TPG 2.1.2

The Territorial Impact of EU R&D Policy

ECOTEC Research and Consulting; Taurus Institute;

Cardiff University; MERIT Maastricht University;

MCRIT; Politecnico di Milano

Nijmegen

11th October 2004

Co-financed by the INTERREG II ESPON Programme

TPG 2.1.2

Content

• Territorial strengths and weaknesses

• Territorial analysis of EU R&D policies

• To what extent does EU R&D Policy address identified spatial goals?

• Policy recommendations

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Territorial strengths and weaknesses

• Research, innovation and high technology “hotspots” tend to be concentrated in core areas of North West Europe (D, Nl and parts of the UK and Fr), with other strong performers in Scandinavia

• There is a long tail of less R&D and innovation-intensive areas, concentrated in Southern, Central and Eastern Europe.

• There is some evidence of regional “catch-up”, in that growth rates in lower performing regions tend to be higher.

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Data for CZ, HU, SK and LU - year 2000Data used for IE and SE are from NUTS 1Data used for BE, CY, EE, LT, LV and RO are from NUTS 0CH, MT and NO: no data

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Spatial analysis• Regions with exceptionally strong system of

R&D and innovation (Type 5)• Regions with strong system of R&D and

innovation (Type 4)• Regions with mixed fortunes in undertaking

R&D and innovation (Type 3)• Regions with average strengths in R&D and

innovation (Type 2)• Regions which are weak at undertaking R&D

and innovation (Type 1)

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An initial spatial analysis of regional strengths and weaknesses

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Framework Programme Participation

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Allowing for GDP

• On the whole we find that the distribution of Framework Programme partners is spread much more evenly across the European territory. This is particularly the case in FP 5 compared to FP 4.

• Traditionally strong participant regions fall out of the top quintile, whilst those which are less strong increase their visibility. The greatest shift occurs within the UK, with the number of regions in the top quintile halving.

• Organisations in the new Member States have significantly improved their propensity to lead projects between FP 4 and FP 5.

• On this basis regions that have lower levels of GDP do appear to benefit from the Framework Programmes.

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Allowing for R&D expenditure

Number of regions in top and bottom quintiles ofFP project participation (€m expenditure on R&D)

Top quintile Bottom quintileFP 4 FP 5 FP 4 FP 5

DE - - 22 18ES 7 5 1 1FI 1 1 - 1FR - - 3 7GR 11 11 - -IE 1 - - -IT 1 3 - -NL - 1 - 1PT 5 7 - 1

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SF activity

Balance of R&D expenditure by objective (€m)FOI Total SF Total SF %

Objective 1 8,149 101,433 8.03Objective 2 2,329 21,544 10.81Objective 3 9 4,487 0.20Objective NA 193 3,551 5.46Total 10,681 131,015 8.15Source: adapted from DG Regional Policy records

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Spatial balance

Country rangeRegional average

Regional programmes containing FOI code 18

Total number of regional programmes

National % of relevant programmes

Belgium 3.9%-19.5% 14.5 6 8 11.26%Denmark na 14.0 1 1 13.98%Germany 2.6%-20.9% 6.8 15 17 9.53%Greece 0.6%-3.7% 1.3 11 13 4.16%Spain 0.5%-30.9% 4.5 17 19 8.86%France 0.7%-22.3% 5.8 27 27 5.82%Ireland na 1.2 1 2 28.86%Italy 0.1%-8.7% 2.2 19 21 12.34%Luxembourg na 22.0 1 1 22.00%Netherlands 1.5%-5.2% 2.6 4 4 2.54%Austria 7.8%-23.7% 14.5 9 9 14.52%Portugal 0.6%-2.0% 1.3 7 7 4.92%Finland 12.6%-16.4% 14.5 4 5 13.99%Sweden 2.0%-20.5% 13.5 5 6 13.45%United Kingdom 1.0%-10.7% 6.3 18 20 4.47%

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At a regional scale

• Beneficiaries of SF and FPs vary

• Focus of support differs– but some convergence

• Limited spillover through the FPs

• Extent of support for innovation understated

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Spatial effectsMacro meso micro

Infrastructureand equipment

* * ***

Technologicalcapacity

** * ***

Networking *** * **Human capitaldevelopment

** **

Employment *Governanceand strategy

*

FP SFMacro **Meso ** *Micro * **

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Spatial policy goals

• Currently EU R&D policy broadly supports convergence objectives– although FPs do so on a relative basis

• Strong performance against ESDP goals– networking amongst companies

– establishment of innovation centres and co-operation arrangements

– support for Objective 1 regions

– expansion of strategic role of major metropolitan centres

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• But less success in supporting development of larger zones of economic integration in the EU.

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Recommendations• Co-ordination between EU policies

– co-funding FP projects in Objective 1 areas– regional programming– inter-regional activity

• Focus of activities– trans-national programming

• Resources– maintain increase in resources available– minimum of 5% of all regional programmes

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Spatial challenges for the future

• Development of Eastern European regions versus Southern European regions

• Focus on regions with strong HEI sectors

• Encouraging business engagement

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NOTES TO SELF• Although a tentative classification of regions using Macro/Meso/Micro classification is

proposed in the main report, we are however reluctant to categorise regions according to this method, as we feel that it may undervalue activities that are ongoing within a particular region. Some regions may be international centres for particular types of specialised research, even though their overall R&D base, in terms of overall statistics, might suggest a poorer general performance. Moreover, we feel that descriptions of regions as being of international significance compared to those that are more regionally orientated may not be helpful for policy purposes.

• Just under half of all planned expenditure is intended to support innovation and technology transfers, establishment of networks and partnerships between businesses and/or research institutes (FOI code 182). Support for research projects based in universities and other research institutes (FOI code 181) and the development of RTDI Infrastructure (FOI code 183) represent the other two main areas of activity. There is a much lower level of funds directed towards training for researchers (FOI code 184), although it constitutes a higher proportion of the value of those programmes which contain this field of intervention than do the other RTD fields.

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From regression……?????

• Overall, levels of human capital, output and industrial structure can partly explain the regional disparities in R&D expenditure and, to a lesser extent, FP participation.

• Manufacturing regions are less likely to have high levels of R&D expenditure, whilst regions with higher levels of higher order skills and employment are likely to have greater levels of R&D expenditure.