STOA WorkshopEU mission-oriented researchand innovationpolicyParticipants' booklet

EPRS | European Parliamentary Research ServiceScientific Foresight Unit (STOA)

PE 614.545

STOA Workshop

EU MISSION-ORIENTED RESEARCHAND INNOVATION POLICY

Reflections towards the next Framework Programme

24 January 2018, 14:30 – 17:00European Parliament, Brussels, room PHS 7C050

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Prepared by Gianluca Quaglio and Carys Lawrie, STOA Secretariat.

Available at: http://www.europarl.europa.eu/stoa/cms/home/workshops/ripolicy

Join the conversation on Twitter by using the hashtag and by tweeting at #ri4eu

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CONTENTS

1. Programme...............................................................................................................................................4

2. Introduction and aim of the workshop ..............................................................................................5

3. WELCOME...............................................................................................................................................7

Jerzy BUZEK, MEP & ITRE Chair .......................................................................................................7

4. SETTING THE SCENE..........................................................................................................................8

Christian EHLER, MEP & STOA Panel Member .............................................................................8

5. SPEAKERS...............................................................................................................................................9

5.1. Kurt VANDENBERGHE ............................................................................................................... 9

5.2. Mariana MAZZUCATO .............................................................................................................. 10

5.3. William D. PHILLIPS ................................................................................................................... 11

6. PANELLISTS.........................................................................................................................................12

6.1. Key points for the discussion...................................................................................................... 12

6.2. Luc SOETE, Moderator ................................................................................................................ 12

6.3. Luke GEORGHIOU...................................................................................................................... 13

6.4. Martin KERN................................................................................................................................. 14

6.5. Sylvia SCHWAAG SERGER ....................................................................................................... 15

6.6. Daria TATAJ.................................................................................................................................. 16

7. CLOSING REMARKS.........................................................................................................................17

Patrizia Toia, MEP & ITRE Vice-Chair ............................................................................................ 17

8. ABOUT STOA.......................................................................................................................................18

8.1. Mission ........................................................................................................................................... 18

8.2. Administration.............................................................................................................................. 19

9. ANNEX: Towards a Mission-Oriented Research and Innovation Policy in the EuropeanUnion.......................................................................................................................................................20

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1. Programme

14:30 – 15:00

WelcomeJerzy BUZEK, MEP & ITRE Chair

Setting the sceneChristian EHLER, MEP & STOA Panel Member

15:00 - 15:50 PRESENTATIONSSpeakers:

Towards a mission-oriented approach at EU levelKurt VANDENBERGHE, DG Research and Innovation, European Commission

The rate and direction of innovation: mission oriented policiesMariana MAZZUCATO, University College London, UK

A weird and wonderful, mission-oriented R&I program: Quantum technology—what is it? Why isit different from anything that came before?William PHILLIPS, Joint Quantum Institute, USA

15:50 - 16:50 ROUNDTABLE DISCUSSION WITH SPEAKERS AND PANELLISTS

Moderator: Luc SOETE, Maastricht University, The Netherlands

Panellists:

Luke GEORGHIOU, Manchester University, UKMartin KERN, European Institute of Innovation & TechnologySylvia SCHWAAG SERGER, Lund University, SwedenDaria TATAJ, Tataj Innovation, RISE High-Level Group

16:50 - 17:00 CLOSING REMARKS

Patrizia TOIA, MEP & ITRE Vice-Chair

17:00 - 17:30 NETWORKING RECEPTION

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2. Introduction and aim of the workshop

A recent report carried out by an independent group of experts on maximising the impact of EUresearch and innovation (R&I) programmes highlights that, in the last twenty years, two thirds ofeconomic growth in industrialised countries is attributed to R&I. Its recommendations focus onmaximising the impact of EU investments in R&I in order to increase prosperity and solve ourbiggest societal challenges. [1]

The report suggests that to become an innovation leader and maximise the impact of itsintervention, the EU should not spread its investments in R&I too thinly. Instead, it shouldprioritise investing in areas where the EU added value is greatest in terms of the degree of riskinvolved and where the benefits of economies of speed, scale and scope can be reaped. Othersectorial policies – in areas such as industry, agriculture, energy, transport, ICT, culture – shouldbe fully engaged with innovation policymaking.

The post-2020 EU R&I programme should thus translate global societal challenges (social,economic, environmental, etc.) into a limited number of large-scale R&I ‘missions’. These woulddefine expected impacts across an entire portfolio of activities, rather than at the level of individualcall topics. The UN Sustainable Development Goals should serve as a global reference frameworkfor defining Europe’s R&I missions. [2]

Missions should have a breakthrough or transformative potential for science, technology, industryor society. It should be possible, within the appropriate timeframe, to ascertain to what extent themission has been accomplished. Having set the direction and expected impact, missions should beunderpinned by non-prescriptive calls for proposals that allow applicants to choose the fundinginstrument they need; for instance research projects, co-funded activities, prizes, financialinstruments or public procurement.

Instruments should support missions, not the other way around. Partnerships (public-private andpublic-public) with industry, SMEs, universities, research centres, civil society, foundations, publicauthorities and so on, should be taken forward in as far as they mobilise joint investment inestablished missions, through a simple and flexible co-fund mechanism.

The above mentioned report has identified some potential missions for the post-2020 EU R&Iprogramme, namely: i) achieving a Europe free of plastic litter by 2030; ii) understanding andenhancing the brain by 2030; iii) producing steel with zero carbon in Europe by 2030; iv) buildingand operating the first quantum computer in Europe.

The Lamy report calls on the European institutions to launch a wide stakeholder debate amongcitizens, scientists and innovators on potential future R&I missions for Europe. Set R&I missionsthat address global challenges and mobilise researchers and innovators to realise them appeartherefore an important topic for the future of the EU research. The objectives of the proposedworkshop go exactly in this direction.

