rd and innovation in denmark_7 october 2011

7/30/2019 RD and Innovation in Denmark_7 October 2011

1/106

October2011

Business Research, Development and

Innovation in Denmark - policies and effects

by Thomas A lslev Christensen

Head of Department for Innovation Policy in the Danish Agency for Science, Technology andInnovation (DASTI),

Danish Ministry of Science, Innovationand Higher Education


2/106

Side 3

Table of contents

F OR EW OR D ..............................................................................................................3

PART ONE DA NISH INNOVATION SYSTEM AND POL ICY ..................................... 5

1 THE DANISH RESEARCH AND INNOVATION SYSTEM ......................................7

1.1 The agencies for science, innovation, and higher education ..............8

1.2 Funding bodies for research and innovation in the Ministry ofScience, Innovation and Higher Education...................................................10

1.3 The Danish universities and higher education institutions ................14

1.4 Innovation Denm ark 2010-2013 ........................................................15

2 D AN I SH C OM PET EN C E N ET W OR KS ..............................................................18

2.1 Description of competence and innovation networks ......................18

2.2 The impact of the Danish competence network scheme ..................22

2.3 Netmatch............................................................................................27

2.4 Overview over innovation networks and clusters .............................28

3 T H E DA N ISH IN N OVAT IO N C ON S OR T IUM S C H EM E .....................................33

3.1 Description of the IC scheme .............................................................33

3.2 The economic impact of the IC scheme .............................................34

4 TH E K NO WLE DGE-PILOT SCHEM E ................................................................38

4.1 Description of the knowledge-pilot scheme ......................................38

4.2 The economic impact of the knowledge-pilot scheme......................39

5 THE DAN ISH INDUSTRIA L PHD PRO G R A M M E ..............................................41

5.1 Description of the PhD programme ...................................................41

5.2 The impact of the PhD programme ...................................................42

6 T H E DA N ISH IN N OVAT IO N V OUC H ER S C H EM E ............................................48

6.1 Description of the voucher scheme ...................................................48


3/106

Side 4

6.2 The impact of the basic voucher........................................................50

6.3 The impact of the extended voucher .................................................51

7 THE DA NISH TE CHNO LO GICAL SERVICE SYSTEM (G T S -NE T) ........................54

7.1 Description of the GTS-net .................................................................54

7.2 T he performance of the GTS-net .......................................................56

7.3 The impact of the GTS-net .................................................................57

7.4 Description of the nine GTS-institutes ...............................................59

8 T H E DA N ISH IN N OVAT IO N INCU BA TO R SCHE ME .........................................63

8.1 Description of the Danish Incubator scheme ....................................63

8.2 The economic impact of the incubator scheme ................................64

9 THE TECHNOLOGY TRANSFE R O F F IC E S .........................................................67

9.1 The Technology Transfer Offices at the universities ..........................67

9.2 Commercialization of public research - metrics ................................69

10 T H E N AT ION A L AD V AN C ED T EC H N OL OG Y F OUN DAT ION ............................72

10.1 Description of the Advanced Technology Foundation .......................72

10.2 The economic impact of the Advanced Technology Foundation ......73

PART TWO THE ECONOMIC IMPACT OF R&D&I ............................................... 74

11 IMPAC T OF BUSINESS R&D A N D I N N O V A T IO N O N P R O DU CTIV ITY A NDG R O W T H .......................................................................................................75

11.1 Comparative descriptive analysis on average labour productivity ....76

11.2 Impact of R&D&I on enterprise marginal productivity......................77

11.3 Overview of other empirical studies ..................................................77

11.4. Data and method ...............................................................................80

11.5. Econometric results ...........................................................................82

12 THE SOCIO-E CO NO MICA L IMP A CT O F BUSINESS R&D INVESTM E N T ..........85


4/106

Side 5

13 PRODUC TIVITY AND H IGH ER EDUCATION ....................................................88

13.1 T he method and data .........................................................................88

13.2 T he impact of h igher education on productivity ...............................89

14 THE IMP A CT O F R& D CO LLA BO RA T IO N O N P RO DU CTIV ITY , EMP LO YME NTA N D G R O W T H ...............................................................................................91

14.1 International studies on the economic impact of national researchcollaboration .................................................................................................92

14.2 The impact of national collaboration projects ...................................94

14.3 The impact of international collaboration projects ...........................96

R E F E R E N C E S .........................................................................................................100


5/106

Page 3

Foreword

Making the innovation system in Denmark more effective:

The road to future productivity and grow th

Denmark attaches great importance to supporting sound framework conditionsconducive to collaboration between public research and the business sector andto improving the commercial exploitation of the innovation activit ies. Denmarkprovides a high level of public and private investments in an effective publicresearch and innovation system. Denmark has in the last decade improved thegovernance of research institutions and institutions for technologicaldevelopment while at the same time reducing the level of state aid and directsubsidies for business activities too close to markets.

Danish policies encourage the development of market-friendly approaches tosupport research and innovation which contributes to an improvement of theproductivity and competitiveness of enterprises.

In the past it has been difficult to document the microeconomic orsocioeconomic effects of research and innovation policies. It has been difficult toobtain an accurate picture of the private economic returns for enterprises.However, the research and analyses presented in this report show that research,development and innovation of Danish enterprises are important for

productivity, production, export and employm ent.

A recent analysis of the return from private R&D investments in Denmark showsthat R&D-active enterprises, which collaborate with universities or otherresearch institutions experience an average 15 per cent higher productivity peremployee compared to the average Danish R & D -active enterprises with nocooperation with research institutions. Furthermore, the productivity peremployee increases 9 per cent for enterprises initiating collaboration projectswith research and technology institutions compared to a control group of similarnon-collaborating enterprises found by using the propensity score matching

method among the 20,000 Danish R&D active enterprises. An additional analysisof the Danish innovation consortium programme which supports research-business collaboration shows that EUR 400,000 invested by an averageconsortium enterprise in public-private research partnerships yield a EUR 2-3million gross profits.

Moreover, analyses of the return from private R&D investments in Denmarkshow that R&D-active enterprises have a 15 per cent higher average productivityper employee compared to non R&D-active enterprises. Further, innovativeenterprises have a 6 per cent higher average labour productivity than non R&D-active enterprises.


6/106

Page 4

The return of increasing private investments in R&D&I is in average between 30per cent and 66 per cent for Danish enterprises. OECD analyses show that aneffective diffusion of knowledge doubles the economic impact of privateinvestments in research, development and innovation. In other words, it isbeneficial to invest in research, development and innovation and to do so in

cluster or project collaborations between research and business. Finally, thelikelihood of enterprises to innovate is 3-4 times higher for enterprisesparticipating in clusters and networks compared to similar enterprises notparticipating.

R&D leads to the creation of new products, processes and services in businesses,increasing earnings and at the same raising their level of knowledge. They will

thus be more competitive in the long run to the benefit of productivity

R&D&I investments also provide society new solutions to the many challenges

we face. Moreover, increased productivity and growth of enterprises yield higherexports, higher national income and thus more tax revenues. It thus contributesboth to increased prosperity and welfare.

This report describes the Danish innovation system and selected importantinnovation policy schemes and presents new analyses of the impact of enterpriseR&D&I and impact assessm ent of selected innovation policy schemes.

In terms of data, the report presents several new Danish research studies from2010 and 2011 on the effects of policy schemes and corporate investment in

research, development and innovation, providing a clearer picture of theproductivity effects of innovation policy schemes.

The studies presented have been undertaken by or in close collaboration withCentre for Studies in Research and Research Policy (CFA) at Aarhus University,the consulting and analysis firm DAMVAD, and the Centre for Economic andBusiness Research (CEBR) at Copenhagen Business School (CBS), The DanishEntrepreneurship Academy (DEA), The Danish Technological Institute (DTI) andwith contributions from S tatistics Denm ark.

To the extent that there are similarities between the analysed R&D enterprisesacross countries and between Danish innovation policy schemes and schemes inother European countries, the results and effects of the impact assessmentspresented in this report might be of general interest and could be integrated intocost-benefit analyses when evaluating the impact of private investments in R&Dand innovation policies in other European countries. I hope you will enjoyreading the report!

