February 6, 2017
Guest blog post by Dr. Maikel Pellens, senior researcher in the Research Department “Economics of Innovation and Industrial Dynamics” at the Centre for European Economic Research (ZEW) in Germany.
The commercialisation of research is one of the bottlenecks in European science and innovation policy. The economic impact of the billions of euros invested in research and development by European governments will not be fully realised unless new products and processes actually find their way into the marketplace.
This is not a trivial matter. Indeed, a study conducted by ZEW on a 7th Framework Programme funding scheme on Key Enabling Technologies reported that firms frequently failed to acquire follow-up funding to bridge the gap between upstream research supported by European funding and bringing results to the market. Part of the problem is the complex machinery of the European research funding landscape; after having benefited from European funds, it can be difficult, even for experienced organisations, to successfully attract follow-up funding on a national level. At the same time, European funding for innovation is primarily aimed at upstream activities. The study concluded by calling for better coordination between European and national funding programmes in order to ensure research projects make it all the way to the market.
The European Commission is also trying to alleviate this problem. The current Framework Programme, H2020, included a new initiative, the Fast Track to Innovation Pilot programme (FTI). The FTI Pilot, for which €200 million of the €80 billion from the H2020 programme was earmarked, aims to help firms bring innovations to the market by providing them with funding of one to two million euros, up to a maximum of three million. The programme has proven to be successful: the European Commission claims to have received approximately 300 proposals for each of its six cut-off dates in 2015 and 2016. Of these, about 5% have been selected for funding. Whether the scheme will be continued in the future is subject to a formal evaluation.
Despite the success of the programme, its implementation could still be fine-tuned. One area for improvement is the FTI’s consortium requirement. In order to qualify for funding, firms need to form international consortia of three to five partners. And while firms are generally open to collaborating with others when it comes to more abstract research, it has long been understood that close-to-the-market R&D constitutes a different arena in which firms have to consider their competitive situation. Firms will only enter into consortia for commercialising close-to-the-market innovations if they expect to gain more from the collaboration than they expect to lose if critical knowledge inadvertently leaks to their competitors. As there are situations where not having to collaborate (or having to collaborate with only one partner) is a key condition to qualify for public funding for commercialisation, the firms that handed in a proposal likely only represent a fraction of the total number of firms that might be interested in the programme if the requirement for collaboration was relaxed. Hence, loosening this requirement might lead to more applications and therefore a wider pool of potential innovations to fund.
While the FTI will have a beneficial impact on commercialisation throughout Europe, its collaboration requirement constitutes a trade-off against the programme’s efficiency. Simply removing the condition is likely impossible due to the Framework Programme’s commitment to cooperation and knowledge transfer. A more salient solution would be for Europe to leave commercialisation stimuli to national authorities, which are less bound to cooperation requirements. As commercialisation and entry of new firms begins in many cases on a national level, supporting it nationally would be appropriate. Europe can step in in cases where the resources required are beyond the means of any one nation, or when commercialisation plans have a clear European dimension, for instance when the targeted market is distinctly on the European scale. The key issue is then ensuring the smooth transfer of firms from European cooperative research funding schemes to national implementation support schemes through close collaboration between European and national agencies, which can be difficult. With this in mind, the Commissioner for Research, Science and Innovation Carlos Moedas proposed the establishment of a European Innovation Council (EIC) that could streamline this path to the market by integrating and simplifying national and European funding flows.Blogactiv Team