Annex to the Strategic Innovation Agenda of the European Institute of Innovation and Technology (EIT) Partial general approach - Hoofdinhoud

Council of the European Union Brussels, 21 February 2020 (OR. en)

6137/20 Interinstitutional File:

2019/0152(COD) i LIMITE

RECH 40 COMPET 50 EDUC 38 CODEC 120

NOTE

From: Permanent Representatives Committee (Part 1)

To: Council

No. prev. doc.: 5987/20

No. Cion doc.: 11227/19+ADD1

Subject: Annex to the Strategic Innovation Agenda of the European Institute of

Innovation and Technology (EIT) Partial general approach

• I. 

  INTRODUCTION

• 1. 

  On 12 July 2019, the European Commission presented, based on Article 173(3) TFEU, its proposals for the Regulation of the European Parliament and of the Council on the European Institute of Innovation and Technology (EIT) and for the Decision of the European Parliament and of the Council on the Strategic Innovation Agenda for the European Institute of

  Innovation and Technology (EIT) 2021-2027, including their impact assessments 1 . A corrigendum to the impact assessments was issued by the Commission on 1 August 2019 2 .

• 2. 

  A financial envelope for the implementation of the EIT of €3 billion (in current prices) is envisaged in the next Framework Programme for research and innovation, Horizon Europe, for the 2021-2027 period.

1 11227/19 + ADD 1-2, 11228/19 + ADD1-2

2 11227/19 ADD 2 REV 1 and 11228/19 ADD 2 REV 1

• 3. 

  Since there is a financial envelope for the implementation of the EIT in the Horizon Europe Framework Programme and as Horizon Europe is linked to the Multiannual Financial

Framework (MFF), absolute amounts in Chapter 4.1 are square bracketed (not part of the

partial general approach). The EIT is however a Union body and not an MFF Programme.

• 4. 

  The European Parliament has appointed MEP Maria da Graça CARVALHO (EPP) as rapporteur on the Strategic Innovation Agenda of the EIT. The European Parliament's Industry, Research and Energy Committee has not yet voted on the file. The European Economic and Social Committee adopted its opinion on 31 October 2019 3 .

II. WORK WITHIN THE COUNCIL

• 5. 

  Following the presentation by the Commission of the two proposals in July 2019, the Finnish Presidency gathered both general and specific written comments from delegations during July and August.

• 6. 

  During the same period, the Research Working Party also considered the Commission's impact assessment. In conclusion, delegations recognised that the Commission's impact assessment had no major omissions or factual mistakes. Accordingly, the Working Party proceeded with the examination of the proposals 4 .

• 7. 

  Based on the comments collected during July and August, the Finnish Presidency presented at the Working Party on 2 October 2019 a first compromise text on Annex to the draft Strategic Innovation Agenda of the EIT (EIT SIA). Since this meeting, the Working Party has

  examined intensively the compromise texts proposed by the Finnish and the Croatian Presidencies.

3 14042/19 (opinion covers both the EIT Regulation and the Strategic Innovation Agenda)

4 12193/19

• 8. 

  The Competitiveness Council of 29 November 2019 took note of the progress report on the

  EIT SIA and its Annex.

• 9. 

  During the intensive discussions at the Working Party under the Croatian Presidency, some important changes have been introduced to the Commission proposal. These concern in

  particular the openness of the Knowledge and Innovation Communities (KICs) of the EIT towards potential new partners, the Regional Innovation Scheme (RIS) of the EIT, the monitoring and evaluation of the EIT and the KICs, the procedure and the list of possible priority fields for the launch of a second new KIC in 2026, the EIT's relation with the KICs after the termination of the framework partnership agreement and the new action supporting the entrepreneurial and innovation capacity of higher education institutions.

• 10. 

  The openness of the EIT KICs towards potential new partners has been reinforced. The

  Presidency compromise text introduces many changes in the Commission proposal to ensure that the KICs become more open and transparent. The EIT will provide stronger incentives for the KICs to strive for new partners. The KICs will be obliged to address the expansion of the partnership in their multiannual strategies, including the establishment of new co-location centres for which the EIT Governing Board will allocate an adequate budget.

• 11. 

  The eligibility criteria for the EIT RIS have been adapted to ensure inclusiveness and more stability for modest and moderate innovators during the implementation period of the SIA. Moreover, the maximum EIT budget devoted to implementing EIT RIS activities has been set at 15% of the overall EIT funding for existing and new KICs.

• 12. 

  The procedures for monitoring and evaluation of the KICs have been clarified and streamlined. The results of the monitoring will determine the EIT Governing Board's decisions on corrective measures to be adopted in case the KICs deliver inadequate results or lack European added value. The Presidency compromise proposal also introduces new indicators for the monitoring of the progress towards the financial sustainability and the establishment of new co-location centres.

• 13. 

  The procedure for the launch of a possible second new KIC has been streamlined. A list of possible priority fields for a second new KIC has been added in Annex 1A of the SIA, and the point in time for the launch has been moved to 2026 in order for the Commission to be able to better take into account the Horizon Europe strategic planning process when assessing the list.

• 14. 

  The way in which the EIT will develop the general principles for its relation with the KICs after the termination of the framework partnership agreement has been clarified. Moreover, the Presidency compromise proposal makes it clear that the “Memorandum of Co-operation”, that the EIT may conclude with a KIC for which the Framework Partnership Agreement is to be terminated in the course of the 2021-2027 programming period, should define the rights and obligations linked, inter alia, to the continuation of the knowledge triangle activities, the maintenance of the KIC's ecosystem and network and the conditions for participation in EIT competitive calls for some specific activities, where relevant, e.g. cross-KIC activities.

