Preparation of the Innovation Union Flagship Initiative

1. European Commission Preparation of the Innovation Union Flagship Initiative Presentation to ERAC 11 June 2010

2. Why Innovation Union? • Crisis • Societal challenges • New global competition • Framework conditions • Fragmentation of efforts • A distinctive European approach to innovation • Societal challenges, role of public sector • Europe’s strengths in creativity and design • Involving everyone: SMEs, citizens, cohesion Europe 2020:answer is innovation We must do much better!

3. State of preparations • Intensive work steered by Innovation Group of Commissioners • Building on consultations and dialogue with Member States and stakeholders, including: • 2009 Innovation public consultation • Innovation Business Panel • 2009 ERA Conference • Ongoing ERA Partnerships / groups • Dialogue in context of Europe 2020 • Dialogue with EP, Council, ERAC, EPG...

4. Timeline 15/7: Informal Competitiveness Council ~15/9: Adoption of Flagship Initiative 28/10: Informal European Council 26/11: Competitiveness Council (conclusions)

5. From Idea to Market Knowledge foundation Breakthrough ideas Access to finance Innovation market Scope of Innovation Union European Innovation Partnerships • Principles for • Member State policies • International cooperation • Governance

6. From Idea to Market Knowledge foundation Breakthrough ideas Access to finance Innovation market

7. Knowledge foundation • Issues • Insufficient supply & quality of research & innovation skills • Limited reforms in universities • Barriers to cross border flow of people, funding • Limited investment in strategic infrastructures • Areas of action • ERA framework to remove obstacles to cross border flow of people and funding • Modernisation of universities, research training and careers • Launch of priority research infrastructures

8. Breakthrough ideas • Issues • Underinvestment in knowledge triangle • Complex funding landscape • Costly EU patent system and unused patents • Little recognition of EU design strengths • Areas of action • Streamlining and simplification of EU programmes • EU patent • EU knowledge markets (DK and FR examples) • Recognition of excellence in design

9. Access to finance • Issues • Lack of finance is main constraint on innovative companies • Few European SMEs grow into major companies • Specific market gaps for start ups, high growth companies, major research and innovation projects • Current EU instruments (RSFF, CIP Financial Instruments) under funded. • Areas of action • Cohesion Funds for R&I and smart specialisation • EU financial instruments to address market gaps, notably through EIB/EIF • State Aid framework

10. A Single Innovation Market • Issues • Lack of harmonised regulations for innovations (e.g. type approvals of green vehicles) • EU standard setting too slow • Public procurers lack incentives, knowledge or scale to benefit from innovation • Areas of action • Regulatory frameworks linked to Partnerships • Review of EU standardisation system • Procurement for innovation

11. European innovation partnerships

12. European Innovation Partnerships • Issues • Major societal challenges • Many actions, uncoordinated - R&D programmes / demand-side actions - EU / national / regional (and global) • To address these issues,European Innovation Partnerships will be: • Not a new instrument alongside the others; but • Frameworksbringing together main actors, policies and actions at EU and national levels, from research to market, around common objectives and targets

13. Principles for • National policies • International cooperation • Governance

14. Principles for national policies • Issues • National policies essential for establishing a single market for research and innovation • National research and innovation systems more effective if they share some broad characteristics, recognised as common to well-performing systems • « Integrated guidelines » under Europe 2020 are too general for this purpose. • To address these issues, commonbenchmarks for national research and innovation systems could be developed and agreed with the Member States

15. International cooperation • Issues • Need to attract best talents from abroad. • Need for stronger cooperation, notably on global challenges, but with level playing field on reciprocal access, intellectual property, interoperable standards, lifting trade barriers. • EU and MS weakened by their lack of coordination. • Areas of action • Make the most of visa directive and Blue Card • Establish level playing field • Common EU-national policy orientations for international cooperationMajor global research infrastructures

16. Implementation and governance • Commitment at all levels • European Council Overall steering • EU Council Policy orientations, codecision • Eur. Parliament Policy orientations, codecision • Member States Apply benchmarks, specialise smartly • Regional and local authorities • Specialise and develop potential • All actors • From business to citizens

17. Implementation and governance • Commission support • Initiative of proposals • Annual Progress Report (Europe 2020) • with Country Specific Recommendations • Independent peer reviews • of national systems • Technical assistance • for smart specialisation and use of structural funds • Innovation Convention on state of Innovation Union (yearly) • Scoreboard on research and innovation