CELEX: 52011PC0809
Language: en
Date: 2011-11-30
Title: Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL establishing Horizon 2020 - The Framework Programme for Research and Innovation (2014-2020)

|
			
		
		
		52011PC0809
		
			Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL establishing Horizon 2020 - The Framework Programme for Research and Innovation (2014-2020) /* COM/2011/0809 final - 2011/0401 (COD) */
			
				
		
		
			
			   	EXPLANATORY MEMORANDUM
1.           CONTEXT OF THE PROPOSAL
The set of proposals for "Horizon
2020", drawn up fully in line with the Commission Communication 'A Budget
for Europe 2020'[1], wholly supports the
Europe 2020 strategy, which identified research and innovation as central to
achieving the objectives of smart, sustainable and inclusive growth. The set
consists of the proposals for: 
(1)              
a Framework Programme for Horizon 2020 (Treaty
on the Functioning of the European Union – 'TFEU'), 
(2)                   
a single set of Rules for Participation and
Dissemination (TFEU), 
(3)                   
a single specific programme to implement Horizon
2020 (TFEU), as well as 
(4)                   
a single proposal for the parts of Horizon 2020
corresponding to the Euratom Treaty. 
The overall political narrative and
background to these legislative proposals is provided by a Commission
Communication adopted together with them, which addresses a number of major
cross-cutting elements such as simplification and how the approach to
innovation has been strengthened. 
Horizon 2020 contributes directly to
tackling the major societal challenges identified in Europe 2020 and its
flagship initiatives. It will contribute equally to creating industrial
leadership in Europe. It will also increase excellence in the science base,
essential for the sustainability and long term prosperity and wellbeing of
Europe. To achieve these aims, the proposals include a full range of support
that is integrated across the research and innovation cycle. Horizon 2020
therefore brings together and strengthens activities currently funded under the
7th Framework Programme for research, the innovation parts of the
Competitiveness and Innovation Framework Programme, and the European Institute
of Innovation and Technology. In this way, the proposals are also designed to
realise a substantial simplification for participants.
2.           RESULTS OF CONSULTATIONS WITH THE
INTERESTED PARTIES AND IMPACT ASSESSMENTS
The preparation of the four proposals took
full account of the responses to an extensive public consultation based on a
Green Paper, "From challenges to opportunities: towards a common strategic
framework for EU research and innovation funding", COM(2011)48. Views were
expressed by the European Council, Member States and a wide range of
stakeholders from industry, academia and civil society.
The proposals also rely on two in-depth
impact assessments, drawing on stakeholder consultations, internal and external
evaluations, and contributions from international experts. The assessments
found that the Horizon 2020 option would bring more clarity of focus, best
achieve the necessary critical mass of effort at programme and project level,
and lead to greatest impact on the policy objectives and downstream economic,
competitiveness, and social benefits, while at the same time helping to simplify
matters by e.g. easing the administrative burden for participants, streamlining
the applicable rules and procedures, ensuring consistency between instruments
and pointing to a new risk/trust balance.
3.           LEGAL ELEMENTS OF THE PROPOSAL
3.1         Legal base
The proposal integrates research and
innovation activities in a seamless way in order to achieve the policy
objectives. 
As such, Horizon 2020 will be based on the
TFEU Titles "Industry" and "Research and technological
development and space" (Articles 173 and 182). The related Rules for
participation and dissemination will be based on the same TFEU Titles (Articles
173, 183 and 188). The "Industry" basis in both cases will relate
predominantly to the European Institute of Innovation and Technology (EIT), which
will be funded by a financial contribution from Horizon 2020. The EIT will not
appear at the specific programme level.
It is recalled that innovation activities
have been explicitly included in various Framework Programmes based on the
Research Title of the Treaty on the Functioning of the European Union and that
the current Framework Programmes also includes a range of innovation
activities. As a consequence, the specific programme that will implement
Horizon 2020 will be based on the TFEU Title "Research and technological
development and space" (Article 182) as the activities foreseen in them
will fall under those covered by this Title. 
The proposal for the Euratom research and
training programme contributing to Horizon 2020 is based on Article 7 of the
Euratom Treaty. 
3.2         Subsidiarity and
proportionality principles
The proposals have been designed to
maximise Union added value and impact, focusing on objectives and activities
that cannot be efficiently realised by Member States acting alone. Union level
intervention can strengthen the overall research and innovation framework and
coordinate Member States' research efforts thereby avoiding duplication,
retaining critical mass in key areas and ensuring public financing is used in
an optimal way. Union level intervention enables continent-wide competition to
select the best proposals, thereby raising levels of excellence and providing
visibility for leading research and innovation. The Union level is also best
placed to support trans-national mobility, thereby improving training and
career development for researchers. A Union level programme is more able to
take on high risk and long-term R&D, thereby sharing the risk and
generating a breadth of scope and economies of scale that could not otherwise
be achieved. Union level intervention can leverage additional public and
private investments in research and innovation; contribute to the European
Research Area whereby knowledge, researchers and technology circulate freely;
and accelerate the commercialisation and diffusion of innovations across the
Single Market. Union level programmes are also needed to support policy making
as well as the objectives set by a range of policies. Full evidence is
presented in the accompanying impact assessments.
4.           BUDGETARY IMPLICATION
The budget of all proposals is presented in
current prices. The legislative financial statement attached to this proposal
sets out the budgetary, human and administrative resource implications. The
Commission may use, on the basis of a cost-benefit analysis, existing executive
agencies for the implementation of Horizon 2020, as provided for in Council
Regulation (EC) No 58/2003 laying down the statute for executive agencies to be
entrusted with certain tasks in the management of Union programmes. 
2011/0401 (COD)
Proposal for a
REGULATION OF THE EUROPEAN PARLIAMENT
AND OF THE COUNCIL
establishing Horizon 2020 - The Framework
Programme for Research and Innovation (2014-2020)
(Text with EEA relevance)
THE EUROPEAN PARLIAMENT AND THE
COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the
Functioning of the European Union (TFEU), and in particular Articles 173(3) and
182(1) thereof,
Having regard to the proposal from the European
Commission,
After transmission of the draft legislative
act to the national Parliaments,
Having regard to the opinion of the
European Economic and Social Committee[2], 
Having regard to the opinion of the
Committee of the Regions[3],
Acting in accordance with the ordinary
legislative procedure,
Whereas:
(1)              
The Union has the objective of strengthening its
scientific and technological bases by achieving a European Research Area ("ERA")
in which researchers, scientific knowledge and technology circulate freely, and
encouraging the Union to become more competitive, including in its industry. To
pursue those objectives the Union should carry out activities to implement
research, technological development and demonstration, promote international
cooperation, disseminate and optimise results and stimulate training and
mobility.
(2)              
The Union also has an objective to ensure that
the conditions necessary for the competitiveness of the Union's industry exist.
For this purpose, action should be aimed at fostering the better exploitation
of the industrial potential of policies of innovation, research and
technological development.
(3)              
The Union is committed to achieving the Europe
2020 strategy[4], which has set the
objectives of smart, sustainable and inclusive growth, highlighting the role of
research and innovation as key drivers of social and economic prosperity and of
environmental sustainability and setting itself the goal to increase spending
on Research and Development to reach 3 % of gross domestic product (GDP) by
2020 while developing an innovation intensity indicator. In this context, the Innovation
Union flagship initiative sets out a strategic and integrated approach to
research and innovation, setting the framework and objectives to which future
Union research and innovation funding should contribute. Research and
innovation are also key factors for other Europe 2020 flagship initiatives,
notably on resource efficient Europe, an industrial policy for the
globalisation era, and a digital agenda for Europe. Moreover, for achieving the
Europe 2020 objectives relating to research and innovation, Cohesion policy has
a key role to play through building capacity and providing a stairway to
excellence.
(4)              
At its meeting of 4 February 2011, the European
Council supported the concept of the Common Strategic Framework for Union
Research and Innovation funding to improve the efficiency of research and
innovation funding at national and Union levels and called on the Union to
rapidly address remaining obstacles to attracting talent and investment in
order to complete the ERA by 2014 and achieve a genuine single market for
knowledge, research and innovation.
(5)              
The European Parliament has called for a radical
simplification of Union research and innovation funding in its Resolution of 11
November 2010[5], has highlighted the
importance of the Innovation Union to transform Europe for post-crisis world,
in its resolution of 12 May 2011[6], has drawn attention to
important lessons to be learned following the interim evaluation of the Seventh
Framework Programme in its resolution of 8 June 2011[7]
and has supported the concept of a common strategic framework for research and
innovation funding in its resolution of 27 September 2011[8].

(6)              
The Council of the European Union called on 26
November 2010 for future Union funding programmes to focus more on Europe 2020
priorities, address societal challenges and key technologies, facilitate
collaborative and industry-driven research, streamline the instruments,
radically simplify access, reduce time to market and further strengthen
excellence.
(7)              
The importance of a coherent strategic approach
was also underlined in opinions delivered by the European Research Area
Committee on 3 June 2011[9], the Committee of Regions
on 30 June 2011[10], and the European
Economic and Social Committee on 13 July 2011[11].
(8)              
The Union Budget Review adopted by the Commission
on 19 October 2010 put forward key principles which should underpin the future
Union budget, namely focussing on instruments with proven Union added value,
becoming more results-driven and leveraging other public and private sources of
funding and it proposed to bring the full range of Union instruments for
research and innovation together in a Common Strategic Framework. 
(9)              
The Commission Green Paper 'From Challenges to
Opportunities: Towards a Common Strategic Framework for EU Research and
Innovation funding'[12] identified key questions
on how to achieve those ambitious objectives and launched a broad consultation,
in the course of which stakeholders and Union institutions largely agreed with
the ideas presented therein.
(10)          
In the Communication 'A Budget for Europe 2020'[13],
the Commission proposed to address with a single Common Strategic Framework for
Research and Innovation the areas covered in the period 2007-2013 under the
Seventh Framework Programme for Research and the innovation part of the
Competitiveness and Innovation Framework Programme, as well as the European
Institute of Innovation and Technology (EIT) in order to serve the Europe 2020
Strategy target of raising spending on Research and Development to 3 % of GDP
by 2020. In that Communication, the Commission also committed to mainstream
climate change into Union spending programmes and to direct at least 20 % of
the Union budget to climate-related objectives. Climate action and resource
efficiency are mutually reinforcing objectives for achieving sustainable
development. The specific objectives relating to both should be complemented
through the other specific objectives of Horizon 2020. As a result it is
expected that at least 60% of the overall Horizon 2020 budget should be related
to sustainable development. It is also expected that climate-related
expenditure should exceed 35% of the budget, including mutually compatible
measures improving resource efficiency. The Commission should provide
information on the scale and results of support to climate change objectives.
Climate-related expenditure under Horizon 2020 should be tracked in accordance
with the methodology stated in that Communicaiton.
(11)          
Horizon 2020 - the Framework Programme for
Research and Innovation in the European Union (hereinafter 'Horizon 2020'),
focuses on three priorities, namely generating excellent science in order to
strengthen the Union's world-class excellence in science, fostering industrial
leadership to support business, including small and medium-sized enterprises (SME)
and innovation and tackling societal challenges, in order to respond directly
to the challenges identified in the Europe 2020 strategy by supporting
activities covering the entire spectrum from research to market. Horizon 2020 should
support all stages in the innovation chain, especially activities closer to the
market including innovative financial instruments, as well as non-technological
and social innovation, and aims to satisfy the research needs of a broad
spectrum of Union policies by placing emphasis on the widest possible use and
dissemination of knowledge generated by the supported activities up to its
commercial exploitation. The priorities of Horizon 2020 should also be supported
through a programme under the Euratom Treaty on nuclear research and training. 
(12)          
The Joint Research Centre (JRC) should provide
customer-driven scientific and technical support to Union policies while
flexibly responding to new policy demands.
(13)          
In the context of the knowledge triangle of
research, education and innovation, the Knowledge and Innovation Communities
under the European Institute of Innovation and Technology should strongly
contribute to addressing the objectives of Horizon 2020, including the societal
challenges, notably by integrating research, education and innovation. In order
to ensure complementarities across Horizon 2020 and the adequate absorption of
funds, the financial contribution to the European Institute of Innovation and
Technology should be made in two allocations, with the second subject to a
review.
(14)          
Horizon 2020 should contribute to the aims of
the European Innovation Partnerships in line with the flagship initiative
Innovation Union, bringing together all relevant actors across the whole
research and innovation chain in view of streamlining, simplifying and better
coordinating instruments and initiatives.
(15)          
Simplification is a central aim of Horizon 2020
which should be fully reflected in its design, rules, financial management and
implementation. Horizon 2020 should aim to attract the strong participation of
universities, research centres, industry and specifically SMEs and be open to
new participants, as it brings together the full range of research and
innovation support in one common strategic framework, including a streamlined
set of forms of support and uses rules for participation with principles
applicable to all actions under the programme. Simpler funding rules should
reduce the administrative costs for participation and will contribute to a
reduction of financial errors. 
(16)          
In accordance with Article 182(1) TFEU, the
framework programme fixes the maximum overall amount and the detailed rules for
Union financial participation in the framework programme and the respective shares
in each of the activities provided for.
(17)          
This Regulation should lay down, for the entire
duration of Horizon 2020, a financial envelope constituting the prime
reference, within the meaning of point [] of the Interinstitutional Agreement
of XX/201Z between the European Parliament, the Council and the Commission on
cooperation in budgetary matters and on sound financial management, for the
budgetary authority during the annual budgetary procedure.
(18)          
It is appropriate to ensure a correct closure of
Horizon 2020 and its predecessor programmes, in particular regarding the
continuation of multi-annual arrangements for their management, such as the
financing of technical and administrative assistance. 
(19)          
The implementation of Horizon 2020 may give rise
to supplementary programmes involving the participation of certain Member
States only, the participation of the Union in programmes undertaken by several
Member States, or the setting up of joint undertakings or other arrangements
within the meaning of Articles 184, 185 and 187 TFEU. 
(20)          
With the aim of deepening the relationship
between science and society and reinforcing public confidence in science,
Horizon 2020 should favour an informed engagement of citizens and civil society
on research and innovation matters by promoting science education, by making
scientific knowledge more accessible, by developing responsible research and
innovation agendas that meet citizens' and civil society's concerns and
expectations and by facilitating their participation in Horizon 2020
activities. 
(21)          
The implementation of Horizon 2020 should
respond to the evolving opportunities and needs from science and technology,
industry, policies and society. As such, the agendas should be set in close
liaison with stakeholders from all sectors concerned, and sufficient
flexibility should be allowed for new developments. External advice should be
sought on a continuous basis during Horizon 2020, also making use of relevant
structures such as European Technology Platforms, Joint Programming Initiatives
and the European Innovation Partnerships.
(22)          
Horizon 2020 should
contribute to the attractiveness of the research profession in the Union.
Adequate attention should be paid to the European Charter for Researchers and
Code of Conduct for the Recruitment of Researchers[14],
together with other relevant reference frameworks defined in the context of the
European Research Area, while respecting their voluntary nature. 
(23)          
The activities developed under Horizon 2020
should aim at promoting equality between men and women in research and
innovation, by addressing in particular the underlying causes of gender
imbalance, by exploiting the full potential of both female and male
researchers, and by integrating the gender dimension into the content of
projects in order to improve the quality of research and stimulate innovation. Activities
should also aim at the implementation of the principles relating to the
equality between women and men as laid down in Articles 2 and 3 of the Treaty
on European Union and Article 8 TFEU.
(24)          
Research and innovation activities supported by
Horizon 2020 should respect fundamental ethical principles. The opinions of the
European Group on Ethics in Science and New Technologies should be taken into
account. Research activities should also take into account Article 13 TFEU and
reduce the use of animals in research and testing, with a view ultimately to
replacing animal use. All activities should be carried
out ensuring a high level of human health protection in
accordance with Article 168 TFEU.
(25)          
The European Commission does not explicitly
solicit the use of human embryonic stem cells. The use of human stem cells, be
they adult or embryonic, if any, depends on the judgement of the scientists in
view of the objectives they want to achieve and is subject to stringent Ethics
Review. No project involving the use of human embryonic stem cells should be
funded that does not obtain the necessary approvals from the Member States. No
activity should be funded that is forbidden in all Member States. No activity should
be funded in a Member State where such activity is forbidden.
(26)          
To achieve maximum impact, Horizon 2020 should
develop close synergies with other Union programmes in areas such as education,
space, environment, competitiveness and SMEs, the internal security, culture
and media and with the Cohesion Policy funds and Rural Development Policy,
which can specifically help to strengthen national and regional research and
innovation capabilities in the context of smart specialisation strategies.
(27)          
SMEs constitute a significant source of
innovation and growth in Europe. Therefore a strong participation of SMEs, as
defined in Commission Recommendation 2003/361/EC of 6 May 2003[15],
is needed in Horizon 2020. This should support the aims of the Small Business
Act[16]. 
(28)          
With the aim to achieve the greatest possible
impact of Union funding, Horizon 2020 is to develop closer synergies, which may
also take the form of public-public partnerships, with national and regional
programmes that support research and innovation. 
(29)          
A greater impact should also be achieved by
combining Horizon 2020 and private sector funds within public-private
partnerships in key areas where research and innovation could contribute to
Europe's wider competitiveness goals and help tackle societal challenges. The public-private
partnerships in the form of Joint Technology Initiatives launched under Decision
No 1982/2006/EC of the European Parliament and of the Council of 18 December
2006 concerning the Seventh Framework programme of the European Community for
research, technological development and demonstration activities (2007-13)[17]
may be continued using more fit-for-purpose structures.
(30)          
Horizon 2020 should promote cooperation with
third countries based on common interest and mutual benefit. International
cooperation in science, technology and innovation should be targeted to
contribute to achieving the Europe 2020 objectives to strengthen
competitiveness, contribute to tackling societal challenges and support Union
external and development policies, including by developing synergies with
external programmes and contributing to the Union's international commitments
such as the achievement of Millennium Development Goals.
(31)          
In order to maintain a level playing field for
all undertakings active in the internal market, funding provided by Horizon
2020 should be designed in accordance with state aid rules so as to ensure the
effectiveness of public spending and prevent market distortions such as
crowding-out of private funding, creating ineffective market structures or
preserving inefficient firms.
(32)          
The need for a new approach to control and risk
management in Union research funding was recognised by the European Council of
4 February 2011, asking for a new balance between trust and control and between
risk-taking and risk avoidance. The European Parliament, in its Resolution of
11 November 2010 on simplifying the implementation of the Research Framework
Programmes, called for a pragmatic shift towards administrative and financial
simplification and states that the management of European research funding
should be more trust-based and risk-tolerant towards participants. The interim
evaluation report of the Seventh Framework Programme for Research (2007-2013)
concludes that a more radical approach is needed to attain a quantum leap in
simplification, and that the risk-trust balance needs to be redressed.
(33)          
The financial interests of the Union should be
protected through proportionate measures throughout the expenditure cycle,
including the prevention, detection and investigation of irregularities, the
recovery of funds lost, wrongly paid or incorrectly used and, where
appropriate, penalties. A revised control strategy, shifting focus from
minimisation of error rates towards risk-based control and fraud detection,
should reduce the control burden for participants. 
(34)          
It is important to ensure sound financial
management of Horizon 2020 and its implementation in the most effective and
user-friendly manner possible, while also ensuring legal certainty and the
accessibility of the programme to all participants. It is necessary to ensure
compliance with Regulation (EU) No XXXX/2012 [new financial regulation] and
with the requirements of simplification and better regulation. 
(35)          
Effective performance management, including
evaluation and monitoring, requires development of specific performance
indicators which can be measured over time; are both realistic and reflect the
logic of the intervention; and relevant to the appropriate hierarchy of
objectives and activities. Appropriate coordination mechanisms should be put in
place between the implementation and monitoring of Horizon 2020, and the
monitoring of progress, achievements and functioning of the ERA. 
(36)          
Since the objectives of Horizon 2020 cannot be
sufficiently achieved by Member States in strengthening the overall research
and innovation framework and coordinating efforts across the Union, and can
therefore, by reason of avoiding duplication, retaining critical mass in key
areas and ensuring public financing is used in an optimal way, be better
achieved at Union level, the Union may adopt measures, in accordance with the
principle of subsidiarity as set out in Article 5 of the Treaty on European
Union. In accordance with the principle of proportionality, as set out in that
Article, Horizon 2020 does not go beyond what is necessary in order to achieve
those objectives.
(37)          
For reasons of legal certainty and clarity,
Decision No 1982/2006/EC should be repealed, 
HAVE ADOPTED THIS REGULATION:
TITLE I
ESTABLISHMENT
Article 1
Subject matter 
This Regulation establishes Horizon 2020 -
the Framework Programme for Research and Innovation (2014-2020) ("Horizon
2020") and determines the framework governing Union support to research
and innovation activities and fostering better exploitation of the industrial
potential of policies of innovation, research and technological development.
Article 2
Definitions
For the purposes of this Regulation the
following definitions apply:
(a)                   
'research and innovation activities'
means the whole spectrum of activities of research, technological development,
demonstration and innovation, including the promotion of cooperation with third
countries and international organisations, dissemination and optimisation of
results and stimulation of the training and mobility of researchers in the
Union;
(b)                   
'direct actions'
mean research and innovation activities undertaken by the Commission through
its Joint Research Centre;
(c)                   
'indirect actions' mean research and innovation activities to which the Union
provides financial support and which are undertaken by participants;
(d)                   
'public-private partnership' means a
partnership where private sector partners, the Union and, where appropriate,
other partners, commit to jointly support the development and implementation of
a research and innovation programme or activities ;
(e)                   
'public-public partnership' means a
partnership where public sector bodies or bodies with a public service mission
at regional, national or international level commit with the Union to jointly
support the development and implementation of a research and innovation
programme or activities.
Article 3
Establishment of Horizon 2020
Horizon 2020 is hereby established for
the period from 1 January 2014 to 31 December 2020.
Article 4
Union added value
Horizon 2020 shall play a central role in
the delivery of the Europe 2020 strategy for smart, sustainable and inclusive
growth by providing a common strategic framework for the Union's research and
innovation funding, thus acting as a vehicle for leveraging private investment,
creating new job opportunities and ensuring Europe's long-term sustainable
growth and competitiveness. 
Article 5
General objective, priorities and specific objectives 
1.           Horizon 2020 shall
contribute to building an economy based on knowledge and innovation across the
whole Union by leveraging sufficient additional research, development and
innovation funding. Thereby, it shall support the implementation of the Europe
2020 strategy and other Union policies, as well as the achievement and
functioning of the European Research Area (ERA). The relevant performance
indicators are set out in the introduction of Annex I.
2.           This general objective
shall be pursued through three mutually reinforcing priorities dedicated to:
(a)         
excellent science; 
(b)         
industrial leadership;
(c)         
societal challenges.
The specific objectives corresponding to each
of those three priorities are set out in Parts I to III of Annex I, together
with the broad lines of the activities. 
3            The Joint Research Centre
shall contribute to the general objective and priorities set out in paragraphs
1 and 2 by providing scientific and technical support to Union policies. The
broad lines of the activities are set out in Part IV of Annex I. 
4.           The European Institute of
Innovation and Technology (EIT) set up by Regulation (EU) No 294/2008 of
the European Parliament and of the Council[18] shall
contribute to the general objective and priorities set out in paragraphs 1 and
2 with the specific objective of integrating the knowledge triangle of
research, innovation and education. The relevant performance indicators for the
European Institute of Innovation and Technology are set out in the introduction
of Annex I and the broad lines of that specific objective and the activities
are set out in Part V of Annex I.
5.           Within the priorities and
broad lines referred to in paragraph 2, account may be taken of new and
unforeseen needs that arise during the period of implementation of Horizon
2020. This may include responses to emerging opportunities, crises and threats,
to needs relating to the development of new Union policies, and to the piloting
of actions foreseen for support under future programmes.
Article 6 
Budget
1.           The financial envelope for
the implementation of Horizon 2020 shall be EUR 87740 million, of which a
maximum of EUR 86198 million shall be allocated to activities under Title XIX
of the Treaty on the Functioning of the European Union (TFEU). 
2.           The amount for activities
under Title XIX TFEU shall be distributed among the priorities set out in
Article 5(2) as follows:
(a)         
Excellent science, EUR 27818 million;
(b)         
Industrial leadership, EUR 20280 million;
(c)         
Societal challenges, EUR 35888 million.
The maximum overall amount for the Union
financial contribution from Horizon 2020 to the non-nuclear direct actions of
the Joint Research Centre shall be EUR 2212 million.
The indicative breakdown for the specific
objectives within the priorities and the maximum overall amount of the
contribution to the non-nuclear direct actions of the Joint Research Centre are
set out in Annex II. 
3.           The European Institute of
Innovation and Technology shall be financed through a maximum contribution from
Horizon 2020 of EUR 3194 million as set out in Annex II. A first allocation of
EUR 1542 million shall be provided to the European Institute of Innovation and
Technology for activities under Title XVII of the Treaty on the Functioning of
the European Union. A second allocation of up to EUR 1652 million shall be
provided, subject to the review set out in Article 26 (1). This additional
amount shall be provided on a pro-rata basis, as indicated in Annex II, from
the amount for the specific objective "Leadership in enabling and
industrial technologies" within the priority on industrial leadership set
out in paragraph 2(b) and from the amount for the priority on societal
challenges set out in 2(c).
This funding in two multiannual allocations shall
cover: 
(a)         
in the first allocation, the ongoing
developments of the current Knowledge and Innovation Communities (hereinafter
KICs) and seed money for the launch of the second wave of three new KICs
(b)         
in the second allocation, the ongoing
developments of the KICs already launched and the seed money for the launch of
the third wave of three new KICs
The second allocation shall be made available
following the review set out in Article 26(1) taking into account in
particular: 
(a)         
the agreed timing of the creation of the third
wave of KICs; 
(b)         
the programmed financial needs of the existing
ones according to their specific development;
(c)         
the contribution of the European Institute of
Innovation and Technology and its KICs to the Horizon 2020 objectives.
4.           The financial envelope of
Horizon 2020 may cover expenses pertaining to preparatory, monitoring, control,
audit and evaluation activities which are required for the management of
Horizon 2020 and the achievement of its objectives, in particular studies and
meetings of experts, as far as they are related to the objectives of Horizon
2020, expenses linked to information technology networks focusing on
information processing and exchange, together with all other technical and
administrative assistance expenses incurred by the Commission for the management
of Horizon 2020. 
Where necessary, appropriations may be entered
in the budget beyond 2020 to cover technical and administrative assistance
expenses, in order to enable the management of actions not yet completed by 31
December 2020.
5.           In order to respond to
unforeseen situations or new developments and needs, and to take into account
the provisions of paragraph 3 of this article, the Commission may, following
the interim evaluation of Horizon 2020 as referred to in Article 26(1)(a) of
this Regulation, within the annual budgetary procedure review the amounts set
out for the priorities in paragraph 2 and the indicative breakdown by specific
objectives within these priorities set out in Annex II and transfer
appropriations between the priorities and specific objectives up to 10 % of the
total initial allocation of each priority and up to 10 % of the initial
indicative breakdown of each specific objective. This does not concern the
amount set out for the direct actions of the Joint Research Centre in paragraph
2 or the contribution to the European Institute of Innovation and Technology
set out in paragraph 3. 
Article 7
Association of third countries
1            Horizon 2020 shall be open
to the association of:
(a)         
acceding countries, candidate countries and potential
candidates, in accordance with the general principles and general terms and
conditions for the participation of those countries in Union programmes
established in the respective framework agreements and decisions of association
councils or similar agreements;
(b)         
selected third countries that fulfil all of the
following criteria: 
(i)      have a good capacity in science,
technology and innovation;
(ii)      have a good track record of
participation in Union research and innovation programmes; 
(iii)     have close economic and geographical
links to the Union; 
(iv)     are European Free Trade Association
(EFTA) members or countries or territories listed in the Annex to Regulation
(EU) No XX/2012 of the European Parliament and the Council establishing a
European Neighbourhood Instrument[19]. 
2.           Specific terms and
conditions regarding the participation of associated countries in Horizon 2020,
including the financial contribution, based on the gross domestic product of
the associated country shall be determined by international agreements between
the Union and the associated countries. 
TITLE II
IMPLEMENTATION
CHAPTER I
 IMPLEMENTATION, MANAGEMENT AND FORMS OF SUPPORT
Article 8
Implementation by means of a specific programme and the contribution to the European Institute of Innovation
and Technology
Horizon 2020 shall be implemented through a
consolidated specific programme and a financial contribution to the European
Institute of Innovation and Technology.
The specific programme shall set out one Part
for each of the three priorities set out in Article 5(2) and one Part for the
non-nuclear direct actions of the Joint Research Centre.
Article 9
Management 
1.           Horizon 2020 shall be
implemented by the Commission in accordance with Regulation (EU) No XXXX/2012 [New Financial Regulation].
2.           The Commission may also entrust part of the implementation
of Horizon 2020 to the funding bodies referred to in Article [55(1)(b)] of
Regulation (EU) No XXXX/2012 [New
Financial Regulation].
Article 10
Forms of Union support
1.           Horizon 2020 shall support
indirect actions through one or several of the forms
of funding provided for by Regulation (EU) No XX/2012 [New Financial Regulation] in particular grants, prizes, procurement and financial
instruments.
2.           Horizon 2020 shall also
support direct actions undertaken by the Joint Research Centre.
3.           Where the Joint Research Centre
direct actions contribute to initiatives established under Article 185 or
Article 187 TFEU, this contribution shall not be considered as part of the financial
contribution allocated to these initiatives.
Article 11
Rules for participation and dissemination of results
The rules for participation and dissemination
of results laid down in Regulation (EU) No XX/2012 [Rules for participation and
dissemination] shall apply to indirect actions. 
CHAPTER II
PROGRAMMING
SECTION I
GENERAL PRINCIPLES
Article 12
External advice and societal engagement
1.           For the implementation of
Horizon 2020, account shall be taken of advice and inputs provided by: advisory
groups of independent, high level experts set up by the Commission; dialogue
structures created under international science and technology agreements;
forward looking activities; targeted public consultations; and transparent and
interactive processes that ensure responsible research and innovation is
supported.
2.           Full account shall also be
taken of relevant aspects of the research and innovation agendas established by
European Technology Platforms, Joint Programming Initiatives and European
Innovation Partnerships.
Article 13
Cross-cutting actions 
1.           Linkages and interfaces
shall be implemented across and within the priorities of Horizon 2020.
Particular attention shall be paid in this respect to the development and
application of key enabling and industrial technologies, to bridging from
discovery to market application, to cross-disciplinary research and innovation,
to social and economic sciences and humanities, to fostering the functioning
and achievement of the ERA, to cooperation with third countries, to responsible
research and innovation including gender, and to enhancing the
attractiveness of the research profession and to facilitating cross-border and
cross-sector mobility of researchers.
2.           Where an indirect action is
supported which is of high relevance to several of the priorities set out in Article
5(2) or to several specific objectives within those priorities, the financial amount
for that action may be combined from the amounts allocated to respectively each
priority or specific objective concerned.
Article 14
Evolving nature of science, technology, innovation, markets and society
Horizon 2020 shall be implemented in a
manner ensuring that the priorities and actions supported are relevant to
changing needs and take account of the evolving nature of science, technology,
innovation, markets and society, where innovation includes business,
organisational and social aspects.
Article 15
Gender equality 
Horizon 2020 shall ensure the effective promotion
of gender equality and the gender dimension in research and innovation content.

