REPORT ON DEMAND FOR INNOVATIONS IN THE FRAMEWORK OF INNOREGIO MAŁOPOLSKA PROJECT

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1 InnoRegioMałopolska Project Financed from the 6th Framework Program REPORT ON DEMAND FOR INNOVATIONS IN THE FRAMEWORK OF INNOREGIO MAŁOPOLSKA PROJECT Written by: Łukasz Frydrych 1

2 Contents 1. Introduction... Błąd! Nie zdefiniowano zakładki. 2. Sources of innovations Innovations initiatives in Małopolska Information on the institution carrying out the research Description of project provisions Presentation of research outcome... Błąd! Nie zdefiniowano zakładki Structure of polled companies... Błąd! Nie zdefiniowano zakładki Characteristic of polled companies income-wise Błąd! Nie zdefiniowano zakładki Structure of employees with higher education and /or university degrees...błąd! Nie zdefiniowano zakładki Knowledge of the market of institutions of innovations supplybłąd! Nie zdefiniowano zakładki Planning and forming of objectives in organizationsbłąd! Nie zdefiniowano zakładki Structure of companies considering developmental research Błąd! Nie zdefiniowano zakładki Significance of innovations initiatives on various levels of activity of an organization Błąd! Nie zdefiniowano zakładki Interest of companies in sources of financing of developmental projects...błąd! Nie zdefiniowano zakładki Corporate self-assessment of technological potential Błąd! Nie zdefiniowano zakładki Corporate demand for services and products... Błąd! Nie zdefiniowano zakładki. 7. Conclusions Summary...7 2

3 1. Introduction Strength and competitiveness of economy is determined by its innovativity and ability to use new knowledge and technology in practice. Innovativity may be examined by demand criteria, i.e. the requirement for ideas and innovative solutions claimed by potential recipients, or supply criteria, i.e. the offer of new solutions proposed by appropriate entities. Such criteria allow for assessment of the level of innovativity of virtually every part or area of economy. This subject is particularly vital for a region, since innovations are the greatest source of its riches, what translates into competitiveness and quick development. This report aims at presentation of the outcome of research into demand for innovations of the Małopolska region. A questionnaire allowed for assessment of the demand for innovations among Małopolska small and medium enterprise, and the resulting diagnosis of the situation may constitute the basis for commencing a range of indispensable activities. Krakowski Park Technologiczny Sp. z o.o. [Krakow Technology Park Ltd. ] conducted research, and as a follow-up prepared an analysis of demand for innovations in the Małopolska region in the framework of the project: Improvement of Regional Innovative Strategy in Małopolska RIS MAŁOPOLSKA InnoRegio Małopolska financed from the 6 th Framwork Project. This analysis was based on the questionnaire research carried out on a representative group of companies, whose data were obtained from the Main Statistical Bureau (GUS). This research may serve as a supplement to the Regional Strategy of Innovation of Małopolska Voivodship for the period of envisaging commencement of activities for improvement of corporate innovativity in the voivodship. 2. Sources of innovation Innovations are created at the junction of science and industry, what requires cooperation of staff and institutions of various capabilities and qualifications. Innovation is successful when it is eventually introduced on the market and creates definite economic values. Innovations may have various sources. Due to mechanism stimulating innovation we differentiate: Supply innovations discoveries, inventions, ideas of new technology authors made as the result of their own inquisitiveness; Demand innovations stimulated by the market needs; seeking solutions responding to existing needs. 3

4 Demand innovations translate more directly into their practical use, having a positive impact on economic growth. Corporate innovativity may be defined as innovativity culture ( strategic planning, setting up budget on B+R, cooperation with scientific centres, research institutes, etc., using purchased patents, licenses) and innovativity effects ( a number of patents claimed by a company). Only large Corporation can afford financing research and development, small and medium enterprise has to use external sources of innovations: paid licenses, patents, know-how and consulting services. 3. Innovativity in Małopolska Małopolska is a region which should support innovativity development, since it possesses well developed higher education system and scientific potential as well as relatively high financial allowances for research and development activity. Vast scientific potential is mainly concentrated in Krakow. In 21 universities there are more than 9,9% of students in Poland, and this number keeps growing every year. Among graduates 8,4% were students of vocational studies, 47,0% of Master s degreetudies and 14,6% of supplementary Master's degree studies. Organizations conducting scientific and developmental activity employ people, what constitutes 11% of staff employed in this field in Poland. The size of financing for this kind of activity elevates Małopolska voivodship to the second place in Poland 1. Unfortunately, this strong internal supply of innovation is not matched by the equally strong regional " demand" for innovations. The real level of innovativity of Małopolska enterprise and technologies transfer is scarcely developed, and existing institutions do not cooperate in the framework of a cohesive system, what shall be evidenced by data presented in the further part of this report. 4. Information on the institution carrying out the research Krakowski Park Technologiczny (KPT) is a company managing the Cracovian Special Economic Zone. The founding bodies of the company were: the State Treasury, the City of Krakow, the Marshall Office, the AGH University of Mining and Metallurgy, the Jagiellonian University, the University of Technology in Krakow. The mission of all these organizations is work for regional development by setting up conditions for development of high technologies and transfer of knowledge from universities to business and building of industry competitiveness. KPT Sp. z o.o. [Ltd] possesses appropriate potential and experience in realization of innovative projects, conducts a part of its own projects and participates in projects of other research and developmental entities as a partner. First and foremost, 1 Developmental Strategy of Małopolska Viovodship. 4

