STI policy rationales - dimetic.dime-eu.orgdimetic.dime-eu.org/dimetic_files/Maast2011Lbach1.pdf · STI Policy rationales - L. BACH 1 STI policy rationales Laurent Bach [email protected]

STI Policy rationales - L. BACH 1

STI policy rationales

Laurent Bach [email protected]

BETA, University Strasbourg/CNRS

Maastricht Session / Week 2 – Oct 2011


Public research infrastructure (universities, research centers, …) research activities incentives for researchers

Technology procurement policy

Purchase/pioneer use by public entities (administrations, organisms, public companies,

Support to cooperation between firms and public research "valorization" - Tech transfers joint research activities

Support to cooperation between firms

Funding of S, T & I activities grants loans at preferential rate reimboursable advance (conditionned to success) loans garantee equity fundings/seed, risk capital export credits

Setting the scene…


Tax system research tax credit tax relief for technology-related purchase income tax on funds providers (business angels, foundations…)

Legal and regulation aspects IPR

Norms, technical reglementations Reglementation on foreign trade (techno transfer, barriers,…)

Competences building (higher) education system

Diffusion of scientific and technical information libraries, data base, info network

Standard, plateforms, common langage

Supporting infrastructures technical, legal, management …assistance and services scientific/technical facilities


LEVEL OF INTERVENTION • up-stream = science / downstream = innovation • innovation in general / specific innovation • target population • creation / optimisation - adaptation - diffusion

RULES • creation or not of dedicated body • criteria and modalities of selection of beneficiaries • interactions between managing bodies and beneficiaries • interactions between beneficiaries (cooperation) • funding schemes • IPR / diffusion of outcomes …

Organisation, rules, modalities … = "institutionnal arrangement"

Sectoral policies : education, industry, regional, competition…

Entrepreneuriship "climate" (public administrative streamline-simplication, awards, labor market, etc)

Promotion of social consensus supporting science and technology

+


Long history, recent emphasis (WW II, 80/90s) Many different tools and combination of tools (cf Georghiou-Edler tab) Fashion aspects, policy imitation and diffusion Multiple stakeholders Multiple decision levels

A lot of typologies : Mission - diffusion, Vertical - horizontal, Supply side - Demand side, local – global, general specific, etc (see Ergas 87, Bodas Freitas – von Tunzelmann 2008…)

NEED OF THEORETICAL BACKGROUND : IDENTIFICATION OF RATIONALES, which to some extent are common to the "S", the "T" and the "I" dimensions of policy

Science - Technology - Innovation Policies :


STI policy rationales

Maastricht Session / Week 2 – Oct 2011

• The basics : simple rationales for STI policy • The "traditional" opposition between paradigms • "Policy mix" and "rationale mix" • The case of EU policy


• Independance, security, prestige

• Growth / industr ia l deve lopment through competitivity

• Social development (education, health, jobs, Quality of Life,...)

• Scientific progress per se

«!Simple!» rationales for State intervention in Science, Technology and Innovation

(Pavitt - Walker)

1. The basics : simple rationales for STI policy


• High (and increasing) R&D costs • Uncertainty on feasibility, results, economic value • imitation, knowledge leakage etc • demand reaction

Lack of incentives for private R&D investment: = investment/profitabilty profile does not fit the "normal" private investment/profitability profile (NPV, payback, RoR…)

! "too low" level of private investment as compared to the needs of society

! PUBLIC INTERVENTION

simpliest formulation of "market failure" argument

risk

• long term rentability

Investment in STI, from innovator standpoint:


STI Policy rationales - L. BACH 9 Source : Philippe Bourgeois DGE/SPIC!



