Venture lab twente eu innovation 2012

The EU Innovation PolicyThe EU Innovation PolicyAmbitions and Realities Ambitions and Realities

Frans van Vught

VentureLab Twente Venture ClassEnschede, 16 February 2012

Overview

Globalisation Innovation and Innovation Policies The EU ‘Lisbon Agenda’ (2010) Ambitions and Realities The ‘Europe 2020 Strategy’ (2020) Issues and Actions

Globalisation

• Economic: process of increasing economic openness, growing economic interdepence and deepening economic integration in the world economy

• Political: process of institutionalisation of international consultation and

decision- making, and of relative reduction of the power of national governments

• Socio-cultural:process of global cultural exchange and integration and of potential weakening of

traditional social norms and institutions

Globalisation and ‘Geo-Regionalisation’

Source: UNCTAD, Handbook of Statistics, 2011Source: UNCTAD, Handbook of Statistics, 2011

1990 1995 2000 2005 2008 2009 2010

Total % internal

Total % internal

Total % internal

Total % internal

Total % internal

Total % internal

Total % internal

ECOWAS 23 7 22 9 36 8 72 8 107 9 72 10 85 11

SADC 35 3 46 11 52 9 102 8 191 10 137 9 170 11

MERCOSUR 46 9 70 20 85 21 164 13 278 15 217 15 281 16

NAFTA 562 40 854 46 1.224 55 1.479 56 2.046 50 1.601 48 1961 49

ASEAN 145 19 321 25 427 23 654 25 985 29 811 25 1051 25

ASEAN+3 560 13 1.048 13 1.333 13 2.294 14 3.640 14 2.955 14 3630 16

EU27 1.547 67 2.142 66 2.380 67 4.030 67 5.909 75 4.566 67 5134 66

Globalisation and innovation

Globalisation triggers national innovation policies

National innovation policies focus increasingly on stimulating the creation, transfer and application of knowledge

National innovation policies are influenced by the “National Innovation System” (NIS) perspective

The perspective of National Innovation Systems(NIS)

Emerged during 1980s as a new approach to the economics of innovation

Emphasizes interactions between scientific knowledge and new products and services

Takes an explicit policy orientation Identifies academic institutions as playing a critical role Distinguishes two crucial outputs of these institutions:

research outputs (publications, patents) highly skilled human capital

Focuses on linkages between actors in innovation processes: hard linkages (science parks, incubators) soft linkages (internships, conferences)

Addresses institutional framework conditions of innovation processes (regulations, incentives)

International comparative study of national innovation policies

Australia, Canada, Europe (EU and several Member States), Japan, US (Federal and several States)

David D. Dill & Frans A. van Vught (eds). “National Innovation and the Academic Research Enterprise: Public Policy in Global Perspective” , Baltimore, Johns Hopkins University Press, 2010

National Innovation Policy Strategies

Clearly influenced by the NIS perspective

Relate policy instruments to policy objectives regarding innovation

Consist of some combination of the basic notions of market coordination and central planning

Two large categories:

prioritisation strategies competition strategies

Prioritization strategies

Reflects notions of central planning Characteristics like: foresight analyses, priority

allocation, concentration of resources, quality assessment of outputs

Examples: Australia’s research priority setting Canada’s centers of excellence Finland’s TEKES agency UK’s foresight assessments and RAEs Netherlands’ innovation priority areas

Competition Strategies

Reflects notion of market coordination Characteristics like: competitive allocation of resources,

encouraging entrepreneurial academic behaviour,deregulation, diversifying funding base

Examples: US federal science policy Japan’s competitive grants scheme for doctoral

training Canada’s competitive research matching funding Germany’s excellence policy UK’s competitive ‘third sector’ funding

EU Innovation Strategy

Example of prioritisation strategy

But with elements of competition strategy

20 Years of EU innovation policy:

The ‘Lisbon Agenda’ (2000 – 2010): ‘to become the most competitive knowledge economy in the world’

The ‘Europe 2020 Strategy’ (2010 – 2020): ‘to build the European Innovation Union’

The Lisbon Agenda on Innovation

ResearchPolicy

ResearchPolicy

HigherEducation

Policy

HigherEducation

Policy

Knowl.Transferpolicy

Knowl.Transferpolicy

CPFCPF

Structural FundsStructural FundsERCERC

EITEIT

Cohesion Policy Funds:

• European Regional Development Fund

• European Social Fund

• European Cohesion Fund

Cohesion Policy Funds:

• European Regional Development Fund

• European Social Fund

• European Cohesion Fund

‘Lisbon Agenda’: Research policy

Fully developed since 1980’s Framework Programmes: medium term planning instrument But only 5% of the total EU research investments European Research Area (ERA):

Launched in 2000 Barcelona target: 3% GDP FP7: Technology Platforms; Joint Technology Initiatives;

