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18 January 2014

Regional Innovation Monitor Plus Regional Innovation Report of Castile-Leon

To the European Commission

Enterprise and Industry Directorate-General

Directorate B – Sustainable Growth and EU 2020

Regional Innovation Monitor Plus


Regional Innovation Report of Castile-Leon

technopolis |group| in cooperation with

Adriana Trapa

Zabala Innovation Consulting S.A.

Regional Innovation Monitor Plus 3

Table of Contents

Table of Contents 3

Table of Figures 4

Preface 5

1. Executive Summary 7

1.1 Main Trends and Challenges in the Regional Innovation System 7

1.2 Innovation Policy Governance 8

1.3 Innovation Policy Instruments 9

1.4 Conclusions: future actions and opportunities for innovation policy 9

2. Main Trends and Challenges in the Regional Innovation System 9

2.1 Recent trends in economic performance 9

2.2 Recent trends in regional innovation performance 13

2.3 Identified challenges 19

3. Innovation Policy Governance 20

4. Innovation Policy Instruments and Orientations 26

4.1 The Regional Innovation Policy Mix 26

II Framework Agreement on Innovation and Industrial Competitiveness in Castile-Leon 28

Regional Scientific Research Technological Development & Innovation Strategy of Castile-Leon 2007-2013 29

Regional Strategy for the Digital Information Society of Castile-Leon 2007-2013 (ERSDI). 30

Programme for financial costs incentive 31

European Regional Development Fund (ERDF) (2007-2013) 31

4.2 Appraisal of Regional Innovation Policies 35

4.3 Good practice case 38

4.4 Towards Smart Specialisation Policies 39

4.5 Possible Future Orientations and Opportunities 42

Appendix B Stakeholders consulted 48

Appendix C Statistical Data 49


Table of Figures

Figure 1: Sectoral distribution of the GVA in Castile-Leon............................................. 9

Figure 2: Industrial Sector Structure..............................................................................10

Figure 3: Demographic balance and crude rates............................................................10

Figure 4: GDP at current market prices (€m) ................................................................ 11

Figure 5: GDP at current market prices (Euro per inhabitant) ..................................... 11

Figure 6: GDP per capita................................................................................................. 11

Figure 7: Unemployment rate......................................................................................... 11

Figure 8: Level of external openness .............................................................................. 11

Figure 9: Economic Indicators .......................................................................................12

Figure 10: Technological Effort Evolution......................................................................13

Figure 11: GERD and GDP trends...................................................................................13

Figure 12: GERD 2010-2011 ...........................................................................................14

Figure 13: Evolution of the indicators of the strategic ERIDI goals ..............................14

Figure 14: Indicators of the EUE goals ........................................................................... 15

Figure 15: Innovation Performance Indicators ..............................................................16

Figure 16: Patent applications to the EPO......................................................................16

Figure 17: Share of People involved in life-long learning...............................................16

Figure 18: Technological & non-technological innovators............................................. 17

Figure 19: R&D expenditure per sector of performance ................................................18

Figure 20: SWOT analysis.............................................................................................. 22

Figure 21: Innovation Policy Institutional Set-Up and Available Human Resources .. 23

Figure 23: Innovation Policy Evolution..........................................................................27

Figure 24: ERIDI 2007-2013 Resources ....................................................................... 29

Figure 25: Existing regional innovation support measures .......................................... 33

Figure 26: Specific ERIDI objectives 2011-2013 ........................................................... 35

Figure 27: GERD vs. Employment................................................................................. 38

Figure 28: RIS3 main objectives.................................................................................... 40

Figure 29: Castile-Leon RIS3 Industrial Clusters ..........................................................41

Figure 30: Castile-Leon RIS3 Regional Specialisation Patterns....................................41


Preface

Launched in 2010, the Regional Innovation Monitor1 continues to be one of the flagship initiatives of DG Enterprise and Industry of the European Commission. From the outset, it aimed at supporting sharing of intelligence on innovation policies in some 200 regions across EU20 Member States.

RIM Plus aims to help regions to improve their innovation policies based on better and harmonised policy intelligence. The new contract aims to contribute to the development of more effective regional innovation policies and promote policy learning.

Building upon the experience gained and results obtained during the implementation of the RIM in the period 2010-2012, the RIM Plus service evolves towards providing practical guidance to regions on how to use the collected information, establishing a network of regional experts with thematic specialisation, and organising specialised workshops taking into account the relevance and potential interest among the regional innovation policy makers.

RIM Plus covers EU-20 Member States: Austria, Belgium, Bulgaria, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, the Netherlands, Poland, Portugal, Romania, Slovakia, Spain, Sweden and the United Kingdom.

This means that RIM will not concentrate on Member States where the Nomenclature of territorial units for statistics NUTS 1 and 2 levels are identical with the entire country (Estonia, Latvia, and Lithuania), Malta which only has NUTS 3 regions, Slovenia which has a national innovation policy or Cyprus and Luxembourg which are countries without NUTS regions.

The main aim of 30 regional reports is to provide a description and analysis of contemporary developments of regional innovation policy, taking into account the specific context of the region as well as general trends. All regional innovation reports are produced in a standardised way using a common methodological and conceptual framework, in order to allow for horizontal analysis, with a view to preparing the Annual EU Regional Innovation Monitor Plus report.

European Commission official responsible for the project is Alberto Licciardello ([email protected]).

The present report was prepared by Adriana Trapa ([email protected]). The contents and views expressed in this report do not necessarily reflect the opinions or policies of the Regions, Member States or the European Commission.

The Regional Innovation Access Point and Knowledge Hub presenting further details of the regional innovation measures, policy documents and regional organisations in Castile-Leon is accessible through the RIM Plus online inventory of policy measures here: http://ec.europa.eu/enterprise/policies/innovation/policy/regional-innovation/monitor/region/select

Copyright of the document belongs to the European Commission. Neither the European Commission, nor any person acting on its behalf, may be held responsible for the use to which information contained in this document may be put, or for any errors which, despite careful preparation and checking, may appear.

1 http://ec.europa.eu/enterprise/policies/innovation/policy/regional-innovation/monitor/


1. Executive Summary

1.1 Main Trends and Challenges in the Regional Innovation System Located in the northwest of the Iberian Peninsula, Castile-Leon is a large inland region that covers an area of 94,225 km2 and occupies almost one fifth of Spain. Divided in nine provinces, it is the biggest region of the country and the third largest in the European Union. The region is sparsely inhabited, with a population density four times lower than the EU28 average (26.7 inhabitants per km2), a mean age of 45.6 years and a natural increase of -9,417 in 2012. In January 2013, Castile-Leon represented 5.39% of the Spanish population, with 2,517,157 inhabitants, and contributed to 5.35% of the Spanish GDP.

The economy of the region during the first half of the 20th century was mainly based on the primary sector. Progressively, the area experienced a slow transformation from the agrarian structure towards an industrial modernisation that would boost the economic growth during the following decades and would lead to the actual service sector productive structure.

The number of businesses in Castile-Leon has grown progressively in the recent years. Many small firms currently coexist with some large companies with major social and economic influence in the region. Castile-Leon has succeeded in attracting large companies of strategic sectors with potential to boost business investment in innovation directly and indirectly that have generated a prosperous auxiliary industry.

The current economic crisis has produced a recession and an increase in redundancy of workforce in Castile-Leon, although the percentage of unemployment in the third trimester of 2013 was 20.94%, below the Spanish average of 25.98%.

The higher education system of Castile-Leon is comprised of eight universities, all of which have stable research groups working both on basic research (medicine, veterinary, biotechnology) and applied research (engineering). From 2008 onwards, top-level research teams, called Groups of Excellence, were created by the regional government, as a means of stimulating quality research, optimising the access to the available resources and results and promoting its visibility.

Understanding the evolution of the regional innovation is crucial to evaluate the efficacy of the local policies. Since 2011, the priority of the Castile-Leon Government is the realignment and harmonisation of institutional and operational arrangements in order to adapt the RDI strategy to the actual economic and social situation.

The current policies developed with the active participation of the regional science, technology and business system aim to establish an innovation-based approach that improves competitiveness levels in the region, stimulates the creation of start-ups, fosters the collaboration between the different stakeholders involved and attracts knowledge-intensive business projects. These goals are designed to stimulate economic growth through improvement of private sector performance, continuous enhancement of innovation and research strategies and the creation of quality employment.

• Challenge 1: Boost the regional effort in R&D

Innovation investment is the key to growth in Castile-Leon. Building an innovation ecosystem that increases the innovation capacity is essential to capture new trends for the consolidated industrial sectors, take advantage of emerging technologies, re-energize the manufacturing sector, provide opportunities to disconnected populations, and accelerate the pace at which businesses grow and create jobs.


• Challenge 2: Promote highly innovative industrial companies

Sustainable regional development based on innovation and excellence requires a growing number of firms, which in turn will provide more and better jobs and increase the region’s competitiveness. Hence, the importance of promoting a greater business culture and of providing support for the creation of new innovative businesses.

Parallel to the creation of knowledge based firms, another important task is to foster the upgrading of industrial clusters to innovation clusters by promoting the establishment of industrial technology alliances, facilitating business-research-education collaboration, as well as networking and interaction among key players of the innovation system.

Transforming Castile-Leon into a knowledge region where all the players in the research and production field are connected and capable of responding to their needs in real time would allow the different agents to cooperate and share the results of their RDI activities. By creating, developing and consolidating entrepreneurial capabilities and support infrastructures in the region, it will be possible to generate information and technologies that provide the local businesses with a competitive advantage in relation to their competitors.

• Challenge 3: Increase the excellence and applicability of scientific research

Most of the scientific knowledge of Castile-Leon is produced by universities, science and technological centres, and other academic and government research sectors. But, the gap between early research and the real marketplace is growing wider, affecting both the significance of the chosen topics for early research as well as the proper influence of market and implementation realities for guiding research and innovations over time.

The main challenge for Castile-Leon R&D stakeholders is to rapidly bring products to market and commercialise the fundamental innovations originated in the universities and research centres. By creating efficient and flexible alliances that extend partnerships toward industry and government, to include companies of varying sizes working together with the academic community, the national laboratory system, and not-for-profit organisations, the R&D investments can have broad implications for the economy of Castile-Leon.

1.2 Innovation Policy Governance The Law 17/2002 for the General Promotion and Coordination of the Scientific Research and the R&D and Innovation Activities in Castile-Leon, still in force, created the Commission for Coordination on Science and Technology as a collegiate interdepartmental body chaired by the President of the Government of Castile-Leon. The Commission is attached to the Regional Ministry of Economy and Treasury and its activities are devoted to the surveillance of the regional R&D, the Innovation and Information Society coordination, planning, and monitoring and multiple evaluation tasks.

The Commissioner for Science and Technology is designated by the President of the Government of Castile-Leon in order to monitor initiatives, foster participation and coordination of different agents, and ensure the execution of the budget planned for the regional RDI strategy.

The Agency for Innovation, Funding and Internationalisation of Castile-Leon (ADE) is a regional public entity that seeks to be the main engine of economic development activity and production system of Castile-Leon. The mission of ADE is to support companies in their quest for sustainable competitiveness by offering integrated solutions tailored to their individual and/or collective needs. ADE uses public instruments, both expertise and financial resources, to help companies in the design and implementation of integral actions to improve their competitiveness.


1.3 Innovation Policy Instruments In 2007, the Regional Community of Castile-Leon launched the Regional Scientific Research Technological Development & Innovation Strategy of Castile-Leon for the 2007-2013 period (ERIDI 2007-2013), based on the homonymous Strategy designed for the period 2002-2006. This Strategy was the tool designed by the regional government to articulate and conduct the RDI activities of the next seven years.

The ERIDI was supplemented by the Regional Strategy for the Digital information Society of Castile-Leon 2007-2013, the Programme for financial costs incentives, and the innovation priority axes of the ERDF operational programme 2007-2013. The regional government is about to approve its RIS3 which implies a substantial regional step forward in defining patterns of specialisation and innovation priorities compared to past horizontal or cross-sector innovation support approaches.

