Posts Tagged ‘policy’

EFP Brief No. 194: Envisioning Digital Europe 2030: Scenarios for ICT in Future Governance and Policy Modelling

Monday, September 19th, 2011

This foresight exercise was conducted as part of the CROSSROAD Project – A Participative Roadmap for ICT Research on Electronic Governance and Policy Modelling, a FP7 Support Action that aimed to provide strategic direction, define a shared vision, and inspire collaborative, interdisciplinary and multi-stakeholder research in the domain. This research set out to help policy makers implement the Digital Agenda for Europe, the flagship initiative of the EU 2020 strategy launched to increase EU growth and competitiveness in the fast-evolving global landscape and address the grand challenges our world is confronted with today.

Combining ICT for Governance and Modelling to Assess Policy Impacts

In 2009, the European Commission’s Seventh Framework Programme (Work Programme ICT 2009-2010) launched a programme of research on ICT for governance and policy modelling, joining two complementary research fields that have traditionally been separate:

  • the governance and participation toolbox, which includes technologies such as mass conversation and collaboration tools; and
  • the policy modelling domain, which includes forecasting, agent-based modelling, simulation and visualisation.

These ICT tools for governance and policy modelling aim to improve public decision-making in a complex age, enable policy-making and governance to become more effective and more intelligent, and accelerate the learning path embedded in the overall policy cycle.

In 2010, the European Commission funded the support action: CROSSROAD A Participative Roadmap for ICT Research on Electronic Governance and Policy Modelling (www.crossroad-eu.net) in order to advance the identification of emerging technologies, new governance models and novel application scenarios in the field of governance and policy modelling.

The main goal of the CROSSROAD project was to design the Future Research Roadmap for this domain and to structure a research agenda, which could be fully embraced by the research and practice communities.

Overall, the research roadmap aims to push the boundaries of traditional e-government research to new limits and help resolve the complex societal challenges Europe is facing by applying ICT-enabled innovations and collaborative policy modelling approaches, which include the harnessing of collective intelligence, agent-based modelling, visual analytics and simulation, just to mention a few.

In this context, a foresight exercise was conducted to look at the future of ICT-enabled governance and develop a vision of the role of ICT research in shaping a digital European society in 2030 through four thought-provoking visionary scenarios.

The scenario design developed aimed to provide a structured framework for analysis of current and future challenges related to research on ICT tools for governance and policy modelling techniques. The scenario framework proposed was chosen to stimulate further debate and reflection on possible, radical alternative scenarios. It takes today’s world and constructs images of possible future worlds, highlighting ways in which key uncertainties could develop. The aim is to present clues and key impact dimensions, thus increasing the ability to foresee possible development paths for the application of ICT tools for governance and policy modelling techniques. Thus risks can be anticipated and better preparation can be made to take advantage of future opportunities. In turn, this outlines key elements to be taken into consideration for the further roadmapping and impact assessment of future research in this domain.

Four Views on European Information Society

Instead of attempting to forecast possible future ICT-enabled scenarios, four internally consistent – but radical – views were defined of what the future European Information Society might look like in 2030. These give four distinctly different visions of what Europe’s governance and policy making system could be and what the implications of each could be for citizens, business and public services.

Following the mapping and analysis of the state of the art in research themes related to ICT for governance, policy modelling and the identification of emerging trends, the main impacts on future research in this area were defined. They were further refined through an analysis of existing scenario exercises and the current shaping of policies and strategies for the development of the European Information Society.

The uncertainties underlying the scenario design were: 1) the nature of the dominant societal value system (more inclusive, open and transparent or exclusive, fractured and restrictive), and 2) what the response (partial or complete, proactive or reactive) could be to the acquisition and integration of policy intelligence techniques in support of data processing, modelling, visualisation and simulation for evidence-based policy making.

Accordingly, the key impact dimensions were classified on two axes: degree of openness and transparency (axis y) and degree of integration in policy intelligence (axis x). The axes represent ways in which social and policy trends could develop.

Based on these dimensions, scenarios were then developed in a narrative manner as descriptions of possible outcomes in selected key areas, representative of the European context, where emerging trends related to the development of ICT tools for governance and policy modelling techniques could have an impact.

The Open Society…

The vertical axis indicates the degree of openness and transparency in a society in terms of democratic and collaborative governance, which could be further enabled by ICTs. The most open and transparent society would be one where even traditional state functions are completely replaced by non-state actors through opening-up and linking public sector information for re-use. Such a society would be characterised by open standards and principles of transparency and accountability in governance and public management. An important aspect of this scenario would be the regulatory and technological solutions and also the socio-cultural attitudes to the basic digital rights underpinning the future Information Society. In fact, the concept of openness is not strictly related to technological solutions but rather to socio-cultural and organisational aspects that can be enabled and supported by technological advancement.

…and the Integration of Knowledge

The horizontal axis shows the degree of integration of data and knowledge and the mode of enabling collaboration between all stakeholders in policy design and decision-making. This involves the possibility – enabled by ICTs – to mash up data and information available from different sources in an ‘intelligent way’, meaning in a way that is efficient, effective and suitable to generate public value. It also involves the extent to which users, individually or as members of formal and informal social networks, can contribute to the co-design of policies, simulating and visualising the effects of legal and policy decisions, and engage in real-time monitoring and prior assessment of possible expected impacts at local, regional, national and pan-European levels. This horizontal axis is also associated with the capacity and willingness of policy actors to share power and change decision-making mechanisms in order to facilitate the redefinition of basic democratic freedoms in a collaborative fashion. This could go to the extreme of redesigning the traditional mission of the state and the role played by governance stakeholders. Again, ICTs are not the driving force; rather change is driven by changes in social values, attitudes and new paradigm shifts in terms of information management, knowledge sharing and the allocation of resources.

Scenarios for Digital Europe 2030

In the Open Governance Scenario, users will enjoy unprecedented access to information and knowledge. By shifting cognitive capacities to machines, humans will be freed from the work of memorising and processing data and information and will be able to focus on critical thinking and developing new analytical skills. This will enhance collective intelligence (both human and ICT-enabled). Humans will be able to use policy modelling techniques to help solve global challenges. Possibilities for the provision of personalised and real-time public services will be opened up. The online engagement of citizens and various governance stakeholders will increase. Citizens, businesses and researchers will have direct access to data they need, and this will create new opportunities for people to interact with and influence governance and policy-making processes and help to make progress in solving societal problems. Governance processes and policy-making mechanisms will be based on intelligent, ICT-enabled simulation and visualisation systems, which will be able to find meaning in confusion and solve novel problems independently of human-acquired knowledge. New, open ways of producing and sharing knowledge will radically change traditional governance and decision-making. This will herald an era of open innovation, with unimagined opportunities for research and technological development. Public, private and third sector institutions will start to listen more carefully to their stakeholders, and a sort of ‘molecular democracy’ will arise.