In this event, strategies for building a mission-oriented approach in EU R&I policies and designinga mission-oriented approach in the future EU Framework Programme will be explored fromdifferent perspectives.

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References

1. LAB – FAB – APP. Investing in the European future we want. Report of the independent highlevel group on maximising the impact of EU research & innovation programmes. Available at:http://ec.europa.eu/research/evaluations/pdf/archive/other_reports_studies_and_documents/hlg_2017_report.pdf

2. United Nation. Sustainable Development Goals. Available at:https://sustainabledevelopment.un.org/?menu=1300

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3. WELCOMEJerzy BUZEK, MEP & ITRE Chair

Jerzy Buzek is a Polish politician, former Prime Minister ofPoland and former President of the European Parliament. MEPsince 2004, he is currently chairing the EP's Committee onIndustry, Research and Energy (ITRE) and the Conference ofCommittee Chairs.

He was born on 3 July 1940 in Śmiłowice in southern Silesia,now in the Czech Republic. Member of the EuropeanParliament since 2004, he was elected the European ParliamentPresident on 14 July 2009 with the biggest vote majority sincethe first direct elections in 1979. During his presidentialmandate which lasted until January 2012, Jerzy Buzek oversawthe transition from the Nice Treaty to the Lisbon Treaty and played a key role in finalising theratification process of the latter. Known for his activity on the energy front, together with JacquesDelors he launched the initiative of a European Energy Community, aimed at strengtheningenergy legislation and cooperation within and outside the EU.

Buzek was a rapporteur for the 7th Research Framework Program, for the Strategic EnergyTechnology SET Plan as well as for the EU Internal Energy Market. In 2013-2014 he chaired theHigh Level Reflection Group of the Energy Community which proposed a reform enhancing theoperation of this organisation.

In the 8th legislature he was elected Chair of the EP Committee on Industry, Research and Energyand appointed Chair of the Conference of Committee Chairs.Member of the 'Solidarność' movement from its early days; elected the Chair of the first nationalSolidarity Congress. Defending and advocating for human rights all over the world is an intrinsicpart of his parliamentary activity.

From 1997 to 2001, Jerzy Buzek served as a Prime Minister of Poland, introducing sweepingreforms in pensions, healthcare, local and regional administration, education and mining. Duringhis term in office, Poland acceded to NATO and made key steps towards its EU membership. InNovember 2012, prof. Buzek received the highest Polish state medal - the White Eagle Order - forhis contribution to Poland's democratic transformation, for scientific achievements and for politicalaccomplishments in Poland and in the international arena. He is a doctor honoris causa of numerousPolish and foreign universities as well as an honorary citizen of more than ten cities in Poland.

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4. SETTING THE SCENEChristian EHLER, MEP & STOA Panel Member

Dr. Christian Ehler is Member of the European Parliament since 2004. He was born on 17 August1963 in Munich, Germany. He holds a degree in journalism and economics as well as a PhD inpolitical science. Until 2010, Mr. Ehler held the position of Managing Director of Biotech GmbH.

In the European Parliament Mr. Ehler is a member of the Committee on Industry, Research andEnergy, the Subcommittee on Security and Defense and a substitute member of the Committee onForeign Affairs.

Mr Christian Ehler has served as the European Parliament's Rapporteur for the Horizon 2020 Rulesfor Participation and Clean Sky 2, as well as shadow for Juncker’s Investment Plan, EFSI.

He is the initiator of the ITRE working group on Horizon 2020 allowing a closer parliamentaryscrutiny of Horizon 2020’s implementation.

http://www.ehler.eu

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5. SPEAKERS

5.1. Kurt VANDENBERGHE

Direction for Policy Development and Coordination, DG Research & Innovation, EC

Kurt Vandenberghe is Director for Policy Development andCoordination at the European Commission's DG Research andInnovation since 1st February 2016. Before that, he was Director for'Climate action and resource efficiency' at DG Research andInnovation since July 2013.

He served in the Cabinet of Research Commissioner PhilippeBusquin (1999-2004) and as Head of the Cabinet of Janez Potocnik,who was Commissioner for Research and Innovation (2004-2009) andsubsequently for Environment (from 2010).

Kurt joined the European Commission in 1996 as co-ordinator of the Commission’s IntermodalTransport Task Force and of the Transport Research Programme. Before entering the Commission,Kurt worked for 4 years as a manager at Ernst & Young Association Management, where he setup, managed and represented international trade associations.

After reading French and Italian literature at the Katholieke Universiteit Leuven (KUL) andobtaining a degree in Public and International Affairs at the University Catholique de Louvain-la-Neuve (UCL), Kurt gained a Master of Arts degree in International Relations at the Johns HopkinsUniversity School of Advanced International Studies (S.A.I.S.) in Bologna, Italy and WashingtonD.C., US.

Key message

Horizon 2020, the world's largest multinational publicly-funded research and innovationprogramme, is a true European success story. With missions, we can take EU research andinnovation policy a step further and provide even better value to economy and society:maximising and demonstrating the impact of EU investment in response to global challenges,promote breakthrough and transformative innovation across disciplines, sectors and policies, andmobilise more and new stakeholders, public and private, to develop and deploy the solutions thatwe need for the future.

The EU added value of research and innovation is beyond doubt; missions will also give a publicface to European action in this area and encourage citizens to participate in experimentalinnovation.

European research and innovation missions hold the promise of better science and innovation,more impactful innovation policy and a Europe closer to the citizen.

