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AUDIT REPORT

Knowledge Intensive Services


Supply and Demand in Portugal

Agência de Inovação
September 2010
Index:

1. INTRODUCTION 4

CONTEXT 4

OBJECTIVES 5

PARTNERSHIP 5

INNOVATIVE ASPECTS OF THE PROJECT 6

2. REGIONAL SUPPLY - COMPANIES 8

2.1 Companies typology 8

2.2 Services Provided 10

2.3 Clients 11

2.4 Human Resources 13

2.5 Barriers 14

2.6 Supports 15

2.7 Networking and Internationalization 17

2.8 Future 18

REGIONAL SUPPLY - Universities 19

2.9 Universities typology 19

2.10 Services Provided 19

2.11 Clients 20

2.12 Human Resources 22

2.13 Barriers 22

2.14 Supports 23

2.15 Networking and Internationalization 24

2.16 Future 25

REGIONAL DEMAND 26

3. REGIONAL DEMAND 27
3.1 Companies details 27

3.2 Innovation 29

3.3 KIS Service Requirements 30

3.4 Barriers 33

3.5 Supports 34

3.6 Future 35

4. CONCLUSIONS 36

4.1 MAIN RESULTS FROM THE AUDIT 36

Supply 36

Demand 36

4.2 MAIN RESULTS FROM MATRIX OF COMPETENCIES SUPPLY-DEMAND KIS SECTOR - Annex
1 37

4.3 MAIN RESULTS FROM MATRIX OF SECTOR SPECIALISATION OF THE DEMAND AND
SERVICES REQUESTED – Annex 2 37

5. RECOMMENDATIONS 38

CREATION OF A NATIONAL STRATEGY FOR KIS SECTOR: 38

PROMOTE AND IMPROVE THE LINK BETWEEN COMPANIES AND UNIVERSITIES: 38

PROMOTE AN INNOVATION CULTURE: 38

SIMPLIFICATION OF THE PROCEDURES IN THE NATIONAL SUPPORT PROGRAMS: 39

6. ANNEXES 40

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Annex 1 - MATRIX OF COMPETENCIES SUPPLY-DEMAND KIS SECTOR 41

Annex 2 - MATRIX OF SECTOR SPECIALISATION OF THE DEMAND AND SERVICES REQUESTED 42

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1. INTRODUCTION

CONTEXT

The achievement of the Lisbon Strategy Target Objectives demands the delivery of innovative efforts in
order to overcome the European paradox on terms of Technology and Knowledge Transfer (TKT), if
Europe is to become the most competitive economic area of the world.

Different cultural mindsets among Knowledge providers and SMEs hinder TKT at the EU level, and
specifically at the Atlantic Area, as pointed out in the Programme's SWOT analysis (pages 13 and 26).

Knowledge Intensive Services (KIS) such as ICT services, R&D services, management and strategic
consultancy services, business intelligence services,…might overcome these limitations to an effective
TKT by the interfacing among SMEs and Knowledge providers, and supporting SME's on their
innovation processes.

Thus, KIS are often considered to be one of the hallmarks of the Knowledge based Economy. The
performance of KIS does affect the performance of those organizations that are their clients and thus the
dynamisation of KIS sector impacts on the whole of the regional and EU economies. A Knowledge
Economy demands an increase on the number of KIS providing high added value products and services
to the EU and to the global economic players.

Moreover, KIS can be pointed out as a particularly dynamic and rapidly growing area within the Services
sector, and has recently been pointed out as one of the main priorities for innovation policy at the EU
level, as stated in the EC Communication's "Putting knowledge into practice: a broad based innovation
strategy for the EU" and in the Commission’s Working Document "Towards a European Strategy in
support of innovation in services".

Notwithstanding, the development of KIS on the Atlantic Area regions is divergent, even though some
common trends on their evolution can be identified: ongoing growth in demand and supply,
concentration, convergence and specialization tendencies, internationalization imperative,…

Even if subject to private market trends, the promotion of such services from the public policy level is
becoming more and more a pressing issue, as the KIS impact on regional economies gets evident. On

Audit Market on Knowledge Intensive Services – Portugal


the other hand, even if demand on such services is rapidly increasing, there are some mistrust and lack
of knowledge issues among SMEs on the potential benefits involved in the use of KIS, that might be
hindering the fully exploitation of available KIS services in order to fully reach the region’s potential.

Thus, ATLANT-KIS intends to provide some leverage to the KIS sector in the Atlantic Area, proposing
the development of KIS enabling policies, bridging the gaps on the demand and supply of such services
at the regional and transregional level, and promoting their interaction and networking at the Atlantic
Area.

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OBJECTIVES

The overall goal of ATLANT-KIS is to enhance the Knowledge and Technology Transfer and innovation
processes on SMEs through the promotion and co-operation of Knowledge Intensive Services (KIS) at
the Atlantic Area.

Additionally, and as a longer term goal, it also aims to contribute to the development of Clusters of KIS
at the Atlantic Area, that might help identify the area as an excellent one in the supply of KIS.

Specific objectives of the project:

1) To design a methodology for the mapping of regional and transregional demand and supply of KIS,
transferable to other regions.
2) To develop and disseminate 7 Audits on KIS demand and supply from involved regions.
3) To design a methodology for the identification and transfer of Best Practices at the regional policy
level, enabling the promotion and dynamisation of KIS.
4) To identify, exchange and disseminate to other EU regions Best Practices resulting from successful
regional experiences on the field of KIS promotion and dynamisation.
5) To transfer the Best Practices identified to the regional policies of involved regions, and to experiment
new models and approaches based upon the latter, aimed at the promotion and dynamisation of KIS.
6) To create stable communication links among KIS of involved regions, to foster their networking and
cooperation by the development of a collaborative platform, open to all KIS from the Atlantic Area.

PARTNERSHIP

Partnership is made up of the following organizations, covering all the eligible countries of the
Programme: Spain, France, Portugal, UK and Ireland.

1. DG Enterprise, Department of Innovation, Business and Employment, Navarra Government,


Spain.
2. Bretagne Innovation, Bretagne, France.
3. Consellería de Innovación e Industria, Xunta de Galicia, Spain.
4. Agência de Innovaçao, Portugal
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5. Devon and Cornwall Business Council, United Kingdom.
6. South and Eastern Regional Assembly, Ireland.
7. Westbic, Ireland.
8. Borders, Midlands and West Regional Assembly, Ireland.

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INNOVATIVE ASPECTS OF THE PROJECT

The overcome of the European Paradox demands innovative approaches in order to turn the excellent
Research and Development efforts of the EU into the global market in more rapid and end-users
conscious ways.

ATLANT-KIS deals with a priority issue for the EC, just recently pointed out as one of the main
challenges for Europe. EC Communication "Putting knowledge into practice: a broad based innovation
strategy for the EU" specifically prioritizes the non technological innovation in the Services Sector,
resulting on the Commission Staff Working Document "Towards a European Strategy in support of
innovation in services".

The Innovation Policy Project in Services under the PRO-INNO Europe Initiative, also concludes that
there is a need for broad-based transnational collaboration that would include policy, strategic and
operational level activities.

Recommendations arising from these initiatives comprise the following, all of them addressed by
ATLANT-KIS proposal, becoming thus the first transnational co-operation project at EU level addressing
this topic:

• Development of more balanced innovation policies promoting non technological innovation.


