Den Haag, 26 and May, 2005

Honourable Ministers,

Members of Parliament,

Ladies and gentlemen,

I would like to thank the Dutch Parliament and the EUREKA Chairmanship for inviting me to speak at this conference.

I have gladly accepted the invitation because the topics you are addressing – the Lisbon strategy, the European Research Area and the role of EUREKA – are at the heart of the debate on the kind of Europe we want for the future.

In the weeks and months to come, politicians and citizens will have to make choices on what Europe we want, for ourselves and for our children.

The Lisbon strategy and knowledge for growth

The European Commission, for its part, has clearly stated what Europe it wants to realise, namely a Europe that promotes prosperity, solidarity and security.

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It has proposed to re-launch the Lisbon strategy that European leaders defined in 2000 and to re-invigorate it by focusing on growth and employment in a stronger partnership with Member States.

The reason why we decided to put the Lisbon strategy at the heart of our programme and why Member States and the European Parliament have broadly endorsed it is, quite simply, because its success will determine to what extent we will be able to preserve, and possibly strengthen, the European way of life.

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In the face of increasing global competition, we have to work together and exploit the unique resource that we have: knowledge, relying on the creativity and the brains of all our citizens.

Building the knowledge society and leveraging knowledge for growth is probably the best, and maybe the only, way to sustain our European model of society, if we don’t want to make a trade-off between economic growth, social cohesion and environmental protection.

We cannot and do not want to compete on low wages. Even if we have to reform our social security systems, they will always be more generous than our trading partners. And we will not accept to compete on the back of our environment.

That is why knowledge-based growth must become the motor of sustainable competitiveness and welfare in Europe.

Of course, I do not refer to knowledge in the sense of just knowing more for its own sake. When I talk about knowledge, I refer to the whole chain of knowledge which leads to sustainable growth.

Europe, its citizens and its enterprises, must build world-class leadership in the way we produce knowledge through research, in the way we diffuse knowledge through education and in the way we use and apply knowledge through innovation.

We call this the knowledge triangle, which can only function well and produce the economic and societal value we expect from it if it is integrated in adequate framework conditions, such as proper fiscal incentives, good collaboration between industry and academia, and a general scientific culture.

Knowledge is a factor of competitiveness. European enterprises can only achieve leadership in global markets if Europe takes the lead as an economy and society of knowledge. If we cannot be the cheapest, we have to be the best.

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The emerging markets in which our companies compete are increasingly global and technology-intensive. By raising the knowledge capacity of our firms, our competitive advantage can be based on providing the best new products, services and processes in the world.

But knowledge does not only create competitive businesses. It also allows society to make progress. Progress in fields such as health, environment and energy largely depend on the advancement of knowledge.

We are already strong in knowledge, but we can become much stronger if we pool together our efforts in an intelligent way, if we have our best researchers work together and compete for excellence, if we create an internal market for knowledge.

If a Union of 455 million people chooses to realise knowledge Europe, I can see a bright future for Europe.

European Research

For the first time, with the new Lisbon strategy fully endorsed by all EU institutions, we have a coherent programme to make knowledge Europe happen.

It is in this context that the European Commission presented on 6 April its proposals for the future EU research programmes, known as the 7th Framework Programme, which would run from 2007 to 2013.

I am strongly encouraged by the very positive reception our proposals have had.

The Commission’s proposals for research may seem ambitious, as we are proposing to double the budgets.

But in light of the the challenges we face to preserve our way of life, the broad commitment we have to the Lisbon strategy and the opportunities and needs we see to realise knowledge Europe, the proposal to double the R&D budget is rather modest.

I say this without irony: a doubling of European research funds is the bare minimum of a sound proposal to restructure not only the EU budget but indirectly also the national budgets towards growth and jobs.

We have to realise that the EU is investing too little in research. We invest, all 25 countries, public and private sector together, 2% of our GDP in research. That compares with 2,7% in the US and 3% in Japan. Interestingly, South Korea is already today at 2,9% of GDP and China at 1,5%, which is more than a number of EU Member States.

We also have to realise that EU research funding has a strong leverage and multiplier effect, both on national research budgets and on private R&D investments.

Even though it only represents 6% of public R&D spending in the EU, roughly the equivalent of Daimler-Chrysler’s research budget, the EU’s Framework Progamme is a powerful instrument for leveraging knowledge for growth. It focuses on consolidating our strengths, addressing our weaknesses, serving the needs of our industry and enhancing knowledge and technology transfer across the whole European Union.

