Translating corporate R&D behaviour into policy support: an interview with the IPTS Director

Most of those familiar with the EU’s Barcelona goal of investing 3% of GDP in research by 2010 will also know that its designers intended for two-thirds of this investment to come from the
private sector, bringing private-sector research and development (R&D) spending up to 66% of total spending has proved no easy feat however, with the figure remaining stubbornly at around
55%.

So how should policy-makers go about encouraging private sector investment? Is it a case of lowering the tax burden? Or providing subsidies? Increasing protection of intellectual property? The
perfect policy mix has thus far remained elusive both in Europe and elsewhere.

A conference in Seville, Spain, on 8 and 9 October sought to increase understanding of the ‘Role and Dynamics of Corporate R&D’. The event was organised by the Institute for Prospective
Technological Studies (IPTS), one of the research institutes of the European Commission’s Joint Research Centre (JRC), in collaboration with the European Commission’s Directorate-General for
Research.

‘We know a great deal about the public research sector – about what is being spent, and on what. We also know the motivations for spending in the pubic sector,’ explained Peter Kind, Director
of the IPTS, in an interview with CORDIS News.

With the Lisbon Agenda requiring a shift in spending priorities within the corporate sector, policy-makers need to know as much about that sector as they do about the public sector, said Mr
Kind, explaining the motivation for the conference.

The IPTS seeks to promote and enable a better understanding of the links between technology, economy and society. Its mission is to provide customer-driven support to the EU policy-making
process by researching science-based responses to policy challenges that have both a socio-economic and a scientific or technological dimension.

In this capacity, the IPTS seeks to establish and pass on to policy-makers what the likely impact of a particular policy would be on corporate behaviour. ‘We need to provide policy-makers with
the most robust information possible,’ says Mr Kind.

What better way to collate this information than to bring together some of the best-known members of the scientific community in this field within the context of a scientific conference,
thought the IPTS.

As Mr Kind emphasises, while the IPTS does get involved in the science behind industrial investment, its main focus is on the translation of the science into information that policy-makers will
be able to use. Other conferences have addressed different aspects of corporate investment from more specific angles, but the translational aspect makes this conference unique.

‘People have done excellent academic research, but hadn’t thought how the results could be useful for policy. It would be nice if we could bridge that gap,’ says Mr Kind. ‘To be useful, the
output has to be taken up.’

Ultimately the kind of analysis done by the IPTS should enable policy-makers to implement the optimum policy mix, establishing the conditions that encourage companies to invest in research. But
the IPTS’ task is not as simple as pinpointing the single policy that will create such an environment. An intricate policy mix addressing such areas as visa regulations, intellectual property
rights and taxes is required, but policies in each of these areas can have unexpected effects on other policy areas without a holistic approach.

The analyses are also useful for companies themselves, allowing them to see what is driving other companies to invest.

At the moment, Europe would not pretend to be close to the optimum policy mix, says Mr Kind. Is the US much closer to this target? The figures on corporate R&D investment in the US would
suggest so, but Mr Kind is not so sure. ‘The US has a different policy mix and a different industrial structure. It will not necessarily remain a more robust industrial structure for the next
10 years,’ he says. Europe still counts premium quality goods and niche markets among its assets, making the continent more resistant to delocalisation, according to the Director.

The IPTS stops short of offering recommendations on how to achieve the most favourable policy mix, but instead offers ‘reflections on the direction to be taken’, explains Mr Kind. ‘In this
field, our customers, for example the Commission’s DG Research, are very capable policy analysts in their own right, but often lack reliable, up to date information and information that has
been put in a form in which they can easily assimilate in their own thinking,’ he adds.

Colleagues from the Knowledge for Growth Unit within the IPTS gave an overview of some of the ‘reflections’ passed onto DG Research: the EU should make maximum use of knowledge generated
outside of Europe; the EU should not limit its focus to those Member States achieving the highest levels in R&D spending; it is best to look ahead to the technologies of the future
(including nanotechnology) rather than try to win the last race (information technology); Europe needs a strong public research base and high quality education; policy-makers should look at
where individual countries’ strengths have been historically, and should not neglect low-technology exclusively in favour of high technology.

Monitoring industrial research and innovation is just one of the ways in which the IPTS, in collaboration with DG Research, is helping the EU to build a European Research Area. ERAWATCH is
another tool, a web service documenting national research profiles, policies, organisations, and programmes. The ERAWATCH Intelligence Service also develops further analysis and reporting
activities on policies, trends and the factors influencing them.

The idea is that this up-to-date evidence base will help policy-makers to form policies and then to monitor their impact. Information is updated by country correspondents and checked for
quality by Commission services.
In his closing remarks in Seville, Mr Kind announced that the success of the two-day event, as well as feedback from participants, had convinced him of a need for a follow-up event. He invited
participants to return in two years for a second conference on corporate R&D.