Slide 1

Report
Role of Innovation in supporting UK and EU growth
Chris North
International Science and Innovation Unit
Warsaw Innovation Conference 2 December 2010
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Presentation in two parts
1. UK national innovation policy trends
2. UK perspective on the European
innovation policy agenda
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UK Government economic policy
• Reduce the deficit
• Encourage private sector led growth
• BIS is the UK Government department for growth,
bringing together in one place policy linked to the
‘knowledge triangle’ (higher education, research and
innovation)
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Why the policy focus on innovation?
• Key determinant of productivity and
growth/competitiveness post-crisis
• Need to ‘rebalance’ UK economy
• Innovation underpins development of new products,
processes services and global markets
• Its role in tackling ‘grand challenges’
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Role of Government
• To set framework conditions which incentivise
innovation (regulations, tax)
• To address market failures e.g. provision of finance to
SMEs
• To nurture the research base – e.g. need for more
PhDs
• To enable collaboration between academia and
industry
• To join up supply and demand-side
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UK strengths
• World class research (4 universities in world top 10)
• 1% of world population; 5% of world research
spending; 8% of world research publications; 14% of
world’s most cited papers;
• ‘Innovation leader’ (European Innovation Scoreboard
2010)
• Some research intensive sectors (pharma, aerospace)
• Top destination for inward R&D investment in Europe
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Number of R&D FDI Projects by Destination Country (2002-2006)
Netherlands
Finland
Sweden
Spain
Ireland
Germany
France
United Kingdom
Attracting R&D investment from global business
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UK Weaknesses
• Too few high growth, innovative companies with
global reach
• Over-concentration of economic activity in financial
services (City)
• Translating output from research base into high value
products and services
• Overall investment in R&D lagging behind key
competitors
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UK Coalition Government innovation objectives
• To build an attractive environment for start-up
technology firms (skills, open markets, tax, regulation)
• Invest in innovation infrastructure to commercialise
technologies (modelled on Fraunhofer institutes in
Germany)
• Encourage the demand side e.g. through Small
Business Research Initiative
The Impacts of Research
Improving the performance of
existing businesses
Delivering highly skilled people
to the labour market
Impact
Improving public policy and
public services; cultural and
health capital
Creating new businesses
Attracting R&D investment from
global business
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Examples of UK Coalition Government initiatives
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Science budget protected over next 4 years
Network of Technology and Innovation Centres
Competitive corporate tax regime
Review of Intellectual Property framework to make easier to
protect and enforce IP
Entrepreneur visa
Technology Strategy Board investment
Investment in fast broadband
Better Regulation – “one in, one out”
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UK Government announcements
• Blueprint for Technology launched by Prime Minister
November 2010
(http://www.bis.gov.uk/assets/biscore/innovation/do
cs/b/10-1234-blueprint-for-technology)
• Budget allocations to Research Councils and
Technology Strategy Board to be decided shortly
• Innovation strategy due to be published spring 2011
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UK view on European research based innovation policy
• Europe 2020
- Smart growth, sustainable growth, inclusive growth.
- ‘3% target’
• Innovation Union
- Will implement Europe 2020 – a ‘flagship initiative’
- Focus on grand challenges e.g. climate change
- Competitiveness Council Conclusions – November 2010
- European Council (Heads of Government) debate – early 2011
• European Research Area (ERA)/ Lisbon Treaty
- R&D now explicitly a ‘strategic objective’ of the Union
• EU Financial Perspective (2014)
- The budget for Framework Programme is the third largest
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Innovation Union: Key themes
• Research a key element but many others too (design,
business models, marketing etc)
• Single Market a powerful tool, e.g. services directive;
but still no EU patent
• Standards-setting needs to become more efficient
• Access to finance a barrier to many firms
• Linking up all parts of the innovation chain (‘Research
to retail’)
• Measurement
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European Innovation Partnerships
Aims
• To achieve better coordination between actors in the
innovation chain and myriad national and EU financial support
mechanisms
• Give the EU a competitive edge in growth of new global
markets while helping address societal challenges
• Pilot EIP for ‘healthy and active ageing’
• UK supports aims but has concerns about governance and
funding aspects
• Need evaluation of pilot before rolling out to other sectors
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EU Funding
• A confusing array of EU funding schemes support
research and innovation (FP7, EIT, CIP, Joint
Programming...) deters business
• Simplification agenda
• Efficient, well targeted spending essential in current
fiscal climate
• Positioning of research and innovation in EU budget
2014 onwards?
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Innovation Union: UK priorities
• Access to finance, especially for high growth
innovative SMEs – role for EIB Group to help address
deficit in Venture capital investment in EU and
complement grant based schemes
• Stimulate public procurement, through networking
between member state practitioners and support for
national schemes (like SBRI)
• An EIP model which delivers real benefit
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Innovation Union: UK concerns
• EU must add value not duplicate MS role
• Potential legislative approach to implementation of
ERA (Framework directive?)
• Lack of clarity about implementation
• Tendency to ‘top down’ approach
• Urgent need to reduce red tape, especially for
businesses (e.g. slow implementation of new
European Institute for Innovation and Technology
(EIT)/Knowledge and Innovation Communities)
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Framework Programme 8: a key vehicle for delivering
Innovation Union
• BIS currently conducting a public consultation
• Aim to publish a position paper early 2011
• Commission orientation paper in February 2011 and
online consultation leading to formal proposals end
2011
• Negotiation between Council and European
Parliament 2012/13
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Key Questions
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What is the 'added value' of EU research versus national funding?
Should the primary criterion for Framework funding continue to be
excellence?
What actions need to be taken to generate a step change in
efficiency of FP management?
Balance between addressing grand challenges, technology-driven
research and curiosity-driven research (ERC)?
How does the Framework Programme need to change to provide
incentives for industrial participation?
Should the bulk of FP funding continue to be allocated to
collaborative projects, i.e. involving organisations from different
Member States?
Links between FP and Structural Funds?
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Conclusions
• All major countries now devoting high priority to
innovation policy
• Key to our ability to compete successfully in the global
knowledge economy
• Fundamental to achieving economic and social policy
objectives
• Primary responsibility for supporting business
innovation remains at national and regional level
• EU can play important complementary role
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Thank you
Chris North
[email protected]

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