II 18 GUÍA PARA EL REGISTRO INTERNACIONAL DE DIBUJOS Y MODELOS INDUSTRIALES

The policy win-wins potentially achievable through ETV are a leading benefit of the scheme and as such are further explored in this section, focussing on the Europe 2020 Strategy.

The Europe 2020 Strategy includes the following targets15 of particular relevance to ETV:

• 75% of the population aged 20-64 should be employed; • 3% of the EU’s GDP should be invested in R&D; and • The “20/20/20” climate/energy targets16 _{should be met.}

The increasing development and uptake of environmental technologies facilitated by ETV should not only generate employment and investment in environmental technologies, but also produce energy and material savings in many cases, thus achieving reductions in energy and fuel consumption, in addition to associated cuts in greenhouse gas (GHG) emissions. The EU has introduced a series of implementation initiatives to catalyse progress towards the Europe 2020 targets. Three leading themes are:

• “Innovation Union” to improve framework conditions and access to finance for research and innovation so as to ensure that innovative ideas can be turned into products and services that create growth and jobs;

• “Resource efficient Europe” to help decouple economic growth from the use or resources, support the shift towards a low carbon economy, increase the use

13 _{EU JRC (2007): ‘Environmental Technologies Verification Systems’, JRC Scientific and Technical Reports, available}

at : http://ftp.jrc.es/EURdoc/eur22933en.pdf

14 _{See footnote 9}

15 _{COM(2010)2020: Europe 2020 – A strategy for smart, sustainable and inclusive growth, Communication from the}

European Commission, Brussels, 3/3/2010

16 _{EC (2008): Communication from the Commission to the European Parliament, the Council, the European Economic}

and Social Committee and the Committee of the Regions: 2020 by 2020 Europe’s Climate Change Opportunity – COM(2008) 30 final, Brussels 23/01/08, available at:

of renewable energy sources, modernise our transport sector and promote energy efficiency, and

• “An industrial policy for the global era” to improve the business environment, notably for SMEs, and to support the development of a strong and sustainable industrial base able to compete globally.

In each case, a role for ETV in promoting SMEs, encouraging innovation and increasing resource efficiency is clearly apparent.

2.5 Problem Definition

Eco-innovation begins with an initial new idea or innovation of existing technology. The innovator is defined as the entity which owns the intellectual and technical property rights to this technology. The innovator could be an individual inventor, an academic research organisation or a private company in this context. The first barrier faced by the innovator in taking this idea or development forward is to attract funding to enable the further development of this eco-innovation, including testing and the eventual production of a prototype product.

With the assistance of financial support provided by an investor, sourced either internally (from the same entity as the innovator) or externally (from entrepreneurs or public/private investors), the ‘developer’ undertakes the task of bringing the innovation to market. Investors are essentially attracted to this opportunity by the potential returns to be made from their investment, based on factors such as the expected market size for the innovation and its longer term profitability. The risk that the investor does not make their expected return, due to disappointing sales or the failure of the technology to make it into the market is also factored into the decision-making process when assessing the attractiveness of the investment.

In many cases, innovators may not get sufficient funding to develop their environmental technologies for very good reasons. In other cases, the failure to acquire financing can be due to incorrect information on the expected market potential, performance and future economic conditions associated with the technology and market. This can result in investors incorrectly evaluating the risks involved. Consequently, a market failure occurs as some potentially beneficial environmental technologies do not make it to market due to incorrect expectations. This is the first identified problem, supported by the 2007 Observatory survey17 _{findings of the}

Commission, in which the problem of accessing finance was identified as the leading barrier to innovation for SMEs.

The testing and development of the eco-innovations that remain is then conducted by the technology developers in an often continual iterative process (typically involving so- called alpha and beta prototype testing with end user companies) until a final technology emerges, ready for market. In some case, developers find it difficult to establish trials with end users, thus preventing the further development or these technologies. During this stage, some innovations may be found to be technically or economically infeasible due to technical test results, changing market conditions, or a lack of further funds needed to continue development and testing. Developers may therefore cease the development of these technologies as a rational response to new

17 _{European Commission 2007 Observatory survey, available at: http://ec.europa.eu/enterprise/policies/sme/fact-figures-}

information. However uncertainty and a lack of funding can still be a significant barrier to bring environmental technologies to market.

In placing the environmental technology on the market, a number of requirements may be required by the market or specific users before the technology is accepted or can be sold. These “barriers” include:

• Validation: customers and users of the technology, particularly for integrated solutions, often require that the technology is tested for performance, reliability and durability within a system of other technologies to ensure compatibility, efficiency and cost-effectiveness. Pilot and demonstration projects are often common place in such circumstances before the customer commits to a purchase. Giving potential customers the confidence in the technology to undertake validation is therefore important.

• Verification: where there is no opportunity for the customer to test the performance of the technology before making a purchase decision, they may have to rely on test data and the claims provided by the developer to make purchasing decisions. In such cases, the customer may require verification that the test results are credible, that the technology is fit for purpose and that it “does what it says on the tin”. Verification may also be used to complement the Validation stage (above) by ensuring that measurements taken from a demonstrated technology are repeatable in other contexts. This could potentially avoid the need to repeat the demonstration for different customers. Both approaches are important for gaining market acceptance and awareness of new technology, but equally can assist market entry as distributors become more confident in the technology.

• Certification: often required by the market to ensure that the technology complies with any health, safety, environmental or other such standards and legislation necessary for the environmental technology to be accepted by users or is permitted to be placed on the EU or third country market. In the absence of certification or standards in a particular sector, credible information on new technology can become ever more important for market entry and acceptance. While the above procedures may only need to be completed once per Member State or other leading market, the economic feasibility of the technology might require access to more than one market, in which case, multiple verification and certification procedures represent a significant barrier for developers and distributors. A lack of an internal market in Europe and recognition further afield for many new technologies is therefore another problem in addition to each of the “barriers” denoted above, preventing the bringing to market and uptake of environmental beneficial technologies. Figure 2-1, depicts the technology development process. An indication of the number of technologies reaching each stage is represented by the inverted triangle, showing that while many innovations begin the process, only a small proportion are expected to make it to market.

Figure 2-1: Schematic of the technology development process

Source: EPEC

With reference to Figure 2.1, the objective of the ETV is to ensure that beneficial environmental technologies do make it to market and are adopted by users. Importantly in this process, the ETV should not pick winners and losers in the market, but instead ensure that winners are identified by developers and investors early on in the process and users recognise the benefits of the technology to promote rapid uptake compared to the counterfactual (i.e. the level of technology take-up which would occur in the absence of ETV).