CELEX: 51983PC0258
Language: en
Date: 1983-06-02
Title: PROPOSAL FOR A COUNCIL DECISION ADOPTING THE FIRST EUROPEAN STRATEGIC PROGRAMME FOR RESEARCH AND DEVELOPMENT IN INFORMATION TECHNOLOGIES ( ESPRIT )

26. 11.83                       Official Journal of the European Communities                         No C 321/1
                                                        II
                                                (Preparatory Acts)
                                           COMMISSION
             Proposal for a Council Decision adopting the first European strategic programme for
                          research and development in information technologies (Esprit)
                                               COM(83) 258 final
                           (Submitted by the Commission to the Council on 25 May 1983)
THE COUNCIL OF THE EUROPEAN                                industries, based on the new electronic technologies,
COMMUNITIES,                                               offered a major source of economic growth and
                                                           social development;
Having regard to the Treaty establishing the Euro-
pean Economic Community, and in particular                 Whereas the Commission has proposed to the
Article 235 thereof,                                       Council in its communication COM(82) 865 a strat-
                                                           egy in the domain of science and technology and a
Having regard to the proposal from the Commis-             framework programme for the period 1984 to 1987;
sion,
                                                           Whereas the proposed framework programme calls
Having regard to the opinion of the European Par-          for an action programme of research and develop-
liament,                                                   ment in information technology;
Having regard to the opinion of the Economic and           Whereas the Council has adopted, by Decision 82/
Social Committee,                                          878/EEC (2), a series of pilot projects in the field of
                                                           information technology;
Whereas the Community has as its task, by estab-
lishing a common market and progressively approx-
                                                           Whereas the response of industry, universities and
imating the economic policies of Member States, to
                                                           research institutions to the pilot projects phase has
provide throughout the Community a harmonious              been of very high quality and shows a high degree
development of economic activity and closer rela-          of interest and it would be necessary to provide ade-
tions between the States belonging to it;                  quate resources to assure continuity to the actions
                                                           about to be launched, and to proceed to the imple-
Whereas the Council adopted a resolution on a              mentation of a full-scale action programme;
Community policy on data processing (') on 15 July
 1974;
                                                           Whereas a full-scale programme of research and
                                                           development in information technology should have
 Whereas the Heads of State and of Government,             the broad goals indicated in the Annex hereto, but
 meeting in Strasbourg on 21 and 22 June 1979,             be capable of revision at various levels of detail to
 declared that the dynamic complex of information          reflect changing industrial priorities;
(')  OJNoC86,20. 7. 1974, p. 1.                             (2) OJ No L 369, 29. 12. 1982, p. 37.
 ---pagebreak--- No C 321/2                          Official Journal of the European Communities                             26. 11. 83
Whereas adequate dissemination of, and access to,                                      Article 3
results of projects of Community interest is essen-
tial to the pursuit of the aims of the Community;              The Commission shall see that the programme is
                                                               properly performed. In particular, it shall decide
                                                               upon implementing procedures for the programme,
 Whereas it is necessary for the execution of the pro-         on the definition of the detailed objectives and on
 gramme that the Commission be assisted by a                   the type of projects to be undertaken. It shall estab-
 Management and Consultative Committee;                        lish each year and update as required a working pro-
                                                               gramme.
 Whereas the importance of the action may require
 an extension of the programme adopted by this
 Decision;                                                                             Article 4
                                                              The Commission shall be assisted in the ac-
 Whereas the Treaty does not provide the necessary            complishment of the tasks referred to in Article 3 by
 powers,                                                      the Management and Consultative Committee in
                                                              the field of information technologies, created by
                                                              Council Decision . . . (')•
 HAS DECIDED AS FOLLOWS:
                                                                                       Article 5
                         Article 1
                                                               With regard to coordination activities, the Member
 1. A programme of research and development for
                                                               States and the Community shall exchange all appro-
the European Economic Community in the field of
                                                               priate information to which they have access and
information technologies, as defined in Section A of
                                                               which they are free to disclose concerning R & D
the Annex, hereinafter referred to as 'the pro-
                                                               activities in the domains covered by this Decision,
gramme', is hereby adopted for a period of five
                                                               whether or not planned or carried out under their
years, as from 1 January 1984.
                                                               authority.
2. The programme shall comprise projects carried               Information shall be exchanged in accordance with
out by means of contracts, to be concluded with                a procedure to be defined by the Commission after
undertakings, including small and medium-sized                 consulting the Committee referred to in Article 4,
enterprises, universities and other bodies established         and shall be treated as confidential whenever
in the Community, and the coordination of research             requested by the supplier.
and development activities carried out under the
programmes of the Member States and of the Com-
munity.
                                                                                       Article 6
3. In principle, the contractors will be expected to
bear a substantial proportion of the costs which will           1. The programme shall be reviewed after 30
normally be shared 50% by the contractors and                  months. The Council and the European Parliament
 50 % by the Community.                                        shall be informed of the results of this review.
                                                               2. The programme may be extended for a second
                         Article 2                             period of five years, following a proposal by the
                                                               Commission to be transmitted to the Council in
 The Community shall contribute to the performance             conformity with the appropriate procedures.
 of the programme within the limits of the appropri-
 ations entered to this end in the budget of the                3. At the end of each five-year period of the pro-
 European Communities.                                         gramme, the Commission, after consulting the Com-
                                                                mittee referred to in Article 4, shall send the
                                                                Member States and the European Parliament a report
 The overall amount of the appropriations represen-             on the performance and results of the programme.
 ting the Community's contribution to the perform-
 ance of the programme is estimated at 750 million
 ECU, including the staff required estimated at 83 A
 staff, 17 B staff and 50 C staff as indicated in Sec-          (') See draft Council Decision COM(83) 143 (OJ No
 tion B of the Annex.                                               C 113,27.4. 1983, p. 4.).
 ---pagebreak--- 26. 11.83                         Official Journal of the European Communities                                No C 321/3
                                                         ANNEX
                                                      SECTION A
                                                 AREAS OF ACTIVITY
          The programme contains areas of R & D activity and infrastructure actions.
          The areas of R & D activities are:
          1.  Advanced microelectronics capability
              The main objective is to provide the technological capability to design, manufacture and test
              very high-speed and very large-scale integrated circuits (ICs), that will be needed in the next
              two decades.
              A concurrent objective is to stimulate R & D on novel materials and devices for special
              applications. The activities to be pursued include:
              — computer-aided design, manufacture and test for very large-scale integrated circuits
                    (VLSIC),
              — silicon IC process steps to 1-micron feature size,
              — integration of process steps, leading towards computer-controlled VLSIC fabrication,
              — process steps for submicron feature sizes in silicon and other semiconductor materials,
              — techniques for interfacing ICs to their environment,
              — research into optical information processing and transmission, notably integrated opto-
                    electronics, optical switching and storage,
              — novel information and image presentation display technologies,
              — novel organic and inorganic materials for electronics and optical technologies.
          2.  Software technologies
              Software technology aims at providing the sound engineering practices, the methods and
              tools that are needed in the software development process, the management principles for
              information technology as well as the scientific knowledge underlying them, and aims to
              integrate them into a consistent technology. It is founded on mathematics, economics and
              traditional engineering practices.
              A combination of three complementary research approaches will be addressed. The first
              approach stresses the scientific foundations and covers such areas as formal mathematical
              techniques, taxonomy and metrics, including empirical techniques and modelling. This
              approach to software development aims at a better scientific understanding and is predomi-
              nantly theoretical research work.
              The second approach focusses on the software production process. It considers software
              development as an industrial activity in which large groups of (professional and specialized)
              software engineers create complex software systems, supported in operation — in many ver-
              sions and variants — for large markets and over a long period of time. Work in this area
              relates to all parts of the software life cycle and addresses activities like requirements ana-
              lysis, specification, design, implementation, verification and validation, maintenance and
              enhancement; of particular importance will be the full integration of methods and tools and
              the phase-to-phase continuity. Main R & D activity in this area concentrates on methods and
              tools and on their integration into complete systems for software production. The aim is the
              mastery of the technical production process of software goods.
              The third approach is concerned with software development process as an economic activity
              in its own right. It focusses on software as a product, investigating the mutual dependencies
              between commercial goals of an enterprise and the technical characteristics and performance
 ---pagebreak--- No C 321/4                          Official Journal of the European Communities                                 26. 11. 83
               requirements of the software product. It addresses also the problem of producing applica-
               tion-specific software, and the way in which the knowledge about the application domain
               may influence the tools and methods for software development.
               The aim of this approach is to provide the techniques and criteria for organizing, managing
               and optimizing all parts of software application engineering and production process. This
               entails R& D in:
               — theories and methods for program development,
               — methods and tools in software engineering,
               — economic and industrial software production.
           3.   Advanced information processing (AIP)
               The objective is to set the basis of industrial exploitation of the transition from data process-
                ing to knowledge processing systems that is the key to the next computer generation. Impor-
               tant objectives on this road include the provision of more user-friendly interfaces to non-
                expert users, and the exploitation of VLSIC for a major increase in information processing
                power.
                The main thrust of R & D will be in the following topics:
                — information and knowledge engineering, including expert systems,
                — pattern-recognition techniques and their application to interfaces with the environment,
                      particularly intercommunication between human and machine,
                — information and knowledge storage, including novel hardware technologies and ad-
                      vanced software techniques,
                — computer architecture, particularly for parallel processing, leading to novel processing
                      machines of advanced capability,
                — design objectives and methods, of embedding trustworthy AIP concepts into VLSIC.
           4.    Office systems
                 The objective is to carry out systems research on the information systems that will support
                 the wide range of non-routine tasks performed by humans in the office environment. The
                 activities to be pursued include:
                 — office system science, as prerequisite and support to the structural and functional analy-
                      sis and description of office procedures, definition of standards and the design of
                      adapted office products and systems.
                 — office work-stations, document description languages, document creation and distribu-
                      tion man/machine interfaces,
                 — office communication systems including local area networks and their interconnection,
                       integrated interactive text-voice-image-video communication and value-added func-
                      tions,
                  — office filing and retrieval systems with emphasis on ease of access to and retrieval of
                       'Knowledge', content- and structure-addressable data bases, office document languages,
                  — human factors, encompassing all aspects of the interactions between man and infor-
                       mation-handling systems.
            5.    Computer integrated manufacture (CIM)
                  The objective is to establish the technology base for progressive introduction of computer
                  aids in all phases of the manufacturing process leading ultimately to integrated
                  manufacturing.
 ---pagebreak--- 26. 11. 83                            Official Journal of the European Communities                            No C 321/5
                The main emphasis is placed on manufacturing elements as they are needed for discrete
                batch manufacturing, as this is technologically the most demanding problem.
                The main thrust of the R & D will concentrate on:
                — integrated system architecture for CIM systems, including data base management sys-
                     tems and incorporation of AIP (advanced information processing) concepts,
                — computer-aided design and engineering (CAD and CAE) systems of modular structure,
                — modular computer-aided manufacture, test and repair systems and their integration with
                      CAD, CAE,
                — software and operating systems, including command languages for generation of con-
                     trol programs (starting from design, production or test simulation data) for automated
                     assembly, for robot operations, or for computer numerically controlled machine-tools,
                — imaging and control systems for the real-time capture and processing of 3D images and
                      for generating appropriate responses, incorporating AIP techniques,
                — VLSIC design and fabrication for CIM subsystems, sensors, etc.,
                — demonstration models of CIM subsystems leading to complete CIM demonstrators for
                     experiments in real life situations.
           6.   Infrastructure actions
                The infrastructure actions consist of a number of specific measures aimed at establishing the
                conditions required for successful execution of cooperative R & D on a Community level
                and for drawing the maximum benefit from Esprit as a whole.
                These infrastructure activities include in particular:
                — coordination of Community and Member States' research and development pro-
                     grammes, acquisition of information, both within Esprit and from the world at large,
                     and its appropriate dissemination,
                — coordination and documentation of standards within Esprit and their relationship with
                     national and international standards,
                — an information exchange system (IES) to ensure ease of communication to serve the
                     good technical execution of R & D projects as well as their management and the appro-
                     priate dissemination of their results. Progressive implementation and upgrading would
                     have to enable direct computer communication and distributed software development.
