STEEP Discussion Paper No 41
Academy-Industry Relations for Innovation in Poland
Andrzej Jasinski
University of Warsaw, Bialystok Branch
September 1997
Science Policy Research Unit
Mantell Building
University of Sussex
Brighton
East Sussex BN1 9RF
Tel: +44 (0)1273 686758
Fax: +44 (0)1273 685865
© Andrzej Jasinski 1997
Acknowledgements
This study was carried out within the framework of an international research project on 'Innovation Potential as Embodied in Changing Academy-Industry Relations in Eastern Europe', headed by Dr Katalin Balazs of the Institute of Economics, Hungarian Academy of Sciences, and financed by the Central European University. The author wishes to thank Dr D A Dyker for invaluable help in the preparation of the paper.
Contents
Page
1Introduction1
2Institutional and Non-Institutional Links - a Sample Survey5
3Three Case Studies8
3.1Enterprise Development Centre, Warsaw9
3.2Centre for Emerging Technologies, Warsaw12
3.3Swingtherm Ltd, Kraków17
3.4Conclusions19
4A Government Policy for AIR in Poland?20
Appendix23
Bibliography24
Diagrams
Map 1Technology Centres, Established or in the Process of Being Established4
(Not present in electronic version)
1
1INTRODUCTION
Academy[1]-industry relations (AIR) play a crucial role in the process of technological change in a modern market economy, and it is significant that these linkages are better developed in Western countries than in Central and Eastern Europe. AIR can be divided into two main groups
aInstitutional forms
bNon-institutional forms (contract work, etc).
I shall consider both forms in this paper.
At present there are three main types of institutional structure in the field of academy-industry relations in the developed market economies
1Science parks, technology centres and innovation centres
2Bridging institutions (technology transfer brokers)
3Spin-off firms
In Poland, academy-industry linkages have always been very weak, especially in terms of institutional forms. They still constitute one of the main weak points within the national system of innovation of the country (Jasinski, 1992). But that is not to say that Poland was a complete desert as far as institutionalised AIR are concerned before fundamental economic reform started in 1990. Let us now look at the three main types of institutionalised AIR in turn, and assess their importance in the pre-reform period.
As far as science parks, etc are concerned, there was simply no development in the Western sense.
As regards bridging institutions, it is fair to say that Poland has had some modest experience in this field. There have been various, though not numerous institutions which had the capability to act as brokers for the transfer of domestic technology. The Vojvodship Invention and Rationalisation Clubs, for instance, did provide a network of this kind. Recently, however, many of them have become moribund or even closed down altogether on account of financial problems The fate of the staff thus made redundant is not known.
In addition, two Technical Progress Centres were created - one in Warsaw, one in Katowice. The two centres do, in fact, still exist, although they have changed profile somewhat, now placing much more stress on business consultancy, training, and services in connection with the organisation of fairs, exhibitions and seminars. The Katowice centre, it should be added, has ambitions to transform itself into a real innovation centre. Finally, the POSTEOR organisation was established in Poznan at the beginning of the 1970s, charged with the implementation of 'technico-economic change' within the framework of a network of local branches. POSTEOR no longer exists in its original form, though parts of its network survive in a purely trading function.
As to spin-off firms, the phenomenon did appear in Poland in the late 1980s - but only on a very small scale. For example, High Technology Centre 3N was established in Warsaw under an agreement between two leading physics research institutes and the WISTOM synthetic fibres factory. 3N no longer operates in its original form, but it did provide a springboard for a new institution called CETE (see below). It is probable that other spin-offs emerged at this time, but they have not yet been researched.
In the early 1990s new and positive trends started to emerge in the field of academy-industry relations in Poland. In 1991, the Council of Entrepreneurship Incubators was established under the auspices of the Ministry of Industry and Trade, acting since 1993 under the title of Association of Polish Business and Innovation Centres. Under the auspices of the Council/Association, a plan was prepared in 1992for the creation of a number of business incubators in Poland, including several technology centres. Eight of the latter have now been included in a programme coordinated by the Task Force on Technological Commercialisation, which is nested within the Cabinet Office. The eight incubators nominated under the programme are located in Gdansk, Kraków, Poznan, Zielona Góra, Kalisz, Plock, Katowice and Warsaw (see map).
The four technology centres that have actually been set up have been supported by modest levels of financial support from domestic public sector and/or foreign sources, viz.-
Poznan - from UNDP, the Polish State Committee for Scientific Research (KBN) and the local authorities
Kraków - from the PHARE Programme
Gdansk - from the local authorities (office space) and the German Ministry of Economics
Warsaw (Enterprise Development Centre) - from the Polish Ministry of NationalEducation and the Foundation for Polish Science, which operates within the framework of KBN
Up to now, the only one of these initiatives that has been a real success is the Enterprise Development Centre in Warsaw, which is discussed in greater detail below. The reasons why the Poznan, Krakow and Gdansk centres have taken so long to establish and develop requires further investigation. The other four have yet to get off the ground.
