Download Knowledge as visibility

The need for a new paradigm in policy making for the
knowledge-based economy
-Stimulating the knowledge production in RomaniaRadu GHEORGHIU, PhD Student in Economics
(Senior Researcher, Institute for World Economy, Bucharest, Romania)
Geomina TURLEA, PhD in Economics
(Senior Researcher, Institute for World Economy, Bucharest, Romania)
In search for a functional paradigm
There is already a vast literature that has been developed on the role of knowledge for the
economic growth. However, so far there is no functional definition of knowledge and its
economic and social value, in the sense of ensuring a logical continuity with the
measurement methodology and finally with the policy recommendations. Thus, when
economic policy-making is concerned, very often the definition of knowledge is imported
from the epistemological debates, ignoring their rather different target 1, and then the
whole argument is simply developed independent of it.
A largely used approach considers the econometric variable multifactor residual as a
proxy for the role of knowledge as one of the sources of economic growth.2 Although this
method is indeed making a consistent assumption, that knowledge is the factor that
explains the synergy of labor and capital, it does not provide in-depth understanding of
the growth-driving policy action.
A second theoretical line is the one opened by Stiglitz (1987, 2000, a.o) and the approach
of the informational asymmetry as a barrier in reaching the optimal market equilibrium.
Nevertheless, this approach is targeting especially the relation between the suppliers and
the customers, as the information is seen as relevant only in relation with the current
market status and not with its potential value following the further recombination.
Another common approach is the pillars one: rather than focusing on an integrated vision,
it refers to the individual elements that seem to stimulate knowledge creation and its
incorporation into goods or services. It is for instance the case of the definition provided
1
Epistemological debates are generally focused on elaborating models of the correlation between the
internal (mental) representations and an external reality.
2
See for instance: Andrea Bassanini, Stefano Scarpetta and Ignazio Visco, Knowledge, development in economic
growth: recent developments from OECD countries, 2000, and also World Bank, World Development
Report – Knowledge for development, 1998/99
by the World Bank, which divides the Knowledge Based Economy (KBE) into a four
pillars – scheme3, as follows:

An economic and institutional regime that provides incentives for the efficient use
of existing and new knowledge and the flourishing of entrepreneurship;

An educated and skilled population that can create, share, and use knowledge
well;

A dynamic information infrastructure that can facilitate the effective
communication, dissemination, and processing of information;

An efficient innovation system of firms, research centers, universities, consultants
and other organizations that can tap into the growing stock of global knowledge,
assimilate and adapt it to local needs, and create new technology.
Although this type of approach is opening for concrete policy measures, the lack of an
integrating principle is endangering the relevance of the chosen pillars and the
interdependencies and the synergy effect.
This is also the case of the Lisbon Strategy, elaborated by the European Union. This
strategy makes the knowledge-based economy its major objective, but again it does not
provide an integrated vision of what the economic dimension of knowledge really is. The
World Bank pillars are replaced here by quite similar “action lines”, whose synergy is
again hard to follow.
From these examples, all promoted by important international bodies, it becomes clear
that although the role of knowledge for economic growth is largely accepted, there is a
certain ambiguity regarding its mechanisms of creating value and the ways in which these
could be directly stimulated. This situation is not only favoring certain incoherence, but it
may affect the optimality of the policy lines.
In what follows we propose a theoretical framework, still in the stage of a large
paradigmatic preparation, but which, in our opinion, opens for consistent policy
measures. By exemplifying its relevance in the case of Romania, we are attempting to
prove its applicability to real contexts.
Knowledge as visibility
Our proposed theoretical framework builds on three related concepts, namely: the
Schumpeterian definition of innovation as recombination4; the innovation without
research concept promoted by Cowan and Gert van de Paal (2000); and the utilitarian
vision of knowledge.
3
http://info.worldbank.org/etools/kam2004/
Joseph Schumpeter (1934) defined innovation as: “the commercialization of all new combinations based
upon the application of a) new materials and components, b) the introduction of new processes, c) the
opening of new markets, or d) the introduction of new organizational forms.”
