Benchmarking Study On Innovation Policy 29012010

Benchmarking Study on Innovation Policy
CC India, Research services

January 29, 2010

Contents
 Summary
 Case Studies

Copyright © 2009 Capgemini. All rights reserved. 2

Promoting „industry and academia linkage‟ and „R&D/ innovation programs‟ are
the prominent trends across the top innovative countries in the world
Summary –Best practices followed by the top innovative countries
Presence of the
Best Practice in the NL
Yes/ No Level
 Supporting the linkages between industry and academia has emerged as a
prominent trend amongst the top innovative countries in the world. This linkage
is promoted in a number of ways, like:
− Companies promote commercialisation in the universities
Promoting industry
and academia linkage
− Increasing the number of Industrial PhD‟s carried out in cooperation P
between an enterprise and a university
− Innovation funds (backed by the private sector) promote entrepreneurship
education, technology incubators, entrepreneurs-in-residence and other
programs in the universities

 Promotion of R&D activities has been done by providing direct funding to
national entities/ universities to carry out research/ innovation programs
Promoting R&D
 Developing specific clusters and carrying out R&D in areas of national
P
importance has emerged as a major trend

 Governments have been proactive in encouraging tax credits to businesses
Providing tax credits
involved in R&D/ innovative activities P
− This initiative has been highly beneficial for the Small and Medium
Enterprises (SMEs)

 In the R&D activities and the innovative programs prevalent in the countries,
Inclination towards a P
areas related to sustainable development, clean environment/ energy, climate
sustainable society change have been paid special attention via direct funding/ tax credits

Note: The presence/ absence and the level of presence of a best practice in the Netherlands is based on the analysis of the secondary sources of information only. The idea is to give a flavour of the overall
dynamics of the innovation landscape in the Netherlands when benchmarked vis-à-vis the top innovative countries in the world

Supporting „SMEs for innovation‟ and „developing the basic building blocks of
innovation‟ have also been important for promoting innovation
Summary –Best practices followed by the top innovative countries
Presence of the
Best Practice in the NL
Yes/ No Level
 The top innovating countries have focussed on supporting the Small and
Medium Enterprises (SMEs) in various activities that promote innovation
SME support P
− Government support mainly consists of monetary funding and proving
technical know how

 The governments across the top innovating countries have been focussing on
easing credit availability for innovative/ research oriented businesses
Easing credit − This helps in promoting new ideas into the market, thus leading to an P
availability innovative economy
− Majority of these activities have been focussed on providing support to the
Small and Medium Enterprises (SMEs)

 Promotion of the “Entrepreneurial spirit” into the mindset of the businesses/
citizens. For example:
Promoting
− Promoting the incubators set up in the universities, to help fasten the
entrepreneurial process of commercialisation of an idea P
environment − Developing academic entrepreneurship in the Institutes of Higher Learning
− Promoting the science and technology education

 Better Physical and ICT infrastructure helps in creating an efficient environment,
Developing physical and further removes unnecessary delays
& ICT infrastructure − These focus around improving highways and mass transit systems; and P
broadband expansion, etc.,

Note: The presence/ absence and the level of presence of a best practice in the Netherlands is based on the analysis of the secondary sources of information only. The idea is to give a flavour of the overall
dynamics of the innovation landscape in the Netherlands when benchmarked vis-à-vis the top innovative countries in the world

Contents
 Summary
 Case Studies


Global Innovation Index (GII) is based on the quantitative and qualitative data
gathered for the eight pillars (five for Inputs and three for Outputs)
Global Innovation Index–by INSEAD and Confederation of Indian Industries (CII)
Global Innovation Index Key Discussion
 Overview: The Global Innovation Index (GII) is based on the quantitative and qualitative data gathered for the eight
INPUTS OUTPUTS
pillars mentioned (five for Inputs and three for Outputs)
Institutions and Policies Knowledge - Input Pillars: The input pillars define aspects of the conducive environment required to stimulate innovation within
an economy
Human Capacity Competitiveness
- Output Pillars: The Output pillars provide evidence of the results of innovation within the economy
Infrastructure Wealth  Difference (Input-Output Rank):
- Positive Difference: The countries with a positive difference between (Input-Output Ranks) indicate that in spite of
Market Sophistication
relatively poor environment than other countries, they are able to deliver in terms of output
Business Sophistication - Negative Difference: The countries with a negative difference between (Input-Output Ranks) indicate that in spite
of relatively better environment than other countries, they are not able to deliver in terms of output

Overall Ranking Input Pillars Ranking Output Pillars Ranking Input-Output Rank
Country Rank Country Rank Country Rank Country Difference
United States 1 Denmark 1 United States 1 Japan 11
Germany 2 United States 2 Germany 2 Germany 8
Sweden 3 Sweden 3 Japan 3 Netherlands 4
United Kingdom 4 United Kingdom 4 Sweden 4 United States 1
Singapore 5 Singapore 5 United Kingdom 5 Korea, South 1
Korea, South 6 Switzerland 6 Singapore 6 Sweden -1
Switzerland 7 Canada 7 Korea, South 7 United Kingdom -1
Denmark 8 Korea, South 8 Netherlands 8 Singapore -1
Japan 9 Hong Kong 9 Switzerland 12 Finland -4
Netherlands 10 Germany 10 Finland 15 Switzerland -6
Canada 11 Finland 11 Canada 15 Canada -9
Hong Kong 12 Netherlands 12 Hong Kong 18 Hong Kong -9
Finland 13 Japan 14 Denmark 21 Denmark -20


