European Trend Chart on Innovation - Amazon S3s3.amazonaws.com/zanran_storage/ · European Trend Chart on Innovation iv Table 1: National Innovation System SWOT overview Strengths

European Commission Enterprise Directorate-General A publication from the Innovation/SMEs Program

European Trend Chart on Innovation

Annual Innovation Policy Trends and Appraisal Report

Spain

2004-2005


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Innovation is a priority for all Member States and for the European Commission. Throughout Europe, hundreds of innovation-oriented policy measures and support schemes have been implemented or are under construction processes. The sum of these measures and schemes reflects the diversity of framework conditions, cultural preferences and political priorities in the Member States. The ‘First Action Plan for Innovation in Europe’ (launched by the European Commission in 1996) provided for the first time a common analytical and political framework for an innovation policy in Europe.

Built upon the ‘Action Plan’, the Trend Chart on Innovation in Europe is a practical tool for innovation, organisation and management scheme in Europe. Operating under the Innovation Policy Directorate of DG Enterprise and Industry principles, it pursues the collection, regular updating and analysis of information on innovation policies at a national and European level.

The Trend Chart serves the “open policy co-ordination approach” laid down by the Lisbon March 2001 Council. It supports organisation and management schemes in Europe with summarised and concise information, as well as statistics on innovation policies, performances and trends in the European Union (EU). It is also a European forum for the benchmarking and exchanging of good practices in the area of innovation policy.

The Trend Chart products The Trend Chart on Innovation has been running since January 2000. It currently tracks

innovation policy developments in all 25 EU Member States, in addition to Bulgaria, Iceland, Israel, Liechtenstein, Norway, Romania, Switzerland and Turkey. It also provides a policy which monitors the services for three other non-European zones: NAFTA/Brazil, Asia and the MEDA countries. The Trend Chart website (www.cordis.lu/trendchart) provides access to the following services and publications, as they become available:

• a database of innovation policy measures across 33 European countries; • news service and a related innovation policy information database; • a “who is who” of agencies and government departments involved in innovation; • annual policy reports for all countries and areas covered; • background material for four annual policy benchmarking workshops; • the European Innovation Scoreboard and other statistical reports; • an annual synthesis report that will provide the key points of the Trend Chart.

The present report was prepared by IDETRA SA. Contents and views expressed in this report do not necessarily reflect the opinions or policies of the Member States or the European Commission.

This document has been composed within the framework of an initiative of the European Commission’s Enterprise and Industry Directorate-General, Innovation Policy Development Unit. Official responsible: Christophe Guichard ([email protected]).

Copyright of the document belongs to the European Commission. Neither the European Commission, nor any person acting on its behalf, may be held responsible for the use to which information contained in this document may be put, or for any errors which, despite careful preparation and checking, may appear.


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CONTENTS Executive Summary........................................................................................................................... iii 1 The Innovation Governance System .................................................................................... 1

1.1 Overview of the Innovation System...................................................................................... 1 1.1.1 The Spanish Innovation System...................................................................................... 1 1.1.2 Spanish Innovation Policy-Making and Delivery Structures ............................................. 4 1.1.3 Governance of Regional Innovation Systems.................................................................. 8

1.2 Appraisal of the Governance System................................................................................. 12 1.2.1 Policy Making and Evaluation Practices ........................................................................ 12 1.2.2. Policy Benchmarking and Trans-national Learning........................................................ 14 1.2.3. SWOT of the National Innovation Governance System ................................................. 16

2 Developments in Innovation Policy.................................................................................... 17 2.1 Overview of trends in performance and policy.................................................................. 17

2.1.1 Recent trends in innovation performance and competitiveness..................................... 17 2.1.2 Innovation policy objectives ................................................................................................ 21 2.1.3. Policy events & policy debates ...................................................................................... 22 2.1.4. Key developments in innovation policy .......................................................................... 23

2.1.4.1. Policy measures in favour of innovation ................................................................. 24 2.1.4.2. Developments in regional innovation policies ......................................................... 25

2.2. Is policy effective in improving innovation performance? ............................................... 25 2.2.1. Policy responses to identified challenges ...................................................................... 25 2.2.2. Progress towards policy objectives and targets ............................................................. 27 2.2.3. Appraisal of innovation measures.................................................................................. 28

3 Identification of Good Practice ........................................................................................... 30 3.1 Good Practice in Innovation Governance .......................................................................... 30 3.2 Good Practice in Policy Implementation............................................................................ 31

Annex 1: Overview of Innovation Policy Documents..................................................................... 34 Annex 2: Overview of innovation policy measures........................................................................ 35 Annex 3: Further Information........................................................................................................... 54


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Executive Summary 1. Snapshot of innovation performance and challenges - Economic performance: This document shows a slow growth in the economy of the country. Moreover, although the number of hours worked in Spain is higher than the European average, Spanish productivity is 20% lower than in Europe. Factors such as difficulty in adopting technological changes or the pressure of international competition have a negative influence on the improvement of productivity. One of the biggest deficiencies in Spain is the low level of development of the Innovation System. The Spanish Government considers that the solution is related not only to increasing R&D and education resources, but also to strengthening the relationship between all actors involved in science and technology (universities, businesses and public bodies). This is the general frame of action considered by the Spanish Government in order to reach the Lisbon Objectives. - Innovation performance: The main aim of the Spanish Enterprise Organisation COTEC is to promote innovation in Spain. As part of its activity, it presents an annual Study of Innovation in Spain, one of the most relevant analyses of innovation in businesses and the Innovation System in Spain. Both the 2004 Study and the draft of the 2005 Study (to be presented in June 2005) have been used in this report. The major weaknesses identified by both reports include insufficient corporate involvement in financing and implementing R&D and innovation activities, limited corporate investment of finance and human resources to innovation, and limited collaboration between businesses and between research centres. These aspects have also been identified by the Government, and new measures for solving the problem were included in the Productivity Plan published by Ministry for the Economy this year. Another weakness in the Spanish Innovation System identified by the Plan is the scarcity of mechanisms to coordinate agents in the Spanish Science-Technology-Enterprise system or suggest tools to overcome deficiencies. Table 1 summarises the main strengths, weaknesses, opportunities and threats of National Innovation System.


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Table 1: National Innovation System SWOT overview Strengths Weaknesses

• Increasing public funds for R&D and innovation

• Efficiency of the interface structures for Technology transfer.

• Promotion a Spanish culture of Quality and Design

• The Competitive Technological Capacity of the Spanish economy on the world scale.

• Awareness of researchers as regards responding to market demands for innovation.

• The importance of innovation promotion in Spanish government policies.

• Insufficient involvement of business in financing and implementing R&D and innovation activities.

• Limited corporate investment of finance and human resources to innovation.

• University and Research Centre R&D is not sufficiently geared towards companies.

• Limited collaboration between companies and between research centres.

• Insufficient coordination of actions promoted by the different authorities.

• Difficulties in the application of fiscal aids to innovation.

• Excessive bureaucracy in the application process for public funds for the development of technological projects

Opportunities Threats • Creation of a Technological Infrastructure for

collective use. • Being more competitive at the European level. • Creating contacts between groups (scientific

and technology centres, industrialists, Public authorities, etc.) in order to work together and exchange information.

• Competitive entrepreneurialism.

• The numerous regional innovation organisations are not coordinated and managed by the NIS, thus creating confusion among the end users.

• SMEs look for innovation in other countries where there are more facilities.

• Qualified Spanish researchers leaving Spain to work abroad.

• Stakeholder involvement often contributes to the preservation of existing measures and may hinder the emergence of new measures.

• Government changes result in the existing measures being slowed down.

- Challenges in Innovation: The main challenges facing the country are related to the change of the national Government in spring 2004, which led to significant modifications in the budget assigned to R&D activities, changes in the political responsibilities of the different Ministries and modifications or inclusions of new lines of activity from 2004 to 2005. These changes also delayed the public call for R&D activities, many of which are therefore only just starting and have consequently not produced any results as yet. In 2005, the Spanish Economy faced a serious problem as a consequence of the demise of customs duties in the world-wide textile market. However, a solution now seems within reach as the political debate is now centred on taking measures to reinforce the sector. 2. National Innovation Objectives Law 13/1986 on the Promotion and General Coordination of Scientific and Technical Research established the National Plan for Scientific Research and Technological Development for the stimulation and the general coordination of Scientific and Technical Research in the public sector. The 2004-2007 National R&D and innovation Plan marks a new step forward in planning actions financed by the national Budgets. The Plan focuses on optimising available resources by strengthening the cooperation and coordination with the Autonomous Communities (Spanish regional governments). Furthermore, the Plan puts in place inter-ministerial coordination measures to enhance the management of financial instruments and to stimulate and foster R&D and innovation activities. The objective was to increase RTD expenditure to 1.22 percent of GDP in 2005 and 1.4 percent in 2007. The innovation budget will exceed 2.1 percent of GDP in 2005 and 2.5 percent in 2007. The programme is also very ambitious in terms of the qualitative and quantitative improvement of human resources. This is considered an essential tool to raise the level of science in Spain. Finally, enterprise participation is one of the most important points of the programme. It is estimated that the private


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sector will contribute more than 56% of the total RTD budget in 2005 and around 60% of the total budget by the end of the programme. The new tax environment also favours the development of corporate R&D activities. Although these new measures were already running in 2004, no good results were obtained, mainly because of the difficulties companies encounter in the management and reporting of their R&D results. In this regard, a general work procedure was developed in 2005, aimed at guaranteeing the validity of the reports. Information on the elaboration and characteristics of this procedure are included in Section 3.1 (Good Practices in Innovation Governance) of this report. 3. Implementing Innovation Policy – What’s New! On 14 March 2004, Spain changed its government. This resulted in significant changes in the National Innovation Policy governance system. The main changes were the closure of the Ministry of Science and Technology (MCYT) created in 2000 by the previous government and the creation of two new Ministries which took over the MCYT’s responsibilities: the Ministry of Education and Science (MEC) (formerly known as Ministry of Education and Culture) and the Ministry of Industry, Tourism and Trade (MITYC). Under the previous government, the MCYT grouped most competences in Science, Technology and Innovation. Now, these activities have been split up between the two new Ministries. The competences related to Information and Communication Technologies (previously under the MCYT) are now managed by the Ministry of Industry, Tourism and Trade, via the State Secretariat for Telecommunications and the Information Society. The Ministry of Economy and Finance is responsible for Spanish Fiscal Policy and has overall competence in terms of the public budgetary development. In fact, fiscal incentives for research and development activities are designed by this Ministry (see ES 18 for details). The main objective of the regulatory reforms is to stimulate private investment in technological innovation and to support the start-up of NTBFs. The main points of the political debate during this reporting period were related to the new fiscal environment, the competitiveness of new Ministries in R&D matters, and the definition of new instruments oriented at increasing the involvement of companies in the Spanish R&D system. As regards the new fiscal environment, discussion focused on the development of new tools for supporting project analysis. The main problem was related to the evaluation of the R&D or innovation content of a project and to reporting the results achieved. Although fiscal activities are the competence of the Finance Ministry, the participation of the Industry Ministry was essential in order to solve the weaknesses. The Royal Decree 4/2004, article 35 established the “R&D Activities Evaluation and Qualification Office” of the Industry Ministry as the National Entity to evaluate R&D projects. Finally, the most important economic threat detected in 2004 was the decrease of the competitiveness of the Spanish textile industry. This occurred as a consequence of the demise of customs duties in the world-wide textile market in January 2005. In Spain, this may result in a strong decline in the number of jobs in the textile sector. 3. Appraisal of the Innovation Governance System Government innovation policy in Spain is the outcome of a complex interaction of several stakeholders: • Strategic policy making (national strategies, white papers, etc.): prevalence of evidence based on

open consultation procedures • Existence of coordination mechanisms (high-level councils, inter-ministerial committees, etc.) • Evaluation of policy measures.


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As regards policy benchmarking and trans-national learning activities, there is no evidence of a regular or consistent system for organised “intelligence gathering” to survey foreign innovation policies, but information is collected on an ad hoc basis to respond to particular necessities. However trans-national learning is recognised by policy makers as an important matter. Budgetary limitations and language barriers are the main constraints for trans-national policy learning in Spain. Nevertheless, the Confederation of Employers and Industries of the Madrid Region (CEIM) have agreed to run an international project to develop a benchmarking policy as of June 2005. The main objective of the project is to develop a methodology to assess the impact of innovation policies carried out in the participating regions, especially with regard to analysing their effect on SMEs. This analysis will provide a resource for benchmarking in the participating regions and identify successful actions that can be ‘exported’ to improve innovation policy-design in other participating regions. The COTEC 2005 report on Technology and Innovation in Spain contains results of several consultations carried out by experts from businesses, universities, public administration and researchers regarding the evolution of the Spanish innovation system, thereby highlighting problems and tendencies of the NIS. . This report confirms that the most important problem is “the low level of financial and human resources dedicated to innovation by the business sector”. The lack of an innovation finance culture on the financial markets is a “permanent” structural problem. 5. Appraising Policy Implementation Progress In February 2005 the Spanish Government published a Plan to strengthen the Spanish Economy by establishing new measure to reach the Lisbon objectives. The Ministry for Financial Affairs has made this information public (www.meh.es). A Royal Decree-Law was passed, establishing urgent measures to promote these measures (Real Decreto Ley 5/2005 de 11 de marzo de reformas urgentes para el impulso de la productividad). According to the conclusions of the Industry Ministry, Spain’s economic growth is based on three main factors, which are not, however, sustainable: a population increase, employment rates and the number of hours worked). Furthermore, although the number of worked hours in Spain is higher than the European average, Spanish productivity is 20% lower in Europe. Factors such as difficulties in implementing technological changes or the pressures of international competition have a negative impact on efforts to improve productivity. One of the main deficiencies in Spain is the low level of development of the Innovation System. The national Government considers that a solution does not only have to be related to an increase of R&D and education resources but must also reflect the strong relationship between all agents involved in science and technology (universities, businesses and public administrations). The Plan considers aspects such as increasing technological capital, improving infrastructure (qualitatively and quantitatively) and improving the National Innovation System.


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1 The Innovation Governance System

1.1 Overview of the Innovation System

1.1.1 The Spanish Innovation System In 2005, the situation of the Spanish innovation system1 was clearly better than in the previous seven years. The increased technological and innovating capacity of Spanish companies was noteworthy, as was the degree of regional differentiation. However, outstanding performances are only visible in certain sectors and geographic locations; therefore the focus on the national scale remains valid, even though it should be kept in mind that some individual aspects will not always be fully reflected in the national averages. Although the Spanish system has grown, the distance to reference countries remains considerable. Spain needs selective growth in its innovation system. The high and medium-high sectors have not grown at the same rate as other sectors and are consequently less competitive nowadays, even on the national market. The Spanish innovation system is small but effective, but needs more constituent actors who are capable of cooperating successfully. The main (groups of) actors in the innovation system are:

• Businesses: the drivers of the innovation process. • Public administration, which develop policies to support research, technological development

and innovation. • The public R&D system. Universities and public research organisations generate scientific and

technological knowledge by means of research and technological development. • Innovation Support Organisations. The structures and infrastructures for technology transfer,

emphasising technology centres, the Technology Transfer Office, Technology Estates, etc. • Environment: the market, the financial system, the education system, etc, which provide the

material and the human resources to complete the innovation process. Due to the importance of the public sector in higher education and in scientific research, public administration is one of the main actors in the innovation system. Consequently, innovation policies have been built as the main tool for the necessary dialogue between administrations and companies. Business. Innovation effort has grown in the last years, both in the manufacturing sector and, particularly, in the service sector; but the number of businesses that innovate in-house to improve their competitiveness is far from the European average, where the number of innovating companies is approximately twice as high as in Spain. Furthermore, most of the technology is related to capital goods and semi-elaborated products, which lead to short time competitive improvements with a low degree of differentiation in the global market. The creation of NTBFs is still not very common. Since the existing productive structures do not demand a great amount of technological services, real development in this area is not possible. Administrations. At present there is no real innovation policy at the national level. Relevant subjects for the future, such as the training of researchers, technological and scientific infrastructures, financing lines and even ministerial structures depend on four-year planning through R&D National Plans. Public subsidies are half of the European average and are essentially based on credits. Direct subsidies only provide small amounts in general. These funds are managed within a heavy bureaucratic framework that makes them very unattractive to most enterprises (especially SMEs). Public R&D System. There has been a considerable increase in the ability of the Spanish public R&D system to produce scientific knowledge, although it is not as efficient in the creation of technological 1 See White Paper 2004. Cotec Foundation


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knowledge and its transfer to industry. Although the number of researchers is equivalent to other European countries, available resources per capita are considerably lower, and there are difficulties due to rigid working schemes based on civil service structures. These kinds of contracts do not encourage the search for extra financing resources from the business sector. There are no incentives for collaboration between different areas of research. As a result, most research groups are really small. Finally, it should be kept in mind that the public research sector is an extremely heterogeneous collective; only three Universities account for 35% of all academic returns of the 5th Framework programme. Support Infrastructures. This category especially includes several types of Technology Centres and Estates, although it could also include a heterogeneous group of semi-public bodies (both national and regional) that essentially offer information and transference regarding innovation (Technology Transfer Offices (OTRIs), Innovation Relay Centres (IRCs), European Business and Innovation Centres (CEEIs), etc.). The nature and origins of technology centres vary, but they usually arise from the needs of business groups (both sectoral and geographical) or groups of universities that work intensively with businesses. In recent years there has been a considerable increase in the number of Technological Centres as they have managed to respond to real business needs. However, there is a certain kind of “anarchy” due to the creation of multiple Centres, sometimes without considering the possibilities of long-tem development. This means that most of them are quite small, only have resources to provide Technological services to businesses and have no possibility to develop activities related to R&D at a higher level. The Environment. Innovation, and specifically research, seems somewhat alien to the Spanish population. Research activity is not sufficiently considered and most businesses do not usually consider R&D structures as a real help to improve their competitiveness. Additionally, many research groups (particularly public ones) encounter difficulties in adapting their activities to the deadlines and cost schemes of businesses, which leads to their activities being undervalued. Nevertheless, these deficiencies are slowly being reduced, thanks to strong government promotion campaigns, among other elements.


