RIS3 in context of Europe2020: Case of Latvia

RIS3 in context of Europe2020: Case of Latvia Smart Specialization Strategy: New Approaches for Partnerships among Education, Research and Industry in Regions February 12, 2015

Outline 1) RIS3 challenge for Modest Innovators 2) Outcomes of RIS3 process 3) Implementation and monitoring 2

RIS3 challenge for Modest Innovators: Target of 3% R&D investment The Core (Innovations Leaders): Fewer in numbers Higher prosperity Combination of scale and diversity Higher international connectedness Agglomeration advantages: learning, sharing and matching of agents, actors and activities, and opportunities for the pooling of financial risk across sectors and firm types The Non-core (Modest, Moderate and Followers): Larger in numbers Lower prosperity Higher industry specialization Higher local embeddedness Small market potential 3

(Foray, David and Hall, 2009) RIS3 challenge for Modest Innovators: Logic of Concept Facts (McCann and Ortega-Argilés, 2011): 1) Higher levels of entrepreneurship and innovation are observed: In cities and more densely populated regions; In more sectorially diversified regions; In regions less dominated by small number of large firms; In regions with large numbers of internationally-engaged multinational companies In regions with large market potential 2) Adaptation and application of ICTs across of wide range of industries have exacerbated the differences between core and none-core regions Challenge - finding RIGHT answers to following questions: 1)Why concept with internal logic that favors core-regions is applied as a cohesion policy tool? (Potential economic gains can be achieved from small incremental improvements across a range of non-core regions) 2) Should policy spread public R&D investment (thinly) across several frontier technology research fields? (YES? NO? Probably) 3) Should policy concentrate public R&D investment in programs that create future domestic capability and interregional comparative advantage? (YES? Certainly yes) 4

RIS3 challenge for Modest Innovators: Our answer Treating RIS3 as a process and devising a hybrid strategy that builds upon existing capabilities and seeks to expand these capabilities in to domains of traditional industries. In conceptual terms of RIS3: RIS3 strategy that aims at creating future domestic capability and comparative advantage and that integrates frontier technology research. Activities aim at development of sufficiently diverse knowledge base, (supply side) and boosting innovation capacity of firms (demand side), and embedded and connected S&T human capital (alignment of the two and co-creation); target whole innovation cycle; remove obstacles and support development of productive innovation system (institutions). 5

Outcomes of RIS3 process: success story of Latvia Built upon Industrial policy; Thorough and honest assessment of existing knowledge base, S&T human capital, institutions and innovation system: International evaluation of research institutions (2012-2013); First round of discussions that identified potential specialization areas (Spring 2013); Second round of discussions for validation of identified potential specialization areas with industry (Summer 2013); Development of RIS3 strategy (Autumn 2013); Third round of discussions for validation and further development of specialization areas (2014); Fourth round of discussions to prioritize investment programs and to devise instruments (2015); Unprecedented collaboration and coordination between line ministries; Engagement and support from industry organizations; Engagement and support at the political level: Establishment of ministerial level Strategic Innovation Council chaired by Prime Minister; Multiple hearings at the Parliament. 6

Outcomes of RIS3 process: RIS3 Strategy Economic transformation towards higher added value, productivity and more effective usage of resources Objective: to increase innovation capacity and to create innovation system that promotes growth of economy Directions: 1. Structural changes of production and export in the traditional sectors of the economy; 2. Growth in sectors where there is or is likely to create products and services with high added value; 3. Branches with significant horizontal impact and contribution to economic transformation. Priorities: 1. High added value products 2. Productive Innovation System 3. Energy Efficiency 4. Modern ICT 5. Modern education 6. The knowledge base (Bioeconomy; Biomedicine, medical technologies, biopharmacy and biotechnology; Smart materials, technology and engineering, Smart energy; ICT) 7. Polycentric development Specialization areas: 1. Knowledge-based bio-economics 2. Bio-medicine, medical technologies, biopharmacy and biotechnologies; 3. Advanced materials, technologies and engineering systems 4. Smart energy 5. Information and communication technologies. 7