US innovation strategy focuses on investing in the building blocks of
innovation, promoting competitive markets and supporting specific clusters
United Sates – GII Ranking #1 United States

Overview of Innovation Policies/ Initiatives
 Overview: The innovation strategy of the US is based around three main pillars mentioned below
- Investing in the building blocks of American innovation: Initiatives which support the necessary tools for innovation, from investments in R&D to the human, physical, and
technological capital needed to perform research and innovations
- Promoting competitive markets that spur productive entrepreneurship: Creating a national environment ripe for entrepreneurship and risk taking
- Catalysing breakthroughs for national priorities: Supporting sectors with exceptional national importance where the market is unlikely to produce the desirable outcomes on
its own (Examples include alternative energy sources, health IT, and manufacturing advanced vehicles)
 Key Matrices : R&D Expenditure (% of GDP) : 2.68% (2007); Time to start a business(2010): 6 days; Public Expenditure on Education (% of GDP): 5.70% (2006)

Direct Support for Innovation Indirect Support for Innovation

 Funding for Innovation/ R&D: In the American Recovery and Reinvestment Act alone the  Nurturing Entrepreneurship:
President committed over USD 100 b to support innovation in energy, basic research, - Increased access to capital for new businesses: The Recovery Act reduced fees
education and training, advanced vehicle technology, innovative programs, health IT and increased guarantee levels on small business loans
and health research, high speed rail, smart grid, and information technology
- Provide training and mentoring to entrepreneurs: U.S. Small Business
- The 2010 budget proposed to double the research budgets of three key science Administration (SBA) has 68 district offices and over a thousand nonprofit “resource
agencies: the National Science Foundation, the Department of Energy's Office of partners” that offer 14,000 counsellors who serve about 1.5 m entrepreneurs and small
Science, and the National Institutes of Standards and Technology business owners each year
 Catalysing Breakthroughs For National Priorities: Supporting sectors with exceptional • Further, the US administration is also partnering with community colleges,
national importance where market is unlikely to produce the desirable outcomes on its own universities, and the philanthropic sector to deliver more training and mentoring
(Examples include alternative energy sources, health IT, and manufacturing advanced resources to aspiring entrepreneurs to promote the creation of new businesses
vehicles)
- Stimulate entrepreneurship through increased access to government data: The
- The President has set a goal to double the generation of renewable energy in the next US Administration launched Data.gov, a one-stop shop for free access to data
three years generated across all Federal agencies
- President has proposed a 10 year, USD 150 b investment in the R&D and  Initiatives for building a better physical & ICT infrastructure helps in creating an
demonstration of clean energy technologies efficient environment, and further removes unnecessary delays
- In Aug 2009, the US Administration announced USD 2 b in grants to catalyse private - The Recovery act provides USD 36 b for infrastructure projects to improve highways
sector investment to build a globally competitive domestic battery and electric drive and mass transit systems; and USD 4.5 b for the development of technologies to
component industry enable greater energy efficiency
- The Recovery Act provides over USD19 b in investments to modernise health - The Recovery Act provides USD 7.2 b for broadband for expanding broadband access
information technology
- In Apr 2009, President Obama named the first ever Chief Technology Officer of the
U.S. to oversee the application of technology to create jobs and growth


R&D funding, SME Focus and removing bureaucratic inefficiencies are the
main focus areas of the German innovation policy
Germany – GII Ranking #2 Germany

 Overview: The main pillars of the innovation policy of Germany are
- Improving framework conditions for innovation, through simplifying the tax system and other bureaucratic procedures
- Improving the performance of the education and science system
- Promoting innovation activities in firms through financial aid, and
- Supporting industry-science links
 Key Matrices : R&D Expenditure (% of GDP) : 2.53% (2007); Time to start a business (2010): 18 days; Public Expenditure on Education (% of GDP): 4.41% (2006)


 Thematic R&D Programs (Direct research promotion): These offer grant aid to  Industry – Science Linkages: Many innovation policy programs focus on
both enterprises and public research institutions for R&D projects in high-tech supporting collaborative R&D and innovation projects, typically involving both
areas public and private actors
- In 2008, the federal government planned to spend about EUR 3.4 b on  Improving Tax Structure: Efforts focus on improving framework conditions for
subsidies for non-defence R&D projects, of which about EUR 2.9 b was linked innovation, notably through simplifying the tax system and reducing the tax burden
to applied R&D and innovation for firms, and by diminishing bureaucratic procedures that may inhibit innovation
- Main areas of research promotion are ICT, biotechnology, medical and health and the start-up of new enterprises
technologies, production technologies, environmental and energy  Improvement of Education System: Going forward, the efforts are expected to
technologies, and transport technologies focus on Adjusting the education system to changing requirements of technology
 SME focus: The ZIM program, central innovation program for SMEs received and innovation:
significant additional funds of ~EUR 450 m for 2009-10 - The German education system is still not able to meet the economy's demand
for high-skilled labour, both in terms of quantity and quality
- Intensified efforts are needed both in primary and secondary education, and in
higher education


