STEPS Center

1. STEPS Center Mapping innovations in East Europe and Central AsiaOlha KrasovskaSTEPS Centre, Ukrainee-mail olga_krasovska@mail.ru

2. Levelsof mapping Global–by comparison of the country blocks, e.g. East Europe and Central Asia, America and Europe, EU and CIS and so on. Low reliability of the results because of countries specific, existing gap in socio-economic development of the countries, possible statistical gap are the main problems of global mapping. And of course it is difficult to define set of characteristics by which we make such blocks of countries because it is evident that only geographical component is not enough International–by comparison of definite countries. International mapping is more correct in terms of indicators of countries specific. Often countries-neighbors in regional aspect are also close in terms of socio-economic level and mentality Regional –by comparison of the regions inside one definite country. Regional mapping is allocating regions inside one definite country

3. Classification of regionsby Slavo Radosevich Capital towns and regional centres with a diversified economic structure and developed infrastructure. Regions with a more diversified economic structure where lower industry share meant that they started with less structural problems. Monostructural regions where a single sector heritage (defence; agriculture; heavy industry) makes restructuring based entirely on endogenous resources very difficult and in some cases almost impossible Regions defined by these principles in most cases are innovative regions Source:Slavo Radosevic (2002), Regional Innovation Systems in Central and Eastern Europe: Determinants, Organizers and Alignments, Journal of Technology Transfer, Volume 27, Number 1, p. 87–96

4. Countries of East Europe and Central Asia East Europe Bulgaria, Czech Republic, Hungary, Malta, Poland, Romania, Slovakia, Belarus, Moldova, Ukraine, Russia (partially) Central Asia Uzbekistan, Turkmenistan, Tajikistan, Kyrgyzstan, Kazakhstan So, when we talking about Countries of East Europe and Central Asia we have 2 blocks of countries: from the one hand these countries can be defined as East Europe and Central Asia but from the another hand these countries can be defined as EU and CIS The East European and Central Asian countries are two big blocks of countries that have significant potential, both in terms of their strong academic community and worldwide leading S&T institutes in a variety of scientific disciplines.

5. STEPS Center Existing statistical gap isthe main problem • There is no indicators could be used for every countries • Sources of information • European Innovation Scoreboard • National innovation statistic of CIS • Regional Innovation Scoreboard • Global Competitiveness Index 2010-2011by the World Economic Forum

6. STEPS Center Blocks of the countries based on a statistical cluster analysis of Summary Innovation Index (SII) • Innovation leaders (Denmark, Finland, Germany, Sweden, Switzerland and the UK) with innovation performance well above that of the EU27 and all other countries • Innovation followers (Austria, Belgium, France, Ireland, Luxembourg and the Netherlands) with innovation performance below those of the innovation leaders but above that of the EU27 • Moderate innovators (Cyprus, Czech Republic, Estonia, Greece, Iceland, Italy, Norway, Portugal, Slovenia and Spain) with innovation performance below the EU27 where the first 4 countries show a better performance than the last 6 countries. • Catching-up countries (Bulgaria, Croatia, Hungary, Latvia, Lithuania, Malta, Poland, Romania,Slovakia and Turkey). Although their innovation performance is well below the EU average, this performance is increasing towards the EU average over time with the exception of Croatia and Lithuania

7. The development in innovation performance has been calculated for each country and for the EU27 as a block using data over a five-year period. This calculation is based on absolute changes in the indicators, as opposed to previous European Innovation Scoreboard reports where trends were calculated relative to the EU average. All East European countries have innovation performance well below the EU27 average but the rate of improvement above that of the EU27. In spite of declining of some indicators all countries demonstrated positive annual growth rate Romania and Bulgaria have experienced the fastest growth in performance, albeitfrom a low starting point. These countries are the growth leaders also showing the overall fastest rate of improvement in innovation performance.In Bulgaria the rate of improvement is one of the highest of all countries and it is a growth leader within the Catching-up countries, while in Romania the rate of improvement is one of the highest of all countries. Source: European innovation scoreboard 2008: comparative analysis of innovation performance, www.proinno-europe.eu/EIS2008/website/docs/EIS_2008_Final_report.pdf

