PART II

The specific objective is to maintain and build global leadership through research and innovation in enabling technologies and space, which underpin competitiveness across a range of existing and emerging industries and sectors. The global business environment is changing rapidly and the objectives of the Europe 2020 strategy present challenges and opportunities to European industry. Europe needs to accelerate innovation, transforming the knowledge generated to underpin and enhance existing products, services and markets, and to create new ones while maintaining focus on quality and sustainability. Innovation should be exploited in the widest sense, going beyond technology to include business, organisational and social aspects. To stay at the forefront of global competition with a strong technological base and industrial capabilities, increased strategic investments in research, development, validation and piloting are required in ICT, nanotechnologies, advanced materials, biotechnology, advanced manufacturing and processing, and space. The successful mastering, integration and deployment of enabling technologies by European industry is a key factor in strengthening Europe's productivity and innovation capacity and ensuring that Europe has an advanced, sustainable and competitive economy, global leadership in hi-tech application sectors and the ability to develop effective and sustainable solutions for societal challenges. The pervasive nature of such activities can spur further progress through complementary inventions, applications and services, ensuring a higher return on investment in these technologies than in any other field. These activities will contribute to the objectives of the flagship initiatives 'Innovation Union', 'Resource-efficient Europe', 'An industrial policy for the globalisation era', and 'Digital Agenda for Europe' of the Europe 2020 strategy, as well as to Union space policy objectives. The activities under the specific objective 'Leadership in Enabling and Industrial Technologies' will be primarily based on research and innovation agendas mainly defined by industry and business, including SMEs, together with the research community and Member States in an open and transparent manner and have a strong focus on leveraging private sector investment and on innovation. The integration of enabling technologies in solutions for the societal challenges shall be supported together with the relevant challenges. Applications of enabling technologies that do not fall under the societal challenges, but are important for reinforcing the competitiveness of European industry, shall be supported under the specific objective 'Leadership in Enabling and Industrial Technologies'. Appropriate coordination should be sought with the priorities 'Excellent Science' and 'Societal Challenges'. The approach shall include both agenda-driven activities and more open areas to promote innovative projects and breakthrough solutions covering the whole value chain, including R&D, large-scale pilots and demonstration activities, test beds and living labs, prototyping and product validation in pilot lines. Activities shall be designed to boost industrial competitiveness by stimulating industry, and in particular SMEs, to make more research and innovation investment, including through open calls. Adequate focus will be given to small and medium scale projects. A major component of the specific objective 'Leadership in Enabling and Industrial Technologies' are Key Enabling Technologies (KETs), defined as micro- and nanoelectronics, photonics, nanotechnology, biotechnology, advanced materials and advanced manufacturing systems COM(2009)0512. . These multi-disciplinary, knowledge and capital-intensive technologies cut across many diverse sectors providing the basis for significant competitive advantage for European industry, for stimulating growth and for creating new jobs. An integrated approach, promoting the combination, convergence and cross-fertilisation effect of KETs in different innovation cycles and value chains can deliver promising research results and open the way to new industrial technologies, products, services and novel applications (e.g. in space, transport, agriculture, fisheries, forestry, environment, food, health and energy). The numerous interactions of KETs and other industrial enabling technologies will therefore be exploited in a flexible manner, as an important source of innovation. This will complement support for research and innovation in KETs that may be provided by national or regional authorities under the Cohesion Policy Funds within the framework of smart specialisation strategies. Innovation requires enhanced cross-technology research efforts. Therefore, multidisciplinary and multi-KET projects should be an integral part of the priority 'Industrial Leadership'. The Horizon 2020 implementation structure supporting KETs and cross-cutting KET activities (multi KETs) should ensure synergies and effective coordination, among others, with societal challenges. In addition, synergies will be sought, where appropriate, between KET activities and the activities under the cohesion policy for 2014-2020, as well as with the EIT. For all the enabling and industrial technologies, including the KETs, a major aim will be to foster interactions between the technologies and with the applications under the societal challenges. This shall be fully taken into account in developing and implementing the agendas and priorities. It requires that stakeholders representing the different perspectives are fully involved in priority setting and implementation. In certain cases, it will also require actions that are jointly funded by the enabling and industrial technologies and by the relevant societal challenges. This could include joint funding for public-private partnerships that aim to develop technologies, foster innovation and apply such technologies to address societal challenges. ICT plays an important role as it provides the key basic infrastructures, technologies and systems for vital economic and social processes and new private and public products and services. European industry needs to remain at the cutting edge of technological developments in ICT, where many technologies are entering a new disruptive phase, opening up new opportunities. Space is a rapidly growing sector which delivers information vital to many areas of modern society, meeting its fundamental demands, addresses universal scientific questions, and serves to secure the Union's position as a major player on the international stage. Space research underpins all activities undertaken in space, but is currently addressed in programmes run by Member States, the European Space Agency (ESA) or in the context of Union Framework Programmes for Research. Union level action and investment in space research are required in accordance with Article 189 TFEU, in order to maintain the competitive edge, to safeguard Union space infrastructures and programmes such as Copernicus and Galileo and to sustain a future role for Europe in space. In addition, innovative downstream services and user-friendly applications using space derived information represent an important source of growth and job creation, and their development represents an important opportunity for the Union. Europe can achieve critical mass through partnering, clusters and networks, standardisation, promoting cooperation between different scientific and technological disciplines and sectors with similar research