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Table 2: Selected Key Organisations within the Spanish Innovation System Type of organisation Name of organisation (in English) Website (where available) Government and Legislative Bodies Ministerio de Educación y Ciencia

Ministry of Education and Science www.mec.es

Ministerio de Industria, Turismo y Comercio

Ministry of Industry, Tourism and Trade www.mityc.es

Ministerio de Hacienda Treasury www.minhac.es Ministerio de Defensa Ministry of Defence www.mde.es Ministerio de Medio Ambiente

Ministry of Environment www.mma.es

Ministerio de Fomento Ministry of Promotion www.mfom.es

Private Sector Organisations and Business Promotion Cámara de Comercio Chamber of Commerce www.camaras.org Confederación de Empresarios de Madrid

Confederation of Employers and Industries of the Madrid Region

www.ceim.es

Institutes of Learning (R&D and Education Bodies) CSIC National Research Council www.csic.es IAC Astrophysical Institute www.iac.es

INTA National Institute

For Aerospace Technology www.inta.es

CIEMAT Research Centre for Energy, the Environment and Technology

www.ciemat.es

Industrial Research Centres and Innovation Intermediaries ROBOTIKER Technology centre specialising in information

and communication technologies (ICT's) www.robotiker.com

TECKNIKER Technology Manufacture www.teckniker.es LABEIN R&D Technology www.labein.es GAIKER Plastic Technology www.gaiker.es CARTIF Automation, Robotics and Information and

Manufacturing www.cartif.es

ITA Technological Institute Of Aragon www.ita.es Financial System PROFIT National R&D Program http://www2.mityc.es/Profit/ CDTI Industrial Development Technology www.cdti.es Table 3 below shows several basic indicators that reflect the evolution of the Spanish innovation system in 2003, in terms of dedicated resources and obtained results. Table 3: Performance and Founding of R&D in Spain 2004

GENERAL RESOURCES R&D Expenditure Million € 8,213 R&D Effort Total internal expenditure on R&D/GDP 1.10 % Internal expenditure on R&D by the business sector 0.60 % Internal expenditure in R&D by the public sector 0.50 % Personnel in R&D 151,487 Researchers 92,523 No. of scientific papers 29,605 Sources: INE, MCYT and COTEC (2004) In summary, the main strengths of the Spanish innovation system are: - The awareness of researchers of the need to respond to market demands for innovation. - The availability of public resources for the promotion of research, development and innovation. - The importance of innovation promotion policies within Spanish Government policies. - The adaptation of human capital to the challenges of innovation.


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The principal weaknesses of the Spanish Innovation System reside in businesses and their limited progress in using the innovation system for their own benefit. - University and Public Research Centre R&D Departments are not sufficiently geared towards

corporate technology needs. - There is a shortage of public finance to develop resultant technologies. - Excessive bureaucracy in the application procedure for public aid for developing business

innovation projects. - Little public promotion of large multidiscipline projects, involving businesses, universities and other

public research centres.

1.1.2 Spanish Innovation Policy-Making and Delivery Structures On 14 March 2004, Spain changed its government. This resulted in significant changes in the National Innovation Policy governance system. The main changes were the closure of the Ministry of Science and Technology (MCYT) created in 2000 by the previous government and the creation of two new Ministries which took over the MCYT’s responsibilities: the Ministry of Education and Science (MEC) (formerly known as Ministry of Education and Culture) and the Ministry of Industry, Tourism and Trade (MITYC). Under the previous government, the MCYT grouped most competences in Science, Technology and Innovation. Now, these activities have been split up between the two new Ministries. The responsibility for Information and Communications Technology (previously held by the MCYT) now lie with the Ministry of Industry, Tourism and Trade, via the State Secretariat for Telecommunications and the Information Society. The Ministry of Industry, Tourism and Trade also hosts the Sub-Secretariat of Industry and Trade, the Secretariat-General of Industry and the Secretariat-General of Energy. The General Directorate of SME Policy, formerly a part of the Financial Affairs Ministry, is now part of the Secretariat-General of Industry. Diagram 1 shows the present general Spanish innovation policy governance system. This ministerial organisation suggests a commitment by the Spanish Government to foster the integration of Science, Technology and Industry, and a commitment to the Information Society and its integration within a global framework according to the guidelines of the EU’s Lisbon Strategy.


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Diagram 1: Spanish Innovation Policy Governance System

PARLIAMENT

Government

PARLIAMENT

Government

CSIC, CIEMAT, INIA...

State Secretariatof Universities and

Research

State Secretariatof Universities and

Research

General Secretariatof Scientific and

Technologic Policy

General Secretariatof Scientific and

Technologic Policy

SubsecretariatSubsecretariat

General Secretariat of

Education

General Secretariat of

Education

Superior Councilof Sport

Superior Councilof Sport

Directorate General of Research

Directorate General of Research

Directorate General of Technological

Policy

Directorate General of Technological

Policy

General Directionof Universities


Cabinet of StateSecretary

Cabinet of StateSecretary

Sub. Gen. Of theNational Agency of

Evaluation andForesight

Sub. Gen. Of theNational Agency of

Evaluation andForesight



Ministry of Educationand Science

Ministry of Educationand Science

Organism belong to the State Secretariat ofUniversities and Research

CSIC, CIEMAT, IEO, INIA, IGME, IAC

Organism belong to the State Secretariat ofUniversities and Research

CSIC, CIEMAT, IEO, INIA, IGME, IAC

Ministry of Industry, Tourism and Trade

Ministry of Industry, Tourism and Trade

State Secretariat of Tourismand Trade

State Secretariat of Tourismand Trade

State Secretariat ofTelecommunication and

Information Society

State Secretariat ofTelecommunication and

Information Society

Sub-Secretariat of Industry andTrade

Sub-Secretariat of Industry andTrade

General Secretariat of IndustryGeneral Secretariat of Industry

General Secretariat of EnergyGeneral Secretariat of Energy

Spanish Patent and Trademarkoffice

D.G. of Telecommunications and IST

D.G. for development of InformationSociety

D.G. of Industrial Development

General Directorate of SMEs Policy

Centre for the TechnologicalIndustrial Development (CDTI)

D.G. of Energetic Policy and Mine

Ministry of Economyand Finance

Ministry of Economyand Finance

State Secretary of Finance andBudget

State Secretary of Finance andBudget

State Secretary of EconomyState Secretary of Economy

Subsecretary of Economy andFinance

Subsecretary of Economy andFinance

State Society of Industrial Particiaption

State Society of Industrial Particiaption

Interministerial Commission onScience and Technology

General Council of Science and Technology

Advisory Council of Science and Technology Policy

Research Congress CommissionIndustry Senate Commission

Industry Congress Commission

A separate body, the Inter-ministerial Commission on Science and Technology is in charge of coordinating the activities of different Ministries related with Innovation policy. This body has been inactive during the term of the last Government, but the current Government has plans for its reactivation. The Inter-ministerial Commission is responsible for the coordination of the National R&D and innovation Plan and should be supported by the Secretariat-General of Scientific and Technological Policy. There are two main consultative and support departments: the General Council of Science and Technology and the Advisory Council for Science and Technology. The General Council of Science and Technology has the main objective of coordinating the Autonomous Communities and the relations between them and the central administration. The Advisory Council for Science and Technology Policy has been created to promote the participation of society in R&D policy. Furthermore, the Research Congress Commission, the Industry Congress Commission and the Senate Industry Commission have been created to control Parliament commissions. These are consultative bodies. The competences of the Secretariat of Universities and Research Policy of the Ministry of Education and Science are: • Management and control of activities and actions included in the National R&D and innovation Plan. • Responsibility for Scientific research and Technological development; • Coordination of Spanish participation in international scientific research programmes. • Development of mechanisms to coordinate agents in the Spanish Science-Technology-

Enterprise system. • Encouragement at large-scale research installations. • Co-operation with the Autonomous Communities and with other Ministries


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The Secretariat-General of Scientific and Technological Policy develops its activities under the State Secretariat of Universities and Research, as well as some autonomous bodies, such as the Spanish Evaluation and Planning Agency and the largest public research infrastructures. The Secretariat-General of Science and Technological Policy includes two departments:

• The General Directorate of Research, with competence in the promotion and dissemination of scientific knowledge and the promotion of research and development in all scientific areas.

• The General Directorate of Technological Policy. This department has competence in the

integration of scientific research and technological development in the business world. The other ministerial department incorporated into the Ministry of Industry, Tourism and Trade is the State Secretariat of Telecommunications and Information Society, whose competences lie in the areas of communications and IST. There are two departments in the State Secretariat of Telecommunications and Information Society:

• The General Directorate of Telecommunications and IST. Its main areas of activity are planning, promotion and development of infrastructures and services related to telecommunications and the information society and the development of technical regulations regarding telecommunications services.

• The General Directorate for the development of the Information Society. This department

works to foster the Information Society in all social and economic fields (citizens, companies, public administration, etc.).

Another body residing in the Ministry of Industry with an important role in innovation policy is the Secretariat-General of Industry. This body was previously part of the Financial Affairs Ministry under the name of the State Secretariat of Energy, Industrial Development and Small and Medium Enterprises. This Secretariat is divided in two Departments:

• The General Directorate of Industry, with competences related to R&D and innovation policies. This department manages all subsidies related to industrial innovation.

• The General Directorate of SME Policy, in charge of the promotion of public policies to

encourage the development and creation of small and medium enterprises (SMEs). The Plan for strengthening the competitiveness of SMEs (ES 27) is managed by this ministry.

The main policy framework is the Spanish Research, Development and Innovation Plan (R&D and innovation Plan 2004-2007). The Spanish Research Development and Innovation Plan has been designed as the main instrument to develop a global R&D strategy and a public innovation policy. The R&D and innovation plan covers a broad range of scientific areas and also considers measures directed towards innovative enterprises, support of technological innovation and R&D excellence. The R&D and innovation plan is an essential instrument to boost scientific research, entrepreneurial competitiveness and scientific levels in Spain. To finance these activities, there are two fundamental instruments: Function 46 and the EU Structural Funds. Function 46 is a budgetary instrument to finance government policy to encourage scientific research, technological development and innovation at a national level. Function 46 has a number of sub-functions and programmes which are depicted in diagram 2 below. There are also other Ministries involved in the national innovation policy governance system, such as the Financial Affairs Ministry and the Ministry of Health. The Financial Affairs Ministry is responsible for Spanish fiscal policy and has the global responsibility for public budgetary development. In fact, fiscal incentives for research and development activities are designed by this Ministry (see ES 18 for details). The main objective of the recent set of regulatory reforms is to stimulate private investment in technological innovation and to support the start-up of NTBFs.


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Finally, the Ministry of Health is responsible for promoting research on genomics in Spain (ES 18) via the Genomics and Proteomics research Foundation. Diagram 2- Function 46. Research, Development and Innovation: Sub-functions, Programmes and Ministries.

RESEARCH, DEVELOPMENT AND INNOVATION

Research and studies relation tothe general public services.

Basic Research

Research and Developmentrelation to the defence.

Research and Developmentrelation to the health.

Research and Developmentrelation to the education.

Research and Developmentrelation to other sectors.

MINISTRY OF THE PRESIDENCY

MINISTRY OF ECONOMY AND FINANCE

MINISTRY OF EDUCATION AND SCIENCE









MINISTRY OF PROMOTION

MINISTRY OF INDUSTRY, TOURISM AND TRADE




MINISTRY OF DEFENCE

MINISTRY OF HEALTH AND CONSUMPTION

MINISTRY OF THE ENVIRONMENT

Research and Sociological and Cosntitutional Studies

Research and Statistical and Economic Studies

Scientific Research

Promotion and Coord. Of the Scientific and Technical Research

Research and Studies of the Armed Forces

Sanitary Research

Research and Educative Evolution

Astronomy and Astrofisic

Research and Experimentation of Public Works and Transport

Research and Technological-Industrial Development

Research and Agricultural experimentation

Research Oceanographic and fishing

Research geologic-miner and environmental

Research and Development of the Society of the Information

Energy Research, environmental and Technological

Innovation technological of the Telecomunications

RESEARCH, DEVELOPMENT AND INNOVATION

Research and studies relation tothe general public services.

Basic Research

Research and Developmentrelation to the defence.

Research and Developmentrelation to the health.

Research and Developmentrelation to the education.

Research and Developmentrelation to other sectors.

MINISTRY OF THE PRESIDENCY

MINISTRY OF ECONOMY AND FINANCE










MINISTRY OF PROMOTION





MINISTRY OF DEFENCE

MINISTRY OF HEALTH AND CONSUMPTION

MINISTRY OF THE ENVIRONMENT

Research and Sociological and Cosntitutional Studies

Research and Statistical and Economic Studies

Scientific Research

Promotion and Coord. Of the Scientific and Technical Research

Research and Studies of the Armed Forces

Sanitary Research

Research and Educative Evolution

Astronomy and Astrofisic

Research and Experimentation of Public Works and Transport

Research and Technological-Industrial Development

Research and Agricultural experimentation

Research Oceanographic and fishing

Research geologic-miner and environmental

Research and Development of the Society of the Information

Energy Research, environmental and Technological

Innovation technological of the Telecomunications


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1.1.3 Governance of Regional Innovation Systems All 17 regional governments in Spain have a competence for their own innovation policy and each one has designed a regional strategy for innovation. However, the implementation of these strategies is a different matter. A fair way of evaluating their commitment to regional development through innovation is the percentage of expenditure on research and development of the total regional government budget as it shows the means allocated to the implementation of these strategies. However, different regional agents have denounced the lack of a common strategic framework of the central administration and the Autonomous Communities. This is the major problem for the success of the National Science and Technology System. The goal is to underline domestic increases in R&D expenditure, although the level of R&D expenditure is not the only – and possibly not even the most important – issue that needs to be addressed in order to achieve a convergence of science and technology in Spain.2,3 Table 4: Regional R&D expenditure in % of regional budgets

Percentages of regional governmental budgets devoted to R&D Region 2004Castilla y León 2.30%Madrid 1.67%Basque Country 1.37%Navarre 1.10%Andalusia 1.00%Galicia 0.80%C. Valenciana 0.77%Aragon 0.70%Murcia 0.70%Asturias 0.60%Catalonia 0.50%Castilla La Mancha 0.40%Rioja 0.37%Extremadura 0.30%Balearic Islands 0.20%Canary Islands 0.10%Cantabria 0.03%

Source: Economic Prediction Centre. (Centro de Previsión Económica). UAM

The table above allows a number of conclusions and analyses regarding regional R&D expenditure:

• The region most committed to regional development through R&D is Castilla y Leon, one of the least favoured regions in Spain. This region is an example of how to formalise and implement a sound strategy for industrial development based on innovation, having learnt a lot from proposals of the European Commission: Regional Technology Plans, RIS+, RIAP. The Regional Strategy for R&D and Innovation (ERI) implemented from 2002 to 2006 has reinforced the regional basis of traditional sectors such as: farming products, wood and furniture, mechanical, textile, natural stone and car components. It also fosters promising new sectors such as biotechnology and aircraft industries. Innovation policy has also been applied to sustainable tourism based on regional cultural heritage and the Spanish language. The cumulative growth in R&D expenditure was the highest in Spain in the period 1998 -2003.

• The next group of regions is formed by Madrid, the Basque Country and Navarre, three of the wealthiest regions in Spain with a traditional commitment to R&D policies, though based on

2 La territorialización de la ciencia y la tecnología. Alfonso González Hermoso de Mendoza. Marzo 2002 3 Revista de Economía Industrial. Ministerio de Industria Turismo y Comercio. Nº 354 2003


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different strengths, such as the high concentration of R&D institutions in Madrid and an important industrial research policy in the Basque Country.

• Andalusia, another of the least favoured Regions of Spain, has shown a surprising 44% annual growth in total R&D expenditure from 2002 to 2003, much of it based on greater corporate efforts in R&D, promoted by the regional government.

• The five least favoured regions spend between 0.8% and 0.6% of their regional budget on R&D. These regions are: Galicia, Valencia, Aragon, Murcia and Asturias. Most of these regions will exceed 75% of the EU’s average per capita income level in 2006 and will thus have to face international competition under new financial conditions.

• Surprisingly, Catalonia spends a lower proportion on R&D than this group. Only 0.5% of its regional budget is earmarked to R&D, in spite of Catalonia being one of the regions with the highest R&D expenditure in Spain

• The final group consists of the six regions with less than 0.5%. If these figures are put into the context of the cumulative growth in R&D from 1988 to 2003, they provide a relatively clear picture of the results regional governments achieve when implementing their strategies. A comparison between the level of political commitment and the results obtained over a period of six years shows the following regional map for Spain. Evolution of regional expenditure on R&D as a percentage of the Gross Regional Product from 1998 to 2003 and cumulative rate of growth for the same period Table 5: Cumulative Regional Growth Year 1998 1999 2000 2001 2002 2003 Cum. Growth SPAIN 0.89 0.88 0.94 0.99 1.03 1.1 4.33% Castilla y León 0.52 0.62 0.64 0.83 0.81 0.88 11.10% Navarre 0.84 0.96 0.91 1.22 1.11 1.41 10.91% Galicia 0.53 0.53 0.64 0.72 0.78 0.86 10.17% Extremadura 0.43 0.4 0.53 0.6 0.6 0.63 7.94% C. Valenciana 0.62 0.61 0.73 0.77 0.81 0.87 7.01% Andalusia 0.66 0.63 0.66 0.62 0.62 0.89 6.16% Rioja 0.5 0.47 0.59 0.63 0.57 0.66 5.71% Murcia 0.56 0.64 0.71 0.66 0.57 0.73 5.45% Catalonia 1.09 1.07 1.12 1.17 1.28 1.38 4.83% Asturias 0.56 0.59 0.83 0.71 0.65 0.7 4.56%

Castilla y León

2,0% Madrid 1,5% País Vasco Andalucía Navarra 1,0% Valencia Galicia Aragón Asturias Murcia Cataluña 0,5% Castilla-La Mancha Rioja Extremadura Baleares Canarias Cantabria -10% -5% 0,0% 5% 10% Cumulative Growth RD


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Basque Country 1.24 1.14 1.17 1.39 1.32 1.42 2.75% Madrid 1.61 1.64 1.67 1.79 1.88 1.81 2.37% Canary Islands 0.51 0.46 0.49 0.56 0.6 0.55 1.52% Aragon 0.71 0.76 0.71 0.71 0.75 0.74 0.83% Castilla La Mancha 0.48 0.33 0.56 0.35 0.44 0.44 -1.73% Balearic Islands 0.28 0.24 0.23 0.25 0.26 0.25 -2.24% Cantabria 0.84 0.59 0.47 0.57 0.55 0.47 -10.96% The calculation presented above can be modified in order to eliminate the effects of a low starting point in cumulative growth by comparing the actual percentages of the Gross Regional Product that are spent on R&D. This produces the following regional ‘map’ for Spain:

Each

Autonomous Community has developed plans to promote research, technological development and innovation. Together, they spend around €2,400 million of their regional budgets on R&D activities. However, there are great discrepancies between regions in terms of the cost of R&D to the public sector (State, regional and local authorities, public research institutes and universities) (see figure 1). Figure1. Distribution of public R&D expenditure by region (2003)

Under 2%

2% - 6%

6% - 15%

Over 15%

Source: INE (2005) and COTEC Foundation.

