The seventh program for research and development of the European Union may fall victim to cuts in the Union's budget, and possibly even to the collapse of the Union.
The seventh program for research and development of the European Union may fall victim to cuts in the Union's budget, and possibly even to the collapse of the Union. This concern is expressed by Prof. Eli Cohen, research director at the French National Center for Scientific Research (CNRS), lecturer at Calcutta at the Higher School of Political Science in Paris, member of the Council of Economic Advisers at the French Prime Minister's Office (CAE).
According to Cohen, he intended to speak only on the main subject for which he was invited - collective research in a knowledge-based economy, but the timing, a few weeks after the two no votes, requires him to also refer to the crisis, which he says is the biggest and most serious crisis since the founding of the European Community. The current situation is very difficult, not only because of the two votes against, but also because of the difficulties to compromise on the budget. "Today there is an open discussion on all the arrangements that accompanied us during the 40 years of the Union's existence."
As for the budget, there is a debate between old policies and new policies, issues of the net contribution of countries to the overall union, the new balance between costs and achievements and accepting new countries versus investing in less developed areas. The single currency - the euro - is also in crisis. The situation is difficult. "I do not believe that the acting chairman of the European Union will be able to help, because Mr. Blair cannot afford to interfere. Even before we were in a crisis situation. We had problems with growth and stability, and now they may worsen." According to Cohen, this is a process whose end is not yet in sight and therefore it is difficult to know what its impact will be, but he is at least optimistic that program by program, the recognition of the importance of raising the technological and scientific level of Europe, is gaining momentum, and if there is something in common that has not been harmed, it is the desire to promote research and development.
Implementation of the Lisbon decisions
At a conference held in Lisbon at the beginning of the decade, all the parties in the European Union, who see how the scientific gap with the US is growing, agreed on a strategy for creating a knowledge-based economy, expanding innovation and competitiveness, completing the construction of a competitive local market, modernizing the European social model and fighting the social exclusion of populations, while implementing an appropriate macroeconomic policy. The Lisbon recommendations had several aspects, on the one hand, Europe is supposed to become the most dynamic and competitive knowledge community in the world, and this allows it to continue economic growth and also create more and better jobs, and on the other hand, also maintain social unity by preserving and respecting the environment. "We want to achieve all of these at the same time. But this good strategy was not supported by any practical action and no reorganization of the systems was carried out. these
Some say that the Lisbon strategy has failed and indeed, the interim assessment of the Cook report is negative: Europe is still lagging behind.
Is it possible to reach the goal of investing 3 percent of GDP in industrial R&D in 2010? According to Cohen, the European Union is very far from this goal, and at the current rate of growth, it will not reach the goal in 2010 either. Also in the field of patents, the European Union lags behind the United States and Japan. In terms of the labor force participation rate, the situation has improved slightly but is now in the process of deteriorating. "The three main countries - Germany, France and Italy, are growing at a very slow pace. Italy is on the brink of economic collapse, Germany is not growing at all and France is today eating money it did not earn."
Low return on investment
Europe makes relatively good investments in R&D, but Europe's output is much lower. However, even in the absolute investment aspect, Europe still has a lot to go forward. In 2001, the United States invested 140 billion euros more in R&D than the European Union. This compares to a gap of only 17 billion euros in 1995. In 2003, the United States invested 5 times more than the European Union in military research. The ratio of research workers to all workers in the European Union is also seven research workers per thousand workers, in the United States 8 and in Japan 9.1 R&D workers per thousand workers.
Europe nevertheless has an advantage: the European Union provides more university graduates in the relevant fields (600 thousand compared to 370 thousand in the USA) and more graduates with a doctorate degree (0.55 with a doctorate degree per thousand inhabitants in Europe, compared to 0.4 in the USA and 0.27 in Japan).