and development needs, leading to breakthroughs, new technologies and innovative product, service and process solutions. The development and implementation of research and innovation agendas including through public–private partnerships, but also by the building of effective industry-academia links, the leveraging of additional investments, the access to risk finance, standardisation and the support to pre-commercial procurement and the procurement of innovative products and services, are all aspects that are essential in addressing competitiveness. In this regard, strong links with the EIT are also needed to produce and promote entrepreneurial top talents and to speed up innovation by bringing together people from different countries, disciplines and organisations. Union level collaboration can also support trade opportunities through the support for the development of European or international standards for new emerging products and services and technologies. Development of such standards following consultation of relevant stakeholders, including those from science and industry, could have a positive impact. Activities in support of standardisation and interoperability, safety and pre-regulatory activities will be promoted. In line with the flagship initiative 'Digital Agenda for Europe' COM(2010)0245. , the specific objective of ICT research and innovation (R&I) is to enable Europe to support, develop and exploit the opportunities brought by ICT progress for the benefits of its citizens, businesses and scientific communities. As the world's largest economy and representing the largest share of the world's ICT market, worth more than EUR 2600 billion (EUR 2600000000000) in 2011, Europe should have legitimate ambitions for its businesses, governments, research and development centres and universities to lead European and global developments in ICT, to grow new business, and to invest more in ICT innovations. By 2020, Europe's ICT sector should supply at least the equivalent of its share of the global ICT market, which was about one third in 2011. Europe should also grow innovative businesses in ICT so that one third of all business investment in ICT R&D in the Union, which amounted to more than EUR 35 billion per year in 2011, is made by companies created within the last two decades. This would require an increase in public investments in ICT R&D in ways that leverage private spending, towards the goal of amplifying investments in the next decade, and significantly more European poles and clusters of world-class excellence in ICT. To master increasingly complex and multidisciplinary technology and business chains in ICT, partnering, risk-sharing and mobilisation of critical mass across the Union are needed. Union level action should help industry address a single market perspective and achieve economies of scale and scope. Collaboration around common, open technology platforms with spill-over and leverage effects will allow a wide range of stakeholders to benefit from new developments and create further innovations. Partnering at Union level also enables consensus building, establishes a visible focal point for international partners, and will support the development of standards and interoperable solutions both in the Union and worldwide. ICT underpins innovation and competitiveness across a broad range of private and public markets and sectors, and enables scientific progress in all disciplines. Over the next decade, the transformative impact of digital technologies and ICT components, infrastructures and services will be increasingly visible in all areas of life. Computing, communication and data storage resources will continue to spread over the coming years. Vast amounts of information and data, including real-time, will be generated by sensors, machines and information-enhanced products, making action at a distance commonplace, enabling global deployment of business processes and sustainable production sites allowing the creation of a wide range of services and applications. Many critical commercial and public services and all key processes of knowledge production in science, learning, business and the culture and creative sector as well as the public sector will be provided, and thus made more accessible, through ICT. ICT will provide the critical infrastructure for production and business processes, communication and transactions. ICT will also be indispensable in contributing to key societal challenges, as well as to societal processes such as community formation, consumer behaviour, political participation and public governance, for example by means of social media and collective-awareness platforms and tools. It is crucial to support and integrate research which takes a user-centred perspective in order to develop competitive solutions. The Union support to ICT research and innovation makes a significant contribution to the development of the next generation technologies and applications as it makes up a large part of total spending on collaborative, mid-to-high risk R&I in Europe. Public investment in ICT research and innovation at Union level has been and remains essential to mobilise the critical mass leading to breakthroughs and to a wider uptake and better use of innovative solutions, products and services. It continues to play a central role in developing open platforms and technologies applicable across the Union, in testing and piloting innovations in real pan-European settings and in optimising resources when addressing Union competitiveness and tackling common societal challenges. Union support to ICT research and innovation is also enabling hi-tech SMEs to grow and capitalise on the size of Union-wide markets. It is strengthening collaboration and excellence amongst Union scientists and engineers, reinforcing synergies with and between national budgets, and acting as a focal point for collaboration with partners outside Europe. Successive evaluations of ICT activities in the Seventh Framework Programme have shown that focused ICT research and innovation investment undertaken at Union level has been instrumental in building industrial leadership in areas like mobile communications and safety-critical ICT systems, and to address challenges like energy-efficiency, health, food security, transport or demographic change. Union investments in ICT research infrastructures have provided European researchers with the world's best research networking and computing facilities. A number of activity lines shall target ICT industrial and technological leadership challenges and cover generic ICT research and innovation agendas, including notably: A new generation of components and systems: engineering of advanced, embedded and energy- and resource-efficient components and systems; Next generation computing: advanced and secure computing systems and technologies, including cloud computing; Future Internet: software, hardware, infrastructures, technologies and services; Content technologies and information management: ICT for digital content and for cultural and creative industries; Advanced interfaces and robots: robotics and smart spaces; Micro- and nanoelectronics and photonics: key enabling technologies related to micro- and nanoelectronics and to photonics covering also quantum technologies. These six major activity lines are expected to cover the full range of needs, taking into account the competitiveness of European industry on a global scale. These would include industrial leadership in generic ICT-based