“The aim of the State Innovation Strategy is to increase the number of innovative businesses and the intensity of their commitment to innovation”

09 March 2010

Arturo Azcorra acted as Director of IMDEA Networks from its inception until very recently, when he was appointed as Director General of Technology Transfer and Business Development within the Ministry of Science and Innovation.

He has been interviewed by Madrimasd about the national strategy for innovation. We reproduce here the full text of this interview published on March 10th.

1. The Ministry and its Directorate General in particular are faced with a big challenge.For one, there is an urgent need to change the economic model to gear it towards an economy based on knowledge and innovation, but the economic situation is not the most favourable to do so. What measures will your department adopt to encourage technology transfer within the framework of a change of model?

The current economic context attaches a special significance and responsibility to the activity of the Ministry of Science and Innovation and the Directorate General of Technology Transfer and Business Development in particular.

But firstly I would like to offer a brief diagnosis of the current situation as far as science and innovation are concerned in Spain. Spain is among the top western countries in terms of public investment in RD&I according to the 2009 edition of the OECD Science, Technology and Industry Scoreboard. This situation was inconceivable a few years ago and first and foremost it reflects the Spanish Government’s commitment to science and innovation.It is also a situation that will be maintained over forthcoming years and I invite you publicly to look at future editions of this report to confirm what I am saying. But equally significant are some other indicators that reflect the fact that Spain occupies ninth place in the field of scientific output, a position that is consistent with the size of our economy and with our efforts over recent years, while in the field of innovation we are still a long way from the position that we should occupy given our size and capabilities.

These figures show us that our country has a significant knowledge and talent capital in our research and technological development institutions; now we have to transform this knowledge into an asset so that it becomes a source of competitiveness for our companies and generates growth, culture, wellbeing and wealth.

To fill this gap, for the first time in history a Secretariat for Innovation has been created, the objectives of which are, on the one hand, to strengthen and consolidate scientific leadership and excellence, cementing in particular the international dimension of our science, and on the other hand to decisively drive the transferl of technology and knowledge to the production sector and promote entrepreneurial innovation.

To do so, we have prepared a State Innovation Strategy, the E2i, which constitutes a key element in laying the foundations for our long-term actions. The aim of this strategy backed by the Secretariat for Innovation is to increase the number of innovative businesses and the intensity of their commitment to innovation through actions that go far beyond budgetary efforts and even legislative support. It is based on five core areas of action that make up what has been called the ‘pentagon of innovation’. The first area is the modernisation, adaptation and creation of a financial environment conducive to entrepreneurial innovation. The second consists of backing innovative and socially-oriented markets through regulation and public purchasing actions. The third area is the internationalisation of innovatory activities.The fourth is the coordination of public policies by means of territorial integration with a particular emphasis on the production sector and SMEs. The fifth core area of the pentagon of innovation is people themselves, or in other words human capital and talent, around which the change in our production model must revolve. The development of the State Innovation Strategy at the Directorate General has materialised into the INNOVACCION Plan which was publicly presented on March 11. This plan involves a direct investment in RD&I of around 2.6 billion euros and it is structured into seven public tenders and four funded actions aimed at stimulating innovation, primarily through public-private collaboration.It constitutes an important plan of measures that will contribute to economic recovery and the consolidation of our economy as a sustainable one.

2. One of the important indicators is the technological balance, which is showing a deficit in Spain.What initiatives have you planned to encourage the internationalisation of our companies and to improve our position as producers of globally competitive technology?

The set of initiatives you are asking me about make up one of the core elements of the State Innovation Strategy that I have already mentioned, the one relating to internationalisation. Within this area, we propose that internationalisation must be widely present in RD&I projects, making international impact one of the criteria for the evaluation of innovation projects for the Ministry of Science and Innovation. Moreover, we must facilitate the cooperation of the business world, with the greatest possible freedom, with the various regions of the world, so that they are able incorporate international strategy into their developments.

