Posts Tagged ‘knowledge economy’

EFP Brief No. 193: Building Foresight Capacities for the Modernisation of the Russian Economy

Monday, September 19th, 2011

The efficiency of the national innovation system in Russia is the key issue in the transition from a resource-based to a knowledge-based economy. The President’s programme of technological modernisation of industries announced in 2010 envisages a set of systemic policy measures aimed at bridging the gaps between key stakeholders, i.e. business, R&D institutions, universities and government. S&T foresight is considered as one of the key instruments to identify national S&T priorities and formulate a long-term perspective for S&T development and innovation in Russia.

Russian Innovation System Needs Boost

The Russian national innovation system (NIS) has been facing problems hampering the transfer of R&D results to the real economy. Despite increasing public R&D funding, the output measured in the number of international publications and their citation, the innovation activities of industrial enterprises and the technology balance of payment have been deteriorating. The share of non-budgetary R&D funding in Russia is much less compared to more developed countries, network communications between major NIS stakeholders are underdeveloped and business participation in the formulation of the national R&D agenda is very limited. All this results in a rather low level of R&D investment performance.

In recent years, the Russian government has undertaken a number of initiatives aimed at increasing NIS efficiency, and foresight methods are considered as one of the key tools for orienting the technological modernisation of the national economy.

The crisis of 2008-2009 has sensitised the Russian business community to issues concerning the longer-term prospects of the future development. In this environment, the broad discussion of foresight results has triggered a burst of interest in forward-looking activities in Russia – both at the government level and in many large companies. Government and business representatives have started to perceive foresight exercises as a practical instrument for setting strategic goals and discovering alternative pathways to achieve them.

Among the latest major steps to enhance productivity of Russian enterprises are several government initiatives:

  • Creation of a system of technology platforms
  • Innovation programmes for the largest Russian companies fully or partly owned by the state
  • Plans to establish a world-class innovation cluster in Skolkovo (Moscow suburban area)
  • Promotion of development institutes (Russian Venture Corporation, Rusnano and others)

All of the above-mentioned initiatives to a greater or lesser extent are based on the results of previous nation-wide foresight exercises, including the two cycles of selecting national S&T priorities and critical technologies in 2006 and 2011 as well as the large-scale S&T foresight projects covering all major areas of research, including a national S&T Delphi survey and the recent study of prospective S&T clusters promising the highest social and economic return.

The post-crisis realities highlighted a need for more detailed analyses of prospective S&T studies with particular attention to be paid to the practical orientation of the national S&T system and bridging the gap between the major components of the Russian triple helix: S&T, business and the government (Figure 1).

Identifying Future Demand for Goods & Services

Completed Foresight Activities

Technological modernisation is one of the most important issues on the political agenda in Russia today. That is why the federal authorities responsible for innovation development have initiated a system of activities to facilitate innovation processes in industries and bridge the gaps between research institutions, universities and businesses. The key actors in this process are the Government Commission on High-Technology and Innovation, the Ministry of Education and Science of the Russian Federation and the Ministry of Economic Development of the Russian Federation.

In 2006, the Russian president approved two lists of eight S&T priorities and 34 critical technologies, respectively, based on which R&D funding was distributed among the government’s major S&T related programmes. In 2009, the Ministry of Education and Science initiated a process of revising national critical technologies, as part of the regular revision of the national S&T priorities, employing the methodological approaches developed in 2008. Compared to the 2006 lists, the revised ones could draw on a much broader basis: the National S&T Delphi allowed to identify the future demand for goods and services to be supported by technological development.

In addition, experts analysed the national system of social and economic goals, which were formulated in the Concept of the National Socio-economic Development 2020 as well as in a number of other major strategic documents of the Russian Federation. The major government bodies, state academies of sciences and largest state-owned corporations submitted their proposals for revising the national S&T priorities and critical technologies, which were analysed in expert groups composed of leading Russian researchers, industrialists and government officials.

Based on the results of the surveys and discussions, the expert panel drew up a list of prospective innovative goods and services involving new technologies. The technology areas promising the most innovative potential were identified and compiled in revised lists of S&T priorities and critical technologies that were approved by the Russian president in July 2011. Altogether six S&T priorities in the civil sector were formulated:

  1. Nanoindustry
  2. Information and communication
  3. Life sciences
  4. Rational use of nature
  5. Energy
  6. Transportation and aerospace

The revised list of critical technologies consists of 25 items. A detailed “passport” was developed for each one containing a brief description of the particular technology, the subject area, the areas of practical application, level of development in Russia compared with the world leaders in the field, production capacities, and an assessment of the global and national markets for innovative products and services related to the technology in question.

The main instrument for the practical implementation of the S&T priorities and critical technologies is the Federal Goal-oriented Programme “R&D in Priority Fields of the S&T Complex of Russia (2007-2013)”, which is complemented by other federal programmes of this kind, such as the “Federal Space Programme in Russia (2006-2015)”, “Programme for Civil Aviation (2002-2015)”, “National Technological Base (2007-2011)” as well as by a number of sectoral and regional programmes.

New Round of Foresight Exercises

The revised S&T priorities and critical technologies provided the starting point for another national S&T foresight exercise with a horizon of 2030, which concentrated on the most promising technology areas while drawing on a number of sector-specific studies. Several hundred experts for every area identified prospective technological clusters with the highest expected social and economic return. The clusters were studied in terms of the following issues:

  • R&D in Russia compared to the world best in the field
  • Major impact
  • Resources required to achieve competitive status in particular clusters, including personnel, R&D expenditure, fixed assets etc.
  • Feasibility of implementing major innovative projects in the next 15 years
  • Potential market size

The main output of the S&T foresight study was to identify the most important trends of S&T development by 2030 as well as emerging and rapidly growing S&T areas. Analysis of the future prospects of the most promising innovative clusters allowed pinpointing those segments of the high-technology markets where Russia can expect to successfully strengthen its competitive advantages.

The participants developed pilot technology roadmaps for two of those clusters (“Catalysts for socially oriented applications” and “Tissue engineering and bioartificial organs”). The roadmaps included demonstration procedures for building a long-term vision and identifying alternative trajectories to achieve the roadmap objectives.

Public-Private Partnership for Innovation Projects

The foresight results led to proposing a number of large-scale innovation projects to be funded as part of public-private partnership programmes, allowed identifying key areas of research to be financed by the Federal Goal-oriented Programme “R&D in Priority Fields of the S&T Complex of Russia (2007-2013)”, provided a basis for formulating measures to build S&T capacities (funding, human resources, etc.) and for analysing potential S&T policy instruments to be introduced.

In the key areas singled out, S&T policy intervention focused on restructuring the public R&D sector, introducing mechanisms to evaluate research, monitoring and evaluating S&T and innovation policy implementation, elaborating efficient, result-oriented mechanisms of R&D funding, including planning of basic research, and building institutions to support R&D and innovation.

Building a Complex National System of S&T Foresight

Based on the results of the last five years, the Ministry of Education and Science has developed a framework for the next round of S&T foresight to be implemented in 2011-2013. This cycle will cover a wide range of activities aimed at increasing innovation activities in Russia and concentrating resources on the most promising S&T areas with respect to particular market segments and innovative products and services. The foresight will cover all areas of S&T and a number of sectors where new technologies can be expected to have the greatest effect (Figure 2).

The major principles of the emerging foresight system include integrating foresight into the S&T policy agenda and equipping policy-makers with practical instruments to facilitate innovation development in Russia. In other words, the new system should follow the fully-fledged foresight approach.

The foresight programme contains several major components:

  • Foresight of key areas of future basic research
  • Macroeconomic scenarios and modelling of principal macroeconomic indicators
  • Development of complex models to forecast indicators of S&T, innovation and educational development
  • Foresight of future demand for S&T related competences and a skilled workforce in S&T and high-tech sectors
  • Development of a series of roadmaps for key sectors of the economy and the most promising groups of products and services
  • Development of a complex S&T and innovation foresight system

The methodological basis for the above-mentioned activities will include a wide range of qualitative and quantitative methods: horizon scanning, bibliometric and patent analysis, statistical models, expert surveys, literature reviews and many others.

