Friday, October 29, 2010

RTOs Boost EU Annual Economic Growth By EUR 50 Billion

European Research and Technology Organisations (RTOs) contribute EUR 50 billion to the EU economy, according to a new study published on October 27. The report, put together by European research organization the Technopolis Group, reveals that in addition to boosting economic growth, RTOs help tackle key challenges facing Europe, such as the need to develop innovative renewable energy supplies. However, the study said the organisations remain poorly understood and warned that national governments are failing to fully exploit their potential. RTOs received 32% of the Sixth Framework Programme (FP6)'s funding, noted the report.

There are around 350 RTOs in Europe, including the Fraunhofer Gesellschaft in Germany, the CEA (France's Alternative Energies and Atomic Energy Commission ), VTT (the Technical Research Centre of Finland), TNO (the Netherlands Organization for Applied Scientific Research), and SINTEF (the Foundation for Scientific and Industrial Research) in Norway.

These organisations resemble universities in many senses, but distinguish themselves by focussing on applied research, and exploiting any resulting knowledge in industrial innovation and development projects. They are generally funded via a mixture of public subsidies - that let them develop their capabilities - and industrial income, which allows them to exploit these capabilities for the benefit of industry.

The new report, published on behalf of the European Trade Association of the Research and Technology Organisations (EARTO), found that the combined annual turnover for European RTOs was around EUR 23 billion, noting that if they were a European multinational, this impressive figure would place them in the top 100 of the FT-500 Europe, the list of Europe's top 500 companies.

The study estimated the total annual economic impact of RTOs at between EUR 40 billion and EUR 50 billion, and said that the organisations benefited more than 100,000 customers annually, including national and regional governments, SMEs (small and medium-sized enterprises) and large companies. Moreover, the organisations are an important European employer with a combined workforce of more than 150,000 scientists, technicians and engineers.

EARTO President Professor Erkki Leppävuori said the study 'puts a necessary spotlight on the major contribution RTOs make to economic competitiveness and social progress in Europe. He added that 'it demonstrates that RTOs are essential actors in the European innovation system and give real value for money. We now look forward to the implementation of the study's key recommendations, which will further increase the major impact of RTOs on society and the economy'.

According to the report, RTOs play an essential role in building bridges between basic research and practical applications, and working with universities and the private sector to find practical solutions to key societal challenges from security of energy supply to resource scarcity or healthy ageing. RTOs have a strong track record of increasing the rate of innovation by industry by enabling companies to go beyond the limits of their internal technological capabilities. They significantly contribute to economic growth through more effective exploitation of research and the adaptation of existing and new technologies, added the report.

However, RTOs are largely undocumented and their role poorly understood, insisted the report. It said there was an urgent need to provide official statistics about the research and technology sector in Europe to highlight the important contribution RTOs make to the economy and society. The report also recommended that RTOs are used more frequently to encourage innovation in both the public and the private sectors and to tackle 'the grand challenges' such as climate change and an ageing population. Moreover, it urged RTOs to adopt a more international outlook to gain in strength through increased competition and cooperation.

The study was published at the 2010 EARTO Innovation Prize awards. The winner was the Fraunhofer Gesellschaft for its development of a highly efficient concentrator module for solar panels. EARTO said this was 'a good example of how RTOs can exploit and adapt research effectively for the benefit of society and the economy'.

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