Theoretical foundations Main features «!Failures!» justifying State intervention Consequences of these failures Basic principles for State intervention (Tools / instruments)

Neo-classical / standard framework (NC) vs Evolutionist structuralist framework (ES)

• Detailed analysis of two paradigms

• Attempts to identify causal beliefs including :

2. The "traditional" opposition between paradigms


Standard / Neo-classical framework : theoretical foundations - 1

Neo-classical / main stream economics + Theory of incentives : information asymetries + optimal contracts Transaction cost theory : governance cost + «!at the fronteer!» :

(1) New growth theory (ROMER, LUCAS, AGHION, …) : Endogeneisation of S&T Importance of supply of knowledge (human capital, education, RD, infrastructure…) as a source of growth But focus on information, incentives, «!mechanical!» aspects => real departure from standard approach ?



(2) (New) Economics of science (DAVID, DASGUPTA,…) : • inherent and specific properties of the information : - Imperfect information (information paradox) - Non-rivalry and non-excludability (information as a "public good") => problem of property right - Low cost of REproduction

• new line between S-related and T-related activities and outputs : - the practices of diffusion associated with incentive schemes - the choice of the optimal level of codification (cf reward system) - the higher uncertainty in the production and use of scientific results - the fact that results from basic research are considered mainly as

a information input for applied research (more generic usefulness) - higher indivisibilities in science production - longer term perspective of science => possible background for distinction between S and T and I policies

Standard / Neo-classical framework : theoretical foundations - 2



"Linear model"

• the "holy sequence" of clearly distinct steps • fit with classic distinctions :

technology push

BASIC RESEARCH

APPLIED RESEARCH

DEVELOP- PMENT

"ON THE MARKET" Production Sales

USE BY NON-INNOVATORS Imitators, Adopters clients

invention innovation diffusion

science technology market

demand pull

Nature of knowledge (public vs private), repartition of roles (State – univ - PROs vs firms), incentive mechanisms (Merton vs market) …



Comprehensive and extremely coherent «!paradigm!»

• Market : unique mode of coordination and of selection • State is «!outside!» • Equilibrium • Static analysis • Optimizing rationality • Input - output perspective / linear model of innovation • Central focus : optimal allocation of resources • Normative reference : welfare/Pareto analysis

• Research (S,T,I) as production of output = information + information as an input for downstream activities

Standard / Neo-classical framework : Main features



Standard / Neo-classical framework :

Knowledge (scientific, technological, product-embedded etc) + production of knowledge + use of knowledge exhibit some characteristics not fitting with "ideal" characteristics => market/price mechanisms cannot work = market failures => consequences for social optimality => basic principles for public intervention



• Imperfect information (information paradox) • Non-rivalry and non- excludability => problem of property right • Low cost of REproduction • Indivisibilities, long term

• Lack of information on results, use and demand => high risk • Long term rentability • High cost • Problem of appropriability of S&T “products” and of gains from innovation => knowledge externalities => market externalities => network externalities

Reducing uncertainty (environment, S, D) Substituting to the market (S and D sides) (sharing risk and cost) Allowing for internalizing externalities (property rights, cooperation)

Standard / Neo-classical framework : failures, consequences and principles for action



Evolutionary theory : focus on evolution of technology, firms, industries, etc diversity generation / reproduction / selection processes

Systemic / Network approaches (N/L SI, clusters, etc) : focus on coordination, complementarities, variety of institutions

Knowledge-based economics : focus on knowledge creation, sharing, processing, access, diffusion, etc / cognitive processes

Evolutionist structuralist framework : theoretical foundations

Different approaches from different disciplines (mono or multi-disciplinary) with common features and specific focus



Economics of knowledge : basic concepts

1. Knowledge : definitions («!justified true belief!») 2. Information vs knowledge 3. Tacit vs codified knowledge 4. Knowledge codification : advantages and limitations 5. Absorption vs emission capacity 6. Individual vs collective knowledge : routines and

competences 7. Cognitive distance 8. Knowledge as economic good : private vs public

knowledge


Justified true belief - intellectual process - sensory experience

Objectivist view • K as theory, derived from intellectual process • K as asset • Epistemology of possession • K as "truth", as "facts" • "content" theory of knowledge • K is separable from the context of its creation

"objective" "disembodied"

