The Position of Europe in S&T (2)

4. The Position of Europe in S&T (2) • Output indicators such as number of publications or patents, or volume of high tech trade are useful but give only a partial picture. Measuring the efficiency of the innovation process constitutes an extremely difficult task. • The issue is further complicated as innovation in one country or group of countries results increasingly from R&D performed outside

9. The Actors of Innovation: the « Quadruple Helix » • Four main actors interacting dynamically between themselves in the various steps of the innovation cycle:”the quadruple helix” -The State -The Science & Technology Community -The Industry -Society at large • For each step of the cycle represented in the next diagram, preeminence between the actors varies

10. Creation or acquisition of Knowledge Creation of wealthRefinancing of S&T Translation into generic technologies Regulatory framework Conception of newproducts, processes, etc Industrial Application Matching Offer and Demand Expression of Demand The various steps of the innovation cycle

11. Steps of the Innovation cycle and their actors (1) • The creation or acquisition of knowledge :S&T Community with the support of the State; upstream of scientific activities, education is essential • The translation into generic technologies :S&T Community,State and large Industries • The conception of new(or improved) products,processes and services : heart of the Innovation process; S&T Community and Industry together with help of State

12. Steps of the Innovation cycle and their actors (2) • The expression of a demand :to beperformed in parallel with steps above, relying on economic and social components of Society. State should participate in this expression for meeting its own needs • The matching of offer and demand : nodal point ofthe entire process,involving all four actors • The industrial application of new concepts: essential role of Industry

13. Steps of the Innovation cycle and their actors (3) • The establishment of a regulatory framework :pre-eminenceof the State, increasing role of Society in terms of public acceptance • The refinancing of S&T :part of the wealth created should be re-injected both by State and Industry in the S&T Community and in their own S&T components Which are the issues governing the evolution of the links between these 4 actors?

14. New structures , new interfaces for Innovation in the next Century The main issues: • The future role of the State in industrial R&D • The restructuration of State R&D organisations • A new organisation of R&D in Industry • An increased role of the higher education institutions in innovation

15. The State and Industrial R&D (1) • Should the intervention of State in industrial R&D continue as in the past , notably through government led industrial R&D programmes? • Should it rather shifts its emphasis towards • interdisciplinary thematic programmes ranging from Science to Innovation:``key actions``? + Probably yes, but specific technological areas such as aeronautics still require its intervention • indirect fiscal measures? + Not always

16. The State and Industrial R&D (2) • availability of venture capital? + Definitely yes • an adequate regulatory framework? + Definitely yes • provision of most of the science base required for industrial development? + Yes, except when large private firms do take care of it • adequate training and retraining for generations of industrial researchers? + Yes with the assistance of industry • support to non profit applications of industrial products? + Definetely yes (e.g. for orphan drugs) • stimulation of the demand through public procurement? + Yes

17. Reorganizing Public R&D Structures • Should a reorganisation of public R&D structures occur? There is no clear cut answer • Should R&D structures be preferably located within Universities or Research Institutes? The CNRS in France and most of the Academies of Science in Eastern Europe are at the heart of such a controversy without a clear cut answer • Should Governments own/operate R&D centres? The answer should be yes, provided that these centres concentrate their activities - apart from defence work - on regulatory R&D, on highly specialised research, on test facilities, and act as focal point for specific advanced generic technologies

18. R&D in Industry • Most of the research initiated by industry is the responsibility of large industrial groups as well as of small high tech entreprises • The more conventional SMEs are users of R&D results, rather than actors • The concentration of large industrial firms in even larger megagroups and the new openess of the University towards industrial problems have changed the traditional scenery. The reinforcement of links between industry and public research is shown in the following diagram. Further, three cases illustrate the current evolution

20. Offshore R&D at SIEMENS (1) • Siemens has 5 corporate R&D centers worldwide: Munich,Erlangen, Berlin, Roke Manor and Princeton • Siemens Corporate Research (SCR) in Princeton has been created in 1977. It now hosts 150 research scientists and engineers • SCR acts as a global centre of competence for 4 core technologies: software engineering, imaging and visualisation, multimedia/video technology, multimedia documentation

21. Offshore R&D at SIEMENS (2) • Through joint research programmes with US leading colleges and universities such as Carnegie Mellon, U.of Pennsylvania, John Hopkins, Princeton, SCR benefits from leading-edge research in highly specialised fields performed in university environments • SCR created in 1999 the Siemens Technology-To-Business (TTB) Centre located in Berkeley, for rapidly incubating innovative technologies in viable products and businesses. Collaboration with UCBerkeley and venture funding communities in the Bay Area is fostered

22. Offshore R&D at SIEMENS (3) • Two exit strategies are envisaged for TTB projects: a) integration into the Siemens organisation as a new product or business venture (spin-in), or b) creation of an independent business (spin-off) • Hot projects at SCR: • Web Tour, a Web-based Internet/ Intranet application • Speech Web, converting HTML pages into voice • CyliCon, an augmented reality programme • CT colonography software • HotStreams, a « smart » filter technology