• Development of policies with specific support mechanisms for innovative services with high
growth potential.
• Promoting trans-national cooperation on “better policies” in support of innovation services in
Europe.
• Definition of broad-based innovation policies consisting of a balanced mix of supply and demand
side measures.
• Support of service exports as drivers that policies need to reflect. Also publicprivate partnerships
are likely to play an important role in service innovation Policy.
• Regional policies and cluster policies acting as platforms for effective innovation policy delivery

At present time, an analysis of National Reform Programmes shows that only a few Member States
have so far developed specific policies or measures in support of innovation in the services sector.

Member States from the North West of Europe like Finland, Germany, UK, Ireland and Netherlands
show the more advanced policies in this field. The Atlantic Area of the EU lags in this approach, so
ATLANT-KIS might be the best chance to start assessing potentialities and synergies on the innovation
of the services sector field from a transnational perspective on the Atlantic Area.

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The partnership of the project is composed of powerhouses on the promotion of innovation on the
services sector and on the promotion of KIS such as UK and Ireland, and regions like Galicia, Navarra,
Bretagne or Portugal which might benefit from the experiences from the former. Ultimately the project
will inform and benefit the development of specific Innovation Policies on involved regions, valorizing the
transfer of Best Practices identified among region partners.

The innovativeness of the proposal also extends to the strategy and approach selected. We point out
the following innovations:

• Transnational approach: ATLANT-KIS tackles a European problem from a bottom up


perspective, trying to assess and diagnose the state of the art at each region, in order to identify
best practices arising from their policies in order to gather a pool of Best Practices whose
transferability will be achieved on an experimentation phase. Transnational Clustering and
Networking will be one of the specific policy issues addressed in the study and transfer stages.
Resulting Best Practices Guide and Transfer Implementation Handbook will represent a corpus
of soft and hard law policies tailored to the Atlantic Area context.

• Policy and Operational level: The project will influence both the Policy level, by the provision of
Best Practices and their transfer to the regional level, and the more operational perspective of

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the KIS and Services sectors, delivering useful tools (audits, KIS Platform) for the promotion and
co-operation of KIS at the regional and transregional level. To this end, the project will also
involve KIS demanders and knowledge sources, providing practical outputs on their behalf.

• Horizontal approach: ATLANT-KIS is aware that other new complementary initiatives are being
launched at the EU level dealing on KIS and on innovation on the services sector, such as the
KIS-Innovation Platform, described on section 4. From its inception the project has chosen to
adopt an open and broad approach trying to gather momentum on the pulling of the KIS and
Services Sector on the political innovation agendas, so actively seeks the co-ordination and
synergistic effects of matching the project with other such initiatives. To this end, a fluent
communication will be established with the managers of KIS-Innovation Platform, actively
attending their meetings for the identification of specific areas of cooperation.

• Tools: Besides the more traditional methodologies for the identification of Best Practices, the
project proposes the use of more innovative tools, like Audits on KIS demand and supply that
will imply a thorough assessment and involvement of the KIS sectors at the regional level and
Mappings on policy issues affecting KIS sector.

As an innovative and crucial tool completing the identification of Best Practices the delivery of Best
Practices Transferability assessments is foreseen. These will assess all the economic, geographical and
societal drivers affecting or threatening the success on the transfer of a given policy Best Practice,
allowing the development of a Best Practices Transfer Implementation Handbook. Finally the virtual KIS
– Platform will also represent an innovative ICT based solution aimed at target groups highly proficient
on the use of such technologies.

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2. REGIONAL SUPPLY - Companies
For this study were contacted 1404 companies that offer Knowledge Intensie Services. Were received
177 answers, 25 of which were responded by Universities and associations.

2.1 Companies typology


Chart 1 Percentage of employees working at the
company The majority of KIS companies that answered are micro
and small companies (89,5%), with less than 10 years
3% of existence. Only 11% are medium and large
8% 1 - 10 companies.
11-50
As can be seen on chart 2, in 2004, the number of KIS
33% 51 - 250 providers was 3665 and in 2006 there were 15485
56%
companies. This increase was more than triple, so it is
More than 250 not surprising that most surveyed companies are less
than 10 years old.1

Almost 90% are located in North, Centre and Lisbon


region of Portugal. About 45% of the companies have,
Chart 2 Evolution of the number of High-tech- in average, 1 or 2 branch offices mainly located in
1
intensive services (KIS) from 2003 to 2006 North and Lisbon regions.

13,8% of the companies have offices beyond national


15485
boundaries. The main countries chosen to create
subsidiaries are Spain, Angola and Brazil.

3665
3194 Audit Market on Knowledge Intensive Services – Portugal
2003 2004 2006

1
Eurostat Statistical books – Science, technology and innovation in
Europe 2008,2009,2010

8
Chart 3 Companies with specific R&D service/ HUMAN RESOURCES
department, %

61%
Most of the surveyed companies have between 1-10
employees. Only 11% are medium and large
39% companies.

61% of companies have a specific R&D department


and small companies, in average, have 4 persons in
fte2. working in this activities.

Without R&D dep. With R&D dep.


Although not having a specific department, 48,8% of
the companies have human resources allocated to
R&D activities. Noticing that 25% of micro companies
have between 4 and 6 employees assign to it.

TURNOVER
Chart 4 Turnover, %
“In 2006, Portugal counted 15585 companies in high-
More than 5000 k€
tech knowledge intensive services with a total turnover
8%
of 11455 million”.3
1000 - 5000 k€ 20%
500 - 1000 k€ 15% Among the companies covered, about 30% have a
250 - 500 k€ 13%
turnover less than 100 k€. This could be explain by the
fact of the majority of the surveyed companies were
100 - 250 k€ 15% micro and young companies with less than 10 years.
Less than 100 k€ 30%
The turnover coming from exports from the small,
medium and large is respectively 16%, 26% and 58%
of the total turnover.

Chart 5 Turnover evolution on the last three years, %


The income evolution for the majority of the companies
that answered has been progressive on the last three
years.

11% Audit Market on Knowledge Intensive Services – Portugal


Progression There was a growth on the total turnover of the
8%
companies offering KIS in Portugal between 2004 and
6% Regression
2006, progressing from 10292 million to 11455 million4.
Stagnation
75%
Ns/Nr

2
Fte. Full time equivalent
3
Eurostat Statistical books – Science, technology and innovation in
Europe 2010
4
Eurostat Statistical books – Science, technology and innovation in
Europe 2009,2010

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Chart 6 Services provided by company size, %
2.2 Services Provided

32,8% 27,8% 27,8%


Most of the provided services are referred to R&D
activities with 44,7% of the total services offered,
followed by management and others with 32,3%. The
44,2% 47,2%
55,6% remaining 23% are referred to ICT services (chart 8).

10% of the total services offered are Project


23,0% 25,0% 16,7% identification and management followed by Design and
development of engineering projects with 9% of the
Small Medium Large total.

ICT R&D Management

Chart 7 Knowledge Intensive Services provided by the companies, %

ICT Consultancy 8%
ICT Services

Telecom Network Connections 2%


Implementation of electronic data interchange systems 6%
Others 7%
Project identification and management 10%
Design and development of engineering projects 9%
Innovation diagnosis and management 3%
R&D Services

Tecnology Transfer 6%
Open innovation, dynamization of R&D 7%
Assistance on intellectual and industrial property… 1%
Laboratories 1%
Prototyping and design services 4%

Audit Market on Knowledge Intensive Services – Portugal


Others 3%
Management and strategic consultancy services 6%
Business intelligence serviçes, competitive intelligence 5%
Management and others

Business modelling 2%
Market research 3%
Human resources 2%
Communication Strategies 3%
Assistance for quality processes 3%
Environmental and Energy management 3%
Organization and processes-based management 4%
Others 1%

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Chart 8 Are your services oriented/specializes in one
2.3 Clients
specific sector? , % of answers
5% 51% of the companies that answered don’t provide
services oriented to one specific sector of the economy.