• " categories of knowledge

Practice-based view • K as practice/embedded in practice • Knowing as process (knowing/doing) • Epistemology of practice • K as socially constructed • "relational" theory of knowledge • K is NOT fully separable from the context of its creation

"subjective" "embodied" (people, culture…)

• K is multidimensional: objects, writings, human…and more…

Can be used with aim Accumulation - decumulation


"interactive model"

• More complex processus : feedback, overlaps • "Innovation" at all stages • Specific role of knowledge base: specific to each actor/organisation accumulation processes (capitalisation, learning, forgetfulness) => "path-dependancy" (example : Kline-Rosenberg model)

• Classical distinction put in question • Linear model = one possible pattern within the interactive model • New perspectives on Nature of knowledge, repartition of roles, incentive mechanisms …



NC framework

• Market : unique mode of coordination and of selection • State is «!outside!» • Equilibrium • Static analysis • Optimizing rationality • Input - output perspective / linear model of innovation • Central focus : optimal allocation of resources • Normative reference : welfare/Pareto analysis

• Research (S,T,I) as production of output = information + information as an input for downstream activities

• Variety of modes of coordination and of selection • State is part of the game • No equilibrium • Dynamic analysis / Path dependancy • Other forms of rationality • Inter-active model of innovation • Central focus : creation of resources + knowledge (" information) = fundamental resource • Unclear normative reference : «!adequate!» system, processes, cognitive capacities ? environment ensuring «!good trajectories!» / «!good paradigm!» ? • Knowledge coming from anywhere in the system (not only Research)

Evolutionist structuralist framework : main features



• inadequate selection processes • lack of coordination, complementarities, lack of institutions, speed of adjustment between institutions and S&T... • misallocation of resources and cognitive attention between exploration and exploitation • knowledge creation, processing, distribution failures : codification, circulation, emitting/ absorptive / articulation capacity, structure of knowledge...

• lack of diversity • “negative” lock-in • difficulty for paradigmatic changes • knowledge, social, institutional..”gaps”

Not so coherent : Cognitive capacity of actors : development, orientation, adequate conditions of use...

Evolutionist structuralist framework : failures, consequences, principles for action



Common ?

Specific ? Specific ?

Reducing uncertainty (environment, S, D) Substituting to the market (S and D sides) (sharing risk and cost) Allowing for internalization of externalities (property rights, cooperation)

Cognitive capacity of actors : development, Orientation, adequate conditions of use...

ES framework NC framework

Tools / instruments

Optimal allocation by market (or pseudo-market) mechanisms

Social optimality

Diversity, selection, cohesion

«!good!» trajectories «!good!» transition between paradigms

Normative reference ?

State "a priori" in/out of system ?

No Yes

Out In



Table 1.2 : The two dominant paradigms : failures, consequences and principles for policy actio

• Lack of information on results,use and demand => high risk

• Long term rentability

• High cost• Problem of appropriability of

S&T “products” and of gainsfrom innovation => knowledge/ market / network externalities

• Reducing uncertainty (environment, Supplyand Demand sides)

• Substituting to the market (Supply andDemand sides) : sharing risk and cost

• Allowing for internalization ofexternalities : property rights, cooperation

• Misallocation of resources andcognitive attention betweenexploration and exploitation

• Inadequate selection processes• Systemic/institutional failures :

coordination, complementarity,lack of institutions, speed ofadjustment between institutions andS&T...

• Knowledge creation / processing, /distribution failures : codification,circulation, emitting / absorptive /articulation capacity, structure ofknowledge...

• Lack of diversity

• “Negative” lock-in

• Difficulty forparadigmatic changes

• Knowledge / social /institutional..”gaps”

Not so coherent :

• Cognitive capacity of actors: development, orientation,adequate conditions of use...

