Contract n 2005 CE.16.0.AT.015. A report to: The European Commission Directorate-General Regional Policy Evaluation and additionality

Transcription

1 Strategic Evaluation on Innovation and the Knowledge Based Economy in relation to the Structural and Cohesion Funds, for the programming period Contract n 2005 CE.16.0.AT.015 A report to: The European Commission Directorate-General Regional Policy Evaluation and additionality Country Report: FRANCE Version: Final Report produced by: Matthieu Lacave Lacave Allemand & Associés In association with LACAVE, ALLEMAND & ASSOCIES CONSULTANTS 7 July 2006

2 Legal Notice Neither the European Commission, nor any person action on behalf of the Commission is responsible for the use which might be made of the following information. The views of this study are those of the authors and do not necessarily reflect the policies of the European Commission.

3 CONTENTS Executive Summary i 1 Introduction 1 2 Investing in innovation and knowledge: a comparative overview of regional performance Country overview: innovation and the knowledge economy Regional disparities and recent trends Conclusions: innovation and knowledge performance 11 3 Innovation and knowledge: institutional context and policy mix at national and regional levels Institutional and legal framework for innovation and the knowledge economy Policy mix assessment Conclusions: the national innovation system and policy mix Structural Funds interventions to boost innovation and create a knowledge economy: Strategic framework for Structural Fund support to innovation and knowledge Strategic approach to innovation & knowledge in Structural Fund programmes Specific measures in favour of innovation and knowledge Learning from experience: the Structural Funds and innovation since Management and coordination of innovation & knowledge measures Effects and added value of Structural Fund support for innovation and knowledge Conclusions: Structural Funds interventions in favour of innovation and knowledge 36 5 Regional potential for innovation: a prospective analysis Factors influencing regional innovation potential A prospective SWOT appraisal of regional innovation potential Conclusions: regional innovation potential Future priorities for Structural Fund support for innovation and knowledge: options for intervention Strategic orientations for Structural Fund investments in innovation and knowledge Operational guidelines to maximising effectiveness of Structural Fund interventions for innovation and knowledge 48

4 Executive Summary While the French economy remains among the strongest in terms of GDP and the demographic situation is better than in all almost other EU countries, there is a general anxiety in France regarding a possible or effective decline. This anxiety is partly focused on French innovation capacities. In fact the most recent policy debates have enhanced the emphasis on and the awareness that France s innovation performance is not sufficient to ensure a sustainable growth pace and defend French competitiveness in the long-term. The latest figures clearly show that France is losing momentum : a declining trend in public research expenditure and in FDI intensity ; a weak position in lifelong learning, in non-technological innovations, in innovation capacities within SMEs, in patenting; and an insufficient specialisation in high-tech sectors. Globally it can be said that France is yet encountering difficulties for departing from its State-centred and State-piloted model relying on public research dominated by large research programmes, big research organisations and defence and private research concentrated on a few number of scientific and technological areas and firms ( champions nationaux ) located mainly in Ile-de-France. If there has been a progressive geographical redistribution of R&D activities, in particular public R&D linked to universities, outside Ile-de-France, RTDI activities remain concentrated in a few attractive regions (Rhône-Alpes, Midi-Pyrénées, Provence-Alpes-Côte-d Azur and Languedoc Roussillon) which encounter difficulties to turn their R&D potential into high-tech manufacturing industries. On the opposite, regions having succeeded in keeping and strengthening leading edge manufacturing activities (e.g. Haute-Normandie, France-Comté) are lacking public R&D and are at a disadvantage concerning higher education. The RTDI institutional framework is mainly centralised under both Ministries of Research and Industry. The present policy mix relies on the 1999 Innovation Law, the 2003 Innovation Plan, but it is changing significantly with the 2004 programme Poles of Competitiveness, and the 2006 Programming Law for Research, which are introducing major shifts, in particular in funding terms through the financing of research on a project basis and the introduction of fiscal measures (tax credits, tax breaks). Priorities that have gone up and are going up on the agenda aim at creating an innovation friendly environment and setting-up new governance models, at the national level only, using evaluation, foresight and benchmarking tools ; and at supporting innovation-driven clusters ( poles of competitiveness ) and the creation and growth of innovative enterprises, mainly academic spin-offs. Within this framework, regional authorities, until recently, have played a rather limited role, resulting in a clearly lacking of regional innovation governance systems and strategies, which is now a main challenge considering the current pilling-up of innovation actors at the regional level. The Structural Funds innovation and knowledge based economy related measures ( ) have been limited in terms of funding and have not had an innovative dimension. They have mainly fit into the matrix of the national/regional innovation 591 France doc i

5 system as of the beginning of the 2000 s, prior to the recent shifts in the French policy mix. They were structured along the existing national innovation schemes and complemented them financially. Then, the French SPDs reflect a standardised treatment of innovation, and without a strategic thinking, with support to RTDI infrastructures, technology transfer and innovation networks, and innovation within firms through OSEO-ANVAR schemes. Such a bias did not prevent them of having some leverage effects by helping to structure research and technological poles in thematic fields relevant to the regional economic fabric and to diffuse an R&D and innovation culture among firms. Some regions used Structural Funds for consolidating and strengthening their research and science strongholds or their industrial base, and other regions for compensating their weaknesses. However, the French programming period results and the Commission s orientations for call to a new mode, a new framework of interventions in the field of innovation, which should include the building of regional innovation governance system making possible clear strategic choices ; the greater selectivity of the interventions based on a shared diagnostic of territorial needs ; the systematic integration of an inter-regional dimension of the SFs interventions, in particular in regions where there is not yet a critical mass (in terms of R&D, technologies, higher education, industries, etc.) ; and a stronger focus on research-academia-business partnerships. Within this renewed framework, the Structural Funds interventions, combined with the EU innovation policy instruments (FP7, CIP) and by taking into account the different needs and potentials of the regions, should be focused on supporting: the definition of regional innovation strategies innovation-driven clusters and competence centres a more focused applied research and technology transfer the creation and development of high-tech and innovative businesses by providing a multidimensional support combining access to finance, knowledge transfer, development of high-tech services and non technological innovation within firms, diffusion of an entrepreneurship culture the development of equity finance the structuring and the mutualisation of higher education and research poles and their attractiveness capabilities 591 France doc ii

6 1 Introduction In March 2000, the EU Heads of State and government launched an ambitious political initiative for the European Union to become the most competitive, dynamic, knowledge-based economy by year The agenda, which has become known as the Lisbon Strategy, has included a broad range of policies and regulatory measures to achieve this goal. At the 2005 Spring Council of European Union, Heads of State and government concluded that all appropriate national and Community resources, including those of Cohesion Policy, should be mobilised in order to renew the basis of Europe s competitiveness, increase its growth potential and its productivity and strengthen social cohesion, placing the main emphasis on knowledge, innovation and the optimisation of human capital. In short, the Council recognised that while some progress has been made since 2000 in moving towards the goals enshrined in the Lisbon Strategy there remains a need to create a new partnership for growth and jobs 1 In launching the discussion on the priorities for the new generation of cohesion policy programmes, the Commission published on 6 July 2005 draft Community Strategic Guidelines entitled Cohesion Policy in Support of Growth and Jobs: Community Strategic Guidelines, One of the specific guideline is to improve the knowledge and innovation for growth. More specific areas of interventions, which are proposed by the Commission, include: improve and increase investment in RTD, facilitate innovation and promote entrepreneurship, promote the information society for all, and improve access to finance. 2 Innovation is an important factor in releasing the potential of the Lisbon agenda. The knowledge captured in new technologies and processes can drive growth and competitiveness and create new jobs. But knowledge must be treated as part of a wider framework in which business grow and operate. Developing knowledge-based economy requires adequate levels of investment in R&D, education, and ICT as well as creating a favourable environment for innovation. Less developed areas of the Union are also confronted with this new competitiveness challenge. Increasing cohesion leads to improvements in living standards and the reduction of economic and social disparities, which depend to an important extent on increases in productivity. Increasing competitiveness implies economic change through the introduction of new technologies and new methods of production as well as the development of new skills. Innovation is at the heart of this process. Technological and organisational change and new demands generated by rising income levels and factors which create new economic opportunities and therefore, contribute to the growth potential of these countries. 1 Communication to the Spring European Council (2005) Working together for growth and jobs: A new start for the Lisbon Strategy, COM(2005) 141. Available at: 2 Communication from the Commission (2005) Cohesion Policy in Support of Growth and Jobs: Community Strategic Guidelines, , COM(2005) Available at: France doc 1

7 Structural Funds are the main Community instruments to promote economic and social cohesion. In the past and current programmes, they have contributed to enhance the research potential and innovation in businesses and to develop the information society, particularly in the less developed areas. Cohesion policy has also promoted the development of regional innovation strategies and other similar initiatives in the field of the information society. The overall objective of the strategic evaluation study, as set out in the terms of reference, is that the study should provide conclusions and recommendations for the future of Structural Fund and Cohesion policy. In particular, the Strategic Evaluation will be used to prepare the negotiations with the Member States for , to prepare the next operational programmes and to provide input into the 4th Economic and Social Cohesion Report. In line with the tender specifications, this country report addresses the following issues: 1 An analysis of the current situation in the field of innovation and the knowledge-based economy at national and regional level. For the national level, performance is compared to the average performance for the EU25 Member States plus Romania and Bulgaria; and at regional level, where possible given available statistics, compared to a typology of EU regions; 2 Lessons from the past and current experience of implementing innovation and knowledge economy measures in the Structural Funds, both in terms of priorities and strategic approaches; as well as in terms of operational implementation; 3 Main needs and potential for innovation in the eligible regions drawing on available studies, strategy development and future and foresight studies; and 4 Recommendations on main investment priorities for Structural Funds over the programming period and their implications for regional development. 591 France doc 2

8 2 Investing in innovation and knowledge: a comparative overview of regional performance This section provides a synthetic overview of the relative performance of the country, and where relevant main regions, with respect to the EU25 average for a number of selected key structural indicators of innovation and knowledge. The analysis aims to identify main disparities and needs at national, and wherever possible, regional level with a view to supporting the definition of priorities for future Structural Funds interventions (see sections 5 and 6 of this report). 2.1 Country overview: innovation and the knowledge economy Exhibit 1 below provides a snapshot picture of the relative position of France compared to the EU-25 average for a series of key knowledge economy indicators. Appendix F enumerates a series of reports and documents that can further highlight this position 3. Exhibit 1: Relative country performance for key knowledge economy indicators France Unemployment (inverse) GDP per capita GDP per capita grow th Productivitity High tech services Higher education Know ledge w orkers Public R&D Population density % Value added industry % Value added services Government sector High tech manufacturing Business R&D S&T w orkers % Value added agriculture Lifelong learning Youth Female activity rate Relative to EU25 (=100) Source: calculations of MERIT based on available Eurostat and national data from depending on indicator. Detailed definitions and data for each indicator are provided in Appendix B. Following a period of strong growth during the second half of the 90 s, trends have slowed down in the recent years although years 2004 and 2005 showed slightly 3 See Annex Further Reading. 591 France doc 3

9 positive changes. While the French economy remains among the strongest in terms of GDP and the demographic situation is better than in all other EU countries (except Ireland), there is a general anxiety in France regarding a possible or effective decline, and this anxiety is partly focused on French innovation capacities. The sustained employment growth rate, which rose throughout the 90 s until 2002, fell again in France is slightly below the EU average regarding the high-tech manufacturing employment indicator 4. Labour productivity, however, is above the EU average at present (after an acceleration of productivity during the second half of the 90 s), whereas the activity rate is low for the young and the old age classes. France experienced a decline in terms of foreign direct investment intensity although the intensity remains above the EU average. It has a bad position with regard to the most relevant factors of attractiveness for investments in high-tech sectors and R&D activities. It also has a weak position in the use and diffusion of ICT (compared in particular to the USA and European Nordic countries). Until now, French competitiveness has resisted, but without the contribution of a steadier innovation performance, the present position might be not sustainable over the long term: the 2005 Growth Competitiveness Report ranks France in 27 th position, France losing 3 ranks with regard to the 2004 Report. This has been reflected in a loss of market shares from 2003 on the global market. The most recent policy debates have enhanced the emphasis on and the awareness that France s innovation performance is not sufficient to ensure a sustainable growth pace and defend French competitiveness in the long term. According to the latest figures 5, French innovation performance is clearly losing momentum; public research expenditure represents 0.95% of GDP and business research expenditure 1.25%. Since the 90s, the percentage of public research expenditure has decreased while the percentage of business research expenditure has increased, but still remains low 6. As a result, France is not very far from the objective of having 2/3 of GERD coming from business research, but for bad reasons. In addition, France is performing particularly low in non-technical change (organisational structures, design), and in innovation in SMEs. Patenting remains a weakness. Public investment in R&D can be expected to grow in the next years, as a consequence of new commitments from the State, but probably modestly due to budgetary constraints. New or increased incentives 7 should favour private investment. In the field of human resources for innovation, France ranks relatively well with regard to the working population with higher education, but the number of students in science and technology has been decreasing for years compared to the number of students in social sciences. It ranks poorly in lifelong learning (far from the EU 4 The weak presence of France on the high-tech manufacturing sector explains partly, with the energy price increase, the current deficit on commercial balance 5 European Innovation Scoreboard Comparative Analysis of Innovation Performance, Commission Staff Working Paper, SEC(2004) 1475, ; European Trend Chart on Innovation, France, ; OECD Science, Technology and Industry Outlook Except for a very recent decrease in medium and high-tech manufacturing activities, Trend Chart E;g.: increase in the volume allowed for tax breaks, new tax breaks for Jeunes Entreprises Innovantes. 591 France doc 4

10 average). However, in the past few years, several measures have attempted to address this issue (e.g.: the creation of an Individual Rights to Lifelong Learning in 2004) which have resulted in an improvement of performance in the lifelong learning rate (from 2.7 percent in 2002 up to 7.4 percent of the population concerned in 2004). Moreover, with an ageing researchers population, France needs to make the research careers more attractive. The debate on the role of research and innovation in the French economy has recently become hotter with a deep crisis affecting public research institutions and public research governance and missions. This is reflected in a succession of laws and plans: the 1999 Innovation Law (known as Loi Allègre ), the 2003 Innovation Plan, the creation of Poles of Competitiveness 8 (a kind of innovation-driven clusters), and the new Programming Law for Research adopted on March 4 th, These changes have been painful for the State apparel and have been criticised by the public sector unions. They have had so far only a relatively marginal influence, because: a) they are recent; b) they happen in a context of stringent financial constraints. It can only be said that the latest figures show a steady increase in the creation of enterprises in the technologically innovative sectors 9 since Globally, French strengths are linked to world champion companies in sectors such as materials (steel, cement, and glass), aerospace, agro-food, railway equipments, luxury; French business R&D is particularly strong in the nuclear and aerospace sectors, and in large companies. However, the contribution of French manufacturing industry to the added value of OECD countries industries follows a decreasing trend; moreover, the French industrial fabric is not sufficiently specialised in the high-tech sectors (with specific weaknesses in biotechnologies and software); patenting remains insufficient in comparison with other large countries. New public funding R&D orientations keep aerospace among the priorities and aim at strengthening life sciences and ICT. At the same time, there is an increasing tendency toward supporting geographical concentrations of R&D (public and business) as illustrated in particular with micro- and nano-technologies in Grenoble. 2.2 Regional disparities and recent trends In order to analyse and describe the knowledge economies at regional level in the EU, the approach adopted was to reduce and condense all relevant statistical information available for a majority of regions. The approach involved firstly reducing the information from a list of selected variables into a small number of factors by means of factor analysis. These factors are: Public Knowledge (F1): human resources in science and technology combined with public R&D expenditures and employment in knowledge intensive services is the most important or common variables in this factor. Regions with large universities will rank high on this factor. 8 The first support to clustering has regarded Systèmes Productifs locaux at the end of the 1990s, but without any focus on RTDI. 9 ICT (telecommunications, ICT services, etc.), pharmaceutics, biotechnologies and new materials, cf. 12 th Innovation Scoreboard, Ministry of Industry, DIGITIP, April 2005, page France doc 5

11 Urban Services (F2): The most important variables for this factor are value-added share of services, employment in government administrations and population density. A key observation is that academic centres do not necessary co-locate with administration centres. Private Technology (F3) This factor is most strongly influenced by business R&D, occupation in S&T activities, and employment in high- and medium-hightech manufacturing industries. Learning Families (F4). The most important variable in this factor is the share of the population below the age of 10. The Learning Families factor could also be understood as an institutional factor indicating a child-, learning- and participation- friendly environment, or even a knowledge-society-life-style based on behavioural norms and values that are beneficial to a knowledge economy. In a second step, the 200 plus EU27 regions were grouped into 11 types of regions (see appendix A) displaying similar characteristics by means of a cluster analysis. In the case of France the regions are grouped as follows 10 : Ile-de-France holds a unique position in France, as Science & Service Centre. It is performing strikingly high with regard to all indicators grouped under the heading Public Knowledge, together with the Business R&D and S&T workers indicators (ratio R&D expenditure/gdp: 3.2%). It is the region that concentrates the largest part of research (almost half of French public research expenditure) and that attracts research workers with its big universities and public research organisations, as well as R&D departments of large firms. It concentrates government services and headquarters of large companies. Population is dense, young and active, and life-long learning is at an exceptional level compared to the French average performance. However, high-tech manufacturing is lower than the national average: due to specific research and/or industrial concentrations in some areas, and to some extent to national and regional policies, high-tech manufacturing is more evenly distributed than research and high-level services. Local Science and Services : Provence-Alpes-Côte-d Azur, Languedoc- Roussillon and Midi-Pyrénées are not the Silicon Valleys of a French California, but there is a sun belt phenomenon (ratio R&D expenditure/gdp is respectively 2%, 2% and 3.7%). These regions are attracting each year thousands of migrants from Ile-de-France and Northern France regions 11, and population is younger than the average, but unemployment is high in PACA and Languedoc- Roussillon. Languedoc-Roussillon and Midi-Pyrénées are performing higher than the national average in all Public Knowledge indicators, with large universities, important departments of grands organismes de recherche, with some scientific strongholds (e.g.: agronomical sciences in Montpellier, robotics in Toulouse) and a high number of knowledge/s&t workers. Midi-Pyrénées is a specific case concerning Business R&D and unemployment: the reason is the presence of 10 Comparable data for the outermost regions (Objective 1) Guadeloupe, Guyane, Martinique, Réunion are not available. 11 The yearly INSEE census survey shows the three regions are the most attractive (in terms of growth of population), cf. INSEE Première, January France doc 6

