Multi-layered policy interventions and the future of national policies

P. Larédo

ENPC & University of Manchester

Madrid March 26, 2007

Contents

PART 1: A CHANGING ENVIRONMENT• The rise of a European actor in Science, technology and

innovation• Devolution and decentralisation in European countries:

the rise of Regional research & innovation policies

PART 2: BEHIND THE LISBON AGENDA• Knowledge dynamics…• … drive to a de facto differentiation…• And a strong “centring” of national intervention

A broad ranging European intervention

• Large instruments: CERN, ESO, ESRF, JET… and now ITER

• The space policy: Ariane launchers, research satellites & programmes, GPS (via Galileo), Meteorology

• Large industrial “objects”: Airbus but also semi conductors (through the Eureka initiative), large wind mills … without forgetting the Europeanisation of Defence firms

• Framework conditions with norms, IPR (but the failure of the European patent) & directives (telecoms, energy…)

• And the Framework programme with its focus on new technologies (NBIC)

The strength of inter-governmental

arrangements • Each scientific instrument has its own structure and

its specific rules and functioning• Most “industrial” gatherings linked to ad-hoc

interventions (airbus, defence)• EUREKA as a symbol of this approach: bottom-up

based, only a common label, separate public funding (approach and implementation of it)

• A new fashion to support it: benchmarking and the circulation of “good practice”

Modest emergences of federal approaches

• ESA as a front runner (with its funding linked to the GDP of nations, but this compulsory part is marginal in total budget, and there are processes to insure “rates of return”)

• Limited success of European-wide structures- the failure of the Atom-based JRC- EMBL (though successful) is a marginal player in biology- the failure of the European Science Foundation (built by research agencies and institutions)

Landmarks in EC & EU involvement (1)

• The 1957 treaty: Nothing on R&D, but R&D is present in the Coal & Steel treaty (1952) & in the EURATOM treaty (1957)

• 1968 the European Commission is created. First initiatives launched in 1974 following the energy crisis

• 1979-1982 intense debate on IT as the answer to the growth challenge, failure of bilateral industrial approaches --> EC

commissioner Davignon “creates” the ESPRIT new model - stakeholder consultation “the table ronde”- research consortia (multiple countries, multiple types of actors)- public funding through “cost-shared” projects

• ESPRIT impact: R&D included in EU treaties- Single Act (1987) and “the S&T bases of European industry”- Maastricht (1993) and S&T to support European policies- And the 5-year framework programme as the implementation arm- Evaluation as a mandatory requirement

• FP: from fast growth to stabilisation- FP1 to FP3 (1984-1994) fast yearly increase of expenditure (from 1 to 3 billon ecu /year)- FP4 to FP6: “slow” yearly growth (from 3 to 4.5 billion euros)- FP7 increase (should arrive to 10 billion euro in 2012)- progressive changes in overall portfolio

Landmarks in EC & EU involvement (2)

FP1 - FP7 evolutions

• Thematic priorities (64% in FP7)- Energy: from 50% in FP1 to 5%+ in FP7, and environment moved from 8 to 4%…- ICT peaked at 42% in FP2 to 18% in FP7- Health and biotech reached in FP5 a plateau of 16%- Industrial technologies have moved between 15 & 20% through a large reshaping. In FP7 cut in 3: 7% for nano & materials, 8% for transport and 9% for space (appeared in FP5) & security (new in FP7)

• Structural dimensions (36% in FP7)- Human Capital (mobility) reached its plateau in FP3: 9%, complemented since FP5 by Infrastructures (4%) and since FP7 by basic research (ERC, 15%)- Others include the JRC (3%), SME support (2.5%), international cooperation…

Landmarks in EC & EU involvement (3)

• 2000-2002 Lisbon Agenda, Barcelona Target and the European Research Area- target: the most dynamic knowledge based society- objective: 3% of GDP for R&D in 2010, 2/3rds by firms and 1/3rd by public sector

• FP only one tool - objectives: overcome fragmentation & boost excellence- new instruments: Networks of excellence, Integrated Projects, Joint Technology Initiatives, European Research Council