Strong university research, encouraging business environment, and support
to SMEs are the main pillars of the Swedish innovation policy
Sweden – GII Ranking #3 Sweden

 Overview: The main pillars of the innovation policy of Sweden are
- Strong university research system
- Encouragement to businesses focusing on innovation, and
- Efforts devoted to linking the university research and the corporate sector
- Though at present, the SME sector is not a major contributor to the R&D space, going forward SME‟s are being encouraged for innovation


 Overview: In late 2008, the Swedish government introduced a new Research and  SME Support: The Swedish Agency for Innovation Systems (VINNOVA)
Innovation Bill (2009-12), with a funding of SEK 5 b
through its “Research & Grow” program for the SMEs, provides the SMEs
- In the Research and Innovation Bill, the Government presents an initiative to increase access to people with experience of innovation and R&D
the commercialisation of research results, emphasising that Government investments in
research need to be made use of more extensively in the community and business - The main areas where the SMEs get indirect support for innovation are
sector “Sustainable development” and “Bridging knowledge gaps”
- Innovation offices will be set up at a number of higher education institutions
- During 2006-07, 67% of the projects resulted in new collaborations
- Sectoral Programs: Government plans to support special programs in medicine, with R&D performers; universities, research institutes or other
technology and sustainable development, these have a funding of ~EUR 180 m
companies
 EU Structural Funds: EU Structural Funds are becoming increasingly important in the
innovation policy landscape in Sweden. Between 2007-13 ~EUR 100 m is expected to be  Special support for universities: Government promotes research
spent on innovation support initiatives in the universities
 R&D: R&D investments by industry in Sweden are concentrated around some 20 large - Presence of companies in the universities to promote
companies operating in the world market.
commercialisation
- Investments in R&D by SMEs are on a level comparable to other industrial nations, but
their share of total R&D is smaller
- A possible concern however is that the Government invests very little R&D-money in
companies outside the military sector
 SME support: The Swedish Agency for Innovation Systems (VINNOVA) through its
“Research & Grow” program for the SMEs distributed EUR 36 m to 360 companies
between 2006-08


UK is characterised by a strong science base and strong innovation capacity
in the services sector
United Kingdom – GII Ranking #4 United Kingdom

 Overview: Department for Business Innovation & Skills (BIS) is leading the Government's work to develop a public procurement culture that both stimulates innovation in the
economy and helps the public sector to meet its future needs at better value for money for the taxpayer
 The 2007 UK Innovation Survey showed that the proportion of UK businesses with 10 or more employees undertaking innovative activities is rising
 Key Matrices : R&D Expenditure (% of GDP) : 1.78% (2006); Time to start a business (2010): 13 days; Public Expenditure on Education (% of GDP): 5.64% (2006)

 Support for Business R&D: Government helps companies fulfil their R&D aspirations with
 UK Innovation Investment Fund (UKIIF): GBP 1 b UKIIF would focus on investing in
the help of following solutions
growing small businesses, start-ups & spin-outs, in digital & life sciences, clean
technology & advanced manufacturing - R&D Tax Credits: Funding mechanism for investment, where credit is given either as a
- GBP 150 m contribution by Government and GBP 175 m collected by UKIIF, creates an tax deduction based on R&D spending or surrendering losses in return for cash payment
initial pool of funding worth GBP 325 m for the fund - Technology Program: To spread knowledge, understand policies, spot opportunities
 Measures for small and medium-sized Businesses (SMBs): and bring people together to solve problems or make new advances; and invest in
- Government‟s Technology Strategy Board (TSB) in 2009 invested GBP 6.5 m (shared delivery mechanisms and programs to drive technology-enabled innovation
by over 180 UK SMBs), to help stimulate innovation in a range of technology areas . - Other R&D Support Products: Apart from the above two, other tax breaks include
TSB projects also focus on reducing government energy bills capital allowances for investment in equipment and premises
- Small Business Research Initiative (SBRI) helps early stage, high-technology SMBs
gain greater access to R&D opportunities to engage with a specific department need and  Coordinating nano-activity: In January 2010, the Nanotechnology Mini-Innovation and
to prove their technology or idea Growth Team (Mini-IGT) recommended if funding can be directed through various bodies
 Promoting research in specific areas/clusters: Range of new partnerships/ clusters have responsible to the BIS to drive commercialisation of nanotechnology-based products
been created to promote innovation  Measures for the British National Space Centre: Six government departments, two
- Health Innovation and Education Clusters (HIECs): Partnerships between the NHS, research councils, the TSB and the Met Office work towards reducing red tap and enhancing
higher education sector and blue chip companies provide professional education & efficiency to ensure that the UK fully exploits its competitive advantage in satellites, robotics
training, promote innovation in healthcare by speeding up adoption of research and related technologies
- Energy & environmental technologies sector: In December 2009, five North West  Food Innovation Strategy: The UK Cross-Government Strategy for Food Research and
agreed for a partnership to create closer working ties, collaborate on energy innovation Innovation, launched by the Government‟s Chief Scientific Adviser, aims to improve the
schemes & develop clear leadership to enhance growth of the sector security and sustainability of the UK‟s food system
- Measures taken by Office for Life Sciences (OLS): In July 2009, OLS set out certain
 Digital Economy Bill: In November 2009, Digital Economy Bill. The Bill has measures to
measures, such as UK Life Sciences Super Cluster , Patent Box, Innovation Pass, etc.,
protect the creation of a range of engaging public service content, from multiple providers, on
to secure UK as a location of choice for global Life Sciences investment in future
multiple platforms