• 15. 

  The Presidency compromise text also clarifies that the new action proposed by the

  Commission supporting the entrepreneurial and innovation capacity of higher education institutions (HEIs) will be launched as a pilot. This is also reflected in the allocation of the EIT budget. Special attention will be paid to HEIs from countries (and regions in those countries) that are moderate and modest innovators in order to reinforce their innovation capacity. Furthermore, a majority of funding per project will go to the HEIs from outside the KICs. This is a way to further reinforce the openness of the KICs towards potential new partners.

• 16. 

  The Presidency's compromise texts on the draft Strategic Innovation Agenda of the EIT were examined at the Research Working Party meetings on 20 and 23 January and 6, 10 and

  13 February 2020. Based on the discussions, the Presidency introduced further changes in the text in order to prepare the compromise text for Coreper.

• 17. 

  On 19 February 2020, Coreper discussed the main outstanding issues presented in the

  Presidency compromise text 5 .

• 18. 

  Relating to the question of allocating a fixed share of the budget to the opening by the EIT

  KICs of new co-location centres, the discussion in Coreper showed that most Member States consider it important that an adequate budget be allocated for this purpose. A majority of Member States however did not support fixing a specific share of the budget. The Presidency therefore concluded that no changes were necessary in the current compromise text relating to this issue.

• 19. 

  The discussion in Coreper also showed that as far as the structure and allocation of the EIT budget is concerned, most Member States support the Presidency compromise text. Some

  Member States considered that the proposed budget share of 3% to be allocated to the pilot for the new action supporting the entrepreneurial and innovation capacity of HEIs should be limited to 2%, whereas one Member State would have liked to see 5% of the budget allocated to this pilot. Moreover, some Member States considered that the maximum budget share proposed to be allocated for the EIT RIS activities should be 20%. Taken that a majority of Member States considered that the Presidency compromise text constitutes a balanced compromise, the Presidency concluded that no changes were necessary in the current compromise text relating to the EIT budget.

• 20. 

  Coreper also discussed the inclusion of the Outermost Regions 6 in the annex to the SIA, as proposed by the French delegation. This delegation considered that the specific situation of these territories has a direct impact on their capacity for innovation and their possibilities to participate in KICs and that they should either be considered as eligible for the RIS, or their specific situation should be reflected in the specific objectives of the EIT.

5 5987/20.

6 the special status of which is recognised in Article 349 TFEU.

The proposal to include the Outermost Regions in the annexed text received broad support at Coreper. The Presidency proposed to include these territories as eligible for the RIS, and to reflect this in the core text of Chapter 3.2 ("Increasing the regional impact of the EIT") of the Annex to the SIA. This solution was acceptable for most delegations. The Hungarian, Irish, Lithuanian, Latvian and Polish delegations indicated that they were not satisfied with the solution and that they have a scrutiny reservation on the proposed text. A number of delegations considered that the budget share for the RIS should be increased if the Outermost Regions become eligible for the scheme, while a number of Member States that had expressed support for the inclusion of the Outermost Regions opposed any further changes to the budget share for the RIS. The Presidency concluded that there was sufficient support for the inclusion of the reference to Outermost Regions in Chapter 3.2 of the annexed text.

• 21. 

  Compared to the Presidency compromise text submitted to Coreper, the above-mentioned change is indicated in the annex in bold underline.

• 22. 

  Following the discussion, Coreper decided to forward the text in the annex to the Council

  (Competitiveness) for its meeting on 27-28 February 2020, with the agreed change as indicated above.

• 23. 

  The Commission reserves its position on the entire compromise proposal.

IV. CONCLUSION

• 24. 

  The Council is invited to adopt the partial general approach as set out in the annex to the present note.

ANNEX

ANNEX TO THE PROPOSAL FOR A DECISION OF THE EUROPEAN PARLIAMENT AND OF THE 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

ANNEX

Table of contents

• 1. 

  Introduction ................................................................................................................... 9

1.1. Background ................................................................................................................. 10

1.2. Key challenges ............................................................................................................ 12

1.3. Positioning in Horizon Europe ................................................................................... 13

• 2. 

  Raising the bar: the EIT strategy in 2021-2027 .......................................................... 15

2.1. Specific objectives of the EIT ..................................................................................... 16

• 3. 

  Boosting the innovation talent and capacity of Europe: Key actions ......................... 16

3.1. Support to existing KICs ............................................................................................. 17

3.2 Increasing the regional impact of KICs ...................................................................... 18

3.3 Launch of new KICs ................................................................................................... 20

3.4. Supporting the entrepreneurial and innovation capacity of higher education ............ 21

3.5. EIT cross-cutting activities ......................................................................................... 24

3.5.1. Communication ........................................................................................................... 24

3.5.2 Identify and share good practices with stakeholders .................................................. 26

3.5.3 International cooperation ............................................................................................ 27

3.6. Making it work: Mode of operation ............................................................................ 27

3.6.1. KIC operational model ................................................................................................ 28

3.6.2. KIC funding model ..................................................................................................... 30

3.6.3 EIT relation with KICs after the termination of the

framework partnership agreement .............................................................................. 33

3.7. Synergies and complementarities with other programmes ......................................... 33

• 4. 

