VZCZCXRO1370
RR RUEHHM RUEHLN RUEHMA RUEHPB
DE RUEHFR #7882/01 3551255
ZNR UUUUU ZZH
R 211255Z DEC 06
FM AMEMBASSY PARIS
TO RUEHC/SECSTATE WASHDC 3908
INFO RHEHAAA/WHITE HOUSE WASHDC
RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RUEAUSA/DEPT OF HHS WASHDC
RUCPDOC/USDOC WASHDC
RUEHZN/EST COLLECTIVE
RUEHMRE/AMCONSUL MARSEILLE 1474
RUEHSR/AMCONSUL STRASBOURG 0281

UNCLAS SECTION 01 OF 04 PARIS 007882 
 
SIPDIS 
 
SIPDIS 
 
WHITEHOUSE FOR OSTP 
HHS FOR INTERNATIONAL AND PASS TO NIH 
STATE PASS NSF AND NASA 
STATE FOR OES/PCI (EISENSTAT), STAS, EB, EUR/WE 
USDOC FOR NIST 
USEU FOR SMITHAM 
EMBASSIES FOR ESTH OFFICERS 
 
E.O. 12958: N/A 
TAGS: TSPL PGOV FR
SUBJECT: FRANCE'S NEW SCIENTIFIC/INNOVATION SYSTEM 
 
REF: 05 PARIS 7023 and previous 
 
PARIS 00007882  001.2 OF 004 
 
 
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. 
 
---------- 
What was... 
---------- 
 
¶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. 
 
 
---------------------- 
From labs to streets... 
---------------------- 
 
¶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. 
 
------------ 
Bold steps... 
------------ 
 
¶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. 
 
------------------- 
'Pact for Research' 
------------------- 
 
¶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 
 
PARIS 00007882  002.2 OF 004 
 
 
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.' 
 
-------------------- 
New tools/structures 
-------------------- 
 
¶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. 
 
------------------------------------- 
High Council for Science & Technology 
------------------------------------- 
 
¶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. 
 
------------------------ 
National Research Agency 
------------------------ 
 
¶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. 
 
---------------------------- 
Inchoate Evaluation Agency... 
---------------------------- 
 
¶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. 
 
------------------------------------------ 
Coordinating Research and Higher Education 
------------------------------------------ 
 
 
PARIS 00007882  003.2 OF 004 
 
 
¶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. 
 
--------------------------- 
 'Competitiveness Clusters' 
--------------------------- 
 
¶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. 
 
-------------------------------------- 
New Industrial Innovation Agency, too! 
-------------------------------------- 
 
¶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 
 
PARIS 00007882  004.2 OF 004 
 
 
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