"It is my firm conviction that we need Europe"

Speech by the Parliamentary State Secretary to the Federal Minister of Education and Research Michael Meister on the topic of "The European Research Area: Driver for Europe’s Future Viability".

Michael Meister während seiner Rede.
Speech by Michael Meister on the topic of "The European Research Area: Driver for Europe’s Future Viability" © Mandarine Gestion

Speech by the Parliamentary State Secretary to the Federal Minister of Education and Research Dr. Michael Meister MdB on the occasion of the International Investment Conference in Munich on 23 September 2019.

Mr Renaud,
Mr Krebs,
Ladies and Gentlemen,

In the face of the major social challenges we currently face – such as climate change, securing our energy supply, digital transformation, demographic change and migration – we depend on research for new solutions and approaches.

Research and innovation are key to our global competitiveness. Innovations boost economic value creation, they create qualified jobs and ensure prosperity.

We must take care not to be left behind in competition with other world regions, particularly in such key areas as the industrial use of artificial intelligence and quantum technologies.

Our aim must be to retain Europe's technological strength and sovereignty.

It is a task for policy-makers to provide suitable conditions in order to consolidate Europe's leading position.

I. The European Research Area

For this purpose, we established the European Research Area in 2000 as "a unified research area open to the world based on the Internal Market, in which researchers, scientific knowledge and technology circulate freely". The aim of this research area is to strengthen Europe's scientific and technological basis. The Treaty of Lisbon signed in 2009 established the legal basis for this effort.

But why do we have to deal with research and innovation policy at European level? Can this not remain a national task for each individual state?

It is my firm conviction that we need Europe – both as a marketplace for new products and services, and as a research area. Any single Member State, including Germany as the biggest Union member, is too small to be successful on its own in international competition. A European approach can achieve considerable impact, however. New opportunities emerge wherever science efforts are pooled and networks of national research and innovation activities created.

This is why national governments cooperate closely with the European Commission in this policy area. This is also why we are coordinating our national research agendas and funding measures.

The European Research Area has made research cooperation in Europe easier, quicker and more effective compared to the situation 20 years ago. Close research networks have emerged as a result of mobility and collaboration within the European Research Area.

There are joint research organizations such as the European Space Agency ESA. World-class joint research infrastructures are being operated, including the European X-Ray Free-Electron Laser Facility XFEL. And new types of e-infrastructures like the European Open Science Cloud are being established for storing and processing scientific data.

The EU currently contributes almost 25 percent to global knowledge production – while accounting for a mere 7 percent of the world population.

So it pays off to invest in research and innovation in Europe! The European Research Area has helped us achieve the best and most open circulation of knowledge and technology on a global scale. We have highly qualified and mobile researchers and innovators. And we have an internal market that is able to embrace innovations and technologies and yield a good return on investment.

But we must keep pushing our efforts to retain our lead in global competition. Investment and innovation, together with value-driven research, play a key role in this context.

II. Investment in R&I

Ladies and Gentlemen,

Europe needs a sound financial basis in order to remain a world leader in research and innovation. The EU Framework Programme for Research and Innovation is the main instrument in realizing the European Research Area.

The Commission proposal for the EU's "Horizon Europe" framework programme, which is to be launched in 2021, provides for an ambitious budget of 94.1 billion euros. The European Parliament has even requested that 120 billion euros should be provided for research and innovation. The negotiations currently being held on the EU's Multiannual Financial Framework will clarify the situation next year.

What is already clear is that "Horizon Europe" only accounts for ten percent of the overall R&I investment in Europe. National efforts are therefore of great importance.

The EU 2020 Strategy includes the common aim of investing three percent of GDP in research and innovation. Germany has achieved this target as one of only four EU Member States to do so.

We invested more than three percent of GDP in research and development in 2017 in a joint effort between government and industry. This is why we have set ourselves an even more ambitious goal of 3.5 percent, which we want to achieve by 2025. Germany is the 'Engine of Europe'. We are continuing our efforts.

The Federal Government has already taken appropriate action: We have adopted three major science pacts which will support universities and research institutions with more than 160 billion euros over ten years starting in 2021.

The decision on future excellence universities was taken a few weeks ago. The Federal Government and the Länder provide more than half a billion euros each year for the Excellence Strategy. In this way, we are strengthening top-quality university research and supporting outstanding universities with international appeal. The Federal Government and the Länder have never before created such long-term, financially stable prospects for science and research in Germany.

Beside government funding, private investment is crucial in achieving the 3.5 percent target. We appreciate the commitment of the private sector, which contributes the larger part of expenditure on research and development. Between 2007 and 2017, German industry increased its R&D investments from 43 to 68.8 billion euros.

Pursuing our goal to boost such R&D investments further, we achieved a breakthrough on 22 May. The Federal Cabinet decided to introduce tax concessions for research and development. Germany is one of five of the 36 OECD member countries which have so far not offered any tax incentives to support R&D.

This is a disadvantage in international competition for innovative companies and those working in R&D. The Federal Government expects a shortfall in tax revenue of about five billion euros in the period 2021 to 2024.

Start-ups, SMEs and big companies can use this additional financial scope and spend the money on new, high-risk research projects. By combining investments from public and private sources, we will be able to achieve the 3.5 percent target. We are on the right track.

III. Innovation

The issue of investment brings us directly to the topic of innovation. Investment pays off where innovation is achieved. The translation of research results into innovative products contributes substantially to economic value creation. It reinforces Europe's competitive strength.

But what about the commercialization of scientific findings at European level? Surveys have revealed that Europe still scores worse than the United States when it comes to the transfer of scientific knowledge into industrial application. And this despite similar levels of scientific productivity in both regions.

