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Report

Teaser, summary, work performed and final results

Periodic Reporting for period 1 - INNOVA_MEASURE 2 (Statistical analyses and composite indicators in research and innovation)

Teaser

Summary

An increasing amount of tools are available for policy makers to monitor the performance of countries\' research and innovation system from multiple aspects. At the same time, in order to explore the full potential of indicators, it is necessary to take a close look at their micro-foundation, to identify how innovative activities in different industries create economic growth and employment and how Europe can attract more private investment in research and development (R&D). This is instrumental to implementing the EU2020 strategy and its Innovation Union flagship initiative, which foresee national governments increasing their investment in innovation, modernizing framework conditions for enterprises, and enacting measures to enhance cross-border cooperation to boost competitiveness and knowledge-based growth.
The main objective of INNOVA Measure 2 is to describe and explain the link between the organization of research and innovation on the one hand and innovative performance, economic growth and employment on the other, by focusing on 5 areas:
1) sectoral and cross-country differences in fast-growing, innovative enterprises in Europe
2) the phenomenon of return mobility of researchers
3) the location determinants of foreign direct investments in R&D at the regional level in Europe
4) the improvement and refinement of existing indicators to measure research excellence and innovation
5) the impact of EU research funding initiatives on the production of excellent research

Work performed

The first work stream of INNOVA Measure 2 examined Community Innovation Survey (CIS) data to gain new insights on high-growth, innovative enterprises (HGIE) in Europe. Such firms are a key source of business dynamics, but little is known about their actual share in the enterprise population. This is due to an inherent uncertainty in how to distinguish high-growth firms from non-high-growth ones. Our study showed that the share of HGIEs in Europe ranged between 0.1 to 10% depending on the adopted definition. We observed a trade-off between high-growth and innovation performance at the country-level (differently than at the sectoral level), highlighting the importance of structural differences across EU Member States in terms of firmsâ€™ innovation profile, size and associated high-growth performance.
In a subsequent study, we analyzed the complex relationship between strategies, obstacles and firm performance. We found that firms pursuing adaptability strategies and perceiving the lack of qualified personnel as an important obstacle grew faster, those with explicit product innovation strategies were more innovative, and those pursuing cost reduction strategies and perceiving the lack of demand and of adequate finance as important obstacles experienced the worse performance. High-growth enterprises, in comparison with other firms, were less sensitive about financial constraints, more interested in the availability of skilled labor and benefited more from cooperative strategies.
The second work stream provided a conceptual and empirical study of the return mobility of scientific researchers in Europe. Researcher mobility is typically conceptualized under the assumptions that human capital is efficiently used by the productive system. Our study identified two other approaches in the literature that may be more aligned with how scientific research is carried out. Using data collected in the context of the MORE2 survey, we distinguished and analyzed return mobility patterns and motivations. We found that family ties and academic reasons are important determinants of mobility. The study also examined potential alternative data sources and highlighted the vast potential in novel â€œbigâ€ or administrative data.
The third work stream studied location determinants of foreign direct investments (FDI) in R&D in European regions, which are important catalysts of economic development. Our study investigated the factors that affect the degree of attractiveness of European regions from the perspective of a company investing abroad based on evidence gathered from all the FDI in R&D realized between 2003 and 2014. The fiscal regime and the size of destination regions as well as the sharing of a common language in the sending and receiving regions were the most important determinants. Labor costs, technological strength and R&D expenditure, especially performed by the higher education sector, deemed also important.
The fourth work stream focused on refining composite indicators and frameworks of research ad innovation. The Innovation Output Indicator (IOI) 2016 methodology report presented the 2016 update of the IOI and discussed in details how changes in the statistical definition of some of the underlying component indicators affect the methodology and results. The IOI complements the R&D intensity indicator by focusing on innovation output. The 2016 edition offered a number of novelties. It expanded international coverage to 38 countries over a 4-year window, and implemented changes in statistical definitions, improved timeliness and updated scaling coefficients fitting the larger, updated dataset. Sensitivity analysis highlighted that the revision of the knowledge-intensive service export component has the largest impact on outcomes.
Upon request of the European Research Area Committee, we conducted a feasibility study to assess the robustness of a modified research excellence index aimed at benchmarking effective national research systems

Final results

JRC Technical Reports describing the research results of INNOVA MEASURE 2 offer new insights to better monitor and understand the micro-foundations of effective research and innovation systems.
Outcomes of the work allowed project researchers to engage academic and policy audiences at major global conferences, including the 16th International Schumpeter Society Conference on Evolutionary Economics (Montreal, CA), the Science, Technology and Innovation Indicators 2016 conference (Valencia, ES) and the OECD Blue Sky III Forum (Ghent, BE). The results of the project have fed into EU Commission Reports. Specifically, in the 2016 ERA Progress Report and the Science, Research and Innovation Performance of the EU 2016 Report.