Policy Mixes towards increased R&D investments Positioning Bosnia and Herzegovina

1. Policy Mixes towards increased R&D investments Positioning Bosnia and Herzegovina in the European Research Area Mariana Chioncel JRC-IPTS Science, Technology and Innovation Policy Workshop Sarajevo, 29 January, 2010 http://cordis.europa.eu/erawatch/

2. Data Source ERAWATCH Policy Mix Country Reports 2009 Characterise and assess in a structured manner the evolution of the national policy mixes in the perspective of the Lisbon goals ERAWATCH Research Inventory: factual and descriptive information on national research systems, policies, structures and actors.

3. R&D Investment Targets in EU • March 2000 Lisbon European Council: • EU set itself the objective of becoming the most competitive and dynamic knowledge-based economy in the world (Lisbon Strategy). • ‘Knowledge triangle' - research, education and innovation a core factor in Lisbon Strategy • endorsed the objective of creating a European Research Area (ERA) • Barcelona, 2002: the goal of raising R&D intensity levels across the EU to 3% of GDP was announced. • This promoted the concept of holistic policy mixes aimed at raising R&D investment: • range of conventional research support instruments in combination with other policies and policy instruments affecting human resources, innovation activities, the supply of capital for R&D and innovation an the broad framework conditions affecting the development of R&D and innovation systems.

4. Routes to raise R&D Investment Levels Six formal routes: • Route 1: Promoting the establishment of new indigenous R&D performing firms • Route 2: Stimulating greater R&D investment in R&D performing firms • Route 3: Stimulating firms that do not perform R&D yet • Route 4: Attracting R&D-performing firms from abroad • Route 5:Stimulating R&D carried out in public-private collaboration • Route 6: Increasing R&D in the public sector.

5. Policy Mix Routes: 2009 Conclusions • The majority of countries appear to see all routes as at least of some importance. Most countries tend to have a broad policy mix • Most countries favour in terms of policy mix the best established solutions: • Route 2: Stimulation of R&D increases in already R&D performing firms • Route 5: The increase of extramural R&D carried out in cooperation with the public sector • Route 6: Increasing R&D in the public sector. Important for all the countries, except Israel (low importance, but 2007 GERD ~4.7%) • Policy making is more cautious with more ambiguous routes, where the influence of policy intervention is slow and uncertain: • Route 1: The establishment of new indigenous firms performing R&D • Route 3: Stimulating firms that do not perform R&D • Route 4: Attracting R&D-performing firms from abroad. • New member states have adopted a number of new measures related to Route 1 & 3 financed through Operational Programmes (Structural Funds).

6. EIS country classification European Innovation Scoreboard (EIS) provides a comparative assessment of the innovation performance of EU Member States. Innovation leaders: SE, FI, DE, DK, UK have innovation performance well above the EU average; Innovation followers: AT, IE, LU, BE, FR and NL, with innovation performance below those of the innovation leaders but above that the EU average. Moderate innovators: CY, EE, SL, CZ, ES, PT, GR and IT with innovation performance below the EU average. Catching-up countries: MT, HU, SK, PO, LT, RO, LV and BG have innovation performance well below the EU average.

7. Key policy priorities in the EIS country groups • R&D cooperation is the key policy priority for all European Innovation groups. • Innovation leaders • have priorities related closely to science policy (2, 3, 4) • focus much less on providing direct support for business R&D • Innovation followers: strong support to risk capital strategic policies Source: TrendChart-ERAWATCH database of support measures; European Innovation Progress Report, 2008

8. Catching-up countries • Provide finances directly to innovative private companies; grants for setting up new R&D companies and to stimulate R&D activities in firms that do not perform R&D provided under Operational Programmes (Structural Funds) • Market lacks financing tools for start-ups • Tax incentives aimed to stimulate in-house and extramural R&D activities • Route 4 is not favored, although the Foreign Direct Investment can play a significant role in private R&D in the new Member States. Factors that can open up Route 4: • Availability of skilled labour:creation of competence clusters • Efficient administrative system and good business environment • Strong support to collaborative public-private R&D projects and partnerships triggered by demand • "Catching-up" effect: high public R&D intensity increase after 2000, indicating that efforts have been considered to reach the Lisbon target. More emphasis to Research Infrastructures (RIs) than any other group.

9. Lessons learned Recent trends in public funding in MS: • Significant policy efforts to increase business R&D expenditures RISK: Allocation of public funds to R&D performed in the private sector can lead to the “substitution effect” instead of the desired “complementary-like effect” • In order to increase private RTD investment, it is in general more important to focus on • framework conditions(entrepreneurship culture, social capital and routine, public –private partnership possibilities, competition rules, etc.) • availability of human resources(recruitment conditions, match between demand and supply, etc) • Emphasis onexploitation of scientific knowledgethrough a better transfer to productive sectors or self-exploitation. • Use ofcombinations of different sources of fundingto support complex R&D activities (grants, loans, fiscal incentives and infrastructures).

