FRANCE'S NEW SCIENTIFIC/INNOVATION SYSTEM

UNCLAS SECTION 01 OF 04 PARIS 007882

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TAGS: TSPL PGOV FR
SUBJECT: FRANCE'S NEW SCIENTIFIC/INNOVATION SYSTEM

REF: 05 PARIS 7023 and previous

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NOT FOR INTERNET DISTRIBUTION.


1. Summary: In the past two years France has undertaken remarkable
reforms in its scientific/innovation system. These include the
creation of a High Council for Science and Technology, a National
Research Agency, and numerous 'competitiveness clusters,' among
other structures. The government has also boosted resources for
scientific research. At the applied end of these reforms, the GOF
has created and funded an Industrial Innovation Agency. While this
new structure is now in place, and is mostly welcomed by the French
research and business community, analysts assert the transformation
is on-going. More needs to be done to assure it makes change
permanent in France's traditional, government-driven, 'dirigiste'
scientific/innovation system. End Summary.

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What was...
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2. Traditionally, the lion's share of scientific research in France
has been done by government research/technical agencies staffed with
civil servants. The largest of these is the National Center for
Scientific Research (CNRS) with a budget of around 2.5 billion euros
and a staff of 26,000 researchers, engineers, and technical and
administrative staff. Similar agencies include INSERM, responsible
for biomedical research, France's Atomic Energy Commission (CEA),
and the National Center for Space Studies (CNES). There are a total
of more than thirty of these scientific/technical agencies in
France. Many have performed outstanding science and continue to do
so. Others have been criticized as containing overlapping missions;
non-homogeneous modes of management, funding, and evaluation; a
civil servant status for public researchers with limited incentives
or benefits; and a lack of strategic vision at the government level.
Moreover, the scattering of funding resources at the regional,
national, and EU levels made bidding for funding unnecessarily
complex. Realigning the roles of the university sector, including
the 'Grandes Ecoles,' and that of public research establishments,
like CNRS, in conducting research has also been a matter of concern.


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From labs to streets...
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3. In spring 2004, French researchers took to the streets to express
their grievances that the scientific sector was neither receiving
the attention, nor the funding, it deserved. In response to those
concerns and bearing in mind the Lisbon strategy, which calls for
three percent of an EU member's GDP be dedicated to R&D by 2010, the
GOF initiated major reforms. The government's idea was not only to
introduce new mechanisms, but also stimulate existing scientific
entities.

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Bold steps...
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4. Adopted in April 2006, the long-awaited Research and Innovation
Bill (RIB) - while not eliminating scientific/technical agencies -
aims to bring flexibility to France's overly centralized and
bureaucratic system, reinforcing science-industry relations, and
promoting greater strategic direction. The new system would
attempt to inculcate competition for government research funding and
embrace the university system. Private enterprise would benefit
from more flexible working arrangements with government scientists,
as well as by receiving R&D tax incentives themselves. The GOF
partly anticipated the RIB and began implementing the new structures
provided for in it in early 2006.

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'Pact for Research'
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5. The RIB adopted in April 2006 and the Pact for Research
announced by the Villepin government reinforce the GOF's ability to
direct national research policy both in terms of strategic

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orientations and evaluation. The pact notably aims at promoting:

-- A new approach to funding (based on scientific appeal of
projects);
-- Merit-based selection and increased competitiveness among
research teams;
-- An enhanced role of the private sector in research; including
cross fertilization between public and private research;
-- Greater focus on international attractiveness (university
sector);
-- New incentives to attract - or retain - junior researchers;
-- Financial incentives for 'young innovative companies.'

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New tools/structures
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6. The RIB ratifies the establishment of new structures and
mechanisms rolled out by the GOF in 2005 and early 2006. These new
structures were accompanied by an internal reorganization within the
Research and Higher Education Ministry where the research and
technology directorates merged into a single directorate for
research and innovation. The new directorate is responsible for
defining the Ministry's scientific policy. The merge was presented
as a means to eliminate artificial boundaries between basic and
applied research and to facilitate technology transfer.

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High Council for Science & Technology
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7. A High Council for Science and Technology, composed of 20
distinguished citizens (not necessarily scientists),was installed
by President Chirac in September 2006. Its purpose is to guide the
GOF in prioritizing national research. It also is designed to
ensure coherence with objectives within the so-called European
Research Area. Themes which the Council has already been tasked to
explore include: energy and the environment, and the crisis in
science as a vocation.

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National Research Agency
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8. The National Research Agency (NRA) aspires to embody
characteristics of the U.S. National Science Foundation. The law
creating it stipulates that a significant portion of its funding
will be allocated to GOF thematic priority projects. There is scope
for consideration of projects in 'non-priority' areas of research,
but they require justification. The NRA's 2006 budget amounted to
590 millions euros. The proposed 2007 budget is 40 percent above
that of 2006.

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Inchoate Evaluation Agency...
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9. The RIB law provides for systematic, unified, and transparent
evaluation of research conducted both in universities and public
agencies. The decree providing for the creation of a new National
Agency for the Evaluation of Research and Higher Education (NAERHE)
was finally signed in November 2006 despite resistance by elements
of the science community and the researchers' unions. The latter
wished to maintain the former system wherein each research
establishment evaluated its own research. The NAERHE will
reportedly be responsible for the evaluation of all public research,
including that of the NRA. One-third of the evaluation committee
members will come from the private research sector. Indirectly, the
NAERHE is expected to play a significant role in the allocation of
public funding to research agencies. According to GOF officials,
however, implementation of the new evaluation structure, which
constitutes a key element in the overhaul of the French research
system, will prove "difficult" before the elections.

