Transcript The Knowledge Triangle

International Innovation Congress of
III Astana Economic Forum
Economy and the Knowledge Triangle
Education, Research and Innovation
Dr. Horst Soboll
Chair European Entrepreneurial Regions
Astana
July 02, 2010
HS
Europe 2020 Strategy
-
Smart growth
developing an economy based on
knowledge and innovation
- Sustainable growth
promoting a more resource efficient,
greener and more competitive
economy
- Inclusive growth
fostering a high employment
economy delivering social and
territorial cohesion
HS
Dream of Clean, Endless Energy
HS
Societal Challenges
HS
The Knowledge Triangle
Contribution to the Lisbon objectives: economic growth,
employment creation, environmental protection, societal
challenges: fight poverty, improve human health and quality of life
HS
Research Investment and Economic Performance
HS
Higher Level Education
Education - Basis for society
trained people for research and management
scientific method - beyond the limits
in depth analysis - interdisciplinary teams
Research - Knowledge for innovation
basis for new products, services, processes
knowledge transfer via agency or people
patents - licences as financial source
Third Mission - link to economy and society needs
link to grand challenges of society
regional clusters - beyond fashionable themes
HS
Creation of Ideas
The right "kind of education"
Basic education
incl. critical spirit, accept criticism
Good universities
Mental / educational revolution need to change youngsters attitude
entrepreneurial spirit (schools, society incl CEO)
corporate social responsibility, heroes
promote risk taking, avoid security above all
Set up rules that INDUCE workers to come up
with ideas and bosses to LISTEN
HS
source xavier sala-i-martin
PASTEURs QUADRANT - basic and use inspired research
HS
Culture to accept failure
HS
Innovation depending on several issues
Research
Market
Society
HS
US Congressional Record 1875
Concerns associated to innovations
”A new source of power has been developed which
burns a distillate of kerosene called gasoline. This so
called internal combustion engine begins a new era in
the history of civilization...Never in history has a
society been confronted with power so full of potential
danger. Stores of gasoline in the hands of people
interested primarily in profit would constitute a fire
and explosion hazard of the first rank. The menace to
people, and potential poisoning of the atmosphere
would call for prompt legislative action, even if the
military and economic implications were not so
overwhelming.”
Indicators for Innovativeness
Innovation system
Education as cornerstone of innovative capacity
Research & Development investment esp. in high tech sectors
Regulations Intellectual Property and legislation / registration
Financing incl. venture capital
Demand for research & development intensive goods and services
Cooperation within the knowledge triangle (education, research, innovation)
Implementation of ideas in the market via new products, processes, services
Innovation Climate / Environment
Interest in science and new technologies
Positive attitude towards new technologies
Openess to change - risk behaviour
HS
HS
Innovation policy
What is it not ?
- just R&D subsidies
- industrial policies, bureaucratic plans
- white papers
- promotion of clusters / technology parks
What is it ?
- generation of an environment conducive to
the creation of ideas
- implementaion into real products,
processes and services
source xavier sala-i-martin
HS
The Innovation Process in Europe
from a linear model in the past towards a network between stakeholders
HS
European Innovation Partnership s (EIP)
to address Grand Societal Challenges
Innovation
Solutions
For
Grand Societal
Challenges
Research
Society
HS
Education
Innovation Policy
new ideas have to be implemented
- infrastructures (efficiency)
- institutional quality
trust in law and order, tax system,
policy certainty, crime etc.
- regulation barriers ( bureaucracy)
competition in labor markets
financial markets
source xavier sala-i-martin
HS
Beware of investing in things that can move
Innovative economy
develops in certain
territories.
It’s main resources are
mobile and fluid …
but they don’t move
randomly …
they tend to agglomerate
themselves.
Source: D. Foray
HS
Various types of support schemes
Firms
decide
Tax
Incentives
Loan/
Equity
schemes
Open
project grants
Technology-specific
project grants
Government
procurement
source Georg Licht ZEW
HS
Government
decide
A Simple Cost-Benefit Approach to
Public Support of Private R&D Activity
Present value of the benefits of subsidizing private R&D:
B0   s  m  1     P  
1
P
d  r   
Macroeconomic costs of subsidizing private R&D:
   m  1  1     P
K 0  1  tx   1  cs   P  cu  m  P 
d  r   
P = program size; m= multiplier; s = social benefits;
d = depreciation rate; r = time preference rate (“interest rate”); π = risk premium;
cs = public administrative costs; cu = administrative costs of the firm;
tx = macroeconomic costs of tax financing;
λ = wage elasticity of labor; β = return to the alternative investment
HS
source Georg Licht ZEW
Project-based versus Tax Based
R&D Incentives
Lower allocative distortions than other types of support:
Tax incentives entail less interference in the marketplace, and thus allow privatesector decision makers to retain autonomy
Lower administrative costs to government and firms: Tax incentives require less
paperwork and entail fewer layers of bureaucracy
Tax incentives avoid the need to set nebulous and detailed requirements for
receiving assistance (project proposals)
Firms perspective:
More predictable and more stable than support schemes which require periodic
appropriations and can be changed by the government more easily
Lower obstacles for participation especially for SMEs and firms without
experience in project-based R&D support systems
Governments perspective:
The budget costs of a tax incentives system are hard to predict
Low R&D multiplier effects on R&D investment due to relabelling of R&D?
HS
source Georg Licht ZEW
Economic Growth
using the Knowledge Triangle
( Education, Research and Innovation )
Strengthen the complete knowledge triangle
( education, research, innovation )
increase resources / visibility / cooperation / link to society
Generate critical mass for specific missions / societal challenges
example EUs Strategic Energy Technology Plan ( SET Plan )
Strengthen cooperation in R & D between academia and business
via "open innovation" and networks / partnerships
Reduce innovation barriers along the complete innovation chain
in standards and regulations or financial rules - more trust based and risk-tolerant or the demand side via more innovative solutions in public procurement
Adapt mind-set and society acceptance towards innovation
education for increased openess and more risk mentality / entrepreneurship
HS
" Yes, we can "
Nothing great has ever been achieved
without
someone dreaming …
that it should be so,
someone believing …
that it could be so, and
someone being convinced …
that it must be so!
Charles F. Kettering (1878-1958)
US automotive engineer
HS