CULT questions to the European Institution of Innovation and Technology :04/12/2019

On Wednesday I had the opportunity to ask questions of the European Institution of Innovation and Technology (EIT) as part of my role as the rapporteur for CULT on the Strategic Innovation Agenda (SIA). Put simply I am reviewing the impacts of the new proposals for EIT to continue in a wider capacity and am giving my considered opinion about this.

The SIA defines the priority fields and strategy for the EIT for the seven-year period concerned, in line with the objectives and priorities of Horizon Europe, and shall include an assessment of its socioeconomic impact and its capacity to generate the best innovation added-value.

As part of this I get to scrutinise the plans and raise questions within CULT and ITRE hearings about the plans for the commissioners to then respond to. This is my first legislative file and therefore a very interesting development for me, especially in light of the committees that I am involved with.

At CULT I had 3 questions (in Bold) that I felt needed answering and Vivienne Hoffman responded (in Italics here).
1. Could the European Commission please elaborate on the Higher Education Institutions involved in EIT and KIC activities?
My question was; “There’s a more than doubling of ambition for involvement of higher education institutions, of which 450 there’s a small line that says they will come from new action on education and it would be very interesting to have more information about what these few words mean. There is a concern that I’ve had expressed to me that we are going to be trying to interfere with education systems in Member States….

I’d also like to ask whether given the increase in budget, whether expanding, although I love the idea of education institutions being involved obviously this is something we support and we are CULT after all, but is 750 perhaps slightly over ambitious? And mostly what is it that is going to change what are you planning for the Member States?”

The response from EIT

Thank you for your support, we believe indeed as you said it out Mrs. Chairwoman that those industries have a huge potential in bringing innovations to the market. On the other hand, despite the high potential that there are still many barriers that need to be overcome. Market fragmentation and others and also the CCIs are strongly embedded in local and regional ecosystems but we also believe that the innovators and business creators in this sector still lack entrepreneurial skills and would deserve to be further supported within these innovation ecosystems. Also there’s no other potential partnership proposed so far that would address this. Now on education we strongly believe that this side of the triangle needs to be strong so that the other two sides of the triangle can continue to be strong and so far the education action has not deployed its full potential. Of course we would not interfere in the organization of the education system so we are strictly respecting the principle of subsidiarity. Nevertheless, what we want to set up is an offer that will be provided to higher education institutions across Europe, which also means that, the KICs should open up to new partners in the area of higher education. I think this is a very important goal to achieve.” VH

2. On the 2 new proposed KICs first KIC in the field of Cultural and Creative Industries (CCI) is proposed to be launched in 2022 …and the second new KIC could be launched in 2025 with a call to be published in 2024. …is that fully sustainable? Maybe we should wait with the decision on the second new KIC once all the KICs are fully financially sustainable?
“on… culture on creative industries KIC, this is a great idea … a very constructive idea, creative industries in the UK bring in 10 times the revenue of fishing, so it is a very important sector of Industry and there is a lot of potential for us to spread it out to spread the success out to other member states. However, having two KICs being proposed at the same time, to come on stream two or three years apart, is that actually sustainable? If we look at the first KICs, the three that were that have been through the full 14 year cycle, only one of them is currently financially sustainable according to the new model. The others are successful in their own ways I’m not trying to decry the actions of the EIT digital in the EIT climate, they’re both doing as far as I understand it, very good work but they are not financially sustainable. They have zero revenues, they have other investments but can we really be proposing the CCI KIC in 2022 and then another in 2025? That feels like an awful lot of money before we’ve actually worked out the financial model. Should we.. postpone the second new KIC for a few years yet?”

Their response: “On financial sustainability for us, this is a very important principle. The principle was there in the EIT regulation from the outset, but now we clarify it because we don’t think that the idea is to finance KICs forever. The idea is to help them strive and find other sources of finances over the years. Now we also don’t want the KICs to be disconnected from our European Union initiatives after this 15 year period and that’s why we have also proposed ways to maintain a relationship and possibly also possibilities for those KICs to participate in competitive calls after this period.

“…if we are ambitious in terms of setting up new KICs and we say that the second one should be proposed further down the line in the MFF period for this to happen, of course we need full financial sustainability of the first generation KICs in 2024. And that’s also why we have proposed in the new package a decrease in co-funding rate for the funding of the KICs to incentivise them further to search for financial sustainability and they all have different models. … I think an important clarification in our proposal on the regional dimension which is very important we fully agree the EIT should increase Geographic and out region and spread and not be concentrated in the few countries.

“And this is why we have proposed that the RIS scheme becomes compulsory …EIT has a regional innovation scheme since 2014. We want to strengthen it we want to make it compulsory as part of the KICs long term strategies and we also propose that at least 250 million will be earmarked for the RIS activity. Over the duration of the program in addition to 20% of the budget allocated to the new education action that would also go to higher education institutions from modest and moderate innovators on the types of industrial partners that the KICs include the places that it should be a variety bigger companies, SMEs, of course from all the different sectors. Now when it comes through the relationship with European universities the EIT KICs community has already developed its expertise in areas that are closed also to the objectives of the European universities, like innovative pedagogy in digital technologies, entrepreneurship and others and so we think that this will be a very complementary to the European universities initiative on social entrepreneurship. Yes, indeed our proposal for DSII includes reference to social innovation when it comes to the creative and cultural industries KIC.” VH

3. What about the appropriate mechanisms to involve third countries in the KICs… EIT director Martin Kern has said that it is unlikely that the European Institute of Innovation and Technology (EIT) will be able to expand much beyond the borders of the EU, meaning partner institutions and companies in the UK will be affected by Brexit….What will this impact be?
The climate KIC has a key National Centre in London and understanding, as Martin Kemp has declared, the EIT Director, he said it’s unlikely that the EIT will be able to expand much beyond the borders of the EU, which is quite understandable. What will happen to the partner institutions and companies in the UK? How will they be affected by Brexit?”

“Finally, on Brexit the rule is the deregulation foresees that at least 2/3 of the KICs partners must come from new member states so in principle none of the KICs would become ineligible due to this criterion. But if the UK leaves without a withdrawal agreement the UK partners can continue to take part in KIC activities but would cease to be eligible for funding. So they would remain the country main KIC partners on a self-funding basis provided that is proportion of 2/3 of the KICs coming from new member states is maintained thank you” VH

Overall there is a positive working response and an ability for flexibility, however for new KICs we will need to ensure this is within their parameters and percentages with the other contributors. It is positive that there is a recognition of the UK contribution to the EIT initiative. We need to ensure that we remain part of this “Brighter Future”

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