RISE Project - Research Institutes in the Service Economy - Wp2 Functions of Services Rtos

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RISE - RTOs in the service economy

Synthesis report , workpackage 2

Research and technology institutes andthe service economy - A functional

perspective on innovation related services

Brigitte Preissl

DIW - Deutsches Institut fr Wirtschaftsforschung

Direct line: +49 30 89 789 237

Email: [email protected]

A final report of RISE: RTOs in the serviceeconomy - Knowledge infrastructures,innovation intermediaries and institutionalchangeRISE reports may be downloaded from:http://centrim.bus.brighton.ac.uk/go/rise/

sRISE coordinator: Dr Mike Hales

CENTRIM - The Centre for Research in

Innovation Management

Direct line: +44 1273 642190

Email: [email protected]

This report constitutes a deliverable specified in the

RISE work programme

Contract number: SOE1-CT98-1115

Funded under the TSER programme by the European

Commission, DG Research

Date: December 2000


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Research and technology organisations

in the Service Economy (RISE)

Final Report WP2

Research and Technology Institutes and the Service Economy

A functional perspective on innovation related services

Summary prepared by

Brigitte Preissl (DIW)

based on country analyses by

Thor Egil Braadland, Morten Fraas (STEP)

Margarida Fontes, Mureil Pdua, Rui Carvalho (INETI)

Sander Kern /TNO/STB)

Lennart Norgren (NUTEK)

Jeff Readman (CENTRIM)

Ulrich Wurzel, Anja Dresenkamp (DIW)

Berlin

December 2000


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Table of Contents

1 Introduction .................................................................................................................................... 3

2 The evolution of the concepts of RTIs and their role in innovation.................................................5

3 RTIs and KIBS firms in national innovation systems...................................................................... 9

4 RTIs, KIBS and innovation service functions: Survey results ....................................................... 17

4.1 Sample selection............................................................................................................... 17

4.2 The questionnaire ............................................................................................................. 18

4.3 Survey results ................................................................................................................... 19

4.3.1 Characteristics of the sample population .......................................................................... 19

4.3.1.1 Types of Organisation ................................................................................ 19

4.3.1.2 Size ............................................................................................................ 21

4.3.1.3 Employees.................................................................................................. 22

4.3.1.4 Affiliation .................................................................................................. 23

4.3.2 Funding structures in RTIs and KIBS............................................................................... 23

4.3.3 Composition of Output....................................................................................................... 28

4.3.4 Competition in research markets ........................................................................................ 34

4.3.5 Service functions ................................................................................................................ 36

5 Indicators for institutional and functional orientation.................................................................... 44

5.1 The design of the set of indicators .................................................................................... 44

5.2 Institutional and functional orientation in RTIs and KIBS................................................ 50

5.3 Correlation between indicators ......................................................................................... 76

6 Country summaries....................................................................................................................... 97

7 Conclusions.................................................................................................................................. 107

References ......................................................................................................................................... 86

Appendix 1: Questionnaire................................................................................................................... 109

Appendix 2: Indicators and typologies................................................................................................. 110


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Tables

1 Surveys on RTIs and KIBS firms by RISE country teams ............................................................ 18

2 Size of organisations in % of respondents..................................................................................... 22

3 Sources of funding in % of budgets and turnover (averages) ........................................................ 24

4 Average share of foreign and domestic sources in total budgets in %........................................... 28

5 Average shares of labour input dedicated to... (in %).................................................................... 296 Importance of output categories for research institutes ................................................................. 33

7 Importance of output categories for KIBS firms .......................................................................... 34

8 Competitors: share of all respondents that are competing with .................................................... .35

9 Factors providing competitive advantage...................................................................................... 36

10 Service functions - Share of all respondents that offer this service

function in %................................................................................................................................. 41

11 Ranking of service functions according to relative frequency of supply ....................................... 44

12 Attribution of variables to indicators............................................................................................. 49

13 Indicator results for four countries - % of all respondents included in the indicator..................... 51

Diagrams

1 KIBS-Orientation.......................................................................................................................... 52

2 Institutional Dynamics .................................................................................................................. 54

3 Public Orientation......................................................................................................................... 57

4 Research Orientation..................................................................................................................... 59

5 Institutional Orientation................................................................................................................ 61

6 Academic Orientation ................................................................................................................... 63

7 Policy Orientation ........................................................................................................................ 65

8 Service Orientation ... .................................................................................................................. .67

9 Technology Orientation ................................................................................................................ 69

10 Functional Diversity...................................................................................................................... 7111 Functional Dynamics ................................................................................................................... 73

Figures

1 Innovation Service Functions........................................................................................................ 39


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1 Introduction

The RISE project (Research and Technology Organisations in the Service Economy) looks at

the role of RTIs (Research and Technology Institutes) in innovation. This role changes in

response to changes in processes of innovation and due to modifications in funding and the

subsequent adjustments of the functional orientation of RTIs. In a simultaneous process,

innovating firms express more varied needs for innovation related services, and RTIs adapt to

requests of high applicability of their research results. In delivering services to enterprises,

however, RTIs compete with providers of knowledge intensive service firms (KIBS). At the

same time, service firms have become serious competitors for RTIs in contract research for

public bodies. An increasing range of service inputs to innovation and a greater service

orientation of RTIs are the two trends that mark processes of innovation in a service

economy. These trends can be observed from the demand side (focussing on firms that adopt

RTI/KIBS services) or from the supply side (focussing on RTIs/KIBS that provide innovation

related services). This paper takes the second perspective1.

Providing a definition of RTIs that is valid for all countries on an institutional basis was

difficult because of the diversity of RTIs in Europe. Concentrating on public sector research

as the main characteristic would have excluded British RTIs. In some countries most of the

research that is relevant in the present context is allocated in universities, in others, including

universities would not have made sense. Therefore, in a broad approximation, all

organisations have been included which provide output that is relevant for innovation and

which have a public mission. This includes publicly as well as foundation supported entities

and excludes private business firms. Usually these organisations rely on public funds for part

of their budgets2. The difficulty to define RTIs according to institutional criteria underlines

the need to describe and categorise them rather according to what they do and in this case

what they contribute to innovation than according to what they are. However, in order to

address a meaningfully assembled sample population, an institutional definition was needed,

which subsequently was to be substituted and complemented by a functional one. On the

basis of the broad criterion of providing services that are related to processes of innovation

each country team selected the organisations that fulfil this condition. Unfortunately, this

rather humble definition of RTIs resulted in units of research that do not match statistical

1

The first perspective is at the centre of another workpackage of the RISE project that deals with innovation

clusters (see Denhertog/Whalley 2000).2

In the UK a group of RTIs, the so-called Research and Technology Organisations (RTOs) have been completelyprivatised, and thus are seen as KIBS firms in this text. However, due to their history and mission and to their

current status, they occupy a position between RTIs and KIBS. .


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categories, and thus, no statements on the representativity of samples was possible. In

addition, different organisations were relevant in each country for example, the Swedish

sample includes no university institutes, while universities are a main group in the Dutch

sample, and the German sample comprises only a specific group of university institutes, so-

called An-Institutes. Hence it would be misleading to aggregate the data into a multi-country

sample.

