building a bridge to brussels

Innovation in South Holland and EU2020Building a bridge to brussels

With support from the City of Delft

Colophon© Kennisalliantie 2011With support from City of Delft AuthorsDamien van der BijlWim EijkelenburgLeen VerkadeJasiek Tabeau KennisalliantieCrommelinplein 12627 BM DelftThe Netherlands [email protected]

Building A Bridge to BrusselsINNoVaTIoN IN SoUTH HoLLaND aND S EU2020

PREFaCE

SUMMaRY

1. SoUTH HoLLaND’S ECoNoMY aND THE RELEVaNCE oF THE EU 1.1 SoUTH HoLLaND: ECoNoMIC TRaNSFoRMaTIoN IN PRoGRESS 1.2 EURoPE 2020: FoCUS oN REGIoNaL ECoNoMIC PoLICY

2. USE oF EU RESoURCES IN SoUTH HoLLaND 2.1 THE EU BUDGET FoR SUBSIDIES 2.2 CoHESIoN aND STRUCTURaL FUNDS 2.3 RESEaRCH 2.4 INVESTMENT EIB 2.5 CoNCLUSIoN

3. SME’S IN SoUTH HoLLaND aND USE oF EU RESoURCES 3.1 CoNCLUSIoN

4. DEVELoPMENTS IN EU PoLICY 4.1 EU 2020 & THE BUDGET 2014 – 2020 4.2 THE FUTURE oF CoHESIoN FUNDS aND THE FRaMEWoRK PRoGRaM 4.3 CoNCLUSIoN

5. BUILDING a BRIDGE To BRUSSELS 5.1 CURRENT LINKS To EURoPE 5.2 BRIDGE 5.3 CoNCLUSIoN

aTTaCHMENTS

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PREFaCE

South Holland is the core of the Dutch economy, with a wide variety of industries and close inte-gration of supply chains. The characteristic industries, such as Transport & Logistics, Petrochemi-cal activities and Glasshouse Horticulture are the result of long historical developments and remain important drivers for economic growth. However, global developments can be identified that pose serious challenges to a sustained competitiveness and vitality of the regional economy. It is widely recognised that Innovation, Regional Economic Strategies and Entrepreneurship are key concepts for making a successful transition.

The European Union is committed to support its regions in this transition. There is a wide range of instruments that facilitate regional strategies, promote cross-regional links and support strategic R&D investments. With an expected decline in national instruments due to budgetary restraints, European regions will look more and more to the EU for support of their strategies.

It is not really clear to what extent we use these instruments in South-Holland, whether we do this well, and how we can do this better. This situation has been recognised by Kennisalliantie South-Holland and Delft municipality, who together have looked into possible roles the European Union can play in support of the regional innovation strategy.

There are several aspects to the role of the EU for the innovation-economy of South-Holland. This report will discuss two of them, and their relation to each other. The first is defined by the possibilities the European Union can offer, and how effectively we make use of them. The second is defined by the benefits of a better regional organisation of our dealings with the EU.

Several studies have recently been carried out to determine the state of the regional economy of South Holland. These studies include the ‘Economische Monitor Zuid-Holland’ (Bureau Louter, Kennisalliantie, Provincie Zuid-Holland), the oECD report ‘Higher Education and regional and city development, Rotterdam The Netherlands’ (oECD), and ‘Een nieuwe economische agenda Zuid-vleugel 2010-2020’ (Roland Berger, Bestuurlijk Platform Zuidvleugel). The latter is of particular significance as it provides the start of the process towards creating a framework between public authorities in the region for the coordination and execution of economic policy.

What is missing in recent strategies and reports is that there is little or no attention for the role of Europe in support of South Holland’s ambitions. To profit more from the EU instruments, the Kennisalliantie South-Holland, with support from the City of Delft, has looked into possible ways to boost the innovation economy and the role the European Union can play in that process. This present study does not pretend to replace the framework set by the Economic agenda; rather, it argues that the framework can be made more complete with the addition of a ‘European Para-graph’.

The research has been carried out in deliberation with many of the stakeholders: representatives from municipalities and the Provincial government, agentschap.NL, research institutes, universi-ties, entrepreneurs and officials in Brussels have contributed to the vision and proposals laid out in this report. a list of all respondents and informants can be found in the appendices. We thank all the respondents for their input and hope that our suggestions can help them in their work. We will certainly make an appeal for your involvement in the implementation of the recom-mended actions. To investigate the point of view of SME’s in South Holland, a survey was sent out to 1700 innova-tive firms in South Holland. of these, a total of 221 firms completed the survey. We thank the entrepreneurs for taking the time to complete the questionnaires and offering their practical

PREFaCE

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insights and experiences.

The initial research findings were discussed in a workshop in June 2010. The workshop was attended by 26 representatives from the region and demonstrated a significant interest in the topic. The key conclusions from the workshop have been incorporated throughout the report. The full list of participants and a brief summary of the meeting is provided in the appendices. We thank the participants of the workshop for sharing their insights and constructive suggestions.

If we are to summarise the findings in one word, we would choose ‘Together’. South Holland has an enormous potential for making a successful economic transition, based on the strong tradi-tional industries, a first class research infrastructure, and top-level universities as a continuous source for creative talent. The challenge is to act ‘Together’ in order to show the world what a great place South Holland is for business, innovation and entrepreneurship.

The authors

PREFaCE

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SUMMaRY

The region of South Holland lacks coherence in effectively dealing with the European programs. With a decline in national funding for regional economic policy and innovation, it may be worth-while to look at the EU. South Holland’s Economic agenda 2010-2020 does not currently include a focus on the European dimension. This report by the Kennisalliantie, with support from the City of Delft, gives insights and suggestions for how the link between South Holland and Brussels can be more effectively organized.

SME’s play an important role in regional innovation systems. In addition, EU programs will place more emphasis on the participation of SME’s. However, SME’s in South Holland are not strongly involved in innovation project or programs with a European dimension. Those SME’s that do participate in EU programs evaluate this positively. at the same time, severe obstacles can be identified, as well as a need for support in accessing EU Innovation programs.

The European Commission has recently launched a renewed strategy: EU2020. Expected devel-opments in the EU policy framework are largely in parallel with the ambitions of South Holland as formulated in the Economic agenda. Many topics in South-Holland are very good matches for the Flagship framework, which can serve as a basis for EU investment in the programs.

The following recommendations can be made:

§ Improve participation by SME’s and the private sector in general in the Framework Program; use the capabilities of public research institutes and universities

§ SME’s in South Holland see a large role for the regional governments and/or a Regional Development agency in providing this support.

§ Move pro-actively in the pursuit of new strategic developments such as the KIC’s and RoK programs.

§ Make sure the objectives of the economic agenda are covered in the next EFRD program for West-Holland

§ Channel the remaining EFRD funds of the current period towards implementation of the economic agenda

§ Investigate if and how the Capacities program can be used for strengthening the regional innovation strategy and implementation

§ Investigate the full spectrum European instruments that can be used for innovation in South Holland, such as Interreg, and the European Investment Bank

To make full use of the opportunities offered by the new EU2020 strategy, South Holland needs to build a ‘Bridge to Brussels’. Many elements of such a bridge are already in place: whit limited investment, a much stronger impact can be achieved. The Bridge to Brussels and the above mentioned recommendations can be realized through a stronger executive organization and improved regional cooperation.

SUMMaRY

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The stronger executive organization is needed in order to:

§ connect European activities with the strategic economic agenda

§ facilitate the regional networks and flow of information with regards to European opportunities and developments

§ institute a hands-on ‘task force’ to analyse the driving sectors in light of the EU flagships

§ start participating in European networks

§ elaborate the lobby strategy for South Holland

reading guideChapter one describes the economy of South Holland and the EU. In chapter two we focus on what European subsidies there are and to what extent these are used in South Holland. In chap-ter three, we focus on the role of SME’s in the innovation economy, and to what extent they use the several EU resources. Data on the use of EU subsidies by South Holland’s SMEs have been gathered through a survey of more than 250 SME’s in the region.

In chapter four we will focus on the current developments in the EU, and trends in EU thinking with regards to innovation, regions and the role of SMEs. Finally, in chapter five we will present our recommendations to boost the effectiveness of innovation and of the links towards Brussels.

strAtegy& vision

internAl networks

investmentprojects

europeAnnetworks

loBBy inBrussels

SUMMaRY

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1. SoUTH HoLLaND’S ECoNoMY aND THE RELEVaNCE oF THE EU

This chapter highlights the key strengths and issues for the regional economy of South Holland, the general role of the EU in Innovation Policy and the framework of the research presented in this report.

Innovation and the creation of knowledge is crucial to a modern economy, like the one we have in South-Holland. The Innovation-economy in the region is, despite the presence of world-class research institutes, a well educated workforce and a large variety of entrepreneurs, falling behind compared to its competitors. one of the problems is a lack of cooperation between the different actors in the area: governments, corporations, research institutes, universities, colleges and other schools.

one of the places where it pays to have well attuned organised lobby, is the European Union. The European has various instruments, which can assist in the development of innovation. as a result of the lack of cooperation, these instruments are not used most effectively by the region.

