Role and impact of TEKES

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1 Role and impact of TEKES Presentation at the presentation of the final report on the evaluation of Tekes Helsinki, 6 June 2012 Geert van derveen (Technopolis Group)

2 Mission of Tekes Tekes promotes the development of industry and services by means of technology and innovations. This helps to renew industries, increase the added value and productivity, improve the quality of working life, as well as boost exports and generate employment and wellbeing. 2

3 Innovation is a complex process Innovation impulse Problem definition Exploitation Dissemination Idea Generation Adoption Iterative process learning loop Testing new concepts Project design R&D After Bruns et al

4 Rationaleforintervention in innovation domain Market failures: externalities and spillovers; imperfect and asymmetric information; network failures; market power System failures linked to structural, institutional and regulatory deficiencies: path dependencies; technological lock-in; investment timing; institutional constraints; coordination failure; complexity of knowledge bases; ineffectiveness of mechanisms facilitating knowledge flows. Government failures (counter rationale) inefficient allocation of resources Additionality: input, output/outcome, behavioural 4

5 The road from giving a grant or a loan to a commercial success innovation is long and often very indirect. At best, Tekes can create some of the conditions necessary for success 5

6 Innovation support should be seen from a systems perspective Demand Consumers (final demand) Producers (intermediate demand) Framework Conditions Financial environment; taxation and incentives; propensity to innovation and entrepreneurship; mobility Industrial System Education and Research System Political System Large companies Professional education, training Government Mature SMEs Intermediary Institutions Research institutes Brokers Higher education and research Governance New, technologybased firms Public sector research RTD policies Infrastructure Banking, venture capital IPR, information services Innovation support Standards and norms Source: Erik Arnold & Stefan Kuhlmann,

7 The NRIS perspective has important implications for how we understand performance The bounded rationality of actors has important consequences Knowledge, learning and institutions are key Path dependence Institutions and their environments are inter-dependent they coevolve, so institutions are always context dependent In many cases, the relevant unit of analysis is not the individual but networks, clusters and institutions Governance and other mechanisms that create systemic cohesion are important We cannot deal in static optima we have to understand how to deal with system dynamics 7

8 Evaluation questions Quality of operations and services provided by Tekes Effectiveness of activities of Tekes Efficiency of Tekes and its operations Role of Tekes in the Finnish innovation system and contribution to TEM strategy The challenges that Tekes faces (national and international developments) 8

9 Technopolis Evaluation Approach Survey Control group limited to unsuccessful Tekes applicants 2 questionnaires Response rate 21 % (successful) resp. 19% (unsuccessful) Organisational assessment Self-assessment Tekes Interviews with 27 Tekes representatives 37 Stakeholder interviews 4 focus groups: international, services innovation, demand and user driven innovation, start-ups and growth companies 9

10 Tekesspending and activites 10

11 Tekes customers (1) Majority of Tekes customers are companies (93%, 5044) These receive 60% of Tekes budget Reduction of funds going to large and very large companies: 2007 (46%), 2010 (24%) 11

12 Tekes individual support for larger companies transferred to research organisations and SMEs in the supply chain Only 169 clients (excl. universities) participate in more than 5 projects Clients from all sectors, largest sectors: Telecommunications and Electronics (20%), Mechanical Engineering (17%), Software and Digital Media (14%) and Energy and Environment (14%). 45% in Usimaa region, furthermore concentrations around Tampere, Oulu and Turku 12

13 Tekes according to customers Positive: Overall quality of processes (pre-application, application and post-application) quality of staff Improvements: signposting to other agencies the administrative burden associated with its application processes feedback on unsuccessful applications speed of appraisal and selection processes linking Tekes advice to its customers business practices Items for additional support: internationalisation and working in international markets marketing and sales entering markets (particularly in the case of start-ups) 13

14 Tekesresults and impacts Source: Hyvärinen 14

15 Tekes has contributed to increasing research intensity, increased cooperation between companies and knowledge infrastructure in for Finland important areas and in this way helped build knowledge and competences for international competitiveness of Finnish companies Tekes has made and continues to make a substantial and positive difference, driving up the rate of innovation and growth There are no real (10-20 years) long-term impact studies of Tekes activities, but studies of similar programmes abroad and case study evidence in Finland suggest that Tekes also plays a role in the longer term development of various industry area and has been instrumental in establishing new fields in Finland 15

