INTERNATIONALISATION OF NATIONAL INNOVATION AGENCIES

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1 TAFTIE TASK FORCE ON INTERNATIONALISATION INTERNATIONALISATION OF NATIONAL INNOVATION AGENCIES SEIZING GLOBAL OPPORTUNITIES Executive summary... 3 Introduction... 5 Taftie task force on internationalisation... 5 Innovation policy in a globalising context... 5 State of play in international collaboration strategies... 7 EU Commission is pushing collaboration with 3rd countries... 9 Challenges and opportunities of globalisation Why a global perspective is crucial for innovation agencies value of internationalisation of agencies for its partners Overview and current situation for TAFTIE member agencies Current internationalisation efforts in TAFTIE agencies Strategic efforts for internationalisation are growing Diversity in drivers for activities outside Europe Diversity in focus for activities outside Europe Similarities in geographic interest Some examples of international programs of innovartion agencies Conclusions Considerable potential but weak policy Development through learning and doing Potential for policy learning and exchange of best practices Potential for joint approaches The EU Communication on International S&T Cooperation Appendix 1 - Respondents of the survey among TAFIE members and their missions Appendix 2 - Survey on TAFTIE Member agencies international activities Appendix 3 Compliation of survey results... 31

2 PREFACE TAFTIE is the European Association of leading national innovation agencies. Its members make a major contribution to strengthening Europe s economic performance by supporting product-, process- and services innovation by implementing their countries national and -many times- international research, development and innovation Programmes. At its Meeting in December 2008, the TAFTIE Board decided upon the creation of a Task Force on Internationalisation. The Task Force, which was chaired by VINNOVA (Sylvia Schwaag Serger and Staffan Håkansson), had three meetings during the course of 2009 and drafted this report which was approved at the Board Meeting in December

3 INTERNATIONALISATION OF NATIONAL INNOVATION AGENCIES SEIZING GLOBAL OPPORTUNITIES EXECUTIVE SUMMARY The changing global and innovation landscape means that new knowledge and innovation hubs are emerging in countries outside Europe, such as China, India and Brazil. These developments present considerable opportunities but also challenges for firms, universities and research institutes and for the national innovation systems in Europe as a whole. Accessing these emerging markets puts large demands on firms resources, competencies, their ability to establish strategic partnerships, and their ability to service new users outside their traditional home markets. This report shows that there is considerable potential for innovation agencies to create added value for their partners (firms, universities and research institutes) in their internationalisation efforts, and that innovation policy plays an important role in ensuring and promoting a set up which facilitates internationalisation to the benefit of national competitiveness and prosperity. However, for several reasons, this potential has so far not been fully realized. The first reason for this is that most countries do not have national policies or strategies for international RTDI (Research, Technology Development and Innovation) cooperation. This implies that demands directed at the innovation agency from its commissioning body (a ministry or other) are often unclear, ad hoc and sometimes somewhat conflicting. The second reason is that while the internationalisation of science, technology and innovation is clearly becoming an important driver of competitiveness and growth, the question of how to promote the internationalisation is a relatively new field, and policies are still evolving. Many agencies are experimenting with various instruments for strengthening internationalisation in a way that benefits national innovation systems. A third explanation lies in the challenge of creating value-added and policy complementarity between regional, national and supranational governance levels. Finally, international activities, both at national and European level, are often performed in an ad hoc manner without apparent coordination and clear objectives and this seems to be the case both at agency and national level. This inhibits feedback from experiences, evaluation and development of knowledge and competence. Globalisation is likely to accelerate when the current economic crisis abates. To be able to better fulfil their national mission, there is cause for innovation agencies to increase focus on opportunities for creating added value for their partners in their internationalisation efforts. This may well be one of the most important areas for development for innovation agencies. Innovation agencies have strong assets, both in terms of competence, resources, linkages with innovation partners and the ability to sustain efforts over time. Therefore, there are good prospects for innovation agencies to focus their operative internal organisation for international cooperation on learning and development of knowledge and competence. The Task Force discussions have concluded that the following types of agency efforts have strong potential to provide value added to the partners or clients of innovation agencies: 3