It will be important not only to identify the key challenges facing the Russian national innovation system but also to assess global trends of S&T development and, if necessary, to revise the national S&T and innovation capacities to promote the technological modernisation of the Russian economy.

Encouraging Businesses to Innovate

The foresight activities will also cover the two principal instruments initiated by the Government Commission on High-Technology and Innovation: creation of technology platforms and elaboration of “compulsory” programmes for innovation in large companies fully or partly owned by the state. The main goal of these initiatives is encouraging business to innovate and bridge the gaps between industrial enterprises, research units and universities. It is supposed that facilitating the dialog between S&T and businesses will lead to closer cooperation and the formulation of a national research agenda better tailored to the real needs of the economy.

Each technology platform is required to develop a set of strategic documents, including a technology roadmap and a research agenda, and is expected to incorporate foresight results in the process. These strategic documents will provide the basis for adjusting the national R&D effort to the needs of businesses and will be used for identifying promising research projects, which are to be funded through federal programmes and supported through innovation-oriented public procurement practices.

The list of 28 technology platforms has been approved by the Governmental Commission on High-Technology and Innovation.

The innovation programmes that the largest state-owned companies are required to develop also envisage foresight-related activities. The companies’ programmes are supposed to represent a corporate vision of innovation activities with a ten-year horizon. The ambitious goal is to increase competitiveness in local and global markets and improve economic performance according to key indicators within this time frame by means of technological modernisation and radically increasing R&D efforts (e.g., via closer collaboration with universities and other R&D organisations in particular).

Foresight Elements Disseminate into All Levels of Innovation Activities

The newly designed S&T and innovation policy instruments in Russia include foresight tools as an integral part of their approach. The largest state-owned companies are required to include foresight activities into their programmes of innovation. Every technology platform has to develop a vision and a roadmap indicating the main technology-related milestones, barriers and risks. The Skolkovo Foundation has initiated foresight studies aimed at identifying key technology areas to be supported.

Leading Russian technical universities have established a network of foresight centres to build new capacities. This process is supported through the federal programme for the development of universities’ innovation infrastructure. The network will also monitor technology trends in particular areas and support a more systemic involvement of private businesses in foresight studies, thus bridging the gap between key NIS stakeholders.

Authors: Alexander Sokolov                          sokolov@hse.ru

Anna Poznyak                                 apoznyak@hse.ru

Sponsors: Ministry of Education and Science of the Russian Federation, Ministry of Economic Development of the Russian Federation
Type: National exercise
Organiser: Ministry of Education and Science of the Russian Federation, www.mon.gov.ru
Duration: 2011-2013 Budget: N/A Time Horizon: 2030 Date of Brief: June 2011

 

Download EFP Brief No. 193_Building Foresight in Russia

 

EFP Brief No. 185: Practical Applications of Foresight Approaches in U.S. Analytical Studies of S&T Futures

Tuesday, August 2nd, 2011

Foresight activities at the U.S. National Research Council have a long history (nearly 150 years) and have occurred under various names. They are best known in the form of evidence-based analytical studies of particular scientific, engineering, medical or societal issues that provide not only state-of-the-art snapshots of the underlying science but also analyse future needs to maximise gains for science, engineering and medicine as well meeting society’s goals. The impact of the studies is on policymakers, programme managers, the various research sectors (academic, industrial etc.) and the informed public.

Defining Needs for Foresight

In the U.S., the importance of science and technology (S&T) as components of decision-making by the legislative and executive branches of government is well-established. Even when policy issues are not overtly focused on S&T, decision-makers often seek an empirical basis for the outcomes of deliberations. Thus, foresight can be important for writing new laws, establishing and reviewing regulations, improving government programmes, influencing leaders in education and industry and establishing international collaboration.

The National Research Council (NRC) was established in 1917 as the operating arm of the National Academy of Sciences (founded 1863) to carry out a wide range of activities that bring together the top scientific experts to meet the government’s needs outlined above. This paper, therefore, will identify both the typical needs addressed through this process as well as the capacities of the NRC in meeting them.

Defining Needs by Field

The natural inclination of active scientists is to identify problem areas for foresight studies by scientific field. This approach responds to the structure of some government research-funding agencies, particularly where the agency is primarily organised by field (e.g., National Science Foundation) or where an agency dominates the government support of a particular field and is thus concerned with the long-term issue of particular scientific fields. It is also relatively simple to identify the top experts in such fields in the research community since they organise by such fields. Typical examples of topics covered in NRC reports developed along such lines are:

  • Astronomy and Astrophysics in the New Millennium
  • Earth Science and Applications from Space: National Imperatives for the Next Decade and Beyond
  • The Sun to the Earth – and Beyond: A Decadal Research Strategy in Solar and Space Physics
  • Connecting Quarks with the Cosmos: Eleven Science Questions for the New Century
  • New Frontiers in the Solar System: An Integrated Exploration Strategy

Defining Needs by Problem Area

More frequently, the need for foresight analysis is expressed as a problem that requires integrating several fields. The complexity of societal challenges is increasingly well-understood and, as a result, the knowledge needed for sound public policy decisions cannot be found in one scientific realm only. Even government agencies, once seen as singularly focused on a particular discipline, are now reaching extensively across other fields – note, for example, the National Institutes of Health – where they engage in widespread hiring of scientists from engineering, computer science, physics, chemistry and the social sciences.

There is also a strong democratic element to this definition of needs. The public and their elected representatives are increasingly inclined to turn to S&T for answers to problems in their lives. This leads to very broad-scale, integrated approaches to the NRC for analysis. Some recent examples include:

  • Implementing the New Biology: Decadal Challenges Linking Food, Energy, and the Environment
  • Sustainability Linkages in the Federal Government
  • Abrupt Climate Change: Inevitable Surprises
  • The Future of the Nuclear Security Environment in 2015
  • America’s Energy Future: Technology and Transformation

Defining Needs by Government Agency

Given the original mandate of the NRC to respond to analytical needs of government agencies, which is no longer exclusively true, there is a continuing flow of requests from such agencies to assist in setting priorities, identifying future helpful and threatening trends, and defining the parameters of where government investments would achieve the greatest returns.

This need can apply to an entire research portfolio in an agency, or it can focus on just one essential element in the work of an agency. It can address high-level strategic questions or simply the state of a specific research programme. While U.S. agencies now have a wide range of advisory bodies that they create and appoint for their own uses, it remains true that they sometimes need the independent view of a non-governmental NRC with both credibility and independence. For that reason, it is a special kind of foresight need where the assistance of the NRC is sought, whether to serve as a third party to deal with disagreements among agencies or to assist the executive branch in its relationships with the U.S. Congress or with the public. It should be noted as well that many of the requests for studies that come from Congress are focused on a given agency, as legislators attempt to have their oversight activities better informed by advice from the NRC.

Some recent examples include:

  • Incorporating Sustainability into the U.S. EPA
  • Setting Priorities for Large Research Facility Projects Supported by the National Science Foundation
  • Toward a Sustainable and Secure Water Future: A Leadership Role for the U.S. Geological Survey
  • Fostering Visions for the Future: A Review of the NASA Institute for Advanced Concepts

These three areas of needs are not mutually exclusive, but the core approach of a foresight study does drive the type of expertise needed when appointing the committee to oversee the work. Each need also implies the kind of audience that will comprise the principal readers for the final report, and the authors need to keep them in mind as they deliberate. In the end, the authoring committees are only providing advice, not determinative decisions.

Capacity of the National Research Council

The NRC has built up a range of approaches to meeting the needs described above over many years, with the essential categories being consensus studies, convening activities and operational programmes.

Like no other organisation, the NRC can enlist the nation’s foremost scientists, engineers, health professionals and other experts to address S&T issues. Each year, more than 6,000 of these experts serve on hundreds of study committees that are convened to answer a specific set of questions. All serve without pay. Through a careful process of committee selection, gathering of information from many sources in public meetings, deliberation over the findings and recommendations, the NRC produces 200-300 reports each year.