The Leviathan Governance Scenario assumes that an ‘enlightened oligarchy’ will emerge that uses high-tech tools and systems to collect and manage public information and services. Judgement and decision-making will be based on analytical processing of factual information from the many by the few for the benefit of all. Full-scale automatic simulations and policy intelligence tools will facilitate decision-making and the oligarchs will simply approve the recommendations of these tools for the best policy option for the majority of citizens. ‘Real-time governance’ will be possible where the government/citizen relationship is under total control. Public service delivery will be personalised without people having to ask, thus saving a great deal of time. Citizens will trust the government and will be willing to delegate their right of initiative. They will be persuaded to be happy with this situation, as no human-caused problems will exist; emotions and thoughts will be controlled and directed towards the public good. Citizens’ choices will be restricted by predefined and pre-calculated algorithms that optimise people’s performance. However, information overload or potential failure of information systems to respond to critical, unforeseen situations would result in chaos, with humans and devices not knowing how to respond.

In the Privatised Governance Scenario, society will be shaped by decisions taken by corporate business representatives. Discussion on social issues and about the role and behaviour of citizens will be muted, as people will be pawns whose needs and desires will be managed by large corporations. Interactive and participatory governance mechanisms will be sidelined, along with democracy as we know it today. Simulations based on data gathered by sensors and collected from continuously monitoring and analysing networks, businesses, customers and the environment will produce global information that will nonetheless be fragmented and owned by corporations. Systems will be threatened by frequent attacks from independent groups and dissident communities. The media will be owned by the large corporations and will generally support them. Misinformation and jamming campaigns will be launched, making it necessary to verify all information and data. In this scenario, there will be opportunities for high innovation and development due to the pressure of competition on a free market. However, such opportunities will be useful only for the limited number of users able to afford them. Risks will arise due to private interests and fragmentation of the public good, leading to a ‘fragmented society’ where social welfare services will not be guaranteed to all, thus exacerbating possible social tensions and conflicts.

The Self-service Governance Scenario envisages a society where citizens will be empowered to play the role of policy makers. In small expert communities, citizens will devise policies according to the do-it-yourself principle; they will choose from a menu of public services those they need and consent to. This ICT-enabled, self-organised society will be able to address emerging problems faster than traditional government could. Its creative, contextual solutions could prove to be more robust and resilient in a crisis. Nevertheless, the diversity of opinions between discrete communities may result in the deepening of existing divides and a lack of social cohesion. Insularity will afflict minorities most severely, as they lack local social networks and may run into communication problems due to language and cultural differences. However, thanks to efficient translation tools, the dissipative communities may, in the end, create a vibrant cross-cultural and multi-language society. The difference between success and failure will be marked by the distinction between creative group thinking and ‘crowd stupidity’. The process of the gradual disappearance of institutions and lack of trust in government will result in the need for new trust providers. Reputation management, for content and people, will play a significant role in service provision. As the majority of citizens will not be interested in participating in governance due to the lack of engagement culture, new Caesars may emerge who unify disparate groups but damage the subtle equilibrium between self-serving and collaborative cultures.

A Radically Different World Due to ICT Disruptions

In all the scenarios developed, the world in 2030 is expected to be radically different from today’s due to the unprecedented growth and speed of ICT uptake in several fields and the related impact ICT tools that enable governance and policy modelling techniques may have. The influences and drivers of innovation and renewal in the public sector, combined with increased financial pressure on states, will result not only in change, but will also affect the pace at which the state adapts to the new environment, to its new roles and to increased engagement with stakeholders and users.

Whichever scenario dominates in the future, conventional wisdom and familiar governance models will be challenged in the coming years as ICT-based disruptions impinge on democratic, consultative and policy-making processes. There is already evidence that the scope and scale of the transformations to come will have a major impact on society.

Since 2005, there has been a phenomenal growth in mass on-line collaborative applications, which has captured the imagination and creative potential of millions of participants – particularly the younger generations. In addition to new forms of leisure pursuits, community-building activities have also entered the political arena. Hence, these tools herald the transition to a different form of dynamically participative governance models.

Current Governance Models Not Appropriate

While such scenarios are readily imaginable, it is recognised that we currently do not have appropriate governance models, process flows or analytical tools with which to properly understand, interpret, visualise and harness the forces that could be unleashed. Present governance processes provide laws and regulations, interpret and define societal norms and deliver societal support services. Their legitimacy is derived through democratic processes combined with a requirement for transparency and accountability.

In a world that is increasingly using non-physical communication and borderless interaction, the traditional roles and responsibilities of public administrations will be subject to considerable change, and classical boundaries between citizens and their governments will become increasingly blurred. The balance of power between governments, societal actors and the population will have to adapt to these challenging new possibilities.

The scenarios developed as part of CROSSROAD served as an input to be compared with the integrated analysis of the state of the art in the domain of ICT for governance and policy modelling. Based on this comparison, a gap analysis was conducted to identify an exhaustive list of specific gaps where on-going research activities will not meet the long-term needs outlined by the future scenarios.

Through a participatory foresight process it was possible to bring together not only experts and interested parties from academia and research, industry and government, but also to involve directly policy-makers and other interested stakeholders. This exercise resulted in a substantial contribution to shaping the roadmapping of future research in the domain, thus proving to be useful and needed.

New Tools to Fully Exploit Mass Collaboration

Altogether, and due to the increasing demand for openness, transparency and collaboration that address broad governance and policy-making challenges, the scenarios identify the need for developing and applying ICT tools and applications that fully exploit the potential of mass collaboration and the open and participatory paradigm underpinning future technological developments and policy directions in Europe.

Research and innovation investment in this domain could create value for the EU community and avoid fragmentation of research efforts. It will require the development of a joint strategic research agenda on ICT for governance and policy modelling to support the building of an open, innovative and inclusive Digital Europe 2030. Innovation, sustainability, economic recovery and growth will in fact depend more and more on the ability of policy makers to envision clearly and effectively both the root causes and the possible solutions to complex, globalised issues.

