Innovation forEurope’s futureBusiness is key for European innovation

The European Network of Innovation Agencies

ContentsIntroduction 3

Invite – A business-friendly Framework Programme 5Key recommendations 9

Involve – SME-friendly European Innovation Partnerships 11Key recommendations 13

Enable – A dedicated Open Area for SME Innovation 15Key recommendations 20

This is the TAFTIE response to the European Commission Green PaperFrom Challenges to Opportunities: Towards a Common StrategicFramework for EU Research and Innovation Funding; COM(2011) 48.

As the association of nationalinnovation agencies across Europe,TAFTIE understands and enables thecritical role of business in drivinginnovation and is, as a result, uniquelyplaced to offer support and advice onhow best to reverse the highlydisturbing decline in businessparticipation in EU innovation. TAFTIE’smember agencies are deeply involvedin implementing national andinternational research and innovationprogrammes and supporting world-class innovation to create economicgrowth. The annual budgets of theTAFTIE member agencies are morethan €7 billion.

If Europe is to benefit from the ideas,skills and ambitions of businesses onthe scale required for the goals of theInnovation Union to be realised, it isvital that targeted changes are made toEU research, development andinnovation programmes.

Changes that will make businessparticipation more attractive and fareasier and that will capitalise fully onthe technologies and talents of theinnovative smaller firms so central toeconomic growth.

Bringing together the combinedknowledge and experience of TAFTIE’s25 Members, this document describesthe changes we believe will have thegreatest impact on Europe’s innovationcapacity. It details how instruments,rules and procedures could besimplified to encourage businessparticipation. How European InnovationPartnerships (EIPs) can be made moreSME-friendly. And how to takeadvantage of SMEs’ invaluable market-driven approach to innovation througha new and dedicated Open Area forSME Innovation which will benefit fromincreased coordination of resources andfunds between the EuropeanCommission and Member States.

IntroductionImproving support for business: driving innovation for Europe

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A business-friendly Common StrategicFrameworkParticipation by the business community in the sixth andseventh Framework Programmes has decreased steadilyand significantly – to 25% in the first half of FP71. It isimperative, given the goals of the Innovation Union andEurope’s renewed ambition to generate a moreinnovative and faster-growing economy that thissituation is not allowed to persist – or worsen.

A substantial and well-coordinated effort is clearlyneeded to reverse this decline. We recommend that theEuropean Commission embarks on this task by setting atarget to increase business participation to 30% whileretaining the target of 15% set for SME participation.We suggest it then addresses four issues we believe tobe fundamental to ensuring the scale of businessinvolvement in the Common Strategic Frameworkneeded to boost innovation.

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1. In financial terms, to October 2010

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Increase the attractiveness ofthe future Common StrategicFramework to business

TAFTIE’s main concern is that theFramework Programme is currently not attractive enough to encouragebusinesses to get involved. Simplifying the instruments, rules andprocedures would go a long way toimprove this situation.

While we welcome the launch ofelectronic systems from start to finishthrough the Research Participant Portal,including the new single registrationsystem and the automatic pre-financingat project start followed by interimpayments, we recommend that otherroutes to simplification are also explored:

• Reducing the number of types ofinstruments, streamlining and in somecases integrating instruments withsimilar goals, such as JTIs2, PPPs3,ERA-NETs, JPIs4 and Article 185.

• Developing streamlined andstandardised procedures, with onetoolkit based on one set of rules for allresearch, coordination anddemonstration projects.

• Defining one common set of rules foreligible costs within, and also between,the various Directorate Generals.

• Extending eligibility criteria to includecash flow measures such as investmentsand new equity as alternatives torevenue to make them more conduciveto SME start-ups, which are often notrecognised as trading enterprisesbecause they are still in the pre-revenue phase of growth.

• Introducing the legal option of asubsidy or grant which requires nonegotiation, instead of a contract.

• Unifying the interpretation andapplication of the rules throughoutthe Research Executive Agency andthe European Commission’s DirectorGenerals and their units.

• Bringing European Commissionaccounting principles in line withnormal business accounting systems,allowing commercial participants touse their usual accounting systemsand giving the possibility of usingreasonable lump sums.

• Adopting a more risk-based auditregime, implying more trust in low-riskbeneficiaries, reducing the personalliability of European Commissionofficers and increasing the use of auditsduring projects instead of ex-post.

• Ensuring a much shorter time to bothcontract and to grant award.

