Regional Innovation Monitor - European Commission · and medium sized companies, multinational corporations, universities and public and private research institutes received new impetus

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Version: Final Date: 18 April 2012

Regional Innovation Monitor Regional Innovation Report (Bavaria) To the European Commission Enterprise and Industry Directorate-General Directorate D – Industrial Innovation and Mobility Industries

Elisabeth Baier Fraunhofer ISI

PREFACE The Regional Innovation Monitor (RIM)1 is an initiative of the European Commission's Directorate General for Enterprise and Industry, which has the objective to describe and analyse innovation policy trends across EU regions. RIM analysis is based on methodologies developed in the context of the INNO-Policy Trendchart which covers innovation policies at national level as part of the PRO INNO Europe initiative. The overarching objective of this project is to enhance the competitiveness of European regions through increasing the effectiveness of their innovation policies and strategies. The specific objective of the RIM is to enhance the scope and quality of policy assessment by providing policy-makers, other innovation stakeholders with the analytical framework and tools for evaluating the strengths and weaknesses of regional policies and regional innovation systems. RIM covers EU-20 Member States: Austria, Belgium, Bulgaria, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, the Netherlands, Poland, Portugal, Romania, Slovakia, Spain, Sweden and the United Kingdom. This means that RIM will not concentrate on Member States where the Nomenclature of territorial units for statistics NUTS 1 and 2 levels are identical with the entire country (Estonia, Latvia, and Lithuania), Malta which only has NUTS 3 regions, Slovenia which has a national innovation policy or Cyprus and Luxembourg which are countries without NUTS regions. The main aim of 50 regional reports is to provide a description and analysis of contemporary developments of regional innovation policy, taking into account the specific context of the region as well as general trends. All regional innovation reports are produced in a standardised way using a common methodological and conceptual framework, in order to allow for horizontal analysis, with a view to preparing the Annual EU Regional Innovation Monitor reports. European Commission official responsible for the project is Alberto Licciardello ([email protected]). The present report was prepared by Elisabeth Baier ([email protected]). The contents and views expressed in this report do not necessarily reflect the opinions or policies of the Member States or the European Commission. Copyright of the document belongs to the European Commission. Neither the European Commission, nor any person acting on its behalf, may be held responsible for the use to which information contained in this document may be put, or for any errors which, despite careful preparation and checking, may appear.

1 http://www.rim-europa.eu

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Table of Contents 1. Main Trends and Challenges in the Regional Innovation System 5

1.1 Recent trends in regional economic performance 5

1.2 Recent trends in regional innovation performance 7

1.3 Identified challenges 9

2. Innovation Policy Governance 11

2.1 Degree of institutional autonomy 11

2.2 Institutional-set up, co-ordination and implementation mechanisms 12

2.3 Availability and use of policy intelligence tools 14

2.4 Key challenges and opportunities 15

3. Innovation Policy Instruments and Orientations 17

3.1 The regional innovation policy mix 17

3.2 Appraisal of regional innovation policies 23

3.3 Good practice case 24

3.4 Portfolio of innovation support measures 25

3.5 Towards smart specialisation policies 26

3.6 Possible future orientations and opportunities 27

Appendices Appendix A Bibliography................................................................................................................28

Appendix B Stakeholders consulted...............................................................................................30

Appendix C RIM Repository information ...................................................................................... 31

Appendix D Statistical data ............................................................................................................32

Figures Figure 1-1 GDP development (Euro per inhabitant)........................................................................ 5

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Figure 1-2 Economic and innovation performance indicators ........................................................7

Figure 2-1: Management and implementation structure of regional

innovation strategy.......................................................................................14

Tables Table 1-1 GDP growth rate in Bavaria, Germany, EU 27, 2000-2009 (%

change on previous year)................................................................................5

Table 1-2 R&D expenditure in Bavaria 1999-2007 ..........................................................................7

Table 1-3 R&D Intensity in Bavaria in Comparison to Germany and the EU27............................. 8

Table 3-1 Overview of the regional innovation policy mix .............................................................19

Table 3-2 Existing regional innovation support measures ............................................................21

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Executive Summary 1. Introduction: Main recent trends in the Regional Innovation System Bavaria's economic performance is still above the German average and also above the EU-27-average. However, the regional economy is characterised by intra-regional disparities regarding both the region’s economic and innovation performance. Metropolitan areas like Munich or Nuremberg are in a much more favourable economic position than less dynamic rural areas as for example in the east of Bavaria.With regard to innovation performance, Bavaria ranks above the EU-27 average regarding central indicators such as GERD and BERD and patents per population. Higher education R&D expenditure is however below EU-average. Much of Bavaria’s strength as R&D location stems from its enterprise population. Almost 80% of the region’s R&D expenditures come from the business sector. Many internationally renowned enterprises, such as Siemens, Roche or General Electric, invest in R&D in Bavaria. Based on the numerous activities of a number of leading innovative companies operating in the region, the Bavarian business sector is well positioned on the European and even the world market. With regard to basic research, Bavarian universities and public research institutes have significant strengths. Two Bavarian universities were granted the label “elite universities” by the Federal Ministry of Education and Research and may be counted as key players in Germany. Additionally, Bavaria hosts many public research institutes and headquarters of public research organisations, with significant strengths in basic and applied research as well as 24 universities of applied sciences. An additional strength of the Bavarian regional innovation system stems from the numerous innovation networks and clusters. Since the 1990s networking activities have been supported by the Bavarian government. With the Bavarian Cluster Initiative, R&D cooperation activities between heterogeneous actors such as small- and medium sized companies, multinational corporations, universities and public and private research institutes received new impetus. The regional innovation system is also characterised by many innovation support agencies and a strong technology transfer system. 2. Major innovation challenges and policy responses

Among the most pressing policy challenges are the following:

Challenge 1: Intra-regional disparities Bavaria’s geographic structure with two metropolitan areas (Munich and Nuremberg), a few larger centres (e.g. Augsburg, Regensburg, Würzburg) and a large periphery makes it difficult to establish a broad foundation of competencies. Although Bavaria has managed the structural change from an agricultural region to a technology-oriented region, neither ecnomic wealth and growth potential nor innovation competencies are spread evenly across the region. Bavaria is characterised by intra-regional disparities that can be closely related to its industry and economic structure. Certain important industry branches are connected to spatial agglomeration and the same holds for research and innovation capacities. Challenge 2: Economic growth and international competitiveness Economic growth rates were for a very long time above those of Germany and EU27. However, during the last few years annual GDP growth rates have fallen below the

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German and the EU27 average giving rise to concern. Although the level of GDP/capita is still above the German and EU27 averages, it will be a challenge for Bavaria to maintain the position as economic and innovation leader, not only in Germany but also in Europe in years to come. In addition, the German energy transition will pose additional challenges to Bavarian enterprises and the regional economy. Research, technology and innovation are perceived as fundamental for economic development and are seen as a key success factor for future growth. Challenge 3: Demographic change Although Bavaria has excellent universities with a distinct focus on technical disciplines, in the future it will become harder to meet the demand for highly qualified workers, especially in high-technology sectors. Decreasing numbers of students, brain-drain from rural areas and an ageing population will pose new challenges to regional RTDI policy making. To meet those challenges, RTDI policies in Bavaria take into account specific regional strengths, general economic framework condition and needs resulting from intra-regional disparities and demographic developments. Firstly, the regional government has developed instruments aimed at specific technological fields of strength of the region, such as biotechnology, energy and ICT. Secondly, Bavaria has put special policy emphasis on the establishment of functioning R&D networks and clusters, providing incentives for cooperation. Thirdly, policy measures to support actors in the less advanced and less competitive peripheral regions are currently developed along with support schemes for the enlargement of higher education institutes in certain thematic fields and their engagement in advanced training. 3. Innovation policy governance During the past few years the degree of centralization of policy-making and of regional governance competences in Bavaria has become less apparent. The German constitution differentiates between policy tasks that are to be performed by the federal government and others that are to be delegated to the level of the federal states (Länder). With regard to RTDI policies, in principle the German regions have the autonomy and the competence to control or influence decisions in soft knowledge infrastructures (mainly higher education insitutes, science parks, innovation networks, start-up initiatives etc.). The regional governance set-up is complex and the responsibility is currently divided principally between two ministries: the Bavarian Ministry of Economic Affairs, Infrastructure, Transportation and Technology and the Bavarian Ministry of Science, Research and the Arts. With regard to vertical policy co-ordination, the state government actively integrates support and funding opportunities provided at the federal level into its development strategy, which pursues regional interests. Concerning inter-regional co-operation, Bavaria is involved in a number of cross-border and transnational operational programmes. Bavaria started quite early on to promote research, technology and innovation on a regional level. Hence, regional policy makers can look back on several decades of innovation policy making and the development of innovation policy instruments, which have become more and more refined during the last two decades. Innovation policy making and consequently innovation policy measures have been adapted continuously to changing economic conditions and emerging technologies. Innovation policy governance in Bavaria is characterised by a strategy that tries to act on the basis of enhancing regional economic development and competitiveness with a long-term view. Rather than to react, policies are designed in such a way as to ensure competitiveness in the long-run. The regional innovation policy during the last two decades has mainly been determined by three grand initiatives: Zukunftsinitiative Bayern, High-Tech-Offensive Bayern and the Bavarian Cluster Initiative. The responsibility for regional innovation policy in Bavaria remains with the regional government (Bavarian State Chancellery) and is currently divided principally between two ministries, which are mainly responsible for the design of the strategy and the

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development of appropriate measures. Bavarian policy makers draw on a wealth of experiences of how to design, implement and adapt policies while involving relevant regional stakeholders like agencies, university representatives, or trade associations to name but a few. Regular monitoring and evaluations are tools frequently used to judge the success or failure of certain measures. Regional policy makers have an above average understanding of the needs and potentials of their policies’ potential beneficiaries also with a long-term perspective. In addition, it is important to note that Bavaria has profited from federal level and European support in various ways. As all German states, it has full budgetary autonomy and it can access additional funds from national and European sources. The regional government intentionally designs certain policy instruments in such a way as to generate additionality in funding. 4. Conclusions: future actions and opportunities for innovation policy The Bavarian regional economy belongs to one of Europe’s highly competitive regions and has been strongly supported by Bavaria’s RTDI policy-making for more than three decades. The situation in Bavaria is an illustrative example of how RTDI policy can bring the economy of a region forward and achieve sustained competitiveness. Over the years the Bavarian government has dedicated substantial budgetary means to the techno-economic development process of the region. It is important to note that, RTDI policy cannot make a difference overnight but processes of transformation need to be followed up with adaptive strategies to ensure sustained success. This requires continuous investments programmes and policy measures need to be adapted to changes on a regular basis. The Bavarian example shows that RTDI policy will be most successful when it builds on regionally existing potentials and enlarges them sequentially in such a way as to adopt new technologies that allow structural change. For the future, a strong human capital and knowledge base is needed to keep-up with global developments and provide regional enterprises with qualified, highly-skilled employees. Furthermore, the support of diverse innovation relevant actors also seems to be decisive. Complementarities between regional and federal RTDI policy measures guarantees that the region can profit from superior policy instruments and that specificities are addressed at the same time. The government of Bavaria addresses future issues rather early in its regional policy mix and consequently prepares the regional economy for new framework conditions An illustrative example is the investment in energy transition or the need to ensure availability of a highly qualified workforce for regional (technology oriented) enterprises by promoting certain courses of study and certain disciplines at schools. As this report demonstrates, Bavaria permanently reappraises its innovation policy mix in order to prepare its economy for future challenges.

