A politics of innovation

The Swiss example

Translation kindly done by Anne-Mari de Grazia.

Two events took place in Lausanne in recent days, allowing us to make out what could be called a specific « model » for the development of innovation strategies in French-speaking Switzerland. The first, the « Russian-Swiss Innovation Day, » organized at the initiative of Mr. Frederik Paulsen, honorary consul of Russia, gathered specialists, administrators and political leaders (from Russia as well as from Switzerland), and also entrepreneurs from both countries around the theme of innovation.

PaulsenFrederik Paulsen

Honorary consul of Russia in Lausanne

 

The second event, the «Forum des 100 » (100-Forum), was organized by the weekly L’Hebdo. Now a very important, and successful event which is held every year since 2005, it  gathered this time over 850 people around the theme of the « complexity of the world, ». But this amounted to a pretext for talking about innovation. These two events allowed for a close examination of a cluster centering around Lausanne and its area which one may consider to be a model, made up of universities (such as UNIL and EPFL [1] among others), a number of public and private laboratories, some of them housing giant projects such as Human Brain, and businesses of all sizes from the start-up over the middle-sized company to the multinational.

The hurdles on the way to Silicon Valley

The question of how to succeed in creating a dynamic cluster centered on innovation was, of course, at the heart of the « Russian-Swiss Innovation Day ». Those in charge of the Skolkovo project, named after the district at the outskirts of Moscow where the government intends to develop the equivalent of aSilicon Valley, were of course at hand to expose their vision of the project. Announced with much fanfare by D. Medvedev at the time when he was still President of Russia, this project seems to have dwindled considerably. One numbers today (2013), according to Mikhail Myagkov, the vice-President of the Skolkovo institute, thirty-eight students at Skolkovo and is expecting at most some two thousand to be there by the year 2018. Which is to say that we are far removed not only from the great  innovation platforms presented by Silicon Valley or the Boston area (the Road 101), but also by the Toulouse area (Aerospace) in France, or the platform of Orsay. Skolkovo is of a puny size even when compared with the center made up by EPFL and UNIL around Lausanne. The strategy which presided to the Skolkovo center being created around an obscure management school is at the opposite of what can be observed in these other development hubs.

Vetterli

Mr. Vetterli, President of the National Research Council (Switzerland)

From this point of view, the presentations which were made by the President of EPFL, Mr. Patrick Abisher (who was present at both events), as well as by Dominique Arlettaz, the Rector of UNIL or Martin Vetterli, the President of the National Research Council (who were present at the 100-Forum) contrasted with the cliché discourse of the representatives of Skolkovo. The Swiss speakers insisted on three points which, in their own eyes, had been essential for the constitution of an « innovation district » around Lausanne.

The first is the presence of large, multi-disciplinary institutions of upper learning guaranteeing the existence of a breeding-pool for innovation, thanks both to professors and to advanced students. In this regard, it was all-important to hear the specialists of the natural sciences defend pluri-disciplinarity among the sciences of nature (from biology to informatics over chemistry and mechanics) as much as between the natural and the social sciences (psychology, anthropology, economics…). The researcher of the XXI century works in a team and « thinks globally, » not so much on a geographical scale than regarding the number of overarching disciplines which are necessary to the realisation of the project he is working on. It was not for nothing that this concept was at the very heart of a large conference organized in Paris on May 2013 (16-18) and was forcefully promoted by the administrator of the French Foundation for the Human Sciences, Mr. Michel Wieviorka (2).

The second point is the importance of public financing. This latter is essential both for the development of basic research, but also for a large part of applied research. As a matter of fact, the various Swiss public funds contribute to the height of 75% to 90% (according to the projects) to the total financing. At a time of unrelenting bragging [in France] about the merits of PPP (Public Private Partnership) it was good to see the truth of numbers restated. Not that PPP is superfluous or useless. It can be an excellent means of finding financing at a precisely defined stage of the project. But the public dimension of financing remains largely preponderant in Switzerland and this could be one of the reasons for the ultimate success of the « Swiss » model. Moreover, private financing raises prickly problems concerning the scientific and intellectual independance of researchers. Mme Isabelle Chassot, President of the Conference of Directors of Public Education, an organisation functioning at the national level, reminded of the necessity of precise rules framing private financing.