No
TARGET SECTORS
Yes
44% 51% The main target markets of KIS providers are Services
Ns/Nr
for companies with 9%, followed by Energy and ICT,
both with 7% of the total services.

Sectors where there is less supply of KIS are Minery


and Fishing both with 1%.

Chart 9 Main target markets of companies providing KIS, %

Electricity / Electronics 5%
Energy 7%
Cement / Lime / Plaster 2%
Rubber and Plastic 2%
Chemicals / Pharmaceutical 5%
Paper and wood 3%
Industry

Agro-food / Food / Drinks 5%


Automobile / Transport 5%
Textil 2%
Other manufacturing 3%
Metal industry / engineering 5%
Minery 1%
Other industries 5%
Transport 4%
Services for Companies 9%
Medical devices 2% Audit Market on Knowledge Intensive Services – Portugal
Services

Banking 4%
ICT 7%
Communication 4%
Printing / Publishing 2%
Tourism 4%
Constru

Construction 5%
ction

Public Works 4%
Agriculture

Agriculture 2%
Forestry 2%
Fishing 1%

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CLIENT´S LOCATION
Chart 10 Client’s location, in Portugal, %.
75,7% of companies clients are located in North,
Centre and Lisbon regions.

8% North
Internationally, the main clients are located in
7% Centre
29% European Union and also in Portuguese speaking
9% Lisbon countries like Brazil and Angola.
Alentejo
CLIENT’S TYPOLOGY
27% 20% Algarve
Others Clients of surveyed companies are distributed equally
between large (31%), medium (28%), small (24%) and
micro (17%) enterprises.

TYPE OF INNOVATION PROMOTED

Regarding the type of innovation promoted with clients


over the last three years, more than a third has been
on product/service innovation (35,9%). 11,3% are
related to development phase followed by
implementation and conception phase with 10% and
9,3% respectively.

Process innovation comes in second with 23,8% of the


total followed by Marketing innovation, 13,8%, and
Organizational or social innovation, 12,2%.

Chart 11 Type of innovation promoted with clients over the last three years by phase, %

0,0% 5,0% 10,0% 15,0% 20,0% 25,0% 30,0% 35,0% 40,0%

Product/Service Innovation 5,3% 9,3% 11,3% 10,0% 1,6%

Process Innovation 3,8% 6,1% 7,2% 6,8% 2,7%

Audit Market on Knowledge Intensive Services – Portugal


Marketing Innovation 3,7% 3,1% 3,3% 3,7% 4,9%

Organizational or social Innovation 1,0%


2,9% 4,2% 4,1% 5,1%

Commercialization Conception Development Implementation No

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Chart 12 Type of relation established with clients, % RELATIONS WITH CLIENTS

The most common relation between clients and KIS


Co-development 25,1% providers is Partnership (39,9%), followed by
Subcontracting and Co-development with 35% and
Partnership 39,9% 25,1% respectively.

Subcontracting 35,0%

Others 2,8%

Chart 13 Qualification of Human Resources, % 2.4 Human Resources

In 2007, there were more than 144 million jobs in the


MBA/Master/Phd 16%
EU-27, of which, half were in KIS.
Superior 66% About 23.5% of Portugal’s total employment in 2007
was linked to the KIS sector. Noticing that, for the same
Professional course 6% year, 58,7% of the total employment in Portugal was in
the in Services sector5.
Intermediate 9%

Basic 4% Of the companies that responded, 82% of the total


employees have Higher education, while only 13%
have Elementary and Secondary education.

Most employees are allocated on the technical


department followed by management and

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administrative departments.

5
Eurostat Statistical books – Science, technology and innovation in
Europe 2010

13
2.5 Barriers

The main barriers to access the KIS market pointed by


the surveyed companies are Ignorance of the demand
side concerning the offered services (20,5%) followed
by the Lack of visible added-value (18%) and the Price
(10%).

The global crisis made consumers of KIS less receptive


to this kind of services because they are perceived as a
cost instead of an investment. As a result, these
services are not a priority to the companies.
Most of the enterprises believe that the main difficulties
are also the result of the unfair competition of
Universities, governmental entities and large
companies that have advantages only accessible to
them. So, they practice lower prices that hinder market
access for SME’s.
SME’s also express that they have many difficulties to
market their services.
Last but not least, all the bureaucracy involved is an
extra work and it is very time consuming.

Chart 14 Barriers to access KIS market, % of the total barriers mentioned

Price 10,0%

Ignorance of the demand side concerning the offered


20,5%
services

Mistrust on Industrial Property 2,1%

Large companies competition 8,6%

No short - term profitability of the service 4,6%


Audit Market on Knowledge Intensive Services – Portugal
Lack of visible added-value 18,0%

Difficulties to find funding 8,2%

Public sector competition: agencies, laboratories,


7,3%
organisms providing support services

Lack of resources 6,3%

Difficulty to find qualified human resources 6,1%

Low level of qualified human resources of clients 4,2%

Others 4,2%

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Chart 15 Existence of a strategic plan for services, % 2.6 Supports
7,9%
3,9% No STRATEGIC PLAN
0,7%
Yes, but I don't know the
impact A large proportion of the companies surveyed does not
Yes, negative impact
19,7% know if there is a strategic plan for the services sector.
Yes, positive impact Only 24,3% knew its existence but about 81% of these
67,8% did not know what would be the impact for the
Ns/Nr
companies.

Chart 16 Contributions of the strategic plan, % MAIN CONTRIBUTIONS

The main strategic plan contributions mentioned by the


companies are Sector integration (clusterization) with
Supply promotion 31,4%
35,3% followed by Supply promotion with 31,4%. The
Sector integration
remaining 33,3% are from Qualification and training
35,3% and financing for the demand.
(Clusterization)

Qualification and
19,6%
training

Financing for the


13,7%
demand

EUROPEAN SUPPORT PROGRAMS

Chart 17 Percentage of companies that were 70,7% of the surveyed companies believe that
supported by European support programs
European support programs contribute to the
development of KIS.
6%
FP7 The main EU Programs recognized are Seventh
9% Framework Programme (FP7) with 57% followed by
CIP
Interreg with 17%.
17% Interreg
57% Eureka The major advantages, mentioned by the companies
11% that answered, are the partnerships created between
Audit Market on Knowledge Intensive Services – Portugal
Others
national and foreign companies as well as the funding
from the support programs.
These programs promote advantageous synergies
between knowledge and innovation.

On the other hand, there are some aspects to be


improved such as the large amount of bureaucracy and
the dissemination of the European Programs to the
companies.

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Chart 18 Percentage of companies that were NATIONAL/REGIONAL SUPPORT PROGRAMS
supported by National/Regional support programs
Most of the responders indicate that National Strategic
72% Reference Framework (QREN) and Human Potential
Operational Programme (POPH) are the national
programs that more contribute for the development of
KIS.

19% 18%
These national/regional programs contribute to the
12% development of SME’s by giving non-repayable
4% financial support for innovation and R&D activities and
promoting the level of human resources of the
QREN POPH POR SIFIDE Others companies through the program POPH.

However, there are strong restrictions of these


programs to entities in the Lisbon region and to large
companies. The complex bureaucracy is still an issue
in this case.

