Current highlights in EU innovation policy

Rotterdam School of Management

Overview:1. EU innovation policy

- what is it?- who does what?

2. 2008 results of the European Innovation Scoreboard and Trendchart

3. Funding for EU innovation policy

4. Some ideas about future directions…

5. If you would have been the Minister of Economic Affairs

Henriette van Eijl,

DG ENTR, Unit D1 (innovation policy)

State Aid, financial instruments,

Cohesion policytaxation, investor

readiness, etc.

KnowledgeTechnologies, methods,

Know-how, maret knowledgePatents copy right,

etc.

Research funding, IPR support, Technology transfer, Networking,

cluster, research infrastructure, etc.

CapitalPrivate & public sources

For enterprises of all sizes and development stages

Human CapitalSkills, creativity,

Mobility, Flexibility, etc.

Market regulations Env. & Health

protection, public procurement,

Standards, WTO, etc.

MarketsEU & global,

consumers, industry & public sector

Education and training prgs,

Labour & social lawimmigration, etc.

InnovationInnovationEnterprises: Product innovation, organisational, marketing, design,

Processes, Etc.

1. Which EU policies are relevant for innovation?

EU Innovation policy = Broad Based Innovation Strategy (from 2006)

9 priorities1. Intellectual Property Rights

2. Standardisation

3. Public procurement

4. Joint Technology Initiatives

5. Lead markets

6. European Institute of Technology

7. Clusters

8. Innovation in services

9. Risk capital markets

Examples of good progress

• Joint Technology Initiatives launched

• European Institute of Technology on track

• Communication and implementation of Lead Market Initiative

Lead Market Initiative - a policy mix to achieve maximum impact

Supply-side measures

Demand-side measures

- regulation- procurement

- R&D fu

nding

- Equity

support

- Fis

cal m

easu

res

…

The Aho-report, followed by a Communication “Putting knowledge into practice: a broad-based innovation strategy for Europe” of 2006

- standardisation- clusters?

Package = LMI

StandardisationLabelling

CertificationLegislation

Public Procurement

Complementary Actions

Networks of European

Contracting Authorities

to foster demand for innovation

EU Recommendation

for interoperability

Financial support (CIP) for market

replication projects

Guide on funding available for RE demonstration

and pilot projects

Product performance

standards

e-Health

Sustainable constructio

n

Protective textiles

Bio-based products

Recycling

Renewable energies

2nd generation of Eurocodes

SMEs guide on collaborative

working schemes in construction

Network to be set up by DG

INFSO

Waste Framework Directive

Lead

Mark

et

Are

as

Policy tools

Screening of national building

regulations

CEN Packaging Standards

Introduce the Electronic Health Insurance Card

Training platform for buyers and

users

FP7 call on bio-refinery pilot

plants

Mandatory national

targets for 2020

Activities already started in 2008:

EU Patient Smart Open Services

large scale pilot funded

Inventory of legislation

affecting bio-based products

Inventory of all relevant

standards

Innovation policy in Europe: who does what? Member States• National governments, including standardisation, public procurement and regulatory

organisations• Regional governments, cities etc• Innovation and regional agencies

European Commission initiatives• Complementing national initiatives

CIP: Competitiveness and Innovation Program Broad based innovation strategy (2006)

Lead Market Initiative

• Monitoring EU innovation performance and policy European Innovation Scoreboard Trendchart policy monitoring

EU legislation• Council of Ministers + European Parliament (based on proposals from the

Commission)

2008 results of the European Innovation Scoreboard and Trendchart

What is the European Innovation Scoreboard (EIS)?

Annual benchmarking of innovation performance across EU27

Identifying strengths & weaknesses, trends, patterns in innovation performance under the Lisbon Strategy

Methodology further improved for 2008: More emphasis on services, non-technological

innovation, outputs Measuring trends over time

Overall innovation performance summary innovation index of 29 indicators (2007 & 2006 data)

Innovation leaders: Switzerland, Sweden, Finland, Germany, Denmark, UKInnovation followers: Austria, Ireland, Luxembourg, Belgium, France, NetherlandsModerate innovators: Cyprus, Iceland, Estonia, Slovenia, Czech Republic, Norway, Spain,

Portugal, Greece, ItalyCatching up countries: Malta, Hungary, Slovakia, Poland, Lithuania, Croatia, Romania,

Latvia, Bulgaria, Turkey

Summary innovation performance EU Member States (2008 SII)

0.000

0.100

0.200

0.300

0.400

0.500

0.600

0.700

TR BG LV RO HR LT P L SK HU MT IT GR P T ES NO CZ SI EE IS CY EU NL FR BE LU IE AT UK DK DE FI SE CH

Innovation performance based on 2006-2007 data for Netherlands (Innovation follower)

Weaknesses: - NL slower growth in innovation-performance than EU27- Performance in Firm investments and Linkages & entrepreneurship is worse by lower Non-R&D innovation expenditures (-1.5%) and the Firm renewal rate (-4.4%).