Outcomes of RIS3 process: Framework of five RIS3 Specialization areas Bio-economy; Biomedicine, medical technologies, biopharmacy and Biotechnology; Smart materials, technology and engineering, Smart energy; ICT a) Identify subfields of science which have greatest potential for boosting competitiveness of economy and ensure co-creation of knowledgebase and S&T human capital (embedded and connected) in these subfields of science; b) Provide a coordination and discussion platform for research and industry organizations, HE institutions and policymakers for setting priorities, designing policy instruments and monitoring progress. 8

Outcomes of RIS3 process: Framework for identifying subfields of science which have greatest potential for boosting competitiveness of economy Example of Advanced materials, technologies and engineering systems: Fields and subfields of science Offer of scientific institutions for specific niche selection: implant materials, composites, thin layers and coatings. Merchants offer - machinery (including electrical equipment), mechanisms and industrial machines. Industry organizations Groglass Ltd., JSC Sidrabe, Z-Light Ltd., JSC Jauda, JSC Valmieras stikla šķiedra, JSC Lode Main research institutes University of Latvia, Institute of Solid State Physics, Riga Technical University Examples of Connectedness Institute of Solid State Physics: Center of Advanced Materials Research and Technology Transfer (CAMART2) (Horizont2020 WIDESPREAD1-2014:Teaming action) 9

Outcomes of RIS3 process: Framework for identifying subfields of science which have greatest potential for boosting competitiveness of economy Example of Biomedicine, medical technologies, biopharmacy and biotechnology: Fields and subfields of science 1) Chemical and biotechnological methods and products for obtaining pharmaceutical and bioactive substances; 2) Research and development of new and existing human and veterinary medicinal products; 3) Molecular and individualized treatment and diagnostic methods and cell technologies; 4) Functional food, medical cosmetics and bioactive natural products. Industry organizations JSC Olainfarm, JSC Grindeks, JSC Dzintars, Madara Cosmetics Ltd., Silvanols Ltd., Riga East University Hospital Ltd., Pauls Stradins Clinical University Hospital Ltd. Main research institutes University of Latvia, Riga Stradins University, Latvian Institute of Organic Synthesis, Latvian Biomedical Research and Study Centre Examples of Connectedness The Latvian Institute of Organic Synthesis: project ENABLE (European Gram Negative Antibacterial Engine) IMI Programme; Latvian Biomedical Research and Study Centre: FP7 project Vector-borne Risks for Europe: Risk assessment and control of West Nile and Chikungunya virus (VECTORIE) 10

Outcomes of RIS3 process: Framework for identifying subfields of science which have greatest potential for boosting competitiveness of economy Example of Knowledge-based bio-economics: Fields and subfields of science (1) Sustainable and productive forest cultivation in variable climate conditions; (2) Innovative, competitive (niche) products with high added value; (3) Full usage of wood biomass for the chemical processing and energy; (4) Innovative, risk-reducing plant and animal breeding technologies; (5) Innovative high addedvalue niche product development from traditional and non-traditional agricultural plant and animal materials; (6) Technological solutions for plant and animal breeding and processing side-products usage for obtaining high added-value products; (7) Food safety. Industry organizations JSC Latvijas finieris, SJSC Latvijas Valsts meži, Pure chocolate Ltd., Fortum Ltd. Main research institutes Latvian University of Agriculture, Latvian State Institute of Wood Chemistry, Institute of Food Safety, Animal Health and Environment - "BIOR" 11

Outcomes of RIS3 process: Framework for identifying subfields of science which have greatest potential for boosting competitiveness of economy Example of Smart energy: Fields and subfields of science Electrical and smart grid studies using mathematical modelling methods, research on energy-efficient solutions in companies, research on applications of electricity in transport, bioenergy solutions, and solutions for energy selfsufficiency. EM offer: (1) Price of resources, (2) Intensity of consumption on energy resources, (3) ES climate and energy frame 2030. Industry organizations SJSC Latvijas gāze, JSC Rīgas siltums, SJSC Latvenergo, JSC Komforts, Grandeg Ltd., Sun Investments Ltd., Sinergo Ltd., Altenergo Ltd., Enefit Ltd. Main research institutes Riga Technical University, Institute of Physical Energetics, The Institute of Physics of University of Latvia 12

