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Life sciences and biotechnology

Life sciences and biotechnology

Outline of the Community (European Union) legislation about Life sciences and biotechnology

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Employment and social policy > European Strategy for Growth > Growth and jobs

Life sciences and biotechnology

Helping the European Union to harness the life sciences and biotechnology in many areas such as health care, agriculture, food, industrial uses and the environment in order to create a sustainable, knowledge-based economy. This is the aim of the various acts in this field adopted by the European Commission over the last few years. For Europe, life sciences and biotechnology represent both a challenge and a major potential to be harnessed. A potential which the Commission aims to develop by means of a European strategy. This document summarises the main aspects of that strategy (the basic idea, the challenges, the action planned, ethical aspects, etc).

Document or Iniciative

Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions of 23 January 2002: “Life sciences and biotechnology – A Strategy for Europe” [COM(2002) 27 final – Official Journal C 55 of 2.3.2002].

Summary

Biotechnology is a technique which, by means of genetic manipulation, produces biological molecules or transgenic organisms for industrial, agricultural, pharmaceutical or chemical applications, etc.

The life sciences raise important policy and social issues and have prompted wide public debate. A revolution is taking place in the biotechnology knowledge-base, opening the way to new applications in the areas of health care, agriculture, food production and environmental protection.

Major scientific and technological advances have been made in life sciences and biotechnology over the last few years. In response, in January 2002 the European Commission adopted a strategy for Europe to devise sustainable and responsible policies to deal with the following three major issues:

  • life sciences and biotechnology offer opportunities to address many of the world’s needs as regards health, ageing, food, the environment and sustainable development;
  • broad public support is essential, and ethical and social implications and concerns must be addressed;
  • the scientific and technological revolution is a global reality which creates new opportunities and challenges for all countries of the world.

The strategy is divided into two sections:

  • general policy outlines;
  • a thirty-point plan to flesh out these outlines and measures.

It reflects the importance which the European Council attaches to the life sciences. It proposes a comprehensive roadmap up to 2010 and puts the sector at the forefront of those frontier technologies which are helping the European Union to meet the Lisbon objectives.

The potential of life sciences and biotechnology

Life sciences and biotechnology are widely regarded as being among the most promising frontier technologies for the coming decades.

In the health care sector, biotechnology already permits safer and more ethical production of an increasing number of drugs and medical services. Stem cell research offers the prospect of replacement tissues and organs to treat degenerative diseases, Alzheimer’s disease and Parkinson’s disease, etc. It also opens up prospects for quality-of-life improvement through innovative medical applications.

In the agri-food sector, biotechnology has the potential to improve the quality of foodstuffs and animal feed to help prevent disease and reduce health risks. Plant genome research is a key area. In this context, the size of the world’s area under genetically modified crops (GMOs) has nearly doubled.

In the case of non-food uses for crops, biotechnology helps to improve the use of industrial raw materials for the energy transformation industry and the pharmaceutical industry. The modifications under development include alterations to carbohydrates, oils, fats, proteins and fibres. Similarly, biomass could provide alternative sources of energy, with both liquid and solid biofuels such as biodiesel and bioethanol.

From an environmental point of view, biotechnology offers new ways to protect and improve the environment, especially air, soil, water and waste. Research focuses on the development of cleaner industrial products and processes and on more sustainable agricultural practices.

In the context of the revised Lisbon strategy, the life sciences and biotechnology sector should have a role to play. As the latest progress report points out, over the coming decades it should:

  • strengthen Europe’s position on the world high-technology market;
  • become a leading area of science, industry and employment;
  • increase prosperity by creating higher-quality jobs;
  • contribute to the modernisation of European industry.

Harnessing the potential

The European strategy for the life sciences and biotechnology identifies the following strategic priorities:

  • launching a knowledge-based economy by means of greater investment in research and development and education and training;
  • translating that knowledge into concrete scientific and technological applications (new products, processes and services);
  • strengthening governance in terms of drafting and implementing policies and actions;
  • widening Europe’s international dimension;
  • promoting dialogue, coherence and cooperation as regards the implementation of current and future action.

Europe’s competitiveness should be enhanced through three main pillars for action:

  • Strengthening the resource base
    The objective is to place the emphasis on life science education (lifelong learning for scientists, general awareness of the public, etc.). The key to advances in biotechnology is access to detailed and up-to-date bioinformatics databases.
  • Networking Europe’s biotechnology communities
    There is a need to facilitate open access to knowledge, skills and best practice and to create a close community of the people and institutions involved in biotechnology.
  • A proactive role for public authorities
    The aim is to anticipate emerging issues and proactively adapt policies.

