Reconceptualizing innovation policy. The case of France

Technovation 26 (2006) 444–462 www.elsevier.com/locate/technovation

Reconceptualizing innovation policy. The case of France Blanka Vavakova* Centre National de la Recherche Scientifique (CNRS), Institut de Recherches Interdisciplinaires en Socio-Economie (IRIS), 75775 Paris, Cedex 16, France

Abstract In March 2004, French researchers from the public research sector staged a protest movement unprecedented in its scope and length. The paper situates this conflict within the evolution of French innovation policies, notably with regard to the public research sector and its relationship to industry. Since the crisis of the 1970s it had become evident that French firms invested little in research and development when compared to their competitors. Since 1982, a succession of innovation policies were thus put in place to deal with this problem by enhancing the contribution of public sector research to the innovative performance of national industry. This paper analyzes these shifts in policy and the unexpected and often contradictory results that they have produced over time. These have included a rise in contract research but a decline in patenting activity by public sector research institutes, conflicts over the direct appropriation of benefits by research institutions and the holding of roles and functions concurrently across public and private sectors by researchers in these institutions and throughout, the continued under performance of French firms in R&D. q 2004 Elsevier Ltd. All rights reserved. Keywords: Innovation policy; France; Public research sector; Research–industry co-operation; R&D; Firms; Spin-off

In March 2004, French reseachers from the public research sector staged a protest movement unprecedented in its scope and length. Indeed, in contrast to other socioprofessional categories in France, researchers very rarely undertake a collective action to defend their corporate interests or to demand an increase in funding for research. Even less so do directors of laboratories, who this time not only joined the movement in solidarity with researchers, but over 2000 resigned their administrative posts. The scope of this protest was triggered by a further reduction in funds for the research sector. In some cases, basic support to the laboratories or teams was so dramatically reduced that they would be unable to pursue any experimental research, including that directly related to public health. A large number of new research posts, which were to be created, were also axed. It was difficult for researchers to see this situation as one of a temporary budgetary crisis. Instead, they understood it as the result of a wilful government policy directed at the public research sector. In their view, the existing policy is designed to * Tel.: C33 1 44 05 48 54. E-mail address: [email protected]. 0166-4972/$ - see front matter q 2004 Elsevier Ltd. All rights reserved. doi:10.1016/j.technovation.2004.09.002

bring down the share of nonfinalized research, and increase the role of (private) enterprises in steering public research sector programs. Yet, for more than two decades now, under both left and right-centre governments, innovation policies dealing with publicly funded research in France have been subject to similar criticism, when pursuing manifestly the same objective, that is to strenghten research and enhance the innovative performance of national industry through an increasingly direct supply of competencies, information and knowledge from the public research sector. Nevertheless, these policies never gave rise to such massive discontent on the part of researchers. In fact, many researchers even complied by undertaking contract research and services for industry. Thus, the question is: what has changed? A closer look at successive innovation policies since 1982 by different governments enables us to see that behind very similar political discourse related to the objectives of each new innovation policy, both the conception of the role and the status of the publicly funded research sector were progressively modified. In order to understand this need for change, this paper will assess the impact of French R&D and Innovation

B. Vavakova / Technovation 26 (2006) 444–462

policies during the last two decades on the linkages between public sector research institutions and industrial firms, paying particular attention to the extensiveness and nature of their co-operation and the mobility of research personnel. In doing so, it highlights the ways in which the policy adopted in 1999, in spite of some similarities, differed from earlier policies in a deeper sense. Indeed, by introducing policy instruments designed to commercialize scientific discoveries and stimulate the creation of spin-offs from the publicly funded research sector, the 1999 law on research and innovation has reconceptualized the relationship between publicly funded R&D and the private enterprise sector in France.1 Finally, after examining the data on implementation of this policy over the last 4 years, its very conceptual grounding will be debated.

1. Mobilization of publicly funded research sector for the sake of national industry: scope and effects It must be said that the concern of public authorities about the lack of co-operation between national enterprises and publicly funded research institutions and their component institutes, centers and laboratories is almost congenital to French national research policy. As early as 1957, a national conference was called to discuss ‘the general problem of contacts between the universities and industry with respect to research’.2 Since then, the need to establish a link between publicly funded research and the enterprise sector has been periodically evoked, most often at the time that a national plan was being drawn up. This concern was deeply motivated by the low level of investment in R&D by French enterprises as compared to other large countries in the OECD. At the beginning of the 1970s, the share of the enterprise sector in national R&D expenditures (GERD) in France was about 36%, while in Germany the firms’ share was close to 53%, and in Japan about 59%. In spite of the noticeable improvement over that decade, in the early 1980s, the share of French enterprises in national R&D expenditures was only 40%, as compared to 60% in Germany and over 63% in Japan. At the same time firms in France were employing about 41% of all researchers in the country, while in other leading industrial countries, the enterprises’ share was between 56% (in Japan), and 76% (in US) (OECD, 1982, 1985, 1991).

However, no really radical measures were taken in the 1960 and 1970s in France to foster more systematic and direct co-operation between publicly funded research institutes and private enterprises. The diverse mechanisms and plans of action adopted in view of that purpose during this period had altogether a limited scope. This was largely due to the dominant vision of ‘science– industry’ relations, which, in the line with the OECD perspective at that time,3 combined still in a loose way, the ‘demand’ and the ‘supply’ side. But it was also due to the cultural context of those two decades,4 unfavorable to the attempts made by public authorities to bring together the two sets of actors occupying then the opposite sides of the ideological spectrum. Notwithstanding, the state would continue to assume the transfer of technology from public research sector to industry, in particular to the large national enterprises. This approach fit with the multisecular tradition of the role played by the French state in technological progress and economic growth of the country. Thus, in the beginning of the 1980s, France fully hit by economic crisis, found herself ill prepared to take up the new challenges of innovation-based international competition. By then, the idea that more science was needed to build those capabilities had spread rapidly across the countries of the OECD zone. This lead to the remarkable increase of investment in R&D by governments as well as by enterprises and to the launching of special programs and structures in order to promote the transfer of technology from academia to industry. It was in this context that the new socialist government in France was determined to introduce some changes into the national R&D system. The law on programming of research and technological development, promulgated in 1982, was designed to stimulate research activity in enterprises, strengthen the competitiveness of national industry and build up the SMEs sector.5 A number of dispositions and instruments were adopted to achieve these objectives. The R&D budget aimed not only to increase the volume of research executed within national enterprises by 10% per year and by 6% in private firms, but also to facilitate access of new firms to research resources. Several instruments were set up for this purpose: a special fund for aid to innovation, managed by the ANVAR6; a premium for innovation, which favored co-operative research; and an incentive system to encourage 3

1

The creation of spin-off companies from publicly funded research institutes is a policy priority in all Member States of the European Union, but as we will see below, for France this points to a deeper change in the role that the state has played until now in the transfer of technologies and more largely in the modernization of the French industry. 2 Held in Grenoble, under the Presidency of Pierre Mende`s France, (influential radical-socialist thinker and politician, minister of Economy and later of Foreign Affairs), it became a historical reference for the future socialist government and its approach to research policy.

445

See Freeman (1988). This was the period of the counterculture surrounding May 1968. 5 At that time, the dynamism of German SMEs was seen as a model for France. 6 The ANVAR (Agence Nationale de Valorization de la Recherche/National Agency for Valorization of Research) was primarly established within the CNRS by 1967 and given the responsibility to transfer research results from publicly funded laboratories and services to industry. Progressively, its role was extended to support the innovation, creation and development of enterprises, namely the SMEs. 4

446

B. Vavakova / Technovation 26 (2006) 444–462

firms to hire researchers or to increase in-house R&D through external links.7 At the heart of the 1982 law were new policy measures intended to foster the co-operation of publicly funded research institutes with firms. These included, first, an extension of the mission of their parent institutions. Initially oriented towards ‘the production and diffusion of knowledge for the advancement of science and for the economic, social and cultural progress of the country’, their mission was now redefined to include ‘contributing to the application and valorization of research results.’8 Second, the new mission required more flexible rules of management and accounting. The legal statute of research institutes was thus transformed from a ‘public administrative establishment’ (EPA) to a ‘public scientific and technological establishment’ (EPST).9 In each research institution a service of valorization was created to ‘insure the best conditions for dialogue with the social and economic environment, to finalize the most adapted modalities of co-operation and exchange, and to protect the interests of researchers and the research institutions. Researchers would now be obliged to inform this service about all relations with the enterprise sector that involved their research institute.’ The new statute allowed the CNRS, INSERM, INRIA, INRA and other research institutions to create either ‘companies of valorization’, or, following the example of the ‘public establishments of industrial and commercial character’ (EPICs),10 ‘to take shares in companies and to create subsidiaries.’ Third, in order to facilitate the implementation of the new policy, and to allow research personnel to perform their mission of valorization, including a temporary move to an enterprise,11 a reform of their statutes had to be undertaken.12 Fourth, it was necessary to provide organizational structures of cooperation with industry that ‘would launch the organizational basis for larger research projects between research institutes and industrial firms, the utilization of the same equipment and the mobilization of long-term financing’ (Guillaume, 1998:21). One such structure ‘the grouping of public interest’ (GIP),13 made it possible for public research institutes to cooperate in a more flexible association with private or public 7 It led in 1983 to the adoption of the tax incentive called ‘Cre´dit d’Impoˆt Recherche’. Over the years, several adjustments would be applied to this instrument, including that by the 1999 law on innovation. Since its introduction, the financial volume of its incentive increased more then sevenfold, to reach 529 million Euro by 2003 (MRNT, 2003:49). 8 The precise definition of the mission is slightly differing from one institution to another, depending on their main mission and previous involvement in co-operation with the industrial sector. 9 This transformation by application of the law of 15 July 1982 has been done through statutory orders, issued for different research institutes between 1982 and 1985. 10 Publicly funded research institutes oriented towards applied research. 11 In parallel, the law stipulated also the mobility of R&D personnel from industry towards the research institutes. 12 Loi n8 84-16 du 11 janvier 1984 related to the statutes of the state civil service, and Loi du 26 janvier 1984 concerning the higher education. 13 The GIP, Groupement d’inte´reˆt public.

