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Science cities in the context of European and international innovation policies

(Chapter for unpublished book on English science cities)

Olga Mrinska for ippr north, 2008

Introduction

Mrinska for ippr north, 2008 omrinska@gmail.com Introduction The links between science, innovation and economic

The links between science, innovation and economic development first emerged as a subject for research and policy-making in the mid-20 th century. The shift from an industrial to a post- industrial economy meant that in order for countries, regions and cities to enhance their economic growth and competitiveness, they would have to find new roles and models for their research and applied science facilities. Hence, science and innovation policies began to emerge both at the national and regional levels to harness places’ existing intellectual potential and to attract more talent and investment from elsewhere. This stimulated energetic competition between places between cities and regions that were all aiming to become beacons of science and technology. The further transition towards a knowledge-based economy in the 1990s only accelerated this trend. The UK’s most recent response has been the Science City initiative, launched in 2004 when York, Manchester and Newcastle received this status. Three more cities Birmingham, Bristol and Nottingham followed in 2005.

For the British Government, science cities are not only about achieving the goals of state innovation policy (greater link between business and universities, greater commercialisation of innovations, etc). They are also a key instrument of the UK’s regional policy. Science cities are intended to attract resources and innovative production beyond the so-called Golden Triangle formed by Oxford, Cambridge and London (the area with the highest concentration of scientific and research activities in the UK) by redistributing research activities into parts of country where the economic structure currently lacks innovation-intensive sectors. This is linked to a variety of mechanisms to promote greater collaboration between scientific and research institutions, the business community and local authorities (though not by allocating large amounts of funding). In other chapters we analyse how successful this initiative has so far been from different perspectives, including that of business community.

perspectives, including that of business community. Of course, the UK is not the only country to

Of course, the UK is not the only country to pursue territorial innovation policies. Many other countries in Europe and elsewhere have also developed policies to address regional gaps in technology and innovation. Science cities, scientific parks or technopoles are one instrument among many which have been used to stimulate more innovation-intensive production in manufacturing and services and to strengthen the competitiveness of national economy (others include stimulation investment in R&D, enhancing skills and reforming the education system, deregulation and support of innovative businesses, and creating a beneficial environment for intellectual property rights). The core goal of this chapter, therefore, is to place the concept of science cities in the wider context of European innovation policies and to look at international examples (from the EU, the US and Japan) of similar policies and their effectiveness in spurring regional economic growth of the regions and improving citizens’ well- being.

Historical background

The idea of creating special regimes to promote science and research and enhance their commercialisation through closer links with the private sector first emerged in the aftermath of the Second World War. In the 1950 and 1960s, many states both in the developed world and in the Communist bloc experienced rapid economic growth due to high levels of industrialisation, mass production, and higher demand for new technologies and know-how. Those countries which already had extensive applied and basic research facilities aimed to strengthen these facilities either to achieve higher economic success and raise the attractiveness of their research and innovation facilities (e.g. the US), to harness the effectiveness of those facilities through a higher concentration of human capital in ‘growth points’ (e.g. the USSR), or to enhance their military and defence capacities (both the US and the USSR). Countries which lacked this scientific base but experienced tremendous economic growth (Japan) designed scientific policies which would spur the creation of a solid science base and effective applied research capacities which would then be able to compete with stronger partners.

which would then be able to compete with stronger partners. The ideas of science cities and

The ideas of science cities and technopoles thus began to emerge in the 1960s in different parts of the world. The difference between a science city and a technopole is that the latter represents a town or city that already has significant knowledge production capacities and other important economic functions, while the former is based around newly-built facilities (usually on green field or brown field), often in less developed areas with existing or relocated scientific and educational institutions. When implementing science city projects, therefore, governments and other actors usually face much higher costs related to building new infrastructure and attracting researchers and entrepreneurs (though this is not always the case). On the other hand, the science city model also provides an opportunity to create ‘ideal’ towns and settlements ‘from scratch’ which have different functional zones and all necessary social and cultural infrastructure and are also more environmentally sustainable.

