Innovation and Competitiveness clusters Policy in France

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Innovation and Competitiveness clusters
Policyin France

• Alain GRIOT
• TUSIAD SEMINAR
• Istanbul January 6 - 2009

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French industrial situation

• Too small number of SMEs
• Too large proportion of very small enterprises
  (more than 85 of companies have less than 10
  people)
• low specialization of industry
• small and medium enterprises (less than 500
  staff) are representing only 16 (2004) of
  industrial research expenses
• Strategic positioning
• to fight against low wages countries, the
  solution is to increase competitiveness of the
  economy by promoting breakdown technologies,
  therefore to encourage innovation..

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French innovation situation

• The aim increase research and development
  expenses in companies in order to reach the
  Lisbon agenda objectives 3 GDP for RD in 2010.
• But
• French SMEs are underperforming regarding their
  European competitors
• 19,7 of French SMEs are investing in RD in
  house (32 in Germany and 30 in Sweden)
• 35,9 of French SMEs are investing in non
  technologic innovation (53,9 in Germany and 44
  in Sweden).
• To increase the industrial RD expenses is
  mandatory
• Lisbon objective 3 of GDP in 2010 , French
  situation 2,11 (European Innovation Scoreboard
  2007)
• French Private expenses in RD are too small RD
  ( 1,32 of GDP, vs1,76 in Germany, 1,87 in
  the states et 2,40 in Japan)
• 0,1 increase in RD intensity leads to the
  creation of 0,3 to 0,4 regarding the GDP per
  inhabitant   (European Commission, 2005)

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The tools for a performing innovation policy

• The innovation policy is a mix of
• tax relieve measures for innovative enterprises
  and investors
• Direct financing for projects
• Involvement of all level of public authorities
  the central government, the regional
  authorities,

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Tax measures a main reform, the research tax
credit (CIR)

• CIR is a tax rebate for companies investing in
  RD, with the objective to increase the private
  RD expenses
• The scheme has been ameliorated in 2008, in order
  to be more attractive for companies they can
  now
• Benefit of reduction of 30 of their expenses up
  to 100 millions euro, 5 after this threshold
• For companies investing for the first time in
  RD, the level of rebate is upgraded to 5O the
  first year of application, 40 the second year.
• The reimbursement can be immediate (and non
  during the year following the expenses) if
  companies are considered as young innovative
  enterprises or growing companies (more than 15
  growth/year)
• In 2005, 5400 companies, investing 13.5 billion
  euro in RD were benefiting of the scheme, for a
  public cost of 981 million euro.
• 40 of this amount was dedicated to companies of
  less than 50 staff
• For the coming years the estimation for the cost
  of the scheme is 3 billion euro/year.

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Performing measures for SMEs the young
innovative enterprise (JEI) and the young
university enterprise (JEU) status.

• The young innovative enterprise status
• 5 criteria of which Less than 8 years old, More
  than 15 of total expenses dedicated to RD
• Advantages
• Tax rebates
• Exemptions of social contributions for the
  employees taking part in research
• A significant result (2006)
• 1700 companies,
• staff concerned 9600
• budgetary cost for the State 92 million euro
• The Young university enterprise status
• own for more than 10 by a student ore a
  searcher,
• for the valorization of research works of high
  grade education bodies (universities, high
  schools)
• the JEU is benefiting the same advantages than
  the JEI
• The scheme started in January 2008

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Direct financing the new OSEO Agency

• January 2008 merging between two agencies AII
  and OSEO
• to give a new impulse to RD in high potential
  SMEs and allow the creation of more intermediate
  enterprises (staff between 250 and 5000) in
  breakdown technologies sectors,
• To promote the partnership in innovation projects
• To simplify the innovation financing frame, with
  a single financing point
• To offer companies an unique interlocutor all
  along their life
• A new unit has been created within OSEO
  Innovation
• Dedicated to cooperative projects
• For aid amount of up to 10 million Euros
• This unit is in charge of managing, since the
  beginning of 2009, the financing of poles de
  compétitivité projects
• The industrial strategic innovation (ISI) scheme
  allows to focus on collaborative projects
  concerning the more risky innovation

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The National Research Agency