To profit more from the EU instruments, the Kennisalliantie South-Holland and Municipality of Delft, have looked into possible ways to boost the innovation economy and the role the Euro-pean Union can play in that process. Therefore, the research question is:

“How can the players in the innovation-economy be organised better, both for the purpose of increasing the effectiveness of the innovation-economy and the utilization of opportunities in the European Union?”

1.1 SoUTH HoLLaND: ECoNoMIC TRaNSFoRMaTIoN IN PRoGRESSSeveral studies have recently been carried out to determine the state of the regional economy of South Holland. These studies include the ‘Economische Monitor Zuid-Holland’ (Bureau Louter, Kennisalliantie, Provincie Zuid-Holland), the oECD report ‘Higher Education and regional and city development, Rotterdam The Netherlands’ (oECD), and ‘Een nieuwe economische agenda Zuid-vleugel 2010-2020’ (Roland Berger, Bestuurlijk Platform Zuidvleugel). The latter is of particular significance as it provides the start of the process towards creating a framework between public authorities in the region for the coordination and execution of economic policy.

the economic monitor of south HollandThe Provincial government and the Kennisalliantie have published an Economic Monitor in 2009. The Monitor surveys the macro-economic parameters of the economy, as well as indicators for innovation performance.

Given the situation in 2009, the report sets out with an assessment of the impact of the eco-nomic crisis. In general, South Holland has performed relatively well during throughout 2009. Unemployment is the most relevant indicator, and South Holland has been less affected than the Dutch economy on average. It should be noted, however, that there are strong sub-regional differences. Unemployment has risen strongly in the Southern part of the Province (around Rot-terdam) which shows the decline of world trade and the effects on the Port of Rotterdam and related industry. The area around The Hague seems to have been the least affected, which can be explained by the strong presence of the public administration. This means that South Holland remains fragile to unemployment effects as a result of strong down sizing by the national govern-ment.


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In terms of Innovation performance, the data show a strong discrepancy between the input indicators and the output indicators. South Holland has good levels of public R&D spending, as well as high educational levels and numbers of students. However, this does not materialize into innovations by the private sector. South Holland’s companies lag in the number of product and process innovations, as well as in the percentage of earnings from innovative products and ser-vices. The notable exception is the Greenport region between Rotterdam and The Hague, which has a genuinely innovative character.

In addition to the macro-economic data, the Monitor entailed a survey of entrepreneurs in South Holland. Respondents were asked to assess the South Holland innovation system on a number of parameters. The results corroborate with the analysis of macro-economic data: South Hol-land has a very good research base, and highly valued universities. Entrepreneurs also value the complete value chains they can find in the mature economy of the region. However, they do see a number of areas for improvement:

§ mid-level education can be improved: the scores are much lower than those for the higher education institutes

§ economic policy needs to be improved: there is an abundance of different programs which may be confusing to entrepreneurs

§ quality of life can be improved: in particular the cost of living for employees are seen as high, placing an upward pressure on wages

The Economic Monitor shows a robust, well developed economy. The challenges are in dealing with the increased dynamics of the global economic system. South Holland is not particularly entrepreneurial, nor is it very innovative, compared to the top regions of Europe. on top of that, there is a large presence of the public sector, with the location of the national government in The Hague, which makes the region sensitive for announced budget cuts. Finally, there are the larger social and economic developments that create both challenges and opportunities for the strengthening of South Holland’s economy, such as demographic changes, climate changes, and scarce resources.

the economic Agenda 2010-2020Recognizing the challenges outlined above, the region’s public authorities have set out to define a new economic strategy. The Economic agenda 2010-2020 aims to make South Holland one of the top economic regions in Europe by 2020. The driving sectors are the engines for any econom-ic growth. Together, they can create additional growth of €24b in 2020. Including the indirect effect on supporting sectors, this can increase to €30-40b by 2020. The authors of the Economic agenda have looked at top European regions to figure out the best practices and lessons. They conclude that successful regions are characterized by diverse and strongly integrated economies, supported by regional development policies focused on key sectors. If South Holland is to apply the lessons to its own strategy, the Economic agenda must create a push for the most promising driving sectors. The sector specific activities should be backed by a general strategy to strength-en the economic foundation of the region. The following general measures are proposed:

§ improve the links between mid/higher education and the needs of the market by developing courses with companies

§ improve the international acquisition of companies by joining forces between sub-regions

§ develop ‘package deals’ to improve the position of South Holland with respect to developing economies

§ ensure availability of space for Greenports and Transport & Logistics sectors


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§ improve accessibility and focus on transport bottlenecks in the Spatial agenda § diminish the administrative burden for companies by focusing on procedures for building

permits

The authors propose a number of actions, specifically aimed at the driving sectors:

§ develop a Fund for the support of expansion strategies of start-ups in the driving sectors § expand successful incubation programs and test facilities to promote entrepreneurship in

South Holland § install ‘Valorization Professors’ and invest in networks § connect traditional sectors with new sectors § develop large-scale demonstration programs for Biobased Chemistry, Clean & Lean Logistics,

and Sustainable Greenports

In order to be able to implement the Economic agenda, the public partners in South Holland need to improve cooperation in the field of economic policy. a Regional Development agency is an effective way to implement the Economic agenda. The Economic agenda is in the final stages of the decision making process. The framework for implementation will be set up in the first half of 2011, creating momentum to critically assess the current institutional settings, financial struc-ture and scope of activities. In that respect, the Economic agenda, so far, lacks any specific refer-ence to a European dimension. The present research and report aim to provide specific input for the implementation process of the Economic agenda, with suggestions for a coherent European strategy in line with the Economic agenda 2010-2020.

Source: Roland Berger (2011)

1.2 EURoPE 2020: FoCUS oN REGIoNaL ECoNoMIC PoLICYRegions can benefit from receiving EU innovation support. a regions innovation economy can benefit from support given to individual firms, large corporations, consortia or even to public or-ganizations. an often seen trend is that strong regions that do exceptionally well nationally also manage to receive considerable innovation support from the EU. Many regions use their regional development agenda’s to position their innovation strategy in line with EU innovation policy. In consequence the benefit of participation in EU innovation programs can be therefore twofold:


yesterdAy todAy tomorrow

trAnsport& logistics

cHemicAl & energy

greenports

mAritime

peAce, justice& sAFety

Under the influence of technological development and globalisation are strong histo-rical areas and competences succesfully eveolved into today’s Zuid-vleugel

The upcoming years require aging, tech-nological, acceleration, climate issues, energy short-age, etc.a revolution of the Zuidv-leugel to remain internationally competitive

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first through support it stimulates the regional economy, and second in order to participate re-gions need organize themselves, which leads to better cooperation and eventually to a stronger economy.

The most direct benefit of the EU is its sizable subsidy pool of grants or loans. on these subsi-dies, several general remarks can be made. The most obvious benefit from these subsidies is the money, but the side effects are equally, if not, more important. EU subsidies in many cases, especially in R&D related areas, require operating in a network, with partners from multiple member states. Moreover, only the strongest of networks can obtain subsidies, and the links between its members need to be strong. These strong links are a benefit in itself though. Strong networks can bring great benefits to its participants, for example in knowledge transfer, market access, lobbying for better rules or play a role in creating trans-European knowledge clusters and dynamics, which is exactly the goal the EU has for these subsidies. For companies and institutes (and regions) which desire to be in the top of their field, or looking for innovation, participation in these networks in pivotal.

In a survey we have held under innovative firms in the Netherlands we asked them to indicate the most important benefits of EU innovation programs. Most respondents perceived the ben-efits from EU innovation programs as high. Below Figure X presents the most important ben-efits of EU innovation programs as indicated by the respondents in our study. The respondents indicated that ‘access to new partners and networks’, ‘access to knowledge and technology’ and ‘financial support’ as the most important benefits of EU innovation programs.

Perceived Benefits of Participation in EU innovation

Further discussion about the participation of firms and especially of SME’s in EU innovation programs can be found in Chapter 3. The remainder of this chapter discusses the subsidies and programs of the EU. To do this, we use a top-down method, beginning with the general budget, and elaborating on it as the chapter progresses. The final paragraph will discuss the EIB, which operates on a somewhat different rationale and has its own budget (the EIB operates largely independent of the EU).

Developments in EU PolicyIn the year 2000, the European Commission established a framework for the economic develop-ment of the European Union. The aim was “to make Europe, by 2010, the most competitive and the most dynamic knowledge-based economy in the world”. The specific goals for 2010 included


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for example targets on R&D spending. Most targets were not obtained, and the Lissabon agenda has been widely called a failure, e.g. by Swedish Prime Minister Fredrik Reinfeldt.

In March 2010, the European Commission launched a new strategy ‘for smart, sustainable and inclusive growth’ under the title EU2020. The current developments in EU policy for the period 2014-2020 will be elaborated in Chapter 4. For now it’s important to realize that investment choices for that period are currently being made. It is clear however, that Innovation, Sustainabil-ity and Social objectives are seen as being best dealt with on a regional level. This suggests that the European actions will focus on supporting regional initiatives in these fields.