Singapore‟s innovation strategy is focused around promoting R&D and
linkages between „research in universities‟ and „the corporate sector‟
Singapore – GII Ranking #5 Singapore

 Overview: Singapore‟s innovation strategy is focused around promoting R&D (with special focus on specific clusters/ areas), and linkages between research in universities and the
corporate sector
- The National Framework for Innovation and Enterprise (NFIE): NFIE‟s role is to build on the strong R&D foundation established through earlier investments in R&D to
develop innovation and enterprise in Singapore. SGD 350 m is allocated to initiatives under NFIE during 2008 – 2012
 Key Matrices : R&D Expenditure (% of GDP): Not Available; Time to start a business(2010): 3 days; Public Expenditure on Education (% of GDP): 3.20% (2009)


 Establishing Support for Academic Entrepreneurship in Universities: Developing  Research Centres of Excellence (RCEs): RCEs conduct investigator-led research with a global
academic entrepreneurship in the Institutes of Higher Learning (IHLs) is a key focus under impact, focusing on areas aligned with the long-term strategic interests of Singapore, Singapore
the NFIE has the following RCEs
- Establishment of University Enterprise Boards : An Enterprise Board will be set up - Mechanobiology RCE; Earth Observatory of Singapore; Cancer Research Centre of
in each university to drive innovation Excellence; and Centre for Quantum Technologies

- Innovation Funds for Universities: An innovation fund is planned to be set up for  Strategic Research Programs: NRF has identified selected strategic areas of research for
building up core R&D capabilities. Till Oct, 2008, the Research Innovation and Enterprise Council
each university, this will fund entrepreneurship education, technology incubators,
(RIEC) had allocated SGD 1.55 b to establish Strategic Programs
entrepreneurs-in-residence and other programs, to promote commercialisation of
university technologies - The strategic research programs are in the areas of Biomedical Sciences , Environmental and
Water Technologies (EWT) including Clean Energy and Interactive and Digital Media (IDM)
 Translational R&D Grants for Polytechnics will support polytechnics to perform
translational research on the R&D output from universities and research institutes  Campus for Research Excellence And Technological Enterprise (CREATE): NRF will
establish research centres in Singapore which will have intensive research collaboration with
 Creating Enterprise Support Structures: Singapore-based universities/ research institutions and top research universities in the world
- Proof-of-Concept Grants, of up to a maximum of SGD 250,000 will be given to - Singapore-Massachusetts Institute of Technology (MIT) Alliance for Research and
researchers based in IHLs to develop proofs-of-concept for their technology ideas Technology (SMART) is one such example of CREATE
- Technology Incubation Scheme provides 85% co-funding, up to SGD 500,000, for  Enhancing Technology Transfer:
companies accepted into technology incubators set up in the IHLs, in exchange for - National intellectual property (IP) Principles for Publicly-funded R&D: Principles,
equity stake in the company guidelines and best practices will be provided for the identification, ownership, protection and
- Early-Stage Venture Funding scheme will seed the development of a number of exploitation of intellectual property arising from publicly-funded research
early-stage VC funds, National Research Foundation (NRF) will match 1:1 the funds - Innovation Vouchers will be given to SMEs to procure R&D and other services from IHLs
raised by VCs and public research institutions to encourage SME and university collaboration
 Supporting Innovation Policy Studies: A national centre for innovation studies will be set up to
encourage innovation in both private and public sectors


By emphasising innovation through people and culture and performance
oriented changes, South Korea has built an innovation intensive economy
South Korea – GII Ranking #6 South Korea

 Overview: South Korea has been able to develop an innovative economy and sustain this achievement through
- Innovation through people and culture - Strategic Leadership, Various participatory program and accelerating learning culture
- Performance Oriented Changes - Roadmap Based Planning, Improvement through measurement and Performance management and incentive program
- Integrated Innovation System - Benchmarking from private sector, problem solving and best practice diffusion and IT Integrated Innovation systems

 Key Matrices : R&D Expenditure (% of GDP): 3.22% (2006); Time to start a business(2010): 14 days; Public Expenditure on Education (% of GDP): 4.22% (2006)

