Challenges of National InnovationSystem in Poland

Stanislaw Dyrda PhD, MSE, Ass. Prof.

Warsaw University of Technology, Faculty of Management

National Centre for Research and Development

NATIONAL INNOVATION SYSTEM –DEFINITION

NIS OF POLAND –ACTORS

NIS OF POLAND - IDENTIFIED CHALENGES

ECONOMIC OVERVIEW OF POLAND

RDI SYSTEM CHARACTERISTICS

RESPONSIBLE DEVELOPMENT STRATEGY

INNOVATION ECOSYSTEM

NCBR ACTIVITIES

NEW APPROACH TO RDI

CHANGES OF PARADIGMS

Agenda

• The National Innovation System is the flow of technology and information among people, enterprises and institutions which is key to the innovative process on the national level.

• Innovation and technology development are results of a complex set of relationships among actors in the system, which includes enterprises, universities and government research institutes.

National Innovation System in Poland

Central government Administration (Ministries,

Agencies, Fundations, Funds, etc.)

Local authorities (in particularentities responsible for

innovation funding), technological parks, etc.

State-owned Universities, Stateowned Research Institutes, etc.

Private enterprises (inluding big enterprises, SMEs, small

offices/home offices, startups), etc.

private equity/venture capital funds, business angels, banks,

private research entities,

private research entities

State-owned companies, banks.

public-private partnership,

clusters, funds of funds etc.

National Innovation System in Poland - actors

STATE OWNERSHIP PRIVATE OWNERSHIP

• Provide the necessary funding to support researchand innovation activities (increase GERD/BERD, use of EU funds)

• Ensure the continuity of funding for prospective projects at various stages of development - from basic research, through applied research to market implementations and production scaling.

• Support national strategies, in particular –Responsible Development Strategy.

• Ensure the transition towards sectors with higher technological content and value added to sustain strong growth performance

National Innovation System in Poland –identified challenges

Poland is the 8 largest EU economy, since 2004 ithas grown over 2 times (from 203 bn USD in 2004 to467 bn USD in 2016 according to IMF)

General government gross debt in Poland isrelatively small (50%), Greece (177%), Italy (132%),Portugal (130%), Ireland (110%)

Population 38.5 million people, well-educated andambitious

Source: Eurostat, International Monetary Fund - the forecasted value for 2017

Chart: GDP growth in Poland (%) 2004-2017

5.1

3.5

6.27.2

3.92.6

3.74.8

1.8 1.7

3.4 3.62.9 3.4

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

0.0

2.0

4.0

6.0

8.0

10.0

Economic Indicators

Number of patent applications

Patent applications, broken down by types of applicants

Patents issued

31.27

27.41

8.61

2.174.69

2

0.7

Regional OP

OP Infrastructure and environment

OP Intelligent Development

OP Knowledge, Education and Development

OP Digital Poland

OP Eastern Poland

OP Technical Assistance

EU funds for Poland

2014-2020 financial perspective

Budgets of operational programmes [Billions Euro]

EU Operational Programs funds for Poland and NCBR (2014-2020)

27.4

8.6

4.7

2.22.00.7

31.3

0

10

20

30

40

50

60

70

80

Poland = 76,9 BN Euro

RegionalProgrammes

OP TechAssistance

OP Dev ofEastern Poland

OP Digital Poland

OP KnowledgeEducation Dev

OP SmartGrowth

OPInfrastructureand Environment

Chart: European funds for Poland and NCBR (2014-2020)

4.556

1.445

1.033

0.029

0

1

2

3

4

5

6

7

8

NCBR = 7,063 BN Euro

OP Digital Poland (3.3, III)

OP Knowledge Education Dev (III)

OP Smart Growth (IV)

OP Smart Growth (I)

Allo

cati

on

(B

illio

n E

uro

)

Source: Ministry of Infrastructure and Development, NCBR

• 82.5 bn euro cohesion policy budget

• of which 76.9 bn euro Operational and Regional Programmes

• Over 7 bn euro for NCBR

• including 6 bn euro – OP Smart Growth (Priority I - Support of innovation in enterprises and PriorityIV - Increasing R&D potential)

Allo

cati

on

(B

illio

n E

uro

)

