Inno-Learning Platform Annual Report Working Towards More Effective Innovation Support in Europe

PRO INNO Europe® paper N°11
INNO-LEARNING PLATFORM
ANNUAL REPORT 2008-2009
WORKING TOWARDS
MORE EFFECTIVE INNOVATION
SUPPORT IN EUROPE
European Commission
DIR EC T ORAT E -G ENER AL F OR ENT ERP R IS E AN D IND USTR Y
PRO INNO Europe® paper N°11
INNO-LEARNING PLATFORM
ANNUAL REPORT 2008-2009
WORKING TOWARDS
MORE EFFECTIVE INNOVATION
SUPPORT IN EUROPE
June 2009
PRO INNO Europe® is an initiative of the Directorate-General for Enterprise and Industry of the European
Commission that combines analysis and benchmarking of national and regional innovation policy performance
with support for cooperation of national and regional innovation programmes and incentives for innovation
agencies and other innovation support organisations to develop joint actions. The initiative aspires to become
the main European reference for innovation policy analysis and development throughout Europe and brings
together over 200 innovation policy makers and stakeholders from 33 countries.
Additional information on PRO INNO Europe® is available on the Internet (http://www.proinno-europe.eu).
Legal Notice
This report has been produced by INNO-Learning Platform as part of the PRO INNO Europe® initiative. The
views expressed in this report, as well as the information included in it, do not necessary reflect the opinion or
position of the European Commission and in no way commit the institution.
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Contents
1. Introduction 05
2. Innovation support in times of economic crisis 07
Safeguarding subsidiarity and effectiveness principles of European innovation

3. support measures 13
Achieving more effective innovation project management through strategic

4. communication and impact measurement 21
5. Conclusions and outlook 32

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1. Introduction
Introduction
The current report presents lessons
concerning innovation support: raising
its effectiveness, and promoting policy
learning and transnational cooperation.
They are the result of activities developed
under the INNO-Learning Platform (ILP)
initiative during the period covering 2008
and 2009 (the second Learning Cycle
of the Platform). The ILP is an initiative
supported by the European Commission’s
Directorate-General for Enterprise and
Industry (DG ENTR) under the PRO INNO
Europe® programme.
The initiative is sustained by the INNO-

Learning Platform Consortium (consisting of
specialists in innovation policy consultancy
and analysis, in information technology
(IT) and website development, and in
process guidance, network management
and organisation of large-scale events),
and the INNO-Learning Steering Group (consisting of representatives of prominent
innovation support agencies throughout Europe, some working on a regional scale,
some working on a national scale). More information on the ILP can be obtained online
(see http://www.proinno-europe.eu/index.cfm?fuseaction=page.display&topicID=
57&parentID=49).
This report aims to provide inspiration to the PRO INNO Europe® community and
all other actors with an interest and stake in innovation policy and innovation-
related cross-border learning and cooperation, like EU and national innovation
policy actors, innovation agencies and cluster organisations.
The aim of the ILP is to improve the effectiveness of innovation support in Europe by
stimulating more and better transnational cooperation among innovation agencies
across Member States and regions. In order to effectively exploit the European
innovation potential, the ILP explores the added value of targeted transnational
cooperation at programme level between Member States and regions.
As such, the Platform aims to tackle problems faced by individual public funding
agencies that support innovation, notably through nurturing synergy effects across
Europe between authorities and agencies working in this area. To this end, the
ILP identifies and exchanges successful practices, thus fostering a more receptive
transnational innovation cooperation culture in Europe.
The Platform was conceived as an ‘incubator’ for innovation support ideas and
partnerships, exploring the scope for transnational cooperation in the field of
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innovation. It has an experimental nature and aims to provide insights for the
Introduction
formulation of future INNO-Nets and other possible forms of cooperation in

preparation of upcoming calls to be launched under the PRO INNO Europe®
initiative of the European Commission. The ILP delineates and analyses barriers
and opportunities in selected fields of innovation, resulting in the identification of
suitable forms of transnational collaboration at European level. In this sense, the
Platform can be perceived as an instrument to carry out ex ante impact assessments
for future areas of joint European transnational innovation cooperation activities,
while also testing the interest of stakeholders in participating in these activities.
The ILP work programme is structured along three Learning Cycles. This Annual
Report presents the main lessons that were retained from the second Learning
Cycle with regard to the following topics:
• the financial crisis and its impacts on and implications for innovation policy
making and innovation support measures;
• testing European innovation support measures on subsidiarity and effectiveness

grounds; achieving effective innovation project management through strategic
communication and measuring of impacts.
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2. Innovation support in times
Innovation support in times of economic crisis

of economic crisis
The global financial crisis started to unfold in the US around 2006, having a
negative effect on the world’s financial system, all national economies, and
consequently the global economy, which have begun to lose momentum
significantly. Also in Europe, most economic growth forecasts have been revised
downwards, as a clear sign of the difficult times ahead. In terms of research and
development (R&D) and innovation, the crisis is likely to undermine the growth in
R&D investment experienced in the EU over the past years. Evidence from past
crises shows that R&D suffers from recession periods. Thus, on the one hand, the
current crisis can indeed imply a reduction of R&D spending and a brake for
innovation. On the other hand, crises can also bring about great opportunities, as
periods of upheaval are generally favourable for bringing about revolutionary
innovations. In fact, innovation appears to form an important ingredient in the
recipe needed to get out of the crisis.
Consequences of financial crises typically span a long period, as witnessed from

similar crises in the past. For instance, the weak economic period that started
in autumn 1987 and culminated in the collapse of the Dow Jones index, lasted
approximately six years, until 1993. An important difference as compared to
previous crises, however, is that all geographic markets around the globe (including
those of Brazil, Russia, India and China or BRIC) and other emerging economies) are
highly affected by the crisis. In fact, the whole global economy — in a geographical
sense — is suffering from setbacks.
Conventional wisdom suggests that the current crisis

will have a negative impact on R&D and innovation...
Conventional wisdom has it that the current financial crisis will have a negative impact
on R&D. This would be especially so if the result is a sustained deep recession or an
ongoing limited access to financing funds. Likewise, conventional wisdom might
suggest that business, governments, capital providers and academic institutions
will be less willing to embrace the risk-taking activities and costs that accompany
innovation initiatives. The evidence of past crises demonstrates that R&D is almost
always suffering from recession periods, and thus the current crisis could imply a
standstill or even a reduction of R&D spending and a brake for innovation.
…but from a ‘creative destruction’ perspective,

it could have positive effects
However, the current crisis is a complex matter and can have multiple impacts.
In line with Schumpeterian creative destruction concepts, it can even have
positive effects, since for some companies the economic crisis may actually
provide a stepping-stone to explore and exploit new growth horizons.
Loss of revenue and profit will at first instil a cost-cutting mentality, which
can reduce R&D or innovation activities. Nevertheless, there will still be an
interest on behalf of companies to explore whether innovation can help
them improve their market positions and whether innovation can in fact give
them a competitive advantage in times of crisis. From a product and service
development perspective, times of upheaval are generally good times for
innovation. If people are safe and sound, they are unlikely to try new things or
make significant changes. If they have a ‘burning platform’ on which they are
standing, then they are much more likely to embrace and try new ideas. A lack
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of urgency is one of the top reasons people do not change; thus, in line with
this vision, times of turmoil can be good for innovation.
Therefore also, it is of paramount importance to distinguish between ‘what needs

to be done in order to survive’ and ‘what needs to be done in order to arise from
the crisis stronger than before’.
In fact, investments in R&D and innovation are vital to ensure that companies can
weather the crisis storm and are prepared to (re)gain market shares, and can keep
conquering markets with consumer-responsive products and services.
Shift from traditional supply-side policies

to demand-side innovation policies...
The challenge at policy level is also to identify and implement R&D and innovation
policies that help unlock demand potential and to make tacit market demands more
understandable. Here, demand-side policies can play a significant role. Besides
providing money for collaborative (industry-led) research, resources can also be
allocated to create a demand for innovative products, services and solutions, or to
articulate such a demand in a better way (cf. the Lead Market Initiative). Therefore,
policies should contribute to creating and enhancing demand. Governments
can also boost innovation activity through (expanding) practices of innovative
procurement, i.e. going against the tide of choosing the most economic bidders in
times of (financial) crisis.
…and take advantage of the opportunity created

by the current crisis to speed up important reforms needed in Europe
While the crisis is unquestionably undesirable, it also presents a great opportunity

to speed up those structural reforms that were very difficult or impossible to
implement during better times. For example, the whole Lisbon process has suffered
in most Member States from the inability to implement structural reforms. Now is
the right time to introduce policies that facilitate a more effective preparation for
the future.
Recommendations for policy-making

