17 Apr 2012   |   News

Horizon 2020: Different. But different enough?

Bigger, and simpler – those are among the promised virtues of the proposed Horizon 2020 programme. But are the changes sufficient to tempt industry back into the fold? And will universities like what they get? A Science|Business meeting in Brussels heard from some of the key architects of the plan

Never mind the euro, the big game in Brussels these days is the €80 billion (or so) set to be tied up in the European Union’s next research and innovation programme, Horizon 2020. Proposed by the Commission in November, it still has to win acceptance from the European Council and Parliament. But when the deals are done, how different will it be from the seven Framework programmes that preceded it? And will it be better, both for companies and for researchers?

These were the questions that drew representatives from industry and academia to a Science|Business Policy Bridge meeting at Scotland House, Brussels, on 27 March to hear from three people who should know: John Bell, Chef de Cabinet for research commissioner Máire Geoghegan-Quinn; his deputy in the Cabinet, Waldemar Kütt; and Jack Metthey, Director, Framework Programme and Inter-institutional Relations at DG Research and Innovation.

Excellence – in the eye of the beholder

Both John Bell and Jack Metthey put great emphasis on the idea that Horizon 2020 will be driven by excellence. But who decides what is excellent? It’s up to the evaluators to decide, said Metthey. But it is clear that the definition might vary between research projects and innovation, where factors such as impact need to be taken into account.

If everything comes down to the evaluators, who chooses them? How do you incorporate excellence into the process? The answer was both clear and awaiting clarification. Fundamental research coming up before the European Research Council will be evaluated by assessors chosen by the ERC’s Scientific Council.

For the rest, said Metthey, there has been “huge debate”. Traditionally the Commission has done the choosing. But he hinted at the possibility of change, “the key points [are] the quality of evaluators, and to avoid any conflict of interest”.

Research innovation that is mediocre is “a waste of time and resources”, said Jack Metthey. He stressed the need to encourage risk-taking. “We need to promote disruptive, breakthrough processes,” he said.

How does this fit with peer review, asked Fabien Petitcolas from Microsoft? Noting that programmes such as Framework tend to have more demand than they can supply, he said that peer review tends to fail in such a system: the harder it is to get a grant, the less risky proposals tend to be.

The background, as ever these days, is the economic crisis that has engulfed – and at times threatened to submerge – the European Union. For John Bell, the lesson is clear: "Countries that have systematically invested in R&D have been more robust." The stark choice for Europe now is whether to continue to see research and knowledge as a "gentleman’s pursuit" or as a way of putting the economy on a new footing. Do that, he said, and we could recapture much of what has been lost during the crisis.

The political will seems to be there. There are even some in the European Parliament who think that the proposal to allocate 7 to 8 per cent of the Union’s budget to Horizon 2020 is too modest. And, said Bell, "The net contributors to R&D are researching in innovation themselves and are very supportive."

Not cosmetic

For Jack Metthey, Horizon 2020 is not merely a Framework Programme 8. "The Commission wanted something different," he said, describing the changes as "not cosmetic – it’s a real change in approach". The two key changes Metthey sees are that the new programme is "participant-centric", and founded solely on "excellence" – unlike the Union’s cohesion policy, which has different objectives. That’s a break from the past, he said, though adding that it also offered continuity.

What’s new? First, said Metthey, there is a single programme, designed and simplified to facilitate "seamlessness" between the various activities. "We tend to work in silos," said Metthey. "Horizon 2020’s simplified architecture makes it much more fluid." Above all, research and innovation are to be integrated. "This is a novelty, a very valuable one."

One key aim is to get industry back on board. Participation from industrial companies declined as the Framework Programmes came and went – dropping in 2009 to 26 per cent, down from 34 per cent in the previous programme. "With Horizon 2020 we really want to get them back, and also the SMEs," said Metthey.

Another change will be the end of the traditional technology-based approach. From now on, everything is related to the key challenges Europe faces, such as climate change, the environment and demographic change. There’s a recognition, too, that innovation is a social process – hence the inclusion in Horizon 2020 of the social sciences and humanities – they should have an impact on everything, said Bell. That includes helping to define the nature of the problems and helping with the rejection or acceptance of solutions.

Metthey acknowledged that in many cases it always seemed to be the same companies taking part in Framework programmes. He wants that to change for Horizon 2020. "We want to lower the barriers to entry to get new entrants," he said. "We want new blood. We don’t want a closed club – it’s not healthy and it’s not necessarily the most productive."

Simply does it

The Commission is pinning a lot of its hopes on simplification: for example, in all projects that are fundamentally research-based, all participants will be reimbursed for up to 100 per cent of all direct costs and receive a flat rate for all overheads/indirect costs, such as electricity (20 per cent of indirect costs), the so-called 100/20 formula. Demonstration projects, close to market, will receive up to 70 per cent of direct costs plus the flat rate for indirect costs (70/20). "These are the two models," said Metthey. "There are no others."

As Waldemar Kütt from the Cabinet noted, the 100/20 formula amounts, on average, to around 75 per cent reimbursement of total costs – in line with the general principles of state support. But as he also pointed out, the new formula favours reimbursement of direct costs, and is less favourable for those with high overheads.

No decision has been taken about the balance between research and near-commercial funding. Indeed, said Bell, the idea is to have flexibility "year on year, programme by programme". The programme calls will specify whether research or demonstration submissions are expected, he said.

