1. *This presentation draws on ’Finnish Finnish Impact Framework and Indicators for Science, Technology, and Innovation’ held by
Tarmo Lemola in Budapest on April 27th, 2009 and Luoma et al. 2011. ’Better results, more value’. Tekes Review 288/2011
Public RDI systems
– Rationale, indicators and impact assement*
Christopher Palmberg
Chief advisor, Ph.D
Tekes Strategic Intelligence
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2. Structure of presentation
1. What are public RDI systems and how
are they legitimized?
2. What are RDI indicators, why are they
needed and which are the challenges?
3. Examples of impact assement models
and indicators – the case of Tekes
DM 02-2012 Copyright © Tekes

3. 1. What are public RDI systems and how
are they legitimized?
DM 02-2012 Copyright © Tekes

4. The Finnish public RDI system
PARLIAMENT
Research and GOVERNMENT
Innovation
Council Ministry of
Ministry of Other
Employment
Education and ministries
and the
Culture and their
Economy
institutes
Academy of Sitra
Tekes
Finland Finnvera plc
Finpro
Finnish
Universities VTT Industry
Investment Ltd
Regional
ELY Centres
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5. R&D investments in some countries
Percentage of GDP
5.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
Source: OECD, Main Science and Technology Indicators
DM 36109 and 36054 09-2011 Copyright © Tekes

6. Public sector’s share of total R&D funding
in 2009
%
Source: Eurostat
DM 36109 and 36054 11-2011 Copyright © Tekes

7. Tekes R&D funding by sectors – from technology
towards services and intangibles
Million euros
Construction is included in the industrial figures.
DM 906697 and 607668 01-2012 Copyright © Tekes

8. Why are public RDI policies needed –
how are they legitimized?
Traditional arguments
 Market failure
• Informationl assymetries, knowledge spill-overs, externalities, over-
exploitation of commons
New arguments…in response to societal challenges?
 Structural system failures
• Infrastructural , institutional, network, capabilities failures
 Transformational system failures
• Directionality, demand articulation, policy coordination, reflexivity
failures
Source: Weber & Rohracher,forthcoming in 2012. Copyright © Tekes

9. 2. What are RDI indicators, why are they
needed and which are the challenges?
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10. What is an Research, Development and
Innovation (RDI) indicator?
“Indicators are quantitative representations that might
reasonably be thought to provide summary
information bearing on the scope, quality, and
vitality of the science and engineering enterprise.
They are intended to contribute to an understanding of
the current environment and to inform the development
of future policies”
Modified from NSB/NSF Science and Engineering
Indicators
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11. Why are RDI indicators needed?
 Importance of science, technology and innovation for
social and economic progress – a stylized fact
 Continuous pressure to increase resources to RDI to
compete globally
 Pressure to ascertain effective use of public resources
such as taxes
 Need to legitimate risky RDI investmnents characterized
by uncertainty
 Need to understand dynamics of scientific and
technological progress
 Need to build an evidence-base for policy
© Advansis Oy 2006 08.06.12 Copyright © Tekes

12. Criteria for RDI indicators
2. Clear connection to research and innovation
3. Clear connection to the phenomenon and impact area it
represents
4. Clear policy connection
5. Transparency
6. Intuitive and easily understandable
7. Internationally comparable
8. Easy and regular updating, basis for regular statistics gathering
9. Statistically reliable
10. Good temporal, sectoral and geographical coverage
11. Clear message on the direction and distance to the target state
12. Based on solid theories or coherent frameworks
12 Copyright © Tekes

13. Basic framework for assessing impacts of RDI
 Traditional and well-studied role of RDI in creating preconditions
for economic growth and renewal - other objectives and impacts
known in less detail…
 Input-activity-output model most common framework
 The chain from research and innovation to socioeconomic
benefits is not linear but involves several feedback loops that
provide new inputs to the process at various stages
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14. Key challenges in RDI impact assessment
 Causality: the relationships between research and innovation inputs,
activities, outputs, and impacts are often unclear or nonlinear.
 Attribution: it is difficult or even impossible to separate the impact of
research and innovation from other inputs and activities – the additionality
problem
 Internationality: the impacts of research and innovation are international
by nature – activities and value chains are global, and both positive and
negative spillovers exist.
 Time scale: the impacts are realized both in the short and long-term.
 Breakdown of impacts to particular socio-economic target: how to define
e.g. impact on environment, public welfare or culture.
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15. Indicator sources – some examples
 U.S. National Science Board/National Science Foundation:
Science and Engineering Indicators
 Other national indicator publications, including statistical
agencies
 OECD: Main Science and Technology Indicators
• Indicator manuals: Frascati and Oslo manuals, Patent Statistics Manual etc.
 EU: European Innovation Scoreboard
 International competitiveness reports (WEF, IMD)
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16. Top 10 traditional RDI indicators
1. R&D expenditure as a percentage of GDP
2. Publications
3. Citations
4. Patents
5. New products and processes
6. International trade and trade balance in high-tech products
7. Young innovative companies
8. Mobility of researchers
9. Science and technology labor force
10. Growth in productivity
But we also need ’blue-sky indicators, e.g. based on www
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17. 3. How are RDI impacts being assessed –
the case of Tekes?
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18. *Developed jointly by Finnish Academy and Tekes in collaboration with external
experts Copyright © Tekes

