Second International Seville Seminar on Future-Oriented Technology Analysis (FTA): Impacts on policy and decision making 28th- 29th September 2006 Towards an Integrated Framework of Impact Assessment and Foresight Studies in Innovation Policy Analysis Torsti Loikkanen and Annele Eerola, VTT Innovation Studies Pirjo Kutinlahti, Ministry of Trade and Industry Finland

Outline Definition of innovation policy studies (by VTT-IS) Future challenges of innovation policy e.g. Rationales of public R&D funding and innovation policy Towards comprehensive framework of innovation policy and related policy studies Integration of the past, present and future in innovation policy studies Timeline of impact assessment: what we measure, when? From ex-post evaluation towards strategic foresight of the future Integrated IP research agenda of VTT-IS Conclusions

Definition of innovation policy (IP) studies by VTT Innovation Studies “Multidisciplinary and future-oriented research of innovations, factors and actors affecting them, and their socio-economic impacts, the aim of which is to support strategic choices and decisions of national and EU innovation policy-makers and through this way to contribute to welfare” Source: VTT Innovation Studies

Future challenges of IP e.g. Changing global dynamics of enterprise innovation Towards product-to-service innovations, “open” innovations… Global mobility of scientists and utilization of knowledge and R&D Challenge by Asian big developing economies: from low cost advantages to growing markets and attractive S&T systems Competitiveness of European innovation system, ERA Towards entrepreneurial science community, new governance of science, “Mode 2”, 3rd mission of universities.. Towards horizontal innovation policy Challenges of global public goods (or bads) to research: need of global S&T collaboration

Rationales for Public Research Funding and IP Areas where markets fail in socioeconomic problem solving: … areas with socio-economic importance in which markets function imperfectly (public / common goods, e.g. health care, environmental protection, defense, education, science and research, and… …respective infrastructure areas: … socially important infrastructures and public good areas, such as transportation, energy, but also… …science and innovation infrastructure: … creation, maintenance and financing of education and research infrastructure or “innovation system” supporting education, basic research, (re)training… Areas requiring long time horizon of R&D: …areas of imperfect markets such as environmental protection... Areas requiring critical R&D mass and expenses: …critical mass and big size of R&D facilities such as aeronautical and space research (e.g. CERN, EBML)… Welfare through competitiveness: Government R&D funding can be justified for boosting economic growth in order to enhance national competitiveness and consequent improvements to economic and social welfare in through income and wealth creation, improved employment, etc… R&D schemes for SMEs: … most companies are SMEs with limited R&D resources but important for economy and employment giving legitimacy to public R&D funding schemes Source: Loikkanen and Kutinlahti 2005.

Towards comprehensive framework of IP and related policy studies Source: Loikkanen and Kutinlahti 2005.

Integration of the past, present and future in IP studies Source: VTT Innovation Studies

Timeline of impact assessment: what we measure, when? Source: Tassey 1997

From ex-post evaluation towards strategic foresight of the future “Convergence” of impact assessment (IA) and technology foresight (TF) IA: from traditional ex-post evaluation towards interactive learning process supporting strategic orientation towards the future. TF: interactive learning process determined by path-dependent past and accumulation and sharing of future-oriented knowledge. Modern IA (rather than only assessing past success of R&D efforts) will generate ideas and perspectives for improving policy implementation and formulating novel approaches in the future (especially organization based IA & evaluation). Within this context future prospects of such exercises are promising in offering high-level research services to national, Nordic and European customers in public and private sectors.

Integrated IP research agenda of VTT-IS Source: VTT Innovation Studies

Conclusions TF processes too separated from other key phases of innovation policy-making i.e. shall be more integrated. Proposed framework: IP as systemic entity, supporting governance, implementation and development of IP making. IA and TF have “converging” characteristics especially with respect to learning from past for the future (especially organizational IA). The interaction of knowledge flows of IA and TF serves the needs of policy learning and strategic intelligence, facilitating actors to foresee and plan for advancing innovation system dynamics and functioning. The globalization key challenge to IP and underlying policy rationale, the framework may support the response this challenge. In IP studies community proposed approach provides closer collaboration culture between experts of IA and TF studies.