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EUROPEAN INNOVATION POLICY:

Innovation policy: updating the Union’s approach in

the context of the Lisbon strategy

Thursday, 9 October 2003

Sofia, Bulgaria

J.N. DurvyHead of Unit, Innovation Policy

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THE INADEQUATE PERFORMANCE OF THE UNION : A CHALLENGE FOR THE COMING YEARS

• the European Innovation Scoreboard and other reports and indexes converge

• the innovation performance of the Union remains low in comparison with the United States

• insufficient innovation activity is a factor behind Europe’s underperformance in productivity growth

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A TENTATIVE TYPOLOGY OF COUNTRIES

PT

TR

SKSI

RO

PL LV

EECZ

CY

BG

J PUS

NO

ISUK

SEF I

HU

AT

NL

LUIT

IE

FR

ES LT

EL

DE

DK

BE

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

0 10 20 30 40 50 60

Average change in trend indicators (%)

2003

SII-

2

2. Losing momentum 1. Moving ahead

4 Fall ing further behind 3. Catching up

4

EU SPREAD VS US

IRL

SNL

L

FINS

FIN

SFINSD

UK

FINIRL

pEELDKPPELPIRLPLELPL-100

0

100

200

300

400

500

600

700

1.1

S&

E g

rads

1.2

Wor

k po

p w

3rd

edu

c

1.3

Life

long

lear

ning

1.4

Em

p h-

tech

man

uf

1.5

Em

p h-

tech

ser

v

2.1

Pub

lic R

&D

exp

2.2

Bus

ines

s R

&D

exp

2.3.

1 E

PO

h-t

ech

pats

2.3.

2 U

SP

TO

h-t

ech

pats

4.1

Ven

ture

cap

4.2

New

cap

sto

ck m

ark

4.4

Hom

e In

tern

et a

cces

s

4.5

ICT

exp

4.6

VA

h-t

ech

man

uf

Best

US

Worst

5

R&D BASED VS DIFFUSION BASED ?

5

5

10

10 15

15

20

R&

D B

AS

ED

IN

NO

VA

TIO

N I

ND

EX

DIFFUSION BASED INNOVATION INDEX

IT

F

EB

D

DK

SW

PT

NL

JAP

US

FIN

“Should improve R&D base”

“Should improve diffusionmechanisms”

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A HIGHLY DIVERGING INDICATOR

2.3.1 EPO high tech patent applications (per million population)

137.6

95.1

57.9

43.749.0 49.5

36.632.2

27.8 27.5 25.3 27.821.9 19.8 17.0

6.2 3.1 0.9 0.6

15.2

2.6 1.5 0.10

20

40

60

80

100

120

140

160

FIN S NL D DK F UK IRL B L A I E P EL EU IS NO US JP MT HU TR

High (Over 20% of EU mean)AverageLow (Below 20% of EU mean)

Spread = 1 : 228

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THE COMPLEX NATURE OF THE INNOVATION PHENOMENON

• R&D is an essential source of innovation and R&D investments in the European Union need to reach 3% of GDP in the coming years

• Innovation encompasses more than the successful application of research results, and if there is no entrepreneurial action, there is no value creation.

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THE DIVERSE “ROUTES TO INNOVATION”

• Innovation can be incremental or radical

• It can result from technology transfer or from the development of new business concepts

• It can be technological, organisational or presentational

• The speed and efficiency of the diffusion of innovation through the economy is critical to productivity and economic growth

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THE FIELD OF ACTION OF INNOVATION

POLICY

• Cultural factors : entrepreneurship, openess to innovation, customer attitudes, etc.

• Framework conditions : supportive regulatory and fiscal environment, competitive markets and well functioning capital markets

• Knowledge base : skilled and mobile human resources, science and technology, lifelong learning

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THE FIELD OF ACTION OF INNOVATION

POLICY

• Diffusion of knowledge : science - industry interfaces, clusters of excellence, platforms, etc.

• Support services : business support services, innovation agencies, local advisors,etc.