4 Presence abroad. Factors specifically contributing to making innovation agencies suitable for this role are their financial resources, the ability to sustain efforts over time, the capability of acting as home base as well as their readiness to make available the established platform to their partners. Furthermore, their government status serves as a valuable dooropener particular in emerging economies. Delegation visits (including thematic seminars and workshops). The neutral position of innovation agencies as official country representative without commercial or academic self interests makes agencies well suited as a door opener and organiser. Matchmaking betweens SMEs. A neutral position and organisational capability contribute to making innovation agencies appropriate for this role. Bilateral or multilateral research and innovation programmes. Offices abroad, networks of contacts to sister organisations in other countries, financial strength and organisational endurance over time, combined with the ability and competence to ensure complementarity and integration with national programs are assets for innovation agencies. Strategic information activities. The capability of systems overview, ability to perform studies and analyses, capability of organising seminars etc. form a basis for innovation agencies in this type of activities. Other initiatives aimed at strengthening firms ability to operate in a global context (strengthening internationalisation competencies, providing support in the management of intellectual property, etc). In addition, the Task Force has identified a strong demand and potential for policy learning and exchange of best practices on the issues of internationalisation, research and innovation cooperation outside Europe. This is true in particular for the area of innovation. The survey carried out as part of the work of the Task Force and the discussions in the meetings have also made clear that there is an interest and potential for identifying joint approaches, activities, programs with third countries among TAFTIE members. Specifically ideas for joint activities were put forward concerning: Cross-utilizing TAFTIE members foreign offices Staff training Joint project generation Network sharing Joint monitoring or benchmarking (by either undertaking or commissioning relevant, targeted analyses) Mapping existing collaborations of TAFTIE agencies with third countries Organizing TAFTIE meetings in third countries Finally, although the work of the Task Force has focused on activities towards countries outside Europe, the Task Force would like to point out that it sees joint initiatives by TAFTIE member agencies towards countries outside Europe as an important means to strengthen cooperation within Europe. 4

5 INTRODUCTION TAFTIE TASK FORCE ON INTERNATIONALISATION The internationalisation of science, technology and innovation is accelerating and increasingly becoming an important determinant of competitiveness and sustainable economic growth and prosperity in TAFTIE member countries. TAFTIE member agencies play an important role in harnessing the forces of internationalisation to the benefit of national innovation systems, both by promoting international linkages of their customers, and by ensuring favourable conditions for innovation system actors to operate in a global context. Internationalisation is thus a key issue for TAFTIE members. For this reason the TAFTIE Board appointed a Task Force on Internationalisation. The purpose of the TAFTIE Task Force is to strengthen policy learning among member agencies and to provide input to member agencies internationalisation activities and strategies. In addition, the Task Force aims at identifying key issues for internationalisation of innovation relevant both at national level and at the level of the European Union. The European Union remains the strongest priority in TAFTIE member agencies international cooperation, within which the Framework Programme for research and technological development remains a vital part. This Task Force focuses primarily on how member agencies work with internationalisation activities outside the European Union and outside Commission activities. In addition, the Task Force discusses to what extent, if any, the current strong ambition of the European Commission to strengthen its collaboration with third countries will have an effect on the internationalisation activities that TAFTIE agencies have with countries outside Europe. The Task Force, which was chaired by VINNOVA, held four meetings over the course of one year, conducted a survey on member agencies internationalisation activities, consulted with a number of experts and produced this report. INNOVATION POLICY IN A GLOBALISING CONTEXT unless an economy enjoys success at every stage of the process from invention, through innovation and economic disruption, to growth it may lead the world in research but the final economic returns will flow to others. 1 1 Auerswald and Branscomb (2008), Research and Innovation in a Networked World, Technology in Society, Vol. 30, p

6 Globalization is not decreasing the need for innovation policy; on the contrary, it may be strengthening it. Firms are encountering rapidly changing and highly uncertain market and institutional conditions in the international context on top of the technological uncertainties associated with inventive and innovative activities. For that reason, public action needs to focus on the adaptability of the innovation system with the overall objective to generate a national or regional framework that is conducive to firms adaptability and efficient exploitation of the opportunities offered by globalization [P]ublic action shall focus on the different elements in the systems and their real bottlenecks vis-à-vis globalizing dynamics, and in particular, the deficient and/or missing aspects in the national institutional set-up that enhances the firms capabilities to operate in this globalized context. 2 We are today witnessing the increasing internationalisation of innovation, manifested by rapidly growing numbers of international co-publications, cross-border co-patenting activities, governmental agreements on science and technology cooperation, and offshoring of corporate R&D activities. The latter refers to a growing trend whereby firms are establishing R&D centers outside their home countries. In particular, we see a growing number of European, Japanese and US companies setting up R&D activities in China and India. Internationalisation of innovation means that the value chain is broken up and that research, innovation, production and value creation no longer necessarily occur in the same geographic location. In today s world, the competitiveness and prosperity of countries and regions are increasingly dependent on their ability to harness the forces of globalization, science, technology and innovation to generate economic and social value. Globalization of innovation means that countries seek to optimize the use of global knowledge and innovation resources for their own benefit. Industrialized countries (North America, Europe and Japan) have for a long time dominated the global R&D landscape. This dominance is increasingly being challenged as growth and transition economies increase both their supply and demand for knowledge and innovation. China, Russia and Brazil are perhaps the most prominent examples of countries where investments in R&D are increasing rapidly, and the number of students, engineers and researchers is growing dramatically at the same time as large domestic markets are attracting R&D investments of foreign companies. As a result, we are witnessing a shift in the center of gravity when it comes to knowledge and innovation resources, with transition and developing countries rapidly increasing their knowledge resources and their importance as innovation drivers (both because of their growing technology strength and their large and growing markets). China is challenging the leading sciento-economic powers and the time is approaching when this country will represent the world s second largest potential in science and technology. China and other emerging scientific nations like South Korea, Taiwan, Brazil and Turkey are already changing the balance of power measured by scientific production, as they are at least in part responsible for the relative decline of the former triad. 3 International collaboration in the fields of knowledge and technology is becoming a vital tool for future competitiveness countries are increasingly competing through knowledge. 2 Edquist (2008), Identification of Policy Problems in Systems of Innovation through Diagnostic Analysis, paper presented at PRIME Conference, Mexico City, Sep.24-26, Glänzel, W., Debackere, K., Meyer, M. (2008), Triad or Tetrad? On global changes in a dynamic world, Scientometrics, 74 (1), p.71. 6

