The « restructuring» of Research and Development Institutes Gilbert Nicolaon Kiev June 10, 2008

A « UNIVERSAL » CHALLENGE A gap between Research and Economy A gap between Research and Economy Limited impact of R&D on competitiveness Limited impact of R&D on competitiveness Limited cooperation between RDI and Industry Limited cooperation between RDI and Industry A challenge all over the world A challenge all over the world Most countries support R&D Most countries support R&D Gvts. expect to get R.O.I. from their R&D spending Gvts. expect to get R.O.I. from their R&D spending A UNIVERSAL CHALLENGE ALL OVER THE WORLD

A « WIDE » CHALLENGE RDIs have the technical competences RDIs have the technical competencesBUT Lack of essential competences to innovate: Lack of essential competences to innovate: Industrial links Industrial links Market experience Market experience Financial experience Financial experience Legal experience Legal experience EXTERNAL ASSISTANCE IS NEEDED

A « DOUBLE » CHALLENGE STRONG INCENTIVES ARE NEEDED Res. Scientists are not motivated to work with industry Res. Scientists are not motivated to work with industry Industry is not motivated to work with « academic » scientists Industry is not motivated to work with « academic » scientists

A 3 Partners cooperation Technological Institutes (RDIs) Technological Institutes (RDIs) Provide the appropriate technology services Provide the appropriate technology services National industry National industry Identify the market needs Identify the market needs Suggest important R&D topics Suggest important R&D topics The Government (Ministries, agencies..) The Government (Ministries, agencies..) Stimulate the process to boost the economy Stimulate the process to boost the economy Provide incentives Provide incentives Both ways (for Scientists and for Industry)Both ways (for Scientists and for Industry) Stable over long period of timeStable over long period of time

Push or Pull ?

Technology Push From the Lab to the market From the Lab to the market Idea of a scientist Idea of a scientist Limiting step : selling the idea (and the project) to industry Limiting step : selling the idea (and the project) to industry TOP DOWN Market Pull From market needs to the lab AND Back to market Need identified by industry Limiting step : Identifying the customer Identifying the need BOTTOM UP

Push or Pull ? Technology Push MarketPull Technology High to Med. Med. To Low Market? Well known Risk High to Med. Med. To Low Rate of Return High to Med. Med. To Low Success rate Low Med. To High

Push or Pull ? Market pull Market pull Will most likely give less « exotic » results but much faster and with a higher success rate Technology push Technology push Will most likely give more « fancy » results but it will take more time DO NOT NEGLECT MARKET PULL

Push or Pull ? High Tech is very « prestigious » High Tech is very « prestigious »BUT Traditional sectors industries offer a large market for technology Services Traditional sectors industries offer a large market for technology Services DO NOT NEGLECT TRADITIONAL SECTOR INDUSTRIES

RDI Restructuring

R.D.I. Restructuring A challenge all over the world for : Political reasons Economical reasons Financial reasons

R.D.I. Restructuring The ultimate goal is to : Build up strong links betwwen RDIs scientists and Industry Build up strong links betwwen RDIs scientists and Industry Integrate RDIs activity into national economy Integrate RDIs activity into national economyAND Provide private financial support for RDIs Provide private financial support for RDIs

R.D.I.Restructuring Governance Governance Management Management Funding Funding

Governance A managing board including representatives of Industry A managing board including representatives of Industry With decision making power With decision making power Which defines medium and long range strategy Which defines medium and long range strategy An executive officer (CEO) with an industrial background ? An executive officer (CEO) with an industrial background ?

Management Critical size R&D teams Critical size R&D teams On some « selected » topics On some « selected » topics Stimulation of team working Stimulation of team working Stimulation of interdisciplinary projects Stimulation of interdisciplinary projects Technical comitees associating some industry representatives Technical comitees associating some industry representatives

Management Human Resources Management Individual evaluation Individual evaluation On a yearly basis On a yearly basis Based on individual goals Based on individual goals Individual « financial » rewards Individual « financial » rewards Based on performances Based on performances Incentives to stimulate industrial links Incentives to stimulate industrial links

Management Encouraging communication Encouraging communication External (with industry) External (with industry) Internal (team work) Internal (team work) Ultimate Goal : Ultimate Goal : Publicly owned Publicly owned Privately managed Privately managed

R.D.I. Funding From 100% public funds From 100% public fundsTO Be « self-sufficient » Be « self-sufficient » New funding schemes are : A goal AND A tool

R.D.I.Funding Ex. : TNO The Netherlands Ex. : TNO The Netherlands Ex.Applied US Applied Univ. Centers Ex.Applied US Applied Univ. Centers (in the 80s) Ex.: ANR (French National Agency for Research) Ex.: ANR (French National Agency for Research) Funding of R&D based on « project »

R.D.I.Funding Ex. : F.P. 7th program: Ex. : F.P. 7th program: « Research for the benefit of Smes »(*) A few Smes (3 to 5) + Some RDI (R&D providers) For market oriented projects (*) Former CRAFT Program

Funding Indirect funding Cifre scholarships Cifre scholarships Technology « diagnostics » Technology « diagnostics » Public support for technology services to industry Public support for technology services to industry To hire specialized consultants To hire specialized consultants To prepare and file a patent To prepare and file a patent ……. ……. …… ……

Two « provocative » statements

Statement Nb.1 Working with industry will « degrade » my scientific level.

Statement Nb. 2 Local industry is very traditional and does not need advanced technology

Thank you for your attention Gilbert Nicolaon

Policy Exercise No. 1 Applied R&D policy In order to prepare the Ukrainian economy to compete in a free market, when Ukraine will join the E.U., the Minister of Economy asked you to suggest concrete, short and medium term, steps to stimulate RDI restructuring. Describe : processes, actors, measures, schedule…..

Policy Exercise Nb. 2 RDI Management You are the Director of an RDI. You are asked by the Minister to restructure your RDI in light of the forthcoming reform and budget cuts: to recommend 4 or 5 concrete measures to stimulate cooperation with Industry and to increase your revenues from « outside » sources. Management, Human resources, IPR,….