1. STATE AID REGULATION IN THE NANOELECTRONIC INNOVATION SYSTEM EU –SPRI 2012, Karlsruhe Clemens Blümel, Humboldt-Universität zu Berlin, Sven Wydra, Fraunhofer ISI, Karlsruhe

2. Structure First, describe the nanoelectronics and semiconductor field from a system of innovations perspective. Secondly, analyze how these functions and structures of the field are affected by state aid regulation scheme and Thirdly, outline which policy strategies exist in order to respond to these challenges.

3. Analyzing the Nanoelectronic Innovation system Innovation systems are defined by components, their relationships and the functions of the innovation system. Main components are: Actors, institutions and networks. Functions are: knowledge development, influence on the direction of search and legitimation (Bergek et al. 2008)

4. Analyzing the Nanoelectronic Innovation System Definition nanoelectronics: Use of functional characteristics of matter at the nano scale More moore, more than moore, beyond CMOS as the three main technology paths Broad spectrum of applications: Automobile industry, consumer electronics, machinery industry.

5. Technology paths in nanoelectronics ITRS 2010 More than Moore: Diversification More Moore: Miniaturization Combining SoC and SiP: Higher Value Systems Baseline CMOS: CPU, Memory, Logic Biochips Sensors Actuators HV Power Analog/RFPassives 130nm 90nm 65nm 45nm 32nm 22nm 16 nm. V Information Processing Digital content System-on-chip (SoC) Beyond CMOS Interacting with people and environment Non-digital content System-in-package (SiP)

6. Components of the Innovation System: I Actors Considerable differences in the presence of specific actor types according to the different fields (e.g. more moore, more than moore, beyond CMOS) More moore: large multinationals More than moore: medium sized and specialized chip designers Beyond CMOS: mainly public research institutes

7. Production capacities in Europe

8. Components of the innovation system: II Networks Networks between actors and institutions as conduits for knowledge sharing and accumulation Europe: Highly clustered industry concentrated on huge networks in few regions (Leuven, Dresden, Grenoble) Networks are often centred around key actors (large multinationals or research facilities)

9. Components of the innovation system: III Institutions …are sets of common habits, norms, routines, established practices, rules, laws that regulate the relations and interactions between individuals, groups and organizations (Edquist 1997: 46).

10. Components of the innovation system: III Institutions Roadmaps: standards and technical descriptions - ITRS (especially more moore path) Funding of the states: incentives for investment but also necessary for community building (technology platforms) Regulation schemes: state aid control (as a regulation scheme controlling states), environmental schemes

11. Functions of the innovation system: I Knowledge development Performance of IS in terms of knowledge base More moore: Knowledge development is specifically concentrated on new materials for enhancing further minituarization New wafer size changes standards knowledge about production and leads to industry innovations

12. Functions of the innovation system: Influence on the direction of search Incentives or blocking mechanisms: Belief in growth potential in nanoelectronics (consumer electronics, electric vehicle) Actors assessments of present and future technological opportunities formed by ITRS standard roadmaps have a huge impact on the direction of search in the more moore field Legislation and regulation

13. The effects of state aid regulation What is state aid regulation? State aid regulation as a filter for state intervention State aid regulations formulated in specific guidelines and communications for innovation policy: 1) R & D guideline 2) Multisectoral framework (now: Regional Aid Guidelines 2007-2013) State aid as an innovation policy instrument?

14. State aid regulation in Europe 1) R & D Guideline The aid intensity of R&D funding is of high importance for its impact Aid intensity shall not exceed 100 % for basic research, 50 % for industrial research, and 25 % for experimental development. Certain conditions (collaboration, SME participation) result in various bonuses and may raise the ceiling of maximum aid intensities. State aid regulation as an innovation policy instrument?

15. State aid regulation in Europe: Framework for regional aid Treats large investments primarily as an instrument of regional aid and tries to enforce the settlement of large investments in economically underdeveloped regions The ceilings for state aid are dependent on the structural weakness or strength of the region. Strong emphasis on the investment effect Important for investment decisions

16. Effects of state aid regulation in the nanoelectronic innovation system: 1) Networks (Components) Economically underdeveloped regions as the target of the MSF – opposing the needs of High Tech Clusters with skilled labor force 2) Knowledge development (Functions) Effects on investment decisions for innovations 3) Influence on the direction of search: Concentration on more than moore path in Europe?

17. Policy implications State aid regulation affects components of the innovation system such as networks and institutions Restricts capacity for the diffusion of knowledge and the capacity of policy to interact. Regulations need to be more technology/industry specific

18. Thank you for your attention! bluemelc@hu-berlin.de Sven.wydra@isi.fraunhofer.de