This report will start with a short outline of the discussion on RTIs in national innovation

systems which will position the research undertaken in this work package of the RISE project

in a wider context (chapter 2). Seven country teams have contributed to the analysis by

providing reports on their national systems of innovation (NIS) and the institutional

configuration of RTIs. The following countries are included in this part of the study:

Germany, Italy, the Netherlands, Norway, Portugal, Sweden and the UK. A short summary of

NISs and R&D configurations is contained in chapter 3. More in-depth analyses have been

provided for six countries (the above, except Italy). Here postal surveys in RTIs (and partly

also in KIBS) have been conducted in order to retrieve information that could not be obtained

from official statistics. The surveys focussed on activities of RTIs, their configuration of

budgets, clients, types of output and functions exercised in innovation processes of their

clients. The two main purposes of the surveys were to map changing institutional and

organisation settings in the provision of innovation related services and to generate a

typology of service providers that focuses on functional rather than institutional distinctions.

Survey results will be presented in chapters 4; in chapter 5 these results will be transformed

into indicators that serve as a basis for RTI and KIBS typologies. Chapter 6 will present

summaries of country reports. Finally, conclusions will be drawn with respect to changes in

innovation systems and processes of innovation, and to the methodology adopted to monitor

these changes (chapter 7).

To a large extent the units of research in the RTI part of our samples overlaps with public

sector research institutes which have been the object of another TSER project (see Senker et

al. 1999). Their definition of public sector research comprises institutions ...for which the

major source of funds is public; and which are in public ownership or control (or have

converted to private ownership since 1980); and which aim to disseminate their research.

(Senker et al. 1999, p.3). The parentheses solve the problems with British RTOs that are a

sort of hybrid between public and private3; and the clause about dissemination

3

Thus, British RTOs are being treated as public in the Senker report and as private in this report.


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corresponds with the public mission term in the RISE definition. Strictly speaking, this

definition of public sector research would exclude most of the RTIs in Germany, because

either public funds are not their main source of finance (as in some Fraunhofer institutes) or

because they are not in public ownership or control, since usually RTIs are organised as

registered associations, and an important feature is their strict independence from

government control. Despite the restrictive definition, all these RTIs have been included in

the German part of the public sector research project (see Schimank/Winnes 1999). This hints

at similar problems with a general definition of RTIs as in the RISE project. The focus of the

Senker project is much narrower than that of RISE, because empirical investigation

concentrates on human genetics research only.

The identification of KIBS firms is less controversial. They are defined as companies which

provide knowledge intensive business services that are supporting innovation, such as

engineering firms, software providers, consultancy firms, training and human resource

management and development as well as firms specialising in technical analysis and testing.

The more difficult part was the compilation of address material for empirical research, since

in most countries no comprehensive company registers exist for service industries. This also

made it difficult to assess the degree of representativity of the KIBS samples.

2 The evolution of the concepts of RTIs and their role in innovation

National innovation systems (NIS) differ with respect to their institutional configuration.

Public, semi-public and private organisations contribute in varying intensity to the generation,

diffusion and application of knowledge. It is this institutional diversity which has stimulated

the debate about the systemic nature of innovation systems, their optimal configuration in a

historically given economic context and measures to improve systemic efficiency (Nelson

1993, Edquist 1997). The attention of researchers and policy makers alike moved from

processes of creation of knowledge to its diffusion and, at the present stage, to the absorption

or implementation of knowledge in innovating companies. Reaching and maintaining high

levels of R&D expenditure seems to be a major concern in many economies (see, for

example, the indicator system of the EU for science and technology, EU Commission 1997).

Enhancing the diffusion of knowledge in order to guarantee a wide-spread use of state-of-the-

art technology and to give access to new technology also to those firms which do not generate

it themselves, induced the creation of agents to enhance technology transfer (see Abrahamson


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et al. 1997). The difficult balance between promoting the diffusion of knowledge (with the

possibility to create positive external effects) and the legitimate protection of the copyrights

of its creators stimulated debates on spillovers and their effects on R&D and innovation

activity (see, for example, Levin, Cohen and Mowery 1987). Process re-engineering and

organisational adjustment became key issues in the implementation of new technologies. The

success of a technological innovation seems to depend to a large extent on how the

technologies on which it is based are used. This implies the integration of new technologies

into existing routines as well as the adjustment of organisational patterns and procedures to

technological paradigms. Services involved in all three dimensions of technology and

innovation, the generation, diffusion and adoption of knowledge, are provided either by the

innovating company itself or by other actors in the NIS. RTIs and KIBS firms belong to these

groups of actors.

There are strong arguments for public support of R&D and thus, also of the institutions that

provide it (for a review of the literature, see Farina/Preissl 2000). There are basically three

ways in which the output of RTIs enters processes of innovation: via publications and

publicly accessible documents, via training of personnel and via industry contracts. These

mechanisms as well as processes of production and innovation themselves create spillovers

which enhance innovation activities in national economies. The support of knowledge

creation which would not have occurred in a market context, because the outcome of the

relevant R&D is too uncertain, not directly profitable, or costs are too high to be borne by a

single enterprise, is one of the aims of public innovation policies. Stimulating the diffusion of

knowledge by making it publicly accessible is another. In most countries, thus, financing

R&D with money from government sources was a well-established pillar of economic policy.

However, doubts concerning the efficiency of this kind of support in terms of innovation

activities induced and their success have led to a reconsideration of the mechanisms and

institutions of public R&D support. Furthermore, budget deficits have forced governments in

Europe to look for more efficient ways to promote innovation. A re-organisation of public

sector research has thus been initiated in many European countries (for an extensive

documentation, see Senker et al. 1999). RTIs are increasingly funded on a project or

programme basis, and not on an institutional basis. Thus, basic research whose results are

open for the general public will be reduced (or conducted only in projects with a limited

duration and scope), and contract research becomes more common. The main reason for this

is to make funding organisations have a greater influence on the research agenda (and the

outcome) (see also Senker et al. 1999, p.30). This holds for public as well as private sponsors


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of research projects. Cuts in basic funding, doubts about the efficiency of publicly funded

institutions and the need to make research in RTIs more directly useful for enterprises have

led to pressure on RTIs to increase the share of industry contracts in their activities4.

It has been argued that the relationship between RTIs5 and industry has changed due to the

specific features that characterise a knowledge society (Jacob et al. 2000). Jacob et al. provide

a list of these features:

transdisciplinarity: expertise from more than one discipline is necessary to

provide comprehensive solutions to practical problems;

collaborative partnerships: researchers and practitioners engage in an iterative

dialogue from the definition of the problem to the implementation of a solution;

heterogeneity of organisations in the market for knowledge production;

strong need for experts who are able to translate academic knowledge into

applicable solutions of practical problems, and to take practical problems and

knowledge from productions sites as an input for advancement in theory;

stimulus for research comes primarily from practitioners problems and not from

academia. (Jacob et al. 2000, p.255.)

The authors argue that these characteristics of a knowledge society lead to relationshipsbetween industry and RTIs that are based on partnerships, in which participatory research,

dialogue, interaction and collaboration (Jacob et al. 2000, p.257) prevail over a simple

transfer of knowledge in codified form. The typical problems of relationships between RTIs

and industry, timing, control over research processes and property rights, can thus be

overcome.

