Role of government in making a link between
expectations of business sector and the need
for independence of research sector, and in
fostering link between R&D and innovation in
Estonia
Anna Laido
Estonian State Chancellery
Secretariat of Research and
Development Council
Estonian RD and innovation governance system
Policy
design
Parliament
Government
R&D Policy
PolicyCouncil
Council
Innovation Policy Commission
Programme
design
R&D Policy Commission
MinistryofofEconomic
Ministry
Economic
Affairs
Affairs
and Communications
and
Communications
Ministry
and
M
inistryofofEducation
Education
and
Research
Research
Science Competence Council
Programme
administration
Projects
Enterprise
Estonia
Enterprise Estonia
Science Foundation
KREDEX
Firms
Industry
R&DInstitutes
RD
Institutes
Competence Centres
Academy of Sciences
Archimedes Foundation
Universities
VC

Underlying factors
• Slow recovery from low funding situation in 90-s
(ageing of academic personnel, low output of PhDs in
economically critical areas)
• Time-lag in terms of results from research and
innovation system- no sufficient political consensus
about the importance of the area
• Growth of Public R&TD &I % to GDP is lower than
anticipated in RD strategy for Estonia
• Substantial usage of EU structural funds (advantages
and risks)
• No national industrial champions with high private RD
expenditure and substantial economic weight
• Generally low level of collaboration between industry
and academia
Challenges in general
• Support individual projects (no regard to
sector) or active policy engineering towards
technology programs and clusters
• Internationalization of the RTD & I
• Avoiding long term brain-drain, attracting
international talents
• Bridging the industry and research sector
• Learning from the best practice as well as
mistakes of other research and innovation
systems
Policy framework
Objectives set out in Knowledge Based Estonia 2002-2006 and 20072013:
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Updating pool of knowledge, focus on three technology areas
Increasing the competitiveness of industry, main precondition –
integration mechanisms between research and industry
Main targets related to:

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Increasing level of expenditure on R&D, notably business expenditure
Better balance between basic and applied research activities
Technology Push
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public spending on RD is heavily weighted towards basic
research (50% of total expenditure) with only 16% spent
on technological development
the universities are regarded as the major source of
technology expertise, and of research capability – in
comparison, in the EU, business is the major performer of
RD, 66% of total RD, only appr. 2,4% is being
subcontracted to the HE sector
university researchers are mainly funded through
‘Targeted Financing’ funds (approx 38% of total public
RD funding)
Estonian Science Foundation (ESF) (approx 14%)
BUT - both evaluated on academic criteria, which provide
no real incentives for researchers to be concerned about
research applications
Technology Push cont‘d

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low university understanding of commercial
relevance
- the number of patent applications per 10,000
inhabitants is 0.1, whereas the EU average is 2.5
weak links to industry
managerial and commercialisation skills in
universities only starting to increase (Spinno
programme)
Market Pull

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only a small number of companies actively conduct inhouse R&D (ca 10 big and active companies, university
spin-offs, some small technology companies):
most companies do not have in-house R&D but have the
expertise and resources to commission research with
universities and institutes, altogether ca 200 companies
comparatively little state involvement so far in developing
the in-house capacity of industry to conduct R&D
the concept of industry as developers of their own
technology is underestimated
Market Pull cont‘d
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No innovation funding yet which is exclusive to industry
– all such funding is also accessible to universities
Relatively efficient and competitive financial sector:
- but venture capital not seed-phase/tech-orientated
Above average performance on new enterprise creation:
- but only limited pool of technology intensive start-ups
Which way forward?

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Lot of efforts from science side directed to bridging
the gap between universities and enterprises
Modest demand of enterprises for R&D financing,
leading to conclusion that there is no scope for large
increase in respective funds
As a result, 5 out of 8 programmes have R&D
institutions as (one of the) target group
“Science pushed” activities need to be
complemented by more “market
pulled” activities,
where
businesses and their needs drive the
process
Policy implications
Creation of critical mass in R&D projects and infrastructure
funding crucial:
 to be attractive as partners for business for applied research in
universities and RD institutes
Support for science base should also aim to increase number of
ST (post)graduates:
 indirect objective but research-industry mobility grants could
increase appeal of scientific career
NOT ALL COMPANIES NEED RESEARCH OR EVEN A HIGH LEVEL
OF TECHNOLOGICAL COMPETENCE
The purpose is to ensure that companies have the technology which is
appropriate to their needs, not to push high technology solutions.
Policy implications II
Diffusion of knowledge/technology as much/more than creation
should be the core focus:

technology transfer and adaptation (advice/training) also in
companies from traditional industry sectors should be central
plank of policy instruments;

need to stimulate foreign investment / export firms away from
sub-contracting to higher value added production
Capacity of firms to initiate, develop and manage RD and
innovation projects:

access to skilled personnel (mobility) and raising competence is
crucial
CONCLUSION - WHAT SHOULD HAPPEN
NEXT?
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Only when you have companies which are
technologically competent and active, they
will interact with the RTDI system to seek
services, graduates and technologies
Fertilize cross-sector activities where science,
technology development and innovation
have a role to play—the real need for coordination
Prioritization of sector specific co-operation
and initiatives