                                                         SECTION B
                                                        PERSONNEL
                                  1984 — Temporary posts        Complement 1985 — Temporary posts
                                                                                                    General
              Category                                                                               total
                           Scientific   Administra-              Scientific Administra-  Total
                                          tive staff  Total        staff     tive staff
                             staff
                 A            47               4         51         32          —         32          83
                 B              4              5          9           2           6        8           17
                 C            —               31         31         —            19       19          50
 ---pagebreak--- N o C 321/6                          Official Journal of the European Communities                                   26. 11.83
                                                            APPENDIX
                                                           SECTION I
                                                        BACKGROUND
            PURPOSE OF PRESENT               COMMUNICATION
            1.    In 1982 three communications were sent to the Council (') which:
                  (a) analyzed the importance of information technology (IT) and introduced Esprit;
                  (b) outlined the concept of a pilot phase for Esprit and provided the main lines of an
                        overall programme; and
                  (c) provided a basis for a Decision on pilot projects.
            2.    The Ministers of Research, meeting in June 1982, welcomed the concept of Esprit and, at
                  their meeting in November 1982, approved the principle of a pilot phase. A Decision was
                  adopted by the Council on 21 December 1982 to fund the pilot phase to a level of 11,5
                  million ECU, representing 50 % of the first-year costs (2).
            3.    The level and quality of the response to the call for proposals for pilot phase, and the sup-
                  port received from industry, are clear indication that the definition and implementation of
                  a full-scale programme is now required.
            4.    The purpose of the present document is to provide the basis for a Council Decision for
                  such an overall programme in which the pilot projects will be incorporated.
            ROLE AND IMPORTANCE OF IT FOR THE COMMUNITY
            5.     Europe's rise to historical and world importance has throughout been closely associated
                   with its scientific and technological achievements. Although not without problems, tech-
                   nological advance represents an essential ingredient of further development of human
                   societies; future progress will largely depend on the timely acquisition of new technologies
                   and their appropriate and skilful use.
            6.     The new technologies of information (IT) will be one of the dominant sources of techno-
                   logical advance for the rest of the century. They offer an answer to many pressing problems
                   of today and the chance of industrial renaissance in Europe by qualitative growth creating
                   new products, processes and services and thereby new export opportunities and employ-
                   ment.
             7.    For Europe's high value-added economies IT is of vital importance, and indigenous capa-
                   bilities will have to be acquired in key areas in order to be capable to compete, and also to
                   cooperate, with the USA and Japan on equal terms.
             8.     European industry, however, is no longer leading technological development and innova-
                   tion as it once did, and world conditions make it increasingly difficult to maintain
             (') COM(82) 287: towards a European strategic programme for research and development in information
                 technologies;                                                                      . . . .
                 COM(82) 486: laying the foundations for a European strategic programme of research and development
                 in information technology: the pilot phase;
                 COM(82) 737: proposal for a Council Decision on a preparatory phase for a Community research and
                 development programme in the field of information technologies.
             (2) OJ No L 369, 29. 12. 1982, p. 37.
 ---pagebreak--- 26. 11. 83                         Official Journal of the European Communities                              No C 321/7
                economic and industrial strength in the face of the rising cost of energy and raw
                materials together with mounting international competition.
           9.   Given Europe's dependence on imports, the strength of its industry in providing export
                goods, and all related factors are therefore central policy issues.
           10.  Information technology is highly R & D intensive and technology becomes quickly obso-
                lete. This means that R & D investment is so high that a selective approach is inevitable.
           11.  The realization of economic growth and of the potential benefits of IT have important
                Community dimensions. This applies specifically to a more efficient use of scarce technol-
                ogy assets and resources for medium to long-term R & D in IT.
           12.  Although the Community's efforts in this field are considerable, they need to be signifi-
                cantly increased in key areas as well as made more effective.
           13.  The mobilization of Community technology potential in this field will depend on the col-
                lective commitment of governments, industry, research institutes, universities, trade unions
                and the general public towards the goal of providing industry with the technological assets
                needed for long-term viability arid strength.
           IT AS A FACTOR OF ECONOMIC CHANGE
           14.  Information technology is perhaps the fastest developing area of industrial and business
                activity in the Western world. Its markets are large, its applications varied and pervasive,
                and its potential for increasing efficiency immense. IT will be the driving force of econo-
                mic growth for at least the rest of the century, and is therefore a major factor in economic
                affairs.
           15.  Information technology is an appropriate industry for Europe's comparatively high-
                labour-cost economy. It can contribute to improved operational performance and lower
                costs in several other industries.
                 Information technology has high value-added and a large export potential. Furthermore it
                 is knowledge-intensive, consumes little energy, has limited raw material requirements, and
                 poses no known environmental problems.
            16.   IT is already a major industry in its own right, comparable in size ($ 237 billion annual
                 sales worldwide in 1980) and value added to the automobile and steel industries.
                  However, it differs from these mature industries by offering broadly based opportunities
                  for growth. Its overall growth rate — including more mature products such as telegraphic
                  and non-digital telephone equipment — is expected to be 8 to 10 % per year in real terms.
                 The size of the Community IT market is about 30 % of the world market, although the per-
                 formance of Community-based IT companies is disappointing and their presence in lead-
                 ing markets negligible.
            17.   Some 6 % of the Community's gross domestic product (GDP) is produced by the IT core-
                  industries, i.e.
                  — computers including peripherals,
                  — computers services including software,
                  — components;
                  and by a further 29 % the industries which apply IT in a major way including:
 ---pagebreak--- No C 321/8                          Official Journal of the European Communities                                       26. 11.83
                  — telecommunications,
                  — office automation,
                  — factory automation,
                  — consumer products,
                  — defence applications,
                  — financial and insurance services.
           18.    Another 20 % of GDP is derived from other industrial sectors with a high information con-
                  tent such as services and retailing, and those which increasingly use computer aids in
                  design, manufacturing, quality control, distribution and maintenance, such as automobiles
                  and textiles.
           19.    The remainder of the economy is also significantly affected in its performance by IT
                  although not so directly. For example, even agriculture can greatly benefit from satellite
                  observation followed by computer analysis of the data to optimize crop production. Con-
                  sidering the size of the agricultural sector, even a small effect is of great economic
                  importance.
           20.    Telecommunications; office automation and factory automation play a particularly impor-
                  tant role since these IT applications provide a crucial infrastructure for the whole economy.
           21.    As a manufacturing sector the IT industry has been one of the fastest growing industries
                  world-wide in the last decade, a decade which has seen general recession otherwise.
                  Growth is expected to continue at about 8 to 10 % overall until 1990 by which date, with a
                  total turnover of some $ 500 billion (at 1980 prices), IT will then be the world's largest
                  manufacturing sector.
           22.     Information occupations (') are becoming the single most important part of employment.
                  The US Bureau of Statistics estimated that in 1980 nearly 50 % of the employed civil work-
                  force were in 'Information', which included not only manufacturing but all occupations
                  concerned with information. European figures are similar. IT manufacturing alone
                  employs 5 % of the total Community work force, i.e. about five million persons.
           23.     Four million jobs may depend on IT-related performance in the Community.
                   If the market in the Community for IT products had developed at the same rate as that in
                   the USA and Japan, supplying this additional demand could have provided perhaps
                   2 000 000 more jobs.
                   A similar number of jobs are at risk in the future if Community industry does not improve
                   its competitiveness by applying IT as effectively as is being done by its competitors world-
                   wide.
           IT AS A FACTOR OF SOCIAL AND CULTURAL CHANGE
           24.     Information technology is inextricably associated with social and cultural progress.
                   5 000 years ago the first major innovation in IT was made, by recording information by
                   means of symbols. Since then, the transition to alphabetic writing, printing and recently
                   computer editing are major milestones.
            (') This includes activities like TV broadcasting and the press that, although not encompassed by the term
                'information technology', are heavily dependent on it.
 ---pagebreak--- 26. 11. 83                        Official Journal of the European Communities                                No C 321/9
           25.  Information technology has so far been mostly concerned with the perfection of compara-
                tively simple high-speed information processing, for example, calculations and printing.
                However, even simple cognitive processes such as recognizing a voice are still very difficult
                with present techniques.
           26.  With the forseeable advances in \T, fairly advanced forms of machine intelligence are, for
                example, no longer out of reach and it is quite evident that this will introduce as important
                socio-cultural and political changes as have other major innovations of this century.
           27.  The opportunities for social and cultural evolution are enormous as IT removes social and
                educational barriers which have their origin in access to information and knowledge.
                Evidently this entails, as does any new product, risks which need to be carefully considered
                and may require cautious evaluation and choice.
           28.  The evolution of IT is happening throughout the world and offers opportunities to all
                societies to maintain and develop their cultural identity. Developing countries can, with
                the help of direct satellite broadcasting, educate and inform their population.
                Community Member States will find it easier to use each others' languages as well as their
                own as machine translation advances. Education and training will be made more efficient
                and cheaper.
           29.  Success in the long term will be determined by the skill of nations and regions in grasping
                the opportunities whilst controlling the risks.
                 For this to be achieved, speeding up the advance of IT is necessary but not sufficient. Edu-
                cation and training, the questions of the changing nature of work, privacy and cross-border
                data exchange and many other important issues need to be considered. The Commission
                services have already addressed several of these issues, proposed actions and implemented
                 measures.
           SITUATION OF THE COMMUNITY IT INDUSTRY
           30.  The Community is becoming rapidly more dependent on IT imports. In 1975 it still had a
                trade surplus in IT products. By 1980 the trade deficit had reached $ 5 billion and, accord-
                ing to certain sources, the $ 10 billion mark was passed in 1982.
           31.   The problem of the trade deficit is compounded by the fact that Community imports are
                 primarily high-technology products — such as central processing units and computer
                 memories — from the United States and Japan, while its exports are the more mature,
                 lower technology products.
           32.   The Community IT market is lagging behind the US and Japanese markets by several
                 years. This is shown by the per capita sales of IT products in the Community being only
                 60% that of the USA.
           33.   The Community IT industry is relying increasingly on importing technology or on licensed
                 manufacturing, distribution and maintenance for its profits. This is reflected in an impor-
                 tant product and technology lag.
            34.  Because the rate of introduction of new generations of technology has been so rapid, and
                 each generation has made such improvements in productivity, it has been estimated that
                 the average life of high technology IT products is only three years. Products such as micro-
                 processors and other key components, products and services throughout the economy are
                 simply not competitive on the international market unless they incorporate the latest ad-
                 vances.
            35.   At the same time, the threshold investment in R & D for enabling technologies continues to
                  increase demanding larger and larger markets for an economically viable return on invest-
 ---pagebreak--- No C 321/10                       Official Journal of the European Communities                                 26. 11.83
                ment. Digital exchanges have required R & D investment of about $ 1 billion. To amortize
               this investment, $ 14 billion in sales are necessary, which exceeds the size of any one mar-
                ket of a Member State as projected for the next decade, a market for which there are many
                competitors.
           36.  Similar constraints apply in varying degree to many IT sectors, and in particular to the ena-
                bling technologies required to develop leading edge products and services.
           REMEDIES
          37.   European companies, in some cases stimulated by government action, have already taken
                up the challenge posed by the subject and the increasing strength shown by US and
                Japanese firms. There is evidence that the level and scale of resources committed in Com-
                munity countries to R & D are too small to be effective and often not adequately focussed
                towards internationally competitive innovation.
          38.  In particular, long lead-time R & D subjects are neglected in favour of short-term R & D .
               Short-term R & D serves well for catching up but is not able to establish a leading position
               in specific sectors.
          39.  The present way of managing technology assets and resources in the Community does not
               seem to be sustaining indigenous industry in this field and, what is even more worrying,
               may not perform the vital role of developing the technology base for the innovations of the
                1980s and 1990s when the competition between industrialized regions for export opportun-
               ities to pay for energy and raw material is likely to be fierce.