legal entities, without being characterized by the private law and business spirit associated with another already existing structure, ‘the grouping of economic interest’ (GIE).14 The new structure was meant as a sort of ‘prelude to the business company’, commercializing and pursuing the development of products created within it. The ‘mixed research unit’ (unite´ mixte), was another new structure intended to put together a team composed of members of the research institutes and of the R&D department of an enterprise. Although the team was supposed to move to the enterprise, the researchers were evaluated and remunerated by the research institute. In order to build up the SME sector, characterized hitherto by very small traditional enterprises, the government decided to make use of the facilitating factor of proximity and to entrust the regions with the responsibility to stimulate the technological development of SMEs. Regional authorities were empowered to reinforce and structure the research potential of their territory through the creation of Regional Centers for Innovation and Technology Transfer (CRITTs)15 and other intermediaries that would bring universities and research institutes into closer collaboration with local enterprises. These new tasks also implied that each region would establish within its own Regional Council an advisory committee on science and technology. The 1982 law for the programming of research and technological development, by its discourse, changes in the juridical framework, institutional reforms, and multitude of new policy measures and structures has appeared to many observers and actors as a powerful push to the transfer of technology from academia to industry. The first evaluation of the implementation of this law praised the strong movement under way to ensure that publicly funded research benefited local industry.16 Most reports thereafter stressed the large number of projects being undertaken jointly by research institutions and enterprises (Salomon, 1986:98; OECD, 1986:35–37; CSRT, 1986:11). Eight years later, Franc¸ois Kourilsky, then Director General of the CNRS, regarded the interaction of this research institution with enterprises as ‘a success because it benefits equally both partners who have moved beyond an information barter to the elaboration of shared objectives..and finished by creating a true synergy’ (Kourilsky, 1993). As late as 1995, the author of a new study on the national R&D system in France considered that ‘.relations between public research and the enterprise sector.is one area where changes were the deepest over the last years, thus rendering the critique of 14

The GIE, Groupement d’inte´reˆt e´conomique, is a structure which exists since 1967. It is a legal entity of private law, a half way between an association and business company. This kind of grouping aimed to ‘allow the economic operators to unite their efforts for common interest, but not to realize any benefits for themselves.’ The Revenue court often criticized the utilization of the GIEs by public institutions. 15 CRITT, Centre Re´gional d’innovation et de transfert de technologie. 16 In Loi n8 85-1376 du 23 de´cembre 1985, so called ‘Le Plan triennal 1986–1988’.

B. Vavakova / Technovation 26 (2006) 444–462 Table 1 Evolution of the CNRS partnership with industry, number of contracts, participating laboratories and enterprises, and amount of contracts in 1983, 1986,1989, 1994 and 1999

Number of contracts signed per year Number of laboratories involved in collaboration Number of enterprises involved in collaboration Financial amount of contracts in MF

1983

1986

1989

1994

1999

346

1100

2200

3813a

120

n.d.

580

750

1100, 2770a n.d.

95

39

n.d.

176

630

998

1040

480

716

516

Source: CNRS 1990a,b, 1995a,b, 2000. a Contracts under way.

academic research as unrelated to the enterprise sector, no longer pertinent today’ (Mustar, 1994:352). If ever French researchers were really hidden in an ‘ivory tower’17 it was clear during the 1980s that they were offering their knowledge, skills and competencies to national enterprises. Not all of them, however, for the same reasons.18 In the beginning, many were mobilized by the widely diffused discourse about a ‘technological war’ threatening the independence of France. Indeed, even those who were reluctant in principle to what they thought of as the ‘denaturing’ of fundamental research considered it a patriotic duty to help national industry and by extension the nation itself, then undergoing a deep economic crisis. Others supported the policy of the new government in conjunction with the desire to participate in the economic development and social revival of their region. Still others have grasped new entrepreneurial opportunities which the new policy seemed to offer, after feeling constrained within the bureaucratic framework of public institutions (Vavakova, 1989). Altogether, the positive attitude of many researchers towards co-operation with industry (seen at that time by public authorities as an evidence of their changing mentality) was confirmed by a rapid increase in the number of formalized contracts between publicly funded research institutions and industrial firms. In the CNRS,19 for example, 17 The historical reality of the relationship of science with industry and the society points to much more ‘earthy’ and less distant contacts of scientists with their environment than this metaphor depicts and some political interests exploit. See Vavakova (1998, 2001). 18 It does not mean that those motives were always more decisive factors than material incentives, institutional frameworks or constraints. Still, in many respects these motives must be taken into account, as we will see that motivational differences have had some importance in the further involvement of researchers in collaboration with industry. 19 The example of the CNRS is particularly useful. It is the biggest publicly funded research institution in France, employing 25 268 people, of which 11 485 are researchers spanning including most of the scientific disciplines. It has also been collecting data quite systematically on the valorization activities of its personnel.

447

Table 2 Evolution of the CNRS patent applications, licenses and license fees 1983, 1986, 1989, 1994, and 1999

Patent applications Licenses each year License fees each year in MF License fees cumulated in MF

1983

1986

1989

1994

1999

87 47 2.3

133 101 6.6

96 128 13.2

88 109 22.4

230 470 130

4.1

13.1

52

146

517

Source: CNRS 1990a,b, 1995a,b, 2000.

the number of contracts increased tremendously and involved a growing number of laboratories, firms and money over the 1980s and the beginning of the 1990s (Table 1). Within only a few years, the CNRS, a scientific institution oriented quasi exclusively towards fundamental research, was able to display six times the number of contracts with industry, in which five times more of its laboratories and 10 times more of enterprises have been participating. In parallel, the growing number of applications for patents and licenses in the first half of the 1980s also attests to the intensification of efforts to ‘valorize’ research results (Table 2). Although the number of patent applications had decreased after 1986,20 as well as that of licenses after 1989, the fees from the latter continued to increase. The extent to which researchers from publicly funded institutes have created links to industrial firms is also reflected in the rise of consultancy activities. Within 2 years after the promulgation of the 1982 law, the number of researchers in the CNRS, applying for the permission to become consultants21 had almost tripled, and by 1989, it had increased 10-fold.22 In addition, some of the publicly funded research institutes were stimulating the creation of industrial spin-offs from their research results. Between 1982 and 1994, more than 200 SMEs were created by researchers in publicly funded research institutes, using the results of their work (Mustar, 1994). 20 The decrease in patenting is due to the cost of applying, maintaining and extending patents. That of licensing is due mainly to the weak position adopted by the research institute in its negotiations with firms. 21 As civil servants, researchers in publicly funded institutes were bound by the regulation to request an authorization to practice consultancy or expertise. Generally, this was granted for 1 year, with the possibility of renewal. But the activity was limited to 20% of their legal working time and the remuneration could not exceed 50% of their actual salary from the research institute. 22 Nevertheless, these data could be interpreted in two ways. Either they indicate a real increase of that activity, or only a legalization of an already existing practice, which until then had been hidden from the management of the research institutes. The latter could have resulted from the legal statute of the research institutes as public administration bodies, and perhaps also from the dominant conception of these institutes as engaged solely in fundamental research.

448

B. Vavakova / Technovation 26 (2006) 444–462

2. A first critical appraisal of the ‘research–industry’ partnership At the end of the 1990s, for the first time reports critical of the 1982 law and its consequences made their appearance. In 1997, the Revenue court, which is France’s equivalent of a Government accounting office, published a report making a negative appraisal of the ‘valorization’ practices of the four main publicly funded research institutions (CNRS, INSERM, INRA and INRIA).23 The report noted, in particular, a fundamental contradiction between the mission to benefit the national community given to publicly funded research institutions by the 1982 law and the outcome of valorization activities which seemed mainly to ‘increase the resources of component research institutes’ (Cour des Comptes, 1997:15). Although income from collaboration with industry only accounted for between 5 and 11% of the total budget of these national institutions, the court feared that, were they to continue to ‘orient their activities towards research topics with the biggest possible commercial effects, they would undermine their raison d’eˆtre (Cour des Comptes, 1997:19). For the Revenue court, the years since 1982 had witnessed a progressive widening of the range of ‘valorization activities’ undertaken by research institutes. These had moved beyond the licensing of research results to embrace an ever-larger partnership with the enterprise sector. In the process, the objective of these valorization activities altered from producing research for ‘the public’ to the commitment of public research to private interests. The court further observed that neither the research laboratory nor the central administration of these research institutions appeared to benefit financially from the research conducted through contracts with industrial firms. Moreover, while such contracts were increasingly integrated into the work programs of these research institutes, this process was not the result of a deliberate policy by the institutes but rather flowed from the initiatives of individual researchers or teams (Cour des Comptes, 1997:35). The report drew attention to the risks of such a situation, including a disproportionate frequency of contracts with several large enterprises24 and a disregard of the conflict between the objectives of public scientific and technical establishments and the objectives of firms. The former, the authors of the report wrote, are expected to ‘enlarge the scientific patrimony of the nation by diffusing it’; the latter to ‘protect their research results in order to improve their competitive position in the market’ (Cour des Comptes, 1997:81). Overall, the Revenue court noted a very anarchic situation insofar as the financial aspects of collaboration with industry were concerned. In the case of the CNRS, for example, 23

Cf. note 3. In 1994, 19 firms out of the 998 firms contracting with the CNRS accounted for 58% of all contracts and 63% of the CNRS’ total revenues from enterprise contracts. 24

formalized collaboration reported to the central administration or managed by its ‘service of valorization’ was estimated to amount to only 60% of all contracts signed by individual researchers, teams or laboratories with industry. The remaining 40% were treated locally, some through associations, or eventually by other institutions, such as CNRS-University or CNRS-Industry joint laboratories. The result, the court concluded, was the use of accounting practices that were not compatible with the rules of public finance (comptabilite´ publique). As the cost of an increasing number of patent applications became too high for research institutes to bear, they began to share patents with the firms or simply transfer the knowledge to them. The CNRS estimated that up to 2000 patents were given to industrial partners without knowing whether they had led to commercial applications, and thus to any profits that should be shared with the public research institute. Similar problems appeared with license fees, where the CNRS accepted an upper limit fixed by the firm, irrespective of the real benefits of the licensed research product. In addition, the Revenue court uncovered cases in which researcher having created a private enterprise based on their work in a public sector research institute, remained in their positions from where they continued to supply research results to their company. A number of factors help to explain this mismanagement of intellectual property and business relations with enterprises. Public research institutions and their component institutes, centers and laboratories, lacked the commercial and legal competencies to evaluate the worth of their knowledge and in negotiations with large firms allowed the latter to appropriate the results from joint research, even if their financial contribution had been small or provided through public subsidies. Some found an external solution, creating a transfer agency, as the CNRS did, but this brought up other problems.25 The research institutes were thus in a contradictory situation. On one hand, they desired to show that they were implementing the government’s policy to transfer knowledge and technology and on the other, the feeling that they would not be able to do so without making compromises with the enterprises. Indeed, firms were not keen to pay the real cost of joint projects or of services and made such hidden subsidization a condition of their collaboration.26 They often argued that as taxpayers, they were entitled to research undertaken in the public sector. In truth, the 1982 law for the programming of research and technological development had produced unexpectedly adverse effects, partly because of the changing economic and political 25

In this case, the transfer agency made a request of a minimum turnover of 5 millions francs a year (that is over 760 000 Euro, nowdays), subcontracting the contracts and agreements to lawyers, interested only in ‘juicy’ contracts. It means that research outcomes with less apparent lucrative perspectives had little chance of settlement. 26 According to the response of the CNRS administration to questions raised by the Revenue court (Cour des Comptes, 1997:87).

