The transfer of S3 from the EU to Ukraine challenges and recommendations*

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1 *This presentation is based on an interim report on Ukraine's S3 potential developed within the Danube-INCO.NET project. As the report is not yet finished, all findings presented shall be regarded as preliminary First SMARTER Conference on Smart Specialisation and Territorial Development (Seville, Sept ) The transfer of S3 from the EU to Ukraine challenges and recommendations* Philipp R. Brugner, ZSI Department for Research Policy & Development, Vienna, Austria

2 Agenda for this presentation The RI-LINKS2UA project S3 in non-eu countries The adoption of S3 in Ukraine Current reform of the Ukrainian R&I system Other strategies addressing S Outlook/Summary

3 The RI-LINKS2UA project 01

4 » Project Coordinator Centre for Social Innovation (ZSI), Vienna, Austria» Duration 36 Months, February January 2019» Project Budget 1 million, funded by EC under Horizon 2020» RI-LINKS2UA aims to facilitate the policy dialogue on R&I between EU and Ukraine by ad-hoc operational tailor-made support reflecting the actual demands from the EU-Ukraine R&I affairs through analytical evidence and policy advice. RI-LINKS2U is funded by the Horizon 2020 Framework Programme for Research and Innovation under grant agreement no , H2020-INT-BILAT-2016

5 RI-LINKS2UA Project Consortium 8 partners from EU Member States (MS) and 4 partners from Horizon 2020 Associated Countries (AC) (1 from Moldova and 3 from Ukraine). Extended partnership: support from 7 ministries responsible for R&I in EU MS and business networks (Business Angels, International Network of SMEs, etc. Cooperation with SGUA and EU Delegation in UA Other projects: IncoNet EaP, EaP+, Danube- IncoNet, BSH, etc. CNRS DLR META ZSI IPPT- PAN ETAg MESU, NASU, NIP CIP RCISD UEFISCDI

6 RI-LINKS2UA Project Activities Circle BUT: The topic of S3 is not a direct part of the project activities therefore all proposed measures currently are only meant as stimuli helping to guide UA on itsq way towards S3 and are not binding (!) Stimuli: The project might facilitate the process of S3 adoption in Ukraine through different measures to be proposed on demand, such as faciliation of dialogue between the stakeholders involved in S3- making support to the organisation of dedicated joint learning events peer reviews of bodies concerned with S3 support to UA self-assessment in S3 etc.

7 02 S3 in non-eu countries

8 What are S3 and RIS3? S3: Smart Specialisation strategies are integrated, place-based economic transformation agendas that do five important things: 1 1. They focus policy support and investments on key national/regional priorities, challenges and needs for knowledge-based development. 2. They build on each country/region s strengths, competitive advantages and potential for excellence. 3. They support technological as well as practice-based innovation and aim to stimulate private sector investment. 4. They get stakeholders fully involved and encourage innovation and experimentation. 5. They are evidence-based and include sound monitoring and evaluation systems. Macroeconomic context: Revision of EU Cohesion Policy for part of Europe 2020 growth strategy (smart, sustainable, inclusive) S3 formally endorsed by Council of the EU and EP as part of the Cohesion Policy new state of affairs: for any ERDF funding the design of S3 is an obligatory precondition as a consequence, with the help of S3 in place ESIF funds shall be used more efficiently by the states/regions and synergies between policies therein and between public and private investments shall be increased RIS3: National/regional research and innovation strategies for S3 1 Centre for Social Innovation

