The need for massive investment in research and development (R&D) is one of the flagship measures identified by the European Commission in its European economic recovery plan. The idea of making the European economy a ‘knowledge-based economy’ is not new and has experienced some success since the launch of the Lisbon strategy in 2000, even if the quantitative objectives established on the matter are far from being achieved (see separate article). But beyond these quantitative objectives is the question of investment quality. The development of resources invested in R&D, so as to generate growth and employment, remains insufficient, mainly due to Europe’s legendary inadequacy to convert its technological breakthroughs into marketable products and procedures.

Various forms of public-private partnerships (PPPs) are regularly cited as ‘the’ solution. In this domain, Europe has traditionally shown a significant delay compared with its competitors, particularly the United States. According to Jean-David Malo, head of unit within DG Research, several reasons may be put forward to explain this delay: a relatively “safe” mentality with little regard for business creation among young Europeans, a low ratio of researchers in the private sector, and a very fragmented support for innovation, principally intended for big businesses.

The Commission has clearly identified the problem, since improvement in the transfer of knowledge between public and private sector research is one of the priority objectives of the strategy for the European Research Area (ERA), established in April 2007. At that time, the Commission had different types of PPPs, in particular Eureka, a programme with the disadvantage of not having its own budget and thus mainly serving as a network for all of the parties involved. Since then, the Commission has sought to expand its ‘tool box’ for the development of public research, by adding other forms of PPPs to existing ones (see box).

JOINT TECHNOLOGY INITIATIVES

The flagship programme in this field was the creation of joint technology initiatives (JTIs), in May 2007, the kind of PPP that can be considered to be the most accomplished at European level. These JTIs take up the principle of European technology platforms (ETPs), consisting of coordinating the efforts of industry, universities and research institutes in a given sector to acquire and develop a new technology. The difference with ETPs lies in the much more formal and long-term nature of the association between the partners. There are several reasons for this: the programmes concern relatively fundamental research sectors, which require significant investment and carry considerable financial risk.

There are currently five JTIs in the following areas: aeronautics, hydrogen and fuel cells, innovative medicines, nanoelectronic technologies and embedded computing systems. They are co-financed by industry, the Commission and in certain cases member states. Financing may also include loans from the European Investment Bank, making it possible to obtain a significant amount of leverage. The Commission is also attempting, via this structure, to increase the involvement of industry, while reducing the administrative burdens generally associated with European projects. Industry is thus actively involved in the research orientations (‘bottom-up’ process), which makes it possible to improve the implementation and marketing of scientific developments.

PROMOTING RISK CULTURE

According to Chris Hull, secretary-general of EARTO (European Association of Research and Technology Organisations), the principal criticism that could be made of the new structure is the limited number of parties involved - mainly multinationals and research institutes, small and medium-sized enterprises (SMEs) being ruled out, to avoid the programmes from becoming unmanageable. However, there are programmes within the ERA with the specific aim of supporting the innovation of SMEs (in particular Eurostars or the Competitiveness and Innovation Programme - CIP).

Another problem lies in the administrative burden of JTIs. In particular, they always require the approval of the Council of Ministers and the Parliament. Not to mention the numerous audits to which they are subjected, which are “totally out of proportion,” according to the Director of Public R&D Programmes for Philips, Jan van den Biesen. These controls and, more generally, the lack of trust and risk culture inherent in EU institutions, are, he believes, the main obstacle to the creation of really effective PPPs. “There is a culture of suppression rather than risk management within the Commission, which paralyses the entire system. And the Commission cannot even be blamed because everybody, from the Council to the Parliament, to the Court of Auditors and the general public via the press, is expecting it to make mistakes.”

It is therefore essential, according to van den Biesen, to further promote the culture of risk within the EU institutions, while establishing a relationship of trust between partners.

A great deal of effort must also be made on the part of public research, considers José Dyne, secretary-general of Proton Europe, the public network of knowledge transfer offices. “It is necessary to change the mentalities and evaluation criteria of universities and researchers, to no longer see everything just from the perspective of scientific publications but also through patents and the creation of spin-offs”.

The PPPs recently set up by the Commission in the framework of the economic recovery plan (see Europolitics3724), while appearing to be the result of media impact, seem to be heading in the right direction since their management only associates the Commission and industry, which should allow for their quick implementation (the first request for proposals was launched in July). This new form of PPP has clearly delighted industrialists, beginning with van den Biesen: “This is the example to follow while awaiting the specification of new rules in the EU’s next framework programme for research and development [FP8]”.

PRENUPTIAL AGREEMENT

However, the path to achieving regular forms of effective partnerships at European level seems somewhat long. It is nevertheless necessary to recall to what extent these partnerships may, in certain cases, be ‘against nature’. Peter Chen, vice-president of research at the Institut Fédéral Suisse de Technologie, considers that the most important factor is to balance the relationship between the various parties; having a clear vision of ‘business models’ in particular, as well as of the situation in terms of intellectual property. “As per a couple, the relationship must be based on trust and must be built over time. A kind of prenuptial agreement must clearly define all of the rights and responsibilities of each party. It is only based on these conditions that fruitful partnerships may be built.” In short, marriage is far more fruitful than a simple one-night stand. n

Main forms of PPP

Eureka: An intergovernmental support network for business innovation. Created in 1985, it currently consists of 37 European countries, including the 27 EU member states. The programme does not have its own financing, but helps participating businesses to pool their resources and develop scientific cooperation projects with research institutes, the aim being to develop products that can be used in the market. 

Eurostars: A programme within Eureka aimed at supporting the research activities of innovative SMEs. With a Community budget of 300 million euro for the 2007-2013 period, Eurostars requires the financial participation of industry to the tune of approximately 400 million euro. 

European technology platforms(ETPs): A lax form of partnership between universities, research centres, consumers, NGOs and businesses. Included within the EU’s FP7, these platforms identify research orientations by sector (there are currently 36 in total, including energy, ICTs, life sciences and transport), before developing and implementing a strategic agenda with the help of collective resources. 

Joint technology initiatives (JTIs): An association similar to ETPs but more formal and between a more limited number of parties, mainly multinationals and research institutes. JTIs focus on fundamental research programmes requiring significant investment. Co-financed by industry, the Commission and member states, there are currently five JTIs: Artemis (embedded computing systems, 2.7 bn euro), innovative medicines (two billion euro), clean sky (reduction of aircraft pollution, 1.6 billion euro), ENIAC (nanoelectronics, three billion euro) and hydrogen and fuel cells (940 million euro). 

Risk Sharing Finance Facility(RSFF): A loan provision conceived by the European Commission and the European Investment Bank (EIB) for R&D projects with a risk profile that is appreciably higher than average. Up to one billion euro is provided by each of the institutions for the 2007-2013 period, making it possible to obtain, via a significant amount of financial leverage, total funding of ten billion euro. 

Competitiveness and Innovation Framework Pogramme(CIP): A programme to strengthen the competitiveness of European SMEs. Included in FP7, it supports their innovation activities (in particular with regard to the environment and renewable energies), improves their financial access and provides them with support and advice. It has a total budget of 3.6 billion euro for the 2007-2013 period.