In order to provide an answer for the call from stakeholders to substantially simplify the European research framework programme, the Directorate General Enterprise and Industry commissioned a benchmarking and impact assessment study. As a result some overall benefits have been identified in providing output based funding that could lead to better results and support the achievement of FP7 and FP8 policy objectives.

The impact analysis carried out within this study shows that an output-based approach for EU Framework programme research grants would considerably reduce the financial-administrative efforts. These conclusions come within the scope of the Commission's objective to shift from the current cost-based reimbursement system towards a output-based scheme, where a lump-sum is granted based on the work that is actually performed and delivered by the beneficiary.

According to this study, reducing the effort spent on administrative and financial aspects would allow stakeholders to focus on delivering high-quality research in the most effective way, and dissemination of the results. The benefits would be twofold, as researchers could focus on delivering good results for projects while Commission services would be available to engage in technical discussions, to provide feedback and to ensure project reviewers’ expertise and guidance is translated into research and innovation actions.

In order to support this position external experts commissioned by the Directorate General Enterprise and Industry carried out a benchmarking analysis on thirteen agencies and institutions, which operate twenty grant and/or contract schemes. These include not only European Agencies such as the European Space Agency (ESA), but also non-European ones like the National Aeronautics and Space Administration (NASA), the Canadian Space Agency (CSA) or the North Atlantic Treaty Organisation (NATO), among others.

As a result, the study concludes that output-based funding schemes are operational in several national and international funding schemes and would be a realistic option for part of the EU framework programme for research and innovation. Applying this type of scheme would lead to potential major savings as well as the simplification in the financial and administrative efforts of both beneficiaries and the EU. It would lead to more effective research management , it would increase funded research capacity and innovation potential and would lead to to better dissemination of research results as well as the enhancement of institutional learning in Research Management.