3.1. Some definitions

• – Imagination: it has no anchor in reality, and by turning all constraints into abstractions, it leaves room for the imagination to think of solutions, developments and activities that in fact have little or no basis in reality.
• – Creativity: there are very many definitions of creativity, although they are not contradictory, many authors adapt the definition to the problems they have to solve. According to Wikipedia, a general definition would be the following: “an individual or group’s capacity to imagine or build and indeed implement a new concept, or object or to discover an original solution to a problem” [WIK 18a]. On a practical level, real creativity means implementing a practical application. Initially, this will call on divergent thinking, where solutions, links between ideas, etc. will be developed, then on convergent thinking to draw out possible solutions. Creativity can also be stimulated by brainstorming exercises during which, in the shortest amount of time, the largest number of ideas and links between these ideas will be suggested, but a diverse group of actors should be chosen so as not to have a single vision of the problem to be solved (which should be well identified before the brainstorming begins).
• – Research: should not be confused with innovation. It is a process that leads to the production of knowledge.
• – Invention: this is very similar to innovation, but an invention can be devoid of any commercial application, that is it will not necessarily lead to the creation of a product. It is not necessarily linked to a market.
• – Innovation: this is the transformation of “inventions into costs” according to Lewis Duncan [DUN 17]. In reality, in the context of innovation, two levels will be distinguished: first research and invention, then transforming the results of research on an invention into products or services likely to bring in revenue. Various types of innovation can be distinguished, which will be detailed at more length.

3.2. The innovation mechanism

Without going into detail and referring to the work of the European Union in this domain, two stages can be distinguished in the innovation process [ETZ 08].

The first is funding by linking research and teaching laboratories that will thus produce knowledge and expertise.

The second stage consists of transforming this knowledge and expertise into products and services likely to be accepted by the market and if possible exported.

With current competition and the crisis we are experiencing, it is no longer possible to be confined by ethical or political conviction at the first stage. This should of course be completed by the second stage. Being able to control the directions that research takes on a national and regional level largely ensures that the second level succeeds, that is the integration of knowledge created by national efforts at the economic level of maintaining or creating jobs. The best example of this process has been indicated by Elias Zerhouni (currently President for Global Research and Development on the Sanofi company) when he was the director of the National Institute of Health in the US:

“The success of American scientific research depends on the existing, implicit partnership between academic research, the government and industry. Research institutions have the responsibility to develop scientific capital. The Government finances the best teams through a transparent selection system. Industry holds the critical role of developing robust products intended for the public. This strategy is the key of American competitiveness and must be maintained”.

This is why many reports present innovation as one of the keystones of development and the creation of competitive advantages: the “Innovate America” report [COU 07] (United States), the Beffa [BEF 05] (France) report, the report by Innovation Canada, ‘Le pouvoir d’agir’ (the power to act) [INN 01], the Australian Government’s Innovation Report [AUS 07], etc.

This innovation mechanism will thus lead to the development of the “triple helix”, that is to the development of public/private partnerships (PPP) [OEC 04], in other words, to the birth of “clusters” or poles of competition in France. In fact, it is at the interface of the public/private sphere and of research that the best opportunity for innovation lies.

It should however be noted that currently, there is a critical trend for public/private partnerships. Some believe that this system introduces a number of inflexibilities at the administrative and legal levels that restrict the development of innovation.

3.3. Different types of innovation

In the Oslo [OEC 05] manual, developed by OECD and addressing innovation, we distinguish four types of innovation, to which a fifth must be added: frugal innovation. Remember that innovation does not only involve the field of research, but also the fields of all users, providers, and consumers. It will be applied to businesses, administrations, associations, etc. It is not geographically localized.

• – Product innovation: this corresponds to the introduction of a new goods or services. This definition includes significant improvements to technical specifications, components and material, to integrated software, user friendliness or other functional characteristics.
• – Process innovation: this is the implementation of a new or significantly improved production or distribution method. This notion involves significant changes in techniques, material and/or software.
• – Marketing innovation: this is the implementation of a new marketing method involving significant changes in a product’s design, condition, placement, promotion or pricing.
• – Organization innovation: this is the application of a new method for organization of practice, organization of the workplace or of relationships with those outside the company.
• – We add frugal innovation or Jugaad innovation, which consists of doing better with less, aiming for simplicity while considering the needs of the mass of users with low income, while retaining quality.

