Slides from NERI Seminar on 13th February, 2019 presented by Valentina Patrini, Research Officer, Eurofound

1. Valentina Patrini, Eurofound
NERI seminar – Dublin, 13 February 2019
Employment effects of public innovation support measures
for companies in Europe
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2. Established in 1975
Budget of € 20.5 million
100 people
Tripartite agency
European
Foundation for the
Improvement of
Living and Working
Conditions
2
Eurofound

3. 3
Working
conditions
and
sustainable
work
Industrial
relations
Quality of life
and public
services
Labour
market
change
Monitoring
convergence
in the EU
The digital
age:
opportunities
and
challenges for
work and
employment
Call for external experts
https://www.eurofound.europa.eu/about-eurofound/procurement/call-for-external-experts
Six strategic areas of intervention

4. • Background
– EU struggling to achieve job-rich growth; role of competitiveness/innovation
• Objectives
– To explore the employment effects of public innovation support measures
– To explore the mechanisms and effectiveness of specific (types of) instruments
– To assess the availability and suitability of respective evaluations, assessments, data
• Key concepts
– Innovation
– Innovation support
– Employment effects
• Methodology
– Literature review
– Mapping of relevant support instruments in the EU28 and Norway
– Analysis of 15 support instruments; CMO model to face the challenge of assessing
their effectiveness
– Focus on AT, DK, EE, FR, DE, IT, NL, PL, SE, UK
– Deriving policy pointers
Employment effects of innovation support
https://www.eurofound.europa.eu/publications/policy-brief/2018/employment-effects-of-innovation-support
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About the project

5. • Realist evaluation (Pawson and Tilley, 1997): ‘How and why does this
work, for whom and in what circumstances?’ vs. just ‘what works?’
• Theory-driven: programmes are products of human imagination 
testing the veracity of that vision of change
• CMO configurations: context, mechanisms, outcomes
• Mixed methods: quantitative and qualitative evidence
Activities
Black box – something
happens here
Outcomes
Realist evaluation works to unpack this black box
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Realist evaluation

6. 6
Direct or indirect
objectives conducive to
employment effects
Product
innovation
Process
innovation
Marketing
innovation
Organisation
al innovation
Social
innovation
(Short-term)
employment-related outcomes
Firm level
Context Mechanisms Outcomes
Capacity
building in
enterprises
Strategic
measures
Building
relations with
partners
Innovation
activities Non-
employment
related
outcomes
No specific or implicit
employment objective s
(outside the scope of the study)
Longer-term employment-related outcomes (impacts)
Firm level and wider outcomes
Innovation measures
Interventions in
other policy areas
Employment
Economic
Knowledge, skills and capacities
Working conditions
Labour mobility
Welfare
The theoretical framework

7. 7
The context
Public innovation support and employment links in Europe
• Innovation key factor for EU competitiveness + need to address the threats that
innovation poses on employment
• European policies: EU 2020 strategy; flagship initiatives; H2020; Structural and
investment funds
• Evolution of support types
Academic studies on innovation and employment
• Unclear relationship – especially in the short-term
• Zimmerman (2009): + effects on employment for product and process innovations in
German SMEs, stronger for process
• Ortega-Argilés et al (2015), cross-country perspective: product innovation labour-
friendly, process labour-saving. Coad and Rao (2007): similar project on US high-tech
manufacturing companies, different effects depending on company growth/size
• Simpatic project (2014, annual Community Innovation Survey in Eurostat): + impact
on job growth from product and marketing innovation, no significant impact from
process innovation. All innovation types contributed to increase highly skilled jobs
• Calvino and Virgillito (2018): product innovation labour friendly, process innovation
controversial effects. Effects depend on country, sectoral and technological
characteristics

8. Strategic measures
Awareness raising
Measures that are part of
other strategies (e.g.
innovative approaches to local
economic development)
Demand-side procurement for
innovation
Promotion of open innovation
Smart specialisation
Building relations with partners
Networking/ Industry-academic
cooperation
Innovation infrastructures and
platforms
Innovation/ knowledge centres
Industry clusters
Support at the enterprise level
Stand-alone
measures
Tax credits for R&I
Encouraging
entrepreneurship
Innovation
vouchers
R&D programmes
Capacity building
Creation of
innovation start-
ups
Business
incubators
Business advice
and direct support
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The measures