Projects related to technopoles focus more on linking existing infrastructure and facilities, attracting more capital and human resources, and achieving higher commercial success from research and innovation in order to stimulate activity in other economic sectors in the city or region. One example of such policies is the French technopoles initiative in the 1970s and 1980s inspired by Perroux’s growth poles theory, when government research facilities were relocated from Paris to technopoles or science cities in the less developed cities of Grenoble,

Cooke, 2006
Cooke, 2006

Lille or Toulouse (

). Another example is Japan’s Technopoles programme in the

1980s, which used technology-led development policies to promote the economic

Kitagawa, 2007

).

development of peripheral regions (

There are usually three major drivers behind the creation of science cities national government, universities, and regional/local government any one of which may play the lead role. For example, Silicon Valley is a classical case of initiative spurred by the university (Stanford University) which was supported by businessmen (often alumni of the same university) and later by local/state authorities. The Research Triangle Park (RTP) in North Carolina, USA, is an example of an initiative led by state and local authorities and then supported by universities and private sector. By contrast, the famous Tsukuba science city in Japan is the product of central government policy, which had the aim of decentralising government research and engineering research institutes, intellectual resources and state R&D funding outside the overheated Tokyo-Osaka area. Central government also drove the

creation of science cities in France in order to reduce the gap between Ile-de-France and the rest of the country though they were largely also supported by the local government and business community. The Sophia Antipolis science city established near Nice in 1972 is one of the most successful examples of this kind of intervention. The Soviet Union took this even further, establishing around 70 science cities, most of them outside of the big European conurbation zones in areas deep in Siberia (including the famous Akademgorodok near Novosibirsk). All these initiatives in different parts of the world developed actively in the 1950s, 1960s and 1970s.

These areas all achieved substantial success in research and science, though the results in terms of commercialisation were much more mixed. Soviet (now Russian) science cities suffered harshly from the national economic crisis, and only now are some of them being revitalised with substantial state investment and stronger links with the business sector. Tsukuba science city is still one of the greatest growth poles for Japanese government innovation policy and government R&D spending, as traditionally the Japanese business sector, which is responsible for roughly four-fifths of total R&D spending, does not invest substantial amounts in national research institutions and universities. RTP in North Carolina has had periods of success but is currently reviewing its strategy in line with modern trends towards the commercialisation of science and in response to harsh competition from similar techno parks in the US and abroad. Silicon Valley has been a tremendous success thanks to its emphasis on attracting business-minded researchers and creating conditions for their businesses to grow and support its creative milieu. Its links with Stanford University remain fundamental, but this science park is largely driven by private sector initiatives and their vision for future development.

sector initiatives and their vision for future development. Challenges for the innovative economy in the EU

Challenges for the innovative economy in the EU

Traditionally, the countries of the European Union have been world economic leaders and growth poles for innovation and science (alongside the USA and Japan). However, recent trends in the world economy, which have seen a huge increase in flows of goods, capital and people due to the dramatic impact of globalisation process, has led to substantial changes. The rise of China, India, Russia and some Latin American economies means that the EU now needs to compete not only with its traditional partners (the US and Japan), but also with these emerging world powerhouses. Though these countries currently have much lower levels of wealth and innovative development, they will have many opportunities to catch up thanks to new trade patterns, foreign investment, global relocation of business and the intensification of international production networks, all of which can drive innovative production and services.

all of which can drive innovative production and services. As a member of the EU, the

As a member of the EU, the UK enjoys the benefits brought about by close economic integration and social cohesion. However, it also shares the weaknesses of the European economy, characterised in recent years by relatively modest rates of growth of productivity, investment in education, science and R&D, inadequate deregulation, and a tendency towards overprotective measures. Compared to the US, the EU has a much less innovative and entrepreneurial business community, which invests much less in R&D. It also has an inadequate skills mix which does not meet the demands of the modern economy. The EU Single Market has had huge benefits for the manufacturing sector, but has so far failed to accommodate the growing role of service industries, which remain highly disintegrated and nationally regulated. Radical changes are needed, both in policy and in the behaviour of

citizens and businesses, to reverse current trends which see Europe falling behind other world powers.

