The Future of STI The Future of STI Indicators and the Indicators and the

Challenges ImpliedChallenges ImpliedFred GaultFred Gault

Statistics CanadaStatistics CanadaPolish Academy of Sciences Polish Academy of Sciences

Warsaw, May 25, 2006 Warsaw, May 25, 2006

Fred GAULTFred GAULT

Fred Gault (Fred Gault (Fred.Gault@statcan.caFred.Gault@statcan.ca) is the Director of the Science, ) is the Director of the Science, InnovationInnovation and Electronic Information Division at Statistics Canada and Electronic Information Division at Statistics Canada and is responsible for the development of statistics on all aspects of and is responsible for the development of statistics on all aspects of research, development, invention, innovation and the diffusion of research, development, invention, innovation and the diffusion of technologies, as well as on related human resources. He is technologies, as well as on related human resources. He is responsible for the development of statistics on telecommunications responsible for the development of statistics on telecommunications and broadcasting, Internet use, and electronic commerce. He is and broadcasting, Internet use, and electronic commerce. He is Chair of the Committee of National Experts on Science and Chair of the Committee of National Experts on Science and Technology Indicators (NESTI) and former Chair of the Working Party Technology Indicators (NESTI) and former Chair of the Working Party on Indicators for the Information Society (WPIIS) at the Organization on Indicators for the Information Society (WPIIS) at the Organization for Economic Co-operation and Development (OECD). Previously, at for Economic Co-operation and Development (OECD). Previously, at Statistics Canada, he was responsible for the development of Statistics Canada, he was responsible for the development of statistics on business and personal service industries. statistics on business and personal service industries.

Before joining Statistics Canada, he was Senior Lecturer in Before joining Statistics Canada, he was Senior Lecturer in Theoretical Physics at the University of Durham in the U.K. He holds a Theoretical Physics at the University of Durham in the U.K. He holds a Ph.D. in Theoretical Physics and a B.Sc.Ph.D. in Theoretical Physics and a B.Sc. (Econ.) from the University of (Econ.) from the University of London, and is a Fellow of the Institute of Physics and a Member of London, and is a Fellow of the Institute of Physics and a Member of the British Computer Society. Recent publications include the British Computer Society. Recent publications include Understanding Innovation in Canadian IndustryUnderstanding Innovation in Canadian Industry (McGill-Queen’s 2003) (McGill-Queen’s 2003) which he edited, and which he edited, and National Innovation, Indicators and PolicyNational Innovation, Indicators and Policy (Edward Elgar 2006), co-edited, with Louise Earl.(Edward Elgar 2006), co-edited, with Louise Earl.

OutlineOutline Context for IndicatorsContext for Indicators Indicators: Recent PastIndicators: Recent Past Using IndicatorsUsing Indicators Global ChangeGlobal Change Changing ContextChanging Context New IndicatorsNew Indicators ChallengesChallenges More InformationMore Information

Context for Indicators-1Context for Indicators-1 Comparison of Gross Domestic Product per Comparison of Gross Domestic Product per

Capita in OECD CountriesCapita in OECD Countries In 2002 US PPP $ for 2004In 2002 US PPP $ for 2004**

• U.S.U.S. $40,000$40,000• CanadaCanada $31,000$31,000• GermanyGermany $29,000$29,000• PolandPoland $13,000$13,000

Perceived ‘GAP’Perceived ‘GAP’• Innovation, competitiveness, education, …Innovation, competitiveness, education, …

*OECD(2005) Main Science and Technology Indicators*OECD(2005) Main Science and Technology Indicators

Context for Indicators-2Context for Indicators-2 Policy InterventionPolicy Intervention

• Tax: R&D credits, capital investment Tax: R&D credits, capital investment promotion, training credits, support for promotion, training credits, support for apprentices, …apprentices, …

• Finance: Venture capital, trade insurance, …Finance: Venture capital, trade insurance, …• Procurement: Contracts and contributionsProcurement: Contracts and contributions• Grants to higher education and research Grants to higher education and research

institutesinstitutes• Commercialization incentivesCommercialization incentives• Regional initiativesRegional initiatives