European Research Council; joint programming. Six ERA Features:

Adequate flow of mobile researchers World-class research infrastructures Excellent research institutions Effective knowledge-sharing Well-coordinated research programmes Opening up to the world

‘Lisbon Agenda’: Higher Education policy Taboo until 2000 First programmes: Erasmus (mobility), Socrates I&II (cooperation) Alignment with Bologna Process (1999) Lifelong Learning programme (2007-2013) Hampton court target: 2% GDP Major Bottlenecks:

Tendency to uniformity and egalitarianism Too much emphasis on traditional monodisciplinarity Too little world-class excellence Too much emphasis on traditional learning and learners Too little transparency Too much fragmentation Too insulated from industry Over-regulated; state dependent; underfunded

Modernisation agenda (since 2005) Mobility Governance (Regional) innovation Internationalisation (Erasmus Mundus) Higher education – Business fora European Institute of Technology (EIT) and Knowledge & Innovation

Communities (KICS)

‘Lisbon Agenda’: Knowledge Exchange policy

Only addressed since late 1990’s Focus on decreasing barriers:

cultural differences between academic and business communities legal barriers fragmented markets lack of incentives

Facilitate creation and marketing of new products and services (the ‘lead markets’)

Competitiveness and Innovation Programme (CIP, 2007-2013) Several measures:

Workforce of skilled knowledge transfer staff Entrepreneurial mindset in universities Staff exchanges between research organisations and industry Voluntary guidelines to improve intellectual property management Innovation Relay Centers, Network of Innovating Regions. IPR

helpdesk, on –line information SMEs

The Lisbon Agenda: ambitions and realities R&D expenditure as % GDP (2008)

R & D intensity

Business expenditure

Public expenditure

EU 2.01 1.27 0.74

US 2.77 2.12 0.65

Japan 3.44 2.75 0.69

S.Korea 3.21 2.59 0.78

China 1.54 1.12 0.41

Source: Innovation Union Competitiveness report, 2011, European Commission

The Lisbon Agenda: ambitions and realities

Total expenditure

Public expenditure

Private expenditure

EU 1.2 1.12 0.08

US 2.6 1.25 1.35

Japan 1.3 0.63 0.67

Expenditure on higher education as % GDP (2007)

Source: Innovation Union Competitiveness report, 2011, European Commission

The Lisbon Agenda: ambitions and realities

% researchers in business & industry (2008)

Source: Innovation Union Competitiveness report, 2011, European Commission

EU 54

US 80

Japan 73

S. Korea 69

Source: Innovation Union Competitivess report, 2011, European Commission

The Lisbon Agenda: ambitions and realities

2000 2009

EU 37.7 33.4

US 31.8 25.9

China 6.4 18.5

Japan 9.4 6.3

S. Korea 1.7 2.8

Brasil 1.4 2.3

Russia 3.1 2.0

Israel 1.1 0.9

World shares of scientific peer-reviewed publications

The Lisbon Agenda: ambitions and realities

% of scientific publications within 10% most cited scientific publications worldwide as % of total number of scientific publications of the country (2001-2007)

US 15.3

EU 11.6

S. Korea 8.5

Japan 8.3

China 7.0

Source: Innovation Union Competitivess report, 2011, European Commission

Shanghai ARWU university ranking, 2011Top 100

US 53

EU 28

United Kingdom 10

Germany 6

Japan 5

Australia 4

Switzerland 4

France 3

Sweden 3

Denmark 2

Netherlands 2

Belgium 1

Finland 1

Israel 1

Norway 1

Russia 1

Top 500EU 190

US 151

Germany 39

United Kingdom 37

China 35

Japan 23

Canada 22

Italy 22

France 21

Australia 19

Netherlands 13

S. Korea 11

Spain 11

Sweden 11

Austria 7

Belgium 7

Brasil 7

Israel 7

Switzerland 7

Finland 5

New Zealand 5

The Lisbon Agenda: ambitions and realities

Number of public-private scientific co-publications per million population (2008)

Source: Innovation Union Competitiveness report, 2011, European Commission

US 70.2

Japan 56.3

EU 36.2

China 1.2

The Lisbon Agenda: ambitions and realities

Number of patent applications per billion GDP (2007)

(as defined under Patent Cooperation Treaty)

Japan 8.3

S. Korea 7.0

US 4.3

EU 4.0

China 1.1

Source: Innovation Union Competitiveness report, 2011, European Commission

The Lisbon Agenda: ambitions and realities

Number of patent applications with at least one foreign co-inventor as % of total number of patent applications (2001-2008)