solutions, products and services needed to tackle major societal challenges as well as application-driven ICT research and innovation agendas which will be supported together with the relevant societal challenge. In view of the ever increasing advancement of technology in all areas of life, the interaction between humans and technology will be important in this respect, and part of the application-driven ICT research mentioned above. These six activity lines shall also include ICT specific research infrastructures such as living labs for experimentation, and infrastructures for underlying key enabling technologies and their integration in advanced products and innovative smart systems, including equipment, tools, support services, clean rooms and access to foundries for prototyping. Horizon 2020 will support research and development of ICT systems in full respect of the fundamental rights and freedoms of natural persons and in particular their right to privacy. The specific objective of nanotechnologies research and innovation is to secure Union leadership in this high growth global market, by stimulating scientific and technological advancements and investment in nanotechnologies and their uptake in high added value, competitive products and services across a range of applications and sectors. By 2020, nanotechnologies will be mainstreamed, that is seamlessly integrated with most technologies and applications, driven by consumer benefits, quality of life, healthcare, sustainable development and the strong industrial potential for achieving previously unavailable solutions for productivity and resource efficiency. Europe must also set the global benchmark on safe and responsible nanotechnology deployment and governance ensuring both high societal and industrial returns combined with high standards of safety and sustainability. Products using nanotechnologies represent a world market which Europe cannot afford to ignore. Market estimates of the value of products incorporating nanotechnology as the key component reach EUR 700 billion by 2015 and EUR 2 trillion by 2020, with a corresponding 2 and 6 million jobs respectively. Europe's nanotechnology companies should exploit this double digit market growth and be capable of capturing a market share at least equal to Europe's share of global research funding (i.e. a quarter) by 2020. Nanotechnologies are a spectrum of evolving technologies with proven potential, having revolutionary impact for example in materials, ICT, transport mobility, life sciences, healthcare (including treatment), consumer goods and manufacturing once the research is translated into breakthrough, sustainable and competitive products and production processes. Nanotechnologies have a critical role to play in addressing the challenges identified by the Europe 2020 strategy. The successful deployment of these key enabling technologies will contribute to the competitiveness of Union industry by enabling novel and improved products or more efficient processes and provide responses to today's and future societal challenges. The global research funding for nanotechnologies has doubled from around EUR 6,5 billion in 2004 to around EUR 12,5 billion in 2008, with the Union accounting for about a quarter of this total. The Union has recognised research leadership in nanosciences and nanotechnologies with a projection of some 4000 companies in the Union by 2015. This research leadership must be maintained and amplified and further translated into practical use and commercialisation. Europe now needs to secure and build on its position in the global market by promoting wide scale cooperation in and across many different value chains and between different industrial sectors to realise the process scale-up of these technologies into safe, sustainable and viable commercial products. The issues of risk assessment and management as well as responsible governance are emerging as determining factors of future impact of nanotechnologies on society, the environment and the economy. Thus, the focus of activities shall be on the widespread, responsible and sustainable application of nanotechnologies into the economy, to enable benefits with high societal and industrial impact. To ensure the potential opportunities, including setting-up new companies and generating new jobs, research should provide the necessary tools to allow for standardisation and regulation to be correctly implemented. Aiming at fundamentally new products enabling sustainable solutions in a wide range of sectors. Advancing scientific knowledge of the potential impact of nanotechnologies and nanosystems on health or on the environment, and providing tools for risk assessment and management along the entire life cycle, including standardisation issues. Focusing on governance of nanotechnology for societal and environmental benefit. Focusing on new operations, smart integration of new and existing processes, including technology convergence, as well as up-scaling to achieve high precision large-scale production of products and flexible and multi-purpose plants that ensure the efficient transfer of knowledge into industrial innovation. Focusing on the underpinning technologies supporting the development and market introduction of safe complex nanomaterials and nanosystems. The specific objective of advanced materials research and innovation is to develop materials with new functionalities and improved in-service performance, for more competitive and safe products that minimise the impact on the environment and the consumption of resources. Materials are at the core of industrial innovation and are key enablers. Advanced materials with higher knowledge content, new functionalities and improved performance are indispensable for industrial competitiveness and sustainable development across a broad range of applications and sectors. New advanced materials are needed in developing better performing and sustainable products and processes and for substituting scarce resources. Such materials are a part of the solution to our industrial and societal challenges, offering better performance in their use, lower resource and energy requirements, and sustainability during the entire life-cycle of the products. Application-driven development often involves the design of totally new materials, with the ability to deliver planned in-service performances. Such materials are an important element in the supply chain of high value manufacturing. They are also the basis for progress in cross-cutting technology areas (for example healthcare technologies, biosciences, electronics and photonics) and in virtually all market sectors. The materials themselves represent a key step in increasing the value of products and their performance. The estimated value and impact of advanced materials is significant, with an annual growth rate of about 6 % and expected market size of the order of EUR 100 billion by 2015. Materials shall be conceived according to a full life-cycle approach, from the supply of available materials to end of life (cradle to cradle), with innovative approaches to minimise the resources (including energy) required for their transformation or to minimise negative impacts for humans and the environment. Continuous use, recycling or secondary end-of-life utilisation of the materials shall also be covered, as well as related societal innovation, such as changes in consumer behaviour and new business models. To accelerate progress, a multidisciplinary and convergent approach shall be fostered, involving