South Holland does not have one coherent EU link. There are several links to Brussels by munici-palities, research institutes, universities, the Provincial authorities, and even the supra-regional cooperation of four Provinces (Randstad). Each of these links focuses on specific topics, project funding or lobbying objectives. This creates confusion in the European institutions, and can be an obstacle in effectively using the European programs. With a decline in national funding for regional economic policy and innovation, it is more than ever worthwhile to look at the EU. Therefore, South Holland should invest in improving its links to Brussels.


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2. USE oF EU RESoURCES IN SoUTH HoLLaND


This chapter describes the different instruments of the Community’s innovation policy that offer relevant support to South-Holland’s ambitions.

2.1 THE EU BUDGET FoR SUBSIDIESMost of the EU’s € 125 bln. p.a. budget are spent on subsidies of some sort or another. of the figure below, the grey (agriculture and environment) and yellow (economic growth) chunks are spent on subsidies in the EU, accounting for almost 90 % of the EU’s spending.

eu Budget 2009 € 123 bln

Subsidies in category sustainable growth have a high relevance for this report, given the fact that large parts of this focus on innovation and research. Subsidies under agriculture, however, are less relevant, for two reasons:

§ The focus on innovation is limited (but existent) § The influence SH can exert on the amount of subsidies, or its spending is severely limited

Therefore the agricultural budget will not be elaborated on in the main text. This also applies to the, part of the Cohesion and Structural Funds, which do not focus on innovation or the other This leaves only the sustainable growth funds. These are divided into two categories, namely the cohesion and structural funds (€47b), and the funds for competitiveness (€11b, mostly allocated to research and innovation).

There are several differences between the two. First of all, the cohesion and structural funds are more divided on a basis, of which geographical area needs them the most, whereas those for competitiveness are more divided on a basis of which area of research or which economic sector requires attention. This means that cohesion funds are allocated to the area as a whole, and that this area can spend these funds more or less to its own discretion. The competitiveness funds however are divided per research sector European wide, and are open to contenders from the whole EU, usually making these bids more open to cutthroat competition (only about 20 % of the bids receives the actual subsidy)

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structurAl/coHesion Funds(EFRo, INTERREG, ESF)

competitiveness/reseArcH Funds (FP7, KIC’S, RoK’S)

AllocAtion oF Funds Poorer area’s receive more The best project receives money

coordinAtion Mostly from the member states Mostly from Brussels

Aim Infrastructure and education Research

division oF Funds Per geographical area Per economic/research sector

2.2 CoHESIoN aND STRUCTURaL FUNDSThe cohesion or structural funds were created to increase regional competitiveness, especially in those regions that are lagging behind in development. This means that for the Netherlands and South-Holland these funds are somewhat limited, given their general good performance vs. the European average. It still is a substantial amount of funds though, and therefore worthy of our at-tention.

The structural or cohesion funds are comprised of the following five groups: 6 groups?

§ European Funds for Regional Development (EFRD, or EFRo in Dutch) § Interreg § European Social Funds (ESF) § Cohesion Funds (not applicable to NL) § European Grouping of Territorial Cooperation (not applicable to NL) § Instrument for Pre-accession assistance (not applicable to NL)

of the above mentioned programs, the EFRD and Interreg schemes are the most relevant in sup-porting innovation in South Holland. Therefore, these two schemes, and their relevance for the re-gion, will be elaborated below. Some general observations can be made about the Cohesion funds:

§ Regions execute the agenda § Member states decide the amount of funds received per region § Regions can exert little influence on the amounts received, but draw up their own agenda re-

garding the spending of the funds (under scrutiny of the European Commission) § There is a lot of criticism on how these funds are spent, but they are likely to remain in place in

the next budget round § In the Dutch case, all programs require 50 % co-financing from local partners, which can prove

difficult since no coherent framework for this is in place

2.2.1 EFRD in South Holland: Kansen voor West In order to be eligible for EFRD funds, each region in the EU, has to submit a seven year plan (2007 – 2013 in this case, corresponding with the EU budget rounds), indicating how they intend to spend the funds. In the case of the region West-Netherlands, which besides South-Holland includes North-Holland, Flevoland and Utrecht, this plan is called Kansen voor West (opportunities for West). The plan was drawn up by the four provinces and the four biggest cities in the Randstad (amsterdam, Rotterdam, the Hague, Utrecht), with the other partners in the region, such as the smaller munici-palities playing a consultative role. after it was approved by the European Commission, in late 2006, it went into execution.


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The general goals for the plan were directly linked to the Lisbon agenda:

§ Increase utilization of present knowledge § Increase cooperation between knowledge institutes § More capacity to bind creative talents to the region § More clustering and higher labour productivity

In general, the functioning of ‘Kansen voor West’ was well received by the European Commission, as by partners in the region. However, there are sources from both interviews and policy papers which suggest that the process can be improved.

Public co-financing is required for many of the projects. as the source for public co-financing is often more than one municipality, this can result in increased decision making time and makes it harder to accumulate funds for larger scale projects and attain critical mass. Not many municipali-ties have actually allocated funds for participation in EFRD projects (nor for ‘Pieken in de Delta’ or other schemes). This adds to the complexity of the financial planning for these projects.

another problem is that, because of the funds are divided, this can cause inflexibility between supply and demand for these, with one municipality depleting there funds and having more eligible projects, while other municipalities do not spend all their funds. Furthermore, some municipalities fail to reserve budget to spend for co financing, which can lead to problems in execution of co-financing. This problem is far from unique, many regions in the EU have problems with co-financing. South-Holland actually performs quite well comparatively, although there is still room for improve-ment.

Examples of what can happen when municipalities do cooperate and pool their co financing are the very promising Bioprocess Pilot facility and the NeCEN microscope. But to illustrate the point even more, both programs almost failed because of lack of funds and the arduous decision making process.

at the time of writing, most of the ‘Kansen voor West’ funds had been allocated to projects. Some funds have become available in mid-2011 as a result of under spending in the existing projects. This provides an opportunity for the region to direct some of these funds to the implementation of the Economic agenda.

Example of EFRD funding: Bioprocess Pilot facility

“Located in Delft, the Netherlands, the facility will be a center of expertise and technology open to researchers and students from all over the world. Both its scale and its open nature make it unique, and make the Nether-lands a pioneer in the development of the biobased economy.”

The Bioprocess Pilot facility is a project between a large number of partners, such as DSM and TU Delft, and will be located in Delft. The facility will be a large scale test facility, for the development


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of bio fuels. The uniqueness in this project is, that it’s a far larger scale than most test-facilities and can therefore tests far more reliable. Such a facility is critical for further development of bio fuels, and unique in the world. additionally the test facility will be open to researchers to test and will be also feature a campus with MBo, HBo and Wo style education.

Example of EFRD funding: NeCEN microscope Like the Bioprocess facility, NeCEN is a large scale research infrastructure. Based in Leiden, this institute has facilities for the research into all kinds of diseases, the foremost of which the Cry-oTem electro microscope, which is a unique piece of equipment, which will attract researchers from over the world.

2.2.2 Interreg This program is aimed at increasing cooperation between regions in the EU, especially on regions that are close to each other, but in different countries. In general it can be said that whereas the main EFRD funds is aimed at supporting local infrastructure and economic development, Inter-reg is aimed at learning from each other’s experiences, and often involves regions with similar problems or challenges. The Interreg programs are centred around cross borders regions. For South-Holland there are three possible programs: Interreg IVa, IVb, and IVc.

South-Holland in three Interreg regions: Interreg IVa, IVb, and IVc

Each program contains objectives in the field of innovation and can thus be of use for South Hol-land’s innovation strategy. Interreg requires South Holland to team up with other regions, which can provide a useful exchange of knowledge and experience. It has also been shown that some cross-border cooperations can attract a lot of international attention. Examples are the Eind-hoven-Leuven-aachen cooperation (ELa), which was started under the Interreg IIIb program. This program has contributed significantly to the promotion of the cross-border area, as well as the individual regions.

The above maps illustrate that South Holland can set up projects with several interesting partner regions. Projects could be cluster/topic based or aimed at specific areas of innovation policy. although it should be kept in mind that Interreg projects are typically more public than private, the impression exists that there are opportunities to be explored by South Holland.


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The best three projects in the Interreg program are awarded with the Regionstars award. one (ongoing) project from South-Holland received this award in 2009: the Rotterdam Innovation Dock.

Example project: Rotterdam innovation dockThe former RDM shipyard in Rotterdam, Europe’s largest port, is being redeveloped into a campus for educational institutions, innovative companies and research institutions and their partners from the business community and government. Besides serving as an innovative educa-tional and work complex, RDM Campus and the RDM Innovation Dock also seek to restore links between the village of Heijplaat and the centre of Rotterdam.

2.3 RESEaRCHThe origin of the Research budget lies ‘80s, when the revived interest in European Union, would end up in the creation of the Single European act creating a single market in Europe for goods, people, services and capital, by removing the obstacles to the movement for these for, which would also become known as the four freedoms.