This policy shake-up began in 2000, when the European Commission and the then 15 member states launched the Lisbon Strategy, which was meant to be an overarching policy framework aimed at improving the productivity of the European economy and closing the gap in economic growth between the EU and its core competitors the USA and Japan. This was Europe’s response to the growing challenges of globalisation and rapid technological progress. It was acknowledged that in order for the EU to compete in the new global environment, which is determined by intensity of knowledge and innovation in the total output, radical changes in the national and community policies were necessary.

Kok 2004 ). The European economy Kok 2004
Kok 2004
). The European economy
Kok 2004

The Lisbon Strategy set a very ambitious target for the EU: to become the most dynamic and competitive knowledge-based economy at the global scale by 2010. A multitude of priorities and action plans in the macro-economic and micro-economic spheres were set up to achieve this ambition. However, within a few years it became clear that the Union’s ability to meet this ambition was overstated, given the scale of task, the complexity of governance arrangements and the relatively short timeframe. A major review of the Lisbon Strategy at the end of 2004 by High Level Group chaired by Wim Kok concluded that Europe is still not ready to compete with other world powers and actually risks falling further behind due to increased competition from

the growing economic powers of China and India (

performed relatively weakly in 2000-2004, and investment in R&D was insufficient due to the higher strain on public finances. Moreover, the EU enlargement in 2004 caused a drop in

output per head of 12.5 per cent (

). The inconsistency of national regulatory regimes,

and the formalistic approach of certain member states towards meeting their Lisbon obligations, meant that the EU as a whole was actually losing the momentum required to achieve radical changes.

Among the key challenges identified in Kok review were the protracted internal negotiation and complicated co-ordination procedures which must be followed to formulate, approve and implement policies that take on board the positions of all member states. Such co-ordination became even more challenging after the EU enlargements of 2004 and 2007. However, many commentators agree that although the accession of 12 new members with significant structural problems and lower levels of prosperity has caused some problems, it has on balance had a positive impact on the Single Market. The market became more competitive due to the expansion of consumer markets, the inclusion of a cheap but qualified workforce, and the increased division of labour. The Union is in a quite unique situation where it can enjoy the gains of both low-cost and high-cost economies, with steadily growing trade, capital and people flows among 27 member states. Lower transaction costs and universal standards across the Union make trade, especially in intermediate goods, much simpler. Central and Eastern European countries are still more competitive markets for offshored manufacturing, as distance remains an important factor determining the cost of production, especially due to the

recent dramatic rise in the price of fuels (

due to the recent dramatic rise in the price of fuels ( see Castro Coelho et

see Castro Coelho et al 2008

).

After this rather critical review in 2004, the Commission re-launched the Lisbon Agenda of

Growth and Jobs in 2005 (

need to streamline governance structures and regulatory procedures. It was decided to concentrate on two key tasks:

EC 2005
EC 2005

), concentrating on fewer priorities and highlighting the

1)

delivering stronger, lasting growth; and

2)

creating more and better jobs.

At the same time, all member states agreed Community Guidelines as an instrument to co- ordinate their economic policies across the Union. These apply to all member states and to the Community as a whole, and stipulate how specific macro-economic, micro-economic (including research and innovation) and employment policies can contribute towards growth and creating jobs. Each member state brought their commitments and measures together into a three-year National Reform Programme, while the Community measures were brought together in the Community Reform Programme 2005-2008. An annual monitoring mechanism was set up to follow progress at the community level.

see EC 2007 see Barysch et al 2007 ).
see EC 2007
see Barysch et al 2007
).

