Prepared by Lauri Tammiste

1
"Building innovation capacity Case of Estonia."

• Prepared by Lauri Tammiste
• Presented by Kitty Kubo
• from
• Ministry of Economic Affairs and Communications
  of Estonia

2
Agenda

• Policy intelligence needs
• Context for raising innovation and policy-making
  capacities
• Practices so far
• Main conclusions and future outlooks

3
For good and sound policymaking we need to know

• If there is a need for certain policy measure,
  what are the good international practices, if and
  what needs to be changed in order to implement
  these pracitces in Estonia gt FEASIBILITY STUDIES
• If the policy measures have been effiecient and
  effective, whether the goals set have been
  achieved or not and if not then why gt MID-TERM
  AND EX-POST EVALUATIONS

4
For good and sound policymaking we need to know

• What have been the (annual) trends and
  developments in RD and innovation activities in
  Estonian economic sectors and clusters, what have
  been the main developments in competitiveness and
  export capacities, gt ANALYSIS OF MACRO AND
  MICRODATA
• How are innovation processes changing in
  companies, what are the new business models, what
  are the consequences of globalisation, how do
  these developments mean affect the role of the
  government in promoting innovation and
  competitiveness etc gt ACADEMIC RESEARCH

5
For good and sound policymaking we need to know

• Which technologies are the fastest growing, which
  are the niches in which Estonia could succeed,
  what are the most important long-term
  socio-economic challenges that need to be tackled
  by Estonian RD and innovation policy gt
  FORESIGHT AND TECHNOLOGY ASSESMENT
• So we are talking about very large amount of
  information that
• needs to be created but also absorbed how to
  manage that in a
• small country?

6
Important to bear in mind the context

• Innovation policy and innovation policy research
  has quite short history in Estonia and it has
  only recently become a hot topic
• In 1990ties focus on macroeconomic reforms (price
  and trade liberalisation etc) overcoming the
  soviet legacy and becoming a functional market
  economy
• Late 1990ties and early 2000 main focus on
  joining EU and NATO with its possible impacts
• No demand for the innovation policy and
  respective research
• No correlation between economic success of the
  past decade and innovation/innovation policy

7
Political attention focuses usually at most
pressing short-term issues
Source Statistical Office of Estonia
8
REGRESS
PROGRESS
Investment driven
Innovation driven
Resource driven
Wealth driven

• significant domestic RD
• active competition
• human capital basis of competitiveness
• differentiated products
• wide contents of services

• exploitation of present wealth in expense of
  future
• little motivation for change, entrepreneurship or
  innovation

• ability willingness
• to invest aggresively
• application of new technologies
• economies of scale

• inexpensive basic resources
• little production investments
• technology import
• few links to end users

Adapted from Porter (1991).
9
Practices of meeting the policy-intelligence
needs so far (1)

• In 2000 report by H.Hernesniemi served as a
  starting point for the Estonian innovation policy
  because it
• Introduced NIS thinking and provided the first
  NIS based analysis of Estonian system
• Helped to establish dedicated unit - Technology
  and Innovation Division - at the ministry
• Initiated the creation of policy implementation
  unit - Estonian Technology Agency and reform of
  national RD Council
• Showed the power of independent studies in
  coupling problems, policy proposal and politics
  and fortunately the policy window was open!

10
Estonian RD and innovation governance system
Policy
Agenda
Estonian Development Fund
design
setting
P
arliament
P
arliament
Government
Government
RD Policy Council
RD Policy Council
Innovation Policy Commission
RD Policy Commission
Innovation Policy Commission
RD Policy Commission
Ministry of Economic Affairs
Ministry of Education and
Ministry of Economic Affairs
Ministry of Education and
P
rogramme
Policy
and Communications
Research
and Communications
Research
design
design
Science Competence Council
Science Competence Council
Academy of Sciences
Academy of Sciences
P
rogramme
Policy
administra
-
implementation
-
Enterprise Estonia
KREDEX
Science Foundation
Archimedes Foundation
Enterprise Estonia
KREDEX
Science Foundation
Archimedes Foundation
tion
Universities
Competence Centres
Projects
Projects
RD Institutes
Businesses
Universities
RD Institutes
Firms
VC
Competence Centres
11
Practices of meeting the policy-intelligence
needs so far (2)

• In 2001 first feasibility studies by MoEAC for
  new policy measures
• In 2002 the launch of publication series
  Innovation Studies creating an innovative
  Estonia. During 2001-2007 on average 2-4 studies
  per year
• in 2004 the launch of innovation awareness
  program to support the dissemination of knowledge
  about innovation among opinion leaders,
  entrepreneurs, students etc.
• Because of relative youth of the NIS, system
  level studies quite often

12
Main conclusion form the experiences so far (1)

• limited competences available at Estonian
  innovation policy analysis and consultation
  market experience and knowledge from
  implementation of innovation policy has been
  scarce as well gt heavy reliance on foreign
  experts
• limited resources urgent short-term policy
  challenges
• gt policy studies financed by MoEAC focusing
  mainly on short-term issues

13
Main conclusion form the experiences so far (2)

• Academic funding scarce, backward looking (based
  on past success) rather than supportive of
  emergence of new themes gt lack of critical mass
  and international visibility in Estonian
  innovation research community
• - big part of policy learning is done through
  various international networks gt risk of
  europeanisation and losing sight of Estonian
  specific needs

14
New initiatives under way

• Estonian Development Fund became operational in
  2007, two pillars early stage seed/venture
  capital investments into technology based
  start-ups and substantial resources for the
  development of shared vision to help to create
  basis for smarter and more effective long-term
  policies and investments
• - Innovation studies program - in 2008 MoEAC
  will launch a program for providing project
  funding for more academic research projects in
  order to increase the competitiveness and size of
  innovation research community in Estonia and
  create literacy on emerging issues

15
Overall conclusion
We seem to be close to removing the obvious white
spots on the map for policy intelligence
creation, but we are still quite far from having
over-coming various governance, coordination,
dissemination, absorbtion etc problems. Advice
and comments for improvement are most welcomed
(but treated with Estonian scepticism and
stubborness)!
16
Thank You!