.  HEinnovate  country  reviews  which  demonstrate  the  importance  and  the  challenge  for  HEIs  to  develop  their  entrepreneurial  and 
innovation capacity. The reports show that pioneering initiatives emerge in a number of HEIs, but need to be broader, more systematic and 
taken forward by HEI leaders in collaboration with key stakeholders. The reviews are available at www.HEInnovate.eu.   
100 Intrapreneurship is the act of behaving like an entrepreneur while working within a large organisation. 

101 Jacob, M et al. (2003) : “Entrepreneurial transformations in the Swedish University system: the case of Chalmers University of 
Technology”, in: Research Policy 32, pp.  1555–1568.  Also Guerrero, M., Cunningham, J. and Urbano, D., (2015), “Economic impact of 
entrepreneurial universities’ activities: An exploratory study of the United Kingdom”, in Research Policy, Volume 44, Issue 3, April 2015, pp. 
748-764 

45 

 
 
 
 
 
 
                                                            
so  participating  HEIs  could  be  expected  to  increase  their  scientific  production  levels.102  
Finally,  raising  awareness  about  the  entrepreneurial  capacity  of  an  HEI  is  crucial  because 
perceiving an HEI as having a low or high entrepreneurial capacity has an important effect on 
whether  an  academic  engages  in  entrepreneurial  activities,  thus  influencing  the  overall 
entrepreneurial aptitude of academics.103 

Together with the new action, the impact of the existing EIT Label, which is awarded to the 
KIC  education  programmes,  would  increase  via  stronger  quality  assurance  mechanisms 
including  external  reviews.  This  would  positively  influence  the  recognition  of  the  label 
outside the EIT community.  

Synergies and complementarities with other EU programmes and funding instruments would 
increase  due  to  closer  alignment  with  the  proposal  for  Horizon  Europe,  and  in  particular 
Pillars II and III104.  In addition, strong cross-over synergies and complementarities would be 
expected to emerge between the Horizon Europe and the Erasmus+ programme as a result of 
the  scaling  up  of  the  action  supporting  the  innovation  capacity  of  HEIs  by  the  EIT.  In 
budgetary terms, Option 2 would mean a re-balancing of the expenditure of the EIT back to 
around one-third of the total budget allocated to education (currently, only 17% of the KIC-
related  expenditure  are  spent  on  education,  this  would  increase  to  around  31%  with  the 
proposed action under Option 2). 

Compared  to  the baseline  scenario, Option  2 would mean  an increase  in EIT administrative 
costs  (EUR  70  million  compared  to  the  EUR  48  million  baseline)  in  line  with  the  overall 
budget increase of the EIT over the programming period of seven years arising from staffing 
and  setting  up  a  stronger  capacity  and  expertise  in  the  EIT.  This  increase  appears 
commensurate with the overall growth of activities and responsibilities of the EIT. Within this 
option, the staff provisions and duration of staff contracts of the EIT would be aligned with 
those of other agencies in order to ensure the continuity of the EIT operation. 

6.3.  Option 3 

The  EIT  would  continue  to  support  KICs  and  build  innovation  ecosystems  across  Europe. 
Within the given budget distribution of this option only one KIC could be launched (in 2022). 
The  key  results  of  KIC  activities  (EIT  Label  graduates;  start-ups  created  by  EIT;  new 
products and services on the market) would be broadly similar to Options 1 and 2. 

Impacts  resulting  from  the  introduction  of  clearer  rules  for  transparency,  openness  and 
collaboration would be similar to those under Option 2. The effect from the adjustments in the 
governance  of  the  EIT  would  be  similar  to  those  under  Option  2  with  the  exception  of 
introducing  relevant  governance  provisions  for  the  implementation  of  the  new  Action 
described  below.  Compliance  and  implementation  costs  arising  from  the  adaptation  of  the 
funding model would be similar to those under Option 2.   

102 Van Looy, B., (2011), “Entrepreneurial effectiveness of European universities: An empirical assessment of antecedents and trade-offs”, 
in Research Policy 40, pp. 553–564.  

103 Kalar, B. and Antoncic, B., (2015)  “The entrepreneurial university, academic activities and technology and knowledge transfer in four 
European countries”, in Technovation 36-37, pp. 1–11. 
104 E.g. it is expected that EIT actions will better contribute to 35% of the overall financial envelopes to climate 
objectives within the Horizon Europe. 

46 

 
 
 
 
 
 
 
 
                                                            
Impact of new EIT Hubs-related action  

The  most  significant  differences  in  terms  of  impact  under  Option  3  would  be  linked  to  the 
creation of the EIT Hubs.  

