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Regional RTD & Innovation Policies and Practices

Reviewing the past to be successful in the future

A benchmarking exercise, investigating on successfully implemented regional RTD and innovation policies

NOVAREGIO: Innovative Network for coordinated actions on RTD policies at regional level

LEGAL NOTICE

The present book has been developed as one of the main deliverables to be achieved within the framework of the NOVAREGIO project.

NOVAREGIO is a project co-financed by the European Commission in the frame of the 6 th FP, under the specific programme “Integrating and Strengthening the European Research Area – Regions of Knowledge 2”.

Neither the European Commission nor any person acting on behalf of the Commission is responsible for the use which might be made of the information published in the present book.

The views expressed in this study are those of the authors and do not necessarily reflect the policies of the European Commission.

For further information on the content of this book, please refer to the web site http://www.novaregio.net

Coordination: AREA Science Park

Author and Editor: Innova S.p.A.

Cover design: TIA – The Public Agency for Technology of the Republic of Slovenia

All rights reserved. No part of this book may be reproduced, in any form or by any means, without permission in writing from the editor.

August 2007

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Acknowledgments from the coordinator

Moving from industrial society to knowledge society entails creating new development models based on innovation and integration of research, education and industry, which represent the edges of the “knowledge triangle”. Particularly, the integration of regional governments, industries and academic or research institutions is increasingly gaining ground, thus favouring the development of innovation processes.

European regions are gaining an increasingly relevant role in the development and management of a knowledge-based society. Indeed, locally embedded social, cultural and institutional arrangements are a source of knowledge, learning and innovation. Moreover, innovation is an interactive process to be shared by a variety of institutions and at the same time interregional collaboration is a tool for innovation.

To this aim, AREA Science Park, the multi-sector science and technology park of the Friuli Venezia Giulia region and one of the leading parks in Europe, has launched the “NOVAREGIO Project-InNOVative Network for coordinated actions on RTD Policies at Regional Level”, co-financed by the European Commission within the 6th Framework Programme known as “Regions of Knowledge II”, connecting 8 partners belonging to 7 European regions with non-homogeneous social, economic and political characteristics: Canary Islands (Spain), Crete (Greece), Styria (Austria), South Transdanubia (Hungary), Småland med öarna/West Sweden (Sweden), Slovenia and Friuli Venezia Giulia region (Italy).

NOVAREGIO is aimed to establish and diffuse more effective innovation policies and practices within the European framework to increase the competitiveness of the regions involved in the project.

NOVAREGIO objectives include identifying the best innovation policies and practices to be promoted and taken on as models, as well as providing assistance to regional public administrations for self-evaluating their innovation policies, so that new knowledge for increasing the competitiveness of the territories and their relevant economic and productive systems can be acquired.

The NOVAREGIO self-evaluation process was developed through the collection and selection of the innovation policies and practices implemented in the seven regions involved, which were later assessed by experts in the fields of technology transfer and innovation management.

In this context, eleven “best practices” – which are described in this handbook - were identified, exchanged and diffused among the NOVAREGIO partners and regional policy makers and innovation practitioners as well.

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Two out of the eleven best practices were selected in Friuli Venezia Giulia: “Sister”

- a practice promoted by AREA Science Park to scout and exploit research results

from Academia and Public Research Organisations – and “Innovation Network” - an initiative created by AREA Science Park in cooperation with the regional industrial associations, chambers of commerce and development agencies aimed at transferring “demand-driven” technology and knowledge to enterprises.

Therefore, NOVAREGIO is a valid pilot experience for managing innovation and its outcomes are now available to the Regional Governments at a large extent.

I wish to thank the Friuli Venezia Giulia Regional Ministry in charge of Labour,

Education, University and Research, under whose direction the NOVAREGIO Project has been implemented, as well as the CEI-Central European Initiative and the CPMR–Conference of Peripheral Maritime Regions of Europe for the attention dedicated to the Project.

I also wish to express my sincere thanks to the partners Innova SpA, TIA–The

Public Agency for Technology, FORTH–Foundation for Research & Technology Hellas, SFG–Steiermärkische Forschungs- und Entwicklungsförderungs GmbH, ITC–Instituto Tecnológico de Canarias SA, LTC–Länsteknikcentrum i Jönköpings län AB, STRDA–South Transdanubian Regional Development Agency, for the qualified contribution and the great spirit of cooperation ensured to NOVAREGIO during two years of joint work.

Last but not least, I wish to thank the entire structure of AREA Science Park, and particularly all the staff members who were directly involved, for the commitment and the competence shown in the complex task of coordinating the Project.

Gabriele Gatti Director Marketing and International Relations AREA Science Park

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Authors

The content of the Handbook has been developed by a team member of INNOVA, Antje Klaesener.

A valuable contribution has been provided by all the involved project partners for the benchmarks’ engineering and description, as well as their process flow design. In particular, a special thanks is to be given to the members of the Project Management Committee, namely: Marcello Guaiana and Isabella Aiello (AREA Science Park), Lidija Fras Zemljic and Mojca Skalar Komljanc (TIA–The Public Agency for Technology of the Republic of Slovenia), Artemis Saitakis and Kostas Galanakis (FORTH–Foundation for Research & Technology Hellas), Wolfgang Schabereiter and Sabine Proßnegg (SFG–Steiermärkische Forschungs- und Entwicklungsförderungs GmbH), Alma Cruz and Lucía Dobarro Delgado (ITC– Instituto Tecnológico de Canarias SA), Erik Bunis and Stefan Lind (LTC– Länsteknikcentrum i Jönköpings län AB), Lorand Szabò and Nikolett Huba Varga (STRDA–South Transdanubian Regional Development Agency). Further contributions from their side were made on the main lessons learnt from the selected successfully implemented RTD and innovation policies.

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Contents

Preface

X

Executive Summary

 

XIV

Chapter 1.

The concept of Benchmarking, definition and objectives

 

1

1.1 Defining Benchmarking – what is regional Benchmarking?

 

2

1.2 Benefits from Benchmarking – why engage in regional Benchmarking?

5

1.3 Types of Benchmarking

 

7

1.4 The Benchmarking Methodology

 

10

Chapter 2. The IVEM Methodology applied to the NOVAREGIO context

15

2.1 Objectives of the NOVAREGIO Coordination Action

 

16

2.2 The

4

step

model

of

the

Benchmarking

Methodology

applied

to

NOVAREGIO

 

20

2.2.1

Identification of 25 successful RTD and innovation policies

23

2.2.2

Validation

of

25

Good

Practices

and

selection

of

11

potential

benchmarks

 

24

2.2.3

Benchmark engineering and modelling

 

26

2.2.4

Publication and transfer of results, monitoring

 

27

Chapter 3.

RTD and innovation Benchmarks

 

29

3.1 The 11 NOVAREGIO Benchmarks

30

3.2 Friuli Venezia Giulia

 

34

3.2.1

SISTER

 

37

3.2.1.1 Methodology

 

37

3.2.1.2 Success Factors

 

40

3.2.1.3 Performance Indicators

 

40

3.2.2

Innovation Network TM

 

43

3.2.2.1 Methodology

 

43

3.2.2.2 Success Factors

 

47

3.2.2.3 Performance Indicators

 

48

VII

3.3

South Transdanubia

50

3.3.1 “Baross Gabor” Programme – Support of the innovation

developments of small and medium-sized enterprises in South

 

Transdanubia

52

3.3.1.1

Methodology

53

3.3.1.2

Success Factors

56

3.3.1.3

Performance Indicators

57

3.4 Styria

59

3.4.1

Skills Development of Qualified Employees

62

3.4.1.1 Methodology

62

3.4.1.2 Success Factors

66

3.4.1.3 Performance Indicators

67

3.4.2

Start-up Entrepreneurs

69

3.4.2.1

Methodology

69

3.4.2.2

Success Factors

73

3.4.2.3

Performance Indicators

73

3.5 Slovenia

76

3.5.1

Centre of Excellence

77

3.5.1.1

Methodology

77

3.5.1.2

Success Factors

81

3.5.1.3

Performance Indicators

81

3.6 Crete

83

3.6.1

University Students Entrepreneurship Programme – UNISTEP

85

3.6.1.1 Methodology

85

3.6.1.2 Success Factors

88

3.6.1.3 Performance Indicators

89

3.6.2

Pancreta Development Fund

91

3.6.2.1 Methodology

91

3.6.2.2 Success Factors

94

3.6.2.3 Performance Indicators

94

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3.7

Canary Islands

97

3.7.1

BIC Canarias

99

3.7.1.1 Methodology

99

3.7.1.2 Success Factors

103

3.7.1.3 Performance Indicators

104

3.8

Småland med öarna/West Sweden

107

3.8.1

Small and Medium-sized Enterprises Development – SMED

109

3.8.1.1 Methodology

109

3.8.1.2 Success Factors

112

3.8.1.3 Performance Indicators

113

3.8.2

Healthcare Technology Alliance – HCTA

115

3.8.2.1 Methodology

115

3.8.2.2 Success Factors

118

3.8.2.3 Performance Indicators

119

Chapter 4.

Lessons learnt and outlook for the future

121

4.1

Conclusions

122

4.2

Outlook

126

Annex

131

Bibliography

181

IX

Preface

The NOVAREGIO project ‘Innovative Network for coordinated actions on RTD policies at regional level’ is an attempt to showcase best practices in the development and implementation of RTD and innovation policies and initiatives, aimed at fostering networking activities, providing guidance to policy makers and consequently exploiting structural funds more efficiently.

The NOVAREGIO project, coordinated by AREA Science Park, involves 8 partners from 7 European Regions – Canary Islands (Spain), Crete (Greece), Slovenia, Småland med Öarna and West Sweden (Sweden), Styria (Austria), South Transdanubia (Hungary) and Friuli Venezia Giulia (Italy) – representing outstanding organisations dealing with the management and diffusion of innovation:

AREA Science Park–Consorzio per l’AREA di Ricerca Scientifica e Tecnologica di Trieste (Italy);

INNOVA SpA (Italy);

TIA–The Public Agency for Technology of the Republic of Slovenia (Slovenia);

FORTH–Foundation for Research & Technology Hellas (Greece);

 

SFG–Steiermärkische

Forschungs-

und

Entwicklungsförderungs

GmbH

(Austria);

ITC–Instituto Tecnológico de Canarias SA (Spain)

 

LTC–Länsteknikcentrum i Jönköpings län AB (Sweden);

STRDA–South Transdanubian Regional Development Agency (Hungary).

The NOVAREGIO project is managed by two dedicated international boards, namely the Project Management Committee (PMC) and the Strategic Steering Committee (SSC). The first one, composed by the partner organisations representatives, is in charge of the coordination at consortium level of the technical and administrative activities. The second one, composed by European experts in innovation, has the mandate to define strategies and tools necessary to increase the project efficiency and efficacy as well as its long-term sustainability.

With the aim of fostering networking activities, providing guidance to policy makers and exploiting structural funds more efficiently, NOVAREGIO, started in January 2006 with a two-years duration, promotes with its activities the building of a knowledge society and contributes therefore to the realisation of the Lisbon Strategy according to which the European Union in March 2000 set itself the ambitious goal of becoming “the most competitive and dynamic knowledge-driven economy in the world by 2010, capable of sustainable economic growth with more and better jobs and greater social cohesion”.

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The conducted analysis is focused on the regional perspective, and accordingly investigates on regional RTD and innovation policies implemented in seven selected European regions. Bearing in mind the globalisation and the resulting enlarged competition from the merging economies, Europe is more and more constrained to raise its own competitiveness. Tackling this challenge at regional and not national level appears reasonable since sub-national systems have a strong identity and are rich in resources, dedicated to act at regional level and adapt their economies to globalisation. Furthermore, due to the proximity of contacts between key players, the regional approach is appropriate for improving the innovation capacity, and consequently creating a knowledge society.

Nowadays, in Europe are still observed significant regional differences, comprising advanced regions that dispose of a greater innovative ability and thus able to adapt their economies to globalisation, and less developed regions on the other side which require support to improve their innovation performance.

NOVAREGIO involves seven European regions with very heterogeneous characteristics, as they differ amongst others in terms of size (e.g. population, geographical size, natural resources, etc.), political independence and economic wealth. In this frame, the Friuli Venezia Giulia Region acts as key driver due to its extraordinary concentration of researchers and the presence of many outstanding national and international RTD centres and institutes. Furthermore, other regions belong to countries with traditionally strong states like Austria and Sweden, as well as further countries which have begun more recently to systematically strengthen their regions, as for example Hungary, Greece and Spain. Consequently, the regions do not move at the same pace as regards their innovation capacity. However, all of the seven regions aim at increasing their investment in RTD and innovation activities by adopting policy measures that tackle the same topics and concentrate on supporting the innovation progress within the regions.

Furthermore, the regions are geographically situated where two major European organisations are operating: the CEI – Central European Initiative and the CPMR – Conference of Peripheral Maritime Regions of Europe, both organisations that share the need of convergence and cohesion of regional policies and strategies as expressed by the Lisbon Strategy, and tackle as one common issue the improvement of the regional RTD and innovation development.

The project regions, none the less their uneven progress in regional innovation performance, have been developing a wide range of expertise as regards regional RTD and innovation policies, implemented in the programming period 2000 – 2006 of the structural funds. The policies concern the development of innovative projects and programmes, innovative financing systems and the knowledge society as a whole by promoting innovation in SMEs and supporting the development of human capital.

The present handbook looks at the RTD and innovation policies that have been implemented by the partner regions, by adopting a benchmarking exercise building on the ‘Benchmarking Consulting Practice’, a model that has been developed by INNOVA and originally applied to the Network of the Innovation Relay Centres

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(IRCs) in the framework of a pilot project initiated in 2001, aimed at improving the operational efficiency and effectiveness of the IRC Network.

The methodological approach has been adapted to the needs of the NOVAREGIO project and further improved with new procedural schemes aimed at valorising the active participation of regional policy makers and key stakeholders involved in financing and managing RTD programmes.

The handbook is composed of four chapters.

Chapter 1 explains the benchmarking concept: what does benchmarking mean, especially in the regional context, and why its application can lead to regional improvements.

Chapter 2 deals with the benchmarking methodology applied to the NOVAREGIO context. A 4-step model has been developed in order to select the most relevant practices and to analyse them in detail, making them finally transferable to the other involved regions and further regions interested in their take up.

Chapter 3 illustrates the outcomes of the benchmarking exercise and presents the selected benchmarks on regional RTD and innovation policies. A benchmarking exercise, demonstrating each single part of the implementation and working process, supports a better understanding and permits to learn how to effectively address major challenges based upon others’ policy-learning experiences.

Chapter 4 reasons on the main lessons learnt from the successfully implemented RTD and innovation policy benchmarks. Suggestions are given as regards the adoption of policies in the future that can favour an inspiring environment for regional key players, coming from the research and the industry sector and including both public and private actors.

It has to be pointed out that the intention of the project was not simply to present regional RTD and innovation policies (all the detected regional RTD and innovation policies are listed in the Annex), but instead to highlight those policies whose functional processes resulted to be the most successful ones and who can give an example to other regions for improving their innovation performance. In this context the transferability of the selected benchmarks played an important role. A successful policy which is determined by very specific regional, economic or structural factors may be less interesting than a less spectacular policy which can be more easily transferred to another context and thus can serve as an example.

Furthermore, it has to be stated that there does not exist an overall best region, neither in the project nor from a general point of view, against whom to benchmark. Some characteristics the regions against whom to benchmark should have, are the following 1 :

1 Innovating Regions in Europe (IRE) Secretariat, 2006.

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Regions should have consciously implemented a relevant process of outstanding effectiveness and efficiency so that it makes sense to learn from them;

Regions should have succeeded under similar circumstances with regard to their legal framework conditions in order to make the lessons learnt relevant for a subsequent implementation;

Regions should be motivated to fully share their insights and preferably even support the transfer of know-how in order to access even sensitive but crucial information, to speed up the implementation and finally to serve as partner for continued mutual learning;

Regions should be known as a system which has succeeded in order to overcome scepticism in the own region against knowledge from outside.

In this context, the conducted benchmarking exercise aims to exploit the generated knowledge by exchanging experiences and provide the readers of this handbook with a good insight into the different possibilities of implementing successful regional RTD and innovation policies. Furthermore, it can help regions to realise their limits and opportunities and to be more efficient, competitive and sustainable. Besides this, the exercise can also raise awareness about performance and identifies relative regional strengths and weaknesses.

XIII

Executive Summary

NOVAREGIO (Innovative Network for coordinated actions on RTD policies at regional level) aims at enhancing the interaction between regional policy makers regarding the implementation of regional RTD and innovation policies, aimed at fostering networking and providing guidelines to policy makers in RTD and innovation matters.