Science parks, special courses in colleges, cluster Science parks, special courses in colleges, cluster benefits, incubators, networks, …benefits, incubators, networks, …

Context for Indicators-3Context for Indicators-3 Legal FrameworkLegal Framework

• Contract law, costs of incorporation and Contract law, costs of incorporation and bankruptcybankruptcy

• Employment law, costs of doing businessEmployment law, costs of doing business EducationEducation

• Developing a skilled labour force and Developing a skilled labour force and researchers researchers

International Co-operationInternational Co-operation• EU Framework ProgrammesEU Framework Programmes

Indicators: Recent Past-1Indicators: Recent Past-1 ActivitiesActivities

• R&D funding and performance, R&D funding and performance, personnelpersonnel

• Intellectual PropertyIntellectual Property• InnovationInnovation

Use of practices and technologiesUse of practices and technologies• Human Resource DevelopmentHuman Resource Development

University graduatesUniversity graduates

Indicators: Recent Past-2Indicators: Recent Past-2 Indicators of ActivitiesIndicators of Activities

• GERD, R&D personnelGERD, R&D personnel• Percentage of sales from new productsPercentage of sales from new products• Diffusion of technologies and practicesDiffusion of technologies and practices• Number of graduates, by subject Number of graduates, by subject • PatentsPatents• Publications and citations …Publications and citations …

Measurement standards: OECD Frascati Family of Measurement standards: OECD Frascati Family of ManualsManuals

Composite IndicatorsComposite Indicators• GERD/GDP or GERD/capita…GERD/GDP or GERD/capita…• Patents/researcherPatents/researcher• Sectoral variations – government, business, …Sectoral variations – government, business, …

TargetsTargets• GERD/GDP of 3%, Lisbon ProcessGERD/GDP of 3%, Lisbon Process

Using IndicatorsUsing Indicators Activity Indicators support:Activity Indicators support:

• MonitoringMonitoring• BenchmarkingBenchmarking• ForesightForesight• Evaluation (at programme or institute Evaluation (at programme or institute

level)level) They contribute to:They contribute to:

• Evidence-based PolicyEvidence-based Policy What more is needed?What more is needed?

Global ChangeGlobal Change The world is (becoming) flat?The world is (becoming) flat?**

• Technology Technology ICT infrastructureICT infrastructure Search engines and e-marketsSearch engines and e-markets

• People – Market IncreasePeople – Market Increase Central and Eastern EuropeCentral and Eastern Europe India, China …India, China …

• PracticesPractices Open SourcingOpen Sourcing Out SourcingOut Sourcing Off shoringOff shoring In SourcingIn Sourcing Supply-Chaining Supply-Chaining Priority SettingPriority Setting EU Framework ProgrammesEU Framework Programmes

* * Thomas L. Friedman, The World is Flat (1Thomas L. Friedman, The World is Flat (1stst ed. 2005, 2 ed. 2005, 2ndnd ed. 2006), New York: Farrar, ed. 2006), New York: Farrar, Straus and Giroux.Straus and Giroux.

Changing Context-1Changing Context-1 Insights from measuring an activity in an Insights from measuring an activity in an

organization are limitedorganization are limited Measure Measure

• Linkages and outcomes, as well Linkages and outcomes, as well asas activities activities UnderstandUnderstand

• Social and economic impacts and implications for Social and economic impacts and implications for educationeducation

Answer the question:Answer the question:• What does this institution get for its investment in: R&D, What does this institution get for its investment in: R&D,

patents, innovation, human resource development, …?patents, innovation, human resource development, …? Support evidence-based policy in a Support evidence-based policy in a changingchanging world world

Changing Context-2Changing Context-2 R&D ExamplesR&D Examples For foreign and domestically controlled For foreign and domestically controlled

firmsfirms• R&D performanceR&D performance• Sales and purchases of R&D servicesSales and purchases of R&D services

Domestic and abroadDomestic and abroad Including purchases by non-R&D performersIncluding purchases by non-R&D performers

