Source: EURLEX
Language: en
Format: md

IE

**HÉ**

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 20.11.1996
COM(96) 589 final

**The First Action** **Plan** **for**

**Innovation in Europe**

**Innovation for growth and employment**

(presented by the Commission)

_In order to fight_ _unemployment,_ _Europe must secure a_
_stronger_ _growth,_ _better centred on the domains of the future_
_(Confidence Pact for_ _employment,_ _June 1996)_

**INTRODUCTION**

The public debate launched by the Green Paper has largely confirmed the basic principles of the
Commission's diagnosis of the reasons for the innovation deficit [1] plaguing the European Union.
There is widespread agreement on the need for a global approach to the problem, incorporating
technological aspects, training, venture capital development and the legal and administrative
environment. The debate has also drawn attention to the importance of the international dimension
and highlighted the diversity of national, regional and sectoral situations [2] . At the Florence Summit,
the European council has clearly indicated that "the fight for employment must remain the main
priority for the Union and its Member States" and within the framework of a strategy to achieve
that objective "has requested the Commission to establish a plan of action for the measures to be
undertaken in the field of innovation" [3] .

As a matter of fact, new markets are developing at a steady pace in the domains of information,
health, food processing and culture. A demand for new products and services is emerging. The
ability to innovate in order to satisfy these new needs is a precondition for the future creation of
jobs in Europe. This ability is also necessary in order to maintain competitiveness and employment
in the other sectors of activity.

To act for innovation is in first instance the responsibility of citizens, of industry and of national,
regional and local authorities.

Action at Community level, while respecting the rules of subsidiarity is necessary to draw up and
enforce the rules of the game, particularly those on competition, intellectual property rights and the
internal market. This level will also provide the necessary overview and enable exchanges of
experience to be organised and best practice to be propagated. Lastly, the Commission should
show an example by mobilising its own instruments, above all the Framework Programme for
Research and Development, and the Structural Funds.

The Green Paper on Innovation opened up a number of pathways. For the sake of efficiency, this
"First Action Plan" refers to a limited number of priority initiatives to be launched very soon at
Community level and includes a number of schemes put into action or announced since the launch
of the Green Paper, identified as essential to the innovation process [4] .

This is an initial action plan. The Commission is on the one hand continuing to investigate some of
the long-term schemes identified in the Green Paper; on the other, it is proposing to carry out a
more detailed analysis of activities which are the province of the Member States and of applicant
countries [5], with their collaboration, with the aim of establishing, in a second phase, a common
reference framework which will help to identify priority options and opportunities for cooperation.

The Action Plan for Innovation identifies three areas for action.

1 The meaning and scope of Innovation are defined in that Green Paper (COM(95)688 final
2 A summary of the comments received is given in Annex 2.
3 Florence Summit, conclusions of the Presidency, 21 and 22 June 1996, SN/300/46
4 Details of these initiatives and their justification are set out in Annex 1.
5 The ten associated countries of Central Europe, Cyprus and Malta

to foster an innovation culture;

to establish a framework conducive to innovation;

to better articulate research and innovation

**1.** **THE TOP PRIORITY IS TO FOSTER A** GENUINE **INNOVATION** **CULTURE.**

Innovation requires, first and foremost, a state of mind combining creativity, entrepreneurship,
willingness to take calculated risks and an acceptance of social, geographical or professional
mobility. Being innovative also demands an ability to anticipate needs, rigorous organisation and a
capacity for meeting deadlines and controlling costs.

An innovation mentality needs to be promoted, and neither legislation nor short-term measures will
be of any use here! The means to act exist:

**(i)** **Education and training first**

At national level, continue reviewing courses and teaching methods, above all for their ability to
stimulate creativity and a spirit of enterprise from the earliest age, and think about any changes
which may be necessary to the training of trainers. Member States should also continue to develop
life long training.

The Commission's contribution will be to set up a permanent ''training and innovation" forum to
stimulate the exchange of experience and best practice in this area. It will continue to implement
the White Paper on Education and Training, particularly where apprenticeship (Erasmus
apprenticeship, European apprentice statute) and continuing training are concerned. It will foster
links between schools as part of the _"Learning in the Information Society"_ initiative.

**(ii)** **Easier mobility for researchers and** engineers **to firms**

In the orientations for the Fifth Framework Programme for Research, the Commission proposes a
wide programme with the main objective of enhancing human potential. It should in particular
boost the efforts of the framework programme to arrange for transnational secondments of young
researchers and engineers to businesses, in particular SMËs, to help with their innovation or
technology transfer projects.

Member States are invited to adopt similar measures and to set up the conditions for making this
mobility **a** reality.

The Commission has launched a debate on mobility on the basis of the Green Paper and will study
the recommendations of the Veil group [6] .

**(iii) Demonstrate effective approaches to innovation in the economy and** **in** **society**

**It** is easier to make innovation acceptable and hence successful in the long run if citizens, industry,
**and** their representatives are involved in the debate on the major technological choices to be made
and if employees, users and consumers take part in the process. The dissemination of good
practice **in** this field will be strengthened.

The Commission has entrusted a high-level working party headed by Ms Veil with the task of
examining the obstacles still hindering the free circulation of workers and individuals. On the
basis of its conclusions the group will draw up proposals for removing the legislative,
administrative and practical barriers identified.

Moreover, the future framework programme for research should open up new approaches to
demonstration, including technical, economic and social aspects, management and organisation,
and fostering participation.

**(iv)** **Propagate the** best management and organisational methods amongst businesses

More and more of the firms that succeed are "agile", reactive and likely to forge cooperative links
with external centres of expertise.

Greater priority should be given at both national and Community level to disseminating
organisational innovations and using information and communication technologies in this field.
The Commission will see to favour the use the instruments at its disposal (the framework
programme, the Structural Funds and the training programmes) to this end. Quality promotion
policy contributes to steer business and public administrations in that direction.

Emulation amongst firms, such as comparative evaluation or benchmarking, enabling them to
compare themselves with the international leaders in their field, is an effective way of propagating
good practice. The Commission will therefore set up a pan-European benchmarking system,
starting with quality, and will help to network the national initiatives which it is inviting the
Member States to develop [7] .

**(v) Lastly, stimulate** innovation **in** the public sector and in government

At national level, innovation training or awareness schemes for decision-makers and managers of
projects and funds in the public domain need to be developed.

The Commission will stimulate exchanges of experience on ways of promoting and propagating
innovation in government departments and authorities. This may culminate in the issue of a Green
Paper in 1998?

It will also compile a permanent trend chart of innovation performance and policies in Europe,
fonning the basis for a regular report on innovation in the European Union.

Finally, Member States are requested to pursue their schemes for fostering competition in public
invitations to tender and the use of performance standards.

**Z** **THE** **SECOND** **PRIORITY** **IS** **TO SET UP A LEGAL, REGULATORY AND**
**FINANCIAL FRAMEWORK CONDUCIVE TO** **INNOVATION,**

**(i) The legal and regulatory environment needs to be adapted and simplified.**

**• The European Union and the** Member States should first of **all** make efforts **to improve the**
**European patent** system, making it more efficient, more accessible and less expensive. The
public debate has confirmed the needs of users in this field.

Many of the defects in the current situation stem from the coexistence in the European Union of
three patent systems: national, European and Community. Since the European patent system
provides for no European-level tribunal with jurisdiction over disputes in this area, there is **a**

COM(96) 463, 9 October 1996.

danger that the competent Courts in the Member States may deliver conflicting decisions. The
Community patent is still not in force, not yet having been ratified by all Member States, and
has already fallen behind the changing requirements and the construction of Europe.

The Commission will prepare in 1997 a Green Paper on the issue of the Community patent. It is
foreseen that this text will consider:

  - whether the Luxembourg agreement on the Community patent should be converted to a legal
instrument under the Treaty.

  - whether national patent convention should be further harmonised at Community level.

  - whether bridges should be built between the European and the Community patent system.

  - whether it is possible to adapt the system of taxes and duties in a way that corresponds to the
services provided and is not a barrier to the protection innovation.

The Commission will pursue its plan with the Member states, to harmonise and complete
legislation (especially with regard to the information society, design or employment) and will
reinforce the role that it can play in the action against counterfeits. It will implement an
information and support service for participants in the research framework programme.

The Commission recommends that Member States put in place instruments for assisting SMEs
and universities in the event of litigation, to raise awareness in SMEs and to develop training
schemes in this area.

- **Business start-up and innovation support** must **be simplified at both national and**
**Community level**

The Commission recommends that Member States set quantitative objectives and an ambitious
timetable for cutting the formalities and delays involved in starting up businesses.

The Commission will take on board what is being done in some Member States by testing **an** _ex-_
_ante_ mechanism for assessing the impact of regulations on innovation within the general
guidelines for legislative policy.

Businesses, particularly SMEs, often get lost amongst the plethora of support services which
have burgeoned at local, regional, national and Community level. Efforts to rationalise
structures and coordinate initiatives need to be accentuated so as to maximise their added value

and their effectiveness.

Similarly, local or regional networks of one-stop shops for SMEs for innovation support need to
be generalised.

Suitable legal structures (European companies, joint undertakings) must be adopted, and the
promotion of existing instruments (EEIGs) will be actively pursued.

**(ii)** **Innovation financing must be made easier in Europe**

**In** this vital area, much depends on private initiatives or those at regional and national level. The
Commission needs to work on propagating good practice and facilitating its adoption, **particularly**
with the support of pilot projects but also by mobilising the Structural Funds **and** newer
instruments such as **the** European Investment Fund (EIF). This action should be guided by three
objectives:

**•**

First, investment in risk capital and equity needs encouragement.
This applies particularly to start-up investment and innovative, high-growth firms, which are a
major source of new jobs.

Long term sources of funding (pension funds, life insurance, "business angels" and save-asyou-earn schemes) should be directed more towards risk investment.

The Commission will support more EIF intervention to promote innovation. This could take the
form of a pilot mechanism for attracting risk capital funds in which the EIF will take out
shares [8] to be invested in the early stages of investment and in innovative projects, particularly
those derived from Community research.

Secondly, the conditions within which **European** capital **markets for** **innovative,** **high-growth**
**companies** (such as the New Market Federation or EASDAQ) develop must be secured, which
means reviewing a number of legal and fiscal provisions and seeing to it that the necessary
expertise is available.

Thirdly, the **interfaces** between technological innovation **and financial circles** need to be
strengthened. Support is needed for the transnational dissemination of good practice and the
testing of new methods in this area. Also, closer links between Community research and risk
capital should improve the exploitation of the results of the research. An information and
guidance service on this topic will be set up for those taking part in the framework programme.

**3.** **THE THIRD PRIORITY IS TO GEAR RESEARCH MORE CLOSELY TO**

**INNOVATION AT BOTH NATIONAL AND COMMUNITY LEVEL.**

**In** knowledge-based economies, the efficient systems are those which combine the ability to
produce knowledge, the mechanisms for disseminating it as widely as possible and the aptitude
of the individuals, companies and organisations concerned to absorb and use it. The crucial
factor for innovation is thus the link between research (the production of knowledge), training,
mobility, interaction (the dissemination of knowledge) and the ability of firms, particularly
SMEs, to absorb new technologies and know-how.

(i) **At national level,** several types of action are necessary, depending on the Member State; the
Commission may give assistance where appropriate:

- **Firstly, develop a strategic** foresight vision of research **and of** **its** **application.**

Exercises such as,"key technologies", "Delphi" or "Foresight" can contribute to directing
collective efforts to the sectors, areas or technologies, which are the most relevant for the future.
Member States which do not have any experience in that area ought to consider the opportunity
of this type of approach.

The Commission will act to:

  - facilitating the exchange of experiences between Member states and exploiting the results of
these exercises in order to identify relevant leads at the Community level.

  - reinforce technology watch at European level within the framework of the European Science
**and** Technology Observatory, set up by the RCC's Institute for Prospective Technological
Studies **as** focal point for the Member states observatories.

8 Since June 1996, EIFs statute allows it to take such participations

Secondly, strengthen the research carried out by industry, in both absolute and relative

terms

Member States are requested to draw up quantified and ambitious objectives aiming to increase
the share on the Gross Internal Product dedicated to research, to development and to innovation,
in particular by encouraging research undertaken by industry (in particular the one financed by
enterprises or the one financed by governments within the limits allowed by article 92 of the
Treaty). In Europe, the share of GDP devoted to research financed by industry, which offers
more opportunities for exploitation, is on average 38% below that of the USA and 55% below
that of Japan.

**Thirdly, encourage** strongly the start-up **of** technology-based **firms** ("campus companies",
spin-offs, etc.)'

The Commission recommends that Member States step up the action they are taking in this area
and exploit the structures which have proved effective in the field.

As from 1997 it will organise a thorough exchange with Member States on this topic, involving
leading players in the field. This will concentrate on measures for facilitating this spin-off
process (covering intellectual property rights, social rights, financial arrangements, etc.) and
national or regional promotion schemes. It will back up the dissemination of best practice
through pilot projects involving, for example, university technology-transfer departments, the
regional institutions concerned, venture capital companies and technology brokers.

**Fourthly, intensify the cooperation** between **public, university and industrial research**

The Commission recommends that Member States establish a legal and practical framework
which will foster this cooperation by, for example:

- providing opportunities for universities and researchers to spend some of their time
developing companies;

- enabling universities and public research centres to conclude exclusive contracts with
industry for exploiting results, including through financial holdings.

**Lastly, strengthen the capacity of SMEs for absorbing new technologies and know-how,**
**whatever their origin**

Substantial effort needs to be made in this area. Member States should extend the scope of
their measures to include the transfer of technologies of international origin. Companies,
particularly SMEs, should have easier access to expertise at the highest level, European or
worldwide, in technological, organisational or management methods.

At national and regional level, moreover, the drive to rationalise innovation support
organisations, as mentioned above, needs to be accompanied by measures enabling them to
achieve critical mass and the necessary degree of professionalism.

The Commission will intensify activities for creating improved links between the various
national and regional innovation-support systems. Working with the players concerned, it will
help to professionalise or, where appropriate, certify the new professions which will need to
emerge in this context.

**(ii) At European Union level, the Community will mobilise all of its innovation instruments**

**• First, the Commission will establish within the Fifth Framework Programme a single,**
**simplified horizontal framework for integrating the** **"innovation"** **and** **"SME"** **dimensions.**

**Accepting that large companies have an important role to play in the Innovation process, in**
**particular with smaller firms, this action should give more SMEs access to all research work**
**and its results, develop technology transfer and stimulate innovation.**

**- The Framework Programme approach should be an integrated approach. Research projects**
**will take more systematic account of organisational, management, market, financial, legal and**
**protection aspects.**

**- Secondly, the methods of implementing projects and programmes will be changed. This**
**means in particular:**

**•** **the criteria for assessing proposals;**

**•** **encouragement during the research phase to prepare for exploiting and disseminating the**
**results (documentation of results, complementary studies, training schemes, licence**
**preparation, finding partners, upstream consideration of the pre-standardisation dimension,**
**etc.);**

**•** **adapting to contracts, particularly to make them more flexible and to give better protection**
**to the intellectual property rights of contractors where development or demonstration**
**projects are concerned;**

**•** **aiming** **at maximum user-friendliness for SMEs and faster procedures involving fixed**
**deadlines for the various phases.**

**Thirdly, the coordination of** **the** **conception and the management of** **these** **measures needs to be**

**reinforced:**

**•** **more global consistency of the actions;**

**•** **an integrated range of services suited to the needs of the various categories of** **SMEs;**

**•** **gateways between projects at different stages (research, demonstration, transfer,**
**exploitation);**

**•** **optimum use of the existing networks of assistance, with innovation, project preparation**
**and the search for partners, especially with regards to SMEs.**

**Lastly, the positive experience of the Research-Industry Task Forces will be put to contribution**
**within the Fifth Framework Programme for Research.**

**The debate on the Green Paper on Innovation and the experience gained through the Task**
**Forces in the Fourth Framework Programme have demonstrated the usefulness of instruments**

**which:**

**better identify, together with users, researchers and industry, the technological obstacles whose**
**solution is an economic and social priority in Europe;**
**mobilise expertise and private or public resources, Community or national, to the maximum**
**extent** **in** **order** **to** **bring large-scale targeted projects to a successful conclusion, thereby**
**obtaining faster results from research effort, avoiding duplication and increasing the visibility**
**and** **the exemplary nature of Community research.**

**In consequence, it would be desirable to improve at Community level:**

the incentive character of participation in the work of Task forces, by taking innovation more
into account as a selection criterion for projects within the Fifth framework programme;
the efficiency of procedures by planning simultaneous or integrated calls for proposals for the
various programmes for priority research.

In addition, outside the framework programme, all Community instruments will be
mobilised to support innovation:

The increased input of the Structural Funds into innovation will be continued at both
Community level (Article 10 of the ERDF, SME initiatives, ADAPT, LEADER II) and national
and regional level.

Member States and the regions concerned are requested to invest more in schemes linked to
innovation, subject to the resources available for the current programming period and in the
next generation of Structural Funds.

Here, the Commission will draw on the experience gained with regional innovation strategy
projects jointly subsidised by Article 10 of the ERDF and the Innovation programme. It will
also stress the importance of innovation in its various initiatives.

The European Union must make full use of the international dimension of innovation. Twothirds of world innovations and scientific discoveries are made outside the European Union, and
most expanding markets are to be found outside Europe. This means, in particular:

  - closer interaction of the framework programme with the COST and EUREKA cooperation
frameworks;

  - support for international industrial cooperation;

  - intensified international cooperation on research and development with non-Member
countries;

  - stronger encouragement to entities in the countries concerned, through the possibilities
offered by instruments such as TACIS, PHARE [9], MEDA, etc. to search a stronger
synergy with community research projects.

  - continued vigilance in international negotiations for aspects liable to affect European
innovation and its outlets (such as intellectual property rights and anti-counterfeit
measures).

Lastly, the action plan will be fleshed out in various priority sectors or fields

Situations vary widely according to the country, the sector and the technology. The action plan
will therefore need to be adapted to certain fields or sectors designated as priorities. These
might include environmental protection and sustainable development, the services sector, rural
development, aspects related to demand and consumers, the audio-visual sector and better
exploitation of space and dual-use technology.

CONCLUSION

In the three main fields identified, the Commission is putting forward those measures whose
priority, expected impact or urgency has been confirmed by the debate. These are summarised in

For those countires which are not applicant

**the tables below. At Community level these measures can be financed from existing or planned**
**budgets.**

**The main effort must nevertheless be made at local, regional or national level. The Commission**
**proposes to analyse in more detail those activities which are the province of** **the** **Member States, in**
**collaboration with** **them,** **in order to establish** **a joint** **reference** **framework** **and so help them identify**
**the priority options and the opportunities for cooperation.**

**It will take the necessary steps to ensure effective coordination of the measures deriving from**
**various policies and will strengthen interaction with Member States. It invites the Member States**
**to do the** **same.**

**The Commission will draw up a detailed implementation schedule and will precisely quantify the**
**costs of the measures it is proposing. On this basis it will submit the corresponding legislative and**
**regulatory proposals to the Council, the European Parliament, the Economic and Social Committee**
**and the Committee of the Regions. It** **will** **report regularly to the European Council on the**
**implementation of the action plan, including, where necessary, proposals for any adjustments or**
**additions which** **may** **prove necessary in the light of developments or in view of the specific**
**contexts in which the plan is applied.**

**The enthusiasm and energy demonstrated must be mobilised in order to implement this Action Plan**
**and so build a** **more** **innovative, competitive and** **job-creating** **Europe.**

*****************************

**The summary tables below are an integral part of this action plan.**

**10**

1. FOSTERING AN INNOVATION CULTURE

1.1 NEW ACTIONS

1- **Education and** initial and further training

Commission

- Set up a "training and innovation" forum to exchange experience and disseminate best practice
(1997).

**Member States and regional authorities**

- Make a critical examination of teaching programmes and methods and the training of
instructors.

- Adapt the content of initial training to develop, from the earliest age, creativity, spirit of
enterprise, etc.

2- Mobility of students, research workers and teachers

Commission

- Put forward a wide horizontal programme aiming to enhancing human potential in the Fifth
Framework Programme for Research (first half of 1997);

- Stimulate transnational "industrial PhDs" (placement of research workers/engineers in firms)
(pilot action in 1997).

- Make Community aids to mobility more flexible (5th FPRD).

Member States

- Adopt measures for the temporary secondment of research workers to firms, especially SMEs.

- Ensure that the conditions actually exist for mobility between research and enterprises
(assessment of qualifications, career development).

**3-** **Innovation and** management **of** enterprises

Commission

- Promote organisational innovation through Community instruments at its disposal (framework
programme, Structural Funds and training programmes, etc.) (1997/98).

- Introduce a benchmarking system at the European level (pilot project in 1997).

**4-Public** **authorities**

**Commission**

- Develop exchanges of experience on the promotion and dissemination of innovation in
government offices and public services. Conference in 1997 and publication of a green paper in

1998.

- Compile a permanent trend chart of innovation performance and policies in Europe (to be put in
place in 1997).

**Member States**

- Develop initiatives to provide information and increase awareness among politicians and senior
officials of what is at stake with innovation.

**11**

```
        1. FOSTERING AN INNOVATION CULTURE

1.2 CURRENT ACTIONS FOR IMPROVING THE INNOVATION ENVIRONMENT IN

               EUROPE

```

**1-** **Education and initial and further training**

**Commission**

**• Implement the proposals of the White Paper on Education and Training (especially Erasmus**
**apprenticeships, European apprenticeship statute).**

**• Pilot projects to encourage links between schools** **("Learning** **in the information society"**
**initiative).**

**Member State and regional authorities**

**• Develop sandwich course training, especially at university level.**

**• Encourage the effective knowledge of several Community languages.**

**2-** **Mobility of research** **workers,** **students and teachers**

**Commission and Member States**

**• Launch a debate on the Green Paper with regard to the mobility of research workers, students**
**and teachers, and implement proven routes of action; examine and possibly implement the**
**recommendations of the Veil Group.**

**3-** **Raising public awareness and involving those concerned**

**Commission**

**• Develop initiatives to disseminate best practice** **in** **this field.**

**Member** _**States**_

**• Foster a scientific and technical culture and awareness of the beneficial effects of innovation.**

**Commission and Member States**

**•** **Involve enterprises, the public and their representatives in discussing major technological**
**options.**

**• Develop measures to increase the involvement of employees, users or consumers and to**
**facilitate the acceptance of** **innovation.**

**4-** **Innovation and management of enterprises**

**Member States**

**• Increase training activities for innovation management.**

**•** **Foster** **the development of the practice of "benchmarking" among enterprises.**

**5- Public authorities**

**Member States**

**• Stimulate competition in public invitations to tender** **and** **the use of performance standards.**

**12**

2 ESTABLISHING A FRAMEWORK CONDUCIVE TO INNOVATION

2.1 NEW ACTIONS

1- Protection of intellectual and industrial property

Commission and Member States

- Launch of a Green Paper on the issue of the Community patent (September 1997)

Commission

- Set up a service of assistance on intellectual property (IPR-Helpline) for Community research
(1997).

Member States

- Set up instruments to inform and help SMEs and universities in the event of disputes.

2- Administrative simplification

Commission

- Introduce a pilot mechanism for the ex-ante assessment of the impact of regulations on
innovation (end 1997).

- Implement operational procedures for coordinating Community innovation support networks
(1997).

Member States

- Set objectives and a precise timetable for simplifying business start-up formalities.

Member States and local authorities

- Speed up the rationalisation of innovation support activities and bodies:

3- Financing

Commission

- Reinforce EIF action in favour of innovation and cooperation between the EIB and the
Structural Funds (beginning of 1997).

 - Improve the links between Community research and risk capital, particularly in order to provide
information and guidance services for those taking part in the framework programme and for
investors (mid-1997).

 - Develop the exchange of experience and the dissemination of best practice between Member
states and operators (1997 and 1998).

Member States

 - Introduce the framework conditions for stock exchanges for growth enterprises.

 - Make greater efforts to direct "patient" capital towards risk investment.

4- Taxation

Commission

 - Consider a communication on "taxation and innovation" (possibly in 1997).

Member States

 - Promote fiscal and accounting treatment more favourable to intangible investment.

**13**

2. ESTABLISHING A FRAMEWORK CONDUCIVE TO INNOVATION

2.2 CURRENT ACTIONS FOR IMPROVING THE INNOVATION ENVIRONMENT IN

EUROPE

1- Competition

Commission

- Follow-up to the Green Paper on merger monitoring, extending the field of application of unified
European monitoring of mergers and harmonising the treatment of joint structural enterprises.

- Publish a green paper on the application of the rules of competition to vertical agreements.

- Continue the dialogue with the competition authorities in the United States, to allow the bringing
together of the definitions of relevant market, particularly in agreements with a high technology

content.

2- Protection of intellectual and industrial property

Commission and Member States

- Complete the harmonisation of legislations to take account of developments linked to the
technologies of the information society and supplement legislations on design protection and
employees' inventions.

Commission

- Strengthen anti-counterfeit measures.

Member States

- Ensure the adoption of the proposal for a directive on biotechnological inventions.

- Support the efforts of the European Patent Office to reduce filing costs.

- Transpose the European directives on the protection of intellectual property into national legislation
by the end of 1996.

- Develop training in this field.

- Make enterprises aware of the competitive benefits of protection.

3- Administrative simplification

Commission

- Introduce into the work of the Committee for the improvement and simplification of the business
environment a special action on innovation.

 - Accord the required importance to innovation when simplifying administration (e.g. in the choice of
sector under the SLIM project).

Member States

 - Provide enterprises with one-stop shops for innovation questions.

4- Legal and regulatory environment

Company law

Council

 - Speedy adoption of a European Company Statute.

Commission

 - Continue to encourage the use of European Economic Interest Groupings, especially by providing
better information.

 - Study the feasibility of creating a joint undertaking statute (Article 130N of the Treaty).

**14**

**3.** **GEARING RESEARCH TO INNOVATION**

**3.1 NEW ACTIONS**

**1.National** **measures and their Community back-up**

**(i)** **Strengthening research carried out by companies**

**Member States**

**• formulate quantified objectives and put in place the appropriate incentive policies.**

**(ii)** **Start-up of technology-based companies**

**Commission**

**• organise thorough exchanges with Member States and players in the field** **on** **legal, fiscal and**
**promotional measures (1997).**

**• launch pilot schemes for disseminating good practice, involving universities, risk capital, industry and**
**regional institutions (1998).**

**(iii)** **Intensified** **cooperation** **between** **research,** **universities and companies**

**Member States**

**• set up a legal framework to facilitate exploitation by research organisations, including business start-up.**

**(iv)** **Strengthening the ability of SMEs to absorb technologies and know-how**

**Member States**

**-**
**support transnational technology transfer.**

**Commission and Member States**

**•** **better links between national and regional innovation systems at Community level.**

**(v)** **Demonstration of effective approaches to innovation**

**Commission**

**-**
**set up a new generation of demonstration projects integrating the technical, organisational and social**
**aspects of innovation (5th FPRD).**

**2.Incorporating the Innovation and SME dimensions into the Framework Programme for**

**Research**

**Commission**

**• adapt the implementation procedures for the Framework Programme (project selection criteria, faster**
**project** **Selection,** **more demonstration schemes, legal framework for contracts) (4th and 5th FP).**

**• strengthen the consultation and coordination role of the research-industry Task** **Forces.**

**- develop a programme "Innovate and giving SMEs greater involvement** **and** **providing an integrated**
**approach to the goal of innovation through the legal and financial treatment of projects, particularly**
**those supporting SMEs (5th FPRD).**

**3.Mobilise other Community instruments**

**Commission and Member States**

**• prepare to flesh out the action plan in various priority sectors and fields of** **technology.**

**15**

3. GEARING RESEARCH TO INNOVATION

3.2 CURRENT ACTIONS FOR IMPROVING THE INNOVATION ENVIRONMENT IN

EUROPE

1. National measures and Community back-up

(i) A strategic vision of research and development
Member States

- consultations on long-term technology forecasting (Foresight).

Commission

- facilitate the exchange of experience and the exploitation of results on a Community scale;

- stimulate the technology watch (network of national organisations around the European Science and
Technology Observatory (ESTO)).

(ii) Start-up of technology-based companies
Member States

- stronger promotion of "campus companies" and spin-offs.

(iii) Intensified cooperation between research, universities and industry
Member States

- pursue and strengthen action in this area.

Commission

- analyse the obstacles and disseminate good practice;

- support national efforts to improve the management of research and technology organisations and
their international benchmarking;

- organise sectoral and inter-sectoral technology platforms.

(iv) Strengthening the ability of SMEs to absorb new technologies and knowledge
Member States

- improve the efficiency and transparency of support structures.

Commission

- help professionalise the innovation support services;

- set up a scheme for promoting the absorption and use of technologies (first-use support, access to
technologies not developed in the European Union, internationalisation of young technology-based
firms, regional projects).

(v) Demonstration of effective approaches to innovation
Member States and Commission

 - make better use of specialists in the social and behavioural sciences in technology projects.

2. Incorporating the Innovation and SME dimensions into the Framework Programme

(see New Actions)

3. Mobilise other Community instruments
Commission and Member States

 - direct more of the Structural Funds towards innovation;

 - make the most of the international dimension of innovation.

**16**

**ACTION PLAN** **FOR** **INNOVATION** **IN** **EUROPE**

**ANNEX** **1**

**Description** **of** **actions**

**/?****

_CONTENTS_

INTRODUCTION Ill

1. Consultation iii

2. Reactions iii

3. A first Action Plan iv

A - FOSTERING AN INNOVATION CULTURE: 6

1. Education and training 6
2. Encouraging mobility 8
3. Raising public awareness and involving the operators concerned 8
4. Business management 9
5. Public authorities 10

(i) Innovation in the public sector 10
(ii) Public contracts 11
(iii) Analysis of innovation policies and systems 11

B. ESTABLISHING A FAVOURABLE FRAMEWORK 14

1. Legal, administrative and regulatory environment 14
(i) Competition 14
(ii) Protection of intellectual and industrial property 15
(iii) Administrative simplification 18
(iv) Company law 20
(v) Standards 21

2. Financial environment 21

(i) Financing 21
(ii) Statutory deductions 23

C- GEARING RESEARCH TO INNOVATION 27

1. National measures with Community support 28
(i) A long-term strategic approach to research 28
(ii) Strengthening research carried out by industry 29
(iii) Start-up of technology-based companies 29
(iv) Closer cooperation between public research, universities and industry 30
(v) Expansion of SMEs' capacity for absorbing new technologies and
know-how 30

(vi) Demonstration of effective approaches to innovation 31

2. Incorporating the innovation and SME dimensions into the Framework
Programme 32

3. Mobilising other Community instruments 35
(i) Gearing the Structural Funds more towards innovation 35
(ii) Making the most of the international dimension of innovation 36
(iii) Fleshing out the action plan in various priority sectors and fields of
technology .....37

CONCLUSION: 41

_**S!%**_

_In order to fight unemployment. Europe must secure_
_a growth stronger and better centred on the domains_
_of the future (Confidence pact for employment, June_
_1996)._

_INTRODUCTION_

_1._ _Consultation_

The Green Paper on Innovation [1] prompted a very important reaction and there was a wide-ranging
debate, which extended beyond the borders of the European Economic Area. More than 40 000
copies were circulated. The Green Paper was studied by the various Community institutions, by the
governments and by those directly concerned.

The opinions of the European Parliament, the Economic and Social Committee and the Committee of
the Regions [2] were favourable and emphasised in particular the importance of technology
dissemination, the principle of subsidiarity, the role the economic operators and the social aspect of
innovation.

In all the Member States, together with Norway and Iceland, conferences to discuss the Green Paper
were organised at the Commission's initiative and with the support of the national authorities. They
brought together more than 5 000 people: industrialists and representatives of research centres,
financial institutions, government departments, innovation bodies, trade unions, universities, etc.

More than 300 detailed contributions were also submitted to the Commission, mainly from
enterprises or their representative organisations [3] .

Lastly, in addition to the comments from field players directly involved, official responses [4] were
received from most of the Member States, as well as from Norway and Hungary.

There was thus an unprecedented response to the need for innovation, viewed not as an end in itself
but as an essential instrument for attaining fundamental social objectives and lasting and sustainable
growth, as well as for improving the competitiveness of enterprises and employment. At the Florence
Summit, the European council has clearly indicated that "the fight for employment must remain the
main priority for the Union and its Member States" and within the framework of a strategy to achieve
that objective "has requested the Commission to establish a plan of action for the measures to be
undertaken in the field of innovation" [5] . As a matter of fact, new markets are developing at a steady
pace in the domains of information, health, food processing and culture. A demand for new products
and services is emerging. The ability to innovate in order to satisfy these new needs is a precondition
for the future creation of jobs in Europe. This ability is also necessary in order to maintain
competitiveness and employment in the other sectors of activity.

_2._ _Reactions_

The views that were expressed naturally differ, but there was agreement on:

- the importance and relevance of the discussion,

- the integrated approach proposed by the Commission (ranging over the questions of training,
competition, legal and administrative framework, venture capital, etc.),

- the broad lines of the diagnosis.

1 "Green Paper on Innovation", COM(95)688 final.
2 See Annex 2c.
3 The annexed document 2a summarises these contributions.
4 See Annex 2b.
5 Florence Summit, conclusions of the Presidency, 21 and 22 June 1996, SN/300/96.

_yff_

- the urgent need for action that is coordinated at each separate level of intervention as well as

between levels.

A number of salient points emerged from the debate:

- the diversity of national, regional and sectoral circumstances. A uniform Community-wide approach
which would disregard these specific features would inevitably fail. To act for innovation is in first
instance the responsibility of citizens, of industry and of national, regional and locaj authorities.

Strict application of the principle of subsidiarity is essential;

- value added at Community level, especially for:

    - drawing up and ensuring compliance with the rules of the game (framework conditions for
competition, the internal market, industrial property rights, etc.);

    - providing the overall view needed for formulating options on a common basis;

    - exchanging experiences and disseminating best practice;

    - providing the necessary impetus and political signals by means of Community policies and
instruments (research, structural funds, internal markets, SMEs, etc.);

- the areas in which priority actions should be launched, at both national and Community levels.

The main aims are to:

    - foster in the economy and society a genuine innovation culture, favouring creativeness,
willingness to take risks and experimentation. This requires, in particular, long-term actions
in the areas of education and further training, closer links between the worlds of education
and the economy and promoting awareness among those involved in the public and private

sectors;

    - adapt the administrative, legal, regulatory and financial environment, so that it is permanently
more conducive to innovation. In addition to streamlining administrative procedures, at
Community as well as at national and regional levels, this involves in particular rules on
competition and intellectual property to encourage innovation and legal arrangements to
facilitate the setting-up of international cooperation, but also the creation of an environment
which is more conducive to innovation financing and to the reinforcement of the financial
structure and own funds of innovative enterprises.

    - maintain - but also and more usually to focus and consolidate - collective research efforts,
especially among enterprises, as well as their ability to access and benefit from new
technologies and knowledge, from whatever source. This involves better anticipation of
requirements, technical changes and markets, together with closer collaboration between
research and industry and a special emphasis on the dissemination of technologies and skills,
especially among SMEs and the least favoured regions.