• Re-launching coordination of policies- a lasting failure- new approaches: OMC (Open method of coordination), ERA Nets (between national operators), joint EC-nation funding (article 169…), Technology platforms (shared visions & agendas)

Devolution, decentralisation

• Since the 1980s, a shift in most “large” EU countries, Spain, France, UK (for regions), Italy (for “districts”), bridging with the German situation

• Though not central, quite soon addressed issues linked with technology, science and higher education

• Convergences and differences- Strong convergence on support to innovation in SME - Decentralisation of Universities & University funding in Spain and UK (not in France) vs recent involvement of German Federal Government in “excellent” universities

• Europe as a key driver: Structural funds, RITTS/RIS initiatives, Europe of regions

Regional Research & Innovation policies

• The “proximity discourse”: industrial districts & clusters, now creative cities

• The ambiguity of Regional systems of innovation: economic vs political regions (having at least a partial responsibility on socio-economic affairs)

• Two opposite references: successful country regions (Finland) or successful places (Silicon Valley, Road 128, Cambridge…)

• One de facto temptation of analysts:- regions as autonomous islands- regional policies as “national policies writ small” (though limited access to “framework conditions”)- success stories focus only on “high tech” regions

How to take hold of regional diversity: 4 dimensions

• “institutional”: size, governance capabilities, policy path dependency

• “economic”: communication infrastructures, natural endowment, activity/sector mix

• Regional knowledge base: higher education, other public sector research, firm capabilities

• Connectivity: collaborative patterns, layers of matching, intermediating structures

Institutional aspects

• Size: from city regions or “quasi-industrial district” to multi-cluster regions and large metropolitan areas

• Location of economic decision sources (cf. Markusen)• Institutional margins of manoeuvre: toward a matrix

between degree of autonomy and “departmental” responsibilities

• Policy path dependence (degree of pro-activeness)• Internal coherence: articulation with “below” policy

layers, constituency building

Economic aspects

• Communication infrastructure as a key enabler: accessibility (from outside and to markets), internal coherence

• Lasting “natural” & historical endowments• Activity/sector mix is central

- do not focus only on manufacturing industry- relative role of new, technology intensive activities- consider re-articulation of ‘traditional’ activities- central issue of categorising activities: analytic, synthetic & symbolic KB, focused vs distributed KB (issue of related variety), engineering vs discovery driven design spaces, technology vs organisational innovation

Regional Knowledge base

• Use of Triple Helix like description• Universities:

- training as a key component to consider- research: academic and technological, issues of spectrum and relevance beyond classical issues of visibility and ranking

• Government labs and R/T institutions- ‘non academic’ but also ‘FhG/TNO’ types, growing role of NPO- very uneven geographical distribution and regional embeddedness

• Industrial R&D and innovation capabilities- beware of impact of choice of quantitative surveys: Frascati, innovation surveys, technological profiles…- from global numbers to relative specialisation, sector critical mass, variety and richness of actors, competence pool- large and small firms: how to consider the anchor tenant hypothesis?

Regional Connectivity

• Proximity is not only geographical, also cognitive and organisational

• Geographical proximity does not often match with political definition of regions --> importance of “layered” approach

• 3 dimensions of connectivity:- identification, characterisation and measure: large number of potential indicators and practical difficulty of collection and use- ecology of intermediating structures- existence, location, breadth and depth of public policies

Some shared elements of Regional RIP

• They are key players in support to SME - technology /science parks- technology resource centres- sector-based cluster/pole policies

• They all like start-up & spin-off firms (incubators, seed capital, competitions,…)

• Even when not in charge, receptive to university claims, but difficult tension to manage between “world level critical mass” and regionally relevant oriented research

• Role of transversal “platform” policies: enlarging KB, promoting entrepreneurship, region attractiveness,

Part 2:Behind the Lisbon Agenda

Knowledge dynamics

drive to a de facto differentiationand

a strong “centring” of national intervention

The new motto: Knowledge based economy & society

The dynamics of science & new

industries(1)

Balance betweenAccumulation &Breakthrough:

Managing establishedindustries

(2)

Societal issues: from The club of Rome tonew crises : RDI inCollective goods

(3)

• The overflowing of the Nation-State and the need for “Institutional transformation”

• Toward a new model?