3.3.1. The development of innovation

Inside these different fields of applications, it will be necessary to distinguish methods for developing innovation. It is in this framework that breakthrough innovation, incremental innovation and open innovation will be considered.

3.3.1.1. Breakthrough innovation

This will replace what currently exists with something new. It introduces a break with what now exists and opens up a new field of application, on a technical level, the introduction of a new technology. For example, the vaccine against rabies developed by Pasteur. Before the vaccine, the disease was fatal, but since the invention of the vaccine, people now survive it. In many cases, a breakthrough innovation will lead to incremental innovations, and so to the development of cluster innovation.

3.3.1.2. Incremental innovation

This involves successive improvements to a product or the development, step by step, of technologies and skills either through endogenous development, or through exogenous development. This is what happened in South Korea which, starting from a subsistence agronomy around the 1960s, has now reached tenth place in the world. In fact, to reach an objective, it is always necessary to overcome a barrier to potential, whether technological, in research or in the creation of skills. This cannot occur very quickly, as in this case, the barrier to potential is too great and the project will fail. Take for example, the development of a medium-haul aircraft in Indonesia, which to our knowledge resulted in the development of only a few models.

The schema of Figure 3.2 applies for all types of innovation. For example, if we wish to progress from FDI (Foreign Direct Investments), real progress in assimilating technology can only be made if competencies have been developed (for engineers, technicians, managers, etc.) to able to understand and assimilate it. This is what happened in Malaysia for example, with the development of a national car, the “Proton”.

3.3.1.3. Open innovation

It was soon observed that if innovation remained the sole responsibility of a business’ staff, there would be a lack of vision resulting from sheer “incestuousness”. So gradually, new personnel became associated with the innovation process: providers, customers and even potential consumers, which could result in external technology insourcing or external expertise (exogenous development). Thus, business opened itself up to innovate better, collect new ideas and better grasp new needs. This has given rise, in the same order of thinking as LLs (Living Labs) for example. The image of a funnel has often been used with incomers who are assimilated into the existing market or to create new markets and/or products.

3.3.1.4. Frugal innovation or Jugaad innovation

This is a new type of innovation, created in India and in developing countries. It is an innovation that aims to satisfy the needs of individuals on low incomes, but by providing them with simple and good quality products. Some countries such as India, or developing countries, among some in Africa, have provided the ground for a detailed analysis of what is now convenient to call frugal innovation, or Jugaad innovation¹ [NAV 13] (self-help, DIY). One might also consult the book Intelligence économique à l’heure du Jugaad [DOU 15] which develops the key points for frugal innovation in detail. In fact, more and more voices are coming forward in France to say that our businesses should find broad opportunities for development by “hunting” in emergent markets. But the attempt to conquer these markets implies that it will be necessary to modify a number of behaviors for western business to be able to meet the needs of the new “middle” classes whose income is often in the order of 20,000 € (23,000 dollars) per year. Once these new behaviors are acquired, they can be transposed to western countries, the cradles for these businesses. Through frugal innovation, we again meet the basic concepts of circular economy. The principles of Jugaad innovation have been described in many publications and works and they showcase a number of traits, most of which relate directly to innovations developed by Indian, Chinese, African businesses, etc. India, the special case of this type of innovation, has been studied broadly and the following characteristic traits have been underlined:

• – doing more with less, this is often the way of meeting the needs of consumers who wish to satisfy a need without being offered endless “improvements” that are desirable for the manufacturer but not necessarily required by the customer. Meeting needs at the least cost by being aided cleverly by existing technologies;
• – thinking and behaving flexibly, this means above all knowing how to adapt to the demands of the market, without wishing to impose on them ever more complex and expensive solutions or products. Taking account of and knowing how to use the complex regulations that are endlessly appearing, whether for “consumer protection” or to erect barriers to entering certain markets;
• – aiming for simplicity, in the western world and especially in France, aiming for simplicity seems simplistic, hence the need to complexify things that are simple for them to be recognized, whether at the level of research, teaching, or industry. Western design offices are often disconnected from their customer bases and are developing ever more complex products and services, then they try to impose them on consumers via mass advertising;
• – integrating the marginalized and excluded, that is building on the ever larger masses of consumers, whose income is nevertheless comparable to that of westerners. Also considering existing niches, for example creating products for the aged [DOU 13b] (the silver age), without heading systematically toward electronics and interconnected objects, but while considering all their needs.