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5.2. Mariana MAZZUCATO

Institute for Innovation and Public Purpose, University College London, UK

www.marianamazzucato.com | @MazzucatoM

Mariana Mazzucato (PhD) holds the Chair in the Economics ofInnovation and Public Value and is Director of the Institute forInnovation & Public Purpose, University College London (UCL).Mazzucato’s highly-acclaimed book The Entrepreneurial State:debunking public vs. private sector myths (Anthem 2013; PublicAffairs, 2015) was on the 2013 Books of the Year list of the FinancialTimes. She is winner of the 2014 New Statesman SPERI Prize inPolitical Economy , the 2015 Hans-Matthöfer-Preis and the 2018Leontief Prize for Advancing the Frontiers of Economic Thought. In2013 she was named as one of the '3 most important thinkers aboutinnovation' in the New Republic.

She advises policy makers around the world on innovation-ledgrowth and is currently a member of the Scottish Government’s

Council of Economic Advisors; the UN Sustainable Development Solutions Network LeadershipCouncil; and SITRA’s Advisory Panel in Finland. Her current research projects include twofunded by the EC Horizon 2020 programme: Innovation-fuelled, Sustainable, Inclusive Growth(ISIGrowth) and Distributed Global Financial Systems for Society (Dolfins) and new projects onRethinking Medical Innovation, funded by the Open Society Foundations, and on mission-orientedinnovation policies with the Inter-American Development Bank (IADB). She is co-editor of a newbook, Rethinking Capitalism: Economics and Policy for Sustainable and Inclusive Growth (WileyBlackwell, July 2016). Her new book The Value of Everything, will be published by Penguin (AllenLane) in 2018.

Key message

Many countries across the globe are pursuing growth policies that seek to be smarter, moreinclusive and more sustainable. My intervention will argue that the types of long-run strategicinvestments which such growth requires, means public policy must be justified, nurtured andevaluated in a different way. Instead of policies being motivated purely in terms of ‘fixing’ marketfailures and/or ‘system failures, policies can be justified and measured in terms of their ability tocreate and shape markets—with markets as outcomes of the interaction between public, privateand third sector actors. A market shaping process can benefit from understanding the lessons fromthe ‘mission oriented’ investments of the past aimed at technological and societal challenges—from putting a man on the moon—to those that are today tackling climate change. The talk willreflect on key questions which arise from mission oriented innovation: (1) how to envision thedirection of change, tilting rather than levelling the playing field; (2) how to create publicorganizations that can welcome the underlying uncertainty and discovery process; (3) how toevaluate dynamic mission-oriented and market creation policies; and (4) concrete ways in whichpublic and private can share both the risks and rewards underlying the innovation process—sothat ‘smart’ innovation-led growth can also produce ‘inclusive’ growth.

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5.3. William D. PHILLIPS

Joint Quantum Institute - University of Maryland and National Bureau of Standardsand Technology, USA

William D. Phillips is a physicist and leader of the Laser Cooling andTrapping Group at the Joint Quantum Institute, a cooperativeoperation of the University of Maryland and the United States’National Institute of Standards and Technology.

Dr. Phillips received his Ph.D. from the Massachusetts Institute ofTechnology in 1976; after two years as a postdoctoral researcher atMIT, he joined NIST (then the National Bureau of Standards) andinitiated a new research program to cool a gas of atoms with laserlight. His research group has been responsible for developing someof the main techniques now used for laser-cooling and cold-atomexperiments in laboratories around the world.

Their achievements include the first electromagnetic trapping ofneutral atoms, reaching laser-cooling temperatures within a millionth of a degree of AbsoluteZero, and the confinement of atoms in optical lattices. Atomic fountain clocks, based on the workof this group, are now the primary standards for world timekeeping. Phillips shared the 1997Nobel Prize in Physics "for development of methods to cool and trap atoms with laser light."

Key message

Quantum Mechanics, the theory describing the sub-microscopic world of atoms and molecules,was born with the 20th century. It changed our world-view, including our understanding ofReality itself. Quantum mechanics is fundamentally strange. It tells us that objects can besimultaneously in two places at the same time, or can have multiple, incompatible properties at thesame time. It tells us of circumstances where the properties of things do not exist before wemeasure them and of intimate connections between the fates of distant systems that seem to becompletely unconnected. These weird and wonderful features are not mere speculations; they aresolid, experimentally verified facts. Furthermore, this fantastic theory has enabled technologicaldevelopments that dominate the economic, social, and intellectual aspects of modern life.

Surprisingly, today’s amazing applications of quantum mechanics depend little on thefundamental weirdness of quantum mechanics. But now we are beginning a second quantumrevolution, a long-term academic-industrial collaboration, to exploit the truly weird andwonderful quantum features like “superposition” and “entanglement” in the way that 20thcentury technology exploited more ordinary quantum features, such as the fact that particlesbehave like waves. Among the expected results of this revolution are quantum computers capableof solving problems that are insoluble by even the most sophisticated, imagined descendants ofcurrent computers; quantum simulators that can understand and design undreamed-of newmaterials; and sensors whose measurement capabilities were once inconceivable.

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6. PANELLISTS

6.1. Key points for the discussion

The discussion will focus on the following three core questions put forward in the ESIRMemorandum, the Executive Summary of which is included as Annex in this booklet:

First, why is there today a need for a “mission-oriented” R&I policy in Europe? In what sense doesit differ from current R&I policies: whether at European level such as H2020 or within MemberStates?

Second, what exactly is meant by “mission-orientation”? Could you give specific examples ofmission-oriented research or mission-oriented innovation policy? How is it different from thecurrent notion of societal challenges as within H2020?