4
Innovation as recombination perceives innovation as any new result generated from
combination of already known elements or factors. Within this perspective an innovation
is an economic optimization issue as it is a scientific/technical one.
Considering that the recombination processes can have different degrees of complexity,
we can assess that only starting from a certain level, this process involves research. Thus
we reach our second acknowledged concept, that of innovation without research, which,
in our opinion, opens for including as part of knowledge production a reality that is
playing a major role in the economic life. Innovation without research simply is the
knowledge recombination that economic actors are pursuing in order to optimize their
activities, on the background of access to information and favored by the experience
accumulated
The elaboration of a theoretical model and also of consistent policy measures concerning
an extended knowledge production system, larger than the RD activities, represents, in
our opinion, one of the major challenges in the context of KBE.
Going further, we consider that the recombination, with or without research, is possible
for knowledge with any degree of codification.5 It is important to highlight that in the
economic life, the valuable knowledge is not always codified, because else large
segments of this economic reality would be ignored.6
It is for instance the case of commercials which are indeed “the heart of the trade”.
Although their messages are often promoting non technical aspects of the products, their
role in establishing the perceived values and needs (those that lie at the basis of price
formation) can not be denied.
Very often the non-codified knowledge is more than simply added to the codified one.
Thus, valuated knowledge is not hidden in tables and databases on various Internet sites,
but simply comes together with the user-friendly interface.7
More generally, it can be stated that the social and economic value of any product,
including the high-techs, is not given by the science behind it, but by the intuition on its
potential utilization.8
Taking all these into account, we consider that in what regards KBE, strictly speaking
from the economic point of view, what is important is a certain dimension of knowledge,
that we call visibility. By introducing this term we are attempting to focus the attention to
5
Cowan & van der Paal suggest that this type of innovation is primary valid for tacit knowledge. This
position is explainable because they associate the concept of innovation without research with the one of
learning without research, thus they understand the process more like taking place in somebody’s mind,
based on their past experience.
6
This statement is following the position expressed by the philosopher Martin Heidegger that scientific
knowledge is only a particular way of understanding, and it is not necessary the most proper in every case.
7
This is a position close to the phenomenological one, which is trying to eliminate the distinction between
the appearance of things and a so called “real” meaning.
8
This association between value and utility is the general argumentation line of the utilitarianism, which
represents the base of modern liberalism.
the way that knowledge becomes valuable in itself and also serve for creating new
valuable one.
The new knowledge is largely based on the old knowledge. When the old one has been
made visible in a way or another, combinations emerge rather naturally, even if this
involves the engagement in a research project. Thus, it becomes clear that the simplest
way of stimulating the creation of new knowledge is to make the old knowledge visible.
Visibility represents more than what is generally understood by transparency (access to
information) and also more than dissemination (replication of knowledge), as visibility
plays a more active role. It operates pro-actively by structuring, increasing accessibility,
simplifying or increasing awareness.
The visibility of knowledge is strongly connected with the visibility of the knowledge
providers/owners. This characteristic derives from the closer connection between the
conceptual content and its interface.
By proposing the visibility framework, we are not attempting to focus on the theoretical
dimension of knowledge, but to connect it to the supporting factors as human skills,
capital or information and communication technologies (ICT).
This framework is not contradicting the above mentioned approaches of KBE, but it is
rather integrating them. Thus, the visibility paradigm works with the multifactor
productivity, as it explains how knowledge can better mix resources. Obviously, larger
visibility reduces the information asymmetry and the associated transaction costs.
Also the visibility framework connects the three dimensions largely acknowledged of
KBE: human capital, ICT and innovation. For simplicity we may consider ICT as the
privileged medium for ensuring the visibility of the existing knowledge, human capital as
the factor able to perceive opportunities of combining knowledge, and innovation as the
final process. Of course, individuals are able to perceive these opportunities only if they
have assimilated a certain amount of the old knowledge. From this perspective, relative to
KBE the education system could be seen as a visibility system for the knowledge gains.