9. 9
Stand-alone measures
Type Measure Key characteristics
Tax credit
Research tax credit
(FR)
 Promotion of an innovation-friendly business
environment and increase of private sector
innovation by reducing tax liability
 Beneficial conditions for enterprises employing
recent graduates
WBSO R&D tax
credit (NL)
 Affecting employment directly by offering
reductions in payroll taxes
Encouraging
entrepreneurship
WAFF innovation
and employment
subsidy (AT)
 Funding to SMEs for staff training and
consultancy, and to pay for ‘innovation
assistants’ needed to develop the projects
Innovation
voucher
Innovation
vouchers (EE)
 Small instrument providing for initial
cooperation but with potential to change
perceptions

10. 10
Capacity building
Type Measure Key characteristics
Creation and
development of
innovative start-
ups
Smart&Start (IT)  Targeting very young start-ups through funding
Incubators/
facilities
Investment
incubators (PL)
 Advice, business development and access to
finance to create a path of public support at the
various development stages of a business
venture
 Aim of increasing the number of innovative
businesses
Business advice
and direct
support
Growth Houses
(DK)
 Provision of a reliable ‘sparring partner’ to
collaborate with enterprises and employers
with an evident growth potential and ambition
Enterprise Value:
People (DE)
 SME subsidy to carry out consultations to
improve firm internal processes with the
ultimate goal of retaining skilled personnel

11. 11
Networking
Type Measure Key characteristics
Networking/
industry-
academic
cooperation
Knowledge
Transfer
Partnerships
(UK)
 Mobility scheme, associate coming from one type of
organisation (research institution) working in
another (business)
 Mutually beneficial and structured partnership
between an academic institution and a business
needing innovation input
Building
innovation
infrastructures/
platforms
Laura Bassi
Centres of
Expertise (AT)
 Research centres - female research excellence
 Links between centres and businesses interested in
applied research
Knowledge
centres
Competitiveness
poles (FR)
 Collaborations between businesses, start-ups,
universities and public research laboratories on the
same territory through common R&D projects,
training, equipment, premises, finance
Cluster
promotion
Danish Cluster
Promotion (DK)
 Help for enterprises to speed up their innovation
processes and to achieve commercial success, by
working in clusters
 Target groups: enterprises and cluster managers

12. 12
Strategic measures
Type Measure Key characteristics
Measures that
are part of
other
strategies
Startup in
residence
Amsterdam (NL)
 Demand side (public sector procurement) stimulation
and training to (re)vitalise the city and its buying
processes, while supporting the entrepreneurial
culture and addressing social challenges
Demand-side
procurement
for innovation
Small Business
Research
Initiative (UK)
 Funding of contracts through open procurement
processes, involving the development of potential
solutions (products and/or services) to public sector
problems
Smart
specialisation
Swedish Winter
Sports Research
Centre (SE)
 Long-standing instrument redesigned to fit the
Regional Innovation Strategy and Smart
Specialisation strategy
 R&D centre for winter sport, focused on education
and teaching, research and innovation and testing,
involving key actors in the territory

13. Strategic measures
Environment boosting
innovation and
entrepreneurship
Supportive environment for
particular types of companies,
such as start-ups
Tackling obstacles in public
sector (strategic policy
directions, open-
procurement)
Building relations with partners
Cooperation, promoting
behavioural change and
developing processes
Exchanges of knowledge and
staff to support mutual learning
Specific collaborations in R&D
activities (financing, training,
equipment/facilities)
Intensity and speed of
innovation processes
Support at the enterprise level
Beneficial conditions to enable
enterprises to hire skilled personnel
Skills and competences development
through staff training and consultancy
Tools for companies to enhance
workplace motivation/retain skilled
staff
Creating an entrepreneurial culture
through awareness-raising/coaching
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The mechanisms

