Wg6 tatjana volkova

Research and innovation – case of Latvia EUA Convention, 29th of March, 2007 Dr., prof. Tatjana Volkova

1.

2.

3.

The role of Universities in CREATIVE ECONOMY “Absorptive capacity” of Latvia Challenges for R&D policies

1

1. University’s role in the economy (traditional view)

Ability to transfer research to industry Generate new inventions and patents Spin-off technology in the form of start-up companies; Such view makes work of Universities more economically relevant but more fundamental contributions are missed

“University as engine of innovation” paradigme

Oversimplifies –transmitter-receiver system; It assumes there is one-way path from university based science and R&D, to commercial innovation and generating jobs and economic growth ; Increasing volume of the signal will not necessary result in effective absorption of transmission if the region’s receivers are not functioning properly;

2

Regions “absorptive capacity” - to effectively absorb and utilize the scientific and technological capabilities coming out of university (Wesely Cohen, Daniel Levinthal)

University is necessary but insufficient element of economic growth; Strong university innovations does not necessarily translate into strong local high-tech industry; The region must have the will and capacity to transform and capitalize what the university produces; Presence of a local “ecosystem of creativity”

3

Ecosystem of creativity Places that with their universities, create an environment which attracts of both new ideas and creative and knowledgeable people; “universities effect economic growth more through the production of human capital than from research and development” (Harvey Goldstein, Joshua

Drucker)

The shift from older industrial economy to an emerging Creative economy

In the past natural resources and physical capital were the predominant drivers of economic growth; Now – human creativity is the driving force of economic growth; Innovation and economic growth accrue to those places that can best mobilize human’s creative capabilities;

4

Investing in culture for competitive advantage “The UN estimates that creative industries account for 7% global GDP and are growing at 10% per year. As people grow richer and become better educated, they spend more of their income on leisure� activities James Purnell 2005 Minister for Creative Industries

5

Growth of Creative economy USA, 1900. - 1999.g., no (*www.creativeamerica.us)

2000

1821

zinātnieku un inženieru skaits uz 100.000 iedzīvotāju 1500

mākslinieku, rakstnieku un izpildītāju skaits uz 100.000 iedzīvotāju

1000

900

500

411 267

344

55

0 1900

1950

1999

6

Historically authors such as Schumpeter (1934) in the 1930’s and Adam’s (1879) in the 19th century were among the first to postulate the relevance of creativity to economic prosperity.

The European Union predicted in 2000 and confirmed in March, 2004, that Europe is lagging behind the US and Japan in its socio-economic development primarily because Europe is not innovative and entrepreneurial enough.

Economic growth in Creative economy is driven by 3 T’s Role of technology in economic growth; Role of Human capital in economic growth; Technolgy and talent have been mainly seen as stocks accumulating in regions or nations; In reality both are flows;

7

The ability to capture these flows requires Tolerance The openness to new ideas and new people; Places increase their ability to capture these flows by being open to widest range of people across categories of ethnicity, race, national origin, age, social class, sexual orientation.

Universities role in Creative economy Technology – a major recipients of both public and private funding universities are often at the cutting edge of technological innovation; Talent – universities affect talent both directly and indirectly.

Tolerance – large reserach universities help to shape a regional environment open to new ideas and diversity

8

The role in the first T has been overstressed Even more powerful role was neglected Universities are generating, attracting and mobilizing talent and establishing a tolerant social climate Thus comprises a powerful creative hub in regional development

9

2. “Absorptive capacity” of Latvia

Latvia has the highest share of non -innovative firms in the EU and reaches 82,5 % (EIS, Community Innovation Survey 2006); the SII score for Latvia is 0.20 or 47 % the EU25 average and is positioned almost at the very end of the list of EU (behind only Malta, Romania, Turkey); number of reseachers employed by private sector 14,5 % of the total (lowest level in the EU, average – 49%) (source:EC European Trend Chart on Innovation)

GDP dinamics (1990 = 100%) 110 100 90 80 70 60 50 40 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

10

Business R&D expenditures remain at very low level (0,14% of GDP or 32% of total R&D investments, 2006 (54% on average in the EU25); Very low export rates of high-tech products; Very poor indicators related to intellectual property

Expenditures on Research and Development in Latvia 2000-2005 (% of GDP, www.em.gov.lv) 0.6 0,6 0.5 0,5 0.23 0.4 0,4

0.18

0.15

0.17

0.3 0,3 0.2 0,2 0.1 0,1

0.13

0.19 0.11

0.10

0.09

0.08

0.09

0.08

0.17

0.17

0.17

0.16

0.15

2000

2001

2002

2003

2004

0.23

0.0 0,0

Higher education sector

Public sector

2005

Business sector

11

Major challenges for R&D: case of Latvia 1. Increasing the number of researchers, S&E graduates and doctorates; 2. Increasing R&D funding, incl. BERD; 3. More effective exploitation of existing research results

Research in Latvia is mainly performed by research institutes and HEI The following numbers of organisations are currently undertaking research in Latvia :

7 higher educational establishments (including 5 universities); 32 agencies (institutes) and structural units of HEEs; 18 state agencies (institutes); 19 private structures:

12

There are currently 5 500 researchers in Latvia (*www.izm.gov.lv) Business company sector 25%

Higher educational institution sector 52%

Public sector 23%

The scientists’ age structure in the universities in the 2005 in Latvia (*www.izm.gov.lv)