The identification of a knowledge society goes along with the transition from a

manufacturing to a service economy. Thus, it is being argued in this paper, the relationship

between RTIs and industry that focuses on the joint creation, transfer and exploitation of

knowledge will also reflect the specific characteristics of a service economy, i.e., the

emphasis of services as inputs to innovation and the presentation of RTIs output as services

to various groups of clients. However, interpreting the industry-RTI interaction in terms of

contracts between service provider and client takes away some of the rather harmonious view

4

In a quite contradictory way, evaluation procedures in German RTIs have led to a strong pressure to increase

academic output, thus to do less project work and publish more articles.5

The authors use the term academies which, however, seems to be very close, if not undistinguished from RTIs

in this paper.


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of the Jacob paper. The role of the client in a market relationship is more dominant with

respect to control over the process, appropriation of outcomes and definition of the service

than a partnership concept suggests.

Another aspect of the service perspective on innovation and RTIs is competition in service

markets. It must be assumed that RTIs do not only compete with each other in the provision

of innovation-related services, but also with private service firms or KIBS. The impressive

growth of these services in most European countries in the last ten years (see Rubalcaba-

Bermejo 1998 and OECD 1999), has led to the assumption that they must play an increasing

role in supporting innovation processes in their client firms. It is one of the concerns of the

RISE project to explore the fields in which RTIs and KIBS firms are competitors and to

investigate the division of labour between them. Therefore, in some countries, the surveys on

innovation related service functions included KIBS firms6. The contribution of KIBS to

innovation has been widely discussed in the past (see, for example, Miles / Kastrinos et al.

1994, DenHertog/Bilderbeek 1997, Preissl 1998, Farina /Preissl 2000, Windrum/Tomlinson

1999, Strambach 1997, Wood 1997). So far, the literature has concentrated on the reasons,

why firms have increased their use of external service providers (see also Beije 2000). This

report contributes to the debate by providing more evidence on the functions in which KIBS

support innovation processes and the competitive ground they share with RTIs. However, the

small samples of the RISE surveys do not allow to estimate the order of magnitude of the

KIBS participation in innovation for the economy as a whole.

The following analysis concentrates on five hypotheses that are central for the RISE agenda:

(1) National innovation systems show a large variety of institutional forms of innovation

service providers. Landscapes of NIS actors are changing in response to new patterns

of innovation and as a consequence of new R&D and innovation policies.

(2) Processes of innovation increasingly require services which go beyond traditional

R&D tasks. These services can either be provided by RTIs, by KIBS firms or by the

innovating company itself. RTIs and KIBS firms compete in markets for innovation

related services.

(3) One of the key elements of innovation support in the service economy is the efficient

provision of innovation relatedservices (as opposed to technology transfer which

characterises previous stages of economic development.

6

These countries were: Germany, Sweden, and the UK; in the Netherlands, KIBS firms were part of the gross

sample, but response rates were too low to proceed with any statistical evaluation.


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(4) Service orientation and budget constraints require a reconsideration of national R&D

strategies and innovation support policies.

(5) Innovation patterns that are characteristic for service economies are shaped by the

configuration and operational features of NIS; thus, to a certain extent trajectories of

RTI / KIBS development will be country-specific. However, common trends in the

functioning of markets or the organisation of production will have an impact on the

harmonisation of innovation service provision.

These hypotheses are reflected in a series of institutional and functional characteristics of

innovation service providers. From a micro (supply) perspective, these characteristics will be

analysed using national surveys of RTIs / KIBS firms. The macro perspective will be covered

by NIS reports. The hypotheses have guided the generation of questionnaires and indicators;

they also are at the centre of the comparative perspective on country results.

3 RTIs and KIBS firms in national innovation systems

In the specific national innovation systems (NIS) of each country, there are organisations that

provide innovation related services in the public and semi-public as well as in the private

domain (for extensive analysis of NISs in Germany, Italy, the Netherlands, Norway, Portugal,

Sweden and the UK see Rickert 1999, Farina/Solimene 1999, Leyten/ Limpens 1999,

Leyten,/Whalley/Limpens/Kern/denHertog 1999, Hauknes/Ns/Solum/ Orstavik 1999, Fontes

1999, Norgren 1999, Hales 1999a and 1999b). Despite their institutional diversity, these

organisations can be identified as RTIs and KIBS firms in each NIS report. Almost all the

reports show how R&D expenditures are distributed between the different actors and which

share is attributed to public and semi-public RTIs. The UK and Dutch reports try to estimate

the RTI and KIBS shares of outsourced or extramural R&D. A large part of the NIS reports is

also dedicated to descriptions of research institutes that can be classified as RTIs and their

changing roles, i.e. they diagnose diminishing public core funding and a growing dependence

on industry contracts. However, KIBS firms are not covered in any of the reports. Their R&D

activities should be documented in statistics on business R&D, but in many countries these do

not give data on R&D in service industries. Another difficulty of capturing statistically the

role of KIBS in NIS is the fact that R&D statistics might show R&D in service industries, but

not R&D provided by service firms on behalf of their clients (see Revermann/Schmidt 1999).

The following chapter gives an overview of RTIs and KIBS and their roles in NISs.


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Norway

The Norwegian R&D performing system is a tripartite system; with corporate R&D

accounting for about 47% of national R&D performance, higher education institutes (HEI)

accounting for about 27% and a conglomerate sector of public and private contract R&D

institutions with 26% in1997. The autonomous technological and industrial contract R&D

institutes, account for about 15% of national R&D). In national discourse on R&D and

innovation policies the institute sector is recognised as a third major R&D performing sector,

alongside the HEI sector and business enterprise R&D.

The R&D institutes are dominantly funded by public sources. National business enterprises

funded slightly less than 25% of the R&D expenditures. The governmental regulation

specifies that funding of the public but autonomous R&D institutes generally combines

three types of funds, (1) core grants, to be used to general competence enhancement at the

specific institute, (2) strategic programs directed at competence building at a specific institute

in a pre-selected scientific or technological area and (3) funding of other programmes and

projects, allocated to the institute on the basis of scientific, technological or practical merit.

The SINTEF group is the largest R&D performing organisation in the institute sector, with a

total employment of about 1 700, and an annual budget of about 1,5 billion NOK. The

dominant position of the SINTEF Group in the Norwegian institute sector is clear from the

fact that the SINTEF Group accounted for nearly 54% of total income of the technological

industrial R&D institutes in 1998.

Industry-based and -organised R&D institutions play an important role particularly in less

research-intensive industries. However, they represent only a small share of the overall R&D

performance; accounting for less than 8% of R&D in the technological and industrial contract

R&D institute sector. They are organised more strongly along an industry perspective than

on the basis of fields of technology or technological orientations. Broadly speaking, while the

research orientation of the technological RTIs is emphasised, these industrial RTIs are rather

more strongly oriented towards development work related to the specific industries in

question.


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Italy

In 1996, the national R&D expenditure was distributed in the following way: RTIs 16%,

universities 22%, Government 4% and enterprises 58%. Universities received the largest

amount of public funding for research (42% in 1996), while the share of RTIs was 39.5%.

One specific feature of the Italian NIS is that Italian universities are usually concerned with

teaching and researching, but they have poor relations with industry.

Since 1989, most of the Italian public institutions and organisations other than universities,

which have research and technology as their core mission, have been included in a single

broad group in the public administration called comparto di ricerca (57 institutes). The only

two other public RTIs not included in this group (for administrative reasons) are ENEA and

ASI. The most important institution is the CNR. It carries out research in many scientific

areas, including socio-economic and humanistic research. CNR has about 7,500 employees

and it is organised in 195 institutes and 121 centres. In 1997, the total budget of the CNR was

1,318 billion Lire, most of which (1,183 billions, 90%) was represented by Government

transfers, only 55 billion (4%) were funded by the private sector.

