How much innovation can you

get out of R&D programmes?

Wolfgang Polt Nicholas S. Vonortas

Joanneum Research George Washington University

& Athens University of Economics

and Business

“Turning Knowledge Into Practice”

Berlin, October 23-24 2007

Identifying Innovation Impact of R&D

• Prime concern for RTDI policy makers around the world,

but especially in Europe in view of the ‘European Paradox’

(good in research, lagging in innovation)

• This concern has influenced RTDI policy for the last 10-15

years and has resulted among others in

– Increasing emphasis on collaborative programmes (mainly

fostering industry-science relations)

– Asking for more innovation output from R&D programmes

• This trend can be observed both on the EU level as well as

in Member States

Identifying Innovation Impact of R&D Programmes

The INNOVATION IMPACT & IMPLORE Projects

• INNOVATION IMPACT and IMPLORE are two projects

launched by DG Enterprise to improve the understanding of the

innovation impacts of R&D programmes

– INNOVATION IMPACT tries to identify innovation impacts of the

largest collaborative R&D programme in Europe – the EU’s FP for RTDI

– IMPLORE looks into the R&D programmes of individual countries to

identify programme characteristics that are most conducive for

innovation impact

• Surveyed extensively FP5/6 projects, programme managers and

policy makers, programme participants and experts

Main findings from

INNOVATION IMPACT & IMPLORE

• Overall impact of the programmes on innovation

• Types of innovation triggered by the programmes

• ‘Additionality’ of the innovation

• Factors influencing innovation impact (on the

project and on the programme level)

Reported overall impacts on innovation

• We find (surprisingly) high overall impacts on innovation:

– A great majority of FP participants report at least some form

of commercializable output

– A majority of programme managers report innovation

impacts to be high or very high from their programmes

• …even as the hierarchy of project goals had not changed

and goals related to ‘direct commercialisation’ still are not

the most important ones for participants

Innovation Impacts on the Project Level

industry

research &

education

services &

consultancy total

New or improved products 53% 31% 43% 50%

New or improved production processes 39% 23% 29% 36%

New or improved services 40% 54% 68% 48%

Implementation of field trials 45% 42% 42% 44%

New or improved standards 25% 58% 25% 26%

Innovation Impacts on the Programme Level

Share of programme managers reported a „very high“ or „high“ impact

0 % 10% 20 % 30 % 4 0% 5 0% 6 0% 70% 80 %

Im p r o v e d tu r n o v e r e co n o my

Imp r o v e d in n o v .p e r f.e co n o my

E n h a n ce d co mp e titiv e n e ss e co n o my

N e w o r im p r o v e d s ta n d a r d s, r e g u la tio n s o r p o lic ie s

N e w sta r t- u p co m p a n ie s o r sp in - o ffs

Im p r o v e d tu r n o v e r p a r tic ip a n ts

P a te n ts , lice n se s, co p y r ig h t, o th e r IP R

N e w o r im p r o v e d se r v ice s

E n h a n ce d co m p e titiv e n e ss o f p a r tic ip a n ts

N e w o r im p r o v e d p r o d u cts

N e w o r im p r o v e d p r o ce sse s

Im p r o v e d in n o v . p e r f. P a r tic ip a n ts

"T a n g ib le " kn o w le d g e o u tp u ts

" In ta n g ib le " kn o w le d g e o u tp u ts

Types of Innovation (I)

• Firms do not consider the FP primarily as a channel for developing outputs that could be immediatelycommercializable. The dominant objectives for participation were reported to be

– “access to complementary knowledge and skills”

– “keeping up with state-of-the-art technological development”– “explore different technological opportunities”

• FP projects tend to be viewed by participating organizations as vehicles for exploring new areas. In contrast, self-funded cooperative R&D projects which are primarily used by the respondents for technology exploitation (closer to the market).

Types of Innovation (II)

• Compared to cooperative R&D projects funded exclusively with own internal funds, FP projects were reported, on average, to be characterised by:

- longer term R&D horizon

- greater interest in peripheral (read new area) technologies

- more explorative nature

- lower degree of flexibility and higher administrative burden

• Compared to the average R&D project, FP projects were reported, on average, as:

- more complex

- more long-term oriented

- riskier from a scientific and technical point of view

- similar in terms of commercial risk

Additionality

• Substantial input additionality – but only among smaller firms. Participation in FP4 and/or FP5 was associated with a significant jump in R&D intensity between 2000 and 2004 among firms of up to 100 employees.

• Higher Risk (Sci/Tech, commercial), novelty of technology area, and new combination of partners (newcomers) increase the chance of output additionality

• Reported output additionality is not different between FPs and not markedly different between instruments.

Differences reported between thematic areas in terms of output additionality. Higher in new areas (e.g. NANO)

Policy insights (I)

• Directly commercialisable output is not a core objective of

the Framework Programme. Yet we find significant impact

on innovation. Caution should be exercised in extensively

modifying the Programme to further enhance direct

innovation impact.

• Keep funding instruments simple. Maintain instrument

continuity. Deep changes increase costs of Programme

administration without demonstrably significant benefits.

Policy insights (II)

• Rather than focusing too much on differences among instruments applied horizontally across all thematic areas, pay closer attention to the needs of the broad thematic areas and associated markets, and the needs of participating organizations.

• The individual FP R&D project is a single research instance among many for participating organizations. Do not expect huge (additional) impacts either on innovation or on the ‘behaviour’ of large participating organizations.

• Promote projects that are risky, technically complex, and in new areas.