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Key Enabling Technologies (KETs) Observatory

Country Report Italy: regional aspects of KETs deployment

28 February 2014 Marcel de Heide (TNO) Client: European Commission, Directorate-General Enterprise & Industry

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Contents Introduction – the KETs Observatory ...................................................................................................... 3

General characteristics of Italy ............................................................................................................... 3

Economy and underlying structure ..................................................................................................... 3

Regional structure ............................................................................................................................... 5

Description of national policies addressing KETs .................................................................................... 8

Characteristics of the innovation system............................................................................................ 8

Governance structure of the innovation system ................................................................................ 9

Actors and policies on a national level ........................................................................................... 9

Actors and policies on a regional level .......................................................................................... 11

Policies addressing KETs.................................................................................................................... 12

Performance in KETs ............................................................................................................................. 13

Regional KETs performance .................................................................................................................. 14

Regional case: description of a specific relevant industrial ecosystem, and the policies supporting it

.............................................................................................................................................................. 18

Technological Districts in the Italian regions .................................................................................... 18

The case of Emilia-Romagna ............................................................................................................. 19

Literature .............................................................................................................................................. 19

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Introduction – the KETs Observatory The European Commission (EC) has launched a project involving the set-up and implementation of a Key Enabling Technologies (KETs) Observatory for 2013-2015. The project is realized by a consortium comprising IDEA Consult, TNO, CEA, ZEW, NIW, Ecorys and Fraunhofer ISI (as sub-contractors). The objective of the KETs Observatory is to provide EU, national and regional policymakers with information on the deployment of Key Enabling Technologies both within the EU 28 and in comparison to other world regions (East Asia, North America). Knowing the recent trends and developments of KETs related technology and products in the EU in comparison to other competing economies may serve as a basis for the construction and implementation of dedicated industrial policies. This document addresses KETs in a regional context for Italy. The first section provides a brief description of the country (i.e. economy, industry), and its governance system. The following section describes the Italian national and regional innovation system, and the policies addressing it (with specific attention to policies supporting KETs). An overview of relevant regional clusters on KETs is given in the next section. The last section provides (as a case-study) a description of a specific relevant industrial ecosystem.

General characteristics of Italy

Economy and underlying structure Italy is a prominent actor in the word economy.

1 In 2012, it was the ninth-largest economy in the world and

the fourth-largest in Europe in terms of nominal GDP.2 Despite this strong position, the Italian economy suffers

from structural problems. This is reflected in the development of the economy over the last decades. After a strong GDP growth of 5-6% per year from the 1950s to the early 1970s, and a progressive slowdown in the 1980s and 1990s, the annual average in the first decade of the 21

st century equalled just 1.23% (with an

average EU annual growth rate of 2.28%). This is caused by the fact that the financial crisis and the subsequent economic downturn seriously affected the Italian economy; more than the other developed economies in the world (see Figure 1). Figure 1: GDP growth [volume, %] (Source: OECD 2014)

1 It is a founding member of the G7, G8, the Eurozone and the OECD.

2 In terms of PPP, it was the tenth-largest economy in the world and fourth-largest in Europe in terms of PPP in

2012.

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

OECD - Total 2.86 3.16 2.72 0.19 -3.52 2.98 1.95 1.55 1.20 2.29 2.68

Germany 0.85 3.89 3.39 0.81 -5.08 3.86 3.40 0.90 0.52 1.66 1.96

Italy 1.09 2.27 1.55 -1.16 -5.53 1.68 0.61 -2.56 -1.89 0.58 1.42

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The first signs of economic recovery (with limited GDP growth) are foreseen for the end of 2014, as domestic expenditure will finally grow again after a relatively deep and persistent drop after 2010 (see Figure 2), and the high and ever increasing unemployment levels are expected to stabilise (see Figure 3).

Figure 2: Domestic expenditure growth [volume, %] (Source: OECD 2014)

Figure 3: Unemployment rate [%] (Source: OECD 2014)

The Italian economy has a relatively small number of global multinational corporations in comparison to other economies of a comparable size. Its industrial landscape is dominated by micro, small and medium-sized enterprises, clustered in several industrial districts. These industrial clusters, predominantly operating in the manufacturing sector, are quite successful, focussing on production (and export) of luxury products in niche markets. As a result of their success, Italy was the world's 7th largest exporter in 2009. Export growth rates were affected by the crisis, but trends follow the global economy (see Figure 4). Italy's closest trade ties are with other countries of the European Union, with whom it conducts about 59% of its total trade. Its largest EU trade partners, in order of market share, are Germany (12.9%), France (11.4%), and Spain (7.4%).

