Temporary director shakes up EU innovation agency

The Budapest-based EIT, which wields a €2.3 billion budget aimed at helping innovative businesses in Europe to bring their inventions to market, was founded in 2008. However, it has never had a director that stuck around for the full term of four years.

“I understand it must look a bit unusual from the outside,” Kern told EUobserver in an interview.

Kern has been interim director since 1 August 2014. The European Commission had posted a job offer for the post of director in July 2015, but has since withdrawn it.

“Of course it would be better if this process went faster, it is obviously not ideal if there is such a long period, but that's the way it is,” said Kern on a visit to Brussels, adding that he could not comment further on the issue.

A spokeswoman for the EU commission said that the selection procedure “did not identify a successful candidate and was therefore closed”. She added that the job will be posted again, but did not note when this would be.

A reason why an interim director has been leading the EIT for almost three years now - although it is not mentioned aloud - may be that it could be better for the organisation to stick with the temporary man than to choose a new one. Kern has introduced many much-needed reforms.

Critical audit report

Prior to Kern, over a period of six years the EIT had four different bosses.

This was one of the reasons why the EU's Court of Auditors published a highly critical report last year.

“The rapid turnover at senior management level is disruptive and impairs leadership and strategic continuity,” the report said.

The auditors also noted that “despite a valid raison d’etre, the EIT’s complex operational framework and management problems have impeded its overall effectiveness”.

The many problems also made it difficult for the agency to retain staff: at the end of 2013, 30 percent of the agency's posts were vacant.

“The high staff turnover had a number of reasons, which we addressed very effectively. We are now essentially fully staffed,” said Kern.

“If many people leave, you have a lot of vacancies. But it also contributed to the turnover, because it means that the people who were there had to work much harder.”

The agency has a staff of 65, and according to staff survey the level of satisfaction has increased considerably.

“We have really nicely turned things around,” said Kern, who introduced exit interviews, to learn why people left; a promotion and appraisal system, which hadn't been there before; and a policy for extending contracts.

However, some things that made working at the EIT unattractive still remain.

Only fixed term contracts

EIT is also one of the few agencies that cannot offer its staff an indefinite contract.

“That gives insecurity and a competitive disadvantage,” said its interim director. He noted that some EIT staff had left because they could find better job conditions in another EU agency.

While a five-year contract can be extended once, that means that for thirteen members of the staff that started working 2010, the end of their time at EIT may be imminent.

“Those are staff who have the institutional knowledge, experience, and so on,” said Kern, who has asked the EU commission to change the regulation so that they can stay. “It's apparently in the pipelines.”

Living costs

What is unlikely to change is the so-called correction coefficient, which increases or decreases a Brussels wage depending on the local living conditions in the agency's host nation.

EIT staff, who work in Hungary, receive a salary that is around 70 percent of what their peers in Brussels receive.

“It is very difficult to attract someone who is very experienced to move to Hungary from Brussels,” Kern said.

He said the assumption that the cost of living is lower is “probably true for Hungary as a whole”, but that it doesn't fit with living in Budapest.

“It's for others to judge whether it's a fair system,” Kern added, but he noted that the coefficient is “disadvantaging” the EIT.

While, initially, the lower salary added to the high staff turnover and difficulties in attracting employees, Kern said that, on its own, people may accept the lower salary because the agency has become a more attractive workplace.

Nevertheless, there is a need for EIT to attract more staff, Kern said, particularly when you look at the amount of funding the employees are responsible for.

He said that “65 staff is not a lot for €2.3 billion,” noting that the budget keeps growing.

“I have flagged this concern also in my annual activity report to the commission, saying that this is not a sustainable situation because it increases the risk, and it means there are fewer people to do the same work.”

Interesting job

Meanwhile, there are also an increasing number of “success stories” coming out of EIT-funded projects, Kern said.

In particular, he mentioned the smart thermometer and smart air-conditioning app, developed by German company Tado, which received funding and support from an EIT subsidiary body.

It is practical results like that which make Kern feel as if he has “one of the most interesting jobs around”.

“We are creating the future of Europe. We have innovation communities covering all the big challenges that Europe faces: climate change, sustainable energy, health, raw materials, digitalisation, foods."

"It's a very busy job, that's for sure, because it's very broad and it's very intense, but of course I think it's a great one."