Chart 19 Application of the support received, % SUPPORT RECEIVED

Over the last three years, 49% of the surveyed


companies were beneficiary of European and/or
Clusterization and National/regional support programs.
12,6%
Networking

Innovation 42,6% The main support program was a national one, QREN,
with 39,3%, followed by an international program, FP7
Internationalization 25,7% with 9%.

Training 12,0% 42,6% of companies that answered use these


programs to develop their innovation activities and
Others 7,1% 25,7% to find and strengthen partnerships with external
entities and companies.

Chart 20 Evaluation of support programs, % EVALUATION OF SUPPORT PROGRAMS Audit Market on Knowledge Intensive Services – Portugal

35,5%
Of the companies that received support, 35,5% rated
31,8% them as Good; 31,8% as Sufficient; 28,2% as
28,2% Insufficient and only 4,5% as Excellent.

4,5%

Excellent Good Sufficient Insufficient

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Chart 21 Percentage of companies associated to a 2.7 Networking and Internationalization
cluster/networking
47% of the surveyed companies are associated to a
72% cluster/ network.
The majority is associated to a national cluster, while
31% are related to an European followed by regional
clusters/ networks with 18%.
31%
18%
11% COTEC, Health Cluster Portugal and TICE.PT are the
4%
main clusters/ networks that surveyed companies are
involved.

COLLABORATION WITH ANOTHER KIS


Chart 22 Collaborations with another KIS provider, PROVIDER
%
73,7% of the responders have already collaborated
Innovation agency / with another provider of KIS while 21,1% never needed
52%
Cotec / Iapmei
such services.
KIS company 51%
75% of the companies have already collaborated with
University 75% Universities, 52% with ADI/COTEC/IAPMEI followed by
other KIS companies with 51%.
Private research centres 18%
The type of collaboration established between the
Public technological
centres
37% surveyed companies and the others KIS providers is
mainly through partnerships, co-development and
Others 9% subcontracting.

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Chart 23 Evolution of the investment in innovation 2.8 Future
for the next three years, %.
In the future, 77% of the companies expect to increase
investment in innovation while only 4% expect to
9% Progression decrease it.
10%
4% Regression
However, there are many factors that have positive
Stagnation and/or negative impact for the future development of
77% the enterprises.
Ns/Nr
For the companies, the external factor that has more
negative impact is the financial situation of the
economy. The Knowledge based economy,
Globalization and Policies to promote the sector are
those that have more positive impact.
One interesting fact is that unemployment shows
almost no impact in the development of the surveyed
companies.

Regarding the internal factors, the Acquisition of new


competencies, the Ability to communicate about the
added value and the Financial resources are those with
the most positive impact to the companies.

Chart 24 Impact of the external factors for the development of the companies, %

Financial situation 42% 54% 4%

Unemployment 12% 32% 56%

Policies to promote the sector 76% 2% 22%

Globalization 88% 5% 7%

Sustainable development / Climate change 53% 5% 43%

Knowledge based economy 93% 1% 5%

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Others 30% 17% 53%

Positive Negative No impact

Chart 25 Impact of the internal factors for the development of the companies, %

Financial resources 67% 22% 10%

Acquisition of new competencies 96% 1% 4%

Ability to communicate about the added value 91% 4% 4%

Ageing of the employees 55% 5% 39%

Others 32% 12% 56%

Positive Negative No impact

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REGIONAL SUPPLY - Universities
Universities typology
Chart 26 Employees working at the company, %
48% of the Universities/ associations have more than
2.9 250 employees. 88% of the responders have a R&D
16% 1 - 10 department where, in average, are allocated 358
employees.
48% 11 - 50
24%
51 - 250 TURNOVER
12% More than 250
Almost one half of the surveyed Universities have a
turnover higher than 1000 k€ and its evolution over the
last three years has been progressive to 44% of the
Chart 27 Turnover, % responders.

More than 5000 k€ 36% 2.10 Services Provided


1000 - 5000 k€ 12%
Most of the provided services are referred to R&D
500 - 1000 k€ 8% activities, with 52% of the total services offered,
250 - 500 k€ 4% followed by management and others with 33%. The
remaining 15% are referred to ICT services (chart 29).
100 - 250 k€ 8%
9% of the total services offered are Technology
Less than 100 k€ 32% transfer, followed by Laboratories with 7%.

Chart 28 Services provided by Universities/ associations, % 1


ICT Services

ICT Consultancy 5%
Telecom Network Connections 4%
Implementation of electronic data interchange systems 3%
Others 3%

Audit Market on Knowledge Intensive Services – Portugal


Project identification and management 6%
Design and development of engineering projects 6%
Innovation diagnosis and management 5%
R&D Services

Tecnology Transfer 9%
Open innovation, dynamization of R&D 5%
Assistance on intellectual and industrial property protection 5%
Laboratories 7%
Prototyping and design services 6%
Others 2%
Management and strategic consultancy services 6%
Business intelligence serviçes, competitive intelligence 2%
Management and others

Business modelling 2%
Market research 3%
Human resources 2%
Communication Strategies 4%
Assistance for quality processes 6%
Environmental and Energy management 6%
Organization and processes-based management 2%
Others 1%

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Chart 29 Are your services oriented/ specialized in 2.11 Clients
one specific sector? , % of answers
56% of the surveyed Universities that answered don´t
44%
provide services specialized in one specific sector of
the economy.
27% 44% 29% Yes
TARGET SECTORS
56% No

The main target markets are Energy and Services for


companies, both with 6,9%, followed by ICT with 6,4%
Large Medium Small of the total sectors.
Printing / publishing is the market where Universities/
associations offer less KIS.

Chart 30 Main target markets, %

Electricity / Electronics 4,7%

Energy 6,9%

Cement / Lime / Plaster 2,1%

Rubber and Plastic 3,4%

Chemicals / Pharmaceutical 4,7%

Paper and wood 4,3%


Industry

Agro-food / Food / Drinks 5,2%

Automobile / Transport 5,6%

Textil 2,6%

Other manufacturing 3,4%

Metal industry / engineering 5,2%

Audit Market on Knowledge Intensive Services – Portugal


Minery 2,6%

Other industries 4,3%

Transport 3,9%

Services for Companies 6,9%

Medical devices 4,7%


Services

Banking 1,3%

ICT 6,4%

Communication 2,6%

Printing / Publishing 0,9%

Tourism 3,4%
Construct

Construction 4,7%
ion

Public Works 1,7%

Agriculture 3,0%
Agriculture

Forestry 3,4%

Fishing 2,1%

20
CLIENT’S TYPOLOGY
Chart 31 Client's size, %
44% 73% of the clients are SME’s and only the remaining
27% are large companies.
27% 29%

39,7% of the relations established between


Universities/ associations and their clients is through
partnerships. Followed by co-development and
subcontracting with 30,2% and 25,4%.
Large Medium Small
Regarding the type of innovation promoted with clients
over the last three years, 42,3% are referred to
Chart 32 Type of relation promoted with clients, % product/ service innovation; 16,1% are related to
development followed by conception and
implementation phase with 14,6% and 8,8%
respectively.
Co-development 30,2% Process innovation comes in second with 32,8%
followed by Organizational or social innovation, 16,1%,
Partnership 39,7% and marketing innovation, 16,1%.
Subcontracting 25,4%

Others 4,8%

Chart 33 Type of innovation promoted with clients over the last three years by phase, %

Product/Service Innovation 2,9% 14,6% 16,1% 8,8%

Audit Market on Knowledge Intensive Services – Portugal


Process Innovation 1,5% 10,2% 13,1% 8,0%

Marketing Innovation 0,7% 3,6% 2,9% 1,5%

Organizational or social
0,7% 6,6% 4,4% 4,4%
Innovation

Commercialization Conception Development Implementation

21
2.12 Human Resources
Chart 34 Employees qualification, %
Concerning the human resources of Universities/
associations, 29,6% of the employees have a superior
MBA/Master/Phd 51,6%
education and 51,6% have a MBA/Master or PhD
education.
Superior 29,6%

Professional
1,0%
course
2.13 Barriers
Intermediate 13,7%

Basic 4,2% The main barriers to access the KIS market pointed by
the surveyed Universities/ associations are Ignorance
of the demand side concerning the offered services
with 18,4% followed by Lack of visible added-value with
16,3% and the Difficulties to find funding with 14,3% of
the total barriers mentioned by them.