9 How to learn about S3 in non-eu countries? Through the S3 platform, the EU seeks to share benefits of the EU with neighbouring countries and countries aspiring EU membership. The new EU neighbourhood policy recognises that the modernisation and diversification of economies should be encouraged by facilitating increased participation of neighbourhood countries in EU initiatives and applying successful models such as smart specialisation. 1 Context: In order to support the EU enlargement process, the JRC carries out different events under the so called Enlargement and Integration Action (E&IA) : Specialised workshops, conferences, training courses, peer reviews etc. This way the participation of non-eu partners into the EU smart specialisation community is facilitated. From which EU tools non-eu countries can actively benefit? 1) Outcomes of S3 Design Learning Workshops in non-eu countries (e.g. Serbia, Moldova, Ukraine) shall be distributed as widely as possible 2) Utilisation of instruments by the EU for transfer of S3 good practices (EFT European Training Foundation, EaPTC Eastern Partnership Territorial Cooperation) 3) Seeking membership at the JRC S3 platform 4) Transnational cooperation in the framework of H2020 (Ukraine is associated since 17/08/2015) or other EU instruments helps to get required access to knowledge and funding

10 The adoption of S3 in Ukraine Current reform of the Ukrainian R&I system Other strategies addressing S3 03

11 The adoption of S3 in Ukraine Registered countries and regions in the S3 platform ( Ukraine is not yet member Just recently S3 platform in liaison with NASU organised an information event on RIS3 for UA (Kyiv, September 15, 2016) Currently the R&I system undergoes a severe reform process => the R&I system is on hold and this sustains UA from more active looking into S3 At the same time the reform provides a new momentum => the new R&I strategy shall take up S3 as an integral part for the future trajectory of the national R&I system! => furthermore, this enables Ukraine to really decentralise its R&I system for the first time and to link R&I with economic policies through the S3 approach!

12 Current reform of the R&I system in Ukraine Where does the country stand in regard to R&I performance? Schuch, Weiss, Brugner, Büsel (all ZSI): Background report: Peer review of the Ukrainian Research and Innovation system, EC DG RTD, Brussels, 2016 (forthcoming publication in the frame of H2020 PSF for EC R&I Innovation Observatory) Quick facts: 1. Key players in R&I in UA: Committee for Education and Science, MESU, NASU, MEDT, other academies etc 2. Amendment of law on S&T foresees establishment of a new National Council of Ukraine on the Development of Science and Technology (expected start: 2017) -> developing a new vision and restructuring the existing R&I system 3. GERD: % of GDP, %, % (projection) 4. Ranking in the GCI by WEF: , , GCI Ranking in University-industry collaboration in R&D : , , UA enterprises conducting innovative activities (data provided by MESU self-assessment report): % (of total), %, % 7. Many other facts on R&I performance of Ukraine are accessible in the background report (co-publications, patents, HR, International R&D cooperation, Quality of the science base, etc.).

13 Current reform of the R&I system in Ukraine the key messages ahead R&D sector is currently under reform MESSAGE: Capacities shall be developed which allow to implement S3 in Ukraine in the future - e.g. trained human resources, mandated agencies etc. (both on the national and regional level) Decentralisation of R&D MESSAGE: Fostering the knowledge also in the regions would ease national S3 collaboration in the future (links to point 1.) Regions shall regard S3 implementation as their own responsibility MESSAGE: This must open the way for development of regional strategies within the national 3S strategy. Revision of current law on S&T MESSAGE: Instead of a long list of broadly defined priorities country shall embark on some certain special areas with potential (see: Yegorov: THE CASE STUDY ON R&I POLICY FRAMEWORK IN UKRAINE WITH REGARD TO S3, 2016, unpublished)

14 Goals, Opportunities and Threats of the current reform processes in place Strategies/ Amendments in place General reform of R&I system Strategy 2020 (initiated by the President) oekty/2020 Goals Reform of national R&I system Growth in GDP Better performance in Doing Business Index Overall growth in wealth Opportunities Under the law and strategy on regional development a decentralisation of R&I system shall be endorsed could lead to local governance of R&I and the development of sectoral strategies for S3 Threats Usually the business sector is not involved in S&T law-making this could cause problems when it comes to the implementation of the law proper implementation of legislative is usually the weakest part of S&T and innovation policy S3 is not explicitly mentioned, but some visions correspond to key principles of S3 Stronger national economy and business climate proper implementation of legislative is usually the weakest part of S&T and innovation policy Amendment of the law on Priorities in Science and Technology Development (not yet touched) New priority setting in R&I Potential to revise the very long list of national R&D priorities in favour of dedicated areas for S3 Inclusion of industry already in identification process of these areas proper implementation of legislative is usually the weakest part of S&T and innovation policy