Simplification will extend to the cost of accessing the programmes. Metthey said that the Commission had done studies on the cost of the application process, and learnt that the costs are "far too much". That may not put off large companies, he said, but for SMEs the costs can be "lethal". One hopeful prospect: the new financial regulations will not only apply across the board, but VAT will be eligible – a big bone of contention for hard-pressed universities which have to pay VAT but have so far been unable to reclaim the cost.

An end to special pleading?

“You want the best,” said Eric Merkel-Sobotta from Springer Science+Business Media. “Does that include those industries where Europe is already number one, or are you looking to include those that are not there?”

John Bell from the Commission rejected what he called “special pleading” to use the concept of excellence to pursue old-fashioned industrial policies. “You cannot regulate for competitivity.” But, he said, there are a number of areas where “the proper investment” will create an environment where “those who are capable of competing can move forward”.

No one will get money simply because an industry is worried it can’t compete. On the other hand, he hinted at support for interrelations between technological sectors. “We won’t stand back and let the free global market let our leadership fall down because we haven’t supported interdisciplinarity,” he said.

Sinan Tumer from SAP called for the introduction of flexibility and adaptability into the simplification process. That means fewer rules and regulations, he said, and where there are fewer rules there is more risk. "How much risk would the Commission like to take?" he asked. As far as possible, said Metthey, we want fewer rules, "but clearer rules so that there is no ambiguity". As a concrete example of simplification Horizon 2020 will be using participants’ "normal accounting practices", he said.

Tumer also thought that simplification would encourage companies to take part, especially SMEs. But, he added, even more important than simplification is the emphasis on go-to-market strategies, "because companies want to commercialise results".

Vincent Clay from Pfizer thought it was "very hard to say" whether Horizon 2020 would see significantly increased industry involvement, particularly in "a turbulent time in pharma". While the current economic environment is hastening the search for new opportunities, companies are also having to concentrate on optimising the core aspects of their business, "so industrial participation will be a challenge over the next few years," he said.

Another watchword is "faster". The current average time between applying for Framework grant and receiving a decision is 350 days. "Our goal is to reduce the time to grant by 100 days," said Metthey.

Rumblings over rights

One thing that came over clearly at the meeting was that both industry and academia are concerned about Horizon 2020’s implications for intellectual property (IP) rights. "We are more or less carrying on where we are now," said Metthey, adding that the "fine grain" would be for the participants to agree. "We will be proposing some models of contractual agreement, but at the end of the day it is for the participants."

But Kurt Dekeletaere from the League of European Research Universities was worried. "We have the impression that [Horizon 2020] is going much more in the direction of the Innovative Medicines Initiative, where universities have to give up a lot of background knowledge to companies," he said. Universities have some concerns, too, that there might be pressure to commercialise too early.

Science|Business photostream for the Horizon 2020 Policy Bridge:

From industry, Marianne da Silva  of SAP, noted provisions in the Horizon 2020 proposal that companies that fail to commercialise a product within the EU might lose their IP rights. That, she said, would affect industry. Contractors should not lose their ownership rights because of lack of commercialisation, which can be due to specific market circumstances or other legitimate decisions. Fabien Petitcolas from Microsoft agreed that companies were worried by a "Europe First"-type policy for IP.

And also on IP, Verdiana Bandini from the University of Bologna saw a conflict between reducing times to grant and the regulation of IP rights. IP issues are normally dealt with in the negotiation phase of the consortium agreement, she said, but the closer you get to market, the more complex the IP discussions. It might take longer than hoped to conclude agreement negotiations, she warned.

From the Commission side, Kütt said that no one had the Innovative Medicines Initiative in mind when drafting Horizon 2020, and that Horizon 2020’s IP rules largely follow current practice in FP7. He noted that there are clauses – in FP7 and Horizon 2020 – that protect European economic interests, and avoid a situation where exclusive rights are transferred outside of Europe. "This is, if you like, our ‘Europe First’ principle," he said. But Kütt agreed it was right to take a "closer look" at the provisions in Horizon 2020 for IP rights.

There is also concern about publishing research results. "In terms of publication, has the Commission given clear thought to how the volumes of research coming out of this project should be published?" asked Eric Merkel-Sobotta of Springer Science + Business Media. "Are you going to make a clear statement that funding will require or encourage a certain publishing model?"

Kütt responded that the Communication, or formal Commission policy statement, on the European Research Area, set to appear in June, will also deal with open access. "It is clear that we have a policy of open access for FP7 and will continue this in Horizon 2020," he told the meeting. However he added, "We cannot set this for any other organisation."


What happens next? First, said Metthey, Parliament and Council need to agree the overall financial framework for Horizon 2020: "By the end of the year, we should know whether we are getting the €80 billion." Provided that process goes well, he is confident the whole programme will be "wrapped up" during the Irish presidency in the first half of 2013. Metthey expects the first calls to be launched in the last quarter of 2013, so that once all the legal niceties are completed and the programme opens in 2014, there will be projects ready to be evaluated. 

Whatever the final budget for Horizon 2020, there will still be winners and losers. One of the (relative) losers looks likely to be the Marie Curie programme, which helps students and postdocs to move around Europe. Under FP7 it accounted for €5.75 billion euros, but with no increase planned, its value will slip back. That worried Michael Browne from University College London, who saw a reduction in real terms. Metthey acknowledged the concern around this, but pointed out, "The programme has reached maturity. If one gives more to Marie Curie, one has to give less to someone else."

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