Author: Gianluca Misuraca     gianluca.misuraca@ec.europa.eu
Sponsor: European Commission, Seventh Framework Programme, Work Programme ICT 2009-2010
Type: 1. European/international – covering issues from a European or even global perspective

2. Field/sector specific: focusing on ICT for governance and policy modelling

Organizer: European Commission, Joint Research Centre, Institute for Prospective Technological Studies
(JRC-IPTS), Seville, Spain
Duration: 01-12/2010 Budget: N/A Time Horizon: 2030 Date of Brief: June 2011  

 

Download EFP Brief No. 194_Digital Europe 2030

Sources and References

European Commission, JRC-IPTS Scientific & Technical Report (2010) Envisioning Digital Europe 2030: Scenarios for ICT in Future Governance and Policy Modelling, Editors: Gianluca Misuraca and Wainer Lusoli, EUR 24614 EN – 12/2010 – http://ipts.jrc.ec.europa.eu/publications/pub.cfm?id=3879

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. 190: Agriculture and the Challenges of Energy

Wednesday, August 10th, 2011

Energy in agriculture is all too often seen as a purely cyclical issue whereas it brings more complex challenges in terms of economic stability for agricultural holdings, impacts on the environment and climate, on food supply chains and spatial planning. The present brief describes the main results of a prospective study led by the Centre for Studies and Strategic Foresight (at the French Ministry of Agriculture). A group of experts used the scenario method to imagine possible futures of the agriculture-energy system in 2030 and help identify priorities and options for public action.

Energy at the Heart of French Agriculture

Energy is of major importance for the future of agriculture in France although it receives relatively little analytical attention. Control of energy consumption is an economic issue for agricultural holdings, which consume energy both directly (fuel oil, electricity and natural gas) and indirectly (energy for the manufacture and shipment of farm inputs). All in all, French farming consumes around 11 Mtoe (million tonnes of oil equivalent) a year: 5.3 Mtoe directly and an estimated 5.4 Mtoe indirectly. Taking all French holdings together, expenditure on fuel and lubricants represents 8.3% of intermediate consumption, 13.1% of the costs of fertilisers and 21.6% of livestock feed. The share of energy consumption in production costs varies widely according to the type of production: 23% of intermediate consumption relates to fertilisers and soil improvement for cereal and protein crops; 67% results from feed purchased for granivorous livestock holdings between 2005 and 2008. For an identical output, there are wide variations in energy costs at the farm level depending on production systems and practices. The prices for these inputs may also vary widely, reflecting those of fossil fuels. A high oil price may therefore have major consequences for the economic balance of holdings: the double burden of low farm prices and high energy prices may cause unavoidable and difficult situations. The issue of energy also involves logistics, the organisation of agricultural supply chains and the distribution pattern of farming activities across regions. This is so because the distances separating production areas, consumption areas and sources of input supply are reflected in energy consumption.

Moreover, energy and climate are intertwined issues. Agriculture could contribute to national targets for containing global warming by cutting its emissions, producing renewable energy and sequestering carbon in soil. On the other hand, ambitious climate and environment policies may increase fossil fuel prices.

A Collective and Systemic Approach for the Scenario Method

Since the interaction between agriculture and energy is complex, this subject was addressed using a collective approach based on the scenario method.

The ‘Agriculture Energy 2030’ group involved around forty participants with a wide range of skills and backgrounds from concerned ministries (Agriculture and Fisheries, Sustainable Development), public agencies (ANR, ADEME, FranceAgriMer), technical institutes (CTIFL, IFIP, Institut de l’élevage), the farming world (FNCIVAM, FNCUMA, SAF), research bodies (CEMAGREF, INRA), civil society (FNE) and the private sector (Total, ANIA).

This foresight exercise is centred on agriculture. It leaves out both fisheries and forestry, and the agrifood and retail distribution industries are only marginally considered in the exercise. In addition, climate change is only considered for its direct link with energy, that is, greenhouse gas (GHG) emissions caused by direct and indirect energy consumption and renewable energy production. Issues relating to biomaterial and bioproduct production have also been considered in the core analysis. Finally, the analysis restricts itself to mainland France because the French overseas territories have very specific agricultural and energy features of their own.

The choice of time frame to 2030 is a trade-off between the desire to capture cyclical effects and the necessity of working with a manageable, not too distant time scale. Within this basic framework, the Agriculture Energy 2030 group identified five components made up of 33 variables relevant to explaining the possible futures of the agriculture-energy system.

A study card was created for each variable to set a number of hypotheses as to its future development. This exploratory work was based on the identification of past trends, emerging trends and the main areas of uncertainty to be considered when looking forward into the future. Proceeding very conventionally, these hypotheses were combined for each component to produce micro-scenarios, which were then combined to generate global scenarios. For greater consistency and to cast a more informative light on the issues surrounding agriculture and energy, the global scenarios were quantified using a model (Climagri) to estimate French farming production, energy consumption and GHG emissions by 2030. These scenarios are not predictions of the future and reflect even less the preferences of the expert group or the French Ministry of Agriculture. They were used as conjectures to alert actors and decision-makers.

A Set of Four Scenarios to Highlight Energy Challenges in Agriculture

Scenario 1: Regionalisation and frugality to confront the crisis

A profound energy crisis undermines conventional business models. The international context is tense and focused on protection of domestic markets. Around 2020, the management of public policies is entrusted to a greater extent to regional authorities, which are seen to be closer to the development issues of their territories. By 2030, the agricultural world has changed profoundly and faces a number of external constraints: energy prices at sustained high levels, a budget crisis and loss of legitimacy of the central government, a withdrawal to home regions and a contraction in international trade. Agriculture adapts as a matter of urgency, employing a strategy focused on the local level, accompanied by major institutional reform.

The growing self-sufficiency of production systems inevitably involves input reduction, more extensive livestock farming and diversification. The search for complementarity between crops and livestock or between types of crops across holdings and regions becomes a general reality. By 2030, this transformation is not harmonised across the French territory and there are major regional disparities. Lower levels of specialisation and production lead to a limited export capacity. French farming makes major cuts in its energy consumption (down by 32%). Renewable energy produced on the farm supplies additional income, but its development depends on local potential and dynamics. Extensive use is made of biomethanation and wood-for-energy, but expansion of biofuels is held back by high agricultural prices.

Scenario 2: Twin-track agriculture and energy realism

Against a backdrop of high energy price volatility and further trade liberalisation, public support for agriculture declines with a refocusing on remuneration for the public goods provided by agriculture. These changes have very different impacts on holdings depending on whether or not they meet local demand for the local supply and provision of public amenities. Two forms of agriculture exist side by side in 2030:

– “Business Farming” (mainly on the plains of the Northern , Western and Central France): these farms manage to be competitive and to position themselves on export markets. Intensification and restructuring result in a high-precision, high-input farming system. Energy use is optimised on these farms as a response to economic drivers. Energy optimisation is benefited by private-sector market supply of technology and counselling services.

