Selected Topics in EU Policy. TOPIC 1: An introduction to the economics of innovation

Transcription

1 Selected Topics in EU Policy March 17, 2005 TOPIC 1: An introduction to the economics of innovation Pr. Michele Cincera Université Libre de Bruxelles D.U.L.B.E.A. & C.E.P.R. 22/03/2005 M. Cincera - ULB, DULBEA-CERT 1

2 OUTLINE Presentation of main STI indicators main S&T policy instruments (Position of Belgium w.r. to its main trade partners, US, Japan, ): Government budget appropriations or outlays for R&D (GBAORD) R&D expenditures S&T collaborations Scientific publications Patents statistics Innovation indicators Entrepreneurship 22/03/2005 M. Cincera - ULB, DULBEA-CERT 2

3 1. GBAORD (= government budget appropriations or outlays for R&D) Science and Technology (S&T) policies provide the framework of public intervention with regard to the production, transmission and use of new knowledge and technology among the players involved in National Innovation Systems, i.e. private enterprises and higher education institutions involved in research activities, public research and technology organisations and bridging institutions. Public budget allocations to R&D cover not only the R&D financed by the government and carried out in the publicly-owned research institutes but, rather, also the R&D publicly financed and carried out in other sectors, i.e. business enterprise, higher education, and also abroad (including international organisations). 22/03/2005 M. Cincera - ULB, DULBEA-CERT 3

4 1. GBAORD 22/03/2005 M. Cincera - ULB, DULBEA-CERT 4

5 22/03/2005 M. Cincera - ULB, DULBEA-CERT 5

6 1. GBAORD (= government budget appropriations or outlays for R&D) Because of linguistic and cultural diversity in the country, composed of Flemish, French, and German-speaking populations, the need was felt to arrange the allocation of powers in personal matters to specific entities, the Communities. The Communities are thus founded on population groups rather than on territories. The majority of competence areas involving linguistic, personal and cultural concerns, among which education is a major one, are placed under the responsibility of the Communities. 22/03/2005 M. Cincera - ULB, DULBEA-CERT 6

7 1. GBAORD (= government budget appropriations or outlays for R&D) Driven by the desire for more autonomy in the regional economies, Belgium has been divided into three Regions, defined on a territorial basis: Wallonia, Flanders, and Brussels-Capital. Economic development, land planning, environment, natural resources management and recently agriculture are among the major competences of the Regions. The Federal State retains competences in areas of national interest, such as defence, justice, monetary and fiscal policy, social security and important parts of health policy. 22/03/2005 M. Cincera - ULB, DULBEA-CERT 7

8 1. GBAORD (= government budget appropriations or outlays for R&D) Communities have the main responsibility for fundamental research in universities and applied research in higher education establishments. Regions have the main responsibility for economically oriented research, technological development and innovation promotion. The Federal State is responsible for scientific activities linked to its own competences, and develops STI activities of national and international interest, in agreement with Communities and Regions 22/03/2005 M. Cincera - ULB, DULBEA-CERT 8

9 1. GBAORD 22/03/2005 M. Cincera - ULB, DULBEA-CERT 9

10 1. GBAORD 22/03/2005 M. Cincera - ULB, DULBEA-CERT 10

11 1. GBAORD 22/03/2005 M. Cincera - ULB, DULBEA-CERT 11

12 Indicateurs d innovation et d entrepreneuriat CBPRD 22/03/2005 M. Cincera - ULB, DULBEA-CERT 12

13 22/03/2005 M. Cincera - ULB, DULBEA-CERT 13

14 1. GBAORD Science The R&D reimbursable loan is a major policy instrument of the Walloon Region targeted at R&D in enterprises ( 25 million were devoted to this support in 1999). It consists of an advance (interest free loan) granted to companies to meet the costs of an applied research project. The rationale for this public support is the share of the risk borne by the company. The return for society consists of economic activity and job creation in the Region through the exploitation of the research results. The loan covers 70% of the costs of the project for an SME and 50% for a large company. It need only be reimbursed if the project is a commercial success. If the exploitation is not carried out, the loan is transformed into a subsidy and the intellectual property of the research goes to the Region. 22/03/2005 M. Cincera - ULB, DULBEA-CERT 14

15 1. GBAORD Besides the reimbursable loans, the Walloon Region financially supports the implementation of basic industrial research projects in enterprises, with the aim to foster economic activity in Wallonia. In 1999, 10 million were spent by DGTRE for this purpose. The support takes the form of a subsidy covering 50% (70% for an SME) of the cost of the research project. 22/03/2005 M. Cincera - ULB, DULBEA-CERT 15