Diversity, selection, cohesionOptimal allocation by market (or

pseudo-market) mechanisms

Social optimality « Good » trajectories, « good »transition between paradigms

The NC framework :MARKET FAILURES

The ES framework :LEARNING/SYSTEM FAILURES

POLICY PRINCIPLES

POLICY TOOLS / INSTRUMENTS(see Table)

• Imperfect information(information paradox)

• Non-rivalry and non-excludability

=> problem of property right

• Low cost of reproduction• Indivisibilities, long term

Failures and rationales for policy action



Interpretationin the NC framework

Interpretationin the ES framework

Diffusion of

Information Knowledge

Public intermediaries ofInformation Knowledge

substitute to private investment for production of scientific output considered as public good

Public labs in Science increase and change the available knowledge-base by reinforcing exploration; involves codification; change emitting/absorptive capacity of labs

partially substitute to private investment for production of technology considered as non-rival and partly excludable good

Subsidy to R&D activities of firms increase and change the available knowledge-base by reinforcing exploration; involves codification; change emitting/absorptive capacity of firms

substitute to private demand (limited in time) Public procurement orient selection process by reinforcing exploitation

full guarantee of appropriability of technology considered as non-rival and partly excludable good

Property rights partial change of emitting/absorptive capacity

Cooperationfirms, all typesfirms and public labs

substitute to private investment for production of human capital

Education increase cognitive capacity

Emergence of standardsand plateforms

orient selection process; involves codification

Norms, regulations orient selection process; involves codification

Other related policies orient selection process

internalize externalities : monetary (vertical coop.), knowledge (horizontal coop.); diffusion of information; risk/cost sharing

change distribution and sharing of knowledge; reinforce coordination and complementarity; change emitting/absorptive capacity

idem idem;reinforce coordination

Basic tools and instrumentsof S&T policy

reduce uncertainty and asymetries change the available knowledge-base; involves codification; change distribution of knowledge

STI tools re-interpreted 2. The "traditional" opposition between paradigms


• Different rationales adressing different dimensions ? ex extented from A. BONACCORSI :

Beyond this NC / EC opposition : need to mix approaches ? - 1

(a) Incentives: neoclassical theory of market failure

(b) Factors of production: endogenous growth

(c) Processes and coordination: neo-institutional and evolutionary

(d) Learning: knowledge-based economics

3. "policy mix" and "rationale mix"


! Tools which aim at fostering cooperation between actors : sharing/complementarity of costs, risks, information, joint creation of / distribution of knowledge ?

! Public research : beyond «!pure public good!argument!» ?

! Patents : Protection/diffusion dilemna, signaling, intangible base for cooperation ?

• Different (mix of ?) rationales underlying one given tool/instrument




" Knowledge as information + appropriability pb

! Patents = appropriability means, strong property right=> to enhance individual motives (individual inventor), BUT should favour global knowledge production

+ appropriability / diffusion (+ cumulativeness) dilemna => Various length and scope of patent

Patent in NC revisited approach :

The case of patent : NC vs ES framework - 1 (based on [COHENDET-MEYER-KRAHMER, 2004 - PENIN, 2004])



" Patents = appropriability + other dimensions:

o negotiation role (bargaining power)

o first step for cooperation/knowledge exchange

(balance of power between members of network)

o Signalling/disclosure device/reputation

Example: communities (free-software) produce semi-public goods (common but not available to all)

Patent in Knowedge-based approach (1) :


The case of patent : NC vs ES framework - 2


! the key role of institutional settings (IS=norms, rules, standard)

! IS govern incentives to produce and diffuse knowledge

! IS shape the codification processes and thus the costs of transfering knowledge (science vs. industry)

=> If incentives to build knowledge in a community

are strong, then appropriation is marginal

Reconsidering incentives (ex. free software) :





! Is patent still a valid policy tool ? new dimensions of patents new uses made by firms => new «K.O. failures» ? does patent help to overcome those «K.O.!failures!»? If yes, is it an appropriate tool? (ex. : too expensive as a tool to foster cooperation!)

! Patents hamper diffusion (traditional view), BUT also the production of knowledge (ex: IPR on software; IPR on fragments of gene before identification of product => no product => go beyond cumulativeness of information : importance of common cognitive platforms).





