ANNEX to the Proposal for a Decision of the European Parliament and of Council on the Strategic Innovation Agenda of the European Institute of Innovation and Technology (EIT) 2021-2027: Boosting the Innovation Talent and Capacity of Europe - Hoofdinhoud

Council of the European Union

Brussels, 12 July 2019 (OR. en)

11227/19

Interinstitutional File: ADD 1

2019/0152(COD) i

RECH 405 COMPET 581 EDUC 350 CODEC 1298 IA 175

PROPOSAL

From: Secretary-General of the European Commission, signed by Mr Jordi AYET PUIGARNAU, Director

date of receipt: 11 July 2019

To: Mr Jeppe TRANHOLM-MIKKELSEN, Secretary-General of the Council of the European Union

No. Cion doc.: COM(2019) 330 final i

Subject: ANNEX to the Proposal for a Decision of the European Parliament and of Council on the Strategic Innovation Agenda of the European Institute of

Innovation and Technology (EIT) 2021-2027: Boosting the Innovation Talent and Capacity of Europe

Delegations will find attached the Annex to document COM(2019) 330 final i.

Encl.: Annex to COM(2019) 330 final i

EUROPEAN COMMISSION

Brussels, 11.7.2019 COM(2019) 330 final i

ANNEX

ANNEX

to the

Proposal for a Decision of the European Parliament and of Council

on the Strategic Innovation Agenda of the European Institute of

Innovation and Technology (EIT) 2021-2027:

Boosting the Innovation Talent and Capacity of Europe

{SEC(2019) 275 final} - {SWD(2019) 330 final} - {SWD(2019) 331 final}

ANNEX

Table of contents

• 1. 

  Introduction .................................................................................................................. 2

1.1. The EIT: a fundamental EU innovation instrument ..................................................... 3

1.2. Key strengths ................................................................................................................ 3

1.3. Key Challenges ............................................................................................................ 6

• 2. 

  Raising the bar: the EIT in 2021-2027 ......................................................................... 7

2.1. Objectives ..................................................................................................................... 7

2.2. Positioning in Horizon Europe ..................................................................................... 7

• 3. 

  Boosting the Innovation Talent and Capacity of Europe ............................................. 8

3.1. Knowledge and Innovation Communities .................................................................... 9

3.2. Supporting the innovation capacity of higher education ............................................ 11

3.3. EIT cross-cutting activities ........................................................................................ 13

3.4. Making it work ........................................................................................................... 15

3.5. Synergies & complementarities with other programmes ........................................... 18

• 4. 

  Resources ................................................................................................................... 19

4.1. Budget needs .............................................................................................................. 19

4.2. Impact (monitoring and evaluation) ........................................................................... 20

• 5. 

  Annex 1A ................................................................................................................... 24

• 6. 

  Annex 1B ................................................................................................................... 24 1. I NTRODUCTION

This Strategic Innovation Agenda (SIA) sets out the strategy and priorities for the European Institute of Innovation and Technology (EIT) for the period 2021-2027. It represents the main policy document of the EIT over the next programming period and defines its objectives, key actions, expected results and resources needed. The SIA ensures the necessary alignment of the EIT with the [Horizon Europe proposal], which is the Union framework programme supporting research and innovation for the period 2021-2027. It also ensures appropriate synergies and complementarities between the EIT activities and other Union initiatives, policies and instruments.

The SIA 2021-2027 is informed by the impact assessment carried out by the European Commission. It takes into account the draft SIA from the EIT Governing Board submitted to

the European Commission on 20 December 2017, in accordance with the EIT Regulation 1 . It

also reflects the new [Horizon Europe proposal] of the European Commission of June 2018 and, in particular, the key role of the EIT as part of the [Open Innovation] Pillar (Pillar III), and its contribution to addressing global challenges, including established targets for climate objectives, and European industrial competitiveness (Pillar II) and to excellent science (Pillar I). The SIA builds on the lessons learnt over the last years of operation of the EIT and the results of a wide consultation process with key stakeholders.

The SIA takes into account the Strategic Planning of Horizon Europe to ensure alignment with the Framework Programme activities, with other relevant Union programmes and consistency with EU priorities and commitments and increase complementarity and synergies with national and regional funding programmes and priorities.

1 Regulation (EC) No 294/2008 i of the European Parliament and of the Council of 11 March 2008 establishing the European Institute of

Innovation and Technology (OJ L 97, 9.4.2008, p. 1). Amended by Regulation (EU) No 1292/2013 i of the European Parliament and of the Council of 11 December 2013 (OJ L 347, 11.12.2013, p. 174).

1.1. The EIT: a fundamental EU innovation instrument

The EIT was established in 2008 in order to contribute to sustainable economic growth and competitiveness by reinforcing the innovation capacity of the Member States and the European Union. It pioneered the integration of education, business and research (knowledge triangle) together with a strong emphasis on entrepreneurial talent and innovation skills. The mid-term evaluation of the EIT in 2018 confirmed that the overarching rationale of the EIT remains valid and the model of innovation-driven knowledge triangle integration remains relevant.

A decade after EIT’s establishment, the pace of innovation has accelerated dramatically. Innovation is reshaping economic sectors, disrupting existing businesses and creating unprecedented opportunities. With a shifting global economic order and international competition on the rise, the EU’s dependence on talent and its capacity to innovate is growing. Co-design, collaboration and co-creation across disciplines and between education, business and research have never been as important as today to contribute to address global challenges related to climate change and unsustainable use on natural recources, digital transformation, demographic shifts or the future of healthcare and food.

With the [Horizon Europe proposal] for a new Framework Programme supporting research and innovation for the period 2021-2027, the European Commission made a firm commitment to raise further Europe's innovation potential in order to be able to respond to the challenges of the future. The EIT’s distinctive role in fostering innovation by bringing together business, education, research, public authorities and civil society is reinforced by its positioning in the [Innovative Europe Pillar] of the [Horizon Europe proposal]. The [Horizon Europe proposal] reflects the growing ambition of the EU on innovation and the necessity to deliver on it.

1.2. Key strengths

Since its set up, the EIT has established itself gradually as a successful instrument addressing societal challenges. The EIT operates mainly through Knowledge and Innovation Communities (KICs), which are large-scale European partnerships between education and training, business and research organisations. There are currently eight KICs that operate in the following areas: climate change, digital transformation, energy, food, health, raw materials, urban mobility and added-value manufacturing (see Figure 2).

Each KIC is organised around five to ten of co-location centres (CLCs 2 ) which are intended to act as geographical hubs for the practical integration of the knowledge triangle. They are organised and structured according to their respective national and regional innovation context and build on a pan-European network of existing labs, offices or campuses of a KICs’ core partners.

The KICs aim at running portfolios of knowledge triangle activities through:

2 A ‘Co-location centre’ is a geographical area where the main KICs knowledge triangle partners are based and can easily interact,

providing the focal point for the KICs’ activity in that area.

• Education and training activities with strong entrepreneurship components to train

the next generation of talents, including the design and implementation of

programmes awarded the EIT Label 3 , in particular at master and doctoral level;

• Activities supporting innovation to develop innovative, products, processes and

services that address a specific business opportunity;

• Business creation and support activities, such as accelerator schemes to help

entrepreneurs translate their ideas into successful ventures and speed up the growth

process.

The KICs represent dynamic innovation ecosystems that produce a wide range of results (see Figure 1 below).