These barriers can be explained by the difficulty of the


companies in discerning the advantages in medium
and long term of the offered services by Universities/
associations. Also due to the less favorable economic
conditions, companies only tend to acquire services
with immediate returns thus minimizing the risk.
Furthermore there are still a significant number of
companies for which R&D services and industrial
property is not a priority.
Finally, the support programs to find funding are still to
much time consuming and bureaucratic.

Chart 35 Barriers to access the market, % of the total barriers mentioned

Price 7,1%
Ignorance of the demand side concerning the offered
services 18,4%

Audit Market on Knowledge Intensive Services – Portugal


Mistrust on Industrial Property 10,2%

Large companies competition 3,1%

No short - term profitability of the service 8,2%

Lack of visible added-value 16,3%

Difficulties to find funding 14,3%


Public sector competition: agencies, laboratories,
5,1%
organisms providing support services
Lack of resources 7,1%

Difficulty to find qualified human resources 3,1%

Low level of qualified human resources of clients 5,1%

Others 2,0%

22
Chart 36 Contributions of the strategic plan, % 2.14 Supports

Financing for the


72% of the surveyed Universities/ associations do not
18,8% know if there is a strategic plan for the services sector.
demand
Only 24% knew of its existence but about 83% of these
Qualification and did not know what would be the impact for their
18,8%
training
activities.
Sector integration
25,0%
(Clusterization)
The main strategic plan contributions mentioned by the
Supply promotion
universities/ associations are Supply promotion with
37,5%
37,5% followed by Sector integration (clusterization)
with 25%, Financing for the demand and Qualification
and training are last, both with 18,8% of the total
Chart 37 Do Innovation support tools contribute to contributions mentioned.
KIS development? %of the answers
64% EUROPEAN AND NATIONAL SUPPORT
56% PROGRAMS
36%
28% For 64% of the Universities/ associations, the
European support programs have a positive
8% 8% contribution for the KIS sector development. The most
recognized programs are FP7 with 36% followed by
Interreg and CIP with 24% and 12% respectively, of the
Yes No Ns/Nr total programs mentioned.
National support programs
Regarding the national programs, 56% of the
European support programs
companies believe that they have a positive impact for
the development of KIS sector. The most mentioned
Chart 38 Application of the support received, % programs are QREN with 50% followed by POPH and
POVT, both with 16,7% of the total programs.

Clusterization and
Networking
60% SUPPORT RECEIVED

Innovation 92%
76% of the Universities/ associations that answered
Internationalization 60% received financial support over the past three years.
52% of them have benefited from the program FP7,
Training 44% 48% from QREN and 36% from Interreg.

Audit Market on Knowledge Intensive Services – Portugal


Others 16%
92% of the surveyed Universities/ associations use
these support programs to develop their innovation
activities.
Chart 39 Evaluation of support programs received, %
Of the Universities/ associations that received support
45% programs, 45% rated them as Sufficient; 40% as Good
40% and 15% as Insufficient.

The major advantages mentioned by the respondents


15%
are the support given for R&D and innovation activities
as well as creating partnerships with companies and
entities at a national and international level.
Good Sufficient Insufficient They also allow the increase and better positioning of
the Centre region of Portugal on the market.
These kinds of supports also facilitate the access to
funding, knowledge networks and best practices.

23
On the other hand, the support programs are
insufficient and the heavy bureaucracy leads to a delay
in the responses.
There aren’t programs on a regular basis for certain
activities developed by technological entities.
Finally, the lack of promotion of this kind of supports
shows the need for a national strategy to create an
innovation development plan.

Chart 40 Companies associated to a cluster/ 2.15 Networking and Internationalization


networking, %

80% of the Universities/ associations that answered are


associated to some cluster/ networking. 72% of them in
European 72,0% an European context.

National 64,0% COLLABORATION WITH ANOTHER KIS


PROVIDER
Local 12,0%
All of the Universities/ associations that responded
have already collaborated with another KIS provider.
Regional 44,0%
96% of them have already collaborated with
Universities; 92% with ADI/ COTEC/ IAPMEI and 76%
with Public technological centres.

Chart 41 Collaboration with another KIS provider, %

Innovation agency /
24,2%
Cotec / Iapmei
KIS company 15,8%

University 25,3%
Private research
13,7%
centres
Public technological
Audit Market on Knowledge Intensive Services – Portugal
20,0%
centres
Others 1,1%

24
Chart 42 Evolution of the investment in innovation in 2.16 Future
the next three years, %

72% of the Universities/ associations estimate that the


8% Progression evolution of their investment in innovation will be
8%
progressive.
Stagnation
12%
Regression
72% For these, the external factors having more impact are
Ns/Nr
Knowledge based economy followed by Policies to
promote the sector and Globalization. On the other
hand, the financial situation has a negative impact on
their development.

When considering the internal factors, the Acquisition


of new competencies, the Ability to communicate about
the added value and the Ageing of the employees are
those with more significant impact for them.

Chart 43 Impact of the external factors for the development of Universities/ associations, %

Financial situation 33,3% 61,9% 4,8%

Unemployment 15,8% 31,6% 52,6%

Policies to promote the sector 81,0% 9,5% 9,5%

Globalization 72,2% 16,7% 11,1%

Sustainable development / Climate change 68,4% 5,3% 26,3%

Knowledge based economy 81,8% 18,2%

Others 100,0%

Positive Negative No impact

Chart 44 Impact of the internal factors for the development of Universities/ associations, %

Audit Market on Knowledge Intensive Services – Portugal


Financial resources 35% 65%

Acquisition of new competencies 95% 5%

Ability to communicate about the added value 82% 14% 5%

Ageing of the employees 59% 14% 27%

Positive Negative No impact

25
Audit Market on Knowledge Intensive Services – Portugal

26
REGIONAL DEMAND
3. REGIONAL DEMAND
1576 companies were contacted to give their opinion as clients of Knowledge Intensive services. The
audit counts with 89 questionnaires.

3.1 Companies details

TYPOLOGY

The majority of the companies that answered are micro


or small companies with over 10 years existence.

They are based in the North, Centre and Lisbon


regions of Portugal, where 25% also have, in average,
1 or 2 branch offices.

Chart 45 Companies with specific R&D service/ 15,7% of the companies have offices beyond national
department by size class, %
boundaries. United Kingdom, Germany, Spain and Italy
80,0% are the European preferential countries with 29% of
60,0% subsidiaries. Portuguese speaking countries like Brazil,
Angola and Mozambique are the non-EU countries
40,0% preferred to create subsidiaries abroad Europe (29%).
64,0%
20,0%
23,6% 12,4% HUMAN RESOURCES
0,0%
Small Medium Large
Two thirds of the responders are small companies, of
Audit PT (CIS 2006) EU-27 (CIS 2006)
which, half are micro companies with less than 10
Chart 46 Audit enterprises and innovative enterprises employees.
in Portugal and EU by size class, %
In general, the SMEs surveyed have a specific R&D
department that allocates, in average, 7 persons in fte.

