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7 Research and Development policy

The European Union is increasingly becoming a knowledge-based economy and society. The development of knowledge has a direct effect on competitiveness and employment, as well as on the way society functions in general.

Although the importance of knowledge was explicitly recognised at the European Summit in Lisbon in February 2000, research in Europe displays contrasting features. There are unquestionable strengths, but also evident weaknesses, as reflected in a trade deficit in high tech-products of over EUR 20 billion. This, in turn, reflects a number of underlying factors - a lower level of expenditure on R&D in the EU (1.8% of GDP) than in the US (2.8%) and Japan (2.9%), a less dynamic environment for innovation and a relatively fragmented research system (divided between 15 Member States).

Accordingly, the European Commission has concluded that a genuine 'European Research Area' needs to be created to improve the situation. 1

The regional dimension of the European Research Area

According to the Commission, to establish a European Research Area, Member States need to consider policies on finance, human resources, the relationship between the public and private sectors, the creation of a common reference framework and values, and regional aspects. On the last issue, the Commission pointed to the importance of studying and putting in place the conditions for a 'real territorialisation' of research policies or adapting these 'to the geographical socio-economic context.2' It has, therefore, invited policy-makers at all levels to consider both the challenge posed to regions by the European Research Area and how they can contribute to its achievement.

Action at the regional level

Regional and local authorities already support research, technological development and innovation. It is estimated that the finance they provide amounts annually to almost 1½ times the total appropriation of the EU Framework Programme (EUR 4.5 billion compared with EUR 3 billion), over 90% of which is allocated on a regional basis. 3

The authorities concerned are best placed to form the links with companies necessary for innovation and, therefore, the generation of economic wealth and employment. Creating networks of knowledge, clusters of companies, linking the scientific system to the needs of industry and services are all easier to organise at local and regional level.

Regional authorities are also well-placed to review best practice and to identify other regions with which they can fruitfully cooperate, which may be relatively distant ones, such as those which form the network of the 'four regional engines for growth', Baden Württemberg, the Rhone-Alps, Lombardia and Cataluña, or neighbouring areas, such as Brussels, Flanders, Kent, Wallonia and Nord-Pas-de-Calais. Such cooperation can help strengthen regional capacity for research and innovation by facilitating specialisation and complementary action and encouraging the rapid dissemination of knowledge.

By pursuing their own interests, therefore, regional authorities can increase the momentum towards the establishment of a European Research Area as well as ensuring its effectiveness and consistency.

The establishment of a European Research Area, however, is not confined to the most central and competitive regions. The instruments available - the Framework Programme, the Structural Funds and action at national and regional level - should be used together in a more coherent way, each according to its objectives, in order to enable all regions to participate fully in the area.

Networking and encouraging regional specialisation

The Commission Communication on Guidelines for EU Research Activities (2002-2006), adopted in October 2000, indicates how regions are intended to be involved in the European Research Area and sets out a number of Community objectives in five major areas: research activities, innovation and SMEs, infrastructure, human resources and the relationship between science, society and citizens.4 4 It indicates three horizontal aspects which need to be taken into account in this regard: the overall coherence of European cooperation over science and technology, the international dimension of projects and the regional aspect. It also emphasises the importance of carrying out measures which encourage the full use of regional potential, through networking and exploiting geographical features or areas of economic specialisation.

Member States indicated their perception of the regional dimension of European Research Policy in the resolution of the Research Council in November:

'The Council of the European Union:... emphasises the importance of promoting the scientific and technological performance of all the regions of the Member States and participating countries, including the cross-border dimension, both within the European Research Area, in future framework programmes and in other relevant community initiatives.'

In this regard, the following aspects, which are considered in turn below, are of some importance:

  • the learning effects of being part of European RTD consortia and networks;
  • the mobility of researchers as a mechanism for the tacit exchange of knowledge;
  • the policy learning effect of RTD activities.

Shared-Cost RTD projects in the Fourth Framework Programme

The most important mechanism for EU funding of RTD is the 'shared-cost actions' in the Framework Programmes, which are project-based contracts between the Commission and the participants. Since the latter generally consist of organisations from a number of Member States, this enables knowledge and ideas to be shared and new know-how and technology to be developed jointly. The participation of representatives from cohesion countries and Objective 1 regions, therefore, is a way of improving the knowledge flow into these areas.

A detailed analysis of the regional impact of RTD policy has not been possible because data on the geographical distribution of expenditure from the Fourth Framework Programme (FP4) are not published. Some national data exist, but not for all countries and regions, and they are not based on official European statistics but on national surveys. The following analysis concentrates on numbers participating and other available indicators.

Relating participation figures to indicators of national RTD capability, such as the number of RTD personnel in a country, indicates that the cohesion countries are performing well, with Greece, Ireland and Portugal in leading positions. Closer examination, however, shows participation being heavily concentrated in the capital city areas. On the other hand, this concentration seems to be diminishing, with other regions in these countries accounting for a growing share of participation.