Foresight studies require a special approach to deliberation, since the expert members are sometimes asked to go beyond the evidence of scientific proof. They are required to express their judgements with great care and with due conditions to avoid giving the impression they are “predicting” the future. Thus, the methodologies often utilise roadmaps, scenarios, decision trees, gaming and surveys.

Some of the foresight activities revolve around the organisation of workshops, which are more flexible in their participation and not always required to produce a consensus view among the organising committee. In cases where the problems are not as well defined, the best purpose of NRC involvement is in convening a sufficiently broad set of experts from multiple fields to simply establish a dialogue among experts. Here the report of the committee is meant to serve as informing the expert community as much as anyone about the shape, scope and size of the challenge so that the next iteration of study or convening activity can advance to the next plateau of understanding.

Carrying out effective foresight studies requires a judicious combination of continuity and change. The continuity comes from the carryover of experts from one study to the next, combined with a professional staff at the NRC (total 1,400) that has an ongoing dialogue with all elements of the S&T and policy communities. The change comes from younger researchers, continuously fed into the collegial process of research, consultation, participation and dissemination of foresight analysis at the NRC. In recent years, the NRC has particularly focused on the need to internationalise its foresight activities and increasingly sees them as “global endeavours”, in part to match the functional collaboration between researchers on all continents. The tendency of multinational corporations with research divisions has reinforced this perspective, and it now appears to be irreversible.

Audiences: From Governmental Agencies to Individual Users

The broadening of interest in all things scientific and technical in the US has spurred a need to expand the ability of the NRC to communicate its findings and recommendations to multiple audiences. The traditional targets have been agencies of government, and over time, the role of Congress in actively shaping policies and programmes has led it to be a prime consumer as well for foresight exercises that identify priorities and strategic direction. More recently, the research community itself has looked to NRC studies for not only sound judgement and the use of peer-reviewed evidence, but also for careful advocacy for the research enterprise in a political jousting ground. Broader audiences also have learned to use foresight studies for their own planning; for example, as students plan their careers, they may look to decadal studies to see if they find scientific prospects matching their interests.

Demonstrable outcomes from foresight studies are even more important for the NRC process, if only because the expertise that comes from participants of the research community is given on a volunteer basis. They need to know that their investment of time, knowledge and judgement is for a good and effective purpose. As a result, the NRC maintains nearly 100 standing bodies (usually committees with 15-30 members) that track both the state f their assigned fields and the impact of their studies. They observe a number of possible outcomes, but four stand out:

  • Changes in research investments, particularly in principal-investigator led programmes at federal science agencies
  • Patterns of government investment in research infrastructure
  • The scale and purpose of training programme investments, the life blood for graduate student and postdoctoral scholar programmes.
  • Maintenance of appropriate databases on the research enterprise and its various components

One overall measure of the impact of NRC foresight reports is the recent institutional decision to make all publications available at no cost as online PDFs. The demand had grown, both domestically and abroad, to the point that the obligation to make its work maximally available ensured taking that policy step.

NRC: Fact Producing, Priority Setting, Innovation-oriented and Disruption-sensitive Foresight Experience

A number of lessons have emerged in recent decades via the growth in foresight-type activities by the NRC. While there are many lessons in terms of implementation, this section will focus on the strategic level.

  1. While the trend in requests for foresight activities is towards broad problem-solving with multiple disciplines involved, foresight exercises must be sure at the end of the day to emphasise the science of the issue. It is all too easy to want to become “relevant” when the statement of task is defined as a public policy challenge. The strength of the S&T community is the research base that produces facts rather than political opinions. Straying into the realm of opinion reduces the research community to just one more voice among many.
  2. The NRC is often asked to set priorities, and some expert committees shy away from such a challenge. So long as the committee has an objective basis for making the recommendation, it should respond positively rather than being scared away from a challenge that may imply a set of “winners” and “losers”. Over time, it will result in priority-setting being done in a more rational way than if left to the non-S&T community to make those choices.
  3. Foresight exercise participants are tempted to stick to the fundamental science rather than including the applications of science. If the findings of the committee are appropriately hedged for the uncertainties of applied science, there is a significant contribution to be made by the S&T community to a more complete understanding of the innovation process. The general public and policymakers often come from fields where they are not familiar with the difficulties that arise in moving from basic research through many steps to products on the shelf to benefit the public. It is particularly important to lay out the time required for that process – for example, stem cell research undertaken today is going to have a long gestation period for generalised benefits to accrue to the population tomorrow.
  4. Foresight analysis is always subject to low-probability, high-impact developments that derail our expectations based on past experience. These disruptive events can come from within science, in an unexpected discovery, or they can come from without in a massive challenge to societal and economic health. Examples come both from science fiction and from nature – whether the collapse of the Gulf Stream, geo-engineering, new zoonotic diseases or wireless power transmission. Some people attempt to build such developments into foresight – say, through “weak signal analysis” – and it probably has a specific but limited place, even if we have demonstrated our vulnerability to such events.
  5. The pursuit of foresight analysis needs consistent follow-up, perhaps on a continuing basis. The NRC finds that most of its foresight studies, often decadal projections, can use an update within about five years.
Authors: Richard E. Bissell                  rbissell@nas.edu
Sponsors: U.S. National Academy of Sciences
Type: Experience with Foresight
Organizer: U.S. National Research Council
Duration: N/A Budget: N/A Time Horizon: N/A Date of Brief: June 2011  

 

Download EFP Brief No. 185_Foresight in the US

Sources and References

Project home page: http://www.nationalacademies.org/nrc/index.html

For reports cited above: http://www.nap.edu/

For further information about the study process: http://www.nationalacademies.org/nrc/policies.html

The views expressed above are those of the author and do not necessarily represent the views of the National Research Council or any of its constituent units.

EFP Brief No. 150: Strategic Capacity Building in Clusters to Enhance Future-oriented Open Innovation Processes

Sunday, May 22nd, 2011

For the purpose of increasing and sustaining business and regional long-term competitiveness, information and training modules were developed to enrich cluster development policies with tools that give incentives for and facilitate ‘outward-looking’ (open innovation) and forward-looking (foresight, technology assessment) activities and thus provide strategic guidance for developing future-proof, open innovation processes. After testing the tools in ICT, mechatronics and life sciences clusters, they are now being applied in a trans-regional foresight approach to develop a joint research agenda for clusters in the economically more and more important creative industries.

Regional Cluster Development to Systematically Boost Innovation

In the globalising knowledge economy, regional clusters are increasingly understood – in particular with respect to their ‘non-regional’ dimensions – as local nodes in global knowledge
flows. The Innobarometer 2006 on clusters’ role in facilitating innovation in Europe confirmed that companies situated in clusters are more innovative and competitive than companies outside. In strategically guided and well-managed clusters, the enhanced innovativeness and competitiveness at the firm level finally results in sustainable regional economic development. Thus, policy-makers at all administrative levels use cluster support instruments to systematically boost innovation and competitiveness of both businesses and regions. The cluster concept captures current discussions of managing (regional) innovation systems and open innovation processes at both the regional and business level. At the business level, management professor H. Chesbrough claims a fundamental shift in innovation paradigms from closed to open innovation and advocates collaborative and open innovation strategies and open business models to take the full benefit from collaborating with external partners. More and more, (in particular multinational) enterprises take into account, in addition to internal resources, the competences of external partners to meet the challenges of  ncreased complexity of research, technological development and innovation (RTDI), growing global competition leading to shortened ‘time to market’ etc. Regional clusters as ‘innovative hot spots’ and local nodes in global innovation networks play an important role for companies looking for external partners to form strategic RTDI collaborations. The business strategy of collaborative and open innovation at the micro-level poses considerable challenges for macro-level innovation policy. For example, new complex interactions and relationships emerge and continue to evolve between public
research organisations and industry, which in turn lead to new ways of organising and managing R&D and innovation by all stakeholders in an innovation system. Thus, horizontal and vertical coordination of policies and support of cross-sectional linkages and networks are imperative for systemic and interactive RTDI policy making. In this respect, (trans-) regional cluster development is broadly seen as an adequate and effective instrument to enhance and coordinate knowledge flows and collaboration between regional stakeholders coming from industry, science and public administration.