12 EADS/Aérospatiale in Toulouse, the capital city of the region. PACA is as local services (urban services) as science -oriented, because of the importance of tourism in particular; however, it is the 3 rd French region for the number of research workers and the 4 th for R&D expenditure. A key challenge for these regions is that this has not resulted so far into a significant development of high-tech manufacturing for which all three regions are performing poorly: public R&D has not delivered sufficiently in terms of business. No strong cluster phenomenon (research driven or high-tech) has developed so far. Another challenge for Languedoc-Roussillon and Midi-Pyrénées is the very high concentration of research and services in the capital cities, Montpellier and Toulouse High Techno : Franche-Comté and Haute-Normandie are on the opposite highly performing in all Private Technology indicators (ratio R&D expenditure/gdp is 2.1% with a predominance of business R&D). These are regions which have succeeded in keeping and in some case strengthening leadingedge manufacturing activities, such as micro-technics and automotive industry in Franche-Comté, automotive and chemical industries in Haute-Normandie, and their population is younger than the national average. A key challenge is that they lack public R&D and are at a disadvantage concerning higher education, but they have recently started to catch up (in particular Haute-Normandie see exhibit 3). At the same time, they appear as rather poorly attractive to investors and to qualified people. Central Techno : All other French regions fall into this cluster. While the profile of Central Techno regions at global EU level is rather simple (they are close to the EU average) for all groups of indicators, the individual cases are rather diverse. With regard to the average EU Central Techno regions, the French Central Techno regions present the following major features: higher productivity, lower population density and younger population, higher role of the government sector, and more business R&D. Within this cluster, some specific cases can be highlighted, relying on both exhibits 2 and 3: - Rhône-Alpes is rather close to PACA concerning its performance in Public Knowledge indicators and to Midi-Pyrénées in relation to business R&D 12 (ratio R&D expenditure/gdp: 2.6%) 13. The regional economic fabric is very complex with an industrial, banking and services centre (Lyon), a public-private R&D stronghold in Grenoble (micro- and nano-technologies), a manufacturing hot spot in Haute-Savoie ( metal-cutting ), an old manufacturing place in Saint-Etienne, and large rural areas. This results in very diverse challenges. The qualification of the work force has significantly improved in the last past years. - Bretagne and Pays de Loire are among the French regions that have experimented a high growth in the percentage of high educated population and their major cities are also among the most attractive in France, while 12 Rhône-Alpes is ranking 2 nd in terms of research workers and R&D expenditure behind Ile de France (Régions et Technologies-clés, DIGITIP, 2004, p. 165). 13 Rhône-Alpes is together with Ile-de-France and Franche-Comté among the 22 first EU regions in terms of RTDI (it is ranking 21st and France-Comté 22nd ) see Trend Chart France doc 7

13 unemployment is under the national average. They have also benefited at the end of the 60 s of government-supported relocations of major industries (such as automotive industry and telecommunications in Bretagne). However, R&D intensity has only made limited progress. - Alsace is attractive, and it is characterized by a highly qualified population (and positive change in this field) and by industry and high-tech manufacturing. It has a high ranking for scientific and technological competences 14. In contrast, the other regions do not present very specific features, apart from Auvergne, a very peculiar case, highly performing in Private Technology indicators due to the presence of Michelin, one of the few region-based multinationals. Regions such as Poitou-Charentes, Champagne-Ardenne and Basse-Normandie, with a rural profile, are poor performers in Public Knowledge, in business R&D and life-long learning; Corsica (Objective 1) is part of this group. Others, such as Lorraine and Nord-Pas-de-Calais have an old industrial base, and have realised huge efforts of restructuring, but are still not performing very high in Public Knowledge and Business R&D. To sum up, French Central Techno regions can be divided into the following groups: Rhône-Alpes (completely atypical, close to Ile de France and Midi-Pyrénées performance) with Alsace (border region); Rural Central Techno; Industrial Central Techno (Lorraine and Nord Pas-de-Calais), and Western Central Techno (Bretagne and Pays de Loire). For what regards the French outermost areas (Guadeloupe, Guyane, Martinique and Réunion), statistics are not available for all the indicators. However, their innovation performance is rather weak and partly due to structural factors : remoteness, lack of critical mass accessibility costs, huge environmental issues, high dependence from the metropole. Depending highly on tourism industry and the government sector, the business sector is mainly composed of service-related SMEs and micro-enterprises, often family owned and not export and innovation oriented. They lack also of human resources in science and technology and of a critical mass in S&T fields 15. R&D centres are mainly regional offices from the so-called grands organismes de recherche (CIRAD, INRA, INSERM, etc.) which are providing an imported research, not linked with the local business sector. In addition, technology transfer activities are limited due to the lack of interface organisations such as technology platforms and technology networks. This quick panorama must be completed by two facts: since the 90 s, Western regions are catching up in terms of GDP per capita, private jobs are growing significantly faster in both Western and Southern regions, as clearly illustrated in exhibit 3. In other words, the dominant situation of Ile-de-France, the capital region, remains but lessened in relative terms. However, Southern and Western regions need to confirm 14 Régions et Technologies-clés, op.cit., p For instance, around two hundred researchers (including junior researchers) in Guadeloupe in cf. European Commission, DG REGIO, Study «Mieux connaître la place de la recherche et développement technologique dans les régions ultrapériphériques (RUP) de l Europe et mieux les intégrer dans l espace européen de la recherche Rapport Régional Guadeloupe», July France doc 8

14 the positive trends they are showing, turning R&D into business and more jobs for the first and reinforcing their RTDI base for the second focusing on a few sectors. Exhibit 2: Regional factor scores per region France -2,00-1,00 0,00 1,00 2,00 3,00 4,00 5,00 6,00 Île De France Champagne-Ardenne Picardie Haute-Normandie Centre Basse-Normandie Bourgogne Nord - Pas-De-Calais Lorraine Alsace Franche-Comté Pays de la Loire Bretagne Poitou-Charentes Aquitaine Midi-Pyrénées Limousin Rhône-Alpes Auvergne Languedoc-Roussillon Provence-Alpes-Côte d'azur Corse Public know ledge Urban services Private Technology Learning families Source: MERIT. The bars are stapled factor-scores showing the deviation (1=standard deviation) per factor from the average of 215 EU regions (0.00). The longer the bar, the bigger is deviation. Detailed regional scorecards can be found in Appendix B. 591 France doc 9

15 Map : French Regions - Objective 1 and 2 for (Source : DG REGIO) 591 France doc 10

16 Exhibit 3: Recent trends per region in key indicators Unemployment %-pnt ch % growth Agriculture share Per capita GDP Industry share Population density Tertiary education %-pnt ch. %-pnt ch. %-pnt ch. %-pnt ch. R&D intensity %-pnt ch. EU France -2,30 4,59-0,96-0,55 2, ,04 Île De France FR1-1,10 4,62-3,20-0,07 1,99 3,91 0,12 Champagne-Ardenne FR21-4,30 4,74-0,22-1,38-0,95 1,55 0,34 Picardie FR22-3,80 3,91-2,11-1,58 0,73 1,79 0,61 Haute-Normandie FR23-4,10 4,70 2,39-0,85 0,62 5,11 0,13 Centre FR24-4,00 4,22-0,56-1,30 1,45 0,07 0,26 Basse-Normandie FR25-5,20 4,15-0,11-1,61 1,37 3,61 0,32 Bourgogne FR26-3,50 4,57-1,32-1,40-0,20 2,00-0,01 Nord - Pas-De-Calais FR3-3,90 4,64-1,37-0,11 0,53 2,78 0,20 Lorraine FR41-1,20 3,88-0,67-0,56 0,00 0,78 0,33 Alsace FR42-0,50 3,88-2,10-0,34 3,89 4,11 0,42 Franche-Comté FR43-1,30 4,67-0,57-1,06 1,16 2,29 0,18 Pays de la Loire FR51-2,80 4,88 1,64-0,89 4,04 4,12 0,13 Bretagne FR52-2,70 4,91 0,41-0,66 3,71 4,07 0,33 Poitou-Charentes FR53-3,40 4,51 1,03-1,63 2,38 1,74 0,29 Aquitaine FR61-1,80 4,84 0,41-1,60 3,74-0,04 0,42 Midi-Pyrénées FR62-2,20 4,75 2,76-0,93 4,51 3,47 0,50 Limousin FR63-2,40 5,07-0,52-0,22-0,71 1,55 0,22 Rhône-Alpes FR71-0,20 4,49-0,80-0,27 4,00 4,04 0,60 Auvergne FR72-3,30 4,90 1,38-0,53 0,20 1,08 0,72 Languedoc-Roussillon FR81-4,80 4,82 0,32-0,48 6,72 0,86 0,61 Provence-Alpes-Côte d'azur FR82-4,90 4,72 0,74-0,05 4,60 0,27-0,39 Corse FR ,86-0,90-0,88 2,01 3,58 0,33 Source : MERIT based on Eurostat data for period indicated 2.3 Conclusions: innovation and knowledge performance French productivity is high and competitiveness has resisted. In terms of human resources, life-long learning is a general French weakness. The declining trend in public research expenditure of the 90 s is expected to be reversed in the 2000 s while business R&D expenditure is yet insufficient. Non-technical innovation is dramatically low compared to EU15 average. Innovation in SMEs is insufficient. The French industrial fabric is globally insufficiently specialised in the high-tech sectors and French attractiveness of foreign direct investment in R&D and high-tech activities is relatively weak. Aerospace and nuclear R&D are traditional strongholds, while life sciences and ICT are a strongly growing priority. There has been a progressive geographical redistribution of R&D activities, in particular public R&D, outside of Paris/Ile de France. However, RTDI activities remain concentrated in a few regions: Ile de France, Rhône-Alpes, Midi-Pyrénées, PACA and Languedoc-Roussillon. There is clearly today an RTDI Southern Belt (including Rhône-Alpes). In the other regions (except Alsace to some extent), public and private R&D as well as higher education (in particular in science & technology) are among the main weaknesses. 591 France doc 11

17 Exhibit 4: Summary of key disparities and needs per region Region / group of regions Science and service centre: Ile de France Local Science and services : Provence-Alpes- Côte-d Azur, Languedoc- Roussillon and Midi-Pyrénées High Techno: Franche-Comté and Haute- Normandie Central Techno (general, minus Rhône-Alpes and Alsace) Key factors explaining disparity of performance (weaknesses) high-tech manufacturing is lower than the national average high unemployment (and flow of migrants) R&D sector not backed by business sector (except in Midi Pyrénées); mismatch with business and entrepreneurship they lack public R&D and are at a disadvantage concerning higher education lack of high-tech services lack of R&D base/industry linkages lower population density, more government-sector oriented than the average EU Central Techno poor performers in Public Knowledge indicators, in Business R&D and life-long learning lack of R&D base/industry linkages Rhône-Alpes some manufacturing sectors are facing difficult challenges weakness in high-tech services Western Central Techno weaknesses in public R&D, business R&D, higher education, change in R&D intensity Key needs in terms of innovation and the knowledge economy strengthening the development of high-tech businesses addressing general French weaknesses such as life-long learning and patenting a significant development of hightech manufacturing R&D turning into business, through patenting and entrepreneurship clustering improvement of attractiveness clustering mixing research and industry favouring human concentration in terms of critical mass in R&D improving innovation governance at regional level for shaping regional innovation strategies preparing to some industrial restructuring concentrate on innovation-driven clusters (some have already started) reinforcing the higher education and R&D base with focus on a few sectors preparing to further downsizing of agricultural sector and jobs Industrial Central Techno: (e.g. Lorraine) weakness in human resources for innovation, and in public and business R&D lack of R&D base/industry linkages lack of business R&D strengthening human capital developing high-tech services 591 France doc 12

18 3 Innovation and knowledge: institutional context and policy mix at national and regional levels Structural Fund support for innovation and knowledge is contingent on and seeks to generate strengthen the existing national (and/or regional) innovation system 16 in each Member State. In particular, institutional, legal and financial factors in the innovation system can limit the potential for certain types of intervention. Moreover, within the framework of the EU s Lisbon objectives, Structural Fund interventions are expected to complement and provide added value to national (or regional) policy framework. In some Member States, Structural Fund interventions in favour of innovation and knowledge are marginal with respect to the national investment and policy effort, in others Structural Funds provide a main source of funding for such interventions. In both cases, there is a need to identify relevant national and EU policies which can have an impact on decisions on funding priorities. 3.1 Institutional and legal framework for innovation and the knowledge economy This section of the report appraises two broad factors that condition the potential for coordinated intervention of EU and national (regional) policies in favour of innovation and knowledge: The first concerns the organisational structures of public and semi-public bodies responsible for the design, implementation and monitoring of innovation and knowledge economy policies. In particular, the analysis considers the responsibilities for funding or managing specific types of measures liable to be considered for support under the Structural Funds; The second concerns the institutional, legal and financial frameworks, which condition the linkage of national (regional) financing with EU financing. The French innovation system is highly centralised, regions having however developed innovation-support policies in the last 20 years. At national policy-making level, the two main bodies are the Ministry of Research and the Ministry of Industry. The Ministry of Research has a Technology Directorate and a Research Directorate. The Ministry of Industry has a General Directorate for Enterprises (DGE), responsible for the definition of measures promoting industrial competitiveness and adaptation of the regulatory framework. Each Ministry has regional offices: DRRT (Regional Research and Technology Delegations) and DRIRE (Regional Division for Industry, Research and Environment). Coordination takes place in principle through the CIRST (Comité Interministériel pour la Recherche Scientifique et Technique), established in 1998 to define priorities 16 The network of organisations, individuals and institutions, located within or active within national or regional boundaries, that determine and shape the generation, diffusion and use of technology and other knowledge, which, in turn, explain the pattern, pace and rate of innovation and the economic success of innovation. 591 France doc 13

19 in the field of scientific policy. In addition, the Ministry of Research is assisted by a number of consultative bodies 17. The new Programming Law for Research (March 4 th, 2006)) creates a High-Level Council for Science and Technology (Haut Conseil de la Science et de la Technologie) in charge of developing foresight for guiding the government policy choices in the field of research, technology transfer and innovation. Under the supervision of these two Ministries, different bodies implement the RTDI policies, among them grands organismes de recherche (such as CNRS, INSERM, etc.), universities and Grandes Ecoles, sectoral agencies (e.g.: ADEME for environment and energy), non-profit institutions (Institut Pasteur, Institut Curie), Technological Resources Centres (CRT), Regional Technological and Innovation and Centres (CRITT), also supported by Regions. In addition, resulting from the new Programming Law for Research, new public and private (but non profit) organisations for research and scientific cooperation will be soon involved 18. Another major actor is the State-owned OSEO Holding, a grouping of 3 entities under the supervision of the Ministry of Industry and the Ministry of Research, of which OSEO-ANVAR is today the main public operator and co-ordinator of innovation support measures at regional level. Implementation of RTDI policies at regional level is mainly controlled by the national government through its representative at regional level, the Préfet de Région with its SGAR (Secrétariat Général pour les Affaires Régionales) 19 which coordinates regional funding, including Structural Funds. OSEO-ANVAR, with its 25 regional agencies, is a key player at regional level while being a national organisation. The role of elected regional authorities (President of the Region, and Conseil Régional is rather limited concerning policy-making in spite of decentralisation. They set out their objectives by negotiating them with the State through the Contrat de Plan Etat-Region (CPER), multi-annual contracts ( ). But their role is growing; the recent adoption of Schémas Régionaux de Développement Economique (SRDE) 20 stresses the innovation issue as a major concern of the Regional Councils. Anyway, RTDI policies have been globally poorly affected by the decentralisation process so far, in spite of efforts by the regions to become significant players, mainly in the field of innovation and technology transfer. 17 Conseil Supérieur de la Recherche et de la Technologie (CSRT), Conseil National de la Science (CNS), Comité Consultatif de Développement Technologique (CCDT). 18 Pôles de recherche et d enseignement supérieur (PRES Research and Higher Education Poles) ; Réseaux thématiques de recherche avancée (Thematic Networks for Advanced Research) ; Centres thématiques de recherche et de soins (Thematic Centres for Research and Care) 19 Together with DRRT and DRIRE. 20 Regional Economic Development Scheme, resulting from the Decentralisation Act, France doc 14

20 Organisational Chart of the innovation governance system 21 : Centralisation has probably prevented regional authorities from exploring EU programmes other than SF-funded ones. If national R&D organisations have strongly participated in Framework Programmes for Research and Development, the participation of SMEs is significantly lower partly due to insufficient support from regions; MAP 22 financial instruments (and EIF facilities) have been mainly used by national organisations (Caisse des Dépôts et Consignations, SOFARIS), and the Innovation 2010 Initiative of the EIB has been ignored in practice. 21 cf. France Report 2005, TrendChart 22 Multi-annual Programme for Enterprise and Entrepreneurship (extended to 2006). 591 France doc 15

