IWT-Studies
IWT-Observatory
Innovation
Science
Technology
49
Towards a ‘Third Generation’ Innovation
Policy in Flanders: Policy Profile of the Flemish
Innovation System
Contribution to the OECD-TIP project MONIT
(Monitoring and Implementing Horizontal Innovation Policies)
JAN LAROSSE
COLOFON
IWT-Studies is published by IWT-Vlaanderen
as part of the work programme of the IWTObservatory. However, the authors are
personally responsible for the standpoints
adopted in the development of these studies.
Editors
Ann Van den Bremt (secretariat)
Jan Larosse (co-ordination)
Production
N’lil
Copyright
Reproduction and use is permitted subject
to acknowledgement of source
IWT-Observatory
Jan Larosse, Co-ordinator
Donald Carchon, Information system
Marc Van Gastel, Knowledge Management
Ann Van den Bremt, Secretariat
Bischoffsheimlaan 25
1000 Brussels
Phone: 02/209 09 00
Fax: 02/223 11 81
E-mail: [email protected]
Web-site: http://www.iwt.be
Registration number: D/2004/7037/7
Published in December 2004
IWT-STUDIES > >> 49
CONTENT
F O R E W O R D ( V O O RW O O R D )
4
ABSTRACT
6
1 C O N T E X T - T H E F L E M I S H PA RT I C I PAT I O N AT T H E M O N I T P R O J E C T
1.1
1.2
1.3
1.4
MONIT
A Decentralised Belgian Innovation System
IWT
Participation in MONIT
2 GENERAL INTRODUCTION
9
2.1 The NIS approach
2.2 Management of the policy cycle
2.3 Coherence
3 P O L I C Y P R O F I L E O F T H E F L E M I S H I N N O VAT I O N S Y S T E M :
3.1
3.2
3.3
3.4
3.5
3.6
3.7
7
7
7
7
8
9
10
11
13
Overview
Performance of the Flemish Innovation System
Perceived challenges
Policy (mix) evolutions
Governance evolution
Governance challenges
Building capabilities for horizontal innovation policy development
13
14
19
21
23
25
27
Flemish Science & Innovation System
30
ANNEX
3
V O O RW O O R D ( F O R E W O R D )
De IWT-Studies 49 en 50 bevatten de
Vlaamse bijdragen tot een OESO-project
over ‘horizontaal innovatiebeleid’ dat eind
2002 startte. Daarin werkten 13 landen
samen in de onwikkeling en vergelijking van
concepten en ervaringen inzake samenwerkingsmodellen en beleidsstructuren (‘governance’) voor de afstemming van innovatiebeleid met andere beleidsdomeinen, in het
bijzonder andere brede beleidsdomeinen
zoals de informatiemaatschappij of duurzame ontwikkeling.
Het hedendaags innovatiebeleid is meer en
meer een ‘horizontaal’ innovatiebeleid
omdat het innovatieproces zelf ook een
alomvattend proces is geworden door de
veelheid van actoren en domeinen. De
Vlaamse regering heeft sinds dat het de
bevoegdheid over innovatiebeleid heeft verkregen systematisch het instrumentarium
versterkt om ondernemingen in het volledige innovatietraject bij te staan. De ontwikkeling van het IWT is hiervan het bewijs.
De steun aan de technologiecreatie (de
traditionele O&O-subsidies) werd gaandeweg aangevuld met programma’s voor technologiediffusie (TETRA-Fonds) en innovatie
voor KMO’s (KMO-Innovatieprogramma);
strategisch basisonderzoek (SBO naast de
doctorale specialisatiebeurzen en de postdoctorale onderzoeksmandaten); innovatiestimulering door netwerking (VIS en steun
aan universitaire interfacediensten) en
beheer van strategische initiatieven
(Excellentiepolen); de ondersteuning van
deelname van Vlaamse bedrijven aan
Europese programma’s en internationale
technologietransfer. Het IWT is de geïnstitutionaliseerde uitdrukking van het belang
dat de Vlaamse overheid hecht aan een
breed, transparant en coherent innovatiebeleid. Nieuwe paden dienen zich hierbij aan
zoals de bevordering van risicokapitaal,
innovatief uitbesteden of een (fiscale)
loonmaatregel voor O&O-personeel). De
betere integratie van het beleidsdomein
wetenschappen en technologische innovatie
met de beleidsdomeinen economie en
buitenlandse handel onder één Minister
onderstreept nogmaals het belang van
beleidsintegratie om deze doeleinden te
bereiken.
4
Het regeerakkoord van de Vlaamse regering
onderkent echter in dit verband ook het
belang van beleidsafstemming tussen het
innovatiebeleid en andere domeinen, die
niet hoofdzakelijk met het traject tussen
kennisopbouw en economische toepassing
te maken hebben. “We verankeren innovatie als een horizontaal beleid, dat doorwerkt
in alle beleidsdomeinen en streven maximaal naar synergieën.” (p. 43)
Het regeerakkoord verwijst daarbij in het
bijzonder naar samenwerking op de beleidsdomeinen van milieu en energie. Het betreft
beleidsdomeinen die omwille van hun eigen
ontwikkeling nood hebben aan innovatie,
net zoals innovatie nood heeft aan een verbreding van de innovatiedynamiek in de
samenleving om zijn doelstellingen te bereiken. Het is in deze context dat van ‘horizontaal innovatiebeleid’ wordt gesproken. In
feite zijn alle beleidsdomeinen in mindere
of meerdere mate potentieel te betrekken
in het horizontaal innovatiebeleid. In het
kader van de realisatie van de Lissabon-strategie pleit ook de Europese Commissie voor
een nieuwe fase in het innovatiebeleid, het
zogenaamde ‘derde generatie innovatiebeleid’, dat innovatie centraal stelt in het
groeibeleid en zich in het bijzonder onderscheidt door de implementatie van een
‘horizontaal innovatiebeleid’ waarmee
innovatie voor alle beleidsdomeinen een
topprioriteit wordt (Innovation Tomorrow,
april 2003).
In de Ondernemingsconferentie van 2003
werd in deze richting een belangrijke stap
gezet. De sociale partners kwamen immers
overeen dat voor de bevordering van de
economische groei en de werkgelegenheid
een bijzondere inspanning moet gedaan
worden voor de ontwikkeling van de milieutechnologie in Vlaanderen. Hiervoor werd
het Milieu-innovatieplatform (MIP) opgericht (goedkeuring Vlaamse Regering op 7
mei 2004). Het MIP zal alle spelers samenbrengen die in Vlaanderen actief zijn inzake
ontwikkeling van milieu- en energietechnologie. Door het samenbrengen en onderling
afstemmen van hun bevoegdheden en overheidsinstrumenten wil de Vlaamse Regering
de Vlaamse milieu- en energietechnologie
meer kansen geven op effectieve markt-
IWT-STUDIES > >> 49
VOORWOORD (FOREWORD)
penetratie en innovatie. Het opzet beoogt
in eerste instantie de onderlinge afstemming van het Vlaamse innovatiebeleid, het
milieubeleid en het energiebeleid. In het bijzonder zal ook aandacht gegeven worden
aan het inzetten van vraaggerichte stimuleringsinstrumenten zoals ‘innovatief uitbesteden’.
De nieuwe regering zal de wijze bepalen
waarop uitvoering zal worden gegeven aan
deze beleidsoptie. Zo stelt de Vlaamse
regeerverklaring: “Openbare aanbestedingen worden aangewend als stimulans voor
het innovatiepotentieel, onder meer op ecologisch gebied.” (p. 14). Meer in het algemeen stelt de Vlaamse Regering dat zij “een
krachtige stimulans wil geven aan een toekomstgerichte en duurzame economie,
waarin welvaart, welzijn, sociale rechtvaardigheid en ecologisch evenwicht onlosmakelijk met elkaar verbonden zijn en waarin
iedereen kan participeren”. Hiermee werkt
zij verder aan de implementatie van het Pact
van Vilvoorde van 2001, waarin duurzame
ontwikkeling een leidend beleidsbeginsel is.
Duurzame ontwikkeling en innovatie zijn in
de praktijk lang vreemden voor elkaar
geweest, maar de toenadering is nu ingezet.
Minister Moerman schrijft in haar beleidsnota: “Het MIP moet nu in nauw overleg
met alle betrokken actoren concreet geoperationaliseerd worden. Het vereist de
samenwerking van heel wat actoren en de
samenwerking tussen de Vlaamse bevoegdheidsdomeinen innovatie, milieu en energie.
Het kan een unieke kans bieden aan de
“clean technologies” in Vlaanderen.
Thema’s daarbij kunnen zijn het duurzaam
omgaan met energie, energie- en grondstofzuinige technieken en/of methoden, de
voorbereiding van een waterstofeconomie,
enz.” . Daarmee wordt het ‘derde generatie
innovatiebeleid’ in Vlaanderen op dit terrein geconcretiseerd.
Maar de transitie naar een kenniseconomie
en een ondersteunend horizontaal innovatiebeleid vraagt ook een vernieuwing van
de administratieve structuren die instaan
voor het voorbereiden en uitvoeren van het
nieuwe geïntegreerd beleid. De belangrijke
5
investeringen van de Vlaamse regering in
het innovatiebeleid veronderstellen dat
inspanningen vergroot worden voor de
effectiviteit van de beleidsinstrumenten;
efficiency en verantwoording van de aanwending van de middelen; de coherentie
van de beleidsplanning en coördinatie van
uitvoering; de transparantie van het beleid
en de participatie van alle betrokkenen. Dit
zijn evoluties in ‘innovation governance’
waar alle landen mee te maken hebben. De
Studies die in het kader van het MONIT-project werden gerealiseerd kunnen dan ook
nuttig zijn omdat zij de eigen ervaringen op
vlak van beleidsintegratie verwerken in een
vergelijkend conceptueel kader waardoor ze
op een verrijkende manier kunnen worden
teruggekoppeld naar de eigen beleidsomgeving in Vlaanderen.
De eerste studie geeft een analyse van het
Vlaams innovatiebeleid in zijn ontwikkelingspad naar een derde generatie innovatiebeleid in de context van een snel groeiend Vlaams Innovatiesysteem. Ze tracht
daarbij een aantal knelpunten te duiden en
schetst de uitdagingen voor de ‘innovation
governance’.
De tweede studie analyseert de wijze
waarop tot op heden het beleid voor duurzame ontwikkeling is georganiseerd in
België en in Vlaanderen om dan specifiek op
de relatie tussen milieubeleid en innovatiebeleid te focussen. Daarbij worden de
bestaande beleidsinstrumenten en beleidsstructuren geïnventariseerd en beoordeeld
op hun capaciteit tot integratie, met speciale aandacht voor het MIP.
Deze Studies zijn het resultaat van de deelname van het IWT aan het internationaal
‘beleidsleren’ binnen de OESO, en kunnen
bijdragen tot de discussie over de verdere
implementatie van het geïntegreerd innovatiebeleid, in het bijzonder de samenwerking
tussen de verschillende beleidsdomeinen.
Paul Zeeuwts
Directievoorzitter
ABSTRACT
This Study is the first part of the contribution of IWT to the OECD-Monit project and
describes the policy profile of the Flemish
Innovation System. The second part, presenting a case-study on the integration of innovation policy and environmental policy in
Flanders, is published in another volume in
this series.
The Flemish Innovation System has emerged
from the decentralised Belgian Science and
Innovation System as an autonomous system
in the nineties of last century, after the
devolution of power to the regions on most
legal competences in sciences and technological innovation and the subsequent establishment of key institutions and instruments to manage the interactions of the
actors in the Flemish system.
The conceptual framework of ‘national
innovation systems’, that received an important impulse with the conceptual work of
OECD, serves now as a reference for policy
development. The Monit project has stressed the importance of innovation governance – the role and involvement of all
actors - in the knowledge driven society to
fully exploit the leverage of systemic
approaches to innovation policy. The ‘horizontal integration’ of innovation policy and
other policy domains, as is studied in this
project, is key to ‘Third Generation innovation policies’ because policy integration is a
necessary component of systemic innovation
policy that mobilises all resources and puts
innovation at the agenda of all domains
that articulate societal demand.