Biotechnology focuses on solving specific problems. The strategy pays special attention to building up the competitiveness of European industry by improving the potential to create small and medium-sized enterprises (SMEs) whose activity is based on research and the spirit of enterprise. These new industries, founded on scientific knowledge, are a source of industrial competitiveness, technological innovation, investment opportunities and job creation.

Ethical and social implications

The development and application of life sciences and biotechnology raise fundamental ethical questions such as the definition and the nature of human beings and the use and supervision of genetic information.

In addition, the life sciences and biotechnology have attracted much attention from the general public and prompted serious debate. The dialogue should be open, in-depth, well-informed and structured in order to provide better information and promote mutual understanding. It is therefore of key importance to promote information and dialogue to help the public and stakeholders to better understand and appreciate these complex issues and to develop methods and criteria for weighing the benefits against disadvantages or risks.

The public authorities, economic operators and the scientific community should strive to communicate the relevant facts and facilitate an understanding of the key questions in a context of international cooperation.

Steps to be taken: action plan

The objective of the action plan is to set up a coherent policy framework aimed at promoting the creation of conditions favourable to the development of biotechnology in Europe and to collaboration between the Member States and private individuals or organisations. There are four types of action:

  • action intended to support research, to establish a European intellectual property system, etc.;
  • action aimed at establishing dialogue on the ethical, legal and social implications;
  • action in the area of international cooperation, particularly with the developing countries;
  • action to pursue the development of a European biotechnology policy.

Progress reports and outlook

To take stock of the progress being made under this strategy at regular intervals, the Commission has adopted three progress reports since 2002. In these, the Commission reviews not just the progress made but also the hold-ups encountered in some areas. The three reports set out the results achieved in terms of policy development and implementation on the ground, and address new emerging issues. Where possible, they also look into the areas covered by the roadmap.

For the mid-term review of current strategy (at the European Council meeting in spring 2007), the European Commission has made an in-depth evaluation of the progress achieved since 2002 and looked at the overall role of life sciences and biotechnology in European society. These two initiatives are based in particular on:

  • public consultation;
  • an independent study carried out by the Joint Research Centre (JRC);
  • a report on the competitiveness of European industry and research in the field of biotechnology.

Background

The EU has a substantial research potential in the area of biotechnology. Society needs to reap the expected benefits in terms of growth and job creation. The Fifth (1998-2002) and Sixth (2002-2006) Framework Programmes provided researchers, businessmen, industrialists and financiers with the means. Life sciences and biotechnology are also a global reality and are vital for generating knowledge-based dynamic and innovative economies. The success of any knowledge-based economy also rests upon the generation, dissemination and application of new knowledge. However, European investment in research and development is lagging behind that of the United States. The Commission aims to restore European leadership in the life sciences and biotechnology. The Sixth Framework Programme for research (2002-2006) makes this area a priority, providing a solid platform for constructing a European research area in collaboration with the Member States.

Related Acts

Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions on the mid-term review of the Strategy on Life Sciences and Biotechnology [COM(2007) 175 final – Not published in the Official Journal].

In this document the Commission underlines the effectiveness of the life science and biotechnology strategy, which it intends to complete as scheduled (2011).

The main results highlighted for the period ended (2002-2006) are:

  • the regional integration of clusters;
  • inspiring national action plans;
  • the adoption of a new legal framework on GMOs.

By contrast, the results as regards promotion and development of innovation in biotechnology are less striking. In this sector, small and medium-sized enterprises (SMEs) are still suffering from the lack of a Community framework (patents), low investment levels and poor cooperation between the academic world and finance.

The Commission identifies five priority areas of action for the strategy:

  • promoting research and market development for life science and biotechnology applications;
  • fostering competitiveness, knowledge transfer and innovation from the science base to industry;
  • encouraging debate on the benefits and risks of life sciences and biotechnology;
  • improving implementation of the legislation and optimising its impact on competitiveness;
  • ensuring a sustainable contribution of modern biotechnology to agriculture.

The document also describes a number of modern life science and biotechnology applications, with information on their impact in areas such as industry, the economy, the environment and healthcare.

Report from the Commission to the European Parliament, the Council, the Committee of the Regions and the European Economic and Social Committee of 29 June 2005 “Life sciences and biotechnology – A strategy for Europe” Third progress report and future orientations [COM(2005) 286 final – Not published in the Official Journal].

Report from the Commission to the European Parliament, the Council and the European Economic and Social Committee of 7 April 2004 “Life sciences and biotechnology – A strategy for Europe” Second progress report and future orientations [COM(2004) 250 final – Not published in the Official Journal].