Employment and competitiveness of established industries: new “proximity policies”

SME Large firms

GeographicItalian like industrial districts

‘Attractiveness’ policies

‘sector’ based

Industrial collective research “CETIM like”

‘large projects’ (transport: from low energy vehicles to the hydrogen society)

A link to societal issues as “a public

engine to innovation”

A privileged role of regional policies?

Without forgetting servicesTo firms & to individuals

RDI in collective Goods

• Need to focus not on the economic definition of public good, but on politically defined priorities

• Multiple organisational models, sharing:- large government labs- industry subcontracting and delegation- importance of procurement- government as a proxi & intelligent customer

• However very different balances between zones:- military vs civil R&D- buying R&D with products vs procuring research- broad or narrow spectrum of mission R&D

A public engine to innovation?

• The US model of military R&D: “a public engine of innovation” with twice the size of the European one (see Caracostas & Muldur)

• Three potential options:- imitate (defence programmes + ‘DARPA like’) : Can similar effects be expected from the Europeanisation of military R&D?- develop large civil programmes: How to avoid Nixon like “war against cancer” (see Walsh 2005)?- learn from other EU experiences: develop a “fund for innovation in collective goods” (FICG) along the lines of structural funds?

Knowledge dynamics: search regimes

• 3 characteristics to differentiate fields• Rate of growth: publications all fields 1-2%, genomics in the

1990s 8%, Nano S&T 1999-2003: 14%.

• Degree of convergence: how many competing hypotheses simultaneously, see work on paradigms (Kuhn, Dosi) & about dominant design (Metcalfe)

• Importance of complementarities- cognitive (e.g. interdisciplinarity)- technical (see facilities and “big science”)- institutional (e.g. importance of public-private collaborations)

Source: Bonaccorsi (2005), see Prime Website

‘dominant science’

Physics Computer science / TI

Molecular Biology

Nano ‘convergence’

Dynamics Cristallisation (Cognitive complementa.)

Large objects or Technical systems

Distributed PI (patent pools…) Strong industry -university relations

Science based /’individual PI & transfer/ licences

Hybridation of ‘long distance’ disciplines

Trajectory (degree of covergence)

Early seclection of a dominant design cumulative improvements

Adoption of standards and design tools

Competition between paradigms

(initially) based on previous trajectory of ‘central’ discipline

Critical Infrastructures (Technical Complementa)

Specific very large Equipments

Generic infrastructures

No entry barrier Technological platforms + ‘interdisciplinary gatherings’

Coordination mode

National ‘large programme’ (product oriented)

Technological programmes

Networks & clusters (bottom-up)

Multi actors poles (PPP) : ‘Nanodistricts’

Main Industrial Actors

National champions (specialising in public infrastructures)

MNF (oriented toward mass markets) Specialised NTBF (B to B)

Start-up & venture capital (in early phases) / (Concentration around large established firms in diffusion?)

Central role of ‘incumbents’ (global firms ‘B to B’ and ‘B to C’, ex start-up from previous waves)

Three challenges for policy

• How to nurture “frontier science” and the emergence & initial exploration of new paradigms? The exploration phase

• How to organise to test and initiate a learning curve on “promising” new paradigms? The crystallisation phase.

• How to shape markets and their infrastructures to enable firms to invest? The selection phase

Exploration: Europe & breakthrough science

• Starting point: Europe and US equivalent in Articles production but very different in generating breakthrough Science (marker = Nobel prices, 5 times more US than EU)

• My analysis: Source = fragmentation of funding bodies in EU vs. large concentration in US federal research.