          40.  The centre piece of mid- to long-term strengthening of the Community IT industry is
               research and development. In this area the Community has resources which are adequate
               to compete with the USA and Japan, but the way these are at present managed makes them
               not effective enough. Strategic long-term planning and the concentration of resources
               through the definition and funding of technology goals on a Community scale has a good
               chance of redressing the situation gradually but in a lasting manner.
          41.   The Commission shares the views of industry that present efforts in R & D must be made
                more effective and at the same time significantly increased over a prolonged period.
           42.   The current rate of decline is fast and is accelerating. There is, therefore, a need to begin
                 taking effective action as soon as possible.
          43.   Extensive concertation with the leading IT companies, small- and medium-sized enter-
                prises (SME's), academia and Member States' administrations has resulted in the defini-
                tion of the long lead-time R & D programme called Esprit: the European strategic pro-
                gramme for research and development in information technologies.
          44.  The main drive for Esprit has come from industry. In order to reverse the trend of increas-
                ing reliance on importing technology, a joint programme of R & D has been proposed by
                industry whose goals are to:
               — reduce duplication of pre-competitive R & D ,
               — ensure that research teams achieve critical size and sufficient stability over time to be
                     able to focus on key areas and achieve results,
               — reduce the timelag effect caused by reliance on imported technology.
 ---pagebreak--- 26. 11. 83                         Official Journal of the European Communities                                       No C 321 /11
           45.   Industry has made clear its willingness to put up half of the necessary funds, and even
                 more important, to share its most precious technical manpower resources — this is particu-
                 larly true for those companies who have major facilities and will participate in an inte-
                 grated way in large-scale strategic projects.
           46.   The reasons for industry to approach the Community for the remainder of the funds, and
                 the interest for the Community in providing them, is that:
                 (1) by working together on the enabling technologies, the foundations for common stan-
                        dards and the creation of a Community IT market can be achieved. Progress on this
                        can only take place on the broad front which the Community offers;
                 (2) there is a need to avoid wasteful duplication of national efforts (')•
           47.  The natural starting point for Community industry to begin to redress the balance is with
                improving the technology base for the late 1980s and 1990s by pre-competitive generic
                 R&D.
           48.   The reasons for choosing an R& D programme are:
                 (1) it can be started immediately;
                 (2) new technology is vital for competitiveness;
                 (3) industry can collaborate on pre-competitive research without impeding its ability to
                        compete for markets.
           49.   Esprit will have the appropriate scale and thrust to make a major impact on the availability
                 of advanced know-how in information technologies. It will reinforce the efforts of industry
                 and academia on a selective basis in relation to strategic technology where the Community
                 approach offers important advantages. This will provide technology push.
                 Research and development is, however, not the only aspect which offers important advan-
                 tages of Community scale. Education and training, technology transfer, standards and cer-
                 tification, creation of leading-edge markets, improvement of the business environment for
                 small and medium-sized companies and other aspects, offers opportunities for a selective
                 Community approach to improve the market environment (2).
                  In addition to these infrastructure measures, there are solid economic arguments which
                 indicate that a Community approach should be urgently applied to several IT sectors. This
                 is true in particular of telecommunications, but also of other sectors which have a major IT
                 component.
           50.   Section II of this document will explain the content and thrust of Esprit in the light of its
                 contribution to industrial performance.
           (') For example, several Member States are working in 'the office of the future' without profiting from each
               other. Any products resulting might be optimized for a national market but are unlikely to benefit from
               the size of the Community markets. Given that such a project is concerned with clarification of proce-
               dures and concepts, and identifying standards for interfaces and communications, the Community
               dimension enhances the chances of other countries adopting European standards.
           (2) The Community has already launched several actions in IT which address specific aspects complemen-
               tary to Esprit.                                                                               .
               — pluriannual programme for data processing, including measures to facilitate the introduction of IT,
               — Insis/Caddia, fostering the introduction of IT in Community institutions and Member State admin-
                      istrations,
               — microelectronics programme, supporting the advance in specific design and IT manufacturing
                     techniques.
 ---pagebreak--- No C 321/12                     Official Journal of the European Communities                                 26. 11. 83
                                                     SECTION II
                      ESPRIT SPECIFIC OBJECTIVES AND SECTORS OF ACTIVITY
           FUNDAMENTAL TECHNOLOGICAL DOMAINS: THE NEED FOR SELECTIVITY
           1.     The overall strategic goal of the Esprit programme is to provide the European IT
                  industry with the technology base which it needs to become and stay competitive with
                  the US and Japan within the next decade.
           2.     Because of the rapid growth in the demand for information and communication in all
                  walks of life, IT is crucial to the entire economic tissue. Very soon close to 70 % of the
                  economy will be affected, in one way or another by computers or other IT products.
           3.     Over the last two or three decades technology has enormously developed the potential
                  to provide improved forms of communication. This technological push is still with us
                  and is still full of vigour.
                  One can identify in this process a number of broad trends, amongst which are:
                  — a continuing decrease in the size, power consumption and cost of electronic
                        equipment, coupled with an enormous increase in its functional power and relia-
                        bility,
                  — increasing physical distribution of information processing functions, allowing
                        remote access and cooperative operation through wideband communication links,
                  — the build-up of information data bases in electronic form, available to a wider
                        and wider audience in industry, service and home,
                  — increasing levels of interaction between man and machine across the input/out-
                        put interface.
           4.      Extrapolating these trends, the 1990s will see previously separate information systems
                  and services merging with each other through wide area and local networks. Public
                  networks (such as Integrated Service Digital Network (ISDN)), will distribute data
                   over wideband links, including satellites, and reach into the home, the office and the
                   factory via digital subscriber links. Local area networks will connect into wide area
                   networks through gateways.
            5.     People will interface with these networks through terminals or workstations, gaining
                •   access to an enormous range of services for business, education, entertainment and
                   person-to-person communication.
            6.      During the 1990s and beyond, all information systems will exhibit more and more
                   characteristics of machine intelligence. This will be apparent in the adaptable be-
                    haviour of machines — in the ability to handle knowledge rather than data; to under-
                    stand speech; to accept printed or written texts and graphics; above all, to be much
                    more responsive and helpful to the humans who wish to use the information systems.
                    Machines built for purposes such as transportation, industrial activities, defence and
                    medicine, will possess much more sophisticated capabilities and behaviour. They will
                    be increasingly alert to their environment and able to adapt their operations according
                    to changes of circumstances.
 ---pagebreak--- 26. 11. 83                  Official Journal of the European Communities                                  No C 321/13
           7.  In short, there will be a progressively tighter interaction between man and machines at
              all levels and in all sectors of economy and society. There are two obvious implica-
              tions in these facts and trends:
              — one is that more and more people will have to learn how to use this technology,
              — the other is that the products of the technology will have to become easier and
                    easier to use, and better integrated into the entire pattern of our daily lives both at
                    work and at home.
              The first implication has far-reaching consequences for education and training, but is
              outside the scope of the present communication. The second one provides the clue to
              the challenges that the technology must master in the next 10 years.
           8. Let us analyze this in more detail.
              Moving closer to the user implies that the level of the 'man/machine interface' must
              be raised. Computers and other IT systems capable of communicating with the user in
              a variety of more 'natural' ways than presently possible must include the capability of
              understanding natural language, speech and handwritten material, although probably
              still with some limitations. Communication will become more interactive, where the
              user will explore with the system the various ways in which it can help him do his job,
              perform his task, solve his problem or provide him with the relevant information he
              needs. The pattern of man-machine communication will increasingly move away from
              detailed, specific commands for performing minute operations to descriptions of lar-
              ger units of work to be done, leaving the system to figure out the detailed sequence of
              instructions it needs to carry out the task. As the system becomes more 'intelligent'
              and undertakes to perform more ambitious or less specific tasks, it may, in fact, dis-
              cover ambiguities or contradictions in the desires of the user and need to carry out a
              clarifying dialogue with the user to resolve them. At the same time the system will
              need to understand more about what it is doing in order to explain to the user why it
              arrived at a certain result, and how to proceed further in case the result is not satisfac-
              tory to the user.
           9. There are three other important requirements. One is that users must be able to access
              conveniently all of the relevant sources of information which they need to solve the
              particular problem at hand, at the time they need it, and regardless of where it is physi-
              cally located. This by no means implies centralized processing or centralized data
              bases. On the contrary it establishes the requirement for interconnected local and wide
              area networks and all possible forms of distributed processing. It should be emphas-
              ized that, in order for this interconnection of all IT services to be at all possible, it is
              mandatory that standards be established for their interfaces. A second requirement is
              system reliability. As everybody becomes dependent on them to carry out more and
              more tasks, these systems must increase their reliability in a major way. System mal-
              functions should not cause an entire factory or economic unit to stop operations. The
              difficulty is compounded by the fact that more people will be using these systems, and
              that these people will be less and less sophisticated professionals, therefore more likely
              to misuse the systems or to try to use them in ways which were not foreseen by the
              systems designer. At the same time making the system easier to use also makes it more
              complex internally, thereby again increasing the likelihood of hardware or software
              errors or malfunctions. Furthermore, the need for systems to interface with a larger
              number of systems and facilities again increases their internal complexity, with the
              same effect on reliability.
              A third requirement is improved security. As more information becomes available
              to more people, and as the number of interconnections grows dramatically, protection
              of that information must be considerably strengthened.
 ---pagebreak--- No C 321 / 1 4                          Official Journal of the European Communities                                           26. 11. 83
                         Each of the key factors discussed above (higher level of interfaces, more intelligent
                         processing, interactivity, interconnection, reliability and security) presents major tech-
                         nological challenges to overcome (').
                         Taken together they represent a formidable challenge which Esprit plans to attack.
                         All of the above factors require considerable progress in sophisticated software sys-
                         tems. This increased software complexity, coupled with the interactivity and reliability
                         requirements, in turn implies considerable increase in processing power. This can only
                         be achieved through major advances in components (microelectronics) and systems
                         architecture (the combination of hardware and software into systems).
                         This is why Esprit places particular emphasis on these areas. In addition, the two areas
                         where IT will have the greatest impact on economic life — the office and the factory
                         — have been selected as the two basic application areas and technology test-beds on
                         which to concentrate.
                         These heavily interrelated (2) areas are considered in more detail below.
             12.         The three of them address the key technologies that are at the very core of IT and pro-
                         vide the capability to address any IT system requirements:
                         — Advanced microelectronics is the technology which provides the physical struc-
                               ture for any information system. It implies a capability to design, manufacture
                               and test VLSIC devices in silicon and other semi-conductor materials. It also
                               embraces research into optoelectronics, optical digital processing systems and dis-
                               play systems.
                         — Software technology addresses the medium that controls the behaviour of any IT
                               system and aims to integrate into a consistent technology the scientific under-
                               standing, sound engineering practices, methods, tools and management tech-
                               niques that are needed for its development, production and maintenance.
                         — Advanced information processing refers to the architectural combination of hard-
                               ware and software required to bring about the qualitative leap forward from
                               today's data processing to the knowledge processing concept that is the key to the
                               next computer generation. It will provide inter alia the basis for the development
                               of systems for high speed real-time signal processing (e.g. for speech input), of
                               expert systems (3) and of knowledge-based information systems generally.
             (') A concrete example will help to clarify the size of such challenges: let us take a high level interface capa-
                 ble of understanding and synthetizing human voice.
                 A practical implementation of such a machine would have to rely on efforts cutting across a wide spec-
                 trum of scientific disciplines such as mathematics, computer science, semiconductor technology, theory of
                 information and linguistics. It would require the development and verification of special algorithms for
                 pattern recognition, a suitably tailored process architecture capable of high speed, high accuracy analog-
                 to-digital and digital-to-analog converters, and ultra high speed computing power.