This perspective would probably involve some changes in the education policy, as would
grant more attention to the correlation with the knowledge frontier. The relatively new
concept of science for life is close to this spirit.
The term visibility is introduced mainly in order to cover an already existing reality. In
the academic world, visibility of knowledge is implicitly recognized as inner value and
benchmark. Thus, a largely accepted proxy for the value of fundamental knowledge
production of a country is the number of papers published in “impact” scientific
magazines. Nowadays, the channels of visibility function as selection filters for
theoretical ideas as well as for the practical ones.
Fundamentally, we are discussing ways to stimulate knowledge creation and its
transgression into marketable goods and services. In doing so, we attempt to focus the
KBE policy measures to the stimulation of general visibility in certain fields, thus to the
visibility of all types of knowledge, from the technical one, to the market or partnership
opportunities or about the resources available. The presupposition is that, in a competitive
based environment, the larger the visibility, the larger the recombination process.
The further development of this paradigm change calls, in our opinion, for a niche of
interdisciplinary research that would bring together at least economics (including
industrial organization), sociology, communication science, pedagogy, and science
philosophy.
In the following chapters we analyze, in the particular case of Romania, a proposed
framework for the stimulation of KBE, starting from the restructuring of the innovation
system by orienting it towards visibility.
The general context of innovation in Romania
Romania’s turbulent economic transition, combined with an inertial policy in the R&D
field resulted in the loss of the connection between industry and research.9 As a
consequence, a vicious circle was created: the state is ensuring the minimum financial
resources for maintaining the RD system functional but, as the human and technical
capitals of RD are deteriorating, so is its ability to respond to the real needs. Demand
from the industry is also very weak, as few companies proved able to compete through
innovation.
The research system is severely under-financed. With the research intensity at only
0.38% of GDP, in 2000 Romania had the lowest value in Europe except for Cyprus,
showing also a strong divergence from the EU-15 average10, which invest close to 2% of
their GDP into research and development. In 2002 the value for Romania remained
unchanged, as well as the fact that slightly over 3 percent of these expenses have been
allocated for equipment and apparatus.
This situation has impacted on the number of patent applications which remains very low
(see table 1). Moreover, most of these applications are coming from individual inventors
(75% in 2002), which primarily look for a social recognition of their personal creativity.
This shows both the weak capacity of the research system to attract the existing creative
potential and the fact that the innovation system is not yet industry oriented.
Table 1. Patent applicants at Romanian State Office for Inventions and Trade
Marks
Romanian applicants
Foreign applicants
Total
Romanian patent applications
per million inhabitants
1998
1999
2000
2001
2002
1299
1061
1003
1228
1477
473
342
289
281
205
1772
1403
1292
1569
1682
58
47
45
55
66
Source: Romanian State Office for Inventions and Trade Marks, Annual Report 2002
9
The weak linkages between the research community and industry have been recognized by Ministry of
Education and Research which estimates that only 12% of the research results are applied in industry.
10
Data source: Eurostat, Structural indicators, http://europa.eu.int/comm/eurostat/Public/datashop/printcatalogue/EN?catalogue=Eurostat&collection=03-Key%20Indicators
The crisis of the research system is also reflected by the situation of external patents.
Although Romania had a Co-operation Agreement with the European Patent Organisation
(EPO) on the extension of the effects of the European Patents to Romania, the number of
applicants for EPO patents is insignificant. However, the situation is expected to improve
at least in what access is concerned, as Romania became a member of European Patent
Convention (EPC) in March 2003.11
Table 2. Number of patent applications to the European Patent Office (EPO) per
million inhabitants
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
US
86
88
91
96
106
117
130
142
166
170
Japan
97
89
90
88
101
115
123
132
160
175
EU15
84
83
86
92
97
115
130
141s
159 s
161
:
3
3
3.7
3.8
4.5
5.5
5.4
7.7
7.6
0.35
0.35
0.26
0.79
0.75
0.4
1.33
0.98
1.11
0.76
Acceding and
Candidate
Countries
average
Romania
Source: Eurostat, Structural indicators
United States Patent and Trademark Office (USPTO) data show similar results. Not only
does Romania rank last, but it stands at a great distance from the other candidate
countries.