– “Multifunctional agriculture”: these farms diversify their activity and are remunerated for the environmental services they provide (water, biodiversity, landscape, carbon storage). Their main activities are extensive livestock, organic and mixed crop-livestock farming. Such holdings adopt strategies focused on self-sufficiency and low energy use close to those in Scenario 1.

Overall, there is little change in energy consumption. Renewable energy production expands moderately, with investments being held back by price volatility. Biofuel production is more strongly developed in integrated and innovative industrial sectors.

Scenario 3: Health-centred agriculture with no major energy constraints

In 2030, urban consumers are more numerous and more influential. With the backing of the large retail chains, they have succeeded in imposing a major reduction in the use of pesticides by agriculture on grounds of the protection of human health rather than protection of the environment. In the absence of major energy constraints and strong environmental policies, urban sprawl continues to expand. Agricultural supply chains are shaped by their downstream components, with quality schemes and mandatory specifications becoming highly prescriptive with regard to reduced pesticide use. Producers adjust more or less. Some sectors are negatively affected by this new constraint. The most isolated rural regions experience significant abandonment of agriculture. Conversely, the major cities invest in periurban farming to meet the demand for open spaces and local food supply. A specialised and technically sophisticated agricultural model involving integrated pest management has developed. It aims at high production levels and at abating pesticide use at the same time. In parallel, organic farming develops significantly. The absence of any major constraint in terms of policy or energy pricing results in a slight fall in overall energy consumption since production inputs are partially substituted by efficiency gains in machinery. The production of biofuels expands strongly, driven by the early arrival of second generation technologies.

Scenario 4: Ecological agriculture and energy savings

Approaching 2015, the need to make sharp reductions in the environmental impact of human activity leads to a consensus both in the developed world and slowly in the emerging countries. European households adapt their consumption patterns out of concern for preservation of the environment and in response to prices that now include the environmental cost of products. The implementation in 2016 of a common EU-US CO2 market with border adjustment mechanisms triggers a massive shift towards ecological modernisation. In this context, agriculture evolves toward new production models with smaller environmental impacts; the trend is supported by a reformed agricultural policy. This change, however, is both difficult and gradual. The initial resistance of the farming world delays the behavioural changes. Major mutations in the whole agri-food system are also required. From 2020 on, French agriculture becomes ‘ecologically intensive’ on the wide cereal-growing plains of the country: for example, crop diversification, general use of nitrogen-fixing crops at the beginning of rotation sequences and no-tillage become common. In hilly and mountainous lands, farmers are paid for environmental services and are encouraged to meet self-sufficiency at the farm (diversified systems based on mixed crop-livestock farming) or across whole regions (complementarity between farms). Biomethanation and renewable energy production are strongly developed.

Future Requirements for Policy

The expert group sketched out ‘come what may’ strategies that can be expected to remain valid in any future context. The use of fertilisers is a core element of energy balance, and the technical means for reducing nitrogen inputs are well known (long crop rotation sequences and diversified crop choices, use of green manure, organic sources of nitrogen and so on). Their general adoption requires awareness-raising and educational efforts directed at the farmers along with networking to support farmers in exchanging experiences. The need for changes may call for the use of strong normative or economic instruments.

The Agriculture Energy 2030 group has highlighted the advantages of biomethanation, on condition that the digestates are correctly recycled. The structuring and development of the relevant sector supply chains are major issues. Digestate centrifugation is one of the most promising avenues because it allows an easily transported solid phase rich in nutrients (ammonia, phosphate, potassium) to be isolated, along with a liquid phase that is rich in nitrogen but which must be used in nearby areas (spreading). Official approval for the products obtained in this way could provide a major boost.

Another advantage of biomethanation is the production of renewable energy (electricity and heat). The existing support schemes for the installation of digesters on farms should be accompanied by biogas purchase prices to offer greater incentives and forward visibility to investors.

Preference for local supply of protein for animal feed was seen as an advantageous strategy. The goal is to reduce the transportation of these inputs through on-farm production or local supply and to give preference to protein sources requiring low levels of inputs for their production. Grass-based livestock farming particularly deserves to be encouraged given its self-sufficiency and the numerous amenities it provides. Strategies aimed at expanding the use of grass in livestock farming and introducing legumes into pastures are of interest and should receive appropriate technical assistance.

Agricultural machinery constitutes a major area for fuel savings and a lever for change, which could be easily used. Investment in proper adjustment and maintenance of tractors, replacement of machinery and reductions in engine power should receive financial support while giving priority to pooled uses. Elimination of the need to till the soil (notably by means of zero-tillage) could be explored for the reduction of fuel consumption. Extensive effort on training and research is, however, required.

Innovation in the organisation of the agricultural sector to improve energy balances across production regions is needed. The group recommends that production systems should be diversified and products traded between holdings. Support would be appropriate for farmers committing to innovative modes of production (e.g., crop-livestock complementarity, organic farming, high environmental value) through proactive policies on land and installations, especially in the most specialised regions. In addition, the provision of technical and financial support for the development of on-farm primary processing of water-rich products could help reduce transport-related energy consumption while at the same time diversifying farmers’ income sources.

There is nevertheless a need to study case by case the energy efficiency and economic viability of this kind of development, which requires major investments and increases farm workload. The development of on-farm storage facilities and conservation technologies helps reduce wastage and thus provides another tool for action. Lastly, there are avenues to be explored for the improvement of the energy performance of short supply chains: delivery pooling, modal transfer, avoidance of empty return trips and so on.

  • The development of renewable energy production must be supported and channelled. Renewable energy, other than biomass can provide additional income, depending on farmers’ investment capacity and local potential. Moderate purchase prices should help avoid excessive speculation and the risk of unbridled development of installations on agricultural land. Where biofuels are concerned, public support should favour the most competitive and best environmentally performing sectors. Such targeting of support would help ensure that budget leeway can be found to increase R&D efforts and assist investment in second-generation technologies. Support of this kind should be made conditional on compliance with demanding sustainability criteria. The rising importance of ligno-cellulosic biofuels will also require sustainable management and the mobilisation of large quantities of biomass. Farm fuel taxation might also be revised in order to offer greater incentives for fuel economy.
  • Reduction of the energy consumption of buildings is a necessity for the high direct energy consuming sectors. Large-scale investment should, for instance, be provided for the modification and effective insulation of buildings, the installation of heat economisers or biomass boilers and for lighting optimisation. Financial support in the form of grants or loans could be provided on condition of complying with thermal standards for buildings. A wide-ranging scheme could be implemented along the same lines as the PMPOA (French programme for the control of pollution of agricultural origin). Lastly, priorities for agronomic research and the dissemination of innovation in agriculture were highlighted. Indeed, considerable uncertainty remains and more knowledge should be gained on indirect energy consumption (especially for animal feedstuffs), end-to-end energy balances in agricultural supply chains, the logistics of agricultural and food products and the energy content of those logistics. In particular, current work on the development of short marketing chains for agricultural products should not neglect this aspect. Generally speaking, comparisons of the energy balances of different agricultural holdings must be continued and improved to help understand discrepan-cies in levels of consumption and energy efficiency in different production systems.

