Audit of the Innovation System in the
BMW Region:
An Evaluation of a Regional
Knowledge Economy
Dr. Kieran Moylan
Assistant Director
Presentation Overview
Background – BMW Regional Assembly
Audit of Innovation in the BMW Region: An
Evaluation of a Regional Knowledge
Economy
Conclusions & Recommendations
BACKGROUND
• 1999 Ireland
Created 2
NUTS II
Regions
•Maximise
Structural
Funds Receipts
• Establishment
of 2 Regional
Assemblies
Role of the Regional Assemblies
• Managing Authority for the 2000-06 and 2007-13
Regional Operational Programmes – programme
planning, monitoring, financial certification &
compliance, evaluation, publicity
• Highlighting issues of concern for the region and
ensuring that national policies take the regional
dimension into account
•Research and polic y initiatives, pilot programmes,
submissions etc)
•National Contact point, first level control and regional
representative for Interreg Programmes
Innovation a Policy Priority
• Regional Innovation has been a key priority
for the BMW Regional Assembly for many
years
• Regional Assembly has managed two
Regional Programmes of Innovative Actions 12 pilot initiatives (€4.1m)
BMW Region Programme
Priorities 2007-2013
1. Innovation, ICT &
€200m
Knowledge Economy
2. Environment & Risk €75m
Prevention
3. Urban Development €182m
& Secondary Transport
Networks
Relevance of Innovation Sector?
- A strong knowledge-intensive services (KIS) sector
is one of the hallmarks of a knowledge-based economy
- Government Policy:- Building Ireland’s ‘Smart’
Economy, Strategy for Science, Technology and
Innovation (€1bn invested since 2000), supports
innovation
- However, to-date no funding specifically targeted at
the KIS sector, which is a relatively new area for policy
development
2. Audit of the
Innovation
System in
the BMW
Region
(2011)
ATLANT-KIS PROJECT
2009-2011
Project Goal
To enhance the knowledge & technology
transfer & innovation processes on SMEs
through the promotion and co-operation of
Knowledge Intensive Services (KIS)
• Provide leverage to the
public and private KIS
sectors in the Atlantic Area.
• BMW Regional Assembly
– Audit of Innovation
System (Focus on KIS
Performance)
www.atlantkis.eu
Why do an Innovation Audit?
0
20
4
•2004 Audit of Innovation
•Benchmarking Document
for Innovation
• Update and Revisit
Progress Achieved &
Develop KIS Analysis
• Funding
Role of Sector in the
Innovation System?
Participants in the Innovation System
Framework for Delivery
Outputs for Economic
Development
Methodology
3. Context:
SocioEconomic
Overview of
The BMW
Region
Challenges for the Region
to Turn Potential into Job/Growth
• Rural Region – High Reliance on ‘Primary
Sectors’
• Recession has impacted heavily on the
BMW Region: lags on a range of economic
indicators compared to the EU27 & S&E
Region
• Up-skilling a key challenge – move out of the
low-skills equilibrium
Population 2011
(2006+/-)
BMW Region
1.241m (+9.4%)
Ireland 4,581m
(+8.1%)
Low Population
Densities
(25-30 p/km2 )
BMW REGION
Less
Developed/Peripheral
Region
Low Levels of
Urbanisation
Underdeveloped
Transport Infrastructure
Labour Force
25% of National Workforce
Outw ard Migration Trends
Re-Emerging
Unemployment Above
Average (16% Q3 2011)
Strong Performance of
Emerging Technology
Sectors (e.g., Medical
Dev ices, Software
Technologies)
Regional Productivity
GVA 2000-2008 (*EU 27 = 100)
4. Performance of Innovation System
• BMW Region’s Share of Public R&D
Expenditure Remains Low
e.g. 13% Programme for Research in 3rd Level
11% Science Foundation Ireland Funding
19% Enterprise Ireland
BMW National Share
• Population 27% - Labour Force 25%
- Output 19% (GVA)
Headcount of Research Personnel (Number)
by Region, Sex, Year and Type, 2007
BMW Region
21% of Total
Research
Personnel
Business Expenditure on R&D by region, 2007
BMW Region
19% of Total
BERD
Expenditure in
the State
Survey of Innovation Companies
– Interacting with Innovation
System
Innovative Companies in the BMW Region
• 800 Companies
•159 responses (19.9% Response Rate)
• Agri-food & Manufacturing well represented
• + new growth areas
ICT - medical devices – technology- energy &
other traded services.