Linking Forward- & Outward-looking Approaches

Both the discussions on open innovation business strategies and on systemic regional innovation policies emphasize the vital role of strategic intelligence for innovation and point to the value added of linking forward-looking and openinnovation-focused approaches.
To develop and implement successfully future-oriented collaborative and open innovation processes, businesses rely on strategic economic and business intelligence in order

  • to generate common visions about longer-term market and
    technological developments,
  • to derive promising new products and services and define
    future business models, and
  • to develop and agree on joint innovation projects with
    external strategic partners.

Thus, in a world of open innovation, future-oriented technology analyses – comprising foresight and technology assessment activities – are decisive for strategic knowledge generation and transferring it into new products and services. The faster and easier businesses gain access to strategic knowledge and integrate it in their company strategy, the more successful they will be. This becomes evident in ‘business ecosystems’ where businesses co-evolve their capabilities around new technologies and jointly design a kind of ‘mass customization’ of new products and services to satisfy individual customer needs and to succeed in the worldwide ‘competition for the future’. Though, many enterprises (in particular SMEs) mostly rely on more easily accessible, short-term market information (e.g. from their clients). They often do not know how to sustainably
realise their full market potential by

  • thinking and acting more in a longer-term perspective and
  • developing strategic alliances and networks.

Due to restricted internal resources, most of them would have to use external strategic knowledge if they realise the need to change their business-as-usual approaches. In this context, strategic cluster support instruments can help these enterprises meet future challenges and support strategic capacity building in the region. Strategic cluster support combines forward- and outward-looking approaches (e.g. in cluster foresight type activities) to facilitate knowledge creation processes contributing to long-term competitiveness and sustainable economic development. Specifically, it

  • promotes knowledge exchange and strategic learning processes between cluster stakeholders in order to create a localised and unique knowledge stock,
  • facilitates cross-cluster, trans-regional and transdisciplinary knowledge flows and strategic business linkages to enrich and refresh the local knowledge pool with external impulses and to leverage complementary assets
    and capabilities of clusters in different regions, and enables cross-cluster policy learning and pursuit of common aspects of strategic cluster policies.

Orchestrating Business and Cluster Strategies

The sustainable success of cluster development depends substantially on the concerted actions of many different actors – multiple levels of government and public agencies, companies, educational and research organisations etc. In this context, it is crucial to develop a common vision and to  implement a cluster strategy that

  • reflects the specific needs of the cluster stakeholders,
  • focuses on the most promising international technology and market development perspectives, and
  • integrates a broad range of (European, national and regional) public policies and private sector activities.

Combining forward- and outward-looking approaches also means

  • to provide the regional stakeholders with strategic longerterm orientation by taking stock of available strategic knowledge from both public (e.g. regional foresight) and private actors (e.g. from corporate foresight or roadmapping activities in large companies) and
  • to align business strategies and longer-term regional cluster strategies.

To summarise, succeeding in linking forward- and outwardlooking approaches and creating a multi-actor, multi-level coherence of strategies and congruent activities means leveraging synergies.  Multiplier effects can be achieved (e.g. bundling forces to boost innovation effectively), and better – because broadly based and mutually strengthening – economic decisions lead to increased and  sustained business and regional competitiveness. These positive impacts can be made sustainable if, in addition to facilitating access to external strategic knowledge, the strategic capacities of the  innovation actors themselves are systematically built up in a way that takes into consideration their different absorptive and knowledge management capabilities.

The Connect2Ideas Approach – Strategic Capacity Building in Clusters

The FP6-funded project Connect2Ideas (June 2006 to May 2008) aimed at fostering trans-national technology transfer – mainly between multinational enterprises (MNEs) and SMEs – by enhancing future- and open-innovation-oriented thinking and acting in SMEs, related business networks and clusters. In this context, the Steinbeis-Europa-Zentrum (SEZ) developed a series of two consecutive workshops on Strategic Capacity Building & Open Innovation and tested it in three regional clusters in Baden-Wuerttemberg, Germany with varying open innovation regimes and institutional settings (ICT, mechatronics and life sciences clusters). The strategic experience and knowledge of MNEs, for instance through corporate foresight, strategic planning and open innovation, should be used to improve strategic capacities also in their business environments (clusters, regions and institutions)

  • to overcome mostly short-term orientation by recognising the strategic relevance of future-oriented collaborative and open innovation activities,
  • to develop common visions concerning future trends and challenges (using horizon scanning techniques with a time horizon of ten years) and, based on these results,
  • to derive joint innovation projects aiming at sustainable long-term cooperation.

Target groups and participants were MNEs (e.g. Siemens, IBM, SAP) with deep roots in the region, SMEs, research and education organisations and other regional stakeholders including representatives from public RTDI funding agencies and public administration.
The preparation phase included

  • identifying and mobilising MNEs, company networks and business clusters and
  • analysing in an innovation audit type approach the strengths and weaknesses of the cluster-related innovation system with specific focus on the barriers to open innovation processes.

Common Vision about Trends and Challenges

The first workshops introduced various methods, concepts and approaches to strategic ‘future management’ and then focused on the development of a common vision about future trends
and challenges using specific foresight and TA elements and techniques such as

  • SWOT (strengths, weaknesses, opportunities, threats)/ STEEPV (social, technological, economic, environmental, political and values) analyses to identify key global trends
  • and (based on local strengths and weaknesses identified in advance) to discuss common longer-term challenges and opportunities, and impact analyses to assess the impact of the most relevant trends with a specific focus on business perspectives: for instance, future markets (customer needs), business models, innovation and value creation processes, requirements with regard to human resources (qualifications, skills) etc.

Future-oriented Open Innovation Processes

Based on the results of the first workshops, the subsequent workshops and follow-up activities focused on the development of joint innovation projects aiming at sustainable longterm cooperation using techniques such as

  • technology watch/scouting to identify existing or wanted technologies in the international business environment,
  • value chain analysis to identify potential international cooperation partners in the respective global value chain and innovation network, and
  • partner search and search for funds to identify potential strategic cooperation partners for the cluster stakeholders including relevant funds (e.g. FP7, CIP, ERDF, national, regional) for subsidising the strategic collaboration.

Success Factors and Outcomes

Critical success factors of the workshop series included the comprehensive preparation in close coordination with the responsible cluster organisations (e.g. preparing a draft SWOT and value chain, motivating the relevant cluster stakeholders, attracting high-reputation external experts for keynote speeches etc.). The quality of the introductory statements of the keynote speakers was also important to stimulate a constructive debate on future trends, specific impacts and open innovation processes. These workshops could only prepare the ground for forward- and outward-looking thinking and acting. Thus, interested cluster actors and stakeholders were provided with ongoing advice and assistance for implementation. The pilot workshops in Baden-Wuerttemberg contributed to increasing the strategic capacity at the firm level as well as at the level of regional economies and decision-makers:

  • They provided a basis for collaborative innovation projects with regional and international partners in the specific cluster and regional value chain (e.g. in the context of the German ‘Excellence Cluster’ competition).
  • The involved ministry decided to continue the workshop series in the framework of its participative regional innovation and new cluster policy. In this respect, the workshops
    served as a trigger for further cluster foresight activities in Baden-Wuerttemberg.

Outlook:
From Connect2Ideas to CReATE

The Connect2Ideas approach highlights the fact that strategic guidance enriches traditional regional RTDI policy instruments by generating a creative atmosphere and a seedbed for ongoing learning processes. Thus, it provides – independent of different local open innovation regimes and   institutional settings – a genuine value added – both for businesses and cluster policies. The Strategic Capacity Building & Open Innovation workshops demonstrate how linking forward-looking and openinnovation- focused approaches can support strategic capacity building in clusters and thus enhance future-oriented open innovation processes at the business and regional levels:

  • Businesses overcome their mostly short-term orientation by recognising the strategic relevance of longer-term perspectives and collaboration with external partners.
  • Regional RTDI policy-makers take into account the specific needs of the cluster stakeholders with respect to future challenges and opportunities, and, on this base, create long-term, sustainable competitiveness perspectives and framework conditions for the innovation systems.
  • Aligning future-oriented business strategies and longerterm regional cluster strategies lead to better, broadly based and mutually strengthening innovation processes contributing to increased and sustained competitiveness.