B. Vavakova / Technovation 26 (2006) 444–462

context and related changes in social values and behavior that took place in the second half of the 1980s. The mobilization of the public research sector originated in the context of serious economic crisis. Nevertheless, initially the government substantially increased the financial and human resources allocated to the public research sector. The good will shown by government towards public research, coupled with the nationalization of large firms and the importance given to the SME sector, reinforced the positive attitude that researchers exhibited towards the government’s request to help national industry (Vavakova, 2001).27 Within a few years, however, the socialist government succumbed to the tide of neo-liberalism, privatizing most of the national (ized) firms, and opening borders to direct foreign investment (DFI). By the end of the decade France had became the third largest recipient of DFI (UNCTAD, 1992, 1995 and 1997), a position it held throughout the 1990s. Data also showed that foreign firms were increasing their R&D expenditures in France (MESR, 1994). Faced with continued pressure to open the public research sector to the needs of industry and confronted soon by diminished government funding, researchers and laboratories actively sought to supplement public funding with private resources. Increasingly, these resources were found in more lucrative contracts with foreign multinational firms, since the small French companies that accounted for more than 60% of the partnership of the CNRS were by 1994 still only able to provide 25% of their contract revenues.28 Larger French enterprises, now in crisis, reduced their support for research and development activities in general. In this fashion, public credits and other national resources incorporated in research infrastructure and in the knowledge and skills of researchers came to serve the interests of direct competitors of the very French enterprises they had been created to support. In 1998, a second report, this time commissioned by the government itself, took a critical look at the forms and structures of co-operation that had been developed in the post 1982 period (Guillaume, 1998). Principal among these were measures to stimulate the mobility of researchers. ‘Valorization through people’, as it was called, proved to be almost a complete failure. Over the 11-year period 1986–1996, only 700 researchers and engineers, equivalent to 0.2% of those employed in publicly funded research institutes availed themselves of this ‘opportunity’. As to reverse mobility, that is the possibility for researchers from 27

One should not underestimate the incentive role played by the patriotic feelings of French researchers awakened by the crisis in which national industry found itself at that time. In particular, the fact that many big firms were nationalized helped to reduce the tension that the idea of serving industry would have otherwise produced. At this time the values of ‘freedom’ and ‘disinterestedness’ peculiar to the normative structure of the scientific community were strongly adhered to. 28 SMEs had provided 16% of CNRS contract revenues in 1989 (CNRS, 1995).

449

the enterprise sector29 to spend up to 20% of their working time in a publicly funded research institute, the results were almost as disappointing. Between 1982 and 1995, a total of 891 people from industry participated in this exchange and more than half of these were grant-holders (Guillaume, 1998:40). Commenting on these results, the report noted that ‘.neither public authorities, nor the management of research institutions have taken the necessary actions other than the strictly legal, to make mobility a priority. The observed mobility of researchers is, without doubt, the most wearisome of the cultural blockages which in the world of research, as in that of the enterprises, is opposing the deepening of the relations of co-operation and is differentiating us from our principal foreign competitors’ (Guillaume, 1998: 40–41). These ‘cultural blockages’ did play a role here; they have a number of intertwined historical roots. One of them is the fact that academic and business professions became separated and mutually hostile channels of upward social mobility.30 Thus, consideration must be given also to the traditional preferences of French firms to hire engineers from prestigious ‘grandes e´coles’, specialized in the education of administrative, political and management elite, rather than those graduated from university science programs. As late as 1997, 68% of the new graduates hired by industry for research positions were engineers and only 28% graduated from university, of which 10% possessed doctorates (MENRT, 2000). Although this does reflect partly the narrower, nonbusiness specialization of PhD training in the sciences in France, it is also true that, with the exception of the largest companies, most French firms had not yet sufficiently developed their research departments and their demand for researchers remained low. Yet, when the figures on mobility are placed in the economic context of the 1990s, additional interpretations to the cultural ones, have to be taken into account. During the early 1990s, double-digit unemployment rates and slow growth in R&D expenditure in enterprises characterized the French economy. Financing to create start-ups was also limited in this period. The link between those trends and the decline in mobility in the early 1990s is reflected in Table 3. Of the three forms of personal mobility created under the 1982 law and covered in this table (transfer-‘mise en disposition’, leave of absence-‘mise a` disposition’, and secondment-‘de´tachement’), the transfer was the least risky for researchers since their salary was covered by the public research institution for up to 12 months31 and the researcher’s right to full integration was assured. This form of mobility was mainly used to 29 The CNRS created a special, more prestigious title of ‘Associated Director of Research’ for researchers coming from industry. 30 See for example Zeldin (1994) 1973:775. 31 There were some ambiguities here concerning the obligation for researchers to repay their salary in the event that they did not return but this did not affect the early period when it was not understood to be the case.

450

B. Vavakova / Technovation 26 (2006) 444–462

Table 3 Evolution of personnel mobility from the CNRS to industry 1986–1996

Transfer Leave of absence Secondment Total

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

Total

44 28 12 84

31 20 14 65

29 24 10 63

40 20 13 73

25 22 10 57

9 16 10 35

8 6 5 19

8 5 5 18

15 2 2 19

10 27 9 46

8 34 8 50

227 204 98 529

Source: CNRS, 2000; MENRT 2000.

create a start-up with technology from the researcher’s institute, to accompany the transfer of technology or to undertake postdoctoral training in the R&D department of an enterprise. Thus, the transfer was the form of mobility most frequently used. Under a leave of absence and a secondment, the host enterprise pays the researcher’s salary. The former allowed researchers to significantly increase their salary, but was far riskier since it restricted reintegration to the availability of free posts and these were exceedingly rare in this period. The secondment, which entitled the researchers to return to their post, only permitted them an increase of up to 50% in salary. Despite the obvious financial advantages and relatively small risks of these options, overall mobility was low and fell even further as economic conditions worsened. It is thus logical to suppose that few firms were interested in hiring and paying researchers from the public sector, when they could secure their services more cheaply through consultancy or research contracts. Indeed, between 1984 and 1997, only 2% of newly hired researchers in industry came from the public research sector (MENRT, 2000). In addition to mobility, some of the structures proposed in 1982 by government to bring research closer to industry could be judged ineffectual. Between 1984 and 1997, for example, less than a dozen of the groupings of public interest (GIPs), only 17 CNRS/enterprise mixed units, and very few groupings of economic interest (GIEs) were created32 (Guillaume, 1998:22). The principal reasons advanced for the relative unpopularity of the groupings of public interest (GIPs) were: the heavy bureaucratic regulations required to create such structures (compared to simple contracts); the administrative rule that forbid the hiring of personnel (or only subsidiarily),33 and finally the risk for the research laboratory of losing its independence. The participation of research institutes (EPST) in these groupings was sometimes only symbolic, serving as a ‘scientific guarantee’ for the firm’s activities. At times it also merely reflected the compliance of the research institute with a demand made by public authorities. For the most part this did not represent 32

See the characterization of those structures above, notes 20 and 21. Yet, there has been a real lack of personnel for the extended mission of the publicly funded research institutes. It was only in 1997 that the GIPs received the permission to hire temporarily up to 1–2% of all their personnel. 33

the real interests of the research institute since the rules governing the valorization of technology within the framework of the GIPs imply ‘renunciation pure and simple of public research institutes to their rights of intellectual property for the profit of partners in the GIP’ (Cour des Comptes, 1997). Unclear rights and obligations of each party led to the confounding of public and private interests, which was particularly problematic in the case of medical research. Thus, it is hardly surprising that the groupings of economic interest (GIEs) became more popular because they offered a more flexible type of co-operation than GIPs, even if its members were jointly liable for all debts. As far as the ‘mixed research units’ are concerned, they were not as successful as expected because the teams, by moving to the enterprise, soon found themselves alienated from their research institute. For example, INSERM refused to create mixed laboratories for fear that its teams would lose their independence of scientific choice. Indeed, the fact that research institutes are oriented towards the production and sharing of knowledge, and industrial firms are oriented to produce and sell, can objectively lead to divergence in the selection of research projects. It is not surprising therefore that that the joint laboratory, where the research team continues to belong to and to be evaluated by the research institute is more appreciated by researchers.34 In sum, the 1982 law created opportunities for publicly funded research institutes and researchers to develop a variety of entrepreneurial activities that political leaders and legislators had not foreseen. Their lack of foresight was not due to incompetence, but rather to the cultural, or more specifically ideological climate, as well as the economic environment that underwent important changes in the 1980s. In particular, the recession of anti-capitalist feeling on the one hand, and change in the modes of competition, on the other hand, opened the way to the new social behavior on the part of scientists. If in the early 1980s, many of the French researchers who had began to collaborate with industry did so in answer to the call to help the nation engage in ‘economic and technological war’, by the end of the decade, there were an increasing number who had passed from valorization activities in support of national 34

In contrast, Terry Shinn reported a high degree of satisfaction in a case of a team of physicists who joint collectively a large national enterprise Interview at the INSERM (Pers. Commun.). The difference in the appreciation is undoubtedly related to the differences in scientific disciplines, namely as their spheres of applications are concerned.

B. Vavakova / Technovation 26 (2006) 444–462

enterprises toward the ‘commercialization’ of research to the best paying clients, and the latter were increasingly foreign enterprises. Thus, if earlier positive appraisals of the 1982 research law appear as misjudgments, this is not only because of some confusion between means and ends or because of a failure to evaluate the ‘real’ impact of this policy on the research institutes and the enterprises. The most important factor leading to the negative assessment on the effects of the 1982 law was the shift in the meaning of the ‘research– industry partnership’ that resulted from a change in the distribution of profits under conditions of increased liberalization.