Progress in achieving the Lisbon targets is measured by several publications. The main instrument for cross-European benchmarking of policy performance and meeting Lisbon commitments is the European Innovation Scoreboard (EIS) (latest edition available for 2007) supported by the Commission. There are also annual assessments by the European

Commission itself (

) and independent assessments such as the Lisbon scorecard

compiled by the Centre for European Reform (

The state of innovation and research in the EU

So how well are the EU and its member states performing against the targets they set themselves, and are they on course to achieve their commitments? Two policy spheres of the Lisbon Strategy are particularly important: research and innovation. Data from the EIS, Eurostat’s Community Innovation Survey (CIS), and a few other sources can be used to provide some answers to this question.

Investments in R&D are usually used to measure the scale and effectiveness of state research and innovation policies be that government investments, business investments or investments by higher education institutions. The scale of investment was also selected as a key target for achieving the Lisbon Strategy when the EU committed to reach 3 per cent of R&D expenditure as a share of GDP by 2010.

The EU as a whole traditionally lags behind its main competitors the US and Japan in the scale of both government and business R&D investment. Within the EU, however, levels of investment are quite diverse. Some countries are already investing above this threshold (see Table 1), while others are lagging well behind (new member states) or invest below their potential (the UK, France and Germany) though many low-performers at least have higher growth rates of R&D investment, which could be explained by their catch-up innovation and research strategies (Table 1).

their catch-up innovation and research strategies (Table 1). As this is an area which is mainly

As this is an area which is mainly regulated by national legislation, countries often chose not to follow community-set standards and priorities. For example, the UK has declined to set a 2010 national target like all other EU countries did, and its national policy agenda (the Science and Innovation Investment Framework 2004-2014) is underpinned by a target of spending 2.5 per cent of GDP on R&D by the year 2014. The EC continues to press the UK Government to use the Lisbon Strategy’s 2010 target so that the UK can feed more coherently into the overall Lisbon process.

Intensity of investment is not everything, however, and experts argue that innovation

efficiency 1 is no less important (

inputs into meaningful outputs and increasing the productivity of its outputs by applying innovation, then pouring more money either into R&D or into education and science might not resolve the problem. Different countries have different approaches to transforming innovation inputs (education, investment in innovation, innovation activities at the firm level, etc.) into innovation outputs (firm turnover coming from new products, employment in high-tech sectors, patents, trademarks, designs etc.) and policy responses should thus be different as well

INNO-Metrics 2008

). If a country has trouble transforming its

(

Hollanders and Esser 2007

).

Based on these differences, the EC’s policy recommendations are either concentrated on increasing inputs if the country already has a high level of innovation efficiency (like Germany or Luxembourg) or increasing innovation efficiency if this level is low (for example in Poland, Greece or Hungary). There are also countries that lag behind in innovation efficiency only in certain areas, for example the UK has low efficiency of intellectual property outputs and needs improvements specifically in this area, while Norway and Spain should improve their efficiency

see Hollanders and Esser 2007 ).
see Hollanders and Esser 2007
).

in the application of innovations (

According to the EIS, EU countries are divided into several groups depending on their performance in innovation over the last five years (Figure 1 in Addendum). This classification is based on the Summary Innovation Index (SII), which consists of 25 innovation indicators grouped into five dimensions: (1) innovation drivers; (2) knowledge creation; (3) innovation and entrepreneurship; (4) applications; and (5) intellectual property. As well as data from the 27 member states, this scoreboard also includes data on other developed economies, such as the US, Japan, Canada, Australia, Israel, Iceland, Norway, Switzerland, and the EU candidate countries (Croatia and Turkey).

):

These countries are split into four groups 2 depending on their SII score (

-

-

INNO-Metrics 2008

innovation leaders: Sweden, Switzerland, Finland, Israel, Denmark, Japan, Germany, the UK and the USA;

innovation followers: Luxembourg, Iceland, Ireland, Austria, the Netherlands, France, Belgium and Canada;

- -
-
-

moderate innovators: Estonia, Australia, Norway, Czech Republic, Slovenia, Italy, Cyprus and Spain; and

catching-up countries: Malta, Lithuania, Hungary, Greece, Portugal, Slovakia, Poland, Croatia, Bulgaria, Latvia and Romania.