16 1. GBAORD The FIRST-Enterprise scheme is a subsidy scheme established in 1993 in Wallonia, with the aim to reinforce the research and technological capabilities in Walloon companies and their linkages with research institutions in the Region. The Region spent 2 million on this instrument in The essence of the scheme is a subsidy granted to enterprises by the Region for the hiring of a researcher from a university (80% of the salary for an SME, 50% for a large enterprise, for a maximum of two years). The researcher should spend part of its time in a university and work on a project with industrial objectives. The expectation is that this dual assignment should facilitate technology transfer from the university to the company, leading to commercial exploitation in the Region in the medium-term. The research laboratory also receives a grant from the Region. 22/03/2005 M. Cincera - ULB, DULBEA-CERT 16

17 2. R&D expenditures 22/03/2005 M. Cincera - ULB, DULBEA-CERT 17

18 2. R&D expenditures 22/03/2005 M. Cincera - ULB, DULBEA-CERT 18

19 22/03/2005 M. Cincera - ULB, DULBEA-CERT 19

20 2. R&D expenditures 22/03/2005 M. Cincera - ULB, DULBEA-CERT 20

21 2. R&D expenditures Japon US EU15 3 2,8 2,6 2,4 2,2 2 1,8 Source: Third European Report on S&T Indicators, /03/2005 M. Cincera - ULB, DULBEA-CERT

22 Suède Finalde STI Japon indicators 2. R&D US expenditures Allemagne France Danmark Pays-Bas Belgique EU-15 Autriche UK Irlande Italie Espagne Portugal Grèce 1,21 1,04 0,97 0,76 0,67 2,13 2,09 2,02 1,96 1,93 1,86 1,84 3,78 3,37 2,98 2,69 2, Source: Third European Report on S&T Indicators, /03/2005 M. Cincera - ULB, DULBEA-CERT 22

23 Entreprises Universités Gouvernement Autres STI indicators US 75 Suède R&D expenditures Irlande Belgique Allemagne Japon Finlande UK EU-15 France Autriche Danemark Pays-Bas Espagne Italie Grèce Portugal Source: Third European Report on S&T Indicators, /03/2005 M. Cincera - ULB, DULBEA-CERT % 20% 40% 60% 80% 100%

24 2. R&D expenditures Source: Third European Report on S&T Indicators, /03/2005 M. Cincera - ULB, DULBEA-CERT 24

25 2. R&D expenditures Distribution of total R&D by type of activities and source of financing (1995) Research: 25% Development: 75% Total R&D Personnel: 58% 100% Investment: 9% Intra-mural R&D Extra-mural R&D 88% 12% Organisation: 33% Collective Research Firm Centres RTO's & HEI's Product: 64% 70% 5% 25% Process: 23% Own funds External funds Other: 13% 88% 12% Source: Office for Scientific, Technical and Cultural Affairs, own calculations. Firms Government RTO's & HEI's 55% 40% 5,0% own region: 7% own region: 67% other Belg. Reg.: 28% other Belg. Reg.: 3% abroad: 65% abroad: 30% 22/03/2005 M. Cincera - ULB, DULBEA-CERT 25

26 3. S&T collaborations 22/03/2005 M. Cincera - ULB, DULBEA-CERT 26

27 3. S&T collaborations Based on the Treaty establishing the Eurpean Union; the Framework Programme has to serve two main srategic objetcives: Strenghtening the scientific and technological bases of industry and Encourage its international competitiveness while promoting research activities in support of other EU policies 22/03/2005 M. Cincera - ULB, DULBEA-CERT 27

28 3. S&T collaborations Classification of the FP6 Instruments The Instruments have been classified into three different groups on the basis of their purpose: o The first group comprises the instruments aimed at generating, demonstrating and validating new knowledge through research and development, and is composed of Integrated Projects (IPs) and Specific Targeted Research Projects (STREPs); o The second group is composed only of the Networks of Excellence (NoEs), an instrument aimed at the durable integration of the participants activities/capacities; o The third group comprises the instruments aimed at supporting collaboration and coordination, and other activities (such as conferences and studies) and is composed of Coordination Actions (CAs) and Specific Support Actions (SSAs). 22/03/2005 M. Cincera - ULB, DULBEA-CERT 28

29 3. S&T collaborations Shared-cost contractual research is the major instrument of the EU S&T policy. These actions are financed under the Framework Programmes and comprise international agreements made up of large, small and medium-sized firms, universities, plus public research and technology organizations. The Commission pays up to 50% of the costs of these research projects. Companies generally share the remaining costs while universities and public research centres can receive up to 100 percent of additional costs. The research activities are often defined as pre-competitive since they are carried out jointly before each member of the collaborative agreement sells its own products on the final goods and services market (First European Report on S&T Indicators, 1994). 22/03/2005 M. Cincera - ULB, DULBEA-CERT 29