Innovation governance in Flanders is moving
towards a Third Generation innovation
policy, starting from a technology push
model in the eighties over the full-scale
development of science and innovation stimulation in the nineties towards further
integration of policy domains at this point in
time. S&T-policy has gone through an important catching-up process on the level of R&D
activities. But the evolution of the Flemish
innovation system has also created rather
diverging dynamics that have produced a
mismatch between the scientific and industrial specialisations. This is a specific small
6
country problem, because globalisation is
influencing the different components of the
system in different ways. The challenge for
managing the innovation system as the most
important asset to anchor economic and
social welfare to the territory of Flanders is
to combine the impact of globalisation with
regional path-dependencies in the development of existing and new clusters of
specialisation that are competitive and
respond also to social priorities that are
widely shared.
Innovation governance therefore is at the
heart of economic and social renewal in
Flanders. The Pact of Vilvoorde (2001) has
laid the foundations of a new social
contract of the 21st century, in line with the
Lisbon targets of the EU, to be among the
leading knowledge economies. The
Innovation Pact (2003) has specified the
commitment of the innovation actors to
the knowledge intensification of the
Flemish economy and society, with the adoption of the 3% target. In the recent period
several strategic platforms (‘Excellence
Poles’) were set-up in domains that are
important for future development to stimulate research and networking. The new
Innovation Platform for Environmental
Technology strongly emphasises coordination of departments and their policy instruments, both at the supply and the demand
side of the new market of environmental
technologies. So innovation policy contributes to new innovation governance, but it
needs to go through a self-renewal process
to be capable to serve the transition of the
Flemish Innovation System to the new
knowledge economy. The under-development of the policy planning cycle and the
‘strategic intelligence’ of policy making are
bottlenecks for the role of government as a
catalysator for this transition.
This study has served the MONIT-project for
international comparative work on new
innovation governance and policy integration. It is meant to start further discussions
and research on the Flemish Innovation
System and the development of the innovation policy domain.
Chapter 1
CONTEXT
THE FLEMISH PARTICIPATION IN THE MONIT PROJECT
> 1.1 MONIT
The MONIT project (Monitoring and
Implementing Horizontal Innovation Policy)
was set-up by the Working Party on
Technology and Innovation Policy (TIP) of
the OECD in December 2002. The project’s
aim was to gain a better understanding on
the (governance) conditions for horizontal
innovation policies. To this end three Work
Packages have been defined:
- Work package 1 aims to develop a crude
profile of the national innovation policies
on the basis of a balanced selection of
common indicators that enables to understand and assess the different national
innovation systems, in particular in their
horizontal governance.
- Work package 2 concentrates on national
case studies of selected horizontal policy
areas as learning arenas on how to achieve
innovation policy coherence. Following
themes have been chosen: information
society, sustainable development, regional
policy and transport policy.
- Work Package 3 aims to come to a
synthesis, which will make the learning
loop complete.
Thirteen countries agreed to participate at
the project on a voluntary basis. IWT, as represented in the Belgian TIP delegation, has
engaged itself to contribute to this MONITproject on horizontal innovation policy, and
considers this to be a learning experience.
> 1.2 A DECENTRALISED BELGIAN
I N N O VAT I O N S Y S T E M
- Belgium is characterised by an extremely
decentralised innovation system. There
is no hierarchical relation between the federal and the regional institutional
level but a horizontal division of competences between Belgian governments that
cooperate on equal footing. An InterMinisterial Conference and Cooperation
Agreements formally operate coordination
of S&T policies.
7
- Innovation policy as such is a regional
competence, but some important framework conditions (social security, fiscal
policy, market regulations) are federal and
also international S&T programmes such
as Space Research. ‘Horizontal’ policy
coordination for stimulating innovation
therefore has a specific institutional
dimension in Belgium. Because most of
the relevant competences (education,
research, innovation, economic stimulation policy) are executed on a regional
level since the end of the eighties, new
autonomous regional innovation systems
have emerged, with new institutions as an
outcome.
- The devolution of competences has not yet
come to an end. In 2001 the regionalisation
of Agricultural policy (including sectoral
S&T policy) was decided and implemented.
In general the Belgian policy makers strive
to recombine competences into ‘homogeneous competence packages’. The new
Flemish government has announced in its
Government Agreement of 2004 to take
further steps in this direction.
> 1.3 IWT
IWT is the Innovation Agency of the Flemish
government, established in 1992, and has a
central role in the Flemish innovation system. Its yearly budget is about 250 million
euro (increasing steadily), the largest part
for industrial R&D and innovation support.
The newly established Flemish Administration
for Science and Innovation (AWI) started since
1989 with the compilation of a ‘Horizontal
Budget for S&T Policy’ for all Ministries. In
later years governance structures to conduct
horizontal innovation policies have emerged
in which IWT has a key role:
- IWT has been given the function of onestop shop for all technology and innovation support to companies, integrating the
technology policies of sectoral Ministries in
a bottom-up support approach.
- IWT has been assigned the role of coordinator of innovation intermediaries (of
CHAPTER 1 > Context
which many are stakeholders in the economic policy area).
- IWT is actively promoting Sustainable
Development policy with specific support
measures for environmental technological
innovation.
of this topic was not accidental since it has
been high on the policy agenda in the
recent period, with important policy initiatives as the creation of a new subsidy
facility in IWT and the preparations to
establish an ambitious Environmental
Technology Platform.
THE REPORT CONTAINS TWO MAJOR PARTS:
> 1 . 4 PA RT I C I PAT I O N I N M O N I T
The Flemish contribution to the project is
based on an informal collaboration between
the different authors, originating from
different administrations, and taking advantage of inputs of many interested colleagues. An important side effect of the
project is improved networking between
the different administrative levels.
The authors take full responsibility for the
content of this contribution, which is not
reflecting an official position. Although the
resources were too limited to allow a fullscale participation at the MONIT-project
this participation resulted in a self-standing
document that can be regarded as an
extensive contribution to the case-study on
the integration of innovation policy and
sustainable development policy, more precisely environmental policy. The selection
8
1. A ‘Policy Profile of the Flemish Innovation
System’, in line with Work Package 1 (Jan
Larosse). This document can be regarded
as a background for the next, more substantial report, but is also a basis for further comparative research on the evolution of the governance structure of the
Flemish innovation system.
2. A ‘Case Study on Sustainable Development
and Innovation’, as a contribution to Work
Package 2 (Peter Van Humbeeck, Ilse Dries
and Jan Larosse). This study is presented as
a case in which Flemish innovation policy
and environmental policy are advancing
from a segmented to a more coordinated
policy development.
In annex of the Policy Profile an institutional
map shows main actors and governance of
the Flemish Science & Innovation System.
GENERAL INTRODUCTION
Chapter 2
>
rational guidelines from the NIS-approach
to conduct successful innovation policies. In
fact, policy practice seems often ahead compared to policy theory in developing new
ways to capitalize on the interactive nature
of the innovation processes! In the OECD-TIP
Committee, which had an important stake in
the elaboration and diffusion of the new
policy framework, therefore new steps are
taken to give the approach more operability
and focus, in particular concerning the institutional preconditions of governance to
enhance performance of innovation
processes, in order to reap the full benefit of
the knowledge about the functioning of
innovation systems.
2.1 THE NIS APPROACH
The systemic approach has become the
predominant policy paradigm in STI-policy
making.
The innovation process is recognised to be an
interactive process in which different types of
interconnected actors and institutions
engage in the production, diffusion and use
of new, economically useful knowledge. This
process provides the elements and relationships that – located within the borders of a
country – constitute its ‘national innovation
system’ (see Lundvall 1992, Metcalfe 1995,
OECD 1999 and 2001). The system approach is
well suited to help policy makers deal with
dynamic complex processes as innovation, by
focussing on the relationships between actors
and on the knowledge flows in the system.
One of the most important topics where
countries can learn from each other is
how various policy areas interact and how
policies are coordinated into a coherent
innovation policy. The MONIT-project
(Monitoring and Implementing Horizontal
Innovation Policy) that started in December
2002 has brought together participants
from 13 member states for a comparative
research exercise to learn more from the
successes and failures in putting into practice horizontal innovation policies. The
MONIT project uses the NIS-approach to
analyse innovation governance and the
national capabilities for policy coordination
and thereby strives to enrich the approach
in order to derive better understanding and
policy conclusions.
The national innovation system approach
(NIS approach) has contributed largely to
bring innovation at the top of policy
agenda’s that were dominated by the traditional macro-economic themes of non-inflationary growth. In the EU countries the 3%
objective of Maastricht for achieving budget
control now has been matched by the 3%
objective of Barcelona for increasing innovation investments to become the leading
knowledge economy.
But this system approach is still very young.
The challenge remains to derive more opeFigure 1 >
A national innovation system
Demand
Framework conditions
Consumers (final demand)
Producers (intermediate demand)
Financial environment Taxation and incentives.
Propensity to innovation and entrepreneurship. Mobility ...
Company
System
Large companies
Mature SMEs
Education
and Research System
Intermediaries
Professional education
and training
Government
Research
Institutes
Brokers
Higher education and research
Governance
Public sector research
New, TechnologyBased Firms
Infrastructure
Banking,
venture
Political
system
IPR and
information systems
Innovation and
business support system
9
Standards
and norms
STI policies
CHAPTER 2 > General Introduction
Table 1 >
The organisation of the policy cycle
Stages in the
Policy Cycle
Process management capabilities
(Participative instruments)
Strategic intelligence capabilities
(Analytical Instruments)
Organisational levels
1. Policy preparation
Agenda setting
Consultation
Foresight
Policy Arena
(Advisory boards)
2. Policy formulation
Priorisation
Making choices
Scenario analysis
Bench-marking
Cost-benefit analysis
Ministry
3. Policy
implementation
Translation into policy objectives
Portfolio management (policy mix)
Administrative coordination
Programme design
Agencies
Learning-by-doing
Learning-by-interacting
Learning-by-learning
Evaluation of Effects
and Effectiveness
4. Policy evaluation
Ex post
Ex ante
Monitoring
Strategic Intelligence
departments
External consultants
Impact assessment
Technology Assessment
> 2.2 MANAGEMENT OF THE POLICY
CYCLE
This research focuses on the issue of ‘governance’1 in the domain of innovation policy. The term "governance" refers to decision-making processes broader than the
exertion of authority by political and
administrative bodies. Governance involves
the expression of interests of all actors in
the organisation of the policy domain on
national as well as sectoral level, including
the interaction with other policy areas.
Governance is a normative, multi-actor and
multi-level perspective on the management
of the innovation system that accommodates the dynamics of innovation. Because
the specific institutional architectures of
national systems of innovations determine
their international competitiveness, innovation governance is becoming more and
more a focal point of policy development.
Institutional reforms have been a continuous preoccupation of policy makers in
Belgium, but this was driven by other concerns than improving the governance for
innovation and structural renewal. As a
result in the process of de-federalisation of
innovation competences not all opportunities were taken to break with inherited
structures and traditions. The Flemish
Innovation System is still young and the governance structure is incomplete. Especially
from the point of view of the management
10
of the NIS the reflexive capacities for strategic innovation policies are lacking to really
put into practice a ‘primacy of policy’, as was
a focal point in the last reform of public
administration (‘better administrative policy’).
The Oecd project deals with the general
challenges for countries that are willing to
implement the encompassing transformation processes that demand strong horizontal policy integration. In particular it wants
to contribute to analyse better the national
capabilities in the strategic management of
a coherent innovation policy. This concerns
mainly the organisation of the policy cycle,
from agenda setting to evaluation of the
effectiveness of policies.
The four-stage stylised representation of
the policy cycle in the table below (bringing
together the well known elements in innovation policy literature) allows distinguishing the different functional specialisations
that are needed to manage this policy cycle.
