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(1) Regulation (EC) No 294/2008 of the European Parliament and of the Council has been substantially amended . Since further amendments are to be made, that Regulation should be recast in the interests of clarity.

(2) The periodic independent evaluations of the European Institute of Innovation and Technology (EIT) and the experience in applying Regulation (EC) No 294/2008 demonstrate that substantial changes are necessary to further improve the EIT model and its underlying processes. Moreover, the interim evaluation and ex ante impact assessment of the EIT have identified a number of areas for improvement, inter alia the funding model of the Knowledge and Innovation Communities (KICs), the integration of the KICs in local innovation ecosystems, the openness and transparency of the KICs and monitoring by the EIT. This Regulation also offers the opportunity to address those aspects.

(3) Member States are primarily responsible for sustaining a strong European industrial, competitive and innovative base. However, the nature and scale of the innovation challenge also require action to be taken collaboratively at Union level.

(4) The EIT is established to complement existing Union and national policies and initiatives by fostering the integration of the knowledge triangle – higher education, research and innovation – across the Union.

(5) The EIT should contribute to reinforcing the innovation capacity of the Union and Member States in order to tackle major challenges faced by society, thereby contributing to sustainable Union economic development and competitiveness.

(6) The EIT, through the KICs, should aim to strengthen innovation ecosystems across the Union in an open and transparent manner. In order to achieve that objective, the EIT should facilitate and enhance networking, integration and cooperation and promote synergies between different innovation communities across Europe. The EIT also aims to deliver on the Union strategic priorities and contribute to the realisation of Union objectives and policies, including those referred to in the communications of the Commission of 11 December 2019 on the European Green Deal, of 27 May 2020 on the EU budget powering the recovery plan for Europe (Recovery Plan for Europe), of 19 February 2020 on a European strategy for data, of 10 March 2020 on an SME Strategy for a sustainable and digital Europe and of 10 March 2020 on a New Industrial Strategy for Europe, and those related to achieving the Union’s strategic autonomy, while retaining an open economy. Furthermore, the EIT should contribute to tackling global challenges, including the United Nations Sustainable Development Goals (SDGs) by following the principles of the 2030 Agenda for Sustainable Development (the ‘2030 Agenda’) and the Paris Agreement adopted under the United Nations Framework Convention on Climate Change (the ‘Paris Agreement’), and to achieving a net-zero greenhouse gas economy by 2050 at the latest. The transition will be possible only through a boost in research and innovation, which underscores the need to reinforce favourable conditions and investments in enhancing Europe’s knowledge base and research and innovation capacity, in particular in green, climate-friendly technologies and innovations.

(7) The EIT should enhance the openness of the KICs in order to strengthen collaborative links and create synergies between different innovation communities in Europe, thereby facilitating geographical diversity and the talent circulation.

(8) The priority fields and financial needs of the EIT for a period of seven years, covering the relevant multiannual financial framework (MFF), should be laid down in a Strategic Innovation Agenda (SIA). The SIA should be aligned with Horizon Europe – the Framework Programme for Research and Innovation (Horizon Europe), established by Regulation (EU) 2021/695 of the European Parliament and of the Council , including with regard to reporting, monitoring, evaluation and other requirements set out in that Regulation, and should take into account the strategic planning of Horizon Europe. The SIA should establish and foster synergies with other parts of Horizon Europe, other relevant Union programmes of the MFF and other relevant Union, national and regional initiatives, policies and instruments, in particular with those supporting research and innovation, education and skills development, sustainable and competitive industry, entrepreneurship and regional development. Given the importance of the SIA for Union innovation policy and the expected socio-economic impact on the Union, the SIA should be adopted by the European Parliament and by the Council on the basis of a Commission proposal. That Commission proposal should be based on a contribution provided by the EIT. That contribution should be made available to the European Parliament and to the Council.