7 Knowledge and technology have become decisive assets in a global economy which has led to international collaboration within knowledge, technology and innovation sometimes referred to as science diplomacy. This has become an important political tool for international collaboration which is driven by national ambition within several areas of policy such as research policy, innovation policy, economic policy, environmental policy, defence policy, international policy and development policy. Proposals for international research are frequently driven by ambitions and intentions from areas other than research and innovation policies. Many of the challenges facing the global community, such as environmental issues, constitute examples of local problems that require global solutions. Against this background well functioning forms of international collaboration between researchers, companies and other stakeholders become crucial. STATE OF PLAY IN INTERNATIONAL COLLABORATION STRATEGIES A recent study of drivers of International Collaboration in Research was commissioned by the EU Commission Directorate for Research 4. This study, although emphasising aspects of research rather than innovation, gives an interesting background of the changing policy landscape for internationalisation related to science, technology and innovation (STI) issues. The study was based on a literature review as well as a scanning of 20 countries (10 EU, 10 non-eu countries). A comprehensive government wide strategy for international STI collaboration is an exception according to the study. Germany, Finland, Ireland are examples of such exceptions. However, there is a clear trend for increasing interest in elaborating such strategies and many countries are working on it. In addition, STI internationalisation and collaboration are key topics in STI policy plans in many countries. Countries within the EU are still very much focused on mainstream EU collaboration, such as the EU Framework programme, multi-lateral organisations such as e. g. CERN, EMBL 5, and various bilateral agreements within the European Union. However, collaboration with third countries is growing. The study finds that many existing bilateral STI agreements are without implementation. The funding and size of activities is modest. However, new member states seem to have some working bilateral agreements. Furthermore, the study points to the fact that a multitude of actors in the national contexts are involved in shaping the agenda for STI internationalisation and collaboration (see Figure 1). Such a decentralised model with many actors involved raises governance issues. A real issue according to the study is that governments have not thought well about rationales, goals, and expected results of these policies for internationalisation. 4 Patries Boekholt, Technopolis Group, presentation to the TAFTIE task force on Internationalisation Strategies, May 7th The European Organization for Nuclear Research (CERN) and The European Molecular Biology Laboratory (EMBL) 7

8 Figure 1. Decentralised governance of international STI cooperation Source: Patries Boekholt, Technopolis Group, presentation to the TAFTIE task force on Internationalisation Strategies, May 7 th 2009 The study identifies a diversity of drivers for internationalisation in the policy context. It points out that there are parallel paradigms in terms of the main drivers for internationalisation. There is a Narrow paradigm : from an intrinsic science and research perspective co-existing with a Broad paradigm : science and research collaboration as a means to other (policy) goals (see Figure 2). Figure 2. Diversity of drivers for internationalisation of policy Source: Patries Boekholt, Technopolis Group, presentation to the TAFTIE task force on Internationalisation Strategies, May 7 th