21 Simplified structure of public financial support to RDI 23 : Ministry of Defense Ministry of Research Technical Ministries (environment, transport, etc.) Ministry of Industry Funding Ministries ANR ADEME OSEO AII Public Intermediarie RRIT Military Labs Public R&D EPIC HEI EPST Non Profit Institutions UMR Mix Research Units R&D in SMES Private R&D Research & innovation operators Concerning the funding framework system, all public R&D funding is within the national budget, under the heading of MIRES (Research and Higher Education Interdepartmental Mission) 24. A major change is now occurring with the creation of two agencies that will finance R&D on a project basis: the National Research Agency (ANR) and the Industrial Innovation Agency (AII) 25, besides the already existing Fonds de la Recherche Technologique. This should mean that France is departing from its usual model of funding R&D through annual appropriations to R&D organisations, but this revolution needs to be confirmed since the budget of both agencies remains limited in comparison to the total MIRES budget OSEO-ANVAR with the DGE manages the Fund for Enterprise Competitiveness (FCE) which provides aid to enterprises and bigger innovation and research projects carried out in partnership. 23 France Report 2005, TrendChart 24 Former BCRD («Budget civil de R&D»), including from 2006 research conducted by universities. It is expected to amount at M by The first projects to be funded were selected in April France doc 16

22 The grands organismes de recherche (CNRS, INRA, INSERM, ) 26 have spent 56% of the Public Civilian R&D Budget in 2002, and universities 33% (annual appropriations). The share of non-profit institutions is very low (3.69%) 27, and this is partly the result of legal conditions that are unfavourable to foundations. In 2000, the share of R&D public funding financed by the regional authorities was estimated at 1.4 % compared to 88.2 % provided by the State and 10.4 % by Community funding (Structural Funds). Exhibit 5: Main organisations per policy area Policy objectives Improving governance of innovation and knowledge policies Innovation friendly environment Knowledge transfer and technology diffusion to enterprises Innovation poles and clusters Support to creation and growth of innovative enterprises Boosting applied research and product development Type of organisation National (&/or regional) public authorities Key private or non-profit and agencies organisations Ministry of Industry (Technologies-clés) Association Nationale de High-Level Council for Science and la Recherche Technique Technology (ANRT): FutuRIS Agency for Research and Higher Education Evaluation28 Ministry of Finance, Ministry of Industry Ministry of Research, Ministry of Education OSEO OSEO-ANVAR Liaison offices of universities (SAIC), HEI and public research organisations Elected regional authorities (through CPER) Ministry of Research Ministry of Industry DIACT (former DATAR) Ministry of Research OSEO-ANVAR Elected regional authorities (through CPER) Universities Public research organisations ANR, AII, Fonds de la Recherche Technologique Caisse des Dépôts et Consignations (CDC) CRT CRITT (co-funded by Regions) A few ones such as Institut Pasteur, Institut Curie, ANRS Source: study team based on national/regional policy documents, Trend Chart reports, OECD reports, etc.. See appendix C for a detailed definition of the policy categories. While the RTDI institutional framework is mainly centralised under both Ministries of Research and Industry, there is at implementation level (national and regional) a piling-up of technology transfer centres, innovation support bodies, etc.; the growing competition from regional authorities with the State administration in the field of RTDI has led in particular to even more organisations. The transparency of the system is generally poor, include for what regards the distribution of Structural Funds. What is clearly lacking is an effective innovation governance system at regional level. 26 Centre National de la Recherche Scientifique, Institut National de la Recherche Agronomique, Institut National de la Santé et de la Recherche Médicale. 27 Ministère de la Recherche, Rapport d activité Panorama de la recherche en France. 28 These two last bodies have been created by the new Programming Law for Research, April 4 th. 591 France doc 17

23 Some institutional, legal and financial hurdles directly hamper the implementation of some measures, and indirectly the linkage of national financing with Community funding. For instance: legal disputes concerning the status of entrepreneurial researcher, tax status of SAIC ( Service d activités industrielles et commerciales des universities ), lack of autonomy of universities and lack of a workable legal status of foundations, etc. Regarding this latter point, the new law creates a new legal vehicle Fondation de coopération scientifique (Scientific Cooperation Foundation) for carrying out thematic scientific projects associating several higher education institutions and research organisations, eventually also entreprises; whith the capacity to be sponsored by the private sectors. 3.2 Policy mix assessment This section provides a summary overview and analysis of the national and regional policy mix in favour of innovation and knowledge in which the Structural Fund interventions take place. The analysis is conducted with respect to six broad categories of objectives of innovation and knowledge policies (see appendix C for an explanation of each category). Measures identified per category of the policy objectives are then further sub-divided in terms of the direct beneficiaries of funding (or legislative) action. To simplify, the report adopts three broad types of organisation as targets of policy intervention: Policies supporting academic and non-profit knowledge creating institutions; Policies supporting intermediary/bridging organisations involved in innovation support, technology transfer, innovation finance, etc.; Policies supporting directly innovation activities in private sector. The matrix below summarises the current policy mix at national level. A simplified coding system is used with intensity of support (financial or political priority) for different policy areas and targets indicated by a colour coding system. Exhibit 6: Policy mix for innovation and knowledge Policy objectives Improving governance of innovation and knowledge policies Innovation friendly environment Knowledge transfer and technology diffusion to enterprises Target of policy action Academic /non-profit Intermediaries/bridg knowledge ing organisations institutions Private enterprises Innovation poles and clusters Support to creation and growth of innovative enterprises Boosting applied research and product development Legend Top policy priority Secondary priority Low priority Source: calculations of study team based on national/regional policy documents, TrendChart reports, OECD reports, etc. 591 France doc 18

24 The fundamentals of the French RTDI policy mix until the 70 s can be characterised by a RTDI system piloted by the State in a heavily centralised way, through funding of large sectoral programmes in fields considered as of national strategic interest. Defence was often an important component of these large programmes 29. This has been challenged and destabilised during the 80s under the combined influence of growing globalisation, Community building, and the decentralisation process that has given the regions new competences. In the same decade, privatisation of State-owned companies paved the way for the death of the large sectoral research programmes. More recently, the EU Framework Programmes have had an influence in the shaping of French RTDI policies 30, in particular through supporting a networking approach and instruments: public R&D organisations and (even more) labs within organisations have engaged in a process of opening up to softer partnerships than the traditional formal agreements with foreign institutions and that has represented a significant change in both their culture and practice. The debate on the role of research and innovation in the French economy has recently become hotter with a deep crisis affecting public research institutions and public research governance and missions. This is reflected in a succession of laws and plans: the 1999 Innovation Law (known as Loi Allègre ), the 2003 Innovation Plan, and the new Programming Law for Research adopted on March 4 th, Globally, it can be said that France, within the context of globalisation, has and is yet encountering difficulties for departing from its State-centred and State-piloted model 31 relying on public research dominated by large research programmes ( grands programmes ), big research organisations ( grands organismes de recherche ) and defence and private research concentrated on a few number of scientific & technological areas and firms ( champions nationaux ). However, the focus is moving toward an innovation policy based on a project basis, public-private partnerships for R&D development projects and programmes, creation and development of innovative enterprises, and clustering (very limited so far) with a research and innovation component 32 through support to 67 Poles of Competitiveness. With regard to the Lisbon Strategy and Barcelona objective, it can be said that the recent changes surely go in the right direction. However, it is dubious that the 3% target of R&D expenditure can be reached in due time. In addition, the content of the French National Reform Programme remains rather vague and seems to pay lip service to the Growth and Jobs Strategy more than proposing concrete steps. The present policy mix combines the 1999 Innovation Law, the 2003 Innovation Plan, the 2004 programme Poles of Competitiveness, and the 2006 Programming Law for Research, which all introduce major shifts. In funding terms, the bulk of 29 As already stated, this system is generally qualified as Colbertiste see above, footnote See : Ph. Larédo, Six major challenges facing public intervention in higher education, science, technology and innovation, This model is generally qualified in France as Colbertiste, which refers to a Louis XIV s Minister, Colbert, who developed a strong industrial policy based on State-owned manufactures. 32 The first support to clustering has regarded Systèmes Productifs locaux at the end of the 1990s, but without any focus on RTDI. 591 France doc 19

25 money goes to R&D programmes and actions, but it will be more and more on a project basis and through fiscal measures (tax credits, tax breaks) 33. Priorities that have gone up and are going up on the agenda have been creating an innovation friendly environment, innovation poles and clusters, improving governance, support to creation and growth of innovative enterprises. Improving governance of innovation and knowledge policies. Governance has been improved with two foresight exercises Technologies-clés and FutuRIS (2004) which had the objective of preparing the reform of the research and innovation system 34. Measures adopted in the Programming Law for Research largely result from FutuRIS recommendations and are in line with the French National Reform Programme (NRP): better research evaluation (creation of a High-Level Council for Science & Technology and of a Research Evaluation Agency), better public-private partnerships ( concertation ) at local/regional level ( Poles of Competitiveness ), integration of the French research and innovation system in the ERA. Innovation friendly environment. Major objectives have been from 1999: improving the financial, legal and tax framework for innovation; improving the researchers perspective through mobility and better careers. The ICT issue is addressed separately in the Action Plan ICT-SME. The main measures range from new legal frameworks for researchers turning business persons, scientific foundations, young innovative companies, and seed capital funds and business angels, to increased tax credit and tax breaks and encouragement to mobility of researchers (including doctorants ) toward SMEs. It includes also the Chair of excellence (Chaires d excellence) programme, started in 2004, which aims at attracting foreign researchers or french abroad researchers 35. Such measures are not expensive, but they reflect a real shift in the policy mix. They are in line with the outcomes of the Open Method of Coordination (MAP Enterprise Policy). The NRP puts among its priorities the promotion of life-long learning. Knowledge transfer and technology diffusion to enterprises. This is an old policy area with a lot of measures taken from the 1980 s to bridge research and industry that have led to the creation of a lot of entities. Regions have so far played an important role in this field, in particular though co-funding of regional centres for technology transfer and technological platforms 36. The current objective has an incremental feature: improving the legal and tax framework and increased tax incentives. In addition, an important measure is the creation of SAIC 37, which aim at professionalising liaison offices of universities and public research organisations. Another measure is awarding financial bonuses to partners of a collaboration contract between a company and a public research organisation/university. 33 It is expected that by 2010, fundings from financing agency (e.g. ANR) on a project basis will amount to about 6.25% of the total MIRES budget, and tax credits and tax breaks to about 7%. See Annex to the Programming Law for Research 34 The Technologies-clés exercise is on a regional basis. 35 The 2006 call for proposals is providing grants for 10 junior and 5 senior Chairs of excellence (respectively, on 3 years and on 3 years) 36 There are today 132 CRITT and 77 Technological Platforms. However, it should be noted that in the French outermost regions, technology transfer activities are rather limited. For instance, Guadeloupe has no CRITT, technological platforms and RDT networks. 37 Services d activités industrielles et commerciales des universités. 591 France doc 20

26 Innovation poles and clusters. The 2004 programme Poles of Competitiveness has set this policy area as a top priority. The major objective is to create innovation-driven clusters associating public research and industry, giving effectiveness and visibility to sectoral/regional strongholds, and strengthening their attractiveness. Local and regional authorities are involved. Sixty-seven poles have been selected in 2005, distributed in 3 categories: world level, potentially world level, and national 38. Companies that are located in some specific areas linked to these poles benefit from tax breaks. RTD projects of poles stakeholders benefit from public money, in particular through ANR 39 and AII. Besides these poles, the Programming Law for Research offers new opportunities for scientific cooperation between research centres and higher education institutions, through the setting-up of Poles de Recherche et d Enseignement Supérieur (PRES). All this is a clear priority in the NRP and is in line with FP7 Capacities for what regards the regional dimension. Support to creation and growth of innovative enterprises. It has become a priority with the 1999 Innovation Law. The major objective is favouring academic spin-offs with a growing number of entrepreneurial researchers through support to academic incubators located in universities and public research organisations, and to seed capital funds, and a national competition for the creation of innovative enterprises. Local and regional authorities have supported the incubators. Within the NRP, the priority is presented in a more general way. Boosting applied research and product development. The instruments for this policy area have been renewed with the objective of going more and more toward funding on a project basis. Another key objective, resulting from the 2004 Beffa Report, is going back to the French tradition of large sectoral programmes, as illustrated by the most publicised Quaero project. The main measures are the recent creation of AII, but also in a lesser extent ANR which finances projects of recherche cognitive et recherche finalisée ( cognitive or basic and applied research) associating enterprises, both public and business partners; however, their funding capacity remains modest in comparison with the total funding of public research. The NRP has confirmed these orientations; it points in addition on the importance of ensuring a high level of French participation in FP7 programmes. 3.3 Conclusions: the national innovation system and policy mix The French innovation system remains heavily centralised in particular due to the strong role played by delegates of national administration at regional level. Elected regional authorities have however had some success in acting by themselves in the field of technology transfer and support to innovation. The expected increase in public research expenditure on a project basis and its concentration (if confirmed) on innovation-driven clusters should address some of the needs identified in section 2. The measures taken for supporting an innovation friendly environment and the creation and growth of innovative enterprises are highly 38 Only one pole has been selected in the outermost regions (Réunion). However, the call for proposals being now permanent, poles of competitiveness from other remote regions are expected in the coming months. 39 In 2005, ANR dedicated 205 MEUR to research projects emerging from poles, 38% of the total amount of its budget dedicated to call for projects. Cf France doc 21

27 relevant; however, most of them have so far been too concentrated on academic spinoffs and seed capital, to address the weaknesses in terms of high-tech manufacturing (needs and weaknesses in patenting and equity finance are not strongly addressed). The recent shift signals that more attention is paid to business-driven innovations and that the so far overwhelmingly supply-oriented approach is on a decreasing path. However, the current policy mix probably lacks stronger support to networking (public research industry) and entrepreneurship, but the Poles of Competitiveness, and to a lesser extent the Pôles de recherche et d enseignement supérieur (PRES), should provide an opportunity for developing a new culture and new practices. There is a general weakness in the policy mix in relationship to life-long learning and innovation governance at regional level. In addition, recent reforms have added new organisations and consultative bodies without deleting existing ones, which results in a rather confusing institutional piling-up. Exhibit 7: Funds Policy objectives Improving governance of innovation and knowledge policies Innovation friendly environment Knowledge transfer and technology diffusion to enterprises Innovation poles and clusters Support to creation and growth of innovative enterprises Boosting applied research and product development Key opportunities and constraints for investment by the Structural Opportunities for Community funding (national priorities) Favour regional innovation strategies, foresight exercises, improvement of regional innovation governance (innovation governance is a national priority at national, but not at regional level) Favour linkage with FP7 (Capacities/Regions) Human resources: mobility of researchers toward industry, and toward scientific concentrations in poles; life-long learning Favour linkage to FP7 (People) Public-private partnerships and networking Specific actions related to Poles of Competitiveness Larger use of European Investment Bank Development of high-tech manufacturing Development of high-tech services Mobility of researchers Equity finance (including for transfer of businesses) favour linkage to the Competitiveness and Innovation Programme Development of high-tech manufacturing (not only academic spin-offs) Equity finance (including for transfer of businesses) favour linkage to CIP Favour funding on a project basis Favour linkage to FP7 (Cooperation, People, Capacities/SMEs) Larger use of European Investment Bank Constraints or bottlenecks (factors limiting Community funding) Centralisation results in weak regional innovation system Lack of autonomy of universities Bureaucratic hurdles regarding academics/researchers careers Administrative and tax hurdles regarding SAIC Lack of equity culture Governance system of Poles of Competitiveness not clarified Different categories of Poles of Competitiveness: have to be addressed differently according categories/profile? Lack of equity culture Weak entrepreneurship culture among students, academics and researchers Risk: coming back to government-piloted large sectoral programmes 591 France doc 22

28 4. Structural Funds interventions to boost innovation and create a knowledge economy: This section of the reports provides an analysis the patterns of Structural Fund expenditures in the fields of innovation and knowledge-based economy during the current programming period ( for EU-15 or for the new Member States). It examines the patterns from both a strategic point of view (the policy mix pursued by the Structural Funds programmes) and at an operational level (consumption of funds, management of innovation measures, indications of relative effectiveness of measures, case studies of good practice). 4.1 Strategic framework for Structural Fund support to innovation and knowledge Strategic approach to innovation & knowledge in Structural Fund programmes SPDs Objective 1 absorb 17.75% of SF allocations in France, and concern the 4 outermost regions, Corsica and part of Region Nord-Pas de Calais. The 22 mainland regions have Objective 2 areas, including Nord-Pas de Calais, which cumulates both. Objective 2 cover large areas with a total of 28 million people, and thus benefiting to more than 40% of the French population. The key words characterizing SF-funded RTDI interventions in the French SPDs are valorisation (of research) and competitiveness. From the mid-80 s, efforts were made through CPER, and from 1989 onwards with SF contributions, for consolidating and structuring regional RTDI bases, in particular to the benefit of specific RTDI fields relevant to each region. An identikit of French Objective 2 SPDs can be presented as follows: All SPDs include a balanced nucleus of RTDI-related measures supporting : - RTDI infrastructures including higher education institutions (mainly universities), research centres (equipments for laboratories), and interface organisations, i.e. technology transfer organisations (support to CRITT, technological platforms, technology centres, etc.) - Technology transfer and innovation networks (so-called Networks of technology diffusion ) and collaborative projects in the field of innovation, research and technology transfer for valorising research combining universities, interface bodies and enterprises; with additional measures favouring the diffusion of scientific culture - Innovation within firms, which consists in a very broad measure managed, in almost all SPDs, by regional offices of OSEO-ANVAR 40 and supporting both innovation projects within firms and recruitment of human resources for innovation. This measure reflects the central position of OSEO-ANVAR in the regional innovation system and a more demand-oriented approach to innovation 40 Through the global grant procedure; see point 4.2 on the governance aspects of the SF interventions. 591 France doc 23