 - the importance of the international dimension, which is both a fact and a necessity [6] . Promoting
innovation in Europe does not mean turning inward. Action needs to be taken against an open
and dynamic background of international cooperation and competition.

_**3.**_ _**A first Action**_ _**Plan**_

The Green Paper on Innovation suggested various options. For the sake of effectiveness, this First
Action Plan outlines a limited number of priority actions to be launched speedily at Community level

Two-thirds of the world's advances in science and technology are made outside the European Union. The
expanding markets are outside Europe, primarily in south-east Asia, with its three billion inhabitants and an
overall income which in a few years will exceed that of the United States and the European Union
combined. Flows of capital, information and technology are global. Direct investment abroad soared from
68 billion dollars in 1960 to 1 650 billion in 1993, excluding intra-Cbmmunity investment. Strategic
alliances, especially in the RTD field, undermine the ability of governments to identify the beneficiaries of
their technology policies. Close on 40% of world trade is conducted within enterprises

_**to**_

and incorporates actions which are in progress or which have been announced since the publication of
the Green Paper and which were identified there as vital for the process of innovation.

This is a _first_ action plan, with the Commission both continuing to study some of the options
indicated in the Green Paper, the implementation of which requires a long-term approach, and also
proposing with regard to activities which are the responsibility of the Member States and applicant
countries to conduct a more thoroughgoing analysis in collaboration with them, with the aim of
establishing at a second stage a common framework of reference which can help to identify the
priority options, as well as opportunities for cooperation. With regard to the Community level, at this
stage the only measures considered are those for which the operating method could be described and
which can be inserted in the known budgetary framework, without incurring any new expenditure but
through the possible reallocation of available resources.

Innovation involves a variety of operators and implies an integrated approach with intensive
interaction. This means that the proposed measures are inevitably multiple and varied. For the sake
of clarity, they have been classified by order of decreasing chronology and likely effect in accordance
into the following three objectives:

- fostering an innovation culture in the economy and society;

- establishing a framework conducive to innovation;

- linking research and innovation more effectively.

This initial plan outlines a general framework for action at Community and Member State level, and
also for applicant countries [7] . It is intended to be the first stage in a lasting mobilisation of the
Community, the governments and those in the field for the benefit of innovation.

At Community level, the new actions will be launched immediately. Current actions will be speeded
up or consolidated, if need be. Reflexion will continue and the plan will be applied, where
appropriate, in the thematic fields and the industrial or service sectors where it seems suitable.

At national level, the Commission will carry out further analysis, in collaboration with the Member
States and applicant countries, in order to establish a common frame of reference and to help them
identify priority options and cooperation opportunities.

7 In compliance with the conclusions of the Council meetings in Copenhagen and Essen, Community
programmes or similar initiatives will be opened to allow the applicant countries to participate as part of the
strategy for preparing for accession. These countries are therefore concerned by a large number of the
points dealt with in the action plan. These are in particular the proposals on education and training, the
mobility of students and research workers, public awareness, as well as the involvement of these countries
in the Fifth Framework Programme's targeted socio-economic research. Furthermore, account must be
taken of these countries with regard to the implementation of the recommendations on competition and
improving the legal, administrative and regulatory environment. They should also be in a position to
benefit fully from trans-European capital markets. The concrete arrangements for their involvement in the
Fifth Framework Programme are still to be worked out. It is nevertheless likely that they will emphasise
university-industry links and measures for innovation among SMEs.
A special debate will be initiated with these countries as part of the structural dialogue on the way in which
they can be integrated in the action plan.

**?** **/**

_A - FOSTERING AN INNOVATION CULTURE:_

1.1 Innovation depends on creativeness, a sense of initiative and enterprise, a willingness to take
calculated risks and a readiness to cope with mistakes and accept social, geographical or
professional mobility. But innovation also needs other skills: the ability to anticipate needs,
careful organisation, and a capacity for meeting deadlines and controlling costs . Innovation
increasingly relies on a wide range of interaction, which means that skills in information
collection and processing and personal and social communication skills are also needed. A
favourable culture is essential.

The United States, with its frontier mentality and the idea of the melting pot, thrives on risk,
social and geographical mobility and straightforward relations. In Japan, culture and society
emphasise excellence, steady improvement and organisation. As for Europe, it has grown up
around social systems which differ widely but where, today, as a rule, risk-taking is shunned in
favour of seeking security and stability.

Changing the culture and the mentality of a people cannot be achieved by legislation or by any
short-term measures. Means of action exist, however. First and foremost come education and
training. The mobility of people facilitates the spread of knowledge and the flow of ideas.
Participative approaches make it easier for the groups concerned to adhere. Actions to inform
and raise awareness, in particular through the use of new media, together with the dissemination
of new methods of organising and managing business and government, are also needed.

/. _Education and training_

1.2. Initial education needs to concentrate on imparting the skills that are needed to produce and
implement innovation. Technical education and vocational training must not be neglected [8] . But
the acquisition of a basic educational grounding is essential to facilitate ongoing adaptation to
the new skills that innovation requires.

It is wrong to think that training at the start of life will always suffice. Training is a necessity
throughout life. It comes up against particular problems in SMEs (especially the limited
available time of managers and employees) which need to be dealt with through novel
solutions [9], possibly involving distance learning and multimedia techniques. The third
multiannual programme for SMEs proposes pilot projects to help find new approaches in this
area [10] .

There is also a need to bring education and business closer together, especially by means of
sandwich courses, so that apart from helping young people enter the job market it is possible to
prepare for the new skills or qualifications that are needed and to adapt training to these needs.
Alongside its education and training programmes, especially Leonardo da Vinci and Socrates,
the European Union contributes to these aims through the European Social Fund under various
Community objectives and initiatives such as ADAPT and EMPLOI.

"In 1996 Europe had 4.7 scientists and engineers for every thousand inhabitants, compared with 7.4 in
the United States and 8 in Japan. Also, the combined total of scientists and engineers in China, India
and Indonesia is now the same as the figure for the European Union" ("Inventing tomorrow: Europe's
research at the service of its people", p.6). COM(96)332 final, 10/7/96
The joint Council and Commission report on employment (SI(95)1000) stresses the importance of
adapting training programmes to the needs of SMEs and providing incentives for SMEs that want to

**10**

invest in training.
Proposal for a Council Decision on a Third Multiannual Programme for Small and Medium-sized
Enterprises (SMEs) in the European Union (1997-2000), COM(96)98.

**21**

**The Member States and regional or local authorities are invited to reinforce their action in these**
**fields and, in particular, to:**

**-** **take a critical** **look** **[11]** **at the programmes and methods of education, especially their ability to**
**stimulate critical sense, lateral thinking, creativeness, interpersonal communication,**
**teamwork, willingness to experiment, skill in finding and using information, learning ability,**
**entrepreneurial spirit;**

**-** **analyse the changes that apparently need to be made to the training of trainers;**

**-** **extend training, if need be, to include economics and** **management,** **company formation,**
**protection of intellectual property, design and marketing, especially in science and technical**

**courses;**

**-** **develop sandwich courses at the level of higher education and decompartmentalise**
**disciplines;**

**-** **encourage the effective command of several Community** **languages** **[12]** **:**

**-** **stimulate real cooperation between education and business;**

**-** **develop long-term partnerships between enterprises and training bodies;**

**-** **encourage broader access for enterprises to the best vocational training facilities in Europe.**

**The Commission will continue to implement the proposals contained in the White Paper on**
**Education and Training adopted in November** **1995.**

**It will promote the exchange of experience and the dissemination of good practice in these area**
**among the Member States and with the social partners by introducing a permanent "training and**

**innovation" forum.**

**1.3.** **The Commission therefore plans to introduce from 1997 an "Erasmus of** **apprenticeship"** **and to**
**draw up, with the governments and the social partners, a European apprentice statute.**
**Furthermore, as part of the follow-up to the European Year of Life-long Learning, it will draw**
**up proposals** **[13]** **seeking to facilitate, at European level, the valorisation and accreditation of skills**
**throughout life.**

**1.4.** **Lastly, with the "Learning in the information society" initiative, it will set out to coordinate**
**existing** **instruments** **and** **actions** **(education** **and** **training,** **research,** **trans-European**
**telecommunications networks, Structural Funds) to link schools throughout Europe using**
**existing national initiatives, promote the development of the software and content that are**

**11** **As in Denmark, where the Ministry of Education recently considered means of fostering an innovation**
**culture and entrepreneurial spirit from primary and secondary education. At Community level, the**
**matter has already been considered in the White Paper on Education and Training.** **(COM(95)590**
**final,** **29/11/95)**
**12** **A survey of 927 SMEs in** **1995** **as part of the** **Euromanagement** **action revealed that the language**
**barrier was a decisive factor for 67% of the SMEs that were eligible for Community R&D**
**programmes but were afraid to go ahead.**
**13** **On the basis of current evaluation of the Member States' transposition of the Council recommendation**
**of June 30, 1993 (OJ** **L181,23/7/93)** **on access to continuing education.**

**o**
_**u**_

needed and to assist the training of teams to provide instruction in the use of these new
technologies.

_2._ _Encouraging mobility_

1.5. The mobility of students, research workers, engineers or scientists from one country or industrial
sector to another, as from education or research to industry, encourages the transfer of
technology and the dissemination of know-how. In spite of efforts to promote it, such as the
programme for the training and mobility of researchers, this kind of mobility between research
centres, universities and industry is all too often hampered by practical or cultural barriers.
Similarly, as technologies are becoming more and more "trans-sectoral", mobility between
branches of industry needs to be made easier.

The Green Paper entitled "Education-Training-Research: Barriers to Transnational Mobility",
published at the end of 1996 [14], points out that the barriers to mobility arise mainly in the areas of
right of residence, social security, taxation and the lack of a legal framework at European level,
including for apprentices [15] .

At Community level, the Commission will introduce the priority measures to encourage the
mobility of students, teachers, engineers and researchers that have emerged from the debate on
this Green Paper.

In setting priorities for the Fifth Framework Programme for Research, the Commission is
proposing a wide programme with the main objective of enhancing human potential. It should in
particular boost the efforts to arrange for transnational secondments of young researchers and
engineers to businesses, in particular SMEs, to help with their innovation or technology transfer
projects. It will take all the necessary steps to make the mobility aid programmes of the
Community more flexible, particularly by:

   - making exchanges of staff one of the eligible cost headings in long-term cooperation projects
on RTD and the use of large-scale equipment [16] ;

   - linking mobility support measures and research projects, enabling their beneficiaries to
combine them in a single innovation project;

   - making age limits and authorised secondment periods more flexible, in order to enlarge the
potential pool of beneficiaries (older researchers, SME staff).

At national level, it will recommend establishing effective "interoperability" of the systems for
assessing career development or qualifications (e.g. the introduction, in the systems for
assessing government research workers, of a positive recognition of periods spent in industry,
on industrial projects or for patents filed, as well as the adoption by the enterprises or bodies
concerned of arrangements, in the event of external mobility, to ensure seamless careers).

_**3.**_ _**Raising public awareness and involving the operators concerned**_

1.6. Innovation can develop and spread only if it is accepted by society. It is stimulated by the
existence of demanding consumers who accept novelty. Innovation is not restricted to
advances in scientific knowledge and technical performance. Innovation in forms of social

14 COM (96) 462.
15 The Commission has asked a high-level group, chaired by Mrs Veil, to examine the barriers that still
hamper the free circulation of workers and individuals. On the basis of its findings, the grotfp will
draw up proposals to remove the legislative, administrative and practical barriers that have been noted.
16 Short-term scientific missions under COST are one example of short-term staff exchange.

_**IL**_

organisation and communication need to go hand-in-hand with technical or business
innovation. This is often more difficult, since it affects the attitudes, values and positions of the
social groups involved. There needs to be a special effort in this area.

The need for and beneficial effect of change, in the broadest sense, need to be widely discussed.
Mechanisms whereby enterprises, the public and their representatives can be involved in
discussing the major technological options and arrangements for the involvement of employees,
users or consumers pave the way for the acceptance and ultimate success of innovation.

There are many initiatives and successes at national level in these fields. The exchange of
experience between Member States needs to be stimulated, and also where appropriate the
linking in networks at European level of successful ventures, if this can help with their
dissemination and improvement.

1.7 The Commission will make a coordinated effort to use its various resources to identify best
practice and disseminate the methods facilitating the involvement of socio-economic operators
in managing innovation projects likely to have major social impact.

1.8. It will encourage greater cooperation among national and regional bodies responsible for the
promotion of science and technology and innovation and will disseminate the best practice, as
part of the INFO 2000 programme, especially via the national focal points network (MIDAS).

1.9. It will study the feasibility of greater cooperation among European television companies,
especially as part of the Media programme, with a view to using successful national experience
as a basis for promoting programmes for the popularisation of science and technology, as well
as ways of reflecting scientific work realistically in audio-visual fiction productions.

_4._ _Business management_

1.10. Involvement in the management of enterprises is not of course the responsibility of public
authorities. However, these authorities can and must create an environment conducive to the
ongoing improvement of business management and organisation. The rapid spread of
information and communication technologies will contribute greatly to these adaptations and
must be actively supported.

Innovation is primarily the responsibility of enterprises, and managing change is one of the
main challenges they have to cope with. But change is occurring with increasing speed,
affecting markets and techniques and the related methods of design, production and
organisation. If they are going to remain competitive, enterprises need to be able to absorb new
techniques. But it is just as important for them to modernise their structure and organisation
and reshape the methods, roles and responsibilities of each in order to innovate. They have to
become not only places of permanent apprenticeship but also learning enterprises.

"Agile" enterprises that are ready to react speedily to changing circumstances, to forge
cooperative links with a wide variety of external partners (other enterprises, universities,
consultants, centres of excellence) and thereby to constitute flexible sets of competence are
likely to be the best suited to the demands of innovation.

Innovation is also prompted by changes in the regulatory environment, the availability of
resources and forms of financing and communication. Enterprises need to keep an eye on
changes in these fields and keep a technological, economic and business "watch".

_**ts**_

Emulation of other enterprises, especially by means of benchmarking, is an effective way of
spreading good practice in these fields. There needs to be more widespread use of management
techniques [17] at the most suitable level, especially among SMEs.

**1.11.** For the benefit of enterprises the Commission will launch transnational pilot actions for the
networking of certain sectors or technologies (see section C3(iii) below). These actions should
be designed to explore best practice in the management and training fields. The results of these
projects will be disseminated throughout the Union. A European Guide to Industrial Innovation
will offer manufacturers a method of self-assessment for their strengths and weaknesses in the
field of innovation, together with a guide to the relevant help and advisory services.

**1.12.** In its communication on benchmarking the competitiveness of European industry [18], the
Commission pointed to the usefulness of this move for improving the competitiveness of
enterprises.

The Member States are invited to encourage the development of this practice which allows
enterprises to track their progress against the best performers in a number of key areas of their
activity (similar to the R&D "scoreboard" in the United Kingdom or to the company visits as
part of the TOP schemes in Germany and Spain, the "Références" programme in France or the
Inside UK Enterprise scheme in the United Kingdom).

For its part, the Commission will support the linking in a European network of the various
schemes at national level. It will introduce a Europe-wide "benchmarking" system, especially
in the field of quality.

**1.13.** The Member States are called on to reinforce their actions for the training of business managers
and the social partners in innovation management.

The Commission will support training schemes for innovation management, especially through
the development of European networks of business schools and their cooperation with industry
and SME support bodies. These actions will be especially designed to encourage thought about
new forms of business organisation and their impact on the support structures and SMEs.

As part of the operations under Objectives 2 and 4 of the Community ADAPT and SME
initiatives, the Commission will also increase its support for the training of business managers,
in particular of SMEs, in new management methods and the training for employees that is
needed to introduce these new methods in enterprises.

5. _**Public authorities**_

**(i) Innovation in the public sector**

**1.14.** Government policy-makers are paying more and more attention to innovation and technology.
But their idea of what is at stake and of the potential of technology [19], as well as of the details of
action on innovation, remains generally sketchy.

17 These methods include quality management concurrent engineering, flexible or "smart" production
methods, integrated logistics management, teamwork and the empowerment and involvement of
employees.
18 "Benchmarking the competitiveness of European industry", COM(96) 463 final, 9 October 1996.
19 The proportion of political leaders in the countries of the European Union with a scientific or technical
background is low; recent surveys among some governments have, confirmed that few of their
members were skilled users of computers or the Internet.

**10**

**26**

The Member States are invited to take steps to ensure that politicians, senior officials, regional
authorities, project and fund managers are informed and made aware of what is at stake with
innovation and technology.

**1.15** Public spending is close to and even exceeds 50% of gross domestic product in several
countries of the Union. In this context, improving performance and spreading innovation in the
public sector and in government can have a significant direct economic impact. This should
also contribute greatly to improving the environment in which enterprises operate, as
emphasised by the Advisory Group on Competitiveness (Ciampi Group) in its second report.

From 1997 the Commission, in conjunction with the European Institute for Public
Administration and on the basis of current work, will undertake a series of discussions and
exchanges of experience on the promotion and dissemination of innovation in government and
public services. A conference on this topic will be organised in 1997, and its findings could
result in the publication of a green paper at the beginning of 1998.

**1.16.** The Commission will continue its action under the "Information Society" initiative designed to
encourage innovative approaches in the public sector.

**(ii) Public contracts**

**1.17.** More active competition in the case of public invitations to tender is desirable, as it can
stimulate innovation. Several provisions in European legislation on public contracts allow for
derogation or special rules of application, especially in the special sectors (water, energy, etc.), if
a tender relates to innovative products or manufacturing processes; full use should be made of
these possibilities. Furthermore, the use of performance standards can make it possible to arrive
at innovative technical solutions while ensuring proper competition.

**(iii) Analysis of innovation policies and systems**

**1.18.** There is a need for careful monitoring and constant analysis of innovation processes, their results
and their impact at the socio-economic level. The comparative study of innovation systems,
policies and infrastructure in the developed nations, and especially in the European Union, needs
to be continued and exchanges of information and experience among the Member States
encouraged. It is also important to boost the development, coordinated by the Commission, of a
harmonised statistical information system including regular surveys on innovation in industry,
services and SMEs, while ensuring that there is no extra administrative burden on enterprises.

The Commission will reinforce its system of collecting and analysing information on research
and innovation. It will draw up a permanent management trend chart for innovation policy and
performance in Europe, with comparisons with the rest of the world. It will produce and
distribute widely a regular report on innovation in the Union, based on national and international
studies and analyses in this field.

**11**

**2>**

1. FOSTERING AN INNOVATION CULTURE

1.1 NEW ACTIONS

1- Education and initial and further training

Commission

- Set up a "training and innovation" forum to exchange experience and disseminate best practice
(1997).

Member States and regional authorities

- Make a critical examination of teaching programmes and methods and the training of instructors.

- Adapt the content of initial training to develop, from the earliest age, creativity, spirit of
enterprise, etc.

2- Mobility of students, research workers and teachers

Commission

- Put forward a wide programme aiming to enhance human potential in the Fifth Framework
Programme for Research (first half of 1997);

- Stimulate transnational "industrial PhDs" (placement of research workers/engineers in firms)
(pilot action in 1997).

- Make Community aids to mobility more flexible (5th FPRD).

Member States

- Adopt measures for the temporary secondment of research workers to firms, especially SMEs.

- Ensure that the conditions actually exist for mobility between research and enterprises
(assessment of qualifications, career development).

3- Innovation and management of enterprises

Commission

- Promote organisational innovation through Community instruments at its disposal (framework
programme, Structural Funds and training programmes, etc.) (1997/98)

- Introduce a benchmarking system at the European level, (pilot project in 1997)

4- Public authorities

Commission

- Develop exchanges of experience on the promotion and dissemination of innovation in

government offices and public services. Conference in 1997 and publication of a green paper in

1998.

 - Compile a permanent trend chart of innovation performance and policies in Europe (to be put in
place in 1997).

Member States

 - Develop initiatives to provide information and increase awareness among politicians and senior
officials of what is at stake with innovation.

**12**

_**it**_

**1.** **FOSTERING** AN INNOVATION CULTURE

1.2 CURRENT ACTIONS FOR IMPROVING THE INNOVATION ENVIRONMENT IN

EUROPE

**1-** Education **and initial and further** training

**Commission**

- Implement the proposals of the White Paper on Education and Training (especially Erasmus

apprenticeships, European apprenticeship statute).

- Pilot projects to encourage links between schools ("Learning in the information society"
initiative).

**Member State and regional authorities**

- Develop sandwich course training, especially at university level.

- Encourage the effective knowledge of several Community languages.

**2-** **Mobility of research** **workers,** **students and teachers**

**Commission and Member States**

- Launch a debate on the Green Paper with regard to the mobility of research workers, students and
teachers, and implement proven routes of action; examine and possibly implement the
recommendations of the Veil Group.

**3-** **Raising public awareness and involving those concerned**

**Commission**

- Develop initiatives to disseminate best practice in this field.

**Member States**

- Foster a scientific and technical culture and awareness of the beneficial effects of innovation.

**Commission and Member States**

- Involve enterprises, the public and their representatives in discussing major technological

options.

- Develop measures to increase the involvement of employees, users or consumers and to facilitate
the acceptance of innovation.

**4-** **Innovation and management of enterprises**

**Member States**

- Increase training activities for innovation management.

- Foster the development of the practice of "benchmarking" among enterprises.

**5- Public authorities**

**Member States**

 - Stimulate competition in public invitations to tender and the use of performance standards.

**13**

_**Xf**_

**B.** _**ESTABLISHING A**_ _**FAVOURABLE FRAMEWORK**_

**2.1.** **The establishment of an environment conducive to innovation** **needs,** **in the first instance,**
**competition to function properly. The next task is to introduce an effective system at an**
**acceptable cost for the protection of intellectual and industrial property. This also involves**
**constant efforts to lighten the burdens on** **enterprises,** **especially the administrative formalities,**
**while maintaining the protection enjoyed by consumers with regard to health, safety and the**
**environment. Lastly, innovators need to have easy access to the funding they require for the**
**various stages of their projects, and that their fiscal treatment should be conducive to**
**innovation.**

_**I.**_ _**Legal, administrative and regulatory**_ _**environment**_

**(i) Competition**

**2.2.** **Competition is one of the driving forces behind innovation. It is stimulated by efforts to**
**combat monopolies and to open and liberalise markets. The Commission has always devoted**
**special attention to innovation in its competition policy. The Commission will therefore**
**continue to ensure that competition functions properly in the internal market and**
**internationally. It will continue its action for the liberalisation and deregulation of sectors of**
**the European economy that have hitherto been protected** **or** **too strictly compartmentalised.**

**2.3** **The Commission, in applying competition law, acknowledges the economic importance of a**
**properly functioning patent system. It guarantees holders, by means of individual exemptions**
**as well as exemptions linked to technology transfer agreements, maximum freedom to exploit**
**their patents without any unwarranted distortion of competition. Recently** **[20]** **, it adopted a new**
**regulation exempting certain categories of technology transfer agreements, thereby**
**streamlining the rules that had previously governed such agreements** **[21]** **.**

**In the past the Commission has adopted similar regulations exempting specialisation**
**agreements** **[22]** **and research and development agreements** **[23]** **. The aim is to avoid an individual**
**notification system and case-by-case consideration, while ensuring legal security.**

**Since these two exemptions will expire on** **31** **December 1997, the Commission will revise them,**
**after a green paper that may be published, in order to update and adapt them to the current**
**circumstances.** **The rules on State aids in the field of research and development (new**
**arrangements of February 1996) set out to ensure equal treatment for the various operators in**
**this area.**

**Following the debate on the revision of** **the** **regulation on the monitoring of concentrations, the**
**Commission is putting to the Member States a proposal to expand the scope of European**
**merger supervision in order to cover a larger number of operations of Community interest and**
**to avoid enterprises having to give simultaneous notification of cooperation agreements to a**
**large number of national authorities that apply very different procedures, deadlines and**
**physical criteria. Mergers of Community interest would thus be supervised using uniform**
**criteria by the Commission acting as sole European antitrust authority. The Commission is also-**

**20** **Regulation** **No** **240/96 of** **31** **January** **1996.** **(OJ L31,9/2/96)**
**21** **The** **new regulation in fact abolishes the discrepancies between the regulations on patent licensing and**
**on the** **communication of know-how, eliminates** **or** **shifts** **to the** **appeals procedure (the period of which**
**is reduced from six to four months) several clauses which in these regulations prevented the**
**exemption of certain categories and provides for new lawful clauses to ensure greater contractual**
**freedom** **for the** **parties.**
**22** **Regulation** **No** **417/85 of** **19** **December** **1984 (OJ L53,22/2/85)**
**23** **Regulation** **No 418/85** **of** **19** **December** **1984 (OJ L53,22/2/85)**

**14**

**3***

proposing to harmonise the treatment of structural joint enterprises. Lastly, the Commission is
currently completing a green paper on rules for vertical agreements (exclusive distribution
agreements, etc.) in competition law.

With regard to new high-technology products, where markets increasingly overlap, exchanges
of information between the various bodies supervising competition are extremely useful. The
Commission will therefore continue its dialogue with the competition authorities in.the United
States, to allow approximation of the definitions of the relevant market, especially concerning
agreements with a high technology input.

**(ii) Protection of intellectual and industrial** property

      - _**Reviewing the**_ _overall_ _**structure**_

**2.4.** The overall structure of the European system for the protection of industrial property is far too
complex. A "Community" solution has been adopted for trade marks and designs (Office for
Harmonisation in the Internal Market in Alicante), as well as for plant breeding (Community
Plant Variety Office, provisionally located in Brussels), where incidentally the first protection
rights were recently granted. An international convention has been used, however, for the
European (or Community) patent. The Community can negotiate international agreements
(TRIPS agreements under the GATT, for example) and it can issue regulatory texts, but there is
a risk that they will have no effect on the convention for the European patent.

In the European Union there are currently three patent systems, only two of which are fully
operational. There are national patents and also European patents, which are the result of the
Munich Convention of 1973 and are administered by the European Patent Office in Munich.
The European patent is not a uniform industrial property right but it allows protection to be
acquired in as many European countries as the applicant wants. The advantage of this system is
its great flexibility, but there are some drawbacks because of the complexity and cost [24] . Also,
there is no provision in the system for any court at European level with jurisdiction in patent
disputes, which means that there is a possibility that courts in the Member States may make
different rulings.

The overall structure of the patent system should be completed by the entry into force of the
third system of protection, the Community patent, stemming from the Luxembourg Convention
of 1975. This convention, which was amended in 1989. has still not entered into force because
of delays in ratifying it by the twelve Member States that signed it.

The patent system in Europe was set up by means of international conventions. The reason for
this is that these initiatives were taken at a time when the Community's responsibility in this
field had not yet been established. This time is now over, and the Court of Justice has on
numerous occasions acknowledged the Community's power to act with regard to patents, if this
helps to attain an objective of the Treaty (free movement of goods or establishment of
undistorted competition).

According to the views expressed by users of the system, the European patent is generally
satisfactory, although there are two major changes that need to be quickly introduced. The first
concerns the patentability of biotechnological inventions, where current uncertainty should be
remedied by the speedy adoption of the new draft directive submitted by the Commission at the
end of 1995. The second change involves cutting the cost of European patents, and this could be
achieved by revising the system of fees charged by the European Patent Office and by adapting

24 The total cost of filing and maintaining a patent in eight Member States is about USD 120 000
(compared with USD 13 000 for the whole of the United States).

**15**

**V**

the procedures for translating European patents. Both of these ideas are currently being
considered.

As for the Community patent, the question is whether in its current form it still satisfies the
objectives that were outlined at that time or whether it would be better to adapt it to progress in
the construction of Europe and to the needs of users. In its current form the Luxembourg
Convention applies only to the twelve Member States that signed it in 1989. The enlargement of
the Community that has since occurred, and further enlargement in the future, require the
Convention to be adapted to the new circumstances.

The Commission will prepare in 1997 a green paper on the issue of the Community patent. It is

foreseen that this text will consider:

     - whether the Luxembourg agreement on the Community patent should be converted to a legal
instrument under the Treaty.

     - whether national patent convention should be further harmonised at Community level.

     - whether bridges should be built between the European and the Community patent system.

     - whether it is possible to adapt the system of taxes and duties in a way that corresponds to the
services provided and is not a barrier to the protection of innovation.

***** _**Special case of biotechnology and the information society**_

2.5 In advanced technology sectors, such as the information society or biotechnology, there are
considerable economic imperatives involved [25] . Speed of action or response is vital. There is a
need to achieve speedy harmonisation at world level of the rules of protection relating to new
technologies if we want to maintain the ability for relevant research in Europe and stimulate the
creation of new enterprises and the marketing of results.

The codecision procedure on the new draft directive on the legal protection of biotechnological
inventions needs to be completed as quickly as possible. For its part, the Commission will play
an active part in the consideration which is now getting under way with regard to the revision of
Article 27 of the TRIPS agreement and the follow-up to the Convention on Biodiversity. It will
ensure, in these discussions, that European industry does not have to cope with conditions that
are less favourable than its competitors' because of restrictive approaches to intellectual
property rights.

Article 27(1) of this agreement allows all inventions, products or processes in every
technological field to be patented. It follows that, in theory, data processing programs and
software inventions can be patented. On this basis the United States patent office has decided
in some cases to issue patents for data processing programs for which copyright, which is usual,
seemed inadequate, which would be impossible in Europe. This situation will become even
more complicated with the development of multimedia software and the advent of the
information society.

With regard to the patentability of software and the repercussions of information society
technologies on industrial property rights, the Commission recently started looking at the
matter together with those concerned with a view, if necessary, to supplementing the
harmonisation of the Member States' legislation. The Community has already adopted five
directives since 1991 on copyright and related rights. In order to meet the new challenges
related to the development of the information society, the Commission has published a Green

25 Products that have been on the market for two years or less account for 78% of income in the data
processing industry. The biotechnology market, valued at less than ECU 10 billion in 1996, should be
close to ECU 80 billion by the year 2000 (" Inventing tomorrow: Europe's research at the service of
its people").

**16**

**37**

Paper on Copyright and Related Rights in the Information Society, which prompted wideranging discussion among those involved. The Commission has just adopted a Communication
to the Council and to the European Parliament concerning the follow up of the Green Paper;
this one identifies four priority issues for which legislative proposals will be submitted soon
(rights of reproduction, right of comunication to the public, legal protection of the integrity of
technical systems and rights of distribution. In addition, it is proper to give special attention to
the questions linked to the application of the rules of responsibility within the global
environment of the Information society.

      - _Other harmonisation methods_

2.6. In view of the major economic importance of designs and models and of the differences among
the Member States with regard to design protection, the Commission will continue its efforts
with a view to harmonising national laws [26] and to create a body of Community law in that
field [27] . In the field of employees' inventions it will launch a study on the need for and possible
content of harmonised national laws and will start a discussion of this topic with those
concerned. Lastly, in the light of comments on its green paper on Utility Models it will make a
decision on the advisability of draft Community legislation in this field.

2.7. As the Commission has pointed out in its Confidence Pact for Employment, the potential of the
internal market will not be attained unless the relevant directives are transposed into national
legislation and actually applied. In particular, in the key area of intellectual property the
situation gives rise to concern, since only one directive has been transposed by all the Member
States. The Commission asks the Member States in question to assume their responsibilities
and to submit to their respective parliaments the required draft legislation by the end of 1996 [28] .

      - _Reducing costs_

2.8. In the field of patents, there are supplementary proposals designed to solve the tricky problem
of translation, as well as alignment wiuYthe systems of rival countries with regard to eligibility
and costs and help in combating counterfeiting.

The Commission supports the efforts of the European Patent Office to cut the costs of filing and
maintaining patents, such as the review of current requirements concerning translation (along
the lines of the 1975 Convention on the Community Patent, which requires translations only
for the summary and in the event of protection being invoked) and will study whether to
introduce incentive measures for SMEs, individual inventors and universities ("small entity
fee").

With a view to a better allocation of the resources relating to fees for European patents, the
member States are called on to examine the current system of apportioning the fees for
maintaining European patents (half of which at present are paid to the European Patent Office
while the other half are retained by the contracting States), in the light of the following
questions: (1) is it appropriate that taxes to maintain the validity of European patents should
finance part of the national patent systems? (2)should the present distribution ratio be kept as it
stands or should it be modified? (3) within the framework of promoting innovation, doesn't this
system entail negative effects, in particular when a large part of these resources is directly
allocated to the general budget of the State and not to tasks directly related to innovation?

26 Modified directive proposal of the European Parliament and of the Council relative to the legal
protection of designs. OJ n° CI42 of 14 May 1996, page 7.
27 Regulation proposal of the European Parliament and of the Council on community designs and
models. COM(93)342 final. OJ N°C29
28 Action for Employment in Europe: A Confidence Pact, CSE (96) 1 final, 05.06.1996.

**17**

_**1}**_

      - _Promoting protection_

2.9. Actions to make enterprises aware of the range of possibilities provided by the system for
protection and training are needed. The Commission, in the Fifth Framework Programme, will
reinforce its activities in this field, especially:

   - exchanging best practice among the Member States (especially the national patent offices)
and with the EPO concerning the dissemination of "patent" information, and especially ways
of making it accessible and comprehensible to SMEs;

   - checking the novelty of research proposals [29], and the introduction of an information service
for those involved in the framework programme (" IPR-Help Line").

**2.10.** The Member States are also invited to develop, with full regard for the international dimension,
their training activities on protection [30] .

      - _Combating counterfeiting_

**2.11.** Counterfeiting imposes a significant cost [31] . It therefore constitutes a special threat to SMEs,
which are often reluctant to take legal action, especially in a third country.

The Member States are invited to set up a support system for for SMEs and universities in the
event of disputes and, where appropriate, loan procedures designed to finance the cost of a
patent and the introduction of insurance schemes to protect enterprises, especially SMEs,
against infringements of their intellectual and industrial property rights.

The Commission has ordered a study on the potential role of the Community, by way of
supplementing national action, in combating counterfeiting and will start consultation on the
basis of the results.

**(iii) Administrative simplification**

**2.12.** "Administrative and regulatory constraints cost far too much in Europe. Some studies suggest
the cost comes to more than ECU 100 billion a year [32], particularly disadvantaging SMEs. Both
the Community's approach and the work of national authorities in this area need to be
reviewed." [33 ]

A step in this direction has been taken with the establishment of the Molitor Group [34] and the
creation by the Commission, as part of its integrated programme for SMEs and craft industries,
of the _Committee on the Improvement and Simplification of_ _the_ _Business Environment._ This
committee provides the framework for the exchange of best practice in this area between the
Member States and the Community. The Commission will put a proposal to the committee for
a special programme on innovation.

29 The QUICK SCAN system pilot project under the Innovation programme, and in conjunction with the
EPO, shows that the costs involved come to less than 0.5% of the total costs of the project, and that it
affects some 5% of the projects, which have to be redefined, reorganised or rejected for the lack of
novelty.
30 Like Germany, which created 100 teaching posts in higher technical education during the first half of
1996.
31 In 1994 industry in Europe spent about ECU 2 billion on legal or out-of-court proceedings to protect
patents.
32 A survey of 8 000 SMEs by the French Ministry of Industry in 1995-1996 revealed that the average
annual cost of completing official forms was equivalent to one person working full-time for three
months.
33 Action for Employment in Europe: A Confidence Pact, CSE (96) 1 final, p.8.

