The influence of innovativeness on education and development of academic youth on the labor market in the European Union

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1 The influence of innovativeness on education and development of academic youth on the labor market in the European Union Wiesław Breński University of Warmia and Mazury in Olsztyn, Poland Abstract Science and education are the most important industry in the 21st century in the context of future. Numerous employees are hired in education. It has, first of all, an enormous impact on staff quality which steps into enterprises and, simultaneously, becomes their part. Performing the work, de facto they decide on the pace of the development of our country. In the context of Poland, changes in the system of education occur slower than we would expect from Ministries. The government focuses on the program of higher education development realized within the Strategy of Country Development and development strategies, however, we may hope that the worked out solutions will contribute to overcome developmental barriers in such a way that Poland would be able to generate civilization progress into development of strong economy based on knowledge, technological potential and innovative activity [Fudali, (2013), p. 87]. [Wiesław Breński, The influence of innovativeness on education and development of academic youth on the labor market in the European Union. E. R J. 2015;3(38-46)]. (ISSN: ). Keywords: innovativeness, academic youth, The European Union, local policy, structural funds, scientific research, education Introduction The influence of innovativeness onto education and development of academic youth on labor market occurs according to the worked out scheme. Innovativeness is implemented via evaluation of chances and opportunities to reach a technological success. Better identification of aroused threats may be a main preventive instrument in a longer time. Preventing from threats demands institutional collecting information, watchfulness and providing information concerning arousing threats. Therefore, there is a necessity to separate actions within analysis and risk evaluation from risk management. The opportunity to monitor means availability to control all the situations concerning the subject endeavor. Experience proves that internal market functioning may be threatened if monitoring that market is not possible. Thus, it is necessary to establish a holistic monitoring system in order to provide directed and detailed rejection from the market or to inform clients or clerks responsible for the control and avoid, as a result of it, potential unnecessary disturbances [Comp. Oleszko, (2006), p. 128]. Contemporary organizational structures are very different and they constantly evolve. The character of relations linking their elements as well as the logics of internal division of roles, functions and tasks change. However, particular structures are always an attempt to solve a basic problem, namely finding right proportions between stability and flexibility, frequency of actions and their change, routine and innovativeness [Koźmiński, (ed.), (1998), p. 55]. Working out a concept of development and growth is of basic importance in a long-term strategy of action. The notions of growth and development are very other treated as synonyms. However, it seems that they should be separated. Growth is only a category of quantity and development concerns also quality changes. A company s growth usually expresses in stable increase of one or more measureable features. For example, they may be: turnover value, added value. Fixed assets, number of employees, amount of own capital, profit amount, etc. It is significant that the numbers would prove long term plus changes. A turnover value is a measure used most often because an enterprise may be easily compared to other ones on the market. However, none of the measures may be considered universal. For instance, in the sector of high-tech, assets and employment increase faster that turnover. Moreover, turnover value is sensitive to inflation phenomena and exchange rate changes. Employment depends on technology work equipment that grown fast causing substituting human work to machines. Asset value is sensitive 47

2 to changes and their values in time. Thus, more measure should be used simultaneously to measure and evaluate the growth [Koźmiński, (ed.), (1998), p. 24]. Local policy and structural funds Local policy and opportunity to use structural funds aim at strengthening competitiveness in particular regions. Strengthening attractiveness of regions, improvement of infrastructure and providing possibilities to develop human resources as well as social and economic cohesion also play an important role. Frame programs are a significant instruments aiming at supporting economic and social development via an international scientific cooperation. They consist of several dozen of programs with different schemes and instruments. On December 31 st, 2013 the 7 th Frame Program of Research and Development of the European Union (7.PR) finished which lasted in from 2007 till The program is a result of long consultations with scientific society, institutions creating politics and research centers as well as other interested entities. It is a basic instrument; what is more, it is subject to realization of strategic objectives of the Lisbon Strategy that were indicated to Lisbon by the European Council in March Considering challenges standing before Europe, 7.PR overwhelmed: 1) Supporting over-national cooperation in all areas of research and technological development, 2) Increasing dynamics, creativity and perfection of the European scientific