3. A new concept of the relationship between publicly funded research and the private enterprise sector in France In July 1999, the socialist government of Lionel Jospin promulgated the law on innovation and research.35 The law essentially aimed to complete pre-existing laws and to promote ‘the transfer of technology from publicly funded research institutions to the economic sector and stimulate the creation of innovative enterprises.’ The rationale for this legislative act was based on a double critical assessment. First, it was alleged that in spite of significant scientific and technological capacities existing in the country, ‘the articulation between scientific discoveries and industrial activities is less frequent than in other industrialized countries’. This deficiency was seen as expressing itself on the structural level in the lack of efficient partnerships between (publicly funded) research institutions such as the CNRS, INSERM, INRA and INRIA36 and enterprises, and on the human level in a weakness in the relationship between the personnel of these two sectors. Second, it was claimed that regardless of the experience showing that the valorization37 of research results was an important factor in the dynamism of an economy, the number of spin-offs created each year from public research was still too low. Some commentators on the 1999 law on innovation 35 La loi sur l’innovation et la recherche pour favoriser la cre´ation d’entreprise de technologies innovantes. Loi n8 99–587 du 12 juillet 1999, Journal Officiel, July 13, 1999. 36 CNRS, Centre National de la Recherche Scientifiq ue/National Centre for Scientific Research; INSERM, Institut National de la Sante´ et de la Recherche Me´dicale/National Institute of Health and Medical Research; INRA, Institut National de la Recherche Agronomique/National Institute of Agronomic Research; INRIA, Institut National de Recherche en Informatique et en Automatique/National Institute for Research in Informatics and Automation. Each institution is composed of research institutes, centres and laboratories. 37 The term ‘valorization’ means enhancement of value, but it is not reducible to that of ‘commercialization’. It implies a much larger spectrum of activities, including a diffusion of information through publications. Yet, the term ‘valorization’ is often used in the French context as an euphemism of ‘commercialization’.

451

and research considered that it did not differ much from the 1982 law for the programming of research and technological development. Moreover, they believed that the new law was adopted mainly to ratify already existing practices. Finally, they suspected that its purpose was only to serve as one of those ‘strong political signals’ characteristic of the relationship between government and society in France, signals which are not necessarily signs of a real change. We can concede to those commentators that at first glance the new law seemed designed to improve the country’s technological performance using instruments similar to those of the past: namely by stimulating an increase in (i) the direct collaboration between public research institutions and existing industry and (ii) the mobility of scientific and technical personal from the public research sector to private enterprise. It is also true that some of its dispositions related to the types of co-operation between research institutes and the economic sector (such as participation in joint research projects, testing, quality control, training, outsourcing, subcontracting, consultancy and going as far as the formation of joint ventures or the creation of enterprises) appeared simply to reinforce practices that emerged as a follow up to the 1982 law for the programming of research and technological development. In fact, on this particular point it would take a jurist to clarify the differences between the old legislation and the new, since the latter includes the modification of no less than 13 previous laws,38 including that of 1982. Their point was also well taken with respect to the need for a strong political signal towards the scientific community that was noted in the evaluation of the outcome of previous technology policies commissioned by the Jospin government and used as a background paper for the new policy.39 But the 1999 law on research and innovation has mainly reconceptualized the relationship between publicly funded R&D and the private enterprise sector in France To promote ‘the transfer of technology from publicly funded research institutes to the economic sector and the creation of innovative enterprises’, namely those spin-offs from publicly funded research, the law was ‘establishing a legal framework which reconciles those necessities with the general principles securing a regular functioning of public services and morality of behavior of their agents’ (MENRT, 1999:III).40 It also established new organizational structures to improve ‘research–industry’ co-operation 38 Concerning several levels of the educational system, the labour code, the tax system, the commercial enterprises, etc. 39 Henri Guillaume, La technologie et l’innovation, Rapport au ministre de l’Education nationale, de la Recherche et de la Technologie, au ministre de l’Economie, des Finances et de l’Industrie et au secre´taire d’Etat a` l’industrie. Paris: La documentation franc¸aise, 1998. 40 The Minister of National Education, Research and Technology, Claude Alle`gre, promised to create a law that would allow individuals and institutes to engage in technology transfer and the creation of enterprises without too much bureaucracy.

452

B. Vavakova / Technovation 26 (2006) 444–462

and new financial and tax policy measures for the creation and development of technologically innovative SMEs. 3.1. Improvement of the legal framework Four measures of this law dealt with co-operation between research personnel from the publicly funded sector and private firms, and four measures regulated the relationship between publicly funded research institutes and private firms. First, in contrast to the past, agents41 from the publicly funded research sector may create firms, but three conditions are attached to this: (i) the firm must be a spinoff from their own research results; (ii) the agent is required to apply for an authorization from the central administration of the research institute, which takes its decision upon the recommendation of the professional ethics commission. The authorization is for 2 years, and is renewable for a second 2-year period; 42 (iii) the agent is obliged to take a temporary leave from his/her functions in the public service; s/he can also simply leave the civil service. Second, in order to improve the transfer of knowledge and to provide ‘scientific support’ to firms, the law opened the possibility for research personnel from the publicly funded sector to exercise a remunerative activity. But this is also subject to a number of conditions: (i) the firm must ‘valorize’ the results of research produced in the institute or public enterprise to which the agent belongs, and this support must be the object of a contract as in the case of the creation of an enterprise (the only difference is that in this case, the enterprise does not have to be a new one); (ii) the agent exercises the function of consultancy or expertise (but without undertaking any function of management, administration or of supervision). While the consultancy activity should not interfere with the researchers principal functions in his/her research institute, the regulations stipulate that such activities should be limited to 1 day a week, on average. In addition, remuneration for consultancy services may not exceed a limit, which is in the process of being fixed. Again, an authorization is required, and in the opinion of the commission on professional ethics, which the agent must renounce his/her post in the civil service or request a ‘leave of absence’ after the authorized 5 years of consultancy. Third, since the 1982 law agents have been permitted to own shares in an enterprise that valorizes the results of their own research, although with the 1999 law this right was subjected to a number of restrictions. (i) The agent’s share 41

The term ‘agent’ designates here any person with the status of a civil servant who is employed as a researcher, engineer, and technician or in administrative services by the publicly funded research sector. 42 The role of this previously created commission is extended now to the examination of ethical problems that may occur as a result of the cooperation of researchers from the publicly funded research sector with private firms.

may not exceed 15% of the firm’s capital and cannot lead its holder to exercise the functions of chief executive officer or chief operating officer in the enterprise, or to hold a seat in its management organs. (ii) Nevertheless, shareholding is forbidden if the agent had participated during the 5 previous years in the management of the enterprise, or in the negotiation of contracts or other agreements between the enterprise and the public service. (iii) The transparency of the relations between agent, service and enterprise is insured by the obligation to inform the administrative authority under which the agent falls of all income earned by him/her as a result of dividends or the sale of shares in the company and by the prohibition against taking part in the drawing up or signing of contracts between the enterprise and the research institute. As in the two previous cases, the commission on professional ethics must be kept informed of all contracts and agreements concluded between the enterprise and the public research institute not only during the period covered by the authorization but also for a full 5 years after it ends. If, at the end, the authorization to hold shares in the company is not renewed, the agent must sell his/her shares within a year and s/he may not immediately thereafter purchase shares in this firm. Fourth, as an addition to the 1982 law and by special dispensations from two other laws,43 an agent enjoying the status of civil servant was given the permission to be a member of the board of an enterprise. This dispensation to the general rules governing public servants was instituted in order to awaken enterprises to the need for innovation and to draw their attention to the progress of basic research and its applications. Yet, to insure the morality and transparency of relations between the agent, public service and enterprise concerned, several general conditions must be observed. (i) The functions of the agent in the enterprise are strictly limited to those of a member of the administrative Board or of the supervising council of the company. (ii) The financial relations between the agent and enterprise are strictly controlled. S/he may not possess more than 5% of the company’s capital as required in certain instances for membership of the Board. (iii) For attendance at Board meetings, the agent may receive ‘fees for presence’ (jetons de pre´sence) to the exclusion of any other remuneration, but the amount of these fees is limited. The researcher’s central administration is kept informed of the revenues provided by the company. If the authorization is not renewed, the agent must give up his/her position within 3 months. If s/he wished nevertheless to exercise his/her functions in the company, s/he must resign from the public service or apply for a leave of absence. A number of new measures also aimed to regulate co-operation between publicly funded research institutes and enterprises. To stimulate the creation of new 43 July 13, 1983 and October 29, 1936 related to the code of civil service and labour regulations.

B. Vavakova / Technovation 26 (2006) 444–462

enterprises, the institutes were allowed to create ‘incubators’. Broadly speaking, this is interpreted to mean that they may provide space, equipment and material for the new start-ups or for the individuals who have a plan to create an enterprise. In order to manage the research contracts with enterprises or other public collectivities, universities and research institutes may create ‘an office of industrial and commercial activities’ that would also manage patenting, services and publishing activities. To professionalize these activities they are permitted to hire personnel on contracts, and more flexible budget and accounting regulations are instituted. The law also simplified the creation of subsidiaries and of groupings of public interest (GIPs), which serve to federate research institutes, universities and enterprises. In order to facilitate mobility, higher education and research establishments were allowed to contribute directly to the pension and medical plans of agents without having to pass through associations, as had been the case in the past. While greater flexibility has thus been introduced into the regulations governing various mechanisms to stimulate the transfer of technology from publicly funded research to the private sector, the state has also sought to monitor the activities of the research institutions more closely. Henceforth, the state no longer simply renews operating grants to these institutions in a quasi-automatic manner, but negotiates multiannual contracts with them. 3.2. Supplementary organizations The growing recognition of the fact that France, in spite of her scientific potential, has been lagging behind other leading industrial countries in several major technology domains, particularly in information technology, biotechnology and new materials, led to the creation of a new form of partnership between the public research sector and enterprises: Networks of research and technological innovation (Les Re´seaux de recherche et d’innovation technologiques). These networks associate teams from the publicly funded research sector and industry on projects in well-defined technological areas. Their objective is to ‘innovate in products, processes and services, and thus to respond to the demands of the economy and to participate in the creation and growth of enterprises’ (MENRT, 1999:3). Even if the organization of the networks may vary in relation to the subjects and sectors of application, a general rule is that each network is led by a committee of orientation constituted by industrialists and representatives of the public research sector (universities and institutes), while a representative of industry may hold the network’s presidency. These networks will also include Advisors in technology development, (Conseillers en de´veloppement technologique), a function created at the end of the 1980s designed to stimulate technology development in

