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# 52012DC0190

**REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Annual Report on the progress achieved by the Joint Technology Initiatives Joint Undertakings in 2010 /\* COM/2012/0190 final \*/**

  

REPORT FROM THE COMMISSION TO THE
EUROPEAN PARLIAMENT AND THE COUNCIL

Annual Report on the progress achieved by
the Joint Technology Initiatives
Joint Undertakings in 2010

1.           Introduction

The Joint Technology Initiatives are a
novel way of realising public-private partnerships in industrial research at
European level. They were established as pilots in 2007-2008 under the Seventh
Framework Programme[1]
in five strategic areas – aeronautics and air transport (the Clean Sky
Initiative), public health (the Innovative Medicines Initiative), fuel cell and
hydrogen technologies (the Fuel Cells and Hydrogen Initiative), embedded
computing systems (the ARTEMIS Initiative) and nanoelectronics (the ENIAC
Initiative)[2].
Bringing together industry, the research community and the EU to define common
research agendas and invest in large-scale multinational research activities,
especially in times of a global economic downturn, the JTIs represent an
intriguing opportunity for Europe to strengthen its competitiveness based on
the principles of scientific excellence, openness and innovation.

The Annual report on the progress
achieved by the Joint Technology Initiatives Joint Undertakings (hereinafter
referred to as "JTI JUs") is prepared pursuant to Article 11(1) of
each Council Regulation setting up the individual JTIs, which states that "the
Commission shall present to the European Parliament and to the Council an
annual report on the progress achieved by the [name of the JTI] Joint
Undertaking. This report shall contain details of implementation including
number of proposals submitted, number of proposals selected for funding, type
of participants, including SMEs, and country statistics".

The legal basis also sets out a requirement
to include, if relevant, information on the assessment results of the Technology
Evaluator which shall define the environmental impact and benefits of the
overall output of the Clean Sky Joint Undertaking[3]. Since the first assessment was
anticipated in the end of 2011, this report gives an overview of the
preparatory steps in the design and development of the Technology Evaluator
system undertaken in 2010.

The present report is the second
stand-alone document providing information to the European Parliament and the
Council on the progress achieved by the JTI JUs since their establishment. The
activities of the Joint Undertakings in 2008 were included in the general Annual
report on research and technological development activities of the European
Union in 2008[4],
and in particular, annexed to the Commission Staff Working Document[5]
accompanying the report. Later on, it was decided to change the scope of the
report and to separate the description of the JTI JUs' activities from the
general research and development activities of the Commission.

The first stand-alone report on the JTI
JUs' activities in 2009[6]
was adopted in September 2011. The Commission's services have undertaken
substantial efforts to present the next year's results of the JTI JUs'
activities, object of this report, to the European Parliament and the Council
in a timely manner.

The present Annual report on the
progress achieved by the Joint Technology Initiatives Joint Undertakings in
2010 is prepared after the first interim evaluations of the Joint
Undertakings foreseen in Article 11(2) of their Council Regulations. It takes
into account the recommendations of the experts in the interim evaluation
reports and the response from the Commission[7],
as well as the specific actions planned by the JTIs in line with these
recommendations. It also considers the opinion of the European Court of
Auditors expressed in the reports on the annual accounts of the JTI JUs for the
financial year ended 31 December 2010[8].

The report starts with a brief introduction
of the JTI JUs, summarises their key achievements in 2010 and outlines the fields
for improvement in the future. It is accompanied by a Commission Staff
Working Document containing essentially statistical information on the
research activities of the JTI JUs during the year in compliance with Article
11(1) of their Council Regulations.

2.           The JTI JUs at a glance

The Joint Technology Initiatives have been
set up in the form of Joint Undertakings on the basis of Article 187 of the
Treaty on the functioning of the EU (ex Article 171 of the Treaty establishing
the European Community) stipulating that "the Union may set up
joint undertakings or any other structure necessary for the efficient execution
of Union research, technological development and demonstration programmes".
They were established as "Community bodies" as defined in Article 185
of the EU Financial Regulation[9].
Having as a main objective to support key areas where research and
technological development can contribute to the European competitiveness and
quality of life, but where the traditional instruments of the Framework
Programme are not adequate[10],
the JTI JUs have been introduced as a major novelty under the Seventh Framework
Programme (FP7).