Article 16
Ethical principles
1.           All the research and
innovation activities carried out under Horizon 2020 shall comply with ethical
principles and relevant national, Union and international legislation, including
the Charter of Fundamental Rights of the European Union and the European
Convention on Human Rights and its Supplementary Protocols. 
Particular attention shall be paid to the
principle of proportionality, the right to privacy, the right to the protection
of personal data, the right to the physical and mental integrity of a person,
the right to non-discrimination and the need to ensure high levels of human
health protection.
2.           Research and innovation
activities carried out under Horizon 2020 shall have an exclusive focus on
civil applications.
3.           The following fields of
research shall not be financed:
(a)         
research activity aiming at human cloning for
reproductive purposes;
(b)         
research activity intended to modify the genetic
heritage of human beings which could make such changes heritable;
(c)         
research activities intended to create human
embryos solely for the purpose of research or for the purpose of stem cell
procurement, including by means of somatic cell nuclear transfer.
4.           Research on human stem
cells, both adult and embryonic, may be financed, depending both on the
contents of the scientific proposal and the legal framework of the Member
States involved. No funding shall be granted for
research activities that are prohibited in all the Member States. No
activity shall be funded in a Member State where such activity is
forbidden.
5.           The fields of research set
out in paragraph 3 may be reviewed within the context of the interim evaluation
set out in Article 26(1) in the light of scientific advances. 
Article 17
Complementarity with other Union programmes
Horizon 2020 shall be implemented in a way
which is complementary to other Union funding programmes, including the Structural
Funds.
SECTION II
SPECIFIC FIELDS OF ACTION
Article 18
Small and medium-sized enterprises 
1.           Particular attention shall
be paid to ensuring the adequate participation of, and innovation impact on,
small and medium-sized enterprises (SME) in Horizon 2020. Quantitative and
qualitative assessments of SME participation shall be undertaken as part of the
evaluation and monitoring arrangements. 
2.           Specific actions shall be
undertaken within the specific objective "Leadership in enabling and
industrial technologies" set out in Point 1 of Part II of Annex I and each
of the specific objectives under the priority "Societal challenges"
set out in Points 1 to 6 of Part III of Annex I. These specific actions shall
take the form of a dedicated SME instrument that is targeted at all types of
SMEs with an innovation potential and shall be implemented in a consistent
manner and tailored to the needs of SMEs as set out under the specific
objective "Innovation in SMEs" in Point 3.3.(a) of Part II of Annex
I.
3.           The integrated approach
set out in paragraphs 1 and 2 is expected to lead to around 15% of the total
combined budget for the specific objective on "Leadership in enabling and
industrial technologies" and the priority "Societal challenges"
going to SMEs.
Article 19
Public-private partnerships 
1.           Horizon 2020 may be
implemented through public-private partnerships where all the partners
concerned commit to support the development and implementation of research and
innovation activities of strategic importance to the Union's competitiveness
and industrial leadership or to address specific societal challenges. 
2.           Involvement of the Union
in those partnerships may take one of the following forms: 
(a)         
financial contributions from the Union to joint
undertakings established on the basis of Article 187 TFEU under the Seventh Framework
Programme, subject to the amendment of their basic acts; to new public-private
partnerships set up on the basis of Article 187 TFEU; and to other funding
bodies referred to in Article [55(1)(b)(v) or (vii)] of Regulation (EU) No
XX/2012 [New Financial Regulation]. This form of partnerships shall only be
implemented where the scope of the objectives pursued and the scale of the
resources required justify it; 
(b)         
entering a contractual agreement between the
partners referred to in paragraph 1, which specifies the objectives of the
partnership, respective commitments of the partners, key performance
indicators, and outputs to be delivered including the identification of research
and innovation activities that require support from Horizon 2020. 
3.           Public-private partnerships
shall be identified in an open and transparent way based on all of the
following criteria:
(a)         
the added value of action at Union level; 
(b)         
the scale of impact on industrial
competitiveness, sustainable growth and socio-economic issues;
(c)         
the long-term commitment from all partners based
on a shared vision and clearly defined objectives;
(d)         
the scale of the resources involved and the
ability to leverage additional investments in research and innovation;
(e)         
a clear definition of roles for each of the
partners and agreed key performance indicators over the period chosen.
Article 20
Public-public partnerships
1.           Horizon 2020 shall contribute
to the strengthening of public-public partnerships where actions at regional,
national or international level are jointly implemented within the Union. 
Particular attention shall be paid to joint programming
initiatives between Member States.
2.           Public-public partnerships
may be supported either within, or across, the priorities set out in Article 5(2),
in particular through: 
(a)         
an ERA-NET instrument using grants to support
public-public partnerships in their preparation, establishment of networking
structures, design, implementation and coordination of joint activities as well
as topping up of individual joint calls and of actions of a transnational
nature; 
(b)         
Union participation in programmes undertaken by
several Member States in accordance with Article 185 TFEU. 
For the purposes of point (a), top-up funding shall
be conditional on a significant level of prior financial commitments of the
participating entities to the joint calls and actions. The ERA-NET instrument
may include an objective to harmonise rules and implementation modalities of
the joint calls and actions. It may also be used in order to prepare for an
initiative pursuant to Article 185 TFEU.
For the purposes of point (b) such initiatives
shall only be proposed in cases where there is a need for a dedicated
implementation structure and where there is a high level of commitment of the
participating countries to integration at scientific, management and financial
levels. In addition, proposals for initiatives referred to in point (b) shall
be identified on the basis of all of the following criteria:
(a)         
a clear definition of the objective to be
pursued and its relevance to the objectives of Horizon 2020 and broader Union
policy objectives;
(b)         
clear financial commitments of the participating
countries, including prior commitments to pool national and/or regional
investments for transnational research and innovation;
(c)         
the added value of action at Union level;
(d)         
the critical mass, with regard to the size and the
number of programmes involved, the similarity of activities and the share of
relevant research they cover;
(e)         
the efficiency of Article 185 TFEU as the most
appropriate means for achieving the objectives.
Article 21
International cooperation with third countries and international organisations
1.           Entities established in third
countries and international organisations shall be eligible to participate in
indirect actions of Horizon 2020 under the conditions set out in Regulation (EU)
XX/XX [Rules for Participation]. International cooperation with third countries
and international organisations shall be promoted across and within Horizon
2020 to achieve, in particular, the following objectives:
(a)         
strengthening the Union’s excellence and
attractiveness in research and innovation as well as its economic and
industrial competitiveness;
(b)         
tackling effectively global societal challenges;

(c)         
supporting the Union's external and development policy
objectives, complementing external and development programmes. 
2.           Targeted actions with the
objective of promoting cooperation with specific third countries or groups of
third countries shall be implemented on the basis of common interest and mutual
benefit, taking into account their scientific and technological capabilities
and market opportunities, and the expected impact. 
Reciprocal access to third country programmes
should be encouraged. In order to maximise impact, coordination and synergies
with initiatives of Member States and associated countries shall be promoted. 
Cooperation priorities shall take into account
developments in Union policy and opportunities for cooperation with third
countries, as well as possible deficiencies in third country intellectual
property systems.
3.           In addition, horizontal
and cross-cutting activities to promote the strategic development of
international cooperation shall be implemented under Horizon 2020 under the
specific objective "Inclusive, innovative and secure societies" set
out in Point 6.3.2(d) of Part III of Annex I.
Article 22
Information, communication and dissemination
The European Commission shall implement
information and communication actions concerning Horizon 2020, including
communication measures concerning supported projects and results. Budget
allocated to communication under Horizon 2020 shall also contribute to covering
the corporate communication of the Union's political
priorities as far as they are related to the general objective of this
Regulation.
Activities to disseminate information and
carry out communication activities shall be an integral task under all of the
actions supported by Horizon 2020. 
In addition, the following specific actions
shall be supported:
(a)                   
initiatives aimed at widening awareness and
facilitating access to funding under Horizon 2020, in particular for those
regions or types of participant that are underrepresented;
(b)                   
targeted assistance to projects and consortia to
provide them with access to the necessary skills to optimise the communication
and dissemination of results;
(c)                   
actions which bring together results from a
range of projects, including those that may be funded from other sources, to
provide user-friendly databases and reports that summarise key findings; 
(d)                   
dissemination to policy makers, including
standardisation bodies, to promote the use of policy relevant results by the
appropriate bodies at international, Union, national and regional level; 
(e)                   
initiatives to foster dialogue and debate on
scientific, technological and innovation related issues with the public, and to
take advantage of social media and other innovative technologies and
methodologies;
CHAPTER III
CONTROL
Article 23
Control and audit
1.           The control system set up
for the implementation of this Regulation shall be designed so as to provide
reasonable assurance of achieving adequate management of the risks relating to
the effectiveness and efficiency of the operations as well as the legality and
regularity of the underlying transactions, taking into account the multi-annual
character of programmes as well as the nature of the payments concerned.
2.           The control system shall
ensure an appropriate balance between trust and control, taking into account
administrative and other costs of controls at all levels, so that the
objectives of Horizon 2020 can be achieved and the most excellent researchers
and the most innovative enterprises can be attracted to it.
3.           As part of the control
system, the audit strategy for expenditure on indirect actions under Horizon
2020 shall be based on the financial audit of a representative sample of
expenditure across the whole framework programme. This representative sample shall
be complemented by a selection based on an assessment of the risks related to
expenditure.
Audits of expenditure on indirect actions under
Horizon 2020 shall be carried out in a coherent manner in accordance with the
principles of economy, efficiency and effectiveness in order to minimize the
audit burden of the participants.
Article 24
Protection of the financial interests of the Union 
1.           The Commission shall take
appropriate measures ensuring that, when actions financed under this Regulation
are implemented, the financial interests of the Union are protected by the
application of preventive measures against fraud, corruption and any other
illegal activities, by effective checks and, if irregularities are detected, by
the recovery of the amounts wrongly paid and, where appropriate, by effective,
proportionate and deterrent penalties.
2.           The Commission or its
representatives and the Court of Auditors shall have the power of audit, on the
basis of documents and on-the-spot checks and inspections, over all grant beneficiaries,
contractors, subcontractors and other third parties who have received Union
funds under Horizon 2020.
Without prejudice to paragraph 3, audits by the
Commission may be carried out up to four years after the final payment.
3.           The European Anti-Fraud
Office (OLAF) may carry out on-the-spot checks and inspections on economic
operators concerned directly or indirectly by such funding in accordance with
the procedures laid down in Council Regulation (Euratom, EC) No 2185/96[20]
with a view to establishing whether there has been fraud, corruption or any
other illegal activity affecting the financial interests of the Union in
connection with a grant agreement or grant decision or a contract concerning
Union funding.
4.           Without prejudice to
paragraphs 1, 2 and 3, cooperation agreements with third countries and international
organisations and grant agreements and grant decisions and contracts resulting
from the implementation of this Regulation shall expressly empower the
Commission, the Court of Auditors and the OLAF to conduct such audits,
on-the-spot checks and inspections.
CHAPTER IV
MONITORING AND EVALUATION
Article 25
Monitoring
1.           The Commission shall annually monitor the implementation of Horizon
2020, its specific programme and the activities of the European Institute of
Innovation and Technology. This shall include information on cross-cutting
topics such as sustainability and climate change, including information
on the amount of climate related expenditure.
2.           The Commission shall
report and disseminate the results of that monitoring.
Article 26
Evaluation
1.           Evaluations shall be carried out in a sufficiently timely manner to
feed into the decision-making process.
(a)         
Not later than end 2017, the Commission shall
carry out, with the assistance of independent experts, a review of the European
Institute of Innovation and Technology. The second allocation of funds to the
European Institute of Innovation and Technology as set out in Article 6(3)
shall be made available following this review. The review shall assess the
progress of the European Institute of Innovation and Technology against all of
the following:
(i)      the level of consumption of the first
allocation of funds set out in Article 6(3), differentiating between the amount
of money used for the development of the first wave of KICs and the effect of
the seed money for the second phase, and the ability of the European Institute
of Innovation and Technology to attract funds from the partners in the
Knowledge and Innovation Communities and from the private sector, as set out in
Regulation XX/2012 [revised EIT Regulation]; 
(ii)      the agreed timing for the creation
of the third wave of Knowledge and Innovation Communities and the programmed
financial needs of existing ones according to their specific development; and
(iii)     the contribution of the European
Institute of Innovation and Technologies and the Knowledge and Innovation
Communities to the priority on societal challenges and the specific objective
on "leadership in enabling and industrial technologies" of the
programme Horizon 2020.
(b)         
Not later than end 2017, and taking into account
the ex-post evaluation of the Seventh Framework Programme to be completed by
the end of 2015 and the review of the European Institute of Innovation and
Technology, the Commission shall carry out, with the assistance of independent
experts, an interim evaluation of Horizon 2020, its specific programme,
including the European Research Council, and the activities of the European
Institute of Innovation and Technology, on the achievements (at the level of
results and progress towards impacts) of the objectives of Horizon 2020 and
continued relevance of all the measures, the efficiency and use of resources,
the scope for further simplification, and Union added value. That evaluation
shall also take into consideration aspects relating to access to funding
opportunities for participants in all regions, for SMEs and for promoting
gender balance. That evaluation shall additionally take into account the
contribution of the measures to the Union priorities of smart, sustainable and
inclusive growth and results on the long-term impact of the predecessor
measures. 
(c)         
Not later than end 2023, the Commission shall
carry out, with the assistance of independent experts, an ex-post evaluation of
Horizon 2020, its specific programme and the activities of the European
Institute of Innovation and Technology. This shall cover the rationale, implementation and achievements, as well as the
longer-term impacts and sustainability of the measures, to feed into a decision
on a possible renewal, modification or suspension of a subsequent measure.
2.           The performance indicators
for the general objectives and for the European Institute of Innovation and
Technology, as set out in the introduction of Annex I to this Regulation, and
for the specific objectives as established in the specific programme, including
relevant baselines, shall provide the minimum basis for assessing the extent to
which the objectives of Horizon 2020 have been achieved. 
3.           Member States shall
provide the Commission with data and information necessary to permit the
monitoring and evaluation of the measures concerned.
4.           The Commission shall communicate
the conclusions of those evaluations of Horizon 2020, accompanied by its
observations, to the European Parliament, the Council, the European Economic
and Social Committee and the Committee of the Regions.
TITLE III
FINAL PROVISIONS
Article 27
Repeal and transitional provisions
1.           Decision No 1982/2006/EC is
repealed with effect from 1 January 2014. 
2.           However,
actions initiated under Decision No 1982/2006/EC and financial
obligations related to those actions shall continue to be governed by that
Decision until their completion.
3.           The financial allocation referred
to in Article 6 may also cover the technical and administrative assistance
expenses necessary to ensure the transition between this programme and the
measures adopted under Decision
No 1982/2006/EC.
Article 28
This Regulation shall enter into force on
the third day following that of its publication in the Official Journal of
the European Union.
This Regulation shall be binding
in its entirety and directly applicable in all Member States.
Done at Brussels,
For the European Parliament                       For
the Council
The President                                                 The
President
ANNEX I
Broad lines of the specific objectives and activities
Horizon 2020 has the general objective to
build an economy based on knowledge and innovation across the whole Union,
while contributing to sustainable development. It will support the Europe 2020
strategy and other Union policies as well as the achievement and functioning of
the European Research Area. 
The performance indicators for assessing
progress against this general objective are:
–                        
the Europe 2020 R&D target (3 % of GDP);
–                        
the Europe 2020 innovation headline indicator.
This general objective shall be pursued
through three distinct, yet mutually reinforcing, priorities, each containing a
set of specific objectives. They will be implemented in a seamless manner in
order to foster interactions between the different specific objectives, avoid
any duplication of effort and reinforce their combined impact.
The Joint Research Centre shall contribute to
the general objective and priorities of Horizon 2020 with the specific
objective of providing customer-driven scientific and technical support to Union
policies.
The European Institute of Innovation and
Technology (EIT) shall contribute to the general objective and priorities of
Horizon 2020 with the specific objective of integrating the knowledge triangle
of research, innovation and education. The indicators for assessing the
performance of the EIT are:
–                        
organisations from universities, business and
research integrated in the Knowledge and Innovation Communities;
–                        
collaboration inside the knowledge triangle
leading to the development of innovative products and processes.
This Annex sets out the broad lines of
those specific objectives and activities referred to in Article 5(2), (3) and
(4).
Part I. Priority 'Excellent science'
This Part aims to
reinforce and extend the excellence of the Union’s science base and to consolidate
the European Research Area in order to make the Union’s research and innovation
system more competitive on a global scale. It consists of four specific
objectives:
(a)                   
The European Research Council (ERC) shall provide attractive and flexible funding to enable talented
and creative individual researchers and their teams to pursue the most
promising avenues at the frontier of science, on the basis of Union-wide
competition.
(b)                   
Future and emerging technologies shall support collaborative research in order to extend Europe’s
capacity for advanced and paradigm-changing innovation. It shall foster
scientific collaboration across disciplines on radically new, high-risk ideas
and accelerate development of the most promising emerging areas of science and
technology as well as the Union wide structuring of the corresponding
scientific communities.
(c)                   
Marie Curie actions shall provide excellent and innovative research training as well as
attractive career and knowledge-exchange opportunities through cross-border and
cross-sector mobility of researchers to best prepare them to face current and
future societal challenges.
(d)                   
Research infrastructure shall develop European research
infrastructure for 2020 and beyond, foster their innovation potential and human
capital, and complement this with the related Union policy and international
cooperation.
Each of these has been proven to have high Union added value.
Together, they form a powerful and balanced set of activities which, in concert
with activities at national and regional levels, span the breadth of Europe’s
needs regarding advanced science and technology. Bringing them together in a
single programme will enable them to operate with greater coherence, in a
rationalised, simplified and more focused way, while maintaining the continuity
which is vital to sustain their effectiveness.
The activities are inherently forward-looking, building skills in
the long term, focusing on the next generation of science, technology,
researchers and innovations and providing support for emerging talent from
across the whole of the Union and associated countries, as well as worldwide.
In view of their science-driven nature and largely ‘bottom-up’,
investigator-driven funding arrangements, the European scientific community
will play a strong role in determining the avenues of research followed under
the programme.
Part II. Priority 'Industrial leadership' 
This Part aims to speed up development of
the technologies and innovations that will underpin tomorrow’s businesses and
help innovative European SMEs to grow into world-leading companies. It consists
of three specific objectives:
(a)                   
Leadership in enabling and industrial
technologies shall provide dedicated support for research,
development and demonstration on ICT, nanotechnology, advanced materials,
biotechnology, advanced manufacturing and processing and space. Emphasis will
be placed on interactions and convergence across and between the different
technologies.
(b)                   
Access to risk finance shall aim to overcome deficits in the availability of debt and
equity finance for R&D and innovation-driven companies and projects at all
stages of development. Together with the equity instrument of the Programme for
the Competitiveness of Enterprises and SMEs, it shall support the development
of Union-level venture capital.
(c)                   
Innovation in SMEs shall stimulate all forms of innovation in SMEs, targeting those
with the potential to grow and internationalise across the single market and
beyond.
The activities shall follow a business-driven
agenda. The budgets for the specific objectives ‘Access to risk finance’ and ‘Innovation
in SMEs’ will follow a demand-driven, bottom-up logic, without predetermined priorities.
These shall be complemented by the use of financial instruments and a dedicated
SME instrument following a policy driven logic within the Part on 'Societal challenges'
and the specific objective ‘Leadership in enabling and industrial technologies’.