3.4. Restraints on developing innovation

A number of “classical” restraints are often presented, such as the NIH (Not Invented Here) complex, a narrow vision, focused on a market or on a product, this is the case for example with the Xeros business that developed the laser printer and the graphic interface internally. But Xeros’ management, focused on a single product and market, the photocopier, did not develop these technologies and they spread, leaving their creators (HP for laser printing, Apple for the graphic interface). This is even more damaging, as often one of the restraints on innovation is the initial cost, and in Xeros’ case, this stage had already been accomplished. Another restraint is the fact that innovating can initially be perceived by the business as a leap into the unknown, it is therefore necessary to make this leap, which is generally done by the head of the business or of top management for the most substantial businesses. For a business that already has a market and adapted products, the move via incremental innovation will be facilitated. They will be not be leaping into the unknown and will remain in a domain that has already been mastered. Nonetheless, businesses with financial capacity or a new, start-up type business will more easily employ breakthrough innovation; in the case of start-ups, it is one of the characteristics of their development.

But beyond these considerations, it is a new state of mind that must be acquired, both to open up more broadly to external developments and knowledge and to be aware of opportunities. Moreover, it should not be thought that restraints on innovation are located in precise “locations” within a business or institution. They can be found at all levels, from management, to the technician via the engineer, to sales, to personnel management, etc. Often, “people” are afraid of change and believe that the system in which they have developed will remain as it is for years. But, considering global development, the growth of competition, technological evolutions, new partnerships, etc., the current situation is ever more fluid and innovating becomes a need both in order to maintain one’s position, but also to evolve into new markets. In reality, competitiveness depends on dynamism when it comes to innovation and it is a sort of insurance for the future.

But therefore, it is necessary to examine what can hold this dynamism back [GAL 04]. These are cultural restraints. They are multiple, from validation by academic researchers to administrative hiccups, through an aversion to gain, through a lack of funds, through excessively high taxes on capital, but also through a development that is often organized into silos and which blocks any transversality. We will now examine some of these points, without going into detail, but by using various ideas developed among others by Pierre Battini [BAT 15] and Henri Dou [DOU 16]. Pierre Battini summarizes this problem well:

“France is a fantastic country, a land of discoverers, inventers and innovators, as many individual personalities demonstrate. Paradoxically, France is not ranked well in relation to other countries: it is classed 11^th in Europe and 23^rd in the world. And nevertheless, we maintain a public support system for innovation that is incomparable across the entire world. Many dysfunctions, a sprawling and paralyzing administration and very insufficient funding mainly explain these poor positions compared to competitors. Businesses and creators do not benefit enough from their effort and investment. Nevertheless, the solutions for a better ranking are known […] it only remains to implement them to obtain the best results for our economy and its development. The finding: to this day, we are being caught up by our competitors and will soon be overtaken”.

Henri Dou, among others, emphasizes for academic research:

“From 1965, the notion of competitiveness arrived in French research, leading publishers to publish their results in English-language journals, abandoning French and de facto diminishing the impact of French-language journals. This is a good example of contribution to the development of the French-speaking countries!”

In contrast, the Germans developed, for example for chemistry, an international, English-language review Angewandte Chemie International [COM 17], but kept a German edition [WIK 18b]. French scholarly societies, under the impulse of a few leaders, did not subscribe to this movement, which led “little by little” to diminishing the number of French reviews counted by evaluation bodies (both international and French), thus favoring English-language journals.