8. Relative strengths and weaknesses As we can see for all countries Economic effects is strengths while Linkages & entrepreneurship and Throughputs areweaknesses. I’d like to stress that strengthening of relationships between science and industry is one of the way of getting additional competitive benefits for the country and weaknesses of Linkages & entrepreneurship for selected countries is one of the reasons of poor competitive countriesSource: developed by the author on the base of European innovation scoreboard 2008: comparative analysis of innovation performance, www.proinno-europe.eu/EIS2008/website/docs/EIS_2008_Final_report.pdf

9. Unfortunately there is no analogue of European Innovation Scoreboard for non EU and Asian countries. So to get comparable picture we had to use additional sources of information There are number of research projects devoted to the creation of innovation trend charts (e.g. Benchmarking Russia and Ukraine with respect to the Innovation Trend Chart (BRUIT), and Researching Innovation Policy in Kazakhstan and Armenia (RIPKA project), coordinated by Giles Brandon. But unfortunately these projects were not continued and the latest data available on innovation trend charts for mentioned countries were dated on 2006 We tried to combine some basic indicators of EIS with the data of UNESCO Institute for Statistics and national innovation statistic of CIS to get comparable data series We have chosen such indicators as • Public R&D expenditures • Business R&D expenditures • Gross expenditure on R&D • Ratio between public and business expenditures • EPO patents • Ratio between basic, applied researches and experimental development Sources: http://www.proinno-europe.eu/page/european-innovation-scoreboard-2009 http://stats.uis.unesco.org/unesco http://cordis.europa.eu/erawatch/index.cfm http://www.epo.org/about-us/office/annual-reports.html

10. Public R&D expenditures, 2008, % of GDP

11. Business R&D expenditures, 2008, % of GDP

12. Gross expenditure on R&D, 2008, % of GDP

13. Share of public, business and financing from international funds, %

14. EPO patents EU countries – number of EPO patents per million population Ukraine, Russia, Kazakhstan, Belarus – total number of EPO patents Total number of EPO patents in CIS

15. Unfortunately data not for all countries are available. In Ukraine, Belarus and Tajikistan only 2007 data are available. For public and business R&D expenditure (BERD and GBAORD) data for Tajikistan, Kyrgyzstan and Moldova are also missed • As we can see all countries we analyzed have lower than average EU level of R&D financing indicators (pink line on the slide is average level of EU-27). Situation in public R&D expenditure is better than in business financing – Russian Federation has the level of public expenditure GBAORD equal to the EU-27 average level. Czech Republic also has the strong position in this indicator. In spite of the highest level of public financing level of business financing in Russia is significantly lower than in EU that causes not high level of GERD. In terms of GERD we can see that all countries are far from the Lisbon target (3%). When we compare European and Asian countries we can conclude that European countries have stronger positions than Asian in terms of GERD • As for the ratio of business and public R&D expenditure we can see that 2 European (Czech Republic and Malta) and one Asian (Kazakhstan) countries are close to the EU ratio. Growth of the business expenditure is necessity condition for making national science more competitive and will be the evidence of intensification of science-industry relationships • There is a great gap in terms of the EPO patents between EU members and non EU. If in EU members the number of patent is calculated per million population, in non EU countries we have common number of patents. So, when in Malta we have 33,8 patents per million population in the same time there is only 43 patents for whole Russia. In spite of the fact Russia and Ukraine demonstrate positive trend in the EPO patents their number is extremely low in comparison with EU countries.