Horizon 2020 will take an integrated
approach to the participation of SMEs, which could lead to around 15 % of the
total combined budgets for all specific objectives on societal challenges and
the specific objective 'Leadership in enabling and industrial technologies'
being devoted to SMEs.
The specific objective ‘Leadership in
enabling and industrial technologies’ shall follow a technology-driven approach
to develop enabling technologies that can be used in multiple areas, industries
and services. Applications of these technologies to meet societal challenges shall
be supported together with the Societal challenges.
Part III. Priority 'Societal challenges'
This Part responds directly to the policy
priorities and societal challenges identified in the Europe 2020 strategy and
aiming to stimulate the critical mass of research and innovation efforts needed
to achieve Union's policy goals. Funding shall be focused on the following specific
objectives:
(a)                   
Health, demographic change and well-being;
(b)                   
Food security, sustainable agriculture, marine
and maritime research, and the bio-economy;
(c)                   
Secure, clean and efficient energy;
(d)                   
Smart, green and integrated transport;
(e)                   
Climate action, resource efficiency and raw
materials; 
(f)                     
Inclusive, innovative and secure societies.
All the activities shall take a challenge-based
approach, focusing on policy priorities without predetermining the precise
choice of technologies or solutions that should be developed. The emphasis shall
be on bringing together a critical mass of resources and knowledge across
different fields, technologies and scientific disciplines in order to address
the challenges. The activities shall cover the full cycle from research to
market, with a new focus on innovation-related activities, such as piloting,
demonstration, test-beds, support for public procurement, design, end-user
driven innovation, social innovation and market take-up of innovations.
Social sciences and humanities shall be an
integral part of the activities to address all the challenges. In addition, the
underpinning development of these disciplines shall be supported under the specific
objective ‘Inclusive, innovative and secure societies’. Support will also focus
on providing a strong evidence base for policy making at international, Union,
national and regional levels. Given the global nature of many of the
challenges, strategic cooperation with third countries shall be an integral
part of each challenge. In addition, cross-cutting support for international
cooperation shall be provided under the specific objective ‘Inclusive,
innovative and secure societies’.
The specific objective ‘Inclusive,
innovative and secure societies’ also includes an activity to close the
research and innovation divide with specific measures to unlock excellence in
less developed regions of the Union.
The Joint Research Centre’s activities shall
be an integral part of Horizon 2020, in order to provide robust, evidence-based
support for Union policies. This shall be driven by customer needs,
complemented by forward-looking activities.
The EIT shall play a major role by bringing
together excellent research, education and innovation thus integrating the
knowledge triangle. The EIT shall do so primarily through the Knowledge and
Innovation Communities (KICs). In addition it shall ensure that experiences are
shared beyond the KICs through targeted dissemination and knowledge sharing
measures, thereby promoting a faster uptake of innovation models across the
Union.
PART I
EXCELLENT SCIENCE 
1.           European Research Council (ERC)
1.1         Specific objective
The specific objective is to reinforce
the excellence, dynamism and creativity of European research.
Europe has set out its ambition to move to a new economic model based on smart, sustainable and
inclusive growth. This type of transformation will need more than incremental
improvements to current technologies. It will require much higher capacity for
science-based innovation fuelled by radical new knowledge, allowing Europe to
take a leading role in creating the technological paradigm shifts which will be
the key drivers of productivity growth, competitiveness, wealth and social
progress in the future. Such paradigm shifts have historically tended to
originate from the public-sector science base before going on to lay the foundations
for whole new industries and sectors.
World-leading innovation is closely
associated with excellent science. Once the undisputed leader, Europe has
fallen behind in the race to produce the very best cutting-edge science and has
played a secondary role to the United States of America in the major post-war
technological advances. Although the Union remains the largest producer of
scientific publications in the world, the United States of America produces
twice as many of the most influential papers (the top 1 % by citation
count). Similarly, international university rankings show that US universities
dominate the top places. And 70 % of the world’s Nobel Prize winners are based in the USA.
One part of the
challenge is that, while Europe and the United States of America invest similar
amounts in their public-sector science bases, the
Union has nearly three times as many public-sector researchers, resulting
in significantly lower investment per researcher. Moreover, US funding is more selective about allocating resources to
the leading researchers. This helps to explain why the Union’s public-sector
researchers are, on average, less productive and, altogether, make less
combined scientific impact than their far less numerous US counterparts.
Another major
part of the challenge is that in many European
countries the public sector still does not offer sufficiently attractive conditions
for the best researchers. It can take many years before talented young
researchers are able to become independent scientists in their own right. This
leads to a dramatic waste of Europe’s research potential by delaying the
emergence of the next generation of researchers, who bring new ideas and
energy, and by enticing excellent researchers starting their career to seek
advancement elsewhere.
Furthermore,
these factors compound Europe’s relative
unattractiveness in the global competition for scientific talent. The ability
of the US system to offer more resources per researcher and better career
prospects explains how it continues to attract the best researchers from across
the world, including tens of thousands from the Union.
1.2         Rationale and Union added
value
The ERC was created to provide Europe’s
best researchers, both women and men, with the resources they need to allow
them to compete better at global level, by funding individual teams on the
basis of pan-European competition. It operates autonomously: an independent
Scientific Council made up of scientists, engineers and scholars of the highest
repute and expertise establishes the overall scientific strategy and has full
authority over decisions on the type of research to be funded. These are
essential features of the ERC, guaranteeing the effectiveness of its scientific
programme, the quality of its operations and peer-review process and its
credibility in the scientific community.
Operating
across Europe on a competitive basis, the ERC is able to draw on a wider pool
of talents and ideas than would be possible for any national scheme. The best
researchers and the best ideas compete against each other. Applicants know they
have to perform at the highest level, the reward being flexible funding on a
level playing field, irrespective of local bottlenecks or the availability of
national funding.
Frontier
research funded by the ERC is thereby expected to have a substantial direct
impact in the form of advances at the frontiers of knowledge, opening the way
to new and often unexpected scientific and technological results and new areas
for research which, ultimately, can generate the radically new ideas which will
drive innovation and business inventiveness and tackle societal challenges. This
combination of excellent individual scientists with innovative ideas underpins every
stage of the innovation chain.
Beyond this,
the ERC has a significant structural impact by generating a powerful stimulus
for driving up the quality of the European research system as a whole, over and
above the researchers and projects which the ERC funds directly. ERC-funded
projects and researchers set a clear and inspirational target for frontier
research in Europe, raise its profile and make it more attractive for the best
researchers at global level. The prestige of hosting ERC grant-holders and the
accompanying ‘stamp of excellence’ are intensifying competition between Europe’s
universities and other research organisations to offer the most attractive
conditions for top researchers. And the ability of national systems and
individual research institutions to attract and host ERC grant-winners sets a
benchmark allowing them to assess their relative strengths and weaknesses and
reform their policies and practices accordingly. ERC funding is therefore in addition
to ongoing efforts at Union, national and regional levels to reform, build
capacity and unlock the full potential and attractiveness of the European
research system.
1.3         Broad lines of the
activities
The fundamental activity of the ERC shall
be to provide attractive long-term funding to support excellent investigators
and their research teams to pursue ground-breaking, high-gain/high-risk
research.
ERC funding shall
be awarded in accordance with the following well-established principles.
Scientific excellence shall be the sole criterion on
which ERC grants are awarded. The ERC shall operate on a ‘bottom-up’ basis
without predetermined priorities. The ERC grants shall be open to individual
teams of researchers of any age and from any country in the world, working in
Europe. And the ERC shall aim to foster healthy competition across Europe.
The ERC shall give
particular priority to assisting excellent starting researchers to make the
transition to independence by providing adequate support at the critical stage
when they are setting up or consolidating their own research team or programme.
The ERC shall also
give support, as necessary, to emerging new ways of working in the scientific
world with the potential to create breakthrough results and facilitates
exploration of the commercial and social innovation potential of the research
which it funds.
By 2020, the
ERC therefore shall aim to demonstrate: that the best researchers are
participating in the ERC’s competitions, that ERC funding has led directly to
scientific publications of the highest quality and to the commercialisation and
application of innovative technologies and ideas and that the ERC has
contributed significantly to making Europe a more attractive environment for
the world’s best scientists. In particular, the ERC shall target a measurable
improvement in the Union’s share of the world’s top 1 % most highly cited
publications. In addition it shall aim at a substantial increase in the number
of excellent researchers from outside Europe whom it funds and specific
improvements in institutional practices and national policies to support top
researchers.
The ERC’s Scientific Council shall
continuously monitor the ERC’s operations and consider how best to achieve its
objectives by means of grant schemes that emphasise clarity, stability and
simplicity, both for applicants and in their implementation and management,
and, as necessary, to respond to emerging needs. It shall endeavour to sustain
and further refine the ERC’s world-class peer-review system which is based on
transparent, fair and impartial treatment of proposals so that it can identify
ground-breaking scientific excellence and talent regardless of a researcher’s
gender, nationality or age. Finally, the ERC shall continue conducting its own
strategic studies to prepare for and support its activities, maintain close
contacts with the scientific community and other stakeholders and look to make
its activities complement research conducted at other levels.
2.           Future and Emerging Technologies (FET)
2.1.        Specific objective
The specific objective is to foster
radically new technologies by exploring novel and high-risk ideas building on
scientific foundations. By providing flexible support to goal-oriented
and interdisciplinary collaborative research on various scales and by adopting
innovative research practices, the aim is to identify and seize opportunities
of long-term benefit for citizens, the economy and society.
FET shall promote research beyond what is
known, accepted or widely adopted and shall foster novel and visionary thinking
to open promising paths towards powerful new technologies, some of which could
develop into leading technological and intellectual paradigms for the decades
ahead. FET shall foster efforts to pursue small-scale research opportunities
across all areas, including emerging themes and grand scientific and
technological (S&T) challenges that require federation and collaboration between
programmes across Europe and beyond. This approach shall be driven by
excellence and extends to exploring pre-competitive ideas for shaping the
future of technology, enabling society to benefit from multi-disciplinary
research collaboration that needs to be engaged at European level by making the
link between research driven by science and research driven by societal
challenges or by industrial competitiveness.
2.2.        Rationale and Union Added
Value
Radical breakthroughs with a transformative
impact increasingly rely on intense collaboration across disciplines in science
and technology (for instance, information and communication, biology,
chemistry, earth system sciences, material sciences, neuro- and cognitive sciences,
social sciences or economics) and with the arts and humanities. This requires
not only excellence in science and technology but also new attitudes and novel
interactions between a broad range of players in research.
While some ideas can be developed on a
small scale, others may be so challenging that they require a large federated
effort over a substantial period of time. Major economies worldwide have
recognised this, and there is growing global competition to identify and pursue
emerging technological opportunities at the frontier of science which can
generate a considerable impact on innovation and benefits for society. To be
effective, these types of activity need to be built up quickly to a large
scale, by federating across programmes at European, national and regional levels
around common goals to build critical mass, foster synergies and obtain optimum
leveraging effects.
The FET programme shall address the entire
spectrum of science-driven innovation: from bottom-up, small-scale early
explorations of embryonic and fragile ideas to building new research and
innovation communities around transformative emerging research areas and large
and federated research initiatives built around a research agenda aiming to
achieve ambitious and visionary goals. These three levels of engagement each
have their own specific value, while being complementary and synergistic. For
example, small-scale explorations can reveal needs for developing new themes
that can lead to large-scale action based on roadmaps. They involve a wide
range of research players, including young researchers and research-intensive
SMEs, and stakeholder communities (civil society, policymakers, industry and
public researchers), clustered around research agendas as they take shape,
mature and diversify.
2.3.        Broad lines of activities
While the FET programme aims to be
visionary, transformative and unconventional, its activities shall follow
different logics, from completely open to varying degrees of structuring of
topics, communities and funding.
The activities shall give firmer shape to
different logics for action, on the appropriate scale, identifying and seizing opportunities of long-term benefit for citizens, the economy and society:
(a)                   
By fostering novel ideas ('FET Open'), FET shall support embryonic science and technology research
exploring new foundations for radically new future technologies by challenging
current paradigms and venturing into unknown areas. A bottom-up selection
process widely open to any research ideas shall build up a diverse portfolio of
targeted projects. Early detection of promising new areas, developments and
trends, along with attracting new and high-potential research and innovation
players, will be key.
(b)                   
By nurturing emerging themes and communities
('FET Proactive'), FET shall address a number of
promising exploratory research themes with the potential to generate a critical
mass of inter-related projects that, together, make up a broad and
multi-faceted exploration of the themes and build a European pool of knowledge.
(c)                   
By pursuing grand interdisciplinary S&T
challenges ('FET Flagships'), FET shall support
ambitious large-scale, science-driven research aiming to achieve a scientific
breakthrough. Such activities will benefit from the alignment of European and
national agendas. The scientific advance should provide a strong and broad
basis for future technological innovation and economic application in a variety
of areas, plus novel benefits for society.
The right mix of openness and varying
degrees of structuring of topics, communities and funding shall be defined for
each activity in order to address optimally the objectives pursued.
3.           Marie Curie Actions
3.1.        Specific objective
The specific objective is to ensure
optimum development and dynamic use of Europe’s intellectual capital in order
to generate new skills and innovation and, thus, to realise its full potential
across all sectors and regions.
Well-trained, dynamic and creative
researchers are the vital raw material for the best science and the most
productive research-based innovation.
Although Europe hosts a large and
diversified pool of skilled human resources for research and innovation, this
needs to be constantly replenished, improved and adapted to the rapidly evolving
needs of the labour market. Today only 46 % of this pool works in the
business sector, which is much lower than in Europe’s main economic
competitors, e.g. 69 % in China, 73 % in Japan and 80 % in the
United States. In addition, demographic factors mean that a disproportionate
number of researchers will reach retirement age in the next few years. This,
combined with the need for many more high-quality research jobs as the research
intensity of the European economy increases, will be one of the main challenges
facing European education, research and innovation systems in the years ahead.
The necessary reform must start at the
first stages of the researchers’ careers, during their doctoral studies or
comparable post-graduate training. Europe must develop state-of-the-art,
innovative training schemes, consistent with the highly competitive and
increasingly inter-disciplinary requirements of research and innovation. Strong
involvement of businesses, including SMEs and other socio-economic actors, will
be needed to equip researchers with the innovation skills demanded by the jobs
of tomorrow. It will also be important to enhance the mobility of these
researchers, as it currently remains at too modest a level: in 2008, only 7 %
of European doctoral candidates were trained in another Member State, whereas the
target is 20 % by 2030.
This reform must continue through every
stage of researchers’ careers. It is vital to increase the mobility of
researchers at all levels, including mid-career mobility, not only between
countries but also between the public and private sectors. This creates a
strong stimulus for learning and developing new skills. It is also a key factor
in cooperation between academics, research centres and industry across
countries. The human factor is the backbone of sustainable cooperation which is
the key driver for an innovative and creative Europe able to face challenges to
society, and key to overcoming fragmentation of national policies. Collaborating
and sharing knowledge, via individual mobility at all stages of a career and
via exchanges of highly skilled research and innovation staff, are essential
for Europe to re-take the path to sustainable growth and to tackle societal
challenges.
If Europe is to match its competitors in
research and innovation, it must entice more young women and men to embark on
research careers and provide highly attractive opportunities and environments
for research and innovation. The most talented individuals, from Europe and
elsewhere, should see Europe as a pre-eminent place to work. Gender equality,
high-quality and reliable employment and working conditions plus recognition
are crucial aspects that must be secured in a consistent way across the whole
of Europe.
3.2.        Rationale and Union added
value
Neither Union funding alone nor Member
States individually will be able to address this challenge. Although Member
States have introduced reforms to improve their tertiary education institutions
and modernise their training systems, progress is still uneven across Europe,
with big differences between countries. Overall, scientific and technological
cooperation between the public and private sectors generally remains weak in
Europe. The same applies to gender equality and to the efforts to attract
students and researchers from outside the ERA. Currently around 20 % of
the doctoral candidates in the Union are citizens of third countries, whereas
about 35 % in the United States of America come from abroad. To speed up this
change, a strategic approach that goes beyond national borders is required at Union
level. Union funding is crucial to create incentives for and encourage the
indispensable structural reforms.
The European Marie Curie actions have made
remarkable progress to promote mobility, both transnational and intersectoral,
and to open research careers at European and international levels, with
excellent employment and working conditions following the European Researchers
Charter and Code. There is no equivalent in Member States as far as their scale
and scope, funding, international character, generation and transfer of
knowledge are concerned. They have strengthened the resources of those
institutions able to attract researchers internationally and thereby encouraged
the spread of centres of excellence around the Union. They have served as a
role model with a pronounced structuring effect by spreading their best
practices at national level. The bottom-up approach taken by Marie Curie actions
has also allowed a large majority of those institutions to train and upgrade
the skills of a new generation of researchers able to tackle societal challenges.
Further development of the Marie Curie actions
will make a significant contribution to development of the European Research
Area. With their Europe-wide competitive funding structure, Marie Curie actions
will encourage new, creative and innovative types of training such as
industrial doctorates, involving education, research and innovation players who
will have to compete globally for a reputation of excellence. By providing Union
funding for the best research and training programmes following the Principles
for Innovative Doctoral Training in Europe, they will also promote wider dissemination
and take-up, moving towards more structured doctoral training.
Marie Curie grants will also be extended to
the temporary mobility of experienced researchers and engineers from public
institutions to the private sector or vice versa, thereby encouraging and
supporting universities, research centres and businesses to cooperate with one
another on a European and international scale. With the aid of their well-established,
transparent and fair evaluation system, Marie Curie actions will identify
excellent talents in research and innovation in an international competition
which gives prestige and therefore motivation for researchers to advance their
career in Europe.
The societal challenges to be addressed by
highly skilled researchers and innovation staff are not just Europe’s problem.
These are international challenges of colossal complexity and magnitude. The
best researchers in Europe and the world need to work together across
countries, sectors and disciplines. Marie Curie actions will play a key role in
this respect by supporting staff exchanges that will foster collaborative
thinking via the international and intersectoral knowledge-sharing that is so
crucial for open innovation.
Extension of the co-funding mechanism of
the Marie Curie actions will be crucial to expand Europe’s pool of talents. The
numerical and structural impact of Union action will be increased by leveraging
regional, national, international and private funding to create new programmes
and to open existing ones to international and intersectoral training, mobility
and career development. Such a mechanism will forge stronger links between
research and education efforts at national and Union levels.
All the activities under this challenge
will contribute to creating a whole new mindset in Europe that is crucial for
creativity and innovation. Marie Curie funding measures will strengthen pooling
of resources in Europe and thereby lead to improvements in coordination and
governance of researchers’ training, mobility and career development. They will contribute to the policy goals outlined in
the Innovation Union, Youth on the Move and the Agenda for New Skills and Jobs
and will be vital to turn the European Research Area into reality.
3.3.        Broad lines of the
activities
(a)                   
Fostering new skills by means of excellent
initial training of researchers
The goal is to train a new generation of creative and innovative researchers,
able to convert knowledge and ideas into products and services for economic and
social benefit in the Union.
Key activities shall be to provide
excellent and innovative training to early-stage researchers at post-graduate
level via interdisciplinary projects or doctoral programmes involving
universities, research institutions, businesses, SMEs and other socio-economic groups
from different countries. This will improve career prospects for young
post-graduate researchers in both the public and private sectors.
(b)                   
Nurturing excellence by means of cross-border
and cross-sector mobility
The goal is to enhance the creative and
innovative potential of experienced researchers at all career levels by
creating opportunities for cross-border and cross-sector mobility. 
Key activities shall be to encourage
experienced researchers to broaden or deepen their skills by means of mobility
by opening attractive career opportunities in universities, research
institutions, businesses, SMEs and other socio-economic groups all over Europe
and beyond. Opportunities to restart a research career after a break shall also
be supported.
(c)                   
Stimulating innovation by means of
cross-fertilisation of knowledge
The goal is to reinforce international
cross-border and cross-sector collaboration in research and innovation by means
of exchanges of research and innovation personnel in order to be able to face
global challenges better.
Key activities shall be to support short-term
exchanges of research and innovation staff among a partnership of universities,
research institutions, businesses, SMEs and other
socio-economic groups, both within Europe and worldwide. This will include
fostering cooperation with third countries.
(d)                   
Increasing the structural impact by co-funding
the activities
The goal is, by leveraging additional
funds, to increase the numerical and structural impact of Marie Curie actions
and to foster excellence at national level in researchers’ training, mobility
and career development.
Key activities shall be, with the aid of a
co-funding mechanism, to encourage regional, national and international
organisations to create new programmes and to open existing ones to
international and intersectoral training, mobility and career development. This
will increase the quality of research training in Europe at all career stages,
including at doctoral level, will foster free circulation of researchers and
scientific knowledge in Europe, will promote attractive research careers by
offering open recruitment and attractive working conditions and will support
research and innovation cooperation between universities, research institutions
and enterprises and cooperation with third countries and international
organisations.
(e)                   
Specific support and policy action
The goals are to monitor progress, identify
gaps in the Marie Curie Actions and to increase their impact. In this context, indicators
shall be developed and data related to researchers’ mobility, skills and
careers analysed, seeking synergies and close coordination with the policy
support actions on researchers, their employers and funders carried out under
the specific objective ' Inclusive, innovative and secure societies'. The
activity shall further aim at raising awareness of the importance and
attractiveness of a research career and at disseminating research and
innovation results emanating from work supported by Marie Curie actions.
4.           Research Infrastructures
4.1         Specific objective
The specific
objective is to endow Europe with world-class research infrastructures which
are accessible to all researchers in Europe and beyond and fully exploit their
potential for scientific advance and innovation.
Research
infrastructures are key determinants of Europe’s competitiveness across the
full breadth of scientific domains and essential to science-based innovation. In
many fields research is impossible without access to supercomputers, radiation
sources for new materials, clean rooms for nanotechnologies, databases for
genomics and social sciences, observatories for Earth sciences, broadband
networks for transferring data, etc. Research infrastructures are necessary to
carry out the research needed to address grand societal challenges — energy,
climate change, bio-economy and lifelong health and wellbeing for all. They
propel collaboration across borders and disciplines and create a seamless and
open European space for online research. They promote mobility of people and
ideas, bring together the best scientists from across Europe and the world and
enhance scientific education. They drive excellence within the European research
and innovation communities and can be outstanding showcases of science for
society at large.
Europe must
establish an adequate, stable base for building, maintaining and operating
research infrastructures if its research is to remain world-class. This requires
substantial and effective cooperation between Union, national and regional
funders for which strong links with the cohesion policy will be pursued to
ensure synergies and a coherent approach. 
This specific
objective addresses a core commitment of the Innovation Union flagship initiative,
which highlights the crucial role played by world-class research
infrastructures in making ground-breaking research and innovation possible. The
initiative stresses the need to pool resources across Europe, and in some cases
globally, in order to build and operate research infrastructures. Equally, the Digital
Agenda for Europe flagship initiative emphasises the need to reinforce
Europe’s e-infrastructures and the importance of developing innovation clusters
to build Europe’s innovative advantage.
4.2.        Rationale and Union added
value
State-of-the-art
research infrastructures are becoming increasingly complex and costly, often
requiring integration of different equipment, services and data sources and
extensive transnational collaboration. No single country has enough resources
to support all the research infrastructures it needs. The European approach to
research infrastructures has made remarkable progress in recent years with
implementing the ESFRI roadmap for infrastructures[21],
integrating and opening national research facilities and developing e-infrastructures
underpinning a digital European Research Area. The networks of research
infrastructures across Europe strengthen its human capital base by providing
world-class training for a new generation of researchers and engineers and
promoting interdisciplinary collaboration.
Further
development and wider use of research infrastructures at Union level will make
a significant contribution to development of the European Research Area. While
the role of Member States remains central in developing and financing research
infrastructures, the Union plays an important part in supporting infrastructure
at Union level, fostering the emergence of new facilities, opening up broad access
to national and European infrastructures, and making sure that regional,
national, European and international policies are consistent and effective. It
is not only necessary to avoid duplication of effort and to coordinate and
rationalise use of the facilities, but also to pool resources so that the Union
can also acquire and operate research infrastructures at world level.
The
efficiencies of scale and scope achieved by a European approach to
construction, use and management of research infrastructures, including
e-infrastructures, will make a significant contribution to boosting Europe’s
research and innovation potential.
4.3.        Broad lines of the activities
The activities shall
aim at developing the European research infrastructures for 2020 and beyond,
fostering their innovation potential and human capital and reinforcing European
research infrastructure policy.
(a)                   
Developing the European research infrastructures
for 2020 and beyond
The aims shall be to ensure the
implementation and operation of the ESFRI and other world-class research
infrastructures, including the development of regional partner facilities;
integration of and access to national research infrastructures; and the
development, deployment and operation of e-infrastructures.
(b)                   
Fostering the innovation potential of research
infrastructures and their human capital
The aims shall be to
encourage research infrastructures to act as early adopters of technology, to
promote R&D partnerships with industry, to facilitate industrial use of
research infrastructures and to stimulate the creation of innovation clusters.
This activity shall also support training and/or exchanges of staff managing
and operating research infrastructures.
(c)                   
Reinforcing European research infrastructure
policy and international cooperation
The aim shall be to support partnerships
between relevant policymakers and funding bodies, mapping and monitoring tools
for decision-making and also international cooperation activities.
The second and
third activities shall be pursued by their own specific action and, whenever
appropriate, as part of the first activity.
PART II
INDUSTRIAL LEADERSHIP 
1.           Leadership in enabling and industrial
technologies
The specific objective is to maintain
and build global leadership in enabling technologies and space research and
innovation, which underpin competitiveness across a range of existing and
emerging industries and sectors.
The global business environment is changing rapidly and the Europe 2020 goals for smart, sustainable
and inclusive growth present challenges and opportunities to European industry.
Europe needs to accelerate innovation, transforming the knowledge generated to
underpin and enhance existing products, services and markets; and to create new
ones. Innovation should be exploited in the widest sense, going beyond
technology to include business, organisational and social aspects. 
To stay at the forefront of global
competition with a strong technological base and industrial capabilities,
increased strategic investments in research, development, validation and
piloting are required in Information and Communication Technologies (ICT);
Nanotechnologies; Advanced Materials; Biotechnology; Advanced Manufacturing and
Processing; and Space.
The successful mastering and deployment of
enabling technologies by European industry is a key factor in strengthening
Europe's productivity and innovation capacity and ensuring Europe has an
advanced, sustainable and competitive economy, global leadership in hi-tech
application sectors and the ability to develop effective solutions for societal
challenges. The pervasive nature of such activities can spur further progress
through complementary inventions and applications, ensuring a higher return on
investment in these technologies than in any other field.
These activities will contribute to the
objectives of the Europe 2020 Flagship initiatives on Innovation Union,
Resource Efficient Europe, An industrial policy for the globalisation era, and A
Digital Agenda for Europe as well as Union space policy objectives. 
Complementarities
with other activities in Horizon 2020
The activities
under 'Leadership in Enabling and Industrial Technologies' will be primarily
based on research and innovation agendas defined by industry and business,
together with the research community and have a strong focus on leveraging
private sector investment. 
The integration
of enabling technologies in solutions for the societal challenges shall be
supported together with the relevant challenges. Applications of enabling
technologies that do not fall under the societal challenges, but are important
for reinforcing the competitiveness of European industry, shall be supported
under 'Leadership in Enabling and Industrial Technologies'.
A common approach
The approach shall
include both agenda-driven activities and more open areas to promote innovative
projects and breakthrough solutions. Emphasis shall be on R&D, large-scale
pilots and demonstration activities, test beds and living labs, prototyping and
product validation in pilot lines. Activities shall be designed to boost
industrial competitiveness by stimulating industry, and in particular SMEs, to
make more research and innovation investment.
An integrated approach to Key Enabling Technologies
A major component of 'Leadership in Enabling and Industrial
Technologies' are Key Enabling Technologies (KETs), defined as micro-
and nanoelectronics, photonics, nanotechnology, biotechnology, advanced
materials and advanced manufacturing systems[22]. These
multi-disciplinary, knowledge and capital-intensive technologies cut
across many diverse sectors providing the basis for significant competitive
advantage for European industry. An integrated approach, promoting the
combination, convergence and cross-fertilisation effect of KETs in different
innovation cycles and value chains can deliver promising research results and
open the way to new industrial technologies, products, services and novel
applications (e.g. in space, transport, environment, health etc.). The numerous
interactions of KETs and enabling technologies will therefore be exploited in a
flexible manner, as an important source of innovation. This will complement
support for research and innovation in KETs that may be provided by national or
regional authorities under the Cohesion Policy Funds within the framework of
smart specialisation strategies.
For all the
enabling and industrial technologies, including the KETs, a major aim will be
to foster interactions between the technologies, and with the applications
under the societal challenges. This shall be fully taken into account in
developing and implementing the agendas and priorities. It requires that
stakeholders representing the different perspectives are fully involved in
priority setting and implementation. In certain cases, it will also require actions
that are jointly funded by the enabling and industrial technologies, and by the
relevant societal challenges. This will include joint funding for public-private
partnerships that aim to develop technologies and apply them to address
societal challenges.
ICT plays an
important role as it embraces some of the KETs and provides the key basic
infrastructures, technologies and systems for vital economic and social
processes and new private and public products and services. European industry
needs to remain at the cutting edge of technological developments in ICT, where
many technologies are entering a new disruptive phase, opening up new
opportunities.
Space is a
rapidly growing sector which delivers information vital to many areas of modern
society, meeting its fundamental demands, addresses universal scientific
questions, and serves to secure the Union's position as a major player on the
international stage. Space research underpins all
activities undertaken in space, but is currently fragmented in national
programmes run by a subset of Union member states. Union level coordination and
investment in space research are required (cf. Article 189 TFEU) to maintain the competitive edge, to safeguard Union space
infrastructure such as Galileo and to sustain a future role for the Union in
space. In addition, innovative downstream services and applications using space
derived information represent an important source of growth and job creation.
Partnering and added value 
Europe can
achieve critical mass through partnering, clusters and networks, standardisation,
promoting cooperation between different scientific and technological
disciplines and sectors with similar research and development needs, leading to
breakthroughs, new technologies and innovative solutions. 
The development
and implementation of research and innovation agendas through public–private partnerships,
the building of effective industry-academia links, the leveraging of additional
investments, the access to risk finance, standardisation and the support to
pre-commercial procurement and the procurement of innovative products and
services are all aspects that are essential in addressing competitiveness. 
In this regard,
strong links with the EIT are also needed to breed entrepreneurial top talents and
to speed up innovation by bringing together people from different countries,
disciplines and organisations.
Union level collaboration can also support
trade opportunities through the development of European or international
standards for new emerging products and services and technologies. Activities
in support of standardisation and interoperability, safety and pre-regulatory
activities will be promoted.
1.1.        Information and
Communication Technologies (ICT)
1.1.1.     Specific objective for ICT
In line with the Digital Agenda for
Europe[23], the specific objective of ICT research and innovation (R&I) is
to enable Europe to develop and exploit the opportunities brought by ICT
progress for the benefits of its citizens, businesses and scientific
communities.
As the world's largest economy and
representing the largest share of the world's ICT market, today at more than
EUR 2600 billion, Europe can have legitimate ambitions for its businesses,
governments, research and development centres and universities to lead developments
in ICT, to grow new business, and to invest more in ICT innovations. 
By 2020, Europe's ICT sector should supply
at least the equivalent of its share of the global ICT market,
today at about one third. Europe should also grow
innovative businesses in ICT so that one third of all business expenditure
in ICT R&D, today at more than EUR 35 billion per year, is invested by
companies created within the last two decades. This would require a
considerable increase in public investments in ICT R&D in ways that
leverage private spending, towards the goal of doubling investments in the next
decade, and significantly more European poles of world-class
excellence in ICT.
To master increasingly complex and
multidisciplinary technology and business chains in ICT, partnering,
risk-sharing and mobilisation of critical mass across the Union are needed. Union
level action helps industry address a single market perspective and achieve
economies of scale and scope. Collaboration around common, open technology
platforms with spill-over and leverage effects allow a wide range of
stakeholders to benefit from new developments and apply further innovations.
Federating and partnering at Union level also enables consensus building,
establishes a visible focal point for international partners, and leads to the
development of Union- and world-wide standards and interoperable solutions.
1.1.2.     Rationale and Union added
value
ICT underpins innovation and
competitiveness across a broad range of private and public markets and sectors,
and enables scientific progress in all disciplines. Over the next decade, the
transformative impact of digital technologies, ICT components, infrastructures
and services will be increasingly visible in all areas of life. Unlimited
computing, communication and data storage resources will be available to every
citizen on the globe. Vast amounts of information and data will be generated by
sensors, machines and information-enhanced products, making action at a
distance a commonplace, enabling global deployment of business processes and
sustainable production sites and bringing a wide range of services and
applications. Many critical commercial and public services and all key
processes of knowledge production in science, learning, business and the public
sector will be provided through ICT. ICT will provide the critical
infrastructure for production and business processes, communication and
transactions. ICT will also be indispensable in contributing to key societal
challenges , as well as societal processes such as community formation,
consumer behaviour, and public governance, for example by means of social
media.
The Union
support to ICT research and innovation is a significant component to prepare
the next generation technologies and applications as it makes up a large part
of total spending on collaborative, mid-to-high risk R&I in Europe. Public
investment in ICT research and innovation at Union level has been and remains
essential to mobilise the critical mass leading to breakthroughs and to a wider
uptake and better use of innovative solutions, products and services. It
continues to play a central role in developing open platforms and technologies
applicable across the Union, in testing and piloting innovations in real
pan-European settings and in optimising resources when addressing Union
competitiveness and tackling common societal challenges. Union support to ICT
research and innovation is also enabling high-tech SMEs to grow and capitalise
on the size of Union-wide markets. It is strengthening collaboration and excellence amongst Union
scientists and engineers, reinforcing synergies with and between national
budgets, and acting as a focal point for collaboration with partners outside
Europe.
Successive evaluations of ICT activities in
the Union's Framework Programme for research and innovation have shown that
focused ICT research and innovation investment undertaken at Union level has
been instrumental in building industrial leadership in areas like mobile
communications, safety-critical ICT systems, and to address challenges like
energy-efficiency or demographic change. Union investments in ICT research
infrastructures have provided European researchers with the world's best
research networking and computing facilities.
1.1.3.     Broad lines of the activities
A number of activity lines shall target ICT
industrial and technological leadership challenges and cover generic ICT
research and innovation agendas, including notably:
(a)                   
A new generation of components and
systems: Engineering of advanced and smart embedded
components and systems;
(b)                   
Next generation computing: Advanced computing systems and technologies; 
(c)                   
Future Internet: Infrastructures, technologies and services;

(d)                   
Content technologies and information
management: ICT for digital content and creativity;

(e)                   
Advanced interfaces and robots: Robotics and smart spaces;
(f)                    
Micro- and nanoelectronics and photonics: Key enabling technologies related to micro- and nanoelectronics and
to photonics. 
These six major activity lines are expected
to cover the full range of needs. These would include industrial
leadership in generic ICT-based solutions, products and services needed to tackle major societal challenges as well as application-driven ICT research and innovation agendas which will be
supported together with the relevant societal challenge. 
These six activity lines shall also include
ICT specific research infrastructures such as living labs for large-scale
experimentation, and infrastructures for underlying key enabling technologies and
their integration in advanced products and innovative smart systems, including equipment, tools, support services, clean rooms and access to
foundries for prototyping. 
1.2.        Nanotechnologies
1.2.1.     Specific objective for
nanotechnologies
The specific objective of nanotechnologies
research and innovation is to secure Union leadership in this high growth
global market, by stimulating investment in nanotechnologies and their uptake
in high added-value, competitive products and services across a range of
applications and sectors. 
By 2020, nanotechnologies
will be mainstreamed, that is seamlessly integrated with most technologies and
applications, driven by consumer benefits, quality of life, sustainable
development and the strong industrial potential for achieving previously
unavailable solutions for productivity and resource efficiency.
Europe must also set the
global benchmark on safe and responsible nanotechnology deployment and
governance ensuring both high societal and industrial returns.
Products using
nanotechnologies represent a world market which Europe cannot afford to ignore.
Market estimates of the value of products incorporating nanotechnology as the
key component reach EUR 700 billion by 2015 and EUR 2 trillion by 2020,
with a corresponding 2 and 6 million jobs respectively. Europe's nanotechnology
companies should exploit this double digit market growth and be capable of
capturing a market share at least equal to Europe's share of global research
funding (i.e. a quarter) by 2020. 
1.2.2.     Rationale and Union added
value
Nanotechnologies are a spectrum of evolving
technologies with proven potential, having revolutionary impact in for example
materials, ICT, life sciences and healthcare and consumer goods once the
research is translated into breakthrough products and production processes. 
Nanotechnologies have a critical role to play
in addressing the challenges identified by the Europe 2020 strategy for smart,
sustainable and inclusive growth. The successful deployment of these key
enabling technologies will contribute to the competitiveness of Union industry
by enabling novel and improved products or more efficient processes and provide
responses to future challenges. 
The global research
funding for nanotechnologies has doubled from around EUR 6.5 billion in 2004 to
around EUR 12.5 billion in 2008, with the Union accounting for about a quarter
of this total. The Union has recognised research leadership in nanosciences and
nanotechnologies with a projection of some 4000 companies in the Union by 2015.