In practice the sequence of these stages and
assigned instruments is not linear. But it
seems useful to make these distinctions to
understand the interaction opportunities
for policy integration between different
policy domains in different stages of their
policy cycle. This understanding needs to be
elaborated with analytical tools of strategic
intelligence2 for decision support, but most
important by participative methods for consultation and coordination.
CHAPTER 2 > General Introduction
IWT-STUDIES > >> 49
> 2.3 COHERENCE
The NIS approach is a conceptual instrument
to increase and accommodate the dynamism
of the economic and social system by
improving the processes through which policies are developed. Innovation governance,
as the institutionalised process of policymaking, has to ensure policy coherence to
improve the performance of the national
innovation system.
Policy coherence can be differentiated
according three dimensions:
- Vertical coherence: the degree of correspondence between goals and instruments, policymaking and policy implementation in the domain of innovation itself.
- Horizontal coherence: the consistency
between further goals and current targets
of different policy domains and their
potential for integration.
- Temporal coherence: the modulation in
time of short term and long term objectives, the mutual fit of current policies and
perceived challenges.
The three dimensions together define a
dynamic interplay of policy domains in the
innovation system. Incoherence and mismatch in fact is more the rule than the
exception because of uneven developments in a dynamic system, but the aim of
systemic coherence is a perspective for
management in an evolving context. It
doesn’t exclude conflicts either, because
actors are heterogeneous with different
problem perceptions, values and interests,
but imposes a normative model of consensus seeking by converging strategies of the
actors in the innovation system. System
analysis, in particular on the bottlenecks
for dynamic adaptation processes, is a prerequisite for policy coherence.
The concept of transition management3
emphasises in particular the challenges coming from more radical shifts from one systemic constellation to another, as for the
structural change in the present industrial
11
economies towards knowledge economies.
Therefore innovation policies need to be
‘coherent’ with a future oriented strategy
on that structural level and to be guided by
strategic aims that are ‘horizontal’ for the
whole of society and policy. ‘Strategic innovation policy’ is a part of this bigger programme of socio-economic change, but at
the same time one of the most important
drivers of it.
The specific organisational structure of the
innovation governance in a country is the
expression of the national capabilities to
manage the national innovation system.
Because the institutional setting of its
national innovation system determines to a
large extent the adaptive capacity and competitive advantage of a country, the governance is of strategic importance. The following chapters will illustrate this point of view
with further arguments.
- The first part on the ‘policy profile’ of the
Flemish Innovation System puts forward
the thesis of the ‘structural mismatch’ of
the Flemish Innovation System. This mismatch is the fruit of uneven developments
of the science and economic sub-systems in
which policy choices play a role. Scientific
and economic successes in Flanders are
conditioned by different international settings, and will not easily converge without
efforts for strategic convergence of the
local actors. Third Generation innovation
policy4 is about this necessary policy integration. Cluster governance - organising
networks of industries, research infrastructure and policy support to enhance the
competitive strongholds - is the appropriate governance level to achieve this kind of
strategic ‘matching’.
- The second part on the ‘integration of
innovation policy and sustainable development policy’ tackles the structural mismatch
caused by the industrial lock-in of the
Flemish innovation system in material and
energy intensive production systems.
The way out in ‘system innovation’
demands a long-term horizon of transition
to a new less resource intensive and more
know-ledge intensive economy. Flemish
CHAPTER 2 > General Introduction
innovation policy has to reposition the
economy in the framework of international
regulations and global specialisation. The
establishment of the Environmental
Technology Platform (MIP) by the Flemish
government can be a decisive institutional
lever for changing the governance structure for the ‘management’ of this process in
more coherent sense, in particular in
achieving greater coherence between supply (stimulating excellence in research and
innovation) and demand (procurement
policies). Horizontal policy coordination
and integration can find an institutional
interface in the governance structure of
this Platform.
The OECD-TIP is a ‘think-thank’ for new policy development. The MONIT project offers a
stimulating environment to advance explorative research and international policy
learning for Third Generation Innovation
Policy in Flanders. This Study can contribute
to policy discussions on the governance
structure and capabilities for this type of
new policy.
NOTES
1. Concept originally used by specialists in medieval English society,
changes are managed through comprehensive policy packages
which was characterized by cooperation between the different
and their strategic implementation. This includes the ways
sources of power (church, nobility, merchants, peasants, etc.).
through innovation policy institutions learn and the way in
During the 1980s the World Bank took up the concept of gover-
which governance structures renew themselves.” The concept
nance to describe the way power is exercised in the management
of TM is used in a systemic sense in the management of struc-
of a country’s economic and social resources. At the heart of dis-
tural transformations in complex systems. It has been derived
cussions about governance are terms such as responsibility, infor-
from population dynamics (demographic transitions) and
mation, transparency, the rule of law. Governance does not refer
applied to ‘system innovation’ in technology regimes for sus-
to political power in the strict sense. It is not the art of adminis-
tainable development (Rotmans et al., 2001).
tration at a given level of power, but the art of coordinating
4. ‘Third Generation Innovation Policy’ is an expression that
administration between different territorial levels.
has been introduced by a study, entitled “Innovation
www.solagral.org/publications/pedago/mondialisation_1999/
Tomorrow”, funded by the Enterprise Directorate-General of
version_gb/glossary.htm
the European Commission and published in 2004. It argues
2. ‘Strategic Intelligence’ in the context of innovation governance is
the decision support mechanism for innovation policy to ‘identify
sources (Technology Assessment, Foresight, Evaluation, Bench
Marking), build links between sources, improve accessibility for all
relevant actors (Clearing house) and stimulate the development
of the capacity to produce strategic information tailored to the
that a “third generation” innovation policy, which recognises the centrality of innovation to all policy areas, is key to
increasing the innovation performance of today’s economy.
As opposed to earlier generations of innovation policy,
based on the linear, research-dependent perception of innovation, and the current generation which supports the systemic nature of innovation, this third generation would
needs of actors involved’ (Kuhlmann et al., 1999).
reflect the horizontal nature of innovation and the need
3. According the MONIT-project proposal “Transition management is here understood as the ways in which more complex
12
for innovation to become an integrated dimension of
traditional policies.
Chapter 3
POLICY PROFILE OF THE FLEMISH INNOVATION SYSTEM
> 3 . 1 O V E RV I E W
4. GOVERNANCE EVOLUTION:
The outline of this concise ‘Policy Profile’
report contains the following paragraphs:
1. PERFORMANCE OF THE FLEMISH INNOVATION SYSTEM (FIS):
On the basis of the selected performance
indicators of the innovation system, represented in the ‘spider plot’, a mismatch
between economical and scientific-technological specialisations in Flanders is deducted. This is particularly important in view
of the role of horizontal policy governance
to improve the performance of the innovation system.
The different institutional reforms that successively devolved new competences to the
regions, are intertwined with the evolution
of different generations of policy regimes in
Flanders.
- First Generation Innovation Policy (dominance of the ‘linear model’) coincided with
the ‘DIRV’ technology-push.
- Second Generation Innovation Policy (coming into maturity of the ‘interactive
model’) resulted in the ‘Innovation Law’ of
1999 that provided a legal framework for
the extension of R&D policy to an integrated innovation policy.
2. PERCEIVED CHALLENGES:
Recent manifestations of de-industrialisation (in particular the closure of automotive
construction plants – Renault Vilvoorde and
Ford Genk - strongholds of post-war economic development in Flanders) and delocalisation trends (extending from massproduction plants to competence centres of
MNEs as the Philips plant in Hasselt developed the first CD players) had a great impact
on public opinion and political debate. They
give more urgency to the proclaimed transition to a new knowledge-based economy
and put pressure on innovation policy to
operate this structural renewal.
3. POLICY (MIX) EVOLUTIONS:
The foundations of the Flemish Innovation
System were put down in the Eighties of last
century with the socio-political mobilisations
by the first Flemish government for a ‘Third
Industrial Revolution in Flanders’ (DIRV).
This intensive campaign (with bi-annual
Technology Fairs) to promote new sciencebased industries, differentiated Flemish
industrial policy from the federal policies
coming to the rescue of the old ‘smoke
stack’ industries. But after two decades of
successes and failures the limits of this
‘knowledge-push’ strategy are showing in a
proliferation of ‘excellence poles’. The policy
mix of bottom-up and top-down policies has
no guidance.
13
- Third Generation Innovation Policy (emergence of a ‘holistic model’) is announcing
itself with the shift of focus from S&Tobjectives to horizontal strategic objectives
such as Sustainable Growth.
The new governance structure of innovation
in Flanders is characterised by a big role for
universities and intermediary organisations
that have to be aligned towards a common
vision.
5. BUILDING CAPABILITIES FOR STRATEGIC
POLICY DEVELOPMENT:
The challenge for the FIS to effectively support a ‘new economy’ is to develop a governance structure that succeeds in better
matching competences of the strategic
actors: universities that process knowledge
and firms that create value-added.
Innovation policies and sectoral policies
(economy, transport, environment, energy,
health etc.) can mutually reinforce each
other if better coordinated. In particular the
coordination with other horizontal policies
as Sustainable Development or Information
Society is vital for the overall coherence of
the Flemish Innovation System.
Government is a strategic actor in coordinating different social and economic sectors.
But up to now this coordination – in the
form of consecutive Top Conferences (Pact
CHAPTER 3 > Policy Profile of the Flemish Innovation System
of Vilvoorde, Innovation Pact, Entrepreneurship Conference,..) – is more punctual than
structural. Therefore it needs to develop a
more ‘reflexive’ governance structure with a
higher degree of formalisation of the policy
cycle. The establishment of the new Ministry
of Science and Technological Development
in 2005 must be a turning point in the
build-up of capabilities for strategic policy
development.
> 3.2 PERFORMANCE OF THE FLEMISH
One important growth source was the
increased effort by the Flemish government,
doubling its S&T budget in the last decade
and committing itself to the EU 3% target
with further increases of public expenditures
for R&D up to one percent GDP. The government sector itself is not a very important
R&D performer in size, although the government-funded research institutes IMEC, VITO,
VIB play an important role in the FIS. The universities are the main beneficiaries of public
funding; direct public funding of business
R&D is less than 5% of business R&D
INNOVATION SYSTEM
RESTRUCTURING OF THE INNOVATION SYSTEM
The statistical analysis of the young Flemish
Innovation System (FIS) is hindered by a lack
of regionalised and time consistent indicators. But the development of the main input
indicator, R&D expenditures, reveals a catching-up movement of the FIS. In the last
decade the FIS evolved from a below average
position to a position much above average
compared to the EU-average, because R&D
expenditures in Flanders rose significantly
while the overall international trend was
towards stagnation.
Figure 2 >
The most important driver in the development of Flemish R&D expenditures was the
business sector. Between 1995 and 2001 in
particular the rise of R&D expenditures of
the Flemish companies was among the highest in Europe. In 2001 this amounted to a
level of 1,9% GDP or nearly three quarters of
gross R&D investments. As in smaller regions
this R&D activity is very much concentrated
in a small group of top performers (the top
10 is responsible for more than 50 % of business R&D). Therefore the level of business
R&D in Flanders is fragile, since most big R&D
spenders are also depending on foreign
headquarters for strategic decisions.
Evolution of gross and business R&D expenditures in Flanders (in % GDP)
3,0%
2,5%
2,0%
1,5%
1,0%
0,5%
FLANDERS
0,0%
1992
GERD
BERD
EU 15
Flanders
EU 15
Flanders
1993
1993
1,95
1,72
1,22
1,29
1994 1995
1994
1,91
1,71
1,20
1,28
1996
1997
1995
1,89
1,69
1,19
1,27
14
1998
1996
1,88
1,84
1,18
1,37
1999
2000
1997
1,87
1,93
1,19
1,45
EU-15
2001
1998
1,87
2,04
1,19
1,51
1999
1,93
2,14
1,25
1,59
2000
1,93
2,32
1,26
1,78
2001
1.94
2,49
1,28
1,91
IWT-STUDIES > >> 49
CHAPTER 3 > Policy Profile of the Flemish Innovation System:
But R&D statistics also reveal a growing
number of small R&D actors. This spread of
knowledge intensification in the Flemish
economy is consistent with another positive
indicator on the output side. According to
the Community Innovation Survey the
percentage of innovating firms among
SMEs in the period 1998-2001 was with
an innovation degree of 57% also among
the highest in Europe. We therefore can
postulate the hypothesis that in the turn of
the century important parts in the Flemish
economy started shifting their competitive
strategy from capital intensification to
knowledge and innovation intensification.
