Meeting the Needs of Research and Innovation of the Private Sector:

1. Meeting the Needs of Research and Innovation of the Private Sector: The Malta Chamber’s Perspective by Malta Chamber President David G. Curmi Friday, 7th February 2014

2. Agenda • Global Innovation • Where does Malta stand? • What are the needs of the Private Sector?

3. 1. Global Innovation

4. Innovation in Textbooks • Innovation: Government’s many roles in fostering innovation. • Tax Policies • Legal Policies • Fiscal Policies • Country Analysis: Comparative analysis of polices in 15 different countries.

5. Innovation in Entrepreneurship

6. Innovation in Entrepreneurship What do we do next ? To paraphrase Oscar Wilde, we need to believe in the impossible. (SatyaNadella, newly appointed CEO at Microsoft. FT 5 February 2014) • 46 years old. • 3rd CEO at Microsoft in its 39 year history. • Selected from over 100 potential candidates including Ford’s CEO and Oracle’s President. • Base Salary $1.2m total package $18m.

7. Innovation is a mindset

8. Innovation is a Mindset Case Study 1- Hyundai 1975: Pony “…like a Honda Civic built in a back alley by an inebriated blacksmith” Canada’s Globe and Mail Source: Financial Times, January 2014

9. Innovation is a Mindset Case Study1 - Hyundai • 5th largest global car manufacturer • Switch from growth to profitability • Focus on R&D • Focus on brand development “It doesn’t rattle. BMW can’t do this. We can’t do this.” CEO VolksWagen Source: Financial Times, January 2014

10. Innovation is a Mindset Case study 2 – HollySys Mechanical & electrical solutions Rail transportation Industrial automation • Control and safety systems • Culture driven by R&D • Profits over growth • Winning contracts outside of China • Chosen as sole supplier of control systems to Hong Kong and Singapore underground and rail systems. Source: HollySys website, September 2013

11. The importance of Innovation Total domestic R&D expenditure € per capita Emerging markets have yet to embrace R&D… Source: Goldman Sachs International, November 2013. Data as at 2010 or latest available

12. The importance of Innovation Number of patents by area of residence In ‘000s ...however, China is playing catch up Source: World Bank, November 2013

13. Some Global Stories • The number of Chinese students currently enrolled in U.S. colleges and universities = Population of the Maltese Islands. • ASEAN – (association of 10 Southeast Asian Nations) 620 million people, $2.2 trillion GDP, the most important 21 Century global growth engine. • 57.4% of patents registered by Microsoft named immigrants as inventors of the patent. • China has recognized the importance of patents and is now registering more patents then the U.S. • 4% of the world’s entrepreneurs create 40% of its wealth. • The playing field in terms of cost is levelling out fast – investment will ultimately go to countries that innovate.

14. 2. Where does Malta stand?

15. Where does Malta stand? (1) • According to the latest Innovation Union Scoreboard 2013, Malta remains a moderate innovator with a below-average performance. • Malta holds one of the lowest number of tertiary science and technology (STEM) graduates in Europe, with an average of 3.1%. • Growth rates were seen in relation to: • new doctorate graduates (+16.9%); • community trademarks (+16.6%); • SME’s introduction of innovative products and processes (+19%).

16. Where does Malta stand? (2) • In relation to financing and support, we are still lagging behind other member states due to the non-existence of equity finance. • In 2012 Malta’s expenditure on R&D is 0.84% of GDP (EU 2020 target 0.67% but this will be increased to 2%). • Very little progress is seen with regard to the entrepreneurship and intellectual assets indicators, such as: • In-house innovation; • Collaborative projects between innovative SMEs; • Registration of community designs; • Patent Cooperation Treaty (PCT) patent applications.

17. Where does Malta stand? (3) • The Malta Chamber RTDI Committee has: • successfully evaluated the local situation; • formulated a strategic document which points out what urgently needs to be done. • The Committee is composed of representatives of the sectors of: manufacturing; ICT; legal consultancy.

18. Where does Malta stand? (4) • An extensive document entitled ‘Meeting the RTDI Needs of Industry’ was drafted by the Chamber’s RTDI Committee. • This is segmented into the following eight sections: • Innovation Management Techniques; • Research and Development Processes; • Education Preparedness; • Links between Academia and Business; • Innovation Value Chain and Infrastructure; • Access to Finance; • Technology Transfer and Licensing; • Intellectual Property Rights.

19. 3. What are the private Sector’s needs?

20. What are the needs of the private sector? (1) • A country and politicians that think Global. • A renewed focus on research and innovation. • Restore trust and confidence in business – restoring trust is critical to growing economies. • More support for start-ups. • Accelerate the development of high impact entrepreneurs and visionaries. • Source global talent. • Encourage talent mobility.

21. What are the needs of the private sector? (2) • The Malta Chamber calls for the importance that in the new programming period all EU member states allocate a higher share of their structural funds to: • R&D; • innovation; • education; • infrastructure. • The issue of industry-academia linkage has been debated for a long time. • The Malta Chamber suggests University researchers are given the required flexibility for direct postings in local enterprises. • The Malta Chamber believes in promoting partnerships between industry, academia and foreign institutions.

22. What are the needs of the private sector? (3) • Education and skills are key enablers for innovation to flourish in enterprises. • Investment in R&D is to be coupled with a long-term strategy preparing our future generations with the required skills. • The Malta Chamber believes that there needs to be an integrated approach and converging instruments to transform innovative ideas into marketable solutions: • - Introduce programmes that promote seed funding for research-based projects. - Focus on the need for funding programmes to sustain R&D under the new EU programming period 2014-2020. - Highlight the need for appropriate funding programmes under the MCST National R&I Programme.

23. What are the needs of the private sector? (4) • The Malta Chamber looks forward to the introduction of the Horizon 2020 package in Malta. • This is the EU’s biggest ever research and innovation programme. • We are satisfied that the Commission has taken a new approach and has introduced the brand-new SME funding instrument. • Intellectual Property Rights are what gives investors and creators not only the protection they deserve, but also the main tool with which to capitalise on their creations. • We propose to join the existing efforts by the Industrial Property Directorate to raise awareness of intellectual property rights at a local level.

24. “The people who are crazy enough to think they can change the world are the ones who do.” Apple “Think Different” Commercial 1997

25. Thank you