**18**

_**Ih**_

      - _Business start-ups_

The formalities relating to business start-ups, together with all the other compulsory procedures,
are generally more complicated and take longer for European enterprises than for their
competitors elsewhere. This has an effect on their dynamism, especially with regard to
competitiveness.

The studies and investigations that have been conducted have shown that some Member States
had already started a sustained effort towards administrative simplification. In some countries of
the European Union, the formalities for starting up an enterprise have thus been reduced to a
single form at a one stop shop . Other countries that have not adopted measures of this kind are
called on to follow this example and to simplify the formalities for setting up new enterprises.
(Measures for stimulating business start-ups are also referred to in points B2 (i) Financing and
C3 (iii) Start-up of technology-based companies.)

      - _Analysis of the impact of rules on innovation_

2.13. In the area of the internal market, the Commission recently launched a pilot project designed to
simplify legislation in four test sectors: the SLIM initiative (Simpler Legislation for the Internal
Market), a testing ground for more ambitious actions. If the pilot project is a success, the
Commission will take account, when new sectors are being considered as part of the SLIM
initiative, of the possible impact of the legislation on innovation and will ask the SLIM teams
involved to attach the required importance to this aspect during their work.

As has been done in some Member States, the Commission will test an ex-ante mechanism for
assessing the impact of regulations on innovation [35] as part of the general guidelines for
legislative policy [36] .

A much more uniform application of Community rules by national administrations also needs
to be encouraged. This requires greater cooperation among the relevant authorities in the
Member States, in line with the Council Resolution of 8 July 1996 [37] . The Commission will
develop its support actions, especially with regard to the exchanging and joint training of
national officials, similar to the Mattheus and Karolus programmes.

      - _One stop shops to support innovation_

2.14 The readiness of public authorities and private operators to provide support services to SMEs
has often resulted in a variety of advice, information and assistance services at national or
regional level, the relevance and intelligibility of which are no longer obvious to the recipients.

34 Comments of the Commission on the report of the Independent Experts Group on Legislative and
Administrative Simplification, SEC(95) 2121 final, 29 November.
35
Similar to the German Federal Ministry of Economic Affairs, which indicated in a report entitled "The
future of the German industrial site", adopted in 1993, that "the German Government will ensure
that existing or planned legislative and administrative provisions will be examined to see
whether they represent an obstacle to innovation and to avoid, in the future, other provisions
with the same effect**. A working party on the "deregulation of research and innovation" was
formed 18 months ago within the Ministry of Research, Technology and Education. It reviews laws
and regulations, etc., from the angle of research and innovation. It is advised by external experts from
many disciplines. The comments are sent to the relevant ministry, which is required to reply.
Experience so far has shown that 70-80% of complaints are unfounded or can be easily resolved by
properly applying existing rules. Another important problem that was identified is the multiplication
of legal texts on the same subject but starting from different angles. The question is here is one of
coordination.
36 SEC (95) 2255/7
37 OJ C224, 1/8/96

**19**

The Member States where there has been no initiative along these lines are invited to provide
SMEs with networks of one stop shops operating at local or regional level which can be
contacted by enterprises and others involved in innovation for information on innovation
support questions and to make the best possible use of the opportunities offered by new
information and communication technologies in these fields.

At Community level the Commission will disseminate good practice in this field and implement
greater coordination among the various networks for research and innovation support that are its
responsibility. It will also ensure better contact between these networks and the national bodies
performing the same functions in the Member States, in order to draw on existing bodies with
acknowledged expertise. It will promote the EuroInfoCentres as the initial contact points for
SMEs that do not yet have links with other networks [38] .

(iv) **Company law**

Initiatives are needed concerning the European company statute, the promotion of EEIGs and the
joint undertaking or private company statutes.

    - _**European**_ _company statute_

**2.15.** The adoption of the European company statute would make it possible to lift certain obstacles to

innovation that stem from the application of fifteen different legal systems and would help to
attract the private capital that is needed for major innovation projects [39] . Enterprises in Europe
would benefit from a legal framework adapted to the internal market and world competition.

In November 1995 the Commission initiated a wide-ranging consultation of the institutions and
social partners at Community level concerning the Communication of 14 November 1995 [40] on
informing and consulting workers.

The primary aim of this Communication is to make the Community framework in this area more
consistent and complete and to facilitate the adoption of the European Company Statute which
has been with the Council for many years, and consequently some other proposals for statutes
such as those relating to the European cooperative society, the European association and the
European mutual society, as well as the proposal for the tenth directive on cross-border mergers.

The Commission has set up a group of high-level experts responsible for presenting proposals
which could resolve the impasse affecting these particular matters.

**•** _**Other**_ _types of company_

**2.16.** The European Economic Interest Grouping (EEIG) is an instrument for cooperation among
enterprises which has already proved its worth for launching and managing innovative projects.

The Commission will encourage better dissemination of information on EEIGs.

**2.17*** In the search for a structure that will make genuine legal integration a possibility, in addition to
the cooperation permitted by EEIGs, the Commission is examining the feasibility of a joint
undertaking statute based on Article 130N of the Treaty, which provides for the possibility of

38 Proposal for a Council decision on a Third Multiannual Programme for Small and Medium-sized
Enterprises (SMEs) in the European Union (1997-2000), COM(96) 98 final, 20 March 1996.
39 The Ciampi Group estimated mat the lack of such a framework involves enterprises in an extra cost of
ECU 30 billion every year. At the conclusion of the Florence Summit the European Council asked
for negotiations to be speeded up with a view to its speedy adoption.
40 COM(95)547 final, 26/11/95

**20**

the Community's setting up "joint undertakings or any other structure necessary for the
efficient execution of Community research, technological development and demonstration
programmes".

**2.18»** It also seems useful to encourage the creation at national level of a simplified private company
statute. A flexible legal instrument of this kind would help the formation of small enterprises
and companies with private share ownership, which are often innovative, without affecting the
safeguards which company law must continue to provide for companies with wide share
ownership.

(v) **Standards**

**2.19.** The creation of an environment for standards that is conducive to innovation instead of

hampering it requires the promotion of performance standards and voluntary agreements, better
links between the formulation of standards and scientific and technical development
(perinormative research), together with greater awareness among those who devise and use
standards, especially SMEs.

The Member States (and, in their areas of responsibility, the European standardisation
committees) are invited to encourage the adoption of voluntary standards between
manufacturers and suppliers and, whenever possible in the technical rules and standards they
issue and for public contracts, opt for performance standards, thereby ensuring greater freedom
for designers of new products and stimulating competition among suppliers.

They are also invited to increase their actions for informing and raising the awareness of
enterprises, and also of industrial designers and research laboratories working on standards, and
to promote the involvement of industry and SMEs in standardisation bodies and committees.

The Commission intends in its Fifth Framework Programme to devote more attention to the
links between research projects for the development of new technologies and standardisation
activities (especially prestandards), as well as to the application of scientific knowledge to
measuring performance (standardisation-oriented research and metrology). The Joint Research
Centre (JRC) will have a special role to play in this latter area.

The Commission will catalyse initiatives of market players for the deployment of new
standards applications through experimentation, validation and demonstration (pilot) projects.

The Commission will promote cross fertilisation between sectors by stimulating the
assimilation of standardised products, services and best practices from highly innovative
sectors into more classical industrial sectors.

_**2.**_ _**Financial environment**_

**(i) Financing**

**2.20.** The question of financing is one of the major priorities that emerged from the discussion
prompted by the Green Paper on Innovation. In this field a lot depends on private initiative or
on the national or regional dimension. The aims to be pursued include:

   - developing a trans-European capital market for innovative enterprises, serving as the
counterpart of the NASDAQ in the United States, as well as encouraging additional
initiatives at national level;

**21**

_**•>>**_

   - encouraging investment in equity finance, in particular through venture capital, especially for
new enterprises (start-up) and high-growth innovative enterprises which are a major source of
new jobs [41] ;

   - improving the interfaces between those involved in innovation (including participants in
Community research programmes) and the world of finance [42] .

For its part, the Commission has to ensure that the right framework conditions are in place, i.e.
especially the effective introduction of the single market and compliance with the rules of
competition. It also plans to work on ensuring that best practice is disseminated and facilitating
their adoption, primarily through support for pilot actions but also by making full use of the
Structural Funds and other existing instruments such as the EIB or the European Investment
Fund.

**2.21** - _**Development**_ _of_ _**capital markets for high growth**_ _enterprises_

The Commission will see to it that the framework conditions are put in place for the
development and proper operation in Europe of stock markets for "growth enterprises".

In particular, the Member States need to complete the transposition into national law of the
directives on financial services and information on enterprises, cooperation among national
supervisory bodies needs to be increased, and the remaining legislative or regulatory obstacles
need to be removed. There is also a need to create an environment conducive to their proper
operation in terms of:

      - informing enterprises, and preparing applicants (the multiannual programme for SMEs
provides for the part use of the Euromanagement initiative);

       - practices for dissemination of information on enterprises;

       - training of required specialists (analysts);

      - electronic communication systems, etc.

A study which is being conducted as part of the Innovation programme will allow to specify the
actions to be undertaken.

      - _**Investing**_ _in_ _**equity**_ _**for**_ _**innovation**_

**2.22.** The Commission will disseminate existing best practice to direct long term savings (pension
funds, life insurance, save-as-you-earn schemes, "business angels") towards investment
involving risk.

2.23. It will endeavour to consolidate the development of venture capital in Europe by encouraging
the establishment of a favourable fiscal and regulatory framework in the Union and by
favouring the establishment and use by the profession of performance statistics which could be
evaluated in an objective and comparable manner at international level, especially with a view
to facilitating the raising of new capital among institutional investors.

41 In 1994 ECU 310 million was invested by venture capital in Europe in start-up projects, representing
5.7% of the value of all such investment that year. In the United States the corresponding figure was
37%. The proportion of venture capital invested in technology-based projects in Europe in 1993 was
17% in terms of value. In the United States the figure was about 80%.
42 In order to encourage investment in high-technology projects, EUREKA prompted in 1995 the
"Interlaken Declaration", which was signed by banks in many EUREKA countries as well as by the
EIB. This declaration represents an indication of goodwill with the aim of examining, in a favourable
light but without any guarantee of acceptance, applications for risk, investment from EUREKA
projects.

**22**

**3***

2.24. Also, as indicated in the Confidence Pact for Employment, the Commission plans to strengthen
cooperation between the EIB and the Structural Funds in order to develop financial instruments
for the benefit of innovative enterprises and projects in the least favoured regions.

**2.25.** In collaboration with the EIF, the Commission will study the possibility of introducing
mechanisms to support venture capital investment which have already proved successful, in
particular in the United States (loans based on the amount of funds raised), and whose leverage
effect on investors' anticipated returns minimises the impact of their fiscal treatment.

2.26. The Commission will endeavour to strengthen the actions of the European Investment Fund in
favour of innovation by introducing a pilot mechanism to encourage venture capital funds in
which the EIF will have holdings to invest [43] in the early stages of investment and innovative
projects.

      - _Developing interfaces between investors and innovators_

**2.27.** Using existing bodies, the Commission will develop the exchange of experience and the
dissemination of best practice between public or private national and regional operators [44] . As
part of the Innovation programme, it will provide support for transnational cooperation for the
joint testing of new methods (e.g. technology rating, use of patents as guarantee, etc.).

2.28 The Commission will endeavour to improve access to private finance (venture capital) for those
involved in Community research programmes (and Eureka). This could involve the setting up of
an "Innovation Financing Help-Desk" designed to inform potential investors about current
projects and their potential (e.g. access to Eurotech Data) and to help the enterprises and
researchers in question to have easier access to private capital, especially at national level (e.g.
information on sources and terms of access to venture capital, investors' expectations, etc.).

**(ii) Statutory deductions**

**2.29.** The Commission has already issued a number of recommendations and communications in
fields affecting the fiscal treatment of innovation. Two examples are the communication on the
fiscal environment of small and medium-sized enterprises (SMEs) and the recommendation
concerning the taxation of SMEs [45] .

The Commission has previously stressed the need for a global approach to the question of
statutory deductions (direct taxes, indirect taxes, social security contributions) in the wider
context of Community policies.

The European Council in Florence [46] asked the Council for a report on the development of tax
systems within the Union that took into account the need to create a fiscal environment which
stimulates enterprises and the creation of jobs. This work will include possible actions to
improve the fiscal environment of enterprises, which would also help innovation. There is a
need, for example, to review the fiscal treatment of cross-border payments, interest and
charges, since the Council has not been able to reach agreement on a Community solution.

Given that intangible investment has a strong work content (research, training), it is much more
affected than tangible investment by the steady rise in labour-related tax and social security

43 Since June 1996, the statute of the FEI allows it to take such participations
44 The first topics may be the stimulation (of networks) of Business Angels and their involvement in
innovation, securitisation, hybrid financing (public-private) or the assessment of technical risk by
financial institutions.
45 94/390/EC,dd 25/05/94, OJL177dd 09/07/94.
46 See conclusions of the Presidency, Florence 21 and 22 Juin 1996, SN/300/96

**23**

**3**

contributions. This structural trend, which has been detrimental to employment, ought to be
reversed, as was pointed out in the White Paper entitled "Growth, Competitiveness,
Employment".

In 1997 the Commission will consider a communication on taxation and innovation which will

take into account the effects of the trend in the structure of statutory deductions and which will
propose to the Member States a number of "good practices" in this area, based on an analysis of
national circumstances in the light of work under way in the Member States and the OECD.

230. The Commission will analyse means of promoting a fiscal and accounting treatment of
intangible investment, especially in training [47], that is conducive to competitiveness.

47 The White Paper on Education and Training recommends equal treatment for tangible investment and

investment in training.

**24**

_**to?**_

2. **ESTABLISHING A FRAMEWORK CONDUCIVE TO INNOVATION**

**2.1** NEW ACTIONS

**1-** **Protection of intellectual and** **industrial** **property**

**Commission and Member States**

- Launch of a Green Paper on the issue of the Community patent (September 1997)

**Commission**

- Set up a service of assistance on intellectual property (IPR-Helpline) for Community research
(1997)

**Member States**

Set up instruments to inform and help SMEs and universities in the event of disputes.

**2-** **Administrative simplification**

**Commission**

- Introduce a pilot mechanism for the ex-ante assessment of the impact of regulations on
innovation (end 1997).

- Implement operational procedures for coordinating Community innovation support networks
(1997)

**Member States**

- Set objectives and a precise timetable for simplifying business start-up formalities.

**Member States and local authorities**

- Speed up the rationalisation of innovation support activities and bodies.

**3-** **Financing**

**Commission**

- Reinforce EIF action in favour of innovation and cooperation between the EIB and the Structural
Funds (beginning of 1997).

- Improve the links between Community research and risk capital, particularly through the
provision of information and guidance services for those taking part in the framework
programme and for investors (mid-1997).

- Develop the exchange of experience and the dissemination of best practice between **Member**
states and operators (1997 and 1998).

**Member States**

- Introduce the framework conditions for stock exchanges for growth enterprises.

 - Make greater efforts to direct "patient" capital towards risk investment.

**4-** **Taxation**

**Commission**

 - Consider a communication on "taxation and innovation" (possibly in 1997).

**Member States**

 - Promote fiscal and accounting treatment more favourable to intangible investment.

**25**

_**h**_

**2.** **ESTABLISHING A FRAMEWORK CONDUCIVE TO INNOVATION**

**2.2 CURRENT ACTIONS FOR IMPROVING THE INNOVATION ENVIRONMENT IN**

**EUROPE**
**1-** **Competition**

**Commission**

**•** **FoIlow** **T** **up** **to the Green Paper on merger monitoring, extending the field of application of unified**
**European monitoring of mergers and harmonising the treatment of joint structural enterprises.**

**• Publish a green paper on the application of the rules of competition to vertical agreements.**

**• Continue the dialogue with the competition authorities in the United States, to allow the bringing**
**together of the definitions of relevant market particularly in agreements with a high technology**

**content.**

**2-** **Protection of intellectual and industrial property**

**Commission and Member States**

**• Complete the harmonisation of legislations to take account of developments linked to the technologies**
**of the information society and supplement legislations on design protection and employees'**
**inventions.**

**Commission**

**• Strengthen anti-counterfeit measures.**

**Member States**

**•** **Ensure the adoption of the proposal for a directive on biotechnological inventions.**

**• Support the efforts of the European Patent Office to reduce filing costs.**

**• Transpose the European directives on the protection of intellectual property into national legislation by**
**the end** **of 1996.**

**• Develop training in this field.**

**• Make enterprises aware** **of** **the competitive benefits** **of** **protection.**

**3-** **Administrative simplification**

**Commission**

**• Introduce into the work of the Committee for the improvement and simplification of the business**
**environment a special action on innovation.**

**• Accord the required importance to innovation when simplifying administration (e.g. in the choice of**
**sector under the SLIM project).**

**Member States**

**• Provide enterprises with one-stop shops for innovation questions.**

**4-** **I^gal** **and regulatory environment**

**Company law**

**Council**

**• Speedy adoption of a European Company Statute.**

**Commission**

**• Continue to encourage the use of European Economic Interest Groupings, especially by providing**

**better information.**

**• Study the feasibility of creating a joint undertaking statute (Article** **130N** **of the Treaty).**

**26**

_**h\**_

**C-** **GEARING RESEARCH TO INNOVATION**

**3.1.** **European firms have more difficulty than their competitors in turning the fruits of research into**
**innovative products. The wide variety of situations in Europe means that this is not always true**
**to the same extent, of course, but a number of indicators show that the efforts made so far have**
**been inadequate** **[48]** **.**

**3.2.** **Decision-makers and taxpayers regard an increase in research input as justifiable in a period of**
**cuts in public expenditure** **[49]** **and when businesses are striving to become competitive, if its**
**advantages and spin-offs for society (health research, environmental protection, energy savings,**
**etc.) and for new products, processes or services are clearly perceived.**

**Of course, research has the further objective of pushing back the boundaries of knowledge**
**without necessarily bringing immediate practical benefits for industrial applications. Both basic**
**and longer-term research are preparations for the future, but such work may also produce spin-**
**offs in terms of immediate industrial applications. It therefore deserves to be pursued,**
**particularly at national level, where most money is spent on it, but also at Community level in**

**certain cases.**

**In knowledge-based economies, the efficient systems are those which combine the ability to**
**produce knowledge, the mechanisms for disseminating it as widely as possible and the aptitude**
**of the individuals, companies and organisations concerned to absorb and** **use** **it. The crucial**
**factor for innovation is thus the link between research (the production of knowledge), training,**
**mobility, interaction (the dissemination of knowledge) and the ability of firms, particularly**
**SMEs, to absorb new technologies and know-how.**

**48** **The document "The Competitiveness of European Industry"** **(COM(96)** **463/3) is clear in its diagnosis:**
**"Research and development represents another significant form of intangible investment for which**
**European performance is insufficient. In spite of maintaining an advanced science base, total European**
**spending on R&D at 1.9% of GDP is up to one-third lower than that of the United States (2.5%) and**
**Japan (3.0%). Research undertaken and financed by industry itself is an area for which the European**
**lag with the United States and Japan remains particularly large** **(1%** **of GDP compared with 1.6% and**
**2.2%** **respectively).**

**Europe has not been using its advanced base in science and technology to the best advantage and**
**indeed the European research base does appear to be less market-oriented than that of its major**
**competitors. Product development makes up less than half of R&D spending in Germany and France**
**compared with over 60% in the United States and Japan. In addition, fewer human resources are**
**devoted to R&D. Scientific research personnel represent only 0.47% of the labour** **force,** **compared to**
**0.74% in the United States and 0.80% in Japan.**

**Between 1984 and 1993, the European Union lost share in patents, the principal method of protecting**
**intellectual property, for all sectors except aerospace and transport equipment. In terms of the total**
**number of patents, however, these two sectors remain quite minor. In chemicals, the loss in share**
**remained limited. The most significant loss took place in electronics, a sector in which R&D is highly**
**intensive and which exerts considerable influence on innovation in the rest of industry through**
**technology embedded in investment goods".**

**49** **At the conclusion of** **its** **meeting in Florence the European Council asked Member States to strengthen**
**their efforts to re-balance their budgets in the light of the general principles already identified,**
**particularly with a view to reducing expenditure rather than increasing revenue, to restructure their**
**expenditure selectively so as to promote intangible investment in human capital and research**
**and** **development,** **innovation and the infrastructures essential to competitiveness: SN/300/96.**

**27**

*** ***

3.3. This requires a series of specific, essentially national measures which the Community can
support by disseminating good practice, establishing gateways between national innovation
systems and taking similar or complementary measures at Union level.

The second series of measures is concerned with the architecture and methods of the Framework

Programme, the aim being to meet the needs of industry and society more closely and to
integrate the innovation and SME dimensions fully, particularly through the development of the
Task Force system as a coordination mechanism.

Lastly, the Community will see to it that other policies and instruments, particularly the
Structural Funds and international cooperation schemes, are properly mobilised to this end.

_I. National measures with Community support_

3.4. There are huge differences between national contexts, and all initiatives taken will need to be
tailored to the situation in the country concerned. A number of **general recommendations** can
nevertheless be applied according to the needs of each innovation system. They concern:

(i) • a long-term strategic approach to research;

(ii) • strengthening of research by industry, in both absolute and relative terms;

(iii) «start-up of technology-based companies;

(iv) «closer cooperation between public, university and industrial research;

(v) • expansion of the capacity of SMEs for absorbing new technologies and know-how;

(vi) •demonstration of effective approaches to innovation.

**(i) A long-term strategic approach to research**

**3.5.** Europe needs to develop a long-term strategic approach to research and its applications which is
targeted more closely at growth sectors of the market (including services) and at relevant gaps in
national markets [50] . Initiatives of the "Key Technologies", "Delphi" and "Foresight" variety may
help direct collective effort towards those sectors, disciplines or technologies which will be most
crucial in the future. Their forte lies in their ability to foster broad-based discussion of potential
technology options, to generate industry/research/public-sector/training/financing and other
networks and to spark off interdisciplinary and inter-sectoral thinking.

The Commission's role will be to:

     - facilitate exchanges of experience between Member States in this sector;

     - exploit the results of these initiatives to identify suitable pathways on a Community scale;

     - strengthen technology watch activities at European level within the European Science and
Technology Observatory (ESTO), set up by the Institute for Prospective Technological
Studies of the JRC as a focal point for Member States' observatories.

The Commission invites Member States which have no experience in this area to consider
pursuing this type of long-term approach (it will, if necessary, make a financial contribution
from the Structural Funds).

50 The expected growth in the services sector has better prospects for job creation than manufacturing
industry, for example. The innovation process in mis sector is very different from that of more
traditional sectors.

**28**

_**W**_

The Commission will also set up a working party to examine the types of - and means of
administering - research and technology transfer programmes best suited to the needs of firms in
the services sector, based on the experience gained through specific programmes which are
already aimed directly at services (e.g. telematics, transport) and through the Leonardo training
projects.

**(ii) Strengthening research carried out by industry**

**3.6.** The share of GDP devoted to research financed by industry varies widely from one country to the
next: some are already above the level of our competitors, while others still have a long way to
go. The total for Europe is 38% below that of the USA and 55% below that of Japan. Good
practice, already fairly widespread but requiring strengthening in certain regions, includes:

    - involving industry in defining research programmes and, where appropriate, in assessing
proposals;

    - increased contract activities of public research centres and universities (some of their
resources must come from industrial contracts, obtained through competition);

    - generalised cooperative research programmes (of the COST or EUREKA variety), requiring a
minimum participation from businesses;

    - institutional mechanisms or suitable tax incentives.

Member States are requested to draw up quantified and ambitious objectives aiming to increase
the share on the Gross Internal Product dedicated to research, to development and to innovation,
in particular by encouraging research undertaken by industry (in particular the one financed by
enterprises or the one financed by governments within the limits allowed by article 92 of the
Treaty).

**(iii) Start-up of technology-based companies**

**3.7** Actions for encouraging researchers and engineers to start up technology-based companies,
whether within universities ("campus companies") [51], located in science parks or as spin-offs
from large firms, need to be intensified.

Member States are invited to step up the action they are taking in this area, subject to the rules
governing State aid and with emphasis on indirect measures, by exploiting existing structures
which have been proved to work, such as the European Community Business and Innovation
Centres (EC-BICs).

The Commission meanwhile will begin in early 1997 to organise, as part of the Innovation
Programme, a more thorough exchange with Member States on the best practice in this domain,
involving leading players in the field. This exchange will concentrate on measures for
facilitating the spread of such practice (covering intellectual property rights, social rights,
financial arrangements, etc.) and national or regional promotion schemes.

51 Numerous empirical studies have demonstrated the economic impact of mis type of company,
particularly where innovation dissemination is concerned (Storey, 1996), and the added value of
public support for their start-up (Mustar, 1995).

**29**

_**•f**_

It will support the dissemination of best practice through pilot projects involving, for example,
university technology-transfer departments and the regional institutions concerned (local
authorities, chambers of commerce etc.), risk capital companies and technology brokers.

**(iv) Closer cooperation between public research, universities and industry**

**3.8** This type of cooperation needs to be intensified at national and regional level and geared more
effectively towards innovation, start-up of new companies and. more generally, the transfer and
dissemination of knowledge by:

   - closer links between research with training, by anticipating the needs of the productive
sector;

   - opportunities for universities and researchers to spend some of their time developing a

company;

   - a legal instrument enabling university staff and public research centres to conclude exclusive
contracts with industry for exploiting results (already practised in several countries), or by
taking equity participation;

   - encouraging research and technology organisations to introduce management and assessment
parameters taking these aspects into account and to develop international benchmarking
practices;

   - stimulating dialogue between the producers and users of technology (such as sectoral and
inter-sectoral forums, technology clubs, etc.).

The Commission will continue to analyse the existing barriers and the factors conducive to this
cooperation and will disseminate the results to interested circles on a wide scale.

It will support the efforts made at national, regional and professional level to improve the
management of research and technology centres to gear them up for innovation and will organise
transnational sectoral or trans-sectoral forums with the aim of setting up specific cooperation
schemes, and will ensure that they are professionally organised and managed.

The aim of these forums will be to foster dialogue with industrial and research circles and
between representatives of industry themselves on technological and organisational challenges
requiring a response on **a** European scale via the framework programme or other mechanisms.
The forums might constitute a basis for exchanges of best practice amongst firms and sectors of
activity. If the mechanisms enable key pilot schemes to be identified, the Commission will
ensure that the necessary resources for trying out these innovative approaches are made
available.

The Commission will also draw on the experience of the research-industry Task Forces in order
to strengthen cooperation between players and disciplines and to concentrate and coordinate the
efforts made.

**(v) Expansion of SMEs' capacity for absorbing new technologies and know-how**

**3.9.** This aim is to be pursued whatever the origin of new knowledge, methods and technologies.
On a national scale this would involve such schemes as:

   - enhancing the effectiveness and transparency of national or regional innovation support
activities;

**30**

**<W**

    - developing the job of mediator -between research, technology and SMEs (interface services
similar to the British Business Links, technology follow-up teams similar to the French
_centres de resources technologiques,_ etc.)- able to put technological problems in the context
of all SME innovation requirements (organisation, training, marketing, financing, etc.);

    - easier access to external expertise, European or world-wide, particularly where organisation
and management methods are concerned (e.g. the knowledge resource centres advocated in
the Ciampi report) and cooperation between firms (clusters, networks and value chains);

    - helping to recruit or second researchers, engineers and technicians to SMEs; promoting visits
(particularly transnational) between firms and other methods of demonstrating innovative
technologies, methods and processes.

Member States ought to extend the scope of their national measures for fostering the transfer of
technology of international origin.

A continued drive is needed to rationalise activities and innovation-support organisations in the
regions and Member States (see Section Bl (iii) above), enabling them to reach critical mass and
the necessary degree of professionalism.

The Commission will continue to support such procedures under the Structural Funds and the
Innovation Programme (regional innovation strategies and audits of the regional infrastructures
for supporting technology transfer and innovation).

The Commission will also intensify activities for creating improved links between the various
national and regional innovation-support systems.

Working with players in the field, it will identify the skills required and the tools needed to
professionalise or, where appropriate, certify the new professions which will need to emerge in
this context.

The Commission will put forward, as part of the Fifth Framework Programme, a coherent and
reinforced set of initiatives for encouraging and facilitating the transfer, use and absorption of
technologies, whether or not these were developed in the European Union.

It further proposes to give a considerable boost to the innovation support measures under the
Structural Funds (see Section C3 (i)). Closer and more systematic coordination will ensure that
these initiatives are complementary.

These initiatives may include the following:

support for technology transfer to companies or sectors in less-developed regions,
particularly under the Structural Funds;

support for the first use of new technologies, subject to subsequent dissemination of the
experience acquired by the user (along the lines of the FUSE initiative and ESPRIT), and
for technology transfer schemes giving young innovative firms access to European or
international markets.

**(vi)** **Demonstration of effective approaches to** **innovation**

3.10 The Commission, in collaboration with European industry, will put forward a new generation of
transnational demonstration projects, many of them under the European Union research

**31**

**47**

programmes, illustrating effective approaches to innovation and incorporating technical,
organisational and social aspects.

These transnational projects will provide a framework for "live" testing of transnational

innovation and will demonstrate how similar innovations are treated in different cultural and

national contexts, thus making it easier to remove obstacles to their dissemination. They will

above all:

      - enable new methods, partnerships and services (such as intellectual property rights, project
management and innovation financing) to be tested:

     - show how to optimise the social benefits of technical innovation, particularly those affecting
employment and improvements to working conditions but also involving the adoption of
common standards;

      - develop good participative management practice, so as to improve and accelerate industrial
innovation;

      - enable social groups [52] able to act as innovation catalysts and multipliers to take part;

      - encourage inter-sectoral apprenticeship by disseminating the results of pilot innovation
projects between sectors.

The Commission recommends that industrial research projects take socio-economic aspects into
account and will take steps to promote their incorporation into its own programmes, with the
help of economic and social science experts.

It will take appropriate steps under the Fifth Framework Programme to support research and
development schemes offering short-term and medium-term results and guaranteeing the
environmental sustainability of production systems, and to facilitate the social acceptance of
new technologies, particularly those in the information society (such as projects demonstrating
the ability of new technologies to give stronger protection to fundamental rights, such as the
respect of private life through the use of privacy-enhancing technologies).

_**2.**_ _**Incorporating the innovation and SME dimensions into the Framework**_ _**Programme**_

3.11. This means totally re-engineering the Framework Programme. Its approach, implementation
methods and management organisation therefore need to be adapted:

_**(i) An integrated approach**_

3.12. First, the Framework Programme approach needs to be an integrated approach. The Green Paper
debate has confirmed [53] that research and technology in general were merely one aspect of
innovation - an important one, of course, but insufficient on its own. The organisational,

52 The Green Paper "Living and Working in the Information Society" illustrates how important it is for
society as a whole and for wage-earners in industry to accept change. This last point will be enlarged
on in the Green Paper on work organisation which is currently being drafted. COM(96) 389 final,
24/7/96

53 In the Community innovation survey, the ability to solve technical problems was the least of the
obstacles to innovation named by companies.

**32**

management, market, financial, legal, protection, etc. aspects will be taken into account more
systematically. This has a number of implications:

    - these elements will be incorporated from the definition phase of the most industrial
programmes and the corresponding projects (including the safeguarding of intellectual
property rights, standards and the subsequent assessment of conformity with such standards,
private financing networks, long-term market analysis, design, etc.);

     - closer links between RTD and other policies (training, internal market. Structural Funds, etc.)
will be fostered with a view to meeting the general criteria for rapid exploitation and
dissemination of results;

**•** [the Task Force mechanism as a coordination instrument for designing and monitoring ]
initiatives targeted at priority societal and industrial objectives, making for visible, selective
and concentrated effort, will be refined to make the selection of topics more transparent and
to ensure that as many SMEs as possible from all regions take part.

     - Coordination of Community and national policies should be put into practice.

_(ii) Adapted approaches to implementation_

3.13. Secondly, the ways of implementing programmes and projects will be adapted, primarily with a
view to:

**•**

**•**

determining the overall technological aims and content of the work programmes for specific
programmes, taking account of the main factors affecting innovation in their own spheres of
activity;

revision or stricter application of the evaluation criteria for project proposals to place more
stress on the novelty of proposals, the quality of the exploitation plans submitted by the main
contractors within consortia (and the extent to which they match the business plans of the
companies or research centres concerned), the relevance of elements needing access to a
transnational level (effects of scale, access for SMEs to the European market, etc.), the
expected benefits for other Community policies (employment, cohesion, environment, etc.);

encouraging preparations to exploit and disseminate results during the research stage by
making available to the contractors new instruments, methods or good practice and support
services for innovation and technology management, intellectual property, access to sources
of private finance, etc. As stated above, close links will be established between Community
research and innovation projects and sources of risk capital able to provide finance for
projects arriving on the market, in cooperation with the European Investment Fund in
particular;

redirecting the management and contractual follow-up of projects towards producing results
("deliverables") and/or achieving measurable objectives ("milestones") clearly identified by
each main partner within a consortium. "Project Life-Cycle Management for RTD" will be
developed, tested and put into practice. This model aims to achieve homogeneous criteria and
methods for the whole of the Framework Programme, possibly using Total Quality
Management techniques.

**33**

**•**

**•**

aiming at maximum user-friendliness for SMEs: faster procedures, a single interface and a
system of rolling calls for proposals with a two-stage submission procedure;

adapting contracts to allow more flexibility in forming consortia and enable them to be
changed during the project, e.g. by bringing in SMEs or transfer organisations at a
downstream stage to exploit or transfer the results, or to give stronger protection to the
intellectual property rights of contractors when development or demonstration projects are
involved;

strengthening the measures taken (methods and resources) under the specific programmes in
order to promote the exploitation of their results and the dissemination, mainly through
demonstration programmes, of the generic know-how and technologies generated by them, to
enable a growing number of firms to benefit from the spin-offs of Community RTD.

Effective exploitation of the results of research projects will depend largely on the action
taken by the partners themselves from the research phase onwards to prepare for exploitation
by consortia or, failing this, for transfer to other partners (complementary studies on
technology introduction, training in new technologies, documentation from the start of the
project, preparation of licences, identification of partners, etc.). Substantial funding is needed
for such action if it is to work. The research project should therefore be part of an innovation
strategy. This must be taken into account in the selection criteria, throughout the
implementation of the project and in the assessment of the results.