45-54 25%

55-64 31%

35-44 15% 25-34 6%

till 24 0%

65 and more 22%

13

Increasing research staff and S&E graduates

Goal – to reach annual 10% increase in research staff and an annual 5 % increase in the number of students in S&E; Currently 8,6 S&E graduates per 1000 inhabitants in Latvia – 70 % of EU25 average (EIS, 2005) Only 0,4 % graduates obtain doctoral degree;

The amount of the doctoral students and doctor’s degree in the separate countries (*www.izm.gov.lv)

State

Europe in total Sweeden

Doctoral student amount

% from the studious amount

250 000 18 000

11 500

5,3 %

3 100

7,5 %

1 165

6,8 %

206

2,4 %

135

2,7 %

106

0,4 %

6,6 %

Slovenia Estonia

1 251

2,7 %

Lithuania

2 023

2,4 %

1 797

1,4 %

Latvia

% from those who have doctor’s degree

45 000

Finland Czech Republic

Those who have doctor’s degree

14

The dynamics of the doctorates amount in Latvia (*www.izm.gov.lv)

120 100

112

80 85

60 40 20

106

65 48

50 40

52 37

0 1998 1999 2000 2001 2002 2003 2004 2005 2006

Weakness: low number of doctorates

Degree structure Country

Promotions

Finland, 2003

1257

Latvia, 2002

78

Latvia, 2003

65

Latvia, 2004

85

Latvia, 2005

105

15

Consequences: success in FP6

Share of participation in EU contracts

Share of EU contribution to FP6 contracts

9,96%

10,4%

1,22%

0,41%

Nordic States DK, FI, SE, IS, NO Baltic States EE, LT, LV

Graham Stout, EC, March 2005

Expenses of R&D have rissen in last years in Latvia Expenses have reached 0,57% from GDP which is the 3rd lowest ration in the EU. The R&D expenses in Latvia have increased on average per 18% during the year in period form 2001 till 2005.

It is the most fast-growing rate among all other EU countries.

(*http://epp.eurostat.cec.eu.int/portal/)

16

Funding R&I www.em.gov.lv

the target that the total expenditure on R&D has to constitute 1.5% of GDP in 2010 or annual increase at least 0,15 % of GDP; in comparison: EU – 1,93 %; USA -2,7

%; Japan – 3,12%, China – 1, 3% of GDP;

R&D funding by funding sources in Latvia, 2005 (*www.izm.gov.lv) National budget 46%

the funding of the universities 1%

International sources 18%

Investment of the business companies 35%

17

EU structural funds, 339 mlj Euro, 2007-2013

development of HR and attracting to research; to return of Latvian scientists to work in research institutions in Latvia; development of reserach infrustructure and applied reserach;

More effective exploitation of existing research results Competence centres; Business incubators; Industrial parks; Science an technology parks; Clusters (wood, pharmaceutical industries);

18

Strengthening of cooperation between applied science and business sector

6 technology transfer contact points at Universities: ~ 800 000 Euro were

granted for implementation of the projects in 2006 – 2009; It is planned 95 commercialization offers, 70 agreements with industry and 15 patents application;

Riga Technical University

2 offices of technology transfer Operations merged with potential projects for the commercialisation of reserach results via system of Connect Latvia (NGO); ITs primary goal is to stimulate the development of growth companies by linking entreprenuers with sources of know-how and capital; accelerate the commercialization of start-ups;

19

FUTURE VISIONS of RTU 1. To reach funding for Science and Research up to 50% from total turnover in 5 years 2. To achieve a status of Research University 3. In 21st Century- 3 Nobel Price Winners from RTU

NOBEL PRIZE WINNER (1909)

VILHELM OSTVALD FOUNDER OF PHYSICAL CHEMISTRY PROFESSOR OF RIGA TECHNICAL UNIVERSITY (1881 – 1887)

20

This struggle between creativity and conformity within our education institutions will have considerable industrial and economic consequences and as such will have to be seriously addressed during the coming years.

We cannot solve tomorrow’s problems using the same skills and knowledge we had when we created them Albert Einstein

21

The amount of doctoral students in the course thematic groups in Latvia (*www.izm.gov.lv) The course thematic group

Doctoral student

Amount

Those who have doctor’ s degree %

Amount

%

Education

231

13

6

6

Humanities

201

11

16

15

Social sciences, commercial and law

625

35

24

22

Science, maths and IT.

228

13

14

13

Engineering, manufacturing and building Agriculture

278

15

23

22

35

2

2

2

Health care and social prosperity

165

9

21

20

34

2

0

0

1797

100

106

100

Services Total

22

Benchmarking with Finland and Sweden Information collected at Nordic and Baltic NCP seminars and from the INTERNET. Dr. A.Ūbelis Latvia FP5

Finland FP5

Sweden FP5 (Approx)

Latvia FP6

Finland FP6

Sweden FP6

Number of projects

695

5006

4500

765

More than 2500

1197

Number of successful projects

210

1579

1200

164

628

376 (719)

Coordinated projects

12

241

123

15

341

47

Success rate, %, Money MEUR

30.0%

31,5%

25,0%

21,4% 15,3

25,5% 214

31,4% 272,0

Updating time

February 2003

Final Febr.2004

January 2002

November 2005

May 2005

January 2004

% of RTD fin-ancing from GDP

0,2-0,4 Year 2001

3,49 Year 2001

4,27 Year 2001

0,38 Year 2005

3,49 Year 2002

4,27 Year 2002

23