october 27, 2011, asm, chisinau

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Innovation Strategy of the Republic of Moldova – First Observations and Comments on Objectives (Part D, Firms)and Potential Ways of Implementation

October 27, 2011, ASM, Chisinau

Fraunhofer Center for Central and Eastern Europe MOEZMathias Rauch, Deputy Director

Member of the UNECE Team of Specialists on Innovation and Competitiveness Policies

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Structure of Presentation

Approaching the strategy: key questions and sequential breakdown

1

Strategy objectives (Part D, Firms): 2.1 General objectives2.2 Specific objectives2.3 Necessary measures for achieving the objectives2.4 Next Steps: Development of Programs

Conclusion and key messages

2

3

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Key Messages

1. BE AMBITIOUS, BUT REALISTIC!

2. Complicate your economy! (Modernization, Diversification,

Value added, Complexity)

3. KEEP IT SIMPLE! Importance of transparency and simplicity of

implementation and administration of the Strategy and

subsequent programs cannot be overestimated.

4. Activities (Programs) of the Strategy need further elaboration

5. Monitoring and evaluation are key to success! Constant

improvements possible, i.e. in terms of output, outcomes and

impact of the Strategy and subsequent programs

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Selecting Appropriate Tools and Mechanisms for the Innovation Strategy

Key questions:

Which tools and mechanisms are appropriate for finalization, implementation, monitoring and evaluation of the strategy?

What can be learned from similar cases elsewhere?

Approach: Complex structure and functioning mechanisms of the strategy can be made more transparent ( logic

chart)

To fully comprehend the strategies’ internal logic a sequential breakdown is helpful:

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Logic Chart of the Innovation Strategy (Part D, Firms)

Mission

Activities (Measures, Programs,

Instruments)

Innovation and entrepreneurship based development, competitive economy

Text on general objectives, 12 specific objectives named, indicators defined

(1) Should be well designed to specifically serve the (one respective!) objective

(2) Should concentrate on framework conditions, investments into infrastructure, no sector focus

(3) Business support services (coaching, finance, …)(4) Education and training for entrepreneurs and

work force

Targets (Objectives)

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Logic Chart of the Innovation Strategy (Part D, Firms)

Output

Outcome

Impact

(1) …(2) …(3) …

(1) …(2) …(3) …

(1) Modernization, diversification of the economy(2) Enhanced competitiveness(3) Additional employment and tax revenues

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1



2

3

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Good starting point, already taking into account:General objective aims to foster the development of innovative companies, with high flexibility and technological excellence;Absorb already tested technologies, prepare specialists in established areas, and continue technology and product development;Non-technological and organizational innovation, innovation culture and absorptive capacity;Facilitate companies’ access to public research infrastructure and stimulate science-industry partnerships;Support and stimulate cooperation between R&D institutions and companies, with positive impact on company development and implementation of R&D results;Companies with high technological capacity must be supported at all stages of development of innovative technologies;Business internationalization and export orientation as key growth options, while also focusing on local opportunities in the Republic of Moldova.

2.1 General Objectives (Part D, Firms)

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D1. Increasing business expenditure on R&D and innovation (BERD) to the level of EU27 average (year 2009: 1.25%) by 2020;

That means from zero to hero! None of the EU-10 countries reaches that level!

D2. Increasing the share of SMEs developing in-house innovation activities to at least 40%;

D3. Increasing the share of SMEs implementing innovative products or processes to at least 35%;

D4. Increasing the share of SMEs developing joint innovative activities with other firms to at least 10% which will ensure the emergence of important network synergies in the national R&D and innovation systems;

2.2 Specific Objectives (Part D, Firms) (1)

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D5. Increasing the number of public-private publications to achieve at least 40 per 1 million population, in correlation with the increasing co-financing of R&D by the public and private sector;

Very ambitious! Average EU-15 (year 2008) is 43.4! Who is going to be the private business counterpart? (See also comment on BERD)

D6. Increasing the number of patent applications to at least 5 patents per EUR 1 billion GDP;

A patent has no per se value. Cost-benefit analysis, mechanisms for exploitation of IPR and commercialization necessary

D7. Increasing the number of applications for trade mark registration to at least 10 applications per EUR1 billion GDP; See comment above

D8. Increasing the number of requests for community designs to at least the double of the current level; See comment above


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D9. Increasing the involvement in knowledge-intensive activities of at least 15% of employees in real economy.