                 If we imagine addressing the problem of real time recognition (0,5 second maximum response time) of
                 just a limited vocabulary of words through the development of a special integrated circuit, the minimum
                 circuit performance requirement to achieve this would be gate delays of not more than 100 pico-second
                 and a density of some 50 000 components per chip. If we address the problem of continuous speech
                 recognition in terms of a typical data processing measuring unit, this would require a processing power
                 equivalent to 1 000 million instructions per second (MIPS).
                 To manufacture a chip with the above characteristics we would need to master 1-micron minimum feature
                 bipolar process in production, as compared with 2 to 3 micron of today. This would in turn require a full
                 spectrum of technological improvements (shallower emitter base structures, thin (0,5-micron) epitaxy
                 techniques, purer materials, etc.).
                 To obtain data processing speeds of the order required for continous speech recognition, starting from the
                 30/50 MIPS that can be achieved today, not only such circuit density and speed improvements as men-
                 tioned above will have to be reached, but a completely new approach to computer architecture is
                 required.
             (2) For the purpose of presentation and discussion it appears more practical to group the various activities
                 identified into reasonably homogeneous sectors. It has to be stressed, however, that this division is inci-
                 dental and not intrinsic to the nature of the work. It would be wrong, if not disastrous, for the whole
                 programme, to try and treat them as separate domains.
                 Figure 1 at the end of this Section II graphically illustrates the interrelationship between R & D domains
                 and the main application areas in IT.
             (3) These are systems containing a data base and associated software that enable a user to conduct an appar-
                 ently intelligent dialogue with them in a user-oriented language.
 ---pagebreak--- 26. 11.83                       Official Journal of the European Communities                               No C 321/15
                   This sub-programme is central to the long-term theme of machine intelligence,
                   perhaps the most potent concept underlying information systems of the future.
                  The mastery of these three technologies is the key to any application, and is a major
                  factor in the competitiviness of the IT industry.
                  The two additional areas proposed are selected because of their growth potential and
                  impact on other large industry sectors and on the width of the technology spectrum
                  underpinning their development.
                  — Office systems are a significant and fast-growing IT application area in them-
                       selves, and have a major strategic importance for the efficiency of business and
                       commerce throughout the Community; they require advances across the widest
                       spectrum of technologies and represent, therefore, the best test-bed for the out-
                       come of R & D in the three key technological areas above. Furthermore, develop-
                       ments in office systems will have a direct read-across to the whole service sector
                       and to the field of home automation.
                  — Computer-integrated manufacturing (CIM) has major strategic importance for the
                       whole of the hard-pressed manufacturing sector in the Community, in particular
                       the small batch manufacturers of discrete parts (70 % of goods manufactured in
                       the Community are small series).
                       CIM involves the complete integration of the manufacturing process through
                       computers, sensors and automatic control systems at all levels and at all stages.
                       As such, it is an excellent test-bed for R & D into man/machine and machine/
                       machine intercommunication.
          ESPRIT SPECIFIC ACTIONS
          14.     To ensure the acquisition by the European IT industry of a technological capability
                  adequate for the goals pursued, a major R & D effort is needed at the same time in all
                  sectors indicated; this will require a pooling of all available resources throughout the
                  Community.
          15.     Industry must be the main actor and driving force of this exercise but it will have to be
                  capable of relying, on the one hand, on the contributions of academia and, on the
                  other hand, on the active participation of future users and the support of the public
                  authorities at national as well as at Community level.
          16.     National programmes have played an important role in support of R & D in IT and
                  related technological domains, but they also create some undesirable side-effects of
                  market fragmentation and dispersion of resources.
          17.     The first pole of action that Esprit proposes is to enhance their effectiveness and
                  reduce these negative effects through a systematic consultation of all parties inter-
                  ested, during the planning and the execution of such programmes, aimed at achieving
                  selectivity of attack and improved overall efficiency.
          18.     Effective coordination, however, cannot take place in a vacuum without the cohesive
                  action of a concrete objective of common interest which unites all participants and
                  focusses their attention.
          19.     Hence the second pole of action of Esprit: the pursuit through concurrent and cooper-
                  ative efforts of a number of very ambitious technological objectives that will be of
                  benefit to the whole Community and that could not be achieved in the same time scale
                  and to the same extent without a joint approach at Community level.
          20.      In order to identify and select the specific R & D domains meeting these requirements,
                   the services of the Commission have had resort to the contribution and advice of
 ---pagebreak--- No C 321/16                     Official Journal of the European Communities                                26. 11. 83
                  leading scientists and engineers from industry, university and research institutions
                  from all over the Community.
                  Some 200 such persons responded and contributed to this work over a period of
                  almost one year; the outcome of this activity, contained in several reports totalling
                  more than 1 000 pages, is briefly outlined in paragraphs 26 to 37 below. Part A of the
                  Annex to the draft Decision spells out the main boundaries and objectives of the pro-
                  posed work.
           21.     In analyzing and selecting concerted and cooperative R & D actions to be undertaken
                  by companies that are competing with each other in the marketplace, care has been
                  taken to ensure that these were sufficiently upstream of the product (i.e. of precom-
                   petitive nature) whilst not too far away from potential application to lose contact
                   with the projected needs of industry and society (i.e. of 'enabling' character).
           22.     Discussions on the content of joint cooperative research work led furthermore to the
                  analysis of the conditions that would make such work possible. It would in theory
                  have been conceivable to gather research teams in a few public or private laboratories
                  and concentrate the bulk of the research work there. In spite of the objective difficul-
                  ties in moving people from one country to another, this is expected to some extent to
                  take place spontaneously for smaller projects requiring little infrastructure.
                   It would certainly not be possible for projects involving two or more of the larger
                  Community organizations and their research infrastructures.
          23.     Technology, however, offers the possibility of overcoming the effect of geographical
                  separation, making it possible for research and development teams and individuals
                  working in collaboration with each other on the same or in related projects, but in
                  laboratories and installations in different countries, to liaise with each other and with
                  those responsible for the overall coordination and management of the programme.
          24.     Amongst the proposed actions has therefore been included the establishment of an
                  adequate infrastructure ensuring the availability of such an information exchange sys-
                  tem, to be progressively set up to serve the needs of all involved in Esprit.
           PROPOSED R&D        WORK
          25.     The process of selection outlined in the preceeding paragraphs was applied at various
                  levels down to the identification of the detailed objectives of research work within the
                  key strategic areas.
           26.     It is, however, worth recalling here, before presenting an outline of the proposed
                  research work, that the closer we get to the details of work the shorter becomes the
                  validity of the forecast. In other words, whereas there are no doubts about the strategic
                   importance for the next 10 years of the five broad areas identified and of the size of
                  the overall effort necessary to catch up with the competition, the detailed R & D objec-
                  tives have a much shorter expected validity and reliability.
                   Throughout the execution of the actual Esprit R & D work programme, a continous
                   monitoring and feedback of the results achieved both in the Community and else-
                   where in the world is necessary and this process may lead to the need for major adjust-
                   ments from time to time. This is foreseen by the management structure of the pro-
                   gramme.
           27.     In the light of the above it is possible to propose the following main research work:
 ---pagebreak--- 26. 11.83                           Official Journal of the European Communities                            No C 321/17
          27.1.      Microelectronics
          27.1.1.    The requirements for microelectronic subsystems for application in IT all demand
                     advances in current performance either in speed of operation or low power consump-
                     tion or lower cost. An important factor to meet these requirements is to increase the
                     functional density of integrated circuits in silicon, the material on which the majority
                     of integrated circuits will continue to be based for the foreseeable future.
                     Scaling down from present state of the art 3-micron-feature production processes to
                     processes based on 1-micron dimensions, with corresponding improvements in inter-
                     connection technology, will give a speed increase of 10 times, a power consumption
                     reduction of 10 times, and an improvement by a factor of 8 in packing density. The
                     packing density improvement will result in production cost reductions of the same
                     order, while the speed and power consumption will provide faster and cheaper system
                     performance.
          27.1.2.    To achieve the goals, R & D projects will be aimed at achieving the following techno-
                     logical objectives:
                     —      1 micron to 0,5 micron bipolar, MOS and mixed MOS/bipolar technologies,
                     — packaging and interconnection techniques for VLSIC capable of handling up to
                           5 watts power, with up to 250 K gates and 400 pins outs per chip unit, and of
                           transferring signals with no more than 0,1 nano-second gate delay,
                     — improved material quality,
                     — interface technology suitable for combining high voltage and/or high power with
                           high-speed data processing capability on the same physical substrate.
          27.1.3.    Progress towards the VLSIC goal depends as much on the management of design
                     complexity as on the development of silicon technology. Existing design tools are far
                     from adequate to exploit the full potential of VLSIC. The programme initiated by the
                     Commission in Council Regulation (EEC) No 3744/81 (') has made a start which
                     needs to be extended into a comprehensive computer-aided design (CAD) system
                     under Esprit.
          27.1.4.    Thus, included in this technology drive is a total initiative building on Regulation
                     (EEC) No 3744/81 in the following areas:
                     — architecture: data structure, interfaces, new methods verification,
                     — testing: test data generation, testability design factors, data verification,
                     — modelling: numerical, physical, analytical, table,
                     — simulation: device level simulation (forward/reverse), timing, functional simula-
                            tion,
                     — languages: high-level language development, high-level to low-level interface,
                            data base communication upwards and downwards,
                      — layout: includes data base standards, modular packaging, libraries, user friend-
                             liness, placement, routing, tracking.
                      CAD for complex VLSIC will require the support of very powerful computing tools;
                      the production of these tools will depend on the development of a powerful discip-
                      lined software technology.
           27.1.5.     Under the broad heading of microelectronics are also included non-strictly silicon
                       VLSIC-related technologies like optical signal processing technologies as well as
                       research on new organic and inorganic materials.
           (•)  OJ No L 376,30. 12. 1981, p. 38.
 ---pagebreak--- No C 321 /18                     Official Journal of the European Communities                                   26. 11. 83
                    One of the major requirements for the application of IT will be an adequate telecom-
                    munication infrastructure of broad band communication links capable of carrying
                    integrated data, text, graphics and images. Public networks are already being devel-
                    oped to provide the service using optical fibres as the transmission medium. Other
                    areas, such as local networks, offices and process control are about to adopt this tech-
                    nology. Research is required to achieve integrated optoelectronic circuits for modula-
                    tion/demodulation and transmission/reception, together with optical couplers and
                    switches as well as low loss fibers transmission media.
           27.1.7.  Integrated optoelectronics will require submicron geometry structure on new materials
                    such as gallium arsenide and indium phosphide and their tertiary and quaternary
                    alloys. These are of interest as well for very high speed logic circuits due to the greater
                    mobility of electrons in the material.
                    Research on such new materials will therefore be promoted.
                    Finally included in the same physical technology drive is research on integrated 'intel-
                    ligent' sensors for improved automation as well as on improved image presentation
                   technologies, for which close interaction with the activities in the areas of computer-
                   integrated manufacturing and office automation is envisaged.
           27.2.   Software technology
           27.2.1.  In information technology systems, the importance of software has been increasing
                   steadily, and its share in the overall development cost is rising continuously. Projec-
                   tions indicate that, in the next decade, costs for software may rise to 90% of the overall
                   system development cost.
                   A competitive industrial capability for software production will impinge on more than
                   just the information technology industry: a wide range of industrial products will
                   depend critically, for competitiveness on the world market, on information technol-
                   ogy, either for their development or manufacture, or because information technology
                   components embedded in them provide an increased functionality.
           27.2.2. For the development of software, just as for the development of hardware, sound engi-
                   neering practices based on scientific knowledge are required.
                                                                                                             \
                   Software technology aims to provide that knowledge, the methods and tools needed in
                   the software development process and the management principles for information
                   technology, and aims to integrate them into a consistent technology. It is founded on
                   mathematics, management science, economics and traditional engineering practices.
           27.2.3. Research on software technology in Europe lacks community of thought and unity.
                   Research teams in industry, universities and research institutes communicate to a
                   limited extent through conferences and technical publications but their programmes
                   are not coordinated or structured towards a common approach. Technology transfer
                   between research and practical applications is much slower in Europe than in Japan
                   and the US.
