Commission Communication Implementing the renewed partnership for growth and jobs Developing a knowledge flagship: the Institute of Technology (link)

Brussels, 24 Feb 2006

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN COUNCIL

Implementing the renewed partnership for growth and jobs Developing a knowledge flagship: the European Institute of Technology
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INTRODUCTION

Improving the relationship between education, research and innovation ­ and specifically their contribution to economic growth, employment and social cohesion ­ is fundamental in enhancing the competitiveness of the EU. It is a common perception that in Europe, this relationship does not work as well as it could; and this perception led the Commission to put forward a new initiative in its 2005 Spring Report:

"In order to reinforce our commitment to knowledge as a key to growth, the Commission proposes the creation of a "European Institute of Technology" to act as a pole of attraction for the very best minds, ideas and companies from around the World"1

The European Council took note of this proposal at the 2005 Spring Summit. In October 2005, at the Hampton Court informal meeting, it called for urgent action to achieve world- class excellence in both research and education. The need for action to reinforce the quality of European innovation systems and remain competitive on the global scene is further documented in the Commission's 2006 Annual Progress Report on the Strategy for Growth and Jobs2.

This Communication takes up the idea of a European Institute of Technology (EIT). It follows a wide public consultation, in which the most important university, research, business and industrial innovation organisations took part, along with numerous individuals from each of these sectors. It gives a description of the way the EIT might work, and the way it should be developed. A more detailed impact assessment extended to include a full examination of the legal and financial implications will follow later this year.

2. MAKING A SUCCESS OF THE KNOWLEDGE TRIANGLE - THE CASE FOR A NEW INITIATIVE

During 2005 the Commission organised a comprehensive consultation process about a future EIT, with brainstorming meetings and position papers from university, research and innovation organisations. The results of the public consultation are presented and analysed in details in a separate Commission staff working document3. They cover issues such as the mission and objectives of the EIT, its structure and priorities.

There has been general agreement that the core challenge faced by the EU in the innovation area lies in its inability to fully exploit and share R&D results and consequently to translate them into economic and societal values. Europe should not only develop the three corners of its "knowledge triangle" (education, research and innovation), but reinforce the bridges between them. This also echoes the findings of the expert group on R&D and innovation4.

COM(2005) 24 , "Working Together for Growth and Jobs: a New Start for the Lisbon Strategy", par. 3.3.2. COM(2006) 30 , "Time to move up a gear: the new partnership for growth and jobs". See the forthcoming Commission Staff Working Paper on "Results of the Public Consultation on the Concept of a European Institute of Technology". "Creating an innovative Europe", Report of the independent expert group on R&D and innovation appointed following the Hampton Court Summit, January 2006. Within this common diagnosis a wide range of causes appear. On the knowledge supply side, both the quality and the usability of knowledge outcomes are criticised. In particular, the gap between research outcomes and their application is still wide5. These two issues cannot be considered separately. Although its general level of university performance is good, Europe needs more excellence6, because of its important societal and economic impacts. It nurtures the circulation of talents, attracts private R&D investment, and helps the discovery of ideas able to produce widespread knowledge spill-over effects. But if excellence is to flourish, researchers also need to have an access to environments in which selection as well as career is based on competition, paying for performance is not a taboo, and engaging in business is seen positively as an important learning opportunity in a researcher's curriculum. This in turn needs new ways of working together.

A critical concentration of human, financial, and physical resources is needed to create a virtuous circle in which talented faculty, researchers and students attract both each other and competitive funding from private and public sectors. At present, universities in Europe have very similar ambitions, but their efforts are too dispersed. There are nearly 2,000 universities in the EU aspiring to be research-active. While not wholly comparable, less than 10% of higher education institutions in the US award postgraduate degrees and even fewer claim to be research-intensive universities7. Given the lower level of education and R&D spending in Europe compared to the US8, in Europe there are more actors seeking a slice of a smaller cake. The US arrangement leads to a concentration of resources and people that achieves critical mass in those few institutions concerned9, and helps them to be amongst the best in the world. It is not pure chance that both EU R&D companies spending and EU talents are drained by US or other international competitors10, and that few EU universities are mentioned in the world's most-quoted international rankings of universities.

At the same time, there is not enough demand in Europe for research outcomes. Even if more excellent research products or capacities were available, it is unlikely that their commercial value would be exploited. A major reason for this weakness is the cultural and intellectual gap between researchers and entrepreneurs11. Innovation needs a mutual learning process based on

According to the Innovation Scoreboard 2005, the innovation gap between Europe, Japan and US is increasing. It would take more than 50 years for the EU 25 to catch up the US level of innovation performance. Europe needs to reinforce its presence in the higher level of scientific excellence. For example, according to the Shanghai Academic Ranking of world Universities, although within the Top 500 worldwide universities there are 205 based in Europe (compared to 198 in the US), within the Top 20 there are just 2 European universities (compared to 17 based in the US). Out of some 3300 degree-awarding bodies in the US, about 215 award post-graduate degrees. There are fewer than 100 recognised general research-intensive universities in the US. In 2004, EU R&D intensity was 1.90% (R&D expenditure/GDP), well below the US (2003: 2.59%) and Japan (2003: 3.15%). See also Eurostat press release 156/2005 of 6 December 2005. In the US 95% of federal university research funding is spent in nearly 200 universities out of a total of 3.300 (S&E Indicators, National Science Foundation, 2004). 10 Europe benefits less from the increased globalisation of R&D than its main competitors. Over the years 1997 2002, R&D expenditure by EU companies in the US increased in real terms much faster than R&D expenditure by US firms in the EU (+54 % against +38 %). Emerging countries like India and China are those that benefit more from US R&D outflows. Key Figures 2005 on Science, Technology and Innovation: Towards a European Knowledge Area, European Commission.

Brussels, 22.2.2006 COM(2006) 77 final