Transcript Strengthen business innovation

Innovation Policy Priorities in Chile
Drafted between September 2009 and
March 2010 by the National Innovation
Council in Chile - CNIC
(www.cnic.cl)
Eduardo Bitrán C.
Former President of Innovation Council, Academic at Adolfo Ibañez University
LIST OF TOPICS
1. What is the objective? Productivity
2. National Innovation Strategy 2007
3. Innovation and Competitiveness Agenda
(2010)
1. What is the Objective? Productivity
•PTF Growth 86-97 structural change due to
reforms
•1998-2003 Cyclical Factors and Insufficient
Micro Flexibility
•Period from 2004-2008 affected by triple
energy shock (0,5%)
•Insufficient competition in basic services.
•Effect of qualified human capital lower than in
developed countries.
•Trade barriers: "Logistical Costs of Transport
and Bureaucracy."
Growth Reduction due to Drop
in Productivity
CUADRO 2
Contribución al crecimiento anual del PIB (1986-2008)
Cifras en porcentajes
Período
PTF
Capital
Trabajo
Total
1986-1991
2,1
1,8
2,8
6,7
1992-1997
2,2
3,6
2,1
7,9
1998-2003
- 0,7
2,2
1,2
2,7
2004-2008
0,0
3,1
1,6
4,7
Difficulty in competing with an
economy based more on
knowledge, innovation and
qualified human capital
Why haven’t we been able to create an innovation
dynamic that will permit export diversification and
maintain productivity increases to achieve
development?
•PTF Growth 86-97 structural change due to
reforms
•1998-2003 Cyclical Factors and Insufficient Micro
Flexibility
•Period from 2004-2008 affected by triple energy
shock (0,5%)
•Insufficient competition in basic services.
•Effect of qualified human capital lower than in
developed countries.
2. National Innovation Strategy for
Competiveness (2007)
Chile needs to grow quickly to
achieve development by 2020
A country should grow by an average of over 5% in a decade.
Today, it does not exceed the 4% rate of potential growth
IMF: GDP per capita
IMF:GDP per capita
(Figures in dollars,
ppp. 2007)
CHILE
Singapore (29.743)
Taiwan (29.244)
Spain (27.542)
New Zealand (25.655)
Slovenia (23.159)
Korea (21.887
US (43.236)
Canada (35.779)
Hong Kong (35.396)
Finland (32.822)
Australia (32.127)
United Kingdom (31.585)
Sweden (31.264)
France (30.150)
35.000
22.000
Estonia (17.802)
Lithuania (15.443)
Argentina (14.838)
Latvia (13.875)
Malaysia (11.915)
15.000
GOAL: Achieve $22,000 GDP per capita by 2020
NATIONAL INNOVATION STRATEGY (2007)
•
•
Doing more of the same is not enough
Knowledge, development and competitiveness depend increasingly on creating a virtuous circle between
productivity, business innovation and the accumulation of physical and human capital.
INNOVATION STRATEGY
Quality Human
Capital
Business
Innovation (value
creation)
Basic science
with strategic
orientation
COMPETITIVENESS
Efficient institutionality for innovation
(Long-term vision, “accountability” in implementation)
S E L E C T I V I T Y
Focus sectors with static and latent competitive advantages
•
The National Innovation Council suggested organizing public performance around these three
pillars of innovation, and renewing institutionality to perform these tasks in a timely, harmonious
fashion.
•
•
•
Selectivity:
focus
on
clusters
Shift from static comparative Natural Resource advantages to a phase concentrating on
incorporating more knowledge into products and services (dynamic advantages).
In what direction should enchainment be developed? Towards the most attractive part
of the forest, rather than a “dead end.”
There is room for maturation and transformation on the basis of existing sectors.
Basis of Proposal
• Key to selectivity
Resolve coordination flaws and create critical mass of resources to
achieve a new equilibrium of greater value for society.
-Orient resource assignment to R&D.
-Develop specific public goods for sectors.
-Train specific human capital linked to more dynamic clusters.
-Investment in physical infrastructure linked to clusters’ needs.
-Common technological infrastructure.
-Regulation /deregulation.
•
Institutional
Challenge
The aim is to reinforce an arrangement that will make it possible to:
Ensure
coherent
policies
• Dado el carácter sistémico de la innovación.