1.4 Conclusions: future actions and opportunities for innovation policy Castile-Leon has made significant efforts in adapting the financing mechanisms to the business needs, identifying the technological offer and bringing it to the productive fabric of the region, fostering the collaboration between stakeholders in order to develop RDI projects, stabilising, recognising and consolidating the researchers career and the entrepreneurship.

The possible future orientations and opportunities of Castile-Leon should address and overcome some persisting weaknesses, such as: the geographical concentration of the population and industrial activity in the region’s large cities, the low number of high and mid-high tech companies and related manufacturing sectors, and the concentration of regional innovative activity in a limited number of companies, the business sector’s limited culture of innovation, insufficient interaction between companies and research centres in RDI activities and the low number of patents exploited by companies or research centres in the region.

2. Main Trends and Challenges in the Regional Innovation System

2.1 Recent trends in economic performance The economic activity of Castile-Leon during the first half of the 20th century was mainly based on the primary sector. In the last thirty years, accompanied by internal migrations towards the metropolitan areas, the region evolved from a productive structure based on the agricultural sector towards industrial modernisation.

Figure 1: Sectoral distribution of the GVA in Castile-Leon

Sectoral distribution of the GVA in Castile-Leon % 1982 1990 2009 2010 2011 2012

Agriculture 30.4 19.9 6.6 6.4 6.6 7.6 Industry 19.4 20.5 17.6 16.0 15.5 17.7 Construction 9.2 10.1 10.4 9.7 8.3 5.3 Services 40.5 49.5 65.4 67.9 69.6 69.4

Source: National Institute of Statistics of Spain

The Gross Value Added (GVA) of the primary sector of Castile-Leon registered an increase of 4.5% in the first quarter of 2013, due to the good results recorded by the agricultural segment, while the figure of the whole Spanish sector was -0.4%.


Figure 2: Industrial Sector Structure


In July 2013 compared with June 2013, seasonally adjusted industrial production2 fell by 1.5% in the euro area (EA17) and by 1.0% in the EU27, according to estimates from Eurostat. In the first quarter of 2013, the Industrial Production Index (IPI) of Spain registered an annual rate of 0.1%. The industrial sectors of Capital goods (5.7%) and Non-durable consumer goods (1.9%) recorded positive annual variations3. So far in 2013 the IPI of Castile-Leon fell a 5.5%i, dragged mainly by the decrease of the productive activity of the energy sector. The GVA of the construction sector continued slumping in the first quarter of 2013, registering a reduction of 6%. in Castile-Leon and of 5.3% in Spain.

The Retail Trade Index (RTI) of Castile-Leon recorded in the first quarter of 2013 a steep drop of 7.7%4, in contrast to the data of the tourist industry that registered an increase of the overnight stays of 4.4%. The volume of road freight traffic plummeted by a 27.5% until March 2013. All these indicators, added to a weak financial activity, contributed to the regression of 0.9% of the service sector of Castile-Leon in the first quarter of 2013. The figure of the whole Spanish sector was -1.3%..

The National Institute of Statistics of Spain (INE) predicted in 2011 that if the current demographic trends remained unchanged, the population of Castile-Leon would suffer a constant decline of around 10% per year. The latest data published by the Eurostat, indicated that Castile-Leon is following the predicted trends: the population has been shrinking in the last years due to a slow-down in the birth rate, poor perspectives of finding an employment in the region, the aging of the population that has increased the number of deaths, a lower level of immigration flow and a tendency of the population to emigrate abroad.

Figure 3: Demographic balance and crude rates

Demographic balance and crude rates (total population) Data on 1 January 2009 2010 2011 2012 2013i

EU27 498,978,262 500,337,335 501,987,078 503,297,336 502,807,284 Spain 46,239,273 46,486,619 46,667,174 46,818,219 46,704,308 Castile-Leon 2,510,545 2,499,155 2,491,409 2,479,326 : Interannual variation -4.50% -3.10% -4.90% :

Source: Eurostat

In the last quarter of 2011, Spain entered into recession, driven by inefficiencies in the labour market, a lower public expenditure and deteriorated credit conditions, while the Euro area sovereign-debt crisis intensified and external demand weakened. As a reflection of this complicated economical situation, the Real Gross Domestic Product (GDP) at current market prices of Spain contracted by 1.6% during 2012.

2 Industrial production excluding construction (% change compared with previous month) 3 Source: Instituto Nacional de Estadística (INE) 4 Source: Dirección General de Presupuestos y Estadística de la Junta de Castilla y León


The economy of Castile-Leon followed the same trend resulting in a decline of -1.5% of the regional GDP during 2012, remaining far away from the -0.4% of the EU27. Consequently, the GDP per capita of Castile-Leon shrunk a 0.9% during the period.

Figure 4: GDP at current market prices (€m)

Gross domestic product (GDP) at current market prices Millions of Euros 2009 2010 2011 2012 2013i

EU27 11,770,968 12,292,740 12,667,100 12,923,838 13,111,506 Spain 1,046,894 1,045,620 1,046,327 1,029,002 1,030,523 Castile-Leon 54,755 54,891 55,846 55,021 : Inter-annual variation -3.10% 0.20% 1.70% -1.50% :

Source: Eurostat

Figure 5: GDP at current market prices (Euro per inhabitant)

Gross domestic product (GDP) at current market prices Euro per inhabitant 2009 2010 2011 2012

EU27 23,500 24,500 25,200 25,600 Spain 22,800 22,700 22,700 22,300 Castile-Leon 21,809 22,001 22,484 22,289

Inter-annual variation -3.20% 0.90% 2.20% -0.90% Source: Eurostat

Figure 6: GDP per capita

Source: Eurostat

All these factors are the cause and consequence of the negative trend of the Annual Variation Rate of Employment in Castile-Leon, which has fallen from 23.3% in 2011 to 17.9% in 2012, leaving the regional unemployment rate at 20.8%, still under the national average (25%). The male employment rate registered in 2012 rose up to 20.2% in 2012, while the female employment registered a 15.4% (34.8% and 30.8% in EU27 respectively).

Figure 7: Unemployment rate

Unemployment rate (annual average) % 2009 2010 2011 2012

EU27 9.0 9.7 9.7 10.5 Spain 18.0 20.1 21.7 25.0 Castile-Leon 14.2 12.7 17.2 20.8

Source: Eurostat

In 2012, the regional Administration laid the foundations that would allow the implementation of the III Business Plan for the Internationalisation of Castile-Leon 2013-2016. This plan, designed to support entrepreneurship, innovation and job creation, has boosted the internationalisation degree of the local economy increasing the number of export companies in more than a 1,500% in a decade. Currently more than 4,500 regional enterprises from 25 different sectors have presence in foreign markets in 2012.

Figure 8: Level of external openness

Level of external openness % of the GDP 2008 2009 2010 2011 2012

Spain 43 35 41 45 45


Castile-Leon 33.0 31.5 35.4 40.1 41.3 Exporting capacity5 5.10% 5.90% 5.60% 5.80% 5.30% Source: Report on the Economic and Social Situation of Castile-Leon

Spanish exports registered in 2012 the best figure of the historical series ever recorded, reaching €222,643.9m, that stands for 3.8% more than the previous year. The Spanish trade balance reduced its deficit in a 33.6% compared to 2011, averaging a negative €30,757.4m. During 2013 the exports volume has continued growing, due mainly to the boost of sales of organic chemical products.

According to the State Tax Administration Agency's Department of Customs and Special Taxes of Spain, during the year 2012 the value of the exports of Castile-Leon amounted €12,078m, and the imports €10,797m, involving a trade surplus of €1,281m (+1.3% in relation to 2011), and a decline of 4.2% of the coverage rate, compared with the previous year. France and Germany were both the main destinations of the regional export (28.3% and 9.9% respectively) and import (43% and 11.7% respectively) operations during 2012. During 2013 the export volume of the region has stagnated.

Concerning the type of commodities exported and imported Castile-Leon trades mainly with articles related to the transports, machinery, electrical and mechanical appliances, base metals and products of the chemical industry.

Figure 9: Economic Indicators

Source: Eurostat

Although during the last years, there has been a trade surplus in the external sector for Castile-Leon, the global contraction of the Spanish economy combined with a weak internal demand, a reduction of the industrial activity, a sharp drop of the household disposable income and a consumption crisis (2012 annual final consumption rate of -1.6% for Castile-Leon) have acted as a drag on the growth of region.

5 Total exports of Castile-Leon as a percentage of the total Spanish export sales


While right now the forecast risks are very high, due to the amount of existing uncertainties, the current perception is that in 2014 the economy of Castile-Leon could improve levels of activity by 1%.

2.2 Recent trends in regional innovation performance

Castile-Leon has been steadily reducing the gap with the EU27 average technological effort, and therefore increasing the numbers in absolute terms. In a decade, GERD multiplied by more than 3.5, although during the past 3 years the economic crisis had a dramatic impact on this indicator, and technological effort has contracted to 2006 levels.

Figure 10: Technological Effort Evolution

Source: Eurostat

According to the National Institute of Statistics of Spain (INE), Castile-Leon’ GERD amounted €608.2m in 2011, compared to the €574.4m invested in 2010:

Figure 11: GERD and GDP trends

Source: Eurostat


Source: Eurostat

The national R&D expenditure for 2011 also shrank from 1.54% to 1.33% of the GDP (1.94% for the U27). The expenditure on innovation activities of the Castile-Leon businesses stands for 3.45% of the national total. This percentage is still low compared to the regional GDP (5.36%), and remains below the national estimate of 4.05%.

Figure 12: GERD 2010-2011

2010 2011 R&D Innovation R&D Innovation M€ % GDP M€ % GDP M€ % GDP M€ % GDP Spain 14,589 1.39 16,171 1.54 14,184 1.33 14,756 1.39 Castile-Leon 608 1.09 584 1.05 574 1.00 508 0.91


As shown by Figure 13, as a consequence of the economic crisis, all the strategic indicators of R&D have diminished in 2011, distancing the regional’s performance from the objectives planned in the original regional strategy. The only exception to this trend is the private expenditure on R&D activities (BERD per GDP), which has kept growing in the last years despite the adverse environment.

The economic return on Castile-Leon participation in EU Framework Programme for R&D stands out positively, since it has been augmenting gradually over the last years, reaching €13.35m in 2011. It is also an encouraging fact that the amount of people dedicated to R&D activities has returned to an ascending path in the last year.

Figure 13: Evolution of the indicators of the strategic ERIDI goals

Indicators of the goals of the Regional Scientific Research Technological Development & Innovation Strategy of Castile-Leon (ERIDI)6

Goal Data Indicators 2013 2009 2010 2011 GERD per GDP 2% 1.12% 1.06% 1% BERD per GDP (as percentage of GERD) 63% 53% 53.7% 54.5% GE on technology innovation activities per GDP 2.50% 1.42% 1.05% 0.88% Public sector: publications per 100 researchers 60 53 58 57.6 Knowledge-based companies spin-off from universities, technological and research centres

25 12 14 9

Knowledge-based companies older than 3 years, spin-off from universities, technological and research centres

80 60 83 103

Personnel dedicated to R&D activities per thousand of the total employed population

12% 9.99% 9.76% 9.89%

Economic return on Castile-Leon participation in EU Framework Programme for R&D7

2.50% 0.96% 2.26% 2.43%

6 Source: Consejería de Economía y Empleo de la Junta de Castilla y León


Resources mobilized for R&D activities (€m) 14.33 12.43 9.89 9.12 GERD carried out by non-HAMHT companies as a percentage of the total sectorial investment

50% 32% 34% 34.9%

Personnel employed by HAMHT companies, as a percentage of the total

75 59 59 56

Human resources dedicated to science and technology, as percentage of the working population

43% 39.3% 38.8% 39.3%

Annual income on R&D activities from universities and technological centres (€m)

70 507 501 481

Percentage of exports of high-tech products 72% 66% 64.8% 64.5% Source: 2011 Follow-up Report of the ERIDI 2007-2013

Additionally, there has been a consolidation of knowledge transfer structures and a boost in the creation of new clusters and spin-off companies.