This option would have a high impact on the management and governing bodies of the EIT.  
It  would  have  significant  implications  in  terms  of  human  resources,  budget  and  task 
allocations.  High  administrative  overhead  costs  for  the  EIT  would  arise  from  setting-up, 
staffing and developing EIT Hubs, ensuring quality of services provided, allocation of funds 
to these hubs as well as reporting to the EIT. The establishment of the EIT Hubs would mean 
that staff would need to be appointed on a permanent basis to maintain them. Assuming that 
each Hub would be staffed by a minimum of five persons (a head of the hub; three account 
managers  for  education,  innovation,  and  entrepreneurship;  and  a  communication  officer), 
around  130  positions  would  have  to  be  managed  by  the  EIT  structure,  in  addition  to  the 
resources  needed  at  the  EIT  itself.  This  means  that  the  EIT  staff  needs  over  the  period  of 
2021-2027 would be expected to more than double compared to Option 2.  

 Total budget of EIT Hubs action over 7 years = around 810 Mio  

  Set  up  and  maintenance  of  26  EIT  Hubs  with  average  administrative  cost  of  

EUR 600 000 per year x 7 years = around EUR 110 million; 

Operational 

budget 

over 

7 

years 

= 

EUR 

700  million  

(annual budget = EUR 100 million);  

  Each  Hub  to  run  annual  projects  promoting  knowledge  triangle  activities  with  
at least 1 HEIs, 1 Research and Technology Organisation and 1 business and an average 
volume of max EUR 3 million per project; at least 20 students to be involved per project;  

 Total number of projects over 7 years: ~ 230;  

 Total number of organisations participating in EIT Hubs activities: ~ 700 

 60% of results should be traced directly to moderate and modest innovator countries 

 700 x 60% = c. 450 institutions involved in moderate and modest innovator countries 

  Overall  participants  from  moderate  and  modest  innovation  countries,  i.e.  200  

(current RIS) + 200 (future RIS) + 450 (HEI projects) 

Table 14: Assumptions behind new action on EIT Hubs; own illustration 

The implementation of the EIT Hubs would need to take place gradually and would require 
strong  efforts  at  the  beginning  for  their  establishment  and  continuous  efforts  for  their 
coordination      The  substantial  time  lag  between  putting  operational  structures  in  place, 
implementing tasks in regions and seeing the overall effects would significantly influence the 
perceived success of Option 3, particularly concerning the timeliness of impact. 

47 

 
 
 
 
 
 
Knowledge triangle integration in regions would increase as a result of operations of the EIT 
Hubs though the annual calls.  In particular, the cooperation with education and training in the 
regional 
the  positive  operational 
experiences with the KICs. The EIT hubs would primarily serve as  technology transfer hubs 
connecting businesses and knowledge providers and ensuring regional outreach of successful 
KIC activities and experiences already existing in agglomeration economies.  

innovation  ecosystems  would 

improve,  reflecting 

A moderate reduction in the skills gaps and skills shortages would be expected in the areas of 
active  operation  of  EIT  Hubs.  The  relative  number  of  partners  from  modest  and  moderate 
innovator  countries  as  compared  to  leading  innovators  in  the  regional  ecosystem  would 
increase.  Job  creation  and  revenue  growth  in  local  innovation  ecosystem  would  increase 
marginally as a result of the activities of the EIT Hubs.  

Interaction between agglomeration economies and the proposed new EIT Hubs105  

Agglomeration  economies,  in  a  general  sense,  refer  to  productivity  improvements 
accruing  to  the  co-location  of  economic  activity,  typically  within,  and  near  cities. 
Economically useful innovation is centred on corporate functions such as R&D which 
are  typically  co-located  with  other  high-value  adding  activities  such  as  marketing, 
design, or IT services. Economic analysis, most recently on global value chains (OECD 
2013;  Belderbos  et  al.,  2016),  confirms  that  these  corporate  activities  thrive  in  cities, 
where  they  benefit  from  large,  dynamic  pools  of  highly  qualified  professionals  and  a 
dense network of complementary services, including public research.  Such effects are 
clearly visible in the KICs.  

However, excellent research and innovation do not take place only in cities. Converging 
evidence  (Varga  et  al.,  2013;  De  Backer  et  al.,  2017)  suggest  that  the  geographical 
distribution of business-driven research differs considerably to that of public research-
driven  science  and  innovation.  There  is  evidence  to  suggest  that  agglomeration  is  not 
particularly  relevant  for  the  creation  of  this  latter  type  of  knowledge  (Bonaccorsi  and 
Daraio, 2005; Varga et al., 2013).  Therefore it can be assumed that regional outreach 
activities of the EIT such as those proposed by EIT Hubs can help connect businesses 
and public knowledge providers irrespective of location. 

Table 15: Agglomeration economies and EIT Hubs, an overview of arguments 

As  in  option  2,  synergies  and  complementarities  with  other  EU  programmes  and  funding 
instruments would increase due to closer alignment with the proposal for Horizon Europe, and 
in  particular  Pillars II  and  III.    In  addition,  specific  synergies  would  be  expected  to  emerge 
with  relevant  regional  innovation  policies  such  as  smart  specialisation  strategies  or  the 
European Regional Development Fund (ERDF).    