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1. Main Trends and Challenges in the Regional Innovation System

1.1 Recent trends in regional economic performance Bavaria's economic performance can be characterised as being clearly above the German national average and also above the EU-27-average. In 2008 regional GDP per capita reached €35,800 as compared to the German average of €30,200 and the European average of €25,100. Bavaria accounted for 17.7% of German GDP, the largest share of a single federal state (Source: National Statistical Office; DESTATIS). From a dynamic perspective Bavaria managed a significant increase in GDP per capita (cf. Figure 1-1 and Figure 1-2).

Figure 1-1 GDP development (Euro per inhabitant)

Source: Own figure, Eurostat data

As Table 1-1 shows the regional GDP grew faster than the national and the EU average over the first half of the last decade, until about 2003. after which there was a slow down. Between 2004 and 2009 growth rates were smaller than those in the EU 27 regions, with the exception of the year 2006.

Table 1-1 GDP growth rate in Bavaria, Germany, EU 27, 2000-2009 (% change on previous year)

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

EU 27 3.90 2.10 1.20 1.20 2.60 1.90 3.40 3.30 0.70 -4.30 Germany 3.70 1.50 0.30 -0.20 1.60 0.90 3.50 3.10 1.10 -5.30

Bavaria 6.00 2.40 1.70 0.40 2.40 1.70 3.60 3.40 0.10 -5.30 Source: Own figure, Eurostat data

The regional labour force in 2008 amounted to 6.64m, i.e. 16.5% of the national total, a slightly lower share than with respect to the regional GDP. Most employees work in services (62.2%), while 37.0% work in industry and 0.7% in the agricultural sector (Source: DESTATIS). These figures differ from the national averages (66.5%/31.1%/2.4%), indicating an emphasis on industry. In 2010, unemployment in

0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Bavaria

Germany

EU 27

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Bavaria was at 4.5% and clearly below the national average of 9.9%. Bavaria had the second lowest unemployment rate of all German states. It also remains below the average level in the EU-27 (20.9%) (cf. Figure 1-2). Bavaria's economy has undergone significant structural changes over the past 50 years. It has changed from a traditional agricultural region into one of Europe’s most competitive industrial regions with an important and growing services sector. Important industry branches are automotive industries (including supplier branches), electrical engineering and mechanical engineering. In addition, Bavaria is one of the leading international regions for high technology fields such as information and communication technologies (ICT) and biotechnology. Also, it is one of Germany’s most important regions in the services sector, major branches being insurance and financial services. The Bavarian business sector is characterised by the presence of many SMEs but also many MNEs having their headquarters in Bavaria. In 2009, there were 614,283 firms with less than 250 employees and 1,851 firms with 250 and more employees (Source: DESTATIS). There are large regional economic disparities within Bavaria. The major economic region is the area around Munich with several global players in the automotive industry (Audi, BMW, MAN, Knorr-Bremse), ICT (Siemens), media and publishing as well as the military industry. Other import agglomerations are Augsburg, Regensburg, Würzburg and Nuremberg. The share of employment in high-technology sectors as percentage of total employment amounted to 6.57%, slightly above the national average of 5.16% (2009 data, Source: EUROSTAT). With respect to the outward orientation of the economy, the overall scope of imports was €131.6bn in 2010, 16.5% of the national total, while the scope of exports amounted to €144.1bn (15.1%) (Source: DESTATIS). Most of the Bavarian exports go to countries within the European Union. When divided into single countries, Austria, the United States of America as well as China are the most important trading partners (Source: Bayerisches Landesamt für Statistik). To conclude, Bavaria’s economic performance relies on a strong and diversified industrial basis with several global players, especially in the automotive industry, but also in ICT, media and publishing as well as military industry. Additionally, it is a leading region as regards high technology, especially biotechnology and the ICT sector. Bavaria has managed the structural change from a purely agricultural region to a region which is taking a leading role in Germany, and maybe even in Europe.


1.2 Recent trends in regional innovation performance In terms of innovation performance, the indicators for Bavaria display a mostly coherent overall picture (see Figure 1-2).

Figure 1-2 Economic and innovation performance indicators

Source: Eurostat and Community Innovation Survey

With regard to central indicators of RTDI investment, such as GERD and BERD, Bavaria ranks above the EU-27 average (0.28%/0.24% and 2.21%/1.21% per GDP in 2007). Only HERD remains below the EU average. The regional patent intensity clearly exceeds the European regional average (444.9/115.1 applications per million inhabitants in 2006). This is partially a result of the presence of many headquarters in the region accounting for a large number of the patents. In addition, two major research organisations (the Max Planck Society and the Fraunhofer Society) have their headquarters in Munich, the capital of Bavaria and thus patents are filed by their central bureaus. GERD has steadily increased in absolute terms from €9,615m in 1999 to €12.196m in 2007. With a view to the development of R&D intensity over the last few years, it has to be stated that GERD as % of GDP increased only slightly from 2.79% of GDP to 2.81% of GDP and even declined between 2003 and 2007 (cf. Table 1-2). Table 1-2 R&D expenditure in Bavaria 1999-2007 1999 2001 2003 2005 2007 GERD Million € 9.615 - 11.333,5 11.610,2 12.196,4

GERD % of GDP 2.79 - 2.97 2.91 2.81

BERD % of GDP 2.2 - 2.38 2.3 2.21

GOVERD % of GDP 0.23 - 0.24 0.25 0.25

HERD % of GDP 0.36 - 0.35 0.31 0.35

Source: Own figure, Eurostat data

Comparing the latest Bavarian figures with those for Germany and for the EU 27, it can be stated that the R&D intensity of Bavaria (GERD) is above the national and EU average. The comparative strength, however, can be clearly related to the industrial sector. Both government expenditures on R&D and higher education expenditures on R&D are below the national level. Table 1-3).


Table 1-3 R&D Intensity in Bavaria in Comparison to Germany and the EU27 2007 as % of GDP GERD BERD GOVERD HERD EU27 - European Union 1.85 1.18 0.24 0.42 Germany 2.53 1.77 0.35 0.41

DE1 - Baden-Württemberg 4.37 3.56 0.39 0.42

DE2 - Bayern (3rd) 2.81 (2nd) 2.21 (14th) 0.25 (10th)0.35

DE3 - Berlin 3.36 1.39 1.12 0.85

DE4 - Brandenburg 1.22 0.32 0.64 0.25

DE5 - Bremen 2.18 0.87 0.72 0.59

DE6 - Hamburg 1.93 1.15 0.42 0.35

DE7 - Hessen 2.63 2.14 0.16 0.33

DE8 - Mecklenburg-Vorpommern 1.30 0.38 0.54 0.38

DE9 - Niedersachsen 2.48 1.72 0.34 0.42

DEA - Nordrhein-Westfalen 1.80 1.13 0.27 0.40

DEB - Rheinland-Pfalz 1.86 1.38 0.15 0.33

DEC - Saarland 1.08 0.43 0.29 0.35

DED - Sachsen 2.58 1.34 0.66 0.58

DEE - Sachsen-Anhalt 1.13 0.34 0.40 0.39

DEF - Schleswig-Holstein 1.18 0.53 0.31 0.34

DEG - Thüringen 1.80 0.92 0.42 0.46

Source: Own figure, Eurostat data Research Landscape Bavaria has a total of 55 higher education institutes, altogether. Three different types of institutes play an important role in the higher education system in Bavaria, as well as in Germany: universities, universities of applied sciences (Fachhochschulen) and art academies (Kunsthochschulen). Bavaria hosts 15 universities, among them 9 public and 6 private institutes. In addition to that, 9 art academies and 24 universities of applied sciences are located in Bavaria (Source: Bayerisches Staatsministerium für Wissenschaft, Forschung und Kunst). Many of the higher education institutes are located in Munich, the federal capital and economic centre of the region. Bavarian universities and public research institutes have significant strengths, and two universities in Munich were labeled as “elite universities” in the official excellence or elite competition between the universities in Germany organised by the Federal Ministry for Education and Research. According to this classification scheme, these universities can be considered to have worldwide impact as regards their research capacities. In the same competition, another three Bavarian universities were recognised as being world-class in certain areas. The size of the Bavarian higher education sector can be characterised by the number of students and doctorates, as well as the number of professors. In the winter term 2009/2019, a total of 272,666 students were enrolled in Bavarian higher education institutes (12.9% of the German total), 48.8% of them being females. The majority of the students were enrolled at universities (181,032), followed by universities of applied sciences (88,359) and art academies (3,275). Altogether 4,259 students left Bavarian universities with a doctoral degree in the year 2010. The ratio of doctorates awarded to students enrolled has declined from 1.89% in 1999 to 1.56% in 2010. Higher education institutes employed altogether 89,748 persons, among them 5,854 professors in the year 2010 (Source: DESTATIS).


As regards non-university research, twelve institutes of the Max Planck Society, several institutes of the Fraunhofer Society and an additional one under construction, three centres of the Helmholtz Association, and five institutes of the Leibniz Association are located in the region. Moreover, the Max Planck Society and the Fraunhofer Society have their headquarters in the Bavarian capital Munich. In addition to the institutes of the major German public research societies, there are several independent institutes closely connected with, but legally independent from, universities (so-called An-Institute) as well as different research centres at the universities of applied sciences. In addition, Bavaria hosts many knowledge and technology transfer units that are spread throughout the region to foster the transfer of research results. In addition, there are several clusters and research networks with an international reputation located in the region, e.g., in the following fields automotive and aerospace industries, medical technology, and biotechnology. Enterprise Sector Firms are also important actors in the regions' knowledge production and innovation landscape. The Bavarian innovation landscape is rather industry-oriented according to German standards. The R&D expenditures of the business enterprise sector amount to 2.21% of the Bavarian GDP in 2007 (Source: Eurostat). The volume of BERD spending has increased over the last few years, rising from €7,566m in 1999 to €9,588m in 2007 (Source: Eurostat). In 2007, the share of regional business expenditure on R&D amounted to 78.6% compared to 70.0% on the national average (Source: Eurostat). Many internationally renowned enterprises, such as Siemens, Roche or General Electric, invest in R&D in Bavaria. Large research premises are maintained mostly in the metropolitan regions of Munich and Nuremberg. In Bavaria 45,073 persons (head count) were employed as researchers in the business enterprise sector in 2009 (Source: Eurostat).