D10. Increasing the share of medium and high technology production exports to 35 % of total exports;

D11. Increasing the share of knowledge-intensive services to at least 50% of exports;

D12. Increasing the share of foreign sales of patents and licenses to at least at least 0.5% of GDP.


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Necessary measures to be undertaken to achieve specific objectives are:

Encouraging young people to open firms, improving of the business people’s image, implementation of motivating programs, and support for the opening of new businesses.Points to incentive schemes and favorable framework conditions, detailed policy programs needed

Measurement and stimulating the achievement of productivity level of the workforce to the average European level.Creation of support mechanisms and stimulating Moldovan companies to import advanced high tech of productionCreating advisory infrastructure of the firms on various aspects of innovation;Improving business management capabilities by supporting implementation of new forms of management and non-technology innovations.

2.3 Measures (Part D, Firms) (1)

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Necessary measures to be undertaken to achieve specific objectives are:

Facilitating the access to finance;Implementation of access instruments to researching infrastructure.Stimulating the development of research within the companies, especially in big ones;Stimulating the implementation of non-technological innovations;Developing mechanisms to promote: innovational marketing, internationalization, innovation brokerage;The introduction of innovation as a priority within the national programs of entrepreneurship support.

How shall these measures be substantiated and implemented? Detailed Policy Programs Needed!

2.3 Measures (Part D, Firms) (2)

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2.4 Next Steps: Development of Programs

Implementation and administration procedures of the subsequent programs should be as less complex and time-consuming as possible

Selection criteria/process should be transparent and comprehensible for applicants, many procedures can be based on competition

Data collection and indicator system for assessing the outcomes of the programs can be enhanced (e.g. further indicators, including control groups); also consider measuring outputs and impacts

High quality evaluation at low cost is based on integration of evaluation in the design of the programMonitoring and evaluation are viewed as necessary to continuously revise and improve the Innovation Strategy and its implementation

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1



2

3

© Fraunhofer MOEZ

Key Messages

1. BE AMBITIOUS, BUT REALISTIC!

2. Complicate your economy! (Modernization, Diversification,

Value added, Complexity)

3. KEEP IT SIMPLE! Transparency and simplicity of implementation

and administration of the Strategy and subsequent programs can

be improved

4. Activities (Programs) of the Strategy need further elaboration

5. Monitoring and evaluation are key to success! Constant

improvements possible, i.e. in terms of output, outcomes and

impact of the Strategy and subsequent programs

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Monitoring and Evaluation System – A Potential Baseline

Integrated approach for systematic monitoring

and evaluation allows for

better steering and

planning

Continuous data collection and analysis allows for flexible reactions

Aims at assessing the direct impacts of particular priority axes within the support programs

Puts the program impacts in relation to other national/ regional policy targets

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EU-10 at a Glance: Economy and Human Capital

Competitiveness and Knowledge Intensity of Economy

Latest Data Annual growth

rate , in %

GDP per Employed Person, in €EU10 21.060 (2010) 7,9 (2004-10)

EU15 63.509 (2010) 1,6 (2004-10)

Gross Domestic Investment QuotaEU10 20,5 (2010) -1,0 (2004-10)

EU15 18,3 (2010) -1,0 (2004-10)

Degree of Openness: ½ *(Exports + Imports) in % of GDPEU10 57,3 (2010) 1,3 (2004-10)

EU15 38,7 (2010) 2,1 (2004-10)

Salary per employee, in €EU10 10.783 (2010) 7,5 (2004-10)

