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TARGET: Targeted R&D Policy

Alessandro Rosiello

Affiliated staff:   Michele Mastroeni

Funding: EU Framework 7

July 1 2009 – June 30 2011

  • Ever-enhancing complexity of economic systems, at both local and global scales;
  • The emergence of new technological areas resulting in enhanced turbulence, dynamism and radical uncertainty
  • The rise of new, important players in Asia including: China, India and others

These changes expose business sectors to major threats on the one hand, while introducing them to various new opportunities on the other hand. Policy makers face significant challenges in such terms and are required to target subsequent opportunities by enabling or promoting the business sector to take advantage of them. Existing horizontal R&D policies focused on promoting R&D activity in individual firms are often lacking in this respect. Current and future scenarios require not only the design of new policies but also the adoption of a whole new type of policy process, namely 'Targeted R&D' (Teubal, 2008).

While market failure justifies the use of horizontal R&D policies, both system failures and system imperfections require Targeted R&D policies in order to be solved. The central idea behind targeting is to leverage existing high quality market forces for the purpose of accomplishing the country's strategic priorities.

Subsidiary objectives

  • Analyzing the pre-conditions for the successful implementation of targeted R&D policies and the generation/pre-selection of options for targeting. These include a number of factors, both external to the economy, e.g. relevant, potential new markets in the global economy; and internal, e.g. past experience in implementing horizontal/targeted R&D schemes, learning capabilities (monitoring and evaluation procedures, for instance), complexity of the innovation system, etc.
  • Defining selection criteria and the decision making process regarding what to target.
  • Analyzing best practices of countries with proven track records in implementing successful R&D policies.
  • Formulating specific policy targeting programs.
  • Generating a concrete framework for policy targeting involving three dimensions: (1) Formulating specific support schemes,(2) analyzing the policy institutions involved in the targeting process and (3) identifying concrete coordination mechanisms.

Background

Radical changes in the global environment manifested during the post 2000 period have emphasized countries' need to re-define their proper mix of R&D policies (Avimelech and Teubal 2008). These changes include:

Aims and objectives

  • Identifying the policy capabilities required in order to formulate successful targeted R&D policies. This will enable the development of more effective national and regional policies.
  • Analyzing the appropriate level of policy mix especially in regard to the level of Targeted versus Horizontal R&D policies.
  • Identifying coordination mechanisms between the different mix of policies within a targeted policy (e.g. R&D incentives, promotion of entrepreneurial activity and, product regulation) in order to leverage private R&D.
  • Developing a 'toolkit' describing the processes and work procedures of formulating and implementing targeted policies successfully.

Research methods

1. Preparation for Benchmark Studies: desk research
Desk research to determine what contributes to the success of targeted R&D policies in the benchmark countries will be conducted and analyzed. This analysis will include an examination of technological and research infrastructure including knowledge institutes (public and private), policy structuring and initiatives relevant to the life science/biomed sector. The analysis will fine-tune the initial set of indicators for successful targeted R&D policies and include a review of the current situation.

2. Preparation for Benchmark Studies: field research
Open-discussion interviews will be conducted with agents of the various organizations in the system. The output of this work package is a set of benchmarks that will be studied in the participating counties and regions in the next work package.

3. Finalizing benchmark study and methodology
This task will provide the guidelines for the data formats and benchmark study designs. It includes questionnaires and guidelines for research. The output will be a standardized methodological format for partners conducting research.

4. Benchmark study in participating countries and regions.

First version toolkit
The information gathered through the benchmarking study, with the knowledge obtained in the analysis of selected countries, will be used to formulate a toolkit for implementing successful targeted R&D policies.

Final toolkit
The first draft of the toolkit draft will be sent to the public partners. Partners will send their comments to be embedded into the next version of the toolkit.

Wider implications for policy

An important outcome of the TARGET project has been a toolkit, enabling a country or region to develop and to implement targeted policies successfully as well as to take concrete policy making decisions.

The toolkit contains a structured and valorized set of guidelines & recommendations for diversifying the country's policy mix, taking into account the unique characters of its innovation/R&D system and geopolitical reality.

This approach follows the direction that was laid down by the third OMC cycle and aims at assisting countries to ‘focus their efforts when devising policies to improve overall R&D and innovation system performance’.

Publications

Final TARGET Toolkit: TARGET Policy Report

Rosiello, A., Avnimelech, G. and Teubal, M. (2011) 'Towards a systemic and evolutionary framework for venture capital policy', Journal of Evolutionary Economics, Volume 21, Number 1, pp.167-189

Non-academic

Mastroeni, M (2010) ‘R&D by Design’, Holyrood Magazine, Jan. 18, 2010