In order to enable European businesses to ‘rise from the crisis stronger than before’,
policy intervention must recognise the unique role of R&D and innovation, and
must intervene with simultaneous manoeuvres on several fronts/domains, as
explained before.
1. Consolidate R&D spending patterns
Public R&D budgets should not be downsized. On the contrary, it is highly

recommended that all Member States maintain or increase their budgets for
R&D support. A good example among Member States is Finland. The Finnish
government has announced plans to increase R&D investment to 4% of the
country’s gross domestic product (GDP) in an effort to combat the recession as
quickly as it did in the early 1990s (1).
Consider an enlargement of the available funds (in size), a sharper focus on

innovative companies and sectors, and a concentration on the best-performing
innovation support schemes. The latter also entails speeding up the implementation
1 Finland quickly shook off the recession in the 1990s, primarily due to heavy support for R&D.

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of agreements from the past: this would make promised funds more quickly available

now. Similarly, simplifying application procedures for funding is a necessity. Also,
the use of pre-payments should be considered under the current circumstances.
2. Enhance mobilisation of private/venture

capital for innovation
Private equity funding should be encouraged, to ensure that a critical financial
mass to support innovation remains available. Public bodies could be called upon
to stimulate banks to adopt a pro-innovation posture.
As the venture capital sector is downsizing and the ones to suffer most from this
will be small and young companies, in a number of countries the public sector
has already started to encourage the venture capital community to remain active
in supporting innovation activities. There are also cases of regional development
companies becoming active in providing and/or arranging seed capital (e.g. the
Flemish ARKimedes fund or the INNO-Deal project).
An interesting fact that has been recently observed is that after the slowdown of US
markets, US investors are increasingly looking elsewhere for interesting deals. This
could be a good opportunity for innovation initiatives in European Member States
that aim at reducing the risk of relocation of high-potential start-ups.
3. Restore confidence among companies,

particularly among SMEs
The financial crisis has also provoked a crisis of confidence among consumers and
business, especially among small to medium-sized businesses (SMEs) whose
economic potential has been thwarted. According to latest EU surveys, business
confidence amongst firms has fallen much lower than expected (2). In the short
term, large companies are expected to focus on their core businesses and continue
to fund R&D spending in these areas, whereas small, specialised firms that play an
increasingly important role in R&D are likely to be hit hard by the crisis, particularly
if their innovations are incremental and linked to engineering projects with clients.
Keeping inter-firm innovation textures intact is crucial for the long-term innovation
capacity of individual companies, since innovation is becoming less and less a
single company affair, and more a network affair. Therefore, any ‘network loss’ will
aggravate availability and effectiveness of innovation potential in clusters and
sectors. In that regard, subsidiaries of foreign multinational enterprises (MNEs) are
also highly valuable. Although MNE subsidiaries do not often engage in strategic
research themselves, they are important catalysts for innovations at surrounding
clusters of SMEs. Therefore, their prolonged (or new) presence in European
countries is of high importance.
SMEs need to react quickly to changing market conditions and it will be their ability
to reinvent themselves that will make the difference (maybe through restructuring
their businesses, reviewing product ranges, implementing new sales and marketing
activities, undertaking joint ventures, investing in skills and training, developing
creativity, etc.). On the policy side, European institutions and Member States
should restore confidence in the markets and use policy levers, fiscal policies, and
structural and financial market reforms to lessen the negative effects of the crisis
on SMEs. The European Economic Recovery Plan launched in 2008 is a step in this
direction and deserves quick implementation.
2 See http://ec.europa.eu/commission_barroso/president/pdf/Comm_20081126.pdf online.

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4. Increase the support to SMEs to reduce

the effects of the credit crunch on R&D

and innovation investments
The financial crisis has made it more difficult and costly for SMEs to receive credits
and loans, thereby cutting down a vital source of financing. Policy intervention
should be intensified at minimising the effects of the credit crunch on SMEs’ access
to finance by ensuring that enough liquidity is available for R&D and innovation-
related investments.
It would be advisable to promote support services to SMEs as, for instance, financial
coaching or monitoring (through the definition of standards) to uncover effective
harm caused to SMEs.
Ad hoc support to young innovative companies, which are crucial for maintaining
and strengthening the EU’s competitiveness, is needed, as they are most affected
by crisis. In fact, young innovative companies with high risk and without reputation
will suffer the most as banks will be even more reluctant to provide loans to more
risky projects like innovative ventures and start-ups.
Due to the worsening economic outlook, the Small Business Act (SBA) (3) is now
even more important than it was when it was conceived. SMEs must be given the
right to be able to prosper in business through SME-friendly regulatory conditions
(reduction of administrative burdens, access to public procurement and state aid).
All policymakers, both at European and national level, must therefore act to ensure
that the measures contained in the SBA are implemented as soon as possible (4).
5. Initiate the necessary

structural reforms to relaunch
and enhance national
innovation systems
The necessary structural reforms must be designed
and implemented, that will allow innovation
support systems (including institutional structures
for education, research, labour markets, etc.) to
move to the next level in supporting businesses
both in effectiveness and efficiency. This could
be achieved through a national strategy process
accompanied by the design of an action plan that
is endorsed by government, industry and other
innovation stakeholders.
3 The Small Business Act for Europe, adopted in June 2008 reflects the EC’s political will to recognise the central role
of SMEs in the EU economy, and puts into place a comprehensive SME policy framework for the EU and its Member
States. It aims to improve the overall approach to entrepreneurship, to anchor the ‘Think Small First’ principle in policy
making, and to promote SMEs’ growth by helping them tackle the problems which hamper their development.
4 Source: extract of UEAPME’s President’s declaration on how SMEs can lead Europe out of the crisis (October 2008).
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6. Focus on demand-side policies

There is room for additional demand-side initiatives, which enhance innovations
further. Typically, innovation policy in Europe has been focused on the supply of
researchers and innovations. However, broader packages of solutions and policy
mixes can be explored: systemic policies, regulation/laws, public procurement
(cf. Lead Market Initi--ative). An example would be the harmonisation of national
regulations and aggregation of national purchasing acts whenever it makes sense in
terms of EU-wide demand for new products and services (e.g. in view of economies
of scale and interoperability). Similarly, government policies could be coordinated
to source new products and services from suppliers, small and large, and to make
universities and academics more responsive to markets and applied research (5).
On the whole, demand-side policies should aim to provide incentives to purchase

innovative, risky products developed by the European knowledge base. That way,
active technology exploration and exploitation via demand pulls can maintain and
develop crucial knowledge bases.
7. Focus on R&D-intensive sectors
As the capital markets become more cautious and the opportunities to raise capital
become less obvious, companies are going to be faced with difficult decisions
about which activities/areas they should focus their efforts on, how many people
are needed to move these activities forward, and how are they going to create
value from these activities with fewer resources. While this is always the case, the
inability to raise capital will compel companies to make these decisions sooner.
According to EU Science and Research Commissioner Janez Potocnik, there should

be a focus on climate change, green and other socially important issues that require
sustained R&D investments and that will continue after the crisis. Commissioner
Potocnik stated: ‘[…] investment in innovation can help to relaunch the overall
economy, because major societal challenges such as security of energy supply,
food safety and climate change will remain relevant long after the resolution of
the financial crisis.’
The wild card will be the new class of green-tech investments — they will boom
even in difficult times because of the shift in the oil prices and the deep attitude
changes around energy and the environment.
8. Increase policy focus on industrial clusters support
Despite the apparent decrease in participation of firms in clusters in certain