One important trend in the SII over the last 5 years is that there is a gradual convergence between different groups of countries, and the gap between innovation leaders and moderate innovators/catching-up countries is reducing. This is because the catching-up countries have the highest dynamics of SII growth and there is some progress in moderate innovators while the innovation leaders and followers are effectively treading water.

1 Innovation efficiency is the ability of firms to translate innovation inputs into innovation outputs. The concept of innovation efficiency is used in the EIS and defined as the ratio between the composite index for inputs and outputs, assuming linear relationships between them. 2 Turkey is not included as it performs very lowly on all indicators and represents a separate cluster of under-performers

According to the EIS, there is also another challenge which requires immediate action from member states and the EC. Innovation and research activities have traditionally been stronger in the manufacturing sector, which has also spurred policies targeted at increasing the innovativeness of manufactured goods. Innovations from the manufacturing sector were also often used in services. Consequently most of the data which is used for analysing the level of innovativeness in the EU covers the industrial sector and pays considerably less attention to service sectors. For example, until recently most of the data in the Community Innovation Survey, (the most important company-level source of information on innovation in the EU) was about manufacturing, as it was designed to measure innovation in this sector. Yet the importance of services, especially knowledge-intensive business services (KIBS) 3 , for the performance of national economies is already large and is growing continuously. In 2004, services contributed 40 per cent of all employment in the EU25 4 and 46 per cent of all value added in the EU25, and the share of KIBS in value added grew by 6.8 per cent from 1999 to

2004 (

three-quarters of the increase in national productivity since 1995 (

Eurostat 2007
Eurostat 2007

INNO-Metrics 2008

). This is a global trend: in the US, for example, services contributed

).

Bosworth and Triplett 2007

There are also a growing number of innovations which are services-specific, for example in the areas of logistics, software, etc.

There are also distinctive differences in sector innovations across the EU countries: evidence from the CIS and the EIS suggests that the innovation performance of several new member states in services is much higher than in overall innovation. More developed countriesinnovative performance is still stronger in manufacturing, which is already not enough to achieve a high overall level of innovativeness of the economy where the share of manufacturing is continuing to fall. Hence if new member states continue their existing positive dynamics in service innovation, in the mid-term perspective their overall level of innovation might catch up with the old member states which are better at innovation in other sectors. In any case, there is a strong need for policies aimed at promoting and nurturing innovation in services, especially KIBS. This is also confirmed by the opinions of managers of service companies (from the CIS), who are more concerned than their peers in the manufacturing sector with inadequate intellectual property regimes, poor access to public science and the

lack of financial support (

). The EC is thus trying to focus its efforts on promoting

this policy area as a high priority for community and national action.

area as a high priority for community and national action. Policy responses There has been substantial

Policy responses

There has been substantial progress towards achieving national and community targets on innovation and research policies 5 , which are an integral part of the Lisbon Strategy, but this is still not sufficient to meet the final goal. Furthermore, progress has been patchy since countries that are at different stages of integration into European governance structures and the Single Market have responded differently to their obligations.

3 KIBS includes Computer and related activities, Research and development, Architectural and engineering activities and consultancy, and Technical testing and analysis

4

EU25 all EU member states except Romania and Bulgaria

5 Research policy is predominantly directed at attracting more investments into R&D, including from the private sector, while innovation policy aims to enhance the capacity to produce and commercialise innovations and create the right business environment for the diffusion and adoption of new technologies (EC 2007)