To improve the results of the technological balance we will rely first and foremost on our

State Innovation Strategy. In addition we have the R&D Framework Programme, a substantial component that will become more and more important.Many of the projects that manifest themselves may be more closely related to R&D business activity, falling within the framework of the cooperation programme and the programme for SMEs.We must improve the return on European funding and establish a positive balance for research.

Another objective is to be able to offer the business sector agreements in regions of the world in which a Spanish company can cooperate with a company from these areas (Japan, China, India and the USA). This is why, through the CDTI (the Centre for Technological Industrial Development), which reports to the Secretariat for Innovation, a map of agreements has gradually been deployed so that now a Spanish company can finance a development, helped by the Ministry of Science and Innovation, and work in collaboration with another company from one of these countries, financed by its corresponding country under the principle of neutrality.

Finally, much like in the Markets area of the State Innovation Strategy, the financial backing of cooperation and development is considered a key factor.The Ministry of Science and Innovation has a lot to contribute by forming committees on the green economy, health, digital administration and scientific industry, with cooperative agreements for development in which our water and energy technologies, our capabilities in health and even construction can provide the Mediterranean, Africa and Latin America not just with money but also with development. And Spain, with this public market, will strengthen its own production sector and employment.

3. What role to SMEs play in your department’s innovation policy?

The business world, which in Spain is primarily made up of SMEs, is one of the main players in the Science-Technology-Business system.As such, many of the measures set in motion by the Ministry of Science and Innovation are aimed at businesses as part of the Government’s action plan in response to the complex situation that companies are going through. These measures include making the existing financing instruments more flexible, reducing the demands on small businesses in terms of bank or financial guarantees while complementing every grant with tranches of direct subsidy, and widespread advance payments of 25 % of the approved budget for every grant provided by the CDTI, up to a limit of 300,000 euros.

In addition, as part of the INNOVACCION Plan, this year the Directorate General will publish a call to appoint technologists in SMEs and a call for public-private collaborative projects to finance technological improvement and innovation activities in SMEs.

We also support SMEs through the ‘Motivated Reports’, which allow companies to deduct RD&I costs. The Motivated Reports processed in the Directorate General have grown spectacularly from the 94 that were issued in 2004 to 1,152 issued in 2009. The volume of derived deductions reached the substantial figure of 214 million euros in 2008.41 % of these reports have been requested in the last year by SMEs, which demonstrates their growing innovatory vigour and our commitment to supporting their activity.

Furthermore, in the Draft Law on Sustainable Economy, SMEs have a special significance. Two of the principles of this Law, improvement of competitiveness and development of innovatory capability, aim to increase the competitiveness of businesses and improve their ability to position themselves in international markets. This draft law include specific measures which, through regulatory improvements, aim to encourage public contracting of innovatory activities from SMEs, streamlining business setup procedures, improving tax incentives for innovation to join the already favourable taxation system for RD&I in our country, and the reduction of costs for the protection of industrial property rights.Equally, this law includes a specific chapter on measures to support the internationalisation of Spanish companies.

In short, the actions of the Ministry and the Directorate General take into account the importance of SMEs and of innovatory SMEs, particularly in the change in economic model which constitutes a common objective for all of our policies and strategies and, with this in mind, we will take the necessary steps to promote change.

4. The lack of collaboration between University and Business in Spain is a recurring theme.Despite the fact that a large number of measures have been implemented over the last twenty years, the results are unsatisfactory. Will you continue with the initiatives that are underway or will you adopt new actions to bring the academic and industrial worlds closer together?

Although it is true that there is still much to do, I believe we have in fact made and continue to make important steps that demonstrate sustained improvement in recent years.

As I said at the beginning, the first step we have taken is to create a Secretariat for Innovation in which there is an integrationist approach to science and innovation and the aim is to accelerate public-private collaboration. In this sense we are working intensely on the one hand to strengthen and consolidate scientific leadership and excellence, in particular by reinforcing the international dimension of our science, and on the other hand decidedly driving the transfer of technology and knowledge to the production sector and promoting entrepreneurial innovation.