• Innovation enterprises : management of knowledge, organisational innovation, presentational innovation (design), new business models, network and platforms, the role of public sector (public procurement, etc.).

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THE UBIQUITOUS NATURE OF

INNOVATION POLICY

• Measurement of innovation performance might be biased towards indicators of technological innovation

• The design of public policies is hampered by a perception of innovation that is too restricted

• Dealing with a policy without a well-defined territory or an administrative home is a major challenge

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CURRENT CHALLENGES FOR EU

INNOVATION POLICY

• Inadequate performance (European Innovation Scoreboard)

• Enlargement and the changes in the Union’s innovation profile

• Mismatches between labour supply and demand

• Role of the public sector to boost innovation

• European diversity brings with it different aspirations and attitudes

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SOME EU INSTRUMENTS

• Political initiatives : Communication, Action plan, etc.• Funding instruments : Structural funds, framework

programme

• Regulations : Competition, State aids, IPR, etc.

• Coordination : benchmarking, transnational policy learning.

• Networking : Paxis and Gate2growth, IRCs

• Exchange of good practices : Paxis projects for instance.

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WHICH ACTION AT EU LEVEL

• A coordinated framework and common objectives

• A pro-active interaction with other EU policies

• The enterprise and its environment.

• Promoting the innovative enterprise

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A CO-ORDINATED FRAMEWORK AND COMMON

OBJECTIVES FOR INNOVATION POLICY

• Members States and the Commission should define a common vision

• Members States must build and strengthen their national innovation strategies

• Efforts at Member State and EU level must be supported by upgrading of knowledge on innovation, innovation systems and performance

• Improved framework for the mutual learning process between Member States

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INTERACTION WITH OTHER POLICY AREAS

• Interaction between competition and innovation policy should aim at encouraging the flow of new knowledge

• Fiscal policy and more generally state aids to boost components of national innovation systems, in addition to R&D

• Well functioning labour markets should provide adequate incentives and flexibility for both firms and employees

• Public procurements, performance based standards, etc.

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THE ENTERPRISE AND ITS ENVIRONMENT

• The Enterprise and its local environment : public administrations, infrastructures, local interfaces and support services.

• The service - industry interface : technology transfer, High tech start ups,etc.

• Clusters of excellence :

WHICH ACTION AT EU LEVEL : sharing experience and information, promoting good practices, training, awareness, etc.

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THE INNOVATIVE ENTERPRISE

• Concept to be defined

• Entrepreneurial innovation : management and strategies

• Networking of enterprises, linkages between large enterprises and SMEs.

• Private and public funding schemes

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FP6 is implemented by 5 specific programmes:

1. Integrating and strengthening the European Research Area

2. Structuring the European Research Area

3. Joint Research Centre activities

4. Nuclear energy (Euratom)

5. Joint Research Centre activities (Euratom)

SOME INFORMATION ABOUT THE FRAMEWORK PROGRAMME

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“INTEGRATING AND STRENGTHENING”SPECIFIC PROGRAMME

Priority research themes: € MILLION

1. Life sciences, genomics and biotechnology for health 2,255

2. Information society technologies 3,625

3. Nanotechnologies and nanosciences, materials, processes 1,300

4. Aeronautics and space 1,075

5. Food quality and safety 685

6. Sustainable development, global change and ecosystems 2,120

7. Citizens and governance in a knowledge-based society 225

Specific activities covering a wider field of research 1,300

Strengthening the foundations of the European Research Area: 320

Coordination of activities

Coherent development of research and innovation policies

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“STRUCTURING” SPECIFIC PROGRAMME

€ million

1. Research and innovation 290

2. Human resources 1 580

3. Research infrastructures 655

4. Science / society 80

2 605

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RESEARCH AND INNOVATION

1. Networking the players and users and encouraging interaction between them

2. Encouraging transregional cooperation

3. Experimenting with new tools and approaches

4. Putting services in place and consolidating them

5. Stepping up economic and technological intelligence

6. Analysing and evaluating innovation in Community research projects