Third, how could one implement a mission-oriented R&I policy? How to have a real impact andmotivate firms exploiting the EU’s wide market creation potential? How to design an effectivemission-oriented policy? How to monitor and measure progress, while also learning from mistakesand providing interactive feedback?

6.2. Luc SOETE, Moderator

Maastricht University, The Netherlands

Luc Soete (15 September 1950, Brussels) is chairman of the “Economicand Social Impact of Research” (ESIR) independent expert groupestablished by the European Commission in October 2017. He iscurrently honorary Professor of Economics at Maastricht University, afellow of the Royal Dutch Academy of Sciences and a member of thesupervisory board of the Technical University of Delft. He waschairman of the Research, Innovation and Science Expert (RISE) groupfor Commissioner Carlos Moedas till September 2017.

Professor Soete has widely published on the theoretical, empirical andpolicy analysis of innovation and technological change. In 1988, hefounded the Maastricht Economic Research institute on Innovationand Technology (MERIT), which became integrated in 2005 intoUNU-MERIT. From September 2012 till September 2016, he was

Rector Magnificus of Maastricht University.

Before taking on the Rectorship, he was Director of the United Nations University research andtraining institute UNU-MERIT and Dean of the Maastricht Graduate School of Governance. In2007, he received the Belgian reward Commandeur in de Kroonorde, in 2010 a Doctor HonorisCausa from the University of Ghent, in 2013 from the University of Liège and in 2016 from theUniversity of Sussex.

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6.3. Luke GEORGHIOU

University of Manchester

Professor Luke Georghiou is the University’s Deputy President andDeputy Vice-Chancellor. From 2010 to 2017 Luke was responsiblefor the University’s research strategy and its implementation anddoctoral training. He continues in his new role to be responsible forbusiness engagement and commercialisation activities. He is activein research and policy advice to governments and business withcurrent work on innovation management, public procurement andinnovation and evaluation of the national demonstrator project forInternet of Things (CityVerve).

Luke is a member of RISE, the European Commissioner forResearch and Innovation’s high-level policy advisory group. He haschaired and been a member of several high-level inquiries andadvisory bodies, including being rapporteur of the influential Aho Group report to Europeanleaders, 'Creating an Innovative Europe' which put demand-side innovation policy onto thepolitical agenda. Luke is currently a member of the Board of Directors of Manchester SciencePartnerships, the UK’s largest science park company. Since 2016 he has chaired the SteeringCommittee of the European Universities Association Council for Doctoral Education. He waselected to the Academia Europaea in 2011. He has published extensively in leading outlets.

Key message

We may define challenges as the broader social problem, aim or benefit that is being sought, whilea mission represents a more narrowly defined package of activities that will deliver a verifiableresult on a planned timescale that represents clear progress against the challenge. It is important tomaintain traceability between the mission and the wider challenge so that the benefits beingdelivered are visible and accountable to citizens. Both must be expressed in terms that relate to andengage citizens. Achievement of granularity and focus will by definition exclude parts of theconstituency (particularly in the scientific community) and needs courage. While the scientificgranularity of a mission may be narrow it should have broad public meaning.

The likely initial number of missions will probably be less than ten. To gain widespread support aportfolio will be needed covering key socio-economic domains. Those chosen will need to bemissions where innovation policy is a substantial part of the solution but complementary measuresin areas such as regulation, procurement, training and public investment will also be needed.Missions will need a new governance to be able to align multiple mechanisms and domains. AChief Executive of personal high standing will allow doors to be opened for them (typically an ex-high-level corporate CEO or political figure). Multi-level governance will be needed. A frameworkfor accountability and evaluation is needed with short, medium and long-term targets so thatdelivery is more than a promise. The power to stop unpromising activity and reallocate resourcesis essential.

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6.4. Martin KERN

European Institute of Innovation & Technology (EIT)

Martin KERN has been the Interim Director and Chief OperatingOfficer at the European Institute of Innovation & Technology (EIT)since 1 August 2014. Prior to joining the EIT, he worked at theEuropean Commission for fifteen years in a variety of posts, mainlyin the area of enlargement policy, having started his career with ashort stint at the United Nations Economic Commission for Europe.

Working for the EU he held a variety of positions, the latest beingHead of Operations at the EU Delegation to Serbia, where hecoordinated the programming and implementation of EU funds tobring Serbia closer to EU accession. Previously he worked as countrycoordinator for financial assistance for the Turkey team in DGenlargement. He started his career in the EU in Lithuania and

Estonia, working in the EU Delegations and helping the two countries join the EU.

Key message

The EIT is a unique EU initiative tasked with tackling Europe’s structural weaknesses ininnovation capacity as well as its ability to use its research and education qualities in deliveringnew services, products and processes and consequently also boost growth and jobs. The EIT hasbeen addressing these issues by supporting the development of dynamic, mission-oriented, pan-European partnerships integrating partners from higher education, research and innovation,allowing innovative products and services to be developed, new companies to be started, and anew generation of entrepreneurs to be trained.

There are currently six such EIT Innovation Communities (EIT Climate-KIC, EIT Digital, EITInnoEnergy, EIT Health, EIT Raw Materials, and EIT Food), each focused on a different societalchallenge, with an additional two to be selected in 2018 (EIT Manufacturing and EIT UrbanMobility).

EIT Innovation Communities are set up in areas which offer a true innovation potential and which,due to their magnitude and complex nature, can only be addressed through a cross-disciplinary,cross-border, and cross-sectoral approach. The EIT ensures the achievement of market and societalimpact, based on a results‐oriented and impact‐driven approach.

The EIT is an integral part of the Horizon 2020 Framework Programme for Research andInnovation. The effectiveness of the EIT’s innovation activities has been well recognised as a modelfor European innovation in its Mid-Term Evaluation Report published in October 2017. No otherbody or instrument in the EU fully integrates business, research and education or has the size anddiversity enjoyed by the EIT.