29 In Objective 1 regions, the picture is quiet similar but with a greater focus on the strengthening of the higher education infrastructures (university and academic pole) through equipments and facilities support, the diffusion of a scientific and innovation culture, and ICT infrastructures and diffusion among businesses. The financial weight of SF-funded RTDI interventions during the period amounts to 2.48 % of the Cohesion Policy in Objective 1 regions and to 7.26% in Objective 2. ERDF is by far the main contributor. If we add SF-funded support to SMEs to SF-funded interventions, it is the lowest in EU Objective 2 areas and one of the lowest in Objective 1 (only Greece is behind). The calculations presented in the two exhibits below are based on the allocation of Structural Funds budgets based on the intervention code classification. For practical purposes, the calculation of financial resources allocated to innovation and knowledge has been limited to the RTDI codes: 181 Research projects based in universities and research institutes 182 Innovation and technology transfers, establishment of networks and partnerships between businesses and/or research institutes 183 RTDI Infrastructure 184 Training for researchers Additional calculations based on broader definitions of innovation are presented in Appendix D. Exhibit 8: Overall allocation of resources at an objective 1 and 2 level (planned figures in Euro) Objectives Total cost Structural funds National funds Total ERDF ESF Public Private RTDI INTERVENTIONS Objective , , , , ,02 Objective , , , , , ,17 TOTAL COHESION POLICY Objective , , , , , ,00 Objective , , , , , ,00 Source: programming documents and financial data provided by DG REGIO Exhibit 9: Regional allocation of resources (Euro) Programs RTDI INTERVENTIONS TOTAL Total SF ERDF ESF Total SF ERDF ESF Obj. 1 Corse , , , , ,00 obj. 1 Guadeloupe , , , , ,00 obj. 1 Guyane , , , , ,00 obj. 1 Martinique , , , , ,00 Obj. 1 Nord-Pas-de-Calais , , , , ,00 obj. 1 Réunion , , , , ,00 Obj. 1 - Total Regional Ops , ,51 0, , , ,00 Programme National Informatique PRESAGE , ,00 - Programme national d'assistance technique , , France doc 24

30 Obj. 2 - Total MultiRegional Ops 0,00 0,00 0, , ,00 0,00 obj. 2 Alsace , , , , ,00 obj. 2 Aquitaine , , , , ,00 obj. 2 Auvergne , , , , ,00 obj. 2 Basse-Normandie , , , , ,00 obj. 2 Bourgogne , , , , ,00 obj. 2 Bretagne , , , , ,00 obj. 2 Centre , , , , , ,00 obj. 2 Champagne-Ardenne , , , , , ,00 obj. 2 Franche-comté , , , , ,00 obj. 2 Haute-Normandie , , , , , ,00 obj. 2 Ile-de-France , , , , ,00 obj. 2 Languedoc-Roussillon , , , , ,00 obj. 2 Limousin , , , , , ,00 obj. 2 Lorraine , , , , ,00 obj. 2 Midi-Pyrénées , , , , , ,00 obj. 2 Nord-Pas-de-Calais , , , , ,00 obj. 2 Pays-de-la-Loire , , , , ,00 obj. 2 Picardie , , , , ,00 obj. 2 Poitou-Charentes , , , , , ,00 obj. 2 Provence-Alpes-Côte d'azur , , , , ,00 obj. 2 Rhône-Alpes , , , , ,00 Obj. 2 - Total MultiRegional Ops , , , , , ,00 Programme National Informatique -PRESAGE , ,00 - Programme national d'assistance technique , ,00 - Obj. 2 - Total MultiRegional Ops 0,00 0,00 0, , ,00 0,00 Source: programming documents and financial data provided by DG REGIO A short approach to regional strategies concerning SF-funded RTDI interventions: Objective 1 programmes: The amount of Structural Funds dedicated to RTDI interventions is very low in Objective 1 regions. Corsica, Guadeloupe, Guyane and Martinique are below 1.2% of RTDI interventions in the total SF, with Martinique scoring the lowest. Nord-Pas-de- Calais and Réunion are respectively at 5.34% and 3.83% (in terms of financial amount, Réunion dedicates much more to RTDI than the other regions). Objective 1 regions, except Nord-Pas-de-Calais, which is a former industrial area, suffers from territorial constrains - islands (Martinique, Réunion, Guadeloupe, Corse) ; large area (Guyane with a large sparsely populated hinterland amazonian forest and a coastal area) and remoteness from the métropole ; accessibility and transport issues, environment management issues (energy, water, waste) - which impact on the level of financing dedicated to RTDI interventions. ERDF is overwhelmingly co-financing RTDI interventions, much more than at the global level of Cohesion policy. The ESF financing is not oriented to innovation. As already stated, more focused on higher education infrastructures, ICT diffusion and infrastructures and the diffusion of a scientific culture ; RTDI related interventions failed in some regions, such as Guadeloupe or Martinique to address the need for technology transfer organisations and for building linkages between national R&D centres regional offices and the small business base. 591 France doc 25

31 Objective 2 : Two regions that dedicate more than 15% of SF to RTDI interventions are very different in terms of demographic trends and economic fabric and in their strategy regarding the use of SF. Languedoc-Roussillon ( Local Science & Services ) is strengthening its strengths; it ranks first in the percentage of SF dedicated to RTDI interventions (slightly more than 20%) 41 which corresponds to strengthening its profile on the business side, as it is a well known region for its public R&D potential, concentrating a critical mass of research in several technological fields and dominated by public research; the LR ratio R&D expenditure/gdp amounts to 2% 42. Nord-Pasde-Calais ( Central Techno ) is compensating its weaknesses; NPdC is a region of old industries, with a dynamic metropolis, neither strong in the Public Knowledge 43 indicators nor in the Private Technology ones; the NPdC ratio R&D expenditure/gdp amounts to 0,7%. Three regions are dedicating between 10% and 15% of SF to RTDI interventions: two of which are without any large city Basse-Normandie and Poitou-Charentes ( Central Techno ) and the other is much urbanised, PACA ( Local Science & Services ). The two first ones have a strategy similar to Nord-Pasde-Calais: compensating weaknesses in Public Knowledge through directing a rather significant part of SF to RTDI interventions. PACA has a very famous S&T pole with Sophia-Antipolis, and two other poles with Méditerranée-Technologies and Toulon-Var-Technologies, together with large universities; SF have been used to strengthen some already existing strengths (the PACA ratio R&D expenditure/gdp is close to 2%). More than half of the French regions are dedicating between 4% and 10% of SF to RTDI interventions (median around 4-5%). A majority is Central Techno and there are also the two High Techno regions and Midi-Pyrénées ( Local Science & Services ). Midi-Pyrénées has not privileged RTDI interventions for strengthening its strengths in Public Knowledge (the ratio R&D expenditure/gdp is the highest in France with 3.7%) due to the political choice of compensating the overwhelming position of its capital city in the region by re-distributing to départements outside Toulouse; moreover, within SF-funded RTDI interventions, a lot of measures are also aimed at re-distributing to the overall regional territory. Four very different regions are dedicating less than 4% of SF to RTDI interventions. Ile-de-France already holds a very favourable position in terms of RTDI (ratio R&D expenditure/gdp: 3.2%) and has directed SF towards very specific areas of its territory. Centre and Bourgogne ( Central Techno ) are not highly urbanised; compared to the French average, they are weak in Public Knowledge indicators, but they have not given priority to RTDI interventions in using SF. The case of Lorraine appears as rather specific: the region has some strengths in Public R&D (but the ratio R&D expenditure/gdp is below the French average with 1.1%) 41 Concentrated in a single sub-measure embedded in the first axis favouring the enterprises competitiveness and creation 42 Ministère de l Education Nationale de la Recherche et de la Technologie, Direction de l Evaluation et de la Prospective, 2003, Données See France doc 26

32 and in high-tech manufacturing; it has faced industrial restructuring challenges (steel, textile, wood) and has set up innovation-policy instruments, but it has at the same time the lowest percentage of SF dedicated to RTDI interventions (0.57%). SF-funded RTDI interventions go to SMEs distributed in the overall region. The above-mentioned strategies have to be put in perspective with the weight of SFfunded RTDI interventions in total regional R&D expenditure, through a comparison between SF-funded RTDI interventions and regional R&D expenditure for 2003 (DIRD). Globally, this weight is very low. However, one region has relied very significantly on SF (17,4%): Nord-Pas-de-Calais (Objectives 1 and 2); it is followed by Poitou-Charentes and Basse-Normandie (around 10%). Languedoc-Roussillon and Limousin, with quite opposite profiles, come behind (6-7%). The weight of SFfunded interventions is very low in all other regions and extremely low in Ile-de- France and Rhône-Alpes, and in Lorraine, Centre, Bourgogne and Alsace (for details see Table in Appendix D.1). However, RTDI are the third ranking priority in SPD (85.5 /inht; 9.2% of total SPD funding) and the second-ranking in CPER (89.9 /inht.; 12.9% of total CPER funding) 44. EU co-funding amounts to 32% of this priority in CPER. Through CPER, SF-funded RTDI interventions have in some regions a rather strong leverage effect on the regional innovation system. France had no RIS/RITTS during the current SF programming period 45 (State administration at regional level was in general hostile to these programmes). A majority of French regions benefits from Regional Programmes of Innovative Actions, amounting to MEUR of EU funding, dedicated mainly to eeuroperegio, then to Regional economies based on knowledge and technological innovation Specific measures in favour of innovation and knowledge The following table is based on data given in Appendix D.2, exhibit 17, and on analysis of the SPDs. It aims to assess the weight of each category of policy areas in SF-funded RTDI interventions through grouping the SPD measures. 44 Etude sur les objectifs compares des DOCUP et des CPER période Tome 1 Rapport National, Novembre 2002, DATAR/Segesa 45 It had only a very few ones in the 1990 s. 591 France doc 27

33 Exhibit 10: Key innovation & knowledge measures Policy area Improving governance of innovation and knowledge policies Innovation friendly environment Knowledge transfer and technology diffusion to enterprises Innovation poles and clusters Support to creation and growth of innovative enterprises Boosting applied research and product development Number of identified measures (all programmes) Approximate share of total funding for innovation & knowledge measures ,04% 20 13,14 % 40 39,36% 7 5,40% Types of measures funded (possibly indicating importance) Interregional cooperation in the field of RTDI Education and training for researchers mainly (CORTECH or doctoral grants by example) Investment in technology transfer organisations and support to technology networks (e.g. CRITT, Network for technology diffusion RDT) Aid scheme supporting innovation within firms (ANVAR s scheme) Support provided for structuring and strengthening research and scientific poles in specific technological areas 47 Support to academic incubators 9 2,30% 48 resulting from the Allègre Act in 1999, through investment in facilities and training or tutorship scheme 18 36,86% Investment in university laboratories (equipments, facilities, infrastructures) for strengthening the regional research base in relevant sector In a lesser extent, support to collaborative applied research projects between research centres and enterprises Nb: this table is a summary of the exhibit 17 in appendix D. The total of the percentage share per policy area may sum to more than 100 since certain measures fall into several categories. A key feature of the SF-funded RTDI interventions is the strong focus of the French SPD on Knowledge transfer and technology diffusion to enterprises combined with supportive measures aimed at boosting applied research and product development; this reflects the former national innovation strategy bias toward technology transfer and support to the research base, with a supply-oriented approach. Within the Boosting applied research policy area, SF-funded RTDI interventions are more focused on strengthening the basic research infrastructure than on collaborative research projects. 46 Programming Complement Objective 2 Midi-Pyrénées, measure Then, the support is less oriented toward clusters and innovation poles. However, the SPDs provide also support for the so-called french Système productifs locaux (industrial districts) which are not particulary innovation-oriented. 48 Few measures target specifically the support to innovative firms. In general, such support is included in a broader measure linked to technology transfer (e.g. measure 2.2. in SPD Objective Aquitaine). Then it is difficult to quantify the amount of EU funds dedicated to these topic. 591 France doc 28

34 The rationale is however different with regard to the type of regions. For the Central Techno regions, it is achieving a critical mass of R&D in specific sectors relevant to the regions by investing in facilities. In the Local Science and Services regions, the strategy is more focused on building bridges between a strong public research basis and the business environment. For High Techno regions, priority is given to strengthening the innovation capacities of the traditional sector by investing in technology centres diffusing innovation among the manufacturing sector. In addition, for Objective 1 regions, the catching-up logic is the main driver for RTDI interventions, except in the French Guyane which hosts large R&D centres (Kourou), but which are not backed by a business sector. The relative importance of Innovation friendly environment (13%) is in keeping with the new national policy mix which is gaining ground since RTDI interventions mainly support the development of human capital through funding of doctoral grants both in universities and in enterprises (see CORTECH schemes) and training researchers in entrepreneurship. However, if almost all SPDs have measures dedicated to financial engineering and ICT diffusion and infrastructures, they are not captured by the European RTDI codes Financial engineering is captured by codes 155 and 165 (see Appendix D1.1) and has not amounted to significant levels of funding; funding has only been used to a very small extent for supporting seed-capital funds created from Loi Allègre and has been more used for supporting quasi-public regional funds and guarantee mechanisms (debt); the Caisse des Dépôts et Consignations, a State-owned financial institutions plays a major role in such funds; as already said, MAP financial instruments have not really been used at regional level. In Objective 1 regions, financial engineering related measures have not been innovation oriented but are focused mainly on supporting access to finance for SMEs and micro-enterprises in traditional sectors. While Innovation poles and clusters do not make the object of dedicated measures, they are a central concern of the SPDs which integrate the cluster dimension by supporting either research poles (university poles) or industrial filières in specific sectors relevant to the area and its strengths (the so-called Systèmes productifs locaux ). Support to research-driven or innovation-driven clusters has not been a priority, except in a few regions, such as Guyane which has developed a strategy based on natural resources and biodiversity combining research, environment, tourism and industry 49. Support to innovative firms and new technology-based firms is rarely a major priority, except in Ile-de-France, in the Local Science and Services regions (Midi- Pyrénées, Languedoc-Roussillon and PACA) with a large public research basis and a low level of high-tech manufacturing, and in a few Central Techno regions (Pays de Loire, Bretagne). Support is provided through funding of incubators ( academic regional incubators ) and soft support (such as networking services) 50. Access to finance for innovative firms is not a priority. The SPDs did not take the opportunity to use SFs for co-financing the development of regional seed-capital funds which was one of the two main objectives of the 1999 Innovation Law (the only exception is PACA SPD). 49 However, the SPD Guyane Mid Term Evaluation Report is rather circumspect on the real synergies between the range of measures dedicated to the development of a biodiversity pole. 50 The French word is animation. 591 France doc 29

35 One sub-measure only is marginally dedicated to the regional governance of innovation through the support to inter-regional networks and collective actions for structuring and coordinating the regional economic system in the area of the Great South-West (Midi-Pyrénées, Aquitaine, and border regions). The new interest for innovation governance at national level since the beginning of the 2000 s has not been translated into SPD measures at regional level. SF-funded RTDI interventions only take marginally into account the recent shift in RTDI policies and stick mainly to the previous framework. 4.2 Learning from experience: the Structural Funds and innovation since Management and coordination of innovation & knowledge measures This section reviews the overall management of Structural Fund interventions in favour of innovation and knowledge during the current period. It examines the coherence and the role of key organisations or partnerships in implementing Structural Funds measures for innovation and knowledge, the linkages between Structural Fund interventions and other Community policies (e.g. the RTD Framework Programme) and the financial absorption and additionality of the funds allocated to innovation and knowledge. At the beginning of the 90 s, the central government made the choice of the so-called déconcentration of the management of the SF by delegating it to the Préfectures of the Regions. Each SPD involves a managing authority, a payment authority, a programming committee and a monitoring committee; these bodies are chaired by the representative of the State, the Préfet, assisted by the SGAR and DRIRE/DRRT. It can be said that, on the whole, management by the Préfets and their services has been more administrative than strategic; even if it is true that SFfunded RTDI funded interventions amount only to a small fraction of regional DIRD, there have been few efforts for trying to build up a regional vision concerning innovation together with elected regional authorities. Due to some difficulties in the managing system (causing a low level of credit consumption), the French government simplified the system in 2002 by enlarging the conditions for regional and local authorities to use the global grants procedure and by experimenting the transfer of the SF management to a region. For global grants the experience is implemented in Aquitaine through the Regional Innovation Agency, which directly manages the measures dedicated to technology transfer (measure 2.2. and 2.3.) and a measure dedicated to training for innovation development (measure 2.5.); in Auvergne, for example the Regional Council is benefiting from a global grant corresponding to around 80% of the total amount of the SPD. Alsace on the other hand has been selected to experiment the complete management of SF. The Alsace experimentation is generally considered as positive, but it has raised some difficulties since Region Alsace has decided not to entrust the management of the funds to the Trésor Public (a branch of the Ministry of Finance), but to entrust it to 591 France doc 30

36 Caisse des Dépôts et Consignations (a State-owned finance organisation), so breaching the established rules of public finance. For the programming period , the French government has decided not to extend the experimentation to other regions and to stop the large global grant to Auvergne. But, the one-stop-shop approach ( guichet unique ) does not yet exist for a project leader, and the visibility and transparency of the system is not clear for researchers as well as for entrepreneurs wanting to apply. Summary of the governance background in the OP including relevant RTDI interventions Main bodies responsible for innovation measures Préfectures and SGAR Regional Directorate for Industry, Research and Environment - DRIRE Regional Directorate for Labour, Employment and Professional Training - DRTEFP Regional Directorate for Research and Technology - DRRT OSEO-ANVAR Main relevant missions and targets Coordination of SF implementation at regional level Aids to enterprises and measures in favour of innovation friendly environment Managing measures related to training, lifelong learning and modernisation of training and education infrastructures Managing measures with the DRIRE on technology transfer, academic incubators, higher education institutions and technology poles. Managing support schemes to innovation within enterprises (aid to innovation in enterprises) in almost all SPDs. OSEO-ANVAR benefits from a global grant and manages it in a highly autonomous way Private actors, universities, research centres, technology transfer organisations and technology centres have not been associated to the programme management and monitoring. This is a challenging issue for the next programming period currently discussed. The awareness of this specific bottleneck is shared by different categories of actors including high level officials in the central administration. New ideas, more bottom-up oriented, are coming out through a working group on innovation, under the DIACT umbrella, concerning in particular a larger involvement of regional organisations supporting innovation, with the objective of a better targeting of potential beneficiaries. Regional governance is a hot issue due to the reluctance of Préfets/SGAR to change (lack of trust in regions capacities 51 ). Large research institutes or research concentrations (e.g.: Agropolis in Montpellier, or MINATEC in Grenoble) have been recently consulted through roundtables presenting the future Structural Funds priorities, and the future FP 7, with SGAR, DRIRE, and DRRT. At national level, there is a new consciousness of the necessary coordination between SF, FP7, future CIP and EIB interventions: DIACT organised in March 2005 a seminar for SGAR/European Affairs on this topic. This is all the more important that,: a) if French participation to FP6 has been globally in line with the S&T as well as 51 As highlighted by the decision of the French Governement to keep the control on the SF s management during the next programming period (See, CIACT, March 6 th, 2006). This decision is also due to political considerations. 591 France doc 31