% regional budget for R&D on PRB 2,0 Madrid 1,5 País Vasco Cataluña Navarra 1,0 Valencia Andalucía Castilla y León Aragón Asturias Murcia Galicia Extremadura Canarias Cantabria 0,5

Castilla-La Mancha Rioja

Baleares

-10%

-5% 0,0 5% 10%

Cumulative Growth RD


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Table 6: Regional Governance of Innovation Policy Matters Autonomous Community

Laws Plans Power related to Innovation Policy

Andalusia III Research Plan 2000-2003

Director Plan for innovation and technological development 2001-2003

Aragón Law 9/2003 of 12 March on the Promotion and coordination of the Research and Development and the Transference of Knowledge in Aragón.

I Plan for R&D and transfer of knowledge.

Asturias Plan for Research, Technological Development and innovation 2001-2004

Balearic Islands Law 7/1997 of 20 November, of the Balearic Islands, regulating Research and Technological Development.

I Plan for Research and Technological Development 2001-2004

Canary Islands Law 5/2001, of 9 July, of the Canary Islands Autonomous Community, on the promotion and development of scientific research and innovation.

Strategic Plan for innovation 2000-2006

Cantabria Strategic Plan for Technological Development 2002-2006

Innovation Plan 2002

Castilla y León Law 17/2002, of 19 December, on the promotion and general coordination of scientific research, development and technological innovation (R+D+I) in Castilla y Leon.

Strategic Regional Plan for R&D and innovation 2002-2006

Castilla - La Mancha

I Regional Plan for Research and Technological Development 2000-2003

I Regional Plan for Innovation 2001-2004

Catalonia Plan for Research and innovation (2005-2008)

Navarre Law of promotion and general coordination of scientific and technical research.

Technology Plan 2000-2003

Madrid Law 5/198, 7 May, of the Madrid Community, on scientific and technological research.

III Regional Plan for Scientific Research and Technological innovation 2000-2003

C. Valenciana Law 7/1997, of 9tDecember, of the Valencian community, on scientific and technological research.

Plan for R&D and innovation 2001-2004

Extremadura Plan for R&D and innovation 2001-2004

Galicia Law of the Parliament of Galicia 12/1993, 6 August, on the promotion of investigation and technological development.

Plan for R&D and innovation 2002-2005

La Rioja Law 3/1998, 16 March, of the La Rioja Autonomous Community, on the promotion, coordination and development of research and technological development.

I Riojano Plan 1999-2000

Murcia Science and Technology Plan 2003-2006

Basque Country

Science and Technology Plan 2001-2004

Regional Development Policy.

Technological and Scientific Centres and Parks.

Research Centres.

Technological Centres.

Planning and implementing the management of the EU Structural Funds.

Innovation Relay Centres.

Organisations for the Transfer of technology and sensitisation towards technology.


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There is one major initiative with a national planning, but with a regional orientation: the former Financial Affairs Ministry launched a measure called the PCCP: Plan for the strengthening and competitiveness of SMEs (ES 27). The measure has a wide regional orientation and replaced the former SME Initiative for Industrial Development (ES 3 and ES 5). It is funded centrally but is managed by regional agencies that publish calls for tenders and evaluate the bids according to their own criteria. The Spanish National Research Council (CSIC) is responsible for the coordination of the Autonomous Communities and the relations between them and the central administration. The functions of the General Council include proposing research programmes and projects and promoting joint activities of the Autonomous Communities, or of the Autonomous Communities and the central administration, for the development and implementation of research programmes. It is possible that a full coordination of R&D and innovation policies among the Autonomous Communities, and between the Autonomous Communities and the central administration, is achieved by 2015. As part of the last R&D and innovation Plan, the Ministry of Education and Science has in recent years promoted new collaboration agreements between the regional authorities and the National Research Institutes or Agencies to strengthen the regional dimension of innovation and to carry forward specific initiatives. These Framework agreements have been signed by 13 regions. Nevertheless, the general impression is that effective coordination has not taken place. Furthermore, the change of government meant that this process was abandoned. Regional agencies are usually totally public and report to the regional and even the European authorities. It should be pointed out that the development of regional innovation policies has been encouraged strongly by the growing importance given by the European Commission to innovation as a means of regional development, the main instrument of this being the Structural Funds. The most recent and important sign of this is the programme of Innovative Regions. Madrid is the only Spanish region that has not developed its own regional programme with the help of this measure. It is difficult to highlight the specific measures of certain regions in contrast to others as “good practice”. In general, the regions have all adopted measures adapted to their previous economic and technological degree of development. Furthermore, most of the initiatives are still in the first stages of development and their real impact on the Regional Innovation Systems is still to be determined.

1.2 Appraisal of the Governance System

1.2.1 Policy Making and Evaluation Practices Spanish Government innovation policy is the outcome of a complex interaction of several elements. • Strategic policy making (national strategies, white papers, etc.): prevalence of evidence-

based and open consultation procedures The National R&D&I Plan 2004-2007 is the strategic axis of Spanish R&D and innovation policy for this period. This Plan aims to contribute to knowledge creation in order to benefit society and improve the welfare state. The Plan was elaborated in a cooperation involving all systems/actors of the Science-Technology-Enterprise-Society (more than 450 experts from universities, public bodies, technology centres and business), including the Autonomous Communities, ministerial departments and other councils. The Plan attempts to involve all the elements that form the society in one of the key aspects of future economic and social development in Spain. The Plan has been designed to achieve the following objectives:

− To increase the level of Spanish science and technology


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− To increase the human resources engaged in research and development both in the public and private sectors.

− To strengthen the rights of researches. − To strengthen the international dimension of Spanish science and technologies, especially in

the European Research Area. − To implement new actions in large companies − To improve the role of basic research − To improve the knowledge of society of scientific advancements

The aim of the Plan is to increase spending on R&D to 1.22 percent of GDP in 2005, rising to 1.4 percent in 2007. On this basis, the total R&D and innovation expenditure will exceed 2.1 percent of GDP in 2005 and 2.5 percent of GDP in 2007. The Plan estimates that the administration will have assigned 20 percent more to R&D (€4,800 million) than in 2003 (€4,000 million) once the Plan is implemented. • Existence of coordination mechanisms (high-level councils, inter-ministerial committees,

etc.) The Scientific Policy General Council is responsible for the coordination of the scientific policies of the regions. • Evaluation of Policy Measures. The availability of up-to-date information regarding the situation of industry and innovation is a basic question for the analysis of these issues. However, in the most cases this information is spread across several documents in different mediums. It is therefore not immediately evident which is the applied methodology or the exact concept of measurement. To solve some of these problems, the Sub-Secretariat of the Ministry of Industry, Tourism and Trade (MITYC) has developed a database for basic industry and innovation indicators, consisting of about 200 tables. The information used to fill these tables with content are principally taken from national and international public and private bodies which provide regular information, using an explicit methodology and content. These resources include the INE (Spanish Statistical Institute), Eurostat and the OECD. The MITYC merely publishes the information. (www.mcyt.es/indicadores/). Each year, the COTEC Foundation (whose mission it is to contribute to the development of the country by means of promoting technological innovation in Spanish businesses and society), publishes a report on technology and innovation in Spain. The report gives a complete analysis of the situation. (www.cotec.es). The Spanish Evaluation and Prediction Agency (ANEP) (La Agencia Nacional de Evaluación y Prospectiva) works under the auspices of the State Secretary of Universities and Research and the Ministry of Education and Science. Its aims are:

• To evaluate the scientific-technical quality of proposals seeking public financing, including both the department and other public or private organisations.

• To improve the capacity of the public science and technology system. • To contribute to decisions on the allocation of resources to R&D&I, on the basis of excellence

criteria and scientific-technical quality.


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Table 7: Overall appraisal of tools for policy making and evaluation Policy making/evaluating Tools Criteria Ranking

(*, ** or ***) Strategic policy (national strategies, white papers, etc.), showing a prevalence of evidence based on open consultation procedures

* Almost no background discussion, studies or stakeholder participation

** At least an attempt to perform these activities is systematically pursued

*** All of the above items are systematically taken into consideration

***

Coordination mechanisms (high-level councils, inter-ministerial committees, etc.)

* No coordination mechanism ** Few, rather fragmented and

bilateral coordination processes *** Well organised, coherent system of

policy coordination

**

Systematic review processes for innovation policy

* Almost no policy documents and, hence, little assessment

** A few ad hoc reviews *** Systematic policy review

***

Innovation policy design and implementation measures

* Very centralised/closed system for policy design and implementation

** Consultation and partnerships exist mainly on an ad hoc basis

*** Systematic interaction with all the stakeholders

***

Existence of an “evaluation culture” in the innovation policy field

* Rare innovation evaluations for monitoring or auditing only.

** Evaluations are carried out on an ad hoc basis on the request of specific departments or funding bodies.

*** Measures are systematically evaluated at key milestones in their implementation.

***

External versus internal evaluations of innovation policy measures

* Evaluations are carried out internally (as a general rule)

** Some evaluations are contracted out to independent contractors but this is not general practice.

*** Evaluations respect good practice criteria (involve external experts, evidence based methods, quality appraisal of evaluation reports, etc.)

***

Transparency and publication of results of evaluations

* Little or no transparency at all when dealing with results.

** Evaluations and appraisals are published or debated occasionally

*** All evaluations are published or discussed in a public forum.

**

1.2.2. Policy Benchmarking and Trans-national Learning In Spain, there is no evidence of a regular or consistent process or system of “intelligence gathering” from foreign innovation policy surveys; this information is collected in an ad hoc basis that tries to respond to particular needs. However trans-national learning is recognised by policy makers as an important tool. Budgetary limitations and language barriers are the main constraints for trans-national policy learning in Spain. Nevertheless, the Confederation of Employers and Industries of the Madrid Region (CEIM) have agreed to run an international project to develop a benchmarking policy as of June 2005. The main


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objective of the project is to develop a methodology to assess the impact of innovation policies carried out in the participating regions, especially with regard to analysing their effect on SMEs. This analysis will provide a resource for benchmarking in the participating regions and identify successful actions that can be exported to improve innovation policy-design in the regions. The project will be divided into four major stages. The first two stages will involve an impact assessment methodology development, while the last two will be devoted to benchmarking and policy construction in the regions:

1. Analysis of the basic characteristics in two major fields: o Business characteristics o Previous innovation policies (particularly aimed at SMEs)

2. Provision of a methodological framework based on technology monitoring processes in order to establish common indicators for benchmarking actions in innovation policies.

o Definition of indicator o Definition of data-gathering sources and processes o Definition of analysis methodology for assessing the impact of the innovation policies

for each defined indicator.

3. Benchmarking analysis of the participating regions based on the methodology created in the second stage.

4. Conclusions and policy construction. Based on the benchmarking analysis, successful actions in each region will be determined and ‘exported’ to the other participating regions. This cooperation between the regions could range from:

o Straightforward exchange of good experiences and practices o Actions requiring additional regional/national founding o Further European-level joint projects

Overall appraisal of policy benchmarking and learning initiatives Policy learning tools Criteria Ranking

(*, ** or ***) Formal mechanisms for policy learning (studies, innovation observatories, study visits, etc.)

* No mechanisms exist ** Ad hoc mechanisms *** Very systematic efforts

*

Application of foreign experience in designing measures (e.g. involvement of foreign experts in the design phase)

* None or very occasionally ** Occasional or ad hoc *** Systematically

**

Innovation policy exchange or hiring staff/ experts from other countries

* None ** Ad hoc *** Systematic schemes

**

Involvement of senior policy makers/executives in transitional networks (e.g. TAFTIE, etc.)

* None ** Some *** All of them

***

Benchmarking exercises assess comparative innovation performance (scoreboards, etc.) or vis-à-vis policy in other countries

* None ** Ad hoc benchmarking exercises *** Benchmarking is a systematic

process and results are incorporated into policy

***

Implementing policy co-operation with other countries (bilateral or multilateral programmes on innovation, etc.).

* There is no formal cooperation ** There are common innovation

actions responding to specific opportunities

*** Many longer term agreements

***


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1.2.3. SWOT of the National Innovation Governance System Taking into account the preceding comments, the following Table provides a simplified overview of main strengths and weaknesses, as well as opportunities and threats, of the governance system in innovation policy in Spain. Table 8: National Innovation Governance System SWOT overview Strengths Weaknesses

• Increasing public funds for R&D and innovation

• Efficiency of the interface structures for Technology transfer.

• Promotion a Spanish culture of Quality and Design

• The Competitive Technological Capacity of the Spanish economy on the world scale.

• Awareness of researchers as regards responding to market demands for innovation.

• The importance of innovation promotion in Spanish government policies.

• Insufficient involvement of business in financing and implementing R&D and innovation activities.

• Limited corporate investment of finance and human resources to innovation.

• University and Research Centre R&D is not sufficiently geared towards companies.

• Limited collaboration between companies and between research centres.

• Insufficient coordination of actions promoted by the different authorities.

• Difficulties in the application of fiscal aids to innovation.

• Excessive bureaucracy in the application process for public funds for the development of technological projects

Opportunities Threats • Creation of a Technological Infrastructure for

collective use. • Being more competitive at the European level. • Creating contacts between groups (scientific

and technology centres, industrialists, Public authorities, etc.) in order to work together and exchange information.

• Competitive entrepreneurialism.

• The numerous regional innovation organisations are not coordinated and managed by the NIS, thus creating confusion among the end users.

• SMEs look for innovation in other countries where there are more facilities.

• Qualified Spanish researchers leaving Spain to work abroad.

• Stakeholder involvement often contributes to the preservation of existing measures and may hinder the emergence of new measures.

• Government changes result in the existing measures being slowed down.

Results in the Cotec Report4 show the problems and the tendencies of the NIS observed by business experts, universities and public administration researches analysing the evolution of the Spanish innovation system. This report confirms that the most important problem in the Spanish innovation system is “the limited financial and human resources dedicated to innovation by the business sector”. This is a “permanent” structural problem, solutions for which are only forthcoming very slowly. Another important problem, as recorded last year, is the lack of a culture of innovation financing on the Spanish financial markets.

4 Informe Cotec 2005. Tecnología e innovación en España.


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2 Developments in Innovation Policy

2.1 Overview of trends in performance and policy

2.1.1 Recent trends in innovation performance and competitiveness Table 4 shows comparative indicators of economic performance. Structural indicators show that the Spanish GDP level is lower that the EU average, although it has increased by in 6 points from 2000 to 2004. Labour productivity (per person employed) has not increased significantly during the last four years and it has remained higher that the EU-25 average during that period. This means that Spanish GDP per person employed is higher than the EU-25 average. However, the unemployment rate is higher than the EU-25 average and the evolution of unemployment in Spain was contrary to the European trend. Whereas the Spanish rate decreased by 0.5 percentage points from between 2000 and 2003, the European rate increased by a similar margin in the same period. On the other hand, although the Spanish employment rate has increased during the 2000-2003 period, it still remains lower that the EU-25 average. At the same time, the evolution of this indicator is promising insofar as it has been rising faster than the European average. Trade integration of goods decreased in the last three years, which means that Spain has become less integrated within the international economy. Nonetheless, the trade integration indicator for 2003 remains significantly higher than the EU-25 average and Spain remains one of the most open economies in the OECD. Trade integration of services has also decreased, but by a lower margin than the rate for goods. Accordingly, the import and export rate for services in the balance of payments is higher than the average for goods. Table 9: Comparable indicators of economic performance

National performance EU 25 average Indicator 2000 2004* 2000 2004*

GDP per capita in PPS (EU25=100) 91.3 97.3 100 100 Real GDP growth rate (% change previous year) 4.4 2.7 3.9 2.3 Labour productivity per person employed (EU25=100) 100.4 102.1 100 100 Total employment growth (annual % change) 3.5 1.81* 1.4 0.2* Inflation rate (average annual) 3.5 3.1 2.4 2.1 Unit labour costs (growth rate) -0.5 -2.0 0.4 -0.3* Public balance (net borrowing/lending) as a % of GDP -0.9 -0.3 0.8 -2.8* Employment rate (as % of 15-64 population) 56.2 59.7* 62.4 63* Unemployment rate (as % of active population) 11.3 10.8 8.6 9 Trade integration of goods [(imports+exports)/GDP] 23.7 21.51* - 9* Trade integration of services [(imports+exports)/GDP] 7.6 7.3* - 3.2* Foreign direct investment intensity 8.2 2.9* - 1.2* Business investment as a percentage of GDP 22.1 22.9 18.4 16.8* Source: Eurostat - Structural Indicators and Long-term Indicators http://epp.eurostat.cec.eu.int * or latest available year (2003) In its “Socio-economic panorama of Spain” no. 124 of April 2005 (Panorama Económico Social de España), the Economic and Social Council (Consejo Económico y Social, www.ces.es), a national Government institution, identified the following main points as underlying reasons for trends in the Spanish economy.


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1. The Spanish economy has grown substantially, although at a lower rate than officially expected.

2. Industrial sectors have maintained the increase started in 2003, this being the most active period for the construction sector. This increase was due to a number of factors: increased employment in Spain, low interest rates, demands by foreigners and immigrants, etc.

3. This development has had no effect on the unemployment rate, which, measured as equivalent full time jobs, decreased by 0.8 percentage points.