105 Based on literature review of: OECD (2013), Supporting Investment in Knowledge Capital, Growth and Innovation, OECD Publishing, 
Paris; De Backer, K., Destefano, T. and Moussiegt, L. (2017), “The links between Global Value Chains and Global Innovation Networks: An 
Exploration”, OECD Science, Technology and Innovation Policy Papers, No. 37, April; Belderbos, R., Sleuwaegen, L., Somers,  D. and De 
Backer, K. (2016), “Where to Locate Innovative Activities in Global Value Chains: Does Co-location Matter?”, OECD Science, Technology 
and  Industry  Policy  Papers,  No.  30,  OECD  Publishing,  Paris.;  Bonaccorsi,  A.  and  Daraio,  C.  (2005),  “Exploring  size  and  agglomeration 
effects  on  public  research  productivity”,    Scientometrics,  Vol.  63,  pp.  87-120;  Varga,  A.,  Pontikakis,  D.  and  Chorafakis,  G.  (2014), 
“Metropolitan  Edison  and  cosmopolitan  Pasteur?    Agglomeration  and  interregional  research  network  effects  on  European  R&D 
productivity”, Journal of Economic Geography, Volume 14(2), pp. 229–263.  

48 

 
 
 
 
 
 
 
                                                            
Option 3 would mean an increase in EIT administrative costs (EUR 90 million compared to 
EUR 70 million in Option 2 and the baseline value of EUR 48 million), primarily in order to 
manage  the  significant  coordination  and  transaction  costs  incurred  by  the  launch  of  a  new 
Action, the EIT Hubs. Within this option, the staff provisions and duration of staff contracts 
of the EIT would be aligned with those of other agencies in order to ensure the continuity of 
the EIT operation. 

49 

 
 
 
 
6.4.  Outputs of options 

The following tables present a summary of the outputs of the presented options:  

Option 1 
(baseline)106 

Option 2107 

Option 3108 

# of HEI involved in EIT activities109  

300 

750110 

530111 

# of students involved in EIT activities112 

10000 

30000113 

14600114 

# of businesses involved in EIT activities115 

# of start-ups supported by EIT116  

800 

400 

950 

680 

#  of  products,  services  or  processes  on  the 
market117 

3500 

4300 

KIC  partners’  co-funding  in  EUR  million 
(2021-2027)118 

# of participating organisations from moderate 
or modest innovator countries119 

500 

200 

1800 

500 

Table 16: Outputs of options; own projections based on past EIT performance 

1030 

490 

4100 

1520 

850 

106 All figures in baseline refer to projections based on past performance and derive from the performance achieved by the KICs in 2013-
2017. 
107 See Table 12 on the new action under option 2 for detailed assumptions.  
108 See Table 13 on the new action under option 3 for detailed assumptions.  
109 HEIs refer to Higher Education Institutions involved the EIT educational activities. Baseline figure includes KIC partners.  
110 Figure includes baseline + all HEIs to participate in the new action launched under option 2.  
111 Figure includes baseline + all HEIs to participate in the new action launched under option 3. 
112 Baseline includes students participating in EIT Label and related activities.  
113 Figure includes students participating in the new action launched under option 2. It is assumed that 150 students are involved in each 
project.  
114  Figure includes  students  participating  in  the  new  action  launched  under option  3.  It is  assumed  that  20  students  are involved  in  each 
project.  
115 Baseline includes business partners in KICs. Option 2 and 3 figures include, respectively business partners in actions under  Options 2 
and 3.  
116 Baseline includes start-ups supported by EIT through KICs. Option 2 and 3 figures include, respectively start-ups emerging from actions 
under Options 2  and  3.  Under Option  2  at  least  2  Start-ups  are expected  to  emerge  from  each  supported  project, i.e.  280  start-ups  over 7 
years. Under Option 3 it is assumed that 1 start-up is created  per 3 projects as the focus is on knowledge triangle integration more generally.  
117 Baseline includes new products, services or processes brought to the market through KICs. Option 2 and 3 figures include, respectively 
business  partners  in  actions  under  Options  2  and  3.  It  is  assumed  that  at  least  3  new  products/services/processes/ideas  are  brought  to  the 
market as a result of each start-up, i.e. 840 new solutions over 7 years  
118 Baseline includes co-funding attracted at a rate of 20% (slightly higher than today). 
119 Baseline includes the number of EIT RIS partners. Option 2 and 3 include the expected number of additional partners participating in the 
actions supported by those options.  

50 

 
 
 
 
 
 
 
                                                            
7.  HOW DO THE OPTIONS COMPARE?  

The  following  chapter  summarises  the  evidence  and  arguments  outlined  above  and  presents 
the effectiveness, efficiency and coherence of the Options. It presents the risks associated to 
the Options.  