Member States, countries with a long tradition in building and managing clusters
are witnessing positive outcomes for their cluster structures in these times of crisis.
By incentivising companies to cooperate and innovate together and provide money
for this, cluster structures act like money deposits that offer an advantage over
centrally managed public funds (or banking funds), as available money can be
allocated faster. In times of a (financial) crisis, this is certainly an important issue.
The presence of clusters or the ability of regions to create clusters from available
resources also helps to attract foreign investors. Moreover, clusters have also proved to
5 Source: ‘Innovation: The Demand Side. New ways to create markets and jobs in Europe’. The Science|Business
Roundtable (http://www.sciencebusiness.net).
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be a good instrument with which to move into new industrial fields in which a region
or country was not previously specialised. For example, in one region the presence
of an industrial basis in plastics, information and communication technology (ICT),
mechanical and electronics engineering (mechatronics) and automotive technology
allowed for a cluster for medical appliances to be set up. This also illustrates that
clusters offer possibilities for economies to enter into new lead markets.
As illustrated by this example, there are grounds to promote cluster formulas

further as they can be ‘useful medicines’ in times of crisis, acting as intermediaries
to retain and attract actors, knit them together and move jointly into market-driven
and business-oriented directions.
Finally, open and partnership-based innovation constructions are also an attractive

means to undertake innovative actions as they enable risk sharing and lower costs.
Public-private partnerships are also a good means to increase cooperation between
business and universities in R&D, foster more effective working routines between
them, and make public research more responsive to market demands.
9. Raise societal propensity to innovate
With financial possibilities being reduced at large due to the economic crisis,
including the space for innovation policies, it is necessary to boost society’s
consciousness of the importance of innovation and the need to not cut back
on innovation support. Engagement of the wider public in innovation thinking
is also an important ingredient in preparing the next generation of innovators
in Europe and making people more innovation-minded. Public comprehension
and support for innovation as a sine qua non for societal and economic sanity
is important to help keep policy makers’ means to provide innovation support
measures undiminished.
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3. Safeguarding subsidiarity
Safeguarding subsidiarity and effectiveness principles of European innovation support measures

and effectiveness principles
of European innovation
support measures
The financial crisis and the credit crunch that has been spreading have also
strengthened the need for policies to demonstrate their usefulness and effectiveness.
As was argued under the financial crisis debate, although innovation may be part
of the solution out of the crisis, now more than ever before, policies to support
innovation need to convince the political and societal communities of their efficacy.
This is a consequence of the fact that public means have become less abundant and
fall under stricter scrutiny before final allocation decisions are taken. The former also
implies that different policy domains (innovation, education, infrastructure, spatial
planning, public health, etc.) have to prove their value more clearly and have to
negotiate over budgets that are now tighter than before in a political arena where
priorities must be set, as not all public domains can be (generously) attended.
In line with the former context, and in order to improve innovation policy in
Europe in general, it is important to assess whether innovation support measures
that are (considered to be) implemented at EU level are indeed best allocated and
organised at this level. In other words, it is important to question ex ante what the
appropriate level would be for (designing, coordinating, funding, implementing,
supporting, and evaluating) certain types of intervention, and also, to question the
effectiveness of possible interventions.
To test the legitimacy and added value of transnational innovation support

measures, during the second Learning Cycle the INNO-Learning Platform devoted
considerable effort to developing a legitimacy check, a subsidiarity test and an
effectiveness test.
Legitimacy check
Testing policy support measures on legitimacy grounds concerns the question of
whether the grounds for public intervention are fulfilled (6). This is principally the
case if there are market failures or network failures and the private market sector
itself is not able to correct the failures in play, and the policy support measure is
targeted at overcoming or diminishing the negative impacts of such failures (7).
Typically, in these situations, when leaving initiatives to the private market, too little
(innovation) activity and or investment will be the outcome. If private activities and
interactions lead to insufficient investments in innovation and too few innovations,
there is a case for public support.
Market failure
A market is a social arrangement through which people can interact with each
other and exchange goods and services for money to their mutual advantage. In
well-functioning markets, the price mechanism ensures that supply meets demand
at prices that reach equilibrium levels. If a number of specific restrictive conditions
are met, this mechanism leads to a welfare optimum.
6 Based on Mini-study 2, ‘Policy rational for innovation support’, and Mini-study 4, ‘Complementarities between
regional, national and EU support instruments’.
7 Alternatively, if a good or service has a collective or public good character and the private market sector cannot supply
the collective good in question in a manner optimal for society, there is also a justification for policy intervention.
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Innovating firms are active in a variety of markets: markets for products, for
technologies, for (educated) labour, for finance. Often, markets function far from
perfectly — all of these markets may fail to deliver a welfare optimum for various
reasons: (1) information imperfections (lacking or costly information) or information
asymmetries (giving rise to risks of opportunistic behaviour: problems of adverse
selection, moral hazard, asset specificity); (2) externalities (spillovers); and (3) entry
barriers (e.g. due to scale economies or regulation) or other sources of market
power. To be more precise, particular failures in the following markets that may
hamper reaching a welfare-optimal investment in innovation are as follows.
• In the technology market: externalities (technology spillovers) — the

appropriability of technology is imperfect due to the difficulties of enforcing
property rights in this market; therefore firms fail to recoup the full returns
to their investments in innovation, leading them to under-invest. This can
provide a base for innovation support services like the support to intellectual
property rights (IPR) protection and the enforcement of ownership rights.
• In the product market: the existence of market power — lack of competition

reduces incentives to innovate. This can provide a base for the innovation
support services that address the demand side, directly support R&D activities
or support new market entrants.
• In the financial market: information problems — the inherent riskiness of

innovation projects and asymmetric information combined with a lack of
collateral deters investors.
• In the labour market: information problems — the threat of opportunistic

behaviour (both on the side of the employer and the employee) may prohibit
relation-specific investments in expertise needed for innovation.
System/network failure
Innovation activities in the private sector are sometimes organised by enterprises

on their own, but more frequently through (informal, cooperative) networks of
enterprises and other actors. Like a market, a network is a social arrangement to
accommodate exchange between agents (mostly of information and services).
Unlike market exchange, exchange in a network is characterised by giving in
exchange for an uncertain return (uncertain with respect to when, how much and
even by whom). Networks function on the basis of trust and reciprocity.
Innovation networks link enterprises to other firms, to knowledge providers

(universities, research institutes), and to government agencies (8). Also networks
may fail for various reasons. First of all, there may be gaps in the network: missing
actors (e.g. lack of intermediaries, lack of specific competences) or missing links
between agents (missing information transfer). Missing actors may be due to
information failures (lack of transparency) or lack of openness (incentives to
exclude new actors to join a network, e.g. to monopolise returns or public support,
which may lead to the barring of new ideas and ‘lock-in’). Missing links may be due
to lack of information, poor selection mechanisms or misalignment of incentives,
for example.
Secondly, the network mechanism itself may function badly. As networks are informal
mechanisms based upon trust, they are particularly prone to the threat and the
8 A variety of network types exists at the national, regional or sector level. The actual network failures among those may
differ and so may the appropriate policy intervention. For instance, public intervention that is called for in a region
without a university differs from policy in a region with many universities.
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fear of opportunistic behaviour. Fear of opportunism hampers a network’s ability to