16. STEPS Center Share of basic, applied researches and experimental development, 2007

17. Share of basic, applied research and experimental development demonstrates closeness of national scientific results to the implementation. Than higher is level of applied and experimental research than links between science and industry are closer • According to the share of basic research we can divide our countries into 3 groups – countries with low (under 20%), medium (from 21 to 40%) and high (more than 41%) level of basic research • Slovakia and Malta belong to the high level group; the share of basic research in these countries is extremely high. This doesn’t influence on the share of applied researches but influence on the share of experimental research - accordingly share of experimental research in Malta is the lowest among selected countries of Europe and Asia • As we can see from the slide almost all NIS countries (except Moldova) have high share of experimental research. As example we also included in our sample 2 old EU members (Denmark and France) and we can see that these countries had similar share of basic research from 15 to 25% and accordingly share of experimental research 35-55%. A lot of countries have the same share of basic research but share of applied research are differed to a great extend • There is no single optimal balance between basic, applied and experimental researches. As the example of efficient balance we can take USA where in 2008 the ratio was 17:22: about 60% • As we can see Russia, Belarus and Kazakhstan are close to the USA level of basic researches, but Kazakhstan has bigger share of applied researches. Bulgaria and Slovakia have too low level of experimental research share. Elimination of existing disproportion between these 3 types of research is one of the ways to intensify the R&D efficiency and to expend the science-industry relationships

18. STEPS Center Groups of indicators • - Enablers (Tertiary education, Life-long learning, Public R&D, Broadband); • - Firm activities (Business R&D, Non-R&D expenditures, SMEs innovating in-house, Innovative SMEs cooperating with others, EPO patents); • - Outputs (Technological innovators, Non-technological innovators, Resource efficiency innovators, Employment in medium-high & high-tech manufacturing, Employment in knowledge-intensive services, Sales of new-to market and new-to-firm products) Source: http://www.proinno-europe.eu/page/regional-innovation-scoreboard Regional innovation scoreboard

19. Regional innovation scoreboard is based on the NUTS - The Nomenclature of Territorial Units for Statistics or Nomenclature of Units for Territorial Statistics which is a geocodestandard for referencing the subdivisions of countries for statistical purposes. The standard is developed and regulated by the European Union, and thus only covers the member states of the EU in detail • At present, innovation at the regional level is captures in the Regional Innovation Scoreboard (RIS) which attempts to use the same methodology as the EIS (European innovation survey), but with significantly reduced data availability. The RIS is seriously hampered by the non-availability of regional CIS data and regional data for many of the other indicators. Data are not available because they are not collected by the national statistical offices (NSO) or they are considered to be unreliable due to sampling methods. Another problem arises from the location of the headquarters of a company and where the regional activities of a company are reported, at the respective region or at the headquarters’ region? • In the RIS regions are ranked into groups from high to low innovation performance for overall performance (for all regions using imputed values where data is not available) and for profiles and relative strengths for the different dimensions of innovation performance (only for regions with available data). • The most innovative regions are typically in the most innovative countries.

20. Nearly all the "high innovators" regions are in the group of "Innovation Leaders" identified in the European Innovation Scoreboard (EIS). Similarly all of the "low innovators” regions are located in countries that have below average performance in the European Innovation Scoreboard EIS. However, the results also show regions that outperform their country level: • Praha in the Czech Republic has all medium-high innovating regions from moderate innovators and catching up countries. • The capital regions in Hungary and Slovakia show an innovation level at the EU average but are located in catching up countries whose overall innovation performance is well below average • When we make analysis by regional innovation performance we can see that high or low performance depends not on the region but on the type of indicators. So almost all countries have medium-high or even high innovation performance in output indicators as in 2004 also in 2006.

21. R&D priorities is important indicator of country specialization and could be used for searching cross points between different countries R&D priorities in East Europe (EU) Bulgaria has a strong tradition in mathematics, astronomy, physics, nuclear technology and sciences-oriented education, and has significant experience in medical and pharmaceutical research Czech Republic pay more attention to industrial development; biosciences; medical sciences, physics and mathematics, earth sciences, chemistry and SSH Hungarian strong science areas are: IT, biotechnology, agro-economy, chemistry, pharmacy Malta priority areas are ICT, energy-environment, health-biotech (biomedical sciences, e.g. medical plants) and high value-added manufacturing Poland has good position in physics, space science, engineering, computer science, clinical medicine. Also Polish research is relatively active in chemistry, mathematics, plant & animal sciences, materials science and ecology/environmental Romania, The fields of research rank by financing is follow: engineering and technology, natural sciences and agricultural sciences