Figure 1: EIT results up to date, source: EIT

Education and training, talent and skills development are at the core of the EIT model. No other EU action on innovation includes higher education in the innovation value chain to the extent the EIT does. The EIT’s education agenda is key for developing highly entrepreneurial and skilled innovators. By 2017, more than 1700 graduates have successfully completed an EIT-labelled master and/or doctoral programme, and thousands have participated in entrepreneurial and innovative education activities and formats.

The focus on global challenges through the integration of the knowledge triangle distinguishes the EIT from other innovation instruments. By providing a grant for up to 15 years to KICs, the EIT is delivering on its long-term objective of tackling global challenges through innovative products and services and bringing concrete benefits to our society and citizens. The EIT also has set the objective to the KICs to become financially sustainable after 15 years, which is a unique feature that leads to a business and result oriented innovation instrument. In this context, KICs have to develop and implement revenue-creating strategies in order to maintain their innovation ecosystem beyond the period covered by the grant agreement.

The EIT approach contributes to both incremental and disruptive innovations to happen, to effectively address market failures and help transform industries. It enables the creation of long-term business strategies for addressing global challenges and helps creating the

3 The EIT Label is a quality seal awarded by the EIT to a KIC’s educational programme which complies with specific quality criteria related

inter alia to entrepreneurial education and innovative ‘learning-by-doing’ curricula.

framework conditions that are essential for a well-functioning innovation ecosystem to grow and innovation to thrive.

The EIT offers an efficient and effective platform for launching, scaling up and managing KICs with strong network effects and positive spill-overs (see Figure 2 below). The first wave of KICs (EIT Digital, EIT Climate-KIC and EIT InnoEnergy), launched in 2009, is established and mature and after 2024 their framework partnership agreements will be terminated, in line with the maximum grant duration. A second and third generation of KICs (EIT Health and EIT Raw Materials (2014), EIT Food (2016)) is maturing. EIT Urban Mobility and EIT Manufacturing, the two KICs designated in December 2018, are starting their operations in 2019.

Figure 2: EIT Knowledge and Innovation Communities, source: European Commission

Through its eight KICs with more than 1000 partners from business, research and education, the EIT represents the largest EU-supported innovation ecosystem. The EIT has supported more than 1200 start-ups and innovative ventures, leading to over EUR 890 million in external funding attracted by those companies and more than 6000 jobs created by the supported start-ups. More than 50% of KIC partners are from the business sector (industry, SMEs and start-ups) demonstrating the proximity to the market. The increase in number of partners in each KIC shows the attractiveness and long-term potential of the EIT model. By 2019, there are more than 600 businesses, 250 HEIs, 200 research organisations, and more than 50 civil society organisations and authorities participating in EIT KICs.

In the backdrop of persisting regional disparities in innovation performance, the EIT launched a Regional Innovation Scheme (RIS) in 2014 to widen its regional outreach to modest and moderate innovator countries. Through the RIS, the EIT has expanded its activities across Europe and offers now opportunities for regions with low innovation performance to engage in knowledge triangle activities as part of the a KIC community. This is also reflected in the share of EIT funding allocated to EU-13 partners (8.3% as compared to 4.8% in Horizon 2020 as of 2018).

Figure 3: EIT in Europe, source: EIT, 2018

The EIT has been able to stay agile and to develop the governance principles and rules for the successful management of its KICs under the overall umbrella of Horizon 2020, in accordance with the EIT Regulation. Its operational independence has allowed it to test and effectively implement a number of novelties in the management of its beneficiaries such as a competitive funding mechanism, financial sustainability targets and specific key performance indicators.

1.3. Key Challenges

The EIT is part of the overall Horizon Europe framework that aims, inter alia, to deliver scientific, economic/technological and societal impact so as to strengthen the scientific and technological bases of the Union; deliver on the Union strategic policy priorities, foster its competitiveness in all Member States, including in its industry, and contribute to tackling global challenges, including the Sustainable Development Goals. A core condition for being successful in this endeavor is to respond to the persisting need to increase innovation capacity across the Union. There are in particular three challenges the EU faces that will guide EIT’s actions in 2021-2027 as reflected by its general objectives.

First, today’s economies are increasingly driven by the skills and abilities of people and organisations to turn ideas into products and services. Innovation skills and an entrepreneurial culture make all the difference today, in particular in the technological and scientific domains but increasingly also in other disciplines. There is a strong need to further boost the innovation capacity of higher education institutions in Europe. The EIT is in a unique position to deliver on this in the Horizon Europe framework.

Second, physical proximity is a key enabling factor for innovation. Initiatives aiming at developing innovation networks and providing services that support the creation, sharing and transfer of knowledge, play a key role in fostering the interactions between business, academia, research organisations, governments and individuals. Still, research and innovation performances across the EU, as reflected in the annual European Innovation Scoreboard, vary considerably. It is of crucial importance that innovation is inclusive and rooted in the local territories. EIT activities, thanks to their “place-based” approach, are well suited to contribute to strengthening local innovation ecosystems.

Finally, vibrant innovation ecosystems require a mix of knowledge, infrastructure and talent. Framework conditions for cooperation between European research, education and innovation along with strong synergies need to be in place to ensure proper and efficient investment of scarce resources into research and innovation. Deepening the knowledge triangle integration through existing and new KICs is a proven way to foster an environment conducive to innovation and is a guiding objective for the EIT.

• 2. 

  R AISING THE BAR : THE EIT IN 2021-2027

The EIT as an integral part of the Horizon Europe programme will contribute delivering on its overarching objectives and priorities. The KICs will be part of the Institutionalised European Partnerships, meaning they will follow a set of principles and life-cycle criteria to ensure a more coherent, open and impact-driven approach. The EIT general objectives therefore reflect the overall role of the EIT in Horizon Europe and its place in the [Innovative Europe Pillar].

2.1. Objectives

The overarching areas of intervention for the EIT are defined in the [Horizon Europe proposal]. The EIT will continue to support its Knowledge and Innovation Communities (KICs) in order to strengthen the innovation ecosystems that help to tackle global challenges. It will do so by fostering the integration of education, research and business, thereby creating environments conducive to innovation, and by promoting and supporting a new generation of entrepreneurs and stimulating the creation of innovative companies in close synergy and complementarity with the EIC. In doing so it will in particular:

• (1) 

  Strengthen sustainable innovation ecosystems across Europe;

• (2) 

  Foster innovation and entrepreneurship through better education;

• (3) 

  Bring new solutions to global challenges to market.

In line with the identified challenges that the EIT is facing (described in chapter 1.3.) and in order to contribute to the above overarching objectives defined for the EIT in the [Horizon Europe proposal], the specific objectives of the EIT for the period of 2021-2027 are to:

(a) Increase the impact of KICs and knowledge triangle integration;

(b) Increase the innovation capacity of the higher education sector by promoting institutional change in higher education institutions (HEIs);

(c) Increase the regional outreach of the EIT in order to address regional disparities in innovation capacity across the EU.

2.2. Positioning in Horizon Europe

By delivering on these objectives, the EIT will contribute to the overall achievement of Horizon Europe scientific, economic/technological and societal impacts. It will continue to strengthen innovation ecosystems that help to tackle global challenges, by fostering the integration of the knowledge triangle in the areas of activity of the KICs. The Horizon Europe Strategic Planning process will ensure closer alignment between the EIT activities and the rest of Horizon Europe. Based on its proven track record, the EIT will play an important role in the Open Innovation Pillar.