4. The service sector has also grown since the last year. IST services led the growth in terms of turnover increase. The sub-sector with the lowest increase in turnover was tourism.

5. The weak point in Spanish economy is its dependence on oil. Spain imports about 75% of its energy demand. Factors such as rising world-wide demand for oil (especially from China and India), low levels of oil stocks in the USA and higher oil prices have had a negative impact on the Spanish economy. A diversification strategy is proposed to reduce Spain’s dependence on oil imports. In addition to better energy efficiency, the development of renewable energy technologies has to be taken into consideration.

A brief analysis of the situation as regards patents shows the following main points: Spain has a surprisingly low rate of industrial property protection. According to the data published by the WIPO on PCT applications for international patents in 2004, Spain has only applied for 823 patents, leaving it in 18th place the applications ranking. This contrasts strongly with Spain’s position as 10th strongest economy in the same group of countries. This points to a potentially negative economic development in Spain’s future: in a world where intellectual property rights are becoming more and more respected and economically important, there is a considerable value attached to international patents, which guarantee a legal monopoly on a new product for twenty years. In contrast, the number of patent applications in other countries soared between 1991 and 2000. For instance, while China applied for three PCT patents in 1991, and India for only one (as opposed to 96 Spanish applications), the PCT applications from these two countries have risen to 1,704 (China, now 13th position) and 667 respectively (India, now 20th position in the ranking). Table 10 summarises national EIS indicator tendencies and clearly shows a weakness in the participation of Spanish companies in R&D and innovation activities. The low expenditure on private R&D, for example, is striking, although it has improved slightly with respect to previous years. The number of existing patents in Spain is also low. This is particularly concerning in view of the large increase of the number of patents registered by non-European countries such as China or India, which compete with Spain in some sectors. The table also shows the increasing tendency in the number of graduates in Spain, but this increase does not seem to result in an improvement of innovation indicators in the business sector. This point has been identified in the report as one of the great weaknesses of the Spanish Innovation System. Government performance plans contemplate support for the employment of technology experts and doctors in the business sector, thereby improving the national R&D resources.


19

Diagram 3: EIS2004 Country Summary


20

Table 10: National trends in EIS indicators vs. EU25


21

2.1.2 Innovation policy objectives The general election of March 2004 resulted in a new Government, which, in turn, led to certain changes in the ‘National R&D Policy’, although the main framework programme objectives remained unchanged. Many features of this National Programme were included in the 2004 Annual Report Trend Chart, and can be summarised as follows: Spanish innovation policy is outlined by means of a strategic four-year Plan entitled ‘R&D and innovation National Plan’. In the first quarter of 2000, Spanish policy focus on science and technology began to shift from an R&D oriented policy towards an innovation oriented one following an integrative approach defined in terms of goals and initiatives (as planned and approved in the 5th R&D and innovation National Plan (2004-2007) . This plan is a strategic axis for R&D and innovation policy in Spain and was approved in November 2003. The National Plan includes a new system for monitoring R&D and innovation policies (SISE) and is vital for maintaining the socioeconomic growth of the recent years. A substantial profound mid-term revision of the plan is scheduled for 2005, in order to revitalise and boost its objectives. The Plan establishes a series of objectives related to different activities. The increase in Spanish science and technology levels and in human resources devoted to R&D and innovation (both in the public and the private sector), as well as the reinforcement of researchers’ rights; the strengthening of Spanish science and technology in the international sphere (specially in the European Research Area); main infrastructure interventions and the role improvement of basic research in society by publicising the importance of its new findings are the main features in this strategic plan. The 5th R&D and innovation Plan lays down general framework for the development of different measures and programmes; the development of new R&D lines is the responsibility of their respective Ministries. The current Spanish Government specifies the methodological priorities in Science and Technology (based on the aforementioned Plan) as follows:

1. favouring the mobility of researchers from universities and Research Centres to the private sector to foster competitively and social progress

2. favouring the mobility of human research resources between universities, Research Centres and Technological Centres

3. encouraging the employment of young researchers by applying different measures, such as the creation of 900 research jobs (€120 million in five years); specific programmes supporting the employment of young researchers into public R&D and in the private sector.

4. favouring R&D cooperation between research groups and businesses by means of creating new R&D instruments: Proyectos Estratégicos (Strategic Projects) and Proyectos Singulares (Single Projects). Both programmes are aimed at industrial research and require a minimum investment of around €6-8 million

5. favouring the participation of Spanish partners in new European projects by creating programmes for the creation of National Technological Platforms and networks coordinated with European ones.

Finally, the change of Government in Spain in 2004 also modified the political competences as regards R&D activities. In this context, this report has already outlined the creation of the new Department of Education and Science to replace the former Department of Science and Technology. Responsibilities for R&D activities mostly lie with two different Ministries: the Ministry of Education and Science and the Ministry of Industry, Tourism and Trade. In March 2005, the Spanish Government published the framework for action and management within the National R&D Plan in areas where research is applied. This document includes the distribution of competences between these two Ministries (BOE nº 67. ORDEN PRE/690/2005 18 DE MARZO)


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Finally, in order to increase the number of innovative enterprises and their contribution to total R&D investments, a new fiscal environment was created in 2003, with greater deductions and less bureaucracy. This law contains certain weakness related to the differentiation and further validation of research and innovation activities. A Royal Decree was published to solve this problem (Real Decreto Legislativo 4/2004, artículo 35). Although fiscal activities are determined by the Ministry of Finance and the Ministry of Industry, the R&D Activities Evaluation Office (Oficina de Evaluación y Calificación de las actividades de R+D+i) is responsible for the validation of R&D activities. An analysis published by the National Statistical Institute (www.ine.es) shows recent trends in national innovation performance (data for 2003) 1 In 2003, internal expenditure in Spain on scientific research and technological development

accounted for 1.03% of GDP, thus rising above the 1% mark for the first time. However, in spite of a 10.7% growth in on R+D expenditure compared to 2002, the Spanish level of expenditure is still well below the EU-25 average of 1.93%.

2 A total of 134,258 people work in the areas of R&D and innovation in Spain, corresponding to 0.73% of the active population. Researchers account for 0.45% of the active population.

3 R&D activities are financed by the private sector (49.6%), public administration (39.1%) foreign capital (6.8%) and higher education (4.5%).

4 84% of Spanish companies with ten or more employees had internet access in 2003, four percentage points less than the average of the former EU-15. Spain has made a lot of progress in two years: in 2001, only 67% of companies had internet access.

5 The percentage of Spanish households with Internet access was lower than the European Union average. 25% of Spanish households were connected to the internet in 2003.

2.1.3. Policy events & policy debates The main policy points debated in this period relate to the new fiscal environment, the competences of Ministries in R&D matters and the definition of new instruments to increase business involvement in the Spanish R&D system. This report has already explained the separation of competences (and budgets) between the Ministry of Education and Science and the Ministry of Industry, due to the change of Government in March 2004. Up until March 2004, competences in R&D activities were held by the Ministry of Science and Technology. Following the change of Government, two different Ministries have been assigned responsibilities in R&D matters: the Ministry of Industry and the Ministry of Education and Science. There continues to be a significant gap in Spain between “Scientific Research” (carried out by public bodies) and “Technological Research” (carried out by enterprises, Technological Centres, etc.) – in spite of efforts by the former Ministry of Science and Technology to rectify this situation. . Accordingly, it would seem that the best strategy would be to separate the two kinds of research and to develop specific measures for the collaboration between Public Bodies and Business. A call of the Ministry of the Presidency in March 2005 (Official State Gazette (BOE) 67). ORDEN PRE/690/2005 18 DE MARZO) defined the general lines of R&D competence for each Ministry. Later, in April 2005, each Ministry published its own calls (BOE 95 ORDEN ITC/1038/2005 14 April and BOE 88 ORDEN 1 abril de 2005) and the lines of cooperation between public R&D bodies and business were defined. The calls are mainly distinguished from one another by the lines of R&D activities they refer to, but possible differences were not considered (for example, the differences between basic R&D and applied R&D, or between research and development projects). In both cases, all types of projects can be supported if they comply with R&D priorities and if the proportion of the budget allocated to each type of partner (public R&D body and enterprises) is approved. As regards the new fiscal situation, the discussion focused on the development of new tools to support project analysis. The main problems were how to evaluate the R&D characteristics or the innovative nature of a project and how to report the results. Although fiscal activities fall within the competences of the Finance Ministry, the participation of the Industry Ministry was essential in order to solve these weaknesses. Royal Decree 4/2004, article 35, establishes the Industry Ministry’s R&D Activities


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Evaluation and Qualification Office as the national entity for the evaluation of the nature of R&D projects. New instruments aimed at increasing corporate involvement in the Spanish R&D system were also defined in 2004. These instruments (Proyectos Estratégicos and Proyectos Singulares) are supported by the Education and Science Ministry. They both focus on industrial research and require a minimum investment of around €6-8 million One of the most important economic threats detected in 2004 was the declining importance of the Spanish textile industry, due to the demise of customs duties in the world-wide textile market in January 2005. This may result in a strong decline in the number of jobs in the textile sector in Spain. The Spanish textile sector (one of the biggest ones in Europe) has faced strong facing competition from China, India and Pakistan ever since the remaining barriers to free trade were removed in 2004. Six years ago, Spain exported textiles worth €559 million to China. In 2004, Spain bought textiles with €1,314 from China, 24.8% more than in 2003. Since 2001, 36,000 people have lost their jobs in Spain’s textile industry 10% of the companies in the sector have disappeared. Table 11: Textile balance between China and Spain (Thousands €)

Increase 2004 -2003 2004 2003

Import Export Deficit Import Export Deficit Import Export Deficit

Thread 14.9% 26.1% 14.3% 14,664 764 -13,900 12,764 606 -12,158

Woven material 25.0% -3.1% 27.7% 107,955 7,179 -100,776 86,338 7,412 -78,926

Special woven material

21.8% 98.7% 19.3% 48,227 2,424 -45,803 39,600 1,220 -38,380

Knitted articles 32.5% 57.4% 32.4% 421,759 1,514 -420,245 318,343 962 -317,381

Article of clothing

18.8% 65.5% 18.6% 617,895 2,741 -615,154 520,185 1,656 -518,529

Home clothes 38.9% 45.0% 38.8% 68,451 248 -68,203 49,295 171 -49,124

Other textile articles

32.0% 1260.5% 30.0% 34,919 585 -34,334 26,453 43 -26,410

Total 24.8% 28.0% 24.7% 1,313,870 15,455 -1,298,415 1,052,978 12,070 -1,040,908Source: Cytic In December 2004, the Industry Ministry and the Spanish inter-textile Council agreed to explore new lines of action to help the Spanish textile Industry cope with this new, unfavourable situation (www.aitpa.es). Negotiations with the European Commission are also on-going. The policy debate continues and new measures are expected in the sector.

2.1.4. Key developments in innovation policy The TrendChart policy monitoring exercise tracks developments in innovation policy, not only at the level of policy definition and overall objectives as discussed in the previous sections, but also by compiling analytical information on specific innovation policy measures (IPM). The TrendChart innovation policy database currently contains over 1100 IPM containing the measures implemented in 32 European countries (all countries covered by the TrendChart except Liechtenstein). An innovation policy measure is defined broadly as including any public policy initiative that may have a direct or indirect impact on the innovation process within the enterprise sector. The TrendChart IPM fiche tends to fall into one of the follow categories: • Financial support – State Aid to businesses in the form of grants, loans, etc. (e.g. grants for

product development); • Funding of innovation programmes or projects aimed at groups of innovation stakeholders with

the objective of improving cooperation and collaboration and thereby the functioning of the innovation system (e.g. cluster).


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• Measures taken to improve, disseminate or develop knowledge regarding the specific aspects of national innovation systems (e.g. sectoral or regional strategies, prediction exercises, etc.) geared towards innovation activities

• Actions to improve institutional functioning (legal acts, regulations) affecting innovation processes and performance (e.g. intellectual property rights, financial markets, business set-up;

• Funding of innovation infrastructure and intermediaries such as innovation centres, incubators, etc. Preserving funding for infrastructure innovation and intermediaries (innovation centres, incubators, etc.)

This section of the report describes in more detail the current mixed policy adopted in Spain in terms of political priorities and the human and financial resources allocated in each of these broad types of measures. Further details on the specific innovation policy measures can be found in annex 2 and via the TrendChart website.

2.1.4.1. Policy measures in favour of innovation The main changes in the National mixed policy have already been explained in this Chapter [Appraisal of the Governance System (section 1.2)]. Changes in the Spanish Government have affected R&D policy, although the framework of activities has been preserved. In accordance with government information, the R&D budget was increased in 2004. The new Spanish Government supports human resource research, to favour the incorporation of young researchers into Spanish Industry. This measure aims to face up to a large problem occurring in Spain in recent years: the difficulty for senior researchers to return to Spain after finishing grant programmes abroad. In this regard, the main programmes aiming at giving support to the engagement of researchers by Spanish businesses and Research Centres have been maintained. These programmes were included in the National R&D Plan developed by the previous Spanish Government. The new Government has created a programme related to the support of R&D Human Resources. This programme, called Programa 13, was created in February 2005 and is designed to support the engagement of senior researchers in National Research Institutions. Furthermore, the INFO XXI strategic initiative is no longer operative. INFO XXI was a strategic initiative of the Spanish Government aimed at implementing an Information Society in Spain, so that all citizens and businesses could take part in its development and take advantage of its potential to improve social cohesion, quality of life and work and economic growth. The objectives of the initiative were to ensure that all citizens get access to information technologies by providing the appropriate infrastructures and legal framework to help create the ‘Information society’, the development of e-commerce and Spanish companies in the global marketplace. AVANZA is the new programme that replaces this strategic initiative. The new programme was announced by the President of the Government in June. The Education and Science Ministry is working on the definition of new R&D Platforms in relation to new R&D instruments, (see Policy Information Items). This instrument will co-finance the creation of European Platforms and the Spanish Corporate and Research Group’s participation in other regions. Other regional initiatives support the same objectives in different Spanish regions. These initiatives are discussed in chapter 2.1.4.2 of this report.


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Table 12: New and modified Innovation Policy Measures over the past 12 months IPM No.

Title Category addressed Organisation responsible

Degree of novelty (modified / new) since Sept. 2004

Human Resources research support

1.2 Education and Science Ministry

modified

New R&D Instruments III.2 III.4

Education and Science Ministry and Industry Ministry

New

INFO XXI I IV.1

Industry Ministry Modified Replaced by the AVANZA Program

National Platforms II III.2 III.4 IV.1

Education and Science Ministry and Industry Ministry.

New

2.1.4.2. Developments in regional innovation policies A first example of the development in regional innovation policies has recently been created in the region of Castilla y Leon, where a regional service supporting the management of fiscal benefits for companies has been created. External specialists work closely with companies using the service. They provide help in order to classify, manage and report on R&D activities. The initiative aims at solving the problems encountered during the previous tax period (see above). Basically, the main difficulties were related with reporting methods and project classification in R&D or innovation (tax benefits are different in each case). Although the national Government set up the R&D Activities, Evaluation and Qualification Office, Spanish companies suffered from difficulties in benefit management due to the bureaucratic burden. The aim of the regional initiative is to make company procedures easier, by hiring specialised human resources to manage their R&D activities. This initiative is co-financed by the regional government and the European Regional Development Fund (ERDF). On the other hand, one of the aims of most Spanish regional governments is to have businesses and research groups participate in European R&D programmes. The region of Madrid is currently working on a regional tender for the support of regional networks. The main idea is that the supported regional networks may lead to the creation of national and/or European platforms and may be able to generate national and/or European funding. Cooperation with other regional initiatives is also considered. The initiative is supported by all regional funds. The first tender will be published in June 2005. It is expected that the overall budget will be around €4 million and that the tender will cover a period of 3-4 years. Regional government support will be around €1 million. The projects approved will receive innovation service support from the Regional Government, such as the technology surveillance service, technology transfer support, creation of innovative companies, etc.

2.2. Is policy effective in improving innovation performance?

2.2.1. Policy responses to identified challenges The National Plan for Scientific Research and Technological Development was established by Law 13/1986 on the Promotion and General Coordination of Scientific and Technical Research. It aims to stimulate and generally coordinate Scientific and Technological Research in the public sector.


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The 2004-2007 National R&D and innovation Plan marks a new step forward in planning actions financed by the national Budgets. The Plan focuses on optimising available resources by strengthening the cooperation and coordination with the Autonomous Communities (Spanish regional governments). Furthermore, the Plan puts in place inter-ministerial coordination measures to enhance the management of financial instruments and to stimulate and foster R&D and innovation activities. The programme has the ambitious, but realistic aim of increasing RTD expenditure to 1.22 percent of GDP in 2005 and 1.4 percent in 2007. The innovation budget will exceed 2.1 percent of GDP in 2005 and 2.5 percent in 2007. The programme shows the current Government’s intention to increase RTD expenditure by 20% compared to the levels of 2003: €4,800 million per year instead of €4,000 million per year. The majority of national R&D activities have only begun recently, so there is no data on their efficiency so far. However, public investment in the development of knowledge alone is not sufficient. The interaction of all social actors is required. Business participation is one of the most important aspects points of the programme. It is estimated that the private sector will contribute more than 56% of the total RTD budget in 2005 and around 60% of the total budget by the end of the programme. In this regard, the other main objective is to promote the participation of companies in R&D activities. Two main measures have been added and specific programmes for R&D activities in companies have been defined. The total budget assigned to this programme is around €100 million. Tenders will close next June, so no results are available yet. The new tax environment has also favoured the development of corporate R&D activities. Although these new measures were already up and running in 2004, no good results were obtained, mainly because most companies found it difficulties to manage and report on their R&D results. In this context, a general work procedure was developed in 2005, aimed at guaranteeing the validity of the reports. The programme is also very ambitious in terms of the qualitative and quantitative improvement of human resources. This is considered an essential tool to raise the level of science in Spain. Initiatives focusing on the incorporation of young researchers in the labour market are not only maintained but reinforced. New programmes supporting the engagement of senior researchers in National Research Institutions have also been created. The budget available for this programme is around €120 million. However, different regional actors have complained about a lack of a common strategic framework binding the central administration and the Autonomous Communities. This is the main problem for the success of a National Science and Technology System. It should be kept in mind that the level of R&D expenditure is not the only – and possibly not even the most important – issue that needs to be addressed in order to achieve a convergence of science and technology in Spain 5. Table 13: Innovation challenges and policy responses Identified challenge Measures for meeting the challenge 1. Increasing the participation of Spanish business in

R&D activities New programmes aimed at the development of R&D projects in large companies. Budget around €100 million

2. Increasing the participation of Spanish business in R&D activities

New tax environment and procedure development aimed at simplifying the reporting of activities.