• My ‘conjecture’ on a given field (say catalysis)- 2 agencies in US. 70% on ‘mainstream research agenda’ and exploration of 30 longer term ‘options’- EU at least 10 agencies/programmes. - Issue= critical mass in mainstream agenda.- Result 1: concentration on ‘exploitation’ science (85%?)- Result 2: twice less efforts on breakthrough science + duplication = 4 times less potential Nobel prices

• Conclusion: go towards an agency of agencies focusing on ‘breakthrough science’

• Minatec = 3500 researchers, engineers and post grads• Critical world size (publications, patents)• 3 layers of facilities: exploration, demonstration, prototyping

(around 1 billion euros)• Large R&D facilities from 3 world key players in electronics (ST,

Philips and Flextronics)• Numerous start-up (one of largest European pool), Successful

start-up with world niches (SOITEC…), • Incoming industry players: most major electronic equipment

producers, Pharma and materials firms implanting R&D facilities • Broad academic environment: 55000 students, 13000

academics and public researchers• Large trained capabilities (40% of total manpower with bachelor

degree)

‘Science districts’: Grenoble at a glance

Crystallisation: NBIC & ‘Science districts’

• Shared facilities• Joint support teams:

TT (contract, IP…), incubator, seed capital..

• Vision shaping (markets & society):OMNT, Ideas Lab

• Scientific forum• Incentives for internal

& external research collaboration

• “Attractivity” team

NationalLab

UniversityEngineeringSchools

Industry: R&D space with world players and multiple

start-up & NTBF

Grenoble and Minatec

Selection: Public dimensions of market shaping

• A changing approach: from support to national champions to “market shaping”

• Public support- Norms: the over-mentioned case of GSM- competition rules: see wind energy - physical networks: see internet and information society- IPR: see the extension to genomic applications- User and worker safety: see Prion research- Public debates as a new form of “market” and even “research shaping” (see GMO and field trials…)

Toward a new framework to think

public intervention?

The overflowing of the Nation-State...

Region Nation Europe

NBIC

-explore- crystallise

- select

Agencies ERC

Poles FP - technological prog.

University research capabilities

FP+ (European agencies?)

ProximityPolicies

Collective goods

Districts ICR ILP

Notes: ICR= Industry collective research, ILP Innovating large projects, FICG Fund for innovation in collective goods

‘champion users’ FICG

ERA Nets research

... Toward a European Model?

Main hypothesis : each issue requires to define an ad-hoc answer

Prepare

Organise

Implement

‘Technological platforms’

Open Method of Coordination

Federal = FP

Coordinated = ERA Nets (+)

ERA Nets: 5 Types

- coordinating wide research areas: social sciences, humanities, chemistry, materials research, marine

- building EU specialities: plant genomics, functional genomics, ocean drilling, bio-energy, photovoltaics, catalysis research, complex systems research…

- coordinating ‘sector driven’ technology: space, transport, wood, construction

- ‘collective problem’ focused research: infectious or rare diseases, cancer clinical practice, flood management, food safety, water management, zero emission power plant…

- addressing transversal problems in R&I: women in science, foresight, science education, support to SMEs

Technology Platforms

• “Stakeholders, led by Industry, getting together to define a Strategic Research Agenda (SRA) on a number of strategically important issues with high societal relevance”

• bottom-up, industry (problem)-led approach• Wide coverage:

- frontier S&T: nanomedecine, hydrogen fuel cells, wireless communications, embedded systems- High tech industries: aeronautics, space- Infrastructures and environment: transport, water, sustainable chemistry, animal health- Classical industries (steel, textiles, construction…)

• Implementation of SRA may lead to “Joint technology initiatives”.

• Achieve 1% Barcelona target by end of FP7• Present situation: 0.7% - not increasing! • Consequence: need to increase of 0.3% of GDP • Proposition: EU shows direction by sharing the burden.• Annual expenditure of FP7 must go from 0.05% in 2003 to

0.20% of GDP in 2013: multiplication by 4.• Consequence on EC budget: presently RDD=4%, should

thus attain 16% within present financial framework• Not realistic taking into account other requirements: EC

budget ceiling must be increased to 1.2%

But we miss a European engine…