S3 Platform – Peer Review Workshop
25-26 February 2014, Riga
RIS3: IMPLEMENTATION
AND POLICY MIXES
Claire NAUWELAERS
Independent expert in STI policy
1
KEY Challenges RIS3
Two novelties/key benefits of RIS3:
 from introspection to “extrospection” : an open view to regional policies
 from administrative to strategic management of policy
Main challenge in implementation of RIS3:
 Translate broad strategies into efficient and integrated policy mixes
Main bottlenecks to “serious” implementation of RIS3:
 Policy-makers resistance to:



Long-term investments (returns beyond 4-year legislature…)
Genuine prioritisation (selection and de-selection!) – coping with lobbies…
Cross-domains, cross-level and cross-border policies
 Little evidence to identify “white spaces” between sectors, clusters, poles,…
 Need for more robust, systematic and systemic policy evaluations
2
Implementing RIS3
Challenges:
 Overcoming path dependency and inertia:
 adapting old institutions to new policy models
 developing unlearning capability in policy circles
 bringing coherence in “historical” policy mix
 From «silo»-driven to «outcome»-driven policies:
 starting from desired outcomes rather than from instruments machinery
 from incremental improvements in existing portfolios to radical
restructuring
 Developing systems for policy accountability focusing on effectiveness
rather than efficiency

Allowing policy experimentation (innovation!) in policy
3
The S3 OECD enquiry
• Priorities
Implicit/explicit
RDTI/economic
Regional/national
• Processes
Selection criteria
Stakeholders involvement
Analytical and evidence base
• Policies
Policy instruments
Budgets
Monitoring & Evaluation
Source: OECD (2013) Smart Specialisation in global value chains:
designing and assessing smart specialization strategies
Selection criteria for priorities
Keep existing activity
Potential for higher added value
Potential for additional employment
Strategic autonomy
Potential to cope with societal…
Internationalisation of economy
Natural resources
Geographical location
Strong local clusters
Entrepreneurial activity
Cost advantages
Unique strengths and production…
Talent base
International competitiveness
Strong market players
Innovation capabilities
Technical infrastructure
Technological strengths
Local lead companies
Strong local R&D organisations
Future
potential
Regions
Countries
Current
strengths
Key findings: PRIORITIES
Difficulties to ensure the validity of responses to the question
of existence of explicit and implicit priorities


Inconsistency between: i) policy documents ; ii) budgetary
allocations; and iii) existence of major institutes,
organizations or programmes dedicated to the priorities.

Timing issue: priorities definition / policy mix definition

Explicit priorities are more frequent for research and
innovation than for economic development