3. Supporting young researchers Specific inclusion of young researchers in the labour markets

4. Supporting senior researchers to return to Spain after finishing their grant programmes abroad.

Specific programmes to engage senior researchers in National Research Institutions.

5. Greater participation of Spanish entities in EU-designed programmes

Support for the creation of national R&D platforms

5 La territorialización de la ciencia y la tecnología. Alfonso González Hermoso de Mendoza. Marzo 2002; Revista de Economía Industrial. Ministerio de Industria Turismo y Comercio. Nº 354 2003


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2.2.2. Progress towards policy objectives and targets In February 2005, the new Spanish Government published a plan to strengthen the Spanish Economy, aimed at establishing new measures in order to meet the Lisbon targets. The Ministry of Economy is in charge of informing about the measures (www.meh.es). A Royal Decree-Law establishing urgent measures to boost the productivity was published in March 2005 (Real Decreto Ley 5/2005 de 11 de marzo de reformas urgentes para el impulso de la productividad) The Spanish government has defined three main axes to define the economic measures aimed at reaching the Lisbon Objectives: 1. Increased productivity, involving increases in employment and salaries, and an improvement in

corporate competitiveness. 2. Deregulation of the economy, giving priority to expenditure on education, research and

infrastructures 3. Budget stability, allowing for the design of more flexible tax policies, in response to current

economic conditions. According to the conclusions of the Industry Ministry, Spain’s economic growth is based on three main factors, which are not, however, sustainable: a population increase, employment rates and the number of hours worked). Furthermore, although the number of worked hours in Spain is higher than the European average, Spanish productivity is 20% lower in Europe. Factors such as difficulties in implementing technological changes or the pressures of international competition have a negative impact on efforts to improve productivity. Accordingly, one of the main deficiencies in Spain is the low level of development of the innovation system. The Government considers that the solution lies not only in increased R&D and education resources but also in strengthening the relationship between the different actors involved in science and technology (universities, businesses and public administrations). Consequently, the following lines of action were proposed: 1. increase investment in public and private production, i.e., to increase Spanish technological

capital and infrastructures (in number and quality) 2. increase public expenditure on education (currently only 74% of the European average) and to

reduce the temporality rate (currently around double the European rate) 3. improve the National Innovation System: the percentage of innovative companies is currently

one of the lowest in Europe 4. develop risk capital markets 5. encourage a better business environment making it easier to set up new companies These lines of action were taken into account during the design of the 2005 national budget and, consequently, civil R&D expenditure has increased by 25% and education by 7%. One of the priorities defined by the Industry Ministry for 2005 is to reach agreements with all social actors involved in the R&D and innovation process (business, universities, research centres and trade unions) in order to reach a maximum level of consensus. On the other hand, the Ministry modified the structure of the other national support activities that exist for SMEs: returnable credits dependant on the Industry Ministry. Experience has shown that these support activities were scarcely used by companies due to the complexity of the associated bureaucratic process. Furthermore, the bank references required from each participating company by the previous support structures were not in line with the usual financial methods used by companies. A new credit line for supporting R&D activities in SMEs was set up in late 2004, with a budget of €200 million and a simpler bureaucratic process.


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A risk capital fund was also created, with a budget of around €100 million, intended to allow the administration to participate in R&D projects requiring seed capital. Finally, as regards tax benefits, a new tool for facilitating the reporting of results was also developed. This new tool is described in the chapter Good Practice in Innovation Governance of this report. The application of these objectives addressed the weaknesses shown in the table of EIS indicators very efficiently because they support factors such as R+D in businesses or risk and seed capital. The Spanish Innovation System must deal with considerable challenges to reach the levels of the more advanced European Union countries. Indeed, the recent enlargement of the European Union means that R&D expenditure must be increased very rapidly to reach the 3% mark set by the Lisbon strategy. Another aspect that requires substantial simplification are the bureaucratic burdens Spanish companies have to face when participating in an R&D related activity. Given the large number of SMEs in Spain, there are many companies who do not have sufficient resources to complete the bureaucratic process. The high level of bureaucracy affects both project development and R&D tax-related matters.

2.2.3. Appraisal of innovation measures Nowadays there is a greater public awareness about the importance of both the state and business in innovation policies. This evolution results in a greater availability of public funds (this trend is more remarkable than the market demand for innovation). However, Spain’s innovation system is hampered by structural problems: Insufficient dedication of corporate resources to the innovation process, inadequate cooperation between companies, limited multidisciplinary projects and limited support for the development of emergent technologies. Another problem in the national innovation system is the relationship between the public and private sectors in the R&D field. In the area of R&D, the public sector has a huge and excellent research capacity compared to the private sector, which cannot take advantage of innovation or competitiveness. The public system is financed with only 7.5% of entrepreneurial projects. Public research output is also considerable: the public Spanish research sector accounts for 2.8% of scientific publications world-wide. However, this increase does go hand-in-hand with technological and research development. Regarding financing, research developed in private centres can usually rely on better equipment. This is explained by the fact that basic research carried out in public centres does not require as much capital support as application research. However, this different approach to public and corporate research also leads to a limited communication between these two axes of the Spanish innovation system. Finally, although Spanish SMEs innovate less than SMEs in the rest of the EU, Spain’s large companies follow the average European pattern. Perhaps the most interesting result is that, while 7% of European companies claim to innovate in processes, the share of Spanish companies doing so is 10%. Spanish companies are more prepared to change productive technology to innovate with new designs and products. The main motivation behind this relative concentration on innovation (according to survey results) is to increase production capacity. The fact that those Spanish companies are taking advantage of the positive growth differential within the EU to modernise their productive apparatus is instructive. However, the technology is mainly imported. In order to change this situation, the Spanish innovation system will in the next few years have to compete with technologies that can still be obtained abroad, while maintaining the competitive spirit of Spanish companies. Other chapters of this report explain how Spanish R&D policy has undergone numerous changes in recent times, mainly due to the change of Government. Although the Research Framework


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Programme has been maintained, certain changes have taken place with regard to the priorities in order to meet the Lisbon targets. In addition to increased general budgets for R&D, three other aspects are considered fundamental: human resources, corporate support for R&D, and support for cooperation between businesses and research groups. The programme has been slow to get off the ground and the new tendering procedures are only just beginning. Accordingly, there are no indications as yet whether the new measures are viable and meet their objectives. A key aspect to support the participation of Spanish industry in R&D activities involves reducing the amount of administrative bureaucracy. This aspect has been considered in the new Government Plan for the Improvement of Competitiveness (2005), although results on its impact are not yet available. Technology transfer is another important aspect, although it has not been given such a prominent, clear position in the national R&D Plans. This is particularly the case for R&D projects developed in Research Centres. The lack of a connection between researchers and businesses has on many occasions prevented the developments achieved by Research Centres from being applied in the business sector. The new Plan foresees greater support for cooperation activities between businesses and research groups and also favours large projects promoted by companies. These aspects also have to be combined with a greater promotion of innovation culture in the business sector, not only in order to increase their participation in R&D projects, but also to promote patent applications, which will ultimately generate substantial economic advantages for business. Examples from the area of regional policy have also shown that greater coordination between regional and national plans is necessary. This necessity is not clearly reflected clearly in the current National R&D Plan.


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3 Identification of Good Practice

3.1 Good Practice in Innovation Governance This example of good practice relates to the introduction of mechanisms to improve the level of coordination between two key actors in the innovation governance sector.

The Spanish R&D Fiscal Incentive System has been described as one of the most advanced in the world. Spanish companies can reduce their tax burdens by up to 60% of their R&D costs. These tax deductions are compatible with all types of R&D support.

The Tax Incentive Law, passed in 1995 (Ley 43/1995 del 27 de diciembre del Impuesto de Sociedades) has been modified in 2002 and 2003 (ley 53/2002 de 30 de diciembre de Medidas Fiscales, Administrativas y de Orden Social and Ley de Acompañamiento de 31 de diciembre de 2003)

However, the expected company return has not occurred. The main difficulties found in the application of the law were:

• The Financial Affairs Ministry was in charge of defining the law and validating the results reported by companies. There were certain differences between the type of project definitions included in the law and those used in the Frascati Manual.

• The application of the law required a complicated bureaucratic process. • In order to benefit from the law’s provisions, companies needed a human resources specialist

in tax and technological issues. • Project documentation was not available in most cases if the project did not receive support. • Legal insecurity.

As a first measure, the Financial Affairs Ministry (in particular the Directorate-General for Taxation) installed two consulting tools:

• “Linked Enquiry” is a Financial Affairs Ministry service allowing companies to clarify conceptual aspects of their tax return and their application for deductions. Presuming no changes are made to the law, the results of this consultation are binding for the administration.

• “Prior Evaluation” is also a Financial Affairs Ministry service, used when dealing with

quantitative aspects of specific projects (i.e. the service makes a prior valuation of a specific expenditure). The evaluation has to be made before the expenses are incurred.

This enquiry service has two main difficulties: the process is too bureaucratic and the deadlines are very strict. Also, the application of the law requires expert participation in tax issues and technology and R&D project management.

In this light, , it was decided last year to that the Financial Affairs Ministry and the Ministry of Industry should cooperate more closely in order to:

• clarify aspects related to the implementation procedure • define and to put into practice a methodology to make the procedure easier for Spanish

companies.

As a result, a new tool to calculate R&D tax incentives was created. This new tool (called Informes Vinculantes [‘binding reports’]) is provided by the Industry Ministry and was defined by Royal Decree no. 1432/2003. The main objective of this service is to draw up a report to determine which R&D and innovation activities have been taken into consideration and to estimate the cost of each activity. By drawing up a binding report, the Ministry of Industry enables:


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- a classification of R&D and innovation activities in order to seek a Prior Evaluation - the qualification of R&D and innovation activities in order to apply for R&D tax reductions

Intermediate bodies with the capacity to issue certified reports in order to simplify analysis are also to be developed by the Ministry. At present, three such intermediate bodies exist.

This procedure also created a Spanish Project Certification Standard, which is not compulsory, but makes the project validation procedure remarkably swift and responsive.

At the moment there are three accredited intermediate organisms for the application of the Standard: AENOR, AIDIT and the Madrid Chamber of Commerce.

Such reports were first made available in the region of Navarre in 2001 to support regional business activity. Navarre manages its own tax investments and, consequently, business tax incentives in the region.

3.2 Good Practice in Policy Implementation Castilla y Leon was one of the European regions to prepare a Regional Technology Plan, a forerunner of the RIS-RITTS programmes. The strategy prepared by the Plan helped to make the innovation system in Castilla y Leon more dynamic, and the region set up a modern Technology Centre infrastructure and support programmes to help regional businesses introduce innovative processes into their management procedures.

The positive effect of this policy definition method (based on consensus), the partnership principle and the participation of regional actors in a bottom-up process has generated a better innovation culture. The need to maintain the partnership processes (once the Regional Technology Plan had come to an end) was established in a new Regional R&D and innovation strategy, this time financed exclusively with regional resources and drafted using the same bottom-up methodology, involving regional actors.

Although this strategy reflects the substantial innovation progress businesses have made in the main regional industrial zones, it also takes into account the major imbalance between these areas, which are generally urban, and the rural territory as a whole, which is in many cases in danger of desertification, where it is difficult to find sustained business innovation processes.

Accordingly, when Castilla y Leon embarked on its Regional Innovative Action Programme (known as LEGITE), one of the main concerns was to design actions for rural and peripheral zones, to enable companies to offset the location handicap by creating support instruments adapted to their specific needs and characteristics.

This project, expected to last for approximately two years, was proposed in a particularly difficult socio-economic context (peripheral areas of Castilla y Leon):

• Many parts of the region are dominated by rough terrain covering 47,052 square kilometres – which is half of Castilla y Leon and more than the size of Denmark or Belgium. There are many small, scattered villages (917 in total), with major deficiencies in infrastructures as a consequence of their remoteness and low population density.

• Population ageing and population drift are considerable problems. Peripheral areas of Castilla y Leon lost 4.28% of their population between 1996 and 2001, with a population density of only 13.03 inhabitants per square kilometre at the end of the period: less than countries with extensive polar zones such as Finland or Sweden.

Against this background, it was proposed to supplement the new Regional R&D and innovation Strategy (2002-2006) with a Network of Agents for the Promotion of Innovation in Peripheral Areas (RIA Network) created by the Regional Programme of Innovative Actions for Castilla y Leon (LEGITE). The motivation underlying this initiative is to help businesses to be more innovative while at the same time fostering cooperation and the use of existing interface structures (such as Local Development Agents, Local Action Groups in the LEADER Community Initiative or the PRODER Operational programme, etc.).

With the ultimate aim of launching an Agent Network, the initiative intends to give businesses located in the peripheral areas of Castilla y Leon access to innovative techniques and processes by means of in situ cooperation with the interface structures existing in these zones.


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The idea is not to train professionals capable of carrying out this work but to launch a network to work with companies in order to generate specific results that can improve business competitiveness and innovative capability in specific areas.

The programme introduced a new vision of innovation as an efficient tool for territorial integration and structuring, experimenting with the introduction of innovative products and processes in peripheral, isolated and depressed geographical areas, as a catalyst for competitive business development. The idea is, in short, to “cross-breed” innovation and territory, by promoting innovation as a key factor in local development. Avoiding rigid approaches and trying to offer individualised solutions is expected to result in a customised response that is adaptable to the specific situation of each geographical zone.

In this respect, the RIA does not act only as expert body in innovation management, advising businesses and interface agents on the ground in each zone, but also acts as a social stimulator for business networks in these zones by maintaining a proactive attitude designed to encourage businessmen to adopt new patterns of behaviour. This should be done in a climate of consensus and cooperation, avoiding overlap and reinforcing (and making better use of) existing structural potential.

The major difficulty the programme faced was the lack of awareness and the natural mistrust of businessmen who do not have a traditional connection with the usual R&D and innovation circles.

In this context, the success of the project depends directly on the willingness of the interface bodies to cooperate with a strong territorial presence, capable of giving access to the most dynamic businessmen in their area. In the search for this cooperation, a major effort is being made to identify and inform existing interface structures.

This effort is rewarded with a very favourable response which helps the most relevant local, provincial and regional actors to join the project. The downside is the growing difficulty in general work coordination.

Of course it should also be remembered that, in purely administrative terms, managing the programme is a highly complex matter (signing treaties and agreements, recruiting experts, etc.).

Furthermore, as explained above, the project aims to involve the greatest number of interface bodies in the eligible areas (Local Development Agents, Groups in the LEADER rural development initiative, PRODER Operational programme, the General Foundations of Universities in the region, etc.).

Half way through the project, over 170 cooperation agreements have been established as a result of the contacts maintained with these bodies.

The guiding criteria used in identification of the RIA Project were:

• To favour a regional economy based on knowledge and technological innovation, actively integrating businesses in the most underprivileged and least influential zones of the region, in economic terms.

• To spread the message that higher expenditure is not enough to compete in the new economic environment and that companies need to incorporate innovation to processes, products and business management.

• To transform this message into specific innovation projects carried out by local companies and entities in the region’s most underprivileged rural zones, with the aid and participation of the regional Technology Centres and other national and community agents for innovation.

• To create a complementary regional network with existing structures to introduce innovation into all regional businesses, wherever they are located and whatever their sector of activity.

• To obtain information from previous actions in order to create a regionally based action model, applicable in other regions of Europe and in other industrial sectors.

• To build a public-private partnership, by incorporating private initiative through business associations and individual businesses and ensuring the participation of regional, provincial and local public institutions.

• To create synergies with community policies on Research and Development (project start-ups for the 6th Framework Program), the environment, rural development (work with Local Action Groups


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from the LEADER Initiative for rural development and the PRODER Operational Program) and equal opportunities (work with sectors with a tradition of employing women).

In general terms, the innovative character for an Objective 1 Region lies in giving continuity to the means of defining and launching its innovation policy with the process initiated by the Regional Technology Plan, continued under RIS+ and the new Regional R&D and innovation Strategy, and now completed by the Regional Innovative Action Programme. At the macroeconomic level, this continuity has led a significant increase in R&D and innovation activity in Castilla y Leon. The region’s R&D expenditure (in terms of the regional GDP) is now higher than in any other Spanish Objective 1 region and is the fifth highest of all regional R&D expenditure levels in the whole country.

This bottom up, consensus-oriented way of defining innovation policy also highlighted the growing problem of the widening gap that between the increasing participation of urban areas with higher levels of development in regional and national innovation support programmes and the virtual absence of these programmes involving companies and businesses from underprivileged peripheral areas.

If not addressed, this situation could lead to an even stronger territorial imbalance. However, the response to this issue had to take account of a practical problem insofar as the vast majority of innovation policies are defined to respond to the needs of companies located in areas where there are already significant levels of economic activity and which already have a minimum of physical infrastructures and social capital in place. This is by no means the case of the peripheral areas of Castilla y Leon, which is why a suitable policy for supporting innovative activities in businesses in this kind of area had to be developed.

The need to respond to a new kind of problem meant that the global approach of the proposal was in itself innovative, consisting in using innovation promotion instruments as a key factor for the promotion of sustainable local development in isolated geographical areas with serious structural problems (rural population drift and ageing).

The project was a success precisely because it combines this innovative theoretical frame, which in fact entails a genuine shift in the mindsets of the service providers, with a practical spirit aimed at satisfying the real needs of the target public (micro-firms located in the least favoured zones of the region).

In this respect, and despite it being a socio-economic experiment giving priority to qualitative, demonstrable results over purely quantitative ones, early data suggests a very broad and strong business interest in the services on offer. Furthermore, the technological service and innovation support providers (Technology Centres, universities, consultancy firms, etc.) have seen the RIA network as a tool for getting to areas where they have not traditionally been present. They increase the use of this tool in a process that generates its own feedback and that produces more and more innovative activity in the peripheral areas of Castilla y Leon.