The Directorate General for Technology Transfer of Business Development plays a key role as a complement to the actions of the State Research Secretariat, which is geared more towards the field of basic research in public settings, and those of the CDTI, primarily aimed at innovation in the business world. In this regard we are developing actions that aim to increase the technological and innovatory capabilities of companies through their collaboration with public and private research centres. The improvement in technological and innovatory capabilities in business is also down to the support and strengthening of the structures that act as intermediaries between the public-sector research centres and companies, which include technological centres, research results transfer offices, technological platforms and, in particular, the science and technology parks. These structures facilitate knowledge and experience sharing between the various sectors of the Science-Technology-Business system.

We are certain that the success of the RD&I policies and innovation development require a reconciliation of the public research world and the business world and a greater commitment to increasing private investment in science and innovation. The business world and the public research world must both take a step towards each other in order to achieve productive collaboration. To facilitate this reconciliation we want to become an interlocutor from which the business sector can propose the innovation development policies and move closer to the public RD&I system in the broadest sense of the word.

5. Could you provide an assessment of the policy of incentives for science and technology parks and the calls for proposals that have been made?

The Ministry of Science and Innovation recognises the important role that the Science and TechnologyParks play as essential elements in the modernisation of the economy and as an important factor in coming out of the current financial crisis, due to the desirable interaction between its components, the public RD&I institutions and the production sector. They are also real generators of employment and knowledge, and therefore essential to the change in the production model.

The parks act as a regional development factor in the area in which they are established. They attract businesses, create high value-added jobs, act as a professional outlet for a large number of personnel in RD&I and offer intensive technology services to companies in the surrounding area.They also play a pivotal role in the transfer of knowledge to the industrial sector and they are a permanent source of new technology-based enterprises, including spin-offs and spin-outs. Consequently they are one of the most important agents of change for the production model in Spain.

Since 2004 the parks have received the firm support of the Spanish Government through significant public grants. To give you an idea, from 2000 to 2009 the funding allocated by the Spanish Government for grants for Science and Technology Parks, for the implementation of collaborative R&D projects and in support of the creation of infrastructure stood at a total of 1.639 billion euros, of which 1.335 billion were allocated during the second half of the period (2005 to 2009).

As a final observation, I would like to add that the Ministry believes that Science and TechnologyParks play and will continue to play an essential role in driving and developing the State Innovation Strategy, the dissemination of innovation throughout the production sector.

6. In this change in the production model, fostering the creation of knowledge-based businesses and integrating entrepreneurs capable of incorporating new technology into the industrial sector must be a priority. What are the Ministry’s lines of action to encourage the creation of technology-based companies?

Encouraging the creation of innovatory businesses is one of the objectives of the State Innovation Strategy. To be specific, we have set ourselves the objectives of mobilising in the order of an additional 6 billion euros per year in private innovatory activity (1.9 % of GDP) and doubling the number of companies that innovate, incorporating 40,000 new enterprises by 2015.

The actions planned to achieve these objectives are distributed between the five core areas that make up the strategy and in particular in the financial area. We cannot deny that the lack of access to private financing for innovation is one of the deficits that is endemic to our system.To rectify this, a stable framework that favours innovation must be created – a framework that takes into account various dimensions. In this regard, four lines of action have been proposed.First, the promotion of bank financing of innovatory projects, with support from the public sector.Risk capital is the second aspect.In Spain the Risk Capital dimension is very small compared to other countries. This area must be developed and public risk capital must be injected into the market; in the future it must be an instrument as powerful as subsidies and loans.To this end, we are assessing formulas so that risk capital makes a giant leap in relation to the GDP, much like R&D is doing, or in other words we are talking about adding another zero the current figures.

