Innovation Policy in Estonia
Marika Popp
Ministry of Economic Affairs and
Communications for Estonia
Technology and Innovation
Division
Global Education: Universities in
the 21st Century
6 July, 2006
Agenda
-
The European context
-
Activities and developments up to now
-
Main challenges and weaknesses
-
Strategic lines of actions in the new Knowledge-based
Estonia 2007-2013
The European context 1: Lisbon & beyond
Shift towards more sophisticated target setting:
– Recognising need to optimise policy mix per Member State (per
region in larger countries);
– Taking better account of baseline R&D capacities and priorities in
each Member State;
– Acknowledging differences in innovation drivers and processes of
key business sectors.
– Aiming at critical mass by integration of research and innovation
effort via EU wide technology platforms and transnational cooperation.
The European context 2: Lisbon & beyond
At EU level pledge to develop a ‘common approach’ for research and
innovation. Addressing:
– “the full research and innovation spectrum, including nontechnological innovation”.
October 2005 Commission Communication argued for “strengthening the
links between research and innovation”, with:
– research policy focusing more on developing new knowledge
and its applications and the framework conditions for research;
and
– innovation policy focusing on transforming knowledge into
economic value and commercial success”.
Estonian R&D&I governance system
Policy
design
Parliament
Government
R&D Policy Council
Innovation Policy Commission
Programme
design
Programme
administration
Projects
R&D Policy Commission
MinistryofofEconomic
Ministry
Economic
Affairs
Affairs
and Communications
and
Communications
Ministry of Education and
Research
Science Competence Council
Enterprise Estonia
Enterprise
Estonia
Science Foundation
KREDEX
Enterprises
Firms
R&DInstitutes
RD
Institutes
Competence Centres
Academy of Sciences
Archimedes Foundation
Universities
VC
Policy framework
Objectives set out in Knowledge Based Estonia 2002-2006:


Updating pool of knowledge, focus on three technology areas
Increasing the competitiveness of industry, main precondition –
integration mechanisms between research and industry
Main targets related to:


Increasing level of expenditure on R&D, notably business expenditure
Better balance between basic and applied research activities
Selected results 2002-2006

Improved R&D financing governance

More effective doctoral studies system

Centres of Excellence and Technology Competence Centres

Increased R&D capacities of enterprises

New investments into R&D infrastructure

Support for commercialisation of research results

Increase of human resources at innovation support structures

Increased public awareness of innovation and technology
A.Reid Technopolis 2005
Estonian R&D expenditure of GDP, %
Gross R&D expenditure of GDP, %
1,6
1,5
1,4
1,3
1,2
1,1
1
0,8
0,6
0,75
0,7
0,9
0,8
0,73
0,75
0,83
0,91
Knowledge based Est onia
0,62
0,4
0,2
0
1999
2000
2001
2002
“Knowledge based Estonia”; Statistical Office of Estonia
Act ual
2003
2004
European Innovation Scoreboard
2005
180
160
LU
2004 Per capita GDP (EU25 = 100)
NO
140
IE
120
NL AT
IS
FR
UK
IT
100
DK
BE
SE
FI
DE
ES
EL
80
CY
MT
SI
CZ
PT
HU
60
SK
PL
LV
40
RO
LT
EE
BG
20
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
2005 Summary Innovation Index
High-income
Source : European Commission / DG ENTR D1
Low-income
Linear (Low-income)
Log. ("All countries")
Innovation in business sector – main
bottlenecks