Thomas A lslev Christensen, PhD

Head of Department for Innovation Policy, Danish Agency of Science, Technology

and Innova tion in theMinistryof Science, Innovationand H igher Education


7/106

Page 5

The Danish Innovation

System and Policy

The Danish research and innovation systemunder the Ministry of Science, Innovationand Higher Education

Description of selected Danish innovationpolicy instruments

Impact assessments of innovation policies


8/106

Page 6


9/106

Page 7

1 The Danish Research and

Innovation SystemThe Ministry of Science, Innovation and Higher Education is responsible for thefollowing policy areas: research, innovation, highereducations, includinguniversity educations and internationalization of education and training inDenmark.

T he ministry aims to make Denmark a leading entrepreneurial and knowledge-based society offering educations that rank among the best in the world, and tocreate the best possible opportunities for citizens and businesses to realize thevision about Denmark as a network society.T he ministry consists of

The Danish Agency for International EducationThe Danish Agency for Science, Technology and InnovationThe D anish University and Higher Education Agency

which, together with the Permanent Secretary's Department, are referred to asthe Ministry of Science, Innovation and Higher Education.

Also within the scope of the ministry are a number of funding bodies for researchand innovation, research and advanced technological service institutions and theeight universities in Denmark.

Figure1.1. The Danish Ministry of Science, Innovation and Higher Education

The Ministry ofScience, Innovation

and HigherEducation

Danish Agency forScience, Te chnology

and Innovation(DASTI)

Danish Universityand Higher

Education Agency

Danish Agency forInternational

Education


10/106

Page 8

1.1T he agencies for science, innovation andhigher education

1.1.1T he D anish A gency for Science, Technology andInnovation - DASTI

The Danish Agency for Science, Technology and Innovation (DASTI) has its mainresponsibilities in the following areas:

Public research and innova tion fundingResearcher mobility

Dialogue on priorities in research and technology initiativesRegionalization of research and innova tionCommercialization of public and private research.Interaction between knowledge institutions and the business community.Innovation policy.EU research policy.International co-operation on research and innovation.Research and knowledge dissemination Technology transfer and knowledge transfer including legislationLegislation on funding bodies for research and innovation

The Agency also functions as secretariat to the Danish Research CoordinationComm ittee, the Danish Council for Independent Research, the Danish Council forStrategic Research, the Danish Council for Technology and Innovation, the DanishResearch Policy Council and the Danish Comm ittees on Scientific Dishonesty.

1.1.2The D anish University and Higher EducationAgency

The Danish University and Higher EducationAgency is working towards ensuringthat Denmark has world-class universities and higher education institutions . Itisstriving to create interesting and attractive learning and research environmentswithin the best possible organisational, legal, physical and financial framework.

The tasks of the agencyare:

analyses

policy development,legislation and the administration of frameworks for the universities,higher education, including university,study programmesPhD programmesGovernment research institutions.


11/106

Page 9

1.1.3Danish Agency for International Education

The Danish Agency for International Education is responsible for supporting theinternationalisation of education and training in Denmark.

The agency is the national agency for two EU education programmes, LifelongLearning and Youth in Action, as well as for other similar programmes, includingNordic and Danish education programmes and initiatives. The Agencyis also thecentral institution in Denmark where persons with foreign qualifications can getthese assessed and recognised. In addition,the Agencyis an information centreconcerning internationalisation of all the educational sectors.

T heAgencyhas the following tasks:

to help extend and strengthen internationalisation of education andtraining at all levels and to promote m obilityto handle the national administration of international educationprogrammes for school education, vocational education and train ing,higher education and adult learning as well as the youth sectorto make authoritative decisions in the field of assessment and recognitionof foreign qualificationsto act as a national information centre in relation to internationalisation

and recognitionto contribute to the development of international cooperation betweeneducational institutions a nd in relation to trade and industryto assist in launching new initiatives concerning the internationalisationof education and the development of competences in the g lobal society.

1.2Funding bodies for research and innovationin the Ministry of Science, Technology andInnovation

Figure1.2 The innovation system in Denmark consist ofseveralfundingbodies forresearch and innovationthat operate independently


12/106

Page10

T he funding bodies under the Ministry of Science, Technology and Innovation areThe National Research Foundation, The Council for Independent Research, TheCouncil for Strategic Research, The Council for Technology and Innovation andthe Advanced Technology Foundation.

Additional innovation funding bodies are found in the Ministry of Climate and

Energy, The Ministry of Environment, The Ministry of Food and Agriculture, TheMinistry of Finance, the Ministry of Foreign Affairs and the Ministry of Economyand Business.

1.2.1The Danish National Research Foundation

The Danish National Research Foundation was established in 1991, and is anindependent foundation, which works at strengthening Danish basic researchwithin all research fields. The Foundation s main working method is to set up andfund research centres of the highest international standing Centres of

Excellence for 1 -2 periods of funding. The Foundation annually distributes upto DKK 400 million (57 m illion euro) in 2011. This corresponds to approximately 2percent of the annual public research expenditure.

As a supplement to the Centres of Excellence, the Foundation experiments with

various other programs, particularly with a view to strengthening theinternationalisation of Danish research. Following this strategy the Foundation isactive on collaborations with international foundations and organisations


13/106

Page11

regarding establishment of joint research centres and initiatives on joint researchprogrammes in general.

Furthermore the Foundation has in the later years invested in six internationallyrecognised visit ing professors and funded the recruitment of three outstanding

professors to Dan ish research environments for a five-year period.

The effect of these investments is clearly visible, e.g. in the exceptional quality ofthe research output, the high degree of international cooperation, the extensivePhD production, and in the ability to attract external funding from abroad.

1.2.2The Danish Council for Independent Research

The Danish Council for Independent Research (DFF) funds specific researchactivities, within all scientific areas, that are based on the researchers' own

initiatives and that improve the quality and internationalisation of Danishresearch. The council annually distributes up to DKK 1400 million (187 millioneuro) in 2011.

The Danish Council for Independent Research also provides scientific advice in allscientific areas for the Danish Minister of Science, Technology and Innovation,the Danish Government, and the Danish Parliament.

The Danish Council forIndependent Research is a key driver in the effort tocreate attractive career pathsfor researchers. Accordingly, the Council spends

large parts of its funds on trainingyoung talentedresearchers, particularly at thepostdoc-level.

Furthermore, the Danish Council for Independent Research contributes to

strengthen ing the dissemination and application of research findings as well as itparticipates in international research collaboration.

The Danish Council for Independent Research is comprised of a Board ofDirectors and five scientific research councils.

1.2.3The Danish Council for Strategic ResearchThe Danish Council for Strategic Research was established in 2003, and is an

independent foundation, which works at strengthening Danish strategic researchwithin all research fields. The council annually distributes up to DKK 1100 million(150 m illion euro) in 2011.

The Danish Council for Strategic Research seeks to ensure that strategic researchin Denmark is organised to meet the challenges facing Danish society. The aim isto ensure Denmark s posit ion as a global frontrunner regarding welfare, wealth

and science in the short and long term.


14/106

Page12

The Danish Council for Strategic Research wishes to promote internationalcooperation in research, including cooperation with the new high-growthcountries.

The Council wants to strengthen the interaction between publicly financed

research and the rest of society, such as privately financed research, privateorganisations, public institutions and the corporate world.

The Danish Council for Strategic Research considers research education animportant element in strategic research as it contributes to a positivedevelopment of the research environments in Denmark.

1.2.4The Danish Council for Technology and Innovation

The Danish Council for Technology and Innovation was established in 2002, and

is an independent council, which works at strengthening Danish private research,development and innovation and economic growth in Denmark. The councilannually distributes up to DKK 1100 m illion (150 million euro) in 2011.

The council's work consists of two parts. One is to advice the Minister of Science,Technology and Innovation about technology and innovation policy. The other is

to administer the initiatives given to the council by the Minister.

The objectives of the council are to promote:

Collaboration and dissemination of knowledge between researchers,research and educational institutions, advanced technology groups,knowledge institutions and enterprises.Innovation, development, diffusion, use and commercialization of newresearch and technology, and knowledge of organizations and markets.Flow and development of knowledge and technology based enterprises.Innovation and input of capital and expertise for knowledge andtechnology based enterprises.International collaboration on the utilization of knowledge andtechnology.

