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Ppt presentation emilie_tack

  1. 1. Hungary-EU-Israel Workshop Start-Ups and Innovation Tel Aviv, 30th May 2011 The Innovation Union flagship initiative and framework conditions  :  How to provide incentives for start-ups early-stage innovation?  Emilie Tack, Innovation Policy Unit DG Research and Innovation
  2. 2. <ul><li>Globalization of knowledge and innovation capacities </li></ul><ul><li>Impact of the crisis on public finances and business (especially innovative SMEs) </li></ul><ul><li> The EU has lost six million jobs, € 1,000 billion of annual GDP during the crisis; </li></ul><ul><li>Major challenges </li></ul><ul><li>Maximize available resources by leverage, integration and cooperation </li></ul><ul><li> The EU target of 3% of GDP for R&D in 2020 could create 3.7 million net new jobs and nearly € 800 billion of annual GDP by 2025 </li></ul>Urgent need to fill the GAP at any level! Europe is facing a major innovation emergency
  3. 3. Evolution of World R&D expenditure in real terms PPS in millions € at 2000 prices <ul><li>Ever stronger global competition for investments & markets </li></ul><ul><li>US and Japan lead on innovation whilst emerging economies are quickly catching up </li></ul><ul><li>On current trends, China is set to overtake the EU by 2014 </li></ul>China excluding Hong-Kong Source: European Commission The EU must close the innovation gap now
  4. 4. Research and innovation performance: EU Member States Source: Innovation Union Scoreboard 2010 Note: the index used for comparison in the this chart is based on a set of 24 indicators Strong variations across Member States ES EU
  5. 5. <ul><li>Competitors’ success: no accident nor luck </li></ul><ul><li>Our key partners and emerging economies (eg. China, India, Brazil) follow a strategic approach to innovation and implement it! </li></ul><ul><li>A strategic approach to innovation = </li></ul><ul><ul><li>Innovation is the overarching policy objective driving all other policies ( education , skills, regional development, standards, tax policy …) </li></ul></ul><ul><ul><li>Innovation policy is steered & monitored at the highest level (Prime Ministers are in charge) </li></ul></ul>What can we learn from our competitors?
  6. 6. Our partners invest more in higher education Expenditure on tertiary education (% GDP)
  7. 7. US leads top universities ranking % in the top university institutions of the 2010 Shanghai list Source: European Commission
  8. 8. Students enrolment Number of undergraduate students 0 1 2 3 4 5 6 7 02 03 04 05 06 07 08 09 Millions China Source: DB Research, Eurostat, Figures for 2008-2009 for EU+US+JP are estimates National Statistics of China, 2010 Japan United States EU
  9. 9. <ul><li>A flagship initiative of the Europe 2020 strategy </li></ul><ul><li>Radically improving the framework conditions and reducing time-to-market </li></ul><ul><li>Tackling underinvestment, fragmentation and duplication (“critical mass”) </li></ul><ul><li>Using public funding to leverage private R&D (e.g. the EU Risk Sharing Finance Facility - RSFF) </li></ul><ul><li>Promoting massive investment in skills, education, research and innovation especially through « recovery » packages ( “Smart” fiscal consolidation ) </li></ul><ul><li>See: http://ec.europa.eu/research/innovation-union/index_en.cfm </li></ul>EU’s strategic approach: Innovation Union
  10. 10. <ul><li>A “standardisation package” – comprising a Communication and a legislative proposal, to be adopted in May. </li></ul><ul><li>2 implementing legislative proposals to create a unitary patent protection (under enhanced cooperation between 25 MS) presented on 13 April. </li></ul><ul><li>Proposals for putting in place an operational framework for the cross-border operation of venture capital funds by 2012. </li></ul><ul><li>A review of the State aid research and development and innovation framework in 2011 </li></ul><ul><li>Proposals to exploit public procurement budgets for innovative products and services by the end of 2011 </li></ul>Improving Framework conditions
  11. 11. Key Framework conditions Source: Eurostat R&D procurement expenditures ( excl. defence ) in the US and EU in Bn € - 2007 Source: European Commission Early-stage Venture Capital in Bn €, 2000 and 2009