Main institutions stimulating R&I in Poland

• POLISH DEVELOPMENT FUND – PFR:•POLISH AGENCY FOR ENTERPRISE

DEVELOPMENT – PARP•POLISH INVESTMENT AND TRADE AGENCY -

PAIH

MINISTRY OF DEVELOPMENT

•NATIONAL SCIENCE CENTRE - NCN•NATIONAL CENTRE FOR RESEARCH AND

DEVELOPMENT - NCBR

MINISTRY OF SCIENCE AND HIGHER EDUCATION

•DEDICATED PROGRAMMES STIMULATING INNOVATIONS AND RESEARCH PROJECTS IN RELEVANT SECTORS

OTHER MINISTRIES and INSTITUTIONS

e.g. Ministry of Finance, Ministry of Digitization,

Ministry of NationalDefence, Local

authorithies etc.

Re

sear

ch&

Inn

ova

tio

ns

Key Documents of Innovation System

Technological Foresight of

Industry - InSight2030

(2010)

National Research

Programme

(2011)

National Smart

Specialisations

(2014)

ResponsibleDevelopment

Strategy

(2016)

Ministry of Economic Development

Ministry of Science and Higher Education

Ministry of Economic Development

In cooperation with World Bank

Ministry ofDevelopment

New energy technologies → Advanced Technologies for Energy Generation, Technologies Supporting Development of Safe Nuclear Power Engineering

Diseases of affluence, new medicines and regenerative medicine →STRATEGMED launched in 2013

High IT technologies and mechatronic technologies

New material technologies → TECHMASTRATEG launched in 2016

Environment, agriculture, forestry → BIOSTRATEG launched in 2014

Social and economic development of Poland in the context of globalization

Security and defence → Since 2011 NCBR takes actions related to scientific research and studies for the purposes of national defense and security

1.

2.

3.

4.

5.

6.

7.

• Document of 16 August 2011

National Research Programme

Innovative technologies and industrial processes (in horizontal approach)

Healthy society

Agri-food, forestry-timber and environmental bioeconomy

Sustainable energy

Natural resources and waste management

1.

2.

3.

4.

5.

• Approved on 8 April 2014• All specialisations divided into 5 groups (initially 18 specialisations) • National Smart Specialisations – the latest update made on 3 December 2015• Currently 20 smart specialisations

National Smart Specialisations

Responsible Development Strategy

79% of EU

AVERAGEfor

GDP PER CAPITA

25% of GDP for

INVESTMENTS

2%of

GDPfor

R&D

>22,000 of

MID - SIZED AND LARGE

COMPANIES

70% MORE POLISH FDI

Source: Plan of Responsible Development

Objectives to be reached before 2023

Fundamental

Research

NCN

Aplied Research

NCBR,

variousFoundations

Private equity funds

Business Angels

Market research, Product deployment

PFR/PARP

variousFoundations

Private equity funds

Business Angels

Production scaling/Investments

PFR/ ARP

PFR/PAIH

BANKS (CREDIT),

Private equity funds/VC Funds

Globalization

NCBR

PFR

BANKS

Privete Equity Funds/VC Funds

CONTINUITY OF FOUNDING

National Centre for Research and Development (NCBR)

• R&D-supporting government agency, subordinate to theMinistry of Science and Higher Education

• Largest research funding agency in Central & Eastern Europe• Funded from state budget and EU funds• Has run > 50 programmes in 2014-17• Institutional collaboration (ARP, NCN, GDDKiA and others)• International partnerships (Israel, RSA, Singapore, Taiwan &

other)

NCBR budget in bn EUR

1.3291.451

0.765 0.718

2014 2015 2016 2017

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

How do we act?

• Encouraging industry to commercialise research by co-funding R&D projects

• Bridging science with business• Providing entrepreneurs with „risk insurance policy”• Helping „from idea to industry”• Effectively assists in building a lasting technological edge

of the Polish economy• Current EU Operational Programmes: Smart Growth;

Knowledge, Education, Development

For whom?

