Author Archives: Margaret Pesuit

European Innovation Partnerships: A new policy approach for promoting innovation

Warsaw conference presentation - Rumen Dobrinsky

By Rumen Dobrinsky

Warsaw conference presentation - Rumen DobrinskyAt the September 10 conference on the “Innovation Union in Europe: Accomplishments and Challenges”, Rumen Dobrinsky of the Vienna Institute for International Economic Studies (wiiw) discussed his paper, “European Innovation Partnerships: A New Policy Approach for Promoting Innovation”. The paper, which is due to be submitted for publication in the International Journal of Management and Economics, offers an analytical assessment of the implementation of five European Innovation Partnerships (EIPs). These EIPs were launched as one of the commitments of the EU Innovation Union flagship initiative, with the aim to achieve innovative breakthroughs addressing major societal challenges. The EU launched five EIPs: (1) Active & Healthy Ageing; (2) Water; (3) Agricultural Productivity and Sustainability; (4) Raw Materials; and (5) Smart Cities and Communities. The paper reviews the rationale of introducing the EIPs as a policy intervention and traces their organic evolution and governance structures. It then provides an analytical evaluation of this EU policy initiative based on factual analysis of its implementation experiences and a comparison of its objectives and actual outcomes. In addition, it analyses the role of the EIPs as drivers of systemic change in the European innovation ecosystem and catalysts of new innovation activity in Europe. This critical assessment serves as the basis to draw some conclusions about the strengths and weaknesses of the EIPs as a new policy approach to promote innovation in Europe. One central conclusion is that, while the EIPs have been very efficient in fostering collaboration among innovation stakeholders, they have fallen short of generating genuine innovative breakthroughs. The paper analyses the reasons for this and suggests some possible remedies.

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Read Rumen Dobrinsky’s article on European Innovation Partnerships in the May 2018 wiiw Monthly Report

I3U at the TAKE conference: Should innovation policy be evidence-based?

TAKE conference

By Marzenna Anna Weresa

Marzenna Weresa of the World Economy Research Institute at the Warsaw School of Economics gave a keynote speech on I3U and the Innovation Union at the TAKE 2018 conference in Poznań, Poland on 11-13 July 2018.

Towards innovation union in Europe: Should innovation policy be evidence-based?

TAKE conferenceNowadays, the European Union is challenged in the global arena by emerging economies as well as by the US in terms of developing innovation and capitalizing on knowledge and technology. The need to elaborate long-term strategic visions for the European Union research and innovation system has been recognized in the “Europe 2020” strategy, especially in its Innovation Union initiative. One of its objectives is to strengthen the European science base and to use scientific evidence in the process of innovation policy-making. The idea of using scientific evidence to shape policies aimed at solving society’s problems has existed since ancient times and can be found in the works of Plato, Aristotle, and Descartes, among others. Today we see an increase in the demand for scientific evidence alongside questions posed to scientists by policy-makers and by the entire society regarding a range of choices in energy, the consequences of climate change, food safety to health care and social exclusion.

The main objective of Weresa’s keynote speech was to discuss the direct and indirect effects of the EU innovation policy instruments implemented as an Innovation Union initiative. An emphasis was put on the tools that promote a stronger European dimension of R&D, including an evidence-based approach to policy making. The speech was based on the results of the European Union Horizon 2020 project on “Investigating the Impact of the Innovation Union (I3U)”, (H2020-INSO-2014, grant Agreement: 645884).

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The socio-economic impacts of the Innovation Union’s commitments

I3U graph - increase in innovation assets

By Pierre Le Mouel

Two I3U reports presented at the “Innovation Union in Europe, accomplishments and challenges“ conference at the SGH Warsaw School of Economics on September 10, along with a new policy brief, quantify the socio-economic impacts of the different IU commitments using the macro sectoral model NEMESIS.