                   A persisting aversion to early standardization prevents an inter-working of products.
                   The future demand for software will not be satisfied in quantity and quality unless a
                   coordinated European approach is taken.
           27.2.4. Traditionally, there have been different perceptions on what the main emphasis is in
                   research in software technology and they have given rise to different individual
                   approaches.
           27.2.5. One approach stresses the scientific foundations and covers such areas as formal,
                   mathematically based techniques, taxonomy and metrics, including empirical
 ---pagebreak--- 26. 11. 83                        Official Journal of the European Communities                               No C 321 / 1 9
                    techniques, and the discipline of modelling. This view considers software develop-
                    ment as an intellectual activity. It aims at a better scientific understanding.
           27.2.6.  A second approach focusses on the technical production process and considers soft-
                    ware development as an industrial activity in which large groups of (professional and
                    specialized) software engineers create complex (to build, not use) software systems,
                    supported in operation in many versions and variants for large markets and over a
                    long time. Work in this area orientates itself by the life-cycle model of software and
                    addresses activities like requirements analysis, specification, design, implementation.
                    Important aspects are full integration of methods and tools and of phase-to-phase
                    continuity.
                    Research objects in this area are methods and tools and their integration into complete
                    systems for software production. Aim is the mastery of the technical production pro-
              »     cess.
           27.2.7.  A third view is concerned with the overall organization of the software development
                    process as a commercial and entrepreneurial activity, and focusses on software as a
                    product, investigating the mutual dependencies between commercial goals of an enter-
                    prise and the technical characteristics of the software produced.
                    This view also addresses the problem of producing application-specific software, and
                    the way that knowledge about the application domain influences tools and methods
                    for software development. Among the aims are quantifiable criteria to make choices
                     concerning organization, method and tool support for technical development, and
                    computer-assisted methods and tools for managing the software development process.
           27.2.8.   All these views are legitimate and important in their own right but substantial progress
                    towards a mature industry of software can only be made if they are applied in combi-
                     nation. They have therefore all been reflected in the definition of the three main
                    research themes chosen. These are:
                     (1) Theories and m e t h o d s for program d e v e l o p m e n t
                           Projects related to this theme will deal with the fundamentals of the development
                           of software and of systems including software. They are to yield theories and
                           methods on which the industrial development process can be based.
                     (2) M e t h o d s and tools in software e n g i n e e r i n g
                           This theme deals with industrial applications of the above, its projects aim at
                           building tools and methods for using these tools in an industrial environment.
                     (3) E c o n o m i c s of i n d u s t r i a l software p r o d u c t i o n
                           Projects related to this theme will emphasize the economic viewpoint of the prod-
                           uction of software systems by the industry. Software and systems will be consid-
                           ered as products, resulting from planning and production, and being marketed,
                           supported, etc., these activities being performed according to the rules of an
                           industrial process.
            27.3.     Advanced information processing (AIP)
            27.3.1.   Today's computers can solve instances of problems when given a solution in the form
                      of a program. These traditional systems, designed to assist man in the process of col-
                      lecting and processing data, are about to reach their limits as valuable tools and we are
                      about to experience the fundamental change from data processing to knowledge pro-
                      cessing that is the key to the next computer generation.
            27.3.2.   The level of specialized education that is required to interact with the present genera-
                      tion of machines and their relatively rudimentary interface to the outside world will
 ---pagebreak--- No C 321/20                      Official Journal of the European Communities                              26. 11. 83
                   soon become intolerable bottlenecks in the development and diffusion of information
                   technology.
          27.3.3.  To help man to overcome the problem of managing an ever-growing volume of more
                   and more interrelated information, advanced systems will be needed that will perceive
                   information directly in the form in which it is being generated, relate it to knowledge
                   previously acquired (stored) and create new knowledge using rules and inference.
                   Advanced information processing (AIP) addresses the automation of the perception
                   and processing of signals and the automation of reasoning processes with the aim of
                   combining these two functions in one single system capable of a form of 'intelligent
                   behaviour'.
          27.3.4.' There have so far been only few and only moderately successful attempts to exploit
                   'artificial intelligence' (AI) research results for practical applications.
                   However, some of the conditions for industrial exploitation of AI are now changing. Ad-
                   vances in microelectronics and new processor and system architectures make it feasi-
                   ble to employ and further improve computational techniques in artificial intelligence.
                   The point has been reached where practical research and development can be taken up
                   in both main areas: signal perception and processing and knowledge representation
                   and inference.
                   In addition, work on cognitive ergonomics will have to lead to design principles for
                   man computer systems that are geared to full support of the user in the communica-
                   tion process and do not suffer from the artificial limitations imposed by the present
                   inadequacies of the computing equipment, its architecture and software.
          27.3.5.  In recent years, experimental systems and prototypes, for instance for mathematical
                   problem solving and geometric reasoning, for learning and simple dialogues, have
                   been developed that show a considerable potential for enhancement. Europe lags
                   behind in this area.
          27.3.6.  The goal of this programme is to reach a stage at which the industrial exploitation of
                   the technology of advanced information processing is possible in the Community. For
                   this, research and development in the following main areas is necessary.
           27.3.7.  Information and knowledge engineering
                    Research and development that is required to reach a stage at which industrial prod-
                    ucts can be based on expert system technology includes:
                    — selection of forms of representations for knowledge-based systems,
                    — methods of capturing data and deriving facts from data — special hardware and
                          algorithmic structures will have to be developed,
                    — synthesis of new and efficient hardware/software architectures to support know-
                          ledge-based systems,
                    — design of knowledge base systems (KBS) in specific areas, and check on their
                          practical behaviour and utility,
                    — design and evaluation of tools for design and implementation, methods for
                          design, exploitation and evaluation of expert systems.
           27.3.8.  Signal processing and external interfaces
                    The interface of an AIP system must provide certain functions in the signal processing
                    and recognition area so that it can gather direct information. A further aim of the
                    research programme is therefore signal understanding to enable computers to
 ---pagebreak--- 26. 11.83                       Official Journal of the European Communities                               No C 321/21
                   transform sets of observed data into knowledge to be extended to include the for-
                   mulation of rules for the recognition of the world environment.
                   Research into architectures and interfaces with desirable characteristics will further-
                   more have to be based on results of studies on natural systems and applied psychol-
                   ogy. Models of cognitive behaviour of individuals and social behaviour of groups
                   must lead to design guidelines capable of practical use.
                   Research areas include:
                   — studies of human behaviour to identify desired design features and undesired
                         weaknesses in interface products,
                   — studies of alternative formal representations of knowledge about the external
                         world,
                   — algorithms and architectures for signal analysis,
                   — selection of 'candidates' for recognition with associated probabilities,
                   — role of inference in human recognition processes,
                   — extraction of the semantics of inflexion, intonation, etc. of human speech.
          27.3.9.  Information/knowledge storage and usage
                   In knowledge bases information is stored that embraces judgement of significance and
                   value, together with rules for interpretation; meta-rules may control the application of
                   rules. In pointer structured data bases or relational data bases, access methods perform
                   de-referencing of access criteria; methods for automatic de-referencing in knowledge
                   bases are not clear yet.
                   The main work will be to establish the interfaces, languages, hardware and software
                   technology which are required for the construction, distribution, functional partition-
                   ing and hierarchic (or other) structuring of data bases and knowledge bases, including
                   formulation of inference and data query accesses, at levels ranging from human visible
                   to those internal to the new generation of systems.
          27.3.10.  Computer architecture
                    The completely new economics of logic, storage cells and their interconnection
                    brought about by VLSIC make it promising to look for new processing and data hand-
                    ling models with, e.g., the following properties:
                    — few cell types with a high degree of replication,
                    — computational locality in (groups of) cells,
                    — short and regular control and data flow,
                    — minimal use of high fanout/wire or routes,
                    — highly contextual inter-cell/group/node communication,
                    — high degrees of asynchronous concurrency among cells/groups/nodes.
                    Furthermore, in order to exploit very highly parallel architectures that are made econ-
                    omically available by VLSIC, research is needed to develop algorithms that allow for
                    parallel evaluation and languages and environments and support this.
          27.3.11.  Design objectives and methods
                    Rigorous approaches to specification and design that can be turned systematically into
                    provably correct implementations, auditing of actual systems in use and high level
                    consistency checks are areas in need of work. Technology assessment of risk rules,
                    expert system validation mechanisms and methods of formal proof must also be
                    studied. As continuous operation of systems must be provided, fault tolerance and
 ---pagebreak--- No C 321/22                     Official Journal of the European Communities                                 26. 11. 83
                   online monitoring and repair techniques of systems at all security levels need to be
                   provided: computer system security has to be improved to counter penetration
                   attempts.
                   In the area of VLSIC design, circuit complexity is growing to a level very hard to mas-
                   ter. Formal design methods and tools need to be developed to allow rapid design of
                   complex chips. Only with 'silicon compilers', which incorporate substantial engineer-
                   ing knowledge and enable designers to specify their circuits at a high level of abstrac-
                   tion from the physical implementation, will it be possible to develop chips of increas-
                   ing complexity for information technology.
          27.4.    Office automation
          27.4.1.  The real long-term challenge for office technology is to support the wide range of
                   non-deterministic tasks performed by 'knowledge workers' (the vast majority of the
                   white-collar population), not just the mechanization of a narrow spectrum of structured
                  repetitive tasks like typing.
                   For the next 20 years office automation is expected to:
                  — represent the largest single potential market for information technology estimated
                        at 100 billion ECU per annum worldwide by 1990 compared with a projected
                        29 billion ECU for the manufacturing and process industry sectors together,
                  — account for most of the potential improvement to overall business efficiency
                        while the productivity of production sectors will probably experience lower
                        growth rates than in the past,
                  — bring about fundamentally new solutions in the work breakdown between man/
                        machine and man/man.
          27.4.2. The signs are that the USA and Japan can dominate this market and increasingly
                  export successfully from a homogeneous home market into Europe which is far from
                  unified.
                  This attack is supported by booming research into the advanced concepts on which
                  future system growth will depend (natural languages, decision-making support, etc.). In
                  the USA, leading companies invest individually more on this subject than European
                  industry and academia combined while the Japanese fifth generation computer system
                  programme is aimed at just such applications.
          27.4.3. To concede this potential business to non-European competitors means not only the
                  loss of major market growth for European office automation suppliers but leaves the
                  whole of European commerce and industry dependent on non-European sources in an
                  area where socio-cultural considerations are high and would be best addressed
                  domestically. It means the introduction of business practices and operational stan-
                  dards in line with foreign strategies and the loss of a major opportunity to capitalize
                  on the special and diverse characteristics of European culture to provide a more effi-
                  cient and more attractive work environment.
                  The definition of objectives for office automation and their translation into opportuni-
                  ties is highly dependent upon local cultural considerations and is made diffucult
                  because we lack a related scientific discipline. To understand the interplay of human
                  factors, technical possibilities and their educational, sociological and industrial conse-
                  quences requires skills seldom previously encountered in industrial organizations.
                  Technology alone is not sufficient. Human beings are intimately involved with the sys-
                  tems to be developed and attempts to introduce them without taking account of the
                  cultural background and the expectations of the users will result in failure.
 ---pagebreak--- 26. 11. 83                            Official Journal of the European Communities                                     No C 321/23
           27.4.4.      While research on hardware technology will still be needed to provide adequate sup-
                       port to office system concepts, it is becoming clear that architectural and software con-
                        siderations will require utmost attention from the research community before informa-
                       tion technology can be widely accepted in the office.
                        Beyond this, it is the impact of the integration of man and information technology
                        which is the most critical unknown factor in determining the rate of introduction of
                        new office equipment.
                        Interfacing man and computer networks will change the world dramatically. There-
                        fore, it would not make sense to start intensive research and development on man/
                        machine interfacing without also studying its impact on the individual (e.g. education,
                        self-respect of the human being), on the professional environment (e.g. number of
                        jobs, quality of work), and on society (e.g. impacts on the educational system and on
                        the democratic process).
