Mikel Landabaso and Bénédicte MoutonEuropean Commission - DG Regional Policy

1. “Towards a different regional innovation policy : eight years of European experience through the European Regional Development Fund innovative actions” Mikel Landabaso and Bénédicte MoutonEuropean Commission - DG Regional Policy S&T Policy – November 22nd, 2002 – Pedro Leal and Jose Luiz Moutinho

2. Agenda • Summary • Traditional Regional Policies • Innovation Paradox • New Objectives and Instruments • The Networked Economy • New policy Delivery Systems • Programmes RIS,RIS+, ... • Programmes carried out in Portugal S&T Policy – November 22nd, 2002 – Pedro Leal and Jose Luiz Moutinho

3. Summary • Traditional regional policy has proved to be little successful in promoting innovation in less favoured regions in the EU • In these regions, innovation promotion policy has been faced with a limited capacity to absorb public funds efficiently, despite the comparatively greater need for innovation support policies • Effective regional innovation policies require a new set of objectives, instruments and policy delivery systems in less favoured regions S&T Policy – November 22nd, 2002 – Pedro Leal and Jose Luiz Moutinho

4. Traditional Regional Policies • Why traditional regional policies do not work? • Promoters without the adequate entrepreneurial or technologic know-how  policies poorly adapted to current business needs • Public aid in the form of non-repayable grants  financial indiscipline • They tend to protect domestic industry from international using artificial barriers (taxes, ..)  market distortion • Horizontal and non-discriminatory public aid schemes intended to reduce costs temporarily bread today and hunger tomorrow • They are excessively bureaucratic • Based on short term perspective and show only limited anti-cyclical and local impact • In less developed regions these policies are more socially oriented than real economic development growth policies • Lack of co-ordination between regional and national policies S&T Policy – November 22nd, 2002 – Pedro Leal and Jose Luiz Moutinho

5. Innovation paradox The more a less-favoured region needs innovation to maintain and improve the competitive position of its businesses in an increasingly globalised economy, the more difficult it is to invest effectively and to ‘absorb’ public funds to promote innovation in this regions. • Major reasons • The regional innovation system is often isolated, poorly developed and fragmented and lacks an appropriate institutional framework for designing and managing innovation policies • They do not have the necessary interfaces and co-operation mechanisms to match RDTI supply to demand • They do not have a tradition of co-operation and trust in the regional RTD infrastructure, particularly universities • Few advanced business services and networking agents/interfaces S&T Policy – November 22nd, 2002 – Pedro Leal and Jose Luiz Moutinho

6. New objectives and instruments • Regional economic development is dependent on two types of condition: • The ‘necessary’ conditions: basic infrastructures, human resources with a minimum level of training, ... • The ‘sufficient’ conditions: the capacity of innovation, the quality of management, ... To date, in the less-developed regions, the Structural Funds have been mainly directed towards creating the necessary conditions and not to establish an innovative climate that facilitates access to the inputs required to increase competitiveness and to consolidate a pool of local ‘talent’. • Indicators • Use of more sophisticated indicators showing the dynamic dimension of the regional social and relational capital like stable, high added-value and quality employment • Although they are difficult to built it must be possible to measure, correct and improve on an on-going basis S&T Policy – November 22nd, 2002 – Pedro Leal and Jose Luiz Moutinho

7. Micro-economic level instruments Innovation management techniques diffusion Quality & design incorporation use of “clean” production processes Product differentiation and new forms of marketing and after sales services Adaptation of products and services to new niche markets Making use of economic intelligence and foresight studies Using new forms of business management and organisation Technology audits Intellectual Property rights policy awareness and defence Recruitment of graduates and use of researchers in SMEs New financial products Meso-economic level instruments Creating public-private co-operation networks Strengthening co-operation between businesses via clusters Creating single points of access for businesses to systems of aid Improving contacts between universities and businesses Making better use of existing RTDI resources and infrastructures Increasing coherence and synergies between the different policies, institutions and individuals active in the field of RTDI Strengthening entrepreneurship in the region Facilitating access to skilled workers and to new financial products Incubating activities New objectives and instruments S&T Policy – November 22nd, 2002 – Pedro Leal and Jose Luiz Moutinho

8. a The Networked Economy The competitiveness of one company is determined not only by its own capabilities… …but also by the quality of its environment. S&T Policy – November 22nd, 2002 – Pedro Leal and Jose Luiz Moutinho

9. New policy delivery systems • Main characteristics • Bottom-up approach • Involve al the regional players: regional governments, private sector, technology centres, universities and trade unions • Based on new forms of institutional organisation that are more dynamic, horizontal and flexible ...there are no universal magic formulas… …specific policies are required for each region… …based on a balanced bottom-up approach... S&T Policy – November 22nd, 2002 – Pedro Leal and Jose Luiz Moutinho

10. 1993 - 94 1996 - 99 1999 2001 - 02 RIS-NAC RTP RIS+ RIS RITTS Regional Projects in Europe RTP - Regional Technology Plans RIS - Regional Innovation Strategies RITTS - Regional Innovation and Technology Transfer Strategies RIS - NAC - Regional Innovation Strategies - Newly Associated Countries S&T Policy – November 22nd, 2002 – Pedro Leal and Jose Luiz Moutinho

11. Results of RIS/RIS+ • Results • They set the first foundations of regional innovation systems in less developed regions • Promotion of public and private partnerships and business networks • It changed the common perception of innovation in several regions, since it improved transparency and understanding of R&D support organisations Reasons for success • Critical “role” of champions, often from the private sector or universities • Bottom-up approach allows real regional partnerships that are maintained over time • Importance of identification of SMEs needs • Multidisciplinary vision of innovation • Added value from regional benchmarking • Importance of human capital building, improving skills and developing a critical mass in the R&D regional capability Reasons for failure • Key regional players feeling threatened by the innovation policy discussion • Failure to find the right regional champions and/or high level RIS management • Over reliance on external consultants for the development of the strategy • An excessive technology-push perspective without sufficient demand-led perspective • A “study” approach rather than an “applied” one S&T Policy – November 22nd, 2002 – Pedro Leal and Jose Luiz Moutinho

12. Projects carried out in Portugal • RITTS Lisbon and Tagus Valley Main Objectives • assessment of regional supply of supporting services to innovation and technology transfer • analysis of the regions company needs in terms of absorption of technology of innovation • promotion of the debate between the various regional actors • setting-up of a regional strategy and a medium term action plan to strengthen the interaction between the scientific and technological infrastructure and regional businesses, as well as the definition of appropriate mechanisms for respective follow up and systematic evaluation. Methodology • Survey to 3,328 companies • I Science and Technology Forum of the Lisbon and the Tagus Valley region was organized. • Six thematic workshops were also organized. Results • re-orientate R&D to innovation • RIS Norte • RIS Algarve/Huelva S&T Policy – November 22nd, 2002 – Pedro Leal and Jose Luiz Moutinho