1.3 Identified challenges Among the most pressing policy challenges are the following: Challenge 1: Overcoming intra-regional disparities A very obvious fact (from the data but also confirmed in expert interviews) is the concentration of the economic and innovation activity in and around Munich and Nuremberg (and to a lesser degree in other large Bavarian cities such as Augsburg for example). Bavaria’s geographic and economic structure with two metropolitan areas (Munich and Nuremberg), a few larger centres (e.g. Augsburg, Regensburg, Würzburg) and a large periphery makes it difficult to establish a broad foundation of competencies. Especially, since the required (research) infrastructure is missing in rural areas. Although Bavaria has managed the structural change from an agricultural region to a technology oriented region neither economic wealth and growth potential nor innovation competencies are spread evenly across the region. Bavaria is characterised by intra-regional disparities that can be closely related to its industry and economic structure. Certain important industry branches are connected to spatial agglomeration and the same holds for research and innovation capacities. Since it is a key goal of the Bavarian government to create comparable living conditions in the whole region, a set of policies has been designed to narrow the gap between metropolitan and rural areas in Bavaria. These policies do not aim at equalising all regions, but rather seek to ensure that rural areas can use and at the same time unfold their technological and economic potentials. Regional policy making tries to spur innovative activities in all parts of Bavaria including rural areas. A good example for this kind of ambition is delivered by the cluster initiative which explicitly supports clusters outside the metropolitan centres and tries to stimulate grass root activities – also in rural regions. The challenge of


intra-regional disparities is also addressed in the BayernFIT programme that explictly promotes the regional development in Northern and Eastern Bavaria. Challenge 2: Ensure economic growth and international competitiveness For a very long time economic growth rates (annual GDP growth rates) were above the GDP growth rates of Germany and EU27. However, during the last years annual GDP growth rates dropped below those of Germany and the EU27. This holds especially for the years of the financial and economic crisis. Although the level of GDP/capita is still above the German and EU27 average, decreasing growth rate pose a challenge for Bavaria to maintain its position as economic and innovation leader in Germany but also in Europe for the coming years. Research, technology and innovation are perceived as fundamental for economic development and the generation of wealth by the Bavarian government (Bayerische Staatsregierung, 2011b). Innovation policy is seen as a key success factor for future growth and different policy measures are designed to meet the above mentioned challenges. For example, additional money will be invested in adequate development or reconstruction of the energy infrastructure and in energy research, especially in the renewable energy sector and in the field of electro-mobility. Challenge 3: Cushioning demographic change Although Bavaria seems to be highly competitive by national and European standards as regards R&D (input and output) and knowledge production, it is hard for Bavaria to provide enough qualified employees to keep up with the tremendous need of the Bavarian economy for specialised and highly qualified personnel. This problem is already pressing today and given the demographic development will gain even more weight in the future. Although Bavaria has excellent universities with a distinct focus on technical disciplines (e.g. Technische Universität München and others), it will become harder to meet the demand for highly qualified workers in future, especially in high-technology sectors. Decreasing numbers of students, brain-drain from rural areas and an ageing population will pose new challenges to regional RTDI policy making. In response to these trends, certain disciplines in higher education institutes will be enlarged. Additionally, they should increase their engagement in life-long learning and thus to provide a larger proportion of the population with specific knowledge and relevant competences.


2. Innovation Policy Governance

2.1 Degree of institutional autonomy The German constitution differentiates between policy tasks that are to be performed by the federal government and others that are to be delegated to the level of the federal states (Länder). While many fields of RTDI policy are predominantly the realm of either the federal or regional level, the federalist system ensures that the respectively other side has at least reserved a right to comment and debate. During the last few years the degree of centralization of policy-making and of regional governance competences in Bavaria has become less apparent. With regard to RTDI policies, the German regions have in principle the autonomy and the competence to control or influence decisions in soft knowledge infrastructures such as universities, science parks, innovation networks, start-up initiatives. This, however, does not mean that the national government has no or only a limited interest in influencing RTDI policies. Many major technology and innovation oriented initiatives are initiated by the national government. The main actor on the national level in RTDI policy is the Federal Ministry for Education and Research (BMBF). It is responsible for many research and technology support programmes funded at the national level. Moreover, it provides the federal share of funding for most national non-higher education public research facilities (e.g. Max-Planck-Institutes, Fraunhofer Institutes). Another main player is the Federal Ministry of Economics and Technology (BMWi) that co-ordinates and funds federal programmes, notably in the field of SME and entrepreneurship/start-up support, as well as sector specific research (energy, transportation etc.). Finally, an important provider of business R&D support at the federal level in Germany is the Kreditanstalt für Wiederaufbau (KfW), the main German public promotional bank providing credits and guarantees to private enterprises that are eligible for state support. All three institutions offer a large variety of programmes with substantial budgets from which regional actors can benefit without having to address their regional government at all. From an accountability and additionally perspective, regional policy makers in Germany are faced with the challenge to design their policies complementary to what is already available while at the same time investing taxpayer’s money efficiently to benefit their particular constituency. Vertical policy coordination between the national and regional level primarily occurs on the basis of concrete programmes or initiatives, whereby the regional RTDI policy activities should – at least in theory – supplement the national (and supranational) RTDI initiatives. In reality, due to different techno-economic performances of the regions, different tax receipts and political priorities, redundancies and problems as regards the "division of labour" between the different governance levels occur occasionally. Thus, as a German federal state, Bavaria has substantial autonomy with regard to legislation and tax-raising powers, as well as a say in some matters of federal policy. In particular, this holds true for all matters related to technology policy where many rights of decision making stay with the federal government. Additionally, regional governments are willing and able to fully finance additional measures exclusively from their regional budgets. The Bavarian government spends altogether €16,439m for education, science, research and culture in 2012. While provisions in the German tax system are made to enable the Länder to fulfil their responsibilities with respect to higher education, technology policy remains a voluntary activity of those that feel that they have a sufficient amount of funds available to intervene in favour of their constituency. Complementary to national and regional funding, funding allocated through the European Regional Development Fund (ERDF), European Social Fund (ESF) and the INTERREG programmes, also empowers Bavaria to design RTDI support programmes. In the funding period 2000-2006, Bavaria has received altogether


€1059.5m European funding. In the current funding period, 2007-2013, Bavaria receives €576m through the ERFD, €81m from the INTERREG IV programme and an additional €382m through the ESF. The total budget is around €1,767m and the community assistance through the ERDF amounts to around €576m (approximately 2.19% of the total EU structural funds available for Germany in the funding period 2007-2013). In the current period, the budget is divided between five thematic priority axes. €194m (€114m EU contribution and €80m national public contribution) are intended to be spent on strengthening innovation, science, research and education (priority axis one) and €269m (€174m EU contribution and €96m national public contribution) will be invested to strengthen the competitiveness of small and medium- sized enterprises and employment (priority axis two).

2.2 Institutional-set up, co-ordination and implementation mechanisms

Institutional Set-up The responsibility for regional RTDI policy in Bavaria remains with the regional government (Bavarian State Chancellery) and is currently divided principally between two ministries: the Bavarian Ministry of Economic Affairs, Infrastructure, Transportation and Technology (MWIVT) and the Bavarian Ministry of Science, Research and the Arts (MWFK). Within the MWIVT, technology policy is addressed in various departments: the Department for Innovation, Research and Technology, the Department for Industry, Foreign Trade and the Department for Medium-Sized Businesses, Services, Crafts. The ministry describes itself as an ‘organizer’ of technology transfer and innovation management. Moreover, the ERDF Operational Programmes are implemented under the direction of the MWIVT. In addition, the MWVT is responsible for R&D and technology funding. The MWFT is also strongly involved in Bavarian technology policy, which is responsible for universities, universities of applied sciences and large-scale research institutions. In addition to MWVT and MWFK, the Bavarian Ministry of Financial Affairs (financial responsibility for universities, large-scale research institutions and public credit institutions), the Bavarian Ministry for Agriculture and Forest (responsible for agro-biotechnology) and the Bavarian Ministry of Health, Food and Consumer Protection (responsible for the funding of health-related biotechnologies) also play a role in RTDI policy. Coordination mechanisms and organisations At the interface between R&D in higher education institutes, R&D in public research institutes and R&D in industry and enterprises and public R&D funding stands „The Bavarian Research Alliance“ (BayFOR), an independent institution which supports research co-operations in Bavaria. It is a non-profit private company for the support of Bavaria as a centre for science and innovation within the European research area and coordinates and accompanies cooperation between public and private research. This includes the promotion of active cooperation and not merely the provision of financial means by industry. BayFOR is mainly active in four core areas: first it takes care of the EU funding programmes through the application of EU grants, second it coordinates joint research activities of the Bavarian Research Cooperation and promotes networking at European level, third it fosters international scientific cooperations and finally it manages the EU liaison office in Brussels. The Bavarian Research Cooperation is a unique network of scientists from different disciplines. When participating in such a cooperation, researchers work together on defined topics while operating from different locations. A Research Cooperation can either be formed on the basis of a current need or as a direct investment in the future, in order to secure Bavaria's position as a centre of research and industry. Research Cooperations are financed for a limited period of three to six years. At the end of a Research Cooperation, BayFOR assists in evaluating the results.


With regard to horizontal policy co-ordination, it can be stated that a lot of activities especially between the ministries and the different implementation organisations, have recently taken place in the form of inter-ministeral working gropus. The results from these working groups are summarised in a main document as regards RTDI policy in Bavaria: Gesamtkonzept für die Forschungs-, Technologie und Innovationspolitik der Bayerischen Staatsregierung; Beschluss der Bayerischen Staatsregierung (Bayerische Staatsregierung, 2011b). It defines the framework conditions for RTDI policy as well as its strategic goals. Additionally, it promotes a joint regional understading of technology and technology support. In this document, the Bavarian government defines technology policy as a key element within an economic policy to strengthen the regional economy. It perceives innovation and technology policy as a major factor in maintaining internationally competitiveness. According to the Bavarian government, the formulation of a general RTDI policy framework on the national level is not sufficient to ensure Bavarian interests. It needs to be mentioned here that the Bavarian technology policy builds upon a long standing experience of economic-, structural- and infrastructure policy as well as regional industry policy. These policies traditionally comprised innovation oriented elements regarding the promotion of structural techno-economic change. Only recently, emphasis has been placed on the thematic direction and on the formation of the industry-policy-science relationships. Different technologies constitute a key engine of the region's ability to grow and maintain competitive. A major instrument for cross-boarder policy co-ordination are the INTERREG IV programmes and cross-boarder projects respectively. This is especially important since Bavaria has common boarders with two countries: Austria and the Czech Republic. Bavaria is currently participating in seven INTERREG IV-programmes:

• Cross-boarder cooperation between Bavaria and the Czech Republic; • Cross-boarder cooperation between Bavaria and Austria; • Cross-boarder cooperation Alpenrhein-Bodensee-Hochrhein; • Transnational cooperation central Europe; • Transnational cooperation Alps; • Transnational cooperation North-west Europe; and • Interregional cooperation.

In most of these programmes, innovation and the strengthening of regional competitiveness by means of transnational, interregional and cross-boarder cooperation are major fields of action. In the last few years different innovation support organisations have been created in Bavaria over the last years. They are grouped together into an umbrella organisation, the so-called „Haus der Forschung“ (House of Research). Four major innovation support organisations are represented by this organisation: Bayern Innovativ GmbH, BayFOR GmbH, Bayerische Forschungsstiftung (BFS) and Innovations- und Technologiezentrum Bayern (ITZB). The latter was created by the merger of the innovation advisory centres for Southern Bavaria (IBS) and for Northern Bavaria (IBN). As far as innovation financing and SME financing are concerned, the Bayerische Beteiligungsgesellschaft mbH (BayBG) is the major regional actor. Moreover, it complements the funding instruments as provided by the national institutions, the above mentioned KfW in particular. Notably, the provision of equity capital is BayBG’s main task. BayBG’s main shareholders are banks as well as branch associations of other banks, which are mostly located in Munich but also in other parts of Bavaria. BayBG offers support with the aid of various programmes for growth, innovation, turn-around, ownership succession, partner withdrawal, spin-off projects and others. In order to do so, BayBG has developed various programmes in support of local enterprises in different sectors. Implementation mechanisms and organisations For the implementation of the Bavarian RTDI policy instruments, several (semi-)public bodies have been established: e.g., "Bavaria Innovative" (Bayern Innovativ GmbH) is responsible for technology-transfer activities, "Bayern Kapital GmbH" is


responsible for venture capital financing, several technology and start-up centres are responsible for supporting entrepreneurial activities, etc. Another important agency is the Bavarian Research Foundation, which supports innovative research projects and knowledge transfer activities. Within the Cluster Offensive Bavaria, the region aims to enhance Bavaria's role as a top location for business and research in nineteen pre-defined branches and technologies with high importance for the future competitiveness of Bavaria. By promoting cooperation between companies and research institutions, the Bavarian state government aims to create a dynamic and self-organising process of growth and development within these nineteen fields. Nineteen cluster management organisations coordinate the networking activities between enterprises, private and public research institutes.