These quantitative gaps reveal systemic differences, as the number of Romanian patents
is simply mirroring a non-functional system requiring a profound reconfiguration.
The structure and functionality of the innovation system
As mentioned before, the visibility of knowledge comes together with the visibility of the
players involved. Thus, valuable knowledge is connected to the owners due to property
rights. Very often knowledge is strongly connected with people, when all or parts of it are
tacit; or it is imbedded in an organization’s structures. Or it is only a certain kind of
structure that has a deep understanding of its articulations and it is only that structure that
can further develop it. Making visible who knows what and what they can do further is
the major challenge in stimulating the recombination of knowledge. This kind of
visibility is going beyond theoretical abilities and is connected also with the credibility of
the actors, their management skills and their ability of mobilizing resources. Of course,
building an innovation system based on this kind of visibility is a very complex task, and
it is only a mature innovation system that comes close to this situation.
11
http://www.european-patent-office.org/news/info/2002_12_19_e.htm
A less ambitious task is to make the players visible. Who is involved in the innovation
system? Are there any entry criteria? Circumscribing the innovation system is important
for clarifying the area of innovation policy and also for fostering the interactions.
In Romania, until 2002, there was a “RD system” that according to the statistics of
Ministry of Education and Research12 included 590 units, out of which 280 research and
development institutes and 310 joint-stock companies (public or private), with researchdevelopment as main object of activity. Since 2003, the system was called RDI (with I
from innovation), but the structure remained quite the same.
Although the fundamental research was not clearly delimited and the financing channels
were also mixed, in the last repartition the fundamental research institutes were mostly
subordinated to the Romanian Academy, while most of the technological ones were
subordinated to the Ministry of Education and Research.
In 2003, the concept of innovation entity emerged. According to the Government
Decision 406/2003, there are specific conditions regarding the eligibility of a firm or a
department of a research institution to be considered as an innovation entity. The
applicants for such a status must provide certain documentation, and need to score at least
70 points out of 100, according to several criteria, in order to be accepted. What does it
serves for? By now being an innovation entity opens the access for becoming a so called
innovation infrastructure unit. This, in its turn, is a new introduced concept which in fact
refers to technological transfer centers that are financed through a Governmental
Program.
We consider that the initiative of defining the innovation entities is very important for
creating the visibility of the players involved, but a larger applicability is need for it not
to become a simple formality, which might eventually represent a barrier to innovation.
An important step would be that this status would open the access to all the state budget
financing. To this issue we will return latter.
For now, one question arises: who in principle should be part of the innovation system?
In our opinion innovation involves four elements: the research system, the companies
that are initiating the innovation process (here called innovation drivers), the financing
mechanisms and the innovation infrastructure13. Of course, the borders between these
elements are only indicative, as in practice various functions might be occur within the
same institutional unit in an efficient way.
Having as benchmark the current situation of Romania, in what follows we will present
each of the four elements, in an attempt to reveal how their functionality and synergy are
highly dependent upon the visibility level.
12
Research, Development and Innovation 2001-2002, Ministry of Education and Research, Bucharest,
January 2003;
13
Usually, the general economic and legal background is taken into consideration as the enabling
environment. In our context, it might be seen as part of the infrastructure.
Typically, the research system includes the research institutes, the research departments
of universities, RDI companies and RD departments of the companies.
Referring to the specific situation in Romania, the research system was considered to be
the only policy element in this field. Even at the highest governmental level, research and
innovation are not understood and approached as different processes that address distinct
markets and have different timelines, objectives and funding mechanisms. As research is
the basis for innovation, being further from the market on the knowledge creation chain,
it requires public support and cross-checking from the scientific community.
Box 1. The general situation of the Romanian research system
As in Romania the research activity is still concentrated in the public sector (about 80% of
research)14, it is characterized by the specific state bureaucracy and lack of initiative (including
the weak marketing activity), which both result in a limited capacity to produce marketable
outcomes. The attempts made so far to privatize some of the RD units proved unsuccessful, as
95% of the privatized units were closed afterwards15, mostly because the privatization of the RD
units have been made based on the same methodology as the other economic units.