37 economic weight of the country, it has been very weak in the specific domain of SMEs activities ; b) the knowledge of MAP financial instruments has proved poor, except among a limited number of private early stage funds and State-controlled financial organisations (Caisse des Dépôts et Consignations, SOFARIS). In addition, some regions (e.g. Midi-Pyrénée) are exploring the potential synergies between the EU programmes in order to find alternative ways of funding for the Poles of Competitiveness. In general, and with some differences between the regions, the absorption capacity of innovation and knowledge measures is rather modest and lower in the Objective 1 programmes than in the Objective 2. In particular, the 7.5% expenditure capacity in objective 1 areas (Code 183 RTDI Infrastructures) has been discussed during some interviews. When bottlenecks have existed, they came from delays in the starting phase of the programme and from a lack of project engineering capacities (or a lack of staff) which hampered the detection of projects in the field of innovation due to the complexity of the projects and the number of actors involved. In addition, in the field of human resources for innovation and research, Objective 3 is competing with Objective 2, due to the absence of zoning and to its simplicity 52, at least according to some interviewees. Finally, for many experts interviewed, the Objective 2 zoning, especially for what regards regions with a strong research base (Rhône-Alpes, PACA, Midi-Pyrenées, etc.) has implied that areas with the major RTDI potential and capacities were excluded from the SF co-financing. Even if the synthesis of the final evaluations of the SPD drafted by the DIACT does not mention figures in terms of financial programming and consumption at the end of the programming period, the comments of the effects on innovation in regions are very relevant for the current study. For instance, regarding the risk of decommitment and the rule N+2 ( dégagement d office ), the synthesis report mentions the adaptation which has been done by the regions to integrate the rule. The beginning of the period has been very difficult with high risks of decommitment because of a lack of awareness of the rule and of its conditions of implementation. One year after, there was a rush to programming to catch up with the slowness of the starting period. The final evaluation synthesis notes that for the next programming period, the N+2 rule has to be anticipated by the programme managers at the very beginning of the programme by raising awareness and mobilising the stakeholders. The synthesis points also the need for building a real multi-annual management of the programming period and for making more flexible the rules for multi-millions projects, but which are not large project rules for. Exhibit 11: absorption capacity of innovation & knowledge measures OBJECTIVES ALLOCATED DISBURSED TOTAL SF EXPENDITURE CAPACITY Objective , ,86 37,2% Objective , ,74 50,8% Source: ISMERI. 52 Mid Term Evaluation Report of the SPD Objective 2 PACA, November 2003, Tome II, page Premier rapport de synthèse des résultats de l évaluation finale des DOCUP , Décembre 2005, DIACT (DATAR). 591 France doc 32

38 Exhibit 11a : Absorption capacity of innovation and knowledge and measures by «pure» RTDI codes (18). CODES ALLOCATED DISBURSED OBJECTIVE Research, technological development and innovation (RTDI) - detailed information unavailable Research projects based in universities and research institutes Innovation and technology transfers, establishment of networks and partnerships between businesses and/or research institutes EXPENDITURE CAPACITY , ,71 39,9% , ,32 63,8% , ,41 40,2% RTDI infrastructure , ,00 7,5% Training for researchers , ,42 31,6% TOTAL OBJ , ,86 37,2% OBJECTIVE Research, technological development and innovation (RTDI) - detailed information unavailable , ,61 56,1% Research projects based in universities and research institutes Innovation and technology transfers, establishment of networks and partnerships between businesses and/or research institutes , ,32 41,2% , ,76 52,3% RTDI infrastructure , ,01 47,0% Training for researchers , ,05 44,7% TOTAL OBJ , ,74 50,8% Effects and added value of Structural Fund support for innovation and knowledge This section of the report analyses the effects and added value of the Structural Fund interventions in favour of innovation and knowledge during the current programming period. The analysis is based on two main sources, namely: available evaluation reports or studies concerning Structural Fund interventions; b) interviews and additional research carried out for this study. Accordingly, this section does not pretend to provide an exhaustive overview of the effects or added value 54 of Structural Fund interventions but rather is based on the examination of a limited number of cases of good practice. These good practice cases may concern the influence of the Structural Funds on innovation and knowledge economy policies (introduction of new approaches, influence on policy development, etc.), integration of Structural Funds with national policy priorities, promoting innovative approaches to delivery (partnerships), or measures which have had a particularly important impact in terms of boosting innovation potential, jobs and growth. 54 A good definition is The economic and non-economic benefit derived from conducting interventions at the Community level rather than at the regional and/or national level. See Evaluation of the Added Value and Costs of the European Structural Funds in the UK. December (Available at : France doc 33

39 The effects and results of SF-funded RTDI interventions on innovation and knowledge economy performance depend partly on the selection of the key measures by the targeted benefiting groups. In regions where the main target beneficiaries of technology transfer related measures are enterprises (e.g. Languedoc-Roussillon, PACA), the projects leading to a real technology transfer from research to business are not so frequent. However, these SPD also allow for financing incremental innovation within firms and is well adapted to sensitise traditional industrial sectors to innovation. Among the results, which are highlighted 55 by the evaluators are the increase of the firms annual turnover, R&D expenditure, management re-organisations and development of new markets. Other regions (e.g. Midi-Pyrénées) adopted a different strategy by targeting mainly research organisations (through funding research projects, public/private partnership on a project basis) expected to lead to technological jumps, or interface organisations (CRITT, Réseaux de Développement Technologique, Technological Platforms) in order to consolidate and professionalise them. This second strategy, predominant in the Central Techno regions (e.g. Limousin, Pays de Loire), is considered as a pre-requisite for building a network of organisations able to favour the diffusion of innovation within firms. In High-Techno Regions, such as Franche- Comté, the innovation-related SFs interventions have also been used for supporting the diversification of the regional economic fabric towards innovation-oriented services, by example trough the creation of the Multimedia Development Centre in Montbéliard (see Appendix E, case study n 5). More generally, the technology transfer related measures are considered by the evaluators as having created a context favouring large economic projects with leverage effects ( projets économiques structurants, such the project of the micronano-electronic pole in Toulon) 56, an innovative approach in the field of environment, the development of ICT (infrastructures and use) and the economic development of firms 57. On the opposite, for what regards support to financial engineering which is not per se innovation oriented, there has been very limited programming and initial planning of measures, because of the lack of intermediary services and well-trained human resources in charge of the operational implementation. The same is applying for what regards the support to innovative firms which has been rather limited and provided on a traditional way (support to incubator and networks). 55 Premier rapport de synthèse des résultats de l évaluation finale des DOCUP 2006, Décembre 2005, DIACT (DATAR) and Evaluation Reports 56 See appendix E, case study n 1) 57 Ibidem. 591 France doc 34

40 In this respect, the SPD Objective 2 Pays de la Loire adopted an innovative approach targeting very specific objectives, e.g. radical innovation among businesses, creation of new technology based firms, IPR protection. The support provided for the Genomic Institute Nantes Atlantique (see Appendix E, case study n 3), a private company, through the funding of equipments for the development of research activities and genotyping services, is an interesting case by demonstrating that the support to innovative firms through SFs needs strong established interactions between the research base and businesses and needs to be backed by interface organisations (in this particular case, Nantes Atlanpoles, a science and technology park and, since 2004, the governance structure of the pole of competitiveness on Biotech-Health). The effects of SF-funded RTDI interventions on innovation and knowledge economy have also been reinforced when the funding of equipments, facilities and infrastructures was combined with actions targeting human resources development through ESF-funded training and education activities (e.g. Midi-Pyrénées, Champagne-Ardenne). The project of developing the micro-nano-electronics sector in Toulon (SPD Objective 2 PACA), which aimed at fostering the setting-up of a research and higher education pole in Toulon comparable to Sofia Antipolis and Aix- Le Rousset, offers an example a contrario of the potential and interest to combine ERDF with ESF fundings. Under the framework of the measure 1.4. of the SPD Strengthening university excellence poles and technology transfer, the project succeed quiet good in developing a micro-nano-electronics pole by favouring linkages between the public research centres and higher education institutions through the purchase of new equipments and materials. But it encountered difficulties to connect the research base with the industry and to develop technology transfer practices, due partly, as the evaluators stated, to the delays in mobilising ESF funding for training and recruiting people to use new equipments and to build linkages with the SMEs. Globally, three main effects need to be emphasised. First, most SF-funded RTDI interventions have had a kick-off effect for starting an innovation process in firms which were not prepared to make the jump or had not the proper competence. With this respect the experience led in Limousin through the establishement of a mecatronics technology platform (building funded by ERDF) is relevant 58. The technology platform created in partnership with the university, other higher education institutions and industrial networks addressed the needs of enterprises that have engaged in an innovation first step, but do not have the proper means and skills for sustaining it on the long term. Second, they had a leverage effect for firms and organisations that had already decided to start an innovation process through allowing them to be more ambitious. Third, they have clearly contributed to promoting a RTDI culture within beneficiary businesses and organisations. 58 See appendix E, case study n France doc 35

41 However, some specific innovation-related measures, such as the so called global grant to OSEO-ANVAR, points questions on their real added value (see appendix E, case study n 4). Through this type of measure, OSEO-ANVAR is delivering aid to feasibility study, aid to innovative projects, aid for recruiting researchers or engineers within businesses on an individual basis. Targeting beneficiaries which may differ from those usually targeted, due to the zoning rule, OSEO-ANVAR complements its own existing scheme with the structural funds. In addition, OSEO- ANVAR does not provide to the managing authorities a clear overview of the results and impacts achieved, and does not give evidence of the coherence of its interventions with the objectives of the SPDs 59. More generally speaking, the global procedure to OSEO-ANVAR raises the question whether SFs have a real added value by supporting innovation within firms on a individual basis, rather than supporting more systematically collective actions associating networks of businesses. 4.3 Conclusions: Structural Funds interventions in favour of innovation and knowledge The key findings coming out from the analysis are related to the challenges that regions are addressing through the Structural Funds. Some regions are trying to consolidate and strengthen what is existing: their research and science strongholds, for instance in LR or in PACA. Other regions are trying to compensate their weaknesses, Nord-Pas-de-Calais for instance. In addition, the analysis of SPD shows that the innovation and knowledge economy measures are structured along the existing national innovation schemes and financially complement and reinforce these national schemes: FRAC, ATOUT, Aid ANVAR, CORTECH, CIFRE 60, aids to CRITT 61, Incubator scheme, etc. In specific cases, the SF-funded RTDI interventions allow in addition to enlarge the target groups of this scheme. This means that the SF-funded RTDI interventions have not had an innovative dimension; they have slipped into the matrix of the national/regionalised innovation system as of the beginning of the 2000 s, prior to the recent shifts in the French policy mix, which of course did not prevent them of having as already stated real kick-off and leverage effects as well as promoting a RTDI culture among beneficiaries. However, it is globally difficult to give an overview of the effectiveness of the SFfunded RTDI interventions. Besides the fact that they are broken up in a large number of measures and sub-measures in the 22 Objective 2 SPD, their management has been 59 The SPDs final evaluation synthesis drafted by the DIACT points clearly this question (page 34). 60 FRAC and ATOUT are mechanisms aimed at funding consultancy services to the benefit of businesses, ANVAR supports innovative projects, CORTECH and CIFRE are grants favouring trainees programmes in businesses for students. 61 Regional centres for technology transfer. 591 France doc 36

42 more administrative than strategic. Moreover, the available evaluations (mid-term and final) are not specifically focused on innovation and knowledge based economy issues and unfortunately do not provide sufficient and satisfying figures and data that could allow an assessment of the results achieved and the effectiveness of the measures. Exhibit 12: main outcomes of innovation and knowledge measures Programme or measure Capability Added value Strengthening research and technology transfer bases Supporting innovation networks and collaborative research projects Supporting innovation project within firms Developing human resources for innovation and R&D Structuring of research and technological poles of competences in thematic fields relevant to the regional economic system Diffusion of a R&D and innovation culture among researchers and enterprises; Good absorption Capacity to attract new target groups and beneficiaries and to generate larger investments Significant results achieved but to be strengthened for mobilising potential project leaders Complementarities with CPER Improvement of institutional building Leverage effect Reinforcement of national priorities focused on improved synergies between research and business Kick-off effect and leverage effect on innovation capacities within enterprises Reinforcement of national priorities Effectiveness significant results achieved; good absorption and management performance, etc. Added value of measures reinforcement of national priorities, innovative approaches and solutions, institution building, etc. 591 France doc 37

43 5 Regional potential for innovation: a prospective analysis This section of the report seeks to summarise and draw conclusions from the analysis of the preceding sections, available studies and interviews and focus groups carried out for this study in order to provide an analysis of the regional innovation potential. In doing so, the aim is to provide a framework for orientations in terms of future Structural Fund investments in innovation and knowledge. 5.1 Factors influencing regional innovation potential The major foresight study that takes into consideration the regional dimension is Régions et Technologies-clés. Quelles stratégies? 62 (there are no serious foresight studies realised by the regions themselves, and it must be reminded that there have been a very few RIS 63 in France that could have possibly led to regional SWOT and foresight exercises). Linked to a more general foresight study Technologies-clés , it identifies four categories of regions in relation to the knowledge economy. Not surprisingly, these categories do not correspond to the ones that have been elaborated by MERIT, but some relation can be established in particular for the first and second categories. The first category is composed by regions that are completely in line with the paradigm of the knowledge economy 65 and have the highest ratio R&D expenditure/gdp: Ile de France (3.2%), Rhône-Alpes (2.6%), PACA (2%) and Midi Pyrénées (3.7%). Ile de France and Rhône-Alpes are in a position to control practically all key technologies. PACA has sufficient scientific and technological bases for controlling a large number of key technologies; for the others, it has only scientific competences. Midi Pyrénées is mastering completely a few number of key technologies (aerospace, robotics), while it has only a scientific base for the others. Ile de France and Rhône-Alpes should keep the quality of their scientific and technological potential, PACA and Midi-Pyrénées are in a position to adapt to current S&T changes, but all these regions should develop a stronger industrial/technological fabric and (for Rhône-Alpes) industrial restructuring capacities out of their scientific base.. The second category is composed by regions which are in line with the paradigm of the knowledge economy, but for a part only of key technologies: Alsace, Bretagne, Languedoc-Roussillon, Lorraine. Except for Languedoc-Roussillon (2%), their ratio R&D expenditure/gdp is under the French average. These regions have not sufficient S&T bases for controlling a number of key technologies; however, they have the 62 Ministère de l Economie des Finances et de l Industrie, DIGITIP, Regional Innovation Strategies or RITTS (Regional Innovation and Technology Transfer Infrastructures and Services): representatives of the central government in the regions were in general hostile to these programmes Regions in line with the paradigm of the knowledge economy are defined as: those which have the S&T bases allowing them for controlling a major part of the 118 key technologies identified in the global study Technologies-clés 2005 ; or those which master the S&T competences relevant to a small number only of them, but have the scientific bases for all the others (pp ). 591 France doc 38

44 scientific base for some and they have a real S&T critical mass for some others (ex.: biotech in LR). They should turn their scientific competences into high technology, and create a base for developing new key technologies, and technology diffusion, that could help in particular Languedoc-Roussillon to develop high-tech businesses. The third category is composed by regions which are only partly in line with the paradigm of the knowledge economy : Aquitaine, Centre, Haute-Normandie, Nord- Pas-de-Calais, Pays de la Loire, Picardie. These regions have not the sufficient S&T base to control a large number of key technologies; however, for a few key technologies, they have sufficient technological competences for mastering them (e.g.: chemicals/materials in Haute-Normandie). They should strengthen their strengths through developing corresponding scientific competences (maybe with interregional collaborations) or developing new ones, and staying leading-edge in their core technologies. The last category is composed by regions which are still out of the paradigm of the knowledge economy : Auvergne, Basse-Normandie, Bourgogne, Champagne- Ardenne, Franche-Comté, Limousin, Poitou-Charentes. They are absent from more than half of S&T competences required for controlling key technologies and have in general a very low ratio R&D expenditure/gdp, except Auvergne (2.4% because of Michelin) and Franche-Comté (2.1% because of automotive and micro-technics industries). They should create effective S&T capacities, strengthening their few strengths in specific fields in a first step, and valorise these capacities in a second step (spin-offs, external investments). The report Régions et Technologies-clés. Quelles stratégies? confirms the existence of a Southern Belt with high S&T potential (Rhône-Alpes, PACA, LR, Midi-Pyrénées). However, it does not give indications on the threats that the different groups of regions are facing, but points mainly on opportunities. While not being a foresight exercise, the recent selection of 67 Poles of Competitiveness has resulted from an interesting bottom-up process that has led key regional actors to agree on major fields of competences to be supported. For instance, with regard to the regions out of the knowledge economy, this process has allowed the identification of potentials for innovation: agro-industry in Champagne-Ardenne, ceramics in Limousin, advanced transportation in Poitou-Charentes. In some specific cases, metropolitan strategies aimed at developing specific S&T potential on a cluster basis cannot be also neglected 66 with the examples of Grenoble (micro- and nano-technologies), Nantes (biotechnologies), Sophia-Antipolis (ICT), Montpellier (medicine, agronomical research). Finally, the recent adoption in several regions of Regional Economic Development Plans highlighting innovation and knowledge based economy support as a major 66 From the mid-1980 s, the largest French local authorities have developed technopoles, through a local policy mix supporting collaborations university/research-industry, creating S&T parks and lobbying for increased investments in university/research infrastructures and facilities. See: M. Lacave and K. Halvorsen, Innovation Systems in Urban Areas, 1998; M. Grossetti Genèse de deux systèmes urbains d innovation en France : Grenoble et Toulouse, in : Réalités industrielles, Annales des Mines, février France doc 39