Prioritization is more intense at regional than at national level

Prioritization trends are on the rise, at strategic and
implementation levels
Source: OECD (2013) Smart Specialisation in global value chains:
designing and assessing smart specialization strategies
Key findings: POLICIES
GAP POLICY FORMULATION / IMPLEMENTATION
 No clear link between priorities and policy mixes
 A strategic view on public « innovation » budget is missing
 Key policy instruments:
 Dedicated institutes, competence centres
 Thematic R&D funding programmes
 Cluster policies (regional level)
 A-typical policy instruments:
 Innovation-driven public procurement
 Bonus system in generic funding programmes
• Monitoring and evaluation systems hardly tuned to priorities
Source: OECD (2013) Smart Specialisation in global value chains:
designing and assessing smart specialization strategies
Policy Mix Definition
Combination of policy instruments,
which interact to influence framework conditions,
alleviate barriers and raise capabilities for innovation
 Instruments: all programmes, organisations, rules and
regulations with an active involvement of the public sector,
which intentionally or unintentionally affect innovation
 Interactions: the influence of one policy instrument is modified by
the co-existence of other policy instruments in the policy mix
 Influences on innovation are either direct (instruments from
innovation policy field) or indirect (all policy instruments from any
policy field which indirectly impact on innovation)
Source: UNU-MERIT « policy mix » project
http://ec.europa.eu/research/policymix
8
Policy mix conceptual
framework
NIS / RIS
Characteristics
Broad Policy
Objectives
Governance
Other
policy
Other
Other
instrum
policy
policy
ent
instrum
R&D instrum
R&D
innov Innov
policyent policy
Other ent
R&D
policy policy
instrum instrum
policy
policy
instruminstrum
ent
ent instrumOther
R&D
Other ent
instrum
ent
policyent
policy
R&D
policy
R&D ent
instrum
instrum
policy
Innov
instrum
policy
ent
ent
instrum
policy
ent
instrum
ent instrum
ent
ent
Policy impacts
9
Policy mix design
1) Challenges for RIS
2) Policy Objectives and RIS3 priorities
3) Gaps between Challenges and Objectives
4) Instruments (various policy domains)
5) Gaps between Objectives and Instruments
6) History (inertia!)
7) Actors (stickiness, agility, hidden agendas…)
8) Balances within policy portfolio
9) Interactions (positive, negative)
10)Governance (horizontal, vertical)
10
Two complementary views
on policy mixes
1. Routes and Balances – macro view
What is the balance of instruments from various
domains in a portfolio, and with which policy objectives
are these better aligned ?
2. Interactions – micro view
How do various policy instruments interact within a
portfolio of policies ? Final effect ?
11
Different regions require
different strategies
Main strategy
Type of region
Building on current advantages
(science push/technology-led or a
mix)
Supporting socio-economic
transformation
Catching-up: towards the creation
of knowledge- based capabilities
Knowledge hubs
Knowledge and technology hubs
Knowledge-intensive city/
capital districts
u
u
w
w
s
s
Industrial production zones
US States with average S&T
performance
u
w
s
Service and natural resources
regions in
knowledge-intensive countries
Medium-tech
manufacturing
and service providers
u
u
u
w
u
s
Traditional manufacturing
regions
s
w
u
Non S&T-driven regions
Structural inertia or
de-industrialising regions
w
u
w
Primary sector-intensive regions
s
w
u
Source: Regions and Innovation Policy OECD 2011
12
Different regions require
different strategies
No external connection
Single external
connection
Multiple external
connections
Centralised
RIS
Build hinge
through hub
Build multiple
global
connections
Regional
networking
Decentralised
Dense RIS
Find external
connection/get a
global perspective
Build multiple
global
connections
Anchor global
firms regionally
Decentralised
Sparse RIS
Change system/
path-breaking grand
project
Increase regional Increase regional
networking/
networking/
build global
prepare for
connections
global linkages
Source: Regions and Innovation Policy OECD 2011
13
Key issues for building smart
and efficient policy mixes
•
Value of integrated (“packaged”) policy instruments
•
Finding the right balance between instruments addressing firms in
isolation v. systemic relations; fostering internal v. external connections
•
Drawing effectively on interactions between several areas of policy
•
Vital component of policy mixes: human resources for innovation and
associated policies to attract and retain talent
•
Putting more weight on demand-side policy instruments, in particular
by introducing innovation-oriented public procurement
Source: Regions and Innovation Policy OECD 2011
14
Policy Domains depend
on each other
Education
Industry/Trade Policy
Policy
Labour Market
Policy
Health
Policy
Legal/IPR
Policy
Regional
Policy
Science
Policy
R&D
Policy
Competition
Policy
Environmental
Policy
Innovation
Policy
Defence
Policy
Monetary/Fiscal
Policies
Infrastructure
Sector
Policies
Policies
Macroeconomic
Policy
15
Policy Interactions
 Interactions between policies:

positive and complementary, with one amplifying the effect
of the other in terms of impacts on innovation

negative and interfering destructively, with one attenuating
the impact of another

neutral and functioning quite independently, with impacts
also independent
 One policy problem  One new instrument ?
the extensive implementation of new instruments bears
increased risks of substitutive effects or unwanted interferences
16
Example: stimulating start-ups
versus supporting academic research
GO Bio Programme Germany: grants for university
researchers to advance research towards marketable products
and start a university spin-off (~30 m€)
Initiative for Excellence: Funding of top-level academic
research at German Universities - selecting 10 top-level
Universities, funding of special research programmes, both
providing additional research funding (~1.9 b€)
  leading university institutes in biotechnology were
successful in acquiring IfE money - researchers focus on
academic careers, little demand for Go Bio
17
Defining broad routes
to increase innovation
 ROUTE 1: promote establishment of new innovative firms
 ROUTE 2: stimulate further innovation in innovative firms
 ROUTE 3: stimulate innovation in non-innovative firms
 ROUTE 4: attract innovative firms from abroad
 ROUTE 5: increase innovation in cooperation with public sector
Mapping types of instruments versus routes
18
Prioritizing between routes
 Defining priorities between routes should ideally be informed
by:



NIS/RIS SWOT analyses
Policy reviews and evaluation
Intelligent trans-national benchmarking practices
 In reality, often product of:




Policy fashions or fads, EU “standards”
Naive imitation strategies from trans-national
observations
Pressure of lobbies: priorities as addition of narrow
specific interests
Parallel views between “science” and “economy”
ministries
19
Prioritizing between routes
Evolution of priorities amongst the routes characterised by:
 History weight: stickiness of main policy orientations –
stability of structures – path dependency
 Cumulative processes: attention to new routes adds up to
previously retained routes
 Changes in the RIS: need for radical changes ? need for a
threshold of changes to be effective ?
 Condition: High degree of strategic policy intelligence
AND/OR radical shifts in NIS/RIS
20
Examples Routes
 Belgium

Route 5 (cooperation) covered by a large set of instruments

Route 4 (FDI): most heavily influenced by non-innovation policies

Route 3 (non-innovative firms): less attention, most difficult, big prospect for
competitiveness. Use of instruments from economic and industrial policy, but also from
the education and training spheres. Coordination of policies is needed !

Denmark

Route 2 (large R&D performing firms) in high-tech sectors: priority of Globalisation
Strategy

Neglect of the potential of SMEs in other sectors ? (Routes 3 and 5)
 Rhône-Alpes

Initial focus on Route 3 (increase technological absorptive capability)

Routes 5 (cooperation) is a continuing, traditional focus for French regional policy

Shift towards “Routes of Excellence” Route 2 (R&D-performing firms)
21
Portfolios composition
associated to routes