  Resources .................................................................................................................... 36

4.1. Budget needs ............................................................................................................... 36

4.2. Impact (monitoring and evaluation)............................................................................ 38

4.2.1. Reporting and Monitoring .......................................................................................... 38

4.2.2. Evaluation, interim review and comprehensive assessment ....................................... 42

• 5. 

  Annex 1A .................................................................................................................... 44

• 6. 

  Annex 1B .................................................................................................................... 44 1. I NTRODUCTION

This Strategic Innovation Agenda (SIA) sets out the priority fields and strategy of the European

Institute of Innovation and Technology (EIT) for the period 2021-2027. It defines its objectives, key actions, mode of operation, expected results and resources needed. The SIA ensures the necessary coherence of the EIT with the [Horizon Europe proposal], which is the Union framework programme for research and innovation for the period 2021-2027.

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 7 . 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 coherence with the Framework Programme activities, as well as synergies with other relevant Union programmes and consistency with EU priorities and commitments, including those related to the European Green Deal. It also aims at increasing complementarity and synergies between the EIT activities and national and regional funding programmes and priorities.

7 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. Background

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 EIT operates mainly through Knowledge and Innovation Communities (KICs), which are largescale European partnerships as referred to in Horizon Europe 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.

Each KIC has been organised around co-location centres (CLCs 8 ) 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 KIC partner.

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

 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 9 , in particular at master and doctoral level. The EIT´s education agenda is key

for developing highly entrepreneurial and skilled innovators;

8 A co-location centre is a physical hub which promotes linkages and active collaboration among knowledge triangle actors and acts as a focal point for knowledge exchange through which KICs' partners can access facilities and the expertise needed to pursue their common objectives.

9 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.

 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 focus on global challenges through the integration of the knowledge triangle, integrating higher education activities in the innovation value chain, is a distinctive feature of the EIT compared to other innovation instruments. 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 framework conditions that are essential for a well-functioning innovation ecosystem to grow and innovation to thrive. The EIT has also set the objective for the KICs to become financially sustainable, which is a unique feature that aims at 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 and the knowledge triangle activities beyond the period covered by the grant agreements.

The EIT thus offers a dynamic platform for launching, scaling up, monitoring and supporting KICs with strong network effects and positive spill-overs. 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 shall 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, started their operations in 2019.

By 2019, there were more than 600 businesses, 250 HEIs, 200 research organisations, and more than 50 civil society organisations and authorities participating in the eight EIT KICs.

In the backdrop of persisting regional disparities in innovation performance in Europe, 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 opportunities for countries (and regions in those countries) with modest and moderate innovation performance as defined by the European Innovation Scoreboard (EIS) to engage in knowledge triangle activities as part of a KIC community.

1.2 Key challenges

During the past decade, 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, biodiversity loss and unsustainable use on natural resources, digital and social transformation, demographic shifts or the future of healthcare and food.

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 across the Union. The EIT is in a unique position to deliver on this in the Horizon Europe framework.

Second, physical proximity is one of the key enabling factors 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 are well suited to contribute to strengthening local innovation ecosystems with a strong European dimension.

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 to research and innovation. Strengthening the knowledge triangle integration through KICs, including through the involvement of new partners, is a proven way to foster an environment conducive to innovation and is a guiding objective for the EIT.

• 1. 

  3. Positioning in Horizon Europe

With the [Horizon Europe proposal] for a new Framework Programme for 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.

The Horizon Europe Strategic Planning process aims at ensuring coherence between the EIT activities and the rest of Horizon Europe. The EIT shall contribute to the strategic coordinating process for European Partnerships. The EIT shall continue to strengthen innovation ecosystems that help to tackle global challenges, by fostering the integration of the knowledge triangle in the thematic areas of activity of the KICs.

Strong synergies, including through co-operation at governance level, between the EIT and the

European Innovation Council (EIC) 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, including business acceleration services and trainings.

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 support offered by the EIC Accelerator and/or by the financial support offered by InvestEU instruments. Furthermore, the EIT will 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.

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.

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 at all stages of their career.

The EIT will contribute to the [Global Challenges and European 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 e.g. by supporting demand-side measures and providing exploitation services to boost technology transfer and accelerate the commercialisation of results achieved.

Opportunities for synergies will be also explored between the Widening participation and strengthening the European Research Area part of Horizon Europe and the outreach activities supported by the EIT. In particular, target entities of the Horizon Europe Widening participation and strengthening the European Research Area part will be able to leverage on EIT expertise and support as well as for EIT outreach activities.

• 2. 

  R AISING THE BAR : THE EIT S TRATEGY IN 2021-2027

During the period 2021-2027, the EIT shall continue to support the KICs in order to strengthen the innovation ecosystems that help to tackle global challenges, in synergy with the rest of Horizon Europe and other Union programmes. It shall 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, contributing also to closing the entrepreneurial gender gap and stimulating the creation of innovative companies in close synergy and complementarity with the EIC. In doing so, based on the overarching areas of intervention defined in the [Horizon Europe proposal], the EIT shall in particular:

• (1) 

  Strengthen sustainable innovation ecosystems across Europe;

• (2) 

  Foster innovation and entrepreneurial skills in a lifelong learning perspective;

• (3) 

  Bring new solutions to market to address global challenges;

• (4) 

  Ensure synergies and value added within Horizon Europe.

2.1 Specific objectives of the EIT

In line with the identified challenges that the EIT is facing 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 openness and impact of KICs and knowledge triangle integration across the Union;

(b) Increase the entrepreneurial and innovation capacity of the higher education sector by promoting and supporting institutional change in higher education institutions (HEIs) and their integration in innovation ecosystems;

(c) Increase the regional and local outreach of the EIT and its KICs in order to address disparities in innovation capacity and to enhance knowledge and innovation diffusion across the Union.

