The EU institutions approved the establishment of the European Institute of Innovation and Technology (EIT) in March 2008. The EIT is an integral part of the Lisbon Strategy for growth and jobs. Its aim is to reinforce Europe's capacity to transform education and research results into business opportunities.

The EIT was set up with a budget of 309 million euro for the period 2008-2013. The Commission expects to appoint a Governing Board in Summer 2008. The Board will be responsible for steering the activities of the EIT and will comprise high-profile representatives from business and academia, supported by a small number of administrative staff.

Initial proposals on the EIT foresaw the establishment of a central institution awarding degrees in conjunction with European companies. Following UK lobbying, the EIT proposal moved towards setting up so-called Knowledge and Innovation Communities (KICs). KICs are autonomous partnership of HEIs, research organisations, companies and other stakeholders in the innovation process. They will undertake innovation activities and research in areas of key economic and societal interest. The first two KICs will focus on renewable energy and climate change. Their selection is expected by the end of 2009.