(9) The crisis resulting from the outbreak of COVID-19 has caused major disruptions to Member States’ healthcare and economic systems. Overcoming the social, economic, environmental and technological impacts arising from the crisis will require the collaboration of Union institutions, bodies, offices and agencies. The EIT and the KICs should respond with flexibility to existing as well as new and unexpected challenges and priorities, and should be able to adopt measures and initiatives to provide appropriate support to their ecosystems. In particular, the EIT and the KICs should contribute to the innovation efforts that are needed to tackle the impact of the COVID-19 crisis, in accordance with the priorities of the European Green Deal, the Recovery Plan for Europe, the New Industrial Strategy for Europe and the SDGs, while ensuring synergy with other Union initiatives and partnerships.

(10) In accordance with Regulation (EU) 2021/695, the activities of the EIT should address strategic long-term challenges, in particular in trans- and inter-disciplinary areas including the development of innovative non-technological solutions as a necessary complement to technology focused innovation activities. In so doing, the EIT should promote regular dialogue with civil society, research organisations, innovation centres, small and medium sized-enterprises (SMEs), higher education institutions (HEIs) and representatives of industry.

(11) The EIT should, through the KICs, give priority to the transfer of its higher education, research and innovation and entrepreneurial activities to the business context and to their commercial application and support the innovation and entrepreneurial capacity of HEIs and the creation and development of innovative businesses, in complementarity with the European Innovation Council (EIC), as well as other relevant parts of Horizon Europe, and the InvestEU Programme established by Regulation (EU) 2021/523 of the European Parliament and of the Council .

(12) The EIT should operate through excellence-driven Institutionalised European Partnerships of HEIs, research organisations, companies, including SMEs and public companies, as well as local authorities, social enterprises, relevant not-for-profit organisations and other stakeholders. Given the innovative nature of certain enterprises in relation to the goods or services that they offer, their organisation or the production methods that they employ, the promotion of social entrepreneurship and a closer engagement of SMEs and social enterprises that ensures their active participation should be pursued. Those partnerships should aim to become financially sustainable by mobilising funds from other public and private sources and to attract and engage the widest possible range of relevant new partners. They should be selected and designated as KICs by the Governing Board, in accordance with the priority fields and timetable set out in the SIA, taking into account the priorities as set out in the Horizon Europe strategic planning, addressing emerging global and social challenges. They should be selected on the basis of a competitive, open, transparent and excellence-based process, in accordance with this Regulation and with the criteria for the selection of European Partnerships set out in Regulation (EU) 2021/695. The first such KIC, to be launched as soon as possible in 2022 or 2023, should relate to Cultural and Creative Sectors and Industries and the second such KIC, to be launched in 2026, should relate to the Water, Marine and Maritime Sectors and Ecosystems.

(13) Taking into account the specificity of the KICs, it is necessary to provide for special minimum conditions to form a KIC, derogating from the rules for the participation in and dissemination of Horizon Europe. Similarly, specific rules on ownership, access rights, exploitation and dissemination may be necessary for KIC added-value activities, where appropriate.

(14) The Governing Board should steer and monitor the activities of the EIT and be responsible for the selection, designation, financing, monitoring and evaluation of the activities of the KICs in accordance with Regulation (EU) 2021/695 and the SIA. When appointing the members of the Governing Board, the Commission should ensure a balanced representation of those with experience in the fields of higher education, research, innovation or business, as well as gender balance and geographical coverage, with excellence as a guiding principle.

(15) The EIT should organise continuous monitoring and periodic external evaluations of the output, results and impact of each KIC, including their progress towards financial sustainability, cost-efficiency and openness to new members. Those evaluations should include interim reviews covering the first three years of the partnership agreement and the three years following any extension, comprehensive assessments conducted before the end of the seventh year of the partnership agreement, and final reviews conducted before the end of the partnership agreement. The Governing Board should take corrective measures in respect of the KICs when appropriate.

(16) The EIT should regularly inform the Member State Representatives Group (MSRG) of the performance, achievements and activities of the EIT and the KICs, the results of their monitoring and evaluation, and their performance indicators and corrective measures. The MSRG should advise the Governing Board and the Director on strategically important issues and should advise and share experience with the EIT and the KICs. The EIT should organise the meetings of the MSRG.