1. *This presentation draws on ’Finnish Finnish Impact Framework and Indicators for Science, Technology, and Innovation’ held
by Tarmo Lemola in Budapest on April 27th, 2009 and Luoma et al. 2011. ’Better results, more value’. Tekes Review 288/2011
Public RDI systems
– Rationale, indicators and impact assement*
Christopher Palmberg
Chief advisor, Ph.D
Tekes Strategic Intelligence
Copyright © Tekes

2. Structure of presentation
1. What are public RDI systems and how
are they legitimized?
2. What are RDI indicators, why are they
needed and which are the challenges?
3. Examples of impact assement models
and indicators – the case of Tekes
DM 02-2012 Copyright © Tekes

3. 1. What are public RDI systems and how
are they legitimized?
DM 02-2012 Copyright © Tekes

4. The Finnish public RDI system
PARLIAMENT
Research and GOVERNMENT
Innovation
Council
Ministry of Ministry of Other
Education and Employment ministries
and the
Culture Economy and their
institutes
Academy of Sitra
Finland Tekes
Finnvera plc
Finpro
Finnish
Universities VTT Industry
Investment Ltd
Regional
ELY Centres
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5. R&D investments in some countries
Percentage of GDP
5.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
Source: OECD, Main Science and Technology Indicators
DM 36109 and 36054 09-2011 Copyright © Tekes

6. Public sector’s share of total R&D funding
in 2009
%
Source: Eurostat
DM 36109 and 36054 11-2011 Copyright © Tekes

7. Tekes R&D funding by sectors – from technology
towards services and intangibles
Million euros
Construction is included in the industrial figures.
DM 906697 and 607668 01-2012 Copyright © Tekes

8. Why are public RDI policies needed –
how are they legitimized?
Traditional arguments
§ Market failure
• Informationl assymetries, knowledge spill-overs, externalities, over-
exploitation of commons
New arguments…in response to societal challenges?
§ Structural system failures
• Infrastructural , institutional, network, capabilities failures
§ Transformational system failures
• Directionality, demand articulation, policy coordination, reflexivity
failures
Source: Weber & Rohracher,forthcoming in 2012. Copyright © Tekes

9. 2. What are RDI indicators, why are they
needed and which are the challenges?
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10. What is an Research, Development and
Innovation (RDI) indicator?
“Indicators are quantitative representations that might
reasonably be thought to provide summary
information bearing on the scope, quality, and
vitality of the science and engineering enterprise.
They are intended to contribute to an understanding of
the current environment and to inform the development
of future policies”
Modified from NSB/NSF Science and Engineering
Indicators
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11. Why are RDI indicators needed?
§ Importance of science, technology and innovation for
social and economic progress – a stylized fact
§ Continuous pressure to increase resources to RDI to
compete globally
§ Pressure to ascertain effective use of public resources
such as taxes
§ Need to legitimate risky RDI investmnents characterized
by uncertainty
§ Need to understand dynamics of scientific and
technological progress
§ Need to build an evidence-base for policy
© Advansis Oy 2006 6/8/12 Copyright © Tekes

12. Criteria for RDI indicators
1. Clear connection to research and innovation
2. Clear connection to the phenomenon and impact area it
represents
3. Clear policy connection
4. Transparency
5. Intuitive and easily understandable
6. Internationally comparable
7. Easy and regular updating, basis for regular statistics gathering
8. Statistically reliable
9. Good temporal, sectoral and geographical coverage
10. Clear message on the direction and distance to the target state
11. Based on solid theories or coherent frameworks
12 Copyright © Tekes

13. Basic framework for assessing impacts of RDI
§ Traditional and well-studied role of RDI in creating preconditions
for economic growth and renewal - other objectives and impacts
known in less detail…
§ Input-activity-output model most common framework
§ The chain from research and innovation to socioeconomic
benefits is not linear but involves several feedback loops that
provide new inputs to the process at various stages
13 Copyright © Tekes

14. Key challenges in RDI impact assessment
§ Causality: the relationships between research and innovation inputs,
activities, outputs, and impacts are often unclear or nonlinear.
§ Attribution: it is difficult or even impossible to separate the impact of
research and innovation from other inputs and activities – the additionality
problem
§ Internationality: the impacts of research and innovation are international
by nature – activities and value chains are global, and both positive and
negative spillovers exist.
§ Time scale: the impacts are realized both in the short and long-term.
§ Breakdown of impacts to particular socio-economic target: how to define
e.g. impact on environment, public welfare or culture.
14 Copyright © Tekes

15. Indicator sources – some examples
§ U.S. National Science Board/National Science Foundation:
Science and Engineering Indicators
§ Other national indicator publications, including statistical
agencies
§ OECD: Main Science and Technology Indicators
• Indicator manuals: Frascati and Oslo manuals, Patent Statistics Manual etc.
§ EU: European Innovation Scoreboard
§ International competitiveness reports (WEF, IMD)
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16. Top 10 traditional RDI indicators
1. R&D expenditure as a percentage of GDP
2. Publications
3. Citations
4. Patents
5. New products and processes
6. International trade and trade balance in high-tech products
7. Young innovative companies
8. Mobility of researchers
9. Science and technology labor force
10. Growth in productivity
But we also need ’blue-sky indicators, e.g. based on www
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17. 3. How are RDI impacts being assessed –
the case of Tekes?
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18. Tekes model for RDI impact assesment*
Tekes objectives Impacts
• Economic growth • Welfare • Culture and
and renewal • Environment learning
Outputs
Societal and • Innovative products and • Growth and internalization
services • Productivity
environmental processes and methods • Distribution and utilization
• Organizational development of new knowledge and
wellbeing • new enterprises, business skills
areas and services
Productivity and Activity
Renewal of • Research and innovation activity
• Education
industries • New processes and networking
Inputs
Capabilities and
• Investments in intellectual and
tangible capital
skills of
• Existing capabilities and knowledge
Innovative activity
DM 196759 01-2010 Copyright © Tekes
*Developed jointly by Finnish Academy and Tekes in collaboration with external experts
Copyright © Tekes