chemistry, physics, engineering sciences, theoretical and computational modelling, biological sciences and increasingly creative industrial design. Novel green innovation alliances and industrial symbiosis shall be fostered allowing industries to diversify and expand their business models, re-using their waste as a basis for new productions. Research on materials by design, functional materials, multifunctional materials with higher knowledge content, new functionalities and improved performance, and structural materials for innovation in all industrial sectors, including the creative industries. Research and development to ensure efficient, safe and sustainable development and scale-up to enable industrial manufacturing of future design-based products towards a "no-waste" management of materials in Europe. Research and development for new and innovative techniques for materials and their components and systems. Developing new products and applications, business models and responsible consumer behaviour that reduce energy demand and facilitate low-carbon production. Applying design and the development of converging technologies to create new business opportunities, including the preservation and restoration of materials with historical or cultural value, as well as novel materials. Promoting technologies such as characterisation, non-destructive evaluation, continuous assessing and monitoring and predictive modelling of performance for progress and impact in materials science and engineering. Research and development to investigate substitution and alternatives to the use of materials and innovative business model approaches and identification of critical resources. The specific objective of biotechnology research and innovation is to develop competitive, sustainable, safe and innovative industrial products and processes and contribute as an innovation driver in a number of European sectors, like agriculture, forestry, food, energy, chemical and health as well as the knowledge-based bioeconomy. A strong scientific, technological and innovation base in biotechnology will support European industries securing leadership in this key enabling technology. This position will be further strengthened by integrating the health and safety assessment, the economic and environmental impact of use of the technology and the management aspects of the overall and specific risks in the deployment of biotechnology. Powered by the expansion of the knowledge of living systems, biotechnology is set to deliver a stream of new applications and to strengthen the Union's industrial base and its innovation capacity. Examples of the rising importance of biotechnology are in industrial applications including biopharmaceuticals, food and feed production and biochemicals, of which the market share of the latter is estimated to increase by up to 12 % to 20 % of chemical production by 2015. A number of the so-called twelve principles of Green Chemistry are also addressed by biotechnology, due to the selectivity and efficiency of biosystems. The possible economic burdens for Union enterprises can be reduced by harnessing the potential of biotechnology processes and bio-based products to reduce CO_(2) emissions, estimated to range from between 1 to 2,5 billion tonnes CO_(2) equivalent per year by 2030. In Europe's biopharmaceutical sector, already some 20 % of the current medicines are derived from biotechnology, with up to 50 % of new medicines. Biotechnology will play a major role in the transition towards a bio-based economy by developing new industrial processes. Biotechnology also opens new avenues for the development of a sustainable agriculture, aquaculture and forestry and for exploiting the huge potential of marine resources for producing innovative industrial, health, energy, chemical and environmental applications. The emerging sector of marine (blue) biotechnology has been predicted to grow by 10 % a year. Other key sources of innovation are at the interface between biotechnology and other enabling and converging technologies, in particular nanotechnologies and ICT, with applications such as sensing and diagnosing. Development of emerging technology areas such as synthetic biology, bioinformatics and systems biology, which hold great promise for innovative products and technologies and completely novel applications. Developing industrial biotechnology and industrial scale bio-process design for competitive industrial products and sustainable processes (e.g. chemical, health, mining, energy, pulp and paper, fibre-based products and wood, textile, starch, food processing) and its environmental and health dimensions, including clean-up operations. Development of platform technologies (e.g. genomics, meta-genomics, proteomics, metabolomics, molecular tools, expression systems, phenotyping platforms and cell-based platforms) to enhance leadership and competitive advantage in a wide number of sectors that have economic impacts. The specific objective of advanced manufacturing and processing research and innovation is to transform today's manufacturing enterprises, systems and processes. This will be done inter alia by leveraging key enabling technologies in order to achieve more knowledge-intensive, sustainable, resource- and energy-efficient trans-sectoral manufacturing and processing technologies, resulting in more innovative products, processes and services. Enabling new, sustainable products, processes and services and their competitive deployment, as well as advanced manufacturing and processing is also essential for achieving the objectives of the priority 'Societal challenges'. The manufacturing sector is of high importance to the European economy, contributing to around 17 % of GDP and accounting for some 22 million jobs in the Union in 2007. With the lowering of economic barriers to trade and the enabling effect of communications technology, manufacturing is subject to strong competition and has been gravitating to countries of lowest overall cost. The European approach to manufacturing therefore has to change radically to remain globally competitive, and Horizon 2020 can help bring together all the relevant stakeholders to achieve this. Europe needs to increase investment at Union level to maintain European leadership and competence in manufacturing technologies and make the transition to high-value, knowledge-intensive goods, creating the conditions and assets for sustainable production and provision of lifetime service around a manufactured product. Resource intensive manufacturing and process industries need to further mobilise resources and knowledge at Union level and increase the investment in research, development and innovation to enable further progress towards a competitive low-carbon, resource-efficient and sustainable economy and to comply with the agreed Union-wide reductions in greenhouse gas emissions by 2050 for industrial sectors COM(2011)0112. . With strong Union policies, Europe would grow its existing industries and nurture the emerging industries of the future. The estimated value and impact of the sector of advanced manufacturing systems is significant, with an expected market size around EUR 150 billion by 2015 and compound annual growth rate of about 5 %. It is crucial to retain knowledge and competence in order to keep manufacturing and processing capacity in Europe. The emphasis of the research and innovation activities shall be on sustainable and safe manufacturing and processing, introducing the necessary technical