• cooperative agreement /funding / IPR : NC : same failure adressed ? too many failure remedies ? (ex ante vs ex post reward vs patent ?; limit fundings to transaction/cooperation costs ?...)

• policy oriented towards SME : Are supposed SME specificities grounded in rationales ?

• Lisboa agenda and EC "policy mix": "the combination of policy instruments, which interact to infuence the quantity and quality of R&D investment in public and private sectors" (http://www.policymix.eu/policymixtool/)

• Research Infrastructures: sharing cost, create opportunity for networking, research outputs, research tools… (http://cordis.europa.eu/infrastructures/)

• The renewal of Demand side policy (cf Georghiou-Edler paper – next 3 slides)

• Mixing tools/instruments and mixing rationales ?




More on the "I" side Return of Demand Side policy in the policy arena (EU, UK), while still present in US and Japan

Definition : All public measures to induce innovation and/or speed up diffusion of innnovations through increasing the demand for innovations, defining new functional requirement for products and services or better articulates demand

The case of Demand side policy - 1



• Lack of incentives on demand side => fundings (NC) • Asymetries of information, transaction costs => increase and diffusion of info (NC) • Demand is often "local" and should be at least partly "locally" answered :

# heterogeneity, path dependancy, idosyncracy etc # local Innov System, spillovers, etc # user-producer interactions, "lead" user, etc

=> System and cognitive failures • "Good directions" towards orienting innovation processes => Selection failures • Demand and Knowledge base should be aligned => System and cognitive failures (standards, etc) • Inter- gvtal department strategies and coordinations

=> System failures


The case of Demand side policy - 2


Mix of STI policy tools: Basis = public procurement policies (general vs strategic, direct vs catalytic, commercial vs pre-commercial) Combined with supply side fundings - technology plateforms …

Policy mixes : Improvement of public services and policies : better answers to societal need through innovation = sustainable development, health, etc backed up by STI policy


The case of Demand side policy -3


! ST&I vs competition policy (monopoly, cartels, public aids, public procurement…)

! ST&I vs education policy (Univ.-PROs, longlife training…) ! ST&I and environmental/sustainable dvpt oriented policy ! ST&I and …

Mix between large policy areas : boundaries, overlaps,

complementarity



Interaction between two types of rationales in the policy design, making and implementation processes

Production policy rationales

Governance policy rationales

Towards a «!rationale mix!» framework for real policy processes

(from EPOM / Prime NoE project http://www.prime-noe.org/)



Interaction between two types of rationales :

1. “Production policy rationales", i.e. causal beliefs, about the production of knowledge and set-up of policy instruments; providing a theoretical framework for understanding knowledge creation and justifying public intervention (failure argument) and the type of policy proposed

what was covered in first part of lecture

Economics - Sociology of science "neo-classical paradigm" vs “evolutionist structuralist approach” (Lundvall & Borras 1997; Bach & Matt, 2005 …)



• Traditional paradigm (V. Bush) Focus on fundamental research, Justification of public research : defense, prestige, general welfare, knowledge per se + «!pure public good!» • Neo-classical / market paradigm (Arrow + Dasgupta-David) Distinction between fundamental research (open science, knowledge as public good) and technology (property right, Knowledge as private good) + competion / incentives / flexibility of resources / cost-cutting; Justification of public intervention : market failures • System / Network paradigm (Lundvall, Nelson, CSI…) Importance of the complementarity of /the links between multiple actors : coordination, alignement of objectives and resources…; Justification of public intervention : system failure • Evolutionary approach (Nelson & Winter, Dosi, Metcalfe…) focus on the generation (mutations), distribution (diversity) and diffusion (transmission) of changes + fitness and co-evolution as compared to the environment (selection mechanisms). diversity generation, diffusion • Knowledge-based approach (Cohendet Meyer-Krahmer) Knowledge as collectively produced, shared, distributed + multi-dimensional knowledge with tacit dimension + importance of learning processes; Justification of public intervention : learning (cognitive) failures



Strong connexions to sociology of science (Benner and Biegelbauer in EPOM [2005]) :

• the simplest linear model, distinguishing Research and Economy, then enhanced by the Mertonian tradition; • standard linear model of innovation, with sequential (technology push or demand pull) link, and clear distribution of roles between actors along the steps of the model; • the interactive model stream, including Gibbons mode 2, Triple Helix and the like; • the constructivist approaches.