This intent has been pursued by mobilising seven European regions 2 , located in the central eastern part of Europe and in peripheral maritime areas, giving them the opportunity to learn from each other and building up as well as strengthen already previously established cooperation activities, considering this action as an experiment to establish and validate effective policy design as regards regional RTD and innovation matters.

A benchmarking exercise has been accomplished that contributed to identify

implemented regional RTD and innovation policies, to analyse the key areas of

interest the regions are focusing on, and to let emerge the best policy practices in the different fields of interest. The intention of the exercise was to emphasise those regional policies whose inherent knowledge and underlying processes resulted to be the most effective ones. In this regard, the exercise helped giving policy makers examples on policies whose adoption to the own regional context can contribute to

the enhancement of the own regional innovation capacity and performance.

A tailor-made approach has been developed and adopted to the NOVAREGIO

context, in order to collect and analyse the data necessary to select the best practices and transfer their knowledge to all the involved regions as well as further regions

lying outside the project context but potentially interested in learning from the achieved results.

In total, the exercise comprised the selection of 25 RTD and innovation policies

showing interesting policy contents and considered as promising for improving regional development. 11 of them have been considered by regional policy makers and further important regional stakeholders, involved in policy management and financing, as valuable and critical for moving towards knowledge based economies. These 11 best practices were analysed in detail as regards their policy design techniques and functionality and were appointed as benchmarks in this handbook.

The 11 selected benchmarks

In order to render a practice (in the project context the regional policy) transferable

and adaptable to one’s needs, it has to be underlined before implementing it how and

2 The NOVAREGIO project, coordinated by AREA Science Park, involves 8 partners from 7 European Regions – Canary Islands (Spain), Crete (Greece), Småland med Öarna and West Sweden (Sweden), Slovenia, Styria (Austria), South Tansdanubia (Hungary) and Friuli Venezia Giulia (Italy) – representing outstanding organisations dealing with the management and diffusion of innovation.

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why the practice has become a successful one. Each benchmark has been analysed and described in detail, illustrating each single working step accompanied by a process flow-chart, success factors and performance indicators giving evidence to the effective implementation of the practice in the region.

The 11 benchmarks are the following:

a) SISTER

b) Innovation Network TM

c) Baross Gabor Programme

d) Skills Development of Qualified Employees

e) Start-up Entrepreneurs

f) Centre of Excellence

g) UNISTEP

h) Pancreta Development Fund

i) BIC Canarias

j) SMED

k) HCTA

a) The SISTER project aims at increasing technology transfer activities in the region

Friuli Venezia Giulia by enhancing the economic value of research results accomplished by the Public Research Organisations (PROs) located in the region. Through the adoption of a new valorisation process, those research results are brought to the market that are representing high potential for being applied and successfully exploited by industry.

b) Innovation Network TM is an initiative sustaining also technology transfer activities

in Friuli Venezia Giulia but through the improvement on the industry side by enhancing technology demand. The initiative established a Network of specialised Competence Centres for the different production areas of the region, aiming at boosting the spreading of new technologies at regional level and offering enterprises innovation services of added value.

c) The Baross Gabor Programme aims to improve the local innovation potential in

the region South Transdanubia, addressed specifically to the small and medium- sized enterprises in the region. The programme is executed through a Call for Proposals tailored to the specific regional needs, objectives and the six core sectors of the region.

d) The programme Skills Development of Qualified Employees supports an efficient

and goal-oriented training in the region Styria in order to strengthen the competitiveness of the local companies and the competences of their personnel. The programme is addressed to different kinds of employees and provides financial

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assistance for high-quality training schemes with an innovative concept going beyond standard courses and seminars.

e) Start-up Entrepreneurs is a programme of the region Styria that provides support

to a new establishment or the starting up of an activity that contributes to a fundamental change in product management or production. The programme offers a tailor-made approach to different kinds of entrepreneurs and supports in particular those projects that improve the potential fields of strengths identified by the region.

f) The Centre of Excellence is a programme set up in Slovenia, bringing together key

players from the scientific-research sector and the economy environment. The programme supports technology transfer activities through facilitating the implementation of innovative projects in the region, focalised on selected technology areas. The establishment of a Centre of Excellence underlies strict requirements as regards the partnership and the financial liquidity of the participants.

g) UNISTEP – University Students Entrepreneurship Programme – is an initiative implemented in the region Crete and aimed at counteracting the brain drain existing in the region by creating a positive environment for cultivating entrepreneurship among university students. The programme includes a theoretical and practical part. Trainings on entrepreneurship are offered and laboratories are made available for the creation, development and testing of prototypes which could be later exploited on the market through a new technology based enterprise.

h) The Pancreta Development Fund is a funding source for high-risk entrepreneurial

incentives, completing the financial instruments existing in the region Crete. The fund provides in particular support to SMEs and start-up companies, focusing mainly on new technologies, innovative products and further activities particularly with regard to tourism development and the exploitation of local resources.

i) BIC Canarias is an initiative set up in the Canary Islands and aimed at integrating organisations and resources in order to provide services to the entrepreneurs in four selected islands. On each of these four islands, a Business Promotion Unit (BUP) is established, supporting innovative business ideas of local entrepreneurs. The activities of BIC Canarias include a pre-incubation phase in which extensive project search activities are carried out and an incubation phase in which direct services are offered to selected companies.

j) SMED – Small and Medium-sized Enterprises Development – develops big ideas

in small companies in the region Småland med öarna so as to let more innovators reach the market and stimulate new product development for increasing the existence of competitive companies in the region. The programme informs companies about financing possibilities and focuses on product development, product innovation and product design.

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k) The HCTA – Healthcare Technology Alliance is an initiative supporting the development of new products and services in healthcare technology in the region West Sweden. HCTA functions as a network and encompasses a large number of companies, organisations and research and development institutions working in the healthcare technology field. The alliance is a good opportunity to set up development projects and thus to strengthen the regional innovation system for healthcare technology.

The detailed description of the benchmarks supports the sharing and the implementation of best practices on RTD and innovation policy design within the seven project regions, as well as further interested regions, reinforcing thereby the innovation performance of the regions and contributing to the goal of turning European regions into knowledge-based societies. According to the aim of the project, the benchmarking exercise led to a real mutual knowledge transfer among the project regions, setting the basis for generating substantial improvements in efficient and adequate policy management.

As the programming period 2007 – 2013 for the structural funds shows, the topics of the identified benchmarks are lying all in the target areas to be strived for in the near future. Core issues considered to lead to efficient innovation policies are public- private partnerships, particularly set up in the form of the triple-helix model, involving government, academia and industry, all of them players that are bringing to the partnership a special expertise of strategic importance. Furthermore, the building of clusters is advisable for stimulating innovation and productivity growth, achieved through the facilitated knowledge spill-over and increased information flow. The investment in high-skilled human resources is mandatory for generating new ideas and products, and thus sustaining the innovation performance of a region. Innovative financing instruments, such as venture capital funds, are a further issue to be considered in regional policy design. Innovation activities are related to risk intensive undertakings and hence need a greater initial investment which often is not provided by banks, especially when requested from financially weak SMEs.

All these objectives can be best achieved when being approached at regional level, since the regional approach permits the direct involvement of regional key actors and allows for designing policies that are tailored more directly to the specific regional needs.

The transfer of the benchmarks into other regional contexts provides a good initial point for realising the objectives set by the EU in the single regions. However, the 11 benchmarks should be considered as reference models for the future policy design. Of course, they cannot be applied within the environment of each region automatically: adaptations and adjustments to the characteristics of each single region, such as the environmental conditions, legal framework, industrial core sectors, structure of the local companies, existing organisations and institutions for promoting research and industrial growth, available human resources, etc. will be always necessary.

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The transfer of the benchmarks should be intended as a broad activity, transversal to the whole benchmarking exercise and running since the beginning of the project. It is not only a matter of transferring results but also to allow a more comprehensive knowledge transfer process related to the benchmarking model, the process flow development, the selection process and the validation and engineering of each single benchmark. Best results can be achieved when embedding the benchmarking process into the strategic policy design and implementing it in relation to the regional policy making process, thus serving as an on-going policy impact assessment and evaluation tool.

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Chapter 1.

The concept of

Benchmarking, definition and objectives

The concept of Benchmarking, definition and objectives

1.1 Defining Benchmarking – what is regional Benchmarking?

Benchmarking is a self-improvement tool and describes the procedure in which a company, organisation or any other (multi-organisational) system carries out three processes:

1)

compares its performance against best-in-class systems;

2)

determines how these systems have achieved their superior performance; and

3)

uses the collected information to improve its own performance.

Basically, all processes can be the object of benchmarking.

Most organisations tailor the definition of benchmarking to their own strategies and objectives, so that numerous definitions of benchmarking exist. Generally speaking, there do not exist neither correct nor false definitions of benchmarking, but rather adequate or inadequate definitions related to a specific case. Two examples of defining benchmarking are given below:

“Benchmarking is the process of comparing yourself with others -- measuring your service's processes and performance and systematically comparing them to the performance of others in order to seek best practice. It enables the identification of areas where improvement is possible, how it might be achieved and what benefit it might deliver.”

Source: Foot (1998) How to do Benchmarking: A Practitioner's Guide

“Benchmarking is the process of improving performance by continuously identifying, understanding (studying and analyzing) and adapting outstanding practices and processes found inside and outside the organisation and implementing the results.”

Productivity and Quality Centre (1997): What is

Source:

American

Benchmarking

Benchmarking stems from private sector business and over the past years, this management technique has been adopted and adapted from the private sector in public policy. In fact, benchmarking has become increasingly popular for political systems given the fact that nations and regions are facing increased competition from other competing systems. Today, it has become necessary for regions to improve and invest in their competitiveness.

In this regard, regional benchmarking, derived from the term territorial benchmarking, has been developed, a rather new form which looks at the

2

The concept of Benchmarking, definition and objectives

performances of regions and the causes of their performance 3 . Questions that one should ask in this context are:

How do other regions perform?

How important are the performance gaps between the regions?

Which are the regions showing outstanding performances?

Which practices are sustaining best performance?

Regional benchmarking means that a specific region conducts a benchmarking process in order to improve its regional development or selected foci of it. Usually, this kind of benchmarking process comprises the collection, analysis and documentation of good practice cases, ensuring at the same time the devoted participation of key stakeholders in the process in order to encourage commitment to using the knowledge generated in the policy design.

There do not exist overall best regions against whom to benchmark. Instead it is crucial to select adequate and appropriate regions against whom to benchmark. What an adequate region depends on heavily is the main purpose of the benchmarking exercise and the nature of the region to be benchmarked. If a region for example uses benchmarking for primarily strengthening its own position within the country, it makes sense to benchmark against other domestic regions. If instead a region is interested in learning how to handle a particular challenge, regions should be identified with a very similar challenge and which have successfully faced this particular challenge.

When considering regional strategies and guidelines designed to boost the economic development of regions, the term policy benchmarking comes into play. Policy benchmarking aims at evaluating alternative policies, implementing strategies and improving performance by understanding and adapting successful strategies implemented in further regions. The main objective of the exercise is to provide policy makers with examples of best practices by identifying adequate, well defined and successfully implemented policies. Policy benchmarking goes beyond the assessment of the indicators determining observed performance but provides furthermore an understanding of the processes, skills and capabilities that create superior performance.

There are numerous approaches on how to conduct benchmarking and the definitions of benchmarking are manifold. Although there does not exist an overall best approach, it is necessary to adapt the method that results the best according to the characteristics of the endeavour, such as the object of benchmarking, the time horizon and the available budget.

However, essentially each benchmarking definition involves learning, sharing information and adopting best practices in order to improve processes based upon

3 Innovating Regions in Europe (IRE) Secretariat, 2006.

3

The concept of Benchmarking, definition and objectives

the insight on what makes processes effective and efficient. ‘Process’ implies a sequence of activities made up of tasks and steps that cross the boundaries between functions. Focusing on the process, distinguishes benchmarking from stocktaking. The act of appraising a present situation, condition or degree of progress in a systematic comparison to previous situations, conditions in other systems, as e.g. regions, or strategic objectives is described. In practice, benchmarking usually encompasses:

best

regularly

comparing

aspects

of

processes’

performance

with

practitioners;

identifying gaps in performance;

seeking fresh approaches to achieve improvements in performance;

following through with implementing improvements;

following up by monitoring progress and reviewing the benefits.

Although benchmarking involves making comparisons of performance, it is not a merely competitor analysis but instead is best undertaken in a collaborative way in order to learn about the circumstances and processes that underpin superior performance. In this regard, regional benchmarking explicitly aims to exploit the

generated knowledge by defining and implementing adequate policies in a regional context. Consequently, it is required that the benchmarking process is embedded into

a strategic policy process (policy benchmarking). This means that the exercise

should be implemented in relation to the regional policy making process and can serve as an on-going policy impact assessment and evaluation tool.

The benchmarking exercise adopted in NOVAREGIO follows the principles of regional benchmarking, having as target the seven selected central European and peripheral maritime regions 4 . Given that the analysis focuses specifically on RTD and innovation policies implemented in the target regions, the exercise includes furthermore the policy benchmarking approach, thus making policy benchmarking to an integrated element of the regional benchmarking exercise.

The ultimate aim of the benchmarking methodology applied to the NOVAREGIO project context is to offer regional governments and policy makers an effective tool

to foster competitiveness in selected fields, considering also the time span needed

for the successful implementation of development policies and the impact those have

in the long run.

4 Generally, a region is an extensive, continuous geographically defined part of the earth’s surface. The term is used for vast parts of the earth like Asia/Pacific as well as for areas which constitute a small part of a country, as e.g. a city and its surroundings. Considering the work programme Regions of Knowledge in which NOVAREGIO has been set up, the term region is used throughout the project and therewith also within this document to describe any geographically defined functional system at sub-national level (Slovenia, being a small nation is referred to as region as well).

4

The concept of Benchmarking, definition and objectives

1.2 Benefits from Benchmarking – why engage in regional Benchmarking?

Benchmarking is usually part of a larger effort, generally a Process Re-engineering or Quality Improvement initiative. When used appropriately, it has proved to be one of the most effective tools for attaining high improvements in performance. Benchmarking provides:

an effective ‘wake-up call’ and helps to make a strong case for change;

practical ways in which step changes in performance can be achieved by learning from others who have already undertaken comparable changes;

the impulse for seeking new ways of doing things, promoting a culture that is receptive to fresh approaches and ideas;

opportunities for staff to acquire new skills and to be involved in the process of change from the very beginning.

Benchmarking activities can be implemented in different environments. In the private sector the purpose of benchmarking is to gain competitive edge. The benchmarking approach has become embedded in successful commercial organisations as a means of seeking innovation outside the industry paradigm and to keep up at the forefront of competition. Regarding the public sector, organisations operating in this environment have increasingly been turning to benchmarking their public services in order to improve and achieve the sort of step changes needed to deliver modern public services. 5 On an European scale, benchmarking is used as an instrument for reaching improvements in performance in both public and private sector, aiming to increase the competitiveness of the European economy as a whole.

When specifically referring to regional benchmarking, the ultimate objective is to improve regional development. Regional benchmarking is a powerful tool which contributes to regional development by effectively serving a number of key functions, such as the following 6 :

Raising awareness: One of the most important added values of the regional benchmarking process is raising awareness among regional stakeholders regarding the region’s position in comparison to other regions. Presenting the own regional situation by confronting with others may motivate and commit regional policy and decision makers to review strategies and policies.

Generation of knowledge: The process permits to learn how to effectively address major challenges based upon others’ policy-learning experiences. A system cannot perform all learning internally but has to integrate competence from outside the own system. A main reason for implementing benchmarking is

5 Public Sector Benchmarking Service (PSBS).

6 Innovating Regions in Europe (IRE) Secretariat, 2006.

5

The concept of Benchmarking, definition and objectives

(policy

benchmarking).

Trans-regional co-operation: Trans-regional benchmarking projects can be an opportunity to collaborate with other regions and establish trans-regional partnerships. Regions working together on the common approach of a benchmarking methodology get to know each other better and built up mutual trust, thus constituting the basis for further strategic forms of cooperation.

to

learn

about

how

policy

has

an

impact

on

regional

systems

Creation of commitment: Commitment results from the perception and communication that there are major threats and opportunities ahead, that others are prepared to deal with them and that there are lessons learnt to be implemented by the region in order to become or remain competitive.

Regional marketing: Benchmarking can be applied as a regional marketing tool. In this context, the regional benchmarking exercise is utilised as a promotion tool and as an instrument to position the region as a leader in specific fields on the market.

In conclusion, regional benchmarking creates and strengthens the key stakeholders’ motivation, their competence and devotion to boost regional competitiveness by implementing more effective and efficient policies. A successful benchmarking exercise bridges gaps in performance by improvements, and results in significant tangible benefits, such as:

- supply policy makers with examples of best practice;

- step changes in performance and innovation;

- improving quality and productivity;

- improving performance measurement.

