Regional Policy EUROPEAN COMMISSION 1 Innovation, Knowledge economy and regional competitiveness Role of structural funds in the New Period GUY DURAND DG REGIO LJUBLJANA, 7-8 JUNE 2005

Regional Policy EUROPEAN COMMISSION 20/5/ The Union is confronted with: high socio-economic disparities between Member States and between regions increasing competition on the one hand with the USA and Japan and on the other hand with the new emerging countries of South East Asia in particular China and India. A technological revolution and the ageing of its population. Facing up to these challenges requires the implementation of co-ordinated policies centred on the improvement of competitiveness. This is the objective of the Lisbon strategy. It aims to help the Member States, in co-operation with the Commission, to improve the identification of the issues and the adaptations necessary to strengthen competitiveness, employment and growth.

Regional Policy EUROPEAN COMMISSION 20/5/ Cohesion Policy and Lisbon The European Council of march 2005 underlined the need to re-launch the Lisbon Strategy. " The Union must mobilise all appropriate national and Community resources-including cohesion policy". The EU will support the Lisbon process with various complementary means such as the Competitiveness and Innovation Programme, the R&D framework programme, and the cohesion instruments Structural Funds are the main EU funding source of Lisbon : 50% of SF support directly relevant to Lisbon

Regional Policy EUROPEAN COMMISSION 20/5/ Knowledge economy – the Lisbon Process The European Council also underlined that greater ownership of the Lisbon objectives on the ground is necessary involving regional and local and social partners, for example in areas where proximity matters such as innovation and the knowledge economy, entrepreneurship, support for SMEs Knowledge, meaning R&D, innovation and education, is a key driver of productivity growth and at the heart of the Lisbon process for creating growth and jobs.

Regional Policy EUROPEAN COMMISSION 20/5/ Support for regional competitiveness - proposed financing for Convergence and Competitiveness 79% of the cohesion budget (264 BL €) 2.Regional Competitiveness and Employment 17% of the cohesion budget (58 BL €) of this: phasing-in regions (9.54 BL €) 3.Territorial Cooperation 4% of the cohesion budget (13 BL €) Currently discussed in Council …

Regional Policy EUROPEAN COMMISSION 20/5/ Convergence objective Regions > 75% in EU25) Index EU 25 = 100 Quelle: Eurostat Geographical Eligibility Draft April 2005, GDP/head  Objective Regional Competitiveness and Employment Phasing-in regions, "naturally" above 75% Objective Regional Competitiveness and Employment Convergence objective statistically affected regions

Regional Policy EUROPEAN COMMISSION 20/5/ Thematic concentration 1 Making Europe and its regions a more attractive place to invest and work expand and improve transport infrastructures improve the environment improve energy efficiency and development of renewable sources help maintain a healthy labour force

Regional Policy EUROPEAN COMMISSION 20/5/ Improving knowledge and innovation for growth increase and improve investment in RTD facilitate innovation and promote entrepreneurship promote the information society for all improve access to finance

Regional Policy EUROPEAN COMMISSION 20/5/ More and better job attract and retain more people in employment and modernise social protection systems improve adaptation of workers and enterprises and the flexibility of the labour market increase investment in human capital through better education and skills

Regional Policy EUROPEAN COMMISSION 20/5/ Territorial cohesion and cooperation contribution of cities to growth and jobs supporting the economic diversification of rural areas cross-border, trans-national and interregional cooperation

Regional Policy EUROPEAN COMMISSION 20/5/ EUR-27 = 1.92 < – – 1.88 >= – 0.8 no data Regional RTD expenditure in 2002 in % of GDP

Regional Policy EUROPEAN COMMISSION 20/5/ innovation and regional environment the over innovation performance of an economy depends not only on how firms and research institutes perform, but also how they interact with each other and with the public government. Innovation is the result of frequent interactions between people, firms, organisations whose knowledge and know- how are strengthened reciprocally and accumulate. proximity between different actors makes it easier for them to create, acquire, accumulate and utilise knowledge faster than firms outside of knowledge intensive, dynamic regional systems of innovation This is why increasing importance should be given to networks which connect companies to their environment (e.g. other companies, universities, training and research centres…)