Participation and the number of projects from Objective 1 regions and cohesion countries increased over the second half of the 1990s. The number of projects with at least one partner from an Objective 1 region rose from 27% in 1994 to 41% in 1998. The total number of participations (ie the number of occurrences of participation in projects) from Objective 1 regions in FP4 has gone up from 1,705 in 1995 to 4,067 in 1998, although in relation to the overall number of participations, it declined slightly from 16% in 1995 to just over 15% in 1998. Examination of the evidence shows that there is a positive relationship between the extent to which organisations from a particular region participated in the Framework Programme and RTD capability indicators, such as R&D expenditure and number of R&D personnel.

Encouragement of SMEs to participate in the Framework Programme was successful in increasing their share of total participation in FP4. However, a lack of official statistics on the type of participants at NUTS2I regional level means that it is not possible to verify whether this had a positive impact on Objective 1 regions. Nevertheless, the user survey, carried out as part of the Five-Year Assessment of European RTD programmes (1995-1999), suggests that in Ireland and Spain, representation of SMEs was higher than the EU average.

Since 1994, the Central European Countries (CECs), Russia and the Newly Independent States have been covered by the INCO-COPERNICUS programme. (INCO's contribution to the CECs countries in FP4 amounted to a total of ECU 78.3 million.) The need to strengthen links with the established RTD sector in the candidate countries is important for safeguarding and strengthening their scientific and technological potential and INCO has provided a sound foundation, support and guidance for them, though industry participation was low.

Participation in FP4 was important in increasing cooperation between EU Member States. In the 8 years, 1987 to 1995, there were 150,000 instances of cooperation between large companies, SMEs, universities and public or private research centres as a result of EU RTD activities. After 1995, under FP4, the number of instances of cooperation increased significantly, to 113,990 in 1996 and 78,300 in 1998, the variation reflecting the implementation cycle.

Such collaboration in RTD is one of the most direct ways in which knowledge, both tacit and codified, is transferred between organisations in different European countries. Accordingly, any increase in instances of cooperation involving organisations in the cohesion countries helps to reduce disparities across the EU in access to know-how. Over the course of the Fourth Framework Programme, cooperation links have varied from one year to the next without showing any distinct trend. Overall, links between the four cohesion countries and the other 11 Member States accounted on average for 22.2% of the total created annually, which is a good indication of the stimulative effect of the Framework Programme on disadvantaged regions (Table 8).

At the same time, it appears that organisations from cohesion countries participating in projects tend, in general, to gain more from this than those from elsewhere. The user survey of participants in FP4 indicates that participants from Greece, Spain and Portugal were more positive than average, or about the same as the average, as regards the impact on their scientific and technological standing, competitive position, productivity and employment. On the other hand, participants from Ireland were, in general, less satisfied than average with the impact on them, including in relation to their scientific and technological standing.

Mobility underpinning RTD capability

The European Commission Programme, 'Improving the human potential and the socio-economic knowledge base,' is aimed at increasing the mobility of researchers throughout the EU. According to several studies, the cohesion countries are well represented in programmes, such as the Training and Mobility of Researchers (TMR) under FP4, and have a relatively large proportion of their researchers receiving fellowships to work in 'centres of excellence' in other Member States. The UK is by far the most popular host country, followed by France, and the opportunity for young researchers to gain experience in research organisations best suited to developing their careers is an important aspect of policy.

In any assessment of the effect of mobility and cohesion, two considerations need to be taken into account:

  • the possibility of increasing the mobility of researchers in the EU should not reinforce the 'brain drain' from less developed to core RTD regions. Given a general shortage of skills in many parts of Europe and the increased competition for highly qualified researchers, this problem is likely to become more acute. The Return Grants scheme which helps researchers from less favoured regions return home is a response to this problem, although only some 6% of TMR fellows from less favoured regions are eligible for the scheme and make use of it. The effect on the movement of researchers between EU regions of programmes like TMR has, however, yet to be studied;

  • studies of RTD expenditure from the Structural Funds indicate that there is not necessarily a link between an increase in RTD resources and personnel in Objective 1 regions and the innovative capacity of businesses situated there. The gap between public RTD activities and the needs of firms is particularly wide in these regions. Improving the international career prospects of young researchers is unlikely in itself to increase the 'absorptive capacity' of a region in the short-term.

As noted above, there is a positive association between the rate of participation in EU RTD projects and the RTD capacity of a region, as measured, for example, by the number of R&D personnel in the population. This suggests that a long-term strategy of investing in people will increase the capacity to collaborate in international research and technology projects. Efforts should, therefore, be made in cohesion countries and lagging regions to develop good career possibilities for researchers as a means of combating the brain drain.