The second most important research institution (on the basis of R&D expenditure) is ASI,

which promotes scientific and technological programs for the national aerospace industry.

ENEA has the functions of supporting scientific research and of providing knowledge

intensive services. It was established as a nuclear research centre, but since the abandoning of

this field, it has concentrated on environmental research and new sources of energy. Two

large institutes work in the field of physics (INFN and INFM), they are closely related to

universities, having the task to transfer academic knowledge to firms and to co-ordinate the

national physics policies. They are mostly publicly financed. The last large research

institution is ISS (Higher Institute of Health), which promotes and co-ordinates national

projects of research in the area of public health. It also has other important functions of

testing and framing drugs and technical food standards.

These institutes share human resources and scientific structures with universities, and, for this

reason, they carry out the largest part the transfer of technological knowledge from the

academic to the firms world. They could be the bridging institutions in the Italian system,

because they are deeply rooted both in universities and firms. The problem is that many of

them had to face an oppressive bureaucracy. Only the reorganisation now under way can give

them the deserved key role.


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Netherlands

R&D investment in the private sector is characterised by the fact that the greater part is

concentrated in five large multinationals (Akzo, DSM, Philips, Shell, and Unilever). They are

responsible for about 45% of all private R&D in the Netherlands. The Netherlands has a

relatively large public research infrastructure of which the large technological institutes, TNO

and the universities form the heart.

In 1996, total R&D-outsourcing by Dutch firms, universities and research and technology

organisations amounted to 1.2 billion EURO. About 54% of this amount went to RTIs and

universities, while about a fourth of the national funds for outsourcing of R&D went to co-

operation with other firms.

As opposed to the fact that private R&D is almost exclusively internally financed, R&D at

RTIs and universities are almost exclusively publicly funded. The public sector represents a

fairly large part of the total knowledge flows in the NIS: it is almost as high as the internal

investments in the R&D of firms. Through an increase in outsourcing of R&D by 25%,

private firms are primarily responsible for the growth of knowledge flows. Universities and

research and technology organisations have lost market share to private firms. In 1995, 64%

of all outsourcing of Dutch private R&D went to national public research and technology

organisations and universities. In 1996 the share was only 52%. Whether this trend is

structural, remains to be seen, but the service sector is growing rapidly.

Portugal

The Portuguese NIS report concentrates on the biotech sector. There is a diversity of

organisations that conduct R&D in biotechnology and biotechnology-related fields and offer

research and technology services. The origin of most of these organisations is government

laboratories and universities, with whom they often share a substantial part of their human

resources. Several government laboratories can be classified as RTIs. Additionally we find a

plethora of semi-private organisations, including centres closely associated with the

university and centres that have a more private form of governance (usually having a "private

non-profit" status).


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In addition to RTIs, a small number of dedicated biotechnology firms (DBFs), which can be

classified as KIBS, have started to provide R&T services in biotechnology. Most of these

firms are "academic spin-offs", created by young graduates/ post-graduates or, more rarely,

researchers, to apply knowledge or technologies obtained in public research organisations

directly or indirectly to the innovation system. Several DBFs are active service providers -

whether services are the firms' main business, an activity that adds value to the product sold, a

cash-raising business pursued while a product is being developed, or a strategy to raise

clients' awareness and open up new markets. In conducting these activities, some of these

DBFs are performing a critical "technological intermediary" role between RTIs and

established firms. The DBFs can act as a translator of competencies and generally contribute

to increase the interactions within the biotechnology system. However, due to their still very

small numbers, the DBFs impact on the system is more potential than real.

Germany

Despite the large variety of research institutes, industry is still conducting most of the R&D in

Germany. Applied research and experimental development are almost entirely performed by

industry. The education sector possesses the next largest R&D shares. Industry-funded

research in universities has been rising since the 1980s, and interaction between companies

and universities intensified as a consequence. Important research institutes are: the

Fraunhofer institutes, the Max Planck Society, the Helmholtz Centers, the Federation of

Industrial Research Associations and An-Institutes, which are institutionally linked with

universities.

Similar to the main features of the German economy, the German Innovation System has

been characterised by a high degree of stability for the past decades. However, now the

division of labour among the research organisations, universities, government, and industry

seems to be in a process of re-organisation. Two events mark deep changes: Firstly, the

cutbacks in financial resources channelled from government to RTIs, and secondly, the large-

scale evaluation of research organisations mainly in the direction of assessing the output of

their research efforts. These processes appear to lead to an intensified competition for funds

and towards a greater rivalry among the organisations, because, in many cases it has been

questioned whether the quality and quantity of research results and the organisations

missions justify public funding.


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The changes in the public R&D system and their rationale and motivation are not essentially

different from what happens in other European countries. The situation in Germany is further

complicated, however, by German unification. The merger of the two countries implied the

integration of two very different research systems and resulted in a substantial downsizing of

research capacities. Many East and some West German RTIs were closed down, others were

reduced to considerably smaller units.

Nevertheless, it seems likely that the distinct feature of the German Innovation System, the

existence of a very diversified body of research organisations with a highly developed

division of labour, is not going to be eliminated in the future, and continues to lay a

productive foundation for the development of technology transfer and of the German

economic system.

UK

A substantial part of research capacity in the UK is concentrated in private non-profit

organisations called RTOs; the majority of them are SMEs. Two types of research and

technology services organisations have merged to constitute the category of RTI; in the

current UK context, following privatisation and liberalisation during the 80s, a third type may

be added.

Ex-research associations (RA-type)

Contract research organisations (CRO-type)

Liberalised government labs (LGL-type)

Research associations were associated with a specific sector in the broad sense of a product

type, an industry or a specific application domain for a technology. RAs (or 'co-operative

research associations') were founded - and government-funded - along industry-specific lines

to solve problems of collective concern in the sector, or on cross-sectoral lines to address

national and sectoral issues such as manufacturing efficiency. CROs specialise in a

technological field without necessarily having a dominant connection with any single

industry. R&D are performed for clients on a contract basis. CROs may have been formed as

spin-offs from R&D-intensive firms (for example, CRL was originally the Central Research

Laboratories of Thorn-EMI) or from public utilities (EA Technology in the electrical supply

sector). The RA trajectory has increasingly converged with the CRO-type as RAs have come


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to depend on contract funding, and the term RTI is now widely applied to both types. RTIs

perform collaborative (as distinct from co-operative) projects with consortia of members;

some are active within a familiar US model (members perform R&D themselves and pool

findings through the consortium, convened by the RTI), most are passive, i.e., the initiative

derives from a project steering group, and the RTI performs R&D, supported by funding,

labour, factory time, and under the supervision of the steering group.

Liberalised government labs (LGL-type RTIs) originated as government laboratories or

research establishments. LGLs in the UK have been required increasingly to fund themselves

on a contract basis during the 80s and eventually were made into cost-centre 'agencies' trading

in their own right, privatised, or in some other way brought into a market- or quasi-market

relationship as contractors with a Government customer and non-Government customers.