453

SMEs. Advisors are financed through contracts held between the state and regions (Contrats de Plan EtatRe´gion).44 The primary resource at their disposal is the pooling of personnel from all participating institutions. Their projects can also receive support from the Fund for Technology research (Fonds de la recherche technologique, FRT), the National Fund for Science (le Fonds National pour la Science, FNS), the Ministry of National Education, Research and Technology, and diverse incentive funds in other ministries and agencies. What is important here is the fact that these networks are replacing the big technological programs (grands programmes technologiques), which have played for many years an important but controversial role. They contributed to French excellence in several technological domains such as aeronautics and transportation but by absorbing most of the R&D funds, they deprived other sectors of even the most basic support for technology innovation. In parallel to these networks the government launched the concept of technological platforms (PFT),45 which will operate within the context of the new ‘University of the Third Millennium’ (U3M) plan and serve as a complement to the contracts between state and regions. Their mission is to support innovation and technology transfer from publicly funded institutions of higher education and training. Technological platforms are designed: (i) to pool the resources and competencies of higher education institutions that can be put at the service of SMEs; (ii) to create a space that serves at the same time the activities of teaching, permanent training and technological services; and (iii) to develop structures permitting transfer of the technology to SMEs. Technological platforms do not have research as their prime mission. This is a function assumed by Teams of technological research (Equipes de recherche technologiques, ERT). A Team of technological research is constituted by researchers from publicly funded research institutes who in a partnership with the firm undertake research projects of a medium-term duration aimed at overcoming a technological lock resulting from problems lacking an immediate solution. These teams are supposed to be a part of a Networks of research and technological innovation. With regard to the different structures at the regional level, a decision had already been taken in 1997 to ‘improve the dialogue between the public research sector and enterprise, and to facilitate the development of services for SMEs within publicly funded laboratories’ (MESR, 1997). The mission and statutes of Regional Centres for Innovation and Technology Transfer (CRITT) were clarified and efforts were being made to increase the professionalism of their services—namely in so far as costs, deadlines and confidentiality are concerned—and their 44 Because the 1982 policy of decentralization reinforced the region’s planning mission, contracts between regions and the state aimed to make an inventory of actions compatible with national objectives. 45 PFT, Plateformes technologiques.

454

B. Vavakova / Technovation 26 (2006) 444–462

competence, by continuous knowledge upgrading through contact with publicly funded research institutes. Partnerships with SMEs was emphasized, particularly by creating mixed teams to work on a joint project with SME. Those performing well were awarded the label of a Centre of Technology Resources (Centre de Ressources Technologiques). At the end of 1996, eight CRITTs, among the most dynamic and closest to the market were labeled as CRTs, entitling them to receive additional financial support. The whole policy of the CRITTs, however, has been the object of a critical assessment by a government commission evaluation report in 1998. Once again instead improving upon already existing programs and strengthening coherency among them, new actions were grafted onto older initiatives irrespective of their utility (Guillaume, 1998).

In 2000, 250MF, that is 38 million Euro were allocated by this new policy, of which 23 million Euro were earmarked for incubators.46 As for the selection of incubators, the basic criterion was the linkage with an institution of higher education. The government also created a 91 million Euro (600 million francs in 1999 currency) venture capital fund managed by the Deposit and Consignment Office (‘Caisse de de´poˆts’) as a stimulus to the development of a venture capital industry in the country. In parallel, the government invested 22.87 million Euro to start a ‘primer fund’ (‘fond d’amorc¸age’) which would stimulate complementary private capital to support the creation of enterprises linked to the public research sector. The research and higher education institutions were allowed to participate in this fund.

3.3. Aid to start-ups 3.4. A fresh focus on SMEs The law on research and innovation also introduced a number of legal changes and created tax incentives and instruments designed to make it easier for start-ups to raise capital. These include a reduction from 75 to 25% in the share of an enterprise’s capital that must be possessed by physical persons, and an extension of the use of subscription certificates (bons de souscription) (BSPCEs) to companies rated on the new market. The Research tax credit (Cre´dit d’Impoˆt Recherche) has been modified in order to create an incentive for enterprises to hire researchers. The credit, previously fixed as a lump sum in relation to personnel costs has been raised to cover 100% of real costs in the case of enterprises that hire young PhD graduates. This measure completes the modifications to the research tax credit introduced by the 1999 Finance law, giving an advantage to innovative enterprises by enabling them to receive immediate restitution of the tax credit. The legal framework for innovative enterprises has extended the system of company with simplified shares (socie´te´ par actions simplifie´e, SAS) because the status of limited company has proved to be ill adapted to risky young enterprises with strong growth potential. This extension offers: (i) more contractual freedom adapted to the rapid growth of these enterprises by permitting quicker modification in the capital base and in the relations between share holders; (ii) the possibility to subject the preferred shares to the rights to vote), thus enabling the original entrepreneurs to maintain control of the company despite an increase in capital, and (iii) the possibility to create a company with only one associate. In order to foster the creation of innovative start-ups capable of absorbing research from publicly funded laboratories, the Ministry of National Education, Research and Technology launched a call for proposals addressed to the Institutes of higher education, research institutes, the business support services and venture capitalists. State funds would be awarded to projects covering all or part of the trajectory for the creation of technology enterprises.

Finally, the law of 1999 adopted several new policy measures designed to improve the employment situation of young graduates, while at the same time also helping SMEs to overcome barriers decreasing their capacity to innovate and to create jobs. Besides already existing measures (such as CIFRE, CORTECHS and DRT)47 that supported a training process leading to obtain a diploma, newer measures were essentially a support to innovation. These include the program and provisions for long-term stay in enterprise. The long-term stay in an SME is for example addressed to those who are finishing their studies.48 While retaining the status of a ‘student’, the individual would undertake within an SME a research project designed and overseen by a supervisor. The student would stay a minimum of 4 and a maximum of 6 months in the enterprise. Moreover, if the SME has less than 500 employees, it could 46 Nevertheless, let us notice that 250 incubators were created even before this new policy measure, for example by research institutes, such as INSERM and INRIA, by regional and local authorities, or by private initiatives. 47 CIFRE creates an association between a doctorate trainee, a laboratory and an enterprise for three years, in order to allow the student to realize a thesis related to the hosting enterprise project of development. The student receives a salary of 20 214 Euro a year from the enterprise, with the latter receiving a 14 635 Euro of subsidy from the state. CORTECHS was created in 1988 as a Research Agreement for Highly Skilled Technicians, allowing them to work in an SME on a technological project with financial support and skilled supervision. The state covers up to 50% of the hiring costs for ‘permanent contract of employment’. It targets primarily SMEs with less than 250 employees, but also independent firms with less than 2000 employees. The hired candidates have to be appointed to an R&D task in a framework of an innovative project. The DRT stands for Agreement on obtaining a diploma of technological research. The program was adopted in 1994 used to hire ‘master-engineers’ and ‘engineers trained for research’ to develop co-operation between the institutes of higher education and SMEs on innovative projects. Progressively, all these three instruments were offered as direct support for innovation. 48 In a business school or school for engineers, to be graduated from a university professional institute, or to be registered in PhD programs.

B. Vavakova / Technovation 26 (2006) 444–462

benefit from an allocation of 4573 Euro, divided between the SME and the higher education establishment to remunerate the trainee and to cover the overheads of his/ her pedagogical follow up.49 In parallel, some aides were modified to foster the hiring of young ‘doctors’ and ‘post-doc’ researchers by the SMEs or by publicly funded research institutes classified as having an industrial and commercial mission. The firm is required to hire on an unlimited contract and in return, it receives up to 30 500 Euro to cover up to 50% of the costs of a researcher’s first year of employment.50 This program is financed and managed by the ANVAR. Joint investment funds for innovation (Les Fonds communs de placement dans l’Innovation (FCPI),51 are another financial instrument created by the government with the intention of stimulating mobilization of private capital for SMEs and SMIs. Until now the state in France has assumed the major role in innovation in SMEs. State funding, essentially through ANVAR aids and research tax credits, represented in 1990s 3 billion francs a year, in contrast to only 400 millions francs of private capital for innovation. To create a web of innovative SMEs as vigorous as that in the United States, it was estimated that 10 billion francs of private capital will be needed. By creating the FCPI, the Ministry of National Education, Research and Technology (MENRT) offered not only to share the risk but also to provide tax incentives. Each person who invests in innovative enterprises (those not quoted on the stock exchange) through the intermediary of this fund can deduct up to over 5700 Euro from his/her revenues. The purchase of FCPI shares enables a tax reduction of 25% to the limit of 11 450 Euro a year for a single person and 22 900 Euro for a couple, if they accept to hold their shares in the FCPI for a minimum of 5 years. The capital gains on the shares are also exempted from income tax if they are re-invested in the FCPI or made over. Under the new law, Joint Funds for Investment in Innovation were allowed to invest in all innovative enterprises approved by ANVAR, provided that less than 50% of the shares in were not owned by an already existing company. Convinced that SMEs and very small spin-offs from the research sector have the potential to develop and create more jobs than other firms, the MENRT launched the first national competition for the creation of high technology start-ups in October 1999. One hundred million francs (15.24 million Euro) were made available in the first competition, which was doubled the following year. This new financial instrument aimed particularly to stimulate the emergence of start-ups in: biotechnology, information 49 The similar programs are used to hire ‘master–engineers’ and ‘engineers trained for research’ and to develop co-operation between the institutes of higher education and SMEs on the innovative projects. 50 Aides au recrutement pour l’innovation (ARI). 51 The FCPI, created in 1997, is attracting savings from private individuals to innovative enterprises through tax incentives.

455

and communication technologies, education, multimedia, automation and mechanics, and technologies related to the environment, quality and security. The selection process takes place in two stages. Regional committees composed of heads of companies forward a short list to national committee, which in 1999 for example, was headed by the CEO of a large French company Saint Gobain, and in 2003 by the CEO of Sanofi-Synthe´labo, a French leader in pharmaceutics. The law on innovation and research thus represented a combination of new measures and procedures aimed at reducing the obstacles to the transfer of technology from publicly funded research institutes to the private sector and to the creation of new start-ups. Do the results of the new innovation policy translate into a return on investments, and in doing so, meet the expectations of policy makers?

