UK Brussels Cohesion Group 3 October 2006

1
UK Brussels Cohesion Group3 October 2006

• Innovation and the Structural Funds,
• 2007-2013
• Veronica Gaffey
• Innovative Actions Unit
• DG Regional Policy, European Commission

2
Innovation the Challenge

• The EU is confronted with
• socio-economic disparities between Member States
  and regions
• increasing competition from US/Japan and South
  East Asia
• a technological revolution and ageing population
• limited capacity to transform RD into commercial
  products and processes

3
Innovation Performance in the EU
4
Innovation a Regional Necessity

• Factors of competitiveness no longer derive from
  costs or natural or geographical advantages but
  in the capacity of enterprises to innovate
• Less developed regions have an even greater
  interest in developing their innovative capacity
  in the stronger sectors of their economy (long
  term benefits)
• Regions the appropriate level for stimulating
  innovation
• Potential also for less exposed sectors (e.g.
  education, health, personal services,
  administration)

5
The Process of Innovation

• Performance of a region in innovation depends not
  only on the performance of enterprises and
  research institutes, but also the manner in which
  they interact
• Innovation is the result of frequent interactions
  between different actors, enterprises,
  organisations whose knowledge and know-how
  accumulates
• Proximity between different actors facilitates
  the acquisition, accumulation and use of
  knowledge
• Therefore, greater emphasis on networks which
  link the enterprise to its environment (other
  enterprises, universities, research institutes,
  etc.)

6
Cohesion Policy and the Lisbon Agenda

• Europe must renew the basis of its
  competitiveness, increase its growth potential
  and productivity and strengthen social cohesion,
  placing the main emphasis on knowledge,
  innovation and human capital
• To achieve these objectives, the Union must
  mobilise all appropriate national and Community
  resources including cohesion policy
• (Presidency conclusions, European Council March
  2005)

7
"Earmarking"

• European Council agrees targets for expenditure
  of Structural and Cohesion Funds on Lisbon
  priorities 60 for convergence objective 75
  for regional competitiveness and employment
  objective
• (Presidency conclusions, European Council
  December 2005)
• Currently, 49 of Objective 1 and 60 of
  Objective 2 cohesion spending is dedicated to the
  priorities proposed for "earmarking"

8
Finnish Presidency of EU

• Commission 10 point programme for action at
  national and European level to be discussed in
  Lahti in October 2006 Action 5 Foster
  innovation through new Cohesion Policy programmes
• November Informal Council to discuss Innovation
  in Regional Policy programming documents

9
Community Strategic Guidelines 2007-2013 3 Major
Priorities

• Improving the attractiveness of Member States,
  regions and cities
• Encouraging innovation, entrepreneurship and the
  growth of the knowledge economy
• Creating more and better jobs

10
Innovation in the Community Strategic
Guidelines, 2007-2013 (1)

• Develop and implement strategies to improve
  knowledge and innovation for growth
• Increased and improved investment in RTD
• Strengthening co-operation between businesses,
  research/ education institutions, e.g., through
  clusters
• Support for RTD activities in SMEs technology
  transfer
• Cross-border transnational initiatives
• RD capacity building
• Innovation and entrepreneurship
• Poles of excellence clusters
• Business support services
• Eco-innovation
• Innovation awareness, spin-out and spin-off
  companies

11
Innovation in the Community Strategic
Guidelines, 2007-2013 (2)

• Information Society
• Promoting increasing use of ICTs through support
  for supply demand of ICT products services
• ICT infrastructure where market failure
• Access to Finance
• Non-grant financial instruments (e.g., loans,
  secured debt financing, seed/venture capital)
• Outreach to specific groups (e.g., young or
  female)
• Regional strategies for innovation should make
  specific provision for experimentation to
  increase the capacity to stimulate regional and
  local actors (particularly SMEs) to innovate

12
Structural Cohesion Fund Programming

• National Strategic Reference Frameworks
• Operational Programmes under 3 Objectives
• Convergence
• Regional Competitiveness and Employment
• Territorial Cohesion
• No separate budget lines for community
  initiatives/pilot projects/ innovative actions
  (as in the past)
• Informal negotiations on NSRFs already started
  aim to have all NSRFs , OPs agreed by end
  2006/early 2007

13
Innovation in Operational Programmes

• Major investment (particularly in Convergence
  Objective regions) in environment supportive to
  innovation (knowledge infrastructure, education
  and business support)
• All regions possibility to support a process to
  develop or improve a regional innovation strategy
  including experimentation - whereby new ways to
  improve public policy in support of regional
  development can be planned and tested

14
The Commission recommends

• In addition to traditional investments in
  innovation planned in Operational Programmes
• Support to establish or improve an innovation
  strategy throughout the 2007-2013 period in the
  framework of the OP
• Testing of new actions or approaches through
  pilot projects - experimentation
• More extensive implementation of successful
  actions in later years of programme
• Guidance Document Innovative Strategies and
  Actions Results from 15 Years of Regional
  Experimentation

15
What could be included in an Operational
Programme?

• A section stating that the OP foresees an
  instrument ("laboratory") for experimentation
• A financial allocation
• Objectives of instrument, management and
  implementation (responsibility, project selection
  issues, analysis dissemination of results) and
  links to the Monitoring Committee
• Possibility to use sub-delegation (global
  grants), working groups, or actions for
  inter-regional co-operation (art. 37 (6)b of
  General Regulation)

16
Experiences from RIS/RISI and Innovative
Actions, 1994-2006

• Regional Innovation Strategies, which evolve over
  time, are central
• New partnerships (particularly with private
  sector) can enhance legitimacy and focus, improve
  co-ordination and guarantee transparency
• Importance of links to mainstream
• Regions generally the most appropriate level
• These instruments can be catalysts for innovation
  through acceptance of risk
• Demonstration effects and visibility need for
  evaluation
• Competence and motivation of those managing
  experimentation is crucial can improve
  administrative capacity of regions

17
Developing a Regional Innovation Strategy

• Build on experience gained 1994 to-date
• Identify a sector for the strategy where the
  region has potential to develop (e.g.,
  information society, environmental technologies,
  tourism, health personal services)
• Involve appropriate public and private actors in
  the development, monitoring and evaluation of
  innovation strategies and experimentation of
  actions which can support innovation and which
  can be implemented more extensively after testing
  through the priorities of the OPs
• Public sector acts as facilitator and catalyst,
  supporting an increase in the capacity of policy
  interventions and intermediary organisations to
  stimulate regional and local actors SMEs in
  particular to innovate