function when the stakes are high in combination with a lack of shared experience,
mismatched expectations, previous adverse experiences, and cultural barriers.
Subsidiarity test
In order to test policy support measures that are allocated at EU level on subsidiarity
grounds, a first requirement that must be met is the ‘principle of conferral’. This
principle states that the European Union shall only act within the limits of the
competences conferred upon it by the Member States with regard to innovation
policy. The Lisbon treaty specifies that industrial policy, which includes innovation
policy, is a competence that is shared between the European Union and the
Member States. More particularly, the EU has the competence to coordinate, to
supplement and to support actions in this field by Member States. This implies that
in this policy area the initiative lies with the Member States and the Union should
only complement the actions of Member States. Subsequently, the ‘principle of
subsidiarity’ should be respected. Under the principle of subsidiarity, in areas which
do not fall within its exclusive competence, the Union shall act only if and insofar
as the objectives of the proposed action cannot be sufficiently achieved by the
Member States, either at central level or at regional and local level. Instead, it is
plausible that the objectives of the measure are best served when undertaking
action at (a coordinated) EU level.
It should be noted that the principle of subsidiarity does not imply that competences
for specific fields of policy are to be allocated exclusively at a single level of
government. As the competence of the Union in the area of innovation policy is to
coordinate, supplement and support, it implies that if there is innovation policy at
the EU level, it should be additional to innovation policy at lower levels.
Accordingly, the subsidiarity test is a tool to check whether this shared competence
and complementarity is respected by transnational innovation support measures.
This is notably done by weighing costs and benefits of EU involvement in the
measure. In concreto, implementation of a policy action at the EU level can yield
benefits if it:
• addresses specific cross-border aspects of market or network failures (9);
• exploits scale economies in policy making or policy implementation;
• internalises policy externalities (international spillovers);
• brings together the necessary resources (finance, knowledge, etc.) to

implement the policy action;
• stimulates international policy learning and diffusion of best practice

measures.
9 If the policy issue to be addressed has no cross-border aspects (e.g. externalities that affect agents across national
borders), one may doubt whether there will be much (political) support for EU involvement in the first place, although
there may still be benefits to be gained or economies of scale to be exploited from implementing policy at EU level.
For instance, Europe might attain efficiency gains by having only one central agency collect all taxes in a uniform
way (i.e. exploiting scale economies), but nevertheless taxes are collected by 27 national agencies and rarely is it
considered that this should be done differently.
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These potential benefits have to be balanced against the potential costs of lifting a
policy action to EU level. The costs of implementing policy at EU level are mainly
related to loss of heterogeneity. Implementing a policy action at EU level can
involve costs as it:
• is less adapted to local circumstances;
• creates dangers of loss of opportunities for learning from a diversity of

experiences;
• reduces the incentives for policymakers to engage in policy competition.
Effectiveness test
The effectiveness imperative refers to the fact that the transnational character of an
innovation support measure should bring net benefits to the innovation community
in Europe compared to the situation in which the measure would be organised at
regional or Member State level. In concrete terms of effectiveness, the issue is whether
current mechanisms at EU level (the INNO-Nets and INNO-Actions under PRO INNO
Europe® as well as the Open Method of Coordination (OMC), ERA-Net / ‘ERA-Net
Plus’, the Enterprise Europe Network, the Seventh Framework Programme or FP7) are
effective in promoting innovation. In this regard, the ultimate goal of mechanisms
like the INNO-Nets is to go beyond mere policy learning, and advance to the stage
of joint policy design and implementation (i.e. the setting up of joint innovation
programmes). By extension, INNO-Nets should be designed in such a way that they
enjoy the back-up of stakeholders from different levels. The effectiveness imperative
should likewise take the policy making context into account and verify whether
EU innovation support actions are well aligned with other EU initiatives (horizontal
alignment) and Member State and regional initiatives (vertical alignment).
Concretely, the effectiveness test helps to establish whether specific policy measures
are governed at the right policy level.
In considering the policy action under scrutiny, the following significant issues arise.
• Stakeholder support: the extent to which the policy action is supported by the
major stakeholders involved and affected and the extent to which the policy
helps various stakeholders in achieving their goals.
• Additionality: the extent to which the policy action adds to rather than
replaces existing policy actions (at the same or other levels of government),
and to which public money ‘crowds out’ private money.
• Efficient delivery: the costs of delivering innovation support, i.e. both the
internal administrative costs (e.g. costs of policy design and implementation
on the part of the government agency, implementation and monitoring costs),
and the external administrative costs, borne by prospective beneficiaries (e.g.
application costs, waiting times and administrative burdens).
In addition, it is useful to consider the policy action as part of a system of

innovation support policies and to look at the degree of complementarity with
other policy actions. Here, one can distinguish between two types of alignment,
as explained below.
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• Horizontal alignment: the degree to which the policy action is aligned with

policy instruments that operate in parallel at EU level (e.g. those falling
under the Framework Programme or FP, the structural funds (SF) and the
Competitiveness and Innovation Framework Programme (CIP), but also those
in other policy fields like competition policy or labour market policy); and
the possible occurrence of lacking coordination, overlap, incoherence or
interference, and redundancy.
• Vertical alignment: the degree to which the policy action fits in with policy
instruments that operate at Member State and regional level; and the degree
of complementarity and mutual reinforcement between these.
In the format of a flow chart, the combined legitimacy check/subsidiarity test/

effectiveness test runs as follows.
Figure 1. Flow chart on subsidiarity and effectiveness test

for innovation support measures
Legitimacy check
Is there a market or network failure?

Are we talking about a collective/public good?
yes no
no
Is government intervention appropriate
No government action
to resolve this?
yes
no
Are there net benefits to action
Action at MS and/or regional level
at EU level?
yes Subsidiarity test Effectiveness test
What are the benefits of EU-level action?

• Cross-border aspects Quid operational modalities and back-
• Scale economies up from audiences of interest:
• Mobilisation of necessary resources • Is the action supported by the

• International policy learning effects major stakeholders?
• Dissemination of better practices • Is the action offering additionality

vis-à-vis the private sector?
• What are the delivery costs of
What are the costs of EU-level action? the action (initiator(s): design,
• Lack of adaptation to local implementation, monitoring;
circumstances beneficiaries: application and
participation administration)?
• Less opportunities to learn from
diversity of experiences • Alignment with EU- and MS-level
initiatives?
• Low incentive for policy
competition
Recommendations
• Reinforce stakeholder support

• Increase additionality or leave more to the market
• Reduce delivery costs by diminishing the administrative burden
• Improve horizontal and/or vertical alignment with relevant policy context
• Review EU involvement in action: devolve responsibilities to other policy levels
Source: INNO-Learning Platform consortium.

18
Test applications
During the second Learning Cycle, the above test apparatus was applied to the
following EU innovation support measures:
• Cluster-IP (the European Innovation Platform for Clusters)
• European Cluster Observatory
• IPR Helpdesk
• Enterprise Europe Network
• European Cluster Alliance.
The test on the Cluster-IP represented an ex ante test case and the test on the
European Cluster Observatory embodied a mid-term review bridging the running
of the standing observatory and the follow-on (Phase II) version as it would be
continued under the Cluster-IP activity. The other three tests were conducted on
largely consolidated innovation support measures.
Results
In terms of learning obtained from these test exercises, the following can be
highlighted.
The legitimacy check and the subsidiarity test are generally passed and the reviewed
support measures are rightfully governed/coordinated at EU level.
However, on effectiveness grounds, the test provides more mixed results.
On the positive side, we observe that most projects succeed in creating critical
mass and agglomeration advantages to stakeholders via European approach. Also,
most projects contribute to transnational learning and exchange and they enlarge
the outreach for dissemination and counselling that is achieved (cf. Enterprise
Europe Network and IPR).
On the negative side, we establish that many projects rely insufficiently on the
market. The public-private partnership component ought to be strengthened
where possible; otherwise there is a risk of market distortion and the crowding
out of private initiative. There is also often an insufficient mapping of and aligning
with the relevant policy context, which leads to limited policy learning and synergy
effects. It also leads to the risk of policy or support redundancy and overlap (10). In
addition, certain support measures appear to build weakly on stakeholder interests.
A liability that may follow from this is that one ends up with a policy support
measure that risks having a low impact for potential beneficiaries. In tackling market
imperfections in play, one should go for an integrated solution and should not
provide partial remedies. For instance, if information shortage (market failure) and
lack of interaction (network failure) are both the case, a support measure should
tackle both and not just the information asymmetry involved. Or alternatively, it
should align with other measures that intend to improve networking behaviour.
10 Please note that overlap as such is not a bad thing, as it also prevents gaps from occurring if policy makers intend to
go for seamless support packages.
19
Furthermore, the effective dissemination and communication of results also remains