Figure 14: Indicators of the EUE goals

Indicators of the strategic goals of the University – Business Strategy for Castile-Leon 2008-20117

Goal Data Indicators 2013 2007 2008 2009 2010 2011 National patents applied by universities and technological centres

40 12 27 24 32 35

Knowledge transfer experts for every 100 researchers

1.3% 0.39% 1.01% 1.18% 1.4% 1.29%

Percentage of research groups collaborating with companies

15% 11.7% 11.8% 11.6% 17.5% 15.8%

Share of the R&D budget spent by universities and technological centres

25% 9.2% 8.4% 6.6% 8.7% 6.4%

Number of new clusters 400 63 151 226 274 362 Source: 2011 Follow-up Report of the ERIDI 2007-2013

Castile-Leon has made great efforts during the last decade to meet the convergence criteria of the EU. Although in just a few years, the region has managed to narrow the divergence with the leading areas, it still stays scientific and technologically behind of the EU27 average and far away from the Lisbon treaty target of 3% GERD per GDP.

7 Percentage on the national total


Figure 15: Innovation Performance Indicators

Source: Eurostat

The patent applications ratio for Castile-Leon is still far below the UE average, and has fallen abruptly in the recent years:

Figure 16: Patent applications to the EPO

Patent applications to the EPO 2007 2008 2009 2010 2011

EU27 57,716.45 56,021.10 55,673.57 54,921.12 53,989.34 per million of inhabitants 116.53 112.56 111.42 109.6 107.45

Spain 1,380.32 1,415.95 1,512.71 1,567.84 2,460 per million of inhabitants 31.04 31.27 33.01 34.09 35.02

Castile-Leon 38.89 34.19 35.87 16.95i : per million of inhabitants 15.64 13.66 14.29 6.78i :

Source: Eurostat

According to the Eurostat for the EU27 as a whole, just over one third (34.6 %) of 30–34 year-olds had completed tertiary education in 2011. By the same year, a 40.1% of the Spanish population and a 33.7% of the population of Castile-Leon had attained this level of education8.

In 2012, the share of people involved in life-long learning (aged 25 to 64) in Castile-Leon was above the percentage of the population that participated in education and training in the Eu27.

Figure 17: Share of People involved in life-long learning

Participation of adults aged 25-64 in education and training % 2008 2009 2010 2011 2012

EU27 9.4 9.3 9.1 8.9 9.0 Spain 10.4 10.4 10.8 10.8 10.7 Castile-Leon 11.1 10.1 11.2 11.4 11.2

Source: Eurostat

8 Source: Secretaría General Técnica del Ministerio de Educación, Cultura y Deportes


According to the R&D National plan, the total financing awarded to Castile-Leon in 2011 amounted €147.7m from the total €3,323.7m available for the whole country. These funds were allocated in 755 actions from which €24.3m where spent on strategic sectors set by the central Government, such as health, energy and climate change and IT.

Source: Spanish Foundation for Science and Technology (FECYT)

The outcomes of the Entrepreneurial Innovation Surveys show that the average business expenditure in innovation in Castile-Leon decreased by a 12.98% in 2011, falling from €584.2m to €508.4m, compared with a decline of -8.75% in Spain. This figure represents a decrease of 1.05% from 2010 and represents the 0.88% of the regional GDP. Despite this reduction, the business participation in the regional R&D expenditure reached 54.5% that is 2.2% above the national average.

Figure 18: Technological & non-technological innovators

Source: Eurostat

Companies of High and Medium-High Technology sectors (HAMHIT), which represent less than 2% of total regional companies of this group, accounted in 2011 for more than 65% of the business expenditure on R&D.

The contribution of the Higher Education sector to the R&D expenses has been reduced by 4.85%, from €215.2m in 2010 to €204.7m in 2011, although its share on the total R&D expenses has been increased to a 35.6%. The share of the Higher Education sector on the total R&D expenses of Spain was only a 28.2% for the same year (€4,002m).


Figure 19: R&D expenditure per sector of performance

Source: Eurostat

Source: Eurostat

Source: Eurostat

Source: Eurostat


2.3 Identified challenges

Castile-Leon has made significant efforts in adapting the financing mechanisms to the business needs, identifying the technological offer and bringing it to the productive fabric of the region, fostering the collaboration between stakeholders in order to develop RDI projects, stabilising, recognising and consolidating the researchers’ career and the entrepreneurship.

Nevertheless, there are still some persisting weaknesses that should not be ignored, and should be addressed, such as: the geographical concentration of the population and industrial activity in the region’s large cities, the low number of high and mid-high tech companies and related manufacturing sectors, and the concentration of regional innovative activity in a limited number of companies, the business sector’s limited culture of innovation, insufficient interaction between companies and research centres in RDI activities and the low number of patents exploited by companies or research centres in the region.

Challenge 1: Boost the regional effort in R&D

The economic structure, the composition of the industrial fabric, the geographical conditions, the resource endowments, the infrastructures, the level of socioeconomic development and the institutional environment predetermine innovation in Castile-Leon.

The modernisation of the economic structure of the region cannot rely exclusively on the improvement of the competitiveness of the industry; it requires also a technologically savvy population as well as a pervasive interest in change and the social innovations that bring change about.

The innovation awareness should start by the education: the creation, diffusion and application of knowledge rely on broad and relevant education as well as on the development of wide-ranging skills that complement formal education. Training policies should help foster an entrepreneurial culture by instilling the skills and attitudes needed for creative enterprise. In this sense, regional universities may play an essential role: the education and training need to be adapted to ensure the independence, competition, excellence, entrepreneurial spirit and flexibility of the students.

Regional firms are called to play an essential role amidst this innovation ecosystem to translate good ideas into jobs and wealth. The governmental measures should underline the value of innovation within the companies by helping them design RDI strategies that enhance the production processes and increase the profitability of the operations in the long run.

But from the point of view of the companies, investments in R&D are risky. The regional government support is crucial for those sectors, such as the biotech or the automotive industry, where the barriers of innovating are high: economic returns from investments in research or pre-commercial R&D may be many years away.

In this regard, the current policies designed by the government of Castile-Leon should aim to fill the gap between the level of profitable private R&D investment and the expenditure in innovation activities that maximise the external benefits for the society. These policies should foster the private expenditure in basic R&D structures and the education of human capital, while enhancing the commitment of the agents involved in R&D processes in order to attract and create new innovators.

The government of Castile-Leon should implement an adequate R&D strategy that involves all the different agents of the region in the creation of a fertile ground for innovation and the development of new technologies and new economic models.

Challenge 2: Promote highly innovative industrial companies

If a knowledge-based economy is to bid for a successful long-term growth, it needs a pool of competitive businesses. In an uncertain economic environment, innovation is an important driver of growth. But the challenge for the companies is to create values


from new ideas while maintaining a sustained activity, minimising inefficiencies and boosting profits. Sustainable regional development based on innovation and excellence requires a growing number of firms, which in turn will provide more and better jobs and increase the region’s competitiveness.

A sector-based approach is needed to deal with consolidated industrial sectors essential to the region and with traditional sectors located in peripheral and rural areas, while making a determined bid to engage with knowledge-based sectors that will facilitate the construction of competitive advantage in Castile-Leon.

Entrepreneurs are particularly important actors in innovation. Simplifying and reducing start-up regulations and administrative burdens and relaxing the tax climate can enhance the capacity of entrepreneurs to innovate. The regional government should ensure that financial markets continue to provide sufficient room for healthy risk taking, long-term investment and entrepreneurship; and the labour market policies should provide the flexibility needed to reallocate resources from declining to innovative firms, along with support for lifelong learning and re-skilling of workers.

Connected to the first challenge, it is important to enhance the upgrading of industrial clusters to innovation clusters by promoting the establishment of industrial technology alliances, facilitating business-research-education collaboration, as well as networking and interaction among key innovation players. Transforming Castile-Leon into a knowledge region where all the players in the research and production field are connected to a dynamic network capable of responding to their needs in real time, would allow the different agents to cooperate and share the results of their RDI activities.

By creating, developing and consolidating entrepreneurial capabilities and support infrastructures in the region, it will be possible to generate the information and technologies that provide the local businesses with a competitive advantage.

Challenge 3: Increase the excellence and applicability of scientific research

Innovation and R&D activities require public and private investment in supporting infrastructure and networks. Most of the scientific knowledge of Castile-Leon is produced by universities, science and technological centres, and other academic and government research sectors. But, the gap between early research and the real marketplace is growing wider, affecting both the significance of the chosen topics for early research as well as the proper influence of market and implementation realities for guiding research and innovations over time.

The main challenge for the R&D stakeholders is to rapidly bring products to market and commercialise the fundamental innovations originated in the universities and research centres. By creating efficient and flexible alliances that extend partnerships toward industry and government, to include companies of varying sizes working together with the academic community, the national laboratory system, and not-for-profit organisations, the R&D investments can have broad implications for the economy of Castile-Leon.

The RDI activity in Castile-Leon entails businesses assuming strategic leadership, taking as their principal reference the human resources on which their activity is based, and the elimination of bottlenecks in the transfer of knowledge from the places where it originates to production sectors.

3. Innovation Policy Governance

Spain is among the most decentralized countries in the world, where the regional governments in Spain manage almost 36% of consolidated public expenditure. The Spanish state decentralisation is formed by 17 Autonomous Communities that operate under the rules of the tax basket and the interregional solidarity system: vertical fiscal imbalances across levels of government are addressed with an adequately designed system of grants.


With the third reform of the Autonomy Statute, approved in the Parliament of Castile-Leon on 21 November 2007, Castile and Leon achieved the highest levels of self-government permitted under the current constitutional framework. As a consequence, the Government of Castile-Leon is part of the National vertical structure of government but enjoys an ample flexibility for regional self-governance.

The budget allocated to finance the different R&D and innovation aid programmes is detailed in the yearly General Budget of Castile-Leon, and is regularly complemented with additional funds coming from the Central Government and from the ERDF (European Regional Development Fund) of the European Commission.

Innovation policies in Castile-Leon had their origin in 1983 with the approval of the Autonomy Statute and the publication, that same year, of the Order of the Regional Ministry of Education and Culture on Research Incentives. Since then the Directorate-General of Industry and Technological Innovation of the Government of Castile-Leon has independence in the design and execution of innovation support measures, provided that it respects the Spanish General Act for Subventions and the thresholds of aid’s maximum intensity established by the Community Framework for State aid on R&D and innovation.

In 1992, the Government of Castile-Leon, conscious of the positive impact investments in R&D and innovation have in the long term for the economy, created the Technological Centres Network associated to Castile-Leon (RETECAL) and launched for the first time a set of mechanisms designed to establish a framework of action to facilitate the development and incorporation of technological research and development activities in the regional economy. However, the first regional Government assent to innovation gave priority to the promotion of support infrastructures over other measures that would have provided sustainable competitiveness to the regional businesses.

Designed in accordance with the social, economic and cultural objectives of Castile-Leon, the Law 17/2002 for the General Promotion and Coordination of the Scientific Research and the R&D and Innovation Activities in Castile-Leon, still in force, established the need for a regional RDI strategy as a tool to stimulate innovation activities in the region and coordinate all the initiatives already implemented by different local public bodies.

In this framework of public RDI policies, a number of public innovation support organisations have been developed in the different areas of the science and technology system in Castile-Leon. Although the level of sophistication of these structures and their scientific, technical and/or business orientation varies, all of them have contributed to a greater or lesser extent to bringing about the present RDI environment.