The Flemish economy is an open economy
very sensitive to competitive pressures. Cost
competition by improving labour productivity, in which Flemish companies are champions, is increasingly supplemented with
innovation led growth.
The business cycle upswing at the end of
the nineties supported the increase in
investments, but the following downturn
has severely hit this first push of R&D investments according to recent findings. But for
the high-cost economy of Flanders there is
no way back in restructuring to a more
knowledge intensive economy and a more
dynamic innovation system.
Figure 3 >
SPIDER PLOT
In Work Package 1 the performance profiles
are analysed with a common set of indicators
organised in a ‘spider plot’.
Since complete figures for the Flemish innovation performance are not readily available yet
we have to take the Belgian data as a proxy
for the evaluation of performance of the
Flemish innovation system (representing twothirds or more of most values). The FIS in general outperforms the BIS.
The general shape of this ‘spider plot’ can be
examined to derive particularities – outliers of the FIS compared to average performance
(marked in gray) calculated from a dozen of
benchmark countries in the MONIT exercise.
The indicators are well balanced between
the different components of the innovation
system: the company system, the education
and research system, industry-science linkages and absorption capacity, in relation to
overall performance.
The plot depicts a rather ‘average’ performance pattern of the FIS on most indicators
(Belgian indicators coinciding with the
benchmark countries average). Patent
applications per million inhabitants for
Spider plot of innovation performance: Belgium compared to OECD reference group
BEL
Mean
A1 INNO-EXP
F2 CAGR LABOUR PROD. (HOUR WORKED)
A2 PATENTS
DX VENTURE CAPITAL
A3 SMEs SAHRE IN R&D
D3 KNOWLEDGE INVESTMENTS
A4 EMPLOYM. IN MT/HT MANUF.
D2 PARTICIPATION LLL
A5 EMPLOYM. IN HT SERV.
A6 INWARD FDI STOCK
D1 TERTIARY EDUC. (25-64)
C4 SHARE OF CO-OP INNOVATORS
BERD
A7 DIRECT GOV. FUNDING OF BUS. R&D
C2 BUSINESS FINANCED R&D AT GOV.
B1 5&E GRAD. (20-29)
C1 BUSINESS FINANCED R&D AT HEI
B4 SHARE RES. POL IN OVERALL BUDGET
PhD5/10.000 INH
B2 PUBLICATIONS/MILLION
15
CHAPTER 3 > Policy Profile of the Flemish Innovation System:
instance even are a little below EU 15 average in 2001.
Although the range of internationally comparative indicators is limited the outliers are
very instructive for establishing a first SWOTanalysis of the FIS.
- Positive outliers are: foreign direct investment (source of international spillovers in
embodied technology); business financed
R&D in Higher Education Institutes (bridging science to industry through contract
research); Venture Capital as percentage of
GDP (source of innovation financing);
- Negative outliers are: business financed
R&D in public research institutes; innovation expenditure as percentage of total
turnover (input indicator for innovation
efforts); percentage of innovators with
cooperation in innovation (importance of
external knowledge sourcing); science and
engineering graduates & PhD’s as a percentage of youngsters (human resources);
participation in life-long learning.
SWOT
Although the figures need to be used with
caution because of statistical problems, a
consistent picture can be derived.
1. Strengths:
bankruptcy of the Flanders based leading
speech technology company LHSP caused a
big trauma: most newly established VC
funds have stopped their operations. In 2000
VC investments in early stage rose to
0,107 % GDP (compared to the 0,075 EU15average); in 2003 it has dropped to
0,014% GDP (compared to 0,021 EU15average)! A new stimulation programme
ARKIMEDES started up by the Flemish
government (leveraged by a fiscal deduction
for private investors that invest in VC-funds)
is meant to revitalise the VC-sector. But the
capital market in Flanders will remain too
small for growth companies with international aspirations.
The business system is a very heterogeneous
innovation actor. Although business R&D
was rising continuously (up to 1,9% GDP
level), it is a concentrated phenomenon. This
is also the case for firms engaging in
research contracts with universities. Because
IMEC (with over 1200 researchers and nearly
half of its budget in contract research) and
VIB (the Flemish Biotechnology Institute
that has over 700 researchers and also
important
contract
research)
were
accounted as ‘inter-universitary’ research
centres instead of public research centres,
the statistics of business financing higher
education institutes and public research
institutes are levelling out if rearranged to
internationally comparable standards. But
universities still have acquired a comparatively great part of private financing
because of the budget restrictions in the
eighties and early nineties. Contract
research is an important source of knowledge transfer.
The presumed strengths are very fragile.
Foreign direct investment is still strong
because Flanders has a very open economy
with an export/GDP ratio of 110%, due for
the largest part to multinational production
plants working for the European market.
This is the ‘exogenous growth’ development
strategy that has been successful for many
years but is slowing down.
2. Weaknesses:
On the other side of the development spectrum there is the upsurge of VC-funds in
Belgium (70% of Flemish origin) in the
nineties, thanks to the pioneering work of
GIMV, the Flemish public VC company that
became the biggest early-stage capital fund
of Western Europe. This VC market was
meant to be the leverage for ‘endogenous
growth’ technology start-ups but was
severely hit by the recent dotcom crisis. The
Flanders has a high education level (81,3%
of youngsters between 20 and 24 have at
least finished secondary school) and a high
degree of third grade graduates. But the
percentage of S&E graduates & PhDs is
rather low. This is a great challenge for education policy if the R&D system has to expand
strongly in view of the 3% target. Life-long
learning is also a problem: although the
Flemish indicator is better than the Belgian,
it is still below average.
16
IWT-STUDIES > >> 49
CHAPTER 3 > Policy Profile of the Flemish Innovation System:
A still greater challenge is the low level of
some innovation indicators, according to the
CIS 2 statistics. But the last CIS 3 figures show
a very high ‘innovation degree’, at the top of
the EU countries, together with a below average expenditure for innovation (3,6 % of
total turnover). It is not clear which part of
the problem is due to the statistics or to the
innovation behaviour. But low average
expenditures might indicate that many firms
indeed have reached the limits of the capitalintensive growth strategy (which brought
Flanders at the top of labour productivity per
hour per man: 20% above the EU-average)
and switch to a more knowledge intensive
strategy, but still at a - too - modest pace.
These ‘CIS-innovators’ don’t have a strong
technology profile but are mainly driven by
market demand (reactive strategies). This
investment is fragile.
Very worrying is the weak connectivity of the
innovation system: only 26% of Flemish innovators in last CIS-survey had co-operations
with other firms or institutes.
3. Opportunities:
The central location of Flanders in the WestEuropean ‘banana’ remains one of the
major opportunities for the development of
new activities (logistics). The importance of
Brussels as international service centre is
increasing further. This is also an opportunity for the development of new value
chains. Flanders has a diversified industrial
basis and a trained workforce that has a
good absorption capacity for all kinds of
new activities. Public policy is also conducive
to knowledge intensification. The Flemish
government has been the initiator of some
strategic projects that make a difference:
the establishment of broadband provider
Telenet; the strong investments in e-government; and recently the creation of a platform for interactive digital television that
has a lot of potential to generate new multimedia services. Opportunities are there if
one is able to recognise them!
strong safety net in social security. In a globalising economy Flanders suffers from delocalisation of cost-sensitive activities. All location factors – labour costs as one of them have to be well combined in order to keep
up attractiveness for economic activities.
Differentiation is a better competition strategy to preserve Flanders as a location for
international players. Therefore innovation
policy will have an ever-increasing role.
Recently the political debate about the economic renewal has shifted from ‘innovation’
to ‘creativity’ as a notion that distinguishes
the more technology focussed approach
from a broader strategy to create value by a
wide range of specialised knowledge activities, such as ‘design’ (e.g. the Antwerp fashion industry), where Flanders has growth
potential. But the danger with widening the
scope for all kind of stimulation activities is
that the focus gets lost.
Creativity is needed in industrial policy, a
subject that has been missing on the policy
agenda for many years. The complexity of
the institutional system in Belgium is a
threat to a consistent industrial policy (for
example export promotion is not easily
transferable to the regional level). Another
one is the weakness of policy development
(e.g. lack of study departments in economic
and S&T administrations). Backwardness in
the knowledge intensification of government policy development is a major threat
to the development of the innovation system as a whole.
The presently high energy and material
intensive industrial structure of Flanders as a
transit economy is a threat to sustainable
growth.
TRANSITION PROBLEMS
4. Threats:
The Flemish economy is a very diversified,
open economy, which is changing quickly
under the pressure of globalisation. The
globalisation has stimulated asynchronised
developments.
A structural handicap of the economy and
the innovation system in Flanders is the high
level of labour costs (one of the highest in
the world), partly reflecting investment in a
The overall performance problem of the FIS
can be summarised under two headings
(simplifying a more complex analysis):
17
CHAPTER 3 > Policy Profile of the Flemish Innovation System:
1. ‘Innovation without (enough) R&D’:
The petrochemical cluster in Antwerp, the
second biggest in the world, is based on continuous infrastructural innovation to fully
internalise production synergies. But most
of the chemical plants have little R&D. The
world leading carpet cluster in Flanders has
been successful because of process innovation and new designs, but has no R&D. The
beer cluster counts hundreds of innovative
enterprises along with the world’s largest
brewery that excels in ‘market innovation’,
but they are not R&D-intensive. A cluster of
Flemish firms dominates the market in
frozen vegetables in Europe, without R&D.
The automotive assembly in Flanders is
another example of a competitive activity
thanks to automation and logistic innovations (conveyer parks), but R&D in Flanders is
limited and not decisive in the assembly
plants. These competitive strengths have
been developed by different innovation
styles that are not tightly dependent on
science-based R&D in Flanders. Innovation
policy is now opening up to non-technological
aspects of the technology development, but
doesn’t have a good perception of the different needs of other innovation styles,
equally on the level of knowledge development and R&D.
2. ‘R&D without (enough) industrialisation’:
On the other hand Flanders has invested
heavily in development of new technologies. I.e. IMEC and VIB are internationally
competitive research institutes, but up to
now have generated little new industrial
activity. The number of spin-out companies
is inclining but most are (and remain) very
little. The attempts to bring an IC-industry to
Flanders failed. The high expectations of
investments in breakthrough plant modification technology have resulted in a takeover of the major spin-off company (PGS) by
a German MNE because there was no
absorption capacity in the Flemish industry.
The pharmaceutical biotechnology field is
one of the most performant in de world in
publications and patents, but most industrialisation is ‘exported’. Innovation policy
wants to pursue the road of developing new
technologies out of the university knowledge base, but has recently started to invest
18
in new ‘Excellence Poles’ which are stimulated by strategic R&D actors in industry.
The Flemish version of the European paradox
is the rather weak connection of the science
base with those leading technology firms in
Flanders that do have sufficient R&D to
absorb new breakthrough technologies (e.g.
in materials technology or mechanics, the
leading technologies according to our innovation surveys). The plastic industry and the
machinery industry are important technology sectors that might benefit from stronger
interactions with the science base (as
recently with the Mechatronics Excellence
Pole). On the other hand there is also the
lack of spillover of knowledge and technology competence from existing industry to
new ventures (corporate spin-outs).
The economic structure of Flanders is still very
diversified but is quickly narrowing in size
and specialisations which are competitive.
Strategic innovation policy has to ‘inventorise’ the innovation potential that has been
build-up from different sources.
Most of the important R&D-performers are
subsidiaries of foreign multinationals, but
they have a certain degree of decision power
that can be leveraged for the Flemish
Innovation System, depending on their relative position in the group. Some of these
‘subsidiaries’ originate from take-overs that
left an important role for the local branch
because of its high performance (e.g. Janssen
Pharmaceutica in Johnson&Johnson), or
were set-up for the local market so that they
could conquer a lot of autonomy (e.g. the
former national telecom equipment manufacturers Bell and ATEA early 20th century,
and many MNE-subsidiaries in the sixties).