6

The concept of Benchmarking, definition and objectives

1.3 Types of Benchmarking

There are almost as many types of benchmarking as there are definitions. The various definitions depend on what an organisation or any other system intends to benchmark. In the following table, the main types of benchmarking are illustrated.

Table 1.1 – Types of Benchmarking

Type of Benchmarking

Description

Strategic

- Applied when organisations seek to improve their overall performance by examining long-term strategies and general approaches that have enabled high-performers to succeed.

- Involves assessment of strategic rather than operational matters.

Performance

- Used where organisations consider their positions in relation to performance characteristics of key products and services, quantified in terms of price, speed, reliability, etc.

(Competitive)

- Benchmarking partners are drawn from the same sector.

Process

- Utilised when the focus lies on improving specific critical processes and operations.

- Comparing to discrete work processes and operating systems.

Functional (Generic)

- Applied when organisations look to benchmark with two or more organisations drawn from different business sectors or areas of activity.

Internal

- Seeking partners from within the same organisation, e.g. from business units located in different areas or processes.

External

- Seeking outside organisations that are known to be the best in class.

International

- Benchmarking partners are sought from other countries because best practitioners are located elsewhere in the world and/or there are too few benchmarking partners within the same country to produce valid results.

When selecting the type of benchmarking to be used, different aspects have to be taken into consideration. It has to be defined in the first place which objectives the exercise wants to achieve and which aspects should be reviewed. Moreover, time and resources available are further important features that have to be respected.

Each of the above described benchmarking types has its benefits and shortcomings and there are circumstances in which one type is likely to be more suitable than other types. However, it is essential to outline the difference between performance and process benchmarking since all categories will fall into one of these two areas or into both.

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The concept of Benchmarking, definition and objectives

Performance benchmarking compares the performance of output of activities. Such measures can indicate which activities are the organisation’s or system’s strengths and find ways of closing gaps of performance. Once identified, further investigation is required to establish how such performance is achieved.

On the other hand, process benchmarking looks at the processes used by organisations or systems and compares these against what is deemed to be the best practice. Such processes are invariably made up of several sub-processes that produce an overall approach or process.

Figure 1.1 – Performance and Process Benchmarking

Process Process Benchmarking Benchmarking Performance Performance Benchmarking Benchmarking Effort required, Cost
Process
Process
Benchmarking
Benchmarking
Performance
Performance
Benchmarking
Benchmarking
Effort required, Cost
Effort required, Cost
Depth of understanding, Potential benefits
Depth of understanding, Potential benefits

It has been discovered that actual improvements following benchmarking arise from consideration and observation of the processes rather than from the output measures. That is why a large extent of time and effort is needed when carrying out a benchmarking exercise. In a first step, the questions and areas to be investigated need to be established and agreed on. Obtaining data, completing questionnaires and any subsequent analysis are also issues that are very time consuming.

If the output of the analysis is merely a set of statistics, then the return on investment will be minimal and subsequently, the results are not worth the effort that has been made before. Indeed, a thorough analysis of the processes and procedures that support the figures must also be undertaken if major improvements are to be made.

For these reasons, many benchmarking exercises try to obtain both measures of performance and process, in order to know not only who does what best, but also to discover how such good performers get there.

8

The concept of Benchmarking, definition and objectives

With reference to NOVAREGIO, both performance and process benchmarking are applied to the regional context. The performance of each involved project region regarding RTD and innovation is evaluated in relation to all involved regions by analysing their implemented RTD and innovation policies. Furthermore, the conducted exercise intends to put emphasis on the critical processes underlying to the selected successfully implemented regional policies, so as to provide to the other regions examples of high-performing strategies. The exercise regards also the international dimension of benchmarking since the regions are located in seven different countries, all of them implementing successful policies which tackle different topics but on the whole, all aimed at improving the RTD and innovation performance of the regions.

9

The concept of Benchmarking, definition and objectives

1.4 The Benchmarking Methodology

As the previous sections show, there exists a wide variation of benchmarking definitions, their types and applications. However, in all methods, benchmarking is essentially a structured approach to comparison.

INNOVA has developed its own Benchmarking Consulting Practice 7 which is built around a 4-step model as illustrated in figure 1.2. The model is based on the IVEM (Identification, Validation, Engineering and Monitoring) Benchmarking Cycle which is the core of the benchmarking practice and is, in turn, built around the following four steps:

Identification of the areas/business processes to be benchmarked;

Identification of the benchmarking sample;

Streamlining of areas/business processes to be benchmarked;

Application of the IVEM Benchmarking Cycle.

The first step in the Benchmarking Consulting Practice is the identification of the areas/business processes to be benchmarked. It is important to have a clear focus since the tighter the definition of the areas under study, the more valuable and focused the learning opportunities.

Once the areas to be studied have been defined, the benchmarking sample will be identified: whom to benchmark with.

A third step in the methodology is the streamlining of the areas/business processes to be benchmarked. An useful instrument to develop this step is the development of a flow-chart representing all the stages in the process.

Last but not least is the application of the IVEM Benchmarking Cycle, which consists of the Identification, Validation, Engineering and Monitoring of selected practices or potential benchmarks.

The selected practices or potential benchmarks will eventually become proper benchmarks once they have been validated and the processes behind the practices have been engineered. The emphasis is placed on how a practice has been achieved and it is only by analysing, structuring and engineering the processes behind that an organisation can improve and learn from benchmarking. The benchmarking consulting practice is best suited to cooperative benchmarking environments, where the opportunities to develop a learning atmosphere and the sharing of knowledge are greater.

7 The “Benchmarking Consulting Practice” has been originally developed within the Benchmarking Exercise conducted by the company INNOVA Europe, subsidiary of INNOVA, for the Innovation Relay Centres Network throughout the period 2001-2005. Further successful applications and adaptations to other European networks have followed since 2004.

10

The concept of Benchmarking, definition and objectives

In the following pages, a detailed description of the 4 moments that form the IVEM

Benchmarking Cycle 8 is provided:

Identification

There are many ways in which potential benchmarks can be identified. Depending on the type of study to be undertaken, one might consider using questionnaires, direct interviews, ad hoc visits, etc. in order to spot interesting practices.

A carefully designed benchmarking questionnaire, containing both qualitative and

quantitative questions, is always a good start in the search of the potential benchmarks. Once the information has been gathered through any of the means cited

above, the data must be analysed. This analysis must involve a deep understanding

of

current process practices as well as of their performance indicators. On the basis

of

this analysis, there is a first selection of practices that should be further examined

and evaluated before they can be considered benchmarks. At this stage, additional information on the selected practices are collected and the material to evaluate and validate them is prepared (a useful hint to accomplish this task is to prepare a list of questions and a draft of the process flow-chart to be discussed with the organisation that “owns” the potential benchmark).

Validation

The Validation phase together with the Engineering phase are the most distinguishing features of the Benchmarking Consulting Practice. Validation, as the word indicates, refers to the verification of the collected information and the acquisition of additional information. The validation activity is usually carried out through visits and direct interviews to the organisation that “owns” the potential benchmark.

The acquisition of information of various types (quantitative and qualitative) and formats (manuals, software, brochure and so on) is essential to complete the whole picture of a given practice and should be done in an ordered manner, planning in

advance the type of information to be requested and structuring the questions to be asked. Furthermore, in order to optimise resources, it would be highly recommended

to prepare a draft of the process flow chart, representing the potential benchmark

and discuss it with the organisation’s manager(s).

Engineering

This phase represents the core of the current Benchmarking Consulting Practice. Once all the information about a practice has been gathered and validated, the engineering comes into play. This is accomplished through the following actions:

- identifying all the elements that are part of that particular practice;

- breaking them down into the smallest possible pieces;

8 INNOVA Europe, 2003.

11

The concept of Benchmarking, definition and objectives

- pulling them back together, reconstructing the puzzle, in a logical and structured manner.

Engineering therefore, involves structuring the potential benchmarks into logical and sequential steps in order to understand what is behind the benchmark and how it has been achieved.

The idea that any practice is performed in a step-by-step manner, with a beginning, an end and tasks in between can be illustrated using a process flow. The flow-chart clearly shows the elements in which a specific benchmark has been broken down and therefore decodes the knowledge and the know-how built in the benchmark. Representing all the stages in the process makes the benchmark understandable in all its parts and clarifies how it has been achieved. Once this is fully understood, the benchmark can be transferred or adapted to other organisations. When the best practices have been identified, the processes in the partner organisation are communicated and studied and a scheme for implementation of these processes is established: what needs to be looked at is why the best are the best, what processes have they followed to reach where they are. These are questions that will lead to a workable road map for improvement.

Monitoring

Benchmarking is a continuous and recursive process, not a snapshot that is performed once and disregarded afterwards. Monitoring and reviewing is necessary to see how the benchmarks evolve over time; it should involve looking at the evolution of the performance indicators, by measuring on a regular basis the performance achieved, as well as observing the process flow to detect any changes in the steps or in the activities undertaken.

Monitoring can be directed to the identification of new areas of work to be further analysed and/or to new benchmarks in those same areas as well.

In order to close the loop and ensure that benefits do materialise, it is essential to review the implementation of the practices and whether the adopted practices have managed to fill a performance gap.

The following Chapter 2 presents a practical application of the benchmarking consulting practice to the context of the NOVAREGIO project. The benchmarking initiative has led to the identification of eleven best practices concerning RTD and innovation performances, selected within the seven involved project regions. These practices in the course of the benchmarking exercise have been validated and engineered and hence turned into eleven benchmarks which will be illustrated in detail in Chapter 3.

The detected benchmarks represent successful models of regional policies developed by regional authorities and dealing with topics such as technology transfer and networking initiatives as well as entrepreneurship, new product development, human

12

The concept of Benchmarking, definition and objectives

resources’ development in S&T and last but not least with the raising of public and private funds.

Specific knowledge is being brought to the forefront, finally giving project partner regions as well as further regions the opportunity to adapt and apply proven successful methodologies to their own regional policies’ design.

13

Figure 1.2 – Benchmarking Consulting Practice

The concept of Benchmarking, definition and objectives

14

Identification of

Identification of

Identification of

Identification of

Identification of

Identification of

Identification of

Identification of

areas/business processes

areas/business processes

to be benchmarked

to be benchmarked

to be benchmarked

to be benchmarked

to be benchmarked

to be benchmarked

 
 

Identification of the

Identification of the

Identification of the

Identification of the

Identification of the

Identification of the

benchmarking sample

benchmarking sample

 
 

Streamlining of

Streamlining of

Streamlining of

Streamlining of

Streamlining of

Streamlining of

Streamlining of

Streamlining of

areas/business processes

areas/business processes

to be benchmarked

to be benchmarked

to be benchmarked

to be benchmarked

to be benchmarked

to be benchmarked

 
 
Benchmarks Benchmarks Benchmarks Benchmarks Monitoring Monitoring Identification Identification
Benchmarks
Benchmarks
Benchmarks
Benchmarks
Monitoring
Monitoring
Identification
Identification

Benchmarks

Benchmarks

Engineering

Engineering

Identification Identification Benchmarks Benchmarks Engineering Engineering Benchmarks Benchmarks Validation Validation

Benchmarks

Benchmarks

Validation

Validation

Benchmarks Benchmarks Validation Validation IDENTIFICATION IDENTIFICATION IDENTIFICATION
IDENTIFICATION IDENTIFICATION IDENTIFICATION IDENTIFICATION IDENTIFICATION IDENTIFICATION IDENTIFICATION
IDENTIFICATION
IDENTIFICATION
IDENTIFICATION
IDENTIFICATION
IDENTIFICATION
IDENTIFICATION
IDENTIFICATION
IDENTIFICATION
VALIDATION
VALIDATION
VALIDATION
VALIDATION
VALIDATION
VALIDATION
VALIDATION
VALIDATION
ENGINEERING
ENGINEERING
ENGINEERING
ENGINEERING
ENGINEERING
ENGINEERING
ENGINEERING
ENGINEERING
MONITORING
MONITORING
MONITORING
MONITORING
MONITORING
MONITORING
MONITORING
MONITORING
Questionnaires Questionnaires Questionnaires Questionnaires Visits Visits Visits Visits Interviews Interviews
Questionnaires
Questionnaires
Questionnaires
Questionnaires
Visits
Visits
Visits
Visits
Interviews
Interviews
Interviews
Interviews
Analysis of practices & performance
Analysis of practices & performance
Analysis of practices & performance
Analysis of practices & performance
indicators. 1st Selection of practices
indicators. 1st Selection of practices
indicators. 1st Selection of practices
indicators. 1st Selection of practices
Contacts to gather more information
Contacts to gather more information
Contacts to gather more information
Contacts to gather more information
Preparation of material for the validation visit
Preparation of material for the validation visit
Preparation of material for the validation visit
Preparation of material for the validation visit
Visit and
Visit and
Visit and
Visit and
Direct Interview
Direct Interview
Direct Interview
Direct Interview
Verification of the information provided and
Verification of the information provided and
Verification of the information provided and
Verification of the information provided and
acquisition of further information
acquisition of further information
acquisition of further information
acquisition of further information
Process Flow
Process Flow
Process Flow
Process Flow
Break
Break
Break -down of practices into structured and
Break -down of practices into structured and
-down of practices into structured and
-down of practices into structured and
sequential steps.
sequential steps.
sequential steps.
sequential steps.
Review & Updating
Review & Updating
Review & Updating
Review & Updating

Chapter 2.

The IVEM

Methodology applied to the NOVAREGIO context

The IVEM Methodology applied to the NOVAREGIO context

2.1 Objectives of the NOVAREGIO Coordination Action

The NOVAREGIO project (‘Innovative Network for coordinated actions on RTD policies at regional level’), funded under the 6 th Framework Programme for Research and Technological Development, is a Coordination Action that enhances the interaction between regional policy makers regarding the implementation of regional RTD and innovation policies, aiming to foster networking and provide guidance to policy makers in RTD matters. This endeavour is achieved through mutual learning processes initiated in seven selected regions that are, as figure 2.1 demonstrates, geographically located in the areas of competence of two major European organisations: the CEI 9 - Central European Initiative and the CPMR 10 - Conference of Peripheral Maritime Regions of Europe:

Friuli Venezia Giulia (Italy)

South Transdanubia (Hungary)

Styria (Austria)

Slovenia

Crete (Greece)

Canary Islands (Spain)

Småland med öarna/West Sweden (Sweden)

9 The Central European Initiative (CEI) - www.ceinet.org - is the oldest and largest of sub-regional co- operation initiatives that emerged in Central and Eastern Europe after the collapse of the communist system. Founded by Austria, Italy, Hungary and Yugoslavia in 1989, as Quadrilateral co-operation, its membership increased to 10 by 1994, to 16 by 1996 and to 17 in 2000 with the accession of the Federal Republic of Yugoslavia. Other CEI Member Countries are Albania, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Macedonia, Moldova, Poland, Romania, Slovak Republic, Slovenia and Ukraine. The CEI, as an intergovernmental body is involved in the NOVAREGIO project through its Science and Technology Network.

10 The Conference of Peripheral Maritime Regions of Europe (CPMR) - www.cpmr.org was founded in Saint-Malo in 1973 on the initiative of the Region of Brittany, at the same time as the United Kingdom, Ireland and Denmark entered the European Community. Today, the CPMR’s membership includes 154 Regions from 27 States – both members and non-members of the EU – all located in one of Europe’s main sea basins.

16

The IVEM Methodology applied to the NOVAREGIO context

Figure 2.1 – Central European Initiative (CEI) & Conference of Peripheral Maritime Regions of Europe (CPMR)

CEICEI
CEICEI
CPMRCPMR
CPMRCPMR

Out of 25 RTD and innovation policies implemented within these seven regions, eleven have been validated, engineered and thus benchmarked for finally being transferable to further regional contexts of the involved partner regions as well as to regions lying outside the project context.

As already underlined before, there do not exist overall best regions against whom to benchmark; instead it is crucial to select adequate and appropriate regions against whom to benchmark. NOVAREGIO comprises regions that are all concerned with improving their regional RTD and innovation performance, and in this regard they all set similar foci for reaching this goal, which are amongst others the enhancement of technology transfer activities, clustering activities and the support of entrepreneurship within the regions.

The ultimate objective of the project is to diffuse expertise knowledge on RTD and innovation policies’ benchmarks and to ensure a more efficient use of structural funds in supporting RTD investment. In the long run, the project activities aim to sustain a greater convergence towards a knowledge-based society in Europe, along with fostering networking and providing guidance to policy makers in RTD matters.

It would be an overstatement to claim that Benchmarking represents a formula which guarantees success, but it does represent an approach which has been independently tried and proven by many organisations around the world. Benchmarking is to be an action-oriented exercise and in the context of the NOVAREGIO project the lessons learnt should lead to better-targeted policies and knowledge based strategies. The final results should be taken into account in the policy design as well as in the policy implementation. The precondition for reaching this goal is the active participation of relevant stakeholders in the process, ensuring their commitment to use and adapt the knowledge generated through the benchmarking exercise in the future policy design.