Effectiveness 

Objective 1:  
KIC funding 

Option 1 

Option 2 

Option 3 

0 

++ 

++ 

No particular effect as 
business as usual will 
continue.  

Introduction of co-funding 
rates will increase long-
term impact of investment 
and support the financial 
sustainability strategies.  

Identical to Option 2 

0 

++ 

++ 

Objective 2: 
Regional outreach 

No particular effect as 
business as usual will 
continue. 

New action supporting 
HEIs will positively 
impact institutions from 
countries so far not 
reached by the EIT. 
Widening dimension of the 
action will further support 
regional outreach. 

Actions addressing the 
regional disparities in 
innovation capacity would 
be implemented through 
the EIT hubs.  The impact 
is expected to be highest in 
regions from countries that 
are moderate and modest 
innovators. 

0 

+ 

++ 

Objective 3: HEIs 
innovation 
capacity 

No particular effect as 
business as usual will 
continue. 

New EIT actions would 
create a structuring effect 
supporting the 
transformation of the HEI. 
Increased impacts through 
engagement of a high 
number of organisations 
and students. 

Spill-over effects expected 
from Knowledge Triangle 
Integration projects 
supported by the Hubs due 
to the participation of at 
least one HEI per project. 

0 

++ 

+ 

Objective 4: Other 
technical issues  

No particular effect as 
business as usual will 
continue. 

Significant improvements 
and adjustments resulting 
from adapting the technical 
issues. 

Identical to Option 2. 

0 

++ 

++ 

51 

 
 
 
 
 
 
 
 
 
Efficiency 

Cost-benefit of 
managing KICs 

No particular effect as 
business as usual will 
continue.  

0 

++ 

+ 

Cost of new 
actions  

0 

Not applicable 

Identical to Option 2 

Higher cost-effectiveness 
due to the establishment of 
co-funding rates, clearer 
measures for openness and 
collaboration.  
Reduction of 
administrative burden  
for KICs. 

++ 

++ 

Low additional 
administrative costs due to 
use of established shared 
services (procurement, 
project management, IT, 
legal).  

Increase in the capacities 
of the EIT, its staffing 
levels as well as the 
overhaul of its operational 
systems to manage EIT 
Hubs will incur significant 
costs. Administrative 
burden on the EIT and its 
regional operational hubs 
will increase. Given the 
ratio of spending moving 
towards the EIT hubs 
operation and their 
relatively marginal role in 
contributing to the 
objectives, the overall 
efficiency of spending will 
decrease. 

0 

- 

-- 

Administrative 
burden  

Significant as no 
mitigations measures  
are taken 

Decrease in the 
administrative burden due 
to introduction of co-
funding model and clearer 
measures on openness, 
transparency  
With regard to new action 
supporting HEIs, no 
significant burden as 
shared services of the EIT 
will be used. 

Identical to Option 2.  

With regard to EIT Hubs, 
administrative burden is 
likely given the need to 
establish new structures. 

0 

++ 

+ 

52 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coherence 

Horizon Europe 
coherence 

0 

++ 

+ 

Alignment with European 
Partnerships; EIC; 
Strategic Planning Process. 

Similar to baseline.  

Similar to baseline.  

High coherence with 
Horizon Europe mandate 
for the EIT in terms of 
education.  

Role of EIT in tackling 
regional disparities. 
However, possible 
ambiguities between 
excellence and cohesion 
principles.  

0 

++ 

+ 

Synergies with 
other EU 
programmes or 
policies 

No particular effect as 
business as usual will 
continue.  

Strong synergies with 
other Commission 
initiatives (e.g. 
HEInnovate, smart 
specialisation strategy).  

Strong synergies through 
alignment with smart 
specialisation strategies via 
EIT Hubs.  

0 

++ 

++ 

Table  17:  Comparison  of  options.  Key:  The  Options  are  rated  according  to  their  impact.  Policy  Option  1 
(baseline scenario) is set to zero and the impacts of the rest of the policy Options on the stated/foreseen KPIs are 
expressed as net changes compared to it, i.e. + positive effect, ++ significantly positive effect, - negative effect 
and – significantly negative effect. 
Source: own analysis 

7.1.  Risks associated with policy options  

There are risks associated with all options that are set out in Table 17 below.  The analysis is 
conceptual  and  based  on  qualitative  assessment.  It  covers  economic,  consumer  welfare, 
environmental quality and health risks. Due to the nature of the policy there will not be any 
particular health or environmental risks. Risks to consumer welfare are also considered to be 
low as it is deemed unlikely that the options will reduce the availability of goods or services, 
or  make  those  available  significantly  more  expensive.  There  are  three  principal  economic 
risks:  

Risk of closed ecosystems – i.e. the establishment of KICs as integrated legal entities leads to 
collusive  behaviour  between  partners  involved  in  the  KIC.  Such  risk  has  a  low  probability 
with a potential moderate impact on economic welfare. A related risk is that EU actions in this 
area could distort markets if EU funds simply subsidise activities which would have occurred 
anyway and thus ‘crowd out’ private sector investment. This risk is estimated as high with a 
moderate impact on net economic welfare. Due to these dead-weight risks the overall risk of 
market distortion is moderate with a potential moderate impact on economic welfare. The risk 
can be mitigated with increased openness and transparency of KICs.  

