Impact of the Community Framework for State Aid for Research and Development and Innovation on European Union Competitiveness Summary of the study done by Technopolis At the request of the Directorate General of Enterprises, Ministry of Economic Affairs, Industry and Employment Avertissement : Le contenu de cette étude n’engage que ses auteurs et ne représente pas la position officielle des autorités françaises This action is carried out in the frame of the National Programme of technical Assistance co-financed by the European Commission June 2008 Table of contents 1. Introduction 3 2. Study Outline: Lines of Argument and Methods Used 4 2.1 Working Framework and Methodology 4 2.2 Added Value and Limitations of the Study 6 3. Community Innovation Performance and the External Competitiveness of the EU 6 3.1 Stagnation in Innovation Capacity Weakens the EU’s External Competitiveness 7 3.2 An Initial European Response: Moving Towards a European Industrial Policy 8 4. The RDI Framework: Facts and Stakeholder Perceptions 8 4.1 The Community Regulatory Framework for State Aid for RDI 8 4.2 Wide-Ranging Opinions on the RDI Framework 9 5. International Comparison of State Aid for RDI 11 5.1 State Aid for RDI in the United States 11 5.2 Stae Aidfor RDI inChina 13 .3 Stae Aidfor RDI inJapn 4 ...
Impact of the Community Framework for State Aid for Research and Development and Innovation on European Union Competitiveness Summary of the study done by Technopolis At the request of the Directorate General of Enterprises, Ministry of Economic Affairs, Industry and Employment Avertissement : Le contenu de cette étude n’engage que ses auteurs et ne représente pas la position officielle des autorités françaises ThisactioniscarriedoutinthefraomfetheNationalProgrammeoftechnicalAssistance co-financedneaopursiismmConoehEybt June 2008
Table of contents 1. Introduction 3 2. Study Outline: Lines of Argument and Methods Used 4 2.1 Working Framework and Methodology 4 2.2 Added Value and Limitations of the Study 6 3.CommunityInnovationPerformanceanedEtxhternalCompetitivenessoftheEU6 3.1 Stagnation in Innovation Capacity Weakens the EU’s External Competitiveness 7 3.2AnInitialEuropeanResponse:MovTinogwardsaEuropeanIndustrialPolicy8 4. The RDI Framework: Facts and Stakeholder Perceptions 8 4.1 The Community Regulatory Framework for State Aid for RDI 8 4.2 Wide-Ranging Opinions on the RDI Framework 9 5. International Comparison of State Aid for RDI 11 5.1 State Aid for RDI in the United States 11 5.2 State Aid for RDI in China 13 5.3 State Aid for RDI in Japan 14 5.4 State Aid for RDI in Korea 15 5.5 Sectoral Analysis of State Aid for RDI 16 6. The Framework in Practice: Notification Case Studies 17 6.1 Scheme Notifications 17 6.2 Individual Project Notifications 20 7. Major Conclusions of the Study 23 7.1 Major Conclusions from the International Comparison of State Aid for RDI 23 7.2 MajorConclusions from the Notification Case Studies 24 8. Recommendations 25 Impact of the Community Framework for State Aid for Research and Development and Innovation on European Union Competitiveness Summaryi
1.Introduction DuringtheFrenchPresidencyoftheCounciloEfutrhoepeanUnion,from1July2008to31December2008,theFrenchauthoritiesplantoworkwitMheamllberStatestoexplorethe“externalaspectsofEuropeanUnioncompetitiveness.TheTechnsosptoulidycommissionedbytheFrenchGeneralBusiness Directora1pprhelefoeparseerhtsuisidcsettnisawotdednesonabyesssngsiehtpmitcafo the Community Framework for State Aid for Research and Development and In2noavntinoehEuropean Union’s competitiven3netoctnusliidsncoomsuujomrmacroyncoafintsheamsassTh.e drawnbythisstudy,whichwascaroriuetdbetweenSeptember2007andMay2008.The aim of the study was to identify the spefcfieficof the RDI Framework on the Europeants Union’s competitiveness, as compared with otfhatthe EU’s main established and emerging competitorregions.TheprimarypurposeoftahmeeFwrorkistomakecertainformsofStateaidcompatible with the Treaty, whiachp,riori, prohibits them. However, although the purpose of the rulesistoensurehealthycompetitionwithinthteheEyU,canalsoaffecttheabilityofpublicdecision-makers to support the innovation capacity of firms located in their countries. Furthermore, in an increasinglyglobalisedknowledge-basedeconoismiy,miptortanttoconsidertheruleswhichgovernState aid practices in the competitor regions mentioned above. Although the