EU15 36.979 (2010) 1,7 (2004-10)

Foreign Trade Saldo in % of GDPEU10 0,5 (2010) —EU15 0,9 (2010) —

Average FDI Inflows between 2004 and 2009 in % of GDP EU10 7,1 (2004-09)

EU15 4,0 (2004-09)

High- and Medium-High-Tech-Exports in % of all ExportsEU10 54,7 (2010) 1,7 (2004-10)

EU15 56,0 (2010) -1,1 (2004-10)

Patents and Licencing Revenue from abroad in % of GDPEU10 0,21 (2010) 7,5 (2004-10)

EU15 0,56 (2010) 6,6 (2004-10)

Gross Value Added in Knowledge Intensive Services in % of overall Gross Value Added

EU10 31,9 (2008) 0,5 (2004-08)

EU15 46,1 (2008) 0,6 (2004-08)

Gross Value Added of High- and Medium-High-Tech-Industries in % of overall Gross Value Added

EU10 7,2 (2009) -0,4 (2004-09)

EU15 6,5 (2009) -3,3 (2004-09)

Researchers in Private Business Sector in % of all Employed Persons

EU10 0,11 (2009) 5,5 (2004-09)

EU15 0,37 (2009) 2,3 (2004-09)

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EU-10 at a Glance: Research and Innovation

R&D (1)Latest Data

Average Annual Growth Rate in %

Gross Expenditure on R%D in % of GDP (GERD)EU10 0,9 (2009) 3,5 (2004-09)

EU15 2,1 (2009) 2,1 (2004-09)

R&D Expenditure Government in % of GDP (GOVERD)EU10 0,24 (2009) 1,2 (2004-09)

EU15 0,27 (2009) 2,4 (2004-09)

R&D Expenditure in Unternehmen in % of GDP (BERD)EU10 0,41 (2009) 3,8 (2004-09)

EU15 1,31 (2009) 1,6 (2004-09)

R&D Expenditure in Higher Education Sector in % of GDP (HERD)

EU10 0,23 (2009) 6,2 (2004-09)

EU15 0,50 (2009) 3,6 (2004-09)

R&D Expenditure by State in % of GERDEU10 50,5 (2008) 0,3 (2004-08)

EU15 33,3 (2008) -1,2 (2004-08)

R&D-Finanzierung durch Unternehmen in % of GERDEU10 40,4 (2008) 0,4 (2004-08)

EU15 55,2 (2008) 0,3 (2004-08)

R&D-Finanzierung durch das Ausland in % of GERDEU10 6,6 (2008) -1,3 (2004-08)

EU15 9,0 (2008) 1,4 (2004-08)

R&D Personel in % of Employed EU10 0,58 (2009) 1,4 (2004-09)

EU15 1,32 (2009) 2,8 (2004-09)

Researchers in % of R&D-PersonelEU10 73,1 (2009) 1,5 (2004-09)

EU15 61,1 (2009) 0,5 (2004-09)

Patentanträge (EPO) per Mio. EinwohnerEU10 7,0 (2010) 11,8 (2004-10)

EU15 165,1 (2010) 2,2 (2004-10)

Patenterteilungen (EPO) per Mio. EinwohnerEU10 0,4 (2010) 7,5 (2004-10)

EU15 69,5 (2010) -1,4 (2004-10)

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EU-10 at a Glance: Research and Innovation

R&D (2)Aktueller Stand

Jahreswachstumsrate,

in %

Markeneintragungen (WIPO) per Mio. EinwohnerEU10 715,6 (2009) -1,8 (2004-09)

EU15 1354,8 (2009) -1,7 (2004-09)

Industrielle Geschmacksmuster (WIPO) per Mio. EinwohnerEU10 65,6 (2009) 6,3 (2004-09)

EU15 259,4 (2009) 4,3 (2004-09)

Wissenschaftliche Publikationen per Mio. EinwohnerEU10 592,6 (2010) 7,8 (2005-10)

EU15 1501,8 (2010) 3,9 (2005-10)