5 though, KPT Sp. z o.o. [Ltd.] conducts cooperation with investors, who decided to invest on the area of the Cracovian Special Economic Zone. 5. Description of project provision Carried out research constitutes a stage of InnoRegioMałopolska project, whose paramount objective is improvement of innovativity in the region as well as development of long-term strategy for Małopolska with the cooperation and acknowledgement of foreign investors experiences. Conducting of a direct questionnaire and analysis of collected data allows for examination of innovative potential of a region, and specifically the demand for innovations claimed by micro, small and medium enterprise in the region of Małopolska. The test was carried out on a representative group of 800 companies from the small and medium enterprise sector, whose data were obtained from the Main Statistical Bureau (GUS). A questionnaire was sent to such a number of companies examining orientation and level of knowledge on possibilities and directions of searching for innovations and institutions whose filed of activity comprises supply of innovations. As the result of completed questionnaire interviews and inquiries via post, and telephone 103 full answers were obtained, which were taken into consideration when elaborating on tests and statistical divisions. In the further part of this report the detailed outcome of research is presented in the manner of graphs and summarizing comments. On the basis of obtained outcome it was possible to analyze innovative potential and knowledge about it possessed by companies located in the region. For the needs of the project the data of randomly selected 800 hundred companies were obtained from the Statistical Bureau in Krakow. Business entities which constituted a statistical sample were grouped in accordance with sections of the Polish Classification of Business Activity (PKD). 1. Section D industrial processing (72,21 %) 2. Section E generation and supply of electricity, water and natural gas (2,92 %) 3. Section F construction industry (5,67 %) 4. Section G wholesale and retail trade, vehicle repair (5,61 %) 5. Section I transport and communication (2,46 %) 6.Section K: real estate management, services connected with running business activities (8,64 %) 7. Section M: education (1,31 %) 8. Section O: community, social and individual activity, other (2,18 %) 5

6 During questionnaire interview it turned out that a part of address data obtained from the Statistical Bureau was out of date or the companies were classified into another size category than it was apparent from the obtained tally. Questionnaire interviews were coordinated by Krakow Technology Park Staff. 6. Conclusions Questionnaire interview allows for a very general division of companies with regard to their approach to innovations into such companies which: - accept innovation, therefore adopt solutions proposed by innovation supply entities - seek innovation, come forward with initiatives themselves and seek technologically new product and process solutions to be able to adopt them on their own ground, seek possibilities of financing such projects - they are not interested in innovations, these are entities which neither seek nor accept innovations proposed by research and developmental entities Unfortunately, B + R in relatively low degree is financed out of entrepreneurs private funds. The participation of Polish companies in B+R financing constitutes approximately ¼ of all means earmarked for this purpose. The immense participation of the state budget (almost 65% in 2001) belongs to one of the highest in Europe. Let the ratio of means spent on B + R to the gross domestic product illustrate the effectiveness of such expenditure, which does not give too optimistic an impression: 0,7% in comparison to 3,8% in Sweden, a country which achieves the highest result in Europe 2. The report on demand for innovations shows that small and medium enterprise does not cooperate with B+R entities (more than 90% of examined enterprise) and they do not update on the applied research carried out by these entities. Only about 7 % of companies took up cooperation with B+R entities, and 4 % carries out independent applied research. In many cases the companies do not cooperate with research entities or they do not have any opinion on the quality of their work. Significant barriers to setting up and development of companies which are technologically advanced and capable of implementing innovations are the following: a barrier of information and competences as well as a financial barrier, also the lack of systemic cooperation between the sectors of science and entrepreneurship, including solutions in the scope of support for innovations and technologies transfer. 2 Abridged statistical annual report,

7 One of the most basic chances for development of our voivodship is taking advantage of existing potential and concentration on creation of the so-called regional system of innovation, i.e. the milieu enticing innovativity of companies and supporting technologies transfer. 7. Summary Carried out research shows the enterprise involvement in cooperation with research and developmental entities. In 35 % of tested companies there are employees who have academic degrees, however in few of these companies one could observe any cooperation with universities or research entities. Companies rather prefer to buy new technologies( with predominance of national suppliers - 75% of the cases) than to elaborate over them. In relation to 2004 the percentage of companies purchasing new technologies from foreign suppliers remained on the same level. A large part of tested companies uses software and computers for administrative management, has access to the Internet. The percentage of companies with their own website amounted to 73,1 %. The level of using electronic banking services is high, too. (80%) The most important source of information on the need to implement innovations in polled companies were their clients, the second place in this ranking was occupied by competitors and other companies. Only approximately 7% of polled companies cooperates with research and developmental entities. Carried out analysis as to the sources of financing of investment activity clearly indicates dominance of own means. As much as 47 % of companies attempted to obtain EU-funding, or is interested in it. It constitutes a significant increase in relation to earlier periods of time. According to examined companies the most important instruments of supporting small and medium enterprise are: reduction of high costs of employment and decrease of bureaucratic nuisance connected with conducting business activity. Poor assessment of research and technological progress, which are the basis for competitiveness growth of modern economies gives a reason for anxiety.. 3 Enclosure 1 Demand for innovation questionnaire 3 The summary was based on the Regional Strategy of Innovation and Report on Demand for Innovations as regards the following project Innovations market in Małopolska Ł. Mamica, P. Kopyciński 7

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