45 concern 67, is a positive point provided that these SRDE are taken into account in the drafting of the operational programmes Exhibit 13: Factors influencing innovation potential by type of region Region / type of region Main factors influencing future innovation potential Science & Service Centre: Staying on the leading edge in S&T Ile de France Developing high-tech industry Local Science & Services : Turning scientific capacities into technological PACA, LR, Midi-Pyrénées capacities and high-tech industry Keeping a level of excellence in core scientific competences High Techno : Franche- Strengthening the existing strengths through enlarging Comté, Haute-Normandie the scientific base Staying on the leading edge in core technologies capacities Raising the technological level of industries Developing interregional collaborations Improving attractiveness Central Techno (general) Identifying potential S&T fields for creating a critical mass (clustering, human resources) Developing interregional collaborations Central Techno : Rhône- Staying on the leading edge in S&T Alpes Developing high-tech manufacturing Industrial Central Techno (e.g. Lorraine) Western Central Techno (Pays de la Loire, Bretagne) Rural Central Techno (e.g. Poitou-Charentes) Creating in some fields a scientific (or a technological) base for developing new key technologies Building upon attractiveness for strengthening human resources Strengthening existing strongholds Identifying potential S&T fields for creating a «minimal» critical mass Developing interregional collaborations 5.2 A prospective SWOT appraisal of regional innovation potential This SWOT appraisal is provided for the 4 clusters of regions. However, concerning the cluster Central Techno, a distinction has been made in line with analyses of 2 and 3 between Rhône-Alpes (profile close to Ile de France and Local and Science Services), Rural Central Techno, Industrial Central Techno, and Western Central Techno. 67 A concrete translation of this new committment is the creation of regional innovation agencies in several regions (e.g. Bretagne, Aquitaine, Bourgogne, Midi-Pyrénées, etc) 591 France doc 40

46 Exhibit 13a: Innovation and Knowledge SWOT Ile de France Opportunities Threats Strengths High scientific and technological Good potential for staying potential leading edge and attract R&D investment (in particular ICT, Weaknesses Good potential for developing hightech manufacturing and developing poles outside the Paris area Local Science & Opportunities Services: PACA, Languedoc- Roussillon, Midi- Pyrénées Strengths High scientific (and in some cases technological) potential (biotechnologies, aerospace, microelectronics, agro-food) Weaknesses Good potential for developing hightech manufacturing (agro-biotech), entre-preneurship and researchdriven clusters High Techno: Opportunities Franche-Comté, Haute-Normandie Strengths High industrial and technological potential (chemicals and materials, automotive industry, micro-technics) Weaknesses Potential for developing a stronger S&T base, higher education, and going more high-tech than mediumtech Central Techno : Rhône- Alpes Opportunities Strengths High S&T potential (biotechnologies, micro- and nanotechnologies, software for videogames) Weaknesses Potential for strengthening high-tech services Potential for going more high-tech Rural Central Opportunities Techno : e.g. Poitou-Charentes, Limousin, Bourgogne Strengths Potential for building upon some S&T concentrations (e.g.: agro-food, ceramics) through structuring clusters Weaknesses Potential for strengthening higher education and public research software, medicine) Threats Good potential for staying leading edge in scientific strongholds Potential for creating qualified jobs needs to be confirmed Potential for developing an entrepreneurship culture needs to be confirmed (lack of business culture) Threats Rather good potential for industry staying competitive Rather low attractiveness potential (qualified human resources) Threats Good potential for staying leading edge in S&T (veterinary medicine, chemicals, plasturgy) Rather low potential for restructuring industries in some areas as metal-cutting, textile ( delocalisation, transfer of businesses) Threats Potential for supporting the industrial fabric through innovation and technology transfer Low innovation governance Low attractiveness potential 591 France doc 41

47 Industrial Opportunities Central Techno : Lorraine, Nord Pas de Calais Strengths Potential for building upon industry for strengthening the S&T base (materials in Lorraine) Weaknesses Potential for strengthening higher education and public research Western Opportunities Central Techno : Bretagne, Pays de Loire Strengths High potential for building upon some S&T poles (ICT in Bretagne, biotechnologies in Pays de Loire) Potential for building upon industry (agro-food in Bretagne) High potential for building upon attractiveness of the major cities Weaknesses Potential for developing high-tech manufacturing and turning research into business Threats Potential for diversifying the S&T base through strengthening emerging S&T concentrations (biotechnologies in NPdC) Low attractiveness potential Industrial restructuring ( delocalisation ) Threats Potential for diversifying the S&T base through strengthening emerging S&T concentrations (alternative energies in Bretagne, vegetal biotechnologies in Pays de Loire) Industrial restructuring (mechanical industries, textile) 5.3 Conclusions: regional innovation potential Policy headline 1: Potential for staying leading edge or becoming leading edge in specific S&T fields Regards: Ile de France, Rhône-Alpes, PACA, Languedoc-Roussillon, Midi- Pyrénées Policy headline 2: Potential for developing high-tech manufacturing and entrepreneurship Building on a strong scientific (and in some cases technological) base with support to world-class research-driven clusters: Ile de France, Rhône-Alpes, PACA, Languedoc-Roussillon, Midi-Pyrénées, and maybe Bretagne and Pays de Loire Policy headline 3: Potential for strengthening the industrial base and going more high-tech Developing higher education and the S&T base, diversifying the S&T base, preventing délocalisation and addressing problems related to transfer of businesses: Franche-Comté, Haute-Normandie, Lorraine, Nord Pas-de-Calais Policy headline 4: Potential for building on existing small S&T concentrations or creating ones With raising general level of higher education: Rural Central Techno regions Policy headline 5: Potential for building upon attractiveness Developing entrepreneurship, strengthening human resources qualification: Western Central Techno regions and Southern belt (PACA, Languedoc- Roussillon, Midi-Pyrénées) 591 France doc 42

48 6. Future priorities for Structural Fund support for innovation and knowledge: options for intervention The following recommendations and guidelines are built on the basis of interviews and focus group meeting with key national and regional innovation stakeholders and analysis of the existing literature. Some key general messages emerge which should guide the design and implementation of the French operational programmes and determine the support provided by the Structural Funds : - A need for well defined and coordinated regional innovation strategies in order to make clear strategic choices (sectoral, technological, etc.) - An integration of an inter-regional dimension within the interventions - A strong focus on fostering linkages between research-academics-business through multi-dimensional support to innovation driven-clusters, competence centres - A greater selectivity of the interventions at the regional level based on a shared diagnostic of the territorial needs 6.1 Strategic orientations for Structural Fund investments in innovation and knowledge Key conclusion 1 : Regional innovation governance is limited The awareness of the necessity of improving innovation governance has made some progress in regions where there has been an experience of delegated management through the establishment of regional innovation agencies. The recent preparation of applications for Poles of Competitiveness has also contributed to raise awarenessamong key local and regional actors. The NSRF intends to address the issue. All this provides opportunities for SF interventions. Recommendation 1 : Support exercises related to the definition of coordinated regional innovation strategies and governance models They can be foresight exercises or exercises similar to RIS (in the past, very few French regions applied for RIS/RITTS) with a strong focus on the definition of regional innovation diagnostic (more business-driven, see above 3.3) and the identification of regional innovation systems which would integrate benchmarking, strategic intelligence, territorial marketing and foresight dimensions combined with an emphasis on potential inter-regional cooperation where appropriate; an interregional approach could build upon the metropolitan cooperation networks 68 supported by DIACT. 68 DIACT has launched a call for proposals in 2005 for supporting such networks. An example is the Réseau de cooperation métropolitaine Rhin-Rhone associating Besançon, Dijon, Mulhouse, Belfort, Montbéliard, and some other minor cities: this network is trying to create critical masses 591 France doc 43

49 They are particularly needed in Rural Central Techno regions. They could also be linked in a number of regions to the structuring of Poles of Competitiveness managing organisations (each mainland region has at least one Pole) and to the newly created regional innovation agencies. Linkage can be established with FP7 / Capacities / Regions of Knowledge programme. Key conclusion 2 : There is a necessity of strengthening clustering and fostering linkages between research, academia and industry In most regions, the research-academia-business linkages, but also the links between large firms (often foreign owned companies) and local SMEs are rather weak. Even in the most advanced regions in terms of RTDI, public research has not so far led to the creation of effective and well-structured high-tech clusters. The NSRF points to attractiveness and territorial excellence. The recent programme Poles of Competitiveness has emphasised the necessity of getting industry, research and higher education closer on a territorial basis. However, French Regions are particularly reluctant to concentrate their innovation support and budget to poles arguing that: i) ERDF does not aim systematically at co-financing a national policy ; ii) large poles need large financial support wich cannot be met by regional budgets and ERDF; iii) their impact on the local SMEs development is rather weak at present ; and iv) finally regions do not want to dedicate the largest part of their R&D and innovation budget and sacrify other filières. Finally, the new Programming Law for Research offers new tools for scientific cooperation (PRES 69 and Thematic Networks for Advanced Research) allowing public or private research organisations and higher education institutions to group their activities and their means for carrying out projects of common interest and projects of scientific excellence in thematic research fields, open to enterprises, local and regional authorities and associations. Recommendation 2 : Support innovation-driven clusters and competence centres This support should be adapted to the specificities and needs of the regional innovation strategies. It should not blindly and automatically concern specific poles of competitiveness selected. For regions not willing that SF concentrate on State-labelled poles, it is recommended that SF concentrate notwithstanding either on supporting innovation and diversification in existing clusters or filières (in particular in Industrial Central Techno regions) or on emerging ones (in particular in Rural Central Techno regions and in Local Science and Services). Poles of Competitiveness are distributed in 3 categories: world-class, potentially world-class, national. When SF will support poles, a balance should be found between a picking the winners approach for some poles with world/eu visibility and a catching-up approach helping some poles to jump to the upper category; this could be done through a sectoral assessment regarding key S&T sectors at French and in some R&D areas out of the universities and research institutions located in its member-cities in 3 regions (Alsace, Bourgogne, Franche-Comté). 69 Pôles de recherche et d enseignement supérieur (Research and Higher Education Poles) 591 France doc 44

50 EU level; for instance, support to jumping to another category could be justified with the pole in Languedoc-Roussillon (with some extension in PACA) which has world-class research, but limited business base. Support to innovation-driven clusters and competence centres should combine various types of interventions regarding: access to finance, mobility of researchers, applied research, and knowledge transfer and technology diffusion to SMEs. It should also mobilise CIP and FP7 instruments together with SF funding, with particular attention to SME needs. Specific attention should be paid to non-technical innovation. The inter-regional dimension should be taken into account (at national and at transnational level): some poles are already inter-regional 70 ; other could gain an interregional dimension through the above-mentioned metropolitan cooperation networks. Support to innovation-driven clusters could be a test-ground for supporting complex projects through combining a complete set of instruments (SF, CIP, FP7, EIB/EIF with JEREMIE). It should include support to strategic intelligence, knowledge management, benchmarking, and foresight (see Recommendations n. 1 and 3). Key conclusion 3 : Support to applied research and product development, and technology transfer and diffusion is too dispersed There is a piling-up of interface organisations mixing national, regional (and in some cases local level). There are many actions in the field of technology transfer, that are often effective, but do not reflect, with some exceptions, a real strategic vision. Nontechnological innovation has received only little support so far. However, the recent creation of Agence Nationale de la Recherche and Agence de l Innovation Industrielle, which require participation of businesses in projects, signals a reorientation of the funding of R&D toward funding on a project basis, even if, for the moment, budget allocations to ANR and AII are limited in comparison to the global R&D expenditure. Recommendation 3 : More focused support to applied research and technology transfer Concentration should concern projects supported by ANR and AII and technology transfer and technology diffusion actions related to existing or emerging poles. Such a concentration would provide a clear and readable EU-added value, in particular if the French government decides to concentrate ANR and AII funding on projects coming out from Poles. Another point regards the linkage to FP7 priorities: improvement in innovation governance should lead to a larger and more focused participation of regional actors and SMEs to FP7 projects that regions can support independently from labelled poles. Support should clearly prioritise demand-driven projects. Services related to strategic intelligence, knowledge management, benchmarking and foresight should be developed (in relation with Recommendation n. 1) as a basis for making applied research and technology transfer more focused and effective at regional level. 70 An example is «Aerospace Valley» involving Midi-Pyrénées and Aquitaine. 591 France doc 45

51 The inter-regional dimension should again been taken into account, in particular in Central Techno and High Techno regions where there is not necessarily a good correspondence between the regional economic fabric and the S&T resources. This recommendation is linked to Recommendations 1 and 2. Key conclusion 4 : Support to creation and development of innovative enterprises is not sufficient The entrepreneurship culture is rather low; even in regions with a strong public R&D base, this potential is not translated into innovative firms creation. In addition, support to academic spin-offs has been privileged so far and not the development of hightech/innovative businesses as such. The NSRF takes into account related issues, in particular concerning entrepreneurship and the creation and transfer of companies. While the transfer of companies is surely a key issue that has to be addressed, there remains a gap between a priority focused on new innovative companies mainly viewed as coming from public research and support to entrepreneurship and SMEs. Recommendation 4 : Support the creation and development of hightech/innovative businesses This is a key in particular for the most advanced regions in terms of RTDI activities (Ile de France, PACA, Languedoc-Roussillon, Midi-Pyrénées, Rhône-Alpes), but also for other regions. Support should combine various types of interventions regarding: access to finance (not limited to seed-capital, but including equity in general); knowledge transfer; development of high-tech services with specific attention paid to non-technological innovation (design, management, process, and organisation); incubator facilities; training in entrepreneurship and diffusion of a culture of innovation. Key conclusion 5 : Weak equity culture The equity finance culture is generally weak in France. The equity market in regions is dominated by regional public-led funds and the Caisse des Dépôts et Consignations that are often considered as sleeping shareholders. The equity guarantee sector is dominated by OSEO-SOFARIS, part of the public OSEO holding. In some regions (High Techno, Rhône-Alpes, Industrial Techno, in particular), the issue of transfer of businesses (some of them high-tech SMEs) is critical and would require a strong effort in favour of access to equity or mezzanine financing. Recommendation 5 : Support the development of equity finance Seed-capital should be supported in the Southern Belt and the Western Belt. Equity finance (later stages, transfer of businesses) should be supported in High Techno and Central Techno regions, in a clearly market-oriented perspective (such as investment pari passu). The JEREMIE ( Joint European Resources for Micro to Medium Enterprises ) initiative, associating at EU institutions level DG REGIO, DG ENTR, DG ECFIN, and EIB/EIF, will provide the framework for channelling EU funding to financial vehicles and instruments in the field of equity, guarantee (counter-guarantee), and 591 France doc 46

52 innovative finance (mezzanine). The French government and Regions have to define a workable and market-oriented strategy with respect to this initiative. JEREMIE is mentioned in the French NSRF 71. For what regards more specifically seed-capital and early stage VC, investment readiness programmes should be made available to startup and spin-off companies, since there is a (rather classical, to be honest) mismatch between venture-capitalists and business angels who declare that there is only a very few good projects to invest in, and start-ups and spin-offs which complain about the lack of risk capital. Key conclusion 6 : Higher education is too generalist and not open enough to business co-operations, higher education capacities are also insufficient in some regions The present study has identified weaknesses in the higher education system, which hampers the availability of qualified human resources, particularly in Rural and Industrial Central Techno as well as High Techno regions. The academic system is split into a great number of universities at the regional level which have not, outside the main academic centres, a sufficient critical mass for attracting both students and researchers and for having a visibility at the inter-regional and international level 72. Moreover, all universities are officially considered of providing the same quality of education and research, which is of course wrong, and they have only limited autonomy, which does not help to have them defining clear strategies. Recommendation 6 : Support the structuration and the mutualisation of higher education and research poles and their attractiveness capabilities In particular in Central Techno and High-Techno Regions, support should be provided for networking, joint activities development and mutualisation of means between higher education and research institutions (e.g. PRES) integrating an interregional dimension (see again metropolitan cooperation networks ). This support could be particularly focused on academic research valorisation within the universities by linking the research valorisation offices (SAIC) to the existing technology transfer centres and training professionals; linkage with Poles of competitiveness and innovation-driven clusters could be privileged within this perspective. Support should also be provided for attractiveness strategies through the development of schemes attracting high-level academics and researchers the national programme Chaires d excellence provides a base to build upon and a greater use of mobility schemes and attracting students inside and outside the regions (in particular foreign students) by offering high quality education in relation to the regional economic fabric and the research potential; FP7th Marie Curie actions could be used in connection with SF interventions. In addition, it should include an entrepreneurship component (along the lines of CIP). SF interventions could prove a useful instrument to overcome (at least partly) some barriers to innovative strategies in French universities. 71 DATAR, Cadre de reference stratégique national, , p The Shangaï University s Academic Ranking of World Universities 2005 ranks only four French universities among the top 100 (three of which in Ile de France). Cf France doc 47