Varietal improvement should focus on the development of high-yield protein crops and less nitrogen-dependant cereals and oilseeds. Alongside this, research into production systems should address low-energy systems (e.g., integrated production, grass-based systems) and alternatives to tillage. Support for organic farming should go hand in hand with research into increased yields and methods for reducing direct energy consumption.

Innovation transfer is the keystone of any successful strategy. Governance of R&D should be broadened, for example, by involving practitioners in the R&D organisations. Developing a network of experimental farms is also essential for the definition and transfer of innovative techniques and technical benchmarks. Lastly, several factors are holding back useful initiatives to sustainably improve the energy efficiency of agricultural holdings and supply chains: energy price volatility, low taxation on energy products in agriculture and lack of knowledge. Efforts to communicate, raise awareness and provide training must accompany any action.

Authors: Thuriane Mahé                               thuriane.mahe@agriculture.gouv.fr

Julien Vert                                      julien.vert@agriculture.gouv.fr

Fabienne Portet                              fabienne.portet@agriculture.gouv.fr

Sponsors: Ministry of Agriculture, Food, Fisheries, Rural Affairs and Spatial Planning
Type: National foresight exercise
Organizer: Centre for Studies and Strategic Foresight (CEP)
Duration: Jun 09-Dec10 Budget: N/A Time Horizon: 2030 Date of Brief: July 2011

 

Download EFP Brief No 190_Agriculture and Energy_2030

Sources and References

Vert J., Portet F., (coord.), Prospective Agriculture Énergie 2030. L’agriculture face aux défis énergétiques, Centre d’Études et de Prospective, SSP, Ministère de l’Agriculture, de l’Alimentation, de la Pêche, de la Ruralité et de l’Aménagement du Territoire, 2010 (in French).

Prospective analysis Agriculture Energy 2030 (in English), see http://agriculture.gouv.fr/IMG/pdf/CEP_Agriculture_Energy_2030_Synthesis_English.pdf.

For further information on this project, see http://agriculture.gouv.fr/agriculture-energie-2030,1440.

EFP Brief No. 187: Using Foresight to Involve Industry in Innovation Policy

Thursday, August 4th, 2011

The brief describes the design and implementation of a success scenario workshop used in Malta to allow industry to give a foresight-based input to the design of innovation policy. The exercise drew upon the results of several industry-level studies in the small new EU member state aimed at identifying the drivers and inhibitors of private sector R&D and innovation investments.

Re-designing Regional Innovation Strategy

The exercise drew upon the results of several industry-level studies in Malta aimed at identifying the drivers and inhibitors of private sector R&D and innovation investments.

The segmentation of this micro-ecosystem into three types of firms – start-ups, SMEs and large firms – linked by a complex network and common framework conditions, provided the backdrop for a future-oriented exploratory exercise that considered the implications of the drivers of R&D and innovation in future markets, products, processes and services.

The brief describes the methodology and results of this workshop aimed at designing creative measures for innovative futures and hence encouraging firms to increase the level and effectiveness of their R&D expenditure. Lessons for the use of the success scenario approach for innovation are discussed.

Innovation is a key to the survival and growth of businesses in the present global competitive environment. Yet for many firms it remains a daunting challenge. Government today recognises that it must provide the conditions in which enterprises can flourish, and this includes provision of policies and support measures that help firms bring successful innovations to the market. Some policy measures in this area are longstanding, but the changing environment means that there is a need for constant review and adaptation to meet firms’ current and future needs.

The Futurreg Project

At the time this exercise was undertaken, Malta was reappraising its innovation policy support framework. The national agency responsible for enterprise support and innovation (Malta Enterprise) was developing a regional innovation strategy (MARIS).

Futures approaches were applied as part of this innovation strategy through Futurreg, an Interreg3c project aimed at promoting the use of foresight in ongoing regional development projects. The other main actor was the Malta Council for Science and Technology, which represented the Malta partner in Futurreg. The Council provided foresight support to MARIS and used the project to consult business and other stakeholders on necessary measures to support future innovation needs. This brief describes the findings of a success scenario workshop that had three aims:

  • to define a broad framework for a future-oriented national innovation policy,
  • to create an enhanced and shared understanding of the drivers of innovation,
  • to explore success scenarios and design new measures tailored to the specific needs of three types of Malta-based companies (see below).

The workshop brought together major stakeholders in innovation, including business leaders representing the three targeted groups of firms, public entities and other agencies supporting local business, and university experts. The basic idea was that by looking at drivers of innovation in the future and by identifying key deficiencies of firms in Malta in their ability to respond to these drivers, it would be possible to design policy measures that would address those deficiencies in the most effective way. In advance of the workshop and in consultation with stakeholders, a number of key drivers of innovation were identified, including economic, political, environmental, security, health, social change and ICT factors.

Success Scenario Workshop: Action-based Approach

The success scenario approach used was developed at the University of Manchester and has been applied in exercises setting UK national strategy for ICT, biotechnology and nanotechnology as well as in policy-related areas such as university-industry links (Cassingena Harper and Georghiou, 2005), international scientific cooperation policy (Georghiou et al., 2006), infrastructure policy (Keenan and Popper, 2007) and the development of the European Research Area. Ian Miles has described the success scenario approach in terms of two elements:

  • Desirability: capturing a vision of what could be achieved or aspired to by the sponsoring organisation or the wider community that it represents.
  • Credibility: the scenario is developed with the assistance and validated by a sample of experts in the area chosen to reflect a broad range of interests and usually including both practitioners and researchers (Miles, 2002).

It is an action-based approach, with the shared vision among senior stakeholders of what success in the area would look like being specified in terms of goals and indicators, which provide the starting point for the process of developing a roadmap to get there. The purpose of having such a vision of success is to set a ‘stretch target’ for all the stakeholders. The discussion and debate involved develops mutual understanding and a common platform of knowledge that helps to align the actors for action.