It must be understood that beyond political discourses indicating that research should aid the development of SMEs, SMIs and Mittelstands (Intermediate size companies), it is only very recently that the notion of industrial collaboration has been allowed in full in French research (and still with restrictions placed by some organizations). But what about the researcher? The researcher is often evaluated on criteria that are entirely or largely opposed to earlier discourse. In the majority of cases, and even when some of the researcher’s work involves teaching, it is scientific publications that count and mainly those that are published in a certain number of journals, among those counted by the WoS (Web of Science), journals which are broadly dominated by English-speaking editors [DOU 13b]. Thus, rather than moving in the same direction, French politicians are opposing one another and although start-ups and their funding are often discussed, it is often forgotten that there are, beyond creation ex nihilo, thousands of existing businesses that ought to receive help with R&D. This creates the question of how pertinent evaluations and the role of the “researcher” and the bodies they belong to are in our society, since this role is described as the social responsibility of research. In a competitive world, the importance of innovation and the transfer of university skills to industry are subject to critical analysis. Evaluation of researchers and financial methods of managing their research are no longer necessarily factors in development. The evaluation criteria applied to researchers and laboratories distance them from local concerns and, among others, from effective assistance that could help SME/SMIs that generate jobs. The lack of credence and the absence of a coherent policy are leading to a gradual disappearance of French influence at the level of international expertise. If France has some advantages, disadvantageous policy minimizes these. The search for consensus should be systematic to lead to a targeted industrial policy. We must also emphasize the importance of time and space, which should be considered by an ideally technologically acculturated political body, which brings into question the role of the state as a shareholder.

3.5. Science, technology and innovation policies

Without going into detail, as this would exceed this book’s remit, we will use the 2014 report from OECD, Science Technology and Industry Outlook, as a source of information to make a quick point about current trends in science, technology and innovation (STI) policies.

Currently, China has a driving role in developing R&D. Developing countries such as India and Brazil, to escape stagnation resulting from the increase in salaries which is making them less competitive in using their resources (middle income trap [WIK 18c]), have no solution other than to increase their innovation capacity, hence a policy to invest in research and education in particular. In Europe, there is a contrasting picture, some countries are on an upward trajectory and others are lagging behind. Globalization is leading many countries to develop innovation ecosystems that should make it possible to make investments. We are also seeing a growth in the fiscal conditions making it possible to attract foreign R&D centers to these countries. Recent developments are often concentrated on general worries such as climate change, aging populations and environmental subjects. In parallel, societal focal points such as our aging populations, which could be the source of major innovation, lack coherence and finance. We are also witnessing a convergence between disciplines such as information technologies and bio and nano sciences, which calls for greater interdisciplinarity. Even though the crisis has had substantial disruptive effects, public investment in R&D has not diminished over this period. In many countries, conditions for lending are even harsher for SMEs and SMIs, particularly where interest rates are too high. In Europe, the level of venture capital is lower than before the crisis, which has led to an increase in state funding, but also to the development of new sources of funding (crowdfunding) [STU 17], or the use of short-term funding outside the banking system (business-business credit, factoring, etc.). Public R&D plays a major role in innovation systems; the funds allocated to universities and public research centers rose from 57% of public R&D in 2007 to 61% in 2012. To ensure greater relevance (in the context of the innovation mechanism already described) funding is increasingly allocated to individual projects and in a competitive context. In the best case scenarios, there is a mix of institutional finance and finance allocated to individual projects. Transferring the results of research to the commercial sector is becoming a major objective. Thus, the notion of the market was introduced upstream of research and strong initiatives were developed to promote the commercialization of results obtained from public finance. This has led to transfer offices becoming increasingly professionalized. The progression of “open science”² [WIK 18d] (or open research) should lead eventually to the development of new policies determining different aspects of research funding and the protection of results, but also the ways in which science and society should interact.

3.5.1. Innovation systems

Innovation and technology should help to improve productivity, make the structure of industry more dynamic and rise to meet global challenges. The rise in the power of global value chains (raw materials, technical resources, manpower, advertising, etc. involved in producing a good or service), the already central role of entrepreneurship, the search for new sources for growth and the challenges posed by environmental and social questions have introduced new objectives and new instruments for intervention. Recent interest in “innovation systems” illustrates a change of political paradigm in some countries toward innovation policies that support socio-economic transformation on a large scale. These attempts may have profound repercussions on the make-up of policies and mechanisms of governance. According to OECD, the innovation system and all the public and private actors who, through their interactions, create, transfer and manage knowledge are responsible for the creation of new products and new technologies. The actors are very diverse: research centers, universities, businesses, various kinds of associations, etc. But the innovation system will also cover legal aspects (tax, funding, for example research tax credit in France), administrative aspects (all kinds of approaches), protection of intellectual property, access to information, broadband links, transport and facilities, etc.