14. Measure Country Job creation
Employment of
specific groups
Employment of
high-skilled staff
Enhanced skills
and competences
Improved
workplace practices
Sustained effects
Enterprise level
WAFF Innovation and
Employment Subsidy
Austria √ √
Growth Houses Denmark √ √
Innovation vouchers Estonia √ √ √ √
Research tax credit France √ √
Enterprise Value: People Germany √ √ √
Smart&Start Italy √ √ √
Investment incubators Poland √ √
WBSO R&D tax credit Netherlands √ √ √ √ √
Network level
Laura Bassi Centres of
Expertise
Austria √ √
Danish Cluster Promotion Denmark √ √
Competitiveness centres France √
Knowledge Transfer
Partnerships
UK √ √ √
Strategic level
Winter Sports Research Centre SE √ √ √
Startup in residence
Amsterdam
Netherlands √ √ √
Small Business Research
Initiative
UK √ √
Main employment effects of the innovation-support measures
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Key findings

15. • Job creation
– Most common employment-related outcome
– Objective, indicator of economic growth, monitored
• Employment of specific groups
– Gender, age; no other sociodemographic groups
• Employment of highly skilled staff
– Knowledge transfer, exchange of staff; bridging cultural gap industry/academia
– High quality jobs (PhD/R&D profiles’ absorption in labour market)
• Development of skills and competences
– Regarded as a mechanism rather than an objective (programme design – monitoring)
– Development of existing staff
• Workplace improvements
– Organisational learning and cultural change (research management; HR policies;
better working milieu for knowledge workers)
– Better working conditions (better job quality; more interesting jobs)
• Sustained effects
– Hints of sustained effects; no monitoring beyond measure duration
– Improved, more innovative business environment
Learning as key
vector for
behavioural change
- Informal: networks
- Formal: training
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Employment-related outcomes

16. • Innovation support mainly aims at growth rather than employment
specifically
• Employment effects as by-products rather than explicit objectives
• Job creation: assumption, but scattered evidence
• Mainly product and process innovation; scarce support for
organisational and marketing innovation (surprising, given policy
pronouncements)
• Generally, neglect of significant aspects of the human resources
dimension of innovation, especially in relation to the existing workforce
• Focus on highly skilled workers, little attention to other staff; limited
gender effects
• Hidden impact on skills and competences development (mechanisms
rather than objectives)
• (Evaluation) evidence is scarce and focused on objectives (vs
mechanisms)
• Country differences: innovativeness; unemployment rates
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Conclusions

17. Implications for policy
• Explicitly include employment goals in innovation policy
• Pay more attention to the human factor in innovation
• Extend the reach of measures (staff)
• Tailor measures for the national context
• Monitor and evaluate measures systematically
Implications for policy research
• Giving a structure (framework) to diverse evaluation evidence
• Our research questions, the programme objectives and the evaluation questions
• Strength of evaluation evidence (relevance, quality, availability and accessibility);
relevant indicators
• Mix methods: secondary analysis + collection of complementary information 
role as evaluators?
• Approach: similar to case studies? Focus on effectiveness and mechanisms
• In-depth knowledge vs comparability and transferability (middle-range: e.g.
country innovativeness, unemployment levels, …)
• Exploratory vs focused research; risk of ‘anecdotal’ cases; setting the scene is
key
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Implications

18. • Are the measures covered broadly representative of innovation support across
Europe? And in Ireland?
• The main effects identified are on employment (especially highly skilled) and on
skills and competences (and some gender effects). Would others be expected?
• Is it possible to recommend any of the measures as good examples?
• Is a technological bias/emphasis inevitable in innovation policy?
• What would a more holistic approach to innovation support look like?
• Are the implications of the analysis different for countries/regions at different
levels of innovation development?
• In view of the major flaw in most measures, can any of them be highlighted as
good examples?
• Can employment promotion be an objective of innovation policy?
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Discussion questions

19. Thank you for your attention!
Valentina.Patrini@eurofound.europa.eu
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