research in pioneer scientific branches, 3) Strengthening human potential within research and technology via providing better education and trainings, easier access to potential and research infrastructure, growth of respect for the profession of a scientist and enhancing researchers to mobility and development of their scientific career, 4) Intensification of a dialogue between the world of science and society in Europe in order to increase social trust to science, 5) Supporting scientists beginning their career, 6) Supporting a wide use of results and dissemination of knowledge gained as a result of research activity financed by public funds. The Frame Program includes four detailed programs: 1. The Cooperation Program supporting cooperation between academic environment and industry in order to reach a position of a leader in key areas of technology, 2. The Ideas Program supporting basic research in pioneer areas of science (implemented by the European Council for Scientific Research), 3. The Human Program supporting mobility and development of scientists career in Europe and outside it, 4. The Opportunity Program research infrastructures: supporting development of opportunities necessary in Europe to reach a high level of economy development based on knowledge [Waltoś, Rozmus, (ed.), (2012), p. 100 and next]. Actions realized within the National System of Academic Enterprising still play a significant role, aiming at creation of consortium of institutions and projects stimulating development of enterprising in Poland. The net consists of universities, RESEARCH AND DEVELOPMENT units, technology parks and incubators engaged into actions within RESEARCH AND DEVELOPMENT and innovations. PARP supports the system via coorganizing events, publications, analysis and reports on actions performed by the national institutions within supporting innovations, maintaining binds with the EU s institutions within supporting innovations, supporting realization of the Local Strategy of Innovations as well as promoting innovative technology solutions via coorganizing events cumulating entrepreneurs that act in the sector of new technologies. Entities from the sector of higher education may apply for funds up to 15,000 zlotys to create an academic incubator including the costs of registration, purchasing equipment and development of promotional and training materials. The activity aims at undertaking steps in order to solve the problem of high unemployment among university graduates, lack of knowledge within enterprising and practical trainings and experiences of an average student as well as complicated procedures and high costs to start an economic activity [The OECD review, (20120, p. 190]. The actions of the Strategy Europe 2020 should be also highlighted which aims at improvement of the EU s economy improvement. The flag project The Union of innovation is the most important here, namely completing the process of creating the European Research Sphere including increasing free flow of scientific employees in Europe. It overwhelms implementation of the EU s patent and increasing investments concerning infrastructure development and developing research up to The other projects promoting the discussed direction of the European economic development will be actions increasing skills on the labor market strengthening education systems and providing bigger students mobility in the European Union [Grosse, Hardt, (2010), p. 108]. Funds for research budget deficit vs. intellectual potential The research and development sphere in Poland faces three main problems: lack of funds for development, too high level of financing science from the state budget and functioning out-of-date organizational structure of the sphere. 48

3 The scientific and technology policy of the state realizes the financing model RESEARCH AND DEVELOPMENT adversely to the observed world tendency. The funds for research have been indeed frozen since the beginning of the past decade (a little growth was noticed in mid-90 s), a low amount of funds was spent on cheap basic research since financing expensive industrial research has become unreal. As a consequence, employment in the institutions called for industrial research (so called research and development units) was reduced since they remained outside industry, focusing research employees and research at universities and the regulation of the division of the state budget funds were in hands of scientists via their representation in the Committee of Scientific Research. While privatizing large enterprises on the way of selling them to foreign investors, including the old research and development unitsinto the corporation network of new owners were not considered, who would provide own background located abroad but they are not interested in using local sources of innovations[nalepka, Ujwara-Gil, (2010), p. 217]. Harmonization of the educational systems in the innovative policy Nowadays, the EU s law does not presume harmonization of national educational systems, the EU s actions aim at development of the European education (TEU,art. 149, par. 2). Therefore, it may be adopted that the aim of the EU s educational policy is favoring students and teachers mobility via enhancing to academic respecting diplomas and study courses as well as promoting cooperation between educational institutions and exchange of information and mutual experiences. The Council of Europe may use different measures in that matter but excluding any harmonization of legislative and executive regulations (TEU, art. 149, p.4) [Wach, (2007), p. 31].In the Polish innovative policy, there is a bigger pressure on local aspects of development thanks to working out local strategies of innovation and using instruments based on the place of location. The strategy of local development for the years that has been already realized has shown the opportunity to focus on promoting innovation via a special program worth 9.7 billion Euros, out of which 8.7 billion Euros came from ERDF and 1.4 billion from national sources. Therefore, the share of the EU s funds in financing the program was 85% then. Additionally, the Ministry of Local Development recommended regions would devote 40% of their expenditures (within local operational programs LOP) to the objectives connected with innovativeness and support for entrepreneurs. 