Community’s rules on StateaidneedtobestringentenoughtoprervieonutsesidtsonsortiompeofcititwnoihtihtnEUeth,eexistenceofwidedisparitiesbetweentheStaptreacatiidcesofEuropeancountriesandthoseoftheircompetitors also represents a threat to the Union’s external competitiveness. The two main questions asked by the study were as follows: (i)tawnatotppsutorrmfithsoteffevitcylepueblnaerkwomeseitirohtuacilbFarRIDtehoDse develop research and innovation projects within the EU? (ii)Does the State aid offered by the EU’s maioitnnrtageoisnetetiroringcomporemerglddeexc the limits set by the Community Framework? Thestudythustriestoinformtheconstanitfltyinsghbalancebetweeninternalcompetitionandexternalcompetitiveness.Asubtletrade-offbetthweesetwonssiemtniuerrqeornirysaesecnotred giveEuropethebestpossiblechanceofreatchheinagmbitioustargetsetbytheLisbonEuropeanCouncil in March 2000, namely, becomitnhge“most competitive and dynamic knowledge-based economy in the worl.dwolsehtotesnosprenItihrasdtwoamedingsbegresproEehUeivtbyobsctje countries, the European Parliament has asked the Commisssiyosntetoma“tically assess the impact of the EU’s internal policies and regulations on global competitiveness and to give due weight in its regulatorypolicy-makingporcessestothecompetitivepositioEnUoefnterprisesinsideandoutsideEurope4 .ThesediscussionsformpartofawiderefforttromrtehfoerulesonStateaid,inparticularwhereitspurpose is to support research and innovation activities. The new Community Framework for State Aid for Research and Development and Innov5tadybpoet,daoinionmissComthedekram,6002niasignificantstepforwardinthisreformproceissdutsfoyT.hnesoed,rsfeeariencxpersede-baabkcefdeon the new RDI Framework following its first year of application. 1teraorfirDtoecneGlarenitehtsiseofEtnrerpCodannioatovnnItmeneparesDlicisoPnesetivipmte the Ministry of the Economy, Finance and Employment. 2Hereinafter the “RDI Framework, for convenience 3The opinion expressed in this study are thestnoflretecosthtuasrohdnaodnsibilityoftheoelreope of the French authorities 4fcepsostrnteAalperoEx:olabluEltde,G“007enti22May2lusoRetfoontiPnaepornemailraEu Competitiveness (2006/2292(INI)). Impact of the Community Framework for State Aid for Research and Development and Innovation on European Union Competitiveness Summary3
TheCompetitionDGplanstoassesstheimptahcteoRfDI Framework in 2010; this study does not aim to replace or pre-empt that initiative. Nevertheless, the information collected and the analyses developed for the purposes of this study, and above all the discussions which follow during the French Presidency, will help prepare for this impact asses.sme 6nt 2.Study Outline: Lines oAfrgument and Methods Used Thereisnodirect,unambiguousrelationshtipwebeentheRDIFrameworkandtheEU’sexternalcompetitiveness.Itwasthereforeessentialrsttecirdethestablishaworknigrfmawerokotifoinvestigations and structure the argument. 2.1Working Framework and Methodology The framework used for this study was both simple and pragmatic. Schematically (Figure 1), State aid ispartofacyclewhichbeginswhenoneormbolirceopruprivatestakeholders,whointendtodevelopinnovation projects within the EU, express a need for official support. This may or may not be forthcoming,andthefeaturesofsaidsupportdewpilelndonthestrateagpypliedbytherelevantpublic body, acting strictly in accordancehtiwehtRDIFramework.hTemauotnoffocifiaalid received,aswellasamultitudeofotherintaenrdnaelxternalfactors,willdeterminewhetherornotthe projects are implemented, under what conditions and on what scale. In the medium to long term, these projects will affect the supply of goods and services in the country concerned. The same cycle is repeated outside the EU, with the official support available in these countries. TheEU’sexternalcompetitivenesmsiesasuredbywhathappenswhensuppliesofgoodsandservicesfromtheEUareplacedalongsidethoseofitsetciotomrpsontheinternationalmarkets.Evenbeforecompeting for goods and services, countries compete to attract innovative firms and innovation projects.Inbothcases,competivenessgainsvweillahloang-termimpactintermsofjobcreationandeconomic growth. 6emAniteiwg008niMrahc2ineacplkootDGnoititepmoCehtromntfrtmedepanatleveehrhttorder to facilitate the appropriation of the study’s results by the Commission. Impact of the Community Framework for State Aid for Research and Development and Innovation on European Union Competitiveness 4