Audit casts shadow over bidding for EIT’s networks

The European Institute of Innovation and Technology, or EIT, in Budapest, Hungary, is reeling from a negative assessment by the European Court of Auditors, which says its basis of operation and experimental structure, comprising Knowledge and Innovation Communities, each involving several universities, to leverage extra funding beyond its core funding, is unrealistic.

It also warns that the institution has failed to plot a path towards achieving sustainability when European Union funding runs out.

It is the latest in a series of blows to beset the institution that was established in 2008 as a pet-project of former president of the European Commission, José Barroso, with the ambitious aim of following the blueprint of the Massachusetts Institute of Technology in the United States, notably in encouraging highly talented doctoral students to collaborate with industry.

The EIT was prioritised in Horizon 2020 with a €2.8 billion (US$3.2 billion) allocation. The EIT was going to embody the innovation programme of Horizon 2020, realising the ‘knowledge triangle’ of collaboration between universities, research organisations and businesses, notably in doctoral training.

The first blow to the EIT came in 2015, when a €350 million cut was enforced upon the programme, taken away to support the Juncker European Fund for Strategic Investments.

The second blow to EIT came in mid-April 2016 when the European Court of Auditors, having audited EIT, said: “EIT have management problems, ill-suited short-term grants and potential conflicts of interest”, recommending that the EIT’s funding model should be thoroughly revised.

And this is against a backdrop of the EIT headquarters in Budapest lurching from crisis to crisis, with five different directors in five years and many staff posts left unfilled, as reported by Research Europe.

Crucially, the auditors’ report stated that EIT’s claim to have leveraged four times its core funding through the Knowledge and Innovation Communities, or KICs, was “undemonstrated and implausible” and that the KICs are “unlikely to reach financial stability”.

“Our basic idea is that the rationale of the EIT is a great one, but that the way it is organised and the development of the KICs might be improved,” Alex Brenninkmeijer, a member of the European Court of Auditors, said at the launch of the audit.

The economic set-up of the KICs is a so-called ‘smart funding model’. The EIT funds KICs to a maximum of 25% of their total overall budget. The aim is that this is used to catalyse 75% of financial resources from a wide range of public and private partners: national or regional funding; EU (non-EIT) funding such as EU research and development funding or structural funds; private funding; and the participant's own resources.

The innovative approach to education is the core of the programme, according to Professor George Chryssolouris of the University of Patras in Greece, writing in the prospectus for this year’s KIC in manufacturing.

“KICs are nurturing Europe's main innovation asset: its high talent people. The EIT provides new career paths between higher education and the private sector, and innovative schemes for professional development. Entrepreneurship is a key component of the EIT KICs education programmes through which world-class researchers and students are equipped with the knowledge and attitudes to turn ideas into new business,” he said.

Responding to the audit report, the League of European Research Universities or LERU’s Chief Policy Officer Katrien Maes told University World News the EIT may deserve another chance. “Valid concerns have been raised, but if they are properly addressed, the EIT may head in a direction where it may finally deliver.

“Measures need to be taken – and we believe they are or will be – to avoid jeopardising the start of new KICs, while at the same time ensuring that the existing KICs which are starting to deliver are not curtailed.”

Maes stressed that LERU sees a reform of the EIT both as a necessity and as an opportunity to carve out a role for the EIT in the initiative of European Commissioner Carlos Moedas to set up a European Innovation Council.

She pointed out that the timing of the European Court of Auditors’ report was unfortunate, since its publication has already been superseded by the new 2015 EIT-KIC agreement, which tackles a number of the issues raised in the report.

Chairman of the EIT Board Peter Olesen, who combines his EIT duties with chairing the Danish Council for Strategic Research, said the EIT’s problems are already being addressed.

“We have procedures now that say this is behind us and I’m very sure by September we can convince the European Parliament this is the case.”

Negative consequences

The question now is whether this audit report will adversely affect the 2016 bidding for new KIC networks and the seven years’ funding that goes with it.

The EIT launched two new calls for proposals in January: ‘Food4Future – Sustainable supply chain from resources to consumers’ and ‘EIT Manufacturing – Added value manufacturing’.

While the five previous KIC bidding rounds in ICT, climate, sustainable energy, health and raw materials have been met by several competing consortia bidding – and the total amount requested for a seven-year project is up to €100 million – it looks like this year’s bidding will only be made by a handful of competing organisations.

The bidding process is logistically and legally complex, and requires a great deal of flexibility and enthusiasm from universities, research organisations and private industry, often in a great number of countries.

The EIT has published the 2016 evaluation criteria, where the evaluators are going to assess if the different projects are fulfilling questions like these:
  • • Is the novelty and added value of the strategic approach clearly demonstrated in the proposal?
  • • What is the unique selling point of the proposal on a global scale?
  • • Does the proposal build on already existing, excellent initiatives and engage the relevant target groups and stakeholders?
  • • Does the proposal demonstrate readiness to establish concrete synergies and complementarities with EU and other relevant global initiatives? Is a list of potential synergies provided in the proposal?
So far, in the run-up to the 14 July deadline, it looks like only one consortium in manufacturing is being built up, coordinated by Professor Chryssolouris of the Laboratory for Manufacturing Systems and Automation at the University of Patras in Greece.

It has secured partners from almost all EU member states with the concept of “the teaching factory” as a multiple “learning channel” communicating industrial practice to the classroom and “new knowledge to the factory”.

In the Food4Future consortium bidding, two large consortia are flagged on the web: Food Nexus led by Unilever in the Netherlands, and a Swiss-Austrian-German consortium coordinated by Nestlé with other industrial participants from DuPont, Buehler, BASF and several other food producing companies and the universities of Erlangen-Nuremberg, TU Berlin, Bayreuth, Bonn, Göttingen, Vienna and Hohenheim.

Food Nexus, which will be coordinated by Rob Hamar, research and development director of Unilever, is very active at present, building up co-location centres in France, Spain, Italy and the Benelux Union, and has the universities of Lund and Copenhagen as the Nordic co-location centre.

University World News asked Professor Jerzy Langer of the Polish Academy of Sciences and former deputy minister in the ministry of science and information society in Poland, if the EIT has lived up to its aspirations.

He said: “As a great proponent for the EIT from the outset – through the European Research Advisory Board, the Polish government – I observe its evolution with great concern and sadness.

“The EIT original model was to provide a powerful entrepreneurial boost to European higher education, following the American MIT example and with greatest focus on new member states. Unfortunately, it did not happen, but instead the EIT evolved into something of a networking behemoth.”