​European innovation

Historical context

The European innovation policy is strongly rooted in the industrial policy of the European Union (EU) as well as policy on Information and Communication Technology (ICT). Already at the beginning of the 1980s, Europe experienced a growing gap in innovation vis-à-vis the United States of America (Star Wars programme) and Japan (rise of ICT companies), which led to the creation of the European network for market oriented industrial research (EUREKA) as an intergovernmental initiative in 1985 with a strong focus on ICT research. The two main founders of EUREKA were the former Heads of State François Mitterrand (FRANCE) and Helmut Kohl (GERMANY). The EU and eighteen additional countries, including Switzerland, were the other founding members. An important step was the report ‘Europe and the Global Information Society’ (also called Bangemann report from 1994), which called for an increased role of the EU in ICT and marks it as an integral component of sustaining the Single Market. The report advocates liberalising the telecommunications market (“The market will drive, it will decide winners and losers") and to give precedence to the private sector in advancing innovation in the ICT sector. In addition, the report proposes an action plan for establishing a partnership between the private and public sectors to carry Europe forward towards becoming an information society. The report was requested by the European Council and prepared by a high-level group chaired by Martin Bangemann, former European Commissioner for Industrial Affairs and Information and Telecommunications Technologies.

Innovation at heart of competitiveness​ discourse

The Lisbon Strategy marked another important step in European innovation policy, as innovation got a new role as the motor for economic change and growth. It intended to deal with the low productivity and stagnation of economic growth in the EU through the formulation of various policy initiatives to be taken by all member states. A translation of the Lisbon Strategy into concrete measures led to the extension of the Framework Programmes for Research and Technological Development into FP7, and the creation of European Technology Platforms (ETP) as well as Joint Technology Initiatives (JTI), which should both help to achieve the target of spending at least 3% of the Gross Domestic Product (GDP) for research and technological development.
In 2006, the EC published its communication ‘Putting knowledge into practice: A broad innovation strategy for the EU’. The launch of this strategy under the Finnish Presidency of the Council of the EU in 2006 put greater emphasis on demand-driven innovation, whereas the previous EC communication​ ‘More Research and Innovation’ (2005) addressed supply-driven innovation in a more traditional way. The ideas presented in the broad-based innovation strategy are closely linked to the conclusions of the report on ‘Creating an Innovative Europe’, which was prepared by the High-Level Expert Group chaired by the former Finnish Prime Minister Esko Aho and published in 2006. The central recommendation of the so-called ‘Aho report’ is that a pact for research and innovation ought to be created, a package of synchronised and simultaneous efforts, which require a strong political commitment at national and European level. To achieve this goal the Aho-report proposed to appoint coordinators who were able to consider at the same time various aspects, such as technology investment, infrastructure and provision of services. Another of the ‘Aho report’s’ main points is the creation of innovation-friendly markets in which businesses can launch new products and services very quickly. The report considers e-health, pharmaceuticals, energy, environment, transport and logistics, security and digital content as the top sectors in which more innovation-friendly markets could be created. An essential part of this concept is the use of the purchasing power of the public sector, which can drive demand for new and innovative technologies and services through public procurement. Finally, the ‘Aho report’ also makes a plea for the mobility of the European workforce, ideas and financial assets. The 2006 EU innovation strategy widely took up the ideas proposed in the ‘Aho report’ and singled out ten priority actions, which the Competitiveness Council finally translated into nine strategic priorities for the future EU innovation policy in December 2006.

As a follow-up of the Europe 2020 strategy, the EC published the communication ‘Europe 2020 Flagship Initiative Innovation Union’ on 6 October 2010. The communication sets out 34 action points, which will form the EU innovation policy agenda for the next decade and hence also the policy framework for the European Framework Programme for Research and Innovation from 2014 to ​2020 (Horizon 2020). The communication sees innovation as a crosscutting policy with a high priority. In the current EC, no fewer than sixteen portfolios touch directly or indirectly upon innovation. Topics range from research, ICT, energy, health, environment, education, employment, Small and Medium Enterprise (SME) policy, competitiveness and internal market. A major change concerns the main responsibility for innovation policy, which has moved from the Directorate-General for Enterprise and Industry (DG ENTR) to the Directorate-General for Research and Innovation (DG RTD). However, DG ENTR is still responsible for ‘industrial innovation policy’ as well as for ‘SME policy’, including the Enterprise Europe Network (EEN), which was the only part of the Competitiveness and Innovation Programme (CIP) in which Switzerland participated from 2007 to 2013.


Horizon 2020: 'from research to retail'

Innovation is embedded throughout two out of the three parts of Horizon 2020: ‘Industrial Leadership’ and ‘Tackling Societal Challenges’. Intelligent Energy Europe (IEE) is part of the energy theme in the Specific Programme ‘Tackling Societal Challenges’ of Horizon 2020. The ICT Policy Support Programme (ICT-PSP) is carried out under the ICT theme in the ‘Leadership in enabling and industrial technologies’ part of Horizon 2020. The eco-innovation market replication projects (between 2007 to 2013 part of CIP) are placed under the ‘Climate action, resource efficiency and raw materials’ challenge of Horizon 2020. The European Institute of Innovation and Technology (EIT), created in 2008, is also be part of Horizon 2020. Furthermore, demonstration and market replication projects will be carried out in a new dedicated SME instrument, which is implemented under Horizon 2020. The SME instrument might have links to EEN. Switzerland has expressed its will to get associated to Horizon 2020 but, following the adoption of the initiative against mass immigration on 9 February 2014, the negotiations towards an association have been suspended. Pending an association, Switzerland will have the status of third country. Up-to-date and detailed information on that matter can be found on th​e website of the  Swiss State Secretariat for Education, Research and Innovation (SERI). SERI has confirmed that it will draw up an interim solution for the direct financing of researchers in Switzerland in partnerships and individual projects under Horizon 2020. 


EEN however is funded under the European Programme for the Competitiveness of Enterprises and Small and Medium-sized Enterprises​ (COSME). The €1.4 billion of the COSME budget are intended to be allocated for financial instruments for both equity and debt. Financial instruments will be the most important activity of the programme (59% of the total budget). According to the EC, there will be no overlap but complementarity with the financial instruments of Horizon 2020. Most likely financial instruments of Horizon 2020 will be exclusively used for financing research and innovation projects, whereas financial instruments in COSME will cover a broader range of entrepreneurial activities. Switzerland has decided to not enter into negotiations to get associated to COSME, but will stay part of EEN.