Strong synergies between the EIT and the European Innovation Council will be key for the impact of the [Innovative Europe] Pillar. The EIT and the EIC will run complementary activities aiming at streamlining the support provided to innovative ventures. Based on the expertise of its KICs, the EIT will provide business acceleration services and trainings to beneficiaries awarded EIC funding.

The EIT will furthermore facilitate the access of EIC beneficiaries to KICs’ innovation ecosystems and relevant actors of the knowledge triangle. In this way EIC beneficiaries can become actively involved in KICs’ activities and benefit from KICs’ services. In parallel, EIT beneficiaries will be able to apply to the EIC instruments, when EIT KICs support may not be available. The EIC may help start-ups supported by KICs with a high growth potential to rapidly scale-up. In particular, the most innovative KICs’-backed ventures may, if selected under the EIC, benefit from the blended finance support offered by the EIC Accelerator and/or by the financial support offered by InvestEU instruments.

The EIT will ensure stronger synergies also with programmes and initiatives in the [Excellent Science] Pillar, to accelerate the transfer of knowledge resulting from blue sky research into concrete applications benefiting the society. In particular, with regard to the Marie Skłodowska-Curie Actions (MSCA), the EIT will collaborate on the development of innovation and entrepreneurial skills of MSCA fellows.

The EIT will contribute to the [Global Challenges and Industrial Competitiveness] Pillar and complement relevant activities to tackle global challenges and increase the competitiveness of the EU on a global scale. In particular, through its KICs, the EIT will seek to contribute to relevant missions and thematic clusters and other European Partnerships by notably supporting demand-side measures and providing exploitation services to boost technology transfer and accelerate the commercialisation of results achieved.

The EIT will ensure coherence with the European innovation ecosystems strand of Horizon Europe. In particular, the EIT will take an active part in the activities of the EIC Forum and will establish links between the EIT Community and relevant activities supporting innovation ecosystems in order to avoid duplication and ensure coherence and complementarity of actions.

Opportunities for synergies will be also explored between the Sharing Excellence part of Horizon Europe and the outreach activities supported by the EIT. In particular, target countries of the Horizon Europe Sharing Excellence part will be able to leverage on EIT expertise and support for the development of downstream activities (i.e. close to market), as the target group for for EIT outreach activities.

• 3. 

  B OOSTING THE I NNOVATION T ALENT AND C APACITY OF E UROPE

A reinforced role of the EIT, through a focus on actions where it will add value at the EU level and contribute to achieving the objectives of Horizon Europe, will guide the EIT strategy for 2021-2027. First, the EIT will continue to support the innovation capacity and ecosystems through KICs, their further development and expansion, and through the launch of new KICs. Secondly, building on its experience with the knowledge triangle integration, the EIT will directly support the development of the entrepreneurial and innovation capacity in the higher education sector. Finally, through more effective cross-cutting measures, the EIT will ensure that its impact at the EU level increases. In addition, the EIT will also improve its operations in a number of areas in order to increase its effectiveness, efficiency and impact.

3.1. Knowledge and Innovation Communities

• (1) 

  Support to existing KICs

The integration of the knowledge triangle by the EIT and KICs at EU, Member States, regional and local levels will remain a core task for strengthening innovation ecosystems and making them sustainable, as well as for developing new solutions to global challenges. The EIT will continue support a portfolio of KICs (see Figure 2) and will further strengthen its successful platform for launching, growing and managing them. KICs will continue to operate through co-location centers (CLC). The KICs will continue to pursue financial sustainability in order to achieve financial independence from the EIT grant in the long-term (at the latest, after 15 years) through leveraging public and private investment.

The EIT will dedicate a large share of its budget to support KICs. It will monitor and analyse their performance and ensure they deliver towards the objectives of the EIT and of the Horizon Europe Programme. Beyond financial support, based on lessons learned, the EIT will provide strategic supervision to KICs, as well as guidance on horizontal and specific issues, including on the establishment of synergies within Horizon Europe and with other EU initiatives. In particular, the EIT will support KICs in establishing interfaces and fostering joint activities with relevant European Partnerships and other relevant Union initiatives and programmes.

It will also monitor the award of the EIT Label to KICs’ education and training programmes and explore a more effective quality assurance mechanism, including external recognition and accreditation for the EIT Label.

The EIT will facilitate shared services towards the KICs and exchanges of experiences and good practices between KICs and foster collaboration between them (cross-KIC activities) on both thematic and horizontal topics. Cross-KIC activities have highest potential where several KICs alreadyaddress common EU policy priorities where no dedicated KICs exist. Bringing together the different KICs communities in dedicated joint actions of mutual benefit has high potential for synergies and The EIT will boost such activitiesand take an active part in defining the content and structure of the cross-KIC activities. It will monitor the implementation of cross-KIC activities as well as the results achieved, with the aim of making those activities an integral part of the KICs’ strategies.

• (2) 

  Increasing the regional impact of KICs

The EIT will further increase its regional impact through an enhanced openness towards potential partners and stakeholders and a better articulated regional strategy of KICs, including links to the relevant Smart Specialisation Strategies.

The EIT Regional Innovation Scheme, steered by the EIT and implemented by KICs, has been so far run on a voluntary basis. From 2021 on, the EIT RIS will become an integral part of the KIC’ multi-annual strategy. The EIT will continue to provide guidance and support to KICs in the preparation of multi-annual EIT RIS strategies and in their implementation. EIT RIS activities will continue with improved support to the innovation capacity of countries and regions that underperform in terms of innovation. The EIT budget devoted to implementing EIT RIS activities will be at least 10% of the overall EIT support funding to KICs, thereby increasing the number of KIC partners from targeted regions. Activities supported through the RIS will aim to:

• improve the innovation capacities of the local ecosystem, via capacity building

activities and closer interactions between the local innovation actors (clusters,

networks, regional authorities, HEIs, research organisations, VET institutions);

• link local innovation ecosystems to pan-European innovation ecosystems through

cooperation with EIT KICs and their co-locations centres.

In addition, in order to ensure KICs’ deeper integration in local innovation ecosystems, each KIC will be required to develop and implement a strategy aiming at strengthening the relationship with regional and local innovation actors, and the EIT will actively monitor the implementation. A “place-based” innovation approach should be integrated within the KIC’s multi-annual strategy and business plan and build on KIC’s CLCs (and RIS), thus leveraging on their role as gateway for accessing a KIC community and interacting with the co-located partners. KICs should demonstrate links with local Smart Specialisation Strategies and with the activities of relevant thematic platforms and interregional initiatives, including the Managing Authorities of ESI Funds. The EIT will also monitor how CLCs operate and how they integrate in the local innovation ecosystems.

• (3) 

  Launch of new KICs

In order to contribute to addressing new and emerging global challenges, the EIT will launch new KICs in priority fields selected based on criteria assessing, among other aspects, their relevance to Horizon Europe policy priorities, and their potential and added value to be addressed through the EIT model. The launch of new KICs will take into account the Strategic Planning of Horizon Europe and the budget allocated to the EIT in 2021-2027. The relevant selection criteria for European Partnerships defined in Annex III of the [Horizon Europe Regulation] will be included in the KIC Call for proposals and assessed during the evaluation.

The list of priority fields for future KICs is set out in Annex 1A to this SIA.