Map 1: Technology Centres, Established or in the Process of Being Established, in Poland
This, then, is the institutional framework within which academy-industry relations evolve in Poland. In the following two sections we analyse, in turn, the general pattern of development of these institutions, and of the non-institutional contractual relationships that have linked them to R&D users (using sample survey material) and the detailed development of selected individual institutions (on the basis of in-depth case studies)
2INSTITUTIONAL AND NON-INSTITUTIONAL LINKS - A SAMPLE SURVEY[2]
The main points to emerge from the sample survey are as follows (see Jasinski, 1994, for more detail):
1Contract work as a form of AIR plays only a minor role among the organisations questionnaired, and is particularly undeveloped among institutes of the Polish Academy of Sciences (PAS). Within the contract work that is carried on, purely business contracts seem to have an undesirable preponderance vis-à-vis contracts in connection with research collaboration. Even in the universities, non-R&D contracts are a key element in the 'survival kit'.
2Contracts are relatively better developed as a form of AIR in relation to organisations specialising in industrial R&D. But in these cases the subject of the contracts is usually development rather than basic or applied research. Since these organisations 'stand' closest to industry, this result is hardly surprising.
3PAS organisations show the greatest 'distance' from industry. Manufacturing firms rarely place orders with even the most renowned institutes of the Polish Academy of Sciences. The majority of PAS partners are from outside industry - usually other scientific institutions.
4The PAS institutes surveyed seldom work together with business incubators or bridging institutions. Nor do they produce many spin-offs.
5PAS organisations continue to be financed mainly from the science budget, administered by KBN. While it may be considered normal for institutes specialising on pure science to receive substantial state support, it is clear the PAS institutes tend to rely too much on government funding. In addition, the structure of state funding of PAS activities is wrong. In 1994 nearly two-thirds of the total sum of money involved was in the form of grants made to specific institutions with respect to their 'statutory activity' (ie essentially core funding), and only 16 % from project-specific grants. It is clear that PAS organisations need to wean themselves off state support, and become much more active in seeking non-budgetary sources of financing for R&D.
6Industrial R&D organisations enjoy very little financial support from the budget. As a result, they are forced, as a matter of survival, to extend or initiate in-house production - inevitably to the detriment of research itself. In more than half the organisations of this type surveyed, non-R&D activity was the main source of finance, and only 11% of their work could be classified as basic or applied research.
7The best structure of research financing seems to be among the technical universities. It is in this sub-sector that the project-specific research grant has emerged as a really important form of research funding.
8While it is inevitable that financially hard-pressed institutes and universities will take on non-R&D contract work as a matter of survival, there is plenty of scope for improving the structure of contract work through a more proactive approach. At present, institutes and universities tend to be largely passive, waiting for partners to knock on the door, rather than going out and looking for them.
9Industrial R&D organisations, spurred on by their particularly difficult financial situation, are the most active when it comes to seeking out external partners for contract work.
10All forms of research organisation show a strong attachment to familiar directions of research. PAS units are particularly conservative in this respect, while universities show some capacity to develop radical new research orientations.
11The market is still not the main driving force behind contract research, and the science-push model continues to predominate in engineering and related fields in Poland.
12State-owned firms, usually large ones, are still the main industrial partners for the R&D sector. This may be partly because demand for R&D services from private firms is simply insufficiently developed. Whatever the reason, links between public-sector R&D organisations and private firms are clearly too weak.
13The phenomenon of spin-off firm still does not exist on a large scale. Where internal brain drain does take place, the people involved normally set up their own businesses outside the sphere of science and technology. And where spin-off firms are set up, the founders rarely maintain close cooperative links with the 'parent' research organisation, so that the kind of positive symbiosis that has been noted, eg in Hungary (see Balázs, 1996), does not seem to be well developed in Poland. To what extent the weaknesses of the Polish spin-off sector are a function of the attitudes of those concerned, or of the business and regulatory environment for spin-offs, is not apparent, and the issue is clearly a matter for further research.
14Other forms of relationship between academy and industry are weak and undifferentiated. In particular, cooperation between research institutes and technology or innovation centres/incubators and bridging institutions is weak - for PAS units virtually non-existent.
Although the survey was carried out in 1994, the following key conclusions are as valid today as they were then
Following from 13 and 14 above, the key linking institutions discussed in the Introduction have very little impact on mainstream R&D organisations in Poland.
Generally speaking, producing commercially-oriented results and winning orders and contracts is not a strength of the Polish R&D system
Industrial R&D organisations have stronger and more differentiated linkages with industry than other types of research institute, and these linkages represent the biggest potential for innovation. For PAS units, the challenge is simply to begin to address these issues. The situation in the universities is relatively stable, but much remains to be done in terms of building links with the market.
The actors in this particular drama - the academic world, industry and government - all seem to underestimate the importance of good AIR for an effective innovation process. It is particularly unfortunate that government refuses to play the (obvious) role of catalyst in this connection.
Against the background of so many weaknesses in the Polish system of AIR, it is surely worth studying at least some of the numerous, and well documented, experiences of the Western countries in this field.
