How to balance clout with precision in EU research partnerships

Europe needs to strike a balance between size and coherence if it wants new research partnerships proposed for Horizon Europe to have an impact, said participants at a Science|Business event on 9 July.

Big industrial research partnerships have clout because they provide “synergies and cross-fertilization,” but making them too big and too broad could dilute their focus, drive, and impact, said Jaap Lombaers, Innovation Director at TNO, the Netherlands’ applied research organisation and board member of Photonics21 public-private partnership. “What is the balance between size and coherence?” asked Lombaers.

The European Commission is seeking input on its plan for implementing Horizon Europe, the next research programme, which includes 44 suggestions for research partnerships with industry and member states.

Peter Dröll, Director for ‘Prosperity’ ­(covering industrial technologies) at the Commission’s research policy department, DG Research and Innovation, said the Commission wants to “to rationalise the landscape of partnerships,” whittling down the current 120-or-so partnerships to less than 50.

Horizon Europe’s seven-year budget is still not agreed, and in the partially-agreed legislation the proportion to be spent on partnerships is in any case variable. But both the Commission and the Parliament want an increase on current research spending, so there is a good chance the reduced number of partnerships will have more money to play with overall.

“We need to work for impact through our investments,” said Dröll. “That means we have reduced the number of challenges and put it into broader clusters,” he said.

However, that raises the question of how broad is too broad. Lombaers argued that while Photonics21 has a diverse variety of companies among its members – representing multiple application areas – the connecting thread is the field of photonics. “The thing that unites this partnership is the technology,” he said.

Last month Photonics21 published a position paper in which it said the industry is committed to investing up to €100 billion in research throughout Horizon Europe. It is asking the European Commission to support the partnership with €1.4 billion across the programme. “Every €1 invested by the European Commission is leveraged by €5 from photonics SMEs,” according to Photonics21.

Photonics21 has a clear focus in terms of the underlying science, but the same cannot be said for many of the other research partnerships proposed by the Commission, in water security, rescuing biodiversity, sustainable agriculture and clean energy, for example. Each could involve a huge range of companies in diverse areas of science and technology.

One of the largest partnerships, Electronic Components and Systems for European Leadership (ECSEL), covering both the production and application of electronic components and embedded software, is funded both by the EU and 30 national governments, as well as industry.

“Though positive in terms of leveraging investment and aligning strategies, it can be complicated to implement,” said Colette Maloney, head competitive electronics industry at DG Connect, the Commission’s technology department. “Participants report to their national authorities and to the Commission, and the requirements are different,” she said. “Ideally we would have a single reporting scheme.” The same applies to funding. “The member states have their funding mechanisms, we [the Commission] have ours. Some few authorities have aligned with the Commission. So we are aiming for harmonisation under Horizon Europe – in particular to reduce the burden on beneficiaries.”

If the Commission’s intent is consolidation – creating fewer, larger partnerships – it must ensure it maintains their coherence. Moderating the discussion, Carlos Härtel, former Chief Technology and Innovation Officer of GE Europe and a special adviser to Science|Business, said there is a risk partnerships could end up like hunting parties for European research funds. “They hunt for the beast, they take it home, and then they eat it separately,” he said.

Dröll argued the way to address that danger is to assess what partners have to offer in the first place. “It will only work if you start with your assets: what is really the thing you can bring to the table and to the partnership?” he said. “If you’re only in for getting easy access to some EU research money, it’s not the right motivation.”

Other means to support R&D partnerships

A new strategic platform for industrial R&D partnerships, Important Projects of Common European Interest (IPCEI), has recently been put into place. This enables EU member states and industries to make huge joint investments in strategic value chains, without risk of being blocked by the Commission’s directorate-general for competition.  

Demos Spatharis, head of R&D state aid policy and control at the Commission’s competition department, noted that the Airbus project of the 1970s was an IPCEI.

EU law has included provisions for IPCEIs since the 1957 Treaty of Rome, but the Commission did not begin serious consideration of state aid exemptions for IPCEIs until it came up with a new set of rules 2014.

The first IPCEI approval for R&D following the 2014 rules was granted by the Commission in late 2018. The project is an €8 billion microelectronics partnership supported by €1.7 billion of state aid from France, Germany, the UK, and Italy. Another IPCEI on batteries is in the works.

Härtel asked whether companies might run a risk by being seen as “propped up by their governments.”

Spatharis agreed, “This is why proper state aid control is necessary to minimise any distortions of competition,” he said. “We also have to bear in mind the WTO [World Trade Organisation] rules.” It is important to be clear about what kind of public funding is allowed, and what is not. “Normal commercial activities and mass production activities are definitely not – and I repeat – not covered,” by Commission rules for IPCEIs, which are also forbidden under WTO rules, said Spatharis.

Rather, IPCEIs cover “first industrial deployment”, the R&D-intensive stage between pilots and scaling-up to the point where mass production becomes a viable option, he said.

Protecting intellectual property

The issue of how Europe and its industrial partnerships can be open to the world and support international collaboration and trade, without putting at risk the intellectual property research partnerships can create, rumbles on. Dröll said it is necessary to strike a balance between “openness and commitment to a hyperconnected global system” and how to deal with partners in China and elsewhere, “who might have a different approach to this.”

Bernd Stowasser, head of European public-private partnerships at the French pharmaceutical company Sanofi, said Europe has to collaborate with the rest of the world in order to bring in companies like Samsung, that have expertise in fields like artificial intelligence. He is in favour of pre-competitive collaboration with foreign partners, but said, “We have to be really sure that we don’t delude [ourselves] and lose IP, that we don’t make mistakes.”