_(iii) Coordinated management_

3.14. Accepting that large companies have an important roie to play in the Innovation process, in
particular through their collaboration with smaller firms, this action should give more SMEs
access to all research work and its results, develop technology transfer and stimulate innovation.
This will call for closer coordination of the various initiatives so as to ensure:

    - better overall consistency, optimum exploitation of synergies between the various initiatives
and increased visibility for action in support of innovation and SMEs;

    - an integrated range of services designed specifically for different categories of SME
(including intellectual property rights, innovation management methods and access to risk
capital);

    - more homogeneous implementation of measures for promoting innovation and measures
aimed at SMEs, and the provision of gateways between projects at various stages (research,
demonstration, transfer, exploitation);

    - greater coordination with other policies (regional, training, etc.).

Innovation promotion and more effective involvement of SMEs will depend largely on the
availability, strengthening and rationalisation of existing networks of locally-based organisations
covering the entire territory and possessing the necessary skills for advising and assisting the
various players concerned, particularly SMEs, in innovation, preparing projects and finding
partners (see Sections Bl(iii) and Cl(v)).

The proposed programme "Innovate and enable SMEs' participation" should boost and
effectively coordinate efforts to innovate, to disseminate technology and to promote greater
participation by SMEs in research.

**34**

_**5~**_ _**v**_

3.15. Finally, the debate on the Green Paper on Innovation and the experience gained through the Task
Forces in the Fourth Framework Programme have demonstrated the usefulness of instruments
which:

**•** [identify, together with users, researchers and industry, the technological obstacles whose ]
solution is an economic and social priority in Europe;

   - mobilise expertise and private or public resources. Community or national, to the maximum
extent in order to bring large-scale targeted projects to a successful conclusion, so obtaining
faster results from research effort, avoiding duplication and increasing the visibility and the
exemplary nature of Community research.

In consequence, it would be desirable to improve at Community level:

   - general incentives to participate in the work of Task forces, by taking innovation more into
account as a selection criterion for projects within the Fifth framework programme;

   - the efficiency of procedures by planning simultaneous or integrated calls for proposals for the
various programmes for priority research.

_3._ _Mobilising other Community instruments_

**(i)** **Gearing** **the Structural Funds more towards innovation**

**3.16.** Not all regions have equal innovation capacity. Statistics show that the technology gap between
the developed and less-developed regions of the European Union is twice the size of the
"cohesion" gap, and various factors threaten to widen the gulf still further. The region is thus
becoming a particularly appropriate level for promoting and strengthening innovation in Europe.
Moreover, the links between cohesion, research and innovation can be managed more easily at
regional level. Three considerations support this argument:

   - innovation policy must be based on in-depth knowledge of the demand from companies,
including SMEs, in a given economic system: there is no standard model which could be
generalised and this type of policy should be anchored in a regional context. Regions must
find their own paths to innovation;

    - the region is the most suitable level for the necessary collaboration between the key players
in innovation;

**•** [regional and local authorities are best placed to organise, at their own level, the innovative ]
environment which is the basis for regional innovation capacity.

With the above points in mind, and in addition to the action taken to promote innovation
throughout the European Union, the Commission has implemented initiatives for strengthening
the importance given to innovation in the Structural Funds. Most Commission initiatives such as
the SME initiative, ADAPT and LEADER II, as well as Article 10 of the ERDF, give innovation
high priority. Moreover, innovation is one of the priorities of the new directives concerning
Objective 2, which states that "innovation is essential for maintaining competitiveness and
employment".

In the same vein, the Commission considers that innovation is an important element of the
priority given to employment in the use of structural funds. It considers desirable therefore that
Member States and the regions concerned invest more in innovation promotion schemes, subject

**35**

**5/**

to the resources available for the current planning period and in the next generation of Structural
Funds [54] .

The Commission will draw on the experience gained from the regional innovation strategy
projects supported jointly under Article 10 of the ERDF and the Innovation programme.

In the Objective 1 and 2 regions, the Commission recommends that Member States and local or
regional authorities concerned to take fully into account the necessity to concentrate the
measures for innovation, and particularly research, development, technology transfer and
qualifications for workers, in order to satisfy the priority given to employment. In rural areas, in
particular objective 5b areas, the Commission will see, within the framework of strategies for
employment, to disseminate as widely as possible the good practice identified and validated by
the European Innovation and rural development Monitoring System within the framework of the
LEADER II initiative. Under Objective 4 of the Community initiative ADAPT, efforts will need
to concentrate on innovation action, particularly on anticipating requirements and improving
training systems, and helping SMEs to manage their human resources more efficiently.

**(ii) Making the most of** **the** **international dimension of innovation**

**3.17** Action in support of innovation should take account of the globalisation of technologies and
markets. Flows of information, knowledge and capital are accelerating and multiplying on a
world scale. Incorporating this dimension means taking several complementary approaches:

   - Closer interaction between the Framework Programme and the COST and EUREKA
cooperation frameworks.

    - Support for international industrial cooperation and promotion of collaboration between firms
on the basis of bilateral agreements, giving European firms, particularly SMEs, better access
to world technologies, knowledge and skills, taking maximum advantage of their know-how
and strengthening their profiles on the markets of the future.

**•** [Intensified international RTD cooperation with non-member countries. This should be in line ]
with the political objectives of the European Union (e.g. on energy and environmental
protection or the establishment of the information society), adhere to the principle of mutual
interest and, where appropriate, be based on bilateral agreements. In a spirit of reciprocity it
will aim to involve organisations in non-member countries in Community RTD projects.
Special attention will be given to the countries of Central and Eastern Europe on the waiting
list for accession to the EU. Another aim will be to boost the attraction of the European
research area for researchers from countries with which the European Union has links.
Lastly, specific international scientific cooperation activities will be drawn up on the basis of
topics and countries or regions such as the Mediterranean, the CIS and developing countries,
in support of external policies and the industrial policy of the European Union.

54 The Employment Confidence Pact identifies the development of SMEs as the priority for structural
policy, stating that _"There_ _should be a_ _special effort in favour_ _of_ _the formation_ _of_ _SMEs_ _and_ _one-_
_person_ _firms._ _What is needed now is_ _to_ _make wider use_ _of_ _innovatory measures that have_ _been proved_
_to_ _work,_ _especially_ _those involving_ _financial_ _engineering_ _- notably access to risk_ _capital._ _The_
_development_ _of_ _SMEs is also_ _helped by_ _the research and technological innovation_ _effort,_ _as_ _in the case_
_of_ _environmental_ _technology,_ _and_ _especially access_ _to new_ _markets_ _linked to_ _environment-friendly_
_products."_ (Action for Employment in Europe: A Confidence Pact, CSE(96)1 final, 5 June 1996,
page 24.)

**36**

_**si**_

   - Stronger encouragement to entities in the countries concerned, through the possibilities
offered by instruments such as TACIS, PHARE [55], MEDA, etc. to search a stronger synergy
with community research projects.

   - Continued vigilance in international negotiations over aspects liable to affect European
innovation and its outlets (such as intellectual property rights and anti-counterfeit measures).

**(iii)** **Fleshing out the action** **plan** **in various priority sectors and fields of technology**

**3.18** Some of the proposals in this action plan may prove to be suitable to specific sectors or
technologies and adjustments will be necessary. The Commission will, as far as is possible,
arrange for effective cross-over learning by setting up inter-sectoral and inter-technology links.
Efforts will be made to take more account of the preoccupations of industry when policies are
drawn up.

The fields to be fleshed out include better exploitation of space and dual-use technology, rural
development, consumption and the audio-visual sector as well as the environment and the
services sector. Some examples are given below:

a) Innovation is an important factor in the development of rural economies. Emphasis should
therefore be placed on encouraging and disseminating innovation in the various domains of
rural development, above all:

        - getting SMEs in rural areas to use new technologies;

        - improving access by users in rural and/or peripheral areas to modern methods of
information and communication;

        - extending the services rendered to agricultural producers and SMEs in rural areas
(studies, assistance with management, forecasting, risk assessment, etc.).

b) Aspects of demand are essential to innovation. This means, in particular, ensuring that new
products and services meet the needs not only of firms but of the end user. Innovation
should above all meet needs which may not be apparent through market forces alone
(aspects of social and territorial cohesion, universal and general-interest services, userfriendly products and services, illiteracy, social exclusion etc.). Considerations of demand
also need to take a "sustainable consumption" approach.

This also affects consumer protection in terms of product quality and legal environment.
The latter is particularly important to computer products or services (Internet, smart cards,
cybercash, etc.). Legislation on these is still in embryo where both law and order and user
protection are concerned. A multidisciplinary approach to these issues needs to be fostered
in order to identify the action which needs to be taken.

c) The audio-visual sector is a priority area whose evolution has accelerated under the impact
of new technologies. The Commission will encourage partnerships between the digital
electronics industry and centres of culture (broadcasters, museums and designers). To this
end, wider consultation procedures on the effects the new technologies may have on the
audio-visual sector in Europe will be launched and pilot demonstration projects will be run.

d) An important sector of economic growth is the environmental sector (e.g. waste water,
waste management, air and noise emissions) both, in terms of manufacturing industries and

55 For non applicant countries

**37**

**f?**

services. These sectors have shown a significantly higher growth than the rest of the
economy. Jobs in this sector grew vy 3% per year - about twice the rate of other sectors.

Currently the environmental sector is dominated by end-of-pipe technology (and related
services). However, the future trend will be towards the development of integrated clean
technologies, an area where innovation is essential and necessary to speed up market
introduction and application of these technologies.

**38**

**f***

**3.** **GEARING RESEARCH TO INNOVATION**

**3.1 NEW ACTIONS**

**1.National** **measures and their Community back-up**

**(i)** **Strengthening research carried out bv companies**

**Member States**

- formulate quantified objectives and put in place the appropriate incentive policies.

**(ii)** **Start-Hp** **of** **technology-based companies**

**Commission**

- organise thorough exchanges with Member States and players in the field on legal, fiscal and promotional
measures (1997).

- launch pilot schemes for disseminating good practice, involving universities, risk capital, industry and
regional institutions (1998).

**(iii)** **Intensified cooperation between** **research,** **universities and companies**

**Member States**

- set up a legal framework to facilitate exploitation by research organisations, including business start-up.

**(iv)** **Strengthening the ability of** **SMEs** **to absorb technologies and know-how**

**Member States**

- support transnational technology transfer.
**Commission and member states**

- better links between national and regional innovation systems at Community level.

**(v)** **Demonstration of effective approaches to innovation**

**Commission**

- set up a new generation of demonstration projects integrating the technical, organisational and social
aspects of innovation (5th FPRD).

**2.Incorporating** **the Innovation and SME dimensions into the Framework Programme for Research**

**Commission**

- adapt the implementation procedures for the Framework Programme (project selection criteria, faster
project selection, more demonstration schemes, legal framework for contracts);

- strengthen the consultation and coordination role of the research-industry Task Forces;

- develop, a programme "Innovate and giving SMEs greater involvement and providing an integrated
approach to the goal of innovation through the legal and financial treatment of projects, particularly those
supporting SMEs (5th FPRD).
**3.Mobilise** **other Community instruments**

**Commission and Member States**

- prepare to flesh out the action plan in various priority sectors and fields of technology.

**39**

**?7**

3. GEARING RESEARCH TO INNOVATION

3.2. CURRENT ACTIONS FOR IMPROVING THE INNOVATION ENVIRONMENT IN EUROPE

1. National measures and Community back-up

(») A strategic vision of research and development

Member States

- consultations on long-term technology forecasting (Foresight).

Commission

- facilitate the exchange of experience and the exploitation of results on a Community scale;

- stimulate the technology watch (network of national organisations around the European Science and
Technology Observatory (ESTO)).

(ih Start-up of technology-based companies

Member States

- stronger promotion of "campus companies" and spin-offs.

(iii) Intensified cooperation between research, universities and industry

Member States

- pursue and strengthen action in this area.

Commission

- analyse the obstacles and disseminate good practice;

- support national efforts to improve the management of research and technology organisations and their
international benchmarking;

- organise sectoral and inter-sectoral technology platforms.

(iv) Strengthening the ability of SMEs to absorb new technologies and knowledge

Member States

 - improve the efficiency and transparency of support structures.

Commission

 - help professionalise the innovation support services;

 - set up a scheme for promoting the absorption and use of technologies (first-use support, access to
technologies not developed in the European Union, internationalisation of young technology-based firms,
regional projects).

(v) Demonstration of effective approaches to innovation

Member States and Commission

 - make better use of specialists in the social and behavioural sciences in technology projects.

2. Incorporating the Innovation and SME dimensions into **the Framework** Programme

(see New Actions)

3. Mobilise other Community instruments

Commission and Member States

 - direct more of the Structural Funds towards innovation;

 - make the most of the international dimension of innovation.

**40**

_**r**_ _**Ù**_

**CONCLUSION:**

In the three main fields identified, the Commission is putting forward those measures whose
priority, expected impact or urgency has been confirmed by the debate.

At Community level these measures can be financed from existing or planned budgets without
additional funding.

The main effort must nevertheless be made at local, regional or national level. Action in support
of innovation must be first and foremost the province of the Member States and those active in
the field - above all companies.

A more thorough analysis will be needed to take account of the wide variety of situations in the
Member States. The Commission proposes to organise this in close collaboration with the
Member States, so as to establish a joint reference framework and so help them identify the
priority options and the opportunities for cooperation.

It requests Member States to take the necessary steps to ensure, on an internal basis, efficient
coordination of the measures deriving from various policies and, on an external basis, optimum
interaction with the other Member States and with the European Union.

The Commission will draw up a detailed implementation schedule and will precisely quantify
the costs of the measures it is proposing. On this basis it will submit the corresponding
legislative and regulatory proposals to the Council, the European Parliament, the Economic and
Social Committee and the Committee of the Regions.

The Commission will report regularly to the European Council on the implementation of the
action plan, including, where necessary, proposals for any adjustments or additions which may
prove necessary in the light of developments or in view of the specific contexts in which the plan
is applied.

The enthusiasm and energy demonstrated must be mobilised in order to implement this Action
Plan and so build a more innovative, competitive and job-creating Europe.

**41**

**f /**

##### **ANNEX 2**

**1.** **Reactions to the consultation on the Green Paper**

**2.** **Recent developments in innovation policy in the**
**Member States**

**3.** **Statistical tables**

**anx1-en.doc** **i** **x*cv**

**7 0**

**ANNEX 2.1.**

**Reactions to the consultation**

**A. Summary of the comments from those in the**
**field**

**B. Reaction of the governments**
**C. Reaction of the institutions**

**fc**

**2.1-A-** **Summary of the comments from**
**those in the field**

_**X**_
**éo**

**Introduction**

**Consultation on the Green Paper nas involved an unprecedented** **deoate** **on**
**innovation not only m the fifteen countries ot the European Union, Out also** **in**
**Norway and Iceland.**

**More than forty thousand copies of the Green Paper were distributed. It was**
**analysed,** **discussed and commented upon** **ov** **researchers, the** **heaas** **of large**
**concerns and SMEs, public** **authorities,** **trade** **unions,** **professional associations**
**and the various Community institutions. Conferences were held in** **17** **countries**
**involving nearly 5000 persons.**

**A large number of specific proposals were** **suomitted** **to the Commission. Apart**
**from the national conferences, whose reports of proceedings reflect the range**
**of reactions and the expectations aroused bv this** **initiative,** **the Commission**
**received more than 300 contributions** **directly** **[1]** **,** **and their length and the quality**
**of analysis of many of them Dear witness to the interest aroused by the Green**
**Paper.**

**An initial analysis of the reports of proceedings of the conferences and the most**
**representative** **(particuiarlv** **of the** **main** **professionai associations and trade**
**unions, national and European** **federations,** **large concerns and financial**
**institutions) and relevant contributions is given here. These communications**
**mainly concern the topics and the various routes of action proposed by the**
**Green Paper, in particular as regards the improved orientation of research**
**towards** **innovation,** **improvements** **in** **innovation financing, intellectual property**
**rights and support for SMEs. In addition, some of these contributions propose**
**topics little touched on in the Green** **Paper,** **such as organisational innovation,**
**innovation in services, the role of large** **concerns,** **etc.**

**This document gives an** **initial,** **non-exhaustive summary of these comments,**
**grouped under the main topics in the Green Paper. The summary does not cover**
**either the contributions of the** **Eurooean** **institutions or the officiai contributions**
**of the Member** **States,** **which are** **descnbea** **in Chapters 2 and 3 of this annex**
**respectively.**

**The list of individual reactions to the Green Paper** **is** **annexed**

**M**

**Résumé**

1. Amongst the topics proposed by the Green Paper, a number of major subjects
are touched upon more frequently in the contributions. This concerns, in
particular, the improved orientation of R&D towards innovation, innovation
financing, the protection of industrial property and support for small and
medium-sized enterprises.

As regards the improved orientation of research towards innovation, the general
opinion is that the links between the world of research and industry must be
improved by strengthening the capacity for dialogue between the two and by
improving researchers' understanding of the problems of the business world.
Technology watch is considered important, and national initiatives must be
coordinated and exchanges of information improved, rather than setting up a
new Community institution. As regards public research efforts, there is a
difference of opinion between the proponents of the financing of precompetitive research only and those who favour the financing of the entire
research process (up to the industrial-scale phase). In general terms, task forces
are of interest to the larger countries, but the desire is that their working should
be more transparent and that manufacturers should be able to become more
involved in their definition. Finally, there is unanimous agreement that research
programmes should be faster in selecting projects and that their procedures
should simplified. As things stand at present, they seem ill-suited to almost all
SMEs.

As regards **human resources,** greater mobility is recommended, particularly
between university and industry, along with Europe-wide recognition of
qualifications and greater emphasis on innovation-linked matters in school and
university curricula.

Improvements in **innovation** financing were the subject of a great many
comments which focused, in particular, on the need for a European-level
financial market for innovative businesses, the establishment of links between
technology and financing, the introduction of guarantee schemes and the use of
the tax system to promote innovation.

As regards the **legal and regulatory environment,** the comments focused on
industrial property rights - considered to be a tool which was expensive, difficult
to access and unfamiliar to businesses - and the need for a company statute
suitable for the single market and affordable to SMEs.

Finally, a great many suggestions concerned **direct support for SMEs and the**
**national or regional support infrastructure for such businesses.** These are
frequently specific to the individual Member States, and it is difficult to discern
any common denominator. However, there are some recurrent features, such as
the need to facilitate participation in (national and Community) research
programmes, to rationalise and make more transparent the supply of   particularly public - services and to consider SMEs no longer in isolation, but
against the background of their relationship with large concerns, customers and
suppliers.

_**s**_ _**kl**_
**O^-**

2. In addition, some comments concerned topics wnich were not. or hardly,
toucned upon in the Green Paper:

This concerned, in particular, innovation In the services sector (despite the fact
that it is the largest employer in Europe) and in the public sector (ditto)
_**"Innovation in services is a field which has been largely ignored. Innovation in**_
_**the services sector plays an important role in instigating changes in the**_
_**manufacturing**_ _**sector"**_ _**(Oslo).**_

There was some criticism that the Green Paper puts too much emphasis on the
technological aspects of innovation, wniie neglecting the social and
environmental factors. In particular, some circies feel that the promotion of the
organisational capacity of businesses nas been ignored. _"The DGB regrets that_
_**the Green Paper**_ _**is**_ _**too much geared towards the promotion of technology and**_
_**that it takes only little account of direct measures to promote the operational**_
_**capacities of**_ _**businesses,**_ _**which are of decisive importance in absorbing**_ _**RTD".**_
Furthermore, the trade unions (particularly in Germany) regret the absence of a
reference, in the proposed measures, to those measures aimed at motivating
and involving employees. The UEAPME also points out that _"It is important_ _to_
_**remember that innovation means more than just the development of new**_
_**products: it is also organisational and**_ _**structural".**_ **In** **the same** **vein,** **the concept**
of **incremental (progressive)** innovation is felt to have been insufficiently
emphasised as compared with radical innovation and high technology (IRDAC).
**Large concerns** are frequently mentioned in the contributions as producing a
large number of innovations. There is some surprise that they do not then
**feature in the Green Paper.** _**"Large**_ _**businesses are left out of the**_ _**debate,**_ _**despite**_
_**the fact that they are major sources of R&D and the first to adopt innovations**_
_**coming from**_ _**SMEs"**_ _**(CEST).**_

Finally, the picture painted by the Green Paper is sometimes felt to be too bleak.
The pharmaceutical industry, for instance, is cited as an example of a European
sector which has been very successful in exploiting its technological know-how
in the commercial world.

3. The main topics raised in the various contributions are given below according to
the five major objectives set out in the summary of the Green Paper:

  - improving the orientation of research towards innovation

  - bolstering the human resources for innovation

   - improving the conditions for financing innovation

   - establishing a legal and regulatorv environment conducive to innovation

   - developing the role and procedures of the public authorities

**t»;**

**1** **/ Directing researcn** **efforts** **more towards innovation**

_It is important_ _to improve_ _links in Europe between_ _the world_ _of_ _research,_ _in_
_particular_ _universities,_ _and_ _industry._

There is a widespread wish for improved adaptation of research programmes to
the needs of industry. Some contributions nevertheless stress the need to
maintain fundamental research which is not directly linked to immediate market
needs. This adaptation could be the outcome of increased dialogue and
coordination between sectors, particularly with a view to avoiding harmful
competition in the use of the resources devoted to research. It also requires the
active involvement of intermediaries such as collective research associations,

and the organisation of - and support for - technology transfer from the
university to industry.

One of the proposals at the Paris conference was to increase the involvement in
research of business engineers and project managers trained in establishing
relations between businesses and accompanying research projects right up to
their transfer to industry. (The contribution of the CNPF also points out that,
within France, there is a need to reassess the technology programmes and
research bodies, which have in many cases "aged" without any subsequent
review.)

The unsuitability of university assessment criteria is frequently mentioned. The
traditional criteria are based on publications and leave no leeway for taking
account of researchers' aptitude for mobility and exchanges with industry. _"The_
_current_ _system_ _for_ _assessing_ _public_ _researchers_ _is_ _an_ _obstacle_ _to_ _their_
_participation_ _in industry"_ _(Madrid)._ It is proposed that these criteria be revamped
and that the use of research results by businesses become a positive criterion.
The principles currently governing researchers' careers are regarded as a
powerful brake on such collaboration. Researchers in fact often have a job for
life. _"Fixed-term_ _contracts_ _for researchers_ _working_ _in public_ _research_ _institutes_
_should be encouraged,_ _possibly_ _with_ _tax incentives_ _for firms_ _taking_ _them_ _on_
_when they become_ _available_ _on the labour market"_ _(Milan)._ In addition, their
awareness could be enhanced and they could be trained in knowledge of the
business world. However, the trade union organisations think that, on the
contrary, young researchers should be assured of stable career prospects in
order to ensure that they have the peace of mind needed for their creativity.

_Technology_ _watch and economic_ _information_

Technology foresight and technology watch exercises carried out at national
level are sometimes considered by businesses as a means of orienting the
technological and industrial policies of the Member States, rather than as tools
useful to businesses. _"Technology_ _watch_ _and technology_ _foresight_ _initiatives_
_create jobs only in the science of forecasting_ _and not in businesses"_ _(UEAPME)._
Economic and technical information for businesses - particularly SMEs - is
considered a problem to _be_ dealt with separately, although a summary is
nevertheless thought necessary, with manufacturers taking part in prospective
technological study projects and the results of such projects providing some of

the information of use to businesses.

*** H**

As regards prospective technological studies, emphasis is placed on the need to
exploit what has already been acnieved by Memcer States Dv relying on their
individual skills. Setting up a network of such initiatives receives more support
than developing a new scheme at European ievel. _"The centralised_ _model_ _for_
_technology_ _foresight_ _is_ _risky"_ _(Oslo)._

SMEs appear to oe making insufficient use of the technology watch. Some
doubts are expressed as to the neeo to provide businesses with even more
information. The Berlin conference stressed that. _"In general._ _SMEs do not_ _need_
_more information_ _on the technoiogicai_ _situation._ _They already_ _cannot_ _use the_
_information_ _they nave"._ At this level, the distinction between technoiogicai and
economic information appears artificial. Businesses shouid be supplied with
information of direct use to them, e.g. information on markets, the competition
and the financial and legal fields. Manv correspondents say that SMEs should be
made more aware of **economic** intelligence. The suitable framework for this type
of action would seem to be the regional level, at which exchanges of
information and studies between businesses could be organised and local bodies
such as Chambers of Commerce and Innovation Relay Centres involved.

_**The public effort**_

A number of points arose as to the advisability of **increasing** the **public RTD**
**effort,** in particular the questioning of the distinction between precompetitive
and other research, the notice taken of cohesion objectives and the need for
efforts to be more narrowly focused.

The participants at the German and British conferences displayed **a certain lack**
**of enthusiasm** for a possible increase in R&D budgets. While this is regarded as
a possible additional burden on businesses, a large number of comments
question the existence of a direct link between R&D expenditure and the results
in terms of innovation. The Birmingham conference felt that _"Europe_ _does_ _not_
_need_ _more_ _research._ _It_ _needs_ _correctly-applied,_ _effective_ _and_ _high-quality_

_research"._

Taking account of **cohesion objectives** in R&D programmes is thought to
conflict with the objective of strengthening the innovative capacity of European
businesses, particularly by the participants at the Berlin conference. The BDI. in
particular, states that _"It is just as harmful_ _to use Community_ _funds_ _a/located_ _to_
_research policy_ _for cohesion_ _objectives,_ _as it is justified_ _to fund R&D from_ _the_
_structural_ _funds"._ Nevertheless, measures aimed at strengthening cohesion are
considered necessary. _"Cooperation_ _between_ _less-developed_ _and_ _more_
_developed_ _regions must be_ _promoted,_ _taking care to ensure that the benefits_ _of_
_such cooperation_ _remain in the less-favoured_ _regions"_ _(Madrid)._

A number of contributors feel that the question of the advisability of financing
beyond the precompetitive stage - and particularly in the industrial application
phase - remains to be settled. In particular, it is felt that _"The_ _innovation_
_process_ _does not finish_ _with_ _the production_ _of a prototype._ _Support_ _must_ _be_
_continued_ _and include_ _market_ _entry"_ _(Berlin)._ The Madrid conference mentions
the possibility of launching a programme which might finance the initial
applications of specific technologies which have already proved their industrial
utility. However, there is clear opposition from some large concerns. _"Moving_

_^_

_puoliciy-fundeo_ _R&D towards_ _zhe marKei-oiace_ _means_ _that_ _it_ _must_ _cnoose_
_between overtly favouring a_ _smgie_ _commercial enterprise or publishing_ _tate-_
_stage information._ _Neither_ _of these strategies_ _is realisticailv_ _sustainable"_
_(SmitnKline_ _Beecham)._

Finally, certain sectors (the electrical industries, in particular) feel there should
be compensation for the fall in public R&D spending on defence.

_**Task forces**_

Task forces are generally considered - particularly by the large countries - to be
a **useful instrument for concentrating** resources in major fields. Nevertheless, in
order to improve their transparency, it is recommended that manufacturers be
more effectively involved right from the design phase in selecting topics and
preparing the work programme. _"The role and operation of the Task Forces_
_must be open and informed by consultation_ _with industry and the output_ _from_
_various_ _national_ _foresight programmes"_ _(CBI)._

While the **participation** of **SMEs** in the task forces is considered desirable, a
large number of comments stress tne incompatibility between SMEs and task
forces. The latter are regarded as being ot potential benefit above all to large
concerns, and this explains the reservations on the part of some Member
States. _"The task_ _forces,_ _as set out in the Green_ _Paper,_ _are of no use to_
_Portugal" (Lisbon)._

Finally, some major manufacturers have reservations about any move on the
part of the European Union to coordinate industrial research efforts. They feel
that a better solution would be to strengthen the cohesion of the Community

programmes.

_**Research**_ _**programmes**_

There is unanimous agreement that these should **speed up the selection** of
projects and **simplify procedures.** In particular, they seldom appear to be
adapted to the constraints facing SMEs: the cost of drawing up a file is
considered disproportionate. _"A_ _small'_ _high-tech_ _business cannot_ _wait_ _for_
_Community support_ - _six months is an eternity"_ _(Birmingham)._ Finally, the
business needs greater freedom and flexibility in the use of the funds. The very
participation of SMEs in the framework programme is questioned, since it is felt
that only a very small number of them are capable of making a genuine
contribution and hence being eligible for participation in the specific

programmes.

A number of proposals are aimed at **decentralising the decision-making**
**procedures** and setting up bodies in the field. One comment mentions that
_"EUREKA-type projects,_ _which are close to_ _manufacturers'_ _concerns and to_
_products,_ _are worthy_ _of reinforcement"_ _(Paris)._ It is also suggested that
participation in the specific programmes could be replaced by more flexible
arrangements involving indirect support.

Furthermore, a number of comments relate to the **project selection procedures:**
they shouid involve more experts from industry

**66**

Technical Qualifications snouid cs aeciaing criteria, ratner man the

   - nvoivement ot a numoer ot partners from different Memper States
the performance oojectives snouid :ake account of the return on
investment in terms of R&D and innovation

ïhe project evaluation snouid take account not only of the business oians.
but-also ot he pians of the researcn institutes taxing part in the projects

Finally, _ihe_ programmes should take rr.ore account of the concept _oi_
collaboration between small and large businesses, and it should be possiPie to
subsidise projects deriving from predetermined topics.

**2/** **Bolstering the human resources for innovation**

_**The mobility**_ _of persons_ _**between**_ _research,_ _the_ _**education**_ _system and industry_
_**must**_ _be_ _**strengthened.**_

This echoes the concern mentioned before as regards the criteria for assessing
researchers, which do not encourage them to take part in industrial projects.
Making it easier to **integrate** young graduates into businesses, particularly
SMEs, is considered by ail the conferences to be highly important. _'Local_
_mobility of researcners and students between academic and industrial_ _circles_
_might be an interesting_ _way to_ _imorove_ _education and_ _training,_ _but also to_
_foster_ _inventiveness_ _and_ _entreoreneursnio'_ _(UNICE)._ There are already
programmes at national level (Teacning Company Scheme in the United
Kingdom. CIFRE ana CORTECHS in France, etc.) which could act as examples
for other Memoer States. One specific suggestion relates to graduates with
doctorates, whose integration could be neloed through post-doctorate
traineeships in businesses, in particular SMEs.

A number of comments - sometimes contradictory - are aimed at adapting the
programmes (particularly the Communitv ones) to promote mobility:

they should be made more flexible in order to genuinely meet the needs of
ousinesses

they should have no age limit
they should be more focused
they should be expanded and have their funding increased

The lack of **internal employee mobility** towards fields in different specialisms is
regretted. There is a need to reward changes of stream, promote assistance for
career guidance, help staff to cope with change, expand part-time working, etc.
There were numerous suggestions to the effect that **school and university**
**curricula should include subjects of relevance** to innovation. In particular, there
is a need to include economics and management in the training of scientists.
More importance snouid be attached to experimentation in scientific and
technical curricula, industrial property rights should feature more prominently in
university and even secondary education, etc.

Training should be suitable for all levels - whether for future managers or future
unskilled operators, who should be prepared for frequent rethinks and technical
changes

_yr_
**U**

For some bodies, the. Commission s intervention should be directed towards
**developing networks** of **national agencies** with responsioiiitv in the field, rather
than setting up an additional body.

**3/ Improving the conditions for** **financing** **innovation**

Financing is obviousiv a major concern. However, some comments draw
attention to the fact that financing remains a resource like anv other, and that it
alone is not enougn to ensure innovation. _"The problems_ _associated_ _with_
_organisation_ _and entrepreneurial_ _attitudes_ _are more important_ _than tne_ _financial_
_or technological_ _deficits"_ _I'Berlin)._

There is a major role for the **European** Union in facilitating **the exchange of**
**experience and** **best,** **practice,** sn implementing **harmonisation** measures, or
**encouraging transnational financing initiatives**

_**Markets**_

Most of the national conferences are in favour of the creation of a (NASDAQtype) **European market** on which shares in **young growth companies** could be
traded. Plans for setting up such a market should be speeded up. _"ft is not_
_satisfying_ _to have to be forced_ _to point successful_ _venture_ _capital_ _businesses_
_towards_ _the US market,_ _and this will_ _naturallv_ _have major repercussions_ _on the_
_business_ _itself,_ _even_ _to the extent_ _of demanding_ _relocation"_ _(BDI)._ National
markets of this type must become international _(Paris)._

Since this type of market caters only for the most dynamic businesses, other
solutions have to be found **to encourage investors** (assistance funds for the
transmission of enterprises, schemes giving investors the chance to recover
their shareholding, mutualisation of risks along the lines of the Joint Venture
Capital Fund. etc.).

_**Technology and financing**_

There is general agreement on the need for more account to be taken of
innovation and technology by financial institutions. To this end. it is suggested
that technology investment operations be launched, perhaps by setting up a
bank specialised in technology (Birmingham), that a technical certification or
**guarantee/insurance** system be set up (at Community, national or regional level)
to serve as a point of first resort and attract outside finance, and that the
development of **"technology rating"** systems be encouraged, so as to be able to
quantify the chances of the industrial success of a technical project. _"The_
_European_ _Union_ _must_ _encourage_ _exchanges_ _of experience_ _on this_ _subject"_
_(ANVAR)._

_*****_ _**t>?**_

_**Guarantees**_

Encouraging support from banks for innovative businesses involves minimising
the risk to the banks, in France, _"increasing the SOFARIS coverage rates should_
_encourage banks to provide more funding for innovative SMEs" (Paris)._ Against
this background, the fact that the EIF provides guarantees to banks is widely
welcomed (Dublin, Helsinki, Milan, etc.).

**Mutual guarantee** societies should be authorised in a Directive to have a more
favourable capital ratio. _"The risk cover levels required from these societies for_
_providing guarantees should be authorised to be more or less the same as those_
_for banks" (Madrid)._

_**Taxation**_

There is almost unanimous agreement on the need for **more favourable tax**
**treatment of the investor** in innovative projects or companies. In particular, it is
suggested that the capital gains on innovation securities (particularly in the case
of individual investors) should be subject to lower taxes or even exempted, that
the risk of loss for venture capital shareholders should be limited, perhaps via a
tax credit corresponding to a certain percentage of the investment, that
distributed profits should be tax-exempted, etc.

These tax measures might be aimed specifically at encouraging sources of
**"patient"** **capital** (pension funds, life insurance funds, save-as-you-eam
schemes) to turn to venture capital investments.

Finally, several suggestions relate to the improved tax treatment of investment
by businesses in innovation, particularly in the field of training.

_**Other measures**_

**Start-up capital** should be encouraged, perhaps along the lines of the American
SBICs, so as to ensure a better yield. The various schemes set up in this field
by the Member States should be studied and, if appropriate, introduced
elsewhere.

The EVCA (European Venture Capital Association) recommends that the EIF
should invest directly in SME capital via venture capital funds. This idea is
generally welcomed by the national conferences, although it is difficult to
assess the costs and impact of this type of measure. _"There is no objection as_
_regards_ _the possibility of innovation_ _funds,_ _but there is some concern at seeing_
_the money simply injected here and there"_ _(Zeist,_ _NL)._

**The regulatory conditions** within the Union **must be harmonised** to avoid a flight
of capital to wherever conditions are most favourable.