Europe now needs to
secure and build on its position in the global market by promoting wide scale
cooperation in and across many different value chains and between different
industrial sectors to realise the process scale-up of these technologies into
viable commercial products. The issues of risk assessment and management as
well as responsible governance are emerging as determining factors of future
impact of nanotechnologies on society and the economy. 
Thus, the focus of activities shall be on the
widespread and responsible application of nanotechnologies into the economy, to
enable benefits with high societal and industrial impact. To ensure the
potential opportunities, including setting-up new companies and generating new
jobs, research should provide the necessary tools to allow for standardisation
and regulation to be correctly implemented. 
1.2.3.     Broad lines of the
activities
(a)                   
Developing next generation nanomaterials,
nanodevices and nanosystems
Aiming at fundamentally new products
enabling sustainable solutions in a wide range of sectors.
(b)                   
Ensuring the safe development and application of
nanotechnologies
Advancing scientific knowledge of the
potential impact of nanotechnologies and nanosystems on health or on the
environment, and providing tools for risk assessment and management along the
entire life cycle.
(c)                   
Developing the societal dimension of
nanotechnology
Focusing on governance of nanotechnology
for societal benefit.
(d)                   
Efficient synthesis and manufacturing of
nanomaterials, components and systems
Focusing on new operations, smart integration
of new and existing processes, as well as up-scaling to achieve mass production
of products and multi-purpose plants that ensures the efficient transfer of
knowledge into industrial innovation.
(e)                   
Developing capacity-enhancing techniques,
measuring methods and equipment
Focusing on the underpinning technologies
supporting the development and market introduction of complex nanomaterials and
nanosystems. 
1.3.        Advanced materials
1.3.1.     Specific objective for
advanced materials
The specific objective of advanced materials
research and innovation is to develop materials with new functionalities and
improved in-service performance, for more competitive products that minimise
the impact on the environment and the consumption of resources.
Materials are at the core of industrial
innovation and are key enablers. Advanced materials with higher knowledge
content, new functionalities and improved performance are indispensable for
industrial competitiveness and sustainable development across a range of
applications and sectors 
1.3.2.     Rationale and Union added
value
New advanced materials are needed in
developing better performing and sustainable products and processes. Such
materials are a part of the solution to our industrial and societal challenges,
offering better performance in their use, lower resource and energy
requirements, and sustainability at the end-of-life of the products.
Application-driven development often
involves the design of totally new materials, with the ability to deliver
planned in-service performances. Such materials are an important element in the
supply chain of high value manufacturing. They are also the basis for progress
in cross-cutting technology areas (for example biosciences, electronics and
photonics), and in virtually all market sectors. The materials themselves
represent a key step in increasing the value of products and their performance.
The estimated value and impact of advanced materials is significant, with an
annual growth rate of about 6 % and expected market size of the order of EUR
100 billion by 2015. 
Materials shall be conceived according to a
full life-cycle approach, from the supply of available materials to end of life
(cradle to cradle), with innovative approaches to minimise the resources
required for their transformation. Continuous use, recycling or secondary
end-of-life utilisation of the materials shall also be covered as well as
related societal innovation.
To accelerate
progress, a multidisciplinary and convergent approach shall be fostered,
involving chemistry, physics, engineering sciences, theoretical and
computational modelling, biological sciences and increasingly creative
industrial design. 
Novel green innovation alliances and
industrial symbiosis shall be fostered allowing industries to diversify, expand
their business models, re-using their waste as a basis for new productions,
e.g. CO2 as carbon base for fine chemicals and alternative fuels.
1.3.3.     Broad lines of the
activities
(a)                   
Cross-cutting and enabling materials
technologies
Research on functional materials,
multifunctional materials and structural materials, for innovation in all
industrial sectors. 
(b)                   
Materials development and transformation
Research and development to ensure
efficient and sustainable scale up to enable industrial manufacturing of future
products 
(c)                   
Management of materials components
Research and development for new and
innovative techniques and systems. 
(d)                   
Materials for a sustainable and low-carbon
industry
Developing new products and applications,
and consumer behaviour that reduce energy demand, and facilitate low-carbon
production. 
(e)                   
Materials for creative industries
Applying design and the development of
converging technologies to create new business opportunities, including the
preservation of materials with historical or cultural value.
(f)                     
Metrology, characterisation, standardisation and
quality control 
Promoting technologies such as
characterisation, non-destructive evaluation and predictive modelling of
performance for progress in materials science and engineering. 
(g)                   
Optimisation of the use of materials
Research and development to investigate
alternatives to the use of materials and innovative business model approaches. 
1.4.        Biotechnology
1.4.1.     Specific objective for
biotechnology
The specific
objective of biotechnology research and innovation is to develop competitive,
sustainable and innovative industrial products and processes and contribute as
an innovation driver in a number of European sectors like agriculture, food, chemical
and health. 
A strong
scientific, technological and innovation base in biotechnology, will support
European industries securing leadership in this key enabling technology. This
position will be further strengthened by integrating the safety assessment and
management aspects of the overall risks in the deployment of biotechnology.
1.4.2.     Rationale and Union added
value
Powered by the expansion of the knowledge
of living systems, biotechnology is set to deliver a stream of new applications
and to strengthen the Union's industrial base and its innovation capacity.
Examples of the rising importance of biotechnology are in industrial
applications including bio-chemicals, of which the
market share is estimated to increase by up to 12 %-20 % of chemical production
by 2015. A number of the so-called twelve rules of Green Chemistry are
also addressed by biotechnology, due to the selectivity and efficiency of
bio-systems. The possible economic burdens for Union enterprises can be reduced
by harnessing the potential of biotechnology processes and bio-based products
to reduce CO2 emissions, estimated to range from between 1 to 2.5
billion tons CO2 equivalent per year by 2030.In Europe's
biopharmaceutical sector, already some 20 % of the current medicines are
derived from biotechnology, with up to 50 % of new medicines. Biotechnology
also opens new avenues for exploiting the huge potential of marine resources
for producing innovative industrial, health and environmental applications. The
emerging sector of marine (blue) biotechnology has been predicted to grow by 10
% a year. 
Other key sources of innovation are at the
interface between biotechnology and other enabling and converging technologies,
in particular nanotechnologies and ICT, with applications such as sensing and
diagnosing.
1.4.3.     Broad lines of the
activities
(a)                   
Boosting cutting-edge biotechnologies as a
future innovation driver 
Development of emerging technology areas
such as synthetic biology, bioinformatics and systems biology, which hold great
promise for completely novel applications.
(b)                   
Biotechnology-based industrial processes
Developing industrial biotechnology for
competitive industrial products and processes (e.g. chemical, health, mining,
energy, pulp and paper, textile, starch, food processing) and its environmental
dimension.
(c)                   
Innovative and competitive platform technologies
Development of platform technologies (e.g.
genomics, meta-genomics, proteomics, molecular tools) to enhance leadership and
competitive advantage in a wide number of economic sectors.
1.5.        Advanced manufacturing and
processing
1.5.1.     Specific objective
The specific objective of advanced manufacturing
and processing research and innovation is to transform today's industrial forms
of production towards more knowledge intensive, sustainable, trans-sectoral
manufacturing and processing technologies, resulting in more innovative
products, processes and services.
1.5.2.     Rationale and Union added
value
The manufacturing sector is of high
importance to the European economy, contributing to around 17 % of GDP and
accounting for some 22 million jobs in the Union in 2007. With the lowering of
economic barriers to trade and the enabling effect of communications
technology, manufacturing is subject to strong competition and has been gravitating
to countries of lowest overall cost. Due to high wages, the European approach
to manufacturing therefore has to change radically to remain globally
competitive and Horizon 2020 can help bring together all the relevant
stakeholders to achieve this. 
Europe needs to continue to invest at an
Union level to maintain European leadership and competence in manufacturing
technologies and make the transition to high-value, knowledge-intensive goods,
creating the conditions and assets for sustainable, production and provision of
lifetime service around a manufactured product. Resource intensive
manufacturing and process industries need to further mobilise resources and
knowledge at Union level and continue to invest in research, development and
innovation to enable further progress towards a competitive low carbon economy
and to comply with the agreed Union wide reductions in greenhouse gas emissions
by 2050 for industrial sectors[24].
With strong Union policies, Europe would
grow its existing industries and nurture the emerging industries of the future.
The estimated value and impact of the sector of advanced manufacturing systems
is significant, with an expected market size around EUR 150 billion by 2015 and
compound annual growth rate of about 5 %. 
It is crucial to retain knowledge and competence
in order to keep manufacturing and processing capacity in Europe. The emphasis
of the research and innovation activities shall be on sustainable manufacturing
and processing, introducing the necessary technical innovation and
customer-orientation to produce high knowledge content products and services
with low material and energy consumption. Europe also needs to transfer these
enabling technologies and knowledge to other productive sectors, such as
construction, which is a major source of greenhouse gases (GHG) with building
activities accounting for around 40 % of all energy consumption in Europe,
giving rise to 36 % of the CO2 emissions. The construction sector,
generating 10 % of GDP and providing some 16 million jobs in Europe in 3
million enterprises, of which 95 % are SMEs, needs to adopt innovative
materials and manufacturing approaches to mitigate its environmental impact.
1.5.3.     Broad lines of the
activities
(a)                   
Technologies for Factories of the Future
Promoting sustainable industrial growth by facilitating a strategic shift in Europe from
cost-based manufacturing to an approach based on the creation of high added
value. 
(b)                   
Technologies enabling Energy-efficient buildings
Reducing energy consumption and CO2
emissions by the development and deployment of sustainable construction
technologies. 
(c)                   
Sustainable and low-carbon technologies in
energy-intensive process industries
Increasing the competitiveness of process
industries, by drastically improving resource and energy efficiencies and
reducing the environmental impact of such industrial activities through the
whole value chain, promoting the adoption of low-carbon technologies. 
(d)                   
New sustainable business models
Deriving concepts and methodologies for
adaptive, 'knowledge-based' business models in customised approaches. 
1.6.        Space
1.6.1.     Specific objective for
space
The specific objective of space research
and innovation is to foster a competitive and innovative space industry and
research community to develop and exploit space infrastructure to meet future Union
policy and societal needs.
Strengthening the European space sector by
boosting space research and innovation is vital to maintain and safeguard
Europe's capability of access to and operations in space in support of Union
policies, international strategic interests and competitiveness amongst
established and emerging space faring nations.
1.6.2.     Rationale and Union added
value
Space is an important, but frequently
invisible enabler of diverse services and products crucial to modern day
society, such as navigation, communication, weather forecasts, and geographic
information. Policy formulation and implementation at European, national and
regional levels increasingly depend on space-derived information. The global space sector is rapidly growing and expanding
into new regions (e.g. China, South America). European industry is at present a
considerable exporter of first class satellites for commercial and scientific
purposes. Increasing global competition is challenging Europe’s position in
this area. Thus Europe has an interest in ensuring that its industry continues
to thrive in this fiercely competitive market In addition, data from European
science satellites have resulted in some of the most significant scientific
breakthroughs in the last decades in Earth sciences and astronomy. With this unique capacity, the European space sector has a
critical role to play in addressing the challenges identified by Europe 2020.
Research, technology
development and innovation underpin capacities in space which are vital to
European society. While the United States of America spends around 25 % of
their space budget on R&D, the Union spends less than 10 %. Moreover, space
research in the Union is fragmented in the national programmes of a few Member
States. To maintain the technological and competitive edge Union level action is needed to
coordinate space research, to promote the participation of researchers from all
Member States, and to lower the barriers for collaborative space research
projects across national borders. This needs to be done in coordination with the
European Space Agency, which has successfully managed industrial satellite
development and deep space missions on an intergovernmental basis with a subset
of the Member States since 1975. In addition, the information provided
by European satellites will offer an increasing potential for further
development of innovative satellite-based downstream services. This is a
typical activity sector for SMEs and should be supported by research and
innovation measures in order to reap the full benefits of this opportunity, and
especially of the considerable investments made on the two Union flagships
Galileo and GMES.
Space naturally transcends terrestrial
boundaries, providing a unique vantage point of global dimension, thus giving
rise to large scale projects which (e.g. International Space Station, Space Situational Awareness) are carried out in
international co-operation. To play a significant role in such international
space activities in the next decades, both a common European space policy and European
level space research and innovation activities are indispensible.
Space research and innovation under Horizon
2020 aligns with the Union space policy priorities as they continue to be defined
by the Union Space Councils and the European Commission[25].

1.6.3.     Broad lines of the
activities 
(a)                   
Enabling European competitiveness,
non-dependence and innovation of the European space sector
This entails safeguarding and developing a
competitive and entrepreneurial space industry in combination with a
world-class space research community to maintain European leadership and
non-dependence in space technology, to foster innovation in the space sector,
and to enable space-based terrestrial innovation, for example by using remote
sensing and navigation data. 
(b)                   
Enabling advances in space technologies
This aims at developing advanced space
technologies and operational concepts from idea to demonstration in space,
including navigation and remote sensing, as well as the protection of space assets
from threats such as debris and solar flares. To develop and apply advanced
space technologies requires the continuous education and training of highly
skilled engineers and scientists.
(c)                   
Enabling exploitation of space data
A considerably increased exploitation of
data from European satellites can be achieved if a concerted effort is made to
coordinate and organise the processing, validation and standardisation of space
data. Innovations in data handling and dissemination can also ensure a higher
return on investment of space infrastructure, and contribute to tackling
societal challenges, in particular if coordinated in a global effort such as
through Global Earth Observation System of Systems, the European satellite
navigation programme Galileo or IPCC for climate change issues.
(d)                   
Enabling European research in support of
international space partnerships 
Space undertakings have a fundamentally
global character. This is particularly clear for activities such as Space
Situational Awareness (SSA), and many space science and exploration projects. The
development of cutting edge space technology is increasingly taking place
within such international partnerships. Ensuring access to these constitutes an
important success factor for European researchers and industry.
2.           Access to risk finance
2.1.        Specific objective
The specific
objective is to help remedy market deficiencies in accessing risk finance for
research and innovation.
The investment situation in the research
and innovation (R&I) domain is dire, particularly for innovative SMEs and
mid-caps with a high potential for growth. There are several major market gaps
in the provision of finance, as the innovations required to achieve policy
goals are proving too risky, typically, for the market to bear.
A facility for debt ('Debt facility') and a
facility for equity ('Equity facility') will help overcome such problems by
improving the financing and risk profiles of the R&I activities concerned.
This, in turn, will ease access by firms and other beneficiaries to loans,
guarantees and other forms of risk finance; promote early-stage investment and
the development of new venture capital funds; improve knowledge transfer and
the market in intellectual property; attract funds to the venture capital
market; and, overall, help catalyse the passage from the conception,
development and demonstration of new products and services to their
commercialisation.
The overall effect will be to increase the
willingness of the private sector to invest in R&I and hence contribute to
reaching a key Europe 2020 target: 3 % of Union GDP invested in R&D by the
end of the decade. The use of financial instruments will also help achieve the
R&I objectives of all sectors and policy areas crucial for tackling
societal challenges (such as climate change, energy and resource efficiency,
global food security, healthcare provision and an ageing population), for
enhancing competitiveness, and for supporting sustainable, inclusive growth and
the provision of environmental and other public goods.
2.2.        Rationale and Union added
value
A Union-level Debt facility for
R&I is needed to increase the likelihood that loans and guarantees are made
and R&I policy objectives achieved. The current gap in the market between
the demand for and supply of loans and guarantees for risky R&I
investments, addressed by the current Risk-Sharing Finance Facility (RSFF), is
likely to persist, with commercial banks remaining largely absent from
higher-risk lending. Demand for RSFF loan finance has been high since the
launch of the facility in mid-2007: in its first phase (2007-2010), its take-up
exceeded initial expectations by more than 50 % in terms of active loan
approvals (EUR 7.6 billion versus a forecast EUR 5 billion).
Furthermore, banks typically lack the
ability to value knowledge assets, such as intellectual property, and therefore
are often unwilling to invest in knowledge-based companies. The consequence is
that many established innovative companies — both large and small — cannot
obtain loans for higher-risk R&I activities.
These market gaps stem, at root, from
uncertainties, information asymmetries and the high costs of attempting to
address these issues: recently established firms have too short a track record
to satisfy potential lenders, even established firms often cannot provide
enough information, and at the start of an R&I investment, it is not at all
certain whether the efforts undertaken will actually result in a successful
innovation.
Additionally, enterprises at the concept
development stage or working in emerging areas typically lack sufficient collateral.
Another disincentive is that even if R&I activities give rise to a
commercial product or process, it is not at all certain that the company that
has made the effort will be able to exclusively appropriate the benefits
deriving from it.
In terms of Union added value, the Debt facility
will help remedy market deficiencies that prevent the private sector from
investing in R&I at an optimum level. Its implementation will enable the
pooling of a critical mass of resources from the Union budget and, on a
risk-sharing basis, from the financial institution(s) entrusted with its
implementation. It will stimulate firms to invest more of their own money in
R&I than they would otherwise have done. In addition, the Debt facility
will help organisations, both public and private, to reduce the risks of
undertaking the pre-commercial procurement or procurement of innovative
products and services.
A Union-level Equity facility for
R&I is needed to help improve the availability of equity finance for early
and growth-stage investments and to boost the development of the Union venture
capital market. During the technology transfer and start-up phase, new
companies face a 'valley of death' where public research grants stop and it is
not possible to attract private finance. Public support aiming to leverage
private seed and start-up funds to fill this gap is currently too fragmented
and intermittent, or its management lacks the necessary expertise. Furthermore,
most venture capital funds in Europe are too small to support the continued
growth of innovative companies and do not have the critical mass to specialise
and operate transnationally.
The consequences are serious. Before the
financial crisis, the amount invested in SMEs by European venture capital funds
was about EUR 7 billion a year, while figures for 2009 and 2010 were within the
EUR 3-4 billion range. Reduced funding for venture capital has affected the
number of start-ups targeted by venture capital funds: in 2007, some 3 000
SMEs received venture capital funding, compared to only around 2 500 in
2010.
In terms of Union added value, the Equity facility
for R&I will complement national schemes that cannot cater for cross-border
investments in R&I. The early-stage deals will also have a demonstration
effect that can benefit public and private investors across Europe. For the
growth phase, only at European level is it possible to achieve the necessary
scale and the strong participation of private investors that are essential to
the functioning of a self-sustaining venture capital market.
The Debt and Equity facilities,
supported by a set of accompanying measures, will support the achievement of
Horizon 2020's policy objectives. To this end, they will be dedicated to consolidating
and raising the quality of Europe's science base; promoting research and
innovation with a business-driven agenda; and addressing societal challenges,
with a focus on activities such as piloting, demonstration, test-beds and
market uptake.
In addition, they will help tackle the
R&I objectives of other programmes and policy areas, such as the Common
Agricultural Policy, climate action (transition to a low-carbon economy and
adaptation to climate change), and the Common Fisheries Policy.
Complementarities with national and regional financial instruments will be
developed in the context of the Common Strategic Framework for Cohesion Policy,
where an increased role for financial instruments is foreseen.
Their design takes account of the need to
address the specific market deficiencies, characteristics (such as degree of
dynamism and rate of company creation) and financing requirements of these and
other areas. Budgetary allocations between the instruments may be adapted
during the course of Horizon 2020 in response to changing economic conditions.
The Equity facility and the SME window of
the Debt facility will be implemented as part of two EU Financial Instruments that provide equity and debt to
support SMEs' R&I and growth, in conjunction with the equity and debt
facilities under the Programme for the Competitiveness of Enterprises and SMEs.
2.3.        Broad lines of the
activities
(a)                   
The Debt facility providing debt finance for
R&I: 'Union loan & guarantee service for research and innovation'
The goal is to improve access to debt
financing — loans, guarantees, counter-guarantees and other forms of debt and
risk finance — for public and private entities and public-private partnerships
engaged in research and innovation activities requiring risky investments in
order to come to fruition. The focus shall be on supporting research and
innovation with a high potential for excellence.
The target final beneficiaries shall
potentially be legal entities of all sizes that can borrow and repay money and,
in particular, SMEs with the potential to carry out innovation and grow
rapidly; mid-caps and large firms; universities and research institutes;
research infrastructures and innovation infrastructures; public-private
partnerships; and special-purpose vehicles or projects.
The funding of the Debt facility shall have
two main components:
(1)     Demand-driven, providing loans
and guarantees on a first-come, first-served basis, with specific support for
beneficiaries such as SMEs and mid-caps. This component shall respond to the
steady and continuing growth seen in the volume of RSFF lending, which is
demand-led. Under the SME window, activities shall be supported that aim to
improve access to finance for SMEs and other entities that are R&D- and/or
innovation-driven.
(2)     Targeted, focusing on policies
and key sectors crucial for tackling societal challenges, enhancing
competitiveness, supporting sustainable, low-carbon, inclusive growth, and
providing environmental and other public goods. This component shall help the Union
address research and innovation aspects of sectoral policy objectives.
(b)                   
The Equity facility providing equity finance for
R&I: 'Union Equity Instruments for research and innovation'
The goal is to contribute to overcoming the
deficiencies of the European venture capital market and provide equity and
quasi-equity to cover the development and financing needs of innovating
enterprises from the seed stage through to growth and expansion. The focus
shall be on supporting the objectives of Horizon 2020 and related policies.
The target final beneficiaries shall be potentially
enterprises of all sizes undertaking or embarking on innovation activities,
with a particular focus on innovative SMEs and mid-caps. 
The Equity facility will focus on
early-stage venture capital funds providing venture capital and quasi-equity
(including mezzanine capital) to individual portfolio enterprises. The facility will also have the possibility to make
expansion and growth-stage investments in conjunction with the Equity Facility
for Growth under the Programme for the Competitiveness of Enterprises and SMEs,
to ensure a continuum of support during the start up and development of
companies.
The equity facility, which will be primarily
demand-driven, shall use a portfolio approach, where venture capital funds and
other comparable intermediaries select the firms to be invested in. 
Earmarking may be applied to help achieve
particular policy goals, building on the positive experience in the Competitiveness
and Innovation Framework Programme with earmarking for eco-innovation.
The start-up window, supporting the
seed and early stages, shall enable equity investments in, amongst others,
knowledge-transfer organisations, seed capital funds, cross-border seed funds,
business angel co-investment vehicles, intellectual property assets, platforms
for the exchange and trading of intellectual property rights, and early-stage venture
capital funds.
The growth window shall make
expansion and growth-stage investments in conjunction with the Equity Facility
for Growth under the Programme for the Competitiveness of Enterprises and SMEs,
including investments in funds-of-funds operating across borders and investing
in venture capital funds, most of which will have a thematic focus that
supports the goals of Europe 2020.
3.           Innovation in Small and Medium-Sized
Enterprises
3.1         Specific objective
The specific
objective is to stimulate growth by means of increasing the levels of
innovation in SMEs, covering their different innovation needs over the whole
innovation cycle for all types of innovation, thereby creating more fast-growing,
internationally active SMEs.
Considering the
central role of SMEs in Europe’s economy, research and innovation in SMEs will
play a crucial role in increasing competitiveness, boosting economic growth and
job creation and thus in achieving the objectives of Europe 2020 and notably
its flagship initiative Innovation Union. 
However, SMEs
have – despite their important economic and employment share and significant
innovation potential – size-related problems to become more innovative and more
competitive. Although Europe produces a similar number of start-up companies
than the United States of America, European SMEs are finding it much harder to
grow into large companies than their US counterparts. The internationalised
business environment with increasingly interlinked value chains puts further
pressure on them. SMEs need to enhance their innovation capacity. They need to
generate, take up and commercialise new knowledge and business ideas faster and
to a greater extent to compete successfully on fast evolving global markets.
The challenge is to stimulate more innovation in SMEs, thereby enhancing their
competitiveness and growth.
The proposed
actions aim to complement national and regional business innovation policies
and programmes, to foster cooperation between SMEs and other
innovation-relevant actors, to bridge the gap between research/development and
successful market uptake, to provide a more business innovation friendly
environment, including demand-side measures, and support taking into account
the changing nature of innovation processes, new technologies, markets and
business models. 
Strong links
with industry-specific Union policies, notably the Programme for the
Competitiveness of Enterprises and SMEs and Cohesion Policy funds, will be established
to ensure synergies and a coherent approach.
3.2.        Rationale and Union added
value
SMEs are key drivers of innovation thanks
to their ability to quickly and efficiently transform new ideas in successful
businesses. They serve as important conduits of knowledge spill-over bringing
research results to the market. The last twenty years have shown that entire
sectors have been renewed and new industries created driven by innovative SMEs.
Fast growing enterprises are crucial for the development of emerging industries
and for the acceleration of the structural changes that Europe needs to become
a knowledge based and low carbon economy with sustained growth and high quality
jobs.
SMEs can be found in all sectors of the
economy. They form a more important part of the European economy than of other
regions such as the United States of America. All types of SMEs can innovate.
They need to be encouraged and supported to invest in research and innovation.
In doing so they should be able to draw on the full innovative potential of the
internal market and the ERA so as to create new business opportunities in
Europe and beyond and to contribute to find solutions to key societal
challenges. 
Participation
in Union research and innovation strengthens the R&D and technology
capability of SMEs, increases their capacity to generate, absorb and use new
knowledge, enhances the economic exploitation of new solutions, boosts
innovation in products, services and business models, promotes business
activities in larger markets and internationalises the knowledge networks of
SMEs. SMEs that have a good innovation management in place, thereby often
relying on external expertise and skills, outperform others. 
Cross-border
collaborations are an important element in the innovation strategy of SMEs to
overcome some of their size-related problems, such as access to technological
and scientific competences and new markets. They contribute to turn ideas into
profit and company growth and in return to increase private investment in research
and innovation.
Regional and
national programmes for research and innovation, often backed by European
cohesion policy, play an essential role in promoting SMEs. In particular,
Cohesion Policy funds have a key role to play through building capacity and
providing a stairway to excellence for SMEs in order to develop excellent
projects that may compete for funding under Horizon 2020. Nevertheless, only a
few national and regional programmes provide funding for transnational research
and innovation activities carried out by SMEs, the Union-wide diffusion and
uptake of innovative solutions or cross-border innovation support services. The
challenge is to provide SMEs with thematically open support to realise
international projects in line with companies’ innovation strategies. Actions
at Union level are therefore necessary to complement activities undertaken at
national and regional level, to enhance their impact and to open up the
research and innovation support systems. 
3.3.        Broad lines of the
activities
(a)                   
Mainstreaming SME support
SMEs shall be supported across Horizon
2020. For this purpose a dedicated SME instrument shall provide staged and
seamless support covering the whole innovation cycle. The SME instrument shall
be targeted at all types of innovative SMEs showing a strong ambition to
develop, grow and internationalise. It shall be provided for all types of
innovation, including service, non-technological and social innovations. The
aim is to develop and capitalise on the innovation potential of SMEs by filling
the gap in funding for early stage high risk research and innovation, stimulating
innovations and increasing private-sector commercialisation of research
results. 
All of the specific objectives on societal challenges
and on leadership in enabling and industrial technologies will apply the
dedicated SME instrument and will allocate an amount for this. 
(b)                   
Support for research intensive SMEs 
The goal is to promote market-oriented
innovation of R&D performing SMEs. A specific action shall target research
intensive SMEs in high-technology sectors that show the capability to
commercially exploit the project results.
(c)                   
Enhancing the innovation capacity of SMEs 
Activities
assisting the implementation and complementing the SME specific measures across
Horizon 2020 shall be supported, notably to enhance the innovation capacity of
SMEs. 
(d)                   
Supporting market-driven innovation 
Supporting
market-driven innovation to improve the framework conditions for innovation and
tackling the specific barriers preventing, in particular, the growth of innovative SMEs.
PART III
SOCIETAL CHALLENGES
1.           Health, demographic change and wellbeing
1.1.        Specific objective
The specific objective is to improve the
lifelong health and wellbeing of all.
Lifelong health and wellbeing for all, high-quality
and economically sustainable health and care systems, and opportunities for new
jobs and growth are the aims of support to research and innovation in response
to this challenge and will make a major contribution to Europe 2020. 
The cost of Union health and social care
systems is rising with care and prevention measures in all ages increasingly
expensive, the number of Europeans aged over 65 expected to nearly double from
85 million in 2008 to 151 million by 2060, and those over 80 to rise from 22 to
61 million in the same period. Reducing or containing these costs such that
they do not become unsustainable depends in part on ensuring the lifelong
health and wellbeing of all and therefore on the effective prevention,
treatment and management of disease and disability.
Chronic conditions such as cardiovascular
disease (CVD), cancer, diabetes, neurological and mental health disorders,
overweight and obesity and various functional limitations are major causes of
disability, ill-health and premature death, and present considerable social and
economic costs. 
In the Union, CVD annually accounts for
more than 2 million deaths and costs the economy more than EUR 192 billion
while cancer accounts for a quarter of all deaths and is the number one cause
of death in people aged 45-64. Over 27 million people in the Union suffer from
diabetes and the total cost of brain disorders (including, but not limited to
those affecting mental health) has been estimated at EUR 800 billion.
Environmental, life-style and socio-economic factors are relevant in several of
these conditions with up to one third of the global disease burden estimated to
be related to these.
Infectious diseases (e.g. HIV/AIDS,
tuberculosis and malaria), are a global concern, accounting for 41 % of the 1.5
billion disability adjusted life years worldwide, with 8 % of these in Europe.
Emerging epidemics and the threat of increasing anti-microbial resistance must
also be prepared for.
Meanwhile, drug and vaccine development
processes are becoming more expensive and less effective. Persistent health
inequalities must be addressed, and access to effective and competent health
systems must be ensured for all Europeans.
1.2.        Rationale and Union added
value
Disease and disability are not stopped by
national borders. An appropriate European level research and innovation
response can and should make a crucial contribution to addressing these
challenges, deliver better health and wellbeing for all, and position Europe as
a leader in the rapidly expanding global markets for health and wellbeing
innovations. 
The response depends on excellence in
research to improve our fundamental understanding of health, disease, disability,
development and ageing (including of life expectancy), and on the seamless and
widespread translation of the resulting and existing knowledge into innovative,
scalable and effective products, strategies, interventions and services.
Furthermore, the pertinence of these challenges across Europe and in many
cases, globally, demands a response characterised by long term and coordinated
support for co-operation between excellent, multidisciplinary and multi-sector
teams.
Similarly, the complexity of the challenge
and the interdependency of its components demand a European level response.
Many approaches, tools and technologies have applicability across many of the
research and innovation areas of this challenge and are best supported at Union
level. These include the development of long term cohorts and the conduct of
clinical trials, the clinical use of "-omics" or the development of
ICT and their applications in healthcare practice, notably e-health. The
requirements of specific populations are also best addressed in an integrated
manner, for example in the development of stratified and/or personalised
medicine, in the treatment of rare diseases, and in providing assisted and
independent living solutions. 
To maximise the impact of Union level
actions, support will be provided to the full spectrum of research and
innovation activities. From basic research through translation of knowledge to
large trials and demonstration actions, mobilising private investment; to public
and pre-commercial procurement for new products, services, scalable solutions,
which are when necessary, interoperable and supported by defined standards
and/or common guidelines. This co-ordinated, European effort will contribute to
the ongoing development of the ERA. It will also interface, as and when
appropriate, with activities developed in the context of the Health for Growth
Programme and the European Innovation Partnership on Active and Health Ageing.
1.3.        Broad lines of the
activities
Effective health promotion, supported by a
robust evidence base, prevents disease, improves wellbeing and is cost
effective. Health promotion and disease prevention also depend on an
understanding of the determinants of health, on effective preventive tools,
such as vaccines, on effective health and disease surveillance and
preparedness, and on effective screening programmes.
Successful efforts to prevent, manage,
treat and cure disease, disability and reduced functionality are underpinned by
the fundamental understanding of their determinants and causes, processes and
impacts, as well as factors underlying good health and wellbeing. Effective
sharing of data and the linkage of these data with large scale cohort studies
is also essential, as is the translation of research findings into the clinic,
in particular through the conduct of clinical trials. 
An increasing disease and disability burden
in the context of an aging population places further demands on health and care
sectors. If effective health and care is to be maintained for all ages, efforts
are required to improve decision making in prevention and treatment provision,
to identify and support the dissemination of best practice in the health and
care sectors, and to support integrated care and the wide uptake of
technological, organisational and social innovations empowering in particular
older persons as well as disabled persons to remain active and independent.
Doing so will contribute to increasing, and lengthening the duration of their
physical, social, and mental well-being.
All of these activities shall be undertaken
in such a way as to provide support throughout the research and innovation
cycle, strengthening the competitiveness of the European based industries and
development of new market opportunities.
Specific activities shall include:
understanding the determinants of health (including environmental and climate
related factors), improving health promotion and disease prevention;
understanding disease and improving diagnosis; developing effective screening
programmes and improving the assessment of disease susceptibility; improving
surveillance and preparedness; developing better preventive vaccines; using
in-silico medicine for improving disease management and prediction; treating
disease; transferring knowledge to clinical practice and scalable innovation
actions; better use of health data; active ageing, independent and assisted living;
individual empowerment for self-management of health; promotion of integrated
care; improving scientific tools and methods to support policy making and
regulatory needs; and optimising the efficiency and effectiveness of healthcare
systems and reducing inequalities by evidence based decision making and
dissemination of best practice, and innovative technologies and approaches. 
2.           Food security, sustainable agriculture,
marine and maritime research and the bio-economy
2.1         Specific objective
The specific objective is to secure sufficient
supplies of safe and high quality food and other bio-based products, by
developing productive and resource-efficient primary production systems,
fostering related ecosystem services, along side competitive and low carbon supply
chains. This will accelerate the transition to a sustainable European
bio-economy.
Over the coming decades, Europe will be
challenged by increased competition for limited and finite natural resources,
by the effects of climate change, in particular on primary production systems
(agriculture, forestry, fisheries and aquaculture) and by the need to provide a
sustainable, safe and secure food supply for the European and an increasing
global population. A 70 % increase of the world food supply is estimated to be
required to feed the 9 billion global population by 2050. Agriculture accounts
for about 10 % of Union greenhouse gases emissions, and while declining in
Europe, global emissions from agriculture are projected to increase up to 20 %
by 2030. Furthermore, Europe will need to ensure sufficient supplies of raw
materials, energy and industrial products, under conditions of decreasing
fossil carbon resources (oil and liquid gas production expected to decrease by
about 60 % by 2050), while maintaining its competitiveness. Bio-waste
(estimated at up to 138 million tonnes per year in the Union, of which up to 40
% is land-filled) represents a huge problem and cost, despite its high
potential added value. For example, an estimated 30 % of all food produced in
developed countries is discarded. Major changes are needed to reduce this
amount by 50 % in the Union by 2030[26]. In addition, national
borders are irrelevant in the spread of animal and plant pests and diseases,
including zoonotic diseases, and food borne pathogens. While effective national
prevention measures are needed, action at Union level is essential for ultimate
control and the effective running of the single market. The challenge is
complex, affects a broad range of interconnected sectors and requires a
plurality of approaches. 
More and more biological resources are
needed to satisfy market demand for a secure and healthy food supply,
bio-materials, biofuels and bio-based products, ranging from consumer products
to bulk chemicals. However the capacities of the terrestrial and aquatic
ecosystems required for their production are limited, while there are competing
claims for their utilisation, and often not optimally managed, as shown for
example by a severe decline in soil carbon content and fertility. There is
under-utilised scope for fostering ecosystem services from farmland, forests,
marine and fresh waters by integrating agronomic and environmental goals into
sustainable production.
The potential of biological resources and
ecosystems could be used in a much more sustainable, efficient and integrated
manner. For examples, the potential of biomass from forests and waste streams
from agricultural, aquatic, industrial, and also municipal origins could be
better harnessed 
In essence, a transition is needed towards
an optimal and renewable use of biological resources and towards sustainable
primary production and processing systems that can produce more food and other
bio-based products with minimised inputs, environmental impact and greenhouse
gas emissions, enhanced ecosystem services, zero-waste and adequate societal
value. A critical effort of interconnected research and innovation is a key
element for this to happen, in Europe and beyond.
2.2         Rationale and Union added
value 
Agriculture, forestry and fisheries
together with the bio-based industries are the major sectors underpinning the
bio-economy. This latter represents a large and growing market estimated to be
worth over EUR 2 trillion, providing 20 million jobs and accounting for 9 % of
total employment in the Union in 2009. Investments in research and innovation
under this societal challenge will enable Europe to take leadership in the
concerned markets and will play a role in achieving the goals of the Europe
2020 strategy and its Innovation Union and Resource Efficient Europe flagship
initiatives.
A fully functional European bio-economy –
encompassing the sustainable production of renewable resources from land and
aquatic environments and their conversion into food, bio-based products and bioenergy
as well as the related public goods - will generate high European added value.
Managed in a sustainable manner, it can reduce the environmental footprint of
primary production and the supply chain as a whole. It can increase their
competitiveness and provide jobs and business opportunities for rural and
coastal development. The food security, sustainable agriculture, and overall
bio-economy – related challenges are of a European and global nature. Actions
at Union level are essential to bring together clusters to achieve the
necessary breadth and critical mass to complement efforts made by a single or
groups of Member States. A multi-actor approach will ensure the necessary cross-fertilising
interactions between researcher, businesses, farmers/producers, advisors and
end-users. The Union level is also necessary to ensure coherence in addressing
this challenge across sectors and with strong links to relevant Union policies.
Coordination of research and innovation at Union level will stimulate and help
to accelerate the required changes across the Union.
Research and innovation will interface with
a wide spectrum of Union policies and related targets, including the Common
Agriculture Policy (in particular the Rural Development Policy) and the
European Innovation Partnership 'Agricultural Productivity and Sustainability',
the Common Fisheries Policy, the Integrated Maritime Policy, the European
Climate Change Programme, the Water Framework Directive, the Marine Strategy
Framework Directive, the Forestry Action Plan, the Soil Thematic Strategy, the Union's
2020 Biodiversity Strategy, the Strategic Energy Technology Plan, the Union's innovation
and industrial policies, external and development aid policies, plant health
strategies, animal health and welfare strategies and regulatory frameworks to
protect the environment, health and safety, to promote resource efficiency and
climate action, and to reduce waste. A better integration of research and
innovation into related Union policies will significantly improve their
European added value, provide leverage effects, increase societal relevance and
help to further develop sustainable land, seas and oceans management and
bio-economy markets.
For the purpose of supporting Union policies related to the
bio-economy and to facilitate governance and monitoring of research and
innovation, socio-economic research and forward looking activities will be
performed in relation to the bio-economy strategy, including development of
indicators, data bases, models, foresight and forecast, impact assessment of
initiatives on the economy, society and the environment. 
Challenge-driven actions focusing on social
and economic benefits and the modernisation of the bio-economy associated
sectors and markets shall be supported through multi-disciplinary research,
driving innovation and leading to the development of new practices, products
and processes. It shall also pursue a broad approach to innovation ranging from
technological, non-technological, organisational, economic and social innovation
to for instance novel business models, branding and services. 
2.3         Broad lines of activities
(a)                   
Sustainable agriculture and forestry
The aim is to supply sufficient food, feed,
biomass and other raw-materials, while safeguarding natural resources and enhancing
ecosystems services, including coping with and mitigating climate change. The
activities shall focus on more sustainable and productive agriculture and
forestry systems which are both resource-efficient (including low-carbon) and
resilient, while at the same time developing of services, concepts and policies
for thriving rural livelihoods. 
(b)                   
Sustainable and competitive agri-food sector for
a safe and healthy diet 
The aim is to meet the requirements of
citizens for safe, healthy and affordable food, and to make food and feed
processing and distribution more sustainable and the food sector more
competitive. The activities shall focus on healthy and safe foods for all,
informed consumer choices, and competitive food processing methods that use
less resources and produce less by-products, waste and green-house gases.
(c)                   
Unlocking the potential of aquatic living
resources
The aim is to sustainably exploit aquatic
living resources to maximise social and economic benefits/returns from Europe's
oceans and seas. The activities shall focus on an optimal contribution to
secure food supplies by developing sustainable and environmentally friendly
fisheries and competitive European aquaculture in the context of the global
economy and on boosting marine innovation through biotechnology to fuel smart
"blue" growth.
(d)                   
Sustainable and competitive bio-based industries