I. Chassot

Mrs. Chassot, President of the Conference of Directors of Public Education (CH)

The third essential point, strongly stressed by various speakers, is a spirit of openness, directed as much at the researchers coming from around the world as at companies, whether these are coming in to settle, attracted by the « spirit of innovation », or whether they are being created (start-ups). On this precise point, the speakers have insisted on the great « mortality » among start-ups (around 90%). They have stressed that this « mortality » of companies is by no means abnormal, even if, in Switzerland, it ran against traditional representations according to which failure carries a strong negative stigma. In fact, taking into account the extreme novelty of the domains in which these companies are developing, failure is statistically the rule, rather than the exception.

Innovation in Russia: truth and false

One might think therefore that Russia got itself mired in a project without a future. This is by no means the case. Going back to the Russian-Swiss Innovation Day, other speakers have pointed out that innovation is developing rapidly in a great many cities in Russia. As a matter of fact, for four years now, all the great state universities and Specialized Schools have created innovation parks and incubators. The best known of these is doubtless the one at the University of Novosibirsk, but others exist in the great university centers. Mrs Irina Ananich, director of strategic cooperation at the Russian energy agency, Mr Alexander Yakunin director of the department of radio-electronic industries within the Ministry of Industry and Commerce, or Mr. Maxim Cherednichenko, vice-Director of the Belgorod center of alternative energies, have multiplied examples of the setting up of « grapes » of innovation, translating into important industrial developments. These « grapes » are largely the product of an intense interaction between a high quality scientific potential and direct or indirect financing by the State. Industrials, be they Russians or foreigners, have not been blind to this, and are developing (or taking stakes in) companies situated near parks and incubators where these « grapes » of innovation are developing.

The example of Novosibirsk is the best known and over fifty companies have already emerged from the incubator to become promising middle-sized enterprises both in regard to employment, and as to production and profits. The Ministry of Industry and Commerce has attracted numerous foreign companies (from Germany to Japan over China and Korea) to settle around the innovation parks, and this has given birth both to new capacities of production and to mixed-companies in innovating fields. Mrs Ananich has insisted on the potential represented by the Russian agricultural sector, concerning bio-materials as much as the development of alternative forms of energy. Here, too, international cooperation has developed broadly, including the participation of numerous French and Italian companies in the development of new processes, and in their industrialisation. The director of the department of innovation of Rostekhnology (a state enterprise) and the Rector of the Baumann Institute of Moscow have insisted on the synergies building over several years between fundamental research and the development of applications, the industrialisation of which is then carried out by Rostekhnology, either through public capital firms or through mixed companies.

Skolkovo must not, therefore, become the tree that hides the forest. Innovation develops rapidly in Russia, but Skolkovo will not play the pivotal role which the government wished. This doesn’t leave Skolkovo without a role to play. At it’s own scale, which is by force reduced, this project can bear fruit and allow for the working out of innovations. Especially, through the Management School of Skolkovo, it can produce specialists in the management of innovative projects.

The pressing need of a politics of innovation

To go back to the experience of French-speaking Switzerland, the latter brings to the light several urgent necessities if one wants a progressive development and spread of an economy of innovation.

The first of these necessities is the development of an important research potential. But to obtain this, it seems that one will have to abstain from the rules of evaluation which are now so wide-spread in France and in the European Union countries. The rector of UNIL, M. Arlettaz, has criticized in no uncertain terms the evaluations made on the basis of disciplines and largely founded on the « flow » of publications by the means of bibliometry.