The Danish Council for Technology and Innovation administers a number of

initiatives the purposes of which are to promote private research, development,innovation and dissemination of knowledge between knowledge institutions andenterprises. The initiatives are:

Cooperation and interaction between business and research:o Innovation Consortia schemeo Innovation voucher schemeo The scheme for new forms of collaboration

o The competence and innovation network schemeApproved Technological Service (The Danish G T S -system)


15/106

Page13

Industrial PhD schemeKnowledge Pilot Scheme Entrepreneurship and commercialization:

o Technology transfer offices at the universitieso Business Incubators (The D anish innovation incubator scheme )o The proof-of-concept scheme

1.2.5The Danish National Advanced Technology Foundation

The Danish National Advanced Technology Foundation was established in 2005,and is an independent foundat ion. The Foundation annually distributes up toDKK 600 million (80 million euro) in 2011.

The aim of the Danish National Advanced Technology Foundation is to enhance

growth and strengthen employment by supporting strategic and advancedtechnological priorities within the fields of research and innovation.Furthermore, the foundation shall make a special effort to promote research andinnovation in small and medium-sized enterprises.

The Foundation supports larger projects which are relevant to advancedtechnological research and/or innovation. The foundation will pay specialattention to applications which fall within the areas of nano-, bio-, and/orinformation and communication technology, including the interface betweenthese areas.

1.2.6The Danish Council for Research Policy

The Danish Council for Research Policy (DCRP) gives the Minister for Science,Technology and Innovation research policy advice. The Danish Parliament and

any minister can also obtain research-related advice from the Council. Thisadvice is given upon request or upon the initiative of the Council. The councildoes not distribute funds.

The Council's responsibilities generally include advice on Danish andinternational research policy for the benefit of society, including advice on:

Framework conditions for research.Funding for research.Major national and international research infrastructures.Development of national research strategies.Denmark's role and position in international research collaboration.Research training and recruitment of researchers.


16/106

Page14

1.2.7The D anish EuroCenter

EuroCenter in the Danish Agency for Science, Technology and Innovationprovides information and advice to all Danish potential and actual part icipants inEuropean Framework programmes for Research and Innovation. Important tasksfor EuroCenter are to enhance participation of Danish enterprises and researchinstitutions in international research and innovation projects and thusstrengthening Danish competitiveness and growth supporting the EuropeanKnowledge Society.

EuroCenter are in current dialogue with Danish enterprises and researchinstitutions on all aspects of part icipation in a Framework programme project i.e.clarifying if an idea fits a call, writing an application or advise on the legal andfinancial rules for participation.

EuroCenter offers

- individual m eetings with potential or actual project participants- user defined workshops- information meetings- assistance in application writing- advise on legal/financial rules- courses on specific aspects of participation in international research and

innovation projects- telephone/e-mail consultation- newsletters and publications.

Further EuroCenter provides information on the national support scheme forapplication writing, networking, contract negotiation and project coordinationoffered by the Agency for Science, Technology and Innovation to all Danishenterprises and research ins titutions.

1.3The Danish Universities and HigherEducation Institutions

The system of higher education in Denmark includes the four types of highereducation institutions:

8 universit ies conduct research and offer research-based undergraduate andpost graduate programmes comprising Bachelor, Candidatus, and PhDdegrees as well as the Diploma and Master degrees (continuingadulteducation)aimed at adult learners and in-service learning.16 tertiary artistic education institutions and other institutions of highereducation offer first, second and third cycle programmes comprising

Bachelor, Candidatus, and PhD degrees and the Diploma and Master degrees(continuingadult education).


17/106

Page15

8 university colleges and 2 colleges of engineering (both of which are tomerge with the university colleges by the end of 2014) offering first cycleprogrammes comprising the Professional Bachelor and Diploma degrees(continuingadult education).10 academies of professional higher education offering short cycle

professionally programmes, comprising Academy Profession degrees and theVVU degree (continuingadult education).

Figur 1.3 The Eight Danish Universities

1.4Innovation Denmark 2010-2013

The Danish Council for Technology and Innovation under the Danish Ministry of

Science, Technology & Innovation administers a number of initiatives forpromoting innovation and dissemination of knowledge between knowledge


18/106

Page16

institutions and enterprises. The council has in collaboration with the ministryand after a broad national consultation procedure with organisations,institutions and innovation actors established the second four year action plancalled Innovation Denmark 2010-2013 which describes the main innovationpolicy initiatives under the Ministry of Science, Technology and Innovation. T he

initiatives are divided across four broad priority areas:

Figure 1.4.:InnovationDenmarkPrioritiesand Measures

The objective of the Danish government is that private R&D should be minimum 2 per cent of GDP and Danish enterprises shall be among the most enterprises in

the world.In addition, the overall goal of the Danish Council for Technology and Innovationis that Denmark should be in top-3 in the Innovation Union Scoreboard of theEuropean Commission. Other goals of Innovation Denmark 2010-2013 are:

Goal 1: Danish enterprises must be more and continuously innovative, the smallan dmedium-sized enterprises included

Goal 2: Knowledge dissemination and interact ion between research and industry

shall be strengthened

The most important tools of the Danish Council of Technology and Innovation:

1. Innovation Denmark project programm e: a) Innovation consortia, b)innovation vouchers and c) new forms of research-business collaborationprojects:i.e. large and small national and international innovation andresearch projects operated in collaboration betweenacademic andresearch institutions andenterprises

2. Innovation Denmark Network Programme: 22 competence and

innovation networks (cluster organisations)


19/106

Page17

3. Highly educated staff and researchers in enterprises:a. The Industrial PhD Programmewhere theresearch student shares

his or her time betweenan enterprise and a universityb. The knowledge pilot scheme (an innovation assistant programme)

which promotes employment ofhighly qualified staff in small and

medium-sized enterprises.

4. The Danish GTS-net: The approved technological service instituteswhichare independent knowledge institutions delivering knowledge toenterprises

5. The D anish Innovation Incubator programme: 6 business incubatorsinvest public capital inentirely new, high-tech enterprises.

6. The Danish Proof-of-Concept programme: Commercial exploitation of

public research: In the form of support for maturation of inventions frompublic research institutions(proof-of-concept) and projects whichpromotetechnology transfer between na tional and internationalresearch institutions and enterprises.


20/106

Page18

2 The Danish Competence

Networks and ClustersInnovation Networks Denmark

This section presents the Danish competence and innovation network scheme( Innovationsnetvrk Danmark ) which is a national cluster programme. Thesection presents the results of the scheme. These results are published annually,see Innovation Network Denmark Performance Account from the Danish Agencyof Science, Technology and Innovation 2011.

2.1Description of competence and innovationnetworks

A competence and innovation network is supported by the Danish Council forTechnology and Innovation under the Ministry of Science, Technology andInnovation. A network (or a cluster) is a flexible framework for collaborationbetween enterprises, research institutions and non-profit advisory/knowledgedissemination parties. The annual budget of the total network programme of theministry is approximately 10 million euro. The annual budget of an average

network is approximately 0.9 million euro of which the 40 percent is financed bythe network programme of the DCTI, at least 40 percent is financed byenterprises and the rest is financed by regional sources, universities,technological and research ins titutes and the European Union. From July 2010 22national networks exist with support from the DCTI network programme. T heaverage number of employee in each network was 5.4 man years.


21/106

Page19

Table 2.1 Annual resources of the total network programm e and of the average network

EUR 10 million are provided to the innovation networks in both 2010 and 2011. Some of t hesefunds have been used for specific projects. The basic grants also include funds for network

matchmaking and idea generation. This work can lead to partnerships that can be funded

under other public sector schemes.

One of the most important tasks of a competence and innovation network is to ensure thatnational innovation policy is not simply a matter for large research enterprises; both byensuring that smaller enterprises participate in network projects, and by ensuring that thenetworks help this target group to make use of other innovation policy init iatives e.g.

innovation consort ia, innovation vouchers, t he knowledge-pilot scheme and the Industrial PhD

scheme. See chapter 3-11 for more detailed information about these various innovation policyschemes. The use of other innovation policy programmes is three times higher amongenterprises that participate in the activit ies of t he network than among similar enterprises notparticipating in innovation networks.1

1 The impact of cluster policies in Denmark, Danish Agency of Science, Technology and Innovation 201 1


22/106

Page20

The competence and innovation networks carry out a wide range of activities with the aim toshare, develop and disseminate knowledge in a way which creates value for the enterprises.The activities can be divided into nine core activities briefly described in table 2.2.