53 It is worth comparing these recommendations with the National Strategic Reference Framework, in is last version n.4 dated 25 April Concerning the Competitiveness and Employment Objective ERDF funding, it points on promoting attractiveness and territorial excellence for investments and jobs with two major orientations: - acting on regional actors (SME, micro-enterprises in particular) for stimulating R&D and entrepreneurship, encouraging innovation and promoting the use of ICT, innovation and the knowledge economy constituting the main lines of intervention; - building an environment favourable to the growth and competitiveness of actors and territories, through support to partnerships (enterprises, research, training, NGO) and sustainable development. Governance and innovation financing (with more sophisticated financial engineering) issues which were surely not top priorities during the programming period ) are taken into account in the NSRF. It is expected that poles of competitiveness, and in general poles of excellence, will be supported by the ERDF. Entrepreneurship and the creation of activities are expected to be supported by the ESF in the Competitiveness and Employment Objective. Higher education does not appear among the priorities or lines of intervention. In the Convergence outermost regions, innovation and the knowledge economy seem to be a little bit less in the front seat. Priority 1 Promoting competitiveness and attractiveness of territories includes four lines of action among which Supporting economic development through innovation, research, and networking of businesses: strengthening of regional RTDI capacities; support to creation, transfer, modernisation, and diversification of enterprises; promotion of networks and partnerships of enterprises with universities and research (see also Priority 5). 6.2 Operational guidelines to maximising effectiveness of Structural Fund interventions for innovation and knowledge Guideline 1 Enlarging the partnership for the building and the monitoring of the operational programmes implementation As already stated (section ), the monitoring partnership of the French SPDs is not well tailored for innovation and knowledge-based economy measures, since it is too top-down oriented. The European Commission should encourage the involvement of all the actors of the regional innovation system in the shaping and monitoring of the future programmes: private actors, technology transfer centres, research centres and universities. Regarding the latter, they are in most of the regions the main potential brokers of innovation and develop research valorisation strategies. Guideline 2 Professionalising and training the implementers of the Cohesion Policy to innovation and knowledge based economy Support could consist on measures within regional operational programmes or within the national technical assistance programme (PNAT) targeted at training implementers (i.e. programme managers, decision-makers and potential beneficiaries) 591 France doc 48

54 on innovation engineering. Training should cover: innovation management techniques (including networking, matchmaking and benchmarking capacities) ; financial engineering (equity finance for innovation) ; and knowledge of FP7 mechanisms (e.g. risk-sharing facility, etc.). Guideline 3 Favouring the support to collective actions, rather than individual projects, selected on a call for projects basis Support to innovation within firms or to technology and knowledge transfer, in particular, should favour collective actions with a potential greater impact on regional development. It would allow a better concentration of resources and a greater added value. This kind of support could be combined with a more general use of a call for projects procedure ensuring the selectivity of the interventions and avoiding the guichet effect. By instance, the support to poles of competitiveness should be focused on collective actions associating both SMEs and the larger companies of the poles on technology transfer projects. Guideline 4 Diffusing a more innovation-oriented evaluation culture of the future operational programmes The management of the French SPD has been administrative, rather than strategic; the mid-term and final evaluations reflect this orientation. In addition, evaluations were not focused on innovation issues. The Commission could support the development of innovation-oriented evaluations integrating a benchmarking dimension and allowing to re-focus the strategy during the programming period (reactivity). 591 France doc 49

55 National innovation policy schemes Chaires d excellence EU innovation policy instruments (FP7 and CIP, JEREMIE) Structural Funds: 1) PACA ERDF: 15%; 40,23 MEUR ESF: 5%; 12,63 MEUR 2) LR ERDF : 24% ; 57,59 MEUR ESF : 5% ; 7,12 MEUR 3) MP ERDF : 15% ; 53,64 MEUR ESF : 5% ; 7,69 MEUR 4) Pays de Loire ERDF : 12% ; 32,18 MEUR ESF : 5%; 9,10 MEUR 5) Bretagne ERDF : 12% ; 32,12 MEUR ESF : 5% ; 8,13 MEUR 591 France doc 50 Exhibit 15: Summary of recommendations on investment priorities For SF indicative financial resources, we use the figures indicated by the French government (CIACT, 6 March 2006) as a basis; these figures provide a distribution of ERDF and ESF funding per region. We indicate for each region or group of regions a percentage and an amount that take into account: - the percentage of SF-funded RTDI interventions during the programming period (codes ); - the absorption capacity; - the percentage of SF-funded RTDI given as an approximate target by the Aho report, i.e. about 20%. Region or group of regions Science and Services Ile-de-France Strategic focus Priority measures Indicative financial resources Staying leading edge in S&T strongholds Developing high-tech manufacturing Supporting the creation and development of innovative firms in the high-tech sectors Enlarging the opportunities of access to equity finance: seed and early stage, later stages (transfer and buy-outs) National innovation policy schemes EU innovation policy instruments (FP7 and CIP, JEREMIE) Structural Funds outside Paris area ERDF: 8%; 10,19 MEUR ESF: 6%: 28,47 MEUR Local Science and Services PACA Languedoc- Roussillon Midi-Pyrénées Western Central Techno Pays de la Loire - Bretagne Turning scientific capacities into technological capacities and high-tech industry Strengthening the knowledge workers potential for innovation Strengthening the industrial base for developing high tech manufacturing Supporting research and innovation-driven clusters (or S&T concentrations) in scientific fields of excellence and emerging industrial clusters Strengthening the support to innovative firms combining the development of an entrepreneurship culture (targeting students/researchers) and the development of seed-capital in areas of scientific excellence Providing a more focused support to applied research and technology transfer Support access to pre-seed, seed and early stage venturecapital

56 591 France doc 51 High Techno Franche-Comté Haute Normandie Central Techno Rhône-Alpes «Rural» Central Techno e.g. Poitou- Charentes, Limousin, Bourgogne, Aquitaine, Auvergne, Basse- Normandie, Centre, Champagne- Ardenne, Corse, Picardie Enlarging the scientific base Adapting industrial sector to new technologies and innovation Improving attractiveness Developing human resources capabilities for innovation Staying leading edge in S&T strongholds Developing high-tech services and strengthening high-tech manufacturing Adapting traditional industrial sector to new technologies and innovation Developing identified S&T fields for creating a critical mass and diversifying the industrial fabric Developing inter-regional co-operations Developing human resource capacities for innovation Supporting the structuring and the mutualisation of higher education, research poles and technology transfer organisations, including an inter-regional dimension (and also cross-border, where appropriate) Supporting the innovation capacities of SMEs (including non-technological innovation) Supporting the access to equity finance (later stage, transfer of businesses) in a market-oriented perspective Supporting the creation and development of innovative firms in the high-tech and services sectors, particularly outside Lyon and Grenoble areas Supporting the emergence of more innovation-driven industrial clusters in traditional sectors Developing equity finance: seed and early stage, later stages (transfer and buy-outs) Building stronger partnerships between academiaresearch-business for fostering technology transfer in emerging small clusters and filières Supporting the structuring and the mutualisation of higher education, research poles and technology transfer organisations, including an inter-regional dimension (and also cross-border, where appropriate) Supporting the innovation capacities of SMEs (including non-technological innovation) through human resources capacities development Developing equity finance (transfer and buy-outs) National innovation policy schemes Chaires d excellence Structural Funds: 1) Franche-Comté ERDF: 15%; 18,19 MEUR ESF: 5%; 3,31 MEUR 2) Haute-Normandie ERDF : 15% ; 29,19 MEUR ESF : 5% ; 6,26 MEUR EU innovation policy instruments (FP7 and CIP) National innovation policy schemes Chaires d excellence Structural Funds ERDF: 15%; 44,46 MEUR ESF: 8%; 25,53 MEUR EU innovation policy instruments : FP7 (e.g. increasing use of next CRAFT generation) ; CIP Structural Funds ERDF: 15%; 270 MEUR ESF: 10%; 87,31 MEUR globally National innovation policy schemes

57 591 France doc 52 «Industrial» Central Techno Lorraine, Nord- Pas-de-Calais, Alsace Diversifying the industrial base (more innovative service-oriented) Strengthening the public higher education and research capacities Developing inter-regional collaborations All regions Designing coherent regional innovation strategies and governance models Building stronger partnerships between academiaresearch-business for fostering technology transfer in emerging small industrial clusters and filières Supporting the structuring and the mutualisation of higher education, research poles and technology transfer organisations, including an inter-regional dimension (and also cross-border, where appropriate) Supporting innovative and services-oriented businesses Developing equity finance (transfer of businesses and later stage) Developing the use of innovative governance tools for establishing diagnostic and building strategies : benchmarking, strategic intelligence, foresight, territorial marketing, inter-regional and cross-border cooperation Structural Funds ERDF: 18%; 174,89 MEUR ESF: 8%; 42,91 MEUR globally National innovation policy schemes Structural Funds EU Innovation instruments FP7 (Regions of Knowledge)

58 Appendix A Methodological annex A.1 Quantitative analysis of key knowledge economy indicators A1.1 Factor analysis In order to analyse and describe the knowledge economies at regional level in the EU, the approach adopted was to reduce and condense all relevant statistical information available for a majority of regions. The approach involved firstly reducing the information from a list of selected variables (Table 1) into a small number of factors by means of factor analysis. Table 1. Reduction of the dataset (215 EU-25 regions) into four factors by means of factor analysis The 4 factors F1 Public Knowledge F2 Urban Services F3 Private Technology F4 Learning Families Higher education (HRSTE), Knowledge workers (HRSTC, core), High-tech services employment, Public R&D expenditures (HERD+GOVERD), Value-added share services, Value-added share industry, Employment government administration, Population density, High and Medium/high-tech manufacturing employment, Value-added share agriculture, Business R&D expenditures, S&T workers (HRSTO, occupation), Population share under 10 years of age, Life-long learning, Activity rate females, Note: Principal Component Analysis. Rotation Method: Equamax with Kaiser Normalization, a Rotation converged in 9 iterations. Main factor loadings are highlighted in bold. Source: MERIT, based on Eurostat data, mostly referring to 2002 or 2003 Based on the variable with the highest factor loadings we can characterise and interpret the four factors and give them a short symbolic name: 1. Public Knowledge (F1) Human resources in Science and Technology (education as well as core) combined with public R&D expenditures and employment in knowledge intensive services is the most important or common factor hidden in the dataset. The most important variables in Public Knowledge are the education and human resource variables (HR S&T education and core). Cities with large universities will rank high on this factor. 591 France doc

59 One interesting conclusion is that public and private knowledge are two different factors (F1 and F3 respectively), which for instance has implications for policy issues regarding Science-Industry linkages. Public R&D and higher education seems especially related to high-tech services, whereas Business R&D especially serves high- and medium-high-tech manufacturing. 2. Urban Services (F2) This second factor contains information on the structure of the economy. It is well known that industrial economies are quite different from services based economies. It is not a matter of development per se, because in the European regions the variety of economic structure is very large and for a large part based on endowments and path dependent developments like the extent to which government administration is located in a region or not. This factor takes into account the differences between an industrial area and a service based area including the public administration services of the government. Another observation is that there are two different urban factors, indicating that academic centres not necessary co-locate with administration centres. What may not be surprising is that the Urban Services factor is not associated with R&D, since R&D is more relevant for innovation in manufacturing than for service industries. 3. Private Technology (F3) This factor contains business R&D, occupation in S&T activities, and employment in high- and medium-high-tech manufacturing industries. A countervailing power is the existence of agriculture in the region. One interpretation could be that agricultural land-use goes at the cost of possibilities of production sites. Another interpretation is that agriculture is not an R&D intensive sector. 4. Learning Families (F4) The most important variable in this factor is the share of the population below the age of 10. Locations with relatively larges shares of children are places that are attractive to start a family. Possibilities for Life Long Learning in a region seems associated with the lively labour participation of the mothers of these youngsters. The Learning Families factor could also be understood as an institutional factor indicating a child-, learning- and participation- friendly environment, or even a knowledge-society-lifestyle based on behavioural norms and values that are beneficial to a knowledge economy. 591 France doc

60 A1.2 Description of the 11 types of EU regions Types of regions Learning Central Techno Local Science & Services High Techno Aging Academia Southern Cohesion Eastern Cohesion Rural Industries Low -tech Government Nordic High-tech Learning Science & Service Centre Public know ledge Urban services Private Technology Learning families 1 Learning The Learning regions are first of all characterised by the high score on the factor Learning Families, and the three main components of this factor: life-long-learning, youth and female activity rate. On the other factors the regions are close to the regional average. Unemployment is on average the lowest compared to the other EU regions. Employment in the government sector is limited. GDP per capita is rather high. The regions are located in Austria, Ireland, the Netherlands, Sweden and the UK. There are many similarities with the Nordic High-tech Learning regions, but the business sector in the Nordic version invest more in R&D. 2 Central Techno This is a rather large group of regions located mostly in Germany and France with close to average characteristic, but the share of High-tech manufacturing is rather 591 France doc

61 high. The factor-scores as well as GDP-per head is slightly above the regional average, except for the Public Knowledge factor which is slightly lower. 3 Local Science & Services This group of regions with diverse nationality consist mainly of capital cities, such as Madrid, Warsaw, Lisbon, Budapest and Athens. These urban area s serve as national centres for business services, government administration, public research institutes and universities. Urban Services and Public knowledge are therefore the strongest factors for this type of region. GDP per capita is on average slightly below the EU25 average, but growing. The low score on life-long-learning is a weakness in most Local Science & Services regions, especially compared to the more wealthy and advanced Science & Service Centres. 4 High Techno The High Techno regions host many high-tech manufacturing industries. They are mostly located in Germany (e.g. Bayern and Baden-Württemberg), some in Italy (e.g. Lombardia and Veneto) and two French regions. This type is very strong in Private Technology and has a high level of GDP per capita. The factors Public Knowledge and especially the Learning Family factor shows a relative weakness, e.g. in life-longlearning. Growth in terms of GDP per capita has been low and unemployment didn t improve much in the previous years. 5 Aging Academia This group of regions is mostly located in east-germany and Spain and also includes the capital regions of Bulgaria and Romania. The strength in the Public Knowledge factor is mostly based on the high share of people with tertiary education. The low score on the Learning Family factor is due to little life-long-learning and hosting relatively few children. The unemployment situation has improved, but is still very high. 6 Services Cohesion Services cohesion regions are located in Southern Europe, consisting of many Greek, some Spanish and two Portuguese regions. The low score on the Private Technology factor is striking. There is hardly any high-tech manufacturing nor business R&D. Services is the most important sector, but also agriculture is still a rather large sector. The share of manufacturing industry in value added is very limited. Population density is low, but on average it has been increasing. 7 Manufacturing Cohesion Manufacturing industries is the dominant sector, whereas services and agriculture are rather small sectors. This type of region is mostly located in Poland, Czech Republic, Hungary and Slovak Republic. Two Portuguese regions are also included. The Public Knowledge factor is the main weakness of this type of regions. However, the score on the Private Technology factor is close to average, which means that it is much stronger in this respect than the Services Cohesion regions. Unemployment is high, even compared to Rural Industries and Services Cohesion regions. 8 Rural Industries Besides a low per capita GDP, Rural Industries regions have in common a low score on both the factors Urban Services and Private Technology. Population density is 591 France doc

62 very low. The service sector is often very small. Especially agriculture but also manufacturing industries are relatively large sectors. Besides regions in Bulgaria and Romania 9 Low-tech Government This type of region, mostly located in southern Italy is characterised by a very low score on Public Knowledge combined with a high share of employment in the Government sector. Unemployment is severe, on average comparable to Manufacturing cohesion regions. GDP per capita is however close to the regional average. 10 Nordic High-tech Learning The Nordic version of the learning regions are typically strong in the Learning Family factor, but this type also has by far the highest business R&D intensity. In contrast with the popular characterisation of Nordic societies, the size of the government administration is the lowest of all the types. The low score on Urban Services is also due to the low population density. A rather unique feature of this type of regional knowledge economy is the combined strength in both the Public Knowledge and the Private Technology factor. 11 Science & Service Centre The main characteristics of this urban group of regions are the high scores on the Public Knowledge and Urban Services factors. Population density is very high. This type also has the highest GDP per capita and productivity. The variables that are captured by the factor Learning Families also show a score above the regional average, but disappointing is the relatively low presence of high and medium-hightech manufacturing and the business R&D intensity. 591 France doc

63 A.2 Qualitative analysis and preparation of country reports In summary, the country reports were prepared in the following stages: A first country document was prepared by the core study team in the form of a template country report. It contained overall guidance to the country experts and included a number of pre-filled tables, graphs and analysis sections based on information available at EU level. Next, the core team members and the national experts who were involved in the pilot phase of the project commented completed elements of the templates. Drafted elements and templates were completed and compiled into first country briefings (draft pilot reports) by the national experts involved in the pilot phase of the project. These pilot country reports were prepared by experts for Belgium, Greece, Italy, France, and Poland. Once the five first country briefings were completed, a final set of guidelines was prepared by the core team. These guidelines were agreed with the Commission services responsible for this evaluation. Prior to this, all first country briefings were reviewed during the January 2006 and presented to a first meeting of the scientific committee. The work during the country analysis phase included: Undertaking a series of key interviews (KI) with policy decision makers; Organising a focus group (FG) with key national or regional RDTI stakeholders; Collecting additional information and finalising short case studies; and Preparing the synthesis notes of these various activities. The above-mentioned work served as qualitative data and allowed the national experts to compile the draft country reports. All reports were subsequently reviewed, checked and finalised by the core team and the consortium members. Once this first check was completed, the core team organised a final peer reading of the document to verify its overall consistency and to ensure a final English language editing of the document. The core team then completed the final editing and layout of the document with a view to publication. An overall synthesis report of all has been prepared and will be published by the European Commission providing an overview of the issues addressed in each of the 27 country reports produced by the evaluation team. 591 France doc