Given the inherited design of the education system and the understaffing, the university research
is under-developed. The private research companies are mostly dedicated to consulting,
undertaking therefore knowledge transfer functions.
Due to limited budget, the number of researchers decreased constantly (from 1.62 per 1000
inhabitants in 1991 to 1.09 in 200216), simultaneous with the increase in the average age.
Moreover, infrastructure became morally outdated (5 to 10 years).17
The research system structure is very diversified by domains, fact that might represent an
opportunity for future development but, in the context of the small total budget, is translated in a
low efficiency of currently dissipated resources.18
One important issue regarding the functionality of any research system is its ability to tap
the international technical evolutions. Increasing the visibility of global technical
evolutions inside the research system represents a significant push for ensuring its
competitiveness. However, this does not necessarily mean that the research units are able
to move on the global technological frontier, but it may focus their activity and increase
their chances at least in engaging in incremental innovation.
The increasing global visibility of knowledge has not yet eliminated the relative
advantage of the location. In the literature this aspect is addressed as the role of clusters19,
or networks, or as the systemic and systematic approach20 to the innovation.
Unfortunately, in the case of Romania, the lack of financial resources affected also the
access to up-to-date information. Although in the last years the number of Internet
connections increased significantly, as well as the mobility of researchers, the access to
paid materials is rather scarce.
14
According to the National Development Plan (2001-2005)
Declaration of Radu Minea, President of R&D Trade Union in Romania during the debate “Romanian
research- Where to?”, in Adevarul, December 19th 2003
16
Calculated based on the Romanian Statistical Yearbook, 2003.
17
idem.
18
The trend towards dissipation of resources was recognised in Report on Research, Development, and
Innovation, 2001-2002, http://www.mct.ro/web/2/DOC/raport/Raport.pdf
19
Porter (2003) mentions among the advantages of the clusters the fact that they increase access to inputs,
ease coordination, fasten diffusion of best practices, and enhance the ability to perceive the innovation
opportunities.
20
The two, although complementary are still different, as the systemic aspect regards rather the
geographical extent, and the systematic one relates to the time extent.
15
Generally speaking, the innovation drivers (meaning the companies that are initiating
the innovative process based on their market strategies) have the most important role in
transforming the visible knowledge into marketable products. These companies should
reflect more than a passive demand, as they are considering the economic opportunity of
recombining knowledge. Moreover, as recent studies show, these companies are more
and more involved in different stages of the innovation process.21
In the new structure of the innovation system the innovation drivers are not considered.
Moreover, it can be stated that there is certain confusion with the companies developing
their own research, i.e. companies with RD department having at least eight employees.
This confusion may have significant impact on the focus of support for innovation,
especially given that in Romania the R&D activities are mainly extramural (87%).
The share of enterprises with applied technological innovation decreased from 32% in
1996 to 10% in 2000 and the share of enterprises in which value of new or improved
products is over 10% of turnover decreased from 16% to 3% over the same period 22. This
statistic shows that currently in Romania the technological transfer and innovation are not
alternatives but rather complements. In terms of visibility this situation is not unnatural,
as, from this perspective, both are highly dependent on the visibility of the knowledge
incorporation opportunities.
Both technological transfer and innovation require specific skills, even though in
different degrees. Such skills refer to the ability to see market opportunities in correlation
with technological evolutions, to identify the technical solutions, to evaluate cost-benefits
ratio, to properly evaluate the risks, to identify the resources needed, stress the role of
ICT and high-skilled persons, etc. All these are currently underdeveloped in the
Romanian companies and should be gained by the employees, by managers, or embedded
in the organization of the company. In order to stimulate the companies to start their
learning process in this direction, the first necessary step is to ensure a higher visibility of
the economic benefits that knowledge incorporation brings about. Besides ensuring this
basic awareness regarding the role of innovation, the policies should address more
complex issues as market visibility, technical foresight, the visibility of collaboration
opportunities, a higher visibility of skills through a credible system of certification.