Risk  of  disparities  in  economic  growth  due  to  EU  support  for  KICs  –  i.e.  supporting  the 
development of a limited number of centres of excellence would enhance their economies and 
create positive externalities leading to the increased growth of these centres compared to other 
parts of the EU. The probability of this occurring is high whilst the magnitude of the effect on 
disparities  in  economic  growth  is  likely  to  be  moderate,  all  other  things  being  equal.  The 
establishment of integrated entities of firms and institutions of higher education and research 
could also create barriers to new market entrants in locations outside the centres of operation. 
This would be due to a more difficult access of external institutions and actors to knowledge, 
talent  and  finance.  The  probability  of  this  occurring  is  high  with  effects  of  moderate 
magnitude if realised.  

53 

 
 
 
 
 
 
 
 
 
This risk can be mitigated through measures under Option 2 and 3 (deepening the Regional 
Innovation Scheme, the set up of new actions to support the entrepreneurial capacity of HEIs 
across  the  EU  and  the  establishment  of  EIT  Hubs)  and  boosting  the  dissemination  of  best 
practices beyond the EIT and KIC Communities. 

Risk  of  KICs  not  reaching  financial  sustainability.  The  probability  of  this  occurring  is  high 
whilst  the  magnitude  of  the  economic  effect  on  existing  innovation  ecosystems  will  be 
considerable.  A  continued  low  level  of  private  funding  may  provide  disincentives  to  KICs 
pursuing financial sustainability. Unclear guidance on the future relationship between EIT and 
KICs  that  stop  receiving  EIT  grants  after  15  years  may  further  increase  the  risk.  Potential 
future  benefits  and  gains  from  long-term  investments  made  by  the  KIC  over  their 
programming  period  may  be  forfeit.  The  risk  can  be  mitigated  with  the  introduction  of 
specific co-funding rates that will increase private investment and with a clearer model for the 
future  relationship  between  EIT  and  KICs  that  cease  to  receive  funding  from  the  EIT. 
Guidance  from  the  EIT  is  also  important  -  evidence  suggests  that  the  second  and  third 
generation  of  KICs  incorporate  financial  sustainability  objectives  more  effectively  than  the 
first generate of KICs.  

Risk 

Probability 

Magnitude 

Consumer welfare 

Negative health impacts 

Environmental degradation 

Economic well-being 

Collusive behaviour 
Deadweight 

Disparities in economic growth 

Agglomeration economies 

Barriers to market entry 

Low 

Low 

Low 

Moderate 

Moderate 
High 

High 

High 

High 

Slight 

Slight 

Slight 

Moderate 

Moderate 
Moderate 

Moderate 

Moderate 

Moderate 

A potential risk is one of incomplete, or no policy implementation.  It is possible that calls for 
proposals  for  future  KICs  would  not  attract  interest.  However,  based  on  current  experience 
this is unlikely. Currently, there seems to be sufficient demand in consortia to apply for new 
KICs.120  

120 In the 2018 call for new KICs there were 6 and 4 proposals for Urban Mobility and Added-Value Manufacturing, respectively.  

54 

 
 
 
 
 
 
 
 
                                                            
8.  PREFERRED OPTION 

The baseline would see a business as usual with essential but limited adjustments of the EIT 
into  the  Horizon  Europe  framework  but  without  addressing  the  problems  the  EIT  faces.  
Options  2  and  3  would  address  the  identified  problems,  respond  to  the  Horizon  Europe 
ambitions  in  terms  of  education  and  regional  outreach  and  include  adaptations  and 
improvements to address the technical issues identified.   

Option  2  would  see  a  concerted  action  by  the  EIT  aimed  at  supporting  the  development  of 
innovative  capacity  of  HEIs  that  would  lead  to  economic  and  social  spill-overs  and  higher 
competitiveness.  This  would  come  at  a  relatively  low  cost  and  by  using  the  existing 
administrative capacity of the EIT and economies of scale to a considerable extent. Involving 
HEIs from across the EU through the new Action would contribute to mitigate the unbalanced 
strengthening of existing centres of excellence at the expense of regions from countries with 
modest or moderate innovation performance.  