17

The IVEM Methodology applied to the NOVAREGIO context

More specifically, Benchmarking applied to NOVAREGIO can bring about two substantial improvements at two levels:

1. At Regional level:

Better understanding of the Region: exploring own innovation processes and resources thoroughly will lead to a more comprehensive understanding of the regional approach that is being taking in order to promote innovation activities within the Region: what is the Region doing?, who are the best innovation performers in the Region?, for what are funds being spent and where are they generated?

Establishment of goals: Benchmarking will enable regions to set performance goals which are achievable and realistic in the framework of the regional environmental conditions, by ensuring that best, feasible, proven practices are taken up in the regional context. The philosophy should be: “If other regions can, why can’t we?”

Objective diagnosis: Benchmarking will show, following an objective and systematic approach, how regional innovation processes can be improved, by comparing them with those regions whose processes have been selected as benchmarks.

2. At Project level:

Stimulation of Networking: Benchmarking will stimulate direct exchange of information and networking among the regional authorities and policy makers participating to the project, thus enhancing their level of interaction.

Learning and Management of Knowledge: Benchmarking will be a source of learning and therefore of knowledge. This source of knowledge needs to be widespread among the partner regions as well as further regions involved in the two European organisations CEI and CPMR, so as to facilitate the dissemination of best practices and finally promote “learning from each other” within regions.

In the framework of these common improvements that are to be achieved by means of the benchmarking exercise, other important aspects distinguishing the single regions such as cultural differences, national traditions, funding schemes and different working methodologies have been considered. The unifying element of the exercise is to move the regions forward concerning their RTD and innovation performance and to ultimately achieve greater convergence towards a knowledge- based society in Europe.

mentioned

Some

objectives:

The exercise goes beyond the numbers: Benchmarking is about processes and practices as well as performance. It is only by changing and modifying processes and practices that a region can improve in its innovation policies; simply looking at performance will not lead to improvement.

18

major

conditions

should

be

ensured

to

achieve

the

above

The IVEM Methodology applied to the NOVAREGIO context

The processes and practices used to reach a better RTD and innovation performance are identified: It is worth mentioning that whether practices are called “best” or “good”, they are seldom the ultimate that can be achieved, given that best practice is always contextual. It should be therefore noted that best is a moving target in today’s world, and also situation-specific.

There is commitment from policy makers and further relevant stakeholders and willingness to act upon the results: By learning from comparing, regional policy makers can implement improvements in a manner that is consistent with their regional conditions and culture. The right term is to adapt, not necessarily to adopt. It is rare to find a process that a region can simply transfer to its own context. Instead, regions must assimilate the good practice/methodologies, shape them to their own environments and circumstances, test them to make sure they work in their settings, and then make the changes to their specific conditions.

The purpose of the benchmarking exercise is to support a new way of thinking among the project regions that considers benchmarking as an useful tool for incremental improvements in terms of managing innovation concerns through implemented policies. What’s more, the results of the exercise should be accessible and easily understandable by all stakeholders, thus the outcomes have to be illustrated in a simplified and understandable way.

19

The IVEM Methodology applied to the NOVAREGIO context

2.2 The 4 step model of the Benchmarking Methodology applied to NOVAREGIO

The Benchmarking Practice already explained and illustrated in the previous chapter (see section 1.4) has been tailored and applied to the NOVAREGIO context, as illustrated in Figure 2.2. The adopted methodology follows a 4-step model consisting in:

1. identification of the areas/processes to be benchmarked;

2. identification of the benchmarking sample;

3. streamlining of areas/processes to be benchmarked;

4. application of the IVEM Benchmarking Cycle.

1. Identification of the areas/processes to be benchmarked

The benchmarking study is focused on regional policies promoting RTD and innovation activities. The initial set of interest areas resulted from the analysis done during the project preparation. Originally, four main interest areas were identified on which the analysis had to be focused on:

Public and Private incentives for investments in innovative RTD;

Support for the starting-up of innovative SMEs;

Stimuli for the partnership between Industry and Science;

Investment in Human Resources.

2. Identification of the benchmarking sample

The benchmarking partners are the seven regions that are involved in the NOVAREGIO project and that are located within the areas of competence of two European organisations CEI and CPMR, bringing together central eastern European countries (CEI) and peripheral maritime regions (CPMR).

3. Streamlining of areas/processes to be benchmarked

During the first project months, partner regions elaborated templates with information regarding regional policy makers financing and managing research in the regions as well as the existing policy frameworks including RTD and innovation programmes, projects and initiatives implemented in each region.

After having looked more closely at the single implemented programmes of the partner regions it was shed light on the fact that all of the involved regions, no matter their geographic location and different environmental conditions, follow the same course, thus using the same inputs for developing RTD and innovation initiatives in order to exploit structural funds for RTD most efficiently. That is why the initially selected four interest areas were specified more precisely into the following six so-called “hot topics”:

20

The IVEM Methodology applied to the NOVAREGIO context

Raising Public & Private Funds;

Entrepreneurship – Start-ups;

Technology Transfer;

Development of Human Resources in Science & Technology;

Networking – Clustering;

New Product Development (NPD) – Innovation.

4. Application of the IVEM Benchmarking Cycle

The IVEM Benchmarking Cycle has been adopted to the NOVAREGIO context by carrying out the four activities:

Identification of 25 successful RTD and innovation policies

Validation of 25 Good Practices and selection of 11 potential benchmarks

Benchmark engineering and modelling

Publication and transfer of results, monitoring

In the following sub-chapters the implementation of these four stages is described in detail.

21

Figure 2.2 – Benchmarking Consulting Practice applied to NOVAREGIO

22

The IVEM Methodology applied to the NOVAREGIO context

Identification of

Identification of

Identification of

Identification of

Identification of

areas/business processes

areas/business processes

to be benchmarked

to be benchmarked

to be benchmarked

to be benchmarked

to be benchmarked

to be benchmarked

to be benchmarked to be benchmarked to be benchmarked Identification of the Identification of the Identification
to be benchmarked to be benchmarked to be benchmarked Identification of the Identification of the Identification
Identification of the Identification of the Identification of the Identification of the Identification of the
Identification of the
Identification of the
Identification of the
Identification of the
Identification of the
Identification of the
benchmarking sample
benchmarking sample
Streamlining of
Streamlining of
Streamlining of
Streamlining of
Streamlining of
Streamlining of
Streamlining of
Streamlining of
areas/business processes
areas/business processes
to be benchmarked
to be benchmarked
to be benchmarked
to be benchmarked
to be benchmarked
to be benchmarked
Questionnaires
Questionnaires
Questionnaires
Questionnaires
IDENTIFICATION
IDENTIFICATION
IDENTIFICATION
IDENTIFICATION
Benchmarks
Benchmarks
Benchmarks
Benchmarks
IDENTIFICATION
IDENTIFICATION
IDENTIFICATION
IDENTIFICATION
Visits
Visits
Visits
Visits
Monitoring
Monitoring
Interviews
Interviews
Interviews
Interviews
Identification
Identification
Analysis of practices & performance
Analysis of practices & performance
Analysis of practices &
Analysis of practices &
indicators. 1st Selection of practices
indicators. 1st Selection of practices
performance
performance
Contacts to gather more information
Contacts to gather more information
indicators. 1st Selection
indicators. 1st Selection
of practices
of practices
Contacts to gather more
Contacts to gather more
information
information
Benchmarks
Benchmarks
Benchmarks
Benchmarks
Engineering
Engineering
Validation
Validation
Preparation of material for
Preparation of material for
the validation visit
the validation visit
Visit and
Visit and
Visit and
Visit and
VALIDATION
VALIDATION
VALIDATION
VALIDATION
VALIDATION
VALIDATION
VALIDATION
VALIDATION
Direct Interview
Direct Interview
Direct Interview
Direct Interview
Verification of the information
Verification of the information
acquisition of further information
acquisition of further information
provided and acquisition of
provided and acquisition of
further information
further information
ENGINEERING
ENGINEERING
ENGINEERING
ENGINEERING
ENGINEERING
ENGINEERING
ENGINEERING
ENGINEERING
Process Flow
Process Flow
Process Flow
Process Flow
Break
Break
Break-down of practices into
Break-down of practices into
-
-
sequential steps.
sequential steps.
structured and sequential
structured and sequential
steps
steps
MONITORING
MONITORING
MONITORING
MONITORING
MONITORING
MONITORING
Review & Updating
Review & Updating
Review & Updating
Review & Updating
MONITORING
MONITORING
Identification of Identification of Identification of Identification of Regional RTD & Regional RTD &
Identification of
Identification of
Identification of
Identification of
Regional RTD &
Regional RTD &
Identification of
Identification of
innovation policies
innovation policies
to be benchmarked
to be benchmarked
to be benchmarked
to be benchmarked
Identification of the
Identification of the
Identification of the
Identification of the
7 7
European regions
European regions
Streamlining of
Streamlining of
Streamlining of
Streamlining of
Streamlining of
Streamlining of
6 6
interest area
interest area
to be benchmarked
to be benchmarked
to be benchmarked
to be benchmarked
Benchmarking fact sheets
Benchmarking fact sheets
Questionnaires
Questionnaires
Direct contacts
Direct contacts
Visits
Visits
Interviews
Interviews
Analysis of practices & performance
Analysis of practices & performance
Contacts to gather more information
Contacts to gather more information
1st Selection of 25 Good
1st Selection of 25 Good
indicators. 1st Selection of practices
indicators. 1st Selection of practices
Practices
Practices
Preparation of Fact sheets
Preparation of Fact sheets
Visit and Visit and Evaluation Panel Evaluation Panel Direct Interview Direct Interview Presentation of 25
Visit and
Visit and
Evaluation Panel
Evaluation Panel
Direct Interview
Direct Interview
Presentation of 25 Practices
Presentation of 25 Practices
acquisition of further information
acquisition of further information
to regional representatives
to regional representatives
Qualitative and quantitative
Qualitative and quantitative
Performance indicators
Performance indicators
11 11
Benchmarks selected
Benchmarks selected
Process Flow for each
Process Flow for each
Process Flow
Process Flow
selected benchmark
selected benchmark
Break
Break
Final process flow-chart for
Final process flow-chart for
-
-
sequential steps.
sequential steps.
each benchmark & approval
each benchmark & approval
by regional authorities
by regional authorities
Monitor and update the
Monitor and update the
Process Flow
Process Flow
11 11
benchmarks in terms
benchmarks in terms
of implementation
of implementation
- -
processes & performance
processes & performance
indicators
indicators

The IVEM Methodology applied to the NOVAREGIO context

2.2.1 Identification of 25 successful RTD and innovation policies

The first stage of the IVEM Benchmarking Cycle deals with the identification of a first set of successfully implemented RTD and innovation policies in the seven partner regions. The search for potential benchmarks has been an ongoing task since the beginning of the exercise, because benchmarking is a process and it must be continuous to be effective.

The identification process started at the Project Committee Meeting (PMC) held in Crete in June 2006, where each project partner after consultation with regional key stakeholders (regional authorities, regional administrations, etc.) presented five to seven RTD and innovation programmes and projects implemented in the region.

From July until November 2006, project partners gathered additional information on two to four of the previously presented regional programmes and projects, all lying in the focus of the selected interest areas (“hot topics”) of NOVAREGIO. These practices were considered to be the most interesting ones by the members of the Strategic Steering Committee (SSC) Meeting held in Crete in June 2006 the day after the PMC meeting, and were therefore chosen to be included into the shortlist of the 25 Good Practices. The selected practices resulted to be the most attractive and motivating ones in terms of their learning effects and transferability to other partner regions.

The entire information gathering process has been performed in a structured manner in order to ensure that all regions provided the same type of information, whenever possible. The “information set” for each of the 25 Good Practices contains the following elements:

23

The IVEM Methodology applied to the NOVAREGIO context

Table 2.1 – Information gathered on each of the 25 Good Practices

Information set for the 25 Good Practices

1. Name of the programme

2. Region

3. Time scale

4. Rationale

5. Area of interest

6. Objectives

7. Key activities

8. Key actors

9. Funding information

10. Outcomes

11. Contact and data references

As a result, for each of the selected 25 Good Practices a fact sheet with the main information details was elaborated, as presented in the Annex of this handbook.

2.2.2 Validation of 25 Good Practices and selection of 11 potential benchmarks

The validation phase is the second stage of the IVEM Benchmarking Cycle. In the framework of NOVAREGIO, validation means the examination and evaluation of the information collected on the 25 identified Good Practices on RTD and innovation. This phase concludes with the confirmation of those RTD and innovation policies finally selected and considered as benchmarks.

More precisely, the validation was carried out through the involvement of 7 Regional Evaluation Panels, consisting in key actors in each of the partner regions, who are most important for RTD promotion and innovation development, its management and financing. In specific, these actors were chosen among:

e.g. regional authorities and regional

Regional

representatives

as

administrations;

CEI or CPMR responsible in each Region;

Further key persons involved in financing and/or managing RTD programmes (Technology Parks, Research Centres, etc.).

The participation of these players was essential for the succeeding of the project objectives. In fact, these actors are the ones that are responsible for the regions’ development towards a knowledge based society established on innovative mindsets. Each of the 7 Regional Evaluation Panels expressed one final vote on each of the 25

24

The IVEM Methodology applied to the NOVAREGIO context

Good Practices promoted by the other involved regions. Each Practice was voted with a mark between 1 and 3, meaning:

1 = low interest

2 = medium interest, and

3 = high interest.

Furthermore, more detailed information on regional quantitative and qualitative performance indicators for the final 25 Good Practices were collected by project partners through regional documentations and statistical publications made available on official websites such as EUROSTAT. Although the more detailed investigation revealed that published indicators are not complete due to not elaborated regional data, the eventually gathered indicators represent none the less a supporting tool and scientific component that allow, through the interpretation of statistics, quantitative comparisons and thus the assessment of a region’s performance in innovation and RTD in a qualified way.

The validation of the potential benchmarks was carried out through site visits or via e-mail/phone contact with the regional key actors involved in the Regional Evaluation Panels, by presenting each of the 25 Good Practices to the Panels according to the fact sheets elaborated during the identification phase.

Besides the particular interest on the regions’ side towards the transfer and adoption of specific practices to their own contexts, the selection process of identifying out of the validated 25 Good Practices the final potential benchmarks was based on certain criteria established by the Project Management Committee. The following principles were considered:

each interest area (‘hot topic’) has to be covered with at least one practice;

those practices are selected who get the highest voting from the Regional Evaluation Panels;

no more than two practices can be chosen from each partner region;

at best, each region should be represented in the sample in order to maintain the geographical balance.

Each Regional Evaluation Panel, consisting of up to 7 key actors, gave in a two months period its final vote for each of the 25 Good Practices.

Considering the above described criteria, it emerged out of the final Evaluation Matrix that 11 RTD and innovation policies and initiatives can be considered as benchmarks. These practices are of specific interest to the regions and their final acceptance and approval was achieved during the SSC Meeting held in Trieste in February 2007.

The following table 2.2 illustrates the final 11 benchmarks according to their interest area and regional origin. These benchmarks that are engineered in the following

25

The IVEM Methodology applied to the NOVAREGIO context

phase of the IVEM Benchmarking Cycle, represent the focus of the whole benchmarking exercise and the subsequent knowledge transfer activities conducted within the project.

Table 2.2 – The 11 selected benchmarks according to the areas of interest

Area of interest

Benchmarks

Raising Public & Private Funds

Pancreta Development Fund (Crete)

 

Start up entrepreneurs (Styria)

Baross Programme (South Transdanubia)

Entrepreneurship – Start-ups

UNISTEP (Crete)

BIC Canarias (Canary Islands)

 

SISTER (Friuli Venezia Giulia)

Technology Transfer

Innovation Network TM (Friuli Venezia Giulia)

A Centre of Excellence (Slovenia)

Development of HR in Science & Technology

Skills Development of Qualified Employees (Styria)

Networking – Clustering

Health Care Technology Alliance (Småland med öarna/West Sweden)

New Product Development (NPD) – Innovation

SMED (Småland med öarna/West Sweden)

2.2.3 Benchmark engineering and modelling

The benchmarks’ engineering and modelling as step 3 represents the central part of the four phases of the IVEM Benchmarking Cycle as applied to the NOVAREGIO context. The 11 benchmarks identified and demonstrated in table 2.2 were analysed in detail by structuring the identified practices into logical and sequential steps in order to understand how each practice was built up. In particular this means that in this phase the processes were described from the initial idea of implementing each of the specific programmes, projects or initiatives in the regions until their actual implementation and functionality. These processes were illustrated by using flow charts that clearly show in a step-by-step manner the elements that were needed in order to implement and realise the practices in the regions.