Table2.2. Core services forenterprises inthe competence and innovation

networks

It is the policy of the government and the DCTI that the various differentnetworks should complement each other, and that enterprises and theiradvisors should be able, quickly and easily, to find out what each network isable tooffer.

T he idea is that the innovation networks and clusters under the Danish Ministry of Science,Innovation and Higher Education should differ from other networksand clusters in the following ways, by:

National wide. Many other networks are regional or local and their sole

purpose is strengthening interaction with one particular knowledgeenvironment. The innovation networks under the Danish Agency for Science,


23/106

Page21

Technology and Innovation should instead work as a portal to all knowledgeinstitutions in Denm ark in their particular subject area.Being open to new members/ participants. The goal of achieving nationalinnovation networks also means that they must work continuously to attractnew enterprises.Providing entry to the national innovation system. The innovation networksoffer highly-qualified consultancy on financing options at both national andEU levels. At the same time, they work as a portal for the enterprises to awide range of different knowledge environments - both in Denmark andabroad. Unlike most other networks the innovation networks under theDanish Agency for Science, Technology and Innovation offer individual

matchmaking to enterprises wishing to find e.g. a university researcher withknowledge in a specific area.

Existing regional networks which aim to develop into national networks can do

so by applying to the Danish Council for Technology and Innovation forinnovation network status when future tenders are invited. There are tenders in2010, 2014, etc.

The DCTI finances national networks for a period of four years with thepossibility to add additional 4-years periods after a tender.

In summary there are nine core network services:

Bridge-building activities and meeting placeso Themed networkso Matchmakingo Idea generationo Conferences, seminars, etc.

Partnership projectso P re -projectso R & D &I projectso Business- to-business partnerships

Knowledge information and comm unicationo Consultation o Skills development

Table 2.2 above provides a description of the core services of the various servicesfor enterprises in the competence and innovation networks.


24/106

Page22

2.2T he impact of the Danish competencenetwork scheme

This section presents an analysis of the impact of the competence andinnovation network scheme. It has been prepared by independent consultancyenterprises. The ministry publishes each year a performance statistics on theimpact of the competence network. These statistics have been published since2006.

The statistics are based on a survey with the network coordinators, participatinguniversities and technological institutes and enterprises having participated inthe activities of the networks.

The statistics follow the impact of the network in several success parameters in

association with running and participating in the activities of the network. Thesuccess parameters are: R&D investments, partnership projects, collaboration

between enterprises and knowledge institutions, innovation and idea creation.

T he 2011 performance statistics document progress in the ability of thenetworks to tackle the main tasks of the networks. A total of 3,155enterprisesparticipated in network bridge-building activities in 2010. Two out of threeparticipants come from enterprises with fewer than 50 employees.

In 2010, 906 businesses participated in partnership projects which were init iated

as a result of network activit ies. 615 of these enterprises or 67percent hadfewer than 50 employees.

On the other hand, there has been a minor reduction in the number ofenterprises participating in partnership projects for the first time. Most


25/106

Page23

enterprises had already worked with a knowledge institution. The reduction infirst-time participants is due to the fact that some enterprises come back yearafter year. In 2006, many new enterprises joined the networks and subsequentlypart icipated in a number of projects. Many, however, do find new partners. T heperformance statistics from 2007 shows that 56 per cent of enterprises which in

2007 init iated a partnership project with a university or a GTS-institute had notpreviously worked with that specific knowledge institution.

It is the aim of the Danish Council for Technology and Innovation to encourage asignificant rise in the number of enterprises working withknowledge institutions,i.e. universities, GTS-institutes, other public research institutions etc. It istherefore an important future challenge for the networks to continue to attractnew enterprises.

When combined with other network activities, the partnership projects have

produced significant results. Nearly 350 enterprises developed new products,services or concepts in 2010 - and 445enterprises generated innovation ideas onwhich they expect to carry on working. Even more 896enterprises benefitedfrom the networks by building skills or obtaining specific methods or tools which

significantly increase their ability to work with innovation.

It is estimated by the enterprises themselves that the 408 new products andservices which were created in 2008 by network activities will result in anincreased annual company turnover of approximately DKK 1.6 billion.

On top of this comes the value of the ideas and skills that the enterprisesdevelop in their networks the value of which is not possible to estimate.

Figure 2.4 provides an overview of the developments for various indicators.


26/106

Page24

Networks carry out individual matchmaking for enterprises wanting to find theright researchers and scientists. They arrange idea generation e.g. in the formof special project camps or workshops whose purpose is to develop specificproject ideas based on enterprise requirements and applicable knowledge heldby the universities.

Many of the partnership projects resulting from the network activities arebusiness to business projects. Other projects are public-private collaborationprojects with the participation of enterprises as well as public researchinstitutions. The projects are not the same as the Innovation Consort ia Scheme


27/106

Page25

(see next chapter). The collaboration projects of the Innovation ConsortiaScheme also include a criterion regarding active knowledge transfer, includingthe participation of a knowledge transfer organisation in the project.Furthermore, a minimum of two enterprisesmust participate in an InnovationConsortium and enterprises cannot receive funding from the grant provided. The

innovation network projectscan take many forms.

To the extent that there are similarities between the projects of the InnovationConsortium Scheme and the projects of the competence and innovationnetworks , however, the results of the impact assessment of the InnovationConsortium Scheme presented in the next section may be of general interest andcould be integrated into cost-benefit analyses when evaluating the economicimpact of the competence and innovation networks.

In 2011 a separate econometric impact assessment of the Innovation Network

Denmark programme was conducted; see The Impact of Cluster Policy inDenmark from The Danish Agency of Science, Technology and Innovation2011d. The study shows that participation in innovation networks and clustersincreases the probability to innovate by more than 4,5 times year 1 afterparticipation . Companies part icipating in different innovation networks have anincreased probability of being innovative with the effects on innovation showingfrom the first year of participation. The probability of being innovative is 4.5times higher for innovation network participating companies in innovationnetworks compared to a control group composite of other similar companies notpart icipating in networks. This means that for every time 10 companies in the

control group turns innovative 45 part icipating companies in innovation networkwill turn innovative. Among the participating companies in innovation networkswe can identify 102 companies that become innovative of a treated populationof 1,225 part icipating companies in innovation networks an increase of 8.3percent. On the contrary for every 1,225 participating company in the controlgroup 22 companies turn innovative an increase of 1.7 per cent. It is adifference of 6.5 percentage points. The control group is found by using thepropensity score matching method.

Increasing the number of innovative companies potentially has an economic

impact. The most comprehensive Dan ish study of private return on investment inR&D and innovation has proven a significant return on investments in innovationof 30 percent, see chapter 102. Thus an increased ability to be innovative and

2 The Danish Agency for Science, Technology and Innovation, 2010


28/106

Page26

increased probability to be innovative is expected to have a significant economicimpact on the participating companies in innova tion networks.

The impact study also document that network participation increases theprobability of R&D collaboration by 4 times year 1 after participation.Innovationnetworks assists companies in entering joint R&D and innovation projects byproviding the companies with the competencies required for this complex task(and which SMEs, in particular, do not possess prior to participating).Additionally, innovation networks provide a platform within which part icipatingcompanies in innovation networks identify potential collaboration partners.Already within the first year of participation, the probability of entering R&Dcollaboration increases by 95 per cent, and thus almost doubles their probabilityof entering R&D collaboration. Thus every time a company in the control groupcomposited by other similar companies (found through propensity matchingscore) not part icipating in innovation networks enters R&D collaboration, two

new participating companies in innovation networks enters R&D collaboration.

The year after participating in an innovation network, the probability of enteringR&D collaboration is almost 300 per cent higher than other similar companiesnot participating in networks.

