MANAGEMENT & INNOVATION:

NATIONAL SYSTEMS OF INNOVATION: ITALY

Arnaud COUESNON

Richard KILLIAM

Martin LUIDJI

GM&EB: 2008-2009

CONTEXT IN ITALY

About Italy (1)

Population of 59 Million people Member of Europe since the beginning –

Currency: € The world’s sixth largest economy

About Italy (2)

Very Catholic country – strange relationship with science

Lack of investment in Education. 5.5% of Italian students graduate with degrees in science or engineering

Italy’s greatest weaknesses in innovation are government investments in R&D, education and skill levels, high technology patents innovation financing

Italy’s problems

• Italy’s share in world trade has declined.• Still a low productivity growth.• Widening gap in GDP per capita with the best

OECD performers.• Weak investment in R&D may reflect the

specialisation of firms in traditional sectors and the prevalence of small family businesses.

Possible solutions

Restoring economic dynamism will requireaddressing various challenges: _ Improving the environment for

innovation is a crucial part of the solution.

_ The key policy challenges for the immediate future concern human capital and innovation by firms.

Approved technological districts

Campania : Polymer and composite materials Emilia-Romagna : Advanced mechanics Friuli-Venezia-Giulia : Molecular biomedicine Lazio : Aerospace Liguria : Robotics and intelligent systems Lombardia : Biotechnologies Piemonte : Wireless technologies Sicilia : Micro and nano -systems Veneto : Nanotechnologies

INNOVATION IN ITALY

R&D in Italy

Spending on R&D is below the OECD and EU average

In 2005, R&D intensity (gross domestic expenditure on R&D [GERD] as a percentage of GDP) was 1.1%, compared (2.25% for the OECD area and over 1.7% for the EU).

The private sector financed only 40% of R&D and performed 50% (compared to OECD averages of 63 and 68%, respectively).

National innovative capacity index and subindexes

Indicateurs de l'effort de recherche des principaux pays de l'OCDE

Comparaison internationale de la DIRD en 2005

Taux de croissance de la DIRD dans la zone OCDE, dans la Fédération de Russie et en Chine

THE ITALIAN GOVERNANCE INNOVATION SYSTEM

Staff devoted to S&T

At national level : Ministry of Economy and finance MIUR Ministry of Productive Activities Ministry of innovation and technology

At Regional Level Regional R&D and Innovation department Regional innovation agencies

Share of public financing

Industries45%

Government55%

2002 GOVERNMENT RESEARCH AND TECHNOLOGY BUDGET : 3.812 B€

Main actors of the Research Funding in Million €

2493

522 450

130 217

0

500

1000

1500

2000

2500

3000

Miur Min. for Health Min. forProductionActivities

Min. for Defense Other ministry

Source: CNR – CERIS Istituto di Ricerca sull’Impresa e lo Sviluppo – Via dei Taurini, 19 ROMA

Start-ups

High Investment

Low Investment

Future trajectories

1. Refocusing R&D in order to make it demand-driven and client oriented.

2. A further reform of the existing policy instruments mix in favor of R&D; To render the policy making process more effective towards for real growth of the Italian economic environment

3. A more selective and rewarding model to allow high-quality projects financing

4. Innovation incentive schemes promoted by government media organizations should be advertised more widely (ex : www.governo.it)

5. An Innovation coordination entity (MIUR-MAP) should improve its role from direct research funding to facilitator of R&D in a more generic sense

6. Human resource measures should focus more on “capacity-building” rather than “training” in the traditional sense.

7. More balanced and tailor-made policy making process at local level from the Central State to the Regional Policy entities

EXAMPLES OF THE MOST INNOVATIVE COMPANIES IN ITALY

Fiat Group’s Innovation & Technology R&D’s investment: 1.6 billion euros, or around

3.2% of net revenues of Industrial Activities

Fiat has been « innovative from the beginning »: FIRE (Fully Integrated Robotized Engine), Common

Rail injection diesel powerplants, Multijet, TetraFuel system, and more.

Now, Fiat Group’s Innovation and Technology is: Centro Ricerche Fiat & Elasis divisions.

Fiat Group – Centro Ricerche Fiat Group’s « major source of expertise in

innovation » 42 new patent applications in 2007

Total patents 2,200, 700 pending. Activities:

Powertrain Research and Development Advanced Technology for Mobility and Safety (GPS-

type technologies, inter-vehicle communication) Vehicles & Advanced Manufacturing and Materials

(body architecture innovations) Cooperation with regional institutions.