Based on the Connect2Ideas experience and in the context of the German (national) ‘Excellence Cluster’ competition, SEZ developed specific training modules for facilitating and improving
strategic cluster development at multiple levels:

  • cluster level: developing a common vision and strategy for the cluster and defining an action agenda that reflects the unique needs and capacities as well as the most promising international technology and market development perspectives;
  • ‘sub-cluster’ level: refining the cluster strategy, adopting the strategy and agenda to the specific needs and capacities of the respective ‘sub-cluster’ network and implementing concrete joint actions;
  • single firm level: training in future-oriented strategic innovation management results in an endogenous base for competitive, business specific roadmaps and strategies.

This triad in developing innovation-related strategies in clusters leads to aligned innovation processes and therefore increases the impact of coordinated RTDI actions. To avoid negative rigidity
and lock-in effects and to create a climate conducive to visionary, out-of-the-box thinking, the knowledge exchange with external partners is an important element in all strategy processes. In this respect, SEZ took up the Connect2Ideas approach and elaborated for the FP7-funded ‘Regions of Knowledge’ project CReATE (March 2008 to October 2010) a methodology to develop a trans-regional joint research agenda for clusters in creative industries sectors. Creative industries already contribute substantially to economic value creation and employment, and their importance is expected to grow further. So far, however, only some regions benefit from the economic stimuli of creative industries. In addition, enterprises in this sector highly depend on transregional and trans-disciplinary collaboration. Addressing both issues, CReATE aims at boosting the sector as a whole in Europe, especially by stimulating future-oriented open innovation processes between the  takeholders of creative industries clusters. The CReATE methodology uses a modified Connect2Ideas approach to define research priority areas decisive for the future innovativeness and competitiveness of the clusters. Agreeing first on regional priority areas (based both on regional excellence and ‘aspirations’), a trans-regional joint research agenda will be elaborated in a coordinated process of interlinked regional and trans-regional phases. By integrating the broad spectrum of stakeholders (including funding bodies), regional and trans-regional project ideas will be developed. The impact aimed for is to improve the innovativeness and international competitiveness of the creative industries in the participating regions, but also to stimulate growth beyond them in the EU. Processes of learning from and dissemination of the approach and findings beyond the project frame will be secured by tailored training workshops on future-oriented strategy development for companies and cluster managers.

 

Authors: Dr Björn Sautter sautter@steinbeis-europa.de
Dr Günter Clar clar@steinbeis-europa.de
Sponsors: European Commission (FP6/FP7), DG ENTR / DG RTD; regional bodies and enterprises
Type: Cluster foresight exercise
Organizer: Steinbeis-Europa-Zentrum, Stuttgart, Germany (responsible for the project parts described in this brief)
Duration: 2006 – 2010
Budget: € 370,000
Time Horizon: 2020
Date of Brief: Septmeber 2008

Download: EFMN Brief No. 150_Open Innovation

Sources and References

Project website Connect2Ideas: www.connect2ideas.com
Project website CReATE: www.lets-create.eu
For further information, please contact
Dr Bjoern Sautter (sautter@steinbeis-europa.de), or
Dr Guenter Clar (clar@steinbeis-europa.de)
http://www.steinbeis-europa.de/340.html

EFP Brief No. 146: Germany 2020 New Challenges for a Land on Expedition

Sunday, May 22nd, 2011

The brief provides a short overview of a project in which Deutsche Bank Research has combined its own foresight expertise with inputs from the bank’s business strategists and external experts in order to develop scenarios for the future development of the German economy and society against the backdrop of intensifying structural change.

Germany on the Path toward a “Project Economy”

Deutsche Bank and its clients require knowledge about the future for their investment decisions. Deutsche Bank Research provides this “corporate foresight”. A multidisciplinary team develops and applies a wide range of methods to identify longterm macro trends. These foresight results, which are achieved on the basis of structured, process-based, quantitative and qualitative analyses, are fed into discussions with strategic management and clients as well as into public debate on broader economic, societal and political issues. The next two decades will be crucial for determining the path Germany will take over the long-term. Will German society be able to cope with the demographic pressures bearing down on the economy and the state’s finances? Will Germany succeed in redefining its role in the rapidly changing global economy and world order? Will Germany be a leader or a laggard on the road to a knowledge economy? Our first step was to sketch four alternative scenarios outlining how the German economy and society may have developed by the year 2020 (“Expedition Deutschland”, “Wild West”, “Drawbridge Up” and “Skatrunde (Playing Cards) with the Neighbours”). In the second step, we used broadly-based trend analysis to examine which of these four future scenarios is the most plausible.

The “Expedition Deutschland” Scenario – Knowledge and Cooperation Are Critical

The core elements of the “Expedition Deutschland” scenario for 2020 (formulated from the perspective of the year 2020) are the following:

In 2020, the “project economy” delivers 15% of value creation in Germany (in 2007 the figure was about 2%). The “project economy” refers to usually temporary, extraordinarily collaborative
and often global processes of value creation. For many companies, this type of cooperation is in many cases the most efficient way of doing business. This is because product life cycles have shortened further; the breadth and depth of the knowledge necessary for developing and marketing successful products have increased rapidly; successful products are increasingly the result of convergence between different fields of technology and knowledge; and many companies and research institutes are even more strongly specialised in 2020 than they were in 2007. Consequently companies collaborate ever more frequently on joint projects, often in the form of legally and organisationally independent project companies. They delegate specialised employees or parts of their organisation to these projects, invest capital or put their knowledge and networks at their disposal. In this way, companies can respond flexibly to the considerably higher demands on knowledge and rapidity in the global markets while sharing the costs and risks. This is often – but by no means always – their key to success: in 2020, too, collaboration generates considerable personal and strategic tensions. Factors that help to reduce the frictions on the technical side are mature, highly standardised information technologies. The project economy is closely intertwined with the traditional way of doing business. In 2020, many companies are continuing to go it alone with the market launch of their products. Often, though, these same companies cooperate in other markets – for instance the innovation-intensive ones – by taking the project economy approach. Germany’s small and mediumsized enterprises (SMEs) benefit in particular from the project economy. SMEs can use their advantages of specialisation and organisational flexibility – and are additionally boosted by a renewed surge in start-up activity. Open innovation processes helped to conquer new markets. In 2020, Germany has caught up with its competitors in markets for cutting-edge technology and knowledge-intensive services. Today, innovation is Germany’s core competence, with “Created in Germany” often being first choice, especially in Asia and the Middle East. Some of the main reasons for this success are collaborative innovation as well as intelligent sharing and exchange of knowledge and intellectual property. A project- economy approach to work has proved efficient especially in the early innovative and thus particularly knowledgeintensive phases of value creation. Moreover, many German corporations (and their local and international project companies) have benefited over the past few years from having more closely integrated the generation of “sovereign customers” into their processes. These customers are well networked via interactive forums and have up-to-date knowledge of prices and qualities in the areas that interest them. By contrast, many business investments in long-term research and development will have fallen by the wayside by 2020. They are often poorly adapted to the more short-lived valueadded patterns of today. Knowledge is traded in efficient markets in 2020. Knowledge
about customers, markets and many other topics is valued and traded much more efficiently today than back in 2007. The operators of such knowledge-based services are flourishing. Intellectual property has become a commonly used asset class:
investors may choose from a broad spectrum of topic-oriented patent funds, copyright securitisations etc. Moreover, intellectual capital has swung into the focus of company valuations:
the capital market now takes interest not only in a company’s traditional balance sheet ratios but also its research efficiency, education and training budget, and cooperation ratings.

The young and seasoned minds that house this intellectual capital benefit from efficient learning markets in 2020. Private operators of learning services prosper. Also, the public universities and other educational facilities have become more efficient following a wave of consolidation. Furthermore, they are more strongly involved in the market for modular education and training.

