Innovation policy in Europe a multilevel game Workshop "Innovation policy in Europe", Centraal Planb

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Innovation policy in Europe- a multi-level
gameWorkshop "Innovation policy in
Europe",Centraal Planbureau (CPB), Den
HaagDecember 15th, 2005

• Stefan Kuhlmann, Karlsruhe/Utrecht

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Fraunhofer Institute for Systems and Innovation
Research (ISI) ...
... anticipates opportunities, risks and barriers
associated with technological development, ...
analyses innovation processes, systems and
possible policy actions, ... explores necessary
adaptation processes, ... advises public and
private actors at regional, national and
international levels.
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Overview

• Innovation system, success factors and political
  support
• Detour European Research Area a historic
  ambition
• Role of European dimension Research policy
  institutions industrial clusters culture
• Innovation political governance of European
  multi-level, multi-actor system
• 3 stylised scenarios of future European
  innovation policy arenas
• Ideal political multilevel, multi-actor
  governance for innovation in Europe?

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Research approach Innovation systems (IS)
Source Kuhlmann Arnold 2001
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IS Success factors and political support
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Internationalisation of industrial D
out FDI in BIP in

• Foreign Direct Investment
• Greenfield Investment
• Result of MA
• Off-shoring of RD services

Source OECD (2005)
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RD expenditure of 1000 largest RD conducting
firms per country
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Innovation policy in Europe

• Innovation systems in Europe fragmented
• Need for 'European Innovation Policy', aiming at
  'European Innovation System'?
• Who would take which responsibility? What
  governance would take command?

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Detour European Research Area a historic
ambition

• The ambition An open, competition-driven,
  competitive, attractive space for science,
  research, education and innovation across Europe
  stop national segmentation and fragmentation
• ERA initiative in 2000 Commission's management
  by surprise addressing a broad range of ST and
  education policy areas, at multiple levels -
  regional, national and EU (Kuhlmann/Edler 2003)
• Involving a number of different instruments and
  measures such as
• EU Framework Programmes 6th FP (2003-07)
  implemented, impressive number of large
  "Integrated Projects (IP)" and "Networks of
  Excellence (NoE)" started, joint
  policy-initiatives by national actors, funded by
  the EU Commission (ERA-nets) launched
• Open method of coordination
• Barcelona target to spend 3 of GDP on research
• Member State aid rules
• Schemes for intra- and extra-EU mobility of
  scientists and technologists
• 2004 ff even more ambitious serious will of
  relevant institutional actors on national and
  transnational levels to create a pan-European
  funding agency for basic research ("European
  Research Council") in due time almost
  unthinkable until the late 1990s

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Innovation political governance of European
multi-level, multi-actor system
"Network governance
Treaty Competition
Problem (?) growing gap between integrated
market and internationalisation of innovation
vs. fragmented and stratified policymaking
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Role of European dimension Research policy
Source Erkko Autio, in EU DG Enterprise, Future
directions of innovation policy in Europe,
Proceedings, Brussels 2003, EUR 17055
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Role of European dimension Institutional and
regulatory frames
Source Erkko Autio 2003
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Role of European dimension Industrial and
cluster policy
Source Erkko Autio 2003
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Role of European dimension Shared innovation
culture
Source Erkko Autio 2003
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3 stylised scenarios of future European
innovation policy arenas

• increasingly centralised and dominating
  transnational European innovation policy arena,
  weakened national authorities and (partly)
  strengthened regional autonomy
• progressive decentralisation and open competition
  between partly strengthened, partly weakened
  national or regional innovation systems and
  related policy arenas
• centrally mediated mixture of competition and
  cooperation between diverse national or regional
  innovation cultures, i.e. a multi-level
  governance based on a problem-driven
  re-distribution of initiatives and
  responsibilities across levels.

(source Kuhlmann, S. (2001) Governance of
Innovation Policy in Europe Three Scenarios.
In Research Policy, Special Issue Innovation
Policy in Europe and the US New Policies in New
Institutions, edited by Hans K. Klein, Stefan
Kuhlmann, and Philip Shapira, vol. 30, issue
6/2001, 953-976
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Scenario 1 centralised European innovation
policy arena

• Political system European state and EU
  Commission as government at its core political
  autonomy of the national political systems would
  decrease regional political authorities less
  affected (sandwich effect)
• Innovation policy arenas shape of national,
  regional or sectoral innovation infrastructures
  depend on regulatory and investment decisions
  negotiated in transnational arenas and taken by
  strong transnational bodies.
• Research universities, research councils etc.
  pool e.g. in European Science Foundation.
  Industrially oriented contract research
  organisations like the Fraunhofer Society, TNO,
  VTT etc. amalgamate in a European Research and
  Technology Society etc.
• Regional grass-root initiatives, on the other
  hand, evolve, driven by local industrial and
  political forces.
• Plausibility not very likely, in particular in
  case of EU enlargement - vast number of organised
  actors would not allow a uni-linear top-down
  innovation policymaking. The degree of autonomy
  of important actors major research
  institutions as well as politico-administrative
  bodies at national levels should not be
  underestimated.