3,629 million Euros have been allocated in special projects connected within the research and development sphere and enterprises development so far in the sector programs which constituted a little more than 7% of the total funds (MRD, 2007). Most actions supporting the innovations in Poland were new initiatives, mostly financed from the European structural funds. A vast majority of entrepreneurs, while asked about an opinion within the research done not so long ago by the Ministry of Local Development, claim that the EU s funds significantly contributed, in a short period, and are still contributing to the innovative potential development in their enterprises. The result remains in accordance with the results of other evaluations of the structural funds impact on a company s competitiveness: via improvement of product quality, widening offer and implementing new products also limiting dependence on foreign suppliers. A visible progress in improvement of results concerning innovations may not be expected soon because the mentioned measures were set up relatively not long ago [OECD Territorial Reviews, (2009), p. 135]. Higher education in the spirit of innovativeness The academic didactics is connected with a reflection over teaching at universities both vocational ones (providing BA degree) and at universities and academies of academic status. The aim of higher education is doing scientific research and teaching at BA and MA degree studies [Sajdak, (2013), p. 13]. The position of the Polish universities in the world and Europe is ashamedly low. Therefore, the Polish universities must perform an educational reform aiming at radical growth of quality and improvement of management quality at universities. Public and non-public universities must include themselves into the realization of arrangements of the Process of Bologna as soon as possible and implement all recommendations of the European Union that guarantee them decreasing a distance the first 50 positions of the best European universities and the first 100 positions in the world. The expected necessary changes in a university functioning must be of an evolution character and be performed as soon as the international competition demands it on the integrating, European open market of educational, research and advisory services. Revolutionary transformations have not met with support. Professors were for evolutionary and fast transformations [Stabryła, Woźniak, (ed.), (2012), p. 57]. Many students also decide on leaving for abroad in order to increase their skills. The general rule says that if one wants to use a document confirming education in other countries than the country of submitting it, it should be undertaken a procedure of recognition pursuant to the regulations binding in a given state. However, it should be highlighted that each EU s Member State has own regulations concerning education recognition. 49

4 Common solutions on the EU s level only concern recognizing professional skills to the jobs in the regulated occupations. It should be separated to recognize education for academic and professional aims. One of the centers of the National Academic Recognition Information Centers (NARIC) is responsible for their realization in particular EU s countries. While recognizing education for professional aims, there should be regulated occupation distinguished from those not regulated ones. In case of the regulated occupations, there are proper EU s directives, and, in case of not regulated professions, skills are recognized by an employer [Wach, (2007), p. 31]. Professional activity among men and women Who are the programs of innovativeness development really directed to and is professional activity of both sexes of any importance? As market observations show, unfortunately it is. And this is professional activity that is one of many determinants of professional development and improvement, also those based on innovative solutions. Generally speaking the professional activity in Poland is very low. Low level of education and finishing education on a general level do not favor for it. However, general education in most cases is not a final one. Young persons with secondary school education, usually continue it at high school and at universities afterwards. Regardless education, women are professionally less active. However, they are almost equal to men if they have higher education, especially vocational one. It suggests that there is hardly any substituting professional activity by housekeeping (including care-parental activity) in that educational group, The lower level of education, the bigger difference in activity between men and women. We may observe the connection between the level of education and remuneration (the higher level of education, the higher remuneration but an average annual bonus for a year of education is 7%). Since alternative costs of employment are relatively independent from education, the relation between those two amounts (benefits to costs) clearly does not favor to employment of those women with