Based on a proposal from the EIT Governing Board and an analysis thereof, a first KIC in the field of Cultural and Creative Industries (CCI) is proposed to be launched in 2022 with a call for proposals to be published in 2021. This priority field has the strongest complementarity with the eight KICs that have already been launched by the EIT, as well as with the potential priority areas for other European Partnerships to be launched in the framework of Horizon Europe. CCI are a sector with a high growth potential, many grass-roots initiatives and strong citizen appeal. They are strongly embedded in their local and regional ecosystems. However, CCI are still a very fragmented sector and the innovators and business creators lack the needed entrepreneurial and innovation skills. These bottlenecks would be best tackled by a KIC thanks to its knowledge triangle integration approach, long-term perspective and placebased approach. A factsheet summarizing the challenges of the CCI field and the expected impact of the future KIC is included in Annex 1B to this SIA.

Based on the proposed budget for the EIT, a second new KIC could be launched in 2025 with a call to be published in 2024, after an amendment to Annex 1A to add new priority field(s). The priority area(s) will be selected in light of the proposals of the EIT Governing Board. These proposals will take into account the priority areas to be identified in the Horizon Europe Strategic Research and Innovation Plan and the criteria set for the selection of European Partnerships, in particular openness, transparency, EU added value, coherence and synergies. The criteria for selecting new KICs will be aligned with those in the Horizon Europe. They will also support delivery on EU policy priorities such as missions and Sustainable Development Goals. Other new KIC/KICs could be selected in case additional budget to that of the EIT would become available.

The EIT will:

• Strengthen innovation ecosystems by continuing to support existing KICs in

addressing global challenges through the integration of the knowledge triangle.

• Define areas of and promote stronger cross-KIC collaboration on topics of

strategic and policy relevance.

• Ensure that KICs develop and implement a strategy to create collaboration and

synergies with relevant European Partnerships and other relevant Union initiatives and programmes.

• Ensure that KICs have an inclusive approach aiming at strengthening their

relationship with national, regional and local innovation actors.

• Ensure that EIT RIS activities deliver on increased regional impact and are fully

integrated in KICs’ multi-annual strategies.

• Launch new KICs in selected thematic areas of strategic importance, starting with

a KIC in the field of Cultural and Creative Industries in 2022.

3.2. Supporting the innovation capacity of higher education

Through the knowledge triangle integration model, the EIT has helped to bridge the persistent gap between higher education, research and innovation. In particular, the EIT is a key tool for the development of human capital through its distinctive focus on entrepreneurial education. However, the impact of the EIT remains limited to the KICs’ partners.

To support innovation more widely, higher education institutions in Europe need to be innovative and entrepreneurial in their approach to education, research, and engagement with businesses and the broader local innovation ecosystem, including civil society.

Developing HEIs into more innovative and entrepreneurial organisations requires a clear strategy, a methodological framework and commitment of resources. Based on its experience, the EIT is uniquely positioned to support the development of entrepreneurial and innovation capacity of HEIs under Horizon Europe.

Activities will be implemented by the EIT through the KICs in an open and targeted way which will aim at increasing the innovation capacity in higher education in order to integrate a wider number of HEIs in innovation value chains and ecosystems. These activities will complement the intervention of the EIT on education as core part of the Knowledge Triangle Integration activities of KICs, in particular through making them more open and accessible to non-partners of the KICs. The impact of the EIT would reach beyond the KICs and contribute to the EIT's core mission of boosting sustainable economic growth and competitiveness by reinforcing the innovation capacity of Member States, in line with the Horizon Europe goals of fostering entrepreneurial and innovation skills in a lifelong learning perspective, including increasing the capacities of HEIs across Europe.

The EIT support will build on policy initiatives such as the HEInnovate 4 and RIIA 5 frameworks that have proven their value in a number of HEIs and Member States across the EU. The EIT will design the support activities in close collaboration with the Commission ensuring coherence and complementarity with relevant activities within Horizon Europe , Erasmusand other programmes. The specific details of the implementation and delivery mechanism process will be further developed and fine-tuned in the first three years and will be subject to monitoring and evaluation during this pilot phase before further upscaling.

The EIT will play a steering and coordination role in the implementation and monitoring of the activities that will be run by the KICs. Particular attention will be paid to ensuring: an inclusive approach to attract HEIs beyond the KICs’ partners; an inter-disciplinary and intersectoral approach; and a link with the European Commission Smart Specialization Strategy, relevant thematic platforms and the EIT RIS.

The EIT will link its support to developing innovation capacity in higher education to the EIT Label, which is awarded currently to the KICs’ education programmes. In particular, participating HEIs may be involved in the use of the EIT Label. The EIT will also extend the EIT Label to lifelong learning activities involving and reaching out to a wider target group of

4 HEInnovate is a policy framework developed by the European Commission and the OECD. HEInnovate offers HEIs a methodology to identify innovation capacity areas for further edvelopment and to shape relevant strategies and actions in order to achieve the desired impact. HEInnovate is based on sound methodological evidence with eight capacity development areas: Leadership and Governance; Digital Transformation; Organisational Capacity; Entrepreneurial Teaching and Learning; Preparing and Supporting Entrepreneurs; Knowledge Exchange; Internationalisation; and Measuring Impact. OECD has published a number of HEInnovate-based country reports, see OECD Skills Studies series at https://www.oecd-ilibrary.org/education/

5 The Regional Innovation Impact Assessment framework (RIIA) was developed by the European

Commission as a first step in guiding assessments of the innovation impact of universities through the elaboration of metrics based case studies. Assessing the innovation impact, e.g. through the RIIA framework, could potentially be tied to innovation performance based funding instruments at the regional, national or EU level.

students, adult learners and institutions (including VET institutions) beyond the KICs. The application of the Label beyond the EIT community will have a more structuring effect at all levels (individual, programme and institution).

The EIT will in particular target HEIs from countries that are moderate and modest innovators and other low performing regions that wish to strengthen their innovation footprint and Smart Specialisation Strategies. The EIT will allocate to this measure at least 25% of the overall budget allocated to these activities.

The EIT will:

• In cooperation with the Commission, design and launch activities to support the

development of innovation capacity in higher education, which will be implemented through the KICs, starting in 2021.

• Introduce an outreach scheme to incentivize HEIs from moderate and modest

innovator countries to develop their innovation capacities.

• Provide specific guidance, expertise and coaching to participating HEIs. • Strengthen and widen the scope of the EIT Label beyond the KICs to include the

HEIs participating in the action.

3.3. EIT cross-cutting activities

• (1) 

  Communication

The EIT will reinforce its communication and visibility. With a growing number of KICs and a new action supporting the entrepreneurial development of HEIs, the EIT will boost its efforts to increase its recognition as a quality brand for innovation. This brand management and improved communication is crucial especially towards citizens as the innovations coming out of the EIT contribute to demonstrate the concrete impact of EU investments through the European Research and Innovation Framework Programme. The EIT will apply an improved branding strategy towards its main stakeholders (HEIs, research organisation, businesses, etc.) in all Member States and beyond, in line with Horizon Europe communication approach.

In order to ensure wider dissemination and better understanding of the opportunities offered by the EIT, the EIT will explore the possibility to reinforce guidance and assistance on aspects related to participation in EIT KICs across Europe by building on existing networks of information across Europe.

In order to ensure that a large stakeholder community across the knowledge triangle at EU, national, regional and local levels are aware of all EIT (and KICs) calls and funded projects, they will appear also in the European Funding and Tender Opportunities Portal, under Horizon Europe.