Patentanträge (EPO) per Mio. € R&D-ExpendituresEU10 0,09 (2009) 0,6 (2004-09)

EU15 0,27 (2009) -2,0 (2004-09)

Patentanträge per 1000 ForscherEU10 3,9 (2009) 9,8 (2004-09)

EU15 43,4 (2009) -2,3 (2004-09)

Publikationen per ForscherEU10 0,33 (2009) 7,4 (2005-09)

EU15 0,42 (2009) 1,0 (2005-09)

Industrielle Geschmacksmuster per R&D-Expenditures in Unternehmen (BERD)

EU10 1,93 (2009) -6,0 (2004-09)

EU15 0,72 (2009) 1,4 (2004-09)

InnovationInnovation Expenditures of innovative companies in % of turnover

EU10 2,1 (2008) -6,5 (2004-08)

EU15 2,2 (2008) -6,8 (2004-08)

Turnover share of new-to-market/new-to-firm Innovations in %

EU10 13,3 (2008) 1,5 (2004-08)

EU15 13,0 (2008) -1,7 (2004-08)

Innovative companies in % of all companies EU10 34,8 (2008) —EU15 54,9 (2008) —

Companies with technological innovations in % of all companies

EU10 24,0 (2008) -0,7 (2004-08)

EU15 43,5 (2008) 0,2 (2004-08)

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EU-10 at a Glance: Two Spotlights

International Networks and Mobility

Aktueller Stand

Jahreswachstumsrate, in %

Internationale wissenschaftliche Ko-Publikationen per Mio. Einwohner

EU10 232,5 (2008) 6,5 (2004-08)

EU15 651,7 (2008) 7,3 (2004-08)

Expenditures on transnational koord. Research projects in % of public R&D expenditures

EU10 2,1 (2008) —

EU15 4,3 (2008) —

Im Ausland geborene HRST in % aller HRSTEU10 2,1 (2009) -2,0 (2004-09)

EU15 11,8 (2009) 6,8 (2005-09)

Anteil of Hochschulforscher mit internationaler Mobilitätserfahrung in %

EU10 44,1* (2009) —

EU15 55,9* (2009) —

Im europäischen Ausland Studierende in % aller StudentenEU10 3,1 (2009) 6,2 (2004-09)

EU15 2,5 (2009) 5,1 (2004-09)

Bevölkerungsanteil mit Englisch-Sprachfertigkeiten in %EU10 25,3 (2007) —EU15 58,1 (2007) —

Knowledge TransferÖffentlich-Private Ko-Publikationen per Mio. Einwohner

EU10 8,8 (2008) 12,0 (2004-08)

EU15 43,4 (2008) 1,6 (2004-08)

Arbeitsplatzmobilität of HRSTEU10 4,9 (2009) -1,0 (2004-09)

EU15 6,6* (2009) 4,5* (2004-09)

Unternehmensfinanzierte Forschung bei Staat und Hochschulen in % of GERD

EU10 4,0 (2008) -4,6 (2004-08)

EU15 2,5 (2008) 4,7 (2004-08)

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EU-10 at a Glance: Two Determinants

Societal Acceptance of Science and Technology (S&T)

Aktueller Stand

Jahreswachstumsrate, in %

Trust in S&T, Share of high trust in %EU10 66 (2010) -3,3 (2005-10)

EU15 65 (2010) -3,3 (2005-10)

Interest in S&T, Share of high interest in %EU10 20 (2010) -0,2 (2005-10)

EU15 33 (2010) 0,4 (2005-10)

Venture Capital (VC)

VC for early starting phase in % of GDPEU10 — —

EU15 0,017 (2009) -5,3 (2004-09)

VC for company growth investments in % of GDPEU10 — —

EU15 0,075 (2009) -2,2 (2004-09)

VC for Mergers and Akquisitions in % of GDPEU10 — —

EU15 0,103 (2009) -16,6 (2004-09)

october 27, 2011, asm, chisinau

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