Title of Presentation Subtitle/other information 1 EU-ASEAN S&T cooperation to jointly tackle societal challenges Economic integration and framework conditions for innovation: Contrasting ASEAN and EU Svend Remøe, RCN Alex Degelsegger, ZSI

Economic integration and framework conditions The SEA-EU-NET analysis work EU Framework Programme participation analysis STI country profiles Bibliometric and co-patenting analysis Innovation support and framework conditions analysis – Material Transfer Agreements – Public procurement for innovation – Intellectual property How does economic integration facilitate innovation? – How are framework conditions for innovation affected by economic integration? – What can be learned from contrasting EU and ASEAN? – What is the role and potential of IP in framework conditions? 2

Expected impacts Economic integration is likely to improve the framework conditions for innovation through a more level playing field and competitive pressures – Reduction or removal of trade barriers – Harmonized product regulations etc – Increased but different competition across sectors Economic integration may lead to subsequent adaptations and processes in the innovation landscape – Increased cooperation between knowledge institutions – Improved knowledge markets – Depends on R&D and innovation intensity Better protection of intellectual property may be expected – Both regions are pro-patent – IP are key ingredients in AEC and Single Market Programme – Generation/protection becomes more important for domestic as well as for foreign companies 3

ASEAN Economic Community and the Single market Programme The AEC is being completed in its current stage in 2015, but differs greatly from the EU Single Market Program Single Market in Europe initiated at the inception of EU, but formalized in 1986 Reforms and degrees of integration depend on degree of supra-national governance Key differences in non-tariff barriers, movement of people, competition policy, standards 4 Source of figure: Woetzel et al Common currency not included in Single Market Programme

Delivering tariff reductions 5 Source: OECD 2015, based on ASEAN tariff database.

Impact on industrial sectors 6

Trade is important, but… Integration needs a broad agenda for flexible movement and utilization of resources (Capital, Services, Labour, etc) Increased competition leads to innovation pressures – Absorptive capacity and boosting knowledge in enterprises a prerequisite Collaborative research and innovation is key! – Collaborative institutions and programmes have boosted the innovation impact from the EU Single Market Programme – More attention to Intra-ASEAN cooperation is needed – Programmatic initiatives expand networking and integration 7

Innovation performance and openness of R&D systems 8 Source: ERA Progress report, facts and figures, 2014

Exploiting the competition-collaboration symbiosis ASEAN University Network and higher education in general in AEC is key to collaborative development – Including nurturing of the «third mission»: innovation and industrial development – Developing indicators for intra-ASEAN cooperation? Public Research Organizations (PRO) often too nationally oriented, need incentives for ASEAN-wide cooperation Promotion of light-footed schemes – COST in Europe : Trans-European networking of nationally funded research activities – Collaborative multilateral funding schemes (like in SEA-EU-NET) 9

Main messages Economic integration provides pressures on innovation – If pushed to the potential Both regions develop STI as part of economic policy and integration – Competition and collaboration go hand in hand STI-integration is therefore crucial: – Free flows of skilled people: Unlock limitations in labour markets – University cooperation – Public research organizations are often more closed, need for reforms? – Dedicated framework condiitions 10

Issues The big questions: – Both regions have a productivity challenge, which balance between competition and collaboration is most useful to stimulate productivity and growth? – To what extent can cooperative programmes and institutions compensate for lack of integration and competition in a regional market? What are the best options for ASEAN-EU cooperation in this respect? – Joint Funding Scheme and beyond – Building on the European Research Area: Bypassing big-budget programmes – ASEAN Research Area for knowledge markets for interaction and productivity 11

IP and innovation Framework conditions for innovation as one element in addressing the productivity challenge Intellectual property regimes as dedicated framework conditions for innovation Types of potentially innovation-relevant IP: – Patents – Utility models – Trademarks – Copyrights – Trade secrets A closer look at patents and innovation: a system of healthy competition resulting in a pool of knowledge ready to be used? 12

IP and innovation Patenting is on the rise, especially in Asia Patent filing by region of receiving office: 13 Source: WIPO 2015

Patents and innovation Most ASEAN and EU countries have pro-patent IP regimes In ASEAN, especially Malaysia and Singapore have invested heavily in promoting patent output – upgrading patent offices, publicly supporting PCT applications Other countries also work on the IPO infrastructure (modernising procedures, training examiners, etc) and put legislation in place. In addition, IP requirements are part of a number of free trade agreement negotiations However, we know that increasing patent output is not enough 14

Patents and innovation Challenges: Turning patents into social and economic value Returns are concentrated on few patents Defensive filing Preconditions for the efficacy of stronger patent regimes in emerging economies: absorptive capacities innovation financing access to foreign markets and public research capacities 15

IP and innovation 16 Source: WIPO 2015 Public sector ownership of patents is a characteristic of Southeast Asia Distribution of PCT applications by type of applicant

Patents and innovation Additional issues in public sector patenting: Appropriate reward and valorisation systems for researchers/entrepreneurs Costs of patent portfolios Justification of risk investments/public backing of IP collaterals IP and cooperation 17

Southeast Asian patent regimes Both weak and strong patent regimes can be a challenge for international research cooperation – for different reasons – Strong regimes can make it less attractive for foreign researchers to collaborate – Weak regimes make it risky to create IP that is then not protected International research cooperation will get more important balance required use and adaptation of existing models exchange of best practices 18

Southeast Asian patent regimes Importance of cooperation at policy level speeding up procedures avoiding fragmentation within ASEAN dealing with IP portfolio investors/patent trolls dealing with FTA requirements, etc innovation activities and taxation competence/transfer pricing ASEAN Working Group in IP Cooperation as a model? ASPEC fast tracking procedure Bilateral agreements 19

Main messages - revisited STI-integration is crucial for balancing competition and collaboration: – Free flows of skilled people: Unlock limitations in labour markets – University cooperation – Dedicated framework condiitions – Public research organizations are often more closed, need for reforms? Bypassing big-budget programmes for joint actions to be ahead of AEC – ASEAN Research Area for internal knowledge markets for interaction, flexibility and productivity!? – AWGIPC model as a suitable model of light-footed regional cooperation also in other areas beyond IP and coordinated with ASEAN COST 20

Issues The big questions: – Both regions have a productivity challenge, which balance between competition and collaboration is most useful to stimulate productivity and growth? – To what extent can cooperative programmes and institutions compensate for lack of integration and competition in a regional market? – Is there too much focus on IP-related issues in innovation cooperation? And: What are the best options for ASEAN-EU cooperation in this respect? – Joint Funding Scheme and beyond 21

Thank you for your attention! 22