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

OECD - Total 3.01 3.06 2.47 -0.22 -3.96 3.06 1.66 1.08 1.00 2.20 2.67

Germany -0.07 2.83 1.94 1.00 -2.20 2.28 2.85 -0.22 0.84 2.22 2.42

Italy 1.09 2.14 1.30 -1.20 -4.46 2.02 -0.81 -5.29 -3.04 -0.02 1.11

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2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Italy 7.70 6.79 6.11 6.78 7.79 8.41 8.43 10.68 12.09 12.45 12.09

OECD - Total 6.65 6.12 5.67 6.00 8.18 8.35 7.97 7.98 8.00 7.84 7.55

Germany 11.28 10.18 8.70 7.51 7.78 7.08 5.95 5.46 5.43 5.42 5.19

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Figure 4: Export of goods and services growth [volume, %] (Source: OECD 2014)

The Italian industrial sector however faces a number of structural threats that might hinder further sustainable economic growth:

Italy has very limited domestic access to raw materials and energy resources. It therefore has to rely on the international market for these items. As an illustration of its demand: in 2006 Italy imported more than 86% of its total energy consumption (99.7% of the solid fuels, 92.5% of oil, 91.2% of natural gas and 15% of electricity).

Furthermore, Italy faces a vast public debt (119.8% of GDP in 2011),3 and continuing government deficit (-

3.0% of GDP in 2010) resulting from heavy public spending (more than 50% of GDP, although with a limited social welfare system).

4 Moreover, the impact of the financial crisis might have been aggravated

by the drastic but necessary budget constraints imposed by the last two administrations, including heavy taxation in an international comparison.

The framework conditions for Italian companies resulting from the governance of the economy by the Italian government seem not as favourable as for their competitors. This is reflected in its ranking on the Index of Economic Freedom 2012. Italy scores an 86

th position in the world on a combined indicator

addressing issues like Regulatory Efficiency and Rule of Law.5

Regional structure Italy is subdivided into 20 regions (regioni, singular regione), five of these regions having a special autonomous status that enables them to enact legislation on some of their local matters. The regions of Italy are the first-level administrative divisions of the state, constituting its second NUTS administrative level. The country is further divided into 110 provinces (province) and 8092 municipalities (comuni) (see Table 1). There is a big difference in level of GDP of the different regions (see Figure 5). The North and the Centre of the country have a GDP per capita which is about 115-125% of EU average, with the North being one of the industrial cores of Europe, while the South has a GDP per capita which is just the 70% of EU average. Growth figures seem to indicate a further divergence in level of GDP.

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3 OECD (2013) Economic survey Italy, May 2013.

4 EUROSTAT (2013) News release Euroindicators, April 2013.

5 The indicators combined refer to Rule of Law (i.e. Property Rights and Freedom from Corruption), Limited

Government (Government Spending and Fiscal Freedom), Regulatory Efficiency (Business Freedom, Labour Freedom, Monatery Freedom), Open Markets (Trade Freedom, Investment Freedom, Financial Freedom). See http://www.heritage.org/index/. 6 OECD (2013) Economic survey Italy, May 2013.

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

OECD - Total 6.06 9.08 6.72 2.02 -10.87 11.71 6.23 3.04 2.01 4.52 5.43

Italy 4.15 8.80 5.56 -2.80 -17.71 11.16 6.90 1.87 0.00 3.64 4.86

Germany 7.97 13.57 8.29 2.25 -12.96 14.85 8.14 3.81 0.58 3.57 4.60

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Table 1: Characteristics of the Italian regions (Source: Istat 2012)

Regione Inhabitants km2

Inhabitants / km2

Comuni Province

Abruzzo 1.312.507 2,2% 10.795 3,6% 121,6 305 4

Basilicata 576.194 1,0% 9.995 3,3% 57,7 131 2

Calabria 1.958.238 3,3% 15.081 5,0% 129,9 409 5

Campania 5.769.750 9,7% 13.590 4,5% 424,6 551 5

Emilia-Romagna 4.377.487 7,3% 22.456 7,5% 194,9 348 9

Friuli-Venezia Giulia 1.221.860 2,0% 7.855 2,6% 155,6 218 4

Lazio 5.557.276 9,3% 17.208 5,7% 323,0 378 5

Liguria 1.565.127 2,6% 5.421 1,8% 288,7 235 4

Lombardia 9.794.525 16,4% 23.863 7,9% 410,5 1.544 12

Marche 1.545.155 2,6% 9.366 3,1% 165,0 239 5

Molise 313.341 0,5% 4.433 1,5% 70,7 136 2

Piemonte 4.374.052 7,3% 25.402 8,4% 172,2 1.206 8

Puglia 4.050.803 6,8% 19.371 6,4% 209,1 258 6

Sardegna 1.640.379 2,7% 24.089 8,0% 68,1 377 8

Sicilia 4.999.932 8,4% 25.703 8,5% 194,5 390 9

Toscana 3.692.828 6,2% 22.990 7,6% 160,6 287 10

Trentino-Alto Adige 1.039.934 1,7% 13.607 4,5% 76,4 333 2

Umbria 886.239 1,5% 8.456 2,8% 104,8 92 2

Valle d'Aosta 127.844 0,2% 3.263 1,1% 39,2 74 1

Veneto 4.881.756 8,2% 18.391 6,1% 265,4 581 7

Total (i.e. Italy) 59.685.227 100% 301.334 100% 8.092 110

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Figure 5: GDP [billion of EUROs, current market prices] of the regions in Italy (Source: OECD 2014).

