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27.02.2015 | KPMG Law Insights

Transparency International warns universities against dependence

Dear Readers,

February is always a short month. Our newsletter adapts to this – at least in terms of the number of articles – for once. The reason is simple, but hopefully will convince you anyway: Not much happened in the month of February. The EU Commission has been reticent with news in the area of education and research, and there is nothing spectacular to report from the “Union framework front” either. But we still have a bit of “EU” for you: As part of the HORIZON 2020 funding program, there is further funding for top researchers who want to bring their innovations to market with the help of a financial injection from the EU.

We also do not want to withhold from you the fact that there has been a critical look at universities by the anti-corruption organization Transparency International. There are fears that the independence of universities will be jeopardized due to their – more or less close – relationships with business. So far so good, criticism can be made fruitful. But if e.g. contract research as a whole is placed under general suspicion because of the financial involvement of commercial enterprises, this is decidedly going too far. The German Rectors’ Conference thinks so, and so do we.

We wish you interesting reading!

Sincerely yours

Public Sector Team of KPMG Rechtsanwaltsgesellschaft mbH

Mathias Oberndörfer Dr. Anke Empting

Lawyer Attorney

On the occasion of the presentation of its latest university portal on February 17, 2015, the anti-corruption organization Transparency International (TI) warns of ever closer links between universities and companies in Germany.

hochschulwatch.de would list all collaborations between universities and industry. So far, more than 10,000 collaborations in the form of sponsorship agreements, endowed professorships, funded institutes or research contracts between universities and industry have been documented. A good 1.3 billion euros – about twice as much as 10 years ago – are currently flowing into universities each year as so-called third-party funds from industry. In Germany, there are also around 1,000 professorships financed by companies or private foundations.

 

Demands on industry and science

Against this background, the organization, on the occasion of the presentation of the new university portal, called on the states and universities to create “unambiguous and clear rules” for the acceptance of research contracts – especially in the medical and technical fields – and for the disclosure of externally funded projects. The Education and Science Union (GEW) has made a similar demand.

The German Rectors’ Conference was open to the warnings of TI and GEW. If, however, the financial commitment of business enterprises is placed under general suspicion, a meaningful cooperation is scandalized.

Research/Horizon2020: Innovations from the idea to market maturity

The European Commission’s funding program is run under the banner of the European Research Council (ERC) and is called “Proof of Concept Grants”. Back in 2011, the funding was established in the form of a so-called supplementary grant for grant recipients who already receive funding from the ERC or whose ERC funding has recently expired. The budget available for the three calls is EUR 18 million. The aim of the funding is to support innovation and lead it to market maturity.

The ERC is the first European organization dedicated to funding excellence in frontier research.

A total of 59 top researchers from across Europe will be given the opportunity to bring their inventions to market through the program. There are up to 150 per innovation. 000 EUR. The duration is up to 18 months per project.

Annual report of the Expert Commission on Research and Innovation (EFI) published

The annual balance sheet for 2014 is positive, but there are still points of criticism, particularly with regard to the existing copyright protection. Future research priorities should be in the areas of “digital media” and the possibilities of additive manufacturing.

The commission first discusses the lifting of the ban on cooperation in the higher education sector in 2014 and assesses this as a “great success”. This is because it would create new opportunities to drive the further development of the German science system.

The planned revision of the hitherto restrictive tax regulations for venture capital and the planned establishment of a fund for the growth financing of German start-ups with a volume of 500 million euros are also positive.

Finally, to ensure Germany’s innovative strength, funding for cutting-edge research would have to be kept at least constant in the continuation of the Excellence Initiative.

Main criticisms of the report

The EFI is less positive about the ratio of spending on internal research and development to gross domestic product. This had fallen arithmetically from 2.98 percent in 2012 to 2.85 percent in 2013. In order for Germany to catch up with the leading innovation nations in the long term, an R&D intensity of at least 3.5 percent of gross domestic product must be anchored for the year 2020.

Focus of expert opinion: Copyright in need of improvement

This is clearly not sufficiently innovation-oriented and does not take sufficient account of the growing economic importance of user-generated content. The expert commission criticizes that the existing regulations in copyright law are too complex and therefore a separate “piracy” is created.

After all, there are currently considerable barriers to free access to knowledge by students and scientists. These could be facilitated by the introduction of a “general science barrier” to digital access to research results in journals and other media.

Future innovation focus: additive manufacturing

EFI emphasizes the importance of the new technology of “additive manufacturing” (3D printing). Due to its versatility, this could displace existing technologies. Additive manufacturing could strengthen industrial production in Germany and limit the relocation of value creation and jobs to other countries. In some cases, even value-added processes could be anchored in Germany again.

Therefore, the Expert Commission recommends

  • the intensification of cross-disciplinary cooperation in research at universities and non-university research institutions as well as facilitation of transfer into practice;
  • greater exploration of the potential of additive manufacturing in the context of promoting “Industry 4.0” and embedding support measures in a stringent overall framework;
  • the prompt clarification of numerous legal issues that have so far remained unresolved in order to increase the legal certainty of innovation actors;
  • stronger incentivization by legislation and policy for a development of quality standards as well as for testing and certification activities in the field of AF designs, materials and products.

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Contact

Mathias Oberndörfer

Geschäftsführer
Mitglied des Vorstands Service Tax - KPMG AG Wirt­schafts­prüfungs­gesell­schaft

Theodor-Heuss-Straße 5
70174 Stuttgart

tel: +49 711 781923410
moberndoerfer@kpmg-law.com

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