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6.5. Sylvia SCHWAAG SERGER

Lund University, Sweden

Professor Sylvia Schwaag Serger has an MA in InternationalRelations from the Johns Hopkins School of AdvancedInternational Studies (SAIS) and a PhD in economic history fromthe London School of Economics and Political Science. Prior tobecoming Deputy Vice Chancellor, she was Executive Director forInternational Strategy at the Swedish Government Agency forInnovation (VINNOVA). She has run an independent think tank onthe knowledge economy, worked as Swedish Science Counselor inBeijing (2005 and 2007) and as analyst for the Swedish government.She has been commissioned as expert by the EuropeanCommission, the World Bank and the OECD. During 2015 and 2016 she was senior advisor at theSwedish Prime Minister’s Office for Strategic Development. Schwaag Serger is member of theAustrian Council for Research and Technological Development, chairperson of the SwedishFoundation for Internationalization of Higher Education and Research and member of theInternational Advisory Board of the Norwegian Research Council. She has served on the board ofthe University of Uppsala and on the Swedish Government Expert Commission on Research.Currently, she is a member of the Expert Group on the Economic and Societal Impact of R&I(ESIR).

Key message

Europe has mature and overall well-functioning organizations for funding and carrying outresearch. However, our organizations and institutions have proven less successful in designingand implementing solutions to some of our most pressing problems – such as combating pollutionand climate change. Technology or research alone will not solve these problems. Addressing ourgreatest societal challenges will require cross-disciplinarity, new instruments, cooperations,markets and institutions, as well as active involvement of citizens.A fundamental challenge is that we do not know today which technologies, disciplines, countries,sectors or actors will provide the relevant solutions. Thus, solving our problems will also requirerisk-taking and experimentation, not only by companies but also in and by the public sector withthe implicit acceptance that this will result in some failures. The Swedish innovation agencyVinnova's “Challenge-driven innovation” programme combines a demand-driven challengeperspective with a non-prescriptive approach. A three-stage approach has enabled scale-up ofsuccessful projects as well as it has lowered the threshold for newcomers. The programme couldprovide inspiration in developing the challenge/mission driven part of FP9. If successful, achallenge-driven design would: Allow for collaborations cross disciplines, and between sectors, with flexibility to adjust for

scope and participating stakeholders. Actively involve civil society, the public sector and businesses, ensuring impact in society,

by addressing real needs and creating new markets. Address potential policy, regulatory and other barriers on EU level. Ensure broad implementation, combining advanced techniques and end-users across

Europe.

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6.6. Daria TATAJ

Tataj Innovation, RISE High-Level Group

Daria Tataj is a strategy advisor, board member andentrepreneur. In 2017 she was appointed as Chairwoman ofthe RISE High-Level Expert Group. She also advises theWorld Economic Forum, governments, multinationalcompanies and start-ups. Her book Innovation andEntrepreneurship. A New Growth Model for Europebeyond the Crisis was endorsed by the Holberg Prizewinner Manuel Castells as ‘a fundamental, innovative bookon innovation that will reshape the way we think aboutinnovation and may yield the most needed policy lessons

for a new model of growth in the aftermath of the economic crisis’.Dr. Tataj was one of the architects of the European Institute of Innovation and Technology and itsKnowledge and Innovation Communities serving for six years as an Executive Member of the EITfounding Board. Daria is the CEO of Tataj Innovation, a strategy consulting practice. She foundedthe company with a mission to help companies and governments build entrepreneurialecosystems. An alumna of the World Economic Forum Global Agenda Council, recognized as a‘Social Innovator 2014’ in Poland, member of Los 100 de COTEC in Spain, she has been recognizedas one of the emerging global woman business leaders by FORTUNE Magazine, US Department ofState and Vital Voices Global Partnership. She currently lives and works in Barcelona.

Key message

To increase productivity and create value, businesses and governments need to innovate. In a fastchanging world where old economies have broken down, radical transformation of the Europeaneconomy and society triggers equally radical transformation of the entire innovation landscape. Itaffects research, education, innovation and entrepreneurship, the four building blocks of aninnovation ecosystem. In the network economies these building blocks must be interconnected inthe real and in the virtual worlds: tightly-knit locally and loosely-coupled globally. Good publicpolicies can nurture these networked environments for starting and scaling up entrepreneurialprojects and success manifests itself when innovation hubs attract globally scarce resources:knowledge, talent and finance. Thus value is created both for profit and for society.

While the model of the Knowledge and Innovation Communities set up by the EIT is just onepossible way to transform networked innovation ecosystems, new policies should learn from thisexperiment: New policies should stimulate collaboration and open innovation. New policies should recognize that entrepreneurship is often the missing link in the

European ecosystem and encourage a cultural and systemic transformation nurturingentrepreneurial firms, venture capital, intrapreneurship, and a more entrepreneurial statewith trust-based governance models.

New policies should transform European universities to help young people innovate, takerisks, fail and learn fast, and if they decide to become born-global entrepreneurs, help theirfirms innovate and stay in Europe.

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7. CLOSING REMARKS

Patrizia Toia, MEP & ITRE Vice-Chair

Patrizia Toia studied Political Science at the University of Milan. She worked as the Director of thePlanning Service at Lombardy Region. She was regional councillor in Lombardy, with differentresponsibilities (Health, Budget).

She was a Member of the Chamber of Deputies and in 1996 she was elected at the Senate of theRepublic. She held various institutional positions: Undersecretary of State for Foreign Affairs withresponsibility for Latin America, Asia and Oceania, Relations with the United Nations, HumanRights, Migration and Italians abroad.

