Copyright: iamharin

Inertia trumps ambition

At a summit in March 2012, European leaders said that innovation and research were at the heart of the Europe 2020 strategy. They asserted that all five targets set out for 2020, the first two of which are to promote employment and to improve the conditions for innovation, research and development, remained fully relevant.

But now that the time has come for action, European leaders have, once again, shown themselves unwilling to put their money where their mouths are. The latest proposals from EU President Herman van Rompuy for the EU’s Multiannual Financial Framework—the budget for 2014 to 2020—contain only minor cuts for agriculture and cohesion. Instead, the axe falls on competitiveness, including research and innovation. These proposals seem to be more or less acceptable to the member states and final decisions will be taken in the spring.

There is no clear detail yet, but, following the failure of last November’s budget negotiations, van Rompuy proposed cutting the budget line for Horizon 2020 from €102 billion to €95bn. The larger figure would have included a maximum of €76bn for Horizon 2020; so it seems inevitable that its budget will end up below €70bn.

The negotiations have been remarkably similar to those for the previous, 2007-13 budget. Then, UK prime minister Tony Blair proposed to cut the budget line for Competitiveness and Growth and his Dutch counterpart, seeking rebates, supported him. Now, their successors lead the charge against research and innovation. They are reluctant, perhaps, but it’s inevitable given these nations’ desire to reduce EU budgets, or get rebates, and their unwillingness to get into a genuine discussion about agriculture and cohesion spending.

Delivering on the original commitment to research and innovation would have meant providing at least the €80bn requested by the Commission for Horizon 2020, maybe more given that the European Parliament was speaking of €100bn. That would have meant significant cuts for agriculture and cohesion.

The €80bn proposal for Horizon 2020 looks much larger than the €55bn for the seventh Framework Programme. However, one needs to take into account three things: inflation; Horizon 2020 covering innovation as well as research; and the ramping up of annual expenditures under Framework 7. In real terms an €80bn budget would have meant only a small rise in annual expenditures.

Horizon 2020 is the largest part of the budget for Competitiveness for Growth and Jobs, which is one of seven categories in the EU budget. The largest category is Sustainable Growth: Natural Resources, a euphemism for the Common Agricultural Policy. The cohesion budget is almost as big. The budget for competitiveness is less than half of either of these.

By continuing to spend almost 40 per cent of its budget on agriculture, the EU is distorting worldwide markets and treating European countries and regions with gross unfairness. One thing is for sure, agriculture is not going to create jobs. Cohesion funds have been a crucial tool for reducing income disparities throughout Europe and for development and growth. They remain important, but their effectiveness and transparency must be significantly improved. The presence of pointless projects, sometimes called bridges to nowhere, unaccountable spending, and corruption means that more could be done with less, if the EU were to account for its spending more carefully and concentrate funds where they would do most good.

Cohesion funds continue to go to the most developed member states: recently they made up a wholly insignificant 2 per cent of the budget for road improvements in Maastricht, for example. If the lower budget for Horizon 2020 becomes a reality, the least one can do is to take sensible decisions on how to adjust spending accordingly. There should be no reduction in the budget for the European Research Council.

The ERC has been the major step forward in European policy for science, technology and innovation in the last 20 years, and funds research at the highest levels. It would make sense, however, to abandon the programme for Emerging Sciences and Technology. It overlaps with both the ERC and the Programme for Industrial Leadership. And, if the European Institute for Innovation and Technology is to get the 10-fold budget increase proposed it must shift from being a body focused largely on coordination and some training to becoming a funder of large research projects.

There is also room to make major savings by reducing and simplifying the organisational structures for the research activities funded under the Framework Programmes. Participating in EU schemes such as the Joint Technology Initiatives, Joint Programming Initiatives and the European Research Area networks brings a huge administrative burden and transaction cost. If universities, companies and research centres were given the money, instead, and were allowed to organise themselves, overheads would be reduced and more research and innovation would result.

Reprinted with permission from a Research Europe editorial published on 10 January 2013.

Peter Tindemans

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