No standard portfolio by route – but some typical menus
Similar instruments with different characteristics contribute
to different routes (e.g. conditions for R&D grants; various
types of tax incentives)
Systemic instruments and mini-mixes span through many
routes
Often limited view on range of instruments linked to routes
(“one problem” – “one response”)
When made explicit, limited to innovation policy domain
Subject to trade-offs : broadening versus deepening R&D
efforts / excellence versus cohesion
Other horizontal priorities run across the Routes:
Thematic; internationalisation; human resources
22
Policy governance aspects
What strategies are available to meet the need
for coherence and coordinated implementation of
policy mixes?
 Strategic statements… to provide clear signal and
roadmap to all involved stakeholders (goals,
indicators…)
 High level coordination bodies…with high-level
political support and involving quadruple helix
stakeholders
 ‘Mini-mixes’: smaller scale, packaged set of
instruments designed as coherent whole,
addressing various aspects of innovation
23
Industrial restructuring:
two approaches with different impacts
on policy mix design
High-tech industry approach
R&D intensification approach
50
9
R&D Intensity
45
8
Share in total
production
40
7
35
6
30
5
25
4
20
3
15
2
10
1
5
0
Sector production,
% in total production
R&D expenditure,
% in total production
10
0
Low-tech Medium-tech High-tech Knowledge
manufacmanufacmanufacintensive
turing
turing
turing
services
Other
services
24
High-tech industry approach
 Identifying right target sectors
 Involving national and regional levels
 Bottom-up definition of research agendas
 Sequencing public support by target groups
 Involving non-R&D policies early, incl. regulation issues
 Harmonising technology-focused and generic R&D policies
 Establishing research infrastructures, esp. in basic research
 Connecting actors and encouraging industry-science links
 Addressing skill demands
 Encouraging internationalisation early
 Following a long-term view, but being flexible to address new challenges
25
R&D intensification approach
 Identifying barriers to R&D/innovation
 Developing a coherent industrial restructuring strategy and
programme
 Harmonising R&D policy with economic strategy
 Providing effective incentives for firms to invest in R&D
 Offering a favourable business environment
 Ensuring human capital supply
 Developing domestic demand for innovation
 Encouraging internationalisation
 Adapting policy to changes in the environment
26
Mini-mixes
 Programmes that package different instruments (funding
mechanisms - programme objectives - delivery
mechanisms- target groups) and/or routes, into one
coherent initiative. Designed in such a way that the
elements complement each other to achieve a specific
policy goal (e.g. innovation in bio-tech) or support a
specific target group (e.g. NTBFs).
 Often across different governance boundaries
 Thesis: mini-mixes have a more ‘synergetic’ approach
and might therefore be more effective and have fewer
internal conflicting influences
27
Mini-mix example: Technopartner NL
Integrated programme to support technology-based
start-ups
 TechnoPartner Seed capital facility
 TechnoPartner Knowledge Exploitation Subsidy
Arrangement (SKE) (pre-seed funding for R&D etc.)
 Patent support facility (legal & strategic advice)
 TechnoPartner platform (exchange of experience)
 Business Angel Programme (management support)
 Institutional pillar (strategic intelligence)
28
Mini-mixes success factors
 Require some form of stakeholder involvement and/or
expert opinion; Governments thus need to develop /
mobilise the strategic intelligence for such a process;
 In cluster type mini-mixes, consider tax-payers perspective
and ensure open and transparent process
 Systematic review of existing mechanisms necessary
 No single recipe for the implementation of such mini-mixes,
this is context - specific
 The evaluation and monitoring of mini-mixes is an area that
needs further development
29
Which policy instruments?
Form and focus of innovation support services for SMEs
Target of support
Global connections
Regional system
Individual Firms
Reactive tools providing inputs
for innovation
Excellence poles
Cross-border technology centres
Funding for international R&D or
innovation projects
Collective technology or innovation
centres
Proactive tools focusing on
learning to innovate
International technology transfer schemes
Mobility schemes
Support for global networking of firms
Cross-border innovation vouchers
Lead market initiatives
Cluster policies
Proactive brokers, match-makers
Innovation vouchers
Support for regional networking of firms
Schemes acting on the culture of
innovation
Management advice
Incubators with “hard” support
Incubators with “soft” support
Traditional “reactive” technology centres “Proactive” Technology centres
Seed and venture capital funds
Audits, monitoring of needs
R&D subsidies or tax incentives
Innovation Coach
Innovation management training
Techno-economic intelligence schemes
Source: Regions and Innovation Policy OECD 2011
30
Which policy instruments?
Source: Regions and Innovation Policy OECD 2011
31
Which policy instruments?
Improve actors’
competencies,
investments and
incentives to innovate
1
Public research
• Additional funding
• Revision of funding
mechanisms
• Reform of PROs
• Strengthen public
research infrastructures
2
Business R&D
• Additional funding
• Stimulate private
investments in R&D
• Provide non financial
support
3 Public sector innovation
• e-government and public
services delivery
• Public administrations
and govt demand for
innovation
4
Private sector
innovation
• Additional funding
• Stimulate private
investments in innovation
• Provide non financial
support
Improve actors’
interactions
5
STI platforms and
infrastructures
• Physical infrastructures
(incl. ICT)
• Industry-science (incl.
technology platforms,
science parks etc.)
• Clusters and CoE
• Open innovation
6
Valuation and
circulation of
knowledge
• IPRs
• Knowledge markets
7
Adjusting to
globalisation
• Internationalisation of
domestic firms
• Attract FDI and foreign
firms
• International mobility
of human capital
Strengthen
human capital
Improve
policy governance
8 Create an innovation
culture
11 Adapt governance
structures
• Interest of science
among youth and society
• General awareness
• Rewards, awards,
prizes
• Improve coordination
• Improve governance
mechanisms (incl.
agenda, formulation etc.)
12
9
Improve supply of
skills for innovation
• Education systems and
participation to HE
• Supply the right mix of
non S&T skills / S&T skills
• PhD and Postdocs
• Broaden access to S&T
studies and ensure equity
10
Evaluate the impact of
innovation policies
• Monitor innovation
• Feed back into policy
Ensure good
employment
conditions and LLL
• Attractiveness of
researchers careers
• Sectoral mobility
• Opportunities of LLL
Source: OECD Innovation Policy Platform
32
RIS3 “smart” implementation
 Coherence, Coordination, Communication

Tailoring policy goals and priorities to regional situation

Tailoring policy mixes to policy goals: Macro balances in policy mixes

Micro synergies within policy mixes

Think and act cross-domains, cross-actors, cross-levels, cross-borders
 Use of Strategic Policy Intelligence Tools

Monitoring and evaluation targets, indicators, analyses

Outcome-oriented and evidence-based policy implementation
33