This trajectory also, therefore, converges in some respects with the CRO type. LGLs differ in

the amount of core revenue that still comes from government (e.g. the defence R&D agency

and the atomic energy agency maintain an effective core funding partly of standing contracts

for operational services to the military).

The size of the UK population of RTOs is difficult to estimate. There is no simple basis for

estimating how many RTOs of the CRO- or LGL-type that do not belong to the association

AIRTO, there are in the UK, either. The AIRTO members have been the reference group for

the identification for former RTIs that due to privatisation have become KIBS firms. In 1998,

the total turnover of the 46 RTOs that are AIRTO members, was 464m. The size of these

RTOs ranges from small (5 staff, turnover 0.25m) to large (650 staff, turnover 42m); the

distribution is skewed (average turnover 11.5m; median turnover 6.7m). In the market for

outsourced R&D, UK RTOs had around 58% of the UK market for extramural R&D in 1996.

In 1991 the total contract research market was estimated at 670m, made up as follows:

RTOs (AIRTO members) 28%, RTOs (non-AIRTO member) 9%, Universities 27%,

Research council institutes 15% and other public organisations 21%.

Sweden

In 1997, R&D expenditure was distributed as follows: universities 22%, government labs 3%,

manufacturing industry 61% and service industry (including industrial research institutes

which are not listed separately) 13%. Universities are the main performers of government

financed R&D in Sweden. There are about 20 government labs linked to different ministries.


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Industrially relevant research at institutes outside the university sector is very limited in

Sweden compared to other OECD countries. The Swedish semi-public industrial research

institute system has been built up and developed since the early 1940's and has become an

important, even if a small, part of the Swedish overall R&D-system. The system includes

around 25 small institutes in terms of employees.

The business sector is the largest R&D performer. The R&D activity is to a high degree

concentrated in the manufacturing industry. Within the manufacturing industry, the R&D

efforts are in turn concentrated on a small number of large manufacturing companies. In

1995, seven large groups (Ericsson, Volvo, Saab, Astra, Scania, Sandvik and Incentive)

accounted for 78 % of R&D expenditure by manufacturing industries.

The industrial research institutes can be characterised as RTOs since they provide R&T (or

innovation) services to industry. Also universities and government laboratories supply such

services to some extent. However, the order of magnitude of this contribution to service

provision is unknown and impossible to estimate. Services are the sector in the national

statistics where firms that provide innovation services, and semi-public R&D-institutes can be

found. This sectors share of R&D expenditure in 1997 was 13%. However, not all service-

firms supply such services and the RTI-share of Swedish R&D seems to be over-estimated.

On the other hand in the R&D-statistics only firms with more than 50 employees are

included. It is reasonable to expect that many RTIs have less than 50 employees. This means

that the share given above in this sense under-estimates the RTIs share of R&D in Sweden.

4 RTIs, KIBS and innovation service functions: Survey results

Postal surveys of RTIs and KIBS firms in Germany, the Netherlands, Sweden, Portugal and

the UK were conceived according to a common scheme, however left a lot of space for

national diversity. A common questionnaire was used, however, some questions were added

by country teams and in some cases the wording (and the categories that structure the answers

in a multiple-choice form) have been adjusted to national peculiarities.

The survey for Norway has been conducted in the context of a broader research scheme, due

to the regulatory constraints which limit possibilities to repeat surveys with similar topics in a

short range of time. Therefore, Norwegian results cannot be directly integrated in the


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evaluation procedures presented here. The Portuguese survey focused on the biotechnology

sector only. This, together with the diversity of units covered in each sample limits the

possibilities of quantitative comparison. Often, qualitative statements and explanations

provide more accurate and meaningful results.

4.1 Sample selection

Table 1 gives an overview of size and coverage of the country surveys. The large difference

between the numbers of cases in the samples reflects the differences in the sizes of countries,

but also the difference in the overall number of institutions in each country which satisfy the

selection criteria. Here the different configuration and operational variety of NISs leads to

unavoidable heterogeneity. The unit of research was supposed to be the budgetary unit, i.e.,

entities that control and manage their own budgets. This criterion could not always be strictly

adopted, for example, if the unit would have been too large or too heterogeneous. In these

cases, other research units were defined.

The low number of cases for each country and difficulties in sample selection emphasise the

pilot character of the surveys. Hence, results for KIBS cannot be considered representative; in

the case of RTIs, coverage was more comprehensive and results can be generalised without,

however, claiming representativity in a statistical sense.


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addition, detailed output categories and services in the context of innovation processes of the

RTIs/KIBS clients cover the functional part of the characterisation of sample organisations.

Questions on the competitive environment, patterns of co-operation and acquisition efforts

deliver background material for the interpretation of data.

4.3 Survey results

4.3.1 Characteristics of the sample population

4.3.1.1 Types of Organisation

The units of research that have been analysed in the surveys show a large variety of

organisational forms. They can be private companies, semi-public or public entities, and

regardless of this distinction, they can be profit-making or non-profit organisations, and they

can be organised as associations, societies or foundations. The type of organisation often has

quite a strong impact on budget configurations and activities. It has to be compatible with the

mission and purpose of the organisations.

The German sample consists of 28 private companies (KIBS) (21% of the sample), 49 public

(37%), and 55 semi-public research organisations (42%). University institutes, which have a

special status and explicit research missions (An-Institute) have close connections with

universities, but they are legally separate units. Of the public organisations, some are

organised as foundations (6%) and about 10% are registered associations (eingetragene

Vereine, e.V.). However, also organisations that declared to be private belong to this last

group (they obviously have to be not for profit companies, since they would loose their status

as a registered association, if they made a profit). Most RTIs belong to larger research

societies, such as the Fraunhofer Gesellschaft, which give varying degrees of independence to

the individual RTI. Some RTIs have no affiliation to other organisations. The sample alsocomprises RTIs that are directly linked with a Ministry or a business enterprise.

In the Netherlands, only RTIs were part of the sample, these include those that directly co-

operate with industry. The organisational forms are quite varied, 53% are public, 12% semi-

public, 7% private, 21% are foundations and 7% have another institutional form (related to

the gross sample of 43 cases). Of the RTIs in the sample, seven are academic research schools

that are higher education institutes, but co-operate closely with industry; some are university


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related research institutes and the rest are involved in more applied scientific research (for

example, TNO).

All RTIs in the Swedish sample are semi-public. The RTIs were identified from a list of 28

RTIs supplied by the Swedish association of research institutes (IRIS). In addition, the

sample comprises 21 so-called R&T firms, which provide innovation services. They will be

called KIBS here.

The science-based research institutes in Norway consist of six larger institutes and about 35

medium-sized or smaller research institutes. The dominant institute in the system is clearly

SINTEF. With its 1,4 billion NOK turnover in 1998 and 1.200 researchers, it is also the

largest research group in Scandinavia. Two large groups of RTIs can be distinguished

according to their research fields: technical industrial units and food-related units. The sample

consists of 30 technical-industrial units, 22 food-related units and 5 others.

The UK sample combines business service companies and not for profit companies in a

business enterprise sector. The government sector comprises institutions that are supported by

seven research councils for different fields of technological or scientific specialisation. In

addition, the higher education sector has been included, however, response rates were rather

disappointing in this section. Altogether, the UK survey population has been divided into six

categories: government laboratory(20% of the sample), higher education institution(13%),

public (government owned) enterprise (3%), not for profit company (29%), and private

enterprise (42%). The first three are categorised as public, the other two as private.