The main reason behind the creation of a single market was that the large scale economies of the US and Japan outcompeted the small individual economies of Western Europe. The idea behind the single market is that the economies merge, therefore creates more scale and compe-tition. The short-term negative effect is that some local industries will be out competed by more efficient competitors from other member states. The benefit is that other local industries can enter other markets more easily, increasing their profits, and consumers can buy from the most efficient producer in Europe, instead of just the member state, and increased economy of scale. Where in the past industries in all the 27 member states had to develop separately, now that only has to be done by the few that survived the competition.

The European Commission realized that this scheme would also be necessary for research activ-ity, and research would become known as the fifth freedom. To encourage this, subsidy pro-grammes were started. They are not necessarily aimed at innovation directly, but also largely at sharing of knowledge, learning from each other’s practices, creating clusters of excellence and having a few centres of excellence for each scientific discipline in Europe, rather than for each member state.

The research subsidies of the European Union differ from the structural and cohesion funds in several ways. Unlike the structural funds there is (formally 1 ) no prior division of funds. Further-more, the research subsidies are coordinated directly from Brussels, instead of by or in collabo-ration with the national governments.

2.3.1 Framework Program 7The largest part (ca. € 6 bln. p.a.) of the EU research budget is devoted to the Seventh Frame-work Program. The Framework program is divided in four separate areas, each with a focus on R&D and Innovation: Cooperation, Ideas, People, and Capacities. The Cooperation program focuses on trans-European research initiatives and makes up the largest part of the Framework Program budget (around 67%). South Holland should also look at the Capacities program, which supports the development of regional innovation strategies. This could be of significance for the implementation of the economic agenda.

When it comes to participation in FP7, the Netherlands are the most successful all EU countries in terms of accepted projects. Within the Netherlands, South-Holland is by far the largest region by number of FP7 projects, as well as by project budget:


1 There is an equal division element in play, i.e. consortia which contain Central and Eastern European partners have

more chance at winning bids.

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FP7 projects in The Netherlands until October 15th, 2009

Source: agentschap.nl

a closer look at the number reveals that the number for South Holland is slightly skewed due to administrative reasons. In the first place, the presence of the national research organisation TNo headquarter in Delft means that all TNo project participations are registered in South Holland. However, a substantial number of projects will in fact take place at other locations, such as the one in Eindhoven. The same holds true for a number of national public agencies or ministries which are clustered around the national seat of government in The Hague.

analysis of the participations also shows a relatively large share of research projects being undertaken by Public agencies and Educational institutes (Universities). These two categories comprise in more than 75% of the total number of R&D contracts, with Private organisations accounting for less than one quarter. Further, the number of contracts per participant is much lower than it is for the categories Public and Education, which suggests that they are often not in the lead.

Triple-Helix-Mix in FP7 projects in South Holland



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The three universities of South Holland are clearly very good at winning FP7 contracts. The table above includes the contracts for the three universities (Erasmus University Rotterdam, Delft Uni-versity of Techology, Leiden University), as well as the two academic Medical Centers (Erasmus Medical Center, Leids Universitair Medisch Centrum). These five institutes account for 39% of all FP7 contracts in South Holland.

The same can be said for the main public research institutes in South Holland. TNo and Senter-Novem (now agentschap.NL) account for more than half of the Public FP7 contracts, or almost 20% of the total number for South Holland.

The same table for Noord-Brabant shows a very different picture. Here, the Private sector ac-counts for the largest share in number of Contracts, while on average these companies partici-pate in more contracts. Public agencies account for only a small number of contracts. In Noord-Brabant, the largest number is for the Eindhoven University of Technology, followed by closely by Philips. Several other companies participate in multiple projects, including aSML, NXP, Teleatlas, IMEC Nederland, and Navteq. The presence of these larger companies can act as a catalyst for the participation of SME’s. Furthermore, it can be expected that R&D projects run by the private sector will be closer to the market than those run by universities or public research institutes. as such they can have a greater and more immediate impact on the region’s economy.

Triple-Helix-Mix in FP7 projects in Noord-Brabant


overall, we can conclude that South Holland captures a large share of the FP7 research invest-ments, but that there is room for improvement of the participation of Private companies. as will be explained in Chapter 4, the EU is expected to emphasise SME participation in the next frame-work program. South Holland can involve more SME’s by making better use of the capacities of universities and research institutes for winning FP7 projects. 2.3.2 The EIIT and KICsKnowledge and Innovation Communities are a concept launched by the newly created European Institute for Technology. The idea is to have five world class knowledge clusters, each comprised of both businesses and institutes, working together on one theme.


22

These clusters do not necessarily have to operate in the same region. In the first three KIC’s launched last year:

§ Climate change adaptation and mitigation (Paris, London, Randstad, Zurich) § Sustainable energy § Future information and communication society

although the KIC’s have just started, and it is not entirely clear how the projects will turn out, it is expected that they will be beneficial and will receive substantial amounts of funds. as some of those interviewed commented:

“Given the scope of the projects, the participants, and the future role of KIC’s in the EU strategic R&D agenda, it is simply not an option not to be part of it.”

Partners from South-Holland participate in all three KIC’s, a remarkable feat, that is not matched by many other regions. The presence in all three is somewhat limited, but with four participants in total. There are some concerns though, that South-Holland did not take a leading role in the process and that the participation was more due to the alertness and networks of the partici-pants and the efforts of Eindhoven en Utrecht Province than due to a concerted effort in South-Holland.

Presence of Dutch partners in KIC’s (South Holland partners in green)

CLIMaTE dsm shell Schiphol UU

ICT LaBS 3tu Philips Novay

INNoENERGY tno Vito TUE Philips IMEC EDI

The effect of having the presence of a KIC in the region have become apparent shortly after their introduction. TNo and ECN Petten have moved part of their operations to Eindhoven to partici-pate in the KIC InnoEnergy. although the scale of these moves is still limited, the fact that this project landed primarily in Eindhoven instead of South-Holland means that two regional opera-tors have moved to Eindhoven instead of the other way around, obviously is not positive for our regional innovation climate, that could have been averted by full participation in this KIC.

2.3.3 Region of Knowledge Formally a part of FP7, we highlight this € 126 million program separately since it has a high em-phasis on regional cooperation and can be seen as a minor version or a KIC.

In South-Holland the first development in this area is the forming of the Medical Delta consorti-um, which is almost certain to land the deal at the end of the year. The Medical Delta initiative is based on the synergy of the universities of Leiden, Rotterdam, and Delft. Located within a radius of 14 km, the partners constitute the core of a world-class Health & Life Sciences cluster.


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Medical Delta consortium

Medical Delta + EuropeMedical Delta has joined forces with Europe’s top regions in healthcare technology to address Europe’s greatest health challenges of the 21st century: an ageing population and the sustaina-bility of the health care system. The HealthTIES consortium consists of the regions Medical Delta, oxford and Thames Valley, Canton of Zurich, Catalonia and the mentoring Debrecen region. With the support of a grant from the Regions of Knowledge funding programme of the European Com-mission, the consortium will:

§ Boost the Healthcare Technology Innovation Cycle. § Stimulate joint science, education and state-of-the-art infrastructure in major disease areas.

HealthTIES Innovation Cycle

South Holland should pay close attention to the further development of the Regions of Knowl-edge program. These funds could provide a significant impulse for the development of the key sectors as identified in the economic agenda. The next call for a RoK will be in the area of trans-port, in which organisations from South Holland will also compete for the bid.


Leiden

Amsterdam

Leiden University Medical Centre (LUMC)

Leiden Univeristy

Erasmus Medical Centre

(EUR)

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2.4 INVESTMENT EIBDiffering greatly from the prior opportunities, are EIB loans. The most clear being that subsidies constitute “gifts” whereas a loan has to be paid back, with interest. The great advantage of the EIB is, that its interest rates are lower, since it has, unlike other banks, no objective for profit, and because of its large loan sums and good credit rating it can borrow money on the market relatively cheap.

There is a catch though, because of its good conditions, projects are subject to thorough investi-gations. Since it would be a very arduous and fruitless task to subject small scale projects to such an investigation, only projects larger than € 25 mln. are allowed.

The European Investment Bank (EIB) and Royal Philips Electronics (aEX: PHI, NYSE: PHG) have signed a EUR 200 million loan agreement. The 10 year loan, provided under the Risk-Sharing Finance Facility (RSFF) will be used to finance research and development (R&D) activities across a range of inno-vative healthcare projects, including image-guided intervention and home healthcare, in Europe.

Philips will use the EUR 200 million loan from the EIB as part of its planned research and development investment in healthcare activities in Corporate Technologies. These R&D activities will be focused on health care solu-tions such as image-guided intervention and therapy, home health care, and clinical decision support systems. The R&D will take place in an open innovation environment, collaborating with Small and Medium Enterprises (SME), research institutes and universities across Europe. Philips is the first company to receive EIB funding as a result of its efforts to fuel open in-novation.

Source: Philips 2009

Those in need of smaller scale funds can borrow from the EIB, but need to do this through an intermediary. In many cases these are banks, but not necessarily. an example of this is in the Netherlands is Philips, which loaned € 200 mln. earlier this year, which is not only for its own use, but also for affiliated companies in its cluster.