A comprehensive overview of the institutional set-up and coordination mechanisms of the regional RTDI policy making is illustrated by the following figure.

Figure 2-1: Management and implementation structure of regional innovation strategy

Source: Own assessment

2.3 Availability and use of policy intelligence tools The application of policy intelligence tools (tools that strengthen the strategic dimension of RTDI policies) is well advanced in Bavaria. Bavaria is a federal state with its own parliament and own ministries that routinely perform a number of the functions typically associated with policy intelligence tools by means of internal co-ordination and mission development. They also operate within the framework of the general parliamentary activities.


With regard to strategy development, both the MWIVT and the MWFK clearly state the approach and goals of the regional RTDI policy in a relatively new policy document of May 2011, entitled „Overall Concept for Research, Technology and Innovation policy of Bavaria“ (Bayerische Staatsregierung, 2011). This key report was developed on an inter-ministerial basis and was made public. The topics covered in this report are manifold:

• Critical assessment of the current situation: identification of strengths and weaknesses, potentials and issues calling for action in the Bavarian innovation system within the next few years;

• Development of strategic goals that guide regional RTDI policy making;

• Definition of priorities (sectors, key technologies, research infrastructure, future industries).

Additionally, this paper highlights opportunities for improvement as regards strategic policy instrument tools. For example, it mentions the establishment of a Bavarian Research and technology council that should accompany the process of RTDI policy making in the future. Thus, with the publication of this key report the Bavarian government contributed towards greater transparency regarding the innovation policymaking process. Moreover, with the creation of several intertwined implementation agencies for the regional innovation and research policies, the regional government has developed an adequate implementation system. In addition to that, evaluations are frequently used to assess and monitor the quality of certain RTDI programmes and projects. Such evidence based methods are frequently used tools in regional policy making, especially to adjust single measures according to their past performance and to future regional development perspectives.

2.4 Key challenges and opportunities The analyses in this chapter and in the previous one showed that although the overall economic situation in Bavaria is rather good and the innovation infrastructure can be considered as exemplary in many respects, Bavaria will nevertheless face certain challenges in the next few years. A key advantage in innovation policy governance can be seen in the long tradition of RTDI policy making in Bavaria. The region can draw on previous experiences as regards an adjustment of policies to changing conditions (internal changes as well as challenges externally exposed). As two sides of the same coin, the challenges as listed below (and identified by regional policy makers and experts) bear – of course – new opportunities for further regional development and economic potential.

• In terms of size, Bavaria is a relatively large region and intra-regional disparities inevitably occur. This becomes especially apparent when comparing the economic and innovation centres (such as Munich and Nuremberg) with more peripheral parts of the region. sub-regions in the North and the East of Bavaria are especially somewhat lagging behind as regards innovation dynamics as well as innovation infrastructure. It is a major goal of the Bavarian government to ensure equivalent living and economic conditions in all parts of the region. Each part of Bavaria should be developed according to its comparative strengths and investments in the regional (innovation) infrastructure should be supported by policy measures and government investments. This, however, bears future opportunities for the sub-regions to gain more national and international visibility according to their comparative innovation and technological strengths.

• Demographic change is an important issue in Germany in general and in Bavaria in particular. If it is unanticipated, it can threaten the regional economic and growth potential. Thus cushoining demographic change with regards to the region’s innovation potential will present a key challenge over the next few years.. In this context, innovation and advances in productivity


are seen as major forces to remain competitive, even under unfavorable demographic conditions as regards the regional labour-force.

• The Federal government of Germany decided on 30 June 2011 to perform an energy transition towards an energy supply without any nuclear energy production by 2022. This includes a transition towards renewable energy production and poses challenges to Germany but also to the German federals states. In 2011, 60% of Bavaria’s energy consumption came from nuclear energy production. Based on the recommendations from an expert commission (Gerhäuser and Achatz, 2011), the government of Bavaria considers the challenges posed by the energy transition as very important and decided to invest in the energy sector and in energy infrastructure but also in energy technology and the development of alternative energy technologies over the next years (Bayerische Staatsregierung, 2011).


3. Innovation Policy Instruments and Orientations The Bavarian government defines its regional innovation policy as a major element to strengthen the regional economy. Divided into greater details, the Bavarian government perceives research, technology and innovation as a corner stone for the societal development and economic wealth. The Bavarian RTDI policy aims at a the sharpening of a societal consciousness for the importance of science, innovation and research, the shaping of favourable framework conditions for research, technology and innovation in order to increase the competiveness of the region’s enterprises and thus to develop and employ RTDI policy instruments that suit these goals. (Bayerische Staatsregierung, 2011b) Additionally, the goal is to ensure educational excellence in Bavaria and to empower the region to assess itself over the next few years. Thus, regional RTDI policies are directed towards the future economic development of the region, especially through implementing the current research and development programme “Bavaria in 2020: a place for children, education and employment”.

3.1 The regional innovation policy mix Meanwhile, regional RTDI policies have a tradition of several decades in Bavaria. However, priorities of the Bavarian RTDI policy have changed significantly over the last 50 years. The shifts in priorities can be summarized broadly as follows: RTDI policy in the 1950s can be mainly associated with an improvement of the transportation infrastructure. During the 1960s, this type of policies was concentrated on the development of energy maintenance, whereas during the 1970s efforts were concentrated on the development of the research infrastructure and promotion of high-tech industries. The 1980s brought a focus on microelectronics. During the 1990s, Bavaria’s RTDI policies were directed towards an institutionalized high-technology promotion, including accelerating structural change and the fostering of entrepreneurial activities. Since 2000 RDTI policies increasingly included the support of start-ups and regional clusters. In short, regional RTDI policies gained momentum in 1993, when the state of Bavaria launched its campaigns to develop high-tech industries for a successful future. Up-to date, regional government has supported R&D programmes, totalling some €4.2b. The funding was and is still used to improve and extend the state’s research infrastructure, and to support the development and deployment of the new/high-tech technologies (Bavarian Ministry of Economic Affairs, Infrastructure, Transport and Technology, 2008). At the present time, there are several interconnected funding programmes relevant to regional innovation policy. Major thematic areas of funding are:

• traditional industries such as the automotive industry, mechanical engineering, plant construction;

• cross-section technologies such as laser technology, micro-systems technology, mechatronics and new materials;

• innovative future technologies such as biotechnology, nanotechnology, aerospace technologies and information- and communication technologies;

• support of networks and clusters. A recent impetus in this regard has been the "Bavarian Cluster Campaign", which started in 2006, as a successor to the major initiatives “Initiative for Bavaria’s future” (Zukunftsoffensive Bayern, from 1994-1999) and “High-Tech Offensive Bavaria” (2000-2005). The main objective of the cluster campaign is to promote the networking of and among Bavaria’s SMEs (small and medium-sized enterprises). The campaign focuses on nineteen branches and technology fields, which were identified as being of high importance for the region’s future. The clusters are grouped around five overarching themes:

• mobility (automotive, rail technologies, logistics, aerospace, satellite-based navigation);

• materials engineering (advanced materials, chemistry, nanotechnologies);


• life sciences and environment (biotechnologies, medical technologies, energy technologies, environmental technologies, forestry and wood, nutrition);

• information technologies and electronics (ICT, sensor technologies and high performance electronics, mechatronics and automation); and

• financial services and media. Most recently, the Bavarian government has presented the BayernFIT programme, which subsumes a variety of different RTDI policy measures to strengthen the regional innovation potential within the next years until 2020 and beyond. It provides a rather comprehensive overview of the innovation policy mix of Bavaria by presenting all relevant measures with their geographical scope (whole of Bavaria vs. single sub-regions in Bavaria), financial volume, addressees, expected outcomes and a brief description of the measure. The content is organised according to five key pillars:

• Presentation and concretion of the programme “Bavaria 2020”; • Presentation and concretion of the programme “Bavaria 2020 Plus”; • FITness Programme for Northern and Eastern Bavaria; • BayernFIT Alliance for research, technology and innovation; and • BayernFIT Pact for Innovation.

The BayernFit prgoramme presents the wide range of innovation policy measures coming from the regional level that have been implemented in Bavaria during the last years. Key measures (as mentioned by the BayernFIT Programme) are:

• Programme for the creation of new university places (€570m); • Bavarian Cluster campaign (€70m); • Location or regional relevant industrial research and investment initiatives

(€50m); • Risk capital and support of young technology-oriented enterprises (€30m); • Infrastructure for applied research and technology transfer (especially the

creation and support of Fraunhofer institutes in Bavaria) (€77m); • Research initiative for composite materials and mechatronics (€55m).

These measures are complemented by a large number of initiatives as regards research infrastructure support and development (e.g. construction of new buildings, laboratory equipment, infrastructure in universities and universities of applied sciences). These also include several important measures, which were implemented a long time ago and thus have proven to be rather successful (e.g. Bavarian Programme to support Technology-oriented Start-ups (BayTOU)).

Moreover regional innovation support measures are complemented by federal R&D support measures, especially for innovative enterprises and public research institutes. These initiatives are either technology oriented and/or directed towards regional development. Since the 1990s, these measures have very often been organised in form of competitions, so that a number of activities and initiatives have to come from the region or sector itself. The Bavarian government explicitly aims at getting complementary funding from the national level and has integrated this into its concept.


Table 3-1 Overview of the regional innovation policy mix

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Research and Development Projects in the Field of Biotechnology and Genetic Engineering (BayBIO)

1.3.1. Cluster framework policies 2.2.3. R&D cooperation 2.3.1. Direct support of business R&D (grants and loans)

R&D Programme “Information and Communication Technologies”

2.3.1. Direct support of business R&D (grants and loans) 1.2.2. Innovation strategies

Bavarian Research Foundation

2.2.3. R&D cooperation 2.2.2. Knowledge Transfer

3.2.3. Mobility of researchers (e.g. brain-gain, transferability of rights)

Bavarian Technology Funding Programme (BayTP)/Techno credit

4.1.1. Support to sectoral innovation in manufacturing 4.1.2. Support to innovation in services

FLÜGGE: Support Programme for an Easy Transition into Entrepreneurial Existence

4.3.1. Support to innovative start ups incl Gazelles 2.2.2. Knowledge Transfer

Bavarian Programme to support Technology-oriented Start-ups (BayTOU)

4.3.1. Support to innovative start-ups incl Gazelles

2.2.2. Knowledge Transfer

Bavarian Cluster Offensive

1.3.1. Cluster framework 2.2.3. R&D cooperation policies

* addressed implicitly through regular high-level co-ordination and ministerial missions; ** additionally addressed through regional higher education policy Source: own assessment based on the RIM database Financial means from the EU structural funds are used for example to co-finance clusters and networks, research and competence centers as well as technology transfer centers, environmental research, and innovation in SMEs and young enterprises.