 Investment – South Korea's spending on research and development (R&D) will  Set-up of Institutes - The emphasis of these institutes are planning and
increase more than 11% in 2008 ( USD 11.5 b) from last year in line with its plan to conducting of national R&D projects to raise the level of scientific and technological
promote leading technologies skills
- Korea has formulated 17 new growth engines and support to associated - Leading government funded research institutes are Korea Institute of Science
research: six projects in green technology industries;10 six in state-of-the-art and Technology, Korea Research Institute of Chemical Technologies, Korea
fusion industries, such as IT fusion systems, robot applications, and Institute of Machineries and Metals, Electronic Technology Research Institute
biomedicines; and five in high valued-added services industries, including - Under 21st Century Frontier R&D Program , the government set up institutes
healthcare, education services and the tourism industry such as National research laboratory and the Creative Research Initiative
- Korea is amongst the top 3 R&D spenders across Asia  Outward Looking - Government industrial policy, human resources, and
government-led development of S&T infrastructure; these factors have influenced
the Korean innovation system and determined the characteristics of the systems
 Knowledge sharing program - The Knowledge Sharing Program (KSP), a
comprehensive policy consultation program launched by the Ministry of Strategy
and Finance to share Korea‟s development experience with other countries


Encouraging start ups, promoting R&D and knowledge transfers are the pillars
which help Switzerland to position itself as European champion of innovation
Switzerland – GII Ranking #7 Switzerland

 Overview: Switzerland is positioned as the “European champion” of innovation, surpassing even the Scandinavian countries and this is based on around
- R& D Project promotion - Market-oriented R&D, which companies pursue in collaboration with universities R&D-Project Promotion in joint projects
- Start up and Entrepreneurship - Creation, setting up and development of start-up companies through education, training, coaching, and access to financing
- Knowledge and technology transfer – Knowledge and Technology Transfer (KTT) in regional networks. CTI is involved in international research programmes


 CTI – CTI is the Confederation‟s innovation promotion agency of Switzerland government  CTI Start-up - CTI Start-up enables entrepreneurs to realise their innovative idea
and has an annual budget of around CHF 100 m professionally
- CTI Invest - Supports Swiss High Tech companies that are looking for investors and - CTI Start-up reviewed more than 1 800 projects, and awarded over 200 start-up
that take part in the CTI Start-up coaching process, or which are already holders of the enterprises with the CTI Start-up Label
CTI Start-up label  Venture 2010 - A Swiss-wide business plan competition of ETH Zurich and McKinsey &
- Venture Kick - Invites researchers to start their own business by financing the rapid Company, Switzerland
development of product ideas that stem from their research projects  ManuFuture- A joint initiative of the mechanical, electrical and metallurgical manufacturing
- R&D Project promotion - R&D project promotion in the areas like life sciences( Biotech industries and partners from academia that supports activities to maintain to strengthen the
and Medtech), Enabling sciences(ICT, Business management and finance, logistics, production place in Switzerland
production), Micro and Nano technologies and Engineering Sciences  Internationalise R&D activities - CTI is an active player in designing international
 Innovation Cheque - Innovation cheque is a pilot scheme that intends to encourage SME programs and platforms for applied R&D especially within the European Research Area. CTI
to engage in technology transfer, a maximum of EUR 5000 can be applied under innovation paves the way for SMEs to engage in applied R&D und thus create added value in
cheque Switzerland
 Increased Budget for innovation - Government has increased the budget of the KTI/CTI,  Swiss Innovation forum - The Swiss Innovation Forum brings together the know-how of
the main funding agency for applied research, by EUR 13 m leading institutions in the fields of innovation, creativity and design
 Information campaign programme - the government is launching a EUR 0.3 m information  Do Research (DORE) funding programme - A common initiative which supports research
campaign targeted at the academic and private sectors on the subject of funding projects in social sciences
opportunities offered by the KTI/CTI  ilab - The idea is to present science in an attractive way to high school students

Note: Innovation Promotion Agency - CTI

Promoting “innovation in the enterprises, especially the SMEs” and “industry-
academia relationship” are the pillars of the Danish innovation strategy
Denmark – GII Ranking #8 Denmark

 Overview: Ministry of Science, Technology and Innovation is responsible for all innovation-related policies and support measures. Danish Agency for Science, Technology and
Innovation helps the Danish Government for innovation in Denmark through the Danish Council for Technology and Innovation (DCTI)
- DCTI‟s primary activities includes focussing on Commercialisation (of research) and entrepreneurs, Regional innovation, Interaction between research and industry, ICT
integration in business and industry; and Infrastructure between research and industry
- The two main goals of the DCTI‟s action plan for more innovation and effective knowledge dissemination (2007-2010) are “Danish enterprises must be more and
continuously innovative, the small and medium-sized enterprises included” and “Knowledge dissemination and interaction between research and industry shall be
strengthened”