2. Joint Technology Initiatives

3. Public Private Partnerships

4. Joint Programme Initiatives

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Enhance programme relevance to business priorities

We would argue strongly for a programme design moreconducive to business-driven innovation. An innovativeeconomy is best served by a programme that strikes abalance between measures allowing the businesscommunity to innovate within their strategic direction(bottom-up) and those based on priorities defined at aEuropean Commission level (top-down) aimed atsolving, for instance, grand societal challenges.

Balancing the needs of businesses and the economywith those of citizens and society is a critical challengefor any future Common Strategic Framework. To ensureEurope rises to this challenge, we advocate that thefollowing recommendations inform the next phase ofDG Research & Innovation policy and funding:

• Ensure that there are open or bottom-up projectsthrough which the business community can channel itsstrategic R&D and innovation efforts.

• Dedicate a significant part of the Common StrategicFramework to innovation projects involving aconsiderable share of business participation.

• Provide the opportunity to propose small projects with few participants and clear, commercial objectivesto ensure innovation is relevant to a wide range of companies.

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Ensure access to globalinnovation networks and markets

TAFTIE is convinced that the newCommon Strategic Framework prioritiesand design should reflect the increasingimportance of global innovationnetworks. For SMEs, as well as largercompanies, innovation andcompetitiveness are no longer achievedsolely through cooperation at theEuropean level but also through linksinto countries such as China and Brazilwhich offer new opportunities forEuropean firms.

We welcome the integration ofinstruments that:

• Encourage global participation in EUprojects, where requested by Europeanfirms, particularly where the foreignpartners play key roles in value chains.

• Support global business networking ininternational networks and valuechains to overcome network failures insuch innovation systems.

• Develop and implement a coherentframework for IPR managementrelated to the international dimensionof the ERA/Innovation Union.

Improve the environment foreffective innovation

TAFTIE strongly supports concertedefforts to build a more coherent andmore effective environment forinnovation through the direct support ofprogrammes and the creation of moredynamism within the knowledgetriangle between research, business andeducation. In particular we wouldsuggest policy makers consider:

• Introducing a broader system offinancing, including a higher degree ofcooperation with the Eureka !nnovestInitiative, for innovation which buildson the lessons learnt from the RiskSharing Financial Facility and includesa portfolio approach of programmefunding, venture capital and debtfunding through Public PrivatePartnerships with the financial sector.

• Developing a Europe-wide, business-friendly system for public technologyand innovation-related procurement.

• Developing related policy areas –such as environmental regulations, taxincentives for innovation, energypolicy and education policy – in a waythat supports innovation.

• Including greater levels ofentrepreneurial skills training innational education systems with aview to enhancing individual andcultural conditions forentrepreneurship in general andimproving the competencies ofentrepreneurial researchers within thescience base in particular.

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Key recommendations

1. Increase the attractiveness of theCommon Strategic Framework to business

2. Enhance programme relevance tobusiness priorities

3. Ensure access to globalinnovation networks and markets

4. Improve the environment foreffective innovation

• Developing better interfaces betweenthe research and university systemand the business community, inparticular launching initiatives toenhance capabilities for strategicinnovation and technologymanagement in SMEs to improvetheir innovation capacity. Also toimprove their ability to engageeffectively with academia and extendSME participation in the EuropeanCommission’s mobility programmes.

• Improving links between the universityand business communities byexpanding models for Business PhDsand DBAs, especially where these arebased on applied research withinsmall businesses, and possiblyestablishing a (virtual) EuropeanInnovation & EntrepreneurshipInstitute similar to the KauffmanFoundation in the US.

• Making better use of national andinternational clusters to capitalise ontheir growing role in facilitating theemergence and internationalisation ofnew competitive industries in Europeand channelling research and openinnovation for the benefit of businesses.

02SME-friendly EuropeanInnovation PartnershipsTo strengthen the competitiveness of Europeanindustry, the European Commission has suggested in itsInnovation Union communication that future Europeanresearch and innovation policy should be geared to areduced set of Grand Challenges. European InnovationPartnerships (EIPs) are to be set up to coordinateEuropean and Member State investments in thesemeasures. A pilot Partnership has already beenlaunched, on ‘Active and Healthy Ageing’, and othersare expected to follow.

TAFTIE welcomes this shift in focus towards GrandChallenges. We agree that European research andinnovation efforts must, to a greater extent than before,focus on issues crucial to the survival of citizens andsocieties in Europe and the rest of the world and, at thesame time, create value and increase thecompetitiveness of European business through itssolutions to common problems.

