1. I3U Commitment 15 Screening of the regulatory framework
Vienna, I3U Project Meeting & Technical Workshop, September 2015
Johannes Pöschl, Sandra Leitner

2. Screening of the regulatory framework (commitment 15)
Focus areas: Eco-innovation (C18) and European Innovation Partnerships (EIP – C29)
Rationale
Regulation to deal with market failures
Regulatory framework is main driver of Eco-innovation and innovation in many EIPs where innovations are not self-enforcing (Rennings, 1998)
Regulatory failures - outdated regulations may lead to socially suboptimal results and hinder further innovation (Pelkmans and Renda, 2014)
Implementation and enforcement of rules also play a crucial role
Inconsistencies of rules and practices hamper the development of high growth innovative firms (EC, 2014)
Regulatory failure can also be if the policy leads to deviation from a long-term goal

3. What can be done and what has happened so far?
Solution
Review rules and practices for inconsistencies and constant screening and careful adaptation of regulatory rules to set right incentives
Single innovation market & Top down action plans vs. National Innovation Systems
Rarely isolated regulations but a net of laws, by-laws, implementation rules
Regulatory areas related to the EIP Water: water, environmental, innovation, SME, regional development, industrial, agricultural, energy, IPR, education, migration, …
What has happened so far within Horizon 2020?
Six-Step approach analysis conducted for raw materials and water (Peter et al., 2014)
Workshops on the regulatory screening in the areas raw materials and water
EU Secretariat-General: regulation has currently a high priority (Peter)
Differences in regulatory frameworks imposed barrier in innovations and reduces market size of cosmetic product, which led to significant economic loss. (Shweta and Swarnlata, 2008)

4. The relationship between regulation and innovation
1. Define sufficiently narrow area
2. Scope area (involve stakeholders)
3. Identify barriers and drivers
4. Screen regulatory landscape
5. Analyze links of regulation and innovation
6. Recommendations
Body of EU law
2. Scope area (involve stakeholders)
Source: Berr (2008), Pelkmans and Renda (2014)

5. Instruments and types of impact
Instruments with respect to regulation
Market based instruments changing incentives (tax, fee, subsidies)
Command and control (bans, standards)
Impact
Stimulate innovation in the desired field (e.g. Eco-Innovation) but additional costs for other firms, which overall can be offset or not (Porter-Hypotheses)
Fast transition to newer technologies but without adaptation lock-in effects likely
Uncertainty depending on transparency and frequency of change of regulatory requirements
Environmental: resource efficiency, waste reduction, recycling
Instrumente zur Förderung von Umweltinnovation S.35

6. Screening of the regulatory framework – Commitment map

7. Overlaps with commitment 15
Strong Overlaps
Eco-Innovation (18)
European Innovation Partnerships (29)
Standardization (16)
Public Procurement (17)
Other Overlaps
With almost all other commitments: SMEs (7), EU Patent (14, 22), Access to Finance (11, 12), International Talent (30), …