Fiat Powertrain Technologies Fiat Powertrain Technologies constructs engines for cars

and for other uses; gasoline, diesel, and a focus on alternative energies.

« annual output of around 3.1 million engines and 2.5 million gear boxes and axels »

Fiat Powertrain « will invest $32 million to build its first Chinese research and development center » in Shanghai.

Powertrain already has 12 R&D centers throughout the world.

« anti-pollution energies » a priority Fiat also investing in bigger R&D centres for India

Fiat Group - Elasis

Highly specialized research « in the framework of development programs for Southern Italy »

Pomigliano d’Arco and Lecce (both in Southern Italy), 800 employees

Cooperation with universities, chambers of commerce. See map of technological regions above—Fiat spreads its R&D over the country’s regions rather than concentrating it.

Fiat Group - Elasis

Innovative methodologies: More academic, computer-oriented in nature. Product modelling, virtual simulation of

performance, ergonomics analysis. Vehicle research: development of new cars. Electronics systems research/ ‘Fire engines’

Finmeccanica

Finmeccanica S.p.A. is an Italian conglomerate, 30,2% state-financed

Finmeccanica is the second largest industrial group and the largest of the hi-tech industrial groups based in Italy. It works in the fields of defense, aerospace, security, automation, transportand energy.

The company has offices in over 100 countries.

FinmeccanicaInnovation (1)

Last year: The Group invested 1.6 billion Euros in R&D, equaling 16% of its

revenue. It boasts 9,100 employees working on design and engineering and

3,100 skilled staff involved in Research and Development. 

Finmeccanica actively cooperates with 19 Italian research institutes, 29 foreign research

institutes and universities, 41 Italian universities as well as national and international

institutions. 

FinmeccanicaInnovation (2)

A fundamental element in fostering innovation routes is provided by the Mindsh@re project: a process to

enhance common technological capital, designed with the aim of connecting people in a knowledge network

which multiplies the possibility of generating new ideas, products and talents, and is the engine for a real

innovation of value through "technological communities", a transversal organisational model focusing and

sharing research on subjects considered to be of top industrial priority. 

The Group also dedicates considerable energy to intelligence activities which encourage innovation, fuelled by

continuous attention to markets, with a view to developing a network that involves clients and partners in order to

effectively manage the value chain.  

The awarding of the Best Innovator 2005 prize by the research company AT Kerney and the importance

acquired by Premio Innovazione (Innovation Award), combining ideas from each company of the Group, in its

three years since inception, clearly confirm the absolute importance of a cultural element that is inborn in

Finmeccanica and in its industrial essence. 

Eni history

The history of Eni is a long one and is closely related to the development of Italy.

The board of Eni manages a company operating in around 70 countries, with more than 75,000 employees.

Eni is an integrated energy company, committed to growth through the exploration, production, transport, transformation & marketing of oil ans natural gas.

R&D in Eni (1)

• Eni operates in competitive sectors and manages businesses based on a range of technological platforms. But generating innovation, also means conducting research, development and demonstration activities in line with the company's corporate strategies and technological plans.

• With longer-term objectives, the company also carries out research for the development of radical innovation in the field of hydrocarbons, alternative energy and the environment.

R&D in Eni (2)

In this context, Eni's research staff is actively engaged  at an international level at leading laboratories and are involved in projects with a high level of innovation and potential applicability.

Intellectual resources, instruments and avant-garde structures generate, and transfer to an industrial scale, the results of innovation for the generation of maximum value.

Main technological areas of Eni's research activities

- Upstream Oil & Gas- Midstream Oil & Gas- Downstream Gas- Downstream oil: processes- Downstream oil: products- Power generation and renewables- Environmental sustainability and carbon management

Sources http://www.oecd.org/

Ranking National Innovative Capacity: Findings from the National Innovative Capacity Index, MICHAEL E. PORTER, Harvard University, SCOTT STERN, Northwestern University and National Bureau of Economic Research

Economic reform in Italy: how to make it work?, Linda Lanzillotta, Minister for Regional Affairs and Local Communities, Centre for European Reform, London, Tuesday, 13th March 2007

Recherche et développement ] Repères et références statistiques - édition 2008 ]

http://www.finmeccanica.it/Holding/EN//index.sdo

http://www.edmunds.com/insideline/do/News/articleId=123820, www.fptpowertrain.com

www.Fiatgroup.Com

www.eni.it

www.lesechos.fr/