Innovation Governance in Ireland: the problem of coherence in a newly emerging NIS

Rachel Hilliard CISC Seminar11 November 2004

MONIT Project Background

• 1995 - 2001 OECD project onNational Innovation Systems

• redirecting innovation policy interactive model

• Is it feasible that national governments and their policy making modes can remain largely the same?

Project Methodology

• 15 partner countries – cross comparison• Innovation policy governance• Case study policy areas:

Info Society; regional; environmental

learn from efforts to develop national capabilities for innovation policy governance.

Innovation Policy Governance

1. STI performance

2. Policy challenges

3. Position of STI policy

4. National capabilties for innovation governance

Irish STI Performance

Picture 1: IRL

-3

-2

-1

0

1

2

3A1 INNO-EXP

A2 PATENTS

A4 EMPLOYM. IN MT/HT MANUF.

A5 EMPLOYM. IN HT SERV.

A6 INWARD FDI STOCK

BERD

A7 DIRECT GOV. FUNDING OF BUS. R&D

B1 S&E GRAD. (20-29)

PhDS/10.000 INH.

B2 PUBLICATIONS/MILLION

B3 BASIS RESEARCHB4 SHARE RES. POL IN OVERALL BUDGETC1 BUSINESS FINANCED R&D AT HEI

C2 BUSINESS FINANCED R&D AT GOV.

C4 SHARE OF CO-OP INNOVATORS

D1 TERTIARY EDUC. (25-64)

D2 PARTCIPATION LLL

D3 KNOWLEDGE INVESTMENTS

DX VENTURE CAPITAL

F1m % INNOV. FIRMS MAN.

F1s % INNOV. FIRMS SER.

F2 LABOUR PROD. (HOUR WORKED)

F3 AAG VA IN MT&HT / GDP

IRL Mean

STI Profile

Strong• Employment in med/high tech manuf./services, inward

FDI, S&E graduates, share innovative firms in services and manuf., labour productivity; value added

Weak Patents, BERD, government funding of bus. R&D, publications, basic research, share of R&D in overall budget, business funded R&D at labs and HEI, tertiary education, participation in life long learning, knowledge investments,Profile: Strong company system, good overall performance, weak on knowledge system

Historical Context

1990 largest per capita national debt in the worldunemployment and emigration; stagnation

late industrialiser stimulate the development of an NIS

1990s unprecedented growth, convergence

1993 GNP/capita = 74% of EU average2000 GNP/capita = 97% of EU average

Problems of Convergence

2000 4th in WEF Growth Competitiveness Rankings

2003 30th in Growth Competitiveness Rankings

2000 40% of trade = research intensive

RTI generated abroad technology taker

Technology Balance of Payments (as percentage of GDP), 2001

-0.8 -0.6 -0.4 -0.2 0 0.2 0.4 0.6 0.8

-8.15

United KingdomSwitzerland

Denmark (1999)United States

Japan (2000)Finland

Austria (2000)

Italy

Spain (2000)

Poland (2000)

Australia (2000)

Korea (1999)

Ireland

Profile of Industry and Innovation330 firms research performers

300-400 firms minimum capability

4000 firms low technology SMEs

BERD: 73% of EU and 57% of OECD average

100 firms account for 80% of total R&D spend by business

Continuous R&D performers:

20% of MNCs 10% of indigenous

Policy Challenges

persistent challenges since 1982• competitiveness of indigenous industry• embed MNC industry

sharpened focus

develop a knowledge driven economy• R&D based MNC activity• high tech clustered indigenous industry

Challenges STI Policy

capacity of research institutions to conduct relevant research

attractiveness to mobile MNC R&D

research capacity of Irish firms

pool of high-quality, technical graduates

Policy Mix: National Development Plan 2000-2006

RTDI & Education €698m 28%

RTDI Infrastructure €777m 32%

RTDI & Industry €484m 20%

RTDI networks €267m 11%

RTDI & Natural Resources €227m 8%

RTDI & Environment € 32m 1%

€2471m

Is there coherence in the Irish NIS?

1996 White Paper proposed STIcoordination mechanisms

2002 Commission to examine develop proposals for innovation policy coordination mechanisms

2000- Largest investment in STI in history2006 of the state lacks coordination

1996 White Paper on Science and Technology

need for (i) strong elements in NIS(ii) interactions between elements

Cabinet committee to consider STI supra-departmental STI budget junior minister linking two key departments

proposals never implemented

no common commitment to STI investment culture of departmental autonomy too strong

2002 ICSTI Commission on Policy Framework

• Report under review by Government• Findings unpublished

chief scientific advisor independent of any department

cabinet committee to set priorities

disagreement about location/’control’ 2004 proposals finally implemented

Ireland’s €1.3b STI Investment

PRTLI• Education & Science

• funding of universities’ own research strategies

• collaboration between universities

• infrastructure-focus

SFI• Enterprise Trade &

Employment

• funding of excellent research

in nationally strategic areas

• collaboration with industry

• research based

Implications

• initiated as 2 unconnected policiesPRTLI private donor aiding 3rd levelSFI strategic identification of ICT/BioT

• timing infrastructure decisions preceded research teams awards

• differing budget commitmentsSFI maintained budget when PRTLI ‘paused’

Why does the Irish system lack coherence?

• maturity?

• political culture?

• commitment to the innovation agenda?

Maturity

newly evolving NIS first STI policy – 1996

first significant investments in 2000

STI for 2000-2006 €2.5b

STI for 1994-1999 €0.5b

Political Culture?

‘everyone in Ireland believes in coordination, but nobody wants to be coordinated’

• Department of Finance - strong formal/actual control

• Departmental Autonomy

• Limited use of cross-cutting approach to policy only in response to high-profile priorities (crisis?)

eg: infrastructure; drugs

Commitment?

• Narrow commitment to the innovation agenda:

Enterprise Trade and Employment Ministry= the innovation champion

logic of NIS approach has limited acceptance

failure to persuade wider polity of (i) priority; (ii) potential gains; (iii) costs of

failure

Any evidence of good coordination?

• Around specific external/common issues

Bottom-up work on STI framework conditions:

contracts; IP terms; researcher career paths

implications of the Lisbon Agenda

European Research Area

• 2004 1. Chief Scientific Advisor

2. Knowledge Society Foresight

Conclusions

• Administrative culture

• Political imperative for innovation agenda

• Late industrialiser – emerging NIS

• Future developments?