9 The diversity of goals and driver for internationalisation can be illustrated by the following examples. In the German Internationalisation strategy presented in 2008 by Cabinet four goals are formulated: Strengthening research cooperation with global leaders International exploitation of innovation potentials Intensifying the cooperation with developing countries in education, research and development on a long-term basis Assuming international responsibility and mastering global challenges The Dutch Ministry for Education, Culture & Science has formulated an Agenda for Internationalisation stating four goals: Increase mobility of Dutch students Stimulate the international orientation of higher education institutions Increase brain circulation : attract talents from abroad Improve international investments of higher education institutions and research institutes EU COMMISSION IS PUSHING COLLABORATION WITH 3RD COUNTRIES Within the European Union, international collaboration in research and innovation involving countries outside the European Union is increasingly at the core of the European agenda for achieving overall policy goals such as competitiveness, cohesion and sustainability. Moreover, the European Commission has actively been pushing international collaboration with third countries. Examples of this include: The Communication A Strategic European Framework for International Science and Technology Cooperation (September 2008) The Communication presents a strategic European framework for international cooperation in S&T. It also covers the specific aspects of international cooperation that relates to information and communication technologies (ICT). It outlines a number of actions under the framework that is aimed to raise the S&T profile of Europe worldwide, and put the ERA on the global map. The Communication is one of the five Commission initiatives on the future of ERA. The Council Conclusions concerning a European partnership for international S&T cooperation (December 2008) The Strategic forum for international S&T cooperation (December 2008) The 2020 Vision for the European Research Area The recent initiative by the European Commission to set up a European Business and Technology Centre in New Delhi and an EU SME Centre in Beijing. The activities of the European Commission have been studied by the Taskforce and the implications for TAFTIE member s national policies on internationalisation strategies discussed. The taskforce consider the Communication A Strategic European Framework for International Science and Technology Cooperation of particular importance in that aspect, and has reached some conclusions elaborated in the concluding section of this report. 9

10 CHALLENGES AND OPPORTUNITIES OF GLOBALISATION WHY A GLOBAL PERSPECTIVE IS CRUCIAL FOR INNOVATION AGENCIES Against the background of the globalising context for innovation policy, and the changes in the policy landscape presented above, common and widely accepted motives for the international involvement of innovation agencies include: Research is an international phenomenon and the research community is international Globalisation is accelerating The main part of research and innovation activities are performed in countries other than that of the particular innovation agency Production of knowledge and innovation activities is increasing rapidly in important growth markets, particularly in BRIC 6 and NIC 7 countries. Companies competitiveness depends increasingly on their ability both to source knowledge and innovation internationally and to sell knowledge-intensive goods and services outside their home markets. The mission, objectives and range of activities differ between innovation agencies. Therefore, the international dimension of the agencies takes on different forms. A common denominator for the innovation agencies is the assignment (usually by the government or regional authorities) of stimulating innovation and growth within a country or region. This assignment may be general in character or commissioned through specific decisions concerning programs or projects targeting primarily national actors in the innovation system, mainly from three main categories of actors: universities, research institutes and companies (both large and small), hereafter called partners. In general terms, the assignment is carried out in the form of: (1) Assessment and financing of research and innovation projects performed by partners. (2) Soft support in the form of information, counselling, creating opportunities for international contacts and networking. National actors or partners encountered by innovation agencies in their activities all run their activities and businesses in an international perspective. It is therefore necessary for innovation agencies, in interplay with partners, to fulfil their national mission in an international perspective and in the context of international networks. This necessity is particularly apparent in small countries with limited home markets and a more narrow research base. Companies need to consider their innovation projects in an international perspective. For them, it is not very meaningful to narrow down conditions for market and competition to a national level. Often, international markets are a prerequisite for growth and return on investments in innovation. Obviously, companies have the best information relevant for their business and strong driving forces to make the most of the opportunities of globalisation. They are also the first to perceive existing threats or bottlenecks. A good dialogue between innovation agencies and companies, who may be the most important partners for the agencies, necessitates capability of innovation agencies to assess project proposals in an international perspective, and particularly the potential of a project for contributing to value creation in the home country or 6 Brazil, Russia, India and China 7 Newly industrialized countries 10