From Direct Regulation to Co-regulation

Government reduces its intervention and there is more coregulation. Co-regulation closely integrates citizens and companies. On the one hand, legitimation problems have motivated the state and still tight fiscal constraints have compelled it to cede part of its mandate to others. On the other, the regulatory issues have become increasingly complex. More than ever before, the state needs to tap the knowledge of citizens and companies to be able to set suitable framework conditions. Regulatory regimes that emerge in this way are more intelligently geared to the needs of business and society. They are more transparent for people and companies alike and ease the struggle into new markets. In general though the state’s abandonment of parts of its mandate has resulted in social transfers now coming with strings attached. In addition, more and more social services (e.g. long-term care) are organised on a private basis. Germany has become a “stakeholder society” based on reciprocal action.

Successful New Middle Class – Low Earners Lose Out

A new middle class emerges in German society by 2020, but the lower periphery falls behind. The middle class celebrates its comeback. The new opportunities for upward social mobility and the higher risk of social decline, both being the consequence of increasingly global and volatile value creation, have clearly shown the middle class the value of knowledge. Many Germans with a mid-range income therefore invest heavily in education – and thus gain qualifications for the demanding, but at the same time well-paying jobs in the project economy.

Well-educated older people also benefit as they are intelligently integrated in the working world in 2020. By contrast, low earners have only limited access to the new learning markets, and young and old alike often have to fear for their livelihoods. International competition has an even more incisive impact on this group than on others. Many low earners are compelled to organise themselves in self-help networks and many have lost their faith in politicians.

Globalisation, Diversification in Energy Supply  and Digitisation Are Other Key Trends

These elements, however, are interrelated with three other aspects of structural change which are already well under way and which, in our view, have rather trend-like characteristics.

Globalisation leads to new centres of gravity in the international value creation chain. 

   Energy supply shows a broader mix and decentralised production. 

       Digitisation enables networked goods flows in the new Internet. 

Given the structural changes outlined here on the way to “Expedition Deutschland”, we expect Germany’s gross domestic product to grow at an average rate of 1.5% per year up to 2020. From a 2007 perspective, these changes will pave the way to extraordinary opportunities for business, society and politics, but also harbour substantial risks. Some key fields of action for business include, for instance, a structured analysis of collaboration options, a more systematic assessment of intangible investments, broader acceptance of new forms of education and training, and an increase in life-long learning activities.

Innovative Methodology to Deal with High Complexity in Scenario Analysis

The guiding question for our scenario analysis is how will structural change have affected the German economy by the year 2020? In order to answer this question, we applied a methodology based on a simple scenario approach. Normally, one identifies the two key drivers to build a “scenario matrix”. Each field in the scenario matrix represents a different combination of attributes (high/high, high/low etc.) of these two drivers, and one scenario is developed from each of their respective interactions (see Figure 1, for an overview of the different elements of our scenario analysis see box on page 4). In addition to these drivers, whose future development is uncertain, there are a number of trend-like drivers – whose future development is comparatively predictable (in the following they are referred to for short as “trends”) – which impact on all four scenarios. These trends show similar developments in all four scenarios.

But our scenario question is multi-faceted; the number of relevant drivers and trends is high. To cope with this complexity without losing too much information, we have advanced the above approach: we have aggregated drivers that are thematically related and whose development is correlated into “dynamics” (the trends, too, are aggregated into “trend-like dynamics”, see the figure Deriving scenarios by reducing complexity). Instead of taking individual drivers, we build the scenario matrix with the two key dynamics. Further information and a discussion of the merits and drawbacks of this approach can be found at www.expeditiondeutschland.de/en.

Nonetheless, through interaction with the other drivers, the trends can develop or impact slightly differently or at a different pace in each scenario. 

In the scenario method these drivers are often referred to as “determinants” and the trends as “premises“.

146_bild1

Concept of the “Most Plausible Scenario”

Classic scenario analysis examines alternative future developments – but without highlighting any one of the depicted scenarios as the most probable scenario. For good reason since the scenario method does not in itself deliver any (or sufficient) indications as to which picture of the future is the most probable.

We are deliberately breaking with tradition of future research here: we identified a number of trends or trend-like dynamics that have an exceptionally strong influence and whose general future development can be predicted particularly reliably. They are driving Germany in the direction of one of our four scenarios and therefore make it particularly plausible. We refer to this scenario as the focus scenario and call it “Expedition Deutschland“. These trends relate to developments in a broad spectrum of fields in business, society and politics as well as in science and technology. They partly reinforce each other, a factor that has further encouraged us to focus on this one scenario.[1]

[1] We have systematically analysed the interactions between many of these trends in the earlier project “Global Growth Centres 2020” (see Bergheim, Stefan (2005), loc. cit.).

Our focus on this scenario should therefore not be seen as a normative statement: our message is not that we are placing this scenario in the spotlight because it is the “most desirable” one in our view. But, despite all the plausibility bonuses derived from our trend analysis in favour of this scenario over the other three, the following needs to be stressed:

Our focus scenario is not a forecast. In 2020, Germany will look only in parts like we have described in our scenario. Rather, there will be a mix of elements of all four (and maybe other possible) scenarios.

Elements of our scenario analysis

“Driver”. Important factor of influence on future structural change in Germany whose future development is difficult to predict.

“Trend” (trend-like driver). Important factor of influence on future structural change in Germany whose future development is reliably predictable.

“Dynamic”. Aggregation of (mostly non-trend-like) drivers which are thematically related and whose development is correlated. The future development of a dynamic as a whole (without drawing on additional information) is difficult to predict.

“Trend-like dynamic”. Aggregation of (mostly trend-like) drivers that are thematically related and whose development is correlated. The future development of a trend dynamic as a whole is reliably predictable.

“Scenario”. An, in itself, consistent picture of the future (in this case of the German economy and society) derived from a

given combination of developments of the dynamics considered (and the expected developments of the trend-like dynamics). “Consistent“ means here that the interaction of the various elements has been taken into account.

“Focus scenario”. The one of our four alternative scenarios for Germany in the year 2020 which we consider to be the most plausible owing to the future impact of some of the above “trends“ and “trend dynamics“.

Our message is that, as far as we can judge today, it appears plausible that Germany is more likely to resemble our focus scenario than the other pictures of the future developed here.

Illustration of the Scenarios

We have developed posters to sum up the content and convey an intuitive image of the key messages of our four scenarios. They depict the behaviour of businesses and citizens (as persons), the market playing field (as environment/terrain) and the regulatory framework (as sky/weather) in 2020. To give an example, here we show the poster for the “Expedition Deutschland” scenario discussed above.

146_bild2

Authors: Jan Hofmann  jan-p.hofmann@db.com; Ingo Rollwagen   ingo.rollwagen@db.com; Stefan Schneider     stefan-b.schneider@db.com
Sponsors: n.a
Type: n.a
Organizer: Deutsche Bank Research
Duration: 2006 – 2008
Budget: n.a.
Time Horizon: 2020
Date of Brief: January 2008

Download: EFMN Brief No. 146_Germany 2020

Sources and References

  • expeditiondeutschland.de/en
  • dbresearch.de

EFP Brief No. 143: Teagasc 2030: Reinventing the Irish Agri-Food Knowledge System

Sunday, May 22nd, 2011

Teagasc means ‘teaching’ or ‘instruction’ in Gaelic. It is the name of the food and agricultural research, education and advisory body in Ireland. By 2006, fundamental changes happening to the Common Agricultural Policy in Europe were already being felt throughout the Irish agri-food sector. New and emerging issues were gaining importance and looked likely to have an impact on the sector. It was necessary to ask how Teagasc could maintain its relevance to clients and stakeholders as it moved ahead. The study builds upon previous foresight exercises and long-term strategic studies undertaken in Ireland and the EU.