In 1999 she was appointed Minister for European Affairs and Minister for Relations withParliament.

In 2004 she was elected at the European Parliament, confirmed in 2009 and 2014. A member of theGroup of the Progressive Alliance of Socialists and Democrats (S&D), she is the Vice-Chair of theCommittee on Industry, Research and Energy.

She is also a member of the Delegation for relations with Belarus and the Delegation to theEuronest Parliamentary Assembly and a substitute member of the Committee on Development.

She is the Head of the Italian delegation of the S&D Group, Partito Democratico.

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8. ABOUT STOA

8.1. Mission

The Science and Technology Options Assessment (STOA) Panel forms an integral part of thestructure of the European Parliament. Launched in 1987, STOA is tasked with identifying andindependently assessing the impact of new and emerging science and technologies.

The goal of its work is to assist, with independent information, the Members of the EuropeanParliament (MEPs) in developing options for long-term, strategic policy-making.

The STOA PanelThe STOA Panel consists of 25 MEPs nominated from the eight permanent parliamentarycommittees: AGRI (Agriculture & Rural Development), CULT (Culture & Education), EMPL(Employment & Social Affairs), ENVI (Environment, Public Health & Food Safety), IMCO (InternalMarket & Consumer Protection), ITRE (Industry, Research & Energy), JURI (Legal Affairs), LIBE(Committee on Civil Liberties, Justice and Home Affairs) and TRAN (Transport & Tourism).

Mr Ramon Luis Valcarcel Siso MEP is the European Parliament Vice-President responsible forSTOA and member of the Panel. The STOA Chair for the second half of the 8th legislature is EvaKaili, with Paul Rübig and Evžen Tošenovský elected as 1st and 2nd Vice-Chairs.

The STOA ApproachSTOA fulfils its mission primarily by carrying out science-based projects. Whilst undertaking theseprojects, STOA assesses the widest possible range of options to support evidence-based policydecisions. A typical project investigates the impacts of both existing and emerging technologyoptions and presents these in the form of studies and options briefs. These are publicly availablefor download via the STOA website: www.europarl.europa.eu/stoa/.

Some of STOA's projects explore the long-term impacts of future techno-scientific trends, with theaim to support MEPs in anticipating the consequences of developments in science. Alongside itsproduction of 'hard information', STOA communicates its findings to the European Parliament byorganising public events throughout the year.

Focus areasSTOA activities and products are varied and are designed to cover as wide a range of scientific andtechnological topics as possible, such as nano-safety, e-Democracy, e-Health and m-Health, bio-engineering, assistive technologies for people with disabilities, waste management, cybersecurity,smart energy grids, responsible research & innovation, etc.

They are grouped in five broad focus areas: eco-efficient transport and modern energy solutions;sustainable management of natural resources; potential and challenges of the Internet; health andlife sciences; science policy, communication and global networking.

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8.2. Administration

Director-General, Directorate-General for Parliamentary Research Services (EPRS)Anthony Teasdale

Director, Directorate C, Impact Assessment & European Added ValueWolfgang Hiller

Head of Unit - Scientific Foresight Unit (STOA)Theo Karapiperis

Head of Service - STOA SecretariatZsolt Pataki

Head of Service - Scientific ForesightLieve Van Woensel

AdministratorsPhilip BoucherMihalis KritikosNera KuljanicChristian KurrerGianluca Quaglio

AssistantsEmilia Bandeira MoraisSerge EvrardRachel ManirambonaMarie MassaroDamir Plese

TraineesNada AlkhayatCarys Lawrie

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9. ANNEX

Towards a Mission-OrientedResearch and Innovation Policy

in the European Union

EXECUTIVE SUMMARY

December 2017

ESIR - Economic and Social Impact of Research: is a group of independent experts set up by DG RTD ofthe European Commission in the fall of 2017 comprising Dominique Foray, Luke Georghiou1, Georg Licht,Patrick Llerena, Mariana Mazzucato, Ester Martinez-Ros, Andrea Renda, Sylvia Schwaag-Serger,Luc Soete (chair), Marzenna Weresa and as external members Richard Nelson and Jeffrey Sachs. As oneof its first tasks the group was asked to reflect on the economic rationale for a new Mission-OrientedResearch and Innovation Policy in line with the discussions starting at the EC on the development anddesign of a new Framework Programme, provisionally named FP9. The ESIR Memorandum outlines bothchallenges and opportunities of reviving research and innovation policies with a mission-oriented le

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Research and Innovation Policy: challenge led and mission oriented

Over the last decade, following the financial crisis, European economic growth has sufferedfrom a lack of private investment and increasingly uneven levels of competitiveness acrossmember states. In this context, the European Commission (EC) has continued to put forward itsambition to create economic growth not just in quantitative terms but also in qualitative terms:achieving growth which is smart, i.e. research- and innovation-based, inclusive and above allsustainable. The ambition to achieve a particular type of economic growth is an admission thatthe underlying rate of technical change bringing about productivity growth has not only a ratebut also a direction. Not all smart growth is inclusive, nor sustainable.

Acknowledging the direction of technical change requires, however, a quite fundamental re-thinking of the role of government and public policy in the economy. In particular, it requires anew justification of government intervention that goes beyond the usual one of the state as“repair shop”: the fixing of market failures as in the case of R&D investment subsidies or taxadvantages to fix private under- investment in R&D. Policy in this context will now also have tobe about co-creating and co-shaping markets; about new, sometimes experimental ways to assessintervention so that dynamic system wide spill-overs are better captured; and about creating newcriteria through which public policies can be justified, nurtured and evaluated.