innovation and customer-orientation to produce high knowledge content products and services with low material and energy consumption. Europe also needs to transfer these enabling technologies and knowledge to other productive sectors, such as construction, which is a major source of greenhouse gases with building activities accounting for around 40 % of all energy consumption in Europe, giving rise to 36 % of the CO_(2) emissions. The construction sector, generating 10 % of GDP and providing some 16 million jobs in Europe in 3 million enterprises, of which 95 % are SMEs, needs to adopt innovative materials and manufacturing approaches to mitigate its environmental impact. Promoting sustainable industrial growth by facilitating a strategic shift in Europe from cost-based manufacturing to an approach based on resource efficiency and the creation of high added value products and ICT-enabled intelligent and high performance manufacturing in an integrated system. Reducing energy consumption and CO_(2) emissions by the research, development and deployment of sustainable construction technologies and systems, addressing the whole value chain as well as reducing the overall environmental impact of buildings. Increasing the competitiveness of process industries, by drastically improving resource and energy efficiencies and reducing the environmental impact of such industrial activities through the whole value chain, promoting the adoption of low-carbon technologies, more sustainable industrial processes and, where applicable, the integration of renewable energy sources. Deriving concepts and methodologies for adaptive, knowledge-based business models in customised approaches, including alternative resource-productive approaches. The specific objective of space research and innovation is to foster a cost-effective competitive and innovative space industry (including SMEs) and research community to develop and exploit space infrastructure to meet future Union policy and societal needs. Strengthening the European public and private space sector by boosting space research and innovation is vital to maintain and safeguard Europe's capability to use space in support of Union policies, international strategic interests and competitiveness amongst established and emerging space faring nations. Action at Union level will be carried out in conjunction with space research activities of the Member States and the European Space Agency (ESA), aiming at building up complementarity amongst different actors. Space is an important, but frequently invisible enabler of diverse services and products crucial to modern day society, such as navigation and communication, as well as weather forecasts and geographic information derived from Earth observation by satellites. Policy formulation and implementation at European, national and regional level increasingly depend on space-derived information. The global space sector is rapidly growing and expanding into new regions (e.g. China, South America and Africa). European industry is at present a considerable exporter of first-class satellites for commercial and scientific purposes. Increasing global competition is challenging Europe's position in this area. Thus Europe has an interest in ensuring that its industry continues to thrive in this fiercely competitive market. In addition, data from European science satellites and probes have resulted in some of the most significant scientific breakthroughs in the last decades in Earth sciences, fundamental physics, astronomy and planetology. In addition, innovative space technologies, e.g. robotics, have contributed to the progress of knowledge and technology in Europe. With this unique capacity, the European space sector has a critical role to play in addressing the challenges identified by the Europe 2020 strategy. Research, technology development and innovation underpin capacities in space which are vital to European society. While the United States spends around 25 % of its space budget on R&D, the Union spends less than 10 %. Moreover, space research in the Union is addressed in the national programmes of Member States, ESA programmes and the Union Framework Programmes for research. To maintain Europe's technological and competitive edge and to capitalise on investments, Union level action, having regard to Article 4(3) and Article 189 TFEU, is needed in conjunction with the space research activities of the Member States and the ESA, which has managed industrial satellite development and deep space missions on an intergovernmental basis for the ESA Member States since 1975. Union level action is also needed to promote the participation of the best researchers from all Member States, and to lower the barriers for collaborative space research projects across national borders. In addition, the information provided by European satellites will offer an increasing potential for further development of innovative satellite-based downstream services. This is a typical activity sector for SMEs and should be supported by research and innovation measures in order to reap the full benefits of this opportunity, and especially of the considerable investments made on the two Union programmes Galileo and Copernicus. Space naturally transcends terrestrial boundaries, providing a unique vantage point of global dimension, thus giving rise to large-scale projects which are carried out in international co-operation. To play a significant role in such international space activities in the next decades, both a common European space policy and European level space research and innovation activities are indispensable. Space research and innovation under Horizon 2020 aligns with the Union space policy priorities and the needs of the European operational programmes as they continue to be defined by the Council and the Commission COM(2011)0152. . European Space infrastructure such as the Copernicus and Galileo programmes are a strategic investment, and the development of innovative downstream applications is necessary. To this end, the application of space technologies shall be supported through the respective specific objectives of the priority 'Societal challenges', where appropriate, with the aim of securing socio-economic benefits as well as return on investment and European leadership in downstream applications. This entails safeguarding and further developing a competitive, sustainable and entrepreneurial space industry in combination with a world-class space research community to maintain and strengthen European leadership and non-dependence in space systems to foster innovation in the space sector, and to enable space-based terrestrial innovation, for example by using remote sensing and navigation data. This aims at developing advanced and enabling space technologies and operational concepts from idea to demonstration in space. This includes technologies supporting access to space, technologies for the protection of space assets from threats such as debris and solar flares, as well as satellite telecommunication, navigation and remote sensing. The development and application of advanced space technologies requires the continuous education and training of highly skilled engineers and scientists as well as strong links between them and the users of space applications. A considerably increased exploitation of data from European satellites (scientific, public or commercial) can be achieved if further effort is made for the processing, archiving, validation, standardisation and sustainable