23. R&D at GlaxoSmithKline (1) • A Megamerger operation is leading to a drugs giant of 100 000 people in 60 countries, with market valuation of 186 Billion$ • The plan is for spending 3.4 Billion$ in 2001 on drug development, using 15 000 scientists • The fear of giganticism has led to the decision to split research effort into 8 profit centres. Individual business units will have to compete for funds internally and eventually from external sources (venture capital firms)

24. R&D at GlaxoSmithKline (2) • Individual business units will have to pay GlaxoSmithKline for services such as use of technology and will pass promising projects on to the corporate level. Less promising projects will be sold or terminated • Research will be broken down according to therapeutic areas such as asthma, anti-virals, cancer

25. R&D at Pfizer (1) • Pfizer, having absorbed Warner-Lambert, is another giant of the drugs industry, with the largest R&D budget i.e. 4.5 Billion$ in 2001 • Pfizer has decided to perform initial research in 8 separate so-called discovery centres in order « to maintain the excitement of a small discovery outfit » but will run development on a single site « where economy of scale really matters ». This represents a different approach from GlaxoSmithKline

26. R&D at Pfizer (2) • Pfizer claims that drugs companies with much smaller R&D budgets would stuggle in the post-genomics environment. The Pfizer president asserts that « clearly you can’t operate a competitive organisation with 500 Million$ { in R&D budget } « 

27. Lessons from the three cases • Gigantism of R&D budgets, leading to decentralisation of corporate R&D • Organisation based on products or technologies, not on scientific disciplines • Links with academic world, desire to be visible from a scientific point of view • Strong preoccupation about fast innovation • Open to external financing • Emphasis on spin-in (corporate level) or spin-off (selling to the outside)

28. Higher Education Institutions and Innovation (1) Higher Education Institutions (HEI) face significant challenges in the next century: • Cope with the accelerated obsolescence of knowledge; in certain areas, the « half life » of acquired knowledge does not exceed 5 years • Take into account the new knowledge paradox, i.e. the requirement for more interdisciplinarity coupled with the need for deeper specialised knowledge

29. Higher Education Institutions and Innovation (2) • Meet the increased demand of a Society in constant learning for more education and training • Such demand is particularly acute in the area of Information Technologies and their applications • Respond to a societal demand for a greater role in the overall cycle of knowledge i.e. creation of knowledge (R&D), transmission of knowledge (education and training), exploitation of knowledge (innovation)

30. Higher Education Institutions and Innovation (3) • Respond to the challenge of globalisation. Universities have always had an international dimension but there was not a strong competition among them as experienced to-day

31. Higher Education Institutions and Innovation (3) In order to respond adequately to these new conditions, the higher education institutions will have to solve several important issues: • How to introduce interdisciplinarity while keeping excellence in specialised fields? The answer is NOT in destroying strong research and education in specific disciplines, in replacing it by a diffuse multidisciplinary magma. Focused knowledge is still imperatively required as a building block for interdisciplinarity

32. Higher Education Institutions and Innovation (4) • How to take care of lifelong learning? The challenge is quantitatively important in view of the current low level of retraining or constant training (see next table) and qualitatively significant. New training methods should aim at teaching people how to learn by themselves

33. Higher Education Institutions and Innovation (5) • From IPTS Report, July 2000, source: survey EUROSTAT: Percentage of adults having followed a training in the 4 weeks preceding the survey: Danemark 11,8% Italy 1,9% Sweden 11,7% Spain 1,7% Finland 10,7% Belgium 1,7% Netherlands 8,6% Luxemburg 1,5% United Kingdom 7,4% Portugal 1,4% France 1,3% Greece 0,3% Average European Union 3 ,6%

34. Higher Education Institutions and Innovation (6) • How to play a greater role in the knowledge cycle, in particular in innovation? • How to be to an actor on the international scene while at the same time responding to national, regional or local needs? • How to share the burden of the new tasks between the different structures of higher education? Is there a new distribution of tasks desirable, foreseeable? The various functions of HEI should guide the answer

35. Higher Education Institutions and Innovation (7) • Before performing such analysis, it is essential to recall the need for institutional integrity. The worst response would be in attempting to do everything, everywhere and in the same manner, under the false pretext that it responds to a strong societal demand • What should be achieved is a functional stratification of all types of HEI, flexible, capable of adapting to the evolution of the demand, based on synergies but respecting the identity of the various actors

36. Higher Education Institutions and Innovation (8) • The United States offer a good example of functional stratification of their Higher Education system, as illustrated by the classification performed by the Carnegie Foundation for the Advancement of Teaching: • 90 Research Universities • 3706 other Higher Education • 6256 Vocational Training • Any attempt to translate such a model to other countries should take into account the differences in education level achieved in the various countries, as shown in the following diagram