China 11.7

US 11.2

EU 10.7

S. Korea 4.2

Japan 2.7

Source: Innovation Union Competitiveness report, 2011, European Commission

EU’s innovation performance in aglobalizing world, 2006-2010

Composite score on 12 innovation indicators, EU=100

2006 2007 2008 2009 2010

US 146 145 146 148 149

Japan 132 136 140 139 140

EU 100 100 100 100 100

Russia 69 65 63 63 63

India 48 49 48 48 47

China 39 40 41 43 45

Brasil 39 40 40 42 42

Source: Innovation Union Scoreboard, 2010, European Commission

EU’s innovation performance compared to six other countries, 2006-2010, EU=0

Innovation performance indicator US JapanRussi

aIndia China Brasil

New doctorate graduates per 1000 population aged 25-37 + - + n.a. n.a. --

% population aged 24-64 having completed tertiary education ++ ++ ++ -- -- --

International scientific co-publications per million people + - n.a. n.a. -- n.a.

Scientific publications among the top 10% most cited publications as % of total publications of the country

+ - -- - - --

Public R&D expenditures as % GDP - - - -- - -

Business R&D expenditures as % GDP ++ ++ - -- - --

Public-private co-publications per million population ++ ++ -- -- -- --

PCT patent applications per billion GDP (in PPS €) + ++ -- -- -- --

PCT patent applications in societal challenges per billion GDP (in PPS €)

+ + -- -- -- --

Medium and high-tech products exports as % total product exports

+ + + + + +

Knowledge-intensive services exports as % total service exports - - - ++ - +

License and patent revenues from abroad as % GDP ++ ++ -- -- -- --

Source: Innovation Union Scoreboard, 2010, European Commission

EU’s innovation performance compared to six countries

EU’s weaknesses in innovation

Severe (private) underinvestment in research and

education

Relatively low higher education attainment and

participation levels

Limited scientific and technological excellence

Weak knowledge exchange between academia and

industry

Poor framework conditions in terms of access to

financing costs of patenting, and enhancement of

entrepreneurship

Diversity of innovation performance among EU-member states

Innovation leaders Sweden, Denmark, Finland, Germany

Innovation followersUK, Belgium, Austria, Netherlands, Ireland, Luxemburg, France, Cyprus, Slovenia, Estonia

Moderate innovatorsPortugal, Italy, Czech Rep., Spain, Greece, Malta, Hungary, Poland, Slovakia

Modest innovators Romania, Lithuania, Bulgaria, Latvia

• 11 countries above EU average• Switzerland would be overall innovation leader

The Europe 2020 Strategy on innovation

Close EU’s innovation gap

Integrate research and innovation, and

focus on societal challenges

Create more knowledge-intensive products

and services

The Europe 2020 Strategy on innovation

Issues and Actions in Research:

Costly fragmentation and overlap between national research systems

Need for a unified European Research Area where actors move and operate easily

Simplification of complex funding landscape Urgent need for world-class infrastructures

EC proposal for to remove obstacles to mobility and cross-border cooperation in research by 2014

EU and Member States to complete 60% of priority European research infrastructures by 2015

International agreements on world-level infrastructures Streamlining and simplification of research programmes.

The Europe 2020 Strategy on innovationIssues and Actions in Higher Education:

• Universities to diversify and specialise• Need to create limited number of world-class European universities• Attract international top talent• EU needs at least one million more researchers• More people to enroll in higher education• Educational training should better match business needs

• Percentage 30 – 34 year old with tertiary education to 40% in 2020• National strategies to boost training and career of researchers• Mobility to be diversified• New multidimensional ranking instrument• Modernisation of governance and management in universities• More entrepreneurial universities• University-Business alliances

The Europe 2020 Strategy on innovation

Issues and Actions in Knowledge Transfer:

• Need to support whole innovation chain, from research to market

• Address lack of finance as major constraint • Few European SMEs grow into global companies• Much IPR remains dormant• EU patent system is costly• Public procurement hardly used for innovation

• Rapid agreement on EU patent needed• New generation of financial instruments with EIB• Regime of cross border venture capital funds• Strategic innovation agenda of EIT• Member States to use procurement budgets for innovation

The Europe 2020 Strategy on innovation

Research policy

ERCERC

Structural FundsStructural Funds

CPFCPF

KnowledgeTransfer policy

KnowledgeTransfer policyEITEIT

Research and Innovation Policy Framework Cohesion Framework

Higher Education policy

Two complimentary general policy frameworks

Synergies between Innovation policies and

Cohesion policies

Further integration of research and innovation

policies

Combining global and regional innovation ambitions

(global-local connectedness)

Multi-excellence approach

Combining and integrating policies of EU and

Member States

EU 2020 Strategy on Innovation

The Europe of Knowledge

• Context of global competition: addressing the gap

• Prioritization strategy: societal challenges

• Policy integration: synergies & better framework conditions

• Multi-level cooperation: EU, member states, regions

• Multi-actor investments: governments, industry, households,

individuals

• Performance assessment: multiple excellences

• And a major political challenge!