The party chatter: A long, cold year ahead for EU R&D funding

Brussels – One of the quaint rituals of this company town – where the ‘company’ is the European Commission – is making your way around the holiday party circuit. It is at these parties, most hosted by companies and trade associations, that the real business of government happens: Exchanging gossip about who’s in, who’s out, and what the year ahead promises.

Alas, the gossip isn’t cheery for a major issue we have been following, the Commission’s €80 billion, Horizon 2020 proposal to expand its R&D budget for the rest of the decade. For the past year, the Commission, Council and Parliament have been tied together in a slow-motion, three-legged dance to decide the fate of this plan. If the party gossip is right, the dance is a long way from over – and that’s bad news for anyone counting on some EU money to keep their labs running from 2014.

To put it in perspective: EU funding in research and innovation comprises 5 to 7 per cent (depending on who’s counting) of total European government support for this activity. It will amount to roughly 8 per cent of the total EU budget through the rest of this decade – a distant third in programmatic spending, after the rich pork-barrel budgets of agriculture and regional development. This is, in short, a relatively modest line item. Yet you’d never guess that from all the noise here.

The biggest noise at present is over the total EU budget, with budget hawks in Britain, Germany, the Netherlands and a few other countries demanding an austerity-era cut. But there’s more than a little hypocrisy involved. The UK, for instance, is one of the three biggest recipients of EU R&D funding (with Germany and France.) So – surprise – it wants the EU cuts to come in farm, regional and administrative spending, not in R&D. Equally no surprise: Those countries in eastern and southern Europe that get relatively little R&D money put it lower down on their budget priorities, and dig in for support of regional development funds. This top-line budget fight is, according to the party chatter, going to take until at least February – and more likely May – to be settled.

Dividing the pie

But no sooner will that dispute be settled, than the fight will intensify over how to divide the resulting R&D pie. Already, in the party circuit, you could hear it starting. One group, EARTO representing technology developers like Germany’s Fraunhofer and Dutch TNO, released a study suggesting the Horizon 2020 plan was allocating too much to basic research, and not enough to development. Other groups, such as LERU representing the top research universities, are taking an opposite tack – along with 54 Nobel Prize winners who signed an open letter that appeared in some of Europe’s leading national newspapers, pleading in support of the basic research funded by the European Research Council.

Our think tank, the Science|Business Innovation Board, is taking a broader approach – with its industry and university members advocating support for the overall Horizon 2020 plan.

The betting here is that shape of Horizon 2020 won’t be settled until Autumn 2013, at the earliest. At that rate, the research organisations that depend on EU funding will have a very cold winter, as the Commission rushes to overcome the legislative delay and get the Horizon 2020 cash flowing as early as possible in 2014. This could be the Brussels equivalent of a fiscal cliff.

Sense the reality

Lost in all this gossip is any sense of reality: However much is approved, for whatever programme, will it actually be spent well? Will it make European science and technology more competitive? Will the new ideas in Horizon 2020 actually work: regional academic ‘chairs’ to increase north-south research collaboration, an SME ‘window’ at the European Investment Bank, new innovation consortia in food science, security technology and other sectors largely ignored by the EU in the past. And will Commission promises of less paperwork and simpler accounting make projects more attractive to industry, large and small?

These are all issues that we, at Science|Business, will be following closely through 2013. We will be reporting on it regularly, studying the policy implications for our members and clients, organising Webcasts and conferences to share views on it – and, throughout, doing our best to draw attention to the importance of these questions for Europe’s future. In the bright light of public scrutiny, we think, the pressure will rise on the politicians to reach a decision more quickly, and hopefully more wisely. And that would prove this season’s party gossip all wrong.