 Arlettaz

Mr. Alettaz, Rector of UNIL

The most efficient research, according to his own words, is pluridisciplinary. The most important publications are not, morevoer, those made in the most famous journals. The principle of a ranking of journals and publications reveals itself to be counterproductive for the development of research, as several of the speakers pointed out. This is particularly savory when one considers the methods used and abused by the Agence d’Évaluation de la Recherche et de l’Éducation Supérieure en France (AERES). In this regard, Switzerland intends by no means to adopt the European system. One must hope that Russia, too, who has found itself during these past years in a process of convergence with European institutions, will know how to cut its losses and will not adopt a system the perverse effects of which are already visible in France.

The second necessity is the development of a strong demand for innovative products. In the absence of a demand, innovation is condemned to remain at the laboratory stage or at the stage of the prototype. Demand can emanate from the State or from public collectivities. This is particularly the case for defense and security systems, but also for advanced medical equipment and large information systems. Demand can also come from households, and one can well see, from the development of informatics but also of new construction materials that, in some sectors, this demand carries forward a large part of the innovation. Finally, demand can emanate from industry, including in industrial activities which appear a priori as the most traditional. The examples given, be it at theRussian-Swiss Innovation Day or at the Forum des 100, fully agree on this point. Metallurgy is one of the activities the processes of which will be calling more and more on new technologies and on new products. From this point of view, the abandonment of the site of Florange by the French government could turn out to be a major blunder, if not amount to high treason. The production of energy, the industry of construction materials but also the clothing industry are branches, too, which are already, or which will shortly become great users of these new technologies. We must therefore break with a largely ideological representation which states that a new technology incarnates itself always in a new activity. This can be the case, but, much more often than is generally believed, it is the traditional branches which are the main users of new technologies and of their products. This is well understood in Russia where the branches of metallurgy (ferrous and non ferrous), the extractive industries, the transport industries have been identified as important for innovation. One sees here that the discourse of substituting so-called « ancient » activities with so-called « new » activities proves to be profoundly misleading. In order for innovation to be able to develop, one must maintain, which is to say, pay the price for maintaining, so-called « traditional » activities which will continue producing their products with the help of fundamentally renewed techniques.

A third necessity resides in the setting up of a global financing system which will allow both to provide funds for projects at the microecenomic level, but which will also favor, through the creation of an adequate macroeconomic context, the continuing development of demand which will provide these projects and these enterprises with their needed outlets. This implies both that one must create specialized institutions (such as banks for the financing of burgeoning enterprises or equally specialized investments funds) but also that one must have the means to act upon the macroeconomic policies at a most general level, such as avoiding the overevaluation of the currency, which is profoundly destructive for these burgeoning activities, and assuring a reasonable level of protection and a supply of liquidities in order to favor demand.

Innovation cannot be ordained and it is not born from people who jump around on chairs yelling « let’s innovate, let’s innovate! ». It implies a comprehensive thinking of economic policies and of the research and education systems. It also implies mainting a balanced economic fabric, and therefore, if the case arises, to save activities which a short-sighted view would condemn. It finally implies thinking through the financing in all its complexity and making sure that microeconomic as well as macroeconomic instruments (and first of all monetary policy) be coherent with such a policy. None of this is easy, and some of these instruments might find themselves in contradiction with the present rules prevailing in the European Union. But, in any case, these two events in which we were privileged to participate prove at the very least that the Swiss economy exists well beyond the caricature triptych of banks-watches-and-chocolate!

[1] Ecole Polytechnique Fédérale de Lausanne.

[2] Michel Wieviorka (dir.), « Penser global », Socio, n°1, Mars 2013, Maison des Sciences de l’Homme.


Jacques Sapir

Ses travaux de chercheur se sont orientés dans trois dimensions, l’étude de l’économie russe et de la transition, l’analyse des crises financières et des recherches théoriques sur les institutions économiques et les interactions entre les comportements individuels. Il a poursuivi ses recherches à partir de 2000 sur les interactions entre les régimes de change, la structuration des systèmes financiers et les instabilités macroéconomiques. Depuis 2007 il s'est impliqué dans l’analyse de la crise financière actuelle, et en particulier dans la crise de la zone Euro.

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