4. What was gained? By improving the legal framework related to the co-operation of research personnel and research institutes from publicly funded sector with private firms, the government aimed to ‘morally’ ground their activities with industry to foster further partnerships. However, it seems to have reduced joint research between enterprises and the public research sector. Since 1999, only 292 personnel from the public research and higher education sector received an authorization from the commission for professional ethics to participate in enterprise, according to one of the three modalities authorized by the law (MRNT, 2003:7). Compared to the period between 1992 and 1994 when the CNRS alone gave permission to 63152 of its personnel to exercise consultancy and scientific expertise for public or private firms (CNRS, 1995:10), the results of the new regulation may be disappointing.53 This is reinforced when considering that only 55 individuals out of 292 were researchers and engineers from the publicly funded research institutes, and 66 university teachers-researchers (MRNT, 2003:13–14). Moreover, only 12 persons were asking for authorization to provide a scientific expertise to an enterprise, 93 to become an associated director of a newly created firm, 20 to participate in the board of enterprise or in the surveillance council, while the biggest number of them—167, intended to take shares. Thus, the improvement of the legal framework did 52

That is three times more than in 1982–1984. They are surprising in view of overall efforts made by government to increase the participation of researchers from publicly funded research sector in industry, and in view of addressing a population of 121 000 researchers and/or teachers of public sector of research and higher education (OST, 2000:IV). This figure does not even take into the account engineers and technical personnel belonging to this sector which employees in total 208 000 persons. Unfortunately, we do not know how many candidates applied for the permission and how many were refused. 53

456

B. Vavakova / Technovation 26 (2006) 444–462

not in effect foster increased participation of research personnel in enterprises. However, it is difficult to assess if its effect was to eliminate opportunities for abusive practices, or to further reduce the lack of transparency in relationships between research personnel from the public sector and private firms, as the revenue court pointed out in 1997. However, the data on mobility of CNRS personnel offer another interpretation. In spite of all formal guarantees concerning two out of three authorized forms of mobility for civil servants,54 the CNRS, largest scientific institution in France, did not succeed increasing the mobility of its researchers despite its reaffirmed policy of mobility. Altogether 529 CNRS agents had recourse to one of three forms of mobility between 1986 and 1996. In 2003, there were 130 mobile agents, which is a surprisingly low number considering that, depending on the chosen form of mobility, placements in an enterprise can last 3, 5 or 6 years with options to renew the posts once for the same number of years. Due to a period of high rate of unemployment in France, many agents may not be willing to take the risks involved in leaving a post in the public sector, even temporarily. Still, for many agents the main reason to remain within the public research sector is simply a strong identification with the occupation of researcher, in which research is a central life interest. Even if admitting that professional identities are ‘socially constructed and socially bestowed’, people cling to their identities.55 In addition, it is well known that interruptions in research activities can be deleterious to a researcher’s professional competences, especially in very competitive fields of science situated at the frontier. The highest figures representing the intention of research personnel take shares in enterprise, rather than performing there any of permitted activities, substantiate for their part this interpretation? From the perspective of enterprises, data on the evolution of subcontracting R&D activities illustrate their need to cooperate predominantly with other enterprises in France and abroad. Research institutes represent the smallest share of their R&D partnerships, with institutes oriented towards finalized or applied research (biotechnology, ICT or agriculture) being privileged over the education and basic research institutions. Co-operation with research institutes is variable across sectors and dynamic stages of enterprise development, but overall, the major concern of firms is the development and commercialization of products and services. After many years of reducing their external R&D expenditures, French enterprises have increased these figures by more than 9% between 1999 and 2002. But this growth accrues to subcontracting R&D projects worth 54 Two of them give the right to the personnel ending their mobility to return to their previous job in the research institute, the third one only if there are available jobs. 55 See Berger and Luckmann, 1971; Calhoun, 1994.

3700 million Euro (C9% compared to 1998) to other enterprises in France, in addition to projects worth 1414 million Euro deployed to subsidiaries (C11%), other enterprises, and foreign or international organizations. By contrast, contracts with universities and other education institutions diminished over 3 years by 13%, passing progressively from 115 to 87 million Euro, while contracts with CNRS reached 20 million Euro, a rate of 1% growth since 1998 (MRNT, 2004:116). If the 2003 predictions of a looming recession are true, the effects will be felt most heavily by universities and public research institutions. Thus, one may wonder whether researchers and teachers– researchers have distanced themselves from industry, or have the demands of industry upon academic institutions reached a saturation point? Or, have enterprises simply reduced their payments to these institutions, considering that the CNRS, for example, displays an increase in a number of contracts with enterprises by 12.5% between 1999 and 2002? More data are needed, but the responsibility of administrations to harbour ‘confidential’ data makes detailed examinations difficult if not impossible. Do the results of certain aspects of the 1999 innovation policy meet the expectations of the policy makers? This is of particular interest in relation to the main objective of the law on innovation, that is, the creation of spin-offs from the university and research public sector institutions by young people. The results of the support offered by government through the National competition for the creation of a technologically innovative firms program were viewed in very positive light by the Ministry in charge of research (Table 4). In the first year, an impressive total of 1913 applications were received, surpassing expectations. Of these, the regional level recommended 379, and the national committee chose 244 projects for funding. Nearly 70% of the latter were projects requiring between 3 and 12 months of development before the creation of a start-up, of which 79 projects sufficiently followed through to create a start-up within 3 months. These projects received up to 457 000 Euro each. Most importantly, this first competition led to a doubling in the rate of new firms’ created.56 The competition has also been satisfactory in so far as the profile of laureates was concerned: 42% were young PhD graduates, 18% engineers, and 38.5% of laureates came from publicly funded research institutes. In an unusually rapid follow-up evaluation, the Ministry was able to remedy two main problems with the competition: a slow procedure for funding and a lack of information for applicants about the conditions of projects funding. Because the Ministry falls under the accounting regime of a public establishment (and this can only reimburse real expenses), it was decided to transfer 70% of the endowment funds to ANVAR in order to provide an advance to the creators of 56 Interview at the Ministry of National Education, Research and Technology.

B. Vavakova / Technovation 26 (2006) 444–462

457

Table 4 Applications, selections and financing of projects between 1999 and 2003 1999 Endowment Number of registered projects Number of selected projects by regional jury Number of selected projects by national jury Projects with ‘the possibility of creating an enterprise in a short time’b Projects classified as ‘emerging’

2000

2001 a

2002

2003

Total 1999–2003

100 MF (15.2 Million Euro) 1913 379 (19.8%)

200 MF (30.5 Million Euro) 1805 380 (21.0%)

197 MF (30.0 Million Euro) 1481 350 (23.6%)

30 Million Euroa 1465 345 (23.5%)

30 Million Euroa 1439 322 (22.4%)

136.07 Million Euro 8103 1776 (21.9%)

244 (12.8%)

296 (16.4%)

238 (16.1%)

224 (15.3%)

193 (13.4%)

1195 (14.7%)

79 (4.1%)

138 (7.6%)

99 (6.7%)

118 (8.1%)

88 (6.1%)

522 (6.4%)

165 (8.6%)

158 (8.8%)

139 (9.4%)

106 (7.2%)

105 (7.3%)

673 (8.3%)

Source: Ministry of National Education, Research and Technology (MENRT) 1999, 2000, 2001, and Ministry in charge of Research and New Technologies (MRNT, 2002, 2003a,b). a Includes a contribution from the European Social Funds (ESF). b Between 6 and 12 months. Table 5 Education, employment and age profile of all laureates 1999–2003

Engineers (%) PhD diploma (%) Researchers or engineers from publicly funded research sectora Average age of the top 8–9 laureates (years) Less then 20 years old Employees In search of employment (%)

1999

2000

2001

2002

2003

18 42 38.5 35 20 50 20

14 40 37 40 33c n.d. 19

22 49 35 35 n.d. n.d. 19

17 53 47b 36 n.d. n.d. 21

26 49 43b 40 n.d. n.d. 31

Source: (MENRT 1999, 2000, 2001, 2002, 2003). a Most of these seem to be at the Universities and other teaching institutions. b In 2002, this category is that of ‘Projects issued from publicly funded research sector’. c In 2000, the category ‘less then 20 years old’ has been replaced by ‘less then 30 years old’.

a new enterprise. Many candidates were surprised to learn at the last minute that they needed to have complementary financing for their project, and thus were unable to meet the application deadline for the competition. As a result, the information package available to possible competitors has been improved. Yet a closer look at the results of this competition for 5 consecutive years prompts more sober consideration, in particular with respect to the efficiency and adequacy of such an instrument to encourage researchers to create their own enterprises. Indeed, as Table 4 shows, if the total of 8103 applications for 5 years appears to be a relatively high figure, of this only less than 15% were accepted by national jury. Regional authorities have made legal complaints that the national jury has refused a large number of their laureates, and these complaints are now in the process to be resolved by the Ministry. Regions will be allowed to finance some of their selected candidates through the contract-plan between state and region.57 Table 5 reveals that between 1999 and 57

Since the laws on decentralization, these contracts became a major planning instrument for infrastructure and equipment development in the regions.

2001, less than 40% of all laureates were researchers or engineers from the public sector, while 50% were employees. Since 2002, higher figures for following years are clearly due to changes in categorization. Projects are classified not by the presenter’s affiliation, but by the origin of the idea for the project. This may be, in fact, a more appropriate approach to examining the value of potential projects, as supported by other findings below. The same table shows also that the expectations of policy makers regarding the age of laureates were not sufficiently met. In the 2000 competition, only a third of laureates were under 30 years old, and the average age of the top 8–9 laureates was 40 years. This seems to indicate that projects conceived by older candidates were more developed and thus had a higher chance of being selected for support.58 Finally, there may be a link between the increase in the average age of laureates and the increasing number of laureates in search of employment, the latter surpassing 30% in 2003.

58

A finer analysis is needed. It is possible only now to contact participating laureates for survey purposes, as for the the first time in 5 years the Ministry is disclosing a minimum of laureates’ coordinates.

