Report calls for radical shake-up of EU research

03 Jul 2017 | News

Former WTO chief Pascal Lamy sets out a wide range of ideas to reform EU research and innovation programmes, starting a yearlong campaign to secure the future research budget

Ideas for a radical overhaul of the next EU research programme, including the binning of one third of all funding schemes and an end to routine audits on researchers, were part of a significant report presented in Brussels on Monday.

The study, with the bewildering title – “Lab-Fab-App”, a portmanteau of laboratories, innovation fabrication and applications – proposes several politically sensitive ideas, such as moving more responsibility for EU regional funding into the research programme, devoting more agricultural and regional funding to innovation-related work, and revamping EU state aid rules. 

The sweeping set of ideas are presented by 12 figures drawn across research, industry and finance fields, including Martin Brudermüller, chief technology officer with German chemical company BASF; Mark Ferguson, chief science adviser to the Irish government; and Lykke Friis, prorector for education at the University of Copenhagen. The chair of the report, Pascal Lamy, is a former EU trade Commissioner and head of the World Trade Organization.

Reading ‘the small print’

His reputation gives heft to the Commission’s task of protecting – and ideally boosting – its research budget, ahead of a crunch year for shaping EU spending priorities after 2020. “Lamy is known at the highest levels everywhere so he is a perfect ambassador for us,” said EU Research Commissioner Carlos Moedas in an interview with Science|Business. Moedas added that while he likes “the big lines” of the report, the “small print” of specific suggestions will need further study.

Moedas is expected to use the report as a lever in negotiations inside and outside the Commission on the next multiannual financial framework, the EU’s overall, long-term budget plan to be negotiated over the next year or two. His research and innovation programme – for which the Lamy report urges a doubling in funds – faces stiff competition from other parts of the EU budget, such agriculture and regional development. 

The authors do not say how much money should go to areas like health, energy, security, space or oceans – but instead outline both straightforward and radical ways Brussels should change its approach to research and innovation funding.

Under their vision, the EU’s next big Framework Programme, to start in 2021, would become simpler, more flexible, better coordinated with member-states and broader EU policies, and more focused on results and goals rather than process and administration.

To simplify the programmes, a “minimum objective” should be to eliminate one third of funding “schemes, instruments and acronyms”, the report says. “The range of schemes in Brussels is too complex; we need a serious de-cluttering,” added Lamy, speaking at the report launch on Monday. 

The life of the applicant should be made simpler. For example, “audits should only be carried out when there is a suspicion of fraud or serious financial wrongdoing.” Applicants should also have a choice between cost-based or lump sum funding for their project. The latter will eliminate the need for cost reporting, timesheets and routine financial audits. 

Taking a gamble

Researchers will likely cheer these ideas, but changing the programme this radically would be viewed as a major gamble by the Commission’s conservative civil servants, tasked with accounting for the way the executive spends taxpayer money. Many of the accounting systems in place today arose after a scandal in research funding forced the resignation in 1999 of an entire Commission. 

Another prescription is to fine-tune evaluations. Larger projects should be reviewed halfway through, possibly leading to adjustments or even discontinuation. 

Several existing schemes are championed: the report says the European Research Council and Marie Skłodowska-Curie Actions should get more money. 

The group also suggest several long-shot research goals, or “missions”, that the next research programme, starting in 2021, should aim for: achieving a plastic litter-free Europe by 2030, understanding the brain by 2030, and producing steel with zero carbon in Europe by 2030; making three out of four patients survive cancer by 2034. One benefit of these missions, according to the report, would be to better capture public imagination and involvement.

A boost for the EIC

The report also adds to arguments made by Moedas that the EU needs to move faster to support upstart companies pursuing high-risk areas of research. It gives an unqualified thumbs-up to the Commissioner’s pet project: the creation of a new agency, the European Innovation Council, to coordinate most innovation-related programmes. 

It says the EIC should be “a permanent, high-level strategic body empower to invest in entrepreneurs and businesses…with risky innovations that have rapid scale-up potential.”

It is withering in its account of the many areas where Europe falls down on innovation. The continent spends less than half as much on business R&D compared to South Korea; it produces three times fewer high-quality patent applications than Japan; the amount of venture capital available in the EU is at least five times lower than in the US; the number of billion-dollar companies, so-called unicorns, is also five times lower.

“Lagging behind on innovation is a more serious problem than it was in the past,” Lamy said.

A step towards more innovation is reform of EU state aid rules. “The current rules are perceived as insufficiently innovation-friendly,” the report says. Lamy elaborated on this point with reporters. “Korea, Japan and China are more relaxed than us on spending public money on research,” he said. 

In preparing their report, the authors met with the EU’s antitrust chief, Competition Commissioner Margarethe Vestager, to press their argument. The Danish Commissioner was a notable attendee at the report launch. “I take it as a signal that she is not unhappy with what we wrote,” Lamy said. 

Going after regional and agricultural funding 

Likely the most controversial suggestion in the report, at least in Brussels, is that more responsibility for a large portion of structural funding, the multi-billion euro EU pot of money intended to lift Europe's poorest regions into modernity, should move into the research programme. 

The report says: “The EU R&I programme should set the agenda for R&I investments within the structural funds. The budget for such investment could flow from the future structural funds to the post-2020 EU R&I programme, to be implemented according to the latter’s main principles but with a geographical rationale.” 

The Commission has a pot of about €100 billion over seven years to invest in regions to improve their competitiveness and stimulate industrial innovation.

Lamy told reporters that these investments “should work in theory, but in fact do not work well.” 

Facing the farmers

A related idea in the paper is that the EU’s agriculture fund should “substantially increase” its investment into innovation. But, perhaps fearing a confrontation with powerful farming lobby groups, the report does not advocate moving this budget responsibility to the research programme. 

They authors say research money should be ring-fenced for poorer regions in the future – this is the ‘widening participation and spreading excellence’ budget line – while also calling for a relaxing of the rules governing international participation, so rich, foreign countries can join the programme more easily. 

“Trading partners of a similar level of excellence” – such as Canada and Australia – should be able to join the programme as associate members. Currently, this type of membership is limited to countries geographically close to the bloc, such as Israel and Turkey.

Britain, now in the process of leaving the bloc, should be allowed access to any future EU research programme.

“[The] full and continued engagement with the UK within the post-2020 EU R&I programme remains an obvious win-win for the UK and the EU. A positive cooperation model should be established,” it reads. 

Big budget boost 

Alongside the concrete ideas in the report sits one big aspirational one: doubling the EU research budget in 2021. 

“Doubling the overall budget of the post-2020 EU research and innovation programme is the best investment the EU can make,” the report says. The seven-year spend on research by Brussels is €77-odd billion by 2020. 

The authors set their sights high, adding that anything below €120 billion after 2021 “would break momentum and call into question the EU’s commitment to deliver on its political priorities,” the report adds. 

Increasing the budget will help address the growing failure rate problem. Horizon 2020 has only enough budget to fund one in four proposals evaluated as high-quality. “The post-2020 programme must ensure a success rate in the range of 15 to 20 per cent, as was the case for Horizon 2020’s predecessor. Funding should be secured for at least 30 per cent of high quality proposals,” according to the report.

The authors say they back the recent decision to finance defence research at EU level, as long as its budget is additional to the civil programme – and kept separate from civilian research.

Never miss an update from Science|Business:   Newsletter sign-up