11 region. When considering companies it is useful to distinguish between large multinational companies which, aside from selling and producing in global networks, have pioneered the offshoring of R&D activities to countries such as China and India, and medium-sized or small companies who, for obvious reasons, often have much less internationalized scope or reach, particularly when it comes to R&D activities. Research institutes increasingly consider their activities in an international context. Usually, they have long term basic financing to develop and maintain competencies with a primary purpose of creating national or regional growth and innovation. Generally, this purpose is fulfilled through making their competence available in commissions from companies. Increasing concentration in industry (bigger and fewer companies), both on national and international level, tend to decrease the number of actual and potential customers. Upholding critical mass and motivating investment in expensive equipment increasingly forces research institutes to attract customers from abroad. Investments in developing competencies and competitiveness of institutes therefore need to be considered in an international perspective. There are a number of examples of research institutes in smaller countries who have put international cooperation as a cornerstone of their strategy. Also, research institutes in larger countries, e. g. Fraunhofer- Gesellschaft in Germany, have made increasing efforts for internationalising their activities also by establishing formal agreements with other institutes or setting up premises of their own abroad. Research at universities is increasingly exploiting the international character of their activities to be competitive. For innovation agencies, there are good opportunities to make use of the international networks of the agency to assess national strengths and weaknesses of research performed at universities. Particularly in smaller countries, international expertise or evaluation teams, constitute a possibility for performing independent assessments, both of proposed activities (ex ante) and already performed activities (ex post). For example, in the beginning of the eighties, the Swedish government made a substantial investment in IT related research. Before the start of the program, international expertise was involved in giving advice concerning strategic orientation and international contacts. During the programme period, the research groups established were evaluated on a yearly basis by international experts and both past activities and future plans were discussed. Furthermore, it is not uncommon for research groups to establish a scientific advisory board which includes international experts. VALUE OF INTERNATIONALISATION OF AGENCIES FOR THEIR PARTNERS In order to fulfil their core activities of assessing and financing innovation and research projects and programs, innovation agencies similarly to their partners need to put in practice an international perspective in their activities. The value that innovation agencies can provide to their partners in an international perspective stems from their specific role and conditions. The innovation agency, as a public sector representative, generally has a certain degree of independence. Most often the agency reports to a ministry (or other public authority), it does not have goals of economic profit for its own activities; it usually has no research activities of its own and has no ambitions of pursuing e. g. academic merits. These specific conditions favour development of knowledge and competence that is very difficult for the innovation agencies partners themselves to obtain or maintain in terms of overview, networks, contacts, advice and information, but which can be of substantial value to the partners in their innovation related activities. Furthermore, particularly in transition and development economies, the mandate of innovation agencies as government authority provides them legitimacy and weight enabling a role as door-opener for firms, universities and research institutes. In many cases this also implies access to governmental funding in the other country, which otherwise could be very difficult for individual partners to obtain. This possibility of international co-funding has the additional advantage of further leverage of the resources put in from each side. 11

12 Innovation agencies can perform the role of adding value to the internationalisation efforts of their partners in several ways, for example: They can set up bilateral cooperation programs with counterparts in other countries (an example is the ICT research cooperation program or the medical research cooperation program which VINNOVA has with the Chinese Ministry of Science and Technology and the Indian Department of Biotechnology, respectively) They can organize trade fairs or matchmaking events (CDTI and Senter Novem work actively in this way); Having an innovation agency as initiator or co-organizer often lends significant weight to an event in countries such as China, India or Brazil They can set up offices abroad with the purpose of assisting innovation partners in connecting with local counterparts or in establishing presence in foreign markets The most obvious and concrete example is that many innovation agencies have explicit roles and assignments concerning international R&D programs. Many are national contact point for programs of the European Union such as EUREKA and the Framework Programme for research and technological development, which implies access to networks and information and possibilities for influence which can be of considerable value to its partners. Innovation agencies are also natural partners for ministries and government agencies and other public authorities, both in their national setting and in other countries. To strengthen their international networks, many innovation agencies have offices abroad, e. g. in Brussels and for some in a number of locations around the world. The purpose of information and knowledge acquisition and building of international networks is explicitly to make this available to their partners in a practical way for supporting partners in their internationalisation efforts. In line with this, many innovation agencies perform specific studies of innovation systems and innovation policy developments in other countries and of opportunities and impediments for international cooperation. These studies are provided to partners as more general background information. A further value potential offered by innovation agencies lies in the fact that current internationalisation activities in the field of RTDI (Research Technology Development and Innovation) tend to be strongly dominated by research cooperation, whereas activities focusing on internationalisation of innovation are relatively scarce. Thus, the most common forms of international cooperation are bilateral academic research or mobility programs (again with primary focus on academia) whereas there are few initiatives focused on strengthening the internationalisation of technology-intensive firms, and on linking users of innovation outside Europe to potential providers in Europe (see also Patries Boekholt s analysis). Finally, a further value that agencies could offer their partners lies in the pooling and provision of competence on issues related to globalization of innovation. Examples include: the provision of legal competence and support, for example regarding intellectual property (IP) issues and strategies (related to contractual issues for international consortia but also support or advice for individual firms IP strategies or issues) pooling competence on developments and policies in strategic markets and sectors; examples would include environmental technology in China (innovation agencies can play a valuable role in providing support to companies on rules, regulations, procurement policies etc) This function is still underdeveloped in a lot of the innovation agencies today but could become an important asset or service for innovation partners. 12