 Promoting SME and academic tie-ups:  Focus on students/ interns involved in Science & Technology:
- The „double-up‟ initiative: An initiative started in 2008 and with a funding of DKK 30 m - Students shall be taught systematically to work with innovation. Focus on innovation
plans to offer public co-financing of co-financed research projects between SMEs and management shall be increased and a spirit of entrepreneurship and innovation will
academic and research institutions be promoted in educational establishments
 Encouragement of the Approved Technological Service (ATS) Institutes: ATS institutes - Industrial PhD Initiative: The number of Industrial PhD‟s carried out in cooperation
are the portal to obtain knowledge from the academic and research institutions for SMEs. between an enterprise and a university are planned to be doubled in 2010, this initiative
Some of the main initiatives planned for the ATS institutes are has a funding of DKK 380 m
- Innovation centre for ebusiness: With a funding of DKK 21 m, the centre plans to  Focus on Public sector innovation policies: From 2007 onwards, the DCTI intends to
support SMEs use of Information and Communication Technology (ICT) focus on the public sector and its role in innovation policies. The DCTI will set a strategy for
- Regional innovation agents: As part of the imitative regional "innovation agents" will how the public and private sectors can mutually support enterprise innovation
contact the group of SMEs which are not traditionally innovative to promote innovation  Mentorship to the SMEs: By 2007, ~70% of SMEs in the Denmark did not have systematic
and knowledge collaboration access to, or management of innovation
• The initiative has a funding of DKK 32m and expects to establish contact with 700- - The planned mentor scheme will lead to experienced and competent industry managers
900 SMEs being loaned to SMEs, to give them competencies in, and tools for, innovation
 Proof of Concept financing: DKK 40 m is planned to be spent on funding ~50 proof of management and preparation of strategies leading to innovation
concept studies by the public research institutions
 Future Innovation Incubators: DKK 500 m is planned to spent on financing incubators to
promote the commercialisation of new technologies/ ideas


Promoting R&D, Intellectual Property knowledge, industry-academia linkage
are the main focus areas of the Japanese innovation strategy
Japan – GII Ranking #9 Japan

 Overview: Innovation Policy in Japan is set by the Council for Science and Technology Policy (CSTP), with implementation carried out by the Ministries and funding agencies.
Japanese strengths lie mostly in business R&D expenditures, promotion of Intellectual Property, number of researchers, and public-private partnerships
- However, R&D is promoted a lot in the Japanese innovation landscape, government constituted ~16% of the total R&D expenditure in 2008. (The R&D funding in Japan is
dominated by the funding from the private sector)
- Innovation 25 is a long-term strategy initiative for the creation of innovation contributing to the growth till the year 2025. The initiative seeks to realise a prosperous future for
Japan by designing a mix of short-term and long-term policies that promote research, human resource development, and social reform


 The Industrial Innovation Fund was established as a public-private fund with funding from  Promoting Industry-Academia linkage: Japanese industry has high research
20 major companies at around EUR 740 m to support start-ups and innovative technologies capacity and a large number of companies are usually involved in research
 The Third Science and Technology Basic Plan (2006-10) has numerous initiatives programs in the universities
which harness innovation for future economic growth
- 77% of the R&D expenditure in Japan is funded by the private sector
- The total budget for such stimulus measures is EUR 420 b of which EUR 65 b is for
investing in new technologies  Turning national research institutes into Independent Administrative
Agencies: As part of the administrative reform in 2001, the legal status of most
- The Third Plan is expected to spend ~ EUR 185 b on R&D
national research institutes was changed to Independent Administrative Agencies
 Supporting Clusters: Special clusters are given preference for promoting sectors like life (IAI)
sciences, information and telecommunications, environmental sciences, and
nanotechnology/ materials - This greatly increased the flexibility of the institutes in terms of personnel and
- Ministry of Science and Technology (MEXT) and Ministry of Economy, Trade and financial management
Industry (METI) support projects for regional innovation, such as the Industrial Cluster  Promoting intellectual property: Establishment of a system to strategically and
Program (EUR 123 m) and the Knowledge Cluster (EUR 65 m) organisationally promote the creation, management and use of intellectual
 Government baked funding agencies/ entities: properties of universities through
- New Energy and Industrial Technology Development Organisation (NEDO) - As of - Integration and strengthening of cooperation between intellectual property
2009, had a budget of EUR 1.7 b, it distributes funds to various technology and national headquarters of universities and Technology Transfer Organisation,
projects in fields such as electronics and IT, machinery systems, etc., enhancement of industry-government-university partnership in local
- The National Institute of Information and Communications (NICT) has an overall budget communities, and promotion of inter-university cooperation
of JPY 403.3 b and conducts R&D on information technology


The Dutch innovation policy focuses on talent, public & private research and
innovative entrepreneurship
Netherlands – GII Ranking #10 Netherlands

 Overview: The Dutch innovation policy developed by the new inter-departmental Knowledge & Innovation program department (K&I) of the Dutch government, focuses on three main 'policy agendas„
i.e., Talent, Public & private research; and Innovative entrepreneurship
- Further, the two main policy delivery organisations in the Netherlands are SenterNovem (industrial R&D and innovation policy) and the Netherlands Organisation for Scientific Research (NOW)
(research policy)
• SenterNovem is an agency of the Dutch Ministry of Economic Affairs. It promotes sustainable development and innovation, both within the Netherlands and abroad. Its efforts are specifically
focused on innovation and environment/ sustainable development
• NWO is responsible for enhancing the quality and innovative nature of scientific research, further it also initiates new developments in scientific research