Additionally, external capital is actively contributing to the modernisation and technological development of the region. Around 1.5% of the regional companies invest more that 65% of the business expenditure in R&D of Castile-Leon. This high level of funds spent by the business sector in innovation activities implies a competitive advantage for the industry of Castile-Leon but this high spending capacity is mainly linked to economic sectors led by large corporate groups set up by foreign investors, such as the automotive industry. This implies that an important amount of R&D carried out by the private sector is dependent on centres that have external decision-making actors.

Nowadays Castile-Leon has sufficient instruments to foster the development of the region. The main stakeholders involved in the innovative and technological activity of Castile-Leon are:

• 8 universities, • A broad network of Technological Centres and Public Research Organisations

(PRO), that includes 5 Research Institutes attached to the Superior Council for Scientific Research (CSIC),

• Several laboratories and Research Centres owned by the Regional Government of Castile-Leon,


• 2 Singular Scientific and Technical Facilities (ICTS): including the National Research Centre into Human Evolution (CENIEH) attached to the Atapuerca archaeological site,

• Innovation spaces: the Scientific Parks of the University of Valladolid and the University of Salamanca, the European Centre of Enterprise and Innovation of Burgos (CEEI), the Boecillo Technological Park,

• Intermediate bodies: business-university foundations, knowledge and technology transfer offices, Chambers of Commerce and Industry, the Confederation of Business Associations of Castile-Leon (CECALE),

• Financial organisations.

The main challenges and strengths of the innovation system of Castile-Leon are the following:

Figure 20: SWOT analysis

Weaknesses Strengths

Hum

an c

apit

al • Lack of enough opportunities to

retain highly qualified people • Scarcity of personnel qualified with

RDI management skills, which lead to an underutilisation of the outcomes obtained from the cooperation between agents

• High dependence on low skilled labour-intensive sectors

• In 2012, Castile-Leon accounted for 41.4% of the human resources dedicated to science and technology, as a percentage of the working population, above the EU27 average of 40.9% and the Spanish average of 39.3%

Inte

rnat

iona

lisa

tion

& e

xcel

lenc

e

• Little international presence of regional science and technology

• Low rate of agents participating in European RDI programmes

• Development of regional excellent research, with a growing number of excellent research groups

• Existence of highly competitive sectors at international level, such as the IT or the agricultural areas

R&

D fu

ndin

g

• Lack of knowledge of the regional companies about the existing support mechanisms for RDI activities

• High dynamism of private R&D expenses, mainly among SMEs

• Growing commitment of the regional government to science and technology, reflected in a yearly increase of the percentage of funds allocated to finance these activities in the regional budget

Ent

repr

eneu

rshi

p • Poor entrepreneurial culture • Support agents specialised in

entrepreneurship and knowledge based business creation scattered throughout the region

Supp

ort

infr

astr

uctu

res • Poor offer of advanced RDI services

that support the productive fabric • Public support agents specialised in

the promotion of RDI activities scattered throughout the region

• Little expansion of innovation to those areas far apart from the technological clusters

• R&D resources available to the system • The expenditure on R&D activities

accounts for 1% of the regional GDP


Coo

pera

tion

• The researchers’ skills must meet the real EU needs

• Lack of awareness among enterprises of the available technological offer of the regional universities

• Lack of specialisation and differentiation both in the higher-education system and in the business fabric

• Weak exploitation of the R&D outcomes, mainly of the patents

• Duplication or overlapping of competences among public entities

• Better coordination and monitoring of the information society and RDI, carried out by the Commissioner for Science and Technology

• Development of the priority emerging sector through the design of measures that enhance cooperation between agents

• More interconnected and integrated regional RDI policy

Dis

sem

inat

ion

• Low societal awareness of the results of the RDI activities

• Scarce dissemination efforts from the public entities

• Castile-Leon has specialised magazines and national newspapers with science and technology sections

Threats Opportunities • The global economic crisis limits the

public and private investments in RDI activities

• Less liquidity and higher risk aversion of the financial sector

• Tighter financing conditions and little economic growth

• Reduced availability of public funds for RDI activities

• More concurrency to the public financing calls

• Bigger efforts in RDI funding of third countries that increase gradually their competitiveness against the EU27

• Less economic and social incentives to boost a sustainable model, due to the global contraction in demand

• Loss of trust and credibility of the actions carried out by the public sector

• Innovation in the public sector should boost strategic sectors and new innovation lines

• The eco-innovation is an essential requirement for the sustainable development, as integrating element that enhances competitiveness in other sectors through the development of new technologies and new productive processes

• RDI policies should design a new approach where a better interaction with the stakeholders and the society promotes an innovative environment

• New legislative changes at national level must facilitate the creation and maintenance of technology based businesses

• A stabilisation of the research career would allow the consolidation of teams and relevant research projects in the region

• The integration of the open innovation concept can position the Castile-Leon technological and research centres at a European level

• The public awareness of the need of funding of the regional companies should serve as a starting point for defining strategies in short and medium term

• The boost of activities oriented to the knowledge valorisation and transfer between universities and companies broadens the scope of the regional research

• A new mix between technology and sectoral strategies would provide a solid factual base for designing economic activities for the future.

Source: Updated ERIDI 2011-2013

The current regional organisations in charge of supporting R&D activities are summarised in Figure 21.

Figure 21: Innovation Policy Institutional Set-Up and Available Human Resources

Organisation Personnel Summary assessment Science and Technology Coordination

14 members

• Coordination of the RDI activities of the different government departments;

• Identification of scientific and technological needs of


Commission Castile-Leon; • Proposal of the Regional RDI Strategy to the Government

of Castile-Leon; • Watch over the achievement of objectives and priorities of

the RDI policy; • Monitoring and evaluation of the Regional RDI Strategy; • Coordination of the participation of the regional

government in national and international programmes.

Confederation of Business Organisations of Castile-Leon (CECALE)

20 employees

• Support the private initiative and market economy; • Enhance the unity and enterprise integration; • Promote economic development within the region as a

mean for achieving a more equitable society; • Represent, protect and manage the common interests of

business sector vis-à-vis the Government, autonomous bodies and professional organisations.

Agency for Innovation, Funding and Internationalisation of Castile-Leon (ADE)

200 employees

• Provides RDI guidance, counselling and mediation; • Creation of new business: helps new enterprises to find the

best funding schemes during their first steps; • Improvement of competitiveness: supports industry

growth to guarantee the market competitiveness of the companies;

• Innovation: supports innovative projects and business and helps to facilitate access to ICT.

Commission for Coordination on Science and Technology

The Law 17/2002 for the General Promotion and Coordination of the Scientific Research and the R&D and Innovation Activities in Castile-Leon created the Commission for Coordination on Science and Technology as a collegiate interdepartmental body chaired by the President of the Government of Castile-Leon. The Commission is attached to the Regional Ministry of Economy and Treasury and its activities are devoted to the surveillance of the regional R&D, the Innovation and Information Society coordination, planning, and monitoring and multiple evaluation tasks.

The Commissioner for Science and Technology, created by the Decree 91/2007, is designated by the President of the Government of Castile-Leon in order to monitor initiatives, foster participation and coordination of different agents, and ensure the execution of the budget planned for the regional RDI strategy.

The main functions of the Commission for Coordination on Science and Technology are:

• Horizontal coordination of the R&D and innovation activities: given the increasing significance of government R&D programs in Castile-Leon, an effective overall coordination of the different regional departments based on an objective evaluation is essential. The efficient allocation of the limited government budget for those programs is a matter of primary interest to the policy decision-makers.

• Vertical coordination of the R&D and innovation activities: The Commission must ensure that the complicated nature of the national and European R&D and innovation programs does not result on overlapping interests among different governmental departments.

• Identification of scientific and technological needs of Castile-Leon: the Commission assists the Government of Castile-Leon to determine its own strategic position on engagement in global science and technology.

• Proposal of the Regional RDI Strategy to the Government of Castile-Leon: the experts of the Commission forecast mid and long term technology development trends and draw a technology road map according to the strengths and weaknesses of the regional innovation structure.

• Monitoring and evaluation of the Regional RDI Strategy: the Commission carefully assesses positive and negative consequences that the technological developments of R&D and innovation programmes incur, and reflect them in forming future policies and projects. It also addresses issues and problems


raised by stakeholders in the process of overall coordination and offer possible solutions for the improvement of future practice. Furthermore, the Commission analyses and evaluates in-depth the performance of R&D and innovation programmes and makes use of them as criteria for setting up the order of priority in R&D spending.

• Coordination of the participation of the regional government in national and international programmes: the approach focuses as much on potential industry and economic benefits as on building the regional research capability, and considers how Castile-Leon can get the best value in a strategic sense from participating in national and international innovation programmes and partnering with companies from other European regions.

The Commission for Coordination on Science and Technology was the body responsible for coordinating the actions in the framework of the Regional Scientific Research Technological Development & Innovation Strategy of Castile-Leon 2007-2013 (ERIDI), comprising representatives from the Departments directly involved with RDI activities, and presided by the President of the Government of Castile-Leon. The Commission was entrusted with designing the policy, benchmarking, monitoring actions and initiatives implemented in the framework of the Strategy and for evaluating their results and impact; with the help of a high-level specialised technical support personnel.

Cooperating with the Commission on the design of specific plans applied in the framework of the Strategy was the Science & Technology Advisory Council, permanently involved in monitoring duties. At the operational level, management and execution of Strategy programmes were entrusted to the competent bodies of the regional authorities and other players in the system.

The Commission and the Advisory Council thoroughly reviewed in 2010 the Strategy and the outcomes of this mid-term revision were used to design the Update for the Period 2011-2013 of Regional Scientific Research Technological Development & Innovation Strategy of Castile-Leon, according to the new economic, social and institutional context.

Confederation of Business Organisations of Castile-Leon (CECALE)

The Confederation of Business Organisations of Castile-Leon is a non-profit, professional and intersectoral organisation comprised of multiple companies from different sectors. The objectives of the Confederation include the coordination, representation, management, promotion and protection of business interests in the Castile-Leon Region. The fundamental goals of the Confederation are:

• Promote and support the private initiative and market economy • Promote and support the unity and enterprise integration • Promote economic development within the region as a mean for achieving a

more equitable society • Represent, protect and manage the common interests of business sector vis-a-

vis the Government, autonomous bodies and professional organisations.

The Confederation represents and manages general and common aspects of the interests entrusted to the participating organisations before all instances (both representative, management or decision bodies) at socio-economic, cultural or political levels; and promotes the creation of professional organisations and the mutual cooperation among them. In the international arena CECALE is part, among others, of the Union of Industrial and Employers Confederations of Europe (UNICE), a Brussels-based European association of industries and employers, and The Business and Industry Advisory Committee to the OECD (BIAC), an independent international business association devoted to advising government policymakers at OECD and related fora on the many diversified issues of globalisation and the world economy. Agency for Innovation, Funding and Internationalisation of Castile-Leon (ADE)


The Agency for Innovation, Funding and Internationalisation of Castile-Leon is a public entity created by the Law 21/1994 and based on the Industrial Development Agreement reached between the Government of Castile-Leon and the Social and Economic Agents of the region.

The Agency for Innovation, Funding and Internationalisation of Castile-Leon seeks to be the main engine of economic development activity and production system of Castile-Leon with a quality service geared to fulfil the needs of society. The mission of ADE is to support companies in their quest for sustainable competitiveness by offering integrated solutions tailored to their individual and/or collective needs.

The work of ADE focuses on four key processes: product design, communication, service delivery and evaluation of results.

The main activities of ADE focus on promoting entrepreneurship in the region of Castile-Leon. ADE uses public instruments, both expertise and financial resources, to help companies in the design and implementation of integral actions to improve their competitiveness. Moreover, the Agency supports enterprises in the region of Castile-Leon through several funding calls related to:

• Creation of new business: helps new enterprises to find the best funding schemes during their first steps;

• Financial support for businesses: by promoting different actions that lead to the increase of R&D activities;

• Optimisation of human capital: implementation of actions focus on the attraction and retention of strategic talent;

• Improvement of competitiveness: supports projects for industry growth to guarantee the market competitiveness of the companies;

• Innovation: supports innovative projects and businesses and helps to facilitate access to ICT;

• Internationalisation.