In line with the FP7
"Cooperation" Specific Programme, five JTI JUs were established in 2007-2008
for a limited period up to 31 December 2017:

(1)
Aeronautics and Air Transport (Clean Sky)
JU increasing the competitiveness of the
European aeronautics industry while reducing emissions and noise, established
by Council Regulation (EC) 71/2008 of 20 December 2007;

(2)
Innovative Medicines Initiative (IMI) JU fostering the development of
better and safer medicines for patients, established by Council Regulation (EC)
73/2008 of 20 December 2007;

(3)
Fuel Cells and Hydrogen (FCH) JU speeding up the
development and deployment of hydrogen supply and fuel cell technologies,
established by Council Regulation (EC) 521/2008 of 30 May 2008;

(4)
Embedded Computing Systems (ARTEMIS) JU helping the European industry to consolidate and reinforce its
world leadership in embedded computing technologies, established by Council
Regulation (EC) 74/2008 of 20 December 2007;

(5)
Nanoelectronics Technology 2020 (ENIAC) JU targeting to achieve a very high level of miniaturisation required
for the next generation of nanoelectronics components, established by Council
Regulation (EC) 72/2008 of 20 December 2007.

To achieve their objectives, the Joint
Undertakings select projects through annual open and competitive calls for
proposals following a one- or two-stage submission and evaluation process. They
provide funding for collaborative projects and coordination
and support actions. The calls for proposals launched by the Clean Sky
JU are more specific due to their scope, shorter duration and expected results which
should be at higher technology readiness levels. Thus, Clean Sky publishes
several calls per year.

Until they became autonomous, the European
Commission, as a co-founding member, was responsible for the establishment and
the initial operation of the JTI JUs. When the Joint Undertakings built up their
legal and financial framework, demonstrating capacity to implement their own
budget, they were granted autonomy from the Commission. ARTEMIS, IMI and Clean
Sky gained officially their autonomy in October-November 2009, followed by
ENIAC in May and FCH in November 2010. Thus, 2010 was the first full year of
autonomous functioning of most of the JTI JUs.

3.           Key achievements in 2010

After the relatively slow operational start
of the JTI JUs, to a certain extent due to the limitations of the existing
legal and the regulatory framework for a "Community body"[11], in 2010 the five Joint
Undertakings revealed that the new business model between public and private
sectors in research promises to be successful. The JTIs' activities that have
been launched and already ongoing were recognised to be overall efficient and
of a high quality according to the conclusions of first interim evaluations of the Joint Undertakings performed in 2010
(April 2011 for the FCH JU).

3.1.        Operational activities

In 2010, the five JTI JUs concentrated
efforts on the management of their calls for proposals – finalising
negotiations, signature of grant agreements and kick-off of the projects coming
out from the 2008 and 2009 calls, as well as launch of the 2010 calls,
evaluation and selection of the winning proposals and, for some JTIs, start of
the negotiation process. The Joint Undertakings worked also on the preparation
of the 2011 calls for proposals: based on the lessons learned from the previous
calls and consultations with the various stakeholders, they came out with a
definition of the next calls' topics.

All JTI JUs were successful in attracting a
wide variety of participation in their calls from Europe and FP7-associated
countries. Overall, a large number of SMEs took part in the proposals. There
were, however, some obstacles which the JTIs had to deal with to further
strengthen the SME involvement in their research activities.

As to the running projects, according to
the initial observations, they manage to address the identified priorities of
the JTI JUs' research agendas and are complementary to other FP7 activities in
the same domain without overlapping or duplicating them. This has been ensured
by regular checks. At the same time, the ongoing projects were showing a
satisfactory technical progress in line with the different industrial
implementation strategies.

