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S3 Platform – Peer Review Workshop 25-26 February 2014, Riga 1 RIS3: IMPLEMENTATION AND POLICY MIXES RIS3: IMPLEMENTATION AND POLICY MIXES Claire NAUWELAERS.

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Presentation on theme: "S3 Platform – Peer Review Workshop 25-26 February 2014, Riga 1 RIS3: IMPLEMENTATION AND POLICY MIXES RIS3: IMPLEMENTATION AND POLICY MIXES Claire NAUWELAERS."— Presentation transcript:

1 S3 Platform – Peer Review Workshop February 2014, Riga 1 RIS3: IMPLEMENTATION AND POLICY MIXES RIS3: IMPLEMENTATION AND POLICY MIXES Claire NAUWELAERS Independent expert in STI policy

2 KEY Challenges RIS3 2 Two novelties/key benefits of RIS3: from introspection to “extrospection” : an open view to regional policies from administrative to strategic management of policy Main challenge in implementation of RIS3: Translate broad strategies into efficient and integrated policy mixes Main bottlenecks to “serious” implementation of RIS3: Policy-makers resistance to:  Long-term investments (returns beyond 4-year legislature…)  Genuine prioritisation (selection and de-selection!) – coping with lobbies…  Cross-domains, cross-level and cross-border policies Little evidence to identify “white spaces” between sectors, clusters, poles,… Need for more robust, systematic and systemic policy evaluations

3 Implementing RIS3 3 Challenges: Overcoming path dependency and inertia:  adapting old institutions to new policy models  developing unlearning capability in policy circles  bringing coherence in “historical” policy mix From «silo»-driven to «outcome»-driven policies:  starting from desired outcomes rather than from instruments machinery  from incremental improvements in existing portfolios to radical restructuring  Developing systems for policy accountability focusing on effectiveness rather than efficiency Allowing policy experimentation (innovation!) in policy

4 The S3 OECD enquiry PrioritiesImplicit/explicit RDTI/economic Regional/national ProcessesSelection criteria Stakeholders involvement Analytical and evidence base Policies Policy instruments Budgets Monitoring & Evaluation Source: OECD (2013) Smart Specialisation in global value chains: designing and assessing smart specialization strategies

5 Future potential

6 Key findings: PRIORITIES  Difficulties to ensure the validity of responses to the question of existence of explicit and implicit priorities Inconsistency between: i) policy documents ; ii) budgetary allocations; and iii) existence of major institutes, organizations or programmes dedicated to the priorities. Timing issue: priorities definition / policy mix definition  Explicit priorities are more frequent for research and innovation than for economic development  Prioritization is more intense at regional than at national level  Prioritization trends are on the rise, at strategic and implementation levels Source: OECD (2013) Smart Specialisation in global value chains: designing and assessing smart specialization strategies

7 Key findings: POLICIES GAP POLICY FORMULATION / IMPLEMENTATION No clear link between priorities and policy mixes A strategic view on public « innovation » budget is missing Key policy instruments:  Dedicated institutes, competence centres  Thematic R&D funding programmes  Cluster policies (regional level) A-typical policy instruments:  Innovation-driven public procurement  Bonus system in generic funding programmes Monitoring and evaluation systems hardly tuned to priorities Source: OECD (2013) Smart Specialisation in global value chains: designing and assessing smart specialization strategies

8 Policy Mix Definition Combination of policy instruments, which interact to influence framework conditions, alleviate barriers and raise capabilities for innovation Instruments: all programmes, organisations, rules and regulations with an active involvement of the public sector, which intentionally or unintentionally affect innovation Interactions: the influence of one policy instrument is modified by the co-existence of other policy instruments in the policy mix Influences on innovation are either direct (instruments from innovation policy field) or indirect (all policy instruments from any policy field which indirectly impact on innovation) 8 Source: UNU-MERIT « policy mix » project

9 Policy mix conceptual framework 9

10 Policy mix design 10 1) Challenges for RIS 2) Policy Objectives and RIS3 priorities 3) Gaps between Challenges and Objectives 4) Instruments (various policy domains) 5) Gaps between Objectives and Instruments 6) History (inertia!) 7) Actors (stickiness, agility, hidden agendas…) 8) Balances within policy portfolio 9) Interactions (positive, negative) 10) Governance (horizontal, vertical)

11 Two complementary views on policy mixes Routes and Balances – macro view What is the balance of instruments from various domains in a portfolio, and with which policy objectives are these better aligned ? 2. Interactions – micro view How do various policy instruments interact within a portfolio of policies ? Final effect ?