Currently EIB funds are not used in our region, despite the fact that there is a definite interest in its loans, and the fact that the EIB has an interest in loaning to our region. one of the reasons of this, is that the modus operandi of the EIB is not entirely clear in the region. Besides that, the ties between Dutch banks and the EIB seem somewhat limited, and there is an absence of another large player in the region that will carry and organize a large scale loan project, like the way Philips does in Eindhoven region.

2.5 CoNCLUSIoNalthough the level of EU subsidies coming to South-Holland is fairly high, there is no reason to complacent. The following recommendations can be made:

§ improve participation by SME’s and the private sector in general in the Framework Program; use the capabilities of public research institutes and universities

§ move pro-actively in the pursuit of new strategic developments such as the KIC’s and RoK programs


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§ investigate if and how the Capacities program can be used for strengthening the regional innovation strategy and implementation

§ make sure the objectives of the economic agenda are covered in the next EFRD § program for West-Holland § channel the remaining EFRD funds of the current period towards implementation

of the economic agenda § investigate how Interreg opportunities can be used for the regional objectives § investigate opportunities offered by the European Investment Bank


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3. SME’S IN SoUTH HoLLaND aND USE oF EU RESoURCES

To investigate the point of view of SME’s in South Holland, a survey was sent out to 1700 inno-vative firms in South Holland. of these, a total of 221 firms completed the survey. It should be noted that these firms have all been identified as innovative, based on their prior participation in innovation projects and meetings. This means there is a bias towards awareness of innova-tion issues. For the present research this is not problematic, since they are the target segment of companies that might in the future become more involved in EU supported innovation projects.

The chapter will focus on two topics relating to SME’s, innovation and the EU:

§ which sources of knowledge do SME’s employ, both regional and in Europe, and how useful are the European support programs?

§ what are the obstacles for using the European support programs, and how should this sup-port be organized in the region?

The survey was completed by 221 companies. out of these, a total of 42 companies (19%) indi-cated that they had, in the past, participated in one or more of the European innovation pro-grams. This may not be used as a proxy for the total participation of South Holland firms in the EU innovation programs. a considerable bias in the respondents exists with regards to innova-tion issues. also, given the topic of the survey, those companies with prior EU experience may have been more likely to complete the survey. Finally, the participations may not all have taken place within the same time frame. However, the total number of companies with prior EU experi-ence is useful, since it provides a sizeable sample from which to deduce information about the experiences, obstacles and usefulness of the EU innovation programs.

Use of European support programsThose participants who did participate in EU Innovation programs had mostly been involved in EFRD projects, followed by the Framework Programs. other uses were less frequent. It should be noted that several companies indicated that they had used more than one EU innovation program. It also seems that several companies chose the ‘other’ option, but indicated the use of national support programs (IPC, SBIR, WBSo, or Innovation Vouchers).

The relative preference for EFRD programs (Kansen voor West) can be explained by the fact that it is the most accessible program. The fact that it is organized by regional authorities and that the participation of European partners is not required, makes this a relatively easy program to work with.

3. SME’S IN SoUTH-HoLLaND aND USE oF EU RESoURCES

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use of knowledge sourcesThe survey also comprised several questions relating to the use of knowledge sources by SME’s for their innovation processes.

Use of knowledge sources in the region

use of knowledge sources in the eu

The most used regional Knowledge Sources are direct partners in the value chain and univer-sities. Customers and Private Research organizations are used less frequently. as could be expected, the use of EU Knowledge Sources is less than the use of Regional Knowledge Sources. a very similar distribution is found for the type of Knowledge Sources and their frequency of use. There is however, a more drastic change in the results for the use of Universities as a source of knowledge (e.g. compared to the Suppliers). This could suggest that access to European universi-ties is disproportionally difficult. Further enquiry could be made to establish this more firmly. If this result holds true, South Holland could use the successful European networks of its universi-ties as a stepping stone for innovative SME’s. Several questions were included in the survey to establish the importance of the EU innovation programs for South Holland’s SME’s. Most respondents agreed that EU innovation programs are an important stimulus for innovation.


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Participation in EU innovation programmes is an important stimulant for innovation

Content with the results of participation in EU Innovation programs

Those companies with prior experience of participating in EU innovation programs were, overall content with the results, although there is a relatively large proportion that are neutral. Given these findings, it can be concluded that the European Innovation programs are relevant for South Holland’s SME’s. This conclusion is supported by the fact that the EU Innovation programs have a significant impact on the implementation of the innovation project in question. The respond-ents indicate that 30% of the projects would not have been implemented without the support from an EU Innovation program, while another 44% would have been implemented at a different scale.


agree completely

agree

neutral

disagree

disagree completely

very content

content

neutral

discontent

very discontent

30

Without participation in an EU Innovation program, the project would have

Obstacles and supportalthough the results above suggest that EU Innovation programs can be positive for SME’s, there are also downsides to the participation in EU innovation programs. The respondents to the sur-vey were asked to indicate what they see as the most important obstacles. The highest score was attained by the factor ‘Complexity of rules/regulations’. The application forms for EU Innovation programs are notoriously complicated, and the number (453) and variety of subsidies can be con-fusing. a second factor is the administrative e burden of the application process, as well as the eventual project management. another obstacle is the high level of uncertainty: a large number of the applicants are turned down. Several sources indicate a ‘hit-rate’ of 15% or less for accept-ed proposals. The probability of success will be taken into account by SME’s who are considering participation in one of the programs.

a remarkable finding is that participants and non-participants consider most obstacles as high and important. The factor ‘Lack of Information’ is the only one where a considerable decrease in ranking can be found. This suggests that the obstacles are to a very large extent real, and not merely the related to the bureaucratic reputation of the EU.

Obstacles for participation in EU programs% of firms that rank the obstacles as important


continued with better results

continued

continued, but at a different project scale

cancelled

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all these factors are important obstacles to the participation of all companies and organiza-tions, but they hold true especially for smaller companies. They may not have the capacity to go through the learning curve by participating in several EU programs. Repeated participation will bring down the costs associated with participating in EU support programs. This provides the logic for the proliferation of consultancies that specialize in EU subsidy management. However, some public agencies also help their organizations by offering several services for participating in EU Innovation programs.

one important finding in the interviews is that the research institutes do not currently see a major need for involving regional SME’s. FP7 projects are so specialised that the partners need to be found based on the subject matter, rather than the geographical provenance. Connecting the SMEs to the successful research institutes is an important challenge, which can be supported by public intervention.

To establish the views of South Holland’s firms on the matter of support for participation in EU programs, the survey contained some questions on who should provide this support. almost half of the respondents indicated that they see this as a task for the regional government, either directly (20%), or through a Regional Development agency (27%). Industry associations are also named by 22% of the respondents, with significantly smaller numbers for Universities, Science Parks & Incubators (together 14%), or private organizations (17%). overall, it seems that SME’s expect regional government to take a leading role in providing, or at least in organizing, the sup-port for participating in EU Innovation programs.

Support for SME research projectsWho should support SME’s in innovation?

3.1 CoNCLUSIoNBased on the results of the survey discussed above, it can be concluded that:

§ Participation in EU programs is positively evaluated by SME’s in South Holland § There are severe obstacles for participating in EU Innovation programs § Support for participation is needed; SME’s see a large role for the regional government and/

or a Regional Development agency


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4. DEVELoPMENTS IN EU PoLICY

4.1 EU 2020 & THE BUDGET 2014 – 2020at the turn of the millennium, EU leaders launched the Lisbon agenda to reinvigorate the European economy, especially in the field of innovation. The Lisbon agenda stated that the EU should be the most competitive knowledge based economy on the planet by the time 2010 rolled around. In retrospect we can easily draw the conclusion that this did not happen, partially because many of the member states did not reach the Lisbon targets. For a part this was because of the somewhat simplistic and generalist nature of the target, and partially because of lack of commitment.

Learning the lessons of the Lisbon agenda, EU leaders have started drawing up its successor, EU 2020, which will largely shape the new budget. at the moment, negotiations on the new agenda are in full swing. Many targets seem to be similar to those of the Lisbon agenda, such as targets on levels on R & D spending, numbers of educated people et cetera. Differences with the Lisbon agenda will be stricter enforcement and increased economic and research integration. another focus will be on grand societal challenges (though many of these were already represented in the Lisbon agenda in one way or another). The latter will take form in the EU Flagship initiatives, which are seven programs which will largely shape the new budget as well. The fact that we know what is in this agenda and what opportunities this could provide us, is of the utmost impor-tance, and will give us the opportunity of a three preparation period, before it goes into effect.

These seven flagships initiatives and their broad objectives are (a more detailed description fol-lows below):

§ Innovation Union – Increase research cooperation and make remove red-tape § Youth on the move – Make access to education, jobs and entrepreneurship easier § a digital agenda for Europe – High speed internet, internet-literacy and IT innovation § Resource efficient Europe – Greener and smarter energy § Industrial policy for the globalization era – a variety of measure to increase competitiveness § agenda for new skills and jobs – increase labour mobility and develop skills standard § European platform against poverty – maintain social security and combat social exclusion

Below we will describe the most relevant flagships for the present report in more detail, and in which way these can be linked to innovation and economic activity in South-Holland.