This phenomenon has become known as the "European paradox". How can we better support innovation processes in Europe in order to fully exploit scientific potential?

In recent years, two structural hurdles were identified which we are now addressing with new instruments at national and European level:

First, the achievement of market maturity in the innovation process, and second, the success of disruptive innovations.

As regards the first point, numerous measures at European and national level already target the improved use of research results for industrial purposes.

The EU's research framework programme supports projects along the entire innovation chain – from the idea to the product. Funding instruments such as the SME instrument or 'Fast track to innovation' were extremely successful in the past.

But they were not able to fully solve the problem of the 'Innovation Valley of Death'. Here, the main challenge is to translate ideas into innovative products which target specific groups of users.

The Knowledge and Innovation Communities of the European Institute of Innovation and Technology are a good example: public start-up funding is provided and then industry assumes sole responsibility for the development of marketable products.

A combination of grant-based funding and risk capital seems to be a promising means to help innovations make it through the Valley of Death.

The European Innovation Council, which supports market-creating breakthrough innovations, is already pursuing this approach with its EIC Accelerator Pilot.

In the negotiations on the European Innovation Council, we insisted on ensuring a high level of compatibility with our national innovation assistance. The European Innovation Council will serve to provide follow-up funding for successful projects which have already been funded at the regional and national scale.

The second challenge is the increased dynamism that digitalization entails. New technology companies and business models can revolutionize familiar value creation processes, technology uses and user behaviours at never before seen speeds.

Disruptive or breakthrough innovations have so far mostly occurred in other countries like the USA and China. In August last year, we decided to establish an agency to promote breakthrough innovations and strengthen Germany's competitiveness in this field.

This represents an entirely new approach as defined in the German High-Tech Strategy 2025. The Agency will provide innovation stakeholders with the financial resources and scope to translate pioneering ideas into applications.

Endowed with a budget of one billion euros over ten years, it will be able to act more quickly and flexibly than current government funding instruments.

The twelve members of the high-calibre Founding Committee were appointed in March this year, and in July we had the pleasure to announce that CEO Rafael Laguna will serve as the Agency's Founding Director.

Innovation is the driver of Europe's future competitiveness. This is why research and innovation must remain political priorities, not only at national but also at European level. We want to create a busy and dynamic innovation ecosystem in which research, innovation and education are closely interlinked.

IV. The European approach

Let us once again look at the bigger picture:

Europe is more than the internal market. We see closely linked historical traditions as well as shared values and visions of our future. We must set our own European standards in the face of increasing American isolationism and Chinese expansion. The European approach is characterized by openness, freedom and orientation to our democratic values.

Consequently, the European Research Area means more than investments and innovative products. By pooling our efforts in Europe, we can define standards in research and innovation in accordance with our ethical principles.

This will help us preserve our European way of life. Only together will we be able to compete successfully with the United States and China in the high-tech sector. This applies in particular, though not exclusively, to the field of artificial intelligence.

The European institutions and the Member States are placing priority on artificial intelligence as a key technology. But artificial intelligence also has negative potential in that it may violate the protection of personal data and individual data sovereignty.

There is a widening global gap between countries in which artificial intelligence is only subject to the logic of the free market or to government requirements and those countries which aim to create an ethical framework.

The European Commission and the German Government both support efforts to establish common ethical standards. In this context, the Commission has appointed an expert group on artificial intelligence.

We need creative policy-making to ensure that common rules in Europe will not place us at a disadvantage in international competition. Indeed, they may even contribute substantially to strengthening our competitive edge. After all, they provide for trustworthy products.

In addition to defining ethical principles, we will provide strong support at national and European level to ensure that 'Artificial intelligence made in Europe' will achieve international visibility.

V. Brexit

Ladies and Gentlemen,

The question about the benefit of a European approach can be answered very clearly when it comes to research and innovation policy. There are few areas of the European Union where stakeholders cooperate as closely as researchers and innovators do. Science and research in Europe highlight the importance of openness and cooperation across the borders between countries, disciplines and institutions.

This is why most researchers disapprove of Britain's plans to leave the European Union. It can clearly be seen that both sides benefit from close scientific cooperation.

The United Kingdom has world-class universities. Fifteen European universities are ranked among the world's top 50 – seven of them are located in the UK. Cooperation with researchers at these institutions is valued highly throughout the rest of Europe.

On the other hand, integration in European networks is essential for the success of British researchers' work. Under the 'Horizon 2020' research framework programme, British and German partners are currently cooperating in 3,061 out of 24,274 projects. That is roughly one in eight European projects.

From the day of Britain's withdrawal, it will no longer be possible for researchers in the United Kingdom to receive funding from the EU research framework programme. While industrialized third countries can participate in EU programmes, they cannot obtain funding from the European Union.

The UK government has announced that it will provide financial support for the British partners in EU projects. Less stringent visa requirements for international researchers in the United Kingdom are planned to contribute to easing continued exchange.

It is of utmost importance for the European Research Area that these promises be kept. We hope that the UK will remain closely involved in the European Research Area and the EU research framework programme even after Brexit.

VI. Concluding remarks

Ladies and Gentlemen,

Close networks between researchers, sound funding programmes involving European competition, and excellent research infrastructures are among the achievements of the European Research Area.

The European Research Area sets out the European course towards achieving excellence in research and innovation. It is the driver for Europe's competitiveness in a globalized world.

We aim to strengthen the European Research Area even further. This will be one of our priorities during the German EU Council Presidency in the second half of 2020. After all, investments in education, research and innovation are the guarantee for our future.

Thank you.