10 Policy considerations

Question 1

What are “technology” and “science” policies about?

Answer 1

“Technology policy” (lately renamed “innovation policy ”) refers to the ensemble of policies set in place by the government to motivate the development,
commercialization or adoption of new technologies on the side of private companies .

• Aim optimizing the interaction between the various components of the system
• Those policies are thus intended to solve the market failures leading to underinvestment in R&D

“Science policy”
refers to the measures introduced by a government to boost the generation of basic scientific knowledge on the side of universities and public research institutes.

Question 2

What type of technology policies can be implemented by the government and what is their aim?

Answer 2

Supply side policies
Aim: to promote the creation of new technology; they are at the margin with science
policies
This category includes:
- Public R&D spending in basic research and civilian technologies (all technologies developed for peaceful and not military purposes, such as commercial aircrafts,
computers, and telecommunications).
- Subsidies for private R&D
- Tax schemes

Demand side policies
Aim: to promote the adoption of new technologies according to a welfare optimal diffusion path by directly promoting or supporting the user.
This category includes:
- Financial subsidies for adoption of new technologies
- Information provision programs
- Government procurement
-Technical standards
-Government mandated technology transfer

Competition policies
This category includes:
- Antitrust policies, trade policies, “national champion” strategies

Question 3

What is the paper about?

Edler J., Georghiou L. (2007). Public procurement and innovation

Answer 3

 Governmental procurement and its role in demand side policies aiming at generating the potential for adoption of new technologies

 Main point new requirements and demand are the main sources of innovation and public procurement represents therefore one of the tools to create
an innovation friendly market

Question 4

Why has public procurement become an interesting tool to foster innovation?

Edler J., Georghiou L. (2007). Public procurement and innovation

Answer 4

Due to supply side innovation policies being insufficient to promote innovation, with particular references to their negative impact on competition

Question 5

What is the rationale behind public procurement?

Edler J., Georghiou L. (2007). Public procurement and innovation

Answer 5

Three reasons that justify public procurement:
 It constitutes an important part of the local demand because it enables he generation of a lead market
 Supposedly good at solving market failures
 The public infrastructure can become more efficient thanks to the adoption of
those innovations

Question 6

What are the arguments against public procurement about?

Edler J., Georghiou L. (2007). Public procurement and innovation

Answer 6

Public procurement is often perceived as a way of fostering innovation biased towards particular types of technologies

Question 7

What are the four most important aspects setting the framework for innovation procurement policies?

Edler J., Georghiou L. (2007). Public procurement and innovation

Answer 7

 Coordination across the innovation and financing ministries
 Combination of public procurement with measures enhancing private demand (catalytic approach to
 A clear definition of the markets and technologies that should be addressed by strategic procurement policies
 Need to set in place a sophisticated risk management able to cope with
innovations in public services

Question 8

Linkages between the topic of technology policies and knowledge as a public good (lecture 2)

Answer 8

Technology policy and…

Knowledge as a public good :
because knowledge can be easily transferred
(especially when embedded in product innovations), the innovator fails to fully appropriate the returns of her innovation, which might lead to underinvestment
in R&D

Question 9

Linkages between the topic of technology policies and intellectual property, patents, and open technologies (lecture 3)

Answer 9

Technology policy and…

Intellectual property, patents, and open technologies : intellectual property rights and patents create a temporary monopoly that enables the company to
charge higher prices for the innovation. For this reason, temptation is high to include patent law into technological (or innovation) policy.

Question 10

Linkages between the topic of technology policies and standardization and competition; Adoption of technology (lecture 4)

Answer 10

Technology policy and…
- Standardization and competition; Adoption of technology :
by setting high standards for product and processes, companies are motivated to innovate.
The fulfillment of those high standards also reassure the consumer about the quality of a product/production process and therefore helps generating the demand for the innovation;
demand side policies are in fact designed to boost
the adoption and diffusion of an innovation.

Competition policies shape the framework of technology policies and is always considered to be good for the development of an innovation;
for this reason, public procurement through open tenders is considered to be better than a
national champion strategy.

Question 11

Linkages between the topic of technology policies and regional aspects of innovation diffusion (lecture 6)

Answer 11

Technology policy and…
- Regional aspects of innovation diffusion :
demand side technology policies can positively contribute to the generation of a lead market that makes it more convenient for companies to locate in proximity of the market

Question 12

Linkages between the topic of technology policies and financing aspects of investments in R&D (lecture 7

Answer 12

Technology policy and…
-Financing aspects of investments in R&D:
supply side policies include subsidies for private R&D and favorable tax schemes