  12. 12. IU Commitment 11 <ul><li>By 2012, the Commission will ensure that Venture Capital funds established in any Member State can function and invest freely in the EU </li></ul><ul><li>(If necessary by adopting a new legislative regime). </li></ul>
  13. 13. European Council conclusions follow-up <ul><li>Every effort should be pursued to lift remaining legal and administrative obstacles to the cross-border operation of venture capital. </li></ul><ul><li>The Commission is invited to present proposals by the end of 2011 for putting in place an EU-wide venture capital scheme </li></ul>
  14. 14. IU Commitment 10 <ul><li>By 2014: on the basis of Commission proposals, the EU should put in place financial instruments to attract a major increase in private finance and close the market gaps in investing in research and innovation. </li></ul>
  15. 15. European Council conclusions follow-up <ul><li>The Commission is invited to present proposals by the end of 2011 for scaling up the Risk Sharing Finance Facility </li></ul><ul><li>During 2011-2013, we will expand the scope and scale of RSFF implementing recommendations of the RSFF interim evaluation </li></ul>
  16. 16. Risk-Sharing Finance Facility (RSFF) Policy Support : current state of play <ul><li>Moving towards a Portfolio First-Loss Piece for the whole RSFF (by end-2011), enabling a potential higher leverage effect on the EU financial contribution (cf. facing the level of demand until end-2013) and more support for target groups such as SMEs and research infrastructures </li></ul><ul><li>Launch of a dedicated window to address research-intensive and innovative SMEs and mid-caps (early 2012) </li></ul>
  17. 17. After 2013? Greater investment in R&D Next MFF Debt and equity Financial instrument ? Europe 2020 Europe 2020
  18. 18. RSFF post 2013? Innovation Credit Facility Good practice from the Netherlands <ul><li>Most applicants for loans are young start-ups </li></ul><ul><li>Strong stress on the eligibility criteria on the developmental approach </li></ul><ul><li>Risk sharing </li></ul><ul><li>Cooperation-to-be with EIB </li></ul>
  19. 19. An integrated approach for the use of financial instruments to support R&D&I <ul><ul><li>Preparing the ground for the implementation of IUC 10 </li></ul></ul><ul><ul><li>e.g. debt financial instrument in future CSF </li></ul></ul><ul><li>Debt instrument will provide debt finance for risky investments in R&I activities and will cover loans, guarantees… </li></ul><ul><li>Equity instrument for early and growth stages investments : </li></ul><ul><ul><ul><li>Support to early stage and seed investment </li></ul></ul></ul><ul><ul><ul><li>Support to the development of EU venture capital </li></ul></ul></ul>
  20. 20. Current Programme s (2007/2013) R&D 7FP (DG RTD) Innovation (i) CIP (DG ENTR) Future Programme (2014/2020) R&D&I CSF EIPs Innovation Union Towards a Common Strategic Framework The European Institute for Innovation and Technology
  21. 21. Next steps towards a CSF <ul><li>Follow up: </li></ul><ul><ul><li>Analysis of contributions by Commission </li></ul></ul><ul><ul><li>Major event to conclude consultation (10 June 2011) </li></ul></ul><ul><ul><li>Inputs to preparation of Commission proposals </li></ul></ul><ul><li>Commission proposals: </li></ul><ul><ul><li>for post 2013 EU budget (June 2011) </li></ul></ul><ul><ul><li>for the Common Strategic Framework (by end of 2011) </li></ul></ul><ul><li>Legislative decisions on the Common Strategic Framework by the Council and European Parliament (2012-13) </li></ul><ul><li>=> Common Strategic Framework (from 2014) </li></ul>
  22. 22. Lessons learnt from current EU R&I funding <ul><li>Cross-border pooling of resources </li></ul><ul><li>More competition in research </li></ul><ul><li>Focus on Excellence </li></ul><ul><li>Wide range of training possibilities </li></ul><ul><li>Raise of the international attractiveness of EU R&I </li></ul><ul><li>Fragmentation </li></ul><ul><li>Need for further simplification </li></ul><ul><li>Better strategy for innovation </li></ul><ul><li>Need to focus resources to address grand challenges </li></ul><ul><li>Broaden participation </li></ul><ul><li>Clearer agendas </li></ul>
  23. 23. Thank you for your attention