An important dimension of visibility for companies can be given by the ISO certificates.
Due to the low awareness in this direction in Romania, the number of companies getting
these certificates increased significantly only starting with 2002, their number being still
low (2463 with ISO 9000 and 45 with ISO 14001).23
Another factor that contributed to companies’ low propensity towards innovating was the
economic instability that oriented them towards short-term objectives and/or immediate
maximization of insiders’ welfare. This aspect can also be transferred in terms of
21
Lengrand (2002) describes three generations of the innovation models: linear, with feed-back and
systemic. The linear one begins with laboratory science and moves through successive stages until the new
knowledge is built into commercial applications that diffuse in the economic system. The feed-back model
involves two-way communication across different points in the innovation process, while the systemic
model include almost permanent collaboration between the research unit and the commanding company.
22
Innovation policy in seven candidate countries: the challenges. Innovation policy profile: Romania,
Study coordinated by ADE , March 2003
23
The ISO Survey, http://www.iso.org/iso/en/iso9000-14000/pdf/survey12thcycle.pdf
visibility, namely that of the Governmental strategies, correlated with the Government
credibility. In fact, the ability to foresee the future is probably the most valuable asset that
visibility is facilitating.
The capital and financing channels for innovation activities can, and should be
circumscribed to the “venture capital”-type of investments, with all its variants: seed
capital, risk capital etc.
As mentioned above in Romania the financing for RDI is very low, and this is true for
both the state and private financing.
In addition to the low RD levels, the financial resources allocated from the state budget
are used very inefficiently24. In these conditions, it is unlikely that the demand created
through public funding will meet the real demand from the industry. As long as the state
is not behaving as an exigent beneficiary of the financed projects, the research units will
not learn to produce marketable outcomes and the current situation with “many institutes
studying the same subjects for 20 years” will maintain.25
In our opinion, if budgetary funding is granted based on efficiency criteria, it might
operate as venture capital. The state funding channels should act as a real demand for
innovation, seeding a competitive market, both for companies and for other providers of
venture capital. However, the success of this solution strongly depends on the level of
corruption and transparence of the wider governance process.
For Romania, a country where budgetary financing is clearly driving the RD system, the
innovation system is strongly dependent on the quality and accountability of budgetary
financial support.
Private venture capital presence in Romania is marginal. Mainly general investment
funds are present, though in an insufficient number and with rather low level of portfolio
investments, which finance only occasionally innovative enterprises26.
The availability of private venture capital is not depending only on financial issues, but
also on some additional factors as:
24

The risk propensity. Being highly sensitive to risk, the private venture capital is
driven by the quality of the business environment.

The provider‘s capacity for technical evaluation. Involvement of the banks in
funding innovation depends on the existing resources for technology foresight.
Audit report of The Court of Accounts released in 2003 regarding the efficiency of the public funds
allocated to the National Research program Orizont 2000 (ongoing between 1996-2002, with a budget of
approximately 343 mill EUR). The Court of Accounts is the supreme body of external subsequent financial
control on the formation, administration and use of the financial resources of the state and the public sector.
Source: Gardianul, 15 November 2003.
25
Declaration of Alexandru Athanasiu – Minister of MERY during the debate “Romanian research- Where
to?”, in Adevarul, December 19th 2003
26
Panel study “The Venture Imperative – Forms and Instruments for financing innovation” realised by the
Center for Complexity Studies within the Forum Binary Capital Venture (Organised at ROMEXPO in
September 2003 by ARIES) www.noema.info

The provider’s insertion on the innovation market. A large part of the risk is
dependent on the ability of the capital provider to foresee the demand for the
innovation results.
Thus, the emergence of venture capital is strongly dependent of the visibility of the
knowledge in the financial area, and this is what enables transformation of uncertainty
into correctly estimated risk. The venture capital in itself is a knowledge intensive
activity whose businesses processes are essentially learning processes.