           27.4.5.      With this perspective, five main research areas will have to be considered:
                       — office system science, as prerequisite and support to the structural and functional
                              analysis and description of office procedures and the design of adapted office
                             products and systems; definition of standards.
                        Three main research areas which cover the three basic office activities (creation/distri-
                        bution, transmission, and storage/retrieval of information);
                        — office work-stations; document desciption languages, document creation and dis-
                              tribution man/machine interfaces,
                        — office communication systems, including local area networks and their inter-
                              connection, integrated interactive text-voice-image-video communication and
                              value-added functions,
                        — office filing and retrieval systems with emphasis on ease of access to and retrieval
                              of 'Knowledge', content and structure addressable data bases, office document
                              languages.
                         And a fifth area:
                        — human factors, encompassing all aspects of the interactions between man and
                              information handling systems.
           27.5.        Computer integrated manufacturing (CIM)
           27.5.1.      One of the main reasons for selecting this particular subject area is its expected signifi-
                        cant market prospects ('), and its expected positive impact on manufacturing produc-
                        tivity.
           27.5.2.      The general objective of computer-integrated manufacturing (CIM) is to establish the
                        technological base for progressive introduction of computer aids in all phases of the
                        industrial production of goods. Fully integrated production is the end result. Future
                        manufacturing systems will integrate functions like computer-aided design (CAD),
                        computer-aided manufacturing (CAM) and computer-aided testing (CAT) through the
                        creation of a common data base acting as the backbone of the computer-integrated
                        manufacturing (CIM) system.
           27.5.3.      The generic term CIM will be used to describe this general concept of productive and
                        flexible discrete parts manufacturing which is consequent on the complete integration
                        of computers and/or automatic control systems at all levels of factory operation.
                        The main areas of R & D activities selected are:
            (>)  General Electric Corporation (USA) is reported to forecast a 29 billion ECU world market per year by
                 1991, and a recent report by Creative Strategies forecast a 760 million ECU market in western Europe for
                 robotics by 1986.
 ---pagebreak--- No C 321/24                      Official Journal of the European Communities                              26. 11. 83
           27.5.4. The integrated system architecture area covering:
                   — identification and development «f overall integrated system structures for data
                          base systems for engineering data of total product models and manufacturing
                          data of plant, machines and tool models,
                   — data base management systems aiming at ensuring the required data communica-
                         tion between the components of the integrated manufacturing system and the
                          data bases.
          27.5.5.  The system and general software area covering:
                   — computer-aided design/computer-aided engineering systems aiming at an
                         improved design process both in respect of shorter design time and accuracy, and
                         at establishing total product models for subsequent use in various stages of the
                         manufacturing process,
                   — computer-aided manufacturing systems aiming at formulating modular CAM sys-
                         tem structures allowing for all types of applications in all sectors of industry,
                   — computer-aided testing/computer-aided repair, aiming at cost-effective improve-
                         ment of product quality,
                   — command languages aiming at developing software modules capable of generat-
                         ing control programs from design/production/test simulation data for robot man-
                         ipulators, computer numerically controlled machine tools and flexible manufac-
                         turing systems.
          27.5.6.  The machine control area covering:
                   — automated assembly and assembly operating systems aiming at establishing fully
                         automatic assembly systems,
                   — robot operating systems where future areas for robot applications will pose differ-
                         ent requirements from those being met today,
                   — imaging (global and control) where future systems will require the use of complex
                         imaging 'sensory input' for CIM applications in such areas as assembling,
                         machining, testing, etc.,
                   — computer numerically controlled machine tools (CNC machines) where new
                         application areas within metal-forming and other mechanical engineering indus-
                         tries are expected to take place.
          27.5.7.  The component area covering:
                   — sensors, where progress is considered necessary for the future development of
                         advanced automated manufacturing systems,
                   — microelectronic sub-systems aiming at integrating entire control sub-systems onto
                         single chips.
          27.5.8.  Models of operation are furthermore proposed as a stimulus for keeping the recom-
                   mended R & D programme properly goal-oriented, and as consequence of the multi-
                   vendor nature of CIM development and manufacture.
                   It is suggested that a number of pilot plants/advanced development centres be imple-
                   mented in order to demonstrate advanced computer-integrated manufacturing
                   systems.
                   The pilot plants/advanced development centres would eventually form the basis of
                   more permanent research centres or centres of excellence, where further research and
                   development could evolve and also offer an industry advisory service. These centres
                   would also serve as test benches for experiments and evaluation of computer-inte-
                   grated manufacturing techniques and for training and education. Work at the centres
                   should be undertaken as a collaborative effort between private companies and univ-
                   ersities or other public research institutions. By locating such centres in different
                   Member States, long-term cooperation between researchers from within the Com-
                   munity and elsewhere would be facilitated and enhanced.
 ---pagebreak--- 26. 11.83                      Official Journal of the European Communities                                No C 321/25
          27.5.9. Pilot plants/advanced development centres should initially be established for at least
                  three important activities, such as:
                  — production of heavy, precision machined parts or sub-assemblies for machine
                        tools or engines,
                  — batch production of electromechanical products such as household appliances
                        and IT peripherals,
                  — production of high precision components or subassemblies such as medical
                        instruments.
                  The pilot plants/advanced development centres will also provide 'on the job' training
                  and education for both engineering and managerial personnel.
          INFRASTUCTURAL        MEASURES : INFORMATION EXCHANGE SYSTEM (IES)
          28.     As stated in paragraphs 22 to 24 above, cooperative research work on as large a scale
                  as the one planned within Esprit cannot simply rely on the concentration of research
                  teams and infrastructure in a few privileged centres.
                  Even if theoretically conceivable, the problems that such a solution would entail
                  would outweigh the benefits of collaborative effort.
          29.     In order to ensure effective cooperation between different participants established in
                  geographically separated locations, it is necessary to establish an infrastructure that
                  will ensure information exchange capabilities meeting the needs of all involved.
          30.     All participants in R & D projects, and indeed many others including 'Member States'
                  administrations, will need ready access to documentary information about Esprit
                  itself, about the various technical areas concerned, and about corresponding activities
                  elsewhere. This leads to a requirement for easy access to regularly updated data bases.
          31.     The administrators of projects will need ready access to project management informa-
                  tion, project management tools and software packages, and need a rapid and efficient
                  message system, as well as text-preparation facilities. The initial facilities established
                  for the pilot phase of Esprit will need to be progressively enhanced.
          32.     Those involved with the development and use of software will need access to software
                  development tools in a progressively more integrated environment, and those involved
                  with computer-aided design (CAD), and with graphical information will need access
                  to powerful tools for the creation, management and transmission of such information
                  by means of advanced peripheral devices (digitizers, displays, plotters, etc.)
          33.     Most of the research teams, whatever their field, will also need remote access to other
                  computing facilities and environments, often on different models of machine.
          34.     The functional requirements for an information exchange system meeting all these
                  requirements were defined by a joint working group set up by the Commission and
                  industry.
          35.     The particular feature of IES in the context of Esprit is that it will be a working tool
                  for research work, not a research topic in itself. The implementation of the IES must
                  be open to quick incorporation of the latest technique resulting from R & D but must
                  be based on mature and proven technologies and services.
          36.      Based on an assessment of facilities already available or likely to be available in the
                   short to medium term,-and on the need for the system to be capable of evolving in step
                   with user requirements and to profit from technical progress, the basic requirements
                   identified were:
                   — computer-based message and conference services,
 ---pagebreak--- No C 321/26                       Official Journal of the European Communities                                  26. 11. 83
                    — common text-preparation facilities,
                    — information retrieval (documentary and other),
                    — integrated software development environment, to include facilities for file transfer
                          remote execution of programs, and all aspects of software life-cycle management,
                    — graphics facilities, initially via facsimile, and in particular digital facsimile but not
                          excluding the later transfer of graphical information directly between computer
                          systems, as coding methods and transmission capabilities evolve.
           37.      The multiplicity and diversity of these requirements, and the inherent lack of precise
                    estimates of data volumes, numbers of users, etc. and their rate of growth over the next
                    10 years, lead to the necessity for the system to be flexible, evolutive and firmly based
                    on European and international standards.
            THE SIZE OF THE ESPRIT EFFORT
           38.      The preceding paragraphs have indicated:
                    — the technology objectives,
                    — the selective criteria used in drawing up the programme,
                    — the five main inter-related topics plus the proposed IES infrastructure.
                    A careful analysis of the resources necessary to carry out the programme and achieve
                    the objectives has been carried out. The resources required are summarized below and
                    related to the wider context.
           39.      The main boundary conditions taken into account are the present level of existing
                    financial and human resources in industry and university, the current level of public
                    expenditure in Member States and the overall level of investments in R & D work of
                    our main competitors.
                    Also considered essential from an industrial point of view is the breakdown between
                    development, product-oriented R & D work and longer term precompetitive R & D .
           40.      Community IT industry produces goods and services worth some 40 billion ECU per
                    year and is estimated to spend some five billion ECU per year in R & D, which corres-
                    ponds to some 10 % of the overall R & D expenditure in the Community.
                    If the same proportion is maintained within public expenditure, some additional 2 to
                    2,5 billion ECU a year are spent on R & D in IT, bringing the total expenditure
                    on IT R & D to seven to eight billion ECU per year in the Community.
                     This corresponds to approximately 20 % of the world effort in this domain.
           41.      If one considers that the aims of Community industry must be to attain a proportion
                    of the world market equivalent to the Community's share of such a market, i.e. 30 %,
                    the figures in the preceding paragraph lead to the conclusion that whereas Community
                     IT industry is already making large efforts in R & D, and indeed is in some cases
                    spending a greater proportion of turnover on R & D than its major competitors, this
                     effort is not sufficient in relation to the volume of expenditure in R & D by its compet-
                     itors, nor in relation to the size of the market aimed at.
                     This relative paucity in size impinges furthermore on the nature of work leading com-
                     panies to privilege shorter term product oriented, when not plain trouble-shooting,
                     activities at the expenses of the long-term strategic R & D that will underlay the next
                     generation of products.
 ---pagebreak--- 26. 11. 83                                Official Journal of the European Communities                                No C 321/27
               42.         A substantial increase, and a substantial rationalization, are therefore going to be
                           necessary. The former will require a fairly long time to build up; the latter can be
                           undertaken immediately.
               43.         Although Esprit is designed to promote such rationalization, rather than to bring in a
                           decisive increase in financial resources, the size of the effort it will mobilize must be
                           proportionate to the impact it intends to achieve.
                           Such an impact can be broadly measured in terms of market and actual current level
                           of expenditure. The total amount of industrial investment in research and develop-
                           ment on IT in the Community can be estimated at some five billion ECU per year: of
                           this a negligible fraction is spent in Europe on long-term precompetitive R & D activi-
                           ties as compared with the 5 to 10 % of our main competitors.
               44.         To be meaningful and stimulate the new strategic thinking that must underly the defi-
                           nition and execution of the R & D programme, a Community intervention would have
                           to stimulate a joint long-term effort in precompetitive R & D of the same order of
                           magnitude (i.e. of at least 5 to 10 % of the current overall industrial effort). The conclu-
                           sions that were reached after consulting with industry, governments and academia,
                           taking into account the physical limitation of a realistic and gradual build-up of capa-
                           city, indicated that an initial effort of precompetitive long-term R & D reaching some
                           2 000 man-years/year from the third year onwards could confidently and effectively be
                           aimed at. The following table illustrates how resources for activities, started during the
                           first phase will build up during the first five years (1984 to 1988) and tail off during the
                           subsequent years. When the second phase of the programme will be planned a similar
                           pattern of distribution of resources is expected for the years 1989 to 1993 that will
                           maintain at least for the first three to four years of the second phase (or possibly
                           slightly increase in real terms) the yearly deployment of resources.