Our proposal for the 7th Framework Programme is built around 4 objectives, corresponding to 4 programmes:

• The Cooperation programme, where the objective is to gaining leadership in key scientific and technology sectors by working together across borders between industry, academia and public authorities. We see a very strong role for industry in this cooperation, notably through industry-led technology platforms.
• The Ideas programme, where the objective is to stimulate excellence and creativity in frontier, higher-risk research which will provide the basis for tomorrow’s breakthrough innovations. This programme will fund individual teams of researchers, competing for the first time at European level on the sole criterion of excellence.
• The People programme, with the objective of supporting researcher mobility, training and careerd development.
• And, fourthly, the Capacities programme through which the EU can build the capacities it will need in the knowledge economy, for example in terms of research infrastructures, innovating SMEs and people interested in science.

FP7 also proposes to introduce a novel risk-sharing finance facility aimed at improving access to EIB (European Investment Bank) loans for large European research actions, in particular, large collaborative research projects or new research infrastructures.

Doing more for R&D in Europe

By focusing on actions where there is real added value at European level, by overcoming duplication and fragmentation and by mobilising our scientific community to create knowledge Europe, coupled with a simplification of procedures, I am confident that the 7th Framework Programme will deliver and will provide very good value for money.

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Obviously, the Framework Programme alone will not suffice.

We will have to get the proper framework conditions in place, as I mentioned before, in particular to boost private sector R&D investment and innovation.

And national budgets and policies have to follow suit. Fortunately, as a result of the Lisbon agenda, R&D and innovation is now high on most national agendas.

Nearly all Member States have set national targets regarding research investment. If these are met, research investment will come close to 2.6% by 2010 - a real improvement on the current level of about 2 %.

The role of EUREKA

Let me now turn to the role played by EUREKA.

Through the hundreds of projects it has initiated in its 20 years of existence, EUREKA has significantly contributed to the competitiveness of our industry. It has contributed, in complementary ways to the EU Framework Programmes, to fostering trans-national cooperation.

Even if Member States have not supported EUREKA as effectively as they could have done in recent years, I am convinced EUREKA can remain a strong framework for catalysing R&D in Europe.

The 2004 EUREKA Ministerial Conference in Paris called for a stronger national support of EUREKA projects. At the same time, ministers made a plea for a strengthened cooperation of EUREKA with the Commission.

As European Commissioner for Research, I want to follow up on this and explore all possible synergy and complementarities between the EU and the EUREKA actions in research.

To develop a partnership between EUREKA and the Commission, two initiatives are currently under discussion:

• an enhanced cooperation in the framework of European Technology Platforms and – possibly – Joint Technology Initiatives, and
• the launch of a specific activity in favour of research-intensive SMEs.

The Dutch Chairmanship of EUREKA is actively pursuing both initiatives in close cooperation with the Commission services.

In fact, EUREKA Clusters are already participating actively in the definition of key European Technology Platforms and Joint Technology Initiatives, notably in the area of information and communication technologies.

Let me also briefly address the second possible initiative related to SMEs.

At the general policy level, we consider that the launch of a number of new Art. 169 initiatives would make a significant contribution to the realisation of the European Research Area.

The EUREKA initiative addresses a critical sector of European industry - that of research-intensive SMEs. Building on its intrinsic strength in this sector, EUREKA has the potential to make a real contribution towards the integration of important parts of national programmes in favour of research-intensive SMEs.

In such a way, we would make the European Research Area concrete for a group of key players in our knowledge economy, the SMEs that drive research and innovation.

If such a scheme has the required quality and European ambition, I trust that we can muster the necessary support among Member States to contribute from the EU budget.

This would obviously require that we have the necessary financial means in FP7.

Conclusion

Ladies and gentlemen,

There have been several moments in its history when the EU has been at a cross roads.

This time, the EU is at a cross roads as it is to decide on the financial perspectives for 2007 to 2013.

It comes down to choosing what kind of Europe we want: a Europe of the past that serves to redistribute existing wealth? Or a Europe of the future, that thrives on knowledge and ensures sustainable prosperity for its people.

Let there be no misunderstanding: the 1% proposal that is advocated by the group of net contributing countries to the EU would lead to a reduction of the EU budget – € 9 billion in 2007 compared to 2006.

And let’s not have any illusions: this reduction is unlikely to happen in agriculture or in structural funds; it will happen in the budgets that hold the key to our future, those of R&D and innovation.

Allow me therefore to say that the decision on the financial perspectives is a moment of truth.

I know that you, members of Parliament, are well aware of what is at stake. Your personal engagement and support is essential in helping Europe meet its ambitious objective.

With your active help, the financial perspectives can become a golden opportunity for Member States to demonstrate that they are truly committed to the Lisbon strategy, not only in words but also in deeds.

Thank you for your attention.

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