In this way, each country can identify all the actors as well as all those other aspects linked to the country itself that are involved in developing innovation. This constitutes a national, indeed regional innovation system. These networks of course include aspects of the innovation mechanism already described. In addition, whether they are national or regional, they can foster international relationships through “open research”.

3.5.2. A quick comparison between France and Germany

France and Germany are very often compared without any real points of reference. In the study carried out by OECD (already cited), a simple graph makes it possible to summarize and display the differences between the two countries. The whole is shown in Figures 3.5 and 3.6.

On the one hand, the lack of industrial development in France can be seen clearly, and on the other hand, the prominence of services in France, as well as the very high presence of industrial businesses in Germany can also be seen. We also note the low number of SMEs in Germany, which the larger businesses make up for. We also see for France a drop in sectors involving local businesses, industry and advanced technology between 2007 and 2011. This is a substantial loss in four years. One can also consult the study published by Benjamin Pelletier [PEL 11] which also shows a summary of this comparison.

3.5.4. Innovation in Asia

There is no question of providing a complete panorama in this context, but we will however provide some indications about current trends in China, Japan and South Korea.

3.5.4.1. South Korea [PAS 16]

South Korea moved from an income in the order of US$ 62 per inhabitant around the 1960s to an income equivalent to countries such as Israel now. This effort was made through massive state investment, but also by developing technological tools (education, technological universities, technology centers, a rise in the quality of technologies, the development of large conglomerates such as Samsung for example) and a national development plan to determine strategic technologies useful for the future of South Korea [TAE 10]. But competition from other Asian countries such as China and Japan led to a drop in profits and indeed to losses. A new policy is thus being drawn up, not to spend everything on large conglomerates, but to develop entrepreneurship through large incubator creation programs, technology transfer accelerators (of which 60 are operational) and start-ups. This is the program for implementing a creative economy at the same time as stimulating capital investment in risk. Moreover, South Korea is a market that, for some developments, can suffice in itself. With an educated population, good universities, a recognized capacity to work and a penetration rate for broadband Internet in the order for 100%, the home market is an interesting base for developing new applications, which makes South Korea the world champion in convergence. It is in this way that the plan for a creative economy has identified six strategies [WIK 18e]:

• – strategy 1: creating an ecosystem in which creativity is equitably compensated and where it is easy to create a new business;
• – strategy 2: strengthening South Korea’s global position and playing a prime role in the creative economy through high-risk businesses and small and medium-sized businesses;
• – strategy 3: creating new engines for growth to develop new products and new markets;
• – strategy 4: educating creative talents on a global level;
• – strategy 5: strengthening competencies to innovate for S&T and TIC as foundations for the creative economy;
• – strategy 6: developing the culture of a creative economy in which people and the government work together.

3.5.4.2. Japan

In Japan, we do not find barriers between fundamental research and applied research. Laboratories can carry out both, provided they are high-level laboratories, whether in public or private. So, this distinction which often pollutes the climate of French research in particular does not exist. The state defines priorities and finances their development. Japan faces different challenges [QUA 16]: it needs to tackle an aging population, to increase its innovative potential and open itself to the outside world. The share of GDP devoted to research is around 3.3% while that of those in OECD is around 2.3%, and what is remarkable is the continuity in this investment over time. R&D is piloted on a national level. Development, which stopped in 2016, prioritized the environment, energy, health and medical care.

Japan’s strength lies in, among other factors, its university research potential – it has 750 universities (state, public or private) that benefit from more freedom to develop their research, protect it and develop it. In parallel, a start-up development program was put in place with the Start program (Program for Creating Start-ups from Advanced Research and Technology). In fact, all large Japanese businesses appeared in the 1970s and it does indeed seem that Japan wishes to diversify its development into more dynamic and innovative businesses. The broad outlines of the Start program are shown in Figure 3.7 [JAP 17].

The Start program aims to create university start-ups in three years. It is not normally permitted to extend the period during which support is provided. However, support can, in some cases, be prolonged for up to five years to validate the initial concept.