As Table 3-1 and Table 3-2 show, the range of support measures can be considered as rather comprehensive. It ranges from the use of policy intelligence tools and comprehensive and coordinated action programmes and reports to the support of business research, clusters and R&D networks, early stage-financing, the stimulation of entrepreneurship, incubators/science parks, innovation in the service sector, support of international co-operation and knowledge transfer, support for new technology-based firms, an enlargement of the research infrastructure, science-industry co-operation, entrepreneurial skills for innovation, support of start-ups/spin-offs, support of universities, and to human resource policies. Among the measures


listed in Table 3-1 and Table 3-2 the major target groups are often enterprises or R&D networks. Innovation policy measures also address universities and non-university research institutes.


Table 3-2 Existing regional innovation support measures

Title Duration Policy Priorities Budget Organisation responsible

More information

Research and Development Projects in the Field of Biotechnology and Genetic Engineering (BayBIO)

Forschungs- und Entwicklungsvorhaben auf dem Gebiet der Bio- und Gentechnologie (BayBIO)

From: 2008 To: 2013

• •Science-industry cooperation

• •Small and medium-sized enterprises

• •New technology-based firms

€2.42m (2009) • Bavarian State Ministry for Economic Affairs, Infrastructure, Traffic and Technology

• http://www.foerderdatenbank.de/


FuE-Programm „Informations- und Kommunikationstechnik“

From: 2009 To: 2014

• Information and communication technologies

• Innovation culture

• Small and medium-sized enterprises

€2.81m (2009)

• Bavarian State Ministry for Economic Affairs, Infrastructure, Traffic and Technology

• http://www.iuk-bayern.de/


Bayerische Forschungsstiftung

From: 1990 To: open

• Science-industry cooperation

• Knowledge transfer

Up to now: €455m • Bavarian Research Foundation

• http://www.forschungsstiftung.de/


Bayerisches Technologieförderungs-Programm (BayTP)/Technokredit

From: 2009 To: 2014


• New technology-based firms

€8.6m


• http://www.izu.bayern.de/foerder/programme/


FLÜGGE:

From: 1997 To: No fixed end date

• Start-ups/spin-offs

• Entrepreneurship

Up to now: € 8.5 m

• Bavarian State Ministry for Sciences, Research and the Arts

• http://www.fluegge-bayern.de/


Title Duration Policy Priorities Budget Organisation responsible

More information

Förderprogramm zum leichteren Übergang in eine Gründerexistenz

Bavarian Programme to support Technology-oriented Start-ups (BayTOU) Förderung technologieorientierter Unternehmensgründungen (BayTOU)

From: 1996 To: 2014


• Start-ups/spin-offs



• http://www.startup-in-bayern.de/themenmenue/foerderung/zuschuesse/foerderung-technologieorientierter-unternehmensgruendungen.html

Innovation vouchers Innovationsgutscheine

From: 2009 • Small and medium-sized enterprises


• Bayern Innovativ • http://www.innovationsgutschein-bayern.de/

Source: own compilation based on the RIM repository


It is difficult to name the three single most important measures, as most of them fulfil a specific role in the regional policy mix that can only produce the outcomes that it is currently achieving as a systemic whole. However, the following measures can be regarded as rather important or rather successful in the context of regional RTDI policy:

1. Bavarian Cluster Initiative: a corner stone in the regional RDTI policy mix during the last years, since it aims at addressing the Bavarian economic and research sector as a whole, due to its orientation towards 19 important and relevant sectors not only today but also with future potential. Additionally, it has been successful in spurring the development of networks and research cooperation activities as well as the acquisition of further funding from the national and European level. Two evaluations have lead to a slight modification of the programme’s key aspects. The programme is currently in its second phase of funding (until 2015).

2. Innovation vouchers: Although this measure was not introduced until 2009, it can already be regarded a great success. It addresses small- and medium-sized enterprises and can be interpreted as a complementary measure to the above mentioned Bavarian Cluster Initiative. SMEs can apply for a funding of €7,500 (maximum) in a rather non-bureaucratic manner to finance R&D projects with external partners. Within two years, more than 600 enterprises successfully applied and received funding for their projects. An additional goal of this measure is to initiate R&D cooperation between SMEs and public research institutes and R&D business service enterprises.

3. House of Research (Haus der Forschung): a new innovation entity that was founded in 2010, based on a decision by the Bavarian Council of Ministers. The focus of the House of Research is to provide Bavarian stakeholders with integrated advisory services on research and innovation funding which includes comprehensive information and assistance in the application procedure for EU funding programmes in the form of a one-stop-shop. The House of Research is located in Nuremberg and Munich. It is a cooperation of Bayern Innovativ GmbH, BayFOR GmbH, Bayerische Forschungsstiftung (BFS) and Innovations- und Technologiezentrum Bayern (ITZB), the latter of which was created by the merger of the innovation advisory centres for Southern Bavaria (IBS) and Northern Bavaria (IBN). All cooperation partners retain their legal independence and remain in the competence of the respective ministry sections. However, it seemed to be appropriate and important to assemble the four key agencies and actors under a single physical roof and thus to increase communication and cooperation between them for the benefit of regional stakeholders..

3.2 Appraisal of regional innovation policies In general, the overall approach to regional innovation policy by Bavarian policy makers can be considered as rather successful. Innovation policy making has a very long tradition in Bavaria and the regional government has often anticipated trends and up-coming challenges appropriately and reacted in a visionary way. As a consequence, the regional innovation policy mix was and still is adjusted regularly to accommodate pressing challenges. Innovation policy making began as a systematic development of the transportation and energy infrastructure, moved on to the promotion of high-tech industries and the strengthening of various sub-sectors along with the support of entrepreneurial activities and R&D and finally addressed the development of clusters and R&D cooperation.

The Bavarian RTDI policy focuses on the (traditional) manufacturing sector as well as on high-technology and knowledge-intensive service sectors. It is part of the innovation strategy to address all relevant sectors and additionally to put an emphasis on SME support. Firms, universities, higher educations institutes, research institutes and other regional stakeholders are likewise addressed by the region’s different support measures.


The impact of these measures or the effectiveness of the whole regional innovations system is strongly connected to the enormous amount of financial input. Within the context of the "Future Offensive Bavaria" (which was implemented in 1994) and the "Bavarian High-Tech Offensive" (implemented in 2000), approximately 4.25 billion Euro have been allocated.

Bavaria’s government has the desire to keep its autonomy as regards RTDI policy making. It appreciates national initiatives and tries to profit as much as possible from innovation policy measures and programmes from higher policy levels. At the same time it is the aim of the Bavarian government to limit interferences with higher policy levels. Moreover, with the regional innovation policy mix the regional government tries to address pressing issues in a complementary way and fill gaps that aren’t addressed by measures and programmes from higher levels. Therefore, the Bavarian government has designed various regional policy measures to accurately meet the needs of the Bavarian situation, as already mentioned before.

3.3 Good practice case The Bavarian Cluster Initiative2 is a very important instrument in the regional policy mix and it can be considerd as a good practice example due to its overall design and its leverage potential.

Firstly, the Bavarian Cluster Initiative is presented as a good model for successful interaction in regional innovation systems by the IRE Working Group (IRE Secretariat, 2008). Secondly, and as regards the coordination with other funding programmes the cluster report “Clusters are Individuals” states the following: “Asked about the coordination of the program with other funding programs program officials reported a good coordination with other R&D and business development programs, while the coordination with infrastructure programs was assessed as rather weak.” This gives additional proof of the good coordination of this measure with other R&D measures and programmes (Lämmer-Gamp, et al., 2011). Initialised by the State Ministry of Economic Affairs, Infrastructure, Transport and Technology in 2007, the Bavarian Cluster Initiative addresses primarily enterprises and tries to motivate them to engage in cluster structures and regional innovation networks. It concentrates its activities on nineteen sectors and technologies with high importance for the future of Bavaria. By promoting cooperation between companies and research institutions the Bavarian state government aims to create dynamic and self organising processes within these nineteen fields.

The main goal of Bavaria’s cluster-building policies is to enhance the ability of the regional companies to compete on globalized markets (Bavarian Ministry of Economic Affairs, Infrastructure, Transport and Technology, 2009). By doing so, the main objective was to promote the networking of and among Bavaria’s SMEs. The policy measure and its goals were inspired in a twofold way: firstly, by success stories from remarkable networks or clusters such as Silicon Valley (IT) or Oxford (life sciences) and secondly by the ideas generated and published by Michael Porter (Bavarian Ministry of Economic Affairs, Infrastructure, Transport and Technology, 2009).

Although cluster policies or network policies are neither new in Germany nor in Bavaria, the Bavarian Cluster Initiative can be perceived as a innovative successor to prior regional networking initiatives during the 90s, such as campaigns for Bavaria’s future and Bavaria’s high-tech initiative. As regards synergies and complementarities with national innovation policy measures, the Federal Ministry for Education and Research (BMBF) has launched a leading-edge cluster competition and two Bavarian

2 Further information is available on the official web-page (in German): http://www.cluster-bayern.de/


clusters are also supported by this measure: the Medical Valley EMN and the Münchner Biotech Cluster m4 (Bundesministerium für Bildung und Forschung (BMBF), 2010). It has to be mentioned, however, that the explicit goal of the regional initiative was to generate leverage effects with national or supra-national measures.

After a positive evaluation in 2010, the Bavarian government recently announced some changes towards future organisation of the overall initiative: A major change is that the (nonetheless successful) clusters high-performance electronics, logistics, biotechnology and medical technologies will be restructured into networks, while future funding will be focused on the other clusters, where funding has been so far most successful in generating additionality. As regards the impacts of this measure it can be stated that up to now 5,300 Bavarian enterprises are active members in one or more regional clusters and that 3,500 events have been organised with approximately 200,000 participants (Source: http://www.cluster-bayern.de/), additionally, the network structure resulted in 350 cooperation projects with SMEs.

3.4 Portfolio of innovation support measures Potential conflicts between policy objectives and measures could not be identified. The measures are in general designed according to the policy objectives and the mixture of the different support measures appear to be coherent. Policy measures address a wide range of potential beneficiaries like enterprises from different sectors which are active in different technologies, different kinds of higher education institutes, very small and medium enterprises, start-up enterprises, technology transfer organisations, public research institutes and further regional stakeholders. In addition, some of the innovation policy measures are designed in such a way as to spur innovation and economic performance in certain rural parts of Bavaria and thus acknowledge existing intra-regional disparities of the region.

Redundancies between different measures seem to be the exception – at least on the regional (i.e. Bavarian) level but also with policy instruments from superior levels. Bavaria profits from national initiatives, often due to its excellent performance in many respects. Bavaria was, for example, very successful as compared to other federal states in Germany in the „Intitiative for Excellence“ which was launched by the Federal Ministry for Education and Research (BMBF). In addition, Bavaria tries to develop regional innovation policy measures to fill the gap, where federal measures leave the regional innovation system unaddressed. Finally, it has to be mentioned that it is an explicit goal of the regional innovation policy mix to generate leverage effects with national or supra-national measures where possible.

In an assessment of the policy fields that address other socio-economic challenges and thus can be considered as complementary to RTDI policy making it has to be stated, that the Bavarian government is not completely autonomous. It acts on the same level as other federal states and is embedded in the federal system of Germany and therefore sovereignty is restricted to certain fields. Thus, traditional labour market policy as well as social policy measures are implemented on the national level rather than on the level of the federal states.