Chapter 11 and 14 presents new econometric studie son the impact of enteringR&D collaboration3. The 2011-study shows that companies, who are enteringR&D collaboration, have significant higher growth rates in productivity peremployee compared to other similar and high productive companies. Entering

R&D collaboration increases productivity with an average of 9 per cent a yearover a 9 years time period. Thus, increased R&D collaboration is expected tohave a significant economic impact on the part icipating companies in innovationnetworks.

3 The Danish Agency for Science, Technology and Innovation, 2010 and 2011


29/106

Page27

2.3Netmatch

In 2010, the Danish Agency of Science, Technology and Innovation establishedNetmatch as a unifying platform and a support function for the innovationnetworks in Denmark.

The objective of Netmatch is to increase the impact of the Innovation NetworkDenmark initiative through the development and supply of a number of servicesfor the innovation networks in order to ensure optimum working conditions. Bymeans of competence development and internationalization, and by assistingthe innovation networks on operational and administrative tasks, Netmatchmakes it easier for the innovation networks to focus on matchmaking and

networking.Netmatch supports the innovation networks in three specific areas:

Being national - in contrast to many other Danish networks, which are regionalor local, the innovation networks are national and should acts as nationalmeeting points within their specialized field

Branding - the Danish business and scientific communities should be familiarwith the different innovation networks, their field of activities and how to

interact with them .

Being international the innovation networks are expected to give m ore focuson operating in international markets. Through the EU funded Enterprise EuropeNetwork, Netmatch is able to support the innovation networks withinternational business and information services

Netmatch is in a close and continuous dialogue with the individual innovationnetworks and the Danish Agencyof Science, Technology and Innovation. In closeco-operation, the parties agree on which services Netmatch should develop and

provide.


30/106

Page28

Networks and clusters in the Innovation Networks Denm ark programme

AluCluster - Know ledge and technology centre for aluminium

Contact: Michael Nedergaard ph. + 45 7473 3040, e-mail: [email protected] AluCluster, a centre within practical utilisation of aluminium, offers a wide range

of competences within the aluminium area. AluCluster's objective is to createvalue for the customer through overall solutions. AluCluster's mission is to meet the need for highly qualified consultancy now andin the future within practical utilisation of aluminium and thereby become thepreferred partner within consultancy and development of aluminium solutions.www.alucluster.com

Animation H ubContact: Viggo Johannes Jensen - ph. + 45 2850 9864, e-mail: [email protected] Hub is a cluster experimenting with animation in the context of

development and communication. Based on the competences within animation,such as generating new ideas, dramaturgy, cinematography and simulation, thecluster wish to help companies find new ways of understanding, accepting andinvolving in regards of innovation processes, developing new concepts,marketing as well as learning, guiding and interaction design.www.animationhub.dk

Danish Sound Technology Network

C ontact: Jan Larsen ph +: 45 2243 0025, e-mail:jl@ imm.dtu.dk

Danish Sound Technology Network embraces individuals, organizations andbusinesses involved with sound technology. They will create a new space forinnovation, collaboration and dissemination of knowledge.The vision of the network is that Denmark is a leading country with regards tosound technology in terms of knowledge, research and education. Danish SoundTechnology will be the epitome of high quality in products and services, as wellas in physical rooms and social contexts.www.lydteknologi.dk

FoodNetwork

Contact: Britt Sandvad ph: + 45 9612 7624, e-mail: [email protected]

FoodNetwork is an extensive network which includes a large number of Danishuniversities, research institutions, Approved Technological Service Institutions(GTS), innovation- and development parks as well as technical- and vocationalschools. The aim of the network is to create growth within the food industrythrough networks, projects and activities. It is also to be the link that ensuresvisibility of the relevant partners within the food industry and to support andfacilitate existing and new clusters.www.foodnetwork.dkBiopeople Innovation Network for BiotechContact: Per Spindler ph: +45 2875 6572, e-mail: [email protected] embraces universities, research organizations, and hospitals, the

Danish Medicines Agency, industry associations as well as pharma, medtech,medical device, food and biotechcompanies.www.biopeople.dk
http://www.biopeople.dk/http://www.foodnetwork.dk/http://www.lydteknologi.dk/http://www.animationhub.dk/http://www.alucluster.com/


31/106

Page29

Infinit The Danish ICT Innovation networkManager of network Aalborg: Rikke Uhrenholt ph: + 45 9940 7220, e-mail:[email protected] of network Copenhagen: Rikke Koch ph: + 45 2126 8724, e-mail:[email protected]

Infinit is a Danish network for innovative utilization of IT. Our goal is to convert theinfinite possibilities that technology offers into concrete collaborations between

research and industry.www.infinit.dk

InnoBYG - Innovation Network for Energy efficient and S ustainable construction

Contact: Henriette Hall-Andersen ph: +45 7220 2241, e-mail: [email protected] cons truction industry's new network InnoBYG will facilitate sustainable and energyefficient development in the construction industry from 2010-2014. The focus of thenetwork will be on development projects, knowledge sharing and dissem ination andmatchmaking across the industry and between companies and knowledgeinstitutions/universities. www.innobyg.dk

The Innovation network for Environmental Technology

Contact: Jrn Rasmussen - ph. + 45 4516 9200, e-mail: [email protected] he Innovation Network for Environmental Technology, Inno-mt, was establishedin December 2010. The focus is to bring the sectors soil, water, air and wastetogether to enable innovative new products and services across the four sectors.www.inno-mt.dk

InViO - Innovation network for knowledge-based experience econom yContact: Jens F. Jensen ph. + 459940 9028, e-mail: [email protected] objective of Innovation network for knowledge-based experience economyis to strengthen knowledge sharing, knowledge development, and cooperationbetween businesses and institutions of knowledge relating to innovation andresearch within the field of experience economy. In this way, the innovationcapacity of the businesses is reinforced so that knowledge- and experience-based growth within the industry will be generated.www.invio-net.dk

Innovation Ne twork for BiomassContact: Michael Stckler ph +: 45 8999 2504, [email protected] purpose of the Innovation Network for Biomass is to facilitate developmentwithin production, handling, and processing of biomass with the goal of betterutilization for energy purposes. Our members consist of individuals andcompanies involved in the field of biomass, agricultural waste, and manure. Thenetwork has an international scope and welcomes both Danish and internationalmembers from private companies, research institutions, authorities, etc.www.inbiom.dk

Danish LightingInnovation Network

Contact: Lene Hartmeyer ph. +: 45 4717 1800 , e-mail: [email protected]
http://www.inbiom.dk/http://www.invio-net.dk/http://www.inno-mt.dk/http://www.innobyg.dk/http://www.infinit.dk/


32/106

Page30

The object of the Innovation Network for Danish Lighting is to promote the use of goodand appropriate lighting and to advance knowledge and to disseminate information forthe improvement of the lighted environment to the benefit of society. www.dansklys.dk

The Innovation network for Market, Communication and Consumption

Contact: Per stergaard ph. + 45 6550 3235, e-mail: [email protected] network embraces a broad range of core competences that are essential tounderstand future markets and consum ers. Researchers from a classic m arketingtradition collaborate with researchers from the humanities, art, and design. Th iscombination is not common in a Danish context, but crucial in a market where symbolicand emotional dimensions of products are becoming more and more important. Theparticipating researchers come from The University of Southern Denm ark, AalborgUniversity, Aarhus School of Business Aarhus University, Copenhagen Business School,and Kolding School of Design. www.imkf.dk

Service Platform Service Cluster Denm arkContact: Mette Abrahamsen ph: + 45 2311 3719, e-mail: [email protected] vision for Service Cluster Denmark is to contribute to growth, innovation andcompetit iveness among service businesses in Denmark. Service Cluster Denmarkaims to create new possibilities for cooperation between businesses andknowledge institutions, to strengthen research and innovation in businesses andto incorporate international knowledge and ideas by involving businesses,research institutions and networks outside Denmark.www.serviceplatform.dk

Innonet Lifestyle Interior & Clothing

Contact: Betina Simonsen ph: + 45 96 16 62 00, e-mail:[email protected] purpose of Innonet Lifestyle Interior & Clothing - is to promote growth andinnovation into the industry of home and fashion by identifying, communicatingand embedding new knowledge. The purpose is also to build bridges betweencompanies and institutions of research and knowledge.www.innonetlifestyle.com