12 Different regions require different strategies 12 Type of region Main strategy Building on current advantages (science push/technology-led or a mix) Supporting socio-economic transformation Catching-up: towards the creation of knowledge- based capabilities Knowledge hubs Knowledge and technology hubs    Knowledge-intensive city/ capital districts    Industrial production zones US States with average S&T performance    Service and natural resources regions in knowledge-intensive countries    Medium-tech manufacturing and service providers    Traditional manufacturing regions    Non S&T-driven regions Structural inertia or de-industrialising regions    Primary sector-intensive regions    Source: Regions and Innovation Policy OECD 2011

13 Different regions require different strategies 13 Source: Regions and Innovation Policy OECD 2011 No external connection Single external connection Multiple external connections Centralised RIS Build hinge through hub Build multiple global connections Regional networking Decentralised Dense RIS Find external connection/get a global perspective Build multiple global connections Anchor global firms regionally Decentralised Sparse RIS Change system/ path-breaking grand project Increase regional networking/ build global connections Increase regional networking/ prepare for global linkages

14 Key issues for building smart and efficient policy mixes 14 Source: Regions and Innovation Policy OECD 2011 Value of integrated (“packaged”) policy instruments Finding the right balance between instruments addressing firms in isolation v. systemic relations; fostering internal v. external connections Drawing effectively on interactions between several areas of policy Vital component of policy mixes: human resources for innovation and associated policies to attract and retain talent Putting more weight on demand-side policy instruments, in particular by introducing innovation-oriented public procurement

15 15 Policy Domains depend on each other Innovation Policy Legal/IPR Policy Labour Market Policy Education Policy Science Policy Competition Policy Defence Policy Macroeconomic Policy Sector Policies Monetary/Fiscal Policies Regional Policy Industry/Trade Policy R&D Policy Health Policy Environmental Policy Infrastructure Policies

16 Policy Interactions  Interactions between policies:  positive and complementary, with one amplifying the effect of the other in terms of impacts on innovation  negative and interfering destructively, with one attenuating the impact of another  neutral and functioning quite independently, with impacts also independent  One policy problem  One new instrument ? the extensive implementation of new instruments bears increased risks of substitutive effects or unwanted interferences 16

17 17 Example: stimulating start-ups versus supporting academic research  GO Bio Programme Germany: grants for university researchers to advance research towards marketable products and start a university spin-off (~30 m€)  Initiative for Excellence: Funding of top-level academic research at German Universities - selecting 10 top-level Universities, funding of special research programmes, both providing additional research funding (~1.9 b€)   leading university institutes in biotechnology were successful in acquiring IfE money - researchers focus on academic careers, little demand for Go Bio

18 18  ROUTE 1: promote establishment of new innovative firms  ROUTE 2: stimulate further innovation in innovative firms  ROUTE 3: stimulate innovation in non-innovative firms  ROUTE 4: attract innovative firms from abroad  ROUTE 5: increase innovation in cooperation with public sector Mapping types of instruments versus routes Defining broad routes to increase innovation

19 Prioritizing between routes Defining priorities between routes should ideally be informed by:  NIS/RIS SWOT analyses  Policy reviews and evaluation  Intelligent trans-national benchmarking practices  In reality, often product of:  Policy fashions or fads, EU “standards”  Naive imitation strategies from trans-national observations  Pressure of lobbies: priorities as addition of narrow specific interests  Parallel views between “science” and “economy” ministries 19

20 Prioritizing between routes Evolution of priorities amongst the routes characterised by: History weight: stickiness of main policy orientations – stability of structures – path dependency Cumulative processes: attention to new routes adds up to previously retained routes Changes in the RIS: need for radical changes ? need for a threshold of changes to be effective ? Condition: High degree of strategic policy intelligence AND/OR radical shifts in NIS/RIS 20

21 ExamplesRoutes Examples Routes Belgium  Route 5 (cooperation) covered by a large set of instruments  Route 4 (FDI): most heavily influenced by non-innovation policies  Route 3 (non-innovative firms): less attention, most difficult, big prospect for competitiveness. Use of instruments from economic and industrial policy, but also from the education and training spheres. Coordination of policies is needed !  Denmark  Route 2 (large R&D performing firms) in high-tech sectors: priority of Globalisation Strategy  Neglect of the potential of SMEs in other sectors ? (Routes 3 and 5) Rhône-Alpes  Initial focus on Route 3 (increase technological absorptive capability)  Routes 5 (cooperation) is a continuing, traditional focus for French regional policy  Shift towards “Routes of Excellence” Route 2 (R&D-performing firms) 21

22 Portfolios composition associated to routes  No standard portfolio by route – but some typical menus  Similar instruments with different characteristics contribute to different routes (e.g. conditions for R&D grants; various types of tax incentives)  Systemic instruments and mini-mixes span through many routes  Often limited view on range of instruments linked to routes (“one problem” – “one response”)  When made explicit, limited to innovation policy domain  Subject to trade-offs : broadening versus deepening R&D efforts / excellence versus cohesion  Other horizontal priorities run across the Routes:  Thematic; internationalisation; human resources 22

23 Policygovernanceaspects Policy governance aspects What strategies are available to meet the need for coherence and coordinated implementation of policy mixes? Strategic statements… to provide clear signal and roadmap to all involved stakeholders (goals, indicators…) High level coordination bodies…with high-level political support and involving quadruple helix stakeholders ‘Mini-mixes’: smaller scale, packaged set of instruments designed as coherent whole, addressing various aspects of innovation 23