42 %

26 %

20 %

8 %

3 %

Consortia

Enterprises

Higher Education Institutions

Research institutes

PAN units

WAT, PIT-RADWAR,AGH, PW, PŚ

EIT+, ADAMED, POLONIA AERO, SELVITA, SKOTAN

PW, UW, AGH, WAT, UJ

GIG, IMN, IPJ, ITE,CIOP

INSTITUTES OF: BIOCHEMISTRY, BIOPHYSICS, ORGANIC CHEMISTRY, PHYSICS,NUCLEAR PHYSICS, PHARMACOLOGY PHYSICS

AVERAGE GRANT VALUE (PER ENTITY) EUR 3,38 m

10 largest beneficiaries

390.5 Warsaw University of Technology

320.75 University of Warsaw

316 AGH University of Science and Technology

262 Military University of Technology in Warsaw

202 Jagiellonian University

145.5 Łódź University of Technology

181 Wrocław Research Centre EIT+

180.25 Wrocław University of Technology

158.5 Silesian University of Technology

139.75 Medical University of Warsaw

Total funding value of all contracts in m EUR – as of 1 August 2016

Building andequipping Wielkopolska Centre for Advanced Technologies(WCZT)

Centre for Advanced Materials and Technologies (CEZAMAT)

Clean Coal Technologies Centre (CCTW)

University of Warsaw Biological and Chemical Research Centre: Ochota Campus (CENT III)

Centre for Pre-Clinical Research and Technologies(CePT)

Lower Silesian Centre for Materials and Biomaterials Wrocław Research Centre EIT+

Large research infrastructure in Poland

Projects co-funded under the Operational Programme Innovative Economy

POZNAŃ

WROCŁAW

KATOWICE

WARSAW

NCBR PROGRAMMESFROM IDEA TO INDUSTRY

From highest risk phase up to foreign expansion

„Idea” stage

BRIdge Alfa

Budget: EUR 112.5 m

• Bridging innovators with seasoned entrepreneurs

• Funding early stage ideas with commercialisation potential

• Spin-off incubation by investment vehicles, the so-called alfas

TANGO: joint NCBR-NCN venture

Budget: EUR 10 m

• Practical application of fundamental research

• Facilitating science units introducing modern products or technologies to the market, e.g. by covering market analyses costs

NCBRALFA

ManagementPre-incubation

Proof of Principle

Inwestor80% 20%

Financing instrument – support forR&D projects in seed phase

SPIN OFF

Support for spin-offup to 1 M PLN

SPIN OFF

SPIN OFF

Alfa as donation operator(up to 1,6 M €)

Capital Funds of NCBR (within PFR – PolishDevelopment Fund)

NCBR VC(Venture Capital)

Budget: 1 100 M PLN

• First Polish, professional institutionalinvestor

• Market of financing• Inwestments into SMI with technological

profile with high potential for growth

NCBR CVC (Corporate Venture Capital)

Budget: 880 M PLN

• Planned 6-9 funds with capitalization of o 60-100 M PLN each in various market sectors

• Portfolio companies with the possibility of passing ideas in a corporation

• Faster project implementation

Idea development stage on Fast Track – NCBR flagship programme

Fast Track for SMEs

Budget: EUR 250 m

• Minimal formalities, intuitive procedure, decision made in 60 days

• Entrepreneurs „learn” how to invest in innovations and how to collaborate with scientists

• Funding – max. 80%

Fast Track for large enterprises

Budget: EUR 100 m

• Minimal formalities, intuitive procedure, decision made in 90 days

• Incentive to collaborate with scientists and develop own R&D teams

• Funding – max. 65%

SECTORAL PROGRAMMESSUPPORTING FLAGHIPS

Development of key Polish economy sectors

Sectoral programmes- examples

INNONEUROPHARM

Budget: EUR 47,5 m

Pharmaceutical and neuromedical sectors

e.g. innovative medical products

INNOMOTO

Budget: EUR 62.5 m(I competition)

Automotive sector

e.g. driverless car prototype

GAMEINN

Budget: EUR 20 m(I competition)

Videogames sector

e.g. graphic engines development

Domestic strategic programmes

STRATEGMED

Budget: EUR 200 m

• Combating civilizational diseases

• Development of regenerative medicine

BIOSTRATEG

Budget: EUR 125 m

• Food security• Biodiversity protection• Water resources

management

TECHMATSTRATEG

Budget: EUR 125 m

• Modern technologies of creating construction and nanoelectronic materials as well as of energy storage