Plastic and P olymer NetworkContact: Dorte Blum ph: + 45 36973600, e-mail: [email protected] Plastcluster consists of a number of companies with in interest in plastic andpolymer materials. The aim of the cluster is to increase the awareness of thematerials, promote and innovate the use of the materials within and acrosssectors. www.plastnet.dk

No Age innovative solutions for elderly people

Contact: Gunhild Garsdal, ph. + 45 30108080, e-mail: gg@vhh r.dkNo Age aims to make to the older people of Denmark m ore resourceful by supportingtheir resources and making them capable of taking care of themselves. Compan ies,leading research institutions, municipalities, hospitals and organizations are part of NoAge s work to develop innovative solutions within health, prevention, nursing,treatment, etc.www.lvvl.dk
http://www.lvvl.dk/http://www.plastnet.dk/http://www.innonetlifestyle.com/http://www.serviceplatform.dk/http://www.imkf.dk/http://www.dansklys.dk/


33/106

Page31

Offshore Center DenmarkContact: Peter Blach ph: + 45 3697 3670, e-mail: [email protected] Center Danmark is the official national competence and innovationcenter for the Danish offshore industry. On behalf of its +210 membercompanies and institutions Offshore Center Danmark push development withthe aim of growth within the Dan ish offshore industry.www.offshorecenter.dk

RoboCluster

Contact: Bjarke Nielsen ph: + 45 2119 4797, e-mail:[email protected] is a Danish innovation network for robotics and automation. Theobject is to maintain and further expand the robotics sector in Denmark bygenerating and ensuring optimal conditions for innovation in new as well as inexisting enterprises and set robotics into action in fields as hospitals, farming,industry, play and education. This is done by initiating technological projectsbetween suppliers, producers, users, universities and knowledge institutions in

the field of robotics and automation.www.robocluster.dk

The Transport Innovation Network - TINV Contact: Steen Sabinsky ph: + 45 2966 2408, e-mail:[email protected] The Transport Innovation Network (TINV) is a national, cross disciplinary networkaimed at the Danish Transport sector. The primary objectives of TINV are tocreate synergy, encourage match-making and generate research and

development projects between stakeholders in the transport sector andresearch- and educational institutions, as well as related sectors such as energyand infrastructure.www.tinv.dk

UNIC Use o f New technologies in Innovative solutions for Ch ronic patients

Contact: Dorthe Kjr Pedersen ph + 45 2498 4155, e-mail:[email protected]

The num ber of chronically sick people is increasing , and consequently so is the necessityof treatment and nursing for the chronically sick. Through development of technologicaland innovative solutions UNIC aims a t a decrease in the number of hospitalizations,increase of chronically sick people in jobs, more people being able to care for

themselves, etc. www.partnerskabetunik.dk

VE-Net - Renewable Energy Innovation Network Contact: Grete Bech Nielsen ph : + 45 7220 1113, e-mail: [email protected] (Renewable Energy Network) is an innovative network related to energy.The aim of the network is to create collaboration initiatives between companiesand research institutes with the purpose of increasing the application ofresearch-based expertise in the business community and to solve hightechnology matters.www.ve-net.eu

Water in Urban AreasContact: Ulrik Hindsberger, ph. + 45 7220 2285, e-mail: [email protected]
http://www.ve-net.eu/http://www.partnerskabetunik.dk/http://www.tinv.dk/http://www.robocluster.dk/http://www.offshorecenter.dk/


34/106

Page32

The partnership is directed towards the challenge of adapting cities to a changedclimate, and thus it operates within the topic of energy, climate andenvironmental technologies. The partnership will contribute to realising thevision of Denmark as a climatically strong and green winner nation and establishDenmark as the global demonstratorium for viable water technologies, system

solutions and integrated water resource administration. The goal is to develop,document and present technologies and planning tools for climatic adaptation ofexisting urban areas in Europe, USA and Australia, and for development of new,climatically strong cities in countries in financial and institutional transit ion, suchas China. www.vandibyer.dk
http://www.vandibyer.dk/


35/106

Page33

3 The Danish Innovation

consortium (IC) schemeThis section presents the Danish Innovation Consortium scheme( Innovationskonsortium ) and an analysis of the economic impact of theInnovation Consortium scheme on participating enterprises. The econometricanalysis has been prepared by the Centre for Economic and Business Research(CEBR) at Copenhagen Business School (CBS).The Innovation Consortium scheme(IC scheme) is a Danish subsidy scheme granted by The Danish Council forTechnology and Innovation under The D anish Ministryof Science, Innovation andHigher Education. The IC scheme has existed since 1995. The ministry investsannually approximately EUR 16 m illion in the scheme.

3.1 Description of the IC scheme

An innovation consortium supported by the Danish Council for Technology andInnovation (DCTI ) is a flexible framework for collaboration between enterprises,research institutions and non-profit advisory/knowledge dissemination parties.The budget of an average innovation consortium is approximately between 3million and 7.5 m illion euro. The average funding by the DC TI is 40 percent of aconsortium budget, i.e. between 1 and 3 million euro. An innovation consortiummust cons ist of at least two enterpriseswhich participate throughout the entireproject, one research institution and one advisory and knowledge disseminationparty. Additionally, an innova tion consortium m ay involve or attach other typesof partners which are considered to be relevant for the project.

The collaboration should be based on a joint project aimed at developing andbringing research based knowledge to maturity, so that it can form thefoundation for the innovation of Danish enterprises. The joint project shouldresult in the completion of high-quality research relevant to Dan ish enterprises.Furthermore, the project should ensure that new knowledge is converted intocompetences and services specifically aimed at enterprises, and that theacquired knowledge is subsequently spread widely to the Danish businesscommunity including in particular small and medium -sized enterprises.

Any project initiated by the consortiums m ust comply with the following:The project has a generic content and the results must be of relevance toa wide group of enterprises.The project is at a high level of innovation and research.The project cannot have the character of product development forindividual enterprises.

The project requires close collaboration between the consortium parties.The project duration is between two and four years.


36/106

Page34

The role of the enterprises in a consortium is to ensure that the joint researchand development project is based on relevant development needs of Danishenterprises. Consequently, the project theme should be of significance to thebusiness development of the participating enterprises. However, it should nottake the form of actual product development.Also, the enterprise participationensures that the knowledge and competences of the business community areutilised in the project. Therefore, the participating enterprises should contributewith knowledge and competences at a high level within the project field.

Easy application process and reporting procedures

The University or the GTS-institute participating in the consortium takescare of the application process and the dialogue with the Danish Councilfor Technology and InnovationProject can start 3 month after applicationLight reporting procedures with the ministry every year if there are

deviations from the project descriptionStop-go mid-term evaluation of the project

T he enterprises may be Danish or foreign (or both). Between 1995 and 2003, 274different enterpriseshave participated in an Innovation Consortium, and anumber of enterpriseshave participated more than once. On average there wereapproximately 40 enterprisesjoin ingan Innovation Consortium per year, butthere are large differences between years, with the years 1998-2000 beingcharacterised by the highest activity with an average of almost 70 enterprisesjoining an Innovation Consortium. Approximately 50 percent of all participatingenterprisesare in the manufacturing business, 25 percent are in financial orbusiness services and 15 percent are in trade and retail.

3.2 The economic impact of the IC scheme

This analysis - based on The Analysis of Danish innovation policy - The Industrial

PhD Programme and the Innovation Consortium Scheme , from The DanishAgency of Science, Technology and Innovation (2011) - follows 220 enterpriseswhich have participated in at least one Innovation Consortium using nationalenterprise-register dataset. Enterprise level developments are primarily studiedin two success parameters: gross profit and employment.

Note that while employment is defined as the number of employees in a given

enterprise at a given point in time, gross profit is defined as annual net salessubtracted annual costs of variable inputs (raw materials, energy, intermediategoods purchases, etc.) except labour costs. Gross profit is the most precise

measure of the enterprise s value creation, but one should, of course, keep inmind that part of the enterprise s total value creation may be passed on to


37/106

Page35

consumers, may be retained in the firm and increase its value (of which there isno data available for this analysis), or may take the form of posit ive externalities,

such as knowledge and/or innovations, that benefits other enterprises or societyas such. As a measure of knowledge creation, the analysis could in principle alsohave considered firm-level patenting activity. No actual data on patenting

activities were, however, available for this analysis.