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Lombardia 268.9 276.8 286.7 294.5 303.9 317.8 327.1 314.9 328.5 334.5 331.4

Lazio 138.1 142.2 151.1 155.4 160.9 167.7 169.0 166.1 168.3 171.0 169.5

Veneto 120.5 125.7 132.0 135.7 140.6 147.0 145.9 141.9 144.3 148.4 146.6

Emilia-Romagna 114.6 117.7 122.8 126.2 132.9 139.3 141.0 134.7 137.7 142.4 140.9

Piemonte 107.7 111.4 115.6 118.6 122.8 126.9 127.5 119.4 123.9 126.6 124.9

Toscana 87.2 89.8 93.3 95.2 99.5 103.4 105.2 102.8 104.0 106.2 105.9

Campania 84.1 86.0 89.2 91.5 95.0 98.5 99.7 96.2 96.0 96.0 95.5

Sicilia 72.6 75.0 77.5 80.9 84.0 86.5 87.4 84.6 85.1 85.0 84.9

Puglia 61.1 62.8 65.1 66.5 69.5 71.2 71.6 69.1 70.2 71.2 70.3

Liguria 37.0 38.3 39.8 40.9 42.1 44.4 45.1 43.4 43.6 44.5 44.1

Marche 34.6 35.4 36.9 37.8 39.9 41.6 41.6 40.4 40.5 41.0 40.2

Friuli-Venezia Giulia 30.8 31.2 32.2 33.4 34.8 36.4 36.3 34.5 35.6 36.3 36.0

Trentino Alto Adige / Südtirol 27.3 28.2 29.5 30.1 31.5 33.0 33.7 33.4 34.3 35.2 35.4

Calabria 28.0 29.1 30.4 31.1 32.4 33.4 34.0 33.2 33.3 33.4 33.3

Sardegna 27.1 28.4 29.6 30.4 31.7 32.7 33.6 32.6 32.8 33.1 33.0

Abruzzo 24.6 25.0 25.1 26.3 27.4 28.7 29.5 28.3 29.0 30.1 30.0

Umbria 18.3 18.8 19.7 20.1 21.0 21.9 22.3 21.0 21.4 21.6 21.2

Provincia Autonoma Bolzano /Bozen

14.1 14.5 15.4 15.7 16.5 17.3 17.8 17.7 18.2 18.7 19.2

Provincia Autonoma Trento 13.3 13.6 14.1 14.4 14.9 15.7 16.0 15.7 16.1 16.4 16.2

Basilicata 9.2 9.4 9.7 9.9 10.4 10.8 10.9 10.5 10.4 10.6 10.5

Molise 5.6 5.7 5.9 6.1 6.4 6.7 6.6 6.4 6.4 6.4 6.4

Valle d'Aosta / Vallée d'Aoste 3.5 3.7 3.9 4.0 4.2 4.3 4.4 4.2 4.4 4.5 4.4

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50.0

100.0

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400.0

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Description of national policies addressing KETs

Characteristics of the innovation system The Innovation Union Scoreboard 2013 ranks Italy amongst the Moderate Innovator countries group.

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position reflects the score on the many input related indicators on science, technology and industry activity that constitute the scoreboard. In comparison to the EU average, and its main European counterparts (with respect to size of the economy), Italy underperforms with respect to human capital available for research (as reflected in population completed tertiary education) and financial resources available for R&D (i.e. public R&D expenditure, BERD and venture capital) (see Table 2). Italy however does score relatively well on indicators reflecting the results of innovation (i.e. medium and high-tech product exports, knowledge-intensive services exports, and sales of new to market and new to firm innovations) (see Table 2). In practice, innovation in Italy seems primarily knowledge driven, and not so much research driven. Table 2: Performance of European Innovation Systems (Source: Innovation Union Scoreboard 2013)

EU27 DE FR IT NL FI SE UK CH

Population completed tertiary education per 100 population aged 25-64

34.6 30.7 43.4 20.3 41.1 46.0 47.5 45.8 44.0

Public R&D expenditure [% of GDP]