lower education. Decreasing their activity is very clear. Each further, lower level of education is connected with decreasing professional activity among women for at least 7 percentage points, and the changeable indicator makes 30%. In case of men, the difference in activity with different level of education also occurs but they are smaller ones, the changeable indicator reaches 20%. Lower activity means mainly men with general education (within 50%) while all the others prove high and relatively little various activity (within 77-90%) [Kotowska, Sztaderska, Wóycicka, (2007), p. 141]. The analysis of the status on a labor market according to professional groups proves that women with relatively high education have the biggest chance to preserve occupational activity. The occupational groups of specialists demands most often having higher education and these are women working as specialists are mostly active on the labor market. The least active ones are women with the following occupations: industrial workers and workers of personal services. The most active men also come from the occupational group of specialists but the less active ones are technicians and those of so called medium personnel. Having a profession demanding relatively lowest skills causes a significant loss of women s activity. For men s activity, the indicator remains less important [Kotowska, Sztaderska, Wóycicka, (2007), p. 143]. Risk evaluation of innovative projects Risk evaluation should begin with the first phase of venture, i.e. on the phase of planning. However, in practice, it does not mean that on that level, it will be possible to list all the risks that occur on the phase of realization. The methodology of innovative project realization should consider changeability of a project in each phase of realization although presuming those changes should be presumed in the earliest phase. That moment is also proper to settle budget with the consideration of potential changes and unpredicted expenditures. The range of risk evaluation is very wide. Determining the risk range should also include those responsible for the project who would quickly response changes in environment influencing an innovative project. Finally, the range of risk evaluation also means ability of organization of project management actions. Main use of technology in financial risk management is risk evaluation and communication. Technology helps in quantity risk evaluation as much as it is identified. Then, the information on risk is transferred to decisive persons. Technology consists of such systems as analysis of endangered value or analysis of credit portfolio. There are such notions as financial engineering and interactive reports generated in an electronic form based on everyday information for management [Report prepared by the Office of Government Commerce, (2007), p. 142]. The process of complex risk management means a process different from a risk evaluation. It means evaluation of searching alternative solutions in the agreement with the interested sides but with preserving unanimous principles of policy referring to production safety. Technology is a critical element in financial risk management for many institutions. In organizations not strictly connected 50

5 with financial market, the technology does not play such a significant role. Informing about risk means interactive exchange of information and opinions during the process of risk analysis concerning threats and risk, factors connected with risk and respecting risk between those evaluating risk, managing risk, consumers, other enterprises, scientific environment and other interested sides considering explanation of motions of risk evaluation and causes of decisions concerning risk management [Comp. Oleszko, (2006), p. 128]. To sum up, it is important to clearly distinguish undertaking risk from risk management. In companies, there are always those who undertake strategic and/or tactic risk. CEO and other members of the highest executive level undertake strategic risk because they determine a company s strategy which is always connected with any risk. The strategy is transferred to those who would implement the strategy and, that is why, they would undertake a tactical risk: tradesmen, managers and those responsible for the structure and assets. Each project must have an objective that may be measured, which may have time frames and a particular person responsible for its realization. The objective may be measure if it is considered in a quantity or yes/no category. The condition of time frames is fulfilled when all the elements of a venture shall be included. Responsibility for a venture success lay on the side of a person who manages it [Comp. Ward, (1997), p. 85]. While considering the innovativeness in education, we should follow the example of the states which prove successes in that matter. The European Union has never kept in secret their skills of changes observation that occur on the world markets. Implementing the already tested examples in particular member states may become a success of the whole EU as an organization, however on condition of real evaluation of widely comprehended opportunities. Japan, the USA and the South Korea as role models the EU s practices Japan is usually mentioned near the USA in the EU s documents as a referring point for our delay in the area of innovation and competitiveness. Among such a state of affairs, there are often high expenditures on research and development in that country mentioned, and rarely systems of innovation support and entrepreneurship. Other Asian countries are more seldom mentioned, that are competitive in some areas and in other ones, they cooperate