Define
strategic
objectives
• Se requiere traer el futuro al presente,
Define
agents’
roles
• La actuación del Estado cumple un rol:
porque “el tiempo importa”.
corregir fallas del mercado (incentivos) y
de coordinación. Implica selectividad.
Assign
resources
in line with strategy
• The Council proposes consolidating a “division of labor” model by ensuring its implementation from the highest state level
by a MINISTERS' COMMISSION and by forming sub-systems of Education and Science, and Business Innovation and
Entrepreneurship under the supervision of this Council
.
• Institutional Challenge
•
Role of Innovation Council for Competitiveness
– Define a national innovation strategy with a 12-year horizon (check every 4
years)
– Define criteria for strategic priorities
– Generate dialogue and agreement regarding strategy
– Ensure continuous improvement of institutionality
– Evaluate consistency of policies with strategy
– Evaluate resource assignment according to strategic priorities
– Evaluate impact of policies and institutions in system
For which the Council requires:
- Long-term vision: beyond the horizon of a government
- Vision of innovation system
- Independence from corporate interests
- Expert members (appointed in a similar way to Central Bank) and with the minority
participation of universities, entrepreneurs and workers.
The Ministers’ Commission for Innovation and Competitiveness:
- Defines policies, instruments and priorities and approves the national strategy
- Inter-Ministerial Coordination, with Regional Governments
- Assigns responsibilities to Agencies and carries out management control
3. INNOVATION AND
COMPETITIVENESS AGENDA
(2010)
Innovation and Competitiveness Agenda
2010-2020
1. Reinforce business innovation
- Bring firms closer to the technological border
- Develop an ecosystem for business innovation
- Develop genuine innovation clusters
2. Develop human capital at all levels
3. Create basic science skills with a strategic orientation
4. Reinforce the development of the Third Mission at universities
5. Consolidate institutionality for innovation
1. Strengthen business innovation:
I. Bring firms closer to the technology frontier
The aim is to increase the dissemination of best practices
and technologies in firms: Integrated approach to develop
supply and boost demand.
• Create subsidy mechanisms that will combine support for supply and demand
for dissemination and technological outreach focusing on significant gaps in
productivity that have been identified.
• Sector- based programs that combine dissemination of best practices, work skills
and financial guarantees.
• Boost technological centers or institutes with capacity for transfer, adaptation
and broad dissemination of technology with technological antennae linked to
leading world institutions and associative participation of beneficiaries in
corporate governments.
• Establish baseline for productivity and measurement of increases in productivity
and impact of programs (World Bank Program).
Reducing intra-sector
heterogeneity and
incorporating
international best
practices would permit
a significant increase in
productivity over the
next few years
(McKinsey estimated
+ 1% PTF)
1. Strengthen business innovation:
II. Develop an ecosystem that encourages innovation
• Strengthen innovative entrepreneurship
- Improve support for business angels, seed capital and technological and/or early stage
technological risk capital.
- Develop skills and mechanisms that will encourage the emergence of
businessmen in universities; expand support for mentoring and advice and
"corporate ventures."
- Improve times for setting up and closing down firms; reduce stigma and costs of failure
and facilitate starting up business again.
• Strengthen science-business relationship
- Encourage development and attraction of technological intermediaries to promote
creation of new firms, brokers and associative transfer offices between universities.
- Implement National System of Technological Institutes and Centers (SNITec) and
promote incipient projects for scientific and technological parks.
1. Strengthen business innovation:
II. Develop an ecosystem that encourages innovation
• Strengthen development of critical mass of firms with innovation
routines.
• Expand coverage and drastically reduce deadlines for the evaluation
and delivery of subsidies to firms submitting innovation projects.
• Establish guarantee mechanisms for the acquisition of technology in
SMEs and process innovation; provide financing for intangible assets.
• Combine innovation and R&D management skills in firms through
subsidies for hiring highly specialized professionals.
• Strengthen instruments designed to promote firms’ investment in
R&D by incorporating the financing of intramural activities into the
benefits of tax holidays for hiring R&D
1. Strengthen business innovation:
III. Develop genuine innovation clusters
• Develop innovation dynamics linked to supply and demand of leading export
sectors.
