What is the impact of the current financial and economic crisis for European R&D and for science in the EU in general?
We are facing a moment in which the coordination of actions by member states at EU level, and by all countries at global level, is the priority. The Commission's strategy is based on this principle. The European Union's Economic Recovery Plan, adopted last November is a way to address short-term financial and economic needs, combined with the long-term challenges ahead of us. I see it as a lever to turn the current economic crisis into an opportunity. We can do this by building synergies between climate change and economic recovery actions, and putting together a long-term financial economic architecture that will encourage growth and sustainable development.
Within the economic recovery plan, the Commission recognises that investment in research and innovation is an investment for Europe's future. Our message is clear: there is a serious crisis, but there is a way out of this crisis, and research and innovation are part of the solution.
The Commission's plan proposes to focus on "smart" investment in research in sectors with a high potential for the development of clean technologies. We established three innovative initiatives, namely 'European Energy-efficient Buildings', 'European Green Cars' and 'Factories of the Future', that will work as public-private partnerships (PPP). The idea behind it is that public authorities give an orientation and incentive for business to invest in key research areas.
The Commission also stands strongly against protectionism. Just as there was a danger of member states turning to protectionism in response to the economic crisis, there is also a danger of "research nationalism". We must say loud and clear that, in times of interconnection and globalisation, protectionism is by no means the solution. It is the best way to amplify the economic downturn and the loss of jobs. The EU Single Market was built on the conviction that opening borders and freeing movement of goods, people, capital and services, is the recipe for success and growth. And that has given undeniable results. What is true for the economy is also true for research. Companies, large and small, and universities need an attractive and unified environment and a single market to invest in research and technology, to share knowledge, to cooperate and to innovate across the EU.
On the eve of the G20 London summit, you reached an agreement with high-level representatives of the automotive, construction and manufacturing sectors, that smart investments in clean technologies should be made within a public-private partnership framework. What is the expected timeframe and what financial resources are available to support this investment?
When I met with high-level representatives of industry in Brussels last week, we agreed that smart investments through public-private partnerships are essential for the future competitiveness of European industry. Through this sort of cooperation, we can develop sustainable technologies more quickly and effectively. The financial resources for the three PPPs are considerable: €1.2 billion will be dedicated to R&D for "Factories of the Future", and there will be €1 billion for R&D for the "Energy-efficient Buildings" initiative. The "Green Cars" initiative is worth a total of €5 billion, of which €1 billion is reserved for research activities, and €4bn will come from the European Investment Bank.
The three PPPs represent a powerful means of boosting research efforts in large industrial sectors. With this coordinated approach, there are many advantages. For instance, industry can take the lead in defining the strategic priorities and undertaking research. With a view towards the future, a stable, pre-defined budget will ensure continuity and allow industry to make durable, long-term investment plans. And there is one other benefit that I find crucial: having more opportunities to support innovation in SMEs. To allow research on priority topics to begin rapidly, the first calls for research projects will be published in July 2009 by the Commission, with deadlines by the end of the year. This could allow the first projects to start in spring of 2010. The Commission foresees that it will contribute 50% to the total R&D budget from the budget of the 7th Framework Programme, with matching investment coming from the private sector.
What are the expectations from this initiative on European level?
In the short-term, the Commission wants to help the sectors that face difficult times to be resilient and avoid massive job losses. On a longer-term perspective, these sectors have a strong potential to contribute to the green economy, and we expect this initiative will provide an incentive for industry to invest in strategic research areas. Low carbon technologies represent a key market for tomorrow and should generate jobs and sustainable growth. If European firms are the frontrunners in smart technologies to tackle climate change and energy issues, they will be the first in the market and able to profit from such innovations. This will also make the EU more attractive, to both foreign talents and investment, as a location to conduct research. Second, the Commission wants to promote public-private partnerships as a tool to foster the involvement of the private sector in the financing of research.
Let me remind you that within the "3% objective" of EU GDP invested in research, the private sector is supposed to support two-thirds of it.
How do you feel about the Lisbon strategy target to invest 3% GDP into R&D by 2010 – is it dead or is there a realistic chance it can be reached?
In my mind, Lisbon is not dead: it is more necessary than ever. The objective that the heads of states and governments have set out for the EU is still valid: we must build the world's most competitive knowledge-based and low-carbon economy. To reach these objectives, as I said, massive strategic investments in research, but also education and innovation, are essential. That is why we established the 3% EU GDP investment in R&D objective in 2002. Of course, this figure is an average figure. We are aware that we cannot ask the same efforts from all EU member states. Having said this, the 3% objective is still far from being reached by the EU: in 2007, the Union only invested 1,84% of its GDP in R&D. National situations are diverse, and a majority of member states have increased their research intensity, notably the new member states.
Given all these factors, it is highly unlikely that we will reach the 3% objective by 2010. However, I believe this objective remains valid, firstly, because it has raised awareness on the importance of R&D for the economy. Secondly, this goal has provided strong incentives to put R&D in the centre of the political debate. In the current crisis, it is likely that business investment in research will decrease, as history has shown. It is therefore more urgent than ever to increase public spending in order to create a counter-cyclical effect. Let’s keep a long-term vision.
One can learn from best practices. Finland for example increases the funding of R&D in times of financial crisis. Are there other such examples?
Finland has learned from the economic crisis they faced in the early 1990s. Their strategic investment in R&D, and notably in ICT, proved successful. The prime minister of Finland and heads of governments in Sweden, Norway, Denmark and Iceland claimed they will use the same “recipe” in the current crisis. This is obviously good news. Just recently, US president Barack Obama announced $1.2 billion for energy R&D. Clean technologies, biotechnologies, nanotechnologies are as crucial for the economy as ICT were in the 1990s, and the EU must not miss this opportunity. We have to be the champion of the third industrial revolution, the green revolution.
Other member states have committed to follow this path. Spain, for instance, has announced that it would step up its investments in renewable energy, biotechnology and the life sciences. Others, such as France, have put in place fiscal measures that allow investments in R&D to be exempt of tax. Among the new member states, Slovenia or Poland for instance announced they will increase investment in R&D in the coming years.
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