I3U graph - increase in innovation assets

Projected increase in innovation assets – 2014-2050

The first report assesses the different impacts commitment by commitment, as well as by groups of commitments. Not all of the commitments could be assessed using the model, as many (i) do not follow precise quantitative objectives, such as the commitments focusing on the monitoring of the IU, (ii) have not been yet implemented, or (iii) could not be measured in reason of the lack of data. Thirteen commitments were finally implemented in the model and grouped in four different thematics, or categories according to the actions of the commitment on the EU R&I system: Group 1 – “ERA- Human capital”, Group 2 – “Finance”, Group 3 – “European funds”, and Group 4 – “Action to market”.

The socio-economic assessment has focused on the impacts that could induce further implementation of the different IU commitments in the future, compared to the situation observed at the end of 2013. For each commitment and group of commitments, two scenarios were studied.

The first scenario, called “REALISTIC”, is based on the prolongation up to 2027 of the observed trends on the commitment implementation. Thereafter, the commitment implementation was supposed to not increase anymore and to stay constant at the 2027 level until 2050. The second scenario, called “OPTIMISTIC”, retains a higher yet reachable implementation of the commitment than in the “REALISTIC” scenario, assuming additional policies or the amplification of ongoing policies.

For the four groups of commitments, under the “REALISTIC” scenario that follows the current trends, the following impacts are expected:

The four commitments of Group 1- “Human capital”, aim at increasing public/private research partnerships (C2.2), developing researcher mobility within Europe (C4.2), attracting talents from third countries (C30) and increasing e-skills (C3). The main impacts come from their positive effects on public research productivity that could be enhanced by 15% when the commitments are implemented jointly. It could, from the increase in knowledge spillovers from public research toward private research, raise the annual potential EU GDP growth rate by 0.032 points. The gain in EU GDP would reach 0.37% in 2040 and 0.69% in 2050, and the gain in EU employment would be 157,000 and 405,000, respectively.

The four commitments of Group 2 (C10, C11, C12 and C13) – “Finance”, all aim at facilitating the access to finance of innovative firms and notably SMEs. They could jointly increase R&D intensity in the EU by about 0.093 points and because of their impact on innovation, increase the long-term, annual EU GDP growth rate by about 0.044 points, with +1.11% EU GDP in 2040 and +1.54% in 2050. They would also increase the EU employment level by 775,000 in 2040 and by 1,044,000 in 2050.

For the three commitments of Group 3 – “EU funds”, the main impacts come from Commitment C6 (regarding EU R&I Framework Programmes) while the impacts of commitments C24/25 (on ESI funds) stay limited due to their weak realisation under the current multiannual financial framework (2014-2020). The joint impact of these commitments could increase EU GDP R&D intensity by 0.039 points, with an impact of 0.015 points on the potential EU GDP annual growth rate. The gains for EU GDP would amount to 0.38% in 2040 and 0.53% in 2050, and for EU total employment they would be +332,000 and +437,000, respectively.

For the two commitments of the last group – “Action to market”, the only significant impacts are from commitment C19.1 (creative industries), which capture the influence of services provided by the creative industries on the innovation performance of private firms. Following the current trends, their impact on EU GDP R&D intensity could reach 0.030 points, leading to an increase in the potential EU GDP annual growth rate of 0.016 points. EU GDP gains would reach 0.34% in 2040 and 0.50% in 2050, and those in EU total employment would reach +217,000 and +318,000, respectively.

Contributions to GDP change

Contributions to GDP change (gap to reference scenario)

In the case of the “OPTIMISTIC” scenario, which expects an accelerated implementation of the commitments, the socio-economic impacts of the different groups of commitments would be even more important. In summary:

  • An increase in public research productivity by 33.4% (Group 1);
  • An increase in EU GDP R&D intensity by 0.13 points (Group 2), 0.06 points (Group 3) and 0.06 points (Group 4);
  • An increase in the potential EU GDP annual growth rate by 0.066 points (Group 1), 0.061 points (Group 2), 0.021 points (Group 3) and 0.033 points (Group 4);
  • The delivery of EU GDP gains in 2040, ranging from +0.56% (Group 3) to +1.49% (Group 2) and in 2050 from +0.78% (Group 3) to +2.1% (Group 2).
  • The creation of jobs in the EU, ranging from +331,000 units (Group 1) to +1,026,000 (Group 2) in 2040 and from +621,000 units (Group 4) to +1,405,000 (Group 2), in 2050.