Strengths:+ Finance and support and Linkages & entrepreneurship + Human resources, broadband access and Finance were main drivers for improvement in innovation performance

Policy trends in Europe : annual Trendchart report

Aim: to track innovation policy developments in all 27 EU Member States, plus Iceland, Norway, Switzerland, Croatia, Turkey, Israel, Brazil, Canada, China, Japan, USA and India.

See http://www.proinno-europe.eu/

Failures addressed in the overall EU innovation policy mix

65.3%

48.5%

39.0%37.0%

27.0%

21.7%

0%

10%

20%

30%

40%

50%

60%

70%

capabilityfailure

networkfailure

marketfailure

institutionalfailure

frameworkfailure

policyfailure

Capability failures remains the most prevalent category addressed by measuresInnovation leaders and followers (ie Netherlands) tend to address more network and policy failuresModerate innovators and catching-up tend to address more capability failures, followed by market failures

Groups targeted by the support measures

14.2%

4.7%

9.7%

9.8%

10.8%

15.8%

20.6%

21.4%

25.4%

29.5%

37.9%

42.3%

9.1%

3.4%

5.1%

8.0%

10.2%

10.2%

31.3%

19.9%

15.3%

21.6%

33.5%

29.5%

0.0%

0% 10% 20% 30% 40% 50%

Other

Other public education institutions (secondary, etc.)

Private institutions for education / lifelong learning

Trade Unions

Business organisations

Consultancies and other private service providers (non-profit)

Higher education institutions (education function)

SMEs only

Technology and innovation centres (non-profit)

Scientists / researchers (as individuals)

Other non-profit research organisations (not HEI)

All companies

Higher educations institutions research (research)

Target group (all measures) Target group (2007-2008)

SMEs!

3. Funding for EU innovation policy

On-going funding actions – the menu…

Supply-led

Demand-led

EU-led MS-led

FP- themes- Infrastructure- RSFF, ERC- CRAFT - People …

CIP- 3 pillars- EIF

ETP +/- 38

JTI (5x) 169/ERA-NET- EDCTP, AAL - ERA CAs

EIT – KIC (2-3) from 2010

National R&D programmes…

EUREKA

Structural Funds

Lead Market Initiative6 x, demand side policy

Structural Funds- Res infrastructures …

(Pre-commercial) public procurement

Regulatory frameworks:legislation, standardisation, IPR

Joint Programming (TBC)

€ 6.2 billion

Erasmus &

Erasmus Mundus:

Univ.Educ:Scholarships

e-learning Programme: ICT in schools

Leonardo vocational training

€2.1 billion

Environment:

Policy monitoring & develop.

Projects on:

Air, Energy, Climate,

Industry, Urban env., Soil

Waste, Water

Not EU research initiatives:

Rural

development

Fisheries &

Aquaculture

€ 50 billion

Research projects

(Mainly multi-country)

& joint actions (JTI, 169)

Scholarships

Policy coordination

Capacity building

€ 3.6 billlion

Multi-country

Innovation networks

Cluster, Monitoring

Support services

Policy development

Financial instruments

€ 86 billion (of the €347 billion)

Nat / regional programmes

Research, capacity, SME, Cluster, TT, services ...

Entrepreneurship

Innovative ICT

Human Capital

€ 450 million

Intermodal transport and freight logistics

Trans-European Networks (TEN)

Transport

Energy

Telecommunications

EU innovation & research funding instruments

CIP objectives 2007-2013; pillars

Facilitate access to finance for SMEs

€ 1129 million

Support services for enterprises (especially SMEs)

€ 338 million

Promotion of innovation and particularly eco-innovation

€ 585 million

ICT interoperability and up-take € 728 million

Energy issues (e.g. efficiency, renewable)

€ 727 million

Innovation Support Policy Initiatives

Serving complementary policy objectiveserving complementary policy objectives

• Sector-oriented analysis, develop and test new or better support tools, promote their wide adoption

• Innovation support providers in public-private partnerships with companies

• Support policy analysis, learning and coordination

• Innovation policy makers design and test new support programmes and policy methods

Focus of 2009 calls:

Clusters Knowledge-intensive services Eco-innovation Networks of public procurers in support of

lead markets

Deadline 12 Feb http://ec.europa.eu/enterprise/funding/files/themes_2008/calls_prop.htm

4. Some ideas about future directions…

Innovation policies: into the 4th generation

1st generation innovation policy: innovation follows from scientific research

2nd generation innovation policy interactive nature of the innovation process (e.g. innovation systems, clusters)

3rd generation innovation policy: recognises the need to mainstream innovation

objectives in a broad range of policy areas

4th generation innovation policy (future) puts society’s needs at its heart and translates this into opportunities for business

But how?