EIT will organise regular meetings of the Member States’ Representatives Group as well as Commission related services, at least twice a year, to ensure an appropriate communication and flow of information with Member States and at EU level, and keep them informed of the performances and achievements of the EIT-funded activities. The Member States’ Representatives Group shall also ensure appropriate support to liaise EIT-supported activities with national programmes and initiatives, including the potential national co-financing of those activities.

The EIT will continue running the EIT Stakeholder Forum and the EIT awards in order to promote the interactions with European actors of the knowledge triangle and recognise the most promising entrepreneurs and innovators in Europe.

The EIT will continue to steer and provide strategic guidance to the EIT Alumni Community 6 (in collaboration with the EIT Alumni Board) to maximise its entrepreneurial and societal impact and the continuous involvement of its members in EIT-supported activities. In the course of 2021-2027 the Community will continue growing and will also include the alumni taking part to the actions supporting the innovation capacities of HEIs.

• (2) 

  Identify and share good practices with stakeholders

The EIT has a key role in disseminating good practices and lessons learned. The KICs and the projects supporting innovation and entrepreneurial capacity of HEI are a valuable source of evidence and experimental learning for policy-makers, providing examples of good practices and support in the development and implementation of EU policy in their thematic domains.

So far, the good practices and learnings stemming from the KICs have not been sufficiently codified and disseminated effectively. In its support function as a knowledge partner for policy makers and the entire innovation community, the EIT will further develop its role as an innovation institute able to detect, analyse, codify, share and ensure the take-up of innovative practices, learnings and results from the EIT-funded activities (education & training, support to innovation, support to entrepreneurship) on a broader scale. This activity will build on the links and synergies with the other initiatives within the [Innovative Europe Pillar]of the [Horizon Europe proposal].

• (3) 

  International cooperation

Within the scope of the EIT Regulation, the EIT will seek greater impact of its activities through international cooperation and will coordinate international EIT-funded activities by the KICs. Its focus will align closely with relevant industrial policy objectives of the European Union as well as its research and innovation priorities and ensuring European added value.

In its international cooperation the EIT, in consultation with the Commission, will focus on effective tackling of global societal challenges, contributing to relevant international initiatives and the Sustainable Development Goals, ensuring access to talent and enhanced supply and demand of innovative solutions. The EIT and KICs will plan and perform their international activities in close collaboration with the Commission, in compliance with the Horizon Europe approach and other relevant EU policies, and under the supervision of the EIT Governing Board.

6 The EIT Alumni Community brings together entrepreneurs and change agents who have participated in an education or entrepreneurship programme delivered by a KIC. The Community represents a network of over 5000 members.

The EIT will:

• Improve its visibility through a stronger branding strategy towards main

stakeholders in Member States.

• Ensure visibility of the European Union’s support. • Explore the feasibility to use existing EU information networks and provide

coordination to their activities in order to ensure better advice and guidance to potential EIT KICs partners.

• Organise regular meetings of the Member States’ Representatives Group to

ensure an effective communication and flow of information with MS.

• Increase the visibility of its action towards citizens and its community of

stakeholders through the Stakeholder Forum, the EIT Awards and the EIT Alumni.

• Identify, codify, and effectively share learnings and good practices emerging

from EIT-funded activities; engage with EU Member States authorities at both national and regional level, establishing a structured dialogue and coordinating efforts, in order to identify, share and disseminate good practices and learnings.

• Develop broad lines of international cooperation of the EIT and the KICs under

the supervision of the EIT Governing Board, in compliance with the Commission’s strategy for international cooperation on research and innovation and in consultation with the the respective Commission services.

3.4. Making it work

This section includes a number of measures that aim to adapt and improve the current functioning of the EIT and the KICs. An effective and strategic EIT Governing Board will monitor the implementation of those measures at the EIT level, and will provide the necessary incentives and control, including through the funding allocation process, to ensure that the KICs implement them.

• (4) 

  KIC operational model

The EIT will provide operational guidance to and monitor the KICs on compliance with sound management principles, the principles and criteria set out for European Partnerships in the Horizon Europe regulation and alignment with Horizon Europe priorities in order to maximize their performance and impact.

Measures ensuring continuous openness of the KICs and transparency during implementation will be improved notably by including common provisions for new members that add value to the partnerships. They will also run their activities in a fully transparent way. KICs will remain dynamic partnerships that new partners, including an increasing share of SMEs, can join on the basis of excellence and strategic fit. In order to limit the concentration of funding and ensure that KICs activities benefit from a wide network of partners, the procedure for the preparation of the Business Plan (including the identification of priorities, the selection of activities and the allocation of funds) will be made more transparent and inclusive. Finally, KICs will increase the share of calls, in particular for innovation projects that are open to third parties. All these measures will increase the number of participating entities involved in KICs’ activities. Finally, KICs should report on the involvement of new partners in their regular reporting.

As KICs operate across the entire value chain of innovation, they will ensure an appropriate balance of education, entrepreneurship and innovation activities in their Business Plan portfolio. KICs operations will be implemented through a lean, efficient and cost-effective structure that would keep administrative and overhead costs to a minimum. EIT will ensure that KICs will achieve their expected impacts through a broad range of activities, identified in the KICs’ Business Plans, which effectively support the fulfilment of their objectives.

Commitments from each KIC’s partner throughout the contractual duration of the initiative will be ensured by regularly monitoring the actual partner’s contributions against the original commitments. EIT will ensure that KICs have a risk management system in place for cases where some partners are not able to meet their original commitments.

The EIT will:

• Ensure that KICs apply strict principles of openness and transparency, in

particular as regards the selection of new partners and the procedure for the preparation of the Business Plans.

• Ensure that the implementation of the KICs is in full compliance with the

respective requirements stemming from the Horizon Europe regulation.

• Ensure an appropriate balance in the Business Plans between activities of the

knowledge triangle.

• Ensure that KICs keep their administrative costs to a minimum. • Ensure transition of existing eight KICs towards delivery of the new

implementation criteria of Horizon Europe for European Partnerships.

• (5) 

  KIC funding model

Through a lean and simplified funding model, the EIT will enhance the impact and contribution of KICs towards reaching the objectives of the Horizon Europe Programme. In order to increase the value added of its support, the EIT will adapt its funding model. There are four main areas where the EIT will implement improvements.

Firstly, the EIT will introduce a co-funding rate in order to increase the levels of private and public investments. The adaptation of the funding model will facilitate the KICs in the transition towards financial sustainability. It will incentivise them to decrease gradually during the duration of the framework partnership agreements the share of EIT funding in their Business Plan while increasing the level of co-investment from non-EIT sources. Fixed decreasing co-funding rates will be applicable across phases of the entire KICs’ life cycle (start-up, ramp-up, maturity, exit from the EIT grant) as presented below.

Start-up Ramp-up Maturity Exit from EIT grant

Years 1 – 4 5 – 7 8 – 11 12 - 15

EIT Co 50% at year 12,

funding rate Up to 100% Up to 80% Up to 70% decreasing by 10% per annum

Figure 4: EIT co-funding rates 2021-2027

Secondly, the grant allocation process currently used will be geared more strongly towards competitive performance and results and the use of multiannual grants. The EIT Governing Board will provide stronger incentives to KICs in particular based on their individual performance in order to ensure the highest level of impact. The EIT will therefore amend its competitive funding provisions in order to improve its impact as part of Horizon Europe.

Thirdly, the EIT will apply strict rules for reinforcing the review mechanism prior to the expiry of the first 7 years initial period of KIC’s operations. This mid-term review to be undertaken with the help of external experts should be in line with the best international practice, in line with Horizon Europe criteria for the monitoring and evaluation of European Partnerships and take place before the expiry of the initial seven years period. As a result of the review, a decision will be made by the Governing Board to either continue the financial contribution to a KIC, or to discontinue it (thus not extending the framework partnership agreement with that KIC) and reallocate the resources to better performing activities.

Finally, the EIT will continue its efforts towards simplification in order to alleviate unnecessary administrative burden 7 of the KIC, allowing the implementation of their annual Business Plan and multi-annual strategy in an agile and efficient way. This will include the use of lump sum or unit costs for relevant KIC activities. Moreover, in order to provide a better planning of the resources, in particular of innovation activities, as well as facilitate stronger commitment and long-term investment from participating partners in KICs activities, the EIT will sign multi-annual grant agreements with KICs, when appropriate, under the respective framework partnership agreements. These multi-annual grant agreements should not exceed 3 years.

The EIT will:

• Implement a new funding model designed to incentivise commitment from

KICs’ partners.

• Continuously improve the funding model by simplifying KIC’s reporting

practices and, when deemed appropriate, sign multi-annual grant agreements with KICs under the respective framework partnership agreements.

• Adapt the competitive grant allocation process to reward performance and

results.

• Reinforce the comprehensive review of the performance of each KIC prior to

the expiry of their 7th year of activity to support a Governing Board decision on the continuation or termination of their financial support, in line with Horizon Europe framework for European Partnerships.

• (6) 

  EIT relation with KICs after the termination of the framework partnership agreement

Subject to an in-depth independent study in close cooperation with the Commission, by the end of 2023, the EIT will define its relations with the KICs that will stop receiving support grants in the course of the 2021-2027 programming period. Subject to a positive outcome of a final review, the EIT may conclude a “Memorandum of Co-operation” with each KIC, aiming

7 In particular, the annual reporting on KIC complementary activities would be discontinued, as recommended by the Court of Auditors in its Special Report of 2016 ( Recommendation 1, p. 51).

to maintain cooperation with KICs after the termination of the framework partnership agreement. This Memorandum should include, inter alia, rights and obligations linked to:

• the use of the EIT brand, participation in EIT Awards and in other initiatives

organized by the EIT;

• the use of the EIT Label for education & training programmes;

• participation in EIT competitive calls for cross-KIC activities and shared services;

• relations with the EIT Alumni Community.

The EIT will:

• Develop the general principles for the relation with KICs after the termination of

the framework partnership agreement, in line with Horizon Europe framework for European Partnerships;

• Conclude, subject to a positive final review and EIT Governing Board decision,

Memoranda of Cooperation with the KICs in order to keep them as active members of the EIT Community.

3.5. Synergies & complementarities with other programmes

Building on its broad scope of action and distinctive role, the EIT is well placed to create synergies and provide complementarities with other EU programmes or instruments, including by reinforcing its support to KICs in their planning and implementing activities. The list below offers concrete examples where the EIT will contribute to synergies in the mid to long term beyond Horizon Europe.

Erasmus

• Erasmus and EIT will establish synergies between their respective communities.

Cooperation will be geared towards ensuring access for Erasmus students participating in KIC partner higher education institutions to KICs’ summer schools or other relevant training activities (for instance, on entrepreneurship and innovation

management) and establishing contacts with the KICs’ alumni network.

• Cooperation activities can also include delivery of training by EIT/KICs to academic

staff (coming from all Higher Education Institutions, beyond the KICs) for curricula

integrating entrepreneurship and innovation, as well as testing, adoption and scalingup

of innovative practices developed within Erasmus networks (like the Knowledge

Alliances between higher education institutions and businesses) by KICs and vice

versa.

• Synergies will be ensured, where possible, with the European Universities initiative

that could help mainstream EIT’s educational activities to reach a systemic impact.

Digital Europe Programme (DEP)

• KICs’ co-location centres will collaborate with the European Digital Innovation

Hubs to support the digital transformation of the industry and public sector

organisations.

• Feasibilities will be explored to use infrastructures and capacities developed within

the DEP (e.g. data resources and libraries of artificial intelligence algorithms; high performance computing competence centres in Member States) by the KICs in education & training, as well as for testing and demonstration purposes in innovation

projects.

Cohesion Policy Funds (in particular European Regional and Development Fund and European Social Fund)

• EIT KICs, through their co-location centres and RIS entities, will promote regional

and cross-regional cooperation between the knowledge triangle actors (education, research, business) and managing authorities, in synergy with interregional cooperation and investments along value chains in related smart specialization priorities areas, and the work of the thematic smart specialisation platforms. The EIT will also explore contributing to the skills development initiatives under the

Cohesion Policy Funds through exchange of best practices.

• EIT KICs will promote the collaboration with the Smart Specialisation Platforms,

particularly the projects having experience in working with the Managing Authorities of Cohesion Policy Funds, in order to facilitate synergies between EIT resources,

Cohesion Policy Funds and other European, national and/or regional programmes.

InvestEU

• EIT KICs will seek the collaboration of the InvestEU Advisory Hub to provide

technical support and assistance to KICs’-backed ventures for the preparation,

development, and implementation of projects.

• EIT KICs will contribute to feed the InvestEU Portal in order to bring investors

closer to KICs’-backed ventures, in close collaboration with Commission services.

Creative Europe

• The new Creative Europe Programme will be specifically relevant for the activities

of a future KIC on CCI. Strong synergies and complementarities will be developed

with the programme in areas such as creative skills, jobs and business models.

Single Market Programme (COSME)

• KICs will seek cooperation with the Enterprise Europe Network (EEN) and its Sector

Groups to facilitate business-to-business cooperation, technology transfer and innovation partnerships for entrepreneurs wishing to develop their activities across the EU and beyond. EEN organisations will promote EIT KICs activities among their SME clients. The EIT will explore cooperation the mobility programmes for new

entrepreneurs to improve their entrepreneurial skills.

• 4. 

  R ESOURCES

4.1. Budget needs

The EIT's budget needs in the period 2021-2027 are EUR [3000] million and are based on three main components: 1) the expenditure for the existing eight KICs (reflecting that for three of them the framework partnership agreements will come to an end by 2024) and the launch of two new KICs (in 2022 and 2025); 2) the launch of a new EIT support and coordination action; and 3) administrative expenditure.

Around EUR [2500] million (83,3 % of the total EIT budget) is envisaged to fund existing and new KICs and includes EUR [200] million for the Regional Innovation Scheme. Through the introduction of a co-funding rate, the KICs are expected to mobilise a further EUR [1500] million of other public and private sources. The budget for the launch of two new KICs (to be launched in 2022 and 2025, respectively) will be around EUR [300] million. Should additional budget to that of the EIT become available, the EIT could also launch additional KICs.