The picture becomes even less optimistic in the light of the recent global financial crisis, which is leading most of the developed economies of the West into an economic slowdown with the potential of recession. This means that there will be less public funding available, and meeting the target for R&D spending will be even more challenging, especially for those states which are lagging furthest behind (Table 1). Some EU states, such as Portugal, Latvia and Denmark, have nonetheless committed themselves to increase R&D spending despite these financial constraints, while others have not made the clear budget commitments which would be

necessary to meet the 2010 target ( EC 2007 ). Most member states have developed
necessary to meet the 2010 target (
EC 2007
).
Most member states have developed coherent innovation strategies in line with their
obligations in the National Reform Programmes 2005-2008. They are also changing
governance structures in order to create more integrated and coherent research and
innovation policies, engaging a wider circle of sector government agencies and social
stakeholders. Some countries progressed well in the area of using public procurement policies
to stimulate greater innovation (e.g. the Netherlands and Lithuania), or even to promote an
environmentally-friendly procurement system through innovation (e.g. Greece). In turn, the EC
is in the process of completing a handbook which will guide member states on how to use
public procurement rules to stimulate innovation (
EC 2007
). Most member states made great
efforts to simplify access for businesses to domestic and international capital, especially risk
capital. This is particularly important for new member states. The EC has also amended its
State Aid Guidelines for risk capital in order to simplify access to finances.
Simplification of the legal system in the area of intellectual property rights (IPR) has been
identified as one of the main priorities of revamped Lisbon Strategy, and some member states,
in particular Finland, Belgium, the Netherlands, and Latvia, have achieved good progress in
this area (
EC 2007
). Others are still lagging behind, especially in areas such as accessing
university inventions and strengthening universities’ capacity in patenting. The UK is one of
the countries which face big challenges in this area. At the same time, the EC needs to do
more to create a more coherent and harmonious environment for IPR across the Union in
order to promote greater exchange of ideas and cross-fertilisation.
It is important to look at the regional aspects of innovation policies and their impact in different
countries. There was definitely more co-ordination between national and regional innovation
policies across the EU over the recent years. More localised approach to stimulate innovative
businesses was strengthened by newly introduced community instrument called JEREMIE
(Joint European Resources for Micro to medium Enterprises) funded jointly by the EC and
European Investment Fund. Most EU member states have also developed national
instruments aimed at closing the technological gap between regions by bringing together
universities, research institutions and businesses – either in the form of technological poles

(i.e. science cities, science parks), networks, incubators or clusters (

have genuinely regional innovation policies or systems, rather concentrating on small-scale reactive (rather than proactive) measures to complement the national agenda. There is also not enough cross-border innovation collaboration, which will be essential if the EU is to be truly united in achieving high innovation productivity and efficiency.

). Yet very few

EC 2007
EC 2007

In general, there are three main types of regional innovation system (

grassroots system where innovation is generated and organised locally and where finances

Cooke 2004

): (1) a

and competences are diffused locally without much national and regional intrusion. This system is typical for Italy; (2) a network system where there is close interaction between the tiers of government and different sectors (business, government, research), shared competences and a good mixture of exploration and exploitation innovation activities. Germany is one of the best examples of this system; and (3) a dirigiste system where innovation occurs as a product of central government policy, funding is centrally driven, and research competences are linked to the needs of large companies whose sphere of interest expands beyond the region’s borders. France is a good example of such system.

In all of the above systems, national governments have attempted to create local or regional growth poles for research and innovation which would promote scientific and research excellence, lead to higher rates of science commercialisation and attract both domestic and foreign investment. The Sophia Antipolis science city in the Alpes-Maritimes region of France already mentioned above is an example of long-term national policy aimed at decentralising the research and innovation capacities. Established around a newly-created university, this science city after many years of targeted state and regional support has achieved recognition of a genuine innovation pole from both local and especially foreign businesses. It is not only financial incentives which now attract here the highest amount of foreign direct investment in R&D among French regions. A large number of solid innovative companies from around the globe, mainly specialising in ICT, environmental and life sciences, satellite navigation and service innovations, making a base there are also drawn by the richness of the innovative milieu and the proximity of like-minded businesses.