By delivering on these objectives, the EIT will thus contribute to the overall achievement of

Horizon Europe scientific, economic/technological and societal impacts.

• 3. 

  B OOSTING THE I NNOVATION T ALENT AND C APACITY OF E UROPE : K EY ACTIONS

The EIT strategy for 2021-2027 shall focus on actions where the EIT will add value at the EU level and contribute to achieving the objectives of Horizon Europe. First, the EIT shall continue to support the innovation capacity and ecosystems across the Union through the KICs, their further development, openness to new partners and expansion. Secondly, building on its experience with the knowledge triangle integration, the EIT shall steer the support and development of the entrepreneurial and innovation capacity in the higher education sector implemented through the KICs. Finally, through more effective cross-cutting measures, the EIT shall strive to ensure that its impact at the EU level increases. In addition, the EIT shall also improve its operations in order to increase its effectiveness, efficiency and impact.

3.1. Support to existing KICs

The EIT shall strengthen innovation ecosystems by continuing to support existing KICs in addressing global challenges through the integration of the knowledge triangle at EU, Member States, regional and local levels. In order to implement this task, a large share of the EIT budget is to be dedicated to support KICs, and the EIT shall further strengthen its platform for launching, growing, monitoring and supporting KICs. The EIT shall ensure that KICs continue to pursue financial sustainability in order to achieve financial independence from the EIT grant at the latest after 15 years through leveraging public and private investment, while keeping focus on integration of knowledge triangle activities.

The EIT shall ensure that KICs develop and implement a strategy to create interfaces, collaboration and synergies with relevant European Partnerships, missions and the EIC as well as other relevant Union initiatives and programmes. Beyond financial support, based on lessons learned, the EIT shall provide strategic supervision to KICs, as well as guidance on horizontal and specific issues.

The EIT shall define areas of and promote stronger cross-KIC collaboration on topics of strategic and policy relevance. The EIT shall strengthen coordination between KICs in areas of common interest, in particular, by fostering exchanges of experiences and good practices between KICs and collaboration between them (cross-KIC activities 10 ) on both thematic and horizontal topics. Cross-KIC activities have highest potential where several KICs already address 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 shall encourage such activities and take an active part in defining the content and structure of the cross-KIC activities. It shall 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. EIT shall also facilitate the establishment of cross-KICs shared services aimed at jointly handling operational tasks common for all KICs.

10 Cross-KIC activities are those activities that aim at enhancing the cooperation and synergies between KICs, at fostering a more inter-disciplinary approach and at creating a critical mass among KICs to tackle topics of common interest.

3.2 Increasing the regional impact of KICs 11

The EIT shall further increase its regional impact through an enhanced openness of the KICs towards wide range of potential partners and stakeholders across the Union and through a better articulated regional strategy of KICs, including links to the relevant Smart Specialisation Strategies. In particular, the EIT shall ensure that KICs have an inclusive approach. Each KICs shall be required to develop and implement a strategy aiming at strengthening their relationship with national, regional and local innovation actors. The EIT shall actively monitor its implementation. A “place-based” innovation approach is to be integrated within the KIC’s multiannual 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, as well as with other local innovation actors. KICs should demonstrate links with Smart Specialisation Strategies, where relevant, and with the activities of relevant thematic platforms and interregional initiatives, including the Managing Authorities of ESI Funds. The EIT shall also monitor how CLCs and RIS entities operate and how they integrate in the local innovation ecosystems.

11 HU, IE, LT, LV, PL: scrutiny.

The EIT shall ensure that EIT RIS activities shall be used to attract and facilitate integration of potential new partners that add value to the KICs, thus extending EIT’s pan-European coverage, and are fully integrated in KICs’ multi-annual strategies.The EIT Regional Innovation Scheme, steered by the EIT and implemented by the KICs, has been so far run on a voluntary basis. From 2021 on, the EIT RIS activities shall become mandatory and an integral part of the KIC’s multi-annual strategy. The EIT shall continue to provide guidance and support to KICs in the preparation of multi-annual EIT RIS strategies and in their implementation. EIT RIS activities shall continue to support the innovation capacity of countries (and regions in those countries) that have modest and moderate innovation performances according to the European Innovation Scoreboard 12 , as well as the Outermost Regions, in order to foster their integration in the KICs' communities. The EIT budget devoted to implementing EIT RIS activities shall be at least 10 % and maximum 15% of the overall EIT funding for existing and new KICs, thereby increasing the number of KIC partners from targeted regions.

Activities supported through the RIS shall aim to:

 improve the innovation capacities of the local ecosystem, via capacity building activities and

closer interactions between the local knowledge triangle innovation actors (e.g. clusters, networks, public authorities, HEIs, research organisations, VET institutions, SMEs) and their

activities;

 support the objective of attracting new partners in KICs and link local innovation ecosystems

to pan-European innovation ecosystems.

12 For the period 2021-2024, countries eligible for EIT RIS activities are those identified as either “moderate” or “modest” innovator in at least one of the three European Innovation Scoreboard (EIS) annual reports issued in 2018, 2019 and 2020. For the period 2025-2027, countries eligible for EIT RIS activities are those identified as either “moderate” or “modest” innovator in at least one of the three European Innovation Scoreboard (EIS) annual reports issued in 2021, 2022 and 2023.