3THREE CASE STUDIES
While the Western experience of 'best practice' is invaluable as a model, it is also worth looking at the (isolated) cases of highly positive development in Poland itself (see Jasinski, 1997). This we now do, on the basis of research done through questionnaire interviews[3] plus follow-up investigations with three selected organisations. In giving our study more depth in this way, we are also able to incorporate the most recent material.
3.1Enterprise Development Centre at Warsaw Technical University
The Enterprise Development Centre (EDC) was established in December 1991 as a joint initiative of Warsaw Technical University (WUT) and the Business-Higher Education Forum of the American Council on Education. It was, therefore, in Katalin Balázs's (1996) terms, a top-down initiative. It has the legal status of a non-profit-making unit of the Technical University, and is therefore strictly a public-sector organisation. The EDC's main aim is to promote entrepreneurship in the WUT community by encouraging the formation and development of small, technology-oriented firms. This general aim breaks down into the following sub-goals:
1To provide favourable start-up conditions for entrepreneurs;
2To help firms get access to WUT resources in pursuit of business goals;
3To give advice on business issues, and to encourage start-ups to seek advice elsewhere - and use it;
4To keep the WUT community informed of business opportunities, as they emerge.
The main source of finance for the EDC is grants from the WUT, supplemented by the monthly rents of the firms affiliated to the Centre. Initially, funds to cover operating expenses were received from the Polish Ministry of National Education.
At the end of 1996 the EDCwasmaintaining a small office, divided between three sites, and occupying a total of 1,100 sq m. The office directly employs four people. Around ten small firms rent out premises from the Centre and subscribe to the business services offered by it. Most of the ten firms were established by current or former WUT employees, or by WUT students. The tenant companies are engaged in the provision of a wide range of products and services, including software, medical equipment, lasers and precision vacuum technology. All of the technologies concerned were developed at Warsaw Technical University.
The development and success of the firms affiliated to EDC is heavily dependent on the personal commitment of the scientists involved to the implementation of their technological ideas. The normal pattern is to pass gradually from a 'soft' on to a 'hard' stage of operating, thus exemplifying the pattern of development of high-tech SMEs in the West, as described and analysed by Bullock (1983). The majority of the affiliated enterprises can be classified as spin-offs.
EDC has a clear-cut material interest in the success of 'its' firms, since it is financially dependent on their rents and payments for support services. Within the general orientations described above, EDC helps start-ups specifically by
Giving them floor space
Helping them to find orders - the first orders do, in fact, usually come from the Technical University itself
Helping with the preparation of documentation
Providing both upstream and downstream contacts - with highly qualified personnel, on the one hand, and potential clients on the other
In addition to its facilitating and mediating work, EDC carried out in 1994-95 a research project of its own, on prospects for, and barriers to, the commercialisation of high technologies originating in Poland. The project was funded by the Foundation for Polish Science. The affiliated firms also carry on research in their fields of interest on a small scale. These research programmes normally represent extensions - in a practical and marketable direction - of research being done in the University itself. At its present stage of development, therefore, EDC is clearly a university incubator.
The biggest obstacles to the future development of the Enterprise Development Centre are
1Lack of formal independence, in the sense that EDC is not a legal personality.
2Absence of any systematic financial support from the central government; there are no fiscal incentives, and no preferential credit arrangements, for incubators like EDC
3Lack of support from local government, eg in relation to the provision of a single, integrated site for the Centre.
To this must be added a certain lack of clear strategic thinking on the part of EDC itself. While they are clear that they want to be more independent of the University management, they are undecided between two options
to transform themselves into a non-profit-making foundation
or
to create a science park built around EDC. This could be done in collaboration with WUT, which has a piece of land in the suburbs of Warsaw, and/or with the local authorities.
Clearly, the future will not be easy for EDC. To survive as a fully independent organisation would be an enormous challenge. But EDC is probably the most advanced 'technology centre' in Poland, and I believe that the science park idea is a practicable one.
3.2Centre for Emerging Technologies, Warsaw
The Centre for Emerging Technologies (CETE) was established in November 1991, and formally registered as a limited liability company in December 1992. Its shareholder are: the International Foundation for Science and Technology in Warsaw, PAS, the University of Warsaw and Warsaw School of Economics. The idea originated from a group of scientists working in the Academy of Sciences High Pressure Institute 'Unipress', and it was they who originally created the International Foundation for Science and Technology at the end of the 1980s. CETE employs three people, and has 300 sq m of office space inside the Unipress building. The Centre is an independent, self-financing company, but is largely controlled by the International Foundation for Science and Technology, which holds 70% of its shares.
CETE is designed to mitigate some of the difficulties Polish companies face when they try to develop new technologies - by creating individually tailored advisory groups for each new technology. These groups, known as 'CETE Partners', provide field-specific advice, assistance and training, with a view to assuring the success of indigenous Polish technologies. CETE's main aim is accordingly to work closely with Polish entrepreneurs and scientists to establish technology-based SMEs or set up licensing arrangements. The key elements in CETE's approach are