A Short History of Science (and Innovation) Policy

EARTO Annual Conference 7-8 May 2012

What is Science Policy?

The deliberate attempt of a government to finance, encourage and deploy the scientific resources of the country trained research workers, laboratories, equipment in the best interests of national welfare
Poole and Andrews (1972)

How Old is Science Policy

UK

1660 Founding of the Royal Society 1675 Founding of Royal Observatory, Greenwich
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The French and Germans are Ahead!

UK 1830-1860

1830 Charles Babbage wrote that England was in decline compared to France and Germany 1831 Founding of the British Association for the Advancement of Science 1832 Founding of the Geological Survey 1841 Founding of the Museum of Economic Geology 1843 Founding of the Inland Revenue Laboratory (later the Laboratory of the Government Chemist) 1845-51 Founding of the science colleges (Chemistry and Mines) that later became Imperial College of Science and Technology 1850 Royal Society awarded an annual grant of 1,000 to encourage the pursuit of research (with almost 1,000 scientists receiving grants between 1850 and 1914) 1853 Founding of the Science and Art Department within the Ministry responsible for education
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The French and Germans are Still Ahead!

UK 1860-1890

1867 Lyon Playfair commented on the declining international standing of Britain after the Paris International Exhibition 1869 The founding of Nature and the movement for the Endowment of Research 1868-1871 Pressure from the Select Committee on Scientific Instruction, the Committee of the British Association and the Devonshire Commission for a restructuring of scientific organisation, research and teaching, with state-run laboratories, increased grants for private scientists and a Ministry of Science and Education assisted by a Council of Science but little official response 1860-1890 Grants from the Royal Society for individual researchers; grants for international expeditions; funding for utilitarian research in various government ministries and agencies 1861-1887 The number of science pupils examined grew from 1,300 to 100,000
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The Germans are Definitely Ahead

UK 1890-1914

1895 Founding of the Physikalische-Technische Reichsanstalt at Charlottenberg 1896 E. E. Williams's Made in Germany and fear of German efficiency 1899 Founding of the National Physical Laboratory 1905 Founding of the British Science Guild 1909 Founding of the Development Fund to develop agricultural resources and the setting up of 14 research institutions and centres by 1914 1911 The funding of medical research as a consequence of the National Insurance Act (introduced because of unfavourable comparisons with social insurance schemes on the continent)
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Science is Important but not Imperative

UK 1914-1939

1914 Severe shortages of scientists and engineers and dependence on German drugs, dyestuffs and optical equipment recognised 1915 Creation of the Committee of the Privy Council for Scientific and Industrial Research, which led to the establishment of the Million Fund to encourage the setting up of industrial research associations 1916 Founding of the Department of Scientific and Industrial Research to administer:
Its own laboratories (15 eventually) The Research Association Scheme (20 established before 1939) Research grants to postgraduates

1918 The Haldane Principle separated research from political control and cemented the of independent Research Councils 1920-26 Severe budget cuts for research 1920s-30s Increasing orientation of scientific effort towards economic and societal goals, including development, and growing support on the left for planning in science
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Science is Imperative During Wartime

1939-1945

Radar Computers Cryptography Jet engines Napalm DDT Mass production of penicillin Widespread diffusion of plastics Massive R&D laboratories Atomic bombs
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The Russians are Coming!

The Military Industrial Complex Mission-oriented Research Sputnik The Space Race Star Wars

Science for Peace

Nuclear Energy Information and Communications Technologies Industrial R&D and government support The cost of Big Science Increased demand for science planning

The 60s Explosion

1960 Roger Ockrent, Chair of the OEECs Executive Committee, remarked that science policy was inherently part of educational policy and hence inappropriate for an economic organisation; it was a matter for UNESCO 1961 An OECD High Level Expert Group chaired by Pierre Piganiol called for national structures to review and allocate resources and for a meeting of Ministers responsible for science 1963 At the first such meeting, four countries had Ministries for or of science 1965 Three quarters of the countries in attendance had Ministries of science 1968 Several science Ministers were accompanied by economic Ministers Widespread recognition of the impacts of science, both positive and negative, and the need for some kind of science policy
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Science Policy: Theory and Practice

Arnold (1999)

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20 Insights from Science Policy Studies

From individual entrepreneur to corporate innovator From laissez faire to government intervention From 2 factors of production to 3 From single division to multidivisional efforts From technology adoption to innovation diffusion From science push to demand pull? From single factor to multi-factor explanations of innovation From static to dynamic model of innovation From linear model to interactive chain-link model From one innovation process to several sector-specific types
11 Martin(2009)

From neo-classical to evolutionary economics From neo-classical to new growth theory From optimising firm to resource-based view of the firm From individual actors to systems of innovation From market failure to system failure From one to two faces of R&D From Mode 1 to Mode 2 From single-technology to multitechnology firms From closed to open innovation

From national to multi-level systems of innovation

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From Individual Actors to Systems of Innovation

Demand Consumers (final demand) Producers (intermediate demand)

Economic Environment Financial environment; taxation and incentives; propensity to innovation and entrepreneurship; mobility ...

