Scrap the CAP for EU’s grown-up research industry

Date: 23/06/05

Two MEPs give their views on the what the Union should do to entice investment in European research

Unless research is accompanied by dynamic economic conditions technical knowledge will go elsewhere, says Malcolm Harbour

A deep base of scientific and technical knowledge and the ability to turn that knowledge into competitive products and services must be the foundation for the EU's economic future. Europe's competitive position in the global economy must be secured by high value in design, quality and technology.

To keep ahead of the game, we must accelerate the generation of ideas and our ability to exploit them. The two must march in step. Europe has often been very good at generating inventions but relatively poor in exploiting them commercially. Cutting-edge ideas will not generate jobs and economic growth if they are exploited outside the EU.

Investment in research is crucial. The public sector clearly has a key role in underwriting risk, supporting the generation of long-term ideas and promoting the promising, far-sighted ideas that do not yet have an application.

But recognising the value of research and innovation is not enough. The value has to be backed by hard cash. Europe's most critical competitiveness gap compared with the rest of the developed world is in research and development (R&D) spending. Europe invests about a third less in public and private funding than the US. The number of science and technology graduates is declining in many countries and the rewards for bright university researchers are well below world-wide average levels and there is a continued 'brain drain' to the US.

Public funding will continue to play a vital role in supporting the knowledge base of universities and other learning centres. The EU Framework Programmes (FPs) play a crucial role in supporting the key technologies that will have maximum impact on growth and jobs. EU projects can also help to consolidate and share knowledge between top centres, reducing duplication and multiplying effect. But large increases in public support cannot be assured. Budgets are too constrained and there is regrettably no political will to cut short-term support in agriculture in favour of long-term investment in research.

So the private sector must play a key role in funding R&D. Companies should be given more incentives, through tax-breaks and targeted grants to encourage more collaboration with universities. Who in turn must be encouraged to work even more closely with the private sector so that new inventions can be exploited with a minimum of delay. They must be encouraged to raise new funding sources for technology and innovation from the private sector and from outside donors. Private capital must partner public resources.

Small- and medium-sized enterprises (SMEs) have great difficulties in managing the risks involved in R&D investment. The European Parliament has given strong political support to European framework projects that engage SMEs. But too many are still discouraged by the bureaucracy and overheads involved. This must be a priority for FP7 and it must complement incentives at European and member state level to encourage technology transfer. Innovative small businesses are often held back by a lack of skills in production design and marketing that will move an idea from the drawing board to the consumer. They also need access to finance that will help them exploit new ideas and grow businesses from an early stage of their development.

Good innovative capability is clearly linked to good entrepreneurial skills. Investment must be rewarded, whether in R&D, production or marketing. There is clear evidence that Europe's entrepreneurs are discouraged by high taxes, by excessive bureaucracy and employment laws that often discourage job creation. The EU needs to develop better ways of exploiting its cutting-edge technology. Unless technology is matched by flexible and dynamic economic conditions, the rewards will go elsewhere.

• British centre-right MEP Malcolm Harbour is co-ordinator for the EPP-ED group on the internal market and consumer protection committee.

The EU has to invest more in emerging research and less in carrots and olive oil, argues Britta Thomsen

Europe is participating in a technological race. Our main competitors are South-East Asia, India and the US. We are not ahead and, what is even more disturbing, our rivals are accelerating faster than us. To gain a technological edge much has to change in Europe.

Our main competitors invest far more in research than we do, so European research funds must be boosted. In the Commission's proposal for the 7th Framework Programme (FP7) for research the budget has been doubled. We welcomed this in the committee on industry, research and energy. Instead of reducing the €70 billion budget in the Council of Ministers, member states should follow suit in their national contexts and increase research funding.

Europe needs both more basic research and more applied research. In this respect the European Commission proposal is well balanced - with the European Research Council on one hand and the focus on technology platforms on the other. The European Research Council will give a European dimension to the best research teams by granting them fellowships for doing investigator-driven research solely on the basis of their excellence.

The technology platforms are a good method to organise industry-driven research, uniting stakeholders in industry, the research community, public authorities, the financial community, regulators, consumers and civil society around a specific technological challenge. The platforms represent a powerful mobilising force.

Investments in emerging technologies - nanotechnology, biotechnology, information technology and Space - should not focus solely on applied research. The research strategies must not be narrow and profit-orientated. Here we can learn from our competitors. There is major spin-off potential in the new technologies, but the development of new technologies needs openness and willingness to think on a grand scale. The Americans put the first man on the Moon because they thought on a grand scale. If Europe is to lead the way we must first and foremost create the framework for the people who we want to convert our visions to reality. If the first woman on Mars is to be a European, Europe must act now.

It is obvious that front-end research relies on excellent researchers. Establishing the right environment for researchers in Europe is of utmost importance.

In Europe we have to become far better at utilising our strengths: cultural diversity, our high level of education and the social dialogue. We must create networks that transcend culture and, instead of making Europe uniform, we must utilise our diversity as a dynamic force.

Europe is failing to capitalising on the knowledge that research produces. This is possibly the most critical issue when we compare ourselves to our rivals. The take-up and marketing of new technologies is simply too slow in Europe.

The Multi-Annual Programme for Enterprise and Entrepreneurship, which has been prolonged recently, for a year, and the proposed Competitiveness and Innovation Programme both aim at supporting innovative SMEs and entrepreneurs by easing access to capital. But these measures are insufficient.

There is a clear market failure in the area of technology transfer. The reason for this is the weakness of early stage venture investing in Europe. This financing gap between research and early stage investment has to be bridged in Europe, if we are to gain a technological edge.

To achieve the aims of the Lisbon Strategy, that Europe by 2010 should become the most dynamic and competitive knowledge-driven economy in the world and create not only more jobs, but also better jobs, we need to reconsider how we spend community resources. We have to ask ourselves one important question. Should the EU primarily invest in carrots and olive oil or in emerging technologies?

• Danish socialist MEP Britta Thomsen is vice-chairwoman of the Parliament's industry, research and energy committee.

Two MEPs give their views on the what the European Union should do to entice investment in European research.