Database of Manufacturing, Technology & Int’ l Traded Service Companies
Characters of Innovative SMEs
• Small in Size
(60% 1-10 employees, typical of Regional Firms)
•Turnover – Reflects High Growth Potential
(43% of turnover greater than €500,000)
• Majority Operate in Domestic Market Only
(61% BMW Region – Int’l Markets Key
Development Areas)
Main Reason for
Engaging in the Innovation Process?
• Grow Sales, Turnover and Market Share
• Develop the Capacity/Skills of Employees
• Necessary for Survival
What source of information did you utilise
to identify a service provider?
What are the main barrier that
you perceive for contracting
innovation support services?
Grants a Key
Conside ration
for Enga ging
w ith Public
Sector
Supports
Source of Innovation Support &
Satisfaction Rating
92%
77%
Challenges for Public Sector
• Slowness of
Response
• Culture Gap between
Academia & Industry:Not Sufficiently
Business Orientated
Challenges for Public Sector
•Lack of Co-ordination/Appropriate Points of
Contact
•Inadequate Delivery/ Quality Issues
• Poor Understanding of Needs/Different
Expectations Regarding Research Outcomes
5. Survey
of Private of
KIS
4. Performance
thein the
BMW Region
Innovation
System
What are Knowledge Intensive
Services?
KIS = Innovation Service Providers
Organisations (public or private) that provide
Innovation Services i.e. Knowledge-based
support, including applied R&D, innovation
activities
Positive impact on business processes and
activities - thereby assisting them to innovate and
grow.
Characteristics of Private Sector KIS
• Small in Size
(73% with less than 10 Employees)
• Graduate Employee Levels High
(78% of all employees 3rd level graduates)
• Relatively New Enterprises
(67% est. since 2000)
• Small in Size but Growing
(47% of companies with turnover less than
€100k)
• R&D a Key Feature for Development
(20% of turnover invested in R&D Department)
% KIS Companies Collaborating with another
KIS Provider
40%
30%
20%
10%
0%
Univers ity
Ins titute of
Tec hnology
Private KIS
Provider
Other
The Barriers that KIS Clients
Report
60%
50%
40%
30%
20%
10%
0%
Pri ci ng
Lack of
awa renes s of
avai la ble
s ervices
C oncerns over
the abi l ity to
prot ect
Inte ll ectual
Pr operty
Lack of
percei ve d
re turn o n
inves tment
Difficul tie s i n
i dent ifyi ng
appro pria te
so urces of
fund ing
Publ ic s ector
Di ffi cu lti es in
competi ti on
id enti fyi ng
(a ge nci es ,
q ual ifie d se rvi ce
l abora tori es,
provi ders
organi sati ons )
Other
Opportunity Cost of Investing in Innovation/R&D
Activities
Private Sector KIS – Business Support Needs
• 73% Identified Additional Business Supports
they would find useful
• However only 43% Reported Accessing
Supports Previously
Accessing Supports:
‘I would like a dedicated 'one point' industry-academic group not an institute or county enterprise but a qualified and
experienced group of people who could be the go b etween for all
of those institutes. It would b e a far more efficient service’.
Dynamic Knowledge-Led Sectors
Emerging in the BMW Region
• Companies in the Knowledge Intensive
Services Sector worth €1bn to Regional
Economy
• World Leading Medical Devices Cluster,
Galway (Manufacturing of Medical Devices,
employing circa 9,000)
Dynamic Knowledge-Led Sectors
Emerging in the BMW Region
•Other Leading Technology Sector Identified:
Computer & Communication Hardware (6,500)
Pharmaceuticals (6,100)
Software and Communication Services (5,300)
6. KIS in the BMW Region
(Public Sector)
Public Sector Institution
• 1 University: NUI Galway (St. Angela’s
College)
• 5 Institutes of Technology
Athlone IT, Dundalk IT, Galway/Mayo IT
Letterkenny IT, Sligo IT
(40,000 Students)
• 2 Applied Research Centres
The Marine Institute
Teagasc Rural Economy Research Centre
Comprehensive Mapping of
Public Sector KIS Provision
Example: NUI Galway
Campus Innovation Centre - promotes entrepreneurship and new business growth
and offers suitable incubation space and support services for new knowledge intensive
companies in sectors such as the biotechnology and biomedical sector.