In this context, research and innovation strategies can become the key pillars of Europe’s 2030strategy: achieving transformational change by identifying and articulating challenge-ledmissions that can galvanise innovation while transforming production, distribution andconsumption patterns across various sectors. Addressing such challenges – whetherdecarbonising the economy, develop sustainable agriculture or tackling modern care problems –depends crucially on investments by both private and public actors, and much more. Providing adirection for such investments is what mission oriented policy is about.

How missions could galvanize private R&D investment and boost innovation performance

The EU has been lagging in both innovation performance and R&D investments behind the USand Japan for decades. The soft, so-called Barcelona targets of 3% of GDP being spent onR&D within the framework of the ambitious Lisbon strategy of 2000 were never achieved. Onlysome Member States achieved the target, most saw the financial crisis putting severe pressure onmaintaining public support for R&D as budgetary priority. Whereas leading innovationcountries increased or at least maintained their level of public R&D, modest innovators andlaggards appeared no longer to be able to afford their level of public R&D. Hence, the crisisand its aftermath increased the heterogeneity between member states’ innovation capacity.

There are many possible reasons explaining the failure of Europe’s R&D or innovation system todeliver its expected economic impact. On the one hand, the fragmented nature of European publicresearch, defined as an area of “shared” policy responsibility between individual Members States(MS) and the European Commission (EC), is likely to represent significant “costs of non-Europe” in the area of research. On the other hand, differences in regulation or the lack of aEuropean, as opposed to 28 different national procurement systems is likely to representsignificant “costs of non-Europe” in innovation, increasing the costs of innovation and diffusionin Europe as opposed to truly single market countries such as the US, Japan or China.

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From this perspective, continuing a European R&D policy, aimed at providing financialsubsidies through Framework Programmes (FP) to facilitate European collaboration betweenpublic and private R&D actors or other financial “risk sharing” support instruments, will atbest only represent second-best solutions to the low level of private R&D investment inEurope. By contrast, a mission-oriented innovation policy should shift the attention from R&Dinputs to the full impact of the many complex systemic interactions between basic and appliedresearch, development, innovation, diffusion and the various accompanying spill-overs:“tilting” R&D and innovation investments of private firms as well as the public sector to ahigher level. By providing leadership in new areas, public investments that are mission orientedcan, by increasing the expectations of business of where future opportunities lie, better‘crowd-in’ the missing private investment.

This new Mission-Oriented research and innovation framework highlights on the one hand thecrucial policy distinction between subsidies and investments in the area of research andinnovation and on the other hand the particular role large, societal challenges could play inEurope co-creating new (local and global) markets. Contrary to previous FPs, the purpose of amission-oriented policy framework should now not be confined to use just public money toincentivise private firms to invest in R&I in general, but rather to orient/direct those investmentsto specific missions, targets, objectives, set by policy in close interaction with both the public andprivate research community, as well as the increasingly important voluntary sector (e.g.foundations involved in areas like health and energy) and organisations in civil society.

Reconceptualising the role of the public sector

Mission oriented public investments are not about de-risking and levelling the playing field,but tilting the playing field in the direction of the desired goals. This includes makingstrategic decisions on the kind of cross-cutting technological changes that will affect opportunitycreation across sectors (e.g. Internet, battery storage), the type of finance that is needed(including the role public investment banks can play in providing patient long-term strategicfinance to high risk and capital intensive projects, crowding in future business investment), thetypes of innovative firms (SMEs; new, young disruptive firms; spin-outs from incumbents) thatwill need extra support, the types of collaborations with other actors to pursue (includingcitizens groups, the third and private sector), and the types of regulations and taxes that canreward behaviour that is desired (e.g. rewarding long-term investments and reinvestment ofprofits rather than hoarding).

While public funding has always been important in the early, capital-intensive high-risk areasthat the private sector tends to shy away from, modern day missions can provide an even morefervent ground for an ambitious catalytic role for governments in creating and shaping marketswhich provide the basis for private investment. From an economic perspective, this approach islikely to increase the multiplier effect of public R&I investment, unleashing not only moreprivate R&I investment and market-creating innovation but also open up opportunities for newsynergies with other European public financing instruments (e.g. the Structural Funds or EFSI).In setting out such a new “MOP” framework, the core guiding principle should be on how tomaximise the economic impact of the next FP 9.

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From challenges to missions

The 21st Century is becoming increasingly defined by the need to respond to major social,environmental and economic challenges. These include environmental threats like climatechange, demographic, health and wellbeing concerns, as well as the difficulties of generatingsustainable and inclusive growth. These problems are ‘wicked’ in the sense that they arecomplex, systemic, interconnected, and urgent, requiring insights from many perspectives.

Mission oriented thinking requires understanding the difference between (1) broadchallenges; (2) sectors and/or technologies; and (3) concrete problems that differenttechnologies/sectors can address to tackle a challenge. Sectors/technologies define theboundaries within which firms, and more broadly agents operate, such as transport, health, orenergy. A challenge is a broadly defined area which a nation may identify as a priority(whether through political leadership, or the outcome of a movement in civil society).

A defining feature of many of the challenges European society is confronted with are global inreach. The very existence of the UN “Sustainable Development Goals” (SDGs), which should inour terminology be rather defined as “challenges”, is a clear manifestation of the global nature ofmost societal challenges. And the over one hundred ‘targets’ underlying the 17 SDGs canprovide insights for how such challenges can become concrete targets. The targets share onething in common: they all require, international cooperation. International cooperation will beimportant both in finding and in implementing solutions to missions, and include both supplyand demand side policies. Global cooperation opens up the possibility of science diplomacy as akey international collaboration tool.