458

B. Vavakova / Technovation 26 (2006) 444–462

A large percentage of laureates with a PhD (46.6%) clearly squares with the policy instrument aiming at the creation of high-tech enterprises, as well as resolving the problem of an overproduction of PhDs. A much smaller (19.4%) share of laureates with an engineering degree reflects a situation particular to French society. Many engineering graduates in France still prefer to find jobs within large companies rather than to create their own firms. Indeed, according to the survey conducted in 1994 by the National Council of French engineers and scientists, only 6% of engineering diploma holders created or took over an enterprise at least once in their life.59 Yet, the government’s program for the creation of high-tech start-ups appears to be an attractive incentive for engineers. Of course, a very high rate of unemployment in France over the last years, which also affected highly trained people, may play an important part in this rise of interest for entrepreneurship within the category of engineers. The same might apply to the graduates from doctoral programs. Nevertheless, the number of projects brought to a successful conclusion is not very high. According to the last inventory, between 1999 and 2003, in total 466 start-ups were effectively created and 155 additional companies are in the process of being established (MRNT, 2003a,b). These new firms constitute 35% of 1195 selected and supported projects, and 7.6% of all presented projects. In 12% of successful cases, projects were hosted within incubators, launched in the framework of the 1999 law on innovation. Since the implementation of the 1999 law, 31 incubators have been established, of which over 20 were created in response to a call for proposals. The state provided 15.2 million Euro to cover 50% of the capital investment; regions and research and higher education institutions of the public sector assuming the other half of the seed money. Each region, with the exception of one, has now at least one incubator, and some have several. The CNRS alone was ‘directly implicated in the creation of seven of these incubators’ and intended ‘to secure a close collaboration with each’ of all other structures. (CNRS, 2000:21). Most incubators are located at research institutes, universities or schools for engineers, and in 2/3 cases they accommodate mostly projects born in this public sector. At the end of 2002, they hosted 733 projects from start-ups, constituting 85% of their objective to accommodate 850 such projects for three years. Altogether, in the beginning of 2003, 344 (37%) of incubated projects led to a spin-off firm, creating approximately 1300 corresponding jobs (MRNT, 2003:8). However, a critical assessment of these incubators points to a series of problems. First, there are frequent confrontations between the different authorities (in particular national and regional) co-funding incubators, who often have conflicting interests. Second, new incubators sometimes overlap with previous incubating structures and 59

See Guillaume (1998:66).

accompanying projects by various institutional actors. Third, coordination between incubators and available services for co-operation with industry within the same research or higher education institutions is insufficient in many cases. Fourth, in a number of cases, incubators lack the formalized conception and practice of ‘coaching’ the incubated projects. Fifth, there is a weak link between the level of expenditures on a project and the level of its returns upon completion. Sixth, the commercial aspects of projects are not thoroughly developed (Ernst and Young, 2003). Finally, one third of existing incubators are considered to be ‘generalists’ due to the insufficient number of specialized projects in one field; thus these incubators are not considered for projects requiring special competencies. Since these problems seem manageable, the current government decided to pursue the path initiated by the 1999 coalition government, by placing incubators into a network to reinforce their competencies. The third policy instrument to foster the creation of hitech enterprises linked to the public research sector, primer funds, (fonds d’amorc¸age) consist of three national and seven regional funds.60 The national funds are specifically intended for the creation of enterprises in the sectors of biotechnology and technologies of information and communication. Initially, the state endowed the funds with 22.87 million Euro, but after the call for proposals the national funds rose to a total of 93.28 million Euro and the regional funds a total of 43.23 million Euro.61 Public research institutes, universities or ‘grandes e´coles’ participate in six such funds.(MRNT, 2003:37–38).Five of these new funds made investments into 35 firms already. However, they represent only 3% of capital invested into the creation of start-ups originated in incubators (while 81% of the whole capital come from personnel and family sources of the creators of these firms). Thus, the three policy instruments contained in the 1999 law on innovation gave birth to 512 innovative start-ups.62 It is estimated up to 100 new firms per year have originated directly from publicly funded research sector since 1999, which seems to be a rate three or four times higher to that observed since the beginning of 1990s (MRNT, 2003:8), but only two and a half times higher compared to the 1980s (Mustar, 1994). Surprisingly, the Ministry in charge of research and new technologies does not yet have a precise definition for an enterprise originated in the publicly funded research sector (MRNT, 2003:46, Fn. 7). Nevertheless, complementing the results of the National 60 Thus, eight regions out of 20, two have this kind of fund (one of the funds is associating two regions). 61 93.28 million Euro in national and 43.23 million Euro in regional funds. The state endowed these funds with 22.87 million Euro (MRNT, 2003:8). 62 Over a third of these enterprises benefited of more than one of the instruments. This may demonstrate the complementary character of these policy measures, as well as the limits of each of them. Multiplication of different measures leading to certain illegibility was already pointed out.

B. Vavakova / Technovation 26 (2006) 444–462

competition to support the creation of a technologically innovative firms, other data suggest that a more critical consideration of this definition and how it relates to that of researchers–entrepreneurs is required. A survey conducted in 2002 with Directors of these incubators survey revealed that 54% of enterprises created there had their origin in the education or research sector.63 Out of 668 project leaders, 25.3% were from universities, 11.1% were from engineering schools, and 17.8% were from the publicly funded research institutes (CNRS, INSERM, INRA, INRIA, CEA and others). While these numbers show progress in terms of moving public researchers into enterprises as researchersentrepreneurs, they do not acknowledge any problems arising from the significant differences between successfully leading a research project and becoming a successful entrepreneur. This is well demonstrated by a second survey focused on innovative SMEs in the biotechnology and ITC sectors in France.64 Interviews with managers of these SMEs revealed that it is crucial for any researcher wishing to spin-off the results of his/her work in a start-up to do so in association with a person trained in business management (Mytelka, 2004). This is a critical point which appears to be ignored in political discourse that adheres to a linear conception of innovation. The first assessment commissioned by the Ministry in charge of research and new technologies found that the economic effects of the 1999 policy instruments took place more rapidly than expected. The networks of research and technological innovation, which aimed to ‘improve the partnership between public research and social and economic sector’ in order to answer problems formulated by industrialists and service companies, unlock the technological locks and accelerate the use of new technologies, structure research and innovation policy’ (MNRT, 2003:9), were extended. Currently, sixteen networks are active with 707 projects, thanks to a state endowment of 299 million Euro and private funding amounting to 350.24 million Euro. Among the beneficiaries of the networks, 36% were research institutes, 29% were SMEs, 14% were higher education institutions, 10% were large groups 6% were schools for engineers. The fact that public research institutes represent the largest share of beneficiaries may be due to a number of circumstances. One may be the compensation provided to research institutes for their financial contributions to these innovation networks, made through the salaries paid to researchers involved in these, and which are not otherwise taken into account. Another reason might be institutional pressures due to the decrease in traditional sources of research financing, forcing researchers to engage in competitions for funding. Institutes and researchers 63 Among the total of 773 incubated projects 39% were those of laureates of the National competition. 64 Survey was conducted in five French regions by Lynn Mytelka, Julie Pellegrin, and the author in 2001–2002).

459

undoubtedly have developed a tendency to undertake initiatives to develop technological projects even in the absence of interested industrial partners. Last, some public research institutes may assume the risks and responsibilities for some projects on behalf of discreetly or confidentially associated enterprises. There are several benefits to firms participating in this program. An evaluation of 151 participating bio-engineering firms revealed that they received a total of 17.23 million Euro from the state; created 164 jobs; incited 96 patent registrations or extensions, and certificates for new plants or brand names; generated 720 000 Euro of license revenues; were able to create 14 new products, seven new manufacturing processes and improve 13 existing products and five processes; finally, three firms were created as a direct consequence of a project supported by the Ministry through the program of networks of research and technological innovation (MRNT, 2003:14). Regarding the integration of young graduates into industry, data reveal that PhD students retain a strong interest in CIFRE grants, which allow them to prepare their thesis within an enterprise on a mutual subject of interest, under the supervision of a public sector research laboratory. In 2002, 820 such grants were signed, financed jointly by the state and firms. Over a span of 20 years, this policy enabled 10 000 PhD students to do research in an industrial milieu. More than 90% of these students found a job in an enterprise, half of which were employed directly by the enterprise that hosted their thesis research. A growing demand for CIFRE grants prompted the government to consider doubling the number of grants available between now and 2010 (MRNT, 2003). However, will it be sufficient to meet the demand for grants, considering that over 10 000 theses are defended each year, while more than 60 000 others are currently in preparation (OST, 2003:69 and 71)? Despite the diminishing share of graduates from PhD programs employed by public research and higher education sector, there is not a corresponding increase in the share of graduates hired by the private sector. Indeed, if in 1997, 3 years after completing their thesis, 51% of PhD graduates became researchers or teachers in the public sector, only 40% managed to do so in 2001. At the same time, the share of those employed in private sector increased over the same period only by 3%, from 15 to 18% (Le Monde, after Ce´req nohre 2003). Consequently, PhD graduates have also difficulties finding employment quickly after graduation, even if less so, than other categories with lower diploma. Considering that in 2001 some 1216 individuals (highly skilled technicians, trainees in technological programs, doctoral students, engineers and post-docs) received an allocation to finalize their diploma within an enterprise,65 65

820 of CIFRE, 281 of CORTECHS, 40 for diplomas of the technological research (DRT) or conventions for engineers, 75 of postdocs stays in SMEs.

460

B. Vavakova / Technovation 26 (2006) 444–462

while 1125 individuals found state support for joint research with a public research institute (MENRT, 2003), the adequacy of such subsidies to foster industrial R&D and to noticeably reduce the unemployment of young graduates is questionable. On the one hand, the number of enterprises in France that have ‘a permanent and organized R&D activity’, which means that they ‘employ at least one full time researcher during 1 year’, more than quadrupled since 1982, increasing from 1300 to 5422 (OST, 2003:28). This spectacular increase in R&D activity is to some extent due to a more rigorous inventory of these enterprises, especially of SMEs,66 but it is also an effect of a series of incentive instruments developed by national policies (and regional initiatives) in favor of technological innovation in enterprises. After a very slow growth (0.1%) in R&D expenditures by French firms between 1991 and 97, they rose by 3.1% between 2000 and 2001. In the same period, the employment of R&D personnel progressed by 6.7% when examining the number of employed researchers, and by 2.5% when all R&D personnel in enterprises is considered (MRNT, 2004:113). At the same time employment of researchers in the state sector grew by only 1.5% (including holders of scholarships) and that of all personnel by 1.8%. Admittedly, while direct public financing of R&D in enterprises has been continuously decreasing since 1992 (by an average of 2.3% per annum) it still represents 10% of their R&D expenditures, while policies aiming to increase the employment of PhD graduates in industry undoubtedly act as indirect subsidies. Will the transfer of research funding away from the public research sector to the private sector resolve France’s unemployment problem as well as its ailing technological performance? Compared to Germany, France has three times fewer registrated patents at the European patent office, and its share in the world decreased by 15% between 1995 and 2000. This is even worse than the case of UK, which introduced a ‘new mode of knowledge production’ earlier, in which research is conducted in ‘contexts of application’.