Innovative UnionThe aim of this is to re-focus R&D and innovation policy on the challenges facing our society, such as climate change, energy and resource efficiency, health and demographic change. Every link should be strengthened in the innovation chain, from ‘blue sky’ research to commerciali-sation and valorization. To accomplish this, the European Research area should be completed meaning innovation as the fifth freedom should be in place and framework conditions for in-novation should be improved.


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Some of these framework conditions are:

§ to complete the European Research area, to develop a strategic research agenda focused on challenges such as energy security, transport, climate change and resource efficiency, health and ageing, environmentally-friendly production methods and land management, and to enhance joint programming with Member States and regions

§ to improve framework conditions for business to innovate (i.e. create the single EU Patent and a specialised Patent Court, modernise the framework of copyright and trademarks, im-prove access of SMEs to Intellectual Property Protection, speed up setting of interoperable standards; improve access to capital and make full use of demand side policies, e.g. through public procurement and smart regulation)

§ to launch ‘European Innovation Partnerships’ between the EU and national levels to speed up the development and deployment of the technologies needed to meet the challenges identified. The first will include: ‘building the bio-economy by 2020’, ‘the key enabling tech-nologies to shape Europe’s industrial future’ and ‘technologies to allow older people to live independently and be active in society’

§ to strengthen and further develop the role of EU instruments to support innovation (e.g. structural funds, rural development funds, R&D framework programme, CIP, SET plan), in-cluding through closer work with the EIB and streamline administrative procedures to facili-tate access to funding, particularly for SMEs and to bring in innovative incentive mechanisms linked to the carbon market, namely for fast-movers

youth on the moveThe aim is to enhance the performance and international attractiveness of Europe’s higher edu-cation institutions and raise the overall quality of all levels of education and training in the EU. Several goals have been set in this sense:

§ combining both excellence and equity § promoting student mobility and trainees’ mobility § improve the employment situation of young people § modernise education, increase young entrepreneurship § non-formal training § mobility of students and researchers

A Digital Agenda for EuropeThe aim is to deliver sustainable economic and social benefits from a Digital Single Market based on fast and ultra-fast internet and interoperable applications, with broadband access for all by 2013, access for all to much higher internet speeds (30 Mbps or above) by 2020, and 50% or more of European households subscribing to internet connections above 100 Mbps (European Commission 2010)”

Resource efficient Europe The aim is to support the shift towards a resource efficient and low-carbon economy that is effi-cient in the way it uses all resources. The aim is to decouple our economic growth from resource and energy use, reduce Co2 emissions, enhance competitiveness and promote greater energy security by modernizing the transport sector and promoting energy efficiency (European Com-mission 2010)”

An industrial policy for the globalisation eraIndustry and especially SMEs have been hit hard by the economic crisis and all sectors are facing the challenges of globalisation and adjusting their production processes and products to a low-


35

carbon economy. The impact of these challenges will differ from sector to sector, some sectors might have to “reinvent” themselves but for others these challenges will present new business opportunities. The Commission will work closely with stakeholders in different sectors (business, trade unions, academics, NGos, consumer organisations) and will draw up a framework for a modern industrial policy, to support entrepreneurship, to guide and help industry to become fit to meet these challenges, to promote the competitiveness of Europe’s primary, manufacturing and service industries and help them seize the opportunities of globalisation and of the green economy. The framework will address all elements of the increasingly international value chain from access to raw materials to after-sales service (European Commission 2010)”

An Agenda for new skills and jobs“The aim is to create conditions for modernising labour markets with a view to raising employ-ment levels and ensuring the sustainability of our social models. This means empowering people through the acquisition of new skills to enable our current and future workforce to adapt to new conditions and potential career shifts, reduce unemployment and raise labour productivity (European Commission 2010)”

The Flagships and South HollandThe flagships will serve as guidelines for further investments of the EU. Especially those flagships with a strong relation to innovation, economic transition and sustainability (resource efficiency) can provide opportunities for the implementation of the Economic agenda of South-Holland. on the one hand, there are clearly defined issues that are also addressed in the Flagships. The emphasis on ‘Labour Market & Education’ in the Economic agenda connects to the Flagships of ‘Youth on the Move’ and ‘an agenda for new skills and jobs’. Likewise, the Economic agenda calls for more coherent action in the field of international promotion and acquisition, which can be seen as an element of the new industrial policy.

on the other hand, there are research topics that feature in both the Flagships and the Economic agenda. Biobased energy is an important topic in the Flagships for resource efficiency and Inno-vation. South Holland is now developing a unique position in this field with the Bioprocess Pilot Facility, port facilities for large scale chemical processing and handling, and a large horticultural sector. With the right investments, South Holland could develop into the leading European hub for biobased fuels and materials. The Flagship program can provide the ticket for substantial EU investment in this development.

other opportunities can be readily identified when looking at the clusters that have been identi-fied in the Economic agenda. Linking the focal sectors of South Holland to the EU flagships requires further investigation and analysis. We propose to establish task forces to take this up, after the implementation of the Economic agenda has started. This will be elaborated in the final chapter.

4.2 THE FUTURE oF CoHESIoN FUNDS aND THE FRaMEWoRK PRoGRaMat this moment it is still unclear what the future will hold for both. The next budget round for the EU will set the framework for the period between 2014 and 2020, and the negotiations and lob-bying processes are well under way. National interests take precedence at this moment: France is rumoured to block reforms on agricultural (since it is the largest beneficiary), while Germany supposedly blocks cuts on cohesion funds (because of pressure of the Bundesländer, which welcome the extra funds). There are, however many calls for reform, especially in the field of agriculture, and it stands to reason that priorities will shift.


36

Holland’s position has shifted over recent years towards cutting its contribution to the EU. The historical role as a net contributor has come under increased pressure since the economic crisis necessitated cuts on government spending. at the same time, the reduced national investments on innovation and regional economic development cause Dutch regions to look closer at the EU for support in their development strategies. There are signals that the harder line followed by the national government reflects on these regional efforts to make more use of EU oppor-tunities.

The focus of flagships will affect the Framework Program 8 in a number of ways. The choice for thematic approaches (the flagships) will also find its way in the program. The aim will be at larger and more interconnected programs, rather than the current situation where programs are often stand alone or loosely connected. This means a more clustered approach, with more integrated programs between government, research, education and businesses, with direct application, and more focus on excellence, rather than a fair division.

The KIC’s and RoK’s, as described in Chapter 2, can be seen as examples of what this new ap-proach will look like. at the same time, however, the focus on innovation and the region as the basic economic system is likely to be maintained or even intensified. The same holds true for the involvement of SME’s as drivers for innovation.

4.3 CoNCLUSIoNExpected developments in the EU policy framework are largely in parallel with the ambitions of South Holland as formulated in the Economic agenda. Many topics in South-Holland are very good matches for the Flagship framework, which can serve as a basis for EU investment in the programs.

a paradigm change will, however occur within the new framework, requiring a change in modus operandi. The flagship challenges will instigate a more practical approach to science and R&D. another recurring ambition in the European Commission is to include more businesses, and especially SME’s, in the process. as we have seen in the previous chapters, these are still under-represented in using the EU support programs, encountering significant obstacles to their par-ticipation. The most important actions that can be identified in relation to EU policy framework developments are:

§ identify the links between the EU Flagships and South Holland’s key clusters, and develop strategies for securing EU investment

§ support the lobby for retention, or expansion, of cohesion funds aimed at innovation and competitiveness


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5. BUILDING a BRIDGE To BRUSSELS

South Holland stands at a critical moment in its economic development. as an open economy it is strongly dependent on developments in the global and European economy. It has a strong re-search base and talent pool, but fails to translate these into economic output. In order to achieve its strategic objective of being a leading European region, it has identified a number of actions, bundled in its Economic agenda 2010-2020.

However, the agenda currently lacks a European strategy, and as a consequence, the region may not benefit fully from the opportunities offered by the EU. although South Holland is very successful at tendering in the FP7 program, participation is largely undertaken by public research institutes and universities. Especially SME’s can benefit more of participation in EU projects. Key-words for the next round will be Innovation, Sustainability, Regions, and SME’s.

This quick recap of conclusions sets the foundation for this final chapter: what could a European Strategy, as part of the Economic agenda 2010-2020 look like? We have identified several steps to realise an effective link between our region and Brussels. We propose a ‘Building a Bridge to Brussels’ model as a conceptual framework, where the bridge consists of a number of building blocks. It should be noted that several of these elements are already in place. Therefore, we will start with a short summary of what is being done well already, and by whom.

5.1 CURRENT LINKS To EURoPEas mentioned above, the region is very successful in accessing the FP7 funds. This is largely the result of the efforts of public research institutes and universities. Two essential elements can be identified.

In the first place, it is clear that there are strong European networks in which these organizations participate. a good example is provided by the Delft University of Technology, and its participa-tion in the IDEa League. This is a strategic consortium of five leading universities of technology in Europe, and often serves as a springboard for participation in specific EU projects. Next to this structural cooperation, there are many forms of topical cooperation that follow the lines of in-ternational research networks. These networks facilitate the development of research projects, make it easier to find research partners, be informed of ongoing efforts and new opportunities.