Employing Knowledge for  Developing a Positive Vision  and Creating Opportunities

Teagasc 2030 was designed to establish a broadly-shared vision of what the Irish agri-food and rural economy would look like in 2030 and a vision of what Teagasc could become as the leading science-based knowledge organisation in the sector. It set out to develop the strategic capabilities of Teagasc, improve its ability to provide proactive leadership on complex issues, identify strategies and mechanisms to maximize the impact of its knowledge generation and procurement, technology transfer and education activities through innovation support and to develop an internal culture of continuous renewal.

The Steering Committee (SC) included key Teagasc managers, high-level representatives from relevant organisations, such as the university system and the Environmental Protection Agency,influential business leaders from both the farming and food sectors, as well as international experts. The members of the SC played a decisive role in the process in that they were fully engaged and provided constructive input each time the group convened. The Working Group (WG), consisting of Teagasc employees aided by two international consultants, was responsible for the detailed planning and execution of the exercise. The Foresight Panel (FP) consisted of experts from Teagasc, representatives of the farming and food sectors, as well as experts from the research community, including a commercial research service provider. FP members participated in and contributed to workshops and other activities organized by the WG.

Early consultations with the SC reinforced the need for a structural approach that went beyond the traditional sectoral view. The SC emphasized the need for new strategic capabilities that would enable the organisation to operate in a rapidly changing context. One of the first tasks of the WG was to review foresight exercises on food, agriculture and the rural economy that had been conducted previously, whether in Ireland or around the world, start a discussion on the scope of the exercise and get agreement on the nature of the results it should provide. The first observation of the WG was that previous foresight exercises on food, agriculture and the rural economy tended to focus on problems related to commodity markets and the Common Agricultural Policy (CAP) system of payments. It was resolved at an early stage that Teagasc 2030 would have to do more than this by identifying how knowledge could help create opportunities for young people in the sector and by developing a positive and realistic vision of an innovation-led rural economy.

The work itself was organized in two phases. A Divergent Phase, where the main purpose was to study issues relating to the organisation, the sector and the broader economy in a creative and exploratory fashion, brought in outside knowledge and expertise, as well as relevant case-studies from abroad. The second Convergent Phase focused on choices to be made about desired outcomes, long-term visions for the future of Teagasc and the context in which it would operate, as well as the practical immediate steps to be taken on the basis of an action plan. Just before the end of the Divergent Phase a Radical Thinkers Workshop was organized to challenge peoples’ thinking and try to overcome any remaining inertia or scepticism as regards new ideas and the necessity for change.

The Divergent Phase

This consisted of paper writing on a number of key topics that provided important background to the members of the Foresight Panel. The papers were especially important as they allowed people who are not experts in a domain to get an overview of what is happening. The real action, however, was in a series of four workshops (WS).

Turning Towards a
Knowledge Based Bio-Economy

WS1 consisted of a scoping and profiling activity to determine the boundaries of the Teagasc 2030 exercise and to verify that the FP included a sufficiently broad range of actors. Important discussions arose concerning how agriculture and food related to the use of land in Ireland, the relationship between this and both the rural and national economy, how both the theatre and the actors might be changing, and how there was a need to revisit ideas of who the typical Teagasc client was, is now or would be in the future. The immediate output of this workshop was strongly criticized by the SC as not being radical enough. It was thought too traditional or sentimental in its attachment to ‘land’. The modern reality consists of urban agriculture, gardens on the sides of buildings, forests, marine and lake habitats, greenhouses and bio-reactors, as well as a food industry that has long outgrown a dependence on local production and that in some sectors relies almost entirely on imports for raw material inputs. This workshop started a process of reflection that lasted until the end of the exercise.

The feedback of the SC on the results of this first workshop was very important. Its intervention ensured that some of the issues addressed in the workshop did not conclude pre-maturely, but stayed open and continued to be debated for the best part of a year. New ideas need time to mature. The workshop started a process whereby traditional and ultimately limited thinking about farming and the rural economy were replaced with entirely new thinking about the knowledge-based bio-economy or KBBE.

WS2 focused on trying to understand relevant drivers of change, the factors shaping the future of Teagasc and the environment in which it operates. The focus was on identifying the drivers and the impacts that they could have on the economy in 2030. The discussion included references to trends and trend breaks. The exercise was intended to help people develop their ‘intuition’ about 2030.

WS3 focused on strategic issues and started the process of formulating the opportunities and challenges that the various sectors and stakeholders would face in 2030. By this stage the concept of the ‘Sustainable KBBE’ had started to come into focus.

WS4 was about developing scenarios to further develop thinking about the ‘Sustainable KBBE’ in 2030, to further explore and define the issues and challenges, and to identify the big questions, whose answers would impact on the structures and programmes of Teagasc going forward.

A Radical Thinkers Workshop was timed to take place between WS3 and WS4 to provide new ideas to the ongoing foresight process. This consisted of a series of talks followed by discussions, involving speakers from a variety of areas who were capable of presenting challenging views on relevant topics. It involved scientists, geographers, venture capitalists and policy makers. For some participants it was an opportunity to hear for the first time about a renewable chemicals industry based on crops grown for their chemistry rather than for food, feed or fibre. For others, it was an opportunity to hear what foreign experts think. A venture capitalist provided his vision of where important opportunities for investment would arise in future. A Danish speaker raised important questions about the organisation of research and innovation when he explained that, while Denmark performs about 1% of all global research, Danish industry requires access to the other 99% of global research if it is to achieve or maintain global competitiveness.

The Convergent Phase

This consisted of a series of three workshops involving the FP and had to provide an actionable plan for the transformation of Teagasc. Such a plan would require the commitment of Teagasc senior managers. It had to be something they would own and act upon. To make sure that they were adequately prepared, a series of internal meetings was arranged involving senior managers and representatives of the WG to help them understand the implications of the exercise, identify the main axes of change for the organisation and anticipate the detailed requirements of the last workshop. Although the foresight workshops were usually animated by members of the WG with help from the external consultants, the goal was for key sessions of the final workshop to be led by members of senior management with support from the WG. At the same time, an internal dissemination or consultation process took place involving all parts of the organisation. The goal was to explain what was happening and gather feedback on the changes required for moving forward. An external consultation process separately involved farming and food industry representatives. It too explained the ideas that were emerging. It gathered feedback and inputs from Teagasc clients as inputs to the final stages of the foresight exercise.

WS5 was dedicated to the development of scenarios about the Sustainable KBBE. In particular, the goal was to develop more specific thinking about the role of knowledge, learning, research, innovation, training and advice in the sector in 2030.

WS6 was used to finalize the scenarios and flesh out a vision for the sector in 2030 along with an identification of its knowledge requirements and the role that Teagasc would occupy in the system.

WS7 was devoted to the issue of organizational transformation and the directions of change for Teagasc. The senior management meetings played a significant role in determining the structure of this last meeting. Based on their discussions it was decided to focus on transformation under the major headings of leadership, partnership and governance.

The issue of leadership originally emerged in meetings of the SC and was echoed in discussions with industrial stakeholders. Leadership gaps emerged on long-term scientific and technological issues not only for small and medium-sized enterprises, but for larger companies as well.

The Vision of a  Sustainable Bio-Economy

One of the most important results was the development of a vision for the Agri-Food and Rural Economy in 2030 as a knowledge intensive, innovative, internationally competitive and market-led bio-economy. This helped to place the sector at the centre of something big and positive, with significant opportunities that would play a role not only in the rural economy, but also in the general knowledge economy, via its contribution to climate change, energy security, sustainability and the transition to a post-petroleum era.

Recognizing that countries with excellence in agriculture have opportunities for moving up the value-chain by selling not only their products but their know-how, the final report speculated about a time when the most important export of the dairy sector in Ireland might no longer be its milk, cheese, yoghurt and functional foods, but its management expertise and its technical knowledge about the organisation of competitive dairy production systems.