30 3. S&T collaborations 22/03/2005 M. Cincera - ULB, DULBEA-CERT 30

31 3. S&T collaborations 22/03/2005 M. Cincera - ULB, DULBEA-CERT 31

32 3. S&T collaborations 22/03/2005 M. Cincera - ULB, DULBEA-CERT 32

33 3. S&T collaborations The fundamental objective of EUREKA is to enhance, by means of industrial, technological and scientific cooperation between companies and RTOs, the productivity and competitiveness of Europe s industries and national economies on the world market through products, processes and services that have world-wide market potential and are based on advanced technologies. The EUREKA initiative is more oriented towards near-market research than the pre-competitive Community Framework Programmes. 22/03/2005 M. Cincera - ULB, DULBEA-CERT 33

34 3. S&T collaborations 22/03/2005 M. Cincera - ULB, DULBEA-CERT 34

35 4. Scientific publications Two commonly used indicators of scientific output are: The number of publications recorded in one of the recognized bibliometric databases: they represent the quantity of output. The number of citations: they are often used as indicators of research quality. It is presumed that the more a publication is cited, the higher the quality of this publication is. The most important databases for bibliometric analysis are: Science Citation Index (SCI): produced by the Institute for Scientific Information (ISI) in Philadelphia, Pennsylvania; PASCAL: bibliometric index produced by the OECD; Information Science and Scientometric Research Unit (ISSRU) of the Library of the Hungarian Academy of Sciences in Budapest. 22/03/2005 M. Cincera - ULB, DULBEA-CERT 35

36 4. Scientific publications 22/03/2005 M. Cincera - ULB, DULBEA-CERT 36

37 4. Scientific publications 22/03/2005 M. Cincera - ULB, DULBEA-CERT 37

38 4. Scientific publications 22/03/2005 M. Cincera - ULB, DULBEA-CERT 38

39 5. Patent statistics An invention patent is, above all, a right accorded by a government to an inventor in exchange for the publication of his/her invention. It allows the latter to prevent, for an agreed period, any third party from utilising his/her invention in any manner. Besides their legal function of recognition and protection of industrial property, patents can also constitute a source of documentary information, but can also be transformed into statistical data. These patent data are thus considered to be indicators of the output of the innovation process. Patent statistics can be broken down according to technological fields and they are comparable internationally and over long periods of time. However, not all inventions are patented or patentable and the propensity of patenting across industry sectors may differ substantially. 22/03/2005 M. Cincera - ULB, DULBEA-CERT 39

40 5. Patent statistics 22/03/2005 M. Cincera - ULB, DULBEA-CERT 40

41 5. Patent statistics 22/03/2005 M. Cincera - ULB, DULBEA-CERT 41

42 5. Patent statistics Distribution of EPO patent applications Japon 14,9% 19,8% US 32,4% 28,2% EU-15 42,2% 44,8% /03/2005 M. Cincera - ULB, DULBEA-CERT 42

43 5. Patent statistics Distribution of USPTO patent applications EU-15 Japon 16,9% 19% 19,5% 21,7% US 52,7% 52,7% /03/2005 M. Cincera - ULB, DULBEA-CERT 43

44 Allemagne _11,2% Finalde _14,2% Suède _10,4% STI indicators Pays-Bas _14,4% 5. Patent statistics Danmark _11,5% Japon _10,2% 259,4 258,6 248,2 186,9 151,3 140,5 Distribution of USPTO patent applications Luxembourg _19,7% 139,2 Autriche _9,2% 131,2 EU-15 _10,4% 128,4 Belgique _9,2% 124,1 France _7,5% 120,8 EU-25 _10,4% 107,7 US _8,2% 103,6 UK _8,5% 92,3 Italie _9,5% 64,6 Irlande _21,7% 61,6 Espagne _13,5% 18 Grèce _10,6% 4,2 Portugal _14,7% 2, /03/2005 M. Cincera - ULB, DULBEA-CERT 44

45 Cumulated distribution of the number of patent applications of the top 50 Belgian firms (EPO and USPTO, ) Sources: EPO and USPTO databases; own calculations EPO USPTO cumulated share (%) number of fims 22/03/2005 M. Cincera - ULB, DULBEA-CERT 45

46 Top 20 Belgian firms in terms of European and US patent applications, Note: Sources: C% = cumulative share; the companies in italics are in only one of the top 20 rankings. EPO and USPTO databases; own calculations Rank EPO C% USPTO C% 1 Agfa-Gevaert 15.6 Agfa-Gevaert Solvay 22.0 Solvay Janssen Pharmaceutica 25.4 Janssen Pharmaceutica Fina Research 27.7 Bekaert Bekaert 29.8 Fina Research Alcatel/Bell Telephone 31.6 Picanol IMEC 33.4 Glaverbel Ford New Holland 35.2 Raychem Picanol 37.0 Staar Raychem 38.6 Centre de Recherches Metallurgiques Smithkline Biologicals 40.0 UCB Centre de Recherches Metallurgiques 41.3 IMEC Innogenetics 42.3 Plant Genetic Systems Heraeus Electro-Nite International 43.3 Michel Van de Wiele ACEC 44.2 Dow Corning Esselte 45.1 Esselte UCB 45.9 Metallurgie Hoboken-Overpelt Sofitech 46.7 Fabrique National Herstal Xeikon 47.5 Texaco Belgium Michel Van de Wiele 48.2 Innogenetics /03/2005 M. Cincera - ULB, DULBEA-CERT 46