a point needing attention in most cases. Especially in the case of pilot actions, it
implies that the lessons learned from it should be spread via a powerful
dissemination strategy, so as to preserve equity and not favour the ‘in crowd’ over
the larger population of potential beneficiaries.
Finally, a shortcoming detected among some of the measures screened is that

they are too generic in nature, do not address questions that really matter and
prevent a more specialised market from getting off the ground. In such cases,
free-of-charge support may also prevent capable private actors from developing
business on a quid pro quo basis. Consequently, policy support runs the risk of
preventing additionality effects on the private sector from coming into effect and
from insufficiently tailoring services to SMEs’ true needs. The latter also puts a
mortgage on support from business stakeholders for such policy support initiatives.
It is, however, not too difficult to find solutions for these situations. For instance,
one can apply ‘sunset clauses’ for a pilot action and a routine review to justify and
describe the support services concerned.
Further issues arising from the test applications show that they have proved their
relevance for:
• appraising (legitimate) reasons to support (service) innovation;
• delineating EU mandates in supporting (service) innovation;
• assessing adequacy of EU measures to support (service) innovations;
• fostering synergies among EU (and Member State) support schemes, e.g.

through mapping the policy, stakeholder, target audience and market context
of support measures.
20
21
4. Achieving more effective
Achieving more effective innovation project management through strategic communication and impact measurement
innovation project
management through
strategic communication
and impact measurement
Improved effectiveness
through strategic communication
In November 2008, the ILP dedicated an INNO-Nets and INNO-Actions review
meeting to the theme of valorising the results of transnational cooperation projects
with regard to innovation support by means of communication and dissemination
activities.
The rationale behind this thematic choice was the fact that communication and
dissemination activities to promote the results of projects like the INNO-Nets and
INNO-Actions are central to the success of the PRO INNO Europe® initiative.
Also, communication is deemed a prerequisite for a wider exposure to the outcome

of the projects and for producing an impact with regard to innovation support
beyond the perimeter and work of the direct stakeholders in a project.
Furthermore, in the context of the European Year of Creativity and Innovation

2009, it is also germane to look at more creative views on project communication
and to try to reach out beyond the traditional innovation community, notably to
society and citizens at large.
Building upon the experiences and achievements of the 2006-2009 INNO-Nets and
INNO-Actions and the discussions during the November 2008 review meeting, the
following issues are considered important for innovation project communication
when it comes to valorisation of their results.
Communication can be a value-generating activity
Communication activities should not be considered as an unpleasant side effect

of engaging in a contractual obligation for transnational cooperation projects.
Instead, they should be viewed as an opportunity to disseminate the achievements
and transferable results to others than the immediate stakeholder or beneficiaries,
thereby increasing the impact and spill-over effect of the activities undertaken
and the tools developed. Moreover, effective communication can also be of more
direct benefit to project participants themselves. Well–thought-through and well-
framed messages can attract interest from external parties, enhance the reputation
of project participants at local, national and international level, draw the attention
of policy makers and potential investors and/or generate market demand for the
developed products and services. Effective communication can also extend the
life of a project beyond the end of the EU funding, thus allowing for a successful
‘exit strategy’.
22
Interesting examples to mention in this regard are the Tech SME Partnering, EASY
(Early Stage Investors for High Growth Business), and ip4inno INNO-Actions, which
have deployed communication strategies in order to support the creation of
commercial value for stakeholders involved in their activities and to make project
outcomes and deliverables outlive the duration of the project itself.
Tech SME Partnering organises ‘academies’ to connect researchers to SMEs on a

transregional scale. It enables researchers to discover the commercial value of their
research at a transnational level. As it turned out that it was not easy to engage
scientists in communicating with business media, especially across national borders,
the project made extensive use of webcasts, which helped to connect scientists and
entrepreneurs more easily across national borders (11).
EASY facilitates (12) venture capital funding for companies from investors outside
the companies’ own country and thus proves that a single market in early-stage
investment is possible. To gain momentum, the project provided regular news
from participants in the previous investment forums through its website, which
stimulated more registrations for the following events.
Communication can also give a ‘second life’ to the fruits of a project. One example
is ip4inno (13), which aimed to increase the understanding and usage of intellectual
property by SMEs. The project has developed an extensive pool of articles, case
studies and background files, which are of interest to business magazines, especially
those dedicated to SMEs. Consequently, media organisations can be included
among the actors/outlets to take into consideration for an exit strategy with regard
to the project deliverables and outcomes.
Media can also help in giving airplay to project results and to create and match
supply and demand. For instance, IP issues have become increasingly important in
the business world. The irony is that SMEs that look for certain types of information,
and services may not always know what is on offer ‘out there’ and may not know
how to find it. In this regard, the media can play an important role in stimulating
the demand for services developed by a PRO INNO Europe® project.
Communication can play a strategic role in reaching project goals
Provided that communication can contribute to the valorisation of the project, a

communication strategy is needed from the outset. It is also important to be aware
that communication is much more than just dissemination, the creation of websites
or media exposure. In fact, communication has a structuring and capacity-building
effect and should be treated accordingly and receive the corresponding space and
resources within a project plan. It can lay the foundation for the smooth functioning
of project organisation.
Project consortia should invest in communication among consortium members to

create cohesion, a sense of belonging, trust among the partners and consensus on a
shared cause, so that all stakeholders cooperate in an effective and targeted way. This
has been of particular importance to the Central and East European Cluster Network
and the INNET INNO-Nets. By means of successful internal communication, project
partners have developed a strong and mutually shared understanding of the
objectives of their project. This allows them to send out a more uniform and clearer
message about the project to the outside world, to be more determined in achieving
the project goals, to be more active in promoting the project externally, and to
transmit a ‘project identity’ and thus enhance its visibility.
11 In terms of metrics, each participant in the academies and forums organised by the project reported on average four
promising contacts. With figures exceeding 3 000 participants, this means around 12 000 contacts to be followed up
as a result of the 14 academies and 8 forums organised by SME Tech Partnering.
12 For metrics, see http://www.earlystageinvestors.org/index.php?option=com_docman&task=doc_
view&gid=103&Itemid=33 online.
13 See http://www.ip4inno.eu online.
23
In addition, it turns out that projects that have deployed communication strategies
towards actors beyond the immediate project stakeholder community are most
effective in making an impact in terms of awareness raising and influencing policy
decision-making and behaviour of innovation agents. This definitely is something
to take into account as it directly interrelates with most projects’ strategic goals.
There is no ‘one size fits all’ approach to communication strategy
Communication is not a generic or mass-market article; it should be tailored to the

intrinsic characteristics of a project and to the audiences it targets. Transnational
cooperation projects in support of innovation all need different degrees or mixes
of local-for-local and pan-European communication strategies, for example. In the
same way, the audiences of interest may vary from a sectoral perspective and on a
public-private continuum.
Each audience configuration requires its own approach, each with their own
optimum in terms of marketing mix and communication channels, to make
communication effective. Consequently, projects such as INNO-Deal (concentrating
on the creation of networks of innovation actors focused on finance within regional
settings), ADMIRE (which organises Design Management Award contests for
innovative companies from across Europe), Innovation CIRCUS (which aims to raise
innovation awareness by taking it on to the street) all designed and used highly
different communication strategies to be effective.
What is important in all cases — irrespective of the audience one communicates to