0.75 0.94 0.80 0.53 0.97 1.09 1.03 0.64 0.79

International scientific co-publications

300 715 683 500 1330 1323 1604 989 1692

Scientific publications among top 10% most cited

10.90 11.64 10.33 10.11 15.13 11.48 12.28 13.28 15.84

Venture capital [% of GDP] 0.094 0.057 0.105 0.020 0.105 0.108 0.156 0.239 0.094

BERD [% of GDP] 1.27 1.90 1.43 0.68 0.89 2.34 2.34 1.09 2.11

Non-R&D innovation expenditure as a percentage of turnover

0.56 0.88 0.25 0.59 0.61 0.51 0.64 N/A 1.16

Medium and high-tech product exports [% of total product export]

1.28 8.54 4.65 4.96 1.68 1.69 2.02 3.13 8.44

Knowledge-intensive services exports [% of total services export]

45.14 56.70 32.58 27.19 26.31 35.93 38.70 57.59 26.51

Sales of new to market and new to firm innovations [% of turnover]

14.37 15.50 14.73 14.86 10.45 15.29 8.37 7.31 19.23

The number of firms involved in innovation in Italy is high in comparison to the EU average, and above that of competitors such as France and the UK (see Figure 6). In practice, a segment of innovative firms, including flexible SMEs, coexists with many non-innovative firms operating at low levels of productivity.

7 See http://ec.europa.eu/enterprise/policies/innovation/policy/innovation-scoreboard/index_en.htm.

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Figure 6: Proportion of innovative enterprises [% of all enterprises], 2008–10 (Source: EUROSTAT)

The public research system performs a large part of the R&D. But in terms of research intensity (i.e. public expenditure as a percentage of GDP), they are behind in comparison to their European counterparts. Also collaboration of Higher Education and Public Research Institutions (PRIs) with industry in R&D and innovation seems limited, especially with regard to co-operation with micro, small and medium sized enterprises.

Governance structure of the innovation system

Actors and policies on a national level R&D and innovation policy on a national level is defined by the Parliament and the Council of Ministries. Its coordination within the government is under the responsibility of Inter-ministerial Committee for Economic Planning (CIPE). The role of CIPE became more prominent and effective after a special section dedicated to research and education was created during the last decade (the so-called Sessione Ricerca) (see Figure 7). At the operational level, the Ministry for Education, University and Research (MIUR) coordinates national and international scientific activities, distributes funding to universities and research agencies, and establishes the means for supporting public & private research and technological development (RTD) funding. The Ministry for Economic Development (previously called Ministry for Production Activities) supports and manages industrial innovation. Other Ministries (Health, Agriculture, etc) manage research funding in their specific fields. Important bodies dealing with advisory tasks are the National Committee for the University (CUN), which is in charge of proposal and consultancy on the academic curricula and recruitment, and the National Agency for the Evaluation of Universities and Research Institutes (ANVUR).

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Figure 7: Governance structure of the innovation system

The main policy document supporting the actors of the Italian innovation system is the National Research Programme (PNR). It defines the objectives and modes of implementation of specific interventions in priority areas, disciplinary sectors, actors involved, and projects which qualify for funding. The goal is to ensure the coordination of research with other national policies, bringing Italian research into alignment with the strategic vision defined at European level and creating the conditions necessary for a progressive integration of public and private research. The PNR is formulated by the Ministry of Education, Universities and Research (MIUR), after extensive consultation with the actors of the innovation systems (e.g. scientific and academic communities, economic powers and competent administrations). It is implemented after approval within the framework of the Inter-ministerial Committee for Economic Planning (CIPE). The first PNR was formulated for the three-year period 2001 - 2003. Assessment has indicated that in order to obtain tangible and lasting effects on the country’s social and economic structure, simultaneous action on several levels is necessary: education, basic and applied research, technology transfer and development, and valorisation of intellectual property. To achieve its objectives, the PNR proposes a set of integrated actions, each of which involves various initiatives over the short, medium and long term. Next to defining lines of action and allocating funds, the objective is to simplify funding mechanisms, rationalize active mechanisms available to administrations, and identify forms of monitoring to ensure that funding is efficiently applied in pursuit of the stated objectives. Important to mention within the scope of this report are some specific actions mentioned in the 2011 - 2013 National Research Programme, aimed at encouraging technology transfer between the actors in the innovation system. Example are: (i) implementation of the technology districts to intensify cooperation and favour the creation of public-private partnerships to carry out large research and innovation projects; (2) public-private laboratories; (3) creation of clusters in order to reach critical mass, especially at regional level, by taking advantage of existing competences (i.e. high technology poles, centres of competence). Important are also the actions aimed at supporting further valorisation of research results, amongst others by supporting IP activities by universities, and the set-up of technology transfer offices.