The Ministry has created the Neotec Risk Capital Fund, managed by the CDTI, and we want to multiply its potential by three. Likewise, the aim is to organise sectors according to the big initiatives or markets related to new technologies, such as energy, ICTs, the environment, health and biotechnology, which will allow some of Spain’s major investors not just to put money into these small initiatives but also to offer guidance and market penetration. The aim is also to provide entrepreneurs who decide to operate in this landscape with a cushion and a much bigger circuit backing their businesses. The third point is investment funds specialising in RD&I that look to obtain private investment in research as an activity which has a high profit/risk ration, or in other words a high rate of return can be achieved because high risks are being borne.In this area we have already launched an initiative, the Innocash programme, and in the INNOVACCION Plan we expect to launch an important public-private risk capital fund.The fourth area is the alternative stock market.Financing of business through the MAB, a market devoted to medium capitalisation companies looking to expand with tailor-made regulations, designed specifically for them and with costs and processes to suit their specifications.

In the field of public financing, the Ministry’s programmes will continue in order to fund the creation of technology-based companies, as well as develop innovatory projects such as the NEOTEC scheme, the aim of which is to support the creation and consolidation of new technology-based companies in Spain. In fact, in 2009 75 grants of this kind were approved.

7. What are the plans of the Directorate General of Technology Transfer and Business Development during the Spanish Presidency of the EU?

The Directorate General of Technology Transfer and Business Development, alongside the rest of the Directorates that make up this Ministry, have some hard work ahead of them in order to ensure that the Ministry’s priorities for this semester can become a reality.

In this regard, I would like to underline the development of the State Innovation Strategy that I have already mentioned, the aim of which is to provide a decided boost to entrepreneurial innovation to position Spain among the ten most innovative economies in the world by 2015.This strategy takes into account the unique features of the Spanish production sector, while aligning national policy in the field with supranational administrative policies, primarily of the European Union. The strategy is, in short, a long-term political commitment that must be shared by all of the agents involved:economic and social agents and the state, regional and local public authorities.

Along these same lines, the development of the European Research and Innovation Plan is another action of this Directorate General. It consists of a plan in which Spain continues to work as a continuation of the work carried out during the Swedish Presidency.Spain’s proposal is for the European Innovation Plan to also incorporate the five core areas that make up the State Innovation Plan, and our objective is to make progress in the development of the document during our presidency, so that it can be completed by the next presidency in office.

8. What does the European Innovation Plan consist of?

In December 2008 the European Council instigated a European plan in favour of innovation, related to the development of the European Research Area and reflecting on the future of the Lisbon Strategy for after 2010. In its current version, the plan goes by the name of the European Research and Innovation Plan.

During its Presidency of the European Union, Spain will continue the task of preparing and defining the European Research and Innovation Plan, which was already a topic of debate and focal point for work during the Swedish Presidency, completing this work with specific initiatives that will leave a Spanish legacy. These initiatives have been inspired by our own experience, because we cannot forget that Spain, in just a few years, has walked a model path in the field of science and innovation.

We believe there are opportunities to connect research and innovation more closely in Europe.We want to export to Europe the integrated science and innovation approach which our own ministerial design responds to.

In 2009 Spain stated, at it will continue to do so during its Presidency, that the European Research and Innovation Plan should include the five core lines of action comprised in the State Innovation Strategy. The plan will receive a decisive boost during the Spanish presidency so that it can be completed and presented in the following European presidency.

9. The Spanish Presidency plans to strengthen the European Institute of Innovation and Technology with the launch of the first Knowledge and Innovation Communities and by making progress in defining its strategic innovation agenda.What do these communities consist of?

The European Institute of Innovation and Technology (EIT) was created to encourage and provide state-of-the-art innovation worldwide by uniting higher education, research and business around a common goal. Its actions include the creation of Knowledge and Innovation Communities (KIC) to tackle important social challenges such as mitigating climate change and adapting to it, sustainable energy, and the information society and future information.

The KICs are coordinated through consortiums with representatives from each side of the knowledge triangle, integrating synergies from the university, research and innovation worlds. Furthermore, they are the primary operational tool of the EIT and are made up of companies, universities and research and technology centres.

On December 17, 2009, the EIT announced the projects selected as Knowledge and Innovation Communities, the InnoEnergy on sustainable energy, Climate KIC on climate change and the EIT ICT Labs on the information and communication society. These KICs are structured into several nodes involving the various agents of the system and with differentiated geographical locations.