This break down was necessary in order to make the benchmarks viable and transfer or adapt these successful practices to other regions. Project partner regions as well as further potentially interested regions will then be able to work on improving their own practices or adopt new practices in order to attain a standard equivalent to the benchmark. Therefore, only by representing all the stages in these processes the practices can be transferred or adapted to other contexts.

26

The IVEM Methodology applied to the NOVAREGIO context

In Chapter 3, an in-depth description of each benchmark along with the clarification of the process criticalities that are rendering each practice successful and the illustration of the performance indicators is provided. Furthermore, to each benchmark the appropriate process flow-chart representing the engineering process is shown. All flow-charts received the approval of their respective regional policy makers.

2.2.4 Publication and transfer of results, monitoring

The monitoring is the last step in the methodology. Benchmarking is a continuous process, not a snapshot that is performed once and disregarded afterwards. Monitoring is necessary to see how the benchmarks evolve over time.

Given the speed at which the world is moving nowadays, today’s benchmarks might not be tomorrow’s. Therefore, one needs to keep an eye on how these practices change and recalibrate them accordingly. Monitoring should involve looking at the evolution of the performance indicators, by measuring on a regular basis the performance achieved, as well as observing the process flow to detect any changes in the steps or in the activities undertaken by regions who adopted the benchmarks to their contexts.

As regards the project, after the benchmarks have been validated and engineered, the outcomes are communicated and demonstrated to the whole project consortium and regional policy makers as well as further important key actors in three seminars and workshops, accomplished within the period June 2007 until December 2007. The seminars and workshops are the first step for raising awareness on best practices in RTD and innovation policy design and set the foundation of transferring the knowledge inherent to the benchmarks into the partner regions of NOVAREGIO. Further personnel exchanges shall support the knowledge transfer and establish a collaborative working environment among the regions. Following a spill-over effect these practices are to be spread into further regions interested in the take up and the learning of the selected regional policies.

The transfer process in the project is understood as a transversal action which started with the knowledge transfer of the methodology used for carrying out the benchmarking exercise and the building of the process flow, done in accordance with the relevant regional key actors responsible for implementing the practices in the regions. The initial discussion of the 25 Good Practices and the choice of the 11 benchmarks presented a further step of the transfer process. However, the actual knowledge transfer began at the first seminar and workshop where the benchmarks were presented and where the consortium as well as participating policy makers and regional innovation management actors were encouraged to reflect upon how to improve their regional policies in order to support an productive regional innovation development.

In this context, the present manual represents the main dissemination tool and a support to the transfer of the project results to the regions as well as further regions

27

The IVEM Methodology applied to the NOVAREGIO context

lying outside the project scope but potentially interested in learning and taking up successful RTD and innovation policies.

28

Chapter 3.

RTD and

innovation Benchmarks

RTD and innovation Benchmarks

3.1 The 11 NOVAREGIO Benchmarks

Benchmarking is a process-by-process comparison and not an organisation-to- organisation comparison. Actual improvements following benchmarking activities arise from the consideration and observation of the processes rather than only from the examination of the final outputs.

In order to render a practice transferable and adaptable to one’s needs, it has to be underlined before implementing it how and why the practice has become a successful one. This chapter deals with analysing and describing the chosen benchmarks identified within the seven regions of NOVAREGIO and selected during the evaluation process by regional policy makers and innovation actors from December 2006 until February 2007.

The Strategic Steering Committee agreed on eleven best practices which resulted to be the most useful and critical ones to support regional innovation activities (benchmarks). Table 3.1 resumes the eleven benchmarks in the order in which they will be presented in the following sub-chapters including their main success factors.

At first, the regions located in the CEI geographical area are illustrated, subsequently follow the regions situated in the CPMR area. The region Friuli Venezia Giulia as member of both organisations is presented first.

30

RTD and innovation Benchmarks

Table 3.1 – The 11 selected benchmarks in detail

Benchmark

Region

Area of interest

Success Factors

SISTER

Friuli Venezia

Technology

Proactive working approach to PROs

Giulia

 

Transfer

3 alternatives for technology exploitation

Innovation

Friuli Venezia

Technology

Competence Centres tailored for the needs of different local production areas

Network TM

Giulia

 

Transfer

Extensive support throughout entire development- and implementation process

Relationship consolidation

 
     

Exhaustive Call for Proposals preparation (six months)

Baross Gabor

South

Entrepreneurship

Project proposal preparation

Programme

Transdanubia

Start-ups

support

Project proposal evaluation through Expert Committee (prominent innovation actors)

   

Development of

 

Skills

Development of

Qualified

Employees

Styria

Human

Resources in

Science and

Technology

Innovative education concept

Different degree of funding according to geographical area

     

Tailor-made approach for different kinds of entrepreneurs

Start up

Entrepreneurs

Styria

Entrepreneurship

Start-ups

Reimbursement only after project

completion and presentation of supporting documents

Centre of

Slovenia

Technology

Compulsory involvement of research and industry / public and private actors

Excellence

 

Transfer

Companies have to demonstrate 50% of co-funding; public institutions 25% which has to come from the private sector

31

RTD and innovation Benchmarks

     

Initiative set up as joint effort of four of the most important research and technology actors in the region

UNISTEP

Crete

Entrepreneurship

Extensive theoretical training and

Start-ups

mentoring (practical)

     

Involvement of business mentors as industrial partners and potential investors

Extensive promotional activities

     

Combination of the founding institutions (direct relations with the local industry and comprehensive market knowledge)

Pancreta

Network of Contact Points (Pancreta Ventures and bank branches spread throughout the region)

Two-step evaluation process

Development

Crete

Raising public and private funds

Fund

 

Participation of financier to the company’s board

     

Business Promotion Units (BPUs) established on 4 islands, each of them with its own Selection Committee

BIC Canarias

Canary Islands

Entrepreneurship

Selection Committees made up of technical experts and

representatives of the institutions

Start-ups

financing the BPUs

 

BPUs addressed to companies in the creation process AND to already established ones (SMEs)

Comprehensive dissemination and promotion activities

 

Småland med

New Product

Main regional players involved (government, industry and research)

SMED

öarna/West

Development -

Broad and exhaustive marketing activity (4 years)

Stepwise working method

Sweden

Innovation

32

RTD and innovation Benchmarks

HCTA

Småland med

öarna/West

Sweden

Networking -

Clustering

Main regional players involved (government, industry and academia/research); Steering Committee

Aggregation of the companies under one umbrella (Network)

Public/private partnerships supported

Seminars, trainings and network meetings

In the following sub-chapters it will be highlighted why those RTD and innovation policies are considered to be the best, thus providing suggestions and recommendations to policy makers how to improve regional innovation performance.

Each region is described firstly with a brief overview of its main characteristics. Subsequently, an in-depth description of each benchmark is provided, illustrating main conducted activities, overall objectives and the methodology according to which each benchmark has been implemented in the regional context. Furthermore, process criticalities that are rendering each practice successful as well as the illustration of quantitative and qualitative performance indicators is presented. Concerning the qualitative performance indicators in particular, as already mentioned previously, due to not fully existing qualitative regional data it was not feasible to indicate for all benchmarks qualitative performance indicators. Therefore, also quantitative indicators have been taken into consideration which represent an effective supporting tool to allow for quantitative comparisons and thus for a meaningful assessment of the benchmarks’ performance.

Finally, each benchmark is illustrated graphically in a process flow-chart that has been designed in cooperation with the ‘owner’ of the practice through brainstorming on major process tasks and interviews with questions regarding quantitative and qualitative information.

33

RTD and innovation Benchmarks

3.2 Friuli Venezia Giulia

The Friuli Venezia Giulia Region has an area of 7.840,13 km 2 and lays between the Alps and the Adriatic Sea, among Austria, Slovenia and the Veneto Region. The region consists of four Provinces, whose chief towns are Trieste, the regional capital, Udine, Pordenone and Gorizia.

Friuli Venezia Giulia (FVG) is one of the four Italian autonomous regions on the base of a special statute. As a consequence, the Regional Administration is able to adopt local laws targeted to match the local socio-economic needs. As access door to Eastern Europe thanks to its natural geographical position, the region has always been acknowledged the role of a strategic logistic region and nodal point for international trade flows to and from Eastern Europe.

Besides its historical vocation to international trade, Friuli Venezia Giulia is among the European Union’s most advanced areas thanks to its balanced industrial structure with sectors of excellence at world level as well as due to its significant tradition in the field of science and innovation.

Industry system

The industrial system of Friuli Venezia Giulia is characterised by a core of large national and international enterprises, operating with full capacity and competitiveness on the European and world markets in the production of capital goods (steel, industrial plants, machine tools), consumer durables (household appliances, furniture) and shipbuilding.

The system is also characterised by a diffused tissue of about 100.000 small and medium-sized firms and a wide network of craft firms, some of which are concentrated in integrated export-oriented areas specialised in the production of consumer goods.

The composition of the industrial workforce is mainly based on the mechanical industry and wood furniture. Furthermore, additional relevant sectors are transport and agro-food.

Most SMEs are clustered in six particular industrial districts: Pordenone (mechanics and components), Maniago (cutlery production), San Daniele (ham production), Manzano (chair production) and Alto Livenza (furniture production) and Trieste (coffee), with high level of export. Each of the mentioned districts is an active promoter of innovation, and small high-tech enterprises are growing in the region as providers of services for the more traditional sectors.

34

RTD and innovation Benchmarks

In addition, two strong research-driven clusters 11 are operating in the following sectors: biomedicine and shipbuilding.

Research, Training and Innovation

Friuli Venezia Giulia hosts a highly advanced scientific system, based on competences and know-how in fields ranging from physics to materials science, pharmacology, chemistry, nanotechnology, bioinformatics. As a consequence, there are 8.9 researchers for every 1.000 inhabitants, compared with 2.9/1.000 nationally, 5.7/1.000 in the European Union, and 8.9/1.000 in the United States. These figures reflect a deep-rooted vocation throughout the entire region for study, research and innovation.

Friuli Venezia Giulia ranks fifth among the Italian regions endowed with greater innovative ability 12 . This situation is favoured by the availability of highly qualified human resources, motivated by a deep working culture, enriched by cutting-edge technological clusters and innovation structures. The region has always focused on supporting research and industry development and features an enviable quality of life and a low unemployment rate. This factor makes the territory particularly attractive.

Two Universities, in Trieste and Udine with branches in the two adjacent provinces of Gorizia and Pordenone, and the International School for Advanced Studies – ISAS, carry out high level research activities in many sectors and offer the PhD title through particularly demanding intensive courses.

Many networked innovation structures are available in the region and among these stands out AREA Science Park for its more than 20 years experience in the field.

AREA Science Park is recognized as the main and more experienced multi-sector science and technology park in Italy and as a valid example of fully operative cluster for regional innovation. AREA extends on 55 hectares surface and has more than 80.000 sqm of equipped laboratories, offices and service structures established in two campuses on the hills overhanging Trieste, in the Friuli Venezia Giulia Region that is part of the well known Italian North-East area.

Presently, AREA Science Park consists of 84 national and international R&D organisations, that include public research institutions, private R&D and innovation centres, knowledge-based companies. The personnel is over 2100 units.

AREA Science Park is a knowledge district with multi-disciplinary features; the basic technology and business sectors are:

11 Research-driven cluster are concentrations of research organisations (public research centres, universities, not-for-profit bodies), enterprises (large firms, SMEs), regional or local authorities (local government, regional development agencies) and where appropriate local entities such as chambers of commerce, savings banks and banks, operating in a particular scientific and technological domain or economic sector.

12 Source: Regional Innovation Scoreboard 2006

35

RTD and innovation Benchmarks

life sciences

physics, materials and nanotechnologies

electronics, informatics and communication

environment and energy

AREA Science Park is managed by a national research institution, the Consorzio per l’AREA di Ricerca Scientifica e Tecnologica di Trieste (briefly AREA), that operates under the vigilance of the Italian Ministry of University and Research. The AREA’s board of directors includes representatives of the regional and local administrations, of the three regional Universities and of several scientific and economical institutions, as well as of the local associations of labour and industry.

Networked co-operation is the strategic factor to develop advanced research at international level and to exploit research results at a large extent; as a consequence, AREA builds up cluster-based initiatives involving innovation stakeholders and economic operators, such as industrial companies, science and research institutions, education and training organizations, technology transfer and business support structures, financial institutions.

One of the leading cluster initiatives is the TDMB - the regional Technology District of Molecular Biomedicine – established in AREA at the end of 2003. The TDMB is an innovative knowledge district officially endorsed by the Italian Ministry of University and Research and focused on life sciences, where development programmes driven by research and industry stakeholders are strongly supported both by public and private funds and advanced value-added services and excellent research infrastructures as well. The TDMB results from the converging and common objectives of industry, research and finance.

The TDMB is managed by the CBM–Consortium for the Centre of Biomolecular Medicine, a public company controlled by AREA as the main shareholder. The main goals of the TDMB are to create a strong network of international competences, to offer advanced research facilities to researchers and investors and to promote the creation of hi-tech start-ups in the field of bio and nanotechnology, focusing on a number of therapeutical areas which are all extremely relevant at world level:

oncology, vascular cardiology, neurosciences, hepatology and regenerative medicine.

The two benchmarks identified in the region and presented in the following are both dealing with the enhancement of technology transfer activities. While the first illustrated benchmark, SISTER, is addressed primarily to the world of research (technology offer), the second benchmark, Innovation Network TM , sustains the improvement on the industrial side (technology demand) and thus is mainly addressed to the enterprises located in the region, especially to the SMEs.

36

RTD and innovation Benchmarks

3.2.1 SISTER

The project SISTER stands for the creation of a permanent system developed by AREA Science Park and addressed to ease the introduction of new technologies on the market. In this regard, SISTER aims at increasing the economic value of research results by activating projects devoted to develop their economic potential in order to turn them into marketable intellectual property rights and/or products. Researchers from PROs (universities and research institutions located in the region) are supported in setting up first contacts with the world of industry, resulting finally in the fostering of technology transfer activities through stronger relations between academia and business.

SISTER was implemented within the period 2001 and 2005 and was funded to 100% by the regional government, the Autonomous Region of Friuli Venezia Giulia, covering completely all the costs arisen through personnel and consulting activities.

The project has designed a new valorisation process for bringing those research results to the market that are representing high potential for being applied by industry. In this regard, SISTER staff has supported researchers by offering them a huge service spectrum concerning technology transfer services.

Outcomes of SISTER are the valorisation of innovative technologies transferable to enterprises, the filing of patents, the launching of new collaboration activities as well as the starting up of entrepreneurial initiatives (spin-offs) resulted from research.

3.2.1.1 Methodology

The impulse for starting the SISTER project in Friuli Venezia Giulia gave a regional opportunity analysis carried out by AREA Science Park which resulted in the need of implementing a technology and know-how transfer system due to the existing imbalance between technology offer and technology demand in the region.

The methodology followed for setting up such a system and making it functioning successfully is illustrated in figure 3.1. Basically, SISTER can be structured in four main phases:

Establishment Liaison Office;

Scouting and first documentation analysis;

Validating of result performances;

Planning of technology exploitation track.

In the following, these four phases are explained in detail.

Phase 1. Establishment Liaison Office

The implementation process starts with setting up the ‘SISTER Liaison Office’ at the premises of AREA Science Park. The setting-up of the Liaison Office was performed by co-ordinating the activities of already existing technology transfer offices (three amongst the regional PROs) and by providing services to PROs where

37

RTD and innovation Benchmarks

no technology transfer functions were implemented. Generally speaking, the function of a liaison office is to promote technology transfer and hence to facilitate and favour the meeting between researchers and enterprises interested in adopting new technologies to their industrial processes. In the specific case of SISTER, the liaison activities sought to make available to PROs and to researchers opportunities for exploiting their results on the market and finalising their contacts with enterprises.

Next to the coordinating person, three full-time employees are working at the SISTER Liaison Office, engaged with offering a wide range of services to researchers as described in the three subsequent phases. In order to foster relations between academia and industry and turn research results into valuable intellectual property rights and/or products, the Liaison Office maintains a continuous monitoring of technologies and know-how generated in the research centres of the region.

Phase 2. Scouting and first documentation analysis

The actual service offer starts with the second phase where a thorough scouting activity is conducted by the Liaison Office that contacts researchers and visits the regional PROs in the aim to investigate on innovative achievements and raise awareness on the services offered by SISTER. The scouting is an activity that has been accomplished on a continuous basis throughout the project life of SISTER, in the aim to support the interaction with researchers and to identify potential applications.

The more closer contact with the researcher starts when a proposal on a new technology is introduced to SISTER Liaison Office. In a following step, a meeting between the researcher and the personnel of the Liaison Office takes place in which the researcher details his research results and gets the possibility to discuss his idea on exploiting his result on the market.