3.3 Launch of new KICs

In order to contribute to addressing new and emerging global challenges, the EIT shall launch calls for establishing new KICs in selected thematic areas of strategic importance, starting with a KIC in the field of Cultural and Creative Industries.

The priority field for launching a KICs in 2023 and the list of possible priority fields for a second new KIC in 2026 are 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 2023 with a call for proposals to be published in 2022. 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. 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 2026, with a call to be published in 2025. To this end, the Commission shall, by 2024, assess the relevance of the list of possible priority fields in Annex 1A and may, where appropriate, submit a proposal for an amendment to Annex 1A and Annex 1B, taking into account the contribution of the EIT Governing Board as well as the Horizon Europe Strategic Planning process.

In case additional budget to that of the EIT would become available, other new priority fields for potential new KICs could be identified following the above procedure.

The criteria for selecting new KICs shall be aligned with those set for the selection of European

Partnerships defined in Annex III of the [Horizon Europe Regulation], in particular openness, transparency, EU added value, coherence and synergies. Those criteria shall be included in the KIC Call for proposals and assessed during the evaluation.The new KICs will also support delivery on EU policy priorities such as missions and Sustainable Development Goals.

3.4. Supporting the entrepreneurial and innovation capacity of higher education

In cooperation with the Commission, the EIT shall design and launch a pilot to support the development of innovation capacity in higher education, which will be implemented through the KICs, starting in 2021. Through the knowledge triangle integration model, the EIT is bridging 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 must be further extended beyond the KICs’ partners. Higher education institutions across 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. This can be achieved through a clear strategy, a methodological framework and commitment of resources.

Activities shall be implemented in an open and transparent way which will aim at increasing the innovation capacity in higher education, targeting mainly HEIs that are not KIC partners in innovation value chains and ecosystems across the Union. The activities shall address primarily capacity development of higher education institutions including, inter alia: the exchange and implementation of best practices in knowledge triangle integration (including organisational learning, coaching and mentoring); the development of action plans on how to address identified needs in areas such as innovation management, start-up creation and development, technology transfer including IPR management, people and organisational management and engagement with (local) stakeholders and civil society; and the implementation of innovation capacity development action plans and their follow-up. These activities shall also involve other actors of the knowledge triangle (e.g. VET organisations, RTOs, SMEs and start-ups) and shall complement the intervention of the EIT on education as core part of the Knowledge Triangle Integration activities of KICs. The EIT shall promote stronger cross-KIC collaboration within this initiative. The eligibility criteria to be included in the calls shall ensure that the majority of funding per project will go to HEIs from outside of the KICs. The aim is that the impact of the EIT reaches 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. This is 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 also build on policy initiatives such as the HEInnovate 13 and RIIA 14 frameworks that have proven their value in a number of HEIs and Member States across the EU. The EIT shall design the support activities in close collaboration with the Commission ensuring full coherence and complementarity with relevant activities within Horizon Europe, Erasmus and other programmes. The specific details of the implementation and delivery mechanism process shall be further developed and fine-tuned in the first three years and will be subject to monitoring and evaluation during this pilot phase. The evaluation of the pilot phase will be conducted by external experts and the results will be communicated to the Member States' Representatives Group. Based on the results of this evaluation, the Governing Board shall decide whether the action should be continued and scaled up or discontinued.

The Governing Board of the EIT shall steer and supervise the implementation and monitoring of the activities of the KICs. Particular attention shall be paid to ensuring: an open and inclusive approach to attract HEIs beyond the KICs’ partners aiming at wide geographical coverage; an interdisciplinary and inter-sectoral approach; and a link with relevant Smart Specialization Strategies, and the EIT RIS.

13 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/

14 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.

EIT shall strengthen and widen the scope of the EIT Label beyond the KICs to include the

HEIs participating in the action. With the involvement of actors from across the knowledge triangle, the EIT shall strive to 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 shall also extend the EIT Label to lifelong learning activities involving and reaching out to a wider target group of students, adult learners and institutions (including VET institutions) beyond the KICs. The application of the Label beyond the EIT community is expected to have a more structuring effect at all levels (individual, programme and institution). The EIT shall 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.

To ensure the success of this action, the EIT shall provide specific guidance, expertise and coaching to participating HEIs. For this action, the EIT shall target HEIs from across Europe but will pay special attention to HEIs from countries (and regions in those countries) that are moderate and modest innovators that wish to develop their innovation capacities, strengthen their innovation footprint and Smart Specialisation Strategies.

• 3. 

  5. EIT cross-cutting activities

3.5.1 Communication

The EIT shall strive to improve its communication and visibility towards main stakeholders in Member States and ensure the visibility of EU’s support in line with Horizon Europe communication approach. With a growing number of KICs and a new action supporting the entrepreneurial development of HEIs, the EIT shall boost its efforts to increase its recognition as a quality brand for innovation. This 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 Union framework programme for research and innovation.

The EIT shall strive to increase the use of existing EU information networks and provide coordination to their activities in order to ensure better advice and guidance to potential EIT KICs partners. In order to ensure wider dissemination and better understanding of the opportunities offered by the EIT, the EIT will reinforce guidance and assistance on aspects related to participation in EIT KICs across Europe by building on existing networks of information and structures across Europe, in particular the National Contact Points of Horizon Europe. The concrete establishment of EIT National Contact Points within Horizon Europe structure will be decided at the appropriate level together with the Commission. In order to ensure that a large stakeholder community across the knowledge triangle at EU, national, regional and local levels is 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.