Discussion of Drivers of Innovation in Firms

The success scenario workshop on Creative Measures for Innovative Futures convened on 15 May 2007. In line with the national research and innovation strategy developed last year by MCST, where it was noted that MCST and Malta Enterprise have shared competencies in the area of research and innovation policy and need to work together in developing new measures, this workshop provided a setting for creating a synergy of efforts in innovation. The workshop offered an opportunity to bring together the insights of relevant stakeholders from business, academia, government and business support agencies in innovation policy design. There was a good representation of all sectors at the event.

The previous Futurreg-MARIS workshop held in March 2007 highlighted the fact that a number of important initiatives are underway focused on promoting innovation in business, namely the MARIS, METIC and Forlink projects. The local industry studies carried out through these projects identified a number of inhibiting factors to innovation and also a range of opportunities in terms of niche areas to be exploited. The aim of the follow-up workshop in May 2007 was to build on this substantial work and place it in a more futures-oriented context where alternative approaches can be openly identified and discussed.

Figure 1 (below) shows the simplified process of the workshop. Items in blue shading represent the inputs coming from previous stages, yellow shading represents group work and green the plenary sessions. The workshop was attended by 45 experts, drawn primarily from the private sector and government but involving also academia.

In the plenary warm-up session, the key drivers of innovation were presented and discussed in order to identify immediate gaps from a local business perspective. Participants were then divided into three working groups, representing the needs and interests of three main types of firms. Workshop participants felt that innovation policies could best be distinguished by an amended classification of three types of firms:

  • Type 1: start-ups
  • Type 2: SMEs
  • Type 3: large firms

The working groups discussed the key drivers and identified the ones that are most relevant to their future development strategies and visions. They focused on the following questions:

  1. Which drivers are currently influencing innovation in your sector?
  2. Which drivers are likely to influence innovation in your sector in the next five to ten years?
  3. What are the likely future trends in innovation in your sector? In your products? In your services and processes?
  4. Are any innovation drivers or trends missing?

The plenary session focused on defining the impact of drivers of innovation on each of these types of firms. Participants were then asked to map the drivers according to their level of importance.

The working groups then focused on identifying the main deficiencies to innovation based on the RICO framework, which separates needs into four broad categories:

  • Resources: Insufficient resources to undertake the work without public funds, which is generally true for academic research and accepted for business R&D that is either highly uncertain and/or where social returns justify an investment that does not meet private criteria.
  • Incentives: Scientific structures or the market provide insufficient incentives for socially desirable behaviour, for example, academic-industrial collaboration. Fragmented or risk averse markets may also obstruct innovation.
  • Capabilities: Organisations lack key capabilities needed for the innovation process, for instance, the ability to write business plans or raise venture capital.
  • Opportunities: Generation of opportunities for innovation provides one of the main justifications of public support of science. Need also to consider how firms can get hold of such opportunities through knowledge transfer/exchange.

Participants were then asked to map the drivers according to their level of importance. A similar map was produced from a discussion of deficiencies drawing upon an earlier exercise (see Figure 3 below).

In the afternoon, the workshop entered into its more creative phase by using the results of the morning session to design Creative Measures for Innovation Support. Working groups then identified appropriate innovation policies to address the particular needs emerging in their discussion. The final plenary session captured the inputs to define a desired and feasible national portfolio of innovation policy measures and instruments.

Innovation Success Scenario for Malta: Change of Culture and Culture of Change

The Success Scenario for Malta takes as its core theme “change of culture and culture of change” as culture emerged as the key driver of innovation, featuring strongly in relation to the discussion on drivers, deficiencies and measures.

Shared Public-Private Innovation Concerns

The key innovation policy challenge for Malta is defining and spearheading a national political and economic vision in a more coherent and integrated way and ensuring broad societal acceptance. Government and enterprise face a number of innovation challenges relating to growing environmental, energy and security concerns and share a set of systemic concerns regarding improved networking and knowledge transfer across sectors and organisations; this involves links between business and academia in particular. Business and government have an enhanced demand for more innovative solutions to societal needs, sparked by the growing sophistication of needs and the emergence of more intelligent consumers and citizens.

Our Success Scenario Pathway: Synergetic relationships need to be developed between the public and private sectors through closer collaboration between government and business on key innovation concerns. Public innovation support to business could target:

  • Engaging stakeholders in implementing a national political vision and renewal while allowing for a dynamic feedback loop and learning.
  • Helping firms to innovate and sustain economic growth and profitability and to provide innovative solutions to societal needs; supporting firms in coping in innovative ways with the challenges presented by the physical environment, including energy and infrastructure; providing firms with capacities for providing innovative solutions to specialised customer demand.
  • Facilitating access to new technologies and knowledge.

The main features of the emergent success scenario were:

  • A political vision on innovation, targeting branding of InnovativeMalta and the provision of innovative solutions for the societal needs spearheaded.
  • This will be implemented through a National Innovation Platform and a strategy for capitalising Xon the small country advantage and geostrategic position coupled with the diffusion of a culture favourable to innovation and risk-taking – a ‘can do’ culture.
  • An ecosystem of well-networked organisations engaged in mutual learning for self-sustaining growth through the nurturing of constant adaptation and learning processes. This will be supported through a state-of-the-art support infrastructure and an accessible national knowledge platform to provide the springboard for innovation.
  • Firms are well-networked to customers at home and abroad and attuned to market intelligence; they scan and make use of enhanced in-house innovation management capabilities.

A series of detailed policy measures targeted to each of the three firm types was also produced.

Innovation Policy: Responding to Drivers of the Future

The success scenario approach is a tool tailored to the needs and realities of senior decision-makers in the public and private sectors while it maximises the chances of engaging real stakeholders at a level of seniority sufficient to implement emerging visions.

The device of a 24-hour workshop only works with extensive preparation to develop framework and contextual information. Innovation policy provides a natural focus for foresight approaches because of the need to respond to the drivers of the future. The framework used needs to be properly grounded in a theory of innovation to ensure that it is not merely an exercise in producing a wish-list.

Iterations and follow-up exercises and activities can provide an ideal opportunity for continuing the discussion on the feedback received, extending the debate to a new cluster of stakeholders or those who were unable to attend the first event. Such activities allow updating the scenarios and recommendations and support reviewing implementation and obstacles to progress.