The innovation infrastructure mostly includes research-industry interfaces such as:
incubators, which provide basic infrastructure for start-ups; technological parks, which
provide experimental facilities; technological transfer centers; and the system of
intellectual property rights (IPR) protection. For all of them the issue of visibility is
connected with interfacing.
In what regards the infrastructure, in Romania, consistent policy measures have been
taken only since 2001-2002. According to the recently launched National Plan for
Developing the Infrastructure for Innovation and Technological Transfer, a (small)
budget of 25 mil EUR for 2003-2007 is destined to co-finance (with nonrefundable
funds) centers of technological transfer, centers of dissemination for the technological
information, offices for connection with industry, technological parks, technological and
business incubators.
A program for the development of industrial parks was issued in 2001 (approved by GD
1116/2001), becoming valid in 2002. Another direction regards the establishing of
science and technology parks, as well as software parks in a number of cities. Both the
Ministry of Education and Research and the Ministry of Communications and
Information Technology aim to attract to these parks mostly small, start-up companies
that cannot afford to pay large amount of money on rent or utilities. The intention is to
create such parks in every Romanian city that has a university center. Negotiations with
investors are at an advanced stage in five major cities, with the most advanced software
park already running in Galati. Software companies in the park benefit from real
incentives both from the State and local authorities that can range from the exemption of
income taxes for employees to commercially attractive rents. When the company reaches
a level of development sufficient for self-support, another company will take its place in
the park.
However, the policy centered on the creation of science and technology parks appears to
be mainly driven by real estate motivations rather than by technological development or
innovation interests. (Gheorghiu, Pîslaru, Turlea (2004))
Ministry of Education and Research estimates that around 50 business incubators have
been created, most of them private27, but no comprehensive list is available and, most
importantly, there is no relevant criteria for including them in this category other than the
simple denomination. No awareness campaign was launched to attract companies, there
27
There is no a full evidence of them. For a partial list see: http://www.mimmc.ro/consultanta/incub.php
are no monitoring mechanism and no efficiency criteria or targets for them to comply
with. The entire system is fuzzy and inefficient simply through its low visibility.
In what regards IPR, it is still appreciated only for its basic function, that of protection,
without consideration for its more important role, that of creating a market for
knowledge28. This situation is true both for policy makers and for companies. Thus, the
whole set of documents released by the Romanian authorities regarding the evolution of
research, development and innovation system is not even addressing the issue of patents
and it is only in 2004 that the grants for RDI are conditioned by patent applications.
The companies are neither interested in patenting, although the costs are not high. Law
64/2002 encourages patenting by public research organizations and universities by
offering 50% deduction for the registration fees at the State Office for Inventions and
Trade Marks. This, however, seems insufficient to act as an incentive.
Conclusions
Visibility of actors, resources and results is the way towards building a functional
innovation system. As innovation is about creating the new, thus about recombining, the
major policy challenge is to put highlight what has already been created, and to correlate
this with the up-to-date development of science and technology, before going further.
As valuable knowledge is supported and/or embedded by people or institutions, it is
important to create a competitive environment in which these people or institutions are
promoting their knowledge in order to get the maximum economic benefit they can.
The experience of Romania proved that the lack of visibility conducted to the lost
connection between research and industry, between the RD expenses and results,
situation that has driven the companies away from the innovation based competitiveness.
As mentioned, the major challenge is to extend the area of the innovation policies beyond
the RD activities. The immediate opportunity is the acceptance of innovation in services,
especially in software industry, where Romania has a certain advantage. Another possible
direction regards financial support for developing visibility programs in specific areas
(markets or communities), especially using ICT.
At this stage, for Romania the issue of visibility is related to the one of ensuring a real
competition for state RD financing, simultaneously with the market orientation of output.
This is critical in order to regain the credibility, both of the financing system and of its
beneficiaries. But this is only the first step in a learning process for all the players
involved, including the state institutions, in order to expand the visibility rules.
28
The Law 64/October 2002 encourages patenting by public research organizations and universities by
offering 50% deduction for the registration fees at the State Office for Inventions and Trade Marks. This,
however, seems insufficient to act as an incentive.
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