5. Conclusions Unlike those who regarded the 1999 law as merely completing previous legislation, or as a political banner without much substance, this paper points to several areas of significant change. First, the law reflects a change in the practices of the researchers, but also a shift in the underlying rational of government policy. Second, it reveals a move from a conception of innovation based exclusively on ‘supply push’ to one in which the ‘demand side’, and notably the needs of SMEs are taken into account. Third, it 66 A more rigourous inventory, especially for SMEs, has also its part in this multiplying of firms having an R&D activity. It is, for example, mostly for that reason that between 1992 and 1994 the number of such firms increased by 29% (OST, 2000:103).

signifies that the socialist government that promulgated this law had embraced the idea of a dynamic capitalism based on the creation of new technologically innovative enterprises (start-ups) emerging out from ‘the knowledge production sector’, that is from university and research laboratories. Why were these changes needed? In 1982, the law on the programming of research and technological development encouraged researchers to ‘valorize’ their research results. The legal framework and regulations governing this were to be issued subsequently. This, however, was not done, in spite of the fact that the main focus of practice by researchers and their laboratories slowly shifted from the ‘valorization’ of research results to their pure commercialization. Problems of intellectual ownership and of cumulation of roles and functions at the level of the institution ensued. Major research institutions reacted differently to the absence of rules. Some required transparent partnership processes and that any financial benefits resulting from the collaboration of researchers with industry would support the institute’s research activity. Others had weaker control over the contracts of individual researchers or teams with industrial clients. This, de facto, allowed for the private appropriation of benefits from publicly funded research results. The lack of regulatory guidelines, of legal and economic competencies, and sometimes even of interest by various research institutions, had contributed to an anarchic situation insofar as ownership and the negotiation of contracts with industrial firms were concerned. The attitudes of various research institutions ranged from a strong defense of their interests and of the public interest to a virtual abandonment of both when facing industrial clients and their demands. The 1999 law on innovation, by clarifying the legal framework within which collaboration with industry would be undertaken, tried to equalize the practices of research institutes in this domain, and protect the interests of the public research sector against the unfair or abusive behavior of private companies. Thus, in contrast to the 1982 policy, the latest socialist government no longer viewed the ‘valorization’ activity of publicly funded research institutes with industry as a simple process of transferring research results to national industry and the ‘national collectivity’, but as a process of commercialization and business partnership requiring a fully professional approach to its legal and financial aspects. It is not certain that this new legal framework, even with its extended legal possibilities, reinforced the relations between research institutes and enterprises, but intellectual ownership may be better protected. This move to protect the interests of the public research sector would not have been possible had the government not also changed its conception of innovation. Indeed, in 1982, despite appearances, the way the state set about to foster innovation in national industry did not differ from what had been done in the past, that is, creating and mobilizing public research agencies. Taking the German model of ‘research–industry’ co-operation, as the French public authorities initially seemed to do, would have required

B. Vavakova / Technovation 26 (2006) 444–462

creating the necessary conditions for its reproduction. Indeed, the efficiency of that model was primarily based on the very different behavior of German firms, and not on that of the research institutes. Thus, German firms, unlike French firms had far higher levels of in-house R&D. To complete these activities, demand from those firms pulled forward research collaborations that were undertaken with local research institutions. The German model also depended upon the strong relationships established among different actors at the local level and these were supported by a system of truly decentralized political power, as well as administrative and business institutions. In France, however, important the act of decentralization in 1982 was, it did not provide local authorities with the means to act on their own. Instead of stimulating the ‘demand side’, the central government simply supported a ‘supply side’ model. Instead of stimulating the interactive networks born from initiatives of civil society, it very often imposed its own view. Yet over the 1990s more powers have devolved slowly to the regions to promote, support and finance new start-ups and linkages between research and the enterprise sector. By allocating new public and private resources for the creation of the innovative start-ups, by facilitating the transfer of technology from the publicly funded research institutes and by offering its support to the creation of incubators within or with the help of research institutes and regional authorities, the 1999 law has brought some change. But already new considerations of the contributions of science to industry are emerging in the most technologically competitive countries, which may require further adjustment of the latest innovation policy in France. These point to the importance of innovation, that is learning and creativity, in all social activities, including research and policymaking. In the longer term, the business sector might benefit more from results of innovative research at the frontier, than from a supply of services or commercial amateurishness of researchers.

Acknowledgements I wish to thank Professors Helena Lastres and Jose´ Cassoliato from Universidad de Rio de Janeiro, Brazil, for having stimulated the writing of this, and Lynn Mytelka, Director, UNU/INTECH, Maastricht, Netherlands for her very helpful comments.

References Berger, P., Luckman, T., 1971. The Social Construction of Reality. Penguin Books, Middlesex. Calhoun, C. (Ed.), 1994. Social Theory and the Politics of Identity. Blackwell, Oxford, UK/Cambridge, USA.

461

Cour des Comptes, 1997. Valorisation de la recherche dans les e´tablissements publics a` caracte`re scientifique et technologique, Rapport public particulier, Les e´ditions du Journal officiel, June, Paris. CNRS, 1990a. Rapport d’e´tape CNRS-MRE, pv 30-04-90, CNRS, Paris. CNRS, 1990b. Valorisation, Cahiers de la De´le´gation aux Etudes et Audits, no3, November CNRS, Paris. CNRS, 1995a. Les Relations avec les entreprises. La recherche a` objectifs partage´s et les transferts de technologie, CNRS-Mission des relations avec les entreprises, 15.06., Paris. CNRS, 1995b. Les Relations avec les entreprises La recherche a` objectifs partage´s et les transferts de technologie. CNRS-Mission des relations avec les Entreprises, 12.09., Paris. CNRS, 2000. Recherche–entreprise. CNRS-De´le´gation aux entreprises, Paris. CRST (Conseil Supe´rieur de la Recherche et de la Technologie), 1986. Rapport annuel sur l’e´valuation de la politique nationale de recherche et de de´veloppement technologique, CRST, October, Paris. Ernst and Young, 2003. Evaluation a` mi-parcours des incubateurs d’entreprises innovantes lie´s a` la recherche publique, Rapport de synthe`se final 10 septembre, Ministe`re de´le´gue´ a` la Recherche et aux Nouvelles Technologies, Paris. Freeman, C., 1988. Quantitative and qualitative factors in national policies for science and technology, in: Annerstedt, J., Jamison, A. (Eds.), From Research Policy to Social Intelligence. Essays for Stevan Dedijer. MacMillan Press, London, pp. 114–128. Guillaume, H., 1998. La technologie et l’innovation. Rapport au ministre de l’Education Nationale, de la Recherche et de la Technologie, au ministre de l’Economie, des Finances et de l’Industrie et au secre´taire d’Etat a` l’Industrie. La documentation franc¸aise, Paris. Kourilsky, F., 1993. Les entreprises, partenaires privile´gie´s du CNRS, Editorial of the Note d’information du CNRS aux e´lus, aux partenaires e´conomiques et sociaux 1993. MENRT (Ministe´re de l’Education Nationale de la Recherche et de la Technologie) 1999, 2001, 2002 and 2003. Concours National a` la cre´ation d’enterprise de technologies imovatites, Re´sultats 1999, 2001,2002, 2003 MENRT, Paris. MENRT, 2000. Les chercheurs en entreprise. Evolution sur longue pe´riode et situation en 1997, Note d’Information, 00.10. MENRT, Direction de la programmation et du de´veloppement, Paris. MRNT (Ministe`re de´le´gue´ a` la Recherche et aux Nouvelles Technologies), 2003a. Politique en faveur de l’innovation. (http://www.recherche. gouv.fr/plan-innovation/presentations5.htm) MRNT, 2003b. Mesures de soutien a` l’innovation et a` la recherche technologique. Bilan au 31 de´cembre 2002. Ministe`re de´le´gue´ a` la Recherche et aux Nouvelles Technologies, Paris. MRNT, 2004. Recherche et de´veloppement en France-Re´sultats 2001, estimations 2002. Objectifs socio-e´conomiques du BCRD 2003. MRNT, Paris. Mustar, P., 1994. La politique d’innovation en France: le Colbertisme entame´ (ou: le grand virage des politiques technologiques, in: Sachwald, F. (Ed.), Les de´fis de la mondialisation. Innovation at concurrence. IFRI, Editions Masson, Paris, pp. 55–72. Mytelka, L., 2004. Clustering, long distance partnerships and the SME: a study of the French biotechnology sector. International Journal of Technology Management 27(8), 791–808. OECD, 1986. La Politique d’innovation en France, Collection CPE/Economica, Paris. OECD, 1982, 1985, 1991. Main Science and Technology Indicators. OECD, Paris. OST, 2000. Science & Technologie Indicateurs, Economica, Paris. OST, 2003. Science & Technologie Indicateurs, Economica, Paris. Salomon, J.-J., 1986. Le gaulois, le cow-boy, et le samouraı¨, La politique franc¸aise de la technologie. Economica, Paris. UNCTAD, 1992, 1995, 1997. World Investment Report, United Nations, UNCTAD, New York/Geneva. Vavakova, B.,1989. Les technopoles: des exigences techno-e´conomiques aux orientations culturelles, Culture technique, no 18, spe´cial Recherche.

462

B. Vavakova / Technovation 26 (2006) 444–462

Vavakova, B., 1998. The new social contract between governments, universities and society: has the old one failed? Minerva 36, 209–228. Vavakova, B., 2001. La Science de la Nation? Paradoxes politiques de la logique e´conomique. Editions l’Harmattan, Paris. Zeldin, T., 1994 (1973). Histoire des passions franc¸aises I (1848–1945). Editions Payot and Rivages, Paris.

Blanka Vavakova, a Sociologist, is a researcher at the National Center for Scientific Research (CNRS) in Paris, France. She graduated from Charles University in Prague and received her PhD degree from Institut d’Etudes Politiques de Paris. Her earlier work analyzed the process of social differentiation and changes in value orientations in France and the countries of East and Central Europe. Her current research focuses on social and cultural aspects of innovation related to the strategies of technological and industrial development, such as: research–industry partnerships, European co-operative programs in science and technology capacities, and the emergence of local initiatives, including technopolisis. She directed a Franco-Canadian joint project on local strategies of development based on building indigenous technologies capacities, and undertook research on Franco-German co-operation through the European R&D programs funded by the French Ministry of Research and Technology. She is the author of several articles devoted to these subjects and has written a book on the interface between local, national and European research systems within France. As a visiting professor she has also taught and worked on collaborative research projects at the University of Ottawa (Canada), at the University of Campinas (Brazil), and at Maastricht University, in Netherlands.