• Funding from all sectors including ‘Abroad’Funding from all sectors including ‘Abroad’• R&D performance by domestic affiliates abroadR&D performance by domestic affiliates abroad

Changing Context-3Changing Context-3 Where is R&D done?Where is R&D done? Consider % of GERD funded by businessConsider % of GERD funded by business**

• GermanyGermany 67%67%• U.S.U.S. 64%64%• CanadaCanada 46%46%• PolandPoland 30%30%

*OECD(2005) Main Science and Technology Indicators: Key FIgures*OECD(2005) Main Science and Technology Indicators: Key FIgures

Changing Context-4Changing Context-4 Technologies and PracticesTechnologies and Practices

• Information Communication Technologies Information Communication Technologies (ICTs)(ICTs)

OECD ISIC Definition, Not a statistical challengeOECD ISIC Definition, Not a statistical challenge• BiotechnologyBiotechnology

OECD Definition, but not an industryOECD Definition, but not an industry• NanotechnologyNanotechnology

No OECD Definition, not an industry, cross-cuttingNo OECD Definition, not an industry, cross-cutting• E-business practicesE-business practices

Knowledge managementKnowledge management

Changing Context-5Changing Context-5 Move to a systems approachMove to a systems approach

• ActorsActors Governments, Business Enterprise, Higher Education, Research Governments, Business Enterprise, Higher Education, Research

Institutions, Funding OrganizationsInstitutions, Funding Organizations• ActivitiesActivities

R&D, invention, innovation, human resource development, R&D, invention, innovation, human resource development, enabling networking…enabling networking…

• LinkagesLinkages Sources ofSources of

• Ideas, technologies, practices, people, …Ideas, technologies, practices, people, … Networks and collaborationNetworks and collaboration

• Regional, suppliers, competitors, customers, public institutions, Regional, suppliers, competitors, customers, public institutions, consortia in the EU …consortia in the EU …

• OutcomesOutcomes Jobs, skills, profit, value-added, market share, …Jobs, skills, profit, value-added, market share, …

• ImpactsImpacts Changes in life style or business management, quality of life, Changes in life style or business management, quality of life,

(sustainable) growth(sustainable) growth

New Indicators-1New Indicators-1 What matters in a flat world?What matters in a flat world?

• Knowledge creation? Innovation? Commercialization? Knowledge creation? Innovation? Commercialization? People?People?

• In Canada, in manufacturing, for firms with 20+ In Canada, in manufacturing, for firms with 20+ employees, 94% do no R&D, 80% are innovative at the employees, 94% do no R&D, 80% are innovative at the lowest level of novelty – new to the firmlowest level of novelty – new to the firm

• Where does the knowledge come from to innovate?Where does the knowledge come from to innovate? Consider Consider innovationinnovation and measure: and measure:

• Sources of ideas, technologies and practices, (Open Sources of ideas, technologies and practices, (Open Innovation, Chesbrough 2003)Innovation, Chesbrough 2003)

• The activity of innovation (Oslo Manual 2005)The activity of innovation (Oslo Manual 2005)• OutcomesOutcomes

New Indicators-2New Indicators-2 Then Then linklink to to

• Financial and employment dataFinancial and employment data Analyse productivity, value added, Analyse productivity, value added,

skill levels, …skill levels, … PeoplePeople create value create value MeasureMeasure

• Supply and mobilitySupply and mobility• Life long learningLife long learning

New Indicators-3New Indicators-3 Some examples and policy implicationsSome examples and policy implications Survey of Earned DoctoratesSurvey of Earned Doctorates

• The DailyThe Daily, July 5, 2005, July 5, 2005• 20% of Ph.D. holders plan to leave Canada20% of Ph.D. holders plan to leave Canada• 60% of foreign Ph.D. holders plan to remain in 60% of foreign Ph.D. holders plan to remain in

CanadaCanada Data on Research PersonnelData on Research Personnel

• Estimates of Research Personnel in CanadaEstimates of Research Personnel in Canada• May 3, 2005, 88F0006XIE – No. 008May 3, 2005, 88F0006XIE – No. 008• 112,630 researchers in Canada in 2002112,630 researchers in Canada in 2002

