Report on Panel 4: The Future Financing of RTDI

1
Report on Panel 4 The Future Financing of RTDI

• Luke Georghiou
• PREST/Institute of Innovation Research,
  University of Manchester
• http//les.man.ac.uk/PREST

2
Discussants

• Dr Guy Clausse (European Investment Bank)
• Prof Albert Marouiani (Directeur du DEA
  "Macrodynamique et finance internationales")
• Prof Hassan Diab (Faculty of Engineering and
  Architecture, American University of Beirut)
• Assoc Prof Dr Necdet Saglam Dr Salim Sengel
  (Fac of Econ Admin Sciences, Anadolu
  University, Tr)
• Mr Simon Barberi (Malta Federation of
  Industries)

3
Issues

• Foresight and the use of the Neighbourhood
  Program
• As set out in the 6th Framework programme for
  Research and Technological Development (RTD), the
  EU should take forward the opening of the
  European Research Area (ERA) to integrate the
  scientific communities of the neighbouring
  countries, exploit scientific results, stimulate
  innovation and develop human resources and
  research capacities. Comm. Wider Neighbourhood
• Foresight and the use of bilateral funds such as
  MEDA
• An RDI system is created when the Research and
  Technological Development are systematically used
  to provide solutions for well identified needs by
  the society. 9th MOCO
• The 3 goal in a Mediterranean context

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3 Goal in a Mediterranean context

• Direct Measures Expert Group commented on 3
  target for cohesion and accession countries
• Both groups still face need to form clear
  national innovation policies
• Need for complementary actions to promote
  innovative culture and encourage firms into
  international innovation-demanding markets
• Intermediary targets are needed

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Selected Key Points from Panellists

• EIB Innovation 2000 Initiative marks major shift
  towards financing innovation (including RD
  education) and greater cooperation with
  Commission
• Public loans can give signals to private sources
• Pre-competitive RD is essential to increase
  technology transfer but because of very limited
  funding opportunities in Med countries a
  significant increase in public funding is needed
• Set in context of national RD policy

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Key points continued

• 3 of RD funding comes from private sector in
  Arab States
• Barrier can be cultural rather than wealth UAE
  has highest Internet usage but lowest RD/GDP
• Education policies of the universities should be
  integrated with innovation policies, and training
  on entrepreneurship and innovation should be
  given special emphasis.
• Also retain researchers and reverse brain drain
• Private sector cannot move to higher added-value
  if education investment is not made by State
  but slow process

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Micro-Foresight

• One hours brainstorming on question
• What should successful finance for RTDI in the
  Mediterranean region look like in 2010?

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Finance 2010

• Public finance used to leverage private capital
  for RTDI through suitable allocation of risk in
  partnership
• Key is cultural change fostering science
  mentality in people, investment mentality in
  firms and governance for innovation policy in
  government
• Public policies should be used to attract inward
  RTDI investment
• Identify unique selling points of countries eg
  Malta and the sea North Africa and Water
  technology?

9
2010 market pull

• Private sector will only invest in RTDI when it
  is worthwhile direct incentives have little
  impact need market leverage and favourable
  factors educated labour force and stable
  environment
• Create own markets and take advantage of EU
  market to launch innovative products
• ..in return for concrete progress demonstrating
  shared values and effective implementation of
  political, economic and institutional reforms,
  all the neighbouring countries should be offered
  the prospect of a stake in the EUs internal
  market. R.Prodi Wider Neighbourhood

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2010 infrastructure and political priority

• Lesson from EUs success stories is that finance
  needs to be directed towards building RTD
  infrastructure human and physical
• MEDA rules need to change to allow infrastructure
  investment in same way as structural funds have
  been used within EU
• National governments must give RTDI and education
  high priority
• Conditions of political and economic crisis make
  it far harder but far more important that a
  trajectory of development driven by innovation is
  launched
• To do this without foresight and evaluation is to
  fly backwards without instruments!