_**^**_ **6<3**

**4/ Encouraging a** **legai** **and regulatory environment conducive to**
**innovation**

**Intellectual and industrial property rights attracted a number of comments. It is**
**generally felt that their importance** **is** **underestimated. The expensiveness of**
**patent procedures and the need for a harmonised system in Europe are two**
**points with regard to which most of the national conferences consider the**
**present situation unsatisfactory.**

_**Intellectual property**_ _rights_

**A large number of comments concern patents. The situation in Europe is**
regarded as too complex. "777e _decision-makers should develop an_ _integrated_
_approach with a view to improved protection of intellectual property rights in all_
_fields"_ _(UNICE)._ As the Birmingham conference points out, _"A_ _patent_ _covering_ _all the_
_**Member States is**_ _**a**_ _**clear**_ _**priority".**_ **The entry into force of** **the** **Community patent should be**
**promoted. There is unanimous agreement that the costs involved in** **patents,** **particularly the**
**cost of** **translation,** **are too high. To make a future Community patent more attractive, these**
**costs and the processing** **period** **must be reduced. In line with many other comments, the**
Athens conference calls for _"a_ _reduction in the cost of_ _registering_ _and protecting patents._
_R&D funding should_ _be extended_ _to the registration costs for_ _innovative_ _products._
**The importance of access to information on patents (information network,**
**databases) is underlined. It also appears desirable to improve the image of**
**industrial property** **rights,** **particularly by including specific courses in university**
(or even secondary) curricula. _"In the US and Japan, patents and trademarks are_
_considered_ _factors_ _which improve productivity"_ _(Madrid)._

**Efforts to achieve harmonisation are considered necessary and even urgently**
**required** **in** **the** **new** **technologies** **(particularly** **biotechnology** **and**
**telecommunications).**

**Opinion seems to be predominantly unfavourable as regards the use of utility**
**models.** _"The Commission should neither encourage their use at national level_
_nor promote their use in the Union" (Birmingham)._

**Defending one's intellectual property** **rights,** **particularly in third countries, is an**
**expensive business. It is suggested that an insurance scheme be set up to cover**
**these such costs, perhaps supported by public funds.** _**"The**_ _**introduction of such**_
_an insurance system for infringement_ _of intellectual property rights. Such a_
_system could be funded/supported from public_ _funds"_ _(Sweden._

_**Administrative simplification**_

_**Administrative simplification**_ **is considered essential. There is a widely shared**
**opinion that it would be better to remove the administrative obstacles rather**
**than set up new structures to overcome them.** _**"It is more useful to remove**_ _**the**_
_various administrative_ _obstacles_ _than to set up even more structure_ _for_
_**overcoming them" (UAPME).**_ **In** **this context, ANVAR** **mentions** **that** _**"the one-**_
_stop shop has proved to be a bad idea"._

_**1o**_

_Company law_

**All the comments agree as to tne adoption of a European** **puclic** **limited**
**company statute going beyond the concept of an** **EEIG.** **However,** **it is**
**frequently felt that this concept is difficult to apply to SMEs. for** **wnom** **there**
should be a special statute. _"The rapid adoption of a European public_ _limited_
_company statute is a major factor in facilitating cross-border cooperation. The_
_proposal for a small European iimiteo_ _comoany'_ _is a step towards achieving a_
_joint solution"_ _(DIHT)._

_Competition_

**Competition is generally regarded as one ot the driving forces of innovation.**
**However, a number of comments call for a degree of relaxation of the** **rules** **in**
**this** **field.** **The German Association of** **Chamoers** **of Commerce states that**

_"Progress in certain fields is possible only through joining_ _forces"._

**Some contributions call for a reduction in the administrative burden on**

**businesses by extending the field of application of the uniform ruies on mergers**
**in Europe and by harmonising the treatment of structural joint subsidiaries. The**
BDI points out. in particular, that _"The Commission should expedite and simplify_
_authorisation procedures for cooperative projects._ _The current legal situation_
_tends to stifle cooperation because of_ _lengtny_ _procedures and a lack of legal_
_certainty. Moreover, the scope of application of European merger control should_
_be extended,_ _so that companies_ _are no longer compelled_ _to notify_ _joint_
_subsidiaries simultaneously_ _to a large number of national authorities"._ In similar
vein, according to Siemens: _"More and more cooperation_ _agreements are_
_subject to national merger control._ _This involves considerable expense and_
_effort for the firms concerned, as well as risks. Mergers should be controlled on_
_the basis of uniform criteria by the Commission"._

Siemens also mentions that _"Article_ _85 also covers_ _barriers_ _to_ _vertical_
_competition,_ _whereas only the principle of abuse applies to this field under_
_German competition_ _law ... as regards ex emotions by category for relations_
_between firms (supplier and OEM_ _contracts)"_

**Others mention a revision of Articie 85** _**"to make competition**_ _**between**_
_competitors possible_ _(American_ _'rule of reason') except in the case of abuse or_
_contraindication"_ _(Thomson Multimédia)._ In the same way: _"Article 85 should_
_be rewritten_ _with a view to liberalisation and a comprehensive and dynamic_
_market approach" (IBM France)._

_**Assessment of the impact of**_ _**regulations**_ _**on innovation**_

_"All regulations must be assessed on the basis of their capacity to promote or_
_hamper innovation. To this end, businesses must be involved as far upstream as_
_possible in drawing up these rules at both local and European level" (CNPF)._

_**M**_

**5/** **Adapting** **the roie and procedures** **of** **public action in favour of**
**innovation**

Althougn this topic attracts a iarge numcer of comments, it is sometimes
difficult to obtain a coherent overview, particularly because of the major
differences in the situation in the individual countries. Some major subjects of
interest can. however, oe discerned.

_**Support for**_ _SMEs_

There is frequent criticism of the system of classifying SMEs by employment
size class, as this is considered unsuitable for reflecting the wide range of
problems affecting them.

Several contributions also stress that, instead of placing the emphasis solely on
SMEs as opposed to large concerns, account should be taken of the entire
customer-supplier chain and the large concerns' unused technological resources.
In general, the comments are in agreement that pilot projects aimed at the
internationalisation of SMEs must be encouraged. Moreover, _"accompanying_

_measures_ _should_ _be taken_ _to allow_ _selected_ _SMEs access_ _to markets_ _and_

_transnational_ _cooperation,_ _together_ _with_ _otner_ _firms_ _or with_ _universities_ _or_
_research centres in other countries"_ _(Madrid)._

_**The national or regional support**_ _**infrastructure**_

One general remark is that the public support programmes may appear
complicated to SMEs. which have difficulty finding their way around them. The
German chambers of commerce state that they would welcome a rationalisation
of the Community information centres, while the British employers' federation
stresses the use of existing initiatives rather than the creation of new ones.
_"Care_ _should_ _be_ _taken_ _to_ _find_ _the_ _right_ _balance_ _between_ _proximity_ _and_
_proliferation_ _of information_ _relay_ _centres_ _that_ _would_ _lead_ _to confusion_ _and_
_subsequent_ _rejection"_ _(UNICE)._

The French conference also mentions that the creation of support networks for
SMEs should be promoted and the public support schemes opened up. More
generally, most countries are trying to promote global approaches to the
problems of SMEs.

The Spanish contributions reveal a particular interest in the regional level (while
stressing the fact that the Green Paper does not devote enough attention to
regional aspects) and in strengthening the role of local authorities in innovation.
This view is supported by several other contributions which mention the **role of**
**the local authorities** in the field of support for SMEs. The field of science parks
is also frequently mentioned as one in which there have been successes and
which should be taken into account. Some other contributions are less upbeat,
**and** the _Land_ of Hessen states that _"It is important_ _to strengthen_ _the_ _regional_
_dimension_ _of innovation;_ _however,_ _regional innovation_ _must not be taken as a_
_**cure**_ _for all ills or as a reaction_ _to the increasing globalisation_ _of_ _economies"._

###### **_yr V_**

_**Research**_ _**programmes**_

A number of comments of relevance to this heading had already been made
under the heading "Directing research efforts more towards innovation", in
particular as regards the difficulty facing SMEs wishing to take part in the
research programmes. To overcome these difficulties, Daimler-Benz mentions
that one effective way of fostering the participation of SMEs in the research
programmes might be to involve them in the programmes together with the
large concerns.

Other measures might be more effective for SMEs than the research
programmes _"with_ _a view to meeting the needs of SMEs in the_ _innovation_
_process. General instruments,_ _tax incentives, joint industrial research_ _projects_
_and_ _the utilisation of results are more suitable than fixed quotas in the specific_
_programmes"_ _(BDI)._

The Madrid conference, finally, notes that there is a need to _"improve_
_transparency in the presentation of the procedures for public support for firms,_
_so that the stages the proposal_ _must follow,_ _the assessment_ _criteria,_ _the_
_payment schedule, etc. are known from the outset"._ It is also suggested that
the application forms should be made more comprehensible and that businesses
should be helped in replying to the authorities' requests.

_**vT**_ **73**

**APPENDIX**

**List of individual reactions to the**

**Green Paper**

_**\r**_                             - fif

List of individual reactions to **the Green Paper**

Names **Acronyms** **Country**

**Un.** **Kingdom**

**ABB** **Finland**
**CÀDÀS** **France**
**AËI** **France**

**Spain**

**"ANACT** **France**
**ÀNVÀR** **France**

**Spain**

**France**

**France**

**Die Denkfabrik** **Germany**

**Germany**
**Germany**
**Un.** **Kingdom**
**ESI-VU** **Netherlands**

**Netherlands**

**aBaCus Partnership** *****
**ABB** **Ov** **"** **ABB**
**Acaoémie des Sciences -** **institut** **de France - Comité Applications de** **CÀDÀS**
**Action in Europe for Education.** **Invention,** **and** **Innovation** **AËI**
**Afonso Paulo Manuel (consultant)**
**Agence Nationale pour** **l'Amélioration** **des Conditions** **ae** **Travail** **"ANACT**
**Agence Nationale pour** **la** **Valorisation de la** **Rechercne** **ÀNVÀR**
**Agencia** **d'Àvaluacio** **de** **fecnologia Medica ***

**Air France**

**Air Liquide**
**Akademie fur Innovation,** **Unternehmensdesign und** **Politikgestaitung** **GmbH** **Die Denkfabrik**
**Àkademie** **fur f** **echnikfoigenabschàtzung** *****
**Àilianz Lebensversicherung,** **ÀG** **_**

**Amerada Hess ltd**

**Amsterdam** **Economiser)** **en Sociaal Instituut** ***** **ESI-VU**
**Amsterdam University** *****

**ABB**
**CÀDÀS**
**AËI**

**"ANACT**
**ÀNVÀR**

**Arm** **der** **KartnerLandesregierung** **_**
**Ann Christoph (professeur)**
**Ânsaldo** ***** **_**
**Àrcadi** **- Réseau** **-** **Association des Consultants**
**ARGO - Plastic** **Packaging** **Materials - Plastics in** **Ëngeering** **ARGO**
**Arôvit Petfood** *** *** **_**
**Associaçâo Portuguesa de Professionals em Socioiogia** **industrial,** **aas Org. e APSIOT**
**Association "Industrialisation des Recherches sur les** **Procédés et Jesj IREPÀ**
**Association des Large concerns Françaises** **AGREF**
**Association Nationale de la Recherche Technique** **ANRT**
**Association of European Radios** **AER**
**Assôciazione ItaÏÏa** **per la Ricerca** **'** **AIRI**
**Àssociazione** **Tiguïiio_Attiva** **+** **Promotiguïiio** **sri** **_ _**
**Atlantis** **Research** **Organisation**

**Arm** **der** **KartnerLandesregierung** **_** **Austria**
**Ann Christoph (professeur)** **Germany**
**Ânsaldo** ***** **_** **Italy**
**Àrcadi** **- Réseau** **-** **Association des Consultants** **France**
**ARGO - Plastic** **Packaging** **Materials - Plastics in** **Ëngeering** **ARGO** **Greece**
**Arôvit Petfood** *** *** **_** **Denmark**
**Associaçâo Portuguesa de Professionals em Socioiogia** **industrial,** **aas Org. e APSIOT** **Portugal**
**Association "Industrialisation des Recherches sur les** **Procédés et Jesj IREPÀ** **France**
**Association des Large concerns Françaises** **AGREF** **France**
**Association Nationale de la Recherche Technique** **ANRT** **France**
**Association of European Radios** **AER** **Belgium**
**Assôciazione ItaÏÏa** **per la Ricerca** **'** **AIRI** **Italy**
**Àssociazione** **Tiguïiio_Attiva** **+** **Promotiguïiio** **sri** **_ _** **Italy**
**Atlantis** **Research** **Organisation** **Greece**

**Banca** **Nazionalejdel Layoro** **BNL** **Italy**
**Banca Sella** **Italy**
**BASF** **BASF** **Germany**

**ARGO**

**Banca** **Nazionalejdel Layoro** **BNL** **Italy**
**Banca Sella** **Italy**
**BASF** **BASF** **Germany**

**Bayerische Vereinsbank, AG** **Germany**
**Bayerisches** **Forchungszentrum fur** **Wissensbasierte** **Système** **FORWISS** **Germany**
**Becdelievre RolandJConseiller** **Général Le Mans)** **France**
**Bertelsmann,** **ÀG** **Germany**
**Bio** **Soft** **' "** **_** **_** **_** **_** **Denmark**
**Bodilsen** **Holding** **Denmark**
**Boehnnger** **ingelneim** **_** **Germany**
**Bonn International Centre for Conversion** ***** **Germany**
**Bonnaure P.** **(expert)** **France**
**Bosch,** **GjmbH** **Germany**
**Bouju** **André (consultant)**
**British Ceramic Confederation** **BCC** **Un.**
**British Technology Group** **_** **BTG** **JJn^**
**British** **Telecom** **BT** **Un.**
**Bundësarbeitkammer** **in der Standigen Vertretung Ôsterreichs oei der** **EU** **BAK** **Austria**
**Bundesveroand** **der Cteutschen** **Industrie** **BDI** **Germany**
**Bureau of European Designers Associations** **BEDA**
**Burmah** **Castrol** **_** **_** **__** **Un.**
**Bûro** **fur** **Énergie** **und** **C^kologieManagement** **_** **Germany**
CÀRIPLO~""~ ~ "'IJIJII'1..^1II'Z.-1.1..1" **CARIPLO** **Italy**
**Casa de la Sabiduria** **SA** **Spain**

**FORWISS**

**Germany**
**Germany**
**France**

**Germany**
**Denmark**

**Denmark**

**Germany**
**Germany**

**France**

**Germany**

**BCC**

**BTG**

**Switzeriana**

**Un.** **kingdom**

**BTG** **JJn^** **Kingdom**

**BT** **Un.** **kingdom**

**BAK** **Austria**

**BDI** **Germany**

**BT**

**Bundësarbeitkammer** **in der Standigen Vertretung Ôsterreichs oei der** **EU** **BAK** **Austria**
**Bundesveroand** **der Cteutschen** **Industrie** **BDI** **Germany**
**Bureau of European Designers Associations** **BEDA** **Netherlands**
**Burmah** **Castrol** **_** **_** **__** **Un.** **Kingdom**
**Bûro** **fur** **Énergie** **und** **C^kologieManagement** **_** **Germany**
CÀRIPLO~""~ ~ "'IJIJII'1..^1II'Z.-1.1..1" **CARIPLO** **Italy**
**Casa de la Sabiduria** **SA** **Spain**

**Centre** **d'Études** **et Recherches Appliquées à la Gestion** **_** **CERAG** **France**
**Centre de coolâérationjnternationale** **en recherche agronomique** ***** **CIRAÔ___** **France**
**Centre""d'ë** **[-]** **Ressources** **et** **d'initiatives** **pour** **i'international** **(Ministère de** **CR2i** **France**

**Centre** **d'Études** **et Recherches Appliquées à la Gestion** **_** **CERAG** **France**
**Centre de coolâérationjnternationale** **en recherche agronomique** ***** **CIRAÔ___** **France**
**Centre""d'ë** **[-]** **Ressources** **et** **d'initiatives** **pour** **i'international** **(Ministère de** **CR2i** **France**

**Centre** **européen** **d'entreprise** **et** **d'innovation** **Promotech** **France**
**CentreÉuropéen** **des Entreprises** _**à**_ **i** **Participation** **Publique** **Çl?^** **„.Ç?!?ÎM!T!**
**Centre** **for** **Exploitation** **of** **Science and Technology** **Ç§?J** **_** **Un. Kingdom**
**Centre for** **[r]** **Worlcing~LTfe Research^&** **Dev.ment -** **Halmstad** **Ùniversity_** **_ _** **Ç^!** **[u]** **.** **[s]** **J^?^?** **[n]** **.**
**Centre** **fëchnïque ides** **Industries Mécaniques** **CETJM** **France**
**Centro de** **Enlace** **del Mediterraneo -** **Innovation** **Relay** **Centre_-** **CÉNEMÉS** **Spain**
**Centre** **de** **Formaçao Professional** **para a industria Ceramica** **•** **CENCAL** **Portugal**

**r^**

**Centro de Robotica Intelligente**

**Centro** **di** **Ricerca** **Fitotecnica**

**Centro Promotor de** **inovacao** **e** **Negocios**

**CERAME-UNIE Bureau** **de** **liaison des industries céramioues** **européennes**

**Chanrmre** **de Commerce** **Américaine** **-** **The** **EU** **Committee**

**Chambre de Commerce et d'Industrie de Paris**

**Chambre économique autrichienne**

**Chambre Régionale de Commerce et d'Industrie de Lorraine**

**Chartered Society of Designers**

**Chemical Industries Association**

**Christeijk** **Nationaal** **Vakverbono**

**Colas**

**Colonia** **Assurance**

**Commersbank.** **AG**

**Compagnie des Signaux**

**CS** **France**

**CNCPI** **France**

**CEPSA**

**UNINOVA_**

ICPTN

**CËRAMI** **UNIE**

**CCI de Paris**

**CCI de Lorraine**

**^CSCT** **"** **^**
**jCIÂ**

**CNV**

**Portugal**

**Italy"**

**Portugal**

**Belgium**

**Belgium**

**France**

**Austria**

**Prance**

**Un.** **Kingdom**

**Un.** **Kingdom**

**Netherlands**

**France**

**Germany**

**Germany**

**CS**

**Compagnie Nationale des Conseils en Propriété Industrielle**

**Compagnie Nationale des Conseils en Propriété Industrielle** **CNCPI** **France**

**Compania** **Ëspanola** **de Petroleos** **CEPSA** **Spain**
**Computermac** ***** **•** **Denmark**

**Confédération Européenne** **des Syndicats** **CES** **Belgium**

**Confederation of British Industry** **CBI** **Un.**

**Confindustria**

**Compania** **Ëspanola** **de Petroleos**

**Computermac** ***** **•**

**Confédération Européenne** **des Syndicats** **CES**

**Confederation of British Industry** **CBI** **Un.** **Kingdom**
**Confindustria** **Italy**

**Conseil Européen de** **l'Industrie** **Chimique** **CEFIC** **Belgium**
**Conseil National du Patronat** **Français^** **CNPF** **France**
**Consejo Superior de Investigaciones Cientificas** **CSIC** **Spain**
**Consiglio** **Nazionale** **délie** **Ricerche** **CNR** Jtajy
**Construction Industry Council** **CIC** **Un.**

**Conseil Européen de** **l'Industrie** **Chimique** **CEFIC** **Belgium**
**Conseil National du Patronat** **Français^** **CNPF** **France**
**Consejo Superior de Investigaciones Cientificas** **CSIC** **Spain**
**Consiglio** **Nazionale** **délie** **Ricerche** **CNR** Jtajy
**Construction Industry Council** **CIC** **Un.**

**Construction Research and Innovation Strategy Panel** **CRISP** **Un.**

**CNPF**

Jtajy

**CRISP**

**Un.** **Kingdom**

**Un.** **Kingdom**

**Un.** **Kingdom**

**Spain**

**Cornwall Innovation Centre, Ltd**

**Corporacion** **Empresanal** **de Extremadura**

**Cranfield International** **Ecotechnology** **Research Centre**

**Cranfield International** **Ecotechnology** **Research Centre** **Un.** **Kingdom**

**Crédit Local de France** **France**

**CUV Progress** **CUV Progress** **Bulgaria**

**Daimler Benz** **Germany**

**Danel** **Technology Consultant** **France**

**De** **Montgolfier.** **Philippe (consultant) - Essor Europe** **France**

**Deutsche** **Aktionsgemeinschaft** **Bildung-Erfindung Innovationen** **DABEI** **Germany**

**Crédit Local de France**

**Deutsche Ausgleichbank**

**Deutsche Bahn**

**Deutsche Bank,** **A.G**

**Deutsche Erfinder Akademie**

**Deutsche Telekom**

**Deutscher Gewerkschftsbund - Bundesvorstand**

**Deutscher Industrie und Handelstag**

**Ejner** **Hessei** *** ***

**Electrolux**

**Empresa Nacionai de Innovacion Sociedad Anonima**

**Enemaerke** **&** **Petersen** **• ***

**Germany**

**DB** **Germany**

**Germany**

**Germany**

**DGB**

**DIHT**

**Germany**

**Germany**

**Germany**

**Denmark**

**Belgium**

**ENISA** **Spain**

**ENEA**

**Ente**

**per le Nuove Tecnologie,** **l'Energia** **e** **I'Ambiente**

**Ernst & Young**

**Esbjerg Oilfield Services** _**J^***_ _**'__**_

**Escuela Superior** **de** **Administration** **y** **DJreccion** **de** **Empresas** **de** **la ESADE**
**Espoirs Suscités par** **lesjjudes** **et la Recherche** **Club Esper**

**Ésso,** **AG**

**ÉTÂN** **•** **^_ ~** **~_" __"** _**\**_ **"**
**Étane S.A.**

**Europabiiro** **der Deutscnen Kommunalen Selbsverwaltung**

**Europe's** **J500**
**European Association of Aerospace industries**

**Denmark**

**ENEA** **Italy**

**Denmark**

**Denmark**

**Spain**

**Club Esper** **France**

**Germany**

**ETAN** **Belgium**

**Greece**

**Europabiiro**

**JEurope's** **500**
**AECMÀ**

**Germany**

**Denmark**

**Belgium**

**Germany**

**Belgium**

**Luxembourg**

**Belgium_**

**Belgium**

**Greece**

**Belgium**

**France**

**Belgium**

**Belgium**

**European** **Autorr^tjvejnitiative^roup** ***L^'G**
**European Business and Innovation Centre Network** **EBN_**

**European Confederation of** **Iron** **and Steel Industries**

**European Council for Construction. Research. Development and Innovation**
**European Council of** **Àppiied** **Sciences and Engineering**

**EBN_** **_**

**Eurofer**

**ÊCCRËDI**

**EuroCase**

**European Economic Interest Group** ***** **;** _**(**_ **ZEUS**

**European** **Federation of Equipment Leasing Company Associations** **Leaseurope**

**European Federation of technology & Innovation Consultants** **EFTIC**

**European Fondation for Entrepreneurship Research** **_§^Ë^**

**European Independent Steel Works Association** **EISA**

_**vT**_ **K**

**European Industrial Researcn** **Managment** **Association** **EIRMA**

**European Institute ot Social Studies** *****

**European Organisation for Researcn and Treatment ot Cancer** **EORTC**

**European Organisation for Technical Approvals** **EOT** **A**

**European Public Telecommunications Network Operators Association** **ETNO**

**European Telecommunication Professional Electronic industry** **ECTEL**
**European Venture Capital Association** **EVCÀ**

**Eurostat** **"** **_**

**Fauconnier** **Jean-Marie,** **(architecte)**

**Fédération** **Internationale des Conseils en Propriétés industrielles**

**Federation of European Cancer Societies**

**Federation of** **Smail** **Businesses - National Federation ot self empioyeo and**

**Federazione** **Italians** **aelle** **Casse flurali e** **Artigiane**

**F I A J A u t o ^** _**~**_ _**~~'_**_ **~- — ^ "** **~** **- — -**

**FIAT** **S.p'.A.**

**Finmeccanica**

**Finnish Forest Industries Federation**

**Forbitec**

**Ford-Werke** **_**

**Fraunhofer - Patentstelle fur die Deutsche Forschung**

**Fraunhofer-lnstitut** **fur** **Systemtechnik** **und** **Innovationsforschung** *****

**Fundacion Cotec para la** **innovacion tecnologica**

**FICPI**

**r-ECS**

**F S E T _**

**RAT**

**FIAT**

**COTEC**

**Fundacion para** **el Desarrolïo** **de la Funcion Social de las** **Communicaciones** **Fundesco**

**Gaz de France**

**General Electric Compagny**

**Générale de Placement Banque**

**GlaxoWeilcome** **Pic**

**France**

**jtajy**

**Belgium**

**Belgium**

**Belgium**

**Un.** **Kingdom**

**Belgium**

**Luxembourg**

**France**

**Un.** **Kingdom**

**Belgium**

**Un.** **Kingdom**

**Italy**

**Italy**

**Italy**

**Italy**

**Finland**

**Portugal**

**Germany**

**Germany**

**Germany**

**Spain**

**Spain**

**France**

**Un.** **Kingdom**

**France**

**Un.** **Kingdom**

**Denmark**

**France**

**Belgium**

**GPVindustri** **'»""»"** **'""_** **_** **" 1 _ ~ _** **_** **"~'""_"~**

**Groupe Ecole de Hautes Etudes Commerciales du Nord**

**Groupement Européen des Caisses** **d'Epargne**

**Groupement Européen des Entreprises** **d'Electricité**

**Halarose of Oxford**

**G.P Banque**

**EDHEC**

**GECE"** **"**

**Eurelectric** **Belgium**

**Halarose of Oxford** **Un.** **Kingdom**

**Handelsblatt - Wirtschafts und Finanzzeitung** **Germany**

**Haour Georges (professeur )** **Switzerland**

**Handelsblatt - Wirtschafts und Finanzzeitung** **Germany**

**Haour Georges (professeur )** **Switzerland**

**Hellenic** **Republic^** **Ministry** **of Development** **Greece**

**Helsinki Inventors' Association** **HEKE** **Finland**

**Greece**

**HEKE** **Finland**

**Helsinki School of Economics** **Business Administration** *****

**Hessisches** **Ministerium** **des** **Innern** **&** **fur** **Landwirtschaft,**

**Hoescn - Krupp, AG**

**Huber Edelstahl** **_** **_**

**lb Andersen** **Industri** ******

**IBM DeutschTand**

**Ideon** **Centre** **.**

**Industrie und Handelskammer zu Aachen**

**Industry Research and Development Group**

**Infobrief** *****

**Innovation** **Relay^** **Centre -** **Northof** **England**

**Innovatop**

**Institut Catala de Tecnologia**

**Institut Français du Pétrole** *****

**Institut National** **de** **Recherche Agronomique** *****

**Institute for Managment of Innovation** **a_hd_Jj2chnology** **_**

**Institute for** **Material** **Researcn - Universitair Centrum** **Umburgs_**

**Institute** **for Strategic Consumer Research**

**Finland**

**Forsten,** **Germany**

**Germany**

**Germany**

**Denmark**

**IHK** **zu Aachen**

**IRC North England**

**ICT**

**jFP**

**jNRA**

**IMIT**

**Germany**

**Sweden**

**Germany**

**Ireland**

**Luxembourg**

**Un.** **Kingdom**

**Germany**

**Spain**

**France**

**France**

**Sweden**

**Belgium**

**SWOKA** **Netherlands**

**Institute of Professional Representatives before the European Patent Office** **EPI**

**France**

**Institution** **of jCivH |ngeneers**

**instîtuto de** **Desevoivimento** **e inovacao Tecnologica** **ao** **Minho**

**IDITE Minho**
**CEDE** _**""_**_

**1ST**

**Instituto Superior de** **Economia** **e Gestao**

**Instituto** **SuperiorTecnico**

**Instituut voor Maatschappelijke Innovatie**

**Un.** **Kingdom**

**Minho** **IDITE Minho** **Portugal**

**CEDE** _**""_**_ **Portugal**
**1ST** **Portugal**

**_** **IMI_** **Netherlands**

**Instrument, Measuring,Technique Servicing and Trading Company Limited** **MTA/MMSZ**

**Inter Primo** **^**

**International Federation of Science Editors** **_** **IFSE**

**Istituto di studi sulla ricerca e documentazione** **scientifica-** **_Consiglio i ISRDS** **- CNR**

**Istituto** **Sperjmentale** **per la Frutticoltura** *****

**Jular** **Impotaçào e comércio de madeiras, Lda** **_**

**Kiel** **Institute of_World** **Economics^** **.*** **_** **_**

**Knight Peter** **(consultant)**

**Netherlands**

**Hungary**

**Denmark**

**Italy**

**Italy**

**Italy**

**Portugal**

**Germany**

**Un.** **Kingdom**

***r** **?7**

**Koff**

**Koninkliike Hoogovens**
**Kovacs** **llona** **(professeur)**
**Kraft** **Malerwerkstàtten** **Gmbh**

**Kredietbank**

**Kreditanstalt** **fur** **Wiederaufbau**

**Krog** **Iversen** **&Co** ***** *****
**Labbri Mirko.(project** **manager)**
**Lacave Michel et Dei Castillo Jaime** **(consultants!**
**Lahure Bernard (consultant)**
**Lancashire** **Enterprises**
**Lancaster Centre for the** **Study** **of Environmental Change**
**Landesbank Berlin**

**Larsson John (consultant)**

**Library** **and** **Information Commission**
**Lloyds** **f** **SB Group**
**LPE JD** **Databank (Lex Poot)**
**Lyonnaise des Eaux**
**Magneti** **Marelli**
**Managment Construction and** **Engineering**
**Marks & Spencer**
**Maroushkina Maria (consultante)**
**Medinova ÀB**

**Merck KgaA** **Darmstadt**

**Micrel**

**Minister of Education of Lithuania**

**Mission** **of** **the Republic of Hungary to the Eurooean Communities**
**M.O.A.** **Développement**
**Monte** **deiPaschi** **di Siena**

**Mordchelles** **Régnier** **G. (consultant)**
**Morgan Bruce Sollicitors Tavocats)**
**Morin Jacques (consuitant)**
**Mulcahy Noel (professor)**

**Multi-Poles**

**National** **Committe** **for Technological Development**
**NatïônaiSchooï** **of Public** **Health** **_***
**Nestlé**

**Nethold** **Finance**

**Nonhoff Dieter (consultant)**
**North** **East innovation Center Company, Ltd**
**North Tyneside** **Council**
**Nuclear** **Research** **Institute - Oepanment of Nuclear Technology**

**Nutek**

**nv** **Bank** **Nederlandse Gemeenten**

**Observatory on Agricultural Research Systems** *****
**Oie** **Flensted Holding** *** ***
**Omega Generation** **_**
**Organisation de Copération et de Développement Économiques**
**ôsterreichische Patentanwaît Kammer**

**O t a t o n K Y ~ " ~ ^**

**Otto Versana**
P. _T._ Holding "" "•""™1_. _ZIII1ZZZZZI1IZ......"...1Z_ "I"I- _Z_
**Pateloup Monique (consultante)**
**Patent-6ch Registreringsverket**

**Pechinev**

**Pentacie**
**PFI-Prûf-** **und Forschungsintitut** **fur** **die Schuhherstellung** *****
**Piastre Robert (inventeur)**
**Preussag AG** _**j**_ **__** **;** **.**
**Preussenelektra, AG**
**Qazar** **7** **_** **_** **_** **_** **_**
**Rank Xerox** **_** **^_** **_** **_** **_ ___**
**Renault** **_** **__** **_** **._**
**Repsoi,** **S.A**
**Researcn ana Consultancy Services tor Food.** **Land,** **ana Environment**
**RETI** **NET - University of Salford**
**Reunanen Matti - Kunnioittaen (consultant)**
**Roma Ricerche**

**ARTA**

**LPE**

**MACE**

**M.O.A.**

**Nutek**

**IBV**

**BNG**

**OCDE**

**PRV**

**SAC**

**Réti-net**

**Denmark**

**Netherlands**

**Portugal**
**Germany**
**Belgium**
**Germanv**

**Denmark**

**Italy**
**Spain**
**France**

**Un.** **Kingdom**
**Uji.JCingdom**
**Germany**
**Denmark**

**Un.** **Kingdom**
**Un.** **Kingdom**
**Netherlands**

**France**

**Italy** **_**
**Uo.** **Kingdom**
**Un.** **Kingdom**
**Russia**

**Sweden**

**Germanv**

**Greece**

**Lithuania**

**Hungary**

**France**

**Italy**
**France**

**Un.** **kingdom**
**France**

**Ireland**

**Luxembourg**
**Hungary**

**Greece**

**Switzerland**

**Belgium**
**Germany**
**Un.** **Kingdom**
**Un.** **kingdom**
**Czech Rep.**
**Sweden**

**Netherlands**

**Italy**
**Denmark**

**Italy**
**France**

**Austria**

**Finland**

**Germany**
**Denmark**

**France**

**Sweden**

**France**

**France**

**Germany**
**France,**
**Germany**
**Germany**
**Un.** **Kingdom^**
**On.** **kingdom**

**France**

**Spain**
**Un.** **kingdom**
**Belgium**
**Finland**

**Italy**

_J*T_
_**VS**_

**RWE AG (Khunt** **Oietmar»** **Germany**
**Siemens AG** **Germanv**
**Smithkline Beecham** **Belgium**

**SNIA** **Ricerche** **ttaiv**
**Sociedad** **Êstatal** **para** **ei Desarolio** **del** **Diseho** **industrial** **DPI** **Spain**
**Société de** **Caîcui Mathémathique** **SCM** **France**
**Steelcon Chimney,** **Esbjerg** ***** ***** **Denmark**
**Stephens David Huw (consultant)** **Uh.** **Kingdom**
**STOAS** **[_]** ***** **~** **"""** *** ' " / '** ***~** **"** **^ ~** **Netherlands**

**StokisO_if_** **Belgium**
**Stratégie et Mutation (consultants)** **S&M** **France**
**Strategiscne Studien** **der** **Transtormationsprozesse. Forschung una Beratung** **Germany**
**Studio** **Tempo,** **s.r.l** **Italy**
**Swedish Inventor Association** **Sweden**
**Swiss Federal Institute of Technology at Zurich** **_** **ETHZ** **Switzerland**
**Swissair** **Switzerland**

**Tampere University** **of** **Technology** **Finland**
**Tech'Innove Exapnsion** **_** **France**
**Technologie** **Beratung** **_** **Germany**
**Technology Innovation Information** **_** **Til** **Luxembourg**
**f ËKÊS - Teknologian Kehittamiskeskus** **TEKES** **Finland**

**Télédiffusion de France** **_** **TDF** **France**
**Telefonica** **Spain**
**The** **CIM** **Institute** ***** **Un.** **Kingdom**
**The College of** **Management** **•** **Tel Aviv** **Israel**
**Thomson Multimedia** **France**

**Totai** **_** **France**
**Toy Manufacturers of Europe** **TME** **Belgium**
**Trinity College - Dublin** **Ireland**
**Unibus Rutertratik** *** *** **Denmark**