Audit Market on Knowledge Intensive Services – Portugal


81,8%
71,4% 43,6% of the companies without a specific R&D
department, have between 5 and 10 employees
54,4% assigned to these activities. It should be noted that
45,6% 82,4% of these are small companies.

28,6%
18,2%

Small Medium Large


with R&D dep. without R&D dep.

27
Chart 47 Turnover by company size class, including TURNOVER
micro companies, %
The turnover is correlated with the company size: micro
>5000 k€ 16,9% 11,2%
and small companies have a turnover inferior to the
1000 - 5000 k€ 1,1% 3,4% medium and large companies (Chart3). The average of
the Audit is between 1000 and 5000k€.
500 - 1000 k€ 3,4% 11,2% 2,2%

250 - 500 k€ 5,6% 5,6% 1,1%


Following the trend of the Portuguese innovative
100 - 250 k€ 5,6% 15,7% companies reported in Eurostat Statistical Books-
Science, technology and innovation in Europe 2010, as
<100 k€ 15,7% 1,1%
having increased their turnover by 4.8% between 2004
0% 10% 20% 30% and 2006, over 60% of the companies surveyed
confirmed a progressive evolution of turnover over the
Micro Small Medium Large past three years.

The turnover coming from exports accounted for 39,1%


Chart 48 Evolution of the investment in innovation during
of the total turnover in Small companies, and 31,5%
the last three years, %
and 15,9% for medium and large companies
respectively.
7,9% Progression
11,2%
Stagnation TURNOVER INVESTED IN INNOVATION

21,3% 59,6% Regression


During the last three years 59,6% of the companies
ns/nr surveyed had an increasing investment in innovation
and, in average, they spend one third of the total
turnover in innovation related activities.

SECTOR OF ACTIVITY

Innovative companies are most represented in


Services for Enterprises and ICT. More than half of the
companies (52,6%) work in the Industry sector.

Chart 49 Sector of activity of the companies, %

Electricity / Electronics 6,7%


Energy 8,1%
Cement / Lime / Plaster 0,7%

Audit Market on Knowledge Intensive Services – Portugal


Rubber and Plastic 0,7%
Chemical/ Pharmaceutical 4,4%
Paper and wood
Industry

1,5%
Agro-food / Food / Drinks 5,9%
Automobile / Transport 5,2%
Textil 1,5%
Other industries 8,1%
Metal industry / engineering 9,6%
Minery 0,0%
Other industries 0,0%
Transport 0,7%
Services for enterprises 16,3%
Medical devices 3,0%
Services

Banking 0,0%
ICT 14,8%
Communication 3,0%
Printing / Publishing 0,0%
Tourism 0,7%
Fo Const
res ructio

Building 5,9%
try n

Public Works 2,2%


Forestry 0,7%
28
3.2 Innovation
Chart 50 Innovative activities undertaken by phase,
% More than 80% of the innovative companies in Portugal
were involved in activities of innovation during the
13,0%
10,5% period between 2004 and 2006.
Product/ Service 4,8%
5,0%
7,7%
8,0% From the companies audited, the majority have
Process 7,5% undertaken an innovation activity, even if not
5,0%
successful, in the last three years. Most of it, was for
4,3%
4,1% the conception or development of products/ services,
Marketing 6,4% with 13% and 10,5% respectively.
4,8%
4,8%
Organizational or 5,2% Regarding the projects that didn’t succeed, companies
social 6,2% think that was due to:
2,7%
• Lack of technical and commercial support
Conception Development • Difficulty in marketing the developed innovations
Implementation Commercialization • Difficulty in managing the partners
• Lack of human resources with experience and
know-how
• Lack of financial resources to invest in R&D
• Inviability of the project

Reasons that encourage innovation Reasons that discourage innovation


Diversification and differentiation of Human resources are poorly prepared with little
products / services experience and know-now

Market requirements Lack of time


It is part of the company strategy Poor economic situation
Innovation is perceived as a critical factor
Audit Market on Knowledge Intensive Services – Portugal
for the development and sustainability of Lack of funding in the various phases of projects
the company
To maintain a high level of internal know-
Bureaucratic process of public funding
how/ competitiveness
Lack of culture of innovation management
High risk of innovation activity

29
Chart 51 Type of services needed in the last three 3.3 KIS Service Requirements
years, %

R&D and Management services are the most required


11% R&D Services services by the enquired companies, with 46% and
43% of the demand respectively.
46%
Management and
43% others
Although requests of ICT Services only count with 11%
ICT Services when compared with R&D and Management Services
in general, if the individual services are analyzed
separately it should be noticed that ICT Services are
more relevant:
• ICT Consultancy (46,1%);
• Project Identification and Management (44,9%)
• Implementation of Electronic data interchange
systems (40,4%)
• Design and development of engineering projects
(39,3%)
• Technology Transfer (36%)

Chart 52 Services needed by the enterprises enquired in the last three years, % of the answers

ICT Services Management and others

Management and
ICT Consultancy 46,1% strategic consultancy 34,8%
services
Business intelligence
Telecom Network services, compatitive 15,7%
30,3% intelligence
Connections

Implementation of Business modelling 7,9%


electronic data 40,4%
interchange systems
Market research 32,6%
Others 16,9%
Human resources 21,3%
R&D Services
Communication
Project identification and 33,7%

Audit Market on Knowledge Intensive Services – Portugal


44,9% Strategies
management
Design and development of Assistance for quality
39,3% 34,8%
engineering projects processes
Innovation diagnosis and Environmental and
24,7% 15,7%
management Energy management
Tecnology Transfer 36,0% Organization and
processes-based 29,2%
Open Innovation, management
20,2%
Dinamization of R&D
Others 4,5%
Assistance on intellectual and
23,6%
industrial property protection

Laboratories 27,0%

Prototyping and design


21,3%
services

Others 3,4%

30
Chart 53 Sector and type of service provider, % When questioned if they found or not a provider for the
requested service, the majority of the companies
answered affirmatively.
Internal

Qualified human
26,6%
ly

resources
For ICT services, the companies generally contract
Enterprises 29,2% entities from the Private sector. On the other hand, for
Private Sector

Management services, companies prefer to seek a


solution internally. It is noted that he Public sector plays
Technological centre 9,8%
a major role in R&D services, with more than 50% of
Technical
the companies contracting services from private
Institutes/Organisms 11,3% Laboratories or Technology Transfer centres.

Agencies 6,6% Within the provider’s sector, in general, companies


Public Sector

resorted to a private enterprise (29,2%) or to its own


Administration 3,1% human resources (26,6%). Public Technological
centres were the providers of 13,3% of the services
Technological centre 13,3% needed (chart 9).

