New Challenges for Science and Industry
June 4, 2014
The coming years will test how closely science and industry in Poland are able to collaborate. The test will be a difficult one. Without a symbiotic and effective partnership, it will not be possible to create a modern economy.
Close cooperation is especially important at a time when the European Union is rediscovering the importance of innovative industry in the growth of economies—a focus that some commentators have described as the “reindustrialization” of Europe. This issue is receiving increasing attention in the media in both Europe and beyond. The European Commission has set a target for member states under which their industrial and manufacturing sectors are expected to generate a specific percentage of national income by 2020. Poland should have no difficulty meeting this target. Unlike in many other European countries, the industrial and manufacturing sectors remain essential components of the Polish economy.
However, this new industrialization policy poses increasingly stringent requirements when it comes to energy consumption and environmental protection. There is a need for new, improved low-emission and low-carbon technologies. Many traditional technologies need to be upgraded. Keeping the coal sector alive and kicking is worth the effort, but clean coal technology is needed. The same applies to the chemical industry, which must meet new and stricter environmental requirements.
In addition to issuing appeals to member states, the European Commission has created various financial instruments to promote the development of innovative industry. These include Framework Programmes, among them the seven-year Horizon 2020 program for 2014-2020.
The Horizon 2020 program is made up of three main pillars. These are Industrial Leadership, Excellence in Science, and Societal Challenges. The first pillar, with an allocation of around 17 billion euros, is based on research and innovation agendas to be defined by industry and business, and its main aim is to take advantage of private sector investment. This approach will include efforts to promote innovative projects and groundbreaking solutions. Businesspeople who want to increase the level of innovation in their companies will be able to participate in the program. They will have access to debt financing instruments such as loans and guarantees, and to capital financing instruments including venture and mezzanine capital.
Building a strong base for an innovative European industry through the use of Key Enabling Technologies—in fields such as information and communications technology (ICT), nanotechnology, biotechnology, micro- and nano-electronics, photonics, astronomy, advanced materials and advanced manufacturing and processing technologies—will contribute to the emergence of more active small and medium-sized enterprises (SMEs) and to the creation of new jobs on the European labor market.
A new financial instrument intended for SMEs called the SME Instrument is particularly interesting. It aims to provide support to all kinds of innovation, including grass-roots innovation. The SME Instrument is a relatively simple and easily accessible funding program. SMEs do not have to create consortiums in order to apply for funds. In other words, businesspeople with an interesting idea will be able to apply for financial support without looking for partners for a given project.
The second pillar of Horizon 2020, Excellence in Science, has an allocation of 2.7 billion euros. This pillar aims to finance international research that improves existing technologies or leads to the development of new Future and Emerging Technologies (FET). The Excellence in Science pillar will sponsor joint technology initiatives to be established as long-term public-private partnerships that will be managed “within dedicated structures” based on Article 187 of the Treaty on the Functioning of the European Union (TFEU). Under this article, “the Union may set up joint undertakings or any other structure necessary for the efficient execution of Union research, technological development and demonstration programmes.” Examples of such initiatives include Innovative Medicines Initiative 2, Fuel Cells and Hydrogen 2, Clean Sky 2, Bio-Based Industries, Electronic Computers and Systems, and SESAR.
Even though the Horizon 2020 program has an impressive budget of 75 billion euros, all member states and associate members will be striving to secure as much funds for themselves as possible, especially as the economic slowdown in EU member states has caused cutbacks in R&D spending.
The Horizon 2020 program provides opportunities to continue work on the European Research Area (ERA). Originally, this was supposed to be established by 2014, but economics and politics have dampened the optimistic forecasts of a few years ago. The rules on participation in Horizon 2020 (there must be beneficiaries from at least three member states) are designed to foster international cooperation and encourage a focus on issues common to all Europeans.
Meanwhile, Polish companies must continue to set aside their own funds for research and development, and not just count on European funds. However, the level of involvement of Polish businesses in R&D, as illustrated by the Business Expenditure on Research and Development (BERD) indicator, though rising, is still lamentably low. In 2012, Polish businesses spent no more than zl.4 billion on R&D, according to Poland’s Central Statistical Office (GUS). The officially approved BERD target of 0.85 percent of GDP in 2020 will be difficult to achieve without introducing special incentives for businesses. The good news is that, after years of making appeals, the Polish business community has finally managed to convince decision makers to make attempts to develop a system of tax incentives modeled on those in other EU countries.
As a country that is still developing and trying to catch up with Western Europe, Poland benefits from a generous helping of European funds. Under an agreement cleared with the European Commission, Poland will allocate 10.5 billion euros for strengthening research and innovation and the technological development of enterprises. Most of these funds will be spent on business innovation.
Prof. Jacek Guliñski
Undersecretary of State at the Ministry of Science and Higher Education