The Portuguese RTIs covered the biotechnology sector only; they present four types of

organisation, university centres (40.5% of the sample), government laboratories (35.1%),

private non profit institutions (8.1%) and ministry departments or government organisations

(13.5%). Given the small numbers of private firms involved in service activities in

biotechnology or related fields, the survey did not include KIBS firms. So the focus was

exclusively on biotechnologyRTIs.

The KIBS firms in all surveys in which they have been considered, included providers of

software, R&D services, technological analysis and testing, engineering services and

consultancy. In Germany, there was a larger group of data processing and software providers;

in Sweden KIBS were mainly providers of R&T services, i.e. software consultants, scientific


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R&D, technological R&D, medical R&D, mixed R&D, construction and other technological

consulting as well as testing and analysis.

4.3.1.2 Size

Table 2 gives an overview of the size distribution of RTIs and KIBS firms. While in the

Portuguese and Swedish sample small and medium-sized entities prevail, in Germany, there

is a bias towards larger organisations. Norway also has a high percentage of small institutes,

however, only researchers were counted, and the bulk of the cases falls into the category 10 to

49 (65% in 1999), i.e., they have to be allocated in the upper part of the category small.

Therefore, the results presented below might reflect the fact that -on average- more smaller

organisations contribute to these results in Portugal and Sweden and more larger ones in

Germany. The average size of units is rather high in Sweden (96 employees for RTIs and 124

for R&T firms in 1999) as well as in the Netherlands (173 employees in RTIs; not in Table

2). Academic and university institutes seem to be significantly smaller than other RTIs. KIBS

firms tend to be rather small, while more RTIs are found in the category large. It should be

kept in mind, however, that the indicator small attributes to RTIs and KIBS that have up to

50 employees, i.e., the organisations in this category can be very small, but also span into

larger sizes of over 40 employees.

Table 2SIZE of organisations in % of respondents

Small medium large

Germany public (RTIs) 21 44 35

private (KIBS) 79 21 0

Sweden public 42 47 11

private 73 17 10

UK public 22 11 66

private 48 30 22

Portugal public 57 29 14

Norway public 90 6 4

Germany, UK: compiled using a size indicatorSweden: only employees: 1 to 50 employees = small, 51 to 200 = medium, over 200 = large.Portugal: different categories


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4.3.1.3 Employees

Apart from the number of employees in an organisation, an important variable characterising

the workforce is its composition in terms of qualification. RTIs or KIBS firms with a high

share of scientists or engineers will provide other services than those with a high share of

technicians or support personnel. As a rule of thumb, it can be assumed that more technically

qualified personnel will support functions in innovation that are closer to implementation,

testing and construction than to research and planning. A larger share of engineers compared

to scientists hints at a more applied and technical orientation of the organisation.

The relation between scientists, engineers, technicians and other personnel varies not only

between countries, but also between organisations. The qualification levels are generally

high, and on average more than half of the personnel have a degree of a higher education

institute. These shares are rising, for example, in 1995 52% of the employees in Swedish

research institutes were either scientists or engineers. In 1999, this figure had risen to 60%. In

Portuguese biotech institutes the increase in the workforce between 1995 and 1999 was

entirely caused by a higher number of researchers, while the number of technicians remained

unchanged. This can either be the result of a change in orientation towards activities that

require more academic qualifications, or of a change in services provided. However, the

absence of personnel with low or medium qualifications can also be due to a division of

labour which allocates most work at the scientist level without giving the possibility to

delegate tasks to support staff. Changes resulting in higher shares of the academically

qualified workforce may therefore express a change towards a more pronounced research

orientation or a change in the division of labour within the organisation. However, in general,

the more research oriented RTIs held larger shares of scientists/engineers than others.

4.3.1.4 Affiliation

The affiliation of RTIs and KIBS can have a positive impact on the resources they can use,

however, it can also limit their sovereignty and control over research activities, funds and

entrepreneurial initiatives.

In the Netherlands 67% of the RTIs are affiliated with a university, 14% belong to larger

research societies (like TNO or TTI), 9% are independent, 5% are linked to a Ministry andanother 5% to other kinds of organisation. 74% of all German RTIs and KIBS are affiliated


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in one way or the other: 41% organisations belong to a research society, 28% are linked to a

university, 20% to a Ministry, 4% to enterprises and 6% to other institutions (some

respondents gave more than one affiliation). Most RTIs in Sweden and the UK are

independent; no patterns of affiliation emerge in the cases of Portugal and Norway.

About 44% of the UK organisations are independent, 24% are affiliated with other companies

and/or universities, 18% with a trade association, 27% with a Ministry or a government lab

(double nominations were possible).

4.3.2 Funding structures in RTIs and KIBS

One of the distinctive characteristics of RTIs is the composition of funds they rely on.

Budgets are usually covered by four sources of financing: basic institutional funding from

public sources, contract research for public entities, contract research for non-commercial

organisations (foundations etc.) and industry contracts. In many countries, institutional

funding is being cut back in favour of project or programme financing. Governments try to

gain better control over research content and resources, to intensify competition between

RTIs and to increase flexibility in the allocation of funds. As a consequence, the resources

available in RTIs for long-term basic research decrease. However, even private KIBS firms

do not rely entirely on industry contracts for covering their budgets, some of them do contract

work for government and/or non-governmental organisations. In a few cases (in Germany and

the UK), KIBS even received institutional funding from public sources. Sometimes, the

boundaries between RTIs (public) and KIBS (private) blur, if foundations or registered

societies underline their independence form government by emphasising that they are

private.

In some countries, it proved difficult to get retrospective information on budgets. Hence, no

data were surveyed for 1995. Very few of the RTIs and KIBS rely on only one source of

funding, and a mixture seems to be quite common also for private entities. Table 3 gives an

overview for five countries.


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Table 3Sources of funding in % of budgets and turnover (averages)

Institutionalpublic

funding

Publiccontracts

Non-com-mercial org-

anisations

Privateindustry

Contracts

1995 1999 1995 1999 1995 1999 1995 1999

GermanyPublic

Private

70

17

67

12

19

13

19

11

3

5

2

4

9

65

13

73

Netherlands

Public 50 49 28 28 10 8 13 18

PortugalPublic 44 42 49 52 1 2 6 3

Sweden

PublicPrivate

120

309

92

5181

UK

PublicPrivate

645

654

1329

1221

97

96

1353

1567

There are considerable differences in the level of public institutional financing between

countries - with Germany and the UK at the high end, the Netherlands and Portugal

occupying a middle range, and Sweden at the very low end. The high share of around 70% of

budgets in German RTIs can be explained by the large number of public and highly

subsidised organisations in the sample (about 35% of the RTIs belong to this category). The

Swedish sample, on the other hand, does not comprise any government owned or controlled

organisations and no university institutes. However, even taking into account variations in

sample composition, the difference between Sweden and Germany hints at fundamentally

different concepts. If public contracts and institutional funding are taken together as public

sources, public research institutes in Germany and the UK show a wider gap, because British

institutes earn less from public contracts than their German counterparts. The Netherlands

move closer to the countries with higher public shares, but in Sweden still the public share in

budgets remains extremely low, and Portuguese RTIs cover almost their entire budgets with

funds from public sources. As a consequence, Swedish RTIs have high shares of industry

contracts, whereas, Portugal, Germany, the UK and the Netherlands only earned between 3

and 18 % of their income from this source in 1999. Not surprisingly, KIBS compete to a

certain extent with RTIs in the field of contract research for public and non-commercial


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entities, get little or no institutional funding and earn the bulk of their turnover from contracts

with industry.