19. Economy and economic renewal
 Observes the effects that research and innovation
activities have, or should have, on the development
and renewal of the economy and the opportunities
and challenges arising from this
 Perhaps the most common and the furthest
elaborated impact area of research and innovation
activities, which also provides a good basis for
international comparison
19 Copyright © Tekes

20. Hierarchy of phenomena related to economy
and economic renewal
National Productivity of High growth Foreign Direct
Impacts prosperity the economy enterprises
Job creation
Investments
Strengthening of intangible Position in global value
Outputs assets networks
Continuous improivement Collaboration, networks
Activities of competitiveness and knowledge flows
Capability to innovate
Human resources for General conditions and
Inputs Investments in R&D&I
R&D&I incentives for R&D&I
20 Copyright © Tekes

21. Indicators related to economy and economic
renewal
Phenomenom Indicators
National prosperity GDP per capita
Overall productivity of the economy Total Factor Productivity TFP
Productivity renewal indicator
Foreign Direct Investments Share of Foreign Direct Investments per GDP
Strengthening of intangible assets Share of new innovative products and services from business turnover.
Volume and share of intangible investments
Position in global value-networks Exports of knowledge-intensive sectors
Continuous improvement of competitiveness Development of turnover in knowledge intensive sectors (or alternatively in KI
jobs)
Collaboration, networks and knowledge flows Share of public and private organisations having collaborated in innovation
projects
Capability to innovate Development of patenting, registered trademarks and designs (EPO / USPTO /
TRIAD)
Investments in R&D&I Share of R&D&I expenditure in business turnover
Government direct & indirect support to business R&D
Foreign direct investments in Finnish R&D&I
Human resources for R&D&I Availability of highly educated workforce
General conditions and incentives for R&D&I GDP share of VC investments at different growth stages
…
21
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22. Environment
 Many of the causality chains from the inputs of research and
innovation to the impacts on the environment are at least partly
known based on the knowledge on natural sciences and
technologies
 Environmental issues often have a global character – impacts
are transnational
 Environmental issues are integrated to most of the activities in
business and public sectors
 Energy is a remarkable part of this impact area as it drives
economic activities and well-being in addition to its impact on
the state of environment, climate change, and use of natural
resources
 The operational environment is often playing a significant role in
increasing the interest to innovate and use innovations
22 Copyright © Tekes

23. Hierarchy of phenomena related to
environment
Sustainable
State of the Finnish
Impacts environment
Climate change Biodiversity consumption of natural
resources
New information and
Environmentally Consumers' attitudes
Outputs knowledge related to
positive innovations
Green business
and behavior
environment
Cooperation within environment related
R&D&I activities directed
Activities towards environment
value networks and strengthening of skill
flows
R&D&I investments in Operational environment
Inputs sectors vital to environment
Skills and human resources
supporting the aims
23 Copyright © Tekes

24. Indicators related to environment
Phenomenom Indicators
State of the Finnish environment Water systems ecological state
Climate change Green house gas emissions in Finland
Biodiversity Endangeredness of Finnish species
Sustainable consumption of natural Share of renewable energy in energy production
resources
New information and knowledge related Scientific environmental publications among the top 10% most cited publications
to environment worldwide as % of total scientific publications of the country
Use of environmental information in political decision making
Environmentally bening innovations International patents/forwarded references of patents in the environmental sector
Green business Revenue of companies in energy and environment sector
Private sector energy efficiency
Consumers' attitudes and behavior Household energy efficiency
R&D&I activities directed towards Companies with innovation operations in the energy and environmental sectors
environment (quality, challenges, extent) Amount of environmental R&D&I activities in research institutions
Cooperation within environment related Cooperation between private sector, universities and research centers in
value networks and strengthening of skill environment sector
flows
R&D&I investments on environment Private R&D&I expenditure on environment
Public R&D expenditure on environment
Venture capital directed towards environment
Skills and human resources No relevant indicator so far
Operational environment supporting No relevant indicator so far
environmentally benign actions
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25. Summing up
 The focus of public RDI systems is broadeding, Finland
being a good example of this
 RDI indicators remain important but RDI impact
assessment is increasingly challenging
 There is also a need for new types on real-time ’blue-
sky’ indicators
 Emerging and developing countries also need public RDI
systems
• What kind of systems?
• Where should they focus?
• How could their impacts be assessed?
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26. Thank you!
For further information:
christopher.palmberg@tekes.fi
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