Innovation Governance in Ireland: the problem of coherence in a newly emerging NIS Rachel Hilliard CISC Seminar 11 November 2004

MONIT Project Background OECD project on National Innovation Systems redirecting innovation policy  interactive model Is it feasible that national governments and their policy making modes can remain largely the same?

Project Methodology 15 partner countries – cross comparison Innovation policy governance Case study policy areas: Info Society; regional; environmental  learn from efforts to develop national capabilities for innovation policy governance.

Innovation Policy Governance 1. STI performance 2. Policy challenges 3. Position of STI policy 4. National capabilties for innovation governance

Irish STI Performance

STI Profile Strong Employment in med/high tech manuf./services, inward FDI, S&E graduates, share innovative firms in services and manuf., labour productivity; value added Weak Patents, BERD, government funding of bus. R&D, publications, basic research, share of R&D in overall budget, business funded R&D at labs and HEI, tertiary education, participation in life long learning, knowledge investments, Profile: Strong company system, good overall performance, weak on knowledge system

Historical Context 1990largest per capita national debt in the world unemployment and emigration; stagnation  late industrialiser  stimulate the development of an NIS 1990sunprecedented growth, convergence 1993GNP/capita = 74% of EU average 2000GNP/capita = 97% of EU average

Problems of Convergence th in WEF Growth Competitiveness Rankings th in Growth Competitiveness Rankings % of trade = research intensive RTI generated abroad  technology taker

Technology Balance of Payments (as percentage of GDP), 2001

Profile of Industry and Innovation 330 firmsresearch performers firmsminimum capability 4000firmslow technology SMEs BERD: 73% of EU and 57% of OECD average 100 firms account for 80% of total R&D spend by business Continuous R&D performers: 20% of MNCs10% of indigenous

Policy Challenges  persistent challenges since 1982 competitiveness of indigenous industry embed MNC industry  sharpened focus develop a knowledge driven economy R&D based MNC activity high tech clustered indigenous industry

Challenges  STI Policy  capacity of research institutions to conduct relevant research  attractiveness to mobile MNC R&D  research capacity of Irish firms  pool of high-quality, technical graduates

Policy Mix: National Development Plan RTDI & Education€698m28% RTDI Infrastructure€777m32% RTDI & Industry€484m20% RTDI networks€267m11% RTDI & Natural Resources€227m8% RTDI & Environment€ 32m1% €2471m

Is there coherence in the Irish NIS? 1996 White Paper proposed STI coordination mechanisms 2002 Commission to examine develop proposals for innovation policy coordination mechanisms Largest investment in STI in history 2006of the state lacks coordination

1996 White Paper on Science and Technology need for (i) strong elements in NIS (ii) interactions between elements  Cabinet committee to consider STI supra-departmental STI budget junior minister linking two key departments proposals never implemented  no common commitment to STI investment  culture of departmental autonomy too strong

2002 ICSTI Commission on Policy Framework Report under review by Government Findings unpublished  chief scientific advisor independent of any department  cabinet committee to set priorities  disagreement about location/’control’  2004 proposals finally implemented

Ireland’s €1.3b STI Investment PRTLI Education & Science funding of universities’ own research strategies collaboration between universities infrastructure-focus SFI Enterprise Trade & Employment funding of excellent research in nationally strategic areas collaboration with industry research based

Implications initiated as 2 unconnected policies PRTLI  private donor aiding 3 rd level SFI  strategic identification of ICT/BioT timing  infrastructure decisions preceded research teams awards differing budget commitments SFI maintained budget when PRTLI ‘paused’

Why does the Irish system lack coherence? maturity? political culture? commitment to the innovation agenda?

Maturity  newly evolving NIS  first STI policy – 1996  first significant investments in 2000 STI for €2.5b STI for €0.5b

Political Culture? ‘everyone in Ireland believes in coordination, but nobody wants to be coordinated’ Department of Finance - strong formal/actual control Departmental Autonomy Limited use of cross-cutting approach to policy  only in response to high-profile priorities (crisis?) eg: infrastructure; drugs

Commitment? Narrow commitment to the innovation agenda:  Enterprise Trade and Employment Ministry = the innovation champion  logic of NIS approach has limited acceptance  failure to persuade wider polity of (i) priority; (ii) potential gains; (iii) costs of failure

Any evidence of good coordination? Around specific external/common issues  Bottom-up work on STI framework conditions: contracts; IP terms; researcher career paths  implications of the Lisbon Agenda  European Research Area Chief Scientific Advisor 2. Knowledge Society Foresight

Conclusions Administrative culture Political imperative for innovation agenda Late industrialiser – emerging NIS Future developments?