The EIT shall 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. The Member States shall be kept duly informed of the performance, achievements and activities of the EIT and KICs. In addition, the Member States’ Representatives Group shall give advice on strategically important issues to the EIT. The Member States’ Representatives Group, together with the EIT, shall also ensure appropriate support to liaise and promote synergies about EIT-supported activities with national or regional programmes and initiatives, and share information about the potential national and/or regional co-financing of those activities.

The EIT shall further increase the visibility of its action towards citizens and its community of stakeholders through the Stakeholder Forum, the EIT Awards and the EIT Alumni. The aim is to promote the interactions with European actors of the knowledge triangle and recognise the most promising entrepreneurs and innovators in Europe.

The EIT shall continue to steer and provide strategic guidance to the EIT Alumni

Community 15 (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.

3.5.2 Identify and share good practices with stakeholders

The EIT shall identify, codify, and effectively share learnings and good practices emerging from EIT-funded activities and engage with EU Member States authorities at both national and regional level and with the Commission, establishing a structured dialogue and coordinating efforts, in order to identify, share and disseminate good practices and learnings. The KICs and the projects supporting innovation and entrepreneurial capacity of HEI are expected to be a valuable source of evidence and experimental learning for policy-makers in the field of research, innovation and education, as well as in different thematic domains.

So far, the good practices and learnings stemming from the KICs have not been sufficiently codified and disseminated effectively. The EIT shall 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].

15 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.

3.5.3 International cooperation

The EIT shall develop broad lines of international cooperation of the EIT and the KICs under the supervision of the EIT Governing Board, in compliance with the Horizon Europe approach to international cooperation and other relevant EU policies, and in consultation with the respective Commission services. Within the scope of the EIT Regulation, the EIT will seek greater impact of its activities through international cooperation and shall coordinate international EIT-funded activities by the KICs. Its focus shall be to align closely with relevant 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, shall focus on effective tackling of global challenges, contributing to relevant international initiatives and the Sustainable Development Goals, ensuring access to talent and enhanced supply and demand of innovative solutions.

3.6. Making it work: Mode of operation

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

3.6.1. KIC operational model 16

The EIT shall ensure that the implementation of the KICs is in full compliance with the respective requirements stemming from the Horizon Europe regulation, including ensuring the transition of existing eight KICs towards delivery of the new implementation criteria of Horizon Europe for European Partnerships. Therefore the EIT shall provide strengthened operational guidance to KICs and continuously monitor the KICs’ performance in compliance with sound management, monitoring and evaluation principles set in the EIT regulation, as well as the principles and criteria set out for European Partnerships in the Horizon Europe regulation and alignment with Horizon Europe priorities and indicators in order to maximize their performance and impact. Appropriate corrective measures shall be taken in case KIC underperforms, delivers inadequate results or lack European added value.

16 IT, LV: scrutiny.

The EIT shall ensure that continuous openness of the KICs will be improved notably by ensuring that KICs apply coherent, clear and transparent accession criteria for new members that add value to the partnerships, as well as other provisions like transparent procedures for preparation of their business plans and by systemically monitoring KICs' activities. KICs shall also run their activities in a fully transparent way and shall remain open and dynamic partnerships that new partners across the Union, including an increasing share of SMEs, that add value to the partnership, can join on the basis of excellence and innovation relevance. 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) and related funding decisions shall be made more transparent and inclusive. The KICs' multiannual strategies shall address the expansion of the partnership, including the establishment of new co-location centres for which the Governing Board shall allocate an adequate budget. When deciding on the funding, the Governing Board shall take into account the progress towards the targets indicated in the multiannual strategies, inter alia, the number of co-location centres. KICs shall increase the openness of calls, in particular for projects that are open to third parties. All these measures will increase the number of participating entities involved in KICs’ activities. Finally, KICs shall report on the involvement of new partners in their regular reporting as one of the elements of their performance-based funding.

As KICs operate across the entire value chain of innovation, the EIT shall ensure an appropriate balance of education, entrepreneurship and innovation activities in KICs Business Plans and that KICs operations will be implemented through a lean and costefficient structure that keeps administrative and management costs to a minimum. EIT shall ensure that KICs deliver their expected impacts through a broad range of activities, identified in the KICs’ Business Plans, which effectively support the fulfilment of their objectives including potential impact on innovation ecosystems at local, regional, national and EU levels. Commitments from each KIC’s partner throughout the contractual duration of the initiative shall be ensured by regularly monitoring the actual partner’s contributions against the original commitments. EIT shall ensure that KICs have a risk management system in place for cases where some partners are not able to meet their original commitments.

3.6.2. KIC funding model

Through a lean and simplified funding model, the EIT is expected to enhance the impact of KICs and contribution of KICs towards reaching the objectives of the EIT and the Horizon Europe Programme as well as incentivise commitment from KICs partners. In order to increase the value added of its support, the EIT shall adapt its funding model. There are four main areas where the EIT shall implement improvements.

Firstly, the EIT shall gradually reduce its funding rate for KIC added value activities in order to increase the levels of private and public investments. The adaptation of the funding model is expected to facilitate the KICs in the transition towards financial sustainability. It is expected to 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. Decreasing EIT funding rates for KIC added value activities shall 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

Up to 50% at EIT Funding

rate Up to 100% Up to 80% Up to 70%

year 12, decreasing by 10% per annum

Figure 4: EIT co-funding rates 2021-2027

Secondly, the EIT shall ensure that the grant allocation process will follow a performance- based funding model. The use of multiannual grants shall be increased. The EIT funding shall be directly tied to progress made in the areas defined in Articles 10 and 11(2) of the EIT Regulation and to the KICs' objectives as laid out in their business plans, and could be reduced, modified or discontinued in case of lack of results. The EIT shall, inter alia, provide stronger incentives to KICs to strive for new partners as well as take corrective measures in particular based on their individual performance in order to ensure the highest level of impact.

