1. FP7 - April 2005 1 The European Research Area in the Age of Globalisation Henri Delanghe DG RTD, C4 (Economic and Prospective Analysis Conference on Knowledge and Innovation 11 January 2007

2. FP7 - April 2005 2 The Lisbon Agenda l Broad consensus … –Lisbon European Council (2000) –Subsequent European Councils [Göteborg (2001), Barcelona (2002), etc.] –Senior expert reports (Sapir, Strauss-Kahn, Kok, Aho) l … on fact that –Europe faces many economic, social and environmental challenges –Europe should turn itself into a knowledge-based economy –More and better investment is needed in the knowledge triangle of research, education and innovation

3. FP7 - April 2005 3 The European Research Area l Not a new concept l A somewhat confusing concept –Geographical scope? –Conceptual scope? –Final objective? –Underlying assumptions? –Etc.

4. FP7 - April 2005 4 The European Research Area l Yet 3 specific objectives –To increase the funding for research –To promote the exploitation of research results –To reduce the fragmentation and dispersal l “3 percent objective”

5. FP7 - April 2005 5 The 3 Percent Objective l Context –Economic growth depends on R&D and innovation –Low level of R&D expenditure in Europe  Low R&D intensity, especially private  Large absolute gap with US  Triadic R&D competition logic l Barcelona European Council (2002) –“Overall spending on R&D and innovation in the Union should be increased with the aim of approaching 3 percent of GDP by 2010. Two thirds of this new investment should come from the private sector”

6. FP7 - April 2005 6 The 3 Percent Objective l Recognition of importance horizontal policy coordination l More effective use of public financing for business R&D …  Direct support measures  Fiscal incentives  Guarantee mechanisms  Public support for risk capital l … but also more attractive framework conditions  Sufficient and high quality human resources  Strong public research base with improved industry links  Entrepreneurship for and through R&D  Effective adaptation and use of intellectual property rights systems  Research and innovation friendly regulations  Competitive environment  Supportive competition rules  Supportive financial markets  Macro-economic stability  Favourable fiscal conditions

7. FP7 - April 2005 7 Implementation of the Lisbon Agenda l Many goals, in many policy fields, legal competence for action different according to field l Full range of existing policy instruments used –EC legislation –Programmes and funding –Actions plans l In addition, “Open Method of Coordination” –To spread best practice and to achieve greater convergence towards the main EU goals –Inter-governmental –Soft

8. FP7 - April 2005 8 Implementation in the Field of Research l EC legislation (e.g. Community Patent) l Framework Programme l Action plans (e.g. 3 percent) l Open Method of Coordination (e.g. 3 percent)

9. FP7 - April 2005 9 The Lack of Progress since 2000 l In the implementation of the Lisbon Agenda –“Disappointing delivery” –“Far from achieving the potential for change” l Towards the 3 percent objective –Overall R&D intensity –Private R&D intensity –Gap –Share of world R&D

10. FP7 - April 2005 10 Explaining the Lack of Progress towards the 3 percent objective l Objective itself l Horizontal policy coordination –Understanding of horizontal policy coordination –Implementation of horizontal policy coordination l Exposure to foreign stock of knowledge l Governance

11. FP7 - April 2005 11 Explaining the Lack of Progress towards the 3 percent objective EU Research New Knowledge Innovation Growth Public Policy Domestic Research System New Knowledge Innovation Growth Domestic Innovation Climate Foreign Research System Public Policy

12. FP7 - April 2005 12 The other two ERA objectives (better exploitation, less fragmentation) l Objectives l Implementation l Progress l Explanations

13. FP7 - April 2005 13 Implications for ERA l Objectives l Horizontal policy coordination l Openness l Governance l Evidence