Stronger openness and transparency measures would help to unlock the innovative potential 
in a wide range of organisations. Sharing knowledge and expertise in a targeted way beyond 
KICs would further add EU value. The introduction of co-funding would lead to greater levels 
of private investment in KICs and enhance the promotion of new business development and 
creation.  This  would  increase  the  potential  of  reaching  the  EIT  financial  sustainability 
objectives  in  the  medium-  to  long-term.  There  would  be  improvements  in  the  regional 
outreach due to the integration of RIS in the KIC strategies and an increased RIS budget. 

Option 3 in comparison would see the EIT increasing its regional outreach to local innovation 
ecosystems via a distributed network of EIT Hubs that support small-scale knowledge triangle 
integration  projects.  This  would  gradually  lead  to  knowledge  spill-over  effects  resulting  in 
increased  innovative  behaviour  of  participating  institutions.  However,  the  relative  cost  of 
achieving  this  would  be  significantly  higher  than  in  Option  2.  The  impact  of  the  regional 
outreach would be likely to occur only in the long-term due to the time lag between set up of 
EIT Hubs and any activities they would  support. The financial and administrative resources 
required  for  setting  up  the  structures  to  implement  Option  3  would  be  high.  Finally,  the 
administrative  burden  created  from  the  implementation  of  this  Option  in  multiple  locations 
and  the  need  to  coordinate  at  a  centralised  EIT  level  would  not  be  commensurate  to  the 
potential benefits within the proposed budget.  

Based  on  the  assessment  of  impacts  presented  above,  Option  2  represents  the  most  suitable 
way to implement the objectives of the initiative while offering the highest impacts. It would 
allow for a  targeted and proportionate action, amounting  to  an incremental  strengthening of 
the  intervention  alongside  reinforced  legal  certainty.  Option  2  would  be  a  significant 
improvement over the baseline Option, it would reflect well the stakeholders views and could 
be  implemented  within  the  suggested  timeframe.  Particular  attention  has  been  paid  to  the 
contribution of each Option to the attainment of the overall delivery of EU priorities as set in 
the Horizon Europe proposal and the role of the EIT in that programme, while also comparing 
their effectiveness, efficiency and coherence.  

55 

 
 
 
 
 
 
 
 
 
8.1. 

Implications of the preferred Option for the EIT Regulation and the SIA 

EIT Regulation  

A  clear  objective  of  the  amendment  to  the  EIT  Regulation  through  the  recast  legislative 
technique  would  be  to  ensure  greater  legal  certainty  and  stability  of  the  Regulation  in 
accordance with the Commission’s better regulation and law-making principles121 in terms of 
structure  and  legal  drafting.  This  would  enable  the  EIT  Regulation  to  focus  on  the  main 
principles of the functioning of the EIT/KICs and, at the same time, facilitate the application 
of its provisions.   

In  light  of  the  above,  the  recast  EIT  Regulation  would  be  time-neutral  and  principle-based. 
This  would  be  achieved  by  putting  greater  emphasis  on  the  principle-based  approach  in  the 
EIT  Regulation,  avoiding  maximum  harmonization  and  focusing  on  necessary  provisions 
enabling the functioning of EIT and KIC, and at the same time, by developing and detailing 
these principles in the proposed new SIA. In addition, the new EIT Regulation would be time-
neutral  in  the  sense  that  the  need  for  its  amendments  at  the  end  of  each  MFF  would  in 
principle not be necessary or only minimal. It would be for the SIA to ensure the necessary 
alignments  with  the  objectives  of  the  European  Framework  programme  for  research  and 
innovation funding the EIT, with the monitoring and obligations of that programme, and also 
to foster synergies with the other relevant programmes of the respective MFF. 

Moreover, the EIT Regulation would be amended in order to reinforce the role of the EIT in 
developing innovation capabilities through addressing global challenges and to strengthen the 
legal clarity of its provisions. Additional adjustments would be needed to ensure compliance 
of the EIT Regulation with the new Commission’s Framework Financial Regulation.  

Strategic Innovation Agenda 2021-2027 

The  SIA  will  set  the  priorities  of  the  EIT  for  2021-2027.  It  will  align  the  EIT  future 
development  with  the  Horizon  Europe  general  framework  and  ensure  synergies  and 
complementarities with the latter. The SIA will include the specific objectives of the EIT. It 
will propose concrete measures to enhance the transparency and openness of the KIC model 
in line with Horizon Europe criteria for European partnerships and define guiding principles 
for  the  role  of  KIC  co-location  centres.  The  SIA  will  set  clear  co-funding  modalities  for 
implementation  by  the  KICs.  It  will  provide  guidance  to  the  KICs  when  they  reach  the 
maximum 15 year limit after which the EIT grant support to the KIC will stop. It will include 
the main principles of the post-15 year relationship between the EIT and KICs.  

The SIA will include clear objectives for and in particular define the new action in support of 
increasing  the  innovation  capacity  of  HEIs  to  be  launched  by  the  EIT  in  the  next 
programming period. It will strengthen the regional impact of the EIT through the new actions 
and through strengthening of the RIS. The SIA will include an overview of the financial and 
human resources needed for the implementation of the EIT objectives. Clear monitoring and 
evaluation provisions will be defined taking into account the Horizon Europe framework and 
the EIT’s specificities.  