— is to place oneself as communicator in the position of the receiver of messages,
to make sure the message gets to the individual. Communicating in the individual’s
language and making sure that what the project has to offer to the individual is
understandable from the mindset of the receiver and makes sense, being of vital
importance. In this regard, simple but imaginative language is what matters to
young audiences, money talks to the business community and policy makers are
interested in public benefits. This may require translating and transmitting what the
project has to offer in a ‘user-friendly’ way or placing the outcomes of a project in a
relevant and understandable context for the targeted audience. As such, messages
can be repackaged and reused in the function of the audience: ‘Communication is
multi-reusable, it can be mixed and served again.’
In this regard, the CLUNET project, which is building up a life sciences accelerator
in the north-west of England and developing an environmental technology for
China, can bring a positive message to local policy makers: that globalisation
can also mean job creation thanks to support for innovative clusters and that it
contributes to the gross added value in the host region. These are typical indicators
that may not be the main aim of a project, but that nevertheless do make sense
and are what matter to economic administrations, thus providing further support
to a project and also helping to give it (local) visibility.
Be original in communication to draw the attention

of audiences of interest
Communication need not be confined to the traditional brochure and website

material. On the contrary, communication has become so widely practiced that
one has to stand out to capture the attention of those one wants to reach out
to and engage. Project launch or progress meetings can be held in interesting
locations to draw attention to the project (the CLUNET project launch meeting
was held in a football stadium, while circus tents were used for the Innovation
Circus project).
24
Since many of the INNO-Nets and INNO-Actions do not have the budget to
engage in costly communication activities, being innovative in capturing attention

from the outside world is of paramount importance.
There are many ways to practice original communication and many INNO-Nets
and INNO-Actions have shown proof of this.
An anthology of practices reveals the potential here, including the use of modern
communication technologies and tools: wire services for dissemination of press
releases, RSS of websites, the use of webcams, SMSs, telephone pictures, blogs,
YouTube, Wikipedia and Second Life. The Innovation CIRCUS project experimented
successfully with some of these means for capturing the voice of the people
(VOXPOX) and launched a Wiki for gathering information on the public perception
of innovation.
Also the organisation of contests is a formula that can result in substantial benefits
for public relations and communication. In this regard, the EurOffice Services
(EOS) Project, which counts 80 partners across 3 continents, launched the ‘Best
EOS Network Member’ Award to give momentum to and strengthen the enlarging
network. It also adds the flavour of taking things seriously and being competitive
as a project overall.
In a similar vein, ADMIRE, which involves 19 partners from 12 countries, has built
up a strong reputation as a project due to the Design Management Europe Award
contest it has created. This award has become a brand and a promotional vehicle
for the ADMIRE project, which facilitates project communication and attracts a
growing number of contenders for the contest. Furthermore, the award winners
act as ambassadors for the ADMIRE project and as multipliers for its message that
good design means better business opportunities.
Engage in media relationships
An important way to boost the communication and promotion potential of a

project is to invest in building up media relationships. The media are powerful
intermediaries. Making use of editorial coverage of project results in the written
press, or on TV, the Internet and radio brings a number of benefits. The media
can reach very wide audiences. Moreover, the credibility of project messages is
enhanced in the perception of the public if it is transmitted via an impartial editor.
Media can also help in getting quotes on project results from renowned innovation
experts from home and abroad to which they have access. Also, through their
sources they can easily make comparisons with results from peer projects in other
parts of the world, and thus can help to perform benchmarking exercises.
The INNO-Nets and INNO-Actions definitely have the potential to attract a lot of
media interest. They have a lot in store that can attract the interest of (business)
journalists: money deals, funding opportunities, new business, IPR know-how,
clustering affairs, innovative solutions, etc. And they have interesting case material
to offer, which provides the basis for good story lines
However, this alone cannot automatically attract the attention of journalists. In a

demanding and fast-moving world, journalists are overwhelmed with information
and need to be selective as to what material is in their audiences’ interest. You
will not catch the media’s attention just by sending press releases and invitations
to press conferences. They are always interested in a good story, but they should
know whether there is one for them to expand behind a project as well as who can
let them in on such a story.
25
To gain the attention of journalists and to get wide exposure eventually, applying
more creativity in bringing project messages and results and seeking efficiency
in media relations can make a real difference to a project’s visibility and success.
In this regard, open editorials, i.e. authored articles, written up exclusively for a
selected publication, have gained a lot of importance recently in professional public
relations (PR). And one can also work the other way round: instead of only reaching
out to journalists, one can also take professional text writers on board in projects to
strengthen their communication activities. In addition, providing a database with
project experts that can deal effectively with the press is a good way to give the
media access to the knowledge base of projects.
Getting journalists on board the project is not only effective in terms of media
relations. It is also profitable as it can replace the need to deploy professional press
and public relations capacities and techniques at project level — something for
which the INNO-Nets and INNO-Actions typically do not have the budget.
A good example in this respect is the EASY project, which decided at an early
stage to involve journalists in their consortium structure. ‘This has proved to be a
successful mechanism for having an objective journalistic view on the outcomes
and progress of the project and to promote the project by selling the story to the
media channels they work with.’ Take note that a very high number of freelance
journalists cover science and technology stories, which should open possibilities for
the creation of a pool of journalists to which projects like INNO-Nets and INNO-
Actions can turn. Therefore, the opportunities for creative PR in the innovation
sector are immense.
Communication impact can be measured
When communication activities are based on a clear strategy, it is possible to

measure their impact and determine the added value they have for the valorisation
of innovation projects’ results and/or in achieving their base objectives. A number
of indicators or metrics are suitable for this, which can be divided into output,
outcome and process indicators (see the next section of this Annual Report for a
more complete overview).
Output indicators are quantitative. These include not just the number of press
articles, but also the circulation figures of the publications where they appear and
the profile of readership (policy makers, business managers, young people, etc.).
The number of hits on project websites is another example of an output indicator,
as is the interactive use of websites, helpdesks, e-mail inquiries, etc.
Outcome indicators are mostly qualitative and measure the behavioural change
generated by the communication message. This often entails specific research,
through focus groups or other surveys. Examples of such outcome indicators are
the increase in knowledge, the change in opinions, statements and perceptions,
and the change in behaviour.
Process indicators are linked to the actual communication process and show if the
activities were efficient — within time and within the budget.
Putting theory into practice and using the creative approach, a good way for
measuring impact would be to collect success stories and testimonials, and
illustrate these with output, outcome and process facts and figures. This helps not
only in reporting on impacts, but also adds new fuel to the engine of innovation
and helps to move it into a higher gear and have other projects follow in its path.
26
Improved effectiveness though

impact measurement
Activity and output metrics with regard to project activities and results are an
important tool to get a grip on the effectiveness of innovation support projects.
Relevant metrics and indicators are best identified at the outset of a project,
and rather than being generic or standard metrics, they need to be tailored to
the individual project to ensure they provide real added value to the project
stakeholders and those responsible for the evaluation of the project and innovation
policy effectiveness in general. In this way, project partners will find the metrics
more relevant to their individual project activities and more appropriate for
communication to outside parties, since they will provide a truer reflection of the
project. Certain innovation project managers summarised this as ‘measure what
matters’, and it can differ from project to project (in function of the goals pursued)
and in function of the stakeholders and media channels targeted.
In the case of INNO-Nets and INNO-Actions projects, there are a number of

suitable metrics that can reflect both the policy objectives and the project/service
focus they address. Both project types (Nets and Actions) clearly need to address
quantitative aspects of their goals, but qualitative indicators should also be taken
into consideration (as sometimes being more appropriate or possible). Based on
concrete project experiences with INNO-Nets and INNO-Actions, it has been
possible to identify and use the following metrics in the first generation of PRO
INNO Europe® projects.
Stakeholder issues
• Stakeholder participation indicators: number of partners, geographical areas

covered by the project, typology of partners involved (national, regional
policy actors, cluster organisations, research and innovation actors, chambers
of commerce, companies, etc.). An example is the Innovation Circus project.
• Target audiences: a breakdown by type and number contacted and

participants (SMEs, research and innovation actors, policy makers, companies,
citizens, etc.).
• SME focus: breakdown in detail of numbers and type of project participation

