FP7 - April 2005 1

The European Research Area inthe Age of Globalisation

Henri DelangheDG RTD, C4 (Economic and Prospective Analysis

Conference on Knowledge and Innovation11 January 2007

FP7 - April 2005 2

The Lisbon Agenda

Broad consensus …

– Lisbon European Council (2000)

– Subsequent European Councils [Göteborg (2001), Barcelona (2002), etc.]

– Senior expert reports (Sapir, Strauss-Kahn, Kok, Aho)

… on fact that

– Europe faces many economic, social and environmental challenges

– Europe should turn itself into a knowledge-based economy

– More and better investment is needed in the knowledge triangle of research, education and innovation

FP7 - April 2005 3

The European Research Area

Not a new concept

A somewhat confusing concept

– Geographical scope?

– Conceptual scope?

– Final objective?

– Underlying assumptions?

– Etc.

FP7 - April 2005 4

The European Research Area

Yet 3 specific objectives

– To increase the funding for research

– To promote the exploitation of research results

– To reduce the fragmentation and dispersal

“3 percent objective”

FP7 - April 2005 5

The 3 Percent Objective

Context

– Economic growth depends on R&D and innovation

– Low level of R&D expenditure in Europe

Low R&D intensity, especially private

Large absolute gap with US

Triadic R&D competition logic

Barcelona European Council (2002)

– “Overall spending on R&D and innovation in the Union should be increased with the aim of approaching 3 percent of GDP by 2010. Two thirds of this new investment should come from the private sector”

FP7 - April 2005 6

The 3 Percent Objective

Recognition of importance horizontal policy coordination More effective use of public financing for business R&D …

Direct support measures Fiscal incentives Guarantee mechanisms Public support for risk capital

… but also more attractive framework conditions Sufficient and high quality human resources Strong public research base with improved industry links Entrepreneurship for and through R&D Effective adaptation and use of intellectual property rights systems Research and innovation friendly regulations Competitive environment Supportive competition rules Supportive financial markets Macro-economic stability Favourable fiscal conditions

FP7 - April 2005 7

Implementationof the Lisbon Agenda

Many goals, in many policy fields, legal competence for action different according to field

Full range of existing policy instruments used

– EC legislation

– Programmes and funding

– Actions plans

In addition, “Open Method of Coordination”

– To spread best practice and to achieve greater convergence towards the main EU goals

– Inter-governmental

– Soft

FP7 - April 2005 8

Implementationin the Field of Research

EC legislation (e.g. Community Patent)

Framework Programme

Action plans (e.g. 3 percent)

Open Method of Coordination (e.g. 3 percent)

FP7 - April 2005 9

The Lack of Progress since 2000

In the implementation of the Lisbon Agenda

– “Disappointing delivery”

– “Far from achieving the potential for change”

Towards the 3 percent objective

– Overall R&D intensity

– Private R&D intensity

– Gap

– Share of world R&D

FP7 - April 2005 10

Explaining the Lack of Progress

towards the 3 percent objective

Objective itself

Horizontal policy coordination

– Understanding of horizontal policy coordination

– Implementation of horizontal policy coordination

Exposure to foreign stock of knowledge

Governance

FP7 - April 2005 11

Explaining the Lack of Progress

towards the 3 percent objective

EU

Research

New Knowledge

Innovation

Growth

Public

Policy

Domestic

Research

System

New

Knowledge

Innovation

Growth

Domestic Innovation

Climate

Foreign

Research

System

Public

Policy

FP7 - April 2005 12

The other two ERA objectives (better exploitation, less

fragmentation)

Objectives

Implementation

Progress

Explanations

FP7 - April 2005 13

Implications for ERA

Objectives

Horizontal policy coordination

Openness

Governance

Evidence