Industrial System Large companies Intermediaries Research institutes Brokers

Education and Research System Professional education and training

Political System

Government

Mature SMEs

Higher education and research

R&I policies

New, technologybased firms

The potential reach of public policies ...

Framework Conditions

Public sector research

Governance

Banking, venture capital

IPR and information

Innovation and business support

Standards and norms

Infrastructure

Arnold and Kuhlman (2001)

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From Science Policy to Innovation Policy

An R&D and Innovation Policy Mix can be defined as that set of government policies which, by design or fortune, has direct or indirect impacts on the development of an R&D and innovation system.

Guy et al (2009)

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A Simple Policy Domain Model

Educated Populace Human Resources International Level National Level Regional Level

Knowledge Users
New Researchers

Finance

Economic and Market Development

Market Demand Innovative Goods and Services

Research Results

Mobility

Governance

Knowledge Creators
Science Base

Innovation Results Research Results, IPR Contracts, Finance Collaborative R&D Mobility

Business R&D and Innovation

Public Sector

Private Sector

Finance

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Policy Mix Trends

Policy mixes with an impact on the performance of the R&D and innovation system and on R&D investment levels are largely the result of incremental policy accretion rather than the result of conscious and deliberate efforts to construct complementary sets of policies. This situation is slowly changing as policymakers become more familiar with policy mix concepts and deliberate efforts are made to orchestrate joined-up policymaking. Many of these efforts to improve policy coherence take the form of network reforms, i.e. efforts to increase the degree of connectivity and communication between the different elements of governance structures. Often these take place alongside other forms of changes in governance, e.g. institutional reforms driven by a need to rationalise governance structures and introduce clearer sets of responsibilities; and instrumental reforms involving changes in the number and range of instruments used to support policy. 15

The majority of instruments within existing R&D and innovation policy mixes are conventional R&D and innovation policy instruments with direct rather than indirect impacts on R&D and innovation system performance, though there is increasing interest in promoting coherence between these instruments and policy instruments promoting market development and nurturing the supply of human resources. The largest gaps in terms of the deployment of policy instruments concern demand-side instruments that directly stimulate the demand for R&D and innovation. Some countries are actively seeking to formulate and implement R&D and innovation friendly procurement policies and to use public sector instruments to develop lead markets, and many other countries are showing an interest in these developments, but successful examples are still thin on the ground.
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The policy mixes in existence in different countries are all characterised by a complex set of balances between different types of instrument. In some countries, for example, fiscal instruments for the support of R&D predominate over direct instruments, whereas in others they are not used at all. Another example concerns the balance between research funds awarded to institutions and those won competitively by individual researchers. In each setting, a broad range of contextual factors influence how the advantages and disadvantages of different instruments are weighed and eventual balances struck, with few observable patterns linking contexts and balances. Although there is potential scope for positive, neutral and negative interactions between different policy instruments (e.g. between direct R&D support instruments and indirect fiscal R&D support schemes), there are few instances where distinctly negative impacts can be observed.
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Very few countries or regions have clearly articulated high-level goals and overarching strategies that are tightly linked or highly coordinated with the goals and strategies of individual R&D and innovation-related ministries and agencies. Often these appear to be formulated in relative isolation from each other, though there are signs of change, with a number of countries constituting high-level communication and coordination mechanisms to help improve policy coherence. Policy mixes serve the needs of different sets of actors in different settings and the balance of support for these different groupings is often dictated by their comparative political power. Support for university researchers, academies of science and research institutions is dominant, for example, when there is a weak industrial base with very little political muscle.
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There is some indication, however, that the foci of policy mixes are shifting in some settings away from foci determined by the relative strength of different actor groups and more towards foci determined by assessments of higher level needs (e.g. the need to build up a weak industrial base rather than continue to focus support on the science base) or socio-economic challenges (e.g. the need to focus support on R&D and innovation related to societal challenges such as climate change). The foci of policy mixes are also determined to a large extent by considerations of starting points, end points and realistic routes linking them. Countries with weakly developed R&D and innovation systems and scarce capital and human resources often cannot afford to tackle all weaknesses at the same time, thus necessitating a sequential rather than parallel focus on efforts to rectify these weaknesses. Some countries in this position, for example, have chosen to focus initially on efforts to support the development of the science base, complementing these efforts with policies aimed at the business R&D and innovation domain only when the science base is deemed 19 sufficiently strong.