As regards different sources of funding, it has to be stated that the share of European (especially ERDF and ESF funding) is relatively low. On the contrary, the regional budget for innovation policy is quite large as compared to other European regions. Bavaria started its large investment initiative during the 1990s, when the federal state privatised state property and used the revenue for reinvestments within the policy initiatives “Initiative Future Bavaria” as well as the “High-Tech Initiative”. Both initiatives focused on a modernising of the economy, society and the region. A more or less similar investment strategy can be observed today. The Bavarian government decided in 2008 to use further revenues from privatisation, which were originally budgeted for the construction of the Transrapid high-speed magnetic-levitation train between the city of Munich and Munich Airport, for further


investments in high-technology sectors in all parts of Bavaria and thus to spur Bavaria’s innovation potential. Today, all measures and initiatives are subsumed under the roof of the programmes “BayernFIT” and “Zukunft Bayern 2020” (Future Bavaria 2020).

3.5 Towards smart specialisation policies Over the last couple of years the role of smart specialisation has become central to economic development and growth policy-thinking in Europe (McCann/ Ortega-Argilés, 2011; Walendowski 2011). Although the original concept was entirely sectoral in its construction, more recent studies pursue a broader, holistic approach. According to McCann and Ortega-Argilés (2011), the smart specialisation approach is characterised by two distinct features: The first relates to the fundamental logic of the innovation system, and assumes that context matters for the potential technological evolution of the system and that the evolution of an innovation system depends on the inherited structures. The second relates to the perceived mechanisms by which the strategy operates. Thus, smart specialisation is much more than placing greater emphasis on innovation and focusing on scarce human and financial RTDI resources in a few globally competitive areas in order to boost economic growth and prosperity. It demands a thorough assessment of the (regional) innovation system in order to appreciate and understand the evolutionary nature of regional economies, and also the design of appropriate policy-making. This holds in particular for the case of Bavaria. As already mentioned, in the 1990s Bavaria began with a sector oriented innovation policy, starting with the “Offensive Zukunft Bayern” in 1994, that already put a particular focus on the support of high-tech industries, the knowledge intensive service sector and start-up enterprises in general. With its successor “High-Tech Offensive Bayern” starting 1999 and with its main funding period 2000-2005, five main and relevant technologies and industrial sectors received special attention: life sciences, ICT, new materials, environmental technologies and mechatronics. The sectoral focus was enlarged with the Cluster Initative Bavaria, especially during the first funding period 2005-2010 and altogether 19 different regional clusters were defined. Today the Bavarian government perceives the following: “The success of Bavaria in research and technology can be traced back to a diversified support of key technologies and the corresponding fields of science that are the basis for many fields of application.” Furthermore, the Bavarian government has several additional policy guiding principles: First, a balanced budget defines the scope for action, secondly the identification of new key technologies that will gain importance in the future and third a strong application orientation. As regards “Smart Specialisation” in Bavaria, the following can be stated: Starting from a very narrow approach that focused on certain key sectors and technologies, innovation policies today are characterised by a rather broad sectoral approach. However, the sectoral focus is not arbitrary but elaborated according to regional needs and potentials and more importantly, it is revised on a regular basis in order to acknowledge regional and technological evolution. To conclude: Although the sectoral focus is rather broad, the region has been working on and according to smart specialisation principles for more than 15 years. Policy changes are stimulated by global competition as well as by national and supra-national policy decisions. Specialisation and sectoral policies are complemented by other form of support measures without any particular industry or technology focus (e.g. innovation vouchers). In addition, and although industry and technology oriented in its concept, the Bavarian cluster policy aims at an integration of potentials in public research, higher education and industry by revealing synergies.


3.6 Possible future orientations and opportunities Over the last few decades, Bavaria has developed significant knowledge about innovation policy governance and the design of appropriate innovation policy programmes and measures. The actions taken by the Bavarian government have generally been future-oriented and innovation policy is used to prepare the regional economy as well as possible for the development and use of key future technologies. Thus, it is not surprising that the Bavarian government has already addressed several pressing issues in the support programmes of today, based on the recommendations of an inter-ministerial working group with experts in 2011. The government of Bavaria has identified several key dimensions for action until 2020 and has addressed them in the programme scheme of BayernFIT. RTDI policy measures should target the following issues during the coming years and either help to overcome current deficiencies or facilitate the continuation of present fields of success:

• Development of additional university places at Bavarian universities • Continuation of cluster support • Strengthening of applied research and technology transfer • Support of further research and technology fields that are oriented towards

future challenges such as Immune research, nanotechnology, dementia, polytronic, robotics

• Infrastructure of Bavarian universities • Regional support of north and east Bavarian regions for further development

as regards their technology specialisation and distinct competences • Support for SMEs and higher education institutes by bundling competences in

a new agency that should advise and consult particular SMEs and smaller higher education institutes

• Ratification of a joint agreement between the Bavarian government and business associations to promote the Bavarian economy through a stronger engagement in R&D and innovation.

An ongoing issue for future development is better integration of and coordination with higher policy levels but also among and between regional instiutional actors.


Appendix A Bibliography

Bavarian Ministry of Economic Affairs, Infrastructure, Transport and Technology (2009) Bavaria’s clusters campaign Networking success. Available at: www.cluster-bayern.de/_Downloads/Cluster_Initiative_Bavaria.pdf Bavarian Ministry of Economic Affairs, Infrastructure, Transport and Technology (2008) Bavaria’s technology development policies. Available at: http://www.stmwivt.bayern.de/fileadmin/Web-Dateien/Dokumente/technologie/Bayerische_Technologiepolitik_engl.pdf Bayerische Staatsregierung (2011a) Bayerisches Energiekonzept „Energie innovativ“. Available at: http://www.bayern.de/Energie-.1732.10345448/index.htm Bayerische Staatsregierung (2011b) Gesamtkonzept für die Forschungs-, Technologie- und Innovationspolitik der Bayerischen Staatsregierung. Available at: http://www.stmwivt.bayern.de/technologie/ Bundesministerium für Bildung und Forschung (BMBF) (2010) Deutschlands Spitzencluster Germany’s Leading-Edge Clusters. Available at: http://microtec-suedwest.de/cms/upload/PDF_extern/Broschre_Deutschlands_Spitzencluster.pdf ERAWATCH Network (2008): Case Study Report for Region: Bavaria (Bayern) for the Specific Contract: Contribution of Policies at the Regional Level to the Realisation of the European Research Area (Experts/Authors: T. Stahlecker, E. Baier). Brussels. Available at: http://erawatch.jrc.ec.europa.eu/erawatch/opencms/information/reports/reg_level Gerhäuser H. and Achatz R. (2011) Rahmenkonzept Bayerische Allianz für Energieforschung und –technologie, Empfehlungen der Expertenkommission. Available at: http://www.bayern.de/Pressemitteilungen-.1255.10353869/index.htm Innovating Regions in Europe (IRE) Secretariat (2008) Effective Regional Innovation Systems Final report. Available at: http://www.stmwivt.bayern.de/fileadmin/Web-Dateien/Dokumente/technologie/Effective_Regional_Innovation_Systems.pdf Lämmer-Gamp T., Meier zu Köcker G., Christensen T.A. (2011) Clusters are Individuals. Danish Ministry of Research, Innovation and Higher Education. Available at: http://en.fi.dk/publications/2011/clusters-are-individuals-creating-economic-growth-through-cluster-policies-for-cluster-management-excellence/Clusters_Indhold_WEB_v2.pdf McCann P., Ortega-Argilés R. (2011) Smart Specialisation, Regional Growth and Applications to EU Cohesion Policy, Document de treball de l’IEB 2011/14. Available at: http://www.ieb.ub.edu/aplicacio/fitxers/2011/7/Doc2011-14.pdf


Walendowski J. (2011) Policies and Processes of Smart Specialisation: Realising New Opportunities. Available at: http://www.rim-europa.eu/index.cfm?q=p.file&r=8a7c0835b2cf142ae9940f48c7c2132b


Appendix B Stakeholders consulted

Dr. Manfred Wolter, Head of the Department "Research and Technology Policy, Bio-technology and Genetic Engineering, Design" at the Bavarian Ministry of Economic Affairs, Infrastructure, Transportation and Technology (date of interview 02/12/2011).

Prof. Dr. Ing.-habil. Josef Nassauer, Director of Bayern Innovativ (date of interview 07/12/2011).


Appendix C RIM Repository information

Baseline regional profile

DEUTSCHLAND BAYERN Region BavariaNUTS Code DE2

Regional Profile

In t roduct ion

The Free State of Bavaria is one of 16 German federal states (Bundesländer)located in the southeast of the Federal Republic of Germany. In 2008, its totalpopulation was 12.52m, 15.2% of national total. Its capital city is Munich. Bavariaborders the Länder of Baden-Württemberg and Hesse, Thuringia and Saxony aswell as the countries Austria and the Czech Republic.

Repository

Suppor t measures

Research and Development Projects in the Field of Biotechnology and GeneticEngineering (BayBIO)R&D Programme “Information and Communication Technologies”Bavarian Research FoundationBavarian Technology Funding Programme (BayTP)/Techno creditFLÜGGE: Support Programme for an Easy Transition into EntrepreneurialExistenceBavarian Programme to support Technology-oriented Start-ups (BayTOU)

Policy documents

Cluster Offensive BavariaERDF Operational Programme under the Competit iveness and EmploymentObjective, Bavaria 2007-2013BayernFIT – Research, Innovation and Technology – The New InnovationProgramme of the Bavarian State Government

Organisat ions

Bavarian State Ministry for Sciences, Research and the ArtsBavarian State Ministry for Economic Affairs, Infrastructure, Traffic andTechnologyBavarian Research Foundation

http://www.rim-europa.eu/index.cfm?q=p.baseline&r=DE

http://www.rim-europa.eu/index.cfm?q=p.baseline&r=DE2

http://www.rim-europa.eu/index.cfm?q=p.support&n=14651&r=DE2








http://www.rim-europa.eu/index.cfm?q=p.policy&n=12396&r=DE2





http://www.rim-europa.eu/index.cfm?q=p.organisation&n=12393&r=DE2




Economy

In 2008, regional GDP in Bavaria was €444.8b, accounting for 17.8% of the overallGerman GDP. This share has been relatively stable over the past decade. RegionalGDP per capita reached €33,256 in 2006, which amounts to 117.9% of the Germanaverage. The regional labour force in 2008 amounted to 6,641 million, 16.5% ofthe national total. Most employees work in services (62.2%), while 37.0% work inindustry and 0.7% in the agricultural sector. These figures differ from the nationalaverages (66.5/31.1%/2.4%), indicating an emphasis on industry. In 2008,unemployment in Bavaria was at 4.8%, well below the national average of 8.7% andthe second lowest of al l German states, behind Baden-Württemberg.

Bavaria 's economy has undergone significant structural changes over the past 50years, transforming from a tradit ional agricultural region towards one of Europe'smost competit ive industrial regions, featuring an important and growing servicessector. Important industry branches are automotive industr ies ( including supplierbranches), electrical engineering and mechanical engineering. In addition, Bavariais one of the leading international regions for high technology fields such asinformation and communication technologies (ICT) and biotechnology. Also, it isamong Germany's most important regions in the services sector , major branchesbeing insurance and financial services.

There are large regional economic disparities within Bavaria. The major economicregion is the area around Munich with several global players in the automotiveindustry (Audi, BMW, MAN, Knorr-Bremse), ICT (Siemens), media and publishingas well as military industry. Other import regions include Augsburg, Ingolstadtand Nuremberg.