TECHNOLOGY DEMONSTRATORS

Testing innovative solutions prior to market implementation

PILOT LINESformerly DEMONSTRATOR

Budget: EUR 125 m R&D projects of large enterprises linked with creating pilot installations

• Film production support system

• Multi-system electric locomotive

• Technology of joining plastics

JOINT VENTURESEncouraging research units to work on technological

solutions defined and required by specific entrepreneurs or other public institutions

CuBR

Budget: EUR 50 m

NCBR and KGHM Polish Copper SA to invest in 1:1 ratio

• Projects by science and science-industry consortia

• Sustainable development of non-ferrous metals industry

• Boosting one of key economy sectors

• Quick opening of deep deposits below 1,300 metres

• Remote controlled and automated device to break up lumps

• Highly efficient copper ore enrichment & slag decopperisation technologies

NEW APPROACH TO R&D SUPPORTBRIdge VC

BRIdge VC – return of investment

Whole instrument capitalisation: EUR 450 m

Max. 50% funding from NCBR, min. 50 % from private investors

• Capital funding instrument

• Supporting R&D and its commercialisation by investing in SMEs carrying out innovative early-stage projects

• 2 Funds of Funds: for VCs

and CVCs

• Selection of VC fund management teams

• Budget of each fund: EUR 20-50 m

• Investment period ends after 4 years

• Subsequently: portfolio companies development and carrying out most economically viable exit strategy

NEW APPROACH TO R&D INITIATIVES BASED ON DARPA EXPERIENCE:

Electromobility/emission-free public transport

NCBR· ANNOUCES FOR COMPETITION· INVITES ENTITIES

CONTRACTOR: • DEFINES THE PROBLEM• GOVERNMENT, LOCAL

AUTHORITIES, CORPORATION

STAGE I BUDGET FOR EVERYONE QUALIFIED ENTITY

STAGE IIHALF OF THE ENTITIESPROTOTYPES

STAGE IIIPRODUCT SAMPLES

STAGE IV

WINNERWE GET A STRONG

ECONOMIC ENTITY

THE CONTRACTOR GUARANTEE:· SAMPLE PART· MARKET· PRODUCT ADJUSTMENT· EVENTUAL PROMOTION ON FOREIGN MARKETS

International programmes

• Participation in international R&D programmes• Bilateral and network cooperation, including:

Polish-Norwegian Research Programme ERA-NET COFUND EUREKA BONUS -185

• Clusters and

industrial valleys

• Foreign

investment

• Review of

scientific

institutions

• Start in

Poland

• European

funds

• Financing

• Strong brand

Poland

• Development

of science

and

education

Sectoral

programmes:• INNOLOT

• INNOMED

• InnoSBZ

• INNOTEXTILE

• INNOCHEM

• INNOMOTO

• INNOSTAL

• BRIdge Alfa

• Joint

Undertakings(CuBR, PKP

Cargo, PKP

PLK, PGE)

• Tango

• Operational

Programmes (e.g. OP Smart

Growth - Fast

Track and Pilot

Lines)

• Go_Global.pl

• International

programmes

• Lider

• e-Pionier

• Operational

Programme

Knowledge

Education

Development

Responsible Development Strategyand NCBR’s activities

Hipromine

Saule Technologies

Platige Image

Medical University of Silesia Poltreg

Modertrans

Moratex

Example projects & beneficiaries

VIGO System

Flaris

Ursus C-3150V Power with an innovative Vigus transmission

Pregnabit by NestMedic

Modertrans

Educational robot

StethoMe

First change of paradigm

ACADEMIA

BUSINESS ACADEMIA

BUSINESS

Budget, EU funds Budget, EU funds

Second change of paradigm

Very broad spectrum of supported areas

Focus on areas of key importance to economictransformation in line with theResponsible Development Strategy

Third change of paradigm

Non-refundable subsidies from the national budget or EU funds (with limited own contribution required from commercial beneficiaries)

Increased useof returnableinstrumentsto finance R&I

THANK YOU FOR YOUR ATTENTION

Stanislaw.Dyrda@pw.edu.plStanislaw.Dyrda@ncbr.gov.pl