13 OVERVIEW AND CURRENT SITUATION FOR TAFTIE MEMBER AGENCIES CURRENT INTERNATIONALISATION EFFORTS IN TAFTIE AGENCIES As part of the work of the TAFTIE Task Force on Internationalisation, a survey was conducted regarding the internationalisation activities and strategies of the TAFTIE member agencies. Eleven innovation agencies from different European countries participated in the survey. 8 STRATEGIC EFFORTS FOR INTERNATIONALISATION ARE GROWING The results of the survey show that there is considerable difference in the drivers and focus of activities and strategies for internationalisation. In part, this is a reflection of the diversity of missions of the different member agencies of TAFTIE. 9 However, internationalisation efforts are growing and overall there seems to be some similarity in terms of the geographic orientation and interest for international cooperation outside Europe. About half of the agencies surveyed already have or are in the process of establishing a strategy for international cooperation, although the focus is sometimes broader than international cooperation. VINNOVA published an international strategy in TEKES is in the process of updating its current international strategy, and at Research Council Norway an international strategy linked to the overall strategy is foreseen during the current year. CDTI and Enterprise Ireland consider the international dimension to be strategically integrated in their overall activities. The Research Council Norway (RCN) is in a process of renewing their strategy. As a follow-up on a new strategy for RCN, we will also make a new strategy for international cooperation. This will be a strategy for the whole Research Council, industrial research and innovation activities will be an important part of it. The other respondents indicated that they do not have an international strategy for their activities. At the national level, only Finland and Ireland have an overall international science, technology and/or innovation strategy. The Irish Government s Strategy for Science, Technology and Innovation has a strong focus on the role business has to play in making Ireland internationally recognised for the quality of its research and development and as a provider of innovative, market-led products and services. The Strategy identifies a range of issues in terms of the international dimension of Science, Technology and Innovation (STI) in Ireland. As investment in STI increases and the move to a knowledge-based economy intensifies, Ireland s formal and informal STI linkages with other countries continue to grow in both scale and complexity. Few of the agencies have a dedicated budget for international activities outside Europe. About half of the agencies have a presence through offices abroad. CDTI, TEKES and 8 See appendix 1 for a full list of TAFTIE members, their missions and participation in the survey, appendix 2 for the survey questionnaire, and appendix 3 for a compilation of survey results. 9 Idem 13

14 Enterprise Ireland are examples of agencies that have offices abroad. TEKES has offices in the USA (DC and Silicon Valley), Japan (Tokyo), China (Beijing and Shanghai), Enterprise Ireland has a network of 32 international offices (see survey results in appendix) DIVERSITY IN DRIVERS FOR ACTIVITIES OUTSIDE EUROPE The main drivers for international activities outside Europe are access to world-class research and innovation environments, government mandate and bilateral agreements as well as market access and commercialisation. For both TEKES and VINNOVA, the first driver is put forth as the single most important one. Attracting inward investment is an important driver for four of the respondents. Development aid seems not to be a driver in itself, but is considered of interest in the context of the overall strategies. For TEKES and IWT, international activities as a whole are mainly linked to existing programs. IWT, CDTI and Senter Novem have a strong focus on promoting the internationalisation of technology-intensive firms in their activities outside Europe. TEKES motto in internationalisation is we follow our customers. In practice this means that TEKES international activities are closely linked with its technology programs at the same time as TEKES listens closely to customer needs. DIVERSITY IN FOCUS FOR ACTIVITIES OUTSIDE EUROPE In terms of focus of the internationalisation activities of responding agencies outside Europe, there is diversity in agencies activities. Most agencies are involved in several types of activities. Most are involved in research and/or innovation cooperation, promoting internationalisation of SMEs and commercialisation activities. Some are involved in promoting foreign direct investment and human capital mobility. SIMILARITIES IN GEOGRAPHIC INTEREST There seem to be similarities in the geographical interest for international cooperation among responding agencies. The countries that are most frequently mentioned concerning current cooperation or interest in future cooperation are: China, India, Japan, Brazil, North America, Russia and South Africa. However, the bulk of international cooperation today occurs within Europe. Few agencies seem to have bilateral programs with countries outside Europe. Among the existing programs for cooperation outside Europe there are examples of both joint funding and unilateral funding. The following models emerge as the ones that seem most widely practiced today: 1. Bilateral research programs with joint calls for proposals (OSEO, RCN, VINNOVA, TEKES, Matimop, others?) and joint or unilateral funding in selected thematic areas (top-down?) 2. Funding companies research projects with partners outside Europe (Senter Novem, CDTI, IWT?) (bottom-up?); In this case, funding is not coordinated between countries as in the above model, i.e. countries decide unilaterally to fund companies or researchers cooperation with partners from other countries. 3. Funding networking activities (seminars, trade fairs, match-making, etc.) 4. Funding different types of centers, with uni- or bilateral location and activities 14