• Interaction between the actors – the Triple Helix (Loet Leydedorff Henry Etzkowitz)

Research Politics

Business

Researchers who are prepared to exploit their knowledge. Universities that profile their education and research.

Legislators who influence the conditions under which companies and researchers are working. Politicians who allocate resources for research and development. Local authorities and county councils who set out to facilitate the establishment of new companies and make their local areas pleasant places to live.

Entrepreneurs who recognize the value of new knowledge. Managers who can identify market requirements and have the courage to invest their resources. Investors who are prepared to wait for a return on their investments.

Adapted from M. Benner [2005]

Separate institutions / intermediaries - Modes of direct communications - Mixed roles



Interaction between two types of rationales :

2. “Governance policy rationales”, reflecting the governance paradigms ruling state intervention in general; not policy sector specific but have encompassing validity; they often correspond to political traditions and culture

Political science - Public management



• Centralism / technocratic model Centralization of decision processes Highly professionalized civil servant Command & Control model strong hypothesis on the capacity of State in terms of access to information, processing of information and action • Network State model with a focus on coordination role, decentralisation, enablement skills, public/private cooperation, self-regulatory approach • New Public Management model Clear policy target/goals Clear budget Systematic performance analysis Clear and explicit decision processes • Decentralized multi-level model : multiple centers of decision with budget, staff…(not necessarily hierarchical) • Decentralized multi-space model : multiple and heterogeneous public & scientific interest groups (public opinion, consumers, patients, NGO,…)



Production Rationales

Governance Policy

Rationales

Policy tools

Implementation

Policy-design & making

Policy Design & making

frame

Policy- design & making

Incl. Monitoring and evaluation tools (+ "no instrument")



• Public influence and the business point of view • "Fertile soil", i.e. background and receptivity of policy makers (political preferences, culture, education,…) => selective attention and cognitive choices of policy makers • Turnover of political personal and of technocrats • Policy entrepreneurs • Boundary institutions • Examples, images and stylised facts ("prototype embodying knowledge") • Reports and other white papers • "Tactical interests" • Policy-making procedure and its "hidden side" • Competing rationales in government

Policy design/making frame



Not static / sequential / "once and for all"

Dynamics : • Path-dependancy • Learning and feed-back loops • Continuous (minor) changes • Major revisions triggered by : # inefficiency observed in the system # major changes in ideology or rationales # diffusion of ideas («!emulation!», benchmarking) # pressure related to external shocks or the public

=> time matching between policy cycle / ideas cycle (windows of opportunity



mix dynamic coherence

co-evolution Production Rationales

Governance Policy

Rationales

Policy-design & making

Policy tools

Implementation

mix

mix

mix

mix mix



• WEBSITE RECHERCHE (DG Research) – GENERAL : http://ec.europa.eu/research/index.cfm?lg=en – CORDIS (for current and potential participants) : http://cordis.europa.eu/home_en.html

• WEBSITE INNOVATION (DG Entreprise & Industry) : – http://ec.europa.eu/enterprise/policies/innovation/index_en.htm

• facts-figures-analysis -> studies, European Innovation Scoreboard, PROINNO (access via http://proinno.intrasoft.be), Innobarometer…

• innovation policy (including Innovation Union oct 2010) • supporting measures

• SOME ECONOMIC STUDIES : – http://ec.europa.eu/research/social-sciences/policy-briefs-research-achievements_en.html

• HISTORY OVERVIEW : – origin - 2005/06 :

Rossi, Federica, 2007, "Innovation policy in the European Union: instruments and objectives", Online at http://mpra.ub.uni-muenchen.de/2009/, MPRA Paper No. 2009, posted 07. November 2007