Recent Shifts in RTD Policy

The Fifth Framework Programme (FP5), represents the continuation of a shift in focus from a policy oriented exclusively towards technology to one that includes innovation as a key concept. In essence, previous Framework Programmes prioritised areas of science and technology where Europe needed to strengthen its capability, whereas FP5 started from a statement of the most pressing societal problems which science and technology could help solve. Nevertheless, the Five-Year Assessment Panel that evaluated the first phase of FP5 concluded that more attention could be paid to social and economic aspects.

In principle, the way that the goals of FP5 are formulated allows more consideration to be given to the distribution of knowledge, to building 'absorption capacity' and not just to knowledge creation.

A horizontal programme for 'Promotion of Innovation and Encouragement of SME participation' has widened the target group to include not only high-tech performers, but also companies for which initial entry into the Framework Programme is difficult. The aim is to reduce obstacles to innovation for companies in less favoured regions and in more traditional sectors. At the same time, the provision of information to potential applicants, through Innovation Relay Centres, National Contact Points, more transparent Info Packs and so on, has been improved to reach a larger audience. While excellence in science and technology is still the main criterion for participation in FP5, there are parts of the programme which enable participants to achieve such a level over time.

The candidate countries in Central Europe have been granted full access to FP5, which should enable them to continue their links with the science and technology community in the EU and which should help overcome the technology gap that exists between them and the leading European countries.

Policy learning effects from EU RTD Initiatives

The EU has played a major role in disseminating good practice in RTD policy by helping to create a 'European Research, Technology, Development and Innovation Community,' where decision-makers, researchers, and other interested parties can communicate and work together, in both formal and informal ways, in official advisory committees, specific RTD programmes and policy exchange initiatives. By assisting in this, and through its influence on policy formulation and implementation, EU policy has indirectly contributed to closing the RTD and innovation gap between Member States and regions, and, by changing the culture, it has, in some respects, improved the policy planning process.

Moreover, initiatives such as, in particular, the Regional Technology Plans (RTP), the Regional Innovation Strategies (RIS), the Regional Innovation and Technology Transfer Strategies and Infrastructures (RITTS) and Trans-Regional Innovation Projects, jointly set up by DG Regional Policy and DG Enterprise, have helped put innovation high on the policy agenda in over 100 regions. These projects have stimulated the establishment of ongoing and long-lasting processes in these regions and have, therefore, prepared the ground for further decentralisation of RTD policies to the regional level. Fine-tuning of the planning of RTD policy and the deployment of the Structural Funds for this purpose has been integral to the success.

Conclusion: Progress in increasing the contribution of EU RTD policy to social and economic cohesion

EU RTD policy has increased its support for those involved in research and technology in the cohesion countries, less favoured regions and candidate countries. The absence of statistics on funding prevents quantification of the extent to which funding has been directed towards the latter. The increased number of projects with participation from Objective 1 regions, however, and the relatively favourable position of research fellows from cohesion countries in the European Human Mobility schemes point towards a positive contribution towards reducing regional disparities. Moreover, various measures have helped improve the effectiveness of policies relating to innovation in a number of disadvantaged regions.

The candidate countries have gained from the experience under the INCO programme of developing and managing RTD consortia and establishing partnerships with EU organisations as well as from being introduced to the art of writing EU RTD proposals. They are likely to gain further from full membership of FP5, although most countries lack the overall capability to participate extensively. Up until now, it has been mainly scientific institutes which have taken part in RTD projects and higher levels of business sector participation remains to be achieved. Positive effects on competitiveness and economic cohesion will, therefore, take longer to emerge than in the present Objective 1 regions.

Overall, EU RTD policy has adopted an approach oriented more towards innovation than technological excellence as such, better addressing the deficiencies of less favoured regions as a result. The regional dimension of RTD policy has come to be featured explicitly in the Initiative 'Towards a European Research Area'. An improvement in the interaction between the deployment of the Structural Funds and RTD policy is important to accelerating the 'catching up' of lagging regions.

The Structural Funds can provide the necessary support for firms and research institutes in the latter to participate on equal terms in future RTD programmes. Moreover, the conditions for a genuine 'territorialisation' of research policies (ie adapting these better to the geographical, social and economic context) need to be studied and put in place. This could open up new opportunities for policies at all levels to be better integrated into regional or interregional development programmes and for the synergies between them to be strengthened.

  1. 'Towards a European Research Area', COM(2000)6, 18 January 2000.
  2. Such a study was launched in December 2000: 'Involving the regions in the European Research Area: refining the territorial conditions to optimise the creation and the transfer of knowledge in Europe' Price Waterhouse Coopers.
  3. 'Role of the local and regional authorities in the field of research, technological development and innovation', October 2000, Bannock Consulting Ltd.
  4. 'Making the European Research Area a reality: guidelines for European Union Research activities (2002-2006)' , COM(2000)612, 4 October 2000.



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