24 Industrial restructuring: two approaches with different impacts on policy mix design Low-tech manufac- turing Medium-tech manufac- turing High-tech manufac- turing Knowledge intensive services Other services R&D Intensity Share in total production R&D expenditure, % in total production Sector production, % in total production R&D intensification approach High-tech industry approach

25  Identifying right target sectors  Involving national and regional levels  Bottom-up definition of research agendas  Sequencing public support by target groups  Involving non-R&D policies early, incl. regulation issues  Harmonising technology-focused and generic R&D policies  Establishing research infrastructures, esp. in basic research  Connecting actors and encouraging industry-science links  Addressing skill demands  Encouraging internationalisation early  Following a long-term view, but being flexible to address new challenges 25

26 R&D intensification approach  Identifying barriers to R&D/innovation  Developing a coherent industrial restructuring strategy and programme  Harmonising R&D policy with economic strategy  Providing effective incentives for firms to invest in R&D  Offering a favourable business environment  Ensuring human capital supply  Developing domestic demand for innovation  Encouraging internationalisation  Adapting policy to changes in the environment 26

27 Mini-mixes Programmes that package different instruments (funding mechanisms - programme objectives - delivery mechanisms- target groups) and/or routes, into one coherent initiative. Designed in such a way that the elements complement each other to achieve a specific policy goal (e.g. innovation in bio-tech) or support a specific target group (e.g. NTBFs).  Often across different governance boundaries Thesis: mini-mixes have a more ‘synergetic’ approach and might therefore be more effective and have fewer internal conflicting influences 27

28 Mini-mix example: Technopartner NL Integrated programme to support technology-based start-ups TechnoPartner Seed capital facility TechnoPartner Knowledge Exploitation Subsidy Arrangement (SKE) (pre-seed funding for R&D etc.) Patent support facility (legal & strategic advice) TechnoPartner platform (exchange of experience) Business Angel Programme (management support) Institutional pillar (strategic intelligence) 28

29 Mini-mixessuccess factors Mini-mixes success factors Require some form of stakeholder involvement and/or expert opinion; Governments thus need to develop / mobilise the strategic intelligence for such a process; In cluster type mini-mixes, consider tax-payers perspective and ensure open and transparent process Systematic review of existing mechanisms necessary No single recipe for the implementation of such mini-mixes, this is context - specific The evaluation and monitoring of mini-mixes is an area that needs further development 29

30 Which policyinstruments? Which policy instruments? 30 Target of support Form and focus of innovation support services for SMEs Reactive tools providing inputs for innovation Proactive tools focusing on learning to innovate Global connections Excellence poles Cross-border technology centres Funding for international R&D or innovation projects International technology transfer schemes Mobility schemes Support for global networking of firms Cross-border innovation vouchers Lead market initiatives Regional system Collective technology or innovation centres Cluster policies Proactive brokers, match-makers Innovation vouchers Support for regional networking of firms Schemes acting on the culture of innovation Individual Firms Incubators with “hard” support Traditional “reactive” technology centres Seed and venture capital funds R&D subsidies or tax incentives Management advice Incubators with “soft” support “Proactive” Technology centres Audits, monitoring of needs Innovation Coach Innovation management training Techno-economic intelligence schemes Source: Regions and Innovation Policy OECD 2011

31 Which policyinstruments? Which policy instruments? 31 Source: Regions and Innovation Policy OECD 2011

32 Adapt governance structures Improve coordination Improve governance mechanisms (incl. agenda, formulation etc.) Strengthen human capital Create an innovation culture Interest of science among youth and society General awareness Rewards, awards, prizes Improve actors’ interactions Improve actors’ competencies, investments and incentives to innovate Improve policy governance Evaluate the impact of innovation policies Monitor innovation Feed back into policy Improve supply of skills for innovation Education systems and participation to HE Supply the right mix of non S&T skills / S&T skills PhD and Postdocs Broaden access to S&T studies and ensure equity Ensure good employment conditions and LLL Attractiveness of researchers careers Sectoral mobility Opportunities of LLL STI platforms and infrastructures Physical infrastructures (incl. ICT) Industry-science (incl. technology platforms, science parks etc.) Clusters and CoE Open innovation Valuation and circulation of knowledge IPRs Knowledge markets Adjusting to globalisation Internationalisation of domestic firms Attract FDI and foreign firms International mobility of human capital Public research Additional funding Revision of funding mechanisms Reform of PROs Strengthen public research infrastructures Business R&D Additional funding Stimulate private investments in R&D Provide non financial support Public sector innovation e-government and public services delivery Public administrations and govt demand for innovation Private sector innovation Additional funding Stimulate private investments in innovation Provide non financial support Source: OECD Innovation Policy Platform Which policyinstruments? Which policy instruments?

33 RIS3 “smart” implementation Coherence, Coordination, Communication  Tailoring policy goals and priorities to regional situation  Tailoring policy mixes to policy goals: Macro balances in policy mixes  Micro synergies within policy mixes  Think and act cross-domains, cross-actors, cross-levels, cross-borders Use of Strategic Policy Intelligence Tools  Monitoring and evaluation targets, indicators, analyses  Outcome-oriented and evidence-based policy implementation 33


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