The integration of Flemish firms in global
strategies is enhanced, at the cost of regional
autonomy, and only the permanent affirmation as a worldwide ‘competence centre’ is
left as a leverage.
The remaining indigenous technology firms
(Bekaert, Gevaert, Recticel, ..) have become
niche players after multiple reorganisations.
Industrial newcomers are scarce and
appear in such diverse niches as hygienic
disposals, PET bottles, deep freeze vegetables
or aluminum profiles. Often specialized
IWT-STUDIES > >> 49
CHAPTER 3 > Policy Profile of the Flemish Innovation System:
niches in capital-intensive B-2-B process
industries or supplier for private labels.
But little is known from the perpetual
change into the service economy in Flanders
and its implications for innovation policy.
Only the software sector is ‘visible’ but these
software developers often have to be
regarded as part of broader clusters (financial services, e-security,..) that are not thoroughly analysed. In the pharmaceutical services, from clinical trials to wholesale, there is
a strong cluster with potential that seems
very dependent on organisational innovation too. Without this in-dept analysis of the
economic fabric it is difficult to apprehend
the role of research.
The ‘mismatch’ of research specialisations
and economic specialisations can point to
temporary transition problem provided that
we accept that new research-based industries can be build from scratch. The problem
is more of a structural nature if scientific and
economic resources are not combined efficiently in dynamic synergies. Innovation is
most successful at the borders of existing
knowledge domains and experience fields.
The innovation system has to be better
tuned to existing competitive clusters and
develop road maps to possible futures.
> 3.3 PERCEIVED CHALLENGES
Policy discussions in Flanders are dominated
by the general themes that appear on the
agenda in other ‘mature’ industrial countries, but have a country specific flavour
EMPLOYMENT:
Flanders has one of the highest productivity
levels of the world in output per hour
worked, thanks to process automation. But
this productivity is not a safeguard if industries are restructuring, as is the case in the
European automotive industry. After the closure of the Renault plant in 1996 an even
more important downsizing of a Ford plant
has been executed in 2003 and had a traumatic impact on the public. Flanders has the
largest production of cars per inhabitant in
19
the world. The future of work for the lowskilled part of the population seems gloomy.
The Belgian labour market is polarised
between a large well-trained segment and a
large segment with only scarce education.
Public debate at first was focussed on labour
costs, although labour only represents 5 to 7
percent of costs for those cars. Other plants in
Belgium are doing very well thanks to productivity and location advantages as well as
organisational innovation. The crisis in automotive is one of overcapacity, hitting the less
popular brands first. There is only a replacement production in Western Europe, and
new types of mobility will emerge. While
maintaining a strong position in this mature
and stagnating market - the ‘Flanders Drive’
platform wants to anchor the constructors in
innovative local suppliers networks - a new
future for sustainable economic growth can
only come from new activities. Some think
that industry will become as marginal as agriculture and that the future is only in services.
Some believe that industry and services in a
networked economy will blend in the organisation of product-service systems that provide ‘solutions’. The Flemish industrial problem is perceived as a lack of entrepreneurship
to create such new solutions and start new
firms. New firm creation is an important indicator. The next important problem is that few
companies go for growth strategies and that
growth companies that come to a certain
threshold don’t find enough growth finance
funding in the local capital market. The
Flemish financial system is too weak to support endogenous growth. So employment is
strongly influenced by global market developments. Policy makers can only try to tie it as
much as possible into dynamic local innovation clusters.
GLOBALISATION:
A new international division of specialisations threatens not only low-skilled labour.
Also high-skilled labour and knowledge
workers are replaceable. The job cuts of
Siemens in its Atea competence centre for
telecommunications and the closure by
Philips of its interactive audio competence
centre in Hasselt in 2002, suddenly revealed
that also jobs of knowledge workers are not
CHAPTER 3 > Policy Profile of the Flemish Innovation System:
secured from delocalisation, because of the
same reasons. Globalisation is reshuffling the
cards, and countries with few decision centres are more vulnerable is the feeling of policy makers. Strengthening the position of
local actors for investments, and increasing
the attractivity of the country for FDI are the
objectives. But this demands a redefinition of
Flanders’ competitive positions.
STRUCTURAL CHANGE:
While many agree that Flanders has to move
towards a knowledge intensive growth model
and develop new value chains, the strategy is
not clear. Structural changes and choices to be
made in that direction are not a theme for
policy making but something that ‘happens’
as a ‘side product’ of choices by innovative
actors. System failures on the level of mismatches, incomplete clusters and weak linkages are not yet analysed as major handicaps
for new economic activities. On micro-economic level the emphasis is put on the general
framework conditions for starters and more
specifically the commercialisation of knowledge from the universities. The analysis of
the existing industrial potential in Flanders in
perspective of its future contribution to
sustainable growth is poor. Cluster initiatives
of a different nature (‘Technology Valleys’,
‘Excellence Poles’) have been supported in
competitive strengths since the nineties, but
there is no explicit cluster policy supported by
a strategic scope. But networking is increasingly considered as an important feature of
innovation management.
Another important debate concerns the
implementation of the Kyoto-norm and
achieving sustainable development in
general. Many doubt that the decision to
close the nuclear power plants is irreversible
because structural alternatives are not clear.
Flanders has also the highest concentration
of chemical industry in Europe (with 2,8% of
population 8,5% of turnover is created in
Belgium). This well-performing industry is
highly energy intensive. The stimulation of
technological innovation in energy and environmental domains to support sustainable
development is placed on the agenda.
The Belgian and Flemish policies are very
20
much determined by policies and regulations
from the European Union. The endeavour to
develop a long-term change programme
(following the Lisbon-strategy) has been
materialised in the ‘Pact of Vilvoorde’
between the government and the social
partners in 2003 (following the Lisbon strategy). The first one of 21 objectives for 2010 is
to become a ‘learning society’ with at least
10% of population in life long learning programmes. Innovation targets (higher part of
turnover in new products and services, doubling the number of starters) have become
an inherent part of a global socio-economical change programme.
ADMINISTRATIVE MODERNISATION:
A last challenge for ‘system innovation’,
managing the transition to the knowledge
economy in Flanders, is the role and organisation of government itself. The public sector is under pressure to fold back to its core
business (the public sector in the economy is
relatively small), but social demands are rising (aging population). Government, and
politics in particular, are suffering a legitimation crisis that heavily handicaps the possibilities to take long-term strategic decisions. The regionalisation has not really
changed the negative perceptions of the
public. Administrative modernisation has
been a tool of the new Flemish Ministries to
increase the performance of the administrations, but didn’t really change the balance
of power with the political ‘cabinets’ of the
Ministers that conduct policy in practice.
According the principle of the ‘primacy of
policy’, put forward by the previous government, the power of consultation bodies composed of representatives of the stakeholder organisations – would also have been
limited (most of the policy ‘intelligence’ is
there). But in practice these institutional
mechanisms are pervasive.
The ‘Better Administrative Management’
campaign (BBB) of the Flemish government
that started in 2000 has not been concluded
yet. The final step in the process is the reorganisation of the administration in 13
Ministries - one of them a new Ministry of
Science and Technological Innovation - with
IWT-STUDIES > >> 49
CHAPTER 3 > Policy Profile of the Flemish Innovation System:
a new division of tasks between policy
preparing administrations, policy implementing administrations, and supporting
structures.
find the appropriate development model
for the Flanders Region.
But the biggest challenge for government
and administrations - to act as an intelligent
partner in the knowledge society - remains
to be tackled. Therefore investment in
‘strategic intelligence for the innovation system’ is a precondition for making the transition to a knowledge intensive governance
system. At the moment this knowledge
intensification of the administration is only
put on the agenda for operational tasks
such as in e-government.
After the creation of the European Common
Market in 1958 Flanders became the
European hub for many multinational production plants in new medium or high tech
industries (automotive, electronics, petrochemicals). Foreign Direct Investment became
the motor of economic expansion which was
supported by an ‘expansion policy’ (1958)
encouraging these types of capital widening
(with embodied technology). The central
location; multilingual, well-trained – at the
time rather cheap – labour; openness to foreign capital in company law were the main
assets to make the region attractive.
The increasing complexity of governance and
the emergence of new networked management styles makes some hierarchical models
obsolete and are pushing administrative
reform further to support better policy coordination. On the other hand a greater flexibility and deregulation is demanded (e.g. to promote starters) which prescribes a more
restricted role for government. Furthermore,
the redistributive role of government is challenged: the reform of the tax regime and
social security is a matter of public debate.
This debate is linked to job creation (e.g. ceilings on employers’ social contributions for
‘knowledge workers’) but also to the creation
of a new financial basis for the welfare state
(shifting away from labour). The overall
coherence of governance is not clear. Much
depends also on the coordination of Flemish
and Federal policies and governance structures. Decentralisation hasn’t stopped yet
(new institutional negotiations in Winter
2004).
> 3.4 POLICY (MIX) EVOLUTIONS
S&T policies have evolved in time spans of
about a decade, determined by a proper
identity according to the evolution of the
economical and political system and the evolution of policy thinking. The evolution of
policy models from the linear to the systemic
innovation models has been reflected in the
changing policies in Flanders that respond –
mostly learning-by-doing - to the need to
21
THE 60-TIES
In a small open economy innovation policy
for such a type of development this amounts
essentially to supply-policy (the education
system as main asset), to create a good
breeding ground for such exogenous
growth.
THE 70-TIES
In Belgium the energy crisis had a serious
impact on traditional industries that had
made Belgium a leading economic power in
the First Industrial Revolution (steel, coal
mines, textiles, ship yards). Government
heavily supported these ‘national sectors’.
But this ‘backing losers’ approach discredited industrial policy. The regions increasingly drifted apart because of different
speeds and disections for development, for
most of the old pre-war industries were in
the Walloon region and the post-war industries in the Flemish region. The failure of the
Belgian financial holding structures to adapt
had less impact in Flanders because of its
SME-economy.
THE 80-TIES
After the establishment of the first
Regional government, with still limited
competences, the Flemish Minister-president launched the ‘Dirv’ campaign (Third
Industrial Revolution in Flanders), a daring
CHAPTER 3 > Policy Profile of the Flemish Innovation System:
technology-push strategy. This was to differentiate clearly Flemish regional development policy from federal economic policy.
A regional investment fund (Gimv) was created, evolving into the largest early stage
VC in continental Europe. A first generation of universitary spin-offs was launched
and Imec was created, the research institute that became the largest independent
research institute in microelectronics in
Europe. In 1989 science and technology
policy was transferred to the regions.
THE 90-TIES
In this period a Ministry of Science and
Technology was created under the Ministerpresident who also managed the Ministry of
Economics. He launched a catching-up
movement for R&D spending in industry
with large thematic impulse programs (on
micro-electronics, biotechnology and new
materials). IWT was created as an
autonomous Technology Agency. His project
to introduce cluster policy as a new economic development policy for Flanders
failed because the cooperative mood was
not explicit enough yet. The management of
the Ministry of Economics was transferred to
another Minister and the integration of economic and technological innovation policy
was not continued. But R&D policy evolved
into a broader innovation policy, with a new
legal framework in the 1999 ‘Innovation
Decree’ that explicitly founded new categories of support to innovation in SMEs,
interface services for universities that promote spin-offs, networks of cooperation
among innovative firms.
The immaturity of cluster policy is illustrated by a continuing opposition in political discourse today of ‘bottom-up policy’
versus ‘top-down policy’, meaning that it is
not in the capacity of government to make
choices on ‘content’. Clusters should not be
selected and ‘labelled’ by government, but
cluster organisations that are supported by
actors themselves can propose their projects
of innovation stimulation (any that meet
quality standards). This opposition blocks a
real debate about the necessity and possibility of a ‘strategic innovation policy’ (mak-
22
ing choices to invest scarce resources in
domains with sufficient critical mass).
