Evidence-based policymaking for innovation, competitiveness and industrial modernisation

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1 Evidence-based policymaking for innovation, competitiveness and industrial modernisation Romania's performance in the European Innovation Scoreboards and related analyses Daniel W. BLOEMERS, European Commission, GROW.F1 6th Romanian National Cluster Conference Bucharest, 22 November 2017

2 How to make Europe's industry stronger? smart innovative sustainable

3 Romania: a "Modest Innovator"

4 European Innovation Scoreboard Comparative assessment of EU innovation performance Member States, regional neighbours, global benchmarks Published annually since 2001, refined in 2017: Investments, skills, digital readiness, entrepreneurship, public-private coop. Contextual indicators (structural differences between territories) Reference for European Semester and national policies

5 EIS 2017: performance indicators

6 EIS 2017: contextual indicators 23 indicators for comparison of European and neighbouring countries Share of business R&D expenditures by enterprise size 1 to 9 employees 10 to 49 employees 50 to 249 employees 250 employees or more EU Structure of the economy Composition of employment, average Agriculture & Mining (NACE A-B) (%) Manufacturing (NACE C) (%) 15.6 of which High and Medium high-tech (%) Utilities and Construction (NACE D-F) (%) Services (NACE G-N) (%) 63.6 of which Knowledge-intensive services (%) Public administration, etc. (NACE O-U) (%) 7.1 Business indicators Composition of turnover, average Micro enterprises (0-9 employees) (%) SMEs ( employees) (%) Large enterprises (250+ employees) (%) 44.1 Share of foreign controlled enterprises, 2014 (%) 1.18 Top 1000 R&D spending enterprises - average number per 10 mln population, average R&D spending, mln Euros, Enterprise births (10+ empl.) (%), avg Buyer sophistication 1-7 (best), Ease of starting a business, DB Socio-demographic indicators GDP per capita, PPS, avg Change in GDP between 2010 and 2015, (%) 5.4 Population size, avg (millions) Change in population between 2010 and 2015 (%) 1.1 Population aged 15-64, avg (%) 66.1 Population density, average Degree of urbanisation, average (%) 74.4

7 EIS 2017: EU country ranking (Summary Innovation Index) Since 2010: EU +2.0% (15 MS, 13 MS ) LT +21.0%, MT +12.2%, UK +11.7%, NL +10.4%, AT +8.9%, LV +8.5%, SK +8.0% RO -14.1%, CY -12.7%, FI -5.1%, DE -3.7%, EE -3.6%, CZ -3.5%, HU -3.5%

8 EIS 2017: extended country ranking (Summary Innovation Index)

9 EIS 2017: strengths and weaknesses of the Romanian innovation system Romania Performance relative to EU 2010 in Change SUMMARY INNOVATION INDEX Human resources New doctorate graduates Population with tertiary education !! Lifelong learning Attractive research systems International scientific co-publications Most cited publications !! Foreign doctorate students Innovation-friendly environment Broadband penetration Opportunity-driven entrepreneurship Finance and support !! R&D expenditure in the public sector !! Venture capital expenditures Firm investments ! R&D expenditure in the business sector !! Non-R&D innovation expenditures !! Enterprises providing ICT training Innovators !! SMEs product/process innovations !! SMEs marketing/organizational innovations !! SMEs innovating in-house Linkages !! Innovative SMEs collaborating with others !! Public-private co-publications !! Private co-funding of public R&D exp Intellectual assets PCT patent applications Trademark applications Design applications Employment impacts Employment in knowledge-intensive activities Employment fast-growing enterprises Sales impacts Medium and high tech product exports ! Knowledge-intensive services exports !! Sales of new-to-market/firm innovations

10 Regional Innovation Scoreboard 18 of 27 EIS indicators 220 regions in 22 MS + NO, RS, CH Most innovative EU regions: Stockholm (SE), Hovedstaden (DK), South East (UK) Since 2011: 128 regions, 88 regions

11 Regional differences in performance

12 Source: Regional Innovation Scoreboard 2017 Tertiary education

13 Public R&D expenditure Source: Regional Innovation Scoreboard 2017

14 Business R&D expenditure Source: Regional Innovation Scoreboard 2017

15 Product and process innovation Source: Regional Innovation Scoreboard 2017

16 Source: Regional Innovation Scoreboard 2017 Employment

17 Source: Regional Innovation Scoreboard 2017 Exports

18 Analytical resources industry/innovation/ facts-figures/scoreboards_en

19 European Semester Country reports Country-specific recommendations complementary resources, e.g. Research and Innovation Observatory (RIO) country reports

20 Romanian innovation performance - Interlinked policy challenges - Skills Innovation Investment Governance

21 Policy challenge: Skills Lack of basic and digital skills Unfavourable demographics and emigration Brain drain due to underfinancing of R&I system Limited supply of skilled workers Negative impact on investment decisions Ambitious labour market reforms in 2016: potentially favourable effect on growth and economic development, if fully implemented Sources: European Semester Country Report 2017 Research and Innovation Observatory Country Report 2016

22 Policy challenge: Investment Increasing, but still very low R&D intensity Only 3.4% of EU Structural Funds allocated for R&I (EU: 10.6%) Corporate tax deduction for R&D expenditure still to gain track Need to increase public R&I spending Need to improve framework for private R&I spending Sources: European Semester Country Report 2017 Research and Innovation Observatory Country Report 2016

23 Policy challenge: Governance Structural shortcomings of R&I system Insufficient and unpredictable funding Institutional fragmentation Weak public-private collaboration Need to build synergies between science and industry Establishment of National Council for Science, Technology and Innovation Policy may be important step forward Sources: European Semester Country Report 2017 Research and Innovation Observatory Country Report 2016

24 The road ahead EIS 2018, EIS 2019, RIS 2019: Performance indicators: no replacement but fine-tuning Contextualisation: review of indicators + qualitative data Forward-looking EIS section: exploration of Big data Improved Interactive Online Tool EIS 2020: complete review of measurement framework New policy priorities of Commission Results of methodological work, possibly including Big data-based indicators Community Innovation Survey 2018 data RIS 2021: regionalisation of EIS 2020 methodology

25 Thank you for your attention! Daniel W. BLOEMERS, Policy Officer European Commission GROW.F1 Innovation Policy and Investment for Growth Tel.: ( ) 64992

26 BACK-UP

27 EU performance change

28 RO11 Nord-Vest: Modest - Innovator

29 RO12 Centru: Modest - Innovator

30 RO21 Nord-Est: Modest - Innovator

31 RO22 Sud-Est: Modest - Innovator

32 RO31 Sud-Muntenia: Modest - Innovator

33 RO32 Bucuresti-Ilfov: Modest + Innovator

34 RO41 S.-V. Oltenia: Modest - Innovator

35 RO42 Vest: Modest - Innovator

36 Indicator selection criteria Relevance for policy-making Rapidly changing innovation megatrends, practices, and framework conditions Quality Analytical soundness Reliability Transparency Comparability Between countries Over time Timeliness

37 Joint effort Member States external experts contractor European Commission policy departments (GROW & RTD) Eurostat EC Joint Research Centre

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40 Integration of industrial and environmental policy.

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