 In view of the economic problems of the Country, it is reasonable to expect that national funding of research programs will severely decline in the coming years. This process has already started in the last few years, and is likely to continue in the next five-year period. Nearly all Universities in this Country are facing challenging budget problems due to severe funding cuts, and the University budget structure, which typically allocates over 90% of the available resources to the payment of salaries, is forced to narrow down its support to research, at least in the short term.
Under these circumstances, our aim to consolidate and strengthen the ARCES Center can only rely on European projects and, to some extent, on intensifying our relationship with Industry. In year 2002, only 2.7% of the ARCES budget was covered by European funds. This coverage has been steadily growing despite the harsher competition at European level, and turned out to be 44% in year 2005. We expect an even better performance in year 2006, and the huge resource allocation to the 7th Framework Program is an incentive to do better in the future. At the moment, we are more severely limited by the load connected with the management of several projects in parallel, than by our ability to get the proposals approved, at least in some areas where we are especially strong.
On the other hand, the increased paperwork involved in writing a proposal and the growing bureaucratic load connected with the management of such projects makes the deployment of a suitable infrastructure mandatory. The governing bodies of the University are setting up such an infrastructure at the central level, with the aim to enhance the opportunities to access European projects by University structures. We are going to monitor in the near future the benefit of this investment for a Center like ARCES.
Our relationships with Industry have been growing as well over the years. In 2005, Industry funds have covered 12% of the ARCES budget, and this coverage does not consider the investment of ST Microelectronics in joint activities. However, due to the very nature of the national industrial tissue, which is predominantly made by small-medium enterprises characterized by limited investments in R&D, we cannot realistically expect a major break-through in this area. On the other hand, we have recently established agreements with major international Corporations, such as Intel, Agilent, Thales and Alcatel. A strengthening of these joint activities is thought to be strategic for a Research Center like ARCES, and we are going to support to the best of our ability such relationships in the future.
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