Simpler, broader, bigger: EU unveils €80 billion research plan

BRUSSELS – The European Commission proposed a simpler, more economically productive system for funding research and innovation over the coming decade, as it formally launched what promises to be an 18- to 24-month political battle to raise its budget to €80 billion.

“A break from the past and an investment in our future” is what Máire Geoghegan-Quinn, Commissioner for Research, Innovation and Science, called Horizon2020, the European Union’s next seven-year plan, for 2014 to 2020, for research and innovation funding. The Commission’s intention, she said, is to “support the best research ideas and provide major business opportunities that improve people’s lives.” And in case that isn’t enough, “we’re slashing red tape,” she said.

The proposed €80 billion budget, if approved in 2012 or 2013 by the European Council and Parliament, would represent a major rise from the current €55 billion programme – and has already hit static from Britain, Germany, France, the Netherlands and other budget-conscious states. But the Commission is betting that its emphasis on simplifying the system, broadening the benefits and focusing more on economic return will by the end of the tortuous EU legislative process win support from all the member-states. The proposal is “part of an exit strategy from the (economic) crisis,” said Androulla Vassiliou, Commissioner for Education, Culture, Multilingualism, Sport, Media and Youth.

The series of EU announcements of 30 November filled in many – but not all – of the details expected since the Commission first announced its broad, economy-driven ‘Innovation Union’ strategy in October last year. The new plan includes big sums for the most politically appealing programmes:

• A 77 per cent jump to €13.2 billion for the basic-science European Research Council. The agency, modelled on the US National Science Foundation’s no-politics method of awarding research grants based on scientific peer-review panels, has won wide praise for funding ‘excellence’ in science since it began in 2007. But even with the increase, annual grants by the ERC would be only about a third as much as at the NSF. And there has been some political backlash in eastern and southern Europe because most of the ERC grants to date have gone to science-rich northwestern Europe. The Commission’s responses include several measures to reverse the brain drain from the poorer countries, including creation of ‘ERA Chairs’, funding special professorships to recruit “outstanding academics to institutions with a clear potential for research excellence.”

• €5.75 billion for the Marie Curie Actions that provide opportunities to excellent researchers, such as fellowships and the possibility to gain experience abroad and in the private sector. In a further, typical Brussels act of political outreach, the Commission added the great scientist’s Polish maiden name to the programme’s title, rather than her French surname alone: Marie Sklowdoska Curie. (Similarly, in a nod to Italy, EU Vice President Antonio Tajani said a set of small-company support programmes is to be named COSME, after the Renaissance merchant-prince, Cosimo de Medici, whom he somewhat anachronistically called an “entrepreneur.”)

• A Small Business Innovation Research programme – modelled partly on established UK and US initiatives – becomes part of a drive to mobilize more small and medium-sized companies to participate in the EU programmes. In all, Tajani said, 15 per cent of the €80 billion Horizon2020 budget is earmarked for SMEs. The plan includes providing SBIR seed funding, which SMEs can apply for singly rather than in the usual EU coalitions, and then helping connect them to the European Investment Bank and other public and private funders for expansion capital. A set of company-support efforts presently in the Competitiveness and Innovation Programme gets a new name (COSME) and a bigger budget (€2.5 billion). The expected impact:  39,000 firms a year assisted, creating 29,500 jobs and 900 new business products or services.

• An eye-popping rise, from €308 million to €2.8 billion, for the European Institute of Innovation and Technology. This Budapest-based organisation is a new EU model for getting industrialists, researchers and educators working together in specific sectors – so far, energy, climate change and ICT. The plan, though less than the €4 billion originally sought by the agency, would permit it to add six more sectoral groups by 2020, in healthcare, food, raw materials, advanced manufacturing, security and urban mobility. The full expansion would be contingent on a mid-term review confirming the EIT is working properly. The objectives include 600 new companies started, and 25,000 masters and 10,000 PhD students trained by 2020.

• The biggest chunk of the budget, or €31.7 billion, will go to ‘Societal Challenges’ – a set of hot-button social and environmental issues that have risen high on the political agenda across Europe over the past five years. These are healthcare for an ageing population, food security, clean and secure energy, smart and green transport, climate action and resource efficiency, and inclusive and secure societies. The Commission left some details of these efforts to be filled in by the member-states and groups that want to propose solutions. Indeed, the Commission claims that the whole Horizon2020 programme will be more flexible than its past research plans – which could not adapt quickly to changing political priorities.

The Horizon2020 announcements were Brussels political theatre at its best, and worst. Not one, but three commissioners (Geoghegan-Quinn, Tajani and Vassilliou) vied to claim credit with the press – reflecting the months of internal argument among their respective directorates over who does what in the new plan. A barrage of interest groups, from university to corporate lobbyists, fired off pre-written press statements based on leaked versions of the plan that had been circulating, in numerous drafts, around Brussels for many months. A set of 11th-hour changes, ordered by the Commission, delayed the release of all the documentation – and included a requirement that the Commission staff hastily fill in some of the micro-level details that had been deliberately left vague in prior drafts so as to avoid making itself too easy a political target for interest groups.

But now that the plan is published, the real political tussles begin. Already, some lobby groups have been sounding an alarm over some ambiguous, proposed language that could be interpreted as protectionist – specifically, to require in some cases that ‘first exploitation’ of research results be inside the EU. In response, Geoghegan-Quinn said “we are not proposing a rule that they have to patent in Europe first” but that, for some “special” cases where the Commission has “a very high investment or a strategic interest, we could set additional exploitation conditions in the grant.” As a practical matter, Commission officials said, this issue might arise in big-ticket ‘demonstrator’ projects but not in routine Horizon2020 funding.

But there’s more. A further political issue appears likely to involve human embryonic stem-cell research, which heavily Catholic Poland in particular has opposed; on that point, Geoghegan-Quinn said the Commission won’t fund any research in a country if the project’s subject or ethics are contrary to the laws in that country. Also, the future of ITER, a major international fusion-energy plant in Cadarache, France, will be in play; ITER, which long ago sailed past its original budget estimates, may end up competing with the separate Horizon2020 budget.

And the plan – as it works its way through the legislative process into 2013 - may also prompt a collision among many of the EU’s major constituencies. In the same time-frame, the EU will be arguing over reform of its most expensive programme, the Common Agricultural Policy: the Commission included in Horizon2020 a big rise in food and soil research to buy support from France, Hungary and other CAP supporters – but a budget clash appears likely, anyway. Likewise, the Commission is proposing more-active channelling towards innovation of Structural Funds – a type of regional-development funding that most member-states jealously guard as their own prerogative to control, not the Commission’s.

The final word on Horizon2020 will probably be given by bond investors around the world.  The Horizon2020 plan is big and bold, and has many backers in the European Parliament. But the Eurozone crisis is setting the political tone in Brussels – and if the crisis worsens next year, the more-conservative Council of member-state ministers is unlikely to allow much of any increase in overall research and innovation spending.

Click here for the European Commission's official Horizon2020 Documents.