The aim is the
promotion of low carbon, resource efficient, sustainable and competitive
European bio-based industries. The activities shall focus on fostering the
bio-economy by transforming conventional industrial processes and products into
bio-based resource and energy efficient ones, the development of integrated
biorefineries, utilising biomass from primary production, biowaste and
bio-based industry by-products, and opening new markets through supporting
standardisation, regulatory and demonstration/field trial activities and others,
while taking into account the implication of the bio-economy on land use and
land use changes.
3.           Secure, clean and efficient energy 
3.1.        Specific objective
The specific objective is to make the
transition to a reliable, sustainable and competitive energy system, in the
face of increasingly scarce resources, increasing energy needs and climate
change. 
The Union intends to reduce greenhouse gas
emissions by 20 % below 1990 levels by 2020, with a further reduction to 80-95
% by 2050. In addition, renewables should cover 20 % of final energy
consumption in 2020 coupled with a 20 % energy efficiency target. Achieving
these objectives will require an overhaul of the energy system combining low
carbon profile, energy security and affordability, while at the same time
reinforcing Europe's economic competitiveness. Europe is currently far from
this overall goal. 80 % of the European energy system still relies on fossil
fuels, and the sector produces 80 % of all the Union's greenhouse gas
emissions. Every year 2.5 % of the Union's Gross Domestic Product (GDP) is spent
on energy imports and this is likely to increase. This trend would lead to
total dependence on oil and gas imports by 2050. Faced with volatile energy
prices on the world market, coupled with concerns over security of supply,
European industries and consumers are spending an increasing share of their
income on energy. 
The roadmap to a competitive low-carbon
economy in 2050[27] shows that the targeted
reductions in greenhouse gas emissions will have to be met largely within the
territory of the Union. This would entail reducing CO2 emissions by over 90 %
by 2050 in the power sector, by over 80 % in industry, by at least 60 % in
transport and by about 90 % in the residential sector and services. 
To achieve these reductions, significant
investments need to be made in research, development, demonstration and market
roll-out of efficient, safe and reliable low-carbon energy technologies and
services. These must go hand in hand with non-technological solutions on both
the supply and demand sides. All this must be part of an integrated low-carbon
policy, including mastering key enabling technologies, in particular ICT
solutions and advanced manufacturing, processing and materials. The goal is to
produce efficient energy technologies and services that can be taken up widely
on European and international markets and to establish intelligent demand-side
management based on an open and transparent energy trade market and intelligent
energy efficiency management systems.
3.2.        Rationale and Union added
value
New technologies and solutions must compete
on cost and reliability against highly optimised energy systems with well-established
incumbents and technologies. Research and innovation are critical to make these
new, cleaner, low-carbon, more efficient energy sources commercially attractive
on the scale needed. Neither industry alone, nor Member States individually,
are able to bear the costs and risks, for which the main drivers (transition to
a low carbon economy, providing affordable and secure energy) are outside the
market. 
Speeding up this development will require a
strategic approach at Union level, spanning energy supply, demand and use in
buildings, services, transport and industrial value chains. This will entail
aligning resources across the Union, including cohesion policy funds, in
particular through the national and regional strategies for smart
specialisation, emission trading schemes (ETS), public procurement and other
financing mechanisms. It will also require regulatory and deployment policies
for renewables and energy efficiency, tailored technical assistance and
capacity-building to remove non-technological barriers.
The Strategic Energy Technology Plan (SET Plan)
offers such a strategic approach. It provides a long term agenda to address the
key innovation bottlenecks that energy technologies are facing at the frontier
research and R&D/proof-of-concept stages and at the demonstration stage
when companies seek capital to finance large, first-of-a-kind projects and to open
the market deployment process. 
The resources required to implement the SET
Plan in full have been estimated at EUR 8 billion per year over the next 10
years[28]. This is well beyond the
capacity of individual Member States or research and industrial stakeholders
alone. Investments in research and innovation at Union level are needed,
combined with mobilisation of efforts across Europe in the form of joint
implementation and risk and capacity sharing. Union funding of energy research
and innovation shall therefore complement Member States' activities by focusing
on activities with clear Union added value, in particular those with high
potential to leverage national resources. Action at Union level shall also
support high-risk, high-cost, long-term programmes beyond the reach of
individual Member States, pool efforts to reduce investment risks in large-scale
activities such as industrial demonstration and develop Europe-wide,
interoperable energy solutions. 
Implementation of the SET-Plan as the
research and innovation pillar of European energy policy will reinforce the Union's
security of supply and the transition to a low-carbon economy, help to link
research and innovation programmes with trans-European and regional investments
in energy infrastructure and increase the willingness of investors to release
capital for projects with long lead-times and significant technology and market
risks. It will create opportunities for innovation for small and large
companies and help them become or remain competitive at world level, where
opportunities for energy technologies are large and increasing. 
On the international scene, the action taken
at Union level provides a 'critical mass' to attract interest from other
technology leaders and foster international partnerships to achieve the Union's
objectives. It will make it easier for international partners to interact with
the Union to build common action where there is mutual benefit and interest.
The activities
under this challenge will therefore form the technological backbone of European
energy and climate policy. They will also contribute to achieving the Innovation
Union in the field of energy and the policy goals outlined in 'Resource Efficient
Europe', 'An Industrial Policy for the Globalisation Era' and 'A Digital Agenda
for Europe'. 
Research and
innovation activities on nuclear fission and fusion energy are carried out in the
EURATOM part of Horizon 2020. 
3.3.        Broad lines of the
activities
(a)                   
Reducing energy consumption and carbon footprint
by smart and sustainable use
Activities shall focus on research and full-scale
testing of new concepts, non-technological solutions, more efficient, socially
acceptable and affordable technology components and systems with in-built
intelligence, to allow real-time energy management for near-zero-emission
buildings, renewable heating and cooling, highly efficient industries and mass
take-up of energy efficiency solutions by companies, individuals, communities
and cities. 
(b)                   
Low-cost, low-carbon electricity supply
Activities shall focus on research,
development and full scale demonstration - of innovative renewables and carbon
capture and storage technologies offering larger scale, lower cost,
environmentally safe technologies with higher conversion efficiency and higher
availability for different market and operating environments. 
(c)                   
Alternative fuels and mobile energy sources
Activities shall focus on research,
development and full scale demonstration of technologies and value chains to
make bio-energy more competitive and sustainable, to reduce time to market for
hydrogen and fuel cells and to bring new options showing long-term potential to
maturity.
(d)                   
A single, smart European electricity grid
Activities shall focus on research,
development and full scale demonstration of new grid technologies, including
storage, systems and market designs to plan, monitor, control and safely
operate interoperable networks in an open, decarbonised, climate resilient and
competitive market, under normal and emergency conditions.
(e)                   
New knowledge and technologies 
Activities shall focus on multi-disciplinary
research for energy technologies (including visionary actions) and joint implementation
of pan-European research programmes and world-class facilities.
(f)                     
Robust decision making and public engagement
Activities shall focus on the development
of tools, methods and models for a robust and transparent policy support, including
activities on public acceptance and engagement, user involvement and sustainability.