In contrast, countries with strongly developed R&D and innovation systems tend to adopt parallel fine-tuning strategies designed to build on existing strengths and rectify modest weaknesses along a broad front. In terms of routes capable of raising R&D investment levels, these variously involve focusing on different combinations of ways of raising public and private sector expenditure, e.g. via attempts to raise levels amongst existing R&D performers; efforts to create new R&D performing start-ups; or efforts to attract R&D performers from abroad etc. Across the EU, various combinations are used in different settings, though few if any countries appear to have deliberately weighed up the relative advantages of the different possible combinations.

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In terms of policy formulation processes, although there are signs that the use of inclusive consultation exercises is becoming more widespread, these are still generally limited to narrow stakeholder groups rather than the broader sets of stakeholders affected by comprehensive policy mixes spanning a number of related policy domains. The use of strategic intelligence generated by strategic policy intelligence tools (SPITs) such as foresight exercises, benchmarking reviews and comprehensive monitoring and evaluation schemes is also increasing, though reliance on these tools varies dramatically across the EU, with human resource constraints limiting their use in some of the newer or weaker Member States. The increased use of these instruments corresponds to a rise in interest in evidence-based policymaking, though commitment-based policymaking still remains the norm.

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The Rationale for the Innovation Union

Five key premises

Research and innovation are important for economic development and the resolution of major societal challenges The current performance of the research and innovation system needs to improve Underperformance is consequence of weaknesses in the constituent parts of research and innovation systems and the way these link together New challenges are likely to exacerbate this situation Policy responses are needed at EU level 22

Key Weaknesses

Underinvestment in research and innovation System component weaknesses System linkage weaknesses System governance weaknesses

Human Resources Finance

Users and Markets

Science Base Industrial R&D

Industrial Innovation

To improve overall system performance, all these deficiencies need to be tackled simultaneously
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New Challenges

Overall performance is likely to be affected in future by a number of new challenges These include:
The impact of the financial crisis The sheer scale of the societal challenges that confront us Increased globalisation, agglomeration and competition from countries such as China and India Changes in the way that innovation is conducted (open innovation, user-centred innovation, non-technological innovation, social innovation etc.) and where it occurs (e.g. in the service sector as well as the manufacturing sector)

The implication of all these trends and new forms of innovation is that the scope of innovation policy has to become broader
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Policy Responses at EU Level

Policies aimed at improving performance at Member State level

Mutual learning and benchmarking concerning policy mixes Smart specialisation overviews Shared problems (e.g. lack of risk capital, low levels of entrepreneurship, weak research-innovation links)

Improving performance at EU level

Focusing on major societal challenges and win-win situations Pooling resources Reducing fragmentation Removing obstacles Enhancing mobility Research and innovation friendly regulatory frameworks Common standards Coherent packages of supply and demand instruments International cooperation
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The Six Action Areas of the Innovation Union Communication

Strengthening the knowledge base and reducing fragmentation Getting good ideas to market Maximising social and territorial cohesion Pooling forces to achieve breakthroughs: European Innovation Partnerships Leveraging our policies externally Making it happen
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OECD Innovation Strategy

Old Wine in New Bottles? or Singing from the same hymn sheet to a global audience? and Stressing the importance of common, standardised data collection and analysis in order to improve our understanding of innovation systems and the policies needed to improve their performance
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Next Steps

Policy Practice
Better application of existing science policy knowledge (e.g. Martins 20 insights) to policy formulation and implementation, e.g. direct and indirect support measures, either singly or in combination, geared to groups of innovation actors (e.g. regional/sectoral/innovation value chain clusters) rather than different institutional types (SMEs, Large Firms, HEIs, PROs, RTOs etc.) => Smart Specialisation More experimentation, especially on a collective, international basis

Policy Studies
Greater focus on consolidated ways of measuring and understanding the impact of scientific activities and polices on economic and social welfare, and of exploring new sources of growth Greater focus on understanding STI interactions and knowledge flows within innovation systems, especially global innovation systems Greater focus on ways of mobilising science and innovation towards the resolution of global societal problems
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CSTP PWB 2013-2014

Economic and Societal Impacts

Developing new tools and techniques to analyse the economic and societal impacts of science and technology The role and impact of science and technology policies The potential of emerging, converging and enabling technologies

STI Interactions
Understanding the changing landscape of knowledge sharing mechanisms New forms of intellectual property management for fostering innovation Opportunities and options for public-private partnerships

Societal Challenges
Science, technology, innovation (STI) and Green Growth STI and Healthy Ageing Towards an STI for Development strategy
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