Table of Contents:
Community framework for State aid for research and development
Outline of the Community (European Union) legislation about Community framework for State aid for research and development
Topics
These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.
Research and innovation > General framework
Community framework for State aid for research and development
Document or Iniciative
Communication from the Commission – Community framework for State aid for research and development [Official Journal C 323/1 of 30.12.2006].
Summary
The present Community framework contributes directly to the strategy for growth and jobs by:
- extending the field of R&D to that of innovation;
- stimulating research, development and innovation without distorting competition;
- encouraging new investment in very specific domains such as aid to young, innovative companies or innovation clusters.
This framework is applicable as of 1 January 2007.
Aims
The aim of this framework is two-fold and entails:
- helping Member States to devote a greater proportion of their total public aid budget to research, development and innovation;
- optimising allocation of aid within these three sectors, taking account of economic considerations.
This should increase available funding without hindering competition or trade, whilst enhancing the effectiveness of public spending.
State aid and RDI: weighing up the positive and negative effects
To determine whether or not State aid is compatible with the common market, the Commission has to weigh up the negative and positive effects.
State aid will be authorised where it:
- counters a failing in the market and meets an objective of common interest (growth, jobs, cohesion, environment, etc.);
- is correctly targeted and constitutes an appropriate tool;
- offers real added value (the net impact in terms of distortion of competition and effects on trade must be positive).
Market failings
The framework identifies the main market failings which could adversely affect research, development and innovation in relation to:
- dissemination of knowledge;
- coordination;
- networking;
- information.
To address these failings, a range of guidance has been issued for various types of State aid:
- aid for R&D projects;
- aid for technical feasibility studies;
- aid to cover SMEs’ costs relating to intellectual property rights;
- aid to young, innovative companies;
- aid in support of organisation and process innovation in the service industry;
- aid for recourse to innovation support and advisory services;
- aid to SMEs for temporary employment of highly qualified personnel;
- aid for innovation clusters *.
Control of State aid
This framework gives the Commission new means of improving the control of State aid.
To prevent major distortion, cases involving significant funding and consequently increased risks will be subject to extensive assessments.
Background
The prosperity of European concerns on a global scale requires them to be at the cutting edge of research, development and innovation, but at present these three areas are suffering a lack of investment. The most effective means of encouraging companies to invest is to promote healthy competition. Nevertheless, in some cases the market alone is unable to stimulate RDI sufficiently and recourse to State aid (although prohibited in principle by the EC Treaty) may be required. The purpose of the Community framework is to prevent the potentially disastrous consequences of excessive or ill-directed aid.
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Related Acts
Commission Communication
of 22 November 2006 to the Council, the European Parliament and the European Economic and Social Committee: “Towards a more effective use of tax incentives in favour of R&D” [COM(2006) 728 final – Not published in the Official Journal].
State Aid Action Plan
– Less and better targeted State aid: a roadmap for State aid reform 2005-2009 [Consultation document – not published in the Official Journal].