• Strengthen institutionality to deal with coordination flaws in clusters with a high development potential
(Encourage road mapping with private leadership to identify coordination flaws; CMI agreement structuring,
regions, ministries, sectors for skills creation and program development ). Boost institutionality to deal with
coordination flaws in clusters
• Implement technological innovation programs in strategic sectors to go beyond the current
fragmentation of the instrumental, TEKES-style approach.
• Promote productive transformation programs associated with the demand for sophisticated goods and
services common to priority sectors.
• Attract foreign investment to key sectors focusing on areas that generate synergies and
greater capacity in SNIC
• Support development of shared scientific and technological platforms (genomic services,
mass computer services for bioinformatics and others, chemical and physical metrology).
2. Develop quality human capital
• Develop lifelong training system that will ensure access to, quality
and relevance of training system.
• Develop Qualifications Framework
• International harmonization and modularization of various training levels.
• Guarantee of quality of training supply.
• Coordination between System of Work Skills and Professional Qualification.
• Emphasis on basic and generic skills in secondary technical and professional
education.
• Increase tertiary education coverage from 45% to 60% with more
emphasis on technical-professional training and the participation of
segments with the lowest income.
• Increase grants for the three quintiles with lower incomes and credit with state
support for the four quintiles with lower incomes.
• Eliminate bias against technical-professional education in grants and credits.
3. Basic science and advanced human
capital with a strategic orientation
• Put forward from 2021 to 2017 the goal of raising public expenditure on R&D from
current rate of 0,4% to 0,7% of GDP to leverage private investment, which must
increase from 0,25% to 1,2% in 2022.
• Support top-rate research and skills production in scientific and technological areas
oriented by productive challenges, climate change and social changes. (Pertinence
criteria in Conicyt).
• Need to restructure Advanced Human Capital Grants to increase graduate training in
Chile, together with joint programs by national and foreign universities and support
reinsertion into academia and firms (coherence with system's capacity for absorption).
• Increase resources for “Mission-oriented” basic science at a higher rate than GDP
growth, focusing on :
• individual projects, especially for researchers beginning their careers
(Fondecyt for initiation + post-doctorate)
• Collaborative research, especially intermediate size groups (rings and nuclei)
with an emphasis on productive and social priorities.
• Rationalization and consolidation of centers of excellence to create critical
masses and greater strategic orientation.
4. Reinforce the development of the Third
Mission at universities
• Establish incentives for universities and their academics involving compliance with the
Third Mission, including more appropriate impact indicators (not only publication of ISI
papers).
• Boost strategic planning processes at universities to define their role in the system and
in keeping with this, develop their efforts in training and research with the proper
emphasis on the evaluation of knowledge and technology.
• Change corporate government of state universities, modify normative framework to
facilitate their efficiency and define a new financing model based on performance
agreements.
• Establish Technology Transfer Mechanisms through licensing or spin-offs (OTT).
5. Consolidate institutionality for
innovation
• Consolidate Innovation Ministers' Committee to lend coherence to the definition
of policies and their implementation, particularly in budgetary matters.
• Strengthen role of Economy Ministry in its role as CMI president.
• Consolidate an Innovation Council to provide a long-term system view, not
dominated by private interests.
• Strengthen management of the Higher Education and Science Subsystem
through an Under-Secretariat responsible for this sphere within the Ministry of
Education.
• Boost governance of Corfo and Conicyt by improving the corporate
governments of these institutions by establishing boards of directors led by the
Ministers of Economy and Education, with the participation of independent
representatives and the most important stakeholders for each agency.
In conclusion: Policy Priorities for
Innovation
•
1. Strengthen business innovation
- Bring firms closer to the technological frontier
- Develop an ecosystem for business innovation
- Develop genuine innovation clusters
•
2. Develop human capital at all levels
•
3. Create basic science skills with a strategic orientation
•
4. Reinforce development of the Third Mission at universities
•
5. Consolidate institutionality for innovation with a long-term
vision
Reassignment of resources to natural resource
sectors with entry and exit of firms
GRAFICO 2
Descomposición de la PTF en Productividad intrafirmas
Tasa neta de entrada y reasignación de factores
El grafico anterior muestra, que en el período 1980-2001 en la industria manufacturera el principal factor aportante al
crecimiento de la productividad provino del aporte de la entrada de firmas más eficientes y, por otro lado, de la salida
de las menos eficientes. En dicho período las mejoras sucesivas de productividad al interior de las firmas (plantas)
fue negativo, aunque no significativo; en tanto, las ganancias de productividad provenientes de reasignación de
factores entre firmas fueron negativas..
