I got a great lead from a Euractiv interview with Professor Bengt-Ake Lundvall, an innovation researcher at Aalborg University on HR management as key to innovation for highlighting the importance of the right framework conditions or ‘regional ecologies’ for the European Research Area and for driving Europe’s competitiveness.

My acquaintance with this concept goes back to a presentation at a conference organized by the Austrian Research Promotion Agency in spring last year in Vienna and a presentation at that event by Andrew Dearing, the General Secretary of EIRMA, the European Industrial Research Managers Association. I would like to share some his thoughts with you (I take the liberty to quote from the transcript of Mr. Dearing’s excellent presentation), which pretty much outlines state of the art thinking, discussion and regional good practice within ERRIN , the European Regional Research and Innovation Network, for which I have the pleasure to work, and some of the debate stimulated by the European Year of Creativity and Innovation:

The analysis that has so far provided the backdrop for the European Research Area contained a strong element of deficit remedied by more supply. To many people, the Barcelona 3% target sounds as if the solution to Europe’s innovation problems lies in spending more money; and there has been a belief that we are continuing to fall behind. This approach has had some useful consequences, focusing attention on the need for reform in the public sector, including adequate investment in universities and public research, but it has not stimulated the reforms necessary to achieve a more innovative Europe. I believe that the 3% measure is useful, but it has to be seen as an outcome, not an input.

In our review of ways forward for the European Research Area, we are recommending that this approach to ERA can be revised fundamentally. The rationale should now be based on opportunity and demand rather than deficit, by introducing a strong content dimension. Research should not sit in a hidden layer … but must become evidently important to the needs of the citizen and hence the politician. This will eventually require that we take a broader view of research as one element of knowledge-based societies, just as I have shown that a broader view of innovation has emerged during the last decade.

Principles such as competition should be used to their full extent to drive up standards in research, recognising also what is known from other markets, that too much competition created dysfunction. We must recognise that there is no single approach which can be adopted everywhere: the European qualities of diversity are actually very helpful provided we can turn them to good effect rather than having them act as blocks to progress.

None of our recommendations conflict with the analysis in last year’s Green Paper for the future of the European Research Area. The initiatives proposed by the European Commission are worthy and important and should proceed. However, they will not be sufficient.

So we feel that a new layer is required on top of what has already been proposed. This layer has three main features. The first is the introduction of “Grand Challenge” thinking into the development of ERA. I will explain what this means shortly. The second is to concentrate much more attention on the research-friendly ecologies which allow actors and institutions to work together productively. The third feature is a much closer dialogue and linkage between European research policy and the broader policies and directions of the EU. We need this to achieve a situation whereby ERA visibly supports the larger objectives which matter to the average citizen; but achieving these objectives depends upon local action and local conditions.

I turn now to the Research-friendly Ecology (the term emphasises dynamics and
interconnections), which we see as the new organising principle describing the rationale for ERA. These ecologies structure the environmental features in ways that can marshal competencies and demonstrate the critical roles of education and research within the knowledge infrastructure. They provide focus on the distribution of research performers, interactions and transaction costs. Successful ecologies, like Boston and Silicon Valley in the US, are characterised by their lower transaction costs among actors for the world of Open Innovation. We cannot achieve low transaction costs by addressing the problem purely from a central perspective.

An example of a mezzanine structure is IMEC in Belgium, which is a world-class
resource supporting the developments within the global semiconductor industry.
Important points about IMEC are the high degree of industry involvement and the steady (20 years) public funding required to achieve this situation. There is a continued role for the public sector in developing ecologies and mezzanines, and the actions are not quick.

The ecologies may also span national boundaries, although they are probably not pan- European. So we need approaches to ERA which enable these regional developments to flourish. This means that regional policy is central to the future of ERA.

Universities need to be empowered, which requires that the Modernisation agenda proceeds, to give autonomy and accountability at institutional level. Businesses need to be engaged, which brings us back to the demand side and to the Grand Challenges, since without market growth, companies cannot justify investing in this part of the world.

Another key player is the research and technology organisation, the development of the traditional PRO such as TNO, VTT, Harwell and the like. These are natural candidates to act within the mezzanine layer, yet little of their activity is yet transnational in nature.

We argue that this type of thinking and initiative – Grand Challenge plus Innovation Ecology – provides the only realistic approach to issues of Cohesion and Equity, through the focus on knowledge infrastructure, tailored to local requirements but connected with broader objectives that create demand.

Pulling these points together: Particularly in the run-up to the mid-term review of the European Union finances and the future development of the European Research Area, it is essential that we can make a compelling case for a shift in resources and approach that is meaningful to citizens and political leaders. This case, we believe, should move away from seeing research as a “closed box” which suffers from deficit and needs more spending. Instead, the research system must become evidently an important part of the knowledge infrastructure that enables social and economic progress. We need to establish the innovation ecologies that create low transaction costs and are relevant to the local situation. This requires understanding the institution in its setting, and I refer to the concept of “related variety” to describe the types of feature of the economy which ensure resilience rather than a monoclonal organism.

This will be very challenging for the responsible players. There are some preconceptions and realities that have to be recognised and addressed. The word “Relevance” is being used – we do not mean that someone situated centrally should decide on what is relevant and plan accordingly. Relevance is a consequence of the local situation and the demand created by the Grand Challenge.

There may be a larger role for governments – again, I am not advocating more central planning, but highlighting the fact that policy makers will need to be aware of the local innovation ecology in ways that perhaps have not been required of them so far. Governments are also major purchasers and standard setters in fields that will reflect Grand Challenges – health care, environment, transport and the like. So governments have to handle their roles in innovative markets.

With this ‘food for thought’ I wish everybody, and particularly my ERRIN members, a happy Easter break

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