Having verified the initial response of local companies and interface agents and the enormous interest generated in the regional R&D and innovation services offer, it is fair to say the experience is very positive and is generating patterns of hitherto unknown behaviour in areas that had previously not been targeted by specific innovation support policies.

In areas where every single small enterprise is vital to prevent the population from moving away from a region that desperately needs to maintain its resources for generating wealth, this can unhesitatingly be described as a great success. The demand for services is so great that, on occasions, measures have to be taken to extend the response capacity of some regional bodies providing technology and innovation support services.

In short, the network’s enormous effectiveness as a tool for local development in isolated, peripheral areas with low levels of business activity is confirmed emphatically.


34

Annex 1: Overview of Innovation Policy Documents Main policy documents concerning innovation policy adopted/published since 2000 Title of document (in English) Date (of

approval, publication, etc.)

Organisation responsible (Ministry, etc.)

Legal status (Law, Government Decision, strategy (white) paper, action plan, etc.)

National Plan for Scientific Research, Technological Development and Innovation 2004-2007. Volume I - Objectives and Structure

2004 Comisión Interministerial de Ciencia y Tecnología

Action Plan

National Plan for Scientific Research, Technological Development and Innovation 2004-2007. Volume II – Priority Areas

2004 Comisión Interministerial de Ciencia y Tecnología

Action Plan

White book: Situation of the Spanish Innovation System in 2003

2004 Cotec Foundation Report

Green book: Situation of the Spanish Innovation System in 2003

2004 Cotec Foundation Report

COTEC Report: Innovation and Technology in Spain

2000 Cotec foundation Report









Law 53/2002 on Administrative and Fiscal Measures

2002 Financial Affairs Ministry Law

Accompaniment to Law 31st December 2003

2003 Financial Affairs Ministry Law

Royal Decree 1432/2003, regulating the emission of motivated reports relative to the fulfilment of scientific and technological requirements of R+D+I projects

2003 Ministry of the Presidency Royal Decree

Plan to boost the economy and increase productivity

2005 Economy Affairs Ministry Government Decision

Royal Decree-Law establishing urgent measures to boost productivity

2005 Ministry of the Presidency Royal Decree


35

Annex 2: Overview of innovation policy measures As part of the European TrendChart on Innovation, we provide detailed information on policy measures in each country that is collected in an online database which can be consulted via the TrendChart website (www.trendchart.org). The aim of this section is to provide a succinct overview of the detailed information available online for each individual measure. In each of the following sections, the measures contribute to a specific objective of the innovation policy framework used by the TrendChart. These measures are described in more detail. This innovation policy framework has been updated recently to reflect evolutions in our understanding of the scope and nature of innovation policy measures. The table below presents, in chronological order (newest measures at top), the measures currently catalogued in the TrendChart Innovation Policy Measure database. Three aspects are particularly highlighted for each category of measures which will be discussed in the following sections: • The mix of types of instruments (State aid, support for intermediaries/knowledge organisations,

regulatory/legislative, information/strategy processes, etc.) addressing each category of objective of the innovation policy framework;

• Changes in time in the level of support (funding, political priority) • The development over time (notably since 2000) of the number of political measures and recent

adaptations to this period (termination, modification or creation of specific measures).


36

Table A2.1: List of Innovation Policy Measure Fiche in the TrendChart database as of 30 March 2005 IPM Fiche Number

Title of measure Policy Monitoring framework (2005-2007) objective(s) IAP96 Action line

Start Date

End date Status during reported period

Evaluated

ES 50 National Plan for Scientific Research, Technological Development and Innovation 2004-2007/ Plan Nacional de I+D+i 2004-2007

I.1. Development of a strategic medium-to-long term vision of innovation challenges and innovation potential I.2. Increase understanding of the nature of drivers and barriers of innovation activity in enterprises with a view to informing the policy-making process I.3. Improve the effectiveness of the policy-cycle in order to increase the impact of public intervention activity and outputs in enterprises II.4. Increase rates of expenditure on research and technological innovation in enterprises II.5. Encourage the uptake of strategic technologies, notably ICT III.2. Facilitate the acquisition and transfer of knowledge ad technologies to enterprises, encouraging in particular cross-border initiatives III.3. Increase the availability, range and quality of specialised services to enterprises in order to increase the effectiveness of their in-house innovation activities III.4. Increase the availability of innovative infrastructures to facilitate knowledge exchange and product/service development by enterprises III.5. Ensuring that the future skills base in the region/sector/country will correspond to the innovation needs of enterprises III.6. Facilitate the development of collaboration between enterprises and other actors with a view to joint innovation activities and knowledge exchange IV.1. Increase the number of new innovation intensive enterprises created and their survival IV.2. Provide adequate infrastructure to new technology based firms to facilitate their survival and growth IV.3. Favouring the entry of innovative enterprises and business models to sectoral, regional or national markets IV.4. Increase the availability of private sector innovation financing to enterprises IV.6. Promote adequate support to enterprises aimed at new and developing markets V.1. Upgrading innovation related skills and diffusing new technologies in enterprises V.2. Increase rates of non-technological innovation in enterprises V.3. Favouring the protection and optimising the exploitation of intellectual property as a driver for innovation V.4. Increase the rate of commercialisation/marketing of the results of innovation activity in enterprises

I. II. III. IV.1.

2004 2007 New Yes


37

ES 49 Aids for the Promotion of the Technical Research for Singular Scientific and Technological Projects with Strategic Nature./ Apoyo al Fomento de la Investigación Técnica para Proyectos Científico-Tecnológicos singulares y estratégicos.

I.1. Development of a strategic medium-to-long term vision of innovation challenges and innovation potential II.4. Increase rates of expenditure on research and technological innovation in enterprises III.2. Facilitate the acquisition and transfer of knowledge ad technologies to enterprises, encouraging in particular cross-border initiatives IV.2. Provide adequate infrastructure to new technology based firms to facilitate their survival and growth IV.4. Increase the availability of private sector innovation financing to enterprises IV.5. Optimising the legal/regulatory framework for the development of private innovation financing V.4. Increase the rate of commercialisation/marketing of the results of innovation activity in enterprises

II.5. III.1. III.2. III.4.

2005 2008 New No

ES 45 National Programme of international co-operation on Science and Technology (Programa Nacional de cooperacion internacional en Ciencia y Tecnologia)

III.1. Facilitate access of enterprises to skilled personnel III.2. Facilitate the acquisition and transfer of knowledge ad technologies to enterprises, encouraging in particular cross-border initiatives III.4. Increase the availability of innovative infrastructures to facilitate knowledge exchange and product/service development by enterprises

I.2. III.4.

2004 2007 Modified No

ES 44 National Program of promotion of Scientific and technological Culture (Programa Nacional de promocion de la cultura cientifica y tecnologica)

I.3. Improve the effectiveness of the policy-cycle in order to increase the impact of public intervention activity and outputs in enterprises

I.3. 2004 2007 Modified No

ES 43 Juan de la Cierva Programme (Programa Juan de la Cierva)

II.4. Increase rates of expenditure on research and technological innovation in enterprises III.1. Facilitate access of enterprises to skilled personnel III.3. Increase the availability, range and quality of specialised services to enterprises in order to increase the effectiveness of their in-house innovation activities IV.2. Provide adequate infrastructure to new technology based firms to facilitate their survival and growth V.1. Upgrading innovation related skills and diffusing new technologies in enterprises V.4. Increase the rate of commercialisation/marketing of the results of innovation activity in enterprises

I.2. III.2. III.5.



38

ES 42 Digital Cities I.2. Increase understanding of the nature of drivers and barriers of innovation activity in enterprises with a view to informing the policy-making process I.3. Improve the effectiveness of the policy-cycle in order to increase the impact of public intervention activity and outputs in enterprises I.4. Encourage mutual policy learning and networking between policy-making at regional, national and EU levels II.1. Enhancing the role of public procurement and standardisation as drivers of new innovative products services by enterprises II.5. Encourage the uptake of strategic technologies, notably ICT III.3. Increase the availability, range and quality of specialised services to enterprises in order to increase the effectiveness of their in-house innovation activities III.5. Ensuring that the future skills base in the region/sector/country will correspond to the innovation needs of enterprises V.1. Upgrading innovation related skills and diffusing new technologies in enterprises

I.1. I.3. I.5. II.3. III.5.

Ongoing No

ES 41 Espana.es (ESPANA.ES)

I.3. Improve the effectiveness of the policy-cycle in order to increase the impact of public intervention activity and outputs in enterprises II.1. Enhancing the role of public procurement and standardisation as drivers of new innovative products services by enterprises II.4. Increase rates of expenditure on research and technological innovation in enterprises II.5. Encourage the uptake of strategic technologies, notably ICT III.3. Increase the availability, range and quality of specialised services to enterprises in order to increase the effectiveness of their in-house innovation activities III.5. Ensuring that the future skills base in the region/sector/country will correspond to the innovation needs of enterprises IV.4. Increase the availability of private sector innovation financing to enterprises IV.5. Optimising the legal/regulatory framework for the development of private innovation financing V.1. Upgrading innovation related skills and diffusing new technologies in enterprises V.4. Increase the rate of commercialisation/marketing of the results of innovation activity in enterprises

I.1. I.3. II.3. II.5. III.5.

2003 2005 Ongoing Yes

ES 40 Initiative to recruit personnel for non profit Technology Transfer Offices

III.2. Facilitate the acquisition and transfer of knowledge ad technologies to enterprises, encouraging in particular cross-border initiatives

III.4. Ongoing No

ES 39 Public Venture Capital to NTBF s by ENISA participation

II.4. Increase rates of expenditure on research and technological innovation in enterprises IV.1. Increase the number of new innovation intensive enterprises created and their survival IV.2. Provide adequate infrastructure to new technology based firms to facilitate their survival and growth IV.4. Increase the availability of private sector innovation financing to enterprises IV.5. Optimising the legal/regulatory framework for the development of private innovation financing V.4. Increase the rate of commercialisation/marketing of the results of innovation activity in enterprises

II.5. III.3.

2001 N/A Modified No


39

ES 38 Thematic networks about co-operative Research in Life sciences and Biotechnology

II.4. Increase rates of expenditure on research and technological innovation in enterprises III.2. Facilitate the acquisition and transfer of knowledge ad technologies to enterprises, encouraging in particular cross-border initiatives III.6. Facilitate the development of collaboration between enterprises and other actors with a view to joint innovation activities and knowledge exchange IV.4. Increase the availability of private sector innovation financing to enterprises IV.5. Optimising the legal/regulatory framework for the development of private innovation financing V.4. Increase the rate of commercialisation/marketing of the results of innovation activity in enterprises

I.6 II.5. III.4.

2002 2003 Ongoing No

ES 37 ARQUIMEDES - Introduction to knowledge generation (Certamen Universitario ARQUIMEDES de introducción a la sociedad del conocimiento)

I.3. Improve the effectiveness of the policy-cycle in order to increase the impact of public intervention activity and outputs in enterprises III.5. Ensuring that the future skills base in the region/sector/country will correspond to the innovation needs of enterprises V.1. Upgrading innovation related skills and diffusing new technologies in enterprises

I.1. I.3.

2002 No End Date Planned

Ongoing No

ES 36 PISTA - Programme to promote and identify new services in advanced Telecomumunications (PISTA-Programa de promocion e Identificacion de Servicios Emergentes en Telecomunicaciones Avanzadas)

I.2. Increase understanding of the nature of drivers and barriers of innovation activity in enterprises with a view to informing the policy-making process I.4. Encourage mutual policy learning and networking between policy-making at regional, national and EU levels II.1. Enhancing the role of public procurement and standardisation as drivers of new innovative products services by enterprises

I.5. II.3.

Before 1995

No End Date Planned

Ongoing No

ES 35 FORINTEL - Telecommunication training programme (FORINTEL - Programa de formacion en telecomunicaciones)

III.5. Ensuring that the future skills base in the region/sector/country will correspond to the innovation needs of enterprises V.1. Upgrading innovation related skills and diffusing new technologies in enterprises

I.1. 2001 2006 Ongoing Yes

ES 34 Scientific infrastructure projects

I.1. Development of a strategic medium-to-long term vision of innovation challenges and innovation potential III.6. Facilitate the development of collaboration between enterprises and other actors with a view to joint innovation activities and knowledge exchange

I.6 III.1.



40

ES 33 PROFARMA II-Promotion the scientific Research, the technological development and the innovation in pharmaceutical and veterinary industry.

II.4. Increase rates of expenditure on research and technological innovation in enterprises IV.2. Provide adequate infrastructure to new technology based firms to facilitate their survival and growth V.4. Increase the rate of commercialisation/marketing of the results of innovation activity in enterprises

III.2. 2002 No End Date Planned

Ongoing No

ES 32 Support measure to venture capital for New Technology-based firms (apoyo a la capitalización de empresas de base tecnológica)

II.4. Increase rates of expenditure on research and technological innovation in enterprises IV.1. Increase the number of new innovation intensive enterprises created and their survival IV.2. Provide adequate infrastructure to new technology based firms to facilitate their survival and growth IV.4. Increase the availability of private sector innovation financing to enterprises IV.5. Optimising the legal/regulatory framework for the development of private innovation financing V.4. Increase the rate of commercialisation/marketing of the results of innovation activity in enterprises

II.5. III.3.


ES 31 Grants for Diffusion and Scientific and Technological Dissemination Activities


I.3. 2002 2003 Ongoing No

ES 30 Torres Quevedo Programme to support the placement of doctorates and skilled personal in enterprises (Programa Torres Quevedo para la incorporacion de doctores y tecn-logos a empresas)

III.1. Facilitate access of enterprises to skilled personnel 2001 2004 Modified No

ES 29 NEOTEC: Support to creation and development of NTBFs (NEOTEC: apoyo a la creacion de nuevas empresas de base tecnologica)

IV.1. Increase the number of new innovation intensive enterprises created and their survival IV.2. Provide adequate infrastructure to new technology based firms to facilitate their survival and growth


Ongoing No

ES 28 Integrated projects to research in Genomics and Proteomics (Proyectos Integrados de Investigación en el ambito de la Genomica y Proteomica)

I.1. Development of a strategic medium-to-long term vision of innovation challenges and innovation potential III.6. Facilitate the development of collaboration between enterprises and other actors with a view to joint innovation activities and knowledge exchange

I.6 III.1.



41

ES 27 Plan for the strengthening and competitiveness of SMEs (PYME) ( Plan de consolidación y competitividad de la Pequeña y Mediana Empresa)

II.4. Increase rates of expenditure on research and technological innovation in enterprises II.5. Encourage the uptake of strategic technologies, notably ICT III.3. Increase the availability, range and quality of specialised services to enterprises in order to increase the effectiveness of their in-house innovation activities III.6. Facilitate the development of collaboration between enterprises and other actors with a view to joint innovation activities and knowledge exchange IV.4. Increase the availability of private sector innovation financing to enterprises IV.5. Optimising the legal/regulatory framework for the development of private innovation financing V.1. Upgrading innovation related skills and diffusing new technologies in enterprises V.2. Increase rates of non-technological innovation in enterprises V.4. Increase the rate of commercialisation/marketing of the results of innovation activity in enterprises

I.4. I.6 II.5. III.5.


ES 26 Grants for Diffusion Activities related to the Policy and Competences of the Ministry of Science and Technology / Ayudas para Actividades de Difusion relacionadas con la Politica y Competencias del ministerio de Ciencia y Tecnologia


I.3. March 2002

December 31, 2002.

Ongoing No

ES 25 Ramon y Cajal Programme (RyC) (Programa Ramon y Cajal)

III.1. Facilitate access of enterprises to skilled personnel I.2. 2001 2006 Ongoing No

ES 24 PIIC-Projects for industrial and concerted research /Proyectos de investigación industrial concertada

II.4. Increase rates of expenditure on research and technological innovation in enterprises III.2. Facilitate the acquisition and transfer of knowledge ad technologies to enterprises, encouraging in particular cross-border initiatives IV.2. Provide adequate infrastructure to new technology based firms to facilitate their survival and growth IV.4. Increase the availability of private sector innovation financing to enterprises IV.5. Optimising the legal/regulatory framework for the development of private innovation financing V.4. Increase the rate of commercialisation/marketing of the results of innovation activity in enterprises

II.5. III.2. III.4.

04/2001 No End Date Planned

Ongoing No

ES 23 Credits for activities developed in Scientific and Technological Parks (Ayudas para actividades realizadas en Parques cientí-ficos y Tecnológicos)

II.4. Increase rates of expenditure on research and technological innovation in enterprises III.2. Facilitate the acquisition and transfer of knowledge ad technologies to enterprises, encouraging in particular cross-border initiatives IV.4. Increase the availability of private sector innovation financing to enterprises IV.5. Optimising the legal/regulatory framework for the development of private innovation financing V.4. Increase the rate of commercialisation/marketing of the results of innovation activity in enterprises

II.5. III.4.



42

ES 22 ARTEPYME II: Subsidies for projects of advanced telecommunication services for SMEs (ARTEPYME II: Subvenciones para proyectos de servicios avanzados de telecomunicaciones para PYMES)

II.4. Increase rates of expenditure on research and technological innovation in enterprises II.5. Encourage the uptake of strategic technologies, notably ICT III.3. Increase the availability, range and quality of specialised services to enterprises in order to increase the effectiveness of their in-house innovation activities IV.4. Increase the availability of private sector innovation financing to enterprises IV.5. Optimising the legal/regulatory framework for the development of private innovation financing V.1. Upgrading innovation related skills and diffusing new technologies in enterprises V.4. Increase the rate of commercialisation/marketing of the results of innovation activity in enterprises

II.5. III.5.

2000 2006 Ongoing Yes

ES 21 Special Actions of OCYT (Acciones Especiales de la Oficina de Ciencia y Tecnologí-a, OCYT).

I.2. Increase understanding of the nature of drivers and barriers of innovation activity in enterprises with a view to informing the policy-making process I.3. Improve the effectiveness of the policy-cycle in order to increase the impact of public intervention activity and outputs in enterprises I.4. Encourage mutual policy learning and networking between policy-making at regional, national and EU levels III.6. Facilitate the development of collaboration between enterprises and other actors with a view to joint innovation activities and knowledge exchange

I.3. I.5. I.6


ES 20 Special Actions of National Programmes (Acciones Especiales en el marco de los Programas Nacionales)

III.2. Facilitate the acquisition and transfer of knowledge ad technologies to enterprises, encouraging in particular cross-border initiatives III.6. Facilitate the development of collaboration between enterprises and other actors with a view to joint innovation activities and knowledge exchange

I.6 III.4.