Innovation deficit (business R&D expenditure 0,36% of GDP in 2004 (EU
average 1,22%);
Only a 1/5 of innovative companies have innovation expenditure above
64.000 EUR or 5% of turnover, 20% had no expenditure (CIS 2000)
Sales income from new products and services as a share of turnover two
times lower than EU average
Innovation activity in firms essentially process (introduction of new
technologies) not product (purchasing costs of machinery and equipment
amount to 60% of total innovation expenditures)
BUT – fastest growing private sector R&D expenditures in EU!
Share of innovative enterprises has grown significantly from 36% in
2002 to 49% in 2006
Innovation expenditure as % of sales has grown from 1,2 to 1,6%
Cooperation with universities has decreased
A.Reid Technopolis 2005
Ranking of industries in Estonia by
productivity in 2004 and their share in
manufacturing employment
1800
16
1600
14
1400
12
1200
10
1000
8
800
6
600
4
400
2
200
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S h a r e fr o m to ta l e m p l o y m e n t i n m a n u fa c tu r e (% )
Share of enterprises’ R&D expenditure in
GERD (%), 2003
Japan
Sweden
Finland
Ireland
Germany
Belgium
US
Denmark
EU 25
France
Netherlands
Norway
Czech Republic
Spain
UK
Slovak Republic
Italy
Austria
ESTONIA
Greece
Portugal
Poland
Hungary
73,9
71,9
69,5
67,2
65,4
64,3
63,1
61,5
55,5
52,1
51,8
51,6
51,4
48,9
46,7
45,1
43,0
42,6
33,9
33,1
31,5
31,0
30,7
0
10
20
30
40
50
60
70
%
80
Goals and indicators in Knowledgebased Estonia 2017-2013
Goals
Increase of the quality levels and volumes of Estonian R&D
Main indicators by 2014
8 R&D workers per 1000 employees (5 in 2004),
Share of updated infrastructures 80% of all infrastructures (ca
20% in 2004)
GERD 3% of GDP (0,91% of GDP in 2004)
Innovative entrepreneurs creating value and growth to Business R&D expenditure 1,6% of GDP (0,36% in 2004),
compete globally
Business innovation expenditure 2,5% of turnover (1,6%
in 2004);
Productivity per employee 72% of the EU25 average
(50,6% in 2004)
Employment in medium-high and high-tech sectors 11%
of total workforce (7,6% in 2004)
Innovation-friendly society oriented to long-term development Increasing inflow of knowledge and technology intensive FDI
Increasing inflow of foreign researchers and students
Increasing number of internationally recognised Estonian
brands and trademarks
Strategic lines of actions in
Knowledge-based Estonia 2007-2013
Development of human capital
Raising the efficiency of RD&I system
Raising the innovative capacities of enterprises
Developing long-term oriented policy making
Raising the innovative capacities of
enterprises (1)
1.
2.
Supporting the creation and growth of new innovative companies
Developing science and technology parks
Innovation awareness raising & competence building, including business plan
competitions
Early-stage venture capital for innovative ventures (NEW)
Promoting collaborative technology development, transfer of knowledge and
technologies
Continuation and extension of Technology Competence Centres, aimed at
supporting collaborative technology development between enterprises and
RD institutions
Supporting commercialisation (incl IP protection, prototyping & proof of
concept) of RD results achieved in universities and other HEI-s (MODIFIED)
Supporting participation of Estonian companies in international RD
programmes and networks (activation, consultation, co-financing)
Supporting international technology transfer through IRC network
Improving human capital mobility between HEI-s/universities and enterprises
(NEW)
Raising competence on innovation management, offering innovation audits
and technology counselling (NEW)
Raising the innovative capacities of
enterprises (2)
3.
Raising technology levels and boosting innovation potential of
Estonian enterprises
-
Continuing support to business RD&I projects, extending the
existing range of support to provide a ‘tool-kit’ for equipment
purchase & take-up of new technologies, licensing and patenting,
industrial design etc (MODIFIED)
-
Supporting collaborative actions between group of enterprises
and the formulation of clusters (NEW)
-
Supporting the recruitment of RD and innovation personnel
(researchers & doctoral students, engineers, designers, marketing
specialists) (NEW)
-
Raising competence on innovation management, offering innovation
audits and technology counselling (NEW)
Evident need to focus on most
perspective clusters/areas…
…will be based:
1) On the RD&I strategy, which identifies:
– Key technologies: ICT, biotechnologies, material technologies
– Socio-economic challenge areas (inconclusive list): energy,
environment, health care, security, information society
2) On the results of foresight and sectoral studies
3) On the results of cluster development activities
… will be carried out:
1) Through national RD programmes (to be elaborated and implemented
according to the new RD&I strategy)
2) Through directing the existing measures to specifically address a
particular sector or technology area (e.g thematic calls, sub-budgets for
certain sectors or technologies)
Current Policy Mix: Strengths and
Weaknesses
Research policy:
– Need to further prioritise and focus spending on research teams which:
a) have leading edge potential vis-à-vis EU research agenda, or
b) provide response to specific needs of Estonia economy and society.
– Lack of longer term strategic research programmes at national level (multidisciplinary and cross-institute teams).
Innovation policy:
– Need for sectoral/thematic actions to support innovation in wider group of
enterprises;
– Current enterprise innovation financing measures need to be widened to
include technology transfer & ‘non-technological’ innovation (design,
marketing) issues.
– Increase investment in infrastructure and services for ‘high-potential’ firms
(spin-offs, research intensive inward investment)
A.Reid Technopolis 2005
Research and Innovation: Key Challenges
for Estonia
Research policy:
– 1) Adopt a long-term financial perspective providing a stable environment for
research activity
– 2) Pursue reforms to create an internationally competitive research system
– 3) Reinforce elements of research systems responding to specific needs of
Estonian society
Innovation policy:
– 1) Close the productivity gap through increased technology diffusion;
– 2) Increase export of innovative products;
– 3) Improve networking and co-operation turning knowledge into innovation.
Policy Governance :
technology foresight, enterprise innovation studies, procurement, fiscal environment,
etc.
A.Reid Technopolis 2005
A proposal for a strategic framework for
research and innovation
Overall vision:
– By 2013, Estonia will be recognised as Europe’s most innovative and competitive
small nation.
– Centred around ‘human potential’ as key leitmotiv for knowledge economy.
Strategic objectives:
– A skilled population open to new technologies, products and ideas
– Business leaders open to innovation and risk-taking in new technologies and
markets;
– Researchers working at the forefront of science, open to co-operation to create
value from invention.
Four key priorities:
– A creative and innovative population;
– Attracting, creating and developing innovative enterprises;
– Investing in internationally competitive research;
– Future needs of Estonian research & innovation system.
A.Reid Technopolis 2005