Communication from the Commission to the European Parliament, the Council and the European Economic and Social Committee of 5 March 2003 “Life sciences and biotechnology – A strategy for Europe” Progress report and future orientations [COM(2003) 96 final – Not published in the Official Journal].

Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions of 4 December 2001 “Science and Society – Action Plan” [COM(2001) 714 final – Not published in the Official Journal].

Communication from the Commission of 4 September 2001 “Towards a strategic vision of life sciences and biotechnology – Consultation document” [COM(2001) 454 final – Not published in the Official Journal].

Transfer of businesses

Transfer of businesses

Outline of the Community (European Union) legislation about Transfer of businesses

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Enterprise > Business environment

Transfer of businesses

Document or Iniciative

Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions of 14 March 2006 – Implementing the Lisbon Community Programme for Growth and Jobs – Transfer of Businesses – Continuity through a new beginning [COM (2006) 117 final – Not published in the Official Journal].

Summary

When a business owner retires, his business all too often comes to an end. Owing to legal, fiscal and psychological difficulties, many transfers of thriving businesses fail. It is not easy to find a successor, especially as businesses are now generally transferred to third parties rather than to a family member. Furthermore, most Europeans prefer to be employed, and entrepreneurs are more interested in creating than in taking over a business.

Yet taking on an existing business offers many advantages (an established production structure, a client network, know-how, business reputation, etc.). A successful business transfer also benefits European growth and, consequently, plays a crucial role in the Lisbon Strategy. For instance, existing businesses provide five jobs on average for every two provided by a new business.

The transfer of businesses is a practice which will gain ground over the next decade, with one third of business owners in the EU retiring over the next ten years. It is estimated that 690 000 small and medium-sized enterprises (SME) and 2.8 million jobs will be affected each year. It is therefore essential to create suitable conditions for transfers of businesses.

In order to do this, the Commission is proposing a number of improvements to the Member States, including:

  • More sustained political attention to transfers

The Member States should systematically promote the transfer of businesses as an alternative to business creation. They should, for instance, consider introducing support measures for transfers similar to those available for business creation.

  • Awareness-raising among stakeholders

At present, insufficient effort is made to raise awareness. Only half of the Member States have taken relevant action. Like retiring business owners, potential new entrepreneurs should receive special attention because taking over an existing business often offers an interesting alternative to creating one. The Commission therefore recommends more action to raise awareness among business owners, for example through chambers of commerce and other points of contact such as tax advisers, accountants or banks, of the need to plan transfers sufficiently in advance. The Commission also calls on the Member States to encourage mentoring systems with a view to assisting business owners at the time of transfer. Lastly, the Member States should envisage direct approaches to raising awareness among business owners, such as sending letters to business owners over a given age.

  • Making it easier to change the legal status of a business

Succession contracts, partnership agreements, the establishment of limited liability companies and restructuring are all legal tools which can be used to prevent business closure. For example, the succession contract, which is prohibited in many countries, the partnership agreement or the establishment of limited liability companies make it possible to ensure business continuity in the event of the owner’s or an associate’s death. When changing legal status, a business about to be transferred can undergo legal restructuring in order to avoid liquidation.

  • Improved financing of transfers

The financial environment is rarely favourable for transfers of businesses. Indeed, transferring a business leads to a number of difficulties. First, it requires more capital than business creation, but the financial facilities designed for creating businesses often prove insufficient for transfers. Secondly, banks often consider financing transfers to be too costly and too risky, particularly for small businesses. Lastly, it is sometimes difficult to find a financial solution on time, as such a solution often takes the form of a combination of equity and loan. The Commission therefore recommends that the Member States provide suitable financial conditions such as start-up aid, loans and guarantees. Guarantees for equity in SMEs should include investments of local or regional funds to supply the initial and/or start-up capital, and mezzanine financing (a combination of equity and debt capital).

  • Tax incentives for business transfers

Although transfers within families have been made easier in many countries, transfers to third parties must receive greater encouragement through exemptions from tax on income generated by the sale of a business, specific tax relief on income reinvested in another business or used to finance the retirement of the business owner, or tax exemptions for employees investing in their own business.

  • Transparent markets for business transfers

The provision of impartial services to act as mediators between potential buyers and sellers should make it possible to organise transparent markets for business transfers. In some countries, the chambers of commerce take on this responsibility.

In order to implement all of these recommendations, a support infrastructure needs to be created to reach the hundreds of thousands of businesses which will be affected by a transfer over the next few years. This implementation infrastructure will make use of the Member States, their national, regional and local administrations, and business support organisations. It will involve in particular the dissemination of information to those providing support, the training of trainers and the development of teaching material.

Background

In 1994, the Commission published a Recommendation on the transfer of SMEs. This notice assesses the implementation of the 1994 Recommendation.