The Agency for Innovation, Funding and Internationalisation of Castile-Leon counts on an associated body created in 1989, Ade Internacional EXCAL, focused on attracting new investors abroad. ADE Internacional EXCAL is an organism that depends on the Government of Castile-Leon whose mission is to stimulate the internationalization of this Autonomous Community. In order to develop such activities, the agency counts on an important international Network of Offices and Business Centres that are used as a link for whatever agents are interested in the products and services offered by the firms of Castile-Leon. It also collaborates with importers, distributors, specialized press and other agents to encourage the awareness about and the international marketing of Castile-Leon products by jointly organizing activities for their promotion.

Additionally, the Agency is backed up financially by ADE GESTION SODICAL SGECR, a management company of venture capital entities, and a Venture Capital Fund ADE FINANCIACION CAPITAL SEMILLA FCR.

4. Innovation Policy Instruments and Orientations

4.1 The Regional Innovation Policy Mix

The regional strategy that supports RDI in Castile-Leon comprises several initiatives, the most important of which are the successive Strategic Competitiveness Frameworks of Castile-Leon and the Regional RDI Strategy designed for the period 2007-2013.


From the 1980s onwards, the Government of Castile-Leon has developed a series of mechanisms and created different public bodies to foster awareness among the regional stakeholders of the available technological possibilities and promote an innovation environment. The main initiatives of the regional science and technology policy of Castile-Leon and their evolution are summarised in Figure 22.

Figure 22: Innovation Policy Evolution Milestone Year Description

Boecillo Technological Park

1990 Inauguration of the first technological park of Castile-Leon, built to attract hi-tech based firms.

Technological Incentives Order

1990

Tool designed by the Public Administration to foster the technological innovation activities among the Castilian firms, through two programmes focused on: • Technology integration (non-repayable grants); • Creation of research units within the existing

industrial companies.

Law on Technological Centres

1992

Regional Law that aimed to encourage RDI activities within the productive fabric by building adequate infrastructures and fostering a coordinated technological development through the Technological Centres Network associated to Castile-Leon.

Regional Technological Plan

1997 -

2000

First consensual effort from all the different regional agents to improve the competitiveness of the region. The plan focussed specially on adapting the technological offer to the needs of the local companies and develops communication and cooperation channels.

Research and Science Act

1999 Regional Law that aimed to plan, coordinate and structure the science and R&D system.

Coordination Commission for Science and Technology

2001 Collegiate body entrusted with the planning and coordination of the R&D and Scientific activities in Castile-Leon.

Law for the General Promotion and Coordination of the Scientific Research and the R&D and Innovation Activities

2002

Regional Law that aimed to rearrange and promote the RDI activities of the region, within the framework of the EU policies and the programmes of the universities and the technological centres.

Regional R&D Strategy 2002

- 2006

Second plan designed to link the R&D with the innovation activities and boost the development of the Regional System for Science, Technology and Business.

Universities Law 2003 Regional regulation concerning the financial, territorial and academic organisation of the universities of Castile-Leon.

Regional strategy for the Information Society

2003 -

2006

First regional strategy that laid the basis to develop the information society in Castile-Leon.

Forum on Competitiveness, Economy and Industry

2004 -

2005

Space for reflection about the present and future competitiveness scenarios of Castile-Leon designed to provide a strategic framework that propitiates a sustained growth and a social welfare in the region.

Commission for Coordination on Science and Technology

2007

Chaired by the President of the Government of Castile-Leon, is devoted to R&D, Innovation and Information Society coordination, planning, monitoring and evaluation tasks.

Regional Scientific Research Technological Development & Innovation Strategy of Castile-Leon 2007-2013

2007 -

2013

Strategy designed to transform the region into a new national and international benchmark region for research, technological development and innovation, giving rise to a qualitative change in the behaviour of the region's businesses, institutions and society as a whole.

Law 17/2012 of promotion and general coordination of the scientific research, development and technological innovation

2012 Law that defines the regional institutions in RDI, establishes the regional planning, and identifies some specific measures.


in Castile-Leon


At the end of 2004, the former President of the Government of Castile-Leon aware of the fact that the technological innovation is the key factor in competitive differentiation and the need of transforming Castile-Leon in a innovative region summoned all the relevant stakeholders of the region in the Industrial and Economic Competitiveness Forum (FCE+I). In order to define the pillars of the future innovation strategy of Castile-Leon, more than 700 experts from inside and outside the region were invited.

The result of that Industrial and Economic Competitiveness Forum was a comprehensive model designed to boost regional development that currently constitutes the core of the Strategic Competitiveness Framework of Castile-Leon and is based on a “three axis scheme”: business size, innovation and information society, and sectoral policy. These three axes respond to the three main needs to improve competitiveness: internationalisation of business companies, business modernisation, and specialisation of regional industry, respectively.

The Strategic Competitiveness Framework of Castile-Leon provides a response to the features considered key factors by the participants in the Economic and Industrial Competitiveness Forum (FCE+I) and the social and economic players that latter signed the II Framework Agreement on Industrial Competitiveness and Innovation.

II Framework Agreement on Innovation and Industrial Competitiveness in Castile-Leon The II Framework Agreement, published in 2008 and currently in force, was designed by the Government of Castile-Leon together with the CECALE, UGT and CCOO (the two mayor trade unions of Spain) for the period 2010-2013. It comprises overarching strategic measures to structure the pillars of the economy within the region and to support the most favourable environment to enhance social and economic development of Castile-Leon. The Agreement promotes employment and job protection of workers, who are the most affected by the current economic situation. The main actions are focused on providing financial support to create new businesses, modernising the existing ones, and promoting training that increases value added activities. The primary objectives of this priority are:

• Consolidate the process of economic convergence with Europe and increase territorial cohesion within the region;

• Generate and maintain qualified and sustainable employment; • Promote an economic model based on knowledge and innovation; • Foster the creation of new businesses within the region; • Strengthen the internationalisation of regional enterprises; • Improve the competitiveness of regional enterprises; • Facilitate access to finance to regional firms.

The current RDI policies of Castile-Leon are integrated in this Competitiveness Framework, and include a whole series of measures and actions oriented towards:

• Improving the skills and qualifications possessed by the region’s human resources;

• Developing specific financing instruments for innovative technology-based business projects (ITBBP);

• Promoting alliances and cooperation through the creation of consortia, clusters and the like;

• Promoting foreign trade; • Setting up businesses in foreign markets; • Promoting international cooperation; • Developing the entrepreneurial spirit through training- and information-

related action; • Speeding up the pace of new business creation; • Promoting initiatives in Castile-Leon and outside the region; • Supporting for RDI-related projects.


Regional Scientific Research Technological Development & Innovation Strategy of Castile-Leon 2007-2013

In 2007, the Regional Community of Castile-Leon launched the Regional Scientific Research Technological Development & Innovation Strategy of Castile-Leon for the 2007-2013 period (ERIDI 2007-2013), based on the homonymous Strategy designed for the period 2002-2006. This Strategy was the tool designed by the regional government to articulate and conduct the RDI activities of the next seven years.

The aim of this renovated strategy was to boost the transformation of the region into an international region of reference for research, technological development and innovation, giving rise to a qualitative change in the behaviour of the region's businesses, institutions and society as a whole.

This document was thoroughly reviewed in 2010, and the outcomes of this mid-term revision were used to design the Update for the Period 2011-2013 of Regional Scientific Research Technological Development & Innovation Strategy of Castile-Leon (ERIDI 2011-2013), according to the new economic, social and institutional context.

Figure 23: ERIDI 2007-2013 Resources

ERIDI 2007-2013 Resources9 M€ 2007 2008 2009 2010 2011 2012 2013 Total

Public resources 588.8 599.6 533.8 529.3 557.8 574.6 603.3 3,987.2 Regional government 282.4 328.9 288.6 298.7 342.2 352.5 370.1 2,263.4 Other 306.4 270.7 245.2 230.6 215.6 222.1 233.2 1,723.8

Private resources 655.8 687.9 709.1 737.4 766.9 789.9 829.4 5,176.4 Total 1,244.6 1,287.5 1,242.9 1,266.7 1,324.7 1,364.5 1,432.7 9,163.6


In order to achieve these challenges, the strategy was structured in 8 programs:

1. Human capital as a source of competitive advantage: consolidating the research basis and the human capital with expert profiles adapted to the needs of the knowledge economy and society.

2. Enhance the RDI of excellence in the national and international context: positioning the regional companies and research groups in the international arena, by promoting a high-level of RDI activities, in order to increase their competitiveness and the raising of external funds.

3. Funding and support to the development and management of RDI: consolidating those programmes that have proven to be effective to mobilise RDI capacities, while developing new instruments able to respond to the complex R&D management challenges.

4. Implementation, use and development of ICT: increasing productivity and economic growth though the integration of the information and communications technologies (ICT) within businesses and research entities.

5. Fostering entrepreneurship and business creation: promoting entrepreneurship as a global culture oriented towards the creation of start-ups; and building a support system for the adoption of innovative attitudes, is a key issue to increase the number of technology-based firms created.

6. Creation, development and consolidation of support infrastructures: enhancing the diversification, specialisation, and rationalisation of existing RDI support infrastructures, including the design of a stable funding framework for technology centres; and creating new regional innovation spaces.

7. Cooperation: reinforcing the regional RDI by improving its effectiveness and efficiency through the creation of cooperative synergies amongst the different

9 Update of the Regional Scientific Research Technological Development & Innovation Strategy of Castile-Leon (ERIDI). Forecast 2011


actors; facilitating the information flow among stakeholders; and shaping a technology transfer network where different structures are integrated.

8. Dissemination: raising society’s awareness about research, technological development and innovation, and bringing citizens closer to the results of scientific, technological and innovative activities though encouraging demand, increasing the recognition of researchers, and the creation of a global regional enterprising and innovative culture.

As a complement of the ERIDI 2007-2013, the University – Business Strategy for Castile-Leon 2008-2011 (EUE 2008-2011) was designed to reinforce the interaction between the three points of the inclusive knowledge triangle: innovation, research and education. With the revision of the regional strategies in 2010, the EUE 2008-2011 was integrated in the ERIDI 2011-2013.

The mid-term evaluation of the outcomes of these strategies revealed that, although many of the objectives of the original plans had been accomplished and the business competitiveness of the region had improved significantly; the social, economic and political environment had suffered dramatic changes from those in 2007. Hence, a profound revision of the global strategy became indispensable in order to guarantee an intelligent and sustainable growth in Castile-Leon that would invigorate the investment in RDI activities and optimise the allocation of public resources.

Regional Strategy for the Digital Information Society of Castile-Leon 2007-2013 (ERSDI). Additionally, the Regional Community of Castile-Leon issued the Regional Strategy for the Digital Information Society of Castile-Leon 2007-2013 (ERSDI). Under the slogan Castile-Leon, Digital Community, the document compiled different measures to continue progressing in the full incorporation of the region into the Digital Information Society, which include, among others, the use of Information and Communication Technologies (ICT) as the drive of the inclusion, life quality and economic and social development, and the generalisation of the use of the ICTs in public services, in the small and medium enterprises (SMEs) and at home.

The main objective of the Regional Strategy for the Digital Information Society of Castile-Leon 2007-2013 is to progress in the incorporation of the Region within the Digital Information Society. By enhancing the potential of the Information Technologies and the Communities, the strategy aims to improve the economic development, the competitiveness and productivity of the regional companies, the social and territorial equality and the quality of life of the citizens.

The strategic action lines of this strategy are:

1. Telecommunications Management Plan: the goal is to guarantee affordable telecommunication services and infrastructures of great quality, by emphasizing those which are linked to the information and knowledge access, and by guaranteeing the equal access in the territories that have less demand capacity.

