TAFTIE Task Force on Structural Funds
Report to the Board by the Structural Funds Task Force
27th June 2008
Preamble
In view of the above and the growing attention in Europe on the use of Structural Funds
for R&D, in general, as well as to foster European-wide collaborations, in particular, the
Board of TAFTIE approved the establishment of a Task Force in order to develop a
common understanding and tools to use Structural Funds for R&D and Innovation
cooperative activities at European level.
The Structural Funds Task Force was established with chairmanship by CDTI. Three
meetings were held in July 2007 (Madrid), October 2007 and March 2008 (Brussels).
Members of several TAFTIE agencies as well as DG REGIO attended and actively
participated in the meetings.
An external facilitator, Mr Francisco de Arístegui from Asesoría Industrial Zabala
(Pamplona, Spain), prepared the reports concerning Structural Funds managing and
participated in each of the meetings. CDTI wish to acknowledge the significant
contribution of Mr Arístegui and his team to this Task Force.
This report summarizes the external facilitator reports as well as TAFTIE’s participants
in the Task Force contributions. All documents generated within this Task Force
(reports, presentations, etc.) are available in www.taftie.org.
TAFTIE Task Force on Structural Funds
Executive Summary
Legal analysis carried out on Structural Funds and Framework Programme
compatibility showed the difficulties and incompatibilities between both funding
instruments. However a legal entry door would make possible to the Member States
the use both instruments in international RTD activities.
So far Structural Funds have been an important financial source for actions supporting
and investments related to research and innovation. However, only a minuscule
sample of projects funded by the Structural Funds was actually related to cooperative
international RTD and innovation activities.
In this context the aim of TAFTIE to set up a new funding instrument for cooperative
international RTD and innovation activities, supported by operational programmes from
their respective TAFTIE members countries, and based on the ‘Convergence’ and
‘Competitiveness’ objectives, is a real novelty and challenge.
Four options for using the Structural Funds for financing international technological and
innovative cooperation activities has been analyzed; being International
demonstration projects derived from the Community RTD Framework Programmes
the most feasible option for Structural Funds allocation for this kind of activities.
1. Introduction
Upon an initiative by the German Presidency of the EU, a CREST Working Group
elaborated a set of strategic (but generic) guidelines including 14 recommendations on
“How to achieve better coordination use of Framework Programme and Structural
Funds to support R&D”. The guidelines take into account work undertaken by EURAB
in parallel. A Conference attended by more than 200 participants took place on May 3rd,
2007 where the Commission announced a Communication on the said theme for July
2007.
On the said issue, very heterogeneous experience exists both within TAFTIE members
and across different European regions in managing Structural Funds for R&D projects
and related activities. On the other hand, although not all current TAFTIE members and
countries manage such kind of funds, a TAFTIE policy would have the potential to
attract further TAFTIE members from Eastern Europe. Indirectly, therefore, a pool of
knowledge could help in fostering European-wide partnerships in the longer run.
In view of the above and the growing attention in Europe on the use of Structural Funds
for R&D, in general, as well as to foster European-wide collaborations, in particular, it
seems advisable to develop a common understanding and tools through a Task Force.
In view of the complexity of the dossier, it was proposed to use an experienced
consultant able to facilitate the work of the TAFTIE Task Force, both to identify good
practices as well as to build-upon them in order to recommend future courses of action
for TAFTIE members.
Asesoría Industrial Zabala SA from Pamplona (Spain) was selected as facilitator.
Thus the objectives of the TF and facilitator were the following:
1. Clarify the legal basis regarding the EU framework of Structural Funds to be used
both for R&D, in general, and complementary to FP7, in particular.
2. Identify good practices of SF management within UE members.
3. Define a common understanding and tools to use Structural Funds for R&D and
Innovation cooperative activities at European level.