Technology Transfer Office (TTO) – provides technology transfer support based
around a four stage process of ‘Invention disclosure’, ‘Invention evaluation’,
‘Co mmercial strategy development’, and ‘Commercial strategy execution’.
Centre for Innovation and Structural Change (CISC) – an umbrella research institute,
offering a common ground where researchers from different disciplines and
backgrounds can meet, debate and research.
Regenerative Medicine Institute (REMEDI) – a research institute conducting research
into regenerative medicine therapies; conducting clinical trails and developing new
products in collaboration with industry in the sector.
Digital Enterprise Research Institute (DERI) – an applied research institute looking
into the next wave of the internet through the use of semantic web systems such as
sensor networks working directly with industry.
Institute for Environment, Marine and Energy – promoting an interdisciplinary centre
of excellence and providing high-quality research for the sector.
7.Policy & Programming Framework
Programming Review + Consultation
undertaken with:
• Key Policy Makers from Government
Departments & Government Agencies
• Business representative groups
• Academia
(Regional Workshops & Individual
Interviews)
7.Policy & Programming Framework
• Support programmes have strengthened
research capacity
•There is now a shift towards
commercialising SSTI investment
• BMW Region share of national competitive
funding remains low
7.Policy & Programming Framework
• Ireland’s Innovation Policy is set nationally
– doesn’t enable a regional response
• National Policy – not regionally ‘proofed’
• Shift in emphasis seeking return on
investment – new policy orientation required
Conclusions &
Recommendations
Contribution of Private KIS
• KIS an important sector of the BMW Regional
Economy
• Contribute as both “Carriers of Innovation” and as
Innovative Companies in their own right
• Also as Highly Networked Providers of Innovation
in Support of Innovation
•Greater Recognition & Understanding of Sector
Required
How is the innovation system
performing in the BMW Region?
• Knowledge Transfer & Innovation Support
Activities are a Priority
• HOWEVER funding limitations & concerns
around return-on-investments from
innovation remain a challenges for private
companies
• Networks & Networking identified as key
sources of information for the KIS Sector
How is the innovation system
performing in the BMW Region?
• Innovation is marketled rather than grant
driven
• However public
grants remain a key
consideration
Conclusions & Recommendations
• Dynamic cluster of knowledge intensive
services – leading transition to
knowledge/smart economy in the BMW
Region
• Opportunities to exploit potential and
translate to jobs and growth
Conclusions & Recommendations
• National innovation policy – Needs a more explicit
regional dimension (reflect local & regional
economic realities, linkages & networks)
• Lead to the development of Regional Innovation
Strategies + more robust monitoring & evaluation
systems
• Single point of industry/academia to address
barriers to accessing services
• Both bottom-up and top-down approaches needed
Conclusions & Recommendations
• Greater exploitation of regional assets
– identify the evident regional comparative
advantages along with the innovation and
capacity required to deliver the optimum
output
(Smart Specialisation)
Conclusions & Recommendations
• More sustained investment is required in
Innovation Centres & Incubation Centres to
Commercialise R&D Activity
• The role of HEIs in knowledge and
technology transfer should be expanded could yield more tangible returns for
Government investment in R&D
OECD – Regions & Innovation Policy
(2011) Calls for:
• Outcome-driven regional strategies, built on
knowledge-based capabilities
• A smart mix of knowledge generation,
diffusion & exploitation
• A greater emphasis on innovation absorption
and adoption in non-leading regions
• Improved policy-relevant regional data
compilation
OECD – Regions & Innovation Policy
(2011)
“Regions are not
countries and
(Governments) cannot
simply replicate
national policies at the
regional scale”
Report Launch – May 2011
www.bmwassembly.ie