The idea of a European Institute of Innovation and Technology (EIT) was developed within the framework of the Lisbon Strategy. The initial concept for a European Institute of Technology was based on the Massachusetts Institute of Technology, which is renowned for its combination of world-class education and research. In its proposal for an EIT, the European Commission put forward a two-level structure that combines a bottom-up and top-down approach as a governance structure. The proposal of the Commission was based on the results of a wide public consultation taking more than 700 contributions by experts and the general public, and various stakeholder position papers into account.
The Commission identified five specific areas of concern:
The answer to these issues would focus on integrating the three sides of the so‑called "Knowledge Triangle": higher education, research, and business sectors. The concept of the EIT has been controversial since the proposal of EC president José Manuel Barroso and considered challenging.
Unique feature of the EIT are the Knowledge and Innovation Communities (KICs) set up to integrate education, research and innovation (the so-called Knowledge Triangle) in one common organisation. The EIT finances the KICs with a maximum of 25% of the total budget. While the EIT´s Headquarters are situated in Budapest (Hungary), the EIT is not concentrated in one campus as a traditional institute, instead operating through the KICs. Each of the KICs operates across a number of hubs called ‘co-location centres’ and there are currently 19 co-location centres spread across Europe.
Before, the European Commission had sponsored some pilot projects embracing the Knowledge triangle. The task of aligning different partners and the complexity of building common ground and common rules however proved difficult. Evaluation indicated a high level of trust among the partners, well-designed organizational structures and lean management structures with intelligent performance indicator systems were necessary to make the KICs successful.
As of 21 January 2008, it appeared that the EIT project would mainly operate by building networks of business, pre-existing universities and research organisations, without building any new education or research Institution and without granting EU diplomas.[needs update]
The EIT Governing Board designated the first three Knowledge and Innovation Communities (KICs) in December 2009. These KICs have the objective to integrate education, research and innovation (the so-called Knowledge Triangle) in one common organisation. The EIT finances the KICs with a maximum of 25% of the total budget. While the EIT´s Headquarters are situated in Budapest (Hungary), the EIT is not concentrated in one campus as a traditional institute, instead operating through the KICs. Each of the KICs operates across a number of hubs called ‘co-location centres’ and there are currently 19 co-location centres spread across Europe.
An initial budget of €308.7 million has helped launch and will continue to support the EIT network during the 2008–2013 period.
The annual grant to the Knowledge and Innovation Communities is allocated on a competitive basis and may not exceed 25% of the KICs’ global expenditure. The remainder of the KICs’ budget must be raised from other sources of financing.
In addition to public funding via the EU budget, the EIT set up the EIT Foundation in order to attract private sector funds including philanthropic contributions such as donations or bequests. It aims to commence its fundraising activities towards the end of 2011.
The EIT Governing Board has 15 members - 12 appointed members and 3 representative members as well as one independent observer from the European Commission. The management team is based at the EIT Headquarters in Budapest. It is in charge of monitoring the activities of the KICs, building and strengthening relationships with key stakeholders both in Europe and beyond, disseminating KIC results, share knowledge, and maintain close links with other EU bodies with a view to ensure, implement, and develop the EIT strategy.
On 18 June 2008, Budapest, Hungary, was chosen by the EU nations to host the headquarters of the institute. The Hungarian government welcomed the agreement and said it was a great success for the country.
Five bidders had entered the race for the EIT seat, including Budapest; Wroclaw, Poland; Sant Cugat del Vallès near Barcelona, Spain; Jena, Germany; and a joint bid from Bratislava, Slovakia, and Vienna, Austria. According to president Barroso, these applications were evidence of "the strategic and economic interest attached...to this ambitious project".
When the EU research ministers came together at the end of May, the decision had to be postponed because Poland vetoed the otherwise unanimously backed city of Budapest as the EIT seat. Yet, the ministers had agreed on the selection criteria, namely that the seat should be in one of the new Member States and it should be in a Member State that does not currently have a European agency or institute. Among the five bidders, only Budapest met those requirements. The President Barroso congratulated Hungary on its achievement: "This is also the result of Hungary's long tradition in excellence in education, research and innovation. Setting the EIT in Budapest represents a flagship for excellence in the knowledge triangle."
EIT Community is established across Europe (the European Union and Switzerland) in co‑location centres.