While employment is simply the number of employees in a given firm at a givenpoint in t ime, gross profit is a measure of the firm s value creation.

The analysis considers (absolute and percentage wise) growth in gross profit andthe number of employees both before and after programme participation andanalyses the changes in the growth patterns in association with participating inthe programme. The analysis identif ies a control group of enterprisesthat do notparticipate (non-participants), but which are similar to the participants in terms

of size, industry, and region.

Under the assumption that gross profit and employment developments ofparticipants and non-participants would be symmetric in the absence of

programme participation, differences between the two groups of enterprises ca nbe interpreted as the causal impact of the programme on participatingenterprises. ICs subsidise and facilitate cooperation between private enterprisesand research and knowledge institutions. Cooperating institutions can apply forfinancial grants at the RTI/FI, and the grants subsequently finance the expensesincurred by the research and knowledge institutions whilst undertaking the

cooperative project. Typically grants amount to DKK 7-19 million (approx. 1-2million). Enterprises finance their own participation in the collaboration projectand minimum 50 per cent of the total budget of the project.

The results of the analysis can be summarized as follows: Of the enterprises thatparticipated in the IC scheme small enterprises have experienced significantincreases in the growth of gross profit and employment in association withprogramme participation. These results are robust to controlling for pre-participation growth and developments in the growth of enterprises in thecontrol group. It is important to note that these potential effects depend on the

size of the enterprises under consideration.The analysis finds posit ive potential gross profit effects (increase in growth) thatare significant at the five per cent significance level for enterprises with a grossprofit below 150 million DKK (approx. 20 million) the year before theprogramme. The analysis also finds potential employment effects for enterpriseswith less than 150 employees in the year before the programme.

For enterprises with a gross profit less than DKK 150 million in the year beforepart icipation, estimates suggest a total potential gross profit effect of approx. 20million DKK (approx. 2.5 million) over a ten year period, which should be relatedto own financing per firm averaging approx. 3 million DKK (approx. 370,000).


38/106

Page36

This result is robust changing sampling conditions and using enterprises thatapplied for funding and got their application rejected as an alternative controlgroup. Results for employment growth are not robust to using the alternativecontrol group, and should thus be interpreted as being more tentative.

It is important to note, that the size and statistical significance of these potentialeffects depend on the size of the enterprises under consideration. The analysisfinds posit ive potential gross profit effects that are significant at the five per centsignificance level for enterprises with a gross profit below 150 million DKK(approx. 20) the year before the programme. It also finds potential employmenteffects for enterprises with less than 150 employees in the year before theprogramme.

The analysis looks at the survival rates of participant enterprises and comparesthese with the survival rates of enterprises in the control group. The analysis

finds high survival rates (most likely due to IC participants and their controlcounterparts being relatively large) and no difference in the survival rates ofparticipants and non-participants.

Although this analysis is an evaluation of a specific research-businesscollaboration subsidy scheme, its results might be of general interest, as schemessimilar to the IC scheme have been implemented in a number of countries.

The results of the analysis with respect to gross profit developments of

participating enterprises compared to an identical control group is illustrated in

Figure 3.1. The figure is a graphical depiction of the absolute differences in grossprofit. As illustrated in the figure the analysis finds similar increases in grossprofit for participants and controls in the years before the base year. Thissuggests absence of any inherent differences in gross profit growth between thetwo groups of enterprises, which also indicates that the matching proceduresucceeded in finding a group of controls of similar inherent growth compared tothe group of participants.

After the base year, the gaps between the graphs widen, with participants havinglarger increases in gross profit compared to the controls. Under the assumption

that part icipants and controls would have continued their pre-part icipation (pre-base-year) growth patterns in the absence of the programme or would havechanged their growth patterns in the same fashion, the higher increase in thegroup of participants must measure positive effects of the programme onpart icipants employment and gross profit.

If pre-base-year trends are indeed equal, the graphs suggest participation in anICs to have a gross profit effect of approx. DKK 7.3 million five years and approx.DKK 16 million ten years a fter the base year.


39/106

Page37

-40000

-20000

0

20000

40000

60000

80000

-10 -8 -6 -4 -2 0 2 4 6 8 10 12 14

Years after the base year

FIGURE 1: Gross profit. Mean differencescompared tobase year. Firmswith grossprofit less than 150 millionDKK in the base year. 3-year moving averages.

Participants

Controls

Note that enterprises, to be observable long after the base year, need to haveparticipated or have to be selected as controls at the time of the start of theprogramme in the mid-nineties, and must not have left the data before the endof the observation period. Also, to be observable long before the base year,enterprises need to have started to participate or been selected late in theobservation period, and need to have existed long before the base year.

As a result, there are only a limited number of observations long before and afterthe base year, implying that findings based on these observations get

increasingly tentative at the left and the right sides of the figures. To establishevidence on whether or not the above differences in the two groups growthpatterns are statistically significant, i.e., too large compared to the generalvariation in the data to be considered coincidental, a regression m odel is used.

T he findings agree with the presence of considerable effects of the ICscheme onpart icipants increases on gross profit. Findings for both absolute and logarithmicdifferences are statistically significant at the 5 per cent significance level forenterprises followed over the first five years after the base year and sign ificant atthe five per cent level for percentage-wise increases for those enterprises whichare able to follow for at least ten years after the base year.

In a follow-up study Long run Effects of Public-private Research Joint Ventures:the Case of the Danish Innovation Consort ia Support Scheme , Ulrich Kaiser &Johan M. Kuhn (2011)- it is found, that program participation effects are instantfor annual patent applications and last for three years and that employmenteffects materialize after one year. The study shows that these overall results areprimarily driven by enterprises that were patent active prior to joining theshceme and that there are no statistically significant effect for large enterprises.


40/106

Page38

4 The knowledge-pilot schemeThis section presents the Danish Videnpilotordning the Knowledge pilotscheme (the VP scheme). In some countries this scheme is also called theInnovation assistant scheme . The section describes the scheme and presents

an analysis of the economic impact of the scheme on participating enterprisesprepared by the Centre for Economic and Business Research (CEBR).

4.1Description of the knowledge-pilot scheme

The VP scheme is a Danish subsidy scheme granted by The Danish Ministryof

Science, Innovation and Higher Education. The scheme aims at increasingknowledge dispersion throughout the economy by subsidizing the employmentof university graduates in small and medium size enterprises which do nottypically make use of the resources of these individuals.

The VP scheme was initiated in 2005. Under the scheme, enterprises with lessthan 100 employees and having little or no experience in hiring employees with ahigher education can apply for wage subsidies of up DKK 150,000 (approx.

20,000) over a twelve-month time period when hiring an employee with anacademic degree recognised by the Danish Agency for Science, Technology and

Innovation.

Until 2009, enterprises could apply for a knowledge voucher of an additionalDKK 50,000 (approx. 6,500) for services purchased or education at a number ofDanish research and education institutions, i.e. education and up qualificationactivities. Until early 2009, approx. 220 VP projects were completed, totallingapprox. DKK 15 million kr. (EUR 2 millions).

In the period between 2005 and 2009 425 Knowledge Pilot grants were approvedincluding an additional 425 knowledge vouchers . However, knowledgevouchers were only used in 48 cases (11.3 per cent). In 2010 and 2011additional 260 grants were approved.

Very easy application process

Application of maximum 1 page.Guaranteed answer with approval or rejection from the ministry within

20 working days.

Project can start 1 month after application.Fast lane with approval in the ministry within 1 week if necessary.

Max. page report to the ministry when the project is concluded


41/106

Page39

4.2The economic impact of the knowledge-pilotscheme

This section presents an analysis of the economic impact of the VP scheme onparticipating enterprises. It has been prepared by the Centre for Economic andBusiness Research (CEBR, 2010) at CBS in Copenhagen. T he analysis follows the127 enterprises that have part icipated in the VP scheme before 2007 usingenterprise level register data. It studie s these enterprises developments in threesuccess parameters in association with participation in the VP scheme: changesin gross profit, changes in enterprise level employment and changes in averagewage cost per employee. While employment is measured as the number ofemployees in a given enterpriseat a given point in time, gross profit is a measureof the enterprise s value creation, and average wage costs per employee can beinterpreted as a proxy for productivity per employee. T he firm survival is alsoanalyse d as an additional success parameter.

