European Union

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The European Union’s 28 member states account for 25% of world GDP and 15% of world trade (excluding intra-EU trade) as well as nearly 31% of OECD-area GERD. EU members are at different stages of economic development and their STI capabilities also differ, as do their industrial and trade structures. The EU’s Horizon 2020, adopted at the beginning of 2014, sets the strategic direction for EU research and innovation policy and investment until 2020.

Hot Issues

Hot Issues are major national STI policy priorities, as self-reported by countries in their responses to the OECD STIO 2014 policy questionnaire.

Improving the design and implementation of STI policy

Assessing national research and innovation policy and reform programmes is a key function of the European Commission’s Directorate General for Research and Innovation. As part of the Europe 2020 Strategy, the Commission introduced the European semester mechanism to undertake detailed analyses of members’ economic and structural policy and reform efforts, including research and innovation (R&I) policy, and to provide recommendations for the following 12-18 months. It also monitors the performance of R&I in member states with a focus on the impact of R&I investments and reforms on economic growth and prosperity and progress towards the Europe 2020 R&I goals.

Innovation to contribute to addressing social challenges (including inclusiveness)

Horizon 2020, the new EU Framework Programme for Research and Innovation, focuses on major societal challenges (health and ageing, energy efficiency, sustainable transport, etc.). It facilitates the transfer of innovative ideas to the marketplace by financing relevant research and innovation projects.

Improving the framework conditions for innovation (including competitiveness)

The Innovation Union flagship, launched in 2010, tackles weaknesses in framework conditions for innovation. The initiative focuses on reducing the barriers to and improving the conditions for: strengthening the knowledge base and reducing fragmentation; getting good ideas to market; maximising social and territorial cohesion; pooling forces, e.g. through European Innovation Partnerships, to achieve breakthroughs; leveraging policies externally; and monitoring implementation of Innovation Union commitments.

Reforming and improving public research system (including university research)

The European Research Area (ERA) aims to strengthen members’ S&T research, competitiveness and capacity to address grand challenges collectively by enabling researchers, PRIs and businesses to collaborate freely across borders. A 2012 EC communication, A Reinforced European Research Area Partnership for Excellence and Growth, aims to improve Europe’s research performance. It recommended measures that are currently being implemented to complete the ERA by 2014, as called for by the European Council. The ERA will also address members’ public research issues, including competitive funding, transnational research funding and trans-border use of research infrastructures. Last year, the ERA Progress Report started to cover ERA reforms and implementation. The report is an essential element of the ERA policy monitoring system and relates to the European Semester policy cycle mentioned above.

Selected Highlights

STI policy governance

The governance of Horizon 2020 is an open and simple structure that reduces red tape so that participants can focus on what is really important. The approach aims to get new projects off the ground quickly. DG Research and Innovation has recently strengthened the use of foresight for priority setting by creating a unit responsible for Science Policy, Foresight and Data. The Horizon 2020 evaluation system includes cross-cutting impact indicators for assessing the wider long-term impacts, including socio-economic, of research and innovation funding.

New challenges

The EU considers research essential for addressing major societal challenges. Although Europe’s national research programmes are among the most advanced in the world, it is recognised that they are insufficient to tackle the major societal challenges Europe faces today. EU joint programming aims to pool national research efforts to make more efficient use of Europe’s public R&D resources and to tackle common challenges more effectively. To address societal challenges, Horizon 2020 has a budget of USD 35.4 billion (EUR 29.7 billion) that will support the development by innovative enterprises of viable products with real market potential. This market-driven approach will include creating partnerships between the private sector and member states to bring together the needed resources.

Universities and public research

Created in 2007, the European Research Council (ERC) is the first pan-European funding agency for cutting-edge research. It has funded 4 500 projects and generated 20 000 articles over 2007-13. It is now part of Horizon 2020, with a budget of USD 15.8 billion (EUR 13.1 billion) for 2014-20. It accounts for 17% of the overall Horizon 2020 budget and represents an increase of 60% in real terms from the 7th Framework Programme (2007-13).

Innovation in firms

One of the features of Horizon 2020 is full integration of innovation in the programme, with a significant increase in resources to support business R&D and innovation. Under Horizon 2020, the industrial leadership and competitive frameworks, with a budget of USD 20.2 billion (EUR 17 billion) and a wide range of actions, will support business research and innovation, with business expected to play a major role.

Innovative entrepreneurship

Horizon 2020 will facilitate the participation of SMEs in the programme. A new instrument, with funds of at least USD 3.6 billion (EUR 3 billion), will support innovative small companies. SMEs can also engage in collaborative projects as part of a consortium. A minimum of 20%, or about USD 10.3 billion (EUR 8.65 billion) of the total combined budgets for Leadership in Enabling and Industrial Technologies and Societal Challenges, is devoted to support for SMEs. Horizon 2020 also aims to remove barriers to innovation and facilitate co-operation between the public and private sectors.

Clusters and regional policies

The Regions of Knowledge programme, under the 7th Framework Programme, promoted cross-border co-operation by research-driven clusters with a budget of USD 150 million (EUR 126 million) over 2007-13. Within the EU’s new Cohesion Policy, one ex ante condition makes smart specialisation a condition for any future investment in Research and Innovation and the Digital Agenda. It aims to boost regional innovation by enabling regions to focus on their strengths. This initiative is supported through the future European Structural and Investment Funds (ESIF) with USD 96.4-130 billion (EUR 80-100 billion). DG Research and Innovation works closely with DG for Regional and Urban Policy to ensure that smart specialisation strategies are duly incorporated in the operational programmes and partnership agreements, and that they underpin the investment in R&I proposed by member states and regions in the context of the European Structural and Investment Funds.

Skills for innovation

The EU considers human resources a key to Europe’s future competitiveness. The EURAXESS initiative addresses the mobility of researchers and seeks to make research careers attractive, while the European Partnership for Researchers aims at improving career prospects for researchers in Europe, stimulating young people to embark on research careers and helping retain European talent and attract researchers from other world regions. New EU measures are being prepared under the Innovative Doctoral Training Principles.

Recent developments in STI expenditures

With nearly USD 98.6 billion (EUR 78.6 billion) for 2014-20, Horizon 2020 is one of the few areas of the EU budget with a major increase. Thanks to Horizon 2020, the EU R&D budget for 2014-20 has increased by nearly 30% in real terms from the last programming period (2007-13).