Missions are broader than sectors but more specific than challenges. They involve tacklingchallenge led problems, focussing on specific problems such as reducing carbon emissions by x%over a specific year period. Their goal should be to galvanise investment and innovation acrossmultiple sectors (climate change cannot be fought by the energy sector alone, but alsotransport, nutrition etc) and actors (private, public, and third sector). As industrial strategymakes a return globally, a mission based approach can help to ensure that industrial policydoes not end up as merely a static list of sectors to support. Missions contributing to societalchallenges require transformation rather than handouts. Doing so, the particular interactions ofcross-sectorial innovation and trans-disciplinary basic and applied science are essential.Furthermore, given that the European project began as a project of peace and solidarity, missionsetting could well represent a strategic way to revive the spirit of Europe in one of its mostdelicate phases (rising populism across Europe, democracy and the rule of law, BREXIT). In sodoing it could be driven by ‘European values’ that are today not shared so widely by theTrump administration, neither by countries, including some MS struggling with the democraticprocess. These values include openness as argued in the RISE book but include also Europeanvalues such as equality, solidarity, public education and health care, security and socialwelfare. These are all values strongly embedded within the SDGs: one more reason to view theSDGs as a powerful point of departure for rethinking Europe’s efforts, instruments andapproaches to promote research and innovation. Obviously not all SDGs can be addressedthrough R&I policy, nor can they be achieved through just EU policy. But the EU can become theanchor point for global programming of international, European, national MS and regional/localR&I policies.

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Four such challenges appear central:o Clean energy and resource efficiency, combating climate change;o Developing digital technologies, including AI and cyber-security for better public services;o A healthy life at all ages (e.g. life style changes and prevention, affordable care, and

controlling deadly diseases such as dementia or cancer);o Sustainable cities, embracing circular economy and future mobility.

Defining and selecting missions

A key challenge for challenge led innovation is to both provide a direction, while also enablingand fostering bottom up experimentation and exploration. Mission-oriented policies shouldfocus on creating system-wide transformation across many different sectors. For example, theApollo mission to the moon required innovation across many different high-tech sectors (e.g.Aerospace) and low-tech sectors (e.g. Textiles). While the mission itself was top down in vision,it was the bottom-up experimentation around solving dozens of ‘homework problems’,involving different types of partnerships that galvanised the ensuing growth.

Missions that are not purely technological but more social, and hence complex (‘wicked’) innature, require even more focus on bottom up experimentation and inter-disciplinarity. Forexample, missions around sustainability and green growth will require changes in life-styles, andthe need to reinvigorate investment and innovation in maturing sectors like steel so that theirmaterial content is lowered. Transformational policies can lead to more ‘additionality’ inbusiness investment: helping companies in different sectors to make investments that wouldotherwise have not been made—extremely important in countries experiencing low businessinvestment.

Crucial to the implementation of a mission-oriented approach to innovation policy is theneed to reinvigorate capacity building, competencies and expertise within the state (the‘developmental and networked’ entrepreneurial state as argued by Mazzucato) such that itsdifferent organisations can effectively fulfil their roles in coordinating and providing directionto private actors when formulating and implementing policies that address societal challengesthrough innovation. The move to a mission-oriented approach raises a number of questions fordiscussion with which we conclude these first ESIR reflections. They are analyzed in moredetail in sections 2 and 3 of the Memorandum.

1. Granularity: What should be the scope of missions? Should they be more missions of theaccelerator type speeding up progress in a particular field or transformational missions, leadingto more systemic change or both or a mix? And at what level of granularity should we designindividual missions?

2. Targets and objectives: We need to define objectives that are progress concretelythrough R&I policies, while also requiring systemic change (e.g. on the demand side). How tomake such objectives coherent with wider policy goals and create a pull-effect across both the ECand MS activities? How to create a set of targets and programmes underneath each missions toenable a portfolio approach that allows multiple pathways to be pursued, keeping the process ofinnovation open while also directed?

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3. Identification/Selection of Missions: How should the missions be chosen, and how can awider group of stakeholders, member states and public be involved. How can citizens beinvolved so missions also have greater democratic legitimacy?

4. Design and implementation: What should be the level of prescriptiveness in setting missions?Should there be roadmaps and work programmes? How to balance the need to set direction in atop down manner with the need to allow for bottom up input and innovation? How to movefrom supporting individual sectors to supporting systemic transformation? How can demandside measures (e.g. procurement, regulation) be integrated? What time frames should themissions run over? How can existing instruments be aligned with the goals of the mission?

There are many other issues of course as well, including how to balance the need to allowfreedom to operate to the mission managers with the need for accountability when spendingpublic funds? Can one design a mechanism to shut off support to projects that are notdelivering on the mission objectives? How to make sure that the views of end-users as well asfunders are taken into account? How to learn from mistakes, provide interactive feedback?Monitoring progress, evaluation and assessment of each mission will have to become an essentialand integral part of the policy roadmap.

By way of conclusion: a first reflection to be continued...

Europe is facing economic, social, political and technological challenges. It is also facing anextraordinary set of opportunities that can harness the full potential of new technologies (e.g.artificial intelligence) for social goals. We believe a mission oriented approach can provide aframework, as well as a methodology, for tackling such challenges in a more holistic mannerthan has been done with narrow sectoral, or narrow science policies. The implications of suchan approach are huge, including the need to involve member states and civil society in acoherent and systemic way.

As ESIR expert group we will not propose particular missions, but guide the thinking that isrequired for a mission oriented approach to lead to a different status quo. We expect manyproposals for missions to be proposed over the coming months ranging from purely scientificmissions to more transformative missions. When such proposals are made, we believe itwill be useful to test those against the framework proposed here.

PE 614.545

This is a publication of the STOA SecretariatDirectorate-General for Parliamentary Research Services, European Parliament