Regional Policy EUROPEAN COMMISSION 20/5/ Different innovative behavior requires different policy designs and ways of measuring innovation potential ERIS-European Regional Innovation Survey conclusions: “Small firms show a high preference for local and regional cooperation partners. They have a much higher share of intra-regional linkages than large firms”. “”Innovating firms are much more engaged in networking than non-innovating firms” “Small firms cooperate to a lesser extent with universities and other research institutes, while medium size and large firms make much more use of this information and knowledge pool. Because their preference for local and regional partners, small firms depend greatly on the supportive quality of their regional environment and the innovation-relevant knowledge sources available there”

Regional Policy EUROPEAN COMMISSION 20/5/ innovation and regional environment In regions four situations can coexist, each one requiring measures for innovation adapted to its character: A competitiveness pole based on at least one major companies (e.g. Philips in Eindhoven) which develops local co-operation with other companies in particular SMEs, universities, schools of engineering, technology centres, training centres. A university pole of excellence (e.g. Louvain,), which facilitates spin-off companies and coopere with companies of the region. The opening of the university to the economic world leads to major fertilisation between research and companies. One or more groups of SMEs which spontaneously organise themselves in clusters (e.g. Italian industrial districts) or which were helped by public authorities to develop a cluster (e.g. the Spanish Basque country). SMEs without co-operation links. individual aid provided by business support services in areas such as: management, organization marketing, technological transfer, ICT, recruitment, and other professional and commercial services.

Regional Policy EUROPEAN COMMISSION 20/5/ Improving knowledge and innovation for growth - Main aims address low levels of research and technological development, especially in the private sector promote innovation through new or improved products, processes and services which can withstand international competition increase regional capacity to generate and absorb new technologies bring businesses into regional and international networks where they can co-operate and have access to sources of knowledge and technology. provide more support for risk-taking

Regional Policy EUROPEAN COMMISSION 20/5/ Objective “Convergence”: Research and technological development (R&TD), innovation and entrepreneurship: strengthening of regional R&TDI capacities; aid to industrial R&TD in SMEs technology transfer improvement of links between SMEs, universities and R&TDI centres development of business networks and clusters support for the provision of business services to groups of SMEs fostering of entrepreneurship provision of innovation funding sources for SMEs

Regional Policy EUROPEAN COMMISSION 20/5/ Objective “regional competitiveness and employment" Support to the design and implementation of regional innovation strategies conducive to efficient regional innovation systems: Enhancing regional R&TD and innovation capacities directly linked to regional economic development objectives by supporting industry or technology-specific competence centres; by promoting technology transfer; Stimulating innovation in SMEs by supporting the introduction of new or improved products, processes or services onto the market,; by supporting business networks and clusters of SMEs, by promoting cooperation between SMEs and universities, and by facilitating SMEs’ access to business support services; Promoting entrepreneurship by facilitating the economic exploitation of new ideas, and by fostering the creation of new firms from universities and existing firms; Creating new financial instruments and incubation facilities conducive to the creation or expansion of technology-based firms.

Regional Policy EUROPEAN COMMISSION 20/5/ to "deliver" innovation and competitiveness to "deliver" innovation and competitiveness improved governance and coordination of public policies for innovation regional innovation strategies and actions plans evaluation/benchmarking, exchange of experiences

Regional Policy EUROPEAN COMMISSION 20/5/ Building synergies between CIP and the Structural Funds under INTER REGIONAL Cooperation Interventions must be based on an understanding of SMEs needs, effective policies for boosting enterprise and entrepreneurship, innovation and ICT use, investments in environmental technologies, energy use, good practice in equity instruments and technology transfer. Where the CIP identifies and promotes best practice and excellence in these fields, cohesion funds should ideally be used by national and regional authorities as the main instrument to bring those who are lagging behind up to these levels of excellence.

Regional Policy EUROPEAN COMMISSION 20/5/ Building synergies between FP7 and the Structural Funds Community policies on R&D and Cohesion are complementary and mutually reinforcing FP7 activities will develop an increased regional dimension in particular under the “Capacities” programme. The Structural Funds will reinforce R&D investment in all EU regions and have the capacity to improve the overall framework conditions for research, innovation and the knowledge economy.

Regional Policy EUROPEAN COMMISSION 20/5/ l Definition of Union priorities in a Strategic Guidelines document to be established by the Council on the basis of Commission proposals ( probably end June) l Translation by the Member State of these Community priorities in a proposal for National Strategic Reference Framework. The Commission negotiates the proposal in the framework of the partnership. l Implementation by means of regional and thematic Operational Programmes Future Cohesion policy a more strategic approach

Regional Policy EUROPEAN COMMISSION 20/5/ THANK YOU FOR YOUR ATTENTION