2. The Digital Citizen: promotes the development of training, educative and awareness activities directed at the Castile and Leon society in general, with the aim of facilitating its incorporation and access to the future opportunities that this new society offers.

3. Digital Business Environment: aims to enhance the growth and the innovation capacity of the companies of the region, by generating a dynamic company setting through the promotion of the generalised use of the ICT from the companies’ side, stimulation of the development of electronic business and strengthening of the regional ICT sector.

4. Digital Municipalities of Castile-Leon: encourages the adoption of promotion measures of the Digital Information Society in the region municipalities as well as Electronic Administration and Interoperability.

5. e-Administration: designed to get the most out of the possibilities of the Electronic Administration to render more efficient and better quality public


services and to exploit maximally the possibilities of the Electronic Administration to improve its efficiency efficient and better.

6. Public Services for the Digital Information Society: pursuits to modernise the public services, such as education, health, transport, etc., through a greater use of the tools of the Digital Information Society, in terms of improvement of the quality, agility, efficiency and user satisfaction.

7. Digital Content and Services: focused on the promotion of the offer and the implementation of the contents and services of added value, which are able to generate the necessary interest in order to promote the demand component, and in general, to encourage the active participation in the Digital Information Society and for the participants to enjoy the advantages.

8. Promotion of the Audiovisual Sector: seeks to adopt initiatives directed to encourage the Castile and Leon Digital Terrestrial Radio and Television progress.

Programme for financial costs incentive A recent overall Programme for financial costs incentive gives a discount in loans and in guaranteed credit policies to carry out investment, R&D and working capital projects. This programme provides more adequate funding, serving hence as a solution for the needs of entrepreneurs, freelancers and SMEs.

This Programme has been very important for the region because the economic crisis has affected severely the industrial base, specially the SME, mainly due to the credit restrictions. The Programme is focused on providing adequate funding suitable to the needs of entrepreneurs, freelancers and SMEs of Castile-Leon; promoting the creation and consolidation of businesses and employment and enhancing growth. It places particular emphasis on the following projects:

a) Young entrepreneurs: Investment and working capital for new business leaded led by young entrepreneurs;

b) Financial support in rural areas: Investment and working capital for business developed in municipalities with less than 20,000 inhabitants;

c) Microcredits to students and entrepreneurs: projects related to investment and capital needs in order to establish new business leaded by young entrepreneurs;

d) Financial support to retail: Investment and working capital for retail enterprises;

e) Business succession: Enterprise acquisition by SME that starts an activity with established companies forced to close by due to the retirement of the employer or whatever other circumstances;

f) Investment and expansion projects for existing enterprises: Competitiveness projects: investment projects that help to improve the competitiveness of SMEs or self-employed started after 01/01/2012;

g) Working capital: Related to business activity in any of these cases: companies with unbalanced incoming and outgoing cash flows which lead to liquidity problems, current Asset proportion is higher than sector average and finance for manufacturing.

There has been a positive response of the beneficiaries to this programme. The continued effort made to adapt every single project type according to the different requests gathered in the previous calls has led to a diversification of the financial aids, including: microcredits, support to rural areas, entrepreneurship, etc.

European Regional Development Fund (ERDF) (2007-2013) On 28 November 2007, the European Commission approved the ERDF Operational Programme for Castile-Leon under the Competitiveness Objective for the period 2007-2013. The overall budget of the Programme amounted to €1.2 billion. This included


EU investment from the ERDF of approximately €818m, corresponding to about 3.5% of the total ERDF allocated to Spain for that period. The Operational Programme was structured along the following priorities:

• Priority 1: Development of the Knowledge Economy (RDI: Information Society and ICTs). The objective was to safeguard existing competitive enterprises and create favourable conditions for their expansion, business start-ups and relocations, with special attention to R&TD infrastructure and centres of competence for specific technology (approximately 9.6% of total funding).

• Priority 2: Entrepreneurial Development and Innovation. Focused on stimulating innovation and entrepreneurship in all sectors of the regional economy by supporting new processes, services, business networks and clusters, and by promoting cooperation networks between firms. Special attention was given to financial engineering instruments and incubation facilities that were conducive to the R&TD capacity of SMEs and to encouraging entrepreneurship and the formation of new business, especially knowledge-intensive SMEs (approximately 26.6% of total funding).

• Priority 3: Environment, Natural Surroundings, Water Resources and Risk Prevention. The Programme sought to improve the framework conditions for environmental infrastructure that had hampered of economic development, growth and employment (approximately 22.8% of total funding).

• Priority 4: Transport and Energy. Promoted transport infrastructure where the regional structure and integration in transregional networks was a basic requirement for achieving a better concentration of overall infrastructure support, with regard to improved accessibility between growth centres. Investments focused on railway infrastructures and strengthening secondary transport networks by improving links to TEN-T networks, regional railway hubs, airports and multimodal platforms. Clean urban transport was supported while investments targeted solar and biomass, energy efficiency, co-generation and energy management (approximately 30.4% of total funding).

• Priority 5: Local and Urban Sustainable Development. Promotion of urban areas under this priority included a broad spectrum of initiatives targeting both existing problems and the potential of inner city and suburban areas, thereby continuing the integrated development approach of the Community initiative URBAN (approximately 10.1% of total funding).

• Priority 6: Technical Assistance and Reinforcement of Institutional Capacity. Funding was allocated to cover the preparation, administration, supervision, assessment, information and communication, studies, evaluations and monitoring (approximately 0.5% of total funding).


Figure 24: Existing regional innovation support measures

Title Duration Policy priorities Budget Organisation responsible More information

INNOEMPRESA 2007-2013

2.4. Demonstration projects, proto-types and proofs of concepts 4.1. Direct funding to business R&D and innovation 4.3. Fostering start-ups and gazelles

2010: €8m 2011: €2m 2012: €1m 2013: €5.9m

Agency for Innovation, Funding and Business Internationalisation for Castile-Leon

https://www.tramitacastillayleon.jcyl.es/web/jcyl/AdministracionElectronica/es/Plantilla100Detalle/1251181055331/_/1284234896117/Propuesta

Programme Loans for R&D

2013 4.1. Direct funding to business R&D and innovation 5.3. Innovation awareness-raising

2013: €10.6m


https://www.tramitacastillayleon.jcyl.es/web/jcyl/AdministracionElectronica/es/Plantilla100Detalle/1251181055331/_/1284289204976/Propuesta

Grants for R&D Strategic Plans

2013

3.2. Training and life-long learning of researchers and any other personnel involved in innovation 4.7. Design for innovation 3.4. Encouraging participation of women in science, technology and innovation activities 4.1. Direct funding to business R&D and innovation

2013: €8.1m


https://www.tramitacastillayleon.jcyl.es/web/jcyl/AdministracionElectronica/es/Plantilla100Detalle/1251181055331/101/1284265767204/Propuesta

Programme for financial costs incentive

2013-2015 4.1. Direct funding to business R&D and innovation 4.3. Fostering start-ups and gazelles

2013: €0.6m 2014: €1.52m 2015: €0.5mi



Grants for the Processing and Marketing of Agricultural, Forestry and Food Products

2013

4.2. Organisational, process and other non-R&D innovation 2.4. Demonstration projects, proto-types and proofs of concepts 4.1. Direct funding to business R&D and innovation

2013: €5.85m

Directorate General for Agricultural Industries and Farm Modernisation


Source: Agency for Innovation, Funding and Internationalisation of Castile-Leon (ADE)


4.2 Appraisal of Regional Innovation Policies

The previous RDI strategies of the Government of Castile-Leon were designed in a context characterised by a widening globalisation and the consequent need of profiting of the regional competitive advantages, the commitment undertaken by the EU members in the renewed Lisbon Strategy and the upgrade of Castile-Leon from a convergence region to a Phasing-in one.

In this economic juncture, the ERIDI 2007-2013 was intended to position Castile-Leon in the European scene as an attractive socio-economic system based on a creative enclosure and a strong RDI sector. The strategy aimed to create an innovative environment that would involve all the regional agents and, supported by excellent researchers and structures, would fit in the existing European networks of the knowledge economy. The ERIDI 2007-2013 was an ambitious plan that propounded a qualitative change of the behaviour of the business, the institutions and the entire society of Castile-Leon.

The original ERIDI was defined for the period 2007-2013 and an intermediate evaluation planned and carried out in 2010. The outcomes of this mid-term revision were used to review the original strategy and redesign the Update for the Period 2011-2013 of Regional Scientific Research Technological Development & Innovation Strategy of Castile-Leon (ERIDI 2011-2013), according to the new economic, social and institutional context. The new plan was clearly influenced by the global crisis and focused on developing more efficient R&D public policies. The main amendments and approaches introduced by this 2011 revision were:

• Changes in priorities on public policies in order to deal with the short-term measures, consequence of the crisis, and with long-term initiatives more oriented to strengthen competitiveness factors;

• Budgetary reduction and increase of the citizens’ demands requesting more efficient public policies;

• Loss of competitiveness and obsolescence of the previous national economic model and fast development of emerging countries, in particular Brazil, Russia, India and China;

• Need for development of efficient processes of innovation, with emphasis on knowledge valorisation and transfer, open innovation, cooperation among stakeholders, sustainability, technology convergence and globalisation of RDI

The new approach simplified the regional policies in 7 programmes and integrated the University – Business Strategy for Castile-Leon 2008-2011 in order to facilitate the transformation of Castile-Leon into a new national and international benchmarking region in the fields of research, technological development and innovation, inducing a qualitative change in the behaviour of the region’s businesses, institutions and society as a whole.

The purpose of the update was to enhance those measures that met the objectives more efficiently during the first period and boost those essential to consolidate the RDI strategy. To achieve these challenges, the strategy followed the guidelines set by the Europe 2020 Strategy for growth and employment based on a sustainable, intelligent and inclusive growth:

Figure 25: Specific ERIDI objectives 2011-2013

Indicators of the specific ERIDI objectives for the 2011-2013 period

Programme Specific Objective Indicator Goal 2013

1. Human capital as source of competitive

Develop new opportunities for the human capital within

Personnel dedicated to R&D activities per thousand of the total employed population

12.00


advantage knowledge-based sectors

Economic return on Castile-Leon participation in EU Framework Programme for R&D, as a percentage on the national total

2.50 2. Promotion of excellent RDI nationwide and abroad

Optimise the presence of Castile-Leon in both national and international networks

Economic return on Castile-Leon participation in R&D national programmes, as a percentage on the national total

55

Allocate the RDI funding to the needs of the stakeholders

Resources mobilized for R&D activities (K€)

1,432.7 3. Financing and support to R&D and Innovation and its management

Promote the innovation culture within the companies, from both a sectorial and a regional points of view

Expenditure on R&D activities carried out by non-HAMHT companies, as a percentage of the total sectorial investment

50

4. Implementation, use and development of support structures

Consolidate a RDI support network

People employed in innovation facilities

8,000

Annual income on R&D activities from universities and technological centres (M€)

700 5. Transfer and knowledge valorisation

Encourage the cooperation among the different agents of the science and technology system

Number of national patents granted to universities and technological centres

35

Personnel employed by HAMHT companies, as a percentage of the total

75 6. Fostering entrepreneurship: business creation

Create an consolidate innovative businesses in sectors of the future

Number of knowledge-based companies older than 3 years, spin-off from universities, technological and research centres

80

Raise society’s awareness about research, technological development and innovation

Human resources dedicated to science and technology, as percentage of the working population

43

7. Dissemination Give national and international visibility to the excellence in R&D of Castile-Leon

Total exports of high-tech products as a percentage of the total Spanish export sales

72

Source: Updated ERIDI 2011-2013 In line with the challenge of boosting the regional effort in R&D, the update of the strategy emphasised the need to evolve towards a comprehensive approach where all the agents of the RDI environment were actively committed in enhancing the competitiveness of the region. The strategy suggested new cooperation methods, such as clusters, global networks, inter-cluster collaboration, open innovation, collaborative research facilities, public-private alliances for strategic economic sectors, etc.