Subsequently to the meeting, the Liaison Office performs a detailed analysis on how to exploit the innovative technology, defining a validation process based upon a desk analysis in which the commercial context for the marketing of the result is defined. The analysis is carried out by means of information gathered with documents available from relevant sources related both to technological and economic subjects. A dedicated analysis is performed on existing patents, in the aim to assess the technological context in which results must be located and their patentability. A further step on Intellectual Property issues is achieved by a patentability assessment performed by technical-legal experts that provide an evaluation on how to protect the IPR and identify the most suitable strategies for its protection.

When the results of the previous analysis are positive, the exploitation potential of the research result is evaluated by spotting potential target markets and identifying the development phases necessary to conform the result to the requirements of protectability and marketing. In this regard, a cost/benefit analysis estimates in how far the benefits of introducing the result on the market exceed the actual costs arising

38

RTD and innovation Benchmarks

from a market launch. The phase ends with an evaluation on the opportunities to further invest in result valorisation.

Phase 3. Validation of result performances

When all the above verifications have been successfully run, a project dossier is set up by the Liaison Office. This dossier consists of a draft programme in which all valorisation activities needed to introduce successfully the results into the specific market are identified, together with an estimation of time, costs and resources necessary for the implementation.

The project dossier is submitted to the PROs whom the researchers belongs to, for its approval: the PROs are asked to decide if there is an interest to continue the valorisation process and to introduce the technology to the market.

Would PROs agree on the programme, the Liaison Office performs a detailed examination, based upon the results collected in the project dossier, of the spotted market aiming to find the most efficient exploitation track for the research result.

So far the exploitation track has been decided, the Liaison Office launches the planned validation activities. A first set of activities is aimed to protect the results IPR: to this end the Liaison Office supports the required patent filings accordingly to the results of the patentability assessment and to the defined protection strategies. A second set of activities is aimed to assess how the result performances fit with the selected market requirements: to this end the Liaison Office supports the required testing asking, when possible, a third party to run the test. By this way an independent judgement to be used as market introduction for potential users is reached. The intermediate results of validation activities are compared with the different market requirements, and a risk map is compiled allowing the Liaison Office to evaluate which exploitation track shows higher potential.

Phase 4. Planning of technology exploitation track

As far as the validation results are available, the Liaison Office in strict co-operation with the PROs, defines how the technology could be successfully exploited.

In this regard, three basic alternatives of exploiting the technology are investigated:

its

- the

acquisition

of

the

technology

finding

by

companies,

thus

commercialisation;

- the setting up of a partnership in research and development; or

- the creation of a spin-off research company.

Each of these alternatives entails a coordinated series of operations and services that provide support to PROs. For all three opportunities, the Liaison Office offers support regarding financial and organisational questions as concerns for example issues related to the contract management. In specific, for the first alternative (commercialisation), potential users interested in obtaining the result are identified and contacted as well as provided with the technical documentation. The Liaison Office supports the preparation and the drafting of contracts and sustains the PROs

39

RTD and innovation Benchmarks

during negotiating agreements. As regards the second alternative (setting up of a R&D partnership), potential partners interested in collaboration projects are identified and presentations for demonstrating the technology are organised. Furthermore, also here support is given to the preparation and the drafting of contracts as well as regards negotiating agreements. Last but not least, the creation of a spin-off company as third exploitation alternative is supported through the permanent assistance throughout all the phases of the new business set-up.

3.2.1.2 Success Factors

The project SISTER shows two main features that are rendering this initiative successful. The first success factor is the proactive approach pursued by the Liaison Office that, besides the continuous monitoring of technology and know-how generated in the region Friuli Venezia Giulia, accomplishes an exhaustive valorisation activity. The Liaison Office, visits universities and research institutions located in the region in order to establish a continuous dialogue with the researchers and PROs’ offices. Besides raising awareness among researchers as regards SISTER and its activities, this approach enables the easier identification of research results and encourages researchers to present their innovative technologies and to engage themselves in the search of the most promising way of exploiting the technologies and turn them into marketable products.

The second success factor of SISTER can be seen in the three alternatives of technology exploitation that are taken into consideration by the Liaison Office in all cases when validating the exploitation opportunities. Not focusing right from the beginning on only one utilisation possibility widens the perception on existing opportunities and guarantees the detection of the alternative that is most appropriate for exploiting the research result most efficiently on the market.

3.2.1.3 Performance Indicators

One qualitative performance indicator that can be mentioned here is the increase of RTD projects in the region:

2002: 86;

2003: 160 (+ 86,05%);

2004: 195 (+ 21,88%).

It has to be noticed that this indicator can not be directly related to the SISTER project but none the less, SISTER can be considered as one main initiative implemented in the region FVG that supported the considerable percental increase of RTD projects in the region.

Further quantitative performance indicators directly related to SISTER are the following:

156 researchers have been contacted;

1.039 patentability analysis and business intelligence interventions;

40

RTD and innovation Benchmarks

337 research findings passed the second phase “Scouting and first documentation analysis”;

184 research findings proposed for valorisation;

340 valorisation activities supporting research findings;

32 Italian patent applications;

18 international patent applications;

34 new established cooperations;

6 research spin-offs.

41

42

RTD and innovation Benchmarks Figure 3.1 – SISTER process flow Technology and know-how Technology and
RTD and innovation Benchmarks
Figure 3.1 – SISTER process flow
Technology and know-how
Technology and know-how
transfer system?
transfer system?
Regional
Regional
Imbalance
Imbalance
Input/Output
Input/Output
Activity
Activity
Process Decision point
Process Decision point
Opportunity
Opportunity
TT offer
TT offer
Analysis
Analysis
&
&
by AREA
by AREA
TT demand
TT demand
Establishment Liaison Office
Establishment Liaison Office
Establishment
Establishment
SISTER Liaison
SISTER Liaison
Continuous technology
Continuous technology
Office at AREA
Office at AREA
and
and
(Coordinator +
(Coordinator +
know-how monitoring
know-how monitoring
3
3
persons)
persons)
Scouting and first documentation analysis
Scouting and first documentation analysis
Evaluation of
Evaluation of
exploitation potential
exploitation potential
First Verification: Patentability &
First Verification: Patentability &
Desk analysis
Desk analysis
Promising
Promising
Spotting
Spotting
Researcher
Researcher
Meeting
Meeting
Patentability
Patentability
technology?
technology?
target
target
Scouting
Scouting
introduces
introduces
Researcher/
Researcher/
analysis
analysis
Yes
Yes
markets
markets
(visits, phone,
(visits, phone,
technology proposal
technology proposal
Liaison
Liaison
Desk
Desk
e-mail)
e-mail)
to Liaison Office
to Liaison Office
Office
Office
analysis
analysis
No
No
Cost/benefit
Cost/benefit
Market
Market
analysis
analysis
potential
potential
analysis
analysis
Planning of technology
Planning of technology
Validation of result performances
Validation of result performances
exploitation track
exploitation track
Exploitation
Exploitation
possible?
possible?
No
No
Creation of a
Creation of a
spin-off company
spin-off company
Patent
Patent
Yes
Yes
filing
filing
PROs interested
PROs interested
support
support
in continuing?
in continuing?
Technology
Technology
Financial and
Financial and
Partnership in R&D
Partnership in R&D
Project
Project
Set up
Set up
Market
Market
to be
to be
organisational
organisational
presentation
presentation
project
project
examination
examination
validated for
validated for
Yes
Yes
support
support
to PROs
to PROs
dossier
dossier
the market
the market
No
No
Validation of
Validation of
Commercialisation
Commercialisation
exploitation
exploitation
(Transfer into
(Transfer into
opportunities
opportunities
the market)
the market)

RTD and innovation Benchmarks

3.2.2 Innovation Network TM

Innovation Network TM is an AREA Science Park initiative which was initially foreseen to be operative throughout the period 2003 until 2005; due to its great success though the initiative has been carried on ever since. As the project SISTER, also Innovation Network TM is supported by the Friuli Venezia Giulia Region. At the start, the project was activated with AREA funds but soon after it has been financed by the Friuli Venezia Giulia Regional Authority with 750.000 Euros per year, according to Art. 13 of the Regional Law No. 11/2003.

The project gave life to a stable structure of services to businesses, dedicated to transferring to them the expertise and technology found in the world of research and to stimulating the setting up of innovative projects. In specific, the initiative established a Network of specialised Competence Centres for the different production sectors of the region. Through these centres, projects dealing with technology transfer are conducted, aimed at boosting the spreading of new technologies at regional level and at offering to the enterprises innovation services of added value.

Innovation Network TM target group are primarily small and medium-sized enterprises since they form the greater part of the industrial picture in the target Region. The project aims at disseminating knowledge of technological innovations towards these key actors, consequently supporting the regional development.

3.2.2.1 Methodology

The initiative resulted from an opportunity analysis regarding the socio-economic development of the region. The analysis revealed core production sectors of the region with a high innovation potential. These sectors, most important for the industrial development of the region, are wood & furniture, agro-industry, business management, environment, molecular biomedicine, the nautical sector, plastics & new materials, energy and metallurgy.

The implementation procedure of Innovation Network TM followed a schematic approach as demonstrated in figure 3.2 and described in the following. There are four main phases:

Network set-up;

Needs verification and evaluation;

Project development and implementation support;

Follow-up.

The phases 2 and 3 are not necessarily consecutive steps and thus, as a matter of fact they can be accomplished at the same time. Indeed, a first verification and evaluation of the companies’ needs has to be done before implementing a concrete project but at the same time, the actual project development can require further verifications which emerge only during the implementation phase. While phase 2

43

RTD and innovation Benchmarks

describes the whole range of services provided to the enterprises, phase 3 depicts the concrete interaction between competence centre and client once a specific project idea has been come up.

Phase 1. Network set-up

The first phase deals with building up the Network structure and thus with the setting up of the Competence Centres in the region. Once the decision has been made on establishing a competence centre for a specific production sector, aimed at supporting significantly the sector’s development in the region, an institutional partner with a strong link to the sector and decision power is searched for. Typically, the competence centres are located in the middle of industrial clusters and are therefore mostly represented by industrial associations and chambers of commerce as well as technology centres that are working on tests concerning advanced technologies for product-, process and management innovation.

AREA gets in contact with the previously identified institution of a specific production sector, presenting the initiative and enquiring on the interest and availability to participate. If the individualised institution is interested to become part of the competence centre, the personnel responsible for accomplishing the work of the centre is chosen. The staff, which belongs to AREA, is normally composed of one or two people working as technicians and specialists in the relevant production area. These experts undergo a specific training as regards the activities and services to be carried out and offered by a competence centre as will be described in the following phases. The training has a duration of about 12 months; afterwards the experts are ready to work as a ‘technology broker’ in the competence centre.

Phase 1 finalises with an agreement between AREA and the regional partners for setting up the competence centre, formalising the commitment made and specifying the activities to be conducted.

All competence centres as a whole build the Innovation Network TM which is coordinated by AREA Science Park. The centres have all access to the same databases concerning research findings and activities conducted in the region and beyond. Furthermore, AREA signed contracts with the MIT (Massachusetts Institute of Technology) in Boston, Massachusetts, and with the Stanford Research Centre in California in order to access their research databases.

Phase 2. Needs verification and evaluation

The task of a competence centre is essentially to support entrepreneurs in the region with its in-house competencies, helping them develop product-, process- and management innovations. Especially at the very beginning of the competence centre’s establishment, the personnel of the centre takes the initiative by contacting the sector related companies in the region and informing on the services offered by Innovation Network TM . Once the information on the activities has been diffused widely in the region, the clients themselves are getting in contact with the personnel. After the first contact launch, the technology broker of the competence centre visits

44

RTD and innovation Benchmarks

the client at his premises for collecting further information as regards the client’s service request.

Following the visit and based on the information gathered, the technology broker verifies and evaluates the collected information. This first evaluation and verification process deals with a first assessment and the studying of the companies’ innovation needs. Related to the specific request made by the client, the competence centre offers a wide range of services, all aimed at providing the enterprise with a reliable and independent support all the way up to the implementation of the innovation. The services offered are:

- Technology Auditing:

Technology audits in this context are understood as ‘short term actions’ to assess areas of expertise, technology and equipment by means of questionnaires or direct interviews with staff members. The final aim is to evaluate the need for innovation within the enterprise and the existing surrounding opportunities and then to identify the most likely mechanisms or routes for exploitation of each opportunity. Potential solutions are identified and tried to be maximised by building on areas of strengths previously detected within the company. Furthermore, technology audits in this context shall increase awareness and motivate personnel in terms of being open to new ideas and starting innovative methods for fabricating new products, introducing new processes and seeking for new management practices.

- Information on patents, document retrieval and business intelligence:

Another important service offered by the competence centre is the provision of ample knowledge to the client as regards his industry sector and issues linked to innovation processes, such as patent issues and the state-of-the-art of considered technologies. Activities that are conducted here are the retrieval of documents of scientific, technical and industrial interest and the subsequent analysis of the resultant information synthesised. Personalised reports on technological scenarios are elaborated, thus providing the enterprise with a broad picture of new possibilities and helping direct its RTD activities into promising fields. Moreover, a monitoring service regarding competitors and their technological innovations is provided, consequently giving on the one hand the chance to be informed and keep step with changing environmental conditions and on the other hand to facilitate the opportunity of concrete collaborations among businesses.

- Planning of innovative solutions for implementing innovation projects:

The interventions made for assisting in realising an innovation project normally take more time since the study to be undertaken is rather complex. Together with the enterprise, innovative solutions are planned and further developed; last but not least a prior conducted technology audit will have shed light on the current situation of the enterprise. The assistance furthermore includes technical and economic feasibility studies in order to assess the impact of innovation on the company structure. It will be evaluated in how far a company has the

45

RTD and innovation Benchmarks

competencies to carry out a specific innovation project dealing with innovation in the product-, process- or management sector.

- Support in developing research projects:

This service intends to support the enterprise in developing and refining projects in collaboration with research institutes so to achieve original and innovative solutions and encourage local technology transfer.

- Validation of business ideas:

This service is addressed to potential entrepreneurs who want to evaluate their innovation ideas and business suggestions in terms of their operability and practicability. Technical, normative, organisational and business parameters are identified and checked in how far they will influence the success of new business initiatives both in a positive and negative way. The single processes to be followed in order to realise a new business idea are analysed and then stepwise refined according to the given parameters so as to make the business idea become a successful one.

- Sector and multi-company studies:

Besides the validation of specific project ideas regarding innovative technologies, the competence centre addresses its services also to sector specific analyses by examining a specific area and its progress towards new technologies. This method supports a broader view of the state-of-the-art of technologies belonging to different sectors and leads enterprises in the right direction in terms of new ideas for innovations. Moreover, the conducted studies can also cover more than one company, hence multi-company studies that investigate the technological trends of widespread industrial relevance in favour of several companies from the same sector. Multi-company studies in general identify complex issues and can solve common problems by promoting a system change.

The previously described types of interventions are the ones that are applied most frequently. In the course of time and depending on the enterprises specific needs, new types of interventions stimulating the innovation activity may be implemented.

The result of this second phase is the thorough evaluation of the innovation necessities of the enterprise under study, meant to link the company’s demand with those competencies that are able to provide suitable innovative solutions.

Phase 3. Project development and implementation support

In case the first evaluation results to be positive and the client’s idea to be a valuable one, the further development of the project starts. At first, the technology broker presents a first project scheme to the client, containing the results of the analysis made. After that, technical aspects concerning the specific case are deepened with the scientific experts identified during the previous phase. Outcome of this deeper and more detailed analysis is the set-up of a work plan proposal presented to the client and including issues such as costs and time spent for the idea implementation

46

RTD and innovation Benchmarks

as well as main objectives to be achieved within the enterprise. Afterwards the work plan is verified with the client, analysing the economic availability on the client’s side in order to implement the innovation idea successfully.

If the client agrees with the work plan and there exists the economic availability, the implementation of the project idea starts. In this phase, the competence centre offers an extensive implementation support to the client. Throughout the entire process the client is supported in relating with the expert who takes care of the idea implementation. In this regard, problems that may occur are solved and contingency plans set up in order to guarantee still a successful project realisation. Furthermore, at the implementation’s finalisation the client’s satisfaction is verified and it is discussed in how far the aspired objectives are achieved.

The third phase ends with the successful implementation of the innovation project.

Phase 4. Follow-up

The last phase is dedicated to the consolidation of the relationship between the client and the competence centre. The service offered to the client should not remain a ‘one-shot’ activity but should instead imply the beginning of a long lasting relationship in order to carry out further technology transfer activities supporting the enterprise’s innovation improvement and therewith also the added value brought to the region.

In this context, each competence centre organises technical workshops addressed to the enterprises of the sector. The workshops are aimed at keeping the enterprises up- dated on the latest achievements made, dealing with topics, such as innovative techniques, materials and processes existing in the sector.