In terms of scientific output, the European Union provided 37% of all world scientific output (per capita) in 2002, a better output than the United States (30%) and Japan (10%). In the field of life sciences, the American articles are cited more than the European ones. In the European patent system, 47% of patents originate in Europe, 27% originate in the USA and 21% from Japan (more American patents in the field of life sciences). In contrast, in the American patent system, 16% originate in Europe, 52% from the USA and 21% from Japan (in the field of life sciences, there are 6 times more American patents than European ones). In other words, a gap has been created in favor of the US mainly in the field of life sciences.
To summarize the first part, Cohen says that Europe is in a very difficult crisis. The entire European project is in danger, there is a major leadership crisis, there is a major erosion in the Lisbon recommendations, the industrial R&D budget will be stabilized, but at the level of 1.06% of GDP (and as I recall the original goal was to raise it to 3% by 2010), the European Union will not be able solve this problem but in a year or two. During the process of rebuilding the Union, the existing policies will continue and evolve. The R&D and specifically the growth policy are among the policy factors that cannot be debated. R&D will benefit from an exit from this crisis and will grow by 50% by 2013 compared to its level in 2006. Cohen cites the Galileo project as an example, which could set new standards for joint initiatives between EU members and other countries participating in it.
A tool for integration between the Union's members
In the second part of his speech, Cohen wanted to refer to the European research policy as a by-product of the industrial policy and as a tool for integration. For Debi Cohen, in the past there were days of glory when France tried to lead some fields on its own, such as the field of aviation and space and the field of nuclear energy, but it failed. Europe itself has established joint scientific projects, such as the European Space Agency, and the accelerator at CERN. Europe also tried unsuccessfully to fight the Japanese technological threat. The Eureka program was supposed to be the civilian answer to the Star Wars program, but it also failed. The new mantra today is: horizontal policy, commercial competition and R&D. The wake-up call was belatedly brought by the Lisbon Declaration (which clarified the importance of R&D and the new economy - the information economy.
The history of the R&D programs
R&D policy is mainly a national authority, but joint research activity creates a higher yield. Collaborative research provides dual benefits in better efficiency and integration. The budget of the R&D program (3.5 billion euros per year) is a unique tool, but it cannot be a substitute for European R&D policy. The budget of the R&D programs in addition to the CERN budget constitute 12% of the total civil R&D investments in Europe.
The first R&D program sought to bring R&D efforts in Europe to a critical mass. The direct result of this economic agreement is the Europeanization of French policy in the fields of aviation and space. The second R&D plan also discusses the problem of inefficiency: too many players compete for too few resources, causing investments in R&D to not yield returns. The third plan mainly dealt with the integration of R&D activity between the countries, the fourth plan mainly dealt with closing the gap between the poor and the rich countries. The fifth plan was an attempt to bypass national systems, but the additional bureaucracy created by the plan and its too many goals created many disturbances. However, despite everything, investment in research and higher education is a key desire of Europe to build a knowledge-based economy (KBE).
the chain of knowledge
The development of the knowledge economy is mainly based on the production of knowledge; Its distribution - in particular through education and training and its conversion to innovation in the industry and service sectors. The quality and the value chain depend a lot on the strength of the connections between these three poles of knowledge. They also depend on the way in which the geographical dispersion is carried out. Now the European Union invests only 4% of GDP in research of all kinds, compared to 6% in the United States. The gap increased between the years 1992 and 2000, as a result of an increase of one and a half times more in investments in the USA (6.1%) compared to Europe (4.2%). A knowledge-rich industry already invests 2.1% of the GDP in Europe in R&D compared to 3.7% in the USA, meaning one and a half times here as well. The Nordic countries distort the European average, and most countries are not at the technological forefront and remain mainly in an imitation economy.
education and growth
The economic analysis of education's contribution to growth reveals two mechanisms. The first deals with the contribution of education and improving the human capital of people to make them more productive. Each additional year of education increases productivity and income. The second mechanism is related to technological progress. A high level of education allows us to more easily adopt technologies developed by others or invent new technologies. The education system has different roles in the different stages of this process. The adoption of existing technologies requires people with technical and professional skills, acquired in secondary or vocational schools, while innovation in research is based on a more general nature and requires higher education. Countries that are not at the technological forefront that want to advance should embrace the innovation of more advanced countries and invest in secondary and professional education. When the country gets closer to the technological front, the possibility to imitate decreases, and then it is more profitable to invest in higher education. The empirical results, in the study we published, confirm these assumptions.