Another debate, which is linked to the problem of establishing/maintaining economic
decision centres in Flanders that can take an
option on the future, is on the question how
to ‘anchor’ important existing firms in
Flanders and promote home-spun growth
enterprises. ‘Anchoring’ of international
competence centres in networks has become
a systematic strategy (e.g. Flanders Drive,
the platform for innovative automotive suppliers, was created to embed the foreignbased constructors in a performing suppliers
network in Flanders).
Creation of spin-offs by universities - and
start-ups in general - have become a signpost
for the new entrepreneurial drive in innovation policy. Because the big financial holdings
were ‘Belgian’ or foreign, the Flemish strategy was to boost a Flemish VC-market (with
the privatisation of Gimv) to create leverage
for this endogenous growth. But the
Lernout&Hauspie trauma, (the failure of
building a world leader in ICT with Flemish
roots), has severely hit the private VC-market.
AFTER 2000
The recent period witnesses a phase of consolidation and maturation of the Flemish
Innovation System in which a wide range of
instruments are deployed by IWT to support
the ‘innovation chain’ (including support to
technology diffusion, innovation in SMEs,
network creation). In the government
period 1999-2004 competences for innovation and research were re-allocated to different Ministers, linked to Economy and
Education respectively. Emphasis was shifted
to the reinforcement of academic research
because growing dependence on contract
research for funding of the regular staff
became a threat for the capacity to excel in
fundamental research.
Although ‘actor driven’ policy development
is the guiding principle, the borderline
with an ad hoc industrial policy is thin in
Flemish policy making, e.g. in selecting new
‘Technological Excellence Poles’ by the
CHAPTER 3 > Policy Profile of the Flemish Innovation System:
government that are put under the administration of IWT. Strategic initiatives by the
government have little legitimacy and are
always initiatives ‘ad hoc’. The creation of a
second telecommunication operator and the
promotion of broadband in the nineties
(Telenet) and more recently the experimentation of interactive digital television with
the public broadcaster (e-VRT) have proven
to be successful choices. This last initiative
was clearly facilitated because the same person held the Ministries of Media and
Technological Innovation. A new policy mix
of bottom-up and top-down instruments is
in the making.
The last period of the previous government
witnessed a real boom in new strategic initiatives taken by government to use substantial investments in knowledge platforms
to anchor groups of companies. After
‘Flanders Drive’ in 2002, a series of
Excellence Poles of different nature were
launched in 2003 and 2004: The Flemish
Institute for Logistics; IncGeo (Incubation
point
Geo-Information);
Flanders’
Mechatronics Technology Centre (FMTC);
Institute for Broad Band Technology (IBBT);
Environmental
Technology
Platform;
Flanders’ Food; Flanders’ Materials Centre;
Design and Product Development; Flanders
District of Creativity.
IWT-STUDIES > >> 49
‘Entreprises Conference’ in November 2003,
mobilising all social partners for the improvement of the competitive position of the
region has stated the necessity of an integrated policy to mutually adjust economic
policy with innovation policy, labour market
policy, infrastructure policy, environmental
policy, fiscal and regulatory policies. In particular the support to R&D departments with
fiscal instruments was put on the agenda.
A new leap forward is now possible, to put
innovation policy at the service of sustainable
growth. After recent ‘warnings’ by the closure of production as well as engineering
departments of MNEs, employment, competitiveness and environmental sustainability are
becoming the clear objectives of innovation
policy to catalyse the emergence of a new
economy. Therefore a ‘Third Generation
Innovation Policy’ has to be designed.
Challenge is to ‘anchor’ firms and employment in a well-performing innovation system:
improving connectivity (cooperation and cluster policy in well chosen niches) and systemic
coherence (policy integration) will be the key.
But the development of the capacity of
strategic decision-making is an important
feature of governance in this transition.
> 3.5 GOVERNANCE EVOLUTION
The lack of early stage capital for radical
innovators is urgent and calls for a ‘new
Gimv’ (after privatising the old one) are
increasing. A new public holding (PMV) is
given new tasks (operating an ‘Innovation
Fund’). A new support scheme to bring more
private money to VC-funds by tax deductions
(Arkimedes) is going to be implemented.
There is no tradition of ‘strong’ government
in Flanders. The ‘social partners’ are closely
involved in policy development (SERV, the
main ‘think tank’ for economic policy is operated by the different employers and labour
organisations). Policy formulation and policy
implementation have become to a large
degree ‘mediated’ by the stakeholders.
The European ‘3% target’ has given a new
drive to the Flemish catching-up movement.
An Innovation Pact, formally concluded in
March 2003, engages all actors in the innovation system to the accomplishment of this 3%
target. Government – still underperforming
in financing R&D compared to the business
sector - will increase its budget every year
with at least 60 million euro. The progress
will be evaluated with an ‘innovation norm’
that is differentiated over all actors. An
In this respect the Flemish innovation system
has inherited a number of institutional characteristics from the Belgian innovation system. The 1947 Law De Groote has set-up an
obligatory contribution system for all firms
in specific industrial sectors (Metals, Textiles,
Construction, Diamond, …) to support
‘Collective Centres’ that were set-up by the
enterprise federations to do applied
research and problem-solving for their
members (also state-financed). This model
23
CHAPTER 3 > Policy Profile of the Flemish Innovation System:
has been replicated in different forms up to
today. In general the Belgian state didn’t
organise much public research. Also the
research of public companies such as railways or telecommunication was outsourced
to the ‘national champions’ in the private
sector. Defence was rather weak and development of new equipment went abroad in
exchange for ‘economic compensations’ in
production facilities. Only nuclear energy
received much attention since the fifties
(VITO resulting as a spin-off from the Study
Centre on Nuclear Energy) and space
research receives since the mid-eighties a
yearly subsidy of about 150 million euro for
participation in the European Space Agency
(with limited Belgian spin-off). The Belgian
state relied on the holding capital groups to
invest in the long term, but when these
holdings collapsed in the eighties (destroying also large parts of the R&D assets of its
components, e.g. ACEC), the only remaining
long-term research structure was universitybased research.
bers). The federations have since the fifties
of last century a practice in organising
Collective Research Centres in the traditional sectors, which mainly provide technical assistance, and are a role model for initiatives in the new domains. The impact of
strategic decisions of foreign MNEs in the
past on the economic specialisation structure was strong but was not influenced
strongly by Belgian and Flemish S&T policies.
A specific characteristic of the institutional
set-up in Flanders is that universities are
influential actors, also because the political
emancipation of Flanders was initially to a
large extent a cultural movement that crystallised in these universities. The main
research institutes (Imec, VIB, IBBT) have
received an ‘inter-universitary’ structure – the
last initiatives are ‘virtual’, without own
research labs. This is why the selection of scientific specialisation in the Flemish
Innovation System is exclusively researcher
based and driven by publication performance, not innovation performance. But universities are becoming an important ‘industrial’ player who develop their own strategies
by their patent portfolio management,
research contract policies and recently the
attribution by the government of an
‘Industrial Development Fund’ for strategic
research ‘according to own priorities’.
There is no direct institutional link between
the innovation policy and economic policy
domains. This is illustrative of a general feature of governance structures in Flanders
that they are rather vertical. Stimulation
policies are not administratively coordinated
by the government, but intermediaries
‘channel’ the different policy instrument to
their members. Innovation policy is mainly
‘resource driven’ (providing budget increases
that afterwards have to be allocated, subject
to interest-group pressures).
Another specific element that determines
the governance is that there are few local
MNEs, and none of them real big ones that
dominate directly the policy agenda. That is
why a big role is confined to enterprise federations (as service providers for their mem-
24
Innovation governance in Flanders is
‘biased‘ to research actors and ‘intermediaries’ that have an increasing role in the
operation of the Innovation System, in particular in linking the research potential and
the economic potential. The new VISscheme to promote innovation by cooperation has brought already more than 180
‘innovation advisors’ in the field (compared
to 50 at IWT). The recent boom in Excellence
Poles that are ‘demand driven’ in their management adds a new decentralised layer to
the System, increasing its complexity.
The capacity of the innovation system to
respond to new challenges is determined by
this specific governance structure being ‘science-driven’ and ‘intermediary-driven’. This
has been officialised as ‘bottom-up’ policy
by the previous government, leaving the
responsibility to make choices to the actors
in research and business. The convergence
of strategies of complementary actors,
remains the major challenge.
The improvement of the supply of valuable
scientific-technological outputs is not enough
if the problem is to find a better match
between actors or sectors in the innovation
CHAPTER 3 > Policy Profile of the Flemish Innovation System:
system. This supply orientation of the Flemish
innovation system is due to the inheritance of
a period when this was the mainstream
model. The regionalisation of the State in
Belgium created a unique opportunity to
reconstruct and modernise institutions in the
Innovation System. It resulted in a rather
streamlined structure (with IWT as one-stop
shopping point for industry). But because this
was in a time period that policy models were
changing from first generation to secondgeneration innovation policies, the new setup bears characteristics of both models.
The ‘DIRV’-approach, with emphasis on basic
research of an international level in the new
generic technologies and the creation of
spin-offs, is a reflection of First Generation
innovation policy (or the linear innovation
model) that assumes that economic performance follows research performance.
This is still a dominant approach in large
areas of the Flemish Innovation System,
while the general governance structure has
shifted to a Second Generation innovation
policy. This is not technology focussed anymore but puts the economic and social outcome as objective, which needs an interactive model of organisation to bring together
all success conditions. IWT has evolved from
a purely technology-push subsidy instrument to the stimulator of technological
innovation with different roles: as financier
of near-risk capital, stimulator of networking, and coordinator of intermediaries.
Significant was the change of name from
‘Institute for the promotion of science &
technology in industry’ to ‘Institute for the
promotion of innovation by science and
technology’ in the 1999 Innovation Law,
being the ‘moment suprême’ of institutionalisation of this new governance model. But
these new roles are not fully implemented
yet because new capabilities are necessary.
> 3.6 GOVERNANCE CHALLENGES
The further development of the governance
structure is subject to learning cycles that
still coincide largely with the change of governments and Ministers. A new qualitative
change towards a new Third Generation
25
IWT-STUDIES > >> 49
Innovation Policy is already announcing
itself in new operations in the system, operations that are difficult to pursue just
because governance is inadequate. The new
government that is installed in summer 2004
can make substantial contributions to the
strengthening of the innovation governance. Innovation is a central element in
the new Government Declaration. But to
operationalise this significant steps to a
Third
Generation
Innovation
Policy
Governance have to be taken.
First, the general acceptance of the systemic
approach to innovation policy has to be
institutionalised through the integration of
technological innovation policy in a wider
innovation policy. Integrated innovation
policy calls for a well-coordinated process of
policy design, policy implementation and
policy evaluation between the departments
concerned with the stimulation of innovation, entrepreneurship, investment and
trade. The new government has realised an
important precondition by bringing the
Ministry of Science and Technological
Innovation and the Ministry of Economy
under one ministerial responsibility.
Second, innovation policy has to be integrated with all sectoral policies and therefore these have to put innovation as a distinctive objective on their agenda, if
governments really want to achieve the
Lisbon target of transforming their countries in competitive knowledge societies. In
the government declaration reference to
multi-sectoral “horizontal innovation policy” is made in the sections concer-ning
energy policy and agricultural policy.
Third, innovation policy has to expand its
scope from economic goals to other types of
policy goals, not as constraints on growth
but as part of a coherent social mission with
a long-term development perspective for
Flanders. Sustainable development, as a
combination of economic, social and ecological goals, is such a policy. The ‘Pact of
Vilvoorde’ is a first sketch of such a new
long-term growth path. This type of multisector, multi-goal innovation policy can only be
achieved by new types of horizontal policies
CHAPTER 3 > Policy Profile of the Flemish Innovation System:
Table 2 >
Horizontal Innovation Policy in perspective
Sectoral innovation policy
FIRST GENERATION
Multi-sectoral innovation policy
GOALS
Single goal innovation policy
(economic growth)
Traditional S&T policy
(linear model)
Integrated innovation policy
SECOND GENERATION
Multi-goal innovation policy
(sustainable economic growth and quality of life)
Innovation in other domains
(sectoral innovation policies)
Horizontal innovation policy
THIRD GENERATION
DOMAINS
and governance structures. In the government declaration this multi-goal policy is
called “inclusive policy”. The first challenge
is to operationalise the ‘Environmental
Technology Platform’ (MIP) as a governance
structure for this new policy orientation.