47 6. Innovation The European Report on Science and Technology Indicators (1994, 1997) highlighted the fact that Europe excels in science and technology but lags behind in the valorisation of the results obtained. This scientific excellence combined with commercial weakness has been called the European Paradox. This paradox was the subject of much discussion in the mid to late nineties. It is related to the endogenous capacity of a country to transform its technology base into an industrial strength. It is therefore important not only to give an overview of the science and technology base, but also of the strength of a country s capacity to transform science and technology into industrial products. 22/03/2005 M. Cincera - ULB, DULBEA-CERT 47

48 6. Innovation Classic R&D input and output indicators such as R&D expenditure, publications and patents do not give an insight into this innovation trajectory. They are indicators of the inventive step in the innovation process. An entirely new set of indicators has to be explored to add the commercial idea to this stage. In general, we distinguish between two kinds of indicators: those concerning innovation and those concerning entrepreneurship. 22/03/2005 M. Cincera - ULB, DULBEA-CERT 48

49 6. Innovation When discussing innovation, we essentially talk about change. Change can take two forms: it can either be a change in the things that an organisation produces or offers or it can be a change in the ways in which these things are created or delivered. The change in things is usually referred to as product innovation. A change in means is considered to be a process innovation. Both product and process innovation are two extremes of a continuum. In practice, it is difficult to make a distinction between the two. Most innovations contain both to a certain extent. Services are a very good example of this. Electronic Banking can be considered both a 22/03/2005 M. Cincera - ULB, DULBEA-CERT 49

50 6. Innovation 22/03/2005 M. Cincera - ULB, DULBEA-CERT 50

51 6. Innovation 22/03/2005 M. Cincera - ULB, DULBEA-CERT 51

52 6. Innovation 22/03/2005 M. Cincera - ULB, DULBEA-CERT 52

53 6. Innovation 22/03/2005 M. Cincera - ULB, DULBEA-CERT 53

54 22/03/2005 M. Cincera - ULB, DULBEA-CERT 54

55 6. Innovation 22/03/2005 M. Cincera - ULB, DULBEA-CERT 55

56 6. Innovation 22/03/2005 M. Cincera - ULB, DULBEA-CERT 56

57 ADDITIONAL FINDINGS: Long run effect of cash flow WAL VLA BXL AGE99 AGE20 AGE10 QUOTED NON QUOTED SUBSIDIARIES DOMESTIC LARGE MEDIUM SMALL /03/2005 M. Cincera - ULB, DULBEA-CERT 57

58 ADDITIONAL FINDINGS: Long run effect of cash flow AGRICULTURE VEHICLES HORECA CHEMICALS TEXTILE FOOD CONSTRUCTION OTHER MANUF ELECTRICALS PAPER RUBBER WHOLESALE TRANSPORT OTHER SERVICES METALS FINANCE /03/2005 M. Cincera - ULB, DULBEA-CERT 58

59 6. Innovation 22/03/2005 M. Cincera - ULB, DULBEA-CERT 59

60 6. Innovation 22/03/2005 M. Cincera - ULB, DULBEA-CERT 60

61 7. Entrepreneurship Proportion of adults in each country who are involved in operating a business that is less than 42 months old 22/03/2005 M. Cincera - ULB, DULBEA-CERT 61

62 7. Entrepreneurship Confidence level that opportunities for starting a new business will be good during the next six months 22/03/2005 M. Cincera - ULB, DULBEA-CERT 62

63 7. Entrepreneurship family and friends and independent private investors (= business angels) providing funds for a new business started by someone else 22/03/2005 M. Cincera - ULB, DULBEA-CERT 63

64 7. Entrepreneurship 22/03/2005 M. Cincera - ULB, DULBEA-CERT 64

65 7. Entrepreneurship 22/03/2005 M. Cincera - ULB, DULBEA-CERT 65

66 7. Entrepreneurship 22/03/2005 M. Cincera - ULB, DULBEA-CERT 66

67 Selected Topics in EU Policy March 17, 2005 TOPIC 2: Productivity growth, R&D and the role of collaborative agreements: Evidence for Belgian manufacturing companies and some lessons for the EU. Pr. Michele Cincera Université Libre de Bruxelles D.U.L.B.E.A. & C.E.P.R. 22/03/2005 M. Cincera - ULB, DULBEA-CERT 67