Net entry of medium and large firms in Natural Resource sectors in which there was a
significant potential that had not been exploited. Through DFI and capital goods imports,
it was quickly exploited, which accounts for the growth of PTF.
In the service sector, the growth of PTF in existing firms played a key role in
explaining overall PTF growth (incorporation of TIC) but the effect was quickly
reduced, probably due to the lack of competitive pressure.
Microeconomic inflexibility and the end of the benefits of
structural change partly explain the drop in PTF from 19982003 (in addition to the cycle).
In shocks such as the Asian crisis, the lower
microeconomic flexibility could explain up to 0,5% of the drop in
productivity and growth for various years
(Caballero, et al ( 2005)), Fuentes (2009))
Brasil
Colombia
Chile
México
Venezuela
Índice de Seguridad
Laboral
0,69
0,31
0,62
0,71
0,64
Índice de flexibilidad
microeconómica
0,701
0,722
0,724
0,981
0,539
Aumento de la tasa de
crecimiento (%)
GRAFICO 3
0,43
0,33
0,27
0,7
Productividad
de Factoresby
por
tipo de
Total
FactorTotal
Productivity
Type
ofplanta
Plant
0,18
Crespi (2006)
Del gráfico se puede concluir que a partir de mediados de los ’90 cae en el sector manufacturero la contribución al
aumento del PTF tanto de la salida y entrada de empresas, como la contribución del aumento de productividad de
las empresas existentes. Fuente: Crespi (2006)
Graph showing that in the late 1990s, there w
a drop in the contribution to PTF of the net en
of firms and intra-firm productivity.
Commission on Growth and
Development concluye:
que el insuficiente crecimiento
de la productividad de las
empresas existentes, el nulo
crecimiento de la
participación de mercado de las
empresas más productivas, y el
bajo emprendimiento innovador
explicarían por qué una vez
obtenidas las ganancias del
cambio estructural se habría
estancado el crecimiento
Effect of Petroleum Shock
Oil price
shock
Energy price
shock explains significant
proportion of decline in
productivity
Alvarez et al. (2008), the Central
Bank of Chile, shows that the energy
shock explains between 20% and
60% of the drop in productivity of the
Chilean manufacturing sector
between 1992-1999 and 2000-2005.
Lack of Competition and Weaknesses in Regulation of
Price range of monthly subscription to Broadband Internet
Fundamental Services
Figures to September 2008 in PPP dollars
Turkey
8.45
125.95
Sweden
10.68
43.04
Denmark
11.27
113.85
Italy
11.39
45.43
Ireland
13.37
151.49
United States
14.99
139.95
New Zealand
15.12
144.88
Slovak Republic
15.60
Finland
15.63
52.16
Belgium
16.44
68.59
France
16.70
72.74
Switzerland
17.22
45.34
Netherlands
17.36
127.27
Poland
17.70
104.79
United Kingdom
17.81
55.76
Greece
18.10
45.99
Japan
19.50
67.09
Hungary
20.08
64.35
Norway
20.53
152.68
Australia
20.59
120.25
Portugal
20.68
82.07
Austria
20.88
80.48
Luxembourg
22.72
89.95
Germany
23.02
75.15
Canada
23.57
96.30
Iceland
24.83
111.12
Spain
28.80
94.07
M exico
29.44
128.53
Czech Republic
30.65
110.42
33.97 Korea 43.03
Chile
34.69
120.08
Turkey
Sw eden
Denmark
Italy
Ireland
United States
New Zealand
Slovak
Finland
Belgium
France
Sw itzerland
Netherlands
Poland
United Kingdom
Greece
Japan
Hungary
Norw ay
Australia
Portugal
Austria
Luxembourg
Germany
Canada
Iceland
Spain
Mexico
Czech Republic
Korea
Chile
1
10
100
Industrial Electricity Price (2008)
CHILE
13
Pro-competition reforms in
Telecommunications
sector ended in
1999; dominant firm
prevented disintegration of networks
and greater competition in Internet
Services.