Fourth, the national and international
dimensions of innovation governance have
to be recombined to balance the growth
potential of localised interactions with that
of global scale and specialisation. The
Flemish innovation system has to position its
comparative strengths in the wider
European Research Area and international
networks of knowledge regions. Flanders is
too small to be excellent in a too wide range
of research and innovation activities.
Clusters and innovation networks don’t stop
at the border of the country. Therefore
national governments have to cooperate in
the development of innovation governance.
Flanders has developed excellence centers
that are too big for Flanders but also has
innovation activities that are difficult to
match with excellent research in Flanders.
International innovation governance can
pool resources and stimulate an international division of labour based on dynamic
comparative advantages.
The institutionalisation of new policy models
needs a transition period in which a good
‘transition management’, announcing its
strategic objectives, can make a difference
in streamlining institutional developments.
In the past the centralisation of different
competences in one (Ministerial) hand was a
way to spur coordination. The fact that competence on Media policy and Innovation
policy was in the hands of the same Minister
has certainly stimulated new developments
26
as the establishment of a Broadband
Institute and the important development
investments in interactive digital television.
The (re)creation of a Ministry of Sciences
and Technological Innovation will not solve
the coordination problems with the immediate ‘neighbour’ competences of Economy
and Education (or others), if no broader
vision on the future of the Flemish
Innovation System is developed. The challenges are important. The very important
investments of the past governments and
the still more ambitious efforts announced
by the present one to come bear also important risks with regard to the ‘absorption
capacity’ of the Flemish innovation system.
The present functioning of the administrations is a bottleneck for this increase in
dimension of the budget. The proliferation
of new initiatives supported by intermediaries risks to cause an institutional blockage
of the system. Accountability and strategic
management needs to be strengthened.
The first step therefore is the better support of the policy cycle for the allocation of
this funding. The 1999 Innovation Decree
has announced the instauration of a 5-year
planning cycle that waits to be
implemented. Horizontal coordination will
be one of the main tasks of the
Administration of Sciences &Innovation.
But the political legitimation of having
innovation high on the policy agenda is a
matter of political vision and message: the
role of policy makers as catalysers of new
social consensus.
The realisation of horizontal policies will
therefore be depended on the governance
of vision and long-term strategy: an important role of policy preparation in the
administration. In Flanders most of this
IWT-STUDIES > >> 49
CHAPTER 3 > Policy Profile of the Flemish Innovation System:
HORIZONTAL INNOVATION POLICY: TYPES OF POLICY DEVELOPMENT
1. ‘Internalisation’ of the innovation objective in all sectoral policies (e.g. an ‘innovation test’
for new regulations; public procurement that stimulates innovation)
2. Coordination between sectoral policies (ex post operational convergence):
‘portfolio management’ of existing instruments that are better matched and ‘packaged’
to stimulate innovation
3. Integration in ‘common’ policy (ex ante strategic convergence):
design of a ‘policy mix’ that is targeted to common objectives for all government (e.g.
new social contracts linking innovation and sustainable development)
‘second order’ governance or ‘strategic
intelligence’ is weak or non-existing. But
there is a practice of social consensus building and institutional flexibility (reforms)
that is an important point of departure for
creating new ‘communities of practice’ in
horizontal policy.
> 3 . 7 B U I L D I N G C A PA B I L I T I E S F O R
H O R I Z O N TA L I N N O VAT I O N P O L I C Y
DEVELOPMENT
Structural drivers for change in the governance of the Flemish innovation system are:
- its vulnerable competitive position as a
small open economy (betting on the locational advantage as knowledge economy;
the international positioning in ‘niches’);
- the strong integration in the EU (adoption
of EU Lisbon targets);
- the emergence of more and more ‘crossdepartmental’ challenges (sustainable
development);
- increasing budgetary pressure (need for
selectivity) and public responsibility (need
for evaluation) combined with a strong
budget increase for science and innovation;
- the problem of synergies on the Federal
level (better use of tax policy, of Brussels’
service functions);
27
The imbalances in innovation performance mismatches between the education system
and technology development on the one
hand and the economic specialisations on
the other hand; the ‘walls’ between ministries of economy, innovation & sciences,
education – urge for a better horizontal
coordination to strengthen the innovation
system. A strategic innovation policy is
being set-up by the Flemish government
through different channels (strengthening
of the existing public research institutes,
development of a new Strategic Basic
Research programme, start of new
‘Excellence Poles’). Therefore capabilities
for horizontal innovation policy development are central. The self-management
capacity of the Innovation System needs to
be improved on the basis of a better ‘feedback’ (retrospective and future oriented
mechanism evaluation).
The reinforcement of the reflexive capacity
of the innovation system cannot be
obtained alone by the types of self-organisation of interested parties that have operated up to now in the innovation system,
because they often cannot operate effectively on the important second order effects
of local actions (like spillovers and synergies
in non-core areas that nowadays constitute
the largest part of the social return of innovation investments). A support system for
decision-making for strategic actors (and in
particular for government as ‘catalyser’ of
the system) is a necessary condition for ‘codevelopment’ of strategic innovation
CHAPTER 3 > Policy Profile of the Flemish Innovation System:
Table 3 >
Innovation Governance: a stylised model
GOVERNANCE
On the level of:
Typical organisational
form of coordination
Policy instruments
Strategic Intelligence
1. Social actors
(Consensus building)
Innovation Conference
Strategic Innovation Programme
(‘Innovation Pact’)
Foresight / Road mapping
2. Political actors
(Strategic Board)
Innovation Council
Innovation Action Plan
(‘Policy Declaration’)
Evaluation and policy design
3. Administrative actors
(coordination in the field)
Innovation Network
(IWT ‘innovation network’)
Innovation implementation planning
(Management Contracts)
Monitoring
policies of the Third Generation. Therefore
the construction of a ‘distributed strategic
intelligence’, is key to the governance of
Third Generation Innovation Policy.
Strategic policy integration cannot be operated in ‘rushes’ but needs a network of
standing support organisations.
The multiplication of ‘Top Conferences’ on
strategic choices for Flanders future (Pact
of Vilvoorde, Innovation Pact, Entreprises
Conference) is another indication that the
ad hoc construction of a new consensus has
its limits. A more systematic reflection on
future options is needed. This is not the task
of one ‘Central Bureau of Future Choices’
but an organised process of achieving
strategic convergence among the different
actors that is governed by a set of complementary institutions and supported by specific instruments for innovation systems
management.
At the moment different nodes of this network are already present but they cannot
fulfil their role of strategic intelligence in
the policy cycle if there is no mission and
coordination as such. The present advisory
board for S&T policy (VRWB) has been
assigned the role as ‘Strategic Advisory
Board’ of the new Ministry and already
invests in capacity for Foresight Studies. At
the Flemish Parliament an Institute for
Technology Assessment (VIWTA) has been
established in 2002. Also recently the new
‘Support Points’ programme for policy-oriented studies has started, with two Support
Points in the fields of S&T Indicators and
of Entrepreneurship and Innovation. They
complement the intelligence already present at the administrations (Monitoring
28
Unit AWI, IWT Observatory, the Unit for
Innovation and Entrepreneurship, …) that
needs to be strengthened further as to be
able to internalise the research results from
national and international networks. A
next step is to link those units between different administrative levels into an innovation policy support network that enables
the information and knowledge flows for
decision support in strategic innovation
policy development.
Based on the experience in Flanders and
abroad, the matrix gives an overview of the
conditions for this distributed strategic intelligence to function, according the type of
coordination that is needed on different levels. The coherence of strategic intelligence
emerges from the interplay of all those
conditions:
1. On the broadest level of social consensus
a future strategy is shared (for the FIS as a
whole or for particular sub-systems). A
well-prepared Innovation Conference can
create sound foundations for long-term
commitments as an outcome of a convergence process between the strategic
actors in exchanging scenario’s and
options on a more regular basis.
In Flanders the first Foresight exercises are
starting; some sectoral road map exercises
were successful. Top conferences are
seldom using such intelligence.
A particularly well-suited organisation
level for integrating such exercises into
innovation practice are Cluster Platforms
of different kinds (Excellence Poles,
Thematic Innovation Cooperation projects)
that mobilise the actors for strategic
cooperation.
CHAPTER 3 > Policy Profile of the Flemish Innovation System:
An ‘Innovation Platform’ with leaders from
business and research community can play
an important role in making choices. The
success of the Finish Innovation Council has
inspired other countries (recently The
Netherlands) to install a similar body. The
Federal government in Belgium has done
the same (with a ‘lower profile’).
2. On the basis of this process of convergence all decision makers on the political
level that have authority on the relevant
policy domains, have to be involved in the
orga-nisation of the 5-year policy cycle of
the Innovation Plan, to be presented to
the Parliament (according the Innovation
Law of 1999). This Plan has to steer the
policy instruments in a coordinated way.
The po-licy design has to be build on
sound evaluation of effectiveness of
instruments and actions. This is a strategic
capacity that has to cope with the challenge of evaluation policy mixes and systemic impacts.
Evaluation in Flanders is still weak but can be
upgraded in the follow-up of existing long
term projects as the Innovation Pact, the
international benchmarking with Knowledge
Regions or the structural underpinning of the
new programme on Excellence Poles.
3. On the level of administrative coordination and implementation of policies in
cooperation with all intermediaries an
29
IWT-STUDIES > >> 49
Innovation Network has already been setup by IWT among all innovation support
actors. The organisational platform can
develop into a ‘system management
information system’ to support and monitor the innovation activities in the framework of the policies decided. Direct information exchange between different
administrations is also to be institutionalised to enhance coordination.
The Flemish Innovation System has come to
maturity thanks to a dynamic innovation policy of the Flemish government that already
has developed some features of Third
Generation Innovation Policy. To make the
transition towards a knowledge driven economy a strategic innovation policy is needed
to organise coherence in the activities of the
actors in the innovation system and redirect
economic specialisations. A key problem for
innovation governance in Flanders is the formalisation of the policy cycle. The development of capabilities for strategic intelligence
and interactive policy making in innovation
governance are part of the evolution to a
knowledge-based society.
Innovation policy must be high on the
agenda to make this transition a success. The
start of the new Ministry for Sciences and
Technological Innovation should be an occasion to have an overall policy debate on
governance for Third Generation Innovation
Policy.
ANNEX
Flemish Science & Innovation System
Demand
International
Environment
S&I Policy Domain
Flemish Parliament
Federal Parliament
Commission S&T Policy
viWTA
Society
Missions
Councils
Flemish Government
SERV
Minister of Education
VRWB
Minister of Economy
Federal Government
Minister Ec Affairs
EU
(6FP)
International
Regulation
OECD
UNO
Minister S&TI
Agencies
PMV
EWBL
VAO (GOM)
AWI
IWT
PODWB
Sustainable
Development
FWO
VIN
Pact of Vilvoorde
Innovation Pact
Enterprise Sector
Consumers
Individualisation
Actors
Actors
- R&D Performers
(2000)
- Technological
Research (3)
IMEC
VIB
VITO
Intermediaries
- High-Tech Start-ups
(600)
- Interface Services (5)
- Spin-offs (200)
- Collective Research
Centres
- Innovative SME
(10.000)
- VIS networks
RIS (5)
TIS (100)
ClientSupplier
relations
Flexible
specialisation
Networking
Education &
Research
- Excellence Poles (8)
- Scientific Research
(5)
- Universities (7)
Higher Education
- Training
- BAN
Stakeholder
Organisations
Stakeholder
Organisations
- VOKA
- VLIR
Economic
Globalisation
Specialisation
Standards
MNEs
International
Centres of
Excellence
Mobility
- AGORIA
Internationalisation
of R&D
Spillovers
Support Structures
Finance
KIBS
Private Consultants
(Market research,
Management,
IPR)
Venture Capital
30
ICT
Belgacom/Telenet
Liberalisation
ANNEX
IWT-STUDIES > >> 49
INSTITUTIONAL MAPPING OF THE
F L E M I S H S C I E N C E & I N N O VAT I O N
SYSTEM: COMMENTS
1. The Science & Innovation System in a small open
economy as Flanders is subject to important pressures from the international environment. The
knowledge suppliers, research institutes and business R&D, are constraint in their decisions by the
dynamics of economic globalisation and internationalisation of R&D where multinational enterprises (MNEs) and international centres of excellence in science co-determine the development of
local specialisations. International regulations by
organisations as the European Union (EU) increasingly determine national regulations. The Lisbon
strategy is the strategic framework for Flemish
policy makers too. The EU Framework Programme
for Research is setting standards for national S&T
policies. Demand conditions are another determining influence on the direction (public missions,
consumer tastes) and organisation (articulation of
intermediate demand in client-supplier networks)
of R&D and innovation in Flanders.