The need for such a program is based on the fact that university start-ups find it very difficult to develop distribution channels and markets, to ensure gains and collect revenues, as they do not generally have enough expertise to create advertising concepts and strategies for intellectual property. The aim is to give Japan global superiority in some breakthrough technologies, such as robotics, medical equipment, connected objects and the environment.

3.5.4.3. China

China is currently a motor for global R&D. There are numerous policies in China for making innovation more dynamic. Without being exhaustive, we will expand upon some of those that seem important. For more information on this subject, one can consult the document produced by the French Embassy in China [AMB 17]: Les politiques de soutien à l’innovation en Chine. The strengthening of innovation policies in China is a priority for 2006–2020; these policies aim to strengthen innovation development in business. Innovation policies have been implemented in domains such as taxation, intellectual property, attracting talent, making the sciences more popular or even in developing new innovation platforms. The favored technologies are the following: electronics, biology/medicine, aviation/aerospace, new materials, high technology services, new energy sources, environmental technologies and the transformation of traditional sectors. Although support for technology programs is relatively well-known as well as the development of research in universities (among others, technological universities), less well-known are the fiscal incentives that appear to be one of the main engines for innovation in businesses in China. These are the following:

• – independent R&D centers: (these are created according to particular methods). They are exempt from customs and VAT on import (especially for the purchase of equipment), taxes on income lower than 85 million yuan (around 10 million euros) and only 50% is paid above this limit;
• – businesses in high and new technologies: these firms have a 15% tax on their income (for the details of these firms’ labels, consult the document from the French Embassy cited above);
• – businesses located in technology parks: these benefit from substantial fiscal advantages. They are exempt from income tax for the first three years, pay only 7.5% in taxes from the fourth to the sixth years, then 15% from the seventh year;
• – a substantial reduction in R&D expenses: businesses that have made real advances in the area of R&D can deduct 50% of their total expenses from the income tax they pay;
• – venture capital type funding structures also benefit from reduced taxes;
• – technology transfers including revenue can benefit from a tax reduction in the order of 50 to 100%.

It can also be seen, if we compare these incentives to those put in place in many other countries, that the fiscal aspect is much more developed. It is therefore evident that a focus on research and transfer are naturally considered important in Chinese policy, but that it is also vital that they are accompanied by a realistic fiscal side that makes profit a real “recompense for the efforts undertaken” as a “catalyst”.

It should also be noted that at the same time, an accompanying program for intellectual property should be put in place [AMB 12], this aims to endow Chinese businesses with a patent portfolio equivalent to their foreign competitors. This program particularly strengthens the way Chinese patents are examined so as to have criteria corresponding to those of similar offices in the USA, WIPO, EPO, etc.

At university level, it is noteworthy that even though China developed the “Shanghai ranking”, global or US universities are taking the lion’s share of it, “internal” rankings for Chinese universities use different criteria. Although there is some polarization around high-ranking publications, in the internal ranking, scientific publications count for 1 and patents for 3. It is in this way that, for example, the University of Tsinghua deposited more than 4,000 patents per year (these 4,000 deposits include only very few utility models). Without predicting how long this policy will last, it is clear that it “draws” fundamental research applications and because of this, becomes a catalyst for innovation.

3.5.5. The European Union and innovation

In its chart on innovation, the European Union notes that it is catching up with Japan and the United States. It thus distinguishes [EUR 16a]:

• “–’innovation leaders’: Sweden leads, followed by Denmark, Finland, Germany and the Netherlands, whose results in innovation are well above the EU average;
• – ‘strong innovators’: Austria, Belgium, France, Ireland, Luxembourg, the United Kingdom and Slovenia, whose innovation results are greater than or close to the EU average;
• – ‘moderate innovators’: Cyprus, Croatia, Spain, Estonia, Greece, Hungary, Italy, Latvia, Lithuania, Malta, Poland, Portugal, the Czech Republic and Slovakia, whose innovation results are lower than the EU average;
• – ‘modest innovators’: Bulgaria and Romania, whose innovation results are clearly lower than the EU average”.

Regional poles of innovation are present, even in moderate innovators. The following conditions are needed to develop high-level innovation:

• – combining a suitable level of public and private investment;
• – having effective innovation partnerships between businesses and with universities;
• – developing a solid teaching base and research excellence.