15 1. Reform of S&T laws 2. Reform of institutions Four sectors for reform 3. Reform of policy implementation 4. Establishment (rather than reform) of monitoring mechanism

16 Four sectors bear potential for reform in favour of S3 S&T laws amendment to take up S3 concept 1. Law On innovation activities 2. Law On Scientific Parks 3. Law On special regime of innovation activity of technological parks 4. Law On state regulation of activity in the sphere of technology transfer 5. Various other S&T laws Management of institutions Management and human resources of R&D implementing organisations in Ukraine Implementation of S3 requires a change in the working culture of these institutions (sharing of responsibilities, principle of subsidiarity, capacity building, training of human resources) Harmonisation of policies Better coordination of instruments on the horizontal (provision of education, lower costs of starting a business) and vertical (thematic funding by the government) level in regard to S&T policies Establishment of a monitoring system Establishment of a monitoring and evaluation framework to assess the impact of S3 is the only key to thoroughly assess the outcome of an implemented S3 (see: Kleinbrink et al. Monitoring innovation and territorial development in Europe, 2015)

17 S3 assessment wheel for Ukraine according to five dimensions of RIS3-making Made on the basis of analysis of recent events, publications and communications with R&I experts from academia and government The present S3 wheel should be regarded as preliminary, as a broad survey with participation from specialists from different fields will be conducted in the future, in order to provide more solid quantitative results Source: Yegorov: The case study on R&I policy framework in Ukraine with regard to S3, NASU, 2016 (draft) SMARTER Conference in Sevilla, September 29, 2016)

18 Other (already existing) national and international strategies/impetus correlating with S3 topic in Ukraine With national support Regional innovation programs National innovation strategy With international support Smart Specialisation Strategies for UA USAID: SME development strategy (based on Small business act) German Advisory Group: A cluster support programme for Ukraine (suggestion) Regional developmen strategies + socio-economic programs under the authority of UA regions New law on regional development Space for others?

19 Outlook

20 A set of six interlinking measures to make use of the S3 potential in Ukraine Monitoring and evaluation Analysis of national/regional level Adequate policy mix Governance level Priority setting Towards a shared vision

21 6 barriers to be addressed on the way towards successful implementation of S3 in Ukraine (Yegorov, 2016) 1. Analysis: National, regional Harmonisation of legislation (vertical + horizontal) Improvement of economic situation in general Assessment of regional innovation and industrial policies adaption 2. Governance level 4. Priority Setting Identification of a limited set of priorities promising potential for incorporation into S3 3. Shared vision Differences in the understanding of innovation and smart specialisation Joint agreements between ministries responsible for S&T are hard to achieve Business sector is not sufficiently involved in the S&T law making Lack of cooperation between actors Low involvement of Ukrainian companies into joint scientific and innovation projects R&D 'assets' are viewed largely as a liability (low immediate relevance to the realities of market economy) 6. Monitoring & Evaluation No comprehensive M&E system in UA Non-transparent procedures and wrong indication of resources Measurement of outputs is neglected, whereas resource indicators play a key role in decision-making process 5. Adequate policy mix Financial barriers are regarded as one of the main obstacles to support innovative developments in UA Proposed new measures must be sensitive towards the entrepreneurial sector (venture capital, IPR rights, support for start-ups) Business climate in general must be improved to attract both local and foreign investment

22 Thank you for your attention! Philipp R. Brugner Project Manager ZSI - Centre for Social Innovation Department for Research Policy & Development Linke Wienzeile 246 Vienna, Austria brugner@zsi.at

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