availability of space data as well as for supporting the development of new information products and services resulting from those data, having regard to Article 189 TFEU, including innovations in data handling, dissemination and interoperability, in particular promotion of access to and exchange of Earth science data and metadata. These activities can also ensure a higher return on investment of space infrastructure and contribute to tackling societal challenges, in particular if coordinated in a global effort such as through the Global Earth Observation System of Systems (GEOSS), namely by fully exploiting the Copernicus programme as its main European contribution, the European satellite navigation programme Galileo or the Intergovernmental Panel on Climate Change (IPCC) for climate change issues. A fast introduction of these innovations into the relevant application and decision-making processes will be supported. This also includes the exploitation of data for further scientific investigation. Space undertakings have a fundamentally global character. This is particularly clear for activities such as Space Situational Awareness (SSA), and many space science and exploration projects. The development of cutting edge space technology is increasingly taking place within such international partnerships. Ensuring access to these constitutes an important success factor for European researchers and industry. The definition and implementation of long-term roadmaps and the coordination with international partners are essential to this objective. The specific objective is to help address market deficiencies in accessing risk finance for research and innovation. The investment situation in the R&I domain is dire, particularly for innovative SMEs and mid-caps with a high potential for growth. There are several major market gaps in the provision of finance, as the innovations required to achieve policy goals are proving too risky, typically, for the market to bear and therefore the wider benefits to society are not fully captured. A facility for debt ('Debt facility') and a facility for equity ('Equity facility') will help overcome such problems by improving the financing and risk profiles of the R&I activities concerned. This, in turn, will ease access by firms and other beneficiaries to loans, guarantees and other forms of risk finance; promote early-stage investment and the development of existing and new venture capital funds; improve knowledge transfer and the market in intellectual property; attract funds to the venture capital market; and, overall, help catalyse the passage from the conception, development and demonstration of new products and services to their commercialisation. The overall effect will be to increase the willingness of the private sector to invest in R&I and hence contribute to reaching a key Europe 2020 target: 3 % of Union GDP invested in R&D by the end of the decade with two-thirds contributed by the private sector. The use of financial instruments will also help achieve the R&I objectives of all sectors and policy areas crucial for tackling the societal challenges, for enhancing competitiveness, and for supporting sustainable, inclusive growth and the provision of environmental and other public goods. A Union-level Debt facility for R&I is needed to increase the likelihood that loans and guarantees are made and R&I policy objectives achieved. The current gap in the market between the demand for and supply of loans and guarantees for risky R&I investments, addressed by the current Risk-Sharing Finance Facility (RSFF), is likely to persist, with commercial banks remaining largely absent from higher-risk lending. Demand for RSFF loan finance has been high since the launch of the facility in mid-2007: in its first phase (2007-2010), its take-up exceeded initial expectations by more than 50 % in terms of active loan approvals (EUR 7,6 billion versus a forecast EUR 5 billion). Furthermore, banks typically lack the ability to value knowledge assets, such as intellectual property, and therefore are often unwilling to invest in knowledge-based companies. The consequence is that many established innovative companies – both large and small – cannot obtain loans for higher-risk R&I activities. In the design and implementation of its facilit(y)(ies), which will be carried out in partnership with one or several entrusted entities in compliance with Regulation (EU, Euratom) No 966/2012, the Commission will ensure that appropriate levels and forms of technological and financial risks will be taken into account, in order to meet the identified needs. These market gaps stem, at root, from uncertainties, information asymmetries and the high costs of attempting to address these issues: recently established firms have too short a track record to satisfy potential lenders, even established firms often cannot provide enough information, and at the start of an R&I investment it is not at all certain whether the efforts undertaken will actually result in a successful innovation. Additionally, enterprises at the concept development stage or working in emerging areas typically lack sufficient collateral. Another disincentive is that even if R&I activities give rise to a commercial product or process, it is not at all certain that the company that has made the effort will be able to exclusively appropriate the benefits deriving from it. In terms of Union added value, the Debt facility will help remedy market deficiencies that prevent the private sector from investing in R&I at an optimum level. Its implementation will enable the pooling of a critical mass of resources from the Union budget and, on a risk-sharing basis, from the financial institution(s) entrusted with its implementation. It will stimulate firms to invest more of their own money in R&I than they would otherwise have done. In addition, the Debt facility will help organisations, both public and private, to reduce the risks of undertaking the pre-commercial procurement or procurement of innovative products and services. A Union-level Equity facility for R&I is needed to help improve the availability of equity finance for early and growth-stage investments and to boost the development of the Union venture capital market. During the technology transfer and start-up phase, new companies face a 'valley of death' where public research grants stop and it is not possible to attract private finance. Public support aiming to leverage private seed and start-up funds to fill this gap is currently too fragmented and intermittent, or its management lacks the necessary expertise. Furthermore, most venture capital funds in Europe are too small to support the continued growth of innovative companies and do not have the critical mass to specialise and operate transnationally. The consequences are serious. Before the financial crisis, the amount invested in SMEs by European venture capital funds was about EUR 7 billion a year, while figures for 2009 and 2010 were within the EUR 3-4 billion range. Reduced funding for venture capital has affected the number of start-ups targeted by venture capital funds: in 2007, some 3000 SMEs received venture capital funding, compared to only around 2500 in 2010. In terms of Union added value, the Equity facility for R&I will complement national and regional schemes that cannot cater for cross-border investments in R&I. The early-stage deals will also have a demonstration effect that can benefit public and private investors across Europe. For the growth phase, only