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Italy has a dedicated policy aimed at linking the innovation system to international research. The Strategy for the Internationalisation of Italian Research (SIRIT 2010-15) integrates the national research priorities in international strategies and priorities, notably the EU’s 2020 Strategy. Italy subsequently actively participates in EU R&D programmes, the European Strategy Forum on Research Infrastructures (ESFRI) and other European initiatives such as EUREKA (for international S&T cooperation) and Erasmus (for mobility of students and researchers). The resources earmarked by the budget for the current three-year period of the PNR are distributed across the following sources of national funding: • Ordinary fund for research institutes and bodies (Fondo Ordinario per il finanziamento degli Enti e

degli istituti di ricerca - FOE); • Fund for investment in basic research (Fondo per gli Investimenti della Ricerca di Base - FIRB); • Research subsidy fund (Fondo per le Agevolazioni alla Ricerca - FAR); • Research projects of national interest (Progetti di Ricerca di Interesse Nazionale - PRIN). In practice, most of the public financing of R&D is allocated to the public research infrastructure: 88% of the government funding is addressed towards Higher Education Institutions (HEIs) and Public Research institutions (PRIs), leaving to business enterprises and not for profit organizations only 8% and 2% of the total. Competitive funding and institutional funding are the main channels for transferring resources to HEIs and PRIs, mainly towards thematic\targeted projects. In recent years there has been a shift towards indirect funding of R&D. As stated in the National Reform Programme 2011, for 2011/12, tax incentives have been strengthened for research commissioned by firms to universities and PRIs as well as for research developed in collaboration with them.

Actors and policies on a regional level Each region in Italy has an elected parliament, called Consiglio Regionale (Regional Council),

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government called Giunta Regionale (Regional Junta), headed by a regional President. The latter is directly elected by the citizens of each region.

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In most Italian regions, the definition of governance structures for research policies still is in its starting phase. For instance, regional research councils do not yet exist. Some regions, such as Piedmont, Emilia Romagna, Friuli Venezia Giulia, Latium and the autonomous province of Trento, use instruments for competitive funding through calls for bids from private and public subjects. Regions, especially those in the North, have become more active in the last years in order to stimulate the labor market for researchers. For instance the regional law for research in Piemonte (L.R. 4/2006) opens a specific Action for human resource mobility aimed at favoring the brain gain and contrast the brain drain, as well as to attract talented researchers from abroad for carrying out specific research projects. Similar measures are experimented also in other regions such as Lombardy and Latium. Regions play a strategic role in the implementation of the PNR: as well as having the power to allocate their own funds to research, they participate in the management of European Structural Funds via the Regional Innovation Strategies and they actively contribute to the more general objective of smart growth. In this framework, the concept of Smart Specialisation Strategy has been issued at European level to improve the national and regional research system effectiveness. A third of the 20 regions have adopted operational research programmes (PONs), which funding derives from the Structural Funds.

10 These programmes are usually aimed at increasing the competitiveness of regional

economic systems, addressing SMEs, training and education of high-skilled work force, and networking collaboration between the public research infrastructure and the firms. In accordance with the EU guidelines to access to funding from the European Regional Development Fund (ERDF), regions will have to define a

8 in Sicily this is called the Assemblea Regionale (Regional Assembly)

9 With the exceptions of Aosta Valley and Trentino-Alto Adige/Südtirol, where the President is chosen by the

Regional Council. 10

These are Sicily, Sardinia, Calabria, Puglia, Campania, Molise and Basilicata. See www.researchitaly.it and www.istruzione.it/web/istruzione/pon

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strategy for Smart Specialization, with a characterization distinctive with respect to the strategies and choices defined by other administrations, highlighting their competitive advantages.

Policies addressing KETs Key Enabling Technologies (KETs) are included but not explicitly mentioned in thematic and structural programmes supporting the R&D and innovation policies addressing actors on a national or regional level. But they are included in the general target of improving the innovation system through funding and supporting of cooperation between research and industry. In order to illustrate the relevance of KETs for the Italian industrial landscape, the Italian Association for Industrial Research (AIRI), has conducted an analysis of how key enabling technologies contribute to the most relevant sectors in the Italian economy. In the corresponding 2013 report entitled “Key Enabling Technologies: their role in the priority technologies for the Italian industry” eight industrial technologies are identified based on the input of more than hundred R&D managers, representative of key industry, private and public research centres in Italy (most of them members of AIRI)

11 These industrial technologies are selected because of their

innovation potential with respect to the most important sectors in the Italian economy, and their potential impact on growth in the short to medium time-frame:

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• Information and Communication Technologies (Technologies for ICT-based logistics and mobility services (infomobility), Mobile networks and services, “Home networks” technologies, Technologies for networks security, ...);

• Microelectronics - Semiconductors (Silicon electronic system integration, Photovoltaic applications, Materials alternative to silicon, Heterogeneous Integration: processes, fabrication techniques and design methods, Silicon integration of sensors technologies, Silicon Photonics);

• Energy (Specific technologies for: energy transport and storage, power generation and advanced materials, use of biomass (electric and thermal energy production), solar energy harvesting, energy efficiency, Smart Grid/Smart Metering/Smart Energy, Carbon capture and storage (CCS));