(g)                   
Market uptake of energy innovation
Activities shall focus on applied
innovation to facilitate the market uptake of energy technologies and services,
to address non-technological barriers and to accelerate the cost effective
implementation of the Union's energy policies.
4.           Smart, green and integrated transport
4.1         Specific objective
The specific objective is to achieve a
European transport system that is resource-efficient, environmentally-friendly,
safe and seamless for the benefit of citizens, the economy and society.
Europe must reconcile the growing mobility
needs of its citizens with the imperatives of economic performance and the
requirements of a low-carbon society and climate resilient economy. Despite its
growth, the transport sector must achieve a substantial reduction in greenhouse
gases and other adverse environmental impacts, and must break its dependency on
oil, while maintaining high levels of efficiency and mobility.
Sustainable mobility can only be achieved
through a radical change in the transport system, inspired by breakthroughs in
transport research, far-reaching innovation, and a coherent, Europe-wide
implementation of greener, safer and smarter transport solutions. 
Research and innovation must bring about
focussed and timely advances that will help achieve key Union policy
objectives, while boosting economic competitiveness, supporting the transition
to a climate-resilient and low-carbon economy, and maintaining global market
leadership.
Although the necessary investments in
research, innovation and deployment will be significant, failing to improve the
sustainability of transport will result in unacceptably high societal,
ecological, and economic costs in the long term.
4.2         Rationale and Union added
value
Transport is a major driver of Europe's
economic competitiveness and growth. It ensures the mobility of people and
goods necessary for an integrated European single market and an open and
inclusive society. It represents one of Europe's greatest assets in terms of
industrial capability and quality of service, playing a leading role in many
world markets. Transport industry and transport equipment manufacturing
together represent 6.3 % of the Union's GDP. At the same time, the European
transport industry faces increasingly fierce competition from other parts of
the world. Breakthrough technologies will be required to secure Europe's future
competitive edge and to mitigate the drawbacks of our current transport system.
The transport sector is a major contributor
to greenhouse gases and generates up to a quarter of all emissions. Transport
is 96 % dependent on fossil fuels. Meanwhile, congestion is an increasing
problem; systems are not yet sufficiently smart; alternatives for shifting
between different modes of transport are not always attractive; road fatalities
remain dramatically high at 34 000 per year in the Union; citizens and
businesses expect a transport system that is safe and secure. The urban context
poses specific challenges to the sustainability of transport. 
Within a few decades the expected growth
rates of transport would drive European traffic into a gridlock and make its
economic costs and societal impact unbearable. Passenger-kilometres are
predicted to double over the next 40 years and grow twice as fast for air
travel. CO2 emissions would grow 35 % by 2050. Congestion costs
would increase by about 50 %, to nearly EUR 200 billion annually. The external
costs of accidents would increase by about EUR 60 billion compared to 2005. 
Business-as-usual is therefore not an
option. Research and innovation, driven by policy objectives and focused on the
key challenges, shall contribute substantially to achieve the Union's targets
of limiting global temperature increase to 2ºC, cutting 60 % of CO2
emissions from transport, drastically reduce congestion and accident costs, and
virtually eradicating road deaths by 2050.
The problems of pollution, congestion,
safety and security are common throughout the Union and call for collaborative
Europe-wide responses. Accelerating the development and deployment of new
technologies and innovative solutions for vehicles, infrastructures and transport
management will be key to achieve a cleaner and more efficient transport system
in the Union; to deliver the results necessary to mitigate climate change and
improve resource efficiency; to maintain European leadership on the world
markets for transport related products and services. These objectives cannot be
achieved through fragmented national efforts alone.
Union level funding of transport research
and innovation will complement Member States’ activities by focussing on
activities with a clear European added-value. This means that emphasis will be
placed on priority areas that match European policy objectives; where a
critical mass of effort is necessary; where Europe-wide, interoperable
transport solutions need to be pursued; or where pooling efforts
trans-nationally can reduce research investment risks, pioneer common standards
and shorten time-to-market of research results.
Research and innovation activities shall
include a wide range of initiatives that cover the full innovation chain.
Several activities are specifically intended to help bring results to the market:
a programmatic approach to research and innovation, demonstration projects,
market take-up actions and support for standardisation, regulation and
innovative procurement strategies all serve this goal. In addition, using
stakeholders' engagement and expertise will help bridge the gap between
research results and their deployment in the transport sector.
Investing in research and innovation for a
greener, smarter and more integrated transport system will make an important
contribution to the Europe 2020 goals of smart, sustainable and inclusive
growth and the objectives of the Innovation Union flagship initiative. The
activities will support the implementation of the White Paper on Transport
aiming at a Single European Transport Area. They will also contribute to the
policy goals outlined in the flagship initiatives on 'Resource Efficient Europe',
'An Industrial Policy for the Globalisation Era' and 'A Digital Agenda for
Europe'. 
4.3.        Broad lines of the
activities
(a)                   
Resource efficient transport that respects the
environment
The aim is to minimise transport's impact
on climate and the environment by improving its efficiency in the use of
natural resources, and by reducing its dependence on fossil fuels. 
The focus of activities shall be to reduce
resource consumption and greenhouse gas emissions and improve vehicle
efficiency, to accelerate the development and deployment of a new generation of
electric and other low or zero emission vehicles, including through
breakthroughs in engines, batteries and infrastructure; to explore and exploit
the potential of alternative fuels and innovative and more efficient propulsion
systems, including fuel infrastructure; to optimise the use of infrastructures,
by means of intelligent transport systems and smart equipment; and to increase
the use of demand management and public and non-motorised transport,
particularly in urban areas. 
(b)                   
Better mobility, less congestion, more safety
and security
The aim is to reconcile the growing
mobility needs with improved transport fluidity, through innovative solutions
for seamless, inclusive, safe, secure and robust transport systems.
The focus of activities shall be to reduce
congestion, improve accessibility and match user needs by promoting integrated
door-to-door transport and logistics; to enhance inter-modality and the
deployment of smart planning and management solutions; and to drastically
reduce the occurrence of accidents and the impact of security threats.
(c)                   
Global leadership for the European transport
industry
The aim is to reinforce the competitiveness
and performance of European transport manufacturing industries and related
services.
The focus of activities shall be to develop
the next generation of innovative transport means and to prepare the ground for
the following one, by working on novel concepts and designs, smart control
systems and interoperable standards, efficient production processes, shorter
development times and reduced lifecycle costs.
(d)                   
Socio-economic research and forward looking
activities for policy making 
The aim is to support improved policy
making which is necessary to promote innovation and meet the challenges raised
by transport and the societal needs related to it.
The focus of activities shall be to improve
the understanding of transport related socio-economic trends and prospects, and
provide policy makers with evidence-based data and analyses.
5.           Climate action, resource efficiency and
raw materials 
5.1.        Specific objective
The specific objective is to achieve a resource efficient and
climate change resilient economy and a sustainable supply of raw materials, in
order to meet the needs of a growing global population within the sustainable
limits of the planet's natural resources. Activities will contribute to increasing
European competitiveness and improving well being, whilst assuring
environmental integrity and sustainability, keeping average global warming
below 2 °C and enabling ecosystems and
society to adapt to climate change.
During the 20th century, the world increased both its fossil
fuel use and the extraction of material resources by of the order of a factor
of ten. This era of seemingly plentiful and cheap resources is coming to an
end. Raw materials, water, air, biodiversity and terrestrial, aquatic and
marine ecosystems are all under pressure. Many of the world’s major ecosystems
are being degraded, with up to 60 % of the services that they provide being
used unsustainably. In the Union, some 16 tonnes of materials are used per
person each year, of which 6 tonnes are wasted, with half going to landfill.
The global demand for resources continues to increase with the growing
population and rising aspirations, in particular of middle income earners in
emerging economies. There needs to be an absolute decoupling of economic growth
from resource use.
The average temperature of the Earth's surface has increased by
about 0.8°C over the past 100 years and is projected to increase by
between 1.8 to 4°C by the end of the 21st century (relative to the
1980-1999 average)[29]. The likely impacts on
natural and human systems associated with these changes will challenge the
planet and its ability to adapt, as well as threatening future economic
development and the well being of humanity.
The growing impacts from climate change and environmental problems,
such as ocean acidification, ice melting in the Arctic, land degradation and
use, water shortages, chemical pollution and biodiversity loss, indicate that
the planet is approaching its sustainability boundaries. For example, without
improvements in efficiency, water demand is projected to overshoot supply by 40
% in 20 years time. Forests are disappearing at an
alarmingly high rate of 5 million hectares per year. Interactions between
resources can cause systemic risks – with the depletion
of one resource generating an irreversible tipping point for other resources
and ecosystems. Based on current trends, the equivalent of more than two planet
Earths will be needed by 2050 to support the growing global population.
The sustainable supply and resource efficient management of raw
materials, including their exploration, extraction, processing, re-use,
recycling and substitution, is essential for the functioning of modern
societies and their economies. European sectors, such as construction,
chemicals, automotive, aerospace, machinery and equipment, which provide a
total added value of some EUR 1.3 trillion and employment for approximately 30
million people, heavily depend on access to raw materials. However, the supply
of raw materials to the Union is coming under increasing pressure. Furthermore,
the Union is highly dependent on imports of strategically important raw
materials, which are being affected at an alarming rate by market distortions.
Moreover, the Union still has valuable mineral deposits, whose exploration and
extraction is limited by a lack of adequate technologies and hampered by
increased global competition. Given the importance of raw materials for
European competitiveness, the economy and for their application in innovative
products, the sustainable supply and resource efficient management of raw
materials is a vital priority for the Union.
The ability of
the economy to adapt and become more climate change resilient, resource
efficient and at the same time remain competitive depends on high levels of
eco-innovation, of both a societal and technological nature. With the global
market for eco-innovation worth around EUR 1 trillion per annum and expected to
triple by 2030, eco-innovation represents a major opportunity to boost
competitiveness and job creation in European economies. 
5.2.        Rationale and Union added
value
Meeting Union and international targets for greenhouse gas emissions
and concentrations and coping with climate change impacts requires the
development and deployment of cost-effective technologies, and mitigation and
adaptation measures. Union and global policy frameworks must ensure that
ecosystems and biodiversity are protected, valued and appropriately restored in
order to preserve their ability to provide resources and services in the
future. Research and innovation can help secure reliable and sustainable access
to raw materials and ensure a significant reduction in resource use and
wastage. 
The
focus of Union actions shall therefore be on supporting key Union objectives
and policies including: the Europe 2020 strategy; the Innovation Union;
Resource-Efficient Europe and the corresponding Roadmap; the Roadmap for moving
to a competitive low carbon economy in 2050[30]; Adapting to
climate change: Towards a European framework for action[31];
the Raw Materials Initiative[32]; the Union's Sustainable
Development Strategy[33]; an Integrated Maritime
Policy for the Union[34]; the Marine Strategy
Framework Directive[35]; the Eco-innovation
Action Plan and the Digital Agenda for Europe[36]. These actions shall reinforce the ability
of society to become more resilient to environmental and climate change and
ensure the availability of raw materials.
Given the
transnational and global nature of the climate and the environment, their scale
and complexity, and the international dimension of the raw materials supply
chain, activities have to be carried out at the Union level and beyond. The
multi-disciplinary character of the necessary research requires pooling
complementary knowledge and resources in order to effectively tackle this challenge.
Reducing resource use and environmental impacts, whilst increasing
competitiveness, will require a decisive societal and technological transition
to an economy based on a sustainable relationship between nature and human
well-being. Coordinated research and innovation activities will improve the
understanding and forecasting of climate and environmental change in a systemic
and cross-sectoral perspective, reduce uncertainties, identify and assess
vulnerabilities, risks, costs and opportunities, as well as expand the range
and improve the effectiveness of societal and policy responses and solutions.
Actions will also seek to empower actors at all levels of society to actively
participate in this process.
Addressing the availability of raw materials calls for
co-ordinated research and innovation efforts across many disciplines and
sectors to help provide safe, economically feasible, environmentally sound and
socially acceptable solutions along the entire value chain (exploration,
extraction, processing, re-use, recycling and substitution). Innovation in these fields will provide
opportunities for growth and jobs, as well as
innovative options involving science, technology, the economy, policy and
governance. For this reason, a European Innovation Partnership on Raw
Materials is being prepared.
Eco-innovation
will provide valuable new opportunities for growth and jobs. Solutions
developed through Union level action will counter key threats to industrial
competitiveness and enable rapid uptake and replication across the Single
Market and beyond. This will enable the transition towards a green economy that
takes into account the sustainable use of resources. Partners for this approach
will include: International, European and national policy makers; international
and Member State research and innovation programmes; European business and
industry; the European Environment Agency and national environment agencies;
and other relevant stakeholders. In addition to bilateral and regional
cooperation, Union level actions will also support relevant international
efforts and initiatives, including the Intergovernmental Panel on Climate
Change (IPCC), the Intergovernmental Platform on Biodiversity and Ecosystem
Services (IPBES) and the Group on Earth Observations (GEO).
5.3.        Broad lines of the
activities
(a)                   
Fighting and adapting to climate change
The aim is to develop and assess innovative, cost-effective and
sustainable adaptation and mitigation measures, targeting both CO2
and non-CO2 greenhouse gases, and underlining both technological and
non-technological green solutions, through the generation of evidence for
informed, early and effective action and the networking of the required
competences. Activities shall focus on: improving the understanding of climate
change and the provision of reliable climate projections; assessing impacts,
vulnerabilities and developing innovative cost-effective adaptation and risk
prevention measures; supporting mitigation policies.
(b)                   
Sustainably managing natural resources and
ecosystems
The aim is to provide knowledge for the management of natural
resources that achieves a sustainable balance between limited resources and the
needs of society and the economy. Activities shall focus on: furthering our
understanding of the functioning of ecosystems, their interactions with social
systems and their role in sustaining the economy and human well-being; and
providing knowledge and tools for effective decision making and public
engagement.
(c)                   
Ensuring the sustainable supply of non-energy
and non-agricultural raw materials
The aim is to
improve the knowledge base on raw materials and develop innovative solutions
for the cost-effective and environmentally friendly exploration, extraction,
processing, recycling and recovery of raw materials and for their substitution
by economically attractive alternatives with a lower environmental impact. Activities
shall focus on: improving the knowledge base on the availability of raw
materials; promoting the sustainable supply and use of raw materials; finding
alternatives for critical raw materials; and improving societal awareness and
skills on raw materials.
(d)                   
Enabling the transition towards a green economy
through eco-innovation
The aim is to
foster all forms of eco-innovation that enable the transition to a green
economy. Activities shall focus on: strengthening
eco-innovative technologies, processes, services and products and boosting
their market uptake and replication, with special attention for SMEs;
supporting innovative policies and societal changes; measuring and assessing progress
towards a green economy; and fostering resource efficiency through digital
systems.
(e)                   
Developing comprehensive and sustained global
environmental observation and information systems 
The aim is to
ensure the delivery of the long-term data and information required to address
this challenge. Activities shall focus on the capabilities, technologies and
data infrastructures for earth observation and monitoring that can continuously
provide timely and accurate information, forecasts and projections. Free, open
and unrestricted access to interoperable data and information will be
encouraged.
6.           INCLUSIVE, INNOVATIVE AND SECURE
SOCIETIES
6.1.        Specific objective
The specific
objective is to foster inclusive, innovative and secure European societies in a
context of unprecedented transformations and growing global interdependencies.
Europe is
confronted with major socio-economic challenges which significantly affect its
future - such as growing economic and cultural interdependencies, ageing,
social exclusion and poverty, inequalities and migration flows, closing the
digital divide, fostering a culture of innovation and creativity in society and
enterprises, as well ensuring security and freedom, trust in democratic
institutions and between citizens within and across borders. These challenges
are enormous and they call for a common European approach. 
First, significant inequalities persist in
the Union both across countries and within them. In 2010 the Human Development
Index, an aggregate measure of progress in health, education and income, scores
the Union's Member States between 0,743 and 0,895, thus reflecting considerable
divergences between countries. Significant gender inequalities also persist:
for instance, the gender pay gap in the Union remains at 17.8 % in favour of
men[37]. One in every six Union
citizens today (around 80 million people) is at risk of poverty. Over the past
two decades the poverty of young adults and families with children has risen.
The youth unemployment rate is above 20 %. 150 million Europeans (some 25 %)
have never used the internet and may never get sufficient digital literacy.
Political apathy and polarisation in elections has also risen, reflecting
citizen's faltering trust in current political systems. These figures suggest
that some social groups and communities are persistently left out of social and
economic development and/or democratic politics.
Second,
Europe's productivity and economic growth rates have been relatively decreasing
for four decades. Furthermore, its share of the global knowledge production and
its innovation performance lead compared to key emerging economies such as
Brazil and China are declining fast. Although Europe has a strong research
base, it needs to make this base a powerful asset for innovative goods and
services. Whereas it is well-known that Europe needs to invest more in science
and innovation, it will also have to coordinate these investments much more
smartly than in the past: more than 95 % of national R&D budgets is spent
without any coordination across the Union, a formidable potential waste of
resources at a time of shrinking funding possibilities. Furthermore, the
innovation capacities of the Member States, despite some recent convergence,
remain very different, with large gaps between 'innovation leaders' and 'modest
innovators'[38].
Third, many forms of insecurity, whether
crime, violence, terrorism, cyber attacks, privacy abuses and other forms of
social and economic disorders increasingly affect citizens. According to
estimates, there is likely to be up to 75 million direct victims of crime every
year in Europe[39]. The direct cost of
crime, terrorism, illegal activities, violence and disasters in Europe has been
estimated at at least EUR 650 billion (about 5 % of the Union's GDP) in 2010. A
vivid example of the consequences of terrorism is the attack against the Twin
Towers in Manhattan on 11 September 2001. Thousands of lives were lost and it
is estimated that this event caused losses in US productivity amounting to US$
35 billion, US$ 47 billion in total output and a rise in unemployment by almost
1 % in the following quarter. Citizens, firms and institutions are increasingly
involved in digital interactions and transactions in social, financial and
commercial areas of life but the development of Internet has also led to cyber
crime worth billion of Euros each year and breaches of privacy affecting
individual or associations across the continent. The development of insecurity
in everyday life and because of unexpected situations is likely to affect the
citizens' trust not only in institutions but also in each other. 
These
challenges must be tackled together and in innovative ways because they
interact in complex and often unexpected ways. Innovation may lead to weakening
inclusiveness, as can be seen, for instance, in the phenomena of digital divide
or labour market segmentation. Social innovation, social trust and security are
sometimes difficult to reconcile in policies, for instance in socially
depressed areas in large cities in Europe. Besides, the conjunction of
innovation and citizens' evolving demands also lead policymakers and economic
and social actors to find new answers that ignore established boundaries
between sectors, activities, goods or services. Phenomena such as the growth of
Internet, of the financial systems, of the ageing economy and of the ecological
society abundantly show how it is necessary to think and respond to these
issues across their dimensions of inclusiveness, innovation and security at the
same time.
The in-built
complexity of these challenges and the evolutions of demands thus make it
essential to develop innovative research and new smart technologies, processes
and methods, social innovation mechanisms, coordinated actions and policies
that will anticipate or influence major evolutions for Europe. It calls for
understanding the underlying trends and impacts at play in these challenges and
rediscovering or reinventing successful forms of solidarity, coordination and
creativity that make Europe a distinctive model of inclusive, innovative and
secure societies compared to other world regions. It requires a more strategic
approach to cooperation with third countries. Finally, as security policies
should interact with different social policies, enhancing the societal
dimension of security research will be an important aspect of this challenge.
6.2.        Rationale and Union added
value
These
challenges ignore national borders and thus call for more complex comparative
analyses of mobility (of people, goods, services and capital but also of
competences and knowledge) and forms of institutional cooperation,
intercultural interactions and international cooperation. If they are not
better understood and anticipated, forces of globalisation also push European
countries to compete with each other rather than cooperate, thus accentuating
differences in Europe rather than commonalities and a right balance between
cooperation and competition. Addressing such critical socio-economic challenges
only at national level carries the danger of inefficient use of resources,
externalisation of problems to other European and non-European countries and
the accentuation of social, economic and political tensions that may directly
affect the aims of the European Treaty regarding its values, in particular
Title I of the Treaty on European Union.
In order to
build inclusive, innovative and secure societies, Europe requires a response which implies to develop new knowledge,
technologies and capabilities as well as the identification of policy options.
Such endeavour will help Europe tackle its challenges not only internally but
also as a global player on the international scene. This, in turn, will also
help Member States benefit from experiences elsewhere and allow them to better
define their own specific actions corresponding to their respective contexts. 
Fostering new modes of cooperation between
countries within the Union and worldwide, as well as across relevant research
and innovation communities, will therefore be a central task under this challenge.
Engaging citizens and industry, supporting social and
technological innovation processes, encouraging smart and participatory public
administration, as well as promoting evidence based policymaking will be
systematically pursued in order to enhance the relevance of all these
activities for policymakers, social and economic actors and citizens. In this
regard, research and innovation will be a precondition for the competitiveness
of European industries and services, in particular in the areas of security,
digital development and privacy protection.
Union funding under this challenge will
thus support the development, implementation and adaptation of key Union
policies, notably Europe 2020 priorities for smart, sustainable and inclusive
growth, the Common Foreign and Security Policy and the Union's Internal
Security Strategy, including policies on disaster prevention and response. Coordination
with the Joint Research Centre direct actions will be pursued.
6.3.        Broad lines of activities
6.3.1.     Inclusive societies
The aim is to enhance solidarity as well as
social, economic and political inclusion and positive inter-cultural dynamics
in Europe and with international partners, through cutting-edge science and
interdisciplinarity, technological advances and organisational innovations.
Humanities research can play an important role here. Research shall support
policymakers in designing policies that combat poverty and prevent the
development of various forms of divisions, discriminations and inequalities in
European societies, such as gender inequalities or digital or innovation
divides, and with other world regions. It shall in particular feed into the
implementation and the adaptation of the Europe 2020 strategy and the broad
external action of the Union. Specific measures shall be taken to unlock
excellence in less developed regions, thereby widening participation in Horizon
2020.
The focus of activities shall be to:
(a)                   
promote smart, sustainable and inclusive growth;

(b)                   
build resilient and inclusive societies in Europe;

(c)                   
strengthen Europe's role as a global actor; 
(d)                   
close the research and innovation divide in
Europe.
6.3.2.     Innovative societies 
The aim is to foster the development of
innovative societies and policies in Europe through the engagement of citizens,
enterprises and users in research and innovation and the promotion of
coordinated research and innovation policies in the
context of globalisation. Particular support will be provided for the
development of the ERA and the development of framework conditions for
innovation.
The focus of
activities shall be to:
(a)                   
strengthen the evidence
base and support for the Innovation Union and ERA;
(b)                   
explore new forms of innovation, including
social innovation and creativity;
(c)                   
ensure societal engagement in research and
innovation; 
(d)                   
promote coherent and effective cooperation with
third countries.
6.3.3.     Secure societies
The aim is to support Union policies for
internal and external security and to ensure cyber security, trust and privacy
in the Digital Single Market, whilst at the same time improving the
competitiveness of the Union's security, ICT and service industries. This will
be done by developing innovative technologies and solutions that address
security gaps and lead to the prevention of security threats. These mission-oriented
actions will integrate the demands of different end-users (citizens,
businesses, and administrations, including national and international
authorities, civil protections, law enforcement, border guards, etc.) in order
to take into account the evolution of security threats and privacy protection
and the necessary societal aspects.
The focus of activities shall be to:
(a)                   
fight crime and terrorism;
(b)                   
strengthen security through border management;
(c)                   
provide cyber security;
(d)                   
increase Europe's resilience to crises and
disasters;
(e)                   
ensure privacy and freedom in the Internet and
enhance the societal dimension of security.
PART IV
Non-Nuclear Direct Actions of the Joint Research Centre (JRC)
1.           Specific objective
The specific objective is to provide
customer-driven scientific and technical support to Union policies, while flexibly responding to new policy demands.
2.           Rationale and Union added value
The Union has defined an ambitious policy
agenda to 2020 which addresses a set of complex and interlinked challenges,
such as sustainable management of resources and competitiveness. In order to
successfully tackle these challenges, robust scientific evidence is needed
which cuts across different scientific disciplines and allows the sound
assessment of policy options. The JRC, further strengthening its role as the
science service for Union policy making will provide the required scientific
and technical support throughout all stages of the policy-making cycle, from
conception to implementation and assessment. To this aim it will focus its
research clearly on Union policy priorities while enhancing cross-cutting
competences. The JRC's independence of special interests, whether private or
national, combined with its scientific-technical reference role enable it to
facilitate the necessary consensus building between stakeholders and policy
makers. Member States and Union citizens' benefit from the research of the JRC,
most visibly in areas such as health and consumer protection, environment, safety
and security, and management of crises and disasters. 
The JRC is an integral part of the ERA and
will continue to actively support its functioning through close collaboration
with peers and stakeholders, opening access to its facilities and through the training
of researchers. This will also promote the integration of new Member States and
Associated Countries; for these, the JRC will continue to provide dedicated
training courses on the scientific-technical basis of the body of Union law. The
JRC will establish coordination links with relevant other Horizon 2020 specific
objectives. As a complement to its direct actions and for the purpose of
further integration and networking in the ERA, the JRC may also participate in Horizon
2020 indirect actions and co-ordination instruments in areas where it has the
relevant expertise to produce added value. 
3.           Broad lines of activities
The JRC activities in Horizon 2020 will focus
on the Union policy priorities and the societal challenges addressed by them;
they are aligned with Europe 2020 and its main objectives of smart, sustainable
and inclusive growth, Security and Citizenship, and Global Europe.
The JRC's key competence areas will be
energy, transport, environment and climate change, agriculture and food
security, health and consumer protection, information and communication
technologies, reference materials, and safety and security (including nuclear
in the Euratom programme).
These
competence areas will be significantly enhanced with capacities to address the
full policy cycle and to assess policy options. This includes strengthening
capacities in 
(a)                   
anticipation and foresight - pro-active
strategic intelligence on trends and events in science, technology and society
and their possible implications for public policy. 
(b)                   
economics - for an integrated service covering
both the scientific-technical and the macro-economic aspects. 
(c)                   
modelling - focussing on sustainability and
economics and making the Commission less dependent on outside suppliers for
vital scenario analysis. 
(d)                   
policy analysis - to allow cross-sectoral
investigation of policy options. 
(e)                   
impact assessment - providing scientific
evidence to support policy options. 
The JRC shall continue to pursue excellence
in research as the basis for credible and robust scientific-technical policy
support. To that aim, it will strengthen collaboration with European and
international partners, i.a. by participation in indirect actions. It will also
carry out exploratory research and build up competences in emerging,
policy-relevant areas on a selective basis. 
The JRC shall focus on: 
3.1         Excellent science
Carry out research to
enhance the scientific evidence base for policy making and examine emerging
fields of science and technology, including through an exploratory research
programme.
3.2         Industrial leadership 
Contribute to European
competitiveness through support to the standardisation process and standards
with pre-normative research, development of reference materials and
measurements, and harmonization of methodologies in five focal areas (energy;
transport; Digital Agenda; security and safety; consumer protection). Carry out
safety assessments of new technologies in areas such as energy and transport
and health and consumer protection. Contribute to facilitating the use,
standardisation and validation of space technologies and data, in particular to
tackle the societal challenges.
3.3         Societal challenges
(a)                   
Health, demographic change and wellbeing
Contribute to health and consumer protection through scientific and technical support in areas such as food, feed,
consumer products; environment and health; health-related diagnostic and
screening practices; and nutrition and diets.
(b)                   
Food security, sustainable agriculture, marine
and maritime research and the bio-economy
Support the development, implementation and
monitoring of European agriculture and fisheries policies, including food safety
and security and the development of a bio- economy through e.g. crop
production forecasts, technical and socio-economic analyses and modelling.
(c)                   
Secure, clean and efficient energy
Support the 20/20/20 climate and energy
targets with research on technological and economic aspects of energy
supply, efficiency, low-carbon technologies, energy/electricity transmission
networks.
(d)                   
Smart, green and integrated transport
Support the Union's policy for the sustainable,
safe and secure mobility of persons and goods with laboratory studies,
modelling and monitoring approaches, including low carbon technologies for
transport, such as electrification, clean and efficient vehicles and alternative
fuels, and smart mobility systems.
(e)                   
Climate action, resource efficiency and raw
materials
Investigate the cross-sectoral challenges of the
sustainable management of natural resources through monitoring of key
environmental variables and the development of an integrated modelling
framework for sustainability assessment. 
Support resource efficiency, emission
reductions and sustainable supply of raw materials through the integrated
social, environmental and economic assessments of clean production processes,
technologies, and products and services. 
Support Union development policy goals
with research to help ensure adequate supplies of essential resources focussing
on monitoring environmental and resource parameters, food safety and security
related analyses, and knowledge transfer.
(f)                     
Inclusive, innovative and secure Societies
Contribute to and monitor the implementation of
the Innovation Union with macro-economic analyses of the drivers and
barriers of research and innovation, and development of methodologies, scoreboards
and of indicators. 
Support the European Research Area (ERA)
by monitoring the functioning of the ERA and analysing drivers of and barriers
to some of its key elements; and by research networking, training, opening JRC
facilities and databases to users in Member States and Candidate and Associated
Countries.
Contribute to the key goals of the Digital
Agenda by qualitative and quantitative analyses of
economic and social aspects (Digital Economy, Digital Society, Digital Living).

Support internal safety and security
through the identification and assessment of the
vulnerability of critical infrastructures as vital components of societal
functions; and through the operational performance assessment of technologies related
to the digital identity; Address global security challenges including
emerging or hybrid threats through the development of advanced tools for
information mining and analysis as well as for crisis management
Enhance the Union capacity for managing natural
and man-made disasters by strengthening the monitoring of infrastructures
and the development of global multi-hazard early warning and risk management
information systems, making use of satellite-based earth observation frameworks.

PART V
The European Institute of Innovation and Technology (EIT)
1.           Specific objective
The specific objective is to integrate
the knowledge triangle of research, innovation and education and thus to
reinforce the Union's innovation capacity and address societal challenges. 
Europe is facing a number of structural
weaknesses when it comes to innovation capacity and the ability to deliver new
services, products and processes. Among the main issues at hand are Europe's
relatively poor record in talent attraction and retention; the underutilisation
of existing research strengths in terms of creating economic or social value;
low levels of entrepreneurial activity; a scale of resources in poles of
excellence which is insufficient to compete globally; and an excessive number
of barriers to collaboration within the knowledge triangle of higher education,
research and business on a European level. 
2.           Rationale and Union
added value
If Europe is to compete on an international
scale, these structural weaknesses need to be overcome. The elements identified
above are common across Member States and affect the Union's innovation
capacity as a whole. 
The EIT will address these issues by
promoting structural changes in the European innovation landscape. It will do
so by fostering the integration of higher education, research and innovation of
the highest standards, thereby creating new environments conducive to
innovation, and by promoting and supporting a new generation of entrepreneurial
people. In doing so, the EIT will contribute fully to the objectives of Europe 2020
and notably the Innovation Union and Youth on the Move flagship initiatives. 
Integrating education and
entrepreneurship with research and innovation
The specific feature of the EIT is to
integrate education and entrepreneurship with research and innovation as links
in a single innovation chain across the Union and beyond.
Business logic and a results-oriented
approach
The EIT, via its KICs, operates in line
with business logic. Strong leadership is a pre-requisite: each KIC is driven
by a CEO. KIC partners are represented by single legal entities to allow more
streamlined decision-making. KICs must produce annual business plans, including
an ambitious portfolio of activities from education to business creation, with
clear targets and deliverables, looking for both market and societal impact.
The current rules concerning participation, evaluation and monitoring of KICs
allow fast-track, business-like decisions.
Overcoming
fragmentation with the aid of long-term integrated partnerships
The EIT KICs are highly integrated
ventures, bringing together partners from industry, higher education, research
and technology institutes, renowned for their excellence. KICs allow
world-class partners to unite in new, cross-border configurations, optimise
existing resources and open up access to new business opportunities via new
value chains, addressing higher-risk, larger-scale challenges.
Nurturing Europe’s main innovation
asset: its highly talented people 
Talent is a key ingredient of innovation.
The EIT nurtures people and interactions between them, by putting students,
researchers and entrepreneurs at the centre of its innovation model. The EIT
will provide an entrepreneurial and creative culture and cross-disciplinary
education to talented people, via EIT-labelled Masters and PhD degrees,
intended to emerge as an internationally recognised brand of excellence. In
doing so, the EIT strongly promotes mobility within the knowledge triangle. 
3.           Broad lines of the activities
The EIT shall operate mainly, but not
exclusively, via the Knowledge and Innovation Communities (KICs) in areas of
societal challenges that are of utmost relevance to Europe’s common future.
While the KICs have a large degree of autonomy in defining their own strategies
and activities, there are a number of innovative features common to all KICs.
The EIT will moreover enhance its impact by making the experiences from the
KICs available across the Union and by actively fostering a new culture of
knowledge sharing. 
(a)                   
Transferring and applying higher education,
research and innovation activities for new business creation
The EIT shall aim to unleash the innovative
potential of people and capitalise on their ideas, irrespective of their place
in the innovation chain. Thereby, the EIT will also help to address the
‘European paradox’ that excellent existing research is far from being harnessed
to the full. In doing so, the EIT shall help to bring ideas to the market.
Chiefly via its KICs and its focus on fostering entrepreneurial mindsets, it
will create new business opportunities in the form of both start-ups and
spin-offs but also within existing industry. 
(b)                   
Cutting-edge and innovation-driven research in
areas of key economic and societal interest
The EIT’s strategy and activities shall be
driven by a focus on societal challenges that are of utmost relevance to the
future, such as climate change or sustainable energy. By addressing key
societal challenges in a comprehensive way, the EIT will promote inter- and
multi-disciplinary approaches and help focus the research efforts of the
partners in the KICs.
(c)                   
Development of talented, skilled and
entrepreneurial people with the aid of education and training 
The EIT shall fully integrate education and
training at all stages of careers and develop new and innovative curricula to
reflect the need for new profiles engendered by complex societal and economic
challenges. To this end, the EIT will play a key role in encouraging
recognition of new degrees and diplomas in Member States.
The EIT will also play a substantial role in
fine-tuning the concept of ‘entrepreneurship’ via its educational programmes,
which promote entrepreneurship in a knowledge-intensive context, building on
innovative research and contributing to solutions of high societal relevance. 
(d)                   
Dissemination of best practice and systemic
knowledge-sharing
The EIT shall aim to pioneer new approaches in
innovation and to develop a common innovation and knowledge-transfer culture,
among other things by sharing the diverse experience of its KICs via various
dissemination mechanisms, such as a stakeholder platform and a fellowship
scheme. 
(e)                   
International dimension
The EIT acts conscientious of the global
context it operates in and shall help to forge links with key international
partners. By scaling up centres of excellence via the KICs and by fostering new
educational opportunities, it will aim to make Europe more attractive for
talent from abroad.
(f)                     
Enhancing European wide impact via an innovative
funding model
The EIT will make a strong contribution to the
objectives set in Horizon 2020, in particular by addressing societal challenges
in a way complementing other initiatives in these areas. It will test out new
and simplified approaches to funding and governance and thereby play a
pioneering role within the European innovation landscape. Its approach to
funding will be firmly based on a strong leverage effect, mobilising both
public and private funds. Moreover, it will employ entirely new vehicles for
targeted support to individual activities through the EIT Foundation.
(g)                   
Linking regional development to European
opportunities
Via the KICs and their co-location centres –
nodes of excellence, brining together higher education, research and business
partners in a given geographical location – the EIT will also be linked to
regional policy. In particular, it shall ensure a better connection between
higher education institutions and regional innovation and growth, in the
context of regional and national smart specialisation strategies. In doing so,
it will contribute to the objectives of the Union’s Cohesion Policy.
Annex II
Breakdown of the budget
The indicative
breakdown for Horizon 2020 is as follows (in EUR million):
 I           Excellent science, of which: || 27818 
                 1.             The European Research Council || 15008 
                 2.             Future and Emerging Technologies || 3505 
                 3.             Marie Curie actions on skills, training and career development || 6503 
                 4.             European research infrastructures (including eInfrastructures) || 2802 
 II         Industrial leadership, of which: || 20280 
                 1.             Leadership in enabling and industrial technologies* || 15580 of which 500 for EIT 
                 2.             Access to risk finance** || 4000 
                 3.             Innovation in SMEs || 700 
 III        Societal challenges, of which || 35888 
                 1.             Health, demographic change and wellbeing; || 9077 of which 292 for EIT 
 2.             Food security, sustainable agriculture, marine and maritime research and the bio- economy; || 4694 of which 150 for EIT 
                 3.             Secure, clean and efficient energy || 6537 of which 210 for EIT 
                 4.             Smart, green and integrated transport || 7690 of which 247 for EIT 
                 5.             Climate action, resource efficiency and raw materials || 3573 of which 115 for EIT 
                 6.             Inclusive, innovative and secure societies || 4317 of which 138 for EIT 
 European Institute of Innovation and Technology (EIT) || 1542 + 1652*** 
 Non-nuclear direct actions of the Joint Research Centre || 2212 
 TOTAL || 87740 
*Including EUR 8975 million for Information
and Communication Technologies (ICT) of which EUR 1795 million for photonics
and micro-and nanoelectronics, EUR 4293 million for nanotechnologies, advanced
materials and advanced manufacturing and processing, EUR 575 million for
biotechnology and EUR 1737 million for space. As a result, EUR 6663 million
will be available to support Key Enabling Technologies.
** Around EUR 1131
million of this amount may go towards the implementation of Strategic Energy
Technology Plan (SET Plan) projects. Around one third of this may go to SMEs.
*** The total
amount will be made available through allocations as foreseen in Article 6(3).
The second allocation of EUR 1652 million shall be made available pro-rata from
the budgets of the Societal challenges and Leadership in enabling and
industrial technologies, on an indicative basis and subject to the review set
out in Article 26(1) 
LEGISLATIVE FINANCIAL STATEMENT
1.           FRAMEWORK OF THE PROPOSAL/INITIATIVE 
              1.1.    Title of the proposal/initiative 
              1.2.    Policy
area(s) concerned in the ABM/ABB structure
              1.3.    Nature
of the proposal/initiative 
              1.4.    Objective(s)