In the second place, these organizations have effective units for the development of research projects, as well as for managing the execution of projects successfully. Working in European projects requires a learning curve with regards to the technical rules and regulations. Being involved in large numbers of projects, institutes such as TNo, TU Delft, Erasmus University and Deltares can build up capacity and expertise for managing projects.

Lobby activitiesEach of the major organisations in South Holland is connected to Brussels. However, this does not mean that the lobby in Brussels is effectively organised for South Holland as a region. South Holland is represented through the Randstad office in the House of the Dutch provinces in Brus-sels. During the course of the present research, there was often a debate about the definition of the economic region: is it a city-region, the Province, or the functional economic region of the Randstad? The latter may well be the appropriate level at which to communicate about the eco-nomic opportunities in South Holland. If that is indeed the choice, South Holland should develop a communication strategy as part of the larger Randstad framework.


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5.2 BRIDGEany initiative to improve the links to Brussels should build on these prior efforts. although they may not yet be optimally organised, many of these efforts are successful as they are. In the following framework, it is assumed that the prior efforts are integrated, connected and comple-mented, rather than being replaced.

Each step consists of a subset of measures, some of which are already (partly) in place, while oth-ers are new. The first step is therefore to identify in some more detail which actions are already in place for each of the stepping stones.

Strategy & VisionLobbying in Brussels can only be successful if the region has a clearly defined economic vision and strategy. The Economic agenda 2010-2020 is in the process of being adopted as South Hol-land’s economic vision. In terms of a European strategy, the Economic agenda can serve the following purposes:

§ make explicit choices for the directions in which South Holland’s economy can be developed § guide investment decisions for the knowledge based economy § provide a coherent, and shared, vision of the strengths of the region in a European (and

international) context

The clusters and sectors have the potential to remain or become driving sectors for South Hol-land’s economy in the next ten to twenty years. Strategic lines have been identified, both on the level of generic policy, and on the level of sector specific policy. as such, the result is a compre-hensive set of actions that can be expected to have a positive effect on economic development. In the context of the current study, the European dimension has been absent. our first recom-mendation is therefore:

connect europeAn Activities to tHe strAtegic economic AgendA, By Adding A europeAn pArAgrApH to tHe economic AgendA

a European paragraph can facilitate the implementation of the Economic agenda. Funding for investment projects can be (partially) found within the Framework Programmes or other instru-ments in the European Innovation Policy toolkit. European networks can be used to strengthen the development of clusters in South Holland through links with research partners and interest-ed companies. Finally, European recognition of excellent clusters will support the communication objectives of the region.

The recommendations in the remainder of this chapter can be seen as suggestions for what such a European Paragraph could entail.

Internal NetworksReacting promptly to opportunities and developments in the EU requires a good infrastructure

strAtegy& vision

internAl networks

investmentprojects

europeAnnetworks

loBBy inBrussels


39

within the region itself. Regional partners need to be able to find each other, be up-to-date on research an innovation in the region as a prerequisite to partnering. as it is expected that future programs from the EU will place greater emphasis on the participation of SME’s, the ability to link research institutes, large companies and SME’s will become important. The need for strong regional networks, focused on the European dimension of economic development, grows.

FAcilitAte tHe regionAl networks And Flow oF inFormAtion witH regArds to europeAn opportunities And developments

a regional execution structure is needed to:

§ chart the network of EU liaisons from South-Holland’s research institutes, universities and companies organise informal meetings where EU liaisons can meet, discuss opportunities and share information

§ collect and filter information about EU opportunities and developments; distribute in the network

§ offer regional EU and Innovation Helpdesk services § form an effective link with South Holland’s representatives in Brussels § reports, communication, assignments

The execution structure does not require a new organisation. It can be a first step in establish-ing a regional development agency as it is envisioned in the Economic agenda. Given the time it takes to set up a regional development agency, a start can be made with a pilot program in 2011-2012. The program can later be integrated in the RDa.

Investment ProjectsThe success rate of ad-hoc projects is very low. only those projects that are an essential part of the regional economic strategy warrant a sufficient investment in time and means to set up a European project. These project ideas then need to be translated into strong project plans and proposals. Project development capacity is likely to be organized in the context of the Regional Development agency, whatever the form this will eventually take. Furthermore, the research institutes and universities have dedicated capacity for project management. a current weakness is the involvement of SME’s in EU projects. The Kennisalliantie has a task to facilitate the establishment of consortia of research institutes, universities, large and small companies. a special part of this task is to connect the SMEs to the projects in a comprehensive chain ap-proach.

The Economic agenda provides the framework for making choices as to which projects or investments can be developed into proposals for Brussels. The Flagship Initiatives from the Eu-ropean Commission will serve as the reference for European investments in the coming budget period. Therefore, an analysis needs to be made as to which projects in South Holland can be developed that match the opportunities in Brussels. This analysis is best made at the practical level and involves a combination of insight into EC agendas and South Holland’s strengths.

INSTITUTE A HANDS-ON ‘TASK FORCE’ TO ANALyzE THE DRIVINg SECTORS in ligHt oF tHe eu FlAgsHips

European NetworksIn order to develop successful bids for European investment programs, it is vital to team up with


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the right partner regions and organisation throughout Europe. Since the promotion of trans-Eu-ropean partnerships is a stated objective of the EU’s programs, this is a prerequisite of most calls for projects (the EFRD is a notable exception here). The participation of partners from new mem-ber states is especially rewarded. However, partnering should be about more than just matching the criteria. Good quality partners can improve South Holland’s projects through:

§ state-of-the-art knowledge § experience in projects § lasting links between regions and/or organizations § exposure, both inside and outside the EU § inward investment opportunities

Given these possible advantages, the question becomes how the appropriate project partners can be identified. one way could be to identify regions and organisations with complementary issues to South Hollands driving sectors. This could build on the existing networks of researchers and the institutes. another way could be to actively participate in the numerous networking op-portunities throughout Europe.

stArt pArticipAting in europeAn networks

Lobby in BrusselsLobbying requires a coordinated effort, based on the other building blocks in the model. Without strategy & vision, effective internal and European networks and interesting investment projects that support the broader European agenda, any Lobby activity will be empty. Building on these stepping stones, the European Lobby could consist of the following activities:

§ aligning the Randstad Lobby with the regional marketing strategy (combination of WFIa and RIa), and with the regional Economic agenda

§ identifying which processes to influence in the formation of the EU budget for 2014-2020 § identifying which strategic European alliances to form § promoting the European attention for those topics that are identified as strategic issues in

the Economic agenda

These activities require coordination of the current local efforts in Brussels. Following the adop-tion of the Economic agenda, this could be one of the follow-up activities in the Implementation agenda. Coordination for this activity could be handled by the Provincial administration.

elABorAte tHe loBBy strAtegy For soutH HollAnd

5.3 CoNCLUSIoNThe analysis of South Holland’s economic position and development, matched with an analysis of current European trends and developments, the outlines of an effective European Strategy can be drawn. South Holland has much to gain from making more of its links to Brussels.

The ‘Building a Bridge’ model identifies a number of crucial elements for a European Strategy. Many of these tasks are currently performed, in part, by organisations in South Holland. The objective is not to replace these existing networks, competences and capacities with


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something new. The challenge will be to align the existing strengths. Both to each other and to the Strategy and Vision as determined in the Economic agenda of South Holland. The establish-ment of a pilot program and organization can be a first step towards a Regional Development agency. This is not only advisable for the implementation of the Bridge to Brussels concept, but will also help the region to realize its economic ambitions.


aTTaCHEMENTS

1. LIST oF RESPoNDENTS oF INTERVIEWS

NaME oRGaNISaTIoN FUNCTIoN

althuis, Paul TU Delft Directeur Valorisatie

Berg, Gert-Jan v.d. TU Delft/ Technet Delft Medewerker Valorisation Centre (MKB & Technostarters)

Blind, Michiel Deltares Coördinator EuropaDesk/Senior-adviseur

Bohmert, David Neth-ER Senior Policy advisor

Broens-Visser, Louisa oBR Sr. Beleidsmedewerkster Public affairs

Dubbeld, Giel agentschap NL Senior adviseur

Genet, Louis Gem. Den Haag Programma directeur Investeringen

Genuchten, Pieter van Stadsgewest Haaglanden

Hoofd Economische Zaken

Goossensen, Hans PZH Hoofd Economische Zaken

Gordijn, Matthijs Gem. Den Haag Hoofd EZ

Groen, Cor Ministerie van EZ Sr. Beleidsmedewerker Vrede, Recht en Veiligheid

Groeninx, anna Universiteit Leiden EU Liason

Guichard, Christophe Europese Commissie DG E & I: Unit D2

Hans Huygens YES!Delft Directeur

Heijs, Jeroen agentschap NL Manager Innovation Intelligence

Heilgers, Denise Europese Commissie DG Research

Hospes, Bart agentschap NL adviseur Innovation Intelligence and Coordination

Kees Eberwijn TNo Directeur operations

Koch, Martin Europese Commissie DG Research

overmeiere, Ton Gem. Den Haag Programma manager EFRo

Schoorel, Dick agentschap NL adviseur KP7

Smits, Stef Ministerie van EZ Beleids adviseur

Spapens, Jean- Christophe

PZH Manager EU and international affairs

Verkerk, Bas Gem. Delft Burgemeester

Vink, Greet TU Delft Programma Manager overheid

Vis, Dirk Minne Syntens Regiodirecteur West

Zwan, arie van der Ministerie van EZ Sr. Beleidsmedewerker Innovatiebeleid

aTaCHEMENTS

2. aCCoUNT oF THE EU2020 WoRKSHoP – JUNE 2010 [IN DUTCH]

aCHTERGRoNDINFoRMaTIE BIJ BIJEENKoMST INNoVaTIE IN ZUID-HoLLaND EN EU 2020

inleidingIn dit document wordt kort de achtergrond van het onderzoek uitgelegd en de drie thema’s die we op de bijeenkomst van 10 juni gaan bespreken wat verder uitgediept met resultaten die we uit het MKB-survey, de interviews en literatuurstudie gevonden hebben.