at European level is it possible to achieve the necessary scale and the strong participation of private investors that are essential to the functioning of a self-sustaining venture capital market. The Debt and Equity facilities, supported by a set of accompanying measures, will support the achievement of Horizon 2020 policy objectives. To this end, they will be dedicated to consolidating and raising the quality of Europe's science base; promoting research and innovation with a business-driven agenda; and addressing societal challenges, with a focus on activities such as piloting, demonstration, test-beds and market uptake. Specific support actions such as information and coaching activities for SMEs should be provided. Regional authorities, SMEs associations, chambers of commerce and relevant financial intermediaries may be consulted, where appropriate, in relation to the programming and implementation of these activities. In addition, they will help tackle the R&I objectives of other programmes and policy areas, such as the Common Agricultural Policy, climate action (transition to a low-carbon economy and adaptation to climate change), and the Common Fisheries Policy. Complementarities with national and regional financial instruments will be developed in the context of the Common Strategic Framework for Cohesion Policy 2014-2020, where an increased role for financial instruments is foreseen. The design of the Debt and Equity facilities takes account of the need to address the specific market deficiencies, and the characteristics (such as degree of dynamism and rate of company creation) and financing requirements of these and other areas without creating market distortions. The use of financial instruments must have a clear European added value and should provide leverage and function as a complement to national instruments. Budgetary allocations between the instruments may be adapted during the course of Horizon 2020 in response to changing economic conditions. The Equity facility and the SME window of the Debt facility will be implemented as part of two Union financial instruments that provide equity and debt to support SMEs' R&I and growth, in conjunction with the equity and debt facilities under COSME. Complementarity between Horizon 2020 and COSME will be ensured. The goal is to improve access to debt financing – loans, guarantees, counter-guarantees and other forms of debt and risk finance – for public and private entities and public-private partnerships engaged in research and innovation activities requiring risky investments in order to come to fruition. The focus shall be on supporting research and innovation with a high potential for excellence. Given that one of the objectives of Horizon 2020 is to contribute to narrowing the gap between R&D and innovation, helping to bring new or improved products and services to the market, and taking into account the critical role that the proof-of-concept stage plays in the knowledge transfer process, mechanisms may be introduced enabling financing for the proof-of-concept stages that are necessary in order to validate the importance, relevance and future innovatory impact of the research results or invention involved in the transfer. The target final beneficiaries shall potentially be legal entities of all sizes that can borrow and repay money and, in particular, SMEs with the potential to carry out innovation and grow rapidly; mid-caps and large firms; universities and research institutions; research infrastructures and innovation infrastructures; public-private partnerships; and special-purpose vehicles or projects. The funding of the Debt facility shall have two main components: Demand-driven, providing loans and guarantees on a first-come, first-served basis, with specific support for beneficiaries such as SMEs and mid-caps. This component shall respond to the steady and continuing growth seen in the volume of RSFF lending, which is demand-led. Under the SME window, activities shall be supported that aim to improve access to finance for SMEs and other entities that are R&D- and/or innovation-driven. This could include support at phase 3 of the SME instrument, subject to the level of demand. Targeted, focusing on policies and key sectors crucial for tackling societal challenges, enhancing industrial leadership and competitiveness, supporting sustainable, low-carbon, inclusive growth, and providing environmental and other public goods. This component shall help the Union address research and innovation aspects of sectoral policy objectives. The goal is to contribute to overcoming the deficiencies of the European venture capital market and provide equity and quasi-equity to cover the development and financing needs of innovating enterprises from the seed stage through to growth and expansion. The focus shall be on supporting the objectives of Horizon 2020 and related policies. The target final beneficiaries shall be potentially enterprises of all sizes undertaking or embarking on innovation activities, with a particular focus on innovative SMEs and mid-caps. The Equity facility will focus on early-stage venture capital funds and funds-of-funds providing venture capital and quasi-equity (including mezzanine capital) to individual portfolio enterprises. The facility will also have the possibility to make expansion and growth-stage investments in conjunction with the Equity Facility for Growth under COSME, to ensure a continuum of support during the start-up and development of companies. The Equity facility, which will be primarily demand-driven, shall use a portfolio approach, where venture capital funds and other comparable intermediaries select the firms to be invested in. Earmarking may be applied to help achieve particular policy goals, building on the positive experience in the Competitiveness and Innovation Framework Programme (2007 to 2013) with earmarking for eco-innovation, for example for achieving goals related to the identified societal challenges. The start-up window, supporting the seed and early stages, shall enable equity investments in, amongst others, knowledge-transfer organisations and similar bodies through support to technology transfer (including the transfer of research results and inventions stemming from the sphere of public research to the productive sector, for example through proof-of-concept), seed capital funds, cross-border seed and early-stage funds, business angel co-investment vehicles, intellectual property assets, platforms for the exchange and trading of intellectual property rights, and early-stage venture capital funds and funds-of-funds operating across borders and investing in venture capital funds. This could include support at phase 3 of the SME instrument, subject to the level of demand. The growth window shall make expansion and growth-stage investments in conjunction with the Equity Facility for Growth under COSME, including investments in private and public sector funds-of-funds operating across borders and investing in venture capital funds, most of which will have a thematic focus that supports the goals of the Europe 2020 strategy. The specific objective is to stimulate sustainable economic growth by means of increasing the levels of innovation in SMEs, covering their different innovation needs over the whole innovation cycle for all types of innovation, thereby creating more fast-growing, internationally active SMEs. Considering the central role of SMEs in Europe's economy, research and innovation in SMEs will play a crucial role