Industrial Policy Strategy

Transcription

1 Industrial Policy Strategy - Case Study Slovenia TAIEX Seminar on Industrial Policy Belgrade, February 4, 2011 Mag. Mateja Mešl

2 Diploma in Sociology, Masters in Regional and Urban Planning Mag.Mateja Mešl Governement of RS, Ministry of Higher Education, Science and Technology Professional Career: , Private Consultant and Project Manager - RSG, Venture Capital Fund , Vice-president Slovenian Chamber of Commerce and Industry , State Secretary Government of RS, Ministry of the Economy , Founder and Manager - Nov na d.o.o., Ravne , Researcher - Economic Institute Maribor 2

3 PRESENTATION Industrial policy in Slovenia. Industrial Policy policy transformation process, design and principles Implementation programs and instruments, organizational structures, monitoring and evaluation results, best practices and learning. 3

4 Policy transformation process From 1990 Privatization and restructuring, traditional industrial policy 1999 the first Industrial Policy Strategy - pro-active industrial policy with clear distinction between the horizontal development support and direct rescue and restructuring support for companies new organization of the ministries - integration of policies in support of entrepreneurship, R&D, investment, internationalization Comprehensive Competitiveness and Entrepreneurship Policy- measures to support investment in knowledge and skills, technology development and internationalization 2004 National development Program - industrial policy measures as priority for investment of the EU structural funds National Research and Innovation Policy integration of R&D and competitiveness policy measures. Industrial Policy was an important part of the economic policy through-out the transition period 4

5 TRANSFORMATION PROCESS AND ORGANIZATION Privatization, restructuring - rescue and restructuring aid to avoid social problems Proactive Industrial Policy -horizontal amd sector specific measures (textile, steel) Competitiveness Policy promoting entrepreneurship technology and internationalisati on of enterprises Innovation Policy promoting R&D investment, knowledge transfer and innovation Ministry of Econ. Activities Ministry of Econ.Relations Ministry of Small Business and Tourism Ministry of Science and Technology Ministry of the Economy Competitiveness - SME, Industry, Technology Internal Market International Relations Ministry of the Economy Entrepreneurship, Competitiveness, innovation, Internal market International Relation 2010 Ministry of Higher Education, Science and Technology Ministry of the Economy Research and development Innovation 5

6 Proactive Industrial Policy - Starting point 1. Competitive position of Slovenian economy By the end of 1990 s the overall performance of the country improved but the competitive position remains weak: - Strategic gap in productivity (in 1999 VA per employee , EU ) - High share of traditional industries, low investment capacity - Low investment in R&D and technology transfer - Low share of high educated work force. 2. EU accession and requirements Full compliance with the state-aid rules was the most important topic: - Evaluation of the Rescue and Restructuring Aid Granted - Clear distinction between RR and development aid - Institution building, adequate implementation structures 3. New trends and policies - New technologies, competitive markets, - New industrial policy in EU, active role of the state in promoting key factors of competitiveness Slovenia prides itself for sound macroeconomic situation but microeconomic indicators are less 6 favorable.

7 Proactive Industrial Policy Basic Principles 1. Changing role of the state - Catalyst - ensuring macroeconomic and framework conditions for economic growth (public finance, education and labor market, public R&D investment, open and competitive internal market, ) - Agent of change - active role in acquisition of knowledge and investment in key factors of competitiveness, being knowledge, technologies and entrepreneurship. 2. Horizontal policy - Governmental policy -Inter-action with all different policies influencing competitiveness of the industry (internal market, education, R&D, labor market, environment and regional development, ) - Horizontal measures equal access for all industries and enterprises, nonselective in terms of sectors and companies - Economic impact impact on the overall nation s competitive capability, policy is selective in terms of investment focus and anticipated impact. 3. Bottom-up and pragmatic approach Consultation with the private sector, learning about best practices and adopt them to suit the national environment. 7

8 Proactive Industrial Policy Aim and Objectives The aim: -Ensure stable macroeconomic conditions and environment supportive for entrepreneurship -Enhance key factors of global competitiveness - knowledge, technology and entrepreneurship Objectives: -Attaining economic structure comparable to that of the EU which will require fast growth and an increase share of activities with high added value -Improving the competitive capacity of enterprises, in particular reducing the productivity lag -Creating balanced economic capacity across the regions of Slovenia. Two challanges for Slovenia: to catch up and to adapt - to the future demands. 8

9 Proactive Industrial Policy Orientation and Programs 1. Improvement of the regulative environment (deregulation, competition) Open and competitive market Internal market, state aid regime, competition regime Labor market and education Employment regulation, lifelong learning, R&D policy, 2. Improvement of the competitive capacity of industry Capabilities Technology development Internationalization Entrepreneurship and innovation Business models, management tools, life-long learning R&D, technology, value chain and cluster development In-ward, out-ward investment, strategic partnerships Start-up, SME growth, support infrastructure 3. Rescue and restructuring aid for individual companies 9