Furthermore, the update of the strategy encouraged the creation of a sustainable knowledge-based society, based on three basic pillars: competitiveness linked to innovation, a socioeconomic approach where the citizen is the main beneficiary and the will to confront the post-crisis scenario with a new and sustainable productive model.

In this regard, to avoid the gap between the level of profitable private R&D investment and the level of R&D that maximises the benefits for the citizens, this renovated and long-term productive model has to take into account, besides the development of technologies and innovation in competitive existing sectors, all those opportunities


demanded by the society and emerged from alternative sectors like eco-innovation, entertainment, health and well-being, food adapted to the consumer needs, multi-media industry, etc.

This new RDI strategy made use of the weaknesses detected in the region to enhance measures that can improve the competitive situation of Castile-Leon: the feeble entrepreneurial spirit, the lack of innovation culture of those areas located away of the business and research facilities or the insufficient structure of services specialised on innovation support. In this regard, the update stated that Castile-Leon must continue evolving and enhancing the following aspects:

• Knowledge transfer between business and universities: as stated before, one of the main challenges Castile-Leon is facing is the so called “European Paradox”: to overcome the difficulties the regional economy has in transforming its success in basic research into commercial success.

Castile-Leon has devoted most of its efforts to modernise infrastructures and increase productivity, but the future strategies aim to redistribute efforts, improve the capability to translate into commercial successes and better fund intangible investments, which are a deciding factor for the future of competitiveness, growth and employment of the region. Innovation must be the driving force behind the business policy, both downstream and upstream of the production of goods and services.

• Creation and consolidation of high-tech firms operating in future-oriented fields, such as the biotechnology and aerospace sector or the renewable energies: high-tech firms are associated with innovation, and firms that innovate tend to gain market share, create new product markets, and use resources more productively.

Furthermore, industrial R&D performed by high-tech industries results in substantial positive spillovers that benefit other commercial sectors by generating new products and processes that can often lead to productivity gains, business expansions, and the creation of high-wage jobs.

• Incorporation of technologists into major industrial sectors of great significance to the regional economy, such as the agricultural sector and the automotive industry: this measure would improve the performance of the involved business and their subsidiary industry, consolidating the competitive advantage of the region in the related sectors.

But it would also have a positive effect on the dissemination of knowledge and the raise of social awareness in the importance of innovation: the need of experts on applied and practical principles would attract highly skilled human capital, increase the number of inhabitants of the region that will apply to university degree programs and thus, the share of people involved in life-long learning will rise.

• Internationalisation of regional RDI. The successive Plans for the Internationalisation of Castile-Leon have promoted the international cooperation of the local companies by cultivating strategic partnerships, the creation of business partnerships and the participation of regional firms in international consortia. Although the Plans have contributed to improve the image of Castile-Leon abroad, the negative impact of the economic crisis makes necessary to redouble efforts if the region wants to attain the objectives originally planned by the ERIDI 2007-2013.

By reorienting the priorities towards a more efficient approach and simplifying the structure of the R&D measures, Castile-Leon has given a new momentum to its innovation strategy and reinforced a competitive system, comprised of a network of agents committed to develop an efficient R&D strategy that would place the region in a favourable position within the EU.


At the end of 2013, the current strategy has come to an end making way for a new programming period (2014-2020), when the European Union aims to develop policies for science and technology through research and innovation strategies for Smart Specialization (RIS3). The degree of achievement of the above indicators and goals set up for 2013 under each specific objective of ERIDI 2011-2013 is currently being processed.

The receipt of Structural Funds allowed Castile-Leon to leave the Objective 1 status after 2006 and grow above the national average rate, increasing substantially the employment, production and regional exports before the recent crisis period.

Figure 26: GERD vs. Employment

Source: Eurostat

4.3 Good practice case

Since the establishment of the Autonomous Community of Castile-Leon, one of the pillars and guiding principles of public policy of self-government has been the promotion and encouragement of scientific research, development and technological innovation as strategic priority to ensure the social and economic progress of the Community.

That is why from the Statute of Autonomy, public officers are encouraged to make innovative policies regarded as essential to the good government of Castile-Leon, and this is the booster of good practice in the development, promotion and co financing R&D projects.

The R&D policy of the region, based since the beginning in lessons learnt at a national and European level, had its origin in the Technological Incentives Order of 1990 along with the creation of Boecillo Technology Park. That year marked the beginning of public support for regional R&D, and it was the first step to ensure collaboration between the actors in the region.

Since 1992, there have been several plans and regional strategies for R&D all focused on promoting business innovation in the region and building partnerships between public and private actors through industrial incentives.

The results of regional policies and after implementation of the ERIDI (2007-2013), have been very positive according to the data presented in the successive reports of the regional government and therefore encourage the social and business agents to continue investing in innovation and participating in R&D activities in the future, with clear objectives to support business and promote industry of the region.


A very important point that has benefited the proper functioning of the R&D policies in Castile-Leon is the excellent relationship the regional government has with the national RTD and Innovation authorities (MINECO, CDTI, IDEA). Deserves particular attention the special relationship established between the stakeholders of Castile-Leon and the Spanish National Innovation Agency (CDTI). Many business RDI projects that were regionally financed were also submitted to CDTI in order to obtain additional funding, always respecting the thresholds set by the Community Framework on R&D State aid.

Being CDTI the single organisation of the Spanish Central Government that centralises all the national public funding to business R&D initiatives, the coordination mechanisms set up between both public administrations (Government of Castile-Leon and CDTI) has run smoothly along the last two decades, with continuous exchange of information and even joint decision-making mechanisms for the approval or rejection of business applications. An important number of projects from the Castile-Leon have been supported by CDTI since 1978, making this relation essential and special.

Moreover, during the 21 years in which the policies of R&D have been implemented in Castile-Leon, there have been positive changes, sometimes originated internally and sometimes from national and international external agents, addressed to improve the practices carried out and to give added value to the R&D policies of the region. Below we highlight some of the improvements carried out in recent years, which will be key in future policies and constitute an important factor of good practice to keep in mind. These practices have been obtained after an analysis of different strategic plans implemented in the region:

• The first plans developed by Castile-Leon, often focused on direct support to projects or industries in the form of subsidy. This was originally a common practice at national level and, although the results were positive, subsidies have been gradually replaced by funding in form of subsidised loans, to encourage the involvement of private actors in the innovation process and promote the culture of “money creates money” thought the reinvestment of the funds.

• In recent years the crisis has hit the region hard, which has caused many firms to go bankrupt and therefore some projects have been left unfinished, frustrating business goals and getting negative returns on the grants received. For this reason, the government of Castile-Leon has adopted a new policy that establishes that no aid can be granted if guarantees have not been provided previously, thereby limiting the risk assumed by the public administrations.

• Castile-Leon is the second largest community in Spain and has 9 provinces. Some provinces have an economy based on the primary sector, while others count on a more industrialised productive tissue. Depending on the level of industrialisation of each province, there are economical and social differences between the provinces of Castile-Leon. The regional Government has established a solidarity mechanism, analogue to the national one, which redistributes the incomes and budgets to reduce the gap between the provinces.

• Castile-Leon is actively promoting and training R&D and technology transfer experts, that in the future will be able to asses and coach the innovation agents and reduce the “European Paradox” effect, by transforming its success in basic research into commercial success.

4.4 Towards Smart Specialisation Policies

The RDI Strategy for Smart Specialisation for Castile-Leon is the document designed by the regional Government to develop a new science and technology plan for the period 2014-2020. It is a follow-up to the ERIDI. The RIS3 strategy and its


implementation integrate and exploit the synergies between different policies and funding sources at different levels. It is linked to the new National Strategy for Science, Technology and Innovation 2013-2020, and consistent with Horizon 2020.

In order to achieve a competitive position in the global context, the strategic vision for the future of Castile-Leon should focus on enhancing employment and sustainable economic growth, boosting social and territorial cohesion and improving the quality of life. The strategic overall objectives of the Castile-Leon RIS3 follow the path of the ERIDI 2011-2013 and have been redefined according to the SWOT analysis previously stated:

• Strengthening a competitive economic model by increasing the number of innovative businesses and the innovation effort, and stimulating private RDI investments;

• Moving towards scientific and technological leadership in areas of regional specialisation potential, forming a system of science and technology more attractive;

• Improving internationalisation and visibility of the regional innovation system;

• Encouraging multidisciplinary collaboration between knowledge generating agents and knowledge transfer;

• Fostering a culture of innovation and creativity in all social and economic areas;

• Enhancing an efficient coordination system for science and technology.

Figure 27: RIS3 main objectives

Castile-Leon RIS3 main objectives

Entrepreneurial innovation

• Increase of the number of innovative companies • Strengthen the private innovation effort • Enhance a competitive economic model, based on

knowledge • Promotion of sectors with comparative and

competitive advantages • Business growth, development and creation of

knowledge-based companies

Em

plo

ymen

t an

d

sust

ain

able

eco

nom

ic

grow

th

Innovation and creativity culture

• Society awareness • Collaborative innovation • Awareness in less innovative sectors

Internationalisation • Internationalisation of the innovation system • Participation in European programs, etc. • Vocation and outward vision

Soci

al

and

te

rrit

oria

l co

hes

ion

Involvement and collaboration

• Knowledge Transfer • Collaborative research and open innovation

Imp

rov

emen

t of

th

e qu

alit

y of

life

Scientific and technological leadership

• Strengthen leadership in science and technology areas • More attractive science and technology system • Excellent science and education

Dig

ital

A

gen

da Promoting the use of

ICT in all areas of society

• Encourage the deployment of telecommunication networks and services to ensure digital connectivity

• Develop the digital economy for the growth and competitiveness of enterprises

• Enhance e-Government and digital public services • Promote inclusion, digital literacy and training

Management System RIS3

• Coordination between regional Ministries, Business, and Society on research scope and priorities.

• Commitment of the regional governing bodies with competence in science and technology

• Budget effort Source: Agency for Innovation, Funding and Internationalisation of Castile-Leon (ADE)

The study of the economic activities of Castile-Leon shows that the specialisation patterns are defined by six large sectors, which account for 59% of the regional


economy: automotive, components and equipment, agro-food, health, energy and environment and tourism. The Smart Specialisation Strategy has identified four business clusters that can provide competitive advantage to the region:

Figure 28: Castile-Leon RIS3 Industrial Clusters

Castile-Leon RIS3 Industrial Clusters

Strategic Cluster indispensable for sustaining employment and economic wealth

• Automotive • Agro-food • Tourism

Emerging

Clusters benefited from global trends in fields where Castile-Leon has important technology capacities or competitive advantages

• Oncology • Renewable Energy • Aerospace • Chemical - Pharmaceutical • Digital Spanish contents • Care for the elderly • Sustainable infrastructures

Complementary Clusters that need to improve competitiveness

• Mobility • IT Security • Advanced software • Engineering

Advanced Production technology

• Agro-food biotechnology

Traditional Clusters with historic relevance in the employment and economy of the region and are now under restructuration

• Wood and furniture • Natural stone • Fashion-textile


RIS3 priorities of Castile-Leon are a combination of the horizontal objectives and vertical priorities. The first proposal priorities were chosen according to the SWOT analysis stated before and shaped into three regional specialisation patterns where the region has a potential to establish a competitive advantage.