10. European Research Area (ERA) Six ERA axes: • Labour market for researchers • World Class Research Infrastructures • Research organisations • Research programmes • Effective knowledge-sharing notably between public research and industry • International Science & Technology Cooperation

11. ERA: Labour market for researchers The ERAshould enable an adequate flow of competent researcherswith high levels of mobility between institutions, disciplines, sectors and countries. • Opening-up of recruitment of permanent research and academic positions to non-nationals • Attractiveness of research careers • Researcher-friendly social security, scientific visa for third countries, etc • Trans-national mobility. • Promotion of female researchers • Doctoral/Post-doctoral schools the bridge between the EHEA and the ERA. EC support mechanisms: • The European Researcher’s Mobility Portal • European Charter for Researchers and a Code of Conduct for the Recruitment of Researchers (2005) • The "scientific visa" package (2005) • Article 17 of regulation 1408/71 (Article 16 of Regulation 883/04)

12. Labour market for researchers: Innovation Leaders Common features • Attractive labour markets for researchers, especially for short term contracts; excellent RIs, well-known research institutions and a high remuneration level. • Difficult career path in universities and PROs. Short tem contract are the norm → brain-drain, in particular to the US (UK, DE). Yet, brain gain from other EU countries. • Promotion of female researchers particularly challenging → Specific measures to promote women in R&D • Balanced outward/inward flows. → Wide range of inward and outward mobility initiatives to increase international linkages. "Brain-gain" programmes • Removing barriers to the immigration of highly-qualified and highly-skilled persons (including new MS and third countries)

13. Labour market for researchers: Catching up countries • High"brain-drain"in some countries, aging R&D personnel. • Obsolete research infrastructure and limited work opportunities outside academia. • Academic staff - status of civil servants. Outdated legislation (i.e. competitionsopen just to nationals or require good knowledge of the national language). Difficult recruitment and promotion procedures. Positive Measures: • Revision of the national legislation • Low salaries, generally constrained to rigid regulations and budget. Positive Measures: • Possibility to withdraw money from research projects as personal income; • Financial bonuses aimed to encourage scientific excellence.

14. Labour market for researchersCatching up countries • High outflow, low inflow. Positive Measures: • PhD and post-doc fellowships stimulating inter-sectoral and international mobility; • Specific financing schemes for foreign researchers; • Reintegration grants - stimulating the return of renowned national scientists working abroad; • Development of Doctoral Programmes and Post-Doctoral Training • Support for participation of national research teams in international and European programmes • Good inherited political tradition regarding access of women to S&T fields. Positive legal framework, no evident gender stereotypes in the labour market and in the media, yet very present at cultural level • Rigid assessments for career progression → the negative time evolution trend of salaries for female versus male researchers. • No specific measures

15. Labour market for researchersCatching up countries The main push/pull factors determining the migration of researchers are: • job and career opportunities, • quality of RIs • a search for a positive working, political and social environment, • mistrust in the political class and the low life quality. “Better brain drain than brain waste"

16. Governing Research Infrastructures • “World-class research infrastructures should be built and exploited in the form of joint European ventures” • “Integrated, networked and accessible to research teams from across Europe and the world” • National policy objectives and strategies for accessing intergovernmental European infrastructures (CERN, ESRF,EMBL, ESA etc) • National Research Infrastructures Roadmap • National participation in the European Strategic Forum for the Research Infrastructures (ESFRI). The ESFRI Roadmap identifies new RI of pan-European interest corresponding to the long term needs of the European research communities, covering all scientific areas, regardless of possible location. CERN- European Organization for Nuclear Research ESRF – European Synchrotron radiation Facilities EMBL - European Molecular Biology Laboratory ESA – European Space Agency

17. Governing Research Infrastructures • Participation in inter-governmental RIs: • Around half of the countries have explicit strategies for joining international infrastructure. • Good practice: selective participation with explicit criteria and assessment of national benefits from these memberships (UK and Scandinavian countries) • Participation in ESFRI • Good practice: realistic assessment of national funding available and priority selection as a function of national needs and budgets. • Overenthusiastic reaction: national commitment to more projects than it is realistically likely to participate. • A third group is explicitly or implicitly distanced from ESFRI.

18. Governing Research Infrastructures • INNOVATION LEADERS • Operates a significant number of large infrastructures; • Heavily involved in existing inter-governmental RIs; • High budgets for enhancing the RIs: (i.e. DE € 1 billion a year until 2013) • CATCHING-UP COUNTRIES • Low involvement in the inter-governmental RIs (mainly CERN and ESA; Higher involvement in projects registered in the ESFRI. • In most countries the National RI development strategy still under preparation • Specific schemes for building up RIs (support from Structural Funds)

19. Research Organisations • The ERA green paper • Across the entire EU, diversified, excellent research institutions should be embedded in the social and economic national context, while competing and cooperating across Europe and beyond. • How much autonomy has been achieved in the university landscape so far? (measured by multi-annual programmes, degree of flexibility in management of research budget and on hiring personnel, and on the capacity to autonomously design research agendas and topics of research specialisation)

20. Research Organisations University autonomy is quite advanced. Most EU countries have started the modernisation of their research system in parallel with the adoption of the Bologna process. UK - model for good practice • Research Assessment Exercise – the mechanism which allocates University block funding for R&D activities • UK universities are autonomous bodies, with charitable status, and free to seek funding from a variety of sources. • Lately, greater emphasis on the 'Third Mission' of universities (greater engagement with businesses and local communities) • The university governing body responsible for the effective management of the institution comprises representatives of the regional and business community and of the student body, members of the academic staff.