New Indicators-4New Indicators-4 Knowledge Indicators - Absorptive Knowledge Indicators - Absorptive

CapacityCapacity Varies with Varies with

• Availabilities of skilled workersAvailabilities of skilled workers• Culture of learning, work environmentCulture of learning, work environment• Size of institutionSize of institution

Different forDifferent for• IndividualsIndividuals• TeamsTeams• Firms, and for size of firm Firms, and for size of firm • RegionsRegions

New Indicators-5New Indicators-5 Leads to indicators of Leads to indicators of

• Collaboration and knowledge flowsCollaboration and knowledge flows Co-authorship and co-patenting are examplesCo-authorship and co-patenting are examples ContractsContracts Participation in Framework programnesParticipation in Framework programnes International co-operationInternational co-operation

• Outcomes and knowledge useOutcomes and knowledge use Skill level changesSkill level changes Institutionalization of collaboration…Institutionalization of collaboration…

ChallengesChallenges Measurement, analysis and Measurement, analysis and policypolicy are complex are complex Single policy interventions may not produce the Single policy interventions may not produce the

desired outcomedesired outcome Need for dialogue between the measurers, the Need for dialogue between the measurers, the

measured and, decision makers and policy measured and, decision makers and policy makers.makers.

OECD Global Science Forum ConferenceOECD Global Science Forum Conference• Helsinki, July 12, 2006Helsinki, July 12, 2006

OECD Blue Sky II ConferenceOECD Blue Sky II Conference• Ottawa, September 25-27, 2006Ottawa, September 25-27, 2006

Measurement MattersMeasurement Matters

More InformationMore Information Web SitesWeb Sites www.statcan.cawww.statcan.ca Our Products and Services / Browse Free Internet Publications / Science and Technology or Our Products and Services / Browse Free Internet Publications / Science and Technology or

Communications, or Conferences, for information on Blue Sky IICommunications, or Conferences, for information on Blue Sky II www.oecd.orgwww.oecd.org epp.eurostat.cec.eu.intepp.eurostat.cec.eu.int www.nsf.gov/statistics/seind06/www.nsf.gov/statistics/seind06/

Books/PeriodicalsBooks/Periodicals Chesbrough, Henry (2003), Chesbrough, Henry (2003), Open InnovationOpen Innovation, Boston: Harvard Business School Press., Boston: Harvard Business School Press. Florida, Richard (2002), Florida, Richard (2002), The Rise of the Creative Class: and how it’s transforming work, leisure, The Rise of the Creative Class: and how it’s transforming work, leisure,

community and everyday lifecommunity and everyday life, Philadelphia: Basic Books., Philadelphia: Basic Books. Florida, Richard (2005), Florida, Richard (2005), The Flight of the Creative Class: The New Global Competition for TalentThe Flight of the Creative Class: The New Global Competition for Talent , ,

New York: Harper Business.New York: Harper Business. Foray, Dominique (2004), Foray, Dominique (2004), The Economics of KnowledgeThe Economics of Knowledge, Cambridge Mass: The MIT Press., Cambridge Mass: The MIT Press. Friedman, Thomas (2006), Friedman, Thomas (2006), The Earth is FlatThe Earth is Flat, 2, 2ndnd edition, New York: Farrar, Straus and Giroux edition, New York: Farrar, Straus and Giroux Gault, Fred (ed.) (2003), Gault, Fred (ed.) (2003), Understanding Innovation in Canadian IndustryUnderstanding Innovation in Canadian Industry, Montreal and Kingston: , Montreal and Kingston:

McGill-Queen’s University Press.McGill-Queen’s University Press. Earl, Louise and Fred Gault (eds.) (2006), Earl, Louise and Fred Gault (eds.) (2006), National Innovation, Indicators and PolicyNational Innovation, Indicators and Policy, Cheltenham: , Cheltenham:

Edward Elgar.Edward Elgar.