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The Globalisation of Knowledge and European Public Policy Responses EULAKS Summer School The Role of Social Sciences in the Construction of Knowledge-based.

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Presentation on theme: "The Globalisation of Knowledge and European Public Policy Responses EULAKS Summer School The Role of Social Sciences in the Construction of Knowledge-based."— Presentation transcript:

1 The Globalisation of Knowledge and European Public Policy Responses EULAKS Summer School The Role of Social Sciences in the Construction of Knowledge-based Societies: Latin America and European Perspectives Klaus Schuch

2 Core Conclusion of New Growth Theory and Innovation Economy Growth and change are driven by innovations! There is competition for new knowledge – endogenous and external technological progress def: Innovation – [technologically] new or improved products introduced on the market or new or improved production-/distribution practices def: technological change – extension of knowledge in way of new production and organisation technologies

3 Absorptive Capacity Positive spill-overs (e.g. of TT) can only develop if the knowledge receiving company (or: institution) has the ability to make use of it and to enhance it through own contributions. For the development of absorptive capacities the quality of educational institutions (e.g. universities) and policy (e.g. through allocation of resources) play a major role. The capacity of humans to acquire and use new qualifications is of essential importance for the assimilation and application of new technologies. -cognitive dimension -social dimension -cultural dimension...

4 National economies which do not invest in knowledge production might in the long term not be able to master the speed of progress of knowledge based economies (and societies).

5 If the possession of technological knowledge is a comparative advantage and a scarce resource, why does internationalisation of S&T take place? Why does the EU finance the EULAKS summer school and your particpation in it?

6 Maceration of the Triadic Power (1) 1) mid of 1990ies: 50 leading countries responsible for 100 % of high-tech production and 99 % FDI and 98 % for S&T and education expenditures 2)The share of the triad in global R&D expenditure decrased from 83.2 % (in 1995) to 72.4 % (in 2005) 3)Erosion of EU (2 nd half of 90s) and USA (after 9/11) 4)The share of non-OECD countries in global R&D expenditure more than doubled from 8.1% to 18.3% (mostly due to China)

7 Maceration of the Triadic Power (2) 1) More emerging economies (BRICS and many more) with Janus-shaped S&T demand (transition is driven by growing need AND by growing wealth) 2)Other high-(post-)industrialised small technology powerhouses (e.g. Israel, Singapore, Canada...) 3)Business R&D expenditure became increasingly mobile since 1970ies (while public R&D expenditure remained more rooted in regional and national context)

8 Output Shares of World Manufacturing

9 Globalisation of business R&D: the changing distribution of R&D sites Source: INSEAD survey of firms with a combined R&D spend in 2004 of US$ 76.4b, from 17 sectors and 19 countries

10 Globalisation of business R&D: the changing determinants of location 1996 to 2005 Legacy 11% Close to HQ 7% Proximity Production 13% Market & Customer Insight 19% Skills Capabilities 22% Subsidies incentives 14% Low Cost skills 9% Up to 1979 Legacy 29% Skills Capabilities 16% Proximity Production 18% Close to HQ 14% Market Customer 10% Subsidies incentives 9% 1980 to 1995 Legacy 17% Skills Capabilities 16% Close to HQ 10% Proximity Production 17% Market & Customer Insight 19% Low Cost skills 2% Subsidies incentives 13% Source: INSEAD survey FDI in RTD: RTD follows production RTD follows excellence

11 1 st generation 2 nd generation 3 rd generation 0% 5% 10% 15% 20% Outsourced Golden age of corporate R&D labs 4 th generation During the late 19th and the early part of the 20th centuries, practically all research was conducted outside the firm in stand-alone organisations Importance of innovation networks as source of know-how Balance between outsourced R&D and in-house capacity Now on a global scale Open Innovation: a long-term perspective Source: J. Guinet, OECD

12 Europe in the Global Research Landscape

13 Globalisation of R&D: the rise of new players China is now the third largest government financier in R&D globally – with a target to reach an R&D intensity of 2.5% by 2020 Chinas growth of R&D spending has been on average 18% a year since 1995 China now counts close to 1000 foreign R&D labs, accounting for about 25% of business R&D Some firms now undertake R&D for the global market in China Source: J. Guinet, OECD

14 Human Resources 1)In EU27 the working-age population (15-64 years) will decrease between 2005 and 2050 by -19 %. In Japan the decrease will be -38 % and increase in the USA by +23 %. 2)US leads globally in absolute numbers of researchers, followed by EU and China. 3)India and China lead globally in number of MST graduates.