15 SOME EXAMPLES OF INTERNATIONAL PROGRAMS OF INNOVATION AGENCIES EUREKA-like International decentralised Programmes Using EUREKA as a model to help Spanish firms access knowledge partners in dynamic markets, similar schemes have been put in place, both multilaterally with Iberoamérica (Iberoeka to be soon up-graded to a fully fledged programme Iberoamérica Innova ) and bilaterally through agreements with Innovation Agencies in China, Korea, Japan, India and Canada. CDTI provides special conditions, namely free interests credits up to 75% of the project budget, including a non-refundable part of 25% of the credit to Spanish participants and these projects might be co-funded by Regional Innovation Agencies and Institutions within the limits of EU State Aid Rules. In order to compensate for the transaction costs related to this kind of consortia, CDTI promotes, through Spanish Associations and Technology Platforms, the organisation of Technological Cooperation International Missions of Spanish firms R&D managers, associated to matchmaking events with potential partners identified previously both by CDTI overseas international network and partner Innovation Agencies. On top of that, CDTI launched recently a call for proposal intended to support the definition of future EUREKA, IBEROEKA and BILATERAL projects, among other incentives to help business associations promote international R&D partnerships. International Research Fund (IRF) IRF is designed to facilitate Irish third level research performing organisations (RPO) to participate effectively in international collaborative consortia with an industrial partner based in Ireland and in a project which is addressing a close-to-market opportunity. 100% grant funding is available up to 250,000 to cover research costs (salaries, travel, materials and consumables) associated with project. Bilateral and multilateral programs On behalf of the Office of the Chief Scientist, MATIMOP generates and operates bilateral schemes for international cooperation. In pursuing international collaborative R&D opportunities for Israeli industry, two main program models are followed: 15

16 Independent bi-national funds, with each nation making an equal contribution. This scheme is implemented with Singapore, South Korea, the United States (BIRD) and Canada (CIRDF). Parallel support arrangements, whether bi-national or multi-national whereby each nation is committed to funding R&D performed by the joint venture partner company from its own country in accordance with their respective laws and regulations. This type of program is conducted with China, India, Taiwan, Victoria (Australia), the states of Maryland and Virginia (US) and Argentina. International cooperation is also pursued through bilateral (national and regional) and multilateral European programs (Framework program, CIP, Galileo) including international partners. Eventually the multinational companies agreement (e.g. with Merck, Microsoft, Alcatel Lucent, IBM, Coca Cola, Renault) presents a scheme for cooperation at international corporate level. FiDiPro funding promotes long-term cooperation FiDiPro - Finland Distinguished Professor Programme is an example of a successful initiative to increase internationalization of the Finnish scientific community. Led and financed by the Academy of Finland and Tekes, FiDiPro provides competitive grants to projects recruiting highly merited scientists, who are able to commit to long-term cooperation with a Finnish university or research institute. The first FiDiPro researchers started their work in At present, there are 46 FiDiPro Professors, 27 of whom receive funding from the Academy of Finland and 19 from Tekes. In 2009, Tekes launched FiDiPro Fellow funding with a view to attracting promising research talents who are at the early steps in their career. The programme provides Finnish universities and research institutes with the opportunity to employ scientist from all around the world for a fixed term between two to five years to carry out research projects, jointly with Finnish researchers. Finnish universities and research institutes may propose FiDiPro Professors and FiDiPro Fellows from all disciplines, ranging from the humanities to medicine and technology research.. KTN European and International Fund Knowledge Transfer Networks (KTNs) are the UK s national virtual clusters. Following the Review recommendations that the KTNs engage internationally the KTN European and International Fund was established in autumn This Technology Strategy Board competitive fund of 500,000 per year is available to support KTNs in international activities. Activities eligible for funding include organising international conferences, gathering and dissemination of international technology and knowledge; international cross-ktn special interest groups, linking up with equivalent clusters around the world, and support for KTNs and SME members in attending foreign workshops and events. 16