(attendance at events versus actual implication in projects), increase or
changes in cross-border cooperation, implementation and take-up of voucher
schemes, focus on selectivity approaches (high growth/gazelles), impact on
the Gross Value Added (GVA).
• Numbers of each type of target audience by activity or event (workshops,

forums, innovation fairs, conferences). An example is the experiences of the
Tech SME partnering academies.
• Citizen impacts: participation (typology and numbers), illustration of innovative

participation techniques (circus/fair type events), increase in awareness of
innovation issues. An example is INNOVATION Circus.
27
Output Indicators
• Project outputs related to the specific nature of the project: number of pilot
projects created and implemented, numbers of funding joint ventures, project
funding raised, capital venture raised, creation of networks (numbers and
geographic coverage), signing of project partnerships or agreements, number
of best practices identified/reviewed, cluster cooperations signed, handbooks
produced, etc. All the INNO-Nets serve as examples, but more particularly
INNET and the CEE Cluster Network.
• Internationalisation indicators: signature of transnational project cooperation,

between stakeholders (policy makers, research organisations, clusters, SMEs,
etc.), creation of networks, organisation of joint calls (between SMEs or cluster
actors), participants from non-EU countries. Examples are CLUNET, INNET
and the European Cluster Alliance (ECA) project offshoot.
• Technology transfer and valorisation indicators: technology agreements, joint

ventures, etc. The Tech SME Partnering and VALOR are examples.
• R&D indicators: investment leverage, numbers employed on research projects,

researcher mobility.
• Training-, educational- and skills-related metrics: preparation of new training

and learning materials, running training events, number and type of
participants, nature of materials (electronic or Web-based, hard copy, etc.).
• Financial indicators: leverage of additional project resources from public or

private sources, creation of venture capital (VC) funds, foundations and other
financial instruments supporting innovation, investment readiness. Examples
are the EASY and INNO-Deal projects.
• Entrepreneurship indicators such as training courses in entrepreneurship for

students, and awareness raising for researchers and their students.
Communication Indicators
• Nature of communication and dissemination tools used: quantification of

numbers of press releases/events, websites (hits), videos, brochures, leaflets,
press briefings, articles and press coverage, creation of awards. Examples are
the INNO-Actions and in particular the EOS, ADMIRE and EASY projects).
Other Indicators
• Innovation indicators and barriers: capacity building amongst SMEs, IP take

up, innovation management (human resources ((HR)) and cultural issues).
Examples are Innovation Circus, Tech SME partnering and ip4inno.
• Innovation services: an increasing number of projects seek to address the theme

of innovation and services, and this area requires a different set of indicators
than, say, the field of technology transfer. The IPPS project is an example.
• Support to innovation or cluster infrastructures: incubators, technology

platforms, science parks, etc. Examples are CLUNET and Baltic Sea Region
Innovation Network (BSR).
28
• Policy synergies and cooperation: linkages to Structural funds, access and

leverage of FP funds, national funding programmes.
• Linkages and support to key EU policy priorities: SMEs (Small Business Act),
access to finance, eco innovation, lead markets (a mix of quantitative and
qualitative metrics will be required), use of European Innovation Scoreboard
(EIS) measures.
• Network creation: number of members, type of actors, type of activities,

funding raised, support of open innovation methods of working, cooperation
indicators, increasing awareness (surveys). The EOS project is an example.
• Foreign direct investment indicators, for example cluster development.
• Exit strategy indicators: creation of a project network, an association, securing

alternative funding sources to prolong the project. Examples are the EOS and
EASY projects.
As can be seen from the list above, there is a great number of potential indicators
for INNO-Net and INNO-Action type projects. Some may not be immediately
associated with INNO-Nets/Actions, but they provide a framework of metrics from
which project partners can produce a better picture of the results of their activities.
Attention should also be given to unexpected project outputs and their associated
metrics or to other project spin-offs that may qualify as success stories suitable for
wider dissemination. Many of these indicators will be derived from the overall goals
of the project, but others may be truly unexpected outputs (positive externalities).
Examples are:
• creation of new companies or organisations (job creation);
• launching of a new business service;
• creation of a new policy instrument;
• development of a new standards;
• establishment of a benchmarking tool;
• industry or sector observatory;
• certification or quality standards;
• public procurement impacts;
• market failures addressed (linked to subsidiarity issues);
• establishment of an innovation course or diploma, degree course.
For each of these impacts and outputs, suitable metrics can be taken from the
previous list to grasp and illustrate in more detail the project achievements.
Collectively, the use of relevant metrics can contribute to a better understanding of

project impacts by stakeholders and other interested parties. They can also facilitate
mutual project learning and sharing through demonstration or best practice
dissemination activities.
29
Lastly, the nature of the project delivery and the mode of service delivery may also
have an impact on the nature of communication and dissemination activities. This
aspect should therefore not be overlooked, and in addition it may be relevant to other
issues such as how to help to better understand the scope of new modes of service
delivery and how they might reduce costs and accelerate innovation processes.
Some policy recommendations

regarding measurement and
communication activities
Communication activities and the dissemination of project results and potential
good practices are key considerations of the EU and are particularly relevant for the
PRO INNO Europe® initiative, particularly given the internationalisation objectives of
this programme. These activities should therefore represent key tasks in the project
work plan (often a separate work package with an appropriate budget allocation)
and be given greater prominence than is currently the case. Promotional and
dissemination indicators should be included as key project deliverables and used as
tools to unlock the potential of the project. The focus needs to be placed equally
on the dissemination of project results and of course the project implementation
itself. The section below highlights some of the potential policy recommendations
emerging from this communication strategy overview.
Project partners should address both internal and external communication

activities. The former are necessary to ensure good project delivery (also shared
project identity and unity of purpose), and the latter are required to ensure the
dissemination of project results. The former is required to build up trust between
partners to facilitate the transnational project cooperation process.
Innovation projects require innovative communication and dissemination

activities to reflect the nature of the project activities themselves. Project partners
should design a variety of dissemination methods to reach project stakeholders
and outside actors and attempt to go beyond the traditional ‘innovation
stakeholders groups’.
Communication tools should be adapted to the project outputs; one size does not
fit all. Tools should reflect both the target audience and the specific project outputs,
and in particular the internationalisation and project dissemination characteristics
requested by the EC. For example, directing project messages at SMEs will have
different requirements to those directed at policy makers.
Communication activities require greater professionalisation and should be

considered as value-creating activities. This requires either media and communication
training of project staff resources (in-house or organised by the EU), or the use of
external expertise.
Communication tools should be used to increase project visibility. This can involve
specific branding or dissemination tools that illustrate the uniqueness of the project
and facilitate project recognition and the dissemination of project results and
learning/sharing outputs.
Projects should make the most of other high-profile events to leverage dissemination
events, for example EU presidency events can provide ideal opportunities for
reaching out to larger audiences.
30
Project metrics and output indicators need to be identified at the outset of the
project and linked to communication, dissemination and learning activities. It may

also be appropriate to identify metrics per target audience, for example the type
of metrics necessary to interest SMEs will be different from that appropriate for
academic or policy actors. Getting the metrics right can therefore help deliver the
right message.
Communication and dissemination activities can contribute to project sustainability

and exit strategies, particularly when they are linked to the creation of new business
services or the establishment of networks or associations.
Networking with other projects can create critical mass and facilitate the
communication and dissemination of project/programme results to outside
stakeholders (for example the European Cluster Alliance). By stimulating
transnational cooperation, communication measures can play an important part in
knowledge sharing and the development of new tools or services.
Dissemination packages and project results should be made available to the various
EU innovation learning platforms and brochures/leaflets (Europe Innova, PRO
INNO Europe®). But most innovation policy actors and practitioners recognise
that effective mutual learning requires a more proactive and dynamic approach
than that applied in current activities. New improved communication and project
indicators/metrics can help to move in this direction.
Communication and dissemination activities can also contribute to reducing

project delivery risks and should be therefore included in the project feasibility and
risk assessment evaluations, and they will be highly relevant for the preparation of
exit strategies.
The concept of ‘open innovation’ calls for new and better instruments in support of
innovation, that explicitly recognise the aspects of knowledge sharing and stronger
user involvement in innovation processes. Good project indicators and metrics and
their dissemination will reinforce innovation processes in general, but will also help
specific target groups such as SMEs through the introduction of new services.
Innovation policy effectiveness monitoring can be greatly enhanced through the