The Norwegian survey used slightly different categories, here basic funding amounted to

16.4% of funding in 1999 (16.6 in 2000). However, this share differs considerably between

technical-industrial units with 11.6% (10.3% in 2000) and food-related units with 31.1%

(32.5% in 2000). Project income was comparatively high at 71.3% (77.4% in technical-

industrial units and 54.1% in food-related units) of budgets. Stable assignments cover about

5% of average budgets, and 7.5% come from other sources.

Public institutional funding decreased in each country (except the UK, where there was a

slight increase for public institutes) between 1995 and 1999 in relative terms. In Portugal, this

has been compensated by a shift towards public contracts, and in the Netherlands and

Germany the decrease in public funds has been accompanied by higher shares in industry

contracts. Most RTIs expect the share of basic funding to go further down with most

substantial cuts being expected in the Netherlands (from 49 in 1999 to 43 in 2002) and in

Germany (from 67 in 1999 to 64 in 2002). Accordingly, industry contracts are expected to

gain a much higher impact in all budgets by the year 2002. Interestingly, this holds for both,

RTIs and KIBS firms, whereas neither of them believes that projects for public entities or

non-commercial organisations will have a much higher share in 2002. Hence, the two

innovation service providers will probably compete more fiercely for business contracts than

for public money in the future.

Results on the development of budget configuration for Portugal are influenced by the

different composition of samples in the years 1995 and 1999. In 1995 slightly less institutes

reported public financing as a source, however, he average share of this source was higher

(43.6% in 1995 against 41.7% in 1999). Contracts from government are the most important

source, it has increased substantially in the four years observed here. Projects for private

firms, on the other hand, have decreased considerably, in 1999 only 30.3% of RTIs

mentioned them as a source, in 1995 the figure had been 44.0%. The overwhelming part of

funds are from government sources, institutional funding as well as project based funding (on

average 92.3% in 1995 and 93.2% in 1999). However, a shift of sources of finance from

institutional funding to project based funding can be observed. In 1999 over 60% of the RTIs

that received institutional public financing covered more than 50% of their budgets from this

source. In the organisations which receive funds from other sources (non-commercial


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institutions and private companies), these sources cover less than 10% of budgets in the

majority of institutions. Their share very rarely is higher than 50%. Interestingly, less

institutes expect to receive funds from government sources in 2002. Those organisations,

however, which expect to receive public funds in 2002 do not think they will contribute less

to budgets than in 1999.

Swedish RTIs and KIBS did not give enough reliable information to analyse 1995 budgets.

However, some conclusions emerged from the survey: The average share of private funding

has not changed since 1995, however, for individual institutes there was more fluctuation.

This share is expected to rise to from 51% in 1999 to 55% in 2002 on the average. 30% of

RTIs budgets and 17% of R&T firms budgets have been financed by public contracts in

1999. Thus, it can be expected that RTIs and KIBS firms compete in this market as well as in

the market for industry contracts. However, only the analysis of functional variables will

show, how big the overlapping areas are.

In Germany, as in Sweden, the competition between KIBS and RTIs shows in the large

overlap in the categories government funded projects and projects for industry. KIBS

firms that receive institutional public funding are a specific feature of the German R&D

landscapes. It can be assumed that these cases refer to institutes for external industry

research, an institution to promote industry related research in the East German New Lnder.

They are organised as private limited liability companies, but are also likely to get

government subsidies. Another group might be foundations that consider themselves private

entities, but get some public support in addition to funds provided by the foundation.

Subsidies are given to start-up firms in R&D service industry that are supposed to

complement a poor R&D basis in (mainly East German) SMEs. This construction has been

chosen in order not to establish a new kind of publicly funded institution. Hence, these

organisations are expected to be financially independent in a few years time.

The situation in the UK is mainly shaped by the fact that traditionally semi-public research

institutes have been privatised. However, these RTIs still earn a substantial part of their

budgets from public contracts. This share has decreased since 1995 and as in other

countries, they rely more heavily on industry contracts, a field of activity in which they

compete with public or semi-public institutes.

Based on the configuration of budgets, typical features of RTIs emerge, i.e., a still

substantial, but decreasing share of public funds. Whereas Dutch, German and Portuguese


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RTIs only have started to earn a larger part of their income from industry, in Sweden and

Norway, this share is already quite high. The figures on budget shares show a rather

traditional distinction between RTIs and KIBS with the former mainly working for the public

and the latter mainly working for the private sector. Changes in this distinction have been

rather incremental than radical in the last five years.

RTIs were traditionally focused on the context of NIS. With the emergence of European

research environment, mainly represented by contract research for the European Commission,

and a general trend towards international integration in many industries, it can be expected

that RTIs will open up their activities towards international markets.

In Norway about one quarter of the turnover of RTIs came from foreign sources in 1999.

However, in the technical-industrial units the share of foreign contracts was considerably

higher at about 40 %.

There is a trend of growing shares of international contracts in Germany and in Sweden. In

the Netherlands and in Portugal opposite trends could be observed between 1995 and 1999. In

Table 4

Average share of foreign and domestic sources in total budgets in %

Germany Netherlands Norway Portugal Sweden1) UK

1995 1999 1995 1999 1995 1999 1995 1999 1995 1999 1995 1999

domestic 94 89 71 76 n.a. 74,1 77 83 90 87 76 77

foreign 6 11 29 24 n.a. 25,9 23 12 10 13 21 22

1)only RTIs

both countries, however, this trend is expected to be reversed: in the Netherlands a share of

28% of funds from foreign sources has been forecast for 2002. In Portugal this percentage is

estimated to be 20%. Internationalisation therefore seems to be important, however, as it

starts from a rather low level, RTIs and innovation service providing KIBS will for some time

be mainly focused on domestic clients. The UK remains the primary location source for

funding for all categories of organisations. However, this focus is much stronger for public

than for private types.


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4.3.3 Composition of Output

The functional characterisation of RTIs and KIBS can be based on output structures as one

determining variable. The respondents were asked to give the share of labourinputdedicated

to four forms of output (contributions to the scientific community, public education, projects

for industry and policy consulting). They were also supposed to document changes between

1995 and 1999 and to give an estimation for the composition of output in 2002. This implies

the assumption that labour input dedicated to produce a certain kind of output will result in

this output in exactly the same proportion. This approximation is often used for the

measurement of service output due to the lack of countable output units.