Chart 54 Percentage of companies that found, or not, the service sought and from which sector it was provided

Management and others


ICT Services
0% 20% 40% 60% 80% 100%
0% 20% 40% 60% 80% 100%

Management and
strategic consultancy
ICT Consultancy
services
Business intelligence
Telecom Network services, compatitive
Connections intelligence

Implementation of Business modelling


electronic data
interchange systems
Market research
Others

Human resources
R&D Services
Communication
0% 20% 40% 60% 80% 100% Strategies

Project identification and Assistance for quality

Audit Market on Knowledge Intensive Services – Portugal


management processes

Design and development Environmental and


of engineering projects Energy management
Organization and
Innovation diagnosis and processes-based
management management

Tecnology Transfer Others

Open Innovation,
Dinamization of R&D
Assistance on intellectual
and industrial property Didn't find any Internally
protection
Private sector Public sector
Laboratories

Prototyping and design


services

Others

31
Chart 55 Evaluation of the service provided, % 76% of the companies were satisfied with the service
delivered.
10% Satisfied
14%
Non satisfied

76%
ns/nr

Chart 56 Type of relationship between demanding RELATIONS WITH SERVICES PROVIDERS


companies and providers
Half of the companies surveyed establish partnerships
48,3% 50,6% with their suppliers. Nevertheless, co-development and
subcontracting agreements are also usual.
37,1%

These agreements are establish in order to develop


innovative products/ services, to transfer technology or
1,1%
for specific R&D services. Relationships within
Cooperation Programs are also common.

SOURCES OF INFORMATION
Chart 57 Sources of information used to find a
provider, %
57,3% of the companies used Networking to find a
Own staff 43,8%
service provider. Their Own staff and Meetings and
Clients 22,5% conferences are also sources of information.
Suppliers 33,7%
Competitors 10,1%
Associations 25,8%
Meetings/conferences 36,0%
Sector studies 13,5%
Journals/Internet/Ne… 23,6%
Networking 57,3%

Audit Market on Knowledge Intensive Services – Portugal


Professional Directory 6,7%
Technological Centres 18,0%
Commerce Chambers 2,2%
Public administration 3,4%

32
Chart 58 Main barriers to innovate, % 3.4 Barriers

0% 50% 100%
TO INNOVATE

Funding The surveyed companies seem to consider Funding


70,8%
the main barrier to innovate and relate it with the risk
Risk
42,7%
subjacent to innovative activities.
Shortage of skilled staff & The high level of risk, the amounts of capital
managers 41,6% necessary and the uncertainty of the return on
Difficulty in attracting R&D / investment are factors of resistance not only for the
technical staff 19,1% companies but also for external funding partners.
Lack of information on Public
supports
When considering public funding, the bureaucracy
16,9%
Lack of information on new
and time spending discourage the companies to
products, markets,… 14,6%
present proposals.
Inadequate infrastructure
12,4% About 40% believe that the Incertitude on the potential
Incertitude on the potencial market and Difficulties in finding partnerships are also
market 33,7%
factors of resistance. Shortage of qualified staff and
Lack of time managers in terms of experience and know-how are
27,0%
Difficulties in finding
also obstacles that prevent companies from
partnerships 34,8% embarking on innovation projects.
Regulations
15,7% It was referred that legislation could also discourage
Others investment in innovation due to bureaucratic and
3,4%
lengthy processes.
Small Medium Large Total of Companies

Chart 59 Main barriers perceive for contracting FOR CONTRACTING INNOVATION


innovation support services SUPPORT SERVICES
0% 50% 100%
The high cost of the hiring innovation support services
is the main barrier perceived by the surveyed
Price
52,8%
companies.
About 36% think that No short-term profitability of the
Mistrust on Industrial
Property
service is also an obstacle. Lack of visible added-value
18,0% at the time of contracting services to support innovation
is a barrier for 31,5% of the responders.
Audit Market on Knowledge Intensive Services – Portugal
No short - term profitability
of the service
36,0%
For 30,3% of the companies the specificity of certain
Lack of visible added-value services limits the choice of a provider.
31,5%

Lack of resources
18,0%

Difficulty to find specific


services
30,3%

Lack of information on
supply
24,7%

Others
3,4%

Small Medium Large Total of Companies

33
3.5 Supports
European Programmes
6th Framework Programme
INNOVATION SUPPORT PROGRAMS
7th Framework Programme

In Portugal in 2006, 11,9 % of the innovative


National Programmes companies have received some type of public funding.
QREN - Quadro de Referência Estratégico Central Government was the main source of funding,
Nacional
followed by the European Union. Funding from the 6th
National Strategic Reference Framework
Framework Program and from Local or regional
POPH - Programa Operacional Temático
Potencial Humano
authorities were also important sources of funding.6
Human Potential Thematic Operational Programme
POR - Programas Operacionais Regionais In the Audit, 74 % of the companies have received
Regional Operational Programmes funding from innovation support programs during the
last three years.

The main European Programs were the 6th and 7th


Framework Programs. At a National level, the National
Chart 60 Application of the support received from the Strategic Reference Framework (QREN) plays a major
innovation support programs, % role, but also the Operational Programs are important
sources of support especially the Human Potential
3% Innovation
7% Thematic (POPH) and the Regional Program (POR).
Internationalization

17% Training
44%
Clusterization and
Networking SERVICE PROVIDER AND EVALUATION
29% Others

Half of the surveyed companies had applied to the


innovation support programs directly and the other half
resorted to intermediaries.

Most of the companies contract consultants to deliver


the service. Nevertheless, some companies refer that
Chart 61 Evaluation of the support received from the universities are also preferential partners for the
innovation support program,% preparation of proposals.
The resource to intermediaries was justified by the
Excellent complexity of the application process, the added value in
11% 11%
structuring and implementing the project and the
Good
simplification of the administrative process.
28% Sufficient Audit Market on Knowledge Intensive Services – Portugal

50%
From the companies that evaluated the support
Insufficient
provided, 50% classified it as Good and 28% as
Sufficient.

6
Eurostat, Community Innovation Statistics 2006

34
POSITIVE AND NEGATIVE ASPECTS AND
SUGGESTIONS FOR IMPROVEMENT

Positive aspects
Grants and Funding of innovation
activities Suggestions for improvement
Enhancement of the companies' know- Service support to candidates with
how, expertise and improvement of the information and training sessions
human resources Optimization of the online tools
New partnerships for the company Simplification of the innovation support
Follow-up and clarification of doubts programs
Celerity and rigor concerning the deadlines
Negative aspects for submitting applications, publishing results
Low rate of financial support and the payments
Bureaucratic and complex processes that Better coordination of entities that support
require time and allocation of human innovation activities
resources Implementation of an internal system to
Delay in payments improve the service
Difficulties in the monitoring the project

3.6 Future
Chart 62 Estimation for the evolution of the % of
turnover invested in innovation for the next three
years, % 65% of the enquired companies expected a
progressive evolution of the percentage of turnover
allocated to innovation activities for the next three
7%
years.
7% Progression

Stagnation
21%
Regression
65%
ns/nr

The knowledge based economy is thought by the


Chart 63 Factors with a positive and negative impact majority of companies to have a positive impact in the
Audit Market on Knowledge Intensive Services – Portugal
for future innovation activities, % encouragement of future innovation activities.
0% 20% 40% 60% 80% 100%
Other factors perceived as facilitators of KIS are
Policies to promote the sector and Globalization.
Financial situation
The financial situation is the factor with the most
negative impact (37,7%), although when compared
Unemployment there are more companies considering it as positive
(58,4%).
Policies to promote the
sector
Companies consider that the Unemployment have no
Globalization significant impact for future innovation activities.