10 Entrepreneurship and Competitiveness Program Design 1. Analytical background and studies - International studies and reports (IMD, WEF, EU Innovation Scoreboard, EU, Observatory, EU BEST Report, ) - In-depth analyses (Slovenian Manufacturing, Position of Slovenian Textile and Foot Wear Industry, Benchmarking Slovenia- Competitiveness Strengths and Weaknesses, Study on Potential Clusters in Slovenia) 2. Organization - Merging of the ministries (SME and Tourism, Economic Affairs and Economic Relations) and departments (Technology) under the new Ministry of the Economy - Formation of the Department for Entrepreneurship and Competitiveness as the responsible body for proactive industrial policy 3. Consultation and public-private partnership - Public awareness, presentation of the studies - Formation of the PP consultation bodies i.e. Strategic Council on Competitiveness - Inter-ministerial task groups i.e. R&D and Technology Council 10

11 Entrepreneurship and Competitiveness Program Structure Knowledge for Development Strengthening enterprise capacities for use of technology advances as the main source for higher competitiveness. SKILL FORMATION Improving Enterprise Competitive Capacity Strengthening key factors that are determining competitive advantages of enterprises, technology, innovation, organization. Entrepreneurship Promotion and Enterprise Creation Encouraging entrepreneurship, promoting new values, new ventures and growth of SME s. 11

12 Sub-program; Knowledge for Development Strategic objectives: - Increased investment in R&D from 1,5 to 2% GDP - Increased share of innovative companies from 28 to 40% Measures and instruments: - Stimulating transfer of knowledge from R&D institutions to industry; co financing joint R&D projects - Stimulating employment of young researchers in industry; employment subsidies - Stimulating participation of Slovenian companies in EU research programs; co financing and technical assistance - Supporting development of industry related infrastructure; cofinanciering activities of the Technology Centers - Stimulating creation of high-tech business from universities; establishment of business incubators and technology transfer offices 12

13 Sub-program; Improving Enterprise Competitive Capacity Objectives: - Productivity increase, lowering the leg behind EU - Increase of the high tech export from 26% to the EU average Measures and instruments: - Stimulating enterprise investment in R&D and innovation; cofinancing applicative research projects and investment in new technologies - Promoting internationalization; development aid for FDI and out ward investment of Slovenian companies - Stimulating strategies to increase productivity; co-financing introduction of quality standard and continuous improvement systems (i.e. 20 keys, 6Sigma,..) - Stimulating networking and development of clusters; co-financing projects on development of value chain, clusters and technology networks. 13

14 Sub-program; Entrepreneurship and Enterprise Creation Objectives: - Increasing net growth of new enterprises per year - Increasing amount of new investment in SME. Measures and instruments: - Development of supportive environment for SME: voucher system for consultancy and training services, public investment in industrial cones, technology parks and business incubators - Stimulating enterprise creation: incentives for start-up companies in business parks and incubators - Investment promotion and growth of SME; co-financing new investment in SME investment in growth stage - Access to finance: Small Business Fund, credit lines and guarantee schemes. 14

15 Implementation Implementation structure - Ministry of the Economy - Ministry of Higher Education, Science and Technology - Ministry of labor and Social Affairs - Implementing Agencies Public Agency for Entrepreneurship, Public Agency for Technology, Entrepreneurship Fund. Funding: app. 42mio from the national budget - After the accession, the funds increased significant, nearly 40% of the EU structural fund (ERRD) being dedicated to the program: app. 100 m EUR app. 900 m EUR. 15

16 Monitoring and Evaluation Monitoring: - On the project basis - re-funding principle, state funds available after the successful implementation of the project - On the program basis - internal monitoring and financial control, state aid system Evaluation: - Internal evaluation of the projects supported and direct results - External, independent evaluation of the objectives achieved for the programming period. First external evaluation was developed in

17 Results and Learning Efficiency of the implementation less satisfactory because of - high fragmentation of instruments, a lot of small scale incentives - lack of coordination and synergies between different implementing structures Effectiveness of the program proven by the - Overall investment stimulated; public funds represents 5% of the total investment, every from the budget attracted nearly 20 from the private sector - Increased performance and competitiveness of the enterprises involved Impact shown in important changes of the overall industrial structure but some important challenges remain - Inflow and growth of innovative SME s - Productivity gap and technological structure. 17

18 Results and Learning Development support is justified when having impact on individual company and the industry as a whole! It is therefore important to design policy measures in a comprehensive way, not only as a financial incentives for individual companies but: - To invest in knowledge transfer and access to best practices (train the trainers) - To define evaluation, promotion and dissemination of knowledge as an important part of the program - To ensure capacity building, organization and competencies for the implementation and sustainable development. 18

19 Best Practices Counter Factual Evaluation proved the changes in the overall industrial structure that would not happened without the state support. Measures that were found most effective in reaching objectives set for the program and had the most recognizable impact on the desired changes were: 1. Business Cooperation and Cluster Development, improving cooperation between businesses and knowledge providers, networking and value chain development 2. Promoting development of common R&D infrastructure, development of technology centers, technology platforms and centers of competence/excellence 3. Continuous Improvement Systems, implementing new business models and management systems - 20 Keys to Workplace Improvement 19