We also endorse the value of bringing together allrelevant stakeholders across policies, sectors, bordersand entire value chains within EIPs to speedinnovations. We believe they will realise their fullpotential if the following three key points areconsidered in their design:

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Use EIPs to simplify andcoordinate existinginstruments and initiatives

As EIPs are expected to be built onrelevant existing tools and actions,enabling their integration into a singlecoherent policy framework, we trustthat they will not add an extra layer tothe current Research & Innovationlandscape. Instead, we hope that theywill streamline, simplify and better coordinate existing instruments andinitiatives, complementing them withnew actions only where necessary.

Employ clear and opengovernance andimplementation models

There is an opportunity to build on theexperience of previous multi-layer,coordinated initiatives involving theEuropean Commission, Member Statesand business to establish a clear set ofrules for EIPs which will guarantee aneffective and efficient governingstructure – and new best practice forthese kinds of Partnerships. Control ofpublic expenditure should alwaysremain with public authorities whilebusiness should always help defineroadmaps and priorities.

The need to ensure EIPs arecharacterised by simplicity, transparencyand equity demands common,streamlined procedures underpinned by a well-defined set of conditions andrules. To enable SMEs to participate askey players in EIPs it is vital that they are supported by a seamless set ofinterworking instruments whose design is informed from the outset by auser-perspective.

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Involve TAFTIE as a keyinnovation stakeholder onEIP Steering Boards

It is proposed that each EuropeanInnovation Partnership will be led by a Steering Board formed byrepresentative stakeholders from thewhole research and innovation chain,composed of a limited number of highlevel representatives of Member States(Ministers) alongside representativesfrom the leading business and researchcommunities and other key Partnershipstakeholders. We are convinced that tofully deliver on their promise, it isessential that SME and businessperspectives are also represented onthese Steering Boards.

Although it is not the objective that EIPs have a special focus on SMEs, if they are designed in line with therecommendations made in this paperthe potential for SME involvement willbe maximised.

As our Members are heavily involved inpublic investment in innovation activitiesacross Europe, have a deep knowledgeof Member States’ innovation systemsand maintain close relationships withtheir SME client bases, TAFTIErepresents an important source ofrelevant knowledge and experience.

We believe TAFTIE is exceptionally wellplaced to contribute to the governanceand direction of EIPs through ourunique SME networks, experience andexpertise in working with small firms.

Key recommendations

5. Use EIPs to simplify andcoordinate existinginstruments and initiatives

6. Employ clear and opengovernance andimplementation models

7. Involve TAFTIE as a keyinnovation stakeholder in EIPgovernance structures

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03A dedicated Open Areafor SME Innovation‘As Europe faces the challenges of the 21st century,SMEs will play a vital role as engines of growth andjobs.’ This view, articulated here by the Small BusinessAct Review, was also represented in the FP7 interimevaluation, which highlighted the issue of business andSME participation and why the needs of fast-growinginnovative enterprises deserve particular attention. The European Commission’s Innovation Unionpublication also contributed to the debate on SMEs andinnovation by setting out a broad concept of innovationwhich encompasses non-technological innovation.

There is now a convergence of opinion betweenbusiness organisations, national agencies and theEuropean Commission which recognises that fast-growing innovative SMEs are capable of transformingEurope’s economic performance and that SMEs ingeneral are key drivers of innovation. There is alsoconsensus that, in line with thinking behind theInnovation Union, for the vast majority of SMEsinnovation is not driven by research but by marketdemands, coming either from final users or customers intheir value chains.

Enabling SMEs to realise their potential for innovationand wealth creation will require that both the EuropeanCommission and the national agencies represented byTAFTIE work together to deliver coherent Research &Innovation support to these business at both thenational and European levels. They will need to combineand coordinate their efforts (in the form of Article 185structures), where the added value of doing so can beclearly identified, and to recognise when the interests ofSMEs are best served at the European level throughEuropean Commission programmes and structures.

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In designing the next Common Strategic Framework,the European Commission has the opportunity tointegrate these important areas of consensus amongkey stakeholders into a coherent approach to buildingan Open Area for SME Innovation.

Create an open, bottom-up area for SME innovation

TAFTIE proposes the creation of a dedicated OpenArea for SME Innovation within the Common StrategicFramework which will give the European Commissionand national agencies the opportunity to partner tomeet the demands of business by creating, ‘a clearerrecognition of the pivotal link betweenentrepreneurship and innovation throughout the Europe2020 flagship initiatives, reflecting the ‘think small first’principle set out in the Small Business Act anddedicating part of a future Common StrategicFramework exclusively to supporting SMEs5.’