Furthermore, the relationship consolidation process is maintained through periodical contacts with the client and the verification of new opportunities for product-, process- or management innovation as well as the client’s involvement in initiatives and areas of interest.

3.2.2.2 Success Factors

The process flow of Innovation Network TM reveals different key success factors. The first one is the creation of an innovation network itself, composed of competence centres for different production areas. Each competence centre incorporates an institutional partner central for the specific production sector, as for example an industrial association or a chamber of commerce, thus the direct contact to the sector’s companies is guaranteed. Furthermore, scientific collaborations are set up with technology centres dealing with innovation activities concerning the various production sectors. Consequently, the competence centres facilitate and activate efficiently technology transfer activities in the region. Moreover, the competence centres are collaborating among each other also if specialised per sector. This means that they are dealing as well with transversal themes as for example the activation of collaborations and synergies, the sharing of experiences and the circulation of new ideas and technology diffusion amongst production sectors. Adopting this approach

47

RTD and innovation Benchmarks

means a faster and more tailored response to the innovation requests of enterprises located in the region. In the long run, a territorial system of competitiveness and attractiveness is built up, thus expanding the regional business system and supporting the start-up of new entrepreneurship.

Furthermore, the straight contact with the client achieved through visits and the extensive support provided throughout the entire development- and implementation process constitute a further key success factor of the initiative. The client is not only supported in structuring his project idea in a practical scheme but is also assisted in the further step of realising his idea most efficiently and tailored to his needs. The verification if the client has been satisfied with the work accomplished as well as the maintenance of a continuous relation between client and competence centre including the offering of technical workshops close the circle of service offer and set the basis for new collaborations.

3.2.2.3 Performance Indicators

Performance

indicators that

demonstrate

the

success of the

initiative

are

the

following:

48

7 Competence Centres have been established;

1217 enterprises have been contacted;

604 enterprises have been visited (50% of contacted enterprises);

333

enterprises).

innovation

initiatives

have

been

implemented

(55%

of

visited

RTD and innovation Benchmarks

Figure 3.2 – Innovation Network TM process flow

49

Network set-up Network set-up Network set-up Innovation Network Innovation Network Innovation Network TM TM TM
Network set-up
Network set-up
Network set-up
Innovation Network
Innovation Network
Innovation Network TM
TM
TM
Competence Centres’ (CC) set up
Competence Centres’ (CC) set up
Competence Centres’ (CC) set up
Regional
Regional
Regional
Regional core
Regional core
Regional core
Interested to
Interested to
Interested to
Interested
Interested
Interested
to
to
to
Opportunity
Opportunity
Opportunity
sectors with
sectors with
sectors with
AREA searches
AREA searches
AREA searches
AREA gets
AREA gets
AREA gets
participate?
participate?
participate?
become a CC?
become a CC?
become a CC?
AREA
AREA
AREA
Training
Training
Training
Agreement
Agreement
Agreement
Analysis
Analysis
Analysis
innovative
innovative
innovative
institutional
institutional
institutional
in contact
in contact
in contact
staff selection
staff selection
staff selection
(technology
(technology
(technology
AREA/regional
AREA/regional
AREA/regional
by AREA
by AREA
by AREA
potential
potential
potential
partner of
partner of
partner of
with potential
with potential
with potential
Yes
Yes
Yes
(1-2 technical
(1-2 technical
(1-2 technical
broker)
broker)
broker)
partners
partners
partners
production sector
production sector
production sector
partner
partner
partner
No
No
No
experts)
experts)
experts)
Coordination by AREA
Coordination by AREA
Coordination by AREA
Needs verification and evaluation
Needs verification and evaluation
Needs verification and evaluation
Evaluation and verification process
Evaluation and verification process
Evaluation and verification process
CC
CC
CC
contacts
contacts
contacts
Technology
Technology
Technology
Valuable idea?
Valuable idea?
Valuable idea?
sector related
sector related
sector related
broker visits
broker visits
broker visits
Evaluation of
Evaluation of
Evaluation of
Feasibility
Feasibility
Feasibility
Individuation of
Individuation of
Individuation of
companies
companies
companies
client and collects
client and collects
client and collects
Information
Information
Information
innovation
innovation
innovation
verification /
verification /
verification /
technical/scientific
technical/scientific
technical/scientific
No
No
No
(awareness raising)
(awareness raising)
(awareness raising)
information
information
information
validation
validation
validation
necessities
necessities
necessities
Service offer
Service offer
Service offer
competences
competences
competences
Yes
Yes
Yes
Project implementation support
Project implementation support
Project implementation support
Project development and implementation support
Project development and implementation support
Project development and implementation support
Support in
Support in
Support in
Support client in
Support client in
Support client in
problem solving
problem solving
problem solving
relations with
relations with
relations with
&
&
&
Client agrees with
Client agrees with
Client agrees with
expert
expert
expert
Contingency plan
Contingency plan
Contingency plan
work plan and
work plan and
work plan and
existing economic
existing economic
existing economic
availability?
availability?
availability?
Work plan
Work plan
Work plan
Deepening of
Deepening of
Deepening of
Verification of
Verification of
Verification of
Presentation of first
Presentation of first
Presentation of first
Verification of
Verification of
Verification of
Handing over of
Handing over of
Handing over of
Yes
Yes
Yes
proposal to client
proposal to client
proposal to client
technical aspects
technical aspects
technical aspects
economic
economic
economic
project scheme
project scheme
project scheme
client
client
client
(objectives, time,
(objectives, time,
(objectives, time,
with selected
with selected
with selected
results to client
results to client
results to client
availability
availability
availability
to the client
to the client
to the client
satisfaction
satisfaction
satisfaction
costs)
costs)
costs)
experts
experts
experts
No
No
No
Discussion and verification
Discussion and verification
Discussion and verification
of objectives’ achievement
of objectives’ achievement
of objectives’ achievement
Input/Output
Input/Output
Input/Output
Follow-up
Follow-up
Follow-up
Activity
Activity
Activity
Relationship consolidation
Relationship consolidation
Relationship consolidation
Innovation
Innovation
Innovation
Long lasting
Long lasting
Long lasting
project
project
project
Periodical
Periodical
Periodical
Verification
Verification
Verification
Client’s involvement
Client’s involvement
Client’s involvement
Technical
Technical
Technical
relationship
relationship
relationship
implemented
implemented
implemented
contact
contact
contact
of new
of new
of new
in initiatives and
in initiatives and
in initiatives and
Process
Process
Process
workshops
workshops
workshops
“Client/CC”
“Client/CC”
“Client/CC”
successfully
successfully
successfully
with client
with client
with client
opportunities
opportunities
opportunities
areas of interest
areas of interest
areas of interest
Decision point
Decision point
Decision point

RTD and innovation Benchmarks

3.3 South Transdanubia

The South Transdanubian Region is located in the Southern part of Hungary. In the

North, the region is bordered by Lake Balaton, in the East the river Danube serves as

a natural border, while in the South the region has a common border with Croatia.

South Transdanubia is composed of the counties Baranya, Somogy and Tolna, inhabited by nearly 1 million people (9,8% of the total population of Hungary) and spread over an area of 14.169 km 2 (15,2% of the total territory of Hungary). The region’s strong rural character comes across through its lack of medium sized towns and the consequent fragmented settlement structure.

The regional economy is dominated by the agricultural sector and agro-food industries where meat and milk processing and the production of beer, wine and sugar play a key role. Although some large industrial companies are situated in the Region, industry is still not as competitive as it is in the western or central regions of Hungary. As regards the tertiary sector, tourism is of vital importance to South Transdanubia, in particular the areas surrounding the Lake Balaton. During the last years, the availability of business support services has been increasing throughout the Region. In 2003, the unemployment rate was 7,9%.

The South Transdanubian Region hosts some of the most renowned Hungarian agricultural higher education institutions. For this reason, the region offers a large number of highly qualified human resources in this field. The regional volume of R&D activities in the agricultural sector is the highest in the entire country.

The region elaborated, as all the other Hungarian regions, a Regional Innovation Strategy (RIS) for the period 2004 – 2010, an innovative programming method with

a tried-and-tested approach to the promotion of innovation. The five main objectives of this strategy are:

1. to initiate regional dialogue;

2. to support the direct involvement of all relevant organisations in shaping innovation policy;

3. to analyse regional innovation needs and capacities;

4. to select priorities for innovation support;

5. to develop action plans and pilot projects.

In conjunction with the elaboration of the Regional Innovation Strategy of South Transdanubia, the Regional Innovation Agency STRIA (South Transdanubian Regional Innovation Agency) was set up as a division of the South Transdanubian Regional Development Agency (STRDA). The Regional Innovation Strategy was formulated by STRDA and approved jointly with the Regional Innovation Council as well as further actors involved in regional innovation activities. STRDA, as all the other Regional Innovation Agencies in the country, aims at supporting the

50

RTD and innovation Benchmarks

implementation of its innovation strategy within the region and at developing and co-ordinating the regional innovation policy.

Furthermore, STRDA is the coordinator of a three-year lasting project (2005 to 2007), supported by the government and which aims at establishing and coordinating a Regional Innovation Agency Network (RIA Network). The network will operate as a complex, easy-to-reach system of services, guaranteeing the support to the innovative development of SMEs, the increase of the technology transfer capacity of universities and the development of innovation services based on the Regional Innovation Strategy. The network is made up of prominent innovation actors of the region: in addition to the coordinator STRDA, the two universities providing the knowledge base and so-called technology transfer organisations are the members. Besides the network, STRDA will also set up a regional innovation information system and database linked to national and international innovation databases and networks.

Regarding international cooperation in the field of innovation, the South Transdanubia has established close collaborations with the regions Friuli Venezia Giulia (Italy), Shannon (Ireland) and Yorkshire & Humber (United Kingdom). In particular with the two latter regions South Transdanubia has worked together under the framework of its Regional Innovation Strategy (RIS).

51

RTD and innovation Benchmarks

3.3.1 “Baross Gabor” Programme – Support of the innovation developments of small and medium-sized enterprises in South Transdanubia

The “Baross Gabor” Programme is an ongoing scheme set up in 2005 and implemented in all seven Hungarian regions which are characterised by underdeveloped regional innovation systems. The set up of the programme is due to the results achieved from the RIS projects conducted in all seven regions. The RIS project in the Region South Transdanubia was accomplished within the period 2002 and 2004 and its main goal was the elaboration of a flexible framework programme that allows the increase of the competitiveness of South Transdanubian enterprises through the optimisation of infrastructures and regional innovation policies.

The overall aim of the subsequently developed “Baross Gabor” Programme is to improve the local innovation potential of the region. Although the programme has been developed at national level, for each region a Call for Proposals has been set up by the local Regional Innovation Agencies – in the case of the region South Transdanubia by STRDA - and in accordance with the Regional Innovation Council (RIGB). The content of each Call is tailored to the specific needs, priorities and objectives of each region and is elaborated in line with the specific Regional Innovation Strategy.

Generally, the following main themes are targeted by the Baross Gabor programme:

Support for the transfer of technology and knowledge;

Support for product- and service innovation;

Creation of regional innovation clusters;

Support for SMEs and spin-off companies;

Development of R&D and innovation infrastructure.

The “Baross Gabor” Programme developed in South Transdanubia was managed by the Regional Innovation Agency STRDA and was addressed to the small and medium-sized enterprises (SMEs) located in the region, consequently the specific Call for Proposals “Baross Gabor Programme – Support of the innovation developments of small and medium-sized enterprises in South Transdanubia” was set up. The Regional Innovation Agency Network, started to be set up in 2005 by STRDA, represents a main supporting tool in carrying out this programme as regards the generation of projects in cooperation with SMEs. By supporting the development of innovation activities within SMEs, the region expected an increase in the competitiveness of the local businesses.

The funding of the programme has been accomplished via competitive grants. Partly, the programme was supported by the National Research and Technology Innovation Fund that aims at providing a stable and reliable financing for innovation and supporting knowledge intensive companies in the entire country. Each year, the Innovation Fund disposes at least 25% of its financial resources for regional

52

RTD and innovation Benchmarks

innovation purposes. Furthermore, the “Baross Gabor” Programme envisaged also a mandatory contribution of the private sector.

The allocable resources available for the Call launched in 2005 have been approximately 2 million Euros, corresponding to the decentralised part of the Innovation Fund. Projects that were mostly supported dealt with mechanical-, metal, electronics industry and computer science (35%), food industry and agricultural innovation (31%) and health services (28%).

3.3.1.1 Methodology

The implementation procedure of the “Baross Gabor Programme - Support of the innovation developments of small and medium-sized enterprises in South Transdanubia” followed a schematic approach illustrated in figure 3.3 and described in the following. The process flow is an attempt to model the way the Regional Innovation Agency STRDA developed the specific Call for Proposals and managed the implementation of the programme in the region. It is a simplified description of a more complex process, but it is nonetheless useful to identify and bring to light the key activities that add value to the entire process of supporting SMEs and their innovation potential in the region, and finally making the programme successful.

The description of the “Baross Gabor Programme - Support of the innovation developments of small and medium-sized enterprises in South Transdanubia” is given below highlighting the three focal “moments” that add value to the process flow:

Call and Proposal Preparation;

Proposal Evaluation & Funding;

Implementation Support.

Phase 1. Call and Proposal Preparation

The RIS project conducted in the period from 2002 until 2004 resulted in the elaboration of a mid-term innovation-oriented strategy (for the period until 2010), accomplished by the Regional Innovation Council (RIGB) and STRDA, and principally addressed to the enterprise promotion in the region South Transdanubia. The Innovation Strategy revealed that there are six core sectors in the region whose development regarding innovative activities has to be supported by enhancing and promoting the competitiveness of the local SMEs who are the main industrial players of these sectors:

- Food industry and agriculture innovation;

- Environmental industry;

- Health services;

- Textile and Leatherwear industry;

- Mechanical-, Metal- and Electronics industry;

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RTD and innovation Benchmarks

- Computer science.

Furthermore, as mentioned previously, in the framework of the Innovation Strategy the Regional Innovation Agency STRIA was set up as a division of the South Transdanubian Regional Development Agency (STRDA).

The Regional Innovation Strategy gave the main impulse to set up a Call for Proposals under the framework of the “Baross Gabor” Programme. Based on the results of the Innovation Strategy, the Call set up in South Transdanubia was addressed to sustain the development of SMEs operating in specific industry sectors by strengthening their R&D activities, supporting the development of new technologies and tasks related to the establishment of innovation structures and model plants, building up public/private partnerships and developing network cooperation. Innovation is deemed to enhance the competitiveness of companies and by supporting innovation developments in the six listed sectors, the region expected a high contribution to the establishment of a harmonised and structured regional innovation system.

Once the Regional Development Council and the Regional Innovation Agency STRIA have been agreed on the decision of implementing a Call for Proposals in the region, the call preparation process starts. The work programme and the application form are prepared by STRIA. The application form, set up in Hungarian language, is similar in its structure to the Call for Proposals published within the Framework Programme of the European Commission. The application is built up in two main parts containing the following information:

- administrative information on the participants of the consortium and budget request;

- project information (scientific and technological objectives; potential impact; etc. ).

Furthermore, the funding margins are decided. The programme supported SMEs, and the intensity of the support was at maximum 50% of the whole budget of a project. For all identified six key sectors one Call for Proposals has been elaborated.

The RIA Network supported to a great extend the call preparation process through the consultation and the measuring of the demand of local SMEs. The development of the Call was a long process that took more than half a year.

After its finalisation, the Call for Proposals has been approved by the Regional Innovation Council who announced subsequently the publication of the Call online on its website (www.deldunantul.com) and on the website of the RIA Network (www.ddriu.hu). According to the Hungarian rules, STRDA had to communicate the Call through nationwide newspapers and through the regional press as well. The Call was open for one month.

In order to encourage a high number of proposal submissions by local enterprises, STRDA started an extensive proposal preparation support in the region, offering the following activities:

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RTD and innovation Benchmarks

- Dissemination of information through the agency’s website and flyers circulated by RIA;

- Sectoral workshops on project development (how to set up a proposal, how to find the right partners, how to write a winning proposal, etc.). In total, four workshops organised by the RIA Network partners were accomplished;

- Consultation services (proposal applicants’ direct requests to the agency and the RIA Network).

The call and proposal preparation phase ends with the proposal submission to STRDA by local SMEs.

Phase 2. Proposal Evaluation & Funding

After the proposals have been submitted to STRDA, a first formal professional evaluation is accomplished by STRDA who analyses if the formal requirements of each submitted proposal have been fulfilled, thus if all the requested information has been provided by the applicant, if the proposal has been filled-in in all its parts and if the proposal consequently is eligible for funding.