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Scenario 2 decentralised European innovation
policy arenas

• Political system after enlargement of the EU,
  the governance of the EU and its Commission is
  retreating, concentrating on maintenance of
  common market. Partly strengthened, partly
  weakened national or regional political systems
  and powerful corporatist actors compete hard,
  seeking to increase political autonomy and share
  of foreign direct investment.
• Innovation policy arenas the EU FPs, suffering
  from an overload of heterogeneous targets and
  expectations, will be terminated Council of
  Ministers and EP unable to agree upon 7th FP.
• Competition between national and/or regional
  innovation policies increases. Smaller nations
  that made significant investments in S/T,
  innovation and education already in the 1990s
  (like Finland or Switzerland) attract more
  international investment. Inter-regional
  trans-border coalitions launch EUREKA-like
  bottom-up innovation policies.
• By contrast, many less developed regions
  experience a growing gap between economically
  powerful and weaker parts of the continent.
• Plausibility less unlikely than many European
  policymakers may perceive - European economic
  history provides evidence of the strong role that
  the endogenous dynamics of regions have always
  played in economic development and industrial
  innovation.

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Scenario 3 mediated mixture of competition and
cooperation

• Political system co-evolution of regional,
  national and European policy arenas towards an
  integration in relatively effectively working
  multi-level, multi-actor systems. All three
  levels undergo a re-distribution of tasks,
  thereby experiencing new functional and
  informational linkages, vertically and
  horizontally. Initiatives of the géométrie
  variable type are accepted and implemented.
• Innovation policy arenas While regional or
  national authorities continue to improve the
  competitiveness of local innovation systems,
  the EU instead of running cumbersome own
  funding programmes mediates between the
  competitors and moderates their conflicts.
  Public investment in, and regulation of S/T and
  innovation originate mainly from regional or
  national initiatives and sources but are
  concerted and matched with any parallel
  activities throughout Europe.
• Plausibility Not too likely, though EU
  Commission is charged (since Maastricht Treaty)
  with the coordination of S/T policies across
  Europe. The European Research Area initiative
  taken by the Commission in 2000 as a first step.
  In essence, the probability of this scenario
  depends on policy learning capabilities of
  major actors in the European innovation policy
  arena.

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Shifting political power and governance?

• Large multinational companies and agile, flexible
  and internationally competitive regional entities
  (provided sufficient autonomy small countries
  'Länder' 'Regions') are the winners of shifting
  governance.
• Large countries' national state institutions will
  remain strong in financial terms but suffer
  from institutional inertia preventing them from
  intelligent and fast learning.
• In Europe (also in US?) a general shift from
  oligopolistic (primarily national) power
  structure in research policy arenas to
  multi-actor, multi-level arenas, characterised by
  network governance.
• EU Commission has some lessons learned ERA and
  follow-up rather aims at intelligent mediation
  and stimulation than top-down central integration
  consequences for innovation policy?
• NOTE Analysts still have to understand and
  digest such changes and adapt their research
  heuristics (e.g. PRIME NoE).

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Ideal political multilevel, multi-actor
governance for innovation in Europe?

• Attracting, stimulating, fostering innovation in
  regions and sectors? task of regional and
  (small) national policies, and of EU in lagging
  or strategic fields
• Creating favourable framework conditions (e.g.
  IPR bankruptcy regulation education standards
  systemic instruments ...) ? task of national
  govts and EU Commission (see e.g. ongoing
  Federal Reform in D)
• moderating between cooperation and competing
  regional, national, or sectoral actors ? task of
  EU Commission
• Coordination of innovation policies with EU
  research and other policies ? task of EU
  Commission

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Contact
Prof. Dr. Stefan Kuhlmann Tel 49 (0) 721 / 68
09 - 0Fax 49 (0) 721 / 68 91 52 Mail
s.kuhlmann_at_isi.fraunhofer.de Fraunhofer-Institut
for Systems and Innovation Research (ISI)
Breslauer Straße 48, D-76139 Karlsruhe
www.isi.fraunhofer.de Utrecht University,
Copernicus Institute, Innovation Studies Group,
NL-3508 TC Utrechtwww.nwi.uu.nl Many thanks
for your attention!!
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Literature

• dti (2005) The 2005 RD Scoreboard. The top 750
  UK and 1000 Global companies by RD investment.
  Commentary and Analysis. London DTI.
• OECD (2005) Science, Technology and Industry
  Scoreboard 2005 Towards a knowledge-based
  economy. Paris OECD.
• TLF (2005) Bericht zur technologischen
  Leistungsfähigkeit Deutschlands. Berlin BMBF
• Edler, J. / Kuhlmann, S. (2005) Towards One
  System? The European Research Area Initiative,
  the Integration of Research Systems and the
  Changing Leeway of National Policies. In
  "Technikfolgenabschätzung - Theorie und Praxis",
  Nr.1, Vol. 14, 59-68 (http//www.itas.fzk.de/tatup
  /051/edku05a.pdf)
• Smits, R. / Kuhlmann, S. (2004) The rise of
  systemic instruments in innovation policy. In
  Int. J. Foresight and Innovation Policy (IJFIP),
  Vol. 1, Nos. 1/2, 2004, 4-32. ISSN (Online)
  1740-2824 - ISSN (Paper) 1740-2816
• Kuhlmann, S. (2001) Governance of Innovation
  Policy in Europe Three Scenarios. In Research
  Policy, Special Issue Innovation Policy in
  Europe and the US New Policies in New
  Institutions, edited by Hans K. Klein, Stefan
  Kuhlmann, and Philip Shapira, vol. 30, issue
  6/2001, 953-976