**Unilever** **Netherlands**

**RWE AG (Khunt** **Oietmar»**
**Siemens AG**

**Smithkline Beecham**

**SNIA** **Ricerche**
**Sociedad** **Êstatal** **para** **ei Desarolio** **del** **Diseho** **industrial**
**Société de** **Caîcui Mathémathique**
**Steelcon Chimney,** **Esbjerg** ***** *****
**Stephens David Huw (consultant)**
**STOAS** **[_]** ***** **~** **"""** *** ' " / '** ***~** **"** **^ ~**

**StokisO_if_**
**Stratégie et Mutation (consultants)**
**Strategiscne Studien** **der** **Transtormationsprozesse. Forschung una Beratung**
**Studio** **Tempo,** **s.r.l**
**Swedish Inventor Association**

**Swiss Federal Institute of Technology at Zurich** **_**
**Swissair**

**Tampere University** **of** **Technology**
**Tech'Innove Exapnsion** **_**
**Technologie** **Beratung** **_**
**Technology Innovation Information** **_**
**f ËKÊS - Teknologian Kehittamiskeskus**

**DPI**

**SCM**

**S&M**

**ETHZ**

**TDF** **France**

**Spain**
**Un.** **Kingdom**
**Tel Aviv** **Israel**

**Thomson Multimedia** **France**

**Totai** **_** **France**
**Toy Manufacturers of Europe** **TME** **Belgium**
**Trinity College - Dublin** **Ireland**
**Unibus Rutertratik** *** *** **Denmark**

**Unilever** **Netherlands**

**Union des Assurances de Paris** **UAP** **France**

**Union des Banks Switzerland's** **_UBS_** **Switzerland**

**Union des** **Confédérations** **de** **l'Industrie** **et des** **Employeurs dMEurooe** **UNICÊ** **Belgium**
**Union Européenne de** **l'Artisanat** **et des Petites et des Moyennes Entreprises UEAPME** **Belgium**

**TME**

**UAP** **France**

**_UBS_**
**UNICÊ**

**Union des** **Confédérations** **de** **l'Industrie** **et des** **Employeurs dMEurooe** **Belgium**
**Union Européenne de** **l'Artisanat** **et des Petites et des Moyennes Entreprises UEAPME** **Belgium**

**Union Française des Designers industriels** **UFDI** **France**
**Union Internationale des Associations et organismes techniques** **UATI** **France**
**Unioncamere Piemonte** **_** **ltaly_**
**Unité de Formation et de Recherche en Science Sociales** ***** **CTESI** **France**

**UniversidadI** **Nacional** **de Jducation** **a** **Distancia** ***** **Spain**
**Universidade** **Aberta** **Portugal**
**Ùniversidade** **Autonoma de Lisboa** **Portugal**
**Université degli Studi di Pavia. Dip.to di Elettronica,** **Prof.** **Franco Maloberti** **Italy**
**Université di Bologna** ***** **Italy** **_**
**Université** **de Innsbruck** **_** **_** **_** **Austria_**
**Université de Lund** **ACLU** **Sweden**

**UFDI** **France**

**UATI** **France**

**CTESI**

**ltaly_**
**France**

**Spain**
**Portugal**

**Autonoma de Lisboa** **Portugal**
**Université degli Studi di Pavia. Dip.to di Elettronica,** **Prof.** **Franco Maloberti** **Italy**
**Université di Bologna** ***** **Italy** **_**
**Université** **de Innsbruck** **_** **_** **_** **Austria_**
**Université de Lund** **ACLU** **Sweden**

**Université** **deJVilnius** **Lithuania**
**University College Gaiway** **UCG** **Ireland**

**University of** **Hamburg** **Germany**
**University** **of** **Hamlstadt** **-** **^gsl^nHalmstadt** **_HH** **Sweden**
**University** **of** **jCentral** **England in** **Birmingham** **UCÉ*** **Un.**
**University of Gôteborg** ***** **Sweden**
**University** **of Iceland, Scientific and** **technical** **Information Services** **Islande**
**UniversityVf Sheffield** **(National transputer Support** **Ce_ntre>** **_** **NTSC** **Un.**
**University** **of** **Sussex^^cience** **Poiicy Research** **Unit** **^SPRU"** **Un:**
**University** **of Sydney - Graduate School of Business** **~GSB** **Sydney** **Australia**
**University of Warwick** **J*** **_** **WRI** **Un.**
**Usinor-Saciior** **France**
**Veba,** **AG** **Germany**
**Verbindungsburo** **des Landes Sachsen-Ànhalt bei der Europàische Union** **Belgium**
**Vew.XG** **(ZÏegier Fritz)** **Germany**
**Victoria** **HoldingJ/ersicherung,** **AG** **Germany**
**Vienna** **Ëconomics_** **and** **BA University** **__** ***** **Austria**
**Vijla'ReSTud_** **__"._"** **_..__..** **Finland**
**Voest** **Alpine Stahl Linz** **Austria**

*****
**Volkswagen** **.** **Germany**
**Volvo** **ÀB** **Sweden**
**Vuman technology** **Services** ***** **Un.**

**ACLU**

**Université** **deJVilnius**

**University College Gaiway**

**UCG**

**Germany**
**_HH** **Sweden**
**UCÉ*** **Un.**

**_HH** **Sweden**
**UCÉ*** **Un.** **Kingdom**

**Sweden**

**Islande**

**NTSC** **Un.** **Kingdom**
**^SPRU"** **Un:** **Kingdom**
**~GSB** **Sydney** **Australia**

**WRI**

**Un.** **Kingdom**
**Un:** **Kingdom**
**Australia**

**Un.** **Kingdom**
**France**

**Germany**
**Belgium**
**Germany**
**Germany**

**Austria**

**Finland**

**Austria**

**Germany**
**Sweden**

**Un.** **Kingdom**

## **_n_**

Welsh Development Agency
Wenzel Joachim (avocat)
Wilson Roger (consultant)
Wirtschaftskammer Osterreich

Yorkshire and Humberside Regional Technology Network

WDA

Welsh Development Agency WDA Un, Kingdom
Wenzel Joachim (avocat) Germany
Wilson Roger (consultant) Un. Kingdom
Wirtschaftskammer Osterreich WKO Austria
Yorkshire and Humberside Regional Technology Network RTN Un. Kingdom

Zentrum Mechanisierung &Technologie Germany

WKO

**jwr** _**w**_

**2.1-B- Reaction of the Governments**

**(Summary established by the Commission services)**

_***%4**_

**THE AUSTRIAN GOVERNMENT'S RESPONSE TO THE GREEN PAPER ON INNOVATION**

**The Austrian government welcomes the GP! ana finds it positive to see a broad**
**definition of the innovation concept being** **used,** **which recognises the importance not**
**only of technological factors but also issues such as** **organisation,** **management,**
**participation, qualifications and** **culture,** **innovation is important for economic**
**competitiveness, jobs and societal problems.**

**From an Austrian perspective, social innovation snouid be given more emphasis, with**
**an accent on the relationship between technology, innovation and employment.**
**However, future actions should take into account the qualified work in innovation**
**policy and employment of the different organisation in the Member States, as well**
**as,** **the studies of the OECD.**

**The debate raised by the** **GPI** **is a process** **which,** **in Austria, will be combined with**
**finalising a national technology policy concept. The Austrian Government welcomes**
**the fact that innovation has gained a central position in the preparation of guidelines**
**for the 5° FP, and propose that, at Community level, the INNOVATION programme**
**should play a leading and co-ordination roie.**

_**Subsidiarity**_

**The principle of subsidiarity must be the starting point for all considerations with**
**regard to education, taxation, legal and other institutional characteristics. Caution**
**should be raised against creating new bureaucratic procedures with which to tackle**
**the individual Action Lines of the GPI.** **Pragmatism** **and recognition of the crucial role**
**played by individual economic actors should be the guiding principle.**

_**Task Forces**_

**Task forces are considered useful however, attention should be paid to the financial**
**contribution of the Union. Transparency and Member** **States'** **participation in decision**
**making must be secured**

_**SMEs**_

**The** **'supply** **side'** **must be better adapted to the real technology transfer and**
**innovation needs of SMEs. Useful pointers in this direction would be to consider the**
**notion of** **'continuous** **innovation', better use of powerful IT instruments, acceptance**
**of the long term perspective from idea to commercial realisation, and adaptation of**
**the support programmes accordingly. (The contribution of the CREST Working Group**
**on SMEs could usefully influence further work on the GPI).**

_**Orientation of R&D towards innovation**_

**The Austrian government is also convinced that:**

**•** **innovation** **should** **be given a high priority in general in the Framework Programme;**

**•** **organisational and structural innovations are at least as important as the**
**exploitation of inventions;**

_**I**_ **[• v ]**

- a European innovation Awara ana oossioie PR activities snouid be organisée by
cne Commission _m_ oraer TC oromote innovation among SMEs, as well as. the
general public.

The Austrian government is sceDticai on the -oie of a centraiiseO institution tor
technology watch.

_Human resources_ _for_ _innovation_

The government, in principle, supports me GPI proposais concerning human
resources, notably:

the importance of teaching technoiogicai themes in schools;
the need for better capabilities in communication and co-operation:
the promotion of a better image of scientific and technological disciplines:

life long learning;
more attention to innovation management in education
the enhancement of knowledge transfer and innovation through improved mobility
of students, researchers and technicians/engineers;

_improved_ _financial_ _conditions_ _for_ _innovation_

For the Austrian government a distinction shouia be made between Business Angels
(mainiv for smali companies), venture caoitai (for medium sized firms) and EASDAQ
(for larger firms). Banks need to develop a culture oriented towards innovation and
risk. More generally there is a need for stronger coherence and networking amongst
different services for technology transfer, finance, management, organisation,
technology, etc.. The instruments of the Structural Funds could be more effectively

directed towards innovation.

Fiscal subsidies are limited by national budget constraints and, in any case, they are
subject to the subsidiarity principle.

_Create an environment_ _favourable_ _to_ _innovation_

 - It is better to reduce barriers to innovation than to create inefficient assistance for

overcoming them.

 - The setting up of firms and innovative projects should be simpler: a general
improvement of co-ordination between locai. regional, national and Community
levels is necessary.

 - A culture of (de)regulation is required which takes into account the needs and
possibilities of entrepreneurs.

 - The strategic use of patent is lacking ana should be made an element in patent
policy at national level and in the European Patent Office.

 - Harmonisation of patents fees and lower fees for SMEs are recommended.

 - Use of licences as a marketing instrument should be better promoted.

_&_
#### **_n_**

**DANISH** **GOVERNMENT'S** **RESPONSE TO** THE **GREEN PAPER ON INNOVATION.**

The Danish Government welcomes the initiative of giving a more central role to the
innovation perspective in policies for researcn and industry. The subject of
Innovation has been topical in Denmark. The cultural context, social ana institutional
innovation, regara for the protection of natural and energy resources, as well as
information society impacts, are all part of the context in which the Danish
Government welcomes a discussion of concrete actions. However, in its opinion
there is a need for better use of analytical tounaation (OECD ana EU studies, for
example) to harness a coherent strategy Tor innovation initiatives. The Danish
Government agrees with the five general objectives of the GPI. with certain
reservations:

Community R&D policy should not be confounded with narrow industry policy
objectives

Improving the access to finance should primarily be seen as a national concern

In general, the actions at Communitv level must respect the principle of subsidiarity
and therefore be justified by their European dimension, as for instance in the case for
standards, IPR or especially expensive R&D.

The following specific points are raised witn regard to the GPI action lines.

Technology Watch will become more and more important for decision makers in
the public and private sector. Community efforts should aim to develop
cooperation and methodology in this discipline between the various national
institutes.

Priority areas for EU R&D should be defined with more attention to the demand
side.

Education must remain the concern of each individual MS however whilst

rooted in the traditions of MS culture it could incorporate a European mutual
recognition of skills and merits.

Whilst agreeing with the benefits of mobility, such schemes must not become
obligatory. Noting that the TMR programme has not achieved a sufficiently
industry orientated dimension, such schemes must have different and realistic
means of meeting different needs.

Special attention is needed towards administrative and economic barriers for
SME participation in RTD programmes. The Coordination of the Commissions
own instruments such as Relay Centres and CRAFT is worth considering.

Fiscal instruments should not be introduced at Community level but increased
transparency of innovation and company related credits would be welcome.

The primary aim of the Danish Governments Industrial policy is to encourage
innovation in enterprises, especiailv in SMEs and at regional level. SMEs wno
generally suffer from a lag in comoetencies and management remain a major

*** H**

**concern and internal** **reinforcement. networK and clusters are cited as key**
**issues in this regard.**

**The objective of developing 'Economic** **intelligence'** **is an area in which the**
**Danish Government would be keen to develop further experience.**

_**1***_

**THE GERMAN GOVERNMENT'S RESPONSE TO THE GREEN PAPER ON INNOVATION**

The German Federal Government welcomed the publication of the Commission's GPI
and reported that the _**'Innovation**_ _**Debate'**_ had been going on in Germany for a
considerable time. There is a strong recommendation from this response that
innovation issues should be managed at Member State and Regional level for best
results. It was also highlighted that the exchange of information and experience
between Member States was of vital importance. It was felt that the Commission
could undertake the coordination to initiate such dialogues.

It made particular reference to the following German initiatives the experience of
which it felt could be of value to the European innovation debate:

- The Koopman report deals with the formal presentation and effectiveness of
regulations

- The INSTI programme (Innovationsstimulierung der Deutschen Wirtschaft durch
wissenschaftlich-technische Information) the aim of which is to help stimulate the
German economy by providing relevant scientific / technical information

- The Delphi technology foresight initiative has operated successfully at national
level

Each Member States' education system is unique, however it should contain basic
Information Technology Skills, legal / commercial studies. It should equip those that
have the ability and will to pursue individualised career paths.

Technology watch activities are more successful if carried out at national level and
Community coordinated comparisons made. Ultimately the decisions on what
technologies are of most important are the responsibility of each individual business.

Regular Innovation surveys in each MS were not were not recommended at this
point.

The German Government agrees with issues relating to intellectual property and
points out that patents are often a key factor in obtaining finance. It suggests that
to illustrate to the public the true cost of patent infringement, estimation of the social
costs should be illustrated e.g. loss of profit for industry and subsequent
unemployment. It agrees in principle with Community. In the field of education, wide
use of utility models.

It advocates greater transparency between MS on the content of courses rather than
concentrating on the mutual recognition of the end product, e.g. qualifications.

In order to enhance the mobility of researchers and students it suggests that EU
structural funds be used to employ graduates or school leavers as innovation
assistants.

The simplification of administration procedures was welcomed and it was suggested
that a seminar with industrial participation should be established to 'Brain Storm' on
how to simplify procedures.

_***lb**_

Whilst in agreement with the conceot mat researcn efforts snouid be better directed
towards innovation, care must be taken mat this does not hinaer creativity or
decrease the level of basic science in particular, at Community level.

- The EU R&D programme should concentrate on a few specific areas of strategic
importance to Europe's future:

- EU R&D should be reserved for larger, nigh risk projects that could not be tackled
at national level:

- The objectives of each R&D programme snouid be cieariy defined with particular
emphasis on their impact on the areas of strategic importance:

- EU Structural Funds to be targeted for innovative means:

- There is also agreement with the target that each MS increases its R&D
expenditure to 3% of its GDP

The German Government agrees that the benefits of innovation need to recognised,
particularly by the gênerai public and ceiieves that the suggestions in the GPI do not
go far enough. It suggests the following actions.

 - the impact of the EU R&D programmes to day to day life should be illustrated to
the public.

 - examine the possibility of getting a group of PR consultants to put in place a
series of practical measures to Dromote a positive image of innovation, possibly
using modern IT methods.

 - In future such measures should accompany the Framework Programmes.

***r** _**?1**_

**THE** **SPANISH** **GOVERNMENT'S** **RESPONSE** **TO** **THE** **GREEN** **PAPER** **ON**

**INNOVATION.**

**General comments**

**The Spanish Government welcomes the Green Paper. It approves the horizontal and**
**integrated approach of the Paper and shares the need to articulate a European**
**strategy to foster innovation. Although the Spanish Government shares in general**
**the analysis undertaken of the situation in Europe, it regrets that the Paper does not**
**fully exploit certain pointers given in the "White Paper on Growth, Competitiveness**
**and Employment", such as: the economic fracture between large companies and**
**SMEs,** **the social fracture, etc. In particular the poor treatment given to innovation as**
**foundation of a long standing** **technological,** **social and economic cohesion, is**
**considered inadequate.**

**The Green Paper limits itself to addressing the main obstacles and challenges to**
**innovation without a proper framework proposal to foster** **innovation.** **in the E.U.**
**Finally more attention should be given to initiatives to promote technology transfer**
**among regions and (traditional)** **sectors,** **to strengthen the competitiveness of SMEs.**

**Specific comments**

**/.** _**Route of action 1:**_ _**to develop technology monitoring and foresight.**_

**The role foreseen for the Institute for Prospective Technological Studies** **(IPTS)**
**should be wider.**

_**2. Route of action 2:**_ _**to better direct**_ _**research**_ _**effort towards innovation.**_

_**•**_
**The Programme Committees should address task force activities.**

**•** **Early SME participation in** **R** **+** **D** **activities, not only on application results.**

**•** **Among the parameters for the monitoring and evaluation of research**
**programmes, social and economic cohesion and improvement of living**
**conditions should be included.**

_**3. Route of action 4:**_ _**to further the mobility of students and**_ _**researchers.**_

**Actions should be designed to attract (and retain) skilled human resources to less**
**favoured regions.**

_**4. Route of action 5:**_ _**to promote recognition of the benefits of innovation.**_

**Traditional media (T.V., radio, press ...) should be used to promote the public**
**awareness in this field.**

_**5. Route of action 7:**_ _**to set up a fiscal regime beneficial to innovation.**_

**In** **the context of public deficit reduction, a previous** **thorough** **analysis of the**
**budget cost of new schemes should be compulsory.**

_**6. Route of action**_ _**8:**_ _**to promote intellectual and industrial property.**_

**Research centres (public and private) should also be the beneficiaries of promotion**
**policies.**

_**"%%**_

7. _Route of action 9:_ _to_ _simp/if_ _y administrative_ _procedures._

The Commission's views are fully shared.

_8. Route of action_ _12:_ _to encourage innovation in enterprises (SMEs) and strengthen_
_the regional dimension of innovation._

The necessary inter-regional cooperation and the coordination role of national
administrations should be strengthened.

_9. Route of action_ _13:_ _to update public action for innovation._

Direct public support instruments should also be encouraged.

Finally innovation policies should be addressed at the level of Heads of
State/Governments, as the appropriate political forums to incorporate innovation
issues into Council Minister's agendas.

**""39**

**THE FINNISH GOVERNMENT'S RESPONSE TO THE GREEN PAPER ON INNOVATION.**

The Finnish Government welcomed the GPI ana wanted to share the experience it
has gained at Member State level with the Community and to actively participate in
the follow up work associated with this publication. The following current initiatives
in Finland- have proven particularly successful and may be of interest to other
Member States.

(i) National High Technology Mentor Programme has been introduced and tested
with promising results. Experienced industrialists rate interested SMEs and
issue a "European Venture Capital Certificate" to facilitate discussions with
financiers. This approach has been prepared in co-operation with the
Commission.

(ii) Kera (the Regional Deveiopment Fund) has recently introduced a publicly funded
small (under 20,000ECU) quick loan facility with very low security
requirements for new companies, it has been very well received by SMEs.

The Finnish Government supports the rapid increase of R&D expenditure. Europe
cannot compete with Japan and US unless this expenditure reaches approximately
3% of GDP. To enable favourable deveiooment of a European innovation policy and
promote the industrial competitiveness of Europe; the R&D expenditure should be
increased both on a national level and European level. The ideas on improving
European innovation processes must be incorporated into the fifth FWP to ensure its
impact on European competitiveness: There is a need for external assistance in
evaluating innovation; making market analysis and in other issues where the **SMEs**
have insufficient competence.

It supports the establishment of the EASDAQ and suggests that technology rating at
a European level be experimented with and such knowledge disseminated. It also
recommends that banks should develop skills and knowledge about the technologies
and the specific financing issues that arise for technology based companies. TEKES
is about to embark on the use of a new financing instrument called an equity loan.
This loan is calculated as the company [:] s own equity capital, thus improving the
company's balance sheet. Use of regionai development funds should be directed to
R&D projects at the national level.

It does not support the role of the IPTS in technology monitoring and would prefer to
see current national systems used ana experience exchanged.
Innovation in the service industry should be encouraged. The service sector should
be included in the innovation financing systems and be treated on equal level with
industry, as it is at least as important for employment.

The following elements relating to innovation should be carried out at Community

level:

(i) preparation of common standards, directives and global agreements,

(ii) mechanisms and cooperation forums that help MS and their enterprises to
learn from the experience of each other,

(iii) projects that are so wide or expensive that one country alone could not
undertake them.

**So**

**(iv) new common legislative and regulatory elements (e.g. European Company**
**Statute),**

**(v) coordination of EU innovation policy activities with other Union measures**
**(e.g.** **structural funds, industrial policy).**

**j/f**

**COMMENTS** **BY THE** **FRENCH** **AUTHORITIES** **ON** **THE** **GREEN** **PAPER** **ON**

**INNOVATION**

**The Green Paper on Innovation is a useful contribution to public** **depate** **and an**
**undogmatic statement on the important subject of innovation.**
**Innovation** **and subsidiarity**

**Innovation is a good example of a clear application of subsidiarity (innovation is first**
**and foremost the responsibility of companies and founders of companies, since it is**
**they, not governments, which have good ideas). European Union involvement in**
**innovation is justifiable primarily for companies active on the European** **and** **world**
**markets. Access for SMEs to European programmes needs to be improved.**
**Analysis of the Green Paper**

**In order to improve the private financing of innovation in SMEs. France has taken risk**
**capital support measures such as the creation of the** _**Nouveau Marché**_ **(1996).**
**Studies of tax reforms aimed at innovative companies are under way, together with**
**an incentive for pension** **funds,** **once set up, to invest some of their resources in**
**innovation.**

**France emphasises that it would be in favour of a Community patent (ratification of**
**the** **1992** **agreement on the Community patent).**

**Simplifying administrative procedures is still a matter for the Member States.**
**The Commission analysis of the inadequacv of research input is pessimistic.** **In**
**France,** **large sums have been invested in research at both national and Community**
**level.**

**France feels that basic research should be subsidised by the State in order to**
**guarantee,** _**inter alia,**_ **a link between basic research and the development of new**
**products.**

**France regrets that the Green Paper does not cover profit-sharing by researchers or**
**nursery schemes.**

**Action paths of the Green Paper**

**France notes that the Green Paper lacks specific proposals and practical action which**
**could be taken by the Commission.**

**The Green Paper makes little mention of the Framework Research and Development**
**Programme, and the over-rigid separation between Action** **3.** **"Dissemination and**
**exploitation of results" and Action 1, "Implementation" of research programmes, is**
**regrettable. Better coordination between these two initiatives would be desirable in**
**the Fifth Framework Programme.**

**France also calls for more clarity in the objectives of the Framework Programme,**
**which should promote our competitiveness in science and technology and cannot**
**simultaneously play a specific coordination role (which is more a task for the ERDF).**
**France welcomes the excellent Task Forces initiative.**

###### **H**

**France has more reservations about the emergence of new** **observatories** **such as the**
**"European Innovation and Rural Development** **Observatory''** **and the "European**
**Observatory of Innovative Practice in Vocational Training".**

**Strengthening the Seville Institute is not a priority.** **On the other hand, France**
**suggests that more could be made of the forecasting efforts of the Member States,**
**such as "Technology Foresight" in the United Kingdom and "100 Key Technologies"**
**in France.**

**France wishes the European Union to act as a coordinator and to ensure that there is**
**consistency between public initiatives and private input which** **will,** **within the**
**Framework Programme, support the industrial research financed jointly by the**
**Commission and manufacturers or public laboratories. The Commission could thus**
**give basic research a genuinely European dimension and boost the development of**
**key technologies.**

*** f**
**9%**

**THE IRISH GOVERNMENT'S RESPONSE TO** THE **GREEN PAPER ON INNOVATION.**

"he Irish Government welcomed the GPI ana agreea in principle with the main thrust
of its contents. The following points illustrate the Irish Government's point of view
in relation to specific items:

(i) There is a limit to the capacity of Member States to mount extensive
Technology Watch exercises, thus it wouid be bénéficiai if this activity
could be carried out at the EU level concentrating on 'technology push'

(ii) Task Forces as currently presented would oniy stimulate innovation in
certain sectors or countries. It is suggested that the method of selection of
Task Forces should reflect the needs of ail Member States.

(iii) The importance given to SMEs in the GPI is welcomed and the Irish
Government, under its EU Presidency has been instrumental in having a
Working

Group of CREST establishea to examine ways of encouraging greater SME
participation in EU researcn programmes. Whilst a number of Routes of
action would also facilitate improving conditions for SMEs, it was stressea
that a more interventionist policy was required to extract ideas ana
knowledge in research institutes into the commercial phase. Current
policies in Finland and Israel were cited as examples.

(iv) The perception of science, technology and innovation must be improved
amongst decision makers, industry and the public. The whole concept of
_**learning**_ needed to be instilled as part of the innovation process. _**Training**_
was considered too specific an activity to achieve this mentality.

(v) Financial incentives were considered most critical and proposals to establish
EASDAQ. bank guarantees in favour of innovative SMEs by the EIF and the
creation of multinational seed capital funds were welcomed

(vi) The importance of technology transfer was emphasised ana it was
suggested that a dedicated set of actions be drawn up to emphasise that
the absorption of tecnnoiogy, regardless of whether it was created inside
Europe or outside can often be a more relevant solution for firms than
internal R&D.

(vii)The STIAC (Science, Technology and Innovation Advisory Council) review
emphasised the importance of linkages and networks, particularly to
overcome the disadvantage of small scale

**X^y**

**THE ITALIAN GOVERNMENT'S RESPONSE TO THE GREEN PAPER ON INNOVATION.**

The Italian Government welcomed the Green Paper on innovation and agreed with its
conclusion and proposed action. It feeis that the GPI and the Synthesis Conference
in Rome (30 May 1996) were useful opportunities to raise awareness on various
matters related to innovation in Europe.

The Italian Government agrees that investments in science and technology should be
made according to the needs of society and/or industry.

It suggests that, apart from the barriers to innovation considered in the GPI, future
action should take into account sectoral barriers to innovation, i.e. those relating to
specific sectors of industry such as assembly, manufactured goods production and
mature industries.

It suggests that particular attention be paid to encouraging the protection of
European Union intellectual property.

_**3T**_ _**9\**_

THE NORWEGIAN GOVERNMENT'S RESPONSE TO THE GREEN PAPER ON

INNOVATION.

The Norwegian Government welcomed this initiative to enhance the innovative
capacity of Europe. The following points highlight its opinions on critical factors
emanating from the debate.

(i) Efforts on technology watch should be better coordinated ana the work of
institutes like iPTS should be wideiv disseminated.

(ii) Further work in the area of statistical innovation surveys is required. Such
work should be more closeiv linked to OECD work.

(iii) The Community should play a key role in developing new and transparent
skills recognition systems

(iv) The development of a European capital market. EASDAQ. was welcomed

(v) Concerned at European companies moving their R&D activities outside of
Europe due to inhibiting legislation e.g. intellectual property iaw. Further
initiatives in this area should be closely linked to OECD & WTO initiatives
and coordinated between national and communitv levei.

(vi) Exchange of experience in the field of regional conditions for innovation
should be strengthened

The Norwegian Government points out the fact that skills to analyse and identify
economic intelligence are in short supply and need to be strengthened. It also
stressed that a European innovation policy for the 21st Century must include a
deeper analysis of the innovative capacity of the service industry.

_******_
_**a**_ **/**

THE PORTUGUESE GOVERNMENT'S RESPONSE TO THE GREEN PAPER ON

INNOVATION

1 Policy of Innovation

The tormuiation of the "European paraaox" involves a iinear ana out o f d a t e vision ot
the phenomenon of innovation. The R&D ooucies and a possible Community
innovation Policy can neither remeav the gaps ot the inaustnai Policies ana of
Enterprise Policies, nor solve maior orooiems. such as the distribution ana
demonstration, which are of a prime necessitv for tne SMES. For Portugal, the
transfer of resources of the R&D programmes towards a Policy of Innovation appears
to be missing viability at the political and economic levels.

2. Growth and Employment - social and organizational Innovation
Portugal considers that the green Paper tackles only in a limited way the problem of
the links between innovation, growth and employment. It is not the technologies
which can solve the problems of the organizations, or which create new
opportunities for the companies, but their innovative application in way, including the
new forms of social and organizational innovation. In this respect. Portugal also
wishes the implementation of actions referring to town planning and to the
revitalization of the rurai areas, teacning and the training, health and proolems of the
3rd age.

3. Financing
Portugal considers that the creation of a framework favourable to the operation of a
European financial market should be envisagea, bv encouraging the creation of
European venture capital companies to finance the companies offering innovative
goods and services. At the same time, it gives its assent for the creation of a market
of the type EASDAQ.

4. Taxation

In order to be able to create a system of tax incentive articulated with the national
systems of direct aid, Portugal suggests that action should be taken at the level of
the tax harmonization for reasons of competition, in view of the increasing
homogeneity of the regulations and in view of the conaitions of investment in the
single market.

5. Transnational networks between companies
Portugal stresses the lack of encouragement and of Community support (in particular
in the SMES) allowing the participation of the companies of the countries the least
advanced in shared cost transnational projects, gathering major companies and SME.
Consequently, it proves necessary to promote, within the SMES, the knowledge of
the European markets, and of the methods of access to the R&D Community funding,
and to develop cooperation networks.

_**i**_

6. Task forces

The laudable intentions to coordinate and articulate between the various programmes
which justify the creation of the Task forces suffered from the lack of transparency
of their selection and financing procedures, thus generating confusion in the debate
between the green Paper on innovation, the financial aid for the 4th. PCRD, and the
beginning of the discussion of the 5th PCRD. However, Portugal is favourable to the
Task forces concerning the intermodality of transport, maritime transport and

multimedia educational software.

***** **9}**

**THE DUTCH** **GOVERNMENT'S** **RESPONSE TO THE GREEN PAPER ON INNOVATION.**

The Dutch Government is in full agreement with the main points outlined in the Green
Paper on Innovation. Recent studies undertaken in the Netherlands have enabled this
country to have experience in almost all the Routes of Actions described in the GPI.
Conscious of the principle of subsidiarity the Dutch Government feels that activities
at Community level should only be considered if a project transcends the national
dimension or if they arise directly as a result of Community policy or regulations.
The following points illustrate the Dutcn Government's view on key policy areas:

(i)Cautions against the use of European funds as investment capital
(ii) Welcomes the formation of EASDAQ, on condition that such an exchange is

left to the market

(iii) Cautions against European prises or certificates until the value of such

Community initiatives become clearer
(iv) Endorses the key issues relating to permanent education and emphasises

the need to establish methods of mutual recognition of training and skills of
each MS.

The Dutch Government points out that the inclusion of issues of a general nature e.g.
administrative costs, labour / patent law etc. which are often addressed in separate
regular consultative forums, specifically set up for that purpose. It is imperative that
innovation is included on the agenda of these forums.

_**"W**_

**SWEDISH GOVERNMENT'S RESPONSE TO THE GREEN PAPER ON INNOVATION**

The Swedish Government was concerned at the very technical slant to innovation
that was presented and stresses that innovation influences every aspect of life. It
particularly emphasises the role of schools in the creativity of individuals and
suggests that work by the OECD couid be of interest on this subject. It feels that all
the Routes of Actions are geared to improved economic performance through
innovation and while this is commendable there are societal needs to be addressed
which will also require very innovative approaches e.g. care for the increasing
numbers of elderly people in the population. Organisational innovations were also
considered lacking.

A few specific points gives an indication of the Swedish Government's opinion of the
GPI.

The role of the Commission in improving European Innovation should be limited
to activities which are not viable to undertake at national level. One major area
would be the coordination of transfer and exchange of experiences and
knowledge between Member State.

The contents of the thirteen Routes of Actions contain nothing new. Such
information has been tried and tested for some considerable time, often not
succeeding in contributing much to innovation.

It is concerned that the ratification of the European patent convention might not
be such a positive approach.

It recommends that the work on innovation which has been undertaken by the **OECD**
should act as a focal point for any further innovation activities undertaken by the
Commission.

**36**

**UK** **GOVERNMENT'S** **RESPONSE TO THE GREEN PAPER ON INNOVATION**

The UK welcomes the Commission's initiative to prepare and publish the Green
paper. UK particularly welcomes the recognition of the need to build on the
successful experience of individual regions 3nd countries to spread best practice
throughout Europe. Moreover, UK welcomes the emphasis on the need to learn from
each other through the exchange of best practice, rather than on all Member States
necessarily doing the same thing.

In particular at the Community level, UK welcomes and supports the Commission
addressing deregulation, streamlining of procedures and competition, as well as the
use of private contractors and decentralisation. There is room to increase the
effectiveness of existing actions and initiatives within the Community and for better
coordination between EU activities.

**Better direct research efforts towards innovation**

Mechanisms linking basic research and innovation are essential. However, little
attention has been paid to incremental innovation which is particularly important
when considering innovation in SMEs.

The UK is strongly in favour of effective interprogramme cooperation. Task forces are
found to be helpful in the recognition of useful areas for cooperation. However, the
operation of the first round of Task forces has raised a number of concerns.

Welcomes the proposal to include in the IV FP monitoring and evaluation procedures
an assessment of the impact of innovation.

Agrees with the need to take innovation factors into account in V FP, but is unclear
about how the Commission intends to do that.

There is no need for a new Community information programme.

The scope for adding value through technology monitoring and foresight at a
Community level is relatively limited.

**Reinforce human resources for innovation**

The recommendations are relevant. However. Member States will have a range of
different priorities and approaches to improving their training systems.

Public authorities, at either national or Community level are not best-placed to
identify skills and qualifications needed by businesses. There is no justification for
setting up a new institution which would duplicate the work already undertaken.

There is no case for any increased funding of TMR, .nor justification for creating
further initiatives.