• Chemistry (Technologies for the recovery of polymeric materials from used tyres, Technologies for the production of non-sticky chewing gum, Biorefinery processes, II generation biochemical technologies (non for food feedstock), Alternative feedstock for energy and chemical products (biofuels, hydrogen production from natural resources), Nanotechnologies in concrete formulations for the construction sector, Hybrid organic and inorganic materials and nanomaterials as catalyst for chemical processes);

• Pharma & Bio (Genomics, proteomics and metabolomics, Technologies for pharmaceutical chemistry, Personalized medicine – biomarkers, Delivery Systems , Biomolecular production, Technologies and methods for the Molecular Imaging, Minimally invasive technologies, Advanced therapies technologies);

• Aeronautics (Technologies for materials, production and maintenance processes for aero-structures and engines, for environmental impact reduction, for low emission engines, for conventional and innovative engine design, Simulation methodologies for integrated design, Prognostics and condition –based maintenances systems, Autonomous systems technologies, Advanced Air Traffic Management, Air traffic systems interoperability, Modular avionic, Human machine interfaces, Security Land Side (security management systems));

• Transport (ground, rail, marine) (Solutions, Technologies and Green Automotive Materials for energy efficiency and performances of the vehicle, Solution & Technologies for human-machine interface (HMI), New methodologies for ship design and Multi-disciplinary Virtual Analysis techniques (Performances, Logistics, Quality) to reduce time-to-market, Solution & Technologies to improve Energy Efficiency on ship systems, Solution & Technologies to improve Energy Efficiency on railroad systems (Green Technologies) , Improvement in Quality and Efficiency of processes for people and goods transportations, Communication and information management systems);

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See www.airi.it/attivita-ed-eventi/gruppi-di-lavoro-e-comitati/key-enabling-technologies/ 12

The priority technologies have been selected based on the following criteria: (1) Impact in the short-medium term on the competitiveness of industries active in the specific sectors; (2) Time to market of the technology; (3) Qualitative evaluation of the R&D investment needed to reach the demonstration (prototype) or market of the technology; (4) Analysis of socio-economical aspects such as: social, environmental and economical sustainability (in the national and global market context) and technical feasibility (from the lab to the market), impact on jobs.

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• Manufacturing (Methodologies and standards for the design of complex machinery and manufacturing systems: IT tools and novel design approaches, Technologies for the control, monitoring, maintenance, diagnostic of manufacturing systems to improve life cycle and efficiency, High performance sensors and mechatronics components for manufacturing and final products efficiency and quality, Environmental friendly machines and systems design and architectures, to optimise energy efficiency and environmental impact of manufacturing systems, Structural materials for components, machines and systems to improve performances, reduce the use of resources and the environmental impact).

The analysis includes an assessment of the role of KETs in these key sectors for the Italian economy and the corresponding eight industrial technologies. The report concludes that: “[…] From the point of view of the industrial sectors, all technologies related to microelectronics and semiconductors, energy, chemistry, pharma and bio, transports, and manufacturing include at least one KET. In the ICT, chemistry and aeronautics sectors the impact (from a quantitative point of view) is lower, and some technologies show no relationships with KETs.” In conclusion: • KETs contribute to all the 8 Priority Technologies for the industrial sectors; • More than 80% of the Priority Technologies includes at least one KET; • More than 50% of the Priority Technologies includes at least 3 KETs.

Performance in KETs In order to illustrate the level of deployment of KETs within the Italian innovation system, we compare its market share in the total production of patents for the different KETs with that of other countries. This indicator on market share is compiled within the framework of the KETs Observatory.

13 It indicates the

relevance of a country in the respective technology market, and compiled by dividing the number of patent applications of a certain country by the total number of patent applications in the respective KET area. Note that this indicator, is strongly influenced by the size of a country as larger countries are more likely to produce more patents than small countries. Results indicate that Italy has a constant share of patents, but that it is trailing behind the major economies in the EU (i.e. France, Germany and the UK), as well as some of the smaller economies in Europe (e.g. the Netherlands, Austria) for all KETs (see Figure 8). This result supports the conclusion that in practice, Italy is a Moderate Innovator as indicated in the Innovation Union Scoreboard 2013. Figure 8: Market share of a country in total production of patents in a certain KET area for a selection of countries (Source: KETs Observatory 2014)

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See www.ketsobservatory.eu for other indicators as well as a further explanation of the underlying methodology.

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Regional KETs performance For the assessment of the regional deployment of KETs, we analysed 2000 - 2010 patent data for all 20 Italian (NUTS 2 level) regions. For each KET we selected the top five regions based on the total number of patents for the period (see Figure 9 - Figure 14). The data are obtained from the KETs Observatory, and it is based on EP patent applications, using the inventor's location and applying fractional counting.