263.23
1000
March 2010 OECD Report
In Chile, there are rents due to
Lack of competition (compare
service margins with OECD)
Lack of competition in financial
services, health services,
electricity, concessions,
infrastructure.
Logistic cost of exports: Twice that of OECD countries
Costo Logístico como porcentaje del Valor del Producto
Singapur
8,5%
OCDE
9,0%
EE.UU.
9,5%
Chile
18,0%
México
20,0%
Colombia
23,0%
Brasil
26,0%
Argentina
27,0%
Perú
0,0%
32,0%
5,0%
10,0%
Source: Guasch and Kogan (2006).
15,0%
20,0%
25,0%
30,0%
35,0%
Source: TIC’s Logistics Project, PUCV.
Imbalanced Modal Participation: Concentration in trucks
Participación de Modos de Transporte (Ton-Km)
100%
90%
80%
70%
60%
Porcentaje
50%
88%
40%
70%
69%
30%
35%
20%
10%
0%
Chile
Nueva Zelanda
Sudáfrica
País
Carretera Ferrocarril Marítimo
Source: Compiled by the authors from various sources.
Australia
In South Africa and Australia,
distances between production plants
and ports of exit are greater, meaning
that maritime and rail transport are
more efficient, which in turn is
reflected in the greater participation of
these modes of transport, measured
in Ton-km.
Nevertheless, in New Zealand,
although the average distance from
producer to port is less than in Chile,
enormous differences can be
observed in the market share of each
mode.
Mean task input as percentiles of the 1960 task distribution
How the demand for skills has changed
Economy-wide measures of routine and non-routine
task input (US)
(Levy and Murnane)
Lower mastery of basic skills: reading
comprehension, mathematics and science
PISA and PIB test results per capita
(Reading comprehension)
PISA en Comprensión Lectora y PIB per cápita
450
ic
o
2000 2003
M
e
x
500
450
550
500
2000
2003
2000
2000
2000
2003
2000
2003
2003
2003
2000
2003
2003
2000
CHILE
2006
2000
2003
400
Puntaje
550
Points
2000
400
2000
5.000
5000
10.000
15.000
10000
Australia
Finland
Thailand
20.000
15000
20000
PIB per
cápita PPC
Canada
Korea
Latvia
New Zealand
Mexico
25.000
25000
Denmark
Sweden
Average trend
Países intensivos en recursos naturales y de rápido crecimiento
Australiagaps observed
Canada
Chile
Similar performance
in Mathematics and Science tests.
Dinamarca
Finlandia
Letonia
Tendencia
Corea
Nueva Zelanda
PIB
per capita
The Knowledge Economy Demands More
Advanced Human Capital
Ph.D. Graduates Per Year in Science and Engineering per million
inhabitants
Business Innovation
•
•
•
•
•
•
•
•
Total spending on innovation in relation to
firm size is far below international levels.
More innovation in large firms, which
incorporate advanced human capital and
protect their intellectual property.
Low and decreasing effort at innovation in
existing firms. Low innovation in new firms.
Linked to acquisition of capital goods and
cooperation with suppliers and clients.
Firms that spend more on training and
upgrading machinery significantly increase
their likelihood of innovation.
Low collaboration with universities and
institutes. Insignificant cooperation in
explaining innovation.
Firms that innovate have a large number of
Ph. Ds and engineers (processes).
Firms using public funds are less likely to
innovate.
Source: Innovation Surveys and ENIA
Empresas Innovadoras y No Innovadoras
70%
60%
67,3%
50%
40%
62,1%
37,9%
30%
32,7%
20%
10%
0%
No Innovadoras
2003-2004
Innovadoras
2005-2006
Firms’ efforts at innovation fell from
1.6% of GDP in 2004 to 1.2% in 2006,
a trend that was exacerbated in 2008
Distribución TFP en Manufactura
Structural collapse of long-term growth
Fuentes 2009, at request of CNIC
Export diversification and sophistication stagnate and growth
rate of natural resource exports falls.
CUADRO 4
Evolución de la tasa de crecimiento de exportaciones (%)
Crecimiento
promedio 1996-2000
Crecimiento
promedio 2001-2004
Crecimiento
promedio 2005-2008
11,3
5,7
-0,3
Frutícola
4,3
10,5
7,7
Silvícola
n.d.
n.d.
n.d.