Research, Development & Innovation

The overall RTDI intensity in Bavaria can be characterised as high in comparisonto other German regions; the "Stifterverband für die deutsche Wissenschaft" ranksBavaria, together with Baden-Württemberg, as one of the two top performingregions in this regard. The RTDI sector is industry-oriented by German standards:in 2007, the share of regional business expenditure on R&D amounted to 78.6%compared to 70.0% on the national average. In 2008, the region's overallexpenditure on R&D contributed 19.9% (€12.21m) to the German total.Correspondingly, the number of DPMA (German Patent Office) patent applications(13,528) is significantly above the German average (3,077.5) and makes up a 27.5%of national total. In 2008, the German federal government spent 14.2% of its totalexpenditures for R&D in Bavaria (€1,397m). About 19.4% of all German R&Dpersonnel are employed in the region (98,146 FTE), around three quarters thereofin the business sector (71,684 FTE, 22.3% of the national total).

The backbone of Bavaria 's outstanding RTDI performance is i ts diverse andmultifaceted insti tutional research landscape, which comprises nine publicuniversities and 17 state universities of applied sciences (Fachhochschulen). In

addition, Bavaria is home to 12 Max Planck institutes, 12 Fraunhofer institutes andresearch groups, three Helmholtz insti tutes, f ive insti tutions of the LeibnizAssociation, as well as numerous other non-university research insti tutions. Boththe Max Planck Society's and the Fraunhofer Gesellschaft 's headquarters arelocated in Munich.

There are several clusters and research networks with an international reputat ionlocated in the region, e.g., in the fields automotive, aerospace industries, medicaltechnology, and biotechnology.

Governance

As a German federal state, Bavaria has considerable autonomy in R&D policy. Thisis particularly the case for higher education policy where each state independentlyenacts its own legislative framework. Similarly, within the single states, the degreeof autonomy of single higher education insti tutions is rather high in terms ofprofi le and research agenda-set t ing.

The responsibility for regional RTDI policy in Bavaria lies with the regionalgovernment (Bavarian State Chancellery) and is currently divided between twomain ministries: the Ministry of Economic Affairs, Infrastructure, Transportationand Technology (MWIVT) and the Ministry of Science, Research and the Arts(MWFK). Within the MWIVT, technology policy is addressed in variousdepartments: the Dept. for Innovation, Research and Technology, the Dept. forIndustry, Foreign Trade and the Dept. for Medium-Sized Businesses, Services,Crafts. The ministry describes i tself as an 'organizer ' of technology transfer andinnovation management. In addition, the MWVT is responsible for R&D andtechnology funding. Strongly involved in Bavarian technology policy is also theMWFK, which is responsible for higher education institutions and the large-scaleresearch institutions. In addition to MWVT and MWFK, the Bavarian Ministry ofFinancial Affairs (financial responsibility for universities, large-scale researchinstitutions and public credit institutions), the Ministry for Agriculture and Forest(responsible for agro-biotechnology) and the Ministry of Health, Food andConsumer Protect ion (responsible for the funding of health-relatedbiotechnologies) also play a role in RTDI policy.

For the implementation of RTDI policy instruments, several (semi-)public bodieshave been established: e.g., "Bayern Innovativ GmbH" is responsible fortechnology-transfer activities, "Bayern Kapital GmbH" is responsible for venturecapital f inancing, several technology and start-up centres are responsible forsupporting entrepreneurial activit ies, etc. Another important agency is theBavarian Research Foundation, which supports innovative research projects andknowledge transfer activities.

Policy

The Bavarian government defines its regional innovation policy as a majorelement to strengthen the regional economy. The main underlying assumption isthe overall global competition of regions for investors, growth and jobs. Since1994, regional government has supported R&D programmes, totall ing some €4.2b.At the present t ime, there are several interconnected funding programmes withrelevance to regional innovation policy. Major thematic areas of funding are:

tradit ional industr ies such as the automotive industry, mechanicalengineering, plant construction;cross-sect ion technologies such as laser technology, micro-systemstechnology, mechatronics and new materials; andinnovative future technologies such as biotechnology, nanotechnology,aerospace technologies and information- and communicat ion technologies.

A special emphasis l ies on the support of networks and clusters. A recent impetusin this regard has been the "Bavarian Cluster Campaign", which was started in2006, as a successor to the major initiatives "Initiative for Bavaria's future"(Zukunftsoffensive Bayern, from 1994-1999) and "High-Tech Offensive Bavaria"(2000-2005). The main objective of the cluster campaign is to promote thenetworking of and among Bavaria 's SMEs (small and medium-sized enterprises).The campaign focuses on nineteen branches and technology fields, which wereidentified as being of high importance for the region's future. The clusters aregrouped around f ive overarching themes:

mobility (automotive, rail technologies, logistics, aerospace, satellite-basednavigation);materials engineering (advanced materials, chemistry, nanotechnologies);life sciences and environment (biotechnologies, medical technologies, energytechnologies, environmental technologies, forestry and wood, nutrit ion);information technologies and electronics (ICT, sensor technologies and highperformance electronics, mechatronics and automation); andfinancial services and media.

Support measure

DEUTSCHLAND BAYERN Region BAYERNNUTS Code DE2

Support Measure

Title of measure

Research and Development Projects in the Field of Biotechnology and GeneticEngineering (BayBIO)



Full title

Forschungs- und Entwicklungsvorhaben auf dem Gebiet der Bio- undGentechnologie (BayBIO)

Duration

From: 2008 To: 2013

Policy objectives

1.3.1. Cluster framework policies2.2.3. R&D cooperation2.3.1. Direct support of business R&D (grants and loans)

Presentation of the measure

The state of Bavaria supports individual and joint projects to explore and developnew products, technologies, processes and services in the field of modernbiotechnology and genetic engineering. In particular, research and development(R&D) projects in the areas of health, plant and animal breeding and nutritionshould be promoted. Enti t led to apply for funding are enterprises, members ofl iberal professions, research insti tutions or bodies and members of Bavarian stateuniversities.

Keywords

Science-industry cooperat ionSmal l and medium-sized enterpr isesNew technology-based f i rms

Budget, source and type of funding

Currency: EUR

Source of funding 2 0 0 9National public fundsRegional public funds 2,420,000EU Structural fundsPrivate fundsOthe r

Form of funding provided

Gran t s

Policy learning

Extent to which the measure can be considered as a success andworthy of policy learning

It is too early to judge the success of the measure (e.g results of first call forproposals sti l l not known).

Evidence of outcomes based on evaluation and other evidence

As in most German support measures at the regional level , this part icular measurewas not evaluated. Reliable information on its actual effects is therefore availableto a very limited extent. Additionally, there is very little information available onthe effects of similar measures in other regional contexts. Consequently, i t is notpossible to give other than an anecdotal assessment of the outcomes.

Do's and Don'ts

Based on the limited availability of information described above, no reliablerecommendations can be given.

This measure is recommended as an example of regional goodpractice to policy-makers from other regions:

Yes

Organisation(s) responsible

Bavarian State Ministry for Economic Affairs, Infrastructure, Traffic andTechnology

Support measure


http://www.rim-europa.eu/index.cfm?q=p.organisation&n=12371




Support Measure

Title of measure


Full title

FuE-Programm „Informations- und Kommunikat ionstechnik“

Duration

From: 2009 To: 2014

Policy objectives

2.3.1. Direct support of business R&D (grants and loans)1.2.2. Innovation strategies


The Bavarian research and development (R&D) programme "Information andCommunication Technology" aims to improve and accelerate research anddevelopment in the f ield of information and communication technology and i tsimplementation in products, services and business. Enti t led to apply areenterprises, members of the professions, research inst i tut ions, universi t ies andcolleges with headquarter or subsidiary in Bavaria. Small and medium-sizedenterprises (SMEs) are given preference. The implementation of the project mustbe associated with considerable technical and economic r isk and the project musthave a high innovative content. Projects have to be conducted in close cooperationbetween at least two companies, of which at least one has to be a medium-sizedenterprise, or at least one company and one research inst i tute.

Keywords

Information and communicat ion technologiesInnovation cultureSmal l and medium-sized enterpr ises


Currency: EUR

Source of funding 2 0 0 9National public fundsRegional public funds 2,810,000EU Structural funds

Private fundsOthe rForm of funding provided

Gran t s

Policy learning


There has been a positive response by beneficiaries to the measure (e.g.over-subscribed in terms of requested versus available budget) but i t is too earlyto judge resul ts or impact



Do's and Don'ts



Yes



Support measure






Support Measure

Title of measure


Full title


Duration

From: null To: No fixed end date

Policy objectives

2.2.3. R&D cooperation3.2.3. Mobility of researchers (e.g. brain-gain, transferability of rights)2.2.2. Knowledge Transfer


The Bavarian Research Foundation was established in 1990. It aims to promoteresearch, especially between science and industry, and to rapidly exploit scientificfindings by enterprises. Two types of projects are funded: individual ventures andcombined research; in addit ion, scholarships are provided for scientist exchangeprogrammes. The funding duration is l imited, and the projects must be jointlycarr ied out by science and industry. The programme addresses independentindustr ial companies, members of the professions, universi t ies, non-universi tyresearch inst i tutes and universi t ies of applied sciences, and members andestablishments of Bavarian inst i tutes of higher education that are authorised tocarry out research and development programmes in Bavaria are enti t led to submitapplications. They must have their headquarters in Bavaria or be represented bybranches there .

Funding focuses on the following fields: Life Sciences, infomation andcommunication technologies, micro sytems, material sciences, energy andenvironment, mechatronics, nano technology, and process engineering.

Keywords

Science-industry cooperat ionKnowledge transfer


Currency: EUR

Source of funding 9 9 9National public fundsRegional public funds 20,000,000EU Structural fundsPrivate fundsOthe rForm of funding provided

Gran t s

Policy learning


There is evidence of an impact of the measure based on verifiable indicators or anevaluation (e.g. sales generated from new products, jobs created, etc.)


Up to 2010, around 600 projects were funded and around 420 scholarships weregranted. The obligatory co-financing by the business sector more than doubledthe issued foundation funds of approximately €455m. As a result , industry andscience together funded future-directed research topics with a total contr ibutionof approximately €1,012b towards the advancement of innovation (as of 12/2010).

Each project is monitored on the basis of annual reports as well as a surveyconducted 1-2 years after completion of the project. A recent overall evaluation ofaround 200 projects completed over the past years indicates that the program hasbeen successful: e.g. more than 50% of the projects led to patents. In addition, 80%of the respondents s tressed that their projects would not have been feasiblewithout the funding provided by the Bavarian Research Foundation.

Do's and Don'ts

Based on the limited availability of information, no reliable recommendations canbe given.


Yes



Support measure


Support Measure

Title of measure


Full title

Bayerisches Technologieförderungs-Programm (BayTP)/Technokredit

Duration

From: 2009 To: 2014

Policy objectives

4.1.1. Support to sectoral innovation in manufacturing4.1.2. Support to innovation in services


Bavaria supports medium-sized companies in projects to develop technologicallynew or significantly improved products, processes and knowledge services, as wellas in projects applying new technologies in companies. In addition, in exceptionalcases, technical feasibil i ty studies for the preparation of development projects canbe funded. The overall aim is to maintain the competitiveness of the Bavarianeconomy, and thus to ensure adequate economic growth and high employment .Small and medium-sized enterprises (SMEs) with worldwide not more than 400employees can receive funding. To apply for funding, the enterprise must have atleast a subsidiary in Bavaria.