21. Research Organisations Catching-up countries Catching-up countries • Autonomy guaranteed by legislation, but this also defines its boundary. • Rectors are generally academics, chosen by the universities’ Senate, and finally approved by the Minister of Education/President • Higher freedom for the recruitment of junior positions • Funding • Block funding in the highest proportion is allocated for education activities (according to the number of equivalent students); • Good practice: distribution of block funds for R&D activities according to the assessment of the scientific performance (Poland)

22. ERA: Research Programmes Research programmes → means to tackle the fragmentation in research efforts in Europe. MECHANISMS: The 7th European Framework Programme (FP7), other multi-lateral research programmes (i.e. COST and EUREKA) and bilateral international agreements to enhance mobility and bottom-up cooperation. Recently, steps towards the opening-up and co-ordination of national research programmes and funds.

23. FP7 7th Framework Programme for Research and Technological Development • Period: 2007 - 2013. • Total budget of over € 50 billion; 63% budget increase compared to FP6. • Activities funded from FP7 must have a “European added value”. • FIVE Specific Programmes: Cooperation, Ideas, People, Capacities, Nuclear Research COST - “European CO-operation in the field of Scientific and Technical Research” • COST Actions: networks centered around basic and pre-competitive research projects nationally funded in fields that are of interest to at least five COST countries. • COST funding covers the coordination costs while the research activities are supported through national funds. The ERA-NET Scheme provides a framework for actors implementing public research programmes to coordinate their activities; finances the costs related to the coordination.

24. ERA: Research Programmes • Learning and cooperating through the variety of opportunities offered is common practice. • ERAnets are very attractive programmes for trans-european cooperation. • Catching-up countries: lower participation in FP7 projects • The opening up of national programmes is much more scrutinised and selective.

25. R&D Situation in Bosnia and Herzegovina Education • Some progress (the Agency for Development of Higher Education and Quality Assurance, the Centre for Diploma Recognition. HE Law (July, 2007) • State education institutions face understaffing and limited funding. Research • Associated country in FP7 (January 2009). • Full member of the COST programme • The State Framework Law on Scientific and Research Activities, have been adopted (May, 2009) • There is no integrated research policy. Strategy 2010-2015 (draft) • Very limited budget allocations for R&D: 2008 GERD 0.07% of GDP (EU 27 ~ 1.84%, ranging from 3.86 (SE)÷ 0.39 (RO)) • Absence of statistical Agencies in BiH • Lack of relevant R&D data on EUROSTAT • Research policy is still designed and implemented at Entity level, with no real coordination. (EC, Progress Report, Nov.2009)

26. Business Environment in Bosnia and Herzegovina • Little progress in fighting corruption. • Limited reforms in order to improve the business environment. • The poor quality of public services and prevalent corruption negatively affect the business climate and the attractiveness of Bosnia and Herzegovina for investors. • The restructuring and liquidation of socially-owned enterprises has made only slow progress. • Limited progress in the area of industry and SMEs. • No comprehensive industrial strategy has been drawn up. (EC, Progress Report, Nov.2009) Doing business 2009

27. R&D Strategy Bosnia and Herzegovina Deep understanding of the state of-play of RDI national system, policy, governance. SWOT analyses, STI indicators Credible analytical capabilities and creative thinking in responsible Ministries and Agencies Co-ordination of policy efforts Involvement of stakeholders of STI activities in the exercise in a transparent way Society participation in policy design • Scientific output • Innovative companies • Employment in knowledge intensive sectors • Medium/High-tech manufacturing exports Development of the R&D Strategy IMPLEMENTATION EVALUATION Lack of RDI indicators; Absence of statistical Agencies in BiH Administrative structure: cumbersome, and in some cases fragmented, and prone to duplication. The civil service is still highly politicised and in need of professionalization (EC, Progress Report, Nov.2009) The government institutions continued to be affected by internal political tensions and fragmented and uncoordinated policy-making

28. R&D Strategy Bosnia and Herzegovina Stimulate the links in the system !! Networking among RTD and innovation actors, between public and private actors IMPLEMENTATION KNOWLEDGE PRODUCTION Knowledge flows KNOWLEDGE ABSORBTION • R&D Human Resources • Research capacity • Investment in R&D; Education policies: i.e. HE reform, life-long learning; Attractiveness of research careers • Innovative enterprises Improve framework conditions (entrepreneurship culture etc) • Competitive funding/excellence based funding • Finance collaborative inter sectoral projects • Use combinations of different sources of funding to support complex activities (grants, loans, fiscal incentives) RIS: Establish national priorities; Allocate money for RIs; Realistic evaluation of capabilities to participate in ESFRI and inter-governmental RIs

29. The optimum development of the RDI and education systems is a long process. It requires long term commitment, transcending political changes and interventions beyond the political rhetoric. Thank you for your attention !!