ES 19 INFO XXI. The Inform@tion society for all (La Sociedad de la Inform@ción para todos)

I.3. Improve the effectiveness of the policy-cycle in order to increase the impact of public intervention activity and outputs in enterprises II.5. Encourage the uptake of strategic technologies, notably ICT III.3. Increase the availability, range and quality of specialised services to enterprises in order to increase the effectiveness of their in-house innovation activities V.1. Upgrading innovation related skills and diffusing new technologies in enterprises V.2. Increase rates of non-technological innovation in enterprises

I.3. I.4. III.5.


ES 18 Fiscal incentives for R&D&I activities (Incentivos Fiscales para actividades de I+D+I)

II.4. Increase rates of expenditure on research and technological innovation in enterprises III.1. Facilitate access of enterprises to skilled personnel III.2. Facilitate the acquisition and transfer of knowledge ad technologies to enterprises, encouraging in particular cross-border initiatives IV.1. Increase the number of new innovation intensive enterprises created and their survival IV.2. Provide adequate infrastructure to new technology based firms to facilitate their survival and growth V.4. Increase the rate of commercialisation/marketing of the results of innovation activity in enterprises

II.6. III.2. III.4.

2000 on-going Ongoing No


43

ES 17 PROFIT - Programme to Encourage Technical Research (PROFIT) (Programa de Fomento de la Investigación Técnica)


II.5. III.2. III.4.


ES 16 National Programme of Environment: R&D and Innovation Projects / Programa Nacional de Medio Ambiente: Proyectos de I+D e Innovación Tecnológica.

II.4. Increase rates of expenditure on research and technological innovation in enterprises II.5. Encourage the uptake of strategic technologies, notably ICT III.2. Facilitate the acquisition and transfer of knowledge ad technologies to enterprises, encouraging in particular cross-border initiatives III.3. Increase the availability, range and quality of specialised services to enterprises in order to increase the effectiveness of their in-house innovation activities IV.2. Provide adequate infrastructure to new technology based firms to facilitate their survival and growth V.1. Upgrading innovation related skills and diffusing new technologies in enterprises V.4. Increase the rate of commercialisation/marketing of the results of innovation activity in enterprises

III.2. III.4. III.5.


ES 15 National Programme of Agrofood Resources and Technologies: Key Action Conservation of the genetic resources / Programa Nacional de Recursos y Tecnologias Agroalimentarias: Accion estrateica Conservacion de los recursos geneticos




ES 14 National Programme of Food / Programa Nacional de Alimentación





44

ES 13 R&D Projects of National Programmes -Applied Research / Proyectos de I+D en el marco de los Programas Nacionales. Proyectos de investigación aplicada


II.5. III.4.


ES 12 R&D Projects of National Programmes. Co-operation projects - P4 Modality / Proyectos de I+D en el marco de los Programas Nacionales. Proyectos en cooperación-Modalidad P4


II.5. III.4.


ES 10 Financial support to the development of non profit Technology Transfer Offices (OTRI s)/ Ayudas para el desarrollo de las Oficinas de Transferencia de Resultados de Investigacién (OTRIS)

III.2. Facilitate the acquisition and transfer of knowledge ad technologies to enterprises, encouraging in particular cross-border initiatives


Modified No

ES 9 Fostering the R&D and the Innovation in Objective 1 and 2 Regions Programme (FEDER Programme) / Programa para el fomento de la I+D y la Innovación en las regiones Objetivo 1 y 2 (programa FEDER)


II.5. III.4.



45

ES 8 Concerted and Co-operative industrial research and development projects/Proyectos Concertados- Cooperativos


II.5. III.2. III.4.

1994 In 2001 replaced by ES 24

Ongoing No

ES 7 PETRI Programme: Projects for Encouraging the Research Results Transfer/ Programa PETRI (Programa de Estimulo a la Transferencia de Resultados de Investigacion)


II.5. III.4.


Ongoing No

ES 6 Initiative of Support of Industrial Technology, Security and Quality (ATYCA Initiative)/Iniciativa de Apoyo a la Tecnologia, la Seguridad y la Calidad Industrial (Iniciativa ATYCA)


II.5. III.2. III.4.


ES 5 SME Initiative for Industrial Development / Networks of Innovation Supporting Interface Organisations/Iniciativa PYME para el desarrollo industrial. Redes de apoyo a la innovación y organismos de interface.

II.4. Increase rates of expenditure on research and technological innovation in enterprises III.2. Facilitate the acquisition and transfer of knowledge ad technologies to enterprises, encouraging in particular cross-border initiatives III.3. Increase the availability, range and quality of specialised services to enterprises in order to increase the effectiveness of their in-house innovation activities IV.4. Increase the availability of private sector innovation financing to enterprises IV.5. Optimising the legal/regulatory framework for the development of private innovation financing V.1. Upgrading innovation related skills and diffusing new technologies in enterprises V.2. Increase rates of non-technological innovation in enterprises V.4. Increase the rate of commercialisation/marketing of the results of innovation activity in enterprises

I.4. II.5. III.5.



46

ES 4 Instituto de Crédito Oficial (ICO) financial facilities for investments aimed at increasing and improving enterprises' technological and innovative components.

II.2. Reducing the administrative and transaction costs for enterprises in fulfilling their legal, administrative, fiscal, etc. obligations II.4. Increase rates of expenditure on research and technological innovation in enterprises IV.4. Increase the availability of private sector innovation financing to enterprises


Modified No

ES 3 SME Initiative for Industrial Development / Financing Programme.

II.4. Increase rates of expenditure on research and technological innovation in enterprises III.6. Facilitate the development of collaboration between enterprises and other actors with a view to joint innovation activities and knowledge exchange IV.2. Provide adequate infrastructure to new technology based firms to facilitate their survival and growth IV.4. Increase the availability of private sector innovation financing to enterprises IV.5. Optimising the legal/regulatory framework for the development of private innovation financing V.4. Increase the rate of commercialisation/marketing of the results of innovation activity in enterprises

I.6 II.5. III.2.

July, 1997

1999 Ongoing No

ES 2 IDE Action to support the placement of doctorates in enterprises / Acción IDE de apoyo a la incorporación de doctorse a empresas

III.1. Facilitate access of enterprises to skilled personnel I.2. 1997 2001 Ongoing No

ES 1 CDTI financial support/ Ayudas CDTI


II.5. III.2. III.4.

1978 continuous, not expected ending

Ongoing No


47

IPM Fiche Number

Title of measure Overview

ES 50 National Plan for Scientific Research, Technological Development and Innovation 2004-2007/ Plan Nacional de I+D+i 2004-2007

This Plan aims to contribute to the generation of knowledge, in order to serve society and improve the welfare-state. The plan is key for maintaining the rate of economic and social growth obtained in recent years, as improvements and advances of an economy must be based on its research, development and innovation as basic elements of a competitive society. In order to obtain this sustained growth, a thorough mid-project review will be carried out in 2005 to energize and push forward the principle objectives. The plan was elaborated by a whole collaboration of all system of Science-Technology-Enterprise-Society (more than 450 experts of universities, public organisms, technological centres and enterprises), including the Autonomous Communities, Ministerial Departments and other councils. The plan attempts to involve all the elements that form the society in one of the key aspects of future economic and social development in Spain.

ES 49 Aids for the Promotion of the Technical Research for Singular Scientific and Technological Projects with Strategic Nature./ Apoyo al Fomento de la Investigación Técnica para Proyectos Científico-Tecnológicos singulares y estratégicos.

The objective of the present call is to regulate the procedure of concession of financial aids, in regime of publicity, objectivity and competitive concurrence, for the accomplishment of singular scientific and technological projects with strategic nature within the framework of the National Programs. Characteristics of the singular scientific and technological projects with strategic nature: The scientific and technological projects with strategic nature have an established configuration in the National Plan of Scientific Research, Development and Technological Innovation in the domain of the strategic operations for the process of thematic focalisation that include a set of interrelated activities of I+D+I that try to reach a common objective. Its technological and scientific component implies the possibility of including generic performances of investigation, technological developments, demonstration of technologies, and diffusion of the results and development of conductive complementary performances to favour the implantation of the results that are obtained. The singularity of these performances can be due to anyone of the following reasons: by its objective, by its configuration, its opportunity, its exposition or the destiny of the results. In a general way, the strategic nature must fit in the global context of science and technology by questions of different nature like: by its environmental benefit, to favour the competitiveness of the productive sector in which it is framed, by national socioeconomic interest or questions related to the evident improvement of the quality of life. Type of projects that can be object of the aids: Projects of industrial investigation. - Previous studies of technical viability to activities of industrial investigation. - Projects of technological development. - Complementary actions of diffusion. Beneficiaries: - Companies - Private centres of investigation and development without profit spirit. - Technological centres - Public Organisms of Investigation. - Other organizations of Public Law with respect to complementary actions of diffusion. - Grouping or association.

ES 45 National Programme of international co-operation on Science and Technology (Programa Nacional de cooperacion internacional en Ciencia y Tecnologia)

Within this programme, there are three modalities of participation: - Complementary actions. These are an instrument with the aim of boosting the participation of Spanish researchers in the international sphere. For this, there are granted both processes of preparation of proposal and extra financing for the development of European and International projects. - Integrated actions. These are one of the mechanisms of cooperation, in the Framework of previous agreements, trying to promote common bi-lateral agreements between a Spanish group and a foreign group. Grants for the participation in the different events is the financing formula. - Specialization fellowships. These grants are oriented to the specialized formation of researchers and technologist in certain excellence international organisms.


48

ES 44 National Program of promotion of Scientific and technological Culture (Programa Nacional de promocion de la cultura cientifica y tecnologica)

There are three types of actuations to be funded: - Scientific and Technological disclosure in specialized Centres or other exhibition Centres. Priority is given to the activities that are developed in between implied agents (non profit entities) and those that foster collaboration between public and private R&D&I sector. - Formation activities devoted to the creation of a professional speciality related to scientific and Technological disclosure. - Diffusion and disclosure activities included in the week of Science, an annual event organized by the Government.

ES 43 Juan de la Cierva Programme (Programa Juan de la Cierva)

The main feature of this programme is the recruitment of postdoctoral researchers by R&D centres in 2004 on three-year contracts. The programme, which develops the lines of action of the National Programme for the Promotion of Human Resources, aims to increase the research capabilities of R&D groups and institutions in both the public and private sector by recruiting qualified researchers. The objective of this new programme is to recruit young postdoctoral researchers. It is directed, in particular, at researchers who have recently been awarded their PhD and is designed to enable them to join research teams and continue developing their research skills.

ES 42 Digital Cities

ES 41 Espana.es (ESPANA.ES) Espana.es is a set of measures aimed at encourage development of the information society in Spain. The schema is the result of the Comision Soto, a commission made up of experts in order to analyse problems to develop information Society in Spain. The programme includes several activities to encourage demand of new technologies by citizens and to improve infrastructures, contents and services to make possible such increase of connexion. With these goals, main actions of the programme are the following: 1. Improvement of services and contents offer to encourage utilisation of internet services by citizens. 2. Improvement of accessibility by mean of public points to provide access at internet services and improvement of information and communication to spread advantages of information society. 3. Connects to new information technologies by mean of increasing activity carried out through internet.

ES 40 Initiative to recruit personnel for non profit Technology Transfer Offices

ES 39 Public Venture Capital to NTBF s by ENISA participation

In order to encourage creation and expansion of NTBF's the MCYT establishes an agreement with ENISA (National Enterprise of Innovation). The main goal of this action line is to support entrepreneurial projects carried out in NTBF's by mean of participative loans. ENISA will receive funds from the MCYT, with preference conditions and this entity will give loans to NTBF's. The most important aspect of this measure is that risk is assumed by the MCYT and if NTBF's can't reimburse loans, funds reimbursed by ENISA to the MCYT will be reduced in these amounts.

ES 38 Thematic networks about co-operative Research in Life sciences and Biotechnology

ES 37 ARQUIMEDES - Introduction to knowledge generation (Certamen Universitario ARQUIMEDES de introducción a la sociedad del conocimiento)

This measure is aimed to: - Stimulate the research in Spanish universities in order to improve the quality of the students training. - Extend the formation programs in the universities not only to education but to researches with the intensive participations of the same students.

ES 36 PISTA - Programme to promote and identify new services in advanced Telecomumunications (PISTA-Programa de promocion e Identificacion de Servicios Emergentes en Telecomunicaciones Avanzadas)

PISTA has an objective encourage the development of applications and the starting of prototypes of systems and services devoted to key sectors, especially Administration itself, and public Services Different PISTA projects are defined by the Ministry of Industry and the Department that defines its need with the participation, in some cases, of regional governments and local entities. The projects are sub-contracted by the ministry of Industry and the developed systems are property of the same.


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ES 35 FORINTEL - Telecommunication training programme (FORINTEL - Programa de formacion en telecomunicaciones)

This measure is aimed to: - Improve the formation and technological training from the workers - Promote new measures for guaranteeing the long life learning

ES 34 Scientific infrastructure projects Scientific infrastructure is considered a fundamental tool to develop competitive R&D projects. The main objective of this measure is to encourage research of quality providing scientific community with the necessary infrastructure. Among the main goals of this measure are the development of a scientific quality research and improvement of scientific infrastructures.

ES 33 PROFARMA II-Promotion the scientific Research, the technological development and the innovation in pharmaceutical and veterinary industry.

This programme tries to encourage R&D&i in pharmaceutical and veterinary industry, as well as to promote the use of new technologies, in the development of therapeutical tools for the treatment of different kind of illnesses, improving manufacturing technologies and specialized work. This programme consists only in a classification of excellence in a king of benchmarking exercise. There is no financial help, but it has implications in other financial programmes. For example, in PROFIT ES_17

ES 32 Support measure to venture capital for New Technology-based firms (apoyo a la capitalización de empresas de base tecnológica)

There is a strong lack of innovative entrepreneurs in Spain. The central Government has started during the years 2001 and 2002 several measures in order to promote new technology-based companies: NEOTEC (Es ), CRECE (Es ) and this action. The main objective pursuing the Support measure to venture capital for New Technology-based enterprises' is to provide financial support for start-ups (younger than 2 years) improving the Venture Capital market. This action is multi sector oriented and it is implemented like reimbursable credits for Venture Capital investment organisations.

ES 31 Grants for Diffusion and Scientific and Technological Dissemination Activities

The objective of this measure is to increase the public awareness of scientific and technological culture. This measure mainly focuses on: - Strengthening and stimulating the participation of scientists in diffusion and dissemination activities. - Fostering the information and concern of public by the Spanish scientific heritage and the new developments of technology. - Awaking the concern and curiosity of students, since the school, by the Science and the Technology. The activities that are funded by this measure include exhibitions, contests and advertising; actions promoting the Science and Technology week; Museum; etc.

ES 30 Torres Quevedo Programme to support the placement of doctorates and skilled personal in enterprises (Programa Torres Quevedo para la incorporacion de doctores y tecn-logos a empresas)

The Torres Quevedo Programme is a financial instrument of the National Programme for improving the human capital, under the framework of the IV National R&D Plan (2000-2003). The programme consists of subsidies for companies and Technological Centres to place skilled personnel to launch an innovative project. The main objective of this measure is to encourage company's demand of qualified personnel to launch R&D projects and to increase research capacity in companies and technological centres. Another objective of the measure is to consolidate new companies and new technology based firms. There are not priority areas and the measure is not focus on any sector. Doctors will be employed in companies at least during a year.

ES 29 NEOTEC: Support to creation and development of NTBFs (NEOTEC: apoyo a la creacion de nuevas empresas de base tecnologica)

NEOTEC is a specific scheme designed by MCYT and devoted to foster the start-up of technology-based companies. It fulfils three main goals: 1/Promoting cultural change in scientific environment towards an entrepreneurial approach. 2/Increasing start-up funds to help NTBF`s (seed-capital) 3/Providing appropriate infrastructure and services to NTBFs, as training, technical and legal assistance , information services etc.

ES 28 Integrated projects to research in Genomics and Proteomics (Proyectos Integrados de Investigación en el ambito de la Genomica y Proteomica)

This call for proposals is included in the Strategic action of Genomics and Proteomics. This strategic action belongs to the National Programme of Biotechnology, inside the National R&D Plan. The initiative consists of subsidies for research groups of public institutions, to develop integrated research projects. The main objective is to promote research in genomics in order to increase scientific knowledge and technology transfer in this strategic field.


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ES 27 Plan for the strengthening and competitiveness of SMEs (PYME) ( Plan de consolidación y competitividad de la Pequeña y Mediana Empresa)

During the year 2001 a new measure to support the SMES has been started by the central State Administration for the period 2001-2006: the Plan for the strengthening and competitiveness of SMEs (PYME). This new measure replaces the SME Initiative for Industrial Development (ES 3 and ES 5) developed for the period 1997-1999. Two main objectives pursues the plan PYME: a) the full integration of SMEs in the Information Society and b) the integration of innovative management techniques in SMEs. So its objectives and priorities match those of the Operative Programme for Spain. The financing has two sources: European structural funds and National funds and the administration of the measure is on regional basis. This plan is multi sector oriented and it is implemented like subsidies for SMEs and interface organisations related to SMEs.

ES 26 Grants for Diffusion Activities related to the Policy and Competences of the Ministry of Science and Technology / Ayudas para Actividades de Difusion relacionadas con la Politica y Competencias del ministerio de Ciencia y Tecnologia

The aim of this measure is to promote diffusion activities related to competences and political goals of the Ministry of Science and Technology. This measure gives economic support to this kind of initiatives.

ES 25 Ramon y Cajal Programme (RyC) (Programa Ramon y Cajal)

"RyC" is an exceptional measure launched to give response to researchers community claims about the lack of job opportunities in the National Public Research System. The programme grants partially the cost of researchers contracts in a Public Research Centre during a period of five years. A commitment from Public Research Institutions (RTO and Universities) in this initiative is required.

