Support for research organisations in particular

What is considered to be non-economic activities on the part of research organisations and research infrastructures?

In Section 20, the EFTA Surveillance Authority's guidelines on state aid for research and development and innovation provide information on what ESA and the European Commission consider to be non-economic activities on the part of research organisations and research infrastructures:

(a) primary activities of research organisations and research infrastructures, in particular:

(i) education for more and better skilled human resources. In line with case-law (33) and decisional practice of the Commission (34), and as explained in the Notice on the notion of State aid and the SGEI Communication (35), public education organised within the national educational system, predominantly or entirely funded by the State and supervised by the State is considered as a non-economic activity (36);

(ii) independent R&D for more knowledge and better understanding, including collaborative R&D where the research organisation or research infrastructure engages in effective collaboration (37);

(iii) wide dissemination of research results on a non-exclusive and non-discriminatory basis, for example through teaching, open-access databases, open publications or open software. 

(b) knowledge transfer activities, where they are conducted either by the research organisation or research infrastructure (including their departments or subsidiaries) or jointly with, or on behalf of other such entities, and where all profits from those activities are reinvested in the primary activities of the research organisation or research infrastructure. The non-economic nature of those activities is not prejudiced by contracting the provision of corresponding services to third parties by way of open tenders. 

What is a research and knowledge-dissemination organisation?

The state aid's definition of research and knowledge-dissemination organisations is: 

Research and knowledge-dissemination organisation’ means an entity (such as universities or research institutes, technology transfer agencies, innovation intermediaries, research-oriented physical or virtual collaborative entities), irrespective of its legal status (organised under public or private law) or way of financing, whose primary goal is to independently conduct fundamental research, industrial research or experimental devel opment or to widely disseminate the results of such activities by way of teaching, publication or knowledge transfer.

Where such entity also pursues economic activities the financing, the costs and the revenues of those economic activities must be accounted for separately. Undertakings that can exert a decisive influence upon such an entity, in the quality of, for example, shareholders or members, may not enjoy preferential access to the results generated by it.

What is er knowledge transfer?

"Knowledge transfer" definition in ESAs guidlines on state aid for research and develpoment and innovation:

"Knowledge transfer" means any process which has the aim of acquiring, collecting and sharing explicit and tacit knowledge, including skills and competence in both economic and non-economic activities such as research collaborations, consultancy, licensing, spin-off creation, publication and mobility of researchers and other personnel involved in those activities.

Besides scientific and technological knowledge, it includes other kinds of knowledge such as knowledge on the use of standards and regulations embedding them and on conditions of real-life operating environments and methods for organizational innovation, as well as management of knowledge related to identifying, acquiring, protecting, defending and exploiting intangible assets.   

The primary activities are regarded as non-economic activities

The primary activities of research organisations and research infrastructures, as described above, are thus regarded as non-economic activities. However, many research organisations and infrastructures are also engaged in economic activity. Section 22 of the EFTA Surveillance Authority's guidelines mentions contract research and leasing of equipment to undertakings, as well as providing services to undertakings as examples of this.

In order for us to be able to provide support for the non-economic activity of research organisations without the aid constituting state aid, the research organisations must have established a clear distinction between their non-economic and economic activities.

Three requirements from the ESA

The EFTA Surveillance Authority stipulates three requirements in this connection, all of which must be satisfied:

1. First, there must be a formal separation between the economic activities and the non-economic activities. This may be achieved by either organising the economic activities as a separate legal entity or by keeping separate accounts for the economic activities and the non-economic activities. This formal separation between economic and non-economic activities is a mechanism to verify that cross-subsidisation is not taking place. The factor determining whether a research organisation is in fact receiving state aid for its economic activities is whether the support awarded for its non-economic activities is in reality going to economic activities.
2. Second, there must be a system to ensure that the economic activities of the research organisation pay market price for all relevant inputs. The economic activities of the research organisation must cover all relevant variable costs and an appropriate contribution to fixed costs.
3. Third, there must be an adequate system of control enabling the Norwegian authorities to monitor that cross-subsidisation between the two types of activities is not taking place. Access to adequately separated and detailed accounts is a key component of such a control system.