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Coordinating Research and Higher Education
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10. The higher education sector in France includes 84 universities
in 153 geographical locations engaged in a variety of fields. There
are an additional 80 higher educational institutions, including
'Grandes Ecoles' (elite schools),with only some of them engaged
actively in 'research.' The GOF spends considerably more money (per
student) on the elite schools than on universities. (Student cost in
France per university year approximates 6700 euros.) Due to this
historic division of higher education in France, higher education
"poles" or clusters remain too small to be 'visible' at the
international level. (According to a recent evaluation of
universities worldwide, the highest-ranked French university came in
at 46th place.) The RIB encourages higher education and research
establishments to achieve critical size by pooling activities and
means to create strategic, geographical clusters.


11. Two types of cooperation are proposed: Research and Higher
Education Hubs (RHEH) and Advanced Research Thematic Foundations
(ARTF). The RHEH concept is a 'bottom up' one, providing
universities and public research establishments an opportunity to
gather around common research themes at a regional level. According
to recent reports, government universities plan to pool themselves
into nine RHEH's (in French 'Poles de Recherches et Renseignements
Superieurs') by middle 2007. ARTFs aim to bring together a critical
mass of high level researchers from the university, public agencies,
and private sector, to conduct projects of excellence in a specific
area and facilitate the emergence of internationally recognized
scientific centers.


12. ARTFs are reportedly well under way. Among the 13 foundations
which have been selected (October 2006),six ARTFs are deemed to be
internationally competitive: Lyon area/infectious diseases;
Strasbourg/chemistry; Toulouse/aeronautics; Montpellier/agronomic
research; Paris/neurosciences; Grenoble/micro- and nanotech. Some
6000 researchers are involved in the ARTF. The GOF has thus
managed, in less than six months after the passage of the
legislation, to implement one of the main structural features of the
new Pact for Research. The 13 ARTFs benefit from certain tax
exemptions and employment law exemptions to facilitate short-term
secondments between companies and research clusters and the hiring
of foreign researchers. Advice and assistance regarding access to
technology and market analysis is provided to ARTFs by the
government and ARTFs have been granted the status of foundations,
enabling them to raise extra funding.

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'Competitiveness Clusters'
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13. Competitiveness clusters are designed to spark growth of
industrial activities and jobs and to strengthen regional economic
vitality. The main players are enterprises, research entities, and
higher education institutions. One-third of the earmarked budget or
1.5 billion euros over the period 2005-2007 has already allocated to
implement the the competitiveness cluster system. Competitiveness
clusters are not only intended for emerging technologies but also
for more conventional fields, as well as more mature sectors (e.g.
automotive and aviation industries and health). After one year, 66
such clusters have been established in France. The top ("world
class") six poles are in the agro food sector, ICT, manufacturing,
transport biotech and energy. 40 percent of private sector
beneficiaries are reportedly SMEs. While initial evaluation of this
mechanism - notably by the OECD - appears positive, some analysts
caution against too much reliance on state-led initiatives and
deplore that the number of selected clusters might dilute the
"priming effect" of the limited amount of state subsidies.

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New Industrial Innovation Agency, too!
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14. The aim of the Industrial Innovation Agency (IIA),which was
established in August 2005, is the promotion and support of
innovative industrial programs. Its cumulative budget for the
2005-2007 period amounts to the not inconsiderable sum of two
billion euros for large scale industrial programs involving key
technologies. These funds are to be distributed in the form of
grants or reimbursable loans. Projects cover molecular imagery,
biomass exploitation, energy efficiency in buildings, a new light

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rail system, the French/German multimedia search engine Quaero, and
a mobile TV project. The Agency also has a mandate to provide
support to innovative SMEs.


15. Comment: While it is too soon to evaluate the importance and
benefits of new structures and tools, many consider the new
structures encourage financial commitments for research and relieve
administrative burden for scientists to access funding. Analysts
also note positively measures in favor of start-ups and young firms
and the effort towards the modernization of evaluation procedures.
But many structures and procedures continue to coexist with the
newer entities creating sometimes bewildering complexity. The
number of competition-based programs and the opacity of grant
decision mechanisms have been increased with sometimes disconcerting
impacts for researchers. Some critics note that despite the new
funding mechanisms, the GOF continues to fund blue-ribbon companies
rather than project proposals based on their merit. Nor did the
university sector receive a thoroughgoing shake-up as part of these
reforms: No real effort has been made to redefine the role and
responsibilities of universities in R&D strategy and the degree of
autonomy to be granted to university research.


16. However, considering the hyper-sensitivity of researchers'
unions and the French science community to change, a complete remake
of France's research system was always unlikely. French government
contacts are hopeful that the newly introduced structures are here
to stay; that the April elections in France will not create the
conditions for rollback of new structures provided for in the RIB.



17. Finally, the Science Section in the French Embassy in
Washington - supported by a variety of French science agencies - is
organizing a 'Franco-American Competitiveness Clusters' conference
in Toulouse, February 5-6, to permit representatives of French
clusters to meet U.S. counterparts. Expect to hear more about these
new French science and innovation structures in the future.

HOFMANN