ES 24 PIIC-Projects for industrial and concerted research /Proyectos de investigación industrial concertada

The aim of the Projects for industrial and concerted research (PIIC) is funding pre-competitive research carried out by companies in collaboration with Research Centres (both public and private) or Universities. Projects must have high technical risk and results must not be immediately marketable. This new modality tries to improve the co-operation between firms, research centres and universities in order to achieve a more efficient transfer of knowledge.

ES 23 Credits for activities developed in Scientific and Technological Parks (Ayudas para actividades realizadas en Parques cientí-ficos y Tecnológicos)

This measure supports S&T Parks promoting entities through financing necessary equipment and infrastructure to develop R&D actions such as: industrial research projects, technical viability studies before developing research activities, precompetitive development projects and technological demonstration projects. The measure was launched at the end of year 2001 for actions developed along this year. In February and June 2004, there have been some formal modifications in the measure, with the possibility of collaboration of promoting entities and other entities based on the Park.

ES 22 ARTEPYME II: Subsidies for projects of advanced telecommunication services for SMEs (ARTEPYME II: Subvenciones para proyectos de servicios avanzados de telecomunicaciones para PYMES)

This measure is under the initiative INFO XXI "The Information Society for all" (ES 19). Its main goal is to encourage the use of telecommunication technologies and e-commerce by SMEs. The programme finances projects for the adoption of new technologies and the introduction of products in the market through telematic instruments.

ES 21 Special Actions of OCYT (Acciones Especiales de la Oficina de Ciencia y Tecnologí-a, OCYT).

New measure introduced in 2000, that includes other ways of supporting the activities of the National Plan for Scientific Research, Technological Development and Innovation (abbreviated as NP) and, in general, of Science-Technology-Enterprise System (S-T-E System), which do not fit in others measures and that refer to specific actions such as the following: - Diffusion of results, in order to inform society and the enterprise sector of the Spanish capability in research, in generation of technology and in the solution to daily problems, as well as the scientific and technological popularisation aimed at ample strata of Spanish society. - Studies related to the S-T-E System, which allow a deeper understanding and analysis of the different aspects of this system. - Support to the international promotion and transfer of technology, with the aim of internationalising the Spanish technology by means of its promotion and commercialisation abroad.


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ES 20 Special Actions of National Programmes (Acciones Especiales en el marco de los Programas Nacionales)

The main goals are the following: - Aids to promote the participation of Spanish groups in international scientific co-operation programmes, with special reference to the EU R&D Framework Programme. - Support to the thematic networks in which various actors of the S-T-E system participate, with the aim of promoting co-operation among actors and facilitating the exchange and transfer of knowledge. - Aids to the organisation of conferences, seminars and one-day events in Spain, especially those with an international character. - Creation of databases of biological materials. - Aids for dissemination of scientific and technological advances in the society.

ES 19 INFO XXI. The Inform@tion society for all (La Sociedad de la Inform@ción para todos)

INFO XXI is an strategic initiative of the Spanish Government aimed at implementing an Information Society in Spain, in order that its citizens and enterprises can take part in its development and take advantage of its potential to improve social cohesion, quality of life and work and economic growth. The objectives of the initiative are to ensure the access of all citizens to information technologies, providing the appropriate infrastructures and legal framework to make possible establishment of the Information society, the development of e-commerce and the presence of Spanish companies in the global marketplace.

ES 18 Fiscal incentives for R&D&I activities (Incentivos Fiscales para actividades de I+D+I)

A series of measures have been introduced in year 2000, which modify the conditions of the tax headings and the sums that can be deducted from Corporation Tax Law, with the aim of stimulating the undertaking of R&D&I activities by the productive sectors. The Law on Fiscal, Administrative and Social Measures associated with the Law of the General State Budgets for the year 2000 and 2001 and 2002 incorporates improvements in the general regime for R&D and new incentives for technological innovation. Respective royal Decrees of April and November 2003 aim to contribute to simplification of the bureaucracy implied in the process to taking advantage of Fiscal deductions

ES 17 PROFIT - Programme to Encourage Technical Research (PROFIT) (Programa de Fomento de la Investigación Técnica)

PROFIT’s main goal is to support innovative enterprises through horizontal actions and instruments designed to improve the enterprise environment. This includes actions oriented to improvements in information and advice, co-operation with enterprises, quality and design, creation of technology-based enterprises, providing mechanisms overcoming the usual difficulties in obtaining suitable financing, especially risk capital in start-up phases. Regarding this last element, the objective is to foster the consolidation of risk capital, to improve the mobility of scientific and university personnel to enterprises and to promote young entrepreneurs. Besides this, the set of public support instruments will be reoriented, focusing on the encouragement of enterprises" investment in intangibles and supporting these enterprises not only with subsidies but also by completing the financial markets.

ES 16 National Programme of Environment: R&D and Innovation Projects / Programa Nacional de Medio Ambiente: Proyectos de I+D e Innovación Tecnológica.

The objective of the programme is to carry out activities to increase the scientific knowledge base in some priority areas: 1. Recovering of polluted lands. 2. Managing urban, agricultural and industrial fallout. 3. Pollution in agriculture and water. 4. Environmental indicators. 5. Studies related to the evaluation of environment quality. The activities can be developed through R&D projects (basic and applied, where cooperation between science and industry is pursued) and demonstration activities.

ES 15 National Programme of Agrofood Resources and Technologies: Key Action Conservation of the genetic resources / Programa Nacional de Recursos y Tecnologias Agroalimentarias: Accion estrateica Conservacion de los recursos geneticos

The main objective of this Key Action is to preserve genetic resources interesting for the agro food sector. The measure aims at avoiding loose in genetic diversity and guaranteeing the availability of genetic pools for genetic improvement. This action promotes co-operative R&D projects between Public R&D institutions and Enterprises. The programme has two kinds of actions to be supported: Basic and Applied R&D projects


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ES 14 National Programme of Food / Programa Nacional de Alimentación

The objective of this programme is to increase the scientific and technological knowledge in the three following strategic areas: 1. New species and technologies in aquaculture. 2. Quality control and food safety. 3. Improvement in the quality and competitiveness of wines. This measure establishes three types of actions to be supported: A. R&D Projects: basic research projects (A.1) and applied research projects (A.2). B. R&D&I Projects: technological development projects. C. Co-operative R&D&I Projects: basic, applied and technological development projects carried out by a consortium.

ES 13 R&D Projects of National Programmes -Applied Research / Proyectos de I+D en el marco de los Programas Nacionales. Proyectos de investigación aplicada

The aim of this measure is to foster applied research collaborative projects between Research Technology Organisations, Universities and Industry. The broad objective is to intensify the transfer of knowledge to business and to strength the research carried out by firms. The framework of this measure has changed in 2001

ES 12 R&D Projects of National Programmes. Co-operation projects - P4 Modality / Proyectos de I+D en el marco de los Programas Nacionales. Proyectos en cooperación-Modalidad P4

This is a new financial instrument for R&D projects, under the framework of National Plan for Scientific Research, Technological Development and Innovation. Its aim is to promote the co-operation between Research Technology Organisation (RTO) or Universities, and Companies. The measure will support financially the collaboration and the technology transfer through R&D projects in consortia.

ES 10 Financial support to the development of non profit Technology Transfer Offices (OTRI s)/ Ayudas para el desarrollo de las Oficinas de Transferencia de Resultados de Investigacién (OTRIS)

Since 1.989 until 1.996, National R&D Plan gives subsidies to Public Institutions that decides to create a Technology Transfer Office or an Industrial Liaison Office. It was a basal economic help to Universities and Public Research Centres. Once these offices were created, the Spanish government launched specific measures to support OTRI’s (ILO s) activities. Financial support to the Technology Transfer Offices (OTRIs) will allow these liaison organisations to launching and performance of strategic plans that originate a better and more effective interrelationship between Public Research Centres /Universities and productive environment and strengthen their work in a network.

ES 9 Fostering the R&D and the Innovation in Objective 1 and 2 Regions Programme (FEDER Programme) / Programa para el fomento de la I+D y la Innovación en las regiones Objetivo 1 y 2 (programa FEDER)

The FEDER Programme represents a new financial initiative of Government and has been provided funds during 3 years. This measure is not a novel measure, since it is aimed to similar objectives that PETRI Programme [Es 7]. The goal of the projects must be the research co-operation between Public Research Centres (CPI) and companies and the transfer to knowledge and technology, where the firms must support the activities with dedicated resources: financial, equipment or personal. The grant finances the activities of CPI, which must be locate in an Objective 1 or 2 Region, in accordance with the European Regional Development Fund (ERDF) definitions.

ES 8 Concerted and Co-operative industrial research and development projects/Proyectos Concertados- Cooperativos

The Government since the beginning of III National Plan (in 1996) develops concerted and Co-operative projects. Implementation of the measure is of 1-4 years (from 1996 to 1999). General annual budget for this measure is more than EUR 500 thousand. Funding is provided directly to companies to develop an R&D project with a Public Research Centre. The main goals are to promote co-operation between University and Industry and to encourage the implementation of joint research projects and technology transfer between companies, universities and Innovation and Technology Centres. Concerted projects are to promote collaboration among companies and universities or Public research centres and co-operative projects are to promote collaboration among companies and Innovation and Technology centres.

ES 7 PETRI Programme: Projects for Encouraging the Research Results Transfer/ Programa PETRI (Programa de Estimulo a la Transferencia de Resultados de Investigacion)

The main goal of PETRI Programme is to encourage the transfer of technologies and scientific results with industrial application generated in universities, public research organisms and technological centres to companies. SMEs are one of the main objective groups of the program. This programme began in 1995 and it has been running for more than 4 years. This action is implemented through the development of a pre-competitive project aimed at the adaptation of the original technologies or research results to the needs of the company. The holders of the research results/technologies receive the funds, while the companies are required to show a financial commitment.


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ES 6 Initiative of Support of Industrial Technology, Security and Quality (ATYCA Initiative)/Iniciativa de Apoyo a la Tecnologia, la Seguridad y la Calidad Industrial (Iniciativa ATYCA)

The ATYCA Initiative consists of grants to enterprises and research institutions to carry out activities in R&D and Innovation in the fields described below. ATYCA gathers the previews industrial measures to finance R&D projects. The annual budget for this measure is >10.000.000 EUR and contributes financially to the project with a rate of the eligible costs, while the firms must support the activities with dedicated resources: financial, equipment or personal. The measure provides funds only for 1 year.

ES 5 SME Initiative for Industrial Development / Networks of Innovation Supporting Interface Organisations/Iniciativa PYME para el desarrollo industrial. Redes de apoyo a la innovación y organismos de interface.

The SME Initiative for Industrial Development is a programme developed after the approval of the Operative Programme for Spain under the framework of the European Community SME Initiative. So its objectives and priorities match those of the Operative Programme for Spain. The financing has two sources: European structural funds and National funds and the administration of the measure is on a regional basis. This is a subsidiary initiative to support innovation management and innovative behaviours promotion in SMEs. The measure implementation is of 1-4 years and the impact is expected to be progressive. It is multi sector oriented. The programme started in 1997 and ended in 1999.

ES 4 Instituto de Crédito Oficial (ICO) financial facilities for investments aimed at increasing and improving enterprises' technological and innovative components.

Instituto de Credito Oficial (ICO) is a public credit institution depending on the Ministry of Economy. ICO has a range of financing facilities whose aim is to boost and support productive investments by Spanish enterprises. ICO has two financial lines related with innovation activities: 1. - SMEs 2004 facilities. This financial line supports investments in productive fixed assets carried out by SME. 2. - Technological Innovation Facilities. This line finances investments aimed at increasing and improving enterprises' technological and innovative components, enabling them to make new products and improve quality. All beneficiary companies can be beneficiaries of these financial facilities. It is not restricted to SME.

ES 3 SME Initiative for Industrial Development / Financing Programme.

The SME Initiative for Industrial Development is a programme developed after the approval of the Operative Programme for Spain under the framework of the European Community SME Initiative. So its objectives and priorities match those of the Operative Programme for Spain. The Financing Programme of the SME Initiative started in 1997 and ended in 1999. It pursued a significant mid-term impact in the financial structure of SMEs. Multi-sector oriented, its main objectives were to ease the access of SMEs to sources of financing, reducing their cost and improving the financial structure of SMEs.

ES 2 IDE Action to support the placement of doctorates in enterprises / Acción IDE de apoyo a la incorporación de doctorse a empresas

The IDE Action is a financial instrument of the National Programme for the Promotion of Science-Technology-Industry System Articulation (PACTI), under the framework of the III National R& D Plan (1996-1999). It is based on a centralised bottom-up approach. There are no priority technological areas and it does not focus on any sector. The call is continuously open. The main objective is to promote innovation in Spanish enterprises by placing highly skilled personnel whose main tasks are to launch an innovative process, to support already existing innovative activities or the launching of new ones.

ES 1 CDTI financial support/ Ayudas CDTI

The CDTI is the Centre for the Development of Industrial Technology. It is a Public Business Institution dependent on the Spanish Ministry of Science and Technology that promotes innovation and technological development carried out by Spanish companies. Its financial support is aimed at financing R&D projects, the participation in international research programmes and the international transfer of technology. The financing is channelled through interest-free loans.


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Annex 3: Further Information A3.1 Websites of key innovation organisations

Type of organization

Name

Website

Higher education or public research institute

FECYT - Spanish Foundation to Science and Technology http://www.fecyt.es

Higher education or public research institute Fundacion LEIA C.D.T. http://www.sea.es Higher education or public research institute Tekniker Foundation http://www.tekniker.es Higher education or public research institute Cotec foundation http://www.cotec.es National Government Ministry/department Ministry of Education and Science http://www. mec.es National Government Ministry/department Ministry of the Presidency http://www.mpr.es National Government Ministry/department Ministry of Public Works http://www.cedex.es National Government Ministry/department Ministry of Education and Science http://www.mec.es National Government Ministry/department General Directorate of Research http://www.mcyt.es National Government Ministry/department

Economic and Social Council - CES http://www.ces.es

National Government Ministry/department

State Secretariat of Scientific and Technology Policy http://www.mcyt.es


INIA - National Institute of Agriculture and Food Research (Ministry of Science and Technology) http://www.inia.es


Ministry of Science and Technology http://www.mcyt.es

National Government Ministry/department Ministry of Economy http://www.mineco.es National Government Ministry/department

Ministerio de Industria, Turismo y Comercio http://www.min.es

National public agency Fundacion Tripartita para la Formación en el Empleo http://www.fundaciontripartita.org

National public agency

CICYT - Interministerial Commission for Science and Technology http://www.cicyt.es

National public agency CDTI - Centre for Industrial Technological Development http://www.cdti.es

Not-for-profit foundation/organisations EL MUNDO http://www.el-mundo.es Not-for-profit foundation/organisations EL PAIS http://www.elpais.es Not-for-profit foundation/organisations EL PERIODICO http://www.elperiodico.es Not-for-profit foundation/organisations GACETA DE LOS NEGOCIOS http://www.negocios.com Not-for-profit foundation/organisations LA VANGUARDIA http://www.vanguardia.es Not-for-profit foundation/organisations CINCO DIAS http://www.cincodias.es

Other National Technological Center for the Canning Industry http://www.ctnc.es


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Other

Spanish Federation of Innovation & Technology Organisations - FEDIT http://www.fedit.es

Other Centre de Calcul de Sabadel http://www.cc.es

Other

Federación Empresarial de la Industria Quimica Española - FEIQUE http://www.interbook.net

Other INE - National Statistical Institute http://www.ine.es

Other National Agency for Evaluation and Forecasting - ANEP http://www.seui.mec.es

Other Spanish Patent and Trademark Office - OEPM http://www.oepm.es

Other Higher Council for Scientific Research - CSIC http://www.csic.es

Other Institute for Energetic Save and Diversification - IDAE http://www.idae.es

Other

Research Centre for Energy, Environment and Technology - CIEMAT http://www.ciemat.es

Other National Institute for Aerospace Technology http://www.inta.es

Other Spanish Oceanographic Institute - IEO http://www.ieo.es

Other Spanish Federation of Innovation & technology Entities http://www.fedit.es

Other Foundation 1st of May http://www.ccoo.es/1mayo/index.html

Other Spanish Capital Investment Association http://www.ascri.org

Other Conference of Spanish Universities' Rectors http://www.crue.upm.es

Other Robotiker - Parque Tecnologico http://www.robotiker.es

Other Bosques Naturales S.A. http://www.bosques-naturales.com

Other Corporacíon Empresarial de Extremadura http://www.cex.es

Other Ministry of Health and Consume http://www.isciii.es Other ICO - Instituto de Crédito Oficial http://www.ico.es

Other ITGE - Spanish Institute of Geomining Technology http://www.itge.mma.es


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A3.2 Bibliography and sources of further information 1. - COTEC Report: Innovation and Technology in Spain, 2004. COTEC Foundation; Madrid 2004 2. - European Trend Chart on Innovation; Country Report: Spain. Covering period: April 2003-August

2004 3. - Green Paper: Situation of the Spanish Innovation System in 2004. COTEC Foundation; Madrid

2004 4. - Molero J, Fonfría A. (2000) Innovation and internationalisation policies in Spain: Special

consideration of less developed areas. Working paper 18, IAIF (Instituto de Análisis Industrial y Financiero), Complutense University, Madrid

5. - Muñoz E, Espinosa J and Díaz V. Innovation Policy and the Concept of the National Innovation

System in the Spanish Context: Are they ghost images or real entities? Advanced Policy Unit; CSIC-Madrid

6. - National Plan for Scientific Research, Technological Development and Innovation 2004-2007. Volume I -

Objectives and Structure; Ministry of Industry, Tourism and Trade; Madrid 2004 7. - National Plan for Scientific Research, Technological Development and Innovation 2004-2007. Volume II –

Priority Areas; Ministry of Industry, Tourism and Trade; Madrid 2004 8. - Sanz, L. Public/Private partnerships and innovation policy: The Spanish Experience. Comparative

Policy Unit, CSIC-Madrid. 9.- González Hermoso de Mendoza, A. (2002) La territorialización de la ciencia y la tecnología. 10. - Ministry of Industry, Tourism and Trade (2003) Revista de Economía Industrial. No.354.

Available at: http://www.mityc.es/publicaciones/revista/indice_general.htm 11. CES (2005) Panorama Económico Social de España (No. 124) available at www.ces.es