with Japan. Meanwhile, Asian countries have been building an effective infrastructure of entrepreneurship support, transfer of technology and innovation, as well as they develop dynamically entrepreneurship incubators whose main aim is to support innovative enterprises cooperating with universities and research institutions. They are in a high rank which is expressed among others in the fact that associations of incubators are strongly supported by states with distinguished representatives of science on the head. In Japan, the President of the Association of New Organizations of Business Incubation is Dr. Leo Esaki, the Noble Prize winner in the area of physics in There has also been the Asian Association of business Incubation since Its members are associations and organizations from China, the South Korea, Japan, Hong Kong, Malesia, New Zealand, Singapore and Taiwan. The Korean Association of Business Incubation KOBIA in the South Korea is an example of a national and local network dynamically acting, creating innovative environment for scientific, industrial and administrative partnership, cooperating with the Administration of Small Business on a national and local level. In the South Korea, the incubators of innovation and entrepreneurship are an instrument of technological transfer and development of academic development. Since 1994, the government has been actively supporting them via the Ansan Business Incubator Centre. An intensive development of incubators has been noticed since 1997 when it was supervised by the Administration of Small and Medium Business. The main aim of those actions is strengthening connections and cooperation of industry with universities and research institutions. The Asian countries have been attaching importance to Incubators of Innovation and Entrepreneurship for several years. Nowadays, there are nearly 2,000 Incubators of Innovation and Entrepreneurship in that region. The incubators in Asia are destined to innovative and technological companies that strictly cooperate with universities and scientific and research institutions using much financial and organizational support from the state and local authorities. National associations and the Asian Association of Business Incubation have been playing a significant role in improvement of the actions of the Innovation and Entrepreneurship Incubators. The South Korea has created the Local System of Innovation for Entrepreneurship Incubators which is worth recommending, where main tasks are realized by the local Administration of Small and Medium Business as well as local department of the Korean Association of business Incubation [Guliński, Zasiadły, (2005), pp ]. Summary To sum up, despite so many pro-developmental actions within innovation, there may be also several threats for further development of innovative ventures. 51

6 The main threats for innovation development in Poland include: pressure on technical infrastructure at the cost of services supporting entrepreneurship and technology transfer which threats transformation into parks and business zone which look nice ; lack of potential entrepreneurs, projects to commercialization and innovative business ideas; lack of restructuration of RESEARCH AND DEVELOPMENT sector and closing scientific environment to dynamic business actions and entrepreneurship; problems with local and regional partnership, troubles with securing local participation and selection of attractive location; hasty working out concepts in order to receive funds without full analysis of real needs and possibilities of functioning of adapter objects. Corresponding Author: Wiesław Breński University of Warmia and Mazury in Olsztyn, POLAND. brenski@op.pl References 1. Fudali A., Innowacje przyszłością rozwoju gospodarki, Nowe Wydawnictwo IVG, Szczecin Grosse T.G., Hardt Ł., Sektorowa czy zintegrowana, czyli o optymalnej strategii rozwoju polskiej wsi, Proeconomia Fundacja Ewaluacji i Badań Ekonomicznych, Warszawa Guliński J, Zasiadły K., Innowacyjna przedsiębiorczość akademicka światowe doświadczenia, Polska Agencja Rozwoju Przedsiębiorczości, Nalepka A., Ujwara-Gil A., Organizacje komercyjne i niekomercyjne wobec wzmożonej konkurencji oraz wzrastających wymagań konsumentów, Wydawnictwo Wyższej Szkoły Biznesu, Nowy Sącz OECD Territorial Reviews: Poland 2008: (Polish version), Organisation for Economic Cooperation and Development, OECD Publishing, Paryż Oleszko A., Prawo żywnościowe wspólnotowego rynku rolnego, kantor Wydawniczy ZAKAMYCZE, Kraków Sajdak A., Paradygmaty kształcenia studentów i wspierania rozwoju nauczycieli akademickich: Teoretyczne podstawy dydaktyki akademickiej, Oficyna Wydawnicza Impuls, Kraków Stabryła A., Woźniak K. (red.), Determinanty potencjału i rozwoju organizacji, Wydawnictwo Mfiles, Kraków Wach K., Europejski rynek pracy. Ekonomiczne aspekty funkcjonowania Unii Europejskiej, Wolters Kluwer Polska, Warszawa Waltoś S., Rozmus A. (red.), Kariera naukowa w Polsce. Warunki prawne, społeczne i ekonomiczne, Wolters Kluwer Polska, Warszawa Ward M., 50 najważniejszych problemów zarządzania, Wydawnictwo Profesjonalnej Szkoły Biznesu, Kraków Zarządzanie ryzykiem: przewodnik dla praktyków, Raport przygotowany przez Office of Government Commerce, Crown Kotowska I.E., Sztaderska U., Wóycicka I., Aktywność zawodowa i edukacyjna a obowiązki rodzinne w Polsce w świetle badań empirycznych, Instytut Badań nad Gospodarką Rynkową, Warszawa Koźmiński A. (red.), Zarządzanie teoria i praktyka, Wydawnictwo Naukowe PWN, Warszawa Małe i średnie przedsiębiorstwa oraz polityka przedsiębiorczości w Polsce. Przegląd OECD. Polska, Organizacja Współpracy Gospodarczej i Rozwoju we współpracy z Ministerstwem Gospodarki, Warszawa