_***/[GO**_

**Improve the conditions for the financing of innovation**

**The suggested mechanisms should be developed within the private** **sector.**
**Experience shows that lack of access to finance is seldom a main barrier to innovate,**
**though it is often used as an excuse. No objections however to proposals to allow**
**the** **EIF** **to invest in equity.**

**Taxation issues are primarily a matter for Member States at national level under the**
**subsidiarity principle.**

**Foster a legal and regulatory environment favourable to innovation**

**Supportive to efforts in international forums to achieve harmonisation, where such**
**measures are likely to lead to an improvement in the trading environment and/or**
**greater efficiencies or reduced costs in the** **IPR** **system.**

**The UK supports the promotion of patent information services as a method of**
**technology watch.**

**The UK fully supports the streamlining of administrative procedures at the**
**Community level.**

**No opposition, in principle, to a European Company Statute (ECS). However there is**
**no justification for a separate form of ECS or** **EEIG** **for small or for innovative**
**companies.**

**Control of state aids should be a major priority for the Commission. In principle, the**
**UK fully supports the Commission efforts to restrict the levels of state aid to large**
**investment products. UK welcomes and fully supports the Commission's proposal to**
**continue to have competition rules which facilitate technology transfer.**

**Adapt the role and modalities of public action regarding innovation**

**The UK Supports the objective of fostering cooperation among enterprises and**
**strengthening groupings Encouraging an internationaily-minded approach among**
**enterprises is an important issue.**

**Framework Programmes should not be used to support regional actions which are**
**best carried out through the use of Structural Funds.**

**There should be proper evaluation of Community, national and regional investment in**
**innovation. Regional and national initiatives should be evaluated by Member** **States,**
**welcomes the Commission facilitating exchange of best practice between regions and**
**countries.**

**^/fo/»**

**2.1-C- Reaction of the Institutions:**

**(Summary established by the Commission services)**

**1.** **Parliament**

**2.** **Economic and Social Committee**
**3. Committee of the Regions**

_**/ A°&**_

**1,** **Comments** **from** **the European Parliament**

The European Parliament has welcomed the Green Paper and its Action Routes, and
is keen that measurable results should foilow. in a 35-point resolution, the Parliament
calls among other things for:

Dissemination and exploitation of RTD results

- Better diffusion of technical know-how, including more support for the Innovation
Programme and the programme for the Stimulation of the Training and Mobility of
Workers.

- A new Task Force to foster dissemination and exploitation of RTD.

- Focus on research that is interdisciplinary, application-oriented and networkdriven, or that covers industries currently too small to be self-supporting in
research.

- Greater use of information technology, the foundation to be laid by having
Internet access for all schools.

- Priorities to be set based on a better knowledge of the innovation process,
founded on quantitative innovation indicators.

- A permanent review of national 'best practice' encouraging innovation in the
Member States.

Monitoring of **RTD**

- Improved cooperation as regards national and EU research policies.

 - The Joint Research Centre's Institute for Prospective Technological Studies to
have a key role in developing network links between centres engaged in similar
activities.

Economic **and financial considerations**

 - Member States to review their fiscal regimes with a view to promoting innovation.
Suggestions include Japanese-style regulation of domestic financial markets,
longer payback periods for investment, and cheap loans to innovative companies.

 - More competition within the internal market, preventing large companies from
dominating markets and subsidies.

 - Independent technical assessments to give banks a better understanding of
technology-based firms.

_*****_ _**A**>**_

Administrative and **legal** constraints

- Simplification of administrative procedures at both national and Community level.
The Commission's SLIM initiative (Simpler Legislation for the internal Market) is
welcomed, and the Parliament aiso calls for consideration of further administrative
simplification of the research framework programmes.

- Early adoption of the European Company Statute.

- Patent protection periods that vary according to the product type, so as to
balance innovation (helped by patents) with competitions (hindered by patents).

Encouraging **SMEs** to innovate

- Support for innovation at the regional levei. and programmes to encourage SMEs,
to cooperate with universities, industrial research centres, and big enterprises

- Attention to be paid to the roie of intermediary organisations such as banks,
consultants, marketing cooperatives and technical colleges in helping small firms.

- Structural Funds to be oriented towards innovation.

- Recognition that SMEs are not a homogeneous group, so that poiicv should
respect their differences and be targeted on the basis of size and sector.

- Help for SMEs to reduce the financial risks of innovation, including support from
the European Investment Bank

**Social,** **educational and training aspects**

 - Better communication between researchers and the public, especially through
public broadcasting. Funding should carry a responsibility to communicate
research findings to the public.

 - A more consumer-oriented research policy.

 - Greater involvement of the workforce in the innovation process, through
education and direct participation.

 - Attention to 'incremental' innovation, which can be just as important as products
that are fundamentally new.

 - Emphasis on the integration of innovation in education and vocational training,
and a new framework for future innovation-based professional qualifications.

**Task forces and innovation**

 - Debate on the goals of the Task Forces and the establishment of clear links
between their work and the Green Paper's Action Routes.

_**$oir**_

**2.** **Opinion of the Economic and Social Committee**

The Economic and Social Committee welcomes the Green Paper and feels that an
integrated horizontal approach is essential for the success of any innovation policy.

It considers that encouragement of innovations must become the principal objective
of decision-makers, as this is the key to improving competitiveness, employment and
development, and that joint action must be taken at European level, while respecting
the principle of subsidiarity. The Committee also considers that innovations are also
key factors in economic and social cohesion.

The Committee stresses the importance of the entire research system, backed up by
technology foresight.

The Committee feels that there should be greater reliance on a bottom-up approach,
that more attention should be paid to the point of view of potential users, and that
interaction between researchers and users should be promoted.

Resources should be concentrated in joint fields and projects which are of essential
importance. Cooperation is essential, since effective use of the resources is more
important than their quantity. Efforts should be concentrated and priority given to the
objectives.

The Committee considers that conditions favouring innovation come about as a result
of integrating firms, research centres and other factors on a scale that is large
enough to generate "critical mass".

The Committee feels that innovation policy must improve the opportunities for the
most poorly equipped firms to join innovation networks.

The Committee stresses that innovation policy within a firm or in any other structure
requires the participation of all employees, in particular through further training and
an atmosphere which is open and conducive to cooperation.

Of the issues which the Commission reviews and which are favourable to innovation,
the Committee feels that: each new proposal for legislation should be assessed with
regard to its effects, a sustainable demand must be created in sectors important for
society, and market rigidity must be reduced.

In the view of the Committee, among the most important areas for action are:
orientation of research, supported by technology foresight, training, financing,
taxation, openness of markets and dissemination of innovation to SMEs.

The Committee considers it necessary to promote synergy between research,
industrial and other policies.

The Committee thinks that the Green Paper stresses cooperation between research
centres and firms but fails to take account of factors such as cooperation between
different departments within a firm, the fact that a firm's potential increases with the
quality of work for employees, the firm's staff policy and the distinction between
internal and external mobility.

As regards the routes of action in the Green Paper, the Committee has the following

comments to make:

_*4oï_

**Route** of **action** _~i_ _•_ **Technology** **watch** ana **foresight.** Institutes involved in
prospective technoiogicai studies in the Memoer States snouid be encouragea.

**Route** of **action 2 - Orientation of researcn towaras innovation.** The authorities have

the right to intervene, particularly in sectors important for society, where the market
itself wouid not generate demand, by using task force-type activities.

**Route** of **action** 3 - **Initial** **and further** training. There must be a move towards
ongoing improvement. The Knowledge Resource Centres protect should be iaunched,
the purpose of wnich is to act as an interface oetween tne supply ana aemana for
information in the brancn of training in question.

**Route of action 4 - Furthering the mobility of students and researchers.** Mobility
between different sectors and within individual countries must be promoted.

**Route of action 5 - Promoting recognition of the benefits of innovation.** Any
campaigns to heighten public awareness must be based on a thorough understanding

of the factors involved.

**Route of action 6 - Improving the financing of innovation.** Everything should be **done**
to ensure that SMEs have the same financing conditions as those enjoyed by large

firms.

**Route of action 7 - A fiscal regime conducive to innovation.** When enacting or
amending the tax system, any negative effects this mav have on innovation must be

considered.

**Route of action 8 - Promotion of intellectual and industrial property.** A European
patent system should introduced.

**Route of action 9 - Simplification of administrative procedures. It is high time that**

concrete measures were taken.

**Route of action** **10** **- A favourable legal and regulatory framework.** Account should be
taken of innovation needs in EU competition policy. European standards concerning
health, the environment and safety should be strict and binding.

**Route of action** **11** **- Development of "economic intelligence" action.** The task **of the**

authorities is to facilitate more education in this area.

**Route of action 12 - Encouragement of innovation in** **enterprises,** **especially SMEs,**
**and strengthening the regional dimension of innovation.** Economic and social
cohesion is a key objective of the Union, and subsidiarity is its guiding principle.

**Route of action 13 - Updating public action for innovation.** Action is increasingly
being directed towards cooperation with the different segments of society.

_"/tot,_

**3. Opinion of the Committee of the Regions**

**The Committee of the Regions welcomes the Green Paper and thinks that it is**
**necessary to achieve genuine coordination of measures to disseminate know-how**
**and exploit results, while respecting the principle of** **subsidiarity,** **it welcomes the**
**importance attached to local and regional authorities.**

**The Committee approves of the idea of a proactive policy on innovation and**
**mobilising local operators, as this** **is** **essential for maintaining and strengthening**
**competitiveness and creating jobs. The** **locai** **and regional authorities bear a major**
**responsibility for this mobilisation.**

**As regards support for innovation, iocai and regional authorities must be involved in**
**setting** **up a legal,** **economic,** **financial and training environment that is conducive to**
**innovation. The Committee insists on the priority which the authorities must give to**
**financial support for research centres and innovation. Private financial circles must**
**also be made more aware of the challenges of innovation. Finally, rules governing the**
**intervention of the structural funds in financing venture capital must be clarified, so**
**that this tool can become operational. There is a need to develop policies to**
**encourage innovation with a view to improving manufacturing processes, creating**
**new industrial and tertiary-sector products and setting up** **training** **schemes as part of**
**a policy to support SMEs. The European Union has frequently supported efforts by**
**local and regional authorities in this field. Finally, regional education and training**
**programmes must help to provide training in innovation, supported in this by the**
**Socrates, Leonardo and** **INFO** **2000 programmes.**

**The Committee considers that dissemination of the results of innovation contributes**

**to economic and social cohesion, and that improved spatial restructuring will result in**
**the networking of regional innovation systems. Local and regional authorities must**
**promote the establishment of links between research centres, universities and**
**industry for** **the** **purpose of developing networks for exchanging information and**
**experience at regional, transregionai and cross-border levels. Mechanisms for**
**assisting innovation should not be confined to research and development, but should**
**also extend to the marketing and industrialisation phases. There is a need to set up a**
**regional technology watch** **policy.** **The Committee considers that the European**
**network of Innovation Relay Centres must reach a critical size, in geographical terms,**
**and that, as part of the simplification of the schemes to provide aid and for the**
**dissemination of research results, these centres could act as "one-stop shops" for**
**SMEs.**

**As regards the routes of action in the Green Paper, The Committee has the following**
**comments to make:**

**Route of action 1 - To develop technology monitoring and foresight. The information**
**collected and processed by the Seville Institute for Prospective Technological Studies**
**must be exploitable at regional and local** **levei.**

**Route of action 2 - To better direct research efforts towards innovation. Local and**
**regional authorities must set up SME monitoring and watchdog organisations with a**
**view to increasing** **SMEs'** **capacity for research into new technologies.**

_**'/fol**_

Route of action 3 - To develop initial and further training. Regional ana local
authorities can familiarise voung people with innovation, witn the tinanciai support of
the European Union, and develop researcn cooperation between 'irms and

educational establishments.

Route of action 4 - To further the mooilitv of students and researchers. The

Committee emphasises the importance of mooility and underlines the role,of local ana
regional authorities, who are aoie tc forge cooperation iinks between the regions of
Europe.

Route of action 5 - To promote recognition of the benefits of innovation. The
Committee would like to see local and regional authorities kept informed of
successful experience in innovation.

**Route of action 6** - **To improve the financing of innovation.** It is important to make all
the financial partners aware of the need to overhaui their aid machinery and to
introduce mechanisms for encouraging them to become involved in innovation
projects.

As regards **routes** of **action** _1,_ **8. 9** et **10,** _tne_ Committee approves the proposal to
consult local economic and social operators on the establishment of a tax.
administrative and legal environment conaucive to innovation. Regional seminars
could be organised as part of measures to simpiify the business environment.

**Route of action** **11** **- To develop economic intelligence actions.** The budgets of
regional schemes in this field must be increased, whether for back-up for advisory
services, continuing training or assistance in the recruitment of managerial staff. It
would be of great help to have regular assessments of measures taken by the
authorities in order to identify the impact of these policies.

**Route of action 12** - **To encourage innovation in** **enterprises,** **especially, SMEs, and to**
**strengthen** the **regional dimension of innovation.** The local or regional ievei is the
most appropriate one for contacting businesses on matters concerning innovation.

**Route** of **action 13** - **To update public action for innovation.** The Committee approves
the suggestions on the new conception of the roie of the State in innovation.

In conclusion, the Committee welcomes the European Commission's initiative. It
underlines the repeated references to subsidiarity and the role of local and regional
authorities. Its Members will be invited to give an account of their experience and
submit proposais which might be of help in drawing up the summary report and the
action plan.

_**A*>%**_

**ANNEX 2.2.**

**Recent developments in innovation**

**policy in the Member States**

_**Joî**_

**RECENT DEVELOPMENTS** **IN** **INNOVATION POLICY**

**!N THE MEMBER STATES**

Introduction

In the next pages a number of seiectea innovation policv developments in EU
Member States in the 1990s is presentee, in order to illustrate what is now
embracea by the concept of innovation ooiicv examples are clustered according to

the three oroaa obiectives of the innovation Action Plan:

A Human resources, education ana training
B Frame conditions for entrepreneursnip ana innovation finance
C RTD ana industry

Concentrating such masses of information into a few pages can of course not do
justice to the approaches of individual governments. However, it is easily observed
that EU governments **are** attentive to giving new advanced content **and increased**
**coherence** to **their policies for innovation and technological change.** Germany's
_Bundesbericht_ _Forschung_ _1996._ the UK _White_ _Papers_ and the _three-yearly_
_government_ _proposals_ in Sweden are illustrative of such efforts.

**A** **Human resources, education** and **training**

Education, vocational training, further training, and concern for the skills level of the
entire work force are strong elements in the innovation policies. However,
educational budgets in Member States are more decentralised than budget lines of
most other innovation policy relevant actions. The observation that science subjects
trail in popularity among school children and young people has become a concern to
most Member State governments. For example, the _Science and Technology_ _Policy_
_Council_ of **Finland** states in its development strategy _Towards_ _an innovative_ _society,_
that ",..the quality of teaching will be imorovea and educational content will be
renewed for ail levels of education". T he _Innovation_ _Agencv_ in **Austria** Dromotes
innovative projects in schools, nurtures innovative problem solutions deveiooea by
students by funding project costs, giving prizes to winning teams and enabling them
to participate in international competitions. The agency also runs the _Award_ _for_
_Innovation._ In **Luxembourg** a revision of the law of the secondary technical education
and the relevant engineering diploma is promoted. In addition, the "Prix à
l'Innovation", has been developed by the Luxembourgish Federation of Industries and
in connection with the educational system. In **Denmark,** the Ministry of Education is
working on the ways that innovation and entrepreneurial culture can be encouraged
from the primary and secondary educational levels. Also, the _THOR (Technology_ _by_
_Highly Oriented Research)_ initiative, which is scneduled for 1 997 and will consist of
a limited number of big research grants awarded to excellent scientists will also
contribute to make the area of technology and science more attractive for young
people to enter, in **the United Kingdom** the _Prince of Wales Award_ has recently been
extended with prizes also for the most commercially successful innovations.

!f we look in more specific areas in the field of education we can mention the
following initiatives:

_**y**_

_A._ _1_ _The training and mobility of researchers at doctoral level_

In Germany the international exchange of researchers is supported through several
programmes, such as the _Alexander von Humboldt Stiftung_ giving grants to more
than 2000 researchers per year and the _Deutscher 'Akademischer_ _Austauschdienst_
supporting more than 50000 individuals Der year. In addition, the _DFG_ doctoral
programme _(Graduiertenkollegs)_ has grown rapidly from ECU 1.6 million in 1990 to
ECU 41 million in 1995. The _Three-year pian for research and innovation_ _1994-96._
in Italy, states that " the instruments of University diploma and the research
doctorate, which have been introduced far later than in other industrialised countries,
must be made more responsive to the requirements of the country's production
system".

In **Greece** the programme of _targeted research fellowships (YPER)_ started in 1995
with the aim to create a pool of highly educated persons dealing with industry
related problems. In **Spain** the _national_ _programme for the training of research_
_personnel_ has been focused towards the priority areas of the 19 _national_
_programmes making_ up the _Third national R&D plan_ _(1996-1999)._ In **Ireland** _PhD_
_support grants_ wiil increase in 1997 from ECU 1250 per individual at present to ECU
2500 which is in addition to the number of PhD students supported by other lines in
the S&T budget. In **Denmark** the government continues to give high priority to the
training of researchers, for example by continuing the programme for _visiting_
_researchers from abroad_ and by providing _grants for Danish research students to go_
_abroad._ The aim is to at least maintain the present level of enrolment at PhD

courses.

_**A.2**_ _**The linkages between university level education and the enterprise sector**_

In this field most policies and measures aimed at supporting the mobility of
university graduates into their first jobs and to promote the exchange of research
staff. In **Belgium** the _Flemish_ and _Walloon regions_ have each implemented
programmes aiming at the financial support of graduates' recruitment by enterprises,
especially SMEs. in _Wallonia._ the _FIRST programme_ enables researchers to be
recruited by universities and comoanies (SMEs) with a view to developing
partnerships, and in _Flanders_ a similar scheme is linked to the sponsoring of
enterprise clusters. In **the** UK, the _Teaching Company_ _Scheme,_ encourages the
mobility of students and graduates towards industry. Also, career problems of
contract research staff at universities have been eased through an agreement
involving the research councils, the _Royai Society_ and the _British Academy._ In **the**
**Netherlands** additional funds wiil be used for the _Kennisdragers in het Midden- en_
_K/einbedrijf_ _(KIM)_ project (similar to the UK _teaching company scheme.)_ In **Sweden**
a report from the _Ministry of Industry_ recommends that PhD programmes should be
adapted to industry needs and that a new type of industrial associate professors
should be introduced to allow the hiring of persons with experience from industry.
The _Ministry of Education and Science_ in Spain, has initiated a _sectoral_ _programme_
_for the training of university academic staff and improvement of research personnel_
with the aim to promote the exchange of research personnel between industries and
public research centres and the development of enterprises' R&D units.

In **Germany,** under the particular aim to integrate R&D man power in R&D projects of
SMEs in the new Lander, several programmes under _BMBF_ and _BMWi_ continue and
are increased in volume. The creation, in 1995, of the _Centre of Advanced European_

_**/f/f/f**_

_Studies (CAESAR)_ in Bonn is another effort to :ncrease flexibility, notably avoiding
giving tenure to researchers, insteaa. scientists will be nirea to worK ror only five
years on funaamentai and application onenteo researcn projects such as nanotechnoiogy or bio-electronics which are oromising for the next century. Another
novelty will be that _CAESAR_ is to be financea as a private institute living from the
interest of-the initial enaowment of ECU 360 million trom the federal government
and ECU 34 mio from North Rhine Westphalia. In **Denmark** the _industrial_ _PhD_
_Fel/owsnms_ continue at the levei of 45 new graOuates per year, wnich are
simultaneously empioyea by a company ana enroilea at a university institute as a
PhD students. ^ne **Greek** programme _Diavios_ nas a pilot demonstration character
(co-financea by the _European_ _Social_ _Funo)_ aiming to suoport first contacts between
students ana companies having RTD activities, in **Ireland** schemes for graduate
training ana mobility include financial support for companies'" R&D personnel in order
to work in overseas companies R&D departments: training to graauate
entrepreneurs to assist them in developing skills reauired to run their own business:
and. assistance to SMEs to recruit technical graduates for 1 year period.

_**A.3**_ _**Vocational training and further training**_

Memper States governments address the reauirements for vocational training ana
further training primarily from the objective _or_ giving an increasea proportion of
young people adequate skills ana maintain tne employaoility of young people.

In **the** United **Kingdom,** the government, through the White Paper _Competitiveness._
_Forging Ahead_ _(1995),_ endorses the new national targets for education and training
put forward by the _National_ _Advisory_ _Council for Education_ _and Training_ _(NACETT)_
and sets out its concrete objectives including the support of a _Sector_ _Target_
_Challenge_ for industry training organisations ana others: the comparison of basic
qualifications for employment with those of ieading competing countries and work
with the industry training organisations to bencnmark training in companies: to run a
small firms training challenge offering a total of ECU 6 mio for the best training
projects involving ten or more small companies; and, to publish a consultation
document on individual responsibility for lifelong vocational learning. The _Science_
_and Technology_ _Policy_ _Council_ of **Finland** states in 1993 _[Towards_ _an_ _innovative_
_society)_ that, a growing emphasis wiil be placed on basic skills in initial vocational
education aiming at more comprenensive curricula: and an evaluation of the
educational sector of adults training will take place due to its growing importance.
In **the Netherlands** the White Paper _'Knowledge_ _in_ _action"_ (1995) stated the need to
increase the efficiency and effectiveness of current funding to vocational training and
enterprise oriented training; to finance annuailv with ECU 7 mio an innovation fund
for technology and vocational training; and to stimulate fiscally apprenticeship and
trainees in enterprises. In **Austria** technology relevant vocational training measures
include the introauction and use of new technologies, methods, organisational forms,
and promotion of quality; the development of educational models combining at-work
and external qualifications; models that consider the connection between
technological and communicative and social competencies; and development of
cross-companv qualification co-operation.

**B** **Framework conditions for entrepreneurship and innovation** finance

Recent national White Papers and Action Plans show the need to rationalise the
framework conditions to support SMEs and industrial competitiveness. The

                                                                   - ^

following examples are listed under some main categories related to entrepreneurship
and innovation finance.

_**B. 1**_ _**Administrative**_ _**simplifications**_

Administrative simplifications, deregulation and liberalisation, establishment of onestop shops for enterprises are all part of many governments' published plans, in
**Belgium** each one of the regions is planning the establishment of one-stop shops, as
part of their efforts to simplify administrative procedures. In **Denmark,** as part of a
larger action plan, the _Ministry_ _of Business and Industry_ includes several elements in
its project to reduce administrative burdens like the removal or simplification of
existing administrative rules; the simplification of **fees** and taxes; and, the
establishment of a simplified reporting system so that companies can satisfy all
authorities through reporting to a single point. Both **France** and **Germany** have
established one stop shops for administrative formalities. The **German** _BMBF_
likewise reviews the existing legislation from the point of view of its effect on
research and innovation. In **France** a pilot project will be launched in four regions in
order to co-ordinate technical legal interventions of various state departments. In
**the United Kingdom** a prototype one-stop regulation-shop has been developed and
will be demonstrated at selected Business Links throughout the country.
Furthermore, the _Minister_ _for Science and Technology_ has announced a package of
deregulation measures to help small firms in the areas of singie notification for tax
and National Insurance for new businesses; new rights for businesses in
enforcement actions; streamlined development controls; a draft bill for consultation
in industrial tribunals; and a prototype IT system to provide them forms and
regulations.

_**B.**_ _**2**_ _**IPR**_ _**and patents**_

The excessive costs of patent protection in Europe compared with patent costs in
the United States, and the increasing number of new problems related to IPR are
addressed in most Member States. The variety of measures demonstrates the
difficulty of combining the benefits of protection (allowing a pay-back to the
inventor/innovator) with the benefits of wider exploitation of new products,
processes (in particular in biotechnology), or services.

The _European_ _Patent_ _Convention_ has been joined by **Finland** and it is under
consideration in **Ireland** to do likewise. Patent protection in **Greece** has been
extended from 15 to 20 years to make it compatible with EU guidelines. In **the**
**United Kingdom** studies are underway on the role of the UK Patent Office vis-à-vis
the European Patent Convention and on the role of European directives applied to
biotechnological inventions.

Other initiatives to make better use of _patent information_ are taken in **Austria** with
the establishment of a platform called _'Patentverwertung';_ in **Spain** with aid from the
_Ministry_ _of_ _Industry-,_ and in **Belgium** via the _Office for Industrial_ _Property_ _Rights._ In
**Germany** subsidies to SMEs for patent application will be available from 1997 and
100 new teaching posts in patent information will be created at science and
engineering faculties under a new programme _Innovationsstimulierung_ _der_ _deutschen_
_Wirtschaft_ _durch wissenschaftlich-technische_ _Information_ _(INSTI)._

_**r**_ _**/ \ ^**_

_intellectual_ _property_ _ngnts_ Droblems are unaer scrutiny in manv countries. New
norms nave come into force in italv concerning procedures ana sanctions concerning
patents, trade marks, royalties etc.. wniie. in Germanv. the _SchlichterKommission_ _s_

- ecommendations are now in the form ot government proposals to be aoproved by
the _Bundesrat._ _BMBF_ is supported ir. this work as well as in diminishing non-legai
barriers to-research ana innovation by the so-called _Cleanngstelle_ _fur Innovation_ _und_
_Recht._ in Sweden the particular proclems ot IPR wnen industry uses university
research capabilities have been studied by tne Ministry of Industry.

_B._ _3_ _Norms and_ _standards_

There is an uneven presence of adequate infrastructures to promote recent years'
advances in the use of high qualitv norms and standards, hot least in the field of
services and in the application of total oualitv standards or design as a competition
parameter. Among the recent developments are the following:

In Spain regulations for the quality and industrial security and for environmental
audits have come into function with a view to help exports, and a _National_
_Certification_ _Agency_ _(ENAC)_ has been created as a private association, in Sweden
the system for testing ana control wiil be further aaaptea to European rules. In the
United Kingdom the new national accreaitation boav for conformity assessment
service, known as the _United_ _Kingdom_ _Accreditation_ _Service_ _(UKAS),_ came into
being in August 1995. thus comoieting the orivatisation of the former _National_
_Measurement_ _Accreditation_ _Services_ _iNAMAS)._ In Austria support has been made
available fpr ISO 9000 reviews in the service sector, and the _Innovation_ _Agency_
promotes industrial design. In Greece and Portugal promotion of standardisation and
certification are parts of the action iines for the promotion of industrial development

and innovation.

_B.4_ _Innovation_ _Financing_

Innovation financing and the more substantial investments needed for the
exploitation of innovative products ana processes are supported, in particular with a

view to the needs of SMEs. in ail Merrmer States with schemes for seed and venture

capital, soft loans and guarantees, or incentives to private savings, 'business angels'
ana moves to allow pension funds and building societies to make funds available for
knowiedge-based enterprises. In manv Member States the government budgets also
allow for some revenue losses through fiscal incentives in the iarge financial markets
of London, Frankfurt, Brussels ana Paris concrete steps being taken towards the
formation of EASDAQ (National Association of Securities Dealers Automated
Quotation) by the end of 1996..

in Austria two initiatives will be implemented: _Privatcapital_ _for SMEs_ with guarantees
for private investors, development of a standardised model for mobilizing equity
capital, and establishing a "market" for business angels; and _Grundungssparen_ for
long term investment credits for new businesses at the start up phase and for the
foundation and take over of enterprises. A _seed financing scheme_ funded by the _ITF_
and managed by the _Innovationagentur_ provides assistance to new businesses active
in novel technologies, by furnishing consulting services and supplying venture
capital. In Denmark the _Industrial_ _Development_ _Companies_ scheme provides a
guarantee (at 50 per cent) for investment by private develoDment companies that
finance SMEs in need of further capital ana management competence. Twelve such

**x**
_**'/4U**_

investment companies have _Qeen_ aoproveo since !994 under an overall state
guarantee of ECU 132 mio. in **Finland** eauitv basea development loans tor R&D in
SMEs and venture capital for business start-ubs, the latter through the recently
established _Finnisn_ _industrial_ _Fund,_ seem to continue.

in **France** -the launch of the _'NOUVEAU_ _MARCHE"_ is expected to mobilise key
oiayers on the French eauitv market and aims to achieve around 30 introductions
each year. The Frencn _Plan for innovation_ foresees that venture capital funds snouio
mobilise ECU 155 mio within 3 years, in **Germanv** the _Deutsche_ _Bôrse_ announced.
in March 1996. that it wiil open a _Neuer Marki_ ;n 1997. This new marKet will target
telecommunication, biotechnology, multimeaia ana new services. _Deutsche_ _Bôrse_
will also join with the _'Nouveau_ _Marcne*_ in Pans ana the Brussels _Bourse_ with a view
to develop a network of new markets for eauities (EURONM) in growth companies.
Government supported eouity and credit scnemes for SMEs wiil also be extended:
the _Kreditanstalt_ _fur Wiederaufbau_ innovation loan programme is to be improved with
at least ECU 525 mio per year (pending approval by the European Commission); and,
the experimental _Beteiiigungskapital_ _fur junge_ _Technologieunternehmen_ _(BJTUJ_
started in 1989, and wiil be continued by _Beteiiigungskapital_ _fur_ _kleine_
_Technologieunternehmen_ _(BTU)_ with the reiease of another ECU 471 mio.

In **Greece** a _Technology_ _Performance_ _Financing_ _-type_ _(XAT)_ programme wiil soon be
launched with the aim to distribute the innovation financing amongst three parties,
i.e. the technology supplier, the technoiogy user and the financial institution. In
**Spain** one of the action lines of the _SME initiative_ _for industrial_ _development_ is
devoted to the improvement of the access of SMEs to sources of financing and to
the support of networks of interface organisations of financial character. _ICO-Pymes_
is a new form of credit line available to companies that develop projects financed by
the _Centre for industrial_ _and Technoiogicai_ _Development_ _(CDTI),_ with the possibility
for additional finance up to 70 per cent ot the total investment of the project. The
_National_ _Innovation_ _Company_ _(ENISA)_ which JS a public venture-capital company
foresees in its plan for 1996-1999 investments of ECU 21 mio. In **Luxembourg,** the
"Société Nationale de Crédit et de d'Investissement" (SNCI) has developed loan
schemes for technology and innovation related projects.

In **the** **Netherlands,** while administrative costs for businesses are found to be a
gênerai problem concerning all kinds of companies, there are many initiatives to
facilitate credit and finance for technoiogy investment like the simplification of
applications will be simplified for pilot studies and small credits from the Technical
Deveiooment Fund _(Techniscn_ _OntwikKelingsKreoiet)'._ Techno-starters will be given
extra support by the Government: Tecnnoiogy brokers (seed capital or iicenses):
Technoiogy ratings (feasibility check). in **Sweden** three _NUTEK_ programmes are
running, which bring down the costs of SMEs that engage in innovative projects;
_SNITS_ that supports technology transfer through feasibility awards for the
development of a business plan: _SMINT_ that promotes the formation of R&D
consortia in particular for international co-operation: and, _seed_ _financing_ gives small
feasibility awards and soft loans for innovative projects during the stages before
commercial financing is possible. A Swedish version of the UK _Business_ _Exoansion_
_Scheme_ has been introduced, allowing for tax savings when investing in small
unlisted firms. A new risk capitai operation for small, innovative firms is being
launched by the _Swedish_ _Industry_ _Fund._ In 1993, the Swedish parliament decided to
dissolve the _Wage-Earners_ _Funds._ About ECU 770 mio were allocated to risk capitai
operations (while a iarger ameunt was used to create 18 research foundations).

_**'/A^**_

In the United Kingdom, the government's proposals in the 1995 and 1996 White
Papers on competitiveness include the encouragement of greater competition in the
provision of capital, in particular to SMEs; help of growing businesses to get access
to the most appropriate finance through a new _Business_ _Link_ service in England,
_Enterprise_ _Networks_ in Scotland, and _Business_ _Connect_ in Wales; continue to
encourage prompt payment; and allow corporate bonds into personal equity plans
and loosen restrictions to make it easier for companies to issue bonds. In the UK,
that concentrates more than 4 5 % of the venture capitai funds in Europe, a number
of initiatives and schemes have developed like the networks of Business Angels or
the development of the 'Alternative investment Market (AIM)' by the London Stock
Exchange in July 1995.

_**B.**_ _**5**_ _**Fiscal incentives**_

Fiscal incentives for firms to perform R&D are now in widespread use in Member
States **(Austria, Belgium, Greece, Ireland. The Netherlands, Spain** and **Sweden)** but
have been abandoned in **Finland.** For example, in **Greece,** the _Investment_ _Law_ was
amended in 1994. It provides a wide range of incentives (investment grants, interest
subsidies, tax allowances and increased depreciation rates) aiming simultaneously at
promoting regional development. In **Belgium** the federal government has plans to
revise the fiscal regime in order to encourage the reinforcement of the enterprises'
own resources. Self-financing within the SMEs will be made more attractive. Higher
fiscal deductions will also be linked to the deposit of patents. In **Luxembourg,** fiscal
incentives for material investments in enterprises have been developed in a way to
indirectly promote innovation in firms.

In **Finland** general _tax deductions_ _on R&D efforts_ were taken into use in the late
1980s but do not belong any more to the fiscal instruments. In **Ireland,** among the
recommendations from the _STIAC,_ was an integrated set of tax measures to
stimulate business R&D, including dividend relief for owner managers, R&D tax
credits, reduction of costs for R&D personnel and R&D service companies, and tax
changes to encourage multinational companies to establish their regional
headquarters and strategic functions in Ireland. In **the Netherlands** ECU 23 mio per
year will be given to improve depreciation flexibility of innovative technologies drawn
towards the Netherlands. Since 1994, funds under the _Act to Promote Research_ _and_
_Development_ _(WBSO),_ through tax incentives, has been increased; _WBSO_ is offered
either as reduction in personnel costs through a reduction of taxes and premiums
paid by the employer, on salaries for R&D personnel; or, as an extra income tax
reduction added to the tax forfeit for the self-employed who themselves develop
R&D activities in SMEs. In **Spain** fiscal incentives have come into force in the
beginning of 1996. Forty per cent may be deducted of the R&D costs of enterprises
that exceed the average of the costs incurred during the preceding t w o years.

**C** **RTD and Industry**

Many countries have seen some changes of ministerial portfolios, in several
instances following a change of government. The common trend has been to achieve
a more powerful co-ordination of policies for industry, research and human
resources. Objectives coincide and all countries prepare or implement actions with
large similarities, most visible with regard to information society initiatives. Priorities
differ among countries according to the current situation of the science, technology

_**/I4&**_

and innovation svstem in eacn country. The size ot individual economies, industrial
structure, specific economic problems are liKewise factors that determine priorities at
national and regional level. Below are summarised characteristic examples ot the
latest developments.

_C. 1_ _Technology_ _foresight_

In 1995 the first results of large scale tecnnoiogy _foresight_ _exercises_ using Delphitechnique were puPlisheo in **the United Kingdom, France** and **Germany.** Already the
follow-up is seen in the form of impact on the government R&D expenditure plans. In
**Austria** the _Technology_ _Information_ _ana Policy Advice_ _programme_ will be extended
to 1998. _Technology_ _foresight_ _networks_ are at work in **the Netherlands** where aiso
the _Consultative_ _Committee_ _for_ _Explorative_ _Studies_ _(OCV)_ involves the major
research organisations in its studies. **Ireland** has also developed a strategy for its
technology foresight exercises. In **Finland.** _The Science_ _and_ _Technology_ _Policy_
_Council_ (chaired by the _Prime Minister)_ monitors emerging technoiogicai needs of the
economy. In **Denmark** a new _Technoiogy_ _Assessment_ _Council_ has been created to
give advice to parliament and government with special emphasis on initialising public
debates on various emerging technologies. In **Spain** the _National_ _Evaluation_ _and_
_Assessment_ _Agency_ aiso carries out studies and prospective analyses. !n
**Luxembourg** a technology watch initiative is developing by the Ministry of Economy

and CRP-Henn Tudor.