• Under the responsibility of the ministry in
  charge of research from a structural to a
  project based research financing
• The scope to finance research projects from the
  scientific community, on the basis of call for
  tenders and with a peer evaluation of the
  projects
• A particular focus is put on private-public
  partnership and involvement of enterprises in the
  projects, with an objective of technology
  transfer and valorization of public research by
  the companies.
• Some figures
• 2005 2006 2007
• Number of projects 1 400 1 622 1 430
• selectivity 27 25 25
• Finacing amounts (ME) 539 621 607
• of SMEs 8,2 7,8 7,4
• of large companies 9,2 9,9 7,7
• Number of poles projects 330 242 282
• Amount for poles projects 199 175 191

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• THE COMPETITIVESS CLUSTER POLICY

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Policy aims

• Identifying high-potential clusters and focus
  public aids on them
• avoiding scattering of public subsidies
• Strengthening the link between research
  industry
• promoting industry-driven research programs
• developing the triple helix relationship
  between firms, research centres and higher
  education institutions
• Developing a full ecosystem
• Education, private financing (business angels,
  VC,) IP management, entrepreneurship,
  international development,

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What are they?

• A competitiveness cluster is
• a gathering of firms, research centres higher
  education institutions,
• working on joint projects (mainly RD projects)
• with a dedicated governance body (non-profit
  organization), and
• with dedicated public oversight bodies
• All  clusters  are different
• different strategies
• different priorities (outside RD)
• different organisations (1 to 10 dedicated staff)
• ...but they all have to
• define an innovation and development strategy,
  and
• implement a road-map to achieve it
• favour SMEs development
• Other priorities, depending on the cluster
• education
• recruitment
• international partnerships
• service delivery toward SMEs...
• growth financing,

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Where are they?
The Competitiveness Clusters in France. 17 are
global ones 54 are national
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Key factors of success

• Involvement of firms (as opposed to involvement
  of public authorities or to involvement of public
  research centres)
• Public authorities have to help and support, but
  not decide
• e.g. the cluster strategy must be decided by the
  cluster governance (i.e. firms)
• Each cluster needs a specific support policy (at
  local level)
• i.e. no  one size fits all  !
• All local innovation services must be
  cluster-oriented
• i.e. it may request changing pre-existing
  organizations approach
• The cluster policy must be enforced in the
  long-term
• e.g. time-to-market in RD projects is a least 2
  to 3 years
• cluster policy needs 5-10 years to get a strong
  impact

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Pôles 2.0 the second stage of the policy

• End of 2007 and early 2008 national evaluation
  conducted by Boston Consulting Group and CM
  International.
• Evaluation of both the global policy and each
  cluster individually
• Methodology of evaluation of public policy
• Dedicated means
• Consistency with other public policies (RD and
  innovation)
• Clusters selection process
• Financing support processes
• Policy management at national and local levels
• Synergy between actors
• First effects on local actors

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Pôles 2.0 the second stage of the policy

• Evaluation of each competitiveness cluster - 7
  points of scope
• Economic and international strategy
• Cluster government and animation, evolution of
  the cluster population
• RD projects and firms-public research-training
  synergy
• Territorial settlement and network strengthening,
  structural projects
• SMEs integration and new enterprises creation
• Human resources training
• Green development approach

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Pôles 2.0 the second stage of the policy

• The main conclusions of the evaluation
• At the global policy level
• Policy aims are validated
• The competitiveness clusters policy is recognized
  as successful
• Number of competitiveness clusters have created,
  during the first phase a dynamics of cooperation
  between actors of innovation (Enterprises,
  Research Centers, University)
• At the clusters level
• 39 clusters are fully in line with the aim of the
  policy
• 19 clusters have to improve some aspects of their
  operations to fulfill the objectives of the
  policy
• 13 clusters need a large reconfiguration of their
  action in order to fulfill the objectives of the
  policy.

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Pôles 2.0 the second stage of the policy

• Launched by president Sarkozy on 26th June 2008
  (the Limoges Speech)
• A new 3 years period ( 2009-2011) for growth of
  the clusters and to achieve world class clusters
• Financing by the state for innovation projects
  1.5 billion Euros for the 3 years period
• A stress on private financing involvement in the
  innovation process managed by the clusters
• A stress put on SMEs involvement in clusters
• A strengthening of contract based relationship
  between clusters and public authorities
• Strategic roadmaps
• Development of a competitive ecosystem
• Contract of objectives (to be negotiated before
  end of march 2009 and signed before the end of
  June 2009

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Fore more informationon french Competitiveness
clusters

• www.competitivite.gouv.fr
• Thank you for your attention