Outcomes of RIS3 process: Framework for identifying subfields of science which have greatest potential for boosting competitiveness of economy Example of Information and comunication technologies (ICT): Fields and subfields of science Specialization topics (for example, cyberphisical systems, photonics, biophotonics, micronanoelectronics, etc.) and horizontal platform for collaboration in solving society - important matters (such as health, transport, environment, public safety, etc.) for such sectors as an innovative knowledge management, system modelling and software development methods and tools; innovative sectors of ICT hardware (hardware) and software (software) applications; language processing and semantic web; large-scale data and knowledge infrastructure; information security and quantum computers; computer system testing methods. Industry organizations Lattelecom Ltd., Tilde Ltd., JSC Rix Technologies, JSC Exigen Services Latvia, Dati grupa Ltd., JSC SAF Tehnika, Hanzas Elektronika Ltd Main research institutes Riga Technical University, University of Latvia, Institute of Electronics and Computer Science, Institute of Mathematics and Computer Science Examples of Connectedness Institute of Electronics and Computer Science, Institute of Mathematics and Computer Science, Riga Technical University FP7 ARTEMIS projects. 13

Dalība ES pētniecības un tehnoloģiju attīstības programmās (2014.g. 2017.g.) 5,72 milj. EUR (IZM, VB) APVĀRSNIS 2020 Uzņēmumu ienākuma nodokļa atvieglojums pētniecības un attīstības izmaksām UIN atvieglojumi ražošanas veicināšanai iegādājoties jaunas ražošanas tehnoloģiskās iekārtas FLP (2014.g. 2017.g.) 20,76 milj. EUR (IZM, VB) VPP (2014.g.-2017.g.) 26,96 milj. EUR. (IZM, VB) Zinātnes bāzes finansējums (2014.g.-2017.g.) 99,16 milj. EUR (IZM, VB) Praktiskas ievirzes pētījumi 76,51 milj. EUR (IZM, SF) Inovāciju granti studentiem 34 milj. EUR (IZM SF) Granti pēcdoktorantūras pētījumiem 64,03 milj. EUR (IZM, SF) ZI institucionālās kapacitātes stiprināšana 15,25 milj. EUR (IZM, SF) ERA bilaterālās un multilaterālās sadarbības projektu atbalsts 32,55 milj. EUR (IZM, SF) P&A Infrastruktūras attīstība 100 milj. EUR (IZM, SF) Tehnoloģiju pārneses programma 24,5 milj. EUR (EM, SF) Atbalsts MVK jaunu produktu un tehnoloģiju attīstībai 7 milj. EUR (EM, SF) Kompetences centri 72,3 milj. EUR (EM, SF) Zināšanu pārnese lauksaimniekiem un meža apsaimniekotājiem 17,1 milj. EUR (ZM, ELFLA) Sadarbība starp pētniecību un lauksaimniecības un mežsaimniecības nozarēm 2,2 milj. EUR (ZM, ELFLA) Finanšu pieejamības sekmēšana 51 milj. EUR (EM, SF) Straujas izaugsmes komersanti 75 milj. EUR (EM, SF) Klasteru programma 6,20 milj. EUR (EM, SF) Biznesa inkubatoru atbalsta programma 31 milj. EUR (EM, SF) Inovācijas motivācijas programma 4,80 milj. EUR (EM, SF) Uzņēmējdarbību veicinoša publiskā infrastruktūra reģionos 114,2 milj. EUR (VARAM, SF) Atbalsts ražošanas telpu un infrastruktūras izveidei 21,75 milj. EUR (EM, SF) Teritoriju revitalizācija 278,26 milj. EUR (VARAM, SF) Ārējie tirgu apgūšana 31,80 milj.eur (EM,SF) Publisko datu atkalizmantošana 151,54 milj. EUR (VARAM, SF) Partnerībā organizētas apmācības 24,90 milj. EUR (EM, SF) Bezdarbnieku apmācības atbilstoši darba tirgus pieprasīj. 96,4 milj. EUR (LM, SF) Nodarbināto personu profesionālās kompetences pilnveide 27,03milj.EUR (LM, SF) Darba tirgus apsteidzošo pārkārtojumu sistēma 1,99milj.EUR (LM, SF) Zinātnes konkurētspējas paaugstināšana Inovācijas kapacitātes stiprināšana Uzņēmējdarbības konkurētspējas paaugstināšana ZINĀTNE Latvijas ekonomikas izaugsme IZGLĪTĪBA UZŅĒMĒJDARBĪBA AII studiju programmu fragmentācijas mazināšana, AII akadēmiskā personāla kapacitātes stiprināšana, AII pārvaldības uzlabošana 65,15 milj. EUR (IZM, SF) AII infrastruktūras attīstība STEM jomās 44,64 milj. EUR (IZM, SF) Infrastruktūras attīstība koledžās STEM jomās 14,2 milj. EUR (IZM, SF) Darba vidē balstītas mācības, mācību prakse profesionālajā izglītībā 21,93 milj. EUR (IZM, SF) Profesionālās izglītības infrastruktūras attīstība, t.sk. STEM jomās 104,7 milj. EUR (IZM, SF) IZGLĪTĪBAS FINANSĒJUMS