Table 5Average shares of labour input dedicated to... (in %)

Contributionsto scientific

community

Publiceducation/

training

RD&T forindustry

Policyconsulting

Otheractivities

1995 1999 1995 1999 1995 1999 1995 1999 95 99

Germany

public

private

46

16

43

19

21

21

20

17

15

50

17

48

18

13

20

15

Netherlan

ds

44 4125 21 12

20 20 19 -

Portugal 58 5427 23 9

18 4 4 2 1

Sweden

public

private

46 42

5

8 8

5

41 44

74

4(3.6) 4(4.4)

4

3

12

UK 12 132 5 47

56 36 27

Contributions to the scientific community are the main output of RTIs in all the countries

participating in the survey. In 1999, the average share of this category ranged from 41% of

total output in the Netherlands to 54% in Portugal. Even Sweden as a country with low shares

of public funding, contributes substantially to increasing the publicly accessible stock of

knowledge. The same holds for German KIBS which combine a low share of public funding

with a considerable output in form of scientific publications. While German, Dutch and

Portuguese RTIs dedicated between 20 and 25 % of their output to activities in the public

education system or for training purposes. This percentage was considerably lower in Sweden

(6%). Projects for industry amounted to slightly less than one fifth of the output in German,

Dutch and Portuguese and to more than two fifth in Swedish RTIs. With respect to projects


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for public entities, Sweden and Portugal differ significantly from the other countries, here

only 4% of output falls into this category, while in Germany and the Netherlands about one

fifth of output are dedicated to policy consulting. Obviously, in Sweden a large share of

public contracts and research for industry still allow to publish results. Compared with the

average share of public basic funding, relatively small parts of the research are dedicated to

scientific publications in Germany. Here, education and policy consulting take a larger share

than in other countries.

The configuration of output can be determined by the research fields occupied by the

organisations in the sample. Countries with a high impact of institutes that focus on industrial

productivity and technology are more likely to produce output for industry than those with

more institutes specialising in health, social sciences or spatial planning. Sixty % of the

Swedish sample specialises in construction and other technological consultancy, one third in

software consulting. There are no social sciences involved. In Germany, only 32 % of the

sample list industrial productivity as their specialisation, however, almost 60% engage in

natural sciences, health care and social sciences have been given as research field by

about one fifth of the sample. The Netherlands show a more even distribution of

specialisation: 30% of the RTIs give industrial production as their field, 25 % health care.

Spatial planning has been given by 20% as their main research area, and 10% are engaged

in social sciences. No clear interpretation can be given with respect to the likely addressee

of output for research fields, such as environmental protection, agricultural production,

energy and other civilian research. In the UK sample, private organisations are to a large

extent engaged in research on industrial productivity and technology, environmental

protection and defence. Public entities showed no clear concentration on a specific field,

but were more often found in space research, societal structures and relations and non-

target-oriented research than the private ones.

Almost all countries show a trend towards decreasing shares of scientific work and increasing

shares of innovation related services for industry. This trend is expected to continue over the

next few years. It is consistent with the expected growth of the share of industry contracts in

RTI budgets. Public education has become less important in the Netherlands as well as in

Portugal, while the share of policy consulting is likely to remain unchanged. RTIs in Sweden

expect the share of scientific contributions in their output to fall until 2002 (from 41,5% in

1999 to 365.9%), KIBS firms expect it to rise (from 5.2 to 6.5%). In the UK changes in the

configuration of output are particularly pronounced, large increases in output to industry


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between 1995 and 1999 went along with an equally impressive decrease in policy consulting.

In comparison, RTIs in Germany and Sweden show much more stable output structures. The

changes in Portugal are mainly due to differences in the samples between the two reference

years.

In addition to these rather broad output categories, a list of detailed output activities was

provided, and RTIs/KIBS were asked to state the relative importance of the subcategories.

Contributions to the scientific community are differentiated into three sub-categories: (1)

journal and book publications, (2) research reports for the general public, and (3) conference

contributions. There is no general preference for any of these sub-categories (see Table 6). In

Sweden RTIs consider research reports and conference contributions as more important as

books and journal publications. This underlines the results of the previous question which

characterises Swedish RTIs as focused on applied rather than on theoretical research. For

KIBS all three categories are of no or little importance; and publications are the least

important category. In Germany publications are by far the most important output for the

organisations in the sample, but also conference contributions occupy a high rank. A very

similar picture has emerged for the Netherlands. Here, the academic output in form of

publications is even more important than for German RTIs.

Contributions to public education and training were divided into (1) internships and the

support of master theses, and (2) support of PhDs and postdoctoral qualifications. Again,

there is not much difference between German and Dutch RTIs, in Germany internships were

ranked slightly higher in importance than doctoral theses, in the Netherlands the relationship

between the two categories was reverse. Internships as well as the training of doctoral and

post-doctoral researchers play a less important role in Swedish RTIs compared with the other

two countries documented in Table 6.

Projects for industry were further divided into: (1) technology consulting/technology

transfer, (2) construction/testing, (3) process optimisation, (4) management consulting

and (5) certification8. All categories are attributed less importance than the contributions to

scientific community categories, with the exception of Sweden, where technology transfer

and construction score particularly high, even with respect to academic output. The ranking

put technology consulting and construction in the first two places in all three countries.


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Process optimisation only gained low-to-medium importance in Germany and the

Netherlands, it was considered much more important in Sweden. Here also certification

ranked slightly higher than in the other two countries. Process optimisation, management

consulting and certification are by far less important than technology and construction related

activities for RTIs in the three countries considered here.

With respect to projects for public bodies again, Germany and the Netherlands have to be set

apart from Sweden. In the first two countries, the formulation of programmes is slightly more

relevant than the other categories, programme implementation and programme evaluation. In

Sweden RTIs consider implementation as more important than the other two.

KIBS firms were only studied in Germany and in Sweden. Table 7 shows the results for

detailed output categories (the policy consulting categories are not detailed here, since the

importance attributed by KIBS firms was so low that further dis-aggregation did not make

sense). German KIBS firms show surprisingly high scores for publications and conference

contributions. Obviously, the presentation of research results plays a major role in marketing

for these firms. Whereas German KIBS contribute to a certain extent to public education

more intensively by supporting internships than by engaging in post-doctoral qualifications,

these activities are ranked rather low in Sweden. Swedish KIBS present a strong dominance

of construction and testing services for industry, whereas the other industry related output

categories are much less important, and also score considerably lower than in German KIBS

firms. Management consultancy is ranked significantly higher in Germany than in Sweden,

and certification is marginal in both countries. German KIBS still attribute some importance

to internships and the support of master theses, but much less to doctoral qualifications. In

Sweden both categories score rather low, obviously, the firms do not consider to have a

function to fulfil in these fields.

An interesting distinction has been made for the Swedish sample between RTIs that compete

with R&T firms (the KIBS group selected in the Swedish sample) and those that do not. The

competing institutes claim a high importance of construction and testing services and the

optimisation of processes more often than the not competing ones; for technology consulting

8

The category non innovation relevant services for enterprises yielded sensible results only for Germany, it will

therefore not be further evaluated here.


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33

Table 6Importance of output categories for research institutes

(% of respondents)

Forms of Output Germany Netherlands

low medium high low medium high

magazines, book publication 11 23 66 6 19 75

research reports for the public 26 49 25 33 39 28

conference contributions 12 36 53 8 33 59

internships, master thesis 17 24 59 31 19 50

PhDs and post-doctoral qualification 25 17 58 28 19 54

technology consulting / technology transfer 45 23 32 44 25 31

construction /testing 52 20 28 44 28 28

process optimisation 65 16 18 73 25 2

management consulting1)

79 12 10 75 22 3

Certification 90 5 5 92 3 5

studies, formulation of programmes 55 21 24 44 31 25

support, realisation, implementation of

programmes

69 18 13 58 28 14

evaluation of programmes 65 23 11 56 28 16

Italics: estimation1

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RISE Project - Research Institutes in the Service Economy - Wp2 Functions of Services Rtos