2. Legal basis regarding the EU framework of SF to be used both for R&D,
in general, and complementary to FP7, in particular
A preliminary study containing a legal analysis on Structural Funds and Framework
Programme compatibility showed the difficulties and incompatibility between both
funding instruments since:
“An expenditure co-financed by the Funds shall not receive assistance from
another Community financial instrument” Article 54.4
However a legal entry door was suggested to use Structural Funds and Framework
Programme for international RTD projects without geographical constraints:
“At the initiative of the Member State, the Operative Programmes financed by
the ERDF for the Convergence and Competitiveness and Employment
objectives may also contain actions for interregional cooperation with, at least,
one regional or local authority of another Member State” (article 37.6.b).
Therefore, the facilitator found crucial that each TAFTIE member assures the insertion
of a specific measure in their national or multi-regional Operative Programmes financed
by the ERDF–with its respective budget- for ‘financing international R&D cooperation
projects managed in collaboration with other national public innovation agencies who
are members of the European TAFTIE association.
According to this, a letter was sent from CDTI to CREST representatives including this
recommendation.
3. Good practices identified of SF management within UE members
The most important findings on this issue were the following:
− Structural Funds represent an important source of finance to support actions and
investments related to research and innovation (During the 2000-2006 period 10,58
B€ coming from Structural Funds were invested in these kind of activities).
− However during this period only a minuscule sample of projects funded by the SF
(0.01%) was really related to cooperative international RTD and innovation activities
which focus on industrial applications/beneficiaries or were market oriented
research projects.
− The aim of TAFTIE to set up a new funding instrument for cooperative international
RTD and innovation activities, supported by operational programmes from their
respective TAFTIE members countries, and based on the ‘Convergence’ and
‘Competitiveness’ objectives, is a real novelty and challenge.
− The new funding instrument that TAFTIE intends to set up for financing cooperative
international RTD and innovation activities through SF will, in practical terms, be a
priority axis dealing with interregional cooperation activities (sharing some features
with INTERREG programmes, but supported by Operational Programmes under the
‘Convergence’ and ‘Competitiveness’ objectives of the SF), and whose
geographical scope will be given by the number of Operational Programmes across
Europe that finally include this measure.
− Even though the direct participation of private companies as project partners was
avoided by the managing authorities of INTERREG III programmes, there are some
useful lessons which can be extracted from the management of those programmes,
which could be replicated by TAFTIE members in order to ensure a proper
management of cooperative international RTD and innovation projects.
− The formula of advances paid to the beneficiaries by the body granting the aid, not
exceeding 35% of the total amount of the aid to be granted (which is allowed by the
new SF regulation 1083/2006, article 78.2) may increase the interest/attraction for
companies on the new funding instrument envisaged by TAFTIE.
As is shown in this work there are actual possibilities within EU regulations to make use
of SF for this purpose.
4. Design of new instruments to use Structural Funds for R&D and
Innovation cooperative activities at European level
Based on these previous analyses, this issue aims to introduce several options of using
the Structural Funds for concerted financing instruments. The proposed financing
options are compatible with the legal framework both for Structural Funds and State
Aids, and were discussed with representatives of the Task Force.
In some case the financing option suggested will require to design a specific financing
instrument to use the SF resources, in other cases the use of SF will supplement the
resources of existing financing instruments.
The main options suggested for using the SF for financing international technological
and innovative cooperation activities are:
4.1 International demonstration projects.
These kinds of projects are derived from the Community RTD Framework
Programmes, including demonstration installations needed by companies and
large installations required by academic and research organisations. This
financing option will require designing an ad hoc instrument: The main features
of this instrument are partially based on some good practices of SF
management identified in the previous programming period for supporting
international innovative cooperation activities.
The strategic objective would be to enhance the technological capabilities and
competitiveness of Europe’s manufacturing industry by supporting the funding of
demonstration projects performed by enterprises and strategic partnerships at
international level.
Funding would target technology development projects of experimental nature,
aiming to develop new technologies into pilot plants, prototypes or
demonstrators which will help the future economic and commercial impact of the
new technology at international level, and also represent a relevant
technological and industrial step forward for a sector.