In terms of methodology, the analysis considers the increases in gross profit, thenumber of employees and wage costs between before and after running a VPproject. Moreover, we apply a matching procedure and identify a control groupof enterprises which do not participate in the scheme (non-participants), butwhich are similar to the participants in terms of size, industry, and region.

Again, we can use enterprise-level data to calculate the changes in gross profitand employment for the non-participants, allowing us to address the question ofwhether participants have experienced higher increases in the successparameters than would be expected on basis of the trajectories of the matchednon-participants. The results of the analysis can be summarised as follows:

(a) Over a three year-period, starting in the year before participation in the VPscheme, participating enterprises on average increased annual gross profitsby an addit ional DKK1.1 million (approx. 150,000) compared to non-

participants.(b)Enterprises that part icipated in the scheme did not experience higher growth

in the number of employees.(c) Average annual wage costs of enterprises participating in the scheme

increased by an additional DKK 24,000 (approx. 3,200) compared to non-

participants.(d)Enterprises that part icipated in the scheme had lower firm closure rates than

non-participants.

For these comparisons, any differences between the two groups of enterprisescan be interpreted as the causal impact of the programme on participatingenterprises under the assumption that the developments of participants and


42/106

Page40

non-participants would be symmetric in the absence of programmeparticipation.

It should, however, be noted that the relatively small number of observationsand large heterogeneity in the experiences of the different enterprises imply thatresults are not statistically significant, and should, consequently, be interpretedas being tentative. Still, the most qualified guess on the basis of the register datais that the participation in the VP scheme is generally associated with a highergrowth in gross profit. Given the high similarity between participating and non-participating enterprises, the growth difference in gross profit can be interpretedas the scheme s causal effect.

The finding of participating enterprises having larger increases in wage costs butnot in the absolute number of employees compared to non-participants could betaken as an indication of participating enterprises increasing their shares of

highly educated employees.

To address the potential problem that participating enterprises also would havehired highly educated employees in the absence of the scheme, there has beenlooked at the enterprises that found their application for participation in thescheme turned down by the ministry. As part of the evaluation the rejectedapplicants were contacted and asked whether or not they had hired a highlyeducated employee even though being denied financial support. The answers ofthis survey indicate that approximately one third of the rejected enterprisesended up hiring highly educated employees, which strengthens theinterpretation of the VP-scheme having a genuine impact on participatingenterprises employee composit ions.


43/106

Page41

5 The Danish Industrial PhD

ProgrammeThe Industrial PhD Programme was established in Denmark in 1970. It isinternationally recognised for its combination of business experience andacademic research. The programme has been evaluated several times and in2007 an impact assessment was conducted.

5.1Description of the PhD programme

An Industrial PhD is a three-year business-focused PhD project where thestudent is hired by an enterprise and enrolled at a university at the same time.T he enterprise receives a monthly wage subsidy of DKK 14,500 while theuniversity receives coverage for its supervising expenses. The PhD student worksfull time on the project and divides his or her time between the enterprise andthe university.In 2010, DKK 135 m illion (EUR 18 million) has been allocated fornew Industrial PhD projects. This is equivalent to app. 135 new PhDprojects.Accordingly, it is assumed that all qualified applications from the private sectorwill receive funding. Las t year, more than half of all applications were approved.

Easy application process

Guaranteed answer with approval or rejection from the ministry within45 working days.Project can start 2 month after application.Max. page report to the ministry every year if there are deviationsfrom the project description

T he programme s structure allows the integration of an academic researchproject into a practical business environment by placing the project firmly within

the enterprise organisation. It allows the PhD student to experience and learn

from two distinctly different working environments while creating a personalnetwork which spans them both. Thus, the programme has shown to be a veryeffective network promoter between the universities and the private sector.

The programme is open to projects within all scientific fields, all types ofenterprises, domestic and foreign, and candidates from all countries. However,the student must be employed in an enterprise branch located in Denmark. Theenterprise receives a wage subsidy of about EUR 1,950 per month or EUR 70,000for the entire three-year duration of the project, which usually corresponds toabout half the PhD student s wages. The university enrols the student and

receives a subsidy of between EUR 34,000 and EUR 48,000 to cover its variouscosts.


44/106

Page42

Applications are assessed by the Industrial PhD Committee, an advisoryinterdisciplinary committee appointed by the Danish Ministry of Science,Innovation and Higher Education. Table 5.1 shows the development inapplications submitted and approved. The activity drop in 2009 is due to theeconomic crisis.

Table 5.1 Applications submitted and approved, 2003-2010

2003 2004 2005 2006 2007 2008 2009 2010

Applicationssubm itted 88 89 115 130 174 192 184 179

Applicationsapproved 64 70 83 85 109 119 98 116

The Industrial PhD Programme receives applications from all fields of science.The submitted projects are t raditionally mainly from the fields of natural, healthand technical sciences. The number of projects within the fields of economics,social sciences and humanities has risen throughout the past few years for abroader academic distribution of Industrial PhD projects, cf. table 5.2:

Table5.2: research field distribution ofapproved applications, 2003-2010

YearHealth

sciencesNaturalsciences

Technicalsciences

Agr. andveterinary sciences

Economics,management and

organisation

Social

sciencesHumanities

2003 23 15 13 4 6 32004 19 3 30 2 2 6 82005 15 4 36 4 6 7 72006 18 14 34 2 5 9 32007 16 20 34 5 11 11 122008 9 20 55 5 8 10 122009 11 15 40 5 8 13 6

2010 19 14 43 12 6 15 7

5.2 The impact of the Industrial PhD programme

This section presents an analysis of the impact of the Industrial PhD programmeon part icipating researchers. It has been prepared by Oxford Research Companyand Centre for Economic and Business Research (CEBR) at CBS in 2007 and 2010-11 respectively .


45/106

Page43

5.2.1. The 2007-Oxford analysis impact onparticipating researchers

T heOxford analysis

followsthe persons involved in an Industrial PhD project in

the period 1994-2004 using personal level register data. It studies these personsdevelopments in several success parameters in association with participation inthe PhD scheme: salaries, employment, employment place and mobility changesEmployment is measured in terms of employment rates at a given point in time,employment place is a measure of the PhD candidates place of employmentbefore and after project end. Wage is measured in terms of average wage costswhich can be interpreted as a proxy for productivity per PhD employee.

In terms of methodology, the analysis considers the level of employment, wagelevels and places of employment for individuals part icipating in an Industrial PhDproject compared to individuals with a PhD not part icipating in an Industrial PhDproject. Moreover, we apply a matching procedure and identify a control groupof PhD students that do not part icipate in the scheme (non-part icipants), but aresimilar to the participants in terms of education, sex, age and region.

Again, we can use personal-level data to calculate the development in wages andemployment for the non-part icipants, allowing us to address the question ofwhether participants have experienced higher increases in the successparameters than would be expected on basis of the matched non-participants.

The results of the analysis with respect to employment is summarised as follows:

(a) Over a nine year-period, starting in the year of end of the Industrial PhDproject, participating individuals have a higher employment rate on averagecompared to non-participants with a PhD project.

(b) One year after the end of the project the employment rate for participatingindividuals were 90.1 percent and 84.4 percent for non-participants.

(c) Nine years after the end of the project the employment rate for participatingindividuals had increased to 96.1 percent and 91.5 percent for non-

participants. The development over the period is to be found in table 1

below.

For these comparisons, any differences between the two groups of PhD projectscan be interpreted as the causal impact of the programme on participatingpersons under the assumption that the developments of participants and non-participants would be symmetric in the absence of programme participation.


46/106

Page44

Table5.3. Employment rate for participants and non-participants

The results of the analysis with respect to wages can be summarised as follows:

(d)22 percent of Industrial PhDs have an annual income between 550,000 DKKand 1 million DKK. For ordinary PhDs only 18 percent have an income in thisinterval.

(e)24 percent of Industrial PhDs have an a

rd and innovation in denmark_7 october 2011

Documents