15 Quality of Tertiary Education Top world universities (Shanghai ranking 2006) AmericasEuropeAsia- Pacific Africa Top Top (Tokyo, Kyoto) 0 Top Top

16 Publications 1)In the world share of scientific publications EU-25 is in the lead (38.1 % in 2004) followed by US (32.8), Japan (8.7 %), China (6.4%), Canada, Australia, Russia, South Korea, India, Switzerland, Brazil, Taiwan and Israel. 2)Measured per million population, most productive is Switzerland (2001 in 2004) followed by Israel (1416), Australia (1148), Canada, US, EU-25, Taiwan, Japan, South Korea, RF, Brazil (74), China and India. 3)EU leads in international co-publications (esp. intra-EU).

17 Patenting Triadic Patents by residence of inventor in logarithmic scale

18 World Market Shares Export of High-Tech Products Av. annual growth rate (%) US EU China Japan South Korea Brazil India Russia

19 The Enabling Importance of Nanotech, Biotech and ICT 1)Nanotechnologies enable other technologies by providing a common framework for all hardware-level engineering problems 2)Biotechnologies enable other technologies by identifying chemical-physical processes in living systems 3)ICT enables other technologies through its ability to represent physical states as information and model processes (Nordmann, 2004)

20 Europe`s Position in Nanotechnology 1)Europe has a competitive research base, especially in nanomaterials, nano-electronics and medical nano-biotechnology. 2)EU and USA account for more than half of the world publications in nanoscience and nanotechnology, but China is expanding rapidly. 3)The largest increases in nanotechnology investments are made outside the triad. In 2002 China allocated $ 200 million to nanoscience; India allocated the same amount in In Russia the government allocated $ 400 million in Also South Korea and Taiwan are important emerging actors. 4)Europe is lagging behind in patenting in nanotechnology.

21 Nanotech Patents by Region of Applicant

22 Nanotech Specialisation Outside the Triad

23 Europe`s Position in ICT 1)Europe is behind the US and Japan in IT, but competitive in CT. 2)US and Japan have a technology leadership in ICT patents, but Europe has been catching up. Still it lacks a broad ICT industry base. 3)USA has a slight lead in converging ICT with biotech and nanotech, but Europe is not far behind and has a good research capacity in converging ICT with cognitive sciences. 4)Asian countries are making substantial efforts (South Korea, China, India). The ICT sector in China is very reliant on foreign-owned companies. 5)In the field of ICT outsourcing India (first mover), Brazil and Russia are progressing fast.

24 Europe`s Position in Biotech and Health Technologies 1)US is leading in life sciences (incl. agriculture, homeland security, pharmaceuticals), but some EU member states are highly competitive. EU has strengths in medical devices and drug research. 2)EU produces the largest number of publications in life sciences, but is lagging far behind the US in patenting. 3)In China life sciences are high on the agenda due to food security considerations (strong increase in feed grain and oil seed). In India almost half of the public R&D budget was dedicated to biotech ( ), esp. medical biotechnology, the development of transgenic crops for cotton and bioenergy are high on the agenda. Brazil is positioning herself in genomics and gene sequencing. South Africa is publishing frequently in virology (AIDS).

25 The EUs Policy Answer to Sustain in Global Competition (renewed) Lisbon Growth and Jobs Strategy (Partnership of Growth and Jobs) Core Objective: … to secure a prosperous, fair and environmentally sustainable future for Europe by developing Europes economy and guarantee quality of life for its population. RTD and innovation support are only the means to an end, not objectives in themselves.