 Supporting the SMEs in financing: The Dutch government introduced measures to help SMEs,  Innovation Subsidy for Collaborative Projects (Implemented by SenterNovem) : The
by expanding a loan guarantee scheme and providing innovation vouchers initiative is aimed at promoting joint R&D initiatives between domestic and foreign
- SME loan guarantees (Implemented by SenterNovem): Provides opportunities for SMEs to companies
receive bank loans in cases where they lack sufficient collateral. The government provides an - Once the projects fulfil the relevant criteria laid out by the Dutch Ministry of Economic
extra guarantee of up to EUR 1 m Affairs, the subsidy is awarded to the Dutch counterpart of the project
- Knowledge vouchers for SMEs (Implemented by SenterNovem): With an innovation  Research and Development (Promotion) Act (Implemented by SenterNovem and the
voucher SMEs can buy knowledge from (semi-) public knowledge institutes, from large
Tax authorities): This Act provides a fiscal facility for companies, knowledge centres and
companies with R&D expenditures that exceed EUR 60 m per annum, and from foreign public
self-employees who perform R&D work
knowledge institutes within the EU
• In 2009, a total of 7,000 vouchers were available with SenterNovem. 3,500 vouchers of - A contribution is paid towards the wage costs of employees directly involved in R&D.
EUR 2,500 each and 3,500 vouchers for EUR 7,500 each The contribution is in the form of a reduction of payroll tax and social security
contributions and an increase in the tax deductions available to the self-employed
 Supporting innovation programs in specific areas: “Innovation programs”, in specific “key
areas” in which the Netherlands excels and can distinguish itself internationally are being pursued  The Dutch government targets to be amongst the top five in EU for share of innovative
companies that collaborate with universities and research non-university institutes by 2011
- In 2009, there were eight innovation programs in specific areas like nanotechnology, food &
nutrition, water technology, life sciences, materials sciences, etc.,  Establishment of innovation centric entities/ agencies: The presence of innovation
 Targeted economic stimulus package, especially for 2009 and 2010: A total of EUR 6 b is centric agencies/ entities helps in creating an environment that promotes innovation
expected to be spent in 2009 till 2010 on labor market (especially targeted at youth), education - SenterNovem, Netherlands Organisation for Scientific Research (NOW ), ICTRegie
and knowledge, easy credit availability, infrastructure and construction, etc., (established by the Dutch government for innovation and research in the ICT sector)
 Supporting the R&D staff of the private firms in the crisis(2009-10): With a funding of EUR
280 m, the initiative will help the researchers employed in private sector secondment assignments
at public research institutes and universities


Canada‟s innovation strategy focuses on promoting R&D in specific sectors,
establishing technology partnerships and offering Tax credits
Canada – GII Ranking #11 Canada

 Overview: Canada does not have a defined innovation policy under the responsibility of a single department. Rather, the innovation governance system is distributed among a
number of departments, agencies and organisations in the public and private sectors
- The innovation/ R&D environment in Canada revolves around building an Entrepreneurial Advantage, a Knowledge Advantage, and a People Advantage


 Technology Partnerships Canada (TPC)(1) was a special operating agency of Industry  The Scientific Research and Experimental Development (SR&ED) program is
Canada for providing funding support for strategic R&D, TPC had a special focus on the a federal tax incentive program to encourage Canadian businesses of all sizes
small and medium sized enterprises (SMEs) and in all sectors to conduct R&D in Canada
- As of Dec 2007, TPC's portfolio consisted of 761 projects representing a multi-year
- Generally, a Canadian-controlled private corporation (CCPC) can earn an
investment of CAD 3.7 b (88% of this investment targeted small to medium-size
companies across Canada). Further, these projects have leveraged an additional CAD investment tax credit (ITC) of 35% up to the first CAD 3 m of qualified
14.2 b in private sector innovation spending expenditures for SR&ED carried out in Canada, and 20% on any excess
 Programs/ initiatives supporting research/ innovation:
amount. Other Canadian corporations, proprietorships, partnerships, and
trusts can earn an ITC of 20% of qualified expenditures for SR&ED carried out
- EUR 220 m was provided to the Natural Sciences and Engineering Research Council
in Canada.
(NSERC) over three years (2007-2010) to create centres of excellence (CoEs) in
commercialisation and research in priority areas such as renewable energy and  Supporting students
environmental technologies - Canadian Govt. is increasing support for scholarships, including in science
- The government provided EUR 310 m over 7 years (2007-2014) to Sustainable and engineering, to encourage more youth to pursue advanced degrees in
Development Technology Canada to invest with the private sector in large-scale next Canada
generation facilities for the production of fuels from renewable resources
- As announced in Budget 2007, the government will invest CAD 35 m over two
 The National Research Council-Industrial Research Assistance Program (NRC-IRAP)
is Canada's premier innovation assistance program for small and medium-sized enterprises
years, and CAD 27 m per year thereafter, to expand the Canada Graduate
(SMEs) Scholarships
- NRC-IRAP provides innovation assistance to 10,000 firms annually, sharing the - When the new scholarships are fully in place, the councils will support an
financial risks with some 2,800 of these for R&D projects and pre-commercialisation additional 1,000 students per year
activities

Note: (1) The terms and conditions of the TPC program expired on December 31, 2006; No new projects are being contracted presently, but all existing contracted projects are being supported


By fostering a technology culture and promoting tech entrepreneurship , Hong
Kong has been able to build an innovation led economy
Hong Kong – GII Ranking #12 Hong Kong

 Overview: Hong Kong is amongst the top 3 Asian countries which has done well in innovation and is able to develop a conducive innovative economy by
- Support of applied research and development (R&D) and technology transfer and application, foster an innovation and technology culture in the community
- Promoting a technological entrepreneurship and providing technological infrastructure
- Facilitating the development of knowledge intensive human capital