The Open Area would be a place where SMEs couldcome with bottom-up concepts for R&D projects, derivedfrom the market, and where they would be provided witha choice of instruments to fund their innovation needs.We envisage some of these instruments being fundedand managed by the European Commission’s highlysuccessful Research Executive Agency (REA) and somethrough Article 185 structures.

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5. EUROCHAMBRES submission to February 2011 European Council

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The market-driven perspective oninnovation underpinning this OpenArea proposal is illustrated in thediagram below which demonstrates thatinnovation is, initially, the act of theentrepreneur, rather than the researcher,in a bid to meet market and customerneeds. The diagram also shows the rolefor public measures along the wholeinnovation cycle from idea to marketand how these interface and mesh atregional, national and European levels.

This market focus for SME innovationdetermines the need for an open andbottom-up approach, as well as forbetter coordination of support by theEuropean Commission and nationalagencies at local, national andEuropean levels.

Regio

nal Equity Funds

Com

pany Funding

Nationa

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quity Funds

EC Equity Funds

Company funding

Regio

nal Proof of Concept Grants

Com

pany funding

Natio

nal Proof of Concept Grants

Com

pany funding

Regio

nal R&D Grants

Natio

nal R&D Grants

Art 1

85 R&D Grants

EC R & D Gra

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EC Dem o Grants

The Market

Access to Finance

TechnologySolution

ProductIdea

MarketNeed

The market drives innovation…

The Full Innovation Cycle

…and the market is driven by innovation

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Develop a coherent set of measuresaddressing the full innovation cycle

If the Open Area is to enable projects to maintainmomentum and progress through each stage of theentire innovation cycle, a set of measures is required toensure they get appropriate and timely support.

To support the early stages of the cycle, when ideas areforming and being developed, most of the nationalagencies are able to provide proof of concept grants toSMEs at a regional or national level. These grants aredesigned to allow flexible and fast exploration of novelideas and are open, light and quick to implement. Many include finance coordinated regionally withStructural Funds.

When innovative product and service ideas require newtechnology and R&D, national agencies are keen tocoordinate their resources more effectively with theEuropean Commission. This will enable the provision ofthe most appropriate form of support to SMEs at themost appropriate level, through regional, national,internationally-coordinated (Article 185) and Europeaninstruments. While each Member State has a range ofR&D funding grants available to SMEs for developingan idea and taking it to market with local or nationalpartners, when knowledge or value chain partners areneeded on a European or global basis, larger scalesupport instruments are required to give them access tothe resources they need.

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Improve and enlarge existingR&D funding programmes

Appropriate R&D funding instrumentsfor specific segments of the SMEpopulation already exist to enable theinternationalisation of SME innovationsand the value chains that can bringideas to global markets. All could,however, be improved and enlarged toensure SMEs deliver all that will beexpected of them in the coming years.In particular, TAFTIE recommends:

• A continuation and expansion of theEurostars programme into a largerfunding structure through additionalnational and European Commissionfunding. A pilot action in FP7 fundedjointly through national and EuropeanCommission budgets under Article185 of the EC Treaty, Eurostars is asuccess6 in supporting SMEs whohave their own professional in-houseresearch resources.

• The proliferation of the Small BusinessInnovation Research (SBIR)Programmes being developed byMember States for SMEs interested inopportunities in public sector markets.The development of these fairly earlystage programmes is currently beingcoordinated through the DGEnterprise & Industry PRO INNOprogramme which is also exploringwith the European Commission howthese national programmes could be

more widely implemented across theERA, and potentially internationallycoordinated under Article 185 of theEC Treaty in a similar way to theEurostars Programme. TAFTIEsupports this initiative.

• The allocation of at least double thecurrent level of funding for Researchfor the Benefit of SMEs programme,along with its sister programmeResearch for the Benefit of SMEAssociations, within the Open Area forSME Innovation. Over an extensivelength of time these two programmeshave proved to be the best solutionfor supporting innovative SMEs whichdo not have in-house researchresources. These SMEs represent thevast majority of high-growth firms7

and need the means to acquire R&D-based technologies that areready-to-use and that they can ‘plugin’ to their markets.

