Linking business to Linking business to knowledge: new challengesknowledge: new challenges

Dr Kastytis Gečas,

Lithuanian Innovation Centre

Innovation Policies: why innovationInnovation Policies: why innovation

Jump to a knowledge-driven economy– national consensus

Innovation is essential for business development– a key component in enterprise policy– innovation strategy vs. growth strategy

Towards support for innovation– financial support/grant schemes for SMEs– advisory services and networking

If the GDP volume in Lithuania grows in the current speed, it will overtake the average EU level only by

the year 2040

InnovationInnovation is a is a business processbusiness process connected with exploiting connected with exploiting market market opportunitiesopportunities for new products, services and business processes. for new products, services and business processes.

EC Communication COM(2005) 121 EC Communication COM(2005) 121 finalfinal, 06/04/2005, Proposal , 06/04/2005, Proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL establishing a Competitiveness and Innovation Framework Programme establishing a Competitiveness and Innovation Framework Programme

(2007-2013)(2007-2013)

If science is the transformation ofIf science is the transformation of moneymoney into into knowledgeknowledge,, innovation innovation is is the transformation ofthe transformation of knowledgeknowledge intointo moneymoney

EUREKAEUREKA

Innovation Innovation is related to ais related to a process process connecting connecting knowledgeknowledge and technologyand technology with the exploitation ofwith the exploitation of market opportunitiesmarket opportunities forfor new or improved new or improved products,products, services and business processesservices and business processes compared to those already compared to those already available on the common marketavailable on the common market,, and encompassing a certainand encompassing a certain degree of degree of risk.risk.

Community Framework for State Aid for Research and Development and Innovation, 2006

Structure of Lithuanian industryStructure of Lithuanian industry

Source: Science and technology, Eurostat/ 2005

IInnovative companies and nnovative companies and turnoverturnover (23.4% of total number) (23.4% of total number)

23,4

56,9

18,2

34,5 36,2

47,9

60,6

75,2

0

10

20

30

40

50

60

70

80

In total 10-49 50-249 250+

% of total number ofenterprises

% of total turnover

Source: Innovation Activity Development, Dept. of Statistics of Lithuania, 2006

Source: European Innovation Scoreboard’ 2004

Knowledge-based competitiveness. Two Knowledge-based competitiveness. Two complementary paradigmscomplementary paradigms

To increase (innovation) supply = Technology push – Links between science and industry: bridging– Exploitation of research results, (technology)

absorptive capacity,

– Technological innovation (and may be non-technological innovation)

– Technology transfer = exploitation of research results

– Support services = research - exploitation-oriented (industry liaison, technology transfer, technology information, etc.)

– Science and technology parks, spin-offs– Risk capital

– Global competitiveness– Prioritty-based policies = high-tech business

development (e.g. bio, IT, etc.)– Financial support to pioritised sectors

– Linear model (creation, tranfer support, companies)

To increaase innovation demand = Market pull– Company as a focal point: higher added value by

innovation– Innovation diffusion, exploitation of knowledge,

innovation capacity, innovation culture

– Non-technological innovation (and may be technological innovation)

– Technology transfer = technology partnerships

– Support services = specialised infrastructure (to access knowledge, partners, finances, …)

– Clusters, platforms, and other network-type activities, transnational networks

– Public and private consultancy services

– “Innovation everywhere” as a means for competitiveness

– Financial support as (innovation) risk decreasing tool (industrial R&D, innovation, networking, …)

– Non-linerar, multifacet model (partnerships, diffusion, innovation transfer, innovation management and content, etc.)

RR&&D-based D-based innovation innovation vs. vs. iinnovation diffusionnnovation diffusion

Source: European Innovation Scoreboard’ 2003

VV

IInnovative companies and nnovative companies and turnoverturnover (23.4% of total number) (23.4% of total number)

23,4

56,9

18,2

34,5 36,2

47,9

60,6

75,2

0

10

20

30

40

50

60

70

80

In total 10-49 50-249 250+

% of total number ofenterprises

% of total turnover

Source: Innovation Activity Development, Dept. of Statistics of Lithuania, 2006

Non-technological innovationNon-technological innovation

22,2%

57,7%

11,4% 12,3%

34,1%

5,6%

25,9%

67,8%

13,1%

0%10%

20%

30%

40%

50%

60%

70%

OrganisationalInnovation

MarketingInnovation

Organisational ormarketinginnovation

Total enterprises Innovative enterprises Non-innovative enterprises

Source: Innovation Development, Dept. Statistics Lithuania, 2006

Innovation cooperation Innovation cooperation partnerspartners

42%

32%

21%

18%

14%

11%

9%

0% 10% 20% 30% 40% 50%

Suppliers

Clients

Consultancies, private research

Competitors

Companies in group

Universities

R&D institutes

Source: Innovation Activity Development, Dept. of Statistics of Lithuania, 2006

Innovation SourcesInnovation Sources

Source: Innovation Activity Development, Dept. of Statistics of Lithuania, 2006

12,3

17,3

24,9

28,7

36,5

42,8

63,9

55,0

0 20 40 60 80

Public research institutes

Universities

Technolgy companies

Competitors

Other companies

Consultants

Clients

Suppliers

Corporate innovation Corporate innovation financingfinancing: : soft vs.hardsoft vs.hard

Source: Innovation Activity Development, Dept. of Statistics of Lithuania, 2006

18,1%

2,6%

77,0%

2,3%

Intramural R&DExtramural R&DEquipmentAcquisition of knowledge

InnovationInnovation partnershipspartnerships

Lithuania; 57,1

Europe; 29,4

Other countries;

13,5

Obstacles to innovationObstacles to innovation

0%

5%

10%

15%

20%

25%

30%

Industry Servises In total

Lack of own financialresourcesToo high level of costs

Market is dominated by well-known companiesLack of external financialresourcesLow demand for new products

Lack of qualified personel

Difficulties in finding partners

Lack of market information

Lack of technology information

Source: Innovation Development, Dept. Statistics Lithuania, 2006

Financial risk HR riskMarket risk

Decreasing risks: fostering Decreasing risks: fostering inovainovation in businesstion in business

State policies – favourable conditions– Programme for Innovation in Business (2000, 2003)– National Lisbon Strategy

Public Support (national, EU Structural Funds)Linking business to knowledge

– Specialised infrastructure and services– Domestic and international networking

Innovation support services at Innovation support services at universitiesuniversities

Research as knowledge production– Labs as knowledge centres – intellectual assets– Knowledge transfer centres (industry liaison, technology information and technology

transfer, management techniques, IP management)– Professionalism, competence and skills– Preconditions

Favourable Institutional set-up Intellectual property set-up and proper management Focusing on market (industry and services) demands

Research as service – Contractual R&D: towards instu – Consultancy: technological/non-technological innovation capacity building– Precondition

Institutional set-up Focusing on market needs

Research as networking activity– Acting for ( on behalf of) companies internationally, e.g. FP projects, partnering, etc.– Facilitators?

…

Dr Dr Kastytis GeKastytis Gečas, čas, Director, Lithuanian Innovation Centre,Director, Lithuanian Innovation Centre,

kk..gecasgecas@lic.lt@lic.ltwww.lic.ltwww.lic.lt, www.inovacijos.lt, www.inovacijos.lt

……innovation does not waitinnovation does not wait