EIB still getting to know R&D
During the first year of the EIB's (European Investment Bank) 'Innovation 2000 Initiative', (i2i) a scheme to give more support to projects that promote EU innovation, entrepreneurship and information technologies have received significant boosts, but the EIB is still familiarising itself with the R&D sector. In the first year, 26 projects worth over 2.5 billion euro have been approved. The programme has a budget of between 12 and 15 billion euro, and is assured extra funds from the EIB's annual surpluses, which in 1999 amounted to 500 million euro. Of the 26 approved projects, almost half are located in the EU's assisted areas, mainly in objective 1 regions in Spain, eastern Germany and Greece. Launching the initiative, the Bank's governors proposed to channel EIB financing into five areas: human capital formation, research and development, information and communications technology networks, diffusion of innovation and the development of SMEs and entrepreneurship. i2i implementation has, unsurprisingly, been more rapid in those areas in which the EIB is used to operating, for example in education, ICT and venture capital. The EIB had had limited experience in the R&D and media fields preceding the launch of the initiative and the identification of suitable projects has therefore been more demanding. 'But the necessary cooperation lines are now under way, market knowledge has been built up and a strong and balanced pipeline of projects worth loans of about four to five billion euro is coming on stream,' states the EIB's Innovation 2000 Initiative progress report. In the field of human capital and education, the initiative has contributed to the eEurope action plan and to eLearning. The EIB's involvement focuses on the modernisation of schools and moreover universities. Among the recently approved or signed projects are a modernisation programme for universities and technical colleges in the Valencia region and the Saarland, the university hospital of Leipzig, the Kapodistrian University of Athens and the Sodertorn university college in Sweden. SMEs and entrepreneurship have been assisted by the reform of the EIF (European investment fund), which cleared the way for a rationalisation of the EU's venture capital activity. Recent operations approved include the support of business angels, of incubators, several technology-oriented funds in the field of biotechnology, Internet convergence, and also for the first time in 'content industries'. Furthermore, two operations providing EIF guarantees to lending in the area of microcredit were launched in the framework of the EU-sponsored 'multiannual programme for SMEs'. This provides 350 million euro of venture capital or guarantee instruments managed by the EIF. The EIB is currently considering combining SME lending with risk-sharing mechanisms, in cooperation with the EIF and potentially also with the Commission, to offer wider finance options to intermediary banks involved in SME finance. As research and development is a relatively new field for EIB lending, the first year of the initiative was mainly devoted to the increase in the relevant sector expertise, the development of a marketing approach and the identification of cooperation potential within the Commission. Two projects, in the microchip and biomedical sectors have been approved and others are under consideration. The potential for cooperation, financial and more generally with research operations supported by the European Commission's Fifth and Sixth Framework programmes has been examined by the Bank and the Commission. The Bank has, in the last year, been involved in selecting promoters and projects that, in its view, contribute best to the development of modern information and communication technologies (ICTs). The bank uses innovation, competition and non-exclusion as a basis for project selection. Loans worth one billion euro have already been agreed for projects related to broadband transmission and access to the local loop, notably in Spain, Portugal, Italy and the UK. Diffusion of innovation often relates to one of the other core areas mentioned above. A particular role in the diffusion context is played by the European content industry and the EIB therefore launched a sub-programme, 'i2i-audiovisual' in December 2000. Carried out in cooperation with the Commission, this initiative aims to invest in the content industries and develop the sector, which currently remains largely fragmented at national level. The Bank recognises that developing the information society is equally important if not more so in the countries awaiting accession to the EU. 'It is an operational objective for the EIB (and EIF) to rapidly roll out all lending possibilities under i2i to the Accession Countries,' states the report. In 2001, the Bank and the Fund will identify suitable projects, assess them and bring them up to approval and signature state. 'These are ambitious objectives, but the Bank is gearing up to meet them,' pledges the report.