in increasing competitiveness, boosting economic growth and job creation and thus in achieving the objectives of the Europe 2020 strategy and notably its flagship initiative 'Innovation Union'. However, SMEs have – despite their important economic and employment share and significant innovation potential – several types of problems to become more innovative and more competitive, including shortage of financial resources and access to finance, shortage in skills in innovation management, weaknesses in networking and cooperation with external parties, and insufficient use of public procurement to foster innovation in SMEs. Although Europe produces a similar number of start-up companies to the United States, European SMEs are finding it much harder to grow into large companies than their US counterparts. The internationalised business environment with increasingly interlinked value chains puts further pressure on them. SMEs need to enhance their research and innovation capacity. They need to generate, take up and commercialise new knowledge and business ideas faster and to a greater extent to compete successfully on fast evolving global markets. The challenge is to stimulate more innovation in SMEs, thereby enhancing their competitiveness, sustainability and growth. The proposed actions aim to complement national and regional business innovation policies and programmes, to foster cooperation between SMEs, including transnational cooperation, clusters and other innovation-relevant actors in Europe, to bridge the gap between R&D and successful market uptake, to provide a more business innovation friendly environment, including demand-side measures and measures geared to boosting the transfer of knowledge, and to support taking into account the changing nature of innovation processes, new technologies, markets and business models. Strong links with industry-specific Union policies, notably COSME and the Cohesion Policy Funds, will be established to ensure synergies and a coherent approach. SMEs are key drivers of innovation due to their ability to quickly and efficiently transform new ideas in successful businesses. They serve as important conduits of knowledge spill-over bringing research results to the market. SMEs have a key role to play in technology and knowledge transfer processes, contributing to the market transfer of innovations stemming from the research carried out in universities, research bodies and research performing companies. The last twenty years have shown that entire sectors have been renewed and new industries created driven by innovative SMEs. Fast growing enterprises are crucial for the development of emerging industries and for the acceleration of the structural changes that Europe needs to become a knowledge-based and sustainable economy with sustained growth and high quality jobs. SMEs can be found in all sectors of the economy. They form a more important part of the European economy than of other regions such as the United States. All types of SMEs can innovate. They need to be encouraged and supported to invest in research and innovation and to enhance their capacity to manage innovation processes. In doing so they should be able to draw on the full innovative potential of the internal market and the ERA so as to create new business opportunities in Europe and beyond and to contribute to find solutions to key societal challenges. Participation in Union research and innovation strengthens the R&D and technology capability of SMEs, increases their capacity to generate, absorb and use new knowledge, enhances the economic exploitation of new solutions, boosts innovation in products, services and business models, promotes business activities in larger markets and internationalises the knowledge networks of SMEs. SMEs that have a good innovation management in place, thereby often relying on external expertise and skills, outperform others. Cross-border collaborations are an important element in the innovation strategy of SMEs to overcome some of their size-related problems, such as access to technological and scientific competences and new markets. They contribute to turn ideas into profit and company growth and in return to increase private investment in research and innovation. Regional and national programmes for research and innovation, often backed by European cohesion policy, play an essential role in promoting SMEs. In particular, Cohesion Policy Funds have a key role to play through building capacity and providing a stairway to excellence for SMEs in order to develop excellent projects that may compete for funding under Horizon 2020. Nevertheless, only a few national and regional programmes provide funding for transnational research and innovation activities carried out by SMEs, the Union-wide diffusion and uptake of innovative solutions or cross-border innovation support services. The challenge is to provide SMEs with thematically open support to realise international projects in line with companies' innovation strategies. Actions at Union level are therefore necessary to complement activities undertaken at national and regional level, to enhance their impact and to open up the research and innovation support systems. SMEs shall be supported across Horizon 2020. For this purpose, to participate in Horizon 2020, better conditions for SMEs shall be established. In addition, a dedicated SME instrument shall provide staged and seamless support covering the whole innovation cycle. The SME instrument shall be targeted at all types of innovative SMEs showing a strong ambition to develop, grow and internationalise. It shall be provided for all types of innovation, including service, non-technological and social innovations, given each activity has a clear European added value. The aim is to develop and capitalise on the innovation potential of SMEs by filling the gap in funding for early stage high-risk research and innovation, stimulating innovations and increasing private-sector commercialisation of research results. The instrument will operate under a single centralised management system, light administrative regime and a single entry point. It shall be implemented primarily in a bottom-up manner through a continuously open call. All of the specific objectives of the priority 'Societal challenges', and the specific objective 'Leadership in enabling and industrial technologies' will apply the dedicated SME instrument and allocate an amount for this. The goal is to promote transnational market-oriented innovation of R&D performing SMEs. A specific action shall target research-intensive SMEs in any sectors that show the capability to commercially exploit the project results. This action will be built on the Eurostars Programme. Transnational activities assisting the implementation of and complementing the SME specific measures across Horizon 2020 shall be supported, notably to enhance the innovation capacity of SMEs. These activities shall be coordinated with similar national measures when appropriate. Close cooperation with the National Contact Point (NCP) Network and the Enterprise Europe Network (EEN) is envisaged. Transnational market-driven innovation to improve the framework conditions for innovation shall be supported, and the specific barriers preventing, in particular, the growth of innovative SMEs shall be tackled.

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Source: EUR-Lex (Cellar) · retrieved 2026-11-03 · Text as adopted (Official Journal); later amendments are not incorporated in this text.