64 EU25 9, , ,2 20,7 11,6 0, ,0 70,9 7,5 6,6 1,24 20,7 2,1 8,7 10,8 48,3 Regional average 9, , ,8 18,9 10,7 0, ,9 66,6 7,6 6,5 0,80 19,5 4,3 7,1 10,5 47,2 France FR 9, , ,1 23,1 13,3 0, ,7 72,7 9,4 6,5 1,43 22,3 2,6 6,9 12,3 49,0 Relative to EU Île De France FR1 11 9, , ,4 35,5 19,4 1, ,1 82,7 10,9 5,8 2,34 29,8 0,2 8,1 13,4 55,9 Champagne-Ardenne FR21 2 8, , ,0 16,1 9,6 0, ,7 60,8 9,7 4,9 0,55 18,5 9,5 6,3 12,3 47,6 Picardie FR , , ,3 16,4 9,9 0, ,5 64,2 8,2 7,7 1,39 18,9 4,3 5,8 13,3 48,3 Haute-Normandie FR23 4 9, , ,0 16,0 10,4 0, ,6 60,2 7,3 12,0 1,14 21,1 2,1 6,5 13,0 47,6 Centre FR24 2 6, , ,9 19,4 11,6 0, ,9 65,4 11,5 6,7 1,13 21,9 3,7 7,3 11,9 49,0 Basse-Normandie FR25 2 7, , ,3 14,3 8,2 0, ,8 65,8 6,0 6,8 0,64 18,6 4,4 5,2 12,3 46,9 Bourgogne FR26 2 7, , ,4 18,2 11,2 0, ,5 67,9 8,2 7,4 0,64 19,2 5,5 7,2 11,3 47,8 Nord - Pas-De-Calais FR3 2 12, , ,0 19,0 12,1 0, ,4 67,5 8,0 5,5 0,30 19,8 2,2 6,3 13,6 42,3 Lorraine FR41 2 9, , ,9 17,1 9,5 0, ,6 67,2 10,0 9,0 0,52 18,2 2,2 6,6 12,1 48,6 Alsace FR42 2 7, , ,7 21,5 12,3 0, ,0 65,9 7,9 11,6 0,83 22,1 2,1 8,7 12,6 52,0 Franche-Comté FR43 4 7, , ,1 18,6 11,1 0, ,7 59,7 9,8 15,6 1,74 21,4 2,6 8,1 12,4 51,3 Pays de la Loire FR51 2 8, , ,9 19,1 11,3 0, ,0 64,4 7,9 6,9 0,57 19,7 4,5 6,7 12,5 51,4 Bretagne FR52 2 6, , ,5 21,7 12,1 0, ,8 69,4 10,4 4,2 1,11 21,3 5,8 8,1 11,9 48,5 Poitou-Charentes FR53 2 7, , ,7 18,4 11,4 0, ,5 68,2 7,8 7,3 0,47 18,9 5,3 6,6 10,9 47,8 Aquitaine FR61 2 9, , ,3 22,1 12,1 0, ,0 71,4 10,4 5,1 1,16 19,7 5,6 7,0 10,9 46,0 Midi-Pyrénées FR62 3 8, , ,5 24,6 14,0 1, ,3 70,9 12,0 5,0 2,29 20,7 3,8 6,9 11,0 48,8 Limousin FR63 2 7, , ,4 17,2 10,3 0, ,3 70,4 8,0 4,2 0,46 18,9 4,2 5,3 9,4 46,6 Rhône-Alpes FR , , ,6 22,8 13,4 0, ,1 67,4 6,7 7,2 1,90 23,7 1,4 7,3 12,8 51,3 Auvergne FR72 2 7, , ,8 17,7 10,8 0, ,0 65,3 8,2 6,0 1,98 17,7 3,7 7,2 10,4 46,1 Languedoc-Roussillon FR , , ,9 24,5 14,5 1, ,6 76,9 8,5 2,3 0,65 21,2 4,4 6,6 11,3 43,0 Provence-Alpes-Côte d'azfr , , ,8 23,4 12,8 0, ,1 78,6 11,9 4,7 0,16 14,3 2,3 5,8 11,7 43,7 Corse FR , , ,2 12,4 0, ,1 83,5 19,5 0,16 14,3 2,3 5,9 10,8 26,3 Appendix B Statistical tables and regional scorecards B.1 Overall quantitative analysis per region Clus ter Economic performance Public knowledge Urban services Private technology GDP High Knowle Value Value High Value Unemp loymen t GDP per capita per capita growth Produc tivitity tech service s Higher educati on dge worker s Public R&D Popula tion density added industr y added service s Govern ment sector tech manufa cturing Busine ss R&D S&T worker s added agricult ure Learning families Lifelon g learnin g Youth Female activity rate 591 France doc

65 B.2 Regional Scorecards Ile de France (FR1) : Science and services centre Île De France (FR1) Unemployment (inverse) GDP per capita GDP per capita grow th Productivitity High tech services Higher education Know ledge w orkers Public R&D Population density % Value added industry % Value added services Government sector High tech manufacturing Business R&D S&T w orkers % Value added agriculture Lifelong learning Youth Female activity rate Score relative to: France Cluster (Science & Service Centre) 591 France doc

66 Champagne-Ardennes (FR21) : Central Techno Champagne-Ardenne (FR21) Unemployment (inverse) GDP per capita GDP per capita grow th Productivitity High tech services Higher education Know ledge w orkers Public R&D Population density % Value added industry % Value added services Government sector High tech manufacturing Business R&D S&T w orkers % Value added agriculture Lifelong learning Youth Female activity rate Score relative to: France Cluster (Central Techno) 591 France doc

67 Picardie (FR21): Central techno Picardie(FR2) Unemployment (inverse) GDP per capita GDP per capita grow th Productivitity High tech services Higher education Know ledge w orkers Public R&D Population density % Value added industry % Value added services Government sector High tech manufacturing Business R&D S&T w orkers % Value added agriculture Lifelong learning Youth Female activity rate Score relative to: France Cluster (Central Techno) 591 France doc

68 Haute Normandie (FR23) : High techno Haute-Normandie (FR23) Unemployment (inverse) GDP per capita GDP per capita grow th Productivitity High tech services Higher education Know ledge w orkers Public R&D Population density % Value added industry % Value added services Government sector High tech manufacturing Business R&D S&T w orkers % Value added agriculture Lifelong learning Youth Female activity rate Score relative to: France Cluster (High Techno) 591 France doc

69 Centre: Central Techno (24) Centre (FR24) Unemployment (inverse) GDP per capita GDP per capita grow th Productivitity High tech services Higher education Know ledge w orkers Public R&D Population density % Value added industry % Value added services Government sector High tech manufacturing Business R&D S&T w orkers % Value added agriculture Lifelong learning Youth Female activity rate Score relative to: France Cluster (Central Techno) 591 France doc

70 Basse Normandie (FR25) Basse-Normandie (FR25) Unemployment (inverse) GDP per capita GDP per capita grow th Productivitity High tech services Higher education Know ledge w orkers Public R&D Population density % Value added industry % Value added services Government sector High tech manufacturing Business R&D S&T w orkers % Value added agriculture Lifelong learning Youth Female activity rate Score relative to: France Cluster (Central Techno) 591 France doc

71 Bourgogne (FR 26) Bourgogne (FR26) Unemployment (inverse) GDP per capita GDP per capita grow th Productivitity High tech services Higher education Know ledge w orkers Public R&D Population density % Value added industry % Value added services Government sector High tech manufacturing Business R&D S&T w orkers % Value added agriculture Lifelong learning Youth Female activity rate Score relative to: France Cluster (Central Techno) 591 France doc

72 Nord-Pas de Calais (FR3): Central techno Nord - Pas-De-Calais (FR3) Unemployment (inverse) GDP per capita GDP per capita grow th Productivitity High tech services Higher education Know ledge w orkers Public R&D Population density % Value added industry % Value added services Government sector High tech manufacturing Business R&D S&T w orkers % Value added agriculture Lifelong learning Youth Female activity rate Score relative to: France Cluster (Central Techno) 591 France doc

73 Lorraine (FR41): Central techno Lorraine (FR41) Unemployment (inverse) GDP per capita GDP per capita grow th Productivitity High tech services Higher education Know ledge w orkers Public R&D Population density % Value added industry % Value added services Government sector High tech manufacturing Business R&D S&T w orkers % Value added agriculture Lifelong learning Youth Female activity rate Score relative to: France Cluster (Central Techno) 591 France doc

74 Alsace (FR42): Central techno Alsace (FR42) Unemployment (inverse) GDP per capita GDP per capita grow th Productivitity High tech services Higher education Know ledge w orkers Public R&D Population density % Value added industry % Value added services Government sector High tech manufacturing Business R&D S&T w orkers % Value added agriculture Lifelong learning Youth Female activity rate Score relative to: France Cluster (Central Techno) 591 France doc

75 Franche-Comté (FR43): High Techno Franche-Comté (FR43) Unemployment (inverse) GDP per capita GDP per capita grow th Productivitity High tech services Higher education Know ledge w orkers Public R&D Population density % Value added industry % Value added services Government sector High tech manufacturing Business R&D S&T w orkers % Value added agriculture Lifelong learning Youth Female activity rate Score relative to: France Cluster (High Techno) 591 France doc

76 Pays de la Loire (FR51): Central techno Pays de la Loire (FR51) Unemployment (inverse) GDP per capita GDP per capita grow th Productivitity High tech services Higher education Know ledge w orkers Public R&D Population density % Value added industry % Value added services Government sector High tech manufacturing Business R&D S&T w orkers % Value added agriculture Lifelong learning Youth Female activity rate Score relative to: France Cluster (Central Techno) 591 France doc

77 Bretagne (FR52): Central techno Bretagne (FR52) Unemployment (inverse) GDP per capita GDP per capita grow th Productivitity High tech services Higher education Know ledge w orkers Public R&D Population density % Value added industry % Value added services Government sector High tech manufacturing Business R&D S&T w orkers % Value added agriculture Lifelong learning Youth Female activity rate Score relative to: France Cluster (Central Techno) 591 France doc

78 Poitou-Charentes (FR3); Central techno Poitou-Charentes (FR53) Unemployment (inverse) GDP per capita GDP per capita grow th Productivitity High tech services Higher education Know ledge w orkers Public R&D Population density % Value added industry % Value added services Government sector High tech manufacturing Business R&D S&T w orkers % Value added agriculture Lifelong learning Youth Female activity rate Score relative to: France Cluster (Central Techno) 591 France doc

79 Aquitaine (FR61): Central techno Aquitaine (FR61) Unemployment (inverse) GDP per capita GDP per capita grow th Productivitity High tech services Higher education Know ledge w orkers Public R&D Population density % Value added industry % Value added services Government sector High tech manufacturing Business R&D S&T w orkers % Value added agriculture Lifelong learning Youth Female activity rate Score relative to: France Cluster (Central Techno) 591 France doc

80 Midi Pyrénées (FR62): Local Science and Services Midi-Pyrénées (FR62) Unemployment (inverse) GDP per capita GDP per capita grow th Productivitity High tech services Higher education Know ledge w orkers Public R&D Population density % Value added industry % Value added services Government sector High tech manufacturing Business R&D S&T w orkers % Value added agriculture Lifelong learning Youth Female activity rate Score relative to: France Cluster (Local Science & Services) 591 France doc

81 Limousin (FR63): Central techno Limousin (FR63) Unemployment (inverse) GDP per capita GDP per capita grow th Productivitity High tech services Higher education Know ledge w orkers Public R&D Population density % Value added industry % Value added services Government sector High tech manufacturing Business R&D S&T w orkers % Value added agriculture Lifelong learning Youth Female activity rate Score relative to: France Cluster (Central Techno) 591 France doc

82 Rhône-Alpes (FR71): Central techno Rhône-Alpes (FR71) Unemployment (inverse) GDP per capita GDP per capita grow th Productivitity High tech services Higher education Know ledge w orkers Public R&D Population density % Value added industry % Value added services Government sector High tech manufacturing Business R&D S&T w orkers % Value added agriculture Lifelong learning Youth Female activity rate Score relative to: France Cluster (Central Techno) 591 France doc

83 Auvergne (FR72): Central techno Auvergne (FR72) Unemployment (inverse) GDP per capita GDP per capita grow th Productivitity High tech services Higher education Know ledge w orkers Public R&D Population density % Value added industry % Value added services Government sector High tech manufacturing Business R&D S&T w orkers % Value added agriculture Lifelong learning Youth Female activity rate Score relative to: France Cluster (Central Techno) 591 France doc

84 Languedoc-Roussillon (FR81): Local Science and Services Languedoc-Roussillon (FR81) Unemployment (inverse) GDP per capita GDP per capita grow th Productivitity High tech services Higher education Know ledge w orkers Public R&D Population density % Value added industry % Value added services Government sector High tech manufacturing Business R&D S&T w orkers % Value added agriculture Lifelong learning Youth Female activity rate Score relative to: France Cluster (Local Science & Services) 591 France doc

85 Provence Alpes Côte d'azur (FR82): Local Science and Services Provence-Alpes-Côte d'azur (FR82) Unemployment (inverse) GDP per capita GDP per capita grow th Productivitity High tech services Higher education Know ledge w orkers Public R&D Population density % Value added industry % Value added services Government sector High tech manufacturing Business R&D S&T w orkers % Value added agriculture Lifelong learning Youth Female activity rate Score relative to: France Cluster (Local Science & Services) 591 France doc

86 Corse (FR83): Central techno Corse (FR83) Unemployment (inverse) GDP per capita GDP per capita grow th Productivitity High tech services Higher education Know ledge w orkers Public R&D Population density % Value added industry % Value added services Government sector High tech manufacturing Business R&D 11 S&T w orkers % Value added agriculture Lifelong learning Youth Female activity rate Score relative to: France Cluster () 591 France doc

87 Appendix C Categories used for policy-mix analysis C.1 Classification of policy areas Policy area Improving governance capacities for innovation and knowledge policies Innovation friendly environment; Knowledge transfer and technology diffusion to enterprises Innovation poles and clusters Support to creation and growth of innovative enterprises Boosting applied research and product development Short description Technical assistance type funding used by public authorities, regional agencies and public-private partnerships in developing and improving policies and strategies in support of innovation and knowledge. This could include past ERDF innovative action programmes as well as support for instance for regional foresight, etc. This category covers a range of actions which seek to improve the overall environment in which enterprises innovate, and notably three sub groups: - innovation financing (in terms of establishing financial engineering schemes, etc.); - regulatory improvements and innovative approaches to public services and procurement (this category could notably capture certain e- government investments related to provision of services to enterprises) ; - Developing human capital for the knowledge economy. This category will be limited to projects in higher education aimed at developing industry orientated courses and post-graduate courses; training of researchers in enterprises or research centres 73 ; Direct or indirect support for knowledge and technology transfer: - direct support: aid scheme for utilising technology-related services or for implementing technology transfer projects, notably environmentally friendly technologies and ITC; - indirect support: delivered through funding of infrastructure and services of technology parks, innovation centres, university liaison and transfer offices, etc. Direct or indirect support for creation of poles (involving public and nonprofit organisations as well as enterprises) and clusters of companies - direct support: funding for enterprise level cluster activities, etc. - indirect support through funding for regrouping R&D infrastructure in poles, infrastructure for clusters, etc. Direct or indirect support for creation and growth of innovative firms: - direct support: specific financial schemes for spin-offs and innovative start-ups, grants to SMEs related to improving innovation management, marketing, industrial design, etc.; - indirect support through funding of incubators, training related to entrepreneurship, etc. Funding of Pre-competitive development and Industrial research projects and related infrastructure. Policy instruments include: - aid schemes for single beneficiary or groups of beneficiaries (including IPR protection and exploitation); - research infrastructures for non-profit/public organisations and higher education sector directly related to universities. 73 This is part of the wider area of in-house training, but in the present study only the interventions targeted to researchers or research functions will be analysed. 591 France doc

88 C.2 Classification of Beneficiaries Beneficiaries Public sectors Private sectors Networks Short description - Universities - National research institutions and other national and local public bodies (innovation agencies, BIC, Chambers of Commerce, etc..) - Public companies - Enterprises - Private research centres - cooperation between research, universities and businesses - cooperation between businesses (clusters of SMEs) - other forms of cooperation among different actors C.3 Classification of instruments Instruments Infrastructures and facilities Aid schemes Education and training Short description Building and equipment for laboratories or facilities for university or research centres, Telecommunication infrastructures, Building and equipment for incubators and parks for innovative enterprises Grants and loans for RTDI projects Innovative finance (venture capital, equity finance, special bonds, etc.) for innovative enterprises Graduate and post-graduate University courses Training of researchers 591 France doc

89 Appendix D Financial and policy measure tables D.1 Additional financial tables Comparison between SF-funded RTDI interventions and DIRD 2003 Régions DIRD 2003 (MEUR) SF-funded RTDI interventions (MEUR) % SFfunded/DIRD Ile de France ,83 0,03% Rhône-Alpes ,198 0,44% Midi-Pyrénées ,185 1,02% PACA+Corse ,457 1,73% Aquitaine ,66 3,72% Bretagne ,152 1,75% Languedoc-Roussillon ,356 6,11% Centre 869 4,295 0,49% Pays de Loire ,931 2,50% Alsace 692 4,146 0,60% Auvergne ,04 2,62% Haute-Normandie ,312 2,55% Nord-Pas-de-Calais ,923 17,40% Lorraine 547 2,254 0,41% Franche-Comté ,504 1,98% Picardie ,215 3,02% Bourgogne 359 2,487 0,69% Poitou-Charentes ,553 11,00% Basse-Normandie ,331 10,18% Champagne-Ardenne 238 8,869 3,73% Limousin 124 9,561 7,71% France métropolitaine ,259 1,44% Outermost regions ,262 4,73% Total ,521 1,60% 591 France doc

90 D1.1 RTDI plus business (innovation technology) support Categories 181 to 184 plus : 152 Environment-friendly technologies, clean and economical energy technologies 153 Business organisation advisory service (including internationalisation, exporting and environmental management, purchase of technology) 155 Financial engineering 162 Environment-friendly technologies, clean and economical energy technologies 163 Enterprise advisory service (information, business planning, consultancy services, marketing, management, design, internationalisation, exporting, environmental management, purchase of technology) 164 Shared business services (business estates, incubator units, stimulation, promotional services, networking, conferences, trade fairs) 165 Financial engineering 591 France doc

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92 D1.2 Broad innovation and knowledge economy funding This third calculation adds RTDI plus business (innovation & technology) support plus information society. As D.1.1 plus: 322 Information and Communication Technology (including security and safe transmission measures) 324 Services and applications for SMEs (electronic commerce and transactions, education and training, networking) 591 France doc

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