14 Based on the assessment

we conclude that: • The top-5 regions with respect to the deployment of KETs as reflected in total patenting in key

enabling technologies resembles top-5 regions with respect to level of GDP. • The most prominent region concerning patenting in KETs is Lombardia. This region is identified in the

Regional Innovation Monitor 2014 as a Moderate Innovator. Piemonte and Emilia Romagna have been identified as Innovation Followers. This is reflected also in their patenting performance on KETs.

• Highest patenting activity in Italy is for AMT, MNE and AM. • The number of patents is rather volatile over the years. But what can be observed as a trend common

to the different KETs is a peak in patent applications in 2003 to 2005 period and a subsequent decline in application activity in 2006-2008. The year 2009 shows a small recovery in most cases and is followed by a reduction in patenting activities in 2010.

14

See www.ketsobservatory.eu. Because of the limited number of patent applications, it was impossible to compile indicators such as market share on a regional level. It was decided therefore to assess the total number of patent applications per year.

15

Figure 9: Number of patent applications in Photonics (top-5 NUTS 2 regions, 2000-2010) (Source: KETs Observatory / ZEW calculations 2014)

Figure 10: Number of patent applications in Nano-Technology (top-5 NUTS 2 regions, 2000-2010) (Source: KETs Observatory / ZEW calculations 2014)

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

LOMBARDIA 40 23 28 26 30 25 17 18 18 15 17

EMILIA-ROMAGNA 7 14 7 7 12 11 5 8 6 5 10

PIEMONTE 7 22 18 25 15 13 9 7 8 10 3

VENETO 4 4 6 1 5 11 11 11 10 13 3

TOSCANA 4 6 7 5 6 3 2 2 2 1 2

0

5

10

15

20

25

30

35

40

45

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

LOMBARDIA 5 5 8 3 11 5 3 3 3 5 2

EMILIA-ROMAGNA 1 1 2 0 4 1 0 0 0 1 1

PIEMONTE 0 2 5 3 5 3 0 3 0 0 0

VENETO 0 1 1 0 0 1 1 1 0 1 1

TOSCANA 1 2 3 0 3 0 2 0 0 0 0

0

2

4

6

8

10

12

16

Figure 11: Number of patent applications in Industrial Biotechnology (top-5 NUTS 2 regions, 2000-2010) (Source: KETs Observatory / ZEW calculations 2014)

Figure 12: Number of patent applications in Advanced Materials (top-5 NUTS 2 regions, 2000-2010) (Source: KETs Observatory / ZEW calculations 2014)

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

LOMBARDIA 10 10 21 21 16 24 10 3 7 7 4

EMILIA-ROMAGNA 1 1 4 4 2 4 2 2 3 3 1

PIEMONTE 1 1 2 4 2 6 5 2 2 3 1

VENETO 2 1 2 3 3 1 4 1 1 4 3

TOSCANA 8 8 6 5 4 9 1 3 4 9 1

0

5

10

15

20

25

30

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

LOMBARDIA 42 53 49 43 62 53 38 13 18 19 16

EMILIA-ROMAGNA 10 15 24 21 38 39 10 6 8 11 5

PIEMONTE 12 13 10 12 19 14 9 4 5 6 2

VENETO 4 8 14 17 10 11 11 8 7 10 5

TOSCANA 5 3 10 3 12 6 12 5 3 5 1

0

10

20

30

40

50

60

70

17

Figure 13: Number of patent applications in Advanced Manufacturing Technologies (top-5 NUTS 2 regions, 2000-2010) (Source: KETs Observatory / ZEW calculations 2014)

Figure 14: Number of patent applications in Micro- and Nano-Electronics (top-5 NUTS 2 regions, 2000-2010) (Source: KETs Observatory / ZEW calculations 2014)

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

LOMBARDIA 43 40 51 48 54 50 43 25 34 48 24

EMILIA-ROMAGNA 44 26 29 41 26 32 37 36 31 29 33

PIEMONTE 28 29 41 42 40 42 27 29 27 21 12

VENETO 9 20 17 15 22 25 9 26 6 22 11

TOSCANA 5 7 12 7 4 7 4 6 8 5 3

0

10

20

30

40

50

60

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

LOMBARDIA 35 29 46 26 28 28 17 11 6 22 9

EMILIA-ROMAGNA 5 6 5 4 1 8 3 5 3 3 2

PIEMONTE 12 9 8 15 9 10 6 4 4 10 3

VENETO 4 5 8 6 2 9 3 4 4 10 6

TOSCANA 1 1 2 7 1 2 0 3 1 1 1

0

5

10

15

20

25

30

35

40

45

50

18

Regional case: description of a specific relevant industrial ecosystem, and the policies supporting it

Technological Districts in the Italian regions The regional and national policies mentioned in the previous section have resulted in the set-up of ten Technological Districts in various Italian regions. These districts are of importance for the further implementation of the EU KETs strategy: although some of the district are not explicitly citing key enabling technologies, all can be correlated to the six KETs.