22. R&D priorities in East Europe (CIS) Slovakia, The main research areas in which Slovakia has considerable potential, are: research in the field of polymers, nanotechnology, molecular biology and molecular study of particle physics, nuclear physics Belarus has next S&T priorities: Resource and energy-efficient technologies of production of competitive products; new materials and new energy sources; medicine and pharmacy; information and telecommunications technologies; production technology, processing and storing agricultural products; industrial biotechnology; ecology and environmental management. Moldova, Strategic directions in research and innovation include: usage of human, natural and information resources for sustainable development of economy; biomedicine, pharmaceuticals, maintaining and promoting health; agricultural biotechnology, soil fertility and food security; nanotechnology, industrial engineering, new products and materials; improving the efficiency of the energy sector and energy security, including through the use of renewable  resources Ukraine has a strong position in material sciences, microelectronics, biology and medical sciences (e.g. testing system), computer sciences, space sciences Russia has still strong positions in physics, space science, earth science, chemistry, mathematics, materials science, biological sciences, microbiology, genetics

23. R&D priorities in Central Asia Kazakhstan has good potential in following S&T areas: chemistry; machinery; agriculture; metallurgy and mining; biotechnology, food industry and transport Kyrgyzstan: water and renewable energy; new technologies and materials; information and telecommunications technology; problems of mountainous areas and development of mineral resources; biotechnology in medicine and agriculture; conceptual problems of social sciences of modern Kyrgyzstan; development of technology for the use of organic and natural resources; creation of new materials based on high technology; scientific basis of conservation, restoration and sustainable use of flora and fauna in Kyrgyzstan; development of animal agriculture; comprehensive assessment of the risks of life and molecular-genetic basis of human diseases in high mountains Tajikistan: Formation and implementation of socio-economic policies in a country's sovereignty and economy; agro-industrial complex; fuel and energy complex; mineral resources industrial complex; health and environment; information technology and management

24. Turkmenistan, S&T successful areas according to the message of president; processing of additional energy sources, natural resources, including oil, gas, mineral and hydro resources; in environmental protection; the development of medicine and medical industries; studying and promoting the world's history and culture of Turkmenistan, the ancient and medieval, modern and contemporary history, rich heritage of the Turkmen classic poetry and prominent thinkers of our people Uzbekistan: Formation and realization of social and economic policy itself; agro-industrial complex; fuel and power engineering complex; mineral and feed stock complex; health care and ecology; information technologies and management When we analyze priorities by countries we can see that almost all countries have 2 blocks of priorities: specific (for example, social transformation in Czech Republic or Problems of mountainous areas and development of mineral resources in Kyrgyzstan) and common priorities such as IT, biotechnology (biosciences), and healthcare technology. These common priorities should be the scientific bridge between countries, cross points for joint researches, international scientific cooperation, and building of international networks R&D priorities in Central Asia

25. Global Competitiveness Index 2010-2011 There are 12 main pillars in this index which reflect whole picture of country competitiveness We used 3 main blocks of ranking indicators In the first innovation block we have as expert (soft) so statistical (hard) data. The next two groups of indicators (technology and finance) contain only expert data. 3 main blocks of ranking indicators 1. Innovation and sophistication factors index (Innovation) Capacity for innovation Quality of scientific research institutions Company spending on R&D University-industry collaboration in R&D Government procurement of advanced technology products Availability of scientists and engineers Utility patents (hard data) Source:http://gcr.weforum.org/gcr2010/

26. STEPS Center Global Competitiveness Index 2010-2011 2. Technological readiness (technological adoption) Availability of latest technologies Firm-level technology absorptions.. FDI and technology transfer 3. Financial market development (efficiency) Availability of financial services Financing through local equity market Ease of access to loans Venture capital availability

