European Commission DG Competition Limitations on public funding of innovation support services Jean-Charles DJELALIAN

Agenda Background Research organisations Innovation support services

Article 87.1 EC Treaty Save as otherwise provided in this Treaty, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the common market.

Article 87.3.(c) EC Treaty The following may be considered to be compatible with the common market: … aid to facilitate the development of certain economic activities or of certain economic areas, where such aid does not adversely affect trading conditions to an extent contrary to the common interest; …

State aid for R&D&I New Community framework for State Aid for Research and Development and Innovation (OJ C323, ) What about European money? FP7, CIP, EIB do not need to comply with the Framework. Structural funds have to. Notification of new aids to the Commission: So far, only aids in favour of R&D projects, feasibility studies and IPR costs occurred by SMEs are exempt from notification. (EC Regulation N° 364/2004, OJ L63, ) By mid 2008, the Commission intends to exempt other measures through the General Block Exemption Regulation.

Agenda Background Research organisations Innovation support services

Definition of a research organisation Goal = conduct R&D and disseminate the results through teaching, publication or technology transfer; Non lucrative, all profits are reinvested in these activities Any legal status or way of financing; No preferential access to the R&D capacities or results for any undertaking. A research organisation can carry out activities of both non-economic and economic nature. Non economic = independent and collaborative R&D, dissemination, education. Economic = contract R&D, renting out infrastructures, innovation services, …

Direct State aid Public funding of a research organisation can entail State aid: Funding of non-economic activities: No aid if these activities and their costs are clearly separated from any economic activity carried out by the organisation. Funding of economic activities: No aid at the level of the research organisation if the State funding is passed on to the final client (organisation = intermediary). Otherwise, the research organisation is recipient of State aid. Is it compatible?

Indirect State aid Indirect aid can be granted to an undertaking through a public funded research organisation: The organisation conducts R&D on behalf of an undertaking: No aid if the service is provided at market price*. The organisation collaborates with an undertaking: No aid if the IPR and access rights to the results are adequately attributed to the partners to reflect their respective contributions to the project. Otherwise, the contribution of the organisation to the project constitutes an aid to the undertaking.

Agenda Background Research organisations Innovation support services

1.Aid for R&D&I projects 2.Aid for technical feasibility studies 3.Aid for IPR costs (SMEs) 4.Aid for young innovative enterprises* (SMEs) 5.Aid for process and organisational innovation in services* 6.Aid for innovation advisory and innovation support services* (SMEs) 7.Aid for the loan of highly qualified personnel* (SMEs) 8.Aid for innovation clusters* Measures foreseen by the R&D&I Framework

Innovation advisory and innovation support services Definition: Advisory services = technology transfer, technological assistance; consultancy for IPR, management, standards. Support services = office space, data banks, market research, laboratory, labelling, testing and certification. Beneficiaries: SMEs Aid: Up to / SME over 3 years Conditions: Providers benefit from a national or European certification; Otherwise, aid is limited to 75% of the eligible costs. Services must be offered at market price. Non-for-profit providers can behave as intermediaries: Then, the aid is given to SMEs in the form of reduced prices. Transparency about costs and prices must be ensured.

Thank you for your attention, Questions?