19. Economy and economic renewal
§ Observes the effects that research and innovation
activities have, or should have, on the development
and renewal of the economy and the opportunities
and challenges arising from this
§ Perhaps the most common and the furthest
elaborated impact area of research and innovation
activities, which also provides a good basis for
international comparison
19 Copyright © Tekes

20. Hierarchy of phenomena related to economy
and economic renewal
National Productivity of High growth Foreign Direct
Impacts prosperity the economy enterprises
Job creation
Investments
Strengthening of intangible Position in global value
Outputs assets networks
Continuous improivement Collaboration, networks
Activities of competitiveness and knowledge flows
Capability to innovate
Human resources for General conditions and
Inputs Investments in R&D&I
R&D&I incentives for R&D&I
20 Copyright © Tekes

21. Indicators related to economy and economic
renewal
Phenomenom Indicators
Na#onal
prosperity
GDP
per
capita
Overall
produc#vity
of
the
economy
Total
Factor
Produc2vity
TFP
Produc2vity
renewal
indicator
Foreign
Direct
Investments
Share
of
Foreign
Direct
Investments
per
GDP
Strengthening
of
intangible
assets
Share
of
new
innova2ve
products
and
services
from
business
turnover.
Volume
and
share
of
intangible
investments
Posi#on
in
global
value-­‐networks
Exports
of
knowledge-­‐intensive
sectors
Con#nuous
improvement
of
compe##veness
Development
of
turnover
in
knowledge
intensive
sectors
(or
alterna2vely
in
KI
jobs)
Collabora#on,
networks
and
knowledge
flows
Share
of
public
and
private
organisa2ons
having
collaborated
in
innova2on
projects
Capability
to
innovate
Development
of
paten2ng,
registered
trademarks
and
designs
(EPO
/
USPTO
/
TRIAD)
Investments
in
R&D&I
Share
of
R&D&I
expenditure
in
business
turnover
Government
direct
&
indirect
support
to
business
R&D
Foreign
direct
investments
in
Finnish
R&D&I
Human
resources
for
R&D&I
Availability
of
highly
educated
workforce
General
condi#ons
and
incen#ves
for
R&D&I
GDP
share
of
VC
investments
at
different
growth
stages
…
21
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22. Environment
§ Many of the causality chains from the inputs of research and
innovation to the impacts on the environment are at least partly
known based on the knowledge on natural sciences and
technologies
§ Environmental issues often have a global character – impacts
are transnational
§ Environmental issues are integrated to most of the activities in
business and public sectors
§ Energy is a remarkable part of this impact area as it drives
economic activities and well-being in addition to its impact on
the state of environment, climate change, and use of natural
resources
§ The operational environment is often playing a significant role in
increasing the interest to innovate and use innovations
22 Copyright © Tekes

23. Hierarchy of phenomena related to
environment
Sustainable
State
of
the
Finnish
Impacts environment
Climate change Biodiversity consumption of
natural
resources
New
information
and
Environmentally Consumers'
attitudes
Outputs knowledge
related
to
positive innovations
Green
business
and
behavior
environment
Cooperation
within
environment
r elated
R&D&I
activities directed
Activities towards environment
value
networks
and
strengthening
of
skill
flows
R&D&I
investments
in
Operational
environment
Inputs sectors
vital
to
environment
Skills and
human resources
supporting
the
aims
23 Copyright © Tekes

24. Indicators related to environment
Phenomenom Indicators
State
of
the
Finnish
environment
Water
systems
ecological
state
Climate
change
Green
house
gas
emissions
in
Finland
Biodiversity
Endangeredness
of
Finnish
species
Sustainable
consump#on
of
natural
Share
of
renewable
energy
in
energy
produc2on
resources
New
informa#on
and
knowledge
related
Scien2fic
environmental
publica2ons
among
the
top
10%
most
cited
publica2ons
to
environment
worldwide
as
%
of
total
scien2fic
publica2ons
of
the
country
Use of environmental information in political decision making
Environmentally
bening
innova#ons
Interna2onal
patents/forwarded
references
of
patents
in
the
environmental
sector
Green
business
Revenue
of
companies
in
energy
and
environment
sector
Private sector energy efficiency
Consumers'
aKtudes
and
behavior
Household
energy
efficiency
R&D&I
ac#vi#es
directed
towards
Companies
with
innova2on
opera2ons
in
the
energy
and
environmental
sectors
environment
(quality,
challenges,
extent)
Amount of environmental R&D&I activities in research institutions
Coopera#on
within
environment
related
Coopera2on
between
private
sector,
universi2es
and
research
centers
in
value
networks
and
strengthening
of
skill
environment
sector
flows
R&D&I
investments
on
environment
Private
R&D&I
expenditure
on
environment
Public R&D expenditure on environment
Venture capital directed towards environment
Skills
and
human
resources
No
relevant
indicator
so
far
Opera#onal
environment
suppor#ng
No
relevant
indicator
so
far
environmentally
benign
ac#ons
24 Copyright © Tekes

25. Summing up
§ The focus of public RDI systems is broadeding, Finland
being a good example of this
§ RDI indicators remain important but RDI impact
assessment is increasingly challenging
§ There is also a need for new types on real-time ’blue-
sky’ indicators
§ Emerging and developing countries also need public RDI
systems
• What kind of systems?
• Where should they focus?
• How could their impacts be assessed?
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26. Thank you!
For further information:
christopher.palmberg@tekes.fi
Copyright © Tekes