26 Approach and Targets Focus of the Growth and Jobs Strategy is on investments in the knowledge economy (emphasis on education, research, technological development, innovation and entrepreneurship). Targets of the Growth and Jobs Strategy: -total investment of 3 % of Europes GDP in R&D by employment rate of 70 % of the working age population by 2010

27 Funding Instruments 1)Structural Funds and Cohesion Fund to strengthen economic, social and territorial cohesion by reducing disparities in the level of development among regions and EU Member States. RTDI is a major priority ( 86 billion or 25 % between ). 2)European Framework Programme for RTD (FP7) 3)CIP - Competitiveness and Innovation Framework Programme 4)and others …

28 Internationalisation Strategy in R&D There is wide consensus that excellence in research stems from competition between researchers and from getting the best to compete and co-operate with each other. A crucial way to achieve this is [...] to work across borders (EC, 2008).

29 The EU does not claim to be a self-sufficient entity in the realm of STI. Both, Europes knowledge resource (e.g. human capital) and its role in the global economy will be increasingly shaped by its ability to source knowledge internationally and to adapt it for its own use! Internationalisation Strategy in R&D (2)

30 Globalisation Drivers Globalisation of RTD is based on new economic organisation modes and division of labour as well as socio-political (e.g. EU integration) and socio-cultural (e.g. global village) factors. The main drivers are –Multinational Enterprises (MNE) –new technologies (ICT; logistics...) –(de)regulatory measures (opening of markets) –international standards and norms –efficient education systems to provide the Human Capital for R&D and international exchange of commodities, goods, services, capital, knowledge and information

31 Internationalisation Rationals for RTD Quality acceleration and excellence objective Market and competition objective Resource acquisition objective Cost optimisation objective Global or regional development objective Scientific diplomacy objective Ranges from gradual improvement to cooperation with the best! Quicker progress and enhanced productivity. Professional advancement. Only the best institution succeed internationally. Supporting domestically produced innovations abroad. Support for innovations generated abroad by domestic companies. Supporting a quick access to new knowledge (TT). Absorption and spill-overs are essential! Access information, knowledge and expertise as well as equipment/facilities. Technology Transfer; brain gain; gain solvent students; gain funds; cost sharing to create critical mass; large scale infrastructures; risk sharing global challenges like climate change, energy, MDGs; research for development; many of the risks have no frontiers! to support other policies (e.g. foreign policy; security, ODA, transport; promotion of domestic competences to generate allocation effects!

32 Policies behind the Internationalisation of RTD Source: Technopolis, University of Manchester und Wise Guys Ltd

33 Main Strategic Objectives of S&T Policies of EU-MS towards Internationalisation additional minor quoting: sharing of infrastructures; brain-gain; international relations per se; regional cooperation; improving the own policy-delivery systems by learning from others etc. Source: Sonnenburg et al., 2007

34 Instruments for S&T Internationalisation Instruments directly targeting researchers Research Funding Research Mobility Support Support for International Research Networks (institutionalised) Policy level instruments Foreign Science Offices (unilateral) Tax incentives for FDI in R&D (unilateral) Bilateral scientific agreements Multilateral collaborative programmes (e.g. ERA-NETs, Human Frontier Science Program) Big Science cooperation (esp. large-scale infrastructures, e.g. CERN, ESA, ITER) Cooperation with international organizations other

35 Public Policies for International RTD Cooperation Source: BMBF

36 Gains from S&T Cooperation … the European Research Area has the infrastructures, the universities, the capabilities and the expertise, but it may lack the students in the near future and the engineers in the remote future … A far-sighted S&T policy should therefore ensure that international cooperation with developing countries … paves the way for future transnational cooperation with colleagues and students (EC, 2007).

37 Literature European Commission (2008a): A Strategic European Framework for International Science and Technology Cooperation. Communication from the Commission to the Council and the European Parliament. Brussels: European Commission European Commission (2008b): Opening the World: International Cooperation in Science and Technology. Report of the ERA Expert Group. Brussels: Research*eu European Commission (2007): Europe in the Global Research Landscape. Brussels: Research*eu OECD (2008): The Internationalisation of Business R&D. Evidence, Impacts and Implications. Paris: OECD Sonnenburg, J., Schuch, K., Teirlinck, P. et al. (2007): Policy Approaches towards S&T Cooperation with Third Countries. Brussels: CREST Working Group on Internationalisation of R&D

38 Klaus Schuch Centre for Social Innovation Linke Wienzeile 246 A Vienna Tel Fax

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