– 2005/06 - 2009/10 : Møller Kirsten, 2010, European innovation policy: a broad-based strategy?", Transfer: European Review of

Labour and Research May 2010 vol. 16 no. 2 155-169 (see essentially the first part of the paper) – "now" :

websites Innovation Union (see above, entry via DG Research or DG E&I) doc COM(2010)546 Europe 2020 Flagship Initiative Innovation Union

4. The case of the EU policy


• Policy design : "EC" system multi-DG, Green papers, COM, High level groups etc

• Policy implemenation : multiplicity of DG, programmes, plans, initiatives – "guichets" + EC bureaucracy

• Evolution or old recipes ? • Rationales : strong ES influence, especially N/R SI

(as OECD) " World Bank-US, … / few mainstream economists, but growing influence

• # nothing => RD => RD vs I => RD & I => I


background


HISTORY OVERVIEW - 1

• 75-early 80s : ad hoc, energy • 80s :

– RTD "pre-competitive" / Innovation – Collaborative R&D projects, dissemination – RTD Framework Prog. 1 : 84-87, FP2 : 87-91 – Coordination of community RTD actions – Still energy + ICT + biotech + Indus Techno/

materials + misc.



• 90s : – RTD for Industrial competitiveness (FP3

90-94; FP4 94-98) – Rise of the "European paradox" (myth ?) – GREEN PAPER ON INNOVATION COM(1995)688, FIRST ACTION PLAN FOR

INNOVATION IN EUROPE 1996 : "foster an innovation culture", "establish a framework conducive to innovation", "better articulate research and innovation"

– Multiple sectoral priorities




• Early 2000s : – Lisbon-Barcelona strategy 2000-02 : "Europe as the most

competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion"

– Increasing focus on Innovation + social needs, still "European paradox"

– INNOVATION IN A KNOWLEDGE-DRIVEN ECONOMY COM(2000)567, INNOVATION POLICY: UPDATING THE UNION APPROACH IN THE CONTEXT OF THE LISBON STRATEGY COM (2003)112, TOWARDS A EUROPEAN RESEARCH AREA COM(200)6

– Multiplicity of measures (see ROSSI 2007 p 6-9) – RTD (FP 5 98-2002 – DG Research) vs Innovation/SMEs etc

(DG Enterprise) – Emergence of the European Research Area idea – Multiple sectoral priorities (incl. Soc Sc, nano, transport)




• mid-2000s : – A very broad view of innovation…and new focus

on basic research (ERC-European Research Council)

– Exponential devpt of measures, very complex structure of funds, programmes, initatives, forum etc – integrated view ?

– ERA, New instruments … (FP6 2002-2006 with a new structure, FP 7 : 2006-2013)

– MORE RESEARCH AND INNOVATION – INVESTING FOR GROWTH AND EMPLOYMENT COM(2005)488 PUTTING KNOWLEDGE INTO PRACTICE: A BROAD-BASED INNOVATION STRATEGY COM(2006)502




• Several presentations of overall logic and of instruments (ex next 2 slides)

• Based on COM(2006)502 : – Framework conditions – Supply-side measures – Combination of supply-side and demand-side

measures

• EIB-European Investment Bank

Structure of EU STI policy


STI Policy rationales - L. BACH 55 M. Getsiou EC DG E&I



• State-Aid reform • IPR-Intellectual Property Rights • Educational reforms • University reforms • Innovation poles and knowledge-driven

industrial clusters

Framework conditions



• Access to finance for innovative SMEs!• EIT-European Institute of Innovation and Technology!• FP 7 !

– incl. Art 185(ex169), ERA-Nets, JTI-Joint Technology Initiatives (IMI, ARTEMIS, CleanSky, ENIAC, FCH) based on ETP-European Technology Plateforms and SRA-Strategic Research Agenda !

• Policy approach to innovation in services!• Innovation support services to enterprises (in particular

SMEs) Enterprise Europe Network!• Cohesion policy / structural funds!

Supply-side measures



• LMI-Lead Market Initiative for facilitating the emergence of lead markets!