Outcomes of RIS3 process: Specialization areas as coordination and discussion platform Bringing together research and industry organizations, HE institutions and policymakers for setting priorities, designing policy instruments and monitoring progress. Identification of several frontier technology research fields Assessment of development potential of industry Assessment of innovation system, S&T human capital, and research institutions 2013: discover y and innovation domains 2014: Creation of 3-level discussion platform Structured discussions in 5 specialization areas Innovation council Coordinated work between line ministries Prioritization of public investments Creation of monitoring system that facilitates the discovery process and tracks progress 2015: Implementation and monitoring 15

Implementation and monitoring: Targets 2020 and metrics Base 2017 2020 Investment in R&D (% of GDP) 0,6 (2013) 1,2 1,5 Position in Innovation Union Scoreboard modest (2014) modest moderate Productivity (EUR/empl.) 20 126 (2013) 24 500 29 000 Monitoring system: 3-level targets macro, policy and program Frame of Innovation Union Scoreboard 3-level prioritization and impact assessment Challenge of tracking discovery Cilvēkresursi Doktora grāda ieguvēju skaits 30-34 gadu vecuma iedz. īpatsvars ar augstāko izglītību Jauniešu īpatsvars ar vidējo izglītību Veicionoši e faktori Atvērtas, izcilas pētniecības sistēmas Starptautiskas zinātniskās kopublikācijas Top 10 % no citētajām zinātniskajām publikācijām Doktorantu skaits ārpus ES valstīm Finansējums un atbalsts P&A īpatsvars no IKP Inovatīvu uzņēmumu īpatsvars Uzņēmumu investīcijas P&A īpatsvars no uzņēmējdarbī bas sektora (% no IKP) Inovāciju izmaksas ārpus P&A Inovāciju kapacitāte Uzņēmum u pasākumi Tīkli un uzņēmējdarbīb a MVU īpatsvars, kuri veic inovācijas Inovatīvu MVU sadarbība ar citiem uzņēmumie m Publiskā un privātā sektora kopublikācijas Intelektuālās vērtības Starptautisk o patentu pieteikumi Starptautisk o patentu pieteikumi sabiedrībai aktuālos jautājumos Sabiedrībai piederošās autortiesības Sabiedrībai piederošās īpašumtiesības Inovatori Rezultāti MVU ar produktu vai procesa inovācijām MVU ar mārketinga vai organizācijas inovācijām Nodarbinātība ātri augošajos inovatīvājos uzņēmumos Ekonomiskā ietekme Nodarbinātība zināšanu ietilpīgos darbos Vidējo/augsto tehnoloģiju ietekme uz tidrzniecību Zināšanu ietilpīgo palkalpojumu eksports Ieņēmumi no tirgum un uzņēmumiem jaunām inovācijām Licenšu un patentu ieņēmumi no ārvalstīm 16

Thank You! Dr. Agrita Kiopa Deputy State Secretary - Director of the Department Higher Education, Science and Innovation Department Phone: +371 67047983 Mobile: +371 25414112 e-mail: agrita.kiopa@izm.gov.lv www.izm.gov.lv