Detailed information on the JTI JUs'
research activities in 2010, types of applicants, SME participation, statistics
per country and amounts of funding in the calls is presented in the Commission
Staff Working Document accompanying this report.

During the year 2010, most of the Joint
Undertakings started revision of strategic documents and updating research
priorities laying the foundation of the calls' topics in order to reflect
the scientific advances and the evolution of needs of the different industries.
Clean Sky carried out an assessment of its environmental objectives, as defined
originally in its technical proposal[12].
The result of this re-evaluation widely confirmed the relevance of Clean Sky's
initial targets. The ITD work programmes and the related calls topics were also
revised based on these updated elements. IMI considered the recommendation from
its industry stakeholders, expressed also in the first interim evaluation
report and endorsed by the European Commission, to launch
a number of large initiative projects and apply a
"Think Big" approach in formulating its calls topics. FCH undertook
specific actions to overcome the limitations of the matching principle and the
funding rates identified as a main risk factor for its operational activities. ARTEMIS
started work and ENIAC elaborated a new release of their research agendas to
keep pace with the new trends and fast evolution in their fields.

3.2.        Clean Sky JU: Technology
Evaluator

The Technology Evaluator is at the
core of Clean Sky with the purpose of assessing the environmental performance
of the technologies developed with its support. The Technology Evaluator
recovered from the delays faced in 2009 and all work packages were active in
2010. The first Technology Evaluator assessment was planned to be done
through modelling the air transport system by comparing two scenarios – with
and without the participation of Clean Sky. It was scheduled for the end of 2011.
The results of the assessment will be presented in the next Commission's
reports.

3.3.        Administrative activities

After the cumbersome, but successful set-up
and launch of the five Joint Undertakings, ARTEMIS, IMI and Clean Sky
progressively developed their legal and financial framework and, by the end of
2009, were granted autonomy from the Commission. Thus, 2010 was the first year
of autonomous functioning of the entities.

Following the same path, in 2010, ENIAC and
FCH focused on completing the establishment of their governance and internal
control systems and elaborating their risk management processes. After these
Joint Undertakings met the autonomy criteria, they were also granted administrative
and operational autonomy from the Commission.

One of the main tasks of the Joint
Undertakings in 2010 was to develop their internal systems and processes,
backing up the successful implementation of their research activities. Clean
Sky's processes have been analysed and mapped, which resulted in the production
of a quality manual and a manual for financial procedures. A review of the IMI
JU's organisational structure was carried out to better respond to the
expectations of the stakeholders. Similar revision and upgrading activities
were undertaken in the other JTIs as well.

An important issue in this context was the
development of key performance indicators. Among the five JTI JUs, by
the end of 2010 only FCH and ENIAC had implemented quantitative indicators.
Clean Sky, IMI and ARTEMIS designed their indicators, but the completion was
expected during the next year. Furthermore, as autonomous bodies, the Joint
Undertakings had to decide on their internal audit processes.
Clean Sky, IMI and FCH established their own internal audit capability and appointed
internal auditors. ARTEMIS and ENIAC chose this activity to be exercised by the
Internal Audit Service (IAS) of the European Commission.

For most of the JTIs, key staff had already
taken up their positions before 2010 and the recruitment of the
remaining posts was in its final stages. In 2010, the entities recruited staff
in compliance with their Staff Policy Plans. It is important to note
that in the end of year the JTI JUs, in close collaboration with the European
Commission, concluded the joint procurement procedure for their new office
location. In January 2011 they moved to their new premises in the White
Atrium building in Brussels.

Regarding their communication activities,
Clean Sky and ENIAC adopted a Communication and Dissemination Strategy,
which has been included in the agenda of the other Joint Undertakings as a
priority for 2011. Overall, during the year, the JTI JUs were focused on
promoting their activities among interested parties and maintaining the
relations with stakeholders through various events – information days,
workshops, meetings and conferences. The relations with media have been
maintained; various press releases on key research topics were published. The
JTIs worked also on improving their visual identity and re-designing their websites,
which were used as a tool to announce calls for proposals, exchange of
information and provision of information on the latest developments in the
respective industry.

