The 'Innovation Radar': A New Policy Tool to Support Innovation Management
37 Pages Posted: 3 Apr 2017 Last revised: 18 Sep 2017
Date Written: August 5, 2017
Introduction: In this paper we describe a new policy tool to support innovation management and increase the innovation impact of research and innovation programs. With nearly 80 billion Euro over a period of 7 years (2014-2020), Horizon 2020 is the largest ever publicly funded research and innovation program in the European Union. Cutting-edge technologies are being developed within the program and a significant part of these technologies could be commercialized. But not all technologies and innovation with commercial potential actually reach the market. The questions are why, and what additional actions are needed on the part of the policy makers to address this problem? To this effect the European Commission developed and successfully tested an "Innovation Radar" in the part of the program that focuses on Information and Communication Technologies (ICT) and their applications. The Innovation Radar focuses on the identification of high-potential innovations and the key organizations developing these innovations in the program. Our paper presents the Innovation Radar (IR) methodology which was developed by our team jointly with the team from European Commission's Directorate General for Communications Networks, Content & Technology that manages the ICT part of Horizon 2020. The paper then presents the results of its pilot application.
Approach and Data: The IR methodology is based on assessment of innovation and new technology ventures. The IR uses two composite indicators aiming at capturing the heterogeneity in innovation activities and innovators across projects. First, the "Innovation Potential Indicator" provides a holistic view of the innovation potential of projects. Second, the "Innovator Capacity Indicator" is capturing the innovator's capacity in conducting innovation activities. Each of these two indicators includes several sub-indicators. The IR characterizes innovations with respect to their technical readiness, innovation management and market potential. For innovators - usually researchers - it delivers information on their ability to innovate and their environment. We applied the OECD/JRC methodology to construct composite indicators.
The data used in the paper was collected via a structured questionnaire during the IR pilot phase from May 2014 to January 2015 on the occasion of annual projects reviews conducted by external experts (projects typically run for 3 years).
Results overview: Out of the 2600 projects running at the time, the IR scanned 280 projects. Over 500 innovations with market potential were identified, or on average nearly two new or substantially improved products or services within each project. The IR pilot phase provided in particular evidence that while innovators demonstrate high levels of technological expertise, they usually pay less attention to the business-related dimensions. The most common needs expressed by innovators are partnerships with other companies, business plan development and expanding to more markets. They less frequently mention needs for incubation, investment training, or participation in accelerators. More than 40% of the innovators mention lack of financing as a major external bottleneck to innovation exploitation, although interestingly only 5% have sought or are planning to seek private or public funding. Regulation and IPR issues are also considered important bottlenecks.
Impact of the IR covers 3 main dimensions:
1. Providing structured and quantified intelligence on innovations and innovators in publicly funded projects and use this intelligence to design customized support to those projects and organizations.
2. Creating bridges between innovative organizations/projects and external stakeholders such as venture capitalists.
3. Providing feedback on the effectiveness of the program in funding innovation, thereby enabling the policy makers to improve its impact.
Having completed the IR pilot phase and analyzed the collected information, it can be concluded that, for the first time, policy makers and project participants can obtain up-to-date structured information on the innovative output of the projects, and that the IR demonstrated its real potential as a policy tool to support innovation management.
Keywords: R&D, Innovation, Innovation Policy, Public funding of Research and Innovation, Impact assessment, Information and Communication technologies, Composite Indicators
JEL Classification: O3, O52, L63, L86, L96
Suggested Citation: Suggested Citation