17 BILAT-scheme. The scheme was launched in 2008 with a call for proposals for pre-projects to establish contact between Norwegian enterprises and research organizations and international partners. The thematic areas were in line with Norway s national priorities - food, health, renewable energy, and materials. Priority partner countries were USA, Canada, China, Japan and India. As a result, 23 pre-projects were funded. The following call for proposals for research projects was open only for those who were granted pre-proposals. As a result, 9 projects with collaboration between R&D institutions and enterprises in Norway and partners from the above mentioned countries have now started. The projects will run for 3 years, and the total budget for the 9 projects is 62 million NOK (7.5 mill EURO). Subsidy and Matchmaking On behalf of the Dutch Ministry of Economic Affairs SenterNovem operates a bilateral subsidy scheme for two separate geographical areas outside Europe, namely a group of four industrialized countries and eight emerging markets. The industrialized countries are the U.S., Canada, Singapore and Japan. Dutch cooperation with these countries has yielded a total of 75 bilateral R&D projects since The emerging markets are Brazil, China, India, Indonesia, Malaysia, Thailand, South Africa and South Korea. Dutch cooperation with these countries has yielded a total of 129 bilateral R&D projects since Besides project funding, SenterNovem is actively engaged in organizing matchmaking events for both incoming and outgoing technology missions. The events offer companies and research institutes the opportunity to meet potential foreign partners for R&D cooperation in a specific field of technology. The aim of such events is to establish new contacts leading to R&D projects and, at a later stage, joint commercial exploitation of the results. Since 1997 SenterNovem has organised more than 20 of these matchmaking events outside Europe Global links for strong research and innovation milieus VINNOVA, and other Swedish agencies, are currently funding a number of Centres of Excellence combining excellence in research and innovation in which academia, institutes and industry cooperate in joint projects. These are both local cluster-type initiatives and centers active on a national arena. Studies have shown that few, if any, of the current milieus have a strategic approach to international cooperation or internationalisation. VINNOVA therefore initiated an initiative to strengthen their capacity to create long-term and strategic international cooperations. In the first phase (2009), 13 milieus, were awarded grants of to develop international strategies that should become an integral part of the center s over-all activities. VINNOVA plans to follow-up with appropriate funding schemes to support implementation. 17

18 CONCLUSIONS CONSIDERABLE POTENTIAL BUT WEAK POLICY The new global and innovation landscape means that new knowledge and innovation hubs are emerging in countries outside Europe, such as China, India and Brazil. These countries combine rapidly growing knowledge resources with large and dynamic markets. As a result, it can be argued that both the demand for and supply of knowledge and innovation are increasing more rapidly outside Europe, North America and Japan. These developments present considerable opportunities but also challenges for firms, universities and research institutes and for the national innovation systems as a whole in Europe. The opportunities lie in accessing new knowledge and markets for innovation, the challenges lie in contending with new competitors and in overcoming difficulties associated with accessing these new markets. Accessing these markets puts large demands on firms resources, competencies, their ability to establish strategic partnerships, and their ability to service new users outside their traditional home markets. The work carried out in the TAFTIE Internationalisation Task Force so far shows that there is considerable potential for innovation agencies to create added value for their partners in their internationalisation efforts. However, the best way to make this happen is less clear. Thus, experiences and surveys show that there is a potential which, for several reasons, has so far not been fully realized. The first reason for this is that most countries do not have an overall policy for international RTDI (Research, Technology Development and Innovation) cooperation, and where such a policy exists, it is rather vague and not very precise. This implies that demands directed at the innovation agency from its commissioning body (ministry or other) are often unclear, ad hoc and sometimes somewhat confusing. The background and motives for these demands can be historical ties, international development cooperation, diplomacy or concrete international high level visits, an ambition to strengthen the national R&D capacity or national competitiveness etc. It is also difficult for the innovation agency itself to formulate a clear policy even if the objective on this level often is more straightforward and has to do with the long term strengthening of the national innovation system and contributing to growth. International activities are often performed in an ad hoc manner without apparent coordination and clear objectives and this seems to be the case both at agency and national level. This inhibits feedback from experiences, evaluation and development of knowledge and competence. Circumstances seem to indicate that globalisation will accelerate when the current economic crisis abates. To be able to better fulfil its national mission, there is reason for innovation agencies to increase focus on opportunities to create added value for their partners in their internationalisation efforts. This may well be one of the most important areas for development for innovation agencies. Generally, innovation agencies have strong assets, both in terms of competence, resources, important linkages with innovation partners and the ability to sustain efforts over time. The latter allows them to take a long-term approach to internationalisation activities and programs which, as for example the recent evaluation of China s Participation in the Framework Programs shows, are vital for success. 10 Therefore, there are good prospects of innovation agencies to focus their operative internal organisation for international cooperation on learning and development of knowledge and competence. This requires some coordination and transparent and trustful collaboration involving many in the organisation. Considering the uncertainty about the forms of best practice, considerable commitment and interest on the part of executive management is crucial. 10 Arnold et al (2009) Evaluation of China s participation in the EU Framework Programme, Evaluation carried out for the European Commission, DG Research 18