2. The Science & Innovation policy domain is
marked by the history of institutional reforms that
has divided powers between federal and regional
governments in Belgium.
- The Federal government with the Minister of
Economic Affairs controls fiscal policy for R&D
and still has a role in certain international
research domains as space research. PODWB is
the federal administration for science policy.
- The Minister of Sciences and Technological
Innovation (ST&I) in the Flemish government
organises horizontal innovation policies through
‘inter-cabinet’ negotiations with her colleagues.
AWI is the policy administration for Science and
Innovation; IWT and FWO are the main agencies
for support to applied and fundamental
research. But they have to coordinate with other
administrations like the one for economy
(EWBL), and with other public bodies like PMV,
the public holding company that manages mechanisms for stimulating venture capital and VAO
(GOM), the agency that is the front office for
government support to enterprises.
- The Flemish Parliament has recently established
its own Institute for Technology Assessment
(viWTA) to support social debates on technology
and society. The councils or strategic advisory
boards represent the stakeholders in each policy
domain: VRWB for S&TI policy, SERV for economic policy at large. Stakeholder organisations
are also much involved in long-term social contracts as the Pact of Vilvoorde and the
Innovation Pact. IWT has a special role of coordinating the intermediary organisations that rely
heavily on these stakeholders in an innovation
network (VIN).
31
3. The sector of Education and Research
Institutions is dominated by the universities (7 in
number (with research efforts concentrated in a
few) which have formed alliances with the higher
education institutions. VLIR is their representative
organisation. The public research institutes are
strategic actors in the technology domains of
materials and environmental technologies (VITO),
biotechnology (VIB) and micro-electronics and
nano-technology (IMEC). There are also 5 smaller
institutes in different scientific research domains.
4. The Enterprise Sector is a differentiated sector,
also from the point of view of R&D and innovation
potential. Besides the limited group of permanent
R&D performers (2000), there is a large group of
about 10.000 innovative firms (on a total of 18.000
firms with more than 10 employees), that are technology intensive in different degrees. Researchbased start-ups (created for the largest part in the
nineties), of which university spin-offs are a part,
are estimated at 600. VOKA (the general federation of Flemish enterprises) and AGORIA (the federation for the technology enterprises) are the
representative bodies, besides other branch
organisations.
5. Intermediaries have a role as bridging institutions, facilitating knowledge transfer between
public research and business, but also and increasingly between the actors within the business and
research sectors. They depend heavily on government support. Collective Research Centres have
been set-up by the traditional sector organisations
for research and technological support since the
late fourties. They have served as a role model for
other collective research on non-profit basis but
also for the ‘Excellence Poles’ that are strategic initiatives of the Flemish Government (demand
driven) in new areas as: Broadband, Mechatronics,
Logistics, Food Technology or Environmental
Technologies. But this type of (large) organisations
is also inspired by the network model of (smaller)
initiatives supported in the IWT program for innovation cooperation (VIS): thematic innovation
cooperation (TIS) or regional innovation cooperation (RIS). The different Business Angel networks
have been merged in one scheme (BAN).
6. The Support Structures provide a general infrastructure on the level of finance or ICT.
Liberalisation is also impacting this infrastructure.
The competition between the regional telecom
provider Telenet (set-up by the Flemish government) and the national incumbent Belgacom has
spurred penetration of broadband. Knowledge
Intensive Business Service Providers (KIBS) are
acknowledged to be a ‘second’ knowledge infrastructure, besides the public knowledge infrastructure, because of their growing role in the diffusion
of non-technological knowledge.
R E E D S V E R S C H E N E N B I J H E T I W T- O B S E RVAT O R I U M
VTO-STUDIES:
1/
Het Vlaams Innovatiesysteem: een nieuw statistisch beleidskader
1annex/ Theoretische en empirische bouwstenen van het ‘Vlaams Innovatie Systeem’
2/
Innovatiestrategieën bij Vlaamse industriële ondernemingen
3/
Octrooien in Vlaanderen: technologie bekeken vanuit een strategisch perspectief
Deel 1: Octrooien als indicator van het technologiesysteem
4/
De impact van technologische innovaties op jobcreatie en jobdestructie in Vlaanderen
5/
Strategische verschillen tussen innovatieve KMO’s : Een kijkje in de zwarte doos
6/
Octrooien in Vlaanderen: technologie bekeken vanuit een strategisch perspectief
Deel 2: Analyse van het technologielandschap in Vlaanderen
7/
Diffusie van belichaamde technologie in Vlaanderen: een empirisch onderzoek op basis
van input/outputgegevens
7 annex/ Methodologische achtergronden bij het empirisch onderzoek naar de Vlaamse
technologiediffusie
8/
Schept het innovatiebeleid werkgelegenheid?
9/
Samenwerking in O&O tussen actoren van het “VINS”
10/ Octrooien in Vlaanderen: technologie bekeken vanuit een strategisch perspectief
Deel 3: De internationale technologiepositie van Vlaanderen aan de hand van octrooi
posities
Deel 4: Sporadische en frequent octrooierende ondernemingen : profielen
11/ Technologiediffusie in Vlaanderen. Enquêteresultaten - Product- en diensteninnovatie:
evolutie 1992-1994-1997
12/ Technologiediffusie in Vlaanderen. Enquêteresultaten - Hoogtechnologische producten:
evolutie 1992-1994-1997
13/ Technologiediffusie in Vlaanderen. Enquêteresultaten - Procesautomatisering:
evolutie 1992-1994-1997
14/ Technologiediffusie in Vlaanderen. Methodologie en vragenlijst
15/ Financiering van innovatie in Vlaanderen. Het aanbod van risicokapitaal.
16/ Product- en diensteninnovativiteit van Vlaamse ondernemingen. Enquêteresultaten 1997
17/ Adoptie van procesautomatisering en informatie- en communicatietechnologie in
Vlaanderen. Enquêteresultaten 1997
18/ Performantieprofiel en typologie van innoverende bedrijven in Vlaanderen. Waarin verschillen innoverende bedrijven van niet-innoverende bedrijven. Enquêteresultaten 1997
19/ De werkgelegenheidsimpact van innovatie: is de aard van de innovatie-strategie belangrijk?
20/ Samenwerking in O&O tussen actoren van het “VINS”
Deel 2: Samenwerking in een aantal specifieke technologische disciplines
32
I W T- S T U D I E S :
21/ Clusterbeleid: Een innovatie instrument voor Vlaanderen?
Reflecties op basis van een analyse van de automobielsector
22/ Benchmarken en meten van innovatie in KMO’s
23/ Samenwerkingsverbanden in O&O en kennisdiffusie
24/ Financiering van innovatie in Vlaanderen. De venture capital sector in internationaal
perspectief
25/ De O&O-inspanningen van de bedrijven in Vlaanderen - De regionale uitsplitsing van
de O&O-uitgaven en O&O-tewerkstelling in België 1971-1989
26/ De O&O-inspanningen van de bedrijven in Vlaanderen - Een perspectief vanuit de
enquête voor 1996-1997
27/ Identificatie van techno-economische clusters in Vlaanderen op basis van input-output-
gegevens voor 1995
28/ The flemish innovation system : an external viewpoint
29/ Geïntegreerd innovatiebeleid naar KMO’s toe. Casestudie: Nederland
30/ Clusterbeleid als hefboom tot innovatie
31/ Resultaten van de O&O-enquête bij de Vlaamse bedrijven
32/ ‘Match-mismatch’ in de O&O-bestedingen van Vlaamse en Belgische bedrijven in termen
van de evolutie van sectoriële aandelen
33/ ‘Additionaliteit’- versus ‘substitutie’-effecten van overheidssteun aan O&O in bedrijven in
Vlaanderen: een econometrische analyse aangevuld met de resultaten van een kwalitatieve
bevraging
34/ Het innovatiebeleid in Ierland als geïntegreerd element van het ontwikkelingsbeleid: van
buitenlandse investeringen naar ‘home spun growth’
35/ ICT Clusters in Flanders: Co-operation in Innovation in the New Network Economy
36/ Het fenomeen spin-off in België
37/ KMO-innovatiebeleid levert toegevoegde waarde aan Vlaamse bedrijven
38/ Technology watch in Europa: een vergelijkende analyse
39/ ICT-Monitor Vlaanderen: Eindrapport van een haalbaarheidsstudie
40/ Innovation policy and sustainable development: can public innovation incentives make a
difference?
41/ Spinning off new ventures: a typology of facilitating services
42/ Research mandates for technology transfer: International policy
43/ Subregionale O&O-inspanningen van de bedrijven in Vlaanderen
44/ De intelligente omgeving: de noodzaak van convergerende technologieën en
een nieuw businessmodel
33
45/ Innovatie-inspanningen van Vlaamse ondernemingen: een exploratie van de CIS-3-enquête
46/ R&D activities of the Business Sector in Flanders: Results of the R&D Surveys in the Context
of the 3% Target
47/ Patterns of Innovation in the Flemish Business Sector. A multivariate Analysis of CIS-3 firm-
level Data
48/ 'Making the Difference'. The Evaluation of 'Behavioural Additionality' of R&D Subsidies.
34
BIOGRAPHY
JAN LAROSSE
Jan Larosse is Scientific Advisor at IWT Flanders,
the Innovation Agency of the Flemish government (Belgium). He coordinates the IWT
Observatory, the analytical unit of IWT. His work
relates to innovation monitoring and innovation
studies covering themes such as the knowledge
economy, cluster analysis and innovation systems,
as well as policy evaluation and additionality.
W H AT I S I W T- F L A N D E R S ?
The Institute for the promotion of Innovation by Science and Technology in Flanders (IWT-Flanders)
was established in 1991 by the Flemish government as a regional public institution to provide R&D
and innovation support in Flanders. In order to execute this task IWT has several financial tools
available and an annual budget of 250 million EUR to support projects. In addition to direct funding,
a variety of services is provided to the local industry in the field of technology
transfer, partner search, information about international subsidy options, etc. IWT has also an
important mission as co-ordinator, aiming for a strong co-operation between all organisations in
Flanders offering technological innovation services to companies.
Over the years IWT has expanded into the knowledge center for R&D and innovation in Flanders.
W H AT I S T H E I W T- O B S E RVAT O RY ?
The IWT-Observatory functions as a monitoring and analysis unit, supporting the role of IWT as a
Knowledge Centre for R&D and Innovation in the Flemish Innovation System.
Being a part of Innovation-monitoring by the Flemish Government, the IWT-Observatory analyses
collects and analyses indicators on the R&D and innovation activities of companies and other actors
in the Innovation System in Flanders.
The Observatory has a supporting function towards IWT’s operational activities in evaluation and
service support, supplying analytical information concerning innovation aspects and companyspecific data, and developing systems for performance measurement.
The analytical capacity of the Observatory is built upon a multitude of internal and external sources,
the results of innovation studies and IWT specific data about companies, and recombined into knowledge components for stimulating innovation and innovation policy in Flanders. Results are published
in IWT-Studies.

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