These two programmes have beenextremely popular with SMEs, enabling thousands to strengthen theirmarket internationalisation processesas well as build their research,development and innovation capacitythrough international networks ofuniversities and RTOs8. However, theprogrammes have been difficult toaccess as budgetary constraints haveled to only 11% of applicationsreceiving grant offers.

6. Brussels, 8 April 2011, COM(2011) 186, REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL - Interim Evaluation of the Eurostars Joint Programme

7. The Vital 6% Report on High Growth SMEs, NESTA, 2009

8. Research & Technology Organisations, such as Fraunhofer, TNO, Sintef and VTT

We acknowledge the significantimprovements made by the EuropeanCommission through the REA9 inproviding a wide range of lighter andeasier contracting tools for small firms,many of which represent European bestpractice. Our proposal to double fundingfor these programmes reflects the successof these tools together with the massivelevel of demand and oversubscriptionand the size and strategic importance ofthis innovative SME segment of potentialhigh-growth companies. In particular,TAFTIE recommends:

• The integration of demonstrationinstruments within the CIP with thosecurrently being piloted within theCapacities area of FP7 to form anintegral part of the proposed OpenArea for SME Innovation with a largerbudget. Access to demonstrationgrants and trials would help SMEsbridge the gap between R&D and themarket, enabling them to completethe innovation cycle.

• The development of a broadertoolbox of loans, funds, guaranteesand equities to better satisfy theneeds of SMEs for access to financeso that they can fund the best ideasthrough into market quickly andeffectively. The EC-EIB’s Risk SharingFinancing Facility (RSFF) has seengreat success in mobilising funds intoMember States for larger companiesand projects and many nationalagencies have also seen success inmobilising private sector capital andlinking it to the EIB.

In association with, but not part of, theproposed Open Area for SMEInnovation, we would welcome theopportunity to explore with the EuropeanCommission ways of developing the newtoolbox of financial instruments throughnational financial institutions and fundingagencies, capitalising on the knowledgealready available through the CIPfinancial instruments.

Key recommendations

8. Create an open, bottom-uparea for SME innovation

9. Develop a coherent set ofmeasures addressing the fullinnovation cycle

10. Increase the budget for keySME instruments; Research for the Benefits of SMEs,Eurostars and DemonstrationProjects

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9. Research Executive Agency, created by the EC to administer SME-specific R&D grants

The TAFTIE positionrelative to that ofother stakeholders

The European Commission

Competitiveness (Internal Market, Industry, Research& Space) Council of the European Union

EUROCHAMBRES

UEAPME

EARTO

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Annex 1TAFTIE recommendations respond to the following Green Paper questions

1 How should the Common Strategic Framework make EU Research & Innovationfunding more attractive and easy to access?

2 How should EU funding best cover the full innovation cycle from research tomarket uptake?

3 What are the characteristics of EU funding that maximise the benefit of acting atthe EU level and should there be a strong emphasis on leveraging other sourcesof funding?

4 How should EU Research & Innovation funding be best used to pool MemberStates’ resources and how should Joint Programme Initiatives between groupsof Member States be supported?

5 How could the European Commission ensure the balance between a unique setof rules allowing for radical simplification and the necessity to respond to theneeds of SMEs?

8. How should EU Research & Innovation funding relate to regional and national funding?

10. Should there be more room for bottom-up activities?

14 How should EU funding best take account of the broad nature of innovation,including non-technological innovation?

16 How and what types of SMEs should be supported at EU level? How should thiscomplement national and regional level schemes? What kind of measuresshould be taken to decisively facilitate the participation of SMEs in EU Research& Innovation programmes?

17 How should open, light and fast implementation schemes be designed to allowflexible exploration and commercialisation of novel ideas, in particular by SMEs?

18 How should EU level financial instruments (equity and debt) be used more extensively?

19 Should new approaches to supporting Research & Innovation be introduced, inparticular through public procurement, including through rules on pre-commercial procurement, and/or inducement prizes?

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Annex 2TAFTIE recommendations align with business input to the meeting of theCompetitiveness (Internal Market, Industry, Research & Space) Council ofthe European Union on 4 February 2011

Summary of EUROCHAMBRES submission to the February 2011 meeting of theCompetitiveness (Internal Market, Industry, Research & Space) Council of theEuropean Union:

1 A clearer recognition of the pivotal link between entrepreneurship andinnovation throughout the Europe 2020 flagship initiatives, reflecting the ‘thinksmall first’ principle.

2 A broader definition of innovation, beyond the established hi-tech and research-driven focus and in parallel, a broader application of innovation funding rules.