Spain participates in two of these KICs.It has a very significant stake in InnoEnergy, which has one of its offices in Barcelona.The Barcelona candidature was led by the Polytechnic University of Catalonia (UPC) and the ESADE business school. The project has together 35 members from universities, companies and research centres and will involve an initial investment of 450 million euros over the next four years. The aim of this project is to train over 1,500 students in international programmes, to create over 60 new patents, to launch over 50 start-up companies and to place on the market 90 new products by 2017.The InnoEnergy KIC, in addition to the Barcelona group, will involve centres in Germany (Karlsruhe), France (Grenoble), Belgium (Leuven), Hollan (Eindhoven), Poland (Krakow) and Sweden (Stockholm).

Equally, the Region of Valencia is taking part in the consortium for the project selected for the KIC on climate change mitigation and adaptation (Climate KIC), which has a budget of 764.5 million euros for the next four years, of which the EIT contribute 120 million.The aim of this consortium is to reduce CO2 emissions in the production sectors.This KIC is based in London (UK), Potsdam (Germany), Utrecht (Holland) and Zurich (Switzerland).The Regional Innovation and Implementation Community (RIC) consists of Hungary, Italy, Germany, Poland, the UK and Spain, with the region of Valencia.

10. In 2010 the Lisbon Strategy comes to an end and the EU faces the challenge of defining the 2010 Strategy. What will Spain contribute to this new strategy?

Indeed, in 2010 an important cycle within the European Union comes to a close.It was a cycle that was initiated in the European Council held in 2000 with the launch of Lisbon Strategy:a commitment by the Member States to make Europe, by 2010 the most dynamic and competitive knowledge-based economy in the world, while respecting social coherence and the environment.

With everything that has been learned over recent years and with important challenges still on the horizon we are entering a new era that will be defined by the EU-2020 Strategy, which emerges within the context of a global economic and financial crisis that has caused the deepest international political reflection of recent decades. In this context, Europe has the obligation to establish a new road map with an unwavering objectives, already formulated in Lisbon:the definitive development of society and the knowledge economy. The challenge is so serious that President Barroso himself, in his Guidelines for the next Commission, underlined the need for Europe to make a commitment to ‘radical transformation towards a knowledge-based society”.

In direct relation to the duties of the Ministry of Science and Innovation, I would like to point out as one Spain’s contributions to the EU-2020 strategy, which will become more evident during the months of the Spanish Presidency, the support and championing of an integration between the debate on the future Research and Innovation Plan and the advances that we are achieving in the construction of a European Research Area: both must play a pivotal role in the new EU-2020 Strategy, which equates to saying that science and innovation are elements that are inseparable from the European project.

We can no longer see science and innovation as sector-specific policies, as activities that are only incumbent on scientists and businesspeople. The current crisis and the future prospects of the European Union highlight more than ever the need to make science and innovation springboards for sustainable development.

11. During the Spanish Presidency, a number of strategic gatherings will be held:the CONCORD-2010 Conference: Policies to encourage investment in R&D; the Regions Week (WIRE); the ECRI Conference on Infrastructures and the Science against Poverty Conference.What proposals will the Ministry put forward in these gatherings?

Indeed, the gatherings you mention are some of the events organised by the Ministry of Science and Innovation on the occasion of the Spanish Presidency.

We hope to improve some very specific aspects in the European Union: first-class basic research, the mobility and careers of researchers, the administration and deployment of the European map of scientific infrastructures, the link between research and innovation policies and the opportunities of excluded entities so that R&D can provide a response to their needs. These and other objectives are grouped into three basic priorities in our Presidency:integration, involvement and inclusion. Integration to make the European Research Area function as a single space and with institutional weight in the European project. Involvement so that the European science and innovation programmes become more decidedly involved in the response to the daily concerns of the public and in particular in economic recovery and growth. And finally Inclusion, striving for a committed science with more social awareness.

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