Keywords

Smal l and medium-sized enterpr isesNew technology-based f i rms


Currency: EUR

Source of funding 2 0 0 9National public fundsRegional public funds 8,600,000EU Structural fundsPrivate fundsOthe rForm of funding provided

Gran t sSubsidised loans (including interest allowances)

Policy learning





Do's and Don'ts



Yes



Support measure


Support Measure

Title of measure


Full title

FLÜGGE: Förderprogramm zum leichteren Übergang in eine Gründerexistenz

Duration

From: 1997 To: No fixed end date

Policy objectives

4.3.1. Support to innovative start ups incl Gazelles2.2.2. Knowledge Transfer


FLÜGGE supports university graduates/employees in realising innovative businessideas. The aim is to create new jobs in highly innovative, newly foundedbusinesses, fostering the entrepreneurial spirit in Bavarian universities. Theprogramme is aimed at f inancial ly support ing universi ty graduates/employees torealise innovative business ideas and especially to secure basic living expensesduring the seed- and star t-up phase in the f i rs t two years . I t addresses s ingleentrepreneurs or teams with up to three persons, who are current ly graduates oremployees of a Bavarian university. The beneficiaries will be employed in a





Bavarian university with a 50% contract for up to two years and shall work in afield which is related to their entrepreneurial activity.

Keywords

S t a r t - u p s / s p i n - o f f sEntrepreneurship

Budget, source and type of fundingForm of funding provided

Gran t s

Policy learning




As in most German support measures at the regional level, no evaluation of thisparticular measure was carried out. Reliable information on its actual effects istherefore available to a very limited extent. Additionally, there is very littleinformation available on the effects of similar measures in other regional contexts.Consequently, i t is not possible to give other than an anecdotal assessment of theoutcomes .

Do's and Don'ts



Yes


Bavarian State Ministry for Sciences, Research and the Arts


Support measure


Support Measure

Title of measure

Bavarian Programme to support Technology-oriented Start-ups (BayTOU)

Full title

Förderung technologieorientierter Unternehmensgründungen (BayTOU)

Duration

From: 1996 To: 2014

Policy objectives

4.3.1. Support to innovative start ups incl Gazelles2.2.2. Knowledge Transfer


BayTOU focuses on supporting technologically and economically risky projects inthe start-up phase. The measure aims to increase the technological and innovativecapabili ty via support of new products and processes; job creation inhigh-technology branches. Grants are provided to persons who want to establish anew company; technology-oriented firms not older than six years; new and risky(from a technology and business perspective) products and processes. BayTOUspecifically addresses the needs of small and medium-sized enterprises (SMEs).

Keywords

Smal l and medium-sized enterpr isesS t a r t - u p s / s p i n - o f f sKnowledge transfer

Budget, source and type of fundingForm of funding provided



Form of funding provided

Gran t s

Policy learning


The measure has achieved i ts intended targets in terms of results (e.g. number ofenterprises investing in innovative projects, people trained)



Do's and Don'ts



Yes



Policy document






Policy Document

Cluster Offensive Bavaria

Cluster Offensive Bayern

Organisation responsible


Other organisation(s) involved

Bavarian State Chancellery

Bavarian State Ministry for Food, Agriculture, and Forestry

Con ten t

Bavarian cluster policy was initialised in 2007 and focuses on 19branches/technologies with high importance for the future of Bavaria. These areorganised into five fields:

mobility (automotive, railway technology, logistics, aerospace, satellitenavigation);materials engineering (materials engineering, chemical industries,nanotechnologies);life sciences and environment (biotechnologies, medical technologies, energytechnologies, environmental technologies, forestry products, food industry);IT and electronics (information and communication technologies,high-performance electronics, mechatronics and automation); andservice and media (financial services, media).

After a positive evaluation in 2010, the State Government recently announcedsome changes towards future organization of the overall init iative: A majorchange is that the (nonetheless successful) clusters high-performance electronics,logistics, biotechnology and medical technologies will be restructured intonetworks, while future funding will be focused on the other clusters, wherefunding so far has been most successful in generating addit ionali ty.

Year of publication

2 0 0 7

Link to website





Link: h t tp : / /www.clus te r -bayern .de

Policy document


Policy Document

ERDF Operational Programme under the Competit iveness and EmploymentObjective, Bavaria 2007-2013

Operationelles Programm des EFRE im Ziel „Regionale Wettbewerbsfähigkeit undBeschäftigung“ Bayern 2007-2013



Conten t

The document is an operational programme (OP) following the general st ipulationsof such programmes. Five substantial priority axes are defined:

Axis A: to promote innovation and a knowledge-based economy (allocationof funding: €114.8m national, €79.5m ERDF)Axis B: to promote competit iveness and employment of small andmedium-sized enterprises (SMEs) (€173.6m, €95.7m);Axis C: to support sustainable urban development (€103.3m, €84.7m);Axis D: risk precaution and resource protection (€94.3m, €88.6m);Axis E: sustainable economic development of the border area (€84.3m,€71.5m).

Year of publication

2 0 0 7

http://www.cluster-bayern.de





Link to website

Link: http://www.stmwivt.bayern.de/EFRE/Wettbewerbsfaehigkeit_Besc . . .

Policy document


Policy Document

BayernFIT – Research, Innovation and Technology – The New InnovationProgramme of the Bavarian State Government

BayernFIT – Forschung, Innovation, Technologie – Das neue Innovationsprogrammder Bayerischen Staatsregierung


Bavarian State Chancellery

Other organisation(s) involved


Conten t

In the context of the strategic frameworks "Offensive for the Future Bavaria" and"High-tech Offensive", the Bavarian state government has invested more than €3bin addit ion to the regular s tate budget for the purpose of promoting research andinnovation. According to official sources, there has been measurable success.Between 1996 and 2006 the Bavarian economy maintained an average growth rateof 2.4% annually, one percentage point or 40% above the federal average. The newprogramme BayernFIT builds on this tradition by:

mobilising an additional €490m for research, innovation and technology;by setting up a "pact for innovation" with key players of the Bavarianbusiness sector ; and

http://www.stmwivt.bayern.de/EFRE/Wettbewerbsfaehigkeit_Beschaeftigung/






by improving the competit iveness of both Bavarian enterprises and Bavarianuniversities through the BayernFIT Ltd. - Alliance for Research, Innovationand Technology.

BayernFIT rests on five pillars:

a specification of the Programme "Bavaria 2020";the programme "Bavaria 2020 Plus";the "FITness Programme for Northern and Eastern Bavaria";the "House of Research" (Haus der Forschung); andBayernFIT Ltd. - Alliance for Research, Innovation and Technology.

Year of publication

2 0 0 8

Link to website

Link: ht tp: / /www.bayern.de/BayernFIT-.1612.3258923/ index.htm

Organisation


Organisation

Bavarian State Ministry for Sciences, Research and the Arts

Bayerisches Staatsministerium für Wissenschaft , Forschung und Kunst

Link: ht tp: / /www.stmwfk.bayern.de/Star t_en.aspx

Salvatorstraße 2München,8 0 3 3 3

Mission

The responsibility for regional RTDI policy in Bavaria lies with the regionalgovernment (Bavarian State Chancellery) and is currently partit ioned between twomain resorts: the Bavarian Ministry of Economic Affairs, Infrastructure,Transportation and Technology (MWIVT) and the Bavarian Ministry of Science,Research and the Arts (MWFK). In this context, the MWFK is responsible for all

http://www.bayern.de/BayernFIT-.1612.3258923/index.htm



http://www.stmwfk.bayern.de/Start_en.aspx

Bavarian universities, universities of applied sciences, academies of art, the artsand culture, and for some of the research insti tutes in Bavaria.

Activities

One of the ministry's major tasks is to manage Bavaria 's universit ies and topromote their internationalisat ion and modernisat ion. Financial support forresearch and teaching at universit ies is provided. The ministry coordinates thelong-term strategy of research and sets the framework for higher education inBavaria.

Addit ionally, the ministry at tends to state-owned theatres, museums, l ibraries,archives et al.

Organisation


Organisation


Bayerisches Staatsministerium für Wirtschaft , Infrastruktur, Verkehr undTechnologie

Link: www.stmwivt.bayern.de

Prinzregentenstraße 28Munich,8 0 5 2 5

Mission

The responsibility for regional RTDI policy in Bavaria lies with the regionalgovernment (Bavarian State Chancellery) and is currently partit ioned between twomain resorts: the Bavarian Ministry of Economic Affairs, Infrastructure,Transportation and Technology (MWIVT) and the Bavarian Ministry of Science,Research and the Arts (MWFK).

Within the MWIVT, technology policy is addressed in various departments: Dep.Innovation, Research and Technology, Dep. Industry, Foreign Trade and Dep.Medium-Sized Businesses, Services, Crafts. The ministry describes itself as an'organizer ' of technology transfer and innovation management. In addit ion, theMWIVT is responsible for R&D and technology funding. Its mission statement is as



http://www.stmwivt.bayern.de

follows: "Strengthening the capacity of the Bavarian enterprises and the economicwelfare of the citizens of Bavaria are key issues in the work of the Bavarian StateMinistry for Economic Affairs, Infrastructure, Transport and Technology."

Activities

Major responsibility areas of the MWIVT include:

transport policy;energy policy;industrial policy;business service and crafts oriented policies;research and technology policy;information and communication policy; andtrade policy.

Organisation


Organisation



Link: www.forschungsst if tung.de

Prinzregentenstraße 7München,80538

Mission

The Bavarian Research Foundation was established in 1990. Its major missions arei) to complement public research funding by funding and support ing projects withsignificant relevance for the technological or economic development of Bavariaand ii) to foster technology transfer.

Activities

The Bavarian Research Foundation has assets amounting to around €430m andprovides subsidies of approximately €20m per year. Two types of projects arefunded: i) individual ventures and ii) combined research; in addition, scholarshipsare provided for scientist exchange programs. The duration of the funding isl imited, and the projects must be carried out jointly by science and industry. The



http://www.forschungsstiftung.de

goal is to create economic value from the research results in major focus areassuch as l ife sciences, information and communication, microsystems engineering,materials science, energy and the environment, mechatronics, nanotechnology,and process and product ion engineering.


Appendix D Statistical data

Indicator Bayern (DE2)

Bayern (DE2)

Bayern (DE2) EU27

2000 or around

Previous year

Most recent

Most recent

GDP per capita (PPP) 26500 34000 33900 25100

2000 2007 2008 2008

Change in GDP per capita 3,04 4,60 3,47 3,73

2000-03 2006-07 2005-08 2005-08

Unemployment rate 5,175 4,925 4,4 6,98

2000-03 2006-09 2007-10 2007-10

Change in unemployment ratee -1,48 0,45 0,53 -0,30

2000-03 2006-09 2007-10 2007-10

Tertiary education 0,26 0,30 0,31 0,30

2000 2009 2010 2010

Government R&D expenditure 0,23 0,25 0,28 0,24

2000 2007 2008 2008

Non-R&D innovation exp. -- -- -- 0,41

-- -- -- 2006

Patents per mln popoluation 437,9 425,8 444,9 115,1

2000 2005 2006 2006

Business R&D expenditure 2,20 2,21 2,21 1,21

1999 2007 2007 2008

Higher education R&D expenditure 0,35 0,35 0,38 0,44

2000 2007 2008 2008

Source: Eurostat and Community Innovation Survey

Technopolis Belgium Avenue de Tervuren 12 B-‐1040 Brussels Belgium T +32 2 737 74 40 F +32 2 727 74 49 E info.be@technopolis-‐group.com www.technopolis-‐group.com

Documents

Regional Innovation Monitor - European Commission · and medium sized companies, multinational corporations, universities and public and private research institutes received new impetus