social situation observatory – social inclusion and income distribution ikinet limitations of...

Social Situation Observatory – Social inclusion and income distributionSocial Situation Observatory – Social inclusion and income distribution

IKINETLimitations of regional innovation

indicators

Warsaw, 24 May 2006


Growing importance attached to development of indicators to monitor need for policy action and effectiveness of policy measures already implemented

As regards innovation, EU policy consists of two strands: innovation policy per se to strengthen EU as a

knowledge-based economy cohesion policy to achieve more balanced pattern

of regional development


EU innovation policy - increased emphasis on policy action at regional level to take account of regional strengths, weaknesses and ambitions …

… but also on cooperation, exchange of experience and establishment of trans-regional networks


EU cohesion policy progressively re-oriented towards Lisbon objectives and especially towards promotion of innovation

Recognition that capacity to innovate varies widely across EU regions, especially after enlargement, reflecting wide differences in access to knowledge and ability to exploit it


If weaker regions are to develop, two necessary sets of conditions:

1. they need a suitable endowment of basic infrastructure (transport, telecommunications, energy, environmental facilities)

and a labour force with appropriate skills and training


2. There is a need for: access to new technology efficient dissemination of new knowledge and its

effective use creation of networks and clusters to encourage

cooperation and realise economies strengthening of R&D capacity establishment of effective links with global

centres of technological excellence


Indicators at present focus on national rather than regional circumstances (European Innovation Scoreboard)

But differences between regions within countries as important as between Member States

Output as well as inputs indicators are included, but latter easier to measure, eg:

R&D expenditure by sector

R&D personnel by sector


Output indicators used have a number of defects:patents registered at EPO under-record patent activity in new Member States especially

Number of patent applications per million inhabitants, 2000-2002

Top 25 regions 450

Bottom 25 regions 2.4

Slaskie 2.9

Mazowieckie 8.7


And are biased in favour of manufacturing relative to service enterprises

Enterprises in manufacturing and services applying for at least one patent in 2000

0

2

4

6

8

10

12

14

16

18

20

PL CZ DE ES FR IT HU NL FI SE UK

% of total

Manufacturing Services


There are also a number of context indicators:

1. Education attainment levels of work force

2. Participation in lifelong learning

3. Employment in high/medium tech manufacturing and high tech services

4. Innovating enterprises


Problems in both defining the relevant indicators to use and in their timeliness:

latest data on R&D expenditure by region are for 2002 for a number of countries – Poland, the Czech Republic, Hungary and Spain

but for 2001 for some - Germany, France and the Netherlands

for 2000 for Italy an for 1999 for UK and Greece

latest CIS is for 2000 and not split by region


Apart from being dated and incomplete, these indicators do not capture main aspects – in case of developing regions, capacity to absorb and diffuse innovations

It is widely argued that regions need to undertake some R&D to be able to absorb new ideas and integrate them into the production process

But question is how much?


There are big differences between EU regions in terms of R&D expenditure relative to GDP

R&D expenditure relative to GDP, latest year

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0

EU25 average

EU25 - Highest 25regions

EU25 - Lowest 25regions

Slaskie

Mazowieckie

% of GDP

Business Other


Are these big differences between regions justifiable?

Is expenditure in many lagging regions too low to enable them to absorb new knowledge?

How much higher does it need to be?


Some of the context indicators are clearly relevant as regards absorption capacity

- education levels in particular, especially number with tertiary qualifications

These also vary widely across regions


0

5

10

15

20

25

30

35

40S

lask

ie

Ham

burg

Mad

rid

Ile d

eF

ranc

e

Cam

pani

a

Ste

ierm

ark

Wal

es

0

5

10

15

20

25

30

35

40

EU25

top 25 / bottom 25 regions

% of population 25-64

Population aged 25-64 with tertiary education, 2004

Source: LFS


Number of workers with upper secondary education

also important and also differs between regions …


0

20

40

60

80

100

Sla

skie

Ham

burg

Madrid

Ile d

eF

rance

Cam

pania

Ste

ierm

ark

Wale

s

0

20

40

60

80

100

EU25

top 25 / bottom 25 regions

% of population aged 22

Population aged 22 with upper secondary qualifications, 2004

Source: LFS

but difficulty in interpreting the differences


Importance of employment high and medium-tech

manufacturing relevant as well

But again need to interpret the differences carefully


Employment in high and medium-tech manufacturing

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

Slaskie Hamburg Madrid Ile deFrance

Campania Steiermark Wales

% % total employed% working-age population


IKINET concerned with the transmission process

with the means by which new technology or knowledge is transmitted between enterprises and regions

Objective – to develop new and more suitable indicators


A number of potential transmission mechanisms explored through case studies and questionnaires:

supplier-customer relations

supplier-supplier relations

university/research centres-enterprise relations

worker movements between enterprises and regions


Concern not only to collect data but to gain a better understanding of knowledge generation

and its transmission across enterprises and regions

Identification of aspects which could be monitored – eg links between enterprises and research centres

And also identification of existing data which could be used to monitor developments


Two principal examples: LFS, or administrative records, to measure

movements of qualified workers between jobs …


Workers changing job in medium-tech manufacturing in EU, average 2003-05

% of total employed in sector in previous year

EU 5.8 3.8 2.0 0.3Poland 3.2 2.6 0.6 0.0

Slaskie 4.5 4.5 0.0 0.0Hamburg 6.2 5.4 0.8 0.6Ile de France 6.0 2.7 3.3 0.8Madrid 12.8 2.6 10.1 2.2Campania 3.8 1.6 2.2 0.0Steiermark 9.3 8.2 1.1 0.0Wales 11.7 8.0 3.7 0.0

Change of job Change of

sectorSame sector

Change of region


Secondly, data from Dublin Foundation to measure

influx of foreign-owned enterprises into medium-tech manufacturing and creation of jobs …


Number % of total

Total cases 185 100of which:Manufacturing 128 69

Engineering 69 54

High-tech 12 9

Medium-high tech 57 45

Cases of job creation through FDI in Poland: sectoral division, 2005


Nationality of enterprises undertaking FDI in engineering industries in Poland, 2005

0

5

10

15

20

25

30

35

DE US ES SE JP FR KOR NL-KOR

CH CN HK IT UK

% of total


Regional division of FDI in engineering industries in Poland, 2005

0 10 20 30 40 50 60

Dolnoslaskie

Slaskie

Mazowieckie

Lodzskie

Zachodniopomorskie

Lubuskie

Pomorskie

Podkarpackie

Lubelskie

Warminsko-Mazurskie

Malpolskie

Wielkopolskie

Swietokrzyskie

Podlaskie

Opolskie

Kujawsko-Pomorskie

% employment, 2004% jobs created


Jobs created through FDI relative to regional employment in engineering, 2005

0 5 10 15 20 25 30 35

Dolnoslaskie

Slaskie

Mazowieckie

Lodzskie

Zachodniopomorskie

Lubelskie

Pomorskie

Podkarpackie

Lubuskie

Warminsko-Mazurskie

Malpolskie

Wielkopolskie

Swietokrzyskie

Podlaskie

Opolskie

Kujawsko-Pomorskie

% of employed in engineering in 2004

social situation observatory – social inclusion and income distribution ikinet limitations of...

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income distribution

eu policy

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policy action

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