Once STRDA decided on the proposal’s eligibility, the proposal evaluation process starts. The eligible proposal is assessed according to the selection criteria set by an Expert Committee. The Expert Committee consists of representatives of governmental and regional bodies in charge of regional development and innovation.

Only Hungarian organisations are eligible for funding, and the main selection criteria are the following:

- the target audience are SMEs and micro enterprises, or their consortia;

- well-grounded and feasible innovative project proposal;

- specific professional value of the project;

- matching with the regional aims;

- innovativeness and sustainability;

- innovative project matter.

The Proposal Evaluation Process took one month. The Expert Committee may accept the proposal without modifications or reject the proposal. The assessment is subject to the approval of the Regional Innovation Council. On the basis of the assessment, the President of the National Office for Research and Technology decides about the final decision if the project proposal will be funded or not.

Phase 3. Implementation Support

Once the project has been retained for funding, the contract signing takes place. The contracts were signed by the KPI, the Agency for Research Fund Management and Research Exploitation. Major costs that are eligible for funding are:

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RTD and innovation Benchmarks

- Labour costs (including overheads);

- Equipment;

- Training (including study trips);

- External expertise (consultants, studies, etc.);

- Other: costs of immaterial assets, patent registration.

In order to implement the funded project in the most efficient and effective way, STRDA offers support to the innovation development. A specific feature of the programme is that it supports innovation developments and the subsequent implementation of the innovative developments in the region. This precondition asks for the strong cooperation of businesses and research institutes in order to achieve and commercialise R&D results.

The beneficiaries carrying out the project have to make reports every year which are handled by RIA. The work of RIA is supported by external experts throughout the entire implementation process of the project. RIA monitors the projects on a formal way and then the external experts make a decision if they accept the report of the beneficiaries or not. The final report includes also information on standard indicators, demonstrating from a scientific perspective the extend to which the project has been completed successfully. Such indicators are amongst others:

- Number of registered scientific and technical results;

- Number of new products on the market;

- Amount of further direct R&D and innovation expenditures in the project;

- Increase in gross value added to the companies;

- Number of workplaces created;

- Number of workplaces preserved;

- Number of new start-up and spin-off companies;

- Revenue generated by the utilisation of R&D results for business purposes.

Phase 3 concludes the process with the successful implemented innovation project in the region.

3.3.1.2 Success Factors

The “Baross Gabor Programme - Support of the innovation developments of small and medium-sized enterprises in South Transdanubia” reveals a number of activities contributing to the success of the programme in the region.

The first success factor can be seen in the long preparation phase of setting up the Call for Proposals of more than six months. Furthermore, the preparation was supported by the RIA Network which is made up of prominent innovation actors in the region. These two facts, the comprehensive Call preparation as well as the

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RTD and innovation Benchmarks

involvement of the most important innovation actors in the process, sustains the accurate preparation of a Call for Proposals that is in line with the regional requirements and that is tailored to satisfying the needs of local SMEs.

Furthermore, the proposal preparation support accomplished by STRDA represents a critical moment in the entire proposal preparation process. The active support of STRDA, provided through sectoral workshops and additional consultation services, motivates on the one hand enterprises to present a project proposal and on the other hand increases also the quality of the submitted proposals, thus resulting finally in a higher number of projects which comply to the requirements set in the Call and which are therefore eligible for funding.

Last but not least, the proposal evaluation through the Expert Committee instead of STRDA itself represents a further success factor. The suitability of the project to contribute to the regional innovation development can be assured since the Committee is set up of representatives of governmental and regional bodies in charge of regional development and innovation, including therefore actors concerned with the implementation of projects that are promoting the innovation development of local micro enterprises or SMEs efficiently.

3.3.1.3 Performance Indicators

Out of the 56 submitted applications in 2005, 32 projects have been supported (57%) with an average funding of ca. 60.000 Euros per project.

Some further indicators that are supporting the effectiveness of this programme are:

STRDA won a price for managing the Baross Gabor programme in the category “Supporting Enterprises” in the competition “European Entrepreneur Award”.

The programme was re-launched in September 2006. The total budget was ca. 1,48 million Euros. In total, 40 projects have been submitted with an overall support request of ca. 2,22 million Euros.

57

58

RTD and innovation Benchmarks Figure 3.3 – Baross Gabor Programme process flow Call and Proposal
RTD and innovation Benchmarks
Figure 3.3 – Baross Gabor Programme process flow
Call and Proposal Preparation
Call and Proposal Preparation
Regional
Regional
Core sectors
Core sectors
>
>
6 months
6 months
Innovation
Innovation
&
&
Implementing Call
Implementing Call
Approval by the Regional
Approval by the Regional
Call Preparation Process by STRIA
Call Preparation Process by STRIA
Strategy
Strategy
Beneficiaries
Beneficiaries
for Proposals?
for Proposals?
Innovation Council?
Innovation Council?
Regional Innovation Council (RIGB)
Regional Innovation Council (RIGB)
Work
Work
Application
Application
RIS project
RIS project
Funding
Funding
No
No
Yes
Yes
Programme
Programme
Form
Form
STRDA
STRDA
No
No
Yes
Yes
STRIA (Regional
STRIA (Regional
Innovation
Innovation
Agency)
Agency)
Call for proposals
Call for proposals
Regional Innovation Agency
Regional Innovation Agency
set up
set up
Network (RIA Network)
Network (RIA Network)
completed
completed
-
-
STRDA (Coordinator)
STRDA (Coordinator)
-
-
2 Universities
2 Universities
-
-
TT organisations
TT organisations
Proposal Evaluation & Funding
Proposal Evaluation & Funding
Communication
Communication
Announcement
Announcement
through STRDA
through STRDA
of the Call online
of the Call online
1
1
month
month
(newspapers, press)
(newspapers, press)
(RIGB, RIA Network)
(RIGB, RIA Network)
Proposal Evaluation Process
Proposal Evaluation Process
through Expert Committee
through Expert Committee
SME/
SME/
Technical
Technical
Feasibility
Feasibility
Micro
Micro
capacity
capacity
Formal eligibility
Formal eligibility
Proposal Preparation Support by STRDA
Proposal Preparation Support by STRDA
fulfilled?
fulfilled?
Formal
Formal
Proposal
Proposal
Consist
Consist
Innovative
Innovative
Sustaina
Sustaina
professional
professional
Sectoral
Sectoral
submission to
submission to
Information
Information
ency
ency
ness
ness
bility
bility
Yes
evaluation
evaluation
Consultation
Consultation
Yes
Workshops
Workshops
STRDA
STRDA
Dissemination
Dissemination
services
services
on project
on project
No
No
by STRDA
by STRDA
(website, flyers)
(website, flyers)
development
development
Proposal
Proposal
accepted by
accepted by
the Expert
the Expert
No
No
Committee?
Committee?
Yes
Yes
Input/Output
Input/Output
Implementation Support
Implementation Support
Proposal evaluation
Proposal evaluation
&
&
assessment
assessment
Activity
Activity
completed
completed
Innovation Development Support by STRDA
Innovation Development Support by STRDA
Contract
Contract
Innovation project
Innovation project
Proposal
Proposal
Signing &
Signing &
Formal Interim-
Formal Interim-
Process
Process
Proposal
Proposal
approved
approved
Implementation
Implementation
External
External
implemented
implemented
Funding
Funding
and ex-post
and ex-post
approved
approved
successfully
successfully
by RIGB?
by RIGB?
Yes
Yes
support
support
expertise
expertise
monitoring
monitoring
with KPI
with KPI
No
No
Decision point
Decision point

RTD and innovation Benchmarks

3.4

Styria

The Region Styria is the second largest in Austria, with an area of 16.387 km 2 (covering 20% of Austria) and inhabited by 1,2 million people. Styria encompasses 17 districts and 542 municipalities. The region has a number of population centres including Leoben, Kapfenberg, Bruck/Mur, Mürzzuschlag, Liezen and the Styrian capital Graz. The capital is the second largest city in Austria with a population of 230.000 inhabitants. In 2003, Graz was awarded the ‘European Capital of Culture’.

Styria is characterised by a long industrial tradition, based on its coal and mineral natural resources as well as forestry and water. Today, the region is characterised by three existing fields of strength which are:

Automotive Industry/mobility;

Wood/paper;

Materials.

Potential strengths that the region has identified for the future are:

Energy and environmental technology/Renewable energy;

Human technology;

Creative industries;

Food technology;

Nano/Micro technologies;

Simulation/Mathematical modelling;

Engineering/Plant construction;

TIME

(Telecommunication,

Information

technologies,

Electronic).

New

Media,

Economic Development Situation

The company size structure in the region in recent years has moved towards a higher number of smaller firms. Currently, there are 40.221 companies located in the region with 430.000 employees. 95% of these companies are small and medium-sized enterprises.

There is a good supply of education and training facilities in Styria. The region disposes of five universities, two technical colleges and 18 competence centres which aim to improve the competitiveness of enterprises through strategic co- operation between the science and industry sectors. The high R&D rate is giving evidence to this fact: in 2004, the rate, calculated on the basis of the gross regional product (GRP), was 3.55% and therewith above country average which was 2.21% in 2004.

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RTD and innovation Benchmarks

Within the universities, considerable recent growth and spin-off potential is evident in the area of synthetics and materials. A number of technology and new firm formation centres have been created as part of the regional renewal effort, offering a range of services from administrative support through to technology transfer and consultancy.

Regarding its relation with foreign markets, especially with South East Europe, Styria augmented its export volume in 2005 to 12.5 billion, representing an increase of 20.5% compared to the previous year 2004.

The main promoter of regional development in the Region Styria is the Styrian Business Promotion Agency (SFG, Steirische Wirtschaftsförderung). SFG is an independent service enterprise, majority-owned by the Province of Styria, that aims with its activities to improve the overall local conditions of the regional industries and make a contribution to the structural improvement and the economic growth of businesses that have their headquarters located in Styria as well as of disadvantaged regions.

SFG offers a variety of services to its customers who are primarily businesses currently in their foundation phase as well as existing businesses and business cooperations. However, the services are also offered to public bodies, natural persons and legal entities and further legal subjects whose activities are suitable for making a valuable contribution to the achievement of the region’s economic objectives.

Independently from the type of business and the industry branch, SFG offers to its clientele extensive advice on funding possibilities, the preparation of information, contacts and cooperation possibilities according to the type of business and industry branch. Furthermore, the Agency offers monetary support for the realisation of projects in the following fields:

Human resources;

Research & development;

Knowledge and technology transfer;

Networks;

Internationalisation;

Equity generation;

Business foundation;

Integral business development;

Business related services;

Innovative investments;

Infrastructure.

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RTD and innovation Benchmarks

Half of the funding of qualification measures for businesses with headquarters in the Structural Funds Objective 2 Area is co-financed with subsidies from the European Social Fund (ESF).

The region revealed two policies considered as benchmarks. The first illustrated benchmark is addressed to improving the expertise knowledge of employees in the region, while the second benchmark deals with supporting the entrepreneurial activities.

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RTD and innovation Benchmarks

3.4.1 Skills Development of Qualified Employees

In view of the challenges coming up for businesses caused by the accelerated globalisation process and its broader economic relationships, the increase of competition as well as the elevated legal and technical complexity, the requirements and expectations both to entrepreneurs and employees grow steadily to the same extent. This is especially the case for micro, small and medium-sized enterprises that have to adapt their know-how and qualification to the quickly changing economic conditions in order to meet the rising expectations of their clients.

In this regard, permanent training and a high level of qualification are very important ingredients to realise ambitious corporate visions and business objectives. Considering that technological innovation impulses take place in ever shorter distances and patterns of work organisation change as well as the kinds of jobs, a continuous advanced vocational training is necessary. Advanced training and the capacity to adapt ones own qualification to different contexts are becoming more than ever important and therefore have to be applied as preventive measures for job protection and sustainable competitiveness.

Taking the above said into consideration, the Styrian Business Promotion Agency SFG set up the action programme “Skills Development of Qualified Employees” for the time period 2000 until 2006. The programme supports an efficient and goal- oriented training which helps strengthen competitiveness of the local companies and the competences of their staff. In specific, the skills level of the qualified employees, key employees and executives employed in enterprises shall be further raised and broadened by providing financial assistance for high-quality continuing training schemes that are adapted to the needs of the individual enterprise. Special regard is given to the qualification needs of entrepreneurial newcomers and individuals who are taking over a business by supporting them already before initiating their actual entrepreneurial career as well as during the start-up phase.

3.4.1.1 Methodology

A regional need analysis conducted by SFG revealed that there exist problems as regards the satisfactory training of qualified employees working in the enterprises located in the region. This circumstance is caused by the kind of training offered, meaning that its nature is not always matched to the supply of suitable jobs in the regional labour market.

Based on these findings, SFG decided to implement the present programme in order to support training schemes that are better adapted to the specific needs of the qualified employees and the enterprises. The implementation and the execution of the programme follows a relatively simple scheme composed of three consecutive phases as described in the following (see figure 3.4):

Programme Preparation;

Programme implementation;

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RTD and innovation Benchmarks

Funding request & Project implementation.

Phase 1. Programme Preparation

The set up of the programme starts with the elaboration of the action programme and the application form designed by the SFG team.

The action programme includes various information such as details on the programme beneficiaries, the sectors eligible for funding, the geographical area covered as well as the maximum project volume financed.

Beneficiaries of the programme are natural persons or legal entities as well as partnerships according to private and commercial law and which possess the required trading licence or any other relevant permission. Furthermore, also persons who are still in the planning phase of building up their own businesses are eligible for funding. In conclusion, the beneficiaries of the programme may be:

Manufacturing enterprises in the field of industry and commerce;

Innovation oriented business-to-business or inter-regionally operating enterprises of the service industry;

Information and communication technology companies;

provided that

their headquarters or establishment for which financial assistance is applied for is situated in Styria and that the training participants are permanently employed at the company’s location in Styria, and that

they are categorised as micro, small or medium-sized enterprises (SMEs) according to the recommendation of the European Commission of May 6th, 2003 which regards the definition of micro- small and medium-sized businesses (Official Journal L 124 of May 20, 2003).

The training measures funded through the programme are addressed to qualified employees, key employees and executives as well as to the entrepreneurs themselves.

In particular, funded are projects with qualification measures especially in the areas Business Management, Engineering, Computer Applications and Foreign Languages that are contributing to the increase and the diffusion of a superior qualification level of the qualified employees, key employees and executives. Furthermore, the measures have to be directly linked to the current or future activity of the training participant within the business.

Not eligible for financial assistance within the framework of this programme are companies operating in the fields of tourism and leisure, temporary staff agencies and enterprises in which the public sector participates directly or indirectly with 25 % or more. Furthermore, SFG reserves the right to exclude also other sectors from the programme. In addition, companies are not eligible for support if they fulfil the prerequisites for a business reorganisation process according to the

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RTD and innovation Benchmarks

Unternehmensreorganisationsgesetz (Business Reorganisation Law), i.e. significant and progressive deterioration of the equity quota, insolvency, prerequisites for an opening of insolvency proceedings, or if an insolvency proceeding is pending.

What is more, the qualification projects eligible for funding must include innovative education concepts, originated from the qualification needs of the training participant and essentially different from the offer existing on the education market. The visit of standard courses, seminars and the simple deepening of already existing qualifications as well as training on new products or measures that are not going beyond the conventional internal education measures (such as introductive training for new employees, “breaking-in” courses for certain machinery) cannot be funded.

In contrast, innovative qualification projects are promoted that are going beyond the usual individual operational education activities of businesses. In this regard, the planned education activities can comprise general or specific qualification measures:

General education: A general education includes learning components that are not applicable exclusively or mainly at the present or future job of the employee. It is connected to the general functional manner of the businesses and procures qualifications that are largely transferable to other businesses or working areas.

Specific education: A specific education includes learning components that are applicable directly and mainly at the present or future job of the employee. It is connected to the specific activity of the business. The transferability of such educations to other businesses or working areas is extremely low.

Regarding the costs within the framework of this programme, eligible for funding are all external costs linked to the skills development of qualified employees, key employees and executives. One condition is that the qualification measures must include at least 30 units of 45 minutes each and project costs have to be at least EUR 800 respectively. Cost that are not considered eligible are:

internal personnel costs;

travel costs as well as skills development costs which incurred before submitting the grant application form;

costs for trainings that are not directly connected to the work activity of the trainee.

The eligible project costs per training participant amount to a maximum of EUR 30.000 for the whole duration of the programme.

As regards the geographical area, the aid intensity for enterprises located in the New Objective 2 and Phasing Out area amounts to:

70 % for general training, and

40 % for special training.

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RTD and innovation Benchmarks

For enterprises situated in the New Objective 2 area half of the grant is co- financed by the ESF.

Enterprises that are instead located in Greater Graz are granted an aid intensity of:

35 % for general training, and

20 % for special training.

The application form is divided in two main parts. While the first part includes general data