 Key Matrices : R&D Expenditure (% of GDP) : Not Available; Time to start a business(2010): 6 days; Public Expenditure on Education (% of GDP): 3.52% (2007)


 The Innovation and Technology Fund - It aims to support projects that contribute to  Technological Infrastructure: The ITC helps develop world-class support infrastructure to
innovation and technology upgrading in industry, as well as those essential to the upgrading facilitate technological upgrading and development of the industry
and development of industry - The Hong Kong Science and Technology Parks Corporation (HKSTPC) – Develops
- Innovation and Technology Support Programme – supports midstream/downstream parks and also nurtures technology-based and design start-up companies through its
R&D projects undertaken by universities, R&D centres, industry support org, incubation programme which provides low-cost accommodation as well as management,
associations ( spent USD 4.04 m during 11 months of 2009) marketing, financial and technical assistance
- University-Industry Collaboration Programme - UICP aims to stimulate private sector - The Hong Kong Applied Science and Technology Research Institute Company
interest in R&D through leveraging the knowledge and resources of universities ( spent Limited - ASTRI performs relevant and high quality R&D for transfer to industry for
USD 198.6 m during 11 months of 2009) commercialisation with a view to elevating the technology level of the industry
- General Support Programme - GSP supports those projects that contribute to fostering - Hong Kong Productivity Council (HKPC) - Promotes productivity excellence of Hong
an innovation and technology culture in Hong Kong ( spent USD 188.6 m during 11 Kong industry through the provision of integrated support across the value chain
months of 2009)  Fostering an Innovation and Technology Culture through innovation forum: annual
- Small Entrepreneur Research Assistance Programme - SERAP is a technology Innovation Festival which comprises exhibitions, seminars, InnoTech workshops, talks and
entrepreneurship programme which provides pre-venture capital stage financing to technology competitions to arouse the interest of the general public in innovation and
support technology entrepreneurs (spent USD 331.5 m during 11 months of 2009) technology
 Applied Research Fund - This is a government-owned venture capital fund to support local  Technology co-operation with the Mainland - A joint committee was formed to encourage
technology ventures with commercial potential, it is administered by the Applied Research co-operation between Mainland and Hong Kong in innovation and technology
Council (ARC), a private company wholly owned by the Government


Promoting R&D, support for specific clusters and tie ups between companies
and educational institutes are the main pillars of Finland‟s innovation policy
Finland – GII Ranking #13 Finland

 Overview: Finland is highly praised in terms of the innovation culture that it creates. The main pillars of the Finland‟s innovation strategy are
- Support for specific clusters
- Promotion to research and development (R&D): Special encouragement is given to the educational institutions, ~26% of the R&D funding in the state budget in 2009 was for
Universities
- Tie ups between the companies and educational and research institutions


 Public funding for research and development (R&D): Finland is one of the most  Finland developed an innovation strategy in 2008-09, it is focussed around the below
research-intensive countries in the world mentioned points
- National spending on R&D totals EUR 6.9 b (3.7% of GDP). Businesses account for - Innovation activity in a world without borders: Public research, development and
around 74% of R&D expenditure whilst the remaining 26% is government funded innovation financing will be developed so as to meet the demands of a borderless
- Tekes, the Finnish Funding Agency for Technology and Innovation, finances operating environment
~1,500 business R&D projects annually, 50%-60% of this funding for companies is - Innovative individuals and communities: Encouraging environment for individuals
directed at small businesses and communities which participate in innovation, for example
- Support of numerous government backed agencies: Some examples include: Tekes, • Finland‟s research and university system will be developed into an internationally
the Finnish Funding Agency for Technology and Innovation ; The Academy of Finland competitive development environment for expertise and innovations
is the prime funding agency for core research in Finland; Sitra, the Finnish Innovation • Support for entrepreneurs
Fund; Finnvera is a specialised financing company governed by the Finnish State; The
Finnish Ministry of Employment and the Economy oversees Finland‟s technology and - Demand and user orientation: The financing and service system promoting growth
innova-tion policy entrepreneurship will be renewed into a clear entity, operating with a focus on
entrepreneurs and investors
 Promoting research in specific clusters: The Strategic Centres for Science,
Technology and Innovation (CSTI) established in Finland are new public-private - Systemic approach: A broad based and comprehensive approach to all the public
partnerships which encourage research in specific sectors. The sectors are: sector initiatives

- Energy and the environment; Metal products and mechanical engineering; Forest  Strong International Networks: Finnish research groups and companies have been
cluster; Information and communication industry and services; Built environment; successful in EU research programs. Finland is also a member of the European Space
Health and well-being Agency (ESA), the European Southern Observatory (ESO) and the European Organisation
for Nuclear Research (CERN)


Core sponsors of this research:
Roy Lenders, VP Global Leader SCM
Koen Klokgieters, VP Global Leader R&D and Business Innovation
Freek Duppen, Sr. Innovation Consultant

www.capgemini.com/consulting

Capgemini Consulting is the strategy and transformation consulting brand of Capgemini Group Copyright © 2009 Capgemini. All rights reserved.

Benchmarking Study On Innovation Policy 29012010

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