20 External evaluation proved the cluster program as one of the most successful policy measures MEASURES - (1) % of overall budget, (2) % of probability for the projects not happened without the state support (1) % (2) % THE WHAT Stimulating transfer of knowledge from R&D institutions to industry, Stimulating mobility of researchers Strengthening international R&D cooperation 1 36 Promoting development of commonn R&D infrastructure 6 68 Stimulating creation of high-tech business from universities 1 50 THE HOW Promoting enterprise investment in technology and innovation 6 58 Promoting internationalization of enterprises Introducing strategies to increase productivity 20 Keys Program 2 58 Stimulating networking and development of clusters Promoting entrepreneurship and the development of supportive environment 8 38 Promoting the creation and development of SME s and investment promotion 9 44 Promoting development of tourism

21 Cluster Development 1999 Mapping, Identification of potential clusters 2000 Start with the pilot projects Program design and implementation STEP 1: Analyses of the existing inter and intra-firm co-operation, identification of the potential strategic clusters for Slovenia. Strategic decision: - bottom-up approach, development of cluster policy while learning together in pilot projects - supporting the process of clustering, not strategic clusters STEP 2: Selection of pilot projects - three groups selected, automotive, tool and die, transport and logistics STEP 3: Implementation - public tenders - 17 national cluster initiatives supported, more than 500 companies and 50 R&D institutions involved with 130 joint technology development projects - More than 70 local cluster groups organized and supported in training and strategy development 21

22 Broader set of measures designed to cover the process: Cluster Program Design Promotion of clustering Initial phase Early growth Growth Promotion, international experiences, THE WHAT awareness raising: Supporting THE HOW projects on specialization in value/ production THE HOW chain Development of technology networks Development of local clusters TARGETS Cooperation culture Concentration of industry Knowledge about new business concepts Direct support for development of clusters First year Initiation: Strategy Action plan Management and organization Two more years: Management Joint R&D projects Common platforms and infrastructure TARGETS Cluster hubs- critical mass of firms, skills, resources Cluster strategies - vision, needs, interests Action plan - identification of gaps in skills, knowledge, needs and potential Investment in R&D and infrastructure Support for: Internationalisation: R&D projects Innovation infrastructure Capacity building TARGETS Growth Competencies Open innovation systems 22

23 Continuous Improvement Systems Stimulating strategies to increase productivity; Introduction of new management tools and improvement systems - 20 keys project Project design: 1) Transfer of knowledge (trained consultants) 2) Selection of enterprises for a pilot project (60 firms in three years) 3) Evaluation and promotion of the system. Overall public investment in three years time 3 m. Results: - Output Indicators public funding generated 5.times as much private investment - Result Indicators amount of direct savings 3 m, number of inventions and improvements registered 1747, approximation of added value 22 m, average productivity increase 14,7% - Impact Indicators (Self Assessment) - increased investment in human resource 88%, new technologies 60%, added value 79% - Promotion of good practices, knowledge providers (80 highly trained trainers) dissemination of knowledge (the role of CCI) 23

24 PROGRAM - 20 KEYS TO WORKPLACE IMPROVEMENT ( ) Two yeras of implementation 2002 Start of the Program

25 Investment in R&D and Infrastructure Stimulating private investment in R&D and stronger cooperation between industry and knowledge institutions Investment in R&D and infrastructure PROGRAM - R&D projects, technology centers, technology parks, university incubators Technology Platforms ; initiative of the Chamber of Commerce and Industry; 22 platforms /over 500 companies and RD institutions) developed strategic research agendas - Key technologies and investment priorities identified ; ICT, advanced materials and nano technologies, manufacturing technologies, biotechnologies, food and health, sustainable energy and sustainable construction 2008 on - Investment in infrastructure on the priority fields - Development of centers of excellence and competence centers 25

26 What did we learn PROGRAM What makes policies effective: Shared and understood vision Clear and consistent priorities Implementation tools, knowledge of what works Effective management Accountability Continuous learning. Source: UK Government Performance and Evaluation Unit Success depends on getting all these right. Failure of one can jeopardize the whole process. Policies and implementation can not be divided. Collection of tools is crucial. There are no models, selection depends on the national circumstances, objectives, priorities and implementation capabilities. Continuous learning. Delivery is not one-off task nor a linear process. It requires constant learning, adoption and improvements. 26

27 What we failed to achieve PROGRAM Social/political consensus and integrated approach Policy limited to one Ministry s effort/responsibility Not recognized as a national growth model; missing policy cluster Sustainability and long-term orientation Changing, short term orientations and priorities Sustainability not stressed enough Institutionalization Attempts to create a strong implementing Agency failed Missing opportunity for learning from cross-border and international initiatives Failed to build on the strengths of clusters to develop innovation infrastructure. 27

28 The key to successful implementation is broad national consensus and trustful environment This requires: THE WHAT THE HOW - Constant communication, promotion and awareness raising among all shareholders - Broadly accepted programming documents - Clearly presented processes and implementation structures ensuring transparency - Balance between long term strategic investment and short term results (proof of concept) - Open access to all information and results of the programs And last but not least, it is a long process and it requires a strong commitment and a lot of persistence. 28

29 A lot of success! Mateja Mešl