_**C.**_ _**2**_ _**Multiannual**_ _**programming**_

Comprehensive multiannual programming at government level, in addition to
statutory yearly budgets and finance acts, is a common exercise in several Member
States. In most of the following examples those plans outline both the overall aims
and budget lines and institutions.

Examples of annual expenditure plans with almost equal details for innovation
relevant areas are those for _Trade and_ _industry_ by the _Cabinet_ _Office_ in **the United**
**Kingdom** and of the _Ministry_ _for Economic_ _Affairs_ _(BMWi)_ **Germany.** **In** **Finland** a
major exercise is performed every five vears in order to establish new generations of
_national_ _technology_ _programmes._ !n **Germany** the _Bundesbericht_ _Forschung_ _1996_
represents a three-vearly review. **Greece** is in the middle of the _2nd_ _Operational_
_Programme_ _for Research_ _and_ _Technology_ _(EPET II)_ _(1994-99),_ while **Italy** is
implementing a third _Three-year_ _plan_ _for research_ _and innovation_ _(1994-96)._ In
**Portugal** muitiannuai financing of the best R&D institutes is part of the new
government's programme. In **Spain** the _Third national plan for R&D_ _(1996-1999)_
was introduced in June 1995. In accordance with established practice in **Sweden** a
three-yearly _proposal_ _for research_ is due in September 1996, following a _proposal_ _for_
_industry in_ 1995.

_**C.3**_ _**White Papers**_

White Papers and national strategies or development plans harness the political
authority for further co-ordination over time and over otherwise separate budget
lines. Examples relevant for innovation vary in detail and scope. A national strategy
for science and research is being established in **Denmark.** **In** **Finland** a strategy for
innovation was published in 1993 and a White Paper entitled _Industrial_ _Policy_ _Vision_
was published in 1 996 and is expected to be followed by a technology strategy. In

**^ ?**

France me Ministry ot industry has announcec a oian for innovation. **Ireland** and
me **Netherlands** nave ooth. in 1995. proaucea White Papers on the theme of the
knowledge society. In 1996 _Forfas_ in **Ireland** -auncned a new 15-year strategy
document. _Shaping_ _our fuiure:_ _A strategy_ _ror enterprise_ _;n_ _ireiana_ _in_ _the_ _21st_
_century,_ prepared for the _Minisier_ _for Enterprise_ _and Employment,_ Finally, the United
Kingdom, from where the terminology _oi_ White Papers originates. n-as made tne

exercise an annual institution.

_C.4_ _**New national**_ _organisational_ _forms_

Reallocation of government portfolios ana departmental responsibilities are another
inaicator of poiicv development. The trend in several countries has been to maintain
or raise the level at wnich R&D exoenditure is co-ordinateo with other industry
relevant budgets.

In **Austria** the t w o main ministries are. now, the _Ministry_ _for Science,_ _Transports_ _and_
_the Arts_ and the _Ministry_ _for Economic_ _Affairs._ In **Belgium** the _**inter-ministerial**_
_Science Policy Conference_ is the forum for co-operation agreements involving the
competencies of federal, regional and community authorities. In **Denmark** research
and information technology is, since 1994. combined in one Ministry and a new
legislation on the advisory system nas oeen passed in 1995 and 1996. In **Finland**
_the Science and Technology_ _Policy Council_ (chaired by the _Prime Minister)_ monitors
emerging technoiogicai needs of the economy.

In **Germany** the fédérai government orovides most of its research finance through the
reorganised _Ministry_ _for Education,_ _Science,_ _Research and Technoiogy_ _(BMBF)._ By
creating, in 1995. the _Council_ _for Researcn,_ _Technology_ _and Innovation_ under the
_Fédérai_ _Chancellor_ a piatform has Peen made for directing the dialogue between
science, industry, unions and politics towards central questions for the future. In
Greece a new _Ministry_ _of Development_ has been created by merging the Ministries
of Industry, Trade and Tourism. in itaiy the three-yeariv clans will be updated
annually under guidelines from the _inter-ministerial_ _Committee_ _for_ _Economic_
_Planning;_ a parliamentary committee is examining a bill that would entrust an
external observatory with the evaluation of universities and public research bodies;
_AG/TEC._ _the agency_ _for innovation,_ has been set up under the initiative of the
_Minister of_ _industry._

In **Portugal,** the new government has stated its aims concerning several issues
central to innovation policy _(PEDIP_ _II,_ multiannual financing for the best R&D
organisations, the information society, vocational training, and the _Institute_ _for_
_SupDort_ _of Small_ _and_ _Medium_ _Firms_ _and_ _investment_ _(IAPMEI),_ for example);
important changes are made in the _Ministry_ _of Economy_ and the _Ministry_ _of_ _Science_
_and Technology._ In **Spain** the new government's proposals carry forward an
approach already introduced in the _Third national plan for R&D (1996-1999)_ from
June 1995. In the United Kingdom the _Office of Science and Technology_ _(OST)_ has
been transferred to the Department _of Trade ana industry_ in 1 995.

_**C.5**_ _**Directing R&D towards**_ _**innovation**_

Following are a number of characteristic examDles of Member States' programmes

and instruments to better direct research efforts towards innovation and international

competitiveness.

_* * * %_

in Austria the two main instruments are tne _Researcn Promotion_ _Puna (FFF)._ which.
in 1994, shifted its focus to areas sucn as micro-electronics, environment protection,
information technology and software development, and the _Innovaiion_ _and_
_Technology_ _Funds (ITF)._ in **Belgium** the university-industry interface structures and
the science parks have multiplied during the last ten years in addition to sectoral joint
research centres, jointly financed bv the fecerai government and the regions, in
**Denmark** the governments latest research package has ailocated money to
strengthen research in universities ano approved technoiogicai institutes as well as
new strategic programmes: _THOR_ _(Tecnno/ogy_ _ov Highly Oriented_ _Research)_ which
is scheduled for 1997 will consist of a iimited number of big research grants
awarded to excellent scientists for basic research orpjects with paramount industrial
relevance; and a new _action_ _plan_ _f_ _owards_ _entrepreneurs_ focuses on the
establishment and survival of new enterprises, especially SMEs.

In **Finland** the above mentioned _Finnisn_ _technology_ _strategy_ will act as a guideline for
the _Technology_ _Development_ _Centre_ _iTEKES)_ which has a centrai funding role for
both university research and industrial research, as well as for other implementation
bpdies. for example the _Technical_ _Researcn_ _Centre of Finland_ _(VTT)_ which is the
single largest research institute; both _TEKES_ and _VTT_ have been through a process
of evaluation in order to improve effectiveness. In **France** the _Ministry_ _of_ _Industry_
has announced a _plan for innovation_ with a major shift of its interventions towards
the development of _Key Technologies-re\ate6_ issues (ECU 155 mio will be devoted to
a call for proposals) as well as of the _ANVAR_ schemes. The _SME,_ _Trade_ _and_
_Handicraft_ _Ministry_ has announced the creation of a new public agency _(ANVAC)_
devoted to the development of innovation within the service and trade sectors. The
_Ministry_ _of_ _Research_ has among its priorities the labelisation of _Centres_ _de_
_Ressources_ _Technologiques_ now going on in six regions. As from 1997. a bonus aid
of 5 to 1 0 % will be given to those big companies which will include partnerships
with SMEs in their projects. Medical research action lines will be modified to increase
mobility between research and clinical activities, and to focus research on medicai

research and bio-sciences.

In **Germany** the introduction of model projects _ILeitprojekte)_ will help to an early
understanding bv researchers and users of how to exploit the existing R&D potential:
and the Ministry _for Economic_ _Affairs_ _(BMWi)_ has. since unification, stepped up its
commitments to programmes for R&D personnel, innovation support, and research
suppprt in the new Lander, for example in the form of _Innovationkollegs_ involving
different scientific departments and innovative enterprises, each for a period of five
years. In **Greece** the management of existing schemes and the launch of new ones
continue to be based on the implementation of the _Community_ _Social_ _Funds;_ a
number of programmes require the active participation of enterprises: _Programme_ _for_
_the development_ _of industrial_ _research_ _(PAVE), Research consortia_ _for improving_ _the_
_industrial_ _competitiveness_ _(EKVAN),_ _Co-financing_ _programme_ _(SYN)_ and _Programme_
_of_ _targeted_ _research fellowships_ _(YPER)._

In **Ireland** an additional ECU 5 mio allocation for science, technology and innovation
programmes was announced in March 1996 wnilst the overall government response
to the _Science._ _Technology_ _and Innovation_ _Advisory_ _Council_ _(STIAC)_ report is yet to
be finalised: the _Programmes_ _in Advanced_ _Technologies_ _(PATs)_ represent a medium
to long-term strategy for the development or a technological infrastructure to serve
Irish industry. In **Italy** the _Three-year_ _plan ror research and innovation_ _1994-96_

_**/t*$**_

considers, that the _Inter-Universitv_ _Consortia_ wnich have Deen successful ana offer
prospects tor a greater efficiency in me use OT resources, snouid be categorised as
institutions; and gives directions ror _CNR_ 'greater integration of its activities with
rhose ot other puoiic and private entities!. _ENEA_ (since the 1980s diversifying into
new Technologies, energy and the environment) and research bodies of other
Ministries; - under the _Minisiry_ _for_ _University_ _and_ _Scientific_ _and_ _Technological_
_Researcn (MURST)_ new contracts have been signed in the framework of the _National_
_Researcn Programmes_ on: technologies for tne construction and the protection of
buildings, environment, and cardiology t

In **the Netherlands** the policy initiatives outlined in the White Paper _"Knowledge_ _in_
_action"_ are being developed, for example: subsidies tor _Project-basea_ _co-operation_
will be given to promote co-operation between ousinesses themselves and between
private sector and research institutes m a range of technology fields. The Cabinet
wiil be establishing _Leading_ _Technological_ _institutes_ _(Topinstituten)._ In **Portugal** the
above mentioned administrative restructuring aims at more efficiency, including for
the two main, EU suoported. incentive programmes _PEDIP_ _II_ and _PRAXIS_ _XXI._ In
science poiicy the focus will be on the support to the excellence of research teams,
as weli as on the training and employment ot researchers, instead of physical
infrastructure. Industrial innovation oolicv wilj include a stronger commitment to
encourage intangicle investments. In Spain the _National_ _programme_ _for_ _the_
_promotion_ _and_ _linking-up_ _of_ _the_ _science-iechnology-industry_ _system_ _(PACT!)_
concentrates on and improves existing instruments and creates new mecnanisms.

In **Sweden** 28 _competence_ _centres_ at eight universities started their activities in
1995 with support from the _National_ _Boara_ _for_ _Industrial_ _and_ _Technoiogicai_
_Development_ _(NUTEK)_ aiming at creating concentrated research environments in
which industrial partners participate actively: _RTD_ _consortia_ _for regional_ _development_
is a temporary 5-year programme under which 22 ccnsortia have been launcned. In
**the United Kingdom** the major influence of the Foresight programme is seen on for
example the S&T priorities ot the research councils and government departments:
since March 1995. 13 new LINK programmes have been targeted on kev areas of
promise and research relevant to business will be taken into account wnen funding

universities

_**C.6**_ _**SMEs. innovation support infrastructures and regional dimension**_

Re-organisation at government levei has been accompanied by restructuring of
institutions as well. Intermediary institutions for the suppprt of technology transfer
and the co-operation among major researcn institutions are often organised as
private non-profit entities outside the oubiic sectcr. The **regional dimension** of
making this network of intermediaries more efficient and better connected with
national initiatives is illustrated in some ot the examples.

In **Austria** the _Austrian_ _Institute_ _for the Promotion_ _of the Economy_ _(WIFI),_ has
develpped a comprehensive management consultancy service and the _Ministry_ _for_
_Economic_ _Affairs_ intends to start a firm-to-firm visit-scheme; the _Austrian_ _Industrial_
_Promotion_ _Fund_ has launched an innovative technology transfer programme with
'Contact Projects' including the possibility of grants or subsidised loans to
marketable products; the _European_ _Recovery_ _Programme_ _Fund (ERP)_ has shifted its
emphasis from investment promotion to innovation, regional development,
infrastructure and internationalisation. The _Innovation_ _Agency,_ in addition to other

_*Alo_

activities mentioned above, is the general secretariat tor the _Association_ _or_ _Austrian_
_Technology_ _Centres,_ in Belgium the _Fiemisn_ government, for examoie, fosters the
establishing of collaboration _clusters_ among enteronses concerned mainly with R&D
and the supply OT technological services.

In DenmarK the _Action_ _plan_ _wwards_ _entrepreneurs_ for 1996 and 1997 aims at:
strengthening the entrepreneurial culture, reducing administrative Purdens. improving
access to financing of innovation, strengtnening and rationalisation of the regional
advice and support services, and making special efforts to suppprt high tech ana
inncvative entrepreneurs. In Finland _Centres_ _of Expertise_ are established in

connection with the best laboratories of universities and research institutes as one of

the iinks between R&D and the regional policy.

In France the new strategy foreseen tor _ANVAR_ in the _innovation_ _plan_ will imply a
better follow up of fast growing companies, introduce project evaluation criteria
concerning the impact of the projects on grewth and employment, reinforce the role
of regional delegations, and offer new financing instruments; as already mentioned,
for SMEs. Further plans to reorganise the support to new companies creation and
survival are expected in the autumn. The regional dimension in national STI policies
is strengthened bv the ORATE _(Observation_ _Régionale de_ _l'Appui_ _Technologique_ _aux_
_Entreprises!_ initiative, taken Py the _Ministry_ _of Education and Researcn._ This initiative
links the innovative growth layer ot SMEs with the responsibilities pf regional

authorities to assure a coherent set of measures. _ORATE_ focuses aiso on human

resource requirements and on the medium term economic impact within the region of
technology diffusion.

In Germany three current programmes of the _BMWi_ will be merged into one federal
programme with a considerable increase of funding; programmes under _BMBF_ Tor the
new Lander provide enterprises support to laoour costs when new scientists or
engineers are recruited, give suppprt to small enterprises for the use of-external R&D
contracts, support key technoiogy fields ano support establishing new firms. In
Greece the decentralised establishment of sectoral technoiogicai development
companies, science and technology parks and liaison offices is in addition to the
_STRIDE-Hellas_ orogramme. Programmes for _Demonstration_ _Projects_ _(PEPER)_ and
_Technoiogy_ _Brokerage_ are launched. In Ireland, in addition to existing programmes,
37 county enterprise boards have been established to encourage new firm formation
and to assist micro enterprises already in existence tc develop; there is a proposal to
assist companies to form company netwprks.

In Italy the rationalisation of the technoiogicai infrastructure for SMEs is one of. the
aims in the _Three-year_ _plan for research ana innovation_ _1994-96._ A number of local
initiatives (incubators, research laboratories, information society experiments etc.)
have been taken involving local industry, Chambers of Commerce, universities and
regional authorities. In the Netherlands a range of innovation facilities for SMEs and
which operate as tax and credit incentives has been mentioned above. Among new
projects can be mentioned Enterprise _Houses_ to improve co-operation between
intermediary technology transfer organisations. Also nationai instruments for generic
technologies have facilities for SMEs.

In Portugal the above mentioned _IAPMEI_ wiil be more closelv involved in providing
advice and service to SMEs: the science park _Taguspark_ has iaunched so-called
_anchor projects_ with the involvement of large R&D institutes, companies and banks;

the potential of science and technoiogy parks in the Lisbon area and incubation
centres is being studied. One of the three instruments of the technological policy
in Spain under the _Ministry of Industry_ is the _Institute of the Small and Medium Sized_
_Industrial Enterprises_ _(IMIP)._

The 22 new _RTD consortia for regional development_ in **Sweden,** mentioned above,
are helping SMEs in supported regions to co-operate and to regard institutes,
universities and larger companies as resources for competence. Other new
instruments are, for example a pilot programme for _technology_ _transfer to SMEs_
_from industrial research institutes_ which aims at creating longer lasting networks,
_ALMI_ _Business Partners_ which is a government-owned consultancy with 40 offices,
and support to the trade in technoiogicai _services_ between SMEs and public
technology providers. In **the United Kingdom** the _Cabinet Office_ foresees a further
increase in the number of _'Teaching_ _Company Scheme'_ programmes, as well as the
growth of a similar _'College-Business Partnership'_ launched early 1996 and a rapid
uptake by companies of the new services from _'Design Counsellors'_ which are an
addition to the Business Link scheme.

_**^/llZy**_

Recent White Papers and launch of strategic plans of Member
States

**AUSTRIA**

**"Technoiogiepolitisches** **Konzeot** **der** **Bundesregierung** **(draft)",** **WIFO,**
**Seibersdorf & Joanneum Research, Mav** **1996.**

**"Informationsoffensive.** **Bundeskanzler** **Vranitzky** **stellte** **in Alpbach** **die**
**Weichen fur den** **Informations-Highway",** **in** **Innovativ.** **3/1994** **Oktober.**

**"BMoWV** **-** **Informationsgesellschaft** **-** **Telekom** **Initiative** **Osterreich,**
**Grussworte** **von** **Bundesminister** **Mag.** **Viktor** **Klima",** **from**
**[webmaster@iis.joanneum.ac.at.](mailto:webmaster@iis.joanneum.ac.at)** **(04/07/95).**

**DENMARK**

**"Research** **in perspective, White** **paper** **on a national research strategy",**
**Ministry of Research and Information Technology** **1995.**

**"From vision to action, info-societv 2000", Ministry of Research and**
**Information Technology, 1995.**

**"Erhvervsredegorelse** **1995", Ministry of Industry and Business. 1995.**

**"Open dialogue on Danish research for the future, Research policy 1996**
**report to the Danish Parliament", Ministry of Research and Information**
**Technology, June** **1996**

**FINLAND**

**"Towards** **an innovative society, A development strategy for Finland", Science**
**and Technology Policy Council of Finland.** **1993.**

**"Finland's way to the information society, The national strategy", Ministry of**
**Finance, 1995.**

**"National innovation system and** **employment".** **Science and Technology**
**Policy Council, November** **1995.**

**"Industrial policy vision", Ministry of Industry, May** **1996.**

**FRANCE**

**"Les 100 technologies clés pour l'industrie française à l'horizon 2000",**
**Direction générale des stratégies industrielles,** **1995.**

**L'innovation dans les PME, Rapport Chabbal,** **1995**

**GREECE**

**2nd Operational Programme for Research and Technology (EPET** **II).**

**Operational programme for the Industry** **(1994-1999)**

**GERMANY**

**"Bundesbericht Forschung 1996", BMBF, 1996.**

**"Forschungsleistungsplan** **1994 des Bundesministeriums fur Wirtschaft",**
**BMWi,** **1994.**

**IRELAND**

**"Making knowledge work for us, A strategic view of science, technology and**
**innovation in Ireland",** **STIAC,** **1995.**

**"Shaping our future: A strategy for enterprise in Ireland in the 21st century",**
**Forfas,** **May 1996.**

**ITALY**

**"Ricerca e innovazione per io** **sviluppo.** **Piano triennela** **della** **ricerca** **1994-**
**1996",** **MURST, 1994**

**THE NETHERLANDS**

**"Kennis in beweging, Over kennis en kunde in de Nederlandse** **économie",** **EZ,**
**OC&Wand** **LNV, 1995.**

**"SWAP 2000",** **EZ,** **and** **OC&W,** **1996**

**PORTUGAL**

**"Program do XII Governo Constitutional",** **1995.**

**SPAIN**

**"III Plan Nacional de** **l** **+** **D** **1996-1999".** **CICYT.**

**"Libro Blanco de la industria: Una poiftica industria para Espana".**

**"Estrategia** **Tecnologfa** **Energética de Largo Alcance** **(ESTELA)",** **Ministry of**
**Industry and Energy,** **1995.**

**SWEDEN**

**"Nâringsdepartementet",** **Regeringens proposition 1994/95:100 Bilaga 13,**
**1994.**

**"Âtgarder** **for att bredda och utveckla anvandingen av informationsteknik",**
**Regeringens proposition** **1995/96:125.** **1996.**

**"Samverkan mellan hôgskolan** **och naringslivet". Ministry of Industry,** **1996.**

**"Forskning och pengar", Ministry of Education.** **1996.**

**THE UNITED KINGDOM**

**"Competitiveness: Forging** **ahead.** **White paper", DTI,** **1995.**

**"Trade and Industry 1996, The Government's Expenditure Plans** **1996-97** **to**
**1998-99", Presented to Parliament by the President of the Board of Trade and**
**Industry ...,** **1996.**

**"Developing a Winning Partnership", A report of a joint City/Industry working**
**group established by the Innovation unit of DTI.**

**"Foresight, First progress report", OST. 1996.**

**"Competitiveness, Creating the enterprise centre of Europe", HMSO, June**
**1996.**

**"Forward look of government-funded science, engineering and technology**
**1996",** **HMSO.**

_**y**_

**ANNEX** **2.3.**

**Statistical tables**

**ENCL0S-3.DOC** **18.10.96** **10.30** ***//•£ tf**

**Table 1**

**Europe in World-wide research: R&D indicators for the Triad**

JAPAN

**104** **069**

**2.95**

**833**

**19.7**

**73.4**

**526** **501**

**8.0**

**367** **000**

**6**

USA

**142** **047**

**2.45**

**545**

**39.2**

**58.7**

**962** **700**

**7.4**

**765** **000**

**6**

Total R&D expenditures (MECUs) 1994

Total R&D expenditures as % of GDP 1995

Total R&D expenditures per inhabitant
(ECUs) 1994
% of total R&D expenditures financed by
governments 1993

% of total R&D expenditures financed by
industry 1993

Number of researchers 1993

Number of researchers per thousand
employed 1993
Number of researchers in industry 1993

Number of researchers per thousand
employed in industry 1993

_**Source:**_ _**European**_ _**Commission.**_ _**DG XII**_ _**from OECD data**_

**Iable_2**

EU15

**121** **882**

**1.91**

**329**

**39.6**

**53.5**

**774** **071**

**4.7**

**376** **000**

**2**

**Recent trends for R&D undertaken by firms**
**(US prices** **1987,** **billions ECUs, average annual growth rates)**

**Percentages**

**11981-1991 Q1991-1993**

_**Source: MERIT, data: OECD, EUROSTAT.**_ _**IMF.**_ _**UNIDO**_ _**and**_ _**UNESCO**_

_**fat,**_

**Table 3**

**Positions of the Triad by technoiogicai area, measured in patents,** **1993**

Share (%) of Eurooean patents in
the Worla

EUROPE EU USA Japan

Share i%) of US patents in the
World

5U USA Japan

31.8

23.4

20.0

16.6

15.5

8.0

20.9

Electronics / electricity

Instruments / optics

Chemicals / pharmaceutical prod.

Industrial processes

Mechanical engineering /
transports
Consumer goods

All area

34.2 j 30.0

37.8 32.4

**i**

40.3 | 33.7

50.1 j 25.6

58.5 19.2

64.0 16.9

46.4 27.3

46.7

50.8

51.0

50.5

45.4

50.1

48.7

11.5

14.9

28.2

22.3

23.6

19.1

16.6

35.4

28.0

19.7

19.3

22.5

12.5

25.0

_Source: USPTO._

_Data: Treatments STO and CHI-Research._ _1995._ _UNESCO reoon on Science in the World._

**Table 4:**

**R&D EXPENDITURES (AS A % OF GDP) AND** **THEIR** **EVOLUTION**
**FOR SELECTED COUNTRIES**

R&O expenses as a % of GNP

_Source: World-wide report on_ _competitivitv._ _World economic forum._ _IMD_

**Table 5**

**Gross Domestic R&D Expenditures as % of GNP by Member State**

**3 -r**

**2.5 +**

**2** **+**

**1.5 +**

**1 +**

**0,5** **+**

**F** **UK** **DK** **NL** **B** **I** **IRL** **E** **P** **GR**

**Reference years: 1 9 9 1 (B), 1 9 9 2 (D, F,** **IRL,** **P), 1 9 9 3 (UK, DK, NL,** **I,** **E, GR)**

_**Source: Eurostat, research and development, annual statistics 1995.**_

**labiée**

**DISTRIBUTION OF INNOVATION EXPENSES IN** **1992** **IN SOME**

**MEMBER STATES ***

**Testing**

**Market analysis**

**Others**

**Product design**

**R&D**

**Patents**

**• In** **1992.** **in the** **12** **Member States of that time except Luxembourg, plus Norway, Switzerland and**

**Iceland**
_**Source: EVCA, Ernst & Young**_

_**'jlf**_

**Table 7**

**DISTRIBUTION OF INNOVATION EXPENSES IN 1992 IN SOME MEMBER STATES BY FIRM SIZE** **[4 ]**

**100%**

**• Market analysis**

_**9**_

_**a**_
_**3**_
**c**
**0**

**OL**

**•Testing**

**• Others**

**a** **Product design**

**a** **Patents**

**• R&D**

***** **In 1992 in the** **12** **Member States of that time, except Greece, Portugal, United**
**Kingdom and France. For Germany, only data relative to large firms are known.**

_**Source:**_ _**CIS,**_ _**Preliminary results**_

**WAYS OF KEEPING UP COMPETITIVITY IN TERMS OF PRODUCT**

**INNOVATION** **IN** **SOME MEMBER STATES ***

**60** **T**

**50** **+**

**Secret** **Patent*** **Registration**
**ofconcept**

**Adv. on the**

**compet** **In**
**the design**
**& planning**

**Complexity**
**of** **the proa.**

**I** **Large** **Q Medium • Small**

*** In** **1992** **in the** **12** **Member States of that time, except Spain, France, Italy, Greece,**
**Portugal** **and** **United Kingdom**

_**Source: CIS Preliminary results**_

_**/ .**_ _**AV^**_

**Table 9**

**IMPORTANCE OF FACTORS HAMPERING INNOVATION**

**60** **,**

**Economic** **Firms linked** **I.P.R.** **Too simple to Customers'** **Timetable** **Lack** **of** **tech.**
**factors** **factors** **copy** **reaction** **opportunities**

**QNon-inno** **Qlnno***

*** Companies having undertaken product or process innovation during the period** **1990-**
**1992**

_**Source: EUROSTAT**_ _**(CIS).**_ _**Preliminary results**_

**Table** **10**

**IMPORTANCE OF THE OBJECTIVES OF** **INNOVATION**

**90** **T**
# **lllllllll**

**Increase** **Lower** **Product** **Widen** **Create** **improve** **Improve** **Replace** **Decrease**
**market** **prod,** **cost** **quality** **prod.** **new** **prod.** **working** **obsolete** **damages**
**share** **range** **markets flexibility conditions** **product** **to** **the**
**environ.**
**Objectives**

**Percentage of firms considering these factors as very important or essential (reference**
**years:** **1990-1992)**
_**Source:**_ _**CIS**_ _**(Preliminary results)**_

_*****_ _**A*>**_

**Table 11**

**Significant correlation coefficients between employment, product**

**innovation,** **process innovation average growth rates in various**

**European countries** **(1970** **-** **1992)**

Product innovation Process Innovation

_Year:_ 70-90 80-90 39-92 91-92 70-90 80-90 §552 91-92

Belgium + + + 0 + + + 5

Denmark + + + 0 + + + 5

France + + + + + + + +

Germany + +~ 5 5 + + 5 5

Italy + - " - + - - 

Netherlands + + 0 - + + - 5

Norway + + 6 Ô + 5 5 5

Spain + + + 5 + + + 5

United Kingdom + + + + + + + +

_**Source:**_ _**EIMS,**_ _**Innovation**_ _**and employment in**_ _**Europe.**_ _**CIS**_ _**data,**_ _**Licht,**_ _**1995**_

**Iable_L2**
**Changes in employment in micro-firms and** **small,** **medium size and large**
**firms,** **Europe-15,** **1988-1995, 1988=100**

```
       110 T

         105 -r

       100 SmaN

          1988 1989 1990 1991 1992 1993 1994 1995

```

_**Source:**_ _**Research**_ _**and**_ _**studies**_ _**on small**_ _**firms,**_ _**ElM,**_ _**Vol.**_ _**A,**_ _**n°**_ _**11/12,**_ _**November**_ _**1994**_

_**sfZ***_

**Table 13**

**Company registration per country** **1 9 8 8 - 1 9 9 3,** **1 9 8 8 =** **1 0 0**

1988 1989 1990 1991 1992 1993 change in %
Germany 1 100 103 114- 120 122 125 + 25
Germany 2 n.d. n.d. 100 110 102 101 + 1
Belgium 100 100 95 93 97 n.d. -3
Denmark 100 117 117 143 131 n.d. + 31

Spain n.d. 100 99 107 118 n.d. + 18
France 100 101 99 91 90 90 -10

Greece 100 84 70 62 69 76 -24

Ireland 100 99 98 n.d n.d n.d -2

Italy 100 95 94 114 103 97 -3
Luxembourg 100 130 137 140 149 159 + 59
Netherlands 100 109 112 121 135 n.d. + 35

Portugal 100 112 125 119 146 141 + 41
Un. Kingdom 100 109 109 91 75 67 -33
Austria 100 115 83 79 91 102 + 2

Finland 100 108 95 88 92 96 -4

Norway 100 n.d 76 n.d 52 n.d -48
Sweden 100 99 117 101 84 94 -6

+ 25

+ 1

-3

+ 31

+ 18

-10

-24

-2

-3

+ 59

+ 35

+ 41

-33

+ 2

-4

-48

-6

Median Value 100 103 99 107 99.5 99

Germany 1 refers to the former West Germany, Germany 2 to re united Germany

-1

_Sources:_ _Germany_
_Austria_

_Belgium_
_Denmark_
_Spain_
_Fin/and_

_France_

_Greece_

_Ire/and_
_Italy_
_Luxembourg_
_Norway_
_Netherlands_

_Portugal_
_United Kingdom_
_Sweden_

_IfM,_ _Bonn_
_IFG_ _Databank,_ _Vienna_
_National_ _Statistical_ _Office_

_Danish Statistical Office_

_Office of industry registration and_ _IKEI_ _estimates_
_Finnish Statistics, Company register_
_INSEE,_ _SIRENE_ _file,_ _1994,_ _ANCE_
_National Statistical Office of Greece_
_Inventory of Industrial Production_ _1987-1990_
_Movimprese Data Bank_

_Comapny register_
_Central Statistical Office_

_Van der Hoeven, WHM and WHJ Verhoeven, Creatie en_
_teloorgang van_ _arbeidsplaatsen._ _Studies and research on smalt_
_firms, ElM,_ _1994_
_INE-Monetary_ _and Financial_ _Statistics_
_Estimate of company_ _birth._ _National Westminster Bank_
_Swedisk statistics_

_**Ml**_

**Table 14**

Size

20-199

200-499

500 +

**Impact of innovation on employment. The case of Italy**

_Employment_ _Growth Rates_

_Innovative_ _companies_

_Non-innovative_ _companies_

Employment

Growth

1992

1.03

Employment

Growth

1992

1.07

1.01

0.98

Productivity
Growth

1.12

1.14

1.10

Export
share 1992

73.0

81.3 | 0.98

98.3 j 0.94

Productivity
Growth

1.03

0.95

0.86

Export
share 1992

59.0

64.5

68.1

_Source: ElMS, Impact of Innovation on Employment_ _in_ _Italy._ _Analysis from CIS data,_ _1995._

**Table 15**

**Intangible factors and competitiveness**

**Innovation**

**Patents**

**Quality**

**Promotion**

**Processes**

**Sales effort**

 **3**
**3**
**C**

**u**
**9**
<
**O**

**3**
**CO**

**3**

**Ot**
**5-**

**o**

**-I** **<***

**-2** **0** **2** **4** **6** **8** **10**

**Emerging market share**

_Source: PIMS_ _1994._

**QLow** **D** **Average flHigh**

PIMS (Profile Impact of Market Strategy) pioneered by General Electrics and further developed at
Harvard. PIMS associates Ltd (USA) and selected academic partners including the Irish
Management Institute are responsible for PIMS data gathering research and consulting.
Analysis carried out for units within large companies in Northern America (mainly United States)
and in Europe (50% in the United Kingdom)

_**/III**_

**Table** **16**

**VENTURE CAPITAL**

**DISTRIBUTION OF STAGES IN PERCENTAGE OF INVESTMENTS IN**

**EUROPE IN 1995***

**Replacement**

**9.8%**

**Expansion**

**52.8%**

**Buy-out**

**21.5%**

- 15 European Member States except Luxembourg, plus Norway, Switzerland and
Iceland

_**Source:**_ _**EVCA,**_ _**Ernst**_ _&_ _**Young**_

**Table** **17**

**DISTRIBUTION ON INVESTMENTS IN 1995**

**BY INVESTED AMOUNT**

**•Buy-Out** **• Replacement Capital** **Q** **Expansion** **I Start-up &** **Seed**

_**Source: EVCA - Ernst & Young**_

_**/l$U**_

**IittaJA**

**investment» in Venture capital in Europe and the United States** **(1995)**

**U8A(1)** **UE{2)**

**TScu** **KECU**

**Total fnvestmema** **5 748.000** _**Jo****_ **1.100** **è.546,000** **+** **2** **4.9SS**

**Invaatmanta par**
**stags**
**taad &** **start-up**
**development**
**Leveraged buy-out**

**Investments per**
**aaeter**
**Informât*-tachno.**
**life** **sdenoee**
**non-technology**
**avg alia** **of** **aaad-**
_**SSÉSL**_

```
S.7

42

62

```

**16**

```
939

```

```
1.475.000

3.307.000

 •32.000

```

```
20

S8

10

```

**46**

**24**

**30**

```
445 320.000

    2.300.000

    2.900.000

```

**2.041.000**
**1.398.000**
**1.709.000**

**902.000**
**422.000**

**4.222.000**

**24** **422.000** **8**
**30** **4.222.000** **70**

**932** **260**

_**(1)**_ _**Soiérc*:V9ntuf90na (American Company)**_
_**(2IËVCA**_

**• 60% increase** **In** **the number of invaatmanta** **(1984-1996** **period)**

**•** **•** **1100** **Invaatmanta in the United Statas** **in** **1996.**

**IlWf-lft**

**laxaaindaotial contributions In Europfl** **aa** **a** **pafoantage of** **flPP** **(1893)**

**Country**

**Germany**

**Austria**

**Belgium**

**Denmark**

**Spain**
**Finland**

**Pranee**

**Ireland**

**Italy**
**Luxembourg**

**Norway**

**Natharianda**

**Portugal**
**Unfted** **Kingdom**
**Sweden**

**Taxes and social contributions**
**% of** **GDP**

**41.4**

**43.7**

**4 4 T**

**49.0**
**30** **[s ]**

**45.9**

**43,2**

**36.8'•**

**42.3**
**45T**

**47.6**

**47.0**

**33.0"**

**32.2**

**50.6**

**•** _**mt**_

**••** _**1992**_

_**Scurca:**_ _**Eunottat,**_ _**Taxes and social contributions f 982-1 $93**_

_**A\S**_

ISSN 0254-1475

COM(96) 589 final

### **DOCUMENTS**

EN 08 04 15 10

Catalogue number : CB-CO-96-606-EN-C

ISBN 92-78-11815-X

Office for Official Publications of the European Communities

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