27. Innovation and sophistication factors index

28. Technological readiness (technological adoption)

29. Financial market development (efficiency)

30. Country ranking

31. Unfortunately GCI does not include all East European and Central Asian countries. Data for Belarus, Uzbekistan and Tajikistan are missed. • Czech Republic demonstrates the best ranking in terms of innovation indicators, almost all ranks are higher than 40th places (except Availability of scientists and engineers), when Kyrgyzstan demonstrates poor result in almost all indicators. • Hungary, Slovakia, Ukraine and Russia has low rank by such indicator as Government procurement of advanced technology products when other indicators have higher than 80 rate , when Malta has the best rank of this indicator (19). Hungary has another high rank (18) by such indicator as Quality of scientific research institutions. • When we look at the ranking inside of Technology block we can see that all non-EU countries have very low positions below than 90 and Kyrgyzstan even lower than 130 places. Malta demonstrates best results when Czech Republic, Slovakia and Hungary also are also on the approximately high positions. • As for the block of financing indicators we can see that Malta again demonstrates the best position, Poland and Czech Republic also have not bad positions (except Affordability of financial services in Czech Republic). Ukraine, Moldova and Kyrgyzstan have poorer positions than other countries. In terms of financial indicators all countries demonstrate lower positions than in terms of innovation and technology aspects. • When we looking at common picture by all 3 blocks of indicators we can see that Kyrgyzstan and in the most cases Moldova have the worth position across all countries, while Czech Republic and Malta have enough good positions by almost all indicators. • When we make ranking by these 3 blocks of indicators and common rank we can see that Malta, Czech Republic, Slovakia and Hungary is on the top, while Kyrgyzstan is on the last place by the blocks of indicators and on the 11 total place. Tajikistan has bad position by blocks of indicators, but occupy 6th common place. • The common conclusion is: EU countries have better positions than non EU countries so European as Central Asian (except the Tajikistan that has better common ranking position than Romania and Malta). Malta having good thematic places occupies only 8 common places. It could be explained by small size of the country and its low competitive potential in comparison with other EU countries

32. R&D and innovation networks are one of the forms of globalizing, international cooperation, intensification of innovation and R&D activity, building common innovation area between East Europe and Central Asia. R&D and innovation networks can include so only European members as European and Asian members • ECAbit Network of Business Incubator & Technology Parks in Eastern Europe and Central Asia http://www.ecabit.org/ Armenia, Belarus, Bulgaria, Georgia, Germany, Kazakhstan, Kyrgyz Republic, Macedonia, Mongolia, Poland, Romania, Russia, Turkey, Ukraine, United States, Uzbekistan • S&T International Cooperation Network for Eastern European and Central Asian Countries – IncoNethttp://www.inco-eeca.net/ Greece, Germany, Russia, Ukraine, Turkey, France, Kazakhstan, Sweden, Uzbekistan, Austria, Armenia, Azerbaijan, Bulgaria, Moldova, Norway, Estonia, Belarus, Romania, Georgia, Poland, Finland • European Regions Knowledge Based Innovation (ERIK) Network http://www.eriknetwork.net Portugal, Spain, France, Slovakia, Germany, Greece, Italy, Hungary, Netherlands, Austria, Poland , Sweden, Belgium, Romania, Denmark, United Kingdom • Innovating regions in Europehttp://ec.europa.eu/enterprise/ire/Innovating-regions/www.innovating-regions.org/network/presentation/index.html The IRE network currently brings together around 235 member regions from the 27 EU Member States, as well as from Iceland, Israel, Norway, Switzerland and Turkey

33. Conclusions • Innovation mapping in East Europe and Central Asia is very difficult because of different indicators used in the countries which often are non comparable • European countries lead in terms of R&D and innovation activity in comparison with Asian countries by such indicators as Public R&D expenditures Business R&D expenditures Gross expenditure on R&D • Kazakhstan has relatively strong position among Central Asian countries while Czech Republic and Malta are leaders as among East European countries so among selected EU countries • All countries we analyzed have lower than average EU level of R&D financing indicators (only Russia has level of public financing equal to EU-27 level). At the same time all countries are far from the Lisbon target (3%)

34. Conclusions • CIS countries have extremely low indicator on EPO Patents that could be partially explained that these countries traditionally have high level of internal patents and have low orientation on European markets of high and medium high technology products. • Analogue of EIS should be introduced in the CIS countries in order to include these countries to the common statistical area and make innovation mapping more reliable • Common researches in priority directions could be the bridge between countries • International R&D and innovation networks are one of the ways of searching partners for cooperation, joint projects, and scientists’ exchange. Such networks should include as European so Asian countries.

35. STEPS Center Thank you for your attention Dr. Olha Krasovska Centre for Scientific and Technological Potential and Science History Studies (STEPS Centre), National Academy of Sciences of Ukraine E-mail olga_krasovska@mail.ru