Development of a European Plan for Innovation

Commission Communication (June 2009) Assessing progress under Broad

Based Innovation Strategy Reviews of:

• lead markets initiative, • innovation support for services, • efficiency of innovation support, • financing innovation in SMEs

European Plan for Innovation (end 2009), linked to Post Lisbon strategy

Sta

kehold

er co

nsu

ltatio

ns,

worksh

ops, su

pportin

g stu

die

s an

d a

naly

sis

Innovation and economic crisis

in the spirit of Darwin: “It is not the strongest of the species

that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.”

Impact of financial crisis and economic downturn does not yet show in indicators, but:

Countries with higher innovation capacity better placed to recover faster. Hence EU better placed than 5 years ago but still behind US.

EU firms under investment in research and innovation is a particular concern.

Example from Finland… innovating through the downturn….

Based on information at Statistics Finland about inflation.

The funding includes funding for purchase of research services and EU’s Structural Funds. The funding for 2007 does not include any EU funds, since funds from the new Structural Funding period were not allocated until 2008.

Development of Tekes R&D funding in FinlandMillion euros

Nominalfunding

Realfundingdeflated bythe cost-of-living index

DM 2604702-2009 Copyright © Tekes

0

50

100

150

200

250

300

350

400

450

500

550

600

83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09

Finland’s financial crisis 1991-94

• Major bank sector difficulties

• Exports down by >20%

• GDP down by 13%

•Unemployment from 3,5% to 18%

VC tax incentives

Lead markets

YIC funding

New /missing

TYKES

Public procurement

StandardsNorms Innovative

public services

User communities

Sourcing know-how

Pre-compprocurem.

(R&D)

GreenProcurement

Living labs

Users’ tax incentives

COMPETENCEBASE

Participationand contribution

Participationand contribution

Mobility and attractivenessMobility and

attractiveness

Innovation communities & hubs

Innovation communities & hubs

Individuals and entrepreneurshipIndividuals and

entrepreneurship Co-innovationCo-innovation

Lead marketsLead markets

Broad-based innovation

Broad-based innovation

Leadership & change management

Leadership & change management

Finland’s innovation strategy - Focal points

SYSTEMIC APPROACH

DEMAND AND USER

ORIENTATION

WORLD WITHOUTBORDERS

INNOVATIVE INDIVIDUALS AND

COMMUNITIES

If you were the Minister of Economic Affairs, how would you answer these questions?

• Which areas or topics are priorities for further development in innovation policy for Europe?

• What is the relationship between future EU innovation policies and those at national and regional level?

References:

• Homepage DG enterprise: http://ec.europa.eu/enterprise/index_en.htm

• Homepage European innovation policy:http://ec.europa.eu/enterprise/innovation/index_en.htm

• Homepage Lead Market Initiative:http://ec.europa.eu/enterprise/leadmarket/leadmarket.htm

• Contact address LMI/ Henriette van Eijl: ENTR-LMI@ec.europa.eu

Thank you for your attention

What next ? – Mapping what and for whom

Financial support: grants & loans for research and demonstration projects, market replication, commercial innovation activities, staff exchanges, mobility, industrial & research capacity …

Direct innovation support services: technology-transfer, innovation capacity audits, IPR advice, partner finding, mobility portals, global market access …

Capacity building of investors, innovation talents, innovation support bodies, cluster managers, other multipliers …

Help build critical mass: clusters, PPP, JTI, …

Improve interaction among innovation actors: improve partnerships at nat/reg level, RoK, open innovation systems, internationalisation, cluster management, LivingLabs …

Improve support by nat/reg bodies: networks among innovation agencies, teaming up for larger scope, partnering ….

Research institutes, researchers, enterprises, students …

Banks, business angels, entrepreneurs, researchers, consultants, public bodies, development agencies …

Reg/loc actors, public & private, triple helix (business, research, education, finance…

Innovation / development agencies, consultants, technology parks, cluster managers …