Legal base	—
Document originated	13 March 2009
Deposited in Parliament	23 March 2009
Department	Innovation, Universities and Skills
Basis of consideration	EM of 15 April 2009
Previous Committee Report	None
To be discussed in Council	No date set
Committee's assessment	Politically important
Committee's decision	Cleared

Background

11.1 Title XVIII of the EC Treaty (Articles 163 to 173) sets out the Community's objectives for research and technological development (R&D) and the means to achieve them. In particular, Article 163(1) EC sets the Community the objective of strengthening the scientific and technological bases of EC industry and encouraging it to become more competitive internationally. Article 165 requires the Community and Member States to coordinate their R&D activities and Article 166 requires the Council to adopt a framework programme for the Community's own R&D activities. The EC's 7^th Framework Programme spans the period 2007-13.

11.2 In addition, Article 157 EC requires the Community and Member States to ensure the existence of the necessary conditions for the competitiveness of industry by, for example, fostering the exploitation of the industrial potential of innovation and R&D.

The document

11.3 The Communication emphasises the importance of information and communication technologies (ICT) and sets out the Commission's proposals for a strategy to:

• establish the EC's world-leadership in ICT;
• make the EC a more attractive place for investment in ICT; and
• ensure that the EC obtains the economic and social benefits of ICT.

11.4 The second section of the Communication explains why the Commission believes that the EC needs a strategy. It suggests that:

• ICT can make an important contribution to the recovery from the current economic downturn;
• the EC has the opportunity to be a world leader in the development of the next generation of components and systems and the application of ICT to, for example, nanoelectronics, the diagnosis and treatment of disease, and the safety and security of buildings and transport;
• the EC does not invest enough in ICT — although ICT R&D accounts for a quarter of EC private sector expenditure on R&D and a fifth of all patents, the private sector in the USA spends twice as much;
• there are growing shortages of suitably qualified people to fill vacancies in the EC for highly skilled ICT staff;
• the public sector in the EC spends less than a tenth as much as the USA on pre-commercial procurement of ICT to modernise public services, leading to missed opportunities for EC businesses to identify and exploit new market opportunities for ICT products;
• there are barriers to the growth of SMEs in the EC (for example, excessive regulation);
• R&D in the EC is fragmented, with consequent duplication of effort and sub-optimal returns on investment in research; and
• the EC's arrangements for funding R&D need to be simpler and more flexible.

11.5 The third section of the Communication makes specific proposals for action by the Commission and Member States to increase investment in ICT R&D; reduce the fragmentation of R&D; improve collaboration between the Commission, Member States, businesses, universities and research bodies; and facilitate the emergence of new markets for ICT-based innovations.

11.6 For example, the Commission invites Member States to:

• increase their expenditure on ICT R&D by an amount which matches (proportionately) the planned increase in ICT expenditure from the EC's 7^th R&D Framework Programme (that is, from €1.1 billion in 2010 to €1.7 billion in 2013);
• make more and better use of public procurement of ICT products and services;
• provide financial and other support for innovative R&D in ICT by SMEs;
• strengthen the collaboration between Member States in planning, establishing and sharing infrastructures for ICT R&D (such as super-computers, large data-bases and high-speed networks); and
• improve the definition of the public sector's demand for ICT innovation and encourage closer collaboration between users and producers.

11.7 The Communication says that the Commission, for its part, will, for example:

• explore suitable subjects for new public-private partnerships in ICT innovation;
• facilitate access by businesses, and particularly SMEs, to venture capital and other sources of finance for ICT R&D;
• encourage and facilitate collaboration between Member States on the development, access to and use of ICT infrastructure;
• seek to improve the process for the standardisation of ICT and remove barriers to the development of markets for innovative ICT products and services;
• support projects for innovative ICT contributions to, for example, healthcare and energy efficiency; and
• seek global partnerships in ITC R&D.

11.8 Finally, the Communication invites Member States to endorse the Commission's proposals.

The Government's view

11.9 In his Explanatory Memorandum of 15 April 2009, the Minister of State for Science and Innovation at the Department for Business, Enterprise and Regulatory Reform (Lord Drayson) tells us that the Government endorses the Communication's views about the importance of ICT to both the UK and EC. The Government broadly supports the Commission's proposals. For example, it welcomes the Commission's emphasis on the use of public procurement to stimulate innovation. The Explanatory Memorandum provides an extensive description of the developments in the UK which are in line with the Commission's proposals. Finally, the Minister tells us that the Council is expected to reach Conclusions on the Communication later this year.

Conclusion

11.10 We draw the Commission's Communication to the attention of the House because of the importance of ICT to employment, economic growth, competitiveness and innovation. We are grateful to the Minister for his clear and helpful Explanatory Memorandum. There are no questions that we need put to him and we are content to clear the Communication from scrutiny.