15

Table 3: Technological Districts in the Italian regions

Italian Region Technological District Website

Campania Technological district on Polymeric and Composite Materials

http://www.imast.biz/

Emilia-Romagna HI-MECH-high-tech district of Networked Laboratories for Advanced Mechanics

http://www.hi-mech.it/

Friuli-Venezia Giulia

Molecular Biomedicine http://www.cbm.fvg.it/

Lazio The high-tech Aerospace District http://www.lazio-aerospazio.it/

Liguria Integrated Intelligent Systems http://www.siitscpa.it/

Lombardy Advanced Materials http://hubmiur.pubblica.istruzione.it/web/ricerca/ricerca-internazionale/technological-district/lombardia

Biotechnologies

Information and Communication Technologies

Veneto Veneto NanoTech http://www.venetonanotech.it/it/

Piedmont Torino Wireless http://www.torinowireless.it/

The main criteria adopted for the creation of new technological districts are: • The availability of a well-structured project incorporating extended foresight studies in the chosen

area of interest, the definition of vision, mission and of the regulatory processes for the management, rules for the protection and distribution of intellectual property.

• The coherence of the project with the strategic fields identified in the "guidelines" of the national S&T policy.

• The participation in the district of public stakeholders (university and/or research bodies) provided with the necessary experience in the field of interest and a background of collaboration with industrial partners.

• The presence in the proposed district of private relevant stakeholders, i.e industries with a long record of activity in the field, willing to establish a joint collaboration with public actors, and whose activity is mainly located in the same regional and local environment.

• The existence of a group of individual leaders, with proven experience in the field, belonging to the private and the public partners.

• A well-defined structure for the governance of the district, which should involve the main stakeholders and regional and local institutions (i.e. regional or municipal authorities).

• A definite and explicit participation of private foundations, venture capital or similar organisations able to provide seed money or early stage capital to foster the spin off creation.

• A definite legal entity, "ad hoc" created to represent and manage the new district.

15

Note that there are also National Technological Clusters addressing KETs (see www.researchitaly.it).

19

The case of Emilia-Romagna The Technology District on Molecular Biomedicine in in Emilia Romagna is implemented by means of a public-private company called Cluster in Biomedicine (CBM), established in 2004. It was founded with the ambitious mission of acting as a bridge between public research and industry in the important sector of “personalised medicine”. It was set-up with the following goals: • Identify and define the primary stages of capital required to drive the development of science-based

businesses. • Increase the quantity and quality of Friuli Venezia Giulia’s pre-seed, seed and early stage deal flow,

capital available to fund the flow and venture capital professionals targeting and investing in the deal flow.

• Encourage local government entities, foundations, corporations, pension funds, philanthropists, individual investors and other sources of capital to expand their involvement as providers of pre-seed, seed and early stage risk capital.

CBM coordinates the Technology Cluster in Biomedicine of Friuli Venezia Giulia, through a framework agreement signed and financed by the Ministry of Education, University and Research and the Friuli Venezia Giulia Region. Located in Trieste within the AREA Science Park, and with laboratories operating in the main regional scientific institutions, CBM manages a network of science centres, companies, governmental bodies, development agencies and financial partners in order to stimulate and accelerate the process that transforms a “scientific idea” into a “product” (a drug, new therapy, new diagnostic system), to the social and economic development of the territory, as well as to the benefit of citizens and society. CBM’s winning strategy is aimed at creating synergies between research, training and technology transfer, by involving entrepreneurs, researchers and students in a series of actions and services. Research at CBM covers Genomics, Bio-Nanotechnology, and Optical Imaging Research. CBM, as coordinator of the regional cluster in biomedicine, aims to accelerate the economic growth in Friuli Venezia Giulia through the promotion of innovative early stage businesses and ideas into venture-ready companies providing a continuum of resources to entrepreneurs and the community.

Literature AIRI (2013) Key Enabling Technologies: their role in the priority technologies for the Italian industry. Bertamino, F., R. Bronzini, M. De Maggio and D. Revelli (2011), Local policies for innovation: the case of technology districts in Italy, Bank of Italy. Bellandi, M. and A. Caloffi (2013) System-based policies in Italy: From industrial districts to technological clusters. EC (2014) Regional Innovation Monitor, http://ec.europa.eu/enterprise/policies/innovation/policy/regional-innovation/. EC (2014) Innovation Union Scoreboard ERAWATCH (2013), Country report Italy, http://erawatch.jrc.ec.europa.eu. EUROSTAT (2013) News release Euroindicators. MiSE, 2013, http://www.sviluppoeconomico.gov.it/, Ministry of Economic Development. MIUR, 2013, http://www.istruzione.it/ and http://www.researchitaly.it/, Ministry of Education, University and research. OECD (2012) Science, Technology and Industry Outlook. OECD (2013) Economic survey Italy.