Here, we see the main characteristics already examined in this section. We also note that financial incentives are not indicated. This only affects the “technical” domain while some countries such as China rank financial incentives at an appropriately high level.

In the “innovation scoreboard” from 2016, the European Union showed a map of the different levels of innovation within it [EUR 16b], represented in Figure 3.8.

For innovation leaders, we note that for two years, there has been a decline in performance; only Denmark is maintaining positive growth. Figure 3.9 shows change in the first two groups of countries.

In the innovation scoreboard we also find a comparison between the EU and other countries. Some of these comparisons are shown below:

• – South Korea is more innovative than the EU, and leadership in innovation has increased over the past eight years;
• – the US has been more innovative than the EU, but return is constantly dropping;
• – Japan has always been more innovative than the EU;
• – Canada’s performance in innovation was higher than the EU’s until recently, but it is now slightly behind;
• – Australia’s performance in innovation is behind the EU’s and their innovation gap is slowly growing;
• – China’s performance in innovation is far behind that of the EU, but its relative performance has increased greatly, moving from 26% of the EU average in 2008 to 40% in 2015;
• – Russia’s performance in innovation is far behind that of the EU, even though the gap between the two has been reduced;
• – Brazil’s performance in innovation is behind that of the EU and is stagnating;
• – India’s performance in innovation is well below those of the EU, but have remained relatively stable over time;
• – South Africa’s performance in innovation is far behind that of the EU and is stagnating;
• – finally, it is notable among the diverse countries who are “EU competitors”, businesses’ R&D expenses as a percentage of GDP are significantly greater; this is shown in Figure 3.10.

3.6. Public innovation policies in France

France has, for a decade and with some continuity, made innovation an imperative at the political level. Because of this, diverse policies have been developed [FRA 16]. These aim to move French industry away from imitation and toward innovation. The France Stratégie report underlines, among other aspects, a dispersal of objectives, which should create a need to refocus. Moreover, it underlines that of the 10 billion euros dedicated to supporting innovation, 6.4 billion come from research tax credit (CIR). This is 60% of the total support compared to 17% in the year 2000. As the France Stratégie report indicates:

“Symmetrically, direct aid essentially in the form of subsidies, has been practically halved in real terms over the period. These subsidies currently represent 19.1% of support, compared to 81% in 2000. In correlation we see, over the last 15 years, a reduction in the means allocated to each national project: excluding tax and social reductions, the average size has dropped from 126 to 39 millions euros” [FRA 16].

This leads to:

“A sizeable institutional reorganization [that] has been undertaken, with the implementation of two major actors: the commissariat général à l’investissement (General investment commission) (CGI), which manages future investment programs (the PIA), and the public investment bank (Bpifrance), which supports and funds businesses’ innovation efforts. The PIA’s innovation programs represent in average annual flow 57% of direct support and Bpifrance funding, in grant equivalents, represents 37% (including action by the PIA managed by Bpifrance)”.

The five current, major objectives currently pursued are the following:

• – increasing private R&D capacity;
• – growing the economic benefits of public research;
• – developing projects for cooperation between actors;
• – promoting innovative entrepreneurship;
• – supporting the development of innovative businesses.

3.7. Conclusion

The solutions for creating an ecosystem favorable for innovation development are relatively homogenous in most countries. The basis is to choose strategic technologies and for their development to be financed by the State via universities and research centers (a difference appears however between countries where businesses’ level of investment in R&D is low). There is then a need to transform the knowledge and competencies created into products and services that will bring in money. This happens through public/private partnerships, but the general trend is for big businesses to be involved, certainly, but for the emphasis to be placed on creating new businesses that are more dynamic and reactive. Some countries, to develop high-risk activities (economic policies based on possible future technologies), are turning to universities and research centers with public funding. A policy on intellectual property generally accompanies these efforts.

But, although this forms the central body around which development will hinge, it is also necessary to consider administrative barriers, to simplify procedures, compensate innovators financially, create substantial financial incentives and not to consider failure as prohibitive. It is also necessary, but this will go hand in hand with research, to develop high-level training programs as well as “traditional” but also “technological” universities.