Thirdly, the EIT shall apply strict rules for reinforcing the assessment mechanism prior to the expiry of the first 7 years initial period of KIC’s operations in accordance with Articles 10 and 11 of the EIT regulation. This assessment to be undertaken with the help of external experts shall be in line with the best international practice, in line with the monitoring and evaluation criteria set out for European Partnerships in the Horizon Europe regulation. It shall take place before the expiry of the initial seven years period. As a result of the assessment, a decision shall be made by the Governing Board to either continue the financial contribution to a KIC, to modify or to discontinue it (thus not extending the framework partnership agreement with that KIC) and reallocate the resources to better performing activities.The Governing Board shall seek opinion from the Member States Representatives Group prior to taking that decision.

Finally, the EIT shall continue its efforts towards simplification in order to alleviate unnecessary administrative burden 17 of the KIC, allowing the implementation of their annual Business Plan and multi-annual strategy in an agile and efficient way. This may 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 including provisions for performance-based funding, when appropriate, under the respective framework partnership agreements. These multi-annual grant agreements should not exceed 3 years.

17 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).

3.6.3 EIT relation with KICs after the termination of the framework partnership agreement The EIT shall 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. Subject to an in-depth independent study in close cooperation with the Commission, by the end of 2023, the EIT shall define the overall framework for its relations with the KICs for which the Framework Partnership Agreement is to be terminated in the course of the 2021-2027 programming period. Based on the overall framework and subject to a positive outcome of a final review, the EIT may conclude a “Memorandum of Co-operation” (MoC) with a KIC, aiming to maintain active cooperation with it after the termination of the framework partnership agreement. This Memorandum shall include, inter alia:

 rights and obligations linked to the continuation of the knowledge triangle activities as well as

maintenance of the KIC's ecosystem and network, 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; and relations with the EIT Alumni Community;

 conditions for participation in EIT competitive calls for some specific activities, where

relevant, e.g. cross-KIC activities.The Governing Board will take into account the in-depth independent study when defining the types of activities to be supported via competitive calls.

• 3. 

  7. Synergies and 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, while avoiding duplications, 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 is expected to contribute to synergies in the mid to long term beyond Horizon Europe.

Erasmus

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

Cooperation is to 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 may 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 scaling-up of innovative practices developed within Erasmus networks (like the Knowledge Alliances between higher education institutions and businesses) by KICs and vice versa.

 Synergies are to 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)

 The KICs 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, should 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 shall also explore contributing to the skills development initiatives under the Cohesion Policy Funds through exchange of best practices.

 The EIT shall promote, where relevant, the collaboration between the Smart Specialisation

Platforms and relevant KICs in order to facilitate synergies between EIT resources,

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

InvestEU

 EIT KICs shall 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 shall strive to contribute to feed the InvestEU Portal in order to bring investors

and financial intermediaries closer to KICs’-backed ventures, in close collaboration with Commission services and in synergy with the EIC.

Creative Europe

 The new Creative Europe Programme will among others be relevant for the activities of a

future KIC on CCI. Strong synergies and complementarities are to be developed with the programme in areas such as creative skills, jobs and business models.

Single Market Programme (COSME)

 KICs shall 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 shall explore cooperation on the mobility programmes for new entrepreneurs to improve their entrepreneurial skills.

• 4. 

  R ESOURCES

4.1. Budget needs 18

The EIT's budget needs in the period 2021-2027 are EUR [3000] million and are based on two 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 2023 and 2026); and 2) administrative expenditure.

Around EUR [2920] million (97% of the total EIT budget) is envisaged to fund existing and new

KICs of which:

 at least 10% and maximum 15% shall be dedicated for the Regional Innovation Scheme;  maximum 7% shall be dedicated to cross-KIC activities, including competitive calls

addressed to KICs for which the framework partnership agreement is terminated;

 maximum 3% shall be dedicated to a new pilot to help develop the entrepreneurial and

innovation capacity of HEI.

18 HU, LV: scrutiny.

Through the introduction of a gradually decreasing EIT 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 2023 and 2026, 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 shall 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 [80] million for 2021-2027.

4.2. Impact (monitoring and evaluation)

The measurement of EIT’s impact is expected to be continuously improved over the next programming period taking into account the lessons learnt and the experiences gained so far. The EIT shall apply an evaluation, reporting and monitoring framework in accordance with Articles 10, 11 and 19 of the EIT Regulation ensuring coherence with the overall approach taken for Horizon Europe while catering for flexibility. In particular, feedback loops between the Commission, EIT and KICs shall be improved in order to address the objectives in a consistent, coherent and efficient manner.

4.2.1. Reporting and Monitoring 19

The EIT shall improve its current monitoring systems and introduce a reporting and monitoring framework including key performance indicators, aligned with the Key Impact Pathways of the [Horizon Europe programme]. The reporting and monitoring of the KICs operational performance and their results will be a primary task of the EIT and shall be implemented in cooperation with Horizon Europe common corporate services. The reporting and monitoring system for KICs shall be built into the overall Horizon Europe monitoring system, in particular by implementing common data models including data collection stored in a common database. The Commission shall 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. Continuous monitoring, as well as interim review and assessment procedures, including for establishing a sound set of quantitative and qualitative indicators and their related baseline and targets, shall be established by a decision of the Governing Board. Furthermore, EIT shall take into account the deployment of the Innovation Radar methodology in Horizon Europe, and shall explore how Innovation Radar could be leveraged by the KICs for enhancement of its monitoring activities.