Authors: Jennifer Cassingena Harper     jennifer.harper@gov.mt

Luke Georghiou                       luke.georghiou@mbs.ac.uk

 
Sponsors: DG Regio, EU Commission, Interreg 3C and Government of Malta  
Type: N/A  
Organizer: Malta Council for Science and Technology  
Duration: January-July 2007 Budget: N/A Time Horizon: N/A Date of Brief: September 2007

 

Download EFP Brief No 187_Using Foresight to Involve Industry in Innovation Policy

Sources and References

Cassingena Harper, J. and Georghiou, L. (2005): ‘Foresight in innovation policy: shared visions for a science park and business–university links in a city–region’, Technology Analysis and Strategic Management 17.

Georghiou, L., Keenan, M., Popper, R., Harper, J., Crehan, P. and Clar, G. (2006): SCOPE 2015 – Scenarios of future science and technology developments in developing countries 2015, Report to European Commission 2006

Miles, I. (2002): Scenarios and Foresight – Towards a Constructive Integration, PREST, mimeo, July.

EFP Brief No. 182: The Future of European Innovation Policy

Monday, May 30th, 2011

This foresight activity was part of the EU FP7 Blue Skies Project aimed at piloting, developing and testing in real situations a foresight methodology designed to bring together key stakeholders for the purpose of exploring the longer term challenges facing their sector and building a shared vision that could guide the development of the relevant European research and policy agenda. One of the four topics chosen in this project was future innovation policy in Europe, as an example of a cross-cutting policy area that affects different policy levels – from European to regional. The exercise was received with great interest by stakeholders and policy actors, leading to high-level participation from member states and at the EU-level.

Preparing European Innovation Policy for the Challenges of the Future

The Europe 2020 agenda has moved innovation to the centre stage of European policy. In the area of innovation, the EU aims to launch a flagship initiative entitled the Innovation Union, outlined in an EC communication in September 2010 (EC 2010).

Stepping up innovation performance is regarded as key for overcoming the current economic crisis, for increasing productivity and creating new markets. It requires improving Europe’s attractiveness for investments in research and innovation, which is hampered by the low efficiency and effectiveness of these investments, even though major differences exist across EU member states and regions. This is an issue of major concern in the light of the changing patterns of global competition, with new countries, such as BRICS, which are entering the stage and quickly strengthening their innovation potential.

At the same time, it is increasingly recognised that, apart from these immediate economic goals, a more long-term concern with the sustainable development of European societies has emerged to demand greater attention. We are confronted with a number of societal ‘Grand Challenges’, which require major innovative, often systemic solutions in order to be tackled successfully: climate change and food supply, scarcity of valuable resources (e.g. water, raw materials, biodiversity) and the changing age structure of our societies, social disparities and healthy living, education systems to meet the demands of the knowledge society, to mention just a few.

These two core drivers of innovation, i.e. the interest in overcoming the economic crisis and tackling the Grand Challenges, which are to be addressed through investments in research and innovation, point to a delicate balance to be struck between the benefits that an individual entrepreneur can expect from his or her investments and the societal costs and benefits from such investments and related spill-over effects. Future innovation policy needs to devise the right framework conditions to reconcile these two important but sometimes contradictory cost-benefit considerations and to do so against the background of changing patterns, practices and models of innovation.

The changing nature of and demands on innovation require rethinking the existing rationales for policy intervention in the light of the EU 2020 agenda. An incremental improvement and upgrading of conventional innovation policies will not do the job; current innovation policy is riddled with too many fundamental flaws and deficits. A major overhaul is needed of the governance structures and processes in the field of innovation policy. It is not only a question of what future innovation policy should look like but also how to move towards a new organisational model for innovation policy. It should enable a coherent policy approach and thus ensure that counterproductive effects of different policy areas are avoided and that innovation is paid due attention also in other policy areas than those directly devoted to research and innovation. Moreover, it is crucial to establish a transparent and coherent division of labour between regional, national and European policy levels as well as efficient cooperation between member states, for instance, on issues such as access to research funding or the engagement of national organisations across borders.

Success Scenario Approach

Based on a comprehensive background paper, a workshop was organised in Brussels on 27/28 May 2010 with about 30 high-ranking experts and decision-makers. It focused on identifying perceived gaps in innovation policy to be tackled to support Europe on its way towards an Innovation Union.

The purpose of the workshop was to bring together experts from different policy areas and levels of relevance to innovation in Europe with experts from research and industry to analyse the relationship between sectoral, cross-cutting and innovation policy agendas and their implementation at the European and national level, and to explore the means and actions for improving their coherence. A first step in the process was to develop a vision how European institutions can take shared responsibility for innovation and formulate requirements and key challenges for the future of innovation policy. A second session aimed at identifying key policies to support effective innovation, with an emphasis on the European policy level. The results were condensed into a success scenario framework for future European innovation policy. As a third step, the workshop focused on matters of innovation policy governance; an issue that has not received much attention in recent EU innovation policy debates. The time horizon of the exercise was 2020.

Apart from its contribution to current innovation policy debates, the exercise was also to pilot and test in real situations a foresight methodology designed to bring together key stakeholders to explore the longer term challenges that face their area. The methodology is inspired by the notion of success scenario. The purpose of such a scenario is to set a ‘stretch target’ for all the stakeholders. In this specific case it aims to build a shared vision capable of guiding the development of the relevant European research and innovation policy agenda. This includes anticipating changes of the European research and innovation landscape, of national and European policies and of associated governance mechanisms, which would be needed to take forward that agenda.

Gearing Innovation Policy toward Grand Challenges

The combination of interactive success scenario development and desk-based innovation ecosystem mapping brought up a number of important findings. Three of them merit particular attention:

A Broader Understanding of Innovation

The workshop underlined that future innovation policy will have to be based on a much broader understanding of innovation than at present. Four main features will have to receive much greater attention than today:

  • Innovation takes place in an ecology of different actors and activities, comprising research, market and societal demands, finance, and institutional frameworks, i.e. it is based on a network of relationships between innovation actors and the environment structuring those relationships. The ability to source knowledge developed elsewhere or to be a knowledge supplier, as captured in the terminology of ‘open innovation’, has started to transform business models and processes. This development has led to an embedding of local knowledge production in global innovation networks, but it is also recognised that the local context still matters for providing appropriate solutions.
  • Users have a prominent role to play in devising innovations that are in line with specific and local requirements. Greater concern for the needs and interests of users is reflected in the growing recognition of the importance of innovation in services. While representing around 70% of GDP in most European countries, services have long been neglected by innovation policy. The public sector plays a much more important role for innovation than has been recognised in the past, as a user and shaper of innovation as well as by stimulating the capabilities of potential users to specify their demands on innovation.
  • This shift in attention also extends to what constitutes innovation in the first place. Social and organisational innovations are not only complementary to technological innovation but equally important novelties in their own right. Often, they cannot be dissociated from each other and require a stronger role and thus empowerment of people (OECD 2010). R&D is just one contribution to innovation. This is particularly obvious in the service sector where innovation takes place despite the lack of explicit and dedicated R&D.
  • Finally, it is also increasingly recognised that there is no single innovation model that fits the requirements of all fields of innovation. Greater diversity in research and innovation patterns can be observed, as reflected in the greater attention paid to sectoral and thematic specificities of innovation.