In the second report, the impact of the individual commitments was assessed all together. To avoid overestimating the socio-economic impacts of the commitments when assessed as a whole, we have identified overlaps and adapted the methodology to assess them using the NEMESIS model. Furthermore, the assessment of the IU commitments as a whole has allowed the model to take into account the potential synergies that may exist between them, as well as their mutual crowding-out effects when introducing the IU commitments all together, for example from tensions on the high-skilled labour market.

Following current trends, as in the ‘REALISTIC’ scenario, the gains in EU R&D intensity could reach 0.16 points in 2027 and then it could lead to (i) an increase in EU GDP of 2.2% by 2040, (ii) an increase in the potential EU GDP annual growth rate of 0.1 points, and (iii) 1.4 million additional jobs in the EU in 2040.

By reinforcing current policies and current trends, such as increasing the budget of the EU R&I Programmes, the rise of the EU GDP intensity in 2027 could reach 0.24 points, leading to +3.5% in EU GDP, an increase of 0.16 points in the potential EU GDP growth rate and 2.2 million additional jobs in the EU in 2040.

Thanks to the European innovation scoreboard and with the support of the NEMESIS model, we have already assessed (see “Measuring the progress of the Innovation Union” from I3U Newsletter 3) the ongoing and forthcoming socio-economic impacts of the progress achieved by member states between 2007 and 2013 in reinforcing their scientific and innovation performance. Given the increase in EU GDP R&D intensity of 0.26 points, which went from 1.75 in 2007 to 2.01 in 2013, and assuming that this increase will be maintained thereafter, the socio-economic impact assessment with the NEMESIS model simulation has shown that it could bring up to 2.8% additional GDP in the EU by 2040, increasing the potential EU GDP growth rate by about 0.07 points, with the creation of 3.2 additional jobs in 2040.

Finally, by summing up the progress in the EU’s innovation potential from 2007 to 2013 with those expected for the period 2014 to 2027 in the two scenarios analysed with the NEMESIS model, we obtain a rise in EU GDP of between 4.9% and 6.2% for 2040, an increase in the potential EU GDP growth rate of between 0.17 points and 0.23 points, and between 4.6 and 5.4 million new jobs.

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The policy brief will be added soon

I3U’s third newsletter released

I3U Newsletter 3

I3U Newsletter 3I3U – Investigating the Impact of the Innovation Union has just released their third newsletter. The newsletter announces the final conference and discusses the newest results of the project. It also details recent and upcoming presentations of the project throughout Europe, along with details on where its findings have been published.

I3U Newsletter 3 – June 2018

European Innovation Scoreboard 2018 launch event

European Innovation Scoreboard launch event agenda

European Innovation Scoreboard launch event agendaThe 2018 European Innovation Scoreboard will hold its launch event on June 25, 2018 at 14h30 at Breydel Auditorium – 45 Avenue d’Auderghem, 1040 Brussels.

The EIS, discussed in this I3U report, provides a comparative assessment of research and innovation performance of the EU and European countries. It allows policy-makers to assess relative strengths and weaknesses of national research and innovation systems, track progress, and identify priority areas to boost innovation performance.

This year’s Scoreboard reveals that the EU’s innovation performance continues to increase and that progress has accelerated in recent years. Since 2010, the innovation performance of the EU has increased by 5.8 percentage points, but progress is uneven. Performance has increased in 18 EU countries and decreased in 10. In a global perspective, the EU continues to improve its position vis-à-vis the United States, Japan, and Canada, but China is catching up at three times the EU’s innovation performance growth rate.

For more information or to register for the event: EC-EIS2018@ec.europa.eu

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