The Four Pillars of the KBBE

From an Irish perspective it made sense to complete this vision by distinguishing four pillars of the KBBE:

  • Food Production and Processing, which mainly represents mature industries where competition is relentless and global, where competitiveness often relies on efficiencies of scale, automation and process technologies, as well as scientific management and competitive sourcing.
  • Value-Added Food Processing, which includes advanced food processing and food service, functional foods, as well as food-additives and ingredients, bio-actives, nutraceuticals and cosmaceuticals. This sector is fast moving and innovative. There is continuous adoption and improvement of technologies for production, processing, distribution and preparation. Supply chains are constantly changing and considerable attention is given to intangibles such as patents,brands, provenance and traceability.
  • Agri-Environmental Goods and Services includes foodsafety and traceability, animal welfare, energy security, climate, clean air and water, fertile soils, bio-diversity, areas of public amenity, natural beauty and those of importance for cultural heritage. Although these are normally treated as spin-offs from other activities based on multifunctionality, they are given a separate identity in recognition of the overall role they will play in the quality of life of citizens, in energy and climate security as well as in the overall sustainability of society and the economy.
  • Energy and Bio-Processing includes the production of feedstock for bio-fuels and bio-polymers. This sector makes substantial investments in harnessing knowledge. It places great importance on knowledge as a factor of production. It corresponds to new and emerging areas of science and to entire new markets. It is characterized by a high level of risk and provides opportunities for government support to lead markets. This sector is where highvalue-added and commodity sectors of the future are being created.

Demographics Facilitating Change

A key observation concerning the future of Irish agriculture was the observation that approximately 40% of farmers in Ireland would retire in the next 10 years and that almost all farms would change hands at least once by 2030. This pointed to an opportunity to use the unavoidable dynamic of retirement and property transfer to restructure the farming sector so that land as a natural resource could make the greatest possible contribution to the economy. This would include enabling successful farmers to increase the area they manage and less successful ones to move on perhaps using models based on leasing.Discussions arose about ‘future farmers’ and ‘foresight farmers’. It is possible that the land transfers that will happen in the coming years will give rise to a younger, better educated and more international generation of farmers. Armed with agricultural MBAs, or degrees in bio-technology, many will approach farming as a business more than a family tradition or vocation. Their approach would be less sentimental and more scientificentrepreneurial. Such farmers represent very different clients for Teagasc than those it has served before.

Leadership, Partnership and Governance

One of the most important currents of debate throughout this foresight exercise concerned the traditional push-approach to technology transfer, the so-called ‘linear model’. The old approach was summarized as follows
143_bild1

whereas Teagasc in 2030 would need to focus on innovation support that would resemble something more like this:
143_bild2

One challenge that emerged was the need to become more demand-led as an organisation. Another challenge emerged from the recognition that no organisation can meet all of its research or knowledge needs internally and that an increasing share of these would need to be sourced outside. This is something that traditional research organisations are not used to doing, and, in future, they will need to engage both private and public service providers, as well as cooperate with international knowledge networks.

The vision that emerged for Teagasc as an organisation in 2030 was that of an organisation suffused with a culture of support for innovation by its clients, capable of:

  • providing leadership where necessary on innovationrelated issues,
  • developing and maintaining the partnerships required for research, innovation, technology transfer and education,
  • employing governance mechanisms to assure relevance and accountability to its clients and stakeholders.

Creation of a Permanent Foresight Unit

In many ways, the implementation of the action plan started even before the exercise was finished. A part of the action plan is a natural continuation of consultations with major stakeholder groups that was started as part of the foresight process. The most immediate and tangible result was the creation of a permanent foresight unit within Teagasc to oversee the implementation of the Teagasc 2030 action plan and to support other foresight activities as needed within the organisation.

The action plan is outlined in the Teagasc 2030 report. It includes steps to create a broader culture of innovation within the organisation and to intensify systematic interaction with client groups and stakeholders. It addresses reform of personnel structures to enable greater mobility of staff within the organisation, facilitate transdisciplinary work and align incentives with the needs of clients. Other structural reforms include a focus on network-based activities, as well as timelimited project-network-like interventions such as technology platforms and commodity working groups that pool the resources of partners and involve stakeholders in management.

The general message of Teagasc 2030 is a positive one based on the opportunities offered by the KBBE, not only for actors currently involved in the agri-food and rural economy, but for a whole new generation of bio-entrepreneurs who may have no prior link to the land.

The key to success continues to be innovation. What is new is the pace of innovation and the need for organisations such as Teagasc to operate simultaneously on several fronts in a more international context and in shorter time frames. The challenge for Teagasc in the future will be to increasingly channel its efforts and resources towards support for innovation, in particular for the development of the knowledge-partnerships required by clients for innovation in the KBBE.

Authors: Patrick Crehan – Patrick.Crehan@cka.be, Lance O’Brien – Lance.Obrien@teagasc.ie, Gerry Boyle – Gerry.Boyle@teagasc.ie, Owen Carton –  Owen.Carton@teagasc.ie
Sponsors: Teagasc the Irish food and agricultural research, advisory and training body
Type: Structural foresight
Organizer: Teagasc, CKA and SEZ
Duration: 1.5 yrs
Budget: €300,000
Time Horizon: 2030
Date of Brief: July 2008

Download: EFMN Brief No. 143_Teagasc 2030

Sources and References

All background papers, scenarios and proceedings as well as the final report are available from the Teagasc 2030 website at www.teagasc.ie/foresight/index.htm. The papers and presentations of the Radical Thinkers Workshop are available at http://www.teagasc.ie/publications/2007/20070725/index.htm.
Lance O’Brien is the head of the new Foresight Unit. He can be contacted at lance.obrien@teagsc.ie.

EFP Brief No. 123: Scenarios 2026 for the South West of England

Saturday, May 21st, 2011

This study (which took place in 2004) presents four ‘socio-economic-political scenarios’ designed to stimulate, guide and inform strategic thinking about the future of one of nine English regions, namely the South West. The scenarios portray distinct pictures of the social, political and economic background against which the strategies for the South West can be reviewed and developed. They provide a consistent approach and serve as practical thinking tools. The scenarios are also intended to help organisations in the South West to assess their vulnerability to forces of change and to plan appropriate adaptation strategies.

EFMN Brief No. 123_South_West_England

EFP Brief No. 120: Opportunities in Innovation for the Dutch Defence Industry

Friday, May 20th, 2011

Under the influence of (inter)national technological, political and economic developments, the defence industry is increasingly intertwined with and developing towards a civil industry. Consequently, the political responsibilities, attitude and measurements are changing for both the Ministry of Defence and the Ministry of Economic Affairs. An analysis of the Dutch defence industry helped to determine the main innovative opportunities of the industry and to identify the complementary technological competences needed to make the most of these opportunities. Also strategic vision, including options for innovation policy, was developed.

EFMN Brief No. 120 – Dutch Defence Industry

EFP Brief No. 69: Madrid 2015

Friday, May 20th, 2011

Madrid 2015 is an initiative promoted by the Regional Directorate of Economy and Innovation and carried out by this Directorate and the University Antonio Nebrija with the support from other Universities and Research Centres. This exercise, carried out during 2004, analyses the strengths and weaknesses of the region and initiates a collective thinking process that disentangles the key factors that influence the competitiveness of the region. The final purpose of this foresight project is to explore the possibilities for sustainable economic growth that the region of Madrid has, in order to anticipate possible futures and design long-term polices.

EFMN Brief No. 69 – Madrid 2015

EFP Brief No. 65: Insular Regions 2015

Friday, May 20th, 2011

The path to the knowledge development model recommended by the EU is based on the progress of two main change parameters leading to a properly functioning knowledge society: research and innovation activities together with participation and clustering activities. Building on this framework the IN.TRACK foresight project aimed at formulating knowledge-based regional policies, ensuring the support of local actors and stakeholders through regional consensus, and raising awareness with regards to policy, industry and society as a whole.

EFMN Brief No. 65 – Insular Regions 2015

EFP Brief No. 60: Rural Ireland 2025

Tuesday, May 10th, 2011

Ireland has set ambitious goals for the development of its rural regions. This foresight exercise asks if the goals of state policy for rural Ireland will be achieved on the basis of current trends, what can realistically be achieved and what needs to be done to ensure a desirable outcome. The conclusions of this foresight exercise are framed in terms of 3 main actions to be undertaken immediately if the state is to realise its ambitions.

EFMN Brief No. 60 – Rural Ireland 2025