Key Mechanisms of the Innovation Strategy

She noted that larger budgets are necessary but insufficient for successful science and innovation policy; spending the resources in the right way is equally important. Taking into account best practices of the international environment, particularly from the European context, the Flemish government had developed an innovation strategy creating appropriate funding mechanisms and instruments to monitor and evaluate its policy on a regular basis. She summarized the main characteristics as follows:

  1. Maintain a double budgetary balance—part for academic basic research and technology innovation, and part for higher education institutes and industry.

  2. Adopt a bottom-up approach. Apart from the strategic research centers, the government has set few thematic priorities, funding instead projects proposed by the researchers themselves.

  3. Give universities and interuniversity research institutes, such as IMEC, a large degree of autonomy. The Flemish government sets out annual block grants, long-term performance targets, and long-term management agreements. Performance-based funding is the key.

Addressing the “Innovation Paradox”

In 2003, the Flemish government concluded an Innovation Pact with key players from academia and industry to reach the 3 percent Barcelona target. The Flemish Science Policy Council (VRWB) was designated to monitor the execution of the pact, using 11 key indicators. The first findings, published in 2005, were that Flanders is characterized by an average innovation profile and was insufficiently able to transfer excellent (academic) research findings into innovative products or added societal value—the “innovation paradox” that afflicts most European and other countries. Just a few, mostly international, companies accounted for all industrial research in Flanders, leaving the economy vulnerable to external events and corporate decisions.

The challenge was to reduce the innovation paradox, which meant reducing a traditional culture gap between industry and academia. Academic researchers had long felt that working in industry corrupts the academic career, diminishes publication output, and restrains academic freedom. At the same time, industry described a structural mismatch between the research agenda of academia and the research needs of industry.

A recent study by the Catholic University of Leuven (K.U.Leuven) sent more positive signals about the interaction between industry and academia. It suggests that the gap between industry and academia is shrinking. First, the study estimated that in 2005 about 10 percent of all R&D in Flanders was performed by academic-industry partnerships. This was in line with statistics in the Third S&T Indicators Report by the European Commission (2003), which found that the rela-

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