               45.         The conversion of these figures into budget estimates, according to current industry
                           practice, leads to an estimated overall investment for the first five-year phase of some
                            1 500 million ECU. This would broadly correspond to 6 % of the total industrial
                            R & D investment in IT in the Community; very much in line with that'of our main
                           competitors and well within our possibilities. On the basis of an average 50 % contri-
                           bution, the budgetary load for the Community would be 750 million ECU, including
                           the costs of the management of the programme and access to and use of Information
                            Exchange System.
                                                        ESPRIT PROGRAMME
                                                     Resource summary (man years)
                                           Activities started during first phase (1984 to 1988)
                                    Pilot       1984    1985    1986     1987    1988    1989   1990    1991    1992    1993
                                  projects                                                                                   Total
                                      0           1       2       3        4       5      6      7        8      9       10
Projects starting in year:
  0                                   230        325     327     192      125       30                                         999
  1                                              420     551     629      540     519      20                                2 679
  2                                                      547     766      670     545     140                                2 668
  3                                                              328      428     450     256     68                         1 530
  4                                                                       204     276     180     85       45                  790
  5                                                                                 92    140    125     105      80      60   602
        Total man years               230        745   1425    1915     1967    1912      736    278     150      80      60 9 268
 ---pagebreak---   No C 321/28              Official Journal of the European Communities                      26. 11.83
                 OPERATING SYSTEMS
              & APPLICATIONS PROGRAMS
                           COMPUTER-AIDED DESIGN
                  MEMORY AND STORAGE
                       MECHANISMS                                               INFORMATION
                                                                            STORAGE & RETRIEVAL
                                      MATERIALS
                 DIGITAL SWITCHING & TRANSMISSION
THEORIES
METHODS                                OFFICE SYSTEMS
& TOOLS                                    SCIENCE
                  DISPLAYS
                                       HUMAN-MACHINE
                                         INTERFACE
                                                                                         EXPERT
                                                                                        SYSTEMS
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                                INTELLIGENT SENSORS
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                             ALGORITHMS
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                             KNOWLEDGE REPRESENTATION
                                               Figure 1
                              Impression of R & D topic interdependencies
 ---pagebreak--- 26. 11. 83                        Official Journal of the European Communities                                 No C 321/29
                                                       SECTION III
                                                  PROPOSED ACTIONS
                                                   How will Esprit be run?
           PROPOSED ACTIONS
           1.     Mounting a 'technology push' across the Community capable of achieving technical par-
                  ity with, if not superiority over, our main competitors within the next 10 years represents
                  an ambitious objective that will require a joint effort of the size mentioned in the preced-
                  ing section. Only a programme of sufficient scale will draw on all in the Community who
                  can make an effective contribution to the R & D and to its exploitation: large and small
                  industrial firms, research institutions, universities and individuals.
                  In this way it will be possible to obtain a concentration of human and financial resources
                  proportionate to the goals.
           2.     Esprit is designed to this end to be a programme through which:
                  (a) Adequate funds will be made available to launch in the Community cooperative pro-
                       jects of precompetitive industrial R & D falling within agreed strategic technological
                       lines and having directly identifiable Community interest and character.
                  (b) Systematic consultation will be promoted between Member States administrations,
                       academic institutions, industry and the Community on the definition, appraisal and
                       adjustment of R & D activities, either directly or indirectly related to those identified
                       by the Esprit technical programme, with a view to achieving the optimum coordina-
                       tion of efforts and utilization of resources amongst all those involved in IT through-
                       out the Community.
                  (c) Infrastructural and organization facilities will be set up to ensure careful selection,
                       effective execution, proper monitoring and management and adequate dissemination
                       of results of the actions.
           3.   . The programme is primarily an industrial one, hence funds will be provided by industry
                  in the first place; Community contribution will be essential to achieve the desired con-
                  centration in time and size.
           4.     The definition of the strategic technical objectives will be based on industrial inputs tak-
                  ing into account wider national and Community interests and will be supported by sys-
                  tematic analysis of the sectors. As for the R & D projects for which financial support is to
                  be provided, Esprit is designed to ensure the best coverage of the selected spectrum of
                  key technologies as well as of their possible spin-offs and forerunners.
           5.     In this perspective industrial R & D is acknowledged to rest essentially on two broad
                  classes of projects:
           5.1.   Projects that rely on large infrastructure and resources, both human and financial, and
                  that presuppose the capability of substantial investments in a subsequent phase of appli-
                  cation oriented R & D . For such activities to be fruitfully conceived and undertaken, there
                  must be a clear and constant strategic perspective to ensure continuity of actions and the
                  breadth necessary to reap the long-term benefits. Such medium to long-term 'system
                  driven' R & D activities, that will be referred to in this document as type A projects, will
 ---pagebreak--- No C 321/30                       Official Journal of the European Communities                                       26. 11. 83
                 represent the strategic backbone of Esprit. The share of the overall effort represented by
                 this type of project will reflect the contribution of the contractors involved in basic R & D
                 in the information technologies in the Community.
          5.2.    Besides these there is a second wide range of projects that will require relatively much
                  smaller resources. Such activities, that will be referred to as type B projects, could range
                  from very long term, speculative R & D to relatively shorter term very specifically
                  oriented R & D . These tend generally to rely very much on flexible infrastructure and on
                  individual thinking rather than on a system approach, and are expected to account for a
                  significant share of the overall effort under Esprit.
          6.      In order to create the conditions for the optimum development of both these types of
                 activities, the Esprit programme, designed to span a period of 10 years, is now proposed
                 for an initial phase of five years, with as a rule, a yearly updating of the detailed work
                 programme, and an overall review milestone after 2 Vi years. This structure of programme
                 will guarantee a long-term perspective to the larger projects, flexibility to the smaller, and
                 the possibility whenever required of altering course in the light of results and technology
                 evolution.
           7.     To this end it will be necessary to establish a close consultation between the Commission
                  and the Member States as well as continuous monitoring of the sector to provide timely
                  identification of technology objectives and trends; the organization of the administrative
                  infrastructure to ensure the updating of the work programme and its matching to real
                  needs; objective and accurate appraisal of work; contract administration; coordination of
                  the various projects, and the dissemination of results.
           8.     These activities will be carried out by the Commission with the advice of the Manage-
                  ment and Consultative Committee (MCC) established by Council Decision and whose
                  members will be nominated by the Commission in agreement with the Member States'
                  Governments. The composition and main tasks of such Management and Consultative
                  Committees are spelt out in the draft Council Decision establishing such Committees,
                  that is the subject of a recent proposal of the Commission (').
           DETAILED DEFINITION AND UPDATING OF OPERATIONAL                               WORK PROGRAMME
           9.     The technical Annex to the draft Decision indicates, in Section A, the main outlines of
                  the proposed R & D work, as well as some of the main avenues of attack and objectives
                  that can already be identified.
                  The indications given therein are, in the Commission's opinion, sufficiently clear and
                   detailed to define the overall envelope of work, its broad size and expected impact, when
                   compared with the present state of the art in Europe and in the world. This work pro-
                   gramme is, however, not intended to provide a definition and evaluation of concrete
                   R & D projects.
           10.    In such a fast-moving sector as IT where the average life of a product is three years, it
                  would be illusory and misleading to try and define ab initio detailed activities and time
                  schedules for the next five years to come; a meaningful operational work programme
                  needs continuous monitoring and would have to be revised at least once a year. It is
                  furthermore to be expected that particular events may occur that could lead to the need
                   for revising some actions at short notice at any time during a year.
                  To cope with this and other possible emergencies it seems necessary to have a lighter
                   mechanism than a Decision by the Council. Such a mechanism should from the outset
           (') COM(83) 143 of 16 March 1983: communication from the Commission to the Council on structures and
               procedures for common policy in the field of science and technology (OJ No C 113, 27. 4. 1983, p. 4).
 ---pagebreak--- 26. 11. 83                          Official Journal of the European Communities                                        No C 321/31
                  ensure the continuous decision-making process necessary and react quickly and effi-
                  ciently when an immediate decision is needed.
           11.    This is why it is proposed that a more detailed programme of work necessary for the day-
                  to-day implementation of the programme be established, and updated as required, by the
                  Commission after consulting the Management and Coordination Committee.
                  As a rule such a work programme will be established every 12 months covering the
                  detailed activities of the first year (') and a decreasing refinement of the activities of the
                  subsequent four years. A draft will be submitted and discussed with the Management and
                  Coordination Committee three months in advance of the 12-month period to which it
                  refers and adopted at the latest within the first month of such a 12-month period. More
                  frequent revision or partial modifications that are required would be possible at any time.
                  A rolling plan could in this way be established, within the general programme, that would
                  enable Esprit to be kept up-to-date and effective in the light of the experience directly
                  acquired through the technical achievements of Esprit projects, through advances by
                  competitors and through the practical response of the main actors in Europe and outside.
           12.     A first preliminary draft of such a more detailed work programme is being prepared by
                  the Commission, with appropriate consultation, that will take into account the up-to-date
                  information resulting from a series of preparatory studies (launched at the end of last
                   year) that will be available as from June 1983. A final draft work programme covering the
                  years from 1984 to 1988 will be ready by September 1983.
           13.     To prepare the ground for the formulation of the opinion of the Management and Coor-
                   dination Committee on this first programme as soon as Esprit is adopted, close consulta-
                   tions have been started with the Member States's administrations through the Senior
                   Executives Committee (SEC) established for the pilot projects and are planned to con-
                   tinue until the formal definition of the programme.
            14.     Furthermore, given the ambitious long-term objectives and the complex and evolutionary
                   nature of its technical goals, a programme like Esprit is expected to need revisions and/or
                   changes in its broader lines over a period of years.
                    For this reason, although the programme is designed to space 10 years, it is now proposed
                    for a first phase of five years. Before the end of the fourth year of execution of this first
                    phase, a new proposal will be prepared concerning the second phase of the programme in
                    the light of the experience and results acquired to date.
                    The choice of proposing a five-year programme in a framework of a 10-year perspective
                    has several reasons of which the most important are:
                    — that Esprit is expected to give short-term benefits while addressing mid- to long-term
                          objectives which require a continuity going beyond five years irrespective of the level
                          of fundings,
                    — the impact of Esprit depends as much on anticipation and learning of cooperating in
                          R & D as on the excellence of the research work. This implies the need for continuity
                          over a longer period.
                     The option to propose immediately a decision over 10 years was not chosen in the light of
                     the practical impossibility of giving even broad programme details beyond a time horizon
                     of five years in this rapidly evolving domain.
            (') 'Years' are to this effect 12-month periods starting with the first month after the adoption of this pro-
                gramme by the Council.
 ---pagebreak--- N o C 321 / 3 2                      Official Journal of the European Communities                                26. 11. 83
              FINANCIAL SUPPORT
              15.  Given the different size and requirements of the projects involved (A & B type projects),
                   and in many cases also their different operational nature and in order to obtain the best
                   from all contributors, different procedures for their inclusion in the Esprit programme
                   would appear to be required particularly with respect to the percentage and nature of sup-
                   port and the criteria for eligibility.
              16.  For projects of strategic character (type A projects) the Commission proposes that the
                   degree of financial contribution by the Community shall be 50 % in the form of a subsidy.
                   The remaining 50 % should as a rule be provided by the industry itself.
                                     i
                   The degree of financial participation by industry is considered to be a test of the degree to
                   which industry believes in the need for the work. Whenever, therefore, there are financial
                   interventions from national authorities, given the variation from country to country in the
                   ways in which governments support industry, the Commission will examine the situation
                   on a case by case basis, bearing in mind the general principle.
              17.  The smaller projects (type B) raise different issues. In principle, the Commission consi-
                   ders that for the smaller projects, the norm should also be a 50 % contribution by the
                   Community.
                   Possible variants are, however, envisageable along the lines of the following examples:
                   (a) Where a request for industrial support comes from SMEs, or others with very limited
                         finance available, Community support well beyond 50 % may exceptionally be con-
                         sidered. In such cases particular arrangements concerning the access to or the exploi-
                         tation of the results are also envisaged.