milieu and the proximity of like-minded businesses. Germany has created its own science cities initiative, but

Germany has created its own science cities initiative, but on a very different, purely competitive basis. Since 2004, the German Science Foundation has selected a ‘City of Science’ each year a city or town which submits the most convincing bid to use their potential in science, research and technology to full capacity, to inspire the regional public with science and to forge links between science, economy, culture and the municipality. The financial support received by the winner is rather small compared to other available resources in R&D, but is effective since the process spurs partnership between research institutions, businesses and local authorities who must collaborate effectively to develop and implement the proposal. This creates a base for further partnership, and after the annual ‘term’ cities are usually well-prepared to extend their innovation activities by tapping into public (mainly from the Länder) and private sector money. Among the cities and towns which have so far won the title of science city are Bremen, Dresden, Magdeburg and Jena.

money. Among the cities and towns which have so far won the title of science city

There are very few cases of trans-border collaborative networks in the EU aimed at enhancing the economic growth of the area through greater emphasis on innovation and research. The EC is trying to stimulate more such networks to be established across the Union, but the process is far from straight-forward. One of the most successful examples is the Meuse Rhine Triangle (MRT) a joint initiative of four regional development agencies from Germany, Belgium and the Netherlands. Building upon its high education and research potential (there are seven universities in the area), its industrial past and innovative present, its extensive transport infrastructure and its prime location in relation to big consumer markets, the MRT has managed to attract a substantial amount of domestic and foreign investment and now houses many large innovative companies in sectors such as automotive industries, life sciences, ICT and logistics. The MRT receives funding and support both from national and regional governments and from the EU.

The MRT is a great example where several nearby cities/regions with similar specialisation and research profiles have united their efforts to create more ambitious strategy and facilities in order to attract a greater number of innovative businesses and strengthen the development of all partner regions. There is also great potential for developing cross-national networks between regions/cities located at some distance from each other but specialising in the same area. There are already some initiatives in this sphere, for example the Networks of Excellence introduced in the EU Sixth Framework Programme.

Conclusions

introduced in the EU Sixth Framework Programme. Conclusions There are many examples in the history of

There are many examples in the history of research and innovation policy across Europe and around the globe when governments have used regionally targeted initiatives to address local economic problems, narrow regional gaps in technology or spur economic growth by stimulating more innovative activities. There are various different stimuli and drivers behind initiatives such as science cities or technoparks and there are different innovation systems underpinning these policy instruments. Yet the objective is often similar: to reach higher levels of prosperity and productivity by creating the most beneficial environment for collaboration between universities, research institutes and businesses, maximising the gains for the local economy from greater commercialisation of innovation by strengthening collaboration with local and regional government agencies, and by attracting more investment, both domestic and foreign.

There are also lessons to be learnt from the various approaches employed in different countries, though none of them can simply be taken as a model for replication since local conditions and the specific collaborative links between core stakeholders will differ from place to place. Nonetheless, science cities in the UK can learn lessons from elsewhere in the EU and further away, and they should also make the best possible use of the policy framework of Lisbon Strategy for Growth and Jobs. Through closer engagement with the Government, the EC or other likeminded science parks in Europe, the UK’s science cities could tap into greater resources and more effective instruments which would contribute to the implementation of local projects and make their capacities more appealing to domestic and foreign entrepreneurs.

to the implementation of local projects and make their capacities more appealing to domestic and foreign

Central government and regional/local authorities in the UK should work together to create optimal regulatory and investment regimes to stimulate greater innovativeness in manufacturing and especially in services, thus securing higher productivity rates and greater economic prosperity. The diffusion of innovative and research activities outside the Golden Triangle is a positive and necessary step, but this should be seen as a way to stimulate greater R&D investment from business (currently insufficient when compared to other EU countries, the US or Japan) rather than dragging cities into counterproductive competition and rivalry for scarce state investment. Indeed, science cities should try to engage the business community as much as possible and should make the most of the opportunities provided by the European Union: community policy instruments, Single Market initiatives, networks of excellence etc. While the EU may not yet be the most competitive knowledge-based economy in the world, over the mid- to longer term the prospects for EU innovation are strong, particularly if there is continued integration in science and research creating an effective single environment for innovation and growth.