The cooperation with third parties was
of a great importance for recognising the JTI JUs as players on the world
scene. FCH, for instance, developed good international cooperation with the USA,
Japan and the Republic of Korea. Clean Sky maintained close links with the SESAR
Joint Undertaking which investigates the air traffic management technologies in
line with the Single Sky initiative of the European Commission. ARTEMIS
increased its collaboration with the ARTEMIS-IA Working Group and the EUREKA
cluster programme ITEA-2.

4.           Perspectives and
challenges for the future

The first interim evaluations of the Joint
Undertakings were carried out as planned by the end of 2010 (in April 2011 for
the FCH JU) covering the quality and efficiency of their work and assessing the
progress towards the set objectives. The overall result of the evaluations is
positive, affirming good prospects for achievement of the JTI JU's goals.

As the Joint Undertakings are only now
fully autonomous, there needs to be a period of some years of consolidation
before the real benefits can be assessed. Nevertheless, the importance of
cross-sectoral co-operation in key strategy setting is considered extremely
important. In the case of the FCH JU, for example, where there are very
specific market entry barriers, the industrial partners have been very
effective in organising objective assessment of market potential in relation to
other competing technologies. The stable allocation of funds has also
underpinned the industry commitment – especially SMEs – at a time when the FP
funds could easily have been diverted to competing technologies.

In 2011, the five Joint Undertakings had to follow up on the implementation of the ongoing activities and kick off the next waves of projects, as well as on the preparation and launch of the future calls. Calls topics needed to be defined on the grounds of the revised
research agendas, considering the market forces and the quick pace
of technology development in their industries.

As recommended by the European Court of
Auditors and the experts in the first interim evaluation reports, the entities
which experienced initial delays in starting their operations, such as Clean
Sky, should have promptly recovered in order to achieve their objectives
within the set timeframe. This would have also contributed to shorten the time
for payments to beneficiaries and improve the implementation of the budget,
which had been perceived overall as being low among all JTI JUs in 2010.

The JTI JUs had to further encourage the wide
participation of industrial and academic partners, and particularly of
SMEs, in their research activities. They needed to remove the obstacles for SMEs,
where such existed. IMI had put on its agenda to develop a methodology for
in-kind contribution and calculation of indirect costs, and FCH already
initiated the process to adopt an increase in the funding rates, which were
considerably lower than those in FP7. Clean Sky, ARTEMIS and ENIAC were
challenged to keep the high interest of SMEs in the calls for proposals they were
launching.

From an administrative perspective, after the
initial start-up and preparatory phase before autonomy, the JTI JUs had to then
work on their consolidation as a pre-requisite for sustainability and a
factor for success. Although the establishment of the five public-private
partnerships was a considerable achievement on its own, the Joint Undertakings needed
to further develop their internal control frameworks, and introduce, if
necessary, additional control mechanisms. This was also pointed out in the
reports of the European Court of Auditors which found out that by the end of
2010 none of the entities had completely implemented their internal controls
and financial information systems and/or had yet validated their underlying
business processes as required by the Joint Undertakings' financial rules.

Moreover, implementation of key
performance indicators in 2011 by all JTI JUs had to avoid making the
output of the initiatives scattered and diffuse. Their task would be not only to
assess and periodically monitor quality in order to maximise impact across
research programmes, but also to be tracked by a sound monitoring and
evaluation system. An important step towards this in 2011 had to be the
implementation or adoption, where not done yet, of comprehensive internal
audit plans and the performance of regular ex-ante verifications and
ex-post audits. Moreover, as expressed by the European Court of
Auditors, the JTI JUs had to clearly define the role of the Commission's IAS in
their financial rules.