Sustainable development/
Climate Change

Knowledge based
economy

Positive Negative No impact

35
4. CONCLUSIONS
4.1 MAIN RESULTS FROM THE AUDIT

Supply

• The majority of KIS companies that answered are micro and small companies (89,5%). This can
be explained by the registered increase of the number of KIS providers in Portugal since 2004;
• 61% of companies have a specific R&D department;
• The income evolution for the majority of the companies has been progressive on the last three
years;
• Most of the provided services are referred to Project identification and management, Design and
development of engineering projects and ICT Consultancy. Universities provided services are
related with Technology Transfer and Laboratories;
• The main target markets of KIS companies and Universities are Services for companies, Energy
and ICT;
• Regarding the type of innovation promoted with clients over the last three years, more than a
third has been on product/service innovation (35,9%);
• 82% of the total employees have Higher education;
• The main barriers to access the KIS market pointed by the surveyed companies are Ignorance
of the demand side concerning the offered services, Lack of visible added-value and the Price;
• The main EU Programs recognized are Seventh Framework Program (FP7) and Interreg.
National Strategic Reference Framework (QREN) and Human Potential Operational Program
(POPH) are the national programs that more contribute for the development of KIS;
• 42,6% of companies that answered use these programs to develop their innovation activities and
to find and strengthen partnerships with external entities and companies;
• The majority of the companies have already collaborated with another KIS provider;
• 77% of the companies and 72% of the Universities expect to increase investment in innovation
for the next three years.

Demand

• Two thirds of the responders are small companies, of which, half are micro companies with less
than 10 employees;
• 60% of the companies surveyed confirmed a progressive evolution of turnover over the past
three years;

Audit Market on Knowledge Intensive Services – Portugal
59,6% of the companies surveyed had an increasing investment in innovation over the last three
years;
• 91,6% of the companies have undertaken an innovation activity, even if not successful, in the
last three years. Most of it was for the conception or development of products/ services;
• The most required services by the enquired companies are ICT Consultancy, Project
Identification and Management Implementation of Electronic data interchange systems;
• 57,3% of the companies used Networking to find a service provider;
• The main barriers to innovate referred by the companies were Funding, Incertitude on the
potential market and Difficulties in finding partnerships;
• Price, No short-term profitability of the service and Lack of visible added-value are the main
barriers for contracting innovation support services;
• 74 % of the companies have received funding from innovation support programs during the last
three years;
• 65% of the enquired companies expected a progressive evolution of the percentage of turnover
allocated to innovation activities for the next three years;
• Knowledge based economy, Policies to promote the sector and Globalization are thought by the
majority of companies to have a positive impact in the encouragement of future innovation
activities.

36
4.2 MAIN RESULTS FROM MATRIX OF COMPETENCIES SUPPLY-DEMAND KIS
SECTOR - Annex 1

Analyzing the Matrix of Competencies that confront the supplied with the demanded services, it can be
concluded that there are some sectors where the supply does not cover all the demand. On the other
hand, there are also services that are oversupply.

Supply < Demand Supply > Demand


Open Innovation, Dynamisation of
Telecom Network Connections (1,77% / 5,02%) (6,60% / 3,35%)
R&D
Design and development of
Laboratories (1,18% / 4,46%) (9,2% / 6,51%)
engineering projects
Business Intelligence services,
Assistance for quality processes (2,59% / 5,76%) (4,95% / 2,60%)
Competitive Intelligence
Project identification and
Market Research (2,71% / 5,39%) (9,55% / 7,43%)
management
(% of provided services / % of demanded services)

Services related with Telecom Networks Connections and Laboratories have more demand than supply,
so there is a market gap. Open Innovation, Dynamisation of R&D and Design and development of
engineering projects are oversupply.7

4.3 MAIN RESULTS FROM MATRIX OF SECTOR SPECIALISATION OF THE DEMAND


AND SERVICES REQUESTED – Annex 2

This Matrix establishes the relationship between the provided and requested KIS. For that, it was
computed the total number of the services provided by the KIS companies and Universities/
Associations and the total number of services requested by SME’s.

The ratio between the number of companies in a specific sector requesting KIS and the total of KIS
requests provide the sectors that most required KIS.
The most demanded services are given by the ratio between the number of companies requiring a
specific service and the total number of KIS requests.

Audit Market on Knowledge Intensive Services – Portugal


Sectors that most required KIS Most demanded services
ICT 13,3% Project identification and Management 10,6%
Services for enterprises 10,8% ICT consultancy 8,8%
Design and development of engineering 8,4%
Electricity/ Electronics 9,1% projects

The sector of activity with most requirements of KIS is the ICT. The most demanded services are the
ones related with Project identification and Management.

7
This conclusion is based in the sample of the audit.

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5. RECOMMENDATIONS

This section will describe the recommendations from the enquiries regarding potential aspects that could
be improve or create in order to promote the development of the KIS sector in Portugal.

CREATION OF A NATIONAL STRATEGY FOR KIS SECTOR:

The aim of this recommendation is to create policies to promote the development of the KIS sector. It is
suggested a common coordination between all the entities in order to build a national strategy in which
should be included programs and policies to:

• Promote the sector among potential clients;


• Promote the internationalization of the companies;
• Support the innovation projects in all stage of development, including during the transition to the
market, not only in financial terms but also with technical support (qualify human resources,
informative and training sessions...);
• Increase the rate of experimentation of new innovative products/ services;
• Create networks of companies, associations, universities and entities related with KIS with the
aim of exchange know-how and good practices.
• Enhance the relation between the knowledge providers/ producers and the companies/ entities
that can transfer the innovation to the market.

PROMOTE AND IMPROVE THE LINK BETWEEN COMPANIES AND UNIVERSITIES:

The link between companies and Universities is thought to be an important factor for the development of
the KIS sector. Nevertheless, is not yet sufficiently developed in order to be a support to the innovation
process.

Other aspect to be considered is the important role of Universities to qualify human resources.
Companies felt difficulty to find employees to develop their innovation projects. Following that, it is
recommended the approach of the students during their studies to the companies through internships
and co-development of projects. This would lead to the acquisition of new competencies and awareness
of technical procedures.
Audit Market on Knowledge Intensive Services – Portugal

PROMOTE AN INNOVATION CULTURE:

The market is not aware of the potential and advantages of the KIS perceiving them as too expensive,
with a medium and even long term returns and a non-priority aspect in the companies’ strategies.

It is suggested a common national policy to create an innovation culture that instill in the society an
interest and initiative to undertake innovative projects. A transformation in the current culture of
resistance to change and overstate de risk should also be included in this recommendation.

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SIMPLIFICATION OF THE PROCEDURES IN THE NATIONAL SUPPORT PROGRAMS:

The support programmes are perceived as being too complex and bureaucratic which allocates many
human resources and are time consuming. One suggestion is its simplification through the optimization
of the online tools.

Another is the harmonization with the Community procedures and the implementation of an internal
system to improve the service. It was also referred by the surveyed companies that a better coordination
of entities that support innovation activities would be helpful.

The candidates felt a lack of support and the information available is not sufficient to make a proper
application to the programmes. In this order, it was proposed as recommendations the creation of an
online platform to exchange experiences and knowledge.

Another suggestion was the effective dissemination of the support programs through newsletters,
events, and publications … associated with training sessions for candidates.

Audit Market on Knowledge Intensive Services – Portugal

39
Audit Market on Knowledge Intensive Services – Portugal

40
6. Annexes
Annex 1 - MATRIX OF COMPETENCIES SUPPLY-DEMAND KIS SECTOR

Audit Market on Knowledge Intensive Services – Portugal


Annex 2 - MATRIX OF SECTOR SPECIALISATION OF THE DEMAND AND SERVICES REQUESTED

Audit Market on Knowledge Intensive Services – Portugal