References

1. Barysch K, Tilford S and Wanlin A (2007) ‘The Lisbon scorecard VII. Will globalization leave Europe stranded?’ CER report - London

2. Bosworth B P, Triplett J (2007) ‘The early 21st Century US productivity expansion is still in services’ International Productivity Monitor, No. 14, pp 3-19

3. Castro Coelho M, Mrinska O, Reed H (2008) ‘Structural economic change in the European Union: winners, losers and public policy options’ ippr paper - London

4. Cooke P (2006) ‘Regional Innovation Systems as Public Goods’ UNIDO Working paper Vienna

Systems as Public Goods’ UNIDO Working paper – Vienna 5. Cooke P, Heidenreich M and Braczyk

5. Cooke P, Heidenreich M and Braczyk H J (eds.) (2004) Regional Innovation Systems2nd edition - London: Routledge

6. European Commission (2007) ‘Implementing the Renewed Lisbon Strategy for Growth and Jobs. A Year of Delivery’ Communication Luxembourg

7. European Commission (2005) COM(2005) 24 ‘Working together for growth and jobs A new start for the Lisbon Strategy’ Communication Brussels

8. Eurostat 2007 ‘Community Innovation Statistics’ Statistics in Focus. Science and Technology 116/2007

9. Hollanders H, Esser F C (2007) ‘Measuring innovation efficiency’ INNO-Metrics Thematic paper available at http://www.proinno-

10. INNO-Metrics (2008) ‘European Innovation Scoreboard 2007. Comparative analysis of innovation performance’ PRO INNO Europe paper No 6 – available at

11.

Kitagawa F (2007) ‘The Regionalisation of science and innovation governance in Japan’ Regional Studies, Volume 41, pp.1099-1114

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Kok W (2004) ‘Facing the challenges. The Lisbon strategy for growth and employment’. Report to the European Commission from High level Group available at http://europa.eu.int/comm/lisbon_strategy/index_en.html

Table 1: Spending on R&D in EU countries, 2005

Country GERD as % of GDP Average annual growth of GERD, %, BERD, % of
Country
GERD as % of GDP
Average annual
growth of GERD, %,
BERD, % of total
R&D expenditure
1995-2005
Sweden
3.82*
-0.3
74.7
Finland
3.45*
4.4
62.2
Germany
2.51
2.1
27.2
Austria
2.45
7.2
54.5
Denmark
2.43
5.9
57
France
2.12
3.6
44.2
Belgium
1.83
2.4
57.5
UK
1.76
1.3
49.0
Netherlands
1.72
3.4
26.3
Slovenia
1.59
6.3
54.1
Lithuania
1.57
17.0
16.4
Luxembourg
1.57
5.3
42.6
Czech Republic
1.54
10.3
50.5
Ireland
1.32
10.9
44.0
Spain
1.16
11.8
24.8
Estonia
1.14
22.2
45.8
Italy
1.10
5.8
na
Hungary
1.00
15.5
63.4
Portugal
0.81
3.4
20.8
Latvia
0.69
5.6
36.6
Greece
0.57
4.3
8.0
Poland
0.56
-1.2
65.4
Malta
0.55
na
65.3
Slovakia
0.49
5.1
29.0
Bulgaria
0.48
na
58.7

Romania

0.46

na

34.3

Cyprus

0.42

17.3

30.3

EU27

1.84

3.4**

39.4

*above Lisbon-2010 threshold, **EU25, na data not available

Source: Eurostat

EU27 1.84 3.4** 39.4 *above Lisbon-2010 threshold, **EU25, na – data not available Source: Eurostat 13