Public-Private Partnership in Innovation Policy

Strategy for Modernisation of Europe in Years 2008-2010 “Towards Lisbon 2.1” Ljubljana September 28th 2007 Public –Private Partnership in Innovation Policy (European view) Dr. Heikki Kotilainen S&T Balance S T S&T Balance

COMMISSION OF THE EUROPEAN COMMUNITIES COM(2005) 488 final Implementing the Community Lisbon Programme: More Research and Innovation - Investing for Growth and Employment: A Common Approach Chapter 1 Research and ( innovation ) at the heart of EU policies 1.1. Better regulation for new technology 1.2. Redeploying State aid towards research and innovation 1.3. Improved efficiency and use of intellectual property (nat’l) 1.4. An attractive single market for researchers 1.5. Using public procurement to foster research and innovation (Who? EU?) 1.6. Better and wider use of tax incentives ?

Chapter 2 Research and innovation at the heart of EU funding 2.1. Mobilising public and private resources for key technologies 2.2. European Structural Funds to drive research and innovation 2.3. Improving SME access to finance 2.4. Mobilising national programmes and other sources of funding for European research and innovation (nat’l interests?) Chapter 3 Research and innovation at the heart of business 3.1. Intensified university-industry partnerships (nat’l) 3.2. Innovation poles and research-driven and industrial innovation ? 3.3. Pro-active business support services to stimulate research and innovation 3.4. Innovation management and social change (important) 3.5. The potential of innovative services 3.6. Establishing a European Industrial Research and Innovation Monitoring System and improving intellectual capital reporting

Chapter 4 Improved research and innovation policies 4.1. Research and innovation as a priority of the National Reform Programmes for growth and jobs 4.2. Improved policy analysis instruments 4.3. Support to policy learning and cooperation

Creating value from intellectual assets (OECD)

HOW DO INTELLECTUAL ASSETS DRIVE GROWTH?

A NEW PERCEPTION OF INVESTMENT?

HOW TO REALISE THEIR FULL POTENTIAL?

HOW TO DIFFUSE BEST PRACTICES?

HOW CAN COMPANIES REPORT INTELLECTUAL ASSETS?

WHAT ROLE FOR GOVERNMENTS?

WHAT ROLE FOR EU-COMMISSION?

SOURCE: OECD Observer 2007

Innovation policy snapshots China v. Europe © S&T balance Public-private partnership still developing, great diversity among members University-industry partnerships rapidly growing and supported Not fully utilized High level investment in human capital Centralized innovation strategy, regulations & directives, ”red tape” Towards an open innovation strategy, more business engagement Trials towards a coherent policy (FP6&FP7, CoE, TP, etc.), Constraints by state aid rules Looking for coherent policy, Less ”red tape” and regulations; Liberal state aid rules Investments escaping e.g. to China FDI of central importance Europe China

IMPACT OF GLOBALISATION

Innovation policies at different level

Economies at different level

Wealth, investments ( incl. FDI) etc. unevenly distributed

Globalisation impacts all

NOT ONLY FIRMS COMPETE, BUT MORE AND MORE

THE NATIONAL ECONOMIES

National administrations must face the competition

Thinking on value chains –offers to trade and industry

Incentives to same level as in competing countries

Short term direct incentives

Labour, education

Entrepreneurship – long term survival

CONSEQUENCE

The wealth circulation Wealth circulation © S&T Balance ? Restruc- turing Investments Increased know-how Growth R&D investment Produc- tivity Wealth Increased tax base Government innovation policy

The effectiveness of public R&D support THE BENEFIT OF SOCIETY THE SPEED OF IMPACT BASIC RESEARCH NATIONAL PROGRAMMES APPLIED RESEARCH INDUSTRIAL R&D DIRECT SUBSIDIES SLO1/HK 7.4.1999 MATURITY OF THE SOCIETY ALLOCATED PUBLIC MONEY SCIENCE POLICY TECHNOLOGY POLICY INDUSTRIAL POLICY © S&T Balance INNOVATION POLICY ” Protection-Promotion-Policy”

Stages of Technology Development by Innovation Effort FRONTIER INNOVATION Create new technologies: As leader or follower TECHNOLOGY IMPROVEMENT & MONITORING Improve products, processes and skills to Raise productivity and competitiveness based on own R&D, licensing, interactions with other firms or institutions SIGNIFICANT ADAPTATION Change products, processes, plant layout, productivity management and quality systems, procurement methods and logistics to adapt technology to local or export-market needs. This is based on in-house experimentation and R&D as well as on search and interactions with other firms and institutions BASIC PRODUCTION Train workers in essential production and technical skills; reach plant design capacity and peformance levels; configure products and processes; set up essential quality management systems; institute supervisory, procurement and inventory management systems; establish in-bound and out-bound logistics Source: UNCTAD Key elements Education Technology Transfer, technology policy Incremental innovation University-industry partnerships Radical innovations Linkage to basic research Innovation policy

POLICY DEVELOPMENT ” START-UP” Traditional ” INTERMEDIAN” Explicit I.P . ” MATURE” Explicit with interaction I.P. I.P. Sectors of economy Policy action Firms NGO’s Unions Scientists Scientists NGO’s Firms Unions Scientists Firms NGO’s I.P. According to thomas ansersson IKED © S&T Balance Unions

Circulation of innovation policy Setting policy agenda Analysing policy Implementation Public interest Private interest National strategy Sector policies Implementation of strategies Instrument set-up Research Strategic intelligence Policy evaluation Impact evaluation Performance evaluation Policy circulation Source: Tekes

Technology strategy Preserving current positions Strategic renewal Decline Formation of strategic clusters Geographical strategy Global National Action strategy Defensive Offensive/proactive Tech.strat © S&T Balance

Foundations for an Effective R&D Policy Charles W. Wessner National Academies of Science, US