3 A paradigm shift in education policy, recognising in particular the key role that academia business collaboration plays in universities’ pursuit of world-class excellence.

4 The establishment of a stand-alone EU innovation programme dedicatedexclusively to supporting SMEs1.

5 The elaboration and application of innovative approaches to public procurement.

6 Better coordination between innovation funds at a regional, national andEuropean level, with a more user-friendly logic and a more coherent andstreamlined approach to their administration.

1. Whilst different stakeholders have conceived different names, they are referring to acommon concept in principle, referred to in the main body of the document as ‘adedicated Open Area for SME Innovation’.

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Annex 3TAFTIE recommendations align with the conclusions of the meeting of theCompetitiveness (Internal Market, Industry, Research & Space) Council ofthe European Union on 4 February 2011

Specifically the following conclusions:

Conclusion 16: The Competitiveness Council called for the implementation of astrategic and integrated approach to boosting innovation andtaking full advantage of Europe’s intellectual capital, to the benefitof citizens, companies – in particular SMEs – and researchers.

Conclusion 20: The European Commission is invited to:

• provide guidance on the application of the Directives on publicprocurement; more generally public procurement should bebetter geared to creating greater demand for innovative goodsand services;

• explore options for setting up an intellectual property rightsvalorisation instrument at the European level, in particular toease SMEs’ access to the knowledge market.

Conclusion 22: The European Commission is invited to present proposals to:

• put in place an EU-wide venture capital scheme building onthe European Investment Bank and other relevant financialinstitutions and in co-operation with national operators.

• assess how best to meet the needs of fast-growing innovativecompanies through a market-based approach.

• explore the feasibility of a Small Business Innovation Research Scheme.

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Annex 4TAFTIE recommendations align with UEAPME’s2 position3 on the CommonStrategic Framework

Specifically the following conclusions and recommendations:

1 Experiences with the current Framework Programme – FP7

• The SME-specific programme (Research for the Benefit of SMEs) is betterdesigned to meet the needs of SMEs and the high number of proposalsdemonstrates the attractiveness of this part of FP7 for SMEs.

• While FP7 has not been able to reach the 15 % participation target for SMEparticipation in thematic research, the SME-specific programmes are notprovided with sufficient financial means and only a minority (11%) ofqualified projects can be supported.

2. Towards a new framework programme for R&D

• The next programme has to be better balanced between applied andfundamental research and needs a stronger focus on innovation and market application.

• The focus must be put on innovation and support programmes have to deal with the whole innovation chain (i.e. project development, feasibilitystudies, access to technology, R&D, IPR protection, demonstration,implementation, commercialisation).

• The Common Strategic Framework must include the current SME-specificprogramme (Research for the Benefit of SMEs) which has contributedsignificantly to cross-border R&D and innovation activities in the SME sector.

2. UEAPME – The European Association of Craft, Small and Medium-sizedEnterprises. www.ueapme.com

3. UEAPME position published 18 January 2012

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Annex 5TAFTIE recommendations align to EARTO’s position4 on the EuropeanCommission’s Green Paper

Specifically the following conclusions and recommendations:

1 The proposed Common Strategic Framework is a welcome approach to betteraligning with one another many of the current European programmes andinitiatives related to research and innovation. Real coordination is needed inrelation to objectives and instruments, and there must be alignment of rules ofparticipation, funding models and IP policies.

2 Much of what is proposed in the Green Paper will require concerted action by theMember States. However, many past efforts at coordinating national R&D activityhave failed to achieve their ambitions. The Member States must commitsubstantially – politically and financially – to real coordinated action if the proposalsto tackle societal Grand Challenges and to accomplish the European ResearchArea are to succeed. It will be preferable to launch fewer joint initiatives betweenMember States for which there is real commitment to act than a larger numberwhich fail or which underperform for lack of real engagement.

3 The design of future European Research & Innovation programmes should reflectthe new focus on innovation and tackling societal challenges. Equally important,however, is to preserve and reinforce the Common Strategic Framework’s centralplace in the European R&D system, in terms of budget as well as of keyinstruments such as collaborative research and smaller projects. The proposedCommon Strategic Framework provides opportunities for better aligninginstruments from different programmes including, for example, an integratedsupport framework for SMEs5.

4. EARTO – The European Association of Research & Technology Organisations – www.earto.org

5. Whilst different stakeholders have conceived different names, they are referring to a commonconcept in principle, referred to in the main body of the document as ‘a dedicated Open Areafor SME Innovation’.

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