16 Key effects of funding have been the development of new clusters of human capital and organisational learning so as to develop the capacity and capabilities of the innovation system, not just to underpin individual innovations Tekes was one of the first organisations in the world that not only focused on developing new products and processes but also on developing services, creating opportunities for higher added value and developing new markets Tekes has performed well in the past years and its impacts on the Finnish innovation system have been large Tekes deserves its international reputation as a leading technology and innovation agency 16

17 Tekes and renewal of company base Tekes programmes seminal in focusing attention on important areas like mobile communications, nanotechnology and biomaterials Tekes made it easier to support public-private partnerships and small organisations Funding to young companies (<6 years) doubled in ten years Tekes supported one-third of high growth companies, a large part of companies with radical innovations and many hot Finnish start-ups Growth of Tekes young innovative growth companies is clearly faster than others Tekes might lack the skills fully to understand how to start, run and manage a business enterprise Tekes could strengthen its linkages with venture capital (VC), while not taking a VC role 17

18 Tekes programmes and SHOKs Programmes for more basic fundamental and networking The main element in the success of Tekes Networking, strengthening R&D within fields and across discipline borders, capacity in companies, raising awareness, spreading good practice SHOKs are about critical R&D mass in important sectors. Good direction to go Start-up problems: danger of lack of a common vision; too short time horizons; crowding out of new challengers; IPR New Tekesprogramme approach for picking up and organising genuinely new developments and cater for the needs of innovative SMEs not (yet) proven Possible portfolio gap 18

19 Tekes and innovation in innovation Tekes put service innovation on the map and is supporting this strongly Tekes is leading in workplace innovation in Finland Both should not be seen as separate issues, but are ways of initiating and boosting new innovations Role of Tekes in demand and user driven innovation: take role of users in innovation process in account when evaluating proposals focus on industry and help industry to create business (supply side measures) Demand side measures: only were demands are clear and unambiguous 19

20 Tekes as part of the TEM system Roles of Finnvera, Finland Industry Investment and Finpro/Invest in Finland and Tekes rather clear for insiders Different roles with different perspectives that should not be merged Better signposting needed for outsiders Opportunities for synergy and mutual learning: at operational and strategic level Esp. in area of support for internationalisation added value for Tekes customers Governance seems to work, but cooperation should be promoted Is the debate function well addressed in Finland? 20

21 Tekes and othernationalagencies Academy of Finland Other main funder of university research Complementary because of different perspectives Cooperation should be more strategic Sitra Not a main funder Coopeartion could also be more strategic Role of Sitra in public sector innovation? 21

22 Tekes in the regions Impact of Tekes on regional innovation systems large, based on expertise and network access Regional access to Tekes by way of ELY centres appreciated by Tekes customers Support most effective and efficient when regional and national goals coincide and Tekes representations above critical mass Consider reducing number of ELY centres with Tekes participation 22

23 Tekes and internationalisation Focused on helping firms to enter and expand in international markets, not so much anymore on cross-border R&D collaboration: seems implicit choice Limited strategic approach to international S&T collaboration outside EU (domains, geographical areas) Mainstreaming of internationalisation throughout the Tekes organisation leads to expertise on EU-R&D matters not reaching the customers, in particular the companies (below critical mass) FinNode activities of Tekes at a relatively low key; client interest large, client satisfaction low; matchmaking function beyond the scope of Tekes role. 23

24 Tekesorganisation and internal processes Tekes is efficient and performs well, based on high-quality processes and personnel The matrix structure of is too complex and should be simplified Other tasks of Tekes should be prioritised and managed better Communication must be proactive and open, becoming much more visible in the public debate on science and innovation Governance should not become too private industry centred Policy freedom of Tekes is large in international context 24

25 Tekes future Globalisation, specialisation of Finland in mature industries and ageing of the population mean there is a need for more effort in the renewal of the firm base, focusing on companies able to excel in international markets Tekes new strategy takes these developments into account This has led to a sensible shift in portfolio, without a complete break with the past Because of portfolio shift and many (re)new(ed) instruments constant monitoring and evaluation important 25

26 Thank you technopolis group has offices in Amsterdam, Ankara, Brighton, Brussels, Frankfurt/Main, Paris, Stockholm, Tallinn and Vienna 26

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