identification of appropriate targets and metrics at the outset of the project to
ensure the correct data and indicators are gathered. The notion of improved policy
monitoring and evaluation can also inject a dose of policy competition that may
also contribute towards project delivery excellence.
The improvement of impact measurement activities can play a key part in raising
the effectiveness of policy measures, the evaluation of policy measures in general,
and in preparing project exit strategies.
31
Policy indicators, by contributing improved policy effectiveness, can also contribute
to issues regarding market failures and subsidiarity issues, and illustrate the relevance
and impacts at different policy intervention levels (EU, national and regional), as
well as improving the methods for greater policy selectivity and policy gaps.
Improving project metrics can help shed more light on the question of which
support provided on which level would create most impact (for enterprises or other
target groups), thus helping to better design future EU projects/actions in line with
the expectations of stakeholders and ensuring better value for money. Improved
knowledge about project outputs can help develop policy approaches that secure
greater overall outputs. By sharing this information more effectively and rapidly, the
EU can help develop more efficient policy solutions and projects and programmes,
ensuring the spread of good practices more widely.
The global financial crisis is leading to increasing pressure on public budgets

and forcing governments to review the allocation of scarce resources. In order to
maintain long-term support for innovation, there is therefore a need for better
demonstration of the potential benefits of innovation support instruments. Project
metrics and indicators have a clear role to play here.
Maintaining a European perspective will help develop policy learning and sharing
activities as well as retain relevance for a wider community. By doing so, project
results can lay the ground for drawing policy conclusions on the design of future
innovation support actions at EU level.
And last but not least, ‘Tell a good story!’

32
5. Conclusions and outlook

Conclusions and outlook
To embed and safeguard transnational policy learning and transnational innovation

support policy cooperation and to secure the results thereof, the following points
are important: (1) take into account lessons learned from experiences and insights
on how to deal with financial crises; (2) consider what should be left to the market
and what should be backed up by policy means —and in which instances assistance
should come from EU level; and (3) broaden partnerships for innovation purposes
beyond public agencies including potential beneficiaries of support measures, to
facilitate cooperation between complementary policy initiatives at EU level (such
as PRO INNO Europe®, Europe INNOVA and the Enterprise Europe Network), and
to further promote the large-scale roll-out of ‘premium services’ developed, tested
and validated in European pilot actions throughout Member States and regions.
In this sense, the second ILP Learning Cycle builds upon the insights gathered during
the previous Learning Cycle in terms of innovation policy learning and transnational
policy cooperation. The INNO-Learning Steering Group (ILSG) consultation has
played a valuable role in this respect and it will remain important during the third
Learning Cycle, for the building up of knowledge and the development of ideas on
how to improve the effectiveness of innovation policy support.
The second cycle has, in particular, devoted attention to analytical work on a

number of policy issues related to improving cooperation in support for innovation
in Europe. The aim of this work is to contribute to the following: (1) better
understanding of the concept and scope of existing innovation support in Europe;
(2) better understanding of the role of the Community in support of innovation,
including how to apply the subsidiarity principle to innovation support; and (3)
identifying future options for more effective Community support for innovation.
It is anticipated that the third ILP Learning Cycle will assist the European Commission
in the preparation of the future INNO-Partnering Forum to be launched as part of
the second phase of PRO INNO Europe® (14). This will notably entail supporting
preparations for peer reviews between innovation agencies to search for better
practices in providing innovation support services, and supporting preparations
for setting up a transnational good practice exchange scheme between innovation
agencies based on a twinning concept.
14 Further information on the second phase of PRO INNO Europe® is available online (http://www.proinno-europe.eu/
index.cfm?fuseaction=page.display&topicID=426&parentID=50).
33
PRO INNO Europe® Papers
Conclusions and outlook

Paper N° TITLE NB-N°
1 Guide on dealing with Innovative Solutions in Public Procurement – 10 elements of good practice NB-76-06-440
2 European Innovation Scoreboard 2006 NB-NA-22704
3 A Memorandum on Removing Barriers for a Better Use of IPR by SMEs NB-NA-22957
Benchmarking National and Regional Support Services for SMEs in the field of Intellectual and
NB-AX-07-004
4 Industrial Property
5 Innovation Clusters in Europe: A statistical analysis and overview of current policy support NB-81-07-100
6 European Innovation Scoreboard 2007 NB-NA-23-101
7 Impact of Research Programmes on Innovation Not published
8 INNO-Learning Platform Annual Report 2007-2008 -
The role of clusters and cluster policies and their role for competitiveness and innovation: Main
NB-NA-23-591
9 statistical results and lessons learned (SWD)
10 European Innovation Scoreboard 2008 NB-NA-23-728
11 INNO-Learning Platform Annual Report 2008-2009 Online publication

Inno-Learning Platform Annual Report Working Towards More Effective Innovation Support in Europe

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PRO INNO Europe® paper N°11

Additional information on PRO INNO Europe® is available on the Internet (http://www.proinno-europe.eu).

2. Innovation support in times of economic crisis 07

Safeguarding subsidiarity and effectiveness principles of European innovation

Achieving more effective innovation project management through strategic

5. Conclusions and outlook 32

The initiative is sustained by the INNO-

formulation of future INNO-Nets and other possible forms of cooperation in

• testing European innovation support measures on subsidiarity and effectiveness

2. Innovation support in times

Innovation support in times of economic crisis

Consequences of financial crises typically span a long period, as witnessed from

Conventional wisdom suggests that the current crisis

…but from a ‘creative destruction’ perspective,

this vision, times of turmoil can be good for innovation.

Therefore also, it is of paramount importance to distinguish between ‘what needs

Shift from traditional supply-side policies

…and take advantage of the opportunity created

While the crisis is unquestionably undesirable, it also presents a great opportunity

Recommendations for policy-making

1. Consolidate R&D spending patterns

Public R&D budgets should not be downsized. On the contrary, it is highly

Consider an enlargement of the available funds (in size), a sharper focus on

1 Finland quickly shook off the recession in the 1990s, primarily due to heavy support for R&D.

Innovation support in times of economic crisis

2. Enhance mobilisation of private/venture

3. Restore confidence among companies,

2 See http://ec.europa.eu/commission_barroso/president/pdf/Comm_20081126.pdf online.

4. Increase the support to SMEs to reduce

the effects of the credit crunch on R&D

5. Initiate the necessary

6. Focus on demand-side policies

Innovation support in times of economic crisis

On the whole, demand-side policies should aim to provide incentives to purchase

7. Focus on R&D-intensive sectors

According to EU Science and Research Commissioner Janez Potocnik, there should

8. Increase policy focus on industrial clusters support

Despite the apparent decrease in participation of firms in clusters in certain

As illustrated by this example, there are grounds to promote cluster formulas

Finally, open and partnership-based innovation constructions are also an attractive

9. Raise societal propensity to innovate

Safeguarding subsidiarity and effectiveness principles of European innovation support measures

To test the legitimacy and added value of transnational innovation support

• In the technology market: externalities (technology spillovers) — the

• In the product market: the existence of market power — lack of competition

• In the financial market: information problems — the inherent riskiness of

• In the labour market: information problems — the threat of opportunistic

Innovation activities in the private sector are sometimes organised by enterprises

Innovation networks link enterprises to other firms, to knowledge providers

fear of opportunistic behaviour. Fear of opportunism hampers a network’s ability to

Safeguarding subsidiarity and effectiveness principles of European innovation support measures

• addresses specific cross-border aspects of market or network failures (9);

• exploits scale economies in policy making or policy implementation;

• internalises policy externalities (international spillovers);

• brings together the necessary resources (finance, knowledge, etc.) to

• stimulates international policy learning and diffusion of best practice

• is less adapted to local circumstances;

• creates dangers of loss of opportunities for learning from a diversity of

• reduces the incentives for policymakers to engage in policy competition.

In addition, it is useful to consider the policy action as part of a system of

Safeguarding subsidiarity and effectiveness principles of European innovation support measures

In the format of a flow chart, the combined legitimacy check/subsidiarity test/