It is important to remember that in principle, prototypes or pilot plants have to
remain at the pre-commercial stage. The Community Framework for State Aid
for R&D and Innovation allows aid for ‘experimental development’ as the closest
stage to commercialisation that can be publicly subsidised. According to its
section ‘2.2 definitions’, the development of commercially usable prototypes and
pilot projects is also included (within the category of ‘experimental
development’) where the prototype is necessarily the final commercial product
and where it is too expensive to produce for it to be used only for demonstration
and validation purposes. In case of a subsequent commercial use of
demonstration or pilot projects, any revenue generated from such use must be
deducted from the eligible costs.
For the above purposes, the project proposal should clearly show:
− Added value through transnational cooperation.
− The setting up of prototypes or pilot projects at a pre-commercial
stage with a significant degree of innovation.
− Expertise of the projects partners in their respective fields of
competence.
− Scale of socio-economic impact of the new technology (expected in
the market and in the competitive positioning of participants).
The pre- and full proposals could be evaluated locally (by the regional/national
authorities affected) and internationally by a sort of International Coordination
Committee formed by the TAFTIE members supporting this concerted
instrument for transnational demonstration projects. This Committee would give
advice to the project coordinators and recommend (or not) the submission of full
proposals.
Given that the number of pre- and full proposals of demonstration projects
derived from Community RTD project results will certainly be limited or quite
small, an alternative simpler and decentralised, evaluation procedure could be
envisaged without the need to create an International Coordination Committee.
This could be based solely on information and assessment exchange among
the TAFTIE members from the Member States of the respective proposers.
This seems to be to most interesting option.
4.2 Application of SF to ‘classic’
programmes such as Eureka.
multilateral
international
R&D
In this case, it is not necessary to propose or design an organisational and
managerial structure since the financing instrument already exists and is
operational. Therefore the suggestions refer to possible financing intensities and
modalities.
4.3 Supplementing the financing of Joint Technology Initiatives (JTIs)
Here again the organisational and managerial structure of the financing
instrument is already operational in a few JTIs which have been recently set up;
these financing instruments differ from one JTI to another. In this context the
proposal refers to exceptional cases where SF financing could be
complementary and therefore compatible with FP funds.
For example, in the JTI ‘Innovative Medicine Initiative’-IMI there are projects
submitted by consortia of research centres, SMEs and large companies, where
research centres and SME get funded up to 70% of their project costs through
FP7 funds, while the large companies involved in the project do not benefit for
any single euro from FP7 to cover their incurred personnel costs. In this case,
the personnel costs incurred by large companies could be funded through SF,
provided that the relevant Operational Programme envisages the support to
companies participating in JTIs.
4.4 Financing regional initiatives to stimulate the participation of regional
innovation stakeholders in the Community RTD Framework
Programme, and in other international R&D programmes.
It aims to use SF to reinforce cooperation/communication/coordination between
two main groups of actors; on the one hand the respective National Contact
Points of FP7 specific programmes and/or national managers of international
R&D programmes; and on the other hand, regional public agents promoting,
financing and stimulating R&D and Innovation, in order to optimise their efforts
and increase participation of regional innovation stakeholders in FP7 and other
international R&D programmes.
This measure is not affected by the Community Framework of State Aid for R&D
since it targets regional public agents and is not aid for enterprises. Therefore
funding ceiling are those stated in the SF general regulation.
In any case, it has to be remembered that in order to benefit from Structural Fund
finances, any of the above options/measures should be reflected in the respective
regional/national Operational Programmes dealing with R&D and Innovation support, in
greater or lesser detail.
These measures should also reflect the possibility of being carried out in the context of
international R&D and Innovation cooperation projects managed in collaboration with
other regional/national authorities of other Member States.
5. Conclusions
International demonstration projects partially derived from the Community RTD
Framework Programmes funded by Structural Funds seem to be the most interesting
option in terms of observing CREST Working Group recommendations on “How to
achieve better coordination use of Framework Programme and Structural Funds to
support R&D”.
Due to the limited number of projects, the evaluation procedure could be envisaged
without the need to create an International Coordination Committee. This could be
based solely on information and assessment exchange among the TAFTIE members
from the Member States of the respective proposers.
In any case it has to be taken into account that all the proposed instruments should be
reflected in the respective regional/national Operational Programmes dealing with R&D
and Innovation support.