 121  Commission’s  Better  Regulation  Guidelines;  SWD(2017)  350  final.  Interinstitutional  Agreement  on  Better  Law-Making;  OJ  L  123, 
12.5.2016, p. 1. Interinstitutional Agreement on a more structured use of the recasting technique for legal acts. OJ C 77, 28.3.2002, p. 1 

56 

 
 
 
 
 
 
 
 
 
 
                                                            
9.  HOW WILL IMPACT BE MONITORED AND EVALUATED? 

Monitoring and evaluation are fundamental tools in measuring the impact of the EIT and will 
be further strengthened and continuously improved over the next programming period. Given 
the  nature  of  the  knowledge  triangle  integration  model,  it  will  be  important  to  apply  a 
monitoring framework that allows flexibility at all relevant levels (EU, EIT, KIC) and ensures 
coherence with the general objectives of Horizon Europe and impacts sought.  

Monitoring  

The  EIT  has  developed  metrics  to  measure  the  progress  of  the  KICs.  Several  Key 
Performance Indicators (KPIs) are applied to all KICs.122 However, the KPIs could be further 
fine-tuned  in  terms  of  the  relevance  of  KICs'  performance.  There  is  a  need  for  a  balance 
between  a  clear  set  of  EIT  key  performance  indicators  (horizontal)  to  measure  the  KICs 
overall performance on the one hand and the KICs sector specific indicators (vertical) on the 
other. Moreover, the monitoring model and the KPIs of the EIT are perceived by stakeholders 
as too focused on input and output (short-term measures) with limited attention to results and 
impacts123  and  are  not  aligned  with  the  proposed  indicators  and  monitoring  system  of  the 
Horizon Europe Programme, including monitoring aspects of the partnerships.124  

All inputs, outputs, results and impacts identified in this impact assessment will be monitored 
through indicators. Such indicators already exist for the majority of the examples. Whenever 
they do not exist, new indicators will be developed in order to enable the EIT to monitor the 
achievement  of  its  objectives.  The  chart  below  provides  an  overview  of  how  operational 
objectives and related indicators link to the specific objectives and related indicators.  

list  of  core  KPIs:  ec.europa.eu/research/participants/data/ref/h2020/other/guides_for_applicants/h2020-core-kpis-kic-eit-

122  Full 
2018_en.pdf 
123 E.g. ICF (2017), Evaluation of the EIT, pp. 35-36, High Level Group on the EIT (2016), The Future of the EIT, p. 24, European Court of 
Auditors (2016), Special Report on performance of the EIT, pp. 30 and 49 and SWD on the Interim evaluation of the EIT, SWD (2017) 351 
final, p. 44. 
124 Cf. Horizon Europe impact assessment, SWD (2018) 307; Regulation Horizon Europe, COM(2018) 435 final. Annex III. 

57 

 
 
 
 
 
                                                            
Figure  10:  Link  between  operational  objectives  and  indicators  to  specific  objectives  and  indicators;  own 
illustration 

The table below provides an overview of key indicators that will be collected. 

Data 
availab
ility 

Responsi
ble body 

Yes 

EIT 

Link to Horizon 
Europe impact 
pathway 

Innovation-based 
growth 

No 

Yes 

EIT 

Innovation-based 
growth 

No 

No 

EIT, 
European 
Commiss
ion 

Strengthening the 
uptake of 
innovation in 
society 

Sources of data / 
collection methods 

Annual programme / 
monitoring data 

Rolling survey of 
organisations in 
receipt of KIC 
support at set time 
intervals (i.e. 1, 3, 
years post support) 

Annual programme / 
monitoring data 

Rolling survey of 
start-ups created as a 
result of EIT activity 

Rolling survey of 
organisations/employ
ers in receipt of KIC 
support at set time 
intervals (i.e. 1, 3 and 
5 years post support) 

General 
objective 

Monitoring 
Indicator 

Targets125 
2023 
2027 

Strengthen 
sustainable 
innovation 
ecosystems and 
bring new 
solutions on the 
market 

1.500 

4.000 

No. of product 
innovations 
(goods or 
services) launched 
on the market 

Start-ups 
supported  and 
survival rate 

300 

700 

Foster innovation 
and 
entrepreneurship 
through education 

Reduction in 
skills mismatches  

No. of direct and 
indirect jobs 
created by 
organisations 
benefiting from 
KIC support 