Concerning the IT and logistics matters,
all Joint Undertakings needed to further consider the establishment of formal
IT policies and procedures to ensure the proper functioning of the IT
planning and monitoring cycle and provide for reliable risk management tools. Also,
a host agreement had to be concluded with the Belgian authorities
concerning the office accommodation, privileges and immunities, and other
support provided by the State. Both comments were taken into consideration by
the JTI JUs and actions are already underway.

Among the objectives of the Joint
Undertakings in 2011 should have been the enhancement of their communication
activities using a more proactive and target-oriented approach, especially
within SMEs and the research community to increase their level of participation
in the research projects. As recommended in the interim evaluation reports, the
JTI JUs should develop and implement clear communication and dissemination plans,
obtain a separate identity and work more on the synergy with national
programmes and international cooperation with non-EU stakeholders.

Taking into consideration that the present
report is looking at the JTI JUs' development in the first year of their
autonomous operations, and at a point where none of their projects are
completed, the prospects for the future remain to be considered. The results
achieved by the five JTI JUs so far sets them as ambitious European initiatives
with the potential to become a new affirmed model of a public-private
partnership.

[1]               Decision
No 1982/2006/EC of the European Parliament and of the Council of 18 December
2006 concerning the Seventh Framework Programme of the European Community for
research, technological development and demonstration activities (2007-13), OJ
L 412, 30.12.2006, p. 1.

[2]               This document does not report on the SESAR Joint
Undertaking (Single European Sky Air Traffic Management Research), which is a
public-private partnership funded from the Seventh Framework Programme and the
trans-European Transport Networks and has its specific governance and reporting
mechanisms.

[3]               Referred
to in Article 8(1) of the Statutes of the Clean Sky JU, Council Regulation (EC)
71/2008 of 20 December 2007 setting up the Clean Sky Joint Undertaking, OJ L
30, 04.02.2008, p. 1.

[4]               Annual Report on research and technological development activities
of the European Union in 2008, COM(2009) 558 final, Brussels, 22.10.2009.

[5]               Commission
Staff Working Document accompanying the Annual Report
on research and technological development activities of the European Union in
2008, SEC(2009) 1380 final, Brussels, 22.10.2009.

[6]               Annual
Report on the progress achieved by the Joint Technology Initiatives Joint
Undertakings in 2009, COM(2011) 557 final, Brussels,
14.09.2011.

[7]               Report
from the Commission to the European Parliament, the Council, the European
Economic and Social Committee and the Committee of the Regions "First
interim evaluation of the ARTEMIS and ENIAC Joint Technology Initiatives",
COM(2010) 752 final, Brussels, 16.12.2010.

                Commission
Staff Working Paper "Report on the first interim evaluation of the [IMI,
Clean Sky and FCH JUs]" accompanying the Communication from the Commission to the
European Parliament, the Council, the European Economic and Social Committee
and the Committee of the Regions "Partnering in research and
innovation", SEC(2011) 1072 final, Brussels, 21.09.2011.

[8]               Reports
on the annual accounts of the [name of the JTI] Joint Undertaking for the
financial year 2010, together with the replies of the Joint Undertakings, OJ C 368,
16.12.2011.

[9]               Council
Regulation (EC, Euratom) 1605/2002 of 25 June 2002 on the Financial Regulation
applicable to the general budget of the European Communities, OJ L 248, 16.09.2002,
p. 1.

[10]             Commission
Staff Working Document "Joint Technology Initiatives: Background,
State-of-Play and Main Features", SEC(2007) 692, Brussels, 15.05.2007.

[11]             Designing
together the "ideal house" for public-private partnerships in
European research, JTI Sherpas’ Group, Final Report, January 2010.

[12]             This consisted in defining more precisely the
environmental forecasts according to the "concept aircraft" specified
for the first Technology Evaluator assessment, starting in 2010 and to be
completed in 2011. This exercise was linked to the revised selection of
applicable technologies and definition of the demonstrators, performed during
the first two years of the Programme.

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