Alimentos
1,0
14,0
6,3
Vinos
14,6
13,0
8,3
Forestal y muebles de madera
12,3
13,0
0,8
Salmón y Trucha
13,2
18,3
3,9
n.d.
n.d.
n.d.
Cobre
Sector primario
Sector industrial
Servicios
Fuente:
• The Herfindahl-Hirschmann Index has remained nearly constant at around 0,26; the number of exported
goods has declined. Chile’s export diversification is lower than that of Peru, Costa Rica, Uruguay,
Guatemala, Senegal and Bangladesh.
• Natural resource export sectors reduce growth rates due to supply restrictions, high participation
in global market and hyper-competitiveness (they imitate us).
• Chilean economy: productive positioning
Mining
Sectors in Chile
are peripheral.
Difficulty moving to
more sophisticated
sectors.
Mexico
Machinery and capital goods
Chile
Low
sophistication
of exports
relative to GDP
(Chile, 2005)
Wood
Sea products
Agriculture
Benefits and obstacles of university-firm link
Industrial System
Speeds up acquisition of new
knowledge
Increases capacity for
innovation
Improves innovation
networks
Enables human resources to
gain access to science and
technology
Unwillingness to innovate and
weak capacity for technological
absorption
Lack of personnel specializing in
technology
Short term horizon for
investment in innovation (low
R&D dda)
Source: OECD, 2007: OECD Reviews of Innovation Policy CHILE
Lack of specific support schemes
Lack of (effective) intermediaries
Deficient institutional, regulatory
and legal schemes
Productivity
Patenting
7 : 1 (USA-Chile)
Education and Research
System
Ensures and diversifies
financing sources
Provides elements to
prioritize research
Improves research tools
and capacities
Improves students’ job
prospects
Non-aligned incentives
Over-specialization in
research that is irrelevant to
industry
Regulatory barriers to
research mobility and
creation of spin-offs
Challenges of a Permanent Skills-based Training
System
Training Supply
Systematization and increase of
Productive Sector demand
Support supply of skills-based
training
Development of accreditation
Systematization of existing skills standards
Identification of gaps in prioritized sectors
(clusters)
Construction of model to identify future
demand for human capital
system for training supply
Permanent
training
system
National System of Work Skills
Certification
Education Supply
-Accreditation of
skills-based
programs
-Support for supply
of skills-based
programs
- Boosting and validation of standards
- Skills certification
- Establishment of Sector-based
Organizations in conjunction with
cluster Secretariats
- Production and management of
reference framework for training
supply
Elements for developing a strategy at Chilean
universities
COHERENCE
CRITICAL MASS
COLLABORATIVE GROUPS
QUALITY UNIVERSITY FOR
DEVELOPMENT
Research
• Multidisciplinary, collaborative and world-class
• Agenda linked to productive and social objectives (aligned
with innovation strategy)
• Institutional plan for improving level of researchers (PhD, postdocs, coursework, exchanges, reinsertion)
Education
• Internationally homologated, quality education
• Diverse, motivated student community
• Student exchange with world-class universities
• Graduate programs (Master’s, prof. and academic, PhD)
Transfer &
Commercialization
Organization
Setting
• Technology Commercialization Units
• PI and conflict of interests policies
• Bridges and networks with industry within institution
• Specialized professionals
• Modern, efficient, effective and adaptive management
• Financial sustainability plan
• Top-rate professionals
• Strategic project management
• Valuation of contribution to productive and social challenges
• Stakeholder management
• Management of world-class networks
(1)
(2)
(3)
(4)
Clear objectives
Action plan
Indicators
Budget
Coherent strategy between
Training and Research
and Dissemination of
Knowledge and IP
evaluation
Commercialization of World-Class Technologies: a
model for Chile
Objective
Scale
“Creation of units specializing in the commercialization of technologies, making it
possible to create and strengthen bridges between scientific knowledge and the
productive sector.
Depending on the quality and quantity of R&D, institutions should form consortiums
with other institutions.
Definition of intellectual property policy at universities and
scientific centers
Definition of policy on conflicts of interest
Critical Success
Factors
Hiring highly specialized professionals