                   (b) In exceptional cases, where a research proposal is submitted by academic institutions
                         which fail to secure an industrial partner or sponsor because the work proposed is
                         too advanced for industry to assist in its early stages, if the Commission is satisfied
                         that the technical features of the work are so outstanding that it should be supported
                         despite the lack of industrial support, the proposal can be initially funded up to the
                         level of 100%.
                         However, in this case, a phased approach would be envisaged by which the project
                         could be launched with the understanding that industry would take over a reasona-
                         ble part of the financing after the project has achieved agreed milestones proving the
                         validity of the chosen approach.
              PROJECT SELECTION
              18.   In order to be eligible for aid, projects will have to be proposed by companies or organi-
                   zations established and, as a rule, currently carrying out R & D work in the Community
                    and will have to be carried out in the Community.
                    Proposals will be submitted to the Commission in reply to an open invitation published
                    in the Official Journal of the European Communities.
              19.  The following main criteria would as a rule be applied to the evaluation of all projects,
                    other than technical soundness:
                   — industrial strategy contribution in the light of Esprit objectives,
                   — Community dimension,
                    — technical and scientific, as well as managerial capability to carry out the proposed
                         programme of work,
                    — measures envisaged and approach to accessibility and exploitation of results.
 ---pagebreak--- 26. 11. 83                        Official Journal of the European Communities                               No C 321 / 3 3
           20.   Within the general principles above, the following specific orientations are envisaged
                 (concerning the various elements of the process of project selection).
           20.1. For larger projects (type A) the participation of at least two companies not effective subsi-
                 diaries of each other and not established in the same Member State will be a mandatory
                 requisite of eligibility.
                 There are no specific restrictions to the form of such co-participation which can range
                 from prime contractor/subcontractor relationship to a joint venture set-up for the dura-
                 tion of a specific project.
           20.2. For the smaller projects (type B) such multinational participation, although not manda-
                 tory, shall be considered a major factor of preference all other things being equal.
                 In order to maintain the Community dimension in cases in which proposals from one
                 single Member State are to be considered, suitable arrangements to ensure adequate dif-
                 fusion of, and access to, the results of the research work would have to be negotiated.
           21.   There will be a periodical open call for proposals for all projects. All projects submitted
                 within the deadlines will be examined on their own merit and a selection made within the
                 limits of the budget allocated.
           22.   All other things being equal, the main factors determining the allocation of funds and, the
                 choice of projects will be the overall technical quality of the proposal and the capability
                 of the proposer to deliver the results: where many good competing projects are available
                 the principle will be to grant adequate support to the very best rather than dilute the sup-
                 port amongst all the good ones.
            PROGRAMME          MANAGEMENT
            23.   The overall responsibility for the management of the programme will rest with the Com-
                  mission. At the same time, the advice and consultation of the Member States, of industry
                  and the academic world will be indispensable if coordinated effective actions have to
                  take place. Advice and consultation of the Member States will be provided by a Manage-
                  ment and Consultative Committee (MCC) nominated by the Commission in agreement
                  with the Member States' Governments.
            24.   In parallel with this formal advisory structure, the Commission will establish consulta-
                  tions with industry and whenever appropriate with academic and research institutions. It
                  will organize them in such a way that large and small IT firms as well as users and aca-
                  demic and research institutions will have the opportunity of expressing their views and
                  suggestions to the Commission on all major matters related to the content, structure and
                  execution of the programme.
                  To this end, the Commission has the intention of setting up Industrial as well as Scien-
                  tific Advisory Boards.
            25.   Apart from the more traditional financial and technical monitoring of contracts, the pro-
                  gramme management will ensure;
                  — that projects are invited and selected in conformity with the agreed strategic objec-
                        tives,
                  — that the objectives and the programme of work are monitored and updated in order
                        to maintain their strategic validity,
                   — that all qualifying companies, research institutes and universities are given the
                        opportunity to make a contribution and that optimum use is made of available scien-
                        tific resources,
                   — that coordination is established and maintained between the various actions and
                        research projects,
 ---pagebreak--- No C 321/34                      Official Journal of the European Communities                                    26. 11. 83
                — that information concerning ongoing and planned activities and their results are
                      brought to the attention of all potential beneficiaries,
               — that information concerning or affecting standardization issues are given adequate
                      diffusion and consideration.
                An organization with advanced data processing and communications facilities will be set
                up requiring a kernel of administrative staff to ensure continuity of action and basic
                infrastructure, plus a number of scientific staff.
                Through this infrastructure it will be possible at any point in time to have management
                information on all activities under way, completed or planned, to appraise the effective-
                ness of particular measures taken, and to define early corrective actions whenever this
                appears necessary.
                The timely updating of files and access to data will be possible through a connection to
                the Information Exchange System that is going to be set up to serve the communication
                need of all participants in Esprit as briefly described in Section II, paragraphs 28 to 37.
          DISSEMINATION         OF INFORMATION, ACCESS TO, AND EXPLOITATION OF,
          RESULTS
          27.   Esprit is a programme of precompetitive research. That means that as a rule the results
                cannot be immediately applied in the market place and will normally require a further
                phase of R & D beyond that covered under the programme, before marketable products
                or processes result.
          28.   On the other hand a primary justification for Esprit is in the synergetic effect that it will
                have through focussing a 'critical mass' of research efforts on selected key strategic tech-
                nological objectives. It is designed to provide Community industry with the technological
                tools that will enable it to improve its competitiveness on the world market.
                To meet these requirements, adequate dissemination of information on work that is being
                planned or under way as well as on its possible results and their exploitation is going to
                be of fundamental importance. This will take into account the different kinds of informa-
                tion, the various groups to be served and their vested interests. At the level of the scien-
                tists directly involved in research, the Commission intends to organize or promote a series
                of workshops per research topic, during which information concerning research work
                could be exchanged on a fairly informal basis. Participants would have to be invited and
                would have to undertake to contribute actively by presenting their activities and their pro-
                gress. Qualified observers from establishments not directly involved in Esprit work, but
                having a legitimate interest in participating, could be invited. This would represent a con-
                crete infrastructure to ensure that those who are involved in a particular kind of research
                work in Europe keep in contact with each other and are informed of each others' results.
                In this way future cooperation and a de facto coordination of efforts would be effectively
                promoted.
          29.   Apart from this more specifically technical solution addressed to the main actors of
                research temselves, a wider clearing house infrastructure is going to be established by
                which systematic information on work in progress and intellectual property rights that
                will have to be notified by the contractors would be collected and made available, e.g.
                through special conferences or over the Information Exchange System that will be set up
                to serve the needs of all participants in Esprit.
                To this end the Commission will retain as a rule the right to publish or make known free
                of charge appropriate reports on the results of work carried out within Esprit.
           30.   Access to, and exploitation of, results raise other issues. Esprit is characterized by the fact
                that:
 ---pagebreak--- 26. 11. 83                        Official Journal of the European Communities                                   No C 321/35
                 — industry itself pays a significant and substantial share of the cost of the work,
                 — the major objectives of the work will only be achieved when and if industry itself
                       exploits commercially and profitably the results.
                  These conditions existed when the Esprit pilot projects were under consideration and
                 they are, in principle, the same that apply to other projects financed by the Community.
           31.   The guidelines for these projects are that ownership and the right to exploit any informa-
                 tion and industrial property rights resulting from the work under any contract (foreground
                 information) will normally reside with the contractors.
           32.   The detailed arrangements between the contractors participating in the same projects will
                 be left to the interested parties to agree, the Commission only ensuring that competition
                 rules are not infringed. Whatever the arrangements between these contractors, they must
                 ensure that each participant in the same project, for the whole duration of the project and
                 for the purpose of fulfilling its share of the work, has guaranteed and privileged access to
                 the results of the work done by the others.
           33.   In order to benefit from the overall synergetic effect that a Community action is designed
                 to favour, access for a project team to foreground knowledge generated by another team
                 working on a different project within the Esprit framework shall also be arranged under
                 privileged conditions in as far as such information enables better or quicker results to be
                 obtained from the project which needs it.
           34.   Furthermore, to promote improved competitiveness in Community industry as a whole, it
                 is necessary that other industrial companies in the Community which did not participate
                 in a specific project, but which have the ability to use its results and wish to do so, should
                 have the opportunity to acquire the rights. The terms should be negotiated on a commercial
                 basis taking into account the contributions of the originating parties as well as those of
                 the Community.
           35.   To this end, if the originating party does not wish to exploit part or all of the results of the
                 research, without a legitimate reason, there will be adequate provisions to ensure that the
                 Community can require him to grant licence either to exploit the results of his work or to
                 carry the research work further.
           PERSONNEL AND           INFRASTRUCTURE
           36.   Esprit is a carefully and selectively targeted programme with specific objectives, not an
                 'aid programme'. As a consequence, the Commission will require sufficient qualified staff
                 resources to assure an effective, responsible and transparent management.
           37.   The overall programme is designed to extend over 10 years based on a five-year initial
                 decision. After a three-year build-up (including the pilot phase) the number of persons
                 working in Member States within the framework of Esprit will reach almost two thou-
                 sand.
           38.   As anticipated already in Section II, for organizational purposes we will distinguish here
                 five R & D areas plus one infrastructure activity. R & D activities cutting across one or
               ,  more of the areas will include:
                 — a comparatively small number of major strategically oriented projects which will
                       require complex planning and coordination, and
                 — a much larger number of relatively small projects, which in spite of their larger num-
                       ber will not require a proportionately larger staff as they will require simpler monitor-
                       ing and coordination procedures.
 ---pagebreak--- No C 321/36                           Official Journal of the European Communities                                   26. 11.83
          39.     As a consequence, the project-related staff requirement can be broken down as follows:
                  (a) head coordinator:                                                                        \ \-
                  (b) staff unit (budget planning personnel):                                                  3 A;
                  (c) sub-programme coordinators:                                                              6 A;
                  (d) project and contract managers (!) for large projects:                                   30 A;
                  (e) project and contract managers (') for small projects:                                   24 A.
          40.     The success of Esprit will rely also on the effectiveness of adequate infrastructural activ-
                  ity that will require additonal specialized personnel.
                  The envisaged break-down of such personnel is as follows:
                  — continuous monitoring of the IT sector and adjustment of Esprit objectives:                6 A,
                  — assuring dissemination of the results within the agreed conditions:                        6 A,
                  — providing reports to Parliament, Council and the Member States on work
                        progress and adjustments of the programme:                                             2 A,
                  — informing and consulting industry, SMEs, user groups, trade-unions and the
                        general public:                                                                        5 A.
          41.     The overall Esprit team, according to this estimate, will need 83 A.
                  The nature of the programme is such that all or most posts can be temporary posts.
          42.     The organization and management of Esprit with this comparatively small number of
                  staff represents a challenge in itself because:
                  — Community R & D needs to be transparently managed and accounted for,
                  — industrial strategic orientation demands high flexibility, rapid response and strong
                        focus on critical enabling technologies,
                  — IT is a fast moving and rapidly changing sector,
                  — Esprit features horizontal and vertical integration of R & D between companies,
                        research centres and industrial users for the execution of the R & D ,
                  — Esprit includes closely linked, but rather diversified, subjects requiring an inter-
                        disciplinary approach,
                  — access and dissemination of results needs to be rapid but carefully managed.
          43.     This is brought home, e.g. by the following:
                  (a) Comparable Commission programmes which are comparable in size, although not in
                         complexity and are not as interdisciplinary, have 1 A per 0,5 to five million ECU a
                        year. In the Esprit estimate, each A has, on average, responsibility for some 20 mil-
                         lion ECU over the 10-year framework, i.e. about two million ECU per annum.
                   (b) In project management of this character, an allocation of 10 % of the total research
                         workforce to R& D management and administration is considered to be a reason-
                         able figure. The above estimate represents less than 5 % of the number of researchers
                         active after completion of the build-up.
          44.     The above figures represent the minimum required to fulfill all essential central manage-
                  ment tasks in a way that is compatible with the institutional duties associated with the
                   execution of Esprit and that is best suited to contribute to its technical success.
           (') The tasks of project and contract manager include technical monitoring of the projects, assessment of
               results as well as all questions related to the administration of contracts.