Research Action Plan (Extract from Background for the Competitiveness Council of 22 Sep)

Brussels, 18 Sep 2003

The Council is expected to adopt a resolution on "Investing in research for European growth and competitiveness" which follows the presentation last May by the Commission of its Action Plan comprising a package of comprehensive and coherent actions to increase investment in research and close the gap with Europe's main competitors.

The Italian Presidency attaches great importance to this issue, which was thoroughly discussed at the informal meeting of Competitiveness Ministers held in Rome on 11 and 12 July 2003. At this meeting, it was underlined that the Commission's Communication on "Investing in Research - An Action Plan for Europe" is a sound basis for actions aiming at increasing investment in Research and Development (R&D).

The draft resolution reflects in various issues the results of the debate held by Ministers at the informal meeting in Rome. In particular, the most innovative aspects are as follows:

• Member States are invited to enhance access to equity and debt financing for research and innovation through a range of measures giving particular attention to the needs of SMEs in new as well as traditional sectors and of new innovative SMEs and spin-off firms;
• A European risk capital/venture capital market should be developed, as well as greater complementarity between European Investment Bank and European Investment Fund initiatives and national initiatives, with specific regard to the needs of SMEs;
• Member States are also encouraged to promote a supportive environment for the development and deployment of new technologies and improve the social, fiscal and administrative framework conditions in order to make the European Union more attractive for private investment and stimulate the creation and growth of high-tech enterprises;
• In particular, the Commission and the Member States are invited to examine the possibility of using to a greater extent the EU structural funds to support research, development and innovation, bearing in mind the role of these funds to promote social and economic cohesion, and taking into account the specific needs and potential of different regions, including those of acceding States;

The main outstanding issue amongst delegations concerns the inclusion in the draft resolution of a reference to the Stability and GrowthPact and the consideration to be given to public expenditure on research.

It is recalled that the Barcelona European Council of March 2002 set the objective of increasing overall spending on R&D and innovation in the European Union with the aim of approaching 3% of GDP by 2010. Achieving this objective is a precondition for progress towards the wider strategic goal set by the Lisbon European Council of March 2000 of making the European Union the most competitive and dynamic knowledge-based economy in the world.

The Action Plan put forward by the Commission suggests some 50 new actions in research and innovation policies as well as in other policy areas. Many of the actions are geared to making Europe more attractive for private investment in RTD. The main challenge of the Barcelona objective on RTD is the raising of the business contribution to the Gross Expenditure for R&D from 56% in 1999 to 67% in 2010, while total GDP will increase from 1.9% to 3%.

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