              1.5.    Grounds
for the proposal/initiative 
              1.6.    Duration
and financial impact 
              1.7.    Management
method(s) envisaged 
2.           MANAGEMENT MEASURES 
              2.1.    Monitoring
and reporting rules 
              2.2.    Management
and control system 
              2.3.    Measures
to prevent fraud and irregularities 
3.           ESTIMATED FINANCIAL IMPACT OF THE
PROPOSAL/INITIATIVE 
              3.1.    Heading(s)
of the multiannual financial framework and expenditure budget line(s) affected 
              3.2.    Estimated
impact on expenditure 
              3.2.1. Summary of
estimated impact on expenditure 
              3.2.2. Estimated impact
on operational appropriations 
              3.2.3. Estimated impact
on appropriations of an administrative nature
              3.2.4. Compatibility
with the current multiannual financial framework
              3.2.5. Third-party
participation in financing 
              3.3.    Estimated impact on revenue
LEGISLATIVE FINANCIAL STATEMENT
FRAMEWORK OF THE PROPOSAL/INITIATIVE 
1.1.        Title of the
proposal/initiative 
Horizon 2020 – The Framework Programme for Research and Innovation
(2014-2020) 
1.2.        Policy area(s) concerned
in the ABM/ABB structure[40] 
- 08 - Research and Innovation
- 09 - Information Society and Media
- 02 - Enterprise and Industry
- 05 - Agriculture
- 32 - Energy
- 06 - Mobility and Transport
- 15 - Education and Culture
- 07 - Environment and climate action
- 10 - Joint Research Centre
1.3.        Nature of the
proposal/initiative 
ý The
proposal/initiative relates to a new action 
¨ The
proposal/initiative relates to a new action following a pilot
project/preparatory action[41] 
¨ The
proposal/initiative relates to the extension of an existing action 
¨ The
proposal/initiative relates to an action redirected towards a new action 
1.4.        Objectives
1.4.1.     The Commission's
multiannual strategic objective(s) targeted by the proposal/initiative 
Horizon 2020 – The Framework Programme for Research and Innovation
(2014-2020) (‘Horizon 2020’) will contribute to the Europe 2020 strategy,
including the completion of the European Research Area, by stimulating smart,
sustainable and inclusive growth:
- Smart growth – develop an economy based on knowledge and
innovation (implementing the Innovation Union flagship initiative).
- Sustainable growth – promote a more resource efficient, greener
and more competitive economy.
- Inclusive growth – foster a high-employment economy delivering
economic, social and territorial cohesion.
1.4.2.     Specific objective(s) and
ABM/ABB activity(ies) concerned 
- Part I: Priority 'Excellent Science'
- Part II: Priority 'Industrial Leadership'
- Part III: Priority 'Societal Challenges'
- Part IV: Non-nuclear direct actions of the Joint Research Centre 
- Part V: 'Integrating the knowledge triangle' (European Institute
of Innovation and Technology)
ABM/ABB activity(ies) concerned
- 08 - Research and Innovation
- 09 - Information Society and Media
- 02 - Enterprise and Industry
- 05 - Agriculture
- 32 - Energy
- 06 - Mobility and Transport
- 15 - Education and Culture
- 07 - Environment and climate action 
- 10 - Joint Research Centre
1.4.3.     Expected result(s) and
impact
Specify the effects
which the proposal/initiative should have on the beneficiaries/groups targeted.
It is estimated that by 2030 Horizon 2020 is expected to generate an
extra 0.92 per cent of GDP, 1.37 per cent of exports, -0.15 per cent of
imports, and 0.40 per cent of employment. 
For more information, please read the Commission Staff Working Paper
on the impact assessment of Horizon 2020 (‘IA’) accompanying this legislative
proposal. 
1.4.4.     Indicators of results and
impact 
Specify the
indicators for monitoring implementation of the proposal/initiative.
The following table specifies for the general and specific
objectives of Horizon 2020 a limited number of key indicators for assessing
results and impacts.
Additional – including newly developed – indicators will be used to
capture the various types of results and impacts for the different specific
activities.
General objective:
Contribute to the objectives of the Europe 2020 strategy and to the
completion of the European Research Area
- The Europe 2020 R&D target (3 % of GDP)
Current:          2.01 % of GDP (EU-27, 2009)
Target:           3 % of GDP (2020)
- The Europe 2020 innovation headline indicator
Current:          New approach
Target:           Substantial weight of fast-growing innovative
enterprises in the economy
Part I: Priority 'Excellent Science'
Specific Objectives
* European Research Council
-Share of publications from ERC funded projects which are among the
top 1 % highly cited
Current:          0.8 % (EU publications from 2004 to 2006, cited
until 2008)
Target:           1.6 % (ERC publications 2014 - 2020)
-Number of institutional policy and national/regional policy
measures inspired by ERC funding
Current:          20 (estimate 2007 – 2013)
Target:           100 (2014 – 2020)
* Future and Emerging Technologies
-Publications in peer-reviewed high impact journals
Current:          New approach
Target:           25 publications per 10
Million € funding (2014 - 2020)

- Patent applications in Future and Emerging Technologies 
Current:          New approach
Target:           1 patent application per 10 Million € funding
(2014 – 2020)
* Marie Curie actions on skills, training and career development
-Cross-sector and cross-country circulation of researchers,
including PhD candidates
Current:          50.000, around 20 % PhD candidates (2007 - 2013)
Target:           65.000, around 40 % PhD candidates (2014 - 2020)
* European research infrastructures (including eInfrastructures)
-Research infrastructures which are made accessible to all
researchers in Europe and beyond through Union support
Current:          650 (2012)
Target:           1000(2020)
Part II: Priority 'Industrial Leadership'
Specific Objectives
*Leadership in enabling and industrial technologies (ICT,
Nanotechnologies, Advanced Materials, Biotechnologies, Advanced manufacturing
and Space)
- Patent applications obtained in the different enabling and
industrial technologies 
Current:          New approach
Target:           3 patent applications per 10 Million € funding
(2014 – 2020)
-Access to risk finance
- Total investments mobilised via debt financing and Venture Capital
investments
Current:          New approach
Target:           EUR 100 million total investment per EUR 10
million Union contribution (2014 - 2020)
* Innovation in SMEs
- Share of participating SMEs introducing innovations new to the
company or the market (covering the period of the project plus three years)
Current:          New approach
Target:           50 %
Part III: Priority 'Societal Challenges'
Specific Objectives
For each of the challenges, progress shall be assessed against the
contribution to the following specific objectives which are detailed in Annex I
of Horizon 2020 together with descriptions of the substantive advancement
needed for the achievement of the challenges and policy relevant indicators:
-Improve the lifelong health and wellbeing of all.
-Secure sufficient
supplies of safe and high quality food and other bio-based products, by
developing productive and resource-efficient primary production systems,
fostering ecosystem services, alongside competitive and low carbon supply
chains. 
-Make the transition to a reliable, sustainable and competitive
energy system, in the face of increasingly scarce resources, increasing energy
needs and climate change. 
-Achieve a European transport system that is resource-efficient,
environmentally-friendly, safe and seamless for the benefit of citizens, the
economy and society.
-Achieve a resource efficient and climate change resilient economy and
a sustainable supply of raw materials, in order to meet the needs of a growing
global population within the sustainable limits of the planet's natural
resources. 
-Foster inclusive, innovative and secure European societies in a
context of unprecedented transformations and growing global interdependencies.
Additional performance indicators are:
- Publications in
peer-reviewed high impact journals in the area of the different Societal
Challenges
Current:          New approach (For FP7(2007-2010), 8149
publications in total - preliminary figure)
Target:           On average, 20 publications per 10 Million €
funding (2014 – 2020)
- Patent applications in the area of the different Societal
Challenges 
Current:          153 (FP7 Cooperation Programme 2007-10,
preliminary figures)
Target:           On average, 2 patent applications per 10 Million €
funding (2014 – 2020)
- Number of Union pieces of legislation referring to activities
supported in the area of the different Societal Challenges
Current:          New approach
Target:           On average, 1 per 10 Million € funding (2014 -
2020)
Part IV: Non-nuclear direct actions of the Joint Research Centre 
Provide customer-driven scientific and technical support to Union policies

- Number of occurrences of tangible specific impacts on European
policies resulting from technical and scientific policy support provided by the
Joint Research Centre
Current:          175 (2010)
Target:           230 (2020)
- Number of peer reviewed publications 
Current:          430 (2010)
Target:           500 (2020)
Part V: 'Integrating the knowledge triangle' (European
Institute of Innovation and Technology)
- Organisations from universities, business and research integrated
in Knowledge and Innovation Communities ('KICs')
Current:          New approach
Target:           540 (2020)       
- Collaboration inside the knowledge triangle leading to the
development of innovative products and processes
Current:          New approach
Target:           600 start-ups and spin-offs created by KICs students/researchers/professors;
6000 innovations in existing businesses developed by KIC students/researchers/professors
1.5.        Grounds for the
proposal/initiative 
1.5.1.     Requirement(s) to be met in
the short or long term 
-Improve the contribution of research and innovation to the
resolution of key societal challenges. 
-Boost Europe’s industrial
competitiveness through promoting technological leadership and getting good
ideas to market.
-Strengthen Europe’s science base.
-Achieve the European Research Area and increase its effectiveness
(cross-cutting objectives). 
For more information, please read the Commission Staff Working Paper
on the impact assessment of Horizon 2020 (‘IA’) accompanying this legislative
proposal.
1.5.2.     Added value of EU involvement
There is a clear case for public intervention to tackle the problems
outlined in 1.5.1 above. Markets alone will not deliver European leadership in
the new techno-economic paradigm. Large-scale public intervention through both
supply and demand measures will be needed to overcome the market failures
associated with systemic shifts in basic technologies.
However, Member States acting alone will not be able to make the
required public intervention. Their investment in research and innovation is
comparatively low, is fragmented and suffers from inefficiencies - a crucial
obstacle when it comes to technological paradigm shifts. It is difficult for
Member States on their own to accelerate technology development over a
sufficiently broad portfolio of technologies, or to tackle the lack of
transnational coordination.
As highlighted in the proposal for the next Multi-annual Financial
Framework, the Union is well positioned to add value by delivering the large-scale
investment in "blue sky" frontier research, in targeted applied
R&D, and in the associated education, training and infrastructures which
will help to strengthen our performance in thematically focused R&D and
enabling technologies; by supporting companies' efforts to exploit research
results and to turn them into marketable products, processes and services; and
by stimulating the uptake of these innovations. A series of cross-border
actions - concerning the coordination of national research funding, Union-wide
competition for research funding, researcher mobility and training,
coordination of research infrastructures, transnational collaborative research
and innovation, and innovation support - are most efficiently and effectively
organised at European level. Ex-post evaluation evidence has convincingly
demonstrated that Union research and innovation programmes support research and
other activities that are of great strategic importance for participants, and
that in the absence of Union support would simply not take place. In other
words, there are no substitutes for Union level support.
Evidence also demonstrates the European added value of policy
support actions, which derives from bringing together knowledge and experience
from different contexts, supporting cross-country comparisons of innovation
policy tools and experiences, and providing the opportunity to identify,
promote and test best practices from over the widest possible area.
The direct actions of the Joint Research Centre (‘JRC’) provide European
added value because of their unique European dimension. These benefits range
from responding to Commission’s need to have in-house access to scientific
evidence independent of national and private interests to direct benefits to
the Union citizens through contributions to policies which lead to improved
economic, environmental and social conditions. 
For more information, please read the Commission Staff Working Paper
on the impact assessment of Horizon 2020 (‘IA’) accompanying this legislative
proposal.
1.5.3.     Lessons learned from
similar experiences in the past
The programme builds on the experience accumulated from past
Framework Programmes for Research and Technological Demonstration (FP), the
Competitiveness and Innovation Programme (CIP), and the European Institute of
Technology and Innovation (EIT). 
Over a period spanning several decades, Union programmes have:
- succeeded in involving Europe's best researchers and institutes, 
- produced large-scale structuring effects, scientific, technological
and innovation impacts, micro-economic benefits, and downstream macro-economic,
social and environmental impacts for all Member States. 
Together with the success, there are important lessons to be learned
from the past:
- Research, innovation and education should be addressed in a more
coordinated manner;
- Research results better disseminated and valorised into new
products, processes and services;
- The intervention logic should be more focused, concrete, detailed
and transparent;
- Programme access should be improved and participation increased
from start-ups, SMEs, industry, less performing Member States and extra-Union
countries;
- Monitoring and evaluation of the programme need to be
strengthened.
The recommendations for direct actions in recent evaluation reports
note i.a. that the JRC can
- promote stronger integration in the production of knowledge in the
Union; 
- introduce impact analyses and cost-benefit studies of specific
work; 
- enhance cooperation with industry in order to strengthen effects
for the benefit of the competitiveness of the European economy.
For more information, please read the Commission Staff Working Paper
on the impact assessment of Horizon 2020 (‘IA’) accompanying this legislative
proposal.
1.5.4.     Coherence and possible synergy
with other relevant instruments
In the context of the achievement of the Europe 2020 objectives,
synergies will be established and developed with the other Union programmes
like the Common Strategic Framework for Economic, Social and Territorial Cohesion
and with the Competitiveness and SMEs Programme.
1.6.        Duration and financial
impact 
ý Proposal/initiative of limited
duration 
–     
ý  Proposal/initiative in effect from 01/01/2014 to 31/12/2020 
–     
ý  Financial impact from 2014 to 2026 
¨ Proposal/initiative of unlimited
duration
–     
Implementation with a start-up period from YYYY
to YYYY,
–     
followed by full-scale operation.
1.7.        Management mode(s) envisaged[42]

ý Centralised direct management by the Commission 
ý Centralised indirect management with the delegation of implementation tasks to:
–     
ý  executive agencies 
–     
ý  bodies set up by the Communities[43] 
–     
ý  national public-sector bodies/bodies with public-service mission 
–     
¨  persons entrusted with the implementation of specific actions
pursuant to Title V of the Treaty on European Union and identified in the
relevant basic act within the meaning of Article 49 of the Financial Regulation

¨ Shared management with the Member States 
¨ Decentralised management with third countries 
ý Joint management with international organisations, including the European Space
Agency
If more than one
management mode is indicated, please provide details in the
"Comments" section.
Comments: 
The Commission intends to use a variety of management modes to
implement this activity building on the management modes used under the current
financial perspectives. These management modes include centralised management
and joint management. 
Management will be through the services of the Commission, through
the existing Executive Agencies of the Commission renewing and extending their
mandates in a balanced manner and through other externalised bodies such as
entities created under Articles 187 (e.g. Joint Undertakings with renewed
mandates after assessment and new ones to be set up in the context of implementing
e.g. the 'Societal Challenges' part), 185 (programmes undertaken jointly by
several member states, where national public-sector bodies/bodies with
public-service mission will play a role) of the Lisbon Treaty as well as
through the European Institute of Innovation and Technology and financial
instruments. 
Activities already externalised under the current financial
perspective (e.g. Frontier Research, Marie Curie Actions, SME actions,
Knowledge and Innovation Communities), which will be continued under Horizon
2020, will be implemented keeping the current form of externalisation. This may
entail deepening the specialisation and simplifying management of the
respective externalised bodies and brining them to a comparable operational
size. 
Externalisation of further activities of Horizon 2020, in particular
through recourse to existing Executive Agencies of the Commission, is foreseen
as long as it is compatible with keeping core policy competences within
Commission services. The externalisation means retained to implement these
activities will be selected on the basis of their proven effectiveness and
efficiency. At the same time, the staff assigned to the Executive Agencies of
the Commission will have to increase in proportion to the part of the budget corresponding
to the externalised activities and taking into account the commitment on
staffing made by the Commission (A Budget for Europe 2020, COM(2011)500).
Where higher leverages can be achieved, the European Space Agency
may be involved in the implementation of space-related activities of Horizon
2020.
2.           MANAGEMENT MEASURES 
Simplification
Horizon 2020 must attract the most excellent researchers and the
most innovative European enterprises. This can only be reached by a programme
with the least possible administrative burden for participants and by
appropriate funding conditions. Simplification in Horizon 2020 will
therefore target three overarching goals: to reduce the administrative
costs of the participants; to accelerate all processes of proposal and grant
management and to decrease the financial error rate. Moreover, simplification
of research and innovation funding will also result from the revision of the Financial
Regulation (e.g. no interest bearing accounts for pre-financing, eligible VAT,
limitation of extrapolation of systematic errors).
Simplification in Horizon 2020 will be achieved along several
dimensions. 
Structural simplification is provided through
-Integration of all research and innovation related funding
instruments (EIT, CIP, FP) into the Horizon 2020 Framework Programme and its
Specific Programme;
-One single Specific Programme implementing Horizon 2020;
-One single set of participation rules covering all components of
Horizon 2020.
Major simplification of funding rules will make the
preparation of proposals and the management of projects easier. At the same
time, they will reduce the number of financial errors. The following approach
is proposed:
Main funding model for grants:
-Simplified reimbursement of real direct costs, with a broader
acceptance of beneficiaries’ usual accounting, including the eligibility of
certain taxes and charges;
-The possibility of using unit personnel costs (average personnel
costs) for beneficiaries for which this is their usual accounting method, and
for SME owners without a salary;
-Simplification of time-recording by providing a clear and simple
set of minimum conditions, in particular abolition of time-recording
obligations for staff working exclusively on a Union project;
-One single reimbursement rate for all participants instead of 3
different rates by type of participant;
-One single flat rate covering indirect costs, instead of 4 methods
to calculate indirect costs, as a general rule;
-Continuation of the system of unit costs and flat rates for
mobility and training actions (Marie Curie);
Output-based funding with lump sums for whole projects in specific
areas.
A revised control strategy, as described in section 2.2.2, achieving
a new balance between trust and control will
further reduce the administrative burden for participants. 
Beyond the simpler rules and controls, all procedures and
processes for project implementation will be rationalised. This includes
the detailed provisions on the content and shape of proposals, the processes
for turning proposals into projects, the requirements for reporting and
monitoring, as well as the related guidance documents and support services. A
major contribution to reduced administrative costs for participation will come
from a single user-friendly IT platform, based on the Union’s Seventh Framework
Programme for R&D (2007-2013) (‘FP7’) Participant Portal.
2.1.        Monitoring and reporting
rules 
A new system will be developed for the evaluation and monitoring of
the indirect actions of Horizon 2020. It will be based on a comprehensive,
well-timed and harmonised strategy, with a strong focus on throughput, output,
results and impacts. It will be supported by an appropriate data archive,
experts, a dedicated research activity, and increased cooperation with Member
States and Associated States, and it will be valorised through appropriate
dissemination and reporting. For direct actions, the JRC will continue to
improve its monitoring by further adjusting its indicators measuring output and
impact.
The system will include information concerning cross-cutting topics
such as sustainability and climate change. Climate related expenditure will be
calculated in accordance with the tracking system based on Rio markers.
2.2.        Management and control
system 
A 2 % error limit was adopted as chief indicator in the area of
legality and regularity concerning the area of research grants. However, this
has caused a number of unexpected or undesirable side-effects. There has been a
strong feeling, amongst the beneficiaries as well as amongst the legislative
authority, that the control burden has become too great. This runs the risk of
lowering the attractiveness of the Union's Research programme, and so
negatively affecting Union research and innovation.
The European Council of February 4th 2011 concluded that ‘it is
crucial that EU instruments aimed at fostering R&D&I be simplified in
order to facilitate their take-up by the best scientists and the most
innovative companies, in particular by agreeing between the relevant institutions
a new balance between trust and control and between risk taking and risk
avoidance’ (see EUCO 2/1/11 REV1, Brussels 8 March 2011).
The European Parliament, in its Resolution of 11 November 2010
(P7_TA(2010)0401) on simplifying the implementation of the Research Framework
Programmes explicitly supports a higher risk of errors for research funding and
"expresses its concern that the current system and the practice of FP7
management are excessively control-oriented, thus leading to waste of
resources, lower participation and less attractive research landscapes; notes
with concern that the current management system of ‘zero risk tolerance’ seems
to avoid, rather than to manage, risks". 
The sharp increase in the number of audits and the subsequent
extrapolation of results has also provoked a wave of complaints from the world
of research (e.g. the Trust Researchers initiative[44],
with over 13,800 signatures so far).
There is therefore an acceptance among stakeholders and Institutions
that the current approach needs to be reviewed. There are other objectives and
interests, especially the success of the Research policy, international
competitiveness and scientific excellence, which should also be considered. At
the same time, there is a clear need to manage the budget in an efficient and
effective manner, and to prevent fraud and waste. These are the challenges for
the Horizon 2020 programme.
It remains the ultimate objective of the Commission to achieve a
residual error rate of less than 2% of total expenditure over the lifetime of
the programme, and to that end, it has introduced a number of simplification
measures. However, other objectives such as the attractiveness and the success
of the EU research policy, international competitiveness, scientific excellent
and in particular the costs of controls (see point 2.2.2) need to be
considered.
Taking these elements in balance, it is proposed that the
Directorates General charged with the implementation of the research and
innovation budget will establish a cost-effective internal control system that
will give reasonable assurance that the risk of error over the course of the
multiannual expenditure period is, on an annual basis, within a range of 2-5 %,
with the ultimate aim to achieve a residual level of error as close as possible
to 2 % at the closure of the multi-annual programmes, once the financial impact
of all audits, correction and recovery measures have been taken into account.
2.2.1.     Internal control framework 
The internal control framework for grants is built on:
-the implementation of the Commission's Internal Control Standards;
-procedures for selecting the best projects and translating them
into legal instruments;
- project and contract management throughout the lifetime of every
project;
-ex-ante checks on 100% of claims, including receipt of audit
certificates and ex-ante certification of cost methodologies; 
- ex post audits on a sample of claims;
- and scientific evaluation of project results. 
For direct actions, financial circuits include ex-ante checks for
procurement and ex-post controls. Risks are assessed annually and progress in
the execution of work and the consumption of resources is monitored regularly,
based on defined objectives and indicators.
2.2.2.     Costs and benefits of the
controls 
The cost of the internal control system for the Directorates General
charged with the implementation of the research and innovation budget is
estimated at €267m per year (based on the 2009 Tolerable Risk of Error
exercise). It has also led to a considerable burden on beneficiaries and
Commission services. 
43 % of the total costs of control of the Commission services (not
including the costs of the beneficiary) are borne at the stage of project
management, 18 % on selection of proposals, and 16 % on negotiation of
contracts (16 %). Ex post audits and their resulting implementation amounted to
23 % (€61m) of the total.
However, this considerable control effort has not managed to fully
achieve its objective. The estimated "residual" error rate for FP6,
after taking account of all recoveries and corrections that have been or will
be implemented, remains over 2 %. The current rate of error from audits of FP7 carried
out by the Directorate General Research and Innovation is around 5 %, and
although this will be reduced due to the effects of the audits, and is somewhat
biased because it is concentrated on beneficiaries not previously audited, it
is unlikely whether the 2 % residual error will be attained. The rate of error
identified by the European Court of Auditors is in a similar range. 
2.2.3.     Expected level of risk of
non-compliance 
The starting point is the status quo, based on audits carried out in
FP7 so far. This preliminary representative error rate is close to 5 % (for the
Directorate General Research and Innovation). The majority of errors detected
arise because the present system of research funding is based on the
reimbursement of the actual costs of the research project declared by the
participant. This leads to considerable complexity regarding the assessment of
eligible costs.
An analysis of error rates has been carried out for the FP7 audits
so far performed in the Directorate General Research and Innovation shows that:

-Around 27% by number, and 35% by amount, relate to errors in the
charging of personnel costs. Regular problems identified are charging average
or budgeted costs (rather than actual costs), failure to keep adequate records
of time spent on the programme, charging of ineligible items.
-Around 40% by number, and 37% by value, relate to other direct
costs (not personnel). Regular errors identified are the inclusion of VAT, lack
of a clear link to the project, failure to provide invoices or proof of payment
and incorrect calculation of depreciation charging the full cost of equipment
rather than the depreciated amount, subcontracting without prior authorization,
or without respecting the rules of value for money, etc.
-Around 33% by number, and 28% by amount, relate to errors in
indirect costs. The same risks apply as for personnel costs, with the
additional risk of an inaccurate or unfair allocation of overheads to Union
projects.
In a number of cases the indirect costs are a flat rate percentage
of direct costs, and so the error in indirect costs is proportional to the
error in direct costs.
Horizon 2020 introduces a significant number of important
simplification measures (see point 2 above) that will lower the error rate in
all the categories of error. However, the consultation of stakeholders and the
institutions on further simplification, and the Horizon 2020 impact assessment,
clearly indicate that the continuation of a funding model based on the
reimbursement of actual costs is the favoured option. A systematic resort to
output based funding, flat rates or lump sums appears premature at this stage
as such a system has not been tested in previous programmes. Retaining a system
based on the reimbursement of actual costs does however mean that errors will
continue to occur.
An analysis of errors identified during audits of FP7 suggests that
around 25-35 % of them would be avoided by the simplification measures
proposed. The error rate can then be expected to fall by 1.5 %, i.e. from close
to 5 % to around 3.5 %, a figure that is referred to in the Commission
Communication striking the right balance between the administrative costs of
control and the risk of error.
The Commission considers therefore that, for research spending under
Horizon 2020, a risk of error, on an annual basis, within a range between 2-5 %
is a realistic objective taking into account the costs of controls, the
simplification measures proposed to reduce the complexity of rules and the
related inherent risk associated to the reimbursement of costs of the research
project. The ultimate aim for the residual level of error at the closure of the
programmes after the financial impact of all audits, correction and recovery
measures will have been taken into account is to achieve a level as close as
possible to 2 %.
The ex-post audit strategy for expenditure under Horizon 2020 takes
account of this target. It will be based on the financial audit of a single
representative sample of expenditure across the whole programme, complemented
by a sample compiled on the basis of risk considerations. 
The overall number of ex-post audits will be limited to that
strictly necessary to the achievement of this target and the strategy. The
governance of the ex-post audit activities will ensure that the audit burden on
participants is minimized. As a guide, the Commission considers that a maximum
of 7 % of participants in Horizon 2020 would be subject to audit over the whole
programming period. Past experience shows that the expenditure subject to audit
would be considerably higher. 
The ex-post audit strategy regarding legality and regularity will be
complemented by reinforced scientific evaluation and the anti-fraud strategy
(see point 2.3 below).
This scenario is based on the assumption that the measures of
simplification are not subject to substantial modifications in the decision
making process.
Note: this section only concerns the process of grant management,
for administrative and operational expenditure implemented through public
procurement processes the 2% ceiling will apply as tolerable risk of error. 
2.3.        Measures to prevent fraud
and irregularities 
The Directorates General charged with the implementation of the
research and innovation budget are determined to fight against fraud at all stages
of the grant management process. They have developed, and are implementing,
anti-fraud strategies, including an enhanced use of intelligence, especially
using advanced IT tools, and training and information for staff. Sanctions have
been developed to provide deterrents to fraud, as well as appropriate penalties
if they are identified. These efforts will continue. The proposals for Horizon
2020 have been subject to fraud proofing and an assessment of their impact.
Overall the measures proposed should have a positive impact on the fight
against fraud, especially the greater emphasis on risk based audit and
reinforced scientific evaluation and control.
It should be underlined that detected fraud has been very low in
proportion to total expenditure, nevertheless the Directorates General charged
with the implementation of the research budget remain committed to combat it. 
The Commission shall take appropriate measures ensuring that, when
actions financed under this Regulation are implemented, the financial interests
of the Union are protected by the application of preventive measures against
fraud, corruption and any other illegal activities, by effective checks and, if
irregularities are detected, by the recovery of the amounts wrongly paid and,
where appropriate, by effective, proportionate and deterrent penalties.
The Commission or its representatives and the Court of Auditors
shall have the power of audit, on the basis of documents and on-the-spot, over
all grant beneficiaries, contractors and subcontractors who have received Union
funds under the Programme.
The European Anti-fraud Office (OLAF) may carry out on-the-spot
checks and inspections on economic operators concerned directly or indirectly
by such funding in accordance with the procedures laid down in Regulation
(Euratom, EC) No 2185/96 with a view to establishing whether there has
been fraud, corruption or any other illegal activity affecting the financial
interests of the Union in connection with a grant agreement or grant decision
or a contract concerning Union funding.
Without prejudice to the paragraphs above, cooperation agreements
with third countries and international organisations and grant agreements and
grant decisions and contracts resulting from the implementation of this
Regulation shall expressly empower the Commission, the Court of Auditors and OLAF to conduct such audits, on-the-spot checks and
inspections. 
3.           ESTIMATED FINANCIAL IMPACT OF THE
PROPOSAL/INITIATIVE 
3.1.        Heading(s) of the
multiannual financial framework and expenditure budget line(s) affected 
·      Existing expenditure budget lines (Not applicable)
In order of
multiannual financial framework headings and budget lines.
 Heading of multiannual financial framework || Budget line || Type of expenditure || Contribution 
 Number [Description………………………...……….] || Diff./non-diff ([45]) || from EFTA[46] countries || from candidate countries[47] || from third countries || within the meaning of Article 18(1)(aa) of the Financial Regulation 
   || [XX.YY.YY.YY]   || Diff./non-diff. || YES/NO || YES/NO || YES/NO || YES/NO 
·      New budget lines requested 
In order of multiannual financial framework
headings and budget lines.
 Heading of multiannual financial framework || Budget line || Type of expenditure || Contribution 
 Number [Heading 1 - Smart and Inclusive Growth] || Diff./non-diff. || from EFTA countries || from candidate countries || from third countries || within the meaning of Article 18(1)(aa) of the Financial Regulation 
   || Administrative Expenditures Indirect Research: XX 01 05 01 Expenditure related to Research Staff XX 01 05 02 External staff for Research XX 01 05 03 Other management expenditure for Research Direct Research: 10 01 05 01 Expenditure related to Research Staff 10 01 05 02 External staff for Research 10 01 05 03 Other management expenditure for Research 10 01 05 04 Other expenditure for major research infrastructures[48]   || NDA || YES || YES || YES || YES 
   || Operational Expenditures XX 02 01 01 Horizontal Actions   Excellent science 08 02 02 01 European Research Council 15 02 02 00 Marie Curie actions on skills, training and career development 08 02 02 02 European Research Infrastructures (including eInfrastructures) 09 02 02 01 European Research Infrastructures (including eInfrastructures) 08 02 02 03 Future and Emerging Technologies 09 02 02 02 Future and Emerging Technologies   Industrial leadership 08 02 03 01 Leadership in enabling and industrial technologies 09 02 03 00 Leadership in enabling and industrial technologies 02 02 02 01 Leadership in enabling and industrial technologies 08 02 03 02 Access to risk finance 02 02 02 02 Access to risk finance 08 02 03 03 Innovation in SMEs 02 02 02 03 Innovation in SMEs   Societal challenges 08 02 04 01 Health, demographic change and wellbeing 08 02 04 02 Food security, sustainable agriculture, marine and maritime research and the bio-economy 05 02 01 00 Food security, sustainable agriculture, marine and maritime research and the bio-economy 08 02 04 03 Secure, clean and efficient energy 32 02 02 00 Secure, clean and efficient energy 08 02 04 04 Smart, green and integrated transport 06 02 02 00 Smart, green and integrated transport 08 02 04 05 Climate action, resource efficiency and raw materials 07 02 02 00 Climate action, resource efficiency and raw materials 02 02 03 01 Climate action, resource efficiency and raw materials 08 02 04 06 Inclusive, innovative and secure societies 02 02 03 02 Inclusive, innovative and secure societies 09 02 04 00 Inclusive, innovative and secure societies 15 02 03 00 European Institute for innovation and Technology 10 02 01 00 Non-nuclear direct actions of the Joint Research Centre || DA || YES || YES || YES || YES 
3.2.        Estimated impact on
expenditure 
3.2.1.     Summary of estimated impact
on expenditure 
EUR million (to 3 decimal places)
 Heading of multiannual financial framework: || Number || [Heading 1 - Smart and Inclusive Growth]] 
 DGs: Research and Innovation / Information Society and Media/ Education and Culture/ Enterprise and Industry/ Energy/ Mobility and Transport/ Agriculture and Rural Development/ JRC direct research/ Environment || 2014 || 2015 || 2016 || 2017 || 2018 || 2019 || 2020 || ≥2021 || TOTAL 
  Operational appropriations ||   
 Horizontal actions 
 XX 02 01 01 || Commitments || (1a) || pm || pm || pm || pm || pm || pm || pm || pm ||   
 Payments || (2a) || pm || pm || pm || pm || pm || pm || pm || pm ||   
 08 02 02 01 European Research Council || Commitments || (1b) || 1640,417 || 1753,575 || 1879,819 || 2009,349 || 2144,525 || 2284,826 || 2427,130 ||   || 14139,641 
 Payments || (2b) || 204,154 || 1055,485 || 1335,717 || 1661,563 || 1868,955 || 2063,161 || 2199,449 || 3751,158 || 14139,641 
 08 02 02 02 European Research Infrastructures (including eInfrastructures) || Commitments || (1c) || 199,794 || 211,723 || 225,177 || 238,964 || 253,364 || 268,311 || 283,451 ||   || 1680,784 
 Payments || (2c) || 24,865 || 128,015 || 161,107 || 199,448 || 223,066 || 244,699 || 259,212 || 440,372 || 1680,784 
 08 02 02 03Future and Emerging Technologies**   09 02 02 02 Future and Emerging Technologies** || Commitments || (1d) || 283,318 || 300,310 || 320,217 || 469,448 || 606,917 || 642,722 || 678,989 ||   || 3301,921 
 Payments || (2d) || 48,847 || 251,487 || 316,496 || 391,819 || 438,217 || 480,715 || 509,225 || 865,115 || 3301,921 
 08 02 03 01 Leadership in enabling and industrial technologies || Commitments || (1e) || 545,193 || 577,744 || 614,457 || 652,078 || 691,372 || 732,159 || 773,472 ||   || 4586,474 
 Payments || (2e) || 67,851 || 349,323 || 439,624 || 544,249 || 608,697 || 667,728 || 707,329 || 1201,673 || 4586,474 
 08 02 03 02 Access to risk finance** 02 02 02 02 Access to risk finance** || Commitments || (1f) || 447,955 || 474,700 || 504,865 || 535,776 || 568,062 || 601,574 || 635,520 ||   || 3768,450 
 Payments || (2f) || 447,955 || 474,700 || 504,865 || 535,776 || 568,062 || 601,574 || 635,520 || 0 || 3768,450 
 08 02 03 03 Innovation in SMEs** 02 02 02 03 Innovation in SMEs** || Commitments || (1g) || 78,373 || 83,053 || 88,330 || 93,738 || 99,387 || 105,250 || 111,189 ||   || 659,320 
 Payments || (2g) || 9,754 || 50,216 || 63,197 || 78,238 || 87,502 || 95,988 || 101,681 || 172,744 || 659,320 
 08 02 04 01 Health, demographic change and wellbeing || Commitments || (1h) || 1030,952 || 1051,848 || 1073,128 || 950,146 || 1398,959 || 1481,491 || 1565,088 ||   || 8551,612 
 Payments || (2h) || 126,578 || 651,675 || 820,134 || 1015,317 || 1135,546 || 1245,671 || 1319,549 || 2237,142 || 8551,612 
 08 02 04 02 Food security, sustainable agriculture, marine and maritime research and the bio-economy** 05 02 01 00 Food security, sustainable agriculture, marine and maritime research and the bio-economy** || Commitments || (1i) || 525,695 || 557,082 || 592,481 || 628,757 || 666,645 || 705,974 || 745,810 ||   || 4422,444 
 Payments || (2i) || 65,424 || 336,830 || 423,901 || 524,785 || 586,927 || 643,848 || 682,032 || 1158,697 || 4422,444 
 08 02 04 03 Secure, clean and efficient energy** 32 02 02 00 Secure, clean and efficient energy** || Commitments || (1j) || 732,073 || 775,781 || 825,079 || 875,596 || 928,359 || 983,126 || 1038,601 ||   || 6158,614 
 Payments || (2j) || 91,108 || 469,063 || 590,317 || 730,805 || 817,344 || 896,610 || 949,786 || 1613,580 || 6158,614 
 08 02 04 04 Smart, green and integrated transport** 06 02 02 00 Smart, green and integrated transport** || Commitments || (1k) || 861,218 || 912,637 || 970,631 || 1030,059 || 1092,129 || 1156,559 || 1221,820 ||   || 7245,052 
 Payments || (2k) || 107,180 || 551,811 || 694,454 || 859,727 || 961,532 || 1054,781 || 1117,337 || 1898,231 || 7245,052 
 08 02 04 05 Climate action, resource efficiency and raw materials** 02 02 03 01 Climate action, resource efficiency and raw materials ** 07 02 02 00 Climate action, resource efficiency and raw materials ** || Commitments || (1l) || 400,096 || 423,983 || 450,925 || 478,534 || 507,370 || 537,302 || 567,620 ||   || 3365,830 
 Payments || (2l) || 49,793 || 256,354 || 322,622 || 399,403 || 446,698 || 490,019 || 519,081 || 881,860 || 3365,830 
 08 02 04 06 Inclusive, innovative and secure societies** 09 02 04 00 Inclusive, innovative and secure societies** 02 02 03 02 Inclusive, innovative and secure societies** || Commitments || (1m) || 483,533 || 512,402 || 544,963 || 578,329 || 613,179 || 649,353 || 685,994 ||   || 4067,754 
 Payments || (2m) || 60,177 || 309,815 || 389,903 || 482,696 || 539,855 || 592,210 || 627,332 || 1065,767 || 4067,754 
 09 02 02 01 European Research Infrastructures (including eInfrastructures) || Commitments || (1n) || 113,951 || 120,755 || 128,428 || 136,291 || 144,504 || 153,029 || 161,664 ||   || 958,622 
 Payments || (2n) || 14,181 || 73,012 || 91,886 || 113,754 || 127,224 || 139,562 || 147,839 || 251,163 || 958,622 
 09 02 03 00 Leadership in enabling and industrial technologies || Commitments || (1o) || 1005,176 || 1065,189 || 1132,878 || 1202,241 || 1274,686 || 1349,886 || 1426,056 ||   || 8456,112 
 Payments || (2o) || 125,096 || 644,049 || 810,537 || 1003,436 || 1122,258 || 1231,095 || 1304,108 || 2215,533 || 8456,112 
 02 02 02 01 Leadership in enabling and industrial technologies || Commitments || (1p) || 194,477 || 206,088 || 219,184 || 232,604 || 246,620 || 261,169 || 275,907 ||   || 1636,048 
 Payments || (2p) || 24,203 || 124,608 || 156,819 || 194,140 || 217,129 || 238,186 || 252,313 || 428,651 || 1636,048 
 15 02 02 00 Marie Curie actions on skills, training and career development || Commitments || (1q) || 728,274 || 771,756 || 820,798 || 871,052 || 923,542 || 978,025 || 1033,212 ||   || 6126,659 
 Payments || (2q) || 90,635 || 466,629 || 587,254 || 727,013 || 813,103 || 891,958 || 944,858 || 1605,208 || 6126,659 
 15 02 03 00 European Institute for innovation and Technology * || Commitments || (1r) || 267,498 || 324,047 || 389,375 || 472,279 || [497,465]* || [554,83]* || [599,78]* ||   || 1453,199 
 Payments || (2r) || 232,723 || 281,921 || 338,756 || 410,883 || 188,916 + [243,863]* || [482,704]* || [521,806]* || [403,684]* || 1453,199 
 10 02 01 00 Non-nuclear direct actions of the Joint Research Center || Commitments || (1s) || 32,459 || 33,108 || 33,771 || 34,445 || 35,134 || 35,838 || 36,554 ||   || 241,311 
 Payments || (2s) || 12,325 || 27,672 || 31,582 || 33,891 || 34,568 || 35,261 || 35,965 || 30,048 || 241,311 
* An additional amount of EUR 1652,057
million shall be made available for the years 2018-2020 pro-rata from the
budgets of the Societal challenges and Leadership in enabling and industrial
technologies, on an indicative basis and subject to the review set out in
Article 26(1).
** The repartition between DGs is not
determined at this stage. 
   || 2014 || 2015 || 2016 || 2017 || 2018 || 2019 || 2020 || ≥2021 || TOTAL 
  TOTAL operational appropriations || Commitments || (4) || 9570,455 || 10155,782 || 10814,513 || 11489,691 || 12194,753 || 12926,590 || 13668,077 ||   || 80819,860 
 Payments || (5) || 1802,849 || 6502,665 || 8079,171 || 9906,943 || 10785,6 || 11613,07 || 12312,62 || 19816,94 || 80819,860 
  TOTAL appropriations of an administrative nature financed from the envelope for specific programmes || (6) ||   
 XX 01 05 01 Expenditure related to Research Staff* || (6a) || 226,187 || 230,711 || 235,325 || 240,031 || 244,832 || 249,729 || 254,723 ||   || 1681,538 
 XX 01 05 02 External staff for Research* || (6b) || 169,252 || 232,572 || 258,456 || 289,571 || 316,454 || 341,909 || 376,531 ||   || 1984,745 
 XX 01 05 03 Other management expenditure for Research* || (6c) || 138,404 || 162,149 || 172,823 || 185,361 || 196,450 || 207,073 || 220,939 ||   || 1283,199 
 10 01 05 01 Expenditure related to Research Staff || (6d) || 151,686 || 156,996 || 162,490 || 168,178 || 174,064 || 180,156 || 186,461 ||   || 1180,031 
 10 01 0,5 02 External staff for Research || (6e) || 34,280 || 35,052 || 35,840 || 36,647 || 37,471 || 38,314 || 39,176 ||   || 256,781 
 10 01 05 03 Other management expenditure for Research || (6f) || 65,312 || 66,618 || 67,950 || 69,309 || 70,695 || 72,109 || 73,551 ||   || 485,545 
 10 01 05 04 Other expenditure for major research infrastructures || (6g) || 6,551 || 6,682 || 6,816 || 6,952 || 7,091 || 7,233 || 7,378 ||   || 48,703 
  TOTAL administrative appropriations || 6 || 791,672 || 890,780 || 939,700 || 996,049 || 1047,057 || 1096,523 || 1158,759 ||   || 6920,542 
 TOTAL appropriations under HEADING 1 of the multiannual financial framework || Commitments || =4+ 6 || 10362,127 || 11046,561 || 11754,214 || 12485,739 || 13241,811 || 14023,113 || 14826,837 ||   || 87740,402 
 Payments || =5+ 6 || 2383,229 || 7221,855 || 8818,966 || 10664,002 || 11835,992 || 12920,485 || 13694,775 || 20201,100 || 87740,402 
* These figures are based on an almost full use of the
authorised maximum administrative expenditures foreseen in the legal base. They
are presented for illustrative purposes in terms of the numbers of personnel
that could be employed with these amounts.
If more than one heading is affected by the proposal /
initiative:
  TOTAL operational appropriations || Commitments || (4) || n.a. || n.a. || n.a. || n.a. || n.a. || n.a. || n.a. || n.a. 
 Payments || (5) || n.a. || n.a. || n.a. || n.a. || n.a. || n.a. || n.a. || n.a. 
  TOTAL appropriations of an administrative nature financed from the envelope for specific programmes || (6) || n.a. || n.a. || n.a. || n.a. || n.a. || n.a. || n.a. || n.a. 
 TOTAL appropriations under HEADINGS 1 to 4 of the multiannual financial framework (Reference amount) || Commitments || =4+ 6 || n.a. || n.a. || n.a. || n.a. || n.a. || n.a. || n.a. || n.a. 
 Payments || =5+ 6 || n.a. || n.a. || n.a. || n.a. || n.a. || n.a. || n.a. || n.a. 
 Heading of multiannual financial framework: || 5 || " Administrative expenditure " 
EUR million (to 3 decimal places)
   ||   ||   || Year N || Year N+1 || Year N+2 || Year N+3 || … enter as many years as necessary to show the duration of the impact (see point 1.6) || TOTAL 
 DG: <…….> || 
  Human resources || n.a. || n.a. || n.a. || n.a. || n.a. || n.a. || n.a. || n.a. 
  Other administrative expenditure || n.a. || n.a. || n.a. || n.a. || n.a. || n.a. || n.a. || n.a. 
 TOTAL DG <…….> || Appropriations || n.a. || n.a. || n.a. || n.a. || n.a. || n.a. || n.a. || n.a. 
 TOTAL appropriations under HEADING 5 of the multiannual financial framework || (Total commitments = Total payments) || n.a. || n.a. || n.a. || n.a. || n.a. || n.a. || n.a. || n.a. 
EUR million (to 3 decimal places)
   ||   ||   || Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020 || Year ≥2021 || TOTAL 
 TOTAL appropriations under HEADINGS 1 to 5 of the multiannual financial framework || Commitments || 10362,127 || 11046,561 || 11754,214 || 12485,739 || 13241,811 || 14023,113 || 14826,837 ||   || 87740,402 
 Payments || 2383,229 || 7221,855 || 8818,966 || 10664,002 || 11835,992 || 12920,485 || 13694,775 || 20201,100 || 87740,402 
3.2.2.     Estimated impact on
operational appropriations 
–     
¨  The proposal/initiative does not require the use of operational
appropriations 
–     
þ  The proposal/initiative requires the use of operational
appropriations, as explained below:
Commitment appropriations in EUR million (to 3 decimal
places)/ current prices
 Indicate objectives and outputs   ò ||   ||   || Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020 || TOTAL 
 OUTPUTS 
 Type of output[49] || Average cost of the output || Number of outputs || Cost || Number of outputs || Cost || Number of outputs || Cost || Number of outputs || Cost || Number of outputs || Cost || Number of outputs || Cost || Number of outputs || Cost || Total number of outputs || Total cost 
 SPECIFIC OBJECTIVE No 1[50] Excellent science ||   
 - Output ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   
 - Output ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   
 - Output ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   
 Sub-total for specific objective N°1 Excellent science ||   || 2965,755 ||   || 3158,119 ||   || 3374,440 ||   || 3725,105 ||   || 4072,852 ||   || 4326,913 ||   || 4584,446 ||   || 26207,628 
 SPECIFIC OBJECTIVE No 2 Industrial leadership ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   
 - Output ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   
 Sub-total for specific objective N°2 Industrial leadership ||   || 2271,175 ||   || 2406,774 ||   || 2559,714 ||   || 2716,437 ||   || 2880,127 ||   || 3050,036 ||   || 3222,143 ||   || 19106,407 
 SPECIFIC OBJECTIVE No 3 Societal challenges ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   
 - Output ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   
 Sub-total for specific objective N°3 Societal challenges ||   || 4033,565 ||   || 4233,731 ||   || 4457,207 ||   || 4541,423 ||   || 5206,640 ||   || 5513,803 ||   || 5824,934 ||   || 33811,304 
 SPECIFIC OBJECTIVE No 4 Non-nuclear direct actions of the Joint Research Centre ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   
 - Output ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   
 Sub-total for specific objective N°4 Non-nuclear direct actions of the Joint Research Centre ||   || 32,459 ||   || 33,108 ||   || 33,771 ||   || 34,445 ||   || 35,134 ||   || 35,838 ||   || 36,554 ||   || 241,311 
 SPECIFIC OBJECTIVE No 5 "Integrating the knowledge triangle" (European Institute of Innovation and Technology) ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   
 - Output ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   
 Sub-total for specific objective N°5 "Integrating the knowledge triangle" (European Institute of Innovation and Technology) ||   || 267,5 ||   || 324,050 ||   || 389,380 ||   || 472,280 ||   || [497,46] ||   || [554,832] ||   || [599,777] ||   || 1453,199 
   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   
 TOTAL COST ||   || 9570,455 ||   || 10155,782 ||   || 10814,513 ||   || 11489,691 ||   || 12194,753 ||   || 12926,590 ||   || 13668,077 ||   || 80819,860 
3.2.3.     Estimated impact on
appropriations of an administrative nature
3.2.3.1.  Summary 
–     
¨  The proposal/initiative does not require the use of administrative
appropriations 
–     
þ  The proposal/initiative requires the use of administrative
appropriations, as explained below:
EUR million (to 3
decimal places)
   || Year 2014 [51] || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020 || TOTAL 
 HEADING 5 of the multiannual financial framework || n.a. || n.a. || n.a. || n.a. || n.a. || n.a. || n.a. || n.a. 
 Human resources || n.a. || n.a. || n.a. || n.a. || n.a. || n.a. || n.a. || n.a. 
 Other administrative expenditure || n.a. || n.a. || n.a. || n.a. || n.a. || n.a. || n.a. || n.a. 
 Subtotal HEADING 5 of the multiannual financial framework || n.a. || n.a. || n.a. || n.a. || n.a. || n.a. || n.a. || n.a. 
 Outside HEADING 5[52] of the multiannual financial framework ||   ||   ||   ||   ||   ||   ||   ||   
 Human resources* || 581,406 || 655,330 || 692,112 || 734,426 || 772,821 || 810,108 || 856,892 || 5103,095 
 Other expenditure of an administrative nature* || 210,266 || 235,449 || 247,589 || 261,622 || 274,237 || 286,415 || 301,868 || 1817,447 
 Subtotal outside HEADING 5 of the multiannual financial framework || 791,672 || 890,779 || 939,701 || 996,048 || 1047,058 || 1096,523 || 1158,760 || 6920,545 
 TOTAL** || 791,672 || 890,779 || 939,701 || 996,048 || 1047,058 || 1096,523 || 1158,760 || 6920,545 
* These figures are based on an almost full use of
the authorised maximum administrative expenditures foreseen in the legal base.
They are presented for illustrative purposes in terms of the numbers of
personnel that could be employed with these amounts.
** These figures might be adjusted as a result of the
envisaged externalisation procedure. 
3.2.3.2.  Estimated requirements of
human resources 
–     
¨  The proposal/initiative does not require the use of human
resources 
–     
þ  The proposal/initiative requires the use of Commission human
resources, as explained below:
Estimate expressed in full amounts (or at
most to one decimal place)
 ||   || Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020 
  Establishment plan posts (officials and temporary agents) || 
 || XX 01 01 01 (Headquarters and Commission’s Representation Offices) || 100 || 100 || 100 || 100 || 100 || 100 || 100 
 || XX 01 01 02 (Delegations) ||   ||   ||   ||   ||   ||   ||   
 || XX 01 05 01 (Indirect research)** || 1681 || 1681 || 1681 || 1681 || 1681 || 1681 || 1681 
 || 10 01 05 01 (Direct research) || 1390 || 1390 || 1390 || 1390 || 1390 || 1390 || 1390 
 ||  External personnel (in Full Time Equivalent unit: FTE)[53] || 
 || XX 01 02 01 (CA, INT, SNE from the "global envelope") ||   ||   ||   ||   ||   ||   ||   
 || XX 01 02 02 (CA, INT, JED, LA and SNE in the delegations) ||   ||   ||   ||   ||   ||   ||   
 || XX 01 04 yy [54] || - at Headquarters[55] ||   ||   ||   ||   ||   ||   ||   
 || - in delegations ||   ||   ||   ||   ||   ||   ||   
 || XX 01 05 02 (CA, INT, SNE - Indirect research)* || 867 || 867 || 867 || 867 || 867 || 867 || 867 
 || 10 01 05 02 (CA, INT, SNE - Direct research) || 593 || 593 || 593 || 593 || 593 || 593 || 593 
 || Other budget lines (specify) ||   ||   ||   ||   ||   ||   ||   
 || TOTAL || 4631 || 4631 || 4631 || 4631 || 4631 || 4631 || 4631 
* The above
figures will be adjusted in accordance with the results of the envisaged
externalisation process.
** The workload corresponding to the
implementation of EIT and Innovation is estimated at some 100 establishment
plan posts for the Commission.
XX is the
policy area or budget title concerned.
The human resources required
will be met by staff from the DG who are already assigned to management of the action
and/or have been redeployed within the DG, together if necessary with any
additional allocation which may be granted to the managing DG under the annual
allocation procedure and in the light of budgetary constraints.
Description of tasks to be carried out:
 Officials and temporary agents || The total number of officials and temporary agents will be used to contribute to the objectives of Horizon 2020 during all the process, from the preparation of the Work Programme to the final dissemination of results during 2014-2020. These human resources include all the needs in the various management modes as indicated in point 1.7 of the LFS 
 External personnel || The total number of external personnel will assist officials and temporary agents to contribute to the objectives of Horizon 2020 during all the process, from the preparation of the Work Programme to the final dissemination of results during 2014-2020. These human resources include all the needs in the various management modes as indicated in point 1.7 of the LFS 
3.2.4.     Compatibility with the
current multiannual financial framework 
–     
þ  Proposal/initiative is compatible the current multiannual
financial framework.
–     
¨  Proposal/initiative will entail reprogramming of the relevant
heading in the multiannual financial framework.
Not applicable
.
–     
¨  Proposal/initiative requires application of the flexibility
instrument or revision of the multiannual financial framework[56].
Not applicable
.
3.2.5.     Third-party contributions 
–     
The proposal/initiative provides for the
co-financing estimated below:
Appropriations in EUR million (to 3 decimal places)
   || Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020 || Total 
 Specify the co-financing body || Third countries associated to the programme ||   
 TOTAL appropriations co-financed * || pm 
* Bilateral Association Agreements are not
fixed yet and that is why they will be added at a later stage.

3.3.      Estimated impact on revenue 
–     
¨  Proposal/initiative has no financial impact on revenue.
–     
þ  Proposal/initiative has the following financial impact:
–                   
¨         on own resources 
–                   
þ         on miscellaneous revenue 
EUR million (to 3 decimal places)
 Budget revenue line: || Appropriations available for the ongoing budget year || Impact of the proposal/initiative[57]* 
 Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020 
 Item 6011 Item 6012 Item 6013 Item 6031 ||   || pm || pm || pm || pm || pm || pm || pm 
* Bilateral Association Agreements are not
fixed yet and that is why they will be added at a later stage.
For miscellaneous
assigned revenue, specify the budget expenditure line(s) affected.
02 03 01
Appropriations accruing from contributions form third parties
05 03 01
Appropriations accruing from contributions from third parties
06 03 01
Appropriations accruing from contributions form third parties
07 03 01
Appropriations accruing from contributions form third parties
08 04 01
Appropriations accruing from contributions form third parties
09 03 01
Appropriations accruing from contributions form third parties
10 02 02
Appropriations accruing from contributions form third parties
15 03 01
Appropriations accruing from contributions form third parties
32 03 01
Appropriations accruing form contributions from third parties
Specify the method for
calculating the impact on revenue.
Certain associated states may contribute to a supplementary funding
of the framework programme through association agreements. The method of
calculation will be agreed in these Association Agreements and is not
necessarily the same in all agreements. Mostly the calculations are based on
the GDP of the Associated State compared to the GDP of the Member States whilst
applying this percentage to the overall budget voted. 
[1]               COM(2011) 500 final
[2]               OJ C , , p. .
[3]               OJ C , , p. .
[4]               COM(2010) 2020
[5]               P7 TA(2011)0401
[6]               P7 TA(2011)0236
[7]               P7 TA(2011)0256
[8]               P7 TA(2011)0401
[9]               ERAC 1210/11
[10]             CdR 67/2011
[11]             CESE 1163/2011
[12]             COM(2011) 48
[13]             COM(2011) 500
[14]             C(2005) 576 final, 11.3.2005
[15]             OJ L 124, 30.05.2003 p.36
[16]             COM(2008) 394
[17]             OJ L 412, 30.12.2006, p.1
[18]             OJ L 97, 9.4.2008, p. 1.
[19]             OJ L [], [], p. []
[20]             OJ L 292, 15.11.1996, p. 2.
[21]             ESFRI Strategy Report on Research Infrastructure —
Roadmap 2010.
[22]             COM(2009)512
[23]             COM(2010) 245
[24]             COM(2011) 112 final
[25]             COM(2011) 152 
[26]             COM (2011)0112 
[27]             COM(2011) 112
[28]             COM(2009) 519
[29]             IPCC 4th Assessment Report , 2007, (www.ipcc.ch)

[30]             COM (2011) 112
[31]             COM (2009) 147
[32]             COM(2011) 25
[33]             COM(2009) 400
[34]             COM(2007) 575 final
[35]             DIRECTIVE 2008/56/EC
[36]             COM(2010) 245
[37]             COM(2010) 491 final.
[38]             Innovation Union Scoreboard 2010.
[39]             COM(2011) 274 final.
[40]             ABM: Activity-Based
Management – ABB: Activity-Based Budgeting.
[41]             As referred to in Article 49(6)(a) or (b) of the
Financial Regulation.
[42]             Details of management modes
and references to the Financial Regulation may be found on the BudgWeb site: http://www.cc.cec/budg/man/budgmanag/budgmanag_en.html
[43]             As referred to in Article 185 of the Financial
Regulation.
[44]             http://www.trust-researchers.eu/
[45]             Diff. = Differentiated appropriations / Non-Diff. =
Non-differentiated appropriations
[46]             EFTA: European Free Trade Association. 
[47]             Candidate countries and, where applicable, potential
candidate countries from the Western Balkans.
[48]             The JRC requests a new budget line for infrastructure
investments. Most of the JRC facilities date from the 60's and 70's and are not
state of the art anymore. As a consequence, new facilities and the upgrading of
the existing infrastructure are necessary to carry out the JRC multi-annual
work-programme in compliance with EU safety and security standards as well as
with the EU/20/20/20 environmental objectives. The JRC has established its
"Infrastructure Development plan 2014 – 2020"; identifying the
investment needs till 2020 for all JRC sites that are reflected in the new
budget line proposed.
[49]             Outputs are products and services to be supplied (e.g.:
number of student exchanges financed, number of km of roads built, etc.).
[50]             As described in Section 1.4.2. "Specific
objective(s)…"
[51]             Year N is the year in which implementation of the
proposal/initiative starts.
[52]             Technical and/or administrative assistance and
expenditure in support of the implementation of EU programmes and/or actions
(former "BA" lines), indirect research, direct research.
[53]             CA= Contract Agent; INT= agency staff ("Intérimaire");
JED= "Jeune Expert en Délégation" (Young Experts in
Delegations); LA= Local Agent; SNE= Seconded National Expert; 
[54]             Under the ceiling for external personnel from
operational appropriations (former "BA" lines).
[55]             Essentially for Structural Funds, European Agricultural
Fund for Rural Development (EAFRD) and European Fisheries Fund (EFF).
[56]             See points 19 and 24 of the Interinstitutional
Agreement.
[57]             As regards traditional own resources (customs duties,
sugar levies), the amounts indicated must be net amounts, i.e. gross amounts
after deduction of 25% for collection costs.