40% increase 

100% increase 

125 Baseline for comparison is 2020  

58 

Improve effectiveness and efficiency of EIT fundingIncrease regional outreach of EIT by addressing regional disparities in innovation capacity across the EUIncrease innovation capacity of higher education by promoting entrepreneurial transformation of HEIsImprove operational effectiveness and efficiency of EITMonitoring IndicatorsMonetary value of non-EIT KIC funding Financial sustainability ratio(total revenues / total expenditure )HEIs involved in EIT and KIC activitiesNo. and % of organisations involved in EIT/KIC activities from regions outside the KIC CLC regionsNo. of participants completing eligible EIT programmeReduction in skills mismatchesNo. of product innovations launched Start-up creation and survival rateStrengthen sustainable innovation ecosystems   across EuropeFoster innovation and entrepreneurship through better education Bring new solutions to global challenges to market Time to grantNo. of new KIC partners every yearNo. of entities participating in EIT/KIC activitiesIncrease oppeness and transparencyOperationalSpecificGeneral 
 
 
 
 
 
 
 
 
 
 
 
                                                            
59 

 
 
 
Specific 
objective 

Monitoring 
Indicator 

Targets 
2023 
2027 

Sources of data 
/ collection 
methods 

Respon
sible 
body 

Data 
avail
abilit
y 

Link to Horizon Europe 
impact pathway 

Increase impact 
of KIC through 
more effective 
EIT funding 

Increase 
innovation 
capacity of higher 
education 

Increase regional 
outreach 

Monetary value of 
non-EIT KIC 
funding  

700 MEUR 
1500 MEUR 

Annual 
programme / 
monitoring data 

Yes 

EIT 

n.a. 

n.a. 

300 
750 

10.000 
30.000 

Annual 
programme / 
monitoring data 

Annual 
programme / 
monitoring data 

Annual 
programme/ 
monitoring data 

Yes 

EIT 

n.a. 

Yes 

EIT 

Strengthening human 
capital in R&I 

Yes 

EIT 

Strengthening human 
capital in R&I 

50% increase 
100% increase 

Annual 
programme / 
monitoring data 

Yes 

EIT 

Strengthening the uptake 
of innovation in society 

Financial 
sustainability ratio 
(total revenues / 
total expenditure ) 

HEIs involved in 
EIT and KIC 
activities 

No. of 
participants 
completing 
eligible EIT/KIC 
education 
programme 

No. of 
entities/organisati
ons participating 
in EIT/KIC 
activities from 
regions outside 
the KICs’ CLC 
regions 

Operational 
objectives 

Monitoring 
Indicator 

Sources of data 
/ collection 
methods 

Respon
sible 
body 

Data 
avail
abilit
y 

Link to Horizon Europe 
impact pathway 

Improve 
operational 
effectiveness and 
efficiency of EIT 

Increase openness 
and transparency  

Time to grant 

n.a. 

Annual 
programme / 
monitoring data 

Yes 

EIT 

n.a. 

No. of 
entities/organisati
ons participating 
in EIT/KIC 
activities 

20% increase 
50% increase 

Annual 
programme / 
monitoring data 

Yes 

EIT 

Innovation-based growth 

Table 19: Specific and operational objectives to be monitored by indicators; own illustration 

In parallel and in full compatibility with existing monitoring tools, a close alignment will be 
sought  between  the  EIT  monitoring  provisions  and  those  that  are  put  in  place  for  Horizon 
Europe.  For  example,  the  EIT  will  align  its  monitoring  tools  with  the  Impact  Pathways  of 
Horizon  Europe  that  seek  to  address  the  need  for  scientific,  economic  and  societal  impacts 
indicators  more comprehensively.  It will be a  responsibility of the EIT to  regularly monitor 
the  operational  performance  of  the  KICs  and  to  adapt  its  monitoring  and  reporting  systems 
continuously. The results of such monitoring will feed into the business planning processes of 
the KICs and into the EIT decision-making on the allocation of the budget and preparation of 

60 

 
 
 
 
 
 
 
 
 
 
the framework partnership agreements with the KICs as beneficiaries. The monitoring results 
should feed continuously into the policy-making process.   

Evaluation  

The evaluation of the performance of the EIT will be carried out by the Commission in line 
with  the  requirements  of  the  EIT  Regulation  and  will  feed  into  the  overall  Horizon  Europe 
programme  evaluation  that  will  be  carried  mid-term  and  ex-post.  This  will  include  an 
assessment of the synergies of the EIT with the other instruments of the programme.  

With  regard  to  the  KICs,  a  specific  indicator  framework  will  be  used  to  assess  the 
performance  of  the  KICs  during  the  next  Strategic  Innovation  Agenda  (2021-2027).  The 
framework draws from current and previous indicators, fills gaps and deficiencies identified 
in  the  existing  performance  measurement  system  and  is  aligned  to  the  Horizon  Europe 
indicator framework. While this is still in development, some key parts are outlined in more 
detail  in  Annex  8.  Further  work  on  evaluation  will  be  pursued  with  the  JRC's  Competence 
Centre on Microeconomic Evaluation. 

61