Future Requirements for Innovation Policy and Its Governance

A total of sixteen principles or “commandments” of future innovation policy and its governance were formulated in the context of the workshop. They apply to the European as well as at member states level:

In addition to these principles of innovation policy, six principles were formulated that should guide the future governance of innovation policy in Europe.

A Success Scenario Framework for Future Innovation Policy in Europe

The competencies of the EU in matters of innovation policy are limited. However, to make the most effective use of the specific advantages that these limitations imply, the participants of the workshop suggested a framework that builds on three major pillars of European innovation policy (see Figure 1 in the next column).

Pillar 1: Issue-oriented innovation policy: Focus on Grand Challenges

In line with the Innovation Union flagship initiative, a reframing of innovation policy as a means not only of enhancing competitiveness is recommended but also for addressing Grand Challenges. In order to achieve this, the policy instruments available to the EC are limited, but it could nevertheless spearhead the principle of recognizing and using all forms of innovation – technological, social, organisational and institutional – as equally important means of tackling societal challenges. This principle also implies that simply combining research and innovation policy is not enough because it would imply a restriction to research-led innovation and thus ignore the importance of the other dimensions of innovation needed to meet such challenges. Instead, the EC could strive to inject innovation objectives into its sectoral and cross-cutting policies: a range of powerful demand-side policy instruments could be used to support innovation for tackling Grand Challenges.

A number of concrete examples of first pillar policy initiatives were also suggested, such as

  • going beyond an integration of research and innovation policy and considering the integration of innovation agendas into sectoral policies, or
  • making innovation-friendliness a standard criterion for defining “good practice” regulations in sectoral policies.

Pillar 2: Systemic innovation policy: dealing with systemic deficits

Grand Challenges should not become the sole concern of European innovation policy. There are a number of cross-cutting problems and systemic deficits that need to be addressed through a targeted innovation policy at the European level, including the Community patent, the realisation of an internal market for innovation-oriented procurement, state aid rules, or the improvement of framework conditions for enabling the fast growth of high-tech companies. If indeed innovation becomes a major concern of sectoral and cross-cutting policies, systemic innovation policy initiatives are likely to receive widespread support in related policy areas as they will be recognised as crucial drivers for realising their mission of tackling Grand Challenges through innovation.

Examples of second pillar policy initiatives comprise

  • adjusting state aid rules and other elements of competition policy in order to remove inherent barriers to innovation and
  • revisiting public procurement practices and regulations to enable the full exploitation of their innovation-enhancing potential across borders and in the context of Structural Funds.

Pillar 3: Orientation and rationales for innovation policy in Europe: providing vision and leadership for innovation to become a horizontal concern in a multi-level policy context

The political competencies of the EU may be limited, but this apparent weakness offers the opportunity to fulfil the role of intellectual leader in the innovation policy debate in Europe. By identifying deficits, developing visions and formulating rationales for innovation policy, the EU can provide orientation and common reference points for all levels and areas of policy. This has already happened in the past; the momentum generated by the European Research Area concept is a clear example of leadership, in spite of limited formal competencies. Intellectual leadership has the potential of projecting strong messages, which can be communicated to the highest levels of decision-making as well as to the public. In this way, innovation can be assigned the highest priority on the policy agenda. The notion of Grand Challenges is very helpful in this regard because it has the potential for connecting seemingly abstract notions of innovation policy with the deepest concerns of citizens. However, in order to be convincing, European institutions must lead by example, i.e. the concept of innovation needs to be much more embedded in the actual operations of public administrations. An “entrepreneurial innovation policy”, for instance, requires that risk-taking and collaborative modes of policy-making are internalised in the EC services as a starting point if member states are to follow the lead.

Policy initiatives that are in line with Pillar 3 are, for instance

  • establishing a culture of co-development in public administration to enable effective procurement procedures, including the fostering of training and information exchange about experiences and good practices in co-development and
  • providing incentives to encourage experimenting and risk-taking in public administration at the European level, for instance, by alleviating provisions on personal financial liability for EC staff and by supporting a risk-tolerant and trust-based approach to managing innovation.

Keys to Future Governance of European Innovation Policy

By its very nature, the results of the exercise were very much geared towards providing policy insights, both with regard to substantive policies and the governance of innovation policy. Key questions of governance will need to be tackled in the coming years if the three pillars model is to be realized. At the workshop, some ten governance questions were formulated alongside with some first tentative inroads for dealing with them, but much more effort is needed to realize a significant change in European innovation policy governance:

  • How can innovation become a key concern across all sectoral and cross-cutting policies?
  • How can shared future visions be established that have the necessary weight to be meaningful for decision-making?
  • How can Grand Challenges be concretized to provide operational orientations that help ensure coherence and alignment across policy areas?
  • How can horizontal coherence of policy development and design be ensured?
  • How can a distributed model for policy implementation be defined?
  • How can coherence in innovation policy be achieved in a multi-level governance setting?
  • How can coherence with stakeholder opinions, interests and decisions be achieved?
  • How the EC can deliver a range of outcomes with less resources?
  • How can transparent and rational communication be ensured?
  • How policy learning based on local experiences with new forms of innovation be improved?
Authors: Matthias Weber matthias.weber@ait.ac.at

Luke Georghiou Luke.georghiou@mbs.ac.uk

Sponsors: EU Commission
Type: EU-level single issue foresight exercise
Organizer: FP7 Farhorizon Project Coordinator: UNIMAN, Luke Georghiou
Duration: Sept 08-Dec10 Budget: N/A Time Horizon: 2020 Date of Brief: Feb 2011  

 

Download EFP Brief No. 182_European Innovation Policy

Sources and References

European Commission (2010): Europe 2020 Flagship Initiative Innovation Union, Communication from the European Commission, COM (2010) 546 final, Brussels

OECD (2010): The OECD Innovation Strategy: Getting a Headstart on Tomorrow, Paris

Weber, M., Georghiou, L. (2011): Dynamising Innovation Policy. Giving innovation a central role in European policy, Synthesis Report of a Foresight workshop organised as part of the FP 7 Blue Skies Project FarHorizon

For further information on the FarHorizon project see http://farhorizon.portals.mbs.ac.uk/