Figure 29: Castile-Leon RIS3 Regional Specialisation Patterns

Castile-Leon RIS3 Regional Specialisation Patterns

Economic pattern

(59%)

Automotive, components and equipment Agroindustry Tourism, heritage and Spanish language Habitat Energy & environment Health & wellness

Main areas

Medicine Biochemistry, genetic & molecular biology Agriculture & biological sciences Chemistry Physics & astronomy

Other areas with high specialisation and impact

Computing science Engineering Immunology & microbiology Materials science Pharmacology, toxicology & pharmacy Arts & humanities Veterinary

Scientific pattern

Related to economic sectors

Agro-food Health & quality of life (drugs production)

Technological pattern KET defined by the

Commission Advanced materials Nanotechnology Micro & nanoelectronics Photonics Industrial biotechnology


Advanced manufacturing technologies

Competitive advantage

Advanced materials (incl. Nano) ICT (incl. Electronics & photonics) Biotechnology Advanced manufacturing technologies


The Commissioner for Science and Technology, working together with the regional departments, universities, clusters, R&D centres and social agents have analysed the international trends and current local needs and have established the following priorities to include in the new RIS3 for Castile-Leon:

• Priority 1: adapt the regional RDI to the conditions of an open economy and improve the link between science, technology, innovation and competitiveness;

• Priority 2: reach the leadership in activities related to the automotive industry, components and equipment that incorporate sustainable technologies and explore the potential of diversity-related and entrepreneurial discovery;

• Priority 3: maximize the potential of the multiple relationships between the food industry and the territory;

• Priority 4: explore and promote social innovation in the field of health and regional development and enhance the heritage and the Spanish language.

The adoption of these priorities is in itself a radical new approach compared to past regional RTD and innovation policies which had a rather horizontal approach in their supporting measures.

Regarding the strategy for Digital Information Society of Castile-Leon, also included within its RIS3, the region has established the following priorities:

• Encouraging the deployment of telecommunications networks and services to ensure digital connectivity;

• Developing the digital economy for the growth and competitiveness of enterprises;

• Improving the effectiveness, efficiency and quality of public services through an intensive use of ICT;

• Promoting digital adaptation of citizenship and social innovation.

The RIS3 draft of Castile-Leon was published in December 2013. Its elaboration has closely followed the approach and steps defined by the IPTS-JRC regarding the focus of the analysis performed, the entrepreneurial discovery process, the setting of priorities and so on. Yet, the defined priorities need to be further detailed into specific support measures and associated performance indicators. It is expected that the RIS3 of Castile-Leon will be definitely approved by the regional government and submitted to the European Commission (ex-ante conditionality) during the first quarter of 2014

The Commission for Coordination on Science and Technology of Castile-Leon is the agent in charge of ensuring the budget coming from the future regional 2014-2020 ERDF Operational Programme is allocated and spent according to the regional strategy. It will also monitor the objectives and priorities achieved by the RDI actions and coordinate the participation of the regional government in national and international programmes. The evolution of the RIS3 for Castile-Leon will be monitored and evaluated by this Commission.

4.5 Possible Future Orientations and Opportunities

Institutional support network for innovation

Consolidating a competitive regional system for innovation in Castile-Leon currently depends on the capacity to effectively adapt the education offer to the training demands required for the creation and management of innovative business initiatives.


Equally important are the regulatory considerations, and especially those that boost knowledge transfer systems and which, despite their relative low performance, form a key part of regional policies aimed at promoting innovation.

Another key aspect is the need to strengthen transport and communication structures characterised by its flexible nature that guarantees the smooth transformation of production systems as well as meeting corporate demands for versatile structures, quality equipment and the right environmental conditions for the various industrial sites.

Financing innovation

In the case of Castile-Leon, responsibility for much of the investment effort in general and innovation in particular lies on the Agency for Innovation, Funding and Internationalisation of Castile-Leon (ADE). In addition to searching for investors, since 2006 this agency has been running a series of programmes to provide aid to businesses, based on technical criteria related to the projects’ suitability and feasibility, as well as geographical considerations.

A look at the territorial impact of these actions clearly shows that the drive and technological intensity of the regional business fabric is generated almost exclusively in industrial hubs where the concentration of tangible and intangible skilled resources favours the creation of numerous innovative initiatives.

If the region aims to create a regional innovation environment, all the agents should make further efforts to extend the R&D culture throughout all the territory of Castile-Leon.

RIS3

“Smart Specialisation is especially necessary in this time of economic crisis, where public budget has been dramatically reduced. It is the best way (if not the only one) to optimise the benefit of public investment in research and innovation. The main expected impact is growth and success in those sectors where the Castile-Leon economy can be competitive in global markets, maybe even changing the regional productive pattern. The key difficulties we foresee are those stemming from choosing: it is hard for public managers to make a choice to concentrate the resources on a few priorities, leaving the rest of the fabric somehow ‘unassisted’, and big pressures from many sectors are expected. It will be a challenge rather than a difficulty to involve the whole civil society in this process through a very open governance system which involves all relevant stakeholders.”

(Mr Gregorio Muñoz Abad, Deputy Commissioner for Science & Technology, Regional Government of Castile-Leon).

Social innovation

Castile-Leon, as many other regions, suffers from a range of social problems that the existing structures and classic policies cannot tackle. These social issues cut across the boundaries between the government, the market and the citizens, and cannot be tackled by the classic tools of government policy and market solutions.

The regional government should follow the recommendations for fostering social innovations of the European Commission and include social innovation as a component of its economic strategies to address the modern societal challenges. Those innovations that are, in their means and their ends, new ideas and create new social relationships help promote, in the long-term, creative solutions for enhancing sustainable growth, securing jobs, and increasing competitive abilities.

Human Resources as benchmark of the R&D strategy

Human capital shapes the social capital through permanent learning-related attitudes, competences and skills and the actual management of knowledge within organisations and society. Skilled human resources are the drive to promote innovation and change


in the business culture of Castile-Leon, but its loss can also end up being a bottleneck that hinders the effective generation of knowledge, as innovation is a continual process of knowledge renewal in technologies, products, processes and work organisation methods.

Although the implementation of the University – Business Strategy for Castile-Leon 2008-2011 substantially improved R&D results and knowledge transfer within the region, it is still necessary to make greater efforts to attract and retain consolidated researchers and integrate the educational system in the research and technology network, to generate new knowledge and training capabilities in the region and optimize existing ones.

Internationalisation of RDI

The Innovation Union Strategy objectives are an unavoidable challenge for the regional Strategy; hence the latter pays close attention to achieving a more intense supra-regional presence for businesses and research groups from Castile-Leon.

The region must integrate its RDI structures much further into the national and international context, and particularly Europe, if its policies are to have greater effect, excellence in research is to be achieved and regional companies are to take an active part in international networks, to ensure the regional RDI system remains at the cutting-edge of knowledge, something a region of the size of Castile-Leon can only achieve through the synergies resulting from networking and national and international cooperation. Specific bodies need to be created to support RDI activity and facilitate the presence of Castile-Leon’s interests in Spanish and European decision-making centres.

Technology valorisation and transfer

Small size of businesses and geographical dispersal are two characteristic features of Castile-Leon which, in turn, may seriously hinder efforts by certain businesses and sectors of activity to develop RDI strategies

The region must strengthen cooperative structures and synergies between players in the science and technology system, enabling them to take on board the necessary skills and competences to perform RDI activities, with a view on knowledge and technology transfer. The result of this cooperation will be new products, more high-quality jobs, and an expanded economy.

Technology transfer includes complex activities such as: processing and evaluating invention disclosures; filing for patents; technology marketing; licensing; protecting intellectual property arising from research activity; and assisting in creating new businesses and promoting the success of existing firms. Thus, the Administration must facilitate the infrastructure, the tools and the assessment necessary to the regional companies in these matters, so that an effective technology valorisation and transfer can take place and be profitable for Castile-Leon.


Appendix A Bibliography Annoni, P. & Dijkstra, L. (2013). “EU Regional Competitiveness Index RCI 2013”.

Joint Research Unit, European Commission. Luxembourg. Available at: http://ec.europa.eu/regional_policy/sources/docgener/studies/pdf/6th_report/rci_2013_report_final.pdf

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Appendix B Stakeholders consulted

1. Mr. Juan Casado Canales, Secretary-General, Education Department of the Regional Government of Castile-Leon (05/09/2013).

2. Mr. Gregorio Muñoz Abad, Deputy Commissioner for Science and Technology, Regional Government of Castile-Leon (05/09/2013).

3. Mrs. Beatriz Casado Sáenz, Deputy Director, Agency for Innovation, Funding and Internacionalisation of Castile-Leon (ADE) (05/09/2013) of Castile-Leon (05/09/2013).

4. Mr. Javier García Díez, Director of the Department of Strategy and Competitiveness, Agency for Innovation, Funding and Internacionalisation of Castile-Leon (ADE) of Castile-Leon (05/09/2013).

5. Mrs. Carmen Verdejo Rebollo, Director of the Department Innovation, Agency for Innovation, Funding and Internacionalisation of Castile-Leon (ADE) of Castile-Leon (05/09/2013).

49

Appendix C Statistical Data

ES41 Castile-Leon Country EU27 Year Performa

nce relative to

Performance relative

to

ES41 ES EU27 EU27 ES

ECONOMIC INDICATORS

GDP per capita (Euros) 22000 22800 24500 2010 89,8 96,5 GDP growth rate - (2000-2010) 4,66 5,23 2,93 2000-2010 159,1 89,0 Long term unemployment rate 6,82 9,00 4,14 2011 60,7 132,0 Labour productivity growth (%) 2,35 2,32 2,20 2000-2010 107,0 101,1 RCI 2013 -0,46 -0,41 0,00 2013 69,3 95,6 Share of employment in agriculture 0,07 0,04 0,05 2011 133,6 157,5 Share of employment in industry (including construction) 0,24 0,22 0,25 2011 95,0 109,0 Share of employment in business 0,31 0,35 0,30 2011 103,7 90,6 Share of employment in public sector 0,26 0,22 0,25 2011 104,1 116,9 Share of employment in S&T 0,07 0,10 0,09 2011 75,7 71,4

RESEARCH & TECHNOLOGY INDICATORS

Employees with ISCED 5-6 (% all employees) 39,3 38,3 30,4 2011 129,1 102,7 Business R&D (% GDP) 130,4 163,2 304,3 2010 42,9 79,9 Government R&D (% GDP) 0,12 0,26 0,26 2010 46,2 46,2 Higher Education R&D (% GDP) 0,39 0,38 0,49 2010 79,6 102,6 EPO patent applications (per mln population) 14,59 30,96 114,99 2008 12,7 47,1 Employment in medium-high & high-tech manufacturing (% total employment) 4,19 4,49 6,39 2011 65,6 93,3 Employment in knowledge-intensive services (% total employment) 32,07 33,89 35,32 2011 90,8 94,6 Total R&D personnel (% active population) - numerator in head count - all sectors 1,63 1,56 1,53 2010 106,5 104,5 Structural funds on business innovations (Euros per mln population) 96,73 92,35 77,74 2007-2013 124,4 104,7 Structural funds on core RTDI (Euros per mln population) 86,19 101,37 63,01 2007-2013 136,8 85,0

LABOUR PRODUCTIVITY

B-E - Industry (except construction) 74.034 70.082 71.853 2010 103,0 105,6 C – Manufacturing 65.877 61.626 56.378 2010 116,8 106,9

F – Construction 57.355 63.128 43.792 2010 131,0 90,9 G-I - Wholesale and retail trade, transport, accommodation and food service activities 37.843 2010 100,0 100,0 J - Information and communication 79.994 2010 100,0 100,0 L - Real estate activities 387.941 2010 100,0 100,0 M_N - Professional, scientific and technical activities; administrative and support service activities

39.717 2010 100,0 100,0

BUSINESS INNOVATION INDICATORS

Technological (product or process) innovators (% of all SMEs) 0,36 0,32 0,40 2008 90,4 112,7 Non-technological (marketing or organisational) innovators (% of all SMEs) 0,29 0,30 0,38 2008 76,7 95,6 Innovative SMEs collaborating with others (% of all SMEs) 0,21 0,18 0,37 2008 56,5 116,2 SMEs innovating in-house (% of all SMEs) 0,28 0,24 0,39 2008 72,1 117,7

i Provisional data

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