Israel and the R&D program
From the fourth program to the fifth program, the number of Israeli participants more than doubled, from 266 entities (0.4%) to 652 (1%). Israel was the only country that improved its lot.
In the fifth plan, Israeli entities served as coordinators of 105 projects (0.9% of all projects), but out of the countries newly joining the program, Israel's share was 24%. Moreover, Israel was responsible for more project management than any of the new accessions except Poland.
In terms of programs, Israel's performance in the field of industrial innovation (385 participants) brought it to 1.18 in the specialization index. In terms of investment in basic research, Israel's performance is poor - only 6 participants and an index of 0.81. In terms of sectors - from the field of information and communication technology (ICT) there were 204 participants from Israel. In the field of biotechnology and health - 130 participants - less than Norway but more than Ireland, Portugal and all the new participants. Between 20 and 30 female participants from Israel were in the fields of space, aviation and energy.
Israel and the Seventh Plan
The seventh plan seeks to encourage basic research (ECR), joint technological innovation (JTI), designed to promote technological platforms, as well as the development of knowledge areas. According to Cohen, these new initiatives open up new opportunities for Israel.
A fair return on investment
In the fourth and last part of his lecture, Cohen dealt with the painful question. In every country participating in the European R&D program there is a requirement for fair reimbursement, meaning that the total participation of the program in R&D activities in that country will be greater than the budget that country contributes to the program. At least this was true for Israel's part in the fifth plan and the sixth plan until now. Ostensibly it's a zero sum game - if some countries get more than they invested, others have to lose, but the actual reality is much more complicated. First, Cohen provides an example that is not from the field of R&D but clarifies his intention "The question of fair reimbursement is a question that has a sting. Because once you have decided to belong to the community, once you have a say in planning the program, once the selection processes are well designed and implemented, the question of fair reimbursement is a problematic one. This question is difficult even when the issues seem simple, as in the case of the EU budget. The difference between what a country contributes and what it receives is simply in monetary terms.
However, if we look at the case of Spain, one of the first countries to benefit from the European Union's budget, matters are more complex - before joining the Union, Spain was a low-cost, low-tech country with large agricultural and tourism sectors. The unemployment rate was high and many areas were undeveloped. The accession and the influx of funds accelerated the economy. The main beneficiaries of the increase in investments and consumption were France and Germany, whose residents invested, for example, in the establishment of hotels in resort areas that were developed after Spain's entry into the Union, and their trade with Spain also increased a lot compared to the previous situation. The net contribution of this whole process to the growth of Europe is not in the numbers."
Fair return for investment in R&D
The issue of return on investment in research and development is a difficult question. The closer the research is to market, the easier it is to assess its impact. Investing in joint R&D costs more than proprietary investment, so planning the joint venture is essential. According to Cohen, Israel cannot invest in basic research in all fields or even in some fields. Israel cannot finance the establishment of technological platforms or even a technological demonstration except in the military field and in a few other narrow fields. Israel can make better use of Europe's abundant resources and be more focused. Israel has a huge advantage in marketing orientation. Israel is a high-tech country; Israel has developed excellent relations with large IT companies; Israel has a niche strategy; Israel is a favorite of venture capital funds and NASDAQ. In terms of adopting innovation, Israel is replicating the American model and has access to the pool of the brightest minds in the world. Compared to Israel, the European Union is less market oriented and the government sector is still quite important.
According to him, if the structure of the Seventh Plan is biased against Israel because Israel cannot afford to participate in large technological projects, then it is the method that needs to be changed and not the very idea of participation.