• CIP-Competitiveness and Innovation Programme for promoting wider access and better use of new technologies ready for market uptake!

• Public procurement!• Creating a proactive standard-setting policy!• Better regulation for new technology and emerging

markets (esp. using ETP-European Technology Plateforms and "Sectoral Innovation Panels")!

Supply-Demand combined measures



CEPS Task Force report 2010


EIB fundings instruments



FP 7: #54 Bn

2007-13: innovation related EC activities : 16.5% of EC budget


• IPR system still costly and fragmented • Standardisation/norms not synchronized with research/maket needs • Fragmented Venture Capital, low equity funding • Complex EU programmes & governance landscape • Complementarity / coordination with national policies • Fragmentation of efforts, resources • Broadening innovation policies • Techno-science centered (services, know-how…) • Priorities :

– More orientation towards societal challenges – Research Infrastructures – Focus on Key Enabling technologies – Strenghthening science base – Young innovative companies – …


Criticims, shortages, limits…


• New programmes/initiatives : – European Innovation Partnerships in areas which combine tackling societal challenges with potential for Europe to

become a world leader : healthy ageing (2011), then energy, "smart" cities and mobility, water efficiency, non-energy raw materials and sustainable and productive agriculture.

– 2011 : European Design Leadership Board and a European Design Excellence Label. – 2011 : major research programme on public sector and social innovation

• Existing instruments reinforced and focused : – Improve access to finance: cross-border venture capital regime, work with the EIB to scale up EU schemes like the

Risk-Sharing Finance Facility etc – Measures to complete the ERA, maximising open access to results of publicly-funded research, ERC, EIT and JRC

developed etc – Structural funding and state aid frameworks boosted (more focused, better use)

• Indicators : – New "Innovation Union Scoreboard" 25 indicators; new indicator : share of fast-growing innovative companies in the

economy; independent ranking system for universities; European Public Sector Innovation Scoreboard

• Encourage development of public procurement of innovative products and services

• 2011 proposals for – legislative proposal to speed up and modernise standard-setting to enable interoperability and foster innovation, – speed up agreement on EU patent – European knowledge market for patents and licensing


Europe 2020 Flagship Initiative Innovation Union


EU vision at highest level (J. Barroso to the Eur. Council, feb 2011)

• What’s wrong in Europe? – Poor availability of finance – Costly patenting – Lack of legal and tax level-playing field – Outdated regulations and procedures – Slow standard-setting – Weaknesses in public education and innovation

systems – Failure to use public procurement strategically – Fragmentation of efforts

= > 4 priorities :



priority 1 : ‘Smart’ fiscal consolidation

• Current financial and fiscal pressures may lead to cuts in R&D and innovation

• We need rigorous fiscal consolidation and growth-friendly expenditure

• Several Member States are managing to maintain or increase public investments in innovation and R&D



• Create a true EU market for venture capital funds

• Act on intellectual property rights • Pool excellence in areas of societal

concerns: cf. first Innovation Partnership “healthy and active ageing”

• Faster setting of European standards • Best practices in using public

procurements

priority 2 : Improved framework conditions



• Clear role for the European Council to steer progress

• Use the overall 3% R&D target as a compass • Task Council formations to deliver the

“Innovation Union” • Complete the European Research Area by 2014:

– Unblock deal to ensure full mobility of researchers – Attract new talent

• Monitor national and EU efforts: – European Semester – Europe 2020 strategy

priority 3 : Steer and monitor at EU level 4. The case of the EU policy


• A common strategic framework to pool resources and facilitate joint programming

• Tap innovative sources of funding: cf. EU risk-sharing facility for R&D: each $

invested x 30 • Simplification is key but it requires strong

political will at all levels

priority 4 : A future-oriented EU budget 4. The case of the EU policy

Documents

STI policy rationales - dimetic.dime-eu.orgdimetic.dime-eu.org/dimetic_files/Maast2011Lbach1.pdf · STI Policy rationales - L. BACH 1 STI policy rationales Laurent Bach [email protected]