RDI Aid Reform: the Final Stretch

Date: 10/02/2017

Translated article of paperjam.lu by Jean-Michel Gaudron

On Thursday, the Committee on Economic Affairs closed its examination of Bill 6854 on the renewal of aid schemes for research, development and innovation. Nobody should oppose its vote in mid-March.

Members of Parliament in the Committee on the Economy, chaired by Franz Fayot (LSAP), examined Bill 6854 for the last time on Friday on the renewal of aid schemes for research, development and innovation. This included studying the second supplementary opinion delivered by the State Council at the end of January.

This bill, introduced in August 2015, aims to continue to encourage companies of all sizes to invest even more into the development of new services or products and in the improvement of production processes. It also aligns itself with a 2014 European Commission regulation defining certain categories of aid compatible with the internal market. It also follows the publication by the OECD in the spring of 2015, of the review of the national innovation system, which recommended, inter alia, increasing the selectivity of R & D & I subsidies granted to businesses, to support strategic collaborative projects of a larger scale.

Simplified plans

"The changes that this new law will bring are less important than those of the previous 2009 version, explained Marc Ferring, National Director & European Funding at Luxinnovation, to Paperjam.lu.

 "The main aim will be to simplify some of the different types of aid by grouping them under a single scheme."

This means that the aid granted to the areas of technical industrial property protection, innovation and innovation support services and the temporary secondment of highly qualified personnel are to be replaced by a single 'aid for innovation In favour of SMEs ".

The amended law of June 5, 2009, has nevertheless paid off. Between 2009 and 2014, some 290 million euros of state aid was granted for a total of 541 cases processed and an amount of induced RDI expenditure of nearly 820 million euros. For the year 2015 alone, the the Ministry of the Economy’s annual report indicates that 60 projects or programmes have been notified for an amount of expenditure of nearly 83,68 million euros and an amount of 29 million euros in aid granted.

Expanded competencies for Luxinnovation?

Another change introduced in the forthcoming law is the setting up of an aid scheme for research infrastructures. "The State would thus be able to finance up to 50% of the investments of a company that would acquire relatively expensive R & D equipment, provided that this company shares this infrastructure with others, active promotion, "says Ferring.

"The idea is above all to create an incentive effect so that a company envisages an additional investment that it would not necessarily have made without a subsidy."

Bill 6854 also provides for the modification of Luxinnovation's missions by opening the possibility of granting it the status of a financing agency. But this is only an option, which will still have to be the subject of a delegation agreement to be negotiated by the Ministry of the Economy and which will have to be validated by the The Council of State of Luxembourg.

An expected vote for mid-March

"At present, the dossiers have to be approved by the state aid committee, which brings together a large number of stakeholders, and provides an opinion before the ministries of finance and the economy jointly take the decision on whether or not the aid requested would be requested, "says Ferring.

"This status of a financing agency at Luxinnovation with a smaller committee could free up resources at the level of the Ministry of Economy and make the decision-making process mechanically more flexible and faster."

Questioned by Paperjam.lu, Franz Fayot said that the final report of the Committee on the Economy should be finalised in the course of next week, so that the text could possibly be put to a vote of the deputies at the next meeting on March, 14. 

Photo: According to Marc Ferring (Luxinnovation), the decision-making process could be more flexible and faster if Luxinnovation had the status of a financing agency.

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