Achtergrond: Kenniseconomie in zuid-HollandInnovatie is een belangrijke pijler in een moderne economie. Dit is in Zuid-Holland niet anders. We kunnen echter tot geen andere constatering komen dat Zuid-Holland op het gebied van innovatie achter loopt op andere Nederlandse en Europese regio’s. In de ranglijst van Europese regio’s is Zuid-Holland teruggezakt naar de 67e plaats (2009). op sommige gebieden loopt Zuid-Holland behoorlijk achter. Er zijn echter ook sterke punten en kansen.

op sommige gebieden scoort Zuid-Holland erg goed. Er zijn enkele sterke en veelbelovende clus-ters in Zuid-Holland zoals de Greenports, Petrochemie/haven, Bio-tech/medisch, Vrede en vei-ligheid, Water en delta-technologie en transport en logistiek. Daarnaast is erg veel kennis in de regio met de aanwezigheid van drie topuniversiteiten, verschillende grote kennisinstituten, een groot aantal HBo’s en talrijke kleine en grote succesvolle ondernemingen. Vanuit het perspectief van de vier o’s, doen er drie het in ieder geval goed.

Deze kunnen elkaar echter soms moeilijk vinden. Kennisoverdracht en valorisatie zijn nog geen vanzelfsprekende successen, ook mede door een gebrek aan kapitaal. Dit is een gebrekkige situ-atie: het potentieel aan kennis en innovatie in de regio wordt niet benut.

Vanuit deze constatering is onderzocht of er vanuit de Europese dimensie een bijdrage kan worden geleverd aan de Zuid-Hollandse kenniseconomie. Uit het onderzoek komen drie thema’s naar voren die we graag met de betrokkenen uit het veld willen bespreken.

Thema 1: Benutting van EU-kansen in zuid-HollandDe Europese Unie heeft verschillende middelen om innovatiekracht in de regio te helpen verbe-teren. Het gaat hier niet alleen om subsidies zoals EFRo en KP7, maar ook op contacten en het delen van kennis.

Hoewel er met regelmaat sceptisch over gesproken wordt en er hardop aan getwijfeld wordt of deze echt helpen, zijn er genoeg goede voorbeelden waarin dit zeker het geval is. We moeten dus zorgen dat we deze middelen niet alleen kunnen gebruiken, maar dat we deze ook goed gebruiken.

als het aankomt op kapitaalmiddelen bestaan de mogelijkheden voornamelijk, maar niet exclus-ief uit EFRo, ESF, KP7, EIB fondsen, KIC/EIT, Regions of Knowledge en Interreg. Hieronder bekijken staat de situatie in Zuid-Holland beschreven en de toekomstige ontwikkelingen op dit vlak waar-mee rekening gehouden moeten worden in de regio.

Kader Programma 7: In KP7 programma’s scoort Zuid-Holland als beste regio van Nederland en in de absolute top van de EU (165 mln. €). Dit geld gaat echter voornamelijk naar de instituten, het MKB en de grotere bedrijven zijn hierin ondervertegenwoordigd. De links in de regio zijn

aTaCHEMENTS

hierin dus zwak. In het volgende kaderpromma, is de verwachting dat regionale inbedding van kennis belangrijker gaat worden en de Regions of Knowledge aanpak uitgebreid zal worden. Deze zouden op hun beurt weer voorlopers kunnen zijn op een Knowledge and Innovation Community (KIC), binnen het European Institute of Innovation and Technology.

Structuurfondsen (EFRO): De kwaliteit van projecten gesteund door EFRo fondsen gaat omhoog, de eisen hieraan worden ook strenger. Er zijn echter vaak problemen met cofinanciering. Dit is een EU-wijd probleem te zijn en doet Nederland het in de benutting van de fondsen erg goed. Geïnterviewden hebben echter aangegeven dat ze graag hier meer snelheid zouden zien en financiering voor grotere, regio-wijde projecten, naar het voorbeeld van de BeBasic testfaciliteit of the NeCen microscoop in Leiden.

Landbouwbeleid: De hoge uitgaven in het landbouwbudget zijn erg betwist, maar lijken toch de volgende budgetronde gehandhaafd te blijven. Hierin zal wel een verschuiving plaatsvinden van productie ondersteuning naar meer innovatieve landbouw.

European Investment Bank leningen: Deze worden weinig gebruikt in Zuid-Holland. Er bestaat de vraag of deze ook wel echt zoveel voordeliger zijn als de markt. Veel spelers in Zuid-Holland staan hier dus sceptisch tegenover. Deze worden in Eindhoven wel gebruikt, waar een lening van € 200 miljoen is geland.

Thema 2: EU agenda zuid-Holland alle spelers in Zuid-Holland erkennen het belang van Europese subsidies en het belang van een goed functionerende kenniseconomie. Dat de politiek hierin een rol kan spelen is hierin ook een gedeelde visie. De geïnterviewden en beleidsdocumenten geven aan dat het belangrijk is dat spelers elkaar makkelijker moeten kunnen vinden.Een punt wat ook vaak genoemd werd is een gedeelde economische visie, waarin de regio ki-est voor enkele speerpunten, die zowel regionaal de aandacht verdienen, als die richting de EU ingezet worden voor het binnenhalen voor subsidies (en dus ook deze EU strategie hierin definiëren). Hierin is het erg belangrijk dat de EU middelen in de regio op elkaar afgestemd en gedeeld worden.op dit moment wordt hieraan gewerkt in Zuidvleugelverband, door het opstellen van de nieuwe Economische agenda.

Thema 3: OrganisatieIn het onderzoek kwam naar voren dat succesvolle regio’s in de EU zich goed hebben georgani-seerd. Er is steeds sprake van een gedeelde visie en strategie, gekoppeld aan een effectief uitvo-eringssysteem. Binnen dit thema wordt besproken hoe hieraan in Zuid-Holland vorm kan worden gegeven.

Hiervoor zijn verschillende vormen denkbaar, van een informeel netwerk van EU liaisons tot het organiseren van specifieke capaciteiten op regionaal niveau. Hierbij moet rekening gehouden met het onderscheid tussen projectontwikkeling en specifieke EU-subsidie kennis en lob-bynetwerken. In de interviews zijn voorkeuren voor verschillende vormen uitgesproken. In de survey is gebleken dat het MKB meer ondersteuning wenst.

aTaCHEMENTS

3. LIST oF PaRTICIPaNTS IN EU2020 WoRKSHoP

NaaM oRGaNISaTIE FUNCTIE

aken, Geert van Gem. Den Haag Teammanager Economie

althuis, Paul TU Delft Directeur Valorisatie

Berg, Gert-Jan v.d. TU Delft/ Technet Delft Medewerker Valorisation Centre (MKB & Technostarters)

Blind, Michiel Deltares Coördinator EuropaDesk/Senior-adviseur

Boot, Luc oBR Beleidscoordinator

Broeksma, Cees KVK Den Haag Directeur Regio Stimulering

Eijkelenburg, Wim Gem. Delft Senior adviseur

Geel, Patrick van Gem. Delft EU Specialist

Genet, Louis Gem. Den Haag Programma directeur Investeringen

Genuchten, Pieter van Stadsgewest Haaglanden

Hoofd Economische Zaken

Goossensen, Hans PZH Hoofd Economische Zaken

Guldemond, Pieter Gem. Delft Wethouder EZ

Hoondert, Wildert Gem. Delft Manager Economie & Stadsmarketing

Kok, Laurens WFIa Investor Relations & Communications

Kruijff, Kees Gem. Delft Prog. Man. Internatioaal Beleid

Lacroix, Lodewijk Stedenbaan Programma directeur

Los, Stefan Gem. Den Haag Beleidsmedewerken

overmeiere, Ton Gem. Den Haag Programma manager EFRo

Rutgers, Wim WFIa International Business advisor

Schmidt, Dick TNo Directeur TNo bouw

Schol, Martijn Gem. Delft Strategic advisor Citymarketign

Schuurmans, Helen VNG Project Manager

Smit, Nick Gem. Delft Bestuursassistent

aTaCHEMENTS

Kennisalliantie

Crommelinplein 1 2627 BM Delft T. 015 2840487 W. kennisalliantie.nl E. [email protected]

building a bridge to brussels

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