The EIT will launch a new support action to help develop the entrepreneurial and innovation capacity of HEIs. This action will require horizontal project management and monitoring services. Around EUR [400] million of the EIT budget (max. 14%) is needed to implement these activities, with EUR [120] million dedicated to the start-up phase (first 3 years) and the rest for the scale-up phase (final 4 years)

The EIT will continue to be a lean and dynamic organisation. The costs of administrative expenditure, covering necessary staff, administrative, infrastructure and operational expenses, will increase but on average not exceed 3% of the EIT budget. Part of the administrative expenditure is covered by Hungary through provision of free of charge office space until the end of 2029. On this basis, administrative expenditure will therefore be approximately EUR 73 million for 2021-2027. The budget breakdown is presented below:

EIT budget 2021-2027, Millions of Euro

EIT administrative budget

New action to support innovative and entrepreneurial capacity development in HEI

EIT Regional Innovation Scheme

Support to Knowledge and Innovation Communities

0% 10% 20% 30% 40% 50% 60% 70% 80%

4.2. Impact (monitoring and evaluation)

The measurement of EIT’s impact will be continuously improved over the next programming period taking into account the lessons learnt and the experiences gained so far. The EIT will apply an evaluation, reporting and monitoring framework ensuring coherence with the overall approach taken for Horizon Europe while catering for flexibility. In particular, feedback loops between the Commission, EIT and KICs will be improved in order to address the objectives in a consistent, coherent and efficient manner.

Evaluation

The periodic evaluations of the EIT activities, including those managed through KICs, will be carried out by the Commission in line with the provisions of the EIT Regulation and Horizon Europe Regulation. These evaluations will assess the effectiveness, efficiency, relevance, coherence and EU added value of the EIT activities including the KICs. They will be based on independent external evaluations and will feed into the overall mid-term and ex-post evaluations of Horizon Europe. Furthermore, each KIC will be subject to a thorough review

by the EIT before the end of the 7 th th and 14 year of operation under the Framework

Partnership Agreements.

Reporting and Monitoring

The reporting and monitoring of the KICs operational performance and their results will be a primary task of the EIT and will be implemented in cooperation with Horizon Europe common corporate services. The reporting and monitoring system for KICs will be built into the overall Horizon Europe monitoring system, in particular by implementing common data models including data collection. The Commission will take part in the co-design of all relevant impact and monitoring indicators and tools developed or applied by the EIT in order to ensure compatibility and consistency with the overall Horizon Europe monitoring system, including the key impact pathways, the criteria framework for European Partnerships and the Strategic Planning Process. Furthermore, EIT will take into account the deployment of the Innovation Radar methodology in Horizon Europe, and will explore how Innovation Radar could be leveraged by the KICs for enhancement of its monitoring activities.

Overall, it will be a responsibility of the EIT to regularly monitor the operational performance of the KICs and to adapt continuously its monitoring systems in line with Horizon Europe monitoring and reporting framework for European Partnerships and in cooperation with the Horizon Europe common corporate services. The results of such monitoring will feed into the KICs business planning processes and into the EIT decision-making on the allocation of the budget and preparation of the framework partnership agreements with the KICs as beneficiaries.

The EIT activities, including those managed through KICs, are expected to have

• (1) 

  economic/innovation impact by influencing the creation and growth of companies, as well as the creation of new innovative solutions to address global challenges, creating direct and indirect jobs and mobilising other public and private investments;

• (2) 

  scientific and educational impact by strengthening human capital in research and innovation, enhancing innovative and entrepreneurial skills both at individual and organisational levels and fostering the diffusion of knowledge and innovation openly within society;

• (3) 

  societal impact by addressing EU policy priorities in the fields of climate change, energy, raw materials, health or food through innovative solutions, engagement with citizens and end-users and by strengthening the uptake of innovative solutions in these areas in society.

The table below provides the non-exhaustive list of management indicators and their targets that would be monitored by the EIT in 2021-2027. These indicators provide the main input and output orientations for monitoring the achievement of EIT’s key objectives for the period 2021-2027 such as fostering innovation and entrepreneurship through better education, increasing its regional impact and openness towards potential partners and stakeholders, and bringing new innovative solutions to global challenges to market.

Additional indicators, including societal impact indicators in the KICs areas of activity, will be developed by the EIT together with the Commission in line with the development of the Horizon Europe programme indicator framework and will reflect the overall approach for European Partnerships to contribute to scientific, economic and societal impact. Overall the alignment of the impact indicators with Horizon Europe will aim at monitoring the progress towards the set objectives over time. This will ensure a comparative evidence-base on results and impacts generated by KICs vis-à-vis the rest of the programme. In addition, the EIT will ensure that the monitoring system would capture progress in relation to activities specific to the KIC model, such as knowledge triangle integration and entrepreneurial skills.These additional indicators will aim at monitoring the progress and impact over time. For example, the indicators on EIT education-related activities (including those supporting the capacities of HEIs) shall monitor human capital skill acquisition (short term), career (medium term) and working conditions (long term), HEIs engagement and capacity improvement (short term) or HEIs role and performance in local innovation ecosystems (medium and long term).

EIT Management Target 2023 Target 2027

Indicators (baseline 2020) (baseline 2020)

No. of entities/organisations 20 % increase 50 % increase participating in EIT and KIC activities

No. of innovations (products 1.500 4.000 and services) launched on the market

Higher Education Institutions 300, out of which 100 750, out of which 450 involved in EIT and KIC from the new action on from new action on activities education education

No. of students involved in 10.000 30.000 EIT and KICs education activities

No. of start-ups supported 300 700

KICs’ co-funding 700 MEUR 1500 MEUR

No. of entities/organisations 50 % increase 100 % increase participating in EIT and KIC activities from regions outside the KICs’ CLC regions

The EIT will ensure that the data it collects through its internal monitoring system, including the results from KICs, are fully integrated in the overall data management system of Horizon Europe programme. The EIT will ensure that detailed information arising from its monitoring and evaluation process are made available timely and are accessible in a common e-database on Horizon Europe implementation. In addition, the EIT will ensure dedicated reporting on quantitative and qualitative impacts, including on committed and actually provided financial contributions.

The EIT will:

• Improve its current monitoring systems and introduce a reporting and monitoring

framework including impact indicators, aligned with the Key Impact Pathways of the [Horizon Europe programme].

• Regularly monitor the KICs operational performance and their outputs, results

and progress towards impact in line with the [Horizon Europe framework].

• Ensure the development of the specific societal indicators in the KICs areas of

activity and its regular monitoring in line with Horizon Europe framework for societal impact.

• Ensure reporting on quantitative and qualitative impacts, including on financial

contributions.

• Ensure access to results and project data from KICs and integrating it in the

overall data management and reporting system of Horizon Europe programme.

• 5. 

  A NNEX 1A

Priority fields for launching new Knowledge and Innovation Communities.

• 1. 

  Cultural and Creative Industries

• 6. 

  A NNEX 1B

  F ACTSHEET ON THE K NOWLEDGE AND I NNOVATION C OMMUNITY “C ULTURAL AND C REATIVE I NDUSTRIES ”

• (7) 

  The Challenge

Cultural and Creative Industries (CCI) can bring a horizontal solution to an array of rising challenges, which are of a permanent nature, and can be addressed through research and innovation activities. These challenges can be grouped into four pillars: 1) Europeans' creativity, cultural diversity and values; 2) European identity and cohesion; 3) European employment, economic resilience, and smart growth; and 4) Europe as a global actor.

Europeans’ creativity and cultural diversity depends on resilient and robust cultural and creative sectors. However those sectors, notably the audio-visual or music sector, are facing a number of challenges as a result of the increased competition from global players and the digital shift.

• Producers, distributors, broadcasters, cinema theatres and all types of cultural

organizations need to innovate in order to attract new generations of audiences.