The results of such monitoring shall feed into the KICs business planning processes and determine the allocation of the EIT's performance-based funding of the KICs' activities and the preparation of the framework partnership agreements and grant agreements with the KICs as beneficiaries. Furthermore, the results of the monitoring of the KICs is expected to feed into the strategic coordinating process for the European Partnerships.

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

• (1) 

  technological/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;

19 LV: scrutiny.

• (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 creation and 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 endusers

  and by strengthening the uptake of innovative solutions in these areas in society.

The EIT shall 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. Additional indicators, including societal impact indicators in the KICs areas of activity, shall be developed by the EIT together with the Commission in line with the development of the Horizon Europe programme indicator framework and shall 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 aims at monitoring the progress towards the set objectives over time. This is expected to ensure a comparative evidence-base on results and impacts generated by KICs vis-à-vis the rest of the programme. In addition, the EIT shall 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. 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).

The continous monitoring of KICs shall address, inter alia, the following aspects:

 Progress towards financial sustainability

 Progress towards pan-European coverage and openness

 Effectiveness in business acceleration (i.a. high-growth ventures created and supported)

 KIC’s administrative and management costs.

The table below provides the non-exhaustive list of key performance indicators and their targets that is expected to 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 local and regional impact and openness towards potential partners and stakeholders, ensuring balance between revenues and costs, establishment of new co-location centres and bringing new innovative solutions to global challenges to market.

Key Performance 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 285 680

involved in EIT and KIC

activities

No. of students involved in 8.500 25.500

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 shall ensure that the project 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 shall 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 shall ensure dedicated reporting on quantitative and qualitative impacts, including on committed and actually provided financial contributions.

4.2.2. Evaluation, interim review and comprehensive assessment

The periodic evaluations of the EIT activities, including those managed through KICs, shall be carried out by the Commission in line with the provisions of the EIT Regulation and Horizon Europe Regulation. Following Article 19, paragraph 2, of the EIT Regulation, these evaluations shall notably assess the effectiveness, efficiency, relevance, coherence and EU added value of the EIT activities, including through its KICs. They shall be based on independent external evaluations and will feed into the overall interim and final evaluations of Horizon Europe.

Each KIC shall be subject to a comprehensive assessment by the EIT with support of external xperts before the end of the 7 th year of the Framework Partnership Agreement, as well as to a final review before its end in case of extension. On the basis of the first assessment, the Govening Board shall decide on whether to extend the FPA beyond the first 7 years, while the final review shall be used as a basis to negotiate the possible MoC. In these evaluations, in line with Article 11, paragraph 2, of the EIT Regulation, the EIT Governing Board shall take into account in particular the monitoring criteria set out for the European Partnerships in the Horizon Europe regulation, the achievement of KIC’s objectives, and its coordination with other relevant research and innovation initiatives, the achieved level of financial sustainability, KIC’s capacity to ensure openness to new members and its achievement in attracting new members, within the limits of the Union financial contribution referred to in Article 20 of the EIT Regulation, the EU added value and relevance with regard to the objectives of the EIT.

In addition, in line with Article 11, paragraph 1a, of the EIT Regulation, the EIT, under the supervision of the Governing Board, shall prepare interim reviews of the KICs performance and activities covering their first three years of the framework partnership agreement (i.e. the KICs’ start-up phase) and, if it is the case, the three years following its extension (i.e. the maturity phase). Those reviews shall be based on the annual monitoring performed by the EIT; they shall help the EIT Governing Board to get early indications on KICs’ performance with respect to their strategy and targets, as well as the compliance to EIT Governing Board indications.

In line with Article 11, paragraph 3, of the EIT Regulation, in the event that the continuous monitoring, interim reviews or the comprehensive assessments of a KIC show inadequate progress in areas referred to in Article 10 or lack of European added value, the Governing Board shall take appropriate corrective measures. The corrective measures may take the form of reduction, modification or withdrawal of the EIT financial contribution, as well as binding recommendations related to KICs’ activities or suggestions for adaptations of its delivery and operational models.

The results of these interim reviews and evaluations shall be made publicly available, communicated to the Member States' Representatives Group and reported to the strategic coordinating process for European Partnerships.

• 5. 

  A NNEX 1A

The priority field for launching a new Knowledge and Innovation Community in 2023 is:

Cultural and Creative Industries.

The list of possible priority fields for launching a second new Knowledge and Innovation

Community in 2026 is:

 Water, Marine, and Maritime

 Security and Resilience

 Inclusion, Integration and Migration

• 6. 

  A NNEX 1B

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

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 20 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 inclusive and accessible community participation, innovations in design, architecture and the use of public spaces, as well as culture-led social innovation. In particular:

 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.

 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, arts, 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.

20 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).

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.

 Creative, cultural and artistic productions often face the challenge of monetarizing their

output and products, therefore creating highly precarized areas of work. New innovative ways

of supporting micro, small and medium scale creative and cultural organizations and

enterprises should be found.

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, in addition to its self-standing value, raise awareness of ecological problems and inform public opinion.

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, arts, 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 and social inclusion. 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.

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. Under the InvestEU, 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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