• The shortage of entrepreneurship and cross-cutting skills in CCI 8 concerns both

emerging sub-sectors as well as very mature ones that undergo a profound digital transformation. These skills are needed for innovation and crucial in light of labour

market changes that the sector is facing.

Societal challenges related to the European identity and cohesion can generally be described in terms of lack of ‘bridges’ connecting different parts of the society including different territories. They include issues related to social exclusion, the need to build closer intercultural links and developing a sense of common belonging based on our cultural diversity and common heritage that could be addressed through more community participation, innovations in design, architecture and the use of public spaces, as well as culture-led social innovation. In particular:

8 Cultural and creative studies in European universities are mostly focused on the “creative part” and their graduates are not always ready to

enter the modern labour market as they lack cross-sectoral (entrepreneurial, digital, financial management) skills. With regards to HEIs, the EU is trailing behind the USA in Communication & Media studies (while EU universities are performing better in more traditional

disciplines such as Art & Design or Performing arts).

• There is limited cooperation between researchers and between research and industry

as well as insufficient coordination of R&D efforts, sharing of methods, results, and best practices. Additionally, most of the research in CCI have not been translated

which leads to repetition, as researchers are often unaware of similar projects.

• The level of integration of creative clusters and innovation hubs is insufficient.

• A significant share of regional smart specialization priorities in Europe refer to

culture under different angles (e.g. cultural heritage, creative industries, etc.). Given the important role of culture and creativity for the economic and social development of cities and regions and their ability to further help address disparity issues across

Europe, the potential of the CCI KIC is high.

Challenges related to European employment, economic resilience, and smart growth, include economic issues such as unemployment (especially youth unemployment) and global competition.

• There is a high market concentration: - around 50% of the total turnover and added

value is generated in Germany, United Kingdom, and France.

• European industries are challenged by digitization and globalization and their

powerful impact on the way artists produce and distribute their works and relate to their audiences. The collapse of DVD markets, new consumer expectations and the continued power of US studios together with the rise of global digital giants like

Amazon, ITunes, Google and Netflix have impacted the traditional value chain.

Finally, the role of Europe as a global actor includes the need to enhance the dissemination of the cultural content created in Europe. Europe needs to remain competitive in the global digital race for creation of new technologies (e.g. AI, IoT, blockchain) for which CCI are important generators of content, products and services globally. Moreover, on a global scale, CCI (e.g. design, architecture, etc.) contribute actively to the sustainable development and drive green innovation, while cultural content (literature, film and the arts) can raise awareness of ecological problems and inform public opinion.

• (8) 

  Relevance and Impact

An EIT KIC on CCI – with its holistic and integrated approach - will help address all challenges defined above. By covering nearly all sectors of our lives, society and economy, such KIC will be highly relevant in terms of economic and societal impact, unlocking strategic opportunities for economic, technological as well as social innovation.

Culture-based and creativity-driven innovations boost European competitiveness either directly by creating new enterprises and jobs or indirectly by creating cross-sector benefits to the wider economy, improving quality of life and increasing the attractiveness of Europe. CCIs are increasingly seen as new sources of smart, sustainable and inclusive growth and jobs. employing already more than 12 million people in the EU, which amounts to 7.5% of all EU people in employment.

The contribution of culture and creativity to innovation is not limited to the direct impact of the CCI, since innovation across-the-board is increasingly driven by non-technological factors such as creativity, design and new organisational processes or business models. In particular, CCI with distinct value chains (i.e. music, design, fashion, audio-visual, video games, architecture …) have a strong innovation capacity in economic terms and are able to drive innovation in other sectors of the economy.

Culture and participation in cultural activities has a direct impact on the well-being of citizens. CCI enhance societal values of identity, democracy and community participation. Culture has a great potential to reinforce a European sense of belonging, where diversity represents an asset. This is of fundamental importance to enable resilience, social access, society cohesion, anti-radicalisation and gender equality, and to tackle Europe’s political uncertainties and need of unity.

An EIT KIC on CCI will empower network opportunities, collaboration, co-creation and know-how transfer between education, research and business, within the cultural and creative sectors and with other sectors of the society and the economy. It will catalyse bottom up and top down initiatives at regional, national and EU levels. It will develop the necessary framework conditions for the creation and scale up of new ventures in innovative ecosystems. It will provide researchers and students in many disciplines (including arts, humanities, business, social sciences and applied hard sciences) and entrepreneurs of the CCI and other sectors with the knowledge and skills necessary to deliver innovative solutions and to turn them into new business opportunities. It will allow further cross-fertilisation with other economic and industrial sectors, acting as an accelerator for innovation.

• (9) 

  Synergies and Complementarities with existing initiatives

A KIC in CCI would be complementary to number of other Union initiatives, as well as such at the level of Member States. The main synergies expected at EU level are presented below.

A KIC on CCI is expected to establish strong synergies with relevant policy initiatives under Horizon Europe Programme, and in particular under Pillar II with the cluster [Inclusive and Secure Society] and its areas of intervention on Cultural Heritage and Democracy. A future KIC could also provide valuable horizontal inputs across various activities to be carried out in the cluster [Digital and Industry], in particular as regards the manufacturing technologies in which the need to develop new products rely heavily on CCI. Furthermore, it could efficiently complement other parts of the Horizon Europe Programme, the intervention of the existing EIT Digital and the actions foreseen under other EU programmes such as InvestEU, Digital Europe or the Cohesion Policy Funds.

The new Creative Europe Programme will be highly relevant for the activities of the KIC on CCI. The Programme elects strands and special calls reflecting some of the already mentioned challenges facing the sector (e.g. creatives’ skills and employment, business models, etc.) and strong synergies and complementarities should be developed. Still under the Creative Europe Programme, and in the context of limited access to finance for the cultural and creative sectors, synergies could be expected with the Cultural and Creative Sector Guarantee Facility, a financial mechanism to help scale up cultural and creative projects by providing insurance to financial intermediaries.

The Smart Specialisation Strategy (S3) platform on Industrial Modernisation has identified a number of R&I strategies that focus on CCI and explore new linkages between local assets, potential markets and societal challenges through the involvement of a large set of entrepreneurial actors. In particular, the promotion of new partnerships between research organisations, enterprises and public authorities is a major concern of S3 strategies, calling for the set-up of new collaborative platforms.

Conclusion

An EIT KIC on CCI is most suited to address the major economic and societal challenges outlined above. Creativity is a key driver of innovation and a KIC on CCI has the capacity to unleash the potential of culture-based creativity and help strengthening Europe’s competitiveness and smart growth.

An EIT KIC on CCI will:

• Reduce the fragmentation of the cultural and creative sectors’ innovation

landscape by fostering the creation of innovation ecosystems that will connect actors and networks across sectors and disciplines at local, regional, national and EU levels.

• Train the next generation of innovators in the CCI sectors by equipping them with

the necessary entrepreneurial and technical skills needed to thrive in a fast changing environment.

• Contribute to the development of the right framework conditions to transform

ideas into new technological developments and social innovation that will improve the quality of life and benefit EU citizens.

• Foster the creation and development of new ventures in the cultural and creative

sectors by mobilizing investment and long-term commitment from the business